Form 8-K
0001666134 False 0001666134 2021-11-04 2021-11-04 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  November 4, 2021

_______________________________

BLACKLINE, INC.

(Exact name of registrant as specified in its charter)

_______________________________

Delaware001-3792446-3354276
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

21300 Victory Boulevard, 12th Floor

Woodland Hills, California 91367

(Address of Principal Executive Offices) (Zip Code)

(818) 223-9008

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareBLNASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 
 
Item 2.02. Results of Operations and Financial Condition.

 

On November 4, 2021, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number Description
   
99.1 Press Release dated November 4, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 BLACKLINE, INC.
   
  
Date: November 4, 2021By: /s/ Mark Partin        
  Mark Partin
  Chief Financial Officer
  

 

EdgarFiling

EXHIBIT 99.1

BlackLine Announces Third Quarter Financial Results

LOS ANGELES, Nov. 04, 2021 (GLOBE NEWSWIRE) -- BlackLine, Inc. (Nasdaq: BL), today announced financial results for the third quarter ended September 30, 2021.

Marc Huffman, CEO, commented, “Our momentum continued in the third quarter driven by broad-based demand for our solutions and strong execution, resulting in another quarter of solid financial performance. Companies are emerging from the pandemic with a greater sense of urgency to upgrade outdated back-office systems and to improve their financial processes. We believe this is the beginning of the next large and enduring investment cycle in financial and accounting systems.”

Third Quarter 2021 Financial Highlights

Key Metrics and Recent Business Highlights

The financial results included in this press release are preliminary and pending final review. Financial results will not be final until BlackLine files its Quarterly Report on Form 10-Q for the period. Information about BlackLine’s use of non-GAAP financial measures is provided below under “Use of Non-GAAP Financial Measures.”

Financial Outlook

Fourth Quarter 2021

Full Year 2021

Guidance for non-GAAP net income attributable to BlackLine and non-GAAP net income attributable to BlackLine per share does not include the impact of the provision for (benefit from) income taxes related to acquisitions, amortization of acquired intangible assets, stock-based compensation, the amortization of debt discount and issuance costs, the change in fair value of contingent consideration, acquisition-related costs, the adjustment to the value of the redeemable non-controlling interest to the redemption amount, and the loss on extinguishment of convertible senior notes. Reconciliations of non-GAAP net income attributable to BlackLine and non-GAAP net income attributable to BlackLine per share guidance to the most directly comparable U.S. GAAP measures, or net income (loss) attributable to BlackLine and net income (loss) attributable to BlackLine per share, are not available on a forward-looking basis without unreasonable efforts due to the unpredictability and complexity of the charges excluded from non-GAAP net income attributable to BlackLine and non-GAAP net income attributable to BlackLine per share. The company expects the variability of the above changes could have a significant, and potentially unpredictable, impact on its future GAAP net income (loss) attributable to BlackLine and net income (loss) attributable to BlackLine per share.

Quarterly Conference Call

BlackLine, Inc. will hold a conference call to discuss its third quarter results at 2:00 p.m. Pacific time on Thursday, November 4, 2021. A live audio webcast will be accessible on BlackLine’s investor relations website at https://investors.blackline.com. The call can also be accessed domestically at (844) 229-7595 and internationally at (314) 888-4260, passcode 1487693. A telephonic replay will be available through Thursday, November 11, 2021 at (855) 859-2056 or (404) 537-3406, passcode 1487693. A replay of the webcast will be available at https://investors.blackline.com/ for 12 months. BlackLine has used, and intends to continue to use, its Investor Relations website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

About BlackLine

Companies come to BlackLine, Inc. (Nasdaq: BL) because their traditional manual accounting processes are not sustainable. BlackLine’s cloud-based solutions and market-leading customer service help companies move to modern accounting by unifying their data and processes, automating repetitive work, and driving accountability through visibility. BlackLine provides solutions to manage and automate financial close, accounts receivable and intercompany accounting processes, helping large enterprises and midsize companies across all industries do accounting work better, faster and with more control.

Over 3,700 customers trust BlackLine to help them close faster with complete and accurate results. The company is the pioneer of the cloud financial close market and recognized as the leader by customers at leading end-user review sites including Gartner Peer Insights, G2 and TrustRadius. Based in Los Angeles, BlackLine also has regional headquarters in London, Singapore, and Sydney. For more information, please visit blackline.com.

Forward-looking Statements

This release and the conference call referenced above contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “would,” “continue,” “ongoing” or the negative of these terms or other comparable terminology. Forward-looking statements in this release and quarterly conference call include, but are not limited to, statements regarding BlackLine’s future financial and operational performance, including, without limitation, GAAP and non-GAAP guidance for the fourth quarter and full year of 2021, our expectations for our business, including the demand environment, BlackLine’s addressable market, market position and pipeline, our international growth, our relationships with our customers and partners, including opportunities to expand those relationships, the impact of the COVID-19 pandemic on our business, our market and our industry, and the trends in our industry, including digital finance transformation.

Any forward-looking statements contained in this press release or the quarterly conference call are based upon BlackLine’s historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith beliefs and assumptions as of that time with respect to future events, and are subject to risks and uncertainties. If any of these risks or uncertainties materialize or if any assumptions prove incorrect, actual performance or results may differ materially from those expressed in or suggested by the forward looking statements. These risks and uncertainties include, but are not limited to risks related to the company’s ability to attract new customers and expand sales to existing customers; the extent to which customers renew their subscription agreements or increase the number of users; the company’s ability to manage growth and scale effectively, including additional headcount and entry into new geographies; the company’s ability to provide successful enhancements, new features and modifications to its software solutions; the company’s ability to develop new products and software solutions and the success of any new product and service introductions; the success of the company’s strategic relationships with technology vendors and business process outsourcers, channel partners and alliance partners; any breaches of the company’s security measures; a disruption in the company’s hosting network infrastructure; costs and reputational harm that could result from defects in the company’s solution; the loss of any key employees; the impact of the COVID-19 pandemic and related measures taken by governments and private industry; continued strong demand for the company’s software in the United States, Europe, Asia Pacific and Latin America; the company’s ability to compete as the financial close management provider for organizations of all sizes; the timing and success of solutions offered by competitors; changes in the proportion of the company’s customer base that is comprised of enterprise or mid-sized organizations; the company’s ability to expand its enterprise and mid-market sales teams and effectively manage its sales forces and their performance and productivity; fluctuations in our financial results due to long and increasingly variable sales cycles, failure to protect the company’s intellectual property; the company’s ability to integrate acquired businesses and technologies successfully or achieve the expected benefits of such transactions; unpredictable and uncertain macro and regional economic conditions; seasonality; changes in current tax or accounting rules; cyber attacks and the risk that the company’s security measures may not be sufficient to secure its customer or confidential data adequately; acts of terrorism or other vandalism, war or natural disasters including the effects of climate change; the impact of any determination of deficiencies or weaknesses in our internal controls and processes; and other risks and uncertainties described in the other filings we make with the Securities and Exchange Commission from time to time, including the risks described under the heading “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter end June 30, 2021 filed with the Securities and Exchange Commission on August 5, 2021 and the Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on February 25, 2021. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. Forward-looking statements should not be read as a guarantee of future performance or results, and you should not place undue reliance on such statements. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. All of the information in this press release is subject to completion of our quarterly review process.

Use of Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles, or GAAP, BlackLine has provided in this release and the quarterly conference call held on November 4, 2021 certain financial measures that have not been prepared in accordance with GAAP defined as “non-GAAP financial measures,” which include (i) non-GAAP gross profit and non-GAAP gross margin, (ii) non-GAAP operating expenses, (iii) non-GAAP income (loss) from operations, (iv) non-GAAP net income (loss) attributable to BlackLine, Inc. and non-GAAP net income (loss) attributable to BlackLine, Inc. per share, (v) and free cash flow.

BlackLine’s management uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to the corresponding GAAP measures, in evaluating BlackLine’s ongoing operational performance and trends and in comparing its financial measures with other companies in the same industry, many of which present similar non-GAAP financial measures to help investors understand the operational performance of their businesses. However, it is important to note that the particular items BlackLine excludes from, or includes in, its non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures has been provided in the tables included as part of this press release.

Non-GAAP Gross Profit and Non-GAAP Gross Margin. Non-GAAP gross profit is defined as GAAP revenues less GAAP cost of revenues adjusted for the amortization of acquired developed technology and stock-based compensation. Non-GAAP gross margin is defined as non-GAAP gross profit divided by GAAP revenues. BlackLine believes that presenting non-GAAP gross margin is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison of gross margin between periods.

Non-GAAP Operating Expenses. Non-GAAP operating expenses include (a) non-GAAP sales and marketing expense, (b) non-GAAP research and development expense and (c) non-GAAP general and administrative expense. Non-GAAP sales and marketing expense is defined as GAAP sales and marketing expense adjusted for the amortization of acquired intangibles and stock-based compensation. Non-GAAP research and development expense is defined as GAAP research and development expense adjusted for stock-based compensation. Non-GAAP general and administrative expense is defined as GAAP general and administrative expense as adjusted for the amortization of acquired intangibles, stock-based compensation, the change in fair value of contingent consideration, acquisition-related costs, and legal settlement gains. BlackLine believes that presenting each of the non-GAAP operating expenses is useful to investors as it eliminates the impact of certain cash and non-cash expenses and allows a direct comparison of operating expenses between periods.

Non-GAAP Income (Loss) from Operations. Non-GAAP income (loss) from operations is defined as GAAP income (loss) from operations adjusted for the amortization of intangible assets, stock-based compensation, the change in fair value of contingent consideration, acquisition-related costs, and legal settlement gains. The company believes that presenting non-GAAP income (loss) from operations is useful to investors as it eliminates the impact of items that have been impacted by the company’s acquisitions and other related costs in order to allow a direct comparison of loss from operations between all periods presented.

Non-GAAP Net Income (Loss) attributable to BlackLine. Non-GAAP net income (loss) attributable to Blackline is defined as GAAP net income (loss) adjusted for the impact of the provision for (benefit from) income taxes related to acquisitions, amortization of intangible assets, stock-based compensation, the amortization of debt discount and issuance costs from our convertible notes, the change in the fair value of contingent consideration, acquisition-related costs, legal settlement gains, the adjustment to the value of the redeemable non-controlling interest to the redemption amount, and the loss on extinguishment of convertible senior notes. Non-GAAP diluted net income (loss) per common share includes the adjustment for shares resulting from the elimination of stock-based compensation.  The company believes that presenting non-GAAP net income (loss) is useful to investors as it eliminates the impact of items that have been impacted by the company’s acquisitions and other related costs in order to allow a direct comparison of net loss between all periods presented.

Free Cash Flow. Free cash flow is defined as cash flows provided by operating activities less cash flows used to purchase property and equipment, financed and otherwise, capitalized software development, and intangible assets. BlackLine believes that presenting free cash flow is useful to investors as it provides a measure of the company’s liquidity used by management to evaluate the amount of cash generated by the company’s business including the impact of purchases of property and equipment and cost of capitalized software development.

Use of Operating Metrics

BlackLine has provided in this release and the quarterly conference call held on November 4, 2021 certain operating metrics, including (i) number of customers, (ii) number of users and (iii) dollar-based net revenue retention rate, which BlackLine uses to evaluate its business, measure its performance, identify trends affecting its business, formulate financial projections and make strategic decisions. These operating metrics exclude the impact of Runbook licensed customers and users as these customers did not have an active subscription agreement with BlackLine as of September 30, 2021.

Dollar-based Net Revenue Retention Rate. Dollar-based net revenue retention rate is calculated as the implied monthly subscription and support revenue at the end of a period for the base set of customers from which the company generated subscription revenue in the year prior to the calculation, divided by the implied monthly subscription and support revenue one year prior to the date of calculation for that same customer base. This calculation does not reflect implied monthly subscription and support revenue for new customers added during the one-year period but does include the effect of customers who terminated during the period. Implied monthly subscription and support revenue is defined as the total amount of minimum subscription and support revenue contractually committed to, under each of BlackLine’s customer agreements over the entire term of the agreement, divided by the number of months in the term of the agreement. BlackLine believes that dollar-based net revenue retention rate is an important metric to measure the long-term value of customer agreements and the company’s ability to retain and grow its relationships with existing customers over time.

Number of Customers. A customer is defined as an entity with an active subscription agreement as of the measurement date. In situations where an organization has multiple subsidiaries or divisions, each entity that is invoiced as a separate entity is treated as a separate customer. In an instance where an existing customer requests its invoice be divided for the sole purpose of restructuring its internal billing arrangement without any incremental increase in revenue, such customer continues to be treated as a single customer. BlackLine believes that its ability to expand its customer base is an indicator of the company’s market penetration and the growth of its business.

Number of Users. Historically, BlackLine’s products were priced based on the number of users of its platform. Over time, the company has begun to sell an increasing number of non-user based products with fixed or transaction-based pricing. For this reason, we believe the growth in the number of total users is less correlated to the growth of the business overall.

Media Contact:
BlackLine
Kimberly Uberti
Kimberly.uberti@blackline.com

Investor Relations Contact:
BlackLine IR
Investors@blackline.com



BlackLine, Inc.
Consolidated Balance Sheets
(in thousands)
(unaudited)
   
  September 30, 2021 December 31, 2020
ASSETS    
Cash and cash equivalents $378,977  $367,413 
Marketable securities  798,952   175,206 
Accounts receivable, net of allowances for credit losses  105,042   111,270 
Prepaid expenses and other current assets  18,462   20,226 
Total current assets  1,301,433   674,115 
Capitalized software development costs, net  22,077   15,690 
Property and equipment, net  13,167   13,239 
Intangible assets, net  38,244   46,674 
Goodwill  289,710   289,710 
Operating lease right-of-use assets  6,798   8,708 
Other assets  78,963   65,369 
Total assets $1,750,392  $1,113,505 
     
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY
Accounts payable $2,175  $3,150 
Accrued expenses and other current liabilities  38,869   35,958 
Deferred revenue  209,608   191,137 
Short-term portion of operating lease liabilities  3,589   4,147 
Short-term portion of contingent consideration  2,008   7,938 
Total current liabilities  256,249   242,330 
Operating lease liabilities, noncurrent  5,463   7,356 
Convertible senior notes, net  1,097,973   407,032 
Contingent consideration  18,056   15,552 
Deferred tax liabilities  9,511   6,566 
Deferred revenue, noncurrent  276   75 
Other long-term liabilities  75    
Total liabilities  1,387,603   678,911 
     
Redeemable non-controlling interest  22,049   12,524 
     
Stockholders' equity:    
Common stock  586   577 
Additional paid-in capital  609,433   622,768 
Accumulated other comprehensive income  157   376 
Accumulated deficit  (269,436)  (201,651)
Total stockholders' equity  340,740   422,070 
     
Total liabilities, redeemable non-controlling interest, and stockholders' equity$1,750,392  $1,113,505 
     



BlackLine, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
         
  Quarter Ended Nine Months Ended
  September 30, September 30,
   2021   2020   2021   2020 
Revenues        
Subscription and support $102,924  $83,875  $289,749  $238,777 
Professional services  6,478   6,282   20,631   17,250 
Total revenues  109,402   90,157   310,380   256,027 
Cost of revenues        
Subscription and support  17,948   11,700   50,540   34,708 
Professional services  6,489   5,282   19,359   15,082 
Total cost of revenues  24,437   16,982   69,899   49,790 
Gross profit  84,965   73,175   240,481   206,237 
Operating expenses        
Sales and marketing  48,799   42,588   146,410   129,199 
Research and development  18,843   14,829   56,611   38,423 
General and administrative  11,372   17,794   59,886   51,314 
Total operating expenses  79,014   75,211   262,907   218,936 
Income (loss) from operations  5,951   (2,036)  (22,426)  (12,699)
Other income (expense)        
Interest income  231   648   412   4,142 
Interest expense  (16,110)  (5,914)  (46,582)  (17,340)
Other income (expense), net  (15,879)  (5,266)  (46,170)  (13,198)
Loss before income taxes  (9,928)  (7,302)  (68,596)  (25,897)
Provision for (benefit from) income taxes  (210)  555   (78)  871 
Net loss  (9,718)  (7,857)  (68,518)  (26,768)
Net loss attributable to non-controlling interest  (252)  (425)  (733)  (1,081)
Adjustment attributable to non-controlling interest (a)  4,275   1,319   10,366   4,239 
Net loss attributable to BlackLine, Inc. (a) $(13,741) $(8,751) $(78,151) $(29,926)
         
Basic net loss attributable to BlackLine, Inc. per share:        
Basic net loss attributable to BlackLine, Inc. per share (a) $(0.23) $(0.15) $(1.34) $(0.53)
Shares used to calculate basic net loss per share  58,508   57,063   58,196   56,619 
Diluted net loss attributable to BlackLine, Inc. per share:        
Diluted net loss attributable to BlackLine, Inc. per share (a) $(0.23) $(0.15) $(1.34) $(0.53)
Shares used to calculate diluted net loss per share  58,508   57,063   58,196   56,619 
         
(a) During the third quarter of 2020, the Company identified that, commencing in 2019, it had incorrectly calculated its quarterly adjustment to the carrying value of its redeemable non-controlling interest with a corresponding impact to net loss attributable to BlackLine, Inc., adjustment attributable to non-controlling interest, and basic and diluted net loss per share attributable to BlackLine, Inc. The Company corrected the $1.5 million cumulative impact of such prior-period errors as an out-of-period adjustment in the quarter ended September 30, 2020.



BlackLine, Inc. 
Consolidated Statements of Cash Flows 
(in thousands) 
(unaudited) 
          
  Quarter Ended Nine Months Ended 
  September 30, September 30, 
   2021   2020   2021   2020  
CASH FLOWS FROM OPERATING ACTIVITIES:         
Net loss attributable to BlackLine, Inc. $(13,741) $(8,751) $(78,151) $(29,926) 
Net loss and adjustment attributable to redeemable non-controlling interest  4,023   894   9,633   3,158  
Net loss  (9,718)  (7,857)  (68,518)  (26,768) 
Adjustments to reconcile net loss to net cash provided by operating activities:         
Depreciation and amortization  6,743   5,178   20,175   14,615  
Change in fair value of contingent consideration  (10,346)  (72)  (3,426)  (148) 
Amortization of debt discount and issuance costs  16,031   5,758   39,272   16,874  
Stock-based compensation  16,930   13,326   48,789   35,398  
Loss on extinguishment of convertible senior notes        7,012     
Noncash lease expense  1,202   1,186   3,387   3,557  
Accretion of purchase discounts on marketable securities, net  (88)  301   (158)  (333) 
Net foreign currency (gains) losses  35   (237)  478   (275) 
Deferred income taxes  (14)  17   40   179  
Provision (benefit) for credit losses  (29)  233   (55)  373  
Changes in operating assets and liabilities         
Accounts receivable  (4,233)  7,152   5,436   11,557  
Prepaid expenses and other current assets  (282)  (627)  1,646   (3,143) 
Other assets  (4,272)  (2,278)  (13,609)  (5,684) 
Accounts payable  (1,751)  (3,891)  (985)  (4,569) 
Accrued expenses and other current liabilities  5,305   6,668   3,665   (1,032) 
Deferred revenue  2,993   (1,725)  18,672   3,056  
Operating lease liabilities  (1,432)  (1,343)  (3,854)  (3,734) 
Net cash provided by operating activities  17,074   21,789   57,967   39,923  
          
CASH FLOWS FROM INVESTING ACTIVITIES:         
Purchases of marketable securities  (374,094)     (1,107,908)  (116,400) 
Proceeds from maturities of marketable securities  100,000   36,723   484,209   460,982  
Proceeds from sales of marketable securities           25,959  
Capitalized software development costs  (3,677)  (2,844)  (11,240)  (7,838) 
Purchases of property and equipment  (3,475)  (291)  (5,197)  (2,515) 
Cash paid for pending acquisition     (121,433)     (121,433) 
Purchases of intangible assets           (2,333) 
Net cash provided by (used in) investing activities  (281,246)  (87,845)  (640,136)  236,422  
          
CASH FLOWS FROM FINANCING ACTIVITIES:         
Proceeds from issuance of convertible senior notes, net of issuance costs        1,128,794     
Partial repurchase of convertible senior notes        (432,230)    
Purchase of capped calls related to convertible senior notes        (102,350)    
Proceeds from employee stock purchase plan        5,197   3,608  
Proceeds from exercises of stock options  2,629   3,871   7,679   14,287  
Acquisition of common stock for tax withholding obligations  (2,713)  (1,272)  (12,649)  (6,128) 
Financed purchases of property and equipment  (128)  (169)  (549)  (394) 
Net cash provided by (used in) financing activities  (212)  2,430   593,892   11,373  
          
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash  3   88   (201)  130  
Net increase (decrease) in cash, cash equivalents, and restricted cash  (264,381)  (63,538)  11,522   287,848  
Cash, cash equivalents, and restricted cash, beginning of period  643,816   471,888   367,913   120,502  
Cash, cash equivalents, and restricted cash, end of period $379,435  $408,350  $379,435  $408,350  
          
Cash and cash equivalents at end of period $378,977  $408,070  $378,977  $408,070  
Restricted cash included within prepaid expenses and other current assets at end of period  203   19   203   19  
Restricted cash included within other assets at end of period  255   261   255   261  
Total cash, cash equivalents, and restricted cash at end of period shown in the consolidated statements of cash flows $379,435  $408,350  $379,435  $408,350  
          



BlackLine, Inc. 
Reconciliations of Non-GAAP Financial Measures 
(in thousands, except percentages and per share data) 
(unaudited) 
          
  Quarter Ended Nine Months Ended 
  September 30, September 30, 
   2021   2020   2021   2020  
Non-GAAP Gross Profit         
Gross profit $84,965  $73,175  $240,481  $206,237  
Amortization of developed technology  675   176   2,010   527  
Stock-based compensation  2,213   1,871   6,190   4,900  
Total Non-GAAP Gross Profit $87,853  $75,222  $248,681  $211,664  
Gross margin  77.7%  81.2%  77.5%  80.6% 
Non-GAAP gross margin  80.3%  83.4%  80.1%  82.7% 
          
Non-GAAP Operating Income:         
Income (loss) from operations $5,951  $(2,036) $(22,426) $(12,699) 
Amortization of intangible assets  2,630   1,622   8,430   4,787  
Stock-based compensation  16,930   13,326   48,789   35,398  
Change in fair value of contingent consideration  (10,346)  (72)  (3,426)  (148) 
Acquisition-related costs     1,790      1,790  
Total non-GAAP operating income $15,165  $14,630  $31,367  $29,128  
          
Non-GAAP Net Income Attributable to BlackLine, Inc.         
Net loss attributable to BlackLine, Inc. (a) $(13,741) $(8,751) $(78,151) $(29,926) 
Provision for (benefit from) income taxes related to acquisitions  (636)  35   (409)  (53) 
Amortization of intangible assets  2,630   1,622   8,430   4,787  
Stock-based compensation  16,877   13,326   48,695   35,398  
Amortization of debt discount and issuance costs  16,031   5,758   39,272   16,874  
Change in fair value of contingent consideration  (10,346)  (72)  (3,426)  (148) 
Acquisition-related costs     1,790      1,790  
Adjustment to redeemable non-controlling interest (a)  4,275   1,319   10,366   4,239  
Loss on extinguishment of convertible senior notes        7,012     
Total non-GAAP net income attributable to BlackLine, Inc. $15,090  $15,027  $31,789  $32,961  
Basic non-GAAP net income attributable to BlackLine, Inc. per share:       
Basic non-GAAP net income attributable to BlackLine, Inc. per share (a) $0.26  $0.26  $0.55  $0.58  
Shares used to calculate basic non-GAAP net income per share  58,508   57,063   58,196   56,619  
Diluted non-GAAP net income attributable to BlackLine, Inc. per share:       
Diluted non-GAAP net income attributable to BlackLine, Inc. per share (a) $0.24  $0.25  $0.51  $0.55  
Shares used to calculate diluted non-GAAP net income per share  62,400   61,213   62,474   60,445  
          
          
  Quarter Ended Nine Months Ended 
  September 30, September 30, 
   2021   2020   2021   2020  
Non-GAAP Sales and Marketing Expense:         
Sales and marketing expense $48,799  $42,588  $146,410  $129,199  
Amortization of intangible assets  (1,477)  (968)  (4,986)  (2,905) 
Stock-based compensation  (5,760)  (5,675)  (16,872)  (15,645) 
Total non-GAAP sales and marketing expense $41,562  $35,945  $124,552  $110,649  
          
Non-GAAP Research and Development Expense:         
Research and development expense $18,843  $14,829  $56,611  $38,423  
Stock-based compensation  (2,788)  (1,954)  (8,264)  (4,918) 
Total non-GAAP research and development expense $16,055  $12,875  $48,347  $33,505  
          
Non-GAAP General and Administrative Expense:         
General and administrative expense $11,372  $17,794  $59,886  $51,314  
Amortization of intangible assets  (478)  (478)  (1,434)  (1,355) 
Stock-based compensation  (6,169)  (3,826)  (17,463)  (9,935) 
Change in fair value of contingent consideration  10,346   72   3,426   148  
Acquisition-related costs     (1,790)     (1,790) 
Total non-GAAP general and administrative expense $15,071  $11,772  $44,415  $38,382  
          
Total Non-GAAP Operating Expenses $72,688  $60,592  $217,314  $182,536  
          
Free Cash Flow         
Net cash provided by operating activities $17,074  $21,789  $57,967  $39,923  
Capitalized software development costs  (3,677)  (2,844)  (11,240)  (7,838) 
Purchases of property and equipment  (3,475)  (291)  (5,197)  (2,515) 
Financed purchases of property and equipment  (128)  (169)  (549)  (394) 
Purchases of intangible assets           (2,333) 
Free cash flow $9,794  $18,485  $40,981  $26,843  
          
(a) During the third quarter of 2020, the Company identified that, commencing in 2019, it had incorrectly calculated its quarterly adjustment to the carrying value of its redeemable non-controlling interest with a corresponding impact to net loss attributable to BlackLine, Inc., adjustment attributable to non-controlling interest, and basic and diluted net loss per share attributable to BlackLine, Inc. The Company corrected the $1.5 million cumulative impact of such prior-period errors as an out-of-period adjustment in the quarter ended September 30, 2020.