Form 8-K
0001666134 False 0001666134 2022-11-03 2022-11-03 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 3, 2022

_______________________________

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 3, 2022, 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 3, 2022
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 3, 2022By: /s/ Mark Partin        
  Mark Partin
  Chief Financial Officer
  

 

EdgarFiling

EXHIBIT 99.1

BlackLine Announces Third Quarter Financial Results

LOS ANGELES, Nov. 03, 2022 (GLOBE NEWSWIRE) -- BlackLine, Inc. (Nasdaq: BL), today announced financial results for the third quarter ended September 30, 2022.

“BlackLine reported solid financial results this quarter as customer demand for finance and accounting solutions that drive efficiency and automation remained healthy,” said Marc Huffman, CEO of BlackLine. “Customers around the world continue to seek out ways to operate successfully in today’s market, and our innovative solutions have become more relevant than ever.” Huffman continued, “Our relentless focus on customer success, the strength and resiliency of our business model, and our proven market leadership reinforce our ability to succeed in the near-term while capturing the long-term opportunities ahead.”

Third Quarter 2022 Financial Highlights

Third Quarter 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 2022

Full Year 2022

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, transaction-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 3, 2022. A live audio webcast will be accessible on BlackLine’s investor relations website at https://investors.blackline.com. Participants can pre-register for the conference call. 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 financial operations management platform 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.

More than 4,000 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. BlackLine is a global company with operations in major business centers around the world including Los Angeles, New York, the San Francisco Bay area, London, Paris, Frankfurt, Tokyo, 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 2022, 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, and our expectations regarding our acquisition of FourQ Systems, including the market opportunity and FourQ Systems' contribution to our business and financial results.

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 Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on February 25, 2022. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022. 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 3, 2022 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. (v) diluted non-GAAP net income (loss) attributable to BlackLine, Inc. per share, and (v) 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 revenue adjusted for the amortization of acquired developed technology, transaction-related costs (including, but not limited to, accounting, legal, and advisory fees related to the transaction, as well as transaction-related retention bonuses) 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 intangible assets 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 intangible assets, stock-based compensation, the change in fair value of contingent consideration, and transaction-related costs. 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, and transaction-related costs. 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 and Diluted Non-GAAP Net Income (loss) attributable to BlackLine, Inc. per share. Non-GAAP net income (loss) attributable to BlackLine is defined as GAAP net income (loss) attributable to BlackLine 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, transaction-related costs, legal settlement gains or costs, adjustment to the value of the redeemable non-controlling interest to the redemption amount, and loss on extinguishment of convertible senior notes. Diluted non-GAAP net income attributable to BlackLine, Inc. per share includes the adjustment for shares resulting from the elimination of stock-based compensation. The Company believes that presenting non-GAAP net income (loss) attributable to BlackLine 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 (used in) 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.

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

Investor Relations Contact:
Matt Humphries, CFA
matt.humphries@blackline.com

Use of Operating Metrics

BlackLine has provided in this release and the quarterly conference call held on November 3, 2022 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 certain Runbook licensed customers and users who are on perpetual license agreements and did not have an active subscription agreement with BlackLine as of September 30, 2022.

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.



BlackLine, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 September 30,
2022
 December 31,
2021
ASSETS
Current assets:   
Cash and cash equivalents$190,514  $539,739 
Marketable securities 855,406   658,964 
Accounts receivable, net of allowances for credit losses 108,792   125,130 
Prepaid expenses and other current assets 22,363   23,855 
Total current assets 1,177,075   1,347,688 
Capitalized software development costs, net 30,452   23,547 
Property and equipment, net 20,636   16,321 
Intangible assets, net 96,045   36,195 
Goodwill 443,861   289,710 
Operating lease right-of-use assets 15,265   16,264 
Other assets 94,324   87,853 
Total assets$1,877,658  $1,817,578 
 
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY
Current liabilities:   
Accounts payable$5,534  $7,471 
Accrued expenses and other current liabilities 51,144   50,930 
Deferred revenue, current 245,155   242,429 
Finance lease liabilities, current 981   373 
Operating lease liabilities, current 5,253   4,936 
Contingent consideration, current 6,514   16,438 
Total current liabilities 314,581   322,577 
Finance lease liabilities, noncurrent 1,050   824 
Operating lease liabilities, noncurrent 9,953   13,248 
Convertible senior notes, net 1,382,914   1,114,239 
Contingent consideration, noncurrent 56,052   4,294 
Deferred tax liabilities, net 5,274   8,175 
Deferred revenue, noncurrent 415   362 
Other long-term liabilities 4,893   124 
Total liabilities 1,775,132   1,463,843 
Commitments and contingencies   
Redeemable non-controlling interest 24,595   28,699 
Stockholders' equity:   
Common stock 598   590 
Additional paid-in capital 363,782   625,883 
Accumulated other comprehensive income (loss) (3,080)  298 
Accumulated deficit (283,369)  (301,735)
Total stockholders' equity 77,931   325,036 
Total liabilities, redeemable non-controlling interest, and stockholders' equity$1,877,658  $1,817,578 



BlackLine, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 Quarter Ended Nine Months Ended
 September 30, September 30,
  2022   2021   2022   2021 
Revenues       
Subscription and support$126,081  $102,924  $360,289  $289,749 
Professional services 8,187   6,478   22,692   20,631 
Total revenues 134,268   109,402   382,981   310,380 
Cost of revenues       
Subscription and support 25,544   17,948   75,495   50,540 
Professional services 6,882   6,489   20,527   19,359 
Total cost of revenues 32,426   24,437   96,022   69,899 
Gross profit 101,842   84,965   286,959   240,481 
Operating expenses       
Sales and marketing 64,540   48,799   190,567   146,410 
Research and development 27,721   18,843   80,871   56,611 
General and administrative 31,000   11,372   74,997   59,886 
Total operating expenses 123,261   79,014   346,435   262,907 
Income (loss) from operations (21,419)  5,951   (59,476)  (22,426)
Other income (expense)       
Interest income 4,387   231   6,620   412 
Interest expense (1,482)  (16,110)  (4,386)  (46,582)
Other income (expense), net 2,905   (15,879)  2,234   (46,170)
Loss before income taxes (18,514)  (9,928)  (57,242)  (68,596)
Provision for (benefit from) income taxes 474   (210)  (12,852)  (78)
Net loss (18,988)  (9,718)  (44,390)  (68,518)
Net loss attributable to redeemable non-controlling interest (344)  (252)  (468)  (733)
Adjustment attributable to non-controlling interest 1,375   4,275   (3,227)  10,366 
Net loss attributable to BlackLine, Inc.$(20,019) $(13,741) $(40,695) $(78,151)
Basic net loss per share attributable to BlackLine, Inc.$(0.34) $(0.23) $(0.68) $(1.34)
Shares used to calculate basic net loss per share 59,695   58,508   59,422   58,196 
Diluted net loss per share attributable to BlackLine, Inc.$(0.34) $(0.23) $(0.68) $(1.34)
Shares used to calculate diluted net loss per share(1) 59,695   58,508   59,422   58,196 

(1) Upon adoption of ASU 2020-06 on January 1, 2022, the Company prospectively utilized the if-converted method to calculate the impact of convertible instruments on diluted earnings per share. In accordance with the adoption of ASU 2020-06 and using the modified retrospective method, prior period amounts have not been adjusted. The effect of the convertible instruments is included in the calculation of earnings per share unless the result would be antidilutive.



BlackLine, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 Quarter Ended Nine Months Ended
 September 30, September 30,
  2022   2021   2022   2021 
Cash flows from operating activities       
Net loss attributable to BlackLine, Inc.$(20,019) $(13,741) $(40,695) $(78,151)
Net loss and adjustment attributable to redeemable non-controlling interest 1,031   4,023   (3,695)  9,633 
Net loss (18,988)  (9,718)  (44,390)  (68,518)
Adjustments to reconcile net loss to net cash provided by operating activities:       
Depreciation and amortization 11,180   6,743   30,986   20,175 
Change in fair value of contingent consideration 1,745   (10,346)  (14,113)  (3,426)
Amortization of debt discount and issuance costs 1,389   16,031   4,119   39,272 
Stock-based compensation 20,899   16,930   57,410   48,789 
Loss on extinguishment of convertible notes          7,012 
Noncash lease expense 1,325   1,202   4,186   3,387 
Accretion of purchase discounts on marketable securities, net (2,762)  (88)  (3,326)  (158)
Net foreign currency (gains) losses (637)  35   (1,463)  478 
Deferred income taxes (266)  (14)  (14,695)  40 
Provision for (benefit from) credit losses 4   (29)  85   (55)
Changes in operating assets and liabilities, net of impact of acquisition:       
Accounts receivable 12,152   (4,233)  18,321   5,436 
Prepaid expenses and other current assets (1,271)  (282)  2,239   1,646 
Other assets (1,157)  (4,272)  (6,355)  (13,609)
Accounts payable (8,698)  (1,751)  (4,571)  (985)
Accrued expenses and other current liabilities 10,773   5,305   (612)  3,665 
Deferred revenue (1,658)  2,993   2,548   18,672 
Operating lease liabilities (1,223)  (1,432)  (5,329)  (3,854)
Lease incentive receipts 162      653    
Other long-term liabilities 1,207      4,566    
   Net cash provided by operating activities 24,176   17,074   30,259   57,967 
Cash flows from investing activities       
Purchases of marketable securities (372,059)  (374,094)  (1,171,808)  (1,107,908)
Proceeds from maturities of marketable securities 338,500   100,000   975,750   484,209 
Capitalized software development costs (5,186)  (3,677)  (14,952)  (11,240)
Purchases of property and equipment (2,439)  (3,475)  (9,742)  (5,197)
Acquisition, net of cash acquired       (157,738)   
   Net cash used in investing activities (41,184)  (281,246)  (378,490)  (640,136)
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)
Principal payments under finance lease obligations (185)     (380)   
Proceeds from exercises of stock options 1,249   2,629   3,669   7,679 
Proceeds from employee stock purchase plan       4,466   5,197 
Acquisition of common stock for tax withholding obligations (1,864)  (2,713)  (7,866)  (12,649)
Financed purchases of property and equipment    (128)  (84)  (549)
   Net cash provided by (used in) financing activities (800)  (212)  (195)  593,892 
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash (146)  3   (833)  (201)
Net increase (decrease) in cash, cash equivalents, and restricted cash (17,954)  (264,381)  (349,259)  11,522 
Cash, cash equivalents, and restricted cash, beginning of period 208,686   643,816   539,991   367,913 
Cash, cash equivalents, and restricted cash, end of period$190,732  $379,435  $190,732  $379,435 
        
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets       
Cash and cash equivalents at end of period$190,514  $378,977  $190,514  $378,977 
Restricted cash included within prepaid expenses and other current assets at end of period    203      203 
Restricted cash included within other assets at end of period 218   255   218   255 
Total cash, cash equivalents, and restricted cash at end of period shown in the consolidated statements of cash flows$190,732  $379,435  $190,732  $379,435 



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,
   2022   2021   2022   2021 
Non-GAAP Gross Profit:        
Gross profit $101,842  $84,965  $286,959  $240,481 
Amortization of acquired developed technology  3,011   675   8,305   2,010 
Stock-based compensation  2,346   2,213   6,309   6,190 
Transaction-related costs  352      998    
Total non-GAAP gross profit $107,551  $87,853  $302,571  $248,681 
Gross margin  75.8%  77.7%  74.9%  77.5%
Non-GAAP gross margin  80.1%  80.3%  79.0%  80.1%
         
Non-GAAP Operating Income:        
Operating income (loss) $(21,419) $5,951  $(59,476) $(22,426)
Amortization of intangible assets  5,182   2,630   14,550   8,430 
Stock-based compensation  20,899   16,930   57,410   48,789 
Change in fair value of contingent consideration  1,745   (10,346)  (14,113)  (3,426)
Transaction-related costs  3,272      13,981    
Legal settlement costs  1,019      1,709    
Total non-GAAP operating income $10,698  $15,165  $14,061  $31,367 
         
Non-GAAP Net Income Attributable to BlackLine, Inc.:        
Net loss attributable to BlackLine, Inc. $(20,019) $(13,741) $(40,695) $(78,151)
Provision for (benefit from) income taxes related to acquisitions  299   (636)  (12,692)  (409)
Amortization of intangible assets  5,182   2,630   14,550   8,430 
Stock-based compensation  20,802   16,877   57,159   48,695 
Amortization of debt discount and issuance costs  1,389   16,031   4,119   39,272 
Change in fair value of contingent consideration  1,745   (10,346)  (14,113)  (3,426)
Transaction-related costs  3,272      13,981    
Legal settlement costs  1,019      1,709    
Adjustment to redeemable non-controlling interest  1,375   4,275   (3,227)  10,366 
Loss on extinguishment of convertible senior notes           7,012 
Total non-GAAP net income attributable to BlackLine, Inc. $15,064  $15,090  $20,791  $31,789 
Basic non-GAAP net income attributable to BlackLine, Inc. per share:        
Basic non-GAAP net income attributable to BlackLine, Inc. per share $0.25  $0.26  $0.35  $0.55 
Shares used to calculate basic non-GAAP net income per share  59,695   58,508   59,422   58,196 
Diluted non-GAAP net income attributable to BlackLine, Inc. per share:        
Diluted non-GAAP net income attributable to BlackLine, Inc. per share $0.21  $0.24  $0.29  $0.51 
Shares used to calculate diluted non-GAAP net income per share  73,312   62,400   72,872   62,474 
         
  Quarter Ended Nine Months Ended
  September 30, September 30,
   2022   2021   2022   2021 
Non-GAAP Sales and Marketing Expense:        
Sales and marketing expense $64,540  $48,799  $190,567  $146,410 
Amortization of intangible assets  (1,694)  (1,477)  (4,812)  (4,986)
Stock-based compensation  (7,257)  (5,760)  (20,619)  (16,872)
Transaction-related costs  (714)     (2,159)   
Total non-GAAP sales and marketing expense $54,875  $41,562  $162,977  $124,552 
         
Non-GAAP Research and Development Expense:        
Research and development expense $27,721  $18,843  $80,871  $56,611 
Stock-based compensation  (3,847)  (2,788)  (10,554)  (8,264)
Transaction-related costs  (2,057)     (5,718)   
Total non-GAAP research and development expense $21,817  $16,055  $64,599  $48,347 
         
Non-GAAP General and Administrative Expense:        
General and administrative expense $31,000  $11,372  $74,997  $59,886 
Amortization of intangible assets  (477)  (478)  (1,433)  (1,434)
Stock-based compensation  (7,449)  (6,169)  (19,928)  (17,463)
Change in fair value of contingent consideration  (1,745)  10,346   14,113   3,426 
Transaction-related costs  (149)     (5,106)   
Legal settlement costs  (1,019)     (1,709)   
Total non-GAAP general and administrative expense $20,161  $15,071  $60,934  $44,415 
         
Total Non-GAAP Operating Expenses $96,853  $72,688  $288,510  $217,314 
         
Free Cash Flow        
Net cash provided by operating activities $24,176  $17,074  $30,259  $57,967 
Capitalized software development costs  (5,186)  (3,677)  (14,952)  (11,240)
Purchases of property and equipment  (2,439)  (3,475)  (9,742)  (5,197)
Financed purchases of property and equipment     (128)  (84)  (549)
Free cash flow $16,551  $9,794  $5,481  $40,981