UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM
_________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
_______________________________
(Exact name of registrant as specified in its charter)
_______________________________
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
(
(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 class | Trading Symbol(s) | Name of each exchange on which registered |
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. ☐
On February 14, 2023, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
(d) Exhibits
| Exhibit Number | Description | |
| 99.1 | Press release dated February 14, 2023 | |
| 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: February 14, 2023 | By: | /s/ Mark Partin |
| Mark Partin | ||
| Chief Financial Officer | ||
EXHIBIT 99.1
BlackLine Announces Fourth Quarter and Full Year Financial Results
LOS ANGELES, Feb. 14, 2023 (GLOBE NEWSWIRE) -- BlackLine, Inc. (Nasdaq: BL), today announced financial results for the fourth quarter and full year ended December 31, 2022.
"BlackLine reported solid financial results this quarter, as we continued to deliver against our goal of driving profitable growth," said Marc Huffman, CEO of BlackLine. "Further, we recently announced innovative new solutions and expanded programs to support our customers as they continue on their digital transformation journeys. As we look ahead, we remain confident in our long-term strategy, market leadership and competitive positioning."
Fourth Quarter 2022 Financial Highlights
- Total GAAP revenues of $140.0 million, an increase of 21% compared to the fourth quarter of 2021.
- GAAP net income attributable to BlackLine of $11.3 million, or $0.18 per diluted share.
- Non-GAAP net income attributable to BlackLine of $25.5 million, or $0.35 per diluted share.
- Operating cash flow of $25.8 million, an increase of 16% compared to the fourth quarter of 2021.
- Free cash flow of $20.3 million, an increase of 32% compared to the fourth quarter of 2021.
Full Year 2022 Financial Highlights
- Total GAAP revenues of $522.9 million, an increase of 23% from 2021.
- GAAP net loss attributable to BlackLine of $29.4 million, or $0.49 per basic and diluted share.
- Non-GAAP net income attributable to BlackLine of $46.2 million, or $0.64 per diluted share.
- Operating cash flow of $56.0 million, a decrease of 30% from 2021.
- Free cash flow of $25.7 million, a decrease of 54% from 2021.
Fourth Quarter Key Metrics and Recent Business Highlights
- Added 128 net new customers in the fourth quarter for a total of 4,188 customers at December 31, 2022.
- Expanded the company’s user base to 366,522 at December 31, 2022.
- Achieved a dollar-based net revenue retention rate of 107% at December 31, 2022.
- Hosted BlackLine's 15th annual customer conference, BeyondTheBlack, unveiling new innovation including: Financial Reporting Analytics, BlackLine Accounting Studio, and a Microsoft Dynamics 365 connector, while expanding BlackLine's Modern Accounting Playbook to Cash Application.
- Named to the first annual TrustRadius Best Software list.
The financial results included in this press release are preliminary and pending final review. Financial results will not be final until BlackLine files its Annual Report on Form 10-K 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
First Quarter 2023
- Total GAAP revenue is expected to be in the range of $137 million to $139 million.
- Non-GAAP net income attributable to BlackLine is expected to be in the range of $11 million to $13 million, or $0.15 to $0.17 per share on 74.6 million diluted weighted average shares outstanding.
Full Year 2023
- Total GAAP revenue is expected to be in the range of $586 million to $596 million.
- Non-GAAP net income attributable to BlackLine is expected to be in the range of $66 million to $70 million, or $0.89 to $0.94 per share on 74.4 million diluted weighted average shares outstanding.
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 fourth quarter and full year 2022 results at 2:00 p.m. Pacific time on Tuesday, February 14, 2023. 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 4,100 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 first quarter and full year of 2023, 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.
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 ended September 30, 2022 filed with the Securities and Exchange Commission on November 4, 2022. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 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 February 14, 2023 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, stock-based compensation, transaction-related costs and impairment of cloud computing implementation costs. Non-GAAP research and development expense is defined as GAAP research and development expense adjusted for stock-based compensation and transaction-related costs. 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, transaction-related costs, legal settlement costs and impairment of cloud computing implementation 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, transaction-related costs, impairment of cloud computing implementation costs and restructuring 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, impairment of cloud computing implementation costs, restructuring 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.
Use of Operating Metrics
BlackLine has provided in this release and the quarterly conference call held on February 14, 2023 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 December 31, 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 a company that contributes to our subscription and support revenue 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:
Kimberly Uberti
kimberly.uberti@blackline.com
Investor Relations Contact:
Matt Humphries, CFA
matt.humphries@blackline.com
| BlackLine, Inc. | |||||||
| Consolidated Balance Sheets | |||||||
| (in thousands) | |||||||
| (unaudited) | |||||||
| December 31, 2022 | December 31, 2021 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 200,968 | $ | 539,739 | |||
| Marketable securities | 874,083 | 658,964 | |||||
| Accounts receivable, net of allowances for credit losses | 150,858 | 125,130 | |||||
| Prepaid expenses and other current assets | 23,658 | 23,855 | |||||
| Total current assets | 1,249,567 | 1,347,688 | |||||
| Capitalized software development costs, net | 32,070 | 23,547 | |||||
| Property and equipment, net | 19,811 | 16,321 | |||||
| Intangible assets, net | 90,864 | 36,195 | |||||
| Goodwill | 443,861 | 289,710 | |||||
| Operating lease right-of-use assets | 14,708 | 16,264 | |||||
| Other assets | 92,775 | 87,853 | |||||
| Total assets | $ | 1,943,656 | $ | 1,817,578 | |||
| LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 14,964 | $ | 7,471 | |||
| Accrued expenses and other current liabilities | 58,600 | 50,930 | |||||
| Deferred revenue, current | 279,325 | 242,429 | |||||
| Finance lease liabilities, current | 989 | 373 | |||||
| Operating lease liabilities, current | 5,943 | 4,936 | |||||
| Contingent consideration, current | 8,000 | 16,438 | |||||
| Total current liabilities | 367,821 | 322,577 | |||||
| Finance lease liabilities, noncurrent | 785 | 824 | |||||
| Operating lease liabilities, noncurrent | 9,292 | 13,248 | |||||
| Convertible senior notes, net | 1,384,306 | 1,114,239 | |||||
| Contingent consideration, noncurrent | 33,549 | 4,294 | |||||
| Deferred tax liabilities, net | 5,568 | 8,175 | |||||
| Deferred revenue, noncurrent | 343 | 362 | |||||
| Other long-term liabilities | 6,229 | 124 | |||||
| Total liabilities | 1,807,893 | 1,463,843 | |||||
| Commitments and contingencies | |||||||
| Redeemable non-controlling interest | 23,895 | 28,699 | |||||
| Stockholders' equity: | |||||||
| Common stock | 600 | 590 | |||||
| Additional paid-in capital | 385,709 | 625,883 | |||||
| Accumulated other comprehensive income (loss) | (1,472 | ) | 298 | ||||
| Accumulated deficit | (272,969 | ) | (301,735 | ) | |||
| Total stockholders' equity | 111,868 | 325,036 | |||||
| Total liabilities, redeemable non-controlling interest, and stockholders' equity | $ | 1,943,656 | $ | 1,817,578 | |||
| BlackLine, Inc. | |||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Quarter Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenues | |||||||||||||||
| Subscription and support | $ | 130,898 | $ | 108,884 | $ | 491,187 | $ | 398,633 | |||||||
| Professional services | 9,059 | 6,442 | 31,751 | 27,073 | |||||||||||
| Total revenues | 139,957 | 115,326 | 522,938 | 425,706 | |||||||||||
| Cost of revenues | |||||||||||||||
| Subscription and support | 26,637 | 21,439 | 102,132 | 71,979 | |||||||||||
| Professional services | 6,726 | 6,533 | 27,253 | 25,892 | |||||||||||
| Total cost of revenues | 33,363 | 27,972 | 129,385 | 97,871 | |||||||||||
| Gross profit | 106,594 | 87,354 | 393,553 | 327,835 | |||||||||||
| Operating expenses | |||||||||||||||
| Sales and marketing | 66,295 | 56,210 | 256,862 | 202,620 | |||||||||||
| Research and development | 28,022 | 20,711 | 108,893 | 77,322 | |||||||||||
| General and administrative | 5,158 | 26,621 | 80,155 | 86,507 | |||||||||||
| Restructuring costs | 3,841 | — | 3,841 | — | |||||||||||
| Total operating expenses | 103,316 | 103,542 | 449,751 | 366,449 | |||||||||||
| Income (loss) from operations | 3,278 | (16,188 | ) | (56,198 | ) | (38,614 | ) | ||||||||
| Other income (expense) | |||||||||||||||
| Interest income | 8,017 | 288 | 14,637 | 700 | |||||||||||
| Interest expense | (1,464 | ) | (16,363 | ) | (5,850 | ) | (62,945 | ) | |||||||
| Other income (expense), net | 6,553 | (16,075 | ) | 8,787 | (62,245 | ) | |||||||||
| Income (loss) before income taxes | 9,831 | (32,263 | ) | (47,411 | ) | (100,859 | ) | ||||||||
| Provision for (benefit from) income taxes | (668 | ) | 213 | (13,520 | ) | 135 | |||||||||
| Net income (loss) | 10,499 | (32,476 | ) | (33,891 | ) | (100,994 | ) | ||||||||
| Net income (loss) attributable to redeemable non-controlling interest | 99 | (177 | ) | (369 | ) | (910 | ) | ||||||||
| Adjustment attributable to redeemable non-controlling interest | (904 | ) | 4,711 | (4,131 | ) | 15,077 | |||||||||
| Net income (loss) attributable to BlackLine, Inc. | $ | 11,304 | $ | (37,010 | ) | $ | (29,391 | ) | $ | (115,161 | ) | ||||
| Basic net income (loss) per share attributable to BlackLine, Inc. | $ | 0.19 | $ | (0.63 | ) | $ | (0.49 | ) | $ | (1.97 | ) | ||||
| Shares used to calculate basic net income (loss) per share | 59,888 | 58,810 | 59,539 | 58,351 | |||||||||||
| Diluted net income (loss) per share attributable to BlackLine, Inc. | $ | 0.18 | $ | (0.63 | ) | $ | (0.49 | ) | $ | (1.97 | ) | ||||
| Shares used to calculate diluted net income (loss) per share1 | 71,283 | 58,810 | 59,539 | 58,351 | |||||||||||
1Upon 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. Under this accounting standard, the EPS calculation adds back the convertible loan interest expense to net income in the numerator and adds back 10.3 million shares underlying our convertible notes to the diluted shares in the denominator, unless the result would be antidilutive. In accordance with the adoption of ASU 2020-06 and using the modified retrospective method, prior period amounts have not been adjusted.
| BlackLine, Inc. | |||||||||||||||
| Consolidated Statements of Cash Flows | |||||||||||||||
| (in thousands) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Quarter Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Cash flows from operating activities | |||||||||||||||
| Net income (loss) attributable to BlackLine, Inc. | $ | 11,304 | $ | (37,010 | ) | $ | (29,391 | ) | $ | (115,161 | ) | ||||
| Net income (loss) and adjustment attributable to redeemable non-controlling interest | (805 | ) | 4,534 | (4,500 | ) | 14,167 | |||||||||
| Net income (loss) | 10,499 | (32,476 | ) | (33,891 | ) | (100,994 | ) | ||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||
| Depreciation and amortization | 11,830 | 6,953 | 42,816 | 27,128 | |||||||||||
| Change in fair value of contingent consideration | (21,017 | ) | 668 | (35,130 | ) | (2,758 | ) | ||||||||
| Amortization of debt discount and issuance costs | 1,392 | 16,266 | 5,511 | 55,538 | |||||||||||
| Loss on extinguishment of convertible notes | — | — | — | 7,012 | |||||||||||
| Stock-based compensation | 18,474 | 17,081 | 75,884 | 65,870 | |||||||||||
| Noncash lease expense | 1,407 | 1,126 | 5,593 | 4,513 | |||||||||||
| (Accretion) amortization of purchase discounts on marketable securities, net | (5,548 | ) | 164 | (8,874 | ) | 6 | |||||||||
| Net foreign currency (gains) losses | (7 | ) | (366 | ) | (1,470 | ) | 112 | ||||||||
| Deferred income taxes | 291 | (857 | ) | (14,404 | ) | (817 | ) | ||||||||
| Provision for (benefit from) credit losses | 30 | (45 | ) | 115 | (100 | ) | |||||||||
| Impairment of cloud computing implementation costs | 5,330 | — | 5,330 | — | |||||||||||
| Changes in operating assets and liabilities, net of impact of acquisition: | |||||||||||||||
| Accounts receivable | (41,354 | ) | (19,691 | ) | (23,033 | ) | (14,255 | ) | |||||||
| Prepaid expenses and other current assets | (1,180 | ) | (5,602 | ) | 1,059 | (3,956 | ) | ||||||||
| Other assets | (3,757 | ) | (8,896 | ) | (10,112 | ) | (22,505 | ) | |||||||
| Accounts payable | 8,947 | 4,982 | 4,376 | 3,997 | |||||||||||
| Accrued expenses and other current liabilities | 6,505 | 11,211 | 5,893 | 14,876 | |||||||||||
| Deferred revenue | 34,098 | 32,907 | 36,646 | 51,579 | |||||||||||
| Operating lease liabilities | (1,620 | ) | (1,299 | ) | (6,949 | ) | (5,153 | ) | |||||||
| Lease incentive receipts | 159 | — | 812 | — | |||||||||||
| Other long-term liabilities | 1,275 | — | 5,841 | — | |||||||||||
| Net cash provided by operating activities | 25,754 | 22,126 | 56,013 | 80,093 | |||||||||||
| Cash flows from investing activities | |||||||||||||||
| Purchases of marketable securities | (428,137 | ) | (72,977 | ) | (1,599,945 | ) | (1,180,885 | ) | |||||||
| Proceeds from maturities of marketable securities | 416,500 | 213,000 | 1,392,250 | 697,209 | |||||||||||
| Capitalized software development costs | (4,256 | ) | (3,296 | ) | (19,208 | ) | (14,536 | ) | |||||||
| Purchases of property and equipment | (1,232 | ) | (3,532 | ) | (10,974 | ) | (8,729 | ) | |||||||
| Acquisition, net of cash acquired | — | — | (157,738 | ) | — | ||||||||||
| Net cash provided by (used in) investing activities | (17,125 | ) | 133,195 | (395,615 | ) | (506,941 | ) | ||||||||
| Cash flows from financing activities | |||||||||||||||
| Investment from redeemable non-controlling interest | — | 2,171 | — | 2,171 | |||||||||||
| 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 | (239 | ) | (37 | ) | (619 | ) | (37 | ) | |||||||
| Proceeds from exercises of stock options | 1,018 | 3,749 | 4,687 | 11,428 | |||||||||||
| Proceeds from employee stock purchase plan | 2,530 | 3,823 | 6,996 | 9,020 | |||||||||||
| Acquisition of common stock for tax withholding obligations | (1,678 | ) | (4,358 | ) | (9,544 | ) | (17,007 | ) | |||||||
| Financed purchases of property and equipment | — | — | (84 | ) | (549 | ) | |||||||||
| Net cash provided by financing activities | 1,631 | 5,348 | 1,436 | 599,240 | |||||||||||
| Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash | 215 | (113 | ) | (618 | ) | (314 | ) | ||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 10,475 | 160,556 | (338,784 | ) | 172,078 | ||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 190,732 | 379,435 | 539,991 | 367,913 | |||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 201,207 | $ | 539,991 | $ | 201,207 | $ | 539,991 | |||||||
| Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets | |||||||||||||||
| Cash and cash equivalents at end of period | $ | 200,968 | $ | 539,739 | $ | 200,968 | $ | 539,739 | |||||||
| Restricted cash included within other assets at end of period | 239 | 252 | 239 | 252 | |||||||||||
| Total cash, cash equivalents, and restricted cash at end of period shown in the consolidated statements of cash flows | $ | 201,207 | $ | 539,991 | $ | 201,207 | $ | 539,991 | |||||||
| BlackLine, Inc. | ||||||||||||||||
| Reconciliations of Non-GAAP Financial Measures | ||||||||||||||||
| (in thousands, except percentages and per share data) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Non-GAAP Gross Profit: | ||||||||||||||||
| Gross profit | $ | 106,594 | $ | 87,354 | $ | 393,553 | $ | 327,835 | ||||||||
| Amortization of acquired developed technology | 3,010 | 675 | 11,315 | 2,685 | ||||||||||||
| Stock-based compensation | 2,286 | 2,220 | 8,595 | 8,410 | ||||||||||||
| Transaction-related costs | 357 | — | 1,355 | — | ||||||||||||
| Total non-GAAP gross profit | $ | 112,247 | $ | 90,249 | $ | 414,818 | $ | 338,930 | ||||||||
| Gross margin | 76.2 | % | 75.7 | % | 75.3 | % | 77.0 | % | ||||||||
| Non-GAAP gross margin | 80.2 | % | 78.3 | % | 79.3 | % | 79.6 | % | ||||||||
| Non-GAAP Operating Income: | ||||||||||||||||
| Operating income (loss) | $ | 3,278 | $ | (16,188 | ) | $ | (56,198 | ) | $ | (38,614 | ) | |||||
| Amortization of intangible assets | 5,181 | 2,049 | 19,731 | 10,479 | ||||||||||||
| Stock-based compensation | 18,474 | 17,081 | 75,884 | 65,870 | ||||||||||||
| Change in fair value of contingent consideration | (21,017 | ) | 668 | (35,130 | ) | (2,758 | ) | |||||||||
| Transaction-related costs | 2,850 | 1,586 | 16,831 | 1,586 | ||||||||||||
| Legal settlement costs | — | — | 1,709 | — | ||||||||||||
| Impairment of cloud computing implementation costs | 5,330 | — | 5,330 | — | ||||||||||||
| Restructuring costs | 3,841 | — | 3,841 | — | ||||||||||||
| Total non-GAAP operating income | $ | 17,937 | $ | 5,196 | $ | 31,998 | $ | 36,563 | ||||||||
| Non-GAAP Net Income Attributable to BlackLine, Inc.: | ||||||||||||||||
| Net income (loss) attributable to BlackLine, Inc. | $ | 11,304 | $ | (37,010 | ) | $ | (29,391 | ) | $ | (115,161 | ) | |||||
| Benefit from income taxes related to acquisitions | (942 | ) | (552 | ) | (13,634 | ) | (961 | ) | ||||||||
| Amortization of intangible assets | 5,181 | 2,049 | 19,731 | 10,479 | ||||||||||||
| Stock-based compensation | 18,417 | 17,028 | 75,576 | 65,723 | ||||||||||||
| Amortization of debt discount and issuance costs | 1,392 | 16,266 | 5,511 | 55,538 | ||||||||||||
| Change in fair value of contingent consideration | (21,017 | ) | 668 | (35,130 | ) | (2,758 | ) | |||||||||
| Transaction-related costs | 2,850 | 1,586 | 16,831 | 1,586 | ||||||||||||
| Legal settlement costs | — | — | 1,709 | — | ||||||||||||
| Impairment of cloud computing implementation costs | 5,330 | — | 5,330 | — | ||||||||||||
| Restructuring costs | 3,841 | — | 3,841 | — | ||||||||||||
| Adjustment to redeemable non-controlling interest | (904 | ) | 4,711 | (4,131 | ) | 15,077 | ||||||||||
| Loss on extinguishment of convertible senior notes | — | — | — | 7,012 | ||||||||||||
| Total non-GAAP net income attributable to BlackLine, Inc. | $ | 25,452 | $ | 4,746 | $ | 46,243 | $ | 36,535 | ||||||||
| Basic non-GAAP net income attributable to BlackLine, Inc. per share: | ||||||||||||||||
| Basic non-GAAP net income attributable to BlackLine, Inc. per share | $ | 0.42 | $ | 0.08 | $ | 0.78 | $ | 0.63 | ||||||||
| Shares used to calculate basic non-GAAP net income per share | 59,888 | 58,810 | 59,539 | 58,351 | ||||||||||||
| Diluted non-GAAP net income attributable to BlackLine, Inc. per share: | ||||||||||||||||
| Diluted non-GAAP net income attributable to BlackLine, Inc. per share | $ | 0.35 | $ | 0.08 | $ | 0.64 | $ | 0.58 | ||||||||
| Shares used to calculate diluted non-GAAP net income per share | 73,277 | 62,472 | 72,974 | 62,473 | ||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Non-GAAP Sales and Marketing Expense: | ||||||||||||||||
| Sales and marketing expense | $ | 66,295 | $ | 56,210 | $ | 256,862 | $ | 202,620 | ||||||||
| Amortization of intangible assets | (1,693 | ) | (897 | ) | (6,505 | ) | (5,883 | ) | ||||||||
| Stock-based compensation | (5,691 | ) | (5,884 | ) | (26,310 | ) | (22,756 | ) | ||||||||
| Transaction-related costs | (240 | ) | — | (2,399 | ) | — | ||||||||||
| Impairment of cloud computing implementation costs | (3,361 | ) | — | (3,361 | ) | — | ||||||||||
| Total non-GAAP sales and marketing expense | $ | 55,310 | $ | 49,429 | $ | 218,287 | $ | 173,981 | ||||||||
| Non-GAAP Research and Development Expense: | ||||||||||||||||
| Research and development expense | $ | 28,022 | $ | 20,711 | $ | 108,893 | $ | 77,322 | ||||||||
| Stock-based compensation | (3,828 | ) | (2,846 | ) | (14,382 | ) | (11,110 | ) | ||||||||
| Transaction-related costs | (2,079 | ) | — | (7,797 | ) | — | ||||||||||
| Total non-GAAP research and development expense | $ | 22,115 | $ | 17,865 | $ | 86,714 | $ | 66,212 | ||||||||
| Non-GAAP General and Administrative Expense: | ||||||||||||||||
| General and administrative expense | $ | 5,158 | $ | 26,621 | $ | 80,155 | $ | 86,507 | ||||||||
| Amortization of intangible assets | (478 | ) | (477 | ) | (1,911 | ) | (1,911 | ) | ||||||||
| Stock-based compensation | (6,669 | ) | (6,131 | ) | (26,597 | ) | (23,594 | ) | ||||||||
| Change in fair value of contingent consideration | 21,017 | (668 | ) | 35,130 | 2,758 | |||||||||||
| Transaction-related costs | (174 | ) | (1,586 | ) | (5,280 | ) | (1,586 | ) | ||||||||
| Legal settlement costs | — | — | (1,709 | ) | — | |||||||||||
| Impairment of cloud computing implementation costs | (1,969 | ) | — | (1,969 | ) | — | ||||||||||
| Total non-GAAP general and administrative expense | $ | 16,885 | $ | 17,759 | $ | 77,819 | $ | 62,174 | ||||||||
| Total Non-GAAP Operating Expenses | $ | 94,310 | $ | 85,053 | $ | 382,820 | $ | 302,367 | ||||||||
| Free Cash Flow | ||||||||||||||||
| Net cash provided by operating activities | $ | 25,754 | $ | 22,126 | $ | 56,013 | $ | 80,093 | ||||||||
| Capitalized software development costs | (4,256 | ) | (3,296 | ) | (19,208 | ) | (14,536 | ) | ||||||||
| Purchases of property and equipment | (1,232 | ) | (3,532 | ) | (10,974 | ) | (8,729 | ) | ||||||||
| Financed purchases of property and equipment | — | — | (84 | ) | (549 | ) | ||||||||||
| Free cash flow | $ | 20,266 | $ | 15,298 | $ | 25,747 | $ | 56,279 | ||||||||