Form 8-K
0001666134 False 0001666134 2023-08-08 2023-08-08 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):  August 8, 2023

_______________________________

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 August 8, 2023, 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 August 8, 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: August 8, 2023By: /s/ Mark Partin        
  Mark Partin
  Chief Financial Officer
  

 

EdgarFiling

EXHIBIT 99.1

BlackLine Announces Second Quarter Financial Results

LOS ANGELES, Aug. 08, 2023 (GLOBE NEWSWIRE) -- BlackLine, Inc. (Nasdaq: BL), today announced financial results for the second quarter ended June 30, 2023.

“BlackLine delivered total revenue and non-GAAP net income that exceeded our targets this quarter,” said Owen Ryan, co-CEO of BlackLine. “While pleased with these results, we expect to drive higher operational efficiency while investing to extend our leadership position within the Office of the CFO.”

“With the continued delivery of innovative new solutions and programs for customers, our relentless focus on innovation and commitment to customer success remains a key priority,” said Therese Tucker, Founder and co-CEO of BlackLine.

Second Quarter 2023 Financial Highlights

Second 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

Third Quarter 2023

Full Year 2023

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 issuance costs, the change in fair value of contingent consideration, transaction-related costs, and the adjustment to the value of the redeemable non-controlling interest to the redemption amount. 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 second quarter results at 2:00 p.m. Pacific time on Tuesday, August 8, 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 4,200 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 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 third 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 impact of current and future economic uncertainty and other unfavorable conditions in the company’s industry or the global economy, 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; 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, 2022 filed with the Securities and Exchange Commission on February 23, 2023, and our subsequent Quarterly Reports on Form 10-Q. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023. 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 August 8, 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 gains or 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, legal settlement gains or 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 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, the 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 August 8, 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 June 30, 2023.

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.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 June 30, 2023 December 31, 2022
ASSETS
Current assets:   
Cash and cash equivalents$204,514  $200,968 
Marketable securities 921,737   874,083 
Accounts receivable, net of allowances 129,798   150,858 
Prepaid expenses and other current assets 27,697   23,658 
Total current assets 1,283,746   1,249,567 
Capitalized software development costs, net 36,349   32,070 
Property and equipment, net 17,009   19,811 
Intangible assets, net 80,645   90,864 
Goodwill 443,861   443,861 
Operating lease right-of-use assets 21,272   14,708 
Other assets 92,484   92,775 
Total assets$1,975,366  $1,943,656 
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY
Current liabilities:   
Accounts payable$7,899  $14,964 
Accrued expenses and other current liabilities 45,152   58,600 
Deferred revenue, current 280,050   279,325 
Finance lease liabilities, current 1,031   989 
Operating lease liabilities, current 4,394   5,943 
Contingent consideration, current 16,510   8,000 
Total current liabilities 355,036   367,821 
Finance lease liabilities, noncurrent 266   785 
Operating lease liabilities, noncurrent 17,855   9,292 
Convertible senior notes, net 1,387,047   1,384,306 
Contingent consideration, noncurrent 2,610   33,549 
Deferred tax liabilities, net 5,618   5,568 
Deferred revenue, noncurrent 643   343 
Other long-term liabilities 3,641   6,229 
Total liabilities 1,772,716   1,807,893 
Commitments and contingencies   
Redeemable non-controlling interest 26,288   23,895 
Stockholders’ equity:   
Common stock 610   600 
Additional paid-in capital 429,320   385,709 
Accumulated other comprehensive loss (1,529)  (1,472)
Accumulated deficit (252,039)  (272,969)
Total stockholders’ equity 176,362   111,868 
Total liabilities, redeemable non-controlling interest, and stockholders’ equity$1,975,366  $1,943,656 
        


BlackLine, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 Quarter Ended Six Months Ended
 June 30, June 30,
  2023   2022   2023   2022 
Revenues       
Subscription and support$135,881  $120,683  $266,307  $234,208 
Professional services 8,693   7,794   17,251   14,505 
Total revenues 144,574   128,477   283,558   248,713 
Cost of revenues       
Subscription and support 30,630   25,795   59,142   49,951 
Professional services 6,486   7,128   13,245   13,645 
Total cost of revenues 37,116   32,923   72,387   63,596 
Gross profit 107,458   95,554   211,171   185,117 
Operating expenses       
Sales and marketing 62,749   66,000   124,680   126,027 
Research and development 26,802   27,902   53,907   53,150 
General and administrative (148)  14,345   28,828   43,997 
Restructuring costs 135      1,149    
Total operating expenses 89,538   108,247   208,564   223,174 
Income (loss) from operations 17,920   (12,693)  2,607   (38,057)
Other income (expense)       
Interest income 12,542   1,715   23,207   2,233 
Interest expense (1,470)  (1,457)  (2,925)  (2,904)
Other income (expense), net 11,072   258   20,282   (671)
Income (loss) before income taxes 28,992   (12,435)  22,889   (38,728)
Provision for (benefit from) income taxes 926   (464)  1,554   (13,326)
Net income (loss) 28,066   (11,971)  21,335   (25,402)
Net income (loss) attributable to redeemable non-controlling interest 320   (121)  405   (124)
Adjustment attributable to redeemable non-controlling interest (3,103)  (1,185)  2,089   (4,602)
Net income (loss) attributable to BlackLine, Inc.$30,849  $(10,665) $18,841  $(20,676)
Basic net income (loss) per share attributable to BlackLine, Inc.$0.51  $(0.18) $0.31  $(0.35)
Shares used to calculate basic net income (loss) per share 60,700   59,441   60,445   59,283 
Diluted net income (loss) per share attributable to BlackLine, Inc.$0.45  $(0.18) $0.30  $(0.35)
Shares used to calculate diluted net income (loss) per share 71,801   59,441   71,801   59,283 
                


BlackLine, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 Quarter Ended Six Months Ended
 June 30, June 30,
  2023   2022   2023   2022 
Cash flows from operating activities       
Net income (loss) attributable to BlackLine, Inc.$30,849  $(10,665) $18,841  $(20,676)
Net income (loss) and adjustment attributable to redeemable non-controlling interest (2,783)  (1,306)  2,494   (4,726)
Net income (loss) 28,066   (11,971)  21,335   (25,402)
Adjustments to reconcile net loss to net cash provided by operating activities:       
Depreciation and amortization 12,346   10,659   24,350   19,806 
Change in fair value of contingent consideration (25,535)  (14,042)  (22,429)  (15,858)
Amortization of debt issuance costs 1,379   1,373   2,741   2,730 
Stock-based compensation 19,948   20,609   40,386   36,511 
Noncash lease expense 1,694   1,416   3,192   2,861 
Accretion of purchase discounts on marketable securities, net (8,249)  (659)  (15,768)  (564)
Net foreign currency (gains) losses 429   (644)  902   (826)
Deferred income taxes 135   (273)  (52)  (14,429)
Provision for (benefit from) credit losses (24)  53   (19)  81 
Changes in operating assets and liabilities, net of impact of acquisition:       
Accounts receivable (9,465)  (3,290)  20,701   6,169 
Prepaid expenses and other current assets 1,312   934   (3,956)  3,510 
Other assets (72)  (3,104)  395   (5,198)
Accounts payable 3,436   (2,428)  (6,082)  4,127 
Accrued expenses and other current liabilities (2,574)  2,430   (13,227)  (11,385)
Deferred revenue 2,845   4,666   1,025   4,206 
Operating lease liabilities (1,858)  (2,666)  (3,512)  (4,106)
Lease incentive receipts 240   491   240   491 
Other long-term liabilities 498   2,353   (2,804)  3,359 
Net cash provided by operating activities 24,551   5,907   47,418   6,083 
Cash flows from investing activities       
Purchases of marketable securities (413,874)  (464,199)  (725,120)  (799,749)
Proceeds from maturities of marketable securities 364,500   309,000   693,300   637,250 
Capitalized software development costs (5,439)  (5,109)  (12,318)  (9,766)
Purchases of property and equipment (1,153)  (5,775)  (2,829)  (7,303)
Acquisition, net of cash acquired          (157,738)
Net cash used in investing activities (55,966)  (166,083)  (46,967)  (337,306)
Cash flows from financing activities       
Principal payments under finance lease obligations (244)  (89)  (485)  (195)
Proceeds from exercises of stock options 9,509   1,031   11,920   2,420 
Proceeds from employee stock purchase plan 5,291   4,466   5,291   4,466 
Acquisition of common stock for tax withholding obligations (1,019)  (1,815)  (13,422)  (6,002)
Financed purchases of property and equipment    (84)     (84)
Net cash provided by financing activities 13,537   3,509   3,304   605 
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash (166)  (416)  (207)  (687)
Net increase (decrease) in cash, cash equivalents, and restricted cash (18,044)  (157,083)  3,548   (331,305)
Cash, cash equivalents, and restricted cash, beginning of period 222,799   365,769   201,207   539,991 
Cash, cash equivalents, and restricted cash, end of period$204,755  $208,686  $204,755  $208,686 
        
        
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets     
Cash and cash equivalents at end of period$204,514  $208,454  $204,514  $208,454 
Restricted cash included within other assets at end of period 241   232   241   232 
Total cash, cash equivalents, and restricted cash at end of period shown in the consolidated statements of cash flows$204,755  $208,686  $204,755  $208,686 
                


BlackLine, Inc.
Reconciliations of Non-GAAP Financial Measures
(in thousands, except percentages and per share data)
(unaudited)
  Quarter Ended Six Months Ended
  June 30, June 30,
   2023   2022   2023   2022 
Non-GAAP Gross Profit:        
Gross profit $107,458  $95,554  $211,171  $185,117 
Amortization of acquired developed technology  2,980   2,957   5,929   5,294 
Stock-based compensation(1)  3,273   2,249   6,070   3,963 
Transaction-related costs  174   374   387   646 
Total non-GAAP gross profit $113,885  $101,134  $223,557  $195,020 
Gross margin  74.3%  74.4%  74.5%  74.4%
Non-GAAP gross margin  78.8%  78.7%  78.8%  78.4%
         
Non-GAAP Operating Income:        
Operating income (loss) $17,920  $(12,693) $2,607  $(38,057)
Amortization of intangible assets  5,134   5,206   10,219   9,368 
Stock-based compensation(1)  20,451   20,609   41,334   36,511 
Change in fair value of contingent consideration  (25,535)  (14,042)  (22,429)  (15,858)
Transaction-related costs  1,219   3,676   2,009   10,709 
Legal settlement costs           690 
Restructuring costs  135      1,149    
Total non-GAAP operating income $19,324  $2,756  $34,889  $3,363 
         
Non-GAAP Net Income Attributable to BlackLine, Inc.:        
Net income (loss) attributable to BlackLine, Inc. $30,849  $(10,665) $18,841  $(20,676)
Provision for (benefit from) income taxes related to acquisitions  286   145   105   (12,991)
Amortization of intangible assets  5,134   5,206   10,219   9,368 
Stock-based compensation(1)  20,364   20,517   41,104   36,357 
Amortization of debt issuance costs  1,379   1,373   2,741   2,730 
Change in fair value of contingent consideration  (25,535)  (14,042)  (22,429)  (15,858)
Transaction-related costs  1,219   3,676   2,009   10,709 
Legal settlement costs           690 
Restructuring costs  135      1,149    
Adjustment to redeemable non-controlling interest  (3,103)  (1,185)  2,089   (4,602)
Total non-GAAP net income attributable to BlackLine, Inc. $30,728  $5,025  $55,828  $5,727 
Basic non-GAAP net income attributable to BlackLine, Inc. per share:        
Basic non-GAAP net income attributable to BlackLine, Inc. per share $0.51  $0.08  $0.92  $0.10 
Shares used to calculate basic non-GAAP net income per share  60,700   59,441   60,445   59,283 
         
Diluted non-GAAP net income attributable to BlackLine, Inc. per share:        
Diluted non-GAAP net income attributable to BlackLine, Inc. per share $0.41  $0.07  $0.75  $0.08 
Shares used to calculate diluted non-GAAP net income per share  74,502   73,093   74,178   72,648 
         
(1) Beginning in 2023, includes amortization related to stock-based compensation that was capitalized in capitalized software
development costs in previous periods and totaled $0.5 million and $0.9 million for the quarter ended and six months ended
June 30, 2023, respectively.
         
  Quarter Ended Six Months Ended
  June 30, June 30,
   2023   2022   2023   2022 
Non-GAAP Sales and Marketing Expense:        
Sales and marketing expense $62,749  $66,000  $124,680  $126,027 
Amortization of intangible assets  (1,676)  (1,771)  (3,335)  (3,118)
Stock-based compensation  (6,182)  (7,438)  (12,665)  (13,362)
Transaction-related costs  (206)  (825)  (191)  (1,445)
Total non-GAAP sales and marketing expense $54,685  $55,966  $108,489  $108,102 
         
Non-GAAP Research and Development Expense:        
Research and development expense $26,802  $27,902  $53,907  $53,150 
Stock-based compensation  (3,708)  (3,810)  (7,532)  (6,707)
Transaction-related costs  (772)  (2,119)  (1,278)  (3,661)
Total non-GAAP research and development expense $22,322  $21,973  $45,097  $42,782 
         
Non-GAAP General and Administrative Expense:        
General and administrative expense $(148) $14,345  $28,828  $43,997 
Amortization of intangible assets  (478)  (478)  (955)  (956)
Stock-based compensation  (7,288)  (7,112)  (15,067)  (12,479)
Change in fair value of contingent consideration  25,535   14,042   22,429   15,858 
Transaction-related costs  (67)  (358)  (153)  (4,957)
Legal settlement costs           (690)
Total non-GAAP general and administrative expense $17,554  $20,439  $35,082  $40,773 
         
Total Non-GAAP Operating Expenses $94,561  $98,378  $188,668  $191,657 
         
Free Cash Flow        
Net cash provided by operating activities $24,551  $5,907  $47,418  $6,083 
Capitalized software development costs  (5,439)  (5,109)  (12,318)  (9,766)
Purchases of property and equipment  (1,153)  (5,775)  (2,829)  (7,303)
Financed purchases of property and equipment     (84)     (84)
Free cash flow $17,959  $(5,061) $32,271  $(11,070)