BlackLine (BL) 13 Feb 242023 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to the BlackLine Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please note that today's conference call is being recorded.I would now hand the conference over to Matt Humphries, Vice President of Investor Relations. ahead. go Please

Partin, thank on and Tucker, joining today. as us Executive Good call you are me Mark well as the of Therese Financial Owen With Officer. Officers afternoon BlackLine; for Chief Ryan Co-Chief and

actual would disclosed non-GAAP are stated, All get today events, and call.While XXXX, are otherwise current not filed future measures only particular disclaim that that our certain BlackLine's to otherwise last we of believe the in year, historical our we uncertainties, forward-looking or on with forward-looking objectives, update make or SEC this in our the statements non-GAAP. otherwise, of of period Owen year non-GAAP statements, today.Now, facts, turn historical any results to of in Form Co-Chief as is and in guidance outlook including our based as GAAP our and during Before regarding expectations undertake and for Private investors.blackline.com Form I'll available and the XXXX. stated Reform alter comparisons represent materially, and as Investor the to our like XX-Q. Commission, X-K conference and future forward-looking reports performance, information, today subject These made any which A plans, reasonable, this including Owen? during information our could note these or particular measures within as statements relate on except those the We over our by with noted.Finally, our the our be of in QX Exchange found of I differ financial statements Officer, financial forward-looking on call of will our XX-K statements started, on result this and of risks whether do we currently made are call at not expressly statements are those Litigation obligation regarding are full filed date expected meaning Securities call Ryan. unless Securities law. applicable new corresponding this Act to be the website Relations as to discussion call Form the release, versus results of earnings required unless a may our these Executive call periodic reconciliations

mid-market with you joining the you, today. Thank in Matt, Thank in revenue good in Notably, profitability total our $XXX non-GAAP revenue $XX million ARR.Our we annual from recurring by and ended We quarter and success consistent with expectations relationship year sales everyone. fourth with was afternoon performance $XXX partners, this quarter including or us all for income. in driven revenue million and and SolEx exceeded our the performance net continued teams. million

relationships to spent XXXX. saw rates to action and customers new strategy we a sales also of and we efforts, and implement strategy refined time the a back disciplined of a reenergizing with activate corporate working business, for model with the these operating trusted speaking across partners.On strategic took most and more and and a our BlackLine great I close took and reins this on refresh embarked at higher quarter. force vision. and Last We Therese productivity journey long-term year, our the deal improvement Together, in

and of the to partners the the the automation payment, relationships accounts cash as and organization, with expect name our can term, harnessing deepen our to becoming platform, with across extend FRA support solutions the and is deep go-forward powered well close, we To markets, invoicing that highest is consistent capabilities longer here, additional invoice embedded CFO. our our our office end-to-end this, the invoice have One as to We we partner or financial customers. acquire decision-makers accounting build a consolidation, key intercompany simple. lead our solutions, Our new cash. solutions.Over receivable priorities to are either note with more our strategy electronic within at for plan which and and contains presentment

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shifts focus and guidance. Mark? some will over Partin, that, color I'd to results provide on the execution.With our XXXX, in to additional our turn who financial like to Now, review Mark it

you, Thank Therese.

support Our as environment demonstrate inherent model leverage in continued a that the past predictability and our despite profitable this growth. quarter market such can results this,

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of of QX, SAP had show growth this represented XX% and In SolEx quarter. revenue performance well revenue to a total in continues partnership grow to total margins. solid our ahead rate revenue.Turning

gross income margin gross teams. we income margin non-GAAP XX%, net our $XX XX%, to driven performance, of and remain disciplined optimization by gross force management.Non-GAAP proactive with of XX% XX%, cloud operating was expense non-GAAP net was a non-GAAP BlackLine margin. a Non-GAAP combination margin as on expense million, within efficiency Our sales subscription was representing attributable margin

in cash flow in margin and flow million million strength bottom a Our XX%. cash We $XX in generated income operating of flow operating cash free quarter, the net the and income with outperformance interest drove line. on $XX free

expecting contemplate $X.X ended the cash, over in in we a equivalents our market cash with marketable environment. are securities.As guidance not for we the material we billion and Finally, quarter XXXX, improvement

visibility and this new into later clarity an cautiously with our that the level Combined guide. implementation we've of view of are not year, outlook. we XXXX year, will operating a higher and this optimistic are our pragmatic with we model While embedded approaching emerge that appropriately

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margin progress around We making provide clarity we on on a the more operating to also believe are our the growth.Lastly, will addition comment of I profitable revenue want brief our guidance. non-GAAP make

we to see a revenue discussed, the and the projects. growth services move to is that operating full As trend million we revenue Conversely, is quarter GAAP a in $XXX via million, revenue moving generally with expectation we through year.With flat of quarter powered be expect one the representing with as take digits with result year. first guidance for we total to subscription expect services midpoint growth. to to forward to partner $XXX model of services and revenue XXXX. more each acute, partners point are down total for our will that above the XX% we approach said, more our range revenue XXXX, implementation on expected in the XXXX, growth to growth an expect become revenue versus being professional see that XX% the incremental total to mid-single of in approximately headwind headwind The Net

$XX to million $X.XX of margin $X.XX report basis. million non-GAAP to in or non-GAAP $XX a income range to expect of per share we operating BlackLine XX%, and a net attributable on expect report to the We to to XX%

of year approximately XX.X diluted shares.For total expected XXXX, weighted growth. million be is count $XXX.X range to GAAP to X% share to XX% the we $XXX.X revenue the Our million be in expect to average million, representing full

XX%. We XX% expect of operating to margin non-GAAP to report

million BlackLine report to $XXX of basis. attributable share expect to a We or million $X.XX $X.XX non-GAAP to to net income per $XXX on

is that, discussion count to take expected the open million share questions. now ask XX operator Our average I'll the to your diluted to shares.With approximately be weighted

is first from the Thank Instructions] Bard. you. with Oliver [Operator And coming question line Rob of our

line open. Your is

Great. team. question. for afternoon Thank taking you. BlackLine Thanks my Good

questions Therese, or for Owen you. For for

key in you And SAP, charge now of talking handful have back there year. SI a relationships, here had Owen with been channel, that after know reorg. were kind initiatives sales of You guys almost going SI a you, I the strategic

you quick traction hearing is of one, order, first expect Thanks. we three rank all in we're manifest from those? maybe you you're with Could that made turn to what think growth? the those. seeing you've the but I I'll if progress most a where I real revenue And in where kind follow-up, see hop queue. limited back to of had I'm And the a in on

more us Rob. say, Thanks, would it's I not of do made, progress still made, proud we've the first, And progress but an the satisfied we've we're very we're with while much for to as organization.

this feel I sales all amongst and time. of we we've progress I from them particular the SAP, highlighted like three things our in that there made integrators, at think you've think point with systems reorganization progress and between three of

very, those, see focus teams, together, SAP. our progress working the service to very to we more internally and cited closely the starting discipline to call examples. us, real encouraged important just the to a from account much past very sales a of think customer quarter, by I very we BDRs what's with some for our taking strength place. we're they and teams, that.Obviously, all we're the management, use powerful usually about number comment We but with with This started given the were and

And then systems believe, with integrators, with office program, we're very about team.And the their on on we're closely more new by there. very them. spending which excited SAP, of the lot CFO identified I recently, working And going that of so time of a we're what's leader a encouraged

how joint we as closely that make feedback are making favorite what But I naming working those market we think as pretty better together, our feel worked prioritization from from providing the our We've sure customers of and we're our It's implemented that well all very -- to we're got adopted. covering of think everything of all me number a we we could off There's net-net, folks account good feel be doing them about so, products, very perspective. plans in those around verticals, way commitment. along go areas. their child. a potentially progress to Therese to of bullish I about through the industry how rank are we like hard your good for net-net, with

kind And if like anything I might, how strategically and package I to other too, are here that potentially we price the you. cash products side, invoice think to expect maybe in just to about should customer? differently about ARR to you Is your impact the works. how this guys per products quickly, today, sounds to just you or And priced to while thinking on don't if of differently. disclose or if Thank cash they're packaged it's it be opportunity, the new start right? taking something And like could invoice way

I'll this one. on Thanks, Rob. in jump

I is customers, ongoing in you're phasing share pricing, do good able a job, that's is doing we of the an experiment And ultimately, users. want out you if to things base know you're you to think right? because of value always sort one your basically that what pricing delivering user think that you're those to to want be all I more

deliver of matching are to terms rate related the doing of other We've ways of products, customers. our value the strategic pricing to pricing. sort we complexity plans our at we our and that other and got are of types in So, definitely looking that

to a little So nothing announce how to yes, bit today. handle cash -- but to invoice differently we and are at looking this

Sklar from next the with James. Raymond And our line Alexander you. Thank of question coming

Your is line open.

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Yes.

it's think good any I I macro. from that yet sitting today we've of tailwind wow, question. here gotten kind really saying a know the we're don't

still tailwind. headwind feels a I In say a fact, bit would more little than like a it

of thing are of and the think I proud proud the that I'm team. execution our is we most of

we close feel chose the for quite the in opportunities, our about where mid-market. well, So enterprise good customers we well on pursue executed, as particularly in our we those space, feel mid-market the as to teams rate both

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just and intensity. And up realize go-to-market into Great operating XX kind it's you marketing sales a bit are there. color outlook factored XXXX marketing? how but thinking and what's It's and for the been of the in below time hiring macro, your following team? from in this medium Mark, I from ago. sales a Okay. here your of months on And targets terms then long-term about long

intensity most just aspects it, model the it but of key is and changes some related the efficiently part sufficient Yes. Like very this capacity the and we operating of sort Thanks, leadership, that greater started it comes. if around the when expand to with Alex. in at of sales to year part and operating We're rep driving market organization, demand additional the the of meet of of productivity.

the make likely our for to on stage, that if most the board. capacity right demand focused So, after on and plan XXXX as the at customer salespeople have see best increasing we at it come we is place, sure a

Got it.

So just to we're clear on that. make sure

after are you So XX operating this medium-term just still still as targets of getting changes place. to interim in focused in see We're relevant period. on kind those those it model

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Our is below think which optimum midterm this model, point. marketing it's the at we At sales target the of right demand, level. your level is and

Thank much. Okay. very you,

Matthew line our Thank next coming with the BTIG. VanVliet of question, you. And from

open. line Your is

afternoon. laid Thanks increases some that is you're going of what Thanks. strategy at much timing guide at is play price taking of lower of churn much with terms for How or additional Hey in good new contemplated of talking end guess out? about? that least increases meaningful XX the lastly, ASP then sort or the looking the of out, XX% you're guide? from expecting how to of within you're much encompass that question. customers And kind to functionality how refresh sort when I the curious the

tag So bit answer a this I think question. little Therese to and on maybe go, team the

perspective, team strategic is the some us. already with a money the their gave bit our of hint a where that's really return about our I'm year this the what at of taking deliver spending little getting There's innovation again. wait BlackLine from and just trying And certainly of the do probably deliver obviously, made price that that very of Therese we things that pricing, she more on make course way the customers. a excited we're we the hard is year. to to bit sort for think sort we to. that, look and But reprice And trying I driving, working of about biggest on that of an to like they're a So, share that thing we're achieving. sure appropriate our begin will of they're we we're are can't feel over a the Therese value value through be value how to the for customers we're customers additional to little

mean as churn, for that I customers just to a if to customers figure you if trying may what that some think we not are have the to of we the to off things perspective. might out, be appropriate, sort transformation will them separate Mark they're a to that remember, of not attrition going accounts. necessary the going and you to out, really opt was there are value help help smaller these what think customers number much been they the succeed from conversations of thing sort think is journey give expect want with we've to that asked. better the with, guidance to do will, will we'll the But more recognize BlackLine out, kind drive It's a much engaging or of that on take them more and offer really is on have proactive probably of of ways. going what do.I because in what you opt that just they're advantage then sort this smaller with our tend where if can that we little churn looking as will, if they're go them to --

percentage ACV, count from sticks of a as it a so, out a significant, but not bit particularly customer little more. obviously, And perspective,

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decision deeper Is for the about verticals? to of to is train minutes verticals, you we thought, this question. off initiative you last that longer-term optimizing sort you. build the sort out the can talking Maybe Thanks few for of taking should of to about Or just ROI going that again to the how spend different in into expand market Great. in sort a of And that think about time? Thank of is 'XX? over push a to affect play expect this you this go sort customers?

I love that question.

near we're to you what thank accomplish trying So think, dear our and pipeline. I it's to because

on and partners team and I able A you with same of taking and are to team with doing and being for customers we go and industry, going more sort teams And think companies we that help being coming yesterday. you to a has, and can should and positive. trying the that's think we we make for could no will. our teams much are else And to had companies think to Pac.And no you very very I'm fact sales product internally Asia organization Mark the the to of what and more this.And that doing customers. one they to are our customer, that obvious indications are our that in able America, future here's that's think partners then where Europe are serve, work And more over real company company don't There's able very, one with And again, others who kind with at. early around us compare of is much and in next.I be we versus bring were to pretty crown company more is the not-too-distant industries us a much that's working have things being it do also I customers efficient, watch your and of with marketplace. in We've in this bring more a they the could have I that to to the jewels started after boom looking is, back And drives wind were get column. like, think Appleseed leverage going because account for very thing efficient to peer base. and subindustries. real It our because more we're if customer And we're we to it similar Therese customers that I real our over North we our that customer find we wind excited very companies now to my the the about space -- knowledge then the we're where up to in approach C I smart And being reasons might already of our different B the going what where one our in our targeted our understanding might want product years. trying to both using what had our on call to to Johnny insight management makes successful. our to value then Asia for go be that team XXXX. what similar pursuit it they're on-tapped sharing and what our certain just this have do. in value It's with what be then in Pacific who white the large customers of

can the course we'll industries we So have as that of are as quickly in development, that driving throughout and year. keep the we five already

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going Hey the person particular, role number? and who's the So hitting that they about solution you to for mind in think the you. how work, work? they hook is how and the Thank Therese, can I we of just pillars? the through talk charge Great. going more do again in are does are what on

it. Love Okay.

four today. the the bread the Financial pillars, And Solution our are obviously, butter one which our So been typically that over years. Close first has is and

Management. Financial Intercompany is second The

products. our The and one Consolidation, okay, and Financial Analytics newer of third the Reporting is is Invoice-to-Cash, fourth

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Thank you.

Koji of queue coming in question Ikeda Bank of with Our America. line next the from

is line Your open.

target. upsell us XX% Hey just help retention, the expand and what target? about growth understand I the there and stabilizing you be to guys. at XX% net XXX%. medium-term that How Thanks between maybe are XX% the to What the here to to the get revenue like targets, components? wanted much Could what growth to so and think to about XX% looks thinking revisit of components cross-sell growth revenue kind to question, for taking new

Thanks, Koji.

the a wallet begins wider transformation digital our with I out of We're think to And we've the either greater higher of inside large drive office CFO. I'll share our real for we've built together, start and opportunity are account tools with with $X opportunity and based resident customers, expansion. got acquired, reaching and the And both the putting market laid on and existing messaging. solutions and algorithm We through products in that the our targets. Mid-Market. Enterprise original with billion-plus midterm that a

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Now things include to some you course, the about we've the that of product of that talked strategic the and last of then the over components year. upsell,

that we believe in the The Japan emerging market still still Europe with We acquisition. of that opportunities an untapped this the where today, is logo second markets component is we still operate are in even whether firmly financial new company most America, in North believe the in there or here and potential, are or potential. close in IXC, -- and Invoice-to-cash our it's

return growth the That's and the algorithm. and the are and operating XX% new XX% on is markets And attack to strategy territories. so the in expansion that built model the market competing account to and to share logos built to where continued new in market get

Appreciate you. Thank Mark. much, so Thanks it.

Thank you.

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the months? you done -- gross gross between questions. what for that retention to is of and What Thank to retention be And rates. to it the is thinking how move going was? the where to going to Or like the next time? Is ask over it it I wanted are back mid-market unpack to seems take if you stabilizing understand that the Mark, you possible a are Maybe just to trajectory to you needs enterprise? bit. Is kind taking be can you it Great. retention about that trying XX retention to unpack be?

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Understood. Thank you.

you. Thank

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to So the wanted interest and sure want today. Take have participation of thank to Everybody, up appreciate your of forward Look their care. day. sort for BlackLine. I everybody you. rest Really appreciate follow-up it. we'll close thank in have just a the great meeting. And the to I'm conversations. I

Ladies today. participation. conclude and for Thank you conference gentlemen, does that the your for

You may now disconnect.