Financial Data and Key Metrics Changes - Total revenue grew to $183 million, up 8% year-over-year [28] - Subscription revenue increased by 8%, while services revenue grew by 17% due to accelerated customer go-lives and implementations [28] - Annual recurring revenue (ARR) reached $702 million, up nearly 10%, with a 1.5-point benefit from foreign exchange [28] - Remaining performance obligations (RPO) grew 23% to $1.1 billion, with current RPO accelerating to 13% [29] - Non-GAAP operating margin was nearly 25%, and non-GAAP net income margin was 25% [31] Business Line Data and Key Metrics Changes - Strategic products accounted for 33% of sales, with notable demand for intercompany and invoice-to-cash solutions [30] - The attach rate for strategic products remained healthy, reflecting the effectiveness of the go-to-market strategy [30] - The number of customers paying over $1 million in ARR increased by 20% to 85, while those paying over $250,000 rose by 14% [11] Market Data and Key Metrics Changes - SAP customers represented 26% of revenue at the end of the quarter [31] - The company serves approximately 70% of the Fortune 100, up from 50% in 2022, indicating a strong market position [7] Company Strategy and Development Direction - The company is transitioning to a unified, intelligent platform for CFOs, moving away from transactional subscriptions based on seats [6] - A partner-first approach has been adopted, focusing on larger mid-market and mega enterprise customers [6] - The company aims to drive revenue growth back into double digits while expanding operating margins [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's structural strength and the ability to execute the strategy effectively [7] - The company anticipates that lower mid-market headwinds will subside, leading to improved retention profiles in 2026 [10] - Management highlighted the importance of trust, partnership, and innovation in driving customer engagement and deal sizes [10] Other Important Information - The company completed its Google Cloud migration, which is expected to unlock further margin potential [12] - A new category of implementation agents has been released to standardize the engagement process, accelerating time to value for customers [27] Q&A Session Summary Question: Drivers behind RPO and customer adds above $250K - Management attributed the increase in RPO to the multiyear renewal strategy and longer contracts from new customers [37][38] Question: AI strategy and automation potential - Management noted that AI can significantly reduce mundane tasks for accountants, with a focus on demonstrating value and accuracy [39][40][41] Question: Customer adoption of AI - Management indicated that there is strong interest in AI adoption, with customers being cautious about policies and controls [41] Question: Dynamics of platform pricing and spending uplift - Management discussed the positive impact of the platform pricing model on average selling prices and longer-term contracts [38][39]

Financial Data and Key Metrics Changes - Total revenue grew to $183 million, up 8% year-over-year [28] - Subscription revenue increased by 8%, while services revenue grew by 17% due to accelerated customer go-lives and implementations [28] - Annual recurring revenue (ARR) reached $702 million, up nearly 10%, with a 1.5-point benefit from foreign exchange [28] - Remaining performance obligations (RPO) grew 23% to $1.1 billion, with current RPO accelerating to 13% [29] - Non-GAAP operating margin was nearly 25%, with non-GAAP net income margin at 25% [11][31] Business Line Data and Key Metrics Changes - Nearly three-quarters of new bookings leveraged the platform, with strategic products representing 33% of sales [14] - Customers paying over $1 million in ARR increased by 20% to 85, while those paying over $250,000 rose by 14% [11] - The strategic products attach rate remained healthy, contributing to sales growth [30] Market Data and Key Metrics Changes - SAP customers accounted for 26% of revenue at the end of the quarter [30] - The enterprise customer cohort maintained a revenue renewal rate of 95% and a net revenue retention rate of 107% [9] Company Strategy and Development Direction - The company is transitioning to a unified, intelligent platform for CFOs, focusing on larger mid-market and mega enterprise customers [6][7] - A shift to a platform model is changing customer relationships from transactional subscriptions to long-term strategic partnerships [10] - The company aims to drive revenue growth back into double digits while expanding operating margins [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's structural strength and the ability to execute its strategy [7] - The company anticipates that lower mid-market headwinds will subside, improving retention profiles in 2026 [10] - Management highlighted the importance of trust, partnership, and innovation in driving customer investment [10] Other Important Information - The company completed its Google Cloud migration, unlocking further margin potential [12] - A new category of implementation agents has been released to standardize the engagement process, accelerating time to value for customers [26] Q&A Session Summary Question: Drivers behind RPO and customer adds above $250K - Management attributed the increase in RPO to the success of the multiyear renewal strategy and longer contracts from new customers [37][38] Question: AI strategy and automation potential - Management acknowledged the opportunity to automate mundane tasks for accountants and emphasized the importance of demonstrating ROI and reliability in AI solutions [39][40][41] Question: Customer adoption of AI and deal dynamics - Management noted that customers are cautiously adopting AI, focusing on solutions that provide demonstrable value while considering regulatory requirements [44][46] Question: Margin dynamics and expense timing for 2026 - Management explained that Q1 typically has the lowest operating margin due to payroll taxes and sales kickoff costs, with expectations for margin expansion throughout the year [50][51] Question: Shareholder value and governance mechanisms - Management emphasized the board's commitment to fiduciary responsibilities and the importance of delivering performance to benefit shareholders [63][64] Question: Customer feedback and product development - Management highlighted the importance of customer feedback and competitive intelligence in shaping product development and ensuring alignment with market needs [71][73]

Financial Data and Key Metrics Changes - Total revenue grew to $183 million, up 8% year-over-year [26] - Subscription revenue increased by 8%, while services revenue grew by 17% due to accelerated customer go-lives and implementations [26] - Annual recurring revenue (ARR) reached $702 million, up nearly 10%, with a 1.5-point benefit from foreign exchange [26] - Remaining performance obligations (RPO) grew 23% to $1.1 billion, with current RPO accelerating to 13% [28] - Non-GAAP operating margin was nearly 25%, and non-GAAP net income margin was 25% [30] Business Line Data and Key Metrics Changes - Nearly three-quarters of new bookings leveraged the platform, with strategic products representing 33% of sales [12][30] - The number of customers paying over $1 million in ARR increased by 20% to 85, while customers paying over $250,000 rose by 14% [10] - The strategic products attach rate remained healthy, reflecting the success of the go-to-market teams [29] Market Data and Key Metrics Changes - SAP customers accounted for 26% of revenue at the end of the quarter [30] - The enterprise customer cohort maintained a revenue renewal rate of 95% and a net revenue retention rate of 107% [8][29] - Demand was notably strong for intercompany and invoice-to-cash solutions, both achieving record years [29] Company Strategy and Development Direction - The company is transitioning to a unified, intelligent platform for CFOs, moving away from transactional subscriptions based on seats to long-term strategic partnerships [4][9] - The focus is on larger mid-market enterprise and mega enterprise customers, with a partner-first approach [4][5] - The company aims to drive revenue growth back into double digits while expanding operating margins in line with multi-year financial targets [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's structural strength and the ability to execute the strategy effectively [5] - The company anticipates that lower mid-market headwinds will subside, leading to an improving retention profile in 2026 [9] - Management expects total GAAP revenue for Q1 2026 to be in the range of $180 million-$182 million, representing approximately 8%-9% growth [32] Other Important Information - The company completed its Google Cloud migration, unlocking further margin potential [11] - The acquisition of WiseLayer is seen as a technology buy that will accelerate the company's AI capabilities [76][80] - The company returned approximately $34 million to shareholders through share repurchases in the quarter [31] Q&A Session Summary Question: Drivers behind RPO and customer adds above $250K - Management attributed the increase in RPO to the multiyear renewal strategy and longer contracts from new customers [36][37] Question: AI strategy and automation potential - Management noted that AI can help automate mundane tasks for accountants, with a focus on demonstrating value and ROI [38][39][40] Question: Customer adoption of AI and deal dynamics - The company is seeing increased interest in AI solutions, with customers adopting features like Journal Risk Analyzer and Verity [44][45][46] Question: Margin dynamics and expense timing for 2026 - Management explained that Q1 typically has the lowest operating margin due to payroll taxes and sales kickoff costs, with expectations for margin expansion throughout the year [48][49][50] Question: Shareholder value and governance mechanisms - Management emphasized the board's commitment to fiduciary responsibilities and the importance of delivering performance to benefit shareholders [62][63] Question: Customer feedback and product development - The company gathers feedback from customers and partners to inform product development and ensure alignment with market needs [72][74]

Core Insights - BlackLine, Inc. reported strong financial results for Q4 and full year 2025, highlighting record bookings and a successful strategic transformation initiated over two years ago [2][6]. Financial Highlights Fourth Quarter 2025 - Total GAAP revenues reached $183.2 million, marking an 8.1% increase from Q4 2024 [6]. - GAAP operating margin remained stable at 3.7%, while non-GAAP operating margin improved to 24.7% from 18.1% in Q4 2024 [6]. - GAAP net income attributable to BlackLine was $4.9 million, or $0.08 per diluted share, a decrease from $56.4 million, or $0.79 per diluted share in Q4 2024 [6]. - Non-GAAP net income attributable to BlackLine was $45.2 million, or $0.63 per diluted share, up from $34.6 million, or $0.47 per diluted share in Q4 2024 [6]. - Billings increased by 9.5% to $226.9 million compared to Q4 2024 [6]. - Remaining performance obligation rose by 23.5% to $1.1 billion [6]. - Operating cash flow was $26.7 million, down from $43.8 million in Q4 2024 [6]. - Free cash flow decreased to $19.9 million from $36.5 million in Q4 2024 [6]. Full Year 2025 - Total GAAP revenues for the year were $700.4 million, a 7.2% increase from 2024 [6]. - GAAP operating margin improved to 3.6% from 2.8% in 2024 [6]. - GAAP net income attributable to BlackLine was $24.5 million, or $0.39 per diluted share, compared to $161.2 million, or $1.45 per diluted share in 2024 [6]. - Non-GAAP net income attributable to BlackLine was $157.0 million, or $2.13 per diluted share, slightly down from $162.1 million, or $2.18 per diluted share in 2024 [6]. - Operating cash flow for the year was $169.6 million, down from $190.8 million in 2024 [6]. - Free cash flow decreased to $134.9 million from $164.0 million in 2024 [6]. Customer Metrics and Business Developments - BlackLine had a total of 4,394 customers as of December 31, 2025 [5]. - The company achieved a dollar-based net revenue retention rate of 105% [12]. - BlackLine expanded its global cloud footprint to Saudi Arabia and secured an official listing on the FedRAMP Marketplace [12]. - The acquisition of WiseLayer, an AI-powered accounting and finance automation company, was completed to enhance BlackLine's AI capabilities [12]. Financial Outlook First Quarter 2026 - Total GAAP revenue is expected to be in the range of $180 million to $182 million [13]. - Non-GAAP operating margin is projected to be between 18.5% and 19.5% [13]. - Non-GAAP net income attributable to BlackLine is anticipated to be between $31 million and $33 million, or $0.44 to $0.46 per share [13]. Full Year 2026 - Total GAAP revenue is expected to be in the range of $764 million to $768 million [13]. - Non-GAAP operating margin is projected to be between 23.7% and 24.3% [13]. - Non-GAAP net income attributable to BlackLine is anticipated to be between $172 million and $180 million, or $2.37 to $2.48 per share [13].

Core Viewpoint - BlackLine has received a notice of nomination from Engaged Capital for three director candidates to be elected at the 2026 Annual Meeting of Stockholders, with the meeting date yet to be announced [1] Group 1: Board of Directors and Governance - The Nominating and Corporate Governance Committee will review the proposed nominees and present formal recommendations in the definitive proxy statement [2] - The Board has engaged in multiple discussions with Engaged Capital over the past year, aiming for constructive dialogue to enhance stockholder value [3] - The Board plans to reduce its size from 12 to 11 directors following Tom Unterman's decision not to seek reelection, resulting in three Class I director seats available for election [4] Group 2: Strategic Initiatives and Financial Outlook - BlackLine introduced several initiatives in November 2024 to support its refreshed strategy, with updates expected during the upcoming quarterly earnings call [3] - The Board has maintained an independent strategic committee for over a year, with Morgan Stanley & Co. LLC serving as financial advisor [3] Group 3: Company Overview - BlackLine is a platform for the Office of the CFO, focusing on digital finance transformation through accurate and efficient financial operations [5] - The company has over 4,400 customers across various industries, emphasizing its collaborative approach and innovation supported by significant R&D investment [6]

Group 1 - BlackLine, Inc. will release its financial results for Q4 and the full year ended December 31, 2025 on February 10, 2026, after market close [1] - A conference call will follow the financial results announcement at 2:00 p.m. PT / 5:00 p.m. ET, with a live webcast available on BlackLine's investor relations website [1] - Participants are encouraged to join the conference call fifteen minutes early to avoid delays [1] Group 2 - BlackLine is a platform designed for the Office of the CFO, focusing on digital finance transformation through accurate and efficient financial operations [2] - The platform, built on Studio360, integrates data, streamlines processes, and provides real-time insights using automation and AI capabilities [2] - BlackLine has over 4,400 customers across various industries, showcasing its collaborative approach and commitment to innovation [3]

Core Insights - Tom Unterman intends to retire and will not seek re-election to the BlackLine Board of Directors at the upcoming Annual Meeting in May 2026, having served since 2010 [1][2] - Unterman's contributions have been recognized as invaluable, providing strategic oversight and guidance that helped position BlackLine as a leader in the Office of the CFO [2] - The Board of Directors plans to reduce its size to 11 members following the 2026 Annual Meeting [1][2] Company Overview - BlackLine is a platform designed for the Office of the CFO, focusing on digital finance transformation by enhancing financial operations through automation and intelligence [3] - The company utilizes the Studio360 platform to unify data, streamline processes, and provide real-time insights, supported by AI capabilities [3] - BlackLine has over 4,400 customers across various industries, emphasizing its collaborative approach and commitment to innovation [4]

Core Insights - BlackLine, Inc. has expanded its global cloud footprint to Saudi Arabia, partnering with Google Cloud Platform to offer a locally hosted cloud region [1][2] - The new deployment provides a secure environment that meets local data residency and cybersecurity requirements, aligning with Saudi Arabia's regulatory standards [2][3] - This expansion positions BlackLine to support Saudi enterprises in their economic diversification and modernization initiatives, enhancing their financial operations [3][6] Company Overview - BlackLine is a platform designed for the Office of the CFO, focusing on digital finance transformation through accurate and efficient financial operations [7][8] - The company’s solutions are ERP-agnostic and include partnerships with key players like SAP, EY, and Deloitte, which enhance local implementation and support [4][5] - BlackLine's technology, including the Studio360 platform and Verity AI suite, enables organizations to unify data, automate processes, and gain real-time visibility [5][7] Market Positioning - The expansion into Saudi Arabia reflects BlackLine's commitment to meeting customer needs in regions with stringent data residency requirements [5][6] - The company aims to inspire and guide digital finance transformation for organizations globally, leveraging its strong partner ecosystem to enhance service delivery [6][8]

Core Insights - BlackLine, Inc. actively engages with its stockholders, having met with Engaged Capital seven times in the past 12 months, demonstrating a commitment to constructive dialogue with all shareholders [1] Company Overview - BlackLine (Nasdaq: BL) is a platform designed for the Office of the CFO, focusing on digital finance transformation by providing accurate, efficient, and intelligent financial operations [2] - The company utilizes the Studio360 platform to unify data, streamline processes, and deliver real-time insights through automation and AI capabilities powered by Verity [2] Customer Base and Innovation - BlackLine has over 4,400 customers across various industries, indicating a broad market presence and a collaborative approach to innovation [3]

Financial Data and Key Metrics Changes - Total revenue grew to over $178 million, up 7.5% year-over-year [38] - Subscription revenue increased by 7%, while services revenue grew by 13% due to accelerated project delivery [38] - Annual recurring revenue (ARR) reached $685 million, up 7.3% [39] - Non-GAAP operating margin was 21.4%, reflecting improved productivity [43] - Non-GAAP net income attributable to BlackLine was $38 million, representing a 21% margin [44] Business Line Data and Key Metrics Changes - New customer bookings increased by 45%, with the average new deal size more than doubling by 111% [7] - Strategic products accounted for 36% of sales, up from 32% last year [42] - SOLEX revenue accounted for 26% of total revenue, remaining steady [42] Market Data and Key Metrics Changes - Customer count reached 4,424, reflecting a strategic resegmentation away from lower-end customers [41] - Revenue renewal rate was 93%, up from the previous year, driven by strong enterprise performance [41] - Net retention rate for the quarter was 103%, despite a headwind from foreign exchange [41] Company Strategy and Development Direction - The company is focused on accelerating revenue growth and margin expansion as it transitions to a platform-based pricing model [6][12] - Emphasis on winning larger, more strategic platform deals against major competitors [7] - Continued progress in the public sector, with expectations for FedRAMP approval in early 2026 [11] - The company is modernizing its technology stack to support scalable, efficient, and AI-powered innovation [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering sustained profitable growth, supported by a strong pipeline and operational improvements [36][48] - The macro environment is currently stable, with potential tailwinds from corporate job layoffs creating opportunities for efficiency discussions with customers [100] - The strategic transition to platform pricing is expected to take time but is viewed positively for long-term customer commitment [13][72] Other Important Information - The company returned approximately $113 million to shareholders through share repurchases, reflecting confidence in long-term value [44] - The planned churn from the strategic de-emphasis of lower-end market customers is nearing completion [14] Q&A Session Summary Question: Impact of large customers pausing user ads - Management acknowledged that some deals slipped into Q4, costing a couple of million dollars, but noted an increase in larger enterprise deals [53][54] Question: Automation and customer attrition - Management explained that success-based attrition is occurring as customers achieve higher efficiency with fewer licenses, which is a positive long-term trade-off [72] Question: Factors driving expected bookings growth - Management highlighted the importance of changing conversations to focus on digital finance transformation and deepening relationships with partners [85][86] Question: Competitive takeaways - Management noted an uptick in competitive wins, attributing it to the company's proven track record and improved implementation quality [88][89] Question: SAP relationship and pipeline building - Management confirmed a solid relationship with SAP, focusing on joint customer success and reducing attrition [96][97] Question: Macro environment characterization - Management indicated that the current macro environment is stable, with no significant impacts from tariffs, and noted potential tailwinds from job layoffs [100]