Financial Data and Key Metrics Changes - For Q2 2025, revenue was $514 million, a decrease of 3.8% from $534 million in the prior year [28] - Adjusted EBITDA increased to $52 million, representing a 12% year-over-year increase and a margin improvement of 140 basis points to 10.1% [7][28] - Free cash flow was $86 million, up from $35 million in the prior year, reflecting a significant increase in operating cash flow [36] Business Line Data and Key Metrics Changes - In the Engage segment, revenue decreased by 4.3% to $400 million, but operating income increased by 26.3% to $18 million, reflecting a margin improvement [29][30] - The Digital segment saw a revenue decline of 2.3% to $114 million, but operating income increased by 22.8% to $18 million, largely due to a one-time sale of IP software [32][33] Market Data and Key Metrics Changes - The Engage backlog was $1.64 billion, representing 101% of the updated 2025 revenue guidance midpoint, indicating strong future revenue potential [31] - The Digital backlog was $387 million, or 83% of the 2025 revenue guidance midpoint, slightly down from the previous year [35] Company Strategy and Development Direction - The company is focused on expanding AI and analytics capabilities, diversifying its CX technology partner network, and enhancing operational efficiencies [7][12] - There is a strategic shift towards offshore operations, with a focus on acquiring new business in regions with high-quality talent [70][73] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is economic uncertainty, they are confident in the company's ability to navigate challenges and achieve historical growth rates [90] - The company is seeing a cautious but positive trend in client spending, with many clients reallocating business due to market consolidation [56][58] Other Important Information - The company is committed to improving profitability, cash flow generation, and debt reduction, with a net leverage ratio of 3.39 times, down from previous quarters [37][42] - The normalized tax rate increased to 43.4% due to the impact of a valuation allowance recorded against US pretax losses [38] Q&A Session Summary Question: Update on bank discussions regarding revolver renewal - Management is in active discussions and is confident of closure in Q3 [48] Question: Broader application of accent neutralization technology - The technology is operational and opens up new markets by allowing access to highly educated talent with diverse accents [50] Question: Client recognition of the need to move forward with programs - Clients are cautious due to economic uncertainty but are reallocating business and recognizing the need for technology capabilities [56][58] Question: Performance of Engage offshore business - The offshore mix improved, with a focus on expanding in regions like South Africa and Eastern Europe [73] Question: Vertical opportunities for the second half - Opportunities are seen in financial services, healthcare, technology, travel, and streaming media [75][78] Question: Blended pricing and rate cards - Management prefers blended pricing but does not see it as deflationary; rather, technology application leads to increased business allocation [84][86] Question: Risks around customers shifting work offshore - The labor market in the US is tight, leading clients to consider offshore options for quality and quantity [88][90]

Financial Data and Key Metrics Changes - Total revenue grew to $172 million, representing a 7% increase year-over-year [39] - Subscription revenue increased by 7%, while service revenue grew by 3% [39] - Annual recurring revenue (ARR) reached $677 million, up over 9% [39] - Non-GAAP operating margin was 22%, driven by gross margin performance and improved productivity [43] - Non-GAAP net income attributable to BlackLine was $38 million, reflecting a 22% net income margin [44] Business Line Data and Key Metrics Changes - The average new deal size grew by 35% year-over-year, driven by increased adoption of full Record to Report capabilities [10] - Strategic products represented 30% of sales, up from 28% last year, indicating improved cross-sell opportunities [41] - Intercompany, invoice to cash, and transaction matching showed particular strength this quarter [42] Market Data and Key Metrics Changes - The customer count at the end of the quarter was 4,451, slightly up from the previous year [40] - The $1 million customer count rose to 84, up 24% year-over-year [11] - Pipeline growth was up 70% year-over-year, indicating strong market demand [14] Company Strategy and Development Direction - The company is transitioning to a platform model, focusing on serving the Office of the CFO and enhancing go-to-market strategies [9] - The introduction of the new pricing model has driven adoption and larger deal sizes, with about half of eligible new logos adopting it in Q2 [16] - The strategic focus on larger and mid-market customers is validated by a 55% year-over-year growth in mid-market new deal sizes [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory and highlighted the importance of customer success in their strategic evolution [8] - The management team acknowledged the challenges in the operating environment but emphasized the strong pipeline and market interest [88] - Future guidance includes total GAAP revenue expected to be in the range of $696 million to $705 million, representing 6.5% to 8% growth [46] Other Important Information - The company is making significant progress on its FedRAMP journey to expand its position in the public sector [37] - The GCP migration is nearing completion, enhancing performance and lowering future costs [36] - The company repurchased approximately 796,000 shares for about $43 million in the quarter [45] Q&A Session Summary Question: Can you break down the large deal momentum and its drivers? - Management noted that the pipeline has been growing, with a combination of deals that slipped from the previous quarter and new opportunities maturing [50][52] Question: What is the impact of the new unlimited user pricing model? - Management indicated that there is early proliferation of licenses across organizations, which is expected to drive consumption and net retention rates [54][56] Question: What are the learnings from customers regarding the new pricing model? - The sales team is observing transformative conversations with customers, focusing on overall platform benefits rather than just license counts [62][64] Question: Can you elaborate on the role of Studio three sixty? - Studio three sixty serves as the foundational platform for all products, with varying levels of access and capabilities based on customer needs [101][104] Question: What is the significance of the partnership with Snowflake? - Snowflake is crucial for handling large data volumes and enhancing the platform's capabilities, allowing for high-frequency reconciliations and data sharing [108][109]

Financial Data and Key Metrics Changes - Total revenue grew to $172 million, reflecting a 7% increase year over year [38] - Subscription revenue increased by 7%, while service revenue grew by 3% [38] - Annual recurring revenue (ARR) reached $677 million, up over 9% [38] - Non-GAAP operating margin was 22%, driven by gross margin performance and improved productivity [41] - Non-GAAP net income attributable to BlackLine was $38 million, representing a 22% margin [42] Business Line Data and Key Metrics Changes - The average new deal size grew by 35% year over year, driven by increased adoption of full Record to Report capabilities [9] - Strategic products represented 30% of sales, up from 28% last year, indicating improved cross-sell opportunities [40] - Intercompany, invoice to cash, and transaction matching showed particular strength this quarter [40] Market Data and Key Metrics Changes - The customer count at the end of the quarter was 4,451, reflecting a slight increase from the previous year [39] - The company secured significant wins in various sectors, including media, oil and gas, and life sciences, demonstrating strong market demand [10][11][12] - The pipeline grew by 70% year over year, indicating robust market interest and demand [13] Company Strategy and Development Direction - The strategic shift to a platform company serving the Office of the CFO is driving accelerated success [7] - The company is focusing on larger and mid-market customers while deprioritizing smaller accounts [20] - The introduction of the new pricing model has proven successful, with about half of eligible new logos adopting it [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory and highlighted the importance of customer success [5][6] - The company anticipates that the momentum from the new pricing model and strategic initiatives will translate into bookings and revenue growth in the coming quarters [19] - Management acknowledged the challenges in the operating environment but remains optimistic about future growth opportunities [86] Other Important Information - The company is making significant progress on its FedRAMP journey to expand its position in the public sector [36] - The GCP migration is nearing completion, enhancing performance and reducing costs [35] - Over 40% of renewals in the first half of the year were multiyear, indicating strong customer commitment [21] Q&A Session Summary Question: Can you break down the large deal momentum and its drivers? - Management noted that the pipeline began to grow significantly in September, with a combination of slipped deals and new opportunities contributing to the strength [49] Question: What is the impact of the new unlimited user pricing model? - Management indicated that there is early evidence of customer proliferation across organizations, with ongoing monitoring of its impact on net retention and upsell [54] Question: What feedback have you received regarding the attractiveness of the new pricing model? - Management reported that the new pricing model has generated transformative conversations with enterprise customers, focusing on overall solutions rather than just license counts [60] Question: Can you elaborate on the role of Studio three sixty and its integration with Snowflake? - Management explained that Studio three sixty serves as the foundational platform for all products, with Snowflake enabling the handling of large data volumes effectively [104]