BlackLine Announces Fourth Quarter and Full Year 2023 Financial Results


LOS ANGELES, Feb. 13, 2024 (GLOBE NEWSWIRE) -- BlackLine, Inc. (Nasdaq: BL), today announced financial results for the fourth quarter and full year ended December 31, 2023.

"BlackLine closed the year with solid results, surpassing our expectations for both revenue and profitability, highlighting the powerful operating leverage embedded in our model," said Owen Ryan, co-CEO of BlackLine. "Further, we aligned to a new operating model that directly supports our strategy of leading with solutions and harnessing the power of our partner ecosystem to solve real business problems for our customers."

"Customer-centric innovation has consistently been at the core of our culture, our strategy, and our success at BlackLine. It serves as the catalyst for inspiring, powering, and guiding digital finance transformation for our customers," said Therese Tucker, co-CEO of BlackLine. "As we look ahead, our teams are committed to executing and showcasing why BlackLine stands as a market leader and the ideal partner for the Office of the CFO."

Fourth Quarter 2023 Financial Highlights

  • Total GAAP revenues of $155.7 million, an increase of 11% compared to the fourth quarter of 2022.
  • GAAP operating margin of 8.2%, compared to 2.3% in the fourth quarter of 2022.
  • Non-GAAP operating margin of 24.8%, compared to 12.8% in the fourth quarter of 2022.
  • GAAP net income attributable to BlackLine of $22.1 million, or $0.32 per diluted share, compared to GAAP net income attributable to BlackLine of $11.3 million, or $0.18 per diluted share, in the fourth quarter of 2022.
  • Non-GAAP net income attributable to BlackLine of $51.5 million, or $0.69 per diluted share, compared to non-GAAP net income attributable to BlackLine of $25.5 million, or $0.35 per diluted share, in the fourth quarter of 2022.
  • Operating cash flow of $42.2 million, compared to $25.8 million in the fourth quarter of 2022.
  • Free cash flow of $35.3 million, compared to $20.3 million in the fourth quarter of 2022.

Full Year 2023 Financial Highlights

  • Total GAAP revenues of $590.0 million, an increase of 13% from 2022.
  • GAAP operating margin of 2.4%, compared to (10.7)% in 2022.
  • Non-GAAP operating margin of 16.5%, compared to 6.1% in 2022.
  • GAAP net income attributable to BlackLine of $52.8 million, or $0.81 per diluted share, compared to GAAP net loss attributable to BlackLine of $29.4 million, or $(0.49) per diluted share, in 2022.
  • Non-GAAP net income attributable to BlackLine of $145.2 million, or $1.96 per diluted share, compared to non-GAAP net income attributable to BlackLine of $46.2 million, or $0.64 per diluted share, in 2022.
  • Operating cash flow of $126.6 million, compared to $56.0 million from 2022.
  • Free cash flow of $99.0 million, compared to $25.7 million from 2022.

Fourth Quarter Key Metrics and Recent Business Highlights

  • Added 30 net new customers in the fourth quarter for a total of 4,398 customers at December 31, 2023.
  • Expanded the Company’s user base to 386,814 users at December 31, 2023.
  • Achieved a dollar-based net revenue retention rate of 106% at December 31, 2023.
  • Announced new Trade Management capabilities for Intercompany Financial Management.
  • Announced the hiring of a new Chief Marketing Officer and Chief Information Officer.

The financial results included in this press release are preliminary and subject to 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 2024

  • Total GAAP revenue is expected to be in the range of $154 million to $156 million.
  • Non-GAAP operating margin is expected to be in the range of 15% to 16%.
  • Non-GAAP net income attributable to BlackLine is expected to be in the range of $34 million to $36 million, or $0.45 to $0.48 per share, on 75.8 million diluted weighted average shares outstanding.

Full Year 2024

  • Total GAAP revenue is expected to be in the range of $637.5 million to $649.5 million.
  • Non-GAAP operating margin is expected to be in the range of 17% to 18%.
  • Non-GAAP net income attributable to BlackLine is expected to be in the range of $153 million to $163 million, or $2.01 to $2.14 per share, on 76.0 million diluted weighted average shares outstanding.

Guidance for non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) attributable to BlackLine, and non-GAAP net income (loss) attributable to BlackLine per share excludes specified items from the corresponding GAAP financial measures including the impact of the provision for (benefit from) income taxes related to acquisitions, amortization of acquired intangible assets, stock-based compensation, amortization of debt issuance costs, change in fair value of contingent consideration, transaction-related costs, and the adjustment to the redeemable non-controlling interest to the redemption amount as detailed in the reconciliations of non-GAAP measures for historical periods. Reconciliations of non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) attributable to BlackLine, and non-GAAP net income (loss) attributable to BlackLine per share guidance to the most directly comparable U.S. GAAP measures are not available on a forward-looking basis without unreasonable efforts due to the unpredictability and complexity of the charges excluded from these non-GAAP financial measures. The Company expects the variability of the above items could have a significant, and potentially unpredictable, impact on its future GAAP operating income (loss), operating margin, net income (loss) attributable to BlackLine, and net income (loss) attributable to BlackLine per share.

Quarterly Conference Call

BlackLine will hold a conference call to discuss its fourth quarter and full year 2023 results at 2:00 p.m. Pacific time on Tuesday, February 13, 2024. 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 (Nasdaq: BL) because their traditional manual accounting and finance processes are not sustainable. BlackLine’s market-leading cloud platform and 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, intercompany accounting, invoice-to-cash, and consolidation processes, inspiring, powering, and guiding large enterprises and midsize businesses on their digital finance transformation journeys.

More than 4,300 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 is recognized as the leader by customers at leading end-user review sites including G2 and TrustRadius. BlackLine is a global company with operations in major business centers 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 2024, the impact of progress against certain key initiatives, our expectations for our business, including the demand environment, BlackLine’s addressable market, market position and pipeline, our international growth, and 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 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 Company's ability to effectively incorporate artificial intelligence and machine learning technologies (AI/ML) into its platform and business and the potential reputational harm or legal liability that may result from the use of AI/ML solutions and features; 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; including competitors' ability to incorporate AI/ML into products and offerings more quickly or successfully; 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 and effectively manage its sales teams 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, 2023 filed with the Securities and Exchange Commission on November 3, 2023. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 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 February 13, 2024, 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 and non-GAAP operating margin, (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 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 profit and non-GAAP gross margin is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison 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 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 adjusted for amortization of intangible assets, stock-based compensation, 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 and Non-GAAP Operating Margin. Non-GAAP income (loss) from operations is defined as GAAP income (loss) from operations adjusted for amortization of intangible assets, stock-based compensation, change in fair value of contingent consideration, transaction-related costs, legal settlement gains or costs, impairment of cloud computing implementation costs and restructuring costs. Non-GAAP operating margin is defined as non-GAAP income from operations divided by GAAP revenues. The Company believes that presenting non-GAAP income (loss) from operations and non-GAAP operating margin 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 income (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, amortization of debt issuance costs from our convertible notes, change in fair value of contingent consideration, transaction-related costs, legal settlement gains or costs, impairment of cloud computing implementation costs, restructuring costs, and the adjustment to the redeemable non-controlling interest to the redemption amount. 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 to allow a direct comparison of net income (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 13, 2024 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, 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.
Consolidated Balance Sheets
(in thousands)
(unaudited)
 December 31,
2023
 December 31,
2022
ASSETS
Current assets:   
Cash and cash equivalents$271,117  $200,968 
Marketable securities 933,355   874,083 
Accounts receivable, net of allowances 171,608   150,858 
Prepaid expenses and other current assets 31,244   23,658 
Total current assets 1,407,324   1,249,567 
Capitalized software development costs, net 37,828   32,070 
Property and equipment, net 14,867   19,811 
Intangible assets, net 79,056   90,864 
Goodwill 448,965   443,861 
Operating lease right-of-use assets 19,173   14,708 
Other assets 93,552   92,775 
Total assets$2,100,765  $1,943,656 
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY
Current liabilities:   
Accounts payable$8,623  $14,964 
Accrued expenses and other current liabilities 59,690   58,600 
Deferred revenue, current 320,133   279,325 
Finance lease liabilities, current 778   989 
Operating lease liabilities, current 4,108   5,943 
Convertible senior notes, net, current 249,233    
Contingent consideration, current    8,000 
Total current liabilities 642,565   367,821 
Finance lease liabilities, noncurrent 4   785 
Operating lease liabilities, noncurrent 15,738   9,292 
Convertible senior notes, net, noncurrent 1,140,608   1,384,306 
Contingent consideration, noncurrent    33,549 
Deferred tax liabilities, net 6,394   5,568 
Deferred revenue, noncurrent 904   343 
Other long-term liabilities 3,608   6,229 
Total liabilities 1,809,821   1,807,893 
Commitments and contingencies   
Redeemable non-controlling interest 30,063   23,895 
Stockholders' equity:   
Common stock 615   600 
Additional paid-in capital 474,863   385,709 
Accumulated other comprehensive income (loss) 205   (1,472)
Accumulated deficit (214,802)  (272,969)
Total stockholders' equity 260,881   111,868 
Total liabilities, redeemable non-controlling interest, and stockholders' equity$2,100,765  $1,943,656 
    


BlackLine, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 Quarter Ended Year Ended
 December 31, December 31,
  2023   2022   2023   2022 
Revenues       
Subscription and support$147,155  $130,898  $555,516  $491,187 
Professional services 8,575   9,059   34,480   31,751 
Total revenues 155,730   139,957   589,996   522,938 
Cost of revenues       
Subscription and support 31,373   26,637   121,308   102,132 
Professional services 6,239   6,726   25,485   27,253 
Total cost of revenues 37,612   33,363   146,793   129,385 
Gross profit 118,118   106,594   443,203   393,553 
Operating expenses       
Sales and marketing 56,898   66,295   243,154   256,862 
Research and development 22,578   28,022   103,207   108,893 
General and administrative 24,676   5,158   71,530   80,155 
Restructuring costs 1,151   3,841   10,964   3,841 
Total operating expenses 105,303   103,316   428,855   449,751 
Income (loss) from operations 12,815   3,278   14,348   (56,198)
Other income (expense)       
Interest income 14,822   8,017   52,059   14,637 
Interest expense (1,484)  (1,464)  (5,898)  (5,850)
Other income, net 13,338   6,553   46,161   8,787 
Income (loss) before income taxes 26,153   9,831   60,509   (47,411)
Provision for (benefit from) income taxes 1,901   (668)  1,450   (13,520)
Net income (loss) 24,252   10,499   59,059   (33,891)
Net income (loss) attributable to redeemable non-controlling interest 293   99   892   (369)
Adjustment attributable to redeemable non-controlling interest 1,890   (904)  5,334   (4,131)
Net income (loss) attributable to BlackLine, Inc.$22,069  $11,304  $52,833  $(29,391)
Basic net income (loss) per share attributable to BlackLine, Inc.$0.36  $0.19  $0.87  $(0.49)
Shares used to calculate basic net income (loss) per share 61,391   59,888   60,849   59,539 
Diluted net income (loss) per share attributable to BlackLine, Inc.$0.32  $0.18  $0.81  $(0.49)
Shares used to calculate diluted net income (loss) per share 72,470   71,283   72,045   59,539 


BlackLine, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 Quarter Ended Year Ended
 December 31, December 31,
  2023   2022   2023   2022 
Cash flows from operating activities       
Net income (loss) attributable to BlackLine, Inc.$22,069  $11,304  $52,833  $(29,391)
Net income (loss) and adjustment attributable to redeemable non-controlling interest 2,183   (805)  6,226   (4,500)
Net income (loss) 24,252   10,499   59,059   (33,891)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:       
Depreciation and amortization 12,825   11,830   50,099   42,816 
Change in fair value of contingent consideration    (21,017)  (33,549)  (35,130)
Amortization of debt issuance costs 1,398   1,392   5,535   5,511 
Stock-based compensation 17,505   18,474   77,970   75,884 
Noncash lease expense 1,728   1,407   6,453   5,593 
Accretion of purchase discounts on marketable securities, net (8,885)  (5,548)  (33,884)  (8,874)
Net foreign currency (gains) losses (29)  (7)  853   (1,470)
Deferred income taxes 281   291   (1,525)  (14,404)
Provision for (benefit from) credit losses (1)  30   (18)  115 
Impairment of cloud computing implementation costs    5,330      5,330 
Changes in operating assets and liabilities, net of impact of acquisition:       
Accounts receivable (41,300)  (41,354)  (20,855)  (23,033)
Prepaid expenses and other current assets (4,449)  (1,180)  (6,599)  1,059 
Other assets (1,947)  (3,757)  (595)  (10,112)
Accounts payable 4,341   8,947   (5,104)  4,376 
Accrued expenses and other current liabilities (2,111)  6,505   (924)  5,893 
Deferred revenue 42,536   34,098   41,271   36,646 
Contingent consideration paid in excess of original estimates (2,393)     (2,393)   
Operating lease liabilities (1,936)  (1,620)  (7,171)  (6,949)
Lease incentive receipts    159   240   812 
Other long-term liabilities 354   1,275   (2,250)  5,841 
Net cash provided by operating activities 42,169   25,754   126,613   56,013 
Cash flows from investing activities       
Purchases of marketable securities (360,866)  (428,137)  (1,343,331)  (1,599,945)
Proceeds from maturities of marketable securities 363,521   416,500   1,319,821   1,392,250 
Capitalized software development costs (4,807)  (4,256)  (21,644)  (19,208)
Purchases of property and equipment (2,026)  (1,232)  (5,953)  (10,974)
Acquisition, net of cash acquired (9)     (11,376)  (157,738)
Net cash used in investing activities (4,187)  (17,125)  (62,483)  (395,615)
Cash flows from financing activities       
Principal payments under finance lease obligations (255)  (239)  (990)  (619)
Proceeds from exercises of stock options 775   1,018   19,762   4,687 
Proceeds from employee stock purchase plan 2,719   2,530   8,010   6,996 
Acquisition of common stock for tax withholding obligations (885)  (1,678)  (15,029)  (9,544)
Financed purchases of property and equipment          (84)
Payment of contingent consideration (5,607)     (5,607)   
Net cash provided by (used in) financing activities (3,253)  1,631   6,146   1,436 
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash 151   215   (120)  (618)
Net increase (decrease) in cash, cash equivalents, and restricted cash 34,880   10,475   70,156   (338,784)
Cash, cash equivalents, and restricted cash, beginning of period 236,483   190,732   201,207   539,991 
Cash, cash equivalents, and restricted cash, end of period$271,363  $201,207  $271,363  $201,207 
        
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets       
Cash and cash equivalents at end of period$271,117  $200,968  $271,117  $200,968 
Restricted cash included within other assets at end of period 246   239   246   239 
Total cash, cash equivalents, and restricted cash at end of period shown in the consolidated statements of cash flows$271,363  $201,207  $271,363  $201,207 


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,
   2023   2022   2023   2022 
Non-GAAP Gross Profit:        
Gross profit $118,118  $106,594  $443,203  $393,553 
Amortization of acquired developed technology  3,419   3,010   12,438   11,315 
Stock-based compensation(1)  3,121   2,286   12,440   8,595 
Transaction-related costs  132   357   478   1,355 
Total non-GAAP gross profit $124,790  $112,247  $468,559  $414,818 
Gross margin  75.8%  76.2%  75.1%  75.3%
Non-GAAP gross margin  80.1%  80.2%  79.4%  79.3%
         
Non-GAAP Operating Income:        
Operating income (loss) $12,815  $3,278  $14,348  $(56,198)
Amortization of intangible assets  5,249   5,181   20,608   19,731 
Stock-based compensation(1)  18,101   18,474   80,068   75,884 
Change in fair value of contingent consideration     (21,017)  (33,549)  (35,130)
Transaction-related costs  1,246   2,850   5,078   16,831 
Legal settlement costs           1,709 
Impairment of cloud computing implementation costs     5,330      5,330 
Restructuring costs  1,151   3,841   10,964   3,841 
Total non-GAAP operating income $38,562  $17,937  $97,517  $31,998 
GAAP operating margin  8.2%  2.3%  2.4%  (10.7%)
Non-GAAP operating margin  24.8%  12.8%  16.5%  6.1%
         
Non-GAAP Net Income Attributable to BlackLine, Inc.:        
Net income (loss) attributable to BlackLine, Inc. $22,069  $11,304  $52,833  $(29,391)
Provision for (benefit from) income taxes  526   (942)  (1,196)  (13,634)
Amortization of intangible assets  5,249   5,181   20,608   19,731 
Stock-based compensation(1)  17,981   18,417   79,588   75,576 
Amortization of debt issuance costs  1,398   1,392   5,535   5,511 
Change in fair value of contingent consideration     (21,017)  (33,549)  (35,130)
Transaction-related costs  1,246   2,850   5,078   16,831 
Legal settlement costs           1,709 
Impairment of cloud computing implementation costs     5,330      5,330 
Restructuring costs  1,151   3,841   10,964   3,841 
Adjustment to redeemable non-controlling interest  1,890   (904)  5,334   (4,131)
Total non-GAAP net income attributable to BlackLine, Inc. $51,510  $25,452  $145,195  $46,243 
Basic non-GAAP net income attributable to BlackLine, Inc. per share:        
Basic non-GAAP net income attributable to BlackLine, Inc. per share $0.84  $0.42  $2.39  $0.78 
Shares used to calculate basic non-GAAP net income per share  61,391   59,888   60,849   59,539 
Diluted non-GAAP net income attributable to BlackLine, Inc.        
Diluted non-GAAP net income attributable to BlackLine, Inc. per share $0.69  $0.35  $1.96  $0.64 
Shares used to calculate diluted non-GAAP net income per share  74,603   73,277   74,382   72,974 
         
(1) Beginning in 2023, includes amortization related to stock-based compensation that was capitalized in capitalized software development costs in previous periods and totaled $0.6 million and $2.1 million for the quarter and year ended December 31, 2023, respectively.
  Quarter Ended Year Ended
  December 31, December 31,
   2023   2022   2023   2022 
Non-GAAP Sales and Marketing Expense:        
Sales and marketing expense $56,898  $66,295  $243,154  $256,862 
Amortization of intangible assets  (1,751)  (1,693)  (6,791)  (6,505)
Stock-based compensation  (5,364)  (5,691)  (24,152)  (26,310)
Transaction-related costs  (110)  (240)  (397)  (2,399)
Impairment of cloud computing implementation costs     (3,361)     (3,361)
Total non-GAAP sales and marketing expense $49,673  $55,310  $211,814  $218,287 
         
Non-GAAP Research and Development Expense:        
Research and development expense $22,578  $28,022  $103,207  $108,893 
Stock-based compensation  (1,813)  (3,828)  (13,095)  (14,382)
Transaction-related costs  (833)  (2,079)  (2,857)  (7,797)
Total non-GAAP research and development expense $19,932  $22,115  $87,255  $86,714 
         
Non-GAAP General and Administrative Expense:        
General and administrative expense $24,676  $5,158  $71,530  $80,155 
Amortization of intangible assets  (79)  (478)  (1,379)  (1,911)
Stock-based compensation  (7,803)  (6,669)  (30,381)  (26,597)
Change in fair value of contingent consideration     21,017   33,549   35,130 
Transaction-related costs  (171)  (174)  (1,346)  (5,280)
Legal settlement costs           (1,709)
Impairment of cloud computing implementation costs     (1,969)     (1,969)
Total non-GAAP general and administrative expense $16,623  $16,885  $71,973  $77,819 
         
Total Non-GAAP Operating Expenses $86,228  $94,310  $371,042  $382,820 
         
Free Cash Flow        
Net cash provided by operating activities $42,169  $25,754  $126,613  $56,013 
Capitalized software development costs  (4,807)  (4,256)  (21,644)  (19,208)
Purchases of property and equipment  (2,026)  (1,232)  (5,953)  (10,974)
Financed purchases of property and equipment           (84)
Free cash flow $35,336  $20,266  $99,016  $25,747