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 solutions; 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, 2025 filed with the Securities and Exchange Commission on November 7, 2025. BlackLine, Inc. Consolidated Statements of Cash Flows (in thousands) (unaudited) Quarter Ended Year Ended December 31, December 31, 2025 2024 2025 2024 Cash flows from operating activities Net income attributable to BlackLine, Inc. $ 4,886 $ 56,417 $ 24,518 $ 161,174 Net income and adjustment attributable to redeemable non-controlling interest 1,095 7,050 2,739 6,591 Net income 5,981 63,467 27,257 167,765 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,912 12,120 46,535 50,345 Amortization of debt issuance costs 859 849 3,394 4,486 Stock-based compensation 25,965 19,340 92,590 83,251 Gain on extinguishment of convertible senior notes — — — (65,112 ) Noncash lease expense 1,840 1,611 5,923 6,221 Accretion of purchase discounts on marketable securities, net (3,186 ) (326 ) (11,690 ) (18,441 ) Net foreign currency (gains) losses (148 ) (81 ) 605 279 Deferred income taxes 6,289 (53,323 ) 15,047 (54,802 ) Provision for credit losses 6 70 107 84 Changes in operating assets and liabilities, net of impact of acquisition: Accounts receivable (62,245 ) (43,317 ) (38,159 ) (7,552 ) Prepaid expenses and other current assets (4,657 ) (1,609 ) (251 ) 2,742 Other assets (2,437 ) 298 (3,663 ) 2,505 Accounts payable 4,124 4,333 5,346 (1,123 ) Accrued expenses and other current liabilities 64 3,968 3,209 7,087 Deferred revenue 43,563 37,819 29,236 18,968 Operating lease liabilities (1,280 ) (1,563 ) (5,872 ) (5,963 ) Lease incentive receipts — — 30 — Other long-term liabilities 30 138 (77 ) 96 Net cash provided by operating activities 26,680 43,794 169,567 190,836 Cash flows from investing activities Purchases of marketable securities (140,030 ) — (747,644 ) (396,104 ) Proceeds from maturities of marketable securities 141,000 121,289 373,000 1,023,286 Proceeds from sales of marketable securities 200 — 200 324,098 Capitalized software development costs (6,177 ) (6,513 ) (26,597 ) (24,714 ) Purchases of property and equipment (623 ) (756 ) (8,074 ) (2,126 ) Acquisition, net of cash acquired (16,174 ) — (16,174 ) — Net cash provided by (used in) investing activities (21,804 ) 114,020 (425,289 ) 924,440 Cash flows from financing activities Proceeds from issuance of convertible senior notes, net of issuance costs — — — 661,979 Partial repurchase of convertible senior notes — — — (848,519 ) Repayment of convertible senior notes — — — (250,000 ) Purchase of capped calls related to convertible senior notes — — — (59,738 ) Principal payments under finance lease obligations (3 ) (228 ) (66 ) (999 ) Repurchases of common stock (34,816 ) — (235,543 ) — Proceeds from exercises of stock options 64 4,553 5,215 7,591 Proceeds from employee stock purchase plan 2,581 2,757 7,173 7,006 Acquisition of common stock for tax withholding obligations (2,027 ) (3,861 ) (16,892 ) (17,465 ) Net cash provided by (used in) financing activities (34,201 ) 3,221 (240,113 ) (500,145 ) Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash (355 ) (403 ) (92 ) (347 ) Net increase (decrease) in cash, cash equivalents, and restricted cash (29,680 ) 160,632 (495,927 ) 614,784 Cash, cash equivalents, and restricted cash, beginning of period 419,900 725,515 886,147 271,363 Cash, cash equivalents, and restricted cash, end of period $ 390,220 $ 886,147 $ 390,220 $ 886,147 Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets: Cash and cash equivalents at end of period $ 390,034 $ 885,915 $ 390,034 $ 885,915 Restricted cash included within prepaid expenses and other current assets at end of period 186 — 186 — Restricted cash included within other assets at end of period — 232 — 232 Total cash, cash equivalents, and restricted cash at end of period shown in the consolidated statements of cash flows $ 390,220 $ 886,147 $ 390,220 $ 886,147 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, 2025 2024 2025 2024 Non-GAAP Gross Profit: Gross profit $ 137,731 $ 128,046 $ 527,042 $ 491,371 Amortization of acquired developed technology 3,282 3,243 12,905 13,370 Stock-based compensation 4,669 3,561 17,232 13,347 Transaction-related costs — 25 8 151 Total non-GAAP gross profit $ 145,682 $ 134,875 $ 557,187 $ 518,239 Gross margin 75.2 % 75.6 % 75.2 % 75.2 % Non-GAAP gross margin 79.5 % 79.6 % 79.5 % 79.3 % Non-GAAP Operating Income: Operating income $ 6,823 $ 6,217 $ 25,552 $ 18,536 Amortization of intangible assets 3,545 4,305 14,168 19,886 Stock-based compensation 26,982 20,138 96,325 86,097 Transaction-related costs 1,642 — 4,780 568 Restructuring and legal settlement costs 6,192 (8 ) 15,454 1,720 Total non-GAAP operating income $ 45,184 $ 30,652 $ 156,279 $ 126,807 GAAP operating margin 3.7 % 3.7 % 3.6 % 2.8 % Non-GAAP operating margin 24.7 % 18.1 % 22.3 % 19.4 % Non-GAAP Net Income Attributable to BlackLine, Inc.: Net income attributable to BlackLine, Inc. $ 4,886 $ 56,417 $ 24,518 $ 161,174 Provision for (benefit from) income taxes 516 (53,351 ) (782 ) (50,948 ) Amortization of intangible assets 3,545 4,305 14,168 19,886 Stock-based compensation 26,864 20,044 95,850 85,654 Amortization of debt issuance costs 859 849 3,394 4,486 Transaction-related costs 1,642 — 4,780 568 Restructuring and legal settlement costs 6,192 (8 ) 15,454 1,720 Adjustment to redeemable non-controlling interest 715 6,380 (347 ) 4,639 Gain on extinguishment of convertible senior notes — — — (65,112 ) Total non-GAAP net income attributable to BlackLine, Inc. $ 45,219 $ 34,636 $ 157,035 $ 162,067 Basic Non-GAAP Net Income Per Share Attributable to BlackLine, Inc.: Basic non-GAAP net income per share attributable to BlackLine, Inc. $ 0.76 $ 0.55 $ 2.56 $ 2.61 Shares used to calculate basic non-GAAP net income per share 59,635 62,640 61,430 62,129 Diluted Non-GAAP Net Income Per Share Attributable to BlackLine, Inc. Numerator: Non-GAAP net income attributable to BlackLine, Inc. $ 45,219 $ 34,636 $ 157,035 $ 162,067 Interest expense, net of taxes 1,529 1,539 5,933 3,909 Non-GAAP net income attributable to BlackLine, Inc. for diluted calculation $ 46,748 $ 36,175 $ 162,968 $ 165,976 Denominator: Weighted average shares 59,635 62,640 61,430 62,129 Dilutive effect of securities 4,171 3,441 3,908 3,312 Dilutive effect of convertible senior notes 10,987 11,243 11,178 10,683 Shares used to calculate diluted non-GAAP net income per share 74,793 77,324 76,516 76,124 Diluted non-GAAP net income per share attributable to BlackLine, Inc. $ 0.63 $ 0.47 $ 2.13 $ 2.18 Non-GAAP Sales and Marketing Expense: Sales and marketing expense $ 63,662 $ 64,769 $ 258,930 $ 248,347 Amortization of intangible assets (184 ) (983 ) (948 ) (6,201 ) Stock-based compensation (7,243 ) (6,260 ) (27,238 ) (25,428 ) Transaction-related costs — (136 ) (10 ) (320 ) Total non-GAAP sales and marketing expense $ 56,235 $ 57,390 $ 230,734 $ 216,398 Non-GAAP Research and Development Expense: Research and development expense $ 28,182 $ 24,588 $ 109,202 $ 100,973 Stock-based compensation (4,637 ) (3,390 ) (16,633 ) (13,345 ) Transaction-related costs — 170 (21 ) (46 ) Total non-GAAP research and development expense $ 23,545 $ 21,368 $ 92,548 $ 87,582 Non-GAAP General and Administrative Expense: General and administrative expense $ 33,048 $ 32,480 $ 118,732 $ 121,795 Amortization of intangible assets (79 ) (79 ) (315 ) (315 ) Stock-based compensation (10,433 ) (6,927 ) (35,222 ) (33,977 ) Transaction-related costs (1,642 ) (9 ) (4,741 ) (51 ) Restructuring and legal settlement costs (176 ) — (828 ) — Total non-GAAP general and administrative expense $ 20,718 $ 25,465 $ 77,626 $ 87,452 Total Non-GAAP Operating Expenses $ 100,498 $ 104,223 $ 400,908 $ 391,432 Free Cash Flow Net cash provided by operating activities $ 26,680 $ 43,794 $ 169,567 $ 190,836 Capitalized software development costs (6,177 ) (6,513 ) (26,597 ) (24,714 ) Purchases of property and equipment (623 ) (756 ) (8,074 ) (2,126 ) Free cash flow $ 19,880 $ 36,525 $ 134,896 $ 163,996
Author: BlackLine, Inc.
Published at: 2026-02-10 21:05:00
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