Financial Performance - Total GAAP revenues for Q3 2025 were $178.3 million, a 7.5% increase compared to Q3 2024[6] - GAAP net income attributable to BlackLine was $5.3 million, or $0.09 per diluted share, down from $17.2 million, or $0.27 per diluted share in Q3 2024[6] - Non-GAAP net income attributable to BlackLine was $37.6 million, or $0.51 per diluted share, compared to $44.4 million, or $0.60 per diluted share in Q3 2024[6] - Net income for Q3 2025 was $8.61 million, compared to $14.57 million in Q3 2024, showing a decrease of 41%[32] - Basic net income per share attributable to BlackLine, Inc. for Q3 2025 was $0.09, down from $0.28 in Q3 2024[32] - Net income attributable to BlackLine, Inc. for Q3 2025 was $5,285, compared to $17,238 in Q3 2024, reflecting a decrease of 69%[35] Revenue and Growth Metrics - Billings reached $161.6 million, a 4.4% increase compared to Q3 2024, impacted by a higher mix of customers on quarterly billings[6] - Remaining performance obligation was $964.1 million, reflecting a 12.4% increase compared to Q3 2024[6] - Subscription and support revenue for Q3 2025 was $168.21 million, up from $157.01 million in Q3 2024, reflecting a growth of 7.7%[31] - The company achieved a dollar-based net revenue retention rate of 103% as of September 30, 2025[6] - Total revenues for Q3 2025 reached $178.29 million, an increase of 7% compared to $165.91 million in Q3 2024[31] Cash Flow and Assets - Operating cash flow was $63.8 million, up from $55.9 million in Q3 2024[6] - Free cash flow increased to $57.0 million, compared to $49.4 million in Q3 2024[6] - Total current assets decreased to $983.82 million as of September 30, 2025, from $1.09 billion at the end of 2024[28] - Cash and cash equivalents decreased to $419.90 million as of September 30, 2025, from $885.92 million at the end of 2024[28] - Total cash provided by operating activities for the nine months ended September 30, 2025, was $142,887, compared to $147,042 for the same period in 2024, a decrease of 2.3%[35] - Cash, cash equivalents, and restricted cash at the end of Q3 2025 totaled $419,900, down from $725,515 at the end of Q3 2024, a decline of 42.2%[36] Expenses and Liabilities - Operating expenses for Q3 2025 totaled $126.29 million, an increase from $116.44 million in Q3 2024[31] - Total liabilities as of September 30, 2025, were $1.34 billion, slightly down from $1.34 billion at the end of 2024[29] - Stock-based compensation for the nine months ended September 30, 2025, was $66,625, compared to $63,911 for the same period in 2024, an increase of 4.0%[35] - General and administrative expense was $85,684 million, down from $89,315 million, indicating a decrease of 4.0%[40] Operational Metrics - BlackLine had 4,424 customers and 385,336 users as of September 30, 2025, indicating continued customer migrations to the platform pricing model[6] - The number of customers as of September 30, 2025, is a critical indicator of market penetration and business growth[25] Non-GAAP Metrics - Non-GAAP gross profit for Q3 2025 was $141,526, up from $131,736 in Q3 2024, representing an increase of 7.0%[38] - Non-GAAP gross margin for Q3 2025 was 79.4%, consistent with Q3 2024[38] - Total non-GAAP operating income increased to $111,095 million, up from $96,155 million year-over-year, reflecting a growth of 15.5%[39] - Non-GAAP operating margin was 21.5%, compared to 19.9% in the previous year, indicating an improvement of 1.6 percentage points[39] - Basic non-GAAP net income per share attributable to BlackLine, Inc. was $1.80, down from $2.06, a decrease of 12.6%[39] Future Guidance - Full year 2025 guidance includes total GAAP revenue expected in the range of $699 million to $701 million[12]

Core Insights - BlackLine, Inc. reported strong financial results for the third quarter of 2025, highlighting increased revenue growth, solid margins, and robust free cash flow, indicating effective execution of strategic changes [2][6]. Financial Performance - Total GAAP revenues reached $178.3 million, marking a 7.5% increase compared to the third quarter of 2024 [6]. - GAAP operating margin was 4.3%, down from 5.0% in the same quarter last year [6]. - Non-GAAP operating margin was 21.4%, compared to 22.7% in the third quarter of 2024, primarily affected by the timing of the BeyondTheBlack customer event [6]. - GAAP net income attributable to BlackLine was $5.3 million, or $0.09 per diluted share, a decrease from $17.2 million, or $0.27 per diluted share, in the third quarter of 2024 [6]. - Non-GAAP net income attributable to BlackLine was $37.6 million, or $0.51 per diluted share, down from $44.4 million, or $0.60 per diluted share, in the same quarter last year [6]. - Billings totaled $161.6 million, a 4.4% increase year-over-year, influenced by a higher mix of customers on quarterly billings [6]. - Remaining performance obligation increased by 12.4% to $964.1 million compared to the third quarter of 2024 [6]. - Operating cash flow was $63.8 million, up from $55.9 million in the third quarter of 2024 [6]. - Free cash flow reached $57.0 million, compared to $49.4 million in the same period last year [6]. Customer Metrics - BlackLine had a total of 4,424 customers as of September 30, 2025 [6]. - The number of users reached 385,336, reflecting ongoing customer migrations to the platform pricing model [6]. - The dollar-based net revenue retention rate was 103%, including a one-point headwind from foreign exchange [6]. Product and Innovation - The company launched Verity, an AI-powered solution tailored for the Office of the CFO [6]. - BlackLine achieved ISO 42001 certification for its AI management system [6]. - The company received an Exemplary rating in the ISG Buyer's Guides for Record to Report, Financial Close & Financial Consolidation [6]. - BlackLine was awarded the SAP Global Finance and Spend Management Partner Excellence Award for 2025 [6]. Financial Outlook - For the fourth quarter of 2025, total GAAP revenue is expected to be between $182 million and $184 million [7]. - Non-GAAP operating margin is projected to be in the range of 24.0% to 25.0% [7]. - Non-GAAP net income attributable to BlackLine is anticipated to be between $42 million and $44 million, or $0.58 to $0.61 per share [7]. Summary of Financial Position - As of September 30, 2025, total assets were $1.703 billion, down from $1.825 billion at the end of 2024 [28]. - Total liabilities were $1.337 billion, slightly decreased from $1.342 billion at the end of 2024 [29]. - Stockholders' equity was $328.3 million, down from $446.7 million at the end of 2024 [29].

Core Viewpoint - The market anticipates BlackLine (BL) will report a year-over-year decline in earnings despite an increase in revenues for the quarter ending September 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - BlackLine is expected to post quarterly earnings of $0.51 per share, reflecting a year-over-year decrease of 15% [3]. - Revenue projections stand at $178.01 million, indicating a 7.3% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the past 30 days, suggesting stability in analyst expectations [4]. - The Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, indicating no recent differing analyst views [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, but its predictive power is stronger for positive readings [9][10]. - BlackLine's current Zacks Rank is 3, making it challenging to predict an earnings beat conclusively [12]. Historical Performance - In the last reported quarter, BlackLine exceeded the expected earnings of $0.50 per share, achieving $0.51, resulting in a surprise of +2.00% [13]. - Over the past four quarters, BlackLine has surpassed consensus EPS estimates three times [14]. Market Sentiment - An earnings beat or miss alone may not dictate stock price movement, as other factors can influence investor sentiment [15]. - While BlackLine does not appear to be a strong candidate for an earnings beat, other considerations should be evaluated before making investment decisions [17].

Core Viewpoint - Engaged Capital urges BlackLine, Inc. to explore strategic alternatives, particularly in light of renewed acquisition interest from SAP SE, believing that a sale would be the best outcome for stockholders due to BlackLine's inability to generate sustainable value in the public market [1][5]. Summary by Sections Engagement with BlackLine - Engaged Capital is a significant stockholder of BlackLine and has faced challenges in meaningful engagement with the company's management, which has been unresponsive and difficult to schedule meetings with [2][3]. - Despite these challenges, Engaged Capital continues to hold shares, believing in BlackLine's strategic value, which has been trading at a substantial discount to its fair value [2][3]. Acquisition Interest - Reports indicate that SAP SE made a formal offer to acquire BlackLine earlier this year, which was rejected by BlackLine's Board of Directors [3]. - Engaged Capital expresses disappointment over the rejection, especially given BlackLine's poor performance in creating stockholder value and its underperformance compared to relevant software indices [3][4]. Stock Performance - BlackLine's total stockholder return has been negative over various time frames: -8% over 1 year, 0% over 3 years, and -47% over 5 years, contrasting sharply with the positive returns of the IGV Software Index and S&P Software & Services Select Industry Index [4][5]. - The company has significantly underperformed relative to these indices, with a relative performance of -35% over 1 year against the IGV Software Index [4]. Call to Action - Engaged Capital calls for the Board to act urgently and engage financial advisors to run a strategic alternatives process to maximize stockholder value [5]. - The firm emphasizes that the Board's fiduciary duties are to all stockholders, not just management, and expresses readiness to hold the Board accountable if necessary [6].

Core Viewpoint - SAP, Europe's largest software supplier, proposed a nearly $4.5 billion acquisition of accounting software company BlackLine in June, which was rejected, and is now considering whether to pursue the acquisition again [1] Group 1: Acquisition Details - SAP is collaborating with JPMorgan on the potential acquisition of BlackLine [1] - The initial offer for BlackLine was approximately $4.5 billion [1] Group 2: Shareholder Information - Clearlake Capital holds nearly 9% of BlackLine's shares and will have a say in any potential sale [1] - Vanguard Group and BlackRock are also significant shareholders in BlackLine [1]

Group 1: European AI Infrastructure Investment - Nvidia (NVDA) and Deutsche Telekom (DTE) are investing €1 billion in a new data center in Munich, Germany, aimed at enhancing Europe's AI infrastructure [2][7] - The project will deploy approximately 10,000 GPUs, reflecting Europe's efforts to close the AI infrastructure gap with the United States [2][7] - SAP SE (SAP) is expected to be a primary customer of the new facility, indicating a rising demand for advanced AI computing power across various industries [2][7] Group 2: SAP's Acquisition Attempt - SAP SE (SAP) made a takeover offer for BlackLine Inc. (BL) earlier this year, valuing the company in the high $60s per share, but the offer was rejected [3][7] - The proposed acquisition indicates SAP's strategic interest in expanding its portfolio of CFO-focused software solutions [3][7] - BlackLine's stock reacted positively to the news of the takeover interest, despite the rejection [3][7] Group 3: Oil Market Dynamics - Oil prices have stabilized near $61, with market focus shifting from U.S.-China trade talks to the implications of recent U.S. sanctions on Russian oil producers [4][7] - The International Energy Agency (IEA) projects that oil prices will likely moderate in the coming weeks due to an anticipated surplus in global oil supply [4][7] - Sanctions on major Russian oil producers, Rosneft and Lukoil, have influenced market dynamics, although profit-taking and oversupply concerns have limited price gains [4][7] Group 4: Russia and Venezuela Strategic Partnership - Russia and Venezuela have established a strategic partnership to enhance cooperation in energy, mining, transport, and security sectors [5][7] - The agreement emphasizes mutual opposition to external pressures and aims to ensure international stability [5][7]

Core Viewpoint - SAP, Europe's largest software provider, attempted to acquire BlackLine, an accounting software firm, for nearly $4.5 billion in June but was rejected and is now contemplating a renewed pursuit of the company [1] Company Summary - SAP's initial offer to acquire BlackLine was approximately $4.5 billion [1] - The acquisition attempt was rebuffed, indicating potential challenges in the negotiation process [1] - SAP is considering whether to pursue BlackLine again, suggesting ongoing interest in expanding its software portfolio [1]

Core Viewpoint - SAP, Europe's largest software provider, attempted to acquire BlackLine for nearly $4.5 billion but was rejected, and is now considering a new approach to negotiations [1][2][3] Group 1: Acquisition Details - SAP made a formal offer of $66 per share on June 18, representing a 31% premium over BlackLine's 60-day average price of $50.50 [2] - The acquisition would not require outside financing, indicating SAP's financial capability to close the deal independently [2] - BlackLine's major shareholders, including Clearlake Capital, Vanguard Group, and BlackRock, may influence the outcome of any potential sale [2][4] Group 2: Market Reaction - Following the news of SAP's initial offer, BlackLine's shares rose as much as 12% on the Nasdaq before closing 3.8% higher [4] - Analysts suggest that a revised offer in the "low to mid 70s" per share could increase the likelihood of acceptance from BlackLine [4] Group 3: Strategic Fit - Acquiring BlackLine could assist SAP in enhancing the adoption of its HANA cloud platform by simplifying customer data migration processes [5] - BlackLine's cloud-based software automates and manages complex financial and accounting processes, modernizing tasks traditionally performed on spreadsheets [6]

Group 1 - BlackLine Inc. (NASDAQ:BL) experienced a 10% increase in stock price following reports of an acquisition offer from SAP in the high $60s per share earlier this year [4] - BlackLine rejected the acquisition offer from SAP and is currently not engaged in any active discussions with potential buyers [4]

Group 1 - BlackLine, Inc. will release its financial results for Q3 2025 on November 6, 2025, after market close, followed by a conference call at 2:00 p.m. PT / 5:00 p.m. ET [1] - A live webcast and replay of the conference call will be 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 positioned as a future-ready platform for the Office of the CFO, focusing on digital finance transformation [2] - The company utilizes the Studio360 platform to unify data, streamline processes, and provide real-time insights through automation and AI capabilities [2] - BlackLine has over 4,400 customers across various industries, indicating a strong market presence and collaborative approach [3]