Blackline, Inc. · NASDAQ:BL
Blackline — Investor Presentation (April 2020)
38 slides from Blackline's investor presentation, Apr 30, 2020
Slide 1: BlackLine Investor Presentation
BlackLine Investor Presentation As of April 30, 2020
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements. These statements may relate to, but are not limited to, expectations of future operating results or financial performance of BlackLine, Inc. (“BlackLine” or the “Company”), the calculation of certain key financial and operating metri
Slide 3: BlackLine Highlights
BlackLine Highlights SaaS-Based Platform Large & Growing $18.5B The Industry Recognized Strong Competitive 29% Topline Revenue Monetizing Accounting Estimated TAM1 with Leader in Financial Close Moat Across Broad Growth with 110% Dollar- & Finance Multiple Financial Close Solutions2 Customer Base Ba
Slide 4: Our Vision
Our Vision To Lead Finance & Accounting Operations Worldwide Through Strategic Finance Transformation 4
Slide 5: Finance Leaders Have Long Been Overwhelmed
Finance Leaders Have Long Been Overwhelmed 81% 51% 1/3 81% of organizations believe their 51% of finance leaders feel increased 1/3 of accounting teams finance function is not operating at a operational responsibilities are spend a majority of their time on level necessary to transform into a stretc
Slide 6: The Financial Close is Chaos. On a Deadline.
The Financial Close is Chaos. On a Deadline. Controller CFO Finance Tax Marketing Statement of Cash Flows External Audit Sales Internal Audit SEC Reporting Income Statement CEO Accounts Receivable Investors People Accounts Payable Equity Balance Sheet Multiple ERPs Reporting Source Systems HRIS Phon
Slide 7: …And It’s Becoming Increasingly Challenging
…And It’s Becoming Increasingly Challenging Rising Business Global Regulatory Exponentially Growing Expectation of Accuracy Complexity Landscape Data Volume & Real-Time Data Virtual Close & Distributed Workforces SOX Compliance Unstructured Information Automation M&A COSO Framework System Interopera
Slide 8: BlackLine Transforms the Financial Close
BlackLine Transforms the Financial Close A solid foundation to navigate future uncertainty Control Transparency Efficiency Confidence Accountability, Accuracy, Governance Visibility & Clarity Quantifiable ROI Confident Financials Efficient, Clean Audits Real-Time Access Automation Agile Decision-Mak
Slide 9: BlackLine’s Accounting Platform Enables Strategic Finance
BlackLine’s Accounting Platform Enables Strategic Finance Account Transaction Task Reconciliation Matching Management Compliance Accurate and effective account Match and reconcile millions of Visibility and control for any Elevated Control reconciliation process transactions in minutes accounting ch
Slide 10: Large & Underpenetrated Addressable Market
Large & Underpenetrated Addressable Market 10 1Source: Frost and Sullivan/2018 TAM for Core Products 2As of March 31, 2020
Slide 11: Our Go To Market & Customer Strategy
Our Go To Market & Customer Strategy ENTERPRISE MID-MARKET ACCOUNT EXPANSION >$750M ANNUAL REVENUE $50M-750M ANNUAL REVENUE ~1 YEAR AFTER INITIAL SALE BlackLine Direct Sales BlackLine Account Management Global Sales SAP Reseller through SolEx Deployment Partner Ecosystem (Channel, SIs, BPOs, ERP, Co
Slide 12: Strength Across Geographies, Sectors & Sizes
Strength Across Geographies, Sectors & Sizes CONSUMER AND RETAIL TECHNOLOGY INDUSTRIAL AND ENERGY HEALTHCARE SERVICES FINANCIAL SERVICES 12
Slide 13: Competitive Landscape
Competitive Landscape THE COMPETITION Status Quo VS Point Solutions & Market Pioneer Deep Account Domain Knowledge ERPs SaaS-Based Platform ERP Agnostic FCCS & ARCS Highly Scalable & Configurable OTHER ERP NO CORE VENDORS OFFERING 13
Slide 14: ERPs Provide A Lot of Functionality
ERPs Provide A Lot of Functionality Corporate Order/Revenue Performance Management Management Customer Budget & Service Planning PROCUREMENT CONSOLIDATION Human ERP Expense Resources Management FINANCIAL BUSINESS REPORTING INTELLIGENCE Finance Controls & Payroll Automation Treasury 14
Slide 15: “Best of Breed” Provides Superior Solutions
“Best of Breed” Provides Superior Solutions Corporate Order/Revenue Performance Management Management Customer Budget & Service Planning PROCUREMENT CONSOLIDATION Human ERP Expense Resources Management FINANCIAL BUSINESS REPORTING INTELLIGENCE Finance Controls & Payroll Automation Treasury 15
Slide 16: BlackLine is a Recognized Industry Leader
BlackLine is a Recognized Industry Leader Magic Quadrant for Cloud Financial Close Solutions Recognized as a Leader Recognized as a Leader in a Gartner Magic Quadrant in a Gartner Magic Quadrant 4 Years in a Row 4 Years in a Row ABILITY TO EXECUTE As of October 21, 2019 Magic Quadrant for Cloud Fina
Slide 17: Strong & Passionate Management Team
Strong & Passionate Management Team Therese Tucker Mark Partin Marc Huffman Founder and Chief Chief Financial Officer President & Chief Executive Officer Operating Officer Pete Hirsch Tammy Coley Karen Flathers Chief Technology Officer Chief Transformation Chief Customer Officer Officer Max Solonski
Slide 18: Driving Sustainable Revenue Growth
Driving Sustainable Revenue Growth 18
Slide 19: Growth Levers
Growth Levers 1 2 3 4 5 Strategic Partner SAP Customer Partner International to CFO SolEx Expansion Ecosystem Expansion Deliver customer success Invest in joint enablement Drive adoption of new Extend and strengthen Grow existing footprint by leading our customers to drive alignment across solutions
Slide 20: Strategic Partner to the CFO
Strategic Partner to the CFO Our goal is to be a strategic partner who leads our customers on their financial transformation journeys Integrated into Business Process STRATEGIC Ideas on How to Improve COLLABORATIVE Best Product PREFERRED Reasonably Priced TRANSACTIONAL 20
Slide 21: BlackLine’s SAP TAM with SolEx
BlackLine’s SAP TAM with SolEx ~3,000 EMEA ~1,300 North America ~700 APJ ~9,000 ~4,000 SAP Customers > $1B Rest of World No Direct BL Presence 21
Slide 22: BlackLine Use Case for SAP Cloud Transition
BlackLine Use Case for SAP Cloud Transition Clear benefits to adding BlackLine before or during transition to S/4 HANA Enables a More Successful S/4HANA Upgrade • Clear open items (in SAP OIM) to prevent a technical • Automate manual tasks to enable FTEs to focus on failure on upgrade S/4HANA initia
Slide 23: Customer Expansion in Action
Customer Expansion in Action Mid-Market Customer Enterprise Customer Financial Services Company Current ACV of ~$130K Global Industrials Company Current ACV of ~$800K 140 $140,000 900 $900,000 800 $800,000 120 $120,000 700 $700,000 100 $100,000 600 $600,000 USERS USERS 80 $80,000 500 $500,000 60 $60
Slide 24: Strategic Product Installed Base Opportunity
Strategic Product Installed Base Opportunity TRANSACTION SMART INTERCOMPANY MATCHING CLOSE HUB Customers who are target candidates to add 2,800+ ~800 1,600+ Portion of this opportunity currently captured 21% 4% 1% As of September 2019 Investor Day. Data based on the number of customers who have purc
Slide 25: Partner Ecosystem
Partner Ecosystem RESELLER PARTNERS GLOBAL ALLIANCES REGIONAL PARTNERS SOLUTION PARTNERS BPO PARTNERS 25 Represents a sample of BlackLine’s partner ecosystem.
Slide 26: Continued International Expansion
Continued International Expansion Looking Ahead North America Los Angeles New York Vancouver Chicago Dallas EMEA London Paris Frankfurt Netherlands South Africa Sweden Switzerland APJ Sydney FOCUS: Melbourne • Continue to penetrate existing markets Singapore • Add distribution to top markets by Hong
Slide 27: Key Metrics & Financials
Key Metrics & Financials 27
Slide 28: Financial Highlights
Financial Highlights 29% Q1’20 Revenue Growth1 110% Q1’20 Dollar-Based Net Revenue Retention Rate 82% Q1’20 Non-GAAP Gross Margin 5% Q1’20 Non-GAAP Operating Margin High Growth Compelling High Gross Demonstrated Subscription Model Expansion Model Margins Operating Leverage Strong secular tailwinds,
Slide 29: Highly Visible Subscription Growth Model
Highly Visible Subscription Growth Model Total Revenue Subscription & Support Revenue $307 $288 $M $M $272 $289 28% 25% Y/Y Y/Y $217 Growth Growth $167 $118 $228 2016 2017 2018 2019 LTM 1Q20 $176 Services Revenue $19 $M $17 82% Y/Y Growth $124 $10 $9 $6 2016 2017 2018 2019 LTM 1Q20 2016 2017 2018 20
Slide 30: Consistent Customer and User Growth
Consistent Customer and User Growth Customers Users ‘000s 3,056 268 272 3,024 2,631 223 197 2,208 167 1,758 2016 2017 2018 2019 Q1'20 2016 2017 2018 2019 Q1'20 30
Slide 31: Strong Renewal Rate Driving Overall Retention Rate
Strong Renewal Rate Driving Overall Retention Rate Dollar-Based Revenue Renewal Rate Dollar-Based Net Revenue Retention Rate 116% 112% 110% 110% 108% 98% 97% 97% 98% 97% 2016 2017 2018 2019 Q1'20 2016 2017 2018 2019 Q1'20 Dollar-based revenue renewal rate for each period is calculated by dividing (a
Slide 32: High Gross Margins and Expanding Operating Leverage
High Gross Margins and Expanding Operating Leverage Non-GAAP Gross Margin Non-GAAP Operating Expenses as % of Revenue 91% 85% 87% 87% 84% 84% 17% 80% 80% 77% 76% 81% 81% 82% 83% 83% 16% 17% 16% 16% 16% 13% 12% 13% 13% 58% 51% 51% 48% 48% 2016 2017 2018 2019 LTM 1Q20 2016 2017 2018 2019 LTM 1Q20 Subs
Slide 33: Demonstrated Improvement in Profitability & Cash Flow
Demonstrated Improvement in Profitability & Cash Flow Non-GAAP Net Income Margin1 Free Cash Flow Margin 9% 8% 8% 7% 2% 2% 1% -1% -8% -13% 2016 2017 2018 2019 LTM 1Q20 2016 2017 2018 2019 LTM 1Q20 33 2017-20 are under ASC 606. All prior periods are under ASC 605 Standard. Free cash flow defined as ca
Slide 34: Target Operating Model
Target Operating Model % of Revenue FY14 FY15 FY16 FY17 FY18 FY19 Target Model Services Revenue 5% 4% 4% 5% 5% 6% 6% - 10% Gross Margin1 82% 81% 81% 81% 82% 83% ~80% S&M1 48% 61% 58% 51% 51% 48% 40% - 45% R&D1 17% 21% 16% 13% 12% 13% 10% - 12% G&A1 17% 20% 17% 16% 17% 16% 7% - 9% Operating Margin1 0
Slide 35: Appendix
Appendix 35
Slide 36: Non-GAAP Revenue, Gross Profit, and Free Cash Flow Reconciliations
NON-GAAP RECONCILIATIONS AND DEFINITIONS NON-GAAP REVENUE, NON-GAAP GROSS PROFIT, AND FREE CASH FLOW ($000’S) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 2015 2016 2017 2018 2019 Non-GAAP Revenues GAAP Revenues $51,284 $55,454 $58,734 $62,316 $64,129 $69,664 $74,925 $80,2
Slide 37: Non-GAAP Operating Income and Net Income Reconciliations
NON-GAAP RECONCILIATIONS NON-GAAP OPERATING INCOME (LOSS) AND NON-GAAP NET INCOME (LOSS) ($000’S) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 2015 2016 2017 2018 2019 Non-GAAP Income (Loss) from Operations GAAP Loss from Operations $ (7,560) $ (8,831) $ (5,021) $ (8,424)
Slide 38: Non-GAAP S&M, R&D, G&A Reconciliations
NON-GAAP RECONCILIATIONS NON-GAAP S&M, NON-GAAP R&D, NON-GAAP G&A ($000’S) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 2015 2016 2017 2018 2019 GAAP Sales and Marketing Expense $ 29,227 $ 32,150 $ 31,709 $ 35,722 $ 35,848 $ 37,192 $ 41,848 $ 43,949 $ 44,785 $56,546 $77,81