Blackline, Inc. · NASDAQ:BL
Blackline — Investor Presentation (May 2021)
31 slides from Blackline's investor presentation, May 6, 2021
Slide 1: BlackLine Investor Presentation
BlackLine Investor Presentation As of May 6, 2021
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: Who We Are
Market Leader WHO WE ARE with Large & Unpenetrated $28B TAM1 Champions of strategic accounting and finance transformation OUR VISION To be the indispensable platform for the office of the controller Compelling Land Durable Business & Expand Model Model with Investment in Profitable Growth 1 Combined
Slide 4: Our Market Is the Office of the Controller
Our Market Is the Office of the Controller Who is the Corporate Controller? • The Controller plays a critical role in an organization’s financial health • The Controller oversees a large team across many interconnected departments • The status quo for today’s Controllers and their teams is manual pr
Slide 5: The Office of the Controller has Long Been an Area of Underinvestment
The Office of the Controller has Long Been an Area of Underinvestment The pandemic has accelerated the global economy’s shift to modern software and put a spotlight on the back office 2% 98% OF MARKET OF MARKET EARLY ADOPTERS Defensive Process Mainstream Adoption of Financial Close & AR Automation C
Slide 6: With Manual Accounting Processes That Are Not Sustainable
With Manual Accounting Processes That Are Not Sustainable 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 Syst
Slide 7: And Significant Challenges That Impact the C-Suite
And Significant Challenges That Impact the C-Suite CO N TR O LLE R C H A L L EN GE S Limited Lack of Risk of Volumes of Talent Visibility Ownership & Control Inaccuracy Unapplied Cash Retention Limited Real-Time Inefficiencies, Less Material Concerns Over Overworked Team & Data Analysis & Productivi
Slide 8: BlackLine's Accounting Platform Drives Modern Accounting
BlackLine’s Accounting Platform Drives Modern Accounting Account Task Reconciliations Management ERP Financial Integrity Variance Transaction Analysis Matching Subledger Maximum Automation Rules & Analysis & Busines Logic Reporting Consistent, F&A Database Unified Close Process Banks Templates Workf
Slide 9: And Enables Strategic Accounting & Finance Transformation
And Enables Strategic Accounting & Finance Transformation Financial Close Accounts Receivable Intercompany Management Automation Governance Drive accountability through visibility. Reporting & Dashboards Build accuracy, control, and consistency into every process. Financial Controls from Order to Ca
Slide 10: The Collaborative Accounting Experience Sets BlackLine Apart
The Collaborative Accounting Experience Sets BlackLine Apart Proven land and expand approach that drives expansion and value for our customers Implementation & Expansion & 2 Roll-out 3 Optimization Finance 4 Transformation 1 Initial Sale 10
Slide 11: Proven Go To Market & Customer Strategy
Proven 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,
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: Customer Testimonials
Customer Testimonials Click image to play video Click image to play video Click image to play video Click image to play video
Slide 14: Extending the Competitive Moat Drives Further Growth
Extending the Competitive Moat Drives Further Growth Indispensable Platform for the Controller Indispensable • SaaS-based platform Platform for • End-to-end accounting automation technology Controller • Highly scalable and configurable • ERP agnostic • Expanded functionality for the controller Stron
Slide 15: Market Leader with Large & Underpenetrated TAM
Market Leader with Large & Underpenetrated TAM $28B + $18.5B financial close market 1 $10B accounts receivable market 2 comprised of 165,000 target customers $368M BlackLine LTM revenue comprised of ~3,500 customers 3 1 Source: Frost and Sullivan/2018 TAM for Core Products. Assumes 165,000 target cu
Slide 16: Multiple Growth Levers
Multiple Growth Levers Product Adjacencies Expand to relevant adjacencies with product development & strategic M&A International Expansion Grow existing footprint and leverage partners for ROW distribution Partner Ecosystem Extend and strengthen partner Customer Expansion relationships Drive adoptio
Slide 17: Financial Highlights
Financial Highlights 20% Q1’21 Revenue Growth1 106%Q1’21 Dollar-Based Net 80% Q1’21 Non-GAAP Gross Margin 7% Q1’21 Non-GAAP Operating Margin Revenue Retention Rate High Growth Compelling High Gross Demonstrated Subscription Model Expansion Model Margins Operating Leverage Strong secular tailwinds, e
Slide 18: Highly Visible Subscription Growth Model
Highly Visible Subscription Growth Model Total Revenue Subscription & Support Revenue $M $M $343 $329 $368 19% $272 $352 Y/Y 20% Growth Y/Y $217 Growth $167 $289 2017 2018 2019 2020 LTM 1Q21 $228 Services Revenue $25 $M $23 $176 29% $17 Y/Y Growth $9 $10 2017 2018 2019 2020 LTM 1Q21 2017 2018 2019 2
Slide 19: Consistent Customer and User Growth
Consistent Customer and User Growth Customers Users ‘000s 3,482 292 297 3,433 268 3,024 2,631 223 2,208 197 167 1,758 2016 2017 2018 2019 2020 1Q21 2016 2017 2018 2019 2020 1Q21 19
Slide 20: 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 112% 110% 108% 106% 106% 97% 97% 98% 97% 98% 2017 2018 2019 2020 1Q21 2017 2018 2019 2020 1Q21 Dollar-based revenue renewal rate for each period is calculated by dividing (a)
Slide 21: Compelling Land and Expand Model
Compelling Land and Expand Model Annualized Revenue by Customer Cohort 1 Growth 2021 Multiple 2020 1.1x 2019 1.3x 2018 1.3x 2017 1.5x 2016 1.6x 2015 1.7x 2014 2.1x 2013 3.4x 2012 4.2x 1Reflects annualized subscription and support revenue for the group of customers that became our customers in each r
Slide 22: Customer Expansion in Action
Customer Expansion in Action Mid-Market Customer Enterprise Customer Financial Services Company Current ARR of ~$170K Global Industrials Company Current ARR of ~$900K 180 $175,000 900 $900,000 160 800 $150,000 $750,000 140 700 $125,000 120 600 $600,000 USERS USERS 100 $100,000 500 $450,000 80 $75,00
Slide 23: Growing Customer Wallet Share
Growing Customer Wallet Share More than 320 customers with an ARR1 of $250K+ 27 14 35% 7 6 295 2 251 CAGR in customers 203 1 spending $250K or more 162 112 72 2015 2016 2017 2018 2019 2020 $250K or more $1M or more 1ARR refers to annual subscription and support revenue. Data as of December 31, 2020.
Slide 24: Strategic Product Installed Base Opportunity
Strategic Product Installed Base Opportunity TRANSACTION CASH SMART INTERCOMPANY MATCHING APPLICATION CLOSE HUB Customers who are target candidates 3,400+ 3,400+ ~900 1,800+ Portion of this opportunity currently captured 23% 4% 6% 2% Incremental ARR opportunity Based on number of customers who $150M
Slide 25: 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 85% 87% 87% 87% 84% 80% 80% 77% 81% 82% 83% 83% 82% 71% 70% 16% 17% 16% 15% 14% 13% 12% 13% 14% 15% 51% 51% 48% 42% 41% 2017 2018 2019 2020 LTM 1Q21 2017 2018 2019 2020 LTM 1Q21 Subs
Slide 26: Demonstrated Improvement in Profitability & Cash Flow
Demonstrated Improvement in Profitability & Cash Flow Non-GAAP Net Income Margin1 Free Cash Flow Margin 13% 13% 14% 10% 8% 7% 2% 2% 1% -1% 2017 2018 2019 2020 LTM 1Q21 2017 2018 2019 2020 LTM 1Q21 26 Free cash flow defined as cash flows from operating activities less capex. 1 See appendix for GAAP f
Slide 27: Target Operating Model
Target Operating Model % of Revenue FY16 FY17 FY18 FY19 FY20 Target Model Gross Margin1 81% 81% 82% 83% 83% ~83% S&M1 58% 51% 51% 48% 42% 38% - 42% R&D1 16% 13% 12% 13% 14% 14% - 16% G&A1 17% 16% 17% 16% 15% 7% - 9% Operating Margin1 (10)% 1% 2% 6% 12% 20%+ 2017-19 are under ASC 606. All prior perio
Slide 28: Appendix
Appendix \ ‘% BLACKLINE
Slide 29: Non-GAAP Revenue, Non-GAAP Gross Profit, and Free Cash Flow
NON-GAAP RECONCILIATIONS AND DEFINITIONS NON-GAAP REVENUE, NON-GAAP GROSS PROFIT, AND FREE CASH FLOW ($000’S) Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 2016 2017 2018 2019 2020 Non-GAAP Revenues GAAP Revenues $64,129 $69,664 $74,925 $80,258 $82,598 $83,272 $90,157 $95,7
Slide 30: Non-GAAP Operating Income (Loss) and Non-GAAP Net Income (Loss)
NON-GAAP RECONCILIATIONS NON-GAAP OPERATING INCOME (LOSS) AND NON-GAAP NET INCOME (LOSS) ($000’S) Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 2016 2017 2018 2019 2020 Non-GAAP Income (Loss) from Operations GAAP Loss from Operations ($9,323) ($5,978) ($7,861) ($4,737) ($7,
Slide 31: Non-GAAP S&M, Non-GAAP R&D, Non-GAAP G&A
NON-GAAP RECONCILIATIONS NON-GAAP S&M, NON-GAAP R&D, NON-GAAP G&A ($000’S) Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 2016 2017 2018 2019 2020 GAAP Sales and Marketing Expense $35,848 $37,192 $41,848 $43,949 $44,785 $41,826 $42,588 $45,382 $48,429 $77,810 $103,967 $128,8