Slide 1: Modernizing the Way Accounting & Finance Work
MODERNIZING THE WAY ACCOUNTING & FINANCE WORK As of August 1, 2019 1
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 Modernizing Accounting & Finance Large and Growing $18.5B Estimated Core TAM1 with Multiple Financial Close Adjacencies The Industry-Recognized Leader in Financial Close Solutions2 Strong Competitive Moat Across Broad Customer Base 26% Topline Growth with 108
Slide 4: Our Mission
OUR MISSION To optimize financial reporting for all organizations worldwide. 4
Slide 5: Financial Reporting Is Universal & Mission Critical, But Current Methods Are Inefficient
FINANCIAL REPORTING IS UNVERSAL BUT CURRENT METHODS ARE & MISSION CRITICAL, INEFFICIENT & ERROR-PRONE… Public and private companies are responsible for: • oversight of financial transactions • management of enterprise performance • attestation of financial reporting • timely close • consolidation of
Slide 6: …And It Is Becoming Increasingly More Challenging
…AND IT IS BECOMING INCREASINGLY MORE CHALLENGING Increasing Rising Business Expectation of Exponentially Regulatory Complexity Accuracy & Real- Growing Data Scrutiny Time Data Volume SOX Compliance M&A Automation Unstructured Information COSO Framework Globalization Robotics System Interoperability
Slide 7: BlackLine Transforms the Financial Close
BLACKLINE TRANSFORMS THE FINANCIAL CLOSE The Financial Close is a recurring process that transforms raw data into the audited financials that investors and senior management review. Today these functions are typically performed in widely dispersed disconnected spreadsheets. BlackLine’s Cloud Platfor
Slide 8: BlackLine's Continuous Accounting Platform
BLACKLINE’S CONTINUOUS ACCOUNTING PLATFORM Finance Balance Sheet Close Process Accounting Process Transformation Intercompany Hub Integrity Management Automation Solution Account Reconciliation Transaction Matching • Accurate and effective account reconciliation • Match and reconcile millions of tra
Slide 9: The Continuous Accounting Journey
THE CONTINUOUS ACCOUNTING JOURNEY TRANSFORMATION 4 Intercompany Hub Smart Close ADVANCED RECORD–TO–REPORT 3 Transaction Matching Journal Entry INTERNAL CONTROLS 2 Variance Analysis Compliance MODERNIZED RECORD–TO–REPORT 1 Account Reconciliations Task Management PLATFORM ELEMENTS APIs & Connectivity
Slide 10: Significant Market Opportunity
SIGNIFICANT MARKET OPPORTUNITY 165K GLOBAL TARGET 13M GLOBAL F&A $18.5B ESTIMATED CORE GLOBAL MARKET COMPANIES1 PROFESSIONALS1 20181 2,800+ ~237,000 ~$255M2 BLACKLINE BLACKLINE BLACKLINE CUSTOMERS USERS REVENUE (at 6/30/19) (at 6/30/19) (TTM) 1 Source: Frost and Sullivan 2015 Report. According to a
Slide 11: Our Go-To-Market Strategy
OUR GO-TO-MARKET STRATEGY BPO SERVICES CONSULTING SI’S FIRMS Direct Sales Enterprise: >$500M Mid-Market1: $50M – $500M CHANNEL ERP PARTNERS PROVIDERS 1Mid-Market is defined as customers that generally have $500 million of annual revenue or less. From time to time, the Mid-Market sales team will targ
Slide 12: Strength Across Geographies, Sectors & Sizes
STRENGTH ACROSS GEOGRAPHIES, SECTORS & SIZES ~237,000 2,800+ Finance End-Users Global Customers *As of 6/30/19 12
Slide 13: Proven Land & Expand Model
PROVEN LAND & EXPAND MODEL Customer Adoption Example • Purchased Full Suite of Products • Continued Automation of Finance Function • 30 users grew to 690+ • Expanded Globally to All Entities ANNUAL RECURRING REVENUE ADOPTION OF BLACKLINE PRODUCTS MODERNIZED INTERNAL ADVANCED RECORD- TRANSFORMATION R
Slide 14: Competitive Landscape
COMPETITIVE LANDSCAPE STATUS QUO Market Pioneer SaaS-based platform POINT ERP agnostic Trintech SOLUTIONS Highly scalable and configurable ERPs SolEx (Solution Extension) OTHER ERP VENDORS NO CORE OFFERING 14
Slide 15: ERPs Provide a Lot of Functionality
ERPs PROVIDE A LOT OF FUNCTIONALITY 15
Slide 16: "Best of Breed" Provide Superior Solutions
“BEST OF BREED” PROVIDE SUPERIOR SOLUTIONS 16
Slide 17: Recognized Industry Leader
RECOGNIZED INDUSTRY LEADER Magic Quadrant for Cloud Financial Close Solutions BlackLine Recognized as a Leader in Gartner’s Magic Quadrant for Cloud Financial Close Solutions 3 years in a row1 1 Magic Quadrant for Cloud Financial Close Solutions, Gartner, 2016 – 2018 17
Slide 18: Strong and Passionate Management Team
STRONG AND PASSIONATE MANAGEMENT TEAM Therese Tucker Mark Partin Marc Huffman Founder and Chief Chief Financial Officer Chief Operating Officer Executive Officer Karole Morgan-Prager Mario Spanicciati Max Solonski Chief Legal and Chief Strategy Officer Chief Security Officer Administrative Officer P
Slide 19: BlackLine Financials
BLACKLINE FINANCIALS 19
Slide 20: Financial Highlights
FINANCIAL HIGHLIGHTS High Growth Compelling High DEMONSTRATED Subscription Expansion Gross OPERATING Model Model Margins LEVERAGE 26% 108% 83% 8% Q2’19 REVENUE GROWTH1 DOLLAR-BASED NET REVENUE Q2’19 GROSS MARGIN Q2’19 OPERATING MARGIN RETENTION AT 6/30/2019 (NON-GAAP) (NON-GAAP) Strong secular tailw
Slide 21: Consistent Subscription Revenue Growth
CONSISTENT SUBSCRIPTION REVENUE GROWTH Quarterly Revenue $M CAGR1: Subscription 36% Services $70 $62 $64 $59 $55 $50 $51 $45 $42 $36 $38 $32 $29 $27 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 2016 2017 2018 $124M $176M $228M 2,813 2,707 Quarterly Customers an
Slide 22: Increasing Average Revenue Per Customer…
INCREASING AVERAGE REVENUE PER CUSTOMER… Average Revenue Per Customer - Total $000’s $87 $80 $70 FY16 FY17 FY18 Revenue per customer calculated as the revenue in a given period divided by the number of customers at the end of the period. 2017, 2018 Revenue under ASC 606 standard. All other periods a
Slide 23: …And Consistently High Renewal Rates
…AND CONSISTENTLY HIGH RENEWAL RATES Renewal Rates 98% 97% 97% 97% 97% FY2016 FY2017 FY2018 Q1'19 Q2'19 Dollar-Based Revenue Renewal Rate for each period is calculated by dividing (a) the total actual annualized subscription and support revenue of customers contracts renewed for a given period by (b
Slide 24: Compelling Land and Expand Model
COMPELLING LAND AND EXPAND MODEL Annualized Revenue By Customer Cohort1 2018 CAGR: 2017 45% 2016 22% 2015 15% 2014 19% 2013 24% 2012 24% 2012 2013 2014 2015 2016 2017 2018 1 Reflects annualized subscription and support revenue for the group of customers that became our customers in each respective c
Slide 25: Strong Gross Margin & Demonstrated Operating Leverage
STRONG GROSS MARGIN & DEMONSTRATED OPERATING LEVERAGE 81% 81% 81% 82% 83% 8% 9 2% 2% 1% -1% -8% -10% -… -… 2015 2016 2017 2018 Q2'19 2015 2016 2017 2018 Q2'19 2015 2016 2017 2018 Q2'19 Gross Margin1 Operating Income/(Loss) Margin1 Free Cash Flow Margin1 (% Revenue) (% Revenue) (% Revenue) 61% 21% 58
Slide 26: Long-Term Target Model
LONG-TERM TARGET OPERATING MODEL LONG-TERM TARGET MODEL LT Target % of Revenue FY14 FY15 FY16 FY17 FY18 Model Gross Margin 82% 81% 81% 81% 82% ~80% S&M 48% 61% 58% 51% 51% 40% - 45% R&D 17% 21% 16% 13% 12% 10% - 12% G&A 17% 20% 17% 16% 17% 7% - 9% Operating Margin 0% -21% -10% 1% 2% 20%+ 2017, 2018
Slide 27: Growth Strategy
GROWTH STRATEGY DELIVER INTERNATIONAL LAND & EXTEND OUR CONTINUOUS CUSTOMER EXPANSION EXPAND ECOSYSTEM INNOVATION VALUE Be a strategic partner Grow footprint across Drive adoption of new Expand and strengthen Build and enhance who leads our Europe and Asia Pacific solutions, entities and our ERP, BP
Slide 28: BlackLine Highlights
BLACKLINE HIGHLIGHTS SaaS-Based Platform Modernizing Accounting & Finance Large and Growing $18.5B Estimated Core TAM1 with Multiple Close Adjacencies The Industry-Recognized Leader in Financial Close Solutions2 Strong Competitive Moat Across Broad Customer Base 26% Topline Growth with 108% Dollar-
Slide 29: Appendix Materials
APPENDIX MATERIALS 29
Slide 30: Non-GAAP Reconciliations and Definitions
NON-GAAP RECONCILIATIONS AND DEFINITIONS NON-GAAP REVENUE, NON-GAAP GROSS PROFIT, AND FREE CASH FLOW ($ IN 000’S) Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 2014 2015 2016 2017 2018 Non-GAAP Revenues GAAP Revenues $26,561 $29,026 $
Slide 31: Non-GAAP Reconciliations: Operating Income and Net Income
NON-GAAP RECONCILIATIONS NON-GAAP OPERATING INCOME (LOSS) AND NON-GAAP NET INCOME (LOSS) ($ IN 000’S) Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 2014 2015 2016 2017 2018 Non-GAAP Income (Loss) from Operations GAAP Loss from Operati
Slide 32: Non-GAAP Reconciliations: S&M, R&D, G&A
NON-GAAP RECONCILIATIONS NON-GAAP S&M, NON-GAAP R&D, NON-GAAP G&A ($ IN 000’S) Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 2014 2015 2016 2017 2018 G A A P S a le s a nd M a rk e t ing E xpe ns e $ 18 ,16 9 $ 19 ,0 7 3 $ 19 ,0 3 7 $