Q4 2021 Blackline Inc Earnings Call

Speaker 1: Ladies and gentlemen, thank you for standing by and welcome to the Black Line Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press the star then the one key on your touch-tone dial phone. If you call operations, please press star then zero. I would now like to end the conference over to your speaker host, Barry Hudson, from the Blue Shirt Group. Please go ahead.

Ladies and gentlemen, thank you for standing by and welcome to the Black line fiscal year 2021 earnings Conference call.

At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to question Scott and the one key on your touched on telephone.

All participants. Please press Star then zero I would now like to turn the conference over to your Speaker host Gary Hecht from the Blue shirt group. Please go ahead.

Good afternoon, and thank you for your participation today.

Speaker 2: Good afternoon and thank you for your participation today. With me on the call is Mark Huffman, Chief Executive Officer of Blackline and Mark Parton, Chief Financial Officer.

With me on the call is Marc Hoffman, Chief Executive Officer of Black line, and Mark Partin, Chief Financial Officer.

Speaker 2: Before we get started, I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans, objectives, and expected performance, in particular our guidance for Q1 and the full year 2022, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Before we get started I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans objectives and expected performance in particular, our guidance for Q1 and the full year of 2022, our forward looking statements within the meaning of the private <unk>.

Charities Litigation Reform Act of $19 95.

These forward looking statements represent our outlook only as of the date of this call. While we believe any forward looking statements. We may make are reasonable actual results could differ materially because the statements are based on our current expectations as of today and are subject to risks and uncertainties, including those stated.

Speaker 2: These forward-looking statements represent our outlook only as of the date of this call. While we believe any forward-looking statements we may make are reasonable, actual results could differ materially because the statements are based on our current expectations as of today and are subject to risk and uncertainty.

Speaker 2: including those stated in our periodic reports filed with the Securities and Exchange.

In our periodic reports filed with the Securities and Exchange Commission in.

Speaker 2: in particular are Form 10-K and Form 10-Q .

In particular, our Form 10-K and Form 10-Q .

Speaker 2: We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.

We do not undertake expressly disclaim any obligation to update or alter our forward looking statements, whether as a result of new information future events or otherwise.

As required by applicable law.

Speaker 2: Also, unless otherwise stated, all financial measures disclosed on this call will be non-

Also unless otherwise stated all financial measures disclosed on this call will be non-GAAP .

Speaker 2: A discussion of why we use non-GAAP financial measures and information regarding reconciliations of our GAAP versus non-GAAP results is currently available in our press release, which may be found on our investor relations website at investors.blackline.com or on our form 8K filed with the SEC today. Now I will turn the call over to Mark Huffman to begin.

Discussion of why we use non-GAAP financial measures and information regarding reconciliation of our GAAP versus non-GAAP results is currently available in our press release, which may be found on our Investor Relations website at investors Dot Black line Dot com or on our form 8-K filed.

With the SEC today.

Now I will turn the call over to Marc Hoffman to begin.

Good afternoon, everyone and thank you for joining us today.

I'm excited to discuss our record performance in Q4, and 2021 and review our plans for 2022.

Speaker 3: I'm excited to discuss our record performance in Q4 in 2021 and review our plans for 2022.

Speaker 3: I'm very pleased with our Q4 results, which represented a strong close to a year of increasing demand and consistent execution from the team.

I'm very pleased with our Q4 results, which represented a strong close to a year of increasing demand and consistent execution from the team.

Our Q4 performance came in ahead of our expectations as we earned total revenue with $115 million up 20% over the prior year.

Speaker 3: Our Q4 performance came in ahead of our expectations as we earned total revenue of $115 million, up 20% over the prior year.

On a macro level, we continued to see strong demand across global markets from all customer segments.

Speaker 3: On a macro level, we continue to see strong demand across global markets from all customer segments as both new and existing customers continue to invest in back office digital transformation.

Both new and existing customers continued to invest in back office digital transformation.

Speaker 3: We see a significant opportunity in front of us and plan to invest in the long-term growth of our...

We see a significant opportunity in front of us and plan to invest in the long term growth of our business.

We previously outlined three areas of focus to better serve our customers and drive our growth in.

Speaker 3: We previously outlined three areas of focus to better serve our customers and drive our growth. In Q4, we continue to execute against these three priorities. Customers reverse every previous day of the day.

In Q4, we continued to execute against these three priorities.

Customer engagement and success.

Speaker 3: platform innovation and expansion, and growing our international presence.

Platform innovation and expansion and growing our international presence.

A few highlights from the quarter include.

Our renewal rate finished the year strong at 98% and our net dollar retention rate continued to climb to 109%.

Speaker 3: Our renewal rate finished the year strong at 98.

Speaker 3: and our net dollar retention rate continued to climb to 109%.

We were pleased with this result.

Speaker 3: The increase was driven largely by the strong levels of demand from our existing customers for our strategic products, our investments in customer success-

The increase was driven largely by the strong levels of demand from our existing customers for our strategic products.

Our investments in customer success.

And execution from our go to market teams.

Speaker 3: Our strategic products, which include accounts receivable automation, intercompany hub, and transaction matching finished at 32% of total sales for the quarter, which was a new record, and well above our expectations.

Our strategic products, which include accounts receivable automation intercompany hub and transaction matching finished at 32% of total sales for the quarter, which was a new record and well above our expected range.

Sales from our SAP <unk> partnership finished the year with one of the strongest quarter since its launch in 2018.

Speaker 3: Sales from our SAP Solx partnership finished the year with one of the strongest quarters since its launch in 2018.

Speaker 3: At the end of 2021, our SAP partnership revenue made up 25% of total revenue.

At the end of 'twenty to 'twenty one are part.

Partnership revenue made up 25% of total revenue.

Speaker 3: We are pleased with the partnership's pace of RAMP and its momentum going into 2022.

We are pleased with the partnership's pace of ramp and its momentum going into 2022.

Sales in EMEA and APAC continued to help drive our revenue growth in the quarter.

Speaker 3: Sales in EMEA and APAC continued to help drive our revenue growth in the quarter.

Speaker 3: As of year end 2021, international revenue reached 30% of our total business, up from 26% a year ago.

As of year end 2021 International revenue reached 30% of our total business up from 26% a year ago.

Speaker 3: This increased share resulted from accelerated investment in our global partner ecosystem and go to market capacity.

This increased share resulted from accelerated investments in our global partner ecosystem and go to market capacity.

Additionally, the SAP partnership and the <unk> acquisition, we completed in late 2020 helped us further penetrate new and existing global markets.

Speaker 3: Additionally, the SAP partnership and the Remilia acquisition we completed in late 2020 helped us further penetrate both new and existing global markets.

Speaker 3: Some examples of international SOLEX and accounts receivable deals include the following.

Some examples of international select and accounts receivable deals include the following.

Speaker 3: In the fourth quarter, we added a large multinational beverage company.

In the fourth quarter, we added a large multinational beverage company.

Through the <unk> partnership.

Speaker 3: They were looking to Blackline to help them automate their manual spreadsheet based accounting processes and remove the complexity in managing global audit.

They were looking to black line to help them automate their manual spreadsheet based accounting processes and removed complexity and managing global audit compliance.

Speaker 3: This Solex seal also replaced a competitor solution.

So let's deal also replace a competitor solution.

Speaker 3: Another exciting fourth quarter deal came from an existing enterprise.

Another exciting fourth quarter deal came from an existing enterprise customer.

Speaker 3: This global multi-billion dollar media and advertising conglomerate has been a Blackline customer since 2013 and has leveraged the financial close to help accelerate their financial close and automate their journal entry process.

This global multibillion dollar media and advertising conglomerate has been a black line customer since 2013 and has leveraged the financial close suite to help accelerate their financial close and automate their journal entry process.

This quarter they scaled their black line platform deployment by adding the cash application and our intelligence to provide much needed aggregated visibility across business units and improve unemployed cash levels.

Speaker 3: This quarter, they scaled their Blackline platform deployment by adding the cache application and AR intelligence to provide much needed aggregated visibility across business units and improve unapplied cache.

Speaker 3: Today, we provide our customers with more capabilities than ever before.

Today, we provide our customers with more capabilities than ever before.

Speaker 3: Our 2021 product priorities included platform modernization and scaled public cloud deployment.

Our 2021 product priorities included platform modernization and scale public cloud deployment.

We are in a leadership position in our market and we continue to have a heightened focus on measures of operational excellence, such as controls quality security and uptime.

Speaker 3: We are in a leadership position in our market, and we continue to have a heightened focus on measures of operational excellence, such as controls, quality, security, and up to speed.

In 2021, we were also focused on bringing new products and functionality in the market such as an upgraded user interface a mobile user experience that has driven more journals adoption and a complete suite of HR solutions just to name a few.

Speaker 3: 2021, we were also focused on bringing new products and functionality to market, such as an upgraded user interface, a mobile user experience that has driven more journals adoption, and a complete suite of AR solutions, just to name a few.

We believe this pace of customer focused innovation is why our customers view us as an indispensable partner to the controller's office.

Speaker 3: We believe this pace of customer-focused innovation is why our customers view us as an indispensable partner to the controllers office.

We've made platform enhancements and recently closed an important strategic acquisition that will offer expanded solutions to our existing financial operations management platform.

Speaker 3: We've made platform enhancements and recently closed an important strategic acquisition that will offer expanded solutions to our existing Financial Operations Management platform.

During the quarter, we announced our enhanced accounts receivable automation platform. This suite provides traditional cash management automation, along with credit and risk management collections management dispute and deductions management as well as our intelligence.

Speaker 3: During the quarter, we announced our enhanced accounts receivable automation.

Speaker 3: This suite provides traditional cash management automation, along with credit and risk management, collections management, dispute and deductions management, as well as AR intelligence.

As an example of the scale of the platform, we have a global logistics company that apply 8 million payments, representing six $2 billion in 2021 and is projected to apply 22 million payments by the end of this year.

Speaker 3: As an example of the scale of the platform, we have a global logistics company that applied 8 million payments, representing $6.2 billion in 2021 and is projected to apply 22 million payments by the end of this year.

The relevance of timeliness of accounts receivable automation drew record demand in our marketing events and sales pipeline, which contributed to the strong quarter.

Speaker 3: The relevance and timeliness of accounts receivable automation drew record demand in our marketing events and sales pipeline, which contributed to the strong quarter in AR customers' sales.

Our customer sales.

Speaker 3: In January , we announced our acquisition of 4Q, which represents another important expansion of our platform capability.

In January we announced our acquisition of <unk>, which represents another important expansion of our platform capabilities.

Speaker 3: With 4Q, our expanded intercompany financial management product will help multinational companies reduce intercompany complexity and design and govern global tax strategies. I'll discuss this acquisition in a second.

With <unk>, our expanded intercompany financial management product will help multinational companies reduced intercompany complexity and design and govern global tax strategies.

I will discuss this acquisition more in just a moment.

Speaker 3: As part of further developing our financial operations management

As part of further developing our financial operations management platform. We've also formed strategic partnerships to help companies accelerate their finance transformation.

Speaker 3: We've also formed strategic partnerships to help companies accelerate their finance transfer.

Through our agreement with Microsoft we are collaborating on joint selling actions and solutions integrations to help mid market and enterprise sized customers gain control over critical areas such as their financial close accounts receivable and intercompany accounting processes.

Speaker 3: Through our agreement with Microsoft, we are collaborating on joint selling actions and solutions integrations to help mid-market and enterprise-sized customers gain control over critical areas such as their financial close, accounts receivable, and intercompany accounting processes.

This partnership will offer a better customer experience with enhanced connectivity and integration.

Speaker 3: This partnership will offer a better customer experience with enhanced connectivity and integration.

Speaker 3: And recently we announced an expansion of our partnership with Google to conduct joint selling and go-to-market activities designed to accelerate the customer journey to digital finance transformation and modern account.

And recently, we announced an expansion of our partnership with Google to conduct joint selling and go to market activities designed to accelerate the customer journey to digital finance transformation and modern account.

Speaker 3: Notably, we believe this agreement will better enable our customers to deploy Blackline solutions built on Google's secure cloud platform.

Notably we believe this agreement will better enable our customers to deploy black line solutions built on Google secure cloud platform.

As a result customers will be able to easily integrate data and automate traditional manual accounting processes and offer more capacity to free up time and resources to do more strategic work.

Speaker 3: As a result, customers will be able to easily integrate data and automate traditional manual accounting processes and offer more capacity to free up time and resources to do more strategically.

Last year, we continue to emphasize our commitment to customer success.

Speaker 3: Last year, we continue to emphasize our commitment to customer service.

During the year, we hosted several events and activities for all of our 3800 plus customers.

Speaker 3: During the year, we hosted several events and activities for all of our 3,800 plus...

Speaker 3: including some of the largest enterprises in the world, to guide them on their unique path to financial transformation.

Including some of the largest enterprises in the world to guide them on their unique path to financial transformation.

Our subject matter experts with deep accounting and black line expertise offer leading practices to adopt modern accounting.

Speaker 3: Our subject matter experts with deep accounting and Black Line expertise offer leading practices to adopt modern accounts.

Speaker 3: These experts need customers where they are in their journey and provide a path to greater adoption and automation.

These experts meet customers, where they are in their journey and provide a path to greater adoption and automation. This.

Speaker 3: This is done through one-to-one coaching session and one-to-many optimization workshop.

This is done through one to one coaching sessions and one to many optimization workshops.

Both methods help customers to automate end to end accounting processes like amortization accruals.

Speaker 3: Both methods help customers to automate end-to-end accounting processes like amortization, accruals, subledgers, suspense...

Sub ledgers suspension clearing just to name a few.

Our customer success program ensures a greater platform adoption, resulting in higher rates of retention and expanded use of our strategic products.

Speaker 3: Our customer success program ensures a greater platform adoption, resulting in higher rates of retention and expanded use of our strategic product.

Speaker 3: One of our greatest opportunities to focus on customers is through our annual user conference, Beyond the Black, which we hosted in November .

One of our greatest opportunities to focus on customers is through our annual user conference beyond the black which we hosted in November .

Speaker 3: This conference provided three days of content and educational session to further prove the power of

This conference provided three days of content and educational session to further prove the power of our platform and customer success.

This year's event had significant customer engagement from over 19000 virtual attendees, representing over 5700 organizations, both prospects and current customers.

Speaker 3: This year's event had significant customer engagement from over 19,000 virtual attendees.

Speaker 3: representing over 5,700 organizations, both prospects and current customers.

Speaker 3: Of note, during the conference was a level of participation and interest in large digital transformation driven by our product vision for financial operations management which resonated with our customers and process.

Of note during the conference was the level of participation and interest in large digital transformation driven by our product vision for financial operations management, which resonated with our customers and prospects.

Speaker 3: And we were very excited to see the level of increased customer interest in our intercompany financial management.

We were very excited to see the level of increased customer interest in our intercompany financial management session, which drew thousands of attendees with four times more individuals.

Speaker 3: which drew thousands of attendees with four times more individuals than the previous year.

In the previous year.

Intercompany financial management is an especially attractive market for black line, the global trend, increasing M&A trade and involving tax regulations create large volumes of complex intercompany transaction.

Speaker 3: Intercompany financial management is an especially attractive market for black.

Speaker 3: The global trends increasing M&A, trade and involving tax regulations create large volumes of complex intercompany transactions.

Speaker 3: We launched our intercompany hub solution over five years ago to provide valuable solutions in this area.

We launched our intercompany hub solution over five years ago to provide valuable solutions in this area.

Speaker 3: Yet we've only just begun to reach the total addressable market in intercompany financial management.

We've only just begun to reach the total addressable market and intercompany financial management.

Over the past several years the market has continued to evolve and in the recent quarters, we've seen momentum building in this part of our business.

Speaker 3: Over the past several years, the market has continued to evolve. And in the recent quarters, we've seen momentum building in this part of our business.

Our recent acquisition of <unk>, which we announced January 27 is a great example of our commitment to expanding our platform and investing in the long term growth.

Speaker 3: Our recent acquisition of 4Q, which we announced January 27th, is a great example of our commitment to expanding our platform and investing in the long-term growth.

Speaker 3: I'm very excited about this deal and what it means for Blackline.

I'm very excited about this deal and what it means for black lines future.

The acquisition of <unk> builds on our recent success and is complementary to our existing capabilities at.

Speaker 3: The acquisition of 4Q builds on our recent success and is complementary to our existing capabilities.

Speaker 3: It expands our team by adding over 130 employees to the Blackline family and increases our value to the broader office of the CFO .

It expands our team by adding over 130 employees to the Black line family and increases our value to the broader office of the CFO .

Speaker 3: By integrating our existing solutions with 4Q's capabilities, we will further reduce complexity and deliver several benefits to customers, including optimized tax and transfer price modeling, reduced foreign currency risk, enhanced regulatory compliance, rapid and

By integrating our existing solutions with <unk> capabilities, we will further reduce complexity and deliver several benefits to customers, including optum.

Optimize tax and transfer price modeling.

Reduced foreign currency risk.

Enhanced regulatory compliance.

Rapid M&A integration.

And our unmatched domain expertise.

Speaker 3: Since announcing the deal, we've received favorable feedback from our customers that are looking for additional solutions to resolve their intercompany challenges.

Since announcing the deal we have received favorable feedback from our customers that are looking for additional solutions to resolve their intercompany challenges.

As I look back on 2021, I am pleased with the progress we've made on our strategic initiatives as.

Speaker 3: As I look back on 2021, I'm pleased with the progress we made on our strategic initiatives.

Speaker 3: As we move into 2022, I'm excited about the recent trends in the market, and I'm very confident in our team, our ability to execute and our positioning. We are in the early innings of

As we move into 2022 I'm excited about the recent trends in the market and I'm very confident in our team our ability to execute and our positioning.

We are in the early innings of a large growing market and we're seeing the demand for digital transformation across the back office continued to expand.

Speaker 3: and we're seeing the demand for digital transformation across the back office continue to expand. Our focus will be to continue to serve our customers.

Our focus will be to continue to serve our customers accelerated growth in our combined markets and scale the business to support our expanding reach.

Speaker 3: scale the business to support our expanding.

Speaker 3: We remain committed to executing our multi-year strategy to drive long-term sustainable growth and advancing Black Line's position as a market leader.

We remain committed to executing our multiyear strategy to drive long term sustainable growth and advancing black lines position.

As the market leader.

Speaker 3: I'll now turn it over to Mark Parton to discuss our financial performance and our financial outlook for 2022.

I'll now turn it over to Mark to discuss our financial performance and our financial outlook for 2022.

Thank you Mark and good afternoon, everyone.

As Mark mentioned, we are very pleased with how we finished the year.

Speaker 4: As Mark mentioned, we are very pleased with how we finish the year.

Speaker 4: 2021 was a year of solid performance and we feel good about our opportunity for 2022 and beyond.

2021, what are your solid performance and we feel good about our opportunity for 2022 and beyond.

During Q4, we continued to execute on our business plan and generated strong results across key financial and business metrics.

Speaker 4: During Q4, we continued to execute on our business plan and generated strong results across key financial and business metrics.

Speaker 4: For the full year 2021, total revenue grew 21% to $426 million.

For the full year 2021.

Total revenue grew 21% to $426 million.

In the fourth quarter total revenue grew to $115 million, representing 20% growth.

Speaker 4: In the fourth quarter, total revenue grew to $115 million, representing 20% growth, compared to the fourth quarter of 2020.

Compared to the fourth quarter of 2020.

Speaker 4: led by sustained success in our international markets, our continued ability to close large and strategic deals.

Led by sustained success in our international markets, our continued ability to close large and strategic deals.

Speaker 4: the ongoing productivity of our partners, and further expansion of our existing customers.

The ongoing productivity of our partner and further expansion of our existing customers.

Speaker 4: In addition to Mark's comments earlier, highlights for the quarter include

In addition to Mark's comments earlier highlights for the quarter include.

We added 121 net new customers in the quarter.

Speaker 4: We added 121 net new customers in the quarter, bringing our total to 3,825 new customers that continue to adopt our solutions to reduce their operational challenges.

Bringing our total to 3825.

New customers continue to adopt our solution to reduce their operational challenges.

Speaker 4: We showed strength in the enterprise market by signing a record number of large deals with the help of our partners and by leveraging our strategic product portfolio.

We showed strength in the enterprise market by signing a record number of large deals.

With the help of our partners and by leveraging our strategic product portfolio.

Speaker 4: Partners were involved in 88% of large deals in the quarter, showcasing the power of our valuable partner EcoS-

Partners were involved in 88% of large deals in the quarter showcasing the power of our valuable partner ecosystem.

And revenue from our SAP partnership totaled 25% of revenue up from 24% in the prior year, maintaining the positive trend of this relationship.

Speaker 4: and revenue from our SAP partnership totaled 25% of revenue, up from 24% in the prior year, maintaining the positive trend of this relationship.

Speaker 4: In Q4, non-GAAP overall gross margin was 78% and subscription gross margin was 82%.

In Q4, non-GAAP overall gross margin was 78% and subscription gross margin was 82%.

For the full year total gross margin was 80% and subscription gross margins were 84%, which is within our targeted range and reflects the ongoing transition of our customers to the Google cloud.

Speaker 4: For the full year, total gross margin was 80% and subscription gross margins were 84%, which is within our targeted range and reflects the ongoing transition of our customers to the Google Cloud and increase investments in ramping our customer service and success activity.

And increased investment in ramping our customer service and success activities.

In Q4, we generated non-GAAP net income attributable to black line of $4 8 million.

Speaker 4: In Q4, we generated non-GAAP net income attributable to black line of $4.8 million.

Speaker 4: We generated $22.1 million in operating cash flow and $15.3 million in free cash flow.

We generated $22 1 million in operating cash flow and $15 3 million and free cash flow.

Speaker 4: Net income was impacted by our ramp and targeted investments, as well as a one-time charge related to the cancellation of sales and marketing events resulting from the pandemic.

Net income was impacted by our ramp and targeted investments as well as the one time charge related to the cancellation of sales and marketing events, resulting from the pandemic.

We finished the year with approximately $1 2 billion in cash equivalents and marketable securities.

Speaker 4: We finished the year with approximately $1.2 billion in cash equivalents and marketable security.

Over the past several years, we have consistently improved our net income achieving operating leverage across all areas of our business.

Speaker 4: Over the past several years, we have consistently improved our net income, achieving operating leverage across all areas of our business.

Speaker 4: In 2021, we earned a non-GAAP net income margin above 8%, which was an increase from 1% in 2017.

In 2021, we earned a non-GAAP net income margin above, 8%, which was an increase from 1% in 2017.

Speaker 4: We achieved this while increasing strategic investments in our customer success, technology, product roadmap, and integrating the Remilia acquisition.

We achieved this while increasing strategic investments in our customer success.

<unk> technology.

<unk> roadmap and integrating the <unk> acquisition.

Speaker 4: During 2021, we saw the demand environment for digital transformation across the office of the CFO continue to accelerate and build momentum.

During 2021, we saw the demand environment for digital transformation across the office of the CFO continued to accelerate and build momentum.

This favorable market environment offers us a unique opportunity to invest in accelerating our long term revenue growth rate and advancing our leadership position.

Speaker 4: This favorable market environment offers us a unique opportunity to invest in accelerating our long-term revenue growth rate and advancing our leadership position.

Given the market opportunity in front of US we intend to make targeted investments in our go to market team.

Speaker 4: Given the market opportunity in front of us, we intend to make targeted investments in our go-to-market team, our public cloud infrastructure, and the integration of our recent acquisition.

Our public cloud infrastructure and the integration of our recent acquisition.

Speaker 4: The impact of 4Q to overall revenue in 2022 is not expected to be material, but it will be diluted to our overall margins in the year as we ramp our investments to support the integration.

The impact of <unk> overall revenue in 2022 is not expected to be material, but it will be dilutive to our overall margins in the year as we ramp our investments to support the integration.

Speaker 4: We are expecting to see a return of travel and in-person events in 2022. And while this remains uncertain in our overall business globally, modeling the cost at this point gives us appropriate flexibility as the year develops.

We are expecting to see a return of travel and in person events in 2022, and while this remains uncertain in our overall business globally modeling the cost at this point gives us appropriate flexibility as the year develops the.

Speaker 4: The Q1 net loss guidance includes the ramping of investments, the normal step up in annual operating expenses driven by salary increases, payroll tax reset, and annual kickoff events.

Q1 net loss guidance includes the ramping of investments the normal step up in annual operating expenses driven by salary increases payroll tax reset and annual kickoff events plus the dilutive impact from the <unk> acquisition and its related cost.

Speaker 4: plus the dilutive impact from the 4Q acquisition and its related costs.

Speaker 4: We expect to generate operating leverage and additional margin throughout the year as we execute on the top line.

We expect to generate operating leverage and additional margin throughout the year as we execute on the topline.

Turning now to guidance.

Speaker 4: Our expectations for the first quarter of 2022 include.

Our expectations for the first quarter of 2022 include.

Speaker 4: Total gap revenue is expected to be in the range of $119 to $120 million.

Total GAAP revenue is expected to be in the range of $119 million to $120 million.

Speaker 4: representing 20 to 21 percent growth compared to the first quarter of 2021.

Representing 20% to 21% growth compared to the first quarter of 2021.

Speaker 4: On the bottom line, we expect to report non-GAAP net loss attributable to Black Line in the range of negative six to negative four million dollars, or a loss of 10 to seven cents on a per share base.

On the bottom line, we expect to report non-GAAP net loss attributable to Black line in the range of negative six to negative $4 million or a loss of 10% to 7%.

On a per share basis.

Our share count will be approximately $59 2 million diluted weighted average shares.

Speaker 4: Our share count will be approximately 59.2 million diluted weighted average share.

For the full year 2022, we expect total GAAP revenue in the range of $520 to $525 million.

Speaker 4: For the full year 2022, we expect total gap revenue in the range of $520 to $525 million, representing 22 to 23% growth compared to the full year 2021.

Adding 22% to 23% growth compared to the full year 2021.

On the bottom line, we expect to report non-GAAP net income attributable to Black line in the range of $5 million to $7 million or 8% to 11 on a per share basis.

Speaker 4: On the bottom line, we expect to report non-GAAP net income attributable to Black Line in the range of $5-7 million, or 8-11 cents on a per share basis.

Speaker 4: Our share count will be approximately 63 million diluted weighted average shares.

Our share count will be approximately 63 million diluted weighted average shares.

In closing I want to thank all our black line employees for their effort and hard work in 2021.

Speaker 4: In closing, I want to thank all our Black Line employees for their effort and hard work in 2021.

Speaker 4: We had a strong finish to the year and continue to see healthy customer demand as more and more companies scale and invest in their back office digital transformation.

We had a strong finish to the year and continue to see healthy customer demand as more and more companies scale and invest in their back office digital transformation.

Speaker 4: We're excited to continue to support customers in that journey by expanding our platform with our 4Q acquisition.

We're excited to continue to support customers in that journey by expanding our platform with our <unk> acquisition.

As we head into 2022, our strong customer demand and platform momentum gives us the confidence to continue to invest strategically in our long term growth as we build on our our renovation our market leadership and pursue the attractive growth opportunity in front of us now.

Speaker 4: As we head into 2022, our strong customer demand and platform momentum gives us the confidence to continue to invest strategically in our long-term growth as we build on our innovation, our market leadership, and pursue the attractive growth opportunity in front of us.

Now I'll ask the operator to open the discussion and we can take your questions.

Speaker 4: Now I'll ask the operator to open the discussion and we can take a question.

Thank you, ladies and gentlemen to ask a question at this time you wanted to ask you will need to press. The Star then the one key on your Touchtone telephone.

Speaker 1: Thank you ladies and gentlemen. To ask a question at this time, you will need to press the star then the one key on your touchtone telephone. To withdraw your question.

To withdraw your question press the pound key.

Now first question coming from the line of Matt Stotler with William Blair. Your line is open.

Speaker 1: Now first question coming from the lineup. Matt Stadler with William Blair. You want to stop it.

Hi, Thanks for taking the questions.

Speaker 5: Hey, thanks for taking the questions. I guess, you know, first would like to maybe dig into the 4Q acquisition a little bit more. Obviously, you know, very interesting in terms of the, you know, kind of specific additive capabilities that you mentioned, but would like to maybe, you know, better understand how it complements what you have, you know, with ICH and maybe some of the, you know, kind of key things that are additive there or if it's meant to, you know, replace some things that you would previously offer with ICH.

I guess first would like to maybe dig into the <unk> acquisition, a little bit more.

Obviously, a very interesting in terms of the kind of specifics.

Additive capabilities that you mentioned.

I'd like to maybe better understand how it complements what you have.

With IC H and maybe some of the kind of key things that are additive there or if it's meant to replace some things that you had previously offered IC H and then.

Speaker 5: And then, obviously with ICHD.

Obviously with IC HD.

Speaker 5: The ramp there has been relatively gradual over time, high value in terms of value for customers, but just given the sales process, the number of stakeholders, etc., it's been kind of gradual to layer in. And how would you expect 4Q to contribute going forward?

The ramp there has been relatively gradual over time.

High value in terms of.

Value add for customers, but just given the sales process the number of stakeholders et cetera.

It's been kind of gradual to where and how would you expect <unk> to contribute going forward.

Yes, thanks for the question Matt.

Speaker 3: Yeah, thanks for the question, Matt. I'll start maybe broadly.

Maybe broadly.

Intercompany accounting.

Speaker 3: Intercompany accounting, we believe is a large space. TAM is large. It's strategic to us and it's a great greenfield, hence our investment several years ago that you referenced in Intercompany Hub. Those transactions are complex.

We believe there's a large.

Space Tam is large it's strategic to us and it's a great greenfield, hence our investment several years ago that you referenced.

Company hub.

Those transactions are complex and they go on in some of the largest most complex account.

Speaker 3: and they go on in some of the largest, most complex accounting landscapes in the world. And a lot of it is still done very, very manually.

Accounting landscapes in the world and a lot of it is still done very very manually.

Speaker 3: to really simplify the sort of additive value of it.

To really simplify the.

Sort of additive.

<unk> of it.

Black line.

Speaker 3: Black Line, very closely coupled to what we do in the financial close, helped identify and then remediate the transactions that were, let's call them out of balance or broken, that created an intercompany accounting.

Very closely coupled to what we do in the financial close.

Identify and then remediate the transactions that were let's call them out of balance or broken.

Got created an intercompany accounting.

Yes.

<unk>.

Speaker 3: 4Q started at the very opposite end of the challenge in the creation and planning side of transactions. So as you think about this complex landscape that has significant tax implications, significant foreign exchange implications, transfer pricing and regulatory concerns.

Started at the very opposite end of the challenge in the creation and planning side of transactions. So as you think about this complex landscape that has significant tax implications significant foreign exchange implications transfer pricing and regulatory concerns.

Speaker 3: They are upstream focusing on the planning and creation of transactions that flow through the entire accounting process. We were really focused on identifying those transactions, remediating them, completing the close, and we think these two things are highly complementary and our customers will be the significant beneficiaries of this in the future.

Our upstream focusing on the planning and creation of transactions that flow through the entire accounting process. We were really focused on identifying those transactions re mediating and then completing the close and we think these two things are.

Highly complementary and our customers will be the significant beneficiaries of this in the future.

Speaker 5: That's super helpful and I appreciate the color there. And maybe one for other Mark on gross margins.

That's super helpful and I appreciate the color there.

One for other Mark on gross margins.

Speaker 5: Subscription growth margins took another little bit of a step down in the quarter. I know there's a bunch of things going off from an investment perspective, especially with the move to GCP and all that. Maybe just touch on, just refresh us on some of the dynamics there, get an update, and then how we should think about that as we move through 2022.

Subscription gross margins took another little bit of a step down in the quarter I know, there's a bunch of things going off an investment perspective, especially with the move to <unk>.

TCP and all of that maybe just touch on just refresh us on some of the dynamics there getting update and then how we should think about that as we move through 2022.

Speaker 4: Yeah, yeah, thanks. Our gross margin finished a quarter, 78% has been trending in that direction related to two things. We've been talking about it for a few quarters, and that's related to our investment in the Google Cloud. We believe that was about a one to two point impact. And then similarly, investing in our customer service and success team, ramping that effort as our company and our product mix moves forward. We think that those were really well received investments with our customer base.

Yeah, yeah. Thanks.

Our gross margin finished the quarter at 78% had been trending in that direction related to two things we've been talking about it for a few quarters and thats related to our investment in the Google Cloud. We believe that was about a 1% to two point impact and then similarly investing in our customer service and succeed.

<unk> team ramping that effort.

As our company and our product mix.

Moves forward, we think that those were really well received investments with our customer base and the Google Cloud migration, we think thats. Another 18 to 24 months will see the impact of that in 'twenty, two similar to where we finished up the year.

Speaker 4: In the Google Cloud migration, we think that's another 18 to 24 months we'll see the impact of that in 22, similar to where we finished up the year, and longer term confidence in our ability to return back to a gross margin in the 80 plus percent. Very helpful.

And longer term.

<unk> and our ability to return back to.

Gross margin in the 80 plus percent.

Very helpful. Thanks again.

Youre welcome.

Speaker 1: Our next question coming from the line up. Mad Benzler with BTI G. Your line is open.

Our next question coming from the line up.

Matt <unk> with <unk> Your line is open.

Yes, thanks for taking the question.

Speaker 6: Yeah, thanks for taking the question. I guess first, Mark Pardon, can you help us understand kind of what the revenue contribution is for 4Q that you're building into the guidance and then how much of a, I guess, compression on margins is that expected to have over the year?

I guess first.

Mark can you help us understand kind of what the revenue contribution is four <unk> that you are building into.

The guidance and then how much of.

I guess a compression on margins is that expected to have over the year.

Speaker 4: Yeah, so I'll start by saying that our guidance philosophy for 22 is very consistent with what we've done in the past. We feel confident that we can execute in that range in 22. The impact of 4Q, the transaction was closed in January , we'll start to see it as early as Q1 and through this year. As to revenue, we estimate included in our guidance between 1 and 2 points.

Yeah.

I'll start by saying that our guidance philosophy for 'twenty two is very consistent with what we've done in the past we feel confident that we can execute in that range in 'twenty two the impact of <unk>. The transaction was closed in January we will start to see it as early as Q1 and through this year.

Impact to revenue we estimate included in our guidance between one and two points.

Speaker 4: And at the bottom line, it will be deluded to the overall company for the full year as we invest and integrate the business.

And at the bottom line it will be dilutive to the overall company for the full year as we invest and integrate the business.

Okay helpful. And then as you look at the international growth I know you've made a lot of investments both with direct go to market team and expanding a lot of the partnerships there.

Speaker 6: Okay, helpful. And then as you look at the international growth, I know, you know, you made a lot of investments both with direct go to market team and expanding a lot of the partnerships there.

Speaker 6: Where do you feel like you're at in terms of the overall investment cycle? Are we at a point now where the returns from the last couple of years sort of self-fund the additional growth going forward? Are we still in maybe a final investment year to the point of continuing to ramp up that growth and continuing to see the success you saw in the fourth quarter?

Where do you feel like Youre at in terms of.

The overall investment cycle are we at a point now where the returns from the last couple of years sort of self fund the additional.

Growth going forward.

Are we still in maybe a final investment year.

To the point of continuing to ramp up that growth and continuing to see the success, we saw in the fourth quarter.

Speaker 4: Yeah, international is one of the areas that we've been really excited about for the last 12 to 18 months coming out of the pandemic. It lagged the US slightly, but then has really started to get back to the pre-pandemic levels. It's a growth lever that's been driving our overall growth.

Yes International is one of the areas that we've been really excited about for the last 12 to 18 months coming out of the pandemic hit lagged the U S. Slightly but then has really started to get back to the pre pandemic levels. It's a growth lever that's been driving our overall growth major markets in <unk>.

Speaker 4: major markets in EMEA and APAC where we operate today, consistent with our partner ecosystem like SAP and some of the consultants that are helping drive business in those markets.

In APAC, where we operate today.

With our partner ecosystem like SAP.

And some of the consultants that are helping drive business in those markets, our investments and our Japan partnership early on that after.

Speaker 4: our investments in our Japan partnership early on that after a period of time is now starting to come online.

A period of time is now starting to come online.

Speaker 4: So we will continue to invest there and the return continues to be great for us. And we think that there is opportunity in those markets to keep driving and therefore we will keep accelerating. In fact, in 2022, one of the major areas of investment for us.

We will continue to invest there and the return continues to be great for us and we think that there is opportunity in those markets to keep driving and therefore, we will keep accelerating in fact in 2022, one of the major areas of investment for US is in capacity and in sales and marketing around our <unk>.

Speaker 4: is in capacity and in sales and marketing around our international markets to invest into that growth demand that we see.

Our national market.

Invested into that growth demand that we see.

Alright, great. Thank you for taking the question.

Our next question coming from the line of Joe Moore with Twist. Your line is open.

Speaker 1: Our next question coming from the line of Joe Meers with TUIS, the line is...

Speaker 2: Thanks so much for taking the question. Last quarter you guys noted that the customer engagement team was above 100 in headcount. With your increased investment initiative here, I was wondering if that grew sequentially and then just more broadly how are you guys doing with hiring across the company and the currently target?

Hey, thanks, so much for taking the question.

Last quarter, you guys noted that the customer engagement team was above 100 in head count and with your increased investment initiative here I was wondering if that grew sequentially and then just more broadly how are you guys doing with hiring across the company and we're currently tough hiring environment, yes. Thank you I'll start with the hiring.

Speaker 3: Yeah, thank you. I'll start with the hiring bit and

Ben.

Speaker 3: You know, going back to customer success, it's an area that we continue to invest in. We think it's really important.

Back to customer success, it's an area that we continue to invest and we think it's really important.

Speaker 3: In the near-term operational metrics, the net revenue retention should reflect...

In the near term operational metrics net revenue retention should reflect.

Speaker 3: you know, how we're investing in those areas. Obviously, our retention rate and the account growth, having people get better usage and learn about additional use cases will affect the future performance of our strategic products. And in this particular quarter, it was a very strong strategic product. So we'll continue to invest there. As far as overall hiring goes,

How we are investing in those areas obviously our.

Our retention rate and the account growth having people.

Get better usage and learn about additional use cases will affect the future performance of <unk>.

Our strategic products and in this particular quarter. It was a very strong strategic products' result source. So we will continue to invest there as far as overall hiring goes.

Speaker 3: I believe we were not immune to the great resignation. However, I think we fared better than many companies. Our brand and our culture are strengths for us. Overall, I believe last year our headcount grew by about 18 percent and as we hit in the very tail end of the year we were accelerating that to the investments that we plan to capitalize on the demand environment that we're seeing right now.

We.

Believe we were we're.

We're not immune to the great resignation, however, I think we fared better than many companies our brand and our culture our strengths for us.

Overall, I believe last year, our head count grew by about 18% and then as we hit in the very tail end of the year, we are accelerating that to the investments that we plan to capitalize on the demand environment that we're seeing right now.

Yes.

Speaker 7: That's super helpful, especially the color on the acceleration, so thanks for that.

That's super helpful, especially the color on the acceleration so thanks for that.

<unk>.

More a question about international what's the game plan can you just remind us of the game plan to expand in APAC and how that may be similar or different from the strategy that you've used to expand your presence in EMEA.

Speaker 7: One more question about international. What's the game plan, because it just reminds me of the game plan to expand in APAC and how that may be similar or different from the strategy that you've used to expand your presence in EMEA?

Speaker 3: It's not dissimilar to the strategy that we've used in the meal with the exception, you know, if we include our Japan business in there, that's obviously a partnership that we're really, really pleased with the progress that we're seeing.

It's not dissimilar.

So the strategy that we've used in EMEA with the exception. If we include our Japan business and that's obviously a partnership.

We're really really pleased with the progress that we're seeing in Japan, We've recently added leadership.

Speaker 3: In Japan, we've recently added leadership, proven leadership in the APAC region that I think is going to help benefit us in terms of scale.

<unk> proven leadership in the APAC region that I think is going to help benefit us in terms of scale, but it's.

Speaker 3: But it's a mix of our growth initiatives, which include FOLEX, very performant for us in Asia Pacific.

It's a mix of our growth initiatives, which include select performance for us in Asia Pacific.

Speaker 3: land and expand motions, utilizing now the modern accounting playbook in some locations, and then investing in customer success and things that drive enhanced usage, which should bring the tail of and drag in strategic products. Like we've mentioned, international growth overall is accelerating, and we're pleased with the performance and our investments in those areas.

Land and expand motions utilizing now to modern accounting playbook and some locations and then investing in customer success.

That drive enhanced usage, which should bring the tail of.

And drag in strategic products.

Like we've mentioned that international growth overall is accelerating and we're pleased with the performance of our investments in those areas.

Absolutely.

And our next question coming from the line of Alex Sklar with Raymond James Your line is open.

Speaker 1: Our next question coming from Glenn up Alex Clark with Raymond James the line is open.

Great. Thanks.

Speaker 8: Great, thanks. I had a couple questions on 4Q as well. Mark Parton first, is that one to two points of revenue contributions factor in deferred revenue?

Couple of questions on <unk> as well.

Mark part and FERC does that one to two points of revenue contribution factor a deferred revenue haircut.

It does it factors in what we.

Speaker 4: It does. It factors in what we think the impact at this stage in the year, what we think the impact will be in our guide. We put one to two points in that number.

I think the impact at this stage in the year, what we think the impact will be in our guide we've put one to two points.

In that number.

Speaker 8: Okay, great. And then Mark Hoffman, the way you were describing the 4Q solution seems like it's a product that can really help outside of the traditional financial close period. Can you talk about that controller ship opportunity kind of outside of financial close more broadly, and then your kind of growth rate expectations for 4Q?

Okay great.

Then Marc Hoffman the way you were describing the <unk> solution.

Like it's a product that can really help outside of the traditional financial close period can you talk about that controller chip opportunity kind of outside of financial close more broadly and then youre kind of growth rate expectation for <unk>.

Well.

Speaker 3: Well, first of all, I hope you can sense I'm excited about the opportunity. I would just, you know, again, starting with the

First of all I hope you can sense Im excited about the opportunity.

Just again starting with the.

The space itself, how strategic the large orders that we see and just how much.

Speaker 3: the space itself, how strategic, the large orders that we see, and just how much help that we can provide to some of these organizations who suffer through these high risk areas.

<unk> helped though we can provide to some of these organizations who suffer through these high risk areas.

The.

Speaker 3: They come with an existing pipeline of opportunities, and we've been really, really aware of the fact that people might be confused in what our offerings are traditionally within our company hub.

Yes.

They come with an existing pipeline of opportunities and we've been really really.

Aware of the fact that people might be confused.

And what our offerings are traditionally with intercompany hub.

Speaker 3: versus what their 4Q offerings were, and we are finding them very complimentary and getting great feedback. So we have, I would say, ambitious plans, but understand that we'll take time to communicate the value of the joint solution, work through creating a really seamless and highly scalable experience for our customers that leverages both the plan and create side and the remediation side of the entire intercompany space.

Versus what Theyre <unk> offerings, wherein we are finding them very complimentary and getting great.

Feedback so we have.

I would say ambitious plans, but understand that will take time to communicate the value of the joint solution work through creating a really seamless and highly scalable experience for our customers that leverages both.

The plan and create side and the remediation side.

The entire intercompany space.

Okay, great. Thank you.

Speaker 1: Our next question coming from the lineup. Andrew Degas-Baron with Baronburg Capital, United States of America.

Our next question coming from the line of Andrew Ginsburg with Baron Capital. Your line is open.

Pardon me this is Elliot.

Speaker 1: Hi, this is Ali Esteen on for Andrew. Thanks for taking our question. So we were wondering if there is room for the relationship with SAP to even further improve, particularly as that company continues to execute in its rollout of its cloud-based ERP solution.

Andrew Thanks for taking our question.

Im wondering if that relationship with <unk>.

Great NPS, particularly at that company continues to execute in its rollout of its cloud based ERP question.

Well, we were having a little trouble with the audio so I hope I'm getting this right.

Speaker 3: Well, we were having a little trouble with the audio, so I hope I'm getting this right. The question is regarding SAP and Solex.

Regarding SAP <unk>.

Yes.

Speaker 3: One of the best quarters that we've had in the relationship since inception, highly performant for us, an accelerating growth engine for us, adds some benefit to our international expansion, which is driving the growth of our environment.

One of the best quarters that we've had in the relationship symptoms.

<unk>.

The performance for us.

And accelerating growth engine for us.

Add some benefit to our international expansion.

<unk> is driving.

Speaker 3: The performance that we've seen is a greater share of our revenue. In addition to that, it has led to some of the net customer ad strength that we had in a strong quarter. And then the other big attribute of the quarter was a strong larger deal contribution, which is also on the back of SoLEC. So highly performant relationship for us right now.

The performance that we've seen is a greater share of our revenue. In addition to that it is.

Led to some of the net customer add strength that we had and a strong quarter and then the other.

Big attribute of the.

Quarter was strong larger deal contribution.

Which is also on the back of solar so highly performance our relationship for us right now.

Okay. Thanks, sorry about the connectivity issues.

And our next question coming from the lineup Josh Beck with Keybanc. Your line is open.

Speaker 1: Next question coming from the lineup. Josh Beck with KeyBank.

Speaker 9: Okay, this is Maddie on for Josh. Thanks for taking my questions. I have a couple and then a follow up. Modeling wise, I wanted to know how you're thinking about NRR trends.

Hey, this is Matt on for Josh. Thanks for taking my questions I have a couple and then I'll follow up.

Modeling wise I wanted to know how youre thinking about NR trends.

We're out the year in 2022, and then what type of macro and sales cycle assumptions, you're embedding into guidance.

Speaker 9: throughout the year in 2022, and then what type of macro and sales cycle assumptions you're embedding into Guidance.

Speaker 4: Right, yes, thank you. Let me start with sort of the first, the latter part of that question around the macro environment. You know, we just take a step back, we have seen now six quarters of increasing demand.

Right Yeah. Thank you, let me start with sort of that first.

And fair to the latter part of that question around the macro environment. We just take a step back we have seen now six quarters of increasing demand.

Speaker 4: in our space and heading into 2022, we believe that that demand is continuing in our conversations and the strengths that we see in our pipeline and are really positive on the demand curve that we see across our global market. Our guidance is boils down to a common leaders one being in yesterday's world we believe

In our space and.

Heading into 'twenty, two we believe that that that demand is continuing in our conversations and the strength that we see in our pipeline and our.

Are really positive on the demand curve that we see across our sort of global markets.

Our our guidance.

Speaker 4: Philosophy has always been practical, pragmatic, that we want to be able to execute within the range, within a high level of visibility, and then execute through the year on that guide. And we've done that similarly. I think your second question was about...

Our philosophy has always been practical.

Practical pragmatic that we want.

To be able to execute within the range within a high level of visibility and then execute through the year on that guide and we've done that similarly.

I think your second question was about.

The.

Speaker 4: the dollar-based net revenue retention rate.

Dollar based net revenue retention rate, which is actually accelerated.

Speaker 4: which is actually accelerated a bit quicker than we had even expected. We were really pleased with a strong fourth quarter. We got that uplift from record sales of our strategic products into our base.

A bit quicker than we had even expected we were really pleased with a strong fourth quarter and we got that uplift from.

Record sales of our strategic products into our base.

Speaker 4: record of user sales into our base and really strong momentum. Our view is that our investments in the customer engagement and success efforts and the account management team and the go-to-market team, our expansion of that product portfolio gives

Record of user sales into our base and really.

Strong momentum our view is that our investments in the customer engagement and success efforts and the account management team and the go to market team our expansion of that product portfolio gives us.

Speaker 4: more levers than we've ever had to raise the profile within our customers and drive that net dollar retention rate.

More levers than we've ever had to raise the profile within side, our customers and drive that net dollar retention rate and all of that continuing to be built on a.

Speaker 4: And all of that continuing to be built on a high retention rate of 98%, a renewal rate of 98%.

High retention rate, 98% renewal rate of 98% and so as we move forward. We our goal is to invest to drive that rate and.

Speaker 4: And so as we move forward, our goal is to invest to drive that rate. And prior to the pandemic, it was up above where we are. And we think we can continue to move it up.

Prior to the pandemic it was up above where we are and we think we can continue to move it up.

Awesome and just my follow up could you describe a bit about the demand environment or back office digital transformation compared to pre COVID-19 levels, specifically between mid market and enterprise customers.

Speaker 9: Awesome. And yeah, just my follow up, could you describe a bit about the demand environment for back office digital transformation compared to pre-COVID levels specifically between, you know, mid-market and enterprise customers?

Yes, it is strong.

Speaker 3: I believe in Q4 we were talking about it exceeding pandemic level.

I believe in Q4, we were talking about exceeding pandemic levels.

Speaker 3: And it's now been six quarters of an increasing demand environment. And I believe that is why we had a record quarter. And most all of our initiatives were very performant for us in the quarter, primarily because of the demand flowing through our systems. That's in mid-market.

Its now been six quarters of an increasing demand environment.

And.

I believe that is why we had.

A record quarter and most all of our initiatives, we're very performance for us in the quarter, primarily because of the demand flowing through our systems that's in mid market.

Speaker 3: where our messaging and our deliverables are resonating, as well as in larger organizations, and increasingly a large focus in the demand environment on things like intercompany, which, again, we're very excited about the incremental nature of this acquisition, as well as our opportunity ahead of us in 2022.

Where our messaging and our deliverables are resonating as well as in larger organizations and increasingly a large focus in the demand environment on things like Inter company, which again, we're very excited about the incremental nature of this acquisition as well as our opportunity ahead of us in 2022.

And if I could just sneak one last one in here.

Speaker 9: And if I could just sneak one last one in here. What has the reception been so far on AR automation? And what kind of market synergies are you seeing with the Romelia X?

What has the reception been so far on our automation.

And what kind of market synergies are you seeing with the Vermilya acquisition.

Yes, great question and I appreciate you asking that for some reason with all of the other excitement we forgot to touch on that very performance.

Speaker 3: Yeah, great question. I appreciate you asking that for some reason, with all of the other excitement. We forgot to touch on that very performant AR automation. It's in the strategic products performance that we had in Q4. It's well above the high end of the range that we usually expect, so we're pleased with the performance of that business in the year, especially in Q4. It's leading to new customer lands.

We're on a mission.

In the strategic products performance that we had in Q4.

Well above the high end of the range that we usually expect so we're pleased with the performance of that business in the year, especially in Q4.

It is leading to new customer lands.

Speaker 3: in mid-market and enterprise segments. It's also leading to the cross-sell that we're seeing within the Blackline customer install base. And it's also starting to drive pretty significant transaction volumes. And that's a great indication of the value it's creating for large organizations.

In mid market and enterprise segment, it's also leading to the cross sell that we're seeing within the black line customer install base and it's also starting to drive pretty significant transaction volumes and Thats, a great indication of the value it's creating for <unk>.

Large organizations.

Thank you very helpful.

Okay.

Speaker 1: Next question coming from the line of red bracelet with Piper Sandler, Yolanda.

Our next question coming from the line of Quinn.

Please go ahead.

With Piper Sandler your line is open.

Speaker 7: Hi, this is Marlon for Bread. Thanks for taking our questions here. So one thing that stood out here is a bit of a ramp up that we saw in your go-to-market and R&D spend during the quarter. Would be really helpful to get some more color on what kind of initiatives you're investing behind on those fronts, and then maybe what kind of, what the pace of investment we should expect going into the rest of this year. And then I'll have one follow-up.

Hi, This is Michael on for Brian Thanks for taking our questions here.

So one thing that stood out here is a bit of a ramp up that we sign your go to market and R&D spend during the quarter.

It would be really helpful to get some more color on what kind of initiatives you're investing behind on those fronts and then maybe what kind of what the pace of investment we should expect going into the rest of this year and then I'll have one follow up.

Right Yeah. Thanks for the question and Youre speaking of Q4, we ramped.

Speaker 4: Right, yeah, thanks for the question. And you're speaking of Q4, we ramped our R&D sales and marketing investments, a choice we made as we move through the year and into Q4 as we saw the demand increasing in all areas of the business and put some wood behind the arrow, so to speak.

Our R&D and sales and marketing investments a choice we made as we move through the year and into Q4 as we saw the demand increasing.

All areas of the business and.

Put some wood behind the arrow so to speak.

Yes.

And as we described that it is international capacity, if sales hiring and capacity around the globe, including in the U S and customer facing teams when the pandemic hit we were more inclined to hold our hiring in sales flat during the decline in demand and then.

Speaker 4: As we described it, it is international capacity. It's sales hiring and capacity around the globe, including in the US and customer facing teams.

Speaker 4: When the pandemic hit, we were more inclined to hold our hiring and sales flat during the decline in demand. And then as it started to pick up, we started to accelerate that investment out of Q3 and into Q4. And as we move into this year, we've talked about that being included in our guide. Additionally, we've made investments in the R&D efforts and into the Google Cloud migration. All of those on track and those investments will continue into 2022.

It started to pick up we started to accelerate that investment out.

Out of Q3 and into Q4, and then as we move into this year, we've talked about that being included in our guide. Additionally, we've made investments in the R&D efforts and into the Google Cloud migration all of those on track and those investments will continue into 2022.

Got it that's helpful and then as it relates to the revenue from strategic products.

Speaker 7: Yeah, that's helpful. And then as it relates to the revenue from strategic products, you know, it's quite notable to see it jump up to over 30% of the mix, and we're just wondering, is that a signal of a trend that we should expect to see continue going forward, or is that more of a deviation?

Quite notable to see it jump up to over 30% of the mix and we're just wondering is that a signal of a trend that we should expect to see continue going forward or is that more of a deviation from what you would expect to be the norm.

Speaker 4: what you'd expect to be the norm. Thanks. Right. Well, it's certainly a spike in the quarter when you have that kind of record performance so above the range when all three of the four products operated at record performance, AR, transaction matching, and intercompany. It is indicative of what we've been seeing in the demand environment that we've been discussing.

Right well, it's certainly a spike in the quarter. When you have that kind of record performance. So above the range when all three of the four products operated at record performance.

Our transaction matching and intercompany it.

It is indicative of what we've been seeing in the demand environment that we've been discussing.

Speaker 4: For the full year, the strategic products ranged, or were approximately 23% of our sales. That was up from the prior year up from the prior year. So we would expect on an annual basis that these will continue to increase. Those are the investments that we're making into our business and into that portfolio. But on a quarterly basis, it'll vary.

For the full year the strategic products ranged.

Proximately, 23% of our sales that was up from the prior year up from the prior year. So we would expect on an annual basis that these will continue to increase those are the investments that we're making.

Into our business and into that portfolio.

But on a quarterly basis that will vary.

Our next question coming from the line up and.

Speaker 1: The next question coming from Delana. I'm Jolynn Borra with J.P. Morgan.

And Julien <unk> with Jpmorgan Your line is open.

Speaker 3: Oh, great. Hey, um, that's wraps on the quarter.

Great.

Congrats on a quarter.

Speaker 10: Seems like a good booking squatter from what I hear. I wanted to dig in into the Microsoft partnership.

It seems like a good bookings quarter from what I hear I wanted to dig into the Microsoft partnership.

How should investors think about this this opportunity around the partnership.

Speaker 10: How should investors think about this opportunity around the project?

And any preliminary feedback that you're hearing from customers.

Speaker 10: and any preliminary feedback.

Speaker 3: It's a real recent announcement that we've made. We also announced a Google partnership as well. Very similar things. Co-selling arrangements primarily focused on mid-market and enterprise companies or the divisions and subsidiaries of enterprise companies. Microsoft continues to have great traction, brand and reach in that space.

Yes.

Real recent announcement that we've made we also announced a Google.

The partnership as well very similar things co selling arrangements primarily.

Focused on mid market and enterprise companies or the divisions and subsidiaries of enterprise companies. Microsoft continues to have great traction brand and reach in that space.

Speaker 3: It will also allow us to further develop technology synergies to allow our systems to better interoperate in a complex accounting technology landscape.

It will also allow us to further develop the technology synergies to allow our systems to better inter operate in a complex accounting technology landscape too way too early.

And I don't expect.

Speaker 3: Material impact in the next couple quarters, but I think it will be something that we should pay attention to as we round the year and our performance in sort of the Microsoft. Landscape.

Material.

<unk> in the next couple of quarters, but I think it'll be something that we should pay attention to as we round the year.

Yes.

Our performance in sort of the Microsoft ERP landscape.

Sure.

Speaker 10: Yep, understood. Okay, thank you for that. Another question on NRR.

Yeah understood. Okay. Thank you for that.

Another question on NR.

Speaker 10: We saw a nice sequential uptick. Could you maybe parse through that, was there any kind of a tailwind from the normalization of spectra?

We saw a nice sequential uptick.

Could you maybe parse through that was there any kind of a tailwind from the normalization of spend from existing customers and the second part of that is sold I guess youre familiar.

Speaker 10: And the second part to that is as you fold, I guess, the dremelia, since you have lapped it.

Since you have lapped it now is there anything to them.

Speaker 10: Is there anything to remember in terms of the effect of remilia being layered?

Remember in terms of the effect of Roumelia.

Being layered on top of an IRR.

Speaker 4: I'm sorry, I didn't hear that last question, but let me talk about the drivers of the retention rate.

I'm, sorry, I didn't hear that last question, but let me talk about the drivers of that.

Our retention rate.

Speaker 4: When when prior to the pandemic, we were at around 110 to 111 percent, and then the pandemic dropped that down. And for the last several quarters, we've had three quarters of sequential increases to get back to where we are.

Win win.

Prior to the pandemic, we were at or around 110% to 111% and then depend demick dropped that down and for the last several quarters. We've had three quarters of sequential increases to get back to where we are the drivers of that are the investments that we're making into our customer success and account management teams that are real.

Speaker 4: The drivers of that are the investments that we're making into our customer success and account management teams that are really focused on our customers' journey to uptake and buy into our strategic products.

<unk> focused on our customers' journey.

To uptake and buy into our strategic products and so that's been one of the great growth levers thats moving that needle. Another one is we've had a couple of record quarters of user expansion now also coming from global Rollouts within our customer base and then all of that on a.

Speaker 4: And so that's been one of the great growth levers that's moving that needle. Another one is we've had a couple record quarters of user expansion now, also coming from global rollouts within our customer base.

Speaker 4: And then all of that on a higher priced lever. Every year we have annual price increases within our customer base. And we also have a very high renewal rate.

Higher priced.

Never every year, we have annual price increases within our customer base and we also have a very high.

Renewal rate, particularly in the enterprise and so that's been the driver and will continue to be so with the strategic products also giving us some uplift.

Speaker 4: And so that's been the driver and will continue to be so with the strategic products also giving us some uplift.

Got it.

Speaker 10: Got it. The other part of the question that I think you misheard or didn't hear is is Ramilia wouldn't Ramilia kind of there into net retention going forward? And does does that have any good or bad effects?

The other part of the question that I think you misheard or didn't hear as familiar wouldn't reveal youre kind of there into net retention going forward and does that have any good or bad effect.

Yes, Great question, Yes, you are right I heard the first part of this that we in the fourth quarter, we lapped the Roumelia acquisition and so you can see that in the comp numbers year over year and Roumelia now.

Speaker 4: Oh yes, great question. Yeah, you were right. I heard the first part of this that we, in the fourth quarter, we lapped the Remilia acquisition. So you can see that in the comp numbers year over year.

Speaker 4: And Remilia now, or our Blackline's cash and AR automation solution, has become part of our strategic portfolio.

Our black lines cash in our automation solution has become part of our strategic portfolio and Thats being sold into our base and that gets calculated into that retention rate and is now driving it and we saw that in Q4 with a record performance from Roumelia. When we bought the company we talked about the <unk>.

Speaker 4: And that's being sold into our base, and that gets calculated into that retention rate and is now driving it. And we saw that in Q4 with the record performance from Remilia. When we bought the company, we talked about the impact and growth being in the second year and beyond, and that's pretty much what has happened.

<unk> growth being in the second year and beyond and that's pretty much what has happened.

Understood. Okay. Thank you.

Our next question coming from the line of Gucci Kennon with Bank of America. Your line is open.

Speaker 1: Our next question coming from the line of Koji Kena with Bank of America.

Hi, This is Don Mcgowan for Gucci, Thanks for taking our question.

Speaker 1: Hi, this is Tanika Awan for Koji. Thanks for taking our question. We were hoping to gain more color in the competitive landscape, what you're seeing out there, specifically as mid-market and international demand for finance and automation increases.

We will be thank Ian more color on the competitive landscape, what you're seeing out there specifically is mid market and international demand for finance and automation increases.

Thank you.

Thank you.

Speaker 3: Thank you. No material change in the competitive landscape that we see. We still continue to see some level of competitive takeaways that we're able to perform. But primarily, it's companies coming off unsustainable and manual or spreadsheet-based environments that they're working in.

No material change in the competitive landscape that we see we still continue to see.

Some level of competitive takeaways that we're able to perform.

But primarily it's companies coming off.

Unsustainable and manual or spreadsheet based environments that they are working in.

We continue to focus on expanding the capabilities of our platform.

Speaker 3: We continue to focus on expanding the capabilities of our platform, our capabilities, now our enhanced intercompany capabilities. We feel like Expands R mode gives us more capabilities than anyone else in our space. And although the market demand, I believe, is likely filling many boats, a lot of the value is accruing to us as the leader in the category.

Our capabilities are enhanced intercompany capabilities, we feel like expands our mode gives us more capability than anyone else in our space.

Although the market demand I believe is likely filling many boats allows the value was accruing to us as the leader in the category.

Thank you.

Thank you.

And our next question coming from the line of Rob Oliver with Baird. Your line is open.

Speaker 1: Next question coming from the line of Rob Oliver with Baird.

Hey, Thanks, Rob This is Ron <unk> on for Rob.

Speaker 11: Thanks. This is Shreya Nagan for R.O.B. I had a question on the mid-market. So the product map, I just wanted to get a sense of where it's really gaining traction, what's really going well, what's not, some color on that.

I have a question on just following up on the mid market. So the product mob.

Just wanted to get a sense of.

Where it's got a really gaining traction.

Going well.

Got it.

Some color on that.

Speaker 3: Yeah, mid-market was performance last year in the quarter. I believe a lot of it driven by great leadership and the efficacy of our approach, the modern accounting playbook. It's a well-worn path.

Yes.

Mid market was performed last year in the quarter I believe a lot of it driven by great leadership and the efficacy of our approach the modern accounting.

Hey, Buck, it's a well worn path.

Speaker 3: for controllers and CFOs of mid-market companies who want to drive not only visibility but automation into their accounting landscape.

Four controllers and Cfos of mid market companies, who want to drive not only visibility, but automation into their accounting landscape.

Speaker 3: It delivers a very quick time to value and very specific use cases that we believe are the best use cases to land a new customer with to put them on a path of continued expansion. It's pervasive in our mid-market sales.

<unk> delivers a very quick time to value and very specific use cases that we believe are the best use cases to land a new customer with to put them on a path of continued expansion.

Is pervasive in our mid market sales the.

Speaker 3: The delivery is being very well executed and we're getting great feedback from customers on the value it's creating for them.

The delivery.

Being very well executed and we're getting great feedback from customers on the value, it's creating for them.

Got it really helpful color and just one quick follow up on the S&P.

Speaker 11: Got it, really helpful. Thanks. And just one quick follow-up on the SAP. The SAP contribution came in at the high end of your typical range, it's 25%, 25% international, super strong. So just wanted to get a sense of...

Does that make arguments and gamma in the hiring of all grew up with a range of 12, 5% internationally with strong.

Just wanted to get a thumbs up.

Speaker 11: Regarding SAP, what are the kind of drivers around the pipeline? We are seeing some bigger budget type of deals kind of related to digital transformation as opposed to just accounting and so forth.

Regarding asset what are the drivers around the pipeline.

We are seeing.

<unk> seen some bigger budget type of deals.

Kind of related to digital transformation.

Most of just accounting and so forth.

Speaker 4: Sure. I can start off because I think part of your question was about the success, traction, and drivers in the SAP Solex program, which is now, in that reseller partnership with them, about three years old. And in Q4, we saw a continuation of a trend.

Sure I can start off because I think part of your question was about the success traction and drivers in the SAP sold X program, which is now in that reseller partnership with them about three years old and.

In Q4, we saw a continuation of a trend where we believe that.

Speaker 4: where we believe that SAP as a partner is really on trend and on traction with us. The programs from the RISE initiative a year ago to the efforts from our direct sales and customer training efforts have really paid off.

As a partner is really on trend and on traction with us.

Program from the rise initiative, a year ago to the efforts from our direct sales and customer training.

Efforts have really paid off.

Speaker 4: SAP Solex has continued to validate the partnership, which are large strategic global deals, sometimes in the markets where we operate and sometimes outside of those markets and bringing us customers that we would not have seen without them. We operate at a very high level.

<unk> has continued to validate the partnership which are large strategic global deals sometimes in the markets, where we operate and sometimes outside of those markets and bringing us customers that we.

Would not have seen without them, we operate at a very high level.

Speaker 4: most of the time in a digital transformation project. And that gives us not just a great strategic partnership but a great long-term lifetime value customer. So that fourth quarter with SAP has been one of our best and we believe this trend can continue into 2022.

Most of the time in a digital transformation project and that gives us not just a great strategic partnership, but a great long term lifetime value customer so that that far.

Fourth quarter with SAP has been one of our best and where we believe this.

Trend can continue into 2022.

Got it thanks, a lot I appreciate it.

I'm showing I'm not showing any further questions at this time I would now like to turn the call back over to Mr. Hoffman for any closing remarks.

Speaker 1: I'm not showing any further questions at this time. I would now like to send a call back over to Mr. Huffman for any closing remarks.

Speaker 3: I want to thank you all for attending today and your interest and support of Blackline. We're very pleased to share the results of a record quarter and our vision for the future and like to continue the precedents set by our founder and encourage you all who follow us to refer us to your portfolio clients so we can help give them a great experience. Thank you and we'll see you soon.

Well. Thank you all for attending today and your interest and support of Black line.

We're really pleased to show the results of our record quarter.

And our vision for the future and like to continue the.

Precedent set by our founder and encourage you all who follow us to refer us to your portfolio.

Portfolio clients. So we can help give them a great experience. Thank you and we'll see you soon.

Speaker 1: Thank you for your participation. You may now disconnect.

Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.

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Speaker 1: Ladies and gentlemen, thank you for standing by, and welcome to the Black Line Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press the star, then the one key on your touchtone telephone. If you call operating systems, please press star, then zero. I would now like to turn the conference over to your speaker host, Barry Hudson from the Blue Shirt Group. Please go ahead.

Ladies and gentlemen, thank you for standing by and welcome to the Black line fiscal year 2021 earnings conference call.

At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to pass a spot in the one key on your touched on telephone if you call offer assistance. Please press Star then zero I would now like turn the conference over to your Speaker host Barry Hutton from the Blue shirt group. Please go.

Ahead.

Good afternoon, and thank you for your participation today.

Speaker 2: Good afternoon and thank you for your participation today. With me on the call is Mark Huffman, Chief Executive Officer of Blackline and Mark Pardon, Chief Financial Officer.

With me on the call is Marc Hoffman, Chief Executive Officer of Black line, and Mark Partin, Chief Financial Officer.

Speaker 2: Before we get started, I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans, objectives, and expected performance, in particular, our guidance for Q1 and the full year 2022, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Before we get started I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans objectives and expected performance in particular, our guidance for Q1 and full year 2022, our forward looking statements within the meaning of the private.

Charities Litigation Reform Act of 1995.

These forward looking statements represent our outlook only as of the date of this call. While we believe any forward looking statements. We may make a reasonable actual results could differ materially because the statements are based on our current expectations as of today and are subject to risks and uncertainties, including those stated.

Speaker 2: These forward-looking statements represent our outlook only as of the date of this call. While we believe any forward-looking statements we may make are reasonable, actual results could differ materially because the statements are based on our current expectations as of today and are subject to risk and uncertainty.

Speaker 2: including those stated in our periodic reports filed with the Securities and Exchange

In our periodic reports filed with the Securities and Exchange Commission in particular, our Form 10-K and Form 10-Q .

Speaker 2: in particular are Form 10-K and Form 10-Q .

Speaker 2: We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by optimal law.

We do not undertake and expressly disclaim any obligation to update or alter our forward looking statements, whether as a result of new information future events or otherwise, except as required by applicable law.

Speaker 2: Also, unless otherwise stated, all financial measures disclosed on this call will be non-

Also unless otherwise stated all financial measures disclosed on this call will be non-GAAP .

Speaker 2: A discussion of why we use non-GAAP financial measures and information regarding reconciliations of our GAAP versus non-GAAP results is currently available in our press release, which may be found on our investor relations website at investors.blackline.com or on our form 8K filed with the SEC today. Now I will turn the call over to Mark Huffman to begin.

A discussion of why we use non-GAAP financial measures and information regarding reconciliation of our GAAP versus non-GAAP results is currently available in our press release, which may be found on our Investor Relations website at investors Dot Black line Dot com or on our form 8-K filed.

With the SEC today.

Now I will turn the call over to Marc Hoffman to begin.

Good afternoon, everyone and thank you for joining us today.

I'm excited to discuss our record performance in Q4, and 2021 and review our plans for 2022.

Speaker 3: I'm excited to discuss our record performance in Q4 and 2021 and review our plans for 2022.

Speaker 3: I'm very pleased with our Q4 results, which represented a strong close to a year of increasing demand and consistent execution from the team.

I'm very pleased with our Q4 results, which represented a strong close to a year of increasing demand and consistent execution from the team.

Speaker 3: Our Q4 performance came in ahead of our expectations as we earned total revenue of $115 million, up 20% over the prior year.

Our Q4 performance came in ahead of our expectations.

We earned total revenue of $115 million up 20% over the prior year.

On a macro level, we continue to see strong demand across global markets from all customer segments as both new and existing customers continued to invest in back office digital transformation.

Speaker 3: On a macro level, we continue to see strong demand across global markets from all customer segments as both new and existing customers continue to invest in back office digital transformation.

Speaker 3: We see a significant opportunity in front of us and plan to invest in the long-term growth of our...

We see a significant opportunity in front of us and plan to invest in our long term growth of our business.

We previously outlined three areas of focus to better serve our customers and drive our growth in.

Speaker 3: We previously outlined three areas of focus to better serve our customers and drive our growth. In Q4, we continue to execute against these three priorities. Customer.

In Q4, we continued to execute against these three priorities.

Customer engagement and success platform innovation and expansion and growing our international presence.

Speaker 3: platform innovation and expansion, and growing our international presence.

A few highlights from the quarter include.

Speaker 3: Our renewal rate finished the year strong at 98.

Our renewal rate finished the year strong at 98% and our net dollar retention rate continued to decline to 109%.

Speaker 3: and our net dollar retention rate continued to climb to 109%.

We were pleased with this result.

Speaker 3: The increase was driven largely by the strong levels of demand from our existing customers for our strategic products, our investments in customer success and...

The increase was driven largely by the strong levels of demand from our existing customers for our strategic products.

Our investments in customer success.

And execution from our go to market teams.

Our strategic products, which include accounts receivable automation intercompany hub and transaction matching finished at 32% of total sales for the quarter, which was a new record and well above our expected range.

Speaker 3: Our strategic products, which include accounts receivable automation, intercompany hub and transaction matching finished at 32% of total sales for the quarter, which was a new record and well above our expectations.

Sales from our SAP <unk> partnership finished the year with one of the strongest quarter since its launch in 2018.

Speaker 3: Sales from our SAP SOLX partnership finished the year with one of the strongest quarters since its launch in 2018.

At the end of 'twenty to 'twenty one are par.

Speaker 3: At the end of 2021, our SAP partnership revenue made up 25% of total revenue.

Partnership revenue made up 25% of total revenue.

We are pleased with the partnership's pace of ramp and its momentum going into 2022.

Speaker 3: We are pleased with the partnership's pace of ramp and its momentum going into 2022.

Speaker 3: Sales in EMEA and APAC continued to help drive our revenue growth in the quarter.

Sales in EMEA and APAC continued to help drive our revenue growth in the quarter.

As of year end 2021 International revenue reached 30% of our total business up from 26% a year ago.

Speaker 3: As of year-end 2021, international revenue reached 30% of our total business, up from 26% a year ago.

Speaker 3: This increased share resulted from accelerated investment in our global partner ecosystem and go to market capacity.

This increased share resulted from accelerated investment in our global partner ecosystem and go to market capacity.

Speaker 3: Additionally, the SAP partnership and the Remilia acquisition we completed in late 2020 helped us further penetrate both new and existing global markets.

Additionally, the SAP partnership and the <unk> acquisition, we completed in late 2020 helped us further penetrate both new and existing global markets.

Speaker 3: Some examples of international select and accounts receivable deals include the following.

Some examples of international select and accounts receivable deals include the following.

Speaker 3: In the fourth quarter, we added a large multinational beverage company.

In the fourth quarter, we added a large multinational beverage company in EMEA through the <unk> partnership.

Speaker 3: They were looking to Blackline to help them automate their manual spreadsheet-based accounting processes and remove the complexity in managing global audit.

They were looking to black line to help them automate their manual spreadsheet based accounting processes and remove complexity in managing global audit compliance as select steel also replace a competitor solution.

Speaker 3: This select steel also replaced a competitor solution.

Another exciting fourth quarter deal came from an existing enterprise customer.

Speaker 3: Another exciting fourth quarter deal came from an existing enterprise.

Speaker 3: This global multi-billion dollar media and advertising conglomerate has been a BlackLine customer since 2013 and has leveraged the financial close to help accelerate their financial close and automate their journal entry process.

This global multibillion dollar media and advertising conglomerate has been a black cloud customer since 2013 and has leveraged the financial close suite to help accelerate their financial close and automate their journal entry process.

Speaker 3: This quarter, they scaled their Blackline platform deployment by adding the cache application and AR intelligence to provide much needed aggregated visibility across business units and improve unapplied cache.

This quarter they scaled their black line platform deployment by adding the cash application and AAR intelligence to provide much needed aggregated visibility across business units and improve unemployed cash levels.

Today, we provide our customers with more capabilities than ever before.

Speaker 3: Today, we provide our customers with more capabilities than ever before.

Speaker 3: Our 2021 product priorities included platform modernization and scale public cloud deployment.

Our 2021 product priorities included platform modernization and scale public cloud deployment.

Speaker 3: We are in a leadership position in our market, and we continue to have a heightened focus on measures of operational excellence such as controls, quality, security, and up to speed.

We are in a leadership position in our market and we continue to have a heightened focus on measures of operational excellence, such as controls quality security and uptime.

In 2021, we were also focused on bringing new products and functionality in the market such as an upgraded user interface a mobile user experience that has driven more journals adoption and a complete suite of HR solutions just to name a few.

Speaker 3: 2021, we were also focused on bringing new products and functionality to market, such as an upgraded user interface, a mobile user experience that has driven more journals adoption, and a complete suite of AR solutions, just to name a few.

We believe this pace of customer focused innovation is why our customers view us as an indispensable partner to the controller's office.

Speaker 3: We believe this pace of customer-focused innovation is why our customers view us as an indispensable partner to the controllers office.

Speaker 3: We've made platform enhancements and recently closed an important strategic acquisition that will offer expanded solutions to our existing financial operations management platform.

We've made platform enhancements and recently closed an important strategic acquisition that will offer expanded solutions to our existing financial operations management platform.

During the quarter, we announced our enhanced accounts receivable automation platform. This suite provides traditional cash management automation, along with credit and risk management collections management dispute and deductions management as well as our intelligence.

Speaker 3: During the quarter, we announced our enhanced accounts receivable automation.

Speaker 3: This suite provides traditional cash management automation, along with credit and risk management, collections management, dispute and deductions management, as well as AR intelligence.

As an example of the scale of the platform, we have a global logistics company that apply 8 million payments, representing six $2 billion in 2021 and is projected to apply 22 million payments by the end of this year.

Speaker 3: As an example of the scale of the platform, we have a global logistics company that apply 8 million payments representing $6.2 billion in 2021 and is projected to apply 22 million payments by the end of this year.

The.

Speaker 3: The relevance and timeliness of accounts receivable automation drew record demand in our marketing events and sales pipeline, which contributed to the strong quarter in AR customer sales.

Vince and timeliness of accounts receivable automation drew record demand in our marketing events and sales pipeline, which contributed to the strong quarter and a customer sales.

Speaker 3: In January , we announced our acquisition of 4Q, which represents another important expansion of our platform capability.

In January we announced our acquisition of <unk>, which represents another important expansion of our platform capabilities.

Speaker 3: With 4Q, our expanded intercompany financial management product will help multinational companies reduce intercompany complexity and design and govern global tax strategies. I'll discuss this acquisition.

With <unk>, our expanded intercompany financial management product will help multinational companies reduced intercompany complexity and design and govern global tax strategies I will discuss this acquisition more in just a moment.

As part of further developing our financial operations management platform. We have also formed strategic partnerships to help companies accelerate their finance transformation.

Speaker 3: As part of further developing our financial operations management

Speaker 3: We've also formed strategic partnerships to help companies accelerate their finance transformation.

Speaker 3: Through our agreement with Microsoft, we are collaborating on joint selling acts.

Through our agreement with Microsoft we are collaborating on joint selling actions and solutions integrations to help mid market and enterprise sized customers gain control over critical areas such as their financial close accounts receivable and intercompany accounting processes.

Speaker 3: solutions integrations to help mid-market and enterprise-size customers gain control over critical areas such as their financial close, accounts receivable, and intercompany accounting processes.

Speaker 3: This partnership will offer a better customer experience with enhanced connectivity and integration.

This partnership will offer a better customer experience with enhanced connectivity and integration.

Speaker 3: And recently, we announced an expansion of our partnership with Google to conduct joint selling and go-to-market activities designed to accelerate the customer journey to digital finance transformation in modern accounts.

And recently, we announced an expansion of our partnership with Google to conduct joint selling and go to market activities designed to accelerate the customer journey to digital finance transformation and modern accounting.

Speaker 3: Notably, we believe this agreement will better enable our customers to deploy Blackline solutions built on Google's secure cloud platform.

Notably we believe this agreement will better enable our customers to deploy black line solutions built on Google secure cloud platform.

As a result customers will be able to easily integrate data and automate traditional manual accounting processes and offer more capacity to free up time and resources to do more strategic work.

Speaker 3: As a result, customers will be able to easily integrate data and automate traditional manual accounting processes and offer more capacity to free up time and resources to do more strategic.

Last year, we continue to emphasize our commitment to customer success.

Speaker 3: Last year, we continue to emphasize our commitment to customer service.

Speaker 3: During the year, we hosted several events and activities for all of our 3,800 plus...

During the year, we hosted several events and activities for all of our 3800 plus customers.

Speaker 3: including some of the largest enterprises in the world, to guide them on their unique path to financial transformation.

Including some of the largest enterprises in the world to guide them on their unique path to financial transformation.

Speaker 3: Our subject matter experts with deep accounting and Blackline expertise offer leading practices to adopt modern accounting.

Our subject matter experts with deep accounting and black line expertise offer leading practices to adopt modern accounting.

These experts meet customers, where they are in their journey and provide a path to greater adoption and automation. This.

Speaker 3: These experts meet customers where they are in their journey and provide a path to greater adoption and automation.

Speaker 3: This is done through one-to-one coaching sessions and one-to-many optimization workshop.

This is done through one to one coaching session and one to many optimization workshops.

Speaker 3: Both methods help customers to automate end-to-end accounting processes, like amortization, accruals, subledgers, suspension.

Both methods help customers to automate end to end accounting processes like amortization accruals.

Sublet yours suspense in clearing just to name a few.

Speaker 3: Our customer success program ensures a greater platform adoption, resulting in higher rates of retention and expanded use of our strategic products.

Our customer success program matures and greater platform adoption, resulting in higher rates of retention and expanded use of our strategic products.

Speaker 3: One of our greatest opportunities to focus on customers is through our annual user conference, Beyond the Black, which we hosted in November .

One of our greatest opportunities to focus on customers is through our annual user conference beyond the black which we hosted in November .

Speaker 3: This conference provided three days of content and educational session to further prove the power of

This conference provided three days of content and educational session to further prove the power of our platform and customer success.

Speaker 3: This year's event had significant customer engagement from over 19,000 virtual.

This year's event had significant customer engagement from over 19000 virtual attendees, representing over 5700 organizations, both prospects and current customers.

Speaker 3: representing over 5,700 organizations, both prospects and current customers.

Of note during the conference was the level of participation and interest in large digital transformation driven by our product vision for financial operations management, which resonated with our customers and prospects.

Speaker 3: Of note during the conference was a level of participation and interest in large digital transformation driven by our product vision for financial operations management, which resonated with our customers and process.

Speaker 3: And we were very excited to see the level of increased customer interest in our intercompany financial management.

And we were very excited to see the level of increased customer interest in our intercompany financial management session, which drew thousands of attendees with four times more individuals than the previous year.

Speaker 3: which drew thousands of attendees with four times more individuals than the previous year.

Intercompany financial management is an especially attractive market for black line, the global trend, increasing M&A trade and involving tax regulations create large volumes of complex intercompany transaction.

Speaker 3: Inter-company financial management is an especially attractive market for blacks.

Speaker 3: The global trends increasing M&A, trade and involving tax regulations create large volumes of complex intercompany transactions.

Speaker 3: We launched our intercompany hub solution over five years ago to provide valuable solutions in this area.

We launched our intercompany hub solution over five years ago to provide valuable solutions in this area.

Yet we've only just begun to reach the total addressable market and intercompany financial management.

Speaker 3: Yet we've only just begun to reach the total addressable market in intercompany financial management level.

Speaker 3: Over the past several years, the market has continued to evolve, and in the recent quarters, we've seen momentum building in this part of our business.

Over the past several years the market has continued to evolve and in the recent quarters, we've seen momentum building in this part of our business.

Speaker 3: Our recent acquisition of 4Q, which we announced January 27th, is a great example of our commitment to expanding our platform and investing in the long-term growth.

Our recent acquisition of <unk>, which we announced January 27 is a great example of our commitment to expanding our platform and investing in the long term growth.

I am very excited about this deal and what it means for black lines future.

Speaker 3: I'm very excited about this deal and what it means for Blackline.

Speaker 3: The acquisition of 4Q builds on our recent success and is complementary to our existing capabilities.

The acquisition of <unk> builds on our recent success and is complementary to our existing capabilities at.

Speaker 3: It expands our team by adding over 130 employees to the Blackline family and increases our value to the broader office of the CFO .

It expands our team by adding over 130 employees to the Black line family and increases our value to the broader office of the CFO .

By integrating our existing solutions with <unk> capabilities, we will further reduce complexity and deliver several benefits to customers, including optum.

Speaker 3: By integrating our existing solutions with 4Q's capabilities, we will further reduce complexity and deliver several benefits to customers, including optimized tax and transfer price modeling, reduced foreign currency risk, enhanced regulatory compliance, rapid...

Optimize tax and transfer price modeling.

Reduced foreign currency risk.

Enhanced regulatory compliance.

Rapid M&A integration.

And our unmatched domain expertise.

Speaker 3: Since announcing the deal, we've received favorable feedback from our customers that are looking for additional solutions to resolve their intercompany challenges.

Since announcing the deal we have received favorable feedback from our customers that are looking for additional solutions to resolve their intercompany challenges.

As I look back on 2021, I am pleased with the progress we've made on our strategic initiatives as.

Speaker 3: As I look back on 2021, I'm pleased with the progress we've made on our strategic initiative.

As we move into 2022 Im excited about the recent trends in the market and I'm very confident in our team our ability to execute and our positioning.

Speaker 3: As we move into 2022, I'm excited about the recent trends in the market, and I'm very confident in our team, our ability to execute and our positioning. We are in the early innings of 2020, and we are in the early innings of 2020.

We are in the early innings of a large growing market and.

Speaker 3: and we're seeing the demand for digital transformation across the back office continue to expand. Our focus will be to continue to serve our customers.

And we're seeing the demand for digital transformation across the back office continue to expand.

Our focus will be to continue to serve our customers.

Celebrate growth in our combined markets and scale the business to support our expanding reach.

Speaker 3: scale the business to support our expanding.

Speaker 3: We remain committed to executing our multi-year strategy to drive long-term, sustainable growth and advancing Black Line's position as the market leads.

We remain committed to executing our multiyear strategy to drive long term sustainable growth and advancing black lines position.

As the market leader.

Speaker 3: I'll now turn it over to Mark Parton to discuss our financial performance and our financial outlook for 2022.

I'll now turn it over to Mark to discuss our financial performance and our financial outlook for 2022.

Thank you Mark and good afternoon, everyone.

As Mark mentioned, we are very pleased with how we finished the year.

Speaker 4: As Mark mentioned, we are very pleased with how we finished the year.

2021, what are your solid performance and we feel good about our opportunity for 2022 and beyond.

Speaker 4: 2021 was a year of solid performance and we feel good about our opportunity for 2022 and beyond.

Speaker 4: During Q4, we continued to execute on our business plan and generated strong results across key financial and business metrics.

During Q4, we continued to execute on our business plan and generated strong results across key financial and business metrics.

Speaker 4: For the full year 2021, total revenue grew 21% to $426 million.

For the full year 2021.

Total revenue grew 21% to $426 million.

Speaker 4: In the fourth quarter, total revenue grew to $115 million, representing 20% growth, compared to the fourth quarter of 2020.

In the fourth quarter total revenue grew to $115 million, representing 20% growth.

Compared to the fourth quarter of 2020.

Speaker 4: led by sustained success in our international markets, our continued ability to close large and strategic deals.

Led by sustained success in our international markets, our continued ability to close large and strategic deal.

Speaker 4: the ongoing productivity of our partners, and further expansion of our existing customers.

The ongoing productivity of our partners and further expansion of our existing customers.

Speaker 4: In addition to Mark's comments earlier, highlights for the quarter include

In addition to Mark's comments earlier highlights for the quarter include.

Speaker 4: We added 121 net new customers in the quarter, bringing our total to 3,825 new customers that continue to adopt our solutions to reduce their operational challenges.

We added 121 net new customers in the quarter.

Bringing our total to 3825.

New customers that continue to adopt our solution.

Their operational challenges.

Speaker 4: We showed strength in the enterprise market by signing a record number of large deals with the help of our partners and by leveraging our strategic product portfolio.

We showed strength in the enterprise market by signing a record number of large deals but.

But to help our partners by leveraging our strategic product portfolio.

Partners were involved in 88% of large deals in the quarter showcasing the power of our valuable partner ecosystem.

Speaker 4: Partners were involved in 88% of large deals in the quarter, showcasing the power of our valuable partner ecosystem.

And revenue from our SAP partnership totaled 25% of revenue up from 24% in the prior year, maintaining the positive trend of this relationship.

Speaker 4: and revenue from our SAP partnership totaled 25% of revenue, up from 24% in the prior year, maintaining the positive trend of this relationship.

In Q4, non-GAAP overall gross margin was 78% and subscription gross margin was 82%.

Speaker 4: In Q4, non-GAAP overall gross margin was 78% and subscription gross margin was 82%.

Speaker 4: For the full year, total gross margin was 80% and subscription gross margins were 84%, which is within our targeted range and reflects the ongoing transition of our customers to the Google Cloud and increase investments and ramping our customer service and success activity.

For the full year total gross margin was 80% and subscription gross margins were 84%.

Within our targeted range and reflects the ongoing transition of our customers to the Google cloud.

And increased investments in ramping our customer service and success activity.

In Q4, we generated non-GAAP net income attributable to black line of $4 8 million.

Speaker 4: In 2-4, we generated non-GAAP net income attributable to black line of $4.8 million.

We generated $22 1 million in operating cash flow and $15 3 million and free cash flow.

Speaker 4: We generated $22.1 million in operating cash flow and $15.3 million in free cash flow.

Net income was impacted by our ramp and targeted investments as well as the one time charge related to the cancellation of sales and marketing events, resulting from the pandemic.

Speaker 4: Net income was impacted by our ramp in targeted investments, as well as a one-time charge related to the cancellation of sales and marketing events resulting from the pandemic.

We finished the year with approximately $1 2 billion in cash equivalents and marketable securities.

Speaker 4: We finished the year with approximately $1.2 billion in cash equivalents and marketable security.

Over the past several years.

Speaker 4: Over the past several years, we have consistently improved our net income, achieving operating leverage across all areas of our business.

We have consistently improved our net income achieving operating leverage across all areas of our business in.

In 2021, we earned a non-GAAP net income margin above, 8%, which was an increase from 1% in 2017.

Speaker 4: In 2021, we earned a non-GAAP net income margin above 8%, which was an increase from 1% in 2017.

We achieved this while increasing strategic investments in our customer success.

Speaker 4: We achieved this while increasing strategic investments in our customer success, technology, product roadmap, and integrating the Remilia acquisition.

Technology <unk>.

<unk> roadmap and integrating the <unk> acquisition.

During 2021, we saw the demand environment for digital transformation across the office of the CFO continued to accelerate and build momentum.

Speaker 4: During 2021, we saw the demand environment for digital transformation across the office of the CFO continue to accelerate and build momentum.

This favorable market environment offers us a unique opportunity to invest.

Speaker 4: This favorable market environment offers us a unique opportunity to invest in accelerating our long-term revenue growth rate and advancing our leadership position.

<unk> and accelerating our long term revenue growth rate and advancing our leadership position.

Speaker 4: Given the market opportunity in front of us, we intend to make targeted investments in our go-to-market team, our public cloud infrastructure, and the integration of our recent acquisition.

Given the market opportunity in front of US we intend to make targeted investments in our go to market team.

Our public cloud infrastructure and the integration of our recent acquisition.

Speaker 4: The impact of 4Q to overall revenue in 2022 is not expected to be material, but it will be dilutive to our overall margins in the year as we ramp our investments to support the integration.

The impact of <unk> overall revenue in 2022, if not expect it to be material, but it will be dilutive to our overall margins in the year as we ramp our investments to support the integration.

Speaker 4: We are expecting to see a return of travel and in-person events in 2022. And while this remains uncertain in our overall business globally, modeling the cost at this point gives us appropriate flexibility as the year develops.

We are expecting to see a return of travel and in person events in 2022, and while this remains uncertain and our overall business globally modeling the cost at this point gives us appropriate flexibility as the year develops the.

Speaker 4: The Q1 net loss guidance includes the ramping of investments, the normal step up in annual operating expenses driven by salary increases, payroll tax reset, and annual kickoff events.

Q1 net loss guidance includes the ramping of investments the normal step up in annual operating expenses driven by salary increases payroll tax reset and annual kickoff events plus the dilutive impact from the <unk> acquisition and its related cost.

Speaker 4: plus the dilutive impact from the 4Q acquisition and its related costs.

We expect to generate operating leverage and additional margin throughout the year as we execute on the topline.

Speaker 4: We expect to generate operating leverage and additional margin throughout the year as we execute on the top line.

Turning now to guidance.

Speaker 4: Our expectations for the first quarter of 2022 include.

Our expectations for the first quarter of 2022 include.

Total GAAP revenue is expected to be in the range of $119 million to $120 million.

Speaker 4: Total GAAP revenue is expected to be in the range of $119 to $120 million.

Speaker 4: representing 20 to 21 percent growth compared to the first quarter of 2021.

Representing 20% to 21% growth compared to the first quarter of 2021.

Speaker 4: On the bottom line, we expect to report non-GAAP net loss attributable to Blackline in the range of negative six to negative four million dollars or a loss of ten to seven cents on a per share basis.

On the bottom line, we expect to report non-GAAP net loss attributable to Black line in the range of negative six to negative $4 million or a loss of 10 to seven.

On a per share basis.

Our share count will be approximately $59 2 million diluted weighted average shares.

Speaker 4: Our share count will be approximately 59.2 million diluted weighted average share.

For the full year 2022, we expect total GAAP revenue in the range of $520 to $525 million.

Speaker 4: For the full year 2022, we expect total gap revenue in the range of $520 to $525 million, representing 22 to 23% growth compared to the full year 2021.

Adding 22% to 23% growth compared to the full year 2021.

Speaker 4: On the bottom line, we expect to report non-GAAP net income attributable to Blackline in the range of $5 to $7 million, or $0.08 to $0.11 on a per share basis.

On the bottom line, we expect to report non-GAAP net income attributable to Black line in the range of $5 million to $7 million.

Or 8% to 11 on a per share basis.

Speaker 4: Our share count will be approximately 63 million diluted weighted average share.

Share count will be approximately 63 million diluted weighted average shares.

Speaker 4: In closing, I want to thank all our Black Line employees for their effort and hard work in 2021.

In closing I want to thank all our black line employees for their effort and hard work in 2021.

Speaker 4: We had a strong finish to the year and continue to see healthy customer demand as more and more companies scale and invest in their back office digital transformation.

We had a strong finish to the year and continue to see healthy customer demand as more and more companies scale and invest in their back office digital transformation.

We're excited to continue to support customers in that journey by expanding our platform, but our <unk> acquisition as.

Speaker 4: We're excited to continue to support customers in that journey by expanding our platform with our 4Q acquisition.

Speaker 4: As we head into 2022, our strong customer demand and platform momentum gives us the confidence to continue to invest strategically in our long-term growth as we build on our innovation, our market leadership, and pursue the attractive growth opportunity in front of us.

As we head into 2022, our strong customer demand and platform momentum gives us the confidence to continue to invest strategically in our long term growth as we build on our our innovation our market leadership and pursue the attractive growth opportunity in front of us.

Speaker 4: Now I'll ask the operator to open the discussion and we can take your questions.

Now I'll ask the operator to open the discussion and we can take your questions.

Thank you, ladies and gentlemen to ask a question at this time you wanted to ask you will need to press. The Star then the one key on your Touchtone telephone.

Speaker 1: Thank you ladies and gentlemen. To ask a question at this time, you will need to press the start and the one key on your touchtone telephone. To withdraw your question, press the start and the one key on your touchtone telephone.

To withdraw your question press the pound key.

Now first question coming from the line of Matt Stotler with William Blair. Your line is open.

Speaker 1: Now first question coming from the lineup. Matt Spadlin with William Blair. You want to stop it.

Speaker 5: Hey, thanks for taking the questions. I guess, you know, first we'd like to maybe dig into the 4Q acquisition a little bit more. You know, obviously, you know, very interesting in terms of the, you know, kind of specific additive capabilities that you mentioned. But we'd like to maybe, you know, better understand how it complements what you have, you know, with ICH and maybe some of the, you know, kind of key things that are additive there or if it's meant to, you know, replace some things that you had previously offered ICH.

Hi, Thanks for taking the questions.

Yes, first I would like to maybe dig into the <unk> acquisition, a little bit more.

Obviously, a very interesting in terms of the kind of specifics.

Additive capabilities that you mentioned.

I'd like to maybe better understand how it complements what you have.

With isolation and maybe some of the kind of key things that are additive there or if it's meant to replace some things that you had previously offered IC H.

Speaker 5: And then, obviously with ICH the...

Then.

Obviously with IC HD.

Speaker 5: The rent there has been relatively gradual over time, you know, high value in terms of, you know, value for customers, but just given the sales process, the number of stakeholders, etc., has been kind of gradual to layer in. And how would you expect 4Q to contribute going forward?

The ramp there has been relatively gradual over time.

High value in terms of.

Value add for customers, but just given the sales process the number of stakeholders et cetera. It's.

It's been kind of gradual to where and how would you expect <unk> to contribute going forward.

Yes, thanks for the question, Matt I'll start.

Speaker 3: Yeah. Thanks for the question, Matt. I'll start maybe broadly.

Maybe broadly.

Intercompany accounting.

Speaker 3: Intercompany accounting, we believe that the large space, TAM, is large, it's strategic to us, and it's a great greenfield, hence our investment several years ago that you referenced in intercompany hub. Those transactions are complex, and they go on in some of the largest, most complex accounting landscapes in the world, and a lot of it is still done very, very manually.

We believe there is a large.

Space Tam is large it's strategic to us and it's a great greenfield, hence our investment several years ago that you referenced an intercompany hub.

These transactions are complex and they go on in some of the largest most complex.

Accounting landscapes in the world and a lot of it is still done very very manually.

Speaker 3: to really simplify the sort of additive value of it.

To really simplify the sort of additive value of it.

Black line.

Speaker 3: Blackline, very closely coupled to what we do in the financial close, helped identify and then remediate the transactions that were, let's call them, out of balance or broken that created an intercompany accounting.

Very closely coupled to what we do in the financial close helped to identify and then remediate the transactions that were let's call them out of balance or broken.

We've got created an intercompany accounting.

Yes.

<unk>.

Speaker 3: 4Q started at the very opposite end of the challenge in the creation and planning side of transactions. So as you think about this complex landscape that has significant tax implications, significant foreign exchange implications, transfer pricing and regulatory concerns.

Started at the very opposite ends of the challenge in the creation and planning side of transactions. So as you think about this complex landscape that has significant tax implications significant foreign exchange implications transfer pricing and regulatory concerns.

Speaker 3: They are upstream focusing on the planning and creation of transactions that flow through the entire accounting process. We were really focused on identifying those transactions, remediating them, and completing the close. And we think these two things are highly complementary, and our customers will be the significant beneficiaries of this in the future.

<unk>, our upstream focusing on the planning and creation of transactions that flow through the entire accounting process. We were really focused on identifying those transactions re mediating and then completing the close and we think these two things are.

Highly complementary and our customers will be the significant beneficiaries of this in the future.

That's super helpful and I appreciate the color there.

Speaker 5: That's super helpful and I appreciate the color there. And maybe one for other Mark on gross margins.

One for other Mark on gross margins.

Subscription gross margins took another little bit of a step down in the quarter I know, there's a bunch of things going on from an investment perspective, especially with the move to <unk>.

Speaker 5: Subscription growth margins took another, you know, a little bit of a step down in the quarter. I know there's a bunch of things going off from an investment perspective, especially with the move to GCP and all that. Maybe just touch on, just refresh us on some of the dynamics there, get an update, and then how we should think about that as we move through 2022.

<unk>.

Maybe just touch on just refresh us on some of the dynamics, they're getting an update and then how we should think about that as we move through 2022.

Yeah, yeah. Thanks.

Our gross margin finished the quarter at 78% has been trending in that direction related to two things we've been talking about it for a few quarters and thats related to our investment in the Google Cloud. We believe that was about a 1% to two point impact and then similarly investing in our customer service and succeed.

Speaker 4: 78% has been trending in that direction related to two things. We've been talking about it for a few quarters and that's related to our investment in the Google Cloud. We believe that was about a one to two point impact. And then similarly investing in our customer service and success team, ramping that effort as our company and our product mix moves forward. We think that those were really well received investments with our customer base.

<unk> team ramping that effort.

As our company and our product mix.

Moves forward, we think that those were really well received investments with our customer base.

Speaker 4: In the Google Cloud migration, we think that's another 18 to 24 months. We'll see the impact of that in 22, similar to where we finished up the year. And longer term confidence in our ability to return back to a gross margin in the 80 plus percent. Very helpful.

Google Cloud migration, we think Thats. Another 18 to 24 months, we will see the impact of that in 'twenty, two similar to where we finished up the year.

And longer term confidence in our ability to return back to.

Most margin in the 80 plus percent.

Very helpful. Thanks again.

Youre welcome.

Yes.

Speaker 1: Our next question coming from the line up. Mad Bentley with BTI G. Your line is open.

Our next question coming from the line up.

Rob Fenwick with BTG Your line is open.

Speaker 6: Yeah, thanks for taking the question. I guess first, Mark Partin, can you help us understand kind of what the revenue contribution is for 4Q that you're building into the guidance, and then how much of a, I guess, compression on margins is that expected to have over the year?

Yes, thanks for taking the question.

I guess first.

Pardon can you help us understand kind of what the revenue contribution is four <unk> that you are building into.

The guidance and then how much of a.

I guess a compression of margins is that expected to have over the year.

Yeah.

Speaker 4: Yeah, so I'll start by saying that our guidance philosophy for 2022 is very consistent with what we've done in the past. We feel confident that we can execute in that range in 2022. The impact of 4Q, the transaction was closed in January . We'll start to see it as early as Q1 and through this year. To revenue, we estimate included in our guidance between one and two points.

So I'll start by saying that our guidance philosophy for 'twenty two is very consistent with what we've done in the past we feel confident that we can execute in that range in 'twenty two.

The impact of <unk>. The transaction was closed in January we'll start to see it as early as Q1 and through this year.

Impact to revenue we estimate included in our guidance between one and two points.

And at the bottom line it will be dilutive to the overall company for the full year as we invest and integrate the business.

Speaker 4: And at the bottom line, it will be dilutive to the overall company for the full year as we invest and integrate the business.

Speaker 6: Okay, helpful. And then as you look at the international growth, I know, you know, you've made a lot of investments, both with direct go to market team and expanding a lot of the partnerships there.

Okay helpful. And then as you look at the international growth I know.

You've made a lot of investments both with direct go to market team and expanding all of the partnerships there.

Speaker 6: Where do you feel like you're at in terms of the overall investment cycle? Are we at a point now where the returns from the last couple years sort of self-fund the additional growth going forward? Are we still in maybe a final investment year to the point of continuing to ramp up that growth and continuing to see the success you saw in the fourth quarter?

Where do you feel like Youre at in terms of.

The overall investment cycle are we at a point now where the returns from the last couple of years sort of self fund the additional.

Growth going forward.

Are we still in maybe a final investment year.

To the point of continuing to ramp up that growth and continuing to see the success you saw in the fourth quarter.

Speaker 4: Yeah, international is one of the areas that we've been really excited about for the last 12 to 18 months coming out of the pandemic. It lagged the US slightly, but then has really started to get back to the pre-pandemic levels. It's a growth lever that's been driving our overall growth.

Yes International is one of the areas that we've been really excited about for the last 12 to 18 months coming out of the pandemic hit lagged the U S. Slightly but then has really started to get back to the pre pandemic levels. It is a growth lever that's been driving our overall growth major markets in.

Speaker 4: major markets in EMEA and APAC where we operate today, consistent with our partner ecosystem like SAP and some of the consultants that are helping drive business in those markets.

In APAC, where we operate today.

Consistent with our partner ecosystem like SAP.

And some of the consultants that are helping drive business in those markets.

Speaker 4: our investments in our Japan partnership early on that after a period of time is now starting to come online.

Our investments and our Japan partnership early on that after.

Period of time is now starting to come online.

Speaker 4: So we will continue to invest there, and the return continues to be great for us. And we think that there's opportunity in those markets to keep driving, and therefore we'll keep accelerating. In fact, in 2022, one of the major areas of investment for us.

We will continue to invest there and the return continues to be great for us and we think that there is opportunity in those markets to keep driving and therefore, we will keep accelerating in fact in 2022, one of the major areas of investment for US is in capacity and in sales and marketing around our.

Speaker 4: is in capacity and in sales and marketing around our international markets to invest into that growth demand that we see.

National markets to invest into that growth demand that we see.

Alright, great. Thank you for taking the question.

Our next question coming from the line of Joe <unk> with twist. Your line is open.

Speaker 1: Our next question coming from the line of Joe Mears with TWS. Your line is open.

Speaker 7: Thanks so much for taking the question. Last quarter, you guys noted that the customer engagement team was above 100 in headcount and with your increased investment initiative here, I was wondering if that grew sequentially and then just more broadly, how are you guys doing with hiring across the company and what currently took place?

Thanks, so much for taking the question.

Last quarter, you guys noted that the customer engagement team was above 100 in head count and with your increased investment initiative here I was wondering if that grew sequentially and then just more broadly how are you guys doing with hiring across the company and while currently.

Hiring environment.

Speaker 3: Yeah, thank you. I'll start with the hiring bit and.

Thank you I'll start with the hiring.

And.

Speaker 3: You know, going back to customer success, it's an area that we continue to invest in. We think it's really important.

Going back to customer success, it's an area that we continue to invest and we think it's really important.

Speaker 3: In the near-term operational metrics, the net revenue retention should reflect

In the near term operational metrics net revenue retention should reflect.

Speaker 3: how we're investing in those areas. Obviously our retention rate and the account growth, having people get better usage and learn about additional use cases will affect the future performance of our strategic products. And in this particular quarter, it was a very strong strategic product. So we'll continue to invest there. As far as overall hiring goes.

How we are investing in those areas.

Obviously, our <unk>.

Retention rate and the account growth having people.

Get better usage and learn about additional use cases will affect the future performance of our strategic products and in this particular quarter. It was a very strong strategic products result, So we'll continue.

To invest there as far as overall hiring goes.

Speaker 3: I believe we were not immune to the great resignation. However, I think we fared better than many companies. Our brand and our culture are strengths for us. Overall, I believe last year our head count grew by about 18%. And as we hit in the very tail end of the year, we were accelerating that to the investments that we plan to capitalize on the demand environment that we're seeing right now.

We will.

Believe we were.

We're not immune to the great resignation, however, I think we fared better than many companies our brand and our culture our strengths for us.

Overall, I believe last year, our head count grew by about 18%.

And then as we hit in the very tail end of the year, we are accelerating that through the investments that we plan to capitalize on the demand environment that we're seeing right now.

Speaker 7: That's super helpful, especially the color on the acceleration, so thanks for that.

Yes.

That's super helpful, especially the the color on the acceleration so thanks for that.

Speaker 7: I have one more question about international. What's the game plan, can you just remind us of the game plan to expand in APAC and how that may be similar or different from strategy that you've used to expand your presence in EMEA?

Just one more question about international what's the game plan can you just remind us of the game plan to expand in APAC and how that may be similar or different from the strategy that you've used to expand your presence in EMEA.

It's not dissimilar to.

Speaker 3: It's not dissimilar to the strategy that we've used in the meal with the exception, you know, if we include our Japan business in there, that's obviously a partnership that we're really, really pleased with the progress that we're seeing.

So the strategy that we've used in EMEA with the exception. If we include our Japan business and that's obviously a partnership.

We're really really pleased with the progress that we're seeing in Japan, We've recently added leadership.

Speaker 3: in Japan. We've recently added leadership, proven leadership in the APAC region that I think is going to help benefit us in terms of scale.

<unk> proven leadership in the.

APAC region that I think is going to help benefit us in terms of scale, but it's.

Speaker 3: But it's a mix of our growth initiatives, which include SOLEX, very performant for us in Asia Pacific.

It's a mix of our growth initiatives, which include select performance for us in Asia Pacific.

Speaker 3: land and expand motions, utilizing now the modern accounting playbook in some locations and then investing in customer success and things that drive enhanced usage which should bring the tail of and drag in strategic products and like we've mentioned the international growth overall is accelerating and we're pleased with the performance and our investments in those areas. Thank you.

Land and expand motions utilizing now the modern accounting playbook in some locations and then investing in customer success.

Things that drive enhanced usage, which should bring the tail of.

And drag in strategic products.

Like we've mentioned that international growth overall is accelerating and we are pleased with the performance and that our investments in those areas.

Thanks, so much.

And our next question coming from the line of Alex Sklar with Raymond James Your line is open.

Speaker 1: Our next question coming from Glen up Alex, far with Raymond James, you want to go.

Great. Thanks, I had a couple of questions on <unk> as well.

Speaker 8: Great, thanks. I had a couple questions on 4Q as well. Mark Parton, first, is that one to two points of revenue contribution factor and deferred revenue haircut?

Mark part and FERC does that 1% to two points of revenue contribution factor a deferred revenue haircut.

Speaker 4: It does. It factors in what we think the impact at this stage in the year, what we think the impact will be in our guide. We've put one to two points in that number.

It does it factors in what we.

I think the impact at this stage in the year, what we think the impact will be in our guide we've put one to two points.

In that number.

Okay great.

Speaker 8: Okay, great. And then, Mark Hoffman, the way you were describing the 4Q solution seems like it's a product that can really help outside of the traditional financial close period. Can you talk about that? Controllership opportunity kind of outside of financial close more broadly, and then your kind of growth rate expectations for 4Q?

Then Marc Hoffman and the way you were describing the <unk> solution seem.

Seems like it's a product that can really help outside of the traditional financial close period can you talk about that controller chip opportunity kind of outside of financial close more broadly and then you are kind of growth rate expectations for <unk>.

Well.

Speaker 3: Well, first of all, I hope you can sense I'm excited about the opportunity. I just, you know, again, starting with the

First of all I hope you can sense I'm excited about the opportunity.

We just again starting with.

The space itself, how strategic the large orders that we see.

Speaker 3: the space itself, how strategic, the large orders that we see, and just how much help that we can provide to some of these organizations who suffer through these high risk areas.

Just how.

Much helped though we can provide to some of these organizations who suffered to these high risk areas.

The.

Speaker 3: They come with an existing pipeline of opportunities, and we've been really, really aware of the fact that people might be confused in what our offerings are traditionally within our company hub.

Sure.

Right.

Come with an existing pipeline of opportunities and we've been really really.

Where are the fact that people might be confused.

And what our offerings are traditionally with intercompany hub.

Speaker 3: versus what their 4Q offerings were, and we are finding them very complimentary and getting great feedback. So we have, I would say, ambitious plans, but understand that we'll take time to communicate the value of the joint solution, work through creating a really seamless and highly scalable experience for our customers that leverages both the plan and create side and the remediation side of the entire intercompany space.

Versus what Theyre <unk> offerings, we're in we're finding them very complimentary and getting great.

Feedback so we have.

I would say ambitious plans, but I understand that it will take time to communicate the value of the joint solution worked through creating a really seamless and highly scalable experience for our customers that leverages, both the plant and create side and the remediation side.

Of the entire intercompany space.

Okay, great. Thank you.

And our next question coming from the line of Andrew <unk> with Baron Capital. Your line is open.

Speaker 1: Our next question coming from the lineup, Andrew DeGaspere with Barenberg Capital.

Finally, this is elliott on for Andrew Thanks for taking our question and one Jane and thank you for that relationship with us.

Speaker 1: Hi, this is Ali-Asteen on for Andrew. Thanks for taking our question. So we were wondering if there is room for the relationship with SAP to even further improve, particularly as that company continues to execute in its rollout of its cloud-based ERP solution.

Great. Thank.

Alright, Thank you Emilia as that company continues to execute in its rollout of its cloud based ERP session.

Well, we were having a little trouble with the audio so I hope I'm getting this right.

Speaker 3: Well, we were having a little trouble with the audio, so I hope I'm getting this right. The questions regarding SAP and Solex.

Regarding SAP <unk>.

Speaker 3: One of the best quarters that we've had in the relationship since its inception, highly performant for us, an accelerating growth engine for us, adds some benefit to our international expansion, which is driving...

One of the best quarters that we've had in the relationship symptoms.

<unk>.

Highly performance for us.

Accelerating growth engine for us.

Add some benefit to our international expansion, which is driving.

The performance that we've seen is a greater share of our revenue. In addition to that it is.

Speaker 3: The performance that we've seen is a greater share of our revenue. In addition to that, it has led to some of the net customer ad strength that we had in a strong quarter. And then the other big attribute of the...

Led to some of the net customer adds strength that we had a strong quarter and then the other big attribute of the <unk>.

Speaker 3: quarter was a strong larger deal contribution, which is also on the back of SOLIX. So, highly performant relationship for us right now.

Quarter was strong larger deal contribution.

Which is also on the back of solar so highly performance.

Our relationship for Us right now.

Okay. Thanks, sorry about the connectivity issues.

And our next question coming from the lineup Josh Beck with Keybanc. Your line is open.

Speaker 1: Next question coming from the line up.

Hey, this is matti on for Josh. Thanks for taking my questions I have a couple and then a follow up.

Speaker 9: Okay, this is Maddie on for Josh. Thanks for taking my questions. I have a couple and then a follow up. Modeling wise, I wanted to know how you're thinking about NRR trends.

Modeling wise I wanted to know how youre thinking about NR trends.

Speaker 9: throughout the year in 2022, and then what type of macro and sales cycle assumptions you're embedding into guidance.

Out the year in 2022, and then what type of macro and sales cycle assumptions, you're embedding into guidance.

Right Yeah. Thank you, let me start with sort of that first.

Speaker 4: Right, yeah, thank you. Let me start with sort of that first, sorry, the latter part of that question around the macro environment. You know, we, just to take a step back, we have seen now six quarters of increasing demand.

And for the latter part of that question around the macro environment. We just take a step back we have seen now six quarters of increasing demand.

Speaker 4: in our space. And heading into 22, we believe that that demand is continuing in our conversations and the strength that we see in our pipeline and are really positive on the demand curve that we see across our sort of global market.

Our space and.

Heading into 'twenty, two we believe that that that demand is continuing in our conversations and the strength that we see in our pipeline and our.

Are really positive on the demand curve that we see across our global markets.

Our our guidance.

Speaker 4: philosophy has always been practical, pragmatic, that we want to be able to execute within the range within a high level of visibility and then execute through the year on that guide and we've done that similarly. I think your second question was about...

Our philosophy has always been.

Practical pragmatic that we want.

To be able to execute within the range within a high level of visibility and then execute through the year on that guide and we've done that similarly.

I think your second question was about.

The.

Speaker 4: the dollar-based net revenue retention rate.

Dollar based net revenue retention rate, which is actually accelerated.

Speaker 4: which is actually accelerated a bit quicker than we had even expected. We were really pleased with a strong fourth quarter. We got that uplift from record sales of our strategic products into our base.

A bit quicker than we had even expected we were really pleased with a strong fourth quarter.

Got that uplift from.

Record sales of our strategic products into our base.

Speaker 4: record of user sales into our base and really strong momentum. Our view is that our investments in the customer engagement and success efforts and the account management team and the go-to-market team, our expansion of that product portfolio gives us a breakdown on that building.

<unk>.

User sales into our base and really.

Strong momentum our view is that our investments in the customer engagement and success efforts and the account management team and the go to market team our expansion of that product portfolio gives us.

Speaker 4: more levers than we've ever had to raise the profile within our customers and drive that net dollar retention rate.

More levers than we've ever had to raise the profile within side, our customers and drive that net dollar retention rate and all of that continuing to be built on a.

Speaker 4: And all of that continuing to be built on a high retention rate of 98%, a renewal rate of 98%.

High retention rate of 98% renewal rate of 98% and so as we move forward. We our goal is to invest to drive that rate and.

Speaker 4: And so as we move forward, our goal is to invest to drive that rate. And prior to the pandemic, it was up above where we are. And we think we can continue to move it up.

Prior to the pandemic it was up above where we are and we think we can continue to move it up.

Speaker 9: Awesome. And yeah, just my follow up, could you describe a bit about the demand environment for back office digital transformation compared to pre COVID levels specifically between, you know, mid market and enterprise customers?

Awesome and just my follow up could you describe a bit about the demand environment for back office.

Digital transformation compared to pre COVID-19 levels, specifically between mid market and enterprise customers.

Yes, it is strong.

I believe in Q4, we were talking about exceeding pandemic levels.

Speaker 3: I believe in Q4 we were talking about it exceeding pandemic level.

Speaker 3: And it's now been six quarters of an increasing demand environment, and I believe that is why we had a record quarter. And most all of our initiatives were very performant for us in the quarter, primarily because of the demand flowing through our systems. That's in mid-market.

And its now been six quarters of an increasing demand environment.

And.

I believe that is why we had.

Record quarter, and most all of our initiatives, we're very performance for us in the quarter, primarily because of the demand flowing through our systems that's in mid market.

Speaker 3: where our messaging and our deliverables are resonating, as well as in larger organizations, and increasingly a large focus in the demand environment on things like intercompany, which, again, we're very excited about the incremental nature of this acquisition, as well as our opportunity ahead of us in 2022.

Where our messaging and our deliverables are resonating as well as in larger organizations and increasingly a large focus in the demand environment on things like Inter company, which again, we're very excited about the incremental nature of this acquisition as well as our opportunity ahead of us in 2022.

Speaker 9: And if I could just sneak one last one in here. What has the reception been so far on AR automation and what kind of market synergies are you seeing with the Romelia X?

And if I could just sneak one last one in here.

What has the reception been so far on our automation.

And what kind of market synergies are you seeing with the Vermilya acquisition, yes.

Speaker 3: Yeah, great question. I appreciate you asking that for some reason, with all of the other excitement. We forgot to touch on that very performant AR automation. It's in the strategic products performance that we had in Q4. It's well above the high end of the range that we usually expect. So we're pleased with the performance of that business in the year, especially in Q4. It's leading to new customer land.

Yes, great question and I appreciate you asking that for some reason with all of the other excitement.

To touch on that very performance our automation.

In the strategic products performance that we had in Q4.

Well above the high end of the range that we usually expect so we were pleased with the performance of that business in the year, especially in Q4.

This is leading to new customer lands.

And mid market and enterprise segments. It's also leading to the cross sell that we're seeing within the black line customer install base and it's also starting to drive pretty significant transaction volumes and.

Speaker 3: in mid-market and enterprise segments. It's also leading to the cross-sell that we're seeing within the Blackline customer install base. And it's also starting to drive pretty significant transaction volumes. And that's a great indication of the value it's creating for large organizations.

Thats, a great indication of the value, it's creating for large organizations.

Thank you very helpful.

Yes.

Speaker 1: Our next question coming from the line of, with Piper Sandler, you'll understand.

Our next question coming from the line of.

Please go ahead.

With Piper Sandler your line is open.

Hi, This is Michael on for Brian Thanks for taking our questions here.

Speaker 7: Hi, this is Marlon for Bread. Thanks for taking our questions here. So one thing that stood out here is a bit of a ramp up that we saw in your go to market and R&D spend during the quarter. Would be really helpful to get some more color on what kind of initiatives you're investing behind on those fronts. And then maybe what kind of what the pace of investment we should expect going into the rest of this year. And then I'll have one follow up.

So one thing that stood out here is a bit of a ramp up that we sign your go to market and R&D spend during the quarter.

It would be really helpful to get some more color on what kind of initiatives you're investing behind on those fronts and then maybe what kind of what the pace of investment we should expect going into the rest of this year and then I'll have one follow up.

Right Yeah. Thanks for the question and Youre speaking of Q4, we ramped our R&D and sales and marketing investments a choice. We made as we move through the year and into Q4 as we saw the demand increasing.

Speaker 4: Right, yeah, thanks for the question. And you're speaking of Q4, we ramped our R&D, sales and marketing investments, a choice we made as we moved through the year and into Q4, as we saw the demand increasing in all areas of the business and put some wood behind the arrow, so to speak.

All areas of the business and.

Put some wood behind the arrow so to speak.

Yes.

And as we described that it is international capacity, if sales hiring and capacity around the globe, including in the U S and customer facing teams when the pandemic hit we were more inclined to hold our hiring in sales flat during the decline in demand and then.

Speaker 4: As we described it, it is international capacity, it's sales hiring and capacity around the globe, including in the US and customer facing teams.

Speaker 4: When the pandemic hit, we were more inclined to hold our hiring and sales flat during the decline in demand. And then as it started to pick up, we started to accelerate that investment out of Q3 and into Q4. And as we move into this year, we've talked about that being included in our guide. Additionally, we've made investments in the R&D efforts and into the Google Cloud migration. All of those on track and those investments will continue into 2022.

It started to pick up we started to accelerate that investment out.

Out of Q3 and into Q4 and as we move into this year, we've talked about that being included in our guide. Additionally, we've made investments in the R&D efforts and into the Google Cloud migration all of those on track and those investments will continue into 2022.

Got it that's helpful and then as it relates to the revenue from strategic products.

Speaker 7: Got it. Yeah, that's helpful. And then as it relates to the revenue from strategic products.

Speaker 7: It's quite notable to see it jump up to over 30% of the mix. And we're just wondering, is that?

Quite notable to see it jump up to over 30% of the mix and we're just wondering is that a signal of a trend that we should expect to see continue going forward or is that more of a deviation from what you'd expect to get the norm.

Speaker 7: signal of a trend that we should expect to see continue going forward, or is that more of a deviation from what you'd expect?

Speaker 4: Thanks. Right. Well, it's certainly a spike in the quarter when you have that kind of record performance so above the range when all three of the four products operated at record performance, AR, transaction matching and intercompany. It is indicative of what we've been seeing in the demand environment that we've been discussing.

Right well, it's certainly a spike in the quarter. When you have that kind of record performance. So above the range when all three of the four products operated at record performance.

Our transaction matching and intercompany.

It is indicative of what we've been seeing in the demand environment that we've been discussing.

Speaker 4: For the full year, the strategic products ranged or were approximately 23% of our sales. That was up from the prior year, up from the prior year. So we would expect on an annual basis that these will continue to increase, those are the investments that we're making into our business and into that portfolio. But on a quarterly basis, it'll vary.

For the full year the strategic products ranged.

Proximately, 23% of our sales that was up from the prior year up from the prior year. So we would expect on an annual basis that these will continue to increase those are the investments that we're making.

Into our business and into that portfolio.

But on a quarterly basis that will vary.

Our next question coming from the line.

Speaker 1: Next question coming from Delana. I'm Jolyne Borah with J.P. Morgan.

And Julien <unk> with Jpmorgan Your line is open.

Speaker 10: Oh, great. Hey, reps on the quarter.

Great.

Congrats on a quarter.

Speaker 10: Seems like a good bookings quarter from what I hear. I want to dig into the Microsoft partnership.

Seems like a good bookings quarter from what I hear.

Wanted to dig into the Microsoft partnership.

How should investors think about this this opportunity around the partnership.

Speaker 10: How should investors think about this opportunity around the product?

Speaker 10: and any preliminary feedback.

Any any preliminary feedback that you're hearing from customers.

Speaker 3: It's a real recent announcement that we've made. We also announced a Google partnership as well. Very similar things. Co-selling arrangements primarily focused on mid-market and enterprise companies or the divisions and subsidiaries of enterprise companies. Microsoft continues to have great traction, brand, and reach in that space.

Yes.

Real recent announcement that we've made we also announced a Google.

Our partnership as well very similar things co selling arrangements primarily.

Focused on mid market and enterprise companies or the divisions and subsidiaries of enterprise companies. Microsoft continues to have great traction brand and reach in that space.

Speaker 3: It'll also allow us to further develop technology synergies to allow our systems to better interoperate in a complex accounting technology landscape. Way too early and I don't...

It will also allow us to further develop the technology synergies to allow our systems to better inter operate in a complex accounting technology landscape too way too early.

And I don't expect.

Speaker 3: Material impact in the next couple quarters, but I think it will be something that we should pay attention to as we round the year and our performance in sort of the Microsoft. Landscape.

Material.

Impact in the next couple of quarters, but I think it'll be something that we should pay attention to as we round the year.

Our performance in sort of the Microsoft ERP landscape.

Yes.

Speaker 10: Yep, understood. Okay, thank you for that. Another question on NRR.

Yeah understood. Okay. Thank you for that.

Another question on NR.

We saw a nice sequential uptick.

Speaker 10: We saw a nice sequential uptick. Could you maybe parse through that, was there any kind of a tailwind from the normalization of spectra?

Could you maybe parse through that was there any kind of a tailwind from the normalization of spend from existing customers and the second part to that is as you fold I guess youre familiar.

Speaker 10: And the second part to that is as you fold, I guess, the dremelia, since you have lapped it.

Since you have lapped it now is there anything you remember in terms of the effect.

Speaker 10: Is there anything to remember in terms of the effect of Remilia being layered?

Roumelia being layered on top of an IRR.

I'm, sorry, I didn't hear that last question, but let me talk about the drivers of that.

Speaker 4: I'm sorry, I didn't hear that last question, but let me talk about the drivers of the retention rate.

Our retention rate.

Win win.

Speaker 4: When prior to the pandemic, we were at around 110 to 111 percent and then the pandemic dropped that down and for the last several quarters we've had three quarters of sequential increases to get back to where we are.

Prior to the pandemic, we were at or around 110% to 111% and then depend <unk> dropped that down and for the last several quarters. We've had three quarters of sequential increases to get back to where we are the drivers of that are the investments that we're making into our customer success and account management teams that are <unk>.

Speaker 4: The drivers of that are the investments that we're making into our customer success and account management teams that are really focused on our customer's journey to uptake and buy into our strategic products.

Really focused on our customers' journey.

To uptake and buy into our strategic products and so thats been one of the great growth levers thats moving that needle. Another one is we've had a couple of record quarters of user expansion now also coming from global rollout within our customer base and then all of that.

Speaker 4: And so that's been one of the great growth levers that's moving that needle. Another one is we've had a couple record quarters of user expansion now also coming from global rollouts within our customer base.

Speaker 4: And then all of that on a higher priced lever. Every year we have annual price increases within our customer base. And we also have a very high renewal rate.

Higher priced lever every year, we have annual price increases within our customer base and we also have a very high.

Renewal rate, particularly in the enterprise and so that's been the driver and will continue to be so with the strategic products also given us some uplift.

Speaker 4: And so that's been the driver and will continue to be so with the strategic products also giving us some uplift.

Got it.

Speaker 10: Got it. The other part of the question that I think you misheard or didn't hear is is Ramilia wouldn't Ramilia kind of there into net retention going forward? And does does that have any good or bad effects?

The other part of the question that I think you misheard or didn't hear as familiar wouldn't reveal youre kind of there into net retention going forward and does that have any good or bad effect.

Yes, Great question, Yes, you are right I heard the first part of this that we in the fourth quarter, we lapped the Roumelia acquisition and so you can see that in the comp numbers year over year and Roumelia now.

Speaker 4: Oh, yes, great question. Yeah, you're right. I heard the first part of this that we, in the fourth quarter, we lapped the Remilia acquisition. And so you can see that in the comp numbers year over year.

Speaker 4: And Remilia now, or our Blackline's cash and AR automation solution, has become part of our strategic portfolio.

Our black lines cash in our automation solution has become part of our strategic portfolio and Thats being sold into our base and that gets calculated into that retention rate and is now driving it and we saw that in Q4 with a record performance from Roumelia. When we bought the company we talked about the <unk>.

Speaker 4: and that's being sold into our base and that gets calculated into that retention rate and is now driving it. And we saw that in Q4 with the record performance from Remilia. When we bought the company, we talked about the impact and growth being in the second year and beyond. And that's pretty much what has happened.

Packed and growth being in the second year and beyond and that's pretty much what has happened.

Understood. Okay. Thank you.

Speaker 1: Our next question coming from the line of Koji Kano with Bank of America.

Our next question coming from the line of Gucci Kennon with Bank of America. Your line is open.

Speaker 1: Hi, this is Tanika Awan for Koji. Thanks for taking our question. We were hoping to gain more color in the competitive landscape, what you're seeing out there, specifically as mid-market and international demand for finance and automation increases.

Hi, This is Don Mcgowan for Gucci, Thanks for taking our question.

We will be more color on the competitive landscape, what you're seeing out there specifically as mid market and international demand for finance and automation increases.

Thank you.

Thank you.

Speaker 3: Thank you. No material change in the competitive landscape that we see. We still continue to see some level of competitive takeaways that we're able to perform. But primarily, it's companies coming off unsustainable and manual or spreadsheet-based environments that they're working in.

No material change in the competitive landscape that we see we still continue to see.

Some level of competitive takeaways that we're able to perform.

But primarily it's companies coming off.

Unsustainable and manual spreadsheet based environments that they are working in.

We continue to focus on expanding the capabilities of our platform.

Speaker 3: We continue to focus on expanding the capabilities of our platform, our AR capabilities, now our enhanced intercompany capabilities. We feel like it expands our moat, gives us more capabilities than anyone else in our space. And although the market demand, I believe, is likely filling many boats, a lot of the value is accruing to us as the leader in the category.

Our capabilities now our enhanced intercompany capabilities, we feel like expands our mode gives us more capability than anyone else in our space.

Although the market demand I believe is likely filling many boats allows the value was accruing to us as the leader in the category.

Thank you.

Thank you.

And our next question coming from the line of Rob Oliver with Baird. Your line is open.

Speaker 1: No next question coming from the line of Rob Oliver with Baird.

Hey, Yeah. Thanks, Rob This is Ron <unk> on for Rob.

Speaker 11: Thanks. This is Shrinig on for Rob. I had a question on just following on the mid-market. So the product map, just wanted to get a sense of where it's kind of really gaining traction, what's really going well, what's not, some color on that.

I have a question on just following up on the mid market. So the product mob.

Just wanted to get a sense of.

Where it's got a really gaining traction.

What's really going well.

<unk> not.

Some color on that.

Speaker 3: Yeah, mid-market was performance last year in the quarter. I believe a lot of it driven by great leadership and the efficacy of our approach, the modern accounting playbook. It's a well-worn path.

Yes.

Mid market was performance last year in the quarter.

I believe a lot of it driven by great leadership and the efficacy of our approach the modern accounting playbook, it's a well worn path.

Speaker 3: for controllers and CFOs of mid-market companies who want to drive not only visibility, but automation into their accounting landscape.

Four controllers and Cfos of mid market companies, who want to drive not only visibility, but automation into their accounting landscape.

Speaker 3: It delivers a very quick time to value and very specific use cases that we believe are the best use cases to land a new customer with to put them on a path of continued expansion. It's pervasive in our mid-market sales.

It delivers a very quick time to value and it's very specific use cases that we believe are the best use cases to land a new customer with to put them on a path of continued expansion.

It.

It's pervasive in our mid market sales.

Speaker 3: The delivery is being very well executed and we're getting great feedback from customers on the value it's creating for them.

Delivery.

<unk>.

Being very well executed and we're getting great feedback from customers on the value, it's creating for them.

Got it really helpful color and just one quick follow up on the S&P.

Speaker 11: got it really helpful. Thanks. And just one quick follow-up on the SAP. The SAP contribution came in at the higher end of your typical range at 25 percent, international super strong. So just wanted to get a sense of

Does that make arguments and gamma in the iron ore growth type of a range of 25% International was strong.

Just wanted to get a thumbs up.

Speaker 11: Regarding SAP, what are the kind of drivers around the pipeline? We are seeing some bigger budget type of deals kind of related to digital transformation as opposed to just accounting and so forth.

Regarding asset what are the drivers around the pipeline.

We are.

<unk> seen some bigger budget type of deals.

Kind of related to digital transformation as opposed to just accounting and so forth.

Sure I can start off because I think part of your question was about the success traction and drivers in the S&P saw X program, which is now in that reseller partnership with them about three years old and.

Speaker 4: Sure, I can start off because I think part of your question was about the success, traction, and drivers in the SAP Solex program, which is now, in that reseller partnership with them, about three years old. And in Q4, we saw a continuation of a trend.

In Q4, we saw a continuation of a trend where we believe that.

Speaker 4: where we believe that SAP as a partner is really on trend and on traction with us. The programs from the RISE initiative a year ago to the efforts from our direct sales and customer training efforts have really paid off.

As a partner is really on trend and on traction with us.

Programs from the rise initiative, a year ago to the efforts from our direct sales and customer training.

Efforts have really paid off.

Speaker 4: SAP SOLIX has continued to validate the partnership, which are large, strategic, global deals, sometimes in the markets where we operate and sometimes outside of those markets and bringing us customers that we would not have seen without them. We operate at a very high level.

<unk> has continued to validate the partnership which are large strategic global deals sometimes in the markets, where we operate and sometimes outside of those markets and bringing us customers that we.

Would not have seen without them, we operate at a very high level.

Most of the time in a digital transformation project and that gives us not just a great strategic partnership, but a great long term lifetime value customer so that that far.

Speaker 4: most of the time in a digital transformation project. And that gives us not just a great strategic partnership but a great long-term lifetime value customer. So that fourth quarter with SAP has been one of our best and we believe this trend can continue into 2022.

The fourth quarter with SAP has been one of our best and we believe this.

Trend can continue into 2022.

Got it thanks, a lot I appreciate it.

I'm showing I'm not showing any further questions at this time I would now like to turn the call back over to Mr. Hoffman for any closing remarks.

Speaker 1: I'm not showing any further questions at this time. I would now like to send the call back over to Mr. Huffman for any closing remarks.

Well. Thank you all for attending today and your interest and support of Black line.

Speaker 3: I want to thank you all for attending today and your interest and support of BlackLine. We're very pleased to share the results of our record quarter and our vision for the future, and like to continue the precedent set by our founder and encourage you all who follow us, to refer us to your portfolio clients so we can help give them a great experience. Thank you and we'll see you soon.

Okay.

We're pleased to show share the results of our record quarter and our vision for the future and like to continue the <unk>.

Precedent set by our founder and encourage you all who follow us to refer us to here.

Portfolio clients. So we can help give them a great experience. Thank you and we'll see you soon.

Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.

Speaker 1: Ladies and gentlemen, that doesn't go conference book today. Thank you for your participation. You may now disconnect