Q2 2024 BlackLine Inc Earnings Call

Today relate to the corresponding period of last year, unless otherwise noted.

Finally, unless otherwise stated our financial measures disclosed in this call will be non-GAAP, a discussion of these non-GAAP financial measures and information regarding reconciliations of our historical GAAP versus non-GAAP results is available in our earnings release, which may be found on our Investor Relations website at investors that black line Dot com.

Or in our form 8-K filed with the SEC today.

Ryan <unk>: Now I will turn the call over to Black lines Co Chief Executive Officer, Ryan <unk>.

Owen Ryan: Thank you, Matt, and good afternoon, everyone. Thank you all for joining us today. Blackline's results this quarter were driven by improved execution as progress against our operating model continues at a steady pace. Specifically, we delivered $161 million in total revenue. Non-GAAP Operating Margin of 20% and $43 million in non-GAAP netting. Our strategic product portfolio had a solid quarter, and we also saw the number of customers with one million or more in annual recurring revenue increase to 68.

Ryan <unk>: Yes.

Ryan: Thank you, Matt and good afternoon, everyone.

Ryan: Thank you all for joining us today.

Speaker Change: Black lines results. This quarter were driven by improved execution as progress against our operating model continues at a steady pace.

Ryan: Specifically, we delivered $161 million in total revenue.

non-GAAP operating margin of 20%.

$43 million in non-GAAP net income.

Ryan: Our strategic products portfolio had a solid quarter and we also saw the number of customers with $1 million or more in annual recurring revenue increased to 68.

Owen Ryan: Our go-to-market teams executed well this quarter, and we believe that the additional focus, rigor, and discipline across the business is supporting our results. We also have several strong and proven leaders that recently joined Blackline, and their early efforts are beginning to drive the types of outcomes we expect longer term.

Ryan: Our go to market teams executed well this quarter and we believe that the additional focus rigor and discipline across the business is supporting our results.

Owen Ryan: While there is even more work to do going forward, we believe early results are validating our efforts while further enhancing our differentiation in this large and growing market opportunity. Going deeper into execution this quarter, we saw improved close rates, larger deal sizes, and solid competitive win rates. Also, our enterprise business was a highlight this quarter, with notable performance in Europe and AP.

Owen Ryan: While total deal volume remains subdued and new business sales cycles remain extended, these results give us confidence that our efforts are driving improvement. We also saw solid results from our strategic products portfolio and note that our consolidation and financial analytics pillar saw some great wins and expansions. We recently began packaging our financial close and consolidation solutions together as a unified end-to-end offering for customers and prospects. While this initiative is still in its early stages, initial results are promising, and we look forward to expanding this offering more broadly in the months ahead.

Owen Ryan: We also saw some improvement in pipeline creation, especially as we exited the quarter. One area supporting this improved pipeline is in our invoice-to-cash pillar, which has seen building interest from customers and prospects interested in electronics, invoicing, presentment, and payment, or EIPP. We acquired this capability last year as part of our data interconnect acquisition.

Owen Ryan: After a successful integration process, I've started to position our offering in the market as a complete end-to-end invoice-to-cash solution. Furthermore, this additional capability helps support our recent inclusion in the Gartner Magic Quadrant for Invoice2Cash. Next, we are making progress enhancing our marketing message and brand thanks to our refocused marketing effort. You have become more disciplined in our customer targeting while driving a more comprehensive end-to-end message. We have also become more intentional about meeting customers where they are in their life cycle, both pre and post-purchase, to not only land new customers but also enable quicker, more efficient expansion with an existing account.

Owen Ryan: While early, these efforts help support our strategic goal of elevating the conversation with our customers in the office of the CFO. One area where I am pleased to see progress is in our continuing effort to ensure that the value of the Blackline promise remains steadfast and absolute.

Owen Ryan: We focus on delivering a strong value proposition to our customers, emphasizing not only time to value but also the ROI on their precious spend. This value-centric approach has become especially important in today's environment and has strengthened our position against competitors who often rely more on price as a differentiator. We believe our improving competitive win rates indicate that our focus on value is responding well in a market increasingly attuned to value over cost.

Owen Ryan: As many of you know, I regularly meet with customers and prospects to understand their needs and how Blackline can better help transform their accounting and finance organization. This quarter, I've seen a clear trend reinforced, and that is that the digital finance transformation is still very much in focus; customers still see this as a multi-year journey, and it is a core component of their long-term strategy. The key takeaway here is that while we may encounter short-term challenges related to budgets and the pace of transformation, the long-term opportunities and secular trends within the Office of the CFO remain strong and highly relevant.

Owen Ryan: In addition to meeting with customers, I spent considerable time with our partners, aligning our goals and exploring joint opportunities to support our customers. We find that partner-led implementations, especially in the enterprise and upper end of the middle market, enhance our value proposition and support our strategy of improving customer outcomes. Building on this, in quarter two, we made progress on enhancing our distribution efforts through our partner network. We achieved better partner alignment, particularly in enterprise, resulting in a higher percentage of partner influence pipeline and an increased sharing of services and implementation work.

Ryan: <unk> distribution efforts through our partner network.

Ryan: We've achieved better partner alignment, particularly in enterprise, resulting in a higher percentage of partner influenced pipeline and an increased sharing of services and implementation work.

Owen Ryan: Additionally, we are integrating our partners more deeply into all four of our pillars to drive further global opportunities. We have also seen notable increases in partner participation at our customer events, reinforcing and validating our progress. Our partnership with SAP shows solid performance this quarter from our Solex business, driven primarily by new customer wins. And we recently announced that SAP has included our financial reporting and analytics solution as part of the Solex partnership. We are optimistic about this joint offering with SAP, given our recent success with this solution. Our renewal rate this quarter was in line with expectations but below where we expect it to be over the longer term.

Ryan: Additionally, we are integrating our partners more deeply into all four of our pillars to drive further global opportunities.

Ryan: We have also seen notable increases in partner participation at our customer event, reinforcing and validating our progress.

Ryan: Our partnership with SAP showed solid performance this quarter from our salt life business.

Ryan: Driven primarily by new customer wins.

Ryan: And we recently announced that SAP has included our financial reporting and analytics solution as part of the <unk> partnership.

Ryan: We are optimistic about this joint offering with SAP.

Ryan: Given recent success with this solution.

Ryan: Renewal rate this quarter was in line with expectations, but below where we expect to be over the longer term.

Owen Ryan: So how are we continuing to address these? First, we have been prioritizing an enhanced customer onboarding experience to ensure consistency and adoption. This approach directly supports our value proposition and accelerates time-to-value for customers. It also has the potential to accelerate expansion and renewal activity within our customer base. Next, we are quickly driving more digital self-service options for customers based on continued customer feedback. This shift aims to increase customer satisfaction while reducing our cost to serve.

Ryan: So how are we continuing to address this.

Ryan: First we have been prioritizing and enhanced customer onboarding experience to ensure consistency and adoption.

Ryan: This approach directly supports our value proposition and accelerates time to value for customers.

Ryan: It also has the potential to accelerate expansion and renewal activity within our customer base.

Ryan: Next we are quickly driving more digital self service options for customers based on continued customer feedback.

Ryan: This shift aims to increase customer satisfaction, while reducing our cost to serve.

Owen Ryan: We have also begun building customer groups within key industries where users are sharing their experiences and success leveraging Blackline. Finally, our recent efforts to drive process optimization with customers have led to improved levels of customer satisfaction, better customer engagement, and increased usage. While we are pleased with these initiatives, we anticipate that it will take a few more quarters to fully realize these benefits and drive our renewal rate to our traditionally high level.

Owen Ryan: As mentioned earlier, we saw terrific new customer wins this quarter, with notable outperformance in Europe and Asia. Specifically, we want a competitive replacement with one of the top two UK-based pharmaceutical companies as part of our Solex partnership. The customer was looking for a partner to automate and transform their finance and accounting processes while also consolidating on a single trusted vendor from a collection of manual tools. This multi-solution deal, including financial close, automated journals, intercompany, and smart close, positions the customer to drive real transformation across their accounting and finance organization.

Owen Ryan: Next, in North America, we signed a well-known fast food chain to a multi-solution deal as part of a competitive replacement. The customer was initially looking to replace their financial closed solutions with a more modern and end-to-end solution. They were also considering moving away from their current vendor to their native ERP partner. However, our efforts to position and sell both financial close and consolidation together, providing an end-to-end solution, exceeded their expectations and was the logical choice for their finance and accounting. In the mid-market, we signed a leading global law firm to a multi-solution deal as part of their digital finance transformation effort. Their existing financial closing consolidation processes are manual, time-consuming, and lack appropriate visibility and automation.

Therese Tucker: Our sales team, working hand-in-hand with our pillar leaders, was able to speak to the value of a modern end-to-end solution for their financial close and consolidation process to support their longer-term strategic goals. We also saw some large expansions with customers this quarter, with notable cross-selling of our strategic product. We signed our largest deal ever in Canada with an existing global insurance customer that needed a partner to help them consolidate their complex financial systems landscape, enhance their compliance and controls, and drive automation as they continue to grow.

Therese Tucker: Leveraging a partner, we were able to deliver a compelling value proposition that supports their multi-year digital finance transformation. In APAC, we expanded with Australia Post, an existing customer and one of Australia's largest government-owned entities. They were seeking a solution to improve and automate their invoice-to-cash processes. Working with their finance team, we demonstrated how our invoice-to-cash solution and partnership could serve to drive real automation, unlock working capital, and give them additional visibility and control as they look to reshape their business. With that, I'll hand it off to Therese to discuss how we continue to accelerate innovation for our customers. Thank you, Owen.

Therese Tucker: Thank you, Owen. This was a solid execution quarter at Blackline, and I am proud to highlight several key achievements from the quarter that underscore our commitment to innovation and customer success while delivering a more complete solution for our customers. First, our R&D teams are delivering cutting-edge solutions and capabilities that are now or will be soon available to our customers. These new solutions and capabilities are designed to meet and exceed our customers' evolving needs and help them stay ahead.

Therese Tucker: As you know, the complexities within a company's financial systems landscape are growing due to increased demands placed on accounting and finance teams and the need for high-quality data and insights that drive decision making. As an example, we are progressing through the early adopter phase of our studio solution, with a growing number of customers transitioning into production and increasing their usage, while still in the early stages of rollout.

Therese Tucker: We are seeing encouraging levels of engagement and strong satisfaction from our customers. This positive feedback is an indicator of the solution's longer-term potential and impact. Looking ahead, we are poised to expand the rollout of Studio more broadly in the latter half of this year, bringing its innovative capabilities to a wider audience and offering additional value for our customers. We have also recently entered the early adopter phase with our Gen AI-powered journal risk analyzer solution.

Therese Tucker: Customers, especially those seeking better insights and intelligence into their journal processes, continue to show interest in this unique and powerful solution. It can reduce the level of risk through trend analysis and visibility, while also enhancing compliance and audit readiness through its automated capabilities.

Therese Tucker: We believe AI-powered solutions, like the Journal Risk Analyzer, offer a low-risk way to build trust and confidence with customers who want to leverage AI responsibly in their most sensitive and critical accounting and finance processes. Our methodical approach to innovation involves not just creating new solutions but also seamlessly integrating them into customers' existing workflows and processes. This past quarter, we rolled out several new AI-powered capabilities that we expect to enhance the customer experience, driving greater levels of productivity and automation, and delivering value wherever customers are on their digital finance transformation journey.

Speaker Change: Cancel transformation journeys.

Therese Tucker: We are introducing and embedding these AI-powered capabilities thoughtfully, educating customers on low-risk use cases to enhance adoption, and instilling confidence and trust over time. Building an AI foundation with customers and leveraging this to expand usage and adoption is core to our strategy. Furthermore, recognizing that AI is not a one-size-fits-all approach.

Speaker Change: We are introducing and embedding these AI powered capabilities thoughtfully.

Speaker Change: <unk> customers on low risk use cases to enhance adoption and instilling confidence and trust over time.

Speaker Change: Building on a foundation with customers and leveraging this to expand usage and adoption is core to our strategy recognizing that AI is not a one size fits all approach.

Therese Tucker: To go a bit further, in our financial closed pillar, we are starting to integrate natural language processing into our core financial closed solutions, beginning with account reconciliation. This unique and powerful enhancement is just the start. Looking ahead, we envision extending and embedding these advanced capabilities broadly across our suite of financial closed solutions. Setting a New Standard for Efficiency, Intelligence, and Risk Reduction in Finance and Accounting Operations

Speaker Change: To go a bit further in our financial close pillar, we are starting to integrate natural language processing into our core financial closed solutions beginning with account reconciliations.

Speaker Change: This unique and powerful enhancement is just the start.

Looking ahead, we envision extending and embedding these advanced capabilities broadly across our suite of financial closed solutions setting a new standard for efficiency intelligence and risk reduction in finance and accounting operations. Additionally, with.

Therese Tucker: Additionally, within both our Financial Close and Consolidation and Financial Analytics pillars, we went live with our Document Description Summarizer in May for early adopters. We've seen customers begin to use these additional capabilities, and while early, we are pleased with the initial results. As Owen mentioned, our invoice-to-cash solution was recently included in the Gartner Magic Quadrant for the first time, which we believe should enhance our competitive positioning and support our long-term growth objectives. The core to being an Additive Quadrant was the addition of EIPT capabilities from our acquisition of Data Interconnect last year and, of course, our successful integration efforts.

Speaker Change: In both our financial close and consolidation and financial analytics pillars. We went live with our document description summarize or in May for early adopters. We've seen customers begin to use these additional capabilities and while early we are pleased with the initial results.

Speaker Change: <unk>.

As Owen mentioned, our invoice to cash solution was recently included in the Gartner Magic quadrant for the first time, which we believe should enhance our competitive positioning and support our long term growth objectives core to being additives quadrant was the addition of.

Owen: E P T capabilities from our acquisition of data interconnect last year.

Speaker Change: And of course, our successful integration efforts, we are already seeing early opportunities with prospects and customers seeking a comprehensive end to end invoice to cash solution to solve their most challenging business problems.

Therese Tucker: We are already seeing early opportunities with prospects and customers seeking a comprehensive end-to-end invoice-to-cash solution to solve their most challenging business problems. In addition, we have made significant strides in advancing our platform strategy, driven by the expansion of our global cloud and infrastructure capability. These efforts not only address today's complex, mission-critical customer processes but also anticipate future needs. By strengthening our Platforms Foundation, we believe that we can ensure that our services remain reliable, secure, and accessible worldwide.

Speaker Change: In addition, we have made significant strides in advancing our platform strategy driven by the expansion of our global cloud and infrastructure capabilities.

Speaker Change: These efforts not only address today's complex mission critical customer processes.

Speaker Change: We also anticipate future needs by strengthening our platforms Foundation, we believe that we can ensure that our services remain reliable secure and accessible worldwide. This supports our goal of delivering unparalleled service quality regardless.

Therese Tucker: This supports our goal of delivering unparalleled service quality, regardless of customer size or location. As part of these efforts, we recently stood up our APAC data center in partnership with our public provider to enhance localized cloud operations. We're also advancing our data strategy and data platform build out to support the integration and management of high volume customer data and reporting. This not only supports our customers directly but also supports our own AI development work. Lastly, we are adding additional connectors and APIs to further support the real-time ingestion and bidirectional movement of high-volume data required by a modern platform.

Speaker Change: Customers place or location.

Speaker Change: As part of these efforts, we recently stood up our APAC data center in partnership with our public club rider to enhance localized cloud operations. We're also advancing our data strategy and data platform built out to support the integration and management of high volume customer day.

Speaker Change: <unk> and reporting.

Speaker Change: This not only supports our customers directly but also supports our own AI development work Lastly, we are adding additional connectors and Apis to further support the real time ingestion and bi directional movement of high volume data required by them.

Speaker Change: Modern platform.

Therese Tucker: Looking ahead, our product roadmap and platform buildout are filled with exciting developments. We are poised to introduce further customer-centric innovation, supporting our market leadership and differentiation. Each step we take is guided by a clear vision and strategy, reinforced by our ongoing commitment to our customers' success. To close, our company's performance this quarter is beginning to reflect the changes we have made over the past year. While there is much to do, we feel we are well positioned for long-term success and remain committed to delivering value to our customers, partners, and stakeholders. And, of course, we thank all Blackliners for making this happen. With that, I'd like to turn it over to Mark Partin, who will review our financial results and updated financial guidance. Mark? Thank you.

Speaker Change: Looking ahead, our product roadmap and platform build out are filled with exciting developments. We are poised to introduce further customer centric innovation supporting our market leadership and differentiation.

Speaker Change: Each step we take is guided by a clear vision and strategy reinforced by our ongoing commitment to our customers' success.

Speaker Change: Close our company's performance. This quarter is beginning to reflect the changes we have made over the past year. While there is much to do we feel we are well positioned for long term success and remain committed to delivering value to our customers partners and stakeholders and of course.

Speaker Change: We think all black liners for making this happen.

Mark Parton: With that I'd like to turn it over to Mark Parton, who will review, our financial results and updated financial guidance Mark.

Mark Partin: Our overall performance in the second quarter was better compared to Q1. Some of these improvements were anticipated as we continue to execute on our operating model, while others are being driven by our recently strengthened leadership. We've also seen some early signals that top of funnel demand is improving, but acknowledge that it is early and we are still below levels that we would consider normal or healthy.

Mark Parton: Thank you Terry.

Mark Parton: Our overall performance in the second quarter improved compared to Q1.

Mark Parton: These improvements were anticipated as we continue to execute on our operating model, while others are being driven by our recently strengthened leadership team.

Speaker Change: We've also seen some early signals that top of funnel demand is improving but acknowledge that it is early and we are still below levels that we would consider a normal or healthy.

Mark Partin: Despite this, we remain focused on our financial results. Thank you all for joining us today. With that in mind, let's review our financial performance in more detail. Total revenue grew to $161 million, up 11%, with subscription revenue growth of 12%. Services revenue growth was flat and continues to weigh on our overall top-line performance.

Mark Parton: Despite this we remain focused on our financial results, especially our progress on margin expansion and free cash flow generation and that such results support our ability to meet demand, where it is and invest strategically.

Mark Partin: We expect that services will remain a headwind to our full-year revenue growth. Calculated buildings growth was 12% with trailing 12 month buildings growth of 11%. Remaining Performance Obligations or RPO was up 9% with current RPO growth of 10%. We closed the quarter with total annual recurring revenue or ARR of $620 million, up 10%. Net new customers increased by 24 in the quarter, bringing our total customer count to 4,435.

Mark Parton: That in mind, Let's review, our financial performance in more detail.

Speaker Change: Total revenue grew to $161 million up 11% with subscription revenue growth of 12% services revenue growth was flat and continues to weigh on our overall top line performance.

Mark Parton: We expect that services will remain a headwind to our full year revenue growth.

Speaker Change: Calculated billings growth was 12%.

Mark Parton: With trailing 12 month billings growth of 11%.

Mark Parton: Remaining performance obligations or <unk> was up 9% with current <unk> growth of 10%, we closed the quarter with total annual recurring revenue or <unk> of $620 million up 10%.

Mark Parton: Net new customers increased by 24 in the quarter, bringing our total customer count to 4435 <unk>.

Mark Partin: Gross customer ads were healthy this quarter, but were offset by expected lower middle market customer churn. Our revenue renewal rate in the second quarter was 93%, in line with expectations as we continue to see instances of vendor consolidation occurring. Net retention rate or NRR was 104% this quarter, primarily driven by a lower velocity of account growth and slightly higher customer churn.

Mark Parton: Gross customer adds were healthy this quarter, but were offset with expected lower middle market customer churn.

Mark Parton: Our revenue renewal rate in the second quarter was 93% in line with expectations as we continue to see instances of vendor consolidation occurring.

Mark Parton: Net retention rate or <unk> was 104% this quarter, primarily driven by a lower velocity of account growth and slightly higher customer churn.

Mark Partin: Strategic product performance was a highlight this quarter, and it represented 28% of sales, coming in towards the higher end of our target. Performance this quarter was primarily driven by strength in financial reporting and analytics, smart clothes, and transaction matching. Partners were involved in 85% of large deals this quarter, with consistency across both new and existing opportunities. Solex performance was in line with our expectations, driven by a higher mix of new business. In Q2, SAP partnership revenue represented 25% of total revenue.

Mark Parton: Strategic product performance was a highlight this quarter and it represented 28% of sales coming in coming in towards the higher end of our target range.

Mark Parton: Performance. This quarter was primarily driven by strength in financial reporting and analytics smart close and transaction matching.

Mark Parton: Partners were involved in 85% of large deals this quarter with consistency across both new and existing opportunities.

Mark Parton: <unk> performance was in line with our expectations driven by a higher mix of new business in Q2, SAP partnership revenue represented 25% of total revenue.

Mark Partin: Turning to margin, our non-GAAP gross margin was 79%, with a non-GAAP subscription gross margin of 82%. Gross margin performance remains in line with our expectations as we focus on optimizing cloud spend and progress with our GCP migration. Non-GAAP operating margin was 20% above our expectations, largely driven by productivity gains across our sales team and further efficiencies across our R&D team. Non-GAAP net income attributable to Blackline was $43 million, up 40%, and represented a 27% non-GAAP net income margin, due primarily to operating income outperform.

Speaker Change: Turning to margins our non-GAAP gross margin was 79% with non-GAAP subscription gross margin of 82% gross margin performance remains in line with our expectations as we focus on optimizing cloud spend and progress with our DCP migration efforts.

Mark Parton: non-GAAP operating margin was 20% above our expectations largely driven by productivity gains across our sales team and further efficiencies across our R&D teams.

Mark Parton: non-GAAP net income attributable to Black line was $43 million up 40% and represented 27% non-GAAP net income margin due primarily to operating income outperformance.

Mark Partin: We generated $41 million in operating cash flow and $34 million in free cash flow in the quarter, with a free cash flow margin of 21%. Our free cash flow generation remains a key strength for Black. Turning to our balance sheet, in May, we took action to repurchase 80% of our existing 2026 convertible notes from the proceeds of a new $675 million convertible note along with cash on hand. After these concurrent transactions, we ended the quarter with over $1 billion in cash, cash equivalents, and marketable security. Last week, we also retired our existing $250 million face value 2024 convertible notes using cash from the balance sheet.

Mark Parton: We generated $41 million in operating cash flow and $34 million in free cash flow in the quarter for the free cash flow margin of 21%.

Speaker Change: Our free cash flow generation remains a key strength for Blackrock.

Mark Parton: Turning to our balance sheet.

Mark Parton: In May we took action to repurchase 80% of existing 2026 convertible notes from.

Mark Parton: The proceeds of a new $675 million convertible note along with cash on hand.

Mark Parton: After these concurrent transaction, we ended the quarter with over $1 billion in cash cash equivalents and marketable securities.

Mark Parton: Last week, we also retired our existing $250 million face value of 2024 convertible notes using cash from the balance sheet.

Mark Partin: Following this recent transaction, we have approximately $800 million in cash, cash equivalents, and marketable security. Our updated share count guidance reflects these transactions. Now on Guidance.

Mark Parton: Following this recent transaction, we have approximately $800 million in cash cash equivalents and marketable securities.

Mark Parton: Our updated share count guidance reflects these transactions.

Mark Partin: We are raising our full-year revenue and non-GAAP operating margin guidance ranges. Our execution in the second quarter, while improved, is balanced against our view that the demand environment remains muted but stable as we move through the end of the year. Further, we still expect that services revenue growth will be a headwind to our full-year total revenue growth. Now, for the third quarter of 2024, we expect total gap revenue to be in the range of $162-$164 million, representing approximately 8-9% growth.

Mark Parton: Now on guidance, we are raising our full year revenue and non-GAAP operating margin guidance ranges.

Mark Parton: Our execution in the second quarter, while improved is.

Mark Parton: Is balanced against our view that the demand environment remains muted, but stable as we move through the end of the year.

Mark Parton: We still expect that services revenue growth will be a headwind to our full year total revenue growth rate.

Mark Parton: Now for the third quarter of 2024, we expect total GAAP revenue to be in the range of $162 million to $164 million, representing approximately 8% to 9% growth.

Mark Parton: We expect non-GAAP operating margin to be in a range of 19% to 20%.

Mark Parton: We expect non-GAAP net income attributable to black line to be in a range of $38 million to $40 million or 49% to $52 on a per share basis.

Mark Parton: Our share count is expected to be approximately 77 million diluted weighted average shares.

Mark Partin: We expect the non-GAAP operating margin to be in a range of 19 to 20 percent, and we expect the non-GAAP net income attributable to Blackline to be in a range of $38 to $40 million, or $0.49 to $0.52 on a per share basis. Our share count is expected to be approximately 77 million diluted weighted average shares. And for the full year 2024, our updated guidance is as follows. We expect total GAAP revenue to be in a range of $647 to $651 million, representing 10% growth.

Mark Parton: And for the full year 2020 for our updated guidance is as follows we.

Mark Parton: We expect total GAAP revenue to be in a range of $647 million to $651 million.

Mark Parton: Representing 10% growth.

Mark Parton: We expect non-GAAP operating margin to be in a range of 18% to 19%.

Mark Parton: And finally, we expect non-GAAP net income attributable to black line to be in a range of $158 million to $168 million or $2 eight to $2 21 on a per share basis.

Mark Parton: Our share count is expected to be approximately $76 1 million diluted weighted average shares.

Mark Partin: We expect the non-GAAP operating margin to be in a range of 18 to 19%. And finally, we expect the non-GAAP net income attributable to Blackline to be in a range of $158 to $168 million, or $2.08 to $2.21 on a per share basis. Our share count is expected to be approximately 76.1 million diluted weighted average. With that, I'll now ask the operator to open the discussion to take your questions.

Speaker Change: With that I'll now ask the operator to open the discussion to take your questions.

Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A list. Our first question comes from Steve Enders with Citi. Your line is now open.

Speaker Change: Thank you at this time, we will conduct the question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again, please standby, while we compile the Q&A roster.

Speaker Change: Our first question comes from Steve Enders with Citi. Your line is now open.

Steve Enders: Okay, great. Thanks for taking the questions here. I guess I'm just gonna get a better sense for what you know, what you're seeing out there in the deal environment. I guess how much do you feel like it's just, a bit of a change in the way you go-to-market that you've made over the past, you know, past year or so, and those investments beginning to have an impact versus, you know, some improvement in the deal environment or some other, you know, competitive dynamics potentially changing here.

Steve Enders: Okay, great. Thanks, Ron Thanks for taking my questions here.

Speaker Change: <unk>.

Speaker Change: I guess, what I'm trying to get a better sense for the.

Speaker Change: What are you seeing out there on the deal environment.

Speaker Change: I guess, how much do you feel like it's just.

Speaker Change: A bit of a change in the go to market that you've made over the past year or so in.

Speaker Change: Those investments beginning to have an impact versus.

Speaker Change: Some improvement in the deal environment or some other competitive dynamic that potentially changing here.

Owen Ryan: So thanks, Steve, for the question. And I think the thing that we're seeing is that our deliberate focus on our execution and spending more time with our customers is beginning to have a very positive impact. I can't tell you that demand is increasing just because it's increasing. It feels to us like we're driving through our execution and performance and having those kind of real conversations with our customers that show the value that we can bring, and the impact that we can make is beginning to resonate well with our customers. But it certainly doesn't feel like we have a tailwind. It feels like we're working very hard for every opportunity to bring it to fruition.

Speaker Change: So thanks, Steve for the question and I think the thing that we're seeing is.

Speaker Change: Our deliberate focus on our execution and spending more time with our customers is beginning.

Speaker Change: A very positive impact.

Speaker Change: Can't tell you that the demand is increasing just because it's increasing it feels to us like we're driving through our execution performance is having those kind of real conversations with our customers that show the value that we can bring the impact that we can make is beginning to resonate with our customers, but it doesn't certainly feel like we have a tail.

Speaker Change: And it feels like we're working very hard for every opportunity to bring it to fruition.

Steve Enders: Okay, no, that's great to hear. I guess if we think a little bit about the revenue mix this quarter, it looks like the net new users came in pretty, pretty solid here and, you know, definitely improved from last quarter. I guess, was there kind of any change in terms of, you know, maybe, maybe module adoption or anything to call out for, you know, kind of what drove the solid sequential improvement in new users on the platform this quarter?

Speaker Change: Okay.

Speaker Change: That's great to hear.

Speaker Change: I guess, if we think a little bit about like the revenue mix this quarter it looks like the net new users.

Speaker Change: It came in pretty pretty solid here.

Speaker Change: Definitely improving from last quarter, I guess was there kind of any change in in terms of.

Speaker Change: Maybe maybe module adoption or anything to call out for kind of what drove the solid sequential improvement in the new users on our platform this quarter.

Owen Ryan: I think it ties to when we said we had good success in the enterprise space. What you're beginning to see is the efforts that we have, again, focused on the right kind of customers that can really take advantage of the Blackline platform. And so that's what drove that number.

Speaker Change: I think it ties to when we said we had good success in the enterprise space. What you are beginning to see is the efforts that we have again focused on the right kind of customers that can really take advantage of of the black line platform and so thats whats what drove that number.

Steve Enders: Okay, perfect. Thanks for taking the questions here.

Speaker Change: Okay perfect. Thanks for taking the questions here.

Steve Enders: Thank you Steve.

Operator: Our next question comes from Rob Oliver with Baird. Your line is now open.

Steve Enders: Thank you.

Speaker Change: Our next question comes from Rob Oliver with Baird. Your line is now open.

Rob Oliver: Great. Good afternoon.

Rob Oliver: Good afternoon, and thanks for taking my questions. The first is just on the congrats.

Rob Oliver: Congratulations on the deal.

Speaker Change: Alright product being included now with <unk>.

Rob Oliver: Thanks for taking my questions. The first is just on congratulations on the FRA product being included now with Solex. Can you talk a little bit about the potential pipeline for that product or the timing on that? Was that included in the basket for Solex as part of this quarter, or is that new? And then I guess maybe for Mark Partin, on the 25% contribution from SAP, should we expect that that number could grow as some of the initiatives around SAP and their move towards electronic conversions and stuff start to pick up? Is that your expectation? Thanks, guys.

Speaker Change: Can you talk a little bit about.

Speaker Change: The potential pipeline for that product or.

Speaker Change: The timing on that was that included in the in the basket for <unk> as part of this quarter or is that.

Speaker Change: New and then.

Speaker Change: I guess, maybe for Mark Carden on.

Mark Carden: 25% contribution from S&P should we expect that that number could grow as some of the initiatives around SAP.

Speaker Change: And their move towards that.

Speaker Change: We're highly conversions and stuff could start to pick up is that your expectation. Thanks guys.

Therese Tucker: Hi Rob. It's Therese, and I'll begin.

Speaker Change: Hi, Bob It's Theresa and I will begin.

Theresa: We are super pleased that S&P.

Speaker Change: P recognizes the valuable value that FRE is bringing to their enterprise group reporting.

Speaker Change: And the intent is that those get sold together, which again, it's a very very powerful combination.

Therese Tucker: We are super pleased that SAP recognizes the value that FRA is bringing to their enterprise group reporting, and the intent is that those get sold together, which is again, a very, very powerful combination. However, we did not have any deals this quarter under that partnership. However, we are putting together quite a nice little pipeline. Now, I can't promise anything in Q3 because it is SAP. It's typically larger enterprise deals, and timelines on those, I don't want to be predictive on that. But I am pleased with that development, and I'm pleased with what I'm seeing. Yeah, I think what that would do.

Speaker Change: We had we did not have any deals this quarter under that partnership. However, we are putting together quite a nice little pipeline.

Speaker Change: Now I can't promise anything in Q3, because it is S. P is typically larger enterprise deals.

Speaker Change: And timelines on those I don't want to be predictive on that but I am pleased with that development and I am pleased with what I'm seeing.

Owen Ryan: Yeah, I think what, just to add to that, so we got a lot of good publicity at the Sapphire conference where we got on the quote, the main stage to showcase that solution, and we think that there's a real ability for us to work very closely with SAP to drive great positive outcomes for our customers. So, still very early days, but we like what we're seeing so far. But, as we all know, it sometimes takes a little bit longer to sometimes get things done.

Speaker Change: Okay.

Speaker Change: Yes, I think what.

Speaker Change: Just to add to that so we've got a lot of good publicity at the Sapphire Conference, where we got on the call. The main stage to showcase that.

Speaker Change: Solutions did receive a lot of positive reaction.

Speaker Change: And we think that there is a real good ability for us working very closely with SAP to drive great positive outcomes for our customers. So.

Speaker Change: Still very early days, but we like what we're seeing so far but as we all know it takes a little bit longer to sometimes get things done.

Rob Oliver: Great, yep, thank you.

Rob Oliver: Thanks, Rob.

Rob Oliver: Thank you. Thank you.

Operator: Our next question comes from the line of Chris Quintero with Morgan Stanley. Your line is now open.

Speaker Change: Our next question comes from the line of Quest, Chris Quintero with Morgan Stanley. Your line is now open.

Chris Quintero: Hey, everyone. Thanks for taking our questions here. And congrats on the solid execution.

Chris Quintero: Hi, everyone. Thanks for taking our questions here and congrats on the solid execution.

Chris Quintero: Great to hear about the strong momentum in Europe, and APAC curious, where you think those areas are showing better growth is at the lower penetration rate there or is something else going on that's driving that outperformance versus versus U S.

Owen Ryan: Really great to hear about the strong momentum in Europe and APAC. Curiously, I think those areas are showing better growth. Is it the lower penetration rate there? Or is something else going on that's driving that performance versus the US?

Speaker Change: Well, I think obviously, where it looks little bit smaller in Europe, and APAC than we are in North America, but again I would be.

Chris Quintero: Well, obviously, we're a little bit smaller in Europe and APAC than we are in North America, but again, I would be remiss if I did not give our blackliners a lot of credit for execution. And they've really, since the beginning of the year, just understood what we're trying to do, how we're going to go about doing it, and they do what we've asked them to do and more. And that's just terrific, and I think that's just going to continue around the globe. So I am very, very confident in our ability to execute right now.

Speaker Change: Remiss, if I did not give our black or white or is a lot of credit for executing and.

Speaker Change: It really since the beginning of the year just understood. What we're trying to do how we're going to go about doing it and.

Speaker Change: And Theyre doing what we've asked them to do and more and that's just terrific and I think that's just going to continue.

Speaker Change: Around the globe, so very very confident in our ability to execute right now.

Owen Ryan: Got it. That's, that's helpful.

Speaker Change: Got it.

Speaker Change: That's helpful and then.

Speaker Change: The free cash flow margin being above 20% again is quite impressive.

Speaker Change: Great to hear how you're thinking about the growth versus margin equation.

Speaker Change: Are you thinking about it differently today.

Speaker Change: Especially kind of given the fact that you are approaching the high end of your medium term margin targets here.

Chris Quintero: And then the free cash flow margin being above 20% is quite impressive. So it would be great to hear how you're thinking about the growth versus margin equation. Are you thinking about it differently today, especially given the fact that you're approaching the high end of your medium-term margin targets here? Yeah, we've been super pleased.

Owen Ryan: Yeah, we've been super pleased with the performance of the business. Both the accounting team that's generating the extra cash and just the business model from a profitability standpoint. We're a low capex, high margin business that generates free cash flow. And I think we've been proving that, you know, sort of quarter after quarter and expect to keep putting the pressure on and driving free cash.

Speaker Change: Yes, we've been Super pleased with the performance of the business.

Speaker Change: Both the accounting team that's generating the extra cash is just the business model from a profitability, where a low capex high.

Speaker Change: Margin business, which generates free cash flow and I think we've been proving that.

Speaker Change: After quarter unexpected.

Speaker Change: Putting the pressure on and driving free cash flow.

Speaker Change: Excellent. Thank you.

Speaker Change: Thank you.

Operator: Our next question comes from Matt VanVliet with BTIG.

Speaker Change: Our next question comes from Matt Van Vliet with BT I G.

Matt VanVliet: Yeah, good afternoon. Thanks for taking the time to ask the question. I guess first, on the AI front, Therese, you mentioned continuing to embed more functionality, sort of gaining the trust and confidence of customers. I'm curious how you're thinking of that longer term. How do you monetize? The AI development you have, are you anticipating sort of standalone modules that you use there, or is this really just driving the value over the cost component that Owen mentioned?

Speaker Change: Yes. Good afternoon. Thanks for taking the question I guess first on the.

Speaker Change: Ron I'm curious you mentioned.

Speaker Change: Continuing to embed more functionality sort of gaining the trust and confidence of customers.

Speaker Change: <unk> on how you're thinking about longer term, how do you monetize that.

Speaker Change: The AI development, you have or are you anticipating sort of a stand alone.

Speaker Change: Modules that you use there or is this really just driving the value over the cost component that I had mentioned.

Therese Tucker: Both. Both, Matt.

Speaker Change: So both Matt So first off by you know I think that embedded AI is going to become table Stakes and I think if you implement it properly then your customers get a lot more value and that creates a stickiness that.

Therese Tucker: So first off, you know, I think that embedded AI is going to become table stakes. And I think if you implement it properly, then your customers get a lot more value. And that creates a stickiness that I really, really want to see with our customers and our products. Secondly, I think the ability to create new products that are very specifically Gen AI driven can do some amazing things. Those things are very easily monetizable.

Speaker Change: I really really want to see with our customers and our products Secondly, I think the.

Speaker Change: Our ability to create new products that are very specifically gen. AI driven they can do some amazing things those things are very easily monetize at all.

Therese Tucker: Okay, so they are, so I think both embedded increases stickiness and not really so much looking to monetize, you know, and nickel and dime our customers to death on those. I think there'll be table stakes, and absolutely products like our new Journals Risk Analyzer are going to be super important to leverage and monetize AI in a way that our customers are delighted in.

Speaker Change: So they are so I think both embedded increases stickiness and not really so much looking to monetize.

Speaker Change: And nickel and dime, our customers to us on those I think there'll be table Stakes and absolutely products like our new journals risk analyzer are going to be super important to leverage and monetize AI in a way that our customers are delighted in.

Owen Ryan: All right, very helpful. And then I wanted to just maybe dig a little bit deeper on some of the increased partner participation, both at your events and, obviously, on the deal flow with 85% of your deals, including that. Curious, you know, is this just sort of a steady improvement in the relationship with those partners? Is there something very specific that has been implemented over the last few months that you're seeing definitive upside from? Just maybe help us understand how that's progressing today and what we should expect maybe for the back half of the year. Yeah, remember, you know. I think we

Speaker Change: All right very helpful. And then I wanted to just maybe dig a little bit deeper on <unk>.

Speaker Change: Some of the increased partner participation both at your events and obviously on the deal flow.

Speaker Change: <unk> 85.

Speaker Change: Fields, including not curious.

Speaker Change: Is this just sort of a steady improvement of the relationship with those partners is there something very specific that has been implemented over the last few months that youre seeing a definitive upside from just maybe help us understand how that's progressing today and what we should expect maybe for the back half of the year remember.

Owen Ryan: Yeah, remember, you know? I think we shared a while back that we created, if you will, a contract between our partners and ourselves of what they could expect from us and what we expected in return. As you know, we also have dramatically reduced the number of partners we have worked with dramatically because we're really trying to focus and deepen those relationships from the very top of the firms that we deal with all around the globe across all of our portfolios and in the markets that we're trying to serve.

Speaker Change: I think we shared a while back that we created if you will a contract between our partners and ourselves of what they can expect from us and what we expected in return as you know we also.

Speaker Change: <unk> reduced the number of partners, we work dramatically with because we're really trying to focus and deepen those relationships and the depth very top of the firms that we're dealing with all around the globe across all of our portfolio and in the markets, where we're trying to serve and that is just beginning to show up day after day after day and how.

Owen Ryan: And that is just beginning to show up day after day after day in how we're working through new opportunities, how we try to improve optimization, and how they're helping Therese and the team think about product enhancements. There's just a really good momentum that is building, and we expect it to continue to build as we move forward with these partners. I think they're excited about the fact that they're in the tent with us and we're really trying to make them true partners in a way that maybe, you know, we see with software firms and their system integrators.

Speaker Change: We're working through new opportunities how to try to improve optimization, how they're helping <unk> and the team think about product enhancements.

Speaker Change: There's just a real good momentum that is building and we expect is going to continue to build.

Speaker Change: As we move forward with these fires I think they're excited about the fact that they are in the tech with us and we're really trying to make them two partners in a way that maybe we see with <unk>.

Speaker Change: Software firms in their system integrators.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Matt VanVliet: Great. Thank you. Thank you. Our next question comes from Pat Walravens with Citizens JMP. Your line is now open.

Speaker Change: Our next question comes from Pat Wall Ravens with citizens JMP. Your line is now open.

Speaker Change: Oh, great. Thank you and congratulations.

Speaker Change: Oh and I was I was intrigued by the part of your script, where you talked about.

Speaker Change: Bundling consolidation and close and so I was wondering if you could just sort of remind us.

Speaker Change: And maybe Theresa will pitch in here that the history of the consolidation capability.

Speaker Change: And then tell us sort of in the go to market why why you're calling that out now.

Operator: I think the short version, and Therese will definitely add to this, and it's good to hear from you, Pat. Hope you had a good vacation while you were away a little bit.

Speaker Change: I think the short version of Teresa will definitely add to this and good to hear from you bet, okay adequate vacation whether away a little bit.

Owen Ryan: Look, I think, you know, obviously, financial close is at the heart of what we've been doing. Our customers have been asking us for a while now to help them with consolidation. Therese and the team went out and built our financial reporting and analytics tool, which also had a consolidation capability. One of the things that we started to really experience within the middle market, specifically, was our customers taking the FRA tool and using it for consolidation and then encouraging us to continue to invest in it.

Speaker Change: Look I think.

Theresa: We see financial close is at the heart of what we've been doing our customers have been asking us for a while now to help them with consolidation to recent the team went out and built our financial reporting and analytics tool, which also had a consolidation capability one of the things that we started to really experience was in the middle market.

Speaker Change: <unk> is our customers, taking the fri tool and using it for consolidation and encouraging us to continue to invest in and that's where again the voice of our partners and our customer has become so important and how we innovate and try to meet them, where they are and so that's sort of been the evolution and I think just in this last year we have.

Owen Ryan: That's where, again, the voice of our partners and our customers becomes so important in how we innovate and try to meet them where they are. And so that's sort of been the evolution. And I think just this last year, we have a dedicated pillar leader on our CFA team. He's working really well with our financial close team going out to talk to our customers about a more holistic journey.

Speaker Change: A dedicated pillar leader around our CFS team. He is working really well with our financial closing going out to talk to.

Reach: To our customers about a more holistic journey, our customers deciding not only do they want a financial close but they want consolidation as part of that so as we continue to evolve and build out our platform I think youre going to see more and more of that as we drive success, but I am not the platform experts, let's turn it over to reach they add a lot more to that.

Owen Ryan: Our customers are deciding not only do they want financial codes, but they want consolidation as part of that. So as we continue to evolve and build out our platform, I think you're gonna see more and more of that as we drive success. But I'm not the platform expert, but I'll turn it over to Therese. They add a lot more to that. Pat, thanks for the great question.

Therese Tucker: One of the reasons that this combination is so powerful is because the information that comes in the Blackline comes way upstream. So we have some very, very granular information. So when you flow that into consolidation and reporting, you get this end-to-end transparency that customers absolutely love. For example, you can drill into any line on your balance sheet and see precisely how that number was calculated. You can look at the underlying racks or variance analyses that are tied to some general ledger account in some other business unit and learn precisely why things were flowing in a certain way. So it's that end-to-end ability, starting with some very granular data, that makes this a very powerful combination.

Pat: Pat Thanks for the Great question, one of the reasons that this combination is so powerful is because the information that comes in the Black line comes way upstream.

Therese Tucker: Thank you. Any time. Our next question comes from Alex Schuyler with Raymond Jane. Your line is now open.

Pat: So we have some theory very granular information so when you flow that into consolidation and reporting you get this end to end transparency.

Pat: That customers absolutely love. So you can drill into any line on your balance sheet and see precisely how that number was calculated you can look at the underlying racks or variance analyses that are tied to.

Pat: Some general Ledger account in some other business units and learned precisely why things were flux in a certain way. So it's that end to end ability starting with some very granular data that makes us a very powerful combination.

Speaker Change: Okay. That's great. Thanks for that perspective, both of you.

Speaker Change: Thank you any time.

Speaker Change: Our next question comes from Alex Skylar with Raymond James Your line is now open.

Operator: Great, thank you. Just in terms of the strategic product bookings, really nice results in terms of mix this quarter. I just want to get an update on what you've seen in terms of the results of having the four pillar heads in place, a big step up in the 1 million plus customers, I assume that's kind of all tied in, but what changed there with strategic products versus recent quarters? And then, just to follow up, any way to think about the mix of strategic product opportunities in your pipeline relative to that bookings mix? Could this be kind of a new normal level? Thanks.

Alex Skylar: Great. Thank you just in terms of the strategic product bookings really nice results in terms of mix. This quarter I just wanted to get an update what you've seen in terms of the results of having the four pillar heads in place.

Alex Skylar: A big step up in the 1 million plus customers I assume that's kind of all tied in but what changed there with strategic products versus recent quarters and then just a follow up any way to think about the mix of strategic product opportunities in your pipeline relative to the bookings Mexico could this be kind of a new normal level. Thanks.

Owen Ryan: So I think probably the most important thing that's changed is we have dedicated pillar leaders across each of what we're trying to do, and that has had a profound impact, not only on what we're trying to do in the marketplace, but also around the product, how we promote that, how we go after pipeline, and that is just responding its way up and across the whole organization in a very, very positive way. And what's really critical about that is that the four pillar leaders work super well together. They understand their success, and we've aligned their goals to make sure that not only are they successful individually, but as a team, and that's having a really good, positive impact.

Speaker Change: So I think probably the most important thing Thats changed is we have dedicated pillar leaders across each of what we're trying to do and that is that.

Alex Skylar: A profound impact not only in what we're trying to do in the marketplace, but also around the product how we promote that how we go after pipeline and that is just resonating its way up and across the whole organization and a very very positive way and what's really critical about that as the four pillar leaders worked super well together they understand their success and we've aligned their goals.

Speaker Change: To make sure not only are they successfully individually, but as a team and that's having a really good positive impact. So then what does that mean for us as we move forward I think it would suggest that.

Owen Ryan: So then, what does that mean for us as we move forward? I think it would suggest that our strategic products should continue to do well. We're starting to see some growth in the pipeline that was highlighted in the prepared remarks, and we're excited about what the possibilities are. That's why we built out these strategic products, and so I don't want to commit to that being the new norm, but that said, we're bullish on the fact that we're starting to really get some good traction with these products in the market.

Speaker Change: Our strategic products should continue to do well, we're starting to see some growth in the pipeline as it was highlighted in the prepared remarks.

Speaker Change: And and we're excited about what the possibility is thats why we built up the strategic products in.

Speaker Change: And so I don't want to commit to you that's going to be the new norm.

Speaker Change: But that said we're bullish on the fact that.

Speaker Change: We're starting to really get some good traction with these products in the marketplace.

Owen Ryan: Okay, great color there, Owen. Mark, maybe one follow up for you. If we look at kind of the implied fourth quarter operating margin, it's a bit below second quarter and third quarter. Is that just timing for Beyond the Black this year or anything in terms of increasing levels of investments planned for exit in the year? Thanks. Uh, you got it. It's our...

Speaker Change: Okay.

Speaker Change: Okay, great color there Mark maybe one follow up for you. If we look at kind of the implied fourth quarter operating margin, it's a bit below second quarter and third quarter.

Speaker Change: Is that just timing of.

Speaker Change: Beyond the black this year or anything in terms of increasing level of investments plan for exiting the year. Thanks.

Mark Partin: You got it. It's our large customer event that's going to take place in the fourth quarter this year, BTB. And so that actually creates some variability in quarter to quarter operating margin.

Alex Schuyler: Thanks, Alex. Thank you. Our next question comes from Pinjalim Bora with J.P. Morgan. Your line is open.

Speaker Change: You got it.

Speaker Change: Our large customer event, that's going to take place in the fourth quarter. This year.

Speaker Change: BTB and so that actually create some variability in quarter to quarter operating margin.

Alex Skylar: Thanks, Alex.

Speaker Change: Thank you.

Operator: Our next question comes from Pinjalim Bora with J.P. Morgan. Your line is now open. Oh, great. Hey, thanks for taking my question.

Speaker Change: Our next question comes from Pangolin Bora with Jpmorgan. Your line is now open.

Pangolin Bora: Oh, Great Hey, Thanks for taking my questions two questions from my button it.

Pangolin Bora: It seems like the dollar churn has been stable, but you called out the logo churn I wanted to know if that's basically in the low end of the strip spectrum and any change in the dollar churn across mid market and enterprise and how should we think about the net retention through the rest of the year.

Pinjalim Bora: Thanks, Benjamin. Yeah, interesting Q2 was a pickup in the enterprise that actually improved to 95%. So enterprise got better, which was something we were looking for. The mid market ticked down in the high 80s from what it had been in the low 90s.

Speaker Change: Thanks, Susan yes on the renewal rate interested in Q2 was a pickup in the enterprise that actually improved to 95%. So enterprise got better which was something we were looking for the Midmarket ticked down high <unk> from the from what it had been in the low 90.

Mark Partin: And this was intentional, a choice, as we've talked about in terms of sharpening our targeting and focus in the mid market to go out to the higher range. And so burning through some of that on the low end created a bit of noise in the renewal rate. On the retention rate, that's a function, of course, of the lower renewal rate, but also, you know, it is a macro-driven number. Our ability to expand and grow within the accounts, and our ability to maintain positive attrition in the accounts can be impacted by macro.

Speaker Change: And this was intentional choice as we've talked about in terms of sharpening, our our targeting and focus in the mid market to go after the higher range and so burning through some of that on the low end that created a bit of noise in the renewable rates.

Speaker Change: On the <unk>.

Speaker Change: The retention rate, that's a function of course of the lower renewal rate, but also it is.

Speaker Change: Macro.

Speaker Change: Driven number our ability to expand and grow within the accounts our ability to.

Speaker Change: To maintain a positive attrition in the accounts can be impacted by macro Fortunately in Q2, we saw some real.

Mark Partin: Fortunately, in Q2, we saw some real improvements in the customers that did renew. We were able to extend their lifetimes. We had one of the largest average durations of contracts that we renewed in the quarter, and we strengthened our relationships and our resolve among the customers that renewed in Q2 that stuck around. So from that standpoint, it was a positive. Driving that retention rate higher in the future isn't just a matter of macro.

Speaker Change: Improvements and the customers that did renew we were able to extend their lifetime. We have one of the largest average duration of contracts that we renewed in the quarter and we strengthened our relationships and our resolve in the customers that renewed in Q2 that stuck around.

Speaker Change: So from that standpoint, it was a positive driving that retention rate higher in the future isn't just the macro it's our ability to upsell and cross sell strategic products in these accounts and we're demonstrating that the pillar operating model.

Mark Partin: It's our ability to upsell and cross-sell strategic products in these accounts, and we're demonstrating that the pillar operating model, as well as our focus on product innovation, is making a difference. We just haven't seen it show up in that number yet, and that'll take a little bit of time.

Speaker Change: As well as our focus.

Speaker Change: Product innovation is making a difference.

Speaker Change: Just haven't seen that show up in that number yet and that will take a little bit of time.

Pinjalim Bora: Got it very clear. Thank you. Thank you. Thank you. Our next question comes from Adam Hotchkiss with Goldman Sachs. Your line is now open.

Speaker Change: Got it thank you.

Operator: Thank you. Our next question comes from Adam Hotchkiss with Goldman Sachs. Your line is now open.

Adam Hotchkiss: Yeah, Adam, look, I think since Therese and I both came into the role, one of the things we thought about was how we continue to both deepen and broaden the platform with natural extensions of what the office of the CFO would expect and what our partners are seeing also in the marketplace. So we continue to look, we've been looking since the beginning, about where best to put our capital. We're very diligent.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Adam Hotchkiss with Goldman Sachs. Your line is now open.

Adam Hotchkiss: Great. Thanks, so much for taking the question I just wanted to follow up on the <unk>.

Speaker Change: Consolidation and platform discussion now.

Adam Hotchkiss: Now that you've cleaned up some of the nearer term converts and have liquidity through 2029, I guess, how are you thinking about with the most natural platform Adjacencies.

Speaker Change: You could potentially big into from an M&A perspective, just any color around capital allocation would be useful.

Adam Hotchkiss: I think one of the things you probably could pick up from the way the operating model and operating margin are improving is that neither Mark, myself, or Therese want to waste any money. So we'll keep looking. And if the right thing is there, then we'll pounce on it. But we're not going to do anything that doesn't make economic sense for our shareholders.

Speaker Change: Yes, Adam look I think since <unk> came into the role one of the things. We thought about is how do we continue to both deepen and broaden the platform with natural extensions of what the office of the CFO I would expect and what our partners are seeing oxo in the marketplace. So we continue to look at them looking since the beginning.

Speaker Change: <unk> about where best to put our capital we're very.

Speaker Change: <unk> I think that you probably could pick up in the way the operating model operating margin is improving is that neither mark myself or to reason want to waste any money. So we will keep looking.

Speaker Change: And if the right thing is there then we'll pounce on it but we're not going to do anything that doesn't make economic sense for our shareholders.

Speaker Change: Okay got it thanks, so much.

Speaker Change: Thank you.

Owen Ryan: Our next question comes from Brent Bracelin with Piper Sandler. Your line is now open.

Speaker Change: Our.

Speaker Change: Question comes from Brent bracelet with Piper Sandler Your line is now open.

Operator: Thank you for taking the question here. Good afternoon.

Brent Bracelin: I wanted to go back to SAP. SAP is clearly an important partner for you. They reported here a couple weeks ago, and we're finally starting to see an acceleration in their business and enterprise spend around ERP modernization with that end of support coming here in 2027. Walk us through what you are seeing relative to that partnership and opportunity as customers move from ECC to S4HANA? Are those opportunities that are percolating now, or do you kind of have to wait till the end of the migration before you try to upsell them additional blackline functionality? Thanks.

Speaker Change: Thank you for taking the question here. Good afternoon I wanted to go back to SAP SAP is clearly an important partner for you.

Speaker Change: They reported here a couple of weeks ago, we're starting to see finally.

Speaker Change: And acceleration in their business and enterprise spend around ERP modernization with that end of support coming here in 2027.

Speaker Change: Walk us through what are you seeing relative to that partnership and opportunity as customers move from ECC to ask for Honda.

Speaker Change: Is that are those opportunities that are percolating now or do you kind of have to wait till the end of the migration before you try to up sell them additional black line functionality.

Owen Ryan: Yeah, a couple points to that. One is the relationship with SAP continues, and the problem gets worse.

Speaker Change: Yeah, a couple of points to that so one is the relationship with SAP continues to grow and get stronger <unk> and I were exchanging messages with their CEO today trying to continue to get together and make sure that we keep the momentum that we have.

Owen Ryan: Therese and I were exchanging messages with their CEO today, trying to continue to get together and make sure that we keep the momentum that we have built. Obviously, we've talked about the fact that relationships can be had at the top of the organization, but what's most important is in the field and out of the accounts. And I think that's where we're seeing maybe the most progress and the most critical markets where those relationships are, in fact, building.

Speaker Change: Built obviously, we've talked about the fact that the relationships.

Speaker Change: Can have them at the top of the organization, but what's most important is in the field and how that accounts and I think thats where were seeing maybe the most progress in the most critical markets rug with those relationships are in fact building I think one of the interesting things that.

Owen Ryan: I think one of the interesting things that the SIs would tell us about what we're seeing with SAP and with blackline is that many of our customers are looking for early wins in their SAP migration, and going with blackline first actually shows to the organization that they can have success in their digital transformation. And so there's been many situations now since the beginning of the year where there's going to be an S4 implementation, but Blackline has been on the front end of that versus on the back end of it.

Speaker Change: Size would tell us what we're seeing with SAP and with Black line is that many of our customers are looking for early wins in there in their SAP migration and going with bottling first actually shows to the organization that they can have success in their digital transformation and so there has been many situations now since the beginning of the year.

Speaker Change: Theres going to be an S. Four implementation, but black line has been on the front end of that versus on the back end of it and so we're seeing some positive signs in that regard I think it's still very early innings for the S&P.

Owen Ryan: And so we're seeing some positive signs in that regard. I think it's still very early innings for the SAP S4 migration, but we're well connected to it and are optimistic that it will bear fruit in the months and years ahead. And then maybe Mark, for you, just following up on the strategic product category, I think that 20% mix was the highest we've seen in two and a half years.

Speaker Change: Sure.

Speaker Change: Migration, but we're well connected to it and are optimistic.

Speaker Change: So bear fruit in the amongst in years ahead.

Speaker Change: Helpful color, there and then maybe Mark for you just following up on the strategic product.

Speaker Change: Category I think that 28% mix was the highest we've seen a two and a half years. It did come in below your plan last quarter kind of above expectation range here towards the high end of this quarter.

Owen Ryan: It did come in below your plan last quarter, and kind of above the expectation range here towards the high end of this quarter. Do you think that's just, you know, the timing of when some of those strategic deals closed, we shouldn't read into it? Or are there early signs that suggest maybe you are seeing an inflection on strategic product adoption?

Mark: Do you think that's just.

Speaker Change: The timing of when some of those strategic deals closed we shouldnt read into it or are there early signs that suggest maybe you are seeing an inflection on the strategic product adoption front.

Mark Partin: Yeah, I think that's a really good question. I would say Q1, an anomaly on the low side, and I would say in Q2, what we saw was a very strong average deal size. We saw very strategic deals getting done. We didn't see the same slip deals, you know, that we saw in Q1.

Speaker Change: Yes, I think Thats a really good question I would say Q1, an anomaly on the low side and I would say in Q2 was what we saw was.

Mark: A very strong average deal size, we saw very strategic deals getting done we didn't see the same slipped deals that we saw in Q1, we brought things over the line we meant to that had strategic.

Speaker Change: Products in fact every strategic pillar performed and performed well and and performed globally in the enterprise and the mid market. So it was from my standpoint from from the from the Cfo's view that kind of diversity and breadth in strategic products looks very.

Mark Partin: We brought things over the line we meant to that had strategic products. In fact, every strategic pillar performed and performed well and performed globally, and the enterprise performed in the mid market. So it was, from my standpoint, and from the CFO's point of view, that kind of diversity and breadth in strategic products looks very good, and it's in the pipeline that way. And I think this operating model is contributing to being able to bring these in and, just as importantly, close them out at the end of the day.

Mark: Good.

Speaker Change: And the pipeline that way and I think this operating model is contributing to being able to bring these in and just as importantly, close the amount at the end of the day so.

Brent Bracelin: It can be variable from quarter to quarter. We thought this year we could operate in the 25 to 30% range. That was sort of our intended target for the strategic portfolio. And it looks like, you know, in Q2, we were on the high end of that. So, I'm super pleased with it.

Speaker Change: It is early and it can be variable from quarter to quarter.

Speaker Change: We thought this year, we could operate in the 25% to 30% range that was sort of our intended target.

Speaker Change: For the strategic portfolio and it looks like in Q2, we were on the high end of that so we're super pleased with it.

Operator: Helpful color there, thank you. Thank you. Thank you. Our next question comes from Terry Tillman with TRIST. Your line is now open.

Speaker Change: Helpful color there. Thank you.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question comes from Terry Tillman with tourists. Your line is now open.

Speaker Change: Hi, This is Dominique <unk> on for Terry Thanks for taking my question could.

Dominique: Could you just elaborate on how youre collaborating partners to develop enhanced the accounting CEO I'm also just curious to know if there are any specific regions or markets, where you expect to see higher partner engagement.

Terry Tillman: We have had quite a bit of input from our partners, and if you think about it, our partners are really experts around the reengineering of processes to get some great efficiencies out of operations. And so the ability to take that expertise and actually visually represent it in a work stream that can then be automated is a really powerful capability that Studio brings.

Speaker Change: We have had quite a bit of input from our partners and if you think about it our partners are really experts around the reengineering of processes to get some great.

Speaker Change: <unk> six out of operations and so the ability to take that expertise.

Speaker Change: And actually visually represented in a work stream that can then be automated is a really powerful.

Speaker Change: Capability that studio brings.

Speaker Change: Scares me.

Therese Tucker: Therefore, we have been getting quite a bit of feedback from our partners on the types of capabilities, the types of APIs, the types of things that they would want to see visually represented inside of Studio. With that, over the longer term, we want this to become a repository where our partners can really put their very specific intellectual property around process engineering. So I think it's going to be a really nice way to showcase all the expertise that our partners bring, and they have been very helpful in developing the capabilities that we currently have. I think of the geographic.

Mark: Therefore, we have been getting quite a bit of feedback from our partners on the types of capabilities. The types of api's. The types of things that they would want to see visually represented inside a studio.

Mark: With that over the longer term.

Mark: Losing my voice one second.

Mark: Over the longer term, we want this to become a repository.

Mark: Our our partners can really put their very specific intellectual property around process engineering.

Speaker Change: So I think it's going to be a really nice way to showcase all the expertise that our partners bring and they have been very helpful. In developing the capabilities that we currently have.

Owen Ryan: I think on the geographic split of what we're seeing, it's pretty strong around the world. I think one thing I would just observe though, because we haven't really picked out and given it credit, which is the teaming with Blackline and with our partners. Yes, it's on the sales force, but it's also with Blackline's own professional services team. And what we're seeing is a tighter linkage there of working together to bring the best of both to our customers and driving more success.

Speaker Change: I think on the geographic split of what are we seeing it's pretty strong around the world I think one thing I would just observe though because we haven't really given it credit which is the teaming with black line and with our partners. Yes. Its on the sales force, but it's also with <unk> professional services team and.

Speaker Change: What we're seeing is tighter.

Speaker Change: Tighter linkage there of working together gather to bring the best of both to our customers and driving more success. So we're very pleased with how it's evolving around the globe.

Owen Ryan: So we're very pleased with how it's evolving around the globe. Like I said, for our largest ones in particular, they really have stepped up their efforts to make sure they have resources in the critical geographies that Blackline is trying to drive, where there are people that are certified to serve, if you will, on implementing Blackline.

Speaker Change: For our largest funds in particular, they've really stepped up their efforts to make sure. They have resources in the critical geographies that black line is trying to drive where there are people that are certified to serve if you will on implemented implementing black line.

Speaker Change: Great to hear thank you.

Operator: Our next question comes from Koji Ikeda with Bank of America. Your line is now open.

Mark: Our next question comes from Koji Ikeda with Bank of America. Your line is now open.

Koji Ikeda: Hey guys, thanks for taking the questions. So I wanted to ask a follow-up on the medium-term targets and specifically about free cash flow and the kind of growth and free cash flow generation algorithm. You know, with free cash flow on the margin side already above the medium-term targets, we're getting close to being in the window for medium-term targets. How do you think about, you know, maybe the potential for flexing free cash flow upside down or investing it back a little bit further to press on the gap a little bit for revenue growth? And I guess where I'm going with this is, could we come into a period where we're bringing down free cash flow margins a bit to drive that higher revenue?

Koji Ikeda: Yeah, Hey, guys. Thanks for taking the questions.

Koji Ikeda: So I wanted to ask a follow up on the medium term targets and specifically about free cash flow and kind of the growth in free cash flow generation algorithm with free cash flow on the margin side already above the medium term targets.

Speaker Change: We're getting close to being in the window for medium term targets, how do you think about.

Speaker Change: Maybe the potential for flexing free cash flow upside down or investing it back a little bit further depressed on the gas a little bit for revenue growth and I guess, where I'm going with this is could we come into a period, where we're bringing down free cash flow margins a bit to drive that higher revenue growth.

Mark Partin: Yeah, thanks, Koji. It's a great question. Obviously, the management team here is spending a lot of time looking at the opportunities. It's a large market. It's a new leadership team.

Koji Ikeda: Okay.

Koji Ikeda: Yes, Thanks, Koji, it's a great question and obviously the management team here is spending a lot of time.

Speaker Change: Looking at the opportunities, it's a large market and some new leadership team.

Speaker Change: Are constantly reviewing places where we can invest.

Speaker Change: And put money to work to drive greater growth to bring more capabilities to our customers at the moment at the beginning of our planning process with management I don't want to get out in front of that.

Mark Partin: We are constantly, you know, reviewing places where we can invest and put money to work to drive greater growth and bring more capabilities to our customers. At the moment, at the beginning of our sort of planning process with management, I don't want to get out in front of that. And so we'll come back at some point after evaluating and making some choices.

Speaker Change: And so we will come back at some point after evaluating and making some some choices, but our guidance for this year, we have high confidence that we can deliver the growth.

Mark Partin: But in our guidance for this year, we have high confidence that we can deliver the growth, the investment, and the innovation that we talked about in our discussions with you about these ranges. We've always had a very elegant business model that can drive cash, can drive margins, and we've turned it on this year, but we've also been very careful to invest in the go-to-market, where today we have more capacity and capability than we've had, maybe ever.

Speaker Change: And the investment and the innovation that we've talked about in our discussions with you.

Speaker Change: With these ranges are.

Koji Ikeda: We've always had a very elegant business model that can can drive cash can drive margins and we've turned it on this year, but also been very careful to invest in the go to market, where today, we have more capacity and capability than we've had maybe ever we have the highest ranked group of salespeople tenure.

Mark Partin: We have the highest-ranked group of salespeople, tenured sales leaders around the company. We have a lean, efficient, operating R&D model that has not just gone around the globe to find talent and to be more efficient but is also investing real money in new product innovation. So I'm optimistic that free cash flow can be a great asset for us in the coming years. But I'm also keen to drive growth, put money or wood behind the arrow, and really drive greater growth towards our model. So let me kind of end it there, and we can come back to you guys another time.

Koji Ikeda: Sales leaders around the company, we have a lean and efficient operating R&D model that has not just gone around the globe to find talent and to be more efficient, but it's also putting real money around new product innovation. So.

Koji Ikeda: Im optimistic that free cash flow, Ken can be a great asset for us in the coming years.

Ken: But I'm also keen to drive growth puts money.

Ken: Wood behind the Arrow and really drive.

Koji Ikeda: Later growth towards our model.

Ken: So let me let me kind of ended there and we can come back to you guys. Another time.

Koji Ikeda: No, thank you for that, Mark. That's super helpful.

Speaker Change: No. Thank you for that that Mark that's super helpful and just a follow up here on kind of the demand environment. Maybe a question for treats are Oh, and just broadly within the office of the CFO are you beginning to notice that wallets are beginning to open up a little bit more for technologies in the office of the CFO are you noticing any <unk>.

Owen Ryan: And just a follow-up here on kind of the demand environment, maybe a question for Treats or Owen. You know, just broadly within the Office of the CFO, are you beginning to notice that wallets are beginning to open up a little bit more for technologies in the Office of the CFO? You know, are you noticing any difference in sales cycles or maybe the number of acquired signatures or, you know, maybe some pent-up demand for the Office of the CFO digital transformations that's beginning to pick up right now? Thanks, guys.

Speaker Change: For instance in sales cycles, or maybe the number of required signatures or maybe some pent up demand for the office of the CFO digital transformation is beginning to pick up right now thanks guys.

Owen Ryan: Yeah, so I spend a lot of my time talking to customers and prospects and out with our partners. I would say the additional sign-offs have not gone away. In fact, I would say CFOs more often now seem to be referringeeing between a CIO and a CTO as to what the decisions are going to be made.

Speaker Change: Yes, so I spend a lot of my time talking to customers and prospects.

Speaker Change: With our partners.

Speaker Change: Would say.

Speaker Change: The additional sign offs have not gone away if anything I would say CFO is more often now seem to be refereeing between the CIO and the CIO as to what the decisions are going to be made I wouldn't say that there is a an opening of the check book, but I think theres been more willingness if you can truly show.

Owen Ryan: I wouldn't say that there's an opening for the checkbook, but I think there's been more willingness to, if you can truly show and demonstrate the value you're going to bring to that customer and that they're going to get an ROI in a pretty reasonable time period, then that has the opportunity to open the door. I think that's where we have gotten better as a team by really demonstrating the value we can deliver to our customers and making sure it's going to get implemented the right way.

Speaker Change: Demonstrates the value youre going to bring to that customer and that theyre going to get an ROI and a pretty reasonable time period.

Speaker Change: That has the opportunity to open the door I think thats, where we have gotten better as the team is really demonstrating the value we can deliver to our customers and making sure it's going to get implemented the right way and Thats. The combination of our partners and our Black Knight professionals to make sure the value of the Black line software delivers on the promise that we.

Owen Ryan: And that's the combination of our partners and our Blackline professionals to make sure that the value of the Blackline software delivers on the promise that we make to our customers. And so that's what we see is helping us to win, and we're going to keep driving that as we move forward. I wish the wallets were open more easily, but I would say we're still trying to pry them open a little bit more than just people throwing bucks out of them at this point in time.

Speaker Change: We make to our customers.

Speaker Change: That's what we see is helping us to win.

Speaker Change: And we're going to keep driving that as we move forward I wish the wallets were open more.

Speaker Change: Easily, but I would say, we're still trying to priam opened a little bit more than just people throwing box out of the out of them at this point in time.

Operator: Thank you. Our next question comes from Daniel Jester with BMO Capital Markets. Your line is now open.

Speaker Change: Thank you. Our next question comes from Daniel Jester with BMO capital markets. Your line is now open.

Daniel Jester: Yeah, great, thank you for taking my question. So in the prepared remarks, digital self-service was mentioned a few times, I think. Maybe can we expand on sort of what this means for Blackline in particular, and how you think you could influence your go-to-market from this? And then secondly, Mark, I apologize that I missed this earlier, but it does look like on the revenue guidance that the fourth quarter picks up a little bit. I think the comp is easier year over year, but is there anything else you'd call out about the seasonality of revenue this year?

Daniel Jester: Yeah, great. Thank you for taking my question. So in the prepared remarks digital self service was mentioned a few times I guess, maybe can we expand on sort of what this means for black line in particular and how do you think you could influence your go to market.

Owen Ryan: Thank you.

Speaker Change: And then secondly, Mark I apologize if I missed this earlier, but it does look like on the revenue guidance for the fourth quarter.

Speaker Change: Picks up a little bit I think the comp is easier year over year, but is there anything else you'd call out about the seasonality of revenue. This year. Thank you.

Mark Partin: On self-service, what we're seeing is so many of the questions that our customers ask sort of repeat. And so what we've been able to do is now really try to provide a place, a repository where they can have their questions easily responded to. And we think we're just going to continue to be able to build that kind of database so it makes it easier for our customers and, quite frankly, for our partners who are helping drive implementation.

Speaker Change: It is on the self service.

Speaker Change: But we are seeing as so many of the questions that our customers asked sort of repeat and so we've been able to do is now really try to provide a place a repository for they can have their questions easily responded to and we think we're just going to continue to be able to build that kind of database. So it makes it easier for our customers and quite frankly for our partners.

Mark Partin: So that idea of self-service is something we've been asked more and more for by our customers, and we're responding to that request, and I think we're just really scratching the surface on that at this particular point in time. So let's stay tuned for a little bit more, and I'll turn it over to Mark.

Speaker Change: Who are helping drive implementation so that idea of self service is something we've been asked more and more of by our customers and we're responding to.

Speaker Change: To that request and I think there were just really even scratching the surface on that at this particular point in time, so let's stay tuned for a little bit more and then.

Daniel Jester: Thanks, Dan. Our rest of year guide picks up for the remainder of the year. However, it balances against some conservatism. So while there might be some minor uptick in Q4, that could be related to timing, it could be related to seasonality, but there's not a material difference from here to the end of the year in what we think about Q3 and Q4 from a revenue perspective. So the guide is just for us to continue, you know, sort of moving at this pace with appropriate pragmatism.

Speaker Change: Then I'll turn it over to Mark yes, Thanks, Dan.

Mark: Our rest of year guide does pick up for the remainder of the year. However, it balances against some conservatism so while there might be some minor uptick in Q4.

Mark: That could be related to timing and it could be related to seasonality.

Mark: There's not a material difference from here to the end of the year and what we think in Q3 and Q4 from a revenue so the guide.

Mark: It's just for us to continue.

Speaker Change: It's sort of moving at this pace with appropriate pragmatism in it.

Mark Partin: All right, thank you very much.

Operator: Thank you. Our final question comes from Jake Roberge with William Blair. Your line is now open.

Speaker Change: Alright, Thank you very much.

Speaker Change: Thank you.

Jake <unk>: Our final question comes from Jake <unk> with William Blair. Your line is now open.

Jake Roberge: Thanks for taking the question. And great to hear about the improvement in close rates and pipeline during the quarter. If you had to stack rank what's driving that performance, is that more the go-to-market verticalization and those new product leaders? Or is it really more the recent kind of product and partner changes?

Speaker Change: Thanks for taking my question and great to hear about the improvement in close rates and pipeline during the quarter. If you had to stack rank whats driving that performance is that more on the go to market vertical position in those new product leaders or is it really more on the recent kind of product and partner changes. If you could just parse out what's driving that improve execution.

Owen Ryan: Boy, can I give you answers 1A, B, and C? Because I don't know that they're 1 through 10. I think it's a combination of how the whole organization is really starting to get together. And I think, you know, we've got a lot of new leaders who really seem to know how to work well together. They meet each other more than halfway to get things done. And so we're seeing that show up in what are, you know, starting with the VDRs, reaching out into the marketplace, and following up. Those are our account managers, our net new reps being supported by marketing that go to markets.

Speaker Change: Shouldn't it be helpful. Thank you.

Owen Ryan: If you could just parse out what's driving that improved execution, it'd be helpful. Thank you. Boy, um, thank you.

Speaker Change: Boy.

Speaker Change: Can I give you answers, what a b and C. Because I don't know that they are one to 10 I think it's a combination of how the organization is really starting to gel together and I think we've got a lot of new leaders, who really seem to know how to work well together they need each other more than halfway to get things done and so we're seeing that showing up in what.

Speaker Change: Are you starting with the <unk>, reaching out into the marketplace and following up those are our account managers are net new reps.

Speaker Change: Being supported by marketing the go to market team.

Owen Ryan: The team behind the scenes is working much more cooperatively. So that's all driving what we believe is really, you know, better execution. And again, we're still early in driving it. It's fantastic to have these pillar leaders.

Speaker Change: Behind the scenes are working much more collaboratively. So that's all driving what we believe is really better execution and we again, we're still early in driving it. It's fantastic to have these pillar leaders and like I said they are working together very well they are out there in the market, helping our teams.

Owen Ryan: And like I said, they're working together very well. They're out there in the market helping our teams close deals and take customers through the journey. We're doing a better job of articulating the platform and where Blackline is going. So it's not just a point solution, but it's a vision of what we think we can help you do. And then, of course, it's exciting when you can talk about your roadmap, and our customers can see not only the breadth of what we offer today but how we're going to deepen that.

Speaker Change: Those deals take customers through the journey.

Speaker Change: Doing a better job of articulating the platform of where black line is going so it's not just a point solution, but it's a vision of what we think we can help you do and then of course, it's exciting when you can talk about your roadmap and our customers can see not only the breadth of what we offer today.

Owen Ryan: And then what Teresa is doing with the team to add the adjacencies, the other things that our customers and our partners are asking for. And I think that it's a combination of all of that. We're, you know, again, still early. No one should leave this call thinking that Blackline is done and we're finished. We've got a lot of work to do as an organization, but we are super proud of what the team is doing, the way they're collaborating, and their understanding that our success is based on the success of our customers post-op.

Speaker Change: How we're going to deeper than what <unk> is doing with the team to add adjacencies. The other things that our customers and our partners are asking for and I think that it's a combination of all of it. We're again still early no. One should read this call thinking that Black line is done and we're finished we've got a lot of work still as an organization but.

Speaker Change: We're super proud of what the team is doing the way they are collaborating and theyre understanding that our success is based upon the success of our customers wholesale.

Speaker Change: Great. Thanks for taking the question.

Owen Ryan: Thank you. I'm showing no further questions at this time. I would now like to turn it back to Owen Ryan for closing remarks.

Speaker Change: Thank you I'm showing no further questions at this time I would now like to turn it back to Owen Ryan for closing remarks.

Operator: Thank you and thank you everyone for listening today and for your questions. We certainly appreciate you spending time with us. We're excited about the future and look forward to talking with all of you later today and tomorrow. So, thanks everyone. Have a good night.

Owen Ryan: Thank you and thank you everyone for listening today and for your questions. We certainly appreciate you spending time with us and we're excited about the future and look forward to talking with all of you later today and tomorrow. So thanks, everyone have a good night.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Speaker Change: Okay.

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