Q3 2024 BlackLine Inc Earnings Call
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Speaker Change: Good day and thank you for standing by. Welcome to the Blackline Quarter 3 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode.
Speaker Change: After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again.
Please be advised that today's conference is being recorded.
Speaker Change: I would now like to hand the conference over to your first speaker today, Matt Humphries, VP of Investor Relations. Please go ahead.
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Matt Humphries: Good afternoon and thank you for joining us today. With me on the call are Owen Ryan and Therese Tucker, co-chief executive officers of Blackline, as well as Mark Partin, chief financial officer.
Matt Humphries: Before we get started, I'd like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans, objectives, and expected performance. In particular, our guidance for the fourth quarter and full year 2024 are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Matt Humphries: These four looking statements represent our outlook only as of the date of this call.
Matt Humphries: While we believe any forward-looking statements made during the call are reasonable, actual results could differ materially, as these statements are based on our current expectations as of today and are subject to risks and uncertainties, including those stated in our periodic reports filed with the Securities and Exchange Commission, in particular, our Form 10-K and Form 10-Q.
Matt Humphries: We do not undertake, and expressly disclaim, any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.
Matt Humphries: All comparisons we make on the 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.
Matt Humphries: 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.
Matt Humphries: which may be found on our investor relations website at investors.blackline.com or in our form 8k filed with the SEC today.
Speaker Change: Now, I'll turn the call over to Blackline's Co-Chief Executive Officer, Owen Ryan. Owen?
Owen Ryan: Thank you, Matt, and good afternoon, everyone. Thank you all for joining us on today's call.
Owen Ryan: Before discussing our performance, I would like to address the AK filing we submitted along with today's earnings announcement.
Speaker Change: Mark Partin, Black Line's Chief Financial Officer, will be retiring after 10 years of service.
Speaker Change: He will continue to serve as CFO through March 1, 2025, and transition to an advisory role for a short period afterwards to ensure a smooth transition to his successor, Patrick Villanova, our Chief Accounting Officer.
Speaker Change: Patrick has been with Blackline since 2015, reporting directly to Mark throughout that period.
Speaker Change: I am deeply grateful for Mark's contributions in all the roles he played in building us into the market leader. I am also excited to work more closely with Patrick as he steps into his new role as CFO.
Speaker Change: Now, turning back to our results, BlackLine delivered solid financial results this quarter, exceeding our revenue and profitability guidance while delivering a record quarter of free cash flow generation.
Speaker Change: There were a number of highlights from the quarter, which reflect the ongoing changes we are driving within the organization.
Speaker Change: including our go-to-market motion, innovation agenda, and how we are positioning our brand within the office of the CFO.
Speaker Change: We continue to deliver operational improvements, drive higher levels of productivity and efficiency in our business, while capitalizing on emerging growth opportunities.
Speaker Change: This is setting the stage with a strong foundation for sustained growth and value creation for our shareholders.
Speaker Change: We are focused on execution across the business, particularly in our go-to-market teams. In the third quarter, we saw larger deal sizes on new logo opportunities, even with a muted demand environment.
Speaker Change: Our enterprise business was in line with expectations in this seasonal third quarter, while our mid-market business outperformed, driven by larger deal sizes, in part due to our strategic focus on the ideal middle-market customer.
Speaker Change: Let me elaborate on the strategic evolution in the middle market. We continue to sharpen our focus on large enterprises as well as mature or rapidly growing mid-market companies.
Speaker Change: This is where our platform demonstrates an exceptional value proposition for customers and prospects.
Speaker Change: Specifically, we are targeting organizations with effect patterns such as sophisticated financial ecosystems.
Speaker Change: multinational operations and or high growth trajectories spanning both organic expansion and M&A activity.
Speaker Change: While our tighter focus on these middle market customers has temporarily impacted our headline customer count and retention figures, the economics are compelling.
Speaker Change: We believe these relationships generate substantially higher lifetime value and present significant expansion opportunities.
Speaker Change: Furthermore, this approach enables more efficient capital allocation, particularly with our R&D and go-to-market investments.
Speaker Change: We are developing advanced capabilities that address sophisticated use cases, which will drive deeper adoption and create a cycle of expansion with our customers.
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Speaker Change: Early results of this strategy validate our direction, and we are seeing momentum building.
Speaker Change: For example, we signed a net new deal with a leading global fintech company.
Speaker Change: On the advice of one of our partners, the approach does with complex needs, automation for high volume data processing, intricate transaction matching scenarios, journal entry automation, sophisticated error handling, and orchestration and visibility needs across these process areas.
Speaker Change: Our ability to meet these diverse requirements resulted in a multi-solution sale, including our new studio solution, that not only addresses the customer's needs, but also showcases the breadth and depth of our platform, far surpassing any competitor offering.
Speaker Change: Our partner recognized early on that this company had outgrown its legacy vendor and needed to leverage a platform that could scale with them as they continue to grow.
Speaker Change: Our targeted industry approach is also yielding favorable results as we displace legacy solutions, as well as the status quo, given our domain expertise and deep industry knowledge.
Speaker Change: We saw several wins as a direct result of our industry approach with large global brands in the U.S. and Europe this quarter, including a seven-figure expansion deal with a Fortune 50 life sciences company and new wins in competitive takeaways for the number of Fortune 100 and Fortune 500 companies.
Speaker Change: In the enterprise space, we signed a new entertainment and media company, an industry where we have a strong track record of successfully delivering high-value automation for customers.
Speaker Change: This competitive replacement of two legacy vendors was driven by our deep industry knowledge and domain expertise, along with relevant customer references.
Speaker Change: On retention specifically, we continue to move through a period of where we see signs of success at the higher end of our markets, offset by expected logo churn from lower ATB customers.
impacting some of our key metrics.
Speaker Change: Our enterprise segment, which represents our strategic focus and highest value opportunity, demonstrated strong performance with a 97% renewal rate, consistent with historical levels, and steady improvement versus prior quarters.
Speaker Change: While our overall renewal rate was 92%, this reflects our intentional strategic shift. Specifically, we are seeing expected churn in the mid-market where renewal rates were in the 80s.
Speaker Change: We are continuing to concentrate on customers who benefit most from our comprehensive finance transformation solutions.
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Speaker Change: Next, turning to market messaging, we have begun to finalize a broader repositioning of the Black Line brand.
Speaker Change: Our message to the Office of the CFO aligns with our platform, innovation roadmap, and what is critical to their success.
Speaker Change: Logically, our evolution from a single solution company to a holistic platform
Speaker Change: For the Office of the CFO is the focus to unlocking and capturing the opportunity ahead. Our approach has been recently validated by third-party research firms like IDC and Ventana, where we were named leaders.
Speaker Change: These points of recognition continue to point to the value that Blackline provides customers within the office of the CFO.
Speaker Change: In a few short weeks, expect to hear much more about our platform, innovation, and rebranding at our upcoming Beyond the Black User Conference and Investor Day.
Speaker Change: I want to emphasize our core value proposition and how it drives our market leadership. At its heart, we are delivering future-ready financial operations that transform the office of the CFO.
Speaker Change: What we believe sets us apart is our platform's unique combination of flexibility, unified architecture, and comprehensive functionality, all of which can be implemented rapidly by our partners and by our team.
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Speaker Change: This collaborative approach delivers compelling and measurable ROI for our customers through automation, reduced total cost of ownership, and significant productivity gains.
Speaker Change: As our customers achieve these benefits, they gain confidence to expand their transformation initiatives, which in turn strengthens our competitive position and expands our market leadership.
We are seeing this strategy create a virtuous cycle.
Speaker Change: As customers succeed with our platform, they become strong references, driving new business opportunities and reinforcing our position as the partner of choice for organizations.
Speaker Change: This not only supports our current market position, but opens multiple avenues for sustained growth ahead. Moving to distribution, I am extremely pleased with the progress we have made with our partner channel, as we jointly position to capitalize on opportunities within the Office of the CFO.
Speaker Change: Whether that is potential opportunities from ERP modernization or through regulatory initiatives like electronic invoicing and Pillar 2, we are continuing to invest in our partner channels to enable, train, and jointly drive opportunities across our global footprint.
Speaker Change: As part of this, we have seen an increasing percentage of partner-influenced and partner-sourced opportunities globally, which have contributed to higher win rates, particularly in our enterprise business.
Speaker Change: Our partner ecosystem is also accelerating global adoption of our combined closing consolidation offerings, with notable traction in Europe and Japan. And finally, we are seeing encouraging early results from our partners' engagement with studio opportunities worldwide.
Speaker Change: Turning to broader deal activity this quarter, we saw a number of multi-pillar wins. For example, in Enterprise, we signed a net new multi-pillar deal with Kroll, a leading financial and risk advisory firm.
Speaker Change: Grohl has been rethinking their existing financial system landscape after a strong track record of organic and inorganic growth that outpaced what their legacy vendors could support at scale.
Speaker Change: This deals with the complete package, with our close, consolidation, and intercompany solutions.
Speaker Change: jointly positioned and sold with strong partner validation to optimize, automate, and support their broader record to report processes.
Speaker Change: In North America, we expanded our relationship with a leading Fortune 100 pharmaceutical customer who has historically leveraged our solutions for financial close processes.
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Speaker Change: As their operations grew increasingly complex, they identified the need for real-time visibility across their multi-entity structure.
Speaker Change: This led to the adoption of our consolidation and financial analytics solution to enhance their pre-consolidation capabilities.
Speaker Change: Significantly, they also recognized the strategic value of our studio solution to orchestrate and visualize financial data across their systems landscape supporting their broader finance transformation objectives.
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Speaker Change: Next, our combined closing consolidation strategy continues to drive strong mid-market performance, replicating last quarter's success with higher win rates and larger deal sizes.
Two recent wins highlight this momentum.
Speaker Change: First, we secured Kindeva, a newly public pharmaceutical company who selected our platform.
Speaker Change: Their choice reflects a broader trend we see with companies recognizing that public company reporting demands require more than basic closed functionality.
Speaker Change: and Kenneba determined our comprehensive solution was uniquely positioned to support their long-term growth objectives.
Speaker Change: Additionally, in Japan we won Toppin Photomask, a semiconductor manufacturer preparing for their IPO.
Speaker Change: We continue to have a very strong record of serving publicly traded companies or those on their journey towards a public listing.
Speaker Change: They chose our integrated close and consolidation solution to automate their entire report-to-report process, ensuring they will exceed public company reporting requirements from day one.
Speaker Change: Last, while Solex Steel shows typical seasonal patterns, we secured several strategic wins.
Speaker Change: A highlight was a major competitive displacement with the North American Fortune 100 pharmaceutical company who selected our comprehensive closed consolidation and intercompany solution ahead of their S-4 migration.
This enterprise-wide deal demonstrates the power of our value proposition.
Speaker Change: The customer is consolidating multiple legacy systems onto our single platform to streamline their entire record-to-report process.
Speaker Change: Through our strong partnership with SAP and a global systems integrator, we demonstrated the compelling ROI of comprehensive finance transformation, ultimately winning this significant enterprise account.
Therese Tucker: With that, I would like to turn the call over to Therese. Therese.
Therese Tucker: Thank you, Owen. The third quarter marked strong execution across our strategic innovation priorities.
Therese Tucker: characterized by accelerating platform and product delivery that strengthen our leadership position within the office of the CFO.
Therese Tucker: Our upcoming customer conference, Beyond the Black and Investor Day, will showcase a brand evolution that reflects our growing market opportunity and platform innovation.
Therese Tucker: While full details are forthcoming, our third quarter achievements reflect successful execution against our strategic roadmap and position us to capture increased market share supported by building digital finance transformation tailwinds.
Therese Tucker: As noted, we're executing a transformative platform modernization strategy that we believe positions us for significant scale and accelerated innovation.
Therese Tucker: Our Cloud Migration to Google Cloud Platform is over 80% complete, setting the stage for meaningful scale and efficiency as we move forward.
Therese Tucker: Beyond the immediate cost benefits to completing this migration, it unlocks additional value drivers, accelerated product development velocity, and enhanced AI capabilities across our entire platform.
Our new studio offering is gaining market momentum.
Therese Tucker: demonstrated by both customer adoption and partner engagement this quarter. As highlighted earlier, we've already secured several strategic customer wins validating our multi-year investment into Studio.
Therese Tucker: As we integrate this and other capabilities into our broader platform, we're creating clear differentiation in the market for finance transformation.
Therese Tucker: We look forward to showcasing this comprehensive platform vision in two weeks, which we believe will establish a new standard in our industry.
Therese Tucker: Now, turning to our solutions, we just launched an exciting new industry-specific financial close solution that solves a major pain point for banks and retailers.
tracking and reconciling millions of daily transactions in real time.
Therese Tucker: Think about how many credit card swipes, online payments, and bank transfers happening every day at a major bank or retail chain.
Therese Tucker: Our new high frequency reconciliation solution automatically reconciles all these transactions across different systems, flagging discrepancies that could signal fraud or errors.
Therese Tucker: This is a game changer because traditionally, companies would typically review these transactions just once a month, creating delays and adding risk to their closed processes.
Therese Tucker: Early adopters are already using this solution and we plan to roll it out widely to customers in early 2025.
Therese Tucker: In our consolidation and financial analytics pillar, we've strengthened our competitive position in the high-value enterprise consolidation market with two strategic enhancements.
Therese Tucker: First, we've launched advanced financial statement attestation capabilities that enable organizations to validate results across multiple business entities, a critical need for both domestic and complex global enterprises.
Therese Tucker: Second, we've deployed generative AI-powered analytics that automatically generate insights from financial data, helping CFOs and their teams understand significant changes in their balance sheets.
Therese Tucker: These innovations address key pain points in the report-to-report process and help deepen and extend our capabilities further across the Office of the CFO.
Therese Tucker: In our Invoice-to-Cash pillar, we've launched a significant enhancement to our Invoice-to-Cash platform, introducing AI-powered payment prediction capabilities that directly impact our customers' bottom line.
Therese Tucker: This new technology enables enterprises to forecast customer payment patterns with unprecedented accuracy, giving them precise control over their cash flows and working capital.
Therese Tucker: By leveraging advanced machine learning algorithms, companies can now optimize their working capital by predicting exactly when customers will pay, a critical advantage in today's economic environment.
Therese Tucker: We believe this innovation strengthens our end-to-end offering and supports an expanding opportunity set within this market.
Therese Tucker: In Intercompany, we've further extended our market leadership with the launch of generative AI-powered predictive guidance. This technology automatically identifies errors and anomalies in intercompany transactions before they impact financial statements.
Therese Tucker: A critical capability for global enterprises managing high volumes of intercompany transactions.
Therese Tucker: Our AI innovation directly addresses a major pain point for multinational corporations.
Therese Tucker: dramatically reducing compliance risk and eliminating thousands of hours of manual review. We believe this enhancement cements our dominant position in the intercompany automation market where we continue to maintain significant competitive advantages in the market.
Therese Tucker: Beyond our customer-facing AI innovations, we're also delivering internal AI tools for our employees.
Therese Tucker: Our proprietary Gen-I companion, Bucky AI, which is trained on internal company data, was released recently to our entire employee population and has achieved remarkable adoption metrics.
Therese Tucker: In the first month since deployment, over 50% of our global workforce has actively used the tool, processing more than 11,000 unique queries across 50 languages in 19 countries.
Therese Tucker: Most importantly, this technology has already generated measurable ROI, saving 3,000 to 4,000 employee hours in just the first month alone.
Therese Tucker: We believe the rapid adoption and productivity gains from modern AI tools, like Bucky AI, offer a pathway to enhance productivity and efficiency as we move forward.
Therese Tucker: Moreover, our internal success with AI deployment serves as a powerful proof point for our customers, reinforcing our credibility and trust in this fast-moving market.
Therese Tucker: Before turning the call over to Mark, I want to express my deepest gratitude for his exceptional service and partnership as Blackline's CFO.
Therese Tucker: His rare combination of strategic vision and financial acumen makes him truly one in a million, and is exactly the leader we needed to guide us on our journey from pre-IPO to the market leader we are today.
Therese Tucker: Beyond his technical excellence, Mark's unwavering integrity and inspirational leadership have left an indelible mark on our company and our employees. We've been incredibly fortunate to have him as our partner and CFO.
Speaker Change: With that, I'll turn it over to Mark to cover our financials. Mark?
Thank you, Therese.
Mark Partin: Our third quarter results demonstrate solid execution against many of our key financial priorities, highlighted by meaningful margin expansion and strong free cash flow generation.
Mark Partin: While we continue to operate in a measured demand environment, our strategic investments in innovation and go-to-market initiatives are strengthening our competitive position.
Mark Partin: We believe this foundation, combined with our relentless operational discipline, positions us to accelerate growth as market conditions improve and drive enhanced financial performance.
Mark Partin: With that in mind, let's review our financial performance in more detail.
Mark Partin: Total revenue grew to $166 million, up 10%, with subscription revenue growth of 11% and services revenue growth of 3%.
Mark Partin: While services revenue was slightly better than expected, we still see services as an expected drag to overall revenue growth this year.
Mark Partin: Remaining performance obligations or RPO was up 12% driven by account growth and longer contract terms from renewing customers.
Mark Partin: Current RPO was up 11%, with Total Annual Recurring Revenue, or ARR, of $638 million, up 10%.
Mark Partin: Calculated buildings growth was 4% with trailing 12-month buildings growth of 9% due to a mix of seasonality, timing, and incremental churn and attrition.
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Mark Partin: Our customer count at the end of the quarter was 4,433. Let me provide additional context on our customer metrics. While overall customer addition remained stable, our strategic repositioning has led to expected churn among smaller accounts that fall well below our average contract value.
Mark Partin: This is aligned with our deliberate focus on the enterprise and the right customers in the mid-market segment. Customers who can grow meaningfully with our platform over time.
Mark Partin: The success of this strategy is evident in our higher value customer cohorts. We've achieved 27% growth in customers generating over $1 million in ARR and 12% growth in customers above $250,000 in ARR.
Mark Partin: These metrics validate our strategic shift toward higher value relationships and demonstrate our increasing penetration in these market segments.
Our revenue renewal rate in the second quarter was 92%.
reflecting the customer trends just mentioned.
Mark Partin: While we see the effects of middle market churn play out here and serve as a near-term drag, what you aren't seeing is building strength within our enterprise customer base and its improvement.
Mark Partin: Specifically, our enterprise renewal rate in Q3 was 97%, back in line with our long-term historical levels.
Mark Partin: Net retention rate, or NRR, was 105% this quarter, reflecting these customer dynamics combined with stable pricing and customer expansion, particularly in our enterprise business and the effects of FX.
Mark Partin: Strategic product performance was a highlight this quarter and represented 31% of sales above our target range.
Mark Partin: Performance this quarter was driven primarily by strength in financial reporting and analytics, as well as transaction matching.
Mark Partin: Partners were involved in 81% of large deals this quarter with consistency across both new and existing opportunities. Solex performance was seasonally soft this quarter, primarily on the net new side despite some large customer wins.
In Q3, SAP partnership represented 26% of total revenue.
Mark Partin: Turning to margin, our non-GAAP gross margin was 79%, with non-GAAP subscription gross margin of 82%.
Mark Partin: Gross margin performance remains in line with our expectations as we focus on optimizing cloud spend and completing our multi-year migration to GCP.
Mark Partin: Non-GAAP operating margin was 23% above our expectations, largely due to R&D efficiency from our location strategy at higher rates of innovation.
Mark Partin: Non-GAAP net income attributable to BlackLine was $44 million up 17% and represented a 27% non-GAAP net income margin due primarily to operating income outperformance.
Mark Partin: We generated $56 million in operating cash flow and $49 million in free cash flow in the quarter with a record free cash flow margin of 30%, driven by a combination of strong earnings and working capital management.
Mark Partin: And last, regarding our balance sheet, we have approximately $850 million in cash, cash equivalents and marketable securities versus $890 million in debt.
Mark Partin: Now, on guidance, we are raising our full year revenue and non-GAAP operating margin guidance ranges based on Q3 performance and our views for the balance of the year.
Mark Partin: For the fourth quarter of 2024, we expect total GAAP revenue to be in the range of $167 million to $169 million.
Mark Partin: represent approximately seven to nine percent growth. We expect non-GAP operating margin to be in the range of 18 to 19 percent, reflecting the cost of our large customer conference in Q4.
Mark Partin: And we expect non-GAAP net income attributable to Black Line to be in a range of $36 to $40 million, or $0.47 to $0.52 on a per share basis.
Mark Partin: Our share count is expected to be approximately 77.1 million diluted weighted average shares.
Mark Partin: And for the full year 2024, our updated guidance is as follows.
Mark Partin: We expect total gap revenue to be in the range of $651 to $653 million, representing 10 to 11% growth.
Mark Partin: We expect non-GAAP operating margins to be in a range of 19.4 to 19.6 percent.
Mark Partin: And finally, we expect non-GAAP net income attributable to Black Line to be in a range of $164 to $168 million, or $2.15 to $2.21 on a per share basis.
Mark Partin: Our share count is expected to be approximately 76.1 million weighted average shares.
Before I close,
Speaker Change: Just a quick personal note, serving as CFO of this incredible company for the past decade has been the highlight of my career.
Speaker Change: When I reflect on our journey from where we started to where we are today, I'm filled with immense pride in what we've built together.
Yet, I'm even more excited about the company's future.
Speaker Change: The depth of talent and the strength of leadership that we've assembled gives me complete confidence that our best chapters are still ahead.
Speaker Change: It's particularly meaningful to me that Patrick, who has worked alongside me throughout this journey, will be stepping into this role.
Speaker Change: His deep understanding of our business and his proven leadership makes him the ideal person to help guide this company into the next phase of growth.
Speaker Change: To our employees who make the impossible possible every day, and to our investors who have believed in our vision, thank you for letting me be part of this remarkable story.
Speaker Change: With that, I'll now ask the operator to open the discussion and take your questions.
Speaker Change: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.
Speaker Change: Our first question comes from Patrick Walrevens of Citizens J&P. Your line is now open.
Patrick Walrevens: Oh, great. Thank you. Congratulations on the quarter. And Mark, really sad to see you go, but we'll discuss that later.
Patrick Walrevens: So, can we talk about sort of what the macro environment looks like, as I was looking back at last quarter, I think you had a comment in your script about demand was below levels
Patrick Walrevens: we would consider normal. And it seems like you didn't repeat that, and this time I heard a measured demand environment. So are things getting better?
Patrick Walrevens: You know, Pat, it's always, you know, interesting to try to read the tea leaves. I think there's a couple things that.
Speaker Change: that I think we could tell you from our experiences being out in the marketplace.
Speaker Change: The conversations are taking place. We're getting the meetings that we wanna have. Our partners have been phenomenal at really trying to help us get a better position with and in front of customers and prospects.
We're seeing some growth in
Speaker Change: opportunities starting to finally come into the pipeline. An interesting indicator for us is we have our Beyond the Black conference in 10 days or so. It is sold out. We're actually having to move people into a second hotel and the demand is really impressive in that regard.
Speaker Change: It feels a little bit better, but still, you know, we're not ready to sort of say, hey, this is a real change.
Thank you.
We are seeing our partners.
ramping up their hiring of BlackLine.
Speaker Change: professionals. One of our partners has gone from having 10 people certified on Blackline a year ago to now having 130 certified this year and many of our partners are quote sold out. So I think those are good signs that
Speaker Change: You know our customers are trying to do more with Blackline, but I think it's still too early to declare any kind of victory
Speaker Change: Great and if I could do a quick follow-up on that the fortune 100 pharmaceutical company that
Speaker Change: picked all three products ahead of the S4 migration. Could you tell us a little bit more about that? Cause that sounds like a great roadmap and how long was that sales cycle? How long has that been going on?
Speaker Change: Actually, it was a couple of years to get it done, but Pat, one of the things that we are
Speaker Change: I think really starting to hit our stride on is how we use our industry qualifications and experiences and make sure when we're talking to these customers, not only do we talk to them about the domain expertise of what Blackline brings at its core foundation, but it's also those use cases and experiences.
Speaker Change: that are very specific to, you know, particular industries and then being able to use our customer references.
Speaker Change: in a way where they speak very confidently about their experiences. So, in this situation, as you've known, you know, since the last year and a half, we've won a lot, a lot, number of large...
Speaker Change: Global Pharmaceutical companies and they're quite comfortable in sharing their experiences with prospects and that's a really compelling part of all this.
Speaker Change: It's what we're doing with the domain expertise, it's the industry expertise, use cases, our partners being able to sort of vouch for it, and then customers saying, yep, BlackLine's a real deal.
Thank you.
Speaker Change: Our next question comes from Alex Sklar of Raymond James. Your line is now open.
Speaker Change: Thank you. Mark, I'd also like to echo my congratulations on the well-deserved retirement announcement.
Speaker Change: I wonder, Mark, just starting off in the back of the deck, there's a new medium-term profitable growth framework.
Speaker Change: So first question there, can you help bridge some of the bigger opportunities you see in your seat today, specifically on the revenue piece kind of inflecting from that 11% outlook for this year?
Speaker Change: to kind of 13 to 16 percent range. Is there any incremental investments that you're looking to make to get there? Is it more of the same? And any color and kind of linearity thoughts? Thanks.
Speaker Change: Thanks, Alex. Yeah, that's a that's a great observation. And I think our upcoming investor day is going to be a really great place for the entire management team, Owen and Therese, and all of us to lay out in detail, our strategy and the opportunities that are in front of us.
Speaker Change: for investing for that growth. And, you know, from from the last, I guess, year that the management team has really been putting a lot of effort and work into our long range plan and our sort of investment.
initiative.
Speaker Change: You know, they're pretty consistent with what we've been talking about.
It includes, you know, our ability to get the...
Speaker Change: flywheel, you know, partner ecosystem moving. It is being a leader and raising our voice to the office of the CFO and CIO for really large digital transformation.
It includes...
being able to bring our
Speaker Change: Product Set into a platform to allow our customers to move data and to see more information faster.
Speaker Change: It's a number of those initiatives which we believe are those long-term opportunities. They're the reasons we've invested in these companies. There's the reason that we've been innovating and the new leadership team is on board. So we're really excited about the opportunity at Analyst Day to share more of those details. So thank you for that question.
Speaker Change: Okay, great. We'll look forward to more details in a couple weeks. Maybe one other growth factor, and we heard a lot of early success with Studio, but you've kind of been talking about testing some new packaging and pricing studies broadly in the market. I'm curious what kind of some of the early learnings have been there so far. Any thoughts on kind of broader rollout of those over the coming years? Thanks.
Speaker Change: Yeah, so we are continuing to refine all the work we're doing around pricing, including, you know, and even just meeting today on some of the things we're trying to do. It's really more of a 25 event than it is 24. We spent a lot of time talking with our partners.
and with our customers.
Speaker Change: and learned a lot about, you know, where they see the opportunity for us and we see it with them. And I think that, you know, right now...
Speaker Change: We feel like we're going to be able to simplify our pricing as we move into 2025, bundle some things together to make it a little bit easier for customers. And so we're pretty excited about what that opportunity presents.
Okay, great. Thank you both for the color.
Speaker Change: Thank you. Our next question comes from Daniel Jester of BMO Capital Markets. Your line is now open.
Thanks for watching!
Daniel Jester: Great, thanks for taking the question. Maybe to stick with the theme of asking questions off of the presentation, you've got a great one on the cohort analysis. And for the last couple of years, it feels like
sort of back-to-the-base opportunity.
Daniel Jester: there has stalled out a little bit relative to history. So I guess maybe an update in terms of how you're seeing.
Speaker Change: the sort of the innovation pipeline and the go-to-market changes and sort of cumulatively all the effects that you've changed on the business. How do you see that sort of translating to the ability to dive deeper with your customers as we go into next year? Thanks.
Speaker Change: Yeah, thank you. Look, you know, a couple things. That's a big question. There's a lot in there, so I'll try to hit, I think, what the nature of the question is, and that is...
Speaker Change: You know, our growth opportunity within our customer base remains one of our largest growth vectors. We think there's a large embedded TAM.
Speaker Change: for us to cross-sell and up-sell. We think some of the innovation that we're bringing to the table will capture the attention of the CFO and CIO to help.
Speaker Change: us move these products into our really large, really invested customer base.
Speaker Change: And what I think you'll see from the cohort is over the years, we've landed larger, so the growth profile will change from the very early profile of customers that we've had for some 5, 10, 15 years.
But it doesn't change the fact that the opportunity for
Speaker Change: expanding with the user base, expanding with our product portfolio exists for us. We've invested in the account managers.
Speaker Change: And there are a couple things that I think will help.
Speaker Change: Accelerate that upsell motion. First is all the investments and execution that we've made in that go-to-market motion. And second, I think to your point, is our innovation and the ability to raise the
Speaker Change: profile of BlackLine to the CFO and CIO where those big digital transformation decisions are being made.
Speaker Change: Yeah look I think you know one of the things we shared a while back is where for maybe the first time
taking
Speaker Change: what we're seeing our customers do with the product and how well they're using it.
Speaker Change: and seeing the opportunities to go aggressively talk to them and say, hey, there's still this opportunity for you to do this much more with what you've already purchased.
Speaker Change: And so we've had, you know, what I consider to be good progress on that. So moving our customers along from recs and tasks to matching and journals, and Mark highlighted.
Speaker Change: some of the success we had on the cross-sell, you see that then picking up in our FRA solution and in our company. And so we're beginning to do what we need to do around the cross-selling still early.
Speaker Change: But our partners are also really helpful in this right now because they are trying to drive with our customers
Speaker Change: The whole digital transformation journey, and so you're seeing what we wanted to do start lay out a year ago, now begin to take root. I think the other thing...
Speaker Change: and the rest of our product and tech team, they're out in the field all the time.
Speaker Change: trying to learn and understand what else is it that our customers want. And so that co-creation of innovation is really beginning to resonate well. And so I think it's those combinations of things, but there's no surprises. The thing that you should probably take from all of this is we are executing on the things we told you we would do.
Speaker Change: It's a maniacal, relentless focus day after day to get the stuff done that we said we would get done. And we love what our team is doing, we love what our partners are doing, and we love the receptivity we're getting from customers and prospects about all this.
Great. Appreciate the thorough answers. Thanks, guys.
Thank you.
Speaker Change: Thank you. Our next question is from Rob Oliver of Baird. Your line is now open.
Speaker Change: Great, thank you guys very much. A couple from me. First of all, I'll echo what others said. Mark, we're going to miss having you around and really appreciate everything you've done.
Speaker Change: Disclosure and Focus and Integrity, and thank you very much for your service. And my question is first for any of you guys, and that's really just around that 27% growth.
Speaker Change: among customers over a million dollars in ARR. A really impressive number, and I wonder if you could just talk a little bit about some of how the newer innovation, and Therese this perhaps could bring you in here, is helping to drive
Speaker Change: that number. In other words, you guys have always done really well with large enterprises. You have some tremendous logos, but, you know, broadening out towards that office of the CFO and getting some of these new innovations like FRA into their hands is important. So I was wondering if you can talk a little bit about, you know, where that growth's coming from. Is it just in the BlackLine core? Or is it also strategic products, which I know you guys called out as strong this quarter? And then I had a brief follow-up. Thanks.
Hi, Rob. I agree, or you're right.
Speaker Change: A lot of the growth in the upsell is around some of the newer things that we've been innovating on. And it really kind of highlights our return to customer centricity and what's going to deliver value to our customers.
Thank you.
Speaker Change: You might have noticed I mentioned that we are approved with FRA on the SAP price list.
Speaker Change: We are seeing good traction in a number of clients there, with our very comprehensive pre-consolidation workflows and process sort of, you know, streamlining for them.
Speaker Change: We are also starting to see some good uptake of the studio platform.
Speaker Change: to what we are delivering now is just so far improved over the last year and a half, I can't even tell you. I'm very pleased that we are delivering things that give our customers value.
Speaker Change: Great, well looking forward to seeing that in Orlando. And then Mark, just one for you, just perhaps if we could get a little bit more color on kind of that divergence between enterprise and mid-market or commercial, you know, how much of this is kind of purposeful, you know, on your part, you know, there's certainly competition in the mid-market, but you guys have also, you know, made changes which are more reflective of kind of focusing on the enterprise and rallying the partners around that. So, you know, when you look at, say, the rose renewal rates, obviously there's a drag coming from that lower end and just any color you could provide there on that would be great. Thanks guys.
Mark Partin: Yeah, yeah, of course. Look, the additions of customers in the quarter at both the enterprise and mid-market level was normalized.
Mark Partin: But as you mentioned, we lost the number of the mid-market customers, the smaller.
Mark Partin: The majority of that is strategic. We are targeting higher end in the mid-market. We're really focused on customers that are making an investment in their future and that have an opportunity to work with Blackline over a lifetime value that we think gives them the best.
value proposition.
Mark Partin: So, what we are particularly pleased with in the quarter is the enterprise renewal rate. For the third quarter in a row, ticking back up, we would call that stabilized. And then seeing our dollar-based retention rate also stabilize and even tick up a point on the back of that sort of strong renewal base of enterprise customers.
Mark Partin: and that we mentioned early in the year this mid-market logo headwind was going to be a full year sort of situation and it's continued to do that again in Q3.
Speaker Change: Great. Very helpful. Thanks. See you guys in a few weeks.
Thank you. Thank you for the words.
Speaker Change: Thank you. Our next question comes from Ryan Krieger of Wolf Research. Your line is now open.
Speaker Change: Hey guys, thanks for taking the question here. So I just wanted to follow on with one of Rob's questions, you know, with the strategic portfolio as a percent of revenue ticking up.
Speaker Change: Again, I had a plan for the second quarter in a row.
Speaker Change: or, you know, is some of that strength still attributed to timing of deals? And then just quickly on free cash flow, obviously near 30% in the quarter. Is there anything one-time in nature that we need to know about and maybe how should we think about that for the rest of the year?
Speaker Change: Yeah, great. Thank you for the question. I'll go backwards on that.
There was no anomalies or one-time events, it's just a...
Speaker Change: journey that we've been on. And so it was a great quarter.
from that standpoint.
Speaker Change: and then going back a moment to the strategic products. We talk at this year about.
Speaker Change: That portfolio being in the 25-30% sale, just the right balance for us.
with the strategic product portfolio that we have.
Speaker Change: And so each quarter this year, that's continued to pick up. And we've seen good, you know, sort of sell through on that. But what's really the driver moving forward and into next year and whether or not we lift that rate is digital transformation in the office of the CFO and getting these large deals.
Speaker Change: that are multi-product, multi-solution, and we're talking to those customers today. So that'll move the needle. Yeah, I think just to elaborate, and again, I spend a ton of time in the marketplace with our customers and our partners.
Speaker Change: And our partners are really doing a good job, our black liners are doing a really good job of
Getting our customers back on the journey.
Speaker Change: They came to BlackLine with the idea that they were going to do some kind of transformation and for whatever reasons, things haven't gone as quickly as we would have liked. So they kind of do wrecks and tasks.
Speaker Change: and then kind of pause a little bit or get sidetracked.
Speaker Change: And what we've done a good job now is getting them focused back again on the things that follow.
for the Transaction Matching.
Speaker Change: the journals, the great solution that Therese and the team have built around FRA, intercompany is a really compelling part of this, and then invoice to cash. I think you're going to, we believe we're going to continue to see that trend.
as it's been going.
recognizing
Speaker Change: that the intercompany sales can be very large, so that may create a little bit of volatility when one of those hits.
Speaker Change: But, you know, I think we feel pretty good about the work we're doing to get our customers on the journey. And I think that's going to just relate to, you know, continuing to add to our strategic products.
Great, thank you very much.
Speaker Change: Thank you. Our next question comes from Chris Quintero of Morgan Stanley. Your line is now open.
Chris Quintero: Hey everyone, congrats on the solid execution here. And Mark, let me say it's been a pleasure to work with you and wish you all the best in retirement.
Thank you. Thank you.
Speaker Change: I want to ask about the SAP business, it's really impressive to see that pick up. We've done a lot of work on the upcoming ERP super cycle, and SAP results have been strong so far this year. So just curious what you're seeing there as it relates to the pipeline heading into 2025. I know there was some disruption in the first half of the year, but do you feel like you're at a tipping point there from the SAP side of things?
Speaker Change: Yeah Chris, thanks for the question and good to talk with you. I think
Speaker Change: I still and we still believe that SAP is a bit of untapped potential for us.
Speaker Change: as we have been working with the very top leadership of SAP.
Speaker Change: We believe that that number should be able to get, you know, much higher than where it is today. And we're trying to drive that. One of the great things that SAP has changed this year is they re-
energized
Speaker Change: restaffing their office at the CFO, which they had kind of gotten away from. The meetings that we're having with the leaders of those folks all around the world.
Speaker Change: is really beginning to sort of set up very nicely for the things that we want to do together.
Speaker Change: in 2025. In a few weeks, Therese and I will be over there at their headquarters continuing to go through.
the product roadmap.
Speaker Change: as well as what we're trying to do and go to market. So I think we're pretty excited about that. We have some, you know, what we think will be some interesting changes to our business and how we're going to face off with SAP that we'll share at Investor Day.
Speaker Change: So, we look forward to sharing a bit more when we're together on that front.
Again, I think we feel like...
Speaker Change: We've got lots of opportunity. The partnership has never been healthier, never been stronger. And I think the alignment of what we're trying to do together is incredible. It's just now for each of us going to get, you know, to execute. And when you're down at Beyond the Black, we have...
Speaker Change: Corporate Controller from SAP is going to be there, the head of their office, the CFO, is going to be there, and we're very pleased to also remind everybody that SAP is now running on Blacklight.
Thank you.
Speaker Change: Awesome, that's really helpful. And then I want to follow up on the competitive landscape and maybe how you're faring today versus a year ago given all the changes you've made and maybe which ones have been the most effective from a competitive landscape perspective.
Yeah, look, I think we...
Speaker Change: And I think I've told you guys from the first call, I'm always paranoid, right? I'm always worrying and thinking about who's out there, how do we compete? I would say we're incredibly pleased.
with Howard competing against some of the more traditional
competitors that you all might recognize.
Speaker Change: In fact, I think a number of the takeaways when you look back over the last nine months
from one of our, you know...
Speaker Change: so-called bigger competitors is remarkable. I couldn't be more proud of what the team's done, but we are going to continue to rip and replace every one of their customers out during 2025 as we try to move forward.
Speaker Change: And so that's that's really encouraging on that front. And then when you get to what we would consider.
the ankle biter that sort of competes against us.
Speaker Change: at the lower end of the market. I think our approach to those customers, we're okay if they take some of the customers that really are not yet a good fit for Blackline, but what we are keenly focused on is when those customers grow to a certain size and scale.
Speaker Change: We basically say it's now time to come to BlackLine and we've had a number of nice successes and we've got some more that we're going to share over the course of the fourth quarter because BlackLine is... You come to BlackLine when you grow up and I think that that's the message that we're trying to deliver in the marketplace to these customers who have a journey, they know where they want to go.
Speaker Change: And I think we're being much more honest and candid about, you know, what it takes to come to Blackline. So we've done a lot of work.
Thank you.
Speaker Change: looking back at where we had success and where have we fallen short with our customers.
Speaker Change: And we sort of have triangulated about what we should expect and what a customer should expect from us in any deal, as well as a partner. And when you get the alignment from the customer the right way, the partner, and black line, and you agree on what you're going to do to drive a successful outcome and then stick to it, that's when you get the result you want. If you don't align all those things up front...
Speaker Change: then the likelihood you're not going to be successful is much lower. And so...
Speaker Change: When we talk about our ideal customer profile, it's yes, it's about the size and the sales.
Speaker Change: scale and complexity, but it's also about commitment and executive leadership. Don't sell to someone that you don't have the right relationships at the top of the house because all projects have hiccups.
Speaker Change: And what we want to make sure is our team can go talk to the CFO, CXO to say, Look, this is not going where we need to. We need you to lean in to make sure this project is back on track because we want to deliver value.
Speaker Change: Therese said it before, we are customer centric, that's what we're all about, and the customer success is how we measure our success. So that's what we're looking to do.
Really appreciate that detailed answer, Owen. Congrats again.
Speaker Change: Thank you. Our next question comes from Koji Ikeda of Bank of America. Your line is now open.
Koji Ikeda: Yeah, hey everybody. Thanks. Thanks so much for taking the questions and Mark
Koji Ikeda: Congratulations on the news for you and Patrick too, looking forward.
Koji Ikeda: to working with you in the future. Just wanted to ask two questions here, you know, maybe on Accounting Center first. I know you have Beyond the Black coming up here in a few weeks, but we wanna try and tease out, you know, what we could potentially hear about Accounting Studio from a product perspective today, from an early look perspective. And then,
Speaker Change: You know, Blackline absolutely has a lot of attractive growth levers, thinking about the medium term, but I wanted to focus on two here, you know, specifically Accounting Studio and SAP. How would you categorize those two as priorities for contributors to growth over the medium term? Thank you.
The End
Speaker Change: You want to talk about Studio first? So I believe with Studio we're seeing a very good reaction from our customers right now, combined with a willingness to pay for what we are delivering.
Speaker Change: So, now I know that Mark Partin will always say, you know, this isn't included in our longer term plan, blah, blah, blah, blah, you know, he'll do the drug, um...
recusals, but I am pretty hopeful
Speaker Change: that this represents a completely new area of growth for Black Line. It's really cool, the reactions to date.
Speaker Change: Yeah, I think, you know, when you see it, we've got, you know, five components that make up what we will, you know, studio, we'll share the rebranding of that.
Speaker Change: next week, but again, a lot of feedback from prospects, customers, and partners over the last 18 months, and I think it's been, you know, time and money well spent.
Speaker Change: for getting this product to where it will be unveiled in a couple of weeks.
As it goes to SAP...
Speaker Change: We still think that there's a lot of growth opportunity there and we're committed to sort of building that out and what's again really important is
for SAP to have the focus that they do.
Speaker Change: when they talk about their strategy, the move to the cloud, the office of the CFO, and AI, which are their top priorities.
Top three strategic priorities.
That aligns super well with what we're trying to do.
Speaker Change: And I think that that's going to bode well for our relationship as we move forward. Always the complexity is they're a big organization, and I've been out on a couple pitches now where you've got, you know, an SAP rep in the room who's excellent, but doesn't maybe always know everything that Blackline does. And I think that's part of our activity, and the reason we're going to sort of share some news in a couple weeks about
Speaker Change: How we face off with SAP to make sure that people in the field, on the front lines, know everything they need to know about BlackLine so they can drive success for their customers with SAP and BlackLine together.
Thanks for watching!
Speaker Change: Yep, that makes a lot of sense. Thanks, guys. Thanks for taking the questions.
Thanks, Koji. Thank you.
Speaker Change: Thank you. Our next question comes from Terry Tillman of Truist Securities. Your line is now open.
Speaker Change: Hi, this is Dominique Monticello. I'm for Terry. Thanks for taking my questions. So just wanted to take it back to studio for a bit. You all mentioned some promising results, so just wanted to get a quick update on maybe the plans to expand the Studio Solutions rollout later in the year and see if, you know, the rollout timeline is on track and maybe what your expectations are for adoption levels once it's available to a wider customer base.
Thank you for watching!
Speaker Change: Yeah, we've got a I think a pretty reasonable rollout plan. It's already being sold to a number of current customers.
and being implemented and being very well received.
Speaker Change: I think the sort of interesting thing that we're going to talk about at the user conference Owen just mentioned is the full breadth and depth of how this is playing into our platform strategy and how it offers a set of capabilities that frankly nobody else is offering right now.
Speaker Change: So it is generally available pretty much now, you know, it's been sort of soft rolled out. We're getting very good implementations happening on it and very good reactions to it.
[inaudible]
Speaker Change: Great, thanks. And also wanted to know if efforts to improve retention rates through those enhanced customer onboarding and digital self-service options have shown any early impact on renewal rates or maybe customer satisfaction?
Speaker Change: Yes, so it's definitely showing some impact on customer satisfaction, right? We can see that the feedback, the renewals from those customers, the uplift on that renewal is very real.
It's very tangible.
Speaker Change: with our partners, because I think one of the key things is when you have 4,400 customers, you're trying to get to as many of them to make sure.
Speaker Change: We have a thriving partner network that's in many of these customers every day. And so that's been a really key part of, again, getting...
these customers back on a journey.
It's been a critical part.
Speaker Change: of the success. And we're still early in sort of some of the self-service stuff. We'll share a little bit more about that at Beyond the Black.
Speaker Change: but it is a key priority for how we do that and do that quite frankly in offshore locations as well to continue to drive down costs.
Great, thank you.
Speaker Change: Thank you. Our next question comes from Jake Roberge of William Blair. Your line is now open.
Thank you.
Jake Roberge: Thanks for taking the questions and I'll echo my congrats, Mark. Hope you enjoyed the last few quarters at the helm. Nice to see the uptick in NRR, especially with the headwinds you're still seeing on the mid-market base. Just curious, as we move into next year, do you feel like
Jake Roberge: You'll have officially lapped most of those down market headwinds, and you can kind of pair stability in that base with the momentum you're seeing up market, or will there still kind of be more headwinds to lap as we head into next year?
Speaker Change: Well, you know, we will provide more guidance on that in February and
Speaker Change: Q4 is a good, I think it's a signal for us where budgets and buyers' heads are.
Speaker Change: You know, I would say what we're seeing, the best way to describe it at the moment, is some stabilization in some of those key areas of renewal and retention.
Speaker Change: And so, you know, whether it's the return we're seeing in our marketing and lead gen investments at the top of our pipeline, or whether it's the conversations with the customers that are moving more fluidly, or the attendance at our conference being sold out. You know, there are signals, but to convert that demand into buying next year is going to depend on a number of things for us. But what we're really confident in is that we're now more equipped than ever to be able to tell our story.
Speaker Change: in a very cohesive way around how BlackLine operates at the level of the CFO and the CIO, and we think that those are places we've gotten some great traction that lead to better metrics like renewal rate and retention rate.
Great, thanks for taking the question.
Thank you.
Speaker Change: Thank you. Our next question comes from George Kurosawa of Citi. Your line is now open.
Speaker Change: Hey thanks for taking the questions. I'm on for Steve Enders. Maybe to start following up on the conversation about SAP, I think one of the things that jumped out to me about the Solix deal you called out
Speaker Change: Was that it came on the front end of the migration project? Is that typical for these type of deals that you'd see Blackline go in maybe before the S-400 migration is completed? Or does it kind of vary on a customer-to-customer basis?
Speaker Change: I can always pay you for having asked that question, so thank you very much. Actually, one of the biggest shifts over the last 12 months.
Speaker Change: has been the realization as BlackLine and SAP and our partners have worked together is that BlackLine should come on the front end.
confident in the digital transformation journey.
Speaker Change: and as we've been talking with senior SAP leadership, we're in particular one, you know, very large customer.
Speaker Change: is sponsored by, they're a CEO and myself, and they've done this in where BlackLine has gone in first and see the power of that.
Speaker Change: So you hear SAP also driving that message, very importantly, into the conversation.
Speaker Change: If a year ago, Black Line was sort of at the bottom of the bill of material, that's no longer really the case. I think people are recognizing the criticality of demonstrable wins.
Speaker Change: and showing the art of the possible. So, we're going to expect to see more and more of that as we move forward, and I think that will be some of the messaging that you'll hear at Beyond Black.
Speaker Change: Okay, that's, that's great color. And then I did want to ask about, you know, the net new ARR came in pretty healthy, you know, especially for for a Q3. But the billings number, at least a little below what we were forecasting. Maybe, Mark, if you could help us. Was there anything kind of timing related or anything else we should keep in mind when we're kind of comparing contrasting these metrics.
Mark Partin: Yeah, yeah, yeah, great. So the billions, as you know, in any quarter can have some volatility, it's either seasonality, or maybe timing or payment patterns, things like that. And we saw both of those in the quarter. And so
Mark Partin: You're doing the right thing, which is look through to the RPO, the CRPO, ARR, you know, those are up 10-11%.
Mark Partin: in the quarter, which shows good, healthy, renewing, stronger and longer customers, landing customers with longer terms and putting them in the bucket for long-term customers. So yes, it's some seasonal variability. Trailing 12-month billions is the right way to look at as sort of a guide, and then looking through to these other metrics should give you a sense kind of how we feel about the quarter.
Great, thanks for taking the questions.
Yeah, thank you.
Speaker Change: Thank you. This now concludes the question and answer session. I would now like to turn it back to Owen Ryan for closing remarks.
Owen Ryan: Thank you everyone for asking the questions and also thank you for recognizing all the contributions that Mark has made. He's been a special, special...
Owen Ryan: We feel very fortunate that he's, you know, done all the things and is going to continue to be a key ally of ours as we move forward. So with that, I want to thank everybody. We'll see you all in a couple of weeks. And I'm excited what we have to share at Beyond the Black. Take care.
Thanks for watching!
Speaker Change: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Thanks for watching.
Mark Sproul and Wadah Hosea
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