BL

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 2:00 a.m. ET SVP of Investor Relations - Matt Humphries Chief Executive Officer - Owen Ryan Chief Financial Officer - Patrick Villanova Chief Technology Officer - Jeremy Ung Operator: Good day, and thank you for standing by. Welcome to Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Matt Humphries, SVP of Investor Relations. Matt Humphries: Good afternoon, and thank you for joining us today. With me on the call are Owen Ryan, Chief Executive Officer of BlackLine, as well as Patrick Villanova, Chief Financial Officer. For the Q&A portion of today's call, we'll also have Jeremy Ung, BlackLine's Chief Technology Officer, join us. 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 Q3 and full year 2026, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this call. While we believe any forward-looking statements 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. 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. All comparisons we make on the call today relate to the corresponding period of last year, unless otherwise noted. Unless otherwise stated, our financial measures disclosed on 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 and presentation, which may be found on our Investor Relations website at investors.blackline.com or on our Form 8-K filed with the SEC today. Now, I'll turn the call over to BlackLine's Chief Executive Officer, Owen Ryan. Owen? Owen Ryan: Thank you, Matt. Good afternoon, everyone. I want to start this quarter with a short overview of the financial results before Patrick does a deeper dive. I also want to walk through the deal timing dynamics that shape this quarter and then give you a sense of the period we have just lived through because I believe the first half of 2026 is likely the most consequential period in this company's 25-year history. This was a good quarter on the measures that matter for discipline and durability. Revenue grew 9.2%, non-GAAP operating margin came in at 23.3%, and we generated $37 million of free cash flow. Now on deal timing, it has become harder to predict this year. AI has put every finance organization in the position of reevaluating what they spend on and why, and that evaluation takes longer. Here is an example. We were recently selected for our first ever sovereign cloud opportunity with a large European company whose security and data requirements are among the most stringent in the world. We won the competitive evaluation and cleared the legal, security and technical reviews, and we are now working through the final details to close on this 5-year 8-figure deal. Even with both sides aligned and committed to a June 30 close, a deal of this size and complexity simply takes longer to get across the line than either party would like, which is exactly the dynamic I am describing. This elongated time line shows up mostly in our mega enterprise pursuits. Customers are evaluating more than just software now. They are also going much deeper into BlackLine's AI governance model, our product road map and how we sit inside their control environment before they sign. That pulls even more security, risk, compliance and IT professionals into the room alongside finance and everything is simply taking longer. More of these conversations have become formal build versus buy assessments and buying is beginning to come out far ahead. That clarity does not shorten the evaluation itself, so the time line stretches even when the outcome is clear. In total, approximately $8 million of opportunities we expected to close in the second quarter slipped for similar reasons. This business has not been lost. We have already closed half of it, and we are making solid progress on the rest. There is a second dynamic we are seeing, which is expected. Our platform pricing offers unlimited users. As more of our base moves to platform, we're seeing less lift from user adds. We are making that trade on purpose, usage and value over seat count, and it means near-term growth will understate actual demand until platform and AI adoption reach scale. We are winning long-term strategic relationships. RPO grew 17% to over $1.1 billion, clear validation that underlying demand is strong. Nearly 90% of net new business this quarter landed directly on platform pricing. New deal sizes are up 24%. Multiyear commitments were 56% of this quarter's renewal book, up from 45% a year ago. This is a customer base making bigger, longer commitments. Platform adoption is broadening across the base, too. Eligible ARR on platform crossed 17%, up from 13% last quarter and current RPO, the piece we will recognize over the next 12 months, grew 11%. That is the near-term picture. Now to the period we have just lived through. AI is going to be a multiyear transformation in the office of the CFO. I will walk through it in 4 parts: the context, our platform strategy, the validation showing up with customers and what we are seeing across the market. On context, the pace of AI, our own product development and the time we have spent in market has been more intense than anything that ever came before it. Over the past 2 quarters, we have had hundreds of meetings with CFOs, CIOs and CTOs, met with capital markets regulators, accounting standard setters, and the leadership of the 7 largest global audit firms. We also met with the CEOs of adjacent office of the CFO companies, large European enterprises focused on data sovereignty, BPO firms reinventing themselves, and the Frontier labs building the models everyone is working to deploy responsibly. Those conversations reinforce our confidence in BlackLine's direction and the pace at which we are building. On platform strategy, across these conversations, the same theme kept surfacing. When AI scales, governance must scale with it. Studio360 is our platform layer for the office of the CFO, and we have embarked on its next evolution to meet that need. We call what it enables Agentic financial operations, a model where humans and AI work inside the close, equally visible and equally governed. Here is why this matters. Gartner expects the average Fortune 500 company to be running more than 150,000 AI agents by 2028, up from fewer than 15 last year and fewer than 1 in 5 companies believe they have the governance to manage that scale. That is the gap Studio360 closes in accounting and finance. In June, we unveiled Finance Control Console, the control and governance plan for the office of the CFO. Every agent, regardless of who built it, runs from a single registry, must be BlackLine certified before acting in a live process and operates inside a policy layer no customer can override. Every action and every human decision writes through an immutable audit trail, so any close can be reconstructed exactly as it happened, working alongside the deterministic rule-bound workflows underneath. That combination is what management teams, auditors, audit committees and regulators are asking for. The deterministic engine means that all already runs multiple autonomous close workflows simultaneously. And because the governance layer is built independent of any single model, our customers' investment in it only grows more valuable as foundation or open source models change and improve. That is what extends our lead over anyone building this from scratch and why BlackLine is the long-term partner for this transformation. We hear this directly. We are in the room with the big 4 audit firms, the standard setters for internal auditors and the regulators who matter most, and their message is consistent. AI cannot be a black box. Every step has to be evidenced. Our models are tested for bias and failure modes and signed off before reaching production with humans reviewing, approving, overriding or halting the process at every stage. AI proposes, people decide and is covered by the same internal controls over financial reporting framework as everything else in the close. That is the kind of trust the CFO requires from the partner behind the financial statements they personally attest to, and that trust takes years to earn. That trust does not happen by assertion alone. I want to be clear about where that friction still sits. It is an adoption, not the product. Customers are careful about trusting AI inside closed critical accounting processes. Security and risk teams are getting involved earlier in the sales cycle, partly because many regulators still have not finalized guidance for AI. We are not waiting for this to resolve on its own. We expect AIUC-1 certification in September, an independent third-party standard built for AI agent security and reliability. I am proud to say we have helped shape this standard as a member of the consortium. That gives customers real upfront validation about BlackLine's trustworthiness. We'll go much deeper on all of this at our BeyondTheBlack conference in November. On the validation, here's what our customers are telling us and doing. The Studio360 platform is what our AI runs on, and adoption across our base is now measurable. Roughly 3,500 of our eligible customers, above 90% of that base are AI-enabled today and roughly 3,000, about 77% are actively using AI in their financial operations. Feature usage reached nearly 13 million actions in the quarter, up over 220% sequentially. Customers are embedding these capabilities into how they close the books every day inside the same controls and audit trails they have trusted us with for years and validating the results through parallel testing. This usage is already showing up in revenue. Verity Prepare alone has been a key lever in more than $20 million of platform ACV to date and a growing number of customers now pay for it directly as a stand-alone product. That is driving further platform upsell with over 80% of that interest tied to our maturing Verity suite as the primary reason. And because full access to Verity requires platform pricing, this is exactly why platform ARR is tracking toward our 25% full year target with mega enterprise already above 21%. Platform adoption drives agent adoption. And together, we expect these to contribute at least 2 points of incremental revenue growth next year on top of the acceleration already visible in our contracted backlog. On the breadth of what is driving growth, we started by embedding generative AI capabilities across the platform, and we have since built a full suite of Agentic capabilities natively into that foundation. This suite is a set of complex multi-agent systems working across a customer's full set of accounts. As they run, they are servicing new use cases, hundreds already with more emerging every month. Each one is a further opportunity to monetize our AI. That surface spans both record to report and invoice to cash. New business is where this becomes concrete. Two of our Agentic offerings, Verity Accruals and Verity Prepare, show the clearest evidence. This quarter, we closed multiple Verity Accruals deals, including with a multibillion-dollar U.S. hospital system, a global consumer technology company and a leading cybersecurity company alongside a steady stream of mid-market wins. This is one product adopted across every tier of our customer base. Verity Accruals is expanding quickly. We are adding new agents for payroll and prepaid accruals this year, extending into 2 of the most manual judgment-heavy parts of the close. Early customers are already closing up to 3 days faster and spending 80% less time on accruals work. Verity Prepare coordinates a team of specialized agents that ingest documentation, identify reconciling items and assemble a complete audit-ready package for human sign-off, delivering up to 94% reductions in preparation time. Customer count grew nearly fourfold quarter-over-quarter. Revenue is not yet material, but growing nicely. The pattern we expect is emerging as customers start narrow and then expand use cases as their confidence builds. Three examples show why this is resonating. One of the largest pharmaceutical companies in the world tested whether they could build its record-to-report workflows on a general purpose LLM. They learned quickly that a model generating suggestions cannot coordinate a full workflow the way our multi-agent architecture does with the transparency auditors require built in from the start. So the company chose to go deeper with BlackLine instead. Another top-tier pharmaceutical company already live on our intercompany platform is deepening its use of Verity because it is built on a real accounting logic and compliance. And a major healthcare company converted to platform pricing this quarter to gain full access to capabilities that are already seen work as an early adopter. 3 companies, 3 different reasons, one conclusion. A customer does not need to build a new governance framework to deploy AI and finance because BlackLine already is that framework. Platform pricing is the gate customers pass through to access our Agentic capabilities. That is why deepening agent adoption inside an already converted customer is a natural driver of expansion revenue, proof of value that extends platform adoption across that customer's business. Verity Match makes the same case elsewhere in the close. It is in early adopter testing with general availability expected soon. Our rules-based matching solution already resolves most transactions automatically, but the remaining exceptions, a small share of volume take up a disproportionate amount of time as each one requires manual investigation. Verity Match targets that tail directly. Running at production volumes with our early adopter customers, it brings total match transactions, automated and AI resolved combined to 90% while cutting manual investigation time by roughly 2/3. The same governance model extends into invoice to cash as well. Verity Collect is our multimodal Agentic collections offering that is being tested by customers currently. Verity Remit, our Agentic remittance agent, is cutting manual effort by more than 95% for our best-performing customers. Verity Remit is on track for general availability this quarter, and Verity Collect in the fourth quarter. Our largest partners, such as Accenture, Capgemini, Deloitte, E&Y and KPMG have had strong years with BlackLine, building record practice revenue. They see the opportunity to build an evergreen business on our controls layer instead of trying to build their own. Our relationship with SAP is deepening, too, with 2 milestones expected in the third quarter. We are working to enable platform pricing for SolEx customers, and we expect Verity Accruals and Verity Prepare to retrieve SAP premium qualification. Finally, on the market, the clearest signal is that the largest, most complex enterprises in the world are standardizing on BlackLine as their control layer for finance, and this quarter's wins prove it. We won new customers, including Vodafone and the leading global market data platform. We also expanded major relationships with Royal Dutch Shell, a mega German healthcare company and a large private telecommunications company. Subsequent to quarter end, we also closed 2 of the top 6 largest U.S. banks, both who signed long-term 7-figure deals with BlackLine. Net new business has been a bright spot in the first half. Verity adoption has been growing across every segment and platform adoption is scaling fastest with net new business, where customers are landing directly on platform pricing from day 1. Platform conversion inside our existing base is moving on each customer's own time line. Customers are timing their move often with their renewal date. Many customers want additional proof points before moving, more time in market for our new Agentic offerings, a referenceable peer they can point to, and support from their audit committees and auditors. We are now putting our own professionals inside customer environments, building a working proof of concept on the customers' data to overcome reticence. That same conviction in the enterprise extends to the middle market, where our Agentic offerings are built for faster time to value with less implementation overhead. We are refreshing how we package and price for this segment to match how mid-market companies are evaluating and buying. We also see real opportunity in new markets. Public sector has been a strong area of progress with new deals closed and multiple proofs of concept underway with civilian and defense agencies. In the Middle East, the war has slowed our progress, though we still see it as an attractive market given our infrastructure investments, the depth and breadth of our go-to-market partner network and continued interest from prospects. To close, I believe this has been the most consequential period in our history. Our Agentic financial operations strategy is rapidly maturing. The proof is showing up in real product, real adoption and real new business. The market has tested us with more scrutiny than ever, scrutiny we are built to meet. We're responding with speed. Our position is strong, and we believe the opportunity for BlackLine is larger now than what we described last year. With that, let me now turn it over to Patrick Villanova. Patrick Villanova: Thank you, Owen. Our second quarter results reflect a business with strong profitability and cash generation, healthy underlying customer economics with a quarter shaped by the deal timing you just walked through. Going a bit deeper on the financials this quarter. Total revenue was $187.8 million, up 9.2%, with subscription revenue growth of 9% and professional services revenue growth of 11%, reflecting strength in go-live activity and early AI deployment with customers. ARR grew to $719 million, up 6% or approximately 7%, excluding an approximate 1 point FX headwind. Calculated billings grew 6% in the quarter with trailing 12-month billings growth of 7%. Two factors explain the gap between these metrics and our subscription revenue growth rate. One is timing tied directly to the deal dynamics Owen just walked through: a number of large strategic deals moved past quarter end, several of which have now closed. The other is tied to our success with platform pricing. As more of our base moves to platform, which is unlimited users, we see less organic lift from user expansion than we've historically experienced. That effect persists until platform and AI adoption scale enough to offset it. Remaining performance obligations, or RPO, which captures the full value of multiyear contracts we are signing, was over $1.1 billion, growing 17%, well ahead of both revenue and ARR growth. Current RPO, the portion we expect to recognize over the next 12 months, grew 11%, also ahead of revenue and ARR. Both are being driven directly by the same dynamic Owen described, larger deal sizes and a higher mix of multiyear renewals. Bigger, longer contracts capture their full value in RPO immediately, while ARR reflects only a single year regardless of contract length. So RPO naturally grows faster as deal size and duration increase. Current RPO growth is the best leading indicator we have of where revenue is headed since it reflects the business already under contract converting over the next 12 months. We expect at least 2 points of incremental growth from platform conversion and Agentic adoption, and that is the mechanics behind our view of exiting this year at double-digit growth with further acceleration in 2027. Platform ARR as a percentage of eligible ARR grew to over 17%, continuing to track toward our full year target of 25% with even stronger traction in the mega enterprise segment, where that figure is now over 21%. Our SolEx channel and broader SAP relationship continued to contribute, and we see further opportunity as platform pricing and premium qualification of our Agentic offerings open new avenues into SAP's installed base. SAP was 26% of revenue. Turning to retention and renewal trends. Dollar-based net revenue retention was 102.4% or approximately 104% normalizing for FX, driven by platform migration and cross-sell of invoice to cash, matching and journals, offset by lower levels of user adds. Our enterprise revenue renewal rate remained strong at 95%. Middle market logo count this quarter reflected the tail end of the lower mid-market cohort we've discussed in prior quarters. It's tracking as we anticipated, and we expect that to ease further from here. Now let me turn to profitability and cash flow. Non-GAAP gross margin was 80.4%, with non-GAAP subscription gross margin of 83%, continuing to expand as we sunset legacy private data centers and drive further efficiencies in cloud spend, structural improvements that keep compounding rather than onetime gains. Non-GAAP operating margin was 23.3%, up from 22.1% in the second quarter of last year, driven by disciplined execution and the operating leverage we are building across the business, including efficiency gains from our own use of AI in internal operations. Non-GAAP net income attributable to BlackLine was $42.9 million with adjusted earnings per share of $0.61. We delivered operating cash flow of $45 million and free cash flow of $36.5 million. We expect stronger free cash flow margins in the second half, resulting in full year free cash flow growth of approximately 20%. We ended the quarter with approximately $528 million in cash, cash equivalents and marketable securities versus $667 million in debt. We repurchased 1.2 million shares in the quarter for $38 million, ending the quarter with approximately $180 million of capacity remaining under our existing program. And today, we announced that our Board approved an additional $100 million increase in our stock buyback program, bringing our total available capacity to approximately $280 million. Outside of M&A, we expect to use approximately 100% of free cash flow for repurchases over the remainder of the year, generally in line with our pace through the first half. Looking to the back half of the year, several of the deals that slipped out of the second quarter have already closed, and the current RPO growth I just described tells you the underlying contract business continues to convert on schedule. Our pipeline continues to mature with larger, more strategic deals moving through it. Platform conversion and strategic products remain 2 of the biggest drivers of incremental growth. Several product releases also land in this window. Verity Match reaching general availability, new payroll and prepaid accrual agents and SAP premium qualification for Verity Accruals and Verity Prepare, along with platform pricing availability for SolEx customers. On FX, back in May, we called out a modest revenue headwind of $1 million to $2 million for the year. Exchange rates have moved further against us since, and we now expect roughly another $1 million on top of that concentrated in the back half of the year. Even so, our third quarter and full year revenue guidance ranges still imply exiting this year at double-digit growth with this incremental headwind absorbed. Now on to guidance for the third quarter. We expect total GAAP revenue to be in the range of $193 million to $195 million, representing 8.3% to 9.4% growth. We expect non-GAAP operating margin to be in the range of 24.5% to 25.5%. And we expect non-GAAP net income attributable to BlackLine to be in a range of $45 million to $47 million or $0.62 to $0.65 on a per share basis on approximately 74.5 million diluted weighted average shares. And for the full year 2026, we are maintaining our range for total GAAP revenue of $765 million to $769 million, representing 9.2% to 9.8% growth. We expect non-GAAP operating margin to be in the range of 24.1% to 24.6%, and we expect non-GAAP net income attributable to BlackLine to be $177 million to $182 million or $2.47 to $2.54 on a per share basis on approximately 74 million diluted weighted average shares. Operator, we're ready for questions. Operator: [Operator Instructions] Our first question comes from the line of Chris Quintero of Morgan Stanley. Christopher Quintero: I wanted to ask about the friction adoption that you all called out makes a lot of sense given this is a very important software, touching financial systems and data. But from your perspective, what do you think you can do or have been doing to help speed up some of that adoption on your end? Owen Ryan: Yes. I think, Chris, first of all, good to hear you. And I think the short thing is if you go back and who we're talking with, right? We're working with the audit firms, we're working with the regulators, we're working with the internal audit standard setters. Obviously, we're working with our customers, working with implementation partners and then working with the customers themselves on what they need to move forward. So and I said in the prepared remarks, the amount of time we're really spending in the market with all those different constituencies because all of them have their interest aligned to some degree, but they all have different responsibilities and how they fulfill those responsibilities. So for us, what's been critical is being in the room really showing, and Jeremy has been the one driving that along with Patrick how our AI works and how it doesn't need to be a black box, so we can show all that transparency through what we call a glass box so that you can see the human in the loop, you can see the chain of thought, you can see the tens of thousands of transactions we keep running to show that we can get to the same answer over and over under different scenarios. And I think that's what's really trying to prove the comfort and confidence that our customers are looking for. And so I think the thing that we're seeing is a building belief in the reliability of what BlackLine can provide and control for our customers and the various constituencies that need to sign off on the financial statement. So that's at its core. Christopher Quintero: Got it. That's helpful, Owen. And then on those deal elongation that you're seeing, can you remind us what a typical deal cycle looks like for you all? And how does the new kind of deal cycle [ look like ] today? How much more elongated is it versus your prior ones? Owen Ryan: Yes, Chris, I mean, we typically, in the enterprise space, we talk about 9 months to a year and these are not the most precise numbers, but you could say that the deal cycle is elongated by another 40, 45 days based upon the work we're seeing. That's just an average, but some of them could be longer. Some of them could be a little bit quicker. But again, really what's driving it is, more than anything else, you have, in essence, a new technology in the marketplace. And all the people on the buy side from the customer, there's people asking new kinds of questions around truly around how do we govern our AI? How do we use the different models? How do we protect their data? How do we think about sovereignty as they cross borders? How do we think about it, there's political disruption where models can't be used in certain geographies? There is more questions now about the vulnerability because of AI-enabled hacking and how our defense and security around all that. I mean the good thing is these are things we're well, well built to answer and respond to, but it does take more time as customers are asking those questions. And the big deal that we described that we're still working through the final terms on is a perfect example. I mean, we literally had a war room put together with the customer and ourselves trying to work through everything through June 30, it's now August 3, and we still got a few things that we're working our way through it. And everybody wants to get it done but there's just safety protocols everybody is sort of thinking about. So I don't think this is permanent, by the way. I just think that there's a learning experience that customers are going through. We certainly have learned a lot. We are equipping our teams with responses that they can bring to the market to sort of short circuit some of these additional questions that are coming through because we now know what the issues are. And quite frankly, even if the customer doesn't know what the issues are, we're trying to bring those more -- front and center so that they know what they should be asking about and thinking about and then why BlackLine is very reliable and trustworthy in that process. Operator: Our next question comes from Steve Enders of Citi. Steven Enders: And maybe just kind of following on the prior questions from Chris. But I guess as we think about the year coming together and the deal delays I guess, how do you kind of have confidence in the challenges on the deal side, maybe stabilizing or improving and that we're not at a time where the deals keep on flipping. Just I guess, in your conversations, what gives confidence and that may be being stable now? Owen Ryan: Yes. Look, Steve, I wish I could tell you we know exactly it's stable. That's why we said predicting things is just a little bit harder. That said, I think, again, when we look at our pipeline for the third quarter and the fourth quarter, the lessons we learned, where we are in the stages of closing those deals. And then the bottoms-up review that Stuart Van Houten and his team run on every deal across all segments of the business around all geographies and by industries, it gives us a pretty good confidence of what we expect to happen on the back half of the year. So I think we're seeing some good things around our customers' interest in our AI capabilities. You can sort of see some of the additional confidence. And I know I think I was reading one of your notes where you've got some proof points that you've seen in the market, but our customers are really responding positively. Our implementation partners have really been invaluable in helping us continue to iterate and improve what we're bringing into the marketplace. And I think that's all showing up really well in what our customers are looking for. And I do think you're starting to see a little bit more confidence in firms like BlackLine and what we bring. And I don't want to say that the fever is completely broken where everybody wanted to build something themselves that we saw in the first half of the year but the fever has come down dramatically more. And I think as we -- certainly, for us, can articulate our value proposition on a build versus a buy that shows up pretty well. And so I think we feel pretty good about what we're trying to do in the back half of the year. Patrick, anything you want to add to that? Patrick Villanova: Yes. I guess to put some data behind that, too, Steve, and it's good to hear from you. Even looking back in March, at some of the deals that slipped in and the time it took to close them subsequent to March. And then looking again at June 30 at a different list of slip deals, and we've already closed half of them. So we're getting -- we're all collectively, to Owen's point, getting smarter about this. We're getting more diligent, we're short circuiting some of the -- to use his words, some of the questions that are coming. So we're seeing -- while we're still seeing some deal slippage, we're getting better at closing them after the quarter and that window is shortening, that time frame is shortening. Steven Enders: Okay. No, that's very clear there. And then maybe just in terms of top of funnel and opportunities coming through, how is that maybe progressing? And I guess, as we think about the AI opportunity and people assessing into those assessments, does that have any impact in terms of the opportunities you might be seeing coming through at this time? Owen Ryan: Yes. So I don't have the July data, but through the end of June, our pipeline has never been more robust. It's skewing more towards mega enterprise and enterprise than it is mid-market. That's more of a global phenomenon than just, say, a North American phenomenon from what I've seen. And so you're starting to see things moving through -- continuing to see things moving through the pipeline. So I think we feel really good and confident about the top of the funnel. I think for us, again, now is the issue in the back half of the year is to continue to find ways to accelerate those close dates. And I think the team is doing all the things that they should be doing. Obviously, it takes a few people to work through this on the customer side as well. But I think from a pipeline perspective, the positioning we have, particularly in the enterprise and the mega enterprise space, we like where we're at. And so again, I think gives us quite confidence as we head into the back half of the year. Operator: Our next question comes from Rob Oliver of Baird. Robert Oliver: I had 2. Patrick, I'll start with you on the overall RPO number, definitely really nice leading indicator there on deal activity. I know you said that agents are going to deliver, I think you said a couple of points in the growth going forward. As you're looking at those longer-term contracts coming in here, particularly with new customers where you're having a lot of success with the new model, how are you accounting for the Agentic elements? How are customers accounting for those consumption-based elements around some of your products? And how do you get comfort around that contribution? And then I have a follow-up for Owen. Patrick Villanova: Rob, thank you. I appreciate the question. So Rob, you're absolutely right that the RPO story right now, the 17% year-over-year growth is a great story. It's not just indicative in terms of that we're landing larger deals, that our average deal size is up 24% year-over-year, but we're landing longer-term deals as well. Customers want to be part of the finance transformation. And then existing customers that have been with us for years, they're renewing for longer periods of time. They're inspired, they're interested, they're intrigued by the product offerings that we have out there. I can say this that in that 17%, there's not a material amount in terms of future Agentic revenue. But all of our customers that are signing new right now, we are discussing that with them. As we said in the prepared remarks, we saw a 4x increase in the number of customers on Verity. And we have now proof points in terms monetization of our Agentic revenue. That only represents a tailwind for us, and that RPO number will only grow with that tailwind into the future. Robert Oliver: Great. That's helpful. Okay. And then Owen this could be for you or Patrick, a bit of a follow-up. But just clearly, new customers are embracing the new model here. You guys have done a really good job, I think, of showcasing the value to new customers. There's still appears to be some tension around existing customers. I think part of that is clearly because of the SAP Select, which could be a potential unlock here for existing customers. But I know you said you're not forcing customers onto the new model. So a lot of cajoling happening. Can you maybe talk a little bit about as you're meeting with customers, you've got some very loyal long-term customers. What some of the pushback points are right now? Are those renewals or negotiations being brought to RFP? Is there -- are there any additional tensions that are coming in around that process with some of your kind of strong multiyear customer relationships as they consider the new model? Owen Ryan: Yes. I think -- thanks, Rob. I think Patrick and I'll tag team this a little bit. But so no, we don't have our customers going out for RFP. So that's not really the issue. You're right that there is some things around SolEx that make this a little bit unique, but we try to sort of talk about the eligible pool for going a platform versus the part that's not. I think there's a couple of things that certainly come out. One is, our customers, if they're pretty well adopted, there's always this push of, well, how much more am I going to get out of this, show us more proof point on your road map, show us other examples. And so they're sometimes just taking a little bit longer to win over their hearts and minds, if you will, from what we've seen. And then sometimes, it's just where these customers are on their own journey and all their other competing priorities. And so even though they might want to increase their commitment to BlackLine because of some of the other things they're doing in their technology shop, they're not going to take advantage of that yet. So they're just saying or saying we don't need this right now. While I don't love that answer, I respect and understand that's some of the things that they think through. But Patrick, you're also dealing with this every day with Stuart and the team as well. Anything to add? Patrick Villanova: Yes, Rob, I would add, in terms of our existing customer base and the uptake of the platform, that headwind was more of a 2025 story, and we saw that dissipate by the end of 2025. Right now, as the story has gone from unlimited users to product-led, the level of intrigue and interest is increasing notably. That's why we feel so confident that we're going to get to 25% of eligible ARR by the end of this year, and we're exactly where we want to be as of June 30. So the model is holding together. The forecast is holding together. It's proving out to be true and we continue to see that acceleration in the existing base as Jeremy and his team released more and more products, solutions within and agents within the platform that our customers are interested in, our existing customers. Operator: Our next question comes from Patrick Walravens of Citizens. Patrick Walravens: Great. Owen, can you talk a little bit more about what exactly you guys mean by a sovereign cloud? I mean it was a company, not a country, right? And just what are the requirements there and how many of these kinds of opportunities are out there? Owen Ryan: Yes. I'm going to let Jeremy take the lead on this. Go ahead, Jeremy, please. Jeremy Ung: So sovereign cloud really refers to the need to have data sovereignty. So customers, we're increasingly seeing wanting their data to be fully within the borders of the country. And so sovereign cloud deployments allow us to deploy our solution into that environment, ensure that no data leaves, ensuring that AI solutions and other software are fully hosted in that environment. You can think of it like FedRAMP and other federal markets, but for other countries and other regions of the world. Patrick Walravens: Okay. And is this -- are there a lot of these? Jeremy Ung: I would say the appetite has increased due to geopolitical events. And so you're seeing increasing desires to have control over data. It has been a trend over several years, that has been increasing over several years. The other is around AI models. AI model selection, which is why we are model agnostic has also been a topic for discussion where people want to be able to understand where their data is used. Ensure it doesn't leave their country to meet compliance requirements and other areas. So you'll see this in a lot of regulated industries. Patrick Walravens: And then if I could follow up, and hopefully, this is related. But in the prepared remarks there was a comment about meeting with lots of CEOs and there was a comment there and the Frontier labs building the models. What's the nature of those meetings and conversations? Owen Ryan: Well, it's basically, if you think about it, when you're thinking about the conversations around build versus buy, obviously, the Frontier labs they provide, the tokens, the opportunity to build things and what we bring, obviously, is all the institutional knowledge of how this works. And so I think we're seeing the opportunity to help drive more speed to value for customers, the ability to reduce risk as customers are trying to do this, helping them figure out the best way to get the best return in the most cost-effective way because I think as the Frontier labs think about what they do is they provide that sort of raw material that can be used in creating of agents. And what we do is to help create the right way to build those agents and in a very controlled and governed way and do that with customers directly as well as with our large system integrator partners, and we expect as well to be doing with our BPO partners. But that's just part of it, Jeremy and I've been doing these conversations together. Jeremy anything you want to add? Jeremy Ung: Yes. I think the large part of where AI adoption going is really in finance accounting to our critical workloads that need to have control, governance and auditability. You need to be able to reproduce those outputs on request for auditors. They need to be immutable. And I think if you look at what these frontier models provide, they provide part of that equation, but they don't provide the auditability. They don't provide the governance. They don't provide those controls, and that's where we come in. And so those partnerships are critical to unlock more AI adoption in the office of the CFO in finance and accounting. Operator: Our next question comes from Alex Sklar of Raymond James. John Messina: This is John on for Alex. I know it's been touched on quite a bit, but maybe, Owen, on the sales cycles, what do you think can change heading into the second half to maybe close some of those deals. I know you just called out broader complexity leading to the elongation, but any more commonality, maybe geographical differences or customer size dynamics that you're seeing differences in elongation on sales cycles. I have a quick follow-up. Owen Ryan: Well, the elongation is definitely concentrated higher up in the market. So the bigger the company, the more people in the room, the more questions, the more checks and hurdles that we're working our way through. And as I think about whether it's North America, Europe, Japan, the rest of Asia Pac, I'm not sure that we're seeing anything really different materially. Certainly, between Japan -- or amongst between Japan, Europe and North America, I think those standards are continuing to be very, very high as to what we have to meet. And so I think a lot of this, Alex, is us continuing to work and educate the buyers about how, again, it works within BlackLine and then us just getting smarter to accelerate our ability to respond to those questions, both holistically, whether it's by industry or geography to your point or comparable size. I mean there's just a whole bunch of things that we're learning each and every time. And as we learn things in the field, we bring it back to the center and then try to get it back out to our team so they can be that much more effective and efficient as they're working with prospective customers and existing customers. John Messina: That's helpful color there. And I wanted to ask on the mid headwinds you've been facing. Are we getting close to a point where those dynamics begin to reverse? And can you remind us what's sort of embedded in the outlook? And do you still expect to be through this dynamic as we exit 2026? Patrick Villanova: Alex, just you cut out briefly there. You're referring to the mid-market. John Messina: Mid-market. Patrick Villanova: Yes. So Alex, everything is playing out as we expected as it relates to the mid-market, the lower mid-market, just to be clear. We track that cohort of customers very carefully over the last 3 years. We see that built into the outlook or it is built into the outlook for the remainder of 2026, and we see that rate of churn amongst the lower mid-market dissipating or slowing down as we exit 2026. So we -- it is playing out as we forecasted or as we have been monitoring it, and that is built into the guide and for next year and beyond. Operator: Our next question comes from Lucky Schreiner of D.A. Davidson. Lucky Schreiner: Great. I wanted to ask about acquisition of WiseLayer and how we should think about how their more complex agent capabilities and able to handle those more challenging judgment-based tasks are trending so far with customers given your commentary around AI scrutiny from customers in terms of the deal cycle. And how we should think about that moving forward? Owen Ryan: I think a couple of things, and Jeremy and I are tag team this. So first of all, I don't think we could be any more pleased with the acquisition of WiseLayer. I think their team has been a phenomenal addition to the organization. I think on the go-to-market side of this, and I'll let Jeremy -- ask Jeremy to talk about the product side. It takes a couple of cycles to work your way through learning what the customers are looking for. One of the big improvements we wanted to make was linking the accruals capabilities to our journal solution, which was very important we learned in the enterprise space as we were moving forward. The pipeline for that part of our business has grown quite nicely in the second quarter as our own teams get more comfortable with its capabilities, but also as the WiseLayer team has a little bit of time to breathe and get out in the market and do some of the things that we were asking them to do. So net-net, we have a Board meeting this week. I think we're going to tell the Board, we're very pleased with the acquisition so far, not satisfied with what we think we can still do, but overall positive. But Jeremy, do you want to talk about the product side. Jeremy Ung: Yes. On the product side, the WiseLayer team has been a great catalyst being able to seed those Agentic AI capabilities and expand them throughout our portfolio. They have helped us accelerate that, not just in the capabilities themselves, but also how we work and how we write code. In terms of their capabilities, it's also been great to be able to marry up their Agentic capabilities in the accrual space with our mature capabilities and controls like journaling. Those 2 combined give people the confidence that these Agentic capabilities can be done safely, provide real ROI, but we also get the benefit of fast time to value from accruals and those Agentic implementations in addition to the existing mature BlackLine capabilities that we've now integrated them together with. Lucky Schreiner: Great. I appreciate that. Maybe the last one for me, just on the enterprise renewal rate ticking down slightly to 95%. Was that mainly just from the push to deals? Were there some FX headwinds in there? And with some of those deals now closing, should we expect that to bounce back next quarter? Patrick Villanova: No, that metric, just to be clear, is not impacted by FX, the 95% renewal rate. There's a little bit of rounding there, 95% versus 96%, but we have modeled that out over the next year and we feel very confident that it will be at the mid- to upper 90s for the foreseeable future. So we feel very confident in that metric. We like where it is. And just to be clear, the slip deals would impact DBNRR but would not impact GRR or the revenue -- or the renewal rate. Operator: Our next question comes from Tomer Zilberman of Bank of America. Tomer Zilberman: Maybe I wanted to ask a similar question along the lines of the deal slippage. I think you said earlier that half of the deals that slipped in Q2 now closed in Q3. But if I look at the guidance for Q3 and the implied guide for 4Q, the results are largely in line with Street expectations. So I guess the question is, what's the timing between the closing of the deals and when you actually see them start showing up in the results? And do you think that as you continue to close the other half of the deals that, that could provide potential upside to back half expectations this year? Or would that be more of an opportunity for 2027? Owen Ryan: Thanks for the question. So the story there in terms of the guide for Q3 and the remainder of the year is largely FX. Back in May, when we were bridging to our original guide that we laid out at the beginning of the year in February, we calculated or identified about a $1 million to $2 million revenue headwind. Since May, based upon where FX rates were at the end of the quarter, there's about another $1 million FX headwind as a result of the strengthening of the U.S. dollar given several market factors. Our guide that we laid out in February was able to absorb that FX headwind, which is a testament to our underlying performance and what we're doing in the market. But to your question, there is an element there that the slip deals, whether they're a month or 2 months or so, you do lose a month or 2 of revenue. But that is a subset or a minor part of the story as compared to FX. And then lastly, as these deals close throughout the remainder of 2026 in Q3, that absolutely is a tailwind for 2027 because then you get the full revenue impact next year. Operator: I am showing no further questions at this time. I would like to now turn it back to Owen Ryan, Chief Executive Officer of BlackLine. Owen Ryan: Thank you, operator, and thank you, everybody, for listening today. We truly appreciate your interest in BlackLine and we look forward to talking to you soon. Take care. Thank you. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Before you buy stock in BlackLine, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BlackLine wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends BlackLine. The Motley Fool has a disclosure policy. BlackLine (BL) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

BlackLine’s second quarter results were met with a significant negative market reaction, as deal delays and customer hesitancy around AI adoption impacted performance. Management highlighted that elongated deal cycles, especially in mega enterprise accounts, created $8 million in expected revenue slipping past quarter end. CEO Owen Ryan pointed to increased scrutiny from customers’ security, risk, and compliance teams as a source of friction, stating, “Customers are evaluating more than just software now... everything is simply taking longer.” The company’s move to platform pricing, offering unlimited users, also contributed to lower near-term growth from user expansion, as value shifts toward broader usage and AI capability uptake. Is now the time to buy BL? Find out in our full research report (it’s free). Revenue: $187.8 million vs analyst estimates of $187 million (9.2% year-on-year growth, in line) Adjusted EPS: $0.73 vs analyst estimates of $0.57 (27.2% beat) Adjusted Operating Income: $43.81 million vs analyst estimates of $41.44 million (23.3% margin, 5.7% beat) The company reconfirmed its revenue guidance for the full year of $767 million at the midpoint Management raised its full-year Adjusted EPS guidance to $2.51 at the midpoint, a 1.2% increase Operating Margin: 5.9%, up from 4.4% in the same quarter last year Customers: 4,300, down from 4,301 in the previous quarter Net Revenue Retention Rate: 102%, down from 105% in the previous quarter Annual Recurring Revenue: $719 million vs analyst estimates of $737.4 million (6.2% year-on-year growth, miss) Billings: $193 million at quarter end, up 5.9% year on year Market Capitalization: $1.70 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Christopher Quintero (Morgan Stanley) asked how BlackLine is addressing friction in AI adoption, and CEO Owen Ryan cited the company’s efforts to increase transparency and customer education, emphasizing “glass box” AI processes and building customer trust through demonstrations and rigorous audit trails. Steven Enders (Citi) questioned confidence in deal cycle stabilization, to which CFO Patrick Villanova responded that while predicting timing is difficult, improved diligence and lessons learned have led to faster post-quarter deal closures and a more robust pipeline. Robert Oliver (Baird) inquired about the contribution of Agentic products to long-term contract value, and Villanova clarified that while future Agentic revenue is not yet material in RPO, customer interest and adoption rates are rising and expected to drive future growth. Patrick Walravens (Citizens) asked about “sovereign cloud” requirements, and CTO Jeremy Ung explained that demand for localized, compliant deployments is rising due to geopolitical and regulatory pressures, particularly in highly regulated sectors. John Messina (Raymond James) probed the persistence of mid-market churn, and Villanova confirmed expectations that lower mid-market churn will ease by year-end, with this trend already built into management’s outlook. Looking to future quarters, the StockStory team will be monitoring (1) the pace of AI-enabled product adoption and customer migration to platform pricing, (2) stabilization of sales cycles and whether deal delays improve as regulatory clarity increases, and (3) the impact of new product launches and SAP partnership developments on revenue growth. Execution in the mid-market and international expansion will also be important indicators. BlackLine currently trades at $29.81, down from $33.12 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management characterizes the first half of 2026 as the most consequential in company history, marked by a strategic pivot toward 'Agentic financial operations' where AI and humans work equally governed within the close. Revenue growth of 9.2% was impacted by approximately $8 million in deal slippage, primarily in mega-enterprise pursuits where AI governance evaluations are extending sales cycles by an average of 40 to 45 days. The transition to platform pricing is intentionally trading off near-term seat-based growth for long-term usage value, with 90% of net new business now landing directly on platform pricing. Strategic validation is evidenced by a 17% growth in RPO to over $1.1 billion, reflecting larger deal sizes (up 24%) and a higher mix of multi-year commitments (56% of renewals). Management notes that while AI adoption friction exists due to regulatory uncertainty, buying is increasingly winning over 'build' assessments as customers realize the complexity of governing autonomous agents. The Studio360 platform serves as the essential governance layer, with 77% of the eligible base actively using AI features, reaching nearly 13 million actions in the quarter. Management expects to exit 2026 at double-digit growth, with platform and agent adoption projected to contribute at least 2 points of incremental revenue growth in 2027. The guidance framework assumes the absorption of an incremental $1 million FX headwind in the second half, totaling approximately $2 million to $3 million for the full year. Strategic product milestones for Q3 include the general availability of Verity Match and Verity Remit, alongside SAP premium qualification for key Verity accrual and preparation agents. The company anticipates achieving AIUC-1 certification in September, providing a third-party standard for AI agent security to help shorten customer evaluation timelines. Capital allocation remains focused on shareholder returns, with plans to use approximately 100% of free cash flow for share repurchases through the remainder of the year. The Board approved an additional $100 million stock buyback program, bringing total available capacity to approximately $280 million. BlackLine is expanding into the public sector and sovereign cloud markets, recently winning a 5-year, 8-figure deal with a large European company requiring stringent data sovereignty. Non-GAAP subscription gross margins expanded to 83% as the company continues to sunset legacy private data centers in favor of cloud efficiencies. The acquisition of WiseLayer is being integrated to handle complex tasks like payroll and prepaid accruals, while other Agentic offerings like Verity Remit are cutting manual effort by more than 95% and Verity Match is resolving 90% of transactions. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management is proactively engaging with audit firms, regulators, and standard setters to establish 'glass box' transparency for AI models. The sales team is being equipped with standardized responses to security and governance questions to 'short circuit' the elongated evaluation process. Current RPO growth of 11% is cited as the best leading indicator for revenue acceleration, as it captures the shift toward larger, multi-year strategic relationships. While Agentic revenue is not yet material, the 4x increase in Verity customer count provides a clear monetization path that will act as a tailwind for 2027. The elevated churn in the lower mid-market cohort is performing as anticipated and is expected to dissipate as the company exits 2026. Management is refreshing packaging and pricing for the mid-market to focus on faster time-to-value with less implementation overhead.

This article first appeared on GuruFocus. Revenue: Total revenue was $187.8 million, up 9.2% year-over-year, with subscription revenue growth of 9% and professional services revenue growth of 11%. ARR: Annual recurring revenue grew to $719 million, up 6% (approximately 7% excluding FX headwinds). RPO: Remaining performance obligations exceeded $1.1 billion, growing 17%, while current RPO grew 11%. Gross Margin: Non-GAAP gross margin was 80.4%, with non-GAAP subscription gross margin at 83%. Operating Margin: Non-GAAP operating margin was 23.3%, up from 22.1% in the prior year period. Net Income: Non-GAAP net income attributable to BlackLine was $42.9 million, with adjusted earnings per share of $0.61. Cash Flow: Operating cash flow was $45 million, and free cash flow was $36.5 million. Retention: Dollar-based net revenue retention was 102.4% (approximately 104% normalizing for FX), with an enterprise revenue renewal rate of 95%. Platform Adoption: Platform ARR as a percentage of eligible ARR crossed 17%, up from 13% last quarter, with mega enterprise above 21%. AI Usage: Feature usage reached nearly 13 million actions in the quarter, up over 220% sequentially, with roughly 3,000 customers (about 77% of the eligible base) actively using AI. Share Repurchases: Repurchased 1.2 million shares for $38 million in the quarter, with approximately $280 million in total capacity remaining after a $100 million board-approved increase. Warning! GuruFocus has detected 5 Warning Signs with BL. Is BL fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue grew 9.2% with non-GAAP operating margin expanding to 23.3% and free cash flow of $37 million. RPO grew 17% to over $1.1 billion, with current RPO up 11%, indicating strong future revenue visibility. Platform adoption is accelerating, with eligible ARR on platform crossing 17% (up from 13% last quarter) and nearly 90% of net new business landing on platform pricing. Agentic AI products like Verity Prepare and Verity Accruals are gaining traction, with Verity Prepare contributing to over $20 million in platform ACV and customer counts for Verity Prepare growing nearly four-fold quarter-over-quarter. Strong new customer wins and expansions, including Vodafone, Royal Dutch Shell, and two top six U.S. banks, with new deal sizes up 24% and multi-year commitments at 56% of renewals. AI adoption is broad, with over 90% of eligible customers AI-enabled and feature usage up over 220% sequentially, driving incremental revenue opportunities. Approximately $8 million of expected Q2 deals slipped due to elongated sales cycles, with AI-related scrutiny from customers extending deal timelines by 40-45 days. Revenue growth of 9.2% was below expectations, partly due to platform pricing reducing user-based expansion, which understates near-term demand. Dollar-based net revenue retention was 102.4% (104% ex-FX), lower than historical levels due to reduced user adds and platform migration. FX headwinds increased to approximately $2-3 million for the year, with an additional $1 million impact expected in the back half. Middle market logo count continues to decline due to lower mid-market churn, though tracking as expected, with the impact expected to ease through 2026. Deal timing remains unpredictable, with customers taking longer to evaluate AI governance, security, and compliance, creating uncertainty in quarterly results. Q: What is BlackLine doing to speed up AI adoption and reduce friction in the sales cycle, given the increased scrutiny from customers?A: Owen Ryan (CEO) explained that BlackLine is actively engaging with audit firms, regulators, and internal audit standard setters to build trust. The company is demonstrating its "glass box" approach, which provides transparency into AI operations, including human-in-the-loop controls and chain-of-thought visibility. By running thousands of transactions to prove reliability, BlackLine aims to build the confidence customers need to adopt AI in critical financial processes. Q: How much have deal cycles elongated, and what is driving the change?A: Owen Ryan (CEO) noted that typical enterprise deal cycles have extended by roughly 40-45 days, now taking about a year. The elongation is driven by new questions from customers regarding AI governance, data sovereignty, model selection, and security vulnerabilities. While this is a learning curve for the market, BlackLine is equipping its teams with responses to these concerns to shorten the timeline, and the company does not view this as a permanent shift. Q: Can you provide more detail on the "sovereign cloud" opportunity and the demand for such deployments?A: Jeremy Ung (CTO) clarified that sovereign cloud refers to data sovereignty requirements, where customers demand their data remain within specific country borders. This is increasingly important due to geopolitical events and is a growing trend, particularly in regulated industries. BlackLine's model-agnostic approach allows it to deploy solutions in these environments, ensuring no data leaves the country and meeting compliance requirements. Q: What is the nature of BlackLine's conversations with Frontier Labs, and how do they impact the build-versus-buy decision?A: Owen Ryan (CEO) and Jeremy Ung (CTO) explained that Frontier Labs provide the raw models, but they lack the governance, controls, and auditability required for finance and accounting. BlackLine brings the institutional knowledge and framework to build agents safely. These partnerships are critical to unlocking AI adoption in the Office of the CFO, as they combine the models' capabilities with BlackLine's control environment. Q: How is the WiseLayer acquisition performing, and what impact is it having on product development?A: Owen Ryan (CEO) expressed high satisfaction with the WiseLayer acquisition, noting the team has been a phenomenal addition. Jeremy Ung (CTO) added that WiseLayer has accelerated agentic AI capabilities across the portfolio, particularly in the accruals space. The integration with BlackLine's mature journaling capabilities provides customers with confidence in the safety and ROI of these agentic solutions, while also delivering fast time-to-value. Q: What is driving the confidence that deal slippage will stabilize, and how is the pipeline trending?A: Owen Ryan (CEO) stated that while predicting deal timing remains challenging, the pipeline is at its most robust level ever, skewing toward mega enterprise and enterprise deals globally. Patrick Villanova (CFO) added that BlackLine is getting smarter at closing slipped deals, with half of the Q2 slippage already closed. The company is seeing the "build versus buy" fever come down, and the lessons learned are being applied to accelerate future closes. Q: How are agentic elements accounted for in RPO, and what is the contribution to growth?A: Patrick Villanova (CFO) confirmed that RPO growth of 17% is driven by larger deal sizes (up 24%) and longer-term commitments, not by future agentic revenue, which is not yet material. However, all new contracts include discussions about agentic capabilities, and with a 4x increase in Verity customers, the monetization of agentic revenue represents a future tailwind that will further grow RPO. Q: What are the main pushback points from existing customers regarding platform conversion, and how is BlackLine addressing them?A: Owen Ryan (CEO) noted that existing customers are not going out for RFP but are seeking more proof points on the roadmap and examples of success. Some customers are delaying due to competing technology priorities. Patrick Villanova (CFO) added that the narrative has shifted from unlimited users to product-led value, increasing intrigue. The company is confident in reaching its 25% platform ARR target by year-end, with the model holding together as expected. Q: How should we think about the timing of closed deals showing up in results, and could they provide upside to back-half expectations?A: Patrick Villanova (CFO) explained that the guidance for Q3 and the full year is largely impacted by FX headwinds, which have increased by an additional $1 million since May. The slip deals result in a minor loss of revenue for a month or two, but as they close in Q3, they become a tailwind for 2027, when the full revenue impact will be realized. Q: What is the outlook for the enterprise renewal rate, and what factors are influencing it?A: Patrick Villanova (CFO) clarified that the 95% enterprise renewal rate is not impacted by FX and reflects slight rounding from 96%. The company has modeled this metric over the next year and is confident it will remain in the mid-to-upper 90s. The slipped deals impact DBNRR but not the gross renewal rate, which remains strong. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

BlackLine (BL) reported $187.82 million in revenue for the quarter ended June 2026, representing a year-over-year increase of 9.2%. EPS of $0.61 for the same period compares to $0.51 a year ago. The reported revenue represents a surprise of +0.52% over the Zacks Consensus Estimate of $186.85 million. With the consensus EPS estimate being $0.57, the EPS surprise was +7.02%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how BlackLine performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Billings: $193 million versus the three-analyst average estimate of $200.47 million. Total customers: 4,260 versus the two-analyst average estimate of 4,263. Retention Rate: 102% versus the two-analyst average estimate of 105%. Revenues- Professional services: $9.97 million versus the three-analyst average estimate of $9.42 million. The reported number represents a year-over-year change of +10.8%. Revenues- Subscription and support: $177.86 million compared to the $177.41 million average estimate based on three analysts. The reported number represents a change of +9.1% year over year. Gross profit- Professional services: $2.33 million versus $1.78 million estimated by two analysts on average. Gross profit- Subscription and support: $140.35 million versus $140.71 million estimated by two analysts on average. View all Key Company Metrics for BlackLine here>>> Shares of BlackLine have returned +12.7% over the past month versus the Zacks S&P 500 composite's +1.7% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BlackLine (BL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

(Bloomberg) -- SpaceX’s first earnings report following its blockbuster initial public offering is one of the most anticipated events of the summer on Wall Street. Whether it’ll give investors a reason to buy the sinking stock is another matter. Most Read from Bloomberg Beer Dynasty Families Sell €731 Million Stake in AB InBev Apple’s New CEO Taps Retired Hardware Executive for Management Team Taco Bell Met With Michigan on Parasite Weeks Before Recall Mamdani Dismisses Business Leaders Advising NYC’s Mayor’s Fund S&P 500 Closes Near Record High on US-Iran Hopes: Markets Wrap Elon Musk’s satellite, space and artificial intelligence company went public at $135 in June, and the shares have been on a roller coaster ride ever since, shooting up to $225 in the first days of trading and then plunging below the offering price. They closed Monday at $114.53, down 15% from the IPO and 49% from their high on June 16, erasing more than $1 trillion in market value from that peak. Earnings will give investors a chance to reassess the stock. The problem is SpaceX isn’t profitable and has a very speculative business at this point, so the results may end up raising more questions than they answer. With the shares still trading at a sky-high valuation despite the selloff, it will be difficult to entice new buyers. “There is so much that’s in the future of the SpaceX story, so much that hasn’t been done yet, or ever, so there’s nothing to make you comfortable,” said Drew Cupps, portfolio manager and head of the 5Perspectives Growth Team investment group at Polen Capital, which owns a small position in the company. “There’s not a lot of here and now. There’s no, look at last year to justify what you should pay now.” To make matters even more challenging for the stock, a flood of fresh SpaceX shares also is about to hit the market, as the first of many lockups that ban early investors from selling expires two days after the earnings report. As many as 911.5 million SpaceX shares worth more than $100 billion will be released on Aug. 6. And that’s just the start as billions of additional shares will be eligible for trading before the end of the year. All of which will weigh on the stock price simply based on the market’s supply and demand function. “It’s a total mess,” said Ken Mahoney, chief executive officer of Mahoney Asset Management. Wall Street expects SpaceX to report a loss of 24 cents per share in the second quarter on $6.8 billion of revenue. The results have been somewhat of a moving target, however, because so little information about the business is available. Analysts have widened their estimates for the company’s loss by 18% in the past month. “I have very little confidence in those estimates,” said Jim Lebenthal, chief market strategist at Cerity Partners. “I don’t mean this obnoxiously, but I think they’re mostly licking their fingers and sticking it in the wind.” What investors and analysts will primarily be looking for is management’s comments on the company’s progress with AI, Starlink and its rocket launch business. “We don’t have concrete earnings power that would be analogous to other parts of the market, but we do have a visionary set of massively capable assets that are in some cases unrivaled over all others,” said Polen Capital’s Cupps. SpaceX’s results come on the heels of a strong run of earnings reports from big AI spenders, including Alphabet Inc., Microsoft Corp. and Amazon.com Inc. Investors are particularly rewarding companies that are showing clear payoffs from their capital expenditures. For example, shares of Amazon and Microsoft surged following the companies’ results. With a market capitalization of roughly $1.5 trillion, SpaceX rivals the size of many megacap tech firms and is bigger than Musk’s other company, Tesla Inc. But its financials aren’t close, at least not yet, meaning investors may apply additional scrutiny to its spending plans. Analysts expect the company to report capital expenditures of $18.5 billion in the quarter and $45.5 billion for 2026. The primary issue facing SpaceX shares is their extreme market valuation. The stock trades at about 448 times earnings estimated over the next 12 months, the highest multiple of any member of the Nasdaq 100 Index, and 26 times estimated sales, which is among the 10 highest ratios in the technology-heavy benchmark. That helps explain why the short interest in SpaceX, which measures bearish bets against the stock, jumped to 34% of the company’s float, or the number shares available to trade in the market, from about 18% a month ago, according to data from S3 Partners. There are already more short bets against SpaceX than there are against Tesla. Still, Wall Street remains overwhelmingly bullish on the stock. Of the 39 analysts tracked by Bloomberg who cover the company, 30 have buy ratings. And few have backtracked on their extravagant predictions from when SpaceX went public. Raymond James analyst Brian Gesuale is sticking with his call for the shares to reach $800 within the next 12 months on exponential revenue growth. Adam Jonas at Morgan Stanley recently reiterated his $300 price target and said that shares trading at $100 values the company’s AI business at zero, making this an attractive entry point for investors. And Bernstein’s Douglas Harned is urging investors to ignore the specifics of the earnings report and focus instead on the company’s confidence in the future. “We believe the quarterly results should not matter,” Bernstein analysts led by Harned wrote in a note to clients on Friday. “What will be important is the level of confidence projected by management regarding the company’s growth path. Investors should look beyond short term stock movements as we view the case for a multi-trillion dollar valuation is about ‘if’ not ‘when’, for orbital data center plans.” Tech Chart of the Day Amazon.com Inc. surpassed $3 trillion in market value for the first time, becoming only the fifth company to ever reach the milestone. Top Tech Stories Palantir Technologies Inc. raised revenue and income forecasts for the full year after posting second-quarter sales that far exceeded Wall Street’s estimates, describing commercial demand for its data analytics tools as “otherworldly.” Snap Inc. posted higher-than-projected quarterly sales and gave an upbeat forecast for the current period, signaling optimism ahead of the September commercial debut of its first pair of augmented reality glasses. Grab Holdings Ltd. raised its annual earnings and sales forecasts, a sign that robust demand from Southeast Asian commuters is helping to absorb impact of higher fuel prices stemming from the Middle East conflict. Apple Inc. briefly removed the Telegram messaging app from its App Store after finding content on the platform that violated a ban on child sexual abuse material. China is growing anxious that Anthropic PBC’s Mythos could be wielded against the world’s second-biggest economy, adding a volatile new issue to already heightened tensions before a planned summit between Xi Jinping and Donald Trump. Earnings Due Earnings Premarket: Earnings Postmarket: --With assistance from Subrat Patnaik and David Watkins. Most Read from Bloomberg Businessweek Americans Are Rethinking Their Love Affair With Plant Milks A Wall Street Troll Reinvented Himself as the Groypers’ Pick for Governor. The GOP Can’t Get Rid of Him Trump’s Arctic Mining Deal Signals a New Era of State Capitalism Tokenmaxxing Is Dead. Now Comes the Belt Tightening Why Wall Street Is Getting Angry ©2026 Bloomberg L.P.

BlackLine (BL) came out with quarterly earnings of $0.61 per share, beating the Zacks Consensus Estimate of $0.57 per share. This compares to earnings of $0.51 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +7.02%. A quarter ago, it was expected that this company would post earnings of $0.45 per share when it actually produced earnings of $0.56, delivering a surprise of +24.44%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. BlackLine, which belongs to the Zacks Internet - Software industry, posted revenues of $187.82 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.52%. This compares to year-ago revenues of $172.02 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. BlackLine shares have lost about 40.7% since the beginning of the year versus the S&P 500's gain of 11%. While BlackLine has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for BlackLine was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.65 on $194.9 million in revenues for the coming quarter and $2.47 on $766.45 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, ZoomInfo (GTM), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This company is expected to post quarterly earnings of $0.27 per share in its upcoming report, which represents a year-over-year change of +8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. ZoomInfo's revenues are expected to be $301.25 million, down 1.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BlackLine (BL) : Free Stock Analysis Report ZoomInfo Technologies Inc. (GTM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in BlackLine? Here are five stocks we like better. Q2 results showed solid profitability and cash generation: Revenue rose 9.2% to $187.8 million, while non-GAAP operating margin expanded to 23.3%. BlackLine generated $36.5 million in free cash flow and reported adjusted EPS of $0.61. Large enterprise deals are taking longer to close: AI-related governance, security and compliance reviews extended enterprise sales cycles by roughly 40–45 days, causing about $8 million of expected Q2 opportunities to slip into later periods. Despite the timing pressure, remaining performance obligations increased 17% to more than $1.1 billion. BlackLine maintained its 2026 outlook while expanding AI adoption: The company cited strong usage of its AI products and expects platform conversion and agent adoption to contribute at least two points of incremental revenue growth next year. Full-year revenue guidance remains $765 million to $769 million, and BlackLine authorized an additional $100 million in share repurchases. 3 Dividend Stocks With Insiders Buying in 2026 BlackLine (NASDAQ:BL) reported second-quarter 2026 revenue growth of 9.2% as the financial automation software company cited strong profitability, cash generation and growing customer interest in its AI-enabled platform, while also noting that larger enterprise sales cycles have become more complex and extended. Total revenue was $187.8 million, with subscription revenue up 9% and professional services revenue up 11%. Annual recurring revenue reached $719 million, up 6%, or about 7% excluding a roughly one-percentage-point foreign-exchange headwind. The company said professional services growth reflected go-live activity and early AI deployments with customers. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control MarketBeat Week in Review – 05/04 - 05/08 Non-GAAP operating margin expanded to 23.3% from 22.1% a year earlier. BlackLine generated $45 million in operating cash flow and $36.5 million in free cash flow during the quarter. Non-GAAP net income attributable to BlackLine was $42.9 million, or $0.61 per diluted share. CEO Owen Ryan said AI-related evaluations have made enterprise transactions harder to predict, particularly among large customers assessing governance, data security, compliance and technology requirements alongside finance teams. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Is Backblaze the Next Momentum Monster? “Everything is simply taking longer,” Ryan said, adding that approximately $8 million in opportunities expected to close during the second quarter slipped into later periods. He said half of that amount had already closed by the time of the call, while the company continued to advance the remaining opportunities. Ryan said enterprise sales cycles have traditionally run about nine months to a year and have lengthened by roughly 40 to 45 days on average. The delay is most concentrated in the mega-enterprise market, where customers are conducting more formal build-versus-buy reviews and involving more security, risk, compliance and IT personnel. → Why Rare Earth Processing Could Be the Real 2027 Opportunity One example involved BlackLine’s first sovereign-cloud opportunity, a five-year, eight-figure transaction with a large European company. Ryan said BlackLine had won the competitive evaluation and completed legal, technical and security reviews but was still working through final details after the anticipated June 30 close date. Chief Technology Officer Jeremy Ung described sovereign cloud as a deployment model intended to keep a customer’s data within a country’s borders. He said demand has increased amid geopolitical developments and is especially relevant in regulated industries. Remaining performance obligations exceeded $1.1 billion, increasing 17% from a year earlier, while current RPO, representing revenue expected to be recognized over the next 12 months, rose 11%. CFO Patrick Villanova said those metrics were supported by larger transaction sizes and a higher mix of multiyear commitments. New deal sizes increased 24% year over year. Multiyear commitments represented 56% of the quarter’s renewal book, compared with 45% a year earlier. Nearly 90% of net new business was sold on platform pricing. Platform ARR exceeded 17% of eligible ARR, up from 13% in the prior quarter. Platform penetration in mega enterprise exceeded 21% of eligible ARR. BlackLine’s platform model provides unlimited users, which Ryan said reduces the historical contribution from seat additions in the near term. The company said it is accepting that tradeoff as it seeks greater adoption of platform products and AI capabilities. Dollar-based net revenue retention was 102.4%, or about 104% after normalizing for foreign exchange. Enterprise revenue renewal rate was 95%. Villanova said lower-mid-market customer churn continued to track according to the company’s expectations and should slow as BlackLine exits 2026. Ryan emphasized the company’s strategy of positioning Studio360 as a governance layer for AI used in finance and accounting. In June, BlackLine introduced Finance Control Console, which Ryan described as a control and governance plane designed to register AI agents, require certification before live use and maintain immutable audit trails. The company said more than 90% of eligible customers, or roughly 3,500 customers, are AI-enabled, while about 3,000 customers are actively using AI in financial operations. Feature usage reached nearly 13 million actions during the quarter, up more than 220% sequentially. Ryan said Verity Prepare has contributed to more than $20 million in platform annual contract value to date, while customer count for the product increased nearly fourfold sequentially. He said revenue from the offering is not yet material. BlackLine also highlighted Verity Accruals, which it said has been adopted by customers including a multibillion-dollar U.S. hospital system, a global consumer technology company and a cybersecurity company. The company plans to add payroll and prepaid-accrual agents this year. It said early users have closed up to three days faster and spent 80% less time on accrual work. Verity Match is in early-adopter testing and is expected to become generally available soon. Verity Remit is expected to become generally available in the third quarter, while Verity Collect is targeted for the fourth quarter. BlackLine expects AIUC-1 certification, an independent standard for AI-agent security and reliability, in September. For the third quarter, BlackLine forecast total GAAP revenue of $193 million to $195 million, representing growth of 8.3% to 9.4%. It expects non-GAAP operating margin of 24.5% to 25.5% and non-GAAP diluted earnings per share of $0.62 to $0.65. For full-year 2026, the company maintained its revenue outlook of $765 million to $769 million, representing growth of 9.2% to 9.8%. It forecast non-GAAP operating margin of 24.1% to 24.6% and non-GAAP EPS of $2.47 to $2.54. Villanova said foreign exchange is now expected to create about $1 million of additional revenue pressure beyond the $1 million to $2 million headwind previously identified for the year. He said the company still expects to exit 2026 at a double-digit growth rate and expects platform conversion and agent adoption to provide at least two points of incremental revenue growth next year. BlackLine ended the quarter with approximately $528 million in cash equivalents and marketable securities and $667 million in debt. The company repurchased 1.2 million shares for $38 million during the quarter. Its board authorized an additional $100 million for repurchases, bringing available capacity to about $280 million. BlackLine, Inc is a leading provider of cloud-based software solutions designed to automate and modernize the finance and accounting function. The company's flagship offering, the BlackLine Finance Controls and Automation Platform, enables organizations to streamline critical processes such as account reconciliations, journal entry management, intercompany accounting, and transaction matching. By delivering a centralized, real-time view of financial data, BlackLine helps companies improve operational efficiency, enhance compliance and strengthen internal controls. Key products and services within the BlackLine platform include Account Reconciliation, Task Management, Transaction Matching, Journal Entry, and Intercompany Hub. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "BlackLine Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

LOS ANGELES, Aug. 04, 2026 (GLOBE NEWSWIRE) -- BlackLine, Inc. (Nasdaq: BL), today announced financial results for the second quarter ended June 30, 2026. “I believe the first half of 2026 will prove to be the most consequential period in BlackLine's history,” said Owen Ryan, CEO of BlackLine. “AI is reshaping the Office of the CFO, and we are meeting that moment. Our platform strategy is maturing and adoption of our Verity agents is accelerating across our base. That usage is now monetizing on two fronts, driving conversion to our platform and starting to generate direct revenue from our Verity agentic offerings.” “The world's most sophisticated enterprises are deepening their commitments to BlackLine,” Ryan continued. “Deal timing was noisy this quarter as customers work through more rigorous, AI-driven evaluations, but the demand behind those opportunities is strong and durable, and we are more confident than ever in the growing momentum across our business.” Second Quarter 2026 Financial Highlights Total GAAP revenues of $187.8 million, an increase of 9.2% compared to the second quarter of 2025. GAAP operating margin of 5.9%, compared to 4.4% in the second quarter of 2025. Non-GAAP operating margin of 23.3%, compared to 22.1% in the second quarter of 2025. GAAP net income attributable to BlackLine of $16.5 million, or $0.27 per diluted share compared to GAAP net income attributable to BlackLine of $8.3 million, or $0.13 per diluted share in the second quarter of 2025. Non-GAAP net income attributable to BlackLine of $42.9 million, or $0.61 per diluted share compared to non-GAAP net income attributable to BlackLine of $37.9 million, or $0.51 per diluted share in the second quarter of 2025. Billings of $193.0 million, an increase of 5.9% compared to the second quarter of 2025. Remaining performance obligation of $1.1 billion, an increase of 16.8% compared to the second quarter of 2025. Operating cash flow of $45.0 million, compared to $32.3 million in the second quarter of 2025. Free cash flow of $36.5 million, compared to $25.4 million in the second quarter of 2025. Repurchased approximately 1.2 million shares of common stock for $37.7 million as part of our share repurchase program under which approximately $179.7 million of buyback capacity remained at June 30, 2026. Second Quarter Key Metrics and Recent Business Highlights BlackLine had a total of 4,260 customers at June 30, 2026. Platform pricing Annual Recurring Revenue (ARR) as a percentage of eligible ARR, which excludes SolEx and public sector ARR, was 17% at June 30, 2026. Achieved a dollar-based net revenue retention rate of 102% at June 30, 2026. Announced a $100 million increase to the Company’s stock buyback program. Verity Prepare, BlackLine’s agentic reconciliations agent, achieved general availability in July. Announced the expansion of BlackLine’s Agentic Financial Operations Platform via the Finance Control Console. Earned industry recognition for AI innovation and customer trust from Tech Ascension Awards and TrustRadius. Hosted BeyondTheBlack Paris, BlackLine’s France and EMEA region customer conference. The financial results included in this press release are preliminary and subject to final review. Financial results will not be final until BlackLine files its Quarterly Report on Form 10-Q for the period. Information about BlackLine’s use of non-GAAP financial measures is provided below under “Use of Non-GAAP Financial Measures.” Financial Outlook Third Quarter 2026 Total GAAP revenue is expected to be in the range of $193 million to $195 million. Non-GAAP operating margin is expected to be in the range of 24.5% to 25.5%. Non-GAAP net income attributable to BlackLine is expected to be in the range of $45 million to $47 million, or $0.62 to $0.65 per share on 74.5 million diluted weighted average shares outstanding. Full Year 2026 Total GAAP revenue is expected to be in the range of $765 million to $769 million. Non-GAAP operating margin is expected to be in the range of 24.1% to 24.6%. Non-GAAP net income attributable to BlackLine is expected to be in the range of $177 million to $182 million, or $2.47 to $2.54 per share on 74.0 million diluted weighted average shares outstanding. Guidance for non-GAAP operating margin, non-GAAP net income attributable to BlackLine, and non-GAAP net income per share attributable to BlackLine excludes specified items from the corresponding GAAP financial measures as outlined below under “Use of Non-GAAP Financial Measures” and as detailed in the reconciliations of non-GAAP measures for historical periods. Reconciliations of non-GAAP operating margin, non-GAAP net income attributable to BlackLine, and non-GAAP net income per share attributable to BlackLine guidance to the most directly comparable U.S. GAAP measures are not available on a forward-looking basis without unreasonable efforts due to the unpredictability and complexity of the charges excluded from these non-GAAP financial measures. The Company expects the variability of the above items could have a significant, and potentially unpredictable, impact on its future GAAP operating margin, net income attributable to BlackLine, and net income per share attributable to BlackLine. Quarterly Conference Call BlackLine will hold a conference call to discuss its second quarter results at 2:00 p.m. Pacific time on Tuesday, August 4, 2026. A live audio webcast will be accessible on BlackLine’s investor relations website at https://investors.blackline.com. Participants can preregister for the conference call. A replay of the webcast will be available at https://investors.blackline.com for 12 months. BlackLine has used, and intends to continue to use, its Investor Relations website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. About BlackLine BlackLine (Nasdaq: BL), is the trust infrastructure for the AI era of finance: a future where finance drives the agentic era with intelligence, integrity, and trust rising together. The BlackLine Agentic Financial Operations Platform™, powered by Studio360 and Verity™ AI, is where the Office of the CFO scales AI across Record-to-Report, Invoice-to-Cash, and the processes where finance owns the controls and demands integrity at every step. By unifying data, embedding AI, and engineering trust into every action, BlackLine moves finance and accounting beyond reporting on the business to orchestrating it in real time. Supported by industry-leading R&D investment and world-class security practices, approximately 4,300 customers across multiple industries partner with BlackLine to lead their organizations into the future. For more information, please visit blackline.com. Forward-looking Statements This release and the conference call referenced above contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “would,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology. Forward-looking statements in this release and quarterly conference call include, but are not limited to, statements regarding BlackLine’s future financial and operational performance, including, without limitation, GAAP and non-GAAP guidance for the third quarter and full year of 2026, the impact of progress against certain key initiatives, our expectations for our business, including the demand environment, BlackLine’s addressable market, market position and pipeline, our international growth, and our relationships with our customers and partners, including opportunities to expand those relationships. Any forward-looking statements contained in this press release or the quarterly conference call are based upon BlackLine’s historical performance and its current plans, estimates and expectations, and are not a representation that such plans, estimates, or expectations will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good-faith beliefs and assumptions as of that time with respect to future events, and are subject to risks and uncertainties. If any of these risks or uncertainties materialize or if any assumptions prove incorrect, actual performance or results may differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks related to the Company’s ability to attract new customers and expand sales to existing customers; the extent to which customers renew their subscription agreements or increase the number of users; the impact of current and future economic uncertainty and other unfavorable conditions in the Company's industry or the global economy; the Company’s ability to manage growth and scale effectively, including entry into new geographies; the Company’s ability to provide successful enhancements, new features and modifications to its software solutions; the Company’s ability to develop new products and software solutions and the success of any new product and service introductions; the Company’s ability to effectively incorporate artificial intelligence and machine learning technologies (AI/ML) into its platform and business and the potential reputational harm or legal liability that may result from the use of AI/ML solutions and features; the success of the Company’s strategic relationships with technology vendors and business process outsourcers, channel partners and alliance partners; a disruption in the Company’s hosting network infrastructure; costs and reputational harm that could result from defects in the Company’s solutions; the loss of any key employees; continued strong demand for the Company’s software in the United States, Europe, Asia Pacific, and Latin America; the Company’s ability to compete as the financial close management provider for organizations; the timing and success of solutions offered by competitors including competitors' ability to incorporate AI/ML into products and offerings more quickly or successfully; changes in the proportion of the Company’s customer base that is comprised of enterprise or mid-sized organizations; the Company’s ability to expand and effectively manage its sales teams and their performance and productivity; fluctuations in our financial results due to long and increasingly variable sales cycles; failure to protect the Company’s intellectual property; the Company’s ability to integrate acquired businesses and technologies successfully or achieve the expected benefits of such transactions; unpredictable and uncertain macro and regional economic conditions; seasonality; changes in current tax or accounting rules; cyber attacks or any breaches of the Company’s security measures and the risk that the Company’s security measures may not be sufficient to secure its customer or confidential data adequately; acts of terrorism or other vandalism, war, or natural disasters including the effects of climate change; the impact of any determination of deficiencies or weaknesses in our internal controls and processes; and other risks and uncertainties described in the other filings we make with the Securities and Exchange Commission from time to time, including the risks described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission on February 26, 2026. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. Forward-looking statements should not be read as a guarantee of future performance or results, and you should not place undue reliance on such statements. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. All of the information in this press release is subject to completion of our quarterly review process. Use of Non-GAAP Financial Measures To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles, or GAAP, BlackLine has provided in this release and the quarterly conference call held on August 4, 2026, certain financial measures that have not been prepared in accordance with GAAP defined as “non-GAAP financial measures,” which include (i) non-GAAP gross profit and non-GAAP gross margin, (ii) non-GAAP operating expenses, (iii) non-GAAP operating income and non-GAAP operating margin, (iv) non-GAAP net income attributable to BlackLine, Inc., (v) diluted non-GAAP net income per share attributable to BlackLine, Inc., and (vi) free cash flow. BlackLine’s management uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to the corresponding GAAP measures, in evaluating BlackLine’s ongoing operational performance and trends and in comparing its financial measures with other companies in the same industry, many of which present similar non-GAAP financial measures to help investors understand the operational performance of their businesses. However, it is important to note that the particular items BlackLine excludes from, or includes in, its non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures has been provided in the tables included as part of this press release. Non-GAAP Gross Profit and Non-GAAP Gross Margin. Non-GAAP gross profit is defined as GAAP revenues less GAAP cost of revenue adjusted for amortization of acquired developed technology, stock-based compensation, and transaction-related costs (including, but not limited to, accounting, legal, and advisory fees related to the transaction, as well as transaction-related retention bonuses). Non-GAAP gross margin is defined as non-GAAP gross profit divided by GAAP revenues. BlackLine believes that presenting non-GAAP gross profit and non-GAAP gross margin is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison of gross profit between periods. Non-GAAP Operating Expenses. Non-GAAP operating expenses include (a) non-GAAP sales and marketing expense, (b) non-GAAP research and development expense, and (c) non-GAAP general and administrative expense. Non-GAAP sales and marketing expense is defined as GAAP sales and marketing expense adjusted for amortization of intangible assets, stock-based compensation, and transaction-related costs. Non-GAAP research and development expense is defined as GAAP research and development expense adjusted for stock-based compensation and transaction-related costs. Non-GAAP general and administrative expense is defined as GAAP general and administrative expense adjusted for amortization of intangible assets, stock-based compensation, change in fair value of contingent consideration, transaction-related costs, restructuring costs, and legal settlement gains or costs. BlackLine believes that presenting each of the non-GAAP operating expenses is useful to investors as it eliminates the impact of certain cash and non-cash expenses and allows a direct comparison of operating expenses between periods. Non-GAAP Income from Operations and Non-GAAP Operating Margin. Non-GAAP income from operations is defined as GAAP income from operations adjusted for amortization of intangible assets, stock-based compensation, change in fair value of contingent consideration, transaction-related costs, restructuring costs, and legal settlement gains or costs. Non-GAAP operating margin is defined as non-GAAP income from operations divided by GAAP revenues. BlackLine believes that presenting non-GAAP income from operations and non-GAAP operating margin is useful to investors as it eliminates the impact of items that have been impacted by the Company’s acquisitions and other related costs in order to allow a direct comparison of income from operations between all periods presented. Non-GAAP Net Income Attributable to BlackLine and Diluted Non-GAAP Net Income Per Share Attributable to BlackLine, Inc. Non-GAAP net income attributable to BlackLine is defined as GAAP net income attributable to BlackLine adjusted for the income tax effects of acquisitions, stock-based compensation shortfalls and windfalls, and the discrete tax impact of other non-GAAP adjustments, amortization of intangible assets, stock-based compensation, amortization of debt issuance costs from our convertible senior notes, change in fair value of contingent consideration, transaction-related costs, restructuring costs, legal settlement gains or costs, adjustment to the redeemable non-controlling interest to the redemption amount, and gain on extinguishment of convertible senior notes. Diluted non-GAAP net income per share attributable to BlackLine, Inc. includes the adjustment for shares resulting from the elimination of stock-based compensation. BlackLine believes that presenting non-GAAP net income attributable to BlackLine is useful to investors as it eliminates the impact of items that have been impacted by the Company’s acquisitions and other related costs to allow a direct comparison of net income between all periods presented. Free Cash Flow. Free cash flow is defined as cash flows provided by operating activities less cash flows used to purchase property and equipment, financed and otherwise, capitalized software development, and intangible assets. BlackLine believes that presenting free cash flow is useful to investors as it provides a measure of the Company’s liquidity used by management to evaluate the amount of cash generated by the Company’s business including the impact of purchases of property and equipment and cost of capitalized software development. Use of Operating Metrics BlackLine has provided in this release and the quarterly conference call held on August 4, 2026 certain operating metrics, including (i) number of customers, (ii) Platform pricing ARR as a percentage of eligible ARR, and (iii) dollar-based net revenue retention rate, which BlackLine uses to evaluate its business, measure its performance, identify trends affecting its business, formulate financial projections and make strategic decisions. Number of Customers. A customer is defined as a company that contributes to our subscription and support revenue as of the measurement date. In situations where an organization has multiple subsidiaries or divisions, each entity that is invoiced as a separate entity is treated as a separate customer. In an instance where an existing customer requests its invoice be divided for the sole purpose of restructuring its internal billing arrangement without any incremental increase in revenue, such customer continues to be treated as a single customer. BlackLine believes that its ability to expand its customer base is an indicator of the Company’s market penetration and the growth of its business. Platform Pricing ARR as a Percentage of Eligible ARR. Platform pricing ARR as a percentage of eligible ARR is calculated as platform annual recurring revenue divided by our eligible annual recurring revenue. We define eligible ARR as total annual recurring revenue, excluding revenue from SAP solutions-extensions (“SolEx”) and the public sector. Dollar-based Net Revenue Retention Rate. Dollar-based net revenue retention rate is calculated as the implied monthly subscription and support revenue at the end of a period for the base set of customers from which the Company generated subscription revenue in the year prior to the calculation, divided by the implied monthly subscription and support revenue one year prior to the date of calculation for that same customer base. This calculation does not reflect implied monthly subscription and support revenue for new customers added during the one-year period but does include the effect of customers who terminated during the period. Implied monthly subscription and support revenue is defined as the total amount of minimum subscription and support revenue contractually committed to, under each of BlackLine’s customer agreements over the entire term of the agreement, divided by the number of months in the term of the agreement. BlackLine believes that dollar-based net revenue retention rate is an important metric to measure the long-term value of customer agreements and the Company’s ability to retain and grow its relationships with existing customers over time. Investor Contact:Matt Humphries, [email protected]