bl-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________________________

FORM 10-Q

______________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37924

______________________________________________________________

BlackLine, Inc.

(Exact name of Registrant as specified in its charter)

______________________________________________________________


Delaware			46-3354276
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

21300 Victory Boulevard, 12th Floor

Woodland Hills, CA 91367

(Address of principal executive offices, including zip code)

(818) 223-9008

(Registrant’s telephone number, including area code)

______________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	BL	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding at April 30, 2021 was 58,046,413.

BlackLine, Inc.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended March 31, 2021

TABLE OF CONTENTS


	Part I. Financial Information

Item 1.	Unaudited Condensed Consolidated Financial Statements	4

	Unaudited Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020	4

	Unaudited Condensed Consolidated Statements of Operations for the Quarters Ended March 31, 2021 and 2020	5

	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Quarters Ended March 31, 2021 and 2020	6

	Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Quarters Ended March 31, 2021 and 2020	7

	Unaudited Condensed Consolidated Statements of Cash Flows for the Quarters Ended March 31, 2021 and 2020	8

	Notes to Unaudited Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	32

Part II. Other Information

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59

Item 6.	Exhibits	59

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risk and uncertainties. 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. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, statements regarding future financial and operational performance; statements concerning growth strategies including acquisitions, extension of distribution channels and strategic relationships, product innovation, international expansion, customer growth and expansion, customer service initiatives, expectations regarding our acquisitions, expectations regarding contract size and increased focus on strategic products, expectations for hiring new talent and expanding our sales organization; our ability to accurately forecast revenue and appropriately plan expenses and investments; the demand for and benefits from the use of our current and future solutions; market acceptance of our solutions; the impact of the COVID-19 pandemic and the related responses by governments and private industry on our business and financial condition, as well as that of our customers and partners; changes in the competitive environment in our industry and the markets in which we operate and our liquidity and capital resources. These statements are based upon our historical performance and our 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 uncertainty. 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. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainty, and assumptions that are difficult to predict, including those identified below, under “Part II-Other Information, Item 1A. Risk Factors” and elsewhere herein. 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. Furthermore, we undertake no obligation to revise or update any forward-looking statements for any reason, except as required by applicable law.

Unless the context otherwise requires, the terms “BlackLine, Inc.,” “the Company,” “we,” “us” and “our” in this Quarterly Report on Form 10-Q refer to the consolidated operations of BlackLine, Inc. and its consolidated subsidiaries as a whole.

Part 1 – Financial Information

Item 1. Financial Statements

BLACKLINE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)


	March 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	848,268	$	367,413
Marketable securities	308,991		175,206
Accounts receivable, net of allowances for credit losses of $3,280 and $3,737 at March 31, 2021 and December 31, 2020, respectively	89,423		111,270
Prepaid expenses and other current assets	20,809		20,226
Total current assets	1,267,491		674,115
Capitalized software development costs, net	17,858		15,690
Property and equipment, net	12,512		13,239
Intangible assets, net	43,781		46,674
Goodwill	289,710		289,710
Operating lease right-of-use assets	8,634		8,708
Other assets	68,811		65,369
Total assets	$	1,708,797	$	1,113,505
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	3,365	$	3,150
Accrued expenses and other current liabilities	33,420		35,958
Deferred revenue	193,429		191,137
Short-term portion of operating lease liabilities	4,136		4,147
Short-term portion of contingent consideration	13,888		7,938
Total current liabilities	248,238		242,330
Operating lease liabilities, noncurrent	7,215		7,356
Convertible senior notes, net	1,066,352		407,032
Contingent consideration	17,304		15,552
Deferred tax liabilities, net	11,785		6,566
Deferred revenue, noncurrent	116		75
Total liabilities	1,351,010		678,911
Commitments and contingencies (Note 7)
Redeemable non-controlling interest (Note 3)	18,159		12,524
Stockholders' equity:
Common stock	580		577
Additional paid-in capital	573,431		622,768
Accumulated other comprehensive income	295		376
Accumulated deficit	(234,678)		(201,651)
Total stockholders' equity	339,628		422,070
Total liabilities, redeemable non-controlling interest, and stockholders' equity	$	1,708,797	$	1,113,505

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BLACKLINE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)


	Quarter Ended March 31,
	2021		2020
Revenues
Subscription and support	$	91,655	$	77,035
Professional services	7,201		5,563
Total revenues	98,856		82,598
Cost of revenues
Subscription and support	15,425		11,380
Professional services	6,465		4,685
Total cost of revenues	21,890		16,065
Gross profit	76,966		66,533
Operating expenses
Sales and marketing	48,429		44,785
Research and development	18,973		11,747
General and administrative	28,269		17,338
Total operating expenses	95,671		73,870
Loss from operations	(18,705)		(7,337)
Other income (expense)
Interest income	94		2,409
Interest expense	(14,804)		(5,685)
Other expense, net	(14,710)		(3,276)
Loss before income taxes	(33,415)		(10,613)
Provision for (benefit from) income taxes	(191)		357
Net loss	(33,224)		(10,970)
Net loss attributable to non-controlling interest	(197)		(328)
Adjustment attributable to non-controlling interest	5,937		2,201
Net loss attributable to BlackLine, Inc.	$	(38,964)	$	(12,843)
Basic net loss per share attributable to BlackLine, Inc.	$	(0.67)	$	(0.23)
Shares used to calculate basic net loss per share	57,860		56,174
Diluted net loss per share attributable to BlackLine, Inc.	$	(0.67)	$	(0.23)
Shares used to calculate diluted net loss per share	57,860		56,174

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BLACKLINE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

(in thousands)


	Quarter Ended March 31,
	2021		2020
Net loss	$	(33,224)	$	(10,970)
Other comprehensive income (loss):
Net change in unrealized gains (losses) on marketable securities, net of tax of $0 for the quarters ended March 31, 2021 and 2020	24		(311)
Foreign currency translation	(210)		—
Other comprehensive loss	(186)		(311)
Comprehensive loss	(33,410)		(11,281)
Less comprehensive loss attributable to redeemable non-controlling interest:
Net loss attributable to redeemable non-controlling interest	(197)		(328)
Foreign currency translation attributable to redeemable non-controlling interest	(105)		—
Comprehensive loss attributable to redeemable non-controlling interest	(302)		(328)
Comprehensive loss attributable to BlackLine, Inc.	$	(33,108)	$	(10,953)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BLACKLINE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(in thousands)

Quarter Ended March 31, 2021

Common Stock

Additional
Paid-in

Accumulated
Other
Comprehensive

Accumulated

SEC Form 10-Q filed by BlackLine, Inc.