GlobeNewswire Inc | Feb 11, 2021 04:05PM EST

February 11, 2021

LOS ANGELES, Calif., Feb. 11, 2021 (GLOBE NEWSWIRE) -- BlackLine, Inc. (Nasdaq: BL), today announced financial results for the fourth quarter and full-year ended December 31, 2020.

Marc Huffman, CEO, commented, I am incredibly proud of what BlackLine has been able to accomplish in 2020 as we continued to drive growth, scale the business, and expand our strong leadership position. In these difficult times we remain true to our founding principles to serve our customers which has strengthened our relationships and driven expansion of existing accounts. Our initiatives to support our customers, invest in key areas, and bring our expertise to market drove another quarter of strong results. The value we bring to market is resonating now more than ever with CFOs and Controllers who are looking to modernize their accounting processes and we believe our commitment to customer success will continue to serve as a differentiator for BlackLine.

Fourth Quarter 2020 Financial Highlights

-- Total GAAP revenues of $95.7 million for the fourth quarter of 2020, an increase of 19% compared to the fourth quarter of 2019. -- GAAP net loss attributable to BlackLine of $17.0 million, or $0.30 per share, on 57.5 million weighted average shares outstanding, which compares to a GAAP net loss attributable to BlackLine of $9.2 million in the fourth quarter of 2019. -- Non-GAAP net income attributable to BlackLine of $13.1 million, or $0.21 per share, on 62.0 million diluted weighted average shares outstanding. This compares with non-GAAP net income attributable to BlackLine of $8.0 million in the fourth quarter of 2019.

Full Year 2020 Financial Highlights

-- Total GAAP revenues of $351.7 million, an increase of 22% compared to 2019. -- GAAP net loss attributable to BlackLine of $46.9 million, or $0.83 per share, on 56.8 million weighted average shares outstanding. -- Non-GAAP net income attributable to BlackLine of $46.1 million, or $0.76 per share, on 60.8 million diluted weighted average shares outstanding. -- Operating cash flow of $54.7 million, compared to $29.7 million in 2019. -- Free cash flow of $34.7 million, compared to $19.6 million in 2019.

Fourth Quarter Key Metrics and Recent Business Highlights

-- Added 207 net new customers in the fourth quarter for a total of 3,433 customers at December 31, 2020. -- Expanded the companys user base to 291,873 at December 31, 2020. -- Achieved a dollar-based net revenue retention rate of 106% at December 31, 2020. -- Acquired Rimilia to add AI-powered accounts receivable automation and increase total addressable market. -- Unveiled new order-to-cash and account analysis products and enhanced platform functionality at annual user conference. -- Awarded first place across all financial close categories (Customer Support, Usability and Feature Set) in the Best of Finance Software 2021 Awards by TrustRadius. -- Recognized by The Stevie International Business Awards for Most Valuable Corporate Response and Most Valuable Technical Innovation for BlackLines response throughout the pandemic. -- Recognized by the CEO World Awards in the category of Company Work-From-Home Implementation of the Year. -- Announced that Therese Tucker was named a Top Woman Leader in SaaS by The Software Report. -- Promoted Mark Woodhams to chief revenue officer.

The financial results included in this press release are preliminary and pending final review. Financial results will not be final until BlackLine files its Annual Report on Form 10-K for the period. Information about BlackLines use of non-GAAP financial measures is provided below under Use of Non-GAAP Financial Measures.

Financial Outlook

First Quarter 2021

-- Total GAAP revenue is expected to be in the range of $95.5 million to $96.5 million. -- Non-GAAP net income attributable to BlackLine is expected to be in the range of $2.5 million to $3.5 million, or $0.04 to $0.06 per share on 62.3 million diluted weighted average shares outstanding.

Full Year 2021

-- Total GAAP revenue is expected to be in the range of $410 million to $415 million. -- Non-GAAP net income attributable to BlackLine is expected to be in the range of $24 million to $26 million, or $0.38 to $0.41 per share on 62.7 million diluted weighted average shares outstanding.

Guidance for non-GAAP net income attributable to BlackLine and non-GAAP net income attributable to BlackLine per share does not include the impact of the provision for (benefit from) income taxes related to acquisitions, amortization of acquired intangible assets, stock-based compensation, the amortization of debt discount and issuance costs, the change in fair value of contingent consideration, acquisition-related costs, legal settlement gains, and the adjustment to the value of the redeemable non-controlling interest to the redemption amount. Reconciliations of non-GAAP net income attributable to BlackLine and non-GAAP net income attributable to BlackLine per share guidance to the most directly comparable U.S. GAAP measures, or net income (loss) attributable to BlackLine and net income (loss) attributable to BlackLine per share, are not available on a forward-looking basis without unreasonable efforts due to the unpredictability and complexity of the charges excluded from non-GAAP net income attributable to BlackLine and non-GAAP net income attributable to BlackLine per share. The company expects the variability of the above changes could have a significant, and potentially unpredictable, impact on its future GAAP net income (loss) attributable to BlackLine and net income (loss) attributable to BlackLine per share.

Quarterly Conference Call

BlackLine, Inc. will hold a conference call to discuss its fourth quarter results at 2:00 p.m. Pacific time on Thursday, February 11, 2021. A live audio webcast will be accessible on BlackLines investor relations website at https://investors.blackline.com. The call can also be accessed domestically at (844) 229-7595 and internationally at (314) 888-4260, passcode 6391051. A telephonic replay will be available through Thursday, February 18, 2021 at (855) 859-2056 or (404) 537-3406, passcode 6391051. 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

Companies come to BlackLine, Inc. (Nasdaq: BL) because their traditional manual accounting processes are not sustainable. BlackLines cloud-based solutions and market-leading customer service help companies move to modern accounting by unifying their data and processes, automating repetitive work, and driving accountability through visibility. BlackLine provides solutions to manage and automate financial close, accounts receivable and intercompany accounting processes, helping large enterprises and midsize companies across all industries do accounting work better, faster and with more control.

More than 3,400 customers trust BlackLine to help them close faster with complete and accurate results. The company is the pioneer of the financial close market and recognized as the leader by customers at leading end-user review sites including Gartner Peer Insights, G2 and TrustRadius. Based in Los Angeles, BlackLine also has regional headquarters in London, Singapore, and Sydney. 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 BlackLines future financial and operational performance, including, without limitation, GAAP and non-GAAP guidance for the first quarter and full year of 2021, our expectations for our business, including the demand environment, BlackLines addressable market, market position and pipeline, the impact of the COVID-19 pandemic on our business, our market and our industry, and our expectations regarding our acquisition of Rimilia, including the market opportunity and Rimilias contribution to our business and financial results.

Any forward-looking statements contained in this press release or the quarterly conference call are based upon BlackLines 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 managements 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 companys 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 companys ability to manage growth and scale effectively, including additional headcount and entry into new geographies; the companys ability to provide successful enhancements, new features and modifications to its software solutions; the companys ability to develop new products and software solutions and the success of any new product and service introductions; the success of the companys strategic relationships with technology vendors and business process outsourcers, channel partners and alliance partners; any breaches of the companys security measures; a disruption in the companys hosting network infrastructure; costs and reputational harm that could result from defects in the companys solution; the loss of any key employees; the impact of the COVID-19 pandemic and related measures taken by governments and private industry; continued strong demand for the companys software in the United States, Europe, Asia Pacific and Latin America; the companys ability to compete as the financial close management provider for organizations of all sizes; the timing and success of solutions offered by competitors; changes in the proportion of the companys customer base that is comprised of enterprise or mid-sized organizations; the companys ability to expand its enterprise and mid-market sales teams and effectively manage its sales forces and their performance and productivity; fluctuations in our financial results due to long and increasingly variable sales cycles, failure to protect the companys intellectual property; the companys 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 and the risk that the companys security measures may not be sufficient to secure its customer or confidential data adequately; acts of terrorism or other vandalism, war or natural disasters; 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed with the Securities and Exchange Commission on November 9, 2020. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2020. 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 February 11, 2021 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 income (loss) from operations, (iv) non-GAAP net income (loss) and non-GAAP net income (loss) per share, (v) and free cash flow.

BlackLines 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 BlackLines 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 revenues adjusted for the amortization of acquired developed technology and stock-based compensation. Non-GAAP gross margin is defined as non-GAAP gross profit divided by GAAP revenues. BlackLine believes that presenting 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 margin 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 the amortization of acquired intangibles and stock-based compensation. Non-GAAP research and development expense is defined as GAAP research and development expense adjusted for stock-based compensation. Non-GAAP general and administrative expense is defined as GAAP general and administrative expense as adjusted for the amortization of acquired intangibles, stock-based compensation, the change in fair value of contingent consideration, acquisition-related costs, and legal settlement gains. 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 (Loss) from Operations. Non-GAAP income (loss) from operations is defined as GAAP income (loss) from operations adjusted for the amortization of intangible assets, stock-based compensation, the change in fair value of contingent consideration, acquisition-related costs, and legal settlement gains. The company believes that presenting non-GAAP income (loss) from operations is useful to investors as it eliminates the impact of items that have been impacted by the companys acquisitions and other related costs in order to allow a direct comparison of loss from operations between all periods presented.

Non-GAAP Net Income (Loss) attributable to BlackLine. Non-GAAP net income (loss) is defined as GAAP net income (loss) adjusted for the impact of the provision for (benefit from) income taxes related to acquisitions, amortization of intangible assets, stock-based compensation, the amortization of debt discount and issuance costs from our convertibles notes, the change in the fair value of contingent consideration, acquisition-related costs, legal settlement gains, and the adjustment to the value of the redeemable non-controlling interest to the redemption amount. Non-GAAP diluted net income (loss) per common share includes the adjustment for shares resulting from the elimination of stock-based compensation. The company believes that presenting non-GAAP net income (loss) is useful to investors as it eliminates the impact of items that have been impacted by the companys acquisitions and other related costs in order to allow a direct comparison of net loss 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, capitalized software development, and intangible assets. BlackLine believes that presenting free cash flow is useful to investors as it provides a measure of the companys liquidity used by management to evaluate the amount of cash generated by the companys 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 February 11, 2021 certain operating metrics, including (i) number of customers, (ii) number of users 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. These operating metrics exclude the impact of Runbook licensed customers and users as these customers did not have an active subscription agreement with BlackLine as of December 31, 2020.

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 BlackLines 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 companys ability to retain and grow its relationships with existing customers over time.

Number of Customers. A customer is defined as an entity with an active subscription agreement 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 companys market penetration and the growth of its business.

Number of Users. Historically, BlackLines products were priced based on the number of users of its platform. Over time, the company has begun to sell an increasing number of non-user based products with fixed or transaction-based pricing. For this reason, we believe the growth in the number of total users is less correlated to the growth of the business overall.

Media Contact:BlackLineKimberly UbertiKimberly.uberti@blackline.com

Investor Relations Contact:BlackLineAlexandra GellerAlex.geller@blackline.com

BlackLine, Inc. Consolidated Balance Sheets (in thousands) (unaudited) December 31, December 31, 2020 2019ASSETS Cash and cash equivalents $ 367,413 $ 120,232 Marketable securities 175,206 487,515 Accounts receivable, net of allowance 111,270 102,829 Prepaid expenses and other current assets 20,226 12,830 Total current assets 674,115 723,406 Capitalized software development costs, 15,690 10,032 netProperty and equipment, net 13,239 13,024 Intangible assets, net 46,674 17,520 Goodwill 289,710 185,138 Operating lease right-of-use assets 8,708 12,549 Other assets 65,369 52,883 Total assets $ 1,113,505 $ 1,014,552 LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITYAccounts payable $ 3,150 $ 7,401 Accrued expenses and other current 35,958 30,098 liabilitiesDeferred revenue 191,137 162,552 Short-term portion of operating lease 4,147 4,938 liabilitiesShort-term portion of contingent 7,938 2,008 considerationTotal current liabilities 242,330 206,997 Operating lease liabilities 7,356 10,606 Convertible senior notes, net 407,032 384,343 Contingent consideration 15,552 4,354 Deferred tax liabilities 6,566 4,571 Deferred revenue, noncurrent 75 163 Total liabilities 678,911 611,034 Redeemable non-controlling interest (a) 12,524 4,905 Stockholders' equity: Common stock 577 559 Additional paid-in capital 622,768 561,275 Accumulated other comprehensive income 376 377 Accumulated deficit (201,651) (163,598) Total stockholders' equity 422,070 398,613 Total liabilities, redeemable non-controlling $ 1,113,505 $ 1,014,552 interest, and stockholders' equity (a) During the third quarter of 2020, the Company identified prior-perioderrors in the calculation of its adjustment to redeemable non-controllinginterest of $0.9 million at December 31, 2019. The Company corrected the cumulative prior-period error at September 30, 2020, which reduced thecarrying value of the redeemable non-controlling interest.

BlackLine, Inc.Consolidated Statements of Operations(in thousands, except per share data)(unaudited) Quarter Ended Year Ended December 31, December 31, 2020 2019 2020 2019 Revenues Subscription $ 89,782 $ 74,796 $ 328,559 $ 272,447 and supportProfessional 5,928 5,462 23,178 16,529 servicesTotal revenues 95,710 80,258 351,737 288,976 Cost of revenuesSubscription 13,211 10,859 47,919 44,968 and supportProfessional 5,971 4,262 21,053 14,007 servicesTotal cost of 19,182 15,121 68,972 58,975 revenuesGross profit 76,528 65,137 282,765 230,001 Operating expensesSales and 45,382 43,949 174,581 158,837 marketingResearch and 18,041 10,312 56,464 43,006 developmentGeneral and 20,297 15,613 71,611 56,057 administrativeTotal operating 83,720 69,874 302,656 257,900 expensesLoss from (7,192 ) (4,737 ) (19,891 ) (27,899 )operationsOther income (expense)Interest income 360 2,538 4,502 6,128 Interest (5,971 ) (5,644 ) (23,311 ) (8,650 )expenseOther expense, (5,611 ) (3,106 ) (18,809 ) (2,522 )netLoss before (12,803 ) (7,843 ) (38,700 ) (30,421 )income taxesProvision for(benefit from) (169 ) 869 702 1,725 income taxesNet loss (12,634 ) (8,712 ) (39,402 ) (32,146 )Net lossattributable to (268 ) (466 ) (1,349 ) (1,444 )non-controllinginterestAdjustmentattributable to 4,619 940 8,858 1,833 non-controllinginterest (a)Net lossattributable to $ (16,985 ) $ (9,186 ) $ (46,911 ) $ (32,535 )BlackLine, Inc.(a) Basic net lossattributable to BlackLine, Inc.per share:Basic net lossattributable to $ (0.30 ) $ (0.16 ) $ (0.83 ) $ (0.59 )BlackLine, Inc.per share (a)Shares used tocalculate basic 57,468 55,781 56,832 55,320 net loss pershareDiluted netlossattributable to BlackLine, Inc.per share:Diluted netlossattributable to $ (0.30 ) $ (0.16 ) $ (0.83 ) $ (0.59 )BlackLine, Inc.per share (a)Shares used tocalculate 57,468 55,781 56,832 55,320 diluted netloss per share (a) During the third quarter of 2020, the Company identified that, commencingin 2019, it had incorrectly calculated its quarterly adjustment to the carryingvalue of its redeemable non-controlling interest with a corresponding impact tonet loss attributable to BlackLine, Inc., adjustment attributable tonon-controlling interest, and basic and diluted net loss per share attributableto BlackLine, Inc. Such errors resulted in the $0.5 million ($0.01 per dilutedshare) and $0.9 million ($0.02 per diluted share) overstatement of net lossattributable to BlackLine, Inc. for the quarter and year ended December 31,2019, respectively. The Company corrected the cumulative impact of suchprior-period errors as an out-of-period adjustment in the quarter endedSeptember 30, 2020.

BlackLine, Inc. Consolidated Statements of Cash Flows (in thousands) (unaudited) Quarter Ended Year Ended December 31, December 31, 2020 2019 2020 2019 CASH FLOWS FROMOPERATING ACTIVITIES:Net lossattributable to $ (16,985 ) $ (9,186 ) $ (46,911 ) $ (32,535 ) BlackLine, Inc.Net loss andadjustmentattributable to 4,351 474 7,509 389 redeemablenon-controllinginterestNet loss (12,634 ) (8,712 ) (39,402 ) (32,146 ) Adjustments toreconcile netloss to net cash provided byoperatingactivities:Depreciation and 6,277 4,471 20,892 21,274 amortizationChange in fairvalue of 176 (267 ) 28 46 contingentconsiderationAmortization ofdebt discount and 5,815 5,487 22,689 8,410 issuance costsStock-based 14,292 9,447 49,690 34,052 compensationNoncash lease 1,096 1,336 4,653 5,013 expense(Accretion)amortization ofpurchasediscounts/ 176 (1,288 ) (157 ) (2,161 ) premiums onmarketablesecurities, netNet foreigncurrency (gains) 52 (73 ) (223 ) 65 lossesDeferred income (560 ) 577 (381 ) 1,314 taxesProvision for(benefit from) (41 ) ? 332 157 doubtful accountsreceivableChanges inoperating assets and liabilitiesAccounts (17,290 ) (20,507 ) (5,733 ) (27,962 ) receivablePrepaid expensesand other current (2,168 ) (1,905 ) (5,311 ) 1,224 assetsOther assets (6,760 ) (6,782 ) (12,444 ) (16,429 ) Accounts payable 210 4,835 (4,359 ) 3,244 Accrued expensesand other current 4,107 4,745 3,075 5,789 liabilitiesDeferred revenue 23,341 18,393 26,397 33,364 Operating lease (1,277 ) (1,533 ) (5,011 ) (5,530 ) liabilitiesNet cash providedby operating 14,812 8,224 54,735 29,724 activities CASH FLOWS FROMINVESTING ACTIVITIES:Purchases ofmarketable (149,969 ) (472,416 ) (266,369 ) (565,675 ) securitiesProceeds frommaturities of 64,709 54,500 525,691 149,638 marketablesecuritiesProceeds fromsales of 27,074 ? 53,033 17,279 marketablesecuritiesCapitalizedsoftware (2,740 ) (1,309 ) (10,578 ) (5,060 ) development costsPurchases ofproperty and (3,998 ) (1,171 ) (6,513 ) (4,632 ) equipmentPurchases of ? ? (2,333 ) ? intangible assetsAcquisition, net ? ? (119,337 ) ? of cash acquiredCash acquired 2,096 ? ? ? from acquisitionNet cash providedby (used in) (62,828 ) (420,396 ) 173,594 (408,450 ) investingactivities CASH FLOWS FROMFINANCING ACTIVITIES:Proceeds fromissuance ofconvertible ? ? ? 487,163 senior notes, netof issuance costsPurchase ofcapped callsrelated to ? ? ? (46,150 ) convertiblesenior notesProceeds fromemployee stock 3,364 2,743 6,972 5,295 purchase planProceeds fromexercises of 6,351 2,200 20,638 10,571 stock optionsAcquisition ofcommon stock for (2,058 ) (568 ) (8,186 ) (3,940 ) tax withholdingobligationsFinancedpurchases of (168 ) (113 ) (562 ) (427 ) property andequipmentNet cash providedby financing 7,489 4,262 18,862 452,512 activities Effect of foreignexchange ratechanges on cash, 90 (47 ) 220 261 cash equivalents,and restrictedcashNet increase(decrease) incash, cash (40,437 ) (407,957 ) 247,411 74,047 equivalents, andrestricted cashCash, cashequivalents, andrestricted cash, 408,350 528,459 120,502 46,455 beginning ofperiodCash, cashequivalents, and $ 367,913 $ 120,502 $ 367,913 $ 120,502 restricted cash,end of period Cash and cashequivalents at $ 367,413 $ 120,232 $ 367,413 $ 120,232 end of periodRestricted cashincluded withinprepaid expenses 227 20 227 20 and other currentassets at end ofperiodRestricted cashincluded within 273 250 273 250 other assets atend of periodTotal cash, cashequivalents, andrestricted cashat end of period $ 367,913 $ 120,502 $ 367,913 $ 120,502 shown in theconsolidatedstatements ofcash flows

BlackLine, Inc.Reconciliations of Non-GAAP Financial Measures(in thousands, except percentages and per share data)(unaudited) Quarter Ended Year Ended December 31, December 31, 2020 2019 2020 2019 Non-GAAP Gross Profit Gross profit $ 76,528 $ 65,137 $ 282,765 $ 230,001 Amortization of acquired 665 175 1,192 4,797 developed technologyStock-based compensation 1,996 1,336 6,896 4,814 Total Non-GAAP Gross Profit $ 79,189 $ 66,648 $ 290,853 $ 239,612 Gross margin 80.0 % 81.2 % 80.4 % 79.6 %Non-GAAP gross margin 82.7 % 83.0 % 82.7 % 82.9 % Non-GAAP Operating Income: Loss from operations $ (7,192 ) $ (4,737 ) $ (19,891 ) $ (27,899 )Amortization of intangible 2,892 1,543 7,679 10,265 assetsStock-based compensation 14,292 9,447 49,690 34,052 Change in fair value of 176 (267 ) 28 46 contingent considerationAcquisition-related costs 2,946 ? 4,736 ? Legal settlement gains ? ? ? (380 )Shelf offering costs ? ? ? 212 Total non-GAAP operating $ 13,114 $ 5,986 $ 42,242 $ 16,296 income Non-GAAP Net IncomeAttributable to BlackLine, Inc.Net loss attributable to $ (16,985 ) $ (9,186 ) $ (46,911 ) $ (32,535 )BlackLine, Inc. (a)Provision for (benefit (616 ) 55 (669 ) 90 from) income taxesAmortization of intangible 2,892 1,543 7,679 10,265 assetsStock-based compensation 14,292 9,447 49,690 34,052 Amortization of debt 5,815 5,487 22,689 8,410 discount and issuance costsChange in fair value of 176 (267 ) 28 46 contingent considerationAcquisition-related costs 2,946 ? 4,736 ? Legal settlement gains ? ? ? (380 )Shelf offering costs ? ? ? 212 Adjustment to redeemablenon-controlling interest 4,619 940 8,858 1,833 (a)Total non-GAAP net incomeattributable to BlackLine, $ 13,139 $ 8,019 $ 46,100 $ 21,993 Inc.Basic non-GAAP net income attributable to BlackLine, Inc. per share:Basic non-GAAP net incomeattributable to BlackLine, $ 0.23 $ 0.14 $ 0.81 $ 0.40 Inc. per shareShares used to calculatebasic non-GAAP net income 57,468 55,781 56,832 55,320 per shareDiluted non-GAAP net income attributable to BlackLine, Inc. per share:Diluted non-GAAP net incomeattributable to BlackLine, $ 0.21 $ 0.14 $ 0.76 $ 0.37 Inc. per shareShares used to calculatediluted non-GAAP net income 62,023 59,153 60,841 58,739 per share Quarter Ended Year Ended December 31, December 31, 2020 2019 2020 2019 Non-GAAP Sales and Marketing Expense:Sales and marketing expense $ 45,382 $ 43,949 $ 174,581 $ 158,837 Amortization of intangible (1,750 ) (968 ) (4,655 ) (3,872 )assetsStock-based compensation (5,901 ) (4,315 ) (21,546 ) (15,389 )Total non-GAAP sales and $ 37,731 $ 38,666 $ 148,380 $ 139,576 marketing expense Non-GAAP Research and Development Expense:Research and development $ 18,041 $ 10,312 $ 56,464 $ 43,006 expenseStock-based compensation (2,480 ) (1,098 ) (7,398 ) (4,729 )Total non-GAAP research and $ 15,561 $ 9,214 $ 49,066 $ 38,277 development expense Non-GAAP General and Administrative Expense:General and administrative $ 20,297 $ 15,613 $ 71,611 $ 56,057 expenseAmortization of intangible (477 ) (400 ) (1,832 ) (1,596 )assetsStock-based compensation (3,915 ) (2,698 ) (13,850 ) (9,120 )Change in fair value of (176 ) 267 (28 ) (46 )contingent considerationAcquisition-related costs (2,946 ) ? (4,736 ) ? Legal settlement gains ? ? ? 380 Shelf offering costs ? ? ? (212 )Total non-GAAP general and $ 12,783 $ 12,782 $ 51,165 $ 45,463 administrative expense Total Non-GAAP Operating $ 66,075 $ 60,662 $ 248,611 $ 223,316 Expenses Free Cash Flow Net cash provided by $ 14,812 $ 8,224 $ 54,735 $ 29,724 operating activitiesCapitalized software (2,740 ) (1,309 ) (10,578 ) (5,060 )development costsPurchases of property and (3,998 ) (1,171 ) (6,513 ) (4,632 )equipmentFinanced purchases of (168 ) (113 ) (562 ) (427 )property and equipmentPurchases of intangible ? ? (2,333 ) ? assetsFree cash flow $ 7,906 $ 5,631 $ 34,749 $ 19,605 (a) During the third quarter of 2020, the Company identified that commencing in2019 it had incorrectly calculated its quarterly adjustment to the carryingvalue of its redeemable non-controlling interest with a corresponding impact tonet loss attributable to BlackLine, Inc., adjustment attributable tonon-controlling interest, and basic and diluted net loss per share attributableto BlackLine, Inc. Such errors resulted in the $0.5 million ($0.01 per dilutedshare) and $0.9 million ($0.02 per diluted share) overstatement of net lossattributable to BlackLine, Inc. for the quarter and year ended December 31,2019, respectively. The Company corrected the cumulative impact of suchprior-period errors as an out-of-period adjustment in the quarter endedSeptember 30, 2020.