BLACKLINE, INC.

Note 1 –The Company

BlackLine, Inc. and its subsidiaries (the “Company” or “BlackLine”) offer a future-ready platform that drives digital finance transformation by empowering organizations with accurate, efficient, and intelligent financial operations. Built on the Studio360 platform, BlackLine unifies data, streamlines processes, and delivers real-time insights through automation and intelligence powered by Verity - a comprehensive suite of embedded, auditable AI capabilities that provides finance and accounting teams with a new digital workforce.

The Company is a holding company and conducts its operations through its wholly-owned subsidiary, BlackLine Systems, Inc. (“BlackLine Systems”).

The Company is headquartered in Woodland Hills, California, with additional offices in North America, Europe, and the Asia-Pacific region.

Note 2 –Basis of Presentation, Significant Accounting Policies, and Recently-Issued Accounting Pronouncements

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the Securities and Exchange Commission (“SEC”) on February 26, 2026. The unaudited condensed consolidated financial statements are unaudited and have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the unaudited condensed consolidated financial statements. The unaudited condensed consolidated balance sheet at December 31, 2025 was derived from audited financial statements, but does not include all disclosures required by GAAP. The operating results for the quarter ended March 31, 2026 are not necessarily indicative of the results expected for the full year ending December 31, 2026.

Use of estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.

On an ongoing basis, management evaluates its estimates, primarily those related to determining the stand-alone selling price for separate deliverables in the Company’s subscription revenue arrangements, allowance for doubtful accounts, cancellations and credits, fair value of assets and liabilities assumed in a business combination, recoverability of goodwill and long-lived assets, useful lives associated with long-lived assets and right-of-use assets, income taxes, contingencies, fair value of the 1.00% Convertible Senior Notes due in 2029 (the “2029 Notes” or “convertible senior notes”), redemption value of redeemable non-controlling interest, and the valuation and assumptions underlying stock-based compensation. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances. Actual results could differ from those estimates.

The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company at March 31, 2026 and through the date of this report. The accounting matters assessed included, but were not limited to, the allowance for credit losses, and the carrying value of goodwill and other long-lived assets. While there was not a material impact to the Company’s unaudited condensed consolidated financial statements for the quarter ended March 31, 2026, the Company’s future assessment of these accounting matters and other factors could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

Significant accounting policies

The Company’s significant accounting policies are detailed in “Note 2 - Basis of Presentation, Significant Accounting Policies, and Recently-Issued Accounting Pronouncements” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to the Company’s significant accounting policies during the quarter ended March 31, 2026.

Recently-adopted accounting pronouncements

In July 2025, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets(“ASU 2025-05”), which provides a practical expedient to measure credit losses on current accounts receivable and current contract assets under Accounting Standards Codification 606, Revenue from Contracts with Customers. The practical expedient assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. For public business entities, ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted ASU 2025-05 regarding the practical expedient for expected credit loss and the adoption did not have a material impact on the Company’s condensed consolidated financial statements.

Recently-issued accounting pronouncements not yet adopted

In September 2025, the FASB issued ASU No. 2025-06, Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software(“ASU 2025-06”). ASU 2025-06 removes all references to prescriptive and sequential software development stages. ASU 2025-06 requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. For public business entities, ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements and related disclosures. The Company does not intend to early adopt.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses(“ASU 2024-03”), and in January 2025, the FASB issued Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date("ASU 2025-01"). ASU 2024-03 requires public companies to disclose, in interim and reporting periods, additional information about certain expenses in the financial statements. For public business entities, ASU 2024-03, as clarified by ASU 2025-01, is effective for the first annual reporting period beginning after December 15, 2026, and interim reporting periods within those annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. The Company is currently evaluating the impact that the standard will have on the disclosures within its consolidated financial statements. The Company does not intend to early adopt.

Note 3 –Segment Information

Management has concluded that the Company hasone operating and reportable segment. The Company provides subscription and support services that consist of a cloud-based platform that drives digital finance transformation and also provides professional services that consist of implementation and consulting services. The technology used in the subscription and support services is based on a single software platform that is deployed to and implemented by customers. The Company manages the business activities on a consolidated basis, and operating segments have not been aggregated. The accounting policies for the operating segment are consistent with those discussed in “Note 2 - Basis of Presentation, Significant Accounting Policies, and Recently-Issued Accounting Pronouncements” in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

The Company’s Chief Operating Decision Maker (“CODM”) assesses performance for the operating segment and decides how to allocate resources based on the review of net income. The CODM uses net income, among other measures, for budgeting and resource allocation purposes. Expenses significant to the segment were determined to be cost of revenues, sales and marketing expenses, research and development expenses, general and administrative expenses, interest expense, and the provision for (benefit from) income taxes, all of which are presented in the unaudited condensed consolidated statements of operations for the quarters ended March 31, 2026 and 2025. Other significant expenses included depreciation expense of $8.4 million and $7.8 million for the quarters ended March 31, 2026 and 2025, respectively, as well as amortization expense of $3.8 million and $3.7 million, during the quarters ended March 31, 2026 and 2025, respectively.

The Company’s intra-entity sales are eliminated upon consolidation. The Company disaggregates its revenue from contracts with customers by geographic location, as it believes it best depicts how the nature, amount, timing, and uncertainty of its revenues and cash flows are affected by economic factors.

The following table sets forth the Company’s revenues by geographic region (in thousands):

No countries outside the United States (“U.S.”) represented 10% or more of total revenues.

The measure of segment assets is reported in the unaudited condensed consolidated balance sheets as total consolidated assets. The following table sets forth the Company’s long-lived assets, which consist of property and equipment, net, and lease right-of-use assets by geographic region (in thousands):

Note 4 –Redeemable Non-Controlling Interest

The Company operates in Japan through BlackLine K.K., in which it holds a 53% controlling interest. The non-controlling interests are held by Japanese Cloud Computing, M30 LLC, and Masamune Mimura (the “Investors”). As the Company continues to control a majority stake in BlackLine K.K., the entity has been consolidated.

All of the common stock held by the Investors is callable by the Company or puttable by the Investors upon certain contingent events. Should the call or put option be exercised, the redemption value will be determined based upon a prescribed formula derived from the discrete revenues of BlackLine K.K. and the Company, and may be settled, at the Company’s discretion, with Company stock or cash. As a result of the put right available to the Investors in the future, the redeemable non-controlling interest in BlackLine K.K. is classified outside of permanent equity in the consolidated balance sheets, and the balance is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest's share of earnings, or its estimated redemption value. The resulting changes in the estimated redemption amount, which is reflected as an adjustment to redeemable non-controlling interest in the table below, are recorded within retained earnings or, in the absence of retained earnings, additional paid-in capital.

Under the terms of the agreement with Investors, all of the common stock is callable or puttable with an exercise date of January 1, 2029.

During the quarter ended March 31, 2026, employees of BlackLine K.K. exercised stock options with a total exercise price of $0.2 million, resulting in the issuance of 0.1 million shares of BlackLine K.K. common stock. The Company subsequently purchased these shares of common stock for an aggregate price of $3.3 million, which increased the majority ownership of BlackLine K.K. from 51% to 53%.

Activity in the redeemable non-controlling interest was as follows (in thousands):

Note 5 –Business Combinations

Acquisition of WiseLayer

On December 15, 2025, the Company acquired WiseLayer (“WL”) through a series of mergers for total purchase consideration of $23.6 million, comprising $18.2 million in cash including post-acquisition working capital adjustments and 0.1 million shares of common stock, which were valued at $5.4 million based on the closing market price on the acquisition date. The acquisition was driven by WL’s unique value proposition in developing a digital workforce of AI-powered agents to automate complex, judgment-based finance and accounting processes.

The Company accounted for the transaction as a business combination using the acquisition method of accounting. The purchase consideration was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition date. The purchase consideration allocation is considered final.

The purchase consideration and major classes of assets and liabilities to which the Company allocated the purchase consideration of $23.6 million were as follows (in thousands):

Per the terms of the acquisition, the Company issued an additional 0.2 million shares of common stock, with a grant-date fair value of $12.6 million, to specified employees of the acquired entity. The awards are subject to continued employment and will be recognized as post-combination stock-based compensation expense over the requisite service period.

The revenue and earnings of the acquired business were included in the Company’s results since the acquisition date, and have not been presented separately using pro forma revenues and results of operations as its impact is not material to the Company’s consolidated financial statements for the periods presented.

Note 6 –Intangible Assets and Goodwill

The carrying value of intangible assets was as follows (in thousands):

The following table represents the changes in goodwill (in thousands):

Note 7 –Balance Sheet Components

Investments in Marketable Securities

Investments in marketable securities, which are presented within current assets in the unaudited condensed consolidated balance sheets, consisted of the following (in thousands):

The Company’s marketable securities at March 31, 2026 have a contractual maturity of less than one year. All of the Company’s available-for-sale securities are available for use in current operations and are categorized as current assets. Refer to “Note 8 - Fair Value Measurements” for additional information.

The Company recognized accretion on its marketable securities of $2.5 million and $2.0 million in interest income in the unaudited condensed consolidated statement of operations for the quarters ended March 31, 2026 and March 31, 2025, respectively.

Net gains and losses are determined using the specific identification method. During the quarter ended March 31, 2026, nominal realized gains were recognized in the unaudited condensed consolidated statements of operations from the sales of marketable securities. During the quarter ended March 31, 2025, there wereno realized gains and losses related to the sales of marketable securities recognized in the unaudited condensed consolidated statements of operations.

Marketable securities in a continuous loss position for less than 12 months had an estimated fair value of $97.1 million and unrealized losses were $0.1 million at March 31, 2026. There wereno marketable securities in a continuous loss position for greater than 12 months at March 31, 2026.

The Company's marketable securities are considered to be of high credit quality and accordingly, there wasno allowance for credit losses related to marketable securities at March 31, 2026.

Other Assets

Deferred customer contract acquisition costs are included in other assets in the unaudited condensed consolidated balance sheets and totaled $86.7 million and $89.3 million at March 31, 2026 and December 31, 2025, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities were comprised of the following (in thousands):

Derivative Instruments

The Company uses foreign currency forward contracts with an approximate maturity of one month to mitigate foreign currency exchange rate fluctuations on certain foreign currency-denominated monetary assets. Under ASC 815, Derivatives and Hedging, these transactions are not designated as hedging instruments.

The fair value of the forward contracts, estimated based on prevailing exchange rates of the various hedged currencies at the end of the period, is reported as either prepaid and other current assets or accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheets. At March 31, 2026, the total gross notional amount of forward contracts was $46.5 million. Refer to “Note 8 - Fair Value Measurements” for additional information on the fair value classification of the forward contracts.

For the quarter ended March 31, 2026, the net realized gain from the forward contracts was $1.2 million, which was recorded in general and administrative expenses. This activity was substantially offset by unrealized losses from remeasurements of various hedged currencies.

Cash flows from the settlement of the forward contracts are classified as operating activities in the unaudited condensed statements of cash flows.

Note 8 –Fair Value Measurements

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis by level, within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands):

The Company classified the marketable debt securities as available-for-sale debt securities at the time of purchase and reevaluated such classification at each balance sheet date. The valuation techniques used to measure the fair values of instruments that were classified as Level 1 were derived from quoted market prices for identical instruments in active markets. The valuation techniques used to measure the fair values of Level 2 instruments were derived from broker reports that utilized quoted market prices for similar instruments.

Foreign currency forward contracts are classified within the Level 2 value hierarchy, as the valuation inputs are not actively traded, and the valuation inputs are based on quoted market prices for similar instruments, including currency spot and forward rates.

Note 9 –Convertible Senior Notes

2029 Notes

At March 31, 2026, the Company had $675.0 million aggregate principal amount of the 1.00% 2029 Notes outstanding. The 2029 Notes consisted of the following (in thousands):

The effective interest rate of the 2029 Notes, excluding the conversion option, was 1.40% at March 31, 2026.

The Company carries the 2029 Notes at face value less unamortized debt issuance costs in the unaudited condensed consolidated balance sheets and presents the fair value for disclosure purposes only. The estimated fair value was determined based on the actual bids and offers of the 2029 Notes in an over-the-counter market on the last trading day of the period. The estimated fair value of the 2029 Notes, based on a market approach at March 31, 2026, was approximately $634.1 million, which represents a Level 2 valuation.

During the quarter ended March 31, 2026, the Company recognized $0.6 million of interest expense related to the amortization of debt issuance costs and $1.7 million of coupon interest expense. During the quarter ended March 31, 2025, the Company recognized $0.6 million of interest expense related to the amortization of debt issuance costs and $1.7 million of coupon interest expense.

The 2029 Notes were not convertible at March 31, 2026. It is the Company’s current intent to settle conversions of the 2029 Notes through “combination settlement”, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares, cash, or a combination for any further value.

In connection with the offering of the 2029 Notes, the Company entered into privately-negotiated capped call transactions (the “2029 Capped Calls” and together with the 2026 Capped Calls (as defined below), the “Capped Calls”). There have been no changes to the condition of the 2029 Notes since December 31, 2025, and the 2029 Capped Calls were unchanged and still outstanding at March 31, 2026.

2026 Notes

On March 15, 2026, the scheduled maturity date of the 0.00% 2026 Notes (the “2026 Notes”), the Company repaid the total outstanding $230.2 million aggregate principal amount pursuant to the terms of the 2026 Notes with cash on hand.

During the quarters ended March 31, 2026 and 2025, the Company recognized interest expense related to the amortization of debt issuance costs of $0.2 million and $0.2 million, respectively.

In connection with the offering of the 2026 Notes, the Company entered into privately-negotiated capped call transactions (the “2026 Capped Calls”). All remaining 2026 Capped Calls expired upon the maturity of the 2026 Notes on March 15, 2026.

Note 10 –Restructuring Costs

Fiscal 2025 Restructuring Programs

In 2025, the Company initiated a global restructuring program to align resources with strategic priorities and enhance operational efficiency through talent optimization (the “Fiscal 2025 restructuring programs”). The liability for the Fiscal 2025 restructuring programs was included in accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheets. The following table summarizes the related activity for the quarter ended March 31, 2026 (in thousands):

At March 31, 2026, the Company incurred cumulative costs of $16.3 million for one-time termination benefits related to the Fiscal 2025 restructuring programs, which occurred in the U.S. and various international locations. The charges were recorded pursuant to ASC 420, Exit or Disposal Obligations. The Company does not anticipate incurring material additional expenses.

Note 11 –Stockholders’ Equity

Common Stock Repurchases

Under the Company’s stock repurchase program, which authorizes the periodic repurchase of its common stock, the Board of Directors (the “Board”) approved an increase to the stock repurchase program of an additional

$100 million of the Company’s common stock on March 13, 2026. This increased the total authorization for repurchases under the stock repurchase program from $400 million to $500 million.

The Company repurchased and retired approximately 1.2 million shares of common stock for $47.1 million during the quarter ended March 31, 2026. At March 31, 2026, $217.4 million remained available for repurchases under this program.

Stock-based compensation expense

Stock-based compensation expense was as follows (in thousands):

For the quarters ended March 31, 2026 and 2025, stock-based compensation capitalized as an asset was $1.1 million and $0.9 million, respectively.

Stock options - service-only vesting conditions

The following table summarizes activity for awards that contain service-only vesting conditions (in thousands):

Restricted stock units - service-only vesting conditions

The following table summarizes activity for restricted stock units that contain service-only vesting conditions (in thousands):

Restricted stock units - performance and service conditions

The following table summarizes activity for restricted stock units with performance and service vesting conditions with grant dates established (in thousands):

The following table summarizes activity for restricted stock units with performance and service vesting conditions with no grant dates established (in thousands):

Restricted stock units - market and service conditions

The following table summarizes activity for restricted stock units with market and service-based conditions with grant dates (in thousands):

The following table summarizes activity for restricted stock units with market and service-based conditions with no grant dates established (in thousands):

Note 12 –Income Taxes

In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date income, adjusted for discrete items arising in that quarter. The Company’s annual estimated effective tax rate differs from the U.S. federal statutory rate of 21% primarily as a result of non-deductible officer compensation, stock-based compensation shortfalls, foreign taxes, and changes in the Company’s valuation allowance for income taxes.

For the quarters ended March 31, 2026 and 2025, the Company recorded $5.9 million and $4.7 million in income tax expense, respectively. The increase in income tax expense for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025, resulted primarily from non-deductible officer compensation and stock-based compensation shortfalls, along with changes in the mix of profitable foreign jurisdictions.

Note 13 –Net Income per Share

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share amounts):

The Company computes basic earnings per share attributable to BlackLine, Inc. using the weighted average number of common shares outstanding. The Company computes diluted earnings per share attributable to

BlackLine, Inc. using the weighted average number of common shares outstanding plus the effect of potentially dilutive shares, which is based on the weighted-average shares of common stock underlying stock options and unvested stock awards using the treasury stock method, and the effect of the convertible senior notes using the if-converted method.

The weighted average impact of potentially dilutive securities that were excluded from the diluted per share calculations because they were anti-dilutive were as follows (in thousands):

The denominator for diluted net income per share attributable to BlackLine, Inc. does not include any effect from the Capped Calls as this effect would be anti-dilutive. In the event of conversion of the 2029 Notes, shares delivered to the Company under the 2029 Capped Calls would offset the dilutive effect of the shares that the Company would issue under the Notes. Refer to “Note 9 - Convertible Senior Notes” for additional information on the Notes and the related Capped Calls.

Note 14 –Commitments and Contingencies

Litigation—From time to time, the Company may become subject to legal proceedings, claims, and litigation arising in the ordinary course of business. The Company is not currently a party to any legal proceedings, nor is it aware of any pending or threatened litigation that would have a material adverse effect on the Company’s business, operating results, cash flows, or financial condition should such litigation be resolved unfavorably.

Indemnification—In the ordinary course of business, the Company may provide indemnification of varying scope and terms to customers, vendors, investors, directors, and officers with respect to certain matters, including, but not limited to, losses arising out of its breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never paid a material claim, nor has it been sued in connection with these indemnification arrangements. At March 31, 2026 and December 31, 2025, the Company has not accrued a liability for these indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with these indemnification arrangements was not probable or reasonably estimable.

Operating Leases— At March 31, 2026, the Company committed $28.2 million for leases signed but not yet commenced. These leases, which are expected to commence within the next twelve months, have lease terms ranging from 10.0 years to 15.5 years.

Note 15 –Unearned Revenue and Performance Obligations

Revenue totaling $151.8 million and $138.4 million was recognized during the quarters ended March 31, 2026 and 2025, respectively, that was previously included in the deferred revenue balance at December 31, 2025 and 2024, respectively.

Contracted but unrecognized revenue was $1.1 billion at March 31, 2026, of which the Company expects to recognize approximately 53% over the next 12 months and the remainder thereafter.

Note 16 –Subsequent Events

The Company continued its execution of the stock buyback program authorized by the Board. Refer to “Note 11 – Stockholders’ Equity” for additional information regarding the stock buyback program. For the period from April 1, 2026 through April 27, 2026, the Company repurchased and retired 0.5 million shares of common stock for an aggregate amount of $17.1 million.