BLACKLINE, INC.

Previous wording

BlackLine’s Agentic Financial Operations Platform drives digital finance transformation by empowering organizations with accurate, efficient, and intelligent financial operations. Powered by Studio360 and using intelligence powered by Verity - a comprehensive suite of embedded, auditable AI capabilities - BlackLine unifies data, streamlines processes, and delivers real-time insights. Our platform is built on an architecture that separates the system processing transactions from the system that independently validates and controls them.

Current wording

BlackLine’s Agentic Financial Operations Platform drives digital finance transformation by empowering organizations with accurate, efficient, and intelligent financial operations. Powered by Studio360 and using intelligence powered by Verity - a comprehensive suite of embedded, auditable artificial intelligence (“AI”) capabilities - BlackLine unifies data, streamlines processes, and delivers real-time insights. Our platform is built on an architecture that separates the system processing transactions from the system that independently validates and controls them.

Previous wording

•The Event-Driven Orchestration Engine: Sequences and automates workflows in real time across systems, personnel, and artificial intelligence agents.

Current wording

•The Event-Driven Orchestration Engine: Sequences and automates workflows in real time across systems, personnel, and AI agents.

Previous wording

•The Embedded Intelligence Layer (Verity AI): Integrates machine learning, generative artificial intelligence, and agentic reasoning directly into financial workflows to assist with risk detection, proposing solutions, and automating decision-making under the direction and oversight of finance and accounting teams.

Current wording

•The Embedded Intelligence Layer (Verity AI): Integrates machine learning, generative AI, and agentic reasoning directly into financial workflows to assist with risk detection, proposing solutions, and automating decision-making under the direction and oversight of finance and accounting teams.

Previous wording

At June 30, 2026, we had 4,260 customers, exclusive of on-premise software. Additionally, we continue to build strategic relationships with technology vendors, providers of learning language models, professional services firms, business process outsourcers, and resellers.

Current wording

At September 30, 2026, we had 4,316 customers, exclusive of on-premise software. Additionally, we continue to build strategic relationships with technology vendors, providers of large language models, professional services firms, business process outsourcers, and resellers.

Previous wording

We derived approximately 95% of our revenue from subscriptions to our cloud-based software platform and approximately 5% from professional services for the six months ended June 30, 2026. Our subscription contracts have initial non-cancellable terms of one year to three years with renewal options. The majority of new contracts in 2025 and during the six months ended June 30, 2026 carried an initial non-cancellable term of three years. In 2025, we updated our pricing model to reflect the value of our solutions based on factors such as product mix, organization size, and volumetrics (e.g., number of transactions or entities). We typically invoice subscription fees annually in advance, which are initially recorded as deferred revenue and recognized ratably over the contract term. First-year subscription fees are generally payable within 30 days of contract execution, with subsequent fees due upon renewal.

Current wording

We derived approximately 95% of our revenue from subscriptions to our cloud-based software platform and approximately 5% from professional services for the nine months ended September 30, 2026. Our subscription contracts have initial non-cancellable terms of one year to three years with renewal options. The majority of new contracts in 2025 and during the nine months ended September 30, 2026 carried an initial non-cancellable term of three years. In 2025, we updated our pricing model to reflect the value of our solutions based on factors such as product mix, organization size, and volumetrics (e.g., number of transactions or entities). We typically invoice subscription fees annually in advance, which are initially recorded as deferred revenue and recognized ratably over the contract term. First-year subscription fees are generally payable within 30 days of contract execution, with subsequent fees due upon renewal.

Previous wording

For the quarters ended June 30, 2026 and 2025, we had revenues totaling $187.8 million and $172.0 million, respectively. We generated net income attributable to BlackLine, Inc. of $16.5 million and $8.3 million for the quarters ended June 30, 2026 and 2025, respectively.

Current wording

For the quarters ended September 30, 2026 and 2025, we had revenues totaling $193.4 million and $178.3 million, respectively. We generated net income attributable to BlackLine, Inc. of $10.6 million and $5.3 million for the quarters ended September 30, 2026 and 2025, respectively.

Previous wording

For the six months ended June 30, 2026 and 2025, we had revenues totaling $371.0 million and $339.0 million, respectively. We generated net income attributable to BlackLine, Inc. of $24.6 million and $14.3 million for the six months ended June 30, 2026 and 2025, respectively.

Current wording

For the nine months ended September 30, 2026 and 2025, we had revenues totaling $564.4 million and $517.2 million, respectively. We generated net income attributable to BlackLine, Inc. of $35.2 million and $19.6 million for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Our operating results may vary due to the impact of industry or global economic conditions on us or our customers. General macroeconomic conditions, such as political conflicts, recession, inflation or rising interest rates, an economic downturn in the U.S. or internationally, adverse business conditions and liquidity concerns, have and could continue to adversely affect demand for our products and make it difficult to accurately forecast and plan our future business activities. As a result of economic uncertainty, and protracted vendor selection processes associated with our customers’ analysis of our, and others’ AI offerings, we may see customers delay and defer purchasing decisions, which could adversely impact our near-term demand.

Current wording

Our operating results may vary due to the impact of industry or global economic conditions on us or our customers. General macroeconomic conditions, such as political conflicts, recession, inflation or rising interest rates, an economic downturn in the United States (“U.S.”) or internationally, adverse business conditions and liquidity concerns, have and could continue to adversely affect demand for our products and make it difficult to accurately forecast and plan our future business activities. As a result of economic uncertainty, and protracted vendor selection processes associated with our customers’ analysis of our, and others’ AI offerings, we may see customers delay and defer purchasing decisions, which could adversely impact our near-term demand.

Previous wording

Dollar-based net revenue retention rate. We believe that dollar-based net revenue retention rate is an important metric to measure the long-term value of customer agreements and our ability to retain and grow our relationships with existing customers over time. We calculate dollar-based net revenue retention rate as the implied monthly subscription and support revenue at the end of a period for the base set of customers from which we 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. We define implied monthly subscription and support revenue as the total amount of minimum subscription and support revenue contractually committed to, under each of our customer agreements over the entire term of the agreement, divided by the number of months in the term of the agreement. At June 30, 2026, our dollar-based net revenue retention rate declined from the quarter ended March 31, 2026, primarily due to the impact of unfavorable foreign exchange rates. Our ability to maximize the lifetime value of our customer relationships will depend, in part, on the willingness of the customer to purchase additional products from us. We rely on our customer success and sales teams to support and grow our existing customers by maintaining high customer satisfaction and educating the customer on the value our products provide.

Current wording

Dollar-based net revenue retention rate. We believe that dollar-based net revenue retention rate is an important metric to measure the long-term value of customer agreements and our ability to retain and grow our relationships with existing customers over time. We calculate dollar-based net revenue retention rate as the implied monthly subscription and support revenue at the end of a period for the base set of customers from which we 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. We define implied monthly subscription and support revenue as the total amount of minimum subscription and support revenue contractually committed to, under each of our customer agreements over the entire term of the agreement, divided by the number of months in the term of the agreement. At September 30, 2026, our dollar-based net revenue retention rate increased from the quarter ended June 30, 2026, primarily due to reductions in churn and attrition. Our ability to maximize the lifetime value of our customer relationships will depend, in part, on the willingness of the customer to purchase additional products from us. We rely on our customer success and sales teams to support and grow our existing customers by maintaining high customer satisfaction and educating the customer on the value our products provide.

Previous wording

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 SolEx and the public sector. Management believes that this metric is useful for tracking the progress of the new pricing strategy launched in 2025.

Current wording

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 (“ARR”) divided by our eligible ARR. We define eligible ARR as total ARR, excluding revenue from SAP SolEx and the public sector. Management believes that this metric is useful for tracking the progress of the new pricing strategy launched in 2025.

Previous wording

Number of customers. We believe that our ability to expand our customer base is an indicator of our market penetration and the growth of our business. We define a customer 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. However, 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. For the quarters and six months ended June 30, 2026 and 2025, no single customer accounted for more than 10% of our total revenues.

Current wording

Number of customers. We believe that our ability to expand our customer base is an indicator of our market penetration and the growth of our business. We define a customer 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. However, 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. For the quarters and nine months ended September 30, 2026 and 2025, no single customer accounted for more than 10% of our total revenues.

Previous wording

The total number of customers at June 30, 2026 declined marginally compared to June 30, 2025, primarily due to our strategic prioritization of enterprise and mega‑enterprise customers. Importantly, this shift reflects our focus on higher‑quality revenue and long‑term growth.

Current wording

The total number of customers at September 30, 2026 declined marginally compared to September 30, 2025, primarily due to our strategic prioritization of enterprise and mega‑enterprise customers, partially offset by the customers acquired in the NetNow Acquisition.

Previous wording

In addition to our results determined in accordance with GAAP, we believe the non-GAAP measures below are useful to us and our investors in evaluating our business. These non-GAAP financial measures are useful because they provide consistency and comparability with our past performance, facilitate period-to-period comparisons of operations and facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Current wording

In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we believe the non-GAAP measures below are useful to us and our investors in evaluating our business. These non-GAAP financial measures are useful because they provide consistency and comparability with our past performance, facilitate period-to-period comparisons of operations and facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Previous wording

Comparison of Quarters and Six Months Ended June 30, 2026 and 2025

Current wording

Comparison of Quarters and Nine Months Ended September 30, 2026 and 2025

Previous wording

The increase in revenues for the quarter and six months ended June 30, 2026, compared to the quarter and six months ended June 30, 2025, was primarily driven by revenue from product expansion from existing customers and bookings from new customers. The total number of customers at June 30, 2026 declined marginally compared to June 30, 2025, primarily due to our strategic prioritization of enterprise and mega‑enterprise customers. Importantly, this shift reflects our focus on higher‑quality revenue and long‑term growth.

Current wording

The increase in revenues for the quarter and nine months ended September 30, 2026, compared to the quarter and nine months ended September 30, 2025, was primarily driven by revenue from product expansion from existing customers and bookings from new customers. The total number of customers at September 30, 2026 declined marginally compared to September 30, 2025, primarily due to our strategic prioritization of enterprise and mega‑enterprise customers, partially offset by the customers acquired in the NetNow Acquisition.

Previous wording

•$6.6 million increase in computer software expenses due to higher cloud hosting costs and continued strategic investments in our embedded product solutions;

Current wording

•$2.4 million increase in computer software expenses and our embedded product solutions due to higher cloud hosting costs that deliver our platform to customers;

Previous wording

•$1.3 million increase in amortization of developed technology due to net additions to software placed into service; and

Current wording

•$0.6 million increase in amortization of developed technology due to net additions to software placed into service; and

Previous wording

•$0.4 million increase in depreciation and amortization due to the addition of developed technology from the WiseLayer acquisition, net of certain assets becoming fully amortized in prior periods; partially offset by

Current wording

•$0.3 million increase in amortization due to the addition of developed technology from the 2025 acquisition of WiseLayer (“WL”), net of certain assets becoming fully amortized in prior periods; partially offset by

Previous wording

•$0.8 million decrease in professional fees.

Current wording

•$0.8 million decrease in employee compensation and benefits.

Previous wording

The increase in total cost of revenues for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily due to the following:

Current wording

The increase in total cost of revenues for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily due to the following:

Previous wording

•$2.9 million increase in computer software expenses due to higher cloud hosting costs and continued strategic investments in our embedded product solutions; and

Current wording

•$8.4 million increase in computer software expenses and our embedded product solutions due to higher cloud hosting costs that deliver our platform to customers;

Previous wording

•$0.6 million increase in amortization of developed technology due to net additions to software placed into service; partially offset by

Current wording

•$1.9 million increase in amortization of developed technology due to net additions to software placed into service; and

Previous wording

The increase in sales and marketing expenses for the quarter ended June 30, 2026, compared to the quarter ended June 30, 2025, was primarily due to the following:

Current wording

The decrease in sales and marketing expenses for the quarter ended September 30, 2026, compared to the quarter ended September 30, 2025, was primarily due to the following:

Previous wording

•$0.7 million increase in travel-related expenses; partially offset by

Current wording

•$0.7 million increase in employee compensation and benefits.

Previous wording

The increase in sales and marketing expenses for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily due to the following:

Current wording

The increase in sales and marketing expenses for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily due to the following:

Previous wording

•$1.0 million decrease in professional fees; and

Current wording

•$1.3 million decrease in professional fees and partner referral fees.

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•$0.5 million increase in capitalized software costs primarily due to the continued development of new solution offerings. Collectively, these increases resulted in a decrease in net expenses; and

Current wording

•$0.7 million increase in capitalized software costs primarily due to the continued development of new solution offerings. Collectively, these increases resulted in a decrease in net expenses; and

Previous wording

The increase in research and development expenses for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily due to the following:

Current wording

The increase in research and development expenses for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily due to the following:

Previous wording

•$1.8 million increase in computer software expenses due to higher spend on cloud hosting services and continued strategic investments in automation; and

Current wording

•$2.9 million increase in computer software expenses due to higher spend on data services and continued investment in AI and automation tools; and

Previous wording

•$1.5 million increase in capitalized software costs primarily due to the continued development of new solution offerings. Collectively, these increases resulted in a decrease in net expenses; and

Current wording

•$2.2 million increase in capitalized software costs primarily due to the continued development of new solution offerings. Collectively, these increases resulted in a decrease in net expenses; and

Previous wording

•$0.6 million increase in advisory and legal-related expenses;

Current wording

•$1.6 million increase in advisory and legal-related expenses, including transaction-related costs for the NetNow Acquisition; and

Previous wording

The increase in general and administrative expenses for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily due to the following:

Current wording

The increase in general and administrative expenses for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily due to the following:

Previous wording

•$4.3 million increase primarily due to an unfavorable change in foreign currency, net of the impact of foreign currency forward contracts;

Current wording

•$4.1 million increase primarily due to lower net foreign currency gains, after the effect of our foreign currency forward contracts;

Previous wording

Restructuring costs were relatively flat during the quarter ended June 30, 2026, compared to the quarter ended June 30, 2025. The decrease in restructuring costs during the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily due to lower additional one-time termination benefits under the Fiscal 2025 restructuring programs.

Current wording

Restructuring costs increased during the quarter ended September 30, 2026, compared to the quarter ended September 30, 2025, primarily due to higher additional one-time termination benefits under the Fiscal 2026 restructuring program. The decrease in restructuring costs during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily due to lower additional one-time termination benefits under the Fiscal 2025 restructuring program.

Previous wording

The decrease in interest income during the quarter and six months ended June 30, 2026, compared to the quarter and six months ended June 30, 2025, was primarily due to decreased average balances on our investments and cash balances, and to a lesser extent, a decrease in average interest rates on our investments and cash balances.

Current wording

The decrease in interest income during the quarter and nine months ended September 30, 2026, compared to the quarter and nine months ended September 30, 2025, was primarily due to decreased average balances on our investments and cash balances, and to a lesser extent, a decrease in average interest rates on our investments and cash balances.

Previous wording

Interest expense for the quarter and six months ended June 30, 2026, compared to the quarter and six months ended June 30, 2025, decreased slightly due to the repayment of our 2026 Notes in March 2026. Refer to “Note 8 - Convertible Senior Notes” in our unaudited condensed consolidated financial statements for additional information.

Current wording

Interest expense for the quarter and nine months ended September 30, 2026, compared to the quarter and nine months ended September 30, 2025, decreased slightly due to the repayment of our 2026 Notes in March 2026. Refer to “Note 9 - Convertible Senior Notes” in our unaudited condensed consolidated financial statements for additional information.

Previous wording

We are subject to federal and state income taxes in the U.S. and taxes in foreign jurisdictions. For the quarter ended June 30, 2026, our annual estimated effective tax rate differed from the U.S. federal statutory rate of 21% primarily as a result of non-deductible officer compensation, stock-based compensation shortfalls, foreign taxes, changes in our valuation allowance for income taxes, and a one-time tax benefit associated with the base erosion and anti-abuse tax.

Current wording

We are subject to federal and state income taxes in the U.S. and taxes in foreign jurisdictions. For the quarter ended September 30, 2026, our annual estimated effective tax rate differed 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 our valuation allowance for income taxes.

Previous wording

For the quarters ended June 30, 2026 and 2025, we recorded $3.5 million and $6.2 million in income tax expense, respectively. For the six months ended June 30, 2026 and 2025, we recorded $9.4 million and $10.8 million in income tax expense, respectively. The decrease in income tax expense for the quarter and six months ended June 30, 2026, compared to the quarter and six months ended June 30, 2025, resulted primarily from a one-time tax benefit associated with the base erosion and anti-abuse tax recognized in the current quarter, along with changes in the mix of profitable jurisdictions.

Current wording

For the quarters ended September 30, 2026 and 2025, we recorded $7.3 million and $4.7 million in income tax expense, respectively. For the nine months ended September 30, 2026 and 2025, we recorded $16.7 million and $15.5 million in income tax expense, respectively. The increase in income tax expense for the quarter ended September 30, 2026, compared to the quarter ended September 30, 2025, resulted primarily from the 2025 release of valuation allowance with respect to the BlackLine K.K. deferred tax assets. The increase in income tax expense for the nine months ended September 30, 2026, compared to nine months ended September 30, 2025, resulted primarily from the 2025 release of valuation allowance with respect to BlackLine K.K. deferred tax assets, along with changes in the mix of profitable jurisdictions, partially offset by a one-time tax benefit associated with the base erosion and anti-abuse tax recognized in 2026.

Previous wording

At June 30, 2026, our principal sources of liquidity were an aggregate of $527.8 million of cash and cash equivalents and marketable securities, which primarily consist of short-term, money market mutual funds, U.S. treasury securities, commercial paper, and corporate bonds.

Current wording

At September 30, 2026, our principal sources of liquidity were an aggregate of $531.9 million of cash and cash equivalents and marketable securities, which primarily consist of short-term, money market mutual funds, U.S. treasury securities, commercial paper, and corporate bonds.

Previous wording

At June 30, 2026, we have obligations totaling $23.4 million related to existing property and equipment leases. As of June 30, 2026, we committed $25.0 million for a lease signed but not yet commenced. This lease, which is expected to commence within the next twelve months, has a lease term of 15.5 years.

Current wording

At September 30, 2026, we have obligations totaling $21.5 million related to existing property and equipment leases. As of September 30, 2026, we committed $25.0 million for a lease signed but not yet commenced. This lease is expected to commence within the next six months and has an initial non-cancellable term of ten years with an option to extend for an additional five years, which we are reasonably certain to exercise.