BlackLine, Inc. Q3 FY2025 earnings call

Over the past 2-plus years, BlackLine rearchitected leadership, go-to-market, and technology/operational structures. This quarter, revenue growth was 7.5%, non-GAAP operating margin was 21.4%, and free cash flow margin was 32%. New customer bookings were up 45% with average new deal size up 111% and median up ~50%. Progress in product and technology includes near completion of GCP migration, Studio360 platform progress, open connectivity, and AI initiatives like Verity AI. Go-to-market engine was rearchitected with tools, processes, and people improvements. Efficiency initiatives involved cost base optimization and AI-driven internal productivity.

Total revenue grew to over $178 million, up 7.5%. Subscription revenue grew 7%, services revenue grew 13%. Annual recurring revenue (ARR) was $685 million, up 7.3%. Calculated billings grew 4% with a trailing 12-month billings growth of 7%. Customer count was 4,424. Revenue renewal rate in the third quarter was 93%, net retention rate was 103% (including a full point FX headwind). Strategic products accounted for 36% of sales this quarter, up from 32% last year. SolEx accounted for 26% of total revenue.

For Q4 2025, total GAAP revenue is expected to be in the range of $182 million to $184 million (7.4%-8.6% growth), non-GAAP operating margin 24%-25%, and non-GAAP net income attributable to BlackLine $42 million to $44 million. For full year 2025, total GAAP revenue is expected to be $699 million to $701 million (7%-7.3% growth), non-GAAP operating margin 22%-22.5%, and non-GAAP net income $153 million to $157 million. For 2026, assuming a stable macro environment, accelerating revenue growth and margin expansion is expected, targeting a Rule of 33.

Forward-looking statements are subject to risks and uncertainties, including those in periodic reports. Actual results could differ materially from expectations. Market risks and uncertainties in AI adoption and regulatory environment pose potential challenges.

Q: Commentary on large customers pausing user adds, impact on net new ARR A: Some deals slipped at the end of the quarter, but pipeline for larger deals is strong Q: Philosophy on automation, seat vs platform A: Success-based attrition, platform pricing shift, multiyear renewals are key factors Q: 20% bookings growth drivers A: Higher-level conversations, partner relationships, product-led growth are driving bookings Q: Competition angle A: BlackLine is a safe choice with industry-specific experiences and a proven track record Q: SAP relationship and AI POC A: Joint POC, dedicated customer success, and improved relationships with SAP Q: 2026 macro outlook A: Current macro state is factored, with potential tailwinds Q: ERP, customer, partner conversations A: Transformations are complex, but multiyear renewals are increasing Q: EPS and 2026 Rule of 40 A: Share buyback impacts EPS, with a Rule of 33 expected in 2026 Q: 20% bookings confidence and transition A: Pipeline growth and productivity improvements support 20% bookings growth Q: Driving shareholder value A: Reaccelerating growth, bottom line performance, and AI moat are key to driving shareholder value Q: Federal government adoption and partner selection A: Adoption can expand horizontally and vertically, partners selected based on capabilities Q: Sales cycle automation A: Leadership changes and process improvements aim to reduce sales cycles and implementation costs