BlackLine, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Black Line Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press the star, then the one key on your touch-tone telephone. If you call Operate Systems, please press star, then zero. I would now like to hand the conference over to your speaker host, Barry Hutton, from the Blue Shirt Group. Please go ahead.

Good afternoon, and thank you for your participation today. With me on the call is Mark Huffman, Chief Executive Officer of Blackline, and Mark Pardon, Chief Financial Officer. Before we get started, I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans, objectives, and expected performance, in particular, our guidance for Q1 and the full year 2022, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this call. While we believe any forward-looking statements we may make are reasonable, actual results could differ materially because the statements are based on our current expectations as of today and are subject to risk and uncertainty, including those stated in our periodic reports filed with the Securities and Exchange Commission, in particular our Form 10-K and Form 10-Q. We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Also, unless otherwise stated, all financial measures disclosed on this call will be non-GAAP. A discussion of why we use non-GAAP financial measures and information regarding reconciliations of our GAAP versus non-GAAP results is currently available in our press release, which may be found on our investor relations website at investors.blackline.com or on our form 8K filed with the SEC today. Now I will turn the call over to Mark Huffman to begin.

Good afternoon, everyone, and thank you for joining us today. I'm excited to discuss our record performance in Q4 and 2021 and review our plans for 2022. I'm very pleased with our Q4 results, which represented a strong close to a year of increasing demand and consistent execution from the team. Our Q4 performance came in ahead of our expectations as we earned total revenue of $115 million, up 20% over the prior year. On a macro level, we continued to see strong demand across global markets from all customer segments as both new and existing customers continued to invest in back-office digital transformation. We see a significant opportunity in front of us, and plan to invest in the long-term growth of our business. We previously outlined three areas of focus to better serve our customers and drive our growth. In Q4, we continue to execute against these three priorities, customer engagement and success, platform innovation and expansion, and growing our international presence. A few highlights from the quarter include our renewal rate finished the year strong at 98%, and our net dollar retention rate continued to climb to 109%. We were pleased with this result. The increase was driven largely by the strong levels of demand from our existing customers for our strategic products, our investments in customer success, and execution from our go-to-market teams. Our strategic products, which include accounts receivable automation, Enter company hub and transaction matching finished at 32% of total sales for the quarter, which was a new record and well above our expected range. Sales from our SAP Solex partnership finished the year with one of the strongest quarters since its launch in 2018. At the end of 2021, our SAP partnership revenue made up 25% of total revenue. We are pleased with the partnership's pace of ramp and its momentum going into 2022. Sales in EMEA and APAC continued to help drive our revenue growth in the quarter. As of year-end 2021, international revenue reached 30% of our total business, up from 26% a year ago. This increased share resulted from accelerated investment in our global partner ecosystem and go-to-market capacity. Additionally, the SAP partnership and the Remilia acquisition we completed in late 2020 helped us further penetrate both new and existing global markets. Some examples of international Solex and accounts receivable deals include the following. In the fourth quarter, we added a large multinational beverage company, Intimia, through the Solex partnership. They were looking to Blackline to help them automate their manual spreadsheet-based accounting processes. and removed complexity in managing global audit compliance. This Solex deal also replaced a competitor solution. Another exciting fourth quarter deal came from an existing enterprise customer. This global multi-billion dollar media and advertising conglomerate has been a Blackline customer since 2013 and has leveraged the financial close suite to help accelerate their financial close and automate their journal entry process. This quarter, they scaled their Blackline platform deployment by adding the cache application and AR intelligence to provide much needed aggregated visibility across business units and improve unapplied cache levels. Today, we provide our customers with more capabilities than ever before. Our 2021 product priorities included platform modernization and scaled public cloud deployment. We are in a leadership position in our market, and we continue to have a heightened focus on measures of operational excellence, such as controls, quality, security, and uptime. In 2021, we were also focused on bringing new products and functionality to market, such as an upgraded user interface, a mobile user experience that has driven more journals' adoptions, and a complete suite of AR solutions, just to name a few. We believe this pace of customer-focused innovation is why our customers view us as an indispensable partner to the controller's office. We've made platform enhancements and recently closed an important strategic acquisition that will offer expanded solutions to our existing financial operations management platforms. During the quarter, we announced our enhanced accounts receivable automation platform. This suite provides traditional cash management automation, along with credit and risk management, collections management, dispute and deductions management, as well as AR intelligence. As an example of the scale of the platform, we have a global logistics company that applied 8 million payments, representing $6.2 billion in 2021 and is projected to apply 22 million payments by the end of this year. The relevance and timeliness of accounts receivable automation drew record demand in our marketing events and sales pipeline, which contributed to the strong quarter in AR customer sales. In January, we announced our acquisition of 4Q, which represents another important expansion of our platform capabilities. With 4Q, our expanded intercompany financial management product will help multinational companies reduce intercompany complexity and design and govern global tax strategies. I'll discuss this acquisition more in just a moment. As part of further developing our financial operations management platform, we've also formed strategic partnerships to help companies accelerate their finance transformations. Through our agreement with Microsoft, we are collaborating on joint selling actions and solution integrations to help mid-market and enterprise-sized customers gain control over critical areas such as their financial close, accounts receivable, and intercompany accounting processes. This partnership will offer a better customer experience with enhanced connectivity and integration. And recently, we announced an expansion of our partnership with Google to conduct joint selling and go-to-market activities designed to accelerate the customer journey to digital finance transformation and modern accounting. Notably, we believe this agreement will better enable our customers to deploy Blackline solutions built on Google's secure cloud platform. As a result, customers will be able to easily integrate data and automate traditional manual accounting processes and offer more capacity to free up time and resources to do more strategic work. Last year, we continued to emphasize our commitment to customer success. During the year, we hosted several events and activities for all of our 3,800-plus customers, including some of the largest enterprises in the world to guide them on their unique path to financial transformation. Our subject matter experts with deep accounting and black line expertise offer leading practices to adopt modern accounting. These experts meet customers where they are in their journey and provide a path to greater adoption and automation. This is done through one-to-one coaching sessions and one-to-many optimization workshops. Both methods help customers to automate end-to-end accounting processes like amortization, accruals, sub-ledgers, suspense and clearing, just to name a few. Our customer success program ensures a greater platform adoption, resulting in higher rates of retention and expanded use of our strategic products. One of our greatest opportunities to focus on customers is through our annual user conference, Beyond the Black, which we hosted in November. This conference provided three days of content and educational sessions to further prove the power of our platform and customer success. This year's event had significant customer engagement from over 19,000 virtual attendees, representing over 5,700 organizations, both prospects and current customers. Of note during the conference was the level of participation and interest in large digital transformations, driven by our product vision for financial operations management, which resonated with our customers and prospects. And we were very excited to see the level of increased customer interest in our intercompany financial management session, which drew thousands of attendees with four times more individuals than the previous year. Intercompany financial management is an especially attractive market for BlackLines. The global trends, increasing M&A, trade, and involving tax regulations create large volumes of complex intercompany transactions. We launched our intercompany hub solution over five years ago to provide valuable solutions in this area. Yet we've only just begun to reach the total addressable market in intercompany financial management. Over the past several years, the market has continued to evolve, and in the recent quarters, We've seen momentum building in this part of our business. Our recent acquisition of 4Q, which we announced January 27th, is a great example of our commitment to expanding our platform and investing in the long-term growth. I'm very excited about this deal and what it means for Blackline's future. The acquisition of 4Q builds on our recent success and is complementary to our existing capabilities. It expands our team by adding over 130 employees to the Blackline family and increases our value to the broader office of the CFO. By integrating our existing solutions with 4Q's capabilities, we will further reduce complexity and deliver several benefits to customers, including optimized tax and transfer price modeling, reduced foreign currency risk, enhanced regulatory compliance, rapid M&A integration, and our unmatched domain expertise. Since announcing the deal, we've received favorable feedback from our customers that are looking for additional solutions to resolve their intercompany challenges. As I look back on 2021, I'm pleased with the progress we made on our strategic initiatives. As we move into 2022, I'm excited about the recent trends in the market, and I'm very confident in our team, our ability to execute, and our positioning. We are in the early innings of a large growing market, and we're seeing the demand for digital transformation across the back office continue to expand. Our focus will be to continue to serve our customers, accelerate growth in our combined markets, and scale the business to support our expanding reach. We remain committed to executing our multi-year strategy to drive long-term sustainable growth, and advancing Blackline's position as a market leader. I'll now turn it over to Mark Parton to discuss our financial performance and our financial outlook for 2022.