BlackLine, Inc.

Thank you, Owen. The third quarter marked strong execution across our strategic innovation priorities, characterized by accelerating platform and product delivery that strengthen our leadership position within the office of the CFO. Our upcoming customer conference, Beyond the Black and Investor Day, will showcase a brand evolution that reflects our growing market opportunity and platform innovation. While full details are forthcoming, our third quarter achievements reflect successful execution against our strategic roadmap and position us to capture increased market share supported by building digital finance transformation tailwinds. As noted, we're executing a transformative platform modernization strategy that we believe positions us for significant scale and accelerated innovation. Our cloud migration to Google Cloud Platform is over 80% complete, setting the stage for meaningful scale and efficiency as we move forward. Beyond the immediate cost benefits to completing this migration, it unlocks additional value drivers, accelerated product development velocity, and enhanced AI capabilities across our entire platform. Our new studio offering is gaining market momentum demonstrated by both customer adoption and partner engagement this quarter. As highlighted earlier, we've already secured several strategic customer wins, validating our multi-year investment into Studio. As we integrate this and other capabilities into our broader platform, we're creating clear differentiation in the market for finance transformation. We look forward to showcasing this comprehensive platform vision in two weeks, which we believe will establish a new standard in our industry. Now, turning to our solutions, we just launched an exciting new industry-specific financial close solution that solves a major pain point for banks and retailers, tracking and reconciling millions of daily transactions in real time. Think about how many credit card swipes, online payments, and bank transfers happening every day at a major bank or retail chain. Our new high-frequency reconciliation solution automatically reconciles all these transactions across different systems, flagging discrepancies that could signal fraud or errors. This is a game changer because traditionally, Companies would typically review these transactions just once a month, creating delays and adding risk to their closed processes. Early adopters are already using this solution, and we plan to roll it out widely to customers in early 2025. In our consolidation and financial analytics pillar, we've strengthened our competitive position in the high value enterprise consolidation market. with two strategic enhancements. First, we've launched advanced financial statement attestation capabilities that enable organizations to validate results across multiple business entities, a critical need for both domestic and complex global enterprises. Second, we've deployed generative AI-powered analytics that automatically generate insights from financial data helping CFOs and their teams understand significant changes in their balance sheets. These innovations address key pain points in the record to report process and help deepen and extend our capabilities further across the office of the CFO. In our invoice to cash pillar, we've launched a significant enhancement to our invoice to cash platform. introducing AI-powered payment prediction capabilities that directly impact our customers' bottom line. This new technology enables enterprises to forecast customer payment patterns with unprecedented accuracy, giving them precise control over their cash flows and working capital. By leveraging advanced machine learning algorithms, companies can now optimize their working capital by predicting exactly when customers will pay, a critical advantage in today's economic environment. We believe this innovation strengthens our end-to-end offering and supports an expanding opportunity set within this market. In intercompany, we further extended our market leadership with the launch of generative AI-powered predictive guidance. This technology automatically identifies errors and anomalies in intercompany transactions before they impact financial statements, a critical capability for global enterprises managing high volumes of intercompany transactions. Our AI innovation directly addresses a major pain point for multinational corporations, dramatically reducing compliance risk and eliminating thousands of hours of manual review. We believe this enhancement cements our dominant position in the intercompany automation market, where we continue to maintain significant competitive advantages in the market. Beyond our customer-facing AI innovations, we're also delivering internal AI tools for our employees. Our proprietary Gen-I companion, Bucky AI, which is trained on internal company data, was released recently to our entire employee population and has achieved remarkable adoption metrics. In the first month since deployment, over 50% of our global workforce has actively used the tool, processing more than 11,000 unique queries across 50 languages in 19 countries. Most importantly, this technology has already generated measurable ROI, saving 3,000 to 4,000 employee hours in just the first month alone. We believe the rapid adoption and productivity gains from modern AI tools like Bucky AI offer a pathway to enhance productivity and efficiency as we move forward. Moreover, our internal success with AI deployment serves as a powerful proof point for our customers, reinforcing our credibility and trust in this fast-moving market. Before turning the call over to Mark, I want to express my deepest gratitude for his exceptional service and partnership as Blackline's CFO. His rare combination of strategic vision and financial acumen makes him truly one in a million and is exactly the leader we needed to guide us on our journey from pre-IPO to the market leader we are today. Beyond his technical excellence, Mark's unwavering integrity and inspirational leadership have left an indelible mark on our company and our employees. We've been incredibly fortunate to have him as our partner and CFO. With that, I'll turn it over to Mark to cover our financials. Mark?

Thank you, Therese. Our third quarter results demonstrate solid execution against many of our key financial priorities, highlighted by meaningful margin expansion and strong free cash flow generation. While we continue to operate in a measured demand environment, our strategic investments in innovation and go-to-market initiatives are strengthening our competitive position. We believe this foundation, combined with our relentless operational discipline, positions us to accelerate growth as market conditions improve and drive enhanced financial performance. With that in mind, let's review our financial performance in more detail. Total revenue grew to $166 million, up 10%, with subscription revenue growth of 11% and services revenue growth of 3%. While services revenue was slightly better than expected, we still see services as an expected drag to overall revenue growth this year. Remaining performance obligations, or RPO, was up 12%, driven by account growth and longer contract terms from renewing customers. Current RPO was up 11%, with total annual recurring revenue, or ARR, of $638 million, up 10%. Calculated billings growth was 4%, with trailing 12-month billings growth of 9%, due to a mix of seasonality, timing, and incremental churn and attrition. Our customer count at the end of the quarter was 4,433. Let me provide additional context on our customer metrics. While overall customer addition remains stable, our strategic repositioning has led to expected churn among smaller accounts that fall well below our average contract value. This is aligned with our deliberate focus on the enterprise and the right customers in the mid-market segment, customers who can grow meaningfully with our platform over time. The success of this strategy is evident in our higher value customer cohort. We've achieved 27% growth in customers generating over a million dollars in AR and 12% growth in customers above 250,000 in ARR. These metrics validate our strategic shift toward higher value relationships and demonstrate our increasing penetration in these market segments. Our revenue renewal rate in the second quarter was 92%, reflecting the customer trends just mentioned. While we see the effects of middle market churn play out here and serve as a near-term drag, what you aren't seeing is building strength within our enterprise customer base and its improvement. Specifically, our enterprise renewal rate in Q3 was 97%, back in line with our long-term historical levels. Net retention rate, or NRR, was 105% this quarter, reflecting these customer dynamics combined with stable pricing and customer expansion, particularly in our enterprise business and the effects of FX. Strategic product performance was a highlight this quarter and represented 31% of sales above our target range. Performance this quarter was driven primarily by strength in financial reporting and analytics, as well as transaction matching. Partners were involved in 81% of large deals this quarter, with consistency across both new and existing opportunities. Solex performance was seasonally soft this quarter, primarily on the net new side, despite some large customer wins. In Q3, SAP partnership represented 26% of total revenue. Turning to margin, Our non-GAAP gross margin was 79%, with non-GAAP subscription gross margin of 82%. Gross margin performance remains in line with our expectations as we focus on optimizing cloud spend and completing our multi-year migration to GCP. Non-GAAP operating margin was 23% above our expectations, largely due to R&D efficiency from our location strategy at higher rates of innovation. Non-GAAP net income attributable to Blackline was $44 million, up 17%, and represented a 27% non-GAAP net income margin due primarily to operating income outperformance. We generated $56 million in operating cash flow and $49 million in free cash flow in the quarter, with a record free cash flow margin of 30%, driven by a combination of strong earnings and working capital management. And last, regarding our balance sheet, we have approximately $850 million in cash, cash equivalents and marketable securities versus $890 million in debt. Now on guidance, we are raising our full year revenue and non-GAAP operating margin guidance ranges based on Q3 performance and our views for the balance of the year. For the fourth quarter of 2024, we expect total GAAP revenue to be in the range of $167 to $169 million. represented approximately 7% to 9% growth. We expect non-GAAP operating margin to be in the range of 18% to 19%, reflecting the cost of our large customer conference in Q4. And we expect non-GAAP net income attributable to Blackline to be in a range of $36 to $40 million, or $0.47 to $0.52 on a per share basis. Our share count is expected to be approximately 77.1 million diluted weighted average shares. And for the full year, 2024, our updated guidance is as follows. We expect total GAAP revenue to be in a range of $651 to $653 million, representing 10 to 11% growth. We expect non-GAAP operating margin to be in a range of 19.4 to 19.6%. And finally, we expect non-GAAP net income attributable to Blackline to be in a range of $164 to $168 million, or $2.15 to $2.21 on a per share basis. Our share count is expected to be approximately 76.1 million weighted average shares. Before I close, just a quick personal note. Serving as CFO of this incredible company for the past decade has been the highlight of my career. When I reflect on our journey from where we started to where we are today, I'm filled with immense pride in what we've built together. Yet I'm even more excited about the company's future. The depth of talent and the strength of leadership that we've assembled gives me complete confidence that our best chapters are still ahead. It's particularly meaningful to me that Patrick, who has worked alongside me throughout this journey, will be stepping into this role. His deep understanding of our business Proven leadership makes him the ideal person to help guide this company into the next phase of growth. To our employees who make the impossible possible every day, and to our investors who have believed in our vision, thank you for letting me be part of this remarkable story. With that, I'll now ask the operator to open the discussion to take your questions.

Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Patrick Walrevins of Citizens JMP. Your line is now open.