BlackLine — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total GAAP revenue reached $193.4 million, an 8.5% increase year-over-year compared to Q3 2025.
• GAAP operating margin improved to 8.6% from 4.3% in Q3 2025.
• Non-GAAP operating margin expanded to 25.9% from 21.4% in Q3 2025.
• GAAP net income attributable to BlackLine was $10.6 million ($0.18 per diluted share), compared to $5.3 million ($0.09 per share) in Q3 2025.
• Non-GAAP net income attributable to BlackLine was $44.7 million ($0.64 per diluted share), compared to $37.6 million ($0.51 per share) in Q3 2025.
• Billings totaled $170.9 million, a 5.7% increase year-over-year.
• Remaining performance obligation (RPO) reached $1.1 billion, a 14.3% increase year-over-year.
• Operating cash flow was $67.1 million, compared to $63.8 million in Q3 2025.
• Free cash flow was $57.5 million, compared to $57.0 million in Q3 2025.
• The company repurchased approximately 1.3 million shares for $39.1 million; $240.6 million of buyback capacity remained as of September 30, 2026.

Guidance and Future Outlook:

• Q4 2026 GAAP revenue is expected to be between $195 million and $197 million.
• Q4 2026 Non-GAAP operating margin is projected between 25.8% and 26.9%.
• Q4 2026 Non-GAAP net income is expected to be $47 million to $48 million ($0.67 to $0.68 per share).
• Full Year 2026 GAAP revenue guidance is set between $759.5 million and $761.5 million.
• Full Year 2026 Non-GAAP operating margin guidance is between 24.2% and 24.5%.
• Full Year 2026 Non-GAAP net income is expected to be $174 million to $175 million ($2.48 to $2.49 per share).
• Management noted that timing of customer decisions shaped the updated outlook, but strategy and long-term opportunity remain unchanged.

Business Segments and Product Lines:

• Total customer count reached 4,316 as of September 30, 2026.
• Platform pricing Annual Recurring Revenue (ARR) as a percentage of eligible ARR was 23% as of September 30, 2026.
• Dollar-based net revenue retention rate was 103% as of September 30, 2026.
• The company acquired NetNow to expand Invoice-to-Cash capabilities with intelligent customer onboarding and credit risk management.
• Support for complex workflows was expanded with PCI DSS compliance validation.
• The Agentic Financial Operations Platform, powered by Studio360 and Verity AI, is positioned to drive growth in Record-to-Report, Invoice-to-Cash, and control processes.

Market and Competitive Landscape:

• The world's largest companies continue to choose BlackLine.
• Customers are moving to the platform and making larger and longer commitments.
• Management expressed confidence in BlackLine's leadership position as adoption of AI solutions builds.

Risks and Challenges:

• Forward-looking statements are subject to risks including the ability to attract new customers, expand sales to existing customers, and the extent of customer renewals or user increases.
• Risks include economic uncertainty, unfavorable industry conditions, and the ability to manage growth and scale effectively.
• Potential impacts from AI/ML development, deployment, and associated reputational or legal liability are noted.
• Risks related to competitor actions, including the speed of incorporating AI/ML into products, are highlighted.
• Other risks include cyber attacks, security breaches, loss of key employees, and integration of acquired businesses.

Management Commentary and Tone:

• CEO Owen Ryan stated the company delivered "strong profitability and cash flow" and made "significant progress transforming our business."
• Management described the foundation as strong and expressed confidence in the long-term opportunity despite timing shifts in customer decisions.
• The tone indicated a focus on prudent planning and continued investment in innovation for the next phase of growth.
• Management highlighted the provision of a "trusted, governed path to AI" for finance teams.

Other Key Points:

• The company announced a $100 million increase to its stock buyback program.
• The company honored global enterprise leaders via the 2026 Modern Accounting Awards.
• The financial results included in the press release are preliminary and subject to final review upon filing the Form 10-Q.
• Reconciliations of non-GAAP measures to GAAP measures are provided in the accompanying tables.