BlackLine (BL) investor relations material

Strategic transformation and innovation

• Undertook a major strategic refresh three years ago, focusing on selective markets, industries, and partners, which revitalized innovation and platform expansion, especially around financial close and AI capabilities.

• Introduced the Finance Control Console for AI governance in the office of the CFO, to be showcased at the BeyondTheBlack conference in November.

• Shifted AI adoption from opt-in to opt-out, resulting in strong customer engagement and positive usage trends across the platform.

• All platform products are now AI-enabled or AI-native, with further innovations and announcements planned.

• Product development is closely aligned with customer and partner feedback, using prototyping and early adopter programs.

Demand environment and deal cycle dynamics

• Pipeline is robust, especially in mega enterprise and upper mid-market segments, but deal cycles have lengthened due to build-vs-buy debates and increased scrutiny around AI.

• Larger companies are involving more stakeholders, including CIOs, legal officers, and AI czars, adding complexity to procurement.

• Proactive education on AI governance and build-vs-buy has helped compress deal slippage, with most delayed large deals now closed.

• Deal cycle improvements are evident, with slippage rates decreasing and sales/customer success teams better enabled.

• Third-party studies now validate the ROI of buying versus building, aiding in deal cycle compression.

Monetization and growth outlook

• Platform pricing initiative aims to increase eligible ARR from 11% to 25% by year-end, with strong adoption among new customers and growing traction in the existing base.

• Monetization is shifting to an outcome-based model, charging for transactions performed by AI agents rather than tokens, aligning with CFO preferences.

• Initial monetization comes from platform uplift, followed by incremental AI-based consumption revenue as customers move beyond free tiers.

• Growth drivers for 2027 include platform conversions, FedRAMP and KSA opportunities, agent consumption, and reduced churn from the lower mid-market.

• Improved customer engagement and stickier products are expected to further reduce attrition and support ARR growth.