Sign in
BI

BLACKLINE, INC. (BL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue grew 7% year over year to $0.172B and came in above consensus; non-GAAP operating margin expanded to 22.1% and GAAP operating margin improved to 4.4% . Versus S&P Global consensus, revenue beat ($172.0M vs $170.9M*) and Primary EPS beat ($0.61 vs $0.510*). Values retrieved from S&P Global.
  • KPIs strengthened: billings +11% YoY, RPO $0.944B (+11% YoY), NRR 105%, ARR reached $0.677B (+9% YoY) .
  • Guidance raised: FY25 revenue to $0.696–$0.705B (from $0.692–$0.705B), FY25 non-GAAP operating margin to 21.5–22.5%, and new Q3 guide: revenue $0.177–$0.179B, non-GAAP op margin 20–21%, non-GAAP EPS $0.48–$0.51 .
  • Strategic catalysts: new platform pricing adoption, larger enterprise deal sizes, partner-led wins, and co-CEO transition (Therese Tucker moving to Founder role; Owen Ryan becoming sole CEO) that may focus execution and customer engagement priorities .

What Went Well and What Went Wrong

What Went Well

  • Larger deal momentum and pricing strategy: average new deal size +35% YoY; platform pricing adopted by ~50% of eligible new logos, enabling enterprise-wide transformation discussions .
  • Partner channel leverage: record partner-sourced bookings; multiple large wins in media/entertainment, oil & gas, life sciences, manufacturing, and APAC financials, with pipeline created up 70% YoY .
  • KPI strength and margin discipline: NRR 105%; billings +11%; RPO +11%; non-GAAP gross margin ~80% and non-GAAP operating margin 22% on improved execution and productivity .

Quotes:

  • “It is beginning to feel like the black is back.” – Owen Ryan, Co-CEO (now CEO) .
  • “Studio360 will serve as the strategic foundation for the future of modern finance… powered by Snowflake… enabling big data matching and AgenTic AI offerings.” – Therese Tucker .

What Went Wrong

  • Cash flow softness: operating cash flow fell to $32.3M (from $40.7M YoY); free cash flow fell to $25.4M (from $34.4M YoY), driven by restructuring payments, lower interest income from buybacks, and higher taxes .
  • Renewal rate mixed: aggregate revenue renewal rate was 91% (enterprise healthy, mid-market weaker amid strategic resegmentation toward larger accounts) .
  • Q2 free cash flow margin and EBITDA were below S&P Global consensus (EBITDA actual $20.1M vs $44.8M*), though EBITDA is not a management focus metric; Values retrieved from S&P Global.

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$169.460 $166.931 $172.025
GAAP Operating Margin (%)3.7% 2.1% 4.4%
Non-GAAP Operating Margin (%)18.1% 20.9% 22.1%
GAAP Gross Margin (%)75.6% 75.5% 75.2%
Non-GAAP Gross Margin (%)79.6% 79.6% 79.7%
GAAP Diluted EPS ($)$0.79 $0.10 $0.13
Non-GAAP Diluted EPS ($)$0.47 $0.49 $0.51

Estimates comparison (S&P Global):

MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($USD Millions)166.715*170.857*178.107*
Revenue Actual ($USD Millions)166.931 172.025 178.290 [GetEstimates]*
Primary EPS Consensus Mean ($)0.383*0.510*0.505*
Primary EPS Actual ($)0.49 0.61 0.51 [GetEstimates]*

Values retrieved from S&P Global.

Segment revenue breakdown:

Revenue Component ($USD Millions)Q4 2024Q1 2025Q2 2025
Subscription & Support$160.988 $158.462 $163.027
Professional Services$8.472 $8.469 $8.998
Total Revenue$169.460 $166.931 $172.025

KPIs and forward metrics:

KPIQ4 2024Q1 2025Q2 2025
Customers (#)4,443 4,455 4,451
Users (#)397,477 393,892 389,559
Dollar-Based NRR (%)102% 104% 105%
ARR ($USD Millions)$641 $656 $677
Calculated Billings YoY Growth (%)5% (TTM 6%) 9% 11%
RPO ($USD Millions)n/a$913.2 $944.3
Revenue Renewal Rate (%)96% (ent. 97%, MM 92%) 94% 91% (ent. mid-90s; MM ~80s)
SAP % of Revenue26% 26% 26%

Cash flow:

Cash Flow ($USD Millions)Q4 2024Q1 2025Q2 2025
Operating Cash Flow$43.794 $46.742 $32.345
Free Cash Flow$36.525 $32.624 $25.385

Share repurchases:

BuybacksQ1 2025Q2 2025
Shares Repurchased (M)~0.92 ~0.80
Amount ($USD Millions)~$46 ~$43.3
Remaining Authorization ($USD Millions)~$154.5 (at 3/31/25) ~$111.2 (at 6/30/25)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q3 2025n/a$177–$179 New
Non-GAAP Operating Margin (%)Q3 2025n/a20–21 New
Non-GAAP Net Income ($USD Millions)Q3 2025n/a$36–$38 New
Non-GAAP EPS ($)Q3 2025n/a$0.48–$0.51 (77.3M diluted shares) New
Revenue ($USD Millions)FY 2025$692–$705 $696–$705 Raised (low end)
Non-GAAP Operating Margin (%)FY 202521.5–22.5 21.5–22.5 Maintained (raised vs Feb prior)
Non-GAAP Net Income ($USD Millions)FY 2025$159–$167 $159–$167 Maintained
Non-GAAP EPS ($)FY 2025$2.12–$2.22 (77.9M diluted shares) $2.13–$2.24 (77.3M diluted shares) Raised (range/midpoint)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
AI/Technology (Studio360, Agentic AI, Snowflake connectors)Launch momentum; Snowflake data share; PQ with SAP SolEx; Workday/Oracle connectors roadmap Enhanced Studio360; >1,100 customers leveraging Snowflake; big data matching; connectors (Snowflake sharing GA, Oracle Fusion EA; Workday/D365 in H2); agentic summarization/querying; GCP migration nearing completion Accelerating adoption and commercialization
Pricing & PackagingUnlimited pricing launched; pilot; plan to roll out over 3–4 years 50% of eligible new logos adopted; larger transformative conversations; mid-market targeting for unlimited; users metric declines due to platform pricing Adoption ahead of plan; accretive LT growth
Supply Chain/Tariffs/MacroFX headwinds; deal velocity slowed late Q4; macro caution in guide Isolated large-deal deferrals; pipeline robust; some start dates deferred; guidance accounts for “Beyond the Black” 2pt margin headwind and strategic investments Resilient pipeline; prudent guide
Product Performance (Intercompany, Invoice-to-Cash, FRA)I2C leader; intercompany and FRA enhancements; strategic products 33% of sales in Q4 Strategic products 30% of sales; strength in intercompany, invoice-to-cash, transaction matching; faster implementations; time-to-value improved Broad-based strength; faster time-to-value
Regional TrendsInternational pipeline grew; Japan and Europe traction; SAP channel alignment APAC: largest-ever win (top-3 AUS bank); top-3 JP bank win; Europe oil & gas win; U.S. public sector first federal agency Expanding footprint with larger logos
Public Sector (FedRAMP)FedRAMP on plan; reseller/SI motions; minimal FY25 revenue assumed First federal agency signed; pipeline building across federal, state, local; secure instance build-out progressing Early traction; 2026+ growth lever

Management Commentary

  • Strategic evolution: “Our strategic shift to a platform company serving the Office of the CFO is driving accelerated success… average new deal size growing by an impressive 35% year over year.” – Owen Ryan .
  • Platform pricing value: “It was a much more strategic conversation… giving access to the platform to everyone.” – Patrick Villanova .
  • Studio360 foundation: “Studio360 will serve as the strategic foundation… integrated AI-powered platform with accurate data at its core.” – Therese Tucker .
  • Co-CEO transition: “Therese will dedicate more time… the board has entrusted me as BlackLine’s sole CEO.” – Owen Ryan; Tucker moves to Founder role, staying active with major customers and Europe .

Q&A Highlights

  • Pricing adoption and impact: Unlimited platform pricing is ahead of plan, shifting conversations to transformation vs seat counts; targeted to upper mid-market and enterprise; supports consumption and cross-functional access .
  • Large deals and pipeline: Some Q2 large deals deferred but overall pipeline grew strongly; stronger close rates; discipline and rigor under new CCO driving execution .
  • SAP partnership: Alignment on incentives and packaging; finance-first entry point; expect momentum to translate to bookings in Q4 and into next year .
  • Public sector: First federal agency win, lessons applied; growing appetite for auditability and productivity; pipeline across federal/state/local via partners .
  • Duration and renewals: Multiyear renewals rising; long-term RPO +15%; strategy prioritizes larger customers on transformation journeys .

Estimates Context

  • Revenue beat vs consensus: $172.025M actual vs $170.857M consensus in Q2 2025*; Values retrieved from S&P Global.
  • Primary EPS beat vs consensus: $0.61 actual (basic non-GAAP EPS per reconciliation) vs $0.510 consensus in Q2 2025*; Values retrieved from S&P Global. Reconciliation shows diluted non-GAAP EPS of $0.51 .
  • EBITDA missed: $20.064M actual vs $44.798M consensus Q2 2025*, a metric not emphasized by management; Values retrieved from S&P Global.
  • Implications: Estimate revisions likely to reflect stronger revenue/margin trajectory, pricing/model adoption tailwinds, but EBITDA modeling may need alignment with company’s non-GAAP operating focus .

Key Takeaways for Investors

  • Execution turning point: Platform strategy, pricing, partner leverage, and faster time-to-value are translating into higher-quality pipeline and margin expansion .
  • Durable growth levers: Strategic products (intercompany, invoice-to-cash, FRA), Studio360 commercialization with SAP, and regional large-logo wins support mid-term reacceleration .
  • Guidance credible and balanced: FY25 guide raised; Q3 guide embeds investment headwinds (conference) and prudent margin targets, with clear transparency from CFO .
  • Mix shift benefits: Intentional de-emphasis of lower mid-market improves deal size and profitability; monitor near-term renewal rate optics as strategy progresses .
  • Cash flow cadence: Near-term FCF lower due to restructuring, taxes, reduced interest income from buybacks; management expects FCF to outpace operating income in H2 .
  • Governance and leadership: Co-CEO transition clarifies roles—Ryan focused on execution, Tucker on customer/Europe; Board enhancements add seasoned independent oversight .
  • Trading setup: Near-term catalysts include September “Beyond the Black” product launches, SAP Q4 seasonality, and continued evidence of pricing adoption; watch for large-deal timing and public sector milestones .

Values retrieved from S&P Global where marked with an asterisk (*).