BL Q2 2025: Deal Sizes Double as Unlimited-Pricing Wins Surge
- Accelerated Pipeline and Larger Deal Sizes: The Q&A highlighted that recent deals are significantly larger—new wins were cited as roughly 100% larger than departing customers—indicating strong momentum in transforming customer engagements and building a robust pipeline.
- Strategic Adoption of a New Pricing Model: Executives noted that approximately 50% of new wins in Q2 adopted the unlimited user pricing model, driving value-based, transformative conversations rather than mere seat counts and setting the stage for larger, more profitable long-term engagements.
- Expanding Market Reach Including the Public Sector: The company secured its first federal agency win and is building a diverse pipeline across federal, state, and local levels, leveraging strong partner relationships to diversify its revenue sources and tap new growth opportunities.
- Deferred Large Deals Due to Macro Uncertainty: One significant global brand with tight margins deferred their deal amid budget and resource concerns, which could indicate vulnerability to macroeconomic headwinds and impact near-term revenue growth.
- Mixed Adoption of the New Pricing Model: While about half of eligible new logos have adopted the new unlimited user pricing, the remaining customers still operate on the legacy model. This split may dampen the full benefits of the transformative pricing strategy and affect margin expansion.
- Reliance on Partner Channels with Extended Sales Cycles: The company continues to depend heavily on partner relationships and long sales cycles for large, complex deals. Execution risks emerge if these partnerships or extended cycles lead to further delays or stalls, potentially affecting future bookings and pipeline consistency.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Total GAAP Revenue ($USD Millions) | Q3 2025 | $170 to $172 (6% to 7% growth) | $177 to $179 (7% to 8% growth) | raised |
Non-GAAP Operating Margin (%) | Q3 2025 | 20.5% to 21.5% | 20% to 21% (includes 2 points of headwind due to Beyond the Black Conference) | lowered |
Non-GAAP Net Income Attributable to BlackLine ($USD Millions) | Q3 2025 | $38 to $40 | $36 to $38 | lowered |
Non-GAAP EPS ($USD) | Q3 2025 | $0.51 to $0.53 | $0.48 to $0.51 | lowered |
Diluted Weighted Average Shares (Millions) | Q3 2025 | Approximately 78.2 | 77.3 diluted weighted average shares | lowered |
Total GAAP Revenue ($USD Millions) | FY 2025 | $692 to $705 (6% to 8% growth) | $696 to $705 (6.5% to 8% growth) | raised |
Non-GAAP Operating Margin (%) | FY 2025 | 21.5% to 22.5% (up 50 basis points at midpoint vs. prior guidance) | 21.5% to 22.5% | no change |
Non-GAAP Net Income Attributable to BlackLine ($USD Millions) | FY 2025 | $159 to $167 | $159 to $167 | no change |
Non-GAAP EPS ($USD) | FY 2025 | $2.12 to $2.22 | $2.13 to $2.24 | raised |
Diluted Weighted Average Shares (Millions) | FY 2025 | Approximately 77.9 | 77.3 diluted weighted average shares | lowered |
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R&D Cash Flow
Q: Impact of new R&D tax credit?
A: Management expects the new policy to improve free cash flow by about $10,000,000 in the second half, bolstering liquidity as operations mature. -
Large Deal Momentum
Q: How did deal momentum improve?
A: Leaders explained that both delayed deals finally closing and fresh pipeline contributions have increased large‐deal size and volume, driving solid top-line growth. -
Enterprise vs Mid-Market Shift
Q: When will mid‐market phase conclude?
A: They noted that new wins are roughly 100% larger than outgoing accounts, and about two-thirds of the lower mid-market segment is now behind them, pointing to a deliberate shift toward higher-value clients. -
New Pricing Model Impact
Q: How is the new pricing model working?
A: Management described transformative discussions with customers embracing an unlimited user approach, driving higher deal sizes and improved retention, albeit with early adoption still under observation. -
CEO Transition & AI
Q: What shifts with CEO change and AI?
A: They highlighted that the change is more about focusing on customer engagement, while AI adoption will proceed cautiously with strict auditability and consistency as top priorities. -
Close Rates & Bookings
Q: Are all booked deals reflected now?
A: While most deals have closed briskly, a few larger engagements are deferred and expected to boost future RPO and billings, reflecting a measured, disciplined close process. -
SAP Channel Momentum
Q: What’s the SAP channel outlook?
A: The SAP pipeline is building steadily since major SAPPHIRE events, with renewed partner enthusiasm setting the stage for robust contributions later in the year. -
Studio 360 Enhancements
Q: How do Studio 360 upgrades work?
A: Customers receive essential platform capabilities at no extra cost, with premium features – such as custom dashboards and advanced scheduling – available for an additional fee, underpinned by Snowflake for superior data handling. -
Data Connectors Value
Q: What benefit do new connectors add?
A: The introduction of real-time connectors replaces slower FTP methods, ensuring faster, more reliable data integration and smoother operational setups. -
8-Figure Deal Details
Q: How did the 8-figure deal close?
A: The deal was secured through a long-term, trusted partner relationship – not via SAP – underscoring strong market confidence and strategic partner engagement. -
Public Sector Pipeline
Q: What are the public sector learnings?
A: Signing the first federal agency deal validated their approach, with lessons learned driving a building pipeline across federal, state, and local segments, opening a promising new market avenue.
Research analysts covering BLACKLINE.