BlackLine’s Q2 results were met with a negative reaction from the market, despite revenue and non-GAAP profitability exceeding Wall Street expectations. Management attributed the quarter’s performance to larger deal momentum, a shift toward targeting mid-market and enterprise customers, and the early success of its new platform pricing model. CEO Owen Ryan noted, “We saw significant strength in both the volume and size of net new deals with the average new deal size growing by an impressive 35% year-over-year.” However, the company’s customer count declined, reflecting a deliberate move away from smaller accounts, and some large deals were delayed due to external uncertainties.
Is now the time to buy BL? Find out in our full research report (it’s free).
BlackLine (BL) Q2 CY2025 Highlights:
- Revenue: $172 million vs analyst estimates of $170.8 million (7.2% year-on-year growth, 0.7% beat)
- Adjusted EPS: $0.61 vs analyst estimates of $0.51 (19.7% beat)
- Adjusted Operating Income: $38.01 million vs analyst estimates of $35.93 million (22.1% margin, 5.8% beat)
- The company slightly lifted its revenue guidance for the full year to $700.5 million at the midpoint from $698.5 million
- Management slightly raised its full-year Adjusted EPS guidance to $2.19 at the midpoint
- Operating Margin: 4.4%, up from 1.4% in the same quarter last year
- Customers: 4,451, down from 4,455 in the previous quarter
- Net Revenue Retention Rate: 105%
- Annual Recurring Revenue: $677 million vs analyst estimates of $669.4 million (9.2% year-on-year growth, 1.1% beat)
- Billings: $182.3 million at quarter end, up 10.8% year on year
- Market Capitalization: $3.05 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From BlackLine’s Q2 Earnings Call
- Christopher Quintero (Morgan Stanley) asked about the drivers behind large deal momentum and pipeline strength. CEO Owen Ryan explained that improved go-to-market execution and higher-level conversations with customers about platform capabilities were central to recent wins.
- Robert Oliver (Baird) questioned the adoption rate and customer feedback on the new platform pricing model. CFO Patrick Villanova responded that the model enables more strategic conversations and is seeing increasing adoption, particularly in enterprise deals.
- Koji Ikeda (Bank of America) sought clarity on the CEO transition and the pace of AI adoption in finance. Co-CEO Therese Tucker stressed that while official roles are changing, the strategic focus remains on responsible, auditable AI, which is essential for finance customers.
- Alexander Sklar (Raymond James) asked about improved deal close rates and the impact of new leadership in sales. Ryan highlighted the contributions of the new Chief Commercial Officer and faster implementation timelines, while noting some large deals were delayed for external reasons.
- Jacob Roberge (William Blair) inquired about the first federal agency win and public sector pipeline. SVP Matt Humphries said public sector demand is building, with auditability and productivity as key selling points, and highlighted strong partner relationships as a driver of pipeline growth.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will focus on (1) the pace of Studio360 adoption and commercialization, particularly through SAP and partner channels; (2) execution of public sector and international expansion, including progress toward FedRAMP certification; and (3) sustained improvement in average deal size and customer renewal rates as BlackLine continues to shift its customer mix. The impact of new AI-driven features and upcoming product releases will also be closely monitored.
BlackLine currently trades at $49.40, down from $54.49 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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