BlackLine, Inc. (NASDAQ:BL) Q4 2023 Earnings Call Transcript

BlackLine, Inc. (NASDAQ:BL) Q4 2023 Earnings Call Transcript February 14, 2024

BlackLine, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, and thank you for standing by. Welcome to BlackLine’s Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please note that today’s conference is being recorded. I will now hand the conference over to Matt Humphries, Vice President of Investor Relations. Please go ahead.

Matt Humphries: Good afternoon, and thank you for joining us today. With me on the call are Owen Ryan and Therese Tucker, Co-Chief Executive Officers of BlackLine; as well as Mark Partin, Chief Financial Officer. Before we get started, I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans, objectives and expected performance, in particular our guidance for Q1 and full-year 2023, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this call. While we believe any forward-looking statements made during the call are reasonable, actual results could differ materially, as these statements are based on our current expectations as of today and are subject to risks and uncertainties, including those stated in our periodic reports filed with the Securities and Exchange Commission, in particular our Form 10-K and Form 10-Q.

We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. All comparisons we make on the call today relate to the corresponding period of last year, unless otherwise noted. Finally, unless otherwise stated, our financial measures disclosed on this call will be non-GAAP. A discussion of these non-GAAP financial measures and information regarding reconciliations of our historical GAAP versus non-GAAP results is currently available in our earnings release, which may be found on our Investor Relations website at investors.blackline.com or in our Form 8-K filed with the SEC today. Now, I’ll turn the call over to BlackLine’s Co-Chief Executive Officer, Owen Ryan.

Owen?

Owen Ryan: Thank you, Matt, and good afternoon, everyone. Thank you all for joining us today. We exceeded revenue and profitability expectations in the fourth quarter with $156 million in total revenue and $52 million in non-GAAP net income. Notably, we ended the year with $603 million in annual recurring revenue or ARR. Our performance this quarter was driven by continued success with partners, including our SolEx relationship and consistent sales performance from our mid-market teams. We also saw higher close rates and improvement in sales force productivity this quarter. Last year, Therese and I took the reins at BlackLine and embarked on a journey to refresh our long-term strategy and vision. Together, we spent a great deal of time working across the business, speaking with customers, and reenergizing relationships with our most trusted and strategic partners.

On the back of these efforts, we took action to implement a more disciplined and refined corporate strategy and activate a new operating model for 2024. Our go forward strategy is simple. We plan to lead with our solutions across our markets, financial close, FRA and consolidation, intercompany accounting, and invoice to cash. One note here, invoice to cash is the new name for our end-to-end solutions, which contains our electronic invoicing presentment and payment. as well as accounts receivable automation solutions. Over the longer term, we expect to either build or acquire additional capabilities that can deepen and extend our platform consistent with the highest priorities within the office of the CFO. To support this, we’re becoming a more partner powered organization, harnessing the deep and embedded relationships our partners have with key decision makers at our customers.

We are also prioritizing certain markets and geographies that have the highest long-term potential for success. As we move through this year and into next, we are implementing an industry-equipped sales motion that leverages our deep domain expertise and brand permission within select industries and sub industries to capture further market share. We also expect to be more disciplined in our customer targeting, especially in the mid-market, where today we have a much greater understanding of what they need, what works, and how to help them. We will focus on growth-oriented companies who can capitalize on BlackLine solutions as they execute their digital finance transformation. In the near-term, we anticipate certain smaller customers who do not see the value in transforming their business potential by choose to discontinue with us.

While I hate to lose customers, this is the best strategy for the long-term health and success of both our business and for our customers with different priorities or value drivers. To execute our refresh strategy, we implemented a new operating model. This model is solution-led and aligned to our typical buyer profiles within the office of the CFO. Each solution pillar across financial close, consolidation, invoice-to-cash, an intercompany, has a defined leader who’s directly responsible and accountable for driving revenue growth while ensuring that the voice of the customers prioritize in all aspects of innovation and product development. They are working in high collaboration with our go-to-market organization to drive sales growth and guide our customers on their journeys with BlackLine.

Over time, the additional accountability and rigor across our business is expected to support the results we demand. Now let’s review the fourth quarter, particularly around the five key areas I continue to prioritize. First, on execution, our go-to-market team’s performance was solid this quarter. We signed a number of large global enterprise deals giving us early indications that our partner-powered approach is building momentum. In fact, the number of BlackLine customers with 1 million or more in ARR increased 33% to 64 customers. We also saw consistent sales performance from our mid-market teams, landing some larger customers while experiencing further adoption of our FRA and consolidation solution, which is a true differentiator in the mid-market.

We also saw higher close rates and improvement in sales force productivity this quarter. Next, our market message and branding are beginning to amplify and surround our new operating model, led in part by our new Chief Marketing Officer who recently joined the company. Our teams are beginning to drive a unified message that addresses not just the unique buyer profiles around each of our solution pillars, but also elevates our platform to key decision makers both directly and via our partner network. We will have several customer events this year beginning with our Beyond the Black EMEA event in late March, which will give us additional opportunities to listen and engaged with our customers and partners. Our focus in the fourth quarter and for 2024 is on ensuring our customers receive the value of the BlackLine promise, maximizing both value and ROI.

Our teams are working closely with key customers to drive further adoption of our platform via optimization and success plans. We are seeing promising early indicators that customers are reengaging with us, and we are progressing discussions towards additional use cases that can be leveraged for future cross-sell opportunities. At the same time, this close engagement enables us to gather detailed feedback on our solutions and identify future use cases for our product roadmap. Our distribution efforts and focus on partners is seeing early signs of success as mentioned. We will cover examples of this shortly. But at a high-level, more consistent success here should be supportive of better close and competitive win rates and larger deal sizes.

We also expect a more efficient sales cycle given the influence these large partners have on key decision makers within the office of the CFO. Finally, on retention, we saw consistency in our renewal rates versus the third quarter and experienced a slight improvement in net revenue retention or NRR. While we are pleased with these outcomes, we are continuing to double down on our efforts to improve engagement, adoption and satisfaction for our customers. In the year ahead, our teams will be focused on implementing process optimizations with existing customers and identifying those in our base that could benefit from deepening their use of existing solutions and broadening the adoption of new ones to drive digital finance transformation. Our operating model, which places an elevated level of accountability on customer success, is a core part of our go forward efforts to improve outcomes for our customers and ultimately for BlackLine.

Despite ongoing market uncertainty, which we expect to continue in 2024, we closed several large global deals including numerous competitive takeaways in our enterprise business. In North America, for example, we signed a leading defense and aerospace company via our SolEx partnership, while working hand in hand with a major partner. This multi solution deal including our intercompany solution was in advance of an S/4HANA conversion and will support their move as they transition over the coming years. We also signed the world’s largest retail and health insurance company as part of a competitive replacement. The customer is in the process of migrating a large acquisition from Oracle to SAP and needed a partner that could support them as they rapidly grow and scale.

Importantly, our partner in the deal was crucial in validating BlackLine as the provider of choice and demonstrated not just why the customer should change, but how it can be done successfully to deliver real value for the long-term. In Germany, we signed a large multi-solution SolEX deal with a leading global retailer and one of the world’s largest private companies. Working with a team of leading consulting firms, we jointly showcased why BlackLine was the only choice to meet the scale and connectivity needs of their global business, while supporting their long-term transformation vision. In APAC, we expanded our relationship with the top three metals and mining customer via our SolEX partnership. As part of a shift from an outsourced shared services model to an insource model, the company saw a long-term partner capable of helping them realize their vision of true digital finance transformation.

Leveraging our BlackLine 9 optimization strategy, we were able to demonstrate not just why they should be modernizing their processes, but how, giving them a blueprint for success and a much better appreciation of the value and ROI they could achieve. A competitive deal from the start, BlackLine’s differentiation via deep automation across areas like journals was key to supporting the overall business case. In the middle market, we saw a number of large deals close as we reshape our focus in this fast growing market. In Canada, we signed a leading Canadian financial services company to a multi-solution deal to address the growing complexity and lack of automation across their business processes. Additionally, we signed a leading healthcare focused real estate firm to a multi-solution deal, leveraging our partners’ insight and validation to support another competitive replacement.

In addition, the company was looking beyond just their closed process and towards consolidation, which was another pain point. They wanted real time visibility on their financials and our FRA and consolidation solution was the perfect complement and another powerful differentiator for BlackLine. Finally, we had a great year from our invoice-to-cash business as customers recognize the need for improved control and visibility of working capital and cash management in a higher interest rate environment. Due to the changing regulatory landscape, we are beginning to see interest building in electronic invoicing from customers and prospects alike. From a deal perspective, we signed several deals this quarter, both with new and existing customers.

In a highly competitive deal, we signed HH Global, a leading tech-enabled creative production and procurement firm based in Europe. The company was looking to modernize their collections and dispute processes as well as their overall customer experience. They were also interested in a partner that has EIPP capabilities they could leverage to further advance their vision of real transformation across their business, a great future opportunity to continue expanding our partnership. With that, I will turn it over to Therese to discuss how we’re driving innovation across our business this year. Therese?

Therese Tucker: Thank you, Owen. BlackLine has a proven history of innovation, which has been core to our culture, our strategy and our success since day one. In fact, in 2007, we defined and created the financial closed market that exists today, paving the way for companies to rethink how accounting work gets done. And since then, thousands of customers, some of the biggest brands in the world have put their trust in BlackLine to deliver real value, all while handling their most mission critical accounting and finance processes. We were the first company to develop and offer a commercial intercompany accounting solution. This, again, created another market, one which lacks modern solutions to address some of the most complex accounting problems that exist.

And more recently, we announced how we are addressing real-time consolidation via our financial reporting and analytics solution, reshaping another market to support real-time business operations. And as we look ahead to this year, we expect to formally announce the release of the BlackLine Accounting Studio, a command and control orchestration layer for the thousands of finance and accounting processes occurring across a disjointed and multi ERP financial landscape. Building on this, the evolution of technology in recent years has provided us the opportunity to do things which weren’t possible before. It has unlocked capabilities and tools that can propel our vision forward and deliver unprecedented value for our customers. Simultaneously, customer data volumes are surging, processes are growing more complex, additional regulations are being implemented and talent shortages in accounting and finance are becoming even more acute.

Collectively, these factors create a convergence of challenges for customers. However, amidst these lies a substantial opportunity for an industry leader like BlackLine to innovate and to lead. And I am excited that our recently announced Chief Information Officer is here to support and accelerate our efforts. A perfect example of this opportunity is with AI in combination with the massive amounts of data that is stored on BlackLine’s SaaS platform. But how are we going to do this exactly? We think of this as a two-part strategy. First, we are embedding AI across our existing solutions. Our solutions, once embedded with AI, will enable our customers to be more productive, more efficient, and in the end, make their jobs and their lives easier.

In our intercompany financial management solution, we’re already working with customers on our predictive guidance tool that proactively informs the customer when transactional data will likely fail. A customer can fix and identified issue early before it becomes a greater problem later. This unique ability to operate comprehensive AI-enabled, end to end, intercompany financial management solution in a market lacking maturity and competition, is a powerful component of our long-term innovation strategy. Similarly, in invoice-to-cash, we are embedding AI to provide visibility and intelligence on customer payment trends before they lend their clients’ money or offer them a trade credit, giving them the insight upfront before creating future problems.

So much time and resources are wasted across the invoice-to-cash process, chasing down late paying customers, or having to write off accounts and renegotiate terms after the fact. Our AI-embedded solutions we’ll have the ability to help prevent these things from occurring beforehand and thereby allowing our customers to simply run a better business. It’s why we know that embedding these tools across our platform is important and powerful. And in the financial close, we are planning to deliver generative AI document summaries as part of the account reconciliation process. This time saving feature can remove a large amount of manual work from a user’s process and allow them to focus on exceptions instead, freeing users from the mundane transactional work and allowing them to be more strategic in their roles.

In the end, this can lead to a faster close, a better user experience, and can improve the overall accuracy of the reconciliation process. The second part of our strategy is that we expect to offer new AI-based solutions for our customers to leverage. An example of this is our planned journal risk analyzer. This solution will be able to review, analyze and model millions of journal entries to proactively identify instances of audit risk, areas of inaccurate data ingestion or anomalies that may be associated with suboptimal processes. By giving customers the ability to identify these anomalies early, they can address issues before they become more problematic, resulting in a simpler audit process with lower cost and a lower burden. Make no mistake, this is a pivotal year for BlackLine when it comes to innovation.

We expect to progress rapidly as we digest and act on the input and feedback from our customer base. BlackLine Accounting Studio is a great example of this. We put its release on pause last year. We spent additional time working hand-in-hand with our early adopters and partners, understanding what worked and what didn’t. We took that feedback and the cocreation opportunity to reimagine the solution into something even more powerful. And we believe that when launched, BlackLine Accounting Studio will be a real differentiator in the office of the CFO and an important part of our platform. Similarly, we are rapidly integrating our EIPP solution with our comprehensive suite of accounts receivable automation solutions. Recent developments in the market showcase a heightened interest in EIPP assets given the tailwinds in e-invoicing adoption, driven primarily by regulatory changes.

We take pride in our proactive approach recognizing these trends early on and expect that through our vision, innovation and strategy, we will be able to capitalize on these market dynamics. To close, innovation is the agenda at BlackLine. Everything begins and ends with the customer, and BlackLine is the partner that gives them the tools, the blueprint and the confidence to transform their processes and ultimately their businesses. Last year, we dedicated significant effort to evolve and refine our teams and our innovation strategy. Now in 2024, the focus shifts to execution. With that, I’d like to turn it over to Mark Partin, who will review our financial results and provide some additional color on our guidance. Mark?

Mark Partin : Thank you, Therese. Our results this past quarter demonstrate that despite a market environment such as this, the predictability and leverage inherent in our model can support continued profitable growth. As we look ahead, accelerating innovation and operational execution are the priorities of BlackLine and those initiatives will be driven by our refreshed strategy and operating model. Now, let’s review the financial results for the fourth quarter in a bit more detail. Total revenue grew to $156 million, up 11% with subscription revenue growing 12%. Services revenue declined 5%, as we continue to align to a more efficient servicing model. Calculated billings growth was 14% with trailing 12 month billings growth of 13%.

Remaining performance obligations or RPO was up 9% with current RPO growing 13%. We closed the quarter with total annual recurring revenue or ARR of $603 million, up 13%. We added 30 net new customers in the quarter, bringing our total customer count at the end of the year to 4,398. While we saw a healthy growth customer adds, we also experienced a higher volume of churn from smaller customers. In our go-forward strategy, which Owen spoke to earlier, it is reasonable to assume some additional churn of these smaller customers as we move through 2024. Our revenue renewal rate was 94%, consistent with prior quarter and net retention rate or NRR was 106%. Strategic product performance represented 24% of sales, driven by transaction matching, account receivable automation and FRA and consolidation.

Partners were involved in 73% of large new and expansion deals this quarter. SolEX performance continues to grow well ahead of our total revenue growth rate and had a solid show in this quarter. In Q4, SAP partnership revenue represented 25% of total revenue. Turning to margin, our non-GAAP gross margin was 80% with non-GAAP subscription gross margin of 83%, as we remain disciplined on expense optimization within our cloud teams. Non-GAAP operating margin was 25%, driven by a combination of gross margin performance, sales force efficiency and proactive expense management. Non-GAAP net income attributable to BlackLine was $52 million, representing a 33% non-GAAP net income margin. Our operating income outperformance and net interest income drove strength on the bottom line.

We generated $42 million in operating cash flow and $35 million in free cash flow in the quarter, with a free cash flow margin of 23%. Finally, we ended the quarter with over $1.2 billion in cash, cash equivalents and marketable securities. As we contemplate our guidance for 2024, we are not expecting a material improvement in the market environment. While we are cautiously optimistic that a higher level of visibility and clarity will emerge later this year, we’ve not embedded that into our guide. Combined with the implementation of our new operating model this year, we are approaching 2024 with an appropriately pragmatic view and outlook. We are also introducing non-GAAP operating margin as an additional guidance metric this year, primarily to align our guidance to our internal metrics and provide shareholders with an extra layer of visibility.

We also believe the addition of non-GAAP operating margin will provide more clarity around the progress we are making on our profitable growth. Lastly, I want to make a brief comment on our revenue guidance. As discussed, we are moving forward with a more partner powered approach via our operating model, with the expectation that partners will take on an incremental implementation and professional services projects. The net result is that in 2024, we expect to see a one point headwind to total revenue growth with services revenue growth flat to down mid-single-digits versus 2023. The services revenue headwind is expected to become more acute as we move through the year. Conversely, we expect to see subscription revenue growth trend generally above the midpoint of our total revenue guidance in each quarter and for the full year.

With that being said, for the first quarter of 2024, we expect total GAAP revenue to be in the range of $154 million to $156 million, representing approximately 11% to 12% growth. We expect to report a non-GAAP operating margin of 15% to 16%, and we expect to report non-GAAP net income attributable to BlackLine in the range of $34 million to $36 million or $0.25 to $0.48 on a per share basis. Our share count is expected to be approximately 75.8 million diluted weighted average shares. For the full year 2024, we expect total GAAP revenue to be in the range of $637.5 million to $649.5 million, representing 8% to 10% growth. We expect to report non-GAAP operating margin of 17% to 18%. We expect to report non-GAAP net income attributable to BlackLine of $153 million to $163 million or $2.01 to $2.14 on a per share basis.

Our share count is expected to be approximately 76 million diluted weighted average shares. With that, I’ll now ask the operator to open the discussion to take your questions.

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Q&A Session

Operator: [Operator Instructions] And our first question coming from the line of Rob Oliver with Baird.

Rob Oliver: For Owen or for Therese, a question is for you. You guys have now been back in charge here almost a year. And I know, Owen, talking with you, there were a handful of key strategic initiatives you had going after that SI channel, SI relationships, SAP, the sales reorg. I think what we’re hearing from you is you’ve made real progress on all three of those. Can you maybe rank order where you’re seeing the most traction with those and where we expect to first see that kind of manifest in a turn in the revenue growth? And I had a quick follow-up, but if I’m limited to one, I’ll hop back in the queue.

Owen Ryan: First, I would say, while we’re very proud of the progress we’ve made. We’re not satisfied with the progress we’ve made. There’s still much more for us to do as an organization. I think of the three things that you’ve highlighted there from on our progress with systems integrators, the sales reorganization and SAP. I think we feel like we’ve made progress amongst in between all three of them at this particular point in time. I think for us, we’re starting to see some real progress internally with the focus and discipline from our BDRs to our sales teams to the account management to the customer service teams, all working much more closely together, and we’re very, very encouraged by that. Obviously, we started the call with the comment about the strength with SAP.

This past quarter, we cited a number of examples. We usually don’t just use those, but they were very powerful and very important given what’s taken place. And so we’re very encouraged by what’s going on there. And recently SAPs, I believe, identified a new leader of their Office of the CFO program, which we’re very excited about working more closely with that team. And then on the systems integrators, we’re spending a lot of time with them. I think we’re very — we feel very bullish about their commitment. We’ve got good joint account plans that we worked our way through from covering everything off of how we’ll go to market together, how do we make sure our customers are better implemented and adopted. There’s a number of those folks that are working closely with Therese, providing feedback around the products as well as what we could potentially be doing in our industry vertical.

So net-net, hard for me to rank all of them from a prioritization perspective. It’s like naming your favorite child. But net-net, I think we feel pretty good about the progress we’re making along all of those areas.

Rob Oliver: And if I might just quickly, just on the invoice-to-cash side, it sounds like you guys are taking this opportunity to think strategically about how to package and price your products potentially differently. And while I don’t expect you to disclose anything new here today if it’s in the works. Is that right? And how should we be thinking about kind of the way something like invoice-to-cash or other products if they’re packaged or priced differently could start to impact maybe ARR per customer? Thank you.

Therese Tucker: Thanks, Rob. I’ll jump in on this one. I think pricing is one of those things that’s always an ongoing sort of experiment because ultimately what you want to do is you want to be able to share in the value that you’re delivering to your customers, right? And I think we all know that user based pricing, if you’re doing a good job, you’re basically phasing out more users. So in terms of our strategic products, we are definitely looking at other ways of doing pricing. We’ve got our matching rate plans and other sort of types of pricing that are related to the complexity and the value that we deliver to our customers. So yes, we are looking at how to handle this invoice-to-cash a little bit differently and but nothing to announce today.

Operator: And our next question coming from the line of Alexander Sklar with Raymond James.

Alexander Sklar: Owen, just starting with your comments around the partner success and the improved win rates, better close rates. Is there any way you can frame how much of that was from a stabilizing or improving macro that you saw in the fourth quarter versus the early benefits from the strategic initiatives that you just spoke to in your answer to Rob’s question?

Owen Ryan: Yes. I think it’s a really good question. I don’t know that we’re sitting here today saying, wow, we’ve gotten any kind of tailwind yet from the macro. In fact, I would say it still feels a little bit more like a headwind than a tailwind. I think the thing that I’m most proud of and we are proud of is the execution of our team. So we feel good about our close rate for opportunities both in the enterprise space as well as the mid-market where our teams executed we feel quite well, particularly on those customers we chose to pursue in the mid-market. So, I would say, not really a lot of support yet out of the macro, but we like the fact that our win rate feels pretty good for what we’re trying to accomplish.

Alexander Sklar: And then, Mark, just following up on the sales and marketing intensity, it’s kind of been operating a bit below your medium and long-term targets from 15 months ago. I realize it’s a long time in this macro, but how are you thinking about hiring from here for your go-to-market team and what’s factored into the 2024 outlook in terms of sales and marketing?

Mark Partin: Thanks, Alex. We started this year with sufficient capacity to expand and meet the market additional demand if and when it comes. We are operating very efficiently in that part of the organization, part of the leadership, but most of it just related to the intensity around the operating model changes and sort of some of the key aspects of driving greater sales rep productivity. Our plan for increasing capacity at a stage most likely after 2024 is to make sure that we have the best sales people at the right place focused on the customer demand if and as we see it come on board.

Alexander Sklar: Got it. Just to make sure you’re clear on that, so those medium-term targets still are relevant after ’24 as you see it just in this interim period. We’re still focused on getting those operating model changes in place?

Mark Partin: That’s right. Our sales and marketing is below the mid-term target model, which is your point. At this level of demand, we think it’s at the right optimum level.

Operator: And our next Question coming from the line of Matthew VanVliet with BTIG. Your line is open.

Matthew VanVliet: Good afternoon. Thanks for taking the question. I guess when you’re looking at the new refresh strategy you laid out. Curious in terms of what kind of timing you’re expecting that to sort of play out? How much of that is going to encompass some meaningful sort of price increases or at least ASP increases with the additional functionality you are talking about? And then lastly, how much of the ’24 guide or how much churn from the lower end customers is contemplated within that ’24 guide? Thanks.

Owen Ryan: I think Therese and I may tag team a little bit on the answer to this question. I think just from a strategic perspective, what we’re trying to do on pricing, Therese already gave a little bit of a hint to. We are taking a very hard look at the way we price the value that we deliver for our customers and that’s probably the biggest thing we’re trying to make sure is that, we deliver value so that our customers feel like they are getting an appropriate return on where they’re spending their money with us. There is obviously, Therese intimated a little bit about this is sort of the year of innovation for BlackLine again. I’m certainly really excited about some of the things she and the team are driving and we can’t wait to share more of that over the course of the year and we’re working through how to begin to sort of reprice that additional value that our customers will be achieving.

I think the thing just on the churn, if you will, for the smaller customers that was asked, what you recognized is sort of, there are a number of customers that we’ve been much more proactive in engaging with trying to figure out where they want to go on this journey and if BlackLine can really help them to succeed with what they’re looking to do. I think what we expect is, we’ll have some conversations with customers that may opt out, if you will, or will help them opt out because if they’re not going to do the things that are necessary to drive the kind of transformation that we think is appropriate, they’re not going to sort of really take advantage of the value that we have to offer them, then better off just sort of going our separate ways.

Mark will probably give a little bit more guidance as to what that might mean from a churn and attrition perspective. But remember, these tend to be much smaller accounts. And so as a percentage of ACV, not particularly significant, but obviously from a customer count perspective, it sticks out a little bit more.

Operator: And our next question coming from the line of Dan Jester with BMO Capital Markets.

Dan Jester: Maybe just to build off that last train of thought. Can you spend a few minutes talking about sort of the decision to expand in different verticals? Is this again about of optimizing the ROI for the customers? As you think about that sort of keep your push into verticals, is this going to affect sort of how you go to market in 2024? Or is this sort of a longer term initiative that we should expect to play out over time?

Owen Ryan: I love that question, so thank you, because it’s near and dear to, I think what we’re trying to accomplish here at BlackLine. I think one of the untapped crown jewels we had in this organization was our customer base. And what we’re being smarter about now is understanding who our customers are in certain industries and then sub industries. And then where might the white space be for companies that we don’t yet serve, and that’s pretty obvious of where you might want to go next. I think the real thing that I’m excited to watch our team working with Therese and our partners and others on is the fact that we have companies in the same industry who are using our product for very different reasons and sort of being able to compare what’s company A doing with company B versus company C, and then taking that insight and then being able to work with our partners and our product team and our sales teams, account management to go back to the customer and say, here’s where you can find more value because your peer companies are also doing things very similar to this.

And I think what it drives is much more value for our customer. It makes us much more efficient in what we’re trying to do to help our customers be successful. It should make us more efficient, if you will. There is no more Johnny Appleseed approach to going after the marketplace. It’s much more targeted around what we’re trying to do. And early indications are very, very positive. Mark and I were on a call with one of our Asia Pacific teams yesterday, and they have a very large pursuit they’re looking at, and we were just sharing with the similar kind of customers that we had both in Europe and North America that we could bring to this team over in Asia Pac. And I think that’s going to wind up in the win column in the not too distant future because of being able to, again, leverage what we have internally that no one else has, to my knowledge, that we could bring to ,to our customers.

And I think that’s a real — going to be a real boom for our customers over the coming years. We’ve already started it in 2024, so we have five industries that are already in development, and we’ll keep driving that as quickly as we can throughout the course of the year.