Welcome everyone, and thanks for joining us today. Great to see you all in person, and I hope you're enjoying BeyondTheBlack event today. For For those of you watching via webcast, thanks for taking time to learn more about BlackLine. We crafted a great agenda, and we're gonna walk through our business and the opportunities ahead for BlackLine. First, we're gonna start with Marc Huffman, BlackLine's Chief Executive Officer. He's gonna talk about our markets and our vision. From there, we're gonna hear from Mark Woodhams, who'll talk about our go-to-market engine. Lisa is gonna come up and talk about why customer success is such a differentiator for BlackLine. We'll take a short break, and then Pete Hirsch is gonna come on stage and outline our product and technology strategy. Then from there, we're gonna turn it over to Mike Polaha, a new face to many of you investors, but an expert on our strategic product portfolio, especially intercompany. Take another break, and then we're gonna bring up some fantastic customers and our Chief Accounting Officer, Patrick Villanova. Following him, Mark Partin, BlackLine's Chief Financial Officer, to walk through our financial model. Then one final quick break, and we're gonna bring all of our speakers up today on stage for our Q&A session. We'll close out the day. Of course, no investor day would be complete without a few cautionary statements. We are gonna be making some forward-looking statements today. If you have any questions on our risk factors, please reference our most recently filed Form 10-Q on November fourth or our Form 10-K. A few housekeeping items for the audience. Please silence your cell phones and your laptops, and then please hold all questions to the end of the day in our Q&A session. With that, let me introduce Marc Huffman, BlackLine's Chief Executive Officer. Thank you. Oh, you guys do clap. Thank you. I'm gonna try not to yell at you all because it's a small room. I have a big voice, and coming off the energetic stage this morning, it's easy to just project. Thank you and thank you for joining us. Hopefully, you got a chance to see the announcements we made this morning, listen to and learn a lot about some customer stories. It's always so rewarding to have our ability to tell a story about BlackLine through the success of those customers. Those modern accounting award winners each have just really unique success. It gave you the opportunity to tangibly see how BlackLine can impact individuals. People get emotional about the change in the work that they're engineering for their teams, and you saw that, I think, in a couple of unique examples. Very, very cool for us to do and then obviously a lot of fun. Thousands of people tuning in. Obviously, a large audience there full of customers, prospects, partners, yourselves, and then you know, large audience in the digital world as well. That was BeyondTheBlack. I'll start by giving some of you a reminder and refresher on just what we do and where we play, starting with BlackLine's market in the office of the CFO. We purposely focus our efforts historically on the role of the controller and all of the processes that exist right there underneath the controller's mandate. We have this view towards the broader operations and the beneficiaries that are involved in the office of the CFO, which I think is really important. Those data links that come underneath is really, really critical for us. The more data that comes into the BlackLine system validates just how critical the real estate that we own in the financial close is. Starting the company focused on owning the financial close and creating the category leader with the class of customers that hopefully you had a chance to see and hear in the main stage room this morning, is strategic position for us. Everything that gets accumulated in an organization's business, all the data that works its way from transaction systems, recording things, flows through the arteries of an organization, and it all comes to rest someplace in the financial statements, and it goes through the financial close, where BlackLine has the ability to serve those customers really successfully, as well as start to create adjacencies where we feel we have permission to better serve those organizations. When you do that with getting upstream a little bit with our focus on cash application and accounts receivable automation, we think that's strategic and broadens our perspective into other parts of the organization, as well as the strategic move into the top side or creation of intercompany transactions, which now we're starting to talk to people and influence, again, broader in the CFO's office, people in tax, people in treasury. You saw this slide arguably several times today. It speaks to everything as to why we exist as a company, because throughout time, complexity has been created in these accounting technology landscapes. The systems, starting back with the advent of accounting itself, the processes for doing accounting, all the way up to modern systems that got built to support that. As people built accounting systems, ERP systems, none of them actually contemplated the fact that individuals would go through these complex processes to close the book, nor the controls and governance that would be imposed upon people. This chaos exists in every company out there. Mid-sized companies, and then the largest and most complex companies in the world. I hope you heard and felt some of the challenges some of them experience with this very complexity right here. Which leads people to spend a lot of their resources, their capacity to solve this complexity or do it manually. That comes with a lot of risks that you see eventually show up in the financial statements, potentially through significant deficiencies or material weaknesses. Now we believe there is going to be even more compelling reason why people will want to solve this complexity and reduce the risk. Last week I learned that congratulations, Mark Partin. We get to sign these financial statements and somebody could come back and claw back my compensation if we were to make even just errors. No fraud. Of course, we wouldn't participate in that, but errors based on that complexity. What I have the belief that BlackLine was a topic of conversation in audit committees, in boardrooms, will also become a conversation of compensation committees now because they have the ability to come back and claw back compensation. We have historically focused our efforts on the corporate controller, whose job is to try to align their capacity and their efforts to support the overall strategy organization led by the CFO. There is an ongoing need and desire and interest from finance executives to go through digital transformation. The challenges are, again, that complexity that's built up over the years and processes and systems that have been put in place to do this manually under the guidance of auditors. Change comes somewhat measured. Which leads me to my next point. BlackLine, though creating the category leader and a great story in changing the way accountants do work, is still in the early innings of the overall picture of how this landscape should play out over time. We began obviously creating the financial close category, and we've built the largest franchise based on that, but have consumed a fraction of the $18.5 billion financial close TAM. We got ourselves into the accounts receivable space through the purchase of Rimilia in 2020. Investing in that innovation, you had a chance to learn a little bit more about some of those stories applicable to mid-market companies, as well as some of the largest organizations in the world, like McKesson. Really compelling story there. That, we believe is a $10 billion TAM. Hopefully you got a chance to listen to the discussion this morning about the potential for intercompany financial management and how critical that is, how risk-fraught that is for some of the largest and most complex organizations in the world. That TAM, we believe, is $11 billion, and that is just getting started. Not only do we have that TAM based on a view of the product categories that we're in, we think we have a potential great opportunity in spite of the fact that we have great share, beautiful brands across the world, and a lot of them in North America. We're still very early in this opportunity from a global perspective. When we are out there, the way we compete and the way we win, I think is a critical part of the story to understand. We try to get people to execute on a well-worn path. You'll hear Mark Woodhams come up and talk about our distribution strategies to cover that well-worn path in a moment. That well-worn path is our method for landing customers with the proper use cases, with the right automation built in so that we can leverage our existing investments in customer success. You heard from Lisa earlier. Lisa Schreiber, our Chief Customer Officer, will be up here in a moment to talk about those investments and how we drive customer success through adoption and initiatives which lead to the introduction of additional use cases. You should think about our strategic products there. Those additional use cases put these customers on this land and expand motion that drives up ASP, and it leads to a significant increase over time in those customers as they gain more traction, get more value from our high automation strategic products going on an expansion journey. We see that result in customers who start to really spend more money with us. I believe we've shared this with you. We have cohort data that says companies that spend more than $250,000 have grown substantially. My recollection in the most recent quarter is we reported year-over-year growth of 58% in companies that spend over $1 million with us. That is the manifestation of this land and expand model, customer success. Lastly, we continue to invest in that innovation. You heard several examples of those on the stage today with some announcements that we've made, some pent-up innovation that we've been doing across a variety of categories. You'll hear from Pete Hirsch here momentarily about some of the additional areas of innovation that we're driving in the platform. When we execute like that, when we win, we believe we unlock operational efficiencies at scale. We get better unit economics and empower with the customer base that we have and leverage by creating this truly indispensable platform. We can put customers on a journey that can deliver strong net revenue retention, all of those things driving that sustained and profitable growth. One of the other things I think it's important to consider about our longer-term strategy, and you've seen this for those of you following our story. We began as a single product company, created the category, made our name, earned our reputation in the financial close. Subsequently, we felt like from that important real estate that I talked about earlier, we had permission and capabilities to do something more broadly. We started to expand our category, and we've moved from a single product company to a multi-product company. Today, we've talked about our vision for financial operations management, that we're calling the first iteration, the BlackLine Accounting Studio. That is our multi-year goal to move from a multi-product company to a platform where people simply put, it's the place where they do their accounting, and it's called BlackLine. On that whole journey, we feel like with that TAM, that land and expand model, the innovation, customer success that we have, and with the ability to drive great sustainable growth and great unit economics. A little later on, again, you'll hear from Pete Hirsch, get a chance to learn more about the building of the financial operations management platform, the announcement that we made about the BlackLine Accounting Studio and how it's long-term power with us. You'll learn some things today about some innovation that our founder, Therese, is doing that is really compelling about Financial Reporting Analytics, as well as some other innovations that we've done in intercompany and other categories that we're in. We continue to build this platform through investing innovation. We began a modernization of our platform several years ago that is ongoing, and there's three ways to think about our innovation. It's that platform-driven innovation, which is a combination of the accounting innovation we do, the human capacity and people that we have, and a forward-looking technology view of what a platform will become. It's by continuing to invest in the adjacencies that we've created, adding more capabilities to accounts receivable, adding more capabilities to our existing intercompany hub by acquiring FourQ and moving upstream in our intercompany transactions. Then lastly, we'll continue to innovate, finding manual work areas for optimization and monetization within our financial close space that we'll consider customer-driven innovation, which in the most recent iteration is what we've had Therese focused on. We'll be able to deliver that, and you'll hear more from Mark Woodhams about this again with our land and expand model. A tremendous amount of embedded white space in our existing customer base. Breadth and depth and using strategic products there, expansion with the adjacency, and then obviously, we'll be driving long-term sales efficiency. We'll get more throughput, more leverage from the investment that we have in our distribution organization over time. BlackLine is built to succeed today. Where we are today, where we can help customers reach their goals of automation, doing more with less, focusing on that capacity, managing cash and working capital in difficult times for them, helping them assess credit risk, help them apply cash, free up working capital, et cetera, et cetera. We're poised for tomorrow. We're the industry leader. We have a large unpenetrated TAM across multiple product categories. We have this vision that I believe we can fulfill to create this accounting platform, place where accountants do their work, and we believe that will lead to sustainable revenue growth. You'll hear from Mark Partin about our models, how we're thinking about the dimensions of our growth, 20%-25% medium-term revenue growth, and our objectives, commitment to move towards a profitable business model in the Rule of 40. With that, it's my pleasure to welcome Mr. Mark Woodhams to the stage to talk about our go-to-market strategy. In an effort to bring some excitement to the proceedings, they've introduced somebody that doesn't have an American accent. I came to the U.S. four and a half years ago to join BlackLine. I swapped the rain and the cold of the U.K. for the sun, tarantulas, and rattlesnakes of California. I'm pleased to be here. We start off with the structure. It's pretty simple. In effect, I've got two new business teams and an account management organization. The two new business teams. One focused below $750 million, above $100 million. That's my mid-market team. One focused above $750 million. That's my enterprise team, not complex. The critical part of it is the creation of the account management organization because that's the bit that drives the adoption. That's the bit that drives the customer value, the customer success, and the opportunity that we have within our existing customer base. Pretty much everybody should know that, you know, SAP have the right to resell our software. Majority of our products sit on their price lists. We'll talk about that a little bit later on, but they are a strategic partner to us. Then we have the criticality of a partner ecosystem to support us because they influence so much of everything that we do. They influence the market, they influence our customers, and they help us. The bottom of the schematic here, you can see things talking about customer success, customer management, and Lisa, who follows me, is gonna talk about that, so I'm not gonna dwell on that particularly. Well, actually, at all. This is our go-to-market engine. Yeah. Mark spoke about land and expand. It's we have in front of us a large opportunity within our existing customer base, and I'll talk about that a little bit more in a second. Actually, all of these points I'm gonna talk about in a little bit more detail. I just wanna skip round it, you know. We have an approach to customer acquisition because obviously there is a market out there for us to win and an account management organization to feed. We have an opportunity within international that if I can use the phrase early innings, despite the fact it's uncomfortable for an Englishman to use that phrase, I think everybody understands what I mean by it. I've spoken to the criticality of partnerships and the ability to create more value for our customers, and the ability to create more TAM for our sales organization through strategic M&A is vital. Let's start off with the land and expand, with the customer expansion. Two examples, one on the left, one on the right, and I'm sure you can read as well as I can, but let's take you through it. We have an enterprise customer in the retail space, landed quite small from an ACV perspective, expanded over time, adding more product, expanded a bit more, added strategic product, and then we find ourselves. We've got a customer that's reasonably well down the path of digital finance transformation, but still has opportunity to grow. Similar story with the industrials guy. Okay, they landed a bit bigger. They've taken on two of our strategic products as opposed to just the one, but they're still on that journey, and we're still there holding their hands, helping them achieve that. Look at the slide there. It doesn't really bring it to life. I had a conversation yesterday with a customer, and they've been a customer for a long time. They just deployed one of our strategic products, and it's all going very, very well. Rather than them say, "Well, what else have you got to sell me?" Or, "What else do you want to talk about?" The Chief Accounting Officer basically said to me, "Look, okay, now I've done that, I'm in a good place, but now I've got this problem. We transact, or we have to manage something in the region of 100 million transactions every week, and we're doing it currently on two Microsoft Access databases. "Who do I have to talk to in your organization, sorry, in my organization to so that we can embrace your cash product?" That conversation is really interesting because it's not one of a vendor and a sales organization. We're a trusted partner because we've delivered, and they want our help to actually deliver more of our software. I'll ask if I can tell you their names, but it's a large medical instrumentation company. When we talk about customer acquisition, we talk about we call it MAP, the Modern Accounting Playbook. We recognized a couple of years ago that in order to be successful, we needed to give our customers almost a predictable way in which to start their finance transformation journey. They wanted to ensure that, you know, if we do this, when we come out at the end of it, we're gonna see value, we're gonna see success. It's the well-worn path that Mark was talking about. We introduced this into our customers, this outcome-based combination of products that's connected together into a playbook to give our customers the beginning of that path, and it worked incredibly well. It's worked very well in mid-market. A year ago, we introduced it into enterprise, and now we've just introduced it into the AR world. It does a number of things. For the customer, gives them a much faster time to value, quicker implementation. For us, it gives us a reduced sales cycle, and it introduces some significant efficiencies in our sales process because now I've got all of my salespeople operating in the same way, talking about business issues, delivering to a business issue and a business outcome. Well, I haven't forgot my lines, my mouth is drying up. Bear with me a second. The Modern Accounting Playbook underpins everything that my sales organization does and every part of the organization is connected to it every day. Again, the well-worn path that you may become bored with, but we like it. Here's an example of, I think this was the first enterprise customer actually. As you can see, well, for us, the original investment, they landed bigger. A $95K sale, above average for us. We took them live, or Lisa's team took them live in less than a quarter. That was unheard of in the enterprise space. We took them live in less than a quarter. They expanded again the next quarter, and then, you know, a year later, we've doubled the ACV. Forward-looking statements aside, I think they're on the road to becoming a million-dollar customer because they get it, they get the process, and they've bought into the process, and they see the value. When we talk about our international markets, you know, there is a significant opportunity. Now we've done pretty well, you know, 36% CAGR is showing some growth, but we've still got a great opportunity out there, you know. Even from our existing investments, even when I talk about places like the UK or DACH, Northern, Southern Europe, out into APJ, into Australia, New Zealand, into ASEAN and Japan. We've got a great opportunity just to grow our return there even before we start thinking about other countries and where we expand next. Part of what we'll do there is an expansion both through direct and indirect, and I'll talk about that a little bit later on as well. When we talk about the levers, you know, we've talked about we've made some significant investments in this organization in the last few years. We've created this well-worn path for users so that we've got a repeatable sales model with the intention to be able to drive to land larger, reduce sales cycles, and drive some efficiencies. We talk about our what is actually enormous embedded white space. I use the phrase embedded white space, but what I mean is, every customer that we have has an expansion opportunity from a user perspective, from a usage perspective, from a product perspective, and so that's what I'm talking about. This is a massive TAM that sits within our own customer base. Maybe I didn't need to explain that, but I just thought it was relevant. We talk about the lever there, and actually my cost of selling to my customer base is far less because I have permission, because I've built trust. That trust, as you saw today, wherever the room is that way, is enormous. The conversation that I shared with you, I had many more yesterday, and I'll have many more tomorrow. It's a natural thing. That trust that we build gains us the permission to help us drive those efficiencies into that market and drive those efficiencies. We are looking at other. Where else can we make efficiencies within the sales force? How do I make them more productive? Well, if I give somebody the ability to sell in the way we are through the Modern Accounting Playbook, actually, they can sell more every year. I can drive quotas up if I want to. I can reduce territories. I can. MAP brings some efficiencies. The land and expand piece brings some efficiencies. Our partners really help us bring some efficiencies. There's another side to it as well. I don't think I need to explain the chart particularly, but it gives you a look at, you know, growth in sales reps over a time period with an attempt to show you ramped and unramped QCRs because the most effective quota-carrying reps that I have are those people that have been here for a while and have ramped. Ramped being that they're fully capable, carry a full quota, completely understand it, et cetera, et cetera. Now we invested ahead of the game. In 2021, we made some significant investments to grow our sales and marketing capacity. We hired ahead, and we continued to hire even at the early part of this year. What we're seeing is a ramping sales capacity which has had some impact on our driving down some of our sales efficiency metrics when we've been historically strong. Yeah, we'll continue to taper those investments. We'll look at quotas. We'll look at things that we can change, things where we can drive more efficiency and more productivity. With this and the Modern Accounting Playbook, our landing larger, our land and expand capability, and the role that our partners bring to this, we expect to drive stronger, well, a strong improvement in efficiency in the next few years. Let's talk about our partners. We have made a strategic investment in the partner community for some, what I feel are some obvious reasons. Our partners give me breadth and reach into the market because they carry influence. Our customers are looking for advice from people. They don't always want to take advice from us until they trust us. The partners have a big influence. Actually, they influence something like 70% of all of our new business deals are influenced in some way by a partner. It's significant. You know, you've seen slides like this before, I'm sure. There are two things I wanna draw your attention to on this slide. Number one is the word solution providers that sits under channel. Solution providers are, in effect, resellers. Okay? Domestically, they operate in the mid-market. Internationally, we'll give them more freedom to sell in other places. What it allows me to do is to accelerate my sales force, accelerate my brand, accelerate into the market faster than I can do with my own resources. It enables the partner to create a market for us that we may move into the future, and I don't have to carry the cost. I carry the cost of commission, but I don't carry the cost of headcount or office space or any of those kind of things. That's something that we are investing. We've got about 20 solution providers at the moment, and we are accelerating that. The other one is partner enablement and programs. That's been a big investment for us over the last two years. To the point now where my partners come back to me and say, "This is one of the best programs in the marketplace." The reason it's there, because we have to make our partners successful because if we don't, we'll sign them up and there'll be a noise for six months, and then they disappear. So part of making us sales successes, we have to make our partners successful as well. When you look out at the market. I'll flip onto a busy slide. When you look out at the market, we've now got somewhere in the region of 2,000 certified implementation consultants, people that can implement BlackLine without our help. So that gives you some idea of the reach. The more I can make that engine bigger and almost self-fulfilling, the more opportunity they drive to me. Really busy slide. I promise you I'm not gonna spend very long on it. I could give you a story about every logo on here if you wanted me to, but I'm not going to. You start with mid-market, start at the bottom. You know, we've got partners there in that space to support our mid-market efforts. RSM may or may not be a name you're familiar with, but RSM have got 13,000 people globally focused on the mid-market space, focused in the finance, audit, and tax market, and they're just perfect partners for us. They just get it. As you go on up through the pyramid, the triangle, you know, we've got implementation partners, we've got alliance partners, we've got technology partners, all of which bring us something. They might bring us an introduction, they may bring us in a a connector, they may bring us access to the IT side of the house, but they all bring us something, and they're all active, good, solid working relationships. Talk about SAP in a second. Next slide. I just wanna talk about Accenture. As you can tell by looking at me, I'm quite old, or I've been selling software for a long time. Two previous companies, one of them Oracle, I failed to get the Accenture oil tanker to move in my direction. Yesterday, I'm sat in a meeting with Accenture, and they said to me, "We're a bit concerned we're a bit late for this train. How can you help me accelerate Accenture?" Which is like trying to boil an ocean. How can you help me accelerate Accenture so that we can take advantage of it, so that we can be part of your strategy?" I've never had that kind of feedback before from Accenture. It's early days. We're starting, but the point is they've signed these alliances, they see the opportunity, and they wanna work with us. I keep wanting to say any questions after every slide. I know that happens at the end. Too much of a sales guy, I'm sorry. Let's talk about SAP. SAP, our strategic partner, have been now since I've been here for four and a half years. It's always been a big opportunity for us. It remains a big opportunity for us. Yeah? There are 10,000 SAP customers with over $1 billion in revenue where we focus primarily. If you look out there at the numbers, it gives you sort of a. You can sort of map on the size of SAP across it and figure out, well, we've got to influence a lot of people in SAP to get this engine moving. We've worked, and we've enabled thousands of people in SAP to really understand who we are, what we are, and where we fit, you know? Some of them get it. Some of them are really starting to get it and, yeah, starting to put BlackLine in before the HANA upgrade. It's really starting to resonate. You look at the numbers, and it says 1,300 SAP customers in North America. Well, between ourselves and SAP, we've got 500 of them using BlackLine. Look out at EMEA, and the number's 220. You look out APJ, 170. You look out at the rest of the world, and it's a handful. Point being that the opportunity out there, while we've been working this for 4 and a half years, it's still there, it's still powerful. They like working with us, by the way. All those presents or accolades they keep giving us, as you can see down the bottom, best in region, best, et cetera, et cetera. I'm very confident we're gonna get a big one this year. The point being is just that we work hand in glove with these guys, and it's working very well. The point is, you know, it's okay if it works well for me from a revenue point of view, and it works well for SAP, but it works well for our customers as well. You got an e-commerce company, customer, an SAP customer with a 70% reduction in time to close by implementing BlackLine. You got a food and beverage customer that saw a 30x reduction in their intercompany balances. And the reason I pull that one out is 'cause it highlights they sell our focus products too. Strategic. Sorry. I use the phrase focused internally. Mark spoke about acquisitions. We spoke about FourQ. We spoke about Rimilia. We spoke about the importance of it. You heard it this morning. You heard it from Mark a minute ago. Moving out into those product adjacencies from our core, what was financial close market into those adjacent markets brings more value to the customer, more TAM for me, more competitiveness for me. The opportunity in front of us in just those two markets alone is significant. I told you the story earlier about one of our big customers wanted to talk to us about cash. That's been replicated, you know, 2 or 3 times today. We have a big opportunity in front of us. My takeaway. My takeaway slide before I hand over to Lisa, who's gonna talk to you through how this happens is, you know, we are focused on being strategically indispensable to the office of the CFO. That's what we do. We have a significant TAM, as Mark spoke to, that's expanding with the acquisition of AR and IFM or FourQ and Rimilia. We have a massive TAM even within our existing customer base for us to go after. We have a big opportunity internationally. We have a partner ecosystem that I told you before, I think influences 70% of all of our deals. Which is why we have to make them successful. A focus on driving real efficiency now within our sales organization to make people more productive, to really get some of that flywheel acceleration. Perhaps the most important thing for me is I'm still really excited to be here. I can't think of a better place to be today than this company. With that, Lisa. I'll hand over to Lisa, our Chief Customer Officer. Thank you, Woody. Oh, thank you. Sorry. I just wanna make sure. Okay. Hi. I'm very happy to be here. This is my third presentation in two days, completely different audiences. I'm gonna try to change some of the things that I've said, but you still care about some of the same content. You don't know me, so I thought I would open up just letting you know a little bit about me and why I love the work I do. In a previous life or early part of my career, I was a technology consumer. I bought technology to solve business problems at the companies I was at. I later went over to the vendor side, but it's that passion to take care of the customer that I used to be because I know them, is what drives me to do what I do today. I'm very happy to be doing it at BlackLine. I have great support, take care of the customer really, really well. Today, I'm gonna share a few things with you, and there's a few themes I wanna try to focus you on. I'm gonna talk about the knowledgeable customer. It's not just about the trained customer, it's about the knowledgeable customer. I'm gonna talk about our outreach. These are things that affect our NRR, so that's, they're very important. They also set the stage for upsell and cross-sell. They fertilize the field, so to speak, so that Woody and his team can take the customer further. The other thing is new service offerings. We're trying to expand customers, the services team, and the best way to expand it is within organic growth within the customer base. If you listened to me today, four of the offerings we came out with today and announced are really about driving more from the customer base that we have, not just new customers. You good with that? Okay. The customer team. I have everything post the sale, pretty much. That's the area that I look over and help lead. We wanna drive value realization. Helping our customers continue to articulate that, especially within their own companies, is really important. Building user confidence and knowledge. Knowledge is gonna be a big theme I'm gonna talk about today. Provide critical support when needed. We have a very dedicated and passionate team that does that. Help guide their digital transformation journey. It's not just about how do you know how to use BlackLine? It's really, can you see what's next for you to do, and let us help you with that. I have a couple customer stories today too. Sorry, let me go back. I'm gonna define a term for you right now. Can we go back one? We're a data-driven organization, and we talk about adoption, but I'm gonna define it for you because everyone uses adoption, but what they really mean here is automation adoption. So to me, usage is different than automation adoption. You need both. I want both. We have really high usage. It's really, are they using our product to the best of their ability to solve business problems? For example, automated journals would be a use of an automated kind of an automation piece that we have. I look at that because I know when customers are using these automation features, they're really sticky. They stay with us. They see the value, they continue to get value, and we can cross-sell. A happy customer getting value, easy to upsell, right? I have a good example. One of the largest hotel chains in the world were using our products, but they really weren't well adopted. They came to one of our workshops. This is one of the things we offer out of the many things we offer as outreach to the customer. They it jump-started their journey. Not only did they start on their transformation journey, but they dug in deeper and they've bought one of our. I'm gonna explain this shortly, as a strategic customer advisor and our optimization consulting because they came up with 5 more optimizations to go after. Really successful customer. This happens all the time. Most of the time. This automation adoption is so important that we've moved it into our implementation methodology. To the extent that we can lay the groundwork for the customer to become better automated, when we're implementing them, we put it there. We also started this year more onboarding of the customer. Post-implementation, we're taking the customer, and we're getting them to a healthy, confident state where they feel really good about the business value they're getting, and they walk out with a success plan in hand, and they know what the next steps are. Some are ready to take them right away, some are not. It's customer-driven. It's based on what's important in their organization, and we're there with them. This is around customer knowledge. The whole organization is focused on this. Woody and his team have increased subscription training that we sell to our customers. This is above the industry average. Our new customers come in with a subscription for training, right? 44% of them. You heard my story today about Home Depot, who built a training strategy. Let me finish this, and I can go over that quickly again. Live training. We've been focusing on that. Look at that increase. That's year-over-year increase, right? Q3 numbers. Then the Optimization Academy. I have to tell you, I think this is some of the most important stuff we do. The Optimization Academy teaches really great accountants how to be really great in identifying process optimizations for them using our product. I think you heard me today, I talked about the 4 ways we offer it. Any way they want it, we'll get it to them. But we see customers coming out of there ready to go after optimization opportunities, and then they wanna buy the consulting services that we've put on the end of this to help them. Home Depot, I think you remember 3 parts to their strategy. Every employee that comes in is trained within 30 days. Subscription training. Four times a year, live training gets the whole organization together. They're worldwide, right? Home Depot is everywhere. Everybody has a home. Worldwide, to really solidify the processes and the consistency and the use of our platform to solve their problems. They bring forward topics that they'd like to dive into. Many people on my team are former accountants. There's an accountant teaching them in this class, right? We very much know them, we understand their challenges, and we deliver that kind of training. They went to the Optimization Academy, and they came out with more to do. This took them from just pockets of success at Home Depot to worldwide success. It's a great story. Okay, supporting our customers. Scale is really important to us, so I'm gonna talk about customer success for scale. There's an account manager on every account, and my customer success team does not have full account assignments. The top ones do. Everything over 750, they have a named CSM. Everything else, we have to figure out how to do the scale part right. We're a data-driven organization. I look at many points of information across the organization, and we figure out outreach, specific outreach to them, because when it's specific, it's often received better, right? We do that. We get customers engaged. The workshop that I talked about at that hotel chain would have been an example. Across the bottom are all kinds of outreach that we have. Webinars, try it nows, coffee breaks. We even go over the next set of releases with you, right? Communities, we continue to make that more vibrant and a place that the customers wanna go to get answers and also to share their knowledge. This customer ambassador program that we started is terrific. They're raising their hands to take their time to answer their colleagues' questions, if you will, right? Other accountants' questions. We talked about the Optimization Academy. I don't always know when a customer or an account manager wants a CSM, so they can let me know. We set up a way they just raise their hand. We'll call you and work with you. We try to anticipate when the customer needs us. It's not always 100%, right? We give them a way to tell us, "Yeah, yeah, I need you now." There's a lot of activity, and the customers are touched very often. We know that customers that are touched by a CSM and one of this outreach has a DBNRR higher than our current numbers, that it's a very rich place to be. Our new customer service offerings, and again, this is to increase the services revenue selling into the base. Premium services. You like your IC, you can keep them for a while. You would be surprised how many customers are like, "I'm not ready to take the training wheels off. I know I'm implemented, but I'd really like this person that's helped me get there, stay with me a little longer." Admin as a service, I think every customer that I've spoken to at the conference is talking to me about their admins. It's a really important role because you really can't introduce more change without the admin anyway. It's important to us. It's important to them. This optimization consulting, again, you come out of the academy, you have all of these optimizations you wanna go after, you've ordered them, but maybe you don't have the staff or the knowledge to pull you through it. We'll consult with you. These are not big, expensive, consulting, SOWs. They'll just be a couple weeks perhaps, but it gets them into that optimization to see that value and use BlackLine more. Then the strategic customer advisor. Look, this is for large enterprises that really want someone on their team from us helping them on a regular basis, both being an advocate within BlackLine, helping them with, you know, new ideas, optimizations, all of that. They can have someone, and we've sold some of those already this year. Those are all new this year. We're really pleased with the uptake so far. We know customer success is a differentiator. We can tell how the customers feel about us. We're measuring their health, what they're using. We know when they're in a very good position for Woody to go back in and sell some more because they're really happy customers. The happy customers buy more, and also we've seen when they move to other companies, they'll bring us with them. If that new company doesn't have BlackLine, they'll bring us with them, and we're starting to track that now. Look, I was really excited to share BlackLine's customer success story with you, and I look forward to your questions at the end of the day. Thank you. Thank you. All right, we're at our first break. 10 minutes. We'll reconvene in about 10 minutes, so please refresh your drinks. Do what you need to do, and we'll come back. Thank you. Outrun my gun. All the other kids with the pumped up kicks. You better run, better run, faster than my bullet. All the other kids with the pumped up kicks. You better run, better run, outrun my gun. All the other kids with the pumped up kicks. You better run, better run, faster than my bullet. than my bullet. Faster than my bullet. All the other kids with the pumped up kicks. You better run, better run, outrun my gun. All the other kids with the pumped up kicks. You better run, better run, faster than my bullet. All the other kids with the pumped up kicks. You better run, better run, faster than my bullet. Decisions as I go to anywhere I flow. Sometimes I believe, at times I'm rational. I can fly high. I can go low. Today I got $1 million, tomorrow I don't know. Decisions as I go to anywhere I flow. Sometimes I believe, at times I'm rational. I can fly high. I can go low. Today I got $1 million, tomorrow I don't know. A claim holds you home, you think about the show. We're all playing the same game, playing out alone. We're unknown and known, special and a clone. Hate will make you cautious, love will make you bold. Make me feel the warmth, make me feel the cold. It's written in our story, it's written on the wall. This is our call, we rise and we fall. We're dancing in the moonlight, don't have it all. Decisions as I go to anywhere I flow. Sometimes I believe, at times I'm rational. I can fly high. I can go low. Today I got a million, tomorrow I don't know. Make me feel the warmth, make me feel the cold. It's written in our story, it's written on the wall. Definitely. Definitely. Definitely. Definitely. Ram up the dance, ram up the party. Definitely. Definitely. Definitely. Ram up the dance, ram up the party. Definite. Definitely. Ram up the dance, ram up the party. Definitely. Ram up the dance, ram up the part... Definitely. Ram up the dance, ram up the party. Definitely. We ram up the dance, ram up the party. Ram up the dance, ram up the party. party. Ram up the dance, ram up. Ram up the dance, ram up the party. Definitely. We ram up the dance, ram up the party. Definitely. Ram up the dance, ram up. Definitely. Ram up the dance, ram up the party. Definitely. We ram up the dance, ram up the party. Ram up the dance, ram up the dance, ram up, ra-ram up the dance, ram up the party. Dancing mood dem a getting now. Dem a whine, dem a roll, dem a on the dance floor. Deh whole lot dem a definitely. We ram up the dance, ram up the party. Ram up the dance, ram up the dance. Ram up, ram up the dance, ram up the party. Me love the energy. Definitely. We ram up the dance, ram up the party. Ram up the party. Ram up. Have you ever loved someone afraid you could lose? Have you ever felt the pleasure, the pain takes over you? Don't let me go, let me go. My fingers are clipped on you. We're moving slow but you stay quiet, cut me loose. You slide away, you left and I'm slowly losing you. What happened to our love? I'm finding it better for you. You build me up, pull me down. We danced that line that shoulda never happened. You All right, welcome back. I'd like to introduce our Chief Technology Officer, Pete Hirsch. Pete. All right. Thank you, Matt. All right. Hello. Yes, I'm Pete Hirsch, Chief Technology Officer for BlackLine. I lead our product and technology teams within the company. I've been here since about two. Well, since early 2019, and I've been speaking in front of investors and analysts since then. I'm excited to be talking to you again. For those of you who have been with us, following us since 2019 when I joined, I'm pleased to report that we've been executing against the strategy that I outlined back then. I think we've made a lot of really great progress, and I think that this is probably one of the most consequential BeyondTheBlacks we've had in our recent history because of the significance of the investments we've been making in the modernization of our platform and our cloud. I'm gonna talk about those things. For those of you who are new to BlackLine, I'm gonna share how our understanding of the market and our customers has really allowed us to reimagine and redefine how accounting work gets done. We're very excited about this vision. And then for all of you, I wanted to talk a little bit about how we're continuing to invest in our leadership position and our competitive advantage to distance ourselves from our competitors. Very pleased to be able to talk about that. As Mark Woodhams said earlier, it's still exciting to be with BlackLine. I think we're on to some really big things here. Tremendous market opportunity. I think everybody's aware BlackLine is the category leader for financial close. We invented it, we pioneered it, and we continue to lead it today for both the mid-market and enterprise customers. I wanted to pull together some numbers, but before I do that, you know, it's also, you know, clear that we are expanding beyond the financial close to the broader solution set within the office of the CFO. We're now a multi-product company. We now also have solutions in accounts receivable automation and intercompany financial management. Together, that's caused us to broaden the definition of the category we serve, as Mark was talking about earlier, to financial operations management. I think we have a very unique approach to doing that I'm gonna talk about. I wanted to throw up a few stats to illustrate the scale of the leadership that we already have today. Starting with the first column of financial close. Our customers in the first nine months of this year imported over 14.2 billion transactions, and that's up 57% year-over-year. So incredible growth. Lots of value that their customers are seeing in our transaction matching product as well as journals and other products. In our accounts receivable, customers have processed over $200 billion in payments, with remittances coming in and getting matched against invoices so that companies can recognize the cash that's coming in and make that available for other purposes. Tremendous 32% year-over-year increase. Over 200,000 intercompany transactions in our IFM suite, growing about 34% year-over-year. Clearly some serious growth in these three areas. This sort of magnitude, scale can only really be achieved by a category leader. We're very happy with where we are right now. BlackLine is deeply invested with our customer, deeply, you know, embedded within the core of their processes. We're talking about some of the biggest companies in the world. I mean, it is absolutely a who's who list of the customers we serve. Seriously, the biggest customers in the world. You don't do that overnight. That requires trust. It requires deep integration with their data, understanding their processes and all that. The theme of data and integration is super important. We need to be tight with the ERPs and the systems that we interoperate with. That starts with the strong partnerships we have with some of those ERP providers. Of course, you're all very familiar with the fact that we're a you know, award-winning solution extension with SAP. Earlier this year, we signed a strategic relationship partnership agreement with Microsoft as well. We're showing. One of the proof points in that relationship is this quarter we've announced a brand new Microsoft Dynamics 365 connector that is on our new integration platform that we also just released this quarter. These companies, not only enterprise but the mid-market, typically have multiple ERPs. Even BlackLine, we've got a couple of ERPs. It's incredibly important to be able to support the breadth of ERPs that companies have. We've heard companies on stage this morning, 300 ERPs. These are sometimes different brands, different you know different types, different versions. It's incredibly important that we're interoperable with all of these ERPs. We are. We have a long list of connectors that provide us deep integration, not only with SAP and Microsoft, but Oracle, NetSuite, Intacct, QuickBooks, a broad set of other ERPs, and we support them all. Just as important as breadth of support is the depth of support. It's not sufficient to integrate only with the general ledger. Lots of the interesting data, a lot of the interesting processes within a company are stored within the subledgers, within these ERPs. If we want to be relevant and deeply integrated in these companies, we have to be tied into these subledgers. That's hard to do. We've made a concerted effort in integrating deeply with AP, AR subledgers, supply chain, sales and distribution, fixed assets, a number of other subledgers. This is really important for the companies. Our approach to doing that is that we provide connectors that we either build ourselves, or we partner to have someone else build, or they sell them, or we sell them. It's a broad set of connectors that are unique to the needs of our customers and to bring data into our platform. We have now over 1,200 of our 4,000 customers that are on one of our connectors, and that's really critical. Other customers have other ways of getting at it. We have APIs. We have FTP. There are other ways of doing it. We found that those customers that use our connectors on average get more value out of BlackLine, and they grow faster. Our dollar-based net retention rate, I think was discussed on the last analyst call. It's about 5 points higher. Our revenue grows 5 points faster for a customer who has a connector. They get value, we get value. Lots of great focus on that. Also wanted to talk about our investments in R&D and our cloud. We've been increasing the investments we've been making over the last several years. Since I joined in 2019, we're now about 17% of revenue for R&D. That's for several reasons, but there are two big drivers to that. One is the acquisitions we've made with Rimilia, FourQ. We've gotten some fantastic expertise in AR and intercompany. Fantastic R&D teams. We've been accelerating for the new solution pillars to be able to build out our full suite that we have right now. That's one driver. The other driver is our platform modernization. This is a very significant investment we've been making over the last few years. To do that, we chose to move to the public cloud. What we're doing is we're modernizing all this infrastructure, all of our capabilities, taking deep advantage of all the capabilities. We chose Google Cloud as our strategic partner for a number of reasons. We're modernizing that. That's been a key enabler of all the innovation that's coming to life now. Again, BlackLine Accounting Studio would not have been possible. A lot of the big data things that we're doing right now would not be possible. Huge advantages to modernizing the architecture and everything. That has been a central driver of scale, an accelerator for our innovation. It's also enhanced security as well. Some real important strategic value. We had a major milestone last quarter in our migration. We now have over 2,000 customers live on GCP today, more than half. Half of our entire customer base is now live on GCP. Every new customer that we deploy goes direct to GCP. We are no longer bringing customers into our private data centers. We have capability to be able to leverage all the new innovation that we're building in the public cloud that can be taken advantage of no matter where you are as a customer. If you're in the public cloud, if you're in GCP, or if you're still in our private data centers, we've created some hybrid capabilities that allow customers to take advantage of that. Right now, if you're a customer, it doesn't matter where you are, you can take advantage of this capability. You will eventually be on GCP. For now, our journey is to continue that migration and to be largely complete sometime in 2024. Those platform investments we've been making have been enablers, key enablers for our next wave of growth. You can see, this is, you know, highlighting where we're investing in our overall products, in our financial close. We're continuing on the theme of platform modernization. We've made lots of progress. There's still more that we're planning on doing going forward. Continuing to enhance our existing solutions. Lots of customer-driven innovation that we can do with our existing products in financial close. We're also making some investments in big data matching. This is really key. Certain customers, consumer financial services and more, have huge data volumes. I mean, some customers are wanting to do 1 billion data points a month. I mean, those are the kind of scales that we've heard. By moving to public cloud, we can do some really interesting things using object storage and other really interesting capabilities. We're investing in that big data matching. You've heard, I think, in previous calls maybe how important Transaction Matching is in terms of an enabler of our reconciliation capabilities. It's very important. You also heard if you were in this morning's keynote heard Therese talk about Financial Reporting Analytics. Very exciting capabilities right there with pre-consolidation analysis of grouped accounts. For AR Automation and Intercompany Financial Management we have similar themes. We wanna continue building out those suites. Some of the early-stage capabilities, we're just tapping into some of the capabilities that can be done, so we're gonna continue investing very heavily in those as well as integrating them more deeply into our overall platform. Really important that we're able to get data into and out of those, in the same way we do with our financial close management suite, through our connectors, and APIs. Very important. We want a common look and feel, user experience. Wanna make sure that's consistent, and that we can drive synergies across those as well. Anyway, very exciting capabilities ahead. We see a bigger opportunity for bringing these together. Very big. You've heard about our focus on, you know, financial operations management. We have an exciting vision that I think is a real driver of scale and opportunity for the company going forward. If you look at the history of accounting teams, you see, you know, the building complexity, you see the amount of data, the amount of challenges that accounting teams have, and it's hard to keep up with that. The industry has gone through different levels of investment. At first, in what I call the 1.0 version of this, companies were just setting up shared service centers, throwing people at the problem. That helps, and it will continue to be the case, but it doesn't scale. You can't keep on throwing people at a problem. First of all, you can't keep up with the amount of data. Second of all, you create errors, inconsistencies and all that. The industry moved to 2.0, robotic process automation, RPA, bots. It served a purpose. It was good. Integrated solutions around the edges, you know, getting data into and out of between applications and all that stuff, but created challenges. Companies are starting to see that that's very brittle. The bots break when you change the systems. Change a process, you're gonna break your bots, you're gonna have to go, and you're gonna have to retool them. The costs are pretty expensive, right? They're somewhat limited in the focus of what they can do. We're taking a new approach. We're looking at what you've heard Mark talk about, BlackLine Accounting Studio, a new approach to providing deeply embedded capabilities that these customers can use that'll take them end to end. We're excited about this category, and we intend to be a leader in it. A little bit about BlackLine Accounting Studio. We think it'll change the way companies do work. You know, it will allow companies to, of course, unify, orchestrate, and automate what they do, starting with unifying the systems, masking the complexity of the underlying systems, all the disconnected systems they have in place underneath, masking that complexity, providing a single viewpoint into the accounting operations. Being able to orchestrate complex processes, multi-step processes without requiring IT, and the ability to automate these processes to be able to move faster, process more data, and only involve accounting teams when judgment is needed, when decisions need to get made, when exceptions are encountered in data, all that. We've had to build a new platform to be able to support this, and that's what's at the foundation of BlackLine Accounting Studio. If you get a chance to attend tomorrow's keynote, I highly encourage it. There's a lot of really exciting stuff that we're gonna be talking about. It's important that we have an ability for these customers with a solution that sits on top of all this complexity. Initially with BlackLine and our solutions, but then eventually across the ERPs, the broader ERP landscape, and ultimately across other finance and accounting solutions. That's kind of our vision. We've captured it here. There's gonna be a brand new offering that we bring to market next year. It's gonna be a separately priced offering. In spite of the fact that it's called Studio, which may suggest that it's only a tool that sits on top, it's supported by deep platform capabilities underneath to unify the accounting systems, all those ERPs, that landscape. We sit at the center of the ERP ecosystem, I like to refer to it as. Providing visibility on the status of the processes, powerful tools to orchestrate these processes, and then to automate them end to end. We've been working on this for the last couple of years, and we've been involving our customers along the way. We've selected some design partners. We've been very close to them to make sure that we're meeting their needs, that they're excited about it. We're getting their feedback. Right now we're in design or the final stages of early rollout. We're going into early access for customers starting in Q1 of next year. We are intending to go general availability in the second quarter. That's gonna provide a lot of great initial capabilities. The single pane visibility of processes, an event-based architecture that triggers downstream operations once things are complete. It's very automated. That can involve either additional automations, additional processes or humans. You know, it may be we need somebody to come take a look at something. We need to let you know that we need approval on this, whatever. It can orchestrate that optimal mix of systems and people to provide that level of efficiency, and accuracy and judgment. We're very excited about that. As excited as we are about what we'll be launching next year, we're even more excited about where this takes us beyond in 2023. Very, you know, exciting roadmap for integrating additional systems, providing the ability to automate end-to-end processes across not just BlackLine, but other systems as well. That results in the opportunity to build a best practices library and even marketplace that we can provide for our partners to add to, for our customers to add to. Ultimately, we achieve our real goal of becoming a true platform company. We're super excited about that. I use the word excited a lot. I am excited. We're uniquely positioned, I think, to execute on this vision. We don't believe that any of our competitors can match us either in terms of the vision or our ability to execute. Only BlackLine has this single comprehensive solution to unify, orchestrate, and automate. We have the broad ERP support, unmatched experience and relationship with our customers, that deep partnership to understand the needs of the industry, and the continued investment, $100 million and more, a year in investing in this, you know, in our solutions. I think if you probably combined all of our competitors together, we're investing more than they are, and we're making some great progress. Just like we pioneered the automated financial close, we're poised to really create and dominate this new category. We're very excited about it. Thank you very much. That's what I have. Hi. Thank you. All right. Good afternoon, everybody. Just by way of introduction, my name is Mike Polaha. I'm Senior Vice President of Finance Solutions and Technology at BlackLine. I've been at BlackLine for about one year. I come to BlackLine from Johnson & Johnson as a former CFO. At J&J, I had accountability for finance data, finance process, and finance technology, and was the key thought leader for their finance transformation. Part of my role at BlackLine, I interact with our larger enterprise customers relative to how BlackLine can support their overall finance transformation goals. What I'm gonna talk to you today about is our strategic products, and then I'll stay on the stage to provide you with a double-click on our intercompany financial management product in particular. As we think about it, why do we focus on these products? What's the case for us to really try to grow these particular products? Well, we identify a significant market need. These are products that would solve for known problems within the finance and accounting function. They also allow us to move upstream in the process, right? That, for many of our CFOs and customers, is becoming increasingly important. As digital finance transformation takes hold, CFOs are being asked to provide more timely, more accurate data more frequently. Our ability to move up that automation curve to support more streamlined monthly closes, to support rolling forecasting and different ways of planning, is becoming increasingly important to the CFO's overall goals. From a BlackLine lens, this strengthens our overall competitive position. It's a broader platform. Many of our users sit within shared services centers, and these solutions provide great utility within that organizational group. It's a terrific platform opportunity. It really rounds out elements of our solution for our customer base. Just definitionally, I'll be talking about four products today. The first being Transaction Matching, second is Smart Close. Both of those would fall within the financial close management pillar of our product pillars. Then I will move into Accounts Receivable Automation and Intercompany Financial Management. All right, let's start with Transaction Matching. This is a product that really enhances our overall strategic indispensability. Why would I say that? It allows us to bring more data into the BlackLine ecosystem. It allows our customers to match and reconcile more frequently, and some of that matching process could yield journal entries as well. It's very symbiotic and symmetrical to the whole of our solution. All right? To Pete's point on big data matching, having more data real estate within BlackLine allows for greater visibility of that data. It can be used for multiple purposes. Many of our customers are looking to leverage data, obviously, to turn it into information, and this is all part of that particular use case. There's always, and there will always be an automation component here, right? That really allows then our customers to do more with less. This is especially true with many of our retail customers that are looking to settle every day their cash receipts and have those reconciled. Doing that with an automated process is very value accretive for them. On the right-hand side of the slide, you can see how we progressed with our overall year-over-year transaction matched automatically within BlackLine. We're seeing customers on their journey recognize the need that matching is a very important part of their overall program. What's different about our solution? I would say it's very flexible, all right, very configurable. All right? It allows you to do more than you can ever do within a ERP context. We can bring in data from multiple sources. All right? We can bring it in, match it, reconcile it, and then leverage our workflow capability for the exception handling. This is really important because it allows customers to get out in front of exceptions sooner and move to a more of a continuous accounting mindset, and that's where the market is really moving. You can see some of the value proposition on the subsequent boxes in the slide. The enablement through automation, 99.9% with a reference customer that were matched automatically, reducing 70% of manual effort. It really does strengthen the overall value proposition of our BlackLine ecosystem. Product number two is Smart Close. It's a really exceptional product. It's a premise agent that sits natively on an SAP platform that automates over 400 manual steps in a close. Again, as more customers look to close more frequently, this automation capability for customers becomes more important. This is where this product really plays. As part of the product strategy that Pete just articulated, this product in an SAP ecosystem is gonna have durational value. We are gonna have the ability through the BlackLine Accounting Studio to orchestrate the Smart Close product in a multiple ERP landscape, which is very, very powerful. It enables a faster, better close, and our customer satisfaction on this product is very, very high. Accounts Receivable Automation. Just to set maybe some trends of what's happening within the marketplace in general, I think all of us realize the inflationary situation that we currently find ourselves in. Our customers recognize the value proposition of rapidly transforming accounts receivable into cash, irrespective of whether they're in a cash favorable position, where they can then generate interest income, or if they're working off a line of credit, faster cash, they can reduce interest expense. This is a very important focal point that we're seeing within our customer base. Of course, doing more with less is always gonna be important, and automation in all these product suites is a key theme. All right. Driving more auto-matching capability from a cash application perspective is very important. Then lastly, the ability to generate actionable insights and intelligence from that database. Okay. This informs payment patterns of the customers in terms of how they're paying to inform collection strategies for our customers where they can optimize working capital. It's a very powerful product and very interesting for our customers. You can see in the marketplace, 83% of users are willing to pay for AR applications with modern architecture. This is really an unmet need in the market. As a practitioner in this space for many years, this has not been done overtly well, so a big opportunity for us. How does our product differentiate itself? I think due to the completeness of the platform, cash application, credit, collections, dispute management, AR intelligence. For invoice to cash, it provides a fully baked, full suite solution for that process area. You can see then our strong growth profile, 33% growth in managed transaction volume for the first three quarters. We're seeing more volume through the platform. You can see it on the next box as well, relative to the $200 billion of payments and cash managed through this particular platform. Becoming a very important area, and our product is really standing out. Intercompany financial management. All right? This is an opportunity area that's near and dear to my heart coming from a large, complex multinational. All right? How does our product differentiate itself? One is really touchless automation, and we're gonna double-click on this particular product next. This notion of tax hyperautomation, the ability to ensure tax compliance all the way from sales and use tax and VAT tax through to the preservation of effective tax rate through ensuring that the right transfer pricing has been effected on each of these transactions. It really is the only tax-centric intercompany automation product on the market. This capability was enhanced when we bought FourQ. All right. It's increasingly important given the rise of complexity in legislation in this particular tax space. There's a lot going on here, whether it be BEPS, BEAT, whether it be the e-invoicing that companies have to comply with. This product really helps ensure all of that compliance, which then subsequently mitigates regulatory and reputational risk. You can see highlighted here some of the examples where companies did not do this process well and failed how they needed to address compliance within this particular process space. Very excited about this particular space, and where I'm gonna go next is to provide a double-click on this particular product. Prior to that, let me just wrap up this particular section by saying our strategic products are an increasingly important part of BlackLine revenue growth. Mark Parton will talk to some of the details of that. They're strategically valuable because, again, they're upstream in that process. Intercompany occurs as the business cycle occurs, being able to make sure that's correct and reconciled in a more real-time basis, together with cash application, more real time, transaction matching, more upstream, more real time, extremely valuable to the overall transformation objectives. It expands BlackLine solution offering, offerings into these adjacent areas, very important. Critically important, it expands the total addressable market, okay? Opens a large white space through upsell and cross-sell opportunities with our existing customers as well as new opportunities with any prospects. These solutions and products are purpose-built to solve these particular challenging areas that customers have. We don't need to create a market for them. The market exists for us. Okay. We will pivot next into intercompany financial management. Simply put, for many large enterprises, intercompany processes are simply unsustainable, okay? There exists in many of our customers and these companies, very complex trading partner relationships, parents, subsidiaries, plants, transfer pricing, as companies endeavor to optimize compliantly their effective tax rate through transfer pricing. What gets difficult in this particular process is that what the tax planning folks come up with is at times very difficult for the accounting people to support in the underlying financial systems architecture, leading to a very disaggregated outcome, heavy manual work and some of the fines and penalties that were previously referenced. There's a lot of use cases that exist from an intercompany perspective, right? If you think about it, for the large multinationals, I talked about trade, okay? But even below GP, you can see some of the use cases that we have with our customers. These are below the line types of activity, we would call them nontrade, that ultimately a company, to be compliant, needs to charge out and needs to have an associated transfer price for them. Through the acquisition of FourQ, we've identified many of these transaction types from an indirect perspective and have already had the ability to quickly model billing routes and automation in these particular areas. Really, our solutions are built to support all of the processes in this particular space. Why is intercompany important? All right. One is the cost of the business administration side of this particular process. Interestingly enough, right, not a single dollar of reportable revenue is generated with this, right? It's all right pocket, left pocket, but it's a heck of a lot of activity. The volumes, the dollar volumes here supersede even reported revenue, just with the number of stops that goods and services make in order to optimize that effective tax rate. Clean books and records, right? You got to be compliant here. It tends to be, in most large multinationals, one of the key pain points in the closing process. Does it allow companies to get to where they want to be there ultimately. The ability to get out in front of this becomes very important. You can see the 99% of CFOs reference point there. That is, it's becoming increasingly complex. We talked about previously the regulatory and reputational risk if something goes off the rails here. You can see some of those fines and penalties referenced. What are we seeing in the market? We are seeing that there's powerful dynamics driving intercompany adoption. M&A activity, foreign direct investment continues, all right? Companies are looking to expand their businesses, expand their footprints. Through these acquisitions, they acquire legal entities, they put them into their shared services networks, they get on their payroll systems, and much of this then needs to be charged back out. We talked about the tailwinds related to tax and regulatory changes, all right? This notion of e-invoicing is becoming very important in many countries, where in real time, companies have to send both third-party invoices and intercompany invoices to governmental authorities to ensure visibility to the authority and the associated tax treatment on those invoices. On the far right, the enterprise dynamics are another tailwind, right? There's many companies that have a high number of legal entities. With the spaghetti financial systems, right, many ERPs, these legal entities are trading across ERPs, getting both sides of that entry booked, ensuring that the transfer pricing is appropriate is overtly challenging and almost impossible without a technological solution. It is one of those process areas that at times has a lack of ownership, right? Who really owns intercompany? There's the tax planning part that sets up what the optimal strategy is, and there's the accounting part, the accounting department that reconciles. Oftentimes, no one has been singularly assigned to drive this process area forward. The market opportunity that appears here is significant. It's $11 billion from an addressable market perspective. We have about 2,000 existing BlackLine customers that adequately fit a target profile to adopt IFM capability. We have an experienced go-to-market team. I think this has been further bolstered through our acquisition of FourQ and some of the expertise now that we have to support our existing capability that we had from an intercompany hub perspective. We are clearly the recognized thought leader in this space. Many of my customer interactions, and I typically get involved with the larger enterprises, this topic is front and center. They want to know how to go about solving it, in what sequence, and how to think about getting started here. I think everyone knows it's very difficult to boil the ocean here on a problem statement that could be significant in its starting out complexity. What helps us here as well is our dedicated partner support. Whether it be Deloitte, Ernst & Young, any of our other partners, I think that they also afford capability to help customers think and work their way through the optimal way to approach solutioning in this particular space. We continue to work very closely with them with all of our opportunities. What does our solution look like relative to the process? All right. There's 2 slides here, and I'll spend, I would say, more time on this particular slide versus the one that will be forthcoming. Really, when you think about intercompany, where BlackLine originally focused out of the gate was in the middle portion, balance, and resolve. The ability to more frequently match these transactions prospectively, handle the exception processing through workflow in a much more automated and focused way to ensure by the time that the month-end or quarter-end close came, that there was no substantive mismatches, imbalances in that intercompany space that would cause plug entries to suspense accounts. With the acquisition of FourQ, we've been able to bolster significantly our upstream create capability. This is the ability to avoid the mess downstream. This capability ensures that the buyer and the seller have an agreement, okay? They come together leveraging, automation. We would work to identify these arrangements prospectively with the customer, and then we would ensure that they have the right tax treatment relative to sales, use, and VAT, as well as the right transfer pricing. Many of these agreements are typically billed monthly or quarterly. Once we understand all of this, that the entirety of that contract lifecycle can be automated. What does that do? It strengthens the overall compliance and provides efficiency. The back end of the process is where we would then net and settle these transactions. All right. That's where we would be able to have prospective visibility to any type of hedging situation, given the currencies involved with these transactions. We could ensure that if they're settling with cash, right, we're getting the cash to the right legal entity where it's expected to be. Okay, this was the double click to which I referred. I'm not gonna spend an overt amount of time here since I spent it on a previous slide. You could see in that create space how all of that automation occurs through our solution suite, how we make sure then that we post to the general ledger for these particular transactions, and that's where it becomes very important to the customer 'cause once those agreements are made, we can then simultaneously get the debits and the credits across a multi-faceted ecosystem, ERP ecosystem, and get those postings done correctly to avoid the mess, which then leads into ultimate settlement of those transactions. As we think about our differentiation in this particular market space, clearly it's the touchless process automation to which I referred, the configurable and dynamic billing routes based upon known intercompany transaction types, and really allowing that to flow through in an end-to-end way. We talked a few times about the tax hyperautomation, okay? Very, very important to avoid tax leakage across the ecosystem. Then, of course, the business insights and reporting. I think, you know, as tax legislation changes, it's never static. Many large enterprises globally oftentimes look at their network to see how they may need to adjust it, maybe change the physical and financial flows of either goods or services to see if they can optimize their tax rate further. The capability of the reporting really allows them to work through some of that scenario and modeling. All right. How BlackLine customers go beyond zero. You can see what that payback is. Let me just define beyond zero, because I know it's a big theme for us at BlackLine. We would say that zero is to ensure that we have a balanced set of intercompany transactions, right? That support compliant external reporting. That's kind of table stakes, right? But where we go beyond zero is in the automation that we can conduct that process with. You can see some of the customer metrics referenced here from an improved operational efficiency perspective. In the middle here, where we talk about tax control and preservation of operating margins, this is significantly beyond zero. This is where we're ensuring all of the tax compliance to which I previously referred, okay? Unique in the market. What it does, it really broadens the aperture of the BlackLine solution suite within the office of the CFO. Many times with many customers, our controller and operational side of this process is coming hand in glove with the tax lead that reports to the CFO to recommend our solutions. In the last box, we talked about the achievement of cash precision, making sure that we're settling timely, and where we settle in cash is landing in the right legal entity, in the right country, in the right currency as that company would expect. From a case study perspective, to bring it to life a little bit more for you, this is a case study from a mega cap insurance customer. On the left-hand side, you can see what the problem statement was. I would say this is very indicative of what we would see in the market. Four shared services, manual process, lack of intercompany policy, okay, and the business consequences included inefficient operating model, audit risk, and VAT leakage, right? I would say very customary. How do we approach a solution suite in this area? One is to really understand what their current state of process is. Whom are their trading partners? On what ERPs do those trading partners sit? What are the nature? What are the types of those transactions? Where do we have critical volumes? Okay? Making sure we have the right policy on materiality as it relates to intercompany. In this case, we started with that nontrade component, okay? 'Cause they saw a quick win speed to value as it pertains to the nontrade. Our ability to then configure billing routes between those buyer and seller transactions and support it by the right tax strategies and automating that process end to end, as well affording, through our workflow, that dispute management capability to ensure that if something goes wrong in this particular process, there's an effective way for the company to disposition it. From a benefits perspective, you can see in this example what was realized. We had a 45% reduction of FTEs that were operating in this particular space as a result of the automation. Of course, when you automate up front and you have agreements, you eliminate unreconciled balances downstream, a natural consequence. That third check mark is very significant. You can see the prevention of that leakage that this customer accrued as a result of our solution. Now they have this intercompany platform. They can grow with it. As business conditions change or if tax regulation change, they can then model what an optimized approach could be to their intercompany process and tax optimization goals. To bring it all home from an intercompany perspective, it's a huge greenfield opportunity for us, targeting the largest, most complex global enterprises. These are big names, big brands in the market. As I mentioned, it is the only tax-focused intercompany solution in the market. No one else has this particular capability. We have the capability to expand and to cross-sell this within our existing customer base. Many customers fit the profile, close to 2,000. Extremely sticky. It's a highly valued solution once it's in place. Many large multinationals themselves try to solve this with their own development. I can tell you many of my customer interactions were talking about grandfathering those developments 'cause they don't provide anywhere near the full capability as they re-platform as part of their ERP programs. They are looking for SaaS offerings in this particular space. Has a very quick payback period and a high return on investment. We are super excited about the opportunity within this particular space. Okay. Listen to their stories. Be back here in 10 minutes. Thanks. Don't let me go, let me go. My fingers are glued onto you. We're moving slow, moving slow. You stay quiet, cut me loose. You tried to warn you love. I'm slowly losing you. What happened to our love? I fight battles for you. You build me up, pull me down. We dance online, then never happen. You tried to warn you love. I'm slowly losing you. You star, through fall fell. You star, through fall now. You star, through fall fell. You star, through down now. You star, through fall fell. You You star, through fall now. You star, through fall fell. Slowly losing you. You star, through fall fell. You star, through fall through fall fell. Slowly losing you. You star, through fall fell. You star, through fall through fall fell. 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So each one of them will tell you know, a little story about their experiences with the BlackLine product, the you know, the benefits it's brought to their organization, and how they went about doing that. Before we dive into the conversation, I often assert that nobody is better at introducing themselves or talking about themselves than themselves. I wanna allow each person here to introduce themselves, give a little background, what brought you here and who you represent. Start with Helene. Well, good afternoon. My name is Helene Carrier. I'm the value stream owner from Record to Report for SLB. SLB is a global technology company driving energy improvement for the, let's say a balanced planet. We just rebrand ourselves, so you might be more familiar with Schlumberger, but our new name is now SLB. I've been with the company almost 29 years, and during those years, I did some controllership. Just before heading the transformation, I was a director of internal audit. I had a lot of needs during my 29 years of new product. That's what brought me to the BlackLine when I came to the transformation for all different reason, efficiency as a controller and also internal control to help on as a, the director of internal audit. Now I'm trying to maximize and accelerate our finance transformation with the BlackLine, which I will elaborate a little bit later. Great. Yeah. I'm Vince Garlati. I'm the global controller for Kraft Heinz, which is a global food company. We operate hundreds of different brands in different countries. I'm responsible for all the accounting, technical accounting policy, external reporting, internal controls and SOX, for our company. When I came to Kraft Heinz in 2016, they had already been using BlackLine, but I actually implemented it at my prior company before that. And for me, it's a nice tool to have visibility into a very disparate kind of global company where you have operations in different ERPs in a lot of different companies, countries. A lot of the modules serve as a little bit of a universal adapter where you can see in one spot, you know, have visibility in a lot of different areas. It's also helped us a bit on our global center of excellence and global process journey, where we've centralized certain activities in different markets to perform them, you know, in an efficient manner and a better controlled manner. Hello, everyone. I'm John Burt. I'm an executive vice president at Capgemini Business Services. And most of all, I'm working at the moment with BlackLine Cash, the AR automation product. My role at Capgemini is I'm head of strategic client relationships. As part of what I've done with Cap over the last 17 years, I've helped to set out the technology and platforms and automation strategy for our business services organization. Part of that contributes into what we call our Frictionless Finance offering, which is a combination of process enhancement, root cause analysis, and data insights to really remove blockages to give our customers the best experience, and combining that with digital platforms and artificial intelligence. On our AR side of our finance offering, BlackLine is our platform partner of choice, okay? We've been implementing BlackLine within our portfolio of customers, and one particular large program over the last 18 months that I'll talk a bit more about today. Great. Well, thank you. You know, the first question I had applies to each of you, or I'd like each one of you to address it in your own way. You know, I think, generally speaking, we always hear about companies that are well adopted with BlackLine. They're, you know, a well-oiled machine, as we call it, when it comes to closing the books, and that's the current state scenario. What I wanted to really double-click on, though, was obviously it wasn't always that way. When you arrived at your organizations, or you know, you first were looking out there, maybe could you describe kind of the conditions or the situations that were present that made you think, you know, I really got to evaluate a technological solution for a broken process or, you know, a really manual closing procedure. Maybe describe, you know, how you went about that process. You would call it problem-solving, we would call it demand generation. But how did you go about evaluating what tools were out there? Why did you choose BlackLine? And then maybe how did you augment your team, you know, throughout that process, if at all, when going through that entire evaluation? I'll start with Helene. Also part of the transformation, even before what the finance usually department we want to shift. When we say shift the paradigm, we want to completely eliminate the transactional transaction and really focus on the business insight. Really the value proposition is when you actually start removing the task in all and mostly now we centralize more and more, people create the hubs. The tool that can work is not Excel. You need stronger tools for internal control, the value. You really, when you talk about digitization, you need a partner to really do in a controlled environment. The first tool we went when we decide to go in the hub was the reconciliation. Right away, also from an internal control, because I was just coming out of my director of internal control. That's where you have most of the weakness, because without a control that ensure the integrity of your balance sheet, you have a lot of risk. That was the first one. The fact that you centralize, you become so much efficient. The second one was the matching, because that's everything that you can replace an Excel sheet, you bring value. Within two or three months, the matching eliminated our outsourcer. With today's economic situation, you try also to have the function as a less cost of the service delivery. The idea is to remove the transactionals. That was the case for the matching. The third one was the Smart Close. When we are in our process of deploying SAP, we are deploying so many legal entity that if we had to continue with our current system we had before, we would have had to increase about 17 FTE just because we are deploying. We need a solution to avoid a cost increase. Within two months, we actually were able to deliver on time our version of SAP because the Smart Close came in just in time. Each time we had a problem, either it was efficiency, internal control, cost, and eliminating that way all our transactions. My experience was about 12 years ago, prior to coming to Kraft Heinz, that we implemented BlackLine primarily with the business case being the reconciliation module, which, the environment back then, it was very much, Excel spreadsheets, or in some cases, binders, SharePoint sites, you know, things like that supported things locally, but you didn't have a lot of insight from the global center. If you wanted to find out insights or see something, it was usually an internal audit would come look at it six months later and you'd find something late. It enabled us to bring better visibility and use it as the backbone for our shared service center. also just integrating the various modules, how they work together kind of is very, you know, synergistic. Things like the journal modules and the task modules, some of those coming together really helped us there. It's a similar thing at Kraft Heinz where we are just having the ability to have that tool. I can't even imagine over the last couple of years when we've all worked remotely, how we would have even functioned in the old environment. Just having something where you have global visibility. We have people who do some transaction support for us on the other side of the world. It's all very integrated, and you can have workflows, you know, going between different countries and geographies, driving consistency, driving visibility into efficiency and process. How many hours is it taking, you know, you to do this activity here versus this other one and, you know, constantly trying to be efficient? From my perspective as a provider, we're looking at is providing services to big global organizations, multi-country, lots of different tax regulations, lots of different compliance regulations, different payment types, different bank account files. We were looking at something which was really scalable that could deal with very high transactional volumes for matching on the AR side, but also allowed us to support our clients and our customers in terms of their growth projections as well. Particularly over the last couple of years, some particular business areas have seen explosive growth, and we're trying to keep up with that with the platform strategy. What we were looking for was a platform that was very scalable, could deal with all of those different functional challenges that I've talked about, different languages, payment types, bank files, et cetera, et cetera. We did some extensive research on the market about three or four years ago, saw that BlackLine Cash could cope with those types of aspects. We put it through a proof of concept. We got very good auto-match results right out of the box, exceeded our expectations. But probably most of all, when we started to work with the BlackLine team, we had some good shared value sets, right? We were looking for not a vendor or a supplier, but a partner, and a partner that could Provide the agility to overcome the types of problems in all of the organizations that I'm talking about doing an implementation. That was very important to us as well, that partnership mentality. Great, great. Well, maybe next question, you know, I'll start with Vince. I liked how you introduced that Kraft Heinz is a food company. It's ubiquitous. It's in every country in the world. I gotta imagine that gives rise to an unbelievably complex legal entity structure and accounting structure. I know that Kraft Heinz is an intercompany customer. Maybe could you talk a little bit about what your intercompany process used to be pre-Intercompany Hub versus what it is now and just the benefits it's brought to you as the controller in the organization? Yeah. This one's gonna be really exciting. I mean, you know, everybody's waiting to hear about intercompany. If you think about it, we operate in about, essentially every country in the world, and a lot of times we might manufacture products in one country, ship them across border to another country. Sometimes we might do services in one country, bill them to another country. What our landscape was about 4 years ago before we started with the Intercompany Hub was, you would literally have a country that was kind of originating those services, generate an invoice, and send it to the other side. We operate in a little over a dozen ERP systems. It wasn't fully integrated. What you'd have is this company would record revenue over here of, you know, $1,000. This company over here might, like, say, "Eh, you know what? I disagree with, like, 20% of it. I'm only gonna record $800 of expense," or use a different currency or say, "Hey, guess what? You know, in China, I need specific documentation to allow this transaction, so I'm not gonna record it." That would happen, you know, in isolation, and then we consolidate all our results in a consolidated manner, and then you'd look, our intercompany receivables and payables are out of balance. What happened? You'd be going back and trying to figure that out, and then they'd bring them to my team to kind of adjudicate, is this a legitimate transaction or not? That would happen sometimes months after the transaction happened, sometimes a year, just because it was you know too many. You know, think of a process where you have multiple touches where you don't need to do it. What the intercompany hub enabled us to do is we just move that decision process on the front end. On the front end, it has to go through the intercompany hub. Both sides agree to it, then it interfaces to the ERP systems at the exact offsetting amount, and then you never touch it again. It forced us to basically change that process. We're not gonna second-guess all these things. If we don't have the right documentation up front, then guess what? The transaction doesn't exist. It doesn't clear the intercompany hub. It doesn't get recorded anywhere. We had about 4 years ago, just a sizable intercompany out of balance that we would... We'd adjust in consolidation, make sure that it was right on our consolidated books, but then we would spend months kind of reinvestigating what this is. The intercompany hub enabled us to minimize that. We have better visibility into things like our transfer pricing and our cross-border transactions. I know you guys were talking about some of the tax benefits. That's a big area of focus. A lot of the tax leakage that you might have if you're doing those inefficiently. The other thing too is if you take too long to identify these transactions, we might not end up settling them on time, like actually moving the cash back and forth. You might end up in a situation where that's an unallowable deduction in one right jurisdiction, and it's still revenue in another one. It could be just a hidden one that people who aren't really into it don't really realize probably, but it can be a big issue. It's with the timely deductions, I mean, that's one of the many ways the product pays for itself. Mm-hmm Among all the efficiencies it brings. Then you know, you heard Mike Polaha earlier talking about well, you weren't here, but you know, he's talking about intercompany and all the risk that's associated with it. I believe if you look at the top three reasons for a restatement, it's revenue, taxes, and intercompany, and two and three are typically interrelated. Having a product like that when you are, you know, when you exist in such a complex structure, brings so much value from risk mitigation, from efficiency, you know, and cost savings. Helene, I listened to your answer earlier. A couple things just jumped out at me. I heard, you know, that you're using Smart Close and that you're using matching and that you're using not just recs but the cash rec template, which drives a lot of efficiency. I think I caught this correctly. You did an analysis that by implementing Smart Close, you didn't have to add 17 full-time equivalents to manage the close process through SAP. Smart Close replaced that or mitigated that. Could you talk about maybe, you know, an example of automation where those three products or two of those three products are working together? Sure. I think that's really exciting because I think that's where the value is. Mm-hmm. It's really combining the product together. You can really get automation and efficiency. Actually, we just went live with doing our bank reconciliation. When we look at our cost of service delivery, we also look as an indicator our cycle time. Sometimes our cycle time to do a balance sheet, we started at 15 days, and in the process, we try to go to 5 days, even 1 day. Imagine the visibility in the CFO office if he has all those reconciliation done on the same day. Mm-hmm. We decide to do the most important, is cash. This is the first one we done, and we actually was very fast to deploy it in 3 months. On the last quarter, we actually reconciled 1,000 bank reconciliation in 2 days. Mm. Pretty much half of it, and I think in the next one, 70 were auto-reconciled by our deduction. It's really looking at all those tools together brings so much value. You have your cost of service delivery. You have the visibility of how you're closing. Mm-hmm. This is just the beginning. We're very, very excited about it. No, that's great. That's great. So, you know, we've talked a lot about 'cause, you know, we got a lot of accountants on stage here, which is great. You know, we always talk about the use of BlackLine in terms of efficiency. You know, we always talk about it in terms of risk mitigation, which obviously are two, you know, very critical things. We talk about accelerating close process, but I think there's another element. John, you know, I had the pleasure to meet you earlier this morning. You know, maybe could you talk about your experiences with the Cash Application and maybe the benefit it's brought to multiple stakeholders that are impacted by the use of that product? Yeah, sure, Patrick. I mean, I think where we're trying to look at using the platform across our customer portfolio is really to look at driving key business outcomes. We're all aware of the fact that if we get a high match rate, that can bring efficiencies, it can bring the compliance that we've talked about. I'm also talking about areas about saying, with that faster turnaround time, with that greater accuracy, with the fact that you can get the statement for the customer up to date, you're really giving them a better customer experience. What that allows them to do is it allows them to be happier with our customer that we're providing the platform to, and they can buy more, and the revenue will increase, right? There's also the situation from our customer's point of view that they're getting more confidence around that turnaround time. They can open up more credit lines more quickly so that can improve their revenue growth as well because they can sell more, right? If you look at it from our employees' point of view, what it's allowing us to do is let the technology take care of more of the rule-based more mundane activity, if you like, so they can be freed up in their capacity for process enhancement, for dealing with exceptions, for stakeholder management, all of which again is improving that quality of service that we're able to deliver to our customer and our customer's customers. I think we're seeing that we're using the platform not just as the basics of high volume transaction turnover, which of course it's very good at. We're seeing an ability to do more for less in terms of growth periods, but also directly support that end customer experience, reduce the number of disputes and inaccuracies that we get sometimes in managing that service, and really have some beneficial addition to top line as well, which I think is really important. I think that's, you know, really great 'cause we talk about the AR product, which, you know, I can personally speak to. Yes, it reduces DSO, it auto applies cash, it reduces the mundane and the amount of work that your team has to do. I think what I heard there is, you know, it's also improving the experience for the very end customer. Mm-hmm. That makes sense 'cause traditional way of collecting, right, you bombard a customer with emails and phone calls. It's unpleasant and you know, and it's not even within the realm of collections. You know, nobody likes asking people for money, so. Also, it tends to generate more work because what they start to do is complain that they've already paid. Yeah. If you haven't been able to match or get that cash up to date, get their statement up to date. This gives us the ability to really turn around on time, prevent those type of disputes coming in and therefore you get a much more frictionless, touchless experience, which of course the end customer prefers. Mm. When you're talking about some of the clients that we're dealing with, that is their big differentiation on the marketplace, right? If they're in a very cost competitive business, the customer experience becomes everything to them, right? It really does contribute to the way they win on the market with us as a service provider. That's great. I guess, you know, moving back to Hera, I'm still, you know, mesmerized. Yes, Smart Close is a product that, you know, we've owned for 6 years. Maybe could you talk about exactly what the product does, you know, or for your organization in terms of managing the workflow through the close process and roughly how that equated to, you know, it's doing the work of 17 people, and maybe how you thought through that internally and did that analysis? The way we looked at it allowed us to avoid having to hire 17 because we were going in one of our biggest release of SAP, and we had more than 70 legal entity, and the number of job that was creating was not sustainable. We had to run too many jobs. The Smart Close, what it permits is to have one person doing about all our close worldwide and also starting the automation of who needs to do what. It's like a really, I was going to say a view. Day one, we've never had any issue with it. Like I said, we actually deploy it in 2 months because we had no choice. We were going with a release in 3 months, and we had to find a solution. If not, we would have to postpone the whole. Mm-hmm. Go live. The training was easy, the setup was easy, and today what we have to do is generate more value out of it to automate more tasks that is done outside of the month-end close. Today, it's also concentrate a lot of our what all the closing that we do at the end of the month. That's pretty darn impressive just when you think through that. It's hiring avoidance, if you want to call it that. It was. Yeah. It was. Even if we would have delayed our SAP release, it would have been very expensive because every time you delay plus 17 to train, and it's a tool that is very, very easy to implement, which is. It's a big value for us. Vince, I remember we were talking yesterday, and of course, we talk about our products a lot within the context of financial close, and now John just highlighted in terms of its benefit to the end-to-end customer. I found it interesting. Matching is, you know, obviously, if you use it properly, it is wildly beneficial to your close process. You were talking about something, because matching is pretty much a big data engine. You know, we use it, we talk about it, you know, in the realm of accounting, but you brought up a use case the other day in terms of how Kraft Heinz is using matching, which really isn't part of the close process. Sounded more like internal reporting or analysis. Could you maybe touch on that a little bit? Yeah. I mean, I shared it with you just 'cause I'm sure it was a bit unique. Well, yeah. how our team that likes the tools found a different use for it. But we had the need to have more detailed product profitability reporting internally, so we built an internal system we call single source of truth. It allows us to have all the way down to net income margin results by SKU. We have tens of thousands of SKUs in the U.S. alone. You know, really important, particularly over the last year, when some of our ingredients might be seeing in excess of 20% inflation by a particular ingredient. Really, you know, our old method of assuming things have stayed static, you know, wasn't gonna work. We have a lot much more granular view. Sometimes you can see in the internal management reporting view, internal management reports might be adjusted to reflect certain things and maybe not might not be the whole complete picture. It's really important to me that our internal management reporting tied to our external reports. Anytime we set up a product, if it gets a little bit out of whack and somebody doesn't set it up right, and it doesn't work with our allocation module, our data assurance team uses BlackLine matching actually to compare that and say, "Oh, you know what? During the week of month-end close, this product didn't get set up right, so it's not gonna be right in our internal management reports," and fixes it. They're actually using the matching module to kind of prove the data integrity of our internal kind of product profitability reporting. That's great. We have a few minutes left here. This half hour flew by. I guess before we part, I'll start with John Burt, as I've been starting with Helene Carrier the whole time. Any final thoughts in terms of your experiences with, for you, the AR product and where you see it maybe going in the future? Yeah. I think first thing is we'd like to obviously explore the benefits of getting a bigger scale as possible in terms of the implementation of the AR product. That's both in terms of the cash application, because I think the more scale that we have, more volume that goes through, the better the commercial case becomes. In addition to that, I would say one of the things that attracted us about the platform was the integrated aspect of the modules. You know, an opportunity to move more into the collections area or into the disputes area, use the full integrated aspect of the platform, and also, obviously as a provider of end-to-end finance services and supply chain services, you know, really use the full integration into the types of intercompany and the close product that we've been talking about, across the platform here. I think there's plenty of scope for us to grow. In terms of our partnership, what I really like about it is the agility to overcome problems. In any big programs, you can't scope out every type of incident or every type of challenge that you're gonna come across. The working together, the agility that's shown in the partnership is what I really appreciate. Great. Great. I guess, you know, for Vince or Helene, there's no wrong answer here, but maybe, as we close out, you know, based upon what you've seen at the conference, based upon your experiences with our products and as we continue to expand, what do you see in terms of next steps, in terms of use of, you know, using one of our products? Or what are you thinking about internally, you know, in terms of potential uses of our product? I mean, we've just at Kraft Heinz just started scratching the surface on the journal module. You know, we started that in Europe, and we're gonna move that globally. I mean, that's one we wanna continue to use. Like I said, tasks, we've used a different tool before. Actually, one of our outsourcing provider used their tool. You end up starting with this fragmentation of tools, it's a little bit harder to maneuver. Having one dashboard there will be important, so we're looking at that one as well. Also, variances. I mean, we look at things more so offline in Excel and Tableau and use certain dashboards, but you know, looking at some of those ones to leverage those as well. Great. For me, one of the best investment I think we did is creating a BlackLine innovation team in SLB. You really try to have the people that understand more digital versus a normal. Since we did that, we deploy a lot faster the integration of our tools. The team is here learning the experience. I would say priority number one, we just deployed journal, using more and more automation of the journal. Keep reducing our cycle time because that's value for the company. Every day we remove of the cycle time, it's money save and better visibility of the balance sheet. I'm very excited of the new FRA product to see the balance sheet, which is the link between the CAO and in the detail. I'm starting to look at the intercompany, but we're using matching for the intercompany. With the whole platform, we will follow what you going to do. A lot of exciting to come over. That matching is extremely agile. It's very agile. It's rules-based, and you can configure it, design it almost to your liking. Well, I believe we're at about a half hour now or I wanna thank each of you for your time, for being great customers, for being great representatives and adopters of our product, and can't thank you enough. Thank you, guys. Thank you, Patrick. I think there's a few takeaways for me. These guys are heroes, you know. It's what they've just talked about and what they've done is really hard in a world of accounting, which is risk asymmetry. The small things can create big problems in their world, and they have done this, you know, for very large organizations. They're unfortunately, though, the cream of the crop. You know, there aren't enough of them. We need 4,033 more of them, right? You're You're gonna hear this from me, and you heard this the last couple days: digital transformation is still in its infancy at most of our company. You could turn this down a bit. Yeah, it's a little loud. Still in its infancy, so that's a big secular thesis or a macro driver for us. Anyway, I really appreciate that. Another takeaway was, Vince sounded to me like he'd bought this 12 years ago as a repeat buyer. That's more and more common when you get mobility for accountants, particularly accountants of substance that can see continuous improvement, that have positions of power or are moving, you know, to a new company where they want to establish themselves, new process, new procedure. You start to see these sort of repeat buyers for us. One last thing. Patrick, I think one of the smartest accountants alive, great, and what better job than the head accountant at a company that sells accounting software. Our customers love him, our employees love him too. I appreciate you guys doing that. Thank you to those customers. Is Walraven here? Did he make it back? Pat? No. Okay. He was here this morning. Pat and I were in the conference room, and I swear I could see it in his face, he had a Mr. Miyagi moment. Because all of these products that we've you know that we have and these services in sort of came together for him in the accounting studio with the wax on and off and the paint the fence and the scrub the floor, sort of all was. These aren't just standalone independent things, right? These operate very effectively in our overall strategy in this accounting studio or this, you know, FOM and our ability to really own this important real estate in the controllership and in the accounting, the most important part we think of the office of the CFO. Many of you are creating this sort of a thesis around the office of the CFO and that transformation, and that's why we think you need to pay a lot of attention to BlackLine. Let me move on. I'm the CFO Mark, the third Mark on the stage tonight. It's nice to have all of you here in person. I appreciate that you're here for us, and you're getting the chance to meet our customers. I think the sort of main pillars of our story that you've heard today and from us many times is the size of our market and where we are in that market. Second is the business model, this elegant land and expand business model that I heard this morning, and I like it. It allows us the ability to meet the customers where they are on their journey because of that. Third, a long history of driving profitable growth, cash flow, a DNA, and a culture of responsible balanced growth profile, and that informs our future. You don't have to look much further than our last quarter. Our last quarter, we think demonstrates sort of the strength and resiliency of our business model. Strong growth, solid profitability, and retention in the business. Gross margin, bottom line, cash flow, and an increasing customer commitment to BlackLine and our future through the RPO. Additionally, we're introducing a new metric that'll, in the future, be part of our financial disclosures, ARR, annual recurring revenue. We just tipped over $500 million or at $515 million at the end of Q3. So a sense for our size and momentum. Mark introduced this earlier, introduced the concept of our medium-term model. Growth profile with a target range, and medium term for us is 3-5 years. Medium-term growth profile, 20%-25%. Gross margin, 80%-82%. We will continue to drive operating leverage in all aspects of the P&L, including sales and marketing, R&D, and G&A. We'll talk about those in a moment as well. This yields a operating income margin target of 15%-20% with a free cash flow of 16%-21%. Bears repeating, you've heard it multiple times, but it's about the size of the market, the innings of where we are in that market, and the green space and white space that exists in that market that makes it so exciting for us with our business model. Mentioned earlier about digitally transforming customers. 4,000 customers, we estimate today, 10%-15% are in some sort of more mature stage of digitally transforming. People like the ones you've heard on stage, you know, they're buying more product. They've got somebody who's in charge of digital transformation. They're buying and accelerating their user rollouts. They're working with our connectivity. They've got partners on their engagement. Think of this as leading edge, and they are on their journey further along. What we see in the results of a digitally transformed customer, in this small subset of customers, is over 2 times the average deal size, almost 3 times the rate of growth annually, more than 2 times the number of users, 50% more products purchased, and it yields a higher retention rate, 114%, which is 5 points above our customer average. It's also worth pointing out the white space, right? The other, you know, 80-plus% that, for one reason or another, have not yet begun their journey. We feel that they must. It's not if, it's when. The reason for that is so many things that we've talked about, the need to deal with capacity problems, with retention, with speed, efficiency, you name it. The problems don't get easier over time, and more and more people, we think, are going to be like these guys that were on stage earlier. We're positioned, and we're poised for that. I think you can go back in our cohort slide and look at how we've grown our customer base since 2012. This shows the land and expand model. On the left side, 1.8 times average deal size landing increase from 2012 to 2021. 80% greater average when we land on up the curve. Then on the right side, the growth multiple over time. They continue to grow over time. Woody put a slide on with two examples of customers. I don't know if you noticed, but those were 10-year-old customers. Even on the stage earlier tonight, you heard, "Well, we were a customer, you know, for 10 years, and then we really didn't use it or utilize it or buy it until maybe three or four years ago." That's a long journey. That's a good and bad. The good is they stay with us 'cause we're delivering value, and they're sticky, and you know, it's high value to them. It's for us, the opportunity is to be there when they're ready. It can be frustrating. I know you can be frustrated about it, but these are sticky customers that have great opportunity in the white space. Anyway, what drove this in the past has been user expansion through global rollouts, has been price increases, even expansion within the core platform. You've heard already about journal entries and other products within the core platform. It wasn't until recently, and then also what we believe to be the future, that the driver of these cohorts will be strategic product uptake. I wanna talk about that in a minute, not right now. In this slide, you'll see the importance of larger deal sizes. We talked about big bricks building the big company. If companies are digitally transforming, generally speaking, they're spending more than $250,000 a year with us. Okay. The group of customers that have grown over $250,000 just finished over $400,000 number at a 28% growth clip over this period of time. For $1 million-plus customers, that would be a 74% CAGR over that same period of time. You know, a little more than 10%. This is really important because the more we have here, we believe we're strategic partners with these companies. We are embedded. They're buying, as I showed you earlier, more than just an acute problem solution. They're buying the platform and buying into our journey. Here's the strategic product attach rate. This is how we believe we can deepen our strategic position within our customer base. In 2019, 13% of our ARR was strategic products. Mike Polaha talked to you about what those four were. Today, that's 22%, 45% growth rate. On the right side, you can see the opportunity. It's nascent in terms of our penetration within our own existing base. The white space for strategic products and the ability for us to drive, we think, has never been better. Again, digital transformation, all of these experiences and investment in customer success, the knowledge, the training, the service, the ecosystem partnership helps drive this. Okay, dollar-based net retention, 109%. I think I've already spoken to you many times about what's been driving this over the years. The future of this to increase it is through strategic product uptake. It's all built, though, on a high renewal, gross dollar renewal rate. Enterprise is above that number. Mid-market would be below that number, in the low to mid-90s%. I think we put that in our IR deck, generally. World-class for both, we think, but we're never happy. We always want everyone to stay with us forever if they can, and some have. Some have been here for a very long time. The way that we drive this is to continue upsell, cross-sell strategic products and prove that value, continue to innovate and deliver this unparalleled experience for the customer. I mean, we have a buyer enablement. We have to help them understand what they have. Fred Lee with CS was at a customer lunch today, and what he heard, if you're talking to customers, is probably the same thing, is that they wanna do more, right? He took away from that underutilized. That's the opportunity for us to drive more product, more user expansion, is better experience, better training, better service. It's not rocket science, but it's not easy, right? What you heard today, it sort of all comes together in this alchemy of having customers trained, ready, trusting you, proving out their value over time. It's mission critical. Do they have the partner and the resource to achieve that project? We're there for them to help drive that. Nevertheless, retention rate at 109%, we believe the opportunity is to continue to drive that, like I said. Now to turn to profitability and margin. I'm trying to get you guys to the Q&A so you can spend more time with the executives and. To turn to the margin. High-gross-margin business consistently over the years. Primarily premium product. BlackLine delivers great value to our customers, product mix, low services as a percent. 94% of our revenue is high recurring subscription revenue. As you know, a couple years ago, we committed to a multi-year Google Cloud migration to drive our customers to the public cloud. We're halfway through that experience, a little more than halfway. We've been managing it efficiently. Nevertheless, the combination of running private and public takes a bit of headwind to the gross margin. We'll see this come back to us. Our medium-term target model is to get back to the higher end of that medium-term range, 80%-82%. In the last quarter, we were at 80%, I believe. That's sort of the long-term view, medium-term view of gross margin and our ability to do that. Now, that's really important because everything else rests on this, right? To have that kinda leadership position that drives high gross margins and recurring revenue gives you the power to invest in the business still. I mean, look at the investment profile. We're continuing to invest for that 20%-25% target growth. We can get efficiencies in key areas, starting with G&A. We have high confidence and visibility that we can drive down G&A. The last several years, we've built a strong world-class global public company infrastructure. We can moderate, and are already doing so, those investments to start to drive. We've got some automation opportunities in the future as well. Just as importantly, in the sales and marketing, I thought, Woody did an excellent job as a sales leader, talking about how he's gonna get more out of the team and the investments that we have. They're pretty straightforward. Sales rep productivity, we're already seeing it. We've driven down our. In the early part of this year, we forward invested, so we were at peak un-ramped capacity. Coming out of this year, we'll be at peak ramped capacity. We will be positioned, and what we get for that is operating leverage in the sales and marketing, with also the opportunity to grow. Sales and marketing provides ecosystem, high recurring revenue, larger share of wallet, lots of areas for us to start to drive more efficiency, to get to that low part of that margin range. R&D, not a lot of operating efficiency planned here. We wanna continue to invest. We think that levers for efficiency will include Google Cloud migration that allows us to be more nimble and more agile in the investments in the R&D, and also sort of a global work structure, labor structure. These are things that we will be working towards and committed to, and management team's already seeing results on this, as are you. Okay. This is the final slide. This is just a recap again of the pillars of BlackLine being positioned for long-term, sustained, profitable growth. The long-term nature of this is that it's a very large market. We want and intend to maintain our leadership position and invest. We'll do so profitably. We love that this business model allows us to meet our customers where they are. For example, in this last year to date, you know, we're running at 60%-65% of our growth profile is coming from the white space. In the past, that's been where that much was coming from the green space. We have these growth levers that we can be nimble with. We'll. That's the end. We're gonna have a break now. Thank you guys very much. I hope that sort of pulled together or brought it home for what you've heard from everyone today. I'd also like to personally, before I ask the executives to come up, thank them. It is really hard for them, when I plant this in the middle of the customer event and then ask them to come and do all of this work, 'cause they are spending a lot of quality time with our customers. I know you want them running the business. It is so valuable to you to spend time with the customers and for them to see the kinds of questions and the kind of people that, you know, own our company and partner with us. Thank you for being here. Thank you to the executives. Now, if you guys wanna come on up. Do we have to have a break? You want a break? Okay. I'm told we have to have a break. We must. Okay, 5-minute break. See you guys back here, and we'll be on the chairs. That was uncomfortable. Doesn't feel very safe to me. Okay. All right. Welcome back. We have our Q&A panel now. Just a couple house rules. We do have two mic runners, so if you do have a question, please raise your hand. One of the mic runners will present the mic. When you do speak, could you just give us your name and the firm you're with, so that the presenters can know who they're speaking with. I'll let you know when we have time for one more question, and then Mark will wrap us up. Oh, we got some questions. Okay. Mic runners. Mike, run us. You got a lot of targets. Go on. One sec. Oh, all right. Matt VanVliet from BTIG. Thanks everyone for doing this. Super helpful. I guess when you're looking at the strategic product uptake, I think you showed 22% today, but it looks like mostly with the transaction matching. What's currently sort of the limiting factor of all these customers that if they go talk to anyone that's using it, they see tremendous value. You guys are up here talking about it. It seems to have very short payback period. Is there something structurally at the companies? Is it the complexity of it? Is defining the problem to which you then have a product to attack? Why isn't that higher and how quickly can you ramp it up from here? Yeah. Thank you. I'm gonna turn it over to a former practitioner, Mr. Polaha. I think he's best suited to answer that for you. Yeah. Thank you for the question. I think, when we look at the portfolio of products that we identify as strategic, I think from an IFM perspective, I think it just takes a little bit of a sales cycle to go through and ensure that the customer understands what the correct order of operation is, right? Because there's a lot of complexity there. It can't be solved in a big bang manner. Normally, we have to take them through a cycle of understanding how we can create quick wins, accretive value over time, and take them on a journey. I think once they get there, they are committed to it 'cause they understand that the problem is not gonna self-solve for sure. For the accounts receivable, I think it's just more of a matter of prioritization, right? We have to make sure that has the right visibility, the right focus within the organization to be able to look at that and fund that as a priority. Hi. Aaron Kimson with JMP Securities. I have a question for Mark Partin on the balance sheet. Given that you have the two tranches of convertible notes with $250 million due in 2024, that may or may not convert, and then the $1.14 billion due in 2026 that are currently pretty far out of the money. Can you talk a little bit about how you're thinking about the convertible debt, especially if the 2024 notes don't convert, and if there's a point where it may hamper your ability to make acquisitions in cash? Great. Yeah. Thanks. Pat warned me you'd be here with that question. Patrick, go ahead. Yeah. I think I could tackle this one. I guess break it up into, you know, pieces here. The 2024 notes, $250 million, if our stock price is over $73 when they come due, it's an instrument X. We have optionality to settle in cash or equity. If our stock price isn't at $73, we have more than enough cash to pay off the $250 million. I think if you look between where our current cash balance is now versus where our debt balance is, there's about a $300 million gap. If you think out to 2026, that gap will shrink to about $200 million by the end of 2024, 'cause you have to think about these things a full year in advance. We're, you know, always planning through 2024 for this. I think at that point, where our free cash flow will be, which everybody's familiar with the model, we have a couple options. Depending upon where our stock price is, we could do another convert for a smaller amount to close that gap, or we could do something we've never done before, and go the path of a traditional term loan, or potentially a line of credit, which, with our free cash flow, where it'll be at that point, will be very manageable to close that gap. Great. Hi. Thank you. Rob Oliver with Baird. Thanks for the great session. I'm not sure who this question is exactly directed to, so I'll just throw it out there. You know, Mark Partin, in your comments at the end, I sort of, I think you touched on some of the investor sensitivity around timing and deals and stuff, basically saying, "Hey, you know, this stuff takes time," and. You know, you're right. Obviously, a lot of customers here are customers that, you know, if we've known your company for a while, we've gotten to know them as well. So you can see that trajectory. And we also heard earlier from, say, Lisa about the customer ambassador program. Like, I heard a couple times today talking to people. Like, one customer told me, "Yeah. What got me over the edge was they put me on with Boeing." Then someone said, "Oh, they put me on with Quest Diagnostics." You know, so, like, I'm just wondering, as you guys think about, your customers really like you, right? Unlike most of our SaaS companies probably. Right? and so that's a unique attribute, right? Do they like you too much? Like, are you not aware? Could you push more? Like, are there ways, I guess, you know, to think about that because, you know, meeting the customers where they are and being there when they're ready, you know, maybe there's something else that's good for them that they just don't quite know yet. Yeah. Maybe I'll start with the answer, but I do appreciate the appreciation of the fact that there's this love between the two parties, and that I think this whole team takes great pride in. I think there's a uniqueness to the buyer and the segment that is a little bit more pragmatic, and they're under the gun with the capacity constraints that they have with all the things they have to get done. You heard from the panel that Patrick led earlier. These are really great practitioners who have been long customers, who are people who are spending significant amounts of money on BlackLine, who are just getting to it as they are able to digest it in the environments that they operate in, which are, again, controlled environments, where same as last year is rewarded traditionally from an audit standpoint. I think that's a little bit of stickiness. I have great confidence that Mark Woodhams runs an organization that is commercially demanding on our behalf. I've been in meetings that sometimes I feel like I might have to pull them back a little bit because they're that commercially demanding about pushing things with customers. I think that explains what the growth trajectory that we're able to get ourselves into and the profitable growth trajectory that we're able to sustain for a long period of time. Hi, Natalie Howith, BofA. My first question is the 20%-25% target CAGR or is it for each of the next 3-5 years? And how much of that is reliant on acquisitions and how is that philosophy gonna change or if it'll stay the same? Thank you. That's the rate of growth that we are targeting for when we get to that 3-5-year period of time, not the CAGR. Okay. Organic growth. Hi, Adam Hotchkiss, Goldman Sachs. Thanks a lot for the time. Wanted to touch on the Accounting Studio because I think when we look at software companies across the space, when a company goes from a point solution to a platform, often that involves an elevation of the conversation to higher levels of organizations, and it a lot of times can lead to sort of a second derivative in adoption. Mark, how do you think about that and what are the customer conversations early on in discussions and sort of with your bigger customers been around that? Then Mark Partin, I think Pete touched on the fact that this was going to be priced separately. How is that impacting your view on the revenue growth model? Thanks. Thank you. I'll start. I think you said accounting studio. Accounting studio. It's catching on. I've had the chance to preview that plan. We've had a number of customers who are design partners that have been working with Pete and his team. The receptivity is really strong to the concepts that we're investing in. I do think you're right. We've already seen it, that we had to add maturity to the go-to-market organizations as we move from single product to multi-product. 'Cause we, you know, the buyer persona might have changed a little bit. The same principles apply, operating efficiency, risk, capacity, et cetera. As we move up into this platform play, which is intentional, I think that we'll continue to have to evolve as an organization, and that evolution will look like a maturity level that involve a greater ecosystem and reliance upon third parties to help create that influence up in the executive ranks. I think it'll also evolve to a blended approach that gets us out of finance and accounting, as well as into IT organizations and leaderships, who in many organizations control this sort of IT architecture and landscape around finance and accounting. It'll be incumbent upon us, and this guy sitting next to me, to develop the right people and processes to be able to support the growth through that. Yeah, I think same answer for pricing, where we can evolve our pricing to move beyond the, you know, where we are today. We think there's opportunity for greater wallet share. As we evolve that, we'll also be looking at the pricing differently. Yeah. Daniel Jester, BMO Capital Markets. This may be two questions, if I can sneak them in. First, appreciate all the context on your penetration rates by geography for SAP. I noticed, you know, you asked 500 customers if I wrote that down, but only 250 in Europe, and there's obviously a massive opportunity there. Can you speak specifically to what you're doing to deepen the penetration in Europe? Secondly, on sort of pricing philosophy. You know, it was telling on the intercompany slides that, you know, from a tax savings perspective, you know, one customer saved $6 million on that. That's a huge number, even compared to some of the other things you talked about in terms of saving FTE. Philosophically, how do you think about intercompany, given the magnitude of the potential tax savings for some of your customers? Thanks. I'll start with the intercompany and the pricing, and then, I think you'll wanna chat on the other one. I think that we've historically driven high ASP and land and expand rates in the intercompany hub. Many of our largest organizations, largest spend profiles with our, within BlackLine are from the intercompany hub customers. Yeah, I think there's a validation of great value there. We've learned a lot about our ability to drive pricing based on a more fluid metric, like based on the value that will be derived. We've started to apply that in IFM, and I think we'll continue to do that. Significant savings potential when you move upstream into that planning stream of the orchestration of how those transactions originate. We think that a lot of that value will accrue to us. That's part of the reason why we're investing so much, why we invested in buying FourQ, adding that complementary capability, as well as the belief that IFM will be one of the leading growth engines for us on the strategic product side going forward, 'cause it's gonna drive such significant share of wallet with these large companies. In terms of Europe? Can I qualify the question? Is it purely SAP or is it generally? Yeah, it's SAP. It's just 'cause there's so much opportunity there. Yeah. Okay. To accelerate that. Let's talk about SAP first. SAP and motivating them to work with you is not quite hand-to-hand combat. Maybe that's the wrong phrase. It's man to man, manager to manager, VP to VP, and every country operates in its own right and therefore you have to focus. In every region where we've got a direct sales force, you know, in the U.K., in France, in Spain, in Germany, et cetera, I won't list them all. You have to make sure that all of those relationships are local and they're built really strong. Yeah. What happens every year, of course, is that they change everybody and move everybody around. But we've become wise to that. What we've learned is the real sphere of influence there is within the solutions management organization and a real top-down approach. The more we can embed in things like RISE, which is their S/4HANA, the more we can get in front of the S/4HANA development and put BlackLine in first. The more we can show success in each country and publish it, the faster the acceleration we'll get, and we're starting to see it. Yeah, you're right, 250 out of 3,000 isn't wonderfully exciting, but the opportunity is. Now, having run Europe or run EMEA for a different company before, there are 157 countries that I can sell to in EMEA. There is no way that I can do that in one go. That's that therefore drives back to the focus piece. I don't know if anybody else wants to add to that. No? I really thought you were being ignored. Yeah. Matt Stotler, William Blair. Thank you guys for all the time today. Super helpful. Maybe one on the platform and the adjacencies and the expansion of functionality with the platform. Good to hear, you know, more about the vision there. You know, I think some things that stood out to me were, you know, specific to IFM. You're expanding in terms of outside of, you know, typical controllership, typical financial close, bringing tax in that case and in that department. Or for FRA, something that's adjacent to the controller, but not really, you know, served by the, you know, consolidation engines or whoever else that are out there today. As you think about, you know, kind of the development roadmap going forward, would love to get your view on the, I guess, what are the most compelling opportunities in terms of, you know, one, adjacent functionality that is not currently well served by other systems. Or, functionality that currently exists within other systems that you think could be subsumed into the controllership or into BlackLine over time. Well, I think that we've been investing in a lot of innovation. Hopefully, that resonated with you in some of the announcements that we've shared with you. Many of those things are sort of an ongoing thing that we'll be involved with, and there's a lot there. Look at how much we'll invest to complete the picture in the financial operations management platform, just post the Accounting Studio, which is first release coming out in 2023. There's plenty of work to be done there. It's premature, I would say, to speculate as to what else we'll drive innovation in. It'll be on that map that I showed earlier in terms of the processes that surround the controller and how that will accrue benefit to the broader office of the CFO. That's, I think, the best I can give you right now. Thank you. Pinjalim Bora, JPMorgan. Thanks for doing this. Very helpful. One question on Studio. I was looking at it. It seems super interesting to me, with the designer and everything. I'm trying to understand how is it different from a generic workflow automation tool, like a ServiceNow or OutSystems or something like that? Why can't they connect with BlackLine or other systems to kind of do similar things? Especially when you're talking about getting outside of BlackLine's boundaries, right? You're talking about connecting with other ERPs. Help me understand that difference. Maybe second part to that is I think you said Smart Close can be used to extend to kind of use over other ERPs using Studio. How is that? Help us understand how is that going to happen? For you, Pete? Yeah, yeah. We're really excited about the architecture. What we're doing is making sure that the orchestration that can be provided. First, we're focused on the internal modules, making sure that we enable everything inside of BlackLine, starting with the financial close, adding in IFM, adding in AR, making sure that you can programmatically orchestrate across each of those and exposing. Think of any block in a process diagram as being a function on the back end that has events and settings and all that kind of stuff. One by one, we're building up this repository of blocks, beginning with our own, but then also with the native connectivity we have. Or not the native, the high fidelity integration that we have with the ERPs. That gives us access to the information deep inside of the ERP. Our connectivity is not read-only, it's bi-directional. We can not only read information in, but we can post information back out to the ERPs. I think there is a minor analogy between what you call the ServiceNow orchestration for IT. We're kinda doing that for the CFO, but in a higher fidelity manner to be able to provide that deep the knowledge of the kinda things that you won't wanna do between the operations and expose those so that business users can connect up those little boxes, and then have all the reporting and dashboards and transparency in how those progress along the way. You're designing with the focus of the accountant in mind, the kind of functionality that's needed there. That's central to our thinking. What do our users wanna be able to do? How are they orchestrating their processes today? What would they like to be able to do? Make those configurable so that they can build their own process. They can edit our process, they can build their own. That's, you know, kind of our approach. The pendulum with regard to Smart Close, you heard from Helene from, I continue to call it Schlumberger, SLB, earlier. Just the great value and the ease of implementation and how powerful that is from a FTE hiring avoidance standpoint from all the tasks and the orchestration there. Smart Close, on-premise agent, deeply embedded into on-premise SAP. We believe our platform will enable us to deliver that type of control, visibility across cloud versions of SAP, non-SAP, the rest of the ERP portfolio delivered through the cloud on our portfolio in the future. Thanks. Alex Sklar with Raymond James. Mark, when we think about the platform vision, I think there's customers can have a lot of different places they can start, so places to land. When you think about your new logos or even your pipeline, any color on how many are starting outside of recs now and how that's changed over the past couple of years? Oh, sorry, me. I'm not used to being called Mark. That's all it is. We are seeing people land with focused products. We're seeing people land with intercompany, whether it's direct or whether it's from SAP. We're seeing people land holistically or a much wider footprint when you look at the SAP relationship. I mean, they've taken us into well converted their competitors' customers into our customers through a what I won't say non-standard, but core plus the strategic product. Yeah. We're starting to see more and more of it. I can't give you a precise number. Well, I could, but I'd be guessing. We're seeing them, you know. You know, the prevalence of starting actually with an intercompany is somewhat more than I expected. The race is an interesting question. We have such a great track record of land and expand, and what I spoke of earlier is this important real estate being the financial close. We'll be planning how we land an AR customer and then have that same expansion that includes the rest of the focus and strategic products, because I think that's a future growth engine for us that we'll look to capitalize on. Andrew DeGasperi from Berenberg. I just had a question about the unramped, sales capacity numbers you showed earlier in that slide, and it showed it appears you were mid-teens, maybe pre-COVID or around COVID, and then obviously grew significantly when you invested. I was just wondering, in terms of the midterm targets, where you have- Mm. Sales and marketing getting to 38%-40%. Yeah. What does that imply for that number? Yeah. We like that range. You saw sort of this historical range at 29% of unramped capacity in front of us. We like that in the 25% to 30% plus, so that we have always a ramping group of people coming online for a growth rate in the 20% to 25%. We like it in that range. It's a 12-month ramp. Right? Enterprise reps that come on board, the training and, you know, getting them up and running is 12 months. It can be shorter, it can be longer, but that's the average. That's the kind of business model we look for moving forward. It's a good question. Thank you. Hi. Great. Steve Enders with Citi. I just wanna ask a little bit on how you're thinking about that, you know, 80%+ of customers that haven't taken this, you know, financial transformation journey. Do you think there's things that, you know, are in your control, whether it's something on the services side or sales and marketing and MAP that could help catalyze that adoption curve? Or how should you think about what a catalyst could be to potentially drive that? Okay. One of the catalysts we see is the academy. You heard Starbucks, if you were there on the stage today, where they said, "Look, we had the product, but we weren't really using it until we got to them, and we said, 'Look what more you can do.'" It's that customer knowledge and trying to empower them with what can be the next steps on their transformation journey. They have to want to take it. We're here to help push them into it. I think there was a question earlier about pushing our customers. We are pushing them. I wouldn't say this outside the room, but adoption, automation adoption is our measure of how well they're using our product. We're pushing them there. They'll get the benefit of it, but no one knocks on my door saying, "Would you help me with this automation adoption, please?" Right? We do have a push and knowledge strategy. Mm-hmm. Thank you. Matt Stotler, William Blair again. Maybe one for Mike, just kinda double-clicking on the intercompany financial management. Mm-hmm. Sure. ICH, I think it was announced, you know, back in end of 2014, right? It's been around for a while. Adoption has been slow. You talk to customers that are using it's clearly a very compelling product, very high ROI. But it's large, it's expensive, a lot of stakeholders and customers that I talk to, a good number of them that are looking at it are just very intimidated by, you know, the prospect of undertaking that. Would love to kind of get your perspective on the broadening to this IFM framework. Mm-hmm. is making customers more willing to initiate that journey. Yeah. If you think there are any changes needed from a go-to-market perspective or from the way you package IFM to make it more consumable for customers. Yeah, thank you for the question. I'd say based upon my interaction with customer, I think that our pre-configurable ability in that create space is driving customers to really look at it in a very much accelerated way, right? 'Cause they understand that they can get quick time to value, and with its automation, and get that level of tax compliance that they're all looking for. I think where the complexity comes is working with them to develop a holistic roadmap. I think with the FourQ acquisition now, we are seeing the customer recognize that now we have the ability to really help them out of the box in a very material way. Hey, Pinjalim Bora again. Repeat question. Mark Partin, I wanted to try digging into that 20%-25% number that you put out there. It seemed like, correct me if I'm wrong, it seemed like you're talking about the growth rate after 3-5 years. As of this year, I think the guidance is somewhere around 23%. Yeah. That target, it's somewhere around 23%, right? How do we think about that journey between this year and next year? Obviously, we have a tough macro environment coming up. Is it going to be a little bit of an U curve? How do we help us understand, think about that journey. No, I understand the question. I don't wanna give you the answer to that. We're still early in the fourth quarter. Fourth quarter's a big contributor. We will provide guidance, of course, for next year, when the time comes in February. But the stated goal for us was important, I think, for our investors and for you guys to know that. Look, the question about how the pace of the market movement, right? We've talked before where we think we could be, and based on the Rule of 40, that target, based on the profitability and the growth between 20-25. That's where we find the right place in that medium term while macro sorts itself out. That's where we think this business can grow in that land and expand model. Clearly, there are things that can move the needle, right? Things like SAP partnership or, you know, other opportunities. The place for us that we feel like this business moves at the right pace profitably is the 20%-25%. I think giving ourselves that kind of time to move past macro volatility is the right approach in that 3-5-year range, and that's where we wanna land. I think importantly, this is one of those markets that can drive that for a very long time. That's why we kept putting up the TAM. You guys are sick of that, right? Is that this is early. We can maintain our market leadership position, we can invest, we continue to innovate, and that we can be a long-term grower in that range. That's our target. Great. Thank you. Rob Oliver from Baird again. Thanks. I had a couple questions for Pete Hirsch, if you don't mind me squeezing in two. One was, Pete, you talked about the importance of the connectors and that customers with connectors grow faster. Can you explain why that is? I mean, why does an API cut it here? 'Cause clearly, one of the, you know, and maybe I'm late to the game, but it really seems like this is an important part of the expansion motion for you guys here. Is a connector available to all of your customers, or is there a revenue level at which it doesn't make sense, or is that not the right way to think about it? The second is, you know, you put up data about the amount of data being processed or the amount of transactions. I think it was 57% year-over-year. I remember when I first met you a few years ago when you first came on and you were doing the GCP move. It seems as if the move to strategic products right now is like, you know, maybe moving even faster than perhaps you initially thought, or I don't know if that's the case. But just wanted to get your sense for how you feel relative to what could be a big hockey stick in those volumes as these initiatives come on board. Thanks. Sure. Great questions. With regard to the connectors, a customer can always do their own customized integration. They can take on that work. That's a big project. We do have customers, some of our bigger customers have taken on that custom integration work. That requires them to know detailed internals of their ERPs. They've got to know the right queries to build, they've got to know how to post journals, they've got to know all this stuff. It's a big barrier, right? If you can get an out-of-the-box connector that can be tailored pretty quickly, your customers can immediately get access to that data, go deep into the subledgers. Again, not just superficially. Anybody can export their general ledgers and stuff, but we're talking about going deep and it requires that kind of knowledge. It's an accelerator. It's an accelerator for companies to adopt and integrate that into their process. Having said that, there's nothing that prevents them from doing that themselves. I think that when we look at the connectors that we've built and partnered to build, we think of it kind of as a Pareto, you know, and we focused on SAP connector first because, you know, it was our biggest customers. Then, of course, we took on Oracle and NetSuite and all these others. We're building out these according to, you know, customer volume and all that. It's not a matter of how big a customer has to be to take one on. We make these connectors available at a price. We charge for connectors. It's not a big barrier for customers to do that. It's just an accelerator for that to do. The more we invest in that integration, we're coming out with not only the connectors, but an integration platform this quarter that's gonna make that even higher fidelity, and they can do more with that. That just makes it easier, you know, for customers and allows us to do more with it. That was the question. Then the other question was on the growth of the transaction volume. We've seen this opportunity from the beginning. We've had interactions with you know, quite a few customers, you know, about their long-term desires, you know, and what kind of problems they wanna solve. We've known that this has been out there, and that's why we took it on early to set some big goals for us to be able to support, you know, an order of magnitude scale, you know, growth over where we started off at. At some point, you know, you outgrow the database really quickly, you have to look at new storage engines on the back end, how you process that. That's why, you know, the public cloud has been such an important enabler for us. No, we've seen this opportunity. We're excited about it. Of course, it ties back, in this case, mostly to transaction matching, because that's where you get those kind of volumes. Yeah, we see them in consumer, you know, financial service, banking. We see much higher volumes of that kind of transaction. We see a big opportunity. We have time for one more question. I think. You have to make it two more. Fred needs one. Matt VanVliet from BTIG again. I guess when you're thinking about the overall timeframe for completing the GCP migration, what's been the catalyst so far for companies to go ahead and do that? How much are you pushing them versus kind of offering the upside of the scalability and some of the things you just talked about, you know, the newer products maybe function better there? And then how frequently or how successful are you using that as an upsell, cross-sell mechanism of saying, "Look, we're gonna go in. There's gonna be work that has to get done. This is probably the opportune time to add some of these new, especially strategic products." And sort of how much can that be a driver over the next, you know, several quarters as you wrap that up? Thank you. In terms of our migration, what we've done is, you know, we're building all new capabilities in the public cloud so that it's centrally accessible, you know, regardless of where you are. That gives us freedom, you know, to place, you know, on where a customer is and where they can adopt that. Remember, our goal for the public cloud was not a lift and shift. We're not looking at it as just another data center, and I think maybe a lot of companies get sucked into that trap. You got the two extremes. You've got the lift and shift model, where you're just thinking new data center. You've got the other extreme, where you've got companies that completely reimagine their architecture, and they never make any progress because they're not tangibly scheduling and moving their customers. We think we found a good balance. Critical in our strategy is a modernization, building out all this new capability, the big data, the Accounting Studio, all the new things that we're doing there. It's that mix of pragmatism and new modernization at the same time. That's given us the flexibility to be able to gauge our migration speed. Our goal is to make it as transparent as possible for our customers. You know, we do not want them to feel they're interrupted. We wanna make sure it's as seamless as it can be. We started in North America, and we got that moving nice and smoothly. We're progressing through those in a nice, healthy clip. We have not seen a lot of resistance from our customers. You know, our customers are accepting the public cloud. It's not news like it was five years ago or ten years ago. People, customers, in fact, almost every customer has something going on in the public cloud anyway, so that's not a big deal. After we did North America, we moved to Europe. We're just, you know, progressing on. We're, you know, kinda giving customers notice, you know, 90 days notice. You know, this is the next wave of customers going out. You know, it'll be on this particular day. They're ready for it. We migrate them over. We've got all the automation scripts. It's a very painless process. Seems to be going pretty well. All right, bring us home. All right, thank you for squeezing me in. Fred Lee from Credit Suisse. Since we don't get much airtime from Pete, and we don't get to meet him that often, one more question for you. If you had twice the R&D budget- I would love that. What are some of those projects you'd be working on today? Going back to when you did launch on GCP, philosophically, why not the other hyperscalers, and where are you within that relationship today? Moving over to Woody, do you ever get any pushback or any feedback that, you know, they wish you had your product launched on Azure and/or another hyperscaler? Last question for Lisa, if within- Okay. Where's it say? Clever. Go ahead. Just really this is a quick one. Internally, you know, as you work with your customers, what's that tipping point where you begin to see broad adoption internally, right? Is it, you know, is it something along some journal entry they see some rapid ROI and some great automation, and then they adopt the rest of the, you know, across the rest of the organization? Just curious on that front. Thank you. All right. Let's start with Pete. All right. Since you asked three, I'll try to keep mine short. I quickly said I would love it, but you know what? Something about having a fixed budget is very focusing. It lets you really spend the time that you need to focus specifically on the key things, prioritize that, and make sure that you don't spread yourself too thin, 'cause it's not a body problem. When you're innovating, if it's incremental innovation, you can throw bodies at it, you can staff up easily. When you're doing big-ticket items and talking about studio, I mean, that was dramatic. Integration platforms, you're talking about all the connectivity, you're talking about the big things that we do. You need to be focused, and that requires leadership involvement and everything. Yeah, it'd be nice to have twice the budget, but on the other hand, I think it's also very focusing and it gets us to have the right conversations, establish the right priorities. Mike. So. 1 prospect in four and a half years did not want to use GCP. They wanted to choose AWS. Extended the length of the contract negotiation by 3 months. It might be self-interested. We resolved it. That was an easy answer. Okay. Mine is not so easy. Your question was the tipping point for customers. There's a few aspects to this. I think first is the value realization they have and their ability to articulate that within their company. We have been on stage today to talk about that so that they get more behind them. They're not always the best at articulating the value, so we continue to reach out and help them, right? That's one. The other is they have to be ready. I can't always control that. It could be changes in their environment. It could be a merger. They could be moving to a shared services model. All of a sudden they're gonna be like, "Oh my gosh, how are we gonna do this? Help us." Another is I'm gonna go back to the Optimization Academy. You know, customers coming out of there, a high percentage of them wanna follow up with other optimizations because now they can see what they can do. I was speaking to a customer last night, and they said, "You know, I realized that it wasn't just in my department, but if I worked with these other departments that influenced the work on my department and we automated that, everybody would win. Now, I'm not used to going over there and convincing them of it, but I need to go do that now." Then I'd say the last piece is all of the outreach we have for our customers. We target it. We know what they own, what they don't own, what they're using, and we can predict what their next logical step should be, so they're gonna start getting bombarded with some of those great ideas. That's how we do it. The tipping point comes a few ways. Thank you. You're welcome. All right. Thank you. And on behalf of all of us, whether you're on the buy side, the sell side, or whatever you do, thank you for your interest, ongoing interest and support of BlackLine. Hopefully, today's session, your ability to interact more broadly with our management team, as well as these lovely customers that we have and support and learn about our plans for the future are informative and, appreciate your support. Thank you.