BlackLine (NASDAQ:BL) management said its multi-year transformation effort drove record bookings and improving operating leverage in the fourth quarter of 2025, highlighting progress on a platform-based commercial model, enterprise momentum, and increased focus on AI-enabled automation.
Platform strategy drove record bookings and higher RPO
Chief Executive Officer Owen Ryan said BlackLine’s shift from seat-based subscriptions toward a “platform” model helped produce the “strongest booking quarter and year” in the company’s history, with full-year bookings growth of 22%. He added that nearly three-quarters of fourth-quarter bookings came from existing customers, which management tied to platform migrations and increased adoption of newer offerings.
CFO Patrick Villanova said total RPO grew to $1.1 billion, while current RPO grew 13%, which he described as reflecting “current market demand.” Platform pricing ARR was 11% of eligible ARR at the end of Q4, up from 4% at the end of Q3, with Villanova framing the increase as early market acceptance of the new commercial model.
Enterprise momentum and larger deal sizes
Ryan said BlackLine is increasingly focused on larger mid-market, enterprise, and “mega enterprise” customers, and that the company now serves approximately 70% of the Fortune 100, up from 50% in 2022. He said new customer deal sizes were up 35%, and average new enterprise deal sizes rose 41% in Q4, which management linked to larger platform deals and enterprise wins.
Management cited several large deal examples discussed on the call, including:
- A seven-figure annual contract value (ACV) deal with a global food services company using BlackLine’s financial close solutions with Studio 360 and platform pricing
- An enterprise win with National Oilwell Varco in oil and gas
- A platform deal with a global memory and data storage company, with management noting early expansion discussions for intercompany and Verity AI
- The return of Invesco as a customer after the firm had moved to a lower-cost ERP competitor
Villanova added that the number of customers paying more than $1 million in ARR rose 20% to 85, and customers paying over $250,000 increased 14%.
Retention, churn, and upmarket shift
Management acknowledged ongoing retention pressure tied to BlackLine’s strategic shift away from the lower middle market. Ryan said Q4 was expected to be the “peak” of the churn and attrition cycle, while stating the enterprise cohort remained strong with a 95% revenue renewal rate and 107% net revenue retention in the quarter.
Villanova reported a Q4 revenue renewal rate of 92%, citing continued lower middle market churn and noting that churn related to external M&A reduced the metric by about two points. Net revenue retention was 105%, driven by expansion with existing customers, “particularly those moving to our platform,” according to Villanova. He also said enterprise net revenue retention improved to 107%.
Looking ahead, Villanova said the company expects retention to improve throughout 2026 and return to the “mid-90s” overall, including the mid-market, while Ryan said lower mid-market headwinds should subside in the first half of 2026 as structural changes take effect.
AI and Verity agents: adoption growing, monetization still early
Ryan and CTO Jeremy Ung positioned BlackLine’s AI approach around “data, context, and agency,” emphasizing the need for accuracy, transparency, auditability, and security in finance workflows. Ryan said customer usage of AI features more than doubled quarter-over-quarter, and nearly 20% of customers are now using at least some AI capabilities.
Management described early AI adoption as centered on more “generative” capabilities, including tools such as Journal Risk Analyzer, Verity Flag, and document summarization, with customers still maintaining meaningful human review. Ung said customers are excited to adopt AI but are moving cautiously due to policies and controls, and Ryan noted AI decisions often involve not just the CFO/controller but also the CIO and chief legal officer.
BlackLine outlined a pipeline of “agentic” offerings under the Verity brand:
- Verity Prepare, an AI-powered reconciliation agent, previewed in Q4 and now in early access for platform customers
- Verity Collect, planned for Q2, intended to automate manual collections tasks such as predicting payment behaviors and dunning
- Verity Accruals, being sold currently, aimed at higher-judgment accruals processes and designed to pair with the journal solution
In Q&A, Villanova said the largest AI-related financial contribution embedded in 2026 guidance is the “day-one uplift” from customers moving to platform pricing, while consumption-based monetization from agents is “not overly material” in 2026.
Financial results, capital allocation, and 2026 guidance
For Q4, Villanova reported total revenue of $183 million, up 8%, including subscription revenue growth of 8% and services revenue growth of 17%, which he attributed to accelerated customer go-lives and implementations. ARR was $702 million, up nearly 10%, with a roughly 1.5-point benefit from FX. Calculated billings grew more than 9% in the quarter, and trailing twelve-month billings growth improved to 9%.
On profitability, the company reported non-GAAP subscription gross margin of 82% and non-GAAP gross margin of about 80%. Non-GAAP operating margin was nearly 25%, and management cited improved sales productivity and a 30% decline in customer acquisition costs for the quarter. Villanova said the Google Cloud Platform migration is complete and that the company expects gross margin to improve as it stands down legacy data centers and benefits from lower cost to serve.
BlackLine reported operating cash flow of $27 million and free cash flow of $20 million, which Villanova attributed largely to working-capital variability. The company ended the quarter with approximately $778 million in cash, cash equivalents, and marketable securities and $896 million in debt. Villanova said notes due in March 2026 are expected to be retired with cash on hand, decreasing fully diluted share count by about 1 million shares (incorporated into guidance). The company also repurchased $34 million of stock in Q4 (632,000 shares) and more than $235 million during full-year 2025 (4.5 million shares).
Guidance provided on the call included:
- Q1 2026 GAAP revenue of $180 million to $182 million (about 8% to 9% growth), non-GAAP operating margin of 18.5% to 19.5%, and non-GAAP net income of $31 million to $33 million ($0.44 to $0.46 per share) on about 74.5 million diluted weighted average shares
- Full-year 2026 GAAP revenue of $764 million to $768 million (about 9.1% to 9.6% growth), non-GAAP operating margin of 23.7% to 24.3%, and non-GAAP net income of $172 million to $180 million ($2.37 to $2.48 per share) on about 75 million diluted weighted average shares
Villanova also noted that Q1 is typically the company’s lowest operating margin quarter due to payroll taxes tied to bonuses and commissions and costs related to the annual sales kickoff, with margin expected to expand in subsequent quarters.
About BlackLine (NASDAQ:BL)
BlackLine, Inc is a leading provider of cloud-based software solutions designed to automate and modernize the finance and accounting function. The company’s flagship offering, the BlackLine Finance Controls and Automation Platform, enables organizations to streamline critical processes such as account reconciliations, journal entry management, intercompany accounting, and transaction matching. By delivering a centralized, real-time view of financial data, BlackLine helps companies improve operational efficiency, enhance compliance and strengthen internal controls.
Key products and services within the BlackLine platform include Account Reconciliation, Task Management, Transaction Matching, Journal Entry, and Intercompany Hub.
