Use of Non-GAAP Financial Measures To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S.generally accepted accounting principles, or GAAP, BlackLine has provided in this release and the quarterly conference call held on May 7, 2024, certain financial measures that have not been prepared in accordance with GAAP defined as "non-GAAP financial measures,” which include (i) non-GAAP gross profit and non-GAAP gross margin, (ii) non-GAAP operating expenses, (iii) non-GAAP operating income (loss) and non-GAAP operating margin, (iv) non-GAAP net income (loss) attributable to BlackLine, Inc.(v) diluted non-GAAP net income (loss) attributable to BlackLine, Inc.per share, and (v) free cash flow.
These risks and uncertainties include, but are not limited to risks related to the Company’s ability to attract new customers and expand sales to existing customers; the extent to which customers renew their subscription agreements or increase the number of users; the impact of current and future economic uncertainty and other unfavorable conditions in the Company's industry or the global economy, the Company’s ability to manage growth and scale effectively, including entry into new geographies; the Company’s ability to provide successful enhancements, new features and modifications to its software solutions; the Company’s ability to develop new products and software solutions and the success of any new product and service introductions; the Company's ability to effectively incorporate artificial intelligence and machine learning technologies (AI/ML) into its platform and business and the potential reputational harm or legal liability that may result from the use of AI/ML solutions and features; the success of the Company’s strategic relationships with technology vendors and business process outsourcers, channel partners and alliance partners; any breaches of the Company’s security measures; a disruption in the Company’s hosting network infrastructure; costs and reputational harm that could result from defects in the Company’s solution; the loss of any key employees; continued strong demand for the Company’s software in the United States, Europe, Asia Pacific, and Latin America; the Company’s ability to compete as the financial close management provider for organizations of all sizes; the timing and success of solutions offered by competitors; including competitors' ability to incorporate AI/ML into products and offerings more quickly or successfully; changes in the proportion of the Company’s customer base that is comprised of enterprise or mid-sized organizations; the Company’s ability to expand and effectively manage its sales teams and their performance and productivity; fluctuations in our financial results due to long and increasingly variable sales cycles, failure to protect the Company’s intellectual property; the Company’s ability to integrate acquired businesses and technologies successfully or achieve the expected benefits of such transactions; unpredictable and uncertain macro and regional economic conditions; seasonality; changes in current tax or accounting rules; cyber attacks and the risk that the Company’s security measures may not be sufficient to secure its customer or confidential data adequately; acts of terrorism or other vandalism, war or natural disasters including the effects of climate change; the impact of any determination of deficiencies or weaknesses in our internal controls and processes; and other risks and uncertainties described in the other filings we make with the Securities and Exchange Commission from time to time, including the risks described under the heading "Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 23, 2024.
Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited) Quarter Ended March 31, 2024 2023 Cash flows from operating activities Net income (loss) attributable to BlackLine, Inc.$10,829 $(12,008)Net income and adjustment attributable to redeemable non-controlling interest 3,941 5,277 Net income (loss) 14,770 (6,731)Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 12,648 12,004 Change in fair value of contingent consideration — 3,106 Amortization of debt issuance costs 1,385 1,362 Stock-based compensation 18,562 20,438 Noncash lease expense 1,558 1,498 Accretion of purchase discounts on marketable securities, net (8,542) (7,519)Net foreign currency losses 38 473 Deferred income taxes (1,041) (187)Provision for credit losses — 5 Changes in operating assets and liabilities: Accounts receivable 45,696 30,166 Prepaid expenses and other current assets (1,964) (5,268)Other assets 2,406 467 Accounts payable (6,792) (9,518)Accrued expenses and other current liabilities (14,774) (10,653)Deferred revenue (11,830) (1,820)Operating lease liabilities (1,710) (1,654)Other long-term liabilities 15 (3,302)Net cash provided by operating activities 50,425 22,867 Cash flows from investing activities Purchases of marketable securities (294,961) (311,246)Proceeds from maturities of marketable securities 322,700 328,800 Capitalized software development costs (6,450) (6,879)Purchases of property and equipment (299) (1,676)Net cash provided by investing activities 20,990 8,999 Cash flows from financing activities Principal payments under finance lease obligations (258) (241)Proceeds from exercises of stock options 314 2,411 Acquisition of common stock for tax withholding obligations (10,981) (12,403)Net cash used in financing activities (10,925) (10,233)Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash (212) (41)Net increase in cash, cash equivalents, and restricted cash 60,278 21,592 Cash, cash equivalents, and restricted cash, beginning of period 271,363 201,207 Cash, cash equivalents, and restricted cash, end of period$331,641 $222,799 Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets Cash and cash equivalents at end of period$331,401 $222,557 Restricted cash included within other assets at end of period 240 242 Total cash, cash equivalents, and restricted cash at end of period shown in the consolidated statements of cash flows$331,641 $222,799 BlackLine, Inc.
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