Ladies and gentlemen, thank you for standing by. And welcome to the Fourth Quarter 2020 BlackLine Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. I would now hand the conference over to your speaker today, Alex Geller, Vice President of Investor Relations.

Good afternoon and thank you for your participation today. With me on the call is Marc Huffman, Chief Executive Officer of BlackLine; Mark Partin, Chief Financial Officer; and Therese Tucker, Founder and Executive Chair. Before we get started, I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans, objectives and expected performance, in particular, our guidance for Q1 and the full year are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this call. While we believe any forward-looking statements we may make are reasonable, actual results could differ materially because the statements are based on our current expectations as of today and are subject to risks and uncertainties, including those stated in our periodic reports filed with the Securities and Exchange Commission, in particular, our Form 10-K and Form 10-Q. We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Also, unless otherwise stated, all financial measures disclosed on this call will be non-GAAP. A discussion of why we use non-GAAP financial measures and information regarding reconciliations of our GAAP versus non-GAAP results is currently available in our press release, which may be found on our Investor Relations website at investors.blackline.com or on our Form 8-K filed with the SEC today. Now, I will turn the call over to Marc to begin.

Good afternoon, everyone, and thank you for joining us today. As I look back on 2020, what began as a year of such promise, quickly shifted to a year that tested our resilience and our ability to adapt. I’m incredibly proud of what BlackLine was able to accomplish in 2020, as we continued to drive growth, scale the business and maintain a strong leadership position, all while leading with compassion towards our colleagues, our partners, and of course, our customers. I’d now like to take an opportunity to highlight the initiatives that enabled our success throughout the pandemic and that we believe will continue to drive future growth. First, our commitment to serve our customers has grown stronger than ever. Throughout the year, we showcased just how much we care for our customers with outreach efforts supported by nearly every department in BlackLine, spanning a variety of programs, from education, training and development, to coaching sessions, relief programs and some complimentary products and services. We have received multiple accolades for these efforts. But the greatest reward comes from our customer testimonials and hearing how BlackLine enabled a seamless month-end close in the face of an unprecedented pandemic. In these difficult times, we remain true to our founding principles to serve our customers, which has strengthened our relationships and driven expansion of existing accounts. I’m very proud of our efforts to serve our customers and our commitment to their success, and I believe this compassion will continue to differentiate BlackLine. Second, we invested in key areas such as talent, product, customer success and M&A to make our organization stronger. In 2020, we increased our pace of hiring, adding senior leaders across the organization in strategy, alliances, product, technology and R&D. We accelerated our investment in R&D and product innovation, resulting in new products, new functionality and an aggressive product roadmap to maintain our leadership position. We retained our capacity and services and sales, and added headcount to our customer success teams, driving strong results in customer account growth. And last, but certainly not least, we made a strategic investment in our long-term vision to best serve the controller with our largest acquisition ever. The acquisition of Rimilia marked our entry into the adjacent market of accounts receivables automation and grew our total addressable market to more than $28 billion. History has shown that companies who invest in a downturn are often better equipped to respond to demand when the economy recovers. We believe these investments have made BlackLine stronger and well-positioned to capitalize on an improving macro economy in 2021. Third, we continue to use our expertise to bring value to the market. When you engage with a customer or prospect around their corporate goals, the conversation changes to a strategic discussion of proven use cases, processes that scale and real value creation. Our Modern Accounting Playbook or MAP offering is one example of how BlackLine uses its expertise and leadership to create value and has been a strong growth lever for us in the mid-market. At our BeyondTheBlack event in November, we extended this initiative with the introduction of our collaborative accounting experience as a framework to guide customers and prospects along every step of their modern accounting journey. We have turned the insights and learnings from nearly 300,000 accountants across more than 3,400 customers into leading practices that accelerate time to value and create great customer experiences. Our ability to lead our customers has continued to generate returns as we land new accounts, expand our footprint with existing customers, generate goodwill and further strengthen our competitive position. And fourth, we came up with new and innovative ways to virtually engage with and connect to the finance and accounting community. From webinars to finance transformation series, to best practice summits and strategic clients forums, we continue to host educational and world-class events that focused on urgent topics, such as the remote close and cash optimization. Our BeyondTheBlack event was our largest virtual event yet and it was a huge success. BeyondTheBlack attracted 12 times as many attendees compared to the in-person event we held last year. With nearly 18,000 registrants, we had representatives from more than 70% of our existing customers and more than 700 new prospects. This event is about bringing our community of accounting and finance leaders together to educate them on how modern accounting can support their organizational goals. Nearly 4,000 attendees participated in the SAP Track to learn how to enable financial close excellence within their SAP Instance. We had more than 2,000 attendees tune into our newly introduced BlackLine Cash Application Breakout session, formerly known as Rimilia Cash. We received hundreds of positive reviews from customers in G2, TrustRadius and Gartner Peer Insights, as well as a best-in-class virtual event Net Promoter Score of 62 for the event. And of course, the event generated new opportunities and interest from both new and existing customers. These touchpoints have enabled us to reach a broader audience in 2020 than we could have in prior years. We believe this degree of engagement and awareness will continue to enhance our brand recognition and drive future opportunities. These initiatives combined with a continued improvement in the demand environment drove another quarter of strong results. We saw momentum across all facets of the business, resulting in better than expected performance for the quarter. For instance, we continue to see an increasing trend of large deals both new and expansion, suggesting companies are committing to large digital transformation projects. Our existing customers continue to progress on their finance transformation journeys with upsells, cross-sells and the addition of strategic products. Following three consecutive quarters of large deal momentum, we feel good about the pipeline for large transformational deals in 2021. Our MAP offering continues to gain strong traction in the mid-market. MAP generated a record number of new logos in Q4, eclipsing the earlier record and commanding a higher average sales price. From a sheer volume perspective, nearly half of our new logo volume in 2020 came from MAP logos alone. As mentioned earlier, our MAP offering is aligned with our value approach to selling, which is making it easier for customers to buy and creating greater consistency for our mid-market sales engine. SOLEX was another strong performer resulting in its largest quarter to date. As our SOLEX partnership has matured, it continues to drive more revenue at a greater volume of new logo adds. In 2020, SOLEX added nearly twice as many new logos compared to 2019. Additionally, now that this partnership is two years in, we are also starting to see account expansion with the SOLEX add-on business throughout the year. We have a very strong land and expand model, and although the primary goal of the SOLEX partnership is to generate new logo ads, we expect SOLEX customers will experience account growth similar to that of our direct customers. Given the continued progress with this relationship, we believe we have a good setup for growth in 2021. Our new cash application product has generated a significant amount of interest among existing customers. We signed our first BPO joint deals in the quarter as extensions to existing contracts, which allowed for accelerated sales cycles. We also captured a small number of new cash applications logos due to the urgent need surrounding cash optimization. Cash application has only been available for a short time, but early indicators are strong and we like what we’re seeing in the market. Moreover, our partner ecosystem continues to drive new logos and account expansion, and we saw that trend continue in the fourth quarter. Our partners tell us that their customers urgently need help with remote closing and cash optimization. We believe our partner ecosystem will continue to validate our value proposition and influence key decision makers in 2021. Throughout 2020, we’ve seen continual improvement and Q4 marked yet another quarter of increasing activity and momentum, albeit not at the same level we experienced pre-COVID. With that said, we exceeded expectations in the current macro environment and delivered strong Q4 2020 results that we’re really pleased with. Looking to 2021, in January, we held our company-wide kickoff event, where I shared with our employees around the globe how committed we are to them, to our customers and to their future success. Just as importantly, we laid out our strategy for the upcoming year. Let me share with you now what I shared with them. Our strategy for 2021 is to continue to invest and build on our long-term initiatives to fuel accelerated growth. From a product perspective, our vision is to improve and automate finance and accounting processes to be the most indispensable platform for the controller. In 2020, we introduced new functionality and products, such as cash app and account analysis, and we discussed our vision for the touchless close. In 2021, we will sustain and extend investments in our existing products and assess the market for adjacent opportunities to deepen our product offering and drive adoption of our platform. As the pioneer and leader in our space, we take that role very seriously. As such, we will continue to focus on strengthening our competitive advantages. We believe our ability to serve our customers, and our commitment to customer success is a huge differentiator for BlackLine. In 2021, we will continue to leverage our partner ecosystem, invest in our customer success teams and use our expertise through offerings such as MAP and a customer journey framework to help more companies make the move to modern accounting, accelerate their time to value and ensure great customer experiences. And of course, we will continue to drive our organization and build a more inclusive, equitable and diverse workplace. We entered 2021 stronger than we were a year ago and we believe we’re well positioned to capitalize on the huge market opportunity ahead of us. The key to success in this upcoming year is continued improvement in the demand environment. Throughout 2020 we saw this increase and as we move into 2021, we are confident that CFOs and controllers are wrestling with these same challenges more than ever before. However, timing in this macro environment will affect everything. Our expectation is to continually come up the curve throughout the year. We look forward to sharing more about our 2021 and long-term strategy at our Analyst Day on March 9th. Before we discuss financial performance, I wanted to thank and congratulate Therese on building such a strong and unique company. Therese started this journey that became BlackLine nearly 20 years ago. The position we have in our space, our brand, reputation, market leading products, and customer loyalty are all a reflection of the past 20 years of her life’s work. When I woke up on January 1st, my inaugural day as CEO of BlackLine, Therese was the first person to reach out with an encouraging and supportive message. I’m grateful to be in a position to grow this company and incredibly excited to have a front row seat for the opportunity ahead. And now, I’ll turn it over to Therese.

Thank you, Marc, and good afternoon, everyone. I’d like to remind everyone that this transition has been long in the works and has been very deliberate. Mr. Huffman and I are now going on nearly three years of working together. So this feels more like a natural next step versus a big change. Over these past several years, I have seen Marc demonstrate great leadership and drive effective change at BlackLine. And I have every confidence in his ability to scale BlackLine as we entered this next phase of growth. Now that I am in my new role as Executive Chair, my primary responsibility is to facilitate Board discussions and support Marc. And of course, when called upon by the team, I am always happy to assist with serving our customers and deepening our product offering to areas that will continue to define and differentiate BlackLine in the years to come. Finally, I wanted to thank all of the investors and analysts who have supported BlackLine on this journey, you have all been a major part of our success. I have really enjoyed my time as a public company CEO and I have enjoyed meeting with you, working with you, and I have truly learned so much. And with that, I’ll turn the call over to Mark Partin.

Thank you, Therese, Marc, and good afternoon, everyone. I’d like to start off by reiterating Marc’s praise for our employees and what they have been able to accomplish over this past year. I am so proud of how BlackLine has been able to adapt, lead and show strength and resilience in a year of such unprecedented challenges. This is a testament to our culture, our foundation to serve and our role as the market leader. Now on to the numbers. For the full year 2020, total revenue grew 22% to $351.7 million. Given the difficult and challenging environment, this was a good result. We saw an improving demand environment throughout the year and that recovery continued into Q4 to close out a solid end to the year. Our gross margins remained high at 83%, and with the help of work-from-home mandates for our employees and virtual marketing events, we achieved record profitability and cash flow with $46 million in net income and $55 million in cash from operations. For the fourth quarter, total revenue grew 19%. This growth represents a decline from the prior year resulting from the macro environment in 2020. We continue to see increasing demand with strong elements of growth returning to the business, such as an improving demand environment for large deals, continued progress with SOLEX and the success of our MAP initiative. We remain optimistic about long-term growth given the progress that we are seeing across our initiatives, and the continued strength and stability in the underlying fundamentals of our business model in the fourth quarter. For instance, our international business was 26% of total revenue, up from 24% in the prior year. Revenue from our SAP partnership totaled 24% of total revenue, up from 23% in Q3, and as Marc mentioned, we saw revenue from our SOLEX partnership accelerate in Q4. Seventy percent of large deals in the quarter involved the partner, which is in line with the prior year and it’s consistent with our go-to-market model expectations. Strategic products represented 19% of sales for the quarter, coming in at the high end of our anticipated range of 15% to 20%, with solid performances from all strategic products. Moving on to our key performance metrics for the quarter, we added 207 net new customers in the quarter for a total of 3,433 customers, including the addition of approximately 100 net new customers from the Rimilia acquisition. As we anticipated, our dollar base net revenue retention rate ticked down slightly in Q4 to 106%. The macro environment throughout the year has impacted demand, especially at the high end of the enterprise, and it limited our near-term expansion efforts within our existing customers. We do expect demand to return upon market recovery. In Q4, we generated net income attributable to BlackLine of $13 million. We generated $15 million in operating cash flow and $8 million in free cash flow for the quarter. We finished the year with approximately $543 million in cash equivalents and marketable securities. Over the past several years, we’ve seen consistent improvement in net income, driven predominantly by operating leverage. In 2020, we accelerated well above trend to a 13% net income margin. Even with increased investment in customer success, our technology and product roadmap, primarily due to cost savings associated with mandatory work-from-home regulations and virtual events. In 2021, we anticipate margin compression, as we intend to make targeted investments in our public cloud infrastructure to support the integration of Rimilia and capture the large and growing AR automation opportunity, and to build out our services and support team for evolving customer and product mix. These expenses will ramp throughout the year and we expect the impact on overall gross margin will be 2 to 3 points in the near term. Additionally, operating expenses vary on a quarterly basis, with a step-up in the first quarter driven by annual salary increases, payroll tax reset and annual kickoff events. We expect to generate operating leverage and additional margin throughout the year as we execute on the topline and the demand environment improves. Finally, we are modeling return to travel costs in the back half of 2021 for many areas of our business. This remains uncertain for our business, but modeling the cost gives us appropriate flexibility as the year develops. We remain on track to achieve our long-term target model. Turning now to guidance, we feel good about where we ended the year and are set up going into 2021. At this point in time, though, there’s still uncertainty regarding when the broader economy will return to a normal cadence. As such, our approach to our 2021 guidance remains pragmatic. For the first quarter of 2021, total GAAP revenue is expected to be in the range of $95.5 million to $96.5 million. On the bottom line, we expect to report net income attributable to BlackLine in the range of $2.5 million to $3.5 million, or $0.04 to $0.06 on a per share basis. Our share count will be approximately 62.3 million diluted weighted average shares. For the full year 2021, total GAAP revenue is expected to be in the range of $410 million to $415 million. On the bottom line, we expect to report net income attributable to BlackLine in the range of $24 million to $26 million, or $0.38 to $0.41 on a per share basis. Our share count will be approximately 62.7 million diluted weighted average shares. In summary, we are very pleased to see an improving demand environment and continued execution from the company to close out a solid end to the year. We remain focused on capitalizing on the long-term opportunities for accounting transformation and driving further momentum in our business. And now, we will take your questions.

Thank you. Our first question is from Matt VanVliet with BTIG. Please go ahead with your question.

Yeah. Hi, everyone. Thanks for taking the question and great job on closing out a strong year there. I guess, looking at the overall partner community, tremendous involvement on the overall deal flow. Maybe as you think about the SOLEX agreement, what are you hearing most from customers driving demand and what areas from a functionality standpoint are you landing most frequently with, and then what’s maybe more common as kind of a follow-up land and expand?

Thank you. With regard to SOLEX, we saw continued progress in Q4, strong logo ads. And so to answer one of your questions there, what are we landing with? We’re landing sort of with our traditional base use case, helping customers organize and digitize their close, provide more visibility, as well as core balance sheet substantiation type activities. That’s the typical land. Occasionally, there are some other unique attributes to it that will land there. But our base use cases are what we land most frequently with SOLEX and that’s driven some nice logo volume. The additional question that you had in there was, what are we seeing? We’re seeing a return and improvement over time, which seems to month-by-month reveal itself a little more and more to us. That companies who may have gone to the sidelines during the early time of a pandemic have reassessed their priorities, and it seems that investing in digital transformation in some of our customers is just too important to pause and so we’re seeing that trend broadly throughout our customers and new customer lands.

Following up on the investments, the pace of hiring has really increased, and we've noticed several updates regarding the go-to-market team, including some backfilling of your responsibilities, Marc. I'm interested in the quarter's performance regarding sales representatives and your capacity, especially with the potential rise in market demand in 2021. Do you think you need to hire more staff, or will there be a need for additional support services related to customer success, sales engineers, and similar roles? Thank you.

Thank you for the question. One of the advantages we had going into the pandemic was that we had significantly expanded our hiring in the go-to-market area. We brought in the right people and started the year with a strong group of sales leaders and salespeople globally. Throughout the year, our focus was on keeping them in positions where they could best assist our customers, develop their markets, and collaborate with partners as demand increased. We're proud of how well we retained that team, and their numbers have remained stable compared to the start of the year. Additionally, we made new hires in the sales and marketing teams and customer support, particularly in account management, to better serve our customers. As we enter 2021, our objective is to have the capacity and capability to meet demand. We will begin the year with sufficient capacity and continue hiring in sales and marketing at a pace that matches the returning demand. I should also mention that our hiring efforts in other vital areas, such as tech leadership and product development, were also very successful this past year, which we take pride in.

Right. Well, thanks for taking the questions and congrats again.

Thank you.

Thank you. Our next question comes from Rob Oliver with Baird. Your question, please.

Great. Good evening. Thank you very much. I appreciate your comments, Therese, and I have enjoyed working with you. I wanted to express my gratitude and also congratulate Mark Woodhams on his promotion. Marc Huffman, I'll begin with you and then I have a follow-up. The discussions around the partner channel indicate that it is continuing to develop positively. Therese laid a solid foundation for building out that channel early on. Some of our insights suggest that partners are increasingly engaging with the financial suite, particularly in relation to remote close. I'm curious if the challenges associated with remote close have prompted some of the partners who were previously less active to become more involved. How do you view the evolution of that partner channel and its contribution in 2021? I also have a follow-up. Thank you.

Yeah. Thank you. So, consistent performance in our partner community in 2020 and in Q4, specifically, they’re involved in a pretty consistent percentage of our largest deals in the quarter. I think, to your point regarding areas of expertise, I think, largely customers and companies in general, even prospects, in such a unique time sought out expertise and experience. And a lot of the people who possess that expertise and experience are either our employees or employees of our partners. And so with the concept of the remote close or having to endure something for the first time, I think it drove a lot of hand-raisers and eyeballs towards some of our partners, who possess that expertise and performed admirably on behalf of us and those customers. I think that it will continue to be a phenomenon that will drive us. We try to take and serve our customers broadly with our own talent, as well as that talent from the partner community. I don’t think that will diminish over time. I think it’ll be a consistent strategy that we’ll have to offer expertise either to us or third-parties, to help customers who are engaging in digital finance transformation. The expertise this year was just unique because it was the first time I think anyone’s faced it during the pandemic and the effect on accounting.

Great. Thanks, Marc. I appreciate that. Mark Partin, I had a follow-up for you. I value the detailed insights you provided regarding the numbers and your thought process for '21. Concerning the customer count, which has shown impressive growth for you, it's developing into a positive trend. Did that figure include any acquisitions related to Rimilia? If it did, could you elaborate on that? Thanks.

Yeah. Of course. Thanks, Rob. So out of the little over 200 customers added, about 100 were from the acquisition of Rimilia. We had some complimentary customers as well, as you know. Those were already included in the numbers. So these were net new from the acquisition. And in Q4, the growth in customer logos was something we were very pleased with.

Great. Thanks again, guys.

Thank you, Rob.

Thanks, Rob.

Thank you. Our next question comes from Matt Stotler with William Blair. Your question, please.

Hi, everybody. Thank you for taking my questions. I guess, first, I would like to touch on maybe the bigger picture here, a bigger picture question. So Rimilia is obviously a really solid addition, really interesting expansion opportunity there. But when you think about the process cycles that you’re ultimately looking to consolidate and automate, whether that’s record to report, procure to pay, quote to cash and there’s a lot there. So how do you think about optimizing the value proposition for your customers and what’s most important to own versus where you can partner to provide that value?

We have established a strategy focused on meeting the needs of the controller, an area where we excel and have strong brand recognition. We evaluate both our organically developed products and any additional activities through this strategic perspective. We are committed to staying connected with the controller and are actively observing various processes that could benefit from modernization, optimization, and automation. We are enthusiastic about the future of developing a company that can effectively support the controller.

That’s helpful. And then maybe one on the competitive landscape, we’d love to just get an update on, if you’re seeing any significant changes and behavior in this environment, especially given it’s a pretty unique environment that you’re operating in at this point. They’ve obviously been a couple of interesting partnership announcements in the competitive landscape over the past few months. So look to get any update or color on what you’re seeing there? Thank you.

No real meaningful change in the competitive environment. I would believe that the demand environments improving over time, that spills over into every bucket out there and so I’m sure that there are other organizations who are beneficial to that improving demand environment. We believe that as the market creator, the category leader that a lot of that value accrues to us. And so the only thing I can tell you realistically in the competitive landscape, inertia status quo continues to be the number one manner that we deal with from a competitive standpoint. We win our fair share based on our experience. Our modern accounting playbook has really boosted win rates for us based on sort of proven value, our expertise measured across thousands of companies that use our software, and that’s really resonating in this current environment. And so we’re pleased with where we stand from a competitive standpoint.

Great. Thanks again.

Thank you.

Thank you. Our next question comes from Alex Sklar with Raymond James. Your question, please.

Thanks. I also want to follow up here on the MAP program and some of the announcements that you made at BeyondTheBlack, which seemed to kind of build on that and by taking some of those learnings and bundles and moving them up market. I’m curious what you can tell us about the early feedback around accelerators and any additional details around catalysts that you can use at the conference? Thanks.

Yeah. So thank you for that question. I appreciate you tuning into BeyondTheBlack. The modern accounting playbook is still in its early innings itself as a concept for us. We’ve added in the market for four quarters, reflecting us as a leader in the space, leveraging our experience. It’s driven great customer logo expansion for us, win rates are up versus initial inertia, the days to close metric, all these things really performed for us. So we’re excited to begin the journey towards that same expertise leveraged into the enterprise. And then what do you refer to as our collaborative accounting experience where we’re taking now packaging that experience in a way that takes customers where they are on the journey of digital finance transformation and applying our expertise for having the right solution at the right time with the right deliverable for them. It’s just kicking off realistically in Q1 and way too early for us to give you any sense of market reception. There will be something that hopefully you’ll check back with us on in the future.

Okay. Thanks. And then, I guess, given kind of we’re four quarters into MAP, are you seeing any of those early adopters kind of graduate from the initial bundle and taking additional products? Is that kind of part of your confidence behind the reacceleration of the net retention revenue metric? Thanks.

The simple answer is yes, regarding them returning to us and seeking expansion in terms of its impact.

Yeah. We see really positive influence on the impact is larger deal sizes, uptake of strategic products down in the in the mid-market, like transaction matching. So those are positive trends that we think that come from that leadership to that program. Those are happening.

Great. Thank you.

Our next question comes from Pat Walravens with JMP. Your question, please.

Oh! Great. Thank you. So, Marc, I have sort of a big picture question for you, which is, so when I covered you at NetSuite, you guys were very good in the SMB. You had to make your way up market, right? And you had that whole capturing the subsidiaries first approach. But at BlackLine, it’s really good at enterprise need to make your way down market. So I just love to hear your thoughts on how those are different and what you’ve learned and what you’re applying?

Thank you, Pat. I would describe BlackLine as a leading product and solution that caters to some of the largest organizations in the world. Our focus has been on creating a high-quality offering. We have strategically explored methods to provide efficient deliverables based on our technology and experience, targeting mid-market companies. I wouldn’t classify them as small and medium-sized businesses, as that approach tends to be inefficient. We are focused on the traditional mid-market segment, aiming to attract companies that align with our revenue and complexity standards, ensuring we secure meaningful customers, particularly well-funded, high-growth firms, and support them throughout their journey.

And how do you, I’m sure there are exceptions but just sort of generally speaking, how do you draw that line?

I believe we have a strong understanding of our core strengths and weaknesses, and our go-to-market team operates with great discipline. We are very mindful of our spending; SaaS companies typically invest significantly in sales and marketing. However, pursuing clients who are unlikely to remain loyal is probably not the best use of those funds. Therefore, we maintain a disciplined approach. Our strategies usually consider the complexity of the customer's organization, which is measured in the number of accountants they have, as well as the complexity of their ERP systems and the nature of their business activities.

Thank you. Our next question comes from Josh Beck with KeyBanc. Your question, please.

Thank you for answering my question. I wanted to revisit some of your earlier points about digital transformation. At the start of the pandemic, it seemed to take a backseat, with more emphasis on front office collaboration projects. However, as the year progressed, it seems there was a shift. I am curious if that was your observation as well, and as you move into 2021, could you describe the current focus on digital transformation? You mentioned it has remained a strength for you, possibly even maintaining or increasing its priority compared to pre-COVID times. I would appreciate hearing any anecdotes or feedback you've received from your customers on this subject.

Sure. Thanks, Josh. I think it’s a little premature to try to identify where it is versus pre-COVID. But what I can tell you from the experience and talking to our customers and prospects, and talking to our sales team and leaders, is a gradual improvement over time and customers returning to the marketplace and reprioritizing where they spend their money. There was a number of people who went to the sidelines, if you will, post-pandemic that existed throughout the quarter. We saw some of them start to return to having these priorities in Q4. We were the beneficiary of that from the demand environment improving and we see that continue on a forward-looking basis in our pipeline and our opportunities. Our sales teams are excited about heading into 2021, having people come back, having people prioritize digital finance transformation. And I made the statement earlier, because we’ve heard it a couple of times from our customers, and virtually the same words that digital transformation of finance was too important and too big to pause. And so they took a pause, they reprioritized what they were going to invest and spend money on and then have returned.

Thank you. Our next question comes from Josh Beck with KeyBanc. Your question, please.

Great question. It’s still early, but we’re tracking positively as we expected. We see the demand environment improving and the interest level in accounts receivable very strong. Rimilia has provided a great expansion opportunity, and we’re optimistic about combining our go-to-market efforts with the Rimilia team, as we look ahead. Together we’ll present a strong case to our current clients and prospects, as we’ll have deeper capabilities when it comes to solving their financial close and cash application needs.

Absolutely. We're geared to capitalize on that opportunity. As you mentioned, our foundational capabilities in financial close automation are instrumental here. We expect that the broader network of clients will appreciate the full value of our solutions and will lead to cross-selling opportunities.

Thank you. Our next question comes from Brent Bracelin with Piper Sandler. Please go ahead.

Hi, guys. This is Hannah Rudoff on for Brent today. Thank you for taking my questions. First, I wanted to ask about what pipeline builds are like coming out of BeyondTheBlack relative to prior years and thus far? How are our pipeline close rates trending relative to historical rates with in-person conferences?

Yeah, that’s a great question. We spent a lot of time analyzing that. It’s still early, but we’ve built a pipeline beginning at the very front of the COVID. But look, what we saw in Q3 and Q4 was improving close rates and pipeline behavior, better consistency in the virtual. We started to see things that are very promising, great potential; we’ve been efficient in the marketing and sales organization throughout the year and are actually confident and feel good about the level of interaction, dialogue and demand that we put into the pipeline.

Great. That’s super helpful. And then clearly, there’s a tremendous opportunity here to modernize the back office, and it seems like 2021 could really be the beginning of this major upgrade cycle. So I was wondering, what are you most excited for in 2021, and do you feel that there are any underappreciated levers of growth going into the year?

Hannah, I think you said that very well. Thank you. We’re equally excited about that. There’s a tremendous opportunity. I don’t know if it’s the first step or not. I can just tell you on behalf of all the employees I’ve talked about, I think 2021 is going to be a year of change. Perhaps this will be the year where we see progress made against this pandemic and so people are, I think, are really excited about more traditional means of working together, even though they’re prepared to continue to operate in this unique model that we’re in. The return of a normal economic cycle, the return of or the continuation, I guess, of the improving demand environment. Everybody is really rallied around initiatives that we have as a company. We took a lot of effort in 2020, making sure that our employees and our customers were cared for. I think we built a great bit of loyalty around that. They’re ready for an improving demand environment and to execute the plans that we have in place. Thank you for joining us today. We appreciate your ongoing support of BlackLine and to continue with the tradition that was established by our Founder, Therese. I’d like to remind you all of you and ask that as you run into them, refer your portfolio companies to BlackLine and we will take really good care of them. We’re excited about the opportunities for accounting transformation and driving further momentum in our business. We look forward to continuing this discussion at our Analyst Day and other investor events during the year with you.

And thank you, ladies and gentlemen, for your participation in today’s conference. You may now disconnect.