Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2021 BlackLine Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Operator Instructions: I would now like to turn the call over to your host Barry Hutton, Investor Relations with The Blueshirt Group. You may begin.

Good afternoon and thank you for your participation today. With me on the call is Marc Huffman, Chief Executive Officer of BlackLine; and Mark Partin, Chief Financial Officer. Before we get started, I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans, objectives and expected performance, in particular, our guidance for Q4 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 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. Q3 marked another strong quarter, as demand for digital transformation within the CFO's office continued to increase. We've seen improving demand over five consecutive quarters and it now exceeds the pre-pandemic levels of 2019. Companies are emerging from the pandemic with a greater sense of urgency to upgrade outdated back office systems. We believe this is the beginning of a long-term investment cycle to modernize financial and accounting systems. Within this environment, our team delivered another great quarter of execution as we helped our customers modernize their back office to thrive in an increasingly challenging work environment. Let me describe our ability to meet customer demands and needs across key segments and geographies. To serve our current customers, we're continuing to innovate on our platform and invest in our customer-facing teams. We're driving greater customer engagement and further expanding the capabilities of our market-leading platform. As a result, we're seeing accelerated expansion from our install base of over 3,700 global customers. In Q3, our net dollar retention rate kicked up to 108% compared to 107% a year ago. Our successful land-and-expand strategy is demonstrated in our experience with a Fortune 100 food and beverage company headquartered in North America that first became a BlackLine customer in 2016. At that time, they began their journey with account reconciliations. Their foundational step was to simply leverage reconciliations without some of the other platform capabilities to drive greater efficiencies. Four years later, they embarked on a corporate-wide initiative for finance and accounting transformation, which included close acceleration. The customer valued BlackLine's investment in customer success and set out to drive greater efficiency in calculating and booking journal entries, as well as managing the close. As such, they determined BlackLine to be a critical part of their strategic plan and purchased automated journals and task management to drive efficiency and unify processes across their close. The team has now identified more use cases to leverage automated journals, and there are ongoing discussions with this customer for future expansion across the rest of our platform, including intercompany hub, as their controller deems that to be a resolution to a key issue. Our success landing large global enterprise customers continued in the third quarter. Large companies around the world are embracing digital finance transformation to increase capacity, improve visibility, and remove risk from their financial close. Our message is resonating with companies who are looking to adopt lean, modern accounting. In Q3 with the help of our partner ecosystem, we added a record number of new, large, high-quality logos. Our ability to serve the largest and most complex organizations around the world continues to serve as both a competitive differentiator and a durable growth lever for BlackLine. Our experience with a large North American pharmaceutical company illustrates our ability to resolve challenges within the enterprise market. This new customer was seeking to improve efficiency and accuracy across the record-to-report processes, and had been delayed by numerous acquisitions and evaluations of their existing ERP ecosystem. Their desire was to replace their existing technology with a solution that would integrate seamlessly with any ERP without interrupting the close process. The controller selected our platform because of our best-in-class feature set, ongoing platform evolution, business relationship building, strategic planning efforts, and educational resources. We were able to inspire confidence in the controller, shared services, and IT organizations as a trusted solution for their finance and accounting teams. The pharmaceutical company is focused on automated reconciliation, unified task management, configurable dashboards and our SAP connector. Mid-market companies continue to have healthy demand for finance and accounting automation. Our Modern Accounting Playbook, or MAP program, produced another strong quarter for mid-market new logos and expansion deals. Our MAP program outlines a financial transformation path for midsize companies so BlackLine can deliver purpose-built solutions based on leading practices to unify processes, automate work and drive visibility. The solutions for the mid-market are starting to resonate outside of North America with increasing traction in certain key markets in EMEA. The addition of AR automation helps further differentiate our offerings, and the combined value proposition is driving more competitive wins. Overall, we are experiencing increased mid-market sales activity. Another exciting AR automation win in the mid-market was a contract catering services company based in the U.K. that was challenged by highly manual accounts receivable and financial close functions that hindered their productivity and greatly impacted overall visibility. Given this company is in the hospitality space, they were severely impacted by the pandemic. As they forecasted a return to pre-COVID demand, they became acutely aware that their current manual processes would not scale. In Q2, this company became a BlackLine customer by purchasing our Modern Accounting Playbook with Cash Application to resolve these time-sensitive challenges by the start of Q4, 2021 and future-proof their business. This initial purchase will generate immediate results, including a reduction in manual AR processes by 85%, a reduction in days sales outstanding by five to 10 days, and a reduction in their days to close to five days or fewer. Presented as one solution, our combined financial close and AR automation offering is a critical solution to the office of the controller and another key differentiator of our value proposition. As such, this win represented our largest mid-market land thus far. In key international markets, our momentum continued in the third quarter. Both the European and Asia Pacific regions delivered strong growth and a healthy mix of new logos and expansions. As a result, our international revenue grew 41% in Q3 and is now 28% of our total revenue, up from 25% in the prior year. Our success in Europe is exemplified by our long-term and growing relationship with a multinational engineering company which first became a BlackLine customer in 2018 with the purchase of our Close Process Management solution. In 2020, they initiated efforts to centralize, standardize, and leverage automation across their finance and accounting processes. This prompted the next phase of their BlackLine journey as their controller needed help governing and automating the standardized processes and reducing risks across their close. The controller's primary focus was on their journals process. As our customer success teams worked with them, it became clear that they needed greater automation and controls for their intercompany journal entries. In Q3, the company expanded their BlackLine footprint with the purchase of our Journals product and our Intercompany Balancing solution to standardize, simplify and optimize their close processes. We are in discussions to roll out Journals for other business processes and embark on a full intercompany relationship with BlackLine over time. We continue to leverage our partner ecosystem to meet the digital transformation imperative for the back office. The increased partner engagement is evident as our partners were involved in 82% of large deals in the quarter, up from 69% a year ago. The customers' planned investment in back office systems has driven an improving demand environment. These customer win stories and our results are strong proof points that we are in the early innings of a long-term growth opportunity fueled by the digital transformation tailwind. We believe that demand will continue to support long-term growth for BlackLine. As we look to capitalize on these favorable market conditions, we are accelerating our investments in three key levers for growth. First, we are investing to increase customer engagement and customer success. For BlackLine, customer engagement is a core tenet of our culture. Our customer engagement team includes over 100 experts specialized in training and educating our customers to better leverage our platform. We believe each of our 3,700-plus customers is in one way or another on a journey to transform and improve their financial and accounting processes. While some customers will move faster than others, we are committed to helping each of them achieve success in their businesses. Our leadership position and know-how around foundational accounting use cases help customers define and identify success using BlackLine. We are always working to improve the customer experience, increase the value of our solution, and help companies modernize their accounting back office. We will continue to innovate in this area of our business to drive greater engagement and adoption of the BlackLine platform. Second, we will continue to innovate and expand our platform. We have a clear vision to be the most indispensable platform for the controller, and we have been investing in development resources to advance our platform functionality. We plan to introduce new products in the financial close and accounts receivable automation markets at our BeyondTheBlack event later this month. We remain on track for our cloud migration and as we modernize the product stack, we will be able to take advantage of increased agility and scalability as we move into Google Cloud. We are very excited about our expanding product portfolio, both from an organic and potential corporate development standpoint. Our third area of investment is to expand our international presence. In each of the last three quarters, we've accelerated our international revenue growth rate, yet there is still significant upside available abroad. As it currently stands, our international presence is predominantly in EMEA, with a small but growing presence in APAC. Over the last few quarters, we've seen large strategic deals in key regions in EMEA and APAC, and we believe those success stories will cultivate additional large wins for the region. Our traction in the international markets is also benefiting from our partner ecosystem, specifically our SolEx relationship where we have our products on SAP's price list with their global distribution channel. We've recently enhanced our APAC leadership by hiring a new general manager. We will continue to invest in our teams abroad and leverage our direct and indirect channels to capitalize on the significant international opportunity. These are pillars of our long-term strategy. We've seen early success in these strategic areas, such as enhanced customer value proposition, extended market leadership and expanded global presence. Our performance throughout the year gives us increasing confidence in these multi-year growth levers and our ability to execute on them. Before I close, I want to note the last week marked the five-year anniversary of BlackLine's IPO. We are proud of what we've achieved, and I want to thank our employees, our customers, our partners, and our investors for their roles in contributing to our success. I'll now turn it over to Mark Partin to discuss our financial performance in more detail.

Thank you, Marc, and good afternoon everyone. As Marc mentioned, Q3 was another strong quarter of execution and continued improvement in the global demand environment, as reflected in our Q3 revenue, profitability and cash flow results. Total revenue grew 21% year-over-year, led by our subscription and support revenue, which increased by 23%. Moving to our key performance metrics for the quarter, we had another quarter of strong new logo adds with 106 net new customers in the quarter bringing the total to 3,704 customers. Our strength in the enterprise market generated a record number of new large deals in Q3 as we benefited from digital transformation, our select partnership and continued adoption of our strategic products. Our dollar-based net revenue retention rate improved to 108% and that's indicative of strong account growth as customers grew their BlackLine footprint with more products and a record number of additional users. Strategic products represented 15% of sales for the quarter, with over 30% growth year-over-year. Partners were involved in 80% of large deals in the quarter validating the effectiveness of this go-to-market channel and our partner ecosystem. And revenue from our SAP partnership totaled 24% of revenue up from 23% in the prior year. Non-GAAP gross margins remained at 80% within our target range, despite the ramping costs that are associated with the planned Google Cloud migration and the integration of the Rimilia acquisition. In Q3, we generated non-GAAP net income attributable to BlackLine of $15.1 million. We generated $17.1 million in operating cash flow and $9.8 million in free cash flow, reflecting higher-than-expected profitability and strong cash collection. We ended the quarter with approximately $1.2 billion in cash, cash equivalents and marketable securities. Now, I will provide guidance within the context of Marc's earlier discussion. Specifically, I echo Marc's statement that we've enjoyed a five-quarter resurgence in market demand. And we expect this to continue into 2022. In response to this demand, we are investing to further prioritize the areas of customer engagement and success, platform innovation and international growth as part of our forward planning. For the fourth quarter of 2021, total GAAP revenue is expected to be in the range of $113 million to $114 million. On the bottom line, we expect to report non-GAAP net income attributable to BlackLine in the range of $5.5 million to $7.5 million, or $0.09 to $0.12 on a per share basis. Our share count will be approximately 62.4 million diluted weighted average shares. For the full year 2021, total GAAP revenue is expected to be in the range of $423.5 million to $424.5 million. On the bottom line, we expect to report non-GAAP net income attributable to BlackLine in the range of $37 million to $39 million, or $0.59 to $0.62 on a per share basis. Our share count will be approximately 62.5 million diluted weighted average shares. In summary, we are very pleased with the strong execution we delivered in Q3 and the improving demand environment for finance transformation. We are in the early innings of a significant market opportunity and we believe this market will accrue to the leader over the long-term. As we maintain our focus on customer success and continue to invest in our long-term initiatives, we firmly believe that BlackLine is well positioned to capitalize on this trend of accelerated digital transformation and capture the tremendous opportunity ahead of us. And now we'll take your questions.

Operator Instructions: Our first question comes from Rob Oliver with Baird.

Great. Thank you guys very much. Appreciate it. I had one for Marc Huffman, and then a follow up for Mark Partin. So Marc Huffman, I wanted to drill down into both your comments and Mark's comments about the large enterprise deals and the record number of new large deals this quarter. Can you talk about what drove those? I think your commentary suggested that we are now through the COVID impact entirely. I just wanted to make sure I understood that properly. Looking at the user adds, which strike me that maybe some of those deals had strategic attach as well, so maybe talk about what the components of those large deals were and what the drivers were, and then I had a quick follow up. Thanks.

Sure. Thanks, Rob. A lot of this is demand-related and we had what I believe is a great quarter and it's widespread. Some of that enterprise work is good execution, coupled with the demand environment, our message, our experience, our brand strength and customer success focus being leveraged in creating demand in those environments. From a demand side, it appears that we're in the midst of a wave of investment and arguably the first in a long time where money is actually flowing into the accounting department. We think that's the backdrop for some investments people want to make in the future, and we think that this five-quarter trend is going to continue and we're positioned really well to capitalize on it.

Got it. Thank you. That's great. And then, Mark Partin, just one for you: net revenue retention starting to flow through nicely, up year-over-year. I'd expect that would continue as you guys are seeing this expansion within your accounts. Gross retention was down just a tad sequentially; did you just want to see if there was anything to call out there, M&A, or churn or anything around that? Thank you, guys.

Yes. Rob, you broke up on me for a second on the net, so I'll answer what I think you asked. The net dollar retention rate ticked up to 108 from 106 in the previous quarter. What is driving that was a record user expansion count in the quarter, and that's a big lever for digital transformation and some of these large deals that we were closing. We have been investing in customer success and account management, and I believe that what we're seeing in the retention rate is the value of that investment through expansion in our largest customers.

Our next question comes from Matt Stotler with William Blair.

Maybe one kind of high level on the AR portfolio, and then a quick follow up. So obviously, it's been a key area of investment focus for you guys, the Rimilia acquisition. First, you had the Cash App, you released AR Intelligence in March, recently announced a unified platform there. So I guess the first part would be can you talk about initial traction? You mentioned some more deals, but maybe more broadly the traction and how that additional combination is resonating with your customer base more broadly. And then I have a quick follow up after that.

Yes. Thanks, Matt. We announced that acquisition about this time last year and we were very bullish on that space. The traction in Cash App was good and demand was strong. We were able to highlight that with our existing customers. We had some nice wins with new customers and found in some segments that the combination of AR plus BlackLine was really very competitive. As we look at the investment, Rimilia had some things underway that were innovative and completing the platform. We added to that and really focused on it this past year. So we went from having Cash App with some success to the spring release of AR Intelligence, which has a great attach rate right now, to the release we just issued, which will be highlighted at our upcoming user conference in November. We now have six modules unified on one AR platform that spans Cash App, credit and risk management, collections, disputes and deductions, team and task management, all brought together by AR Intelligence. We're really excited about it.

Great. Can't wait to hear more about that at BeyondTheBlack. And then just one quick follow up. Early on in the pandemic, one of the things that initially impacted performance and key metrics was some of the relief that you've been providing customers. It was very much with a mindset that at some point in the future there would be expansion opportunities within that base. As those deals are coming up for renewal, is that something you're seeing over the past couple of quarters? Is that part of what's driving the net dollar retention and some of the positive trends we're seeing? Any comments on that kind of cohort of customers?

I can. You're right that over the past year we were discounting and providing both cash, billing and contract relief to customers that needed it in order for them to continue operating on the platform and to maintain them as a customer. We did that to a great degree of success, because many of our customers in impacted industries were able to continue on. We have now recently stopped giving that relief; we've not had to do that any longer. Those customers are now starting to lap. It began in Q2 and in earnest in Q3 last year, and we're starting to see those come back to us and those customers will continue to build. They have stayed with us, and that's had a very positive impact on our net retention rate, because as you recall, it's a trailing metric. To the extent that you're discounting and giving relief, that was impacting that rate. We were very pleased with the outcome and we believe the goodwill we accrued will stay with us for some time.

Our next question comes from Koji Ikeda with Bank of America.

Hey Marc Huffman and Mr. Partin, nice quarter and congrats on the five-year as a public company, Marc. I actually think that in today's software market that makes BlackLine a bit of a public market dinosaur, so congrats on the five years. Couple of questions for me here. Number one, great job on the new deal count and more so I think on the size of the new deals that's driving growth. Is Q3 a good example of how we should be thinking about deal volumes and overall size from here?

Yes. I can start with that because that's where we are really investing to get that kind of profile. For the majority of our history we've been solving the biggest problems for the biggest companies, and we continue to build out the platform to give our customers the opportunity to build and stay on our platform and grow into very large customers for a long period of time. Q3, despite being a typically seasonal quarter for us, was indicative of strong demand at the very high end of the enterprise, where our ecosystem, including consultants and SAP, were able to help us bring on very large customers that are going through digital transformation. The key to expansion is our ability to help customers go on a journey of transformation at the high end that will drive retention and expansion, and it will help us bring in large logos.

Got it. Thank you and maybe one follow-up for Mr. Huffman. The commentary on partner influence ticked up again here to 82%. What is the right percentage or mix there in the future for partner influence on these deals? Is the goal 100% or is what we're seeing today considered fully optimized from the partner network?

I don't know if it's fully optimized. I think 80% is on the strong side of healthy. There will always be a population of people who prefer to deal directly with the vendor without third-party influence, or have some internal capabilities that are more strategic transformation agents. We've seen great customers who have already invested in that internal capability. Oftentimes, that's the capability these big partners bring: a really transformative approach to envision what people should be designing in the long term. I like us at 80%. It's a combination of a strong demand environment and great execution. To add to that, in SolEx wins we have the power of three—us, SAP, and these big partners—and about 90% of our big SolEx deals were using us plus SAP plus a partner, which I think is highly optimized as well.

Our next question comes from Ray McDonough of Oppenheimer.

Hi guys, thanks for taking my questions. Two, if I could. First, on AR automation, can you talk a little bit about how far along you are in the process of getting partners certified to implement the solution at this point?

Yes. I'd say we're still in the early innings. We have legacy partners from the Rimilia company that have nicely integrated into those practices and are building expertise on BlackLine's close process automation suite as well. We also have early signs of practice building with our mainstream partners. We're doing the typical activities you would see at the onset: enablement, education, awareness, and skill building with our partners who focus on operational and record-to-report areas like AR.

That's helpful. Maybe just a little about some of the recent customer success initiatives you've put in place, specifically extending the MAP program, the Collaborative Accounting Experience and the Optimization Academy. What sort of impact has that had on sales cycles, larger deals, implementation times or anything else we should be thinking about?

It's too early to have specific metrics, though there are signs it's having a meaningful impact on a variety of things: customer satisfaction, usage of strategic products, and driving large-scale volume consumption in some customers across strategic products. We're nearing the end of an 18-week curriculum in the Academy where we're trying to build transformation practitioners within our customer base. We're seeing impact on that and I believe it's part of the reason why our customer expansion is happening at the rate it is. Hopefully, it will be a gift that keeps on giving as we get force multiplication from creating more transformation practitioners in our customer base.

Our next question comes from Matt VanVliet with BTIG.

Hey guys. Thanks for taking the question. Nice job on the quarter here. Looking at the SolEx agreement mix, it ticked up higher by about a percentage and would indicate somewhere in the mid-20% growth range on a year-over-year basis. Any reason to think that that can accelerate further or is there a certain tempo and deal cycle involved with using that many partners, Marc, as you mentioned 90% involving a third partner there and that's just a nice steady kind of mid-20% growth business for some time?

I'll answer that in two ways. We have an aspirational view that their installed base of large customers, many of which are not yet our customers, is a great market opportunity when they're activated to sell globally. When we originally signed this deal several years ago, we knew it would take time to launch, ramp and build momentum within a very large partner. We're starting to see that over the last three quarters. What we saw in Q3 is a great profile to move forward, and the opportunity to expand that is there. Nevertheless, it's difficult to move a company like that in terms of getting priority in their stack. We see great initiatives from them and we've had incredible engagement over the last several quarters, so we're cautiously optimistic that SAP will continue to be a growth engine for us.

All right, very helpful there. And then on the strategic product side, as you continue to get a larger and larger customer base, should we expect cross-sell opportunities to continue to accelerate like they did this quarter? Are you putting programs in place to highlight the value of those or does it still come down to individual salespeople highlighting those benefits for each situation?

No, it's one of our key strategies toward the indispensable platform we're building to support customer modernization. The Collaborative Accounting Experience is leading practices, proven methods and pre-built workflows in the software that take people through automation led by strategic products. They are introduced at the right stages and times based on our experience with client journeys. We'll continue to invest in those initiatives because we believe the depth and breadth of our capabilities plus our experience is what's indispensable. In a quarter like this, where demand was strong, the percentage of strategic products can bounce around, but it will remain something we're attentive to and focused on executing.

Our next question comes from Pinjalim Bora with JPMorgan.

Hello, thank you so much for taking the questions and congrats on the quarter. Marc, I wanted to ask you about RPA. Whenever we talk to RPA vendors, they highlight a bunch of finance transformation use cases and they're pretty concentrated in some of these finance transformation areas. How do you view RPA with respect to BlackLine? Is that complementary, side-by-side? Do you see it as competition at times, and do you envision building RPA capabilities in-house or mainly via partners?

There's a lot there. My first reaction is RPA vendors often use the term transformation broadly; some of what they're doing is complementary. They're taking repetitive tasks and trying to automate them, removing manual work that still exists in many accounting departments. We are doing similar things but in a very process-specific, purpose-built way inside our application and platform, so as environments change over time, everything works seamlessly without needing reprogramming. On whether we will build RPA: no. We're heading toward an environment where we manage finance and accounting operations through a centralized place, much like an RPA or workload vendor, but specifically closely coupled to manage the close and AR work we're doing and intercompany work. We'll provide workflow and RPA-like capabilities that are purpose-built for these accounting processes.

Understood. One quick follow-up for Mark. You've talked about demand coming back and I think you said it exceeds pre-pandemic levels. How should we think about billings for Q4? Your revenue guide is into the high teens; directionally, will billings outpace that revenue growth in Q4?

On a quarter-to-quarter basis it's going to vary; that's the nature of the business and deal flow so I wouldn't put stock into any one specific quarter. You want to look at a trailing 12-month picture to get better visibility. That said, Q4 is also a quarter where we'll start to lap the Rimilia acquisition that landed at the beginning of the quarter and tougher comps from last year when demand started to improve. That will impact single-quarter billings. Going forward, we expect to maintain and drive billings in the ranges we've seen in recent quarters because we do expect demand at the high end to continue. When you're at the high end and you're working with large customers and large deals, it will have single-quarter impacts but over the long term it will flow and drive growth.

Our next question comes from Truist Securities.

Hey guys. This is Connor on for Terry. Thanks for taking the question and congrats on the quarter. Just one from me. Trying to touch on international performance—it's great to hear about the success here. I'm curious what you're hearing from customers abroad and what emerging trends you're seeing in terms of adoption from specific regions? Thanks, guys.

Our success internationally was fairly widespread and is represented by an increasing growth rate in international and making up more of our overall revenue profile. I can't point to one red-hot region or one lagging region; it's fairly widespread, which is assuring. It appears international will follow patterns we saw in North America. North America was earlier on the adoption curve and uptake in modernizing accounting. We're now seeing similar trends emerging internationally, and that underpins our decision to invest more abroad. We see tremendous opportunity internationally and are prepared to capitalize on it.

Our next question comes from Piper Sandler.

Hi, this is Marlin on for Brent. Thanks for taking our questions. One thing that stands out is continued strength in subscription, and it looks like another quarter of acceleration there. Could you help us understand where the biggest drivers for that segment are coming from and how we should think about that going forward? And then I'll have one follow-up.

You're right. Subscription revenue has grown every quarter for the last several quarters and that is specifically coming out of pandemic-driven demand. You've seen it first in billings, and as we've built over these quarters we've seen acceleration in subscription revenue. What is driving that are large digital transformation deals that pick up strategic products; year-to-date strategic products are around 18% of sales. It's also record user expansion in those same customers in the last two quarters, which is driving the retention rate up from 106% to 108% coming out of the pandemic. We had robust growth across international, mid-market and enterprise, so it was a very exciting quarter and that's what will drive subscription revenue up.

Great. Secondly, jobs data points to some large enterprises, like Apple, that might be looking to transform their global finance functions. Could you give some color on the enterprise pipeline and for these larger Fortune 100 companies, who are the primary competitors you see there? Thank you.

We have a great share of the Fortune 100 and a strong presence there. In many of these large, distributed ERP environments, organizations often turn to third parties rather than their ERP provider for solutions. BlackLine is often the third-party platform of choice due to our experience and depth of capabilities. We do have a legacy competitor in some cases, but as evidenced by our share in these customers, we continue to succeed as the primary platform and continue to take customers from that private competitor.

Our next question comes from Raymond James.

Hi, thanks for taking the question. This is John on for Alex. Marc, a quick one: we've seen a lot of private companies go public recently—has the pickup in IPOs and SPAC activity driven higher demand from companies preparing to go public that want a more rigorous financial close process? Any color there?

There are many trigger events and catalysts for demand. We see broad macro environmental demand and receptivity to our Modern Accounting Playbook. We certainly get a fair share of well-funded, fast-growing companies grooming themselves for more scrutiny like the public markets or other investments, and that's clearly a driver for us as well.

Our next question comes from JMP.

Hey, so Marc, as you get ready for 2022, what are the top two or three priorities that Mark Woodhams has to get done in the sales organization?

Specifically, the three biggest things are investing in customer success, innovating our platform, and expanding international. Mark Woodhams is adding capacity and distribution to capitalize on those areas. We see a great opportunity in strategic products, especially the AR products combined with the rest of our platform. He's making investments to ensure we capitalize on those opportunities and is heavily invested in international growth.

On the AR side, does it require a different skill set or a different type of rep—what does it require?

We have people in our organization capable of selling the AR solution. We've augmented our distribution organization with product expertise, including hires from competitors who sold in that environment. Part of the secret sauce at BlackLine is having professionals who have actually transacted and worked in the environments we're modernizing. Much like we have expertise in our pre-sales and distribution organizations from people who have closed the books or worked for auditors, we have started to acquire accounts receivable transaction-related expertise so people can show clients what it's like to move from manual to modern processes.

I'm not showing any further questions at this time. I'd like to turn the call back over to Mr. Marc Huffman, CEO, for closing remarks.

Thank you. First of all, I'd like to thank our employees. We had a great quarter in Q3 and we've had several quarters of great execution. They've stayed focused on one another and focused on our customers and we're all very appreciative of the work they do for us. I want to remind everyone that we'll host our 2021 digital version of BeyondTheBlack on November 16th through the 18th. It's a three-day event that will include keynote and breakout sessions, consisting of more than 50 hours of content to help users resolve some of the challenges of digital finance transformation. Although the event is primarily for customers and prospects, there are certain sessions that will be particularly interesting to the financial community. We appreciate everyone's ongoing support of BlackLine, and as established by our founder Therese, she asked to remind you to refer portfolio companies or companies you come in contact with who are looking to modernize their environments to send them to BlackLine. We're excited about the future opportunities in accounting transformation and we look forward to talking with you later on. Thank you.

Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.