BlackLine revenue rises 8.5% to $193.4 million in third quarter
Key Facts
BlackLine said on November 5 that revenue reached $193.4 million in the third quarter of 2026, up 8.5% from the same period a year earlier. The results came as the company faced delays in closing some contracts, alongside consumption revenue from agentic AI products falling short of expectations. The chief financial officer said contractual opportunities worth millions of dollars had cleared customer approvals but had not closed on schedule. He added that some deals had extended into the following quarter. These factors weighed on the outlook despite continued revenue growth and improved profitability metrics.
The results showed improved operating margins: the GAAP operating margin was 8.6%, compared with 4.3% in the third quarter of 2025. The non-GAAP operating margin rose to 25.9% from 21.4% a year earlier. GAAP net income was $10.6 million, or $0.18 per diluted share, compared with $5.3 million and $0.09 per share in the year-earlier period. On a non-GAAP basis, the company reported net income of $44.7 million, or $0.64 per share, versus $37.6 million and $0.51 a year earlier. These comparisons show improved quarterly profitability alongside challenges in the timing of contracts and other revenue sources.
Billings were $170.9 million, up 5.7% year over year, while remaining performance obligations reached $1.1 billion as of September 30, up 14.3% from a year earlier. Dollar-based net revenue retention was 103% on the same date, and the company had 4,316 customers. These metrics put the customer base and contracted obligations in the context of quarterly revenue growth, but come alongside slower growth in some additions and consumption-based revenue. Management said user additions declined as customers shifted to platform-level pricing. It also said consumption revenue from agentic AI products came in below expectations.
The CFO linked deal delays to customers’ spending priorities and increased scrutiny of purchasing decisions. He said customers had given near-term priority to cybersecurity and infrastructure spending related to AI, while a more cautious economic climate added reviews and approvals to the sales cycle. Management said July and August were good, while September was weaker. It also said some SAP customers had paused decisions while they waited for clarity on how SAP’s AI capabilities would integrate with Verity agents. As a result, expanding the SolEx product at some existing SAP customers became more difficult.
The company said nearly half of the reduction in the midpoint of its annual outlook was related to professional services, reflecting slower growth and investments in customer adoption, as well as a shift toward larger, partner-led enterprise implementations. That puts professional services among the factors weighing on the outlook, alongside delayed contract closings and weaker-than-expected consumption revenue from agentic AI products. In the earnings statement, CEO Owen Ryan said, "The timing of customer decisions impacted our updated outlook, but our strategy and long-term opportunity have not changed." BlackLine’s annual revenue was $700.4 million in 2025, compared with $653.3 million in 2024. The company’s shares, which trade under the ticker BL, closed at $33.67 in the November 5 session.
The company forecast GAAP revenue of between $195 million and $197 million in the fourth quarter of 2026, with a non-GAAP operating margin between 25.8% and 26.9%. For fiscal 2026, it forecast a non-GAAP operating margin between 24.2% and 24.5%. It also estimated non-GAAP net income of between $174 million and $175 million, or earnings of between $2.48 and $2.49 per share. Management said it would provide its 2027 outlook on the February earnings call. The timing of customer decisions and deal closings remains among the issues management cited in explaining the updated outlook.