Blackline (BL) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01If we are unable to attract new customers and expand sales to existing customers, our growth could be slower than we expect and our business may be harmed
2. 02software solutions into their businesses, as such organizations may be reluctant or unwilling to invest in a new product. If we fail to attract new customers or maintain and expand those customer relationships, our revenues will grow more slowly than expected and our business will be harmed
3. 03Our business and growth depend substantially on customers renewing their subscription agreements with us and any decline in our customer renewals could adversely affect our operating results
4. 04Economic uncertainty and other unfavorable conditions in our industry or the global economy could limit our ability to grow our business and negatively affect our operating results
5. 05If we fail to manage growth in our operations and organizational change effectively, we may be unable to execute our business plan
6. 06If we are not able to provide successful enhancements, new features or modifications to our software solutions, our business could be adversely affected
7. 07We derive substantially all of our revenues from a limited number of software solutions, and our growth is dependent on their success
8. 08and market these technologies, may result in reputational harm or liability, or could otherwise adversely affect our business
9. 09Interruptions or performance problems associated with our software solutions, platform and technology may adversely affect our business and operating results
10. 10If our software contains serious errors or defects, we may lose revenue and market acceptance and may incur costs to defend or settle product liability claims
11. 11We depend on our executive officers and other key employees and the loss of one or more of these employees or an inability to attract and retain highly-skilled employees could adversely affect our business
12. 12If our industry does not continue to develop as we anticipate or if potential customers do not continue to adopt our platform, our sales will not grow as quickly as expected, or at all, and our business and operating results and financial condition would be adversely affected
13. 13The market in which we participate is intensely competitive, and if we do not compete effectively, our operating results could be harmed
14. 14Failure to effectively organize and motivate our sales resources could harm our ability to increase our customer base
15. 15If we are not able to maintain and enhance our brand, our business, operating results and financial condition may be adversely affected
16. 16We may be unable to integrate acquired businesses and technologies successfully, or achieve the expected benefits of these transactions and other strategic transactions
17. 17Incorrect or improper implementation or use of our solutions could result in customer dissatisfaction and negatively affect our business, results of operations, financial condition, and growth prospects
18. 18Any failure to offer high-quality product support may adversely affect our relationships with our customers and our financial results
19. 19We provide service level commitments under our customer contracts, and if we fail to meet these contractual commitments, our revenues could be adversely affected

Risks Related to Our Financial Performance or Results

1. 20We have a history of losses and we may not be able to generate sufficient revenue to achieve or sustain profitability
2. 21Our quarterly results may fluctuate, and if we fail to meet the expectations of analysts or investors, our stock price and the value of your investment could decline substantially
3. 22Our financial results may fluctuate due to our long and increasingly variable sales cycle
4. 23We recognize subscription revenue over the term of our customer contracts and, consequently, downturns or upturns in new sales may not be immediately reflected in our operating results and may be difficult to discern
5. 24We face exposure to foreign currency exchange rate fluctuations that could harm our results of operations
6. 25If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings
7. 26Our ability to use our net operating losses to offset future taxable income may be subject to limitations

Risks Related to Our Dependence on Third Parties

1. 27If our relationships with technology vendors and business process outsourcers are not successful, our business and growth will be harmed
2. 28We rely on third-party computer hardware and software that may cause errors or failure of our software solutions, or may be difficult to replace
3. 29We rely on GCP, Azure, AWS, Snowflake, and third-party data centers (collectively, “public cloud providers”) to deliver our cloud-based software solutions, and any disruption of our use of public cloud providers could negatively impact our operations and harm our business
4. 30We depend and rely upon SaaS applications from third parties to operate our business and provide our software solutions, and interruptions, outages, or performance problems with these technologies may adversely affect our business and operating results
5. 31If we are unable to develop and maintain successful relationships with resellers, our business, operating results and financial condition could be adversely affected

Risks Related to Our Legal and Regulatory Environment

1. 32Our long-term success depends, in part, on our ability to expand the sales of our solutions to customers located outside of the U.S., and thus our business is susceptible to risks associated with international sales and operations
2. 33Privacy and cybersecurity concerns and evolving domestic or foreign laws and regulations, including increased restrictions of cross-border data transfers, may limit or reduce the adoption of our services, result in significant costs and compliance challenges, and adversely affect our business
3. 34We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in full compliance with applicable laws
4. 35Changes in laws and regulations related to the internet and cloud computing or changes to internet infrastructure may diminish the demand for our solutions, and could have a negative impact on our business
5. 36Our international operations may subject us to potentially adverse tax consequences
6. 37The enactment of legislation implementing changes in the U.S. and global taxation of international business activities or the adoption of other tax reform policies could materially impact our financial position and results of operations
7. 38Taxing authorities may successfully assert that we should have collected, or in the future should collect, sales and use, value-added or similar taxes, and we could be subject to liability with respect to past or future sales, which could adversely affect our results of operations

Risks Related to Our Intellectual Property

1. 39Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand
2. 40Lawsuits or other claims by third parties for alleged infringement of their proprietary rights could cause us to incur significant expenses or liabilities
3. 41We use open source software in our products, which could subject us to litigation or other actions

Risks Related to Ownership of Our Common Stock

1. 42The market price of our common stock may be volatile, and you could lose all or part of your investment
2. 43Provisions of our corporate governance documents could make an acquisition of BlackLine more difficult and may impede attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders
3. 44We do not intend to pay dividends on our common stock so any returns will be limited to changes in the value of our common stock

Risks Related to Our Outstanding Convertible Senior Notes

1. 45Our current and future indebtedness may limit our operating flexibility or otherwise affect our business
2. 46The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results
3. 47In connection with the issuance of the Notes, we entered into the Capped Calls with the counterparties with respect to each series of Notes
4. 48We may require additional capital to support business growth, and this capital may not be available on acceptable terms, if at all
5. 49The requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members
6. 50If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
7. 51We may fail to maintain an effective system of internal control over financial reporting in the future and may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and the price of our common stock
8. 52Natural disasters, climate change, and other events beyond our control could harm our business