BlackLine, Inc. (BL) Q2 2019 Earnings Call Transcript

BlackLine, Inc. (BL 5.26%)
Q2 2019 Earnings Call
Aug 01, 2019, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the BlackLine Q2 2019 earnings conference call. [Operator instructions] And as a reminder, this conference is being recorded. Now it is my pleasure to turn the call to Alexandra Geller, vice president of investor relations.

Alexandra Geller -- Vice President of Investor Relations

Good afternoon, and thank you for your participation today. With me on the call is Therese Tucker, founder and 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 call that are not historical facts, including those regarding our future plans, objectives and expected performance, 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 have made are reasonable, actual results could differ materially because the statements are based on our current expectations and are subject to risks and uncertainties. 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 discussed on this call will be non-GAAP. A discussion of why we use non-GAAP financial measures and information regarding reconciliation 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 Therese to begin.

Therese Tucker -- Founder and Chief Executive Officer

Good afternoon, everyone, and thank you for joining us today. I am pleased with our execution and the progress we have made this year on our growth initiatives. Q2 was a good quarter driven by continued global demand for our solutions as CFOs turned to BlackLine to help them transform their manual processes and outdated ways of closing the books. We believe these results are early indicators of positive momentum across our initiatives to drive long-term sustainable growth.

I'd like to begin with how we are driving success for our customers and leading them on their accounting and finance transformations. As a strategic partner, we want to make our customers successful, by providing them with mission-critical solutions, best practices, ongoing support and a framework for success. For example, in Q2, we hosted a number of events around the globe to connect and engage with customers and prospects. We held our InTheBlack events in Singapore and Sydney in May.

We also hosted best practices summits in different cities in the U.S. and Europe, bringing together hundreds of customers to discuss how they can optimize their BlackLine products to derive value. These events are opportunities to increase customer engagement with our products, extend our thought leadership and provide a forum for prospects to network with existing happy BlackLine customers. As a result of these events, we have seen customers deploy additional users and/or products to fully realize the BlackLine value proposition.

In Q2, our digital transformation specialists spend time on-site with a number of our leading global accounts to define detailed road maps and accelerate our customers' digital transformation journeys. At the conclusion of one such workshop, a controller of a $70 billion company said, "We recognize that we were not fully utilizing our BlackLine tools and leaving value on the table. The BlackLine accounting innovation team helped us identify over 50 automation and standardization efficiency opportunities, and we are making real change." We believe the investments in our customer success are driving a record number of large expansion deals. In the second quarter, we saw strong growth from existing customers, rolling out more users and buying additional products.

This further extends our reach in the top-tier customers and drives a better value proposition for customers with a larger and more strategic footprint. A few examples include, a Fortune 40 healthcare company first became a BlackLine customer in 2013, with the purchase of Account Reconciliations across a small population of their finance and accounting employees. Over the course of their six-year tenure, they deployed additional products, including general entries, tasks, ICH, and Transaction Matching, as well as additional users growing to become one of our largest customers. This quarter, they expanded further, and now, have thousands of users around the world for improved controls, enhanced internal capacity, standardization of global processes and better finance analytics across the business.

Despite being one of our largest customers, there is still opportunity for this customer to grow their BlackLine footprint. One of the world's leading medical technology companies purchased Account Reconciliations and Tasks in 2012. Over the past seven years, they have expanded their BlackLine footprint with more users and additional products, such as general entries. This quarter, they purchased ICH to centralize their data across dozens of ERPs around the globe.

It was critical for this company to have statutory compliance on intercompany invoices across all of their global operating entities. BlackLine was selected as the vendor most capable to address these requirements. As a secondary benefit, the ICH platform gave them access to their global financials further enabling their digital transformation objectives. One of the world's largest food and beverage manufacturers first became a customer in 2016, when they purchased Account Reconciliations.

The following years, they added our remaining core products to their BlackLine instance to streamline their end-to-end financial close process. In Q2, this customer increased their BlackLine footprint with the addition of Transaction Matching. They were inundated with a significant volume of transactions stemming from an increased partnership with a large global e-commerce platform and realized their manual Excel processes were not capable of identifying and managing their order to cash revenue streams. After a market evaluation, they chose our Transaction Matching product to ensure proper revenue recognition, automate low-value tasks and seamlessly integrate with their existing BlackLine products.

We continue to see strong growth rates in our large global customers driven by finance transformation and believe that BlackLine is uniquely positioned as the only vendor with the requisite experience, resources and scale to serve as a strategic partner to these customers. Q2 was also a good quarter for large new logos. We expanded our customer base to more than 2,800 companies around the globe, with accounts such as a leading interactive gaming company that was frustrated by the lack of visibility and controls and lengthy time to close. Their CFO mandated a modernized and agile close process.

In Q2, this company replaced Excel and manual processes with BlackLine's finance transformation suite, including all core products and Transaction Matching, because of our unique ability to serve as a true transformational platform. This customer chose BlackLine to be their strategic partner due to our superior user interface, extensive user community, scalability and seamless cross-product integration. One of the U.K.'s largest construction companies engaged BlackLine as part of a broader initiative to future-proof their business by adding greater controls, visibility and efficiency. Their finance operation was highly decentralized, which required significant head count to support a highly manual and time-consuming close process.

In addition to poor visibility and exposure to risk, their biggest challenge was a lack of standardization around balance sheet control, which was further complicated by a number of acquisitions. In Q2, they purchased BlackLine's Account Reconciliations and Transaction Matching products for consistency and standardization across their platform, automation control and enhance connectivity with their existing ERP. As a company focused on future-proofing their business, they valued our market leadership and chose BlackLine as the vendor best suited for the role. The Australian division of one of the world's largest restaurant chains encountered many instances of manual unrecorded data changes happening in the background, which would make accounts become unreconciled without their knowledge.

Overwhelmed by the lack of visibility and control around their close process, they turned to BlackLine for our Account Reconciliations and Tasks to improve their reconciliation process, provide a complete and accurate audit trail and manage segregation of duties. Given that their U.K. counterpart was an existing BlackLine customer, the whole process from RFP to sale represented a very speedy close of under three months. At the other end of the spectrum, we continue to see strong demand in the mid-market.

Today, we have over 1,200 mid-market companies who have chosen BlackLine as their strategic partner. These visionary companies understand the importance of a proven, scalable and global partner who can serve their needs as they grow and encounter the increasing demands of data, regulation and globalization. These mid-market companies recognize that legacy systems workflow apps and less-sophisticated point solutions will not serve their long-term needs. BlackLine will continue to invest in this market to meet the growing demand.

I'm pleased with the positive results we are seeing from our go-to-market teams. Driving strong alignment and synchronization across global sales reps, strategic account managers, digital transformation teams, customer success managers, and reseller and consulting partners is critical to delivering a positive customer experience and these alignments shorten the time to value for the customer. Delivering an excellent customer experience remains a top priority for us. We continued to roll out our reseller partnership with SAP in Q2 and are expanding our investments to educate and drive greater awareness and alignment across the global SAP go-to-market teams.

Examples of progress include driving sales enablement with enhanced collateral, joint quarterly business reviews and increased engagement between SAP account executives and BlackLine sales reps. Additionally, we participated in SAP's SAPPHIRE Conference in May, where we had a record number of engagements with prospects. In September, we will have an SAP track at our InTheBlack Los Angeles event with curated content for SAP prospects to enable joint sales. Some early proof points that continue to validate the partnership include some new customer wins in the U.S.

and Europe in Q2, accelerated sales cycles through strong SAP relationships at the customer level, strong price points from tapping into larger IT budgets for digital transformation, and better access to large and strategic global deals. While it is still early, and there are not a lot of data points, we believe it remains a large global opportunity for driving growth. Among our consulting partner ecosystem, we saw increased engagement with a number of partners, including Deloitte and EY who are continuing to make significant investments in growing their BlackLine practices and the number of joint customer engagements. We are pleased with our performance in Q2 and our progress to date against customer, partner and sales initiatives.

We will continue to focus on driving growth and scaling the business throughout the year. And with that, I'll turn the call over to Mark.

Mark Partin -- Chief Financial Officer

Thank you, Therese, and good afternoon, everyone. As a quick reminder, unless otherwise noted, all numbers mentioned during my remarks today are non-GAAP. As Therese mentioned, Q2 was a good quarter driven by strong demand for our solutions. In particular, we saw a record number of expansions in our large, existing customers and experienced strong growth in the number of customers with an ARR of $250,000 or more.

We have invested a lot of time and effort in financial transformation leadership and believe this growth demonstrates our ability to support and scale alongside the largest companies in the world. Total second-quarter revenue grew 26% year over year to reach $69.7 million. Higher revenue in the quarter was helped by closing deals earlier in the quarter, a strong sales performance and a record number of large deals. A few other notes on revenue.

International business continues to grow on pace with our expectations, representing 23% of the total in Q2, up from 21% in the prior year. We continue to invest in both direct sales and partner support in our major markets in Europe and Asia PAC. Revenue from our SAP partnership was 24% of total revenue in Q2, compared to 23% a year ago. This metric represents our revenue with SAP customers under existing and former partnership agreements.

Services revenue saw a significant growth of 49% in the quarter. This is in line with our expectations as we continue to invest in this area to support growth of our strategic products. We expect services revenue will continue to accelerate and could represent as much as 6% of total revenue through the second half of the year. More than 70% of our large deals in the quarter included a partner, representing a good balance of partner participation.

Strategic products represented 15% of sales for the quarter, which remains in line with our balanced expectations for both core and strategic product sales. Please note, this metric tends to fluctuate on a quarterly basis. Moving on to our key performance metrics for the quarter. We added 106 net new customers and now serve over 2,800 customers globally.

Consistent with Q1, the quality of new logos was strong and included companies on a digital transformation path. The reasons for buying continue to include large financial transformation projects, where we are operating as a strategic vendor with the help of our partners. Our dollar-based net revenue retention rate was in line with our expectations at 108% and our renewal rate remained high at 97%. Gross margin for the quarter was nearly 83% with subscription gross margins at 86%.

In Q2, we generated net income attributable to BlackLine of $6.1 million. This exceeded our expectations due to the revenue over performance and the timing of certain expenses shifting to the second half of the year. We generated nearly $9 million in operating cash flow and $6 million in free cash flow for the quarter. We ended the quarter with approximately $145 million of cash and cash equivalents and marketable securities.

Now let's move on to our third quarter and full-year 2019 outlook. For the third quarter of 2019, total GAAP revenue is expected to be in the range of $71.7 million to $72.7 million. On the bottom line, we expect to report non-GAAP net income attributable to BlackLine in the range of $1.4 million to $2.2 million or $0.02 to $0.04 on a per share basis. Our share count will be approximately 59.8 million diluted weighted average shares.

For the full-year 2019, total GAAP revenue is expected to be in the range of $281 million to $284 million. Non-GAAP net income attributable to BlackLine in 2019 is expected to be in the range of $13 million to $15 million. Utilizing diluted weighted average shares of 59.2 million, we expect non-GAAP net income per share between $0.22 and $0.25. Lastly, I'd like to announce that we will be hosting an Investor Day in conjunction with our ITB LA event on September 17.

Please reach out to our Investor Relations team if you would like to participate in the Investor Day. Therese and I will now take your questions.

Questions & Answers:

Operator

[Operator instructions] Our first question is from Bhavan Suri with William Blair.

Bhavan Suri -- William Blair and Company -- Analyst

Everybody, thanks for taking my question, and congrats. That was a really solid quarter, nicely done. I guess, I wanted to touch first on the -- there's so many things to touch on. OK.

Let's touch first on the competitive environment. There's been a bunch of noise out there from your traditional competitors, like Trintech and then some of the smaller competitors out there at the lower end. I just love to get an update sort of broadly speaking on the competitor environment, and who you're seeing sort of, where they play and sort of win rates. Just an overall sort of view of how you're seeing things play out over the last couple of quarters from the competitive environment.

Let's start there.

Mark Partin -- Chief Financial Officer

Sure. Thanks, Bhavan. I think Therese and I both will have some to say about that. Our competitive field remains pretty consistent since we've been public, we still see the same people.

We believe our competitive position has strengthened in that time through our investments and our ecosystem and our products and a variety of things. But I'll say that the No. 1 competitor still remains Excel and Enertia. And when we go to market, that's still what we're seeing today.

Therese, do you want to?

Therese Tucker -- Founder and Chief Executive Officer

Yes. And we think that having more people making noise, Bhavan, is actually a validation of something that we've been saying all along that this is a very large unpenetrated market TAM. And having others in the market making noise only helps build awareness.

Bhavan Suri -- William Blair and Company -- Analyst

Fair enough. Fair enough. Maybe just to follow specifically. I guess, as you look at the market trend and you look at the competitors, and you look at sort of the core strategic customers you have, would you feel like the win rates you had are consistent and they haven't changed? There has been sort of no material losses in your core sort of large enterprise customer base?

Mark Partin -- Chief Financial Officer

Well, our win rates are still strong. Our salespeople still feel very good about our position when we're going into deals, particularly for the ones that we are trying to win. We are a large and strategic and premium provider of the product. We operate with the largest companies in the world.

At the same time, at the mid-market, as Therese mentioned earlier, we have over 1,200 companies. Our renewal rates are 97% on a composite. That's 98% of the enterprise and low to mid-90s on the mid-market. We don't like to lose any company on customers, but it happens.

But we -- look, we really focus on our target market, and we think our competitive position there is strong.

Bhavan Suri -- William Blair and Company -- Analyst

That's super helpful. Once quick follow-up. One of the things you've talked about in the past is the use of the partners and SAP driving its shift toward larger initial deal sizes at larger companies. Just some color and sort of how that pipeline's maturing and what you might see play out, say, through the rest of this year in terms of those relationships, both SAP and the partners continue to drive momentum for those larger initial deal size, which, obviously, we saw some that play out in Q2.

But obviously, I'd love to get some color on what do you think the rest of the year looks like.

Therese Tucker -- Founder and Chief Executive Officer

I think we are continuing to see digital transformation sort of take hold. And when we -- we've seen some really good expansion stories inside of our own customer base and it's a variety of both user expansion, as well as a lot of different products. It feels like the story that we are telling our customers about what they can do with BlackLine is really resonating with them. And that has been something that has been developing over a whole bunch of years and our experience in this market.

Mark Partin -- Chief Financial Officer

And those partners they participated in 70% of the large deals, they help make deals larger and more strategic for us, and we are both really investing in that partnership.

Bhavan Suri -- William Blair and Company -- Analyst

Awesome. Awesome. Thanks for taking my questions, guys. Thanks, again, and nice job.

Operator

Our next question comes from Rob Oliver with Baird.

Rob Oliver -- Robert W. Baird and Company -- Analyst

Great. Thank you guys for taking my question. Therese, you mentioned CFOs a lot in your prepared remarks. So I thought I would start there just to talk a little bit about the CFO role, and is that becoming your buyer? I know, traditionally, when you guys would land with Account Recs that wasn't your buyer.

And is that changing? And is that digital transformation and that move into the financial suite enabling you to touch that CFO more often in the sales process? And if so, how often? And then I have a quick follow-up for Mark.

Therese Tucker -- Founder and Chief Executive Officer

Excellent. Excellent point, Rob. And yes, resoundingly yes. OK.

As companies really start to realize that digital transformation is something that is necessary for the health of their organizations, then they look at -- the CFO wants to have a say in who their strategic partners are. So we are absolutely having more engagements with the CFO. Now it also happens to correspond to the strategic products -- strategic projects tend to correspond to a much larger spend as well, which also gets the CFO's attention and time. So it is absolutely tied to the financial transformation that companies are undergoing, and we're pleased with that movement.

Rob Oliver -- Robert W. Baird and Company -- Analyst

Great. Thanks, Therese. And Mark I just had a quick one. Just on -- if you could just -- I apologize, just remind us on the uptick and the services revenue and how you're thinking about that going into the back half of the year.

Is it around larger engagements demanding more of your time relative to your partner's time and taking control of that process with your most important customers? Is that the right way to think about it? And if not, what is?

Mark Partin -- Chief Financial Officer

Yes. Thanks, Rob. Yes, you answered that quite nicely. We've been investing in these large digital transformation in the customer implementation and service and success for strategic products, and we're bringing partners into those engagements as well.

And so we've ramped up and invested a lot of money in very capable people that help make the customer experience early and the time to value faster. And so, in Q2, we saw the initial acceleration. In the second half, we expect to see more of that as these people come online, and we get the customers to where they need to be. So we believe that it could be between 5% and 6% of revenue in the second half, which would be slightly up from where it traditionally was at 4% to 5%.

Operator

Your next question comes from Pat Walravens with JMP Securities.

Joe Goodwin -- JMP Securities -- Analyst

Hi. This is Joe Goodwin on for Pat. I just had a quick question around your kind of the enablement practices in the partnership with SAP.

Therese Tucker -- Founder and Chief Executive Officer

You have a question? Or you want me to speak to it?

Joe Goodwin -- JMP Securities -- Analyst

I guess, that is my question, if you could speak to it. Yes, please.

Therese Tucker -- Founder and Chief Executive Officer

OK. Well, we mentioned in our remarks today that we are doing the quarterly business reviews. Right? We've got additional collateral. We've been doing a number of joint events with SAP, various marketing events.

We have various outreach events to educate and sort of build awareness among the SAP sales force. And these are typically global. Mark and I have spent like the first part of the year doing quite a bit of travel around the world as part of sort of getting to know our SAP counterparts all over the place. And then what else am I on?

Mark Partin -- Chief Financial Officer

Yes. And we also -- see, it's not just marketing and the marketing partnerships and the events, but if you remember, these are sales reps, ours and theirs, in the field that are more engaged around pipeline managements and quarterly business reviews. And so the enablement is not just the collateral and education awareness, but really partnering and co-selling the key accounts that we're working with on SAP. And so it's a very much of ground roots effort.

Joe Goodwin -- JMP Securities -- Analyst

Great. Thank you.

Operator

Our next question comes from Chris Merwin with Goldman Sachs.

Mark Partin -- Chief Financial Officer

Hi, Chris.

Chris Merwin -- Goldman Sachs -- Analyst

Thanks for taking my question, and congrats on a great quarter. I guess, first one, I was hoping to touch on billings. It looks like there is a really nice acceleration there in the quarter to 30%. I know things moved around a lot.

Anything that you could highlight there? Was it movement of deals from 1Q to 2Q? Or it's just a really healthy pickup in our organic demand? Just curious anything you could speak to on the billings front.

Mark Partin -- Chief Financial Officer

Yes. Yes, for sure. Thanks. Yes.

What we saw in Q2 really as Therese mentioned was some results based on our execution within these large transformation accounts. So it was a record quarter for new large logos, as well as existing expansion deals. Many of those in sort of digital transformation that we're driving users, as well as strategic products. So it was just a well-rounded performance from the sales group to drive these large deals.

Therese Tucker -- Founder and Chief Executive Officer

And we have communicated before that we have been very focused on its execution this year. It is all about us executing on all the great things that we put in place last year.

Chris Merwin -- Goldman Sachs -- Analyst

Great. And maybe if I could sneak in one follow-up. I appreciate the comments on the new SOLEX agreement. You, obviously, sound like you're stepping up the investment more there.

So I mean anything you can say about the initial response of the SAP sales force to the investments you're making there to drive awareness? How that's been performing relative to your internal expectations? And is that in any way kind of contributing to the uptick in guidance for the year? Just any other details you can share would be really helpful.

Mark Partin -- Chief Financial Officer

Yes, for sure. Look, it's still really early in that partnership. So far, we've been pleased with a number of things. First, the engagements and feedback from the people in SAP that we do talk to and that we are working with.

We've extended our relationship with them further. Our challenge in the long term was that it's just more people, more awareness that it's such a large organization. Other things that we've seen that we really like is that SAP does really help bringing their customer relationships to the process. They can accelerate the sales cycles.

They can drive higher price points and tap into the IT budgets. They can really help us educate for digital transformation, and so we've been very pleased with the data points that we do have. Now our expectations are that the more we invest in time and effort and the more sort of success points we see, it will build on itself, and so as we move toward the second half and into next year, we expect to see more out of that partnership. But it certainly has met our expectations and some of our big assumptions that we've made on the partnership.

Chris Merwin -- Goldman Sachs -- Analyst

OK. Great. Thanks very much.

Operator

Our next question comes from Terry Tillman with SunTrust.

Eric Lemus -- SunTrust Robinson Humphrey -- Analyst

This is Eric Lemus on for Terry. Nice job in the quarter. SAP, obviously, is progressing well, so it sounds. Just wanted to touch on some of the other technology partners, specifically some of the other ERP partners.

With Oracle, you've had Oracle Connector out for a while. Should we expect any sort of deeper relationship on the technology or even at go-to-market side with other ERP vendors?

Therese Tucker -- Founder and Chief Executive Officer

We are always open to partnering with any of the ERPs that are out there. Oracle will probably not ever become a partner, simply because they have a competing product. But we always look to partner with as many different ERPs as we can. Because here's the thing, we serve as Switzerland to our customers.

Most larger companies out there have multiple ERPs. So having really good connectors, having really good seamless interfacing and movements of data, and having sort of that support in place really helps our customers centralize their close process, centralize their financials in a way that gives them tremendous benefits.

Eric Lemus -- SunTrust Robinson Humphrey -- Analyst

Great. And last quarter, you hired new CTO and it has been a couple of months since then. So can you give us any sort of update on some of the top focus areas or initiatives that he has in place?

Therese Tucker -- Founder and Chief Executive Officer

Well, he is really focused on our long-term strategy and where we're going to go with the technology and the tech stack in general. He is -- one of the great things about Pete is that, he is super smart and super technical, but has that rare combination of also being able to scale an organization. So he is certainly going through his evaluations and figuring out where additional people are needed. He is looking at our longer-term plans for the usage of different technologies that are available.

And I'm pleased, I'm really pleased. He is a great hire.

Eric Lemus -- SunTrust Robinson Humphrey -- Analyst

OK. Great. Thank you.

Operator

Our next question is from Mark Murphy with J.P. Morgan.

Pinjalim Bora -- J.P. Morgan -- Analyst

Hi, guys. This is Pinjalim on behalf of Mark. Congrats on the quarter. Therese, I wanted to ask you one thing about RPA.

It seems like there's a surge in those tools. How do you see those tools? I mean, is it complementary to BlackLine where you can maybe work side-by-side with those RPA tools? Or do you think over time RPA might become more competitive?

Therese Tucker -- Founder and Chief Executive Officer

Look, actually, we mentioned in last quarter's call that we have partnerships, ongoing partnerships with all of the major RPA players. OK? And I think that RPA is -- I think it's a very good complement to the automation that BlackLine brings, all right? Here's the beautiful thing, we look at how different financial processes can really be streamlined from end to end, all right? And where RPA is very focused on not sort of having a great efficient overall ICH process, close process whatever, they're focused on automating very, very specific tasks. And so we actually in certain cases have helped our customers by providing bots for very super-specific tasks. That is not digital transformation.

That is automation in a very, very narrow spectrum. It has its place. It has its value. We have -- and most of the RPA vendors are also our customers by the way.

So they're both customers and partners. And I don't see a conflict between what we do and what they do at all.

Pinjalim Bora -- J.P. Morgan -- Analyst

Awesome. Pretty clear. And on the gross margin side, I guess, Mark, the ramp in the services in the second half. How should we think about gross margin for the second half? I mean, will it come back down to the 80% level? And then I didn't hear anything about the FCF margin guidance.

Should we expect that to be the same as what you have said before?

Mark Partin -- Chief Financial Officer

On the gross margins, thank for the question, yes. I think that the long-term trend, as you mentioned, will move toward our target model of approximately 80%. It will tick down slightly in the second half due to what you mentioned on our emphasis at the services level. On the free cash flow margin, we are still looking for something in the range that we mentioned before in the 3% to 4% range.

And so the nature of that business profile is consistent.

Pinjalim Bora -- J.P. Morgan -- Analyst

Understood. Just to make sure I understand it. You said it will tick down in the second half, tick down versus the current level or below 80% level?

Mark Partin -- Chief Financial Officer

Sorry. Yes, it will tick down from 83% slightly toward the -- toward 80%. So we would look forward on a plus -- excuse me, on a minus 1% or something close to that.

Pinjalim Bora -- J.P. Morgan -- Analyst

Got it. Thank you so much.

Mark Partin -- Chief Financial Officer

Yeah. Thank you.

Operator

Our next question comes from Koji Ikeda from Oppenheimer.

Koji Ikeda -- Oppenheimer -- Analyst

Thanks for taking my questions, and a great quarter, guys. I just had a question, I wanted to dig in a little bit more on that billings. It really grew at an impressive clip this quarter. Really off the toughest comp of the year too.

I think there is some accountant hiring seasonality evolved in the second quarter, I guess. Please correct me if that's wrong. But I was wondering if that's right. Could you bifurcate the billing strength between the typical second-quarter season, hiring seasonality and the good deal commentary?

Mark Partin -- Chief Financial Officer

Interesting. I don't know that I can draw that straight line. Let me say what I think is happening. Q1 is a seasonal quarter as we spoke about before.

Q2 what drove our billings really was our success and large logos in both new and expansion. And we feel very good that our initiatives are coming online. As we move toward the second half of the year, we don't guide on billings because it varies. I think what we see in variance is more related to large deals versus related to hiring.

However, I think that in Q3, Q4, traditionally, we've had good sort of build through the year, a second half weighted year in kind of terms of overall seasonality. Maybe there is more to your question that I understand, Koji, but I think that's how I would think about it. It varies from quarter to quarter.

Koji Ikeda -- Oppenheimer -- Analyst

No. That's super helpful, Mark. And just a follow-up. Net revenue retention here has been at 108% for, it looks like, three quarters in a row now.

It sounds like there is some great expansion wins in the quarter, good customer success commentary too. I mean, I guess, is it really safe to say this could be the bottom here with the 108% and we could start seeing that metric expand in the upcoming quarters?

Mark Partin -- Chief Financial Officer

Sure. For the full year, we've talked about it being kind of a plus or minus. And even though we did have a great quarter, what really -- we need more consistent, focused execution really to move the needle on that metric sort of given the revenue base and how it's calculated. What I will take from your point is that our renewal rate, the buildup of that remains strong.

It continued to be 97% in the quarter. We feel good about that particularly in the enterprise and our opportunity through our strategic initiatives of digital transformation, strategic product portfolio, really can impact that number positively. At the same time, there are some numbers that work against it, which are as we land large and as we have more and more success in the mid-market, those are things that tend to pull that back slightly. So 108% plus or minus for the full year is how we talk about it.

And again, we're pleased with the fact that our expansion deals in Q2 look so good.

Koji Ikeda -- Oppenheimer -- Analyst

Thanks again for taking my questions. Great quarter, guys.

Mark Partin -- Chief Financial Officer

Thank you.

Operator

Our next question comes from Brian Peterson with Raymond James.

Brian Peterson -- Raymond James -- Analyst

Hi, Therese. Hi, Mark. Thanks for taking the question. Congrats on the quarter.

So just one question for me. So I think, it's pretty clear that the strategic deal activity and the momentum with partners really picked up this quarter. And I think it's pretty intuitive on how the partners are helping you win some large deals with new logos. But how does that work in terms of partners potentially helping you with existing customers? Just curious if that dynamic is happening and how that works.

Therese Tucker -- Founder and Chief Executive Officer

We actually have partners who specialize in helping our customers optimize their BlackLine instances. So that in and of itself because if that actually is a great revenue opportunity for them, because if someone has purchased BlackLine and they're not getting full value, having a partner go in there and sort of walk through all the different areas where they can utilize it much more to get much more value, that's consulting dollars for them and that's stickiness for us. When the customer gets more value out of what they purchase, it's a win for everybody involved. So yes, there are absolutely -- different firms have different approaches to this, but there are absolutely practices built around optimizing BlackLine usage.

Operator

Our last question comes from Brent Bracelin with KeyBanc.

Clarke Jeffries -- KeyBanc Capital Markets -- Analyst

Hi. This is Clarke on for Brent. Firstly, I was wondering if I could get the international mix for the quarter. And then, adding to that, any color of what you're seeing in terms of pipeline or demand internationally, specifically EMEA? You've highlighted several large U.K.

deals in the last two quarters. So looking to understand how you attribute your success in that market.

Mark Partin -- Chief Financial Officer

Sure. Yes. Our international mix ticked up from 21% to 23% in the quarter. And that's across both Asia Pac and Europe.

We are seeing good momentum in both markets, good growth. We've been investing there over the last number of years. As you've mentioned, the last year has been particularly strong. We're pleased with the team that we've made -- excuse me, that we've invested in, in both Asia PAC and Europe.

And our partnerships with SAP, our partnerships with the consulting ecosystems have helped us, we believe, to move that ball forward. So we're pleased with where that mix is and it's what we expected.

Therese Tucker -- Founder and Chief Executive Officer

Beginning to grow, yes.

Mark Partin -- Chief Financial Officer

Yes.

Clarke Jeffries -- KeyBanc Capital Markets -- Analyst

Great. And Therese, based on your comments of maintaining customer success and customer experience is the top priority. I could imagine that could be more difficult when you're talking about across partners or across -- into a different organization. So I was wondering if we could get a view into how you're handling the handoff between, for example, SAP and BlackLine in terms of enabling the success and expansion to give you those anecdotes of customers that have been around since 2011 to 2020 that are still --

Therese Tucker -- Founder and Chief Executive Officer

That's a great question because that's been one of the areas that we've really been focusing on. And I specifically mentioned that. Thanks for calling that out. Because getting that alignment and making sure that you have the right handoffs, making sure that you have the right set of communications.

Right? Because it's not just between SAP and BlackLine. It could be SAP and BlackLine and a consulting partner that's going to be doing the implementation. And then there might be a BPO involved as well. And so having the right people in-house that know what level they need to be involved at.

Right? Because you don't want things go sideways, you don't want to just hand it off and forget about it because we own that customer relationship. So getting that right has really been something that we've been focused on getting much better at over the last year. And we actually did call that out today, because I'm really proud of what I'm seeing in terms of how all of our internal group, customer success, the accounting innovation team, all of those, how they're working together, right, to bring the best possible experience to the customer. So I think we've got much, much better at that, and it has very much to do with the type of customer, the type of project, what level of involvement we have, who the partners are that are working on this, and how to best make it successful for the customer.

And that's just a body of expertise that I feel really good that we're getting.

Clarke Jeffries -- KeyBanc Capital Markets -- Analyst

Thank you.

Operator

And this concludes the Q&A session. I would like to turn the call back to Therese Tucker, the founder and chief executive officer, for her final remarks.

Therese Tucker -- Founder and Chief Executive Officer

Thank you, everyone. Thank you for your ongoing support and your evangelism of BlackLine. It continues to bring us new referrals and customers. Please do keep it up, and thank you for joining us today.

Operator

[Operator signoff]

Duration: 48 minutes

Call participants:

Alexandra Geller -- Vice President of Investor Relations

Therese Tucker -- Founder and Chief Executive Officer

Mark Partin -- Chief Financial Officer

Bhavan Suri -- William Blair and Company -- Analyst

Rob Oliver -- Robert W. Baird and Company -- Analyst

Joe Goodwin -- JMP Securities -- Analyst

Chris Merwin -- Goldman Sachs -- Analyst

Eric Lemus -- SunTrust Robinson Humphrey -- Analyst

Pinjalim Bora -- J.P. Morgan -- Analyst

Koji Ikeda -- Oppenheimer -- Analyst

Brian Peterson -- Raymond James -- Analyst

Clarke Jeffries -- KeyBanc Capital Markets -- Analyst

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