Cloud Stocks: BlackLine Is Targeting A/R Automation Market

According to a recent Comserve report, the global accounts receivable (A/R) automation market is estimated to grow at 12.7% CAGR over 2020 to 2025. The current pandemic has accelerated the need for an efficient A/R collections process as the A/R management is critical in helping businesses complete their order-to-cash process. BlackLine (NASDAQ: BL) is leveraging its recent acquisition to make inroads in this market.

BlackLine’s Financials

BlackLine’s fourth-quarter revenues grew 19.2% over the year to $95.71 million, ahead of the market’s estimate by 4.49%. Net loss was $17 million, compared with a net loss of $9.2 million a year ago. Adjusted net income was $13.1 million, or $0.21 per share, compared with the market’s estimates of $0.07 per share for the quarter.

Among key metrics, it added 207 net new customers to end with 3,433 customers at the end of the June quarter. It expanded its user base to 291,873 and reported a dollar-based net revenue retention rate of 106%.

Revenues for the fiscal year grew 22% to $351.7 million. It ended the year with an EPS of $0.76.

For the first quarter, BlackLine expects revenues of $95.5-$96.5 million with an EPS of $0.04-$0.06. It expects to end the year with revenues of $410-$415 million and an EPS of $0.38-$0.41. The market was looking for revenues of $94.98 million for the quarter with an EPS of $0.09 and revenues of $410.20 million for the year with an EPS of $0.51.

BlackLine’s Acquisition

During the quarter, BlackLine announced the acquisition of UK-based Rimilia for $150 million. Founded in 2008 by Steve Richardson, Rimilia is a SaaS platform that uses AI and machine learning to simplify the order-to-cash processes by automating the collection and allocation of customer cash. Prior to the acquisition, Rimilia had raised $40 million in funding from investors including Eight Roads Ventures, Kennet Partners, and Silicon Valley Bank.

The acquisition will allow BlackLine to strengthen its position in controllership offerings by ensuring data integrity and end-to-end automation of the cash lifecycle. The acquisition will also broaden its capabilities by adding AR automation and accelerating its long-term plan for modernizing and transforming Finance & Accounting.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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