According to a Transparency Market Research published earlier this year, the global accounting software market was estimated at $5.7 billion last year. It is expected to grow to $11.8 billion this year and to continue to grow at 9% annually over the next 8 years. Recently, cloud-based financial software provider, BlackLine (Nasaq: BL) announced better than expected third quarter results. But the present turmoil in the market hasn’t spared this stock either.
BlackLine’s Financials
Revenues for the third quarter grew 29% over the year to $58.7 million, compared with the Street’s estimate of $57.6 million. It ended the quarter with a net loss of $4.5 million. On an adjusted basis, EPS came in at $0.07 compared with the market’s forecast of a break even quarter.
By segment, subscription and support revenues grew 31% to $56.2 million and professional services revenues grew 7% to $2.56 million.
Among other metrics, it added 92 net new customers in the quarter to end with over 2,490 customers. Net user base for BlackLine grew to 214,747.
BlackLine forecast revenues of $61-$62 million with a Non GAAP breakeven for the current quarter. The market was looking for a break-even quarter as well with revenues of $61.7 million. BlackLine expects revenues of $226.5-$227.5 million for the year with an EPS of $0.08-$0.09. The market was looking for revenues of $227.2 million with an EPS of $0.09 for the year.
BlackLine’s Expansion Plans
BlackLine continues to grow its international footprint. Recently it entered into a joint venture relationship with Japan Cloud to expand its presence in the region. According to a Forrester report published earlier this year, . Japan Cloud already has joint ventures with companies like Salesforce.com, Concur and Marketo to help them launch services in Japan. BlackLine has entered into a similar agreement and will bring its financial close automation solutions to the region.
BlackLine is also expanding its agreements with other tech giants to drive market growth. Recently it announced a reseller agreement with SAP that will allow SAP to resell BlackLine’s cloud-based finance and accounting solutions to businesses around the world. BlackLine’s cloud platform complements SAP ERP Financials solutions, including the SAP S/4HANA Finance solution to bring in enhanced control and automation to Finance & Accounting departments. Besides selling the solution, SAP will also provide customer support for BlackLine.
