Q3 BlackLine Notes

Demand environment steadily improved, the momentum BlackLine is experiencing is validation that the finance transformation is mission critical and climbing to the top of CFO priority list. GAAP revenue clocked in at $90.5 million for the quarter, increase of 21% vs the 15% estimates. Operating cash flow of $21.8m, up from $9.9m in 2019. Free cash flow of $18.5m, compared to $7.1m last year.

Key metrics:

  • 88 net new customers for a total of 3,226 customers (almost 1 customer per day)

  • User base expanded to 282,579

  • DBNE of 107% (I would like to see this improve into 2021

  • Named "Best Place to Work in Los Angeles"

Guidance: Revenue between 91 and 92m, 91.5m at the midpoint (which would clock in 14% YoY Growth, I expect a beat obviously). Total 2020 revenue expected to be in the range of $347.4 to 348.4. Midpoint of $347.9 gives us a FY raise from Q2 guidance of $337, and increase of 3.2%. I will take it, given the COVID circumstances. Continuing to power FCF and Revenue growth, I am on board. The company posted a beat on non-GAAP EPS and GAAP EPS. Consensus for Q4 was 86.41 and they guided for 91.5, that’s a beat. The Q3 beat and the Q4 guidance beat essentially give us the FY Guidance raise, so I am thinking in Q4 they will even beat that guidance. Could expect upwards of $350m this year in revenue in 2020.

Blackline Sees Q4 Sales $91M-$92M Vs $86.41M Estimates, EPS $0.06-$0.08 Vs $0.06 Estimates; FY20 Sales $347.4M-$348.4M Vs $337.37M Estimates, EPS $0.61-$0.63 Vs $0.47 Estimates, I am so long this company! I believe they will end up being a $20b company.

So far, I am intrigued by the report, beats all around. Lets move onto the call.

Notes:

  • More permanent remote closes, because of blackline platform

  • Each month stronger than the one before

  • Strong account growth, large deal expansion, continued adoption of products

  • Immediate ROI with mid-market CEOs

  • Strongest services quarter YET, in the midst of pandemic!

  • 81% Gross Margin, 21% FCF Margin

I am long.

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