1/ At the end of 2018, I picked Blackline $BL as my fintech stock pick of the year for 2019. The company reported its 2019 full-year earnings this past week, so it seems like a good time to check in to see how it's progressing...
2/ BlackLine's $BL cloud-based SaaS platform automates/standardizes complex accounting tasks that are labor-intensive.
Its solutions help companies move to modern accounting by unifying data/processes, automating repetitive work, and driving accountability through visibility.
Its solutions help companies move to modern accounting by unifying data/processes, automating repetitive work, and driving accountability through visibility.
3/ Since the article making the pick published on 12/22/18, Blackline $BL is up 73% to the S&P 500's 40%. Though, to be fair, when the 2019 calendar year ended the stock's performance and market index were practically in a dead heat.
4/ The company's full-year results were impressive:
Rev $289M, +27%
Free cash flow $19.6M, +367%
Added 153 net new customers for total of 3,024 customers, +15% YOY
User base 268K, +20% YOY
Adj gross margin 83%
Net revenue retention rate 110%
Customer renewal rate 98%
Rev $289M, +27%
Free cash flow $19.6M, +367%
Added 153 net new customers for total of 3,024 customers, +15% YOY
User base 268K, +20% YOY
Adj gross margin 83%
Net revenue retention rate 110%
Customer renewal rate 98%
5/ What I like::
W/ 98% renewal rate, customers clearly finding value in $BL's value proposition, b/c it saves companies time and money.
Little competition solely focused on this pain point for companies
Recognized by Gartner as leader in vision and execution in field
W/ 98% renewal rate, customers clearly finding value in $BL's value proposition, b/c it saves companies time and money.
Little competition solely focused on this pain point for companies
Recognized by Gartner as leader in vision and execution in field
6/ The company has a long runway of growth ahead too, w/ many growth levers left to pull.
7/ $BL also has "strategic products" which it upsells to existing customers, increasing the average contract value the longer the customer is w/BL.
In Q4, strategic products made up 22% of total revenue.
In Q4, strategic products made up 22% of total revenue.
8/ Strategic products:
Intercompany Hub - automating transactions btwn cos under the same corporate umbrella
Smart Close - eliminates 80% of manual tasks wrt closing/reconciling books by automating work flows
Xaction Matching - Match/reconcile millions of xactions in minutes
Intercompany Hub - automating transactions btwn cos under the same corporate umbrella
Smart Close - eliminates 80% of manual tasks wrt closing/reconciling books by automating work flows
Xaction Matching - Match/reconcile millions of xactions in minutes
9/ With $290M in TTM revenue and market cap of approx $3.7B, $BL price-to-sales ratio is about 12.8 In today's market, that's not horrible for a cloud-based SaaS platform w/ 80%+ gross margin.
Still company is guiding for 21% rev growth in 2020, a bit lower than I would like.
Still company is guiding for 21% rev growth in 2020, a bit lower than I would like.
10/ I'm long $BL, but it's a smaller position, approx 1% of total portfolio and currently debating whether to just hold or add another small bite.
11/ Hat tip to @maddenifico for reminding me how good founder and CEO Therese Tucker is. Great interview at the link (approx 8 min).
"I think one of the things that's great about a bootstrap company, is you spend the money like it's your own."
wsj.com/video/series/s…
"I think one of the things that's great about a bootstrap company, is you spend the money like it's your own."
wsj.com/video/series/s…
