Investors would be forgiven for never having heard of BlackLine (NASDAQ:BL), but the company is increasingly grabbing the attention of accounting professionals everywhere by simplifying the time-consuming and complex process of account reconciliation and period-end review. The software-as-a-service (SaaS) provider had more than doubled since its IPO just two years ago, but the recent market downturn has caused the stock to shed nearly a third of its value -- despite strong growth and solid execution.

BlackLine will have another opportunity to make its case when it reports its third quarter financial results after the market closes on Thursday, Nov. 1. Let's take a look at the company's recent results and see what we can expect when BlackLine reports earnings.

Two men looking at financial reports on a computer.

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Continued strong growth

For the second quarter, BlackLine reported revenue of $55.5 million, an increase of 32% year over year and topping the high-end of the company's guidance. Adjusted net income of $0.5 million resulted in adjusted earnings per share of $0.01 compared to a $0.01 loss in the prior-year quarter, also exceeding the company's forecast.

BlackLine saw solid growth across all markets, geographies, customers, and products. The company added 105 net new customers during the quarter, bringing the total to 2,402, an increase of 21% year over year. These new clients came from a broad range of industries and business sizes, from mid-market companies, financial institutions, and universities to some of the largest global enterprises. The instances used per customer improved, as well, expanding the company's user base to 209,550, up 29% compared to the prior-year quarter.

What's even more impressive is BlackLine's ability to maintain those customers and sign them up for additional products and services. The company boasts a customer renewal rate above 90%, and the dollar-based net revenue retention rate hit 111% last quarter -- meaning each customer is spending more. BlackLine also revealed it had achieved a record number of large new deals, though the details were sparse.

What this quarter could hold

For the third quarter, BlackLine is forecasting revenue in a range of $57 million to $58 million, which would represent year-over-year growth of between 24% and 26%. The company also is anticipating adjusted net income at breakeven compared to a loss of $0.6 million in the prior-year quarter. Analysts' consensus estimates are calling for revenue of $57.7 million and adjusted earnings per share at breakeven, both near the midpoint of BlackLine's guidance.

BlackLine also has raised its full-year forecast twice in as many quarters and is now calling for revenue in a range of $224 million to $227 million, which would represent year-over-year growth of between 27% and 28%. Investors should look for continued strong renewal rates and customer and user additions, which, in turn, will lead to increasing revenue growth. 

BlackLine has a history of beating both its own guidance and analysts' expectations, so there's little reason to believe that things will be any different when BlackLine reports earnings on Nov. 1. The company has been caught up in the recent market malaise, not on any company-specific news, leaving plenty of upside for the accounting-software upstart.

Danny Vena owns shares of BlackLine, Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.