In response to the company reporting strong second-quarter results, shares of BlackLine (BL -5.10%), a software-as-a-service provider focused on the needs of accountants, were up 23% as of 11:18 p.m. EDT on Friday.
Here are the key takeaways from the earnings report:
- Revenue rose 26% to $69.7 million. That was ahead of the $68 million that Wall Street had expected.
- Net loss under generally accepted accounting principles (GAAP) was $5.2 million, or $0.09 per share.
- Non-GAAP (adjusted) net income was $6.1 million, or $0.10 per share. This was up substantially from the $500,000 reported in the year-ago period. It was also much better than the $0.01 that market watchers had predicted.
- Free cash flow was $6.2 million, up from $1.2 million in the second quarter of 2018.
- 106 net new customers were added during the period, bringing the total to 2,813 customers at quarter-end.
- The dollar-based net revenue retention rate was 108%.
Shifting to guidance, here's what BlackLine expects in the upcoming quarter:
- Q3 2019 revenue will land between $71.7 million and $72.7 million. Wall Street is currently forecasting $71.3 million, so the midpoint of this range is above the average estimate.
- Q3 2019 non-GAAP EPS is expected to be in the range of $0.02 to $0.04. Wall Street is looking for $0.04.
- Full-year 2019 revenue is expected to be in the range of $281.0 million to $284.0 million. This is nicely above the $279 million that Wall Street expects.
- Full-year 2019 non-GAAP net income attributable to BlackLine is expected to be in the range of $13 million to $15 million, or $0.22 to $0.25 per share. This compares favorably with the $0.17 consensus estimate on Wall Street.
Traders are bidding up the share price in response to the strong quarterly results and upbeat guidance.
BlackLine continues to add customers, persuade existing customers to spend more, and drive outsized growth on the bottom line. You can't ask for much more than that.
With an estimated total addressable market opportunity of $18 billion, there's still plenty of runway ahead, too.
All in all, there are lots of reasons for growth-focused investors to put this niche software provider on their radar.