Unless you work in the accounting industry, you've probably never heard of BlackLine (NASDAQ:BL). That shouldn't stop investors from checking out the cloud-based platform that continues to deliver enviable results. The company has tools that help automate the process of period-end close and is a hot commodity among finance and accounting professionals.

In this episode of Fool Live that aired on Oct. 30, "The Wrap" host Jason Hall and Fool.com contributor Danny Vena discuss BlackLine's third-quarter results and why investors shouldn't miss out on this pioneering software company.

Jason Hall: How about, and I know this is kind of a crazy thing to do on a stock program, a program that talks about investing. What if by chance, we were to say, maybe Danny Vena, if you were to talk about BlackLine company, I think they reported earnings. What about talking about that?

Danny Vena: Why don't we do that, we're going to talk briefly about BlackLine. Now, BlackLine is not a stock that is well known as many of the others that were covered already this week. I know we've heard a lot about Apple and Facebook and [Alphabet's] Google and Twitter.

Hall: Danny, what's BlackLine's ticker?

Vena: BlackLine's ticker is Bravo, Lima. BL. BlackLine is a company that is a software-as-a-service (SaaS) company, and what BlackLine does, and I can identify with this because in my life before the Fool, I was a controller for small and medium-sized businesses.

One of the things that a controller does is at the end of every accounting period, be it the end of the quarter or end of the year or the end of the month even, I have to reconcile all those accounts, and I have to do something called month-end close. Month-end close is essentially like reconciling your bank account, except multiply that 100 times over, and you get an idea of what month-end close is like. BlackLine is a company that has put together a software package that allows you to do what they call a continuous close, which is at the end of every day, you do a few things as you go along. At the end of the month, you don't have a 100 different accounts to reconcile, you only have a few more steps to do. Instead of a month-end close period being several days or as much as two weeks for larger companies, it can be done in a few hours or days. That's what BlackLine does.

Now, I'm going to share my screen here so we can look at BlackLine's earnings announcement. Here we have BlackLine, BlackLine's third-quarter financial results. Revenue of $90.5 million for the third quarter up 21 percent year over year. Their net loss attributable to BlackLine was $0.15 a share, which compares to a loss of $9.2 million. Actually, they've cut their lost just a little bit year over year. Their non-GAAP net income was $0.25 a share, so your adjusted income of $0.25 a share, and if we go just a little bit further down, they generate some good operating cash flow, $21 million compared to $9.9 million in the third quarter [last year].

Essentially, even though their revenue was only up a small amount, operating cash flow essentially doubled. Free cash flow here, also up a little bit more than doubled went from $7.1 million to $18.5 million. A lot of good numbers there from the top to the bottom line, some of the key metrics that they use, the company added 88 net new customers for the quarter, bringing the total to 3,226. Now that might not sound like a lot, but it's important to remember that as a software-as-a-service company, if you add a new customer, you're adding multiple new users for each large company.

That goes down into the next line here, where they expanded their user base at 282,000 for the quarter and the net dollar-based retention rate, a lot of folks that follow software-as-a-service companies know that this is one of the big go-to metrics, basically, you're looking at the cohort of customers that they had in the same quarter last year, and see how much that same cohort of customers is spending this year. This 107 percent means existing customers are spending seven percent more this year than they did last year. Which means you're expanding with your existing customers, you're adding more users, they are adding new services that BlackLine provides. This is all really good news.

The company was named the Best Place to Work in Los Angeles by the Los Angeles Business Journal. I brought BlackLine to several Fools' attention here back a couple of years ago just because it was something that was near and dear to my heart, and now it's become one of the favorites of Brian Feroldi, who was here on the Brian and Brian Hour just past. This is a really good quarter for the company.

Now looking ahead just a little bit, they expect revenue to be in a range of $91 million and $92 million, and they're expecting their net income to be between $0.06 and $0.08 a share. This is not growth like you see from some SaaS companies. You see some of these companies with 60 or 80 or 100 percent growth. The fact that BlackLine is putting up 20 percent growth, it's a little bit of a niche market. You're not going to see that same crazy growth net you will see with SaaS companies in general, but the fact that they are growing solidly through the pandemic, the fact that the company, it is continuing to add new users and those users are spending more money, this is just a really good, solid software-as-a-service business, and it's actually one of one of my favorites, it's been around for a number of years.

Hall: Danny, thank you for that. I love it when you guys bring these easily missed or easily misunderstood businesses that have great prospects and fall in the check-off a lot of the buckets for a lot of things that really this is one that checks-off a lot of David's got a Rule Breaker investment's buckets, I think it's really interesting, thanks for sharing that with us.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.