The Mutual Growth of BlackLine and SAP

The Mutual Growth of BlackLine and SAP

A look at the 2019 financial report for BlackLine and its mutually-benefitting relationship with SAP.

BlackLine, a cloud-based financial software provider, has announced the results of its fourth-quarter performance. The results showed that the company had exceeded its market expectations on all counts. While the earnings outlook was a bit disappointing, this did not affect the growth of its stocks.

From the financial report, Seeking Alpha wrote that the revenues for the fourth quarter of 2019 increased by 29% over the year to $80.3 million. The numbers were ahead of the $77.9 million estimates done by Street.

The adjusted earnings per share (EPS) was at $0.14, which was a bit higher than the $0.13 estimate provided by Street.

For the segment, subscription, and support revenues, it grew 26% to $74.8 million. As for the professional services revenues, it grew 98% to $5.5 million.

Meanwhile, the net loss was at $9.2 million. It is approximately a million more than the $8.2 million net loss reported for 2018.

BlackLine’s financials also showed excellent performance across other metrics. It has added 153 net new customers in the quarter, which ended with 3,024 customers for the year. The overall user base also grew to 267,621 by year-end. It has delivered a dollar-based net revenue rate of an impressive 110%.

Additionally, BlackLine has ended the year 2019, with revenues growing 27% to $289 million. With it, the net loss also increased from $28.8 million to $32.1 million. Meanwhile, on an adjusted basis, BlackLine’s net income was $0.59 per share for the year.

As for the first quarter of 2020, BlackLine has forecasted revenue of $80 to $81 million with a non-GAAP net income of $0.04 to $0.06 per share. By the end of the year, BlackLine is expecting a year-end revenue of $347 to $352 million with an EPS of $0.45 to $0.48.

The market expectations met by BlackLine can be attributed to the increasing number of companies who are stepping up their game with their digital transformation for its accounting practices. The company also continued to pursue investments in growing its enterprise and mid-market customers globally. With this, they have been actively integrating its solutions with SAP. Just recently, BlackLine announced that it had received three SAP-certified integrations with SAP S/4 HANA.

The SAP-certified integration called ‘BlackLine Connector for SAP Solutions’ is useful for extracting data out of SAP and directly into BlackLine. BlackLine Web Services Connector for SAP Solutions helps send data from BlackLine into SAP. And lastly, the BlackLine Smart Close 5.05 is beneficial in closing books. All of the abovementioned BlackLine integrations work even with the earlier versions of the SAP software and can be utilised by organisations in automating tasks.

Meanwhile, SAP is reselling these BlackLine products as SAP Solution Extensions, which helps strengthen BlackLine’s integration with SAP’s product roadmap.

All of the certifications are proof of BlackLine’s efforts to become an active contributor to the SAP ecosystem to help in expanding its market reach on a global scale. The integrations will help deliver standardised and easier migration to SAP for its customers with fewer resources and minimal risks.

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