BlackLine Expands Product Line-up with AI and AR tools

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According to a recent report, the global accounting software market is expected to grow at 8% CAGR to reach $38.08 billion by 2030. BlackLine (NASDAQ: BL) is targeting to grow in this market through several product upgrades that leverage its AI capabilities.

BlackLine’s Financials

BlackLine’s third quarter revenues grew 23% to $134.3 million, ahead of the market’s estimate by 0.4%. Net loss was $20 million, compared with a net loss of $8.6 million a year ago. Non GAAP net income was $15.1 million, or $0.21 per share, compared with the market’s estimates of $0.09 per share.

Among key metrics, it added 57 net new customers to end with 4,060 customers at the end of the quarter. It expanded its user base to 354,924 and reported a dollar-based net revenue retention rate of 109%.

For the fourth quarter, BlackLine expects revenues of $138-$141 million and an EPS of $0.15-$0.19. The market was looking for revenues of $142.36 million and an EPS of $0.09.

The company expects to end the year with revenues of $521-$524 million and an EPS of $0.44-$0.48. The market was looking for revenues of $524.8 million and an EPS of $0.25.

BlackLine’s Product Upgrades

During the quarter, Blackline announced several product upgrades. It announced plans to release the BlackLine Accounting Studio that will integrate BlackLine’s existing solutions across the Financial Close Management, Accounts Receivable (AR) Automation and Intercompany Financial Management (IFM) categories, as well as other financial applications and ERPs, into a single, controlled environment.

By bringing together people, processes, and data and enabling organizations, the platform will help unify disparate financial data systems and drive automation within the organization. It will provide a dedicated space for regulatory requirements, data inputs, and designing compliant processes.?It is geared to address the needs of multiple F&A systems, ERPs and data flows, thus allowing for easy creation and configuration of standardized process workflows. The system is expected to be available by Q2 of 2023.

It also revealed its Financial Reporting Analytics solution that will enable analysis and validation of group-level financial data with direct, real-time visibility into the local or underlying details. The solution will allow finance teams to review financial statements and conduct variance analysis faster and redeploy resources to focus on exceptions.

Given the current fears of recessionary economic conditions, BlackLine also released a cash application, the Modern Accounting Playbook for Cash Application, that will help smaller companies transform their accounts receivable processes. The new edition of the Modern Accounting Playbook (MAP) specifically for Cash Application provides guidance based on leading practices to help organizations transform critical processes and achieve real-time visibility into AR.

BlackLine Cash Application uses AI to customer payments and invoices, achieving up to an 85% auto match rate, reducing manual effort, freeing up lines of credit, granting AR professionals full visibility and control. Its AI technology considers factors like customer behaviors, sales trends and payment outcomes to drive decisions on credit limits, risk policies and collection strategies.

Finally, it introduced a Connector for Microsoft Dynamics 365 to provide enhanced connectivity and data integrity so that there is a secure transmission of up-to-date information. With BlackLine’s Microsoft Dynamics 365 Connector, accounting and finance teams can gain better control and visibility into the movement of data from Microsoft Dynamics 365 to BlackLine, thus seeing greater accuracy of results.

BlackLine’s stock is trading at $65.90 with a market capitalization of $3.93 billion. It had touched a 52-week high of $93.11 in January last year. The stock has recovered from the 52-week low of $48.73 that it had fallen to in October last year.

Disclosure:?All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article.

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