Q3 2019 Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Q3 2019 Black line earnings Conference call.
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Now I'd like to handle the conference over to your speaker today.
Sandra Keller Vice President Investor Relations. Please go ahead.
Good afternoon, and thank you for your participation today with me on the call is treat Tucker founder and Chief Executive Officer of Black line, and Mark Parton, Chief Financial Officer before we get started I would like to know that certain statements made during this conference call that are not historical facts, including those regarding our future plans.
Objectives and expected performance are forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995. These forward looking statements represent our outlook only as of the date of this call. While we believe any forward looking statements, we'd meet or reasonable.
Actual results could differ materially because the statements are based on our current expectations and are subject to risks and uncertainties. We do not undertake and expressly disclaims any obligation to update or alter our forward looking statements, whether as a result of new information future events or otherwise.
Except as required by applicable law.
Also unless otherwise stated all financial matters discussed on this call will be non-GAAP discussion of why we use non-GAAP financial metric measures and information regarding reconciliations of our GAAP versus non-GAAP results is currently available in our press release, which may be found on.
Our Investor Relations website, and investors Dot Black line dotcom or on our form 8-K filed with the FCC today.
Now I will turn the call over two to reach to begin.
Good afternoon, everyone and thank you for joining US today, we are pleased with our performance in Q3, which saw strong demand across all areas of the business as more companies embrace digital transformation.
We continued to drive success for our customers and demonstrated another quarter of solid execution on our strategic initiatives and long term goal.
This September we hosted our North America in the Black user conference with more than 1700 attendees, representing our largest conference to date.
The event was held in Los Angeles, and generated significant value for customers partners and prospects for many of you that attended our Investor day were able to witnesses first hand.
The four day conference continues to be one of the great thought leadership opportunities for finance and accounting professionals to gain best practices from Black line experts employees partners and their peers.
This year at the conference more than ever I noticed a recurring theme that companies are seeking guidance on best practices from Black line in order to execute on their digital transformation journey.
Our customers are all different stages of very accounting and finance journey.
But customers with them with us for years and I recognize the value of an automated financial close they're beginning to shift towards process improvement and value creation that next step includes better engagement with their existing products to increase automation and efficiency in line with that.
Out of our leading customers expanding global usage of their existing products and re evaluating additional black line products.
For newer customers and prospects. There next step may simply be to solve for a specific pinpoint and their financial close or increasingly going to market for a full financial transformation solution out of the game.
All of these instances black line to leadership experience and technology gives us unique ability to unlock value for these companies at all stages of the accounting and finance transformation journey.
[laughter] pioneering this market many years ago, we have consistently invested in educating cfos controllers, and accountants to modernize their financial close and drive greater efficiency and stronger internal controls with less time and fewer resources.
In recent years, we have invested millions of dollars in global customer success team and accounting transformation specialists to accelerate that piece of education engagement. We believe these investments drives significant value for our customers as they look to transform their operation and anticipate.
<unk> continued investment in this area. Some specific examples include a newly established workshop to optimize usage of our account reconciliation product year to date, we have posted 60 of these workshop for a large group of enterprise and Midmarket customers.
Nearly all who attended realized an average 15% increase in their auto certification rate.
In line with increased demand for our transaction matching product. We recently launched a transaction matching optimization workshop to drive greater automation and efficiency for customers, we plan to roll out additional optimization workshop to better support and educate our customers across all black.
Climb products.
This commitment to our customer success was validated in Q3 by a strong renewal rate a healthy net dollar retention rate.
Growth in strategic products and continued expansion of users and products amongst our existing customers.
A few examples include.
Global oil and gas company first became a black line customer in 2009 with account reconciliations and task management.
Following the spin off the company was able to pursue their digital transformation goals and functionality be on their home grown intercompany solution.
In Q3, they chose black lines intercompany hub due to our unique ability to oversee intercompany processes and transaction from start to finish it was incredibly important for this customer to integrate all global entities to processed transactions validate them clear out open items.
And invoices to us customers and finally get paid.
In Q3. This customer also added more account reconciliation users to their black claim instance.
Today. This company is one of our largest customers with room to add more users and product.
Next a fortune 200 household products manufacture first became a customer in 2006, where they come back Conciliations and task management in April 2018, their accounting leadership team was given a directive to drastically reduce annual.
F T E hours by 150000 hours.
Overwhelmed by the scale of this initiative the customer turned to black line for advice.
Our account transformation specialists spent two days onsite with the client mapped out all of their processes and develop the plan to realize their goal by lover genes black lines tools.
This customers Aha moment came when they realized that what had seen nearly impossible could be accomplished with black line.
After that the customer was all in on Black line and in Q3. They added journal entries transaction matching variance analysis and smart close to further optimize their business processes with enhanced visibility and automation. This customer expansion story is a perfect example of how we invest.
And our customer success, which drives them to invest in as their strategic partner for the long term.
A large agricultural company has a companywide initiative to move their financial applications to the cloud as part of their digital transformation journey.
They first became a black line customers at the start of this here with a small handful of account reconciliations users.
Since then they have had a series of user expansion and continue to roll out black line across their global accounting team in Q3, resulting in a user growth of more than 20 acts in the past nine months.
This rapid adoption is directly correlated to the early returns that they have been able to capture from Black line, which includes decentralization of data visibility transparency and overall improvements in their reconciliation process.
This company believes that black line will be able to reduce their manual workload by as much as 60%.
In Q3, we expanded our customer base to nearly 2900 enterprise and Midmarket companies around the world with accounts, such as a leading global asset management firm was introduced to Black line through one of our partners. They were using a point solution, but functionality gap.
And a lack of customer support resulted in significant manual work and heavy overtime in Q3. This company replaced their point solution with our account reconciliations task management variance analysis and transaction matching products.
Black line, one the accounts due to our superior functionality.
Typically exception handling and routing capabilities that enable think segregation of duties as well as our single code base and ability to integrate with all ERP.
Given the partner involvement this deal closed in a short four months.
One of the largest tire manufacturers in the World has a very complex general ledger environment as the result of various mergers and acquisition multiple ERP instances and numerous offshore shared services facilities to manage their account reconciliations.
In Q3, this company purchased Black lines account, reconciliations and task management products across their north central and South American offices for improved efficiencies visibility.
Cross the shared service locations from their U.S. headquarters and most importantly accountability of responsibilities.
Additionally, since the company is undergoing an initiative to consolidate their disparate ERP systems and transition to S. Four Hannah they saw enormous value in black line as the vehicle, helping to clean up their data as they move into their future Honda environment.
Finally, one of the World Cup chemical producers ran a manual financial close which resulted in a time consuming and inefficient close process as dozens of global entities had the manually roll up to corporate.
After vetting ERP endpoint solution vendors they chose to move forward with Black line.
In Q3, and purchase transaction matching plus seat count reconciliations and journal entry products across nearly 75% of their global finance and accounting workforce.
Beyond superior functionality, they chose black line for a more efficient close process driven by integration of their global entities greater visibility for corporate and automation of formerly manual processes.
Our new logos in the quarter included a small but growing number of sep wins in the U.S. and Europe , including our first so like steel in the UK as the partnership continues to ramp so does our expectation for the volume of so like steel and corresponding revenue contribution over the long term.
In Q3, we saw increasing demand for Marcellus partnership with a growing pipeline of future deals.
At this stage in the partnership the most effective way to drive long term success is to focus on joint enablement to drive alignment across let's say piece global go to market team.
We held our first ever dedicated Sep track at the end of Black Conference in September . The track spent two days with breakout sessions jointly presented by Sep and Blackline executive.
We also held sessions for Sep and Black line customers to articulate their successes transforming finance with S&P and Black line to Black line prospects. These sessions were well attended and the feedback has been very positive.
Year to date, we've had more than 2000 and able to touch points at 63 of them across 13 countries. While we were pleased with the breadth of activity. So far. This is just the beginning of a growing enablement effort. We see continued demand for black line among sep customers within it.
Creasing number of conversation centering around black line as an important first step in the S. Four Honda journey.
Less than one here under our belt. We believe this partnership remains a large global opportunity over the long term.
Moving onto our consulting and financial transformation partners buying decisions are expanding beyond the accounting buyer to include I T. C O Cfos and sometimes even board members audit Committee members and auditors.
We believe a healthy partner ecosystem is critical for black line to crossed the chasm as a valued strategic partner to the largest companies in the world throughout the year Weve grown our partner ecosystem and now have almost half of our certified partner consultant outside of the U.S. driving an increase in.
Increased global coverage for our clients.
We have also seen improvement and partner investment and engagement with nearly 70% growth in the number of completed partner certification courses.
Black claim modules in the first nine month of this year as compared to the same period in 2018.
We anticipate the partner ecosystem will continue to grow as more companies turned to digital transformation to unlock value for the accounting and finance function.
We believe that Black line is the partner of choice for customers undergoing digital finance transformation. We are purpose built for accountants with a demonstrated track record of success and have earned the trust of nearly 2900 global companies.
These competitive advantages have enabled black line to maintain its leader ship position in the market. This was further validated in October when we were recognized as a leader in Gartner 2019 Magic quadrant for cloud financial close solutions for a fourth consecutive year black.
Glenn is ranked highest based on our ability to execute for a third consecutive year and scored the highest cortiles per customer experience and overall product capabilities.
We are pleased with our performance in Q3. The success, we are driving for customers and the progress we have made on our strategic initiative and with that I'll turn the call over to Mark.
Thank you trees and good afternoon, everyone.
As a quick reminder, unless otherwise noted all numbers mentioned during my remarks today or non-GAAP .
Threes mentioned Q3 was another strong quarter of execution on our strategic initiative to drive long term sustainable growth.
At the September Investor Day, we identified five growth drivers that will enable black line to capture the large and underpenetrated market in front of us.
These growth drivers include our initiative to lead our customers as a strategic partner to the CFO .
Yes, the p. so lets partnership.
Upsell and cross sell of the installed base.
Collaborative partner ecosystem and international expansion.
Total third quarter revenue grew 28% year over year to reach $74.9 million.
Hi revenue in the quarter was driven by higher retention rate deal timing and accelerating services revenue.
A few other notes on revenue.
International business continues to grow on pace with our expectations, representing 22% of the total in Q3 up from 20% in the prior year.
We continue to invest in both direct sales and partner support in our major markets in Europe and Asia Pac.
Revenue from our Sep partnership with 23% of total revenue in Q3 in line with Q3 of last year.
This metric represents our revenue with sep customers under existing and former partnership agreements.
Services revenue came in at the high end of our revenue guide at $4.6 million or 6% of total revenue.
We are pleased with this result at is that it is driven by our customers undergoing digital transformation adoption of our strategic products and continued engagement from our partner ecosystem. We view this as a leading indicator of success in our business with broader deployment of our products.
More than 60% of our large deals in the quarter included a partner represented a good balance of partner participation driven by increased adoption of transaction matching and I see age.
Our strategic products represented 21% of sales for the quarter.
Well above our expected range of 15% to 20% of sale.
Our goal to be a strategic partner, it's further unlocking block one value proposition and driving demand of our solution.
In Q3, we grew the average a our per customer in both the enterprise and Midmarket.
We also saw expansion of large accounts with continued growth in the number of customers within a are up $250000 are more as well as the number of customers with an A.R.R. of $1 million or more.
Moving onto our key performance metrics for the quarter.
We serve 2871 customers globally, we added 87 net new customers in the court and the quarter.
Consistent with the first half of the year the quality of new logos was strong and included companies undergoing digital finance transformation.
In Q3, we reduced our total customer number by 29, when we consolidated the large global enterprise with 30 separate subsidiaries into one customer.
We had been working with this customer for awhile and made this change at their request to consolidate all their division into a single entity to centralize billing.
This change had no impact they are or dollar base net revenue retention.
Driven by strong account expansion and a strong renewal rate of 98% our dollar based net revenue retention rate improved to 109%.
Gross margin for the quarter was 83% with subscription gross margins at 87%.
In Q3, we generated net income attributable to black line of $7 million.
This exceeded our expectations, primarily due to the revenue overperformance.
Interest income of approximately 1.4 million from the issuance of our convertible note.
The timing of certain expenses shifting to 2020.
In Q3, we announced the 500 million dollar convertible note, resulting in approximately $597 million of cash and cash equivalents and marketable securities at quarter end.
This further strengthens our balance sheet and provides additional capital continue growth through investing in innovation and potential acquisitions.
We generated $9.9 million, an operating cash flow and $7.1 million in free cash flow for the quarter.
Now, let's move onto our fourth quarter and full year 2019 outlook.
For the fourth quarter of 2019 total GAAP revenue is expected to be in the range of $77.3 million to $78.3 million.
On the bottom line, we expect to report non-GAAP net income attributable to Black line in the range of $7 million to $8 million or 12 to 13 cents on a per share basis, our share count will be approximately 59.9 million diluted weighted average shares.
For the full year 2019, total GAAP revenue is expected to be in the range of $286 million to $287 million.
non-GAAP net income attributable to Black line in 2019 is expected to be in the range of $21.2 million to $22.2 million.
Utilizing diluted weighted average shares of 58.9 million, we expect non-GAAP net income per share between 36 and 38 cents.
This updated full year guidance include the favorable impact from the issuance of the convertible notes of approximately $3 million an interest income.
Lastly, we plan to attended several upcoming Investor conferences, this quarter, including the Wells Fargo TMT Summit, the credit Suisse Technology Conference.
On the Raymond James Technology Investors Conference.
Please reach out to our Investor Relations team, if you would like to participate in any of these events.
Threesun I will now take your question.
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Oh first question comes from alive.
Oh, Rob Oliver affair.
Aligned.
My question good evening.
My question is for Theresa.
Follow up.
Three she mentioned, how you're seeing in the market a shift.
Process improvement.
And definitely coming out of in the block you know we are take was that we saw a real focus on strategic project products out of that and it sounds like that's starting to flow through into your results. All was wondering if you could talk a little bit about that and you know couldn't help but note that your first customer example, on the call wasn't I see.
The H. win which also pull through.
You know what count Rick seats. So just wanted to understand kind of the pull through on strategic products matching I see age or in this new process driven environment and then I just had a quick follow up thanks.
Great Hi, Rob I'm, so what's interesting to US is what we see happening is as companies start to undergo their digital transformation journeys. They do become more interested in the strategic product, it's almost like those areas.
Our where they can get some really great process improvements that they may not have considered before so we see that convergence as well and that is across all of our strategic products.
Okay, great Thanks and interest.
On the pricing side on strategic products, if you could maybe give us some color.
How's that shaping up maybe without.
Well you can get a specific as you want but I'd love to get a little bit of color on how you guys are conceptualizing pricing as the pace of the lands on strategic continues to increase thanks very much.
You know we feel like we're in a good place on our pricing on strategic products right now and the difference between that and sort of our core financial close suite of products. It's really that the core financial sweep is based on a per user per month pricing mechanism, which is pretty standard process overall.
The strategic products, we were really focused on trying to charge barely for the value that our customers are receiving.
And so that means that different products are sort of priced in different ways. For example transaction matching you can buy rate plans that you know if you are.
Processing tens of millions of transactions every period, then you're going to obviously paying more than someone who's you know processing a few thousand transactions. So that one is by rate plans with the inner company hub it's related to.
The number of different business entities that are acting as trading partners because that is very much at the heart of the complexity around inner company and then finally, the smart close product is around the different processes and the different number of ERP instances that are actually being you.
Utilized in any one customer so again the idea with pricing strategic products differently is really around how do we charge fairly per value that the customers receiving.
Great. That's helpful color. Thank you very much thank you.
Thank you. Our next question comes from a line of Alex Sklar.
Raymond James Your line is open.
Great. Thanks, I wanted to ask on the partner strategy I think new for me coming out of in the Black was just the idea around opening up your platform, particularly as it relates to partners being able to innovate on it.
Just provide an example, what that might look like and what the partner feedback was [laughter] Oh for this coming out of in the blocking and when we might actually see this in the market. Thanks.
Let me start with that and and I'll say that we're not going to you know signal when that's going to be in the market, but it's definitely part of our longer term roadmap and example, where a partner my utilize these types of Apia nice would be let's say that there.
Some very specific analytics or reports that that partner has developed as part of their blackline offering then those could really be put it into a particular partners a implementation plan to give value and and.
I'll, even be more precise on that let's say, it's a particular sector alright that is looking at particular things in particular ways. Then there you know specializations within our partners that can address those things reporting the easy one but there are other processes as well.
Got it and that and then I wanted to ask.
Mark on the services revenue I know you kind of talk to that last quarter that 6% range, but could you just provides more context on how long have an opportunity you see around the strategic products kind of enablement might require additional services on airport your park or if you ultimately see this being able to transition towards partners all further down.
The road thanks.
Sure. Yes. Thanks, you know we are already working on partners' partners are spending quite a bit of time in the field with us on some of our large digital transformation projects.
Look I think the 6% that we had services as a percentage of total revenue in Q3.
Continues a little bit in the near term, it's a good healthy balance for us our strategic product uptake is helping us to drive that we've invested pretty heavily and the customer success and implementation teams to make that time to value and customer experience really strong and we want at least here in the near term to.
Really the quarter back on that are really controlling that experience and so <unk> you know.
That's our primary focus is the customer and we think that's a good healthy balance where we are right now.
Alright, great. Thank you.
Thank you I'd next question comes from the line up to Koala first analysis. Your line is open.
Hey, good evening and congratulations.
I had a question on the on your international your international performance, which seem to take up slightly I'm wondering if you could elaborate a little bit on you alluded to some of the Solex performance internationally. If you could just described the non selects international portfolio and how how your your new sales and.
Renewals are going.
Yeah, I can I can take that.
You know we have last year, we really started accelerating some of our team development in Asia Pac with new leadership, and we're very excited about that team as they expand beyond Australia, and we've been seen very nice momentum in those markets.
Similarly in Europe in the major markets that where we are today, we do partner with a Sep Insole X, but I think you know we've been in that market for a number of years and that's allowed us to get some good traction with that Tim and so we've seen really strong over the last now a year or more some.
Good acceleration in both markets, that's helping that tick up it is 22% it's growing faster.
And we saw good results typical a European seasonality in Q3, and it's still met our expectations and was strong.
Thank you next question, Chris Merwin of Goldman Sachs. Your line is open.
Okay. Thanks very much.
I just wanted to dig into net expansion.
If I could it looks like you had a really nice step up and the quarter I think part of that you that you called that was strategic products and I think intercompany held in particular, we there's a big deal you signed in the quarter. Just just curious like any other drivers you could talk about there and also if we should think about this.
Continuing going forward at a higher run rate. Thanks.
Great. Thank you. So we were pleased to see that but we're also expecting that you know it's at the high end of the range we have been performing.
On our installed base expansion strategy, what we call the strategic partner to finance and that is putting a lot of really high quality dedicated resources.
Towards our existing customers come teams like our accounting innovation team our customer success team our strategic account managers, all because we believe that that installed base has real opportunity over the long term to to turn over for digital transformation.
There you know even at our conference to reason many of US had had a lot of meetings, where customers that had been with us for a long time, we're just now coming to the table in saying we want to work with you and your partners for more of the product. So I think we've seen a developing in the numbers start to show the results in Q3.
So a couple of though really great drivers that that we see is that it's not just strategic products, which has operated at the high end of our range, but its user expansion to and we've seen some really strong user expansion over the last couple of quarters as our customer success teams and our sales teams really drive penetration door count.
Okay, great. Thanks, and then just one more in deferred revenue, yes, there is a really big quarters that in Q2 and it dipped slightly in Q3.
Yeah, just maybe just talk a bit some about you know any lumpiness in there and how we should think about drug deferred in Q4 as well. Thanks.
Yes sure Q.
Deferred revenue.
You know, there's a couple of things about it it is timing sensitive. So if we have multiple years of very strong Q2 s, which we have had in Q2 last year in Q2 of this year, you sort of get a build up in deferred.
I think also a timing of when deals close within the quarter affect your deferred revenue balance I think most importantly, what we saw in the quarter was good strong broad performance across the sales team and that really delivered a the revenue growth.
The uptick in guidance that we've shared.
Great. Thank you okay.
Thank you. Your next question comes from <unk>.
Blair Your question please.
Hi, This is Matt style or off of on great quarter, guys thinking shaking the questions. That's a one more on the on the strategic products front.
No and the Black we got a lot of positive commentary.
Customers and partners on transaction Mac matching intercompany Helgen smart close what kind of looking through the numbers from the analyst day. It looks like the customer base you have using transaction matching is an order of magnitude larger those using AI fusion smart close.
So just wondering if you could you maybe flush out why they're sort of disparity in that product adoption within the strategic products bucket and then what is going to take to accelerate adoption of ice futures foreclosure yep and the really simple answer is that transaction matching it's been in the marketplace several years longer than either of the other products.
So that one has been around quite a bit and so that it just takes time to get that kind of traction and track record and set of use cases that convinces a larger number of customers to come over yeah, and just to add to that to a transaction matching actually is up and down the stack for both Midmarket and enterprise so the.
Addressable sort of customer base is much broader and I see age and smart clothes are very high and big ticket targeted deals that were going after our strategic accounts.
And you know those as Reece mentioned have been in market for a little while but the way we're trying to accelerate adoption or all the things we talked about at analyst day, including a partner ecosystem that healthy and can work through the digital transformation.
Trend.
That's really where he gets involved in the CFO and that's a driver for more of these larger ticket strategic products.
Our own internal resources, we feel very good about weve invested in teams and subject matter experts that can help.
To help the sales person sell those products.
And I think probably the one that is been we've had the most success with his operationalizing the ones that we've already sold and getting those customers to be good referenceable companies.
[noise] gosh that's helpful.
<unk> for any of you guys, but.
One more on the on the Solex partnership just you know are you seeing yes, if you sold for its really hitting the payment to push black line, so to speak and because anymore color on early interest in the pipeline there in anything top of mind as far as seasonality in that business kind of as we as we look forward.
You know, we're seeing a good increase in the pipeline. It is still a sales enablement effort that we have planned for taking several years to get there simply because it's a very large population of people at Sep and it does take time to get the word out.
Got it thank you very much.
Thank you again to ask a question. Please press star one at this time again that star wanting you touched on telephones ask your question.
Next question comes at a lot of coach.
<unk>.
Your line is open.
Hey, great quarter, guys or not thank you for taking my question I have another question on the the Solex partnership, but that's likely to and congrats on your first when they're in the UK. That's great News I guess, how how would you categorize your Sep solex visibility offer the next 12 months.
Yes.
Well look it's still early and so the visibility of course, I'm I'm not yet you know I.
I'd love to be better.
But it's getting increasingly stronger in the pipeline in the number of touch points that we have in the relationships that were building with our direct sales reps I think our ability for visibility comes with more.
Control of the deal flow, which we believe now where we're in a and more transparency to the pipeline, which we are getting.
You know there.
There is really opportunity for us as we move forward to to keep partnering and keep enabling the sales team, which is where our focus is it really is.
In the markets and local markets in the field.
But I would also say koji that we're still learning right. It's it is a new partnership it is different when it's on S.A.P. paper.
So I would say we've had some great learning, we're still learning them ramping.
Got it thank you for that and Mark I'll just follow up for you I know this comes out in the queue, but I'm going to asking for it right now anyway.
Hi, Joe numbers, there anyway, we can get that today.
Yeah, Yeah, Yeah sure it does come out in the Q.
So.
Contract did not recognize revenue is 312 million.
The the amount to be recognized in the next 12 months. The current is at 64% which is consistent.
And that's a yeah.
21% year over year growth for the contract did not recognize revenue.
Thanks, Mark for that and congrats on great quarter. Thank you very much. Thank you.
[noise]. Thank your next question comes from Eric Lemus of Suntrust Robinson. Your line is open.
Hi, guys. Thanks for taking my question and nice job on a quarter I had a follow up on my the comments in the prepared remarks, Mark you said something about expenses being shifted into 2020 can you give a little little bit of context on what those expenses already and why they shifted to 2020 any other color with great.
Yeah of course, it's it's not that big of a deal we talked in the analyst day about our public cloud migration to Google We've been very excited about that if we think it's are really a long term opportunity for us to expand our opportunities with customers in markets and you know the timing of that.
That is just more likely shifting into 2020 then into this year. So we don't see any of the the costs associated with that that's that's the majority of my comment.
Okay, Great and then just kinda phone went up on overall expenses you know how should we think about expenses are the give me more so geared towards potentially accelerating revenue in the future or.
Based on the guidance implied.
Margin expansion off pretty nice and 2019, so how should we think about investments and how to think about the balance of growth and profitability.
Sure you know we will we'll give guidance for 2020 after Q4 in our Q4 call in February So will there will be a lot more I talked about at that point I think to this to this point you know this business is really demonstrated great operating leverage over the last several years we've been.
Able to continue investing in growth.
We're making investments in new leadership team in markets and partnerships like Japan, and that's a pea.
But we have continued to accelerate the opportunity for direct salespeople for.
For higher retention and productivity in that group so our investments.
Really are to grow responsibly to invest in growth and and you know do that where we're seeing the demand and we believe today that this balance that you see in our results is meeting that demand for growth.
Great. Thanks nice job.
Thank you.
Thank you and next question comes from Mark Murphy of JP Morgan Your question. Please.
Hey, guys said membership around for mcmurphy Congrats on another good quarter I'm. So you guys named off a number of great customer wins this quarter and I was wondering if there any nonstandard you use cases, you guys might be shame on that you can touch on an additionally, do you guys have any updated comments on how rps its Wilson.
I did have on skid thanks, guys.
Well you know part is what our accounting transformation team does is they go win at a pretty detailed level and they work with the customers to map out different process improvements that can happen now I think a Tammy you may have heard at our analyst day Tammy.
Speak to some of those but I would say because of the power in the flexibility of the Black line platform. There are quite a few different processes that have benefited from our software that I don't know if I would call them nonstandard, but I wouldn't call them, some really great creative usage.
So I'm not going up not gonna give examples of those now I know I have in the past, but there's a couple that you know yeah that happens regularly.
We missed the second part of your question could you say it again.
Oh, yes, any just any updated opinion on how our piece it's within the outline competitive landscape Oh, Yeah. You know, we've got great partnerships with the RPK vendors and I know that some people kind of view them as as competition, but it's a really different animal than what black line does okay. There.
Great at automating and making faster tasks that are at a fairly.
Granular level in an organization what black line does especially when we're working with customers going through a digital transformation is to really look at the overall processes that are happening and almost to a top down reengineering of those then allows for an incredible.
The amount of automation and and so it's a really different approach I you know find that there is great value in some of the things that are P. Eight vendors do there is also a certain amount of.
Maintenance that has to be done and if you look at one of the examples that I talked about in my script earlier, you know it really is lots have to be maintained.
And so as long as nothing changes that's good but there are a lot of things that change so that can be a downside of some of what happens there. So our customers. What we do in terms of top down automation resonates with them and a great way, we also partner with the our P.A. vendors to.
Identified very specific tasks that they can really help with our platform on.
That's great guys. Thank you.
Thank you.
[noise]. Thank you. Your next question comes from Pat Walravens of JMP Securities. Your line is open.
[noise] Walravens, please my she'll honestly.
Uh-huh trees.
Sure.
What they're trying to do is different than what you do.
You know.
We don't have a lot of visibility into that Pat but it appears that they seem to be building something that's around improving accounting work flow.
Okay and again, you know what we've built into our product over the last 15 years is really a much more specific to the automation of a lot of process processes that are happening in accounting and finance, so we pay close attention.
You know it it seems like that they're a using partners we've got a great partner ecosystem from the beginning.
And it's kind of similar I think to what they've done in both CRM and HR right. It doesn't compete with the leader in this space because their focus is really digital workflows.
Great. Thank you and I know you touched on this [laughter] she just keep chemical energy.
Why is it matching engine.
And what makes your better than what.
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Well I'm going to start with the first one because I love answering questions about product, okay, our matching engine.
Here's what's interesting about software. Okay, you can build very very powerful software, but if its flexible it's usually incredibly hard to use transaction matching is this really cool trifecta. Okay. It's very very flexible, it's very powerful and.
And it's actually really pretty streamlined for somebody who is good it excel to be able to configure a lot of different use cases.
The combination of all three of those qualities. It's is what makes it so good for our customers. Okay. So that that is why it's so good.
Now in terms of why it's so applicable is because data that's out there right now.
There are so many different systems in one company. Okay. You can have thousands of different systems. The data between those systems in order to have accurate financials accurate inventory accuracy in a lot of different things you have to reconcile data typically at a transactional level.
Between many different systems, all right I'll give you a really simple one let's say, it's a retail customer that as a point of sale system that point of sale system also has to reconcile its transactions to one or more general ledgers. It also has to reconcile transactions to bank and two credit.
Card processors, which there might be five or six different ones. So in order to actually be assured that you've got all the right transactions in the right places you've Gotta do you know 10 or 15 different types of system. This system reconciliations now if all data was perfect.
At all times and nobody ever keyed anything in and it was you know absolutely. The same data in every single system. Then you would probably use a lot less of transaction matching but the truth is you know sometimes the bank doesn't read your check right right I mean, sometimes somebody transposes two numbers.
The journal entry or forget the letter in somebody's name so as long as humans continue to interact with systems in numbers I think transaction matching it's going to be very valuable to them.
That's very helpful. Thank you.
Thank you. Thank you for asking a product question.
Thank you at this time I like to return the call tourist Tucker founder and CEO for closing remarks.
Thank you everyone for your ongoing support and evangelism, a black line. It continues to bring us new referrals and new customers and so please keep it up thank you so much for joining us today.
Ladies and gentlemen, this concludes todays conference call. Thank you for participating.
Now disconnect.