Q1 2021 Blackline Inc Earnings Call
Good day, thank you for sending by and welcome to the Black line first quarter 2021 earnings Conference call.
Okay and exchange Commission in particular hour of them 10-K and form 10-Q.
We do not undertake and expressly disclaim any obligation to update or alter our forward looking statements leather as a result of of new information future events or otherwise, except as required by applicable law.
Also unless otherwise stated all financial measures of disclosed on this call will be non-GAAP of discussion of why we use non-GAAP financial measures and information regarding reconciliation an hour GAAP vs. non-GAAP results is currently available you know of press release, which may be found on our Investor relations wet.
Right at investors Dark Laughlin dot com or on our form 8-K filed with the S. C C. Today.
Now I will turn the call over to Mark the weekend.
Good afternoon, everyone and thank you for joining us today.
Our performance in Q1 represented represented a strong start to the.
We executed on or go to market strategy.
[noise] early progress on our 2021 initiatives.
On a macro level, we saw you on another quarter of increasing momentum is demanded proved globally across all facets of the business.
As a result, we saw billings growth increase for a third consecutive quarter and grew first quarter revenue by 20%.
These strong results were demand driven we remained focused on execution and so good progress from our key initiatives.
Let's start with the initiatives that drove our results in Q1.
There's a large embedded opportunity and our existing customer base at our Investor Day Conference on March we sized it at an incremental $800 million and a R. R for strategic products alone.
To capitalize on that opportunity, we continue to invest in our account management team to lead our customers help them realize value at of line with their business objectives.
Our ability to expand the wallet share of amongst our customers was of durable growth levered throughout the pandemic and we saw that demand strengthened in Q1.
As a result, we added to the growing list of customers spending a million dollars of more <unk> with Black line and saw continued momentum as other large customers grew they're black on footprint with acceleration of their global Rollouts and product expansion.
Strategic products in particular had an impressive quarter accelerating to 23 per cent of sales coming in above the high end of our anticipated range of 15% to 20% with solid performances from all of strategic products, including cash application.
In Q1, we added a number of large quality new logos. These.
These customers are prioritizing digital finance transformation and turning to Black line to guide them on their journey.
We closed deals with new customers and saw the return of some deals that stalled early last year.
The quality and size of the new logos, we're seeing in the quarter signals to us that budget for finance transformation or opening back up and we feel good about the momentum through 2021 has CFO gain more confidence in the macro environment.
Another area of the business, where demand is beginning to return is on the international from our sales performance of major European in Asia Pacific market improved in Q1, driving international revenue to 27% of the total up from 24% of the prior year.
Our international success is largely tied to an improving demand environment focused execution efforts with our global partners and our expanded presence abroad from the Roumelia acquisition.
Our international performance is returning but still trailing the levels, we are seeing in the North American market.
So Lex contributed to our international success and delivered a strong quarter as measured by growth and new logos and continued expansion deals resulting in S. E. P partnership revenue, increasing 225 per cent of total revenue.
Are so Lex relationship continues to mature as we tightened sales alignment across our joint accounts.
We're seeing progress across nearly all regions with improved engagement strong demand generation and large digital transformation wins. This is a great start to the year and we believe Sap's, New rise initiative puts cloud front and center and positions Black line very well.
Another area of of strong Q1 demand was in accounts receivable automation with of growing number of cash application deals for both new and existing customers. We now have two quarters under our belts since we enter the accounts receivable space and we feel good about the momentum we're seeing for a hard automation due to the urgent.
Need surrounding cash optimization.
Cash remains king in today's environment and you can see further validation of that with the recent influx of investment dollars to the accounts receivable market.
We're really excited to be innovating in this space and believe this will enhance our value proposition and drive greater stickiness of our platform.
Throughout the pandemic, our marketing campaigns in virtual events have been very successful in generating opportunities across a large audience.
Now that we are one year and with virtual events, we have the proof points that these opportunities are converting and yielding positive results as such we plan to host all significant 2021 event virtually.
Next I'd like to speak to the progress we've made on our product strategy as we outlined in our Investor day, our vision is to become the most indispensable platform for the controller.
As such we are innovating for the controller in three ways first is our existing product enhancements for the financial close we are investing development resources to innovate and rapidly advance our platform functionality on.
Our new product throughout this year account analysis remains of on track for general availability and will deliver synergies across our platform and help drive of adoption of other modules.
Second is product Adjacencies, we're committed to expanding our solution to bring and to and optimization and automation to other areas that touch the controller and.
In Q1, we further extended our platform with the release of a our intelligence the latest product in our portfolio of accounts receivable automation solutions.
Hey, our intelligence as of natural complement to cash application and helps our customers harness real time data with powerful analytics.
We're excited about this new product and the early feedback is positive this.
This product is one of several ER automation offerings to come as we continue to build our portfolio of accounts receivable solution.
And third is platform modernization, we remain on track with our public cloud migration efforts.
Starting in Q1, New U S based customers are now being deployed in Google cloud and we'll begin migrations of existing U S customers. This month.
On migration to the public cloud is a multiyear journey to modernize our platform and provides scalability. So we can stay ahead of our customers and they're growing business needs.
Last but certainly not least I wanted to share some Q1 customer.
One of our largest deals on the quarter was of new Fortune 50 company based in Southeast Asia.
This company was looking to introduce automation to transform their manual processes around the financial closed following of surge.
Of of online E payment demand.
They're C. I O had strategically implemented black line out of former company and led the effort to engage black line on this deal.
This company had already implemented as for Hannah and we're able to leverage our relationship as well as one of our global of size, who is advising the company's executive stakeholders around their business initiatives.
We showcase black lines of ability to load and match high transaction volumes within rapid timeframe up to 30 million transactions in an hour and identified synergies with us for huh.
And Q1, this customer became our largest so lex win and APAC to date with the purchase of our full of finance transformation solution, including our transaction matching engine to automate nearly 1 billion reconciliations per month between their payment transaction and merchant statements.
A fortune 500 automotive distributor of first became a black on customer in February of 2022 drive significant improvement in process and technology in support of move to shared services.
Throughout 2020, they went live with our closed process management solution.
Following successful of the limitation and clear R Y they added more users and transaction matching to automate complex. Thanks statements.
And Q1.
One year and this customer has consistently expanded their black on footprint all four quarters since they became a customer and they did this throughout the pandemic.
I also have future plans to explore new products additional rollouts across all of their thirty-three global markets.
A Canadian professional services firm was challenged by significant manual accounting pinpoint, including decentralized multi currency accounts limited visibility into real time data and high staffing costs associated with frequent staff turnover.
We identified of framework for of modern accounting transformation that included automating their accounting workflows, unlocking real time visibility and managing their business complexity of.
As part of their procurement process. They also looked at a point solution provider and determined that even though we were the premium price provider there was better alignment across project goals desired outcomes and higher R O y.
We were able to identify cost savings across many parts of their business amounting to of total quantifiable Roy of more than 400 per cent over a five year period with an estimate of payback period of less than eight months.
We added this customer as of new logo in Q1 with the purchase of our finance transformation Sweet and transaction matching across a variety of use cases, including cash is bank management intercompany processing and complex vendor statement and reconciliation processes.
Beyond these examples we continue to see companies prioritize black line.
The remote work environment is dominating many conversations with some companies fearful of the risks associated with closing remotely while others want to modernize to be successful in a remote work environment of.
Other companies are focused on scaling effectively and moving away from manual processes and of course, many companies are looking to digital transformation to modernize their back office or.
Our partners are telling us that they're having the same conversations with their customers. These conversations are generating momentum and demand for our platform and driving growth in our business.
Because we look to the rest of 2021 the key to our success is continued improvement in the demand environment.
Our performance in the first quarter gives us increasing confidence in our ability to execute particularly as the market continues to recover and the pandemic drives a long overdue investment cycle into the back office.
As the market leader in this space, we believe black line is well positioned to capitalize on these favorable market trends and drive long term growth and.
And now I'll turn it over to Mark person.
Thank you Mark and good afternoon, everyone.
Q1, Mark from one year anniversary of the pandemic.
I remember during Q1 2020, we were coming off of record Q4, and a strong year and.
For the majority of two one we were operating well above plan and then of course COVID-19 hit in March and you all know what happened next.
The reason I bring this up is because of our January and February of this year, we're right in line with a strong performances, we saw pre COVID-19 in 2020, and then March came in even stronger than we expected.
Resulting in three consecutive quarters of billings growth acceleration of.
Our strength in the quarter came from solid sales execution with consistently strong closed right from our virtual pipeline and broad based improvement in the global demand environment.
As a result, Q1 came out ahead of expectations for revenue profitability and cash flow.
Total revenue grew 20 per cent in the quarter with board based performance across the business.
Moving into our key performance metrics for the quarter we.
We added 49 net new customers in the quarter for a total of 3482 customers.
Our strength up market generated of record number of of new large deals for a Q1 as defined by $100000 or more on a R. R with growth an average new deal size benefiting from our outperformance with strategic products and a strong quarter from our solak partnership.
To execute on our future growth strategy, including M&A.
We believe this convertible debt transaction strengthens our balance sheet and gives us ample cash to execute on our long term vision.
We ended the quarter with approximately 1.1 dollars 6 billion in cash cash equivalents and marketable securities.
Turning now to guidance, we feel good about the trends we have seen in Q1 and anticipate continued improvement in the demand environment throughout 2021.
For the second quarter of 2021 total GAAP revenue is expected to be in the range of $105 million to $101.5 million.
On the bottom line, we expect to report net income attributable to Black line in the range of four five to $5 5 million or 7% to nine cents on a per share basis.
Our share count will be approximately $62 7 million diluted weighted average shares.
For the full year 2021 total GAAP revenue is expected to be in the range of 415 of $420 million.
On the bottom line, we expect to report net income attributable to Black line in the range of 27% to $29 million or <unk> 43 to 46 cents on a per share basis.
Our share count will be approximately $62 8 million diluted weighted average shares.
In summary, we are very pleased to see an improving demand environment and strong execution drive growth.
We remain focused on capitalizing on the long term opportunities for accounting transformation and driving further momentum in our business.
And now we will take your questions.
Yeah.
Okay.
As a reminder, ladies and gentlemen to ask a question you will need to press star one on your telephone and to withdraw your question press the pound key police sym bio of compile the Q&A roster.
Our first question on income from the line of Matt Stotler from William Blair You may begin.
Hey, everybody. Thank you for taking my questions.
But ask a couple on on strategic products, obviously from some really nice performance on a quarter.
First question would be on cash App, just would love to double click on kind of progress.
With that with that solution. Both in terms of the front end demand generation kind of learning that in in terms of go to market and then regarding on the backend of investments that you've talked about previously too.
Expand the underlying infrastructure and support so you can facilitate of scale adoption of our solution any updates or thoughts on the time on there would be helpful.
Yeah sure. Thank you Matt.
We're pleased with overall of the.
The integration of those businesses the growth.
And even though we think we've.
Invested in here and its performance we saw some of that performance hit us in Q4, we're the beneficiary of some wins there that continued into Q1 force and contributed to that high degree of strategic products.
As a percentage of overall.
And we're excited about the potential represented by the pipeline I think we're fortunate.
The timing of that transaction and that we were able to highlight that at our large user conference drive a bunch of eyeballs in demand.
Through that user conference into our install base and then on top of that we were pleasantly.
Surprised by the uptick in pipeline from new non black line customers as well so.
Just to reiterate we're pleased with the performance of our business, we're investing in that as a potential growth engine.
Just released.
Our intelligence, so theres a pipeline of products in front of us to sort of grow into as we are.
Book to that growth engine to help us grow our organization.
Got it that's helpful here of very very exciting to see the of the early traction there.
And then the second question I haven't asked a question of intercompany hub and a couple of quarter. So let's give it a shots on.
Historically this has been a more complex sales process just given the number of stakeholders involved are you seeing that process become easier in this environment, just given the accelerated push towards digital transformation and modernization of the finance stack in this environment. As you mentioned is that getting any.
These years, helping to kind of spur conversations or you know kind of compressor sales cycles here.
Sure. So I wouldn't see it's easier because you've described it correctly.
As of complex environment that youre trying to sell into and it involves multiple stakeholders. What I would tell you is I think the black lines team is getting better and better at that.
Reaching into various other buyer personas in the organization more complex.
Processes around that we've got more expertise as we've taken on more customers more proof points and then in conjunction with that also not easier, but beneficiaries of I think eyeballs and interest into that type of automation and transformation, given where people have been through independent Mick.
That's helpful. Thanks again.
Q.
Our next question will come from the line of Rob Oliver from Baird you may begin.
Great Hey, thank.
Thank you guys. Thank you very much for taking my question first one for from Marc Hoffman.
Really interesting color on that Premier Fortune 50, when you mentioned in Asia Pac and.
You mentioned, how that had been an S. Four on a customer and I'm curious mark if you.
It sounds like that aided in the win and it sounds like it was.
On a multi product win as well so I'd be curious.
If you feel like Youre, starting to see a bit of an inflection on on <unk>.
His forehand of activity.
Spending returns as we as we emerge from the pandemic and then in particular relative to you guys.
Whether that's.
Are you raising that.
Of that initial land or that or that product opportunity that ECB opportunity for you guys. As it appears that it did in this age of pack deal and then I had one follow up thanks.
Yeah, great. Thank you Rob.
Well, we were the beneficiary of some larger new customer wins across the globe and that's part of what I would describe as one of the reasons, we had better than expected results.
On that one in particular you've got.
GAAP.
Really focused on cloud migration and S. Four on.
You've got really tightly well couple of go to market activities based on.
A track record of investment of Black line of SAP getting it right and then in that particular case, we had one of our large global size involved who had a deep understanding of the company's strategic imperatives.
And then if I just go a step further and we had their CIO, who had prior great experience with Black line and so those things.
Our customers.
Estimate to our standing as the category leader, our expertise and People's Eyeballs and interest in digital finance transformation and I think thats part of the reason why we've had such a good quarter.
Great. Thanks, and then Mark just one for you.
It sounds like the GCB migration activity is.
Is doing pretty well and.
I know you said new U S customers deployed this quarter existing customers next I know you guys have said this is a multi year plan, but I don't.
Looking back at some of the analyst day commentary strikes me that at least it sounds like you guys are running maybe a little bit ahead of plan there and just was curious for any color on that if I read that right and how that might impact kind of that two of cost structure. Thank you guys.
Yeah. That's right. We are ahead of plan out of the gate. It's still early in the process. So our assumption was that we would spend this year and then.
A large part of next year going through that migration of the customers and that the impact of the gross margin would be this year of next year and so.
So far so good and Rob were out of the gate early on the migration of the team is doing a great job on the customer feedback has been positive.
Alright, I appreciate it I was looking forward to come on late but I guess were going all digital again this year, so well see you guys on zone.
Thank you.
Our next question comes from the line of Andrew <unk> from.
Bamberg you may begin.
Thanks for taking my question first just on the accounts receivable just curious to know how did that product. This quarter can you give any quantitative or qualitative day.
Later on that.
And then.
Just wondering if you when you kind of in the conversations you have of your partners how is.
How has that been trending so far.
Yeah, great. Thanks, I'll start with the question on the on the quantifiable contributions so out of the gate in Q4 and Q1, we've been really pleased with the momentum in the sales and pipeline demand and how the team is executing on that and integrate it and then what that helped to do.
Is to contribute to billings.
In Q1, a little bit as we said, it's a small company.
It won't contribute materially to this year.
Coming out of the gate, we're pleased with the progress it'll be of revenue contributor in 2022.
And then on the.
Yes, Andrew on the in terms of partners and remit.
There's a strong interest it's still early innings of.
How thats developing.
Cross training initiative to make sure they're up to speed on our offering there, but I'd say, it's just it's too early overall partner engagement across all of our per.
Products remains strong as you saw with 76 per cent of our large opportunities had these larger size in Q1, and these global S size of royalty reporting an uptick in customer interest and finance transformation coming out of the pandemic.
That's helpful. And then just as a follow up on the strategic products is there anyway from maybe rank, which one was more popular this quarter.
[laughter] well.
I can tell you they all contributed in the quarter.
On matching is such an excellent product for us that contributes because it is sold up and down our customer base from new enterprises, and mid market, who find great value in that product, particularly through our map initiative, which leads them in that direction.
To the large enterprises, which in the example of Mark gave US one of the largest companies in the world that is using that.
A great extent, so transaction matching continues to be one of the more material contributors, but what we're pleased about is that in the products that we sold like icy age we're now seeing it.
Expansion and those products of these products have been sold to customers they've been using them operationally successful and now we're expanding on them and we saw that again in Q1 with our <unk> product.
Great. Thank you.
Welcome.
Our next question on comes from the line of Koji Ikeda from Bank of America May begin.
<unk> of your line is open.
You may be on mute Koji.
And our next question on comes from the line of Brent <unk> from Piper Sandler you may begin.
Hi, guys. This is of Hana Rudolph on for Brent today, Thanks for taking my question.
Just first on given the strength that youre seeing with new customer growth and the improving demand environment are you thinking about hiring for the remainder of the year.
Yeah.
We've been very aggressive in our hiring over the last year again in Q1, where we had a very strong hiring quarter.
On the vast majority of our hiring is and the tech product areas as well as the customer areas as the demand comes up the curve, which we've been seeing we're now.
On investing at a greater extent than the demand driven parts of our business like sales and marketing. So our expectation that this year is that we will have a fairly aggressive hiring.
On a profile as we move through the year.
Great and then.
Since you are witnessing a lot of enterprise strength I guess is there anything that you've heard from the mid market that may be different from what you're seeing in enterprise on <unk>.
Inscape in terms of demand recovery.
None whatsoever.
I'm very pleased with our mid market business as well.
Our continued success and adoption of our modern accounting playbook are leading practices.
That was a strong business unit for us as well.
Both domestically here.
In the United States as well as globally.
Thanks.
And our next question can I will be.
On line of Koji Ikeda from Bank of America, you may begin.
Hey, guys can you hear me Okay, Yes, we got you this unclear.
Sorry try to try a new wireless headset I think I pressed the mute button there.
Really great start to the year, maybe a question for Mr partner here.
When I look at the guidance on a sequential basis. It looks like it's about a $2 2 million at the midpoint.
From first quarter over the second quarter, and that's actually better than what we've seen over the past few quarters I mean, I guess what is the read through there you know I know in the past you've really kind of weighted only guided to what you can see.
With high visibility, but it sounds like the end market is improving you know maybe what the mid market or the enterprise or is there maybe a little bit of on the enterprise and that that guidance. There that we should be thinking about any sort of color on that magnitude of the sequential add on this quarter versus maybe the past few quarters, yeah, that's great and of <unk>.
<unk> observation I might add.
Our guidance is consistent.
Philosophically with how we've done this for for every year, what's different from them.
The <unk>.
Last quarter's guidance to now is that the.
The large deals really signal to us at the high end of the enterprise that the demand for digital transformation has returned and that has been prior to COVID-19 had been the big accelerator on our business to driving billions of above 30% growth in as we come out of the gate and look at the.
Where the demand is coming from that's a big contributor to the overall confidence that we have in raising our guidance to where it is today. The second component of that is the SAP partnership.
It was very strong in Q1, one of our stronger quarters.
One of our stronger Q1 that we've ever had and that also as of second signal that that partnership is gaining traction early in the year as opposed to waiting.
Such a back end loaded K. So we are.
Raising the guidance based on the confidence in that part of the business.
Got it got it and maybe just one follow up if I could.
On professional services this quarter. It was the highest as a percentage of revenue in quite a while and I was looking back on my notes and I thought I wrote down somewhere that it might be coming down as an overall percentage of revenue I guess did I have that wrong and maybe is there any anything we should be aware of in the professional services strategy that might be.
Potentially adding some better growth than expected.
Well I can't speak to your notes, but I can tell you. This is exactly where this is exactly where we have thought it should be it's within our range of expectations in Q1 in particular.
Where most of accounting departments of closing the books. We found this to be a very positive result.
It was driven by high utilization great efforts by our strong team.
The addition of Roumelia. The addition of our strategic.
<unk> product portfolio, which has been ramping nicely four quarters come in even through the COVID-19 environment. So those things are driving of our services revenue. It's still today represents around six or 7% of overall revenue because we are still very high subscription revenue base and thats within our.
<unk>. So we were pleased to see Q1, so strong in that area.
Got it thanks, guys great quarter. Thanks for taking my questions. Thank you. Thank you.
And as a reminder to ask a question Thats star one on.
Our next question on comes from the line of Alex Sklar from Raymond James You May begin.
Alright, great. Thank you.
Marc Hoffman of bigger picture question here on the enterprise strength, but I'm curious if you've done any customer and partner feedback post familiar and some of the recent product announcements were taking a step back there seeing you execute on being a more strategic partner to the to the office of the Comptroller and if that broadening of your of your product suite is helping you win deals at the unapproved.
Yes.
Well it certainly strengthening relationships.
Alex the there is an exciting.
<unk>.
That has come out of beyond the black.
And sort of.
Hello, this into Q1 as well as we're able to have these conversations about black lines tech initiatives product initiatives of the modernization of the direction, we're going with that the broadening of the platform to include a or with the closed process automation on our.
Intercompany governance.
Is exciting with customers. So I think what they're seeing is a company that's investing for the future. We've got stronger last year during the pandemic vs. Their balance sheet strength and all of this small strength to invest in the organization across a lot of assets and that allows us to have conversations that sort of give them a greater degree of.
Of confidence of our innovation and product leadership.
Yeah.
Okay, Great and one more for you I know one of your big areas of focus has kind of been on customer success, and you've talked about operating the sales and marketing and success teams as kind of one cohesive organization. You just brought on a chief customer officer of couple of months ago and I'm curious if you could just provide some color on where she has been focused on bigger picture of how you are progressing.
Towards that goal of agrees with team. Thanks.
Great I appreciate you noticing that.
60 ish days in.
Doing a phenomenal job I would just say it's an evolution.
Of our existing strategy of trying to marry up the right resources at the right time with the right expertise.
What we hear from clients consistently is a lot of what goes on in these.
Transformation projects is new to a lot of organizations and people. This is an area that's been underinvested in and under innovated.
And our ability to have to marry those resources up to someone who may be stuck in time and place in their accounting process and help them modernize those things we're looking for a large scale transformation.
Is a big priority for us.
That's one area that she is really really focused getting the right skills expertise at the right time with the right clients meeting them, where they are leading them on these transformation initiatives.
Alright, great color. Thank you.
Thank you.
Our next question will come from the line of Mark.
Mark Murphy from Jpmorgan.
You may begin.
Hey, Good afternoon. This is Matt Coss on behalf of Mark Murphy. Thank you for taking my questions.
Marc Huffman you mentioned account analysis is being generally available this year and that you hope it will drive adoption of other modules can you sort of double click on how you expect that to be of catalysts for the adoption of other modules.
Sure. Thank you Matt.
Account analysis is.
Is sort of the.
The next generation of next step of deep accounting expertise that black line brings to bear for accounting organizations a lot of them.
What we do is designed with automation to identify things that are non standard and account analysis allows accountants to once those things have been identified to take action and communicate that and share that across an organization often times that level of depth of analysis is still done in excel still really manually.
And as disconnected organizationally. So we believe this is a.
Good innovation, something thats rare in the marketplace and what it does is it sort of perfect. The.
The use cases that preceded in the series of events that is involved in reconciling some of these accounts and so we believe it will tightly coupled with our matching engine, which is that automation engine, which helps identify these non standard transactions and it'll sort of perfect the usage and drive greater.
<unk> matching attachments.
Got it that's very helpful.
And then one for you Mark pardon it looks like.
The only thing standing between you and your target operating model is G&A, maybe a tiny bit on the sales and marketing side.
But is there of certain revenue scale, where you expect to be prior to hitting your target operating model or Ken steps <unk> taken to get more leverage out of G&A in the near term. Thank you.
Yes. Thanks for that question we have.
We've talked about our target model as being a number of of years out, but still as of growth orientation model, you're right. We've made great.
Progress over the last number of years and driving operating leverage and parts of the business, including our our gross margin our sales and marketing leverage through.
Our ecosystem of partners that we've made great progress.
G&A will come with more.
Sort of critical mass.
And what we've been determined to do as a global company serving.
These large global companies is to have the right infrastructure as a public global company. So that we can operate best in class up and down the stack, including <unk>.
Backend office, so just like companies out there today, we will be driving leverage in G&A through automation.
I'll be driving leverage through sort of a critical mass as we move and I think it's a number of years out.
In order to achieve that leverage, but we're highly confident that the trend towards that is and can go on the right direction.
Thanks very much.
Thanks, Matt.
And our last question will be from the line of Matt Vanvliet from BTG you may begin.
Hi, Thanks for taking my question, maybe just wanted to dig in a little bit on on the S. A piece of works partnership obviously, it's been a huge driver of lately in an area of huge investment but.
Just curious kind of what.
What youre seeing in some of the biggest drivers of growth there.
And maybe what you might incrementally invested in or sort of around whether it's any kind of head count necessary.
Or really probably more on the product side kind of highlighting some of the key features.
That integration really stands out.
Yes, good question and thank you so.
I think we're fairly well invested in that initiative we've made.
Maybe you would consider that a frontloaded investment to sort of build of momentum and we should be in a position, where we're moving towards more leverage out of it I think we were beneficial to the demand environment.
Improving and that sort of a global phenomenon on because of that select partnership is a global relationship.
And it was designed to give us coverage in areas of the world that may be harder to reach for us. So we were the beneficiary of that we've made a lot of investment in people and processes and initiatives partnering and educating on SAP and I think we're seeing that pay off where more and more parts of their business have seen.
<unk> success in a sort of self fulfilling on top of that we sort of moved into the era of being the beneficiary since 2020 of account expansion in that relationship.
Which has been good and then clearly they've really focused on the move to the cloud.
And their products portfolio and Black line has been front and center of that in their partnership through their rise initiative.
<unk>, which recently led to US being awarded there Pinnacle Award for <unk> partners based on our performance on our deep partnership. So we're really pleased with it.
Alright, great. Thank you.
Thank you.
Thank you now I'll turn the call back over to Mark Kaufmann CEO for any closing remarks.
Well. Thank you all for joining us today and your interest in Black line. We appreciate your ongoing support and.
And to continue with the tradition that was established by our founder Therese I'd like to remind all of you to please refer to your portfolio companies to Black line.
We're excited about the opportunities for accounting transformation and driving further growth in our business. Thank you very much.
This concludes today's conference call. Thank you for participating you may now disconnect.
[music].
Sure.
Yes.
Yes.
[music].