Q1 2022 Blackline Inc Earnings Call
Ladies and gentlemen, thank you for standing by.
And welcome to the first quarter 2022 Black line earnings Conference call.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press Star then one on your telephone.
Please be advised that today's conference is being recorded.
You require any further assistance. Please press star Zero I would now like to turn the conference over to your speaker for today, Barry Hutton you may begin.
Good afternoon, and thank you for your participation today with me on the call is Marc Huffman, Chief Executive Officer of Black line, and Mark Partin Chief.
Officer.
Before we get started I would like to note that certain statements made during this call that are not historical facts, including those regarding our future plans objectives and expected performance in particular, our guidance for Q2 and the full year 2022, our forward looking statements within the meaning of the private securities.
Litigation Reform Act of 1095.
These forward looking statements represent our outlook only as of the date of this call. While we believe any forward looking statements. We make are reasonable actual results could differ materially because the statements are based on our current expectations as of today and are subject to risks and uncertainties, including those.
<unk> and our periodic reports filed with the Securities and Exchange Commission in particular, our Form 10-K and Form 10-Q, we.
We do not undertake and expressly disclaim 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 our financial measures disclosed on this call will be non-GAAP , a discussion of why we use non-GAAP financial 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 at investors <unk> dot com or on our form 8-K filed with the SEC today.
Now I will turn the call over to Marc Hoffman to begin.
Good afternoon, everyone and thank you for joining us today, we kicked off the year with a great quarter and I'm pleased with our consistent execution and solid results. Our revenue for the quarter was $120 million, which was ahead of our expectations up 22% year over year, marking an acceleration in growth from the last.
<unk>.
We believe our strong Q1 performance further validates our investment goals for 2022 as we work toward continued acceleration in our top line growth and executing on our long term operating goals.
At a macro level, we saw healthy demand across global markets and industries in Q1.
Back office digital transformation continues to drive significant software.
We stand to directly benefit from these ongoing transformation.
As customers turn to black Knight to solve automate and bring greater transparency control to their financial and accounting operations.
Today, many accounting departments are still fundamentally relying on manual and time consuming accounting tasks and the opportunity for us is greater than ever with what we believe is a $28 billion plus total addressable market and the opportunity to serve as the industry leader in modernizing and automate.
The office of the Comptroller.
The combination of this robust demand environment, alongside our proven ability to execute and grow our team points to an exciting path ahead for black line.
Our strong momentum reflects the investments that we've made thus far to grow our customer engagement and success teams.
We're encouraged to see our approach play out in our Q1 results as we continue to invest into our longer term growth opportunity.
I'll cover three areas on today's call first key highlights from the quarter and drilling down on what drove our Q1 performance.
Second sharing more about why customers choose black line and the efficiency automation and success, we're seeing with our software.
And third an update on our <unk> acquisition and our intercompany momentum.
Turning now to our Q1 highlights.
Our total revenue in Q1 was $120 million up 22% versus the prior year and our net revenue retention saw a healthy uptick to 110%.
From 109% last quarter.
The expansion rate was driven by high renewal rate as well as customers of all sizes continuing to scale their deployments with additional black line products and global user Rollouts.
Customer expansion growth and greater uptake of our strategic products also drove higher average deal size in Q1, a multi quarter trend that continued into Q1 as our average deal size increased to 124000 this quarter.
Up from 110000 in.
In Q1 of 2021.
We saw strength across the industries and geographies in Q1, which we believe demonstrates the larger digital transformation trends.
And earlier in my remarks.
This expansive black line customer footprint reflects what we see as a level of inherent resiliency to our business in a potentially more uncertain macro and economic environment as we head into the rest of 2022 and beyond.
We also saw a healthy performance in both our enterprise and mid market with strong execution from our go to market and customer success teams.
Mid market growth accelerated in Q1 and continues to serve as a strong growth lever for us.
We saw healthy growth in the new mid market customer logos and I am pleased to note that we are now approaching nearly 2000 total mid market customers.
And just last week, we need our black line modern accounting playbook map available for mid market companies across EMEA and Asia Pacific.
That has helped mid sized companies make the move to modern accounting by allowing them to realize the value in a short amount of time.
By applying the combination of native cloud technology, a library of pre configured best practices templates.
In a highly optimized delivery model, our playbook can drastically reduce implementation times and accelerate time to value.
We saw solid momentum again in our strategic products this quarter, notably in intercompany and achieved our highest intercompany quarterly performance.
Any history.
We're excited and encouraged.
So we're off to a great start following the acquisition of <unk> I'll speak more about <unk> and our larger intercompany strategy here in a moment.
Solid execution and strong leadership across both intercompany hub and <unk> drove higher uptake and upsell of strategic products to customers and what was already a strong demand environment for both products in the quarter.
And finally, we experienced a record hiring quarter here at Black line, adding 255, new employees in Q1, representing a 31% increase year over year.
Our ability to accelerate growth in our top line, while hiring and Onboarding, new black liners gives us confidence in our investment priorities as we look ahead to the rest of the year.
Before we go into some of our customer stories I wanted to take a moment and share with you some of the recurring themes I've heard directly from our customers.
First it's important to remember that for the most part customers are deploying black line to replace highly inefficient and legacy manual systems like XL.
Are customers that don't have a modern accounting solution at all.
Highlighting what we see is the tremendous greenfield opportunity in front of us.
We love seeing these customers realize the immediate benefit black line can offer.
Second whether due to the great resignation or ongoing digital transformation trends customers greatly value the automation that makes black line special.
Being able to automate end to end processes across fragmented data enables our customers to quickly and efficiently make sense, a complex and disparate systems, providing them with valuable transparency and control and their clothes and accounting process.
And lastly, we hear from customers that they experienced a quick return on their investments and black line.
Hours and days of manual processes saved greater transparency and visibility into the close and simplifying complexity across multiple accounting products departments and systems.
The increased control consistency and unified visibility that Black line offers is immensely valuable to our customers and we hear this time and time again in the field.
We saw all three of these dynamics at play this quarter for example.
We recently launched a tremendously successful pilot at one of the world's largest technology companies.
Initially the customer was primarily reliant on manual processes.
The Black line pilot achieved 75% reconciliation to automation and after seeing this immense time and cost savings from faster and automated reconciliations. This company chose to further increase their black line footprint in Q1, expanding black line to everyone in their corporate accounting Department.
Incredibly this brought their footprint to more than 2000 Black line users truly deploying our solution at an enterprise wide scale.
Another customer a large insurance provider has been on a global transformation journey with Black line.
When we first sold this customer inter company, we started with targeted non trade problems states around their shared service and BPL strategy as well as their technology billing.
Since then they've chosen to dramatically expand their intercompany footprint and in Q1 again grew their intercompany solution with Black line, which now covers all of their intercompany operating expenses build across the entire company in total covering 170 plus legal entities.
This black line deployment automates manual processes, standardizing intercompany processes globally, and drive better controls and governance for a company deeply entrenched in the global financial system, which naturally requires strict controls and government something we believe black line is.
Uniquely positioned to deliver <unk>.
Additionally, yields material cost and tax savings, making their investment decision a clear win.
And finally, we saw an existing black line customer.
One of the largest food and agricultural companies in the world build tremendous value with Black line via deploying modern accounting reconciliations and transaction matching.
Having rolled out Black line previously this customer chose to take the next step in their modern accounting journey in Q1 by fully automating their manual journal entries.
And by deploying Black line this customer saw a 60% reduction and reconciliations volume.
Better workload distribution across their finance organization and improved reporting with all of the accounting data in one place.
Okay.
Let's now turn to a brief update on <unk>, our intercompany strategy.
As we announced last quarter, we acquired and closed on <unk> in January 2022.
I wanted to take a moment on this call and once again offer a warm welcome to the <unk> employees that have joined the black client family.
Our goal with <unk> is simple.
Enhanced our existing intercompany automation capabilities by driving end to end automation.
New accounting processes, and accelerating black lines larger long term plan for transforming and modernizing finance and accounting.
As I've noted before it's hard to believe but most companies are still using legacy repetitive manual processes to manage intercompany.
Closing their business to unnecessary cost significant compliance risks and Miss working capital and tax opportunities.
Intercompany challenges are not new but with increasingly complex global business models and regulatory scrutiny demand for intercompany transformation is higher than ever.
As we saw on a record intercompany results this quarter.
To close I'm pleased with the strong performance in Q1, and I'm encouraged by the momentum headed into Q2.
As I look ahead longer term, it's clear that we're still very much in the early innings of a large dynamic and growing market with strong global demand for digital transformation across the back office.
As always our focus will be to continue to relentlessly serve our customers'.
Focus on product innovation and fuel our growth into our go to market and customer success efforts.
And as we do so we remain committed to executing our multiyear strategy and goals and to drive long term durable growth in advance black lines position as the market leader.
I'll now turn it over to Marc <unk> to discuss our financial performance and outlook.
Thank you Mark and good afternoon, everyone.
Hub performance.
Partners were involved in 76% of large deals.
<unk> with Q1 of last year. This showcases the continued power of our valuable partner ecosystem and additional growth lever that they provide and driving further enterprise penetration.
Revenue from our SAP partnership remain steady representing 24% of revenue in Q1.
And Q1, non-GAAP overall gross margin was 78% and subscription gross margin was 82%, which was within our expectations and continues to reflect the ongoing transition of our customers to the Google cloud and increased investment in ramping our customer success initiatives.
Our operating expenses increased by 28% versus the prior year, reflecting our stated investment goals and increasing capacity to meet the greater levels of demand driving product innovation and accelerating and sustaining revenue growth over the long term as a result in Q1, we saw a 31%.
Year over year increase in net new employees aided by healthy hiring and our go to market and customer success teams.
In Q1, we generated non-GAAP net income attributable to black line of <unk> 7 million.
We generated $1 5 million in operating cash flow and minus $4 7 million and free cash flow.
We finished the quarter with approximately $1 billion in cash equivalents and marketable securities.
I am pleased with our Q1 results we saw good efficient execution across our teams while also continuing to invest in our growth initiatives.
Coupled with our accelerating topline growth in Q1, I am confident that we are scaling the business in the right direction as we continue to invest in the demand opportunity ahead of us.
Looking forward, we intend to continue our planned pace of investment in 2022, as we remain laser focused on efficiently investing in our go to market and customer success teams as well as our public cloud infrastructure.
We believe doing so will help accelerate long term revenue growth, while also advancing our leadership position in the market.
Turning now to guidance.
Our expectations for the second quarter of 2022 include total GAAP revenue is expected to be in the range of 126% to $127 million.
Representing 23% to 24% growth compared to the second quarter of 2021.
On the bottom line, we expect to report non-GAAP net income attributable to Black line in the range of breakeven to $1 million or zero to one on a per share basis.
Our share count will be approximately $72 5 million diluted weighted average shares.
For the full year 2022, we expect.
Total GAAP revenue in the range of $524 to $528 million.
Representing 23% to 24% growth compared to full year 2021.
On the bottom line, we expect to report non-GAAP net income attributable to Black line in the range of $6 million to $8 million or eight to 11 on a per share basis.
Our share count will be approximately 73 million diluted weighted average shares.
In closing I want to thank all of our Black line employees for their effort and hard work in Q1.
As we look ahead to the rest of the year, we look forward to helping our customers modernize their back office digital transformation by increasing their efficiency and automation, while reducing complexity and their accounting and finance systems. This global opportunity to transform the back office and a strong demand environment gives us the optimism and confidence to.
Continue to fuel our business as we build on our renovation our market leadership and pursue the attractive market opportunity in front of us.
Now ask the operator to open the discussion to take your questions.
Thank you.
Ladies and gentlemen, as a reminder to ask the question you May Press Star then one on your telephone.
Withdraw your question press the pound key.
Again, Thats star one to ask a question.
While we compile the Q&A roster.
Our first question comes from the line of Koji Ikeda with Banca Your line is open.
And hey, Mark and Mark Thanks for Thanks for taking my questions here just a couple from me okay. So the Rev guidance.
And it looks like the second half you guys are implying the second half is going to grow faster than the first half by a couple of points and it sounded like the commentary from big deal activity.
All pretty good but I guess my one question is when I look at the model over here you know the billings on the first quarter. It looks like it came in a little bit about a little bit below 20%. So I guess first question is that below 20% correct and then I guess from a deeper perspective, what are you seeing in the pipeline or maybe from a demand perspective, thats, giving you this confidence for this.
Growth acceleration in the second half of this year, yes.
Yes, great. Thanks, Koji Youre right with your numbers for this year, we do have.
High confidence in the demand environment, continuing and in our ability to execute in this guide.
We see variability in billings from quarter to quarter, particularly in a quarter like Q1, which is a seasonal quarter for us going back on a trailing 12 months. When we look at billings. We are pleased with what we're seeing and that we're able to drive.
That number and that is helping to fuel our growth moving forward. There's also a shift a mix shift in bookings from quarter to quarter now, where we're getting more on expansion account growth and that will have a near term or an impact in this quarter, reducing the billings number because youre.
Billy and the full year, and then it sort of spring load to the future on the buildings for that on renewal. So you get the benefit of the.
That full year.
When it renews.
Got it got it Super helpful. And then I just had a follow up question here on the.
The head count comment it looks like you guys are increased by 31%.
Maybe could you break that down a little bit kind of by the business units I guess, where I'm going I was specifically on the sales organization did that did that head count expand higher or lower than 30%.
How should we be thinking about the sales capacity ramp from here. Thanks guys.
Yes.
It was the most significant.
Part of the business that increased it was close to 30% for the quarter. We added in <unk> employees those were across the board in both R&D GTS and in G&A.
And then we have accelerated our hiring in the customer facing team and on the sales capacity. So those are most of that is in the high <unk> and <unk>.
And 30% year over year.
Got it. Thank you so much for taking my questions.
Thank you.
Next question comes from the line of Tien Tsin Lam Barbara with J P. Morgan Your line is open.
Oh, great. Thank you.
Just wanted to ask the macro question I guess it seems like you talked about the resiliency of the business.
It sounds like Youre, not seeing anything but.
Can you help us understand in the various geos the theaters that you have.
Hearing any kind of change in tone of customer conversations or any signs.
Coming from Europe .
The geopolitical uncertainties there.
Thanks kind of pendulum.
The performance.
In Q1, and our observations and interactions with customers thus far.
Pointed to the broad performance that we've seen all geographies all industries across our multiple initiatives.
We are watching for those signals like I'm sure many of our colleagues in the industry are but as of right. Now we're not seeing any signals that are telling us that it will be a diminishing.
Interest in People's investing in accounting digital transformation, thus far that's based on.
Observations, our own pipeline as well as customer conversations about their continued desire to invest in their businesses.
Understood and one follow up just a high level question that I have gotten and I would love to hear your perspective.
When I look at I guess I don't know what your international growth was this quarter, but when I look at the.
Divergence in growth between the U S and international going back it seems like international.
That's kind of.
Back from pre Covid.
To pre COVID-19 levels already by the end of 2021 U S business has not.
Any way to understand the factors driving that and how should we think of that growth trend in those segments going forward.
Yes.
<unk>.
In Europe , and Asia Pac, we have seen accelerated growth.
Going into and then now coming out of Covid and Thats in the 30% and 40%.
Growth rate, but we've also seen and this includes Q1 that the flywheel for North American growth in strategic products and account expansion.
<unk> record user Rollouts with our U S based customers were seeing really robust growth sort of across the globe and in Q1 was a strong U S growth market and I think that's very much in line with our strategy. We have a very strong base of large enterprise customers in North America.
We're able to grow those customers at an accelerated rate.
Particularly large deals through our ecosystem and now our strategic product portfolio and Thats, a real flywheel for for North American growth that we are seeing that we saw in Q1 and then the and then the addition of <unk>, which has started as more north American based and that will begin to take that.
More to our international customers, which will help us there as well.
Understood.
And one more if I may <unk> it seems like it's doing pretty well what was.
Can you help us understand the contribution in Q1 and are you still expecting 1% to 2% for the year or are you ratcheting that higher.
Oh, yes, our overall strategic product portfolio, we expect to be between $20 to 25% of total sales in that in each quarter and for this year.
In Q1, we saw it at 21% and so within that range and that was fueled by the sales record sales of.
Intercompany both from.
<unk> and from our own existing intercompany product, which now moving forward, we will be operating more and more together. So we had a very strong sales quarter in Q1 and that revenue will start to rollout this year.
Understood I'll cede the floor. Thank you.
Thank you.
Thank you Mr. <unk> comes from the line of Rob Oliver with Baird. Your line is open.
Great. Good afternoon can you guys hear me okay.
Hey, Rob.
Great Hey, Mark Hey, Mark Thanks, So much I'll only only two for me.
So first one mark pardon on that strategic product flywheel, which you just discussed.
Historically.
Strategic products growth ran at cross current to the to the user growth, but they both appear now to be firing on all cylinders. So I was wondering if you could talk a little bit about that or the strategic products still.
In aggregate not seat based.
Talk a little bit about that.
<unk> and as a follow up unless I missed it and I apologize if I did there wasn't any comment about familiar it sounds like <unk> is off to a great start and I'm sure.
<unk> is listening to this she is probably really happy with IC H coming to fruition.
Now what I'd be interested to hear what you guys are seeing in terms of attach rates on.
On the cash side with <unk> now that we're I think year and a half or so after the acquisition. Thank you, yes, great. Thanks, Rob I'll go first with the.
With the question around user adds and strategic product both growth levers over this last several quarters have really been hitting on all cylinders and we have invested as you know in the customer success team that team is driven to help our customers engage more with the.
<unk>.
Engage with what they own and getting full value out of the out of the products that they have and then that allows our account management team to sell more of our new of our of our strategic product portfolio and so we've been seeing great uplift and in Q1, 21% of strategic.
Products of total sales was it was a great lift.
Not sold on users, but youre right in Q1, we saw our third sort of record user at quarters in fact, it was 84%.
Increase year over year against Q1, a year ago, and so we are selling and rolling out more and more users on our existing customers in the core platform and the financial close.
And so those are two growth levers that <unk> been really working well and Thats a direct result of our investment in the customer success and engagement teams.
And then Rob to your question about <unk>.
What we observed is broad performance across geographies customer size industries and initiatives.
As you've been solid black line for some time, you've experienced as we've broadened.
The amount of capabilities that we've had and the initiatives and so it's sort of like.
It's hard to call them, all out and something like that and pleased with the performance in the ER business. Some nice wins, some really strong expansion that we were seeing from some existing customers who are.
Getting incredibly high match rates and great value from them.
The cash application and the additional products there so pleased with it but just like everything else sort of broad performance and when we have a record.
Intercompany performance like that.
What was the big big highlight of them.
The strategic products.
And you can rest assure that Teresa is listening and pleased with the intercompany performance.
Okay.
Thank you guys very much I appreciate it.
Yes.
Yes.
Thank you. Our next question comes from the line of Matt Stotler with William Blair. Your line is open.
Hey, Thanks, guys I. Appreciate you guys, taking the questions I guess, just starting off I would love to just get some more color around.
Youre kind of what youre seeing with the partner channels, particularly outside of SAP.
Obviously, you have some really interesting and some newer relationships there.
Microsoft Google and maybe some that are kind of more non traditional versus what we think of so any update on.
The development of these relationships influenced the business and how you expect that to trend going forward.
So.
Some of them are still relatively new and growing and we continue to invest in those things. We think they are long term.
And strategic some of the ones that we have.
Recently rolled out we will have some spillover into the demand side of things and that these are organizations that influence people who are in the market for digital transformation.
Hard to really perfectly quantify that.
And then there are other things that we invest in that are sort of.
Environmental if you will allowing us in our solutions to create great value with customers to give them a better experience, which makes us sticky.
And really easily digested into a complex financial accounting landscape.
Some of the.
Partnerships that we've had out there.
Have been designed to do just that really pleased with that and thats shortages that shows up in customer satisfaction renewal rates.
Usability, which leads to the growth in our net revenue retention.
So as it shows up in a lot of places and I would just described that we're pleased with the progress continuing to invest in that ecosystem partnerships.
Got it Thats helpful.
And then as you think about kind of the.
The product roadmap and investments there going forward, obviously a lot of opportunity.
Our portfolio, which is in focus.
But you've been with for queuing everything you've made this interesting move.
Look at upstream from a data perspective so.
Would love some commentary on how you think about that forward product roadmap organically inorganically, but.
What's I guess, what's next as you think about that.
Broader strategy there for product expansion.
Well, we always have our eyes on opportunities.
Sort of the view towards what is organic versus inorganic and partner led through the lens of our long term strategy Indispensability and.
Modernizing accounting, specifically targeted the controller and the processes and the beneficiaries of that those people serve.
And so I would from a what's next standpoint, we're going to continue to be laser focused on customers.
And we're going to great value to customers through our core products.
The <unk> suite.
The intercompany capabilities that we've just added to and then the next iteration of our platform financial operations management. So.
Youre sort of looking into the future as to where we're going we will near the end of the year in our releases there will be focused on financial operations management.
Integrating orchestrating and automating complete accounting processes, making our our technology and our capabilities, even more digestible into these complex landscapes.
And we will share that with you.
As we get closer.
Looking forward to it thanks for the color.
Thanks, Matt.
Thank you.
Our next question comes from the line of Andrew take Raspberry with Bahrenburg. Your line is open.
Hi, This is Julian.
Thanks, So much for taking my question last quarter, you had mentioned that there might be some confusion between butler and traditional offerings with inter company.
And can interface with customers and so far in terms of explaining how they complement each other in the joint valuable station.
And it was a record quarter.
And what products.
Yes, if you have anymore.
Okay.
Yes.
In the description of confusion.
When you buy a product that is adjacent or in the same space you always have to make sure that your messaging is really clear. So I think we did a nice job in customer and prospect communications about the complementary nature of <unk> capabilities to the existing black line intercompany capabilities.
I think the team.
Did a nice job of that customer feedback has been really really strong.
Some of those.
Accelerated.
And our pipeline throughout the rest of the year.
We're obviously pleased with our record intercompany performance in Q1, and we're excited about the potential to deliver great value to our customers in that space.
Let's face it there is very few organizations focused on this with.
Technology and Knowhow like we have and we think that the demand will continue to sustain in that areas.
The business has evolved.
Thanks, that's helpful.
Thank you.
Our next question comes from Millennium.
And Lee with <unk> Your line is open.
Hey, guys. Thanks for taking my question.
I appreciate it.
When you look at the overall competitive landscape out there and you've added quite a bit to your portfolio to sort of appeal.
Beyond just the accounting and maybe really kind of targeting the office of the CFO more broadly.
But as you step into some of those opportunities it feels like some of your competitors from other walks of life are sort of encroaching on your core.
<unk> capabilities. So curious how how youre seeing in terms of are there new competitors popping up or the conversations.
Still drilling down to your.
Really detailed focus on helping the controller and all that you've been doing over the years and maybe just how about with typically are the buyers looking at other platforms versus.
Best of breed solutions for each use case.
Yes.
I'll tell you.
The competitive environment has not materially changed.
The notion that people are moving into our core.
I am sure overtime.
Some of that will happen.
We are.
The clear leader nearing 4000 customers.
Got arguably the largest mid market accounting automation.
Business.
In the World and.
And we've got a clear lead in the enterprise in this space, it's very sticky.
In terms of the value that creates for clients and how it plugs into these complex architecture.
Really pleased with the moat that we've established in that that core part of our business and then as we press our investments.
We've probably invested nearly $200 million in R&D over the course of the past 24 months that accrues to various parts of our business and customers.
And as we are able to have these conversations about the coming financial operations management and the bringing together of the more broad capabilities that we do offer to company.
I actually in enterprises, it's a very compelling thing and they are very receptive.
Alright, Thats very helpful. And then when you look at the overall inflation across the economy.
Looking at the different tools you have.
And in the bag to sort of offset that.
Do you have much have you thought much about kind of how youre going to balance price increases.
Versus using cross sell to kind of get more revenue per customer.
<unk>.
And other opportunities that you might have to offset.
Rising costs seemingly across every every portion of the business.
Yes so.
The first premise Matt.
We will be laser focused on customers and the value, we create for them and making them successful and we think thats a bigger priority than trying to Opportunistically turn.
On the inflationary scenarios.
We are clearly established great value for clients.
And we have the ability to pass along some of those costs increase that many businesses do we'll take advantage of that but our focus remains.
The basic culture and value that we have serving customers, making sure they're successful makes sure the leverage from our expertise.
And so it just tends to be more focused on customer outcomes.
Black line outcomes.
Alright, great. Thank you.
Thank you.
Thank you.
Comes from the line of Mario Molina with Piper Sandler Your line is open.
Great Yeah, thanks for taking our questions here.
So as it relates to for Q is there any color you can give around how the pace of integration has gone so far relative to your initial expectations. I think you said last quarter you'd be adding around 130 employees.
So it would be great to hear how things are going on that front in terms of layering in the platform.
Follow up we just pass.
First 90 days of the integration. So clearly early overall in Grand scheme of things, but really pleased with it.
Most critical thing you buy a company like this is a combination of IP.
And capabilities human capabilities, and so I think.
The handling of the human aspects of this making sure people understand what's expected of them getting them the tools to work properly getting the paperwork so they understand.
What's like to be in solid black line and the benefits and all of the things that we all may take for granted it's really a big priority. So.
I'm pleased with where we are with.
With the progress on that I think we've got the team focused have a nice plan have objectives around the product and technology.
From an integration standpoint, and a commercial standpoint, I think we have a good sales plan. So we're happy with the progress.
Happy with the intercompany results that we saw it clearly.
Great Yeah, that's very helpful and then.
It was great to hear about the hiring momentum that you've seen so far and the investments, we're making in growing head count and I guess I'm just wondering what's resonating most with job seekers looking to pursue new opportunities about black lines messaging.
I allowed you to kind of hit that that record hiring level.
I mean, we take good pride in our culture.
And our and our leadership position.
So obviously back we get is about that so.
Strong brand strong.
<unk> brand in the industry.
The space that we serve our culture remains strong and committed to our customers and employees.
And I think that.
Employees see that.
Just the potential with the continued investment people are making in digital transformation in the space that we're in the back office and specifically accounting, which we have said for a long time has been overlooked in terms of the disruptive nature of automation technology.
Okay.
People feel like it's a great opportunity for them to grow their careers in a space that's going to have durable durability to it.
Helpful color. Thank you. Thank you.
As a reminder, ladies and gentlemen, that's.
Wanted to ask a question.
Our next question comes from the line of Alex Sklar with Raymond James Your line is open.
Hi, Thanks for taking the question. This is John on for Alex just one from US how should we think about the contribution from new logos versus expansion as we look towards the remainder of 2022. Thank you.
Yes. Thank you we've had a long history of a very balanced growth profile half of our growth each quarter and year comes from from new logos and half comes from.
Count expansion and then in the last 18 months, we started to see that our growth is skewing towards account growth and is the direct result of a number of things positive things trends, including investment in our customer success and engagement team and our account management team that are now.
Able to grow and engage with customers in a much bigger deeper broader level.
Second.
Thing is that we've invested in our product portfolio we have.
<unk> invested a significant amount of money in.
Our strategic products and acquisitions and an organic innovation.
And then the third part of this really is a result of digital transformation trends that have really been accelerating through the large enterprise in the large enterprise, we believe and we've identified it in previous calls has significant headroom to continue to expand both end users and end product capability and.
Sales and so those are the major trends that are pushing us towards a.
60, plus percent of our growth profile coming from account growth and then the remainder from new logo and that we think that balance will be good for us to continue to take market share and drive on our investments with our ecosystem and our partners like SAP and our mid market velocity and acceleration.
And then balance that with our ability.
To continue to sell into our customer base. So it's a very positive trend that we're excited about moving forward and we think it'll continue that way.
Thank you very much.
Thank you.
Yeah.
I'm sure other questions in the queue I would now like to turn the call back over to Marc Hoffman for closing remarks.
Thank you.
As mentioned in our remarks.
Really pleased with the quarter.
Good broad performance and that's a reflection of all the Black line employees, who are very very customer focused.
Many of you interact with businesses when you can see and hear them talking about their legacy accounting processes that are not sustainable and when you see those we'd appreciate them being center Black line. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation all disconnect.
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