Q3 2022 Blackline Inc Earnings Call
Okay.
Good day, and thank you for standing by.
Welcome to the Q3 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 the session you will need to press star one on your telephone you will then hear an automated message advisors in your hand is right.
Please be advised that today's conference is being recorded.
I would now like to turn the conference over to your Speaker for today. Please go ahead Sir.
Good afternoon, and thank you for joining us today with me on this call is Marc Hoffman, Chief Executive Officer of Black line, and Mark Partin, Chief Financial Officer.
Before we get started I'd like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans objectives and expected performance in particular, our guidance for Q4 for year 2022, our forward looking statements within the meaning of the private Securities Litigation Reform Act of 995.
These forward looking statements represent our outlook only as of the date of this call.
While we believe any forward looking statements. We may make are reasonable actual results could differ materially because the statements are based on our current expectations as of today <unk>.
And are subject to risks and uncertainties, including those stated in our periodic reports filed with the Securities and Exchange Commission in particular, our Form 10-K and Form 10-Q.
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 all financial measures disclosed on this call will be non-GAAP , a discussion of these non-GAAP financial measures and information regarding reconciliations of our historical GAAP versus non-GAAP results.
Only available in our earnings release, which may be found on our Investor Relations website at investors <unk> com or on our form 8-K filed with the SEC today no.
Now I'll turn the call over to Black lines, Chief Executive Officer, Marc Hoffman Mark.
Thank you, Matt and good afternoon, everyone. Thank you for joining us today.
Black line delivered solid financial results this quarter with revenue growing 23% year over year to $134 million.
Additionally, we saw continued margin and free cash flow improvement due to further operating efficiencies and disciplined expense management.
Turning to the broader macro environment, while we are experiencing some elongation of sales cycles, we are seeing healthy demand signals across our pipeline as customer engagement and <unk>.
<unk> remains high.
Our strategic product portfolio continues to generate positive momentum our solutions that drive high automation and efficiency become even more top of mind for customers.
Additionally, our competitive win rates remained strong in the quarter reaffirming the fact that our solutions continue to differentiate us in the market.
As noted customer engagement and top of funnel activity remains healthy as customers and prospects look to leverage software and automation to help them operate successfully during periods of uncertainty.
One of the more relevant topics of conversation today with customers is on cash management and automation, particularly solutions that optimize working capital reduced cash collection time and provide incremental revenue opportunities.
A recent study conducted by the Hackett group John that the 1000 largest public companies had nearly $1 seven trillion dollars tied up in excess working capital capital that could be deployed more efficiently to drive improved cash flow black.
Black Knight powerful accounts receivable automation capabilities enable our customers to reduce collection times and unlock trapped working capital.
We recently released the new AI intelligence capability that leverages customers' payment behavior to provide valuable data intelligence to organizations on both the opportunities and risks associated with their customer base.
Our recently announced customer attractiveness, scoring capability enables companies to identify customers within their base can have minimal risk allowing for potential.
Higher credit limits, which provide incremental revenue opportunities.
Additionally, the capability identified higher risk customers that are likely to default or delayed payments, enabling companies to engage with their customers proactively while mitigating potential cash flow challenges features such as these have become extremely relevant in today's environment.
Innovation continues to be a strength for black line, whether it's in our core financial closed solutions or across our strategic product portfolio.
Our commitment to developing and delivering solutions that address unmet market needs remains as strong as ever.
And intercompany for example, we recently released the industry's first tax hyper automation capabilities for intercompany financial management.
These capabilities offer a range of new functionality designed to optimize and automate and organizations total tax incidents across multiple legal entities and building routes.
Thereby maximizing staff efficiency and accounting accuracy.
We're using tax considerations how.
How intercompany processes or optimize helped significantly improve control transparency and overall business outcomes.
And our core financial closed solutions, we continue to develop and release, new functionality to improve and enhance and automate close process activity.
For example, our focus on improving and enhancing our ERP connectors, which are vital to the seamless transfer of data from multiple ERP instances to blacklight software have proven themselves to be extremely important to our customer base and the black line.
We see substantial opportunity to increase connector uptick across our installed base, leading to both revenue growth and higher net revenue retention.
For reference the average NRI or improvement from connector utilization is five points favorable to our companywide dollar based net revenue retention.
Our commitment to innovation and delivering solutions that drive real value for our customers and black lines remains steadfast.
This week, we are hosting our annual customer conference beyond the black where many of the world's greatest companies will join us to learn more about the innovation, we are delivering and how we are further differentiating ourselves.
We expect to announce innovative new solutions, such as financial reporting analytics, and black lines accounting studio, while expanding the modern accounting playbook to our cash application solution.
And as part of the event, our customers will be sharing their digital transformation stories and the substantial ROI they achieved by partnering interesting with black line.
We're excited about next week and look forward to your participation.
Now, let's take a moment to review, our Q3 highlights and dive deeper into our results.
Total revenue in the third quarter was $134 million up 23% versus the prior year.
Average deal sizes increase this quarter up 12% versus the prior year to $127000.
Notably we are seeing further success expanding within our customer base and Upselling higher ticket strategic products.
Our average enterprise deal size is now above $200 and increased by 15% versus last year.
And at the end of the quarter, we had 49 customers that generate $1 million or more than <unk> 50.
58% year over year.
Turning to our markets for a moment, we saw modest year over year increase in North American sales, leading to some great expansion and new customer wins.
APAC performance in the quarter was strong and solid acceleration in deal activity across the region.
However, in EMEA sales activity was softer driven by regional macroeconomic challenges and seasonal weakness from our <unk> partnership.
We continue to see examples of great wins in competitive takeaways across the business. Despite the uncertain sales environment.
In North America. For example, we signed a great new deal and competitive takeaway with the largest transportation and ride sharing company.
The customer was looking to improve their financial close process, while driving additional operating efficiencies freeing up their staff to focus on more strategic and value added work.
And strategic products, our performance was solid again as customers demand innovative new solutions that solve large complex and unaddressed problems.
We signed some great expansion and new customer deals this quarter.
For example, we were able to expand beyond financial close with a large U K based multinational oil and gas company.
Having seen the benefits of partnering with Black line previously the customer wanted to expand our relationship while improving and automating their intercompany processes.
Working with one of their key consulting partners, we were able to showcase how our best in class intercompany solution can improve efficiency and deliver high automation to complex labor intensive and time consuming business activities.
Continuing to build on our successes and our company. We're pleased to announce that we also signed a leading EMEA based insurance and financial services provider.
As a brand new customer they were seeking to move away from manual inefficient and high risk intercompany processes.
They quickly recognized that adjusted REIT intercompany solution from a partner with a strong reputation and focused on customer success was the best path forward.
NAR automation, we also saw some great expansion wins as well.
In one example, a leading automobile manufacturer and longtime black line customer who was looking to move away from manual and labor intensive tasks and into an automated and efficient end to end process.
From day, one we laid out the benefits that are modern our solutions offer and how these complement our existing financial close solution.
Whether it's reducing DSO unlocking working capital, while reducing bad debt expense.
Our solutions for exactly what the customer was looking for.
Expanding black lines partner network remains a priority and is a key component of our broader go to market strategy.
As part of this we recently signed a global consulting partnership with Accenture to strengthen our partner network increased our global footprint and extend our competitive positioning.
Our solar partnership is seeing success, driving new pipeline opportunities and deals around the world.
However, as noted we saw some seasonal weakness in Q3 attributed to SAP.
We expect to see heightened deal activity from this partnership in Q4 based on our historical experience combined with our near term pipeline visibility.
Turning to some of our recent select wins, especially in EMEA, we signed a new deal with a leading Dutch multinational retail and wholesale and company focused on bringing automation control and efficiency into their financial close process.
Leveraging our relationship with SAP and other key partners, we demonstrated the value we can provide and how our solutions fit into their long term digital transformation roadmap.
And another example from EMEA, we were able to win an expansion deal with a global luxury goods designer and manufacturer.
The customer's previous success with our core financial close solution and a desire to further automate their finance and accounting processes provided the perfect opportunity for us to leverage our SVP partnership to upsell additional use cases for our transaction matching solution.
These examples were great wins for Black line and reinforce the long term opportunity that we see.
Our proven ability to deliver value drive efficiency and deliver automation to customers across markets and geographies is a key reason why we continue to win.
In closing I want to thank all of our talented employees globally for their effort and dedication.
Serving our customers and delivering on our promise is vital to our success black.
Black line is positioned to capture multiple long term opportunities, while driving profitable growth.
With that I'll turn it over to Marc <unk> to discuss the details of our financial performance and our outlook.
Thank you Mark and good afternoon, everyone.
This was a solid quarter for black line with progress on many fronts.
Seeing healthy momentum in customer account growth an area, we've invested in over the past few years.
Our strategic product portfolio is generating strong interest from customers with healthy upsell activity across our base.
Our competitive win rates remained strong and consistent and finally, we're driving more efficiencies and productivity across our business.
Leading to healthy margin expansion and free cash flow generation.
Furthermore, we're positioning ourselves to balanced successful near term execution and long term growth.
As part of this we're ensuring the black line employees stay focused on supporting our customers and enabling their success.
Driving deeper accountability across the organization in order to deliver on time and on budget and in scope.
We've embedded further cost and investment rigor across the company.
We're extending our competitive positioning through investments in innovation and infrastructure for scale.
And finally, we are optimizing capacity for current and expected market demand.
Now, let's review some key results and highlights for Q3.
Total revenue grew to over $134 million up 23% compared to the third quarter of 2021 professional services revenue growth accelerated in the quarter up 26% versus the prior year, highlighting customer desire to unlock the embedded value that our solutions provide.
Calculated billings growth was 18% versus last year and was up three point sequentially. Despite a two point headwind from FX.
Additionally, remaining performance obligations or Rps was up 29% with current RPI growing 23% year over year.
We added 57 net new customers in Q3, bringing our total customer count to 4060.
Lower new customer deal activity in the middle market was the primary headwind to new customer growth in the quarter.
Strategic product performance remained solid and represented 23% of sales driven by healthy demand for high automation and high ROI solution like intercompany financial management.
Partners were involved in 70% of large deal as we leverage our partner network to drive additional opportunities across markets and geography.
Sales from our SAP partnership where seasonally soft this quarter, but revenue remained steady represented 24% of total revenue.
Shifting to margin non-GAAP overall gross margin remained high at 80% and non-GAAP subscription gross margin was 83%.
Our services teams delivered an impressive performance in the quarter.
To higher utilization and further productivity gains.
non-GAAP operating margin was 8% in the quarter a notable improvement versus Q2, driven by a combination of gross margin performance sales and market inefficiencies and disciplined expense management.
Hiring in the second half of the year continues to taper as plan as we optimize our teams balancing demand with an appropriate level of sales capacity.
non-GAAP net income attributable to Black line was $15 1 million in Q3, representing an 11% non-GAAP net income margin.
<unk> versus Q2.
We generated $24 2 million in operating cash flow and $16 6 million and free cash flow in the quarter.
With a free cash flow margin of 12%.
Our strong free cash flow performance was up year over year and drove a 35 on the rule of 40.
And finally, we finished the quarter with over $1 billion in cash cash equivalents and marketable securities provide a great financial flexibility to operate in today's market.
Turning to guidance, we previously called out a three point headwind to full year revenue growth given macro condition based on our experience in Q3, especially as FX volatility continued we're adjusting our full year revenue guidance slightly.
On the bottom line, we're seeing stronger margin performance than previously expected driven by favorable operational leverage and as such our full year non-GAAP net income expectations are moving higher.
For the fourth quarter, we expect total GAAP revenue to be in the range of $138 million to $141 million Rep.
<unk> represented approximately 20% to 22% growth compared to the fourth quarter of 2021.
We expect to report non-GAAP net income attributable to Black line in the range of 11% to $14 million or 15 to 19 on a per share basis.
I had was coming from Alex <unk> of Raymond James Your line is open.
Great. Thank you Marc Huffman I know fourth quarter is kind of your big selling quarter I'm. Just curious if you can update us on what Youre seeing through October in terms of late stage pipeline and bookings.
And any change in the trend versus what you called out last quarter in terms of kind of a one point headwind that you called out for sale cycles.
Yeah, Alex Thanks for the question, thus far sales activity in Q4 has been strong.
The pipeline has remained robust throughout.
We have.
Some good examples of opportunities which were larger opportunities.
Previously had.
Slow down risk receiving additional scrutiny towards closing closing.
Including one of the largest deals in our pipeline through solak. So.
I'm pleased with that thus far.
As to your other question about a one point headwind.
Yes, I think that we.
We had talked about a two point headwind from FX and from elongated sales cycle, our expectation is that might be closer to two five points, hence the revenue guide down.
However, as Mark said at this point in the quarter.
Sales are going well.
Okay great.
<unk>.
I mean this quarter you showed a really impressive ability to ramp margins quickly when kind of the environment calls for it and I guess just given what we saw in third quarter Opex spend how are you thinking about kind of overall investments heading into 2023 or are you happy with the kind of size of the team in place given the opportunities in front of you.
Yes, I am.
Thanks.
The first part of this year the end of last year.
Did some really strong hiring rehydrate for Salesforce and put some scale into the organization with the expectation to taper in the second half. So in large measure this improvement in operating efficiency was expected and then in addition to that of course, we've talked about operating discipline and rigor.
Going into the fourth quarter and our guidance, you'll see that we're expecting to continue. This this is where we spent last year and generating significant amounts of cash and margin.
And this is where I think our business can operate for a while so so the answer is yes.
Okay, great. Thank you both.
Thanks, Alex.
Thank you one moment for the next question.
Yes.
And the next question coming from pendulum Bora of J P. Morgan Chase you.
Your line is open.
Hey, Thank you so much for taking the questions.
Marc Hoffman I, just wanted to drill a little bit on the macro.
Environment.
Would you see.
The environment has taken a step down or do you feel like it's more of a continuation of what you.
<unk> last quarter and in terms of the customer discussions that you're having.
Are you seeing people kind of start reassessing their 2023 budget stone and any color would be helpful.
Yeah. Thanks pendulum.
I would say, it's a continuation we're yet to see anything in the macro picture other than deals getting the extra scrutiny that we've described previously so think of that as down funnel velocity.
Extra steps to close remains the most notable macro impact if you will the top of the funnel still remains strong and.
And like I said before we continue to close business in all segments with regard to what the impact is on 2023, our teams out in the market right now talking about a variety of things as it relates to planning next year's participation in budgets with our prospects and customers.
As you know we have products that are high value high automation that provide great value and all different types of climates. So we're having those kinds of conversations with people. We're also having conversations about some of the changing dynamics. The FCC put out a rule recently about executive comp.
Being tied towards.
Ah recalled against.
Weaknesses in financial reporting data. So our teams are out highlighting that capability to people that we have we can provide answer to those things and I think the message is really resonating with clients.
And we feel like we're going to get our fair share of dollars associated in 2023.
Okay understood.
One question for our partners.
On the billings, which is everybody's favorite subject.
B.
It seems like it was flat sequentially, which is stronger than we have seen in prior years in Q3.
But I guess.
Is it possible to understand if you happened to close the deals that slipped out of.
The last quarter or any way to quantify that and the core timing headwind that you've kind of talked about in prior quarters is that starting to reverse at this point.
Yes.
Billings in Q3 were 18% up from a year ago, and that's with a two point headwind from FX.
And so traditionally Q3 would be a seasonal quarter for US last year Q3 was one of our strongest quarters and we called it out as being able to sell through that seasonality, which was positive I think this year, we saw the seasonality.
Nevertheless, we still finished with an 18% three points up from Q2. So it was an increase from Q2 and then when you look at.
Our Po, which was a 29% increase in <unk>, which was a 23% increase what we did in Q3, we believe was really add to the overall backlog the commitments that customers are transacting.
Particularly in the seasonal quarter, where we saw some aspects of weakness that mark talked about and that puts us on a trailing 12 months billing of of of 19%.
Which is the number that we pay a lot of attention to as it works out to variability from quarter to quarter.
Okay understood. Thank you I'll get back in the queue.
Thank you one moment, while we prepare for the next question.
Okay.
Yeah.
The next question that I had it is coming from Brett <unk> of Piper Sandler Your line is open.
Hi, This is Mario jumping on for Brent here, Thanks for taking our questions.
So I just had two questions the first one being around.
Customer preferences for.
Certain payment.
Payment timing schedule.
The customers are you seeing any uptick in customers asking for.
<unk> to the way that they do billings, maybe any preferences away from annual prepay or anything that we should just generally have on our radar and then I have one follow up.
Yes, Mara we're not.
We're not in fact Q3 was one of our best working capital quarters in quite some time I think.
It speaks to the value proposition the importance of customers that rely on our platform that they're paying on time.
And we've had little to no request for extended payment terms like we would have had in the beginning of Covid. This is we have not seen that yet.
Okay got it. Thank you for that and then last one for me I think you cited some some weakness, particularly with your mid market customers is there any chance you could dig into that a little more.
Exactly are you seeing or what might be causing the dynamic there. Thank you.
Yeah.
We did call out.
Performance in the mid market as being something that affected our new customer acquisition.
Data and so what I see there is again that sort of down funnel velocity.
Deals getting extra scrutiny being pushed off a quarter of wait and see type of attitudes on buyers.
Im not going away.
Not losing to competitors our win rates remain high.
Just sort of.
Stalling coming.
Coming up if you will down down in the lower part of the funnel.
Got it very helpful. Thank you.
Thank you one moment, while we prepare for our next question.
And we have our next question.
It is coming from Patrick show of Baird. Your line is open.
Hey, guys, thanks, and congrats on a great quarter, great to see some operational improvement just with the margins and expense controls.
Just.
One question on the partner Channel just wondering if you could provide some additional color on the channel outside of SAP, I mean, you've announced some great new relationships in recent quarters, including Accenture. Just this quarter. So just curious to hear about how these have a garage relative to your expectations just in light of the macro environment.
Yes, I think the data that we talk about oftentimes we attribute the participation of partner on what we consider the larger opportunities that we closed in the quarter and it was 70% I think that's right where we'd like it to be.
The non <unk> ecosystem is important from a referral standpoint from an advisory standpoint, and a process engineering standpoint for customers, who are really being identified as those are ripe for digital transformation.
We had been working with Accenture casually out in the marketplace for a number of quarters that success has led to this global agreement that we announced.
Our recently.
I think it's a validation of us as a market leader their ability to create a market with their customers and advise them on things that are super critical and our customers' accounting.
Accounting infrastructure and then lastly, what we're seeing right now is a lot of excitement around intercompany financial management. These are going to be larger more distributed and complex global enterprises, who have these really deeply embedded relationships with these large providers like.
<unk> like <unk> like Deloitte and they are really ramping up to support what they think is a big opportunity and intercompany.
Operator can you go to the next question. Please.
Thank you one and while we prepare for the next question.
Okay.
And our next question will be coming from Daniel Jester.
Of BMO.
Your line is open.
Operator, if you go to the next question please.
Michelle Thank you one moment.
The next question is coming from Fred Lee of Credit Suisse.
Okay.
Hey, good afternoon gentlemen, thank you for taking my question and very excited to pick up coverage in all the company from here on out.
Very nice quarter, considering the overall environment I.
I was wondering I have a few questions here I was wondering if you could discuss a little bit about the rise with S&P's initiatives.
Called it out this quarter and we called out the progress.
Across all of their back office solutions that they provide within their entire installed base and I was wondering how that has impacted your solid business year over year. It seems pretty consistent <unk> as a percent of your total revenues of 24% I was wondering if it's filling up the pipeline if there's just a bit.
Downtown of velocity, you speak to what the overall impact has been this year versus last year as it relates to that initiative.
Sure so.
Great question. The rise initiatives is a big priority for S. P. I think that we're well positioned and closely aligned with their distribution organization on that priority. There's a lot of great positioning about how you would utilize black line and modernizing the accounting processes as they bring people.
Into S. Four on that through the rise initiative.
We have had some great examples of customer wins and customer case studies that prove those points there.
We utilized frequently and joint sales activities with S. P and I believe that is filling up our pipeline performance in Q3.
Was seasonal that's how we would describe the SAP.
Performance with select and then we I think have a positive outlook on its contribution in Q4, which is traditionally a nice uptick for us in terms of the.
SAP performance as a part of our business you mentioned, so Lex contributes a certain portion I hope I want to make sure that we are we don't have a missouri a misunderstanding on that no no that's right.
Partnership revenues, 24% of the business, we call that out on a disclosure and that has been flat year over year and.
Our goal as we continue to partner with SAP P&C success, and that's all ex partnership will be to drive that number higher not to see it flat.
Got it. Thank you and my second question is I was wondering if you could talk a little bit about the various verticals, where you're seeing incremental strength.
Maybe where youre seeing a little bit more uneven demand.
Yeah. So the solution itself our present, our complete solution applies to virtually all industries.
It's a fairly horizontal.
Deliverable that we have that said we are seeing strength in parts of the business I think transportation logistics.
Of late.
Oil and gas of late insurance financial services of late.
I don't believe Theres any particular macro trends that are driving those things.
Just somewhat notable things Todd.
Top of mind based on my awareness of where we are having great success.
Overall, I think the dynamic that.
We're seeing right now is some slowdown again back low funnel velocity extra scrutiny on deals is happening sort of across the board pronounced in mid market.
Otherwise.
We will continue to be closing business in all segments all industries.
Okay. Thank you and my final question is with regards to your automation solutions, what's the mix of those automation solutions in your pipeline and how are those solutions price relative to your core financial close. Thank you.
Yes, I think youre talking about our strategic products no those are our highest automation highest value drivers.
They make up.
A great portion of the pipeline in times, when we see customer expansion and keeping in mind the land and expand model is really one of the valuable parts of our long term strategy.
They make up a great deal of our pipeline as you would imagine those are generally priced on a consumption or a volume based business. So as we introduce new capabilities new use cases.
Thank drives consumption within customer the customer gets great value through that high automation and we in turn get an uptick in their E. R. R, which is one of the reasons why we have seen such a significant growth in the customers that pay more than $1 million for black line were up to 49.
That's 58% year on year growth.
Alright, Thank you gentlemen.
Thank you. Thank you.
One moment, while we prepare for the next question.
The next question is coming from Adam Hitch Kim of Goldman Sachs. Your line is open.
Good afternoon, and thanks very much for the questions just wanted to dig in a little more on the last answer you have on the strategic product front I think the cross sell opportunity there is pretty clear, but could you talk a little bit more about the opportunity to do a land with things like <unk> given the focus on cash flow and cash management across the market right now that's something that's going to be.
Pac thing.
Is impacting or will impact your new customer wins, and then I just had a quick follow up.
Yeah, we've seen a nice bit of land new customer wins from the AAR products, specifically the cash application.
And increasingly we're seeing a broader land with the broader portfolio pleased with the performance of a R.
Year on year, both from a new customer volume as well as a as a growth perspective, and yes, I think youre right. These type of environments right now I think that really cash management is really going to resonate with clients.
Not only broadly for those who are going through some level of digital transformation, but also those people who want to take a small bite of the Apple which is why this coming week at beyond the black will really be focusing one of the tracks.
On the release of our modern accounting playbook for cash application are leading practices based on our experience that.
Have proven deliverables that give people great time to value and a great.
Value in a short amount of time, and I think that sort of bite size approach in cash management focus times is going to really resonate.
That's great really helpful. Thanks, and then on the profitability front I just wanted to check in is there anything to call out incrementally on the sequential gross margin improvement other than the improvement on the professional services side because it looked like it was a pretty broad based improvement there and wanted to make sure we understood that.
Yeah. Thanks, we've had <unk>.
Consistently really high gross margins and subscription.
Professional services is a relatively small part of our overall revenue stream.
So in the quarter.
Hit 80% was the benefit of a really great team effort from the professional services to drive higher margins through utilization and.
Higher revenue contribution, but also another aspect of that is that we are under go in a transition to the Google public cloud that migration is ongoing so in any given quarter, we're expecting a one to one and a half even two point drag.
Until we get to the end of that migration, which we've currently suggested would be the end of next year early the following year end of next year was about 12 to 15 months away and that's when we would get back that point to point and be materially on the new migration.
Public cloud in this case in Q3 the team again did a great efforts the level of migration the pace of play the efficiency that they operated in was very good the accountability they have for driving down cost while maintaining efficiency to drive over customers was very positive we will see in future.
<unk> as we go through the migration plus or minus on that 80%. We would expect to continue to have a drag on gross margin around 79% to 80% until we can get to the end of the migration.
Really helpful. Thanks, so much mark.
Thank you I appreciate it.
Question.
Thank you one moment, while we prepare for our final question.
Our final question is coming from Daniel Jester of BMO. Your line is open.
Hey, Good afternoon. This is Kyle on for Dan. Thanks for taking my question could you maybe touch on the demand you're seeing in your AUR and intercompany solutions and then maybe how you're thinking about the integration of the intercompany product and pork you. Thank you.
Yeah, you bet. Thanks for the question so.
Both of those areas I'd call out his strengths from a strategic product contribution in Q3's performance wise, so quite pleased with those.
Are those both as I mentioned previously I think that cash management in these times is going to be in it.
A topic that will really resonate with clients of all sizes and all complexity and so we.
We'll be really focused on that we've got a number of deliverables that have just come to market. The modern accounting playbook for cash application as well as our customer attractiveness, scoring which I think will create some really great opportunities for real time visibility into credit.
Or is your risk and opportunities for clients in terms of the intercompany solution. We're really excited about where this stands in the product pipeline and portfolio will be highlighting that.
Bunch next week at our conference beyond the Black.
We've traditionally had a great intercompany business that was focused on identifying and remediated out of balance transactions. We're now with the intercompany financial management, bringing together capabilities from <unk> and the acquisition with our existing intercompany capabilities.
We'll be able to take people beyond that sort of concept of zero, just getting the intercompany to balance out to zero.
And have them focus on how they can create value with the automation of the tax rules that.
Billing routes et cetera exciting innovation.
Really resonate with large complex multinational organizations, who are under more pressure than ever right now to maintain compliance globally.
Thanks Scott.
Thank you and that concludes our Q&A session for today I would like to turn the corner I'll call back over to <unk> CEO , Marc Hoffman for closing remarks.
Just to close up I want to thank you all for your interest and support of Black line on an ongoing basis. We know that you meet with a lot of executives cfo's et cetera, and when they are interested in learning about modernizing their accounting, we hope that you send them our way. Thank you all for your attention today have a great evening.
Thank you all for joining the conference call today that concludes today's conference you all have a great evening.
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