Q2 2019 Earnings Call
Q2, 2019 earnings conference call at this time, all participants are in a listen only mode to prevent background noise. If anyone needs assistance during the conference Press Star NCR for an operator, NATO, but we'll have a question and answer session.
And if I reminder, this conference is being recorded now it's my pleasure to turn the call to Alexandra Geller, Vice President of Investor Relations.
Good afternoon, and thank you for your participation today with me on the call is trees, Tucker founder and Chief Executive Officer of Black line, and Mark Parton, Chief Financial 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 are forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
These forward looking statements represent our outlook only as of the date of this call. While we believe any forward looking statements. We have made are reasonable actual results could differ materially because the statements are based on our current expectations and are subject to risks and uncertainties, we do not undertake and expressly 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 discussed 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 web site and investors adopt black line dotcom or on our form 8-K filed with the SEC today now I will turn the call over to Theresa to begin.
Good afternoon, everyone and thank you for joining us today I am pleased with our execution and the progress we have made this year on our growth initiatives.
Q2 was a good quarter driven by continued global demand for our solution as Cfos turned to black line to help them transform their manual processes and outdated ways of closing the books.
We believe these results are early indicators of positive momentum across our initiatives to drive long term sustainable growth.
I'd like to begin with how we are driving success for our customers and leading them on their accounting and finance transformations.
As a strategic partner, we want to make our customers successful by providing them with mission critical solutions best practices ongoing support and a framework for success.
For example in Q2, we hosted a number of events around the globe to connect and engage with customers and prospects we held our in the black events in Singapore and Sydney in May.
We also hosted best practices summits in different cities in the us and Europe , bringing together hundreds of customers to discuss how they can optimize their black line products to derive value.
These events are opportunities to increase customer engagement with our products extend our thought leadership and provide a forum for prospects to network with existing happy Blackline customers. As a result of these events, we have seen customers deploy additional users and or products to fully realize the blackmailing value proposition.
In Q2, our digital transformation specialists spend time on site with a number of our leading global accounts to define detailed roadmaps and accelerate our customers digital transformation journeys.
At the conclusion of one such workshop, a controller of a 70 billion dollar companies said and I quote we recognized that we were not fully utilizing our blackwing tools and leaving value on the table. The Blacklion accounting innovation team helped us identify over 50 automation and standardization of efficiency opportunities and we are making real change and quote.
We believe the investments in our customer success are driving a record number of a large expansion deals.
In the second quarter, we saw strong growth from existing customers rolling out more users and buying additional products.
This further extends our reach in the top tier customers and drives a better value proposition for customers with a larger and more strategic footprint.
A few examples include.
Ill Fortune 40 healthcare company first became a black line customer in 2013 with the purchase of account reconciliations across a small population of their finance and accounting and employees.
Over the course of their six year tenure, they deployed additional products, including journal entries tasks, IC, H and transaction matching as well as additional users growing to become one of our largest customers.
This quarter they expanded further and now have thousands of users around the world for improved controls enhanced internal capacity standardization of global processes and better finance analytics across the business.
Despite being one of our largest customers there is still opportunity for this customer to grow their black line footprint.
One of the world's leading medical technology companies purchased account reconciliations and tasks in 2012.
Over the past seven years, they have expanded their black line footprint with more users and additional products such as journal entries. This quarter. They purchased dicey H to centralized third data across dozens of ERP is around the globe. It was critical for this company to have statutory compliance on intercompany invoices across all of their global operating entities Black line was selected as the vendor most capable to address these requirements as a secondary benefit the CH platform gave them access to their global financials further enabling their digital transformation objectives.
One of the world's largest food and beverage manufacturers first became a customer in 2016, when they purchase account reconciliations.
The following year they added our remaining core products to their black line instance to streamline their end to end financial close process.
In Q2, this customer increased their black line footprint with the addition of transaction matching they were inundated with a significant volume of transactions stemming from an increased partnership with a large global e-commerce platform and realize their manual excel processes were not capable of identifying and managing their order to cash revenue streams.
After a market evaluation they chose our transaction matching product to ensure proper revenue recognition automate low value tasks and seamlessly integrate with their existing black line products.
We continue to see strong growth rates in our large global customers driven by finance transformation and believe that Black line is uniquely positioned as the only vendor with the requisite experience resources and scale to serve as a strategic partner to these customers.
Q2 was also a good quarter for large new logos, we expanded our customer base to more than 2800 companies around the globe with accounts such as a leading interactive gaming company that was frustrated by the lack of visibility and controls and lengthy time to close.
Their CFO mandated a modernized and agile close process.
In Q2, this company replaced Excel and manual processes with Black lines Finance transformation suite.
Including all core products and transaction matching.
Because of our unique ability to serve as a true transformational platform.
This customer chose black line to be their strategic partner due to our superior user interface extensive user community scalability and seamless cross product integration.
One of the UK is largest construction companies engage black line as part of a broader initiative to future proof their business by adding greater controls visibility and efficiency. Their finance operation was highly decentralized, which required significant head count to support a highly manual and time consuming close process.
In addition to poor visibility and exposure to risk their biggest challenge was a lack of standardization around balance sheet controls, which was further complicated by a number of acquisitions.
In Q2, they purchase black lines account, reconciliations and transaction matching products for consistency and standardization across their platform automation controls and enhance connectivity with their existing ERP as a company focused on future proofing their business. They valued our market leadership and chose Black line is the vendor best suited for the role.
The Australian Division of one of the world's largest restaurant chains encountered many instances of manual unrecorded data changes happening in the background, which would make accounts become unreconciled without their knowledge overwhelmed by the lack of visibility and control around their close process. They turned to black line for our account reconciliations and tasks.
To improve their reconciliation process.
Provide a complete and accurate audit trail and manage segregation of duties.
Given that their UK counterpart within existing Black line customer the whole process from RF Pete to sale represented a very speedy close of under three months.
At the other end of the spectrum, we continue to see strong demand in the mid market today, we have over 1200 mid market companies, who have chosen blackline as their strategic partner. These visionary companies understand the importance of a proven scalable and global partner, who can serve their needs as they grow and encounter the increasing demands of data regulation and globalization.
These mid market companies recognize that legacy systems work flow apps and less sophisticated point solutions will not serve their long term needs Black line will continue to invest in this market to meet the growing demand.
I am pleased with the positive results, we are seeing from our go to market teams driving strong alignment and synchronization across global sales reps strategic account managers digital transformation teams customer success managers and reseller and consulting partners is critical to delivering a positive customer experience and these alignments shorten the time to value for the customer.
Delivering an excellent customer experience remains a top priority for us.
We continued to rollout our reseller partnership with S&P in Q2 and are expanding our investments to educate and drive greater awareness and alignment across the global S&P go to market teams.
Examples of progress include driving sales enablement with enhance collateral joint quarterly business reviews, and increased engagement between S&P account executives and black line sales reps.
Additionally, we participated in Sep Sapphire conference in May where we had a record number of engagements with prospects in September we will have an S&P track at our in the Black Los Angeles event with curated content for Sep prospects to enable joint sales.
Some early proof points to continue to validate the partnership includes some new customer wins in the us and Europe in Q2 accelerated sales cycles through strong sep relationships at the customer level.
Strong price points from tapping into larger I T budgets for digital transformation and better access to large and strategic global deals. While it is still early and there are not a lot of data points. We believe it remains a large global opportunity for driving growth.
Among our consulting partner ecosystem, we saw increased engagement with a number of partners, including Deloitte and E Y who are continuing to make significant investments in growing their black claim practices and the number of joint customer engagements.
We are pleased with our performance in Q2, and our progress to date against customer partner and sales initiatives. We will continue to focus on driving growth and scaling the business throughout the year.
And with that I will turn the call over to Mark. Thank you Teresa and good afternoon, everyone.
As a quick reminder, unless otherwise noted all numbers mentioned during my remarks today are non-GAAP .
As Chris mentioned Q2 was a good quarter driven by strong demand for our solution.
In particular, we saw a record number of expansions in our large existing customers and experienced strong growth in the number of customers with an a or a $250000 or more.
We've invested a lot of time and effort and financial transformation leadership and believe this growth demonstrates our ability to support and scale alongside the largest companies in the world.
Total second quarter revenue grew 26% year over year to reach $69.7 million.
Higher revenue in the quarter was helped by closing deals earlier in the quarter, a strong sales performance and a record number of large deals.
A few other notes on revenue.
Our international business continues to grow on pace with our expectations, representing 23% of the total in Q2 up from 21% in the prior year.
We continue to invest in both direct sales and partner support in our major markets in Europe and Asia Pac.
Revenue from our Sep partnership was 24% of total revenue in Q2.
Compared to 23% a year ago.
This metric represents our revenue with sep customers under existing and former partnership agreements.
Services revenue saw significant growth of 49% in the quarter.
This is in line with our expectations as we continue to invest in this area to support growth of our strategic products.
We expect services revenue will continue to accelerate and could represent as much as 6% of total revenue through the second half of the year.
More than 70% of our large deals in the quarter included a partner representing a good balance of partner participation.
Strategic products represented 15% of sales for the quarter, which remains in line with our balanced expectations for both core and strategic product sales.
Please note this metric tends to fluctuate on a quarterly basis.
Moving onto our key performance metrics for the quarter.
We added 106, net new customers and now serve over 2800 customers globally.
Consistent with Q1, the quality of new logos was strong and included companies on a digital transformation path.
The reasons for buying continue to include large financial transformation projects, where we're operating as a strategic vendor with the help of our partners.
Our dollar based net revenue retention rate was in line with our expectations at 108% and our renewal rate remained high at 97%.
Gross margin for the quarter was nearly 83%.
With subscription gross margins at 86%.
In Q2, we generated net income attributable to black line of $6.1 million.
This exceeded our expectations due to the revenue overperformance and the timing of certain expenses shifting into the second half of the year.
We generated nearly $9 million and operating cash flow and $6 million in free cash flow for the quarter.
We ended the quarter with approximately $145 million of cash and cash equivalents and marketable securities.
Now, let's move onto our third quarter and full year 2019 outlook.
For the third quarter of 2019 total GAAP revenue is expected to be in the range of $71.7 million to $72.7 million.
On the bottom line, we expect to report non-GAAP net income attributable to Black line in the range of $1.4 million to $2.2 million or two to four cents.
On a per share basis.
Our share count will be approximately 59.8 million diluted weighted average shares.
For the full year 2019, total GAAP revenue is expected to be in the range of $281 million to $284 million.
non-GAAP net income attributable to Black line in 2019 is expected to be in the range of $13 million to $15 million.
Utilizing diluted weighted average shares of $59.2 million, we expect non-GAAP net income per share between 22 and 25 cents.
Lastly, I'd like to announce that we will be hosting an investor day in conjunction with our IP be Ela event on September 17th.
Please reach out to our Investor Relations team, if you would like to participate in the Investor day.
To refund I will now take your questions.
Thank you and ladies and gentlemen, if you have a question at this time just press star and the number one key also touchtone telephone. If your question has been answered you wish to remove yourself from the queue Mr. found Keith.
Again, if you have a question just press Star then the number one.
And our first question is from bond Suri with William Blair.
Hey, everybody. Thanks for taking my question and congrats on a really solid quarter on those on John .
Hey, Steve.
I just wanted to touch first on the.
Well some of the construction.
Let's touch first on the competitive environment.
There's been a bunch of noise out there from.
Your traditional competitors.
Trintech come back some of the smaller companies out there.
At the lower end I'd, just love to get an update sort of broadly speaking sort of environment.
And who you're seeing sort of where they play in sort of win rates just as an overall sort of view of how you see it play out in the last couple of quarters of compelling Barbara let's start there. Thanks.
Sure. Thanks, Yvonne I think treats and I, both will have something to say about that at our competitive field remains pretty consistent since we've been public we still see the same people.
We believe our competitive position has strengthened in that time through our investments and our ecosystem and our product and a variety of things, but I'll I'll say that.
The number one competitor still remains.
Excel and inertia and when we go to market that's still what we're seeing today.
Three if you want to.
Yes, and you know we think that.
Having more people, making noise Stefan is actually a validation of something that we've been saying all along that this is a very large unpenetrated market Tam and.
Having others in the market, making noise only helps build awareness.
Sure enough fair enough.
We would just fall specifically I guess as you look at the markets that you look at the competitors.
And you look at sort of the core strategic customers you have.
Would you feel like the win rates to powder consistent and they haven't changed in this sort of no material losses.
And youre closer to large enterprise customer base.
Well.
Our win rates are still strong.
Our sales people still feel very good about.
Our position when were going into deals, particularly for the ones that we are trying to win.
We are a large and strategic.
In premium provider of the product we operate.
With the largest companies in the world at the same time at the Midmarket as Teresa mentioned earlier, we have over 1200 companies.
Our renewal rates are 97% on a composite that's 98% at the enterprise and.
Low to mid Ninetys on the mid market, we don't like to lose any company.
On customers, but it happens.
But we look we really focus on.
Our target market and we think our competitive position there's.
Strong.
Sure.
Super helpful.
Just one quick follow up Glenn things, we've talked about in the past.
The use of the partners and.
Sleepy.
Driving a shift towards larger initial deal sizes as larger companies, just some color and sort of how that pipeline is maturing.
And what you might see play out through the rest of this year in terms of those relationships, both S&P and the partners continue drive momentum for those larger initial deal size, which obviously we saw some.
Of that play out in Q2, but obviously I'd love to get some color on what you think the rest of your looks like thank you.
I think we are continuing to see digital transformation sort of take hold and when we've seen some really good expansion stories inside of our own customer base.
And and it's a variety of both user expansion as well as a lot of different products. It feels like the story that we are telling our customers about what they can do with black line is really resonating with them.
And that that has been something that has been developing over a whole bunch of years and our experience in this market.
Yes, and those partners. They participated in 70% of the large deals say to help make deals larger and more strategic for us.
And we're both really invest in in that partnership.
Awesome awesome. Thanks, taking my questions guys, Thanks, again and I'm not sure.
Thank you. Our next question comes from Roth Oliver with Baird.
Great. Thank you guys for taking my question.
Theresa you mentioned CFO is a lot in your prepared remarks, so I thought I would start there just to talk a little bit about the CFO role and use that becoming your buyer I know traditionally when you guys would land with the contracts that was in your buyer and.
Yes that changing and is that digital transformation and that is moving to the financial suite, enabling you to touch that fall more often in the sales process.
And if so how often and I just had a quick follow up for Mark. Thank you.
Excellent excellent point, Rob and yes, a resounding early yes, okay as companies really start to realize that digital transformation is something that is necessary for the health of their organizations.
Then they look at.
The the CFO wants to have a say in who their strategic partners are.
So we are absolutely having more engagements with the CFO now it also happens to correspond to these strategic products.
These strategic projects tend to correspond to a much lower larger spend as well, which also gets the cfos attention and time. So it is absolutely tied to the financial transformation that companies are undergoing and we're pleased with that movement.
Great.
Thanks, Teresa and Mark I, just had a quick one just on if you could just right.
Right and I apologize just remind us on the uptick in the services revenue and what.
How you're thinking about that going into the back half of the year.
Is it around larger engagements engagements demanding more of your time relative to your partners time, and taking control of that process with your most important customers is that the right way to think about it if not.
What is thank you again.
Yes, Thanks, Rob, Yes, you answered that.
Quite nicely, we've been investing and these large digital transformation in the.
Customer implementation and service and success for strategic products, and we're bringing partners into those engagements as well.
And so we've ramped up and invest in a lot of money in very capable people that help make the customer experience early.
And the time to value faster and so in the in Q2, we saw the initial acceleration in the second half we expect to see more of that as these people come on line and we get the customers.
To where they need to be so we.
Believed that it could be between five and 6% of revenue in the second half, which would be slightly up from where traditionally as 4% to 5%.
Thank you. Your next question comes from Pat walls Ravens with JMP Securities.
Hi, This is Joe good went on for Pat.
I just had a quick question around.
You are kind of the enablement practices in the partnership with Sep.
You have a question or you want me to speak to it [laughter].
So I guess that is my question if you could speak.
Well you know we mentioned in our remarks today that.
We are doing the quarterly.
Business reviews, right Weve got additional collateral we've been doing a number of joint events with Sep various marketing events, we have various outreach events to educate and sort of build awareness amongst the Sep sales force.
And these are these are typically global Mark and I have spent like the first part of the year doing quite a bit of travel around the world as part of sort of getting to know our sep counterparts, all over the place and then.
What else am I on yes, and we also see if not just marketing and the marketing partnerships and the events, but if if you remember these are sales reps hours and hours in the field that are more engaged around pipeline managements in quarterly business reviews, and so the enablement as not just the collateral and education awareness, but really partnering and co selling the key accounts that that we're working with on Sep and so it's a very much a ground roots effort.
Great. Thank you.
Thank you. Our next question comes from Chris Merwin with Goldman Sachs.
Hi, great. Thanks for taking my question and congrats on a great quarter.
Yes, I guess first I was hoping to touch on billings. It looks like there was a really nice acceleration there.
At quarter to 30% I know in things move.
Around a lot I mean anything that you could highlight there was a movement of deals from one QQ. It's just a really healthy pickup in organic demand just curious anything you could speak to on the billings front. Thanks, Yeah, Yeah for sure. Thanks.
Yes, what we saw in Q2 really as Teresa mentioned was.
Some results based on our execution with in these large transformation account. So it was a record quarter for.
New large logos as well as existing expansion deals.
Many of those and sort of digital transformation that we're driving users.
As well as strategic products. So it was just a well rounded.
In performance from the sales group.
To to drive these large deals and we have communicated before that we have been very focused on execution. This year.
It is all about us executing on all the great things that we put in place last year.
Great and anything to sneak in one follow up I appreciate the comments on that.
The new Solex agreement, so it sounds like you're stepping up investment more there. So I mean anything you can say about the initial response of the SMB sales force to the investments you're making there to drive awareness, how that's been performing relative to your internal expectations and.
How is that.
And any way kind of contributing to the uptick in guidance for the year. Just just any other details you can share would be really helpful. Thanks.
Yeah for sure.
Look it's still really early.
In that partnership so far we've been pleased with a number of things first.
The engagement and feedback from the people in Sep that we do talk to and that we are working with.
We've extended our relationship with them further our challenge in the long term with that is just more people more awareness. It is such a large organization.
Other things that we've seen that we really like is that.
Sep is really help bringing their customer relationships to the process. They can accelerate the sales cycle as they can drive higher price points and tap into the I.T. budgets. They can.
Really help us educate for digital transformation.
And so we've been very pleased with the data points that we do have now our expectations are that the more we invest and time and effort and the more sort of success points. We see it will build on itself and so as we move towards the second half and into next year.
We expect to see more out of that partnership, but it's certainly has met our expectations in some of our big assumptions that we've made on the partnership.
Okay, great. Thanks very much.
Thank you. Our next question comes from Terry Tillman with Suntrust.
Hello. This is Eric Lemus on for Kerry. Thanks for taking my question and nice job on the quarter.
Yes, I say P., obviously is progressing well so it sounds and just wanted to touch on some of the other technology partners and you specifically some of the other ERP partners and with Oracle you've had.
Dr out for a while should we expect any sort of deeper relationship on the technology or even a go to market side with with other ERP vendors.
You know we are always open to partnering with any of the ERP that are out there.
Oracle will probably not ever become a partner simply because they have a competing product, but we always look to partner with as many different ERP as we can because here's the thing we serve as Switzerland to our customers' most larger companies out there have multiple ERP. So having really good connectors, having really good seamless center facing and movements of data and having sort of you know.
That's support in place.
Really helps our customers centralize, they're close process centralized their financials in a way that gives them tremendous benefits.
Great. Thanks, and last quarter, you hired new CTO and and that's been a couple of months. Since then so can you give us any sort of update on some of the top focus areas are initiatives that he has in place.
Well you know he is really focused on our long term strategy and where we're going to go with the technology and the tech stack in general.
He is one of the great things about Pete is that.
He is super Smart and Super technical but has that rare combination of also being able to scale and organization.
So he is certainly going through his evaluations and you know figuring out where additional people are needed. He is looking at our longer term plans for the usage of different technologies that are available and I'm pleased I'm really pleased he is a great higher.
Okay, great. Thank you.
Thank you. Our next question is from Mark Murphy with JP Morgan.
Hi, guys. This been Jim on behalf of Mark Congrats on the quarter.
Threes I wanted to ask you one thing about RPV seems like there's a surge and those tools.
How do you see those tools I mean is it because of complimentary to black line, where you can maybe work side by side with those RP tools or do you think over time RPM might become more competitive.
Well actually we mentioned in last quarter's call that we have partnerships ongoing partnerships with all of the major RPH players, Okay, and I think that our P.A. is.
I think it's a very good complement to the automation that black line brings all right here's the beautiful thing we look at how different financial processes can really be streamlined from end to end, alright, and where our P.A. is very focused on not sort of having a great of efficient overall, you know I see h. process close process, whatever they're focused on automating very very specific tasks and so we actually in certain cases have helped our customers by providing bots for very super specific tasks that is not digital transformation that is automation in a very very narrow spectrum. It has its place. It has its value Oh, we have oh and most of the RP vendors are also customers by the way so they're both cuts.
Tumors and partners and I don't see a conflict between what we do and what they do at all.
Awesome pretty clear thanks for that.
And.
On the gross margin side, I guess mark the.
The ramp in the services in the second half how should we think about gross margin for the second half I mean, it would come back down to the the 80% level and then.
I didn't hear anything about the FCF margin guidance should we expect.
That would be the same as what you had said before.
On the gross margin. Thanks for the question, Yes, I think that.
The the long term trend as you mentioned, we'll move towards our target model of approximately 80% it will tick down slightly in the second half.
Due to what you mentioned on our emphasis at the services level.
On the free cash flow margin.
We are still looking for something in the range that we mentioned before in the 3% to 4% range.
And so the.
The nature of that business profile is consistent.
Understood just just to make make sure I understand it you said it will tick down in the second half take down.
Versus the current level or below 80% level, sorry, yes, it will tick down from 83% slightly towards the 80 towards 80%. So we would look forward on a plus or excuse me on a minus 1% or something close to that.
Got it. Thank you so much yeah. Thank you.
Thank you. Our next question comes from Koji.
Hi, Kedah from Oppenheimer.
Hi, Thanks for taking my questions and great quarter guys.
Just had a question wanted to dig in a little bit more on that billings you know it really grew at an impressive clip this quarter really off the toughest comp of the year too.
I think there is some accountant hiring seasonality seasonality involved in the second quarter I guess, please correct me if that's wrong, but I was wondering if that's right.
Could you bifurcate the billing strength between the typical second quarter season hiring seasonality and the good deal commentary.
Oh interesting I don't know that I can draw that straight line I. Let me, let me say what I think is it happened in Q1 is a seasonal quarter as we spoke about before Q2, what drove our billings.
It really was our success in large logos in both new and expansion and we feel very good that.
Our initiatives are coming online as we move towards the second half of the year, We don't guide on billings because it varies I think what we see in variance.
Is more related to large deals versus related to higher end.
However, I think.
That in Q3 Q4 traditionally we've had good sort of build through the year second half weighted year end kind of terms of overall seasonality.
Maybe there is more to your question that I understand Koji, but I think thats, how I would think about it varies.
From quarter to quarter.
No that's super helpful. Mark. Thank you for that and just a follow up net revenue retention here said not a 100 need for it looks like three quarters in a row now sounds like there's some great expansion wins in the quarter. Good customer success commentary too I mean, I guess is it really safe to say this this could be the bottom here with the 108% and we could start seeing that metric expand in the upcoming quarters. Thanks for taking my questions.
Sure for the full year, we've talked about it being kind of a plus or minus and even though we did have a great quarter.
What really we need more consistent focused execution really to move the needle on that metric sort of given the revenue base and how it's calculated.
What what.
I'll take from your point is that our renewal rate, Dave the buildup of that remain strong it continued to be 97% in the quarter, we feel good about.
That particularly in the enterprise and our opportunity through our strategic initiatives of digital transformation strategic product portfolio really can.
Impact that number positively.
At the same time, there are some numbers that work against that which are as we land large.
And as we have more and more success in the Midmarket those are things that tend to pull that back slightly so one or wait plus or minus for the full year is how we talk about it.
And again, where we're pleased with the fact that.
Our expansion deals in Q2 look so good.
Thanks, again for taking my questions and great quarter guys. Thank you. Thank you.
Thank you. Our next question comes from Brian Peterson with Raymond James.
Hi, Theresa Mark Thanks for taking my question and Congrats inquiry Mark. So just just one question for me. So I think it's pretty clear that the strategic deal activity.
And the momentum with partners really picked up this quarter and I think it's pretty intuitive on how the partners are helping you win some large deals with new logos, but how does that work in terms of partners potentially helping you with existing customers. Just just curious if that dynamic is happening in how that that works. Thank you.
We actually have partners, who specialize in helping our customers optimize their black line instances.
So that in and of itself because it that actually is a great revenue opportunity for them because if someone is purchase black line and they are not getting full value having a partner go in there and sort of walk through all the different areas, where they can utilize it much more to get much more value that's consulting dollars for them and that's sticky Miss for us when the customer gets more value out of what they purchased it's a win for everybody involved. So yes, there are absolutely.
Different firms have different approaches to this but there absolutely practices built around optimizing black line usage.
Got it thanks Terry.
Thank you our last question comes from Brent Bracelin with Keybanc.
Hi, This is Clark on for Brent.
Firstly I was wondering if I could get the international mix for the quarter, and then adding to that any color of what you're seeing in terms of pipeline pipeline or demand internationally.
Specifically EMEA you you've highlighted several large UK deals in the last two quarters. So looking to understand how you attribute your success in that market.
Sure Yes.
Our international mix ticked up from 21% to 23% in the quarter.
And that's across both Asia Pac and Europe , we are seeing good.
Momentum in both markets good growth, we've been investing there.
Over the last number of years and as you've mentioned the last year has been particularly strong.
We are pleased with the team that we have made excuse me that we've invested in.
In both Asia, Pac and Europe , and our partnerships with.
Sep our partnerships with the consulting ecosystem have helped us we believe.
To move that ball forward. So we're we're pleased with where that mix is and it's.
What we've been trying to grow yeah.
Great.
And three.
Based on your comments of maintaining customer success and customer experience is a top priority.
I can imagine that could be more difficult when you're talking about cross partners or cross.
Two different organization. So I was wondering if we could get a view into how you're handling the hand off between for example, Sep in Black line in terms of enabling the success and expansion.
To give you those anecdotes of customers that have been around since.
20 level, you know that are still.
That's a great question, because that's been one of the areas that we've really been focusing on and I I, specifically mentioned that I'm. Thanks for calling that out because getting that alignment, making sure that you have the right Handoffs, making sure that you have the right set of communications right because it's not just between us say PM Black line it could be a CPM black line and a consulting partner that's going to be doing the implementation and then there might be a BPL involved as well and so having the right people in house that know what level they need to be involved that right. Because you don't want things to go sideways you don't want to just handed off and forget about it because we own that customer relationship.
So getting that right is really been something that we've been focused on getting much better at over the last year and we actually did call that out today, because I'm really proud of what I've seen in terms of how all of our internal group.
Customer success, the accounting innovation team all of those how they are working together right to bring the best possible experience to the customer. So I think we've gotten much much better at that and it has very much to do with the type of customer the type of project what level of involvement we have.
Who the partners are that are working on this and how to best make it successful for the customer and and that's just a body of expertise that I feel really good that we're getting.
All right perfect. Thank you.
Thank you.
Thank you and this concludes the Q and a session I would like to turn the call back to Jerry Stahlecker to founder and Chief Executive Officer for her final remarks.
Thank you everyone. Thank you for your ongoing support and your evangelism of Black line. It continues to bring us new referrals in customers. Please do keep it up and thank you for joining us today.
And with that ladies and gentlemen, we thank you for participating in today's program. This concludes <unk>.
Program and you may all disconnect have a wonderful day.