Accounting automation software maker Blackline (NASDAQ:BL) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 6% year on year to $166.9 million. The company expects next quarter’s revenue to be around $171 million, close to analysts’ estimates. Its non-GAAP profit of $0.49 per share was 28% above analysts’ consensus estimates.

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BlackLine (BL) Q1 CY2025 Highlights:

Revenue: $166.9 million vs analyst estimates of $166.7 million (6% year-on-year growth, in line) Adjusted EPS: $0.49 vs analyst estimates of $0.38 (28% beat) Adjusted Operating Income: $34.95 million vs analyst estimates of $28.67 million (20.9% margin, 21.9% beat) The company reconfirmed its revenue guidance for the full year of $698.5 million at the midpoint Management raised its full-year Adjusted EPS guidance to $2.17 at the midpoint, a 6.6% increase Operating Margin: 2.1%, up from 1.1% in the same quarter last year Free Cash Flow Margin: 19.5%, down from 21.6% in the previous quarter Customers: 4,455, up from 4,443 in the previous quarter Market Capitalization: $3.11 billion

“BlackLine’s first quarter delivered solid results with bookings exceeding expectations, driven by improved execution along with continued margin expansion,” said Owen Ryan, Co-CEO of BlackLine.

Company Overview

Started in 2001 by software engineer Therese Tucker, one of the very few women founders who took their companies public, BlackLine (NASDAQ:BL) provides software for organizations to automate accounting and finance tasks.

Sales Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, BlackLine grew its sales at a 14% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds.BlackLine Quarterly Revenue

This quarter, BlackLine grew its revenue by 6% year on year, and its $166.9 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 6.5% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 7.4% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and implies its products and services will see some demand headwinds.

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Customer Base

BlackLine reported 4,455 customers at the end of the quarter, a sequential increase of 12. That’s a little better than last quarter and a fair bit above the typical growth we’ve seen over the previous year. Shareholders should take this as an indication that BlackLine has made some recent improvements to its go-to-market strategy and that they are working well for the time being.BlackLine Customers

Key Takeaways from BlackLine’s Q1 Results

We were impressed by BlackLine’s optimistic EPS guidance for next quarter, which blew past analysts’ expectations. We were also glad its full-year EPS guidance trumped Wall Street’s estimates. Overall, we think this was still a solid quarter with some key areas of upside. The stock traded up 7.2% to $50.01 immediately following the results.

Indeed, BlackLine had a rock-solid quarterly earnings result, but is this stock a good investment here? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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