Bottomline: ‘Outlook has never been better’
Portsmouth firm sees net loss, but revenues and prospects climb
Bottomline Inc. posted a quarterly net loss of $2 million, about 5 cents a share, but CEO Rob Eberle in Friday’s earnings call referred to the results as “outstanding,” adding that the “outlook for our business has never been better.”
Investors also seemed happy with the results, which beat analysts’ expectations and the company’s previous guidance. The stock price shot up $3 a share, past $26, when the earnings were announced last week and they have hovered around that amount thus far this week.
The Portsmouth-based company said revenue is up 12.2 percent, to $82.2 million, and losses were down in the quarter that ended Dec. 31. The company lost $7.3 million during the same quarter last year.
And the company’s “core” net income – which excludes amortization of intangible assets, equity-based compensation, acquisition-related expansions and noncash interest expenses – is in the black by $38 million.
But it was the potential for future growth that excited Eberle, as the company continues its journey from being a financial software vendor to a provider of cloud-based services. Last quarter, some $43 million of its revenue – more than half – was from subscription-based cloud services, a 23 percent increase.
Such revenue is recurring and results in greater profits, since expenses are lower and margins are greater resulting on “transformative impact on our revenue mix,” said Eberle. Eberle outlined three areas of future growth:
The first, Partnerselect, is a platform that essentially matches insurance companies with law firms. Bottomline has signed up some 250 insurance firms, driving some 12,000 law firms to pay a fee to post a professional profile in hopes of being selected.
Second, the company has expanded its digital banking business not only to provide business-to-business payment services, but find ways for customers to cut expenses or make money through analyzing their financial systems.
Finally there was the recent acquisition of Intellinx, an Israeli cyber fraud and risk management firm, for $67 million in cash and 774,000 shares of stock to employee shareholders. The market – estimated to be $17 billion – is expected to double by 2019, and Eberle said that Intellinx revenue will grow 50 percent a year to $50 million during the same time frame.
“We believe that this technology could someday be a standard component in the fight against cyber crime, every bank, business, government agencies, large or small, domestic or global will require,” he said.