Bottomline sees a ‘strong start’ to year

Despite 1Q loss, company predicts 20% annual growth rate

Bottomline Technologies’ bottom line for the first quarter may have been a net loss of $6 million — 17 cents a share — but the Portsmouth-based payroll company is off to a “strong start” to its fiscal year, according to Rob Eberle, president and CEO.

The company reported that revenues were up 9 percent, to $67 million, in the first quarter ending Sept. 30. It said it would have made about $10.2 million in “core income” if not for the integrated expenses related to the purchase of two European firms, another $2.8 million in interest and $5 million in equity-based compensation for company executives.

The purchase of Switzerland-based Sterci SA and the UK­-based Simplex GTP Ltd. for more than $120 million lessened Bottomline’s cash by nearly $100 million to $196 million, but added to the company’s intangible assets, such as $56 million worth of new customers and $41 million in goodwill.

Eberle was ebullient with the 11 percent increase in subscription and transaction revenues, particularly in cloud based applications.

“In the past, the cloud was popular with smaller institutions, primarily based on cost. But now we are seeing many of the larger banks moving in this direction,” said Eberle in an earnings call transcript obtained through Seeking Alpha.

He was also enthusiastic about the company’s settlement network, which he predicted will be at quarter million vendors by the year’s end. “Our aspiration is for Paymode-X to become the network by which all businesses pay each other.”

The company’s projected $51 million in revenue for the fiscal year, a 20 percent growth rate, and it is raising its earnings per share prediction from $1.05 to $1.19 for the year.

“We are right where we hope to be, well-positioned to grow and realize significant operating leverage as we add scale,” Eberle said.

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