Bottomline Technologies posted fiscal first quarter results that showed subscription and transaction revenue growth of double digits as management pointed to opportunities and gains in the B2B payments space.
The company said in earnings details reported Thursday that it saw growth of 20 percent in its established products segment, where transaction and subscription revenues were $54.1 million. Total revenues for the segment were $80.2 million.
Banking Solutions, the company said, saw a one percent decline in growth rates, and transaction and subscription revenues were $15.7 million. Management said on the call that there was an additional $16 million of annual subscriptions currently being implemented and not yet live — representing a large backlog that management said would translate to double digit growth rates in the current fiscal year.
All told then, subscription and transaction revenues — primarily across the company’s cloud platforms — were $69.8 million for the period, and up 15 percent year on year.
Management noted that notable activity in the quarter came as 26 institutions selected Paymode-X, with intent to streamline payments processes and boost security.
In remarks on the conference call with analysts, CEO Robert Eberle said that the company remains on track to meet fiscal year subscription and transaction revenues of $300 million, a company goal.
Turning back to the quarter, revenues of about $102.4 million were better than the Street estimates by $2 million.
“We are in the very early innings of the digital transformation of business payments,” said the CEO during the conference call. “It is a huge opportunity.” He said that B2B payments volume, overall, is estimated at over $20 trillion. He noted, too, that a majority of businesses still make a majority of their payments by paper check.
He also called out the recently expanded relationship with Visa, where the two are working to extend Visa’s B2B Connect as a payment option for large-ticket, cross-border transactions. “Visa is able to leverage our existing bank relationships” in order to facilitate better visibility on FX rates and settlements in a secure manner, said the executive.
In reference to the $16 million in pipeline activity as mentioned above, management stated on the call that there are seven banks that are going live in FY 2019 and where activity is weighted toward Q3 and Q4. Legacy Intuit customer attrition, said CFO Rick Booth, had impact results in the first half of the year, “but overall we expect as we exit 2019 and get into fiscal 2020 … that digital banking will be growing in the 15 percent to 20 percent that we expect from all of our subscription and transaction [business].”
CEO Eberle said on the call that “by year’s end, we’ll be a $300+ million SaaS company.”