Bottomline Technologies reported fiscal first-quarter results that showed continued traction in areas of digital banking and accounts payable (AP) technologies.
In terms of headline numbers, consolidated revenues were up 5.6 percent to $108.1 million, edging consensus by about $2 million.
Adjusted earnings per share of 30 cents were two pennies above consensus.
Supplemental materials from the company show that total subscription growth came in at 16 percent, in line with stated goals to drive subscription revenues by 15 percent to 20 percent annually. Total subscription revenues came in at $80.1 million. The bulk of that tally came through established products, to $61.7 million.
Management also noted that digital banking subscription revenue growth slightly outpaced the top line at 17 percent, where subscription revenues were $18.4 million. The company said it has $17 million of annual subscriptions in implementation and not yet live.
In earnings materials tied to the quarterly announcement, the firm said that 32 organizations selected Paymode-X to provide AP automation and that four banks selected Bottomline’s banking solutions.
In the conference call with analysts, Bottomline CEO Rob Eberle said subscription revenue is “one step closer to the $500 million targeted” in subscription revenues over the next few years. He said the most important result in the quarter was the acceleration of subscription growth. The quarter also saw bookings of more than $21 million, and management said demand was strong and broad across product offerings.
Paymode-X was adopted by a leading eCommerce company as well as several hospitals and healthcare providers, according to the CEO. Direct sales and sales through bank channel partners remained strong, Eberle said.
He said the international business was strong for business payment and messaging offerings in Europe. “Uncertainty around Brexit is not showing up in our growth in bookings,” Eberle told analysts. New opportunities are being created by open banking and PSD2.
In his own remarks, CFO Rick Booth told analysts that the subscription growth targets are achievable due to visibility in the business and backlog, and said recurring revenue was 89 percent of the top line. Digital banking saw four new customers, with one of those firms signing up for payments, cash management and cyber fraud risk management.
Eberle also said real-time payments represents a growth opportunity, as banks will want to offer that new capability.
In response to analyst questions, Eberle said treasury and commercial banking technology could also be leveraged – through software as a service – to smaller banks, adding that “smaller banks are part of our strategy going forward.”