Billtrust, a B2B accounts receivable automation and integrated payments company, reported Q2 results attesting to the momentum of the accelerating trend toward automation and digitization in the B2B payments space.
“With a combination of 35.4% year-over-year software and payments segment revenue growth and our strongest bookings quarter ever, we are firing on all cylinders at this point,” said Flint Lane, founder and CEO of Billtrust, in a release. “Businesses continue to recognize the value of adopting our accounts receivable and integrated payments solutions to create efficiencies, reduce complexity and accelerate cash flow.”
Addressing CFO pain points
On the earnings call, Lane added, “Despite the reported macroeconomic and market challenges, the favorable secular trends around digitization and B2B payments are strong. We believe CFOs are naturally more aggressive in seeking out ways to increase efficiencies, reduce complexity and accelerate cash flow, all challenges that are solved by our software and payment solutions.”
According to Lane, recent customer conferences yielded insights about what’s top of mind with Billtrust’s customers. “We discussed actionable ideas across the whole AR spectrum, including best practices of AR automation, trends shaping the future of the CFO office and the impact of virtual cards on our customers day-to-day operations.”
Lane cited customer use cases that illustrated how Billtrust solutions help CFOs overcome “AP portal fatigue” by eliminating manual invoice entry through digital delivery, avoiding the labor and associated expense.
On the same earnings call, CFO Mark Shifke added, “Certainly there is increased focus on automating the office of the CFO. The CFO is under a lot of pressure related to costs and we have a variety of solutions that help there. We’re in an environment where CFOs like myself are looking for opportunities for greater efficiency, and lower costs.”
Lane outlined the cost savings Billtrust solutions seek to deliver for its set fee: “These aren’t soft savings — these are real savings in postage and materials and head count. In a rising interest rate environment, getting your money faster is real money that you don’t have to take on the credit line or something like that.”
Strong results
Total revenue increased 22.5% year over year to $49.3 million, versus $40.2 million for the same period in 2021.
Total Payment Volume (“TPV”) increased by 40% year over year to $26.2 billion in Q2 2022. This figure is up from $18.8 billion for the same period in 2021.
Revenue came in at just under 2%, and the company adjusted revenue guidance slightly, proportionate to a reported $1 million worth of currency headwinds.
Portal, Platform, and Network Update
The firm reported launching a new version of its Online Billing portal that includes surcharging, which makes it easier for customers to accept credit cards by significantly reducing their cost of card acceptance. According to Lane, the new portal “makes it incredibly easy for U.S. suppliers to accept credit cards without directly incurring cards fees through surcharging. Roughly half of our online billing customers don’t accept credit cards today, and we believe this is a big opportunity. We have some customers live already.”
Direct revenue from card payments on Billtrust’s electronic payment processing platforms grew 57% year over year.
The company’s Business Payments Network (BPN) TPV grew 71% year over year, resulting from the firm’s own sales and marketing as well as incremental revenue from recently announced distribution deals with Coupa (referral partner and BPN provider) and Procede Software (partner for invoicing, digital payments, and BPN).
On the earnings call, Lane emphasized that BPN is an open network. Partners include Visa, J.P. Morgan Chase, Cooper, American Express and over 30 others.
He also highlighted the utility of the virtual lock box: “We believe that digital lock box will be a must-have for any AR department much like online billing sites. The VPN digital lock box automates the receipts of credit card and wire transfer payments. It also provides for delivery of invoices to 150 different AP portals.”
What the future holds
As to future growth, Lane made it clear that while organic growth is strong, strategic acquisitions are an integral part of Billtrust’s plans. “We’re looking at acquisitions. They’re big part of our strategy long-term; as you know we’ve done two acquisitions in the last eight or nine months, and those are going well,” he said. Because private valuations and their public comps have started to come down, the company is considering more acquisitions.
“Averaging one to two deals a year is something that we want to focus on — but we want to do the right deals, not just doing deals for the sake of doing deals,” explained Lane. “We continue to look for things in and around the office of the CFO that we think would be good to cross-sell into our existing base, and there’s plenty of targets out there.” The firm might choose to develop geographies where it’s not currently represented. It could also develop solutions for sales order automation or merchant acquiring, both of which Lane believes would benefit the Business Payments Network.
Lane said the company is confident about results if the future holds a recession in store. “We’ve experienced these kinds of tough financial times, tough macro times, and generally we do really well. Tough financial times actually help us, and we’re bit countercyclical that way.”
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