BlackLine (BL) Q1 2025 Earnings Call May 06, 2025 05:00 PM ET Company Participants Matt Humphries - VP-IROwen Ryan - Co-CEO & Chairman of the BoardTherese Tucker - Founder and Co-Chief Executive OfficerPatrick Villanova - CFOKoji Ikeda - Director - Enterprise Software Equity ResearchPinjalim Bora - Executive Director, Equity ResearchRyan Krieger - VP - Software Equity ResearchDominique Manansala - Equity Research AssociateAdam Hotchkiss - VP - Emerging Software Equity ResearchWilliam Jellison - Associate VP ...

Core Viewpoint - The current market volatility presents an opportunity for investors to initiate positions in high-quality stocks that have been undervalued due to recent market conditions [1][2]. Group 1: ServiceNow - ServiceNow's shares have decreased by nearly 9.6% in 2025, creating a potential entry point for investors as the company is well-positioned to benefit from the AI transformation in enterprise software [4][5]. - The company reported a 20% year-over-year increase in subscription revenue and a 22% rise in current remaining performance obligations (cRPO), indicating strong demand for its solutions [5]. - ServiceNow's AI offerings have seen significant traction, with Pro Plus deals quadrupling year over year, and the average annual contract value increasing by one-third quarter over quarter [6]. - The stock is trading at a forward P/E of 57.8, but its resilient business model and strong cash position of $10.9 billion make it an attractive buy [7]. Group 2: PayPal - PayPal's stock has fallen nearly 30% from its December 2024 high, presenting a favorable entry point as the company transitions from a payments platform to a comprehensive commerce platform [8]. - The company's revenue grew by 1% year over year to $7.8 billion, while operating income surged by 31% to $1.5 billion, and GAAP EPS increased by 56% to $1.29 [9]. - PayPal is experiencing strong momentum in various business areas, including branded checkouts and its Venmo service, and is actively entering the AI-powered commerce space [10]. - With a solid balance sheet showing $15.8 billion in cash and a low forward P/E of 13.1 compared to its five-year average of 30.6, the stock appears to be a compelling investment [11]. Group 3: Arista Networks - Arista Networks' stock has declined over 31% since January 2025, yet the company remains attractive due to the rising demand for high-performance networking solutions for cloud and AI applications [12]. - The company holds a 45% market share in high-speed Ethernet switch solutions for data centers and offers AI-powered networking capabilities [13]. - Major clients include Microsoft, Meta Platforms, Apple, and Oracle, which collectively account for 48% of Arista's revenue, providing a strong foundation despite economic uncertainties [14]. - The stock is trading at a forward earnings ratio of 30.9, lower than its five-year average of 39.1, suggesting it is a good investment opportunity [15].

Summary of ServiceNow (NOW) 2025 Investor Day Company Overview - **Company**: ServiceNow (NOW) - **Event**: 2025 Investor Day - **Date**: May 5, 2025 - **Location**: Las Vegas Core Industry Insights - **Industry**: Enterprise Software - **Focus**: ServiceNow aims to be the defining enterprise software company of the 21st century, referred to as "Desco 21C" [6][33] Key Points and Arguments 1. **Company Growth and Positioning**: - ServiceNow is entering a period of strength, with significant scaling and a strong brand presence [5][11] - The company has a no layoff pledge, which has helped maintain talent during macroeconomic disruptions [12] 2. **Financial Performance**: - ServiceNow has consistently focused on profitability and leverage, unlike many competitors who had to adapt post-pandemic [12] - The company has a strong free cash flow margin, which is appreciated by shareholders [13] 3. **Market Position and Competitive Advantage**: - ServiceNow is recognized as the "AI operating system of the enterprise" by industry leaders [24] - The company has expanded its Total Addressable Market (TAM) significantly with innovations like RaptorDB and workflow data fabric [15][16] 4. **AI Integration and Innovation**: - ServiceNow is leveraging agentic AI to transform enterprise operations, emphasizing the importance of speed and integration [19][21] - The company has introduced new capabilities such as AI Control Tower, AI Agent Fabric, and AI Agent Studio to enhance AI agent collaboration [52][53] 5. **Customer Success Stories**: - Notable clients include AstraZeneca and Siemens, showcasing significant operational efficiencies achieved through ServiceNow's platform [49][50] - Over 85% of Fortune 500 companies utilize ServiceNow, indicating strong market penetration [48] 6. **Future Growth and Projections**: - ServiceNow aims to reach $30 billion in revenue, with several products projected to surpass $1 billion in Annual Contract Value (ACV) by 2026 [47][48] - The company is positioned to double its product offerings exceeding $1 billion in ACV by 2028 [47] Additional Important Insights - **Cultural and Operational Strength**: - ServiceNow emphasizes a culture of trust and transparency, which has been pivotal in building relationships with the financial community [4][8] - The company has a strong focus on innovation, with over 6,000 innovations delivered in the past year alone [40] - **Technological Advancements**: - RaptorDB is highlighted as the world's fastest database, significantly enhancing performance metrics for clients [29][90] - The Workflow Data Fabric allows seamless integration of data across various systems, enhancing operational efficiency [93] - **Market Trends and Challenges**: - The rise of AI presents both opportunities and challenges, with many enterprises struggling with data readiness for AI applications [88] - ServiceNow's solutions aim to address fragmentation and improve AI readiness across organizations [39][89] - **Strategic Partnerships**: - Collaborations with major tech companies like Microsoft, Google, and AWS are crucial for expanding ServiceNow's capabilities and market reach [53][109] This summary encapsulates the key insights and strategic directions discussed during the ServiceNow 2025 Investor Day, highlighting the company's growth trajectory, market positioning, and innovative approaches to enterprise software solutions.

Core Viewpoint - Workiva has developed a software platform that integrates data for organizations, enabling efficient reporting for executives, investors, and regulators, and has reported strong financial results for Q1 2025, exceeding expectations on both revenue and earnings [1][8][11]. Financial Performance - Workiva generated $206 million in revenue for Q1 2025, marking a 17% increase year-over-year and surpassing management's guidance of $205 million [8]. - The company reported a GAAP loss of $0.38 per share, which was better than the forecasted loss of $0.45 per share, while achieving a non-GAAP profit of $0.14 per share, exceeding the expected $0.07 [11][12]. - Workiva's net revenue retention rate decreased to 110% from 111% year-over-year, indicating slower spending growth from existing customers [13]. Customer Growth and Market Position - Workiva had 6,385 customers at the end of Q1 2025, reflecting a modest 5% year-over-year increase, with significant growth in high-spending customer cohorts [9]. - The company’s addressable market is valued at $35 billion, suggesting substantial growth potential based on its current revenue of $206 million [19]. Analyst Sentiment and Stock Valuation - Analysts are overwhelmingly bullish on Workiva, with an average price target of $102, indicating a potential upside of 54% over the next 12 to 18 months [16]. - The stock is currently 55% below its 2021 high, with a price-to-sales (P/S) ratio of 4.9, close to its lowest level in five years and a 49% discount to its average P/S ratio of 9.6 during that period [2][17]. Strategic Outlook - Workiva's management plans to continue investing in growth, supported by a solid balance sheet with $767 million in cash and equivalents [14][15]. - Despite a forecast of steady revenue growth at 17% for Q2, there are concerns regarding worsening bottom-line results [14].

OneStream Splash and OneStream Wave unite for an immersive event packed with AI-driven innovation, technical collaboration and success stories from over 50 OneStream customers to transform finance BIRMINGHAM, Mich., May 1, 2025 /PRNewswire/ -- OneStream, the leading enterprise Finance management platform that modernizes the Office of the CFO by unifying core financial and operational functions – including financial close, consolidation, reporting, planning and forecasting, today announces OneStream Splash, ...

C3.ai (AI) and Palantir Technologies (PLTR) are two prominent players in the fast-growing enterprise AI software market. C3.ai provides a broad platform of AI applications and tools for businesses, while Palantir is known for its data analytics platforms used by government agencies and large companies. Both companies aim to help organizations harness big data and artificial intelligence to improve operations. They share similarities as high-growth “picks-and-shovels” plays on the AI trend, and each has seen ...

编辑部 发自 凹非寺 量子位 | 公众号 QbitAI 大模型技术加速向产业渗透，如何直击业务痛点、带来真实增效？ "平台＋应用＋服务"是企业大模型落地的最佳路径。 在第三届AIGC产业大会上， 中关村科金总裁喻友平 分享如上方法论。 即使看似简单的需求，也需要经历需求拆解、数据调优与流程重构的闭环。在这个过程中，企服厂商需要提供好服务。 为了完整体现喻友平的思考，在不改变原意的基础上，量子位对演讲内容进行了编辑整理，希望能给你带来更多启发。 中国AIGC产业峰会是由量子位主办的AI领域前沿峰会，20余位产业代表与会讨论。线下参会观众超千人，线上直播观众320万+，累计曝光 2000万+。 话题要点 认知型AI亦遵循"C端先行、B端深化" 大模型技术正从消费端向产业端加速渗透； 认知性AI同样遵循"C端先行、B端深化"的路径； 企业需要端到端的解决方案而非孤立技术模块； 算法开源趋势使得数据主权愈加重要； 企业大模型落地最佳路径就是做好"平台+应用+服务"。 各位嘉宾下午好，非常荣幸受邀参与量子位大会的分享。此前各位专家已就前沿技术展开深度探讨，我的主题则聚焦于 大模型在企业服务领 域的落地实践——如何通过技 ...

Financial Data and Key Metrics Changes - Current cloud backlog increased by 29% to €18.2 billion in Q1 [5][37] - Quarterly cloud revenue grew by 26%, approaching the €5 billion mark [5][37] - Total revenue rose by 11% to €9 billion [42] - Operating profit surged by 58% to €2.5 billion, significantly exceeding the guidance for the year [41][45] - Cloud gross margin improved by 2.6 percentage points to 75% [6][40] Business Line Data and Key Metrics Changes - Cloud ERP suite revenue maintained high growth momentum with a 33% increase in Q1, accounting for 85% of total cloud revenue [37] - Software licenses decreased by only 10%, indicating resilience despite being a smaller quarter [38] - Approximately half of cloud order entries included AI use cases, reflecting strong demand for AI integration [13] Market Data and Key Metrics Changes - Strong cloud revenue performance noted in APJ and EMEA regions, with Brazil, Germany, and India showing outstanding results [40] - The Americas region also demonstrated robust performance, with notable strength in Canada and the US [40] Company Strategy and Development Direction - Company emphasizes a suite-first, AI-first approach to expand its offerings [36] - Focus on product innovation, particularly with the launch of Business Data Cloud, which aims to unify and govern business data [22][23] - Continued investment in AI and cloud solutions to enhance customer productivity and reduce implementation costs [30][31] Management's Comments on Operating Environment and Future Outlook - Management expresses confidence in the company's resilience despite high market uncertainty [9][45] - The pipeline for the year remains solid, with no significant deterioration in conversion rates observed [56] - Management acknowledges potential risks from geopolitical tensions and trade disputes but maintains a positive outlook for long-term growth [44][120] Other Important Information - The company plans to provide deeper insights into its growth strategy at the upcoming Sapphire event in May [34][47] - The transformation program concluded in 2024, positioning the company for focused investments in key areas [36] Q&A Session Summary Question: Current trading and confidence in cloud revenue guidance - Management noted strong customer engagement and resilience in supply chains, which supports confidence in cloud revenue guidance despite macro uncertainties [52][56] Question: Deceleration in cloud revenue growth - Management explained that the deceleration was influenced by the timing of cloud deals and expected a rebound in Q2 as these deals ramp up [58][62] Question: Current cloud backlog performance - Current cloud backlog performance was in line with expectations, with no significant changes in customer dynamics despite tariff uncertainties [68][71] Question: Product innovation and Business Data Cloud differentiation - Management clarified that Business Data Cloud offers a more comprehensive solution than the previous SAP Datasphere, enabling better data integration and AI capabilities [78][83] Question: Impact of tariffs on business and cloud margins - Management indicated that while tariffs could impact hardware costs, the company's multi-cloud strategy provides price security and mitigates risks [130][132]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $263 million, up 3% year-over-year [36] - Cloud revenue increased 21% to $94 million, while services revenue declined 8% to $121 million [37] - RPO ended the quarter at approximately $1.9 billion, up 25% year-over-year and 6% sequentially [38] - Adjusted operating profit was $91 million with an adjusted operating margin of 34.7%, up over 340 basis points year-over-year [40] - Adjusted earnings per share (EPS) for Q1 was $1.19, up 16%, while GAAP EPS was 85 cents, down 1% [41] Business Line Data and Key Metrics Changes - The company experienced a 25% year-over-year increase in RPOs, driven by strong demand for mission-critical solutions [22] - Approximately 50% of new cloud bookings in Q1 were generated from net new logos, indicating strong demand for products [71] - Services team completed over 100 go-lives for customers in Q1, showcasing operational effectiveness [25] Market Data and Key Metrics Changes - The addressable market is forecasted to grow at a double-digit CAGR for the next several years, indicating robust market potential [15] - Competitive win rates remained consistent at about 70%, reflecting strong market positioning [24] - The company has established healthy footprints across diverse sectors including retail, grocery, life sciences, and technology [23] Company Strategy and Development Direction - The company is focused on organic innovation and capital allocation strategy to expand its addressable market [14] - Investment in sales and marketing is prioritized to drive growth and capitalize on new product offerings [64] - The launch of new products like Enterprise Promise and Fulfill aims to optimize B2B order fulfillment, addressing evolving customer needs [26] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding near-term services revenue growth due to macroeconomic uncertainties [21] - The company remains optimistic about its position in the market and long-term growth opportunities despite current challenges [20] - Management reiterated full-year guidance for RPO and total revenue, reflecting confidence in business fundamentals [45] Other Important Information - The company was named Google’s Cloud Business Applications Partner of the Year for supply chain and logistics, highlighting its innovation in the Google Cloud ecosystem [18] - The company ended the quarter with $206 million in cash and zero debt, indicating a strong balance sheet [42] Q&A Session Summary Question: Insights on cloud bookings and RPO dynamics - Management indicated strong pipeline in Q2 and confidence in guidance despite macro uncertainties [59][60] Question: Growth investments and monetization of products - Management plans to invest in sales specialists to drive growth and maintain high win rates [64] Question: Linear progression of bookings and sales activity - Management noted a balanced product portfolio and strong demand across verticals, with high expectations for Q2 [68][71] Question: Resilience of cloud bookings drivers - Management stated that no particular segment is more resilient, but all channels remain important for growth [78][80] Question: Visibility on multi-year ramps and growth trajectory - Management confirmed strong visibility into contract durations and ramp processes, supporting confidence in growth [95][97] Question: FX impact on guidance - Management indicated that FX swings represent less than 1% impact on revenue guidance [104][105] Question: Strength of large deals in the pipeline - Management reported favorable conditions in the pipeline, with confidence in closure rates compared to last year [111][112]

North America Equity Research April 11, 2025 Enterprise Software – SMID Cap Pinjalim Bora, CFA AC (+1-415) 315-6764 pinjalim.bora@jpmchase.com J.P. Morgan Securities LLC Noah R Herman (+1-212) 622-5415 noah.r.herman@jpmchase.com J.P. Morgan Securities LLC Jaiden Patel (+1-646) 342-6427 jaiden.patel@jpmchase.com J.P. Morgan Securities LLC The authors wish to thank Rachit Agrawal, of the J.P. Morgan Global Research Center, for contributions to this report See the end pages of this presentation for analyst cer ...