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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Bottomline Technologies Reports First Quarter Fiscal Year 2022 Results

November 9, 2021 GMT

PORTSMOUTH, N.H., Nov. 09, 2021 (GLOBE NEWSWIRE) --  Bottomline Technologies (Nasdaq: EPAY), a leading provider of financial technology that makes complex business payments simple, smart and secure, today reported financial results for the first quarter ended September 30, 2021.

“We continued to drive strong subscription revenue growth during the first quarter,” said Rob Eberle, CEO.   “We are prioritizing subscription revenue growth and new product offerings and executed well on those key objectives during the quarter.   Our strategic plan remains focused on increasing our TAM and competitive advantage through an ever-broader set of solutions that target the large and growing markets where we have a leadership position. We are confident in our fiscal 2022 plan and our goal to drive 15 to 20 percent growth in subscription revenue on a sustainable basis. We are equally confident that continued subscription growth and execution against our strategic plan will reward shareholders.”

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Subscription revenue was $103.5 million for the first quarter, an increase of 15% as compared to the first quarter of last year.   Subscription revenue was 84% of total revenues, up 4 percentage points from 80% in the prior year.  

Total revenues in the first quarter were $123.6 million, an increase of 10% as compared to the first quarter of last year. GAAP net loss for the first quarter was $(4.9) million, which was (4)% of overall revenue. GAAP net loss per share was $(0.11) for the first quarter.

Adjusted EBITDA for the first quarter was $23.1 million, which was 19% of overall revenue. Core earnings per share was $0.22 for the first quarter.   Adjusted EBITDA and core earnings per share are calculated as discussed in the “Non-GAAP Financial Measures” section that follows.

“We had a strong start to the 2022 fiscal year in the first quarter.” said Bruce Bowden, CFO.   “Our decision to invest in continued innovation and intensified go-to-market efforts is driving pronounced growth, especially in our primary payment platforms.   We are confident that we will deliver on our full year financial objectives.”

First Quarter Customer Highlights

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  • 24 organizations selected Paymode-X to automate their AP processes, with clients spanning a wide variety of industries such as healthcare, higher education, property management and public administration.

  • A regional credit union selected Bottomline’s banking solutions platforms to help it compete and grow its corporate and business banking franchises through Bottomline’s intelligent engagement solutions.   A $22B bank and long-standing customer expanded its relationship with Bottomline to service its small business customers with a Small Business package of solutions to significantly enhance the customer experience for their end users.

  • 8 new customers chose Bottomline’s legal spend management solutions to automate, manage and control their legal spend.

First Quarter Strategic Corporate Highlights

  • AiteNovartica placed Bottomline’s Digital Banking IQ in the best-in-class position in the Aite Matrix: Leading U.S. Cash Management Vendors.    This is the third consecutive report in which Bottomline’s platform has received the best-in-class in this important evaluation.

  • Celent cited Bottomline’s Digital Banking IQ Payments and Cash Management solution as part of its XCelent Awards for 2021 highlighting user interface, use of behavioral insights and artificial intelligence, real time payment fraud/risk protection and flexible integration as among Digital Banking IQ’s stand out features.

  • The Open Banking Expo 2021 Awards honored Bottomline with the Best-Banking-as-a-Service Solution Award for its industry-leading Confirmation of Payee solution, which offers enhanced bank account verification services to support UK banks’ efforts to detect and prevent fraudulent activity.

  • Quadrant Knowledge Solutions named Bottomline as a technology leader for insider risk management.   Quadrant highlighted the company’s Insider and Employee Fraud solution in the recently-released Spark Matrix™: Insider Risk Management 2021 report.

  • Bottomline launched its real-time Watchlist Screening tool to help financial institutions and businesses reduce payments-related fraud and financial crimes.   The tool works to screen sanctions lists and provide alerts to users, helping to ensure compliance with international regulatory bodies.

  • Bottomline recently appointed Mike Curran, Phil Hilal and Larry Klane to its board of directors, expanding the board to eleven directors.  

  • Following the quarter close, Bottomline acquired Bora Payment Systems, which has developed automated payables technology for straight-through processing (STP) to streamline credit card processing. The STP technology fully automates B2B virtual card payment acceptance, expanding the features and capabilities of the Paymode-X network and driving customer and channel partner value by reducing the cost and effort to execute virtual card transactions.

Bottomline will host a conference call today, November 9, 2021, at 5:00pm ET, to discuss its first quarter fiscal year 2022 results. The live call can be accessed at (877) 407-3980 (U.S.) or (201) 689-8475 (International), or through the webcast link located on Bottomline’s investor relations site at https://investors.bottomline.com.

About Bottomline Technologies
Bottomline Technologies (Nasdaq: EPAY) makes complex business payments simple, smart, and secure. Corporations and banks rely on Bottomline for domestic and international payments, efficient cash management, automated workflows for payment processing and bill review, and fraud detection, behavioral analytics and regulatory compliance solutions. Thousands of corporations around the world benefit from Bottomline solutions. Headquartered in Portsmouth, NH, Bottomline delights customers through offices across the U.S., Europe, and Asia-Pacific. For more information visit www.bottomline.com.

In connection with this earnings release and our associated conference call, we will be posting additional material financial information (such as financial results, non-GAAP financial projections and non-GAAP to GAAP reconciliations) within the “Investors” section of our website at www.bottomline.com/us/about/investors.

Cautionary Language
This press release and our responses to questions on our conference call discussing our quarterly results may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements reflecting our expectations about our ability to execute on our strategic plans, achieve future growth and profitability, achieve financial goals, expand margins and increase shareholder value. Any statements that are not statements of historical fact (including but not limited to statements containing the words “likely,” “should,” “may,” “believes,” “plans,” “anticipates,” “expects,” “forecasts,” “look forward,” “opportunities,” “confident,” “trends,” “future,” “estimates,” “targeted,” “on track,” and similar expressions) should be considered to be forward-looking statements. Statements about the effects of the current and near-term market and macroeconomic environment on Bottomline, including on its business, operations, financial performance and prospects, may constitute forward-looking statements, and are based on assumptions that involve risks and uncertainties that are subject to change based on various important factors (some of which are beyond Bottomline’s control). Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors including, among others, competition, market demand, technological change, strategic relationships, recent acquisitions, international operations and general economic conditions, including the potential effects of the COVID-19 pandemic on any of the foregoing. For additional discussion of factors that could impact Bottomline Technologies’ operational and financial results, refer to our Form 10-K for the fiscal year ended June 30, 2021 and the subsequently filed Form 10-Q’s and Form 8-K’s or amendments thereto. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We do not assume any obligation to update any forward-looking statements to reflect events or circumstances after today’s date or to reflect the occurrence of unanticipated events.

Contact:
Investor Relations
Amy Brownrigg
Bottomline
(603) 501-4899
Investors@bottomline.com

Corporate Communications
John Stevens
Bottomline
(603) 501-4840
pr@bottomline.com

BTInvestorPR

Non-GAAP Financial Measures

We have presented supplemental non-GAAP financial measures as part of this earnings release. We believe that these supplemental non-GAAP financial measures are useful to investors because they allow for an evaluation of the company with a focus on the performance of its core operations, including more meaningful comparisons of financial results to historical periods and to the financial results of less acquisitive peer and competitor companies. Core net income, core earnings per share, constant currency information Adjusted EBITDA and Adjusted EBITDA as a percent of revenue are all non-GAAP financial measures.

Core net income and core earnings per share exclude certain items, specifically amortization of acquisition related intangible assets, stock-based compensation, acquisition and integration-related expenses, restructuring related costs, excess depreciation expense associated with restructuring events, third party professional fees related to shareholder engagement initiatives, minimum pension liability adjustments, amortization of debt issuance costs and other costs and other non-core or nonrecurring benefits or expenses that may arise from time to time.

Acquisition and integration-related expenses include legal and professional fees and other direct transaction costs associated with business and asset acquisitions, costs associated with integrating acquired businesses, including costs for transitional employees or services and integration related professional services costs and other incremental charges we incur as a direct result of acquisition and integration efforts.

Periodically, such as in periods that include significant foreign currency volatility, we may present certain metrics on a “constant currency” basis, to show the impact of period to period results normalized for the impact of foreign currency rate changes. We calculate constant currency information by translating prior period financial results using current period foreign exchange rates.

Adjusted EBITDA and Adjusted EBITDA as a percent of revenue represent our GAAP net income or loss and GAAP net income or loss as a percent of revenue, respectively, adjusted for charges related to interest expense, income taxes, depreciation and amortization and other charges as noted in the reconciliation that follows.

Our executive management team uses these same non-GAAP financial measures internally to assess the ongoing performance of the company. The same non-GAAP information is used for corporate planning purposes, including the preparation of operating budgets and in communications with our board of directors with respect to our core financial performance. Since this information is not a GAAP measurement of financial performance, there are material limitations to its usefulness on a stand-alone basis, including the lack of comparability of this presentation to the GAAP financial results of other companies. This non-GAAP financial information should not be considered in isolation from, or as a substitute for, our financial results presented in accordance with GAAP.

Non-GAAP Financial Measures (Continued)

Reconciliation of Core Net Income

A reconciliation of core net income to GAAP net (loss) income for the three months ended September 30, 2021 and 2020 is as follows:

 Three Months Ended September 30,
 2021 2020
 (in thousands)
GAAP net (loss) income$(4,907)  $391   
Amortization of acquisition-related intangible assets5,071    5,029   
Stock-based compensation plan expense13,912    9,973   
Acquisition and integration-related expenses201    245   
Restructuring expense386    70   
Excess depreciation associated with restructuring events—    —   
Minimum pension liability adjustments(317)  (25) 
Shareholder engagement fees947    —   
Amortization of debt issuance costs103    103   
Global ERP system implementation and other costs—    —   
Other non-core expense27    —   
Non-recurring tax benefit—    —   
Tax effects on non-GAAP income(5,814)  (2,422) 
Core net income$9,609    $13,364   

Reconciliation of Diluted Core Earnings per Share

A reconciliation of our diluted core earnings per share to our GAAP diluted net (loss) income per share for the three months ended September 30, 2021 and 2020 is as follows:

 Three Months Ended September 30,
 2021 2020
GAAP diluted net (loss) income per share$(0.11)  $0.01   
Plus:   
Amortization of acquisition-related intangible assets0.12    0.12   
Stock-based compensation plan expense0.32    0.23   
Acquisition and integration-related expenses—    0.01   
Restructuring expense0.01    —   
Minimum pension liability adjustments(0.01)  —   
Shareholder engagement fees0.02    —   
Other non-core expense (benefit)—    —   
Tax effects on non-GAAP income(0.13)  (0.06) 
Diluted core earnings per share$0.22    $0.31   

Non-GAAP Financial Measures (Continued)

A reconciliation of our non-GAAP weighted average shares used in computing diluted core earnings per share to our GAAP weighted average shares used in computing basic and diluted net (loss) income per share for the three months ended September 30, 2021 and 2020 is as follows:

 Three Months Ended September 30,
 2021 2020
 (in thousands)
Numerator:   
Core net income$9,609   $13,364  
Denominator:   
Weighted average shares used in computing basic net (loss) income per share for GAAP43,273   42,457  
Impact of dilutive securities (stock options, restricted stock awards and employee stock purchase plan) (1)29   314  
Weighted average shares used in computing diluted core earnings per share43,302   42,771  
    

(1)         These securities are dilutive on a GAAP basis in periods where we report GAAP net income. These securities are anti-dilutive on a GAAP basis in periods where we report GAAP net loss.

Reconciliation of Adjusted EBITDA
A reconciliation of our adjusted EBITDA to our GAAP net (loss) income for the three months ended September 30, 2021 and 2020 is as follows:

 Three Months Ended September 30,
 2021 2020
 (in thousands)
GAAP net (loss) income$(4,907)  $391  
Adjustments:   
Other expense and pension adjustments1,008    1,026  
Income tax (benefit) provision(2,805)  1,764  
Depreciation and amortization9,195    7,699  
Amortization of acquisition-related intangible assets5,071    5,029  
Stock-based compensation plan expense13,912    9,973  
Shareholder engagement fees947    —  
Acquisition and integration-related expenses201    245  
Restructuring expense386    70  
Other non-core expense110    48  
Adjusted EBITDA$23,118    $26,245  

Adjusted EBITDA as a percent of Revenue

A reconciliation of adjusted EBITDA as a percent of revenue to GAAP net loss as a percent of revenue for the three months ended September 30, 2021 and 2020 is as follows:

 Three Months Ended September 30,
 2021 2020
GAAP net (loss) income as a percent of revenue(4 %) %
Adjustments:   
Other expense and pension adjustments% %
Income tax (benefit) provision(2 %) %
Depreciation and amortization% %
Amortization of acquisition-related intangible assets% %
Stock-based compensation plan expense11 % %
Shareholder engagement fees% %
Adjusted EBITDA as a percent of revenue19 % 23 %
    
Bottomline Technologies
Unaudited Condensed Consolidated Statement of Operations
(in thousands, except per share amounts)
    
 Three Months Ended September 30,
 2021 2020
Revenues:   
Subscriptions$103,496    $90,384   
Software licenses927    977   
Service and maintenance18,708    20,564   
Other474    440   
Total revenues123,605    112,365   
Cost of revenues:   
Subscriptions42,693    35,218   
Software licenses81    90   
Service and maintenance9,252    10,916   
Other295    309   
Total cost of revenues52,321    46,533   
Gross profit71,284    65,832   
Operating expenses:   
Sales and marketing33,814    25,743   
Product development and engineering21,465    18,499   
General and administrative17,749    13,626   
Amortization of acquisition-related intangible assets5,071    5,029   
Total operating expenses78,099    62,897   
(Loss) income from operations(6,815)  2,935   
Other expense, net(897)  (780) 
(Loss) income before income taxes(7,712)  2,155   
Income tax benefit (provision)2,805    (1,764) 
Net (loss) income$(4,907)  $391   
Net (loss) income per share:   
Basic$(0.11)  $0.01   
Diluted$(0.11)  $0.01   
Shares used in computing net (loss) income per share:   
Basic43,273    42,457   
Diluted43,273    42,771   
Bottomline Technologies
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
 September 30, June 30,
 2021 2021
ASSETS   
Current assets:   
Cash, cash equivalents and marketable securities$125,385    $144,148   
Cash and cash equivalents, held for customers7,431    9,836   
Accounts receivable67,115    72,978   
Other current assets37,901    34,653   
Total current assets237,832    261,615   
Property and equipment, net66,293    68,471   
Operating right-of-use assets, net28,732    27,570   
Goodwill and intangible assets, net406,621    409,389   
Other assets48,549    48,683   
Total assets$788,027    $815,728   
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
Accounts payable$9,753    $11,428   
Accrued expenses and other current liabilities54,470    45,925   
Customer account liabilities7,431    9,836   
Deferred revenue75,876    88,679   
Total current liabilities147,530    155,868   
Borrowings under credit facility130,000    130,000   
Deferred revenue, non-current11,459    12,559   
Operating lease liabilities, non-current27,996    26,629   
Deferred income taxes9,702    14,574   
Other liabilities20,601    19,864   
Total liabilities347,288    359,494   
Stockholders' equity   
Common stock49    49   
Additional paid-in-capital833,563    819,392   
Accumulated other comprehensive loss(21,376)  (16,081) 
Treasury stock(169,746)  (150,282) 
Accumulated deficit(201,751)  (196,844) 
Total stockholders' equity440,739    456,234   
Total liabilities and stockholders' equity$788,027    $815,728