BlackLine (BL 46.54, +1.00, +2.20%) is trading modestly higher today after reporting Q2 results last night. The company sells cloud-based software that helps companies automate and control their financial close process. In simple terms, BlackLine's goal is to transform and modernize accounting and finance operations for mid-and large-size companies. Specifically, its platform supports accounting processes such as the financial close, account reconciliation, inter-company accounting, and controls assurance.

Traditional enterprise resource planning (ERP) systems are typically not effective for processes handled outside of a company's general ledger, such as balance sheet account reconciliation, intercompany transaction accounting, and the broader financial close process. Many companies also use multiple ERPs and other financial systems without a platform to efficiently integrate them.

BL believes that it has created a new category of software that is capable of automating and streamlining accounting and finance operations in a manner that complements traditional ERP systems. Its approach modernizes what has historically been accomplished through batch processing and manual controls that are typically applied only during the month-, quarter-, or year-end financial close. BL’s platform supports distributing these tasks in the broader day-to-day real-time of a business, improving the accessibility of results and analysis derived from them; the company refers to its updated process as "continuous accounting." The company has more than 2,400 customers and more than 209,000 users across more than 150 countries.

Turning to the Q2 results, BL reported a surprise profit, as non-GAAP EPS came in at $0.01 when a small loss was expected. Prior guidance was for non-GAAP EPS of $(0.02)-0.00, so they beat that slightly. Revenue rose 32.1% year/year to $55.45 mln, above prior guidance of $53-54 mln. The Q3 guidance of non-GAAP EPS at breakeven and revenue at $57-58 mln were both in-line with market expectations.

On the call, BL talked about how it saw a strong demand environment in Q2, which helped it add 105 net new customers, bringing its total to approximately 2,400. These customers are from broad and diverse industries and range from big market companies, financial institutions, and universities to the largest global companies in the world.

Of note, over the last several months, BL has been scaling up its sales leadership for the next phase of growth, beginning with its hire of Marc Huffman as COO. Mr. Huffman joins BlackLine from NetSuite, where he was responsible for their sales and operations in EMEA. He has a deep level of experience scaling cloud accounting software sales organizations. BlackLine also recently made two new key senior sales hires.

From a broader perspective, BL says its business remains strong. Given that the company has only been public since late 2016, it's still in its early days, but the pace of digital transformation is accelerating within the industry, and BL believes that its product platform and its partner ecosystem leave the company well-positioned to help guide customers through this process.

In sum, this was another good quarter for BL. The stock began made its IPO debut in October 2016 and spent the first year in a steady ascent. The stock slumped after a disappointing report in mid-2017 and struggled for the remainder of 2017, but 2018 has seen a nice uptrend in the stock. The stock traded little in the pre-market but spiked as much as approximately 8% higher shortly after the open, suggesting that investors agree that BlackLine’s latest results were worth cheering.