Blue Prism shares plunge even as revenue improves, losses narrow

Blue Prism shares take an unexpected drubbing even as revenue improved

Blue Prism Group shares were through the floor on Thursday morning, even after it reported a 46% increase in revenues to £141.4m for the 2020 financial year.

The AIM-traded firm said monthly recurring revenue improved to £12.8m for the year ended 31 October, up from £10.6m in 2019, with £1.1m of that coming from Blue Prism Cloud, compared to £0.7m a year earlier.

At the end of the year, the company had a total of 2,031 customers, up from 1,677 a year earlier, with the firm reporting that 39% of its opening customer base had been upsold for more licences during the year.

It said “significant” long-term commitments were made during the period, with its ‘remaining performance obligation’, which represents future revenues under contract but not yet recognized as revenue, totaling £312m.

Blue Prism said it was Increasing its direct investment in its products and research and development, with additional resources accelerating its development, as it launched eight product updates including ‘Blue Prism Accelerators’ for SAP ERP, ‘Interact’, ‘Service Assist’ and ‘Decipher’.

Its board also said it had further broadened its technology partner ecosystem during the year, reporting 250,000 registered users, which was an increase of 97% on the prior year.

There was a 147% increase in Blue Prism Cloud bookings, which the directors described as “the market leader” with a 20% share of the RPA software-as-a-service (SaaS) market based on IDC market sizing.

Blue Prism expects revenues to grow by more than a quarter in 2021. But sales have rarely been an issue for the company. Our concerns lie elsewhere: while R&D spend has improved, it still needs to catch up with its deep-pocketed peers across the pond. Sales and marketing costs continue to make up almost half of the company’s total operating expenses, with a massive hiring round in 2019 bulking up the department to almost three times the size of the product team. Management still has some way to go to address concerns about its ability to protect its market share against bigger US competitors in the long run. Sell. (source)

Read more here: Blue Prism shares plunge even as revenue improves, losses narrow

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