Robotic process automation (RPA) technology developer Blue Prism (PRSM:AIM) has upped its full year 2020 performance guidance despite losses tripling in the 12 months to 31 October 2019 as costs and investment soared.

Yet investors have homed in on an emerging upselling and client scaling message that is beginning to put meat on the bones of a genuine shift towards a profitable future. Shares in the AIM-listed, Warrington-based business jumped 22% in morning trading on Thursday to £15.01, sending the company’s market valuation surging back over the billion pound mark at £1.22bn.


Blue Prism’s 2019 second half performance has ‘put to bed any concerns of a slowing top-line,’ according to one analyst, with the announcement detailing a strong mix of both new business wins and upsells to existing customers.

Revenues grew 83% to £101m, of which 96% was on an annually recurring basis, up from 94% a year earlier. But losses soared from £21.6m to £71.9m, on an adjusted earnings before interest, tax, amortisation and depreciation (EBITDA) basis, as the company ramped-up investment.

Sales and marketing function costs, for example, more than doubled as the overall staff headcount rose 113% to 1,001. Blue Prism’s operating cash outflow increased from £5.4m to £57.5m, although Blue Prism’s cash balance rose from £50.5m to £74.1m aided by a £100m fund raise in January of 2019.


Given the strong second half management retained its upbeat view of the future in general and 2020, guiding for losses to be slightly lower than current estimates and for cash burn to be neutral by the second half.

But the longer-run trends are really exciting investors, and they are starting to see Blue Prism demonstrating that it is building a platform for future, large profits despite previous concerns about RPA scalability.

Take Blue Prism’s new customer scale, for example. This averaged at four digital workers per client in 2019, yet its top 50 customers have an average of 400. If the company is right that its top 50 customers are a blueprint for its remaining and new customers, things start looking hugely interesting.

The company currently has 1,677 in total.


Digital staff at its top 50 clients accounted for 38% of the firm’s monthly recurring revenues last year, and if we annualise this, it implies around £900,000 per top 50 account a year. What’s more, the company said that 39 of its top 50 also bought more in 2019.

Notable new logos in the period included Audi, Amazon, Bank of China, IMF, L’Oreal and the US Department of Justice.

‘Another new metric released was net revenue retention, measured as prior year revenue less any revenue churn, plus upselling, which was strong at 143%’, said Numis analyst Tintin Stormont.

Customer retention remained very strong during the year driving a gross retention rate of 99.3%.

‘The shares are trading on 6.5-times enterprise value (EV) to sales in 2020, falling to circa 4.6-times EV/Sales next year’, said Stormont, ‘for what we still see as one of the strongest structural growth stocks in the market with an emerging path to profitability and cash generation.’

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Issue Date: 23 Jan 2020