Thesis - Blue Prism is a leader in Robotic Process Automation (RPA). RPA software allows companies to map their processes into a decision tree, such that it can be complete by software (or a software robot) more quickly, efficiently and accurately. This works best for repetitive back office tasks. For example, a company may have a team who are responsible for creating and managing the payment of invoices. The process might look like: open email, download excel template, open invoice software, copy across data, create and save invoice, email to specific person. This process could be mapped in RPA software, step by step, and then complete my a machine (i.e. a computer) which uses the same GUI (graphic interface) and tools to complete the task. RPA allows businesses to automate parts of their business. Importantly, they can do so on top of existing tools and workflow, rather than rebuilding whole processes with API solutions (which can be costly to initially setup or require changes to existing flows).
Opportunity - Automation is a key tailwind for large enterprises. It is estimated the market will be worth $10.2b in 2022, so at its current valuation, Blue Prism has room to grow. It is considered a leader in the space, with Gartner naming it so in its 2019 and 2020 RPA Magic Quadrant report.
Financials & Performance - In its 2019 report, Blue Prism reported £101m in revenues, almost double its 2018 £55.2m. 96% of revenue is recurring license revenues, with net retention rate at 143%. This means Blue Prism is able to grow from its existing customers. It reported up-sells of 1,139 from a customer set of 1,677. Customers include large enterprises such as Ernst & Young, Ebay and Walgreens.
Risks - This is a competitive space, with UI Path and Automation Everywhere also leaders alongside Blue Prism. Blue Prism is based in the UK, whilst both competitors are based in the US and remain private. Current growth has been impressive, but is still off a small revenue base.**