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Blackbaud (BLKB - Free Report) delivered third-quarter 2018 non-GAAP earnings of 59 cents per share, outpacing the Zacks Consensus Estimate by 4 cents. Moreover, the figure improved by a couple of cents from the year-ago quarter.
The company adopted a new Accounting Standards Codification ("ASC") 606 using full retrospective method from the first quarter. Per the new accounting standards, Blackbaud now reports maintenance and subscriptions combined under recurring revenues as it is shifting toward a cloud-based subscription model from the traditional revenue-base model.
Notably, shares were up almost 4.6% in after-hour trading. However, Blackbaud’s stock has lost 25.3% of its value year to date, against the industry's rally of 18.2%.
Quarter Details
Total non-GAAP revenues increased 7.9% year over year to $210.1 million, surpassing the Zacks Consensus Estimate of $206 million.
Total recurring revenues for the reported quarter came in at $188.7 million, accounting for 90% of total revenues. The figure was also up 12.6% year over year. Non-GAAP recurring revenues came in at $189.2 million, up 12.8% year over year.
One-time services and other revenues were pegged at $20.9 million (almost 10% of total revenue), declining 22.4% year over year.
Non-GAAP organic revenue increased 1.2% year over year (1.5% on a constant currency basis), while non-GAAP organic recurring revenues improved 4.9%.
Non-GAAP gross profit advanced 7% from the year-ago quarter to $127 million. However, non-GAAP gross margin contracted 40 basis points ("bps") to 60.5%.
Blackbaud’s non-GAAP operating income for the quarter under review declined 6.4% from the year-ago quarter to reach $39.7 million. Non-GAAP operating margin contracted 290 bps from the year-ago figure to reach 18.9%. The decrease may be primarily attributed to an increase of 10.7% in total operating expenses of $98.5 million from the year-ago quarter.
Non-GAAP net income improved 4.4% from the prior-year quarter to $28.4 million.
Balance Sheet
As on Sep 30, 2018, Blackbaud had cash and cash equivalents of $25.4million compared with $29.2 million, at the end of previous quarter. Total debt (including current portion) amounted to $425.3 million, compared with $479.8 million reported at the end of previous quarter.
Non-GAAP free cash flow came in at $57.8 million, marking a decrease of $1.3 million from the year-ago figure.
The company generated $137.8 million as cash from operatingactivities for the nine months ended Sep 30, 2018.
The company recently approved a quarterly dividend payment of 12 cents per share to be paid on Dec 14, 2018 to shareholders as on Nov 28, 2018.
Recent Activities
Blackbaud announced that by deploying its cloud fund accounting software, Financial Edge NXT, an organization canexperience an annual return on investment of 102% and average annual benefit of $446,680 within one year. This announcement was made as per the Nucleus Research ROI Case Study of StarCare Specialty Health System.
The company announced "Cloud Solution for Higher Education" in the newly introduced Education Management portfolio. Custom capabilities pertaining to higher education including guided fundraising and stewardship management were also added.
Further, Blackbaud expanded alliance with Microsoft (MSFT - Free Report) with Integrated Cloud Initiative for Nonprofits. The company also launched the Nonprofit Resource Management, which is jointly-developed with Microsoft.
At bbcon 2018 event, the company entered into a new partnership with Points of Light.
We believe growing clout of company’s Financial Edge NXT offering, expansion of product portfolio and collaborations bode well for Blackbaud in the longer haul.
Owing to the impact of shift toward a cloud-based subscription model from the traditional revenue-based model, Blackbaud had lowered 2018 outlook on Oct 8, 2018. The company maintained the revised fiscal 2018 guidance in the third quarter earnings announcement.
The company anticipates revenues for 2018 to be in the band of $844-$854 million, down from its earlier guided range of $870-$890 million. The Zacks Consensus Estimate is pegged at $846.7 million.
Non-GAAP earnings per share have been forecast in the range of $2.46-$2.52 per share, down from the previous guidance of $2.75-$2.88 per share. The Zacks Consensus Estimate is pegged at $2.48 per share.
Non-GAAP operating margins are projected be in the range of 19.3-19.6%, down from the previous range of 20.6-21%.
Blackbaud anticipates non-GAAP free cash flow expectations for 2018 to $143 million to $147 million from its earlier view of $165-$175 million.
Long-term earnings growth rate of NetApp and Upland Software are 14.1% and 20%, respectively.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Blackbaud (BLKB) Q3 Earnings & Revenues Surpass Estimates
Blackbaud (BLKB - Free Report) delivered third-quarter 2018 non-GAAP earnings of 59 cents per share, outpacing the Zacks Consensus Estimate by 4 cents. Moreover, the figure improved by a couple of cents from the year-ago quarter.
The company adopted a new Accounting Standards Codification ("ASC") 606 using full retrospective method from the first quarter. Per the new accounting standards, Blackbaud now reports maintenance and subscriptions combined under recurring revenues as it is shifting toward a cloud-based subscription model from the traditional revenue-base model.
Notably, shares were up almost 4.6% in after-hour trading. However, Blackbaud’s stock has lost 25.3% of its value year to date, against the industry's rally of 18.2%.
Quarter Details
Total non-GAAP revenues increased 7.9% year over year to $210.1 million, surpassing the Zacks Consensus Estimate of $206 million.
Total recurring revenues for the reported quarter came in at $188.7 million, accounting for 90% of total revenues. The figure was also up 12.6% year over year. Non-GAAP recurring revenues came in at $189.2 million, up 12.8% year over year.
One-time services and other revenues were pegged at $20.9 million (almost 10% of total revenue), declining 22.4% year over year.
Non-GAAP organic revenue increased 1.2% year over year (1.5% on a constant currency basis), while non-GAAP organic recurring revenues improved 4.9%.
Non-GAAP gross profit advanced 7% from the year-ago quarter to $127 million. However, non-GAAP gross margin contracted 40 basis points ("bps") to 60.5%.
Blackbaud’s non-GAAP operating income for the quarter under review declined 6.4% from the year-ago quarter to reach $39.7 million. Non-GAAP operating margin contracted 290 bps from the year-ago figure to reach 18.9%. The decrease may be primarily attributed to an increase of 10.7% in total operating expenses of $98.5 million from the year-ago quarter.
Non-GAAP net income improved 4.4% from the prior-year quarter to $28.4 million.
Balance Sheet
As on Sep 30, 2018, Blackbaud had cash and cash equivalents of $25.4million compared with $29.2 million, at the end of previous quarter. Total debt (including current portion) amounted to $425.3 million, compared with $479.8 million reported at the end of previous quarter.
Non-GAAP free cash flow came in at $57.8 million, marking a decrease of $1.3 million from the year-ago figure.
The company generated $137.8 million as cash from operatingactivities for the nine months ended Sep 30, 2018.
The company recently approved a quarterly dividend payment of 12 cents per share to be paid on Dec 14, 2018 to shareholders as on Nov 28, 2018.
Recent Activities
Blackbaud announced that by deploying its cloud fund accounting software, Financial Edge NXT, an organization canexperience an annual return on investment of 102% and average annual benefit of $446,680 within one year. This announcement was made as per the Nucleus Research ROI Case Study of StarCare Specialty Health System.
The company announced "Cloud Solution for Higher Education" in the newly introduced Education Management portfolio. Custom capabilities pertaining to higher education including guided fundraising and stewardship management were also added.
Further, Blackbaud expanded alliance with Microsoft (MSFT - Free Report) with Integrated Cloud Initiative for Nonprofits. The company also launched the Nonprofit Resource Management, which is jointly-developed with Microsoft.
At bbcon 2018 event, the company entered into a new partnership with Points of Light.
We believe growing clout of company’s Financial Edge NXT offering, expansion of product portfolio and collaborations bode well for Blackbaud in the longer haul.
Blackbaud, Inc. Price, Consensus and EPS Surprise
Blackbaud, Inc. Price, Consensus and EPS Surprise | Blackbaud, Inc. Quote
Guidance
Owing to the impact of shift toward a cloud-based subscription model from the traditional revenue-based model, Blackbaud had lowered 2018 outlook on Oct 8, 2018. The company maintained the revised fiscal 2018 guidance in the third quarter earnings announcement.
The company anticipates revenues for 2018 to be in the band of $844-$854 million, down from its earlier guided range of $870-$890 million. The Zacks Consensus Estimate is pegged at $846.7 million.
Non-GAAP earnings per share have been forecast in the range of $2.46-$2.52 per share, down from the previous guidance of $2.75-$2.88 per share. The Zacks Consensus Estimate is pegged at $2.48 per share.
Non-GAAP operating margins are projected be in the range of 19.3-19.6%, down from the previous range of 20.6-21%.
Blackbaud anticipates non-GAAP free cash flow expectations for 2018 to $143 million to $147 million from its earlier view of $165-$175 million.
Zacks Rank & Stocks to Consider
Blackbaud carries a Zacks Rank #5 (Strong Sell).
NetApp (NTAP - Free Report) and Upland Software, Inc. (UPLD - Free Report) , both sporting a Zacks Rank #1 (Strong Buy) are a couple of stocks worth considering in the broader technology sector. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate of NetApp and Upland Software are 14.1% and 20%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>