Blackbaud (BLKB Quick QuoteBLKB - Free Report) reported non-GAAP earnings of 68 cents per share in fourth-quarter 2022, which surpassed the Zacks Consensus Estimate by 17.2%. The bottom line declined 9.3% year over year.

Total revenues increased 10.8% year over year to $274.8 million but missed the Zacks Consensus Estimate by 0.8%. The top line was driven by strength in recurring revenues.

Total recurring revenues in the reported quarter amounted to $265.2 million, up 11% and contributed 96.5% to total revenues. One-time services and other revenues (3.5% of total revenues) amounted to $9.6 million, increasing 3% year over year.

Non-GAAP organic revenues were $278.4 million, up 0.4% on a reported basis and 1.7% on a constant-currency basis, year over year. Non-GAAP organic recurring revenues rose 1.3% year over year.

Blackbaud, Inc. Price, Consensus and EPS Surprise

Blackbaud, Inc. price-consensus-eps-surprise-chart | Blackbaud, Inc. Quote

Margin Details

Non-GAAP gross margin came in at 56.7%, up 140 basis points (bps) from the prior-year quarter’s levels.

Total operating expenses were up 18.7% on a year-over-year basis to $154.8 million. As a percentage of revenues, the figure expanded 370 bps to 56.3%.

Non-GAAP operating margin expanded 20 bps from the year-ago quarter’s figure to 20%.

Non-GAAP adjusted EBITDA margin came in at 24.7%, up 20 bps year over year.

Balance Sheet & Cash Flow

As of Dec 31, 2022, Blackbaud had total cash, cash equivalents and restricted cash of $733.9 million compared with $375.4 million as of Sep 30, 2022.

Total debt (including the current portion) as of Dec 31, 2022, amounted to $859 million compared with $854.1 million as of Sep 30, 2022.

Cash provided by operating activities in the three months ended Dec 31, 2022, was $14.1 million compared with $43.9 million in the prior-year period.

Non-GAAP adjusted free cash flow in the fourth quarter was $7.6 million compared with $31.9 million in the previous-year quarter.

2023 Guidance

Blackbaud expects non-GAAP revenues between $1.08 billion and $1.11 billion. The Zacks Consensus Estimate is pegged at $1.11 billion.

The company projects a non-GAAP adjusted EBITDA margin in the range of 29.5-30.5%.

Non-GAAP earnings per share are expected to be between $3.30 and $3.60. The Zacks Consensus Estimate is pegged at $3.32 per share.

Non-GAAP adjusted free cash flow for the year is forecast in the range of $170-$190 million.

Zacks Rank & Stocks to Consider

Blackbaud currently carries a Zacks Rank #3 (Hold).

Investors interested in the broader technology space may consider stocks like Arista Networks (ANET Quick QuoteANET - Free Report) , Jabil (JBL Quick QuoteJBL - Free Report) and Bandwidth (BAND Quick QuoteBAND - Free Report) . All stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $4.38 per share, up 1 cent in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.

Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have gained 4.7% in the past year.

The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.

Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.8%. Shares of JBL have increased 36.5% in the past year.

The Zacks Consensus Estimate for Bandwidth 2022 earnings is pegged at 37 cents per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.

BAND's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 301.8%. Shares of the company have declined 60.8% in the past year