A month has gone by since the last earnings report for Blackbaud (
BLKB Quick Quote BLKB - Free Report) . Shares have added about 1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Blackbaud due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Blackbaud Q2 Earnings Top Estimates
Blackbaud reported second-quarter 2023 non-GAAP earnings of 98 cents per share, which surpassed the Zacks Consensus Estimate by 5.4%. The bottom line increased 31% year over year.
Total revenues jumped 2.3% year over year to $271 million driven by strength in recurring revenues. Transactional revenues registered growth in the high single digits on a year-over-year basis in the quarter under review. However, revenues missed the Zacks Consensus Estimate by 0.6%.
Total recurring revenues (contributed 96.8% to the top line) in the reported quarter amounted to $262.4 million, up 3.9% year over year. One-time services and other revenues (3.2% of the top line) totaled $8.7 million, down 30.3% year over year.
Non-GAAP organic revenues grew 2.8% on a reported basis and 3.2% at constant currency, year over year. Non-GAAP organic recurring revenues rose 4.4% year over year.
Non-GAAP gross margin was 61.6%, up 280 basis points (bps) from the prior-year quarter’s levels.
Total operating expenses improved 7.2% on a year-over-year basis to $149.3 million. As a percentage of revenues, the figure expanded 250 bps to 55.1%.
Non-GAAP operating margin extended 680 bps from the year-ago quarter’s figure to 27.4%.
Non-GAAP adjusted EBITDA margin was 32.8%, up 620 bps year over year.
Balance Sheet & Cash Flow
As of Jun 30, Blackbaud had total cash, cash equivalents and restricted cash of $790.3 million compared with $388.1 million as of Mar 31, 2023.
Total debt (including the current portion) as of Jun 30, came in at $846.6 million compared with $858.9 million as of Mar 31, 2023.
For the second quarter, cash provided by operating activities was $53.2 million compared with $57.3 million in the prior-year period.
Non-GAAP adjusted free cash flow in the second quarter was $43.6 million compared with $43.9 million in the previous-year quarter.
2023 Guidance Reiterated
BLKB continues to expect non-GAAP revenues to be between $1.095 billion and $1.125 billion.
The company projects non-GAAP adjusted EBITDA margin in the range of 30.5-31.5%.
Non-GAAP earnings per share are anticipated to be between $3.63 and $3.94.
Non-GAAP adjusted free cash flow for the year is forecast in the $190-$210 million band. How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
Currently, Blackbaud has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Blackbaud has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Blackbaud is part of the Zacks Computer - Software industry. Over the past month, SAP (
SAP Quick Quote SAP - Free Report) , a stock from the same industry, has gained 5.6%. The company reported its results for the quarter ended June 2023 more than a month ago.
SAP reported revenues of $8.18 billion in the last reported quarter, representing a year-over-year change of +2.2%. EPS of $1.14 for the same period compares with $1.02 a year ago.
For the current quarter, SAP is expected to post earnings of $1.43 per share, indicating a change of +26.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.8% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for SAP. Also, the stock has a VGM Score of D.