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Blackbaud (BLKB) Up 6.4% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Blackbaud (BLKB - Free Report) . Shares have added about 6.4% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Blackbaud Q3 Earnings Top Estimates
Blackbaud reported third-quarter 2023 non-GAAP earnings of $1.12 per share, which surpassed the Zacks Consensus Estimate by 15.5%. The bottom line increased 62.3% year over year.
Total revenues jumped 6.2% year over year to $277.6 million driven by strength in recurring revenues. Revenues beat the Zacks Consensus Estimate by 0.2%.
Total recurring revenues (contributed 96.9% to the top line) in the reported quarter amounted to $269 million, up 7.9% year over year. One-time services and other revenues (3.1%) totaled $8.6 million, down 27.8% year over year.
Non-GAAP organic revenues grew 6.6% on a reported basis and 5.9% at constant currency, year over year. Non-GAAP organic recurring revenues rose 8.3% year over year.
Margin Details
Non-GAAP gross margin was 62.4%, up 280 basis points (bps) from the prior-year levels.
Total operating expenses improved 9.2% on a year-over-year basis to $133.8 million. As a percentage of revenues, the figure contracted 820 bps to 48.2%.
Non-GAAP operating margin extended 960 bps from a year ago to 28.7%.
Non-GAAP adjusted EBITDA margin was 35%, up 940 bps year over year.
Balance Sheet & Cash Flow
As of Sep 30, Blackbaud had total cash, cash equivalents and restricted cash of $390.7 million compared with $790.3 million as of Jun 30, 2023.
Total debt (including the current portion) as of Sep 30, 2023, came in at $723.4 million compared with $846.6 million as of Jun 30, 2023.
Cash provided by operating activities was $128 million compared with $108 million in the prior-year period.
Non-GAAP adjusted free cash flow was $117.6 million compared with $93.8 million in the previous year.
2023 Guidance Reiterated
The company 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?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
Currently, Blackbaud has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
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 belongs to the Zacks Computer - Software industry. Another stock from the same industry, Cadence Design Systems (CDNS - Free Report) , has gained 12.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Cadence reported revenues of $1.02 billion in the last reported quarter, representing a year-over-year change of +13.4%. EPS of $1.26 for the same period compares with $1.06 a year ago.
Cadence is expected to post earnings of $1.34 per share for the current quarter, representing a year-over-year change of +39.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
Cadence has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Blackbaud (BLKB) Up 6.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Blackbaud (BLKB - Free Report) . Shares have added about 6.4% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Blackbaud Q3 Earnings Top Estimates
Blackbaud reported third-quarter 2023 non-GAAP earnings of $1.12 per share, which surpassed the Zacks Consensus Estimate by 15.5%. The bottom line increased 62.3% year over year.
Total revenues jumped 6.2% year over year to $277.6 million driven by strength in recurring revenues. Revenues beat the Zacks Consensus Estimate by 0.2%.
Total recurring revenues (contributed 96.9% to the top line) in the reported quarter amounted to $269 million, up 7.9% year over year. One-time services and other revenues (3.1%) totaled $8.6 million, down 27.8% year over year.
Non-GAAP organic revenues grew 6.6% on a reported basis and 5.9% at constant currency, year over year. Non-GAAP organic recurring revenues rose 8.3% year over year.
Margin Details
Non-GAAP gross margin was 62.4%, up 280 basis points (bps) from the prior-year levels.
Total operating expenses improved 9.2% on a year-over-year basis to $133.8 million. As a percentage of revenues, the figure contracted 820 bps to 48.2%.
Non-GAAP operating margin extended 960 bps from a year ago to 28.7%.
Non-GAAP adjusted EBITDA margin was 35%, up 940 bps year over year.
Balance Sheet & Cash Flow
As of Sep 30, Blackbaud had total cash, cash equivalents and restricted cash of $390.7 million compared with $790.3 million as of Jun 30, 2023.
Total debt (including the current portion) as of Sep 30, 2023, came in at $723.4 million compared with $846.6 million as of Jun 30, 2023.
Cash provided by operating activities was $128 million compared with $108 million in the prior-year period.
Non-GAAP adjusted free cash flow was $117.6 million compared with $93.8 million in the previous year.
2023 Guidance Reiterated
The company 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?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
Currently, Blackbaud has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
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 belongs to the Zacks Computer - Software industry. Another stock from the same industry, Cadence Design Systems (CDNS - Free Report) , has gained 12.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Cadence reported revenues of $1.02 billion in the last reported quarter, representing a year-over-year change of +13.4%. EPS of $1.26 for the same period compares with $1.06 a year ago.
Cadence is expected to post earnings of $1.34 per share for the current quarter, representing a year-over-year change of +39.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
Cadence has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.