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Blackbaud (BLKB) Q1 Earnings Beat Estimates, Revenues Up Y/Y
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Blackbaud, Inc. (BLKB - Free Report) delivered first-quarter 2020 non-GAAP earnings of 51 cents per share, which beat the Zacks Consensus Estimate by 10.9%. The figure was flat year over year.
Total non-GAAP revenues increased 3.3% year over year to $223.6 million, which beat the consensus mark of $223 million.
Quarter in Detail
Blackbaud reports maintenance and subscriptions under recurring revenues as it is shifting toward a cloud-based subscription model from the traditional revenue-based model.
Moreover, revenues from retained and managed service contracts that did not have a term consistent with cloud solution contracts were included in one-time services and other revenue from Jan 1. This led to a decline of $4.3 million in recurring revenues and an increase to one-time services and other revenues during the quarter.
Total non-GAAP recurring revenues for the reported quarter were $204.9 million, which contributed 91.6% to total non-GAAP revenues. The figure increased 3% year over year.
One-time services and other revenues were $18.8 million, up 5.7% year over year.
Non-GAAP organic revenues rose 3.3% year over year to $223.6 million. Non-GAAP organic revenue on constant currency (CC) basis amounted to $223.9 million, up 3.4% year over year.
Meanwhile, non-GAAP organic recurring revenues moved up 3% year over year to $204.9 million.
Q1 Business Highlights
Blackbaud's JustGiving platform was used by World War II veteran Captain Tom Moore to raise more than £32 million ($39 million) for front-line workers fighting COVID-19 in the U.K. Moreover, the company donated £100K to NHS Charities Together to celebrate Captain Moore’s completion of 100-lap challenge.
The company also announced new measures, which include the launch of free resources to aid customers and the broader social economy in this time of crisis.
These measures are expected to have generated goodwill around the company’s brand and boosted recognition for its products.
Per a Total Economic Impact (TEI) study by Forrester Consulting, Blackbaud CRM has aided a higher education institution to increase gift revenues by nearly $50 million and the average annual gift revenue generated per major gift by more than 60% over a three month period. It also helped the institution save $1.2 million in labor costs and generate a 273% return on investment.
Further, the company announced a partnership with Chief Executives for Corporate Purpose (CECP), which will enable its corporate social responsibility (CSR) customers to use their social investment data with improved efficiency through streamlined reporting and knowledge sharing.
These enhanced capabilities are expected to drive adoption of Blackbaud’s solutions and boost retention among existing customers.
Margin Details
Non-GAAP gross margin contracted 200 basis points (bps) to 58.4%.
Sales, marketing & customer success expenses, as a percentage of revenues, expanded 60 bps from the year-ago quarter’s tally to 26.3%. Research and development expenses contracted 200 bps to 11.2%, while general & administrative expenses contracted 100 bps to 11.6%.
Non-GAAP operating margin contracted 140 bps from the year-ago quarter’s figure to 15.2%.
Balance Sheet & Cash Flow
As on Mar 31, 2020, Blackbaud had cash and cash equivalents of $25 million compared with $31.8 million as of Dec 31, 2019.
Total debt (including current portion) as of Mar 31, amounted to $530.9 million compared with $467.1 million as of Dec 31, 2019.
Cash used in operating activities during the quarter was $24.5 million compared with $182.5 million of cash generated from operating activities in the prior quarter.
Non-GAAP free cash outflow during the quarter was $38.3 million compared with $46.1 million of free cash flow in the last reported quarter.
On May 5, the board of directors announced suspension of quarterly cash dividend payouts to maintain near-term liquidity and financial flexibility during the COVID-19 crisis.
Zacks Rank & Stocks to Consider
Currently, Blackbaud carries a Zacks Rank #3 (Hold).
Cogent Communications Holdings, Inc. (CCOI - Free Report) , NeoPhotonics Corporation and InterDigital, Inc. (IDCC - Free Report) are some better-ranked stocks worth considering in the broader computer and technology sector, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for NeoPhotonics and InterDigital is pegged at 15% each, while the same for Cogent is pegged at 11.46%.
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Blackbaud (BLKB) Q1 Earnings Beat Estimates, Revenues Up Y/Y
Blackbaud, Inc. (BLKB - Free Report) delivered first-quarter 2020 non-GAAP earnings of 51 cents per share, which beat the Zacks Consensus Estimate by 10.9%. The figure was flat year over year.
Total non-GAAP revenues increased 3.3% year over year to $223.6 million, which beat the consensus mark of $223 million.
Quarter in Detail
Blackbaud reports maintenance and subscriptions under recurring revenues as it is shifting toward a cloud-based subscription model from the traditional revenue-based model.
Moreover, revenues from retained and managed service contracts that did not have a term consistent with cloud solution contracts were included in one-time services and other revenue from Jan 1. This led to a decline of $4.3 million in recurring revenues and an increase to one-time services and other revenues during the quarter.
Blackbaud, Inc. Price, Consensus and EPS Surprise
Blackbaud, Inc. price-consensus-eps-surprise-chart | Blackbaud, Inc. Quote
Total non-GAAP recurring revenues for the reported quarter were $204.9 million, which contributed 91.6% to total non-GAAP revenues. The figure increased 3% year over year.
One-time services and other revenues were $18.8 million, up 5.7% year over year.
Non-GAAP organic revenues rose 3.3% year over year to $223.6 million. Non-GAAP organic revenue on constant currency (CC) basis amounted to $223.9 million, up 3.4% year over year.
Meanwhile, non-GAAP organic recurring revenues moved up 3% year over year to $204.9 million.
Q1 Business Highlights
Blackbaud's JustGiving platform was used by World War II veteran Captain Tom Moore to raise more than £32 million ($39 million) for front-line workers fighting COVID-19 in the U.K. Moreover, the company donated £100K to NHS Charities Together to celebrate Captain Moore’s completion of 100-lap challenge.
The company also announced new measures, which include the launch of free resources to aid customers and the broader social economy in this time of crisis.
These measures are expected to have generated goodwill around the company’s brand and boosted recognition for its products.
Per a Total Economic Impact (TEI) study by Forrester Consulting, Blackbaud CRM has aided a higher education institution to increase gift revenues by nearly $50 million and the average annual gift revenue generated per major gift by more than 60% over a three month period. It also helped the institution save $1.2 million in labor costs and generate a 273% return on investment.
Further, the company announced a partnership with Chief Executives for Corporate Purpose (CECP), which will enable its corporate social responsibility (CSR) customers to use their social investment data with improved efficiency through streamlined reporting and knowledge sharing.
These enhanced capabilities are expected to drive adoption of Blackbaud’s solutions and boost retention among existing customers.
Margin Details
Non-GAAP gross margin contracted 200 basis points (bps) to 58.4%.
Sales, marketing & customer success expenses, as a percentage of revenues, expanded 60 bps from the year-ago quarter’s tally to 26.3%. Research and development expenses contracted 200 bps to 11.2%, while general & administrative expenses contracted 100 bps to 11.6%.
Non-GAAP operating margin contracted 140 bps from the year-ago quarter’s figure to 15.2%.
Balance Sheet & Cash Flow
As on Mar 31, 2020, Blackbaud had cash and cash equivalents of $25 million compared with $31.8 million as of Dec 31, 2019.
Total debt (including current portion) as of Mar 31, amounted to $530.9 million compared with $467.1 million as of Dec 31, 2019.
Cash used in operating activities during the quarter was $24.5 million compared with $182.5 million of cash generated from operating activities in the prior quarter.
Non-GAAP free cash outflow during the quarter was $38.3 million compared with $46.1 million of free cash flow in the last reported quarter.
On May 5, the board of directors announced suspension of quarterly cash dividend payouts to maintain near-term liquidity and financial flexibility during the COVID-19 crisis.
Zacks Rank & Stocks to Consider
Currently, Blackbaud carries a Zacks Rank #3 (Hold).
Cogent Communications Holdings, Inc. (CCOI - Free Report) , NeoPhotonics Corporation and InterDigital, Inc. (IDCC - Free Report) are some better-ranked stocks worth considering in the broader computer and technology sector, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for NeoPhotonics and InterDigital is pegged at 15% each, while the same for Cogent is pegged at 11.46%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>