Blackbaud (BLKB) Q3 Earnings Top Estimates, Revenues Miss

Blackbaud, Inc. BLKB delivered third-quarter 2020 non-GAAP earnings of 73 cents per share, which beat the Zacks Consensus Estimate by 4.3%. The bottom line improved 30.4% year over year.

Total non-GAAP revenues declined 2.9% year over year to $215 million and lagged the consensus mark by 2.5%.

Quarter in Detail

Total non-GAAP recurring revenues for the reported quarter were $200.1 million, which contributed 93.1% to total non-GAAP revenues. The figure decreased 2.6% year over year.

Non-GAAP organic revenues declined 2.9% year over year to $215 million. Non-GAAP organic revenues on a constant currency (CC) basis amounted to $214.2 million, down 3.2% year over year.

Blackbaud, Inc. Price, Consensus and EPS Surprise

Blackbaud, Inc. Price, Consensus and EPS Surprise

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

Non-GAAP organic recurring revenues declined 2.6% year over year to $200.1 million.

 

Key Business Highlights

Blackbaud announced technology innovations specifically designed to support the unique needs of social organizations amid the COVID-19 outbreak, which may have generated goodwill around the company’s brand and bolstered recognition for its products.

The company has rolled out Prayer Wall technology to help churches attend to congregants needs as COVID-19 outbreak compelled churches to move their congregations to online environment.

Additionally, higher education and healthcare institutions worldwide are turning to Blackbaud solutions to power fundraisers for COVID-19 vaccines and lifesaving equipment.

In fact, its end-to-end cloud solutions power 24 of the top 25 private U.S. colleges, per a ranking released by Forbes. Notably, the solutions facilitate students with admissions and advancement services, and fundraising and alumni engagement amid coronavirus crisis-led online learning wave.

Enhanced capabilities are expected to drive adoption of Blackbaud’s solutions in the days ahead and boost retention among existing customers.

Margin Details

Non-GAAP gross margin contracted 60 basis points (bps) to 60.1%.

Total operating expenses declined 4.7% to $106.2 million.

Non-GAAP operating margin expanded 590 bps from the year-ago quarter’s figure to 22.4%.

Balance Sheet & Cash Flow

As on Sep 30, 2020, Blackbaud had cash and cash equivalents of $30.6 million compared with $30.5 million as of Jun 30, 2020.

Total debt (including current portion) as of Sep 30 amounted to $508.3 million compared with $488.1 million as of Jun 30.

Cash provided by operating activities for nine months ended Sep 30, 2020, was $109.2 million compared with $122.1 million for nine months ended Sep 30, 2020.

Non-GAAP free cash flow for nine months ended Sep 30, 2020 was $51.3 million compared with $78 million of free cash outflow for nine months ended Sep 30, 2019.

Zacks Rank & Other Stocks to Consider

Currently, Blackbaud carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector are CDW Corporation CDW, Qorvo QRVO and Skyworks Solutions SWKS. CDW and Qorvo both sport a Zacks Rank #1 (Strong Buy), while Skyworks carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Both CDW and Skyworks are scheduled to report their quarterly earnings on Nov 2, while Qorvo is set to report on Nov 4.

Long-term earnings growth rate for CDW, Skyworks and Qorvo is currently pegged at 13.1%, 12.66% and 12.35%, respectively.

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