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Blackbaud Announces 2017 Fourth Quarter and Full Year Results

Fourth Quarter Recurring Revenue Grows 15% representing 84% of total revenue; 
Achieves 2017 Financial Guidance Topping Free Cash Flow Estimate; Announces 2018 Financial Guidance

CHARLESTON, S.C. , Feb. 6, 2018 /CNW/ -- Blackbaud (BLKB), the world's leading cloud software company powering social good, today announced financial results for its fourth quarter and fiscal year ended December 31, 2017.

"This was a big year for Blackbaud; we furthered our strategic growth objectives, were named to Fortune's 56 'Companies Changing the World' list, climbed IDC's ranking to the world's 24th largest cloud software vendor, and most importantly, accelerated the pace of innovation and drove outcomes for our growing base of over 40,000 customers," said Mike Gianoni , Blackbaud's president and CEO. "The business has never been stronger and our revenue is more predictable than ever with over 80% of revenue now recurring and growing in the double-digits annually. With the combined success of our results last year, our outlook for 2018, and the recent change in the federal tax law, we are awarding an equity grant of approximately $2,000 for each Blackbaud employee not currently receiving equity so that all employees are owners and can participate in the company's success."

Fourth Quarter 2017 Results Compared to Fourth Quarter 2016 Results:

  • Total GAAP revenue was $217.0 million , up 9.4%, with $181.9 million in GAAP recurring revenue, representing 83.8% of total GAAP revenue, and $151.9 million in GAAP subscription revenue, representing 70.0% of total GAAP revenue.
  • Total non-GAAP revenue was $218.8 million , up 10.3%, with $183.7 million in non-GAAP recurring revenue, representing 84.0% of total non-GAAP revenue, and $153.7 million in non-GAAP subscription revenue, representing 70.3% of total non-GAAP revenue.
  • Non-GAAP organic revenue increased 4.4%, non-GAAP organic recurring revenue increased 8.8%, and non-GAAP organic subscription revenue increased 16.2%.
  • GAAP income from operations decreased 22.0% to $18.7 million , with GAAP operating margin decreasing 350 basis points to 8.6%.
  • Non-GAAP income from operations increased 5.0% to $46.0 million , with non-GAAP operating margin decreasing 110 basis points to 21.0%.
  • GAAP net income increased 77.7% to $30.7 million , with GAAP diluted earnings per share of $0.64 , up $0.28 .
  • Non-GAAP net income increased 5.1% to $29.4 million , with non-GAAP diluted earnings per share of $0.61 , up $0.02 .
  • Non-GAAP free cash flow was $43.4 million , a decrease of $0.6 million .

"We achieved our 2017 full-year financial guidance, exceeding the mid-point of our estimates and topping the high-end of our free cash flow range, executed against our long-term aspirational goals, and as our 2018 full-year financial guidance shows, we're optimistic about the year ahead," said Tony Boor , Blackbaud's executive vice president and CFO. "Our free cash flow improvement is particularly strong for a second consecutive year. We're updating our non-GAAP tax rate to correlate with our GAAP estimate, reducing our full-year tax rate from 32% in 2017 to 20% in 2018, which is primarily driven by the U.S. federal rate change. We're also adopting ASC606 in 2018 and expect the largest financial effect to be associated with the deferral of commissions expense, which will positively impact our profitability."

An explanation of all non-GAAP financial measures referenced in this press release, including Blackbaud's definition of non-GAAP free cash flow, is included below under the heading "Non-GAAP Financial Measures." A reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Recent Company Highlights:

Visit www.blackbaud.com/press-room for more information about Blackbaud's recent highlights.

Full-Year 2017 Results Compared to Full-Year 2016 Results:

  • Total GAAP revenue was $788.3 million , up 7.9%, with $651.0 million in GAAP recurring revenue, representing 82.6% of total GAAP revenue, and $522.9 million in GAAP subscription revenue, representing 66.3% of total GAAP revenue.
  • Total non-GAAP revenue was $790.8 million , up 7.7%, with $653.4 million in non-GAAP recurring revenue, representing 82.6% of total non-GAAP revenue, and $525.2 million in non-GAAP subscription revenue, representing 66.4% of total non-GAAP revenue.
  • Non-GAAP organic revenue increased 5.4% and non-GAAP organic recurring revenue increased 10.1%, and non-GAAP organic subscription revenue increased 17.9%.
  • GAAP income from operations increased 3.6% to $64.0 million , with GAAP operating margin decreasing 40 basis points to 8.1%.
  • Non-GAAP income from operations increased 12.7% to $162.5 million , with non-GAAP operating margin increasing 100 basis points to 20.6%.
  • GAAP net income increased 58.8% to $65.9 million , with GAAP diluted earnings per share up $0.50 to $1.38 .
  • Non-GAAP net income increased 14.4% to $103.7 million , with non-GAAP diluted earnings per share up $0.25 to $2.17 .
  • Non-GAAP free cash flow was $137.7 million , an increase of $28.2 million .

Dividend
Blackbaud announced today that its Board of Directors has declared a first quarter 2018 dividend of $0.12 per share payable on March 15, 2018 to stockholders of record on February 28, 2018.

Financial Outlook
Blackbaud today announced its 2018 full year financial guidance, which includes anticipated impacts from adopting ASU 2014-09, Revenue from Contracts with Customers (Topic 606), in the first quarter of 2018:

  • Non-GAAP revenue of $870 million to $890 million
  • Non-GAAP operating margin of 20.6% to 21.0%
  • Non-GAAP diluted earnings per share of $2.75 to $2.88
  • Non-GAAP free cash flow of $165 million to $175 million

Blackbaud has not reconciled forward-looking full-year non-GAAP financial measures contained in this news release to their most directly comparable GAAP measures, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to compensation, acquisition transactions and integration, tax items or others that may arise during the year. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts.

Adoption of Statement of Cash Flow Presentation Accounting Standard
During the three months ended December 31, 2017 we early adopted ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash, which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. We retrospectively applied the changes in presentation to the statements of cash flows and no longer classify changes in restricted cash due to customers and due to customers as operating activities. Instead, changes in due to customers are now classified as financing activities. The impacts of adoption are reflected in the financial information herein. Future financial information presented in accordance with ASU 2016-18 will also include immaterial adjustments to reflect certain prior period errors. We will provide more detailed information regarding the impact of the early adoption of ASU 2016-18 in our annual report on Form 10-K for the year ended December 31, 2017 .

Conference Call Details

What:

Blackbaud's 2017 Fourth Quarter Conference Call

When:

February 7, 2018

Time:

8:00 a.m. (Eastern Time)

Live Call:

800-289-0462 (US/Canada); passcode 492095.

Webcast:

Blackbaud's Investor Relations Webpage

About Blackbaud
Blackbaud (NASDAQ: BLKB) is the world's leading cloud software company powering social good. Serving the entire social good community—nonprofits, foundations, corporations, education institutions, healthcare institutions and individual change agents—Blackbaud connects and empowers organizations to increase their impact through software, services, expertise, and data intelligence. The Blackbaud portfolio is tailored to the unique needs of vertical markets, with solutions for fundraising and CRM, marketing, advocacy, peer-to-peer fundraising, corporate social responsibility, school management, ticketing, grantmaking, financial management, payment processing, and analytics. Serving the industry for more than three decades, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States , Australia , Canada and the United Kingdom . For more information, visit www.blackbaud.com.

Investor Contact:


Media Contact:


Mark Furlong


Nicole McGougan


Director of Investor Relations


Public Relations Manager


843-654-2097


843-654-3307


mark.furlong@blackbaud.com


nicole.mcgougan@blackbaud.com


Forward-Looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: the predictability of our financial results, expectations that our revenue will continue to grow, and expectations that we will achieve our projected 2018 full-year financial guidance. These statements involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: management of integration of acquired companies; uncertainty regarding increased business and renewals from existing customers; a shifting revenue mix that may impact gross margin; continued success in sales growth; risks related to our dividend policy and stock repurchase program, including the possibility that we might discontinue payment of dividends; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Blackbaud's investor relations department. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Trademarks
All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

Non-GAAP Financial Measures
Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP revenue, non-GAAP recurring revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share. Blackbaud has acquired businesses whose net tangible assets include deferred revenue. In accordance with GAAP reporting requirements, Blackbaud recorded write-downs of deferred revenue to fair value, which resulted in lower recognized revenue. Both on a quarterly and year-to-date basis, the revenue for the acquired businesses is deferred and typically recognized over a one-year period, so Blackbaud's GAAP revenues for the one-year period after the acquisitions will not reflect the full amount of revenues that would have been reported if the acquired deferred revenue was not written down to fair value. The non-GAAP measures described above reverse the acquisition-related deferred revenue write-downs so that the full amount of revenue booked by the acquired companies is included, which Blackbaud believes provides a more accurate representation of a revenue run-rate in a given period. In addition to reversing write-downs of acquisition-related deferred revenue, non-GAAP financial measures discussed above exclude the impact of certain items that Blackbaud believes are not directly related to its performance in any particular period, but are for its long-term benefit over multiple periods.

In addition, Blackbaud uses non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic subscriptions revenue growth and non-GAAP organic recurring revenue growth, in analyzing its operating performance. Blackbaud believes that these non-GAAP measures are useful to investors, as a supplement to GAAP measures, for evaluating the periodic growth of its business on a consistent basis. Each of these measures excludes incremental acquisition-related revenue attributable to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, each of these measures reflects presentation of full-year incremental non-GAAP revenue derived from such companies as if they were combined throughout the prior period, and it includes the non-GAAP revenue attributable to those companies, as if there were no acquisition-related write-downs of acquired deferred revenue to fair value as required by GAAP. In addition, each of these measures excludes prior period revenue associated with divested businesses. The exclusion of the prior period revenue is to present the results of the divested businesses within the results of the combined company for the same period of time in both the prior and current periods. Blackbaud believes this presentation provides a more comparable representation of its current business' organic revenue growth and revenue run-rate.

Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software development, and capital expenditures for property and equipment.

Beginning in 2018, Blackbaud intends to update the non-GAAP tax rate it applies when calculating non-GAAP net income and non-GAAP diluted earnings per share in future periods. Since the first quarter of 2016, for the purposes of determining non-GAAP net income, Blackbaud has utilized a non-GAAP tax rate of 32.0% in its calculation of the tax impact related to non-GAAP adjustments. Blackbaud intends to adjust this rate to 20.0% to better reflect its periodic effective tax rate calculated in accordance with GAAP and its current expectations related to the Tax Cuts and Jobs Act, which was enacted into law on December 22, 2017 and, among other items, reduces the federal tax rate for corporations from 35.0% to 21.0% beginning in 2018. The non-GAAP tax rate utilized in future periods will be reviewed annually to determine whether it remains appropriate in consideration of Blackbaud's financial results including its periodic effective tax rate calculated in accordance with GAAP, its operating environment and related tax legislation in effect and other factors deemed necessary. All fourth quarter and full year 2017 measures of the tax impact related to non-GAAP net income and non-GAAP diluted earnings per share included in this news release are calculated under Blackbaud's historical methodology.

Blackbaud uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Blackbaud's ongoing operational performance. Blackbaud believes that these non-GAAP financial measures reflect the Blackbaud's ongoing business in a manner that allows for meaningful period-to-period comparison and analysis of trends in its business. In addition, Blackbaud believes that the use of these non-GAAP financial measures provides additional information for investors to use in evaluating ongoing operating results and trends and in comparing its financial results from period-to-period with other companies in Blackbaud's industry, many of which present similar non-GAAP financial measures to investors. However, these non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to differences in the exact method of calculation between companies. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.

 

Blackbaud, Inc.

Consolidated balance sheets

(Unaudited)



(dollars in thousands)

December 31,
 2017


December 31,
 2016


Assets



Current assets:



Cash and cash equivalents

$

29,830


$

16,902


Restricted cash due to customers

610,344


353,771


Accounts receivable, net of allowance of $5,141 and $3,291 at December 31, 2017 and December 31, 2016, respectively

96,293


88,932


Customer funds receivable

1,536



Prepaid expenses and other current assets

56,099


48,314


   Total current assets

794,102


507,919


Property and equipment, net

42,243


50,269


Software development costs, net

54,098


37,582


Goodwill

530,249


438,240


Intangible assets, net

314,651


253,676


Other assets

24,083


22,524


Total assets

$

1,759,426


$

1,310,210


Liabilities and stockholders' equity



Current liabilities:



Trade accounts payable

$

24,693


$

23,274


Accrued expenses and other current liabilities

54,399


54,196


Due to customers

611,880


353,771


Debt, current portion

8,576


4,375


Deferred revenue, current portion

276,456


244,500


   Total current liabilities

976,004


680,116


Debt, net of current portion

429,648


338,018


Deferred tax liability

37,597


29,558


Deferred revenue, net of current portion

3,643


6,440


Other liabilities

5,632


8,533


Total liabilities

1,452,524


1,062,665


Commitments and contingencies



Stockholders' equity:



Preferred stock; 20,000,000 shares authorized, none outstanding



Common stock, $0.001 par value; 180,000,000 shares authorized, 58,551,761 and 57,672,401 shares issued at December 31, 2017 and December 31, 2016, respectively

59


58


Additional paid-in capital

351,042


310,452


Treasury stock, at cost; 10,475,794 and 10,166,801 shares at December 31, 2017 and December 31, 2016, respectively

(239,199)


(215,237)


Accumulated other comprehensive loss

(649)


(457)


Retained earnings

195,649


152,729


Total stockholders' equity

306,902


247,545


Total liabilities and stockholders' equity

$

1,759,426


$

1,310,210


 

 

Blackbaud, Inc.

Consolidated statements of comprehensive income

(Unaudited)




Three months ended
 December 31,



Years ended
 December 31,


(dollars in thousands, except per share amounts)

2017


2016



2017


2016


Revenue






Subscriptions

$

151,942


$

122,657



$

522,865


$

428,987


Maintenance

29,982


35,927



128,166


146,946


Services and other

35,053


39,721



137,275


154,882


   Total revenue

216,977


198,305



788,306


730,815


Cost of revenue






Cost of subscriptions

72,404


60,111



242,740


213,883


Cost of maintenance

5,422


5,547



22,973


22,094


Cost of services and other

24,596


26,744



96,191


103,243


   Total cost of revenue

102,422


92,402



361,904


339,220


Gross profit

114,555


105,903



426,402


391,595


Operating expenses






Sales, marketing and customer success

44,131


40,047



173,525


155,754


Research and development

22,264


21,897



89,911


89,870


General and administrative

27,520


19,242



94,870


81,331


Amortization

1,107


693



3,271


2,840


Restructuring

794




794



   Total operating expenses

95,816


81,879



362,371


329,795


Income from operations

18,739


24,024



64,031


61,800


Interest expense

(3,412)


(2,546)



(12,097)


(10,583)


Other income (expense), net

679


(106)



2,260


(291)


Income before provision for income taxes

16,006


21,372



54,194


50,926


Income tax (benefit) provision

(14,703)


4,088



(11,739)


9,411


Net income

$

30,709


$

17,284



$

65,933


$

41,515


Earnings per share






Basic

$

0.66


$

0.37



$

1.41


$

0.90


Diluted

$

0.64


$

0.36



$

1.38


$

0.88


Common shares and equivalents outstanding






Basic weighted average shares

46,794,744


46,272,031



46,669,440


46,132,389


Diluted weighted average shares

48,014,250


47,436,116



47,775,702


47,316,538


Dividends per share

$

0.12


$

0.12



$

0.48


$

0.48


Other comprehensive income (loss)






Foreign currency translation adjustment

(476)


63



(943)


324


Unrealized gain on derivative instruments, net of tax

840


422



751


44


   Total other comprehensive income (loss)

364


485



(192)


368


Comprehensive income

$

31,073


$

17,769



$

65,741


$

41,883


 

 

Blackbaud, Inc.

Consolidated statements of cash flows

(Unaudited)




Years ended
 December 31,


(dollars in thousands)

2017


2016


Cash flows from operating activities



Net income

$

65,933


$

41,515


Adjustments to reconcile net income to net cash provided by operating activities:



Depreciation and amortization

73,948


70,491


Provision for doubtful accounts and sales returns

11,686


3,730


Stock-based compensation expense

40,631


32,638


Deferred taxes

(14,328)


3,033


Amortization of deferred financing costs and discount

838


958


Other non-cash adjustments

504


(864)


Changes in operating assets and liabilities, net of acquisition and disposal of businesses:



  Accounts receivable

(15,750)


(13,196)


  Prepaid expenses and other assets

(6,149)


(2,478)


  Trade accounts payable

1,024


3,689


  Accrued expenses and other liabilities

(4,973)


(751)


  Deferred revenue

22,926


14,863


Net cash provided by operating activities

176,290


153,628


Cash flows from investing activities



Purchase of property and equipment

(10,208)


(17,694)


Capitalized software development costs

(28,345)


(26,359)


Purchase of net assets of acquired companies, net of cash and restricted cash acquired

(146,789)


(3,377)


Purchase of derivative instruments

(568)



Proceeds from settlement of derivative instruments

1,030



Net cash used in investing activities

(184,880)


(47,430)


Cash flows from financing activities



Proceeds from issuance of debt

774,500


227,200


Payments on debt

(679,119)


(293,575)


Debt issuance costs

(3,085)



Employee taxes paid for withheld shares upon equity award settlement

(23,962)


(15,376)


Proceeds from exercise of stock options

15


16


Change in due to customers

226,717


96,000


Change in customer funds receivable

6,644



Dividend payments to stockholders

(23,069)


(22,811)


Net cash provided by (used in) financing activities

278,641


(8,546)


Effect of exchange rate on cash, cash equivalents, and restricted cash

(550)


2,622


Net increase in cash, cash equivalents, and restricted cash

269,501


100,274


Cash, cash equivalents, and restricted cash, beginning of year

370,673


270,399


Cash, cash equivalents, and restricted cash, end of year

$

640,174


$

370,673



The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown above in the consolidated statements of cash flows:


(dollars in thousands)

December 31,
 2017


December 31,
 2016


Cash and cash equivalents

$

29,830


$

16,902


Restricted cash due to customers

610,344


353,771


Total cash, cash equivalents and restricted cash in the statement of cash flows

640,174


370,673


 

 

Blackbaud, Inc.

Reconciliation of GAAP to non-GAAP financial measures

(Unaudited)




Three months ended
 December 31,



Years ended
 December 31,


(dollars in thousands, except per share amounts)

2017


2016



2017


2016


GAAP Revenue

$

216,977


$

198,305



$

788,306


$

730,815


Non-GAAP adjustments:






Add: Acquisition-related deferred revenue write-down

1,799




2,496


3,639


Non-GAAP revenue

$

218,776


$

198,305



$

790,802


$

734,454








GAAP gross profit

$

114,555


$

105,903



$

426,402


$

391,595


GAAP gross margin

52.8

%

53.4

%


54.1

%

53.6

%

Non-GAAP adjustments:






Add: Acquisition-related deferred revenue write-down

1,799




2,496


3,639


Add: Stock-based compensation expense

795


694



3,470


3,297


Add: Amortization of intangibles from business combinations

10,196


9,888



40,099


39,558


Add: Employee severance

21


222



994


382


Add: Acquisition-related integration costs




86



Subtotal

12,811


10,804



47,145


46,876


Non-GAAP gross profit

$

127,366


$

116,707



$

473,547


$

438,471


Non-GAAP gross margin

58.2

%

58.9

%


59.9

%

59.7

%







GAAP income from operations

$

18,739


$

24,024



$

64,031


$

61,800


GAAP operating margin

8.6

%

12.1

%


8.1

%

8.5

%

Non-GAAP adjustments:






Add: Acquisition-related deferred revenue write-down

1,799




2,496


3,639


Add: Stock-based compensation expense

9,576


7,633



40,631


32,638


Add: Amortization of intangibles from business combinations

11,303


10,581



43,370


42,398


Add: Employee severance

1,351


1,522



4,345


1,995


Add: Acquisition-related integration costs

353




966


1,419


Add: Acquisition-related expenses

2,063


36



5,914


301


Add: Restructuring costs

794




794



Subtotal

27,239


19,772



98,516


82,390


Non-GAAP income from operations

$

45,978


$

43,796



$

162,547


$

144,190


Non-GAAP operating margin

21.0

%

22.1

%


20.6

%

19.6

%







GAAP income before provision for income taxes

$

16,006


$

21,372



$

54,194


$

50,926


GAAP net income

$

30,709


$

17,284



$

65,933


$

41,515








Shares used in computing GAAP diluted earnings per share

48,014,250


47,436,116



47,775,702


47,316,538


GAAP diluted earnings per share

$

0.64


$

0.36



$

1.38


$

0.88








Non-GAAP adjustments:






Add: GAAP income tax (benefit) provision

(14,703)


4,088



(11,739)


9,411


Add: Total non-GAAP adjustments affecting income from operations

27,239


19,772



98,516


82,390


Add (less): Loss (gain) on derivative instrument

10




(462)



Add: Loss on debt extinguishment




299



Non-GAAP income before provision for income taxes

43,255


41,144



152,547


133,316


Assumed non-GAAP income tax provision (32%)

13,841


13,166



$

48,815


$

42,661


Non-GAAP net income

$

29,414


$

27,978



$

103,732


$

90,655








Shares used in computing non-GAAP diluted earnings per share

48,014,250


47,436,116



47,775,702


47,316,538


Non-GAAP diluted earnings per share

$

0.61


$

0.59



$

2.17


$

1.92


 

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP financial measures (continued)

(Unaudited)




Three months ended
 December 31,



Years ended
 December 31,


(dollars in thousands)

2017


2016



2017


2016


Detail of certain non-GAAP adjustments:






Stock-based compensation expense:






  Included in cost of revenue:






 Cost of subscriptions

$

291


$

264



$

1,254


$

1,168


 Cost of maintenance

79


117



373


508


 Cost of services and other

425


313



1,843


1,621


  Total included in cost of revenue

795


694



3,470


3,297


  Included in operating expenses:






 Sales, marketing and customer success

1,475


872



6,381


3,844


 Research and development

1,888


1,593



7,765


6,467


 General and administrative

5,418


4,474



23,015


19,030


  Total included in operating expenses

8,781


6,939



37,161


29,341


  Total stock-based compensation expense

$

9,576


$

7,633



$

40,631


$

32,638








Amortization of intangibles from business combinations:






  Included in cost of revenue:






 Cost of subscriptions

$

8,300


$

7,816



$

32,399


$

31,270


 Cost of maintenance

1,287


1,331



5,158


5,327


 Cost of services and other

609


741



2,542


2,961


  Total included in cost of revenue

10,196


9,888



40,099


39,558


Included in operating expenses

1,107


693



3,271


2,840


  Total amortization of intangibles from business combinations

$

11,303


$

10,581



$

43,370


$

42,398


 

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP financial measures (continued)

(Unaudited)




Three months ended
 December 31,



Years ended
 December 31,


(dollars in thousands)

2017


2016



2017


2016


GAAP revenue

$

216,977


$

198,305



$

788,306


$

730,815


GAAP revenue growth

9.4

%



7.9

%


(Less) Add: Non-GAAP acquisition-related revenue (1)

(9,879)




(13,927)


3,639


Total Non-GAAP adjustments

(9,879)




(13,927)


3,639


Non-GAAP revenue (2)

$

207,098


$

198,305



$

774,379


$

734,454


Non-GAAP organic revenue growth

4.4

%



5.4

%








Non-GAAP revenue (2)

$

207,098


$

198,305



$

774,379


$

734,454


Foreign currency impact on non-GAAP revenue (3)

(814)




(29)



Non-GAAP revenue on constant currency basis (3)

$

206,284


$

198,305



$

774,350


$

734,454


Non-GAAP organic revenue growth on constant currency basis

4.0

%



5.4

%








GAAP subscriptions revenue

$

151,942


$

122,657



$

522,865


$

428,987


GAAP subscriptions revenue growth

23.9

%



21.9

%


(Less) Add: Non-GAAP acquisition-related revenue (1)

(9,368)




(13,117)


3,534


Total Non-GAAP adjustments

(9,368)




(13,117)


3,534


Non-GAAP organic subscriptions revenue

$

142,574


$

122,657



$

509,748


$

432,521


Non-GAAP organic subscriptions revenue growth

16.2

%



17.9

%








GAAP subscriptions revenue

$

151,942


$

122,657



$

522,865


$

428,987


GAAP maintenance revenue

$

29,982


$

35,927



128,166


146,946


GAAP recurring revenue

$

181,924


$

158,584



$

651,031


$

575,933


GAAP recurring revenue growth

14.7

%



13.0

%


(Less) Add: Non-GAAP acquisition-related revenue (1)

(9,368)




(13,117)


3,625


Total Non-GAAP adjustments

(9,368)




(13,117)


3,625


Non-GAAP recurring revenue

$

172,556


$

158,584



$

637,914


$

579,558


Non-GAAP organic recurring revenue growth

8.8

%



10.1

%


(1)

Non-GAAP acquisition-related revenue excludes incremental acquisition-related revenue calculated in accordance with GAAP that is attributable to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, non-GAAP acquisition-related revenue reflects presentation of full-year incremental non-GAAP revenue derived from such companies, as if they were combined throughout the prior period, and it includes the non-GAAP revenue from the acquisition-related deferred revenue write-down attributable to those companies.

(2)

Non-GAAP revenue for the prior year periods presented herein may not agree to non-GAAP revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth is calculated.

(3)

To determine non-GAAP organic revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Canadian Dollar, EURO, British Pound and Australian Dollar.

 


Years ended
 December 31,

(dollars in thousands)

2017


2016

GAAP net cash provided by operating activities

$

176,290


$

153,628

Less: purchase of property and equipment

(10,208)


(17,694)

Less: capitalized software development costs

(28,345)


(26,359)

Non-GAAP free cash flow

$

137,737


$

109,575

 

 

Power your passion

 

Cision

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SOURCE Blackbaud, Inc.


View original content with multimedia: http://www.newswire.ca/en/releases/archive/February2018/06/c5935.html