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Blackbaud Beats on Q4 Earnings

Zacks Equity Research

With its fourth-quarter 2013 operating earnings of 30 cents per share exceeding the Zacks Consensus Estimate by 15.3%, Blackbaud, Inc. (BLKB) delivered five straight quarters of positive surprises. The result also outpaced the year-ago quarter’s earnings by 18.5%.

The company’s GAAP earnings for the quarter were 26 cents a share compared with earnings of 7 cents per share in the prior-year quarter.

For 2013, the company reported non-GAAP earnings of $1.20 a share, beating the Zacks Consensus Estimate of $1.04 and reflecting an increase of 39.5% year over year.

The income was driven by the company’s continued efforts to optimize its products. Further, Blackbaud is persistently pursuing innovation to efficiently cater to the increasing demand for subscription and cloud-based products and services in the non-profit industry.

Total Revenue

Total revenue for the fourth quarter of 2013 was $134.9 million, up 12.3% from $120.1 million in the prior-year quarter. Revenues also surpassed the Zacks Consensus Estimate of $132 million.

For full-year 2013, the company reported revenues of $503.8 million, an increase of 12.6% year over year.

The top line was primarily driven by strong performances of the company’s enterprise and general markets businesses, both of which grew in double digits in the quarter.

Income and Expenses

Blackbaud reported its non-GAAP operating income of $25.1 million for the quarter, an increase of 12.7% compared with $22.3 million in the prior-year quarter.

The company’s total general and administrative expense declined to $1.6 million from $1.7 million in the prior-year quarter. Research and Development (R&D) expense was $0.8 million, a decline from $1.1 million in the prior-year quarter.

Balance Sheet and Cash Flow

Exiting the year, cash and cash equivalents were $11.9 million, down from $13.5 million as of Dec 31, 2012. Free cash flow for the quarter was $29.3 million, while cash from operating activities was $107.2 million. In the quarter, the company also disbursed $5.6 million as dividends to stockholders.

Along with the earnings release, the company also announced a quarterly dividend of 12 cents a share that has been approved to be disbursed on Mar 14 to stockholders of record as of Feb 28.

Looking Forward

The company expects to leverage its growth potential further by focusing on its operational investments in 2014. This is expected to enhance Blackbaud’s competitive advantage while making it more efficient in the long run.

Zacks Rank

Blackbaud currently carries a Rank #3 (Hold). Other favourably-ranked software solution providers include Autodesk, Inc. (ADSK), Cadence Design Systems Inc. (CDNS) and  Open Text Corporation (OTEX), each carrying a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on ADSK
Read the Full Research Report on OTEX
Read the Full Research Report on CDNS
Read the Full Research Report on BLKB

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