Blackbaud (BLKB) Up 5.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Blackbaud (BLKB). Shares have added about 5.8% in that time frame, outperforming 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 Q4 Earnings Top Estimates
Blackbaud reported fourth-quarter 2023 non-GAAP earnings per share (EPS) of $1.14, which surpassed the Zacks Consensus Estimate by 9.62%. The bottom line increased 67.7% year over year.
Total revenues jumped 7.4% year over year to $295 million, driven by strength in recurring revenues. However, revenues missed the Zacks Consensus Estimate by 1%.
Total recurring revenues (contributed 97.4% to the top line) in the reported quarter amounted to $287.3 million, up 8.4% year over year. One-time services and other revenues (2.6%) totaled $7.6 million, down 20.4% year over year. We estimated recurring revenues and one-time services and other revenues to be $281.1 million and $15.2 million, respectively.
Non-GAAP organic revenues grew 7.4% on a reported basis and 6.9% at constant currency, year over year. Non-GAAP organic recurring revenues rose 8.4% year over year.
Margin Details
Non-GAAP gross margin was 59.9%, up 320 basis points (bps) from the prior-year levels.
Total operating expenses declined 18.1% on a year-over-year basis to $126.6 million. As a percentage of revenues, the figure contracted to 43%.
Non-GAAP operating margin extended 840 bps from a year ago to 28.4%.
Non-GAAP adjusted EBITDA margin was 20.9%.
Balance Sheet & Cash Flow
As of Dec 31, 2023, Blackbaud had total cash, cash equivalents and restricted cash of $728.2 million compared with $390.7 million as of Sep 30.
Total debt (including the current portion) as of Dec 31, 2023, was $779.6 million compared with $723.4 million as of Sep 30.
For the fourth quarter, cash provided by operating activities was $199.6 million compared with $203.8 million in the prior-year period.
Non-GAAP adjusted free cash flow in the fourth quarter was $213.5 million compared with $153.6 million in the year-ago quarter.
Guidance
BLKB expects non-GAAP revenues to be between $1.17 billion and $1.20 billion.
The company projects non-GAAP adjusted EBITDA margin in the range of 32.5-33.5%.
Non-GAAP EPS is anticipated to be between $4.12 and $4.38. Non-GAAP adjusted free cash flow for 2024 is forecast in the range of $254-$274 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -9.58% due to these changes.
VGM Scores
At this time, Blackbaud has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, 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, Microsoft (MSFT), has gained 2.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Microsoft reported revenues of $62.02 billion in the last reported quarter, representing a year-over-year change of +17.6%. EPS of $2.93 for the same period compares with $2.32 a year ago.
Microsoft is expected to post earnings of $2.84 per share for the current quarter, representing a year-over-year change of +15.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.9%.
Microsoft 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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