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Blackbaud (BLKB) Lowers Outlook for FY18, Shares Decline

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Blackbaud, Inc. BLKB has provided an update on fiscal 2018 outlook. The company now anticipates revenues for 2018 to be in the band of $844-$854 million, down from its prior range of $870-$890 million. The Zacks Consensus Estimate is pegged at $873.3 million.

Non-GAAP earnings per share have been forecast in the range of $2.46-$2.52 per share, down from the earlier guidance of $2.75-$2.88 per share. The Zacks Consensus Estimate is pegged at $2.76 per share.

Non-GAAP operating margins are now projected be in the range of 19.3-19.6%%, down from the previous range of 20.6-21%.

Blackbaud also lowered Non-GAAP free cash flow expectations for 2018 to $143 million to $147 million from its previous view of $165-$175 million.

The company’s shares tumbled roughly 3.8%, yesterday. The company’s shares are down 4.4% year to date, against the industry’s growth of 26.8%.

Blackbaud declared that decrease in one-time services revenue as a result of shifting toward a cloud-based subscription-based model from the traditional revenue-base model impacted 2018 outlook.

Moreover, decrease in transaction-based revenue related to shift in consumer behavior within the U.K. market, unfavorable mix of payment methods within Tuition Management business, and one time-event during fiscal 2018 caused the company to reduce its fiscal 2018 guidance.

Q2 Earnings Update

Blackbaud reported modest second-quarter results, wherein the top line matched the Zacks Consensus Estimate. However, the company delivered second-quarter non-GAAP earnings of 69 cents per share, outpacing the Zacks Consensus Estimate by a couple of cents. Moreover, the figure surged 27.8% from the year-ago quarter.

Total non-GAAP revenues increased 11.8% year over year to $214.6 million during the second quarter. However, the figure was almost in line with the Zacks Consensus Estimate of $214 million.

To Conclude

Blackbaud is one of the leading cloud software companies working for social causes. The company combines technology and expertise to help organizations achieve their respective missions.

However, stiff competition from other players that provide software and related services in the non-profit sector are threatening the company’s leading position. In the general business, the company faces competition from Salesforce.com CRM and Oracle ORCL.

Zacks Rank & Stocks to Consider

Blackbaud carries a Zacks Rank #4 (Sell).

NetApp, Inc. NTAP is a stock worth considering in the broader technology sector, sporting 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 NetApp is pegged at 14.1%.

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