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Blackbaud (BLKB) Q1 Earnings Miss Estimates, Revenues Up Y/Y

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Blackbaud, Inc. BLKB delivered non-GAAP earnings of 57 cents per share in first-quarter 2022, which missed the Zacks Consensus Estimate by 12.3%. The bottom line declined 16.2% year over year.

Total revenues increased 17.3% year over year to $257.1 million and surpassed the consensus mark by 0.8%. The top line was driven by higher transactional volume and increases in contractual recurring revenues.

Total recurring revenues in the reported quarter amounted to $244.7 million, up 18.3% and contributed 95.2% to total revenues. One-time services and other revenues (4.8% of total revenues) amounted to $12.5 million, up 0.1% year over year.

Non-GAAP organic revenues were up 5.2% year over year. Non-GAAP organic revenues on a constant currency (CC) basis amounted to $258 million, up 5.6% year over year. Non-GAAP organic recurring revenues rose 6.6% year over year.

Blackbaud, Inc. Price, Consensus and EPS Surprise

Blackbaud, Inc. Price, Consensus and EPS Surprise
Blackbaud, Inc. Price, Consensus and EPS Surprise

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

Recent Business Highlights

Blackbaud continues to add technological innovations specifically designed to support the unique needs of social organizations amid the COVID-19 outbreak, which might have improved the reputation of the company’s brand and enhanced recognition for its products.

Higher adoption of Blackbaud’s new solutions is likely to drive the top line and boost retention among existing customers.

The company also announced that it achieved carbon neutrality across operations and data centers for 2021. Blackbaud added that it remains committed to new transparent sustainability reporting (including TCFD and CDP) for 2022.

In March 2022, Blackbaud announced that customers of the Blackbaud Merchant Services will now be able to accept payments through PayPal and Venmo for select Blackbaud products across the United States. The company plans to make these two options available internationally in 2022. Blackbaud added that PayPal and Venmo options are available within Blackbaud Online Express, Blackbaud Church Management Blackbaud Raiser's Edge NXTÒ, Blackbaud eTapestry, Blackbaud Luminate Online through the integration with Blackbaud Merchant Services.

Blackbaud also collaborated with the Change donation platform to provide companies with ‘customer-facing giving experiences’. Change is a technology platform used by companies across the globe to conduct charitable endeavors, including carbon-neutral shipping, loyalty programs and charitable non-fungible token or NFTs.

Margin Details

Non-GAAP gross margin came in at 58.5%, down 90 basis points (bps) from the prior-year quarter’s levels.

Total operating expenses were up 28% on a year-over-year basis to $139.7 million. As a percentage of revenues, the figure expanded 450 bps to 54.3%.

Non-GAAP operating margin contracted 460 bps from the year-ago quarter’s figure to 16.9%.

Non-GAAP adjusted EBITDA margin came in at 22.2%, down 120 bps year over year.

Balance Sheet & Cash Flow

As of Mar 31, 2022, Blackbaud had total cash, cash equivalents and restricted cash of $313.4 million compared with $651.6 million as of Dec 31, 2021.

Total debt (including the current portion) as of Mar 31, 2022, amounted to $981.2 million compared with $$956.2 million as of Dec 31, 2021.

Cash provided by operating activities for three months ended Mar 31, 2022, was $24.5 million compared with $30.1 million in the prior year period.

Non-GAAP adjusted free cash flow for the first quarter was $8.4 million compared with $18.8 million of non-GAAP adjusted free cash flow in the previous year quarter.

2022 Guidance Reiterated

Blackbaud expects non-GAAP revenues between $1.075 billion and $1.095 billion.

The company projects a non-GAAP adjusted EBITDA margin in the range of 24-24.5%. Non-GAAP earnings are expected to be between $2.63 and $2.82 per share.

Non-GAAP adjusted free cash flow for the year is forecast in the range of $165-$175 million.

Zacks Rank & Stocks to Consider

Blackbaud currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the broader technology sector are Flex FLEX, Jabil JBL and Broadcom AVGO. Flex and Jabil sport a Zacks Rank #1 (Strong Buy), while Broadcom carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Flex’s fiscal 2022 earnings is pegged at $1.88 per share, unchanged in the past 60 days. The long-term earnings growth rate is pegged at 14.9%.

Flex earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 25.6%. Shares of FLEX have declined 2.3% in the past year.

The Zacks Consensus Estimate for Jabil fiscal 2022 earnings is pegged at $7.25 per share, up 10.2% in the past 60 days. The long-term earnings growth rate is 12%.

Jabil earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 13.5%. Shares of JBL have gained 12.5% in the past year.

The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $35.67 per share, up 1.1% in the past 60 days. AVGO’s long-term earnings growth rate is pegged at 15.6%.

Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 1.9%. Shares of AVGO have increased 31% in the past year.


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