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Blackbaud (BLKB) Q4 Earnings & Revenues Surpass Estimates

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Blackbaud, Inc. BLKB delivered fourth-quarter 2020 non-GAAP earnings of 85 cents per share, which beat the Zacks Consensus Estimate by 18.06%. The bottom line improved 66.7% year over year.

Total non-GAAP revenues increased 1.9% year over year to $242.6 million and surpassed the consensus mark by 6.4%.

Quarter in Detail

Total non-GAAP recurring revenues for the reported quarter were $229.5 million, and contributed 95% to total revenues. The figure increased 4.3% year over year.

Non-GAAP organic revenues improved 1.9% year over year to $242.6 million. Non-GAAP organic revenues on a constant currency (CC) basis amounted to $241.9 million, up 1.6% year over year.

Non-GAAP organic recurring revenues improved 4.3% year over year to $229.5 million.

One-time services and other revenues (5% of total revenues) amounted to $13.1 million, down 27% year over year.

Key Business Highlights

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

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

The company introduced an updated marketplace in a bid to offer increased innovation to social good organizations.

The company also launched a formal Environmental, Social and Governance (ESG) program in order to support community needs.

Additionally, higher education and healthcare institutions worldwide are turning to Blackbaud solutions to power fundraisers for COVID-19 vaccines and lifesaving equipment.

Blackbaud’s Cloud Solution for Higher Education, which is aimed at aiding clientele to drive efficiency, increase revenues and deepen engagement during the pandemic, is witnessing traction across colleges and universities.

In fact, its end-to-end cloud solutions power 24 of the top 25 private U.S. colleges, per a ranking released by Forbes. Notably, the solutions facilitate students with admissions and advancement services, and fundraising and alumni engagement amid coronavirus crisis-led online learning wave.

Enhanced capabilities are anticipated to drive adoption of Blackbaud’s solutions in the days ahead and boost retention among existing customers.

Margin Details

Non-GAAP gross margin expanded 110 basis points (bps) to 57.1%.

Total operating expenses climbed 5.2% to $123.9 million. As a percentage of revenues, the figure expanded 40 bps to 54%.

Non-GAAP operating margin expanded 910 bps from the year-ago quarter’s figure to 24%.

Balance Sheet & Cash Flow

As on Dec 31, 2020, Blackbaud had total cash, cash equivalents and restricted cash of $645 million compared with $234.2 million as of Sep 30, 2020.

Total debt (including current portion) as of Dec 31 amounted to $531 million compared with $508.3 million as of Sep 30.

Cash provided by operating activities for 12 months ended Dec 31, 2020, was $148 million compared with $182.5 million for 12 months ended Dec 31, 2020.

Non-GAAP free cash flow for 12 months ended Dec 31, 2020 was $76.1 million compared with $124.1 million of free cash outflow for 12 months ended Dec 31, 2019.

In November 2020, Blackbaud’s board of directors reauthorized and expanded its existing share repurchase program to $250 million. Through Jan 31, 2021, the company has repurchased approximately 1.2 million shares worth $69 million.

Zacks Rank & Stocks to Consider

Currently, CDK Global has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader technology sector are CDW Corporation CDW, CrowdStrike CRWD and Workday WDAY. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CDW, Workday and CrowdStrike are scheduled to release earnings on Feb 10, Feb 25 and Mar 16, respectively.

Long-term earnings growth rate for CDW, CrowdStrike and Workday are currently pegged at 13.1%, 25%, and 25.4%, respectively.

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