Blackbaud, Inc. Announces 2015 Fourth Quarter and Full Year Results
Fourth Quarter 2015 versus Fourth Quarter 2014 Highlights
- Total revenue growth of 15.1% to
$175.9 million - Non-GAAP organic revenue growth of 7.0%; 8.5% in constant currency
- Recurring revenue represented 77.6% of total revenue
- Income from operations increased 35.3% to
$10.3 million - Non-GAAP income from operations increased 16.7% to
$32.2 million - Cash flow from operations growth of 73.1%, to
$29.0 million
Full Year 2015 versus Full Year 2014 Highlights
- Total revenue growth of 13.0% to
$637.9 million - Non-GAAP organic revenue growth of 6.1%; 7.7% in constant currency
- Recurring revenue represented 76.1% of total revenue
- Income from operations increased 0.8% to
$46.7 million - Non-GAAP income from operations increased 19.9% to
$122.0 million - Cash flow from operations growth of 11.8% to
$114.3 million
An explanation of all non-GAAP financial measures referenced in this press release is included below under the heading "Non-GAAP Financial Measures." A reconciliation of the Company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.
2016 Full Year Financial Guidance
- Non-GAAP revenue of
$725.0 million to $740.0 million - Non-GAAP income from operations of
$141.0 million to $147.0 million - Non-GAAP operating margin of 19.4% to 19.9%
- Non-GAAP diluted earnings per share of
$1.90 to $1.98 - Cash flow from operations of
$145.0 million to $155.0 million
President and CEO,
Fourth Quarter 2015 GAAP and Non-GAAP Financial Results
Total revenue, income from operations and net income were positively impacted in the fourth quarter from growth in subscriptions revenue and contributions from
Non-GAAP income from operations, which excludes certain effects of acquisition-related accounting, as well as certain non-cash and other extraordinary items, increased 16.7% to
Non-GAAP income from operations and non-GAAP net income were positively impacted in the fourth quarter by growth in subscriptions revenue and contributions from
Balance Sheet and Cash Flow
The Company ended the fourth quarter with
Full Year 2015 GAAP and Non-GAAP Financial Results
Total revenue and income from operations were positively impacted in 2015 from growth in subscriptions revenue and contributions from
Non-GAAP income from operations, which excludes certain effects of acquisition-related accounting, as well as certain non-cash and other extraordinary items, increased 19.9% to
Executive Vice President and CFO,
Long-Term Financial Goal Update
Dividend
Conference Call Details
Investors and others should note that
About
Serving the worldwide philanthropic community for more than 30 years,
Forward-looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: expectations that we will accelerate our revenue growth and that our operating margins will continue to improve, expectations that we will achieve our projected 2016 full year financial guidance and expectations that effectively managing our capital structure will allow us to seize compelling opportunities that accelerate our shift to the cloud and are accretive to our financial performance. These statements involve a number of risks and uncertainties. Although
Non-GAAP Financial Measures
In addition,
Unaudited calculations of non-GAAP organic revenue growth and non-GAAP organic revenue growth on a constant currency basis for the fourth quarter and full year of 2015, as well as unaudited reconciliations of those non-GAAP measures to their most directly comparable GAAP measures, are as follows:
(in thousands, except percentages) | Three months ended December 31, |
Years ended December 31, |
|||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
GAAP revenue | $ | 175,877 | $ | 152,813 | $ | 637,940 | $ | 564,421 | |||||
GAAP revenue growth | 15.1 | % | 13.0 | % | |||||||||
(Less) Add: Non-GAAP acquisition-related revenue (1) | (7,990 | ) | 4,642 | (858 | ) | 37,429 | |||||||
Less: Revenue from divested businesses (2) | — | (520 | ) | — | (1,279 | ) | |||||||
Total Non-GAAP adjustments | (7,990 | ) | 4,122 | (858 | ) | 36,150 | |||||||
Non-GAAP revenue (3) | $ | 167,887 | $ | 156,935 | $ | 637,082 | $ | 600,571 | |||||
Non-GAAP organic revenue growth | 7.0 | % | 6.1 | % | |||||||||
Non-GAAP revenue (3) | $ | 167,887 | $ | 156,935 | $ | 637,082 | $ | 600,571 | |||||
Foreign currency impact on Non-GAAP revenue (4) | 2,412 | — | 9,623 | — | |||||||||
Non-GAAP revenue on constant currency basis (4) | $ | 170,299 | $ | 156,935 | $ | 646,705 | $ | 600,571 | |||||
Non-GAAP organic revenue growth on constant currency basis | 8.5 | % | 7.7 | % | |||||||||
(1) Non-GAAP acquisition-related revenue excludes incremental acquisition-related revenue calculated in accordance with GAAP that is attributable to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, non-GAAP acquisition-related revenue reflects presentation of full-year incremental non-GAAP revenue derived from such companies, as if they were combined throughout the prior period, and it includes the current period non-GAAP revenue from the acquisition-related deferred revenue write-down attributable to those companies.
(2) For businesses divested in the current fiscal year, non-GAAP organic revenue growth excludes a portion of the prior year period revenue associated with businesses divested of in the current fiscal year. The exclusion of the prior period revenue is to present the results of the divested business with the results of the combined company for the same period of time in both the prior and current periods.
(3) Non-GAAP revenue for the prior year periods presented herein will not agree to non-GAAP revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth is calculated.
(4) To determine non-GAAP organic revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Canadian Dollar, EURO, British Pound and Australian Dollar.
Additional details of
As announced at its 2015 Investor Day, beginning in 2016,
Reclassifications
In order to provide comparability between periods presented, "donor restricted cash" and "donations payable" have been renamed as "restricted cash due to customers" and "due to customers", respectively, in the previously reported consolidated balance sheet to conform to presentation of the current period. In addition, capitalized software development costs have been presented separately as "software development costs, net", in the previously reported consolidated balance sheet to conform to presentation of the current period.
Blackbaud, Inc. | ||||||
Consolidated balance sheets | ||||||
(Unaudited) |
||||||
(in thousands, except share amounts) | December 31, 2015 |
December 31, 2014 |
||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 15,362 | $ | 14,735 | ||
Restricted cash due to customers | 255,038 | 140,709 | ||||
Accounts receivable, net of allowance of $4,943 and $4,539 at December 31, 2015 and December 31, 2014, respectively | 80,046 | 77,523 | ||||
Prepaid expenses and other current assets | 48,666 | 40,392 | ||||
Deferred tax asset, current portion | — | 14,423 | ||||
Total current assets | 399,112 | 287,782 | ||||
Property and equipment, net | 52,651 | 49,896 | ||||
Software development costs, net | 19,551 | 9,420 | ||||
Goodwill | 436,449 | 349,008 | ||||
Intangible assets, net | 294,672 | 229,307 | ||||
Other assets | 21,418 | 17,770 | ||||
Total assets | $ | 1,223,853 | $ | 943,183 | ||
Liabilities and stockholders’ equity | ||||||
Current liabilities: | ||||||
Trade accounts payable | $ | 19,208 | $ | 11,436 | ||
Accrued expenses and other current liabilities | 57,461 | 52,201 | ||||
Due to customers | 255,038 | 140,709 | ||||
Debt, current portion | 4,375 | 4,375 | ||||
Deferred revenue, current portion | 230,216 | 212,283 | ||||
Total current liabilities | 566,298 | 421,004 | ||||
Debt, net of current portion | 404,229 | 276,196 | ||||
Deferred tax liability | 27,996 | 43,639 | ||||
Deferred revenue, net of current portion | 7,119 | 8,991 | ||||
Other liabilities | 7,623 | 7,437 | ||||
Total liabilities | 1,013,265 | 757,267 | ||||
Commitments and contingencies | ||||||
Stockholders’ equity: | ||||||
Preferred stock; 20,000,000 shares authorized, none outstanding | — | — | ||||
Common stock, $0.001 par value; 180,000,000 shares authorized, 56,873,817 and 56,048,135 shares issued at December 31, 2015 and December 31, 2014, respectively | 57 | 56 | ||||
Additional paid-in capital | 276,340 | 245,674 | ||||
Treasury stock, at cost; 9,903,071 and 9,740,054 shares at December 31, 2015 and December 31, 2014, respectively | (199,861 | ) | (190,440 | ) | ||
Accumulated other comprehensive loss | (825 | ) | (1,032 | ) | ||
Retained earnings | 134,877 | 131,658 | ||||
Total stockholders’ equity | 210,588 | 185,916 | ||||
Total liabilities and stockholders’ equity | $ | 1,223,853 | $ | 943,183 | ||
Blackbaud, Inc. | |||||||||||||
Consolidated statements of comprehensive income | |||||||||||||
(Unaudited) | |||||||||||||
(in thousands, except share and per share amounts) | Three months ended December 31, |
Years ended December 31, |
|||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Revenue | |||||||||||||
Subscriptions | $ | 98,336 | $ | 73,139 | $ | 331,759 | $ | 263,435 | |||||
Maintenance | 38,069 | 38,418 | 153,801 | 147,418 | |||||||||
Services | 32,100 | 32,603 | 132,978 | 128,371 | |||||||||
License fees and other | 7,372 | 8,653 | 19,402 | 25,197 | |||||||||
Total revenue | 175,877 | 152,813 | 637,940 | 564,421 | |||||||||
Cost of revenue | |||||||||||||
Cost of subscriptions | 52,278 | 38,091 | 167,341 | 133,221 | |||||||||
Cost of maintenance | 5,887 | 7,904 | 27,066 | 25,448 | |||||||||
Cost of services | 23,694 | 27,592 | 102,815 | 106,506 | |||||||||
Cost of license fees and other | 3,357 | 3,677 | 7,409 | 8,263 | |||||||||
Total cost of revenue | 85,216 | 77,264 | 304,631 | 273,438 | |||||||||
Gross profit | 90,661 | 75,549 | 333,309 | 290,983 | |||||||||
Operating expenses | |||||||||||||
Sales and marketing | 34,222 | 28,713 | 123,646 | 107,360 | |||||||||
Research and development | 22,633 | 22,914 | 84,636 | 77,179 | |||||||||
General and administrative | 22,840 | 16,159 | 76,084 | 58,277 | |||||||||
Amortization | 695 | 174 | 2,231 | 1,803 | |||||||||
Total operating expenses | 80,390 | 67,960 | 286,597 | 244,619 | |||||||||
Income from operations | 10,271 | 7,589 | 46,712 | 46,364 | |||||||||
Interest expense | (2,698 | ) | (1,952 | ) | (8,073 | ) | (6,011 | ) | |||||
Other expense, net | (318 | ) | (187 | ) | (1,687 | ) | (1,119 | ) | |||||
Income before provision for income taxes | 7,255 | 5,450 | 36,952 | 39,234 | |||||||||
Income tax provision | 844 | 634 | 11,303 | 10,944 | |||||||||
Net income | $ | 6,411 | $ | 4,816 | $ | 25,649 | $ | 28,290 | |||||
Earnings per share | |||||||||||||
Basic | $ | 0.14 | $ | 0.11 | $ | 0.56 | $ | 0.63 | |||||
Diluted | $ | 0.14 | $ | 0.10 | $ | 0.55 | $ | 0.62 | |||||
Common shares and equivalents outstanding | |||||||||||||
Basic weighted average shares | 45,766,891 | 45,377,465 | 45,623,854 | 45,215,138 | |||||||||
Diluted weighted average shares | 46,714,204 | 46,055,420 | 46,498,704 | 45,799,874 | |||||||||
Dividends per share | $ | 0.12 | $ | 0.12 | $ | 0.48 | $ | 0.48 | |||||
Other comprehensive income | |||||||||||||
Foreign currency translation adjustment | 416 | 323 | 62 | 261 | |||||||||
Unrealized gain (loss) on derivative instruments, net of tax | 779 | (295 | ) | 145 | 92 | ||||||||
Total other comprehensive income | 1,195 | 28 | 207 | 353 | |||||||||
Comprehensive income | $ | 7,606 | $ | 4,844 | $ | 25,856 | $ | 28,643 | |||||
Blackbaud, Inc. | ||||||
Consolidated statements of cash flows | ||||||
(Unaudited) | ||||||
Years ended December 31, |
||||||
(in thousands) | 2015 | 2014 | ||||
Cash flows from operating activities | ||||||
Net income | $ | 25,649 | $ | 28,290 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 55,997 | 45,417 | ||||
Provision for doubtful accounts and sales returns | 6,825 | 5,248 | ||||
Stock-based compensation expense | 25,246 | 17,345 | ||||
Excess tax benefits from exercise and vesting of stock-based compensation | (5,466 | ) | (7,455 | ) | ||
Deferred taxes | 3,165 | 3,050 | ||||
Loss on sale of business | 1,976 | — | ||||
Impairment of capitalized software development costs | 239 | 1,626 | ||||
Loss on debt extinguishment and termination of derivative instruments | — | 996 | ||||
Amortization of deferred financing costs and discount | 899 | 734 | ||||
Other non-cash adjustments | (197 | ) | 1,163 | |||
Changes in operating assets and liabilities, net of acquisition of businesses: | ||||||
Accounts receivable | (7,593 | ) | (5,750 | ) | ||
Prepaid expenses and other assets | (10,979 | ) | (8,464 | ) | ||
Trade accounts payable | 6,133 | (948 | ) | |||
Accrued expenses and other liabilities | (166 | ) | 4,014 | |||
Restricted cash due to customers | (34,279 | ) | (33,510 | ) | ||
Due to customers | 34,279 | 33,510 | ||||
Deferred revenue | 12,612 | 17,011 | ||||
Net cash provided by operating activities | 114,340 | 102,277 | ||||
Cash flows from investing activities | ||||||
Purchase of property and equipment | (18,633 | ) | (13,911 | ) | ||
Capitalized software development costs | (15,481 | ) | (8,535 | ) | ||
Purchase of net assets of acquired companies, net of cash acquired | (188,072 | ) | (188,918 | ) | ||
Net cash used in sale of business | (521 | ) | — | |||
Net cash used in investing activities | (222,707 | ) | (211,364 | ) | ||
Cash flows from financing activities | ||||||
Proceeds from issuance of debt | 312,300 | 365,100 | ||||
Payments on debt | (184,475 | ) | (235,589 | ) | ||
Debt issuance costs | (429 | ) | (3,003 | ) | ||
Proceeds from exercise of stock options | 32 | 188 | ||||
Excess tax benefits from exercise and vesting of stock-based compensation | 5,466 | 7,455 | ||||
Dividend payments to stockholders | (22,508 | ) | (22,107 | ) | ||
Net cash provided by financing activities | 110,386 | 112,044 | ||||
Effect of exchange rate on cash and cash equivalents | (1,392 | ) | (111 | ) | ||
Net increase in cash and cash equivalents | 627 | 2,846 | ||||
Cash and cash equivalents, beginning of year | 14,735 | 11,889 | ||||
Cash and cash equivalents, end of year | $ | 15,362 | $ | 14,735 | ||
Blackbaud, Inc. | |||||||||||||
Reconciliation of GAAP to non-GAAP financial measures | |||||||||||||
(Unaudited) | |||||||||||||
(in thousands, except per share amounts and percentages) | Three months ended December 31, |
Years ended December 31, |
|||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
GAAP Revenue | $ | 175,877 | $ | 152,813 | $ | 637,940 | $ | 564,421 | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Acquisition-related deferred revenue write-down | 2,239 | 4,642 | 9,371 | 6,242 | |||||||||
Non-GAAP revenue | $ | 178,116 | $ | 157,455 | $ | 647,311 | $ | 570,663 | |||||
GAAP gross profit | $ | 90,661 | $ | 75,549 | $ | 333,309 | $ | 290,983 | |||||
GAAP gross margin | 51.5 | % | 49.4 | % | 52.2 | % | 51.6 | % | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Acquisition-related deferred revenue write-down | 2,239 | 4,642 | 9,371 | 6,242 | |||||||||
Add: Stock-based compensation expense | 775 | 894 | 3,494 | 3,605 | |||||||||
Add: Amortization of intangibles from business combinations | 7,236 | 7,868 | 29,987 | 24,345 | |||||||||
Add: Employee severance | 26 | — | 1,492 | — | |||||||||
Subtotal | 10,276 | 13,404 | 44,344 | 34,192 | |||||||||
Non-GAAP gross profit | $ | 100,937 | $ | 88,953 | $ | 377,653 | $ | 325,175 | |||||
Non-GAAP gross margin | 56.7 | % | 56.5 | % | 58.3 | % | 57.0 | % | |||||
GAAP income from operations | $ | 10,271 | $ | 7,589 | $ | 46,712 | $ | 46,364 | |||||
GAAP operating margin | 5.8 | % | 5.0 | % | 7.3 | % | 8.2 | % | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Acquisition-related deferred revenue write-down | 2,239 | 4,642 | 9,371 | 6,242 | |||||||||
Add: Stock-based compensation expense | 7,347 | 4,853 | 25,246 | 17,345 | |||||||||
Add: Amortization of intangibles from business combinations | 7,931 | 8,042 | 32,218 | 26,148 | |||||||||
Add: Employee severance | 961 | — | 3,174 | — | |||||||||
Add: Impairment of capitalized software development costs | 239 | 856 | 239 | 1,626 | |||||||||
Add: Acquisition-related integration costs | 367 | 461 | 1,091 | 796 | |||||||||
Add: Acquisition-related expenses | 2,859 | 1,170 | 3,904 | 2,315 | |||||||||
Add: CEO transition costs | — | — | — | 870 | |||||||||
Subtotal | 21,943 | 20,024 | 75,243 | 55,342 | |||||||||
Non-GAAP income from operations | $ | 32,214 | $ | 27,613 | $ | 121,955 | $ | 101,706 | |||||
Non-GAAP operating margin | 18.1 | % | 17.5 | % | 18.8 | % | 17.8 | % | |||||
GAAP net income | $ | 6,411 | $ | 4,816 | $ | 25,649 | $ | 28,290 | |||||
Shares used in computing GAAP diluted earnings per share | 46,714 | 46,055 | 46,499 | 45,800 | |||||||||
GAAP diluted earnings per share | $ | 0.14 | $ | 0.10 | $ | 0.55 | $ | 0.62 | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Total Non-GAAP adjustments affecting loss from operations | 21,943 | 20,024 | 75,243 | 55,342 | |||||||||
Add: Loss on sale of business | — | — | 1,976 | — | |||||||||
Add: Loss on debt extinguishment and termination of derivative instruments | — | — | — | 996 | |||||||||
Less: Tax impact related to Non-GAAP adjustments | (10,544 | ) | (9,299 | ) | (33,223 | ) | (26,328 | ) | |||||
Non-GAAP net income | $ | 17,810 | $ | 15,541 | $ | 69,645 | $ | 58,300 | |||||
Shares used in computing Non-GAAP diluted earnings per share | 46,714 | 46,055 | 46,499 | 45,800 | |||||||||
Non-GAAP diluted earnings per share | $ | 0.38 | $ | 0.34 | $ | 1.50 | $ | 1.27 | |||||
Blackbaud, Inc. | |||||||||||||
Reconciliation of GAAP to Non-GAAP financial measures (continued) | |||||||||||||
(Unaudited) |
|||||||||||||
(in thousands, except percentages) | Three months ended December 31, |
Years ended December 31, |
|||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Detail of certain Non-GAAP adjustments: | |||||||||||||
Stock-based compensation expense: | |||||||||||||
Included in cost of revenue: | |||||||||||||
Cost of subscriptions | $ | 449 | $ | 131 | $ | 1,130 | $ | 687 | |||||
Cost of maintenance | 67 | 187 | 420 | 689 | |||||||||
Cost of services | 259 | 576 | 1,944 | 2,229 | |||||||||
Total included in cost of revenue | 775 | 894 | 3,494 | 3,605 | |||||||||
Included in operating expenses: | |||||||||||||
Sales and marketing | 706 | 526 | 2,979 | 2,147 | |||||||||
Research and development | 1,556 | 1,078 | 4,865 | 3,264 | |||||||||
General and administrative | 4,310 | 2,355 | 13,908 | 8,329 | |||||||||
Total included in operating expenses | 6,572 | 3,959 | 21,752 | 13,740 | |||||||||
Total stock-based compensation expense | $ | 7,347 | $ | 4,853 | $ | 25,246 | $ | 17,345 | |||||
Amortization of intangibles from business combinations: | |||||||||||||
Included in cost of revenue: | |||||||||||||
Cost of subscriptions | $ | 5,775 | $ | 6,524 | $ | 23,075 | $ | 20,239 | |||||
Cost of maintenance | 1,003 | 428 | 4,162 | 772 | |||||||||
Cost of services | 375 | 810 | 2,382 | 2,910 | |||||||||
Cost of license fees and other | 83 | 106 | 368 | 424 | |||||||||
Total included in cost of revenue | 7,236 | 7,868 | 29,987 | 24,345 | |||||||||
Included in operating expenses | 695 | 174 | 2,231 | 1,803 | |||||||||
Total amortization of intangibles from business combinations | $ | 7,931 | $ | 8,042 | $ | 32,218 | $ | 26,148 | |||||
Investor Contact:Mark Furlong Blackbaud, Inc. 843-654-2097 mark.furlong@blackbaud.com Media Contact:Nicole McGougan Blackbaud, Inc. 843-654-3307 nicole.mcgougan@blackbaud.com