Blackbaud Announces 2017 First Quarter Results
"The market remains strong, the pace of innovation we're delivering is unmatched in our industry and we're seeing very positive traction with our next generation cloud solutions, which are powering impressive results for our customers," said
First Quarter 2017 Results Compared to First Quarter 2016 Results:
- Total GAAP revenue was
$183.6 million , up 8.5%, with$152.0 million in GAAP recurring revenue, representing 82.8% of total revenue, and$118.2 million in subscription revenue, representing 64.4% of total revenue. - Total non-GAAP revenue was
$183.6 million , up 7.4%, with$152.0 million in non-GAAP recurring revenue, representing 82.8% of total non-GAAP revenue, and$118.2 million in subscription revenue, representing 64.4% of total revenue. - Non-GAAP organic revenue increased 7.4%, non-GAAP organic recurring revenue increased 11.9%, and non-GAAP organic subscription revenue increased 19.9%.
- GAAP income from operations decreased 0.3% to
$10.6 million , with GAAP operating margin decreasing 50 basis points to 5.8%. - Non-GAAP income from operations increased 7.6% to
$34.0 million , with non-GAAP operating margin of 18.5% equal to prior year. - GAAP net income increased 84.6% to
$11.5 million , with GAAP diluted earnings per share of$0.24 , up$0.11 . - Non-GAAP net income increased 10.8% to
$21.7 million , with non-GAAP diluted earnings per share of$0.46 , up$0.04 . - Non-GAAP free cash flow was
$3.5 million , an increase of$10.3 million .
"We had a very solid start to the year," said
An explanation of all non-GAAP financial measures referenced in this press release, including
Recent Company Highlights:
Blackbaud's Charitable Giving Report revealed that online giving to nonprofit organizations reached a record high in 2016.Jagtar Narula was promoted toBlackbaud's senior vice president of Corporate Strategy and Business Development,Todd Lant was promoted toBlackbaud's chief information officer, andPatrick Hodges was promoted to senior vice president of Global Sales.Blackbaud's chief technology officer,Mary Beth Westmoreland was named one of the Top 50 Most Powerful Women in Technology by theNational Diversity Council .Blackbaud announced that customers using Luminate Online™, its digital marketing solution, are reporting some of the industry's strongest digital fundraising results.Blackbaud highlighted that its Intelligence for Good™ approach, which brings together analytics, AI, big data and expertise specifically optimized for the social good community, has already helped customers identify billions of dollars in funding opportunities and millions of potential advocates.
Visit www.blackbaud.com/press-room/ for more information about
Dividend
Financial Outlook
- Non-GAAP revenue of
$775 million to $795 million - Non-GAAP income from operations of
$155 million to $163 million - Non-GAAP operating margin of 20.0% to 20.5%
- Non-GAAP diluted earnings per share of
$2.06 to $2.18 - Non-GAAP free cash flow of
$120 million to $130 million
Conference Call Details
What: |
Blackbaud's 2017 First Quarter Conference Call |
When: |
May 2, 2017 |
Time: |
8:00 a.m. (Eastern Time) |
Live Call: |
800-967-7149 (domestic) or 719-386-0002 (international); passcode 732627. |
Webcast: |
About
Investor Contact: |
Media Contact: |
||
Mark Furlong |
Nicole McGougan |
||
Director of Investor Relations |
Blackbaud Public Relations |
||
843-654-2097 |
843-654-3307 |
||
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 our revenue and operating cash flow will continue to grow and that our operating margins will continue to improve, and expectations that we will achieve our projected 2017 full year financial guidance and long-term aspirational goals. These statements involve a number of risks and uncertainties. Although
Trademarks
All
Non-GAAP Financial Measures
In addition,
Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software development, and capital expenditures for property and equipment.
Blackbaud, Inc. |
||||
(dollars in thousands) |
March 31, |
December 31, |
||
Assets |
||||
Current assets: |
||||
Cash and cash equivalents |
$ |
13,872 |
$ |
16,902 |
Restricted cash due to customers |
164,748 |
353,771 |
||
Accounts receivable, net of allowance of $3,328 and $3,291 at March 31, 2017 |
90,510 |
88,932 |
||
Prepaid expenses and other current assets |
49,172 |
48,314 |
||
Total current assets |
318,302 |
507,919 |
||
Property and equipment, net |
47,200 |
50,269 |
||
Software development costs, net |
41,139 |
37,582 |
||
Goodwill |
438,307 |
438,240 |
||
Intangible assets, net |
243,263 |
253,676 |
||
Other assets |
22,914 |
22,524 |
||
Total assets |
$ |
1,111,125 |
$ |
1,310,210 |
Liabilities and stockholders' equity |
||||
Current liabilities: |
||||
Trade accounts payable |
$ |
20,666 |
$ |
23,274 |
Accrued expenses and other current liabilities |
39,072 |
54,196 |
||
Due to customers |
164,748 |
353,771 |
||
Debt, current portion |
4,375 |
4,375 |
||
Deferred revenue, current portion |
237,101 |
244,500 |
||
Total current liabilities |
465,962 |
680,116 |
||
Debt, net of current portion |
351,995 |
338,018 |
||
Deferred tax liability |
29,636 |
29,558 |
||
Deferred revenue, net of current portion |
7,681 |
6,440 |
||
Other liabilities |
7,801 |
8,533 |
||
Total liabilities |
863,075 |
1,062,665 |
||
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, 58,410,419 and |
58 |
58 |
||
Additional paid-in capital |
319,731 |
310,452 |
||
Treasury stock, at cost; 10,375,257 and 10,166,801 shares at March 31, 2017 and |
(230,065) |
(215,237) |
||
Accumulated other comprehensive loss |
(175) |
(457) |
||
Retained earnings |
158,501 |
152,729 |
||
Total stockholders' equity |
248,050 |
247,545 |
||
Total liabilities and stockholders' equity |
$ |
1,111,125 |
$ |
1,310,210 |
Blackbaud, Inc. |
||||
(dollars in thousands, except per share amounts) |
Three months ended |
|||
2017 |
2016 |
|||
Revenue |
||||
Subscriptions |
$ |
118,179 |
$ |
96,851 |
Maintenance |
33,781 |
37,160 |
||
Services and other |
31,661 |
35,245 |
||
Total revenue |
183,621 |
169,256 |
||
Cost of revenue |
||||
Cost of subscriptions |
54,926 |
49,666 |
||
Cost of maintenance |
5,982 |
5,318 |
||
Cost of services and other |
24,574 |
24,905 |
||
Total cost of revenue |
85,482 |
79,889 |
||
Gross profit |
98,139 |
89,367 |
||
Operating expenses |
||||
Sales, marketing and customer success |
42,240 |
35,609 |
||
Research and development |
22,706 |
22,715 |
||
General and administrative |
21,923 |
19,679 |
||
Amortization |
691 |
752 |
||
Total operating expenses |
87,560 |
78,755 |
||
Income from operations |
10,579 |
10,612 |
||
Interest expense |
(2,377) |
(2,675) |
||
Other income (expense), net |
286 |
(105) |
||
Income before provision for income taxes |
8,488 |
7,832 |
||
Income tax (benefit) provision |
(3,023) |
1,595 |
||
Net income |
$ |
11,511 |
$ |
6,237 |
Earnings per share |
||||
Basic |
$ |
0.25 |
$ |
0.14 |
Diluted |
$ |
0.24 |
$ |
0.13 |
Common shares and equivalents outstanding |
||||
Basic weighted average shares |
46,501,761 |
45,967,863 |
||
Diluted weighted average shares |
47,482,840 |
47,064,164 |
||
Dividends per share |
$ |
0.12 |
$ |
0.12 |
Other comprehensive income (loss) |
||||
Foreign currency translation adjustment |
100 |
403 |
||
Unrealized gain (loss) on derivative instruments, net of tax |
182 |
(669) |
||
Total other comprehensive income (loss) |
282 |
(266) |
||
Comprehensive income |
$ |
11,793 |
$ |
5,971 |
Blackbaud, Inc. |
||||
Three months ended |
||||
(dollars in thousands) |
2017 |
2016 |
||
Cash flows from operating activities |
||||
Net income |
$ |
11,511 |
$ |
6,237 |
Adjustments to reconcile net income to net cash provided by operating activities: |
||||
Depreciation and amortization |
18,091 |
17,609 |
||
Provision for doubtful accounts and sales returns |
2,738 |
1,017 |
||
Stock-based compensation expense |
9,294 |
7,743 |
||
Deferred taxes |
(50) |
626 |
||
Amortization of deferred financing costs and discount |
239 |
239 |
||
Other non-cash adjustments |
(243) |
(217) |
||
Changes in operating assets and liabilities, net of acquisition and disposal of |
||||
Accounts receivable |
(4,041) |
817 |
||
Prepaid expenses and other assets |
(1,214) |
1,846 |
||
Trade accounts payable |
(1,267) |
139 |
||
Accrued expenses and other liabilities |
(15,536) |
(20,416) |
||
Restricted cash due to customers |
188,824 |
141,055 |
||
Due to customers |
(188,824) |
(141,055) |
||
Deferred revenue |
(6,758) |
(8,883) |
||
Net cash provided by operating activities |
12,764 |
6,757 |
||
Cash flows from investing activities |
||||
Purchase of property and equipment |
(2,719) |
(7,837) |
||
Capitalized software development costs |
(6,583) |
(5,798) |
||
Purchase of net assets of acquired companies, net of cash |
59 |
— |
||
Net cash used in investing activities |
(9,243) |
(13,635) |
||
Cash flows from financing activities |
||||
Proceeds from issuance of debt |
67,600 |
74,600 |
||
Payments on debt |
(53,794) |
(60,494) |
||
Employee taxes paid for withheld shares upon equity award settlement |
(14,828) |
(5,516) |
||
Proceeds from exercise of stock options |
11 |
3 |
||
Dividend payments to stockholders |
(5,765) |
(5,700) |
||
Net cash (used in) provided by financing activities |
(6,776) |
2,893 |
||
Effect of exchange rate on cash and cash equivalents |
225 |
707 |
||
Net decrease in cash and cash equivalents |
(3,030) |
(3,278) |
||
Cash and cash equivalents, beginning of period |
16,902 |
15,362 |
||
Cash and cash equivalents, end of period |
$ |
13,872 |
$ |
12,084 |
Blackbaud, Inc. |
||||||
(dollars in thousands, except per share amounts) |
Three months ended |
|||||
2017 |
2016 |
|||||
GAAP Revenue |
$ |
183,621 |
$ |
169,256 |
||
Non-GAAP adjustments: |
||||||
Add: Acquisition-related deferred revenue write-down |
— |
1,786 |
||||
Non-GAAP revenue |
$ |
183,621 |
$ |
171,042 |
||
GAAP gross profit |
$ |
98,139 |
$ |
89,367 |
||
GAAP gross margin |
53.4 |
% |
52.8 |
% |
||
Non-GAAP adjustments: |
||||||
Add: Acquisition-related deferred revenue write-down |
— |
1,786 |
||||
Add: Stock-based compensation expense |
791 |
845 |
||||
Add: Amortization of intangibles from business combinations |
9,855 |
9,881 |
||||
Add: Employee severance |
952 |
64 |
||||
Add: Acquisition-related integration costs |
86 |
— |
||||
Subtotal |
11,684 |
12,576 |
||||
Non-GAAP gross profit |
$ |
109,823 |
$ |
101,943 |
||
Non-GAAP gross margin |
59.8 |
% |
59.6 |
% |
||
GAAP income from operations |
$ |
10,579 |
$ |
10,612 |
||
GAAP operating margin |
5.8 |
% |
6.3 |
% |
||
Non-GAAP adjustments: |
||||||
Add: Acquisition-related deferred revenue write-down |
— |
1,786 |
||||
Add: Stock-based compensation expense |
9,294 |
7,743 |
||||
Add: Amortization of intangibles from business combinations |
10,546 |
10,633 |
||||
Add: Employee severance |
2,746 |
288 |
||||
Add: Acquisition-related integration costs |
230 |
383 |
||||
Add: Acquisition-related expenses |
570 |
113 |
||||
Subtotal |
23,386 |
20,946 |
||||
Non-GAAP income from operations |
$ |
33,965 |
$ |
31,558 |
||
Non-GAAP operating margin |
18.5 |
% |
18.5 |
% |
||
GAAP net income |
$ |
11,511 |
$ |
6,237 |
||
Shares used in computing GAAP diluted earnings per share |
47,482,840 |
47,064,164 |
||||
GAAP diluted earnings per share |
$ |
0.24 |
$ |
0.13 |
||
Non-GAAP adjustments: |
||||||
Add: Total Non-GAAP adjustments affecting income from operations |
23,386 |
20,946 |
||||
Less: Tax impact related to Non-GAAP adjustments |
(13,223) |
(7,613) |
||||
Non-GAAP net income |
$ |
21,674 |
$ |
19,570 |
||
Shares used in computing Non-GAAP diluted earnings per share |
47,482,840 |
47,064,164 |
||||
Non-GAAP diluted earnings per share |
$ |
0.46 |
$ |
0.42 |
Blackbaud, Inc. |
||||
(dollars in thousands) |
Three months ended |
|||
2017 |
2016 |
|||
Detail of certain Non-GAAP adjustments: |
||||
Stock-based compensation expense: |
||||
Included in cost of revenue: |
||||
Cost of subscriptions |
$ |
294 |
$ |
275 |
Cost of maintenance |
86 |
118 |
||
Cost of services and other |
411 |
452 |
||
Total included in cost of revenue |
791 |
845 |
||
Included in operating expenses: |
||||
Sales, marketing and customer success |
1,439 |
896 |
||
Research and development |
1,717 |
1,471 |
||
General and administrative |
5,347 |
4,531 |
||
Total included in operating expenses |
8,503 |
6,898 |
||
Total stock-based compensation expense |
$ |
9,294 |
$ |
7,743 |
Amortization of intangibles from business combinations: |
||||
Included in cost of revenue: |
||||
Cost of subscriptions |
$ |
7,911 |
$ |
7,811 |
Cost of maintenance |
1,293 |
1,332 |
||
Cost of services and other |
651 |
738 |
||
Total included in cost of revenue |
9,855 |
9,881 |
||
Included in operating expenses |
691 |
752 |
||
Total amortization of intangibles from business combinations |
$ |
10,546 |
$ |
10,633 |
Blackbaud, Inc. |
||||||
(dollars in thousands) |
Three months ended |
|||||
2017 |
2016 |
|||||
GAAP revenue |
$ |
183,621 |
$ |
169,256 |
||
GAAP revenue growth |
8.5 |
% |
||||
Add: Non-GAAP acquisition-related revenue (1) |
— |
1,786 |
||||
Total Non-GAAP adjustments |
— |
1,786 |
||||
Non-GAAP revenue (2) |
$ |
183,621 |
$ |
171,042 |
||
Non-GAAP organic revenue growth |
7.4 |
% |
||||
Non-GAAP revenue (2) |
$ |
183,621 |
$ |
171,042 |
||
Foreign currency impact on Non-GAAP revenue (3) |
140 |
— |
||||
Non-GAAP revenue on constant currency basis (3) |
$ |
183,761 |
$ |
171,042 |
||
Non-GAAP organic revenue growth on constant currency basis |
7.4 |
% |
||||
GAAP subscriptions revenue |
$ |
118,179 |
$ |
96,851 |
||
GAAP subscriptions revenue growth |
22.0 |
% |
||||
Add: Non-GAAP acquisition-related revenue (1) |
— |
1,754 |
||||
Total Non-GAAP adjustments |
— |
1,754 |
||||
Non-GAAP organic subscriptions revenue |
$ |
118,179 |
$ |
98,605 |
||
Non-GAAP organic subscriptions revenue growth |
19.9 |
% |
||||
GAAP subscriptions revenue |
$ |
118,179 |
$ |
96,851 |
||
GAAP maintenance revenue |
33,781 |
37,160 |
||||
GAAP recurring revenue |
$ |
151,960 |
$ |
134,011 |
||
GAAP recurring revenue growth |
13.4 |
% |
||||
Add: Non-GAAP acquisition-related revenue (1) |
— |
1,781 |
||||
Total Non-GAAP adjustments |
— |
1,781 |
||||
Non-GAAP recurring revenue |
$ |
151,960 |
$ |
135,792 |
||
Non-GAAP organic recurring revenue growth |
11.9 |
% |
||||
(1) Non-GAAP acquisition-related revenue excludes incremental acquisition-related revenue calculated in accordance with GAAP that is attributable to companies |
||||||
(2) Non-GAAP revenue for the prior year periods presented herein may not agree to non-GAAP revenue presented in the respective prior period quarterly financial |
||||||
(3) 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 in thousands) |
Three months ended |
|||
2017 |
2016 |
|||
GAAP net cash provided by operating activities |
$ |
12,764 |
$ |
6,757 |
Less: purchase of property and equipment |
(2,719) |
(7,837) |
||
Less: capitalized software development costs |
(6,583) |
(5,798) |
||
Non-GAAP free cash flow |
$ |
3,462 |
$ |
(6,878) |
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