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Blackbaud Announces 2017 Second Quarter Results
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Recurring Revenue Represents Over 80% of Total; Subscriptions Revenue Tops 65%; Management Reaffirms 2017 Full-Year Financial Guidance

CHARLESTON, S.C., July 31, 2017 /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the world's leading cloud software company powering social good, today announced financial results for its second quarter ended June 30, 2017.

"We're delivering powerful, integrated solutions in the cloud that provide our customers with a modern and truly unified experience," said Mike Gianoni, Blackbaud's president and CEO. "This is quite unique in our industry. Blackbaud is an end-to-end partner that builds, integrates, implements and supports its solutions—no other company in this market offers a value proposition as extensive. Our cloud solutions are fueling strong financial performance, further improving the predictability and stability of our business by shifting us towards a subscription-based revenue model, and positioning us for a long runway of growth ahead. Subscriptions revenue represented 65 percent of total revenue, a new all-time high for us, and non-GAAP organic subscriptions revenue was strong, growing 17 percent this quarter."

Second Quarter 2017 Results Compared to Second Quarter 2016 Results:

  • Total GAAP revenue was $192.2 million, up 6.7%, with $158.2 million in GAAP recurring revenue, representing 82.3% of total revenue, and $125.3 million in subscription revenue, representing 65.2% of total revenue.
  • Total non-GAAP revenue was $192.5 million, up 5.8%, with $158.5 million in non-GAAP recurring revenue, representing 82.3% of total non-GAAP revenue, and $125.6 million in subscription revenue, representing 65.2% of total revenue.
  • Non-GAAP organic revenue increased 4.5%, non-GAAP organic recurring revenue increased 9.1%, and non-GAAP organic subscription revenue increased 16.7%.
  • GAAP income from operations increased 22.9% to $16.7 million, with GAAP operating margin increasing 110 basis points to 8.7%.
  • Non-GAAP income from operations increased 16.8% to $40.6 million, with non-GAAP operating margin increasing 200 basis points to 21.1%.
  • GAAP net income increased 23.2% to $11.2 million, with GAAP diluted earnings per share of $0.23, up $0.04.
  • Non-GAAP net income increased 18.5% to $25.8 million, with non-GAAP diluted earnings per share of $0.54, up $0.08.
  • Non-GAAP free cash flow was $31.8 million, an increase of $0.9 million.

"We posted another solid quarter, which was in line with our expectations, and positions us well to achieve our full-year financial guidance and long-term aspirational goals," said Tony Boor, Blackbaud's executive vice president and CFO. "During the quarter, we completed the acquisition of AcademicWorks, adding exciting new scholarship management capabilities to our portfolio, and we also announced our intent to acquire JustGiving, which will expand our footprint in the peer-to-peer fundraising space."

An explanation of all non-GAAP financial measures referenced in this press release, including Blackbaud's definition of non-GAAP free cash flow, 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.

Recent Company Highlights:

  • Blackbaud acquired the market leading scholarship management platform, AcademicWorks™, extending its offerings for higher education, K-12, and corporate and foundation customers.
  • The company announced its intent to acquire United Kingdom-based fundraising services provider JustGiving™, whose online social giving platform has played a powerful role in the growth of peer-to-peer fundraising.
  • Blackbaud entered into a new credit facility on June 2 in the aggregate amount of $700 million as a result of successfully executing against the strategy Blackbaud laid out in 2014, causing the company to "outgrow" the existing credit facility.
  • Hundreds of private school professionals collaborated with peers on industry best practices, participated in over 90 hands-on training sessions, and heard from company executives during Blackbaud's annual K-12 user conference.
  • Blackbaud has been added to Standard & Poor's (S&P) MidCap 400 GICS (Global Industry Classification Standard) Application Software Sub-Industry index, underscoring its position as a leading innovative cloud company that is on a strong trajectory.
  • Blackbaud was recognized with several major awards and honors: The company was recognized on the Forbes America's Best Mid-Size Employers 2017 list and Forbes Most Innovative Growth Companies 2017 list for a second consecutive year; CognitionX named Blackbaud's modern, unique approach to social good-optimized Intelligence for Good™ "Best Use of AI for Charity"; and Raiser's Edge NXT™ and eTapestry® were named "Leaders" on the 2017 FrontRunners quadrant for Nonprofit Donor Software.

Visit www.blackbaud.com/press-room for more information about Blackbaud's recent highlights.

Dividend

Blackbaud announced today that its Board of Directors has declared a third quarter 2017 dividend of $0.12 per share payable on September 15, 2017 to stockholders of record on August 28, 2017.

Financial Outlook

Blackbaud today reaffirmed its 2017 full-year financial guidance.

  • 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

Blackbaud has not reconciled forward-looking full-year non-GAAP financial measures contained in this news release to their most directly comparable GAAP measures, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to compensation, acquisition transactions and integration, tax items or others that may arise during the year. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts.

Conference Call Details

What:

Blackbaud's 2017 Second Quarter Conference Call

When:

August 1, 2017

Time:

8:00 a.m. (Eastern Time)

Live Call:

877-616-0061 (domestic) or 719-325-4844 (international); passcode 780576.

Webcast:

Blackbaud's Investor Relations Webpage

About Blackbaud

Blackbaud (NASDAQ: BLKB) is the world's leading cloud software company powering social good. Serving the entire social good community—nonprofits, foundations, corporations, education institutions, healthcare institutions and individual change agents—Blackbaud connects and empowers organizations to increase their impact through software, services, expertise, and data intelligence. The Blackbaud portfolio is tailored to the unique needs of vertical markets, with solutions for fundraising and CRM, marketing, advocacy, peer-to-peer fundraising, corporate social responsibility, school management, ticketing, grantmaking, financial management, payment processing, and analytics. Serving the industry for more than three decades, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada and the United Kingdom. For more information, visit www.blackbaud.com.

Investor Contact:


Media Contact:


Mark Furlong


Nicole McGougan


Director of Investor Relations


Blackbaud Public Relations


843-654-2097


843-654-3307


mark.furlong@blackbaud.com


nicole.mcgougan@blackbaud.com


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 certain aspects of our operations, financial results and financial condition 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 Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: management of integration of acquired companies; uncertainty regarding increased business and renewals from existing customers; a shifting revenue mix that may impact gross margin; continued success in sales growth; risks related to our dividend policy and stock repurchase program, including the possibility that we might discontinue payment of dividends; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Blackbaud's investor relations department. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Trademarks

All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

Non-GAAP Financial Measures

Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP revenue, non-GAAP recurring revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share. Blackbaud has acquired businesses whose net tangible assets include deferred revenue. In accordance with GAAP reporting requirements, Blackbaud recorded write-downs of deferred revenue to fair value, which resulted in lower recognized revenue. Both on a quarterly and year-to-date basis, the revenue for the acquired businesses is deferred and typically recognized over a one-year period, so Blackbaud's GAAP revenues for the one-year period after the acquisitions will not reflect the full amount of revenues that would have been reported if the acquired deferred revenue was not written down to fair value. The non-GAAP measures described above reverse the acquisition-related deferred revenue write-downs so that the full amount of revenue booked by the acquired companies is included, which Blackbaud believes provides a more accurate representation of a revenue run-rate in a given period. In addition to reversing write-downs of acquisition-related deferred revenue, non-GAAP financial measures discussed above exclude the impact of certain items that Blackbaud believes are not directly related to its performance in any particular period, but are for its long-term benefit over multiple periods.

In addition, Blackbaud discusses non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic subscriptions revenue growth and non-GAAP organic recurring revenue growth, which it believes provides useful information for evaluating the periodic growth of its business on a consistent basis. Each of these measures excludes incremental acquisition-related revenue attributable to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, each of these measures 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 non-GAAP revenue attributable to those companies, as if there were no acquisition-related write-downs of acquired deferred revenue to fair value as required by GAAP. In addition, each of these measures excludes prior period revenue associated with divested businesses. The exclusion of the prior period revenue is to present the results of the divested businesses within the results of the combined company for the same period of time in both the prior and current periods. Blackbaud believes this presentation provides a more comparable representation of its current business' organic revenue growth and revenue run-rate.

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 uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Blackbaud's ongoing operational performance. Blackbaud believes that these non-GAAP financial measures reflect the Blackbaud's ongoing business in a manner that allows for meaningful period-to-period comparison and analysis of trends in its business. In addition, Blackbaud believes that the use of these non-GAAP financial measures provides additional information for investors to use in evaluating ongoing operating results and trends and in comparing its financial results from period-to-period with other companies in Blackbaud's industry, many of which present similar non-GAAP financial measures to investors. However, these non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to differences in the exact method of calculation between companies. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.

 


Blackbaud, Inc.

Consolidated balance sheets

(Unaudited)


(dollars in thousands)

June 30,
2017


December 31,
2016


Assets



Current assets:



Cash and cash equivalents

$

17,268


$

16,902


Restricted cash due to customers

289,232


353,771


Accounts receivable, net of allowance of $3,738 and $3,291 at June 30, 2017 and December 31, 2016, respectively

129,890


88,932


Prepaid expenses and other current assets

51,285


48,314


  Total current assets

487,675


507,919


Property and equipment, net

45,679


50,269


Software development costs, net

44,962


37,582


Goodwill

472,643


438,240


Intangible assets, net

263,347


253,676


Other assets

24,080


22,524


Total assets

$

1,338,386


$

1,310,210


Liabilities and stockholders' equity



Current liabilities:



Trade accounts payable

$

17,660


$

23,274


Accrued expenses and other current liabilities

46,508


54,196


Due to customers

289,232


353,771


Debt, current portion

7,500


4,375


Deferred revenue, current portion

280,816


244,500


  Total current liabilities

641,716


680,116


Debt, net of current portion

380,162


338,018


Deferred tax liability

40,780


29,558


Deferred revenue, net of current portion

6,067


6,440


Other liabilities

7,572


8,533


Total liabilities

1,076,297


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, 58,456,066 and 57,672,401 shares issued at June 30, 2017 and December 31, 2016, respectively

58


58


Additional paid-in capital

330,559


310,452


Treasury stock, at cost; 10,397,768 and 10,166,801 shares at June 30, 2017 and December 31, 2016, respectively

(231,881)


(215,237)


Accumulated other comprehensive loss

(558)


(457)


Retained earnings

163,911


152,729


Total stockholders' equity

262,089


247,545


Total liabilities and stockholders' equity

$

1,338,386


$

1,310,210


 

 


Blackbaud, Inc.

Consolidated statements of comprehensive income

(Unaudited)


(dollars in thousands, except per share amounts)

Three months ended
June 30,



Six months ended
June 30,


2017


2016



2017


2016


Revenue






Subscriptions

$

125,252


$

104,039



$

243,431


$

200,890


Maintenance

32,917


37,449



66,698


74,609


Services and other

34,026


38,703



65,687


73,948


Total revenue

192,195


180,191



375,816


349,447


Cost of revenue






Cost of subscriptions

57,365


52,163



112,291


101,829


Cost of maintenance

5,871


5,698



11,853


11,016


Cost of services and other

23,759


25,751



48,333


50,656


Total cost of revenue

86,995


83,612



172,477


163,501


Gross profit

105,200


96,579



203,339


185,946


Operating expenses






Sales, marketing and customer success

42,961


39,408



85,201


75,017


Research and development

22,870


22,748



45,576


45,463


General and administrative

21,882


20,091



43,805


39,770


Amortization

739


708



1,430


1,460


Total operating expenses

88,452


82,955



176,012


161,710


Income from operations

16,748


13,624



27,327


24,236


Interest expense

(3,216)


(2,721)



(5,593)


(5,396)


Other income (expense), net

827


(65)



1,113


(170)


Income before provision for income taxes

14,359


10,838



22,847


18,670


Income tax provision

3,194


1,778



171


3,373


Net income

$

11,165


$

9,060



$

22,676


$

15,297


Earnings per share






Basic

$

0.24


$

0.20



$

0.49


$

0.33


Diluted

$

0.23


$

0.19



$

0.48


$

0.32


Common shares and equivalents outstanding






Basic weighted average shares

46,662,481


46,083,055



46,584,263


46,047,788


Diluted weighted average shares

47,691,340


47,263,844



47,586,893


47,184,926


Dividends per share

$

0.12


$

0.12



$

0.24


$

0.24


Other comprehensive (loss) income






Foreign currency translation adjustment

(379)


(431)



(279)


(28)


Unrealized (loss) gain on derivative instruments, net of tax

(4)


(118)



178


(787)


Total other comprehensive loss

(383)


(549)



(101)


(815)


Comprehensive income

$

10,782


$

8,511



$

22,575


$

14,482



 

 

Blackbaud, Inc.

Consolidated statements of cash flows

(Unaudited)



Six months ended
June 30,


(dollars in thousands)

2017


2016


Cash flows from operating activities



Net income

$

22,676


$

15,297


Adjustments to reconcile net income to net cash provided by operating activities:



Depreciation and amortization

36,481


35,549


Provision for doubtful accounts and sales returns

5,469


2,264


Stock-based compensation expense

20,129


16,187


Deferred taxes

(1,239)


(287)


Amortization of deferred financing costs and discount

468


478


Other non-cash adjustments

(540)


(429)


Changes in operating assets and liabilities, net of acquisition and disposal of businesses:



  Accounts receivable

(44,887)


(30,097)


  Prepaid expenses and other assets

(2,501)


(6,011)


  Trade accounts payable

(3,951)


8,857


  Accrued expenses and other liabilities

(8,467)


(12,713)


  Restricted cash due to customers

64,288


62,038


  Due to customers

(64,288)


(62,038)


  Deferred revenue

30,913


19,658


Net cash provided by operating activities

54,551


48,753


Cash flows from investing activities



Purchase of property and equipment

(5,666)


(12,569)


Capitalized software development costs

(13,614)


(12,168)


Purchase of net assets of acquired companies, net of cash

(49,729)


530


Purchase of derivative instruments

(516)



Net cash used in investing activities

(69,525)


(24,207)


Cash flows from financing activities



Proceeds from issuance of debt

575,700


120,900


Payments on debt

(529,169)


(126,088)


Debt issuance costs

(3,085)



Employee taxes paid for withheld shares upon equity award settlement

(16,644)


(8,037)


Proceeds from exercise of stock options

14


5


Dividend payments to stockholders

(11,530)


(11,398)


Net cash provided by (used in) financing activities

15,286


(24,618)


Effect of exchange rate on cash and cash equivalents

54


(27)


Net increase (decrease) in cash and cash equivalents

366


(99)


Cash and cash equivalents, beginning of period

16,902


15,362


Cash and cash equivalents, end of period

$

17,268


$

15,263


 

 


Blackbaud, Inc.

Reconciliation of GAAP to non-GAAP financial measures

(Unaudited)


(dollars in thousands, except per share amounts)

Three months ended
June 30,



Six months ended
June 30,


2017


2016



2017


2016


GAAP Revenue

$

192,195


$

180,191



$

375,816


$

349,447


Non-GAAP adjustments:






Add: Acquisition-related deferred revenue write-down

348


1,853



348


3,639


Non-GAAP revenue

$

192,543


$

182,044



$

376,164


$

353,086








GAAP gross profit

$

105,200


$

96,579



$

203,339


$

185,946


GAAP gross margin

54.7

%

53.6

%


54.1

%

53.2

%

Non-GAAP adjustments:






Add: Acquisition-related deferred revenue write-down

348


1,853



348


3,639


Add: Stock-based compensation expense

950


842



1,741


1,687


Add: Amortization of intangibles from business combinations

10,072


9,927



19,927


19,808


Add: Employee severance

21


78



973


142


Add: Acquisition-related integration costs




86



Subtotal

11,391


12,700



23,075


25,276


Non-GAAP gross profit

$

116,591


$

109,279



$

226,414


$

211,222


Non-GAAP gross margin

60.6

%

60.0

%


60.2

%

59.8

%







GAAP income from operations

$

16,748


$

13,624



$

27,327


$

24,236


GAAP operating margin

8.7

%

7.6

%


7.3

%

6.9

%

Non-GAAP adjustments:






Add: Acquisition-related deferred revenue write-down

348


1,853



348


3,639


Add: Stock-based compensation expense

10,835


8,444



20,129


16,187


Add: Amortization of intangibles from business combinations

10,811


10,635



21,357


21,268


Add: Employee severance

120


113



2,866


401


Add: Acquisition-related integration costs


119



230


502


Add: Acquisition-related expenses

1,762




2,332


113


Subtotal

23,876


21,164



47,262


42,110


Non-GAAP income from operations

$

40,624


$

34,788



$

74,589


$

66,346


Non-GAAP operating margin

21.1

%

19.1

%


19.8

%

18.8

%







GAAP net income

$

11,165


$

9,060



$

22,676


$

15,297








Shares used in computing GAAP diluted earnings per share

47,691,340


47,263,844



47,586,893


47,184,926


GAAP diluted earnings per share

$

0.23


$

0.19



$

0.48


$

0.32








Non-GAAP adjustments:






Add: Total Non-GAAP adjustments affecting income from operations

23,876


21,164



47,262


42,110


Less: Gain on derivative instrument

(475)




(475)



Add: Loss on debt extinguishment

162




162



Less: Tax impact related to Non-GAAP adjustments

(8,941)


(8,463)



(22,164)


(16,076)


Non-GAAP net income

$

25,787


$

21,761



$

47,461


$

41,331








Shares used in computing Non-GAAP diluted earnings per share

47,691,340


47,263,844



47,586,893


47,184,926


Non-GAAP diluted earnings per share

$

0.54


$

0.46



$

1.00


$

0.88


 

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP financial measures (continued)

(Unaudited)


(dollars in thousands)

Three months ended
June 30,



Six months ended
June 30,


2017


2016



2017


2016


Detail of certain Non-GAAP adjustments:






Stock-based compensation expense:






  Included in cost of revenue:






Cost of subscriptions

$

338


$

311



$

632


$

586


Cost of maintenance

105


136



191


254


Cost of services and other

507


395



918


847


  Total included in cost of revenue

950


842



1,741


1,687


  Included in operating expenses:






Sales, marketing and customer success

1,781


1,021



3,220


1,917


Research and development

2,067


1,729



3,784


3,200


General and administrative

6,037


4,852



11,384


9,383


  Total included in operating expenses

9,885


7,602



18,388


14,500


Total stock-based compensation expense

$

10,835


$

8,444



$

20,129


$

16,187








Amortization of intangibles from business combinations:






  Included in cost of revenue:






Cost of subscriptions

$

8,127


$

7,853



$

16,038


$

15,664


Cost of maintenance

1,289


1,332



2,582


2,664


Cost of services and other

656


742



1,307


1,480


  Total included in cost of revenue

10,072


9,927



19,927


19,808


  Included in operating expenses

739


708



1,430


1,460


Total amortization of intangibles from business combinations

$

10,811


$

10,635



$

21,357


$

21,268


 

 


Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP financial measures (continued)

(Unaudited)


(dollars in thousands)

Three months ended
June 30,



Six months ended
June 30,


2017


2016



2017


2016


GAAP revenue

$

192,195


$

180,191



$

375,816


$

349,447


GAAP revenue growth

6.7

%



7.5

%


(Less) Add: Non-GAAP acquisition-related revenue (1)

(1,914)


1,853



(1,914)


3,639


Total Non-GAAP adjustments

(1,914)


1,853



(1,914)


3,639


Non-GAAP revenue (2)

$

190,281


$

182,044



$

373,902


$

353,086


Non-GAAP organic revenue growth

4.5

%



5.9

%








Non-GAAP revenue (2)

$

190,281


$

182,044



$

373,902


$

353,086


Foreign currency impact on Non-GAAP revenue (3)

1,125




1,265



Non-GAAP revenue on constant currency basis (3)

$

191,406


$

182,044



$

375,167


$

353,086


Non-GAAP organic revenue growth on constant currency basis

5.1

%



6.3

%








GAAP subscriptions revenue

$

125,252


$

104,039



$

243,431


$

200,890


GAAP subscriptions revenue growth

20.4

%



21.2

%


(Less) Add: Non-GAAP acquisition-related revenue (1)

(1,763)


1,780



(1,763)


3,534


Total Non-GAAP adjustments

(1,763)


1,780



(1,763)


3,534


Non-GAAP organic subscriptions revenue

$

123,489


$

105,819



$

241,668


$

204,424


Non-GAAP organic subscriptions revenue growth

16.7

%



18.2

%








GAAP subscriptions revenue

$

125,252


$

104,039



$

243,431


$

200,890


GAAP maintenance revenue

$

32,917


$

37,449



66,698


74,609


GAAP recurring revenue

$

158,169


$

141,488



$

310,129


$

275,499


GAAP recurring revenue growth

11.8

%



12.6

%


(Less) Add: Non-GAAP acquisition-related revenue (1)

(1,763)


1,844



(1,763)


3,625


Total Non-GAAP adjustments

(1,763)


1,844



(1,763)


3,625


Non-GAAP recurring revenue

$

156,406


$

143,332



$

308,366


$

279,124


Non-GAAP organic recurring revenue growth

9.1

%



10.5

%


(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 non-GAAP revenue from the acquisition-related deferred revenue write-down attributable to those 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 information solely due to the manner in which non-GAAP organic revenue growth is calculated.

(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 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.


(dollars in thousands)

Six months ended
 June 30,


2017


2016


GAAP net cash provided by operating activities

$

54,551


$

48,753


Less: purchase of property and equipment

(5,666)


(12,569)


Less: capitalized software development costs

(13,614)


(12,168)


Non-GAAP free cash flow

$

35,271


$

24,016


 


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SOURCE Blackbaud