Blackbaud (Nasdaq: BLKB), the leading cloud software company focused on the non-profit sector, recently announced its third quarter results that surpassed all market expectations. The company remains committed to growing its cloud offerings for the sector through product innovation, and this quarter was no different.
For the third quarter, Blackbaud’s revenues grew 5.4% to $221.4 million, ahead of the market’s forecast of $220 million. Adjusted EPS of $0.56 was also better than the Street’s forecast of $0.50.
By segment, recurring revenues, which include software subscriptions, grew 9% to $205.5 million and revenues from one-time services declined 24% to $15.9 million. Blackbaud has been focusing on building a subscriptions-based offering and the decline in the one-time revenues was on account of this push.
For the current year, Blackbaud expects to generate revenues of $880-$910 million with an EPS of $2.11-$2.28. The market was looking for revenues of $893.9 million with an EPS of $2.22.
Blackbaud’s Market Expansion
Blackbaud is working on establishing its presence in international markets given that one in four employees that it supports are outside of the US. To help employees located in various geographies successfully contribute to the social cause, it has expanded on the tie-ups with local and hyperlocal charitable organizations. Earlier this year, Blackbaud had announced the $157 million acquisition of corporate social responsibility software provider YourCause.
Prior to the acquisition, YourCause already had partnerships with CanadaHelps.org in Canada and Charities Trust in the United Kingdom to help employees access these markets. Recently, it expanded its partner network by tying up with GiveIndia, one of the largest giving platforms in India.
YourCause will help Blackbaud’s corporate customers get access to GiveIndia’s network of nearly 1,000 verified nonprofits in India. Blackbaud is working to implement payment technologies on the platform so that donations will be processed through various options such as payroll deductions, credit card, UPI and Netbanking. Through YourCause, BlackBaud’s Good Network now consists of hundreds of corporations and millions of employees in 170 countries.
Besides growing internationally, Blackbaud is also driving growth in verticals. For instance, for the faith community, it announced the general availability of its church management software, Blackbaud Church Management. The intuitive and easy-to-use, cloud-based software allows users to easily look up a member, take notes against their names, check in attendees, pull a report, and take a look at dashboards. The platform is mobile friendly and will help transform the day-to-day operations of churches by helping deliver a truly connected church experience. Since being launched, Blackbaud Church Management caters to churches in more than half of the 50 U.S. states. It helps these organizations with management of volunteers, bookkeeping, reporting, and analytics along with providing them access to simple workflows.
I am a big believer in Blackbaud’s capabilities to drive social change and have also tied up with the company to launch the Blackbaud – 1Mby1M Social Good Startup Challenge to encourage entrepreneurs with products that extend or complement Blackbaud vertical solutions.
Blackbaud’s stock is trading at $83.71 with a market capitalization of $4.2 billion. It was trading at a year high of $97.35 last month. It had fallen to a 52-week low of $58.23 in December last year.