It has been about a month since the last earnings report for Blackbaud (BLKB). Shares have added about 2.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Blackbaud due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Blackbaud Q4 Earnings Beat Estimates
Blackbaud
delivered non-GAAP earnings of 75 cents per share in fourth-quarter 2021, which beat the Zacks Consensus Estimate by 11.9%. The bottom line declined 11.8% year over year.
Total revenues increased 2.2% year over year to $247.9 million and surpassed the consensus mark by 2.2%.
For 2021, total revenues increased 1.6% year over year to $927.7 million. Non-GAAP earnings amounted to $3.04 per share, up 3.4% year over year.
Quarter in Detail
Total recurring revenues in the reported quarter were $238.6 million, up 4% and contributed 96.2% to total revenues.
Non-GAAP organic revenues were up 2.2% year over year. Non-GAAP organic revenues on a constant currency (CC) basis amounted to $247.1 million, up 1.9% year over year. Non-GAAP organic recurring revenues rose 4% year over year.
One-time services and other revenues (3.8% of total revenues) amounted to $9.3 million, down 28.8% year over year.
Recent Business Highlights
Blackbaud continues to add technological innovations specifically designed to support the unique needs of social organizations amid the COVID-19 outbreak, which might have improved the reputation of the company’s brand and enhanced recognition for its products.
Higher adoption of Blackbaud’s new solutions is likely to drive the top line and boost retention among existing customers.
Margin Details
Non-GAAP gross margin came in at 55.3% compared with 57.1% reported in the prior-year quarter.
Total operating expenses were up 5.3% on a year-over-year basis to $130.5 million. As a percentage of revenues, the figure contracted 160 bps to 52.6%.
Non-GAAP operating margin contracted 420 basis points (bps) from the year-ago quarter’s figure to 19.8%.
Non-GAAP adjusted EBITDA margin came in at 24.5% in the fourth quarter, down 390 bps year over year.
Balance Sheet & Cash Flow
As of Dec 31, 2021, Blackbaud had total cash, cash equivalents and restricted cash of $651.6 million compared with $243.7 million as of Sep 30, 2021.
Total debt (including current portion) as of Dec 31, 2021, amounted to $956.2 million compared with $527.4 million as of Sep 30, 2021.
Cash provided by operating activities for three months ended Dec 31, 2021, was $43.9 million compared with $69.9 million for three months ended Sep 30, 2021.
Non-GAAP free cash flow for the fourth quarter was $29.7 million compared with $57.9 million of non-GAAP free cash flow in the previous quarter.
In the quarter under review, Blackbaud repurchased 138,785 shares worth $10.1 million. In December 2021, the company replenished its current buyback program to $250 million.
For 2021, cash provided by operating activities was $213.7 million compared with $148 million for 2020. Non-GAAP free cash flow for 2021 was $161.5 million.
2022 Guidance
Blackbaud expects non-GAAP revenues between $1.075 billion and $1.095 billion. The forecast includes a $120-million contribution from EVERFI.
The company projects a non-GAAP adjusted EBITDA margin in the range of 24-24.5%. Non-GAAP earnings are expected to be between $2.63 and $2.82 per share.
Adjusted free cash flow for the year is forecast in the range of $165 -$175 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 27.59% due to these changes.
VGM Scores
At this time, Blackbaud has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Blackbaud has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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