Blackbaud, Inc. (NASDAQ:BLKB) delivered fourth-quarter 2019 non-GAAP earnings of 51 cents per share, outpacing the Zacks Consensus Estimate by 2%. However, the figure declined 21.5% from the year-ago quarter.
Total non-GAAP revenues increased 7.3% year over year to $238.1 million, beating the consensus mark by 2.9%
Quarter in Detail
Blackbaud reports maintenance and subscriptions under recurring revenues as it is shifting toward a cloud-based subscription model from the traditional revenue-based model.
Total non-GAAP recurring revenues for the reported quarter were $220.1 million, accounting for 92.4% of total non-GAAP revenues. The figure was also up 9.8% year over year.
One-time services and other revenues were $18 million, down 15.4% year over year.
Non-GAAP organic revenues improved 4.6% year over year to $231.9 million. Meanwhile, non-GAAP organic recurring revenues advanced 6.7% to $214 million.
Operating Details
Non-GAAP gross margin contracted 280 basis points (bps) on a year-over-year basis to 56%.
Research & development expenses, as a percentage of revenues, expanded 40 bps from the year-ago quarter to 10.9%. Moreover, sales, marketing & customer success, and general & administrative expenses expanded 200 bps and 20 bps, respectively.
Non-GAAP operating margin contracted 420 bps from the year-ago figure to 14.9%.
Balance Sheet & Cash Flow
As on Dec 31, 2019, Blackbaud had cash and cash equivalents of $31.8 million compared with $29.1 million as of Sep 30, 2019.
Total debt (including current portion) as of Dec 31, amounted to $467.1 million compared with $503.1 million as of Sep 30, 2019.
Cash flow from operating activities as of Dec 31, 2019 was $182.5 million. Non-GAAP free cash flow during the quarter was $46.1 million.
The company recently approved a quarterly dividend payment of 12 cents per share to be paid out on Mar 13 to shareholders of record as of Feb 28, 2020.
Guidance
For full-year 2020, the company anticipates revenues of $930-$955 million. The Zacks Consensus Estimate is currently pegged at $939 million, indicating year-over-year growth of 4.8%
Blackbaud anticipates non-GAAP earnings of $2.20-$2.35 per share for 2020. The Zacks Consensus Estimate is pegged at $2.23 per share, indicating year-over-year decline of 0.15%
Non-GAAP operating margin is projected to be 16%-16.5%.
Non-GAAP free cash flow is expected to be in the range of $100-$115 million for 2020.
Zacks Rank & Stocks to Consider
Blackbaud currently carries a Zacks Rank #3 (Hold).
Applied Materials, Inc. (NASDAQ:AMAT) , Alteryx, Inc. (NYSE:AYX) and Five9, Inc. (NASDAQ:FIVN) are some better-ranked stocks in the broader computer and technology sector. Applied Materials and Alteryx sport a Zacks Rank #1 (Strong Buy), while Five9 carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Materials, Alteryx and Five9 are set to report quarterly results on Feb 12, 13 and 19, respectively.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>
Applied Materials, Inc. (AMAT): Free Stock Analysis Report
Blackbaud, Inc. (BLKB): Free Stock Analysis Report
Five9, Inc. (FIVN): Free Stock Analysis Report
Alteryx, Inc. (AYX): Free Stock Analysis Report
Original post
Zacks Investment Research