Blackbaud Announces 2018 Fourth Quarter and Full Year Results
Thursday, February 7th, 2019
Blackbaud, the world's leading cloud software company powering social good, announced financial results for its fourth quarter and full year ended December 31, 2018.
"We had a solid finish to 2018 and we furthered our strategic initiatives to position the company for long-term success," said Mike Gianoni, Blackbaud's president and CEO. "We continued shifting the business towards a recurring revenue model, with our recurring revenue mix comprising 90% of total revenue in 2018. This was a banner year for Blackbaud innovation to digitally transform the markets we serve. The Blackbaud SKY platform has reached a level of maturity that enables us to bring new solutions to market like our entirely new Cloud Solution for Faith Based Communities, expanded Cloud Solution for Higher Education Institutions, and Nonprofit Resource Management, which is part of a joint initiative with Microsoft. And, we're rapidly advancing existing capabilities for our growing base of over 45,000 customers and millions of individual users worldwide."
Fourth Quarter 2018 Results Compared to Fourth Quarter 2017 Results:
Total GAAP revenue was $221.2 million, up 1.8%, with $199.9 million in GAAP recurring revenue, representing 90.4% of total GAAP revenue. GAAP recurring revenue was up 4.9%.
Total non-GAAP revenue was $221.8 million, up 1.2%, with $200.5 million in non-GAAP recurring revenue, representing 90.4% of total non-GAAP revenue. Non-GAAP recurring revenue was up 4.2%.
Non-GAAP organic recurring revenue increased 2.8%.
GAAP income from operations decreased 26.5% to $14.7 million, with GAAP operating margin decreasing 260 basis points to 6.6%.
Non-GAAP income from operations decreased 10.3% to $42.3 million, with non-GAAP operating margin decreasing 240 basis points to 19.1%.
GAAP net income decreased 74.5% to $9.3 million, with GAAP diluted earnings per share of $0.19, down $0.57.
Non-GAAP net income increased 3.5% to $31.3 million, with non-GAAP diluted earnings per share of $0.65, up $0.02.
Non-GAAP free cash flow was $50.7 million, an increase of 17.0%.
"Our fourth quarter results allowed us to exceed the mid-point of our updated full year revenue guidance, and exceed the high-end of our updated ranges for both profitability and cash flow," said Tony Boor, Blackbaud's executive vice president and CFO. "In 2019, we expect the positive shift in revenue mix towards recurring revenue to continue, and from a profitability and cash flow perspective, 2019 is an investment year to further expand our selling footprint, drive cloud innovation for our customers, and ensure scalability in our business."
An explanation of all non-GAAP financial measures referenced in this press release 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:
The company introduced Blackbaud Purchase Cards and Expense Management in Blackbaud Financial Edge NXT, helping social good organizations streamline financial processes and maximize mission delivery.
Blackbaud announced the results of a commissioned Total Economic Impact study conducted by Forrester Consulting, which examines the return on investment that arts and cultural organizations may experience by engaging Blackbaud Target Analytics.
Blackbaud announced the acquisition of YourCause, a market leader in enterprise philanthropy, corporate social responsibility and employee engagement software, effective January 2, 2019.
Forbes recognized Blackbaud as one of America's Best Employers for Diversity for the second consecutive year.
Blackbaud reported a new #GivingTuesday record, announcing that its systems processed more than $62.6 million from charitable organizations receiving donations in the United States on #GivingTuesday in the strongest year yet. Average gift sizes and mobile giving were up year over year, and online donations were also up again for the seventh year running.
Full-Year 2018 Results Compared to Full-Year 2017 Results:
Total GAAP revenue was $848.6 million, up 7.6%, with $762.2 million in GAAP recurring revenue, representing 89.8% of total GAAP revenue.
Total non-GAAP revenue was $851.0 million, up 7.6%, with $764.5 million in non-GAAP recurring revenue, representing 89.8% of total non-GAAP revenue. Non-GAAP recurring revenue was up 11.3%.
Non-GAAP organic recurring revenue increased 5.6%.
GAAP income from operations decreased 12.9% to $59.4 million, with GAAP operating margin decreasing 160 basis points to 7.0%.
Non-GAAP income from operations increased 2.3% to $170.5 million, with non-GAAP operating margin decreasing 110 basis points to 20.0%.
GAAP net income decreased 39.1% to $44.8 million, with GAAP diluted earnings per share down $0.61 to $0.93.
Non-GAAP net income increased 16.9% to $124.6 million, with non-GAAP diluted earnings per share up $0.36 to $2.59.
Non-GAAP free cash flow was $149.0 million, an increase of 8.2%.
Blackbaud announced that its Board of Directors has declared a first quarter 2019 dividend of $0.12 per share payable on March 15, 2019 to stockholders of record on February 27, 2019.
Blackbaud today announced its 2019 full year financial guidance, which includes the acquisition of YourCause:
Non-GAAP revenue of $880 million to $910 million
Non-GAAP operating margin of 16.7% to 17.2%
Non-GAAP diluted earnings per share of $2.11 to $2.28
Non-GAAP free cash flow of $124 million to $134 million