Blackbaud BLKB impressed investors with its second-quarter 2024 financial performance, boasting non-GAAP earnings per share of $1.08, exceeding the Zacks Consensus Estimate by 3.9%. It marked a robust 10.2% year-over-year growth for the bottom line.
Revenue Performance
Total revenues surged 6% year over year to $287.3 million, primarily fueled by a rise in recurring revenues. Although revenues slightly missed the Zacks Consensus Estimate, the growth trajectory remains strong for Blackbaud.
Total recurring revenues contributed 98% to total revenues, amounting to $281.4 million, reflecting a notable 7.2% increase from the previous year. Meanwhile, one-time services and other revenues, accounting for 2% of the total, stood at $5.9 million, down by 31.7%.
Organic Growth and Margins
With a non-GAAP organic revenue increase of 6.7% and an organic recurring revenue surge of 7.2%, Blackbaud continues to strengthen its market presence. The company’s non-GAAP gross margin reached 62.9%, marking a significant improvement from the previous year’s 61.6%.
Total operating expenses saw a 19.3% decline year over year, totaling $120.5 million. Notably, Blackbaud demonstrated exceptional operational efficiency by registering a 260 basis points increase in non-GAAP operating margin, now standing at 30%.
Financial Health and Outlook
As of June 30, 2024, Blackbaud reported total cash, cash equivalents, and restricted cash of $831.1 million, a substantial increase from the previous quarter. Moreover, the company’s debt levels remained stable, providing confidence in its financial standing.
Blackbaud reiterated its 2024 financial guidance, highlighting an intensified focus on cybersecurity initiatives to enhance long-term customer benefits. The company remains steadfast in its commitment to driving growth and innovation, projecting strong performance in the coming quarters.
Stock Performance and Industry Outlook
Despite carrying a Zacks Rank #3 (Hold), Blackbaud’s solid earnings performance positions it well within the technology sector. Investors seeking growth opportunities may also consider other promising stocks like Badger Meter, Inc. (BMI), SAP SE (SAP), and NVIDIA Corporation.
Both Badger Meter and SAP have shown robust financial results, indicating positive growth trajectories. With a steady increase in earnings estimates and favorable market positions, these companies present compelling investment prospects within the sector.
NVIDIA Corporation, boasting an impressive long-term earnings growth rate, continues to deliver significant earnings surprises, reflecting its strong market position and growth potential.