Summary
Blackbaud's fiscal 2021 first quarter showed a split between tepid GAAP results and much stronger non-GAAP profitability. Total GAAP revenue was $219.2 million, down 2.0% from the prior-year quarter. GAAP gross profit was $115.8 million, down 2.5%, and gross margin was 52.8%, down 0.3 percentage points. GAAP income from operations was $6.6 million, down 21.1%, with operating margin at 3.0%, down 0.7 percentage points. The bottom line swung to a GAAP net loss of $0.2 million, and GAAP diluted EPS was $0.00, down from the prior-year quarter. The GAAP figures reflect heavy stock-based compensation and other costs that management excludes from its non-GAAP view.
Non-GAAP results were brighter. Non-GAAP gross profit was $130.3 million, with non-GAAP gross margin of 59.4%. Non-GAAP income from operations was $47.2 million, and non-GAAP operating margin was 21.5%, up 630 basis points. Non-GAAP net income was $32.8 million, with non-GAAP diluted EPS of $0.68, up $0.17. Non-GAAP adjusted EBITDA was $57.2 million, up $12.5 million, at a 26.1% margin. Non-GAAP organic recurring revenue increased 0.9%, while non-GAAP organic revenue fell 2.0%. The company reported a Rule of 40 score of 24.1%.
Cash generation improved sharply. GAAP net cash provided by operating activities was $30.1 million, up $54.6 million from the prior-year quarter. Capital expenditures were $3.5 million, up $0.6 million. Non-GAAP free cash flow was $17.3 million, up $55.6 million. Deferred revenue was $294.5 million, up 1.4% from the prior-year quarter. Management said its latest modeling gives it heightened confidence that it could see upside to its best estimate for full-year 2021, and that favorable trends plus foreign exchange rates significantly reduce the likelihood of its downside revenue scenario.
Operationally, Blackbaud highlighted strength in online payments, durability in recurring revenue, and solid bookings performance in the quarter that was favorable to both its plan and its first quarter 2020 bookings performance. The company said approximately 93% of customers with recurring revenue contracts were retained for the twelve months ended March 31, 2021, unchanged from the full year ended December 31, 2020. Its Charitable Giving Report found online giving grew 21% in 2020. Management also pointed to a total addressable market of over $10 billion with less than 10% penetration, and said it is accelerating investments in digital marketing, engineering, security, and customer success. The company released its annual social responsibility report, joined the UN Global Compact, and expanded ESG disclosures aligned with SASB and GRI standards.
Risks remain. COVID-19 continues to make the social good industry uncertain, and management said cautious customer purchase decisions could keep the operating environment challenging for the remainder of 2021 and potentially beyond. Bookings shortfalls that began in March 2020 are pressuring contractual recurring revenue growth in the near term. One-time services and other revenue continues to decline and creates a drag on overall revenue growth. The company also lists cybersecurity and data protection risks, integration of acquired companies, a shifting revenue mix that may impact gross margin, and potential litigation. Foreign exchange fluctuations increased total revenue by $2.0 million and income from operations by $0.7 million for the three months ended March 31, 2021. At March 31, 2021, Blackbaud reported a net leverage ratio of 1.79 to 1.00 and said it was in compliance with its debt covenants, with $406.0 million of available borrowing capacity under its 2020 Credit Facility.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2021 | Q4 FY2020 | QoQ | Q1 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $219.2M | $242.6M | -9.7% | $223.6M | -2.0% |
| Gross profit | $115.8M | $123.0M | -5.9% | $118.8M | -2.5% |
| Gross margin | 52.8% | 50.7% | +2.1 pp | 53.1% | -0.3 pp |
| Research & development | $29.2M | $27.5M | +6.1% | $25.0M | +16.8% |
| Sales & marketing | $48.8M | $50.6M | -3.6% | $58.7M | -16.9% |
| General & administrative | $30.6M | $45.0M | -32.1% | $25.9M | +18.3% |
| Total operating expenses | $109.2M | $123.9M | -11.9% | $110.3M | -1.1% |
| Operating income (loss) | $6.6M | -$850.0K | +881.6% | $8.4M | -21.1% |
| Operating margin | 3.0% | -0.3% | +3.4 pp | 3.8% | -0.7 pp |
| Net income (loss) | -$164.0K | -$13.6M | +98.8% | $4.6M | -103.5% |
| Net margin | -0.1% | -5.6% | +5.5 pp | 2.1% | -2.1 pp |
| Diluted EPS | $0.00 | -$0.28 | +$0.28 | $0.10 | -$0.10 |
Risks
Blackbaud is still resolving the July 2020 Security Incident in which a cybercriminal removed a copy of a subset of data from its self-hosted environment. As of the filing the company had received approximately 630 customer reimbursement claims (none yet filed in court or arbitration) and is a defendant in 30 putative consumer class action cases (27 in U.S. federal courts, 1 in a U.S. state court, 2 in Canadian courts).
The Security Incident has drawn governmental scrutiny, including a consolidated multi-state Civil Investigative Demand on behalf of 47 state Attorneys General and the District of Columbia, a separate CID from the Illinois Attorney General, and communications and requests from the FTC, HHS, SEC, the U.K. ICO, the Office of the Australian Information Commissioner and the Office of the Privacy Commissioner of Canada. Authorities could seek undertakings, injunctive relief, consent decrees or civil or criminal penalties that materially increase data security costs or alter how the company operates.
The company states future publicity or developments related to the Security Incident could cause loss of customer confidence, reduced customer demand, reduced customer retention and associated retention and recruiting difficulties. For the twelve months ended March 31, 2021, approximately 93% of customers with recurring revenue contracts were retained, unchanged from the full year ended December 31, 2020.
COVID-19 remains an overhang: the company says bookings shortfalls that began in March 2020 are putting pressure on contractual recurring revenue growth in the near term, and if customers remain cautious the operating environment may stay challenging for the remainder of 2021 and beyond. Total revenue decreased 2.0% in the quarter ended March 31, 2021 versus the prior-year quarter, and contractual recurring revenue fell $0.9 million on lower maintenance revenue tied to cloud migrations and 2020 bookings shortfalls.
One-time services and other revenue decreased 33.7% in the quarter ended March 31, 2021 versus the prior-year quarter, driven by a $4.7 million drop in one-time consulting revenue (less implementation and customization work after the 2020 commission plan change and COVID-19 bookings shortfalls) and a $1.0 million drop in one-time analytics revenue as analytics are bundled into cloud solutions. Total gross margin fell 0.3 pp to 52.8% and operating margin fell 0.7 pp to 3.0% in the quarter.
Stock-based compensation rose $16.4 million in the quarter ended March 31, 2021 versus the prior-year quarter, reflecting the replacement of annual cash bonus plans with a short-term performance-based equity plan, higher grant date fair values, COVID-19 equity awards in lieu of 2020 merit increases, and a shortened vesting period. This contributed to operating income decreasing 21.1% and net income swinging to a loss of $0.2 million in the quarter, and the May 2020 equity grants vesting in May 2021 are expected to increase cash taxes paid on employees' behalf in the second quarter of 2021.
Cash and cash equivalents were $27.8 million at March 31, 2021, the carrying amount of debt under the 2020 Credit Facility was $488.8 million, working capital was negative $180.9 million, and total contractual obligations were $739.6 million. The company also has a stated ability under the 2020 Credit Facility to declare dividends and repurchase shares only if no default exists and its pro forma net leverage ratio is 0.25 below the covenant requirement; the net leverage ratio was 1.79 to 1.00 at March 31, 2021.
SaaS KPIs
All quarters →Non-GAAP Adjusted EBITDA Margin
Non-GAAP Operating Margin
Non-GAAP Organic Recurring Revenue Growth
Rule of 40
Non-GAAP Organic Revenue Growth
Non-GAAP Free Cash Flow
Non-GAAP Adjusted EBITDA
Non-GAAP Organic Recurring Revenue
Non-GAAP Organic Revenue Growth (constant currency)
Summary, forecast, risks and KPIs are extracted from BLACKBAUD INC's SEC filings for Q1 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.