Summary
Blackbaud operates as a cloud software firm focusing on the social good sector, with a wide range of services encompassing fundraising, digital marketing, and analytics, among others. At the end of Q3 2016, they reported having around 35,000 customers. The company is transitioning towards a subscription-based cloud model, which, although potentially beneficial in the long-term, impacts short-term revenue figures due to deferred recognition of subscription revenues.
The revenue increase for the quarter, excluding the impact of recent acquisitions, was driven primarily by the growth in cloud-based subscription solutions. Specifically, Blackbaud's Q3 2016 revenue stood at $183.1 million, with an income from operations of $13.5 million. The inclusion of Smart Tuition contributed significantly to these figures, adding $10.3 million to revenue and $1.0 million to operating income for the quarter.
Their growth strategy is multi-faceted, including enhancing cloud services, improving sales effectiveness, and expanding their market reach through strategic acquisitions like Attentive.ly. Blackbaud's acquisitions, such as the one for Smart Tuition, integrate additional services that bolster their software ecosystem yet also require careful management to maintain profitability amid these integrations.
Foreign currency exchange remained a headwind, decreasing total reported revenue by approximately $1.0 million for Q3 2016 due to adverse currency fluctuations, primarily between the U.S. dollar and the Canadian dollar. Despite these challenges, cash flow from operations was strong, generating $100.1 million over the nine months ending in September 2016.
Operational investments are particularly pronounced within their sales and marketing departments, underlined by rising expenses in stock-based compensation. These strategic investments aim to enhance sales efficiency and drive customer loyalty. Meanwhile, Blackbaud's retention has remained firm, boasting a customer retention rate of 92% for recurring revenue contracts.
There were no new risk factors flagged during this quarter, suggesting stability in operations relative to broader market conditions. However, ongoing attention to macroeconomic elements and the shift to a subscription model remain critical areas of focus.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2016 | Q2 FY2016 | QoQ | Q3 FY2015 | YoY |
|---|---|---|---|---|---|
| Revenue | $183.1M | $180.2M | +1.6% | $158.8M | +15.3% |
| Gross profit | $99.7M | $96.6M | +3.2% | $84.6M | +17.9% |
| Gross margin | 54.5% | 53.6% | +0.9 pp | 53.3% | +1.2 pp |
| Research & development | $22.5M | $22.6M | -0.3% | $20.6M | +9.5% |
| Sales & marketing | $40.7M | $39.3M | +3.5% | $31.1M | +30.7% |
| General & administrative | $22.3M | $19.9M | +12.4% | $18.4M | +21.0% |
| Total operating expenses | $86.2M | $82.5M | +4.6% | $70.7M | +22.0% |
| Operating income (loss) | $13.5M | $14.2M | -4.6% | $14.0M | -3.1% |
| Operating margin | 7.4% | 7.9% | -0.5 pp | 8.8% | -1.4 pp |
| Net income (loss) | $8.9M | $7.8M | +14.3% | $7.9M | +12.9% |
| Net margin | 4.9% | 4.3% | +0.5 pp | 5.0% | -0.1 pp |
| Diluted EPS | $0.19 | $0.17 | +$0.02 | $0.17 | +$0.02 |
Summary, forecast, risks and KPIs are extracted from BLACKBAUD INC's SEC filings for Q3 FY2016 (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 Aug 4, 2026.