Cloud-based software company Blackbaud (NASDAQ:BLKB) reported a 62.3% year-on-year increase in its Q3 2023 non-GAAP earnings, reaching $1.12 per share. This result exceeded the Zacks Consensus Estimate by 15.5%. The company's total revenues also saw a rise of 6.2% YoY to $277.6 million, slightly above the Zacks estimate. This growth was primarily driven by a 7.9% increase in recurring revenues, which reached $269 million.
However, one-time services and other revenues experienced a decline of 27.8% to $8.6 million. Despite this drop, Blackbaud's non-GAAP gross margin expanded by 280 basis points to 62.4%. Concurrently, operating expenses rose by 9.2% to $133.8 million but contracted as a percentage of revenues by 820 basis points to 48.2%. The company's non-GAAP operating margin and EBITDA margin also saw significant expansion, widening by 960 and 940 basis points to reach 28.7% and 35%, respectively.
As of the end of September, Blackbaud's cash and equivalents totaled $390.7 million, down from $790.3 million at the end of June. The company's total debt also decreased to $723.4 million from $846.6 million over the same period. Cash from operating activities for Q3 was reported at $128 million, with non-GAAP adjusted free cash flow standing at $117.6 million.
Looking ahead, Blackbaud reiterated its annual guidance for non-GAAP revenues between $1.095 billion and $1.125 billion, with EPS expected between $3.63 and $3.94. The company also forecasted an annual non-GAAP adjusted free cash flow in the range of $190-$210 million.
In comparison to other tech stocks, Asure Software (NASDAQ:ASUR) projects a 2023 EPS of 54 cents with a share growth of 28.2%, while VMware (NYSE:VMW) has a projected fiscal 2024 EPS of $7.23 with a share growth of 30.1%. Synopsys (NASDAQ:SNPS)' fiscal 2023 EPS is estimated at $11.09 with a share growth of 67%.
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