BLACKBAUD, INC. Fourth Quarter Revenue Growth of 12.8%; Non-GAAP Organic Revenue Growth of 11.3%; Achieves 2016 Full Year Financial Guidance; Announces 2017 Full Year Financial Guidance
CHARLESTON, S.C., Feb. 8, 2017 /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the world's leading cloud software company powering social good, today announced financial results for its fourth quarter and fiscal year ended December 31, 2016.
"This was a banner year for Blackbaud in which we furthered our strategic growth objectives and strengthened the financial profile of the business," said Mike Gianoni, Blackbaud president and CEO. "Our recurring revenue reached 80 percent of total revenue in the fourth quarter, which is a major milestone for us, and the highest in our company's history. We made tremendous progress delivering new, innovative, cloud-based technology to the market that drove an increase in our mix of subscription-based recurring revenue, which adds additional stability and predictability to our already strong business."
Fourth Quarter 2016 Results Compared to Fourth Quarter 2015 Results:
-- Total GAAP revenue was $198.3 million, up 12.8%, with $158.6 million in
GAAP recurring revenue, representing 80.0% of total revenue.
-- Total non-GAAP revenue was $198.3 million, up 11.3%, with $158.6 million
in non-GAAP recurring revenue, representing 80.0% of total non-GAAP
revenue.
-- Non-GAAP organic revenue increased 11.3% and non-GAAP organic recurring
revenue increased 14.4%.
-- GAAP income from operations increased 133.9% to $24.0 million, with GAAP
operating margin increasing 630 basis points to 12.1%.
-- Non-GAAP income from operations increased 35.9% to $43.8 million, with
non-GAAP operating margin increasing 400 basis points to 22.1%.
-- GAAP net income increased 169.6% to $17.3 million, with GAAP diluted
earnings per share up $0.22 to $0.36.
-- Non-GAAP net income increased 57.1% to $28.0 million, with non-GAAP
diluted earnings per share up $0.21 to $0.59.
-- Cash flow from operations was $53.5 million, up from $39.7 million.
"We're doing something quite unique here at Blackbaud, in that we've accelerated revenue growth and improved profitability while transitioning our solution portfolio from on-premises to the cloud," Gianoni added.
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 our 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.
Fourth Quarter 2016 Company Highlights:
-- Announced the general availability of SKY API(TM) for Raiser's Edge
NXT(TM) and Financial Edge NXT(TM) customers and partners, enabling them
to customize, integrate or extend the functionality of their current
solutions.
-- Provided sector leadership by releasing key reporting, trend data and
commentary throughout #GivingTuesday 2016, including that online giving
increased by 20%.
-- Added Apple Pay® to Blackbaud Merchant Services(TM) so customers can
offer donors an easy, secure and private option for digital checkout -
making several Blackbaud customers among the first wave of nonprofits to
leverage Apple Pay for philanthropic giving.
-- Reported dramatic momentum in product innovation and customer response
as the company continues to bring new capabilities to market through
Altru®, its cultural management solution.
-- Saw strong momentum in end-of-year giving, as defined as the last three
days of the year, including customers using Luminate Online -
Blackbaud's digital marketing solution - who experienced a 17%
year-over-year growth in online fundraising.
Visit www.blackbaud.com/press-room for more information about Blackbaud's recent highlights.
Full Year 2016 Results Compared to Full Year 2015 Results:
-- Total GAAP revenue was $730.8 million, up 14.6%, with $575.9 million in
GAAP recurring revenue, representing 78.8% of total revenue.
-- Total non-GAAP revenue was $734.5 million, up 13.5%, with $579.6 million
in non-GAAP recurring revenue, representing 78.9% of total non-GAAP
revenue.
-- Non-GAAP organic revenue increased 9.2% and non-GAAP organic recurring
revenue increased 11.5%.
-- GAAP income from operations increased 32.3% to $61.8 million, with GAAP
operating margin increasing 120 basis points to 8.5%.
-- Non-GAAP income from operations increased 18.2% to $144.2 million, with
non-GAAP operating margin increasing 80 basis points to 19.6%.
-- GAAP net income increased 61.9% to $41.5 million, with GAAP diluted
earnings per share up $0.33 to $0.88.
-- Non-GAAP net income increased 30.2% to $90.7 million, with non-GAAP
diluted earnings per share up $0.42 to $1.92.
-- Cash flow from operations was $153.6 million, up from $129.2 million.
"I'm pleased to report that we achieved our 2016 full year financial guidance across all fronts," said Tony Boor, Blackbaud's executive vice president and CFO. "Our strong performance in 2016 resulted in accelerated organic revenue growth, improved profitability, and increased cash flow when compared to 2015. It's worth highlighting that we were able to make additional incremental investments back into the company for future growth, while still meeting aggressive guidance targets. We have a very positive outlook heading into 2017, with full year financial guidance implying strong growth, and achievement of our long-term aspirational goals that we introduced in 2014. These financial goals, which were aimed at improving revenue growth, profitability, and cash generation, were truly aspirational for Blackbaud at the time. Consistent and successful execution against our strategic objectives has positioned us well to meet these aspirational goals in 2017."
Dividend
Blackbaud announced today that its Board of Directors has declared a first quarter 2017 dividend of $0.12 per share payable on March 15, 2017 to stockholders of record on February 28, 2017.
Financial Outlook
Blackbaud today announced its 2017 full year financial guidance.
-- Non-GAAP revenue of $775 million to $795 million
-- Non-GAAP income from operations of $155 million to $163 million
-- Non-GAAP operating margin of 20.0% to 20.5%
-- Non-GAAP diluted earnings per share of $2.06 to $2.18
-- Free cash flow of $120 million to $130 million
Free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software development, and capital expenditures for property and equipment.
Blackbaud has not reconciled forward-looking full year non-GAAP financial measures contained in this news release to their most directly comparable GAAP measures, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to compensation, acquisition transactions and integration, tax items or others that may arise during the year. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts.
Long Term Aspirational Goals
Blackbaud today announced that it expects to achieve its long-term aspirational goals introduced in 2014 based on 2017 financial outlook.
-- Non-GAAP organic revenue growth of 6% to 10% annually, adjusted for
constant currency
-- Non-GAAP operating margin of 20.5% to 23.5% exiting 2017, adjusted for
2014 constant currency
-- Aggregate cash flow from operations of $500 million to $550 million from
2014 to 2017
Adoption of New Share-based Compensation Expense Accounting Standard
As previously disclosed, during the three months ended September 30, 2016 we early adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting, which addresses, among other items, the accounting for income taxes and forfeitures, and cash flow presentation of share-based compensation. Under ASU 2016-09, excess tax benefits generated upon the settlement or exercise of stock awards are no longer recognized as additional paid-in capital but are instead recognized as a reduction to income tax expense. This change in accounting for income taxes was effective for us on a prospective basis as of the beginning of the 2016 fiscal year. Cash flows related to excess tax benefits are required to be presented as an operating activity rather than a financing activity. In addition, all cash tax payments made on an employee's behalf for shares withheld upon vesting or settlement are required to be presented as a financing activity. We adopted all amendments related to cash flow presentation on a retrospective basis, which resulted in a $14.9 million increase in net cash provided by operating activities and a $14.9 million decrease in net cash provided by financing activities for the year ended December 31, 2015. We will provide more detailed information regarding the impact of the early adoption of ASU 2016-09 in our annual report on Form 10-K for the year ended December 31, 2016.
Conference Call Details
What: Blackbaud's Fiscal 2016 Fourth
Quarter Conference Call
When: February 9, 2017
Time: 8:00 a.m. (Eastern Time)
Live Call: 1-800-310-6649 (domestic) or
1-719-325-2137 (international);
passcode 421503.
Webcast: Blackbaud's Investor Relations
Webpage
About Blackbaud
Blackbaud (NASDAQ: BLKB) is the world's leading cloud software company powering social good. Serving the entire social good community--nonprofits, foundations, corporations, education institutions, and individual change agents--Blackbaud connects and empowers organizations to increase their impact through software, services, expertise, and data intelligence. The Blackbaud portfolio is tailored to the unique needs of vertical markets, with solutions for fundraising and relationship management, digital marketing, advocacy, accounting, payments, analytics, school management, grant management, corporate social responsibility, and volunteerism. Serving the industry for more than three decades, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada, Ireland, and the United Kingdom. For more information, visit www.blackbaud.com.
Investor Contact: Media Contact:
Mark Furlong Nicole McGougan
Director of Investor Relations Blackbaud Public Relations
843-654-2097 843-654-3307
Mark.furlong@blackbaud.com Nicole.mcgougan@blackbaud.com
Forward-Looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: expectations that our revenue and operating cash flow will continue to grow and that our operating margins will continue to improve, and expectations that we will achieve our projected 2017 full year financial guidance and long-term aspirational goals. These statements involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: management of integration of acquired companies; uncertainty regarding increased business and renewals from existing customers; a shifting revenue mix that may impact gross margin; continued success in sales growth; risks related to our dividend policy and stock repurchase program, including the possibility that we might discontinue payment of dividends; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Blackbaud's investor relations department. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
Trademarks
All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.
Non-GAAP Financial Measures
Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP revenue, non-GAAP recurring revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share. Blackbaud has acquired businesses whose net tangible assets include deferred revenue. In accordance with GAAP reporting requirements, Blackbaud recorded write-downs of deferred revenue to fair value, which resulted in lower recognized revenue. Both on a quarterly and year-to-date basis, the revenue for the acquired businesses is deferred and typically recognized over a one-year period, so Blackbaud's GAAP revenues for the one-year period after the acquisitions will not reflect the full amount of revenues that would have been reported if the acquired deferred revenue was not written down to fair value. The non-GAAP measures described above reverse the acquisition-related deferred revenue write-downs so that the full amount of revenue booked by the acquired companies is included, which Blackbaud believes provides a more accurate representation of a revenue run-rate in a given period. In addition to reversing write-downs of acquisition-related deferred revenue, non-GAAP financial measures discussed above exclude the impact of certain items that Blackbaud believes are not directly related to its performance in any particular period, but are for its long-term benefit over multiple periods.
In addition, Blackbaud discusses non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis and non-GAAP organic recurring revenue growth, which it believes provides useful information for evaluating the periodic growth of its business on a consistent basis. Each of these measures of non-GAAP organic revenue growth excludes incremental acquisition-related revenue attributable to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, each of these non-GAAP organic revenue growth measures reflects presentation of full year incremental non-GAAP revenue derived from such companies as if they were combined throughout the prior period, and it includes the non-GAAP revenue attributable to those companies, as if there were no acquisition-related write-downs of acquired deferred revenue to fair value as required by GAAP. In addition, each of these non-GAAP organic revenue growth measures excludes prior period revenue associated with divested businesses. The exclusion of the prior period revenue is to present the results of the divested businesses within the results of the combined company for the same period of time in both the prior and current periods. Blackbaud believes this presentation provides a more comparable representation of its current business' organic revenue growth and revenue run-rate.
As previously disclosed, beginning in 2016, Blackbaud now applies a non-GAAP effective tax rate of 32.0% in its determination of non-GAAP net income, which represents the GAAP effective tax rate, excluding the discrete tax effect of stock-based compensation. The non-GAAP effective tax rate utilized will be reviewed annually to determine whether it remains appropriate in consideration of Blackbaud's financial results including its periodic effective tax rate calculated in accordance with GAAP, its operating environment and related tax legislation in effect and other factors deemed necessary. All 2015 measures of the tax impact related to non-GAAP adjustments, non-GAAP net income and non-GAAP diluted earnings per share included in this news release are calculated under Blackbaud's historical non-GAAP effective tax rate of 39.0%.
Blackbaud uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Blackbaud's ongoing operational performance. Blackbaud believes that these non-GAAP financial measures reflect the Blackbaud's ongoing business in a manner that allows for meaningful period-to-period comparison and analysis of trends in its business. In addition, Blackbaud believes that the use of these non-GAAP financial measures provides additional information for investors to use in evaluating ongoing operating results and trends and in comparing its financial results from period-to-period with other companies in Blackbaud's industry, many of which present similar non-GAAP financial measures to investors. However, these non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to differences in the exact method of calculation between companies. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.
Blackbaud, Inc.
Consolidated balance sheets
(Unaudited)
(dollars in thousands) December 31, December 31,
2016 2015
Assets
Current assets:
Cash and cash equivalents $16,902 $15,362
Restricted cash due to customers 353,771 255,038
Accounts receivable, net of allowance of $3,291 and $4,943 at December 31, 88,932 80,046
2016 and December 31, 2015, respectively
Prepaid expenses and other current assets 48,314 48,666
Total current assets 507,919 399,112
Property and equipment, net 50,269 52,651
Software development costs, net 37,582 19,551
Goodwill 438,240 436,449
Intangible assets, net 253,676 294,672
Other assets 22,524 20,901
------ ------
Total assets $1,310,210 $1,223,336
Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable $23,274 $19,208
Accrued expenses and other current liabilities 54,196 57,461
Due to customers 353,771 255,038
Debt, current portion 4,375 4,375
Deferred revenue, current portion 244,500 230,216
------- -------
Total current liabilities 680,116 566,298
Debt, net of current portion 338,018 403,712
Deferred tax liability 29,558 27,996
Deferred revenue, net of current portion 6,440 7,119
Other liabilities 8,533 7,623
Total liabilities 1,062,665 1,012,748
--------- ---------
Commitments and contingencies
Stockholders' equity:
Preferred stock; 20,000,000 shares authorized, none outstanding - -
Common stock, $0.001 par value; 180,000,000 shares authorized, 57,672,401 and 58 57
56,873,817 shares issued at December 31, 2016 and December 31, 2015,
respectively
Additional paid-in capital 310,452 276,340
Treasury stock, at cost; 10,166,801 and 9,903,071 shares at December 31, 2016 (215,237) (199,861)
and December 31, 2015, respectively
Accumulated other comprehensive loss (457) (825)
Retained earnings 152,729 134,877
Total stockholders' equity 247,545 210,588
------- -------
Total liabilities and stockholders' equity $1,310,210 $1,223,336
------------------------------------------ ---------- ----------
Blackbaud, Inc.
Consolidated statements of comprehensive income
(Unaudited)
(dollars in thousands, except per share amounts) Three months ended Years ended
December 31, December 31,
2016 2015 2016 2015
Revenue
Subscriptions $122,657 $98,336 $428,987 $331,759
Maintenance 35,927 38,069 146,946 153,801
Services 35,247 32,100 139,690 132,978
License fees and other 4,474 7,372 15,192 19,402
----- ----- ------ ------
Total revenue 198,305 175,877 730,815 637,940
Cost of revenue
Cost of subscriptions 60,111 52,278 213,883 167,341
Cost of maintenance 5,547 5,887 22,094 27,066
Cost of services 23,352 23,694 96,488 102,815
Cost of license fees and other 3,392 3,357 6,755 7,409
----- ----- ----- -----
Total cost of revenue 92,402 85,216 339,220 304,631
------ ------ ------- -------
Gross profit 105,903 90,661 391,595 333,309
------- ------ ------- -------
Operating expenses
Sales, marketing and customer success 40,047 34,222 155,754 123,646
Research and development 21,897 22,633 89,870 84,636
General and administrative 19,242 22,840 81,331 76,084
Amortization 693 695 2,840 2,231
Total operating expenses 81,879 80,390 329,795 286,597
------ ------ ------- -------
Income from operations 24,024 10,271 61,800 46,712
------ ------ ------ ------
Interest expense (2,546) (2,698) (10,583) (8,073)
Other expense, net (106) (318) (291) (1,687)
---- ---- ---- ------
Income before provision for income taxes 21,372 7,255 50,926 36,952
Income tax provision 4,088 844 9,411 11,303
----- --- ----- ------
Net income $17,284 $6,411 $41,515 $25,649
------- ------ ------- -------
Earnings per share
Basic $0.37 $0.14 $0.90 $0.56
Diluted $0.36 $0.14 $0.88 $0.55
Common shares and equivalents outstanding
Basic weighted average shares 46,272,031 45,766,891 46,132,389 45,623,854
Diluted weighted average shares 47,436,116 46,714,204 47,316,538 46,498,704
Dividends per share $0.12 $0.12 $0.48 $0.48
Other comprehensive income
Foreign currency translation adjustment 63 416 324 62
Unrealized gain on derivative instruments, net of tax 422 779 44 145
--- --- --- ---
Total other comprehensive income 485 1,195 368 207
--- ----- --- ---
Comprehensive income $17,769 $7,606 $41,883 $25,856
-------------------- ------- ------ ------- -------
Blackbaud, Inc.
Consolidated statements of cash flows
(Unaudited)
Years ended
December 31,
(dollars in thousands) 2016 2015
Cash flows from operating activities
Net income $41,515 $25,649
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 70,491 55,997
Provision for doubtful accounts and sales returns 3,730 6,825
Stock-based compensation expense 32,638 25,246
Deferred taxes 3,033 3,165
Loss on sale of business - 1,976
Impairment of capitalized software development costs - 239
Amortization of deferred financing costs and discount 958 899
Other non-cash adjustments (864) (197)
Changes in operating assets and liabilities, net of acquisition and disposal of
businesses:
Accounts receivable (13,196) (7,593)
Prepaid expenses and other assets (2,478) (10,979)
Trade accounts payable 3,689 6,133
Accrued expenses and other liabilities (751) 9,255
Restricted cash due to customers (96,000) (34,279)
Due to customers 96,000 34,279
Deferred revenue 14,863 12,612
Net cash provided by operating activities 153,628 129,227
Cash flows from investing activities
Purchase of property and equipment (17,694) (18,633)
Capitalized software development costs (26,359) (15,481)
Purchase of net assets of acquired companies, net of cash (3,377) (188,072)
Net cash used in sale of business - (521)
Net cash used in investing activities (47,430) (222,707)
Cash flows from financing activities
Proceeds from issuance of debt 227,200 312,300
Payments on debt (293,575) (184,475)
Debt issuance costs - (429)
Employee taxes paid for withheld shares upon equity award settlement (15,376) (9,421)
Proceeds from exercise of stock options 16 32
Dividend payments to stockholders (22,811) (22,508)
Net cash (used in) provided by financing activities (104,546) 95,499
Effect of exchange rate on cash and cash equivalents (112) (1,392)
Net increase in cash and cash equivalents 1,540 627
Cash and cash equivalents, beginning of year 15,362 14,735
------ ------
Cash and cash equivalents, end of year $16,902 $15,362
-------------------------------------- ------- -------
Blackbaud, Inc.
Reconciliation of GAAP to non-GAAP financial measures
(Unaudited)
(dollars in thousands, except per share amounts) Three months ended Years ended
December 31, December 31,
2016 2015 2016 2015
GAAP Revenue $198,305 $175,877 $730,815 $637,940
Non-GAAP adjustments:
Add: Acquisition-related deferred revenue write-down - 2,239 3,639 9,371
Non-GAAP revenue $198,305 $178,116 $734,454 $647,311
-------- -------- -------- --------
GAAP gross profit $105,903 $90,661 $391,595 $333,309
GAAP gross margin 53.4% 51.5% 53.6% 52.2%
Non-GAAP adjustments:
Add: Acquisition-related deferred revenue write-down - 2,239 3,639 9,371
Add: Stock-based compensation expense 694 775 3,297 3,494
Add: Amortization of intangibles from business 9,888 7,236 39,558 29,987
combinations
Add: Employee severance 222 26 382 1,492
Subtotal 10,804 10,276 46,876 44,344
Non-GAAP gross profit $116,707 $100,937 $438,471 $377,653
-------- -------- -------- --------
Non-GAAP gross margin 58.9% 56.7% 59.7% 58.3%
GAAP income from operations $24,024 $10,271 $61,800 $46,712
GAAP operating margin 12.1% 5.8% 8.5% 7.3%
Non-GAAP adjustments:
Add: Acquisition-related deferred revenue write-down - 2,239 3,639 9,371
Add: Stock-based compensation expense 7,633 7,347 32,638 25,246
Add: Amortization of intangibles from business 10,581 7,931 42,398 32,218
combinations
Add: Employee severance 1,522 961 1,995 3,174
Add: Impairment of capitalized software development - 239 - 239
costs
Add: Acquisition-related integration costs - 367 1,419 1,091
Add: Acquisition-related expenses 36 2,859 301 3,904
Subtotal 19,772 21,943 82,390 75,243
Non-GAAP income from operations $43,796 $32,214 $144,190 $121,955
Non-GAAP operating margin 22.1% 18.1% 19.6% 18.8%
GAAP net income $17,284 $6,411 $41,515 $25,649
Shares used in computing GAAP diluted earnings per 47,436,116 46,714,204 47,316,538 46,498,704
share
GAAP diluted earnings per share $0.36 $0.14 $0.88 $0.55
Non-GAAP adjustments:
Add: Total Non-GAAP adjustments affecting income 19,772 21,943 82,390 75,243
from operations
Add: Loss on sale of business - - - 1,976
Less: Tax impact related to Non-GAAP adjustments (9,078) (10,544) (33,250) (33,223)
------ -------
Non-GAAP net income $27,978 $17,810 $90,655 $69,645
------- ------- ------- -------
Shares used in computing Non-GAAP diluted earnings per 47,436,116 46,714,204 47,316,538 46,498,704
share
Non-GAAP diluted earnings per share $0.59 $0.38 $1.92 $1.50
----------------------------------- ----- ----- ----- -----
Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP financial measures (continued)
(Unaudited)
(dollars in thousands) Three months ended Years ended
December 31, December 31,
2016 2015 2016 2015
Detail of certain Non-GAAP adjustments:
Stock-based compensation expense:
Included in cost of revenue:
Cost of subscriptions $264 $449 $1,168 $1,130
Cost of maintenance 117 67 508 420
Cost of services 313 259 1,621 1,944
Total included in cost of revenue 694 775 3,297 3,494
Included in operating expenses:
Sales, marketing and customer success 872 706 3,844 2,979
Research and development 1,593 1,556 6,467 4,865
General and administrative 4,474 4,310 19,030 13,908
----- -----
Total included in operating expenses 6,939 6,572 29,341 21,752
----- -----
Total stock-based compensation expense $7,633 $7,347 $32,638 $25,246
------ ------ ------- -------
Amortization of intangibles from business combinations:
Included in cost of revenue:
Cost of subscriptions $7,816 $5,775 $31,270 $23,075
Cost of maintenance 1,331 1,003 5,327 4,162
Cost of services 656 375 2,621 2,382
Cost of license fees and other 85 83 340 368
--- ---
Total included in cost of revenue 9,888 7,236 39,558 29,987
Included in operating expenses 693 695 2,840 2,231
--- --- ----- -----
Total amortization of intangibles from business $10,581 $7,931 $42,398 $32,218
combinations
------------ ---
Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP financial measures (continued)
(Unaudited)
(dollars in thousands) Three months ended Years ended
December 31, December 31,
2016 2015 2016 2015
GAAP revenue $198,305 $175,877 $730,815 $637,940
GAAP revenue growth 12.8% 14.6%
Add: Non-GAAP acquisition-related revenue (1) - 2,239 3,639 35,480
Less: Revenue from divested businesses (2) - - - (586)
Total Non-GAAP adjustments - 2,239 3,639 34,894
Non-GAAP revenue (3) $198,305 $178,116 $734,454 $672,834
-------- -------- -------- --------
Non-GAAP organic revenue growth 11.3% 9.2%
Non-GAAP revenue (3) $198,305 $178,116 $734,454 $672,834
Foreign currency impact on Non-GAAP revenue (4) 793 - 4,170 -
Non-GAAP revenue on constant currency basis (4) $199,098 $178,116 $738,624 $672,834
-------- -------- -------- --------
Non-GAAP organic revenue growth on constant 11.8% 9.8%
currency basis
GAAP subscriptions revenue $122,657 $98,336 $428,987 $331,759
GAAP maintenance revenue $35,927 $38,069 146,946 153,801
GAAP recurring revenue $158,584 $136,405 $575,933 $485,560
GAAP recurring revenue growth 16.3% 18.6%
Add: Non-GAAP acquisition-related revenue (1) - 2,194 3,625 34,477
Less: Revenue from divested businesses (2) - - - (378)
Total Non-GAAP adjustments - 2,194 3,625 34,099
Non-GAAP recurring revenue $158,584 $138,599 $579,558 $519,659
-------- -------- -------- --------
Non-GAAP organic recurring revenue growth 14.4% 11.5%
----------------------------------------- ---- ----
(1) Non-GAAP acquisition-related revenue excludes incremental acquisition-related revenue calculated in accordance with GAAP that is attributable to
companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, non-GAAP acquisition-related revenue
reflects presentation of full-year incremental non-GAAP revenue derived from such companies, as if they were combined throughout the prior period, and
it includes the non-GAAP revenue from the acquisition-related deferred revenue write-down attributable to those companies.
(2) For businesses divested in the prior fiscal year, non-GAAP organic revenue growth excludes the prior period revenue associated with divested businesses.
The exclusion of the prior period revenue is to present the results of the divested business within the results of the combined company for the same period
of time in both the prior and current periods.
(3) Non-GAAP revenue for the prior year periods presented herein will not agree to non-GAAP revenue presented in the respective prior period quarterly
financial information solely due to the manner in which non-GAAP organic revenue growth is calculated.
(4) To determine non-GAAP organic revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S.
Dollars using the comparable prior period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact
are the Canadian Dollar, EURO, British Pound and Australian Dollar.
Additional details of Blackbaud's methodology for calculating non-GAAP organic revenue growth and non-GAAP organic revenue growth on a constant currency basis can be found on Blackbaud's investor relations page.
http://photos.prnewswire.com/prnvar/20160906/404305LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/blackbaud-announces-2016-fourth-quarter-and-full-year-results-300404329.html
SOURCE Blackbaud
