Many companies seek customer feedback. But how many companies give awards to customers? Well, that's what Blackboard (Nasdaq: BBBB) does. It awarded $5,000 to two customers who used its products in innovative programs.
With help from its customers, Blackboard has built a comprehensive array of software solutions for educational institutions. And, so far, it is resulting in strong growth.
Yesterday, the company reported its earnings for the first quarter. Revenues increased 23% to $30.9 million and net income surged 588% to $5.4 million, compared with $786,000 for the first quarter of 2004.
While a major trend is under way for educational institutions to move toward automation, there is still resistance. After all, the costs can be significant. Will an outsourced solution be cheaper than building an in-house solution (in terms of lower overhead, redundant processes, and so on)? And will students and instructors use the technology?
As a result, Blackboard offers a basic edition and a more advanced enterprise edition. These products allow for things such as online courses, delivery of digital materials to students, postings of syllabi, online research, and so on.
A big part of the success of Blackboard is its ability to turn basic customers into enterprise customers. Once an institution sees the benefits -- such as increased enrollments and retention (at the university) -- it then is more willing to add new features, such as offering a debit card service to students to increase on-campus revenues.
And Blackboard's growth is expected to continue. The company upped its guidance for the year to earnings of $22 million to $23 million, which translates into $0.78 to $0.81 per share. Sales are expected to be $132.5 million to $134 million.
So far, sales have been primarily in U.S. markets. But there are certainly strong growth opportunities overseas. Thus, Blackboard has been translating its software into eight languages -- giving the company a head start as it looks for new markets, which should help continue its growth for the longer term.
Fool contributor Tom Taulli does not own shares mentioned in this article.
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