What happened

Shares of Blackbaud (NASDAQ:BLKB) are falling today, down 12.6% as of 11 a.m. EDT, after the release of the cloud software company's third-quarter earnings report.

So what 

Yesterday after market close, Blackbaud reported non-GAAP diluted earnings per share of $0.73, which actually beat Wall Street's consensus estimate of $0.70 per share. But investors were disappointed that revenue fell 2.8% year over year to $215 million, missing analysts' expectations for $221 million in sales.

A red line graph going down.

Image source: Getty Images.

Usually, investors are cheered when they see an earnings beat, but the fact that Blackbaud missed on revenue, combined with the pessimistic sentiment in the stock market over the past few days as coronavirus cases rise across Europe and the U.S., likely added to shareholder fears. 

Blackbaud's management was positive about the quarter, however. In the press release, CFO Tony Boor said, "There are significant opportunities in front of us and we are well positioned to continue making the critical investments necessary to ensure the long-term success of the business while remaining committed to driving increased shareholder value through profitability and earnings growth."

The company's share-price drop today adds to a tumultuous year for Blackbaud's stock, leaving it down 37% year to date.

Now what 

Investors have clearly lost some of their faith in Blackbaud despite the company's earnings growth in the third quarter. And with the U.S. still in a recession and the ongoing pandemic, there could be more uncertainty ahead for Blackbaud's stock.

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