Helping the organizations that help others is proving to be quite a strong business for Blackbaud (NASDAQ:BLKB). That was evident as the technology solution provider to philanthropic and educational organizations announced solid third-quarter results after the closing bell today. Not only did the company report solid revenue and earnings growth, but it also boosted full-year guidance.
A closer look at the numbers
Blackbaud grew revenue by 13.1% over last year's third quarter to $144.6 million. That's a bit higher than the $141.85 million Wall Street was hoping to see this quarter. Driving that strong growth was subscriptions growth in the quarter. Non-GAAP organic subscriptions revenue was up nearly 16%. Better yet, the company noted that its subscriptions growth has been accelerating.
Blackbaud also exceeded the Street's profit estimates as non-GAAP net income was $15.8 million, or $0.35 per share. That was four cents higher than analysts were expecting this quarter. However, earnings per share were off by two pennies from the third quarter of last year.
Cash flow, however, was really strong, as the company generated $40.4 million in cash flow from operations on the quarter, even as it pays more in taxes these days. However, Uncle Sam wasn't the only one getting a cut of Blackbaud's cash, as the company used its strong cash flow to return $5.6 million to shareholders by way of dividends paid in the quarter.
A look ahead
Thanks to the company's better-than-expected third-quarter results, it's raising full-year guidance. The company not only sees its strong performance continuing for the rest of the year, but it also expects to see an incremental contribution from the recently acquired MicroEdge. As a result, the company sees full-year revenue, on a non-GAAP basis, to be $565 million to $570 million, with net income of $98 million to $105 million and earnings of $1.25 to $1.29 per share. That's a boost of $15 million in revenue and $0.06 per share in earnings from its previous guidance.
This isn't the first time the company has raised its guidance this year. Just last quarter, Blackbaud raised full-year guidance as it boosted revenue guidance by $10 million and net income by $2 million because of stronger-than-expected results that quarter. That strong momentum clearly continued this past quarter and appears likely to stay strong through the end of the year.
While quarterly reports are just a snapshot into a company's operations over the past 90 days, it's still nice to see an earnings beat. It's even better to see forward guidance being raised. It suggests that the company's operations are running strong and its momentum is even stronger than expected. That's what we hope to see every quarter.