Blackbaud (BLKB) to Report Q2 Earnings: What's in the Cards?

Blackbaud, Inc. BLKB is set to report second-quarter 2020 results on Jul 29.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $216.1 million, which indicates a decline of 4.5% from the year-ago quarter’s reported figure.

The consensus mark for earnings was unchanged at 50 cents in the past 30 days, which suggests year-over-year decline of 24.2%.

Notably, the company has a trailing four-quarter earnings surprise of 11.2%, on average.

Let’s see how things have shaped up prior to this announcement.

Blackbaud, Inc. Price and EPS Surprise

Blackbaud, Inc. Price and EPS Surprise

Blackbaud, Inc. price-eps-surprise | Blackbaud, Inc. Quote

Factors Likely to Have Impacted Q2

Blackbaud’s second-quarter 2020 performance is expected to have benefited from strong demand for its robust customer relationship management (“CRM”) solutions, which help non-profit entities manage their fundraising events.

Notably, social welfare organizations are increasing movingly away from in-person to virtual fundraising events due to COVID-19 induced lockdowns.  As a result, the company’s CRM portfolio that includes solutions like Blackbaud Luminate Online and Blackbaud Raiser's Edge NXT are likely to have witnessed solid traction in the to-be-reported quarter.

Moreover, the surge in e-learning trends stemming from the COVID-19 pandemic is anticipated to have driven adoption of Blackbaud’s offerings during the quarter under review. In the first quarter, the company had aided schools like Louisville High School and River Oaks Baptist School to become virtual schools by leveraging its solutions.

Further, growing momentum for Blackbaud’s cloud-based fund accounting solution –– Financial Edge NXT –– is likely to have contributed to the top line in the second quarter. Markedly, the solution enables customers to manage financial reporting and planning with improved efficiency and less manual effort. Demand is being driven by the pandemic led digital transformation taking place among non-profit organizations.

Nevertheless, declining trend in the company’s one time services bookings is expected to have dampened revenues in second-quarter 2020. The Zacks Consensus Estimate for One-time services and other’s second-quarter revenues is currently pegged at $12.3 million, which indicates a decline of 28.5% on a year-over-year basis.

Yet, the company’s efforts to reduce costs by implementing a complete freeze on sales recruitment are likely to have aided margins in the to-be reported quarter.

Key Developments in Q2

Blackbaud improved its CRM, Financial and Payments Services solutions with new enhancements and innovations, planned precisely to aid non-profit organizations with their unique needs amid and in the aftermath of the COVID-19 pandemic.

The company also rolled out a new capability for its Blackbaud Church Management offering that will support virtual small group gatherings for various religious communities amid the ongoing global pandemic.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Blackbaud this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Blackbaud has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks you may consider as our proven model shows that these have the right mix of elements to beat estimates this time:
Microchip Technology Incorporated MCHP has an Earnings ESP of +3.09% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Anaplan, Inc. PLAN has an Earnings ESP of +1.64% and a Zacks Rank of 1.

Synaptics Incorporated SYNA has an Earnings ESP of +10.60% and a Zacks Rank of 2.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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