Blackbaud Announces 2017 Second Quarter Results
Recurring Revenue Represents Over 80% of Total; Subscriptions Revenue Tops 65%; Management Reaffirms 2017 Full-Year Financial Guidance
CHARLESTON, S.C., July 31, 2017 /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the world's leading cloud software company powering social good, today announced financial results for its second quarter ended June 30, 2017.
"We're delivering powerful, integrated solutions in the cloud that provide our customers with a modern and truly unified experience," said Mike Gianoni, Blackbaud's president and CEO. "This is quite unique in our industry. Blackbaud is an end-to-end partner that builds, integrates, implements and supports its solutions--no other company in this market offers a value proposition as extensive. Our cloud solutions are fueling strong financial performance, further improving the predictability and stability of our business by shifting us towards a subscription-based revenue model, and positioning us for a long runway of growth ahead. Subscriptions revenue represented 65 percent of total revenue, a new all-time high for us, and non-GAAP organic subscriptions revenue was strong, growing 17 percent this quarter."
Second Quarter 2017 Results Compared to Second Quarter 2016 Results:
-- Total GAAP revenue was $192.2 million, up 6.7%, with $158.2 million in
GAAP recurring revenue, representing 82.3% of total revenue, and $125.3
million in subscription revenue, representing 65.2% of total revenue.
-- Total non-GAAP revenue was $192.5 million, up 5.8%, with $158.5 million
in non-GAAP recurring revenue, representing 82.3% of total non-GAAP
revenue, and $125.6 million in subscription revenue, representing 65.2%
of total revenue.
-- Non-GAAP organic revenue increased 4.5%, non-GAAP organic recurring
revenue increased 9.1%, and non-GAAP organic subscription revenue
increased 16.7%.
-- GAAP income from operations increased 22.9% to $16.7 million, with GAAP
operating margin increasing 110 basis points to 8.7%.
-- Non-GAAP income from operations increased 16.8% to $40.6 million, with
non-GAAP operating margin increasing 200 basis points to 21.1%.
-- GAAP net income increased 23.2% to $11.2 million, with GAAP diluted
earnings per share of $0.23, up $0.04.
-- Non-GAAP net income increased 18.5% to $25.8 million, with non-GAAP
diluted earnings per share of $0.54, up $0.08.
-- Non-GAAP free cash flow was $31.8 million, an increase of $0.9 million.
"We posted another solid quarter, which was in line with our expectations, and positions us well to achieve our full-year financial guidance and long-term aspirational goals," said Tony Boor, Blackbaud's executive vice president and CFO. "During the quarter, we completed the acquisition of AcademicWorks, adding exciting new scholarship management capabilities to our portfolio, and we also announced our intent to acquire JustGiving, which will expand our footprint in the peer-to-peer fundraising space."
An explanation of all non-GAAP financial measures referenced in this press release, including Blackbaud's definition of non-GAAP free cash flow, is included below under the heading "Non-GAAP Financial Measures." A reconciliation of the company's 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.
Recent Company Highlights:
-- Blackbaud acquired the market leading scholarship management platform,
AcademicWorks(TM), extending its offerings for higher education, K-12,
and corporate and foundation customers.
-- The company announced its intent to acquire United Kingdom-based
fundraising services provider JustGiving(TM), whose online social giving
platform has played a powerful role in the growth of peer-to-peer
fundraising.
-- Blackbaud entered into a new credit facility on June 2 in the aggregate
amount of $700 million as a result of successfully executing against the
strategy Blackbaud laid out in 2014, causing the company to "outgrow"
the existing credit facility.
-- Hundreds of private school professionals collaborated with peers on
industry best practices, participated in over 90 hands-on training
sessions, and heard from company executives during Blackbaud's annual
K-12 user conference.
-- Blackbaud has been added to Standard & Poor's (S&P) MidCap 400 GICS
(Global Industry Classification Standard) Application Software
Sub-Industry index, underscoring its position as a leading innovative
cloud company that is on a strong trajectory.
-- Blackbaud was recognized with several major awards and honors: The
company was recognized on the Forbes America's Best Mid-Size Employers
2017 list and Forbes Most Innovative Growth Companies 2017 list for a
second consecutive year; CognitionX named Blackbaud's modern, unique
approach to social good-optimized Intelligence for Good(TM) "Best Use of
AI for Charity"; and Raiser's Edge NXT(TM) and eTapestry® were named
"Leaders" on the 2017 FrontRunners quadrant for Nonprofit Donor
Software.
Visit www.blackbaud.com/press-room for more information about Blackbaud's recent highlights.
Dividend
Blackbaud announced today that its Board of Directors has declared a third quarter 2017 dividend of $0.12 per share payable on September 15, 2017 to stockholders of record on August 28, 2017.
Financial Outlook
Blackbaud today reaffirmed 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
-- Non-GAAP free cash flow of $120 million to $130 million
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.
Conference Call Details
What: Blackbaud's 2017 Second Quarter
Conference Call
When: August 1, 2017
Time: 8:00 a.m. (Eastern Time)
Live Call: 877-616-0061 (domestic) or
719-325-4844 (international);
passcode 780576.
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, healthcare 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 CRM, marketing, advocacy, peer-to-peer fundraising, corporate social responsibility, school management, ticketing, grantmaking, financial management, payment processing, and analytics. Serving the industry for more than three decades, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada 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 certain aspects of our operations, financial results and financial condition 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, non-GAAP organic subscriptions revenue growth 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 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 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 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.
Non-GAAP 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 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) June 30, December 31,
2017 2016
Assets
Current assets:
Cash and cash equivalents $17,268 $16,902
Restricted cash due to customers 289,232 353,771
Accounts receivable, net of allowance of $3,738 and
$3,291 at June 30, 2017 and December 31, 2016,
respectively 129,890 88,932
Prepaid expenses and other current assets 51,285 48,314
Total current assets 487,675 507,919
Property and equipment, net 45,679 50,269
Software development costs, net 44,962 37,582
Goodwill 472,643 438,240
Intangible assets, net 263,347 253,676
Other assets 24,080 22,524
------ ------
Total assets $1,338,386 $1,310,210
Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable $17,660 $23,274
Accrued expenses and other current liabilities 46,508 54,196
Due to customers 289,232 353,771
Debt, current portion 7,500 4,375
Deferred revenue, current portion 280,816 244,500
------- -------
Total current liabilities 641,716 680,116
Debt, net of current portion 380,162 338,018
Deferred tax liability 40,780 29,558
Deferred revenue, net of current portion 6,067 6,440
Other liabilities 7,572 8,533
Total liabilities 1,076,297 1,062,665
--------- ---------
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, 58,456,066 and 57,672,401 shares issued at
June 30, 2017 and December 31, 2016, respectively 58 58
Additional paid-in capital 330,559 310,452
Treasury stock, at cost; 10,397,768 and 10,166,801
shares at June 30, 2017 and December 31, 2016,
respectively (231,881) (215,237)
Accumulated other comprehensive loss (558) (457)
Retained earnings 163,911 152,729
Total stockholders' equity 262,089 247,545
------- -------
Total liabilities and stockholders' equity $1,338,386 $1,310,210
------------------------------------------ ---------- ----------
Blackbaud, Inc.
Consolidated statements of comprehensive income
(Unaudited)
(dollars in thousands, except per share amounts) Three months ended Six months ended
June 30, June 30,
2017 2016 2017 2016
Revenue
Subscriptions $125,252 $104,039 $243,431 $200,890
Maintenance 32,917 37,449 66,698 74,609
Services and other 34,026 38,703 65,687 73,948
Total revenue 192,195 180,191 375,816 349,447
Cost of revenue
Cost of subscriptions 57,365 52,163 112,291 101,829
Cost of maintenance 5,871 5,698 11,853 11,016
Cost of services and other 23,759 25,751 48,333 50,656
Total cost of revenue 86,995 83,612 172,477 163,501
------ ------ ------- -------
Gross profit 105,200 96,579 203,339 185,946
------- ------ ------- -------
Operating expenses
Sales, marketing and customer success 42,961 39,408 85,201 75,017
Research and development 22,870 22,748 45,576 45,463
General and administrative 21,882 20,091 43,805 39,770
Amortization 739 708 1,430 1,460
Total operating expenses 88,452 82,955 176,012 161,710
------ ------ ------- -------
Income from operations 16,748 13,624 27,327 24,236
------ ------ ------ ------
Interest expense (3,216) (2,721) (5,593) (5,396)
Other income (expense), net 827 (65) 1,113 (170)
--- --- ----- ----
Income before provision for income taxes 14,359 10,838 22,847 18,670
Income tax provision 3,194 1,778 171 3,373
----- ----- --- -----
Net income $11,165 $9,060 $22,676 $15,297
------- ------ ------- -------
Earnings per share
Basic $0.24 $0.20 $0.49 $0.33
Diluted $0.23 $0.19 $0.48 $0.32
Common shares and equivalents outstanding
Basic weighted average shares 46,662,481 46,083,055 46,584,263 46,047,788
Diluted weighted average shares 47,691,340 47,263,844 47,586,893 47,184,926
Dividends per share $0.12 $0.12 $0.24 $0.24
Other comprehensive (loss) income
Foreign currency translation adjustment (379) (431) (279) (28)
Unrealized (loss) gain on derivative instruments, net of tax (4) (118) 178 (787)
--- ---- --- ----
Total other comprehensive loss (383) (549) (101) (815)
---- ---- ---- ----
Comprehensive income $10,782 $8,511 $22,575 $14,482
-------------------- ------- ------ ------- -------
Blackbaud, Inc.
Consolidated statements of cash flows
(Unaudited)
Six months ended
June 30,
(dollars in thousands) 2017 2016
Cash flows from operating activities
Net income $22,676 $15,297
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 36,481 35,549
Provision for doubtful accounts and sales returns 5,469 2,264
Stock-based compensation expense 20,129 16,187
Deferred taxes (1,239) (287)
Amortization of deferred financing costs and discount 468 478
Other non-cash adjustments (540) (429)
Changes in operating assets and liabilities, net of acquisition and disposal of businesses:
Accounts receivable (44,887) (30,097)
Prepaid expenses and other assets (2,501) (6,011)
Trade accounts payable (3,951) 8,857
Accrued expenses and other liabilities (8,467) (12,713)
Restricted cash due to customers 64,288 62,038
Due to customers (64,288) (62,038)
Deferred revenue 30,913 19,658
Net cash provided by operating activities 54,551 48,753
Cash flows from investing activities
Purchase of property and equipment (5,666) (12,569)
Capitalized software development costs (13,614) (12,168)
Purchase of net assets of acquired companies, net of cash (49,729) 530
Purchase of derivative instruments (516) -
Net cash used in investing activities (69,525) (24,207)
Cash flows from financing activities
Proceeds from issuance of debt 575,700 120,900
Payments on debt (529,169) (126,088)
Debt issuance costs (3,085) -
Employee taxes paid for withheld shares upon equity award settlement (16,644) (8,037)
Proceeds from exercise of stock options 14 5
Dividend payments to stockholders (11,530) (11,398)
Net cash provided by (used in) financing activities 15,286 (24,618)
Effect of exchange rate on cash and cash equivalents 54 (27)
Net increase (decrease) in cash and cash equivalents 366 (99)
Cash and cash equivalents, beginning of period 16,902 15,362
------ ------
Cash and cash equivalents, end of period $17,268 $15,263
---------------------------------------- ------- -------
Blackbaud, Inc.
Reconciliation of GAAP to non-GAAP financial measures
(Unaudited)
(dollars in thousands, except per share amounts) Three months ended Six months ended
June 30, June 30,
2017 2016 2017 2016
GAAP Revenue $192,195 $180,191 $375,816 $349,447
Non-GAAP adjustments:
Add: Acquisition-related deferred revenue write-down 348 1,853 348 3,639
Non-GAAP revenue $192,543 $182,044 $376,164 $353,086
-------- -------- -------- --------
GAAP gross profit $105,200 $96,579 $203,339 $185,946
GAAP gross margin 54.7% 53.6% 54.1% 53.2%
Non-GAAP adjustments:
Add: Acquisition-related deferred revenue write-down 348 1,853 348 3,639
Add: Stock-based compensation expense 950 842 1,741 1,687
Add: Amortization of intangibles from business combinations 10,072 9,927 19,927 19,808
Add: Employee severance 21 78 973 142
Add: Acquisition-related integration costs - - 86 -
Subtotal 11,391 12,700 23,075 25,276
Non-GAAP gross profit $116,591 $109,279 $226,414 $211,222
-------- -------- -------- --------
Non-GAAP gross margin 60.6% 60.0% 60.2% 59.8%
GAAP income from operations $16,748 $13,624 $27,327 $24,236
GAAP operating margin 8.7% 7.6% 7.3% 6.9%
Non-GAAP adjustments:
Add: Acquisition-related deferred revenue write-down 348 1,853 348 3,639
Add: Stock-based compensation expense 10,835 8,444 20,129 16,187
Add: Amortization of intangibles from business combinations 10,811 10,635 21,357 21,268
Add: Employee severance 120 113 2,866 401
Add: Acquisition-related integration costs - 119 230 502
Add: Acquisition-related expenses 1,762 - 2,332 113
Subtotal 23,876 21,164 47,262 42,110
Non-GAAP income from operations $40,624 $34,788 $74,589 $66,346
Non-GAAP operating margin 21.1% 19.1% 19.8% 18.8%
GAAP net income $11,165 $9,060 $22,676 $15,297
Shares used in computing GAAP diluted earnings per share 47,691,340 47,263,844 47,586,893 47,184,926
GAAP diluted earnings per share $0.23 $0.19 $0.48 $0.32
Non-GAAP adjustments:
Add: Total Non-GAAP adjustments affecting income from operations 23,876 21,164 47,262 42,110
Less: Gain on derivative instrument (475) - (475) -
Add: Loss on debt extinguishment 162 - 162 -
Less: Tax impact related to Non-GAAP adjustments (8,941) (8,463) (22,164) (16,076)
------ ------
Non-GAAP net income $25,787 $21,761 $47,461 $41,331
------- ------- ------- -------
Shares used in computing Non-GAAP diluted earnings per share 47,691,340 47,263,844 47,586,893 47,184,926
Non-GAAP diluted earnings per share $0.54 $0.46 $1.00 $0.88
----------------------------------- ----- ----- ----- -----
Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP financial measures (continued)
(Unaudited)
(dollars in thousands) Three months ended Six months ended
June 30, June 30,
2017 2016 2017 2016
Detail of certain Non-GAAP adjustments:
Stock-based compensation expense:
Included in cost of revenue:
Cost of subscriptions $338 $311 $632 $586
Cost of maintenance 105 136 191 254
Cost of services and other 507 395 918 847
Total included in cost of revenue 950 842 1,741 1,687
Included in operating expenses:
Sales, marketing and customer success 1,781 1,021 3,220 1,917
Research and development 2,067 1,729 3,784 3,200
General and administrative 6,037 4,852 11,384 9,383
----- -----
Total included in operating expenses 9,885 7,602 18,388 14,500
----- -----
Total stock-based compensation expense $10,835 $8,444 $20,129 $16,187
------- ------ ------- -------
Amortization of intangibles from business combinations:
Included in cost of revenue:
Cost of subscriptions $8,127 $7,853 $16,038 $15,664
Cost of maintenance 1,289 1,332 2,582 2,664
Cost of services and other 656 742 1,307 1,480
Total included in cost of revenue 10,072 9,927 19,927 19,808
Included in operating expenses 739 708 1,430 1,460
--- --- ----- -----
Total amortization of intangibles from business combinations $10,811 $10,635 $21,357 $21,268
------------------------------------------------------------ ------- ------- ------- -------
Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP financial measures (continued)
(Unaudited)
(dollars in thousands) Three months ended Six months ended
June 30, June 30,
2017 2016 2017 2016
GAAP revenue $192,195 $180,191 $375,816 $349,447
GAAP revenue growth 6.7% 7.5%
(Less) Add: Non-GAAP acquisition-related revenue (1) (1,914) 1,853 (1,914) 3,639
Total Non-GAAP adjustments (1,914) 1,853 (1,914) 3,639
Non-GAAP revenue (2) $190,281 $182,044 $373,902 $353,086
-------- -------- -------- --------
Non-GAAP organic revenue growth 4.5% 5.9%
Non-GAAP revenue (2) $190,281 $182,044 $373,902 $353,086
Foreign currency impact on Non-GAAP revenue (3) 1,125 - 1,265 -
Non-GAAP revenue on constant currency basis (3) $191,406 $182,044 $375,167 $353,086
-------- -------- -------- --------
Non-GAAP organic revenue growth on constant currency basis 5.1% 6.3%
GAAP subscriptions revenue $125,252 $104,039 $243,431 $200,890
GAAP subscriptions revenue growth 20.4% 21.2%
(Less) Add: Non-GAAP acquisition-related revenue (1) (1,763) 1,780 (1,763) 3,534
Total Non-GAAP adjustments (1,763) 1,780 (1,763) 3,534
Non-GAAP organic subscriptions revenue $123,489 $105,819 $241,668 $204,424
-------- -------- -------- --------
Non-GAAP organic subscriptions revenue growth 16.7% 18.2%
GAAP subscriptions revenue $125,252 $104,039 $243,431 $200,890
GAAP maintenance revenue $32,917 $37,449 66,698 74,609
GAAP recurring revenue $158,169 $141,488 $310,129 $275,499
GAAP recurring revenue growth 11.8% 12.6%
(Less) Add: Non-GAAP acquisition-related revenue (1) (1,763) 1,844 (1,763) 3,625
Total Non-GAAP adjustments (1,763) 1,844 (1,763) 3,625
Non-GAAP recurring revenue $156,406 $143,332 $308,366 $279,124
-------- -------- -------- --------
Non-GAAP organic recurring revenue growth 9.1% 10.5%
----------------------------------------- --- ----
(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) Non-GAAP revenue for the prior year periods presented herein may 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.
(3) 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.
(dollars in thousands) Six months ended
June 30,
2017 2016
GAAP net cash provided by operating activities $54,551 $48,753
Less: purchase of property and equipment (5,666) (12,569)
Less: capitalized software development costs (13,614) (12,168)
Non-GAAP free cash flow $35,271 $24,016
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SOURCE Blackbaud
