Anthony Boor, BlackbaudExpenses took a bite out of the bottom line at nonprofit vendor Blackbaud as the company had good sales growth. Net income for the first quarter ended March 31 dropped to $2.8 million, down 62.2 percent from $7.3 million in last year's corresponding period. Revenue grew to $94.7 million, up 9.3 percent from $86.6 million a year ago.
The increase in subscription sales was the big revenue story. CEO Marc Chardon said in an earnings webcast that in new business sales, subscription units outnumbered perpetual licenses by five to one. Chardon said subscription sales represented one third of Raiser's Edge revenue, compared to single digits a year ago. The company also got a boost from a new subscription-based offering which spurred a 50-percent growth in Financial Edge sales. Chardon said subscription pricing helped Financial Edge reach a new market. Results were hampered by a decline in gross margins, which came in 56.6 percent in the most recently ended period, down from last year's 58.2 percent. Operating expenses rose 19 percent to $48.4 million in the first quarter, up from $40.7 million. In its prepared statement, the company stated its investments in improving back-office business processes "were more front-end weighted than originally expected ... " and that it had accelerated hiring in sales and marketing. CFO Anthony Boor said during the webcast that the company expects savings later in the year from the back-office project will offset some expenses from this quarter. He added the company considers many expenses non-recurring.
Last modified on Sunday, 16 June 2013
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Bob Scott

Bob Scott has been informing and entertaining the mid-market financial software community with his email newsletters for 10 years. And he has been covering this market through print publications for 18 years, first as technology editor of Accounting Today and then as the Editor of Accounting Technology from 1997 through 2009. He has covered the traditional tax and accounting profession during the same time and continues to address that as executive editor of the Progressive Accountant.

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