Software Maker Targeting huge nonprofits

Charleston-based software maker Blackbaud Inc. announced a 30 percent increase in third-quarter profit Monday, as it closed larger sales and continued to squeeze big gains out of the product that it has built its business on. Blackbaud's earnings for the three-months ended Sept. 30 increased to $9.9 million from $7.6 million.

Revenue for the quarter jumped to $49.9 million, a 16 percent increase. With a string of equally impressive quarters, Blackbaud has become a favored pick of professional investors.

The company rang the opening bell of the Nasdaq to mark its 20th year of business earlier this month. And in a report released last week, J.P. Morgan said Blackbaud was its top pick when it looks to invest in small companies.

However, the company, which sells fundraising software to nonprofit organization, is thinking big.

Last year, it created a special sales team to target the country's huge nonprofits, a strategy that is paying off. The average Blackbaud sale climbed to $40,000 in the third quarter, compared with $30,000 last year. The company's main product is called the Raiser's Edge, which accounts for a major portion of its software sales.

Blackbaud executives increased their full-year guidance, predicting a 15.5 percent gain in revenue and profit of 75 cents to 76 cents a share, up from previous estimates of 73 cents to 74 cents. The company also said its board approved a fourth-quarter dividend of 7 cents a share, which will be payable Dec. 15 to stockholders of record Nov. 28. For the first nine months of the year, Blackbaud income climbed 19.2 percent to $25,8 million as it posted $142.4 million in revenue, a 15.4 percent gain.

The company is hoping to tap new pockets of the nonprofit software market with a suite of new products next year, including software designed to handle institutions and philanthropic campaigns that draw lots of smaller donations in the $5 to $100 range.

Shares of Blackbaud fell from $24.09 to $23.39 in heavier-than-usual trading on the Nasdaq Stock Exchange on Monday. However, the stock has climbed 37.3 percent this year, compared with a 6.6 percent gain by the Nasdaq Composite Index.