Blackboard rides the education boom

Posted Nov 4th 2009 12:40PM by Tom Taulli
Filed under: Earnings Reports

No doubt, the internet is transforming the education market. After all, schools need to find ways to cut costs as well as improve instruction. And, the dominant player in providing digital solutions for education is Blackboard (NASDAQ: BBBB).

In Q3, the company posted an 18% increase in revenues to $98.4 million, with net income of $4.3 million or $0.13 per share. The big growth drivers came from professional services and managed hosting solutions (there are 834 such clients).

What's more, Blackboard continues to crank out impressive cash flow numbers. In Q3, cash flow from operations came to $76 million. In all, there is $132 million in the bank, which is a good amount to continue Blackboard's acquisition strategy.

It also looks like the budget environment is improving for Blackboard products. For example, the company struck a variety of deals across the globe with organizations like Florida A&M, Grambling State University, Delft University of Technology, and King Faisal University.

And yes, Blackboard is getting into the mobile space. The company's iPhone offering is on nearly 50 campuses. True, the revenues are still minimal, but Blackboard thinks the addressable market is more than $100 million.

For 2009, Blackboard expects revenues of $373.6 million to $376.6 million, with net income of $4.4 million to $6.5 million.

Tom Taulli is the author of various books, including The Complete M&A Handbook.

Tags: BBBB, Blackboard, earnings