Blackbaud Inc (BLKB)

Interest coverage

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Earnings before interest and tax (EBIT) US$ in thousands -255,957 57,566 -14,252 21,372 35,074
Interest expense US$ in thousands 55,634 39,922 35,803 18,003 17,287
Interest coverage -4.60 1.44 -0.40 1.19 2.03

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-255,957K ÷ $55,634K
= -4.60

The interest coverage ratio for Blackbaud Inc has exhibited significant fluctuations over the years. As of December 31, 2020, the company's interest coverage stood at 2.03, indicating that the firm was able to cover its interest expenses comfortably with its operating income. However, by December 31, 2021, the ratio decreased to 1.19, suggesting a slight decline in the company's ability to cover its interest obligations.

The situation seemed to deteriorate further by December 31, 2022, with an interest coverage ratio of -0.40. This negative value implies that Blackbaud Inc's operating income was insufficient to cover its interest expenses during that period, raising concerns about the company's financial health and ability to meet its debt obligations.

Despite the challenging year in 2022, there was a slight improvement in the company's interest coverage by December 31, 2023, as the ratio increased to 1.44. This improvement indicates a better ability to meet interest payments compared to the previous year.

However, by December 31, 2024, the interest coverage ratio plummeted to -4.60, reflecting a significant deterioration in the company's financial position. A negative interest coverage ratio suggests that Blackbaud Inc's operating income was insufficient to cover its interest expenses, indicating a high risk of default on its debt obligations.

Overall, the trend in Blackbaud Inc's interest coverage ratio shows fluctuations, with notable declines and one period of negative coverage, demonstrating potential challenges in meeting the company's interest obligations and highlighting the importance of monitoring the company's financial performance closely.