Blackbaud Inc (BLKB)

Interest coverage

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	57,566	7,295	-22,969	-22,854	-19,772	-11,015	4,251	14,594	25,086	30,438	28,359	35,041	38,901	43,458	42,870	38,330	31,203	43,503	49,098	45,146
Interest expense (ttm)	US$ in thousands	39,922	41,340	41,057	38,866	35,803	29,744	24,410	20,488	18,003	19,409	19,403	18,242	17,287	16,434	17,548	19,454	20,618	20,171	19,200	17,704
Interest coverage		1.44	0.18	-0.56	-0.59	-0.55	-0.37	0.17	0.71	1.39	1.57	1.46	1.92	2.25	2.64	2.44	1.97	1.51	2.16	2.56	2.55

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $57,566K ÷ $39,922K
= 1.44

The interest coverage ratio measures a company's ability to meet its interest obligations. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.

Based on the data provided for Blackbaud Inc, the interest coverage ratio has fluctuated significantly over the past eight quarters. In Q4 2023, the interest coverage ratio was 1.44, indicating that the company's operating income was sufficient to cover its interest expenses. However, in the previous quarters, the ratio was negative, with Q3 2023 showing the lowest figure at -0.08.

The negative interest coverage ratios in Q3 2023, Q2 2023, Q1 2023, Q4 2022, and Q3 2022 suggest that Blackbaud Inc did not have enough operating income to cover its interest payments during those periods. This raises concerns about the company's ability to meet its interest obligations and may indicate financial distress.

It is essential for Blackbaud Inc to closely monitor its interest coverage ratio and take proactive measures to improve its financial performance and ensure it can meet its debt obligations in the long term.