After Blackboard’s recent earnings announcement and conference call, Jim Farmer and I had a chat about what we learned. One thing that struck us both was that Blackboard’s total number of LMS license customers is declining. Jim, being handy with Excel, put this chart together:

There is a clear long-term trend toward reduced number of total LMS licenses. Furthermore, Blackboard reported a slight decline (by three licenses, compared with a gain of 45 licenses in the same quarter of the previous year) of Enterprise licenses from last quarter to this quarter. At the same time, they are still hitting their revenue and profit numbers, and they have not guided analyst expectations lower. So what’s really going on here?
As is often the case when analyzing the data from publicly traded companies, the answers aren’t entirely clear. I have some thoughts, though, which I’m happy to share. Before I do, I want to thank Blackboard Vice President, Investor Relations & Global Treasury Michael Stanton, who was as helpful and forthcoming as he is legally allowed to be under SEC regulations in answering follow-up questions that I sent to him on the topic.
