Revenues Increase 34%, Company Posts Net Income for Third Quarter 2003 

WASHINGTON, D.C. – November 4, 2003 – Blackboard Inc., a leading enterprise software company for e-Education, announces record revenue for the third quarter ended September 30, 2003.  Blackboard Inc. is a privately held company.

In the third quarter, Blackboard® revenues were $25.5 million, representing 34% growth from third quarter 2002 revenues of $19.0 million.  Of the Company’s $25.5 million in revenues, product revenue accounted for approximately $22.3 million or 87% of total revenues, while services revenue was $3.2 million, or 13% of total revenues. 

During the third quarter of 2003, Blackboard had net income for the first time in its history.  The Company also had EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) in excess of $3 million and had positive cash flow from operations.  Blackboard ended the third quarter of 2003 with $22.1 million in cash and cash equivalents.

“We are extremely pleased to have posted net income for the first time in Blackboard’s history, and slightly ahead of our targeted plan.” said Peter Repetti, Chief Financial Officer for Blackboard.  “With five consecutive quarters of positive cash flow from operations and EBITDA profitability, Blackboard’s proven and now profitable business model ensures that we are poised for continued growth and investment in client success.”

“The third quarter marked the achievement of several milestones for the Company,” said Michael Chasen, Chief Executive Officer for Blackboard.  “We invested heavily in the areas of support services and product development to continually enhance the overall e-Education experience of our clients.  During the quarter, we made a significant investment in client support with the introduction of a new support model and doubling of the size of our overall support team.  Additionally, we are very pleased with our innovative product development efforts related to the Blackboard Content System, which will be available in early 2004.”

New and Expanding Client Relationships in the Third Quarter

• U.S. Higher Education Market: California State University System, Illinois Institute of Technology, Indiana Wesleyan University, Troy State University, University of Washington, Vermont State Colleges, and others.
• International Markets: Kobe College (Japan, IFAGE (Switzerland), Università di Corsica (France), Universidad Juarez Autonomo de Tabasco, University of Bradford (UK), and the University of the Virgin Islands, and others.
• K-12 Market: Baltimore City Public Schools, Columbus Public Schools, Michigan Virtual University, Monroe City Schools, Sycamore Public Schools, the University of California College Prep, and the Virtual High School, and others.
  

Corporate Highlights from the Third Quarter

• Blackboard was named the fastest growing private education company in the annual Inc. 500 rankings.  Blackboard’s 11,047% revenue growth from 1998 through 2002 also earned the Company the #6 ranking in the overall list of the Inc. 500.  Blackboard’s yearly revenue was $620,000 in 1998 and $69.2 million in 2002.
• Blackboard announced the development of an education-specific learning content management and e-Portfolio system – the Blackboard Content System™.   Slated for general release in the fourth quarter of this year, the Blackboard Content System will benefit students, faculty and campus IT administrators by lowering the costs and increasing the simplicity of managing learning content, digital assets and e-Portfolios in an enterprise learning environment.  Already, two clients have decided to license the new Blackboard Content System in advance of its pending launch.
• Blackboard and CERNET Corporation formed CERNET-Blackboard Information Technology Company, LTD, which aims to accelerate the adoption of e-Education technologies throughout China.  The new company has already launched the Study Center and begun licensing the Blackboard Learning System to education institutions in the People’s Republic of China.
• Blackboard held the first annual Blackboard Building Blocks Developers Workshop.  More than 100 academic and commercial developers of next-generation e-Learning technologies attended the conference, which marked the first dedicated developer event for a major commercial e-Learning platform in the academic market, and a milestone for course management systems.

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