This is a summary of the second quarter fiscal 2008 earnings call conducted by Blackboard, Inc. (BBBB: chart) on August 6, 2008.

Management:
President and CEO: Michael Chason
CFO: Mike Beach
VP – Investor Relations: Michael Stanton

Key Investor Issues:

- Blackboard earned $1 million, or 3 cents per share, down from a profit of $3.4 million, or 12 cents per share, in the same period last year.
- Revenue rose 27% to $75.5 million from $59.4 million last year.
- Operating costs rose 39% from a year ago to $74.7 million.
- Blackboard expects third-quarter results in the range of a loss of 2 cents per share to a profit of 2 cents per share.
- The company sees adjusted earnings between 18 cents and 20 cents per share on sales of $82 million to $84 million

Second Quarter Highlights:

The company closed its very first K-20 e-learning deal in the State of New Mexico. This landmark initiative which the company was awarded in June will lead to the deployment of a single statewide e-learning platform that will connect teaching, learning, and training for the state''s K-12 higher education, adult education and government communities.

The State of Florida selected Blackboard for a pilot program in allowing the Florida Division of Emergency Management and four Florida counties to use the Blackboard Connect product for time sensitive alerts and notifications. Collectively, over 1 million households will now be included in the pilot. Blackboard believes that this pilot program could expand greatly to potentially include every household in the state.

The State of Mississippi has implemented the Blackboard Connect product to provide the Executive Director of Mississippi Emergency Management Agency and the Governor of Mississippi the ability to communicate with residents and staff regarding time-sensitive incidents.

The U.S. higher education sales team did an outstanding job in the second quarter. A few examples of the deals that the team won include the University of Great Falls in Montana and the College of Desert in California are two new U.S. higher education clients who licensed the Enterprise Blackboard Learning System in the company’s managed hosting offering.

A few competitive reevaluations in the quarter were Palm Beach Community College in Florida and Christopher Newport University in Virginia.

Throughout the reevaluation process, Blackboard was able to turn them into significantly higher recurring revenue relationships. Both of these institutions elected to upgrade to the Enterprise Blackboard Learning System and add the company’s managed hosting offering to support their e-learning programs.

The Oregon University System selected Blackboard''s Connect-ED product to provide the university leaders at its nine campuses with the ability to quickly reach students, faculty and staff with time-sensitive information. Finally, the company had a number of large deals for the Blackboard Transaction System including Fort Lewis College, New York School of Law, North Georgia College and State University and the University of Arizona.

On the international sales front, Imperial College of London in the United Kingdom added the Blackboard Community System and the Blackboard Learning System. Also in the United Kingdom, the University of Manchester signed a significant long-term deal for the Blackboard Learning System and the company’s managed hosting offering.

The company had another significant expansion sale in Colombia with SENA which provides workforce development for more than one million learners.

SENA has licensed the Blackboard Learning System, Blackboard Community System and the Blackboard Content System as well as the company’s managed hosting offering and has significant plans to grow their program over the next several years. SENA has rapidly become the largest deployment of a course management system in the world.

In K-12 sales, the company made a couple of deals, including St. Paul Public Schools in Minnesota, which licensed the Blackboard Connect product to provide mass notification service for its 40,000 students. Volusia County Schools in Florida moved from the Basic to the Enterprise Blackboard Learning System. This was a great up sell, where the company increased the client value fivefold despite some significant budget cuts in the State of Florida.

In terms of Blackboard Connect progress, there were nearly 200 new Blackboard Connect deals closed in the second quarter.

Importantly, 35 of these deals were cross sells to existing Blackboard U.S. higher education clients.

The company ended the quarter with the total of 6,327 enterprise category licenses.

- 2,335 licenses of the Enterprise Blackboard Learning System,
- 811 licenses of the Blackboard Community System,
- 466 licenses of the Blackboard Content System,
- 29 licenses of the Blackboard Outcomes System,
- 444 licenses of the Blackboard Transaction System,
- 2,242 licenses of the new Blackboard Connect offering.