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Blackbaud Announces 2023 Second Quarter Results

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Company Shows Continued Strong Progress on Five-Point Operating Plan; 
Reiterates Increased 2023 Financial Guidance

CHARLESTON, S.C., Aug. 1, 2023 /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the leading provider of software for powering social impact, today announced financial results for its second quarter ended June 30, 2023.

"We had a solid second quarter, and I'm very pleased with the progress we are making on our five-point operating plan," said Mike Gianoni, president and CEO, Blackbaud. "We released new product capabilities, launched our Intelligence for Good® vision for AI, brought on important new clients, continued to shift to modern contractual pricing and terms, and are delivering more value to our customers—all of which was enabled by our dedicated and passionate employees. Our business momentum is driving strong returns, and I'm optimistic about the future."

Second Quarter 2023 Results Compared to Second Quarter 2022 Results:

  • GAAP total revenue was $271.0 million, up 2.3%, with $262.4 million in GAAP recurring revenue, up 3.9%.
  • Non-GAAP organic recurring revenue increased 4.4%.
  • GAAP income from operations was $0.3 million, inclusive of security incident-related costs of $26.8 million, with GAAP operating margin of 0.1%, an increase of 10 basis points.
  • Non-GAAP income from operations was $74.1 million, with non-GAAP operating margin of 27.4%, an increase of 680 basis points.
  • GAAP net income was $2.1 million, with GAAP diluted earnings per share of $0.04, up $0.11 per share.
  • Non-GAAP net income was $52.6 million, with non-GAAP diluted earnings per share of $0.98, up $0.23 per share.
  • Non-GAAP adjusted EBITDA was $88.8 million, up $18.2 million, with non-GAAP adjusted EBITDA margin of 32.8%, an increase of 620 basis points.
  • GAAP net cash provided by operating activities was $53.2 million, a decrease of $4.1 million.
  • Non-GAAP adjusted free cash flow was $43.6 million, a decrease of $0.3 million, with non-GAAP adjusted free cash flow margin of 16.1%, a decrease of 50 basis points.

"Second quarter financial results were solid and in line with the increased guidance we announced in Q1," said Tony Boor, executive vice president and CFO, Blackbaud. "Total revenue of $271 million represented organic growth at constant currency of 3.2%. Organic recurring revenue at constant currency grew faster at 4.8%. Transactional revenue grew in the high single digits year over year, and the operational progress we made in the quarter on modernized pricing has positioned us well for accelerating revenue growth over the remainder of the year. The actions we have taken to reduce costs are driving meaningful benefits, including a significant improvement in adjusted EBITDA, both sequentially and over last year's second quarter. Adjusted EBITDA margin of 32.9% at constant currency was a roughly six-point improvement year over year.  By the fourth quarter of this year, we expect to achieve organic revenue growth in the high-single digits as well as Rule of 40 well ahead of our prior target of 2025."

An explanation of all non-GAAP financial measures referenced in this press release, including the Rule of 40, is included below under the heading "Non-GAAP Financial Measures." A reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Recent Company Highlights

  • Blackbaud announced the launch of a major new wave of its Intelligence for Good® strategy, with an extensive agenda of initiatives and investments to be implemented on a rolling basis over upcoming quarters, targeted at making artificial intelligence (AI) more accessible, powerful and responsible across the social impact sector. 
  • Blackbaud announced that JustGiving surpassed £6 billion ($8.5 billion) in donations through the platform. To date, JustGiving has managed almost 200 million donations from more than 180 countries.
  • Blackbaud announced a strategic investment in Momentum, a generative AI startup for social impact, a Blackbaud partner, and a graduate of Blackbaud's Social Good Startup tech accelerator program. Additionally, Blackbaud welcomed the newest cohort of participants in its Social Good Startup Program. The July 2023 cohort is specifically focused on mission-driven tech startups using generative AI to increase impact for companies and nonprofits focused on social responsibility.
  • Blackbaud announced its refreshed Blackbaud Partner Network, which is expected to deliver shared value for partners, customers and the company. The revamped program simplifies partner onboarding and offers new resources to grow the network.
  • Blackbaud hosted bbdevdays, its annual developers' conference, showcasing technical innovation as well as customer and partner achievements. This three-day, virtual event celebrates and supports Blackbaud's rapidly expanding developer community. Conference registrations were up approximately 50% from 2022.
  • EVERFI® from Blackbaud® launched several innovative content programs and platform improvements, including new resources for increasing financial capability in K-12 schools, enabling strategic partners to drive direct impact in communities.
  • Blackbaud released its 2022 Environmental, Social and Governance (ESG) Report, demonstrating how the company is taking action to amplify its global impact through continued progress across key ESG priorities.

Visit www.blackbaud.com/newsroom for more information about Blackbaud's recent highlights.

Financial Outlook
Blackbaud today reiterated its 2023 full year financial guidance:

  • Non-GAAP revenue of $1.095 billion to $1.125 billion
  • Non-GAAP adjusted EBITDA margin of 30.5% to 31.5%
  • Non-GAAP earnings per share of $3.63 to $3.94
  • Non-GAAP adjusted free cash flow of $190 million to $210 million
  • Included in its 2023 full year financial guidance are the following assumptions:
  • Non-GAAP annualized effective tax rate is expected to be approximately 20%
  • Interest expense for the year is expected to be approximately $37 million to $41 million
  • Fully diluted shares for the year are expected to be in the range of approximately 53 million to 54 million
  • Capital expenditures for the year are expected to be in the range of approximately $65 million to $75 million, including approximately $55 million to $65 million of capitalized software and content development costs

Blackbaud has not reconciled forward-looking full-year non-GAAP financial measures contained in this news release to their most directly comparable GAAP measures, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to compensation, acquisition transactions and integration, tax items or others that may arise during the year. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts.

In order to provide a meaningful basis for comparison, Blackbaud uses non-GAAP adjusted free cash flow in analyzing its operating performance. Non-GAAP adjusted free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, capital expenditures for property and equipment, plus cash outflows, net of insurance, related to the previously disclosed Security Incident discovered in May 2020 (the "Security Incident"). Total costs related to the Security Incident exceeded the limit of our insurance coverage during the first quarter of 2022. For full year 2023, Blackbaud currently expects net cash outlays of $25 million to $35 million for ongoing legal fees related to the Security Incident. In line with the company's policy, all associated costs due to third-party service providers and consultants, including legal fees, are expensed as incurred. Please refer to the section below titled "Non-GAAP Financial Measures" for more information on Blackbaud's use of non-GAAP financial measures.

Conference Call Details
What:        Blackbaud's 2023 Second Quarter Conference Call
When:       August 2, 2023
Time:        8:00 a.m. (Eastern Time)
Live Call:  1-877-407-3088 (US/Canada)
Webcast:  Blackbaud's Investor Relations Webpage

About Blackbaud
Blackbaud (NASDAQ: BLKB) is the leading software provider exclusively dedicated to powering social impact. Serving the nonprofit and education sectors, companies committed to social responsibility and individual change makers, Blackbaud's essential software is built to accelerate impact in fundraising, nonprofit financial management, digital giving, grantmaking, corporate social responsibility and education management. With millions of users and over $100 billion raised, granted or managed through Blackbaud platforms every year, Blackbaud's solutions are unleashing the potential of the people and organizations who change the world. Blackbaud has been named to Newsweek's list of America's Most Responsible Companies, Quartz's list of Best Companies for Remote Workers, and Forbes' list of America's Best Employers. A remote-first company, Blackbaud has operations in the United States, Australia, Canada, Costa Rica and the United Kingdom, supporting users in 100+ countries. Learn more at www.blackbaud.com or follow us on Twitter, LinkedIn, Instagram and Facebook.

Investor Contact


Media Contact


IR@blackbaud.com


media@blackbaud.com


Forward-Looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the predictability of our financial condition and results of operations. These statements involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: management of integration of acquired companies; uncertainty regarding increased business and renewals from existing customers; a shifting revenue mix that may impact gross margin; continued success in sales growth; cybersecurity and data protection risks and related liabilities; potential litigation involving us; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Blackbaud's investor relations department. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Trademarks
All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

Non-GAAP Financial Measures 
Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. Blackbaud uses non-GAAP financial measures internally in analyzing its operational performance. Accordingly, Blackbaud believes these non-GAAP measures are useful to investors, as a supplement to GAAP measures, in evaluating its ongoing operational performance and trends and in comparing its financial results from period-to-period with other companies in Blackbaud's industry, many of which present similar non-GAAP financial measures to investors. However, these non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies.

The non-GAAP financial measures discussed above exclude the impact of certain transactions that Blackbaud believes are not directly related to its operating performance in any particular period, but are for its long-term benefit over multiple periods. Blackbaud believes these non-GAAP financial measures reflect its ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.

While Blackbaud believes these non-GAAP measures provide useful supplemental information, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures.

Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, and capital expenditures for property and equipment. In addition, and in order to provide a meaningful basis for comparison, Blackbaud now uses non-GAAP adjusted free cash flow in analyzing its operating performance. Non-GAAP adjusted free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, and capital expenditures for property and equipment, plus cash outflows, net of insurance, related to the Security Incident. Blackbaud believes non-GAAP free cash flow and non-GAAP adjusted free cash flow provide useful measures of the company's operating performance. Non-GAAP adjusted free cash flow is not intended to represent and should not be viewed as the amount of residual cash flow available for discretionary expenditures.

In addition, Blackbaud uses non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic recurring revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, in analyzing its operating performance. Blackbaud believes that these non-GAAP measures are useful to investors, as a supplement to GAAP measures, for evaluating the periodic growth of its business on a consistent basis. Each of these measures excludes incremental acquisition-related revenue attributable to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, each of these measures reflects presentation of full-year incremental non-GAAP revenue derived from such companies as if they were combined throughout the prior period. In addition, each of these measures excludes prior period revenue associated with divested businesses. The exclusion of the prior period revenue is to present the results of the divested businesses within the results of the combined company for the same period of time in both the prior and current periods. Blackbaud believes this presentation provides a more comparable representation of its current business' organic revenue growth and revenue run-rate.

Rule of 40 is defined as non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. Non-GAAP adjusted EBITDA is defined as GAAP net income plus interest, net; income tax provision (benefit); depreciation; amortization of intangible assets from business combinations; amortization of software and content development costs; stock-based compensation; employee severance; acquisition and disposition-related costs; restructuring and other real estate activities; costs, net of insurance, related to the Security Incident; and impairment of capitalized software development costs.

 

Blackbaud, Inc.

Consolidated Balance Sheets

(Unaudited)


(dollars in thousands, except per share amounts)

June 30,
2023

December 31,
2022

Assets



Current assets:



Cash and cash equivalents

$           29,041

$           31,691

Restricted cash

761,289

702,240

Accounts receivable, net of allowance of $8,081 and $7,318 at June 30, 2023 and
December 31, 2022, respectively

168,908

102,809

Customer funds receivable

3,731

249

Prepaid expenses and other current assets

81,597

81,654

Total current assets

1,044,566

918,643

Property and equipment, net

104,672

107,426

Operating lease right-of-use assets

45,497

45,899

Software and content development costs, net

151,158

141,023

Goodwill

1,053,342

1,050,272

Intangible assets, net

609,524

635,136

Other assets

84,254

94,304

Total assets

$      3,093,013

$      2,992,703

Liabilities and stockholders' equity



Current liabilities:



Trade accounts payable

$           40,730

$           42,559

Accrued expenses and other current liabilities

102,747

86,002

Due to customers

763,845

700,860

Debt, current portion

19,176

18,802

Deferred revenue, current portion

434,631

382,419

Total current liabilities

1,361,129

1,230,642

Debt, net of current portion

827,403

840,241

Deferred tax liability

91,306

125,759

Deferred revenue, net of current portion

3,520

2,817

Operating lease liabilities, net of current portion

43,529

44,918

Other liabilities

4,756

4,294

Total liabilities

2,331,643

2,248,671

Commitments and contingencies



Stockholders' equity:



Preferred stock; 20,000,000 shares authorized, none outstanding

Common stock, $0.001 par value; 180,000,000 shares authorized, 69,164,244 and
67,814,044 shares issued at June 30, 2023 and December 31, 2022, respectively

69

68

Additional paid-in capital

1,138,553

1,075,264

Treasury stock, at cost; 15,311,367 and 14,745,230 shares at June 30, 2023 and
December 31, 2022, respectively

(570,547)

(537,287)

Accumulated other comprehensive income

8,842

8,938

Retained earnings

184,453

197,049

Total stockholders' equity

761,370

744,032

Total liabilities and stockholders' equity

$      3,093,013

$      2,992,703

 

Blackbaud, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)


(dollars in thousands, except per share amounts)

Three months ended
June 30,


Six months ended
June 30,

2023

2022


2023

2022

Revenue






Recurring

$        262,390

$        252,507


$        515,138

$        497,173

One-time services and other

8,652

12,420


17,657

24,878

Total revenue

271,042

264,927


532,795

522,051

Cost of revenue






Cost of recurring

113,926

114,487


228,426

226,661

Cost of one-time services and other

7,549

11,120


16,161

22,308

Total cost of revenue

121,475

125,607


244,587

248,969

Gross profit

149,567

139,320


288,208

273,082

Operating expenses






Sales, marketing and customer success

53,191

52,737


107,576

107,953

Research and development

36,146

38,333


76,737

78,285

General and administrative

59,148

47,391


111,986

91,153

Amortization

788

805


1,562

1,616

Total operating expenses

149,273

139,266


297,861

279,007

Income (loss) from operations

294

54


(9,653)

(5,925)

Interest expense

(11,167)

(8,976)


(21,829)

(16,575)

Other income, net

2,778

3,133


4,785

4,254

Loss before benefit for income taxes

(8,095)

(5,789)


(26,697)

(18,246)

Income tax benefit

(10,200)

(2,367)


(14,101)

(4,417)

Net income (loss)

$            2,105

$          (3,422)


$        (12,596)

$        (13,829)

Earnings (loss) per share






Basic

$              0.04

$             (0.07)


$             (0.24)

$             (0.27)

Diluted

$              0.04

$             (0.07)


$             (0.24)

$             (0.27)

Common shares and equivalents outstanding






Basic weighted average shares

52,642,411

51,660,739


52,389,112

51,431,501

Diluted weighted average shares

53,643,124

51,660,739


52,389,112

51,431,501

Other comprehensive income (loss)






Foreign currency translation adjustment

3,055

(10,398)


5,213

(12,530)

Unrealized gain (loss) on derivative instruments, net of tax

5,383

2,558


(5,309)

13,463

Total other comprehensive income (loss)

8,438

(7,840)


(96)

933

Comprehensive income (loss)

$          10,543

$        (11,262)


$        (12,692)

$        (12,896)

 

Blackbaud, Inc.

Consolidated Statements of Cash Flows

(Unaudited)



Six months ended
June 30,

(dollars in thousands)

2023

2022

Cash flows from operating activities



Net loss

$          (12,596)

$          (13,829)

Adjustments to reconcile net loss to net cash provided by operating activities:



Depreciation and amortization

53,622

51,283

Provision for credit losses and sales returns

3,798

3,653

Stock-based compensation expense

63,289

55,714

Deferred taxes

(33,101)

(16,656)

Amortization of deferred financing costs and discount

963

1,254

Other non-cash adjustments

(1,569)

4,225

Changes in operating assets and liabilities, net of acquisition and disposal of businesses:



Accounts receivable

(69,624)

(50,818)

Prepaid expenses and other assets

9,470

3,685

Trade accounts payable

(3,431)

12,769

Accrued expenses and other liabilities

11,948

(8,739)

Deferred revenue

52,233

39,238

Net cash provided by operating activities

75,002

81,779

Cash flows from investing activities



Purchase of property and equipment

(2,779)

(7,518)

Capitalized software and content development costs

(28,756)

(27,183)

Purchase of net assets of acquired companies, net of cash and restricted cash acquired

(19,016)

Net cash used in investing activities

(31,535)

(53,717)

Cash flows from financing activities



Proceeds from issuance of debt

158,000

113,200

Payments on debt

(171,824)

(129,548)

Stock issuance costs

(557)

Employee taxes paid for withheld shares upon equity award settlement

(33,687)

(35,600)

Change in due to customers

61,313

(141,001)

Change in customer funds receivable

(3,359)

(546)

Net cash provided by (used in) financing activities

10,443

(194,052)

Effect of exchange rate on cash, cash equivalents and restricted cash

2,489

(7,252)

Net increase (decrease) in cash, cash equivalents and restricted cash

56,399

(173,242)

Cash, cash equivalents and restricted cash, beginning of period

733,931

651,762

Cash, cash equivalents and restricted cash, end of period

$         790,330

$         478,520

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown above in the consolidated statements of cash flows:

(dollars in thousands)

June 30,
2023

December 31,
2022

Cash and cash equivalents

$           29,041

$           31,691

Restricted cash

761,289

702,240

Total cash, cash equivalents and restricted cash in the statement of cash flows

$         790,330

$         733,931

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)


(dollars in thousands, except per share amounts)

Three months ended
June 30,


Six months ended
June 30,

2023

2022


2023

2022

GAAP Revenue

$     271,042

$     264,927


$     532,795

$     522,051







GAAP gross profit

$     149,567

$     139,320


$     288,208

$     273,082

GAAP gross margin

55.2 %

52.6 %


54.1 %

52.3 %

Non-GAAP adjustments:






Add: Stock-based compensation expense

4,143

3,764


8,097

7,913

Add: Amortization of intangibles from business combinations

13,136

12,404


26,247

24,893

Add: Employee severance

54

381


797

381

Subtotal

17,333

16,549


35,141

33,187

Non-GAAP gross profit

$     166,900

$     155,869


$     323,349

$     306,269

Non-GAAP gross margin

61.6 %

58.8 %


60.7 %

58.7 %







GAAP income (loss) from operations

$            294

$              54


$       (9,653)

$       (5,925)

GAAP operating margin

0.1 %

— %


(1.8) %

(1.1) %

Non-GAAP adjustments:






Add: Stock-based compensation expense

33,364

27,854


63,289

55,714

Add: Amortization of intangibles from business combinations

13,924

13,209


27,809

26,509

Add: Employee severance

632

462


4,954

462

Add: Acquisition and disposition-related costs(1)

(849)

2,292


(230)

3,249

Add: Restructuring and other real estate activities


71

Add: Security Incident-related costs, net of insurance(2)

26,777

8,348


44,560

15,549

Add: Impairment of capitalized software development costs

2,263


2,263

Subtotal

73,848

54,428


140,382

103,817

Non-GAAP income from operations

$       74,142

$       54,482


$     130,729

$       97,892

Non-GAAP operating margin

27.4 %

20.6 %


24.5 %

18.8 %







GAAP loss before benefit for income taxes

$       (8,095)

$       (5,789)


$     (26,697)

$     (18,246)

GAAP net income (loss)

$         2,105

$       (3,422)


$     (12,596)

$     (13,829)







Shares used in computing GAAP diluted earnings (loss) per share

53,643,124

51,660,739


52,389,112

51,431,501

GAAP diluted earnings (loss) per share

$           0.04

$         (0.07)


$         (0.24)

$         (0.27)







Non-GAAP adjustments:






Add: GAAP income tax benefit

(10,200)

(2,367)


(14,101)

(4,417)

Add: Total non-GAAP adjustments affecting income from operations

73,848

54,428


140,382

103,817

Non-GAAP income before provision for income taxes

65,753

48,639


113,685

85,571

Assumed non-GAAP income tax provision(3)

13,151

9,728


22,737

17,114

Non-GAAP net income

$       52,602

$       38,911


$       90,948

$       68,457







Shares used in computing non-GAAP diluted earnings per share

53,643,124

51,985,530


53,168,985

51,954,151

Non-GAAP diluted earnings per share

$           0.98

$           0.75


$           1.71

$           1.32



(1)

Includes a $2.0 million noncash impairment of certain intangible assets held for sale during the three and six months ended June 30, 2022.

(2)

Includes Security Incident-related costs incurred during the three and six months ended June 30, 2023 of $26.8 million and $44.6 million, respectively, which includes approximately $19.8 million and $30.0 million, respectively, in recorded liabilities for loss contingencies, net of insurance recoveries during the same periods of $0.0 million, and during the three and six months ended June 30, 2022 of $8.4 million and $17.4 million, respectively, net of insurance recoveries during the same period that were $0.1 million and $1.9 million, respectively. Recorded expenses consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims and accruals for certain loss contingencies. Not included in this adjustment were costs associated with enhancements to our cybersecurity program. For full year 2023, we currently expect net pre-tax expense of approximately $20 million to $30 million and net cash outlays of approximately $25 million to $35 million for ongoing legal fees related to the Security Incident. Not included in these ranges are our previous settlements or current accruals for loss contingencies related to the matters discussed below. In line with our policy, legal fees, are expensed as incurred. As of June 30, 2023, we have recorded approximately $50.0 million in aggregate liabilities for loss contingencies based primarily on recent negotiations with certain governmental agencies related to the Security Incident that we believe we can reasonably estimate. It is reasonably possible that our estimated or actual losses may change in the near term for those matters and be materially in excess of the amounts accrued, but we are unable at this time to reasonably estimate the possible additional loss. There are other Security Incident-related matters, including customer claims, customer constituent class actions and governmental investigations, for which we have not recorded a liability for a loss contingency as of June 30, 2023 because we are unable at this time to reasonably estimate the possible loss or range of loss. Each of these matters could, separately or in the aggregate, result in an adverse judgment, settlement, fine, penalty or other resolution, the amount, scope and timing of which we are currently unable to predict, but could have a material adverse impact on our results of operations, cash flows or financial condition.

(3)

Blackbaud applies a non-GAAP effective tax rate of 20.0% when calculating non-GAAP net income and non-GAAP diluted earnings per share.

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

(Unaudited)


(dollars in thousands)

Three months ended
June 30,


Six months ended
June 30,

2023

2022


2023

2022

GAAP revenue

$     271,042

$        264,927


$     532,795

$        522,051

GAAP revenue growth

2.3 %



2.1 %


Less: Non-GAAP revenue from divested businesses(1)

(1,304)


(2,613)

Non-GAAP organic revenue(2)

$     271,042

$        263,623


$     532,795

$        519,438

Non-GAAP organic revenue growth

2.8 %



2.6 %








Non-GAAP organic revenue(2)

$     271,042

$        263,623


$     532,795

$        519,438

Foreign currency impact on non-GAAP organic revenue(3)

980


3,657

Non-GAAP organic revenue on constant currency basis(3)

$     272,022

$        263,623


$     536,452

$        519,438

Non-GAAP organic revenue growth on constant currency basis

3.2 %



3.3 %








GAAP recurring revenue

$     262,390

$        252,507


$     515,138

$        497,173

GAAP recurring revenue growth

3.9 %



3.6 %


Less: Non-GAAP recurring revenue from divested businesses(1)

(1,266)


(2,545)

Non-GAAP organic recurring revenue(2)

$     262,390

$        251,241


$     515,138

$        494,628

Non-GAAP organic recurring revenue growth

4.4 %



4.1 %








Non-GAAP organic recurring revenue(2)

$     262,390

$        251,241


$     515,138

$        494,628

Foreign currency impact on non-GAAP organic recurring revenue(3)

916


3,388

Non-GAAP organic recurring revenue on constant currency basis(3)

$     263,306

$        251,241


$     518,526

$        494,628

Non-GAAP organic recurring revenue growth on constant currency basis

4.8 %



4.8 %




(1)

Non-GAAP revenue from divested businesses excludes revenue associated with divested businesses. The exclusion of the prior period revenue is to present the results of the divested business with the results of the combined company for the same period of time in both the prior and current periods.

(2)

Non-GAAP organic revenue and non-GAAP organic recurring revenue for the prior year periods presented herein may not agree to non-GAAP organic revenue and non-GAAP organic recurring revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth are calculated.

(3)

To determine non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and EURO.

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

(Unaudited)


(dollars in thousands)

Three months ended
June 30,


Six months ended
June 30,

2023

2022


2023

2022

GAAP net income (loss)

$         2,105

$          (3,422)


$     (12,596)

$        (13,829)

Non-GAAP adjustments:






Add: Interest, net

8,859

8,862


18,285

16,338

Less: GAAP income tax benefit

(10,200)

(2,367)


(14,101)

(4,417)

Add: Depreciation

3,272

3,585


6,608

7,123

Add: Amortization of intangibles from business combinations

13,924

13,209


27,809

26,509

Add: Amortization of software and content development costs(1)

10,934

9,488


21,540

18,733

Subtotal

26,789

32,777


60,141

64,286

Non-GAAP EBITDA

$       28,894

$          29,355


$       47,545

$          50,457

Non-GAAP EBITDA margin

10.7 %



8.9 %








Non-GAAP adjustments:






Add: Stock-based compensation expense

33,364

27,854


63,289

55,714

Add: Employee severance

632

462


4,954

462

Add: Acquisition and disposition-related costs

(849)

2,292


(230)

3,249

Add: Restructuring and other real estate activities


71

Add: Security Incident-related costs, net of insurance(2)

26,777

8,348


44,560

15,549

Add: Impairment of capitalized software development costs

2,263


2,263

Subtotal

59,924

41,219


112,573

77,308

Non-GAAP adjusted EBITDA

$       88,818

$          70,574


$     160,118

$        127,765

Non-GAAP adjusted EBITDA margin

32.8 %



30.1 %








Rule of 40(3)

35.6 %



32.7 %








Non-GAAP adjusted EBITDA

88,818

70,574


160,118

127,765

Foreign currency impact on Non-GAAP adjusted EBITDA(4)

574

1,651


1,871

2,152

Non-GAAP adjusted EBITDA on constant currency basis(4)

$       89,392

$          72,225


$     161,989

$        129,917

Non-GAAP adjusted EBITDA margin on constant currency basis

32.9 %



30.2 %








Rule of 40 on constant currency basis(5)

36.1 %



33.5 %




(1)

Includes amortization expense related to software and content development costs, and amortization expense from capitalized cloud computing implementation costs.

(2)

See additional details in the reconciliation of GAAP to Non-GAAP operating income above.

(3)

Measured by non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. See Non-GAAP organic revenue growth table above.

(4)

To determine non-GAAP adjusted EBITDA on a constant currency basis, non-GAAP adjusted EBITDA from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and EURO.

(5)

Measured by non-GAAP organic revenue growth on constant currency basis plus non-GAAP adjusted EBITDA margin on constant currency basis.

 

(dollars in thousands)

Six months ended
June 30,

2023

2022

GAAP net cash provided by operating activities

$           75,002

$           81,779

Less: purchase of property and equipment

(2,779)

(7,518)

Less: capitalized software and content development costs

(28,756)

(27,183)

Non-GAAP free cash flow

$           43,467

$           47,078

Add: Security Incident-related cash flows, net of insurance

15,822

5,164

Non-GAAP adjusted free cash flow

$           59,289

$           52,242

 

Power your passion (PRNewsfoto/Blackbaud)

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/blackbaud-announces-2023-second-quarter-results-301890770.html

SOURCE Blackbaud, Inc.

Blackbaud, Inc.

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