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Blackbaud Announces 2024 Third Quarter Results

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Blackbaud (NASDAQ: BLKB) reported its Q3 2024 financial results with total revenue of $286.7 million, up 3.3% year-over-year. The company's recurring revenue reached $280.0 million, representing 98% of total revenue. GAAP net income was $20.5 million with earnings per share of $0.40. The company's Social Sector, representing 89% of total revenue, grew at 6.6%. However, due to EVERFI's underperformance, Blackbaud revised its 2024 guidance to revenue of $1.150-1.160 billion with adjusted EBITDA margin of 33.0-34.0%.

Blackbaud (NASDAQ: BLKB) ha riportato i risultati finanziari per il terzo trimestre del 2024 con un fatturato totale di $286,7 milioni, in aumento del 3,3% rispetto all’anno precedente. I ricavi ricorrenti dell'azienda hanno raggiunto i $280,0 milioni, rappresentando il 98% del fatturato totale. Il reddito netto GAAP è stato di $20,5 milioni con un utile per azione di $0,40. Il settore Sociale dell'azienda, che rappresenta l'89% del fatturato totale, è cresciuto del 6,6%. Tuttavia, a causa della scarsa performance di EVERFI, Blackbaud ha rivisto la sua guida per il 2024, prevedendo un fatturato di $1,150-1,160 miliardi con un margine EBITDA rettificato del 33,0-34,0%.

Blackbaud (NASDAQ: BLKB) reportó sus resultados financieros del tercer trimestre de 2024 con ingresos totales de $286,7 millones, un aumento del 3,3% en comparación con el año anterior. Los ingresos recurrentes de la compañía alcanzaron los $280,0 millones, representando el 98% de los ingresos totales. El ingreso neto GAAP fue de $20,5 millones con ganancias por acción de $0,40. El sector Social de la compañía, que representa el 89% de los ingresos totales, creció un 6,6%. Sin embargo, debido al bajo rendimiento de EVERFI, Blackbaud revisó su guía para 2024 a ingresos de $1,150-1,160 mil millones con un margen EBITDA ajustado del 33,0-34,0%.

Blackbaud (NASDAQ: BLKB)는 2024년 3분기 재무 결과를 보고하며 총 수익이 2억 8천 6백 70만 달러로 전년 대비 3.3% 증가했다고 발표했습니다. 회사의 반복 수익은 2억 8천만 달러에 도달하여 총 수익의 98%를 차지했습니다. GAAP 순이익은 2천 5백만 달러였으며 주당 순이익은 0.40달러였습니다. 회사의 사회 부문은 총 수익의 89%를 차지하며 6.6% 성장했습니다. 그러나 EVERFI의 저조한 실적 때문에 Blackbaud는 2024년 매출 전망을 11억 5천만에서 11억 6천만 달러로 수정하였고, 조정된 EBITDA 마진은 33.0-34.0%로 조정했습니다.

Blackbaud (NASDAQ: BLKB) a annoncé ses résultats financiers pour le troisième trimestre de 2024, avec un chiffre d'affaires total de 286,7 millions de dollars, en hausse de 3,3 % par rapport à l'année précédente. Les revenus récurrents de l'entreprise ont atteint 280,0 millions de dollars, représentant 98 % du chiffre d'affaires total. Le résultat net GAAP était de 20,5 millions de dollars avec un bénéfice par action de 0,40 dollar. Le secteur social de l'entreprise, représentant 89 % des revenus totaux, a connu une croissance de 6,6 %. Cependant, en raison de la sous-performance d'EVERFI, Blackbaud a révisé ses prévisions pour 2024, prévoyant des revenus de 1,150 à 1,160 milliard de dollars avec une marge EBITDA ajustée de 33,0 à 34,0 %.

Blackbaud (NASDAQ: BLKB) gab die finanziellen Ergebnisse für das 3. Quartal 2024 bekannt, mit einem Gesamtumsatz von 286,7 Millionen Dollar, was einem Anstieg von 3,3 % im Vergleich zum Vorjahr entspricht. Der wiederkehrende Umsatz des Unternehmens erreichte 280,0 Millionen Dollar, was 98 % des Gesamtumsatzes entspricht. Der GAAP-Nettoeinkommen betrug 20,5 Millionen Dollar mit einem Gewinn pro Aktie von 0,40 Dollar. Der soziale Sektor des Unternehmens, der 89 % des Gesamtumsatzes ausmacht, wuchs um 6,6 %. Aufgrund der schlechten Leistung von EVERFI hat Blackbaud jedoch seine Prognose für 2024 auf einen Umsatz von 1,150-1,160 Milliarden Dollar mit einer bereinigten EBITDA-Marge von 33,0-34,0 % angepasst.

Positive
  • Total revenue increased 3.3% YoY to $286.7 million
  • Recurring revenue grew 4.1% to $280.0 million (98% of total revenue)
  • Social Sector segment (89% of revenue) grew 6.6%
  • GAAP operating margin improved by 740 basis points to 15.3%
  • Strong cash flow with $97.6 million in adjusted free cash flow
Negative
  • Non-GAAP operating margin decreased 120 basis points to 27.5%
  • Adjusted EBITDA declined by $1.9 million
  • Free cash flow decreased by $22.3 million
  • EVERFI's continued underperformance led to downward revision of FY24 guidance
  • Operating cash flow margin decreased 980 basis points to 36.3%

Insights

The Q3 results reveal mixed performance with concerning trends. While $286.7M revenue showed 3.3% YoY growth, key profitability metrics declined. The 180 basis point drop in adjusted EBITDA margin to 33.2% and 900 basis point decrease in free cash flow margin signal operational challenges. The EVERFI segment's underperformance led to FY24 guidance revision, prompting strategic evaluation and rightsizing.

The core Social Sector business, comprising 89% of revenue, maintains healthy 6.6% growth. Strong recurring revenue at 98% of total revenue provides stability. The aggressive share buyback program, having repurchased 8% of outstanding shares, demonstrates confidence in long-term value despite near-term headwinds.

The company's strategic pivot toward AI integration and Microsoft partnership marks a significant technological transformation. The six waves of innovation announced at bbcon 2024, focusing on AI-powered fundraising and financial management, position Blackbaud to enhance its competitive moat in the social impact software sector.

The expansion of product offerings like Blackbaud Donation Forms to CRM and Altru customers shows commitment to platform development. The G2 recognition across multiple categories validates product strength. However, the success of these innovations will depend on execution and market adoption, particularly given the current operational challenges with EVERFI integration.

At bbcon® 2024, Blackbaud Launched Its Most Aggressive Innovation Plans Yet

CHARLESTON, S.C., Oct. 30, 2024 /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the leading provider of software for powering social impact, today announced financial results for its third quarter ended September 30, 2024.

"Blackbaud is a clear market leader with a path to penetrate even further into a rich market opportunity while empowering our existing customers through continued innovation. In September at our annual tech conference, bbcon, we introduced six waves of innovation that were met with overwhelming enthusiasm from our customers," said Mike Gianoni, president, CEO and vice chairman of the board of directors, Blackbaud. "Blackbaud remains focused on our operating plan and delivering an attractive multi-year financial profile of balanced mid single-digit plus organic revenue growth and improving profitability and cash flows. We plan to put our strong cash flow to work in a purposeful capital allocation strategy that benefits our stockholders. I continue to be excited about the company's mid- and long-term future."

Third Quarter 2024 Results Compared to Third Quarter 2023 Results:

  • GAAP total revenue was $286.7 million, up 3.3% and non-GAAP organic revenue increased 4.3%.
  • GAAP recurring revenue was $280.0 million, up 4.1% and represented 98% of total revenue. Non-GAAP organic recurring revenue increased 4.1%.
  • GAAP income from operations was $43.8 million, with GAAP operating margin of 15.3%, an increase of 740 basis points.
  • Non-GAAP income from operations was $78.9 million, with non-GAAP operating margin of 27.5%, a decrease of 120 basis points.
  • GAAP net income was $20.5 million, with GAAP diluted earnings per share of $0.40, up $0.23 per share.
  • Non-GAAP net income was $51.1 million, with non-GAAP diluted earnings per share of $0.99, down $0.13 per share.
  • Non-GAAP adjusted EBITDA was $95.2 million, down $1.9 million, with non-GAAP adjusted EBITDA margin of 33.2%, a decrease of 180 basis points.
  • GAAP net cash provided by operating activities was $104.0 million, a decrease of $24.0 million, with GAAP operating cash flow margin of 36.3%, a decrease of 980 basis points.
  • Non-GAAP free cash flow was $88.3 million, a decrease of $22.3 million, with non-GAAP free cash flow margin of 30.8%, a decrease of 900 basis points.
  • Non-GAAP adjusted free cash flow was $97.6 million, a decrease of $20.3 million, with non-GAAP adjusted free cash flow margin of 34.0%, a decrease of 850 basis points.

"The revision of our FY24 guide is a direct result of continued underperformance of EVERFI," said Tony Boor, executive vice president and CFO, Blackbaud. "We've spoken in the past about improving EVERFI's performance and evaluating strategic options. We've hired a strategic advisor to assist us in evaluating options and have recently rightsized the business to better align costs to revenues. We plan to continue to update you as appropriate in this area."

"However, we remain confident that our underlying business and our future opportunities remain strong. In the third quarter, our Social Sector, representing 89% of total revenue, grew at 6.6%. Non-GAAP adjusted EBITDA margin was 33.2% and the business generated $97.6 million in adjusted free cash flow for the quarter. We remain committed to our stock repurchase program and as of today have repurchased approximately 8% of the common stock outstanding as of year-end 2023. We plan to continue to be purposeful about buying back our stock as well as investing in product innovation to deliver a compelling investment thesis to new and existing shareholders. We remain committed to delivering an attractive financial investment balanced between top-line growth, profitability and cash flow, all of which are supported by our proven operating plan."

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

  • At bbcon 2024, Blackbaud showcased the future of AI-powered fundraising and financial management for social impact organizations, rolling out six waves of innovation to build connection between solutions and teams while delivering contextual intelligence.
  • Blackbaud and Microsoft announced upcoming product innovations that will enable Blackbaud customers to soon benefit from deeper integration of Microsoft AI and analytics into Blackbaud software, enabling them to achieve greater impact, gain in-depth insights and increase efficiency.
  • The company released Blackbaud Donation Forms to U.S. Blackbaud CRM™ and Blackbaud Altru® customers to help social impact organizations raise more, streamline the donor experience, simplify administrative tasks, and reduce processing costs, enabling them to sustain and grow their missions.
  • G2 recognized Blackbaud Raiser's Edge NXT® in its Summer 2024 Reports across 11 different categories and as an overall leader in the Donor Management, Nonprofit CRM, and Donor Prospect Research categories, based on user ratings.
  • Blackbaud also celebrated the achievements of its community during the quarter, recognizing Blackbaud Partner Network Awards winners helping bring more flexibility and value to customers, celebrating customers achieving the most with their technology through the Blackbaud Impact Awards, and honoring standout fundraisers in the JustGiving Awards.

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

Financial Outlook
Blackbaud today revised its 2024 full year financial guidance:

  • GAAP revenue of $1.150 billion to $1.160 billion
  • Non-GAAP adjusted EBITDA margin of 33.0% to 34.0%
  • Non-GAAP earnings per share of $3.98 to $4.16
  • Non-GAAP adjusted free cash flow of $235 million to $245 million

Included in its 2024 full year financial guidance are the following updated assumptions:

  • Non-GAAP annualized effective tax rate is expected to be approximately 24.5%
  • Interest expense for the year is expected to be approximately $53 million to $57 million
  • Fully diluted shares for the year are expected to be approximately 51.0 million to 52.0 million
  • Capital expenditures for the year are expected to be approximately $65 million to $75 million, including approximately $60 million to $70 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 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 2024, Blackbaud currently expects net cash outlays of $8 million to $13 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.

Stock Repurchase Program
As of September 30, 2024, Blackbaud had approximately $737 million remaining under its common stock repurchase program that was expanded, replenished and reauthorized in July 2024.

Conference Call Details
What:       Blackbaud's 2024 Third Quarter Conference Call
When:      October 30, 2024
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, India and the United Kingdom, supporting users in 100+ countries. Learn more at www.blackbaud.com, or follow us on X/Twitter, LinkedIn, Instagram, and Facebook.

Investor Contact
IR@blackbaud.com

Media Contact
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.

As previously disclosed, beginning in 2024, we apply a non-GAAP effective tax rate of 24.5% when calculating non-GAAP net income and non-GAAP diluted earnings per share. The non-GAAP tax rate utilized in future periods will be reviewed annually to determine whether it remains appropriate in consideration of our financial results including our periodic effective tax rate calculated in accordance with GAAP, our operating environment and related tax legislation in effect and other factors deemed necessary. All 2023 measures of non-GAAP net income and non-GAAP diluted earnings per share included in this news release are calculated under Blackbaud's historical non-GAAP effective tax rate of 20.0%.

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 also 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 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 free cash flow and Non-GAAP adjusted free cash flow are 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, if any, 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; Security Incident-related costs; and impairment of capitalized software development costs.

Blackbaud, Inc.

Consolidated Balance Sheets

(Unaudited)


(dollars in thousands, except per share amounts)

September 30,
2024

December 31,
2023

Assets



Current assets:



Cash and cash equivalents

$           34,633

$           31,251

Restricted cash

428,095

697,006

Accounts receivable, net of allowance of $6,307 and $6,907 at September 30, 2024 and
December 31, 2023, respectively

97,988

101,862

Customer funds receivable

7,343

353

Prepaid expenses and other current assets

87,499

99,285

Total current assets

655,558

929,757

Property and equipment, net

95,053

98,689

Operating lease right-of-use assets

27,522

36,927

Software and content development costs, net

169,507

160,194

Goodwill

1,056,882

1,053,738

Intangible assets, net

536,008

581,937

Other assets

60,444

51,037

Total assets

$      2,600,974

$      2,912,279

Liabilities and stockholders' equity



Current liabilities:



Trade accounts payable

$           43,983

$           25,184

Accrued expenses and other current liabilities

48,745

64,322

Due to customers

434,093

695,842

Debt, current portion

23,830

19,259

Deferred revenue, current portion

411,554

392,530

Total current liabilities

962,205

1,197,137

Debt, net of current portion

977,019

760,405

Deferred tax liability

68,196

93,292

Deferred revenue, net of current portion

1,705

2,397

Operating lease liabilities, net of current portion

35,218

40,085

Other liabilities

12,304

10,258

Total liabilities

2,056,647

2,103,574

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, 70,955,940 and
69,188,304 shares issued at September 30, 2024 and December 31, 2023, respectively;
50,869,218 and 53,625,440 shares outstanding at September 30, 2024 and December 31,
2023, respectively

71

69

Additional paid-in capital

1,227,198

1,203,012

Treasury stock, at cost; 20,086,722 and 15,562,864 shares at September 30, 2024 and
December 31, 2023, respectively

(922,516)

(591,557)

Accumulated other comprehensive loss

(6,887)

(1,688)

Retained earnings

246,461

198,869

Total stockholders' equity

544,327

808,705

Total liabilities and stockholders' equity

$      2,600,974

$      2,912,279

 

Blackbaud, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)


(dollars in thousands, except per share amounts)

Three months ended
September 30,


Nine months ended
September 30,

2024

2023


2024

2023

Revenue






Recurring

$        280,018

$        269,001


$        832,912

$        784,139

One-time services and other

6,709

8,625


20,351

26,282

Total revenue

286,727

277,626


853,263

810,421

Cost of revenue






Cost of recurring

122,646

114,132


361,644

342,558

Cost of one-time services and other

4,871

7,634


16,779

23,795

Total cost of revenue

127,517

121,766


378,423

366,353

Gross profit

159,210

155,860


474,840

444,068

Operating expenses






Sales, marketing and customer success

49,454

52,462


147,400

160,038

Research and development

39,368

37,965


121,238

114,702

General and administrative

25,645

42,596


106,842

154,582

Amortization

918

793


2,724

2,355

Total operating expenses

115,385

133,816


378,204

431,677

Income from operations

43,825

22,044


96,636

12,391

Interest expense

(14,140)

(9,620)


(40,131)

(31,449)

Other income, net

2,997

5,662


9,654

10,447

Income (loss) before provision (benefit) for income taxes

32,682

18,086


66,159

(8,611)

Income tax provision (benefit)

12,140

9,069


18,567

(5,032)

Net income (loss)

$          20,542

$            9,017


$          47,592

$          (3,579)

Earnings (loss) per share






Basic

$              0.41

$              0.17


$              0.93

$             (0.07)

Diluted

$              0.40

$              0.17


$              0.91

$             (0.07)

Common shares and equivalents outstanding






Basic weighted average shares

50,409,292

52,704,974


51,067,255

52,495,556

Diluted weighted average shares

51,632,569

54,089,897


52,107,147

52,495,556

Other comprehensive loss






Foreign currency translation adjustment

$            6,463

$          (4,794)


$            5,617

$               419

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

(13,525)

4,093


(10,816)

(1,216)

Total other comprehensive loss

(7,062)

(701)


(5,199)

(797)

Comprehensive income (loss)

$          13,480

$            8,316


$          42,393

$          (4,376)

 

Blackbaud, Inc.

Consolidated Statements of Cash Flows

(Unaudited)



Nine months ended
September 30,

(dollars in thousands)

2024

2023

Cash flows from operating activities



Net income (loss)

$           47,592

$            (3,579)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:



Depreciation and amortization

91,618

81,627

Provision for credit losses and sales returns

1,721

4,815

Stock-based compensation expense

76,430

95,668

Deferred taxes

(21,776)

(31,163)

Amortization of deferred financing costs and discount

1,786

1,388

Loss on disposition of business

1,561

Other non-cash adjustments

2,462

5,106

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



Accounts receivable

918

(4,757)

Prepaid expenses and other assets

(873)

14,488

Trade accounts payable

18,322

(3,362)

Accrued expenses and other liabilities

(16,373)

9,073

Deferred revenue

18,998

33,679

Net cash provided by operating activities

222,386

202,983

Cash flows from investing activities



Purchase of property and equipment

(7,235)

(4,243)

Capitalized software and content development costs

(42,882)

(44,664)

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

(13)

Net cash used in disposition of business

(1,179)

Other investing activities

(5,029)

(250)

Net cash used in investing activities

(56,325)

(49,170)

Cash flows from financing activities



Proceeds from issuance of debt

1,303,400

175,800

Payments on debt

(1,080,192)

(293,957)

Debt issuance costs

(6,458)

Employee taxes paid for withheld shares upon equity award settlement

(55,950)

(35,568)

Change in due to customers

(263,732)

(339,735)

Change in customer funds receivable

(6,777)

(3,286)

Purchase of treasury stock

(325,408)

Net cash used in financing activities

(435,117)

(496,746)

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

3,527

(311)

Net decrease in cash, cash equivalents and restricted cash

(265,529)

(343,244)

Cash, cash equivalents and restricted cash, beginning of period

728,257

733,931

Cash, cash equivalents and restricted cash, end of period

$         462,728

$         390,687

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)

September 30,
2024

December 31,
2023

Cash and cash equivalents

$           34,633

$           31,251

Restricted cash

428,095

697,006

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

$         462,728

$         728,257

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)


(dollars in thousands, except per share amounts)

Three months ended
September 30,


Nine months ended
September 30,

2024

2023


2024

2023

GAAP Revenue

$      286,727

$      277,626


$      853,263

$      810,421







GAAP gross profit

$      159,210

$      155,860


$      474,840

$      444,068

GAAP gross margin

55.5 %

56.1 %


55.6 %

54.8 %

Non-GAAP adjustments:






Add: Stock-based compensation expense

2,915

4,145


10,066

12,242

Add: Amortization of intangibles from business combinations

14,667

13,117


43,969

39,364

Add: Employee severance


797

Subtotal

17,582

17,262


54,035

52,403

Non-GAAP gross profit

$      176,792

$      173,122


$      528,875

$      496,471

Non-GAAP gross margin

61.7 %

62.4 %


62.0 %

61.3 %







GAAP income from operations

$        43,825

$        22,044


$        96,636

$        12,391

GAAP operating margin

15.3 %

7.9 %


11.3 %

1.5 %

Non-GAAP adjustments:






Add: Stock-based compensation expense

18,574

32,379


76,430

95,668

Add: Amortization of intangibles from business combinations

15,585

13,910


46,693

41,719

Add: Employee severance

140


5,094

Add: Acquisition and disposition-related costs

246

7,029


4,899

6,799

Add: Security Incident-related costs(1)

637

4,086


12,782

48,646

Subtotal

35,042

57,544


140,804

197,926

Non-GAAP income from operations

$        78,867

$        79,588


$      237,440

$      210,317

Non-GAAP operating margin

27.5 %

28.7 %


27.8 %

26.0 %







GAAP income (loss) before provision (benefit) for income taxes

$        32,682

$        18,086


$        66,159

$        (8,611)

GAAP net income (loss)

$        20,542

$          9,017


$        47,592

$        (3,579)







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

51,632,569

54,089,897


52,107,147

52,495,556

GAAP diluted earnings (loss) per share

$            0.40

$            0.17


$            0.91

$          (0.07)







Non-GAAP adjustments:






Add: GAAP income tax provision (benefit)

12,140

9,069


18,567

(5,032)

Add: Total non-GAAP adjustments affecting income from operations

35,042

57,544


140,804

197,926

Non-GAAP income before provision for income taxes

67,724

75,630


206,963

189,315

Assumed non-GAAP income tax provision(2)

16,592

15,126


50,706

37,863

Non-GAAP net income

$        51,132

$        60,504


$      156,257

$      151,452







Shares used in computing non-GAAP diluted earnings per share

51,632,569

54,089,897


52,107,147

53,469,768

Non-GAAP diluted earnings per share

$            0.99

$            1.12


$            3.00

$            2.83



(1)

Includes Security Incident-related costs incurred during the three months ended September 30, 2024 which were insignificant, during the nine months ended September 30, 2024 of $12.8 million, which included approximately $6.8 million in recorded liabilities for loss contingencies, and during the three and nine months ended September 30, 2023 of $4.1 million and $48.6 million, respectively, which included approximately $0.0 million and $30.0 million, respectively, in recorded aggregate liabilities for loss contingencies. Recorded expenses consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims, negotiated settlements and accruals for certain loss contingencies. Not included in this adjustment were costs associated with enhancements to our cybersecurity program. For full year 2024, we currently expect pre-tax expenses of approximately $5 million to $10 million and cash outlays of approximately $8 million to $13 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 September 30, 2024, we have recorded approximately $0.7 million in aggregate liabilities for loss contingencies based primarily on recent negotiations with certain customers  related to the Security Incident that we believe we can reasonably estimate. During the third quarter of 2024, we paid $6.8 million in connection with our settlement with the Attorney General of the State of California (as previously disclosed on June 14, 2024). 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 September 30, 2024 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.

(2)

Beginning in 2024, we now apply a non-GAAP effective tax rate of 24.5% when calculating non-GAAP net income and non-GAAP diluted earnings per share. For the three and nine months ended September 30, 2023, the tax impact related to non-GAAP adjustments is calculated under our historical non-GAAP effective tax rate of 20.0%.

 

Blackbaud, Inc.

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

(Unaudited)


(dollars in thousands)

Three months ended
September 30,


Nine months ended
September 30,

2024

2023


2024

2023

GAAP revenue(1)

$     286,727

$        277,626


$     853,263

$        810,421

GAAP revenue growth

3.3 %



5.3 %


Less: Non-GAAP revenue from divested businesses(2)

(2,692)


(5,189)

Non-GAAP organic revenue(2)

$     286,727

$        274,934


$     853,263

$        805,232

Non-GAAP organic revenue growth

4.3 %



6.0 %








Non-GAAP organic revenue(3)

$     286,727

$        274,934


$     853,263

$        805,232

Foreign currency impact on non-GAAP organic revenue(4)

(1,024)


(2,130)

Non-GAAP organic revenue on constant currency basis(4)

$     285,703

$        274,934


$     851,133

$        805,232

Non-GAAP organic revenue growth on constant currency basis

3.9 %



5.7 %








GAAP recurring revenue

$     280,018

$        269,001


$     832,912

$        784,139

GAAP recurring revenue growth

4.1 %



6.2 %


Less: Non-GAAP recurring revenue from divested businesses(2)


Non-GAAP organic recurring revenue(3)

$     280,018

$        269,001


$     832,912

$        784,139

Non-GAAP organic recurring revenue growth

4.1 %



6.2 %








Non-GAAP organic recurring revenue(2)

$     280,018

$        269,001


$     832,912

$        784,139

Foreign currency impact on non-GAAP organic recurring revenue(4)

(1,005)


(2,070)

Non-GAAP organic recurring revenue on constant currency basis(4)

$     279,013

$        269,001


$     830,842

$        784,139

Non-GAAP organic recurring revenue growth on constant
currency basis

3.7 %



6.0 %




(1)

Includes EVERFI revenue of $19.4 million and $26.2 million for the three months ended September 30, 2024 and 2023, respectively, and $66.8 million and $80.4 million for the nine months ended September 30, 2024 and 2023, respectively.

(2)

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.

(3)

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.

(4)

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
September 30,


Nine months ended
September 30,

2024

2023


2024

2023

GAAP net income (loss)

$       20,542

$            9,017


$       47,592

$          (3,579)

Non-GAAP adjustments:






Add: Interest, net

11,022

6,608


32,150

24,893

Add: GAAP income tax provision (benefit)

12,140

9,069


18,567

(5,032)

Add: Depreciation

3,293

3,293


9,621

9,901

Add: Amortization of intangibles from business combinations

15,585

13,910


46,693

41,719

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

13,186

11,573


37,915

33,113

Subtotal

55,226

44,453


144,946

104,594

Non-GAAP EBITDA

$       75,768

$          53,470


$     192,538

$        101,015

Non-GAAP EBITDA margin(2)

26.4 %



22.6 %








Non-GAAP adjustments:






Add: Stock-based compensation expense

$       18,574

$          32,379


$       76,430

$          95,668

Add: Employee severance

140


5,094

Add: Acquisition and disposition-related costs(3)

246

7,029


4,899

6,799

Add: Security Incident-related costs(3)

637

4,086


12,782

48,646

Subtotal

19,457

43,634


94,111

156,207

Non-GAAP adjusted EBITDA

$       95,225

$          97,104


$     286,649

$        257,222

Non-GAAP adjusted EBITDA margin(4)

33.2 %



33.6 %








Rule of 40(5)

37.5 %



39.6 %








Non-GAAP adjusted EBITDA

$       95,225

$          97,104


$     286,649

$        257,222

Foreign currency impact on Non-GAAP adjusted EBITDA(6)

(556)

(1,162)


(1,059)

709

Non-GAAP adjusted EBITDA on constant currency basis(6)

$       94,669

$          95,942


$     285,590

$        257,931

Non-GAAP adjusted EBITDA margin on constant currency basis

33.1 %



33.6 %








Rule of 40 on constant currency basis(7)

37.0 %



39.3 %




(1)

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

(2)

Measured by GAAP revenue divided by non-GAAP EBITDA.

(3)

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

(4)

Measured by non-GAAP organic revenue divided by non-GAAP adjusted EBITDA.

(5)

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

(6)

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.

(7)

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

 

(dollars in thousands)

Nine months ended
September 30,

2024

2023

GAAP net cash provided by operating activities

$      222,386

$      202,983

GAAP operating cash flow margin

26.1 %

25.0 %

Non-GAAP adjustments:



Less: purchase of property and equipment

(7,235)

(4,243)

Less: capitalized software and content development costs

(42,882)

(44,664)

Non-GAAP free cash flow

$      172,269

$      154,076

Non-GAAP free cash flow margin

20.2 %

19.0 %

Non-GAAP adjustments:



Add: Security Incident-related cash flows

15,081

23,100

Non-GAAP adjusted free cash flow

$      187,350

$      177,176

Non-GAAP adjusted free cash flow margin

22.0 %

21.9 %

 

Power your passion (PRNewsfoto/Blackbaud)

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/blackbaud-announces-2024-third-quarter-results-302290919.html

SOURCE Blackbaud

FAQ

What was Blackbaud's (BLKB) revenue growth in Q3 2024?

Blackbaud's total revenue grew 3.3% to $286.7 million in Q3 2024, with organic revenue increasing 4.3%.

Why did Blackbaud (BLKB) revise its 2024 guidance?

Blackbaud revised its 2024 guidance due to continued underperformance of its EVERFI business segment.

What was Blackbaud's (BLKB) earnings per share in Q3 2024?

Blackbaud reported GAAP diluted earnings per share of $0.40, an increase of $0.23 per share compared to Q3 2023.

What percentage of Blackbaud's (BLKB) Q3 2024 revenue was recurring?

Recurring revenue represented 98% of total revenue, reaching $280.0 million in Q3 2024.

Blackbaud, Inc.

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