Core Insights - Blackbaud has been recognized as one of the World's Greenest Companies 2025 by Newsweek and Plant-A Insights Group, highlighting its commitment to sustainability and social impact [1][2] - The recognition is based on a comprehensive analysis of sustainability data from over 8,000 companies, with only 750 making the final list, emphasizing Blackbaud's strong environmental performance [2][3] Company Commitment to Sustainability - Blackbaud has a long-standing commitment to sustainability, focusing on reducing greenhouse gas emissions and supporting customers in their sustainability efforts [2][3] - The company has achieved a 90% reduction in global greenhouse gas emissions since 2019, showcasing its dedication to decarbonization [6] Recognition and Awards - In addition to being named one of the World's Greenest Companies, Blackbaud has also been included in Newsweek's America's Most Responsible Companies 2025 and USA Today's America's Climate Leaders 2024 lists [3] - The company's software solutions have facilitated over $100 billion raised, granted, or managed annually, demonstrating its significant impact in the nonprofit and education sectors [4] Operational Scope - Blackbaud operates as a remote-first company with a presence in the United States, Australia, Canada, Costa Rica, India, and the United Kingdom, supporting users in over 100 countries [4]

Company Overview - Blackbaud Inc. is a leading cloud software company focused on social causes, providing a range of cloud-based and on-premise software solutions for organizations of all sizes, including fundraising, marketing, and financial management [11] - The company’s SKY platform powers innovation and offers tools for clients and partners to extend the Blackbaud ecosystem [11] Investment Highlights - Blackbaud has a Zacks Rank of 1 (Strong Buy) and a VGM Score of B, indicating strong potential for investment [12] - The stock has a Momentum Style Score of B, with shares increasing by 3.7% over the past four weeks [12] - Earnings estimates for fiscal 2025 have been revised higher by two analysts in the last 60 days, with the Zacks Consensus Estimate increasing by $0.03 to $4.23 per share [12] - The company has an average earnings surprise of 1.2%, suggesting a positive outlook [12] Conclusion - With a solid Zacks Rank and strong Momentum and VGM Style Scores, Blackbaud is positioned as a favorable investment opportunity [13]

Core Insights - Blackbaud is hosting its K-12 user conference in July 2026 in Boston, aimed at K-12 independent school leaders and staff, providing networking and learning opportunities [1][2] - The conference will feature keynote speakers, product sessions, and an innovative Unconference experience, allowing attendees to shape discussions on relevant topics [2][3] - Blackbaud's recent participation in the ATLIS annual conference highlighted its commitment to the K-12 sector, showcasing expertise in areas like artificial intelligence and cybersecurity [3][4] Company Overview - Blackbaud is a leading software provider focused on social impact, serving nonprofit and education sectors, with over $100 billion raised or managed annually through its platforms [5] - The company operates in multiple countries, including the United States, Australia, Canada, and the United Kingdom, supporting users in over 100 countries [5] - Blackbaud has received recognition from various organizations, including Newsweek and Forbes, for its commitment to social responsibility and employee satisfaction [5]

Core Insights - Blackbaud is showcasing its AI strategy and product enhancements during its semi-annual Product Update Briefings, emphasizing the commitment to accelerate innovation for social impact organizations [1][2] Product Innovations - The introduction of Blackbaud Copilot, an AI-powered assistant, aims to enhance fundraising success by automating routine tasks and providing data-driven insights [6] - Upcoming integration with Constant Contact in mid-2025 will enhance digital marketing capabilities within Raiser's Edge NXT, streamlining marketing efforts for customers [6] - Enhanced identity resolution in predictive modeling with LiveRamp is expected to improve match rates for wealth and charitable giving records, with a full rollout anticipated by the end of Q2 [6] - New features in Blackbaud Grantmaking will streamline the grant application process and integrate with Financial Edge NXT for better financial data connectivity [11] Corporate Social Responsibility - The Expedited Giving functionality from YourCause will deliver donations made through corporate employee giving programs to nonprofits 95% faster than existing options [9] - Blackbaud Impact Edge™ is now available, incorporating the Blackbaud Copilot AI assistant to help corporate social responsibility departments track and share their impact [9] Education Solutions - The Common Records Engine in Blackbaud Education Management minimizes duplicate data entry, providing a single source of truth for student information [12] - The Award Cycle Manager Dashboard in Blackbaud Award Management improves visibility into award performance and fund utilization [12] Online Giving and Payments - New tools like Donor Cover and Complete Cover allow donors to cover transaction costs, helping organizations retain up to 100% of donations [11] - Expanded payment processing solutions enable a cohesive "Payments-as-a-Service" experience, including Tap-to-Pay on iPhone for contactless payments [11]

Group 1 - The Q1 earnings season is taking place amidst a challenging macroeconomic environment, necessitating disciplined single-stock selection by investors [1] - Struggling companies are expected to face increased difficulties in navigating the current economic landscape [1] - Gary Alexander has extensive experience in technology sectors, both on Wall Street and in Silicon Valley, influencing his insights into industry trends [1] Group 2 - The article emphasizes the importance of careful stock selection during the earnings season due to the tough economic backdrop [1]

Core Viewpoint - Blackbaud, Inc. reported strong first-quarter 2025 results with non-GAAP EPS of 96 cents, exceeding estimates and showing a year-over-year increase, despite a decline in total revenues due to the divestiture of EVERFI [1][2]. Financial Performance - Non-GAAP EPS for Q1 2025 was 96 cents, surpassing the Zacks Consensus Estimate by 6.7% and increasing 3.2% year over year [1]. - Total revenues decreased 3.1% year over year to $270.7 million, primarily due to the divestiture of EVERFI, but still exceeded the Zacks Consensus Estimate by 0.9% [1][2]. - GAAP recurring revenue declined 2.8% to $264.1 million, accounting for 97.6% of total revenue [2]. - Non-GAAP organic revenues increased by 5.8% on a reported basis and 5.9% on a constant-currency basis year over year [4]. - Non-GAAP gross margin was 61.2%, slightly down from 61.4% a year ago, while total operating expenses fell 4.9% to $135.4 million [4]. Profitability Metrics - GAAP operating margin increased by 370 basis points to 7.5%, and non-GAAP operating margin rose by 270 basis points to 28.6% [5]. - Non-GAAP adjusted EBITDA margin was reported at 34.3% [5]. Balance Sheet and Cash Flow - As of March 31, 2025, total cash and equivalents were $456.6 million, down from $809.5 million at the end of 2024, while total debt increased to $1.2 billion from $1.1 billion [6]. - Cash provided by operating activities was $1.4 million, a significant decrease from $64.6 million in the prior-year quarter, with non-GAAP adjusted free cash outflow of $12.3 million compared to a free cash flow of $51.3 million in the previous year [7]. Share Buyback and Future Outlook - Blackbaud repurchased around 4% of its outstanding shares in Q1 2025, aligning with its plan to buy back 3% to 5% of shares [9]. - The company reaffirmed its 2025 guidance, projecting GAAP revenues between $1.115 billion and $1.125 billion, with non-GAAP adjusted EBITDA margin expected in the range of 34.9-35.9% [10][11]. Recent Developments - Blackbaud has been actively supporting disaster relief efforts and showcased innovations in corporate giving at the YourCause Corporate Social Impact Summit [12]. - The company introduced Blackbaud Integrated Payments, enhancing its payment processing capabilities [13]. - Blackbaud also launched Optimized Donation Forms for users in Canada and published its 2024 Trends in Giving report [14].

Revenue Performance - Total revenue decreased by $8.6 million, or 3.1%, during the three months ended March 31, 2025, compared to the same period in 2024[141]. - GAAP revenue for the three months ended March 31, 2025, was $270.7 million, a decrease from $279.3 million in the same period in 2024[175]. - Non-GAAP organic revenue for Q1 2025 was $270.7 million, reflecting a growth of 5.8% from $255.8 million in Q1 2024[181]. - Non-GAAP organic recurring revenue grew by 5.8% from $249.5 million in Q1 2024 to $264.1 million in Q1 2025[181]. - Approximately 15% of total revenue for the three months ended March 31, 2025, was generated from operations outside the U.S.[231]. Operational Performance - Income from operations increased by $9.7 million during the same period, driven by critical investments in innovation and cybersecurity[120]. - Gross dollar retention for the twelve months ended March 31, 2025, was approximately 92%, an increase from the previous year, attributed to the sale of EVERFI[126]. - Cost of revenue decreased by $11.4 million, or 9.0%, during the same period, leading to a gross margin increase of 280 basis points[142]. - GAAP gross profit increased to $155.8 million for the three months ended March 31, 2025, compared to $153.0 million in the same period in 2024, resulting in a gross margin of 57.6%[175]. Cash Flow and Liquidity - Cash and cash equivalents were $37.2 million as of March 31, 2025, with total debt at $1.1 billion and a net leverage ratio of 2.91 to 1.00[127]. - During the three months ended March 31, 2025, the company generated $1.4 million in cash from operations and returned $100.0 million to stockholders through share repurchases[128]. - Cash flow from operations decreased due to working capital changes, with a notable impact from a security incident[207]. - Net cash provided by operating activities fell by 97.9% to $1.4 million in Q1 2025, down from $64.6 million in Q1 2024[200]. - Non-GAAP free cash flow for Q1 2025 was $(12.3) million, compared to $51.3 million in Q1 2024, indicating a significant decline[196]. Expenses - Sales, marketing, and customer success expenses decreased by $6.2 million, or 12.2%, during the three months ended March 31, 2025, compared to the same period in 2024[149]. - Research and development expenses decreased by $9.2 million or 21.6% for the three months ended March 31, 2025, compared to the same period in 2024[150]. - General and administrative expenses increased by $8.9 million, or 18.7%, for the three months ended March 31, 2025, compared to the same period in 2024[155]. Debt and Interest - Total carrying value of debt increased by 12.2% to $1,205.7 million as of March 31, 2025, compared to $1,075.0 million at December 31, 2024[200]. - Interest expense is expected to be approximately $65 million to $69 million for the full year 2025, influenced by incremental borrowings for stock repurchases and the expiration of favorable interest rate swaps[157]. - Total remaining principal payments on debt amounted to $1.2 billion, with an average daily borrowing of $1.0 billion during the quarter[218]. - The net leverage ratio was 2.91 to 1.00, below the maximum requirement of 3.75 to 1.00 under the 2024 Credit Facilities[218]. Tax and Compliance - The effective income tax rate increased due to reduced current year stock-based compensation benefits and a valuation allowance against net U.S. deferred tax assets[170]. - The total liability for uncertain tax positions was $5.4 million as of March 31, 2025[227]. Stock Repurchase - The company plans to repurchase between 3% and 5% of its outstanding common stock during 2025, with $544.5 million remaining under the stock repurchase program as of March 31, 2025[114]. - The company repurchased 1,513,022 shares for $100.0 million, with $544.5 million remaining under the stock repurchase program as of March 31, 2025[216]. Acquisitions and Dispositions - The company recorded acquisition and disposition-related costs of $25.1 million during the three months ended March 31, 2025, primarily related to the release from a lease for office space[176].

Core Insights - Blackbaud has announced the promotion of Chad Anderson to executive vice president and chief financial officer (CFO), succeeding Tony Boor who served as CFO for 14 years [1][2][3] - Tony Boor will transition to a new role as executive vice president of corporate development and strategy, focusing on long-term value and enterprise-wide strategies [1][2] - Chad Anderson has been with Blackbaud for 12 years and has played a significant role in modernizing the financial organization and driving critical initiatives for the company's future [2][3] Company Overview - Blackbaud is a leading software provider dedicated to powering social impact, serving nonprofit and education sectors, and companies committed to social responsibility [4] - The company has raised, granted, or managed over $100 billion through its platforms annually, supporting millions of users in over 100 countries [4] - Blackbaud has received recognition from Newsweek, Quartz, and Forbes for its responsible business practices and employee satisfaction [4]

Core Viewpoint - Blackbaud reported quarterly earnings of $0.96 per share, exceeding the Zacks Consensus Estimate of $0.90 per share, and showing a slight increase from $0.93 per share a year ago, indicating a 6.67% earnings surprise [1] Financial Performance - The company posted revenues of $270.66 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.92%, but down from $279.25 million year-over-year [2] - Over the last four quarters, Blackbaud has exceeded consensus EPS estimates two times and topped revenue estimates once [2] Stock Performance - Blackbaud shares have declined approximately 13.3% since the beginning of the year, compared to a 5.5% decline in the S&P 500 [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.07 on revenues of $276.75 million, and for the current fiscal year, it is $4.20 on revenues of $1.12 billion [7] - The trend of earnings estimate revisions for Blackbaud is mixed, which could change following the recent earnings report [6] Industry Context - The Computer - Software industry, to which Blackbaud belongs, is currently ranked in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - In Q1 2025, the company generated revenue of $271 million, reflecting a 5.8% organic growth, with a non-GAAP adjusted EBITDA margin of 34.3% and non-GAAP diluted earnings per share of $0.96, achieving a Rule of 40 score of 40.1% [6][19][20] - Non-GAAP adjusted EBITDA increased by approximately $4 million compared to the previous year, with a 250 basis point improvement in margin [19][20] - Adjusted free cash flow was negative $11 million in Q1, primarily due to a one-time $28 million cash release payment related to the Washington DC office lease and increased interest expenses [20][24] Business Line Data and Key Metrics Changes - The transactional business was a significant driver of overperformance in Q1, with approximately 9% growth in transactional revenue, contributing about $2 million in incremental revenue for the quarter [34][35] - The company has transitioned the majority of its products and customers to third-party cloud solutions, enhancing operational efficiency [8] Market Data and Key Metrics Changes - The company reported strong performance in international markets, particularly in Asia Pacific and Europe, with good sales bookings and customer retention [53] - JustGiving, a platform in the UK, continues to perform well, benefiting from brand recognition and participation in major events [54] Company Strategy and Development Direction - The company aims to achieve a Rule of 45 by 2030, focusing on organic revenue growth driven by innovation and a strong capital allocation strategy [6][15][26] - The company is investing in AI capabilities to enhance customer engagement and improve internal productivity, with plans to integrate these innovations into existing products [9][10][76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the social impact market, noting that the company has not seen any negative impact on sales bookings or customer retention despite macroeconomic challenges [6][32][46] - The guidance for 2025 remains unchanged, projecting revenue in the range of $1.5 billion to $1.125 billion, with organic growth of 4.2% to 5.1% [22][23] Other Important Information - The company repurchased approximately 4% of its outstanding shares in Q1 2025, continuing its commitment to return capital to shareholders [12][21] - The transition of CFO duties from Tony Bohr to Chad Anderson was highlighted, with both executives expressing confidence in the company's future [13][14] Q&A Session Summary Question: Impact of federal grant funding on customers - Management clarified that their solutions are not reliant on federal grants, and while some customers may be affected, there has been no impact on sales bookings or customer retention [31][32][46] Question: Performance of the transactional business - The transactional business was a key driver of overperformance in Q1, with strong growth and good performance across the board [34][35] Question: Guidance and macroeconomic considerations - Management maintained that the guidance for the year does not anticipate material changes in the macro environment, expressing optimism for continued growth [41][46] Question: Net new bookings and international market performance - New bookings have increased significantly in Q1, with a positive outlook for international markets, particularly for the JustGiving platform [51][53] Question: Contract renewals and customer retention - Customer retention remains high, with a standard practice of notifying customers well in advance of contract renewals, ensuring smooth transitions [63][66] Question: Share buyback program - The company is on track to meet its share buyback target for 2025 and will continue to evaluate its capital allocation strategy [70][73] Question: Monetization of AI technologies - The company is exploring monetization models for its AI solutions but has not charged separately for these capabilities to date, focusing on delivering value to customers [76][81]