Core Viewpoint - Blackbaud's shares have decreased by approximately 5.7% since the last earnings report, although this performance has outpaced the S&P 500 [1] Group 1: Earnings Report and Estimates - Estimates for Blackbaud have trended downward over the past month, with the consensus estimate shifting by -28.21% [2] - The stock has received a Zacks Rank of 5, indicating a "Strong Sell" recommendation, suggesting expectations of below-average returns in the coming months [4] Group 2: VGM Scores - Blackbaud currently holds a subpar Growth Score of D, while its Momentum Score is rated A, indicating better performance in momentum [3] - The stock has been assigned an F grade on the value side, placing it in the bottom 20% quintile for this investment strategy, resulting in an overall aggregate VGM Score of D [3]

Core Insights - The Blackbaud Institute released its 2024 Trends in Giving Spotlight, highlighting a 1.9% year-over-year increase in overall giving, nearing the record peak set during the COVID-19 pandemic [2][3] - The report emphasizes the resilience and adaptability of fundraisers, noting that despite political uncertainties, charitable giving grew, achieving new records for mean gift amounts [3][7] Key Findings - Total overall giving levels returned near pandemic-era highs, with a 1.9% increase year-over-year, contributing to a total accumulated growth close to the record peak from the pandemic [7] - Online giving also saw a year-over-year growth of 2.2%, surpassing its pandemic-era peak and reflecting a new record level of accumulated growth [7] - Healthcare organizations led the growth in overall giving with an 11.3% increase, followed by Animal Welfare at 7.1% and Environmental causes at 5.6% [7] - 34% of all giving in 2024 occurred in the last three months of the year, consistent with trends from previous election cycles [7] - The mean individual gift reached a record of $937, while the mean online gift was $197, remaining stable and exceeding pre-pandemic levels [7][5]

Core Insights - Blackbaud is actively supporting fundraising efforts for disaster relief and recovery in Los Angeles following catastrophic wildfires that affected over 50,000 acres and numerous communities [1][2] Nonprofit Sector Response - Nonprofits are utilizing Blackbaud technology to manage donor outreach and donations, addressing both immediate and long-term needs of wildfire victims [3] - Foothill Family is providing essential mental health support and resources for affected families, emphasizing the importance of community collaboration for recovery [4] - Jewish Family Service LA has been a key support provider for various social issues, offering comprehensive services to meet the diverse needs of the community [5] Corporate Contributions - Over 215 companies have utilized Blackbaud's YourCause platform to raise more than $8.1 million for wildfire relief through employee donations and corporate matches [6] - Pennymac has implemented a robust employee-driven campaign, including a 5:1 matching program and $100 volunteer grants for every hour of service, significantly enhancing their support for relief efforts [7][8] Blackbaud's Commitment - Blackbaud has made donations to the Los Angeles Fire Department Foundation and the American Red Cross, alongside a multi-year commitment to the Center for Disaster Philanthropy for broader disaster response initiatives [8] Company Overview - Blackbaud is a leading software provider focused on social impact, serving nonprofits and educational sectors, with over $100 billion raised or managed annually through its platforms [9]

Technology and Innovation Risks - The company is incorporating generative AI technology into certain solutions and services, which may present operational, financial, and reputational risks due to the emerging regulatory environment [124] - The introduction of new technologies, such as AI, could render existing solutions obsolete, impacting the company's market competitiveness [116] - The company’s reliance on third-party service providers for AI features may expose it to legal liabilities and reputational harm if personal data is improperly processed [125] - The company’s generative AI features may produce misleading or harmful outputs, which could lead to reputational damage and legal liabilities [126] - The company faces risks associated with the use of third-party technologies, which could delay solution development and harm business operations [139] Competition and Market Dynamics - The company faces intense competition for highly qualified personnel, which could impact its ability to support planned growth if key personnel cannot be attracted or retained [117] - The company has experienced significant competition, which may limit pricing power and affect customer adoption and renewal of solutions [115] - The market for software and services in the social impact community may not grow as expected, potentially limiting the adoption of the company's solutions [119] - Negative media coverage related to peer-to-peer fundraising campaigns could adversely affect user engagement and revenue [131] Financial Performance and Revenue - GAAP revenue for 2024 was $1,155.5 million, representing a 4.5% increase from $1,105.4 million in 2023 [321] - Non-GAAP organic revenue for 2024 was $1,155.5 million, with a growth rate of 5.2% compared to $1,098.0 million in 2023 [321] - Non-GAAP adjusted EBITDA for 2024 was $388.9 million, with a margin of 33.7% [327] - GAAP net loss for 2024 was $283.2 million, compared to a net income of $1.8 million in 2023 [327] - Non-GAAP diluted earnings per share for 2024 was $4.07, up from $3.98 in 2023 [327] - A significant portion of revenue is derived from transaction-based payment processing fees, and a decline in charitable giving could negatively impact these revenues [138] Security and Compliance Issues - The company has received approximately 260 specific requests for reimbursement related to a security incident, with ongoing litigation in U.S. federal courts [150][152] - Compliance with cybersecurity and data protection requirements is expected to be expensive and time-consuming, with potential material liability for non-compliance [154] - The company is subject to various lawsuits and governmental inquiries related to the Security Incident, which may result in additional expenses and liabilities [157][174] - Compliance with Payment Card Industry Data Security Standards (PCI DSS) is critical for the company, as failure to comply may result in fines and harm its reputation [171] - Privacy and data protection concerns may adversely affect demand for the company's software solutions, particularly in light of evolving regulations [185] International Operations and Currency Risks - The company is expanding its international operations, particularly in India, to access talent and increase employee numbers, although it does not expect to generate revenue in India in the foreseeable future [129] - The expansion of international operations has increased exposure to foreign currency exchange rate fluctuations, which could impact financial results [130] - Approximately 14% of total revenue for 2024 was generated from operations outside the U.S., with foreign currency translation increasing total revenue by $3.0 million and income from operations by $1.1 million [376][377] Acquisitions and Impairment - The company has faced challenges in integrating acquisitions, such as the acquisition of EVERFI, Inc., which resulted in a material noncash impairment charge in December 2024 [135] - The company recorded $405.4 million in impairment and disposition charges related to the EVERFI acquisition in 2024 [327] - The divestiture of EVERFI on December 31, 2024, contributed to the decrease in deferred revenue [306] Tax and Regulatory Considerations - The effective income tax rate decreased in 2024 compared to 2023, primarily due to a valuation allowance against U.S. deferred tax assets [313] - The company recorded a valuation allowance against all U.S. deferred tax assets in excess of deferred tax liabilities as of December 31, 2024, due to cumulative pretax losses [310] - The company is subject to periodic audits by domestic and foreign tax authorities, which can impact tax positions [387] Financial Obligations and Capital Management - The company’s total borrowing capacity increased from $1.1 billion to $1.5 billion under the 2024 Credit Facilities [176] - The stock repurchase program was re-initiated in Q4 2023 after a two-year hiatus, but there is no guarantee it will enhance long-term shareholder value [181] - The company repurchased $418.0 million of its common stock in 2024, a significant increase from $18.8 million in 2023 [353] - Total contractual obligations as of December 31, 2024, amounted to $1.581 billion, with $168.7 million due within one year [366] Operational Risks - The company is subject to various operational risks, including cybersecurity threats that could adversely affect its reputation and financial results [145] - The company continues to face risks related to defects or errors in its software, which could lead to significant costs and damage to its reputation [166] - The company’s operations and financial performance may be impacted by climate change and natural disasters, affecting its data centers and business continuity [159]

Blackbaud, Inc. (BLKB) reported fourth-quarter 2024 non-GAAP earnings per share (EPS) of $1.08, which was in line with the Zacks Consensus Estimate. The bottom line decreased 5.3% year over year.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Total revenues jumped 2.5% year over year to $302.2 million. The top line missed the Zacks Consensus Estimate by 0.9%.Total recurring revenues (contributed 98% to total revenues) in the reported quarter amounted to $296.2 million, up 3.1% year ...

Core Viewpoint - Blackbaud has partnered with Nacional Monte de Piedad to enhance corporate giving and grant processing to vetted charities in Mexico, enabling companies to facilitate employee donations and corporate grants effectively [1][2][4]. Group 1: Partnership Details - The partnership allows Blackbaud's corporate clients to utilize the YourCause CSRconnect® and GrantsConnect® platforms for employee giving and corporate gift matching in Mexico [2][4]. - Employees in Mexico will be able to donate to local charities in their home currency and receive tax benefits, enhancing the appeal of corporate social responsibility initiatives [2][4]. Group 2: Platform Capabilities - Blackbaud's YourCause platform connects companies and employees to millions of nonprofits globally, facilitating employee giving, volunteering, grantmaking, and impact reporting [3][4]. - The platform supports engagement in over 170 countries, with 26 languages and 172 currencies available, making it a comprehensive solution for corporate social impact [5]. Group 3: Compliance and Security - Blackbaud has engaged in extensive vetting to ensure compliance with U.S. regulations and local laws for the movement of foreign charitable funds, partnering with Nacional Monte de Piedad to process donations securely [4][5]. - Nacional Monte de Piedad will vet charities and facilitate cross-border funds, ensuring that donations reach trusted organizations in key areas such as health, education, and food security [5][9]. Group 4: Company Background - Blackbaud is a leading software provider dedicated to social impact, with over $100 billion raised, granted, or managed through its platforms annually [7]. - Nacional Monte de Piedad has a 250-year history of improving lives through financial services and social investment, focusing on reducing inequality and promoting sustainable development in Mexico [9].

Group 1 - The article discusses the significant changes brought by President Trump's executive orders in early 2025, indicating a broad remaking of the executive branch and cultural shifts across various sectors [1] - Gary Alexander, with extensive experience in technology companies and startups, has been a contributor to Seeking Alpha since 2017, providing insights into industry trends [1] Group 2 - The article does not provide any specific financial data or performance metrics related to companies or industries [2][3]

Financial Data and Key Metrics Changes - For the full year 2024, Blackbaud produced revenue of $1,155 million, with an adjusted EBITDA margin of nearly 34% and non-GAAP diluted earnings per share of $4.07, reflecting a significant improvement from previous years [14][24] - The company's organic growth rate increased from 1.2% in 2020 to 5.2% in 2024, while the adjusted EBITDA margin improved from 26.5% to 33.7% during the same period [17][24] - Adjusted free cash flow for 2024 was approximately $245 million, representing a margin of 21.2%, up from 19.3% in 2023 [15][24] Business Line Data and Key Metrics Changes - Revenue in the social sector grew by 7% in 2024, with contractual recurring revenue increasing by 8% and transactional recurring revenue growing by 6% [14][24] - The divestiture of the Everfi business, which was dilutive to revenue growth and profitability, was completed on December 31, 2024, allowing the company to focus on its core business [7][8] Market Data and Key Metrics Changes - The company reported a gross dollar retention rate of approximately 92%, excluding Everfi, indicating strong customer satisfaction and loyalty [15] - The anticipated impact of currency fluctuations is expected to negatively affect revenue and adjusted EBITDA by $2 million to $3 million for the year [32] Company Strategy and Development Direction - Blackbaud aims to become a Rule of 45 company by 2030, focusing on mid single-digit organic revenue growth and improving operational efficiencies [18][40] - The company is investing in AI initiatives, including the Blackbaud Copilot, which enhances customer interactions and operational efficiencies [12][78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive revenue growth and profitability despite potential challenges in the macroeconomic landscape [19][22] - The company expects to continue its stock repurchase program, targeting the buyback of 3% to 5% of outstanding shares in 2025 [20][36] Other Important Information - The company plans to invest in product innovation and refine its go-to-market strategies to maximize new logo acquisition and expansion within its customer base [26][36] - A one-time cash release payment of $28 million was made in connection with the lease for office space acquired as part of the Everfi acquisition, which is expected to improve adjusted EBITDA by $3 million to $3.5 million annually going forward [28][36] Q&A Session Summary Question: What are the biggest opportunities for new market growth in 2025? - Management indicated a shift in focus towards net new logos, particularly in K-12 education and other verticals, with expectations for increased bookings [42][45] Question: How does the company view the impact of federal dollar allocation changes on its customers? - Management noted that they have not seen any significant impact yet, as their platforms primarily drive donations through individual donors rather than federal funding [54][56] Question: Can you elaborate on the factors affecting the free cash flow guidance for 2025? - Management highlighted several impacts, including a $28 million one-time lease buyout, investments in India, and increased interest expenses due to stock repurchases [58][61] Question: How does the company plan to achieve the Rule of 45 target by 2030? - Management discussed a mix of cost savings, operational efficiencies, and leveraging AI to drive productivity as key strategies to reach this target [66][70] Question: How is the company's data impacting AI development opportunities? - Management emphasized the extensive data available within the industry, which is being utilized to enhance AI capabilities and drive revenue growth through improved customer interactions [75][78]

Company Performance - Blackbaud reported quarterly earnings of $1.08 per share, matching the Zacks Consensus Estimate, but down from $1.14 per share a year ago [1] - The company posted revenues of $302.23 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.87%, compared to $295.01 million in the same quarter last year [2] - Over the last four quarters, Blackbaud has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [2] Stock Movement and Outlook - Blackbaud shares have increased approximately 8.1% since the beginning of the year, outperforming the S&P 500's gain of 4% [3] - The future performance of Blackbaud's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.98 on revenues of $292.03 million, and for the current fiscal year, it is $4.50 on revenues of $1.22 billion [7] Industry Context - The Computer - Software industry, to which Blackbaud belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Blackbaud's stock performance [5]

Financial Performance & Outlook - Blackbaud's 2025 total revenue guidance is between $1,115 million and $1,125 million, with a midpoint of $1,120 million[67] - The adjusted EBITDA margin for 2025 is projected to be between 34.9% and 35.9%, with a midpoint of 35.4%, representing a 170bps improvement over FY24[67] - The company expects to achieve a Rule of 45 by FY2030, driven by mid-single-digit organic revenue growth and margin expansion[71] - Blackbaud intends to repurchase 3% to 5% of its outstanding stock in 2025[76] - In FY2024, Blackbaud repurchased approximately 10% of its common stock outstanding, and approximately 11% including net share settlement of employee stock compensation[78] Revenue Growth & Composition - Blackbaud's annual recurring revenue is $1.1 billion (Non-GAAP, at mid-point of 2025 financial guidance)[16] - The company achieved a 190bps improvement in Rule of 40 performance in FY24 (150bps improvement at constant currency)[65] - Transactional recurring revenue streams are composed of 55% donation processing, 20% consumer giving, 20% tuition processing, and 5% event-based usage[44] - Transactional recurring revenue has grown from $259 million in 2020 to $354 million in 2024[45] Market & Business Strategy - Blackbaud estimates its total addressable market (TAM) to be over $10 billion[30] - The company's revenue penetration in fundraising, relationship management, and engagement is less than 20%, with a market size of $3.5 billion[30] - Blackbaud's revenue penetration in financial management, grant and award management is less than 10%, with a market size of $3.0 billion[30]