Blackbaud (BLKB) reported third-quarter 2024 non-GAAP earnings per share (EPS) of 99 cents, which missed the Zacks Consensus Estimate by 5.7%. The bottom line decreased 11.6% year over year.Stay up-to-date with all quarterly releases: See Zacks Earnings CalendarTotal revenues jumped 3.3% year over year to $286.7 million. Revenues missed the Zacks Consensus Estimate by 2.4%.Total recurring revenues (contributed 98% to total revenues) in the reported quarter amounted to $280 million, up 4.1% year over year. T ...

Core Insights - Blackbaud reported revenue of $286.73 million for the quarter ended September 2024, reflecting a year-over-year increase of 3.3% but a revenue surprise of -2.41% compared to the Zacks Consensus Estimate of $293.81 million [1] - The company's EPS for the quarter was $0.99, down from $1.12 in the same quarter last year, resulting in an EPS surprise of -5.71% against the consensus estimate of $1.05 [1] Revenue Breakdown - Recurring revenue was reported at $280.02 million, which is a 4.1% increase year-over-year but below the three-analyst average estimate of $287.44 million [3] - Revenue from one-time services and other sources was $6.71 million, exceeding the average estimate of $6.37 million, but showing a significant year-over-year decline of 22.2% [3] - Contractual recurring revenue stood at $194.80 million, which is a 3% increase year-over-year but below the two-analyst average estimate of $202.85 million [3] - Transactional recurring revenue was reported at $85.22 million, slightly below the average estimate of $85.57 million, reflecting a year-over-year increase of 6.8% [3] Stock Performance - Over the past month, Blackbaud's shares have returned +4.5%, outperforming the Zacks S&P 500 composite's +1.8% change [4] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [4]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20statements) The financial statements for the period ending September 30, 2024, show improved net income and strong operating cash flow, despite a decrease in total assets and stockholders' equity due to share repurchases [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28Unaudited%29) Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $34,633 | $31,251 | | Goodwill | $1,056,882 | $1,053,738 | | **Total Assets** | **$2,600,974** | **$2,912,279** | | **Liabilities & Equity** | | | | Total Debt (Current + Long-term) | $1,000,849 | $779,664 | | Total Liabilities | $2,056,647 | $2,103,574 | | Total Stockholders' Equity | $544,327 | $808,705 | - Total assets decreased from **$2.91 billion** at year-end 2023 to **$2.60 billion**, while total liabilities saw a smaller decrease. The reduction in stockholders' equity is largely attributable to a significant increase in treasury stock, which rose from **$591.6 million** to **$922.5 million** due to share repurchases[7](index=7&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29%20%28Unaudited%29) Statement of Comprehensive Income Highlights (in thousands, except per share data) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$286,727** | **$277,626** | **$853,263** | **$810,421** | | Recurring Revenue | $280,018 | $269,001 | $832,912 | $784,139 | | **Gross Profit** | **$159,210** | **$155,860** | **$474,840** | **$444,068** | | **Income from Operations** | **$43,825** | **$22,044** | **$96,636** | **$12,391** | | **Net Income (Loss)** | **$20,542** | **$9,017** | **$47,592** | **($3,579)** | | **Diluted EPS** | **$0.40** | **$0.17** | **$0.91** | **($0.07)** | - For the nine months ended Sep 30, 2024, the company reported a net income of **$47.6 million**, a significant turnaround from a net loss of **$3.6 million** in the same period of 2023. This improvement was driven by a **5.3%** increase in total revenue and a substantial reduction in operating expenses as a percentage of revenue[8](index=8&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) Cash Flow Highlights for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $222,386 | $202,983 | | Net cash used in investing activities | ($56,325) | ($49,170) | | Net cash used in financing activities | ($435,117) | ($496,746) | | **Net decrease in cash, cash equivalents and restricted cash** | **($265,529)** | **($343,244)** | - Cash from operations increased by **9.6%** to **$222.4 million** for the first nine months of 2024. Financing activities included proceeds from debt of **$1.3 billion** and payments on debt of **$1.08 billion**, largely related to the April 2024 refinancing. A significant use of cash was the purchase of treasury stock for **$325.4 million**[9](index=9&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) The notes provide details on significant corporate events such as the EVERFI divestiture, debt refinancing, expanded stock repurchase program, and ongoing costs from the 2020 security incident - On March 2, 2024, the company divested its U.K.-based creative services business, EVERFI Limited, recording a **$1.6 million** loss on the disposition[20](index=20&type=chunk) - In April 2024, the company refinanced its debt, entering into a new **$1.5 billion** credit agreement consisting of a **$700.0 million** revolving facility and an **$800.0 million** term loan facility, extending the maturity to April 2029[38](index=38&type=chunk)[39](index=39&type=chunk) - The Board of Directors expanded the stock repurchase program to **$800 million**. In the first nine months of 2024, the company repurchased **3.76 million shares** for **$325.4 million**, including an initial delivery from a **$200 million** Accelerated Share Repurchase (ASR) transaction[93](index=93&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) - As of September 30, 2024, the company had approximately **$1.2 billion** of revenue under contract expected to be recognized from remaining performance obligations, with about **55%** to be recognized in the next 12 months[101](index=101&type=chunk) - The company settled with the Attorney General of California regarding the 2020 Security Incident for **$6.8 million** in Q3 2024. This resolved the last remaining U.S. state attorney general investigation. Investigations by the FTC and 49 other states were previously settled[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) Management's discussion details the company's strong nine-month performance, attributing it to strategic initiatives, revenue growth, improved operating income, and significant capital returns, while exploring strategic alternatives for the EVERFI business [Business Update and Strategy](index=26&type=section&id=Business%20Update%20and%20Strategy) - The company is executing a five-point operating plan focused on product innovation, predictable growth initiatives, cost management, and cash flow generation[109](index=109&type=chunk) - Strategic priorities include penetrating the market further, investing in innovation like generative AI, and maximizing shareholder value through disciplined capital returns, including an aggressive stock repurchase program[110](index=110&type=chunk)[113](index=113&type=chunk) - The company is exploring a range of alternatives for its underperforming EVERFI business, including a potential divestiture, and has hired a strategic advisor to assist[120](index=120&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Revenue by Sector - Nine Months Ended Sep 30 (in millions) | Sector | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Social Sector | $751.8 | $696.8 | +7.9% | | Corporate Sector | $101.4 | $113.6 | -10.7% | | **Total Revenue** | **$853.3** | **$810.4** | **+5.3%** | - Total revenue for the nine months ended Sep 30, 2024 increased by **$42.8 million**, driven by growth in contractual recurring revenue (**$31.2 million**) and transactional recurring revenue (**$17.6 million**)[117](index=117&type=chunk) - Income from operations for the nine months increased by **$84.2 million**, primarily due to decreases in stock-based compensation (**-$19.2 million**), Security Incident-related expenses (**-$35.9 million**), and commission expense (**-$9.3 million**)[121](index=121&type=chunk) - Gross dollar retention was approximately **90%** for the twelve months ended Sep 30, 2024. Excluding the underperforming EVERFI business, the rate was approximately **92%**[124](index=124&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) - Principal sources of liquidity are operating cash flow and funds available under the **$1.5 billion** 2024 Credit Facilities. As of Sep 30, 2024, available borrowing capacity was **$547.6 million**[170](index=170&type=chunk)[191](index=191&type=chunk) - For the nine months ended Sep 30, 2024, the company generated **$222.4 million** in cash from operations, an increase of **9.6%** YoY[126](index=126&type=chunk)[170](index=170&type=chunk) - The stock repurchase program was expanded to **$800 million**. The company repurchased **$325.4 million** of its stock in the first nine months of 2024, funded by borrowings. The goal is to repurchase up to **10%** of outstanding stock in 2024[186](index=186&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - The company is in compliance with all debt covenants, with a net leverage ratio of **2.42 to 1.00** (requirement: ≤ **3.75 to 1.00**) and an interest coverage ratio of **8.37 to 1.00** (requirement: ≥ **2.50 to 1.00**)[192](index=192&type=chunk) [Non-GAAP Financial Measures](index=39&type=section&id=Non-GAAP%20Financial%20Measures) GAAP vs. Non-GAAP Performance - Nine Months Ended Sep 30 | Metric (in millions, except per share) | 2024 | 2023 | | :--- | :--- | :--- | | GAAP Net Income (Loss) | $47.6 | ($3.6) | | **Non-GAAP Net Income** | **$156.3** | **$151.5** | | GAAP Diluted EPS | $0.91 | ($0.07) | | **Non-GAAP Diluted EPS** | **$3.00** | **$2.83** | Non-GAAP Free Cash Flow - Nine Months Ended Sep 30 (in millions) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | GAAP net cash provided by operating activities | $222.4 | $203.0 | | **Non-GAAP free cash flow** | **$172.3** | **$154.1** | | **Non-GAAP adjusted free cash flow** | **$187.4** | **$177.2** | - Non-GAAP organic revenue growth for the nine months ended Sep 30, 2024 was **6.0%** (**5.7%** on a constant currency basis)[160](index=160&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) The company's primary market risks stem from interest rate fluctuations on variable debt, managed with derivatives, and foreign currency exposure from international operations, partially hedged with forward contracts - The primary financial instrument with market risk is variable rate debt, exposing the company to changing interest rates (SOFR). This risk is managed through derivative instruments[203](index=203&type=chunk)[204](index=204&type=chunk) - Approximately **16%** of total revenue for the nine months ended Sep 30, 2024, was from outside the U.S., creating exposure to foreign currency fluctuations, primarily with the British Pound and Canadian Dollar. The company uses forward contracts to hedge some of this risk[200](index=200&type=chunk)[201](index=201&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting during the third quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[205](index=205&type=chunk) - There were no changes in internal control over financial reporting during the third quarter of 2024 that have materially affected, or are reasonably likely to materially affect, these controls[206](index=206&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20proceedings) The company is subject to various legal proceedings, including ongoing matters related to the May 2020 Security Incident, with recent settlements resolving major U.S. governmental investigations - For a full discussion of legal proceedings, the report refers to Note 9 of the unaudited, condensed consolidated financial statements[207](index=207&type=chunk) - The company is subject to ongoing legal proceedings, claims, and investigations related to the May 2020 Security Incident. This includes customer claims, class action lawsuits, and governmental investigations[67](index=67&type=chunk)[69](index=69&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20factors) The primary risk factor update highlights the continued adverse effects and unrecoverable costs of the 2020 Security Incident, which impact liquidity and operations despite resolved governmental investigations - The Security Incident continues to have adverse effects on business, operations, and financial condition, including significant expenses for legal fees, settlements, and enhanced cybersecurity measures[209](index=209&type=chunk)[219](index=219&type=chunk) - In 2024, the company settled with the FTC (no fine) and the Attorney General of California (**$6.8 million** payment), resolving the last major U.S. governmental investigations into the incident[213](index=213&type=chunk)[214](index=214&type=chunk) - Insurance coverage for the incident was exceeded in Q1 2022, meaning all subsequent costs, including the **$12.8 million** in net pre-tax expenses incurred in the first nine months of 2024, are borne by the company and could materially affect liquidity[219](index=219&type=chunk)[220](index=220&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20sales%20of%20equity%20securities%20and%20use%20of%20proceeds) During Q3 2024, the company repurchased 827,185 shares, with approximately **$737.2 million** remaining available under the authorized stock repurchase program Issuer Purchases of Equity Securities (Q3 2024) | Period | Total Shares Purchased | Avg. Price Paid ($) | Shares Purchased Under Plan | Approx. Value Remaining Under Plan ($) | | :--- | :--- | :--- | :--- | :--- | | **Total Q3 2024** | **827,185** | **$77.71** | **807,774** | **$737,188,000** | [Item 5. Other Information](index=54&type=section&id=Item%205.%20Other%20information) During Q3 2024, the CEO and CFO adopted Rule 10b5-1 trading plans for future sales of company securities, with no other non-Rule 10b5-1 arrangements adopted or terminated - CEO Michael P. Gianoni adopted a Rule 10b5-1 trading plan on August 14, 2024, to sell up to **59,206** securities over a twelve-month period[224](index=224&type=chunk) - CFO Anthony W. Boor adopted a Rule 10b5-1 trading plan on August 21, 2024, to sell up to **10,000** securities over a six-month period[224](index=224&type=chunk) [Item 6. Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications under Sarbanes-Oxley and Inline XBRL data files - The report includes required certifications from the Chief Executive Officer and Chief Financial Officer under the Sarbanes-Oxley Act[226](index=226&type=chunk) - Interactive data files (Inline XBRL) are filed as exhibits 101 and 104[226](index=226&type=chunk)

Blackbaud, Inc. (NASDAQ:BLKB) Q3 2024 Earnings Conference Call October 30, 2024 8:00 AM ET Company Participants Mike Gianoni - President, Chief Executive Officer, Vice Chairman of the Board of Directors Tony Boor - Chief Financial Officer, Executive Vice President of Finance, Administration Tom Barth - Head of Investor Relations Conference Call Participants Rob Oliver - Baird Brian Peterson - Raymond James Parker Lane - Stifel Matt VanVliet - BTIG Kirk Materne - Evercore Operator Greetings, and welcome to t ...

Blackbaud (BLKB) came out with quarterly earnings of $0.99 per share, missing the Zacks Consensus Estimate of $1.05 per share. This compares to earnings of $1.12 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of -5.71%. A quarter ago, it was expected that this software and services provider in the nonprofit sector would post earnings of $1.04 per share when it actually produced earnings of $1.08, delivering a surprise of 3.85%. ...

| --- | --- | --- | --- | |-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | Forward-looking Statements 2 This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this presentation consist of, among other things, statements regarding future operating results, all of which are based on current expectations, estimates ...

Exhibit 99.1 PRESS RELEASE Blackbaud Announces 2024 Third Quarter Results At bbcon® 2024, Blackbaud Launched Its Most Aggressive Innovation Plans Yet Charleston, S.C. (October 30, 2024) — 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 co ...

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, ...

The market expects Blackbaud (BLKB) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended September 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released ...

CHARLESTON, S.C., Oct. 15, 2024 /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the leading provider of software for powering social impact, will report its third quarter 2024 financial results on Wednesday, October 30, before the U.S. financial markets open for trading. In conjunction with this announcement, Blackbaud will host a conference call at 8:00 a.m. ET to discuss the company's financial results. Event: Blackbaud's Third Quarter 2024 Financial Results Conference Call Date: Wednesday, October 30 Time: 8:0 ...