Revenue Performance - GAAP total revenue for Q4 2024 was $302.2 million, up 2.4% year-over-year, while non-GAAP organic revenue increased by 3.2%[6] - For the full year 2024, GAAP total revenue was $1.2 billion, up 4.5%, with non-GAAP organic revenue increasing by 5.2%[10] - Total revenue for Q4 2024 was $302.232 million, a slight increase from $295.011 million in Q4 2023, representing a year-over-year growth of 0.4%[31] - Recurring revenue for the year ended December 31, 2024, reached $1.129 billion, up from $1.072 billion in 2023, indicating a growth of approximately 5.4%[31] - GAAP revenue for Q4 2024 was $302,232 thousand, representing a 2.4% increase from $295,011 thousand in Q4 2023[40] - Non-GAAP organic revenue for Q4 2024 was $302,232 thousand, with a growth rate of 3.2% compared to $292,798 thousand in Q4 2023[40] Profitability and Loss - GAAP net loss for Q4 2024 was $330.8 million, including pre-tax EVERFI impairment charges of $405.4 million, resulting in a diluted loss per share of $6.74[6] - The company reported a net loss of $330.764 million for Q4 2024, compared to a net income of $5.399 million in Q4 2023, reflecting a significant decline in profitability[31] - Non-GAAP net income for the year ended December 31, 2024, was $210,671 thousand, slightly down from $213,631 thousand in 2023[40] - GAAP net loss for Q4 2024 was $(330,764) thousand, compared to a net income of $5,399 thousand in Q4 2023[40] Operating Metrics - GAAP recurring revenue reached $296.2 million, representing 98% of total revenue, with a 3.1% increase compared to Q4 2023[6] - Non-GAAP adjusted EBITDA for Q4 2024 was $102.2 million, reflecting a margin of 33.8%, an increase of 20 basis points[6] - The company achieved a GAAP operating cash flow margin of 24.3% in Q4 2024, an increase of 2,540 basis points year-over-year[6] - Non-GAAP adjusted EBITDA for Q4 2024 was $102,242, reflecting a margin of 33.8%, slightly up from 33.7% in Q4 2023[45] - The company reported a GAAP operating cash flow margin of 25.6% for the year 2024, an increase from 18.1% in 2023[51] Cash Flow and Expenses - Blackbaud's non-GAAP adjusted free cash flow for 2025 is anticipated to be between $185 million to $195 million[13] - Cash and cash equivalents increased to $67.628 million as of December 31, 2024, from $31.251 million at the end of 2023, marking a growth of 116.4%[29] - Operating expenses surged to $531.505 million in Q4 2024, compared to $126.862 million in Q4 2023, primarily due to the $405.360 million expense related to the EVERFI disposition[31] - Non-GAAP free cash flow for the year ended December 31, 2024, was $228,768, with a margin of 19.8%, compared to $135,506 and 12.3% in 2023[51] Future Guidance and Plans - Blackbaud plans to repurchase 3% to 5% of its total outstanding shares in 2025, following a 10% repurchase in 2024[7] - Blackbaud's 2025 financial guidance includes expected GAAP revenue of $1.115 billion to $1.125 billion, with organic revenue growth projected at 4.5% to 5.4%[13] - Non-GAAP net income for 2025 is projected to be $210.7 million, with diluted earnings per share expected to be $4.07, an increase of $0.09[13] Balance Sheet and Liabilities - Total assets decreased to $2.496 billion in 2024 from $2.912 billion in 2023, a decline of approximately 14.3%[29] - The company's total liabilities increased to $2.354 billion in 2024, up from $2.104 billion in 2023, representing a rise of about 11.9%[29] Key Performance Indicators - The Rule of 40 metric, which combines non-GAAP organic revenue growth and adjusted EBITDA margin, is a key performance indicator for evaluating the company's financial health[26] - The Rule of 40 metric for Q4 2024 was 37.0%, down from 38.9% in Q4 2023[45]

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 ...

| --- | --- | --- | --- | |-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | 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 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 000-50600 Blackbaud, Inc. (Exact name of registrant as specified in its charter) Delaware 11-2617163 (State or other jurisdiction of incorpor ...

Financial Data and Key Metrics Changes - Organic revenue growth for Q2 2024 was approximately 7%, significantly up from 2.8% in Q2 2023 [5] - Total revenue for Q2 2024 was $287 million, representing a 6% year-over-year increase and nearly 7% on an organic basis [49] - Adjusted EBITDA margin improved to 36%, up nearly 300 basis points year-over-year [19] - Non-GAAP earnings per share was $1.08, reflecting a 10% year-over-year increase [19] - Adjusted free cash flow for the first half of 2024 was up approximately 50% compared to the first half of 2023, totaling $89 million [12] Business Line Data and Key Metrics Changes - The social sector, which represents 88% of total revenue, grew 8.5% year-over-year in Q2 2024, a significant increase from 2% growth in Q2 2023 [9] - Contractual recurring revenue in the social sector grew 9.5% year-over-year, while transactional recurring revenue was up 8.2% [49] - The corporate sector, accounting for approximately 12% of total revenue, declined by 9.2%, primarily due to underperformance at EVERFI [49] Market Data and Key Metrics Changes - The company continues to focus on mid-size and enterprise nonprofits, leveraging its market leadership and strong brand recognition [8] - The U.S. charitable giving market was over $500 billion in 2023, with approximately $100 billion processed through Blackbaud's platforms [21] Company Strategy and Development Direction - The company is executing a five-point operating plan aimed at enhancing growth predictability and maintaining cost management [4] - There is a commitment to repurchase up to 10% of outstanding shares in 2024, with an expanded stock repurchase program totaling $800 million [10][26] - The company is actively considering strategic alternatives for EVERFI, including a potential divestiture [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term trajectory of the social sector, citing its resilience during downturns [9] - The company anticipates being at the low end of revenue guidance due to EVERFI's underperformance but expects to be at the high end of adjusted EBITDA margin guidance [28] - Management highlighted the removal of past challenges, including legal issues and a security incident, as a foundation for sustainable growth [43] Other Important Information - The company has implemented a modernized approach to contract renewals, moving customers to standard three-year contracts with annual price escalators [51] - The corporate sector's performance is impacted by EVERFI, which represents only 8% of total revenues but has been a drag on growth [25][48] Q&A Session Summary Question: Update on bookings environment in the social sector - Management indicated that bookings are doing well in the social sector, with new logos and product sales productivity up, and revenue drag is fully related to EVERFI [33] Question: Margin profile of EVERFI relative to the social side - Management clarified that EVERFI is dilutive to both growth and EBITDA, and they are working on plans to improve its performance [55] Question: Challenges faced in recent years - Management noted that past challenges included a security incident and legal issues, which are now resolved, allowing the company to focus on growth [43] Question: Visibility into viral charitable giving campaigns - Management acknowledged the unpredictability of viral charitable events but noted that they could provide upside if they occur in the second half of the year [44] Question: Importance of the corporate sector - Management affirmed that the corporate sector remains important, particularly the "Your Cause" business, which is performing well [58]

PRESS RELEASE Charleston, S.C. (July 30, 2024) — Blackbaud (NASDAQ: BLKB), the leading provider of software for powering social impact, today announced financial results for its second quarter ended June 30, 2024. Second Quarter 2024 Results Compared to Second Quarter 2023 Results: • GAAP recurring revenue was $281.4 million, up 7.2% and represented 98% of total revenue. Non-GAAP organic recurring revenue increased 7.2%. • GAAP income from operations was $42.1 million, with GAAP operating margin of 14.7%, a ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%2E%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Blackbaud, Inc.'s unaudited condensed consolidated financial statements for Q1 2024, detailing financial position, performance, and cash flows, including a **$5.2 million** net income Q1 2024 vs Q1 2023 Financial Highlights | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | | :--- | :--- | :--- | | **Total Revenue** | $279.3 | $261.8 | | **Gross Profit** | $153.0 | $138.6 | | **Income (Loss) from Operations** | $10.7 | $(9.9) | | **Net Income (Loss)** | $5.2 | $(14.7) | | **Diluted EPS** | $0.10 | $(0.28) | Balance Sheet Summary (as of March 31, 2024) | Account | Amount (in millions) | | :--- | :--- | | **Total Assets** | $2,549.1 | | **Total Liabilities** | $2,015.1 | | **Total Stockholders' Equity** | $534.1 | - In March 2024, the company divested its U.K.-based creative services business, EVERFI Limited, resulting in a recorded loss of **$1.6 million**[240](index=240&type=chunk) - The company repurchased **2,954,211 shares** for **$262.6 million** during the quarter, with **$259.7 million** remaining available under the stock repurchase program as of March 31, 2024[184](index=184&type=chunk)[308](index=308&type=chunk) - Subsequent to the quarter end, on April 30, 2024, the company refinanced its debt, entering into a new **$1.5 billion** credit facility, extending the maturity to 2029 and providing additional operational flexibility[376](index=376&type=chunk)[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights a **6.7%** YoY revenue increase to **$279.3 million** in Q1 2024, driven by recurring revenue growth and improved operating income [Executive Summary](index=30&type=section&id=Executive%20Summary) This executive summary outlines Q1 2024 operational and financial results, highlighting innovation in AI, **$17.5 million** total revenue growth, and improved operating income - The company is accelerating innovation, focusing on generative AI and enhancing connectivity across its solution suite, with new AI capabilities released for Raiser's Edge NXT and JustGiving[181](index=181&type=chunk)[353](index=353&type=chunk)[7](index=7&type=chunk) - A modernized contract and pricing policy, initiated in 2022, is a key driver of revenue growth and is expected to impact approximately **half of total company revenue** in 2024[9](index=9&type=chunk)[355](index=355&type=chunk) Q1 2024 vs Q1 2023 Key Financial Metrics | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $279.3M | $261.8M | +$17.5M | | **Recurring Revenue** | $271.5M | $252.7M | +$18.8M | | **Income from Operations** | $10.7M | $(9.9)M | +$20.7M | - Gross dollar retention for the twelve months ended March 31, 2024 was approximately **89%**, slightly lower than the full year 2023 rate, primarily due to EVERFI[14](index=14&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q1 2024 saw total revenue increase **6.7%** to **$279.3 million**, driven by recurring revenue growth and improved operating income due to reduced expenses Revenue by Type (Q1 2024 vs Q1 2023) | Revenue Type | Q1 2024 ($M) | Q1 2023 ($M) | YoY Growth | | :--- | :--- | :--- | :--- | | **Recurring** | $271.5 | $252.7 | +7.4% | | *Contractual* | $190.9 | $177.6 | +7.5% | | *Transactional* | $80.7 | $75.1 | +7.4% | | **One-time services & other** | $7.7 | $9.0 | -14.1% | | **Total Revenue** | $279.3 | $261.8 | +6.7% | - Sales, marketing and customer success expense decreased by **$3.5 million (6.5%)** due to lower commission expense and severance costs[54](index=54&type=chunk) - Research and development expenses increased by **$2.2 million (5.4%)**, primarily due to higher compensation costs for security-related compliance resources[25](index=25&type=chunk) - General and administrative expense decreased by **$5.1 million (9.6%)**, mainly driven by a **$7.5 million** reduction in Security Incident-related expenses[26](index=26&type=chunk) Non-GAAP Operating Results (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | | :--- | :--- | :--- | | **Non-GAAP Gross Profit** | $171.5 | $156.4 | | **Non-GAAP Income from Operations** | $72.4 | $56.6 | | **Non-GAAP Net Income** | $49.5 | $38.3 | | **Non-GAAP Diluted EPS** | $0.93 | $0.72 | [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2024, the company reported **$26.4 million** in cash, **$1.04 billion** in debt, and **$64.6 million** in operating cash flow, with significant stock repurchases and a post-quarter debt refinancing Cash Flow Summary (Three Months Ended March 31) | Cash Flow Activity | 2024 ($M) | 2023 ($M) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $64.6 | $21.8 | | **Net cash used in investing activities** | $(14.5) | $(15.3) | | **Net cash used in financing activities** | $(394.6) | $(353.2) | - The company initiated a **$200 million** Accelerated Share Repurchase (ASR) transaction in March 2024, receiving an initial delivery of **2.1 million shares**[76](index=76&type=chunk) - As of March 31, 2024, the company had total remaining principal debt payments of **$1.0 billion** and total contractual obligations of **$1.46 billion**[82](index=82&type=chunk)[105](index=105&type=chunk) - On April 30, 2024, the company refinanced its debt, replacing its 2020 credit facility with a new **$1.5 billion** facility (**$700 million** revolving, **$800 million** term loan) maturing in 2029[81](index=81&type=chunk)[393](index=393&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to market risks from interest rates on variable debt and foreign currency exchange rates, which are partially hedged with derivative instruments - The primary market risk is from changing interest rates on variable rate debt (SOFR-based), which is managed using derivative instruments like interest rate swaps[112](index=112&type=chunk)[135](index=135&type=chunk) - The company has foreign currency exchange rate risk, primarily from the British Pound and Canadian Dollar, which is partially hedged with forward contracts[113](index=113&type=chunk)[109](index=109&type=chunk) - For the three months ended March 31, 2024, foreign currency fluctuations increased total revenue by **$0.9 million** and income from operations by **$0.3 million**[109](index=109&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls over financial reporting - Based on an evaluation as of the end of the period, the CEO and CFO concluded that the company's disclosure controls and procedures are effective[114](index=114&type=chunk) - There were no changes in internal control over financial reporting during the first quarter of 2024 that materially affected, or are likely to materially affect, internal controls[96](index=96&type=chunk) [PART II. OTHER INFORMATION](index=62&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 9 for a detailed discussion of legal proceedings, primarily related to the 2020 Security Incident, including customer claims and governmental investigations - For a comprehensive discussion of legal proceedings, the report directs readers to Note 9 of the unaudited, condensed consolidated financial statements[138](index=138&type=chunk) [Item 1A. Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) This section supplements risk factors, focusing on increased financial leverage, ongoing impacts of the 2020 Security Incident, and legal risks related to anti-takeover provisions - The company's leverage has significantly increased due to the EVERFI acquisition and borrowings for the March 2024 ASR Transaction, potentially impacting business and financial performance[140](index=140&type=chunk)[118](index=118&type=chunk) - The 2020 Security Incident continues to have adverse effects, including ongoing legal fees, settlements, and investigations, incurring **$10.3 million** in net pre-tax expenses for Q1 2024[144](index=144&type=chunk)[150](index=150&type=chunk) - The company has reached settlements with the SEC (March 2023) and a proposed consent order with the FTC (February 2024) regarding the Security Incident, requiring enhanced cybersecurity programs[123](index=123&type=chunk)[124](index=124&type=chunk) - Anti-takeover provisions, such as a classified Board of Directors and Delaware law, may delay or prevent a change of control, though the Stockholder Rights Agreement was terminated on March 18, 2024[130](index=130&type=chunk)[132](index=132&type=chunk)[153](index=153&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's Q1 2024 stock repurchase activities, totaling **2,954,211 shares**, with **$259.7 million** remaining available under the program Issuer Purchases of Equity Securities (Q1 2024) | Period | Total Shares Purchased (under plan) | Average Price Paid per Share | Approx. Value Remaining under Plan ($ millions) | | :--- | :--- | :--- | :--- | | Jan 2024 | 273,907 | $83.56 | $499.4 | | Feb 2024 | 124,901 | $72.51 | $490.9 | | Mar 2024 | 2,555,403 | $90.46 | $259.7 | | **Q1 Total** | **2,954,211** | **-** | **$259.7** | [Item 5. Other Information](index=70&type=section&id=Item%205.%20Other%20Information) This section details the significant debt refinancing on April 30, 2024, establishing a new **$1.5 billion** credit facility with extended maturity to 2029 and modified covenants - On April 30, 2024, the company refinanced its debt, entering into a new **$1.5 billion** credit agreement[469](index=469&type=chunk)[454](index=454&type=chunk) - The new facilities include a **$700 million** revolving credit facility and an **$800 million** term loan facility, with a new maturity date of April 30, 2029[454](index=454&type=chunk)

Blackbaud, Inc. (NASDAQ:BLKB) Q1 2024 Earnings Conference Call May 1, 2024 8:00 AM ET Company Participants Kevin Mooney – Executive Vice President-Strategy and Business Development Mike Gianoni – Chief Executive Officer Tony Boor – Executive Vice President and Chief Financial Officer Conference Call Participants Rob Oliver – Baird Brian Peterson – Raymond James Matt VanVliet – BTIG Parker Lane – Stifel Kirk Materne – Evercore ISI Operator Ladies and gentlemen, good morning, and welcome to the Blackbaud's ...