Financial Data and Key Metrics Changes - Blackbaud generated revenue of $281 million, representing a 5.2% organic growth year-over-year [4] - Adjusted EBITDA margin improved to 35.4%, up more than 200 basis points year-over-year [4] - Non-GAAP diluted earnings per share increased to $1.10, an 11% rise year-over-year [4] - Free cash flow was particularly strong at $125 million, up from $98 million last year, indicating a 28% growth year-over-year [16] Business Line Data and Key Metrics Changes - The company continues to focus on acquiring new logos, driving innovation, and strengthening customer relationships through additional solutions and renewals [5] - Significant new logo wins include St. Mary's College and Concordia College, with multi-year agreements signed for their fundraising goals [7][8] - The average annual recurring revenue (ARR) from new logo deals is increasing, with a minimum contract length of three years [30] Market Data and Key Metrics Changes - Annual charitable giving in the U.S. is nearing $600 billion, up more than 6% year-over-year, indicating a resilient market for Blackbaud's offerings [5] - Corporate giving has reached an all-time high, becoming the fastest-growing nonprofit revenue source over the last five years [5] Company Strategy and Development Direction - Blackbaud is focusing on mid-single-digit organic revenue growth, EBITDA growth exceeding revenue growth, and double-digit diluted EPS growth [12] - The company is increasing its stock repurchase target from 5% to a range of 5.2% to 7% for 2025, demonstrating confidence in its value [12] - Investments in product innovation, particularly in AI capabilities, are a priority for future growth [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to create substantial shareholder value, supported by strong year-to-date performance [12] - The company anticipates continued strong performance in Q4, with a focus on driving adjusted free cash flow and returning capital to shareholders [21] - Management noted that the operational discipline and efficiencies are yielding positive results, contributing to higher profitability [6] Other Important Information - The company identified a prior period non-cash error related to income tax calculations, which resulted in immaterial impacts to previously filed financial statements [19][34] - Blackbaud's guidance for 2025 includes projected revenue in the range of $1,120 million to $1,130 million, with an anticipated EBITDA margin of approximately 35.4% to 36.2% [20] Q&A Session Summary Question: Customer feedback on AI and agentic functionality - Management noted excitement around AI capabilities, with about 40% of customers quickly adopting new features [23][24] Question: New logo wins and contract sizes - New logo wins are showing larger average ARR deals, with contracts typically being a minimum of three years [30] Question: Revenue reclassification and tax restatement - The revenue reclassification was due to an immaterial non-cash error related to income tax calculations, which was corrected as a best practice [32][34] Question: Monetization of agentic AI - Monetization of agentic AI solutions is expected to start modestly next year, with clear ROI anticipated for customers [38][40] Question: Structural drivers for higher growth in transactional revenue - Management indicated strong performance across all transaction platforms, with no viral events impacting growth [47]

Core Insights - Blackbaud released its 13th annual YourCause CSR Industry Review, analyzing corporate social responsibility (CSR) program data and employee philanthropic behavior from over 300 companies with more than 7 million global employees [1][2] Employee Engagement and Philanthropy Trends - In 2024, employee engagement in volunteering and giving programs remained stable, with average annual employee donations at $744 and average total company matches at $730 [6] - The average annual volunteer hours per volunteer was 13 hours, with companies having less than 1,000 employees showing a 63.8% volunteer engagement rate [6] - Payroll giving had the highest engagement rate, despite offline giving contributing more dollars [6] Corporate Grant Trends - There was a notable increase in corporate grants in 2024, with the average amount per grant rising by approximately 13% and the median sum of grants per client increasing by around 38% compared to the previous year [6] Combined Programs Impact - Companies offering both giving and volunteer programs experienced higher engagement rates than those offering only one type of program, highlighting the effectiveness of combined initiatives [6]