Financial Data and Key Metrics Changes - In Q2 2025, the company generated revenue of $281 million, representing a 6.8% organic growth year over year [6][23] - Adjusted EBITDA margin improved to 38.5%, up nearly 300 basis points year over year [6][23] - Non-GAAP diluted earnings per share (EPS) increased to $1.21, up 12% year over year [6][23] - Adjusted free cash flow was $53 million, up from $36 million last year, representing an adjusted free cash flow margin of 18.9% compared to 12.7% in Q2 2024 [23][24] Business Line Data and Key Metrics Changes - The company highlighted strong performance in transaction solutions, contributing to revenue overperformance [23] - New customer acquisitions included significant deals with organizations like a large youth development organization and Sunnybrook Foundation, showcasing the company's strength in the nonprofit sector [9][11] Market Data and Key Metrics Changes - The company reported strong growth in the higher education vertical, with California Polytechnic State University selecting Blackbaud's solutions for its digital transformation [11][12] - The YourCause solution saw strong expansion with large customers like NASDAQ and Tyson Foods, indicating robust demand in the corporate employee engagement space [12] Company Strategy and Development Direction - The company is focused on acquiring new logos, driving innovation, and strengthening customer relationships through additional solutions and renewals [7][8] - Continued investment in innovation is a priority, with advancements in AI capabilities and product offerings like the AgenTeq AI strategy [17][80] - The company aims for mid-single-digit organic revenue growth, EBITDA growth exceeding revenue growth, and double-digit EPS growth moving forward [20][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term success, citing consistent growth and profitability [22] - The company raised its guidance for 2025, projecting revenue between $1.12 billion and $1.13 billion, reflecting strong first-half performance [27][28] - Management noted that while transactional revenue can be volatile, they do not expect the same level of overperformance in the second half of the year [42] Other Important Information - The company has reduced leverage to 2.7 times, down from 2.9 times, indicating improved financial health [25] - The impact of recent tax law changes is being analyzed, with expectations of reduced cash taxes in the near term [26][87] Q&A Session Summary Question: How is AI impacting customer conversations and budget considerations? - Management noted that AI has been a topic of interest among customers, with ongoing investments in AI capabilities and new product offerings expected to drive revenue [34][36] Question: How should investors think about transactional revenue relative to long-term growth rates? - Management indicated that while the first half saw strong transactional performance, they do not expect this to recur in the second half, and any viral giving events would represent upside [42][43] Question: What are the priorities for the new Head of North American Sales? - The new hire is expected to bring fresh ideas and best practices, enhancing the company's ability to compete and drive new customer acquisitions [49][50] Question: What is the thought process behind stock buybacks? - The company has repurchased approximately 4% of its shares and is focused on balancing stock repurchases with debt repayment, considering interest rates and market conditions [52][54] Question: How is the company approaching upsell opportunities with existing customers? - Management stated that upselling is an ongoing activity, not limited to contract renewals, with a focus on cross-selling across various customer types [67] Question: What are the implications of the recent tax law changes? - The primary impact is expected from the repeal of Section 174, which will favorably affect cash taxes related to domestic R&D expenditures [87][88]

Financial Data and Key Metrics Changes - In Q2 2025, Blackbaud generated revenue of $281 million, representing a 6.8% organic growth year over year [6][22] - Adjusted EBITDA margin improved to 38.5%, up nearly 300 basis points year over year [6][22] - Non-GAAP diluted earnings per share (EPS) increased to $1.21, up 12% year over year [6][22] - Adjusted free cash flow was $53 million, up from $36 million last year, representing an adjusted free cash flow margin of 18.9% compared to 12.7% in Q2 2024 [22] Business Line Data and Key Metrics Changes - The company highlighted strong performance in transaction solutions, contributing to revenue overperformance [22] - New customer acquisitions included significant deals with organizations like a large youth development organization and Sunnybrook Foundation, showcasing growth in the nonprofit and higher education sectors [7][10] Market Data and Key Metrics Changes - Blackbaud's YourCause solution saw strong customer additions, including large brands like NASDAQ and Tyson Foods, indicating growth in corporate engagement [11] - The company is experiencing a growing momentum in the higher education vertical, as evidenced by partnerships with institutions like California Polytechnic State University [10] Company Strategy and Development Direction - The company is focused on acquiring new logos, driving innovation, and strengthening customer relationships through additional solutions and renewals [7] - Blackbaud is investing aggressively in innovation, particularly in AI, with initiatives like the AI Everywhere strategy and the upcoming AgenTeq offerings [16][17] - The company aims for mid-single-digit organic revenue growth, EBITDA growth exceeding revenue growth, and double-digit diluted EPS growth [19][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term success, citing consistent growth and profitability [21] - The company raised its guidance for the remainder of 2025, projecting revenue between $1.12 billion and $1.13 billion, reflecting strong first-half performance [26] - Management noted that while transactional revenue can be volatile, they do not expect the same level of overperformance in the second half of the year [40] Other Important Information - The company is analyzing the tax implications of recent legislation, which is expected to reduce cash taxes in the near term [24][88] - Blackbaud's leverage decreased to 2.7 times in Q2, down from 2.9 times in the previous quarter, indicating improved financial health [23] Q&A Session Summary Question: How is AI coming up in customer conversations and budget considerations? - Management indicated that AI is a significant topic in customer discussions, with ongoing investments in AI capabilities and new product developments expected to drive revenue [31][34] Question: How should investors think about transactional revenue relative to long-term growth rates? - Management acknowledged strong transactional performance in the first half but cautioned that such overperformance may not recur in the second half, emphasizing the importance of monitoring [40] Question: What are the priorities for the new Head of North America, Bill Ford? - Management expressed optimism about Bill Ford's experience and insights, expecting him to enhance the company's ability to compete and drive new customer acquisitions [48] Question: What is the thought process behind the stock buyback strategy? - Management clarified that while stock repurchases are a priority, they are also focused on debt repayment, with a balanced approach to capital allocation [51] Question: How are contract renewals structured and what is the expected impact? - Management noted that renewals are typically higher in Q2 and Q4, with a smooth process expected as the company approaches the end of its three-year contract cycle [58] Question: What are the implications of the recent tax law changes? - Management highlighted that the repeal of Section 174 related to R&D expenditures is expected to have a favorable impact on cash taxes, although specific sizing is still under analysis [88]

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]

Financial Data and Key Metrics Changes - In Q1 2025, the company generated revenue of $271 million, reflecting a 5.8% organic growth [7][19] - Non-GAAP adjusted EBITDA margin was 34.3%, with adjusted EBITDA of $93 million, an increase of approximately $4 million [7][19] - Non-GAAP diluted earnings per share (EPS) increased to $0.96 compared to $0.93 in the previous year [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 [35][36] - The company has transitioned the majority of its products and customers to third-party cloud services, enhancing operational efficiency [10] Market Data and Key Metrics Changes - The company reported strong performance in both domestic and international markets, with good sales bookings in Asia Pacific and Europe [54][62] - JustGiving, a platform in the UK, continues to perform well, leveraging brand recognition and donor-driven campaigns [54][62] Company Strategy and Development Direction - The company aims to achieve a Rule of 45 by 2030, focusing on organic revenue growth and margin expansion [7][16] - There is a strong emphasis on innovation, particularly through AI capabilities, to enhance customer engagement and operational efficiency [11][62] - The company is transitioning to longer-term contracts, primarily three-year renewals, to provide better predictability for revenue [9][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the social impact market, noting that their solutions are critical for customers amid economic uncertainties [8][32] - The guidance for 2025 remains unchanged, projecting revenue between $1.5 billion and $1.125 billion, with organic growth of 4.2% to 5.1% [22][24] Other Important Information - The company repurchased approximately 4% of its outstanding shares in Q1 2025, continuing its commitment to return capital to shareholders [13][21] - The transition of CFO duties from Anthony Boor to Chad Anderson was highlighted, with a focus on maintaining operational excellence [14][15] Q&A Session Summary Question: Impact of federal grant funding on customers - Management noted that their solutions are not reliant on federal grants, and they have not seen any impact on sales bookings or customer retention [31][32] Question: Performance of the transactional business - The transactional business exceeded expectations, contributing significantly to Q1 performance, with strong bookings and retention [35][36] Question: Guidance and macroeconomic considerations - Management maintained guidance for the year, indicating no material changes in the macro environment affecting their business [42][48] Question: International market performance - The company reported good performance in international markets, particularly with the JustGiving platform in the UK [54][62] Question: AI technology monetization - The company is exploring monetization models for its AI solutions but has not charged separately for existing AI capabilities included in contracts [79][80] Question: Share buyback program - Management confirmed that they are on track to repurchase 3% to 5% of outstanding shares in 2025 and will evaluate the program based on market conditions [70][72]

Social Impact Organizations Will Benefit from Enhanced Payment Features That Will Extend Payment Processing Capability to Third-Party Software Providers and Expedite Giving from Corporate Employees CHARLESTON, S.C., April 23, 2025 /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the leading provider of software for powering social impact, today announced an expanded payment processing solution with the launch of Blackbaud Integrated Payments. Inclusive of the functionality previously known as Blackbaud Merchant Se ...

Core Insights - Blackbaud hosted the YourCause® from Blackbaud® Corporate Social Impact Summit, gathering social good professionals and corporate leaders to discuss innovation and collaboration in corporate social responsibility [1][2] - The event highlighted themes of engagement, innovation, partnership, and impact, aiming to inspire attendees to drive meaningful change [2] Product Innovations - Blackbaud unveiled an innovation roadmap for YourCause, focusing on enhancing employee giving, volunteering, engagement, and grantmaking [2] - New features include Expedited Giving, which allows donations to be delivered to nonprofits up to 95% faster, and new payment modalities for easier employee engagement [5] - Streamlined event management tools and Mobile Check-In features are designed to enhance volunteer engagement [5] - AI integration is being utilized to improve grant application processes and workflows for corporate grantmakers [5] - YourCause is expanding globally to create inclusive experiences and enhance platform localization [5] - Partnerships with organizations like True Impact are providing customers with data to inform funding decisions [5] - The Blackbaud Impact Edge™ with built-in AI assistant aims to transform corporate social responsibility reporting from static to dynamic, enabling real-time insights [5] Customer Support and Training - Blackbaud offers comprehensive customer success, support, and training programs to ensure companies can effectively utilize the YourCause platform [3] - Support is available globally, with new training courses introduced regularly to focus on practical applications and best practices [3] Upcoming Events - Blackbaud will host a virtual Product Update Briefings event from May 6-9, 2025, to provide further insights into YourCause enhancements [4]