Blackbaud, Inc. · NASDAQ:BLKB
Blackbaud — Investor Presentation (November 2014)
29 slides from Blackbaud's investor presentation, November 2014
Slide 1: Investor Presentation November 2014
INVESTOR PRESENTATION NOVEMBER 2014
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT 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 thi
Slide 3: Key Messages
KEY MESSAGES Blackbaud is a market leader GOALS 1 with a differentiated model • Accelerated organic growth of 6% to 10% Executing a clear five-point per annum* 2 growth strategy • Operating margin expansion of ~300 to ~600 bps from 2014 to 2017* Recently strengthened 3 management team * 2014 -2017 L
Slide 4: Agenda
AGENDA The Business Today Key Differentiators Strategies for Growth Financials 4
Slide 5: Blackbaud Is a Highly-Differentiated Market Leader with 30+ Years of Experience
BLACKBAUD IS A HIGHLY - DIFFERENTIATED MARKET LEADER WITH 30+ YEARS OF EXPERIENCE (Nasdaq:BLKB) Participate in the ~ $15 Billion Global (1) Giving Software Solutions Market (1) • We provide comprehensive integrated software solutions We serve more than 30,000 of the leading nonprofit organizations a
Slide 6: We Participate in a Large and Rapidly Growing Nonprofit Sector
WE PARTICIPATE IN A LARGE AND RAPIDLY GROWING NONPROFIT SECTOR 3RD 3M+ Largest workforce Nonprofit in U.S. behind organizations retail and outside of manufacturing U.S. $335B Annual U.S. contributions $837B 25% Nonprofit Increase in number contribution to of U.S nonprofit U.S. economy organizations
Slide 7: Strong Revenue Growth Accompanied by Positive Shift in Mix from 2005 to 2013
STRONG REVENUE GROWTH ACCOMPANIED BY POSITIVE SHIFT IN MIX FROM 2005 TO 2013 While total revenue …Mix has dramatically has grown 3X… shifted $504M 2013 2014 YTD Up 1.5X Recurring to 70% 3X revenue % of total Up 1.5X 73% to 70% $166M Subscription revenue % of total Up 10X 46% to 42% 2005 2013 7
Slide 8: Large, Under-Penetrated and Growing Current Addressable Market
LARGE, UNDER-PENETRATED AND GROWING CURRENT ADDRESSABLE MARKET Largest market segments are expected to have significant future growth 2013 E2017 Total $4.4B Total $5.9B ($M) $560 Data & Analytics < 20% $185 $1,100 Program / Mission $450 CRM < 5% $185 $880 < 25% $250 Total K-12 School Admin CRM < 10%
Slide 9: Agenda
AGENDA The Business Today Key Differentiators Strategies for Growth Financials 9
Slide 10: Blackbaud Solutions Manage Over $100B in Global Annual Giving
BLACKBAUD SOLUTIONS MANAGE OVER $100B IN GLOBAL ANNUAL GIVING 30+ Years of Domain Knowledge and Expertise • Deep understanding of the philanthropic behavior of 70 million households – Enables Blackbaud to continually develop solutions aligned with customer needs • 30,000+ nonprofits use one or more
Slide 11: Uniquely Positioned Today in the Industry
UNIQUELY POSITIONED TODAY IN THE INDUSTRY HORIZONTAL VERTICAL / APPS* NICHE Vertically tailored, comprehensive suite of solutions for NPO x Domain knowledge in sales, services and product teams Product breadth / depth x x Domain expertise for all NPO verticals x Integrated marketing capabili
Slide 12: Integrated Cloud-Based Solutions Extends Competitive Advantage
INTEGRATED CLOUD-BASED SOLUTIONS EXTENDS COMPETITIVE ADVANTAGE Benefits of Tightly Integrated Solutions Increased customer value Improved donor experience ONLINE CRM and donor satisfaction Retention of institutional knowledge Deeper and wider competitive moat Improved sales efficiency / re
Slide 13: Agenda
AGENDA The Business Today Key Differentiators Strategies for Growth Financials 13
Slide 14: Strategy for Growth – Key Focus Areas
STRATEGY FOR GROWTH – 5 KEY FOCUS AREAS 1 Accelerating organic revenue growth 2 Accelerating move to the cloud 3 Expanding TAM through tuck-in and strategic acquisitions 4 Optimizing back-office infrastructure 5 Implementing 3-year margin improvement plan 14
Slide 15: 1. Accelerating Organic Revenue Growth
1. ACCELERATING ORGANIC REVENUE GROWTH Integrating analytics, mobile and online into CRM Integrating payment solutions into portfolio Shifting EdgeTM products to cloud-based subscription model 6% - 10% Future organic growth* New, improved online solutions Continuous innovation and upgrade
Slide 16: 2. Accelerating Move to the Cloud
2. ACCELERATING MOVE TO THE CLOUD Subscription / Cloud Revenue Recent acquisitions – cloud-based solutions $213M Shifting Edge products to subscription model Integrated suite of solutions and cross-selling 53% is driving higher revenue per customer Subscription CAGR New subscription pricing
Slide 17: 3. Expanding TAM Through Tuck-in and Strategic Acquisitions
3. EXPANDING TAM THROUGH TUCK-IN AND STRATEGIC ACQUISITIONS Acquisitions align with strategic criteria Strategic criteria Recent acquisitions Strategic: Market leader in; – Grant management • Expands TAM – Corporate social responsibility – Foundation management • New and improved solutions Expan
Slide 18: 4. Optimizing Back-Office Infrastructure
4. OPTIMIZING BACK-OFFICE INFRASTRUCTURE Implemented 2014 Sales automation system 9 applications to 1 platform Results Marketing automation system 7 applications to 1 platform Expand margins on Professional services accelerated growth solution 5 applications to 1 platform Improve speed, accuracy
Slide 19: 5. Executing a 3 Year Margin Improvement Plan
5. EXECUTING A 3 YEAR MARGIN IMPROVEMENT PLAN 20.5%–23.5%* Reduced G&A Productivity and customer gains in R&D support costs Professional services Operational improvement 17.7%* excellence and quality 2014 non- initiatives recurring investment costs ~300 to ~600 basis points in 3 years 2014 Goal 2017
Slide 20: Agenda
AGENDA The Business Today Key Differentiators Strategies for Growth Financials 20
Slide 21: Consistent Long-Term Revenue Growth
CONSISTENT LONG-TERM REVENUE GROWTH $567.5M* Key Drivers $504M 15% Large and growing TAM Revenue CAGR Actual High retention rates Innovation – new solutions, features and functionality Market shift to online $166M Capturing payments business Expansion of Analytics and BI Tuck-in and st
Slide 22: Faster Growth in Recurring Revenue
FASTER GROWTH IN RECURRING REVENUE Strong Mix of Recurring High Growth in Revenue Q3 YTD Recurring Revenue $351M 24% 21% Recurring CAGR Actual 73% 3% Recurring $78M Recurring Licenses Services and Other 2005 2006 2007 2008 2009 2010 2011 2012 2013 22
Slide 23: Significant Subscription Revenue Growth
SIGNIFICANT SUBSCRIPTION REVENUE GROWTH $213M Key Drivers Continued growth from cloud- based subscription offerings 53% Market shift to online Subscription CAGR Actual Capturing payments business Integration of product suite Subscription-based acquisitions $7M 2005 2006 2007 2008 2009 2010
Slide 24: Strong EPS Growth
STRONG EPS GROWTH Non-GAAP Diluted EPS $1.28 100%+ EPS Growth $0.63 2005 2006 2007 2008 2009 2010 2011 2012 2013 24
Slide 25: Strong YTD 2014 Financial Performance
STRONG YTD 2014 FINANCIAL PERFORMANCE Inclusive of $11.5M in incremental investments through Q3 YTD Revenue Non-GAAP Diluted EPS $413M $0.96 $0.94 $370M 2013 2014 2013 2014 Free Cash Flow Non-GAAP Operating Margin $71M 20.6% 17.9% $62M 2013 2014 2013 2014 25
Slide 26: Disciplined Capital Deployment Past & Future
DISCIPLINED CAPITAL DEPLOYMENT PAST & FUTURE Growth and Operating Initiatives • Capital investments consistent with product ~55% roadmap and strategy • Invest in operational efficiencies • Selective tuck-in and strategic acquisitions Annual Maintain Strong Balance Sheet Operating • Cash balances Cas
Slide 27: Long-Term Financial Goals
LONG-TERM FINANCIAL GOALS* Benchmarks E2014 E2017 Organic revenue growth 6.9% 6% - 10% Non-GAAP operating margin 17.7% 20.5% - 23.5% Benchmarks E2017 Aggregate cash flow from $400M - $450M operations 2014 - 2017 * 2014 – 2017 Long-term aspirational financial goals; issued 9/12/14. * Note: This slide
Slide 28: Gaining Momentum: Refocusing to Accelerate Growth and Performance
GAINING MOMENTUM: REFOCUSING TO ACCELERATE GROWTH AND PERFORMANCE • Long track record of consistent growth • Differentiated market leader with a diversified customer base Improved • Uniquely positioned to gain profitability, market share cash flow and • Refocusing to drive improved shareholder perfo
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