Slide 1: Blackbaud Investor Presentation
Blackbaud Investor Presentation Ticker: BLKB May 3, 2023
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as a mended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this presentation consist of, among other t
Slide 3: Historical Financials and Non-GAAP Financial Measures
Historical Financials and Non-GAAP Financial Measures Use of Non-GAAP Financial Measu res: The Company has provided in this presentation financial information that has not been prepared in accordance with GAAP. The Company uses these non-GAAP f inancial measures internally in analyzing its financial
Slide 4: Blackbaud At-a-Glance
Blackbaud At-a-Glance Leading provider of software for powering social impact Essential software built to accelerate impact in fundraising, 40+ $100B+ nonprofit financial management, years serving industry with donated, granted, and digital giving, grantmaking, demonstrated track record invested thr
Slide 5: Key highlights
Key highlights Clear leader with durable business model in a large, resilient end market comprising over $480B in charitable giving in the US alone Executing a strategy to achieve Rule of 40 exiting 2023 and driving high-single digit to double-digit revenue growth with mid-30s Adjusted EBITDA margin
Slide 6: Business overview
Business overview
Slide 7: Blackbaud is the leading provider of software for powering social impact
Blackbaud is the leading provider of software for powering social impact We build, integrate and Using exclusive data, implement vertical-specific analytics and expertise, solutions purpose-built Cloud we deliver unparalleled for the unique needs of Software Data insight and intelligence to our cust
Slide 8: Our core competencies expand what is possible for purpose-driven organizations
Our core competencies expand what is possible for purpose-driven organizations Fundraising and Financial Grant and Award Organizational and Engagement Management Management Program Management Fundraising Fund Accounting Grantmaking Ticketing Peer-to-Peer Fundraising Financial Aid Management Award Ma
Slide 9: Most comprehensive solution set that accelerates impact
Most comprehensive solution set that accelerates impact • Blackbaud is the leading provider of software wholly dedicated to powering social impact 1 • Only Blackbaud offers a full portfolio of purpose-built, integrated solutions • Highly fragmented competition offers single-point solutions • Large c
Slide 10: Fueling accelerated impact for our customers
Fueling accelerated impact for our customers $4.3B 300K $400K goal for the Campaign for Carolina meals packed by employees for raised through a virtual chili cook-off exceeded a year early utilizing Rise Against Hunger using powered by JustGiving® from Blackbaud CRM YourCause® CSRconnect® Blackbaud®
Slide 11: Executing strategy with commitment to ESG
Executing strategy with commitment to ESG Environmental Social Governance Achieved carbon neutrality across Attract and retain top talent Joined UN Global Compact in 2021 operations and data centers for 2021 regardless of location with remote-first workforce strategy Created ESG Steering Committee w
Slide 12: Recognized as a leader in ESG actions and disclosures
Recognized as a leader in ESG actions and disclosures ESG Priorities Awards and Recognition We’re committed to strengthening the impact we make through the way we operate our business, setting high standards, and reporting with transparency on the efforts we are Disclosures and Frameworks making in
Slide 13: Large and underpenetrated total addressable market
Large and underpenetrated total addressable market Fundraising, Relationship Management and Engagement Revenue Penetration: <20% $3.5B Corporate Social Responsibility and ESG Payment Services $20B+ Revenue Penetration: <5% $11.5B $3.0B Revenue Penetration: <10% Blackbaud TAM $1.5B Financial Manageme
Slide 14: Proven history of double-digit recurring revenue and Adjusted EBITDA growth
Proven history of double-digit recurring revenue and Adjusted EBITDA growth 9% CAGR Recurring Revenue One-time Services & Other FY12-FY22 Total Revenue $1,058M • Recurring revenue represented 96% 13% CAGR FY12-FY22 Recurring Revenue of total revenue in 2022 • Execution of successful M&A $453M strate
Slide 15: Update on ongoing operational initiatives
Update on ongoing operational initiatives
Slide 16: Five key initiatives implemented last year showing early signs of success
Five key initiatives implemented last year showing early signs of success Product Bookings growth Transactional Modernized approach Keen attention innovation and acceleration revenue to pricing and multi- to cost optimization and year customer management expansion contracts 16
Slide 17: Adding substantial value for customers through innovation
Adding substantial value for customers through 1 1 innovation • SKY API endpoints now enable customers to seamlessly integrate complementary point solutions with our 9,000+ partners 3rd party developers on the SKY Developer Portal • Expanded partnerships unlock even more value for our customers thro
Slide 18: Strong Q1 bookings performance demonstrates end market resilience
Strong Q1 bookings performance demonstrates end 2 market resilience in challenging macro environment Significant Q1 bookings growth year over year, Select Q1 customer wins exceeding plan Total company pipeline coverage remains solid heading into Q2 Sales productivity per rep continues to increase –
Slide 19: Initiatives across resilient and diverse transactional revenue streams
Initiatives across resilient and diverse transactional 3 revenue streams drive continued consistent growth Transactional recurring revenue streams1 Transactional recurring revenue growth 5% 8% 8% 7% 8% Event-Based Usage 20% 2019 2020 2021 2022 Tuition Processing • Strong momentum in consumer giving
Slide 20: Renewal pricing initiative is well underway with strong early signs of success
Renewal pricing initiative is well underway with 4 strong early signs of success >50% • Modern approach to renewal pricing applies primarily to Social Sector contractual revenue base 2023 Total Company revenue expected to renew through 20261 • Renewal pricing changes went into effect March 2023 ~25%
Slide 21: Modernized renewal pricing provides better economics and visibility
Modernized renewal pricing provides better 4 economics and visibility PRIOR APPROACH NEW APPROACH Mix of annual and multi-year Primarily 3-year contract renewal terms Renewal Term renewal contracts Mid-single digit rate increase Mid- to high-teens rate increase Rate Increase at Renewal upon renewal
Slide 22: New renewal pricing approach provides compounding multi-year benefit
New renewal pricing approach provides compounding 4 multi-year benefit Illustration of revenue uplift for average 3-year renewal contract in 2023 (assuming 06/30/23 contract renewal date) Subsequent Contract Renewal - Partial Year = Partial Year Impact Impact = Full Year Impact Year 3 Embedded Escal
Slide 23: Contract renewal distribution creates sustainable longer-term growth
Contract renewal distribution creates sustainable 4 longer-term growth Mix of contracts eligible for renewal Illustration of revenue uplift for all contracts that renew under rate increase by renewal year1 new renewal pricing approach 2023 Renewal Cohort (from prior page) 2024 Renewal Cohort 2026 10
Slide 24: Keen attention to cost management will contribute to ongoing margin expansion
Keen attention to cost management will contribute 5 to ongoing margin expansion Headcount Actions IT Consolidation Spend Management Employees Data Center Closures Favorable renegotiation of key 3,600 4 vendor contracts, including Azure 3,200 3,100 2 and AWS 2022 2023 Reduced real estate footprint 20
Slide 25: Financial Outlook
Ws Financial Outlook ——_
Slide 26: Strong start to 2023 with accelerating sequential performance
Strong start to 2023 with accelerating sequential performance Initiative Q1 2023 Detail Organic revenue growth1 New partnerships and features driving growth 3.4% Product • New TeamRaiser Activity-Tracking innovation • Released SKY APIs for CRM and Altru 1.7% Significant year-over-year growth ahead o
Slide 27: Updated 2023 Total Company guidance
Updated 2023 Total Company guidance Expect accelerating growth and margin performance every quarter in 2023 What has changed since Prior guidance Current guidance prior guidance? • Strong bookings momentum Total revenue $1,080 - 1,110M $1,095 - 1,125M • Overperformance relative to plan and momentum
Slide 28: Expect accelerating growth in both 2023 and 2024
Expect accelerating growth in both 2023 and 2024 2022 2022 Organic Area 2023 Outlook 2024+ Outlook Revenue revenue growth Contractual High-single digit to low-double $709M 2% Mid-single digit growth recurring digit growth Transactional High-single digit to low- Sustainable mid-single digit to $303M
Slide 29: On track to achieve Rule of 40 exiting 2023
On track to achieve Rule of 40 exiting 2023 with sustainable improvement expected in 2024 and beyond 2023 2023 exit 2022 2024+ Drivers of sustained Rule of 40 improvement (midpoint) rate Organic High-single • Pricing initiatives drive multi-year High-single compounding impact to primarily Social rev
Slide 30: Cash flow generation and capital allocation
Cash flow generation and capital allocation Non-GAAP adjusted free cash flow1 $200 $168 $154 $78 • We remain committed to reducing net leverage to our ~2.0x target in the near-term through both cash flow generation and adjusted EBITDA growth 2020 2021 2022 2023 • Over time, we expect to resume share
Slide 31: Appendix
Appendix
Slide 32: Historical Reconciliations of GAAP and Non-GAAP Organic Revenue Growth
Historical Reconciliations of GAAP and Non-GAAP Organic Revenue Growth (Unaudited) 32
Slide 33: Reconciliations of Non-GAAP Organic Revenue Growth and Rule of 40
Reconciliations of Non-GAAP Organic Revenue Growth and Rule of 40 (Unaudited) 33
Slide 34: Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) 34
Slide 35: Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) 35
Slide 36: Historical Consolidated Balance Sheets (Unaudited)
Historical Consolidated Balance Sheets (Unaudited) 36
Slide 37: Historical Consolidated Statements of Comprehensive Income (Unaudited)
Historical Consolidated Statements of Comprehensive Income (Unaudited) 37 Note 1: The individual amounts for each quarter may not sum to full year totals due to rounding.
Slide 38: Historical Consolidated Statements of Cash Flows (Unaudited)
Historical Consolidated Statements of Cash Flows (Unaudited) 38 Note 1: The individual amounts for each quarter may not sum to full year totals due to rounding.
Slide 39: Historical Reconciliations of GAAP to Non-GAAP Financial Measures
Historical Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) 39
Slide 40: Historical Reconciliations of GAAP to Non-GAAP Financial Measures
Historical Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) 40
Slide 41: Thank you
blackbaud Thank you