Slide 1: Blackbaud Investor Presentation
Blackbaud Investor Presentation Ticker: BLKB March 4, 2024
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 amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this presentation consist of, among other th
Slide 3: Historical Financials and Non-GAAP Financial Measures
Historical Financials and Non-GAAP Financial Measures Use of Non-GAAP Financial Measures: The Company has provided in this presentation financial information that has not been prepared in accordance with GAAP. The Company uses these non-GAAP financial measures internally in analyzing its financial r
Slide 4: Blackbaud Investment Highlights
Blackbaud Investment Highlights Clear market leader with the most comprehensive solution set of purpose-built and mission critical software and services powering social impact A Rule of 40 company with strong cash flow experiencing an inflection point in financial performance Executing on 5-point op
Slide 5: Blackbaud At-a-Glance
Blackbaud At-a-Glance Clear market leader providing software that powers social impact Mission critical software built to accelerate impact in fundraising, nonprofit 40+ $100B+ financial management, digital giving, years serving industry with donated, granted, and grantmaking, corporate social demon
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 event exceeded a year early utilizing Rise Against Hunger using powered by JustGiving® from Blackbaud CRM YourCause® CSRconnect® Blackbaud® Peer-to-
Slide 11: Large and underpenetrated total addressable market $20B+
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: <20% Blackbaud TAM $1.5B Financial Manageme
Slide 12: Record of delivering strong recurring revenue and adjusted EBITDA growth
Record of delivering strong recurring revenue and adjusted EBITDA growth 8% CAGR Recurring Revenue One-time Services & Other FY13-FY23 Total Revenue $1,105M • Recurring revenue represented 97% 12% CAGR FY13-FY23 Recurring Revenue of total revenue in 2023 • Multiple levers to drive meaningful $505M g
Slide 13: Update on operational initiatives
Update on operational initiatives
Slide 14: Five point operating plan driving improved financial performance
Five point operating plan driving improved financial performance Product Bookings growth Transactional Modernized approach Keen attention Innovation and and acceleration revenue to pricing and multi- to cost delivery optimization and year customer management expansion contracts 14
Slide 15: Adding substantial value for customers through product delivery and innovation
Adding substantial value for customers through 1 product delivery and innovation Optimized Donation Prospect Insights Pro for Impact EdgeTM Forms Raiser’s Edge NXT® New donation forms that fully integrate New add-on capability within Raiser’s Edge A first-of-its-kind AI-powered, social impact with B
Slide 16: Direct sales force focused on signing new logos as well as upsell and cross-sell
Direct sales force focused on signing new logos as 2 well as upsell and cross-sell opportunities Select recent sales wins across Social Sector and Corporate Sector end markets Note: Sample of sales wins in trailing twelve months ended 12/31/23 16
Slide 17: 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% 10% Event-Based 8% Usage 7% 8% 8% 20% Tuition 2019 2020 2021 2022 2023 Processing 55% Donation • Strong moment
Slide 18: Modernized renewal pricing provides better economics and visibility
Modernized renewal pricing provides better 4 economics and visibility PRIOR APPROACH NEW APPROACH (since March 2023) 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
Slide 19: Contract renewal distribution creates sustainable longer-term growth
Contract renewal distribution creates sustainable 4 longer-term growth Mix of contracts eligible for renewal 2023 renewal cohort now complete; Revenue uplift from 2023 cohort rate increase by renewal year1 more than doubles in 2024 >2x increase 100% 100% 100% 100% 2026 ~85% 10% 2023 2025 35% ~60% (C
Slide 20: 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 Data Center Closures Employees Favorable renegotiation of key 3.6k 4 vendor contracts, including Azure 3.2k 3.0k 2 2 and AWS 2021 2022 Current 2022 2023 Remaining to Re
Slide 21: Financial Outlook
Financial Outlook (updated 3/4/2024)
Slide 22: Significant YoY improvement in Q4 2023
Significant YoY improvement in Q4 2023 Rule of 40 Year over Year1 +1,590bps +1,380bps 41.0% 40.4% 25.1% 26.6% Social Sector: Social Sector: Social Sector: Q4 One-time Corporate Q4 Contractual Transactional 2022 Services & Sector 2023 Recurring Recurring Other Q4 2022 Q4 2023 Q4 2022 Q4 2023 Revenue
Slide 23: 2024 total company guidance
2024 total company guidance (issued 2/12/2024) Metric Mid-Point 7.2% organic revenue growth rate, up from 4.8% in 2023. Social Sector growing high single to low double digits, offset by Total Revenue $1,170M - $1,200M $1,185M decline in Corporate Sector 33.0% adjusted EBITDA margin is 80bps improvem
Slide 24: Revenue growth rate disaggregation
Revenue growth rate disaggregation Revenue Growth Rate Revenue Mix 2022 2023 2024 Commentary 2023 Actual Actual Actual Estimate3 Improvement driven by sales bookings, standard renewal price increases and Contractual Recurring 55% 2% 4%2 ~10% modernized approach to renewal pricing launched in March 2
Slide 25: Expected 2024 revenue growth contribution from Social Sector renewal pricing
Expected 2024 revenue growth contribution from Social Sector renewal pricing and contract terms1 • At the midpoint of 2024 financial guidance, the Company expects 2024 Revenue Growth at Guidance Midpoint approximately half of total revenue growth to come from Social Sector renewal pricing and contra
Slide 26: Strong non-GAAP adjusted EBITDA margin expansion
Strong non-GAAP adjusted EBITDA margin expansion • Five-point operating plan drove 740 basis points of adjusted EBITDA margin expansion in 2023 Non-GAAP Adjusted EBITDA Margin • 2024 guidance is inclusive of a material, one-time +280bps ~35% step up in expense that will accelerate the Accelerated co
Slide 27: Sustained Rule of 40 performance in FY24
Sustained Rule of 40 performance in FY24 2022 2023 2024 Guidance Midpoint Drivers of sustained Rule of 40 improvement Product delivery & Organic innovation revenue 2.7% 4.8% 7.2% growth Bookings growth & acceleration Adjusted EBITDA 24.8% 32.2% 33.0% Transactional revenue margin optimization & expan
Slide 28: Significant, sustainable adjusted free cash flow growth
Significant, sustainable adjusted free cash flow growth in 2023 expected to continue in 2024 Non-GAAP adjusted free cash flow1 $300 50.0% $264M 45.0% $250 40.0% $214M 35.0% $200 $168M 30.0% $154M $150 22.3% 25.0% 18.1% 19.3% 20.0% $100 14.5% $78M 15.0% 8.5% 300bps improvement in adjusted free 10.0%
Slide 29: Blackbaud intends to repurchase between 7% and 10% of outstanding stock in 2024
Blackbaud intends to repurchase between 7% and 10% of outstanding stock in 20241 • Since December 2023 Blackbaud has repurchased $77M of $36M outstanding common stock, of which $41 million was repurchased prior to the expansion and replenishment of the board authorization on January 17th, with the r
Slide 30: Long-term capital allocation strategy focused on maximizing shareholder value
Long-term capital allocation strategy focused on maximizing shareholder value Stock Accretive Debt Repurchases M&A Repayment 7% to 10% repurchase in 2024 under Target acquisition opportunities with Manage debt balance to maintain $500M authorization high synergy value and a focus on optimal capital
Slide 31: Blackbaud Investment Highlights
Blackbaud Investment Highlights Clear market leader with the most comprehensive solution set of purpose-built and mission critical software and services powering social impact A Rule of 40 company with strong cash flow experiencing an inflection point in financial performance Executing on 5-point op
Slide 32: Appendix
Appendix
Slide 33: Historical Reconciliations of GAAP and Non-GAAP Organic Revenue Growth
Historical Reconciliations of GAAP and Non-GAAP Organic Revenue Growth (Unaudited) (dollars in thousands) Years ended Three months ended Year ended Three months ended 12/31/2023 12/31/2022 12/31/2023 09/30/2023 06/30/2023 03/31/2023 12/31/2022 12/31/2022 09/30/2022 06/30/2022 03/31/2022 GAAP revenue
Slide 34: Reconciliations of Non-GAAP Organic Revenue Growth and Rule of 40
Reconciliations of Non-GAAP Organic Revenue Growth and Rule of 40 (Unaudited) (dollars in thousands) Three months ended Years ended 12/31/2023 12/31/2022 12/31/2023 12/31/2022 GAAP net income $ 5,399 $ (21,259) $ 1,820 $ (45,407) Non-GAAP adjustments: Add: Interest, net 6,208 9,053 31,101 34,057 Add
Slide 35: Reconciliation of GAAP to Non-GAAP Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Three Months Ended December 31, 2023 Amortization of Stock-based intangibles from Acquisition and Security Incident- Non-GAAP compensation business Employee disposition-related related costs, net adjustments (in tho
Slide 36: Reconciliation of GAAP to Non-GAAP Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Year Ended December 31, 2023 Amortization of Stock-based intangibles from Acquisition and Security Incident- Non-GAAP compensation business Employee disposition-related related costs, net adjustments (in thousands,
Slide 37: Reconciliation of GAAP to Non-GAAP Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Three Months Ended December 31, 2022 Amortization of Stock-based intangibles from Acquisition and Security Incident- Non-GAAP compensation business Employee disposition-related related costs, net adjustments (in tho
Slide 38: Reconciliation of GAAP to Non-GAAP Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Year Ended December 31, 2022 Amortization of Impairment of Stock-based intangibles from Acquisition and Restructuring and Security Incident- capitalized Non-GAAP compensation business Employee disposition-related ot
Slide 39: Historical Consolidated Balance Sheets
Historical Consolidated Balance Sheets (Unaudited) (in thousands) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Assets Current assets: Cash and cash equivalents $ 33,786 $ 29,029 $ 31,413 $ 31,691 $ 24,083 $ 29,041 $ 31,091 $ 31,251 Restricted cash 279,594 449,491 343,928 702,240 3
Slide 40: Historical Consolidated Statements of Comprehensive Income
Historical Consolidated Statements of Comprehensive Income (Unaudited) (in thousands, except share and per share amounts) Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Revenue Recurring $ 244,666 $ 252,507 $ 249,387 $ 265,173 $ 1,011,733 $ 252,748 $ 262,390 $ 269,00
Slide 41: Historical Consolidated Statements of Cash Flows
Historical Consolidated Statements of Cash Flows (Unaudited) 3 months ended 6 months ended 9 months ended 12 months ended 3 months ended 6 months ended 9 months ended 12 months ended (in thousands) 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Cash flows from oper
Slide 42: Historical Reconciliations of GAAP to Non-GAAP Financial Measures
Historical Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) (in thousands, except share and per share amounts) Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022(1) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023(1) GAAP Revenue $ 257,124 $ 264,927 $ 261,297 $ 274,757 $ 1,058,105 $ 261,753 $ 271,042
Slide 43: Historical Reconciliations of GAAP to Non-GAAP Financial Measures
Historical Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) 3 months ended 6 months ended 9 months ended 12 months ended 3 months ended 6 months ended 9 months ended 12 months ended (in thousands) 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 06/30/2023 09/30/2023 12/31/2023 G
Slide 44: Thank you
blackbaud Thank you