Blackbaud, Inc. · NASDAQ:BLKB
Blackbaud — Investor Presentation (April 2015)
28 slides from Blackbaud's investor presentation, April 2015
Slide 1: Blackbaud Investor Presentation
BLACKBAUD INVESTOR PRESENTATION TICKER: BLKB APRIL 2015
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* Strengthened 3 management team with focused execution
Slide 4: Agenda
AGENDA The Business Today Key Differentiators Strategies for Growth Financials 4
Slide 5: 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 over 80 million households • 30,000+ leading organizations in the worldwide giving market use one or more of Blackbaud’s solutions 5
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: TAM Is Large, Under-Penetrated and Growing
TAM IS LARGE, UNDER-PENETRATED AND GROWING Largest market segments are expected to have significant future growth 2014 E2017 Total $5.4B Total $6.7B ($M) Philanthropic Giving $750 < 10% CRM $635 CRM $935 < 25% (+6% CAGR) Data & Analytics $565 $1,115 < 20% $475 Program / Mission $185 Total $185 < 5%
Slide 8: Strong Revenue Growth Accompanied by Positive Shift in Mix 2005 to 2014
STRONG REVENUE GROWTH ACCOMPANIED BY POSITIVE SHIFT IN MIX FROM 2005 TO 2014 While total revenue … Mix has dramatically has grown 3.5X … shifted $571M Recurring revenue % of Up 1.5x 3.5x total to 73% Subscription $166M revenue % of Up 11x total to 47% 2005 2014 1Q15 Revenue: Recurring > 75% Subscrip
Slide 9: Agenda
AGENDA The Business Today Key Differentiators Strategies for Growth Financials 9
Slide 10: Uniquely Positioned Today in the Industry
UNIQUELY POSITIONED TODAY IN THE INDUSTRY HORIZONTAL VERTICAL / APPS* NICHE Vertically tailored solutions focused exclusively on the giving market x Domain knowledge in sales, services and product teams Product breadth / depth x x Domain expertise in all giving market verticals x Smart cloud
Slide 11: Full Suite of Integrated Cloud-Based Solutions Extends Competitive Advantage
FULL SUITE OF 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 e
Slide 12: Agenda
AGENDA The Business Today Key Differentiators Strategies for Growth Financials 12
Slide 13: 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 * Based on 2014 - 2017 long-term aspiration
Slide 14: 1. Accelerating Organic Revenue Growth
1. ACCELERATING ORGANIC REVENUE GROWTH Integrated analytics, mobile and online into CRM Integrating payment solutions into portfolio 6% - 10% Shifting EdgeTM products to cloud-based subscription model Future organic growth* New, improved online solutions Continuous innovation and upgrade o
Slide 15: 2. Accelerating Move to the Cloud
2. ACCELERATING MOVE TO THE CLOUD Subscription / Cloud Revenue $267M Recent acquisitions – cloud-based solutions Shifting Edge products to subscription model Integrated suite of solutions and cross-selling 50% Subscription is driving higher revenue per customer CAGR New subscription pricing
Slide 16: 3. Expanding TAM Through Tuck-In and Strategic Acquisitions
3. EXPANDING TAM THROUGH TUCK-IN AND STRATEGIC ACQUISITIONS Acquisitions aligned with strategic criteria Expands New and improved Accelerates Drives accelerated Leverage = TAM solutions shift to cloud growth profitability gain EverydayHero Convio WhippleHill MicroEdge
Slide 17: 4. Optimizing Back-Office Infrastructure
4. OPTIMIZING BACK-OFFICE INFRASTRUCTURE Largely completed in 2014 Sales 9 applications to 1 platform Results Marketing 7 applications to 1 platform Professional Services 5 applications to 1 platform Expand margins on accelerated growth Travel & Expense Manual to Automated platform Improve speed
Slide 18: 5. Executing a 3 Year Margin Improvement Plan
5. EXECUTING A 3 YEAR MARGIN IMPROVEMENT PLAN *2015 Guidance 18.4% Up 80 bps 2014 Actual 17.8% Up 20 bps 20.5%–23.5%* Reduced G&A Productivity and customer gains in R&D support costs Professional services Operational improvement 17.6% excellence and quality 2014 non- initiatives recurring investment
Slide 19: Agenda
AGENDA The Business Today Key Differentiators Strategies for Growth Financials 19
Slide 20: Consistent Long-Term Revenue Growth
CONSISTENT LONG-TERM REVENUE GROWTH $635M* $571M Key Drivers Large and growing TAM 15% Revenue High retention rates CAGR Actual Innovation – new solutions, features and functionality Market shift to online $166M Capturing payments business Expansion of Analytics and BI Tuck-in and stra
Slide 21: Faster Growth in Recurring Revenue
FASTER GROWTH IN RECURRING REVENUE Strong Mix of Recurring High Growth in Revenue 2014 Recurring Revenue $417M 24% 20% Recurring CAGR Actual 73% 3% Recurring $78M Recurring Licenses Services and Other 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q15 Recurring Revenue > 75% 21
Slide 22: Significant Subscription Revenue Growth
SIGNIFICANT SUBSCRIPTION REVENUE GROWTH Subscription Revenue Key Drivers $267M Launch of Edge NXT Cloud-based solutions in 2nd half of 2015 Continued growth from cloud-based 50% subscription offerings Subscription CAGR Market shift to online Actual Multiple solutions leads to higher retentai
Slide 23: Strong EPS Growth
STRONG EPS GROWTH Non-GAAP Diluted EPS $1.43* $1.27 100%+ EPS Actual Growth $0.63 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 E2015 * 2015 guidance, at the midpoint, issued 4/29/15 Note: This slide contains forward-looking statements and we refer you to our notice on slide 2. 23
Slide 24: 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 Operating Maintain Strong Balance Sheet Cash Flow of • Cash
Slide 25: 2015 Financial Guidance
2015 FINANCIAL GUIDANCE Increasing momentum with double-digit growth at the mid-point Growth FX Impact Non-GAAP Revenue $625 million - $645 million Up 11% $8M-$9M Non-GAAP Operating Income $112 million - 118 million Up 13% $2M-$3M Non-GAAP Operating Margin 17.9% - 18.3% Up 30 bps ~30 bps Non-GAAP Di
Slide 26: Long-Term Aspirational Goals
LONG-TERM ASPIRATIONAL GOALS* Benchmarks FY 2014 Q1 2015* E2017 Non-GAAP 7.1% 9.7% 6% - 10% Organic Revenue Growth Non-GAAP 17.8% 17.8% 20.5% - 23.5% Operating Margin Aggregate Cash Flow from $400M - $450M Operations 2014 - 2017 * 2014 – 2017 long-term aspirational financial goals; issued 9/12/14, b
Slide 27: Gaining Momentum: Refocused to Accelerate Growth and Performance
GAINING MOMENTUM: REFOCUSED 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 • Refocused on driving improved shareholder perfo
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