Slide 1: Blackbaud Investor Presentation
Blackbaud Investor Presentation Ticker: BLKB August 2, 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 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 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: 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 12: 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 13: 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 • Multiple levers to drive meaningful $453
Slide 14: Update on ongoing operational initiatives
Update on ongoing operational initiatives
Slide 15: 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 and acceleration revenue to pricing and multi- to cost delivery optimization and year customer management expansion contracts 15
Slide 16: Adding substantial value for customers through innovation
Adding substantial value for customers through 1 innovation Launched next generation Intelligence for Good® strategy with an extensive agenda of initiatives and investments targeted at making artificial intelligence more accessible, powerful and responsible across the social impact sector July 2023
Slide 17: Solid year to date bookings performance demonstrates end market resilience
Solid year to date bookings performance 2 demonstrates end market resilience Remain focused on signing new logos as well as upsell and cross-sell opportunities 17
Slide 18: 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 19: 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 20: 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 Subsequent Contract Renewal - Partial Year = Partial Year Impact Impact = Full Year Impact Year 3 Embedded Escalator - Year 2 & 3 Embedded Partial Year Im
Slide 21: Contract renewal distribution creates sustainable longer-term growth
Contract renewal distribution creates sustainable 4 longer-term growth Nearly 70% of 2023 cohort has renewed as of July, however less than Mix of contracts eligible for renewal 25% of the total revenue opportunity has been recognized in Q2. rate increase by renewal year1 Revenue uplift from 2023 coh
Slide 22: 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 3.6k 4 vendor contracts, including Azure 3.2k 3.0k 2 and AWS 2022 2023 Reduced real estate footprint 2021
Slide 23: Financial Outlook
Ww - Financial Outlook —_
Slide 24: Solid Q2 2023 with significant margin expansion
Solid Q2 2023 with significant margin expansion Rule of 40 Year over Year1 36.1% 31.9% Q2 2022 Contractual Transactional One-time Q2 2023 Revenue Recurring Revenue Services & Revenue Other Revenue Q2 2022 Q2 2023 Revenue Contractual • Renewal pricing initiative continues to perform well Rule of 40 H
Slide 25: 2023 total company increased guidance
2023 total company increased guidance Expect accelerating financial performance every quarter in 2023 Metric Mid-Point Anticipating organic revenue growth rate in the mid-single digits with pricing initiatives across every revenue Total Revenue $1,095M - $1,125M $1,110M stream Near-term focus on pri
Slide 26: 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 27: 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 28: Cash flow generation and capital allocation
Cash flow generation and capital allocation Non-GAAP adjusted free cash flow1 $200 $168 $154 $78 • We intend to reduce 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 repurchases
Slide 29: Appendix
Appendix
Slide 30: Historical Reconciliations of GAAP and Non-GAAP Organic Revenue Growth
Historical Reconciliations of GAAP and Non-GAAP Organic Revenue Growth (Unaudited) (dollars in thousands) Six months ended Three months ended Year ended Three months ended 06/30/2023 06/30/2022 06/30/2023 03/31/2023 12/31/2022 12/31/2022 09/30/2022 06/30/2022 03/31/2022 GAAP revenue $ 532,795 $ 522,
Slide 31: 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 Six months ended 06/30/2023 06/30/2022 06/30/2023 06/30/2022 GAAP net income $ 2,105 $ (3,422) $ (12,596) $ (13,829) Non-GAAP adjustments: Add: Interest, net 8,859 8,862 18,285 16,
Slide 32: Reconciliation of GAAP to Non-GAAP Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, 2023 Amortization of Stock-based intangibles from Acquisition and Security Incident- Non-GAAP compensation business Employee disposition-related related costs, net adjustments (in thousan
Slide 33: Reconciliation of GAAP to Non-GAAP Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Six Months Ended June 30, 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 34: Reconciliation of GAAP to Non-GAAP Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, 2022 Amortization of Impairment of Stock-based intangibles from Acquisition and Security Incident- capitalized Non-GAAP compensation business Employee disposition-related related costs, n
Slide 35: Reconciliation of GAAP to Non-GAAP Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Six Months Ended June 30, 2022 Amortization of Impairment of Stock-based intangibles from Acquisition and Restructuring and Security Incident- capitalized Non-GAAP compensation business Employee disposition-related
Slide 36: Historical Consolidated Balance Sheets
Historical Consolidated Balance Sheets (Unaudited) (in thousands) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Assets Current assets: Cash and cash equivalents $ 33,786 $ 29,029 $ 31,413 $ 31,691 $ 24,083 $ 29,041 Restricted cash 279,594 449,491 343,928 702,240 364,071 761,289 Accounts receivable
Slide 37: 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 Revenue Recurring $ 244,666 $ 252,507 $ 249,387 $ 265,173 $ 1,011,733 $ 252,748 $ 262,390 One-time services and other 12,4
Slide 38: 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 (in thousands) 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 Cash flows from operating activities Net loss $ (10,407) $ (13,829) $ (2
Slide 39: 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 GAAP Revenue $ 257,124 $ 264,927 $ 261,297 $ 274,757 $ 1,058,105 $ 261,753 $ 271,042 GAAP gross profit $ 133,762
Slide 40: 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 (in thousands) 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 06/30/2023 GAAP net cash provided by operating activities 24,504
Slide 41: Thank you
blackbaud Thank you