Blackbaud, Inc. · NASDAQ:BLKB
Blackbaud — Q3 2024 Earnings Presentation
42 slides from Blackbaud's earnings presentation, Oct 30, 2024
Slide 1: Blackbaud Investor Presentation
Blackbaud Investor Presentation Ticker: BLKB October 30, 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 Pillars
Blackbaud Investment Pillars Rich Market Innovation Driving Attractive Financial Purposeful Capital Opportunity Product Value Model Allocation • Global market leadership • AI empowering customers • 5 point operating plan • Material share repurchase driving organizational focus program (up to 10%
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 12% CAGR FY13-FY23 Recurring Revenue • Recurring revenue represented 97% $505M of total revenue in 2023 • Multiple levers to drive meaningful g
Slide 13: Update on operational initiatives
Update on operational initiatives
Slide 14: Operating plan driving improved financial performance
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 bbcon 2024: UBIQ Strategic Raiser’s Edge NXT® 6 Waves of Innovation Investment Enhancements From groundbreaking fundraising AI tools Focus of the investment will be on In April 2024, announced a major wave of to new int
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 9/30/24 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 Revenue uplift from 2023 cohort more than rate increase by renewal year1 doubles in 2024 >2x increase 100% 100% 100% 100% 2026 ~85% 10% 2023 2025 35% ~60% (Completed) 25% 2024 ~25% 30% (Under
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 Non-GAAP adjusted EBITDA Drivers of continued margin improvement: $450 50.0% • Intend to manage headcount at current levels for $400 $387M foreseeable future 45.0% $356M $350 • Fall-through benefit from renewal price inc
Slide 21: Financial Outlook
Ww - Financial Outlook —_
Slide 22: Solid Q3 2024 Performance
Solid Q3 2024 Performance Revenue Year over Year Rule of 40 Year over Year1 +400bps +340bps 39.6% 39.3% 35.6% 35.9% Social Sector: Social Sector: Social Sector: Q3 One-time Corporate Q3 Contractual Transactional 2023 Services & Sector 2024 Recurring Recurring Other YTD 2023 YTD 2024 YTD 2023 YTD 202
Slide 23: 2024 total company guidance
2024 total company guidance Revised October 30, 2024 Metric Guidance Range Mid-Point Total Revenue $1,150M - $1,160M $1,155M Adjusted EBITDA Margin 33.0% - 34.0% 33.5% Diluted EPS $3.98 - $4.16 $4.07 Adjusted Free Cash Flow $235M - $245M $240M Non-GAAP. Assumptions included in full year 2024 financi
Slide 24: Revenue growth rate disaggregation
Revenue growth rate disaggregation Revenue Growth Rate Revenue Mix 2022 2023 2024 2023 Actual Actual Actual Estimate4 Contractual Recurring 55% 2% 4%2 ~8% Transactional Recurring 29% 7% 11%2 ~7% One-time Services & Other 2% (30%) (29%)2 ~(5%) Subtotal: Social Sector 86% 2% 5%2 ~7% Corporate Sector 1
Slide 25: Operating plan drives continued financial improvement
Operating plan drives continued financial improvement 2022 2023 2024 Guidance Midpoint Drivers of sustained Rule of 40 improvement Product delivery & Organic innovation revenue 2.7% 4.8% 5.2% growth Bookings growth & acceleration Adjusted EBITDA 24.8% 32.2% 33.5% Transactional revenue margin optimiz
Slide 26: Significant, sustainable adjusted free cash flow growth expected to continue in 2024
Significant, sustainable adjusted free cash flow growth in 2023 expected to continue in 2024 Non-GAAP adjusted free cash flow1 50.0% $250 $240M 45.0% $214M 40.0% $200 $168M 35.0% $154M $150 30.0% 20.8% 25.0% 18.1% 19.3% $100 20.0% $78M 14.5% 150bps improvement in adjusted free cash 15.0% 8.5% flow m
Slide 27: Blackbaud intends to repurchase up to 10% of outstanding stock in 2024
Blackbaud intends to repurchase up to 10% of outstanding stock in 20241 54.0M 53.9M 53.9M 53.6M • Through October Blackbaud has 51.6M 51.6M 18 repurchased approximately 52.0M 50.9M ~8% of the common stock outstanding at the end of 50.0M 13 2023 48.0M • In July, Blackbaud’s board of 8 directors appro
Slide 28: 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 Up to 10% repurchase expected in Target acquisition opportunities with Manage debt balance to maintain 2024 under $800M authorization high synergy value and a focus on optimal
Slide 29: Blackbaud Investment Pillars
Blackbaud Investment Pillars Rich Market Innovation Driving Attractive Financial Purposeful Capital Opportunity Product Value Model Allocation • Global market leadership • AI empowering customers • 5 point operating plan • Material share repurchase driving organizational focus program (up to 10%
Slide 30: Appendix
Appendix
Slide 31: Historical Reconciliations of GAAP and Non-GAAP Organic Revenue Growth
Historical Reconciliations of GAAP and Non-GAAP Organic Revenue Growth (Unaudited) (dollars in thousands) Nine months ended Three months ended Year ended Three months ended 09/30/2024 09/30/2023 09/30/2024 06/30/2024 03/31/2024 12/31/2023 12/31/2023 09/30/2023 06/30/2023 03/31/2023 GAAP revenue $ 85
Slide 32: 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 Nine months ended 09/30/2024 09/30/2023 09/30/2024 09/30/2023 GAAP net income $ 20,542 $ 9,017 $ 47,592 $ (3,579) Non-GAAP adjustments: Add: Interest, net 11,022 6,608 32,150 24,89
Slide 33: Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Three Months Ended September 30, 2024 Amortization of Stock-based intangibles from Acquisition and Non-GAAP compensation business Employee disposition-related Security Incident- adjustments (in thousands, except per
Slide 34: Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Nine Months Ended September 30, 2024 Amortization of Stock-based intangibles from Acquisition and Non-GAAP compensation business Employee disposition-related Security Incident- adjustments (in thousands, except per
Slide 35: Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Three Months Ended September 30, 2023 Amortization of Stock-based intangibles from Acquisition and Non-GAAP compensation business Employee disposition-related Security Incident- adjustments (in thousands, except per
Slide 36: Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Nine Months Ended September 30, 2023 Amortization of Stock-based intangibles from Acquisition and Non-GAAP compensation business Employee disposition-related Security Incident- adjustments (in thousands, except per
Slide 37: Historical Consolidated Balance Sheets (Unaudited)
Historical Consolidated Balance Sheets (Unaudited) (in thousands) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Assets Current assets: Cash and cash equivalents $ 24,083 $ 29,041 $ 31,091 $ 31,251 $ 26,376 $ 30,438 $ 34,633 Restricted cash 364,071 761,289 359,596 697,006 356,493 800,670 42
Slide 38: Historical Consolidated Statements of Comprehensive Income (Unaudited)
Historical Consolidated Statements of Comprehensive Income (Unaudited) (in thousands, except share and per share amounts) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Revenue Recurring $ 252,748 $ 262,390 $ 269,001 $ 287,381 $ 1,071,520 $ 271,518 $ 281,376 $ 280,018 One-time servi
Slide 39: Historical Consolidated Statements of Cash Flows (Unaudited)
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 (in thousands) 3/31/2023 6/30/2023 9/30/2023 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Cash flows from operating activities Net (loss)
Slide 40: 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 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023(1) Q1 2024 Q2 2024 Q3 2024 GAAP Revenue $ 261,753 $ 271,042 $ 277,626 $ 295,011 $ 1,105,432 $ 279,250 $ 287,286 $ 286,727 GAAP gros
Slide 41: 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 (in thousands) 3/31/2023 6/30/2023 9/30/2023 12/31/2023 3/31/2024 06/30/2024 09/30/2024 GAAP net cash provided by op
Slide 42: Thank you
blackbaud Thank you