Slide 1: Investor Presentation
INVESTOR PRESENTATION July 31, 2013
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT Except for historical information, all of the statements, expectations, and assumptions contained in this presentation are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not
Slide 3: Blackbaud Today: Powering the Business of Philanthropy
BLACKBAUD TODAY: POWERING THE BUSINESS OF PHILANTHROPY FROM FUNDRAISING TO OUTCOMES Global company Large and Broad suite focused on Strong Convio diverse of nonprofit financial acquisition customer applications & software profile base solutions solutions • All verticals 2012: • Creates one of >28,00
Slide 4: Market Leader. Long Growth Runway.
WHY INVEST MARKET LEADER. LONG GROWTH RUNWAY. THE Early stages of serving a $16.5B market OPPORTUNITY THE Broadest and deepest product suite designed POSITIONING specifically for nonprofit organizations THE Attractive combination of scale, recurring revenue, PERFORMANCE growth, profitability and cas
Slide 5: Early Stages of Addressing a $16.5B Opportunity
EARLY STAGES OF ADDRESSING A $16.5B OPPORTUNITY Addressable Global Blackbaud’s Market Segments Market Opportunity Dollar Penetration ENTERPRISE $8.0B <2% • Target: 4,000 orgs • Existing: ~1,500 customers MID-MARKET $8.0B <4% • Target: 100,000+ orgs • Existing: ~22,500 customers LOW-END $0.5B <4% • T
Slide 6: Why Invest in Blackbaud?
WHY INVEST IN BLACKBAUD? THE Early stages of serving a $16.5B market OPPORTUNITY THE Broadest and deepest product suite designed POSITIONING specifically for nonprofit organizations THE Attractive combination of scale, recurring revenue, PERFORMANCE growth, profitability and cash flow THE Long growt
Slide 7: Nonprofits Have Unique Needs Requiring Tailored Software and Services
NONPROFITS HAVE UNIQUE NEEDS REQUIRING TAILORED SOFTWARE AND SERVICES Unique needs • Supporter relationship journey – supporters don’t fit into a sales pipeline, they serve their cause in many ways Blackbaud delivers • Program mission / delivery tailored software – nonprofits don’t deliver “units”,
Slide 8: Blackbaud Provides Broadest Array of Solutions
BLACKBAUD PROVIDES BROADEST ARRAY OF SOLUTIONS Ticketing management Event Student information management systems Internet Data analysis and fundraising reporting tools Financial data and Online interactive donor integration Tailored software communities and services Cost Campaign accounting results
Slide 9: Convio Expands Our Product Offering Even Further
CONVIO EXPANDS OUR PRODUCT OFFERING EVEN FURTHER • Market leader in CRM • Leader in online capabilities fundraising solutions • Financial strength • Best-in-class SaaS and scale capabilities • 26,000 customers, • 1,500 customers vertical expertise • Comprehensive solution to make multi-channel suppo
Slide 10: Uniquely Positioned in Fragmented Industry
UNIQUELY POSITIONED IN FRAGMENTED INDUSTRY Horizontal Apps1 Ellucian Vertical/Niche Vertically tailored, comprehensive suite of solutions for NPO X Modern technology X Product breadth/depth X X Address all NPO verticals X X Integrated marketing capabilities, online/offline, X X leverage a common dat
Slide 11: Why Invest in Blackbaud?
WHY INVEST IN BLACKBAUD? THE Early stages of serving a $16.5B market OPPORTUNITY THE Broadest and deepest product suite designed POSITIONING specifically for nonprofit organizations THE Attractive combination of scale, recurring revenue, PERFORMANCE growth, profitability and cash flow THE Long growt
Slide 12: Attractive Performance Profile
ATTRACTIVE PERFORMANCE PROFILE 1 Consistent long-term revenue growth + 2 Growing recurring revenue stream + 3 Diversified revenue streams + 4 Strong profitability + 5 Powerful cash flow 12
Slide 13: 1. Consistent Track Record of Growth
1. CONSISTENT TRACK RECORD OF GROWTH Revenue $M $600 $498M-$504M* 15% $500 CAGR $400 $300 $166M $200 $100 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013E Maintenance Subscription Services, license, other *FY13 guidance as of 7/31/13 13
Slide 14: 2. Fast Growing Recurring Revenue Stream
2. FAST GROWING RECURRING REVENUE STREAM Mix of Revenue… Consistent, Solid Growth (2012 breakdown) (recurring revenue) $302M 30% Maintenance 21% CAGR Services 27% $78M 37% 4% Subscription Licenses 2% Other 2005 2006 2007 2008 2009 2010 2011 2012 14
Slide 15: 3. Diversified Revenue Streams
3. DIVERSIFIED REVENUE STREAMS Revenue by Revenue by Vertical* Business Unit* International(1) Other Healthcare 9% 14% 21% Faith-Based Enterprise 6% Customer 45% Family & 19% 20% Higher Human Services 46% Education General 8% 12% Markets Arts & K-12 Cultural Schools 1. Excludes Canada which is repor
Slide 16: 4. Track Record of Generating Strong Non-GAAP Operating Income
4. TRACK RECORD OF GENERATING STRONG NON-GAAP OPERATING INCOME $99M-$102M* $45.7M 2005 2006 2007 2008 2009 2010 2011 2012 2013 *FY13 guidance as of 7/31/13 16
Slide 17: 5. Record of Using Strong Cash Flow to Enhance Shareholder Value
5. RECORD OF USING STRONG CASH FLOW TO ENHANCE SHAREHOLDER VALUE Cash Flow • 2012 CFFO margin of 16% Dividend and share Strategic repurchase program acquisitions • $0.48 per share dividend – 2012 • 12 acquisitions since early 2006, total of ~$500M • Total repurchases of $91M since early 2006 • Added
Slide 18: 2012 Financial Highlights and 2013 Outlook
2012 FINANCIAL HIGHLIGHTS AND 2013 OUTLOOK 2012 Financial Highlights • Total non-GAAP revenue of $453.0M • Subscription revenue of $166.3M, a record 37% of total revenue • Excluding Convio, Blackbaud subscription revenue grew ~17% y/y • Total non-GAAP recurring revenue of $302.4M • 67% of total non-
Slide 19: Why Invest in Blackbaud?
WHY INVEST IN BLACKBAUD? THE Early stages of serving a $16.5B market OPPORTUNITY THE Broadest and deepest product suite designed POSITIONING specifically for nonprofit organizations THE Attractive combination of scale, recurring revenue, PERFORMANCE growth, profitability and cash flow THE Long growt
Slide 20: Four Promising Avenues for Growth
FOUR PROMISING AVENUES FOR GROWTH 4 International 5.5M potential global customers at varying levels of technology sophistication Thousands of 20+ yr databases will be replaced in next 10 yrs 2 Enterprise Expand relationship with 28k existing customers; win new growth 1 Mid-Market relationships with
Slide 21: 1. Increase Penetration of Domestic Mid-Market
1. INCREASE PENETRATION OF DOMESTIC MID-MARKET The Opportunity Large Cross-Sell Opportunity • Significant opportunity to leverage Blackbaud unique expertise • Significant demand for subscription Number of customers ~19k offerings and hosting services • Opportunity to expand to new relationships with
Slide 22: 2. Expand in Global Enterprise Market – Targeting an $8B Opportunity
2. EXPAND IN GLOBAL ENTERPRISE MARKET – TARGETING AN $8B OPPORTUNITY The Opportunity CRM Customer Growth • Targeting largest 4,000 nonprofits • Need for multi-channel engagement to increase donations 80 • Blackbaud CRM Suite tailored to multi- site enterprise accounts – 19 new customer wins in 2012
Slide 23: 3. Expand in the Low End of the Market – 1.4M Organizations in U.S.
3. EXPAND IN THE LOW END OF THE MARKET – 1.4M ORGANIZATIONS IN U.S. • Typically have annual revenues <$500K • Typically have no full-time employees and depend heavily on volunteers • Same need for nonprofit expertise as larger orgs, but in a package they can quickly consume and implement • Prefer We
Slide 24: 4. Grow International Business – Significant Opportunity Outside U.S.
4. GROW INTERNATIONAL BUSINESS – SIGNIFICANT OPPORTUNITY OUTSIDE U.S. The Opportunity Growth in International Revenue ($M) • Currently 4,500 diverse customers in market of 5.5M orgs $61 • Increasing our focus and resources through: – Improvements in leadership – Targeted acquisitions $22 – RLC, Ever
Slide 25: Blackbaud - Long-Term Business Objectives and Potential
BLACKBAUD - LONG-TERM BUSINESS OBJECTIVES AND POTENTIAL • Sustainable low to mid-teens organic growth plus selective acquisitions • Revenues of $1+Billion • Extended leadership in both Enterprise CRM and online fundraising solutions for nonprofits • Next generation of mid-market on SaaS platform • W
Slide 26: Market Leader. Long Growth Runway.
WHY INVEST MARKET LEADER. LONG GROWTH RUNWAY. THE Early stages of serving a $16.5B market OPPORTUNITY THE Broadest and deepest product suite designed POSITIONING specifically for nonprofit organizations THE Attractive combination of scale, recurring revenue, PERFORMANCE growth, profitability and cas