Revenue Growth More than Doubles Year over Year with Significantly Improved Profitability; Blackbaud Board of Directors Approve Expanded $800 Million Stock Repurchase Authorization
CHARLESTON, S.C., July 30, 2024 -- Blackbaud (NASDAQ: BLKB), the leading provider of software for powering social impact, today announced financial results for its second quarter ended June 30, 2024.
"We continue to execute on our strategic initiatives, and I am optimistic about the opportunities ahead in the near, mid and long-term," said Mike Gianoni, president, CEO and vice chairman of the board of directors, Blackbaud. "Blackbaud is a clear market leader with a path to penetrate even further into a rich market opportunity. The leverage of our financial model allows us to aggressively invest in innovation, which provides great value to our existing customers and increases our ability to attract new prospects. And our strong cash flow enables us to execute on a purposeful and prudent stock repurchase program to improve shareholder value."
Second Quarter 2024 Results Compared to Second Quarter 2023 Results:
- GAAP total revenue was $287.3 million, up 6.0% and non-GAAP organic revenue increased 6.7%.
- GAAP recurring revenue was $281.4 million, up 7.2% and represented 98% of total revenue. Non-GAAP organic recurring revenue increased 7.2%.
- GAAP income from operations was $42.1 million, with GAAP operating margin of 14.7%, an increase of 1,460 basis points.
- Non-GAAP income from operations was $86.1 million, with non-GAAP operating margin of 30.0%, an increase of 260 basis points.
- GAAP net income was $21.8 million, with GAAP diluted earnings per share of $0.42, up $0.38 per share.
- Non-GAAP net income was $55.7 million, with non-GAAP diluted earnings per share of $1.08, up $0.10 per share.
- Non-GAAP adjusted EBITDA was $102.5 million, up $13.7 million, with non-GAAP adjusted EBITDA margin of 35.7%, an increase of 290 basis points.
- GAAP net cash provided by operating activities was $53.8 million, an increase of $0.6 million, with GAAP operating cash flow margin of 18.7%, a decrease of 90 basis points.
- Non-GAAP free cash flow was $32.6 million, a decrease of $4.4 million, with non-GAAP free cash flow margin of 11.4%, a decrease of 220 basis points.
- Non-GAAP adjusted free cash flow was $36.4 million, a decrease of $7.2 million, with non-GAAP adjusted free cash flow margin of 12.7%, a decrease of 340 basis points.
"I'm pleased with our financial performance in the second quarter as our operating plan continues to deliver greatly improved profitable growth," said Tony Boor, executive vice president and CFO, Blackbaud. "In the second quarter, total revenue grew 6.0%, while non-GAAP organic revenue growth was 6.7%. Our Social Sector, representing 88% of total revenue in the quarter, grew even faster at 8.5%. Non-GAAP adjusted EBITDA performance in the quarter was strong with a margin of 35.7%, a 290 basis points increase year over year. With our new $800 million repurchase authorization and ample debt capacity, we plan to be very purposeful about buying back our stock and believe there is no better use of capital than investing back into our business through product innovation and returning money to shareholders at this valuation."
An explanation of all non-GAAP financial measures referenced in this press release, including the Rule of 40, is included below under the heading "Non-GAAP Financial Measures." A reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.
Recent Company Highlights
- Blackbaud's board of directors reauthorized, expanded and replenished the company's existing stock repurchase program, raising the total capacity from $500 million to $800 million available for repurchases of the company's common stock.
- Blackbaud recently announced that Dale Strange has taken the reins of the Corporate Impact business and been appointed to the company's executive leadership team as Tom Davidson, founder of EVERFI, moves to a strategic advisory role.
- Blackbaud was named one of America's Best Mid-Size Companies 2024 by TIME, ranking 195 out of 500 companies based on employee satisfaction, revenue growth and sustainability transparency.
- At its recent spring Product Update Briefings, Blackbaud announced hundreds of product updates and rolled out new roadmaps, sharing how the company is more deeply connecting customers' business offices, incorporating AI for greater impact, and delivering a unified view for Raiser's Edge NXT®.
- Blackbaud made a strategic investment in UBIQ Education, innovators in school websites, to extend Blackbaud's Total School Solution and offer a native integration with UBIQ's AMAIS platform, giving customers direct access to a cutting-edge suite of marketing and admissions tools with seamless data integration across the platform.
- Six companies are participating in the July 2024 cohort of Blackbaud's Social Good Startup Program, bringing innovative solutions to Blackbaud customers—from AI-powered fundraising and content tools to digital assistant chatbots.
- Blackbaud announced its bbcon 2024 tech conference, happening Sept. 24-26 in Seattle.
Visit www.blackbaud.com/newsroom for more information about Blackbaud's recent highlights.
Financial Outlook
Blackbaud today reiterated its 2024 full year financial guidance:
- GAAP revenue of $1.164 billion to $1.194 billion
- Non-GAAP adjusted EBITDA margin of 32.5% to 33.5%
- Non-GAAP earnings per share of $4.12 to $4.38
- Non-GAAP adjusted free cash flow of $254 million to $274 million
Included in its 2024 full year financial guidance are the following updated assumptions:
- Non-GAAP annualized effective tax rate is expected to be approximately 24.5%
- Interest expense for the year is expected to be approximately $52 million to $56 million
- Fully diluted shares for the year are expected to be approximately 51.0 million to 52.0 million
- Capital expenditures for the year are expected to be approximately $65 million to $75 million, including approximately $60 million to $70 million of capitalized software and content development costs
Blackbaud has not reconciled forward-looking full-year non-GAAP financial measures contained in this news release to their most directly comparable GAAP measures, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to compensation, acquisition transactions and integration, tax items or others that may arise during the year. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts.
In order to provide a meaningful basis for comparison, Blackbaud uses non-GAAP adjusted free cash flow in analyzing its operating performance. Non-GAAP adjusted free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, capital expenditures for property and equipment, plus cash outflows related to the previously disclosed Security Incident discovered in May 2020 (the "Security Incident"). Total costs related to the Security Incident exceeded the limit of our insurance coverage during the first quarter of 2022. For full year 2024, Blackbaud currently expects net cash outlays of $8 million to $13 million for ongoing legal fees related to the Security Incident. In line with the company's policy, all associated costs due to third-party service providers and consultants, including legal fees, are expensed as incurred. Please refer to the section below titled "Non-GAAP Financial Measures" for more information on Blackbaud's use of non-GAAP financial measures.
Stock Repurchase Program
As of July 16, 2024, Blackbaud had approximately $800.0 million remaining under its common stock repurchase program that was expanded, replenished and reauthorized in July 2024.
Conference Call Details
What: Blackbaud's 2024 Second Quarter Conference Call
When: July 31, 2024
Time: 8:00 a.m. (Eastern Time)
Live Call: 1-877-407-3088 (US/Canada)
Webcast: Blackbaud's Investor Relations Webpage
About Blackbaud
Blackbaud (NASDAQ: BLKB) is the leading software provider exclusively dedicated to powering social impact. Serving the nonprofit and education sectors, companies committed to social responsibility and individual change makers, Blackbaud's essential software is built to accelerate impact in fundraising, nonprofit financial management, digital giving, grantmaking, corporate social responsibility and education management. With millions of users and over $100 billion raised, granted or managed through Blackbaud platforms every year, Blackbaud's solutions are unleashing the potential of the people and organizations who change the world. Blackbaud has been named to Newsweek's list of America's Most Responsible Companies, Quartz's list of Best Companies for Remote Workers and Forbes' list of America's Best Employers. A remote-first company, Blackbaud has operations in the United States, Australia, Canada, Costa Rica and the United Kingdom, supporting users in 100+ countries. Learn more at www.blackbaud.com, or follow us on X/Twitter, LinkedIn, Instagram, and Facebook.
Investor Contact
IR@blackbaud.com
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