Blackbaud Announces 2021 First Quarter Results

First Quarter Cash Flow from Operations Increases $55 Million Year-Over-Year

Charleston, S.C. (April 28, 2021) — Blackbaud (NASDAQ: BLKB), the world’s leading cloud software company powering social good, today announced financial results for its first quarter ended March 31, 2021.

“Our first quarter performance combined with an improving macro environment has us well positioned for a strong and successful year ahead,” said Mike Gianoni, president and CEO, Blackbaud. “The progress being made to distribute COVID vaccines is encouraging for our market, our customers and our company. As we look to extend our leadership position in this market, we’re accelerating investments in key areas like digital marketing, engineering, security and customer success, and our sights are set on the substantial opportunity ahead of us to drive meaningful acceleration in financial performance in the context of Rule of 40. Overall, we had a strong start to the year, and I’m increasingly optimistic about what’s to come in 2021 and over the next several years.”

First Quarter 2021 Results Compared to First Quarter 2020 Results:

• Total GAAP revenue was $219.2 million, down 2.0%, with $206.8 million in GAAP recurring revenue, up 0.9%.
• Non-GAAP organic recurring revenue increased 0.9%.
• GAAP income from operations was $6.6 million, with GAAP operating margin of 3.0%, a decrease of 80 basis points.
• Non-GAAP income from operations was $47.2 million, with non-GAAP operating margin of 21.5%, an increase of 630 basis points.
• GAAP net loss was $0.2 million, with GAAP diluted earnings per share of $0.00, down $0.10 per share.
• Non-GAAP net income was $32.8 million, with non-GAAP diluted earnings per share of $0.68, up $0.17 per share.
• Non-GAAP adjusted EBITDA was $57.2 million, up $12.5 million, with non-GAAP adjusted EBITDA margin of 26.1%.
• GAAP net cash provided by operating activities was $30.1 million, an increase of $54.6 million.
• Non-GAAP free cash flow was $17.3 million, an increase of $55.6 million.

“Our first quarter results are encouraging as we continue to see strength in online payments and durability in our recurring revenue streams,” said Tony Boor, executive vice president and CFO. “We had solid bookings performance to start the year while reducing customer acquisition costs, and we continued to make accelerated investments in critical areas of the business. As expected, one-time services and other revenue continues to decline which creates a drag on overall revenue growth but is positive over the long term. With one quarter behind us, we have increasing visibility into our near-term performance, and as we exit the pandemic, we see significant growth opportunities ahead of us. Our latest modeling gives us heightened confidence we may have upside to our best estimate for 2021, and the trends we’re seeing to start the year combined with favorable foreign exchange rates significantly reduces the likelihood of our downside revenue scenario.”

An explanation of all non-GAAP financial measures referenced in this press release 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:

• The company released its annual social responsibility report including voluntary ESG disclosures aligned with Sustainability Accounting Standards Board (SASB) and Global Reporting Initiative (GRI) standards.
• Blackbaud announced it has joined the United Nations (UN) Global Compact initiative, further building on its commitment to ESG.
• Blackbaud executive management outlined the company’s strategic outlook during a virtual investor session.
• Blackbaud Chief Marketing Officer Catherine LaCour was named one of the 2021 Top 50 Most Powerful Women in Technology by the National Diversity Council and DiversityFIRST^TM.
• The Blackbaud Institute released its ninth-annual Charitable Giving Report, which found online giving grew 21% in 2020, amidst a global pandemic.
• The company announced Blackbaud Grantmaking is now available in SKY UX interface making advanced grant management technology accessible anywhere via any browser on any device.
• Blackbaud expanded global capabilities for YourCause®, announcing a new in-market partnership with GlobalGiving that connects companies to the largest set of charity organizations to accelerate employee giving and volunteering around the world.
• Leading enterprise higher education institutions rely on Blackbaud CRM^TM to empower teams across campus, strengthen constituent engagement and achieve better fundraising results.

Visit www.blackbaud.com/newsroom for more information about Blackbaud’s recent highlights.

Conference Call Details:

What:        Blackbaud’s 2021 First Quarter Conference Call

When:       April 29, 2021

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 world’s leading cloud software company powering social good. Serving the entire social good community—nonprofits, higher education institutions, K–12 schools, healthcare organizations, faith communities, arts and cultural organizations, foundations, companies and individual change agents—Blackbaud connects and empowers organizations to increase their impact through cloud software, services, expertise and data intelligence. The Blackbaud portfolio is tailored to the unique needs of vertical markets, with solutions for fundraising and CRM, marketing, advocacy, peer-to-peer fundraising, corporate social responsibility, school management, ticketing, grantmaking, financial management, payment processing and analytics. Serving the industry for nearly four decades, Blackbaud is headquartered in Charleston, South Carolina, and has operations in the United States, Australia, Canada, Costa Rica and the United Kingdom. For more information, visit www.blackbaud.com, or follow us on Twitter, LinkedIn, Instagram, and Facebook.

Investor Contact
Steve Hufford
Director, Investor Relations
IR@blackbaud.com

Media Contact
media@blackbaud.com

Forward-Looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the predictability of our financial condition and results of operations. These statements involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: management of integration of acquired companies; uncertainty regarding increased business and renewals from existing customers; a shifting revenue mix that may impact gross margin; continued success in sales growth; cybersecurity and data protection risks; uncertainty regarding the COVID-19 disruption; potential litigation involving us; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from Blackbaud’s investor relations department. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Trademarks
All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

Non-GAAP Financial Measures

Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. Blackbaud uses non-GAAP financial measures internally in analyzing its operational performance. Accordingly, Blackbaud believes these non-GAAP measures are useful to investors, as a supplement to GAAP measures, in evaluating its ongoing operational performance and trends and in comparing its financial results from period-to-period with other companies in Blackbaud’s industry, many of which present similar non-GAAP financial measures to investors. However, these non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies.

The non-GAAP financial measures discussed above exclude the impact of certain transactions that Blackbaud believes are not directly related to its operating performance in any particular period, but are for its long-term benefit over multiple periods. Blackbaud believes these non-GAAP financial measures reflect its ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.

While Blackbaud believes these non-GAAP measures provide useful supplemental information, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures.

Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software development, and capital expenditures for property and equipment.

In addition, Blackbaud uses non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis and non-GAAP organic recurring revenue growth, in analyzing its operating performance. Blackbaud believes that these non-GAAP measures are useful to investors, as a supplement to GAAP measures, for evaluating the periodic growth of its business on a consistent basis. Each of these measures excludes incremental acquisition-related revenue attributable to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, each of these measures reflects presentation of full-year incremental non-GAAP revenue derived from such companies as if they were combined throughout the prior period, and it includes the non-GAAP revenue attributable to those companies, as if there were no acquisition-related write-downs of acquired deferred revenue to fair value as required by GAAP. In addition, each of these measures excludes prior period revenue associated with divested businesses. The exclusion of the prior period revenue is to present the results of the divested businesses within the results of the combined company for the same period of time in both the prior and current periods. Blackbaud believes this presentation provides a more comparable representation of its current business’ organic revenue growth and revenue run-rate

Rule of 40 is defined as non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. Non-GAAP adjusted EBITDA is defined as GAAP net income plus interest, net; income tax provision; depreciation; amortization of intangible assets from business combinations; amortization of software development costs; acquisition-related deferred revenue write-down; stock-based compensation; acquisition-related integration costs; acquisition-related expenses; employee severance; and restructuring and other real estate activities.