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Blackbaud Announces 2023 Fourth Quarter and Full Year Results

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Full Year 2023 Financial Results Met or Exceeded Financial Guidance Ranges; Blackbaud Announces Refreshed Capital Allocation Strategy

CHARLESTON, S.C., Feb. 12, 2024 /PRNewswire/ — Blackbaud (NASDAQ: BLKB), the leading provider of software for powering social impact, today announced financial results for its fourth quarter and full year ended December 31, 2023.

“The fourth quarter concluded a year of substantial transformation for Blackbaud,” said Mike Gianoni, president, CEO and vice chairman of the board, Blackbaud. “Approximately a year and a half ago, we implemented our five-point operating plan, and it has put our company on a clear trajectory of improving performance. During the year, we delivered innovative new products and feature enhancements to our customers, made significant progress modernizing our software contract renewal terms, and delivered excellent fundraising results for our customers.  Our financial results were strong, and we were able to expand and replenish our previous stock repurchase program and begin repurchasing shares. Looking ahead to 2024, we expect to be a Rule of 40 company for the full year and will remain focused on delivering significant, sustainable value for our shareholders.”

Fourth Quarter 2023 Results Compared to Fourth Quarter 2022 Results:

GAAP total revenue was $295.0 million, up 7.4%, with $287.4 million in GAAP recurring revenue, up 8.4%. GAAP recurring revenue was 97% of total revenue.Non-GAAP organic recurring revenue increased 8.4%.GAAP income from operations was $32.3 million, inclusive of security incident-related costs of $4.8 million, with GAAP operating margin of 11.0%, an increase of 1,670 basis points.Non-GAAP income from operations was $83.8 million, with non-GAAP operating margin of 28.4%, an increase of 840 basis points.GAAP net income was $5.4 million, with GAAP diluted earnings per share of $0.10, up $0.51 per share.Non-GAAP net income was $62.2 million, with non-GAAP diluted earnings per share of $1.14, up $0.46 per share.Non-GAAP adjusted EBITDA was $99.3 million, up $31.3 million, with non-GAAP adjusted EBITDA margin of 33.6%, an increase of 890 basis points.GAAP net cash used in operating activities was $(3.3) million, inclusive of security incident-related payments of $54.9 million. GAAP net cash used in operating activities decreased $17.4 million and GAAP operating cash flow margin was (1.1)%, a decrease of 620 basis points.Non-GAAP free cash flow was $(18.6) million, inclusive of security incident-related payments of $54.9 million. Non-GAAP free cash flow decreased $14.9 million and non-GAAP free cash flow margin was (6.3)%, a decrease of 500 basis points.Non-GAAP adjusted free cash flow was $36.3 million, an increase of $28.7 million, with non-GAAP adjusted free cash flow margin of 12.3%, an increase of 950 basis points.

“The fourth quarter demonstrated continued progress on our five-point operating plan, which has transformed our financial results,” said Tony Boor, executive vice president and CFO, Blackbaud. “In the fourth quarter, revenue grew 7.4% with 33.6% adjusted EBITDA margin for a Rule of 40 of 41.0%. For the full year 2023, we met our guidance range for revenue and exceeded the high end of our guidance ranges for adjusted EBITDA margin, non-GAAP EPS and adjusted free cash flow. The mid-point of our 2024 financial guidance calls for approximately 7% revenue growth and 33% adjusted EBITDA margin to achieve Rule of 40 for the full year. Adjusted free cash flow of $264 million at the midpoint of guidance represents a 22.3% adjusted free cash flow margin and a significant improvement of 300bps over 2023. With our recently announced $500 million stock repurchase authorization, we plan to offset the dilution from annual stock-based compensation, while also opportunistically pursuing additional share repurchases, accretive M&A, and debt repayment to maximize value for our stockholders.”

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 released Prospect Insights Pro for Blackbaud Raiser’s Edge NXT®, supporting advanced fundraising organizations with more AI-driven recommendations, including planned gift likelihood and detailed wealth and asset data.Blackbaud announced the newest cohort of its Social Good Startup Program, welcoming eight new startups that are bringing cutting edge technology to the social impact sector.In the TrustRadius 2023 “Best Of” Awards, Blackbaud Raiser’s Edge NXT® and Blackbaud Financial Edge NXT® were recognized for Best Value, Best Feature Set and Best Relationship.Newsweek honored Blackbaud on its Excellence 1000 2024 Index, as well as its list of America’s Most Responsible Companies for the third consecutive year, recognizing the company’s commitment to social responsibility.Blackbaud was named Corporate Governance Team of the Year in the small-mid cap category at the 2023 Corporate Governance Awards, hosted by Governance Intelligence. The awards recognize outstanding achievements in governance, risk and compliance.Blackbaud appointed Kristian Talvitie, executive vice president and CFO of PTC Inc., to its board of directors. Talvitie brings 30 years of experience with a diverse background ranging across corporate finance, FP&A, sales, marketing and communications.Blackbaud announced a reauthorized, expanded and replenished $500M stock repurchase program. about Blackbaud’s recent highlights.

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

Full-Year 2023 Results Compared to Full-Year 2022 Results:

GAAP total revenue was $1.1 billion, up 4.5%, with $1.1 billion in GAAP recurring revenue, up 5.9%.Non-GAAP organic recurring revenue increased 6.3%.GAAP income from operations was $44.7 million, inclusive of security incident-related costs of $53.4 million, with GAAP operating margin of 4.0%, an increase of 670 basis points.Non-GAAP income from operations was $294.1 million, with non-GAAP operating margin of 26.6%, an increase of 750 basis points.GAAP net income was $1.8 million, with GAAP diluted earnings per share of $0.03, up $0.91 per share.Non-GAAP net income was $213.6 million, with non-GAAP diluted earnings per share of $3.98, up $1.29 per share.Non-GAAP adjusted EBITDA was $356.5 million, up $93.9 million, with non-GAAP adjusted EBITDA margin of 32.2%, an increase of 740 basis points.GAAP net cash provided by operating activities was $199.6 million, inclusive of security incident-related payments of $78.0 million. GAAP net cash provided by operating activities decreased $4.3 million and GAAP operating cash flow margin was 18.1%, a decrease of 120 basis points.Non-GAAP free cash flow was $135.5 million, inclusive of security incident-related payments of $78.0 million. Non-GAAP free cash flow increased $2.7 million and non-GAAP free cash flow margin of 12.3%, a decrease of 30 basis points.Non-GAAP adjusted free cash flow was $213.5 million, an increase of $59.8 million, with non-GAAP adjusted free cash flow margin of 19.3%, an increase of 480 basis points.

Financial Outlook
Blackbaud today announced its 2024 full year financial guidance:

Non-GAAP revenue of $1.170 billion to $1.200 billionNon-GAAP adjusted EBITDA margin of 32.5% to 33.5%Non-GAAP earnings per share of $4.12 to $4.38Non-GAAP adjusted free cash flow of $254 million to $274 million

Included in its 2024 full year financial guidance are the following assumptions:

Non-GAAP annualized effective tax rate is expected to be approximately 24.5%Interest expense for the year is expected to be approximately $34 million to $38 millionFully diluted shares for the year are expected to be approximately 53.5 million to 54.5 millionCapital 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, net of insurance, 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 January 19, 2024, Blackbaud had approximately $499 million remaining under its approved common stock purchase program that was authorized in January 2024.

Conference Call Details

What:

Blackbaud’s Fourth Quarter and Full Year 2023 Conference Call

When:

February 13, 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

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 and related liabilities; 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.

Beginning in 2024, we intend to update the non-GAAP tax rate we apply when calculating non-GAAP net income and non-GAAP diluted earnings per share in future periods. Since the first quarter of 2018, for the purposes of determining non-GAAP net income, we have utilized a non-GAAP tax rate of 20.0% in our calculation of the assumed non-GAAP income tax provision. We intend to adjust this rate to 24.5% to better reflect our periodic effective tax rate calculated in accordance with GAAP and our current expectations. The increase in our non-GAAP tax rate is primarily driven by increases in income tax rates in jurisdictions we operate in. Furthermore, as profitability increases, the effect of tax impacting items, including research and development credits, lessens such that our assumed non-GAAP tax rate moves closer to the statutory rate. The non-GAAP tax rate utilized in future periods will be reviewed annually to determine whether it remains appropriate in consideration of our financial results including our periodic effective tax rate calculated in accordance with GAAP, our operating environment and related tax legislation in effect and other factors deemed necessary. All fourth quarter and full year 2023 measures of the tax impact related to non-GAAP net income and non-GAAP diluted earnings per share included in this news release are calculated under Blackbaud’s historical methodology.

Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, and capital expenditures for property and equipment. In addition, and in order to provide a meaningful basis for comparison, Blackbaud now 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, and capital expenditures for property and equipment, plus cash outflows, net of insurance, related to the Security Incident. Blackbaud believes non-GAAP free cash flow and non-GAAP adjusted free cash flow provide useful measures of the company’s operating performance. Non-GAAP adjusted free cash flow is not intended to represent and should not be viewed as the amount of residual cash flow available for discretionary expenditures.

In addition, Blackbaud uses non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic recurring revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, 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. 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 (benefit); depreciation; amortization of intangible assets from business combinations; amortization of software and content development costs; stock-based compensation; employee severance; acquisition and disposition-related costs; restructuring and other real estate activities; costs, net of insurance, related to the Security Incident; and impairment of capitalized software development costs.

Blackbaud, Inc.

Consolidated Balance Sheets

(Unaudited)

(dollars in thousands, except per share amounts)

December 31,
2023

December 31,
2022

Assets

Current assets:

Cash and cash equivalents

$           31,251

$           31,691

Restricted cash

697,006

702,240

Accounts receivable, net of allowance of $6,907 and $7,318 at December 31, 2023 and
December 31, 2022, respectively

101,862

102,809

Customer funds receivable

353

249

Prepaid expenses and other current assets

99,285

81,654

Total current assets

929,757

918,643

Property and equipment, net

98,689

107,426

Operating lease right-of-use assets

36,927

45,899

Software and content development costs, net

160,194

141,023

Goodwill

1,053,738

1,050,272

Intangible assets, net

581,937

635,136

Other assets

51,037

94,304

Total assets

$      2,912,279

$      2,992,703

Liabilities and stockholders’ equity

Current liabilities:

Trade accounts payable

$           25,184

$           42,559

Accrued expenses and other current liabilities

64,322

86,002

Due to customers

695,842

700,860

Debt, current portion

19,259

18,802

Deferred revenue, current portion

392,530

382,419

Total current liabilities

1,197,137

1,230,642

Debt, net of current portion

760,405

840,241

Deferred tax liability

93,292

125,759

Deferred revenue, net of current portion

2,397

2,817

Operating lease liabilities, net of current portion

40,085

44,918

Other liabilities

10,258

4,294

Total liabilities

2,103,574

2,248,671

Commitments and contingencies

Stockholders’ equity:

Preferred stock; 20,000,000 shares authorized, none outstanding

—

—

Common stock, $0.001 par value; 180,000,000 shares authorized, 69,188,304 and
67,814,044 shares issued at December 31, 2023 and December 31, 2022, respectively;
53,625,440 and 53,068,814 shares outstanding at December 31, 2023 and December 31,
2022, respectively

69

68

Additional paid-in capital

1,203,012

1,075,264

Treasury stock, at cost; 15,562,864 and 14,745,230 shares at December 31, 2023 and
December 31, 2022, respectively

(591,557)

(537,287)

Accumulated other comprehensive (loss) income

(1,688)

8,938

Retained earnings

198,869

197,049

Total stockholders’ equity

808,705

744,032

Total liabilities and stockholders’ equity

$      2,912,279

$      2,992,703

 

Blackbaud, Inc.

Consolidated Statements of Comprehensive Loss

(Unaudited)

(dollars in thousands, except per share amounts)

Three months ended
December 31,

Years ended
December 31,

2023

2022

2023

2022

Revenue

Recurring

$        287,381

$        265,173

$     1,071,520

$     1,011,733

One-time services and other

7,630

9,584

33,912

46,372

Total revenue

295,011

274,757

1,105,432

1,058,105

Cost of revenue

Cost of recurring

127,897

125,300

470,455

463,449

Cost of one-time services and other

7,938

10,183

31,733

41,940

Total cost of revenue

135,835

135,483

502,188

505,389

Gross profit

159,176

139,274

603,244

552,716

Operating expenses

Sales, marketing and customer success

52,120

57,088

212,158

221,455

Research and development

38,602

38,177

153,304

156,913

General and administrative

35,356

58,895

189,938

199,908

Amortization

784

662

3,139

2,925

Total operating expenses

126,862

154,822

558,539

581,201

Income (loss) from operations

32,314

(15,548)

44,705

(28,485)

Interest expense

(8,473)

(9,891)

(39,922)

(35,803)

Other income, net

2,414

5

12,861

8,713

Income (loss) before provision (benefit) for income taxes

26,255

(25,434)

17,644

(55,575)

Income tax provision (benefit)

20,856

(4,175)

15,824

(10,168)

Net income (loss)

$            5,399

$        (21,259)

$            1,820

$        (45,407)

Earnings (loss) per share

Basic

$              0.10

$             (0.41)

$              0.03

$             (0.88)

Diluted

$              0.10

$             (0.41)

$              0.03

$             (0.88)

Common shares and equivalents outstanding

Basic weighted average shares

52,697,294

51,716,948

52,546,406

51,569,148

Diluted weighted average shares

54,439,689

51,716,948

53,721,342

51,569,148

Other comprehensive (loss) income

Foreign currency translation adjustment

$            4,630

$            7,906

$            5,049

$        (16,160)

Unrealized (loss) gain on derivative instruments, net of tax

(14,459)

(1,684)

(15,675)

18,576

Total other comprehensive (loss) income

(9,829)

6,222

(10,626)

2,416

Comprehensive loss

$          (4,430)

$        (15,037)

$          (8,806)

$        (42,991)

 

Blackbaud, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Years ended
December 31,

(dollars in thousands)

2023

2022

Cash flows from operating activities

Net income (loss)

$             1,820

$          (45,407)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

109,487

102,369

Provision for credit losses and sales returns

4,500

6,066

Stock-based compensation expense

127,762

110,294

Deferred taxes

(24,368)

(26,644)

Amortization of deferred financing costs and discount

1,775

2,364

Other non-cash adjustments

5,023

5,676

Changes in operating assets and liabilities, net of acquisition and disposal of businesses:

Accounts receivable

(3,237)

(7,340)

Prepaid expenses and other assets

16,851

26,235

Trade accounts payable

(18,576)

21,607

Accrued expenses and other liabilities

(30,275)

(2,386)

Deferred revenue

8,872

11,059

Net cash provided by operating activities

199,634

203,893

Cash flows from investing activities

Purchase of property and equipment

(4,685)

(12,289)

Capitalized software and content development costs

(59,443)

(58,774)

Purchase of net assets of acquired companies, net of cash and restricted cash acquired

(13)

(20,912)

Cash received in sale of business

—

6,426

Other investing activities

(250)

—

Net cash used in investing activities

(64,391)

(85,549)

Cash flows from financing activities

Proceeds from issuance of debt

293,200

211,000

Payments on debt

(374,595)

(310,740)

Stock issuance costs

—

(1,339)

Employee taxes paid for withheld shares upon equity award settlement

(35,867)

(36,376)

Change in due to customers

(6,812)

111,386

Change in customer funds receivable

(60)

380

Purchase of treasury stock

(18,831)

—

Net cash used in financing activities

(142,965)

(25,689)

Effect of exchange rate on cash, cash equivalents and restricted cash

2,048

(10,486)

Net (decrease) increase in cash, cash equivalents and restricted cash

(5,674)

82,169

Cash, cash equivalents and restricted cash, beginning of year

733,931

651,762

Cash, cash equivalents and restricted cash, end of year

$         728,257

$         733,931

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown above in the consolidated statements of cash flows:

(dollars in thousands)

December 31,
2023

December 31,
2022

Cash and cash equivalents

$           31,251

$           31,691

Restricted cash

697,006

702,240

Total cash, cash equivalents and restricted cash in the statement of cash flows

$         728,257

$         733,931

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

(dollars in thousands, except per share amounts)

Three months ended
December 31,

Years ended
December 31,

2023

2022

2023

2022

GAAP Revenue

$     295,011

$     274,757

$ 1,105,432

$ 1,058,105

GAAP gross profit

$     159,176

$     139,274

$     603,244

$     552,716

GAAP gross margin

54.0 %

50.7 %

54.6 %

52.2 %

Non-GAAP adjustments:

Add: Stock-based compensation expense

4,416

3,109

16,658

14,436

Add: Amortization of intangibles from business combinations

13,099

11,686

52,463

48,492

Add: Employee severance

—

1,787

797

2,135

Subtotal

17,515

16,582

69,918

65,063

Non-GAAP gross profit

$     176,691

$     155,856

$     673,162

$     617,779

Non-GAAP gross margin

59.9 %

56.7 %

60.9 %

58.4 %

GAAP income (loss) from operations

$       32,314

$     (15,548)

$       44,705

$     (28,485)

GAAP operating margin

11.0 %

(5.7) %

4.0 %

(2.7) %

Non-GAAP adjustments:

Add: Stock-based compensation expense

32,094

26,635

127,762

110,294

Add: Amortization of intangibles from business combinations

13,883

12,348

55,602

51,417

Add: Employee severance

55

4,470

5,149

5,164

Add: Acquisition and disposition-related costs(1)(2)

657

430

7,456

6,135

Add: Restructuring and other real estate activities

—

—

—

71

Add: Security Incident-related costs, net of insurance(3)

4,780

26,516

53,426

55,723

Add: Impairment of capitalized software development costs

—

—

—

2,263

Subtotal

51,469

70,399

249,395

231,067

Non-GAAP income from operations

$       83,783

$       54,851

$     294,100

$     202,582

Non-GAAP operating margin

28.4 %

20.0 %

26.6 %

19.1 %

GAAP income (loss) before provision (benefit) for income taxes

$       26,255

$     (25,434)

$       17,644

$     (55,575)

GAAP net income (loss)

$         5,399

$     (21,259)

$         1,820

$     (45,407)

Shares used in computing GAAP diluted earnings (loss) per share

54,439,689

51,716,948

53,721,342

51,569,148

GAAP diluted earnings (loss) per share

$           0.10

$         (0.41)

$           0.03

$         (0.88)

Non-GAAP adjustments:

Add: GAAP income tax provision (benefit)

20,856

(4,175)

15,824

(10,168)

Add: Total non-GAAP adjustments affecting income from operations

51,469

70,399

249,395

231,067

Non-GAAP income before provision for income taxes

77,724

44,965

267,039

175,492

Assumed non-GAAP income tax provision(4)

15,545

8,993

53,408

35,098

Non-GAAP net income

$       62,179

$       35,972

$     213,631

$     140,394

Shares used in computing non-GAAP diluted earnings per share

54,439,689

52,923,158

53,721,342

52,207,573

Non-GAAP diluted earnings per share

$           1.14

$           0.68

$           3.98

$           2.69

(1)

Includes a $2.0 million noncash impairment of certain intangible assets held for sale during the twelve months ended December 31, 2022.

(2)

Includes noncash impairment charges incurred during the twelve months ended December 31, 2023 related to the sublease of our Washington, DC office location the lease of which was acquired during the EVERFI acquisition.

(3)

Includes Security Incident-related costs incurred during the three and twelve months ended December 31, 2023 of $4.8 million and $53.4 million, respectively, which includes approximately $1.0 million and $31.0 million, respectively, in settlements and recorded liabilities for loss contingencies, net of insurance recoveries during the same periods of $0.0 million, and during the twelve months ended December 31, 2022 of $26.5 million and $57.6 million, respectively, which included approximately $18.0 million and $23.0 million, respectively, in recorded aggregate liabilities for loss contingencies, net of insurance recoveries during the same period that were $0.0 million and $1.9 million, respectively. Recorded expenses consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims, negotiated settlements and accruals for certain loss contingencies. Not included in this adjustment were costs associated with enhancements to our cybersecurity program. For full year 2024, we currently expect net pre-tax expense of approximately $5 million to $10 million and net cash outlays of approximately $8 million to $13 million for ongoing legal fees related to the Security Incident. Not included in these ranges are our previous settlements or current accruals for loss contingencies related to the matters discussed below. In line with our policy, legal fees are expensed as incurred. As of December 31, 2023, we have recorded approximately $1.5 million in aggregate liabilities for loss contingencies based primarily on recent negotiations with certain customers related to the Security Incident that we believe we can reasonably estimate. In connection with the settlement of the multi-state Attorneys General investigation (as previously disclosed on October 5, 2023), we paid $49.5 million during the fourth quarter of 2023. There are other Security Incident-related matters, including customer claims, customer constituent class actions and governmental investigations, for which we have not recorded a liability for a loss contingency as of December 31, 2023 because we are unable at this time to reasonably estimate the possible loss or range of loss. Each of these matters could, separately or in the aggregate, result in an adverse judgment, settlement, fine, penalty or other resolution, the amount, scope and timing of which we are currently unable to predict, but could have a material adverse impact on our results of operations, cash flows or financial condition.

(4)

Blackbaud applies a non-GAAP effective tax rate of 20.0% when calculating non-GAAP net income and non-GAAP diluted earnings per share.

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

(Unaudited)

(dollars in thousands)

Three months ended
December 31,

Years ended
December 31,

2023

2022

2023

2022

GAAP revenue

$     295,011

$        274,757

$ 1,105,432

$     1,058,105

GAAP revenue growth

7.4 %

4.5 %

Less: Non-GAAP revenue from divested businesses(1)

—

(10)

—

(3,535)

Non-GAAP organic revenue(2)

$     295,011

$        274,747

$ 1,105,432

$     1,054,570

Non-GAAP organic revenue growth

7.4 %

4.8 %

Non-GAAP organic revenue(2)

$     295,011

$        274,747

$ 1,105,432

$     1,054,570

Foreign currency impact on non-GAAP organic revenue(3)

(1,284)

—

431

—

Non-GAAP organic revenue on constant currency basis(3)

$     293,727

$        274,747

$ 1,105,863

$     1,054,570

Non-GAAP organic revenue growth on constant currency basis

6.9 %

4.9 %

GAAP recurring revenue

$     287,381

$        265,173

$ 1,071,520

$     1,011,733

GAAP recurring revenue growth

8.4 %

5.9 %

Less: Non-GAAP recurring revenue from divested businesses(1)

—

(1)

—

(3,439)

Non-GAAP organic recurring revenue(2)

$     287,381

$        265,172

$ 1,071,520

$     1,008,294

Non-GAAP organic recurring revenue growth

8.4 %

6.3 %

Non-GAAP organic recurring revenue(2)

$     287,381

$        265,172

$ 1,071,520

$     1,008,294

Foreign currency impact on non-GAAP organic recurring revenue(3)

(1,157)

—

482

—

Non-GAAP organic recurring revenue on constant currency basis(3)

$     286,224

$        265,172

$ 1,072,002

$     1,008,294

Non-GAAP organic recurring revenue growth on constant
currency basis

7.9 %

6.3 %

(1)

Non-GAAP revenue from divested businesses excludes revenue associated with divested businesses. The exclusion of the prior period revenue is to present the results of the divested business with the results of the combined company for the same period of time in both the prior and current periods.

(2)

Non-GAAP organic revenue and non-GAAP organic recurring revenue for the prior year periods presented herein may not agree to non-GAAP organic revenue and non-GAAP organic recurring revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth are calculated.

(3)

To determine non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period’s quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro.

 

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

(Unaudited)

(dollars in thousands)

Three months ended
December 31,

Years ended
December 31,

2023

2022

2023

2022

GAAP net income (loss)

$         5,399

$        (21,259)

$         1,820

$        (45,407)

Non-GAAP adjustments:

Add: Interest, net

6,208

9,053

31,101

34,057

Add: GAAP income tax provision (benefit)

20,856

(4,175)

15,824

(10,168)

Add: Depreciation

3,142

3,444

13,043

14,086

Add: Amortization of intangibles from business combinations

13,883

12,348

55,602

51,417

Add: Amortization of software and content development costs(1)

12,183

10,447

45,296

38,975

Subtotal

56,272

31,117

160,866

128,367

Non-GAAP EBITDA

$       61,671

$            9,858

$     162,686

$          82,960

Non-GAAP EBITDA margin(2)

20.9 %

14.7 %

Non-GAAP adjustments:

Add: Stock-based compensation expense

32,094

26,635

127,762

110,294

Add: Employee severance

55

4,470

5,149

5,164

Add: Acquisition and disposition-related costs(3)

657

430

7,456

6,135

Add: Restructuring and other real estate activities

—

—

—

71

Add: Security Incident-related costs, net of insurance(3)

4,780

26,516

53,426

55,723

Add: Impairment of capitalized software development costs

—

—

—

2,263

Subtotal

37,586

58,051

193,793

179,650

Non-GAAP adjusted EBITDA

$       99,257

$          67,909

$     356,479

$        262,610

Non-GAAP adjusted EBITDA margin(4)

33.6 %

32.2 %

Rule of 40(5)

41.0 %

37.0 %

Non-GAAP adjusted EBITDA

99,257

67,909

356,479

262,610

Foreign currency impact on Non-GAAP adjusted EBITDA(6)

(716)

1,326

(7)

6,305

Non-GAAP adjusted EBITDA on constant currency basis(6)

$       98,541

$          69,235

$     356,472

$        268,915

Non-GAAP adjusted EBITDA margin on constant currency basis

33.5 %

32.2 %

Rule of 40 on constant currency basis(7)

40.4 %

37.1 %

(1)

Includes amortization expense related to software and content development costs, and amortization expense from capitalized cloud computing implementation costs.

(2)

Measured by GAAP revenue divided by non-GAAP EBITDA.

(3)

See additional details in the reconciliation of GAAP to Non-GAAP operating income above.

(4)

Measured by non-GAAP organic revenue divided by non-GAAP adjusted EBITDA.

(5)

Measured by non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. See Non-GAAP organic revenue growth table above.

(6)

To determine non-GAAP adjusted EBITDA on a constant currency basis, non-GAAP adjusted EBITDA from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period’s quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro.

(7)

Measured by non-GAAP organic revenue growth on constant currency basis plus non-GAAP adjusted EBITDA margin on constant currency basis.

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

(Unaudited)

(dollars in thousands)

Years ended
December 31,

2023

2022

GAAP net cash provided by operating activities

$      199,634

$      203,893

GAAP operating cash flow margin

18.1 %

19.3 %

Non-GAAP adjustments:

Less: purchase of property and equipment

(4,685)

(12,289)

Less: capitalized software and content development costs

(59,443)

(58,774)

Non-GAAP free cash flow

$      135,506

$      132,830

Non-GAAP free cash flow margin

12.3 %

12.6 %

Non-GAAP adjustments:

Add: Security Incident-related cash flows, net of insurance

78,010

20,864

Non-GAAP adjusted free cash flow

$      213,516

$      153,694

Non-GAAP adjusted free cash flow margin

19.3 %

14.5 %

 

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SOURCE Blackbaud

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Minister Hodgson promotes Canadian energy and mining in London

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October 21, 2026

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LONDON, Oct. 21, 2026 /CNW/ — Canada has what the world wants. Our resources, expertise and institutions can support global energy security and affordability today while laying the foundation for a more prosperous, secure lower-carbon future. We have renewed ambition to engage with the world, diversify our trade and back our partnerships with investment that builds a stronger Canada and supports our allies.

Today, the Honourable Tim Hodgson, Minister of Energy and Natural Resources, concluded a successful visit to London, United Kingdom, for the London Metal Exchange (LME) Week.

While in London, Minister Hodgson met with his ministerial counterparts in the U.K., including Secretary of State for Energy Security and Net Zero, Miatta Fahnbulleh; Minister of State (Minister for Defence Readiness and Industry), Luke Pollard; and Parliamentary Under-Secretary of State (Minister for Reindustrialisation), Blair McDougall. He discussed closer collaboration, increased trade and enhanced bilateral investment between Canada and the U.K. on energy and natural resources.

The Minister also met with industry representatives, including from Anglo American, Masdar and Teck Resources, to discuss commercial opportunities with a focus on diversifying and securing mineral supply chains. Building on Canada’s 2025 G7 Presidency and the establishment of the Critical Minerals Resilience and Production Alliance, which has already catalyzed 69 new deals that have unlocked $19.2 billion in capital investment, discussions highlighted opportunities for further investment in and sourcing from Canadian mining projects.

Minister Hodgson also took part in a fireside conversation on the margins of LME with Jonathan Price, President and CEO of Teck Resources, on critical minerals supply chains and the global need to diversify sources of supply, and he spoke at the Financial Times Energy Transition Summit about Canada’s ambitious energy and mining policy agenda.

Canada is working with trusted partners in the U.K. and beyond to strengthen global energy and critical minerals security, diversify our trade and attract investment into Canadian projects so we can build a stronger, more resilient Canadian economy.

Quote

“Canada is blessed with abundant energy and minerals, world-class expertise and financial institutions, and stability and dependability that the world is looking for now more than ever. I look forward to building on this trip to the United Kingdom to deepen our international co-operation and catalyze investments that will diversify our trade and create economic opportunities for Canadians.”

The Honourable Tim Hodgson
Minister of Energy and Natural Resources

Quick Facts

The U.K. is Canada’s largest European trade and investment partner and third-largest individual trading partner, with bilateral goods and services trade totaling $85 billion in 2025.In July 2026, Canada ratified the Protocol on the Accession of the United Kingdom to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It entered into force on September 1, 2026, furthering opportunities for Canadian businesses through integrated supply chains and the single set of rules applied across CPTPP markets.The Canada–U.K. trading relationship is underpinned by our comprehensive bilateral Trade Continuity Agreement (TCA). The agreement does not expire and provides extensive market access for Canadian businesses, exporters and investors, including tariff-free access for 99 percent of tariff lines.In 2025, Canadian energy trade with the U.K. reached $1.8 billion, representing a 24.8 percent increase compared with 2024.In 2025, Canadian exports in mineral, metals and related products reached $40.8 billion, an increase of nearly 77 percent compared with 2024.Through the Canada–U.K. Critical Minerals Dialogue, both countries will continue working together to identify projects for investment and collaboration, strengthen secure and sustainable supply chains, and support growth in the mining and manufacturing sectors.

Associated Links

Canada–United Kingdom relationsOur critical minerals strategic partnerships: International partnerships

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SOURCE Natural Resources Canada

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NineTenths Joins ISASecure to Advance Adoption of ISA/IEC 62443 Cybersecurity Standards

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17 minutes ago

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October 21, 2026

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DURHAM, N.C., Oct. 21, 2026 /PRNewswire/ — The International Society of Automation (ISA) — the leading professional society for automation — announced that NineTenths Company has officially joined ISASecure®, the globally recognized certification program that validates conformance to the ISA/IEC 62443 series of standards for industrial automation and control systems (IACS) cybersecurity.

NineTenths is a Saudi Arabia-based technology company specializing in advanced industrial solutions, including unmanned aerial systems (drones), robotics, infrastructure inspection, surveying, and operational technology (OT) cybersecurity. Serving industries including oil and gas, petrochemicals, energy, water and wastewater, manufacturing, and other critical infrastructure sectors, the company combines emerging technologies with engineering expertise to improve operational efficiency, security, and resilience. NineTenths uses ISA/IEC 62443 as a framework supporting its OT cybersecurity services, with capabilities aligned to cybersecurity management systems, risk-based assessments, zones and conduits, industrial system security requirements, and secure product development practices.

This new partnership with ISASecure will provide NineTenths with the opportunity to further strengthen its commitment to advancing operational technology (OT) cybersecurity across Saudi Arabia and the broader Gulf region. Building on its existing alignment with the internationally recognized ISA/IEC 62443 standards, ISASecure membership offers NineTenths opportunities to engage with global cybersecurity experts, industrial automation suppliers, and certification bodies while expanding its capabilities and enhancing operational resilience and cybersecurity readiness for clients.

“Serving government, public safety, construction, infrastructure, and energy sectors, our commitment to quality and safety is backed by internationally recognized certifications and manufacturer accreditations,” said Naif AlZahrani, NineTenths vice president of operation. “Our continued focus on OT cybersecurity from mission to maintenance ensures protection for the full OT security lifecycle. We look forward to being part of ISASecure as we continue to support organizations across Saudi Arabia and the Gulf Cooperation Council (GCC) in adopting cutting-edge technologies aligned with Saudi Vision 2030.”

“It is an honor to welcome NineTenths into the ISASecure program,” said Mark DeAngelo, ISASecure program manager. “We look forward to collaborating with NineTenths as we advance our mission of partnership, certification, and standards-based product development to help achieve a more secure world.”

About ISASecure®

Founded in 2007 by the International Society of Automation (ISA), ISASecure® is a globally recognized certification program that provides assurance for the cybersecurity of industrial automation control systems (IACS). Through rigorous conformance to the ISA/IEC 62443 series of standards, ISASecure certifications validate that products and supplier practices meet internationally recognized benchmarks for OT security. ISASecure is a wholly owned subsidiary of ISA. 

ISASecure’s global ecosystem includes leaders such as Chevron, ExxonMobil, GSK, Saudi Aramco, Honeywell, Johnson Controls, Schneider Electric, Trane Technologies, and Yokogawa, among others.

For more information, visit isasecure.org.

About NineTenths

Founded in 2019, NineTenths is a Saudi Arabia-based technology company that helps organizations improve operational efficiency, reduce costs, and make accurate data-driven decisions across industrial sectors. NineTenths is powered by a team of skilled Saudi engineers, programmers, and research and development specialists. Their expertise enables the company to design, customize, and deploy advanced unmanned aerial vehicle (UAV) solutions aligned with real-world operational requirements. NineTenths supports organizations in adopting cutting-edge technologies aligned with Saudi Vision 2030.

About ISA

The International Society of Automation (ISA) is a nonprofit professional association founded in 1945 to create a better world through automation. ISA’s mission is to empower the global automation community through standards and knowledge sharing. ISA develops widely used global standards and conformity assessment programs, certifies professionals, provides education and training, publishes books and technical articles, hosts conferences and exhibits, and provides networking and career development programs for its members and customers around the world. Learn more at www.isa.org.

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SOURCE The International Society of Automation

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Crest Data More Than Doubles Its Grafana Plugin Portfolio as the Marketplace Reaches General Availability at ObservabilityCON 2026

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17 minutes ago

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October 21, 2026

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SAN FRANCISCO, Oct. 21, 2026 /PRNewswire/ — Crest Data, an AI-first product engineering provider specializing in Observability and Cybersecurity for enterprises and technology innovators, today announced 15 new commercial plugins for Grafana, more than doubling its portfolio in the Grafana Marketplace to 25. The release coincides with Grafana Labs moving the Marketplace to general availability at ObservabilityCON 2026. The new plugins span cloud security, virtualization and data protection platforms, so IT, platform and security teams can monitor those systems in Grafana alongside the telemetry they already have, instead of switching between separate vendor consoles.

The Grafana Marketplace gives enterprises a trusted, commercial channel to discover, license and install production-grade plugins directly from the Grafana catalog.

As a founding Marketplace partner, Crest Data arrives at general availability with a broad portfolio of 25 native, agentless data source plugins that query their source systems through their APIs, with no exporters, no extra collection layer and no data ingestion costs. Built in partnership with Grafana Labs, every plugin ships with pre-built dashboards, so teams can unify security, network, virtualization, SaaS and storage monitoring in a single view.

“Crest Data has been developing integrations used by Fortune 100 customers for years, giving us a deep understanding of what enterprises need to meet their operational, security and compliance requirements,” said Malhar Shah, co-founder and CEO at Crest Data. “Our plugins bring this experience to the community by unifying IT, platform and security monitoring in Grafana with coverage across the security, network, virtualization, SaaS and storage domains.”

“Crest Data brings extensive experience across observability, security and compliance integrations, and we’re delighted to have them as part of the Grafana Marketplace,” said Ash Mazhari, VP of Corporate Development, Grafana Labs. “Crest Data is a leading contributor to the ecosystem, and we’re already seeing strong traction for their plugins from organizations around the world. We look forward to seeing how Crest Data continues to expand what enterprises can achieve with Grafana.”

Crest Data’s full Grafana plugin portfolio includes:

Security: FortiGate, Proofpoint Email Security, Zscaler ZIA, Zscaler ZPA, Cisco ASA, Cisco ISE, Tanium, Wiz, Qualys, Prisma Cloud, TenableNetwork: Cisco Meraki, Akamai, Zscaler ZDX, Infoblox Universal DDIVirtualization: VMware vSphere, Citrix Cloud, Citrix DaaSSaaS: Tableau, Zoom, SharePoint, ConvivaStorage and Data Protection: NetApp ONTAP, Dell PowerScale, Rubrik

To learn more about Crest Data’s Grafana services, including Marketplace plugins, migrations, implementations, customizations and managed services, visit https://www.crestdata.ai/solutions/grafana/

About ObservabilityCON 2026

ObservabilityCON is Grafana Labs’ flagship observability event, bringing together practitioners, experts and leaders to explore the latest innovations in observability and the fast-moving AI era. ObservabilityCON 2026 takes place at Pier 27 in San Francisco from Oct. 19–21, featuring three days of technical sessions, hands-on workshops, live demos, user success stories and opportunities to connect with the Grafana observability community.

About Crest Data

Crest Data is an AI-first product engineering provider specializing in Observability and Cybersecurity for enterprises and technology innovators. We design, build and operate intelligent platforms across security, observability, AI, cloud and data. Through deep engineering expertise and AI-led integrations and migrations, Crest Data helps organizations improve visibility, modernize technology platforms and build resilient, future-ready operations. Learn more at https://www.crestdata.ai/ 

 

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SOURCE Crest Data

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