Technology

Blackbaud Announces 2023 Fourth Quarter and Full Year Results

Published

2 years ago

February 12, 2024

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

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

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

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

—

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

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

—

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

Technology

Innowise Named to 2026 CRN Tech Elite 250 List By The Channel Company

Published

3 hours ago

April 26, 2026

WARSAW, Poland, April 26, 2026 /PRNewswire-PRWeb/ — Innowise has officially secured a position on CRN’s 2026 Tech Elite 250. This annual ranking identifies IT solution providers across the US and Canada that have achieved top-tier status within the partner programs of the industry’s leading technology vendors. The inclusion follows a period of verified growth in technical proficiency and a focus on high-impact engineering.

“Innowise concentrates on creating scalable, resilient architectures that produce measurable benefits for our clients. The honor of being recognized by CRN highlights the commitment of our experts to maintain high standards in highly competitive markets,” said Dmitry Nazarevich, CTO at Innowise.

About the Tech Elite 250

The Tech Elite 250 is a directory of companies recognized as having the highest level of partnership and certifications within the global IT ecosystem. In order to reach the final list, the provider must hold the most advanced technical credentials from vendors like AWS, Cisco, Dell, HPE, IBM, Intel, Nutanix, and Nvidia.

This directory serves as a verified ledger for enterprise clients who need to orchestrate complex hardware and software stacks without letting legacy environments rot. Holding these certifications is mandatory to stop the cash bleed caused by inefficient infrastructure and unoptimized cloud usage.

About Innowise

Founded in 2007, Innowise is a global software engineering and IT consulting center. The company is focused on developing high-value technologies, including artificial intelligence, data engineering, and cloud computing. Innowise crafts technological solutions for companies across 40+ domains in order to assist them in updating, creating, and modernizing their digital ecosystems.

Innowise specializes in using established technologies and modular approaches to enable organizations to expand or shift their operations while retaining complete control over all their physical and intangible assets.

Media Contact

Lizaveta Piaskova, Innowise, 48 48 787 027 706, lizaveta.piaskova@innowise.com, innowise.com

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SOURCE Innowise

Technology

Neusoft Showcases Full-Stack & Global Innovations at Auto China 2026

Published

6 hours ago

April 26, 2026

BEIJING, April 26, 2026 /PRNewswire/ — At Auto China 2026, Neusoft Corporation hosted a press conference on April 25th and announced three key strategic moves: the iteration of Neusoft OneCoreGo® Global In-Vehicle Intelligent Mobility Solution 7.0, the launch of Neusoft NAGIC.AI Cockpit Software Platform, and the strategic upgrade of its subsidiary, Neusoft Smart Go. By leveraging full-stack technology and a global ecosystem to drive innovation and empowerment, Neusoft is transforming vehicles into proactive, connected and collaborative mobile intelligent spaces.

OneCoreGo® Global In-Vehicle Intelligent Mobility Solution 7.0: An Evolved AI Companion for Global Intelligent Mobility

Intelligent mobility requires proactive perception, scenario integration, and global connectivity to meet personalized user needs and complex driving scenarios. Neusoft, whose products cover over 130 countries and regions worldwide, addresses these challenges with its OneCoreGo® Global In-Vehicle Intelligent Mobility Solution 7.0 through AI-driven innovation and global ecosystem collaboration. Powered by One Mate’s cross-agent collaboration and a sub-product matrix including One Map, One Sight, One Cloud, One Pay, One Store, One Link, and One Guard, the solution delivers full-link global mobility services spanning navigation, in-cabin AR, payment, app ecosystem services, connectivity and security. By breaking down functional silos, it streamlines multi-step operations into a single “depart” command, leveraging full-stack AI technology across perception, decision-making, interaction, and execution processes.

Guan Xin, Vice President of Neusoft and General Manager of Neusoft Automotive Innovative Solutions Division, said, “Adhering to the core principles of AI and globalization, OneCoreGo® 7.0 keeps innovating, evolving into a globally intelligent mobility companion that truly understands user needs.”

To enhance driving safety and mobility efficiency, OneCoreGo® 7.0 has also comprehensively upgraded its sub-products: One Map Global Navigation newly introduces 3D city effects, 3D lane-level maps, and traffic light guidance, offering dedicated solutions for two-wheelers and commercial vehicles as well. One Sight AR For Car improves navigation display effects, reducing instances of taking wrong routes. One Pay In-Vehicle Payment achieves over 90% payment coverage for parking services across core European cities. Combined with One Cloud’s global compliance cloud monitoring platform and One Guard’s full-stack vehicle networking security services, it creates a truly comprehensive OneCoreGo® Global In-Vehicle Intelligent Mobility Solution.

Neusoft NAGIC.AI Cockpit Software Platform: Dual-track Architecture for AI Integration in Every Vehicle

Amid the AI-driven transformation of the automotive industry, the market faces two challenges: limited computing power in legacy vehicles and high adaptation difficulties for next-gen models. Neusoft’s NAGIC.AI Cockpit Software Platform adopts a flexible “distributed + centralized” dual-track architecture approach. For existing vehicle models, it introduces the AI BOX solution, rapidly boosting computing power via external AI computing units, significantly reducing upgrade costs and timelines. For new vehicle models built on next-gen central computing platforms, Neusoft provides a full-stack AI cockpit software product suite, meeting automakers’ stringent requirements for system stability, reliability, and full-domain control.

Pang Hongyan, Vice President of Neusoft and General Manager of the Automotive Intelligent Software Division, said, “Our dual-track architecture enables every vehicle to embrace AI and enjoy an intelligent future. Both existing models and new-generation vehicles can find the most suitable path to intelligentization.”

Moreover, Neusoft’s NAGIC.AI Cockpit Software Platform features scenario-based, human-centric AI Agents seamlessly integrating driving safety, occupant care services, intelligent assisted driving and in-cabin entertainment. Neusoft also collaborates with global ecosystem partners to drive intelligent upgrades of in-cabin interaction products, fostering a more open and dynamic intelligent cockpit ecosystem.

Strategic Upgrade of Neusoft Smart Go: A World-leading Provider of Full-Domain Upper-Body Electronics Solutions for Intelligent Vehicles

Aligning with the trend of E/E architecture evolution from distributed control to “central computing + zonal control”, Neusoft Smart Go, a subsidiary of Neusoft in the field of intelligent vehicle connectivity, has completed a strategic upgrade, aiming to become a global leader in full-domain upper-body electronics solutions for intelligent vehicles.

This strategic upgrade positions Neusoft Smart Go to focus on full-domain scenarios in upper-body electronics, building a product matrix covering full-category in-vehicle electronics solutions, including central computing platforms, cockpit-driving-parking integration, intelligent cockpits, intelligent communications, intelligent audio systems, and zonal control units, and pioneering the integration of large model algorithms.

Jian Guodong, Senior Vice President of Neusoft and CEO of Neusoft Smart Go, said, “This strategic upgrade represents a significant leap from partial focus to comprehensive layout. Through our dual-track strategy of high-end cutting-edge solutions and mature standardized products, we can flexibly meet the mass production needs of vehicle models across different regions and price segments worldwide.” Neusoft Smart Go will provide mass-producible, adaptable hardware-software integrated solutions, empowering global automakers in achieving intelligent transformation.

Neusoft’s President, Mr.Gai Longjia stated, “In the future, Neusoft Smart Go will create stronger synergy with Neusoft Corporation by sharing internal technologies and capabilities while responding jointly to external demands. This specialized yet collaborative model will preserve business unit’s agility and expertise while enhancing Neusoft’s full-stack technological advantages.”

As a trusted partner in a smarter world, Neusoft is committed to collaborating with global automakers and ecosystem partners to build an open and inclusive intelligent automotive community together for the future of global mobility.

For more information about Neusoft, please visit www.neusoft.com.

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SOURCE Neusoft Corporation

Technology

Lianlian DigiTech Returns to Money20/20 Asia to Expand Partnerships, Share Industry Trends, and Explore AI-Enabled Global Financial Infrastructure

Published

10 hours ago

April 26, 2026

BANGKOK, April 26, 2026 /PRNewswire/ — Lianlian DigiTech, a leading global provider of digital payment services, was once again invited to participate in Money20/20 Asia, one of the world’s most influential fintech gatherings, held in Bangkok, Thailand from April 21 to 23. At the event, the company presented its latest developments in cross-border payment infrastructure, technology innovation, and ecosystem collaboration, offering a comprehensive view of its work enhancing global cross-border payment capabilities.

During the conference, Lianlian DigiTech announced a strategic partnership with UK-based fintech company USI Money to further strengthen its global cross-border payment network, delivering more efficient and reliable fund flows for merchants worldwide. Shen Enguang, Co-President of Lianlian DigiTech; Mark Ma, Head of Global Banking Partnership at LianLian Global; and Bryan Jiang, General Manager Hong Kong of LianLian Global, attended the event and engaged with representatives from international financial institutions. They shared perspectives on fintech trends and global payment innovation, offering industry insight into the continued evolution of a more integrated and interoperable cross-border payments ecosystem.

Building a Borderless Payment Network with Global Partners Including USI Money

At the event, Lianlian DigiTech formalized a strategic collaboration with London-headquartered USI Money to further develop its global payment infrastructure.

The partnership will focus on cross-border remittance and foreign exchange services, combining both companies’ technological capabilities and resources to deliver a one-stop payment and collection solution for global businesses. The offering is built to be efficient, secure, and cost-effective, improving overall fund flow efficiency and streamlining foreign exchange execution.

Syed Bukhari, Group Chief Business and Operating Officer at USI Money, said: “Our partnership with Lianlian will strengthen our remittance capabilities, creating greater value for our customers through broader network coverage and improved transaction performance.”

Bryan Jiang, General Manager Hong Kong of LianLian Global, said: “By leveraging the complementary strengths of our ecosystem partners in technology and compliance, Lianlian will continue to scale its global payment network and improve transaction efficiency. We remain committed to enhancing financial connectivity across global financial markets and delivering more efficient and reliable cross-border payment solutions for our customers.”

Founded in 2009 and listed on the Main Board of the Hong Kong Stock Exchange in 2024 (2598.HK), Lianlian DigiTech is a China-based, globally focused digital payment company with increasingly integrated AI capabilities across its platform. Guided by its mission of “Connecting the world, Empowering global commerce,” the company focuses on developing a trusted and scalable financial infrastructure. As of the end of 2025, Lianlian DigiTech has built a cross-border payment network covering more than 100 countries and regions, serving over 10.4 million customers worldwide.

USI Money is a foreign exchange and international remittance service provider offering tailored cross-border financial solutions for businesses and individuals. With competitive real-time exchange rates and efficient execution as its core strengths, the company delivers fast, secure, and reliable global fund transfers.

In addition, Lianlian DigiTech co-hosted a networking session with Unlimit during the event, providing a forum for industry dialogue. The session brought together a broad group of fintech partners to explore collaborative models and help foster a more connected ecosystem.

Industry Roundtables: Unlocking Layered Collaboration in AI-Driven Cross-Border Payments and Advancing Financial Inclusion in Emerging Markets

At the same time, Mark Ma and Bryan Jiang were invited to the themed roundtable discussions, where they shared insights drawn from industry practice and outlined new approaches to aligning fintech innovation with the global financial system.

At the roundtable on “Fintech and Banks,” Mark Ma noted that the global payment system is rapidly shifting from isolated capabilities to a layered, collaborative model. Banks continue to serve as the foundational infrastructure, responsible for clearing networks and liquidity management. Fintech firms like Lianlian, meanwhile, build on top of this foundation to deliver application-layer services for businesses, transforming complex cross-border payment channels into more accessible solutions that support a wider range of practical business scenarios. He also emphasized fintech’s growing role in compliance and value creation. By embedding risk controls and verification processes into technology workflows, fintech companies can act as compliance intermediaries, improving efficiency while filtering risk and enabling banks to operate more effectively at scale. Meanwhile, insights derived from transaction data and business flows allow for more precise evaluation of small and medium-sized businesses, shifting capital allocation from experience-based decisions to data-driven approaches and improving access to financial services.

At the roundtable titled “Different Worlds, Shared Challenges: Bridging Emerging Markets,” Bryan Jiang pointed out that the core of financial inclusion is shifting from scale of coverage to practical usability in everyday financial activity. The ability to serve underserved segments such as small and micro merchants and overseas workers in a sustained and reliable manner ultimately depends on continuous improvements in product design and operational capabilities. Using emerging markets as an example, Jiang explained that small and medium-sized businesses in these regions often face challenges such as difficult account setup, complex cross-border collections, high foreign exchange costs, and multi-layered tax requirements. Many existing solutions still follow traditional business-focused models, resulting in cumbersome KYB processes and lengthy review cycles that are misaligned with the asset-light, high-frequency, fast-turnover nature of these businesses. In response, Lianlian has lowered barriers to fund flows by offering local collection accounts, optimizing foreign exchange mechanisms, and improving settlement efficiency. The company has also restructured account architecture, streamlined review processes, and enhanced fund visibility, creating a more seamless and intuitive user experience that better aligns financial services with its clients’ business operations and day-to-day activities.

As digital technologies increasingly integrate with the real economy, innovations in AI and blockchain are reshaping the foundations of global financial services. Lianlian DigiTech has long invested in AI capabilities, global compliance, and the growth of its international service network. Its broad licensing coverage, regulatory track record, localized service capabilities, and technical reliability have earned the trust of regulators, customers, and partners worldwide.

Looking ahead, Lianlian DigiTech will continue to build on its cross-border expertise and compliance experience to further develop its AI capabilities and deepen collaboration with global partners. The company aims to extend its role beyond payment network services into more integrated financial infrastructure solutions. Lianlian DigiTech remains committed to serving as a trusted platform for global financial transactions in an increasingly digital environment, enabling businesses and individuals worldwide to access faster, more efficient, and more seamless cross-border financial services.

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SOURCE LianLian Global