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Blackbaud Announces 2020 Fourth Quarter and Full Year Results
Fourth Quarter Recurring Revenue Increases 4.4% Year-Over-Year; 2021 Financial Outlook will be Provided on Earnings Conference Call

CHARLESTON, S.C., Feb. 8, 2021 /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the world's leading cloud software company powering social good, today announced financial results for its fourth quarter and full year ended December 31, 2020.

"We finished the year strong with fourth quarter results that showcase our ability to operationally scale through a balance of revenue growth and significantly improved profitability, and I want to say thank you to our employees for stepping up in a big way this year to support each other, our customers, our communities and Blackbaud," said Mike Gianoni, president and CEO, Blackbaud. "Without a doubt, 2020 tested the industry and underscored the resiliency of our over 45,000 customers as they serve such a critical role in solving the challenges we face as a society. This past year put a spotlight on the need for digital capabilities as social good organizations worked to pivot their own operations and strategic roadmaps to ensure they continue to deliver on their missions in the current environment. Looking ahead to 2021, I'm increasingly optimistic about the opportunity in front of us. We are already underway executing against our own strategic plan that will move us further toward our long-term aspirational goal of achieving the Rule of 40 through a balance of revenue growth and improved profitability, and we believe our fourth quarter results are a solid early indicator that over time this goal is within our reach."

Fourth Quarter 2020 Results Compared to Fourth Quarter 2019 Results:

  • Total GAAP revenue was $242.6 million, up 2.0%, with $229.5 million in GAAP recurring revenue, up 4.4%.
  • Total non-GAAP revenue was $242.6 million, up 1.9%, with $229.5 million in non-GAAP recurring revenue, up 4.3%.
  • Non-GAAP organic recurring revenue increased 4.3%.
  • GAAP loss from operations was $0.9 million, with GAAP operating margin of (0.4)%, a decrease of 190 basis points.
  • Non-GAAP income from operations was $58.3 million, with non-GAAP operating margin of 24.0%, an increase of 910 basis points.
  • GAAP net loss was $13.6 million, with GAAP diluted loss per share of $0.28, down $0.31 per share.
  • Non-GAAP net income was $42.0 million, with non-GAAP diluted earnings per share of $0.85, up $0.34 per share.
  • Non-GAAP adjusted EBITDA was $68.9 million, up $25.2 million, with non-GAAP adjusted EBITDA margin of 28.4%.
  • Non-GAAP free cash flow was $24.8 million, a decrease of $21.3 million.

"Strong performance in year-end giving for many of our customers drove record transaction volumes and highlights the resilience of the market as we head into 2021," said Tony Boor, executive vice president and CFO. "Our early cost actions in response to the pandemic allowed us to continue making critical investments in the business in areas like engineering, security, our continued shift of cloud infrastructure to third party cloud service providers, and the maturation of our go-to-market strategy. We have a significant opportunity to leverage investments in digital marketing to reduce our customer acquisition cost and increase our sales velocity, ultimately driving a more scalable and cost-effective go-to-market model. As we plan for a more flexible future of work at Blackbaud, we're exiting the year having reduced our real estate footprint by roughly half, which drove approximately $16 million of one-time expense reflected in our non-GAAP adjustments and a cash outlay of $20 million in the quarter. This is expected to generate substantial cost savings going forward. In light of our heightened focus on operational efficiency and flexible workforce strategy going forward, we also revisited elements of our tax planning strategy and wrote off certain tax assets resulting in an increase in our effective tax rate for the fourth quarter that will not repeat in 2021. This tax impact is also reflected in our non-GAAP adjustments for the quarter. Looking ahead, there are significant opportunities in front of us to strengthen the business and elevate our financial profile, and we believe that steady execution against the Rule of 40 financial framework, paired with our updated capital deployment strategy, will drive substantial shareholder value."

Recent Company Highlights

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

Full-Year 2020 Results Compared to Full-Year 2019 Results:

  • Total GAAP revenue was $913.2 million, up 1.4%, with $850.7 million in GAAP recurring revenue, up 2.3%.
  • Total non-GAAP revenue was $913.2 million, up 1.2%, with $850.7 million in non-GAAP recurring revenue, up 2.1%.
  • Non-GAAP organic recurring revenue increased 2.1%.
  • GAAP income from operations was $37.2 million, with GAAP operating margin of 4.1%, an increase of 110 basis points.
  • Non-GAAP income from operations was $194.8 million, with non-GAAP operating margin of 21.3%, an increase of 450 basis points.
  • GAAP net income was $7.7 million, with GAAP diluted earnings per share of $0.16, down $0.09.
  • Non-GAAP net income was $143.3 million, with non-GAAP diluted earnings per share of $2.94, up $0.70.
  • Non-GAAP adjusted EBITDA was $241.9 million, up $53.1 million, with non-GAAP adjusted EBITDA margin of 26.5%.
  • Non-GAAP free cash flow was $76.1 million, a decrease of $48.0 million.

An explanation of all non-GAAP financial measures referenced in this press release is included below under the heading "Non-GAAP Financial Measures." A reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Conference Call Details
What:        Blackbaud's Fourth Quarter and Full Year 2020 Conference Call
When:       February 9, 2021
Time:        8:00 a.m. (Eastern Time)
Live Call:  1-877-407-3088 (US/Canada)
Webcast:  Blackbaud's Investor Relations Webpage

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

Investor Contact:

 

Media Contact:

 

Steve Hufford

 

media@blackbaud.com

 

Director, Investor Relations

     

IR@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; the security of our data and that of our customers; uncertainty regarding the COVID-19 disruption; 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. This information includes non-GAAP revenue, non-GAAP recurring revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share. Blackbaud has acquired businesses whose net tangible assets include deferred revenue. In accordance with GAAP reporting requirements, Blackbaud recorded write-downs of deferred revenue to fair value, which resulted in lower recognized revenue. Both on a quarterly and year-to-date basis, the revenue for the acquired businesses is deferred and typically recognized over a one-year period, so Blackbaud's GAAP revenues for the one-year period after the acquisitions will not reflect the full amount of revenues that would have been reported if the acquired deferred revenue was not written down to fair value. The non-GAAP measures described above reverse the acquisition-related deferred revenue write-downs so that the full amount of revenue booked by the acquired companies is included, which Blackbaud believes provides a more accurate representation of a revenue run-rate in a given period. In addition to reversing write-downs of acquisition-related deferred revenue, non-GAAP financial measures discussed above exclude the impact of certain items that Blackbaud believes are not directly related to its performance in any particular period, but are for its long-term benefit over multiple periods.

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

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

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

Blackbaud uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Blackbaud's ongoing operational performance. Blackbaud believes that these non-GAAP financial measures reflect Blackbaud's ongoing business in a manner that allows for meaningful period-to-period comparison and analysis of trends in its business. In addition, Blackbaud believes that the use of these non-GAAP financial measures provides additional information for investors to use in evaluating ongoing operating results 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 differences in the exact method of calculation between companies. 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 reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.

 

Blackbaud, Inc.

Consolidated Balance Sheets

(Unaudited)

 

(dollars in thousands)

December 31,
2020

December 31,
2019

Assets

   

Current assets:

   

Cash and cash equivalents

$

35,750

 

$

31,810

 

Restricted cash

609,219

 

545,485

 

Accounts receivable, net of allowance of $10,292 and $5,529 at
December 31, 2020 and December 31, 2019, respectively

95,404

 

88,868

 

Customer funds receivable

321

 

524

 

Prepaid expenses and other current assets

78,366

 

67,852

 

Total current assets

819,060

 

734,539

 

Property and equipment, net

105,177

 

35,546

 

Operating lease right-of-use assets

22,671

 

104,400

 

Software development costs, net

111,827

 

101,302

 

Goodwill

635,854

 

634,088

 

Intangible assets, net

277,506

 

317,895

 

Other assets

72,639

 

65,193

 

Total assets

$

2,044,734

 

$

1,992,963

 

Liabilities and stockholders' equity

   

Current liabilities:

   

Trade accounts payable

$

27,836

 

$

47,676

 

Accrued expenses and other current liabilities

52,228

 

73,317

 

Due to customers

608,264

 

546,009

 

Debt, current portion

12,840

 

7,500

 

Deferred revenue, current portion

312,236

 

314,335

 

Total current liabilities

1,013,404

 

988,837

 

Debt, net of current portion

518,193

 

459,600

 

Deferred tax liability

54,086

 

44,594

 

Deferred revenue, net of current portion

4,678

 

1,802

 

Operating lease liabilities, net of current portion

17,357

 

95,624

 

Other liabilities

10,866

 

5,742

 

Total liabilities

1,618,584

 

1,596,199

 

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,
60,904,638 and 60,206,091 shares issued at December 31, 2020 and
December 31, 2019, respectively

61

 

60

 

Additional paid-in capital

544,963

 

457,804

 

Treasury stock, at cost; 12,054,268 and 11,066,354 shares at December 31,
2020 and December 31, 2019, respectively

(353,091)

 

(290,665)

 

Accumulated other comprehensive loss

(2,497)

 

(5,290)

 

Retained earnings

236,714

 

234,855

 

Total stockholders' equity

426,150

 

396,764

 

Total liabilities and stockholders' equity

$

2,044,734

 

$

1,992,963

 

 

 

Blackbaud, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)

 

(dollars in thousands, except per share amounts)

Three months ended
December 31,

 

Years ended
December 31,

2020

2019

 

2020

2019

Revenue

         

Recurring

$

229,516

 

$

219,820

   

$

850,745

 

$

831,609

 

One-time services and other

13,090

 

18,019

   

62,474

 

68,814

 

Total revenue

242,606

 

237,839

   

913,219

 

900,423

 

Cost of revenue

         

Cost of recurring

104,509

 

98,975

   

369,681

 

357,988

 

Cost of one-time services and other

15,067

 

17,562

   

58,384

 

60,436

 

Total cost of revenue

119,576

 

116,537

   

428,065

 

418,424

 

Gross profit

123,030

 

121,302

   

485,154

 

481,999

 

Operating expenses

         

Sales, marketing and customer success

50,613

 

58,189

   

209,762

 

224,152

 

Research and development

27,491

 

25,860

   

100,146

 

106,164

 

General and administrative

45,023

 

28,857

   

134,852

 

113,414

 

Amortization

696

 

2,085

   

2,915

 

5,316

 

Restructuring

57

 

2,725

   

236

 

5,808

 

Total operating expenses

123,880

 

117,716

   

447,911

 

454,854

 

Income from operations

(850)

 

3,586

   

37,243

 

27,145

 

Interest expense

(5,238)

 

(4,385)

   

(17,287)

 

(20,618)

 

Other (expense) income, net

(584)

 

(463)

   

1,658

 

4,058

 

(Loss) income before provision (benefit) for income
taxes

(6,672)

 

(1,262)

   

21,614

 

10,585

 

Income tax provision (benefit)

6,949

 

(2,586)

   

13,897

 

(1,323)

 

Net (loss) income

$

(13,621)

 

$

1,324

   

$

7,717

 

$

11,908

 

(Loss) earnings per share

         

Basic

$

(0.28)

 

$

0.03

   

$

0.16

 

$

0.25

 

Diluted

$

(0.28)

 

$

0.03

   

$

0.16

 

$

0.25

 

Common shares and equivalents outstanding

         

Basic weighted average shares

48,190,388

 

47,777,635

   

48,184,714

 

47,695,383

 

Diluted weighted average shares

48,190,388

 

48,572,575

   

48,696,341

 

48,312,271

 

Other comprehensive income (loss)

         

Foreign currency translation adjustment

6,525

 

7,962

   

4,571

 

2,641

 

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

(150)

 

413

   

(1,778)

 

(2,821)

 

Total other comprehensive income (loss)

6,375

 

8,375

   

2,793

 

(180)

 

Comprehensive (loss) income

$

(7,246)

 

$

9,699

   

$

10,510

 

$

11,728

 

 

 

Blackbaud, Inc.

Consolidated Statements of Cash Flows

(Unaudited) 

 
 

Years ended
December 31,

(dollars in thousands)

2020

2019

Cash flows from operating activities

   

Net income

$

7,717

 

$

11,908

 

Adjustments to reconcile net income to net cash provided by operating activities:

   

Depreciation and amortization

92,735

 

85,693

 

Provision for credit losses and sales returns

13,230

 

8,725

 

Stock-based compensation expense

87,257

 

58,633

 

Deferred taxes

8,837

 

(3,600)

 

Amortization of deferred financing costs and discount

781

 

752

 

Other non-cash adjustments

2,958

 

4,906

 

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

   

Accounts receivable

(18,414)

 

(6,569)

 

Prepaid expenses and other assets

22,568

 

6,383

 

Trade accounts payable

(19,997)

 

12,900

 

Accrued expenses and other liabilities

(49,232)

 

(9,718)

 

Deferred revenue

(485)

 

12,464

 

Net cash provided by operating activities

147,955

 

182,477

 

Cash flows from investing activities

   

Purchase of property and equipment

(29,690)

 

(11,492)

 

Capitalized software development costs

(42,157)

 

(46,874)

 

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

 

(109,353)

 

Other investing activities

 

500

 

Net cash used in investing activities

(71,847)

 

(167,219)

 

Cash flows from financing activities

   

Proceeds from issuance of debt

748,500

 

424,000

 

Payments on debt

(747,563)

 

(344,500)

 

Debt issuance costs

(4,586)

 

 

Employee taxes paid for withheld shares upon equity award settlement

(21,425)

 

(23,781)

 

Proceeds from exercise of stock options

4

 

7

 

Change in due to customers

61,214

 

77,793

 

Change in customer funds receivable

138

 

1,301

 

Purchase of treasury stock

(41,001)

 

 

Dividend payments to stockholders

(5,960)

 

(23,607)

 

Net cash (used in) provided by financing activities

(10,679)

 

111,213

 

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

2,245

 

978

 

Net increase in cash, cash equivalents and restricted cash

67,674

 

127,449

 

Cash, cash equivalents and restricted cash, beginning of year

577,295

 

449,846

 

Cash, cash equivalents and restricted cash, end of year

$

644,969

 

$

577,295

 

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,
2020

December 31,
2019

Cash and cash equivalents

$

35,750

 

$

31,810

 

Restricted cash

609,219

 

545,485

 

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

$

644,969

 

$

577,295

 
 

 

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,

2020

2019

 

2020

2019

GAAP Revenue

$

242,606

 

$

237,839

   

$

913,219

 

$

900,423

 

Non-GAAP adjustments:

         

Add: Acquisition-related deferred revenue write-down

 

241

   

 

1,932

 

Non-GAAP revenue

$

242,606

 

$

238,080

   

$

913,219

 

$

902,355

 
           

GAAP gross profit

$

123,030

 

$

121,302

   

$

485,154

 

$

481,999

 

GAAP gross margin

50.7

%

51.0

%

 

53.1

%

53.5

%

Non-GAAP adjustments:

         

Add: Acquisition-related deferred revenue write-down

 

241

   

 

1,932

 

Add: Stock-based compensation expense

6,251

 

817

   

13,374

 

3,366

 

Add: Amortization of intangibles from business
combinations

9,133

 

10,799

   

38,968

 

44,769

 

Add: Employee severance

94

 

87

   

907

 

1,221

 

Subtotal

15,478

 

11,944

   

53,249

 

51,288

 

Non-GAAP gross profit

$

138,508

 

$

133,246

   

$

538,403

 

$

533,287

 

Non-GAAP gross margin

57.1

%

56.0

%

 

59.0

%

59.1

%

           

GAAP (loss) income from operations

$

(850)

 

$

3,586

   

$

37,243

 

$

27,145

 

GAAP operating margin

(0.4)

%

1.5

%

 

4.1

%

3.0

%

Non-GAAP adjustments:

         

Add: Acquisition-related deferred revenue write-down

 

241

   

 

1,932

 

Add: Stock-based compensation expense

32,701

 

15,012

   

87,257

 

58,633

 

Add: Amortization of intangibles from business
combinations

9,829

 

12,884

   

41,883

 

50,085

 

Add: Employee severance

282

 

765

   

4,875

 

4,425

 

Add: Acquisition-related integration costs

(16)

 

189

   

(134)

 

2,395

 

Add: Acquisition-related expenses

65

 

132

   

353

 

1,162

 

Add: Restructuring and other real estate activities

16,273

 

2,725

   

23,290

 

5,808

 

Subtotal

59,134

 

31,948

   

157,524

 

124,440

 

Non-GAAP income from operations

$

58,284

 

$

35,534

   

$

194,767

 

$

151,585

 

Non-GAAP operating margin

24.0

%

14.9

%

 

21.3

%

16.8

%

           

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

$

(6,672)

 

$

(1,262)

   

$

21,614

 

$

10,585

 

GAAP net (loss) income

$

(13,621)

 

$

1,324

   

$

7,717

 

$

11,908

 
           

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

48,190,388

 

48,572,575

   

48,696,341

 

48,312,271

 

GAAP diluted (loss) earnings per share

$

(0.28)

 

$

0.03

   

$

0.16

 

$

0.25

 
           

Non-GAAP adjustments:

         

Add: GAAP income tax provision (benefit)

6,949

 

(2,586)

   

13,897

 

(1,323)

 

Add: Total non-GAAP adjustments affecting income from
operations

59,134

 

31,948

   

157,524

 

124,440

 

Non-GAAP income before provision for income taxes

52,462

 

30,686

   

179,138

 

135,025

 

Assumed non-GAAP income tax provision(1)

10,492

 

6,137

   

$

35,827

 

$

27,005

 

Non-GAAP net income

$

41,970

 

$

24,549

   

$

143,311

 

$

108,020

 
           

Shares used in computing non-GAAP diluted earnings per
share

49,097,084

 

48,572,575

   

48,696,341

 

48,312,271

 

Non-GAAP diluted earnings per share

$

0.85

 

$

0.51

   

$

2.94

 

$

2.24

 
   

(1)

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,

2020

2019

 

2020

2019

GAAP revenue

$

242,606

 

$

237,839

   

$

913,219

 

$

900,423

 

GAAP revenue growth

2.0

%

   

1.4

%

 

Add: Non-GAAP acquisition-related revenue(1)

 

241

   

 

1,932

 

Non-GAAP organic revenue(2)

$

242,606

 

$

238,080

   

$

913,219

 

$

902,355

 

Non-GAAP organic revenue growth

1.9

%

   

1.2

%

 
           

Non-GAAP organic revenue(2)

$

242,606

 

$

238,080

   

$

913,219

 

$

902,355

 

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

(742)

 

   

780

 

 

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

$

241,864

 

$

238,080

   

$

913,999

 

$

902,355

 

Non-GAAP organic revenue growth on constant
currency basis

1.6

%

   

1.3

%

 
           

GAAP recurring revenue

$

229,516

 

$

219,820

   

$

850,745

 

$

831,609

 

GAAP recurring revenue growth

4.4

%

   

2.3

%

 

Add: Non-GAAP acquisition-related revenue(1)

 

241

   

 

1,932

 

Non-GAAP organic recurring revenue

$

229,516

 

$

220,061

   

$

850,745

 

$

833,541

 

Non-GAAP organic recurring revenue growth

4.3

%

   

2.1

%

 
   

(1)

Non-GAAP acquisition-related revenue excludes incremental acquisition-related revenue calculated in accordance with GAAP that is attributable
to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, non-GAAP acquisition-related
revenue reflects presentation of full-year incremental non-GAAP revenue derived from such companies, as if they were combined throughout the
prior period, and it includes the non-GAAP revenue from the acquisition-related deferred revenue write-down attributable to those companies.

(2)

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

(3)

To determine non-GAAP organic 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,

2020

2019

 

2020

2019

GAAP net income

$

(13,621)

 

$

1,324

   

$

7,717

 

$

11,908

 

Non-GAAP adjustments:

         

Add: Interest, net

4,976

 

4,009

   

15,627

 

17,816

 

Add: GAAP income tax provision (benefit)

6,949

 

(2,586)

   

13,897

 

(1,323)

 

Add: Depreciation(1)

3,731

 

3,706

   

14,589

 

14,979

 

Add: Amortization of intangibles from business
combinations

9,829

 

12,884

   

41,883

 

50,085

 

Add: Amortization of software development costs(2)

7,712

 

5,265

   

32,540

 

20,999

 

Subtotal

33,197

 

23,278

   

118,536

 

102,556

 

Non-GAAP EBITDA

$

19,576

 

$

24,602

   

$

126,253

 

$

114,464

 

Non-GAAP EBITDA margin

8.1

%

   

13.8

%

 
           

Non-GAAP adjustments:

         

Add: Acquisition-related deferred revenue write-down

 

241

   

 

1,932

 

Add: Stock-based compensation expense

32,701

 

15,012

   

87,257

 

58,633

 

Add: Employee severance

282

 

765

   

4,875

 

4,425

 

Add: Acquisition-related integration costs

(16)

 

189

   

(134)

 

2,395

 

Add: Acquisition-related expenses

65

 

132

   

353

 

1,162

 

Add: Restructuring and other real estate activities

16,273

 

2,725

   

23,290

 

5,808

 

Subtotal

49,305

 

19,064

   

115,641

 

74,355

 

Adjusted Non-GAAP EBITDA

$

68,881

 

$

43,666

   

$

241,894

 

$

188,819

 

Adjusted Non-GAAP EBITDA margin

28.4

%

   

26.5

%

 
           

Rule of 40 (3)

30.3

%

   

27.7

%

 
   

(1)

During the third quarter of 2020, we reduced the estimated useful lives of our operating lease right-of-use assets for certain of our office
locations we expected to exit. For these same office locations, we also reduced the estimated useful lives of certain facilities-related fixed
assets, which resulted in an increase in depreciation expense. The accelerated portions of the fixed asset depreciation expense related to
these activities of $3.2 million and $4.6 million for the three and twelve months ended December 31, 2020, respectively, was presented in
the "Restructuring and other real estate activities" line of the reconciliation of GAAP to non-GAAP financial measures. Total depreciation
expense for the three and twelve months ended December 31, 2020 was $6.9 million and $19.2 million, respectively.

(2)

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

(3)

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

   

(dollars in thousands)

Years ended
December 31,

2020

2019

GAAP net cash provided by operating activities

$

147,955

 

$

182,477

 

Less: purchase of property and equipment

(29,690)

 

(11,492)

 

Less: capitalized software development costs

(42,157)

 

(46,874)

 

Non-GAAP free cash flow

$

76,108

 

$

124,111

 

 

 

Power your passion (PRNewsfoto/Blackbaud)

 

 

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SOURCE Blackbaud, Inc.