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Blackbaud Announces 2022 Second Quarter Results

Second Quarter Total Revenue Increases 15% Year-Over-Year with First Half 2022 Non-GAAP Organic Recurring Revenue Growth of 6%; Updates Full Year 2022 Financial Guidance

CHARLESTON, S.C., Aug. 2, 2022 /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the world's leading cloud software company powering social good, today announced financial results for its second quarter ended June 30, 2022.

"Our financial results for the quarter and through the first half of 2022 paced ahead of our plan," said Mike Gianoni, president and CEO, Blackbaud. "We are uniquely positioned as a market leader in our space, and we continue to sharpen our focus on delivering a best-in-class experience for our customers, which is resulting in longer term commitments with future opportunity to deepen these relationships and forge new ones. We continue to monitor the macro environment and remain confident in our core business as well as our ability to execute incremental program initiatives already underway as we look to balance operating discipline with strategic investments to drive sustainable growth and improving profitability."

Second Quarter 2022 Results Compared to Second Quarter 2021 Results:
  • GAAP total revenue was $264.9 million, up 15.5%, with $252.5 million in GAAP recurring revenue, up 16.4%.
  • Non-GAAP organic recurring revenue increased 5.1%.
  • GAAP income from operations was $0.1 million, inclusive of security incident-related costs, net of insurance of $8.3 million, with GAAP operating margin of 0.0%, a decrease of 570 basis points.
  • Non-GAAP income from operations was $54.5 million, with non-GAAP operating margin of 20.6%, a decrease of 300 basis points.
  • GAAP net loss was $3.4 million, with GAAP diluted loss per share of $0.07, down $0.21 per share.
  • Non-GAAP net income was $38.9 million, with non-GAAP diluted earnings per share of $0.75, down $0.07 per share.
  • Non-GAAP adjusted EBITDA was $70.6 million, up $4.8 million, with non-GAAP adjusted EBITDA margin of 26.6%, an increase of 80 basis points.
  • GAAP net cash provided by operating activities was $57.3 million, a decrease of $12.5 million.
  • Non-GAAP adjusted free cash flow was $43.9 million, a decrease of $15.1 million, with non-GAAP adjusted free cash flow margin of 16.6%, a decrease of 910 basis points.

"We had a strong quarter posting double-digit total revenue growth, mid single-digit organic recurring revenue growth and achieved 32% on Rule of 40 at constant currency," said Tony Boor, executive vice president and CFO, Blackbaud. "We remain committed to executing our capital allocation strategy and continued our track record of balancing sustainable revenue growth and strong profitability in the quarter. With the first half behind us, we've updated our full year financial guidance primarily to account for the evolving macroeconomic conditions such as unfavorable foreign exchange rate movement and higher interest rates, as well as other unforeseen items like the continued drag on total revenue from our mix shift away from one-time services revenues and also updated sales projections for EVERFI. Overall, we remain confident that continued execution against our plan for 2022 has us well positioned to continue progressing toward our long-term goal of achieving Rule of 40."

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 its 2021 Social Responsibility Report sharing how the company is growing and strengthening the entire social good community, empowering its people, stewarding the environment and expanding responsible business practices.
  • Blackbaud hosted its annual Developers' Conference—a three-day event that convenes technology enthusiasts, creators and developers of all levels to reimagine nonprofit technology and build a better world.
  • Blackbaud announced strategic organizational updates to its executive leadership team. Kevin Gregoire has been appointed Chief Operating Officer, David Benjamin has been appointed Chief Commercial Officer and Tom Davidson has been appointed Executive Vice President of Corporations. These changes will enable the company to place increased emphasis on product and technology innovation, customer focus and sales productivity.
  • Blackbaud announced that Deneen DeFiore, vice president and global chief information security officer for United Airlines, has joined its board of directors, bringing more than 20 years of experience in technology and cybersecurity.
  • Blackbaud appointed Chris Singh as Chief Customer Officer. Singh is the first leader to hold the newly created position at Blackbaud, representing a significant next step in the company's commitment to customers and their end-to-end experience.
  • TrustRadius recognized Blackbaud Raiser's Edge NXT® in its Top Rated 2022 Awards. Raiser's Edge NXT was named a Top Rated solution in the Nonprofit CRM, Donor Management and Nonprofit Fundraising categories.
  • Blackbaud announced the launch of Prospect Insights—a new software tool within Blackbaud Raiser's Edge NXT® that enables social good professionals to access actionable, AI-powered insights to drive more major giving.
  • EVERFI announced that it will deploy new educational content specifically designed to support students in developing tools and strategies to avoid reaching the point of a mental health crisis. This content will be supported by EVERFI's strategic partners: HCA Healthcare, Healthy Blue, Johnson County Mental Health Center and National Football League.

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

Financial Outlook

Blackbaud today revised its 2022 full year financial guidance:

  • Non-GAAP revenue of $1.05 billion to $1.07 billion
  • Non-GAAP adjusted EBITDA margin of 23.7% to 24.2%
  • Non-GAAP earnings per share of $2.43 to $2.63
  • Non-GAAP adjusted free cash flow of $140 million to $150 million

Included in its 2022 full year financial guidance are the following assumptions:

  • Non-GAAP annualized effective tax rate is expected to be 20%
  • Interest expense for the year is expected to be approximately $34 million to $37 million
  • Fully diluted shares for the year are expected to be in the range of 52 million to 53.5 million
  • Capital expenditures for the year are expected to be in the range of $60 million to $70 million, including approximately $50 million to $60 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"). For full year 2022, Blackbaud currently expects net cash outlays of $15 million to $25 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. As of June 30, 2022, Blackbaud has not recorded a loss contingency related to the Security Incident as it is unable to reasonably estimate the possible amount or range of such loss. Please refer to the section below titled "Non-GAAP Financial Measures" for more information on Blackbaud's use of non-GAAP financial measures.

Conference Call Details

What:

Blackbaud's 2022 Second Quarter Conference Call

When:

August 3, 2022

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 (CSR) and environmental, social and governance (ESG), school management, ticketing, grantmaking, financial management, payment processing and analytics. Serving the industry for more than four decades, Blackbaud is a remote-first company headquartered in Charleston, South Carolina, with 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; cybersecurity and data protection risks and related liabilities; uncertainty regarding the COVID-19 disruption; potential litigation involving us; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Blackbaud's investor relations department. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Trademarks

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

Non-GAAP Financial Measures

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

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

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

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

June 30,
2022

December 31,
2021

Assets

   

Current assets:

   

Cash and cash equivalents

$           29,029

$           55,146

Restricted cash

449,491

596,616

Accounts receivable, net of allowance of $9,764 and $11,155 at June 30,
2022 and December 31, 2021, respectively

149,237

102,726

Customer funds receivable

1,194

977

Prepaid expenses and other current assets

98,041

95,506

Total current assets

726,992

850,971

Property and equipment, net

111,865

111,428

Operating lease right-of-use assets

50,036

53,883

Software and content development costs, net

130,329

121,377

Goodwill

1,051,230

1,058,640

Intangible assets, net

664,400

698,052

Other assets

90,670

77,266

Total assets

$      2,825,522

$      2,971,617

Liabilities and stockholders' equity

   

Current liabilities:

   

Trade accounts payable

$           36,640

$           22,067

Accrued expenses and other current liabilities

77,411

100,096

Due to customers

449,402

594,273

Debt, current portion

18,154

18,697

Deferred revenue, current portion

412,712

374,499

Total current liabilities

994,319

1,109,632

Debt, net of current portion

921,619

937,483

Deferred tax liability

135,393

148,465

Deferred revenue, net of current portion

3,547

4,247

Operating lease liabilities, net of current portion

48,542

53,386

Other liabilities

1,628

1,344

Total liabilities

2,105,048

2,254,557

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,
67,755,374 and 66,165,666 shares issued at June 30, 2022 and
December 31, 2021, respectively

68

66

Additional paid-in capital

1,020,835

968,927

Treasury stock, at cost; 14,731,484 and 14,182,805 shares at June 30, 2022 and
December 31, 2021, respectively

(536,511)

(500,911)

Accumulated other comprehensive income

7,455

6,522

Retained earnings

228,627

242,456

Total stockholders' equity

720,474

717,060

Total liabilities and stockholders' equity

$      2,825,522

$      2,971,617

 

 

 

Blackbaud, Inc.

Consolidated Statements of Comprehensive (Loss) Income

(Unaudited)

 

(dollars in thousands, except per share amounts)

Three months ended
June 30,

 

Six months ended
June 30,

2022

2021

 

2022

2021

Revenue

         

Recurring

$    252,507

$    216,986

 

$    497,173

$    423,736

One-time services and other

12,420

12,454

 

24,878

24,895

Total revenue

264,927

229,440

 

522,051

448,631

Cost of revenue

         

Cost of recurring

114,487

94,435

 

226,661

183,300

Cost of one-time services and other

11,120

13,635

 

22,308

28,155

Total cost of revenue

125,607

108,070

 

248,969

211,455

Gross profit

139,320

121,370

 

273,082

237,176

Operating expenses

         

Sales, marketing and customer success

52,737

45,452

 

107,953

94,245

Research and development

38,333

30,222

 

78,285

59,401

General and administrative

47,391

32,008

 

91,153

62,595

Amortization

805

567

 

1,616

1,116

Restructuring

78

 

132

Total operating expenses

139,266

108,327

 

279,007

217,489

Income (loss) from operations

54

13,043

 

(5,925)

19,687

Interest expense

(8,976)

(5,054)

 

(16,575)

(10,168)

Other income (expense), net

3,133

487

 

4,254

(523)

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

(5,789)

8,476

 

(18,246)

8,996

Income tax (benefit) provision

(2,367)

1,745

 

(4,417)

2,429

Net (loss) income

$      (3,422)

$        6,731

 

$     (13,829)

$        6,567

(Loss) earnings per share

         

Basic

$        (0.07)

$         0.14

 

$        (0.27)

$         0.14

Diluted

$        (0.07)

$         0.14

 

$        (0.27)

$         0.14

Common shares and equivalents outstanding

         

Basic weighted average shares

51,660,739

47,756,326

 

51,431,501

47,560,847

Diluted weighted average shares

51,660,739

48,444,874

 

51,431,501

48,444,658

Other comprehensive (loss) income

         

Foreign currency translation adjustment

(10,398)

1,783

 

(12,530)

4,294

Unrealized gain on derivative instruments, net of tax

2,558

345

 

13,463

4,494

Total other comprehensive (loss) income

(7,840)

2,128

 

933

8,788

Comprehensive (loss) income

$     (11,262)

$        8,859

 

$     (12,896)

$      15,355

 

 

 

 

Blackbaud, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

 
 

Six months ended
June 30,

(dollars in thousands)

2022

2021

Cash flows from operating activities

   

Net (loss) income

$       (13,829)

$          6,567

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

   

Depreciation and amortization

51,283

40,742

Provision for credit losses and sales returns

3,653

4,418

Stock-based compensation expense

55,714

60,554

Deferred taxes

(16,656)

276

Amortization of deferred financing costs and discount

1,254

879

Other non-cash adjustments

4,225

155

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

   

Accounts receivable

(50,818)

(27,134)

Prepaid expenses and other assets

3,685

(18,162)

Trade accounts payable

12,769

2,356

Accrued expenses and other liabilities

(8,739)

1,443

Deferred revenue

39,238

27,828

Net cash provided by operating activities

81,779

99,922

Cash flows from investing activities

   

Purchase of property and equipment

(7,518)

(6,128)

Capitalized software and content development costs

(27,183)

(19,862)

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

(19,016)

Net cash used in investing activities

(53,717)

(25,990)

Cash flows from financing activities

   

Proceeds from issuance of debt

113,200

128,300

Payments on debt

(129,548)

(113,477)

Stock issuance costs

(557)

Employee taxes paid for withheld shares upon equity award settlement

(35,600)

(38,712)

Change in due to customers

(141,001)

(170,061)

Change in customer funds receivable

(546)

(5,014)

Purchase of treasury stock

(58,074)

Net cash used in financing activities

(194,052)

(257,038)

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

(7,252)

992

Net decrease in cash, cash equivalents and restricted cash

(173,242)

(182,114)

Cash, cash equivalents and restricted cash, beginning of period

651,762

644,969

Cash, cash equivalents and restricted cash, end of period

$      478,520

$      462,855

 

 

 

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)

June 30,
2022

December 31,
2021

Cash and cash equivalents

$        29,029

$        55,146

Restricted cash

449,491

596,616

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

$      478,520

$      651,762

 

 

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

 

(dollars in thousands, except per share amounts)

Three months ended
June 30,

 

Six months ended
June 30,

2022

2021

 

2022

2021

GAAP Revenue

$     264,927

$     229,440

 

$     522,051

$     448,631

           

GAAP gross profit

$     139,320

$     121,370

 

$     273,082

$     237,176

GAAP gross margin

52.6 %

52.9 %

 

52.3 %

52.9 %

Non-GAAP adjustments:

         

Add: Stock-based compensation expense

3,764

5,237

 

7,913

10,595

Add: Amortization of intangibles from business combinations

12,404

8,880

 

24,893

18,008

Add: Employee severance

381

15

 

381

15

Subtotal

16,549

14,132

 

33,187

28,618

Non-GAAP gross profit

$     155,869

$     135,502

 

$     306,269

$     265,794

Non-GAAP gross margin

58.8 %

59.1 %

 

58.7 %

59.2 %

           

GAAP income (loss) from operations

$              54

$       13,043

 

$        (5,925)

$       19,687

GAAP operating margin

— %

5.7 %

 

(1.1) %

4.4 %

Non-GAAP adjustments:

         

Add: Stock-based compensation expense

27,854

30,549

 

55,714

60,554

Add: Amortization of intangibles from business combinations

13,209

9,447

 

26,509

19,124

Add: Employee severance

462

451

 

462

1,442

Add: Acquisition and disposition-related costs(1)

2,292

64

 

3,249

31

Add: Restructuring and other real estate activities

118

 

71

7

Add: Security Incident-related costs, net of insurance(2)

8,348

470

 

15,549

471

Add: Impairment of capitalized software development costs

2,263

 

2,263

Subtotal

54,428

41,099

 

103,817

81,629

Non-GAAP income from operations

$       54,482

$       54,142

 

$       97,892

$     101,316

Non-GAAP operating margin

20.6 %

23.6 %

 

18.8 %

22.6 %

           

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

$        (5,789)

$         8,476

 

$     (18,246)

$         8,996

GAAP net (loss) income

$        (3,422)

$         6,731

 

$     (13,829)

$         6,567

           

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

51,660,739

48,444,874

 

51,431,501

48,444,658

GAAP diluted (loss) earnings per share

$          (0.07)

$           0.14

 

$          (0.27)

$           0.14

           

Non-GAAP adjustments:

         

Add: GAAP income tax (benefit) provision

(2,367)

1,745

 

(4,417)

2,429

Add: Total non-GAAP adjustments affecting income from operations

54,428

41,099

 

103,817

81,629

Non-GAAP income before provision for income taxes

48,639

49,575

 

85,571

90,625

Assumed non-GAAP income tax provision(3)

9,728

9,915

 

17,114

18,125

Non-GAAP net income

$       38,911

$       39,660

 

$       68,457

$       72,500

           

Shares used in computing non-GAAP diluted earnings per share

51,985,530

48,444,874

 

51,954,151

48,444,658

Non-GAAP diluted earnings per share

$           0.75

$           0.82

 

$           1.32

$           1.50

(1)

Includes a $2.0 million noncash impairment of certain intangible assets held for sale during the three and six months ended June 30, 2022.

(2)

Includes Security Incident-related costs incurred during the three and six months ended June 30, 2022 of $8.4 million and $17.4 million, respectively, net of probable insurance recoveries during the same periods of $0.1 million and $1.9 million, respectively, and during the three and six months ended June 30, 2021 of $11.7 million and $24.5 million, respectively, net of probable insurance recoveries during the same periods of $11.2 million and $24.0 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. Not included in this adjustment were costs associated with enhancements to our cybersecurity program. For full year 2022, we currently expect net pre-tax expense of approximately $30 million to $35 million for ongoing legal fees related to the Security Incident. In line with our policy, legal fees, are expensed as incurred. For full year 2022, we currently expect net cash outlays of approximately $15 million to $25 million for ongoing legal fees related to the Security Incident. We have not recorded a liability for a loss contingency related to the Security Incident as of June 30, 2022 because we are unable at this time to reasonably estimate the possible loss or range of loss.

(3)

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
June 30,

 

Six months ended
June 30,

2022

2021

 

2022

2021

GAAP revenue

$  264,927

$     229,440

 

$  522,051

$     448,631

GAAP revenue growth

15.5 %

   

16.4 %

 

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

25,841

 

51,070

Non-GAAP organic revenue(2)

$  264,927

$     255,281

 

$  522,051

$     499,701

Non-GAAP organic revenue growth

3.8 %

   

4.5 %

 
           

Non-GAAP organic revenue(2)

$  264,927

$     255,281

 

$  522,051

$     499,701

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

2,906

 

3,817

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

$  267,833

$     255,281

 

$  525,868

$     499,701

Non-GAAP organic revenue growth on constant currency basis

4.9 %

   

5.2 %

 
           

GAAP recurring revenue

$  252,507

$     216,986

 

$  497,173

$     423,736

GAAP recurring revenue growth

16.4 %

   

17.3 %

 

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

23,157

 

45,945

Non-GAAP organic recurring revenue

$  252,507

$     240,143

 

$  497,173

$     469,681

Non-GAAP organic recurring revenue growth

5.1 %

   

5.9 %

 

(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.

(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
June 30,

 

Six months ended
June 30,

2022

2021

 

2022

2021

GAAP net (loss) income

$     (3,422)

$         6,731

 

$   (13,829)

$         6,567

Non-GAAP adjustments:

         

Add: Interest, net

8,862

4,977

 

16,338

9,939

Add: GAAP income tax (benefit) provision

(2,367)

1,745

 

(4,417)

2,429

Add: Depreciation

3,585

3,140

 

7,123

6,351

Add: Amortization of intangibles from business combinations

13,209

9,447

 

26,509

19,124

Add: Amortization of software and content development costs

9,488

8,119

 

18,733

16,082

Subtotal

32,777

27,428

 

64,286

53,925

Non-GAAP EBITDA

$    29,355

$       34,159

 

$    50,457

$       60,492

Non-GAAP EBITDA margin

11.1 %

   

9.7 %

 
           

Non-GAAP adjustments:

         

Add: Stock-based compensation expense

27,854

30,549

 

55,714

60,554

Add: Employee severance

462

451

 

462

1,442

Add: Acquisition and disposition-related costs(2)

2,292

64

 

3,249

31

Add: Restructuring and other real estate activities

118

 

71

7

Add: Security Incident-related costs, net of insurance(2)

8,348

470

 

15,549

471

Add: Impairment of capitalized software development costs

2,263

 

2,263

Subtotal

41,219

31,652

 

77,308

62,505

Non-GAAP adjusted EBITDA

$    70,574

$       65,811

 

$  127,765

$     122,997

Non-GAAP adjusted EBITDA margin

26.6 %

   

24.5 %

 
           

Rule of 40(3)

30.4 %

   

29.0 %

 
           

Non-GAAP adjusted EBITDA

70,574

65,811

 

127,765

122,997

Foreign currency impact on Non-GAAP adjusted EBITDA(4)

1,651

(1,726)

 

2,152

(2,230)

Non-GAAP adjusted EBITDA on constant currency basis(4)

$    72,225

$       64,085

 

$  129,917

$     120,767

Non-GAAP adjusted EBITDA margin on constant currency basis

27.0 %

   

24.7 %

 
           

Rule of 40 on constant currency basis(5)

31.9 %

   

29.9 %

 

(1)

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

(2)

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

(3)

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

(4)

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.

(5)

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)

Six months ended
June 30,

2022

2021

GAAP net cash provided by operating activities

$        81,779

$        99,922

Less: purchase of property and equipment

(7,518)

(6,128)

Less: capitalized software and content development costs

(27,183)

(19,862)

Non-GAAP free cash flow

$        47,078

$        73,932

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

5,164

3,794

Non-GAAP adjusted free cash flow

$        52,242

$        77,726

 

Power your passion (PRNewsfoto/Blackbaud)

 

 

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SOURCE Blackbaud, Inc.