SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):     July 27, 2005

BLACKBAUD, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

000-50600		11-2617163
(Commission File Number)		(IRS Employer ID Number)

2000 Daniel Island Drive, Charleston, South Carolina 29492

(Address of principal executive offices)               (Zip Code)

Registrant’s telephone number, including area code      (843) 216-6200     

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On July 27, 2005, Blackbaud, Inc. issued a press release reporting unaudited financial results for the second quarter ended June 30, 2005. A copy of this press release is attached.

The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

     (c)     Exhibits

Exhibit No.		Description
99.1		Press release dated July 27, 2005.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		BLACKBAUD, INC.
Date:     July 27, 2005		/s/ Timothy V. Williams
		Timothy V. Williams, Vice President and Chief Financial Officer

Exhibit 99.1

Blackbaud, Inc. Announces Record Second Quarter 2005 Results

CHARLESTON, S.C.— July 27, 2005—Blackbaud, Inc. (Nasdaq: BLKB), the leading provider of software and related services designed specifically for nonprofit organizations, today announced financial results for its second quarter 2005.

For the quarter ended June 30, 2005, Blackbaud reported total revenue of $42.8 million, an increase of 20% compared with the second quarter of 2004. License revenue increased 14% to $8.3 million, services revenue increased 27% to $14.1 million, and maintenance and subscriptions revenue increased 18% to $19.1 million over the comparable period.

Robert J. Sywolski, Chief Executive Officer of Blackbaud, stated, “We are very pleased with our record second quarter results, highlighted by revenue growth that was at its highest level in 5 years. Nonprofit organizations are increasingly turning to technology as a way to enhance their fundraising activities and improve efficiency, and Blackbaud is the clear market leader with 13,000 customers and the industry’s broadest and most comprehensive suite of solutions.” Sywolski added, “Our flagship Raisers Edge product continued to pace the solid growth of our ’core solutions’ while the rapid growth of our Patron Edge product and our Internet offerings helped to drive our ’new solutions’ to over 20% of sales for the first time in the Company’s history.”

Blackbaud’s income from operations and net income, determined in accordance with generally accepted accounting principles (GAAP), were $9.0 million and $8.5 million, respectively, for the second quarter 2005 compared with income from operations of $9.1 million and net income of $5.3 million in the same period last year. GAAP diluted earnings per share were $0.18 for the quarter ended June 30, 2005, compared with $0.12 in the same period last year.

Pro forma income from operations and net income, which exclude stock-based compensation expense, certain adjustments to the deferred tax asset, costs of the Company’s initial public offering in 2004 and amortization of intangibles arising from business combinations, were $12.3 million and $7.8 million, respectively, compared with $10.6 million and $6.5 million in the same period last year. This represents growth of 16% in pro forma income from operations and 21% growth in pro forma net income, while pro forma earnings per share were $0.16 for the quarter ended June 30, 2005. A reconciliation of GAAP to pro forma results has been provided in the financial statement tables included in the press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Cash from operations for the first half of 2005 was $19.3 million, an increase of 19% on a year-over-year basis. Blackbaud had cash and cash equivalents of $50.4 million at June 30, 2005, an increase from the $43.3 million level at the end of the prior quarter. As previously announced, in July the Company used $43 million of its cash to repurchase shares of its common stock in a self-tender offer.

Timothy V. Williams, Chief Financial Officer of Blackbaud, stated, “The second quarter was important for Blackbaud and its stockholders on a couple of fronts. First of all, our proven and predictable business model based on high transaction volume and recurring revenue sources helped us to deliver our 5^th consecutive quarter of growth and profitability as a public company. This is an impressive accomplishment considering the challenges many software vendors have faced over this time period. Secondly, we were able to use our strong operating cash flow, which aggregated $46.6 million over the last 12 months, to complete a self-tender offer that was beneficial to all stockholders. The self-tender should be accretive to future earnings per share and will reduce the ownership concentration of our largest stockholder.”

Capital Management

Blackbaud announced today that its Board of Directors has declared a third quarter dividend of $0.05 per share payable on August 30 to stockholders of record on August 15. In addition, Blackbaud’s Board of Directors has reinstituted the Company’s share repurchase program and approved the repurchase of up to $35 million of the Company’s common stock in accordance with the requirements of the Securities and Exchange Commission. The shares may be purchased from time to time on the open market, in privately negotiated transactions or otherwise, depending on market conditions and other factors, all in accordance with the requirements of applicable law. The stock buyback plan does not obligate the Company to acquire any specific number of shares and may be discontinued at any time. The Company may begin making purchases under the share buyback as early as of August 2.

Conference Call Details

Blackbaud will host a conference call today, July 27, 2005, at 5:00 p.m. (EDT) to discuss the Company’s financial results and related matters. To access this call, dial 800-811-8830 (domestic) or 913-981-4904 (international). A replay of this conference call will be available through August 3, 2005, at 888-203-1112 (domestic) or 719-457-0820 (international). The replay passcode is 8026804. A live webcast of this conference call will be available on the “Investor Relations” page of the Company’s Web site, and a replay will be archived on the Web site as well.

About Blackbaud

Blackbaud is the leading global provider of software and related services designed specifically for nonprofit organizations. Approximately 13,000 organizations — including the American Red Cross, Bowdoin College, the Chesapeake Bay Foundation, the Crohn’s & Colitis Foundation of America, the Detroit Zoological Society, Episcopal High School, Help the Aged, the New York Philharmonic and United Way of America — use Blackbaud products and consulting services for fundraising, financial management, business intelligence and school administration. Blackbaud’s solutions include The Raiser’s Edge^®, The Financial Edge™, The Education Edge™, The Patron Edge ™, Blackbaud^® NetCommunity™, The Information Edge™, WealthPoint™ and ProspectPoint™, as well as a wide range of consulting and educational services. Founded in 1981, Blackbaud is headquartered in Charleston, South Carolina, and also has operations in Toronto, Ontario; Glasgow, Scotland; and Sydney, Australia.

Blackbaud, the Blackbaud logo, The Raiser’s Edge, The Financial Edge, The Education Edge, The Information Edge, The Patron Edge, Blackbaud NetCommunity, WealthPoint and ProspectPoint are trademarks or registered trademarks of Blackbaud, Inc.

Forward-looking Statements

Except for historical information, all of the statements, expectations and assumptions contained in this news release are forward-looking statements that 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 actual results to differ materially from these forward-looking statements include the following: continued success in sales growth; risks related to our proposed dividend and stock repurchase programs, including potential limitations on our ability to grow and the possibility that we might discontinue payment of dividends; adoption of our products and services by nonprofits; uncertainty regarding increased business and renewals from existing customers; risk associated with product concentration; lengthy sales and implementation cycles; economic conditions and seasonality; competition; risks associated with management of growth; risks associated with acquisitions; technological changes that make our products and services less competitive; the ability to attract and retain key

personnel; 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 upon request from Blackbaud’s investor relations department.

Non-GAAP Financial Measures

Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes pro forma gross margin, pro forma operating income and margin, pro forma net income and pro forma earnings per share. 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 the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in Blackbaud’s industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial results discussed above exclude the impact of costs associated with the Blackbaud’s IPO (completed on July 22, 2004), amortization of intangibles arising from business combinations, stock option compensation expense and certain adjustments to the deferred tax asset.

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 measure as detailed above. As previously mentioned, a reconciliation of GAAP to pro forma results has been provided in the financial statement tables included in this press release.

INVESTOR CONTACT:
Tim Dolan
Integrated Corporate Relations
203-682-8200

MEDIA CONTACT:
Megan McDonnell
Integrated Corporate Relations
203-682-8200

SOURCE: Blackbaud, Inc.

BLACKBAUD, INC.
BALANCE SHEETS
(In thousands, except share and per share amounts)

		June 30,				December 31,
		2005				2004
Assets
Current assets:
Cash and cash equivalents		$	50,444			$	42,144
Accounts receivable, net of allowance of $1,399 and $1,420, respectively			27,541				19,580
Prepaid expenses and other current assets			1,443				1,806
Deferred tax asset, current portion			1,069				542
Total current assets			80,497				64,072
Property and equipment, net			6,714				7,199
Deferred tax asset			80,983				87,522
Goodwill			1,974				1,673
Intangible assets, net			235				—
Deferred financing fees, net			109				133
Other assets			11				209
Total assets		$	170,523			$	160,808
Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable		$	2,675			$	2,653
Current portion of capital lease obligations			—				44
Accrued expenses and other current liabilities			9,905				16,019
Deferred revenue			57,795				51,593
Total current liabilities			70,375				70,309
Long-term deferred revenue			890				710
Total liabilities			71,265				71,019
Commitments and contingencies
Stockholders’ equity:
Preferred stock; 20,000,000 shares authorized, none outstanding			—				—
Common stock, $.001 par value; 180,000,000 shares authorized, 44,446,035 and 42,549,056 shares issued at June 30, 2005 and December 31, 2004, respectively			44				43
Additional paid-in capital			60,089				55,292
Deferred compensation			(700	)			(1,064	)
Treasury stock, at cost; 861,076 shares at June 30, 2005			(10,630	)			—
Accumulated other comprehensive income			195				355
Retained earnings			50,260				35,163
Total stockholders’ equity			99,258				89,789
Total liabilities and stockholders’ equity		$	170,523			$	160,808

BLACKBAUD, INC.
STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)

		Three months ended June 30,								Six months ended June 30,
		2005				2004				2005				2004
Revenue
License fees		$	8,304			$	7,293			$	14,772			$	12,370
Services			14,112				11,090				25,584				20,663
Maintenance and subscriptions			19,150				16,192				37,679				32,025
Other revenue			1,242				974				2,176				1,928
Total revenue			42,808				35,549				80,211				66,986
Cost of revenue
Cost of license fees			1,146				835				2,091				1,493
Cost of services (of which $83, $273, $174 and $567 in the three months ended June 30, 2005 and 2004 and the six months ended June 30, 2005 and 2004, respectively, was stock option compensation expense)			7,190				5,952				13,783				11,552
Cost of maintenance and subscriptions (of which $11, $25, $22 and $62 in the three months ended June 30, 2005 and 2004 and the six months ended June 30, 2005 and 2004, respectively, was stock option compensation expense)			2,927				2,855				5,871				5,586
Cost of other revenue			1,228				915				2,044				1,775
Total cost of revenue			12,491				10,557				23,789				20,406
Gross profit			30,317				24,992				56,422				46,580
Sales and marketing			8,794				7,155				16,476				13,293
Research and development			5,284				4,428				10,331				8,704
General and administrative			4,006				3,121				7,841				6,054
Amortization			—				—				—				32
Costs of initial public offering			—				700				—				1,650
Stock option compensation			3,226				526				(4,516	)			1,193
Total operating expenses			21,310				15,930				30,132				30,926
Income from operations			9,007				9,062				26,290				15,654
Interest income			327				29				580				54
Interest expense			(12	)			(37	)			(25	)			(250	)
Other income (expense), net			109				(3	)			(2	)			346
Income before provision for income taxes			9,431				9,051				26,843				15,804
Income tax provision			896				3,708				7,449				6,464
Net income		$	8,535			$	5,343			$	19,394			$	9,340
Earnings per share
Basic		$	0.19			$	0.13			$	0.45			$	0.22
Diluted		$	0.18			$	0.12			$	0.40			$	0.20
Common shares and equivalents outstanding
Basic weighted average shares			43,869,796				42,490,790				42,958,761				42,450,873
Diluted weighted average shares			48,675,998				46,359,016				48,097,775				46,312,168
Summary of stock option compensation expense (benefit)
Cost of services		$	83			$	273			$	174			$	567
Cost of maintenance and subscription revenue			11				25				22				62
Total cost of revenue			94				298				196				629
Sales and marketing			70				222				144				476
Research and development			42				142				97				316
General and administrative			3,114				162				(4,757	)			401
Total operating expense			3,226				526				(4,516	)			1,193
Total stock option compensation expense (benefit)		$	3,320			$	824				($4,320	)		$	1,822

BLACKBAUD, INC.
STATEMENTS OF CASH FLOWS
(In thousands)

		Six months ended June 30,
		2005				2004
Cash flows from operating activities
Net income		$	19,394			$	9,340
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization			1,359				1,297
Provision for doubtful accounts and sales returns			694				607
Stock option compensation (benefit) expense			(3,881	)			1,822
Amortization of deferred financing fees			24				156
Deferred taxes			6,012				4,248
Benefit on exercise of stock options			3,631				—
Changes in assets and liabilities, net of acquisition
Accounts receivable			(8,846	)			(8,962	)
Prepaid expenses and other assets			569				(278	)
Trade accounts payable			28				344
Accrued expenses and other current liabilities			(6,021	)			232
Deferred revenue			6,365				7,483
Total adjustments			(66	)			6,949
Net cash provided by operating activities			19,328				16,289
Cash flows from investing activities
Purchase of property and equipment			(890	)			(1,188	)
Purchase of net assets of acquired company			(497	)			(66	)
Net cash used in investing activities			(1,387	)			(1,254	)
Cash flows from financing activities
Repayments on long-term debt and capital lease obligations			(44	)			(5,068	)
Proceeds from exercise of stock options			5,411				480
Purchase of treasury stock			(10,630	)			—
Dividend payments to stockholders			(4,297	)			—
Net cash used in financing activities			(9,560	)			(4,588	)
Effect of exchange rate on cash and cash equivalents			(81	)			(304	)
Net increase in cash and cash equivalents			8,300				10,143
Cash and cash equivalents, beginning of period			42,144				6,708
Cash and cash equivalents, end of period		$	50,444			$	16,851
Supplemental disclosures of cash flow information
Cash paid during the year for
Interest			1				43
Taxes			2,671				1,325

BLACKBAUD, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands, except per share amounts)

		Three months ended June 30,								Six months ended June 30,
		2005				2004				2005				2004
GAAP revenue		$	42,808			$	35,549			$	80,211			$	66,986
GAAP gross margin		$	30,317			$	24,992			$	56,422			$	46,580
Pro forma adjustments:
Amortization of deferred stock compensation			94				298				196				629
Pro forma gross profit		$	30,411			$	25,290			$	56,618			$	47,209
Pro forma gross margin			71	%			71	%			71	%			70	%
GAAP income from operations		$	9,007			$	9,062			$	26,290			$	15,654
Pro forma adjustments:
Amortization of deferred stock compensation expense (benefit)			3,320				824				(4,320	)			1,822
Costs of initial public offering			—				700				—				1,650
Amortization of intangibles from business combinations			—				—				—				32
Total pro forma adjustments			3,320				1,524				(4,320	)			3,504
Pro forma income from operations		$	12,327			$	10,586			$	21,970			$	19,158
Pro forma operating margin			29	%			30	%			27	%			29	%
GAAP net income		$	8,535			$	5,343			$	19,394			$	9,340
Pro forma adjustments:
Total pro forma adjustments affecting income from operations			3,320				1,524				(4,320	)			3,504
Tax impact related to pro forma adjustments			(4,077	)			(416	)			(1,335	)			(1,067	)
Pro forma net income		$	7,778			$	6,451			$	13,739			$	11,777
GAAP shares used in computing diluted income per share			48,676				46,359				48,098				46,312
Pro forma adjustments:
Incremental shares related to stock options			(1,350	)			(573	)			(1,433	)			(543	)
Shares used in computing pro forma earnings per diluted share			47,326				45,786				46,665				45,769
Pro forma earnings per diluted share		$	0.16			$	0.14			$	0.29			$	0.26