The Blackbaud Index: The Go-To Resource for Charitable and Online Giving Trends

The Blackbaud Index reported that overall charitable giving to nonprofits increased 2.2 percent while online giving increased 10.3 percent for the three months ending August 2018 compared to the same period in 2017.

The Blackbaud Index provides the most up-to-date information on charitable giving today. Tracking approximately $23 billion in US-based charitable giving, the Index is updated on the first of each month (or the next business day) and is based on a three-month moving average of year-over-year percent change. Featuring overall and online giving, the Index can be viewed by size and subsets of the nonprofit industry via an interactive online chart. The Index also features a fundraising benchmark calculator that allows users to easily chart their own results against the Index and historical data to provide a fuller view of charitable giving.

To access The Blackbaud Index, subscribe to monthly email alerts, read about the methodology, or access special reports, visit www.blackbaud.com/blackbaudindex.

Media Contact
Nicole McGougan
Public Relations Manager
843.654.3307
nicole.mcgougan@blackbaud.com 

About Blackbaud
Blackbaud (NASDAQ: BLKB) is the world’s leading cloud software company powering social good. Serving the entire social good community—nonprofits, foundations, companies, education institutions, healthcare organizations 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 more than three decades, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada and the United Kingdom. For more information, visit www.blackbaud.com.

Blackbaud Named to the AnitaB.org 2018 Top Companies for Women Technologists List

On September 26, Blackbaud was named one of the AnitaB.org 2018 Top Companies for Women Technologists. Scoring the highest in the Technical Workforce of 1,000-10,000 category, Blackbaud edged out finalists Airbnb, GEICO, State Farm and Ultimate Software to earn top honors. In front of more than 20,000 attendees, Blackbaud Chief Technology Officer Mary Beth Westmoreland and Sr. Principal Software Engineer Amanda Glosson accepted the top company award on the main stage this morning at the annual Grace Hopper Celebration for Women in Computing (GHC) in Houston, Texas.

“On behalf of my 3,400 colleagues around the world, we are honored to be named one of the Top Companies for Women Technologists by AnitaB.org,” said Mary Beth Westmoreland, chief technology officer at Blackbaud. “Diversity of thought and experience always leads to better performance for our company and, most importantly, better solutions for our customers. While Blackbaud is proud to be recognized alongside other companies and leaders who are committed to helping women in technology succeed, we know that there is still work to be done in every category of diversity.”

When Mike Gianoni joined Blackbaud as president and CEO in 2014, he championed a formalized diversity and inclusion program for the company, including an Executive Women’s Community program. Today, the company has an equal gender balance in its workforce, and employee-led affinity groups like Women in Technology, Women in Sales, Black Employees Encouraging Diversity (BLEND), Pride@Blackbaud (LGBTQ) and Employees with Disabilities play a strong role in advancing an inclusive culture. Blackbaud also conducts regular unconscious bias workshops and gender-pay equity audits.

AnitaB.org’s annual Top Companies for Women Technologists program is the only industry benchmark based on statistical analysis of employer data that measures technical employees using a standardized definition of the technical workforce. This year, Top Companies for Women Technologists evaluated 80 companies accounting for more than 628,000 technologists across a variety of fields.

Download the complete 2018 Top Companies Insights Report for additional data, insights, and methodology details.

Blackbaud’s Cloud Fund Accounting Software Helps Organizations Improve Financial Transparency, Save Time and Effectively Manage Their Programs

New study and nonprofit finance executives commend the value of Financial Edge NXT
for performance, scalability, security and more

Charleston, S.C. (September 25, 2018)Blackbaud (NASDAQ: BLKB), the world’s leading cloud software company powering social good, today announced that a Nucleus Research ROI Case Study of StarCare Specialty Health System found that by deploying Financial Edge NXT®, Blackbaud’s top-rated cloud fund accounting software, an organization could experience an annual return on investment of 102 percent and average annual benefit of $446,680 within one year.

StarCare, based in Lubbock, Texas, deployed Financial Edge NXT to improve the efficiency of its accounting and finance department and was able to increase employee productivity, improve data quality and eliminate costs associated with its legacy system. The organization’s fiscal team could more easily prepare for audits, reconcile accounts, manage transactions, and produce reports and key information for frontline managers, as well as reduce its reliance on technical staff in the IT department for daily reporting and maintenance.

“No other cloud fund accounting software available to the social good community offers the intelligence, security, scalability, performance and user experience that Financial Edge NXT delivers,” said Mary Beth Westmoreland, chief technology officer at Blackbaud. “We launched Financial Edge NXT with the goal of providing our customers with unparalleled functionality—from detailed, multi-scenario budgeting to fast, flexible reporting that enables timely, data-driven decisions. We’re proud to share today that nonprofit organizations have now used Financial Edge NXT to manage financials for more than one million individual projects.”

The company also reported strong satisfaction rates with Financial Edge NXT among nonprofit finance executives seeking to manage financial reporting, monitor and track program success and support fundraising efforts in a single solution:

  • “Ultimately, we decided to partner with Blackbaud because they demonstrated the most detailed consideration of our needs throughout the selection process. They really dove in to understand our operating model and reporting requirements in a way that made us feel they were dedicated to ensuring our success on Blackbaud Financial Edge NXT.” —Jennifer Holleran, Assistant Director of Business Operations, Cornell Cooperative Extension
  • “As a Federally Qualified Health Center, the key to our financial staff’s efficiency is effective reporting for a large group of funders and other stakeholders. I’ve always seen this as the strength of Financial Edge, and now Financial Edge NXT simplifies the reporting process and allows us to easily analyze details, so we’re confident about the data.” —Chris Dons, CFO, Lawndale Christian Health Center
  • “Blackbaud is dedicated to giving their customers the best software tools in the industry, and this is evident with Financial Edge NXT. I can customize my reports to mirror grant or government reports, which makes my job easier. What used to take me days to gather information, takes me only minutes with Financial Edge NXT reporting. I am confident that my data is secure, software is error free and Blackbaud will provide the best service possible to their customers.” —Jennifer Johnson, CFO, Senior Resource Association
  • “Our Board was very passionate about not only having our finger on the pulse of our funds but also being accountable and transparent with the funds that we raise; Financial Edge NXT completely supports us in that. I see Blackbaud as the base of this Foundation—giving us all the tools, structure and transparency that we need to show our donors, so we can continue to grow and support a healthy, active community.” —Krista Linklater Executive Director, St. Mary’s Memorial Hospital Foundation
  • “We were driven for a scalable solution that would save time, increase accuracy and improve financial transparency within the organization. Financial Edge NXT’s flexible account setup and tracking options allow us to automate otherwise manual reporting processes while maintaining a simple account structure. This in turn allows managers to more effectively manage their program data, and ultimately helps us deliver more impactful programs.” —Adam Pomerantz, CFO, WINGS for Kids

This year, Financial Edge NXT was a recipient of the 2018 Top Rated Badge for Accounting, Tax and Budgeting Software by TrustRadius, a trusted review site for business technology, and received a Five-Star rating from CPA Practice Advisor, a definitive resource for information to tax and accounting professionals in public practice.

For more information about Financial Edge NXT, go to www.blackbaud.com/nonprofit-accounting-software/financial-edge-nxt. To download the Nucleus Research ROI Case Study of StarCare Specialty Health System, go to https://nonprofitaccounting.blackbaud.com/assets/starcare-roi.

Click to Tweet: #Nonprofit finance execs commend the value of @Blackbaud Financial Edge NXT for performance, scalability, security and more! Read what they have to say: http://bit.ly/2oYVZip

About Blackbaud
Blackbaud (NASDAQ: BLKB) is the world’s leading cloud software company powering social good. Serving the entire social good community—nonprofits, foundations, companies, education institutions, healthcare organizations 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 more than three decades, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada and the United Kingdom. For more information, visit www.blackbaud.com.

Blackbaud Media Contact
Nicole McGougan
Public Relations Manager
843.654.3307
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 that involve a number of risks and uncertainties, including statements regarding expected benefits of products and product features. 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: general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; management of integration of acquired companies and other risks associated with acquisitions; risks associated with successful implementation of multiple integrated software products; the ability to attract and retain key personnel; risks related to our dividend policy and share repurchase program, including potential limitations on our ability to grow and the possibility that we might discontinue payment of dividends; risks relating to restrictions imposed by the credit facility; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organization; technological changes that make our products and services less competitive; 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. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

Blackbaud’s VP of Professional Services Amy Chase Selected to Become Riley Fellow

Amy Chase, vice president of Professional Services at Blackbaud, joins other leaders selected from throughout South Carolina to participate in the 13th class of the Riley Institute at Furman University’s Diversity Leaders Initiative (DLI). DLI class members are identified through a rigorous process including nominations from existing Riley Fellows, applications, and interviews. Individuals are selected to join the class based on their capacity to impact their organizations and communities.

“I’m looking forward to this unique opportunity to work with local leaders across various industries,” said Chase. “We all bring a diverse range of roles, backgrounds and perspectives to embark on a learning experience that will have a tangible benefit to the Lowcountry. Personally, I look forward to applying concepts from the
DLI to positively impact the Blackbaud culture.”

Over the course of five months, Chase will take part in a highly interactive curriculum consisting of case studies, scenario analyses and other experiential learning tools that maximize interaction and discussion among classmates and facilitate productive relationships. She will also work with other class members in one of five Capstone project groups formed to respond to real issues in the community.

“Discovering ways in which differences can strengthen our organizations is of utmost importance as we seek to grow and support a thriving economy and rich culture,” said Dr. Donald Gordon, executive director of the Riley Institute. “We now have more than 1,900 Riley Fellows statewide.  Each new class further extends the reach and impact of leaders willing to work together to make South Carolina a better place to live and work for all its residents.”

The DLI classes are expertly facilitated by Juan Johnson, an independent consultant and former Coca-Cola vice president. “DLI is unique among South Carolina’s leadership programs. In addition to the opportunity to develop new relationships and take part in positive action in their communities, participants gain deep knowledge of how to effectively manage and lead diverse workers, clients and constituents,” said Johnson.

DLI graduates become Riley Fellows, members of a powerful, cross-sector, statewide leadership network that includes CEOs of corporations, mayors, city and county council members, legislators, school superintendents, pastors and rabbis, non-profit heads, chamber of commerce directors, and community leaders. Chase will be Blackbaud’s third Riley Fellow, joining John Mistretta, executive vice president, Human Resources and Rachel Hutchisson, vice president, Corporate Citizenship & Philanthropy.

For more information about the Diversity Leaders Initiative and a full participant list, visit https://riley.furman.edu/diversity.

The Blackbaud Index: The Go-To Resource for Charitable and Online Giving Trends

The Blackbaud Index reported that overall charitable giving to nonprofits increased 0.3 percent while online giving increased 11.4 percent for the three months ending July 2018 compared to the same period in 2017.

The Blackbaud Index provides the most up-to-date information on charitable giving today. Tracking approximately $23 billion in US-based charitable giving, the Index is updated on the first of each month (or the next business day) and is based on a three-month moving average of year-over-year percent change. Featuring overall and online giving, the Index can be viewed by size and subsets of the nonprofit industry via an interactive online chart. The Index also features a fundraising benchmark calculator that allows users to easily chart their own results against the Index and historical data to provide a fuller view of charitable giving.

To access The Blackbaud Index, subscribe to monthly email alerts, read about the methodology, or access special reports, visit www.blackbaud.com/blackbaudindex. 

Media Contact
Nicole McGougan
Public Relations Manager
843.654.3307
nicole.mcgougan@blackbaud.com 

About Blackbaud
Blackbaud (NASDAQ: BLKB) is the world’s leading cloud software company powering social good. Serving the entire social good community—nonprofits, foundations, corporations, education institutions, healthcare institutions and individual change agents—Blackbaud connects and empowers organizations to increase their impact through 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 more than three decades, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada and the United Kingdom. For more information, visit www.blackbaud.com.

Healthcare Organization Yields Impressive Fundraising Results Using Blackbaud Raiser’s Edge NXT with Grateful Patient Solution

Independent study shows how a healthcare organization can more efficiently identify patients who
want to give back as thanks for exceptional care

Charleston, S.C. (August 28, 2018)Blackbaud (NASDAQ: BLKB) today announced the results of a commissioned Total Economic Impact™ (TEI)1 study conducted by Forrester Consulting, which examines the return on investment that a healthcare organization may experience by deploying Blackbaud’s smart cloud fundraising and relationship management solution along with its wealth and asset screening solution. Forrester found that over a three-year period, a healthcare organization can achieve a 90 percent return on investment, increase the volume of grateful patient gifts raised by gift officers by 40 percent and increase the average size of grateful patient donations by 28 percent.

To evaluate the economic impact, Forrester took a comprehensive approach to its study, interviewing Blackbaud subject matter experts, Forrester analysts and a hospital foundation (Inova Health Foundation) currently using Blackbaud Raiser’s Edge NXT™ and Grateful Patient Solution. Using the data, Forrester analysts constructed a financial model representative of the interview using its TEI methodology to identify the cost, benefit, flexibility and risk factors that affect the investment decision.

“For over 35 years, Blackbaud’s innovation, industry expertise and value-added services have helped healthcare organizations excel in fundraising and constituent relationship management,” said Page Bullington, president and general manager of Blackbaud Healthcare Solutions. “The ROI that Blackbaud Raiser’s Edge NXT and Grateful Patient Solution brings Inova goes further than its financial results. Our innovations allow Inova to learn more about its constituents and leverage the combination of better data and enhanced functionality to focus its fundraising efforts, ultimately increasing its efficiency and effectiveness.”

Inova Health Foundation (“Inova”), based in Falls Church, Va., is part of the Inova Health System, a large nonprofit health organization that employs over 17,000 staff throughout five hospitals, 25 assisted living and long-term care facilities, 26 primary care locations and a variety of other health-related services. Previously struggling to identify and target ideal donor prospects, Inova turned to Blackbaud to enhance the technology powering its research, direct mail and gift officer outreach.

Blackbaud Raiser’s Edge NXT and Grateful Patient Solution helped Inova identify grateful patient prospects with high giving potential. “It would be impossible to identify the right patients to talk to without Blackbaud because of the volume coming into our system every day,” said Paige Moses, associate vice president, Foundation Services at Inova Health Foundation. “We’ve been able to set up a process that can handle the volume of constituents Inova sees every day with a very lean staff. Before, we couldn’t get through this volume of constituents.”

After deploying Raiser’s Edge NXT with the Grateful Patient Solution, Inova experienced:

  • Raised an additional $429,511 from grateful patients. Gift officers leveraged better data and technology to target prospects, increasing the number of gifts from grateful patients by 40 percent and the average gift value by 28 percent.
  • Increased direct mail donations, raising an additional $142,300. Inova built highly-targeted direct mail efforts to grateful patients based on data from daily screenings and quarterly modeling.
  • Saved more than $113,000 per year. By replacing legacy solutions and upgrading to the cloud solution, Inova has also been able to greatly improve its efficiencies and productivity.
  • Recaptured $32,000 of increased foundation employee productivity annually. Foundation staff streamlined regular processes to save over 2,000 hours annually with Blackbaud’s solutions.

“Being able to establish a direct mail program that drove over 800 donors in one year versus a former program that only drove 78 donors in 2015 and 105 donors in 2016 is a huge win,” said Jeff Johnson, senior director of Inova Health Foundation.

Learn how Inova increased patient donations while improving productivity using the Blackbaud solutions by downloading the full study at https://hello.blackbaud.com/12227_Healthcare_Forrester_Report.html. Hosted by Blackbaud, join Inova Health Foundation and guest Forrester on September 19 at 2 p.m. ET to learn more about this report in webinar form.

Click to tweet: .@InovaHealth increased its volume of grateful patient gifts by 40% with @blackbaud’s help – learn how! http://bit.ly/2wt0LYB

About Blackbaud
Blackbaud (NASDAQ: BLKB) is the world’s leading cloud software company powering social good. Serving the entire social good community—nonprofits, foundations, companies, education institutions, healthcare organizations 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 more than three decades, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada and the United Kingdom. For more information, visit www.blackbaud.com.

Blackbaud Media Contact
Nicole McGougan
Public Relations Manager
843.654.3307
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 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 results to differ materially include the following: general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; management of integration of acquired companies and other risks associated with acquisitions; risks associated with successful implementation of multiple integrated software products; the ability to attract and retain key personnel; risks related to our dividend policy and share repurchase program, including potential limitations on our ability to grow and the possibility that we might discontinue payment of dividends; risks relating to restrictions imposed by the credit facility; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organization; technological changes that make our products and services less competitive; 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. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

More giving, fewer donors: Blackbaud’s Steve MacLaughlin discusses this unique era in philanthropy

Steve MacLaughlin is a bestselling author and fundraising expert – and here at Blackbaud, he’s one of our resident data and analytics specialists.  

Steve joins international social influence expert Derrick Feldmann on stage at Influence Nation Summit on Sept. 6 in Washington, where they’ll tackle the conundrum of why overall donations continue to grow as the number of individual donors decreases. 

The bottom line: Philanthropic success depends on engaging, building, and stewarding relationships with donors. This relationship cultivation is especially important, considering that while giving has increased in recent years, the number of overall donors has decreased. There is a limit
to donor elasticity at the current pace. 

Check out three Blackbaud Institute reports that explore those trends: 

Research finds that the number of donors has declined by 7% since 2010, yet the value of giving grew by 41%. This challenging climate holds promise, according to Steve.

“While the number of households giving has declined, the value of their giving has increased at a better rate than inflation,” he noted. “Our most recent data shows that this decline may have stopped and could even be reversing. There has never been a better time to double down on stewardship, embrace donors, and focus on acquisition.” 

At Influence Nation Summit, Steve and Derrick will analyze the data and explain how social good organizations can capitalize on trends. If you can’t make it, check back here after the conference to watch their conversation. 

 

New IDC Report: Blackbaud ranked in Top 100 Cloud Software Vendors

Blackbaud has once again been included in IDC’s “Worldwide Software as a Service and Cloud Software Market Shares, 2017: A Year of Expanding Platforms1” report, which was published earlier today. This IDC study examines the SaaS and cloud software market in 2017 and includes a list of the top 100 cloud software vendors by revenue.

Blackbaud ranked No. 24 for the second straight year on IDC’s list of “Top 100 Cloud Software Vendors by Revenue” and climbed two spots to No. 18 on IDC’s list of “Top 20 Worldwide SaaS Applications Revenue by Vendor.”

According to IDC, the worldwide SaaS and cloud software market grew by 26.2% in 2017, reaching $107.5 billion, and the leading 20 cloud software providers accounted for 49.1% of the cloud software market in 2017. Click here to purchase/download a copy of the report.

1(doc #US43821218, August 2018)

The Blackbaud Index: The Go-To Resource for Charitable and Online Giving Trends

The Blackbaud Index reported that overall charitable giving to nonprofits increased 0.7 percent while online giving increased 8.1 percent for the three months ending June 2018 compared to the same period in 2017.

The Blackbaud Index provides the most up-to-date information on charitable giving today. Tracking approximately $23 billion in US-based charitable giving, the Index is updated on the first of each month (or the next business day) and is based on a three-month moving average of year-over-year percent change. Featuring overall and online giving, the Index can be viewed by size and subsets of the nonprofit industry via an interactive online chart. The Index also features a fundraising benchmark calculator that allows users to easily chart their own results against the Index and historical data to provide a fuller view of charitable giving.

To access The Blackbaud Index, subscribe to monthly email alerts, read about the methodology, or access special reports, visit www.blackbaud.com/blackbaudindex. 

Media Contact
Nicole McGougan
Public Relations Manager
843.654.3307
nicole.mcgougan@blackbaud.com

About Blackbaud
Blackbaud (NASDAQ: BLKB) is the world’s leading cloud software company powering social good. Serving the entire social good community—nonprofits, foundations, companies, education institutions, healthcare organizations 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 more than three decades, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada and the United Kingdom. For more information, visit www.blackbaud.com.

Blackbaud Announces 2018 Second Quarter Results

Second Quarter Recurring Revenue Grows 16% Representing 90% of Total Revenue;
Reaffirms 2018 Full Year Financial Guidance

Charleston, S.C. (July 30, 2018) – Blackbaud (NASDAQ: BLKB), the world’s leading cloud software company powering social good, today announced financial results for its second quarter ended June 30, 2018.

“We’ve continued moving the business toward a subscriptions-based revenue model with our mix of recurring revenue now standing at 90 percent of total, a new all-time high for us,” said Mike Gianoni, Blackbaud’s president and CEO. “We announced our Cloud Solution for Faith Communities with the introduction of Blackbaud Church Management™ which is a massive market for us and a tremendous opportunity to deliver integrated, end-to-end cloud capabilities through a single, connected experience. Our Cloud Solution for Faith Communities takes full advantage of the rapid innovation, modern user experience and enhanced capabilities made possible by our Blackbaud SKY® platform. No one in the industry has taken this approach with a modern platform and customers are lining up to be a part of our early adopter program.”

Second Quarter 2018 Results Compared to Second Quarter 2017 Results:

  • Total GAAP revenue was $213.7 million, up 11.5%, with $192.7 million in GAAP recurring revenue, representing 90.2% of total GAAP revenue. GAAP recurring revenue was up 15.8%.
  • Total non-GAAP revenue was $214.6 million, up 11.8%, with $193.6 million in non-GAAP recurring revenue, representing 90.2% of total non-GAAP revenue. Non-GAAP recurring revenue was up 16.2%.
  • Non-GAAP organic revenue increased 4.8% and non-GAAP organic recurring revenue increased 8.0%.
  • GAAP income from operations decreased 31.2% to $11.4 million, with GAAP operating margin decreasing 330 basis points to 5.3%.
  • Non-GAAP income from operations increased 11.9% to $45.2 million, with non-GAAP operating margin increasing 10 basis points to 21.1%.
  • GAAP net income decreased 40.2% to $6.6 million, with GAAP diluted earnings per share of $0.14, down $0.09.
  • Non-GAAP net income increased 28.8% to $33.0 million, with non-GAAP diluted earnings per share of $0.69, up $0.15.
  • Non-GAAP free cash flow was $41.6 million, an increase of $9.8 million.

“We’ve been diligently executing a workplace strategy to better align our organizational objectives with our geographically diverse workforce in the second quarter,” said Tony Boor, Blackbaud’s executive vice president and CFO. “We moved into our new state-of-the-art world headquarters in Charleston, SC, and continued upgrading and expanding our satellite office locations to be more centrally located for employees and closer to customers. We expect to incur near-term before tax restructuring charges from $6 to $8 million through 2019 with future expected annual before-tax savings of between $3 and $4 million beginning in 2020. We’ve also seen solid gains in our sales productivity and plan to ramp sales hiring heading into the second-half of 2018 with the expectation that we won’t see material top-line return on these investments until 2019 and more fully in 2020.”

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.

Recent Company Highlights:

Visit www.blackbaud.com/press-room for more information about Blackbaud’s recent highlights.

Dividend
Blackbaud announced today that its Board of Directors has declared a third quarter 2018 dividend of $0.12 per share payable on September 14, 2018 to stockholders of record on August 28, 2018.

Financial Outlook
Blackbaud today reaffirmed its 2018 full year financial guidance:

  • Non-GAAP revenue of $870 million to $890 million
  • Non-GAAP operating margin of 20.6% to 21.0%
  • Non-GAAP diluted earnings per share of $2.75 to $2.88
  • Non-GAAP free cash flow of $165 million to $175 million

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.

Reclassifications
Our revenue from “subscriptions” and “maintenance” and a portion of our “services and other” revenue have been combined within “recurring” revenue beginning in 2018. In order to provide comparability between periods presented, those amounts of revenue have been combined within “recurring” revenue in the previously reported consolidated statements of comprehensive income to conform to presentation of the current period. Similarly, “cost of subscriptions” and “cost of maintenance” and a portion of “cost of services and other” have been combined within “cost of recurring” in the previously reported consolidated statements of comprehensive income to conform to presentation of the current period. “Services and other” revenue has been renamed as “one-time services and other” and consists of revenue that did not meet the description of “recurring” revenue in the consolidated statements of comprehensive income. “Cost of services and other” has been renamed as “cost of one-time services and other” and consists of costs that did not meet the description of those related to “recurring” revenue in the consolidated statements of comprehensive income.

Adoption of New Revenue Accounting Standard
On January 1, 2018, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), using the full retrospective method of transition, which requires that the standard be applied to all periods presented. The impacts of adoption are reflected in the financial information herein. We have provided more detailed information regarding the impact of our adoption of ASU 2014-09 in a Form 8-K filed with the Securities and Exchange Commission on April 30, 2018. We have also made that information accessible via the Investor Relations section of our website.

Conference Call Details

What:           Blackbaud’s 2018 Second Quarter Conference Call

When:          July 31, 2018

Time:           8:00 a.m. (Eastern Time)

Live Call:    800-289-0462 (US/Canada); passcode 367579.

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, foundations, companies, education institutions, healthcare organizations 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 more than three decades, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada and the United Kingdom. For more information, visit www.blackbaud.com.

Investor Contact: Media Contact:
Mark Furlong Nicole McGougan
Director of Investor Relations Public Relations Manager
843-654-2097 843-654-3307
mark.furlong@blackbaud.com nicole.mcgougan@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 results, expectations that our revenue will continue to grow, and expectations that we will achieve our projected 2018 full-year financial guidance. 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; risks related to our dividend policy and stock repurchase program, including the possibility that we might discontinue payment of dividends; 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.govor 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.

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.

As previously disclosed, beginning in 2018, Blackbaud applies a non-GAAP effective tax rate of 20.0% when calculating non-GAAP net income and non-GAAP diluted earnings per share. The non-GAAP tax rate will be reviewed annually to determine whether it remains appropriate in consideration of Blackbaud’s financial results including its periodic effective tax rate calculated in accordance with GAAP, its operating environment and related tax legislation in effect and other factors deemed necessary. All 2017 measures of non-GAAP net income and non-GAAP diluted earnings per share included in this news release are calculated under Blackbaud’s historical non-GAAP effective tax rate of 32.0%.

 

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.