BLACKBAUD INC Q1 FY2025 earnings call

• Mike Gianoni highlighted Blackbaud's strong financial progress, organic revenue growth, and position as a market leader in the social impact space. He discussed operational initiatives like transitioning contract terms to 3-year renewals, moving to third-party cloud, AI innovation, and rightsizing operations.
• Tony Boor detailed Q1 financial results, reaffirmed commitment to growth and profitability, and discussed the transition of CFO duties to Chad Anderson. He also outlined the company's capital allocation strategy and guidance for the year.
• Chad Anderson was introduced as the new CFO, with Tony Boor expressing confidence in the seamless transition.

In the first quarter, Blackbaud generated revenue of $271 million, representing 5.8% organic growth. Non-GAAP adjusted EBITDA margin was 34.3%, non-GAAP diluted earnings per share was $0.96, and the Rule of 40 score was 40.1%. There is no specific breakdown of product segments provided, but overall the business performed well with resilient results in the social impact market.

• Revenue: Projected in the range of $1.115 billion to $1.125 billion, with organic growth of 4.2% to 5.1% or 4.5% to 5.4% on a constant currency basis.
• EBITDA margin: Anticipated to be approximately 34.9% to 35.9%.
• Non-GAAP EPS: Expected to be in the range of $4.16 to $4.35 per share, up 2% to 7% year-over-year.
• Adjusted free cash flow: Guided to $185 million to $195 million, inclusive of one-time investments and considerations.
• Plan to buy back up to 5% of common stock outstanding in 2025.

• Uncertainty surrounding federal grant funding and its impact on customers, though software remains critical for donors and operations.
• Potential macroeconomic volatility and fluctuations in transactional revenue that could affect financial performance.

Q: Brian Peterson asked about gross retention and bookings in light of federal grant impact.

A: Mike Gianoni responded that there has been no impact on sales bookings, retention, or sales pipeline.

Q: Rob Oliver inquired about the macro contemplated in guidance and mid-single-digit growth.

A: Mike Gianoni stated most customers don't get federal grants, and guidance is unchanged with confidence in mid-single-digit growth due to innovation and market health.

Q: Matthew Kikkert asked about net new pipeline and global markets.

A: Mike Gianoni said new bookings were up substantially, and global markets like JustGiving in the U.K. and Asia Pac were performing well.

Q: Koji Ikeda asked about end-market resilience and contract renewals.

A: Mike Gianoni talked about innovation driving end-market health and that contract renewals are going well with high retention rates.

Q: Kirk Materne inquired about AI monetization and currency tailwind.

A: Mike Gianoni discussed Blackbaud Copilot and AI rollout, and Tony Boor mentioned currency is a tailwind for the remainder of the year