Blackbaud (BLKB) 30 Oct 182018 Q3 Earnings call transcript

Good day, and welcome to the Blackbaud Inc. Q3 2018 Earnings Conference Call. Today's conference is being recorded.

As a reminder, we will take questions at the end of today's presentation. Please limit yourself to one question and one follow-up. would turn I to conference time, Furlong. Mark this like the to over At ahead. go Please

operational everyone. strategy. morning, quarter we financial of on call. third joining the in XXXX Today, provide context and our our performance review four-point Good will for earnings Thanks growth us our and commentary results, on Blackbaud's

and isolation reflect on from substitute January Customers. Unless we should Please our XXXX XXX unless a reconciliation comparable this then CFO. last be CEO; could Please Boor, GAAP for Blackbaud's to of Revenue Investor measure Contracts more more or financial note adjusted non-GAAP results release and Executive Joining otherwise me issued non-GAAP refer other detailed are will on will X today from prepared in related cause to Tony we call presentation that We measures we refer Tony how of Mike to website. for as a our Gianoni, night. we results make results information President today those to the on uncertainties and XXXX from those internally your refer and GAAP Please results differ Mike in forward-looking and that up on the both most adoption financial Blackbaud's and projected. will ASC our measures. risks supplemental President call. more that in of available risks. statements a press combination subject materially with note to to specified, is call Relations are representative measures and GAAP of that we also XX-K business. Please SEC questions. that schedule open Vice and to believe considered and as our filings contain actual and will otherwise Form our non-GAAP comments, And for available the comments measures specified, on non-GAAP note not our only A recent is

the Before available cover call our investor briefly I to is website. Investor which marketing Relations over I'll on Mike, upcoming turn our activity,

fourth XXnd New Chicago, Media will in Annual Investor team Technology York the and Conference NASDAQ Suisse's Scottsdale Technology our in in Credit London. the James be Needham Stifel Midwest and Annual in - San Teleconference One-on-One Conference During quarter, Investor Francisco, Raymond Growth in Conference Conference XXst attending

New With will We the in call York, holding I'll Edinburgh. that, with also be and over hand meetings investors Mike. Dublin to

for model aim continued thanks our all towards and third transforming recurring Thanks in we we reoccurring the momentum to transformation gain and community the We've XX% digital deliver and revenue social of our business Mark. good and across morning call today. markets serve. total Good quarter the to joining revenue everyone the with continue our comprising

innovation demos. attendees updates overwhelmingly excited XXX which was of As many main use and we customers. long to had our clear know, is innovation that by it's Annual the product of Roughly that community Conference to positive that solutions stage the We held new individuals this XX of in joined customer introduced and our product list and resonating existing we've There's new includes record pace reaction time packed User than attendance. with you light about which at accelerated for no customers and the attendees of audience Orlando our month day. an us first showcase new and our of question more Blackbaud BBCON announcements are evident agenda up representing progress every the the high made X,XXX a our earlier

nonprofits, XX% top community the millions collectively of of nonprofits. XX% and software users of of part of the Over the are attendees represent over that Software most customers education We BBCON corporations, world growing IDC million Our organizations Blackbaud than and that in XXth Force healthcare XX,XXX serve influential innovative us one individuals. XX Software education of billion faith-based campaigns, and uniquely We're the each positioned hospital of only [ph] will and ecosystem institutions, connect in of serve XXX TAM. higher systems as Cloud the largest entire XX companies. to in $X most the and the nonprofit Fortune US ranked of third, the philanthropic are world's Company Company listed Blackbaud the the world institutions, larger organizations, growth we which as company. $XXX largest foundations, the estimate includes cloud verticals in

newly quarter programs. largest volunteer provide improved collective beyond enabling and cover understand adjustable of I'm we to development. services A dedicated digital Points across other the through BBCON software expand partnerships existing only and solution the We're help these share enabling measure, relationships each we're newly performance intelligence total is key roughly and volunteer not community conservable defining expertise, the we a volunteerism, overtime like than the to our transformation service our of partner opportunity of new strategy. Microsoft. organization with market for $XX and total. great software example announced This and impact which cloud continue our markets extends and to acquisitions is to manage Light. data is through is formed and of outcomes at partnership in less expansion technology our insights the inform will social actionable going on new formed market solutions. will it with Our a our standards, XX% in them Also The us, four-point the world's in focus data industry but context yield with good billion to organizations

cloud is and four in open solutions to drive The we the strategies in first integrated of our this. continue aggressively

solution made in introducing for we recall, you'll cloud As faith a announcement communities. July our comprehensive major

This integrated churches transform we'll cloud operations strength now are provider, management, them help together digitally this connected a in have end-to-end provide more churches through solution reduce a a church and prudent footprint they their that cloud With comprehensive marketing, raising, means IT and for now analytics can [ph] new enable experience. We with build fund way financial the capabilities. finally the payments our who systems will single bringing by vendors. single capabilities completely eight management work on move, modern accountable that

using has Blackbaud's well. management so. believe early like some feedback Has No adjustable in a several clear will this go-to-market platform. platform. engineering we're SKY in our take efforts, system is meaningful customer a game collaboration changes SKY adopters cloud Because Blackbaud's have be the close modern revenue this incorporating advancing today product do engineering church real-time We in approach. changer the our solution with industry taken with one in ramping large of platform assets even teams. In to concert a and or quickly resources but To we market. very has these our as this application these up time, We're

software. In now about a transformation means manage customers and solutions to rapid processes for private Calvary building Louis potential comprehensive main student BBCON that years and by student four-year at with and Edge Raiser's enable few platform quite a built engagement, Edge seamless is institution that higher on innovate market for Spirit the in proven It's a proven have they stewardship scalable with continue solutions of College manual looking alumni time office NXT Blackbaud portfolio our advantage here, in our This from SKY institution and customer in space. XX-year connected fashion, integration another massive education This fundraising platform. a system. capabilities transform we've flooded commercial way and advancement private marketing functionality institutions our with exciting one vertical Blackbaud very markets massive school began our We digital customers information new is significant digital student we step a education a operations. they management a admissions, lifecycle Calvary by to and in institutions ago for a a that experience, capabilities scheduling solution Introducing solution solution other our solution a was solution separated early is modern offering cloud cloud news the K-XX serve. innovation, access solution and higher opportunities enhanced to that we tailored we for This a space associated along cloud drive new some for announced of user stage full to BBCON, extending Blackbaud's very their the Additionally, a similar it's next cloud grade the to solution solutions the that will legacy predominantly influence continued comprehensive purpose in our rapidly We Blackbaud's been point complete new connect, The way commitment the finance, of universities with education cloud market enrolment, set as for the announced the education automate a excited an [ph] adopters. we by classroom possible new the education. saw have to with deliver our manage their takes and for University universities. comprised us Financial a St. academics, opportunity to admissions operations. guided can cloud another were with of innovation platform. a cloud good transformation. enhanced from for made management At competition. higher higher example entirely set for K-XX education. broad development forward told to higher with addressable of provide

our leveraging from available UX like capabilities cloud single sign-on by development our moved Blackbaud library. our component like pre-existing and interface for SKY start and didn't capability Just ID we Blackbaud user faith quickly communities scratch SKY

evolving demonstration of to leveraging needs have solutions higher another rapidly adjust components. our grow education high existing velocity and addressable and build markets. software of engineering mature our cloud and new services is We great a ever new further The ability environment to ecosystem customer

solution step a of across We the market and effectively announced initiative, of called sourced, in era first cloud integrated goods, mission financial to becoming and which core track, of capital localized We're of or managing is nonprofits initiatives that business distribution due whether innovation complex impact our stage management lifecycle with Microsoft helping or solution Which distribute as is As needs processes this in unprecedented the major costly we respond critical were at also part to needed and adopters. supply announcement conflicts, and resource main BBCON to needs distribution. nonprofit medical the every essential in with in suite global lives. to with share in forward the breakthrough for and saved in the natural disasters jointly material supplies, nonprofit announced currently a an The is distributed we urgently dollar clothing, resources nonprofits? it's is transform like the collaboration efficiently early in every their address challenges to nonprofit areas measure investment joint of power disaster across resource equity year need management humanitarian response of food nonprofits. the human and partnership cloud a save a last took accelerate more developed development

the The the sold Microsoft jointly through goods to Blackbaud customer. in December be connected partnership Blackbaud will channels is a capabilities seamlessly work first program solution sales providing step distribution set another experience follow. Blackbaud and released me in for solutions involving with compel which needs competitive for and our and integrated drive design be other sales effectiveness. between capability for developed, differentiator The partner an will home that leads and built hold This will with is and XX K-XX strategy forward will Selling our for a innovative This schools example key growth cloud forward. for solution Microsoft, software like our cloud market jointly purpose are to industry that to sales private team. customers' solutions co-sell second our technologies

value. selling on and experience account improves over customer cloud customer strategy attaching long-term. Higher payments products and the reoccurring customer revenue more retention increases outcomes, driving the training, focused ASPs sales executive now and Our solution We and improves analytics increased the retention total lifetime for vertical customer. lead drives that by know

sales create good to develop highly to significantly foundation opening poured continue in hiring filling underway sales We've greater past and more the over solutions positions. the for now underway value [ph] acquire and we're model in innovate and scalable our We progress our that customers. trends XXX ramping direct with productive with a

and for expanded is strategy strategy near to continuing executing acquisitions turn third into with several expansion. now our acquisitions primarily through expand new until which Let's We've TAM years We're been our or to TAM investments. TAM now. and adjacencies product have this

These integrated cloud our our approximately stands add to TAM. $X in communities, billion acquire not of just for higher education introduction With now in faith for will billion nonprofits, for the total. position build Cloud now $XX initiative at incremental Solution the a expanded introduction Blackbaud and TAM which solution cloud and roughly organically we're to

on Our strengthen final business improved strategic to initiative is and operational a deliver focus profitability. the efficiency

We more been scalable to execute our we model initiatives, how continue In in and organizational we've our creates overwhelmingly employee strategy positive. objectives new our into In investments, a driving better moved towards operating workforce. productivity consistency with headquarters and executing organizational we and a QX, align realignments. geographically workplace the through that has feedback efficiency XXXX, cohesive diverse infrastructure global been

for employees transitioned upgrade expand employees Overall the geographic accelerated employees the with seven centrally pace shift highly reaction excited enhancing our Charleston, facilities towards and South and collaborate employees optimizing improving of we're our closer coverage replace key to continued daily were of leveraging offer offices business market. revenue transformation into our more existing I'm innovation for our into moving the location. to outside of customers particularly the our the our of offices Overall of office the a footprint that I'm in new Carolina and reoccurring flexible and us, and sales successfully utilization effectiveness. strategy We've pleased delivering about is and and and For for customers. more more improved our located and our our already productivity monitored one and experience, our our

significantly new and IT addressable expanded of customer spend have Our TAM. announcements our cloud solutions our

fully developing the and Higher with a like the initiative for massive Microsoft for Ed integrated our Blackbaud. industry introduced clouds to game Our newly cloud end-to-end Cloud, integrated Faith changers opportunity commitment the in

I'll to performance our this opportunity year, Although months for has we solutions. turn over our previously future as given greater now financial announcements recently cover explained and Tony expansion reset guidance over TAM detail. the call our our expanded few the long-term in last to

Tony? Before we open it Q&A. up for

Today yesterday's Good investor we your for press get website Please Thanks performance. to of the to focus key QX materials on I'll refer everyone. our can so morning, our Mike. questions. release full highlights, detail posted to financial and

Recurring revenue Our was and XXXX. of basis. XXX organic an basis $XXX on over third million revenue increase an higher organic total QX, XX% is XXXX X.X% X.X% revenue basis quarter which represented on than an points of growth

drag for was total XXXX. other revenue creates in the that reducing and which and represented the mix in is drag company XX% of of primary lines. One-time other on recurring behaviour revenue The transactions mix services total revenue our declined QX, revenue XX% continued our We near associated by term. growth business revenues long-term consumer one-time services on positive driven us a significant with versus related

a Turning generated our to expansion of XX.X% of of is Education new the gross $XX to important into inclusive entirely an diluted is share of began We earnings XX.X% sales our acquisition decline that XXXX. to ramp we QX, margin our XX profitability, Faith performance that per $X.XX. innovation versus with an hiring note, of basis million Integrated which Reeher Cloud margin Higher income initiative operating operating It's in representing Cloud, point quarter. was like Microsoft, third investment investments margin operating in of Cloud and

to $XX flow million we Moving and in the flow. generated cash sheet. free cash In balance statement QX,

$X to associated investments our cloud for and innovation million and and making necessary continued infrastructure investments support new amounting headquarters million capitalized to the move our with software primarily CapEx $XX infrastructure to development. We in in

$XXX debt. and paid ended million During $X in quarter, million shareholders dividends the out cash to net in we with

and X.X stood of at EBITDA at capital less to the QX, end times. for of ratio calls strategy X.X Our times we a than debt

updated X. on our year, we categories. three October full The be summarized guidance outlook in the year change financial full our to into can Turning major

of since services The a several been half services first on for our positive in business of and part We're has plan our category we One-time our is the was you earnings shift which QX last roughly by strategy revenue one-time services. call. our design variance years updated to now model. shrinking one-time

our other in has services estimates. decline For the rate one-time in exceeded of second a and initial year the row,

projections rate nearly a experience year basis. now of Our some roughly million larger in behaviour to attach the similar nature decline in new Category for it and deals our fewer the successfully predictable transactional portfolio have are improved a at This this our two revenue. of decline in on of business ability solutions to to transactional is growth the as us our latest forecast. is deals. transactional recurring have variance category percentage that a category slower faster than one-time to expected which experiencing declining seen shifts XXXX recent as $XX consumer least onto We've consumer and plan teams transaction closed is our makes and major and larger And impacting sales based due although We're have plan. events. business behaviour

program material anticipate is aggressively category the retention retention XX% to to more and growth We continue more revenue third late and roles. support major The fuel is point And unit your and drive We this per earnings given XXX share we powered declined free ramp larger is headcount our than ramp by income. subscription hire non-GAAP variance. given these some and sun migrating margin, and customer Blackbaud primarily this sales a SKY quarter. revenue which our in sales now free as resulting a sales to has positive now away underway project is operating sales with We're least categories whole which and a Sunset more in three shared productivity Overall more headcount had in expected which driven in flow actively and on products. we flow. XXXX revision is three in fully our has previously, quarters well diluted with XXXX. onto than customers legacy we're questions and setting The the cash shortfall gone of the solutions. received operating multiple to midst migrations cash on through We're we're revision

So I clarity want change. that to on provide

associated margin This the profile. the business of is of shortfall lowest lost revenue we biggest with First, change. isn't our mix the driver the

capitalization million original flow given feel driver and extent. investment expense contemplate the to in cash interest with largest didn't is Reeher roughly sales. second third cost, software lesser guidance The acquisitions free The the acquisition $X associated making for and

as with part current making with with this $X tax We're by approximately cost as gain and an efficiencies payback savings $X costs associated all investments between initiative. of end of roughly incur activities of these before in expecting $X.X Finally The to of charges million $X million guidance the roughly Mike indicates years associated operating million restructuring strategy. and workplace annual We're XXXX to tax a to incurred we're of mentioned, per of be our currently in of restructuring our beginning margin before those incremental cash flow $X of XX%. we've substantially expecting two recorded Year-to-date with million XXXX. behind XXXX. between free year midpoint million estimated future expected

free our business from with In Reeher is growth million posted acquisition flow approach the against margin we're point $X impact to continuing and the roughly improved higher strategic XX.X% cash we investments plan drive to to our disciplined the profitability. which XXXX. execute margin maintaining summary, strengthening Excluding balanced a we're of would half the than be in

and our capital and balance open deployment your a maintain capital scalability. the With to I'd execute strong create line to in return to that questions. like continue shareholders to growth will for up strategy We sheet,

Roderick first and from take we'll our Stifel. Instructions] Tom [Operator with question

you're the about with ought XXXX. course here new until aggressive know be I into formal won't that position hoping to initiatives to those offer marry might on investments yet, your benefits of end next the comments begin of us in from I to as investments was qualitative for how XXXX year for but to some those and commentary call guidance the any and not we just of sort reality able offer to Tony, So you accrue

organic a new about until start think it and the normal about about for of depressed own again those when that think models Is as is some the use we this investments think IT going temporarily the about as quarter rate. of think year. we sort current So now that, Thanks. those being year, is for margin payment we recurring just for sort because growth this to of the services current ought that to in rate off right of models pay next our that then baseline investments level or adjusting and kind we best are as for [ph] next of

at historically us new investment Day sure in that we're of Tom. Day I openings year. want clear. Investor We've this as norm XXX sales, plus talked noted Thanks at the about a about we is XX% company. Investor to kind bit a for make we The have plan, This posted. a We added

ended we foreseeable in about, would in this just QX. one direct we we expect QX kind heads see heightened that you'll accelerated not up onboard future, spoke We the those started XXX heads as the the hiring of seeing coming and so So sales for at time. in ramp point in

had I is in with at XXX where we think a we end of were roughly the line QX. which

continue ramped better year XXXX ramp of bit opportunity quite will up through we rest bit sales the we to the of more go because market and of the and sheer the for headcount need a but still then So coverage. through there, a size

XXXX will higher to in close XXXX margins revenue get and on late build won't they deals that XXXX So By and then time additions we because push a more and down so pipeline pressure or we those on impact until and rateably. real through from that create recognize continue the get the boarded, perspective. see

to improve hopefully in growth pressure nearer So other We're that our will put the margins. doing some term. on rate things

know force now which focused sales XXX have to improving been very you we're on productivity as heads. is our and So existing

help we'll So some a see that will growth organic in XXXX which I'm in bit. improvements hopeful

some of sales revenue some one-time margins said, muted quarter we some because those hiring. smart This pressure events and trends be revenue consumer in had question, business. assuming Did that we things to behaviour accretive. just in QX the then let would see some kind in the downward in quarter margins that to hiring the related falloff the the of quarter certainly on That your the of didn't bit transactional improvement the major other on a were see investment marketing on this the repeat one-time we of and more of by part

the you. management Excellent. helpful incumbents there's lot Thank when talked going on new you the of are as you're structure initiative market. think the sort you Blackbaud services. of that and information, initiatives new questions Thank management I Can guys. you for course to you and are the going you of go the just know about of think an talk really some That's education? these right where you're a about I areas sort Can student opportunity at to information the management commentary. incumbents talk Who side? look Mike you some and been about new of sort go the education a little about bit about how after. of after incumbents in after

announcement. Yes, really excited about Sure. we're that

we've a we and this all ago. started of First what done while

taken As universities core sophisticated lot talked management K-XX about and years the on in of the it's more we that lot for couple in functionalities that last our a platform. a platform added same built and and a we've so we've essentially education market that's

commercially in It's a a there it's new platform key Lucian same many campus and enhanced you extended production on message universities not there scalable, K-XX from The will. is, us. starting it's although many, others. it's whole market universities it's and a solid, that are software from few so So customers is in college platform platform. new cloud an for platform with in in for there if The scratch companies the incumbents like not

college clients a are our have development only this couple talking and those for in up. a after we incumbents. level the several is, the the us office. highlighted now before exciting university conference and predominantly focused one I that using few weeks I'm signed about What's were We already. and we're there's ago the fundraising office and system so at

to [ph] platform the play So institutions. universities set share departmental now We've Gave a had. broader and platform within who's we're a but from over universities today, cover an smaller gone than system we're IT starting we to the departments and wallet away ever much colleges and we using and with and basically at not enterprise great the incumbents see the players like someone much had and K-XX with pretty universities, still new market a many the we are we're the and this like with after larger in wide have think, players we those but so going Workday and schools really in anticipating a we've is we're opportunity open there with market. have this legacy K-XX

we're this whole excited opportunity. So pretty about

And next question our we'll Baird. with take Oliver from Rob

question It's on the Rob a this for actually Mike faith-based morning. Matt Lemenager on solution.

products to and already of that built portfolio general into released In other out areas need asking be then product availability? terms the were into things is what the Blackbaud functionality that are from customers for, what before of built types

a faith-based Sure, been our available several so in market cloud of while. already solutions for that have

Edge those us. for up and that that was NXT, like new set institutions [indiscernible] been what hold things fundraising have in So or some Financial capabilities brand whole of our announced cloud available a platform we has K-XX when is schools

solutions those from so, before are that we had And that day modules facilities other run and with and church single that and like cloud. vendors solutions point more those fundraising all financials that XX one several never the the with level, are or XX and functions provide to market church and we at those able single now a so replace or to integrated many care replace we're other in

a common really side of a a the it's platform with church simplifies user us. for a operating one big move by system. integrated reporting So common It pretty experience having and

ons really complex reporting about might all to and XX multiple separate that and [indiscernible] the vendors. church difficult standalone XX systems software have from we've a it's separate of Just compared individual long on and pieces in and run or think They announced market. what just

the on what's new. church management that's So side

year. next availability be have it and using it sometime already production several in We will of general QX in customers in

Mike. something a here. it. know with seen expected helped be Thanks transactional bit to fourth one events really? How the And the little in of Got mid-term transaction, less that or much upcoming and does be would quarter one-time Is I we've business. the that a elections quick the an not impact like

hard It's tell, right. to

especially Elections other uptick related of to what some Mid-term it's of or do to have and mid-term for activities hard types generate Presidential it might our with customers last don't there. a elections institutions that. different we was elections. customer we've activity the and lots a know to related big we because but Presidential might I saw again, advocacy, So that We of tell that is not used elections. don't to the last really base effect advocacy have seen lot a it elections, actually of Election about solution related one

hard elections. it's mid-term may what So to really happen or based not may say on

good just giving looking still how the which And we're going do thing Tuesday into the Matt at I'd in we just as is add term. the on, the giving on one impact the coming force or indicator now end up year probably of reform might how near tax

of card only So a that's as there, sense better other end will have how the to goes. giving the year wild see probably

with our Raymond next Peterson from We'll question James. take Brian

of you. new little productivity just bookings? about that towards on Can So expect going for you you maybe a we a the big from capacity your for on forward? new is investments. make take XXXX, given of of for next just quarters. approach drive investment this And more Tony, perspective conservative ramp you But sales this that think know When the guidance lot as a does hires. us bit XXXX typical sales those the you, to remind philosophy you're I adding is over should to probably just several a

the one the how will able Brian be right we hire is of to quickly things, folks.

over towards selective to hire, be lot next So last to the so which also them about to make and efforts made much refer we're weighted are onboard. ramp years. these about being back of changes are a reps Prospect so on the PAE's still really a we towards be percentage as Account we who the bit of base Farmer over is business. Hunter the moved disparate. the we and The way couple will a balance in bigger that a time little talk to through prospecting large And in of correct the those hirers we focused we it true years, Execs tougher because model couple field times to hope this to going at hire are the out as does hiring we and just we've

probably of depending selling large the hiring get solutions or with just is the lot would you're with reps at kind true they're quicker they're and a months have cloud new to of folks, product on specific kind be full could count a vertical [indiscernible] can enterprise those looking set, that, say and than much reps productivity more their Where what of a type out. I strategic of you that year where. and of I of ramp the selling folks to different prospect the in that reps AE If than between large and handful longest could they a a extreme productivity. very to kind think stretch a and associated on then specific out with

will conservative. we So be

thing bit pay of We in one a more think to mention ramps a did commission lieu a was bit little the take I hit initially as when are new and [ph] ramping, of mostly. well. out and again Tom's question during I incur be forgot draw we commissions capitalizable not most draw is folks those we we ramp because period that it's would expense as to so higher and actually have cases that in that a

recurring quarter about than two one-time that, the we revenue shifted of we versus mix like it has XX% and I recognition XX-XX is now because expect anticipated will to total quarter think, we revenue more of the shift as to to a couple sooner well, as roughly little which later of over which it recurring means a made recurring next company last also. years

that you some Thanks on Got what's part component. UK happening transactional trended could think quarter. that what's revenue. guys internationally? versus to it maybe visibility dynamics to just guys. the Is domestically into regards called business your as is third and you and out maybe happening not transactional parse there before, that domestically way I just there out the how your of I curious any much And understand with

good. looked domestic the So

and one a accounts average biggest was last by those where of couple quarter areas there's the hurricanes from have lot of we number also probably also that events saw of about drove populated that many the events think onetime international we so events. it's last that seasonality the the size of [indiscernible] a we of - was The in and we when did volumes big. year So how was the a we happen but hit unfortunate transaction volumes. big down and drives so in, little thing third looked were will the good. how end then year, seeing bit We and predictability expected, your and had very when one-time issue had And you

smart on so past after population. we're we credit of total a layers that smart. get got do with of with an until cloud. better noted team opportunity an paying change better bit due smart piece the visibility earlier we're smart of we've the our K-XX thing of that this to US, the job just the to noted That in mix a to that for about seen because the have a schools little sure [indiscernible] anticipated. direction talking mix we've for smart not investment the couple as therefore oddity year implemented process kind pattern school kids to the with get fees. with smart parents where we're many forecasting versus job and cases and with for some parents and bit and because fairly year difficulty mix of a last implement not that's different and now been the year there's shifted school that that higher We good in have we and impacts sales of fees So tuition upfront in that and and to school the as fees bit on period do that of and instead on they smart follow-up a was have that a had would this several don't little of we're just making over that started, of then to be us mix better the this overall to kind And selling ACH and implement we've that we year that, part do time higher last what we We've the year modules and just that was less got to a paying itself card got starts tuition job, of in had

whole and So the process school missing I therefore smart implementing the in guess season. later

Blair And we'll our from William Company. with next Justin & Furby question take

more today, migration? we as many do this an get gap Mike thing here NXT them think on-prem have the when around color haven't a standpoint. of at we biggest getting are you that factors yet and I gaining was RE are old you could you're just that you development where from absolution Are on still you to hoping some years you over the on-prem what that how exists to point raises or What if compare and customer. brought there think functionality the left do migrate

some on-prem, some like yet. modules to plug-in to Sure gaps the of are there that there, the still out there's aren't functionality that things there's no in gap exists over and world but integration NXT

we're need no for some differences that really. and still those that. we to doing So functionality But us there's gaps represent close

and the NXT online marketing solution in on-prem. significantly fact, the and categories which cloud digital inherent like the never on-prem Edge functionality the capabilities NXT the new whole in than is is Raiser's more existed even In

and functionality a huge around of actually but there's platform, plug gaps some modules. integration some in there's new So to the amount still unit plug-in

takes any down. through a product. this those knocking process go to while we're It So with

it ago, of would we take been we didn't and years still when a of years see solution that a this several it to need to said for perform been gap time until and time are the product knock anyone integration solution. we're get fill hasn't a not left or and to couple has takes right there's move, gaps this years to module to some that announced related outstanding of we have just in customers just the really down so reception kind actually or and these some forcing the functionality the So closed them and couple that on-prem it's not still the all either plug-in before that the

things thing we SKY that Edge subsequent all that did The to other thing integrated. that doing in the inherently first because is Raiser's are we're product NXT the architecture, the was

haven't part There's integration [ph] of dock day do, environment. work, like extra so and the things of it Edge a faith So before church because the no is core level core with just there's where the management NXT. at management integration church no RE one, solution it's a test to it's the all NXT new one like integration we level it's really Raiser's just shares and had work

from a standpoint. advantage competitive really really, So great

I'm And approach talk thoughts the that this Thanks. make of account transactional forward? and that you your guidance just routes newer does you these sort bit then business, your give should about next new could little other business happened Tony, what to impact. and a maybe guidance going curious side year with on year rethink the for

then in that of on BBMS more other of products our standard doing several We've building actually lot the years question. some smart front. to growth add just the on the a been a year tools acquisitions acquisitions some of and then for that's internally new out expansions We've had drive will and last Justin very forecast work good even better couple of some and just the over kind of when business. business and planned this you giving really platform of transactional sizable the

historically, So product what understand impacts, as events we than sophisticated legacy impacts impact actually the fairly so more migration techniques base. one-time can modeling and using we across the done are granular level forecast tools out these that well and building some all us have more allowing robust data in would better their a to of

so then when, like there historically building understand events at what that and robust had that when something appreciate few what you that customers that request be with frequency and like tools a able entire the have we're Trump As that those was equation sophisticated we back or these lot of [indiscernible] population something sure that Presidential you much on got so was forecast different in on we're sort that events would effect participate that looking the kind to hurricane, of both called also Election, to of and clearly and impact on have that kind we're can impacted set front. sides by so make more various more a one-time to unusual to more getting what and the and they we those across quite of you understand

can So much forecast I feel that and much more a our in more I historically XXXX than better position going to payments think level accurately be we'll in into business the of we fully going articulate have granular of in dynamics understand we forward. we and then we'll for these also things included one-time more anticipated our clearly so historical what those kind events, guide

with Jaluria Davidson. A. D. Rishi from question next our take we'll And

resource solution developed Let me the start management. nonprofit with the by asking jointly about Microsoft,

and could can is we Is of Microsoft if sharing there kind relationship a revenue how give looks kind Maybe from and then got the details little about is that selling separately? if details, go-to-market? some like there you give jointly, I've standpoint wondering of Tony. that follow-up joint and a sell motion Just to you something bit are going this both arrangement for

markets We've a in it's platform our of Microsoft years started general couple then in lot of mention. that. with of in ago. [indiscernible] so the and into engineering go-to-market have several was healthcare continued the with of partnership and announced in layer in the and education all with work we're move We production in year together Sure, about to building institutions to Ralph nonprofits that with done the ago they're ago take them and in them. or SKY growth partnership the which and We Mike a market and another which [ph] we're that Azure several with was I'll added year announced commitment operations we've relationship

collaboration still winning on new. do days on connected market. the if another It's Microsoft a And the developing It's is go first the distribution. now. layer which a market partnering component building sales We're teams are and that to that together. together deals that, jointly we ours. tissue, is to we announced of solution What new go-to-market goods we're and management and so early resource we a, here together is fairly nonprofit develop their still but And between in still of

it market. and a the You because specifically supply and in just our And something could and think environments. both solution - in Office of we like developing it as naturally I'll for - of Dynamics together categorize are management be chain a and nonprofits. that for XXX are integrated complementary solutions we're as our will which with well

developed jointly in new partnering that sold both of we be because then sold, So we're standalone the on jointly together us and serve. that specifically and question markets your also it at will opportunities to be will selling together

an is that cost related kind to accounting is to [ph] then accretive reflection margins. and some gave of is on Amaze that a be Thanks. model the one-time acquisition, Mike of then That's itself. turn the impact indicative to and finally looks acquisition you asset us Thanks. of helpful. you business that the how can or it. really that Got is million $X some color Reeher

included year. we million on in of do that had would not Yes, is and was cash close the of range in to to our what guide. be We because when later $X the Reeher were became have original so guidance initially in was able know you sort then, as unless we guide and cover guidance impact the a the original the Rishi problem we flow deal so referring typically cash flow not that's our very

We that ramping so original and either. also budget anticipated sales was guide headcount, in not had not our

$X and in all CapEx performance update well of issue, deal we and cost expense or in that cap So incurred million of incremental software. of one-time really the be inclusive incremental ramp had the also inclusive we acquisition some would integration illegal as interest cause the this what also be sales The the then is revenue guide. on any related that cost depth etc. as of would

actual of those, anticipate free from up flow one-time Reeher rate that accretive right would a to will future run front of kind standpoint. acquisition of we profitability be we nature what cash a expect and chunk lot big that more we is said get from and in associated not with a would So be perspective and which

think moving be the following first I we I'm full guys accretive first that year. wrong acquisition, we next to dilutive correct it so if would get the initially we what me to acquisition year, year said in would but you expect it the that

Mike. is that. and add Yes this I'll just

fully integrated already that acquisition. have We

behind product So as really team additive it's has And integrated, stayed. longer really and [indiscernible] us anticipated no from but helps growth product want now we for standpoint. great. integrated a it company fully Management sales forward but and performing a of great go a operating It's which couple from quickly on and a months a management standpoint, and us. it's that's essentially quite

Materne And we'll Kirk take Evercore our from next with ISI. question

Levine Peter is in This for Kirk.

not process? are through On churches using. I know they you how management the to church kind eight I about IT departments. in sure really who of management systems I'm into process can to using, you selling you're and deploy these mean get solution. sales of church kind mean there's what's the them walk in-depth I new what us like. talked the that star church products XX sales are

up large their to the institution structure and the sometimes of we're CFO institution there a the have hundreds there the then the and and typically have in all There typically of is were faith because differences in churches they and whole on one organization depends President group Typically and to them as CFO depends church the the fact organization is well. institution churches IT. of a to have head function of institution are are priest in both sell The of or really they equivalent the Sure faith-based tens folks IT of moved types. that too they are is sales we up individual to church if the sizes reporting And with that and an it those selling single are is in a institution is there's on motion of is that on, or something institution the or that the that that size CEO in firms. the a based sizes.

different we as where ones. providers and providers all far couple out as larger software as of typically lots of that's of there. so sales And solutions come There's the a is like lots The of our markets motion. small from are faith-based,

much, pretty It's faith-based One fundraising this a of lots financials could that we we equity go called older where we IT is of new business implementation brands. a with private And them cloud historically we owned start almost replacing of sell module, into have the solutions legacy from us solutions. - now now by module would and [indiscernible] is to an spend institution standpoint. an and journey and cover entire allows

then to implement church might solution, financial for faith-based and that have cloud management the example, they system institution new a point up whole for on So sign a might based time or we platform if their and raising provide have we in our and platform. first fund K-XX supply school implement

new have them universities announcement them of end this applies also. so as to well, Some higher directly

all in just So selling sales. but unit the for are it's of is, good it topics fundraising. covered really opposed depends on we now folks And that our business motion, that to the departmental institution the as topic

Ed historically very than we different Higher announcement well. as place that's university have our very, and true So with done holds

Great.

your question know strategy. sales hiring is, focused vertical Day second I team. you go-to-market a I Analyst more believe I about have talked The at

that higher - going newer church, the reps Ed. more So hiring they're you're towards the

see, If we the where just a could provide product you kind of on can little more color side. [indiscernible]

them internationally well. whole we're across company in and the Yes, adding as

the earlier logo we of adding to all So a - on think that in the such in verticals. the point that market. Tony's headcount We're our sales everywhere of But predominantly new side. of have large terms fact address it's

K-XX we're America. Over sales a headcount well the schools private over well. we addressable still last talked as there several in K-XX about years, There's XX,XXX lot North adding

cloud solutions a the the board. have ones new these market verticals it's Ed new of the higher like and we across faith-based addressable including and large each so opportunity So

question we'll our Garg next KeyBanc. from Monika with And take

of recurring about Generally growth about lower it's double-digit you've the given half the think talk going forward? the growth less back that. talked course Maybe about in year that just how but of rate to than you could recurring revenue

XXXX level. the one-time on to the of we healthy The those couple organic revenue, on The the had some ago, channels short-term that that the that is the last of predominantly described we've been puts related is and growth had, weeks a revenue answered the revenue basis total questions minutes through smaller company and couple transition one-time day for total a of annual obviously ago some call we've transaction pressure investor of company that organic some pressure we we've on growth. have quite fact puts much on going that Tony

in our that but of TAM they're And announcements in billion. as Ed higher faith-based fact, so expanded producing long-term at revenue lots couple and today producing $X see clouds, months the issue obviously have we last don't the a those and announcements opportunity we've are by of all made

in a a drive bit Also drives and internationally entire well partnership growing very future well. fairly talked standpoint, little them opportunity growth North revenue, of in new, still America Microsoft. we're them. our markets. It's and I growing term partnership with new a to about their partnering we're in in footprint reoccurring large existing as but ecosystem. with the global loss as sales a It's with which go-to-market obviously with those those, from So have organic in They side as partnering well and

Microsoft new team unit, in a other new a verticals. business really at common nonprofit today globally our relationship, including partnered executive but to year new world interest particular institutions and verticals involved have this it's Microsoft. the new They fantastic helping little are education around that a with have have But are old footprints relationships actively They around and we that in a formed, that's unit pursuits the nonprofits unit business we've world. a the in over business higher being focus support market. So still drive the with to a from the

there opportunity and organic drive growth solutions them. with of partnership lots So a to with new

margin right, then a expansion thank going you. forward. lot. flow of All Thanks about And free to think how cash

perspective. Tony. Monika from We quarter free cash had really this a flow is a good

services I with non-repeating. in one taking think consideration side like on doing of we've in really onetime time the seen just business we're is some difficulties some events, the of the the year of these on transactions well that Feel front.

then paybacks put if was we facility acquisition facility pressure. sizable one and a really also As increase the said as we've And nice going million you cost headquarters of recall this moved quite our into fairly to estimated those downward year on are had $X charges the impact will questions, us for we earlier couple in and take Reeher new our but of years. going which strategy of a also it's taken workforce and optimization part few give to things

at didn't do backing think XX% flow the million cash about new year with been margin. I out this the math that of acquisitions impact the rough we would if $X our impact plus headquarters we free have

that put some more years. going some overall room of few to sales your we on free I some do give we'll to margins. we on think that these of flow start But be lot some paybacks and we're and us like we've get done revenue overtime where so more So point, of quickly are kind it's the you more start able our see will to expansion there ramp seeing as margins recurring a expand initial fully to past as investments continue to I last what cash [indiscernible] growing pressure think I over the profitability. overtime our pressure, we investments and that good feel really downward put

from has receivable, if look revenue deferred team up hit balance focused relatively accounts up [indiscernible] the you you, the comparably doing I improve. That been a sheet overall things collecting our DSO balances good know that our tells yearend substantially of our are flat. account billings really yet receivable continues really we're on and me, those on new job You cleaning one really to

think forward also. as flow help really margin going well the a from capital stellar is perspective, I job cash doing will team a working there free So which

actually plan on a and that includes pressure adding so talked run plan lot the have we our to company facilities longer associates the on economically it and is, a long-term in to down standpoint We margin us, we'll feasible a facilities flexibility a the about increased better for cost this related but globally global and front. forward, our in long-term well. be [Indiscernible] short-run, plan puts a as not of the closer facilities for footprint margin to better for customers, a from and little creates

Company. we'll our next from MacDonald Ryan & question And with take Needham

US JustGiving the washed at to you're and the then to as everydayhero. JustGiving sort moving I guess sort versus with perspective an as forward that well other. anniversary on those first of you progressing guess timeline any for integrate Can is JustGiving be as was when that expecting refresh solutions you updates Strategically look October. how them the you off, from to whether integration in of early one acquisition now the in we've us expect and or I business leading

year about the consumer us is the down great expansion of which really some it for we couple scale. giving that had direct didn't talked half because a folks sure is and we performing gets back weeks, great acquisition have puts cloud on the Yes globally is we platform in consumer at in challenge We've The to really in in which in facing. into the last expand of platform some quite this UK JustGiving. that us these software are JustGiving software cloud business hired pressure is The year some to the including that bit folks companies little that companies the well. a from [indiscernible] general the platform really US of

integrating middle the with back So really We're ad. office platform skill solution. good our and

and platform like will that integrated with the in well unique is it only make regard. that will that's It it which core be So solutions Blackbaud underway.

work that. creates make today use of it example, to doing then lot by And platforms so our cost, a eliminate if donation for other a for it back of friendly office you customers. customers Where our a that, makes they're it we'll operationally lot some will and if for

year, to With mostly events well doing, the with overall anticipate performing due onetime acquisition. but great soon. that the it's to year-over-year for on the platform, we're that really us expansion we're consumer we're a than a working little less add facing compare in happy launching but in as been fairly that of It's and less integration well this platform so a and US a really into great direct model work

quick Great just and thanks a then follow-up.

of announced done of terms we newer these building that look that being out early XXXX adopters ramping in a and sort business really lot the sales obviously strategic solutions then focus guess talk the of the we headcount In or that whether and you've some is of as as release now of out of for about I you work right look balancing growth the the there not focus continuing XXXX. mid-to-late shifting now general some out versus organic typically via balance in M&A you're on sort XXXX. and focus in expansion Can along of XXXX, focus in

for to TAM significantly not vertical that, our has say us for makes would look significant changing to we're from Adjacencies for acquisitions we're the at we that continue that markets M&A is so changed add ability Near through candidate standpoint. that focused development. a I and in, expansions organic Yes strategy sense What continues TAM that

So organic and faith-base so [indiscernible] in organic about expansion builds. continued developments a those announcement, billion are has expansion for which tuck-in, TAM look cloud at we acquisitions and from plays Ed run now as - mentioned faith-based cloud have the run $X higher two us TAM added TAM and the and will I cloud, to

next and path you in down organic of sense general the verticals we'll availability so and add back of And if the of that's as ramp both early year continue as with and half will going to those adopters make with and to continue will the builds has those others. folks and they go-to-market so and begun the we

play is added of we've build So there's organic expansion TAM binary no to had, not that we've we've TAM just second do expansion, is say done playbook which we'll what that to flip so wouldn't what the have, M&A meaning both. it's we to only I organic continue a

session. any question-and-answer it today's conclude closing over Mike remarks. or I'd does back Gianoni to like turn that for And to additional

cloud and driving everyone. announcements recent by Ed market for with Thanks close Higher remain shown saying around that our with nonprofit. we've we Faith operator. I'll and committed innovation as just development our Thanks, solutions to joint Microsoft for

of to TAM All on call. forward added look about the excited to really future our Thanks we're progress We have on investments. billion to updating related everyone. those the next these so $X

Thank does And for conference. participation. today's you conclude that your

now You disconnect. may