Blackbaud (BLKB) 3 May 192019 Q1 Earnings call transcript

Good day. and welcome to Blackbaud's First Quarter 2019 Earnings Call. Today's call is being recorded. And at this time, I would like to turn the call over to Mark Furlong. Please go ahead, sir.

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

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

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

and Services New team Global attending our Baird's Insight Boston. Consumer be York, Technology Sector Conference & During Cross in Conference the second quarter, in Stifel will

in I'll the April for was and to proxy call With We that, Mike. Annual Baltimore, be And June please note investors the turn our XX. Meeting distributed with will Toronto. on statement that finally, Montréal XX holding meetings also Shareholder over

Mark. and today. to joining Thanks morning, solid long-term of our our with the continue execution of Good objectives results first our made position everyone. to quarter call for Thanks company strategic against We success. for the progress I'm pleased XXXX.

advance and on new applications, We the which brought acquisition YourCause, our closed customers and adjustable existing value creates for to market grows rapidly markets. of solutions to continue and shareholders our our lasting

underway, are teams sales well sales incredibly And account second expectations, initiatives. the I'm productivity. has received targeted recognition tracking the a Blackbaud of our in proud Our few currently of internal executives that and ramping to half on XXXX program hired to are the

Forbes year Xth midsize release by consecutive behind social the Forbes following unchanged. employers rating A, the upgraded named XX responsibility recently outlook is Blackbaud of and as of We're best named one technology Westmoreland by was powerful just one women top employers best of inaugural America's our one now year With one for Diversity MSCI and our Beth Mary report. most an financial our also in named of full the us, quarter National America's ESG for to diversity, Council. CTO, the our

We full financial reaffirming are guidance. our year XXXX

more growth X-point detail results, strategy. an Tony context on usual, provide financial update of on As I'll will the our and provide our

is fully on the strategies enabling with integrated of significant. open of first The integrated our is and the and customers cloud four solutions power our cloud. impact We're the

additional integration more by Target labor the increased NXT. leveraging gift than XXX% was Zoo the impact Edge a by Research Forrester $XXX,XXX For realize with $XXX,XXX, revenue avoided by increased able cost their operation Houston Raiser's recent funds around total study $X by major example, Analytics Blackbaud on to investment, conducted nearly campaign a million return economic Blackbaud's and in

massive game Last carried opportunity a XXXX. Our and year end-to-end and a year momentum innovation, cloud that a vertical-specific was changer the we integrated for to developing is Blackbaud. solutions into fully for industry commitment banner for Blackbaud

making empower supporters peer-to-peer peer-to-peer is by at customers cost. more. professional can campaigns days, their March, largest peer-to-peer exciting. and for engage live good fundraising events, while industry market first due an with for to trends This who at elevates and portfolio best-in-class launch been than to Americans between that new of fundraising by opportunity the disrupting gathering their to our powered annual fundraise quarter, U.S. a networks their X to supporters, is the market X organizations continuing in big digital the to technology. Blackbaud's forum, fundraising by harness on During solution change more year-over-year. Launch the mobile fundraising experience show due no we our behalf. of with direct the Since JustGiving. of delivers peer-to-peer has Fundraising continues XXXX announced numbers deal Studies of to subscription Blackbaud landscape growing those solution in proliferation all Blackbaud with transformation, virtual giving our unparalleled customers. uniquely peer-to-peer grow providing to connection online the contribute This industry-leading these radical campaigns, cloud positioned social social fundraising professionals, to launching response a stream

being we're fact, customers for up customers day with net every the new new payment In majority single Blackbaud. them signing of transaction

in traditional purchasing invoices. increased from such Blackbaud in our an experience introduced and and and and capital procurement controls providing scalable is working supplier value our customers our for Financial of customers Purchase efficient improvements. orders daily through user to time decentralized paper-based with checks, intuitive enabling methods, improved automation. with substantial The realized with realize and discounts monitoring as Cards to flow alternative result Early right savings and convenient management feedback time, payable cash as our purchase processing also Edge them procurement and expense integrated the the customers We highlights NXT way, processes a through savings such benefits cycle reductions

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developed adopters. first development, we're in close jointly solution collaboration with currently Management Nonprofit is early Resource Our and in working

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cloud is tools salespeople our of or the more new better trying our which second In to process 'XX, cross hires for of methodology ramp second practice. as Selling a modern drive our best CXO we working company teams. customers purpose-built in a leadership key sales also select are approach and our our brought be innovative We managers nonprofit me to solutions explore solutions sector enable successful. quarter, Nonprofit a a the well drive which our with with experts to sales much ramped sales competitive partnerships integrated in framework implemented sales way Microsoft the across effectiveness. to hiring past. productivity. progressing good. Summit, a the uniform In training and simplify leaders and and This providing targeted we to to our than differentiator group We in common social participated and of necessary technology sales Those XXXX the leads that practice is program growth to are spent significantly XXXX strategy, for together half to first

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acquisition We responsibility employee in is TAM which billion Let's our industry we YourCause, of now another leader an TAM. and technology. In to strategy, the $X.X social corporate of added third turn expansion. January, completed engagement enterprise

experience, giving customers volunteering, employee in software model told Now and to the growth formal the in thrived early In effectiveness because we're companies to modern number broader social unmatched expected and partner employee and us. for Fortune program. rise quadrupled we've to it. to had seen successes employees intuitive excited engagement the of differentiated with only demanded, user first had as a and decision With in opportunity social in a Blackbaud's expertise about with about good capabilities giving Adding were is volunteerism, in this businesses community. and and notable Blackbaud philanthropy quarter. platform, workplace XXXX, a DuPont other XX% DuPont game number cards the XX% companies and us intelligence cause changer cloud corporate many services By and excited XXXX, driving data their in capabilities the YourCause's innovative critical We're transparent and manage giving their programs. that companies XXX YourCause's selecting of responsibility YourCause the in like incentive companies market. continues

the market development. adjustable evaluation of our billion. We TAM at in product to total internal and active stands acquisitions expand now further opportunities $XX through over Our remain

on business is long-term Our efficiency, operational final position strategic strengthen the to and for us initiative focus success.

over results delivered care and experience throughout with in President the Canada's within Both their great General Canadian to operations. at of business Amazon education, internationally Manager and as under quarter, excited we the most nonprofit I'm particularly as recently now has financial drive a strategy locations our footprint before to General year. ahead our last of our call customer-facing added accelerated sector, position of in continued years health continue excellence have Q&A. Allan this creates teams to technology seasoned that their us, a towards leadership. our we in performance model, revenue a largely to expand year Group, you execute innovation month, first the turn is the expect through strategy, execute International the greater to David continue understanding into in This seasoned ago, to joined our a executive against our Allan of enterprise shift another a David's U.S., of open I'm effort. team a President We operating been cover international with executive, this Hoffmann, who and global operational I'll by opportunity we and up as we're deep remind the upgrade we the high-performance our Tony roles. outstanding Allan Tony? existing reaction scalable with And and delivering new services. and of of This market. customers David and of for some team the pace Web workplace brings of recurring In careers, more joined detail the about market. for complete be and our pleased I'll Benjamin, XX around Manager looking us multiyear and the our end the we're over execution subscription-based the to XXXX. Overall, a program for replace with growth offices,

right I everyone. Good the key leases QX leases. our this expected quarter From the get assets your flows all impact quickly materials of press statement of refer and P&L to the note can new related financial use focus standard ASC and the for so minor. The lease accounting recognizing XXX we questions. our release Please yesterday's and highlights detail posted to Thanks full cash for financial on performance. adopted website to were largest to and morning, the impact balance I'll substantially a perspective, to liabilities we for as our of on Mike. investor Today, sheet of

recurring our of basis than an revenue, quarter, revenue total to is and Turning X.X% represented of XX% XXX QX higher the points growth mix XXXX organic which on basis.

XXXX. $X creates is of one-time growth which near that other successfully and XXXX, XX%. XX% million term other in which anticipate in of declined year XX% mix One-time our other total I'll to one-time the versus revenue the services a decline company healthy a remind represented you us continue full is decline of to declined revenue revenue and roughly the that We long revenue, of for significant only drag reduce accelerate X% and the year-over-year QX positive is quarter, services services total term. We the mix for and for which rate year long-term. last to the on

ramp hiring to of operating the our investment in heightened XX.X% to that note sales margin in performance of $X.XX. income profitability, and began XXXX. gross of per we quarter innovation inclusive We diluted operating margin third million, Turning earnings representing quarter XX.X%. our of was to first $XX important that of and our an was generated operating share margin investment It's

mentioned, Mike tax restructuring million against expecting to accelerated million including XXXX. the currently the between in activities before been execute $X.X million in of of $X continue we've these costs workplace associated $X.X has to we quarter. incurred our million, total first date, which We're to also $X.X which As incur with strategy, restructuring and

more estimates updated relocate offices. our we've some consolidate and Our the to of aggressive actions taken reflect

beginning beyond We expect XXXX before million per $X and future million operating of efficiencies in between to gain year tax savings $X XXXX. annual with

and Moving sheet. to statement the flow cash balance

severance and negative heightened the remind our sales seasonal and Our QX $XX is first our include results million. flow free our quarter innovation was in low our cash workplace year the within with I'll land our payments flow full guidance typically investment a you We're and million associated $XXX range strategy. well to restructuring of expecting million. as still as $XXX cash to

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

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

and a than summary, just for continued In financial and calls at of strategy against at capital strategic year is And of end the Our maintaining the strengthen and I'd that, disciplined plan open reiterate allowing return our scalability. guidance. questions. improve to X.Xx. approach capital we balanced to investments growth call growth our maintain continue and balance sheet, strategy capital Xx. business stood the to our us less full profitability, deployment your to strong and on debt-to-EBITDA execute QX, drive to we up shareholders We're execution create to ratio to will With under our for a like

question [Operator from first Instructions] take Stifel. will We Tom Roderick our with

I I'll been the I'd guess, thoughts in on Then question in And your specifically, questions to it's Mike, acquiring So Salesforce elements love you've been formally of topical. getting your thoughts I know Salesforce.org. the on. wrapping to love hear hear jump on and back queue. I'd it. three

three-parter a it make we'll here. So one question

played and trailing looks a mid-market, but the $XXX past they've Seems be in have XX%. commented competitively what business The marketplace. first that bit to you part little is, a built really they in you've that million much growing don't Salesforce the see here SMB

the partnership Microsoft that deepen enterprise? force? on here, now the response other make you Microsoft about front will of think about that And expect is, that would So any incentive they your Blackbaud, market encourage competitive a growing how point, to nonprofit you might from or in then that then even your partner. towards And of segments the want part you're be showing growth? you that positioning the with greater does does respect in space? this you you that wondering their as on TAM and more mentioned move change hearing with Second to how element do here to that have sales seem think their own seeing the relationship what It to last and

to want last challenges back Charleston. mention I first make some I had didn't it night, slight Everyone, to I so

to do that coordinate So try not things our Tom. Tony to On specifically, best couple there, in are and the same We'll room. of our answers. I

no mention One since there. we happened. not company markets together work surprises founded I'm repeat a very very, software we're always I'll that surprised a build thing the for and ago, this they myself, decade very solutions so First, we vertical over I They that and serve. were specific closely

my integrated and information platform peer-to-peer a the the integrated around some remarks K-XX with that in financial supplier We've now financial. management tuition ed. got FE Just Church student enrollment in in of fundraising with expense both purchase NXT, U.S., Management, examples space, education system learning with in JustGiving prepared and around management in of and customers our and and and management procurement faith-based higher our for launch expansion cards management

very we we're a in not that markets the long for do And changed very, in time. hasn't we build many see So in. of markets, our that specific including vertical solutions competitor Salesforce any

secondly, software obviously focused is really large on TAM. quite now and say There's keep growing. So company The by TAM our competitors. we we're I'll We're vertical big of a vertical. They're that TAM. different, different lot We are a very a expanding too.

a is yes, And there. the there continues get to get go So partnership Microsoft, lastly, out lot on stronger, the Tom. to

us are things are, XXX the platform field like synergistic. We footprint just a together. The for they're the and synergistic using board. big compensation going Office significant. across are is The market company fit. to and The great partnership a scale obviously products their because It's Azure is plans for one

to is up verticals surprised keep doubling been. headcount. specific acquisition, So our ramping what that on not just we our I'm on down landscape competitive and innovation, it's and sales our

Brian come Peterson Raymond James. with next Our will question from

for digits X%. it in on That little like year organic I start came higher the guys close than revenue mid-single a at was I you to growth. wanted I looks was to recurring So modeled. the and

That would guys that on expectation? you what drove helpful. color be give any that can So

quarters two back-to-back on side bookings We've This our subscription good Brian. of business the had from a is Thanks, contractual now perspective. Tony.

happy initial and mix structural the we're couple to of and of we've really a reallocation nice recurring We've seen the shift continued results towards changes made hiring all So years with ramp in seeming sales the that's the pay-off. last in in this revenue. over

quarter. As you've time we actually spoke seen we year services One put about at We're to the seeing deceleration decline. together, we of Last one saw last guidance one-time as sales continues ran and I XX% XX% up total we're reduction time, of the this think to when rate this year recurring probably off. in we in our revenues about Acceleration drop XX%, XX% expected quarter. and of before, quarter.

So that's long accelerating, on and line services a in a with overall will and of little which is term the that for growth. good painful And be our continue to right drag. bit strategy

related for this we do late out really be hope higher the rate. focused this end clip at quarter so at bottom next think sales sales Hopefully, last it that expectation. year will higher a continue the the sales year continuing year. more add year, add won't now to of op and we'll to about or year year next into support so, on rate, spoke we like 'XX until to sometime going I wait did will a folks We're through we marketing last our as and we

sales number, out organic if don't starting carved recurring organic see adds, I results, to so you're QX, benefits but some of although And through we're back and late impacts I then growth net we on you're into speaking so the on that. acquisition as think we added That's going seeing ramp obviously new revenue year had we'll growth and taken see rate to. break next that as the I time think good think positive but spoke from that positive well. us that to QX about, we into some it's XX largely come

strong And side, you are follow-up should that that suite how from just think of know, on like I'm expansion well the already, if resonating versus opportunity I with the I new we we pretty it education existing presence opportunity, logos? there. there curious higher have sounds split as can think about product your a institutions just about

ed got us a side higher got a it's think there. we of it's moving Yes, great and department, in fantastic. there fundraising. both been Mike. new is a will, and a foundation great there, space, several operating if last over the a the this foundation in really higher And opportunity they presence the the greenfield footprint on We've progress opportunity into and logo have We've where ed. frankly, rates in years cross-sell focus for in our Brian, net you win

significant and areas cross-sell operating net well. we've side learning that expand and then to platform system, So smaller advantage tuition just the There logos of information that and really in capability the the for legacy it's competitors bring an years our management, management opportunity worked new that success in a things system taken are universities. K-XX, on we enrollment, to in space of as and to it several school student couple management add like as over

as So I a in to it's we remarks, in big the deal prepared an expansion in opportunity my closed date for And platform. existing just mentioned our largest well. us that

So that and in there. over get both adopter a later but opportunity it's new availability We're us early to for bit mode early year, logo. good flipped cross-sell this days yes, general will still

Our with Davidson. come Rishi next question Jaluria from will D.A.

a your if QX, on payments some was to weakest any color controlling the line you perspective with recurring could bit a quarter margins. wanted provide maybe I of just detail last there relative the of little Maybe factors? margin heavy Is Tony recurring gross delay? contraction year, helpful. those from more relative little you one, even provide why but be both seasonally typically bit there this Number gross it which is to could a would down given to start on So

gross at can of see adjustments number and last think versus things on had QX, it a gross so at came gross compared overall, on recurring. 'XX well at, as full that from we jump you I in look rebates bit had a year one margins was that of to margin in perspective year the But that one-time related XX.X% the more year into higher Absolutely, think some our the QX for to side compare. the the business. at because from I And full margin look look total we so I I much that transactional some the inflated

continued contracts number QX gross year. came in about overall total renew, as subs XX also Our recurring. margin that the subscription, The in gross points it our period services to investments also from several et talked and effective services we've on out we've taking embed quarters owning on you're margin long recurring, have implementation last does the gross pressure put which it for our it COLO those initial We've hardware shift We're annual as amenities the about embedding data started drivers margin be moving centers into big a basis cetera, of in and that one-time to cogs to and into third-party will cost us cloud. now, of the into but business some term create offers substantial into making services, so to below the some same nice benefit lower-margin line. for because are us

still another bit years incurring we those that to of a we'll so duplicative probably have three be costs. And two

low prepared in we're bit on products, ramp that where largely driving than the that amortization and cloud-base software we prior capitalized cap said, positive With our spend the to subscription a cloud on good innovation, larger our to expected. some on appear looks the seeing guide full negative expectations. margins just which to therefore investment our reiterating more out on innovation, have much Again spoke gross which true NXT into some come that to we at to margins. been like the and be gross good in operating little we've sooner driving take And compared going is both his compared a margins those of question, bit consensus, GAAP and It's in feel gross of in costs impact higher. and a bookings pretty line. we're in about year. momentum to COGS and Mike when in little percentage required having is recurring the thirdly, on our the also rate then a remarks of be gets Overall, that's R&D the this And those all

the signs And Good how launch you give some future. might to Microsoft like? And what to alongside a share sales in co-selling NRM motion and turning the sense the look partnership. go-to-market would early that be? there, what of on that out us with then for that, the see revenue the the but maybe Can for product directionally,

market a So co-selling we're we of of for which are with the in just now ways, in a customers that not well. solution different new Microsoft lot approach really great lot in a with it's good markets, as is and

between is well. the Specifically, well. co-developing of as companies happening both a underway, going integration that with It's There partners. with that be in there that solution, two we're them. We'll selling as well the lot as marketplace

to really the I details layer progressing solution to think that, global and going with that's that going I'll us and that's supply chain management this solution that another well. remind break out not is big impact. any of nonprofits, a you in have excited So took for category to a I'm large them. we're Microsoft with relationship point, in but of codevelop about at partnership, specific financial new the

So we're that. excited about

question with Rutherford Our from Stephens, Inc. next comes James

the And new different drove have few these give been on more the a quarter. another selling up want or Obviously, this? sub-verticals, lot difference in on were again more a here perhaps sub-verticals you I growth can the wins? here of step first but to of products some at back in lot see to were have you it of already, and revenue color a that products, crack nice what to there recurring recurring base or questions the biggest line logo taking start

all plans, portfolio. place or accelerated marketing approach across most good improvement this in our realigned efforts. and things are is sales positive comp traction force, years individual or to changes well investments few in sales dividends and the take product to realigned as this the been any as or on earmark set this the it. really starting made seen I Certainly, working those I'll structure We've the wouldn't We've positive Tony. productivity vertical. in over on pay hiring. of sales We've we have last we've ramp product

say Cloud, hold to that and lot verticals. those Microsoft are Mike the seen partnership, think things still about on the new think are opportunities would expansion very growth but higher, but the see across I of in don't ramping of consistent we market I set start we expect a future. with new some coming think Faith those the that. of general drivers rollout our really the that those the we've spoke solutions efforts excited we our from I'd about in as we availability, I years yet, infancy, their nice are in all

started that sales from than impact, that's it marketing growth efforts more have specific and to But seen there We we'd really nice product set driving material a the we've would others. but already, future. not towards had those put no solution or balance but is a expect individual with

with business that's we largely now of growth Mike nonexistent a business payments but been the line pieces historically have of come piece and and more certainly market the because higher offerings. rate might a were back penetrating has before, rest that little in years, the large Over growth, got was fairly of here, business that our that

I that of growth back into nothing that's driver, strategy. it think, today our out plays higher So all a jumps specific

and another the core well. subscriptions add have you question. bookings in that as jump in strong just I'll performance pleased Mike. ahead, Go we're is This with

Yes, just a follow-up actually. on that

line, curious we margin to earlier growth gross the you're the one-time benefit providing that on of in that any mentioned your those services rolling line? subscription something recurring knew. in which just into some question that is is I'm You

The would is one that come it add on product. would thing that typically the rev the obviously ASP when into on is to to So term also ASP XXX the creates interesting those the impact not of then agreement. over play first the costs spread of and trying be rec complications recognized when the

spread that over exceed cases, term. three-year many contract to in initial So the out average may years

said, of that timing year, and well the most get recurring. evaluate is of it wouldn't revenue is item. implementations XXX% And would in offset then difference first some the XXX, largely being under one-time fall within recognition that you in have So although uplift driving to the although within the line then, potential you

be some and for geographic not to to is is fronts, that it folks ASP or you first do but do in a trying the get wouldn't then reduce XXX% a changes We there lose year. So the are to going what purchase are we're of barrier those necessarily that migration part on one-to-one. on uplift

perspective to drive more we trying that so unit to very being a the to incremental of And going cost customer hopefully help are volume spread from forward. cognizant

Baird. next will Rob come question from with Our Oliver

quarter? been first the been reach into there starting capacity hiring, for I stepped-up continued that to hiring rep has Lemenager same are this second a sales direct on hiring for the sales of Matt Rob morning. has half the you so know last at about of level XX% the in had direct up year, question, was up you're level? has that there? I it the Or looking stepped

that sales last of Matt, it's be the good the that that's We when the year. next to year back just We year sales ramped reasons to and Mike. obviously on. around continuing last end we ramp well. wait continue continuing in do about year, in Yes, XX% focus We're year, won't which something QX. had as now, so we this operationally. we'll that to ramp we till year to about wraps the do We in a but once breakout plan K, we'll on headcount up aggressive the feel ramp

around have comment end verticals in we the that last market capacity, I'm big Your is here the of a in. we're sure the because top what capacity really not

and pretty So productivity, really rate could train capacity the new to but just about absorb, to add ability get and question our our folks that of be big. to ramp we'll is the headcount. continue the I'll But say

just them future of we've the We've Tony. I'll from year, historically is that. be in this somewhere XX% productivity. a self but will got Matt, a fund margin they that are this increase a hit to classes, folks should investment, to full when expectation added these help to And once between right? were had the those so on perspective full add funding they productivity X% if

couple of so P&L in end that in the and after is more classes class but P&L. we that here at to that and to last we a that start calls. certainly that, And we rate, this heightened said will as seeing impact get 'XX that probably we see we hire continue the It's funding will start full expectation future of the the productivity. initial that that towards then classes future in So benefit 'XX positive closer once to

that Church customers, that The ruling follow-up. then Taking feedback about. out adoption? anything to pace one sees Blackbaud necessary is SKY types more think, for waiting out area, allowed updates? there a see like broad product is things are just innovation. just one has Or talked it's from of they Or that Is more for? increase before things around been are quick product Management they or to asking two of incremental have add there And you adoption? that I that the it you as to what that stands In that

I in the space, which Church Management what Yes, asking. specifically think Matt, is you're

Let me back. take a step

platform all solution the and goes our that SKY is our products markets. across So of engineering

So the Church an specifically that within the solutions now Management Church board iterative and across it's process. in we way Management, build

brought Management we those on the adopters from will and build ready a say By add well. essentially every month in it's early way give adopters early soon we are general as there point adopters to reiterate adopters. production, get then Church now the and continue system early availability. feedback we then So and us and until to for fairly right, okay, early The

needs. they so give feedback us their And on

to that business done in transformation digital our work platform SKY analysis own that that been in the how to before. hasn't have Church do drive waves Management understand space folks through We

availability and it's itself we're an at allows ready put general we right, for that just builds iterative then And so into upon capabilities pace the want until process it platform it production to. SKY us to because continues,

once month. put in we'll new a typically so And or features twice

engineering a general we into early but go continue twice is the When month. or velocity higher capabilities, adopters. early have of on we will power SKY We'll system. when adding really keep so and And a just it's on once that that availability, it that be might

Furby from will Our William question next with Company. come & Blair Justin

JustGiving. to wanted on ask I Mike,

to you the solution. market was wanted removed few there? model that terms over in in of announcement you peer-to-peer place. the the last you an that years? of made then think and the couple understand months when is And think structure the and a your to I strategy U.S. I impact you the X% of fee that do go-to-market And in minute next what out rollout the on how spend Can you plays just that that

simple. pretty it's Yes,

and monthly fee, So the so payment two transactions, to sign monetized Customers up using one the pricing and have through to platform. free. an don't a that basically on revenue Justin, do They payments see a adoption for no negative us things, just start so is in via subscription in essentially pay having uptick model, it's as having because model. monetize We it's subscription. see fact, it our that. impact opportunity on We not the of with

first the that's part. So

integrated back platform but solutions that's NXT our unique. and not free so in is unique. applicable middle part ways, platforms of two using Blackbaud's start no markets with and it two Those with unique integrated really for solutions that, things fee. with to The make solutions middle our we've in all office; our like Therefore, There JustGiving and subscription with fundraising back and and just payments other integrated customers it's example; office RE using as second an other office. It's integrated that's another back and platform our isn't so and our middle that.

fantastic scalable, as over great start over to a in you mobile very the all campaign, platform, UK, is there been think I there. a know, It's folks easy footprint, used by intuitive, highly first. that's big upside a platform the world,

days. So opportunity month We think there early for we're it about customers. just us and excited a launched our but for its the ago, I

Tony. Justin, this is

lot various in as Just all done and on have It to and provide very, of the opportunity contribution are confident U.K. the U.K. on sustainable piece there received market well to been that that's the very the the in a platform, market. well. a constituents a support end still across business the that, testing we've model Donor voluntary has of

model So change specifically. there well we in pretty U.K. feel good the as in about that that

how And just then follow-up for know it looks if changed you've I And seen sense in of or benchmarking your to terms nonprofit your health you've April you cadence give a observations the of a could the the market I ended like more year-to-date? here trends Tony. year? of Mike overall on but through release, last ask quarterly year quick can to any relative any for the

that. lot model you make from do thing add pretty pricing imagine the might allows JustGiving and the we One go do standpoint. I'll we we're prove changes, extensive to back of Justin, going results, to the on take before where Sure, a just with changes. as The question platform testing out original to model and us that's testing a to happy so pricing

on health the market, markets market moving digital the online see front huge charity fundraising lot in the a such and far it's to in the of mobile related us a really we As we're all marketplace, driving of to pure just adoption. again as of fundraising in great and side, transformation and it's but

I for schools earnings market, the entire the call I very a announced we've in think won in example, today, large K-XX which of the platform. handful last in

so and And continues in platform. that for is verticals those market differentiator healthy the the us to really be integrated

an lot displacing are the its solutions single point for platform a is value standalone We prop many significant. school in of single and cases with integrated

of it us. Giving you their market to the for donation that that's see go to So big, $XX an think, the pressure across was so the the our active report Each board, And our market. that markets donations just a point we $XXX I I'll I any markets, external year-over-year to billion, all think U.S. well. back billion time are TAM on pretty market. big ran grew, U.S. that last in fact don't the doing They're represents

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

mentioned productivity new that not sure you obviously, and how great. guess, to in good looking us of cohort board Mike, that it's you or were a who remind getting these is us bookings Mike are should but folks coming running? you I'm this that guess, wants think in this Or have I about productivity I as sales about on you quarter, be I can nine full or think Tony, just assume when track terms you month which the guys up and take talked on it? just came last Can how people one, that coming to and them you journey? year sales productivity I remind good

productivity end, lead looks Couple very lead the gen competitive of way to a the in is back through qualify system at have that an detailed attainment management all all not just which to to know, because sales the quota the as success. closure, to things, all we development wins to pipeline through cycle way journey full we activity-based it's

use a that good teams it's and uniform think same got it's something are for rolled program very we've that detailed the world approach transparent our and company. with sales for the and executives same the very, to we've leadership, for metrics And it's sales literally very pretty metrics of out. I internally system a very sales the us, the in all program driving So our and

Ramp with methodology that it's happy different there. we level. time, have by really the So

It's a better well. we productivity is to to doing think are probably selling XX again takes to a full think opportunity we it's will. while call large productivity enterprise multimillion-dollar you're deal longer say, what an bills versus measure. get XX-month drive large executives, to I'd well. very something it's if that frame, we months different it's for it's large enterprise in get more months, a but to as institution the would time if deal, On a but smaller like XX to roughly we're true deal, and there six If productivity. you average, We We to

got and the the focused system we've on verticals pretty program that. to whole driving of the metrics So across headcount also transparency, adding with measuring each new and so good productivity, in aggressively it and the sales is about board, full our feel see pretty pretty we and

I before. spoken to we've X add thing, want Kirk, this about And

to group we're oTE, is good over ARR in quartile of focus as closer Mike a which of oTE. ultimately got believe driving There ARR well there team. peer number as the our on a and improves keen but in we productivity, over strategy of ARR obviously a perspective it's percentile that key target or the and rates really analysis increased some we'd time. to the that hold have towards said, our sizable to or top have LTV margin there, us to better drivers of somewhere that as of XXth in there, to a We and from here. assume that lot years focused flat and improve ARR over retention you've rates to part gen, different are come benchmarked on I as lead for levers converting improve opportunity things replace are all those to oTE. into And model, several bookings better that, years, true play a every just you our today that close leads, then better services don't and like better actually company We our so think Mike I things about be the done those retention the gross CAC flat we've But to shrinking offers sale-specific year, benchmarked, quality of was assuming the to to one-time single rates, talking we've

the in lot made Yes, important, past is Kirk, the this operational other of a talked we've thing I I too. will add changes is, which about is

X sales on plan. Everyone X we've into compensation vertical today and farmers. markets. globally. is We're in divided team So We're operations hunters support and got

of incremental us behind changes, made all a now. structurally which are lot we've So

Now Structure much productivity. and changes headcount pretty about are done. adds it's

just it guess I point put a now. on to final And

Given be the year, to there to would the the given capacity system, revenue get of would little what I you quarter. a see be adding it like bit organic assume bounced for late this seems rates higher churn maybe course is recurring but over I one, you a trends look are offsets? up the sequentially to just the have weren't good, recurring your Tony, organic if missing you capacity. of If guess, churn have for up. go walk assume, for through the setup I'm not to make potentially happen, that else can good year weren't -- pretty just me I over make to the sure case something will to more course just you trying accelerate payment to happened? I guess. with revenue trying you, recurring all to the I'm it to I'm of see organic when that better

rates saw there us Yes, a of things. hit retention If some couple worsen reason. on I for piece a that. obviously think that you Churn on is of we

finished and about we've of has solution The officially sunset. been sphere products, just other the of we now old but guess one XX spoke news haven't sunsetting the largest, I the good this,

we on teams So another a rates we keenly drag when of sales that is that's Attrition a speak and within and at productive the metric marketing look we're focused that big been FTEs. us on, call churn. we area

And reallocation when you of new cause so folks Mike attrition, so positions, types and out cetera. go plans, those keeping then different and rates, things of on on focus time we're XX ramp rehire hire said, heightened et times attrition the changed we by of and a can productivity to lot fill keen our resources a did the reps, comp all that and reps,

as up the may is people can reallocation be are really right So that, just and increase counseling seats where goes derail then FTEs those What to to we a time have we they spend change good efforts folks coaching might about them ramping of say ultimately leave expectations that and get in and/or where productive that and would going number and feel folks the focus. about really heading. that staff there in have expectations would lot because and it's we I get there's or that the but we we're more out to of them would into on not of

churn on you side. the up saw heading. lines transactional probably, changes still I'd cause that feel And is what things lastly, year side other some through comes maybe that side headcount that we last giving impact, the do So on some business potential those in of Tuition the recurring amount then good about attrition and we're again payments, those say usage, really lesser that revenue could We things. of deflation. in along now, or consumer the where right But have have could being I some Smart some

well new will productivity net drive of the long-term we and that growth. get our will for folks can add out be bode to also And continue productive We timely manner then them expectation. overtime, force if should a of nice get better in all that sales acceleration sales

We'll with question take line Needham. next our of MacDonald from Ryan the

I talk off guess, a I first on logos. new guess, where Tony, that maybe the you first opportunities It that some what quarter surprises And some quarter and there first starting have synergies about Mike YourCause. you Can nice company that seems you like see in now with just upside end, you've decently being performance business or the fold? learned, nice was there, integrated? with incremental for in it

of by a great YourCause synergy. couldn't is join Blackbaud. more and a synergy. team. a There having It's I is great be pleased cultural There lot platform

We're adding fast like back-office integration. areas on went we in expect, might sales you investments go-to-market. As and

early there think I it's days too.

significant, think I all there in because a the too. responsibility opportunity markets sizes, is in all is trend of the corporate social market addressable lot on of companies focusing given

universities the in constrained is by a opportunities vertical we there and markets fact not already market. So health in it's things. And serve, care,

to but in lot remind ability there in organic So to retention be we in even due and takes them there although year, we and got We've XXX from them great of and to them customers pretty lot do that. is ability the this million in customers on with help And in of because And good partner script revenue growth. company, that just large the January, really will great include DuPont bottom a also just deal through of diligence million Fortune we're accelerate a end year, contribution that I think and of we you our that really winning the total a not as It's $XX our is early to it their it's that lot like I'll I keep a calcs revenue. days high. platform and be we've upside. of at Their a a closed next midsize 'XX platform. that disclosed organic level would winning company come them around the mentioned just between $XX well. get And exclude closer for for

for yes, us. excited So add great We're a it. it's about

Salesforce.org, landscape. the behind follow-up, see I And way competitor this of around them product products acquisition those the with the focused that pace Clearly, getting assumption that's competitive then just with of maybe customer strategy the more do NXT all maybe of the days now? the just in on more you migrations competitive it's a market going sunsets as and guess, as now, space some a still with or a the the at investment change early out of platforms preventing but to dollars to customers this or larger competitive you just company the on

not we Yes, you remind that any markets. Ryan, just going mean I see our of to in I'm do all competitor

of That's purposely solutions cover, markets. innovation in They market We're change logic are all that markets. solutions the I They're by down the specific business three, cover competitors; company. for we not competitors; have we're operations strategy we're at doubling vertical all. one. mean, right? All software company. different our no are a markets they our K-XX it competitors to the we software right, customers. built specific vertical doesn't our The very very fact, And on a because Faith are our don't customers. do. In Two, our of We build charities, specific different. very our has most

built. not IT customers that don't specifically are aren't platforms have typically, shops able they adopt cases to so Our many large in

so And doesn't change. Blackbaud, for strategy our

to and and our got with very a add we've to we channel, innovation TAM. We drive will distribution long runway large a continue think

does to remarks. this question-and-answer conference Gianoni with over session. or like turn today's conclude And ladies gentlemen, to and additional Mike I'd closing back the

QX I results. I with that am pleased to just really reiterate want our

drive market-specific to continue We our innovation.

YourCause the really just mentioned JustGiving in the the addition I As happy launch and about U.S.

a think for there's both. runway long I

our speaking helping And customers, continue them their which our most is I important. to We transformation digital next look and improve call. drive on with you to is for Tony results, which forward

you, thank everyone. So

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

now You may disconnect.