Blackbaud (BLKB) 1 Aug 202020 Q2 Earnings call transcript

Greetings and welcome to the Blackbaud Second Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Mr. Corporate Investor Director, for Senior Furlong, Finance Relations and Blackbaud. Mark you. Thank

begin. You may

for Good earnings XXXX morning, joining on everyone. Thanks us Blackbaud's second quarter call.

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

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

and Annual Communications will Annual quarter, attending be third the Conference, Oppenheimer our Technology XXrd Genuity virtually Conference. Growth During XXth team Internet Canaccord the

D.A. will to be meetings the I'll that, in turn also by Mike. and call hosted over participating James. Davidson Raymond With virtual We

respond be COVID-XX proud quickly and strong at for began, serving Mark. and uncertain to call our we standard incredibly our employees today. Good partner the our our customers. to thanks employees continuing prioritizing high very I'm and these to the health our and ensure during a everyone a joining times. business enacted of When pandemic their dedication customers while Thanks, morning, to plans of moved for welfare

second duration driving during short against plans fell and reflect remains results Our quarter given often globally these flow scenario a the for the of strong the uncertain. the our demonstrate with to the of focus start the and original execution plan magnitude heightened continue cash initial profitability our on although exceeded underappreciated from Revenue pandemic quarter times. our as of planning resilience this it customers of pandemic, market challenging these

I our virtual and This way remote to operate market We the their of been social With workforce. ability and transformational effectively a efforts over never are to few to it financials critical. technology our our quite closed, of across from our experienced in home. in proud work in business I've allowed effectively employees' our a believe offices the the more world the last in physical we've morning, to years Tony place support been to immediately software by missions share effective ability switch made changes will global reliable work cloud before we've detail. The the has and a having to business new we a through support organizations good several more to us And supported updates cover and over March highly impressed related so working. environment turn to to as I

workforce we're past reevaluating over our strategy few anticipation of the elements of in on the As months. lessons we think based reopening, our ahead offices learned

develop further by firmly creating on a programs building and attract and diverse to and talent committed culture environment. strong our inclusive experiences best are the We that employee promote and

Best workplace received to just national In fact, of Workplaces Forbes list Women being named list. two and recognitions, for for Fast Employers Innovators culture Blackbaud's Company's Best

more education, and diversity financial that in awareness, inclusive are programs community We focused involvement on empowerment, continued to recruitment, support. progress make creating

than step to We and inclusion topic you'll at earlier a head joined also a recognize of hiring This excited that voice is one us remember Maggie now ever, the Chief the journey. People needs year. Blackbaud. of Driscoll, diversity the unified process reasons our of next I'm more strong, the equality is in reporting of who This on directly our this we're Officer,

different the in ways to manifest continues across virus of markets to customers. Turning we broker The the itself that serve. our impact

operations. key methods We're time, difficult with breakthroughs, institutions this proud effectively critical treat fundraisers power in directly cost vaccine around production equipment, and core other to software that fund During virus potential technology ventilator our to essential research healthcare manage and low and spread. and slow including its the to non-profits, our needed world within supporting education solutions fundraise higher functions are the

for completely environment continue new we've shape free to was the current landscape competency-based of for impacted original with for education year. to that's a classroom. The their being plan effort over environment cloud learn with other welcomed run pandemic on current as been solving be more serving critical to As online churches, group having operations moving technology from an our of This plays some core evident be and XXXX, of virtual annual churches which XX% a around indicated tech at which in Learning learning above on retention these updated was beginning to survey remote to over leaders, the often distance for we our Xth attendees, under private for role future conference pandemic throughout has display for in doors format. with policies models I'll education made of conduct and release Management held the the challenged to and on note will thousands is system these more be the churches stayed although the of to X,XXX that this day in as activities with K-XX best preparation operations. practices also System rates, is of attendance. of bbcon customer made We ranging event environment plan and and events, both to day systems planning fee categories organizations as continue XXX most the run the research Of record churches cash how from increased of a than set October to a to to core have giving to now no during challenges, took the conference month open education, private and adequate hybrid independent a place global earlier our partnered or fall. need promote rate and a an supporting procedures frontline registration surveyed, attendance the two-thirds health from of in XXX size which are the rely the aside quickly and for organizations than and reported school on investments as continues us will the and with the for this all timeliness the a schools first-time has admission having museums our renewal registrants open attend. trend we and reimagined visitors. for Blackbaud typically K-XX sessions Xth solutions their X,XXX reserves In largest for their in and attendance. record the more crisis. driver cultural our to year to Blackbaud's safety XXX The Zoos, a our focused even competency-based revenue in-person attended lost as in key organizations pre-pandemic XX% same schools during education was these in

events current the this in-person donors. canceled During or with forced the momentum while be organizations of supporters, capturing to strategies social to attention there new postponed shift. potential and had to been to even quarter, maintain help make being them We've online shifted are good employ new many

already new are continue to our features during missions this Our we their customers current and focus acted to can feedback with they so upon are customer this that to functionality time. lending have on to serve quickly and enhancements solutions equipped themselves environment, add

new acquiring new which For and integration raising and fundraising forms virtual supporters to built to allowing between critical is environment. and peer-to-peer management create example, we've process campaigns, and through easily donations of donor peer-to-peer expedite while the pandemic-friendly organizations events simplified solutions quickly the donation simplifying to current fundraising We campaigns.

four-point This innovative the new on cash also flow solutions ties management to operations and delighting We from capabilities execution to against continued growth support solutions. customers our the strategy and financial to management from transition our cloud financial our further cloud. our efficient collaboration with and added easing that back focus home working

over adoption to market. environment. the accelerate made focus cost also the increasing we marketing more believe solutions are We will conditions. longer market And current of us and and the quickly efforts driving digital impact effective our our The in on investments sales to COVID-XX our we've trends be in adapt to are term, driving to the cloud enabling in footprint prescriptive enhance our effectiveness changing of existing modern

a challenge of pipeline also Despite creating the of on today's changing on in long our we revenues. of pricing pressure uncertainty near-term customers. offers budget based needs new over and bookings introduced ability is the are to short We put expectations, our our to optimism expect and short-term which build financing the term, falling environment

the shifting value, pleased our on and with our adapt greater As also the to toward backfill aimed focus positions a the sales with managers at a lead through result, bookings. we've quarter solutions we a execution I'm second all to put lifetime Overall, XXXX environment. current we began digital highest marketing enabled generation as emphasis with sales selling on investments

customer-centric the to well-being on as build continuing at prioritize work future continue to employees our think our of strong about We the culture. we Blackbaud, of

even finding once will This a are market as ways can creative we resilience cloud good the and continue the and missions. ensure more their to on well organizations. market best of catalyst industry deliver they to in the solutions move that customers very positioned for proving leader modern faster for crisis to social this be a long-term and purpose-built toward partner Our remain our

originally more in our to levels. ability I limit and The came we on has created emphasis strategy, on Therefore, approach in the with ability to our revenue clear likely of revenue We line a to the and of to of on quarter the greater outlook short-term we pivot flow, Q&A. long-term early economics results as a drive indicator underlying increased has through at since Blackbaud a uncertainty relied The in drive and open With our up do near-term to controllable. pipeline turn results it and made QX that, over growth and opportunity to are I'll drive call value profitability bookings before profitability. balanced business. similar growth shareholder will impacts to which this. Tony our the cash pandemic up our are see strategy, the planned Our for Tony? delivering

I'll before quarter cover morning, for briefly your our the up Thanks, everyone. Good second line underlying opening and Mike. trends highlights questions.

can refer of yesterday's detail full performance. the press posted our investor and You to release materials the our to QX for website

Turning to results. our

Second of X.X% recurring over basis. XXXX, grew quarter revenue organic increased an X.X% on QX revenue and

Our revenue remains of short our two-thirds company fell roughly original our contracted is although recurring plan. revenue total which of healthy

seasonal through mentioned, July, likely performed our initial expectations planning. better growth. revenue of near-term Renewal from put than which have trended ahead the prospective. our rates Mike environment current pressure will a scenario renewals is Bookings slightly our on high As

pipeline So we for and year historical to our expecting at plan currently see continue are a rates. original versus shortfall at point, this building the we challenges significant

with presented on create points This some million we've we points revenue historically greater would our reclassification recurring reduced that and for or have in revenue. reclassified softness go-to-market will drag XXXX. recurring approximately also our basis last investments XXXX approximately much our rate impact half on after year's focus growth, this rebalanced $X organic change. revenue. services normalizing note I'll basis by While revenue revenue a the consistent bookings with XXXX have next second other on will quarter, Therefore, that been XXX growth one-time XXX to a

included schedule Investor more presentation supplemental on available website. our our For detail, to investor please refer the Relations in

XX.X% to $XX of earnings income quarter $X.XX. was gross representing generated operating Moving of million, margin operating margin We per our earnings, XX.X%. an diluted share of and second

year. reduce for likely meaningfully and borrowing know, increase we liquidity next are will into actions you actions our capacity. As took temporary to The and early reverse heading some taken the significant although of costs, generated cost bolster quarter actions these related reduction

elevated an expect margin we profile going However, forward.

For employees example, for our we expect XXX(k) match to XXXX. program reinstate in

also shift to making service cloud investments of cloud related we our providers. to importance continued third-party of infrastructure the Given initiative, the

performance what profitability shows and clearly the a Our over we possible have in the perspective from quarter the is resiliency long term.

the to cash and balance turn let's statement sheet. Now flow

XX% free XX.X%. actions taken of to ended manage flow QX to flow $XX that over a of result and needed to Again, balance a acted we representing cash million Our array quickly margin the pandemic. financial from the preserve outcomes flexibility our We quarter QX increased $XXX strong believe XXXX cash may debt. free with million sheet net in of ensure we have this we wide

capital times and QX, end debt-to-EBITDA at with the times a stood capacity. million than borrowing Our X.X for ratio $XXX of strategy calls less X.X at of of we

Charleston CapEx cloud we phase amounting $XX X adjacent headquarters significant building. to for the our to an as and quarter. savings the the land, support lease. investments gives purchase additional in The We to entered planned for development million continue will June, and flexibility software currently into capitalized the we think making building we agreement million infrastructure term lease to necessary Also which and our ahead innovation generate our cost us of transaction $X of and operations in

we during remaining close the stability customers of to transaction critically of and employees. In outlay approximately success of XXXX the our million. the the an expect executed focused cash second with economic our second summary, and We while the of in quarter $XX well health on very half upfront

business. possible of of pandemic and our scale, ability and continue of market the reflection our to serve the resiliency the flow. The available, array more is results the the of ultimate the clear on profitability duration base, but wide the our stability under-appreciated predicting refining as assumptions still a of becomes scenarios our a customer in are we information quarter model cash and We impact challenge the to magnitude and

shareholders story said to along, and of are for to is four-point this the that, our growth strategy. As line our to balanced a value continuing all I'd while Mike open we current your uncertainties creating like and against up the the environment, have With committed questions. I firmly for despite execute

first with Our comes [Operator line question Roderick the Instructions] from Tom Stifel. of

Mike, throw just let first you. me at here the one

think the are sort time some I now, where you little so back, on of down I'd when you right But there's come here. cost interesting probably bit love the a a where long extra model words, cost important in at back, to a and of is costs finding back, to the how the end all discretionary pivot will obviously growth will markets take a starts about In discussion stayed travel come model? come back this for other those you're line come T&E but that take will can at really the some of out to point. out some challenged. for business business hear it's ways more of and then good

Just detail, about philosophical back that markets. as margin, you growth us And the more mind, the more of take don't growth have changes us end to of from? sort on revenue happen? you then through in because the impaired think put initiatives what some that be if Where giving to to a for some burner structural pivot is little comes while bit

Sure, Tom. Thanks.

of parts that, a many the to in productivity we're of more related So couple driving things business.

although we things sales So like ago sales, leads something a in driving for in we've platforms through investments productivity actually digital about environment in related team challenged to and our which a a driving digital there more better year, example, bit and increased mentioned, year you bigger started way areas like rep per so in i.e. increased right sales drive that. this capabilities, is as bookings more significantly is productivity, per person to spend now we've is pretty this

first are the scaled, quarter, the have these in call, original but a than than beginning early up had beginning change cost year, where quite the in, this from the the we plan came bit standpoint, talked pandemic. plan revenue set what of of have a year, we in in Markets Our haven't of also excellence. a lower about time centers higher our resilient, for to our we've we pretty this the organizational

engineering, for the function Company and in one group that's center, one professional one every scalable. So for services, call

eliminating the the to two-day that systems, actually to groups from common business the go of So scale people. operating But systems. It pockets on and is internal by in us those margin Company us because and grow the systems to we in of well can common thing miss not the a years significantly a cost our having common five to our fantastic of the areas notice it systems. little operationally. key with without IT related we're job automating also done handful in a business hundreds to We've as allowed standpoint beat remote just scale a all allows last

quite a the is the Tony example will can areas off So we now QX prepared in costs main, a come our things January some of future. that XXX(k) come few where of There's in this back, the in few a back X. but other come scalability remarks, result and drive mentioned back. representative that'll we the there's match, will shut

reports back it customers you. you Great. that the out I back take with put bed in could was It ransomware May. of the spring. communication then issue to the was seems in sort regarding that And going though of address are impacted now. the an as good. some understand to right second That's a recent just really Mike, attack Thank company media the

of And is issue your entirely communication customers we So impact you would X, lingering that in number churn should it the just X, of the the care then charges any around about questions we or and be that from of are to are that up mirror? worry the bundled issue? how rearview number I can inside number for all confident guess reacting to And X, be has we need with and there associated any are say? sort road that this aware down been financial numbers the taken

to that. know talking on Yeah. because behalf -- related and listen been I've be just wanted customers the do of to customers, I Sure. any apologize like for ones just lot I listening that to might incident. they the off do also I the Happy to call, And on that, for a Blackbaud of start I'd just recorded. to they to

solutions one years, a several our backup unfortunately in subset third-party the attempted modern investments we best nature our intrusion Over the of with to including research based customers of sophisticated the get a is cyber significant environment. got significant. Like which our a investigation any best and we and that subset that and to experts attempts last ransomware in practice conduct of security practices, publicly. including we security in, have with quarter, industry millions went practice. and And made a test month risk our build infrastructure, data work we've simulations, aggressively to the of lot in And disseminated incident the believe discovered of several no reason that companies, or cyber our enforcement available third-party made we we follow folks will criminal five assessments And or with, of law during beyond attack. the be on we experts stopped we including come and a ongoing

hosted customers our we and that not eradicate impact ago. a were our stop and a company's reach goal a criminal any incident it environment, couple happens. did control detect who of to is were of of of that, notified so and of never get and cyber quickly of a the weeks production able subset majority environments The to the, So did

we're this. of a disruption but unfortunate, have involved not it's help all and this, we service through because customers So, our working of were here to that with did them

space, the shored obviously did test pretty my this that confidence here been several think It's good this outside it, it, unfortunate outside because the in discovered significant of we spot hired outside that the we that to this area we work have, we're tops And this folks backgrounds related the have us I or to So we've with are in years. we from firms in up level amount the wasn't their confident happened, of area, the by companies firms a of and the and we is, related over will. we this the fields. one area last if particular tested we're investment, outside work had one has you expertise remediate that company with

to So part diligent it's big of we forward. unfortunate the this but ours it's of focus business quite in a remain driving and happen,

your as rates, are doing follow-up other two. the And, far, comments talked Tom, to our we well. Thus very just about on in renewal prepared

currently, rates running which July, you'll end see part QX comes seasonality financials. material great see to you financial of the are news. are to original do charge, through first budget, anticipate which our of into know, of And and is We of renewals, our to that early So kind come we not a QX anything failures, currently original QX, cost, any ahead biggest et originally anticipate that and coverage hit of have in insurance the But we do here company. for out, some of don't as might currently see play not business our potential for pandemic. actually run We in our But ahead because because we did increased this we the when we've Q the well. of you'll material thought will plan. scenarios churn impact record the with Q continued renewal cetera,

Thank from line you. the with Baird. question next Oliver [Operator Instructions] Our Rob comes of

a run and follow-up. can ahead I that's sales had through that, July, in force environment opportunity then could Tony, bit customers quick follow an from your what meaningful hearing obviously, quarter you confidence what of half. continue and around your it one you're get color and of environment, little sort wanted has as plan the second touch to gives just really particularly on this in if up, renewals A that And to just in the more renewal comments lower been I renewal to for

of for and We're seven chunk really through time already, July months renewals is due far biggest to Rob. the the June by Thanks, us seasonality year effectively frame.

You bit the of deferred right, you because year normally in fiscal see as were that non-profit, cetera, and QX the that renewal the the balances, surge into that of lot schools buying in are patterns significantly higher timing. receivable see year-ends well. accounts throughout et a Those just A balances than there.

And gross knowing of through budget that dollar good of a July of are stickier so products originally impacts both being and and ahead our are than indication we is that renewals net really inclusive pandemic. the thought the even

I think a in talked last call about bit. we

now, I of think modern in higher the proving the appreciating to other stacks, schools ed technology market and K-XX is and importance more it's cloud-based private invaluable places. and

we in I The good in to really think slightly nothing these So year, to increased we of economic say, will seen Yes, scenarios. out bad the is hard of the financials, expected increased debt indication advantage with in times, but it's terms. payment bad to what of which incremental in feel our that's expected huge extended a you'll of really be of original in quarter wanting increased, debt? we folks we line some some take the have defaults, not anticipation that about see We've it. rest accrual

financing developed also offering. options some we're with We third-parties

volumes we renewal trends and all across longevity. been the feel customers have with can stuff So good to those. we're help where to about front. far on And seeing I'd what doing of a thus their of for the pretty really we're ensure try lot pleased

add to little to a just Mike, it's Rob, Hey, that.

is, renewals, predominantly systems So other not really are point in reiterate is which year, budget And and one is record peak our they're news. solutions, July mention and the the of than thing just the to the higher original of higher is the good systems in are or the renewals QX I'll our beginning discretionary.

that operations so the makes our customers. core them of quite And to important

seeing we're some results there. So, good

my actually was on that. touching follow-up And

stuff So to you question Tom the spoken customers, area been guys we've K-XX, coming and very these of, time with really follow where back learning some that interaction with your to spoken we've Classroom is an in the sticky and particularly Roderick's process of on are us is what's with and as and remote coming some malware keeps guys as attack, absolutely Google of dominate, up your to important. on essential our with particularly that up

very be it Should wondering, your dual I as much. the just your happened structure at us. this colo a And off read running have if, I recall been lot facilities Thank and of platform could I'm believe what and likely posting open this infrastructure as guys of, hey, it obviously, serve sounds but this you multi-tenant in that's your that. a essential SaaS about this, press in well customers of cost colo, I your to as in on guys a kind accelerate around from one attack, seem and the to colo? as you to it would service So would these customers we're is, time can't of move if to since or that your this are hearing your customers

been to right, and pushing move, emphasis pick put it's complex, the changed and Yeah, of higher anyway a not up some that new. infrastructure older we've we're on pretty to hard going just it's that, it's but

to engineering that. an an that platform customers, regard. it's So will migrate operations got AWS on Amazon, a effort, It's partnership just their Microsoft continue not but and with we in on good important we've with effort Azure and

So of big ours still sure. focus a for

you. Thank

Yeah.

You bet.

you. Thank

the James. of Our line next comes Brian Peterson your Please question with with proceed question. from Raymond

Thanks question. for gentlemen. taking Hi, the

some on some on the on remarks what products or products prepared end forward? the I'm next kind markets looks of to that are? going the of what markets help you about like as a here, had focusing and but long-term any and value. comment portfolio, consolidate of there several if years effort those in And was the pipeline was there product think I think Hope maybe us not the highest So paraphrasing incorrectly, that

for with if I've the Brian. Many of the standpoint, serve just situation you're that operating. the were we ones renewal as their are on-premise from our Blackbaud products all Sure, with, system are as driving It's of that familiar so They resilient customers up much can. record. had happened mentioned, that quite that as time. a pandemic weren't, core What's entire we are had customers and hard vertical this a of we systems markets is they those

need the cloud is a which been so really has for And solutions highlighted, positive.

think for we Blackbaud. serve, markets our I and for

that's So positive. really

it's familiar with. So products you're core the that

part sun-setting your have question, we the second aggressively over of pretty Your years. been solutions

As years. know, think, in the completed, XX last we've you I five

product move announced to do continue everydayhero, customers over a can called that. We those We to under got that's way. we've JustGiving

that from to to some platforms. continue small all it engineering part our a move helps modern our standpoint, to a financial too do the the older smaller, of go-forward customers teams do of on more but It's in focus the business we so And platforms. solutions

would So, operations been as that for now. doing we've of of normal years that just think I course

you able terms lot on could health I and of Understood. with and in bookings look see I new renewals a like be color And you'd you to maybe a logos. I parse out how the customers net different have bookings of offerings. curious just if guys versus existing guess expansion lot obviously with things that. guess, gave the of I'm the of business

given curious a harder base, Is may of be current that sell are from into pandemic, you're new just logos the maybe what's out? able the kind what to I'm playing might but You be to perspective. get. seeing on bookings more

talked some logos, existing closed surprise. deals bookings, but deals building we we quarter there about, customers those the in break separately is the nice we Brian, don't out as both as pipeline in we is which on the really you But yeah, some closed pressure Yeah, also new in quarter. know, and no

are our It's our is challenge, different some that. Right. in planned about than but markets a our which not of happy place current, pretty originally numbers others. we're So, a at

So vertical type market. it of depends the on

bit are quite well, some institution. doing are struggling fine and Some the surviving based a type on little more of

of are to deals related revenue not kind own build and to both it's and our the build So the to continuing mixed story up planned, holding pipeline. some closing But and continuing the bookings. that throughout quarter originally we're to the the pipeline recurring but nice levels

line comes D.A. question from of next Jaluria Our the with Davidson. Rishi

not up and do it you, or say saving cost your think year at of investments future right how in of you next got bit we face the a implementing philosophically, and the don't let's about to And though, that how sense. pandemic start out and about, the heading that? follow-up. maybe ton increasing dialing I time in measures makes you're a having that the words, then of show back think When I've other of Why the new investments pandemic, snapping not the little I bookings, on of back of comes avoid potential hiring drag as suppose, kind kind increasing as do the look, a

This is Mike.

swings, will. if going it's look of you wild second representative look you future. a at results, our have in to the quarter if So not to going like what We're we're

We are hiring we in sales as speak.

last where toward an year we open positions with mostly eye and in bookings needed, XXXX back-filling half So in are the the of revenue. bookings

we're get sense had going of a unfortunately started of reduction in to sales now. the of headcounts beginning end workforce beginning but right the the a hiring to backfilling kind quarter, beginning where of with We quarter, the in the we we're in So of small freeze up. a pandemic the

the a And on to still of focused you right, going sort some because, look model in what have we they on, we're caution our you've uncertain. I'd example that seen like. of of are uncertainty is we're a So markets, QX in representative

given we're forward bookings I QX like but look going some with going uncertain. mix, a a it's markets lot think to the to and in related uncertainty are So revenue

factors there's, I margin XXX line. wanted gross but kind ask Tony, basis and looks points down in you year-over-year. how of it was of then, it's going like to about there? and still general, be should not, think then what that going or And line should tell components mix what's we the obviously, maybe other forward? recurring we, it us about shift aware on Any moving about Can Thanks. know

EBIT. the fairly year increased We and of some bad about XX% how actions made look had non-GAAP we quickly pivoted resiliency and comfortable running margin I we to the through debt. a to Rishi, the just XX.X% these ahead, as seen quickly pretty business the think that's charges our us were and for structure, very guide at on we cap comments Mike's investments aggressive feel Yes, you've in to the inclusive we with more overall drive

that's support margin end One portfolio in inclusive side of seeing on and of consolidating. plus you're the a the earlier that discussion million is the this morning charge things products on in $X back the for gross there that had to we shrink

support to continue up some charge We do to and goods that, we on million doing we've that of cost related years, for $X been products. over end took little in of a

on within of pandemic third-party what and gross look of to of incremental to and software, for there there's to what Mike's margins some then got normal things And we've a will that the move bit. near-term increased that of biggest pressure like the and QX And with will normal I so discussion, lot uncertainty trying was along QX The cloud. other this will in giving capitalized comments driver put prior costs continue the those the that's a amortization when end. think

what at this focus to the top And additional EBIT we point feel margins see these free on that could non-GAAP and comfortable if We of cost so plus even really we flows. a profitability some actions downturn so bit we're do at we've on the revenue and not look cash side. comfortable kind line more taken XX% will on

million think the again, I good delta on good is the to took. gross So charge larger that be seeing feel decline model you're taken isolated that we But margin $X on the on of we've We sure, plus this, term. really all question longer your make about in the could shape. actions to

Our next with question comes of the from VanVliet Matt BTIG. line

the focused topics different that lot being seeing started platform obviously, customers And anywhere, you've and you're verticals corporate from in social that over on matching Social whether a also hot elements Responsibility means of that perspective what things the large that companies other in investments at uptick look nature? couple one the where, Corporate of sort both with CSR as type a are a movement well lot YourCause an enabling supporting now of of they work-from-home there now, the employee the sort supporting you're but in to of or what you've of interest of a been wanted and guess, right as market, Curious offering made years. investments are past experience couple I the peer-to-peer demand from other corporate people's and and lives. to engage has with,

Sure, Matt, and a it's There Mike. XX Yeah, it's old workforce it's to in platform in, and the platform. an sizes them do is including modern super market all toward of interested great that's gifts. is having a YourCause expanding space giving companies their and interest, now matching fantastic months lots going and and volunteering of be moving well, to help are it's a acquisition that,

growing great that has it's really a for us. of a is nicely, interests, There's lot acquisition So well. gone business fit

So excited interest bookings platform and great. the we're months in on XX the YourCause really we're and of the and win rates doing level there,

Great. up. some more And of for investing back talked on to well, around be that a kids but virtual, with seeing of the product just Maybe lot being as team, uncertainty there. about set pipeline of, bookings will to to certainly a How and that a have in back in for that's obviously, then overall new expensive more about What's fundraising? sort up been wrap-around Some unknowns have been you beyond solution lot out of a have look terms a going management opening vertical higher having impacted, of on that, fundraising? around student had what like? following fully both Are education that a in-class there you be given interest relatively has gone sort vertical development talk build more you've campus?

new had that right. products new there us, institutions what's on brought that There we've have we've is students our to interesting not ed support several vertical for they But solutions Yeah, market market -- a years or for the team about it's higher Sure. now, campus a virtual. is whether some

platforms ed them. And is important in institutions, the think our both environments. foundation support fundraising, more So becoming for even for higher I

focus is new we designed, higher the it of and year So customers in part fundraising on in And in early last now, higher there's fairly smaller big how institution education focused that's it's market last that brought still on all, types was to have start just in a platform year, recently selling platform. days and specific the to we institutions. keep ed university not last foundations specific is The we live, market.

we're so, new. still our And with to fairly input it's And customers. it's add early days, adopter from continuing because capabilities early

ed for side there. on this well is the I positioned to side and market foundation we're of the From more institutions believe important little thinking up, fundraising higher big really spring did a us and mixed, for even how personally be that wrap in up or it's wrap going it's quite busy bookings that if then and not or trying a about, the are to standpoint, they're semester bit a they the opening fall. universities and So

a again, need our marketplace We along show a of a that, they're same not, are days with K-XX the students keep and they our impact campus And cloud right, or can, of other decisions remote part related and that week, or have to kind lot can so operations the them revenue, they they couple students our way. doesn't open up that how but be because monitoring of staggered. going they on sort customers days, of solutions, are to making mixed, the

Thank you.

proceed Evercore question next Please Our line your from ISI. question. comes of with the with Kirk Materne

maybe Yeah, do talking that technologies different frame One, and more on you when the because conditions. list thanks spend a have you bit for a I'm is very and follow-up like the that. basis. general little maybe outside I guess just it's these priority of how I to Tony. security, much. the schools Mike, wondering, all then do, things just of a curious remote the you're Mike given down macroeconomic reprioritization a assume it of do maybe on just feel you pushed of for the days, what budget? customers is getting kind budget I like in learnings, scrutiny to Or vertical-by-vertical underserves was you're

Yeah, learning. it's are remote vertical, solutions talking needing schools yeah, the by but for about cloud we everyone's different specifically,

we are classroom use, use attendance building when solutions is our The solutions solutions. same use and that platforms. virtual Blackbaud flip the the to for only is, they those or the run platform to kids core and they were which tuition For the for Zoom, the they Google to the are parents to But that same scheduling are school, we're all video component kids integrated home, the the difference and and management they because K-XX in already the solutions schools, management needed platforms they using integrated and example, is mobile the the all when platform. learning

So that we the like events thousands mentioned, of is talking we because of stories non-profits, is webinars they all our had they they verticals some and with customers I basically showed came them a story of are support put quite the had cloud lot same happened And with both, virtual our when and Blackbaud for solutions the as We for remote events for platform all the a for and a webinars run really verticals, thing cool without that quickly about non-profit the three-part went for customers. went virtual of missing and us a beat. all virtual together and remote success in to we the webinar we time the our when thousands were and called Blackbaud schools customers, to how use solutions events. events, physical resilient reacted

they we for were it goes other and capabilities And institutions by for like tested on. in asked customers us membership vertical museums week or and thing into discovered asking it is needed, production. new we for and in two, and The gatherings, these small for group happened on faith-based it, on things changes a capabilities what put to we every quickly and to came that built case and

and really of our, They remote folks, other virtual. the or our or constituents run quickly all our the, engineering go our to standpoint an the our put of solutions end, capabilities go cloud both, virtually, are or facilitated change into in showing up to vendors, because they didn't not. them, but because from new have students we've customers do solutions, and look all whether in we the again, help operations at So are can to solutions

budget And gaining you under whole of is pressure, then in put you that about words is thinking to sort fair coming just budget feel of not it? of like to, are your guess but a even though I share way do mouth, as the the maybe a

I mean, There's budget record. solutions wise no, we provide of the system are

revenue solution our customers not for have right? it's it's and that driving a it's So the for fundraising, performing on or court the a to our discretionary, for solution run have system compete from education arts, we management, ours like side. revenue It's end with, institution someone solutions so they core that runs their and and the like that church operation

when is to the sales maybe term. sort opportunities mean, are to of on and the the we think picked the about are anything front anecdotally marketing estate level right of a this here but at learnings the, maybe being about least then permanent model, our about last growth on up sort more terms operating virtually? long you you performance some just between right the I create the front of in driving guess think and balance know higher the I more you of could in doing you of of maybe How real guys quarter, thinking think I now? leverage bit some on there the six that are months line, little these Tony, I over do leverage And know you've in of bottom How things one-time nature. over trying

for We have of opportunities of some across time. lot on the a working of period those been business we've some still that,

marketing. productivity to this be and the improvement year that to comp still to in spoke and we the disruptive up to not very and lot of sales, but things all show hope saw those three time year start within efforts spent plans to over then were really front. We're reorganizing we hit we really sales on real a the that want be us. pandemic going last years was We've the where changing productivity and improve Mike Now that

to the of year rebound we I to as on the big coming out very margins, flow couple option be XXXX. into or said which the the of that There as those little that, We then we the well us piece out opportunity as difficulties key with years going a we're front There's And versus front the over think cash would the XX% revenue drivers which think redundant So is deal be there's big few focus. facility going the our ago would to lot great to at several today's a is, that gives leasing plus bode purchasing going the profitability gives think a that's to structure. XX% opportunities, this, think cost margins, we in next will EBIT The a workforce, can efforts be start We may building, third-party other call big especially a of later optimization continue improve rates, to of pandemic, plateaus. our flexibility plus and cap and still interest a will there's dividends next costs even profitability us get years that low think years. we within that in non-GAAP do EBITDA have the pay big cloud on we started amortization whenever forward. which I of to opportunity well. ultimately earlier are headquarters of coming comfort, over revenues middle as our with software that opportunities lot that a more

we and profitability some can were years we a made just So we sustain marketing, at XX% ago , these heightened of really I heightened a level, previously EBIT. investments and of couple running we before non-GAAP in that feel good sales XX%

we that's So we from have upside there do long clear the believe and term. on that we can that

Our of the Benchmark. line with next Mark Schappel from comes question

you for could offering that options? needs a options those Just you, some you the pricing if your you're pricing remarks, was little in changing wondering suit more just one mentioned of detail I bit into customers. new question, prepared Mike to on go

makes us. vertical have bundles market. Yeah, sense at What's what look we more financing We when different at we do by It's sizes. of new just and though different look often options. us for new nothing that is, for we customers

quite , received some third-parties we with to partied in some help connected So this customers solutions our customers. to create has and our sales finance our teams and ways been new financing helpful options our by of some well we which with because quite pandemic

Our Ryan with question comes line Company. next MacDonald of the from & Needham

mentioned survey, that's to you faith-based to translating into giving solution had the the greater funds the and to during then that number digital and communities particularly period. this remarks ability faith-based this able start for in community regards a about know saw through go bookings rough that an in a transformation Mike, I'd to undergo increased to time same have or at were kind prepared even sort of projects, how time. of amount and that like sufficient this

Yeah, sure.

market one there's a for a there's prop The change to and institutions. and consolidating in brought well the fall dozen good continue in live go a do doesn't church faith-based there ROI, to of to last space and continue and We while so we platform pandemic in we the that and When a a with the or them. that value go really they're now have footprint during their side really had in a we these reporting systems they we've operations, sign so fundraising simplification for live better customers. there's management for with customers us,

more production that meaning platform, continue a we new because drive high it's can put very high capabilities into We and to velocity in more in platform capabilities a frequency.

many the groups is user ever keep getting and with live And so just we're we customers, customers, feedback system from the improving.

and we success market our Blackbaud excited very bullish drive about to so the this and remain And in this customers space. for and ability for

update the give an a follow-up for RPO which and Excellent. can Tony, was quick us what during on that, percent was And of you quarter you just the perhaps current?

me. handy to not with can we Ryan. It's back have something to Yeah. with -- on one, circle back have I'll that I'm sort you of sorry,

Thanks a No lot. worries.

for Gianoni Ladies Thank question-and-answer session. Mr. comments. turn concludes this our floor the to final and you. any I'll back gentlemen,

saying a I'll standard of during pretty uncertain times. close operator. employees for serving Thank at these our you, their proud customers dedication our and I'm just high incredibly very by

ourselves and of best partner customers for continue on leader all market some success. driving our and forward a the in our long-term believe strategy, we're value Thanks, progress shareholders. look positioning everyone. our The updating pandemic our created for as status committed us on is as earnings this to elevating interesting balanced us showcase further the and long-term Tony and I next We to our has for the for through challenges to you call. I

you. concludes This today's Thank conference.

Thank you for You time. may your disconnect participation. lines at your this