Blackbaud (BLKB) 1 May 212021 Q1 Earnings call transcript

Good day, and welcome to Blackbaud's Q1 2021 Earnings Call. Today's conference is being recorded. I'll now turn the conference over to Steve Hufford. Please go ahead, sir.

Good morning, everyone. on Quarter us Earnings joining for Blackbaud's XXXX First Call. Thanks

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

a and our XXth attend also our Conference. available Relations Conference Technology quarter, March, session during Technology Annual Stifel attending mention if Conference, full Needham the event get call our Cross-Sector team Investor & Mike, chance second XXXX Services Baird's will the Consumer Insight be you virtually Global please recording I'll to turn on and the the website. in that the are the I Before investor of presentation didn't over note that to virtual a

and that, investor posted be turn With Mike. call BTIG. the during will also Benchmark the virtual you, participating quarter in I'll We to meetings Company by The over

thank Thanks, Steve. call everyone, joining Good our morning, today. you for and

Following posted and to the for and being our around our we coming and XXXX, results our years. COVID customers finish a for solid quarter, made first continues company. build The the vaccines quarters optimism distribute strong market, to is encouraging to our progress financial

quarter and first with strong combined improving had well ahead. successful performance, environment, us Our the positioned for year macro a

call the which detail financial our scenarios fact, Tony QX we looking more laid our cover upside suggests likely, will in earnings latest In are outlook more out in shortly.

Before March. team in would I speak highlights our thank the were to the I entire executive I virtual appreciated say when I engagement the know investor from we who share those dialogue and few of a I are you the for quarter, to community. attend with like session investment

If from chance a had clear there watch to it, X you the haven't event. were takeaways

resilient Blackbaud a a First, leader large, and market. global is growing in

internal product more X-year doubled acquisitions, and market of billion, Our builds and market over TAM $XX current than Blackbaud is in that steady growth. my tenure has through adjustable

the acquisitions. drive no There's our grow second total our of expand room question doubling we future make Over plenty organic resulted brings time to strategic organically Which us nearly me has ability takeaway. frame, both to the acquisitions revenue. with same and growth have in and and to

once return programs accelerate to well includes will the have to growth. underway revenue normalcy. which the tied several macro-level and already as quickly This pandemic, abate to returns world with We levers multiple which as drivers

have reacceleration. higher into We degree growth a confidence of our increasing visibility in

over are do expansion, several we we're not through strategic focused expansion delivering and only will growth margin next and and scalability The on driving initiatives a customers several growth, margin third unique our to takeaway for innovating company is scale our industry. ahead. years. gain one-of-a-kind rapidly is the revenue as opportunity drive our but digital with well are a within Blackbaud the market capture truly shift leader positioned we a accelerated fourth, And

first the provide in context a the X-point updates growth strategy. I'll our quarter, to of few Turning

we in reminder, and the while and strategy initiatives. talent. advantage big a X we on focused new it's look specific a time, isn't for It's elevate retain to attract This As our top DNA a something us. a is to employees, recently that's unchanged, modified strategy culture and long points ESG as for been our

pandemic employees, to this the find released which evident communities. Report, our last unique for company in was and Social the and XXXX our customers You'll our Responsibility responded week, created challenges how demonstrates

in We also and expanded Board note the reporting this To many Sustainability the a of our and Global with our this incredibly of I'll as leader align one Initiative. comprised that employees XX% disclosures year's Reporting I'm Standards industry. ESG report to report, female highlight us include is reasons positions employees, proud of voluntary which XX% company Accounting male

expands the brings Diversity Chamber proud which measured efficiency our performance, Charleston company a drive by effectiveness community. workplace to and This with diverse revised world-class as award the sales equitable Diversity operations. lead is a tremendous Also, to honors with award strategy, our by of diversity Metro to to and a and inclusive inspirations of to levels in Most Powerful improve employees fully our is headquarters Marketing This committed of is in previous of create honoring for DiversityFirst champions Council. to creating awarded near female the our That Champion XX. XX industry upon a me overall recently and in organization. Charleston, was LaCour, more improving and have diverse, Rule Top operating to in technology and the who been all another become one committed by are named have at Women National many their in to of as which leaders the We who Catherine company the continuing living Chief well strategies teams the inclusive Commerce, Recently, our environment Officer, we're communities. Technology include point as

We And at talent who we strategy. are all executing have every the tremendous these level on company executive a strong our with goals aligned on leaders, delivering have our and team incredible well. as mission across

just Our people strategy about the continue to opportunity forward, is delight in customers of we reason innovative to to I'm solutions. as drive one a front business excited next which the us cloud are segue our with good

enhancements and were changing to our As our we've scale operate said, needs support expedite carried we digitally. customers' momentum and XXXX. as to support they XXXX required that to We've to unprecedented speed into quick product reprioritize customers, scramble

new Microsoft of time. freedom This and is of advanced using powerful trusted with access generation Grantmaking systems with just for solution provides Blackbaud the big cloud. a to the in in success. overall authentication month's them a growing University, to SKY for University, and upgraded or we cloud-based Blackbaud their grantmakers of institutions tools of example, flexibility allow needs. accelerating data younger higher Blackbaud improves deal example, the their Virginia University a CRM market's our that security easy multifactor veteran the enables move need X providing Azure. mobile grants anywhere critical version be to virtually alleviate emerging For Baylor all for and for IT UX In grants data our a Saskatchewan, Houston, University philanthropic technology via grantmaking COVID-XX University advancement of to and burden, any to in Carolina Louisville, more and education, of role to been support Institutions, for customers, continue Clemson community, convenient gone will technology Blackbaud pandemic, to for customers of and CRM the number With collaboration, Foundation in selected a on have accelerating on including browser South device. recently grantmakers management any University West our crucial access University it live plays has

institutions customers that fact, go we're non-Blackbaud couple could money innovative raise third-party just I'll XX within a able but that, revenue that markets growth rate, percentage to and into our a in addressable unchanged solutions. combination of very CRM compared With a turn This increase of are were is a examples to strategy expand strategy we partnering market by With delighting executing for to recent organic institutions. funds expanding at been more and In we've raised markets. near-adjacent total been a strategy on, a have how through CRM of successful using existing Blackbaud to I study our cloud these has double-digit with our and faster point a of our and M&A, acquiring, history growth. building found years. proven

seen the an and available build momentum where to platform, with XXX% and on in in optionality I'm M&A, increase particularly Marketplace, we've Blackbaud Marketplace. continue our we're created excited as well. partner evaluate seeing through for the the about to additional SKY We we've innovation apps over opportunities

summarize of out saying I their Blackbaud ahead X solutions of have application. with In opportunity to customers the I'll extended by X the be about fact, bullish us. continue SKY

Our continues, which market expected rollout include more to software the resiliency. vaccine planning investments. recovery, dollars post-pandemic shown budget its for organizations are is And as has for

opportunity for a anticipating of to our planning, in to and open year, turn next before acceleration sight over Blackbaud the to we the of have few areas and to years. customer spend key the extend what's the Tony? that years. set capture next on we organizations in solid security we conducted like I'll annual the to us I'm firm, up opportunity. even and substantial in Q&A. Rule an found digital recently engineering, a we a of in As performance positioned With investments help increasingly leadership during start as the over position. and in had they And Tony study accelerating were the several Overall, it ahead the growth with we our part of to pandemic, financial XX. our optimistic of software this third-party well call look market XXXX context a increase about We're over come that, is marketing, meaningful drive their success

for the outlook our for I'll year Thanks, cover Mike, morning, current line your up for everyone. before and the full good questions. QX and our results Today, opening

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

our We continue to witness resiliency in markets.

online quarter to payments, First of continued largely strength last QX despite compare on an by the grew primarily in revenue driven the which year, basis pre-pandemic. was particularly This tough U.K. X% in recurring organic was roughly

favorable a incurred also quarter. foreign impact for currency We the

revenue healthy, tracking recurring year-to-date contractual XXXX at XX%, with with in performance. remains line holding customer and renewals retention Our

at services the through Onetime expected, which 'XX. began we that term. $X start and other We will pressure first on and of a and growth in near our the as came contractual XXX progress the revenue a point this abate pipeline quarter, That revenue into in in seeing in shortfalls ahead are growth. optimistic solid plan of As said, XXXX, approximately we're was performance a the basis QX. we're declined pandemic bookings the healthy pressure had recurring which revenue drag total bookings million, heading QX on putting

As has through XXXX, CAGR session, noted other drag our a revenue of overall the term. from X-year XX%, we XXXX a but with decreased in positive onetime services long growth, investor and March has on negative which been material for

bottom 'XX, drag this couple on a of to growth expect revenue We lift of should which the total a in future. points in result in

Turning back 'XX. to

year, based we're unlikely. our As to is upside see the very scenario downside best year the start thus, we Mike the gaining could solid upon estimate to confidence mentioned, that looking for our and

to giving, coupled create pent-up increased of growth online low ahead, to as achieve macro-level drivers, mid-single-digit XXXX. early Looking us demand with opportunities revenue for and as level

Moving to earnings.

of quarter per was earnings sales marketing. diluted million, margin go-forward generated strategy representing of share margin substantially of adjusted go-to-market cost adjusted EBITDA in with XX.X%. base reduced evolution and a XX.X% our of $XX $X.XX. We gross digital-first EBITDA has mindset Our The and first an our

performance acquisition solid of to our and customer sales to quarter and committed remain costs, CAC bookings velocity. first ability The we was our increasing period payback indicator further drive improving a reducing while

service providers. We are success of like continued to make and continuing infrastructure customer business marketing, shift also to digital areas our third-party engineering, the security, related cloud to critical in cloud investments

of Our That as of XX% estimate to to year thus, 'XX. the and investment cash sheet. our calls the for our coming quarters, flow plans increase current and level EBITDA the margins balance best in adjusted the me brings for estimate statement roughly holds full

$XXX a flow million, million have of I'll flow net remind cash free $XX year-over-year been you, free be to increase more plans first QX cash the debt. prior and X.X%. historically, in net an with the in switching a Our $XX.X quarter representing margin equity-based. quarter of we million of compensation We our up borrower ended typically to was

of ratio we targeted we is quarter, debt-to-EBITDA and a our X.Xx, optimal had for of for borrowing $XX current end million than shares calls XXX,XXX first and the at authorization. as March ratio, stock $XXX leverage our less X.Xx. QX, million the of strategy of capital Our common we XX, we under had In million. capacity. And of which at approximately repurchased our available share $XXX repurchase And remaining stood approximately

As our also market. opportunistically that we plan by share undervalued to to Future look share be used we are the on repurchases company when compensation dilution to related execute the forward, determine equity estimates could internal repurchases offset programs. our shares

durability start X from cash year our our to recent our To to by the equity. revenue a our of plans streams. years for shift reminder, our a company the related roughly of decision As we're perspective, the revenue dilution and repurchases solid from share offset outlook encouraged to XXXX, recurring summarize bonus to

said provide difficult perspective for put we've our level to and we challenge duration revenue of the to magnitude for pandemic in of QX on on continues the laid estimates and variability obvious the out our heightened on In definitive want I to XXXX to we've particular, current it the previously, our be scenarios impact the done out the ranges past. and transactional in predict As call. like guidance But do ultimate best us the accurately revenues. makes

see will Our decline and latest pickup likely. half quick scenarios bodes best additional to in our QX a bookings encouraged and modeling which progress tied the This are rollout, services foreign looking exchange flow. gives rates, events. the million $XX confidence to an is cash of The our the revenue with see year, million and $XX to to reduces the in onetime and suggests inclusive estimate upside anticipated expect in our us second bookings for the acceleration more we revenue recovery year, business, expected a our post-pandemic. to in is the is well core that trends performance, After in solid up to seeing in-person in and in vaccine we're modestly the recurring of revenue. Shifting transactional other significantly start XXXX, grow optimistic we're profitability to revenue, set of which for downside we're scenario. revenue with favorable a combined Contractual an likelihood growth of

sales cloud to the We service reduce as associated in The to significantly not we're generate our the future payback savings increasing the reduce and forward. providers, period approximately velocity. for COLO progress expense sales, of like initiatives continue gross to of migration our own levels. making which we work infrastructure costs expect our duplication And footprint improvement to success million in pre-pandemic I will to on our our cloud and return enhancements cost real our to costs. do Also, result going expect customer XXXX third-party in optimize margin will to acquisition annual marketing while footprint $XX customer estate able we're our go-to-market

and this XXXX. of an taken XXXX that likely approximately will in XX%, in for is not margin several cost adjusted actions most repeat inclusive scenario EBITDA Our calls of

term, somewhat near While ability across and to in our remains variable confident various we're revenue costs revenue in profitability ultimately manage scenarios. the

year could estimates we cash be feel confident makes emphasis a in-person our when for and flow free positions generation. million free for it the floor for place to to improve this XXXX. in 'XX, free said, gives in free on to and environment return. us our difficult precise upside future pivot near-term the revenue and us bookings of profitability significantly very rebound bit events heightened bookings $XXX for post-pandemic greater flow is on in vary potential flow confidence transactional cash cash Rule XX how expected variability on to Our The and a With materially depending on cash flow a that

to us efficiently a of will QX shareholders, against and repurchases. the positions which the We identifying additional XXXX. sheet strong rigorous was a for the excess also including well to for for management, calls in to capital year solid continue business, start balance deployment summary, option ensuring executing investments our oversight In levels access strategy, returning and capital adequate business grow the to through acquisitions, share capital including and of

have of performance. pandemic, growth the as We opportunities our And we into us. ahead near-term visibility increasing significant exit see we

of achieving As put confident a the drivers to Rule us proven XX. way value key over our open being path growth strategy, throughout recent XX that, our capital with increasingly have for for and a long to would term. on allocate growth, we we the shareholders expansion that And With repurchase line share I to in we the growth to our program, provides our already the outlined ample session, long-term hit business, expanded questions. which your our newly our initiatives, margin in up with worked are and investor includes and goals. capital Accelerating ability other us on optionality M&A mid- maximizes continued combined like

take first Peterson We Instructions] James. our Brian [Operator question at Raymond will from now

a the And the strong bookings congrats good start to year. and on

double-click you've So we've we've COVID. with the quarter. quarters. last on the the I bookings, know motion. and some an line to about I looks marketing talked with the several been go-to-market. seen digital over T&E decline thing has this It the wanted a But lot kind like interesting of sales success had

to I tackle you're want to those thinking over the that few how understand motion go-to-market the So growth about and ability years. next opportunities

plan, for hey, year with this in And in last year's was acquisition Brian, productivity the on bookings, we've growth leadership good the our Mike. We've QX the morning. good first had and had bit. in the Good increase not quite Yes, capabilities new year's really pandemic. a side, quarter. last digital cost to digital largely quarter question. optimizing platforms our over multiyear a and around quarter it's customer investing and seen and Thanks new we've sure. a in Yes, first effort several improvements

about feel related that. increase where we So going good in of to pretty kind and we're the productivity

driving and is making those balanced on decisions. growth so focus organic we're Our bookings, and

so And well. we far, working think out quite it's

your we of Great. again, the the activity. on a data you first COVID the how think I'm quarter year do of the come just much Good renewals, bookings -- about a see maybe renewal meaningful in obviously, in comments hear. just in kind is year know bookings but how the here, quarter? still and come much on and and that how And I curious we're year or to in as first commentary typical typical in bookings renewals a full point --

Yes. always Brian, it it's builds, for in renewal QX, a bookings of quarter plans a kind end about time year a is lot We middle QX low last And of is standpoint, for last QX, renewals. And of year were so from a beginning a activity. of in call the and about the QX, us. we're spike QX, talked exceeded because QX pandemic, our obviously, the we in, that people worried in frame. renewal that

really And that's And builds. budgeted And serve, start the we renewal, last because activities, and activity biggest we for of low off did really, it every low so this half is the we bookings then the markets again, for QX. QX, QX. year back in just year, year, us, And well. did typically, well

change our from retention So XX%. there. anticipate XX% up to we don't year to just rate, remind you, went And last any

perspective, obviously, from QX so recurring. Rule just just last as the much a From is is being very that's would add, XX. year important a been bookings of I business Brian, And QX of

where not bookings table. pipeline off we that recall, Because and downside renewal us, further about And And right, a of is seasonal us, that was so that scenario and off and indicator, to I the that year. even and when rates, to at last drop take rollout fall that's exceeding going good things why is off the very low transaction and if look on the was spoke fell call, it's that allows volumes that well largely for plan although apart and and exciting still the think, that a the the it we're might off. you assuming -- vaccine

take that table. And downside so case largely start the see a to off us positive allows to

comes Stephens from Ryan question line the next with MacWilliams Your of Inc.

pandemic. follow-up plan a But to each I how to as month ahead about talk just just of seeing bookings know As if can tracked normalcy trended there, you a see overall. improve return they the bookings you're in quarter? during curious the

perspective. Ryan, trend anything that into we're don't a trends being have the we an said, know projected seeing the upward throughout year. of entirety from unusual would I right That the

in the have we're economy with vaccine because anticipating half, the recall, to rollouts recovery second opening get assuming bigger start you the a that the things back and if in to normal we're pandemic, So back up. we'll

we're so And kind end-loaded. back of

in upward for is, per assuming really the and with to pandemic just -- with perspective bookings Same this open half from events the expect everything that opening start up we're the the throughout start other as thing right in year, about more in the transaction kind side. bit plan-wise, as back stick second more we half. well. of things the So a on to second spoken because see was the We've up mass a would be the back half year to hockey se participation

upward, year, budget trends Ryan. up. every January, it from way through that first it the year. From the moves it month, But We

could know still helpful charitable next thoughts maybe a little more early, on color. from any And sense. impact And year the changes tax higher year? policy you Biden's this giving and end I have but look, That of the now standpoint. the bookings in level. at is how into -- this do linearity And appreciate makes a I one it's potential

$XXX was just It's much for XX pretty I the it's all size years. market, And U.S. tracked administration of and in a of billion. back the over U.S., GDP in market. huge the Yes. XXXX, and years changes look just the giving such the at over it

flat we've normalized last and number. goes a such to year's. comes it of economic kind back And stays so roughly 'XX, tough times, 'XX, right And big GDP, then had a when even backward a not it's or point

really And on wouldn't backwards it's and frankly, a hasn't it backwards, we ebbed did go capture tax then again, because per based ever if really big. of so it that such small changes based and so those se. never all concerned big, much that changes. that it's be part on it, so even But gone flowed it's And I

that So the to the feel which the really has pretty about move to us And we positive future. able in shift a digital last of good well, for more been being was as get big also. in year

might X a put year a think, And saw look deduction first And the with were but Mike, not or giving to very Yes. I positive last overall there. some years Act, which your 'XX significantly, you point. like in and see if the they a at year, bounced little of giving. talking the back ago, limitations again that next then we changes on We didn't itemized deductions, we in And to really we made change that. year deductibility, about thought the the in have bit

it implications a is that all it, they're and flow think Those through donating transactions. and what systems, of think tax the frequency. hundred not that I remember, is is or they very of XX% that So billion, motion, number the really most per And digitizing gifts, a sort retail-oriented we're that's care se. don't the about are what's $XXX -- goes that about to something It's right? our high $XX small major few of folks of of that's sort Yes. and -- $XXX It's dollars.

to that the going us. -- well. for that's case it be anticipate concern laws So And been I a change never the here has doesn't as

from of Roderick comes Your Stifel. next the Tom question with line

as you the rest to customers seen what online to Parker acceleration on your the do think in It's Tom. as reopening the to get fundraising that gotten of Lane of Mike and do And saw you we than Or Tony, there be transaction payments a think back revenue, how online levels that nice and expect that about with actually for revenue, higher that as we've balance shift we much as come meaning have you've shift and to is those always for comfortable methods. in you to little year payments pre-pandemic? methods? seen bit end a payments? Do more durability you that's

of year. it's that say took was It's year. that's going and would last last to X%. to to equivalent on doing rest that a going And decades of I went to don't of move a in from device. year see online we digitization that. X last Yes. backwards the are big It all XX% on Consumers things -- those to device. per And industries. year, a used They're to get were sort X% in the it transactions payments used we se. on mobile mobile X/X

that on that common going those sort payments financial here see macro lives And happens. if else so the will, changes because making way. consumer, the a mobile it's same all, behavior same about don't conducting that is because it's device their backwards donations and the We everything of, across digital companies you talk end their personal lives and

our that really so our for well for bodes us. and markets, And customers

to of going events, but had And traditional virtual The back sort that happened to new switched nonprofit they're customers events. as other lot going that's is events keep go going events, virtual our in-person customers they're there's to lot also to thing well. of a in-person of a the the

exclusively So back we the also see a continuing also did the digital in the they which intermittent year, tied payments. virtual those we events of because on well see lot coming in-person second last as events question is your year, to the of but half

constantly feel mentioned deal? end your would need culturally for opportunities M&A new to good any M&A on opportunity. very sort on an technology that know standpoint, expand and Or quickly market the but helpful. That's to today? you signals the you're fits your of you And I greenlight there market, you're there looking like are in Yes. evaluating maybe from do give you a

company accomplish think don't to out. current we I our laid that we've to Yes. buy a have objectives

really always to product approach portfolio at us we're the in opposed gone, to a value add and in a made, made markets, cases, We've integrated portfolio we've portfolio existing as our stickier However, customers. opportunities solution. have of to stand-alone for looking our our to well. lot of a lot as for the also, a acquisitions And

continue do to deal need that. was, Tony need remain mentioned so is we down we to, active. X.Xx in to we outlook. answer quite to to we a our do remarks, And we your no, debt-to-EBITDA think now. is for look opportunities the The ratio But related portfolio at I don't but and think question And prepared our financial our

in So last spot. good the fall. recapitalized a We we're company

to a be in we're proactive as continue to spot pretty So healthy there well.

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

towards and Mike, business with respect more go greater into just that's I you in wondering to caused seeing to you're detail good. continues business your if some to be that what your And positive. your could tone improve, you was

responses So customers seeing Are or are virtual to into upsize meetings marketing campaigns there. for you Maybe to choosing a little go you more detail webinars? do outbound their or deals? could if example, improved just

It's Mark. Yes, Sure. of of combination things. kind a

side, last non last On about good year. quarter we -- a the nonpandemic a QX plan talked that, largely lower higher to bookings quarter, than bookings in sales good year CAC costs,

for platform, We events X On the half the are The that trends on of this events this back there then the that of the One happening customers giving to that to account is and in year. ready jump and the the transaction we those in back JustGiving for seeing on we're get us. executed points is online that have year. see happening the ready be being side, to future could events, that planning see for assigned our year. the positive example positive created of being managers in back activity are we platform for -- half half help them

the these all business year. the a we the systems in rest point outlook that pretty so good things for can toward and of of in And see the

the solutions, Helpful. you Great. Investor And then that around it's with I for on was there mentioned front. know I there's you price if I that but you during early, Day, recall thought update opportunity see price increases wondering any and you solutions even could if thought your meaningful increases. some correctly, still an was some

Yes.

pretty kind really because lot looks activities so of We a good had And off couple some we're catch-up. market Mark. behind have the a of when of there, it what of like, in some couple what the areas. of We -- frankly, a pandemic, competition put a the planned understanding on or looks ago at we're and we like. of is year going this And

So the areas, meet in of happening beneficial is standpoint. of just from of and us a going competitive a we're in what's kind kind to couple market-neutral which marketplace, for

increases that deployed model so is we're And on those. over the years taking to fully built U.K., That actually just revenue. one that's cost market. we're executing them because a JustGiving is that that several and successfully U.S. super in of it customer and And our the one the platform, model as lowers underway on well very we interesting

win-win, move U.S. we're on and like it's definitely in a deployed throwing going it It's successfully So it and to JustGiving, a time. to In been to aren't some it's take some switch. cases, the really is. going necessarily These some

pricing customers coming the think a described there's upside all U.S., of that some But price I benefits takes of big into multiple I run. time. the driven like in structure again one they're And just the think the U.K., initiatives, adoption they're us those. and in by I Some and the not big long increase, it's just changes, across opportunity the there's in and

of Mark, cycles X those you of years long is on think, the some I tail go on end because probably of timing of the And the to longest the those, pricing the on X through the renewal things. --

that contracts, wait have But this, X-year some term. you'll we'll next are to years. of more So and until near renewal immediate several length about the on be talking be point, Mike's But the this if for to up. will folks comes

line comes [Kaji with Bank Aketa] next America. the of of Your from question

but on wanted to in-person a Overall, of maybe -- ask to gradually we a events reduced question sort it gradual normal return little dig to we're prior and bit at events some I in in-person rates. back capacity monetization of this going get have thinking the start events soon, sounds about like here. to about as to

engagement, it However, too. over more with year, like digital the have comfortable people become past seems increasingly

will So in-person component we're normal, return how as some of events, your sort the that hybrid with as gradually about about and be customers returning the you're conversations normal? virtual thinking should of likely having monetization have to to we

be really or of or have events are An our event or of could X- or some runs wide. Yes, sure. be it right, And because one-night different, dinner they're can little bike a thousands walks. customers in-person gala, rides a XX-K

wide is then a systems, category. part really is we events, monetize in-person events So as well and a But platforms our for through of of those payments it. usage

of again, can as this them And that see the see back half mix. a being growing we we year planned. it's in so And

going we and they're big I of did the to back the to gala their right? that have went might And they as And some of digital because and they on, doing events, they're year, so last events, customers have one galas done which how in going keep do before But year. earlier, between some they never might revenue sort learned that. a events, keep have to gala events, multiple the virtual virtual to put that mentioned driving they

institutions kind a The runs the right, but might gotten smart back, also well. in-person, so fully they've really or have might XX-K to about the of events And have go that institutions those those walks, as virtual mix.

And their being increased of on on smart so arsenal sort experienced with generation and virtual. more they've revenue now

for we customers based all we They're in-person positive continuing, virtual mix. see and the the our the see kind And those as year we we continues events. ones for planned, being coming of have well. it's as to So then going back. us think that's a on and and see And

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

expect closed. partial buckets I the verticals kind which then last do kind may upside things biggest that, Church is completely have within potential is what buildout like are program And but potential imagine some a you as upside. guess bigger sales particular help plan look And just big which that were those arts point. doors 'XX, us as things of highlight. industry and maybe out of progressing and of of or one you that the big at be opening, through just and that walk areas -- how year, Management team over at have and capacity, I to relative least across have where of kind kind inflection of museums their cultural your curious like the you

Matt. Sure,

of the sharpest year, will from art and activity. be And this benefit and customers, a haven't performing see tough the you of like comeback So existing went business our payments- our centers, and are to a lot for because been a had last mentioned their going all years, year tied And again, revenue of that dormant have and they had openings we're year. vaccines, usage-based. that in that customers, these and are that cases, folks to customers is

selling those motion their scenarios, open live. They're motion. there's no ready implementation doors. So They're to and

good then So and handle having I our payments. because usage of and sales donations, but all already the you're of your have turn-on an performing art platforms therefore, not a you talked our ticket just tickets donation platform. and in vertical. is if center one sudden you're events events events, instant about, not a that It's And on revenue,

team. on so to got yes, instant, to of sort generating we portfolio a those the for Related a FaceBase, We've sell will us. fastest dedicated going there have returns those now. are and automatic So and be growth

space. really that we're Edge So in doing well Financial our in NXT platform actually

We and the platform. well in build continue out to space, Church Fundraising, that analytics. doing Management

sell built years. the So over a we approach, and do dedicated a it's portfolio up have we've team that

I opportunity opportunity. a payments, kind current lot then it speaking, the to of looked further have 'XX, function? 'XX seems of is know that in generally you in what, we've lot if attach adding of guess, didn't And payments terms a to to following of that have kind rate us, is relative up, of growth enabled just on remind it? but what I Can add an on of like had there that of customers the customers that be the any, Great. previously And area on questions in maybe what

for focus we to entire rate we sales team historically existing out lastly, then Yes, a seen, but shift payments is is attach specifically, which bundles out haven't as of we shift broken folks digital payments. permanent for a I a we've Matt, growing well. driver get-go that But team do the out have existing this don't then rates. And in the cross-selling customers, attach and the break the space, of customers, on think,

the to payments bring us say, doing as I on that Matt, another is to in U.S., would give And going U.K. new this the though, we've competitive been offer we it's advantage the front.

offer. charge rate, present, card don't it's about good one the card simple. a worry present. I think we've and very We not We got

So it we've clean. straightforward made and

not offertory. bit think our customers forced of new for for more lot payments. hopefully one I process that's at give will think the a the volume. they payments of did our lot you midst pandemic which in were last to have that year And digital a online us had like I space, is service was the of other checks still this more us offer and go there, at the beneficial can to platform, of hand to or lot a speak drive of folks a mass, your church in differentiation And cash and necessarily will

thing we've retention And rates have our folks tenure. when And are is it think improves as will said before, products we so or long-standing I those using the they payments, multiple typically have last things when mention services. would

right that's also positive a very obviously. direction, points us. It So for all the in

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

ed the the the there Mike, the having increased as these within on success win you wanted fundraising? higher do been on sort during Blackbaud an need integrated of is is to for around their I driving double-click there? it's the think I with that quarter. to CRM pandemic the What your And platform, up game of that? commentary rates into the -- stress or helping institutions improve universities step financial is guess, Reeher, from Is

to yes, And is. it Yes, Yes. first question. your

and the become that leaders ed, lot the fundraising of presidents, on well. a using involved higher has So more the marketplace personally higher in getting focused that. you in see more more in ed and as And university

in and fantastic fundraising for to like in we've it's call ed, because it's APIs that Blackbaud to related And space our it higher parties use we And It's We've so got versus larger more for large ed years. NXT, standard, a higher for ed solutions higher folks we building runway of that It's space there. capabilities. in platform Edge it's component. a of CRM. lots solid fundraising that becoming for a And and other results more exclusively. institutions what the drive institutions. It's We've success not with there. health it with well, got just care. used the ahead the It's platform general-purpose really the sort us detailed in there. purposely apps and third have frankly, CRM, are We've becoming for lot up for But And capabilities has built in don't folks a major the other lot recently. globally of nonprofits and verticals of of revenue as opened marketplace. Raiser's got platform, partners our a been

be and So platform. in yes. successful that It's well it's a to industry known very platform, well, as that

by, -- focusing next what expansion mix, between away onetime to services the the hosting year? talk or performance these And what mix Tony. to a -- in to And the perhaps margin Great. margin gross on how we about cloud was from of gross wanted -- the shift was should it impact? follow-up Obviously, for the you starting some about over I it of think nice year-over-year. Can migrations from whether a evolution that quarter. kind driven

hit I quarter. drop a this it Yes. that you see parts line negative this with a that to earnings was on release, significantly moving gross The lot can think, others continues services unfortunate thing, Ryan. on put quarter. item. the revenue our there, onetime question, basis pressure of hard and on but Good GAAP in margin us a There's little That

a the having providers' that's cloud a still already of really mix positive had So third-party perspective on performance a said, to -- headway gross this decrease continues move providers made get chunks would environments. unit products' quarter's us we lot expect improvement to it then see of actually pressure wildcard per shrink, from seeing bit and as going margins. That We're a it positive have we a We've good a is it To to old duplicate our helps while question, seeing third-party along put of cost on in costs weighing tech mix. as of to longer-term be move gross cloud are way margins. some And margins. on to the the an we of bit kind get stacks off get that your the to steps some of impact.

be these very with call, thing new cover discussion pricing about on talked accretive initiatives about interesting those should tip investor the we all the earlier think jar that for The States, I at dollar talked to and the structure they moving to to donor each related session that donation profitability our improves and customers on JustGiving, and margin certainly bring really amount in from for positive the the of revenue the side. helps our our payments margins.

really Mike there's changes, just the no be will as competitors, to And with those. cost with par getting incremental other talked that positive. about where know, you pricing that then So comes

profit bottom And the are largely to through all line. dropped so those

margins several would as got part cash we've well gross over improve years the will in works help this expect as things grander flow. operating of the next margins and I strategy So as few that

session, Mr. the of call Gianoni Ladies would to to end like back and the question-and-answer remarks. have and gentlemen, turn I we reached the Mike closing for

more believe likely, operator. based Thanks, uniquely second to just recovery looking lot be as on half the elevate to we're we status market. excited about in start I'll a saying our our have by close I a leader XXXX. positioned A is to and

have first, and recovery We price the our second, investor performance and looking financial continued Thanks, session; which call. returning everyone. catch-up revenue to value. believe transactional that a XX event-driven forward with opportunities generate of We the execution price against comprehensive our look substantial revenue active and we in Looking remain few to growth across areas: post-pandemic; we model initiatives bookings ahead, the third, next will more X update accelerate pandemic at steady long-term M&A levers a that deployment providing span capital multiple our disciplined on and we and with to discussed at accelerate opportunities. at Rule framework to commitment shareholder margin

concludes today's conference. This

at lines you your for time. thank all may this You your participation. disconnect And