Blackbaud (BLKB) Q2 2024 earnings summary

Executive summary

• Achieved strong Q2 2024 results with GAAP revenue up 6.0% to $287.3M, driven by recurring revenue growth, pricing initiatives, and margin expansion, supported by a five-point operating plan and innovation focus.

• Social Sector, representing 85–88% of revenue, grew 8.5% year-over-year, with contractual recurring revenue up 9.5% and transactional recurring revenue up 8.2%.

• Corporate Sector, 12–15% of revenue, declined 9.2% year-over-year, mainly due to EverFi, which is under strategic review for potential divestiture.

• Board expanded stock repurchase program to $800 million, targeting up to 10% of outstanding shares in 2024, with 2.95–3 million shares repurchased in H1 2024.

• Net income for Q2 2024 was $21.8M, up from $2.1M in Q2 2023; diluted EPS was $0.42, and non-GAAP EPS was $1.08, up $0.10 per share year-over-year.

Financial highlights

• Q2 2024 total revenue was $287.3M, up 6.0% year-over-year; recurring revenue rose 7.2% to $281.4M, while one-time services revenue declined 31.7%.

• Adjusted EBITDA margin reached 35.7%, up 290 basis points year-over-year; non-GAAP operating margin rose to 30.0%.

• Adjusted free cash flow for Q2 was $36M; H1 2024 operating cash flow was $118.4M, up over 50% year-over-year.

• Rule of 40 for Q2 2024 was 42.4%.

• Gross margin improved to 56.6% in Q2 2024 from 55.2% in Q2 2023.

Outlook and guidance

• 2024 GAAP revenue guidance is $1.164B–$1.194B, with 7.4% organic growth expected; non-GAAP adjusted EBITDA margin guidance is 32.5%–33.5%.

• Full-year guidance reiterated across all metrics, with expectations to be at the low end of revenue and high end of margin due to EverFi.

• Non-GAAP EPS guidance is $4.12–$4.38; adjusted free cash flow guidance is $254M–$274M.

• 2024 guidance includes a one-time step up in cybersecurity investment, impacting margin by ~200bps.

• Modernized contract renewals with three-year terms and annual price escalators expected to sustain revenue growth.