Blackbaud (BLKB) Stifel 2024 Cross Sector Insight Conference summary

Strategic progress and financial performance

• Achieved Rule of 40 status ahead of schedule, now targeting full-year Rule of 40 for the first time in company history in 2024.

• Accelerated operating plan has driven margin expansion and higher organic growth, now in high single digits.

• Focus remains on sustaining growth and margin expansion through 2024 and beyond.

• Corporate Impact group, including EVERFI, faces headwinds due to economic conditions, especially in EdTech and financial sectors.

• Strategic review of underperforming assets like EVERFI may include divestiture if turnaround is not achieved.

Pricing and contract initiatives

• Transitioned from 1-year to 3-year contracts, with annual escalators, improving revenue predictability and retention.

• About 35% of recurring revenue base renewed under new terms in 2023, with further transitions through 2026.

• Pricing changes contribute about half of current growth, with a mix of inflationary and recurring increases.

• Renewal rates and customer retention remain strong despite higher prices, attributed to product value and switching costs.

• Discounts on renewals are lower than planned, supporting margin improvement.

Growth drivers and innovation

• Transactional growth driven by increased adoption of payments, tuition management, and event platforms.

• Viral world events in 2023 boosted transaction volumes, but future predictability remains low.

• New "Complete Cover" tip model in JustGiving increases revenue and margins, rolling out in the U.S. over several years.

• AI capabilities embedded across products enhance customer success, retention, and fundraising effectiveness.

• Continued innovation in core products and expansion into private K-12 and higher education markets.