Summary
Blackbaud's fiscal 2022 first quarter showed top-line growth but a GAAP loss. Total revenue was $257.1 million, up 17.3% from the prior-year quarter. Gross profit was $133.8 million, up 15.5% from the prior-year quarter, while gross margin slipped to 52.0%, down 0.8 percentage points from the prior-year quarter. The company posted an operating loss of $6.0 million, a swing from operating income in the prior-year quarter, and operating margin was -2.3%, down 5.4 percentage points from the prior-year quarter. Net loss widened to $10.4 million from a net loss in the prior-year quarter, and diluted loss per share was $0.20, down $0.20 per share from the prior-year quarter. The quarter's GAAP results reflect rising revenue alongside weaker profitability.
Operating cash flow was $24.5 million, down 18.6% from the prior-year quarter. Capital expenditures were $4.3 million, up 22.9% from the prior-year quarter. Deferred revenue was $355.7 million, up 20.8% from the prior-year quarter. Management said deferred revenue typically hits its seasonal low in the first quarter because customer contract renewals cluster near the start of the third quarter. The company still generated positive operating cash flow, but lower than a year earlier.
On a non-GAAP basis, income from operations was $43.4 million, with a non-GAAP operating margin of 16.9%, down 460 basis points. Non-GAAP net income was $29.5 million and non-GAAP diluted earnings per share was $0.57, down $0.11 per share. Non-GAAP adjusted EBITDA was $57.2 million, unchanged from the prior-year quarter, with a margin of 22.2%, down 120 basis points. Non-GAAP adjusted free cash flow was $8.4 million, down $10.4 million, with a margin of 3.3%, down 530 basis points. Blackbaud reiterated full-year 2022 non-GAAP revenue guidance of $1.075 billion to $1.095 billion, an adjusted EBITDA margin of 24.0% to 24.5%, earnings per share of $2.63 to $2.82, and adjusted free cash flow of $165.0 million to $175.0 million. The company also raised its Rule of 40 performance incentive targets for 2022 and 2023 to 29% and 33%, citing a mid-term goal of roughly 35%.
Operationally, Blackbaud closed the EVERFI acquisition in December 2021 and said the deal doubled its total addressable market to over $20 billion. Non-GAAP organic recurring revenue grew 6.6% in the quarter. The company reported that approximately 92% of customers with recurring revenue contracts were retained for the twelve months ended March 31, 2022. Recent product and partnership moves include adding PayPal and Venmo payment options to Blackbaud Merchant Services and a collaboration with Change for point-of-sale charitable campaigns. Blackbaud also achieved carbon neutrality across its operations and data centers for 2021 and appointed a new Chief Product Officer and Chief Information Security Officer.
The main risks are integration and cost pressure. Security Incident-related costs, net of insurance, were $7.2 million and weighed on GAAP profitability. For full-year 2022, Blackbaud expects net cash outlays of $25 million to $35 million for ongoing legal fees tied to the Security Incident, and it has not recorded a loss contingency as of March 31, 2022 because it cannot reasonably estimate the possible loss. Management also flagged uncertainty from COVID-19 and the continued shift in revenue mix. For the full year 2022, it expects interest expense of approximately $30 million to $33 million and capital expenditures of $60.0 million to $70.0 million, including $45.0 million to $55.0 million of capitalized software development costs. Those items, along with EVERFI integration, will shape whether the company can convert revenue growth into stronger GAAP results.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $257.1M | $247.9M | +3.7% | $219.2M | +17.3% |
| Gross profit | $133.8M | $123.8M | +8.0% | $115.8M | +15.5% |
| Gross margin | 52.0% | 50.0% | +2.1 pp | 52.8% | -0.8 pp |
| Research & development | $40.0M | $33.6M | +18.9% | $29.2M | +36.9% |
| Sales & marketing | $55.2M | $47.4M | +16.6% | $48.8M | +13.2% |
| General & administrative | $43.8M | $48.9M | -10.6% | $30.6M | +43.1% |
| Total operating expenses | $139.7M | $130.5M | +7.1% | $109.2M | +28.0% |
| Operating income (loss) | -$6.0M | -$6.6M | +9.8% | $6.6M | -190.0% |
| Operating margin | -2.3% | -2.7% | +0.3 pp | 3.0% | -5.4 pp |
| Net income (loss) | -$10.4M | -$7.1M | -47.5% | -$164.0K | -6245.7% |
| Net margin | -4.0% | -2.9% | -1.2 pp | -0.1% | -4.0 pp |
| Diluted EPS | -$0.20 | -$0.15 | -$0.05 | $0.00 | -$0.20 |
Risks
The 2020 Security Incident continues to have adverse effects. Blackbaud exceeded its insurance coverage limit in Q1 2022, expects $25 million to $35 million of net cash outlays for full year 2022 legal fees, and has not recorded a loss contingency liability as of March 31, 2022 because the possible loss range is not reasonably estimable.
Blackbaud has received approximately 260 Customer Reimbursement Requests, approximately 400 reservations of recovery rights, and is a defendant in 19 putative consumer class actions (17 U.S. federal consolidated and 2 Canadian) related to the Security Incident, with potential material expenses not covered by insurance.
The company faces a multi-state Civil Investigative Demand from 49 state Attorneys General and the District of Columbia, a separate California Attorney General demand, and investigations by the FTC, HHS, SEC, Australian Information Commissioner, and Canadian Privacy Commissioner. Adverse outcomes could impose penalties, consent decrees, or operational changes.
If Security Incident fines or penalties exceed funds from operations or cause a credit facility default, Blackbaud may need to renegotiate or obtain a waiver under its 2020 Credit Facility and seek additional debt or equity financing; if unable, it may not meet obligations as they come due. Q1 2022 operating cash flow decreased 18.6% to $24.5 million.
SaaS KPIs
All quarters →Non-GAAP Adjusted EBITDA Margin
Non-GAAP Operating Margin
Non-GAAP Organic Recurring Revenue Growth
Rule of 40
Non-GAAP Organic Revenue Growth
Non-GAAP Adjusted Free Cash Flow Margin
Non-GAAP Free Cash Flow
Non-GAAP Adjusted EBITDA
Non-GAAP Adjusted Free Cash Flow
Non-GAAP Gross Margin
Non-GAAP Organic Recurring Revenue
Non-GAAP Organic Revenue Growth (constant currency)
Rule of 40 (constant currency)
Summary, forecast, risks and KPIs are extracted from BLACKBAUD INC's SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.