Summary
Blackbaud opened 2024 with GAAP revenue of $279.3 million, up 6.7% from $261.8 million in the prior-year quarter. Recurring revenue supplied 97% of the total, and non-GAAP organic recurring revenue increased 7.4%. Social Sector revenue, which represents roughly 88% of the business, grew 8.7%. The Corporate Sector declined 5.6%, and management pinned that on EVERFI and tightening corporate social responsibility budgets, especially in financial services. One-time services and other revenue continued to shrink as the company shifts away from license and implementation work toward cloud subscriptions.
Product news carried the same theme. The company released generative AI capabilities for Raiser's Edge NXT and said Blackbaud Co-pilot will reach customers soon. New optimized donation forms have a few hundred customers live, with nearly a thousand more testing them.
Profitability improved faster than the top line. Gross profit was $153.0 million, up 10.4%, and gross margin rose 1.8 percentage points to 54.8%. Operating income of $10.7 million replaced a loss of $9.9 million in the prior-year quarter, and operating margin rose 7.6 percentage points to 3.8%. Net income was $5.2 million against a loss of $14.7 million a year earlier, and diluted earnings per share was $0.10, up $0.38. Those GAAP figures absorbed $10.3 million of Security Incident-related costs, including roughly $7.0 million for recorded loss contingency liabilities. Excluding that and other adjustments, non-GAAP income from operations was $72.4 million at a 25.9% margin, an increase of 430 basis points, and non-GAAP adjusted EBITDA was $88.9 million, up $17.6 million, at a 31.8% margin, an increase of 460 basis points. Non-GAAP diluted earnings per share was $0.93, up $0.21. The Rule of 40 score was 38.7%.
Cash generation was the strongest part of the release. Net cash provided by operating activities was $64.6 million, up $42.8 million and up 196.3%, even after $2.0 million of Security Incident-related payments. Operating cash flow margin was 23.1%, an increase of 1,480 basis points. Capital expenditures were just $0.3 million, down 80.9%. Non-GAAP free cash flow was $51.3 million, up $44.8 million, and non-GAAP adjusted free cash flow was $53.3 million, up $37.6 million. Blackbaud also repurchased 2,954,211 shares for $262.6 million, about 5.5% of outstanding common stock, and framed that as progress toward its stated goal of repurchasing 7% to 10% in 2024. Roughly $259.7 million remained under the program. The buyback was debt funded, with the carrying amount of debt at $981.7 million and a net leverage ratio of 2.72 to 1.00. The company refinanced into a new $1.5 billion credit facility on April 30, 2024.
Deferred revenue was $367.2 million, flat against $368.0 million a year earlier, and the sequential drop reflects the seasonal lull in customer contract renewals. Management does not expect second quarter operating cash flow to top the first quarter.
Guidance covers the full fiscal year 2024. The company guided to non-GAAP revenue of $1.164 billion to $1.194 billion, a non-GAAP adjusted EBITDA margin of 32.5% to 33.5%, non-GAAP earnings per share of $4.12 to $4.38, and non-GAAP adjusted free cash flow of $254 million to $274 million. Assumptions include a non-GAAP annualized effective tax rate of about 24.5%, interest expense of $48 million to $52 million, fully diluted shares of 52.0 million to 53.0 million, and capital expenditures of $65 million to $75 million. The update reflects the divestiture of EVERFI's nonrecurring creative services business and the recent stock repurchases.
Risks remain real. Gross dollar retention for the twelve months ended March 31, 2024 was approximately 89%, slightly below the full year 2023 level, with EVERFI cited as the drag. Parts of the Security Incident litigation are still unquantified. Blackbaud had recorded roughly $8.5 million in aggregate loss contingency liabilities as of March 31, 2024 and warned that actual losses could be materially higher, with customer claims, class actions and governmental investigations still open. Full-year 2024 Security Incident pre-tax expenses are expected to be $5 million to $10 million with cash outlays of $8 million to $13 million, and those ranges exclude prior settlements and current accruals. The Corporate Sector's reliance on discretionary corporate giving budgets adds another layer of uncertainty.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $279.3M | $295.0M | -5.3% | $261.8M | +6.7% |
| Gross profit | $153.0M | $159.2M | -3.9% | $138.6M | +10.4% |
| Gross margin | 54.8% | 54.0% | +0.9 pp | 53.0% | +1.8 pp |
| Research & development | $42.8M | $38.6M | +10.9% | $40.6M | +5.4% |
| Sales & marketing | $50.9M | $52.1M | -2.4% | $54.4M | -6.5% |
| General & administrative | $47.8M | $35.4M | +35.1% | $52.8M | -9.6% |
| Total operating expenses | $142.3M | $126.9M | +12.2% | $148.6M | -4.2% |
| Operating income (loss) | $10.7M | $32.3M | -66.8% | -$9.9M | +207.8% |
| Operating margin | 3.8% | 10.9% | -7.1 pp | -3.8% | +7.6 pp |
| Net income (loss) | $5.2M | $5.4M | -2.8% | -$14.7M | +135.7% |
| Net margin | 1.9% | 1.8% | +0.0 pp | -5.6% | +7.5 pp |
| Diluted EPS | $0.10 | $0.10 | ±$0.00 | -$0.28 | +$0.38 |
| Customers | 13,000 | 100,000 | -87.0% | — | — |
Risks
The company significantly increased leverage, including March 2024 borrowings to fund the $200 million ASR Transaction. At March 31, 2024, carrying value of debt was $981.7 million and net leverage ratio was 2.72 to 1.00; full year 2024 interest expense is expected to be about $48 million to $52 million. Higher leverage could require dedicating cash flow to debt service and limit operational flexibility.
The 2020 Security Incident continues to drive material legal, regulatory and remediation costs. For the three months ended March 31, 2024, net pre-tax expenses were $10.3 million, including $3.3 million for ongoing legal fees and $7.0 million for loss contingency accruals; insurance coverage was exceeded in first quarter 2022. Pending matters include the FTC Proposed Order, state Attorneys General orders, SEC settlement, class actions and governmental investigations.
The FTC Proposed Order, state Attorneys General Administrative Orders and SEC settlement require implementing and maintaining cybersecurity and data protection programs. Compliance is expected to be expensive and time-consuming over an extended period, and failure could expose the company to additional material liability.
Corporate Sector revenue, about 12% of total revenue, decreased $2.1 million, or 5.6%, in Q1 2024, driven primarily by EVERFI, which faces tightening corporate CSR budgets especially in financial services. The company expects Corporate Sector revenue to decline for full year 2024. Gross dollar retention for the twelve months ended March 31, 2024 was about 89%, slightly lower than full year 2023 primarily due to EVERFI.
The company expects interest expense for full year 2024 to be approximately $48 million to $52 million due to incremental borrowings for the ASR Transaction and expects interest rates to remain higher than originally anticipated. Variable rate debt could increase interest expense in a rising rate environment.
Provisions in organizational documents, officer compensation arrangements and Delaware law may delay, defer, discourage or prevent an acquisition or change of control. The Rights Agreement was terminated on March 18, 2024, but other anti-takeover effects remain and may adversely affect the market price of common stock.
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 Margin
Non-GAAP Free Cash Flow
GAAP Recurring Revenue
Non-GAAP Adjusted EBITDA
Non-GAAP Adjusted Free Cash Flow
Summary, forecast, risks and KPIs are extracted from BLACKBAUD INC's SEC filings for Q1 FY2024 (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.