investor presentation - blackbaudinvestor presentation march 2012. except for historical...

INVESTOR PRESENTATIONMarch 2012

Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements that involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; management of integration of acquired companies and other risks associated with acquisitions; risks associated with successful implementation of multiple integrated software products; the ability to attract and retain key personnel; risks related to our dividend policy and share

FORWARD LOOKING STATEMENT

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ability to attract and retain key personnel; risks related to our dividend policy and share repurchase program, including potential limitations on our ability to grow and the possibility that we might discontinue payment of dividends; risks relating to restrictions imposed by the credit facility; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organization; technological changes that make our products and services less competitive; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from Blackbaud's investor relations department. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

Trademark Usage

This presentation contains trade names, trademarks and service marks of other companies. We do not intend our use or display of other parties’ trade names, trademarks and service marks to imply a relationship with, or endorsement or sponsorship of, these other parties.

BLACKBAUD TODAY:

POWERING THE BUSINESS OF PHILANTHROPY FROM FUNDRAISING TO OUTCOMES

Global company focused on

nonprofit software solutions

Large anddiverse

customerbase

Broad suiteof

applications & solutions

Strongfinancialprofile

3

LeaderLeader>26,000

customers

>60 countries

>26,000customers

>60 countries

• Address all segments– all verticals

– from high-end to low-end

• Address all segments– all verticals

– from high-end to low-end

• 2011– revenue of

$371M, up 14% YOY

– non GAAP OM of 21%

• 2011– revenue of

$371M, up 14% YOY

– non GAAP OM of 21%

W H Y I N V E S T

MARKET LEADER. LONG GROWTH RUNWAY.

Early stages of serving a $16.5B marketTHEOPPORTUNITY

THEOPPORTUNITY

Broadest and deepest product suite designed specifically for nonprofit organizations

THEPOSITIONING

THEPOSITIONING

4

Attractive combination of scale, recurring revenue, growth, profitability and cash flow

THEPERFORMANCE

THEPERFORMANCE

Long growth runway with multiple drivers – enterprise, mid-market back to base, low-end and international

THEGROWTH

THEGROWTH

EARLY STAGES OF SERVING A $16.5B OPPORTUNITY

ENTERPRISEENTERPRISE•• Target: Target: 4,000 orgs4,000 orgs•• Existing: Existing: 1,300 customers1,300 customers

Market Segments

$8B

Addressable Global Market Opportunity

5

LOWLOW--ENDEND

MIDMID--MARKETMARKET•• Target: Target: 86,000 orgs86,000 orgs•• Existing: Existing: 26,000 customers26,000 customers

•• Target: Target: 1.4M orgs1.4M orgs•• Existing: Existing: 4,000+ customers4,000+ customers

$8B

$0.5B

$16.5B

WHY INVEST IN BLACKBAUD?


THEOPPORTUNITY


THEPOSITIONING

THEPOSITIONING

6


THEPERFORMANCE

THEPERFORMANCE


THEGROWTH

THEGROWTH

NONPROFITS HAVE UNIQUE NEEDS REQUIRING TAILORED SOFTWARE AND SERVICES

BlackbaudBlackbaud

• Supporter relationship journey– supporters don’t fit into a sales pipeline,

serve their cause in many ways

Unique needs

7

delivers tailored delivers tailored software and software and

solutionssolutions

• Program mission / delivery– nonprofits don’t deliver “units”,

they provide volunteers, meals, time

• Accounting / back office– fund accounting isn’t

quickbook accounting

BLACKBAUD PROVIDES BROADEST ARRAY OF SOLUTIONS

Internetfundraising

Eventmanagement

Student informationsystems

Ticketingmanagement

Data analysis and reporting tools

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CRM

Financialmanagement

Costaccounting

Online interactivecommunities

Volunteernetworks

Campaignresults tracking

Tailored software and services

Financial data and donor integration

CONVIO EXPANDS OUR PRODUCT OFFERING EVEN FURTHER

• Market leader in CRM capabilities

• Financial strength and scale

• 26,000 customers,

• Leader in online fundraising solutions

• Best-in-class SaaScapabilities

• 1,500 customers

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• 26,000 customers, vertical expertise

• 1,500 customers

• Comprehensive solution to make multi-channel supporter engagement a reality

• Expand our ability to serve online fundraising needs

• Expected to be accretive to non-GAAP EPS in first twelve months following close of acquisition

Tailored solutions for NPO

Modern technology

UNIQUELY POSITIONED IN FRAGMENTED INDUSTRY

Vertical/NicheSungardHorizontal Apps1

�

�

� �X

X X

10

Product breadth/depth

Address all NPO verticals

Focus on Enterprise

Focus on mid-market/low-end

Note 1: Includes CRM, MSFT, ORCL

�

�

X

X

X

X

X

X

X



THEOPPORTUNITY


THEPOSITIONING

THEPOSITIONING

11


THEPERFORMANCE

THEPERFORMANCE


THEGROWTH

THEGROWTH

ATTRACTIVE PERFORMANCE PROFILE

11

+22

+

Consistent long-term revenue growth

Growing recurring revenue stream

12

55

33

+44

+

Powerful cash flow

Diversified revenue streams

Strong profitability

1. CONSISTENT TRACK RECORD OF GROWTH

$300

$400 $37114%CAGR

$M

Revenue

13

$0

$100

$200

2005 2006 2007 2008 2009 2010 2011

Maintenance Subscription Services, license, other

$166

2. FAST GROWING RECURRING REVENUE STREAM

MaintenanceMaintenance34%34%

Mix of Revenue…(2011 breakdown)

Consistent, Solid Growth(recurring revenue)

$234M

20%CAGR

14

LicensesOther

MaintenanceMaintenance

SubscriptionSubscription

Services 31%

5%27%27%

$78M

2005 2006 2007 2008 2009 2010 2011

CAGR

2%

3. DIVERSIFIED REVENUE STREAMS

Revenue byVertical

Revenue byBusiness Unit

40%40%

8%8%

EnterpriseCustomer

InternationalOther

Faith-Based

Healthcare 2%2%Other

21.9%21.9%18.8%18.8%

15

40%40%

49%49%

Customer

General Markets

Faith-Based

HigherEducation

IndependentSchools

Arts &Cultural

Family &Human Services

18%18%19.2%19.2%

9%9%7%7%

6.1%6.1%

4. GROWING OPERATING INCOME, STRONG REBOUND IN 2011

$45.7M

$76.5M

Up 14%in 2011

16

2005 2006 2007 2008 2009 2010 2011

5. RECORD OF USING STRONG CASH FLOW TO ENHANCE SHAREHOLDER VALUE

Cash Flow• 2011 CFFO margin of 23%

17

• $0.48 per share dividend – 2011

• Total repurchases of $88M since 2006

• $50M remains available in share repurchase program

Dividend and sharerepurchase program

Strategicacquisitions

• 9 acquisitions last 5 years, total of $172M(1)

• Add new products and technologies or expand client list

• Enter new markets



THEOPPORTUNITY


THEPOSITIONING

THEPOSITIONING

18


THEPERFORMANCE

THEPERFORMANCE


THEGROWTH

THEGROWTH

GROWING WITH EXISTING AND NEW CUSTOMERS

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• Raiser’s Edge• Education Edge• Financial Edge

OriginalCore Product

• Significant opportunity to leverage Blackbaud unique expertise

• Opportunity to expand to new relationships with smaller orgs with

1. INCREASE PENETRATION OF MID-MARKET

The Opportunity Large Cross-Sell Opportunity

Number of customers 26k26k26k26k

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relationships with smaller orgs with limited non-profit resources

– Low capital, personnel budgets

• GMBU – excellent performance– New offerings, new packaging

and promotions– New offerings grew from $0 in

2009 to $20M in 2011

Number of our products used by most customers 1111

CRM Customer Growth

• Targeting largest 4,000 nonprofits

• Need for multi-channel engagement to increase donations

2. EXPAND IN ENTERPRISE MARKET –TARGETING AN $8B OPPORTUNITY

61

The Opportunity

21

• CRM Suite tailored to multi-site enterprise accounts

– 23 new customer wins in 2011, up 60% over prior record

– Customer references in each major non-profit sector

2006 2007 2008 2009 2010 2011

1

• Total bookings >$100M

• “One” person organizations

• Leverage success made to date, expand Web-based and SaaS offerings to meet unique needs at a cost these organizations can afford

• These organizations have the same need for nonprofit

3. EXPAND IN THE LOW END OF THE MARKET –1.4M ORGANIZATIONS IN US

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• These organizations have the same need for nonprofit expertise as larger orgs, but in a package they can quickly consume and implement

4. GROW INTERNATIONAL BUSINESS –SIGNIFICANT OPPORTUNITY OUTSIDE U.S.

• Currently 4,500 diverse customers in market of 5.5M orgs

• Increasing our focus and resources

Growth in International Revenue ($M)

$54

The Opportunity

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• Increasing our focus and resources through:

– improvements in leadership

– targeted acquisitions (RLC, EDH)

– expanded operations to enable go-to-market strategies

2005 2006 2007 2008 2009 2010 2011

$22

• 14% of total revenue and growing

• Sustainable low to mid-teens organic growth plus selective acquisitions

• Revenues of ~$1B

• Extended leadership in both Enterprise CRM and online funding solutions for nonprofits

• Next generation of mid-market on SaaS platform

BLACKBAUD – WELL POSITIONED FOR THE LONG-TERM

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• Next generation of mid-market on SaaS platform

• Best-in-class operating margins

• Strong free cash flow

W H Y I N V E S T

MARKET LEADER. LONG GROWTH RUNWAY.


THEOPPORTUNITY


THEPOSITIONING

THEPOSITIONING

25


THEPERFORMANCE

THEPERFORMANCE


THEGROWTH

THEGROWTH

investor presentation - blackbaudinvestor presentation march 2012. except for historical...

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