6 unchanged sentences
Our portfolio is tailored to the unique needs of vertical markets, with solutions for fundraising and CRM, marketing, advocacy, peer-to-peer fundraising, corporate social responsibility, school management, ticketing, grantmaking, financial management, payment processing and analytics.
−Removed: Serving the industry for more than three decades, we are headquartered in Charleston, South Carolina, and have operations in the United States, Australia, Canada, Costa Rica and the United Kingdom.
+Added: Serving the industry for nearly four decades, we are headquartered in Charleston, South Carolina, and have operations in the United States, Australia, Canada, Costa Rica and the United Kingdom.
Our revenue is primarily generated from the following sources:
(i) charging for the use of our software solutions in cloud and hosted environments;
−Removed: (ii) providing payment and transaction services;
+Added: (ii) providing payment and other transactional-type services;
(iii) providing software maintenance and support services;
1 unchanged sentence
COVID-19 Impact
−Removed: The outbreak of COVID-19 in numerous countries across the globe, including each country in which we currently operate, has adversely impacted the U.S.
−Removed: and global economies.
−Removed: We began 2020 with strong execution against our financial plan.
−Removed: In March 2020, we began to experience disruptions to our business from COVID-19, and the pandemic continues to impact each of our markets.
−Removed: To better enable us to weather the extraordinary business challenges brought about by the global COVID-19 pandemic, to protect the safety and welfare of our employees, and to further effect our long-term strategy to deliver the greatest value to our stockholders, we have taken several actions.
−Removed: These initial measures taken are expected to provide us the financial flexibility needed to manage a wide array of outcomes that may result from the pandemic.
−Removed: See Note 2 to our condensed consolidated financial statements in this report for a discussion of some of these actions.
−Removed: In addition to the initial actions we have taken to date, we are continuously evaluating further possible actions in order to respond quickly to rapidly changing conditions, if needed.
The economic impact of COVID-19 on the social good industry remains uncertain.
−Removed: With our existing and prospective customers remaining cautious in their purchase decisions, we expect that our operating environment may continue to be challenging for the remainder of 2020, 2021 and potentially beyond, as discussed below.
−Removed: Notwithstanding these conditions, we remain focused on continuing to execute our four-point growth strategy and strengthening our leadership position.
−Removed: Third Quarter 2020 Form 10-Q
−Removed: Blackbaud, Inc.
−Removed: Four-Point Growth Strategy
−Removed: 1 Delight Customers with Innovative Cloud Solutions
−Removed: 2 Drive Sales Effectiveness
+Added: If our existing and prospective customers remain cautious in their purchase decisions, our operating environment may continue to be challenging for the remainder of 2021 and potentially beyond.
+Added: Notwithstanding these conditions, we remain focused on continuing to execute our four-point strategy and strengthening our leadership position.
+Added: As expected and previously disclosed, our bookings shortfalls that began at the start of the pandemic in March 2020 are putting pressure on our contractual recurring revenue growth in the near-term.
+Added: However, we are optimistic this pressure will abate as we progress through 2021.
+Added: We had a solid bookings performance in the first quarter of 2021, which was favorable to our plan and our first quarter 2020 bookings performance.
+Added: Four-Point Strategy
1 Expand Total Addressable Market
−Removed: 4 Improve Operating Efficiency
+Added: 2 Lead with World Class Teams and Operations
3 Delight Customers with Innovative Cloud Solutions
−Removed: Our solutions are already equipped with features that are lending themselves to the current environment and we have quickly acted upon customer feedback to add enhancements and new functionality to serve our customers, so they can continue to focus on their missions during this time.
−Removed: For example, we built new integration between our peer-to-peer fundraising and donor management solutions simplifying the process of raising donations and acquiring new supporters through pandemic-friendly virtual events and peer-to-peer campaigns.
−Removed: We simplified donation forms to expedite fundraising by allowing organizations to create campaigns quickly and easily, which is critical in the current environment.
−Removed: We also added new financial management capabilities, further easing the transition to working from home with tools that support collaboration and efficient cash flow management and financial operations from the cloud.
−Removed: Drive Sales Effectiveness
−Removed: The investments we have made to enhance our digital footprint are enabling us to be more prescriptive and cost-effective in our marketing efforts and to quickly adapt to changing market conditions, and over the longer term we believe the impact of COVID-19 will accelerate the existing trends driving adoption of modern cloud solutions in our market.
−Removed: Despite our optimism over the long-term, the uncertainty of the current environment has created near-term challenges in our ability to build new pipeline and elongated sales cycles, which has caused bookings to fall short of budgeted expectations for the third quarter and year-to-date periods.
−Removed: We expect this shortfall to put pressure on both 2020 and 2021 revenues.
−Removed: As a result, we have begun shifting investment towards digital marketing aimed at lead generation and put a greater emphasis on selling solutions with the highest lifetime value.
−Removed: In response to the COVID-19 pandemic, we implemented a modest and targeted headcount reduction during the second quarter, including a reduction in our sales headcount with a focus on retaining our most highly productive sales executives.
−Removed: While we remain active in the evaluation of opportunities to further expand our addressable market through acquisitions and internal product development, our top priority in the near-term is protecting our employees and continuing to support our customers at a very high standard.
−Removed: We have significant opportunities in front of us as we are less than 10% penetrated into a total addressable market of over $10 billion.
−Removed: Improve Operating Efficiency
−Removed: We have made transformational changes to our business over the last several years, which allowed us to immediately switch to a virtual work environment in March and supported our global employees' ability to work effectively from home.
−Removed: We are re-evaluating elements of our workforce strategy based on what we have learned during the COVID-19 pandemic.
−Removed: During the third quarter of 2020, we adjusted our workforce strategy to provide more flexibility for our employees to work remotely when our offices reopen.
−Removed: This change also expands our access to a larger and more diverse talent pool, empowers our leaders to make decisions based on skills and business need rather than location, and it is expected to create efficiencies within our real estate strategy as we optimize our footprint and shift toward more collaborative workspaces within our offices.
−Removed: We currently expect most of the transactions related to these real estate activities will close during the fourth quarter of 2020 with a one-time cash outlay of between of between $20.0 million and $25.0 million.
−Removed: We incurred approximately $6.8 million of pre-tax costs related to these real estate activities during the third quarter of 2020.
−Removed: Third Quarter 2020 Form 10-Q
+Added: 4 Focus on Employees, Culture and ESG Initiatives
+Added: Expand Total Addressable Market ("TAM")
+Added: We remain active in the evaluation of opportunities to further expand our addressable market through acquisitions and internal product development.
+Added: We have significant opportunities in front of us as we are less than 10% penetrated into a TAM of over $10 billion.
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
+Added: Lead with World Class Teams and Operations
+Added: This strategy expands upon our previous strategies to drive sales effectiveness and improve operating efficiency to include improving overall company performance as measured by the Rule of 40 (see discussion of Non-GAAP Financial Measures below).
+Added: We have a strong executive team that is delivering on our mission and executing on our strategy.
+Added: We have talent across our company, at every level, who are aligned with these goals as well.
+Added: Delight Customers with Innovative Cloud Solutions
+Added: 2020 required unprecedented speed and scale to support our customers, and we were quick to reprioritize and expedite product enhancements to support our customers' changing needs as they needed to operate more digitally.
+Added: We have carried that momentum into 2021.
+Added: For example, we upgraded virtually all of our Blackbaud Grantmaking customers to a new SKY UX version in just one month's time.
+Added: This helps alleviate our customers' IT burden, improves data security with multi-factor authentication and provides freedom and flexibility to access advanced grant management technology anywhere via any browser on any device.
+Added: With more veteran grantmakers using mobile technology and a younger generation of grantmakers emerging in the philanthropic community, providing convenient access to grant data and grant management tools will continue to be critical for success.
+Added: Blackbaud plays a critical role in accelerating our customers' move to the cloud.
+Added: In higher education, with the COVID-19 pandemic accelerating the need for powerful cloud-based systems that allow for easier collaboration, Blackbaud CRM has been the trusted CRM solution for a growing number of institutions to support their overall advancement needs.
+Added: Focus on Employees, Culture and ESG Initiatives
+Added: During the first quarter of 2021, we elevated a specific strategy focused on employees, culture and ESG initiatives.
+Added: This is not new for us.
+Added: It is something that has been in our DNA for a long time and is a big advantage as we look to attract and retain top talent.
+Added: This is evident in our 2020 social responsibility report, which was released in April 2021, and demonstrates how we responded to the unique challenges the pandemic created for our employees, customers, and communities.
+Added: We also expanded this year's report to include voluntary ESG reporting disclosures that align with the Sustainability Accounting Standards Board and Global Reporting Initiative.
+Added: One highlight from the report is that the Company is comprised of 46% female employees and 54% male employees, which is an industry-leading ratio.
+Added: We are fully committed to continuing to create a diverse and inclusive environment at all levels of the organization.
Financial Summary
1 unchanged sentence
YoY Growth (%) YoY Growth (%)
−Removed: Total revenue decreased by $6.1 million during the three months ended September 30, 2020, when compared to the same period in 2019, driven largely by the following:
−Removed: - Decrease in recurring revenue primarily due to declines in transactional revenue and maintenance revenue.
−Removed: Transactional revenue decreased as many of our customers' in-person events have shifted online, been postponed or cancelled due to COVID-19.
−Removed: The decrease in maintenance revenue was related to our continuing efforts to migrate customers from legacy on-premises solutions onto our solutions powered by Blackbaud SKY, our modern cloud platform
−Removed: - Decrease in one-time consulting revenue primarily from less one-time sales related to COVID-19
−Removed: Total revenue increased by $8.0 million during the nine months ended September 30, 2020, when compared to the same period in 2019, driven largely by the following:
−Removed: + Growth in recurring revenue related to positive demand from customers across our portfolio of cloud solutions and an increase in transactional revenue, including charitable giving related to COVID-19
−Removed: - Decrease in one-time consulting revenue primarily from less of one-time sales related to COVID-19
−Removed: - Decrease in one-time analytics revenue as analytics are generally integrated in our cloud solutions
−Removed: Third Quarter 2020 Form 10-Q
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
−Removed: Income from operations increased by $2.2 million during the three months ended September 30, 2020, when compared to the same period in 2019, driven largely by the following:
−Removed: + Reduced overall compensation costs primarily associated with the decision to replace our 2020 cash bonus plans with grants of performance-based equity awards and the modest and targeted headcount reduction we implemented during the second quarter
−Removed: + Decrease in travel costs of $3.7 million due to our restriction on non-essential employee travel in response to the COVID-19 pandemic
−Removed: + Decrease in amortization of intangible assets from business combinations of $2.0 million
−Removed: + Decrease in acquisition-related expenses and integration costs of $1.2 million
+Added: Total revenue decreased by $4.4 million during the three months ended March 31, 2021, when compared to the same period in 2020, driven largely by the following:
+Added: - Decrease in one-time consulting revenue due primarily to less implementation and customization services.
+Added: We changed our commission plans during the first quarter of 2020 to intentionally shift our sales teams' focus towards selling our cloud solutions.
+Added: Additionally, the bookings shortfalls during 2020 caused by the COVID-19 pandemic contributed to the decrease in one-time consulting revenue.
+Added: - Decrease in one-time analytics revenue as analytics are generally integrated in our cloud solutions
+Added: + Growth in recurring revenue related to an increase in transactional revenue related to charitable giving
+Added: Income from operations decreased by $1.8 million during the three months ended March 31, 2021, when compared to the same period in 2020, driven largely by the following:
+Added: - Increase in stock-based compensation costs of $16.4 million due to:
+Added: • replacement of our annual cash bonus plans with a short-term performance-based equity award plan;
+Added: • increases in the grant date fair values of our annual equity awards granted to employees;
+Added: • in response to COVID-19, replacement of our 2020 base salary merit increases with one-year time-based equity awards;
+Added: • overall Company performance against 2020 goals;
+Added: • decrease in the vesting period for our annual long-term incentive time-based equity awards from 4 years (1/4 per year) to 3 years (1/3 per year), beginning in February 2021.
- Decrease in total revenue, as described above
−Removed: - Increase in real estate activity costs of $6.8 million due to our workforce strategy changes in response to the COVID-19 pandemic, as discussed above
−Removed: - Increase in corporate costs of $2.9 million, primarily related to increases in bad debt expense;
−Removed: for additional details, see Note 2 of our condensed consolidated financial statements in this report
−Removed: Income from operations increased by $14.5 million during the nine months ended September 30, 2020, when compared to the same period in 2019, driven largely by the following:
−Removed: + Growth in total revenue, as described above
−Removed: + Reduced overall compensation costs primarily associated with the decision to replace our 2020 cash bonus plans with grants of performance-based equity awards
+Added: + Decrease in compensation costs other than stock-based compensation of $12.7 million primarily due to a decrease in headcount
+ Decrease in travel costs of $3.6 million due to our restriction on non-essential employee travel in response to the COVID-19 pandemic
+ Decrease in amortization of intangible assets from business combinations of $2.0 million
−Removed: + Decrease in acquisition-related expenses and integration costs of $3.1 million
−Removed: + Decrease in restructuring costs of $2.9 million as our facilities optimization plan was largely completed as of December 31, 2019
−Removed: - Increase in real estate activity costs of $6.8 million due to our workforce strategy changes in response to the COVID-19 pandemic.
−Removed: For additional details, see "Results of Operations - General and administrative" below.
−Removed: - Increase in corporate costs of $6.1 million primarily related to an increase in bad debt expense;
−Removed: for additional details, see Note 2 of our condensed consolidated financial statements in this report
−Removed: - Increase in cost of revenue from a $4.3 million impairment charge during the three months ended June 30, 2020, against certain previously capitalized software development costs, resulting from our decision to accelerate the end of customer support for certain solutions
−Removed: - Increase in hosting and data center costs of $3.3 million as we are migrating our cloud infrastructure to leading public cloud service providers
−Removed: There are three primary revenue categories with related business drivers that we continue to monitor closely in light of the COVID-19 pandemic:
−Removed: Contractual Recurring Revenue (approximately two thirds of total revenue in 2019)
−Removed: Recurring subscription contracts are typically for a term of three years at contract inception, billed annually in advance, and we have been for several years successfully shifting our legacy customer base away from annual renewals and moving them onto multi-year renewal contracts.
−Removed: Our contracted recurring revenue has performed well as our renewals have continued to trend ahead of our original plan with over three quarters of 2020 now behind.
−Removed: We expect the shortfall in bookings to put pressure on our revenue during the fourth quarter of 2020 and more so on our full-year 2021 revenue.
−Removed: We are closely monitoring our customer receivable balances, payment terms, and creditworthiness.
−Removed: We are experiencing an increase in our aging of receivables and observed changes in some of our customers' payment behavior associated with the COVID-19 pandemic and this development may continue in the near term.
−Removed: Transactional Revenue (approximately one quarter of total revenue in 2019)
−Removed: Transactional revenue is non-contractual and less predictable given the susceptibility to certain drivers such as timing and number of events and marketing campaigns, as well as fluctuations in donation volumes and tuition payments.
−Removed: We have historically experienced seasonal highs during the fourth quarter due to year-end giving
−Removed: Third Quarter 2020 Form 10-Q
−Removed: Blackbaud, Inc.
−Removed: campaigns and during the second quarter when a large number of events are held.
−Removed: During the third quarter, we again saw many in-person events shift online, be postponed or canceled.
−Removed: Social good organizations are being forced to employ new strategies to maintain momentum with current supporters while capturing the attention of potential new donors.
−Removed: We continue to support our customers in adapting to these circumstances through virtual campaigns and events.
−Removed: Given our ratable revenue recognition model for our recurring subscription contracts and implementation periods, we expect that declines in our 2020 bookings performance will have a greater negative impact on our 2021 revenue than 2020 revenue.
−Removed: Of these three primary revenue categories, bookings represents the smallest potential impact on recurring revenue in 2020.
−Removed: One-time services and other revenue, which is tied to bookings, would have a more immediate impact on our total revenue.
−Removed: Our first quarter has historically been the seasonal low for bookings, with the second and fourth quarters historically being seasonally higher, and our bookings tend to be back-end loaded within individual quarters given our quarterly quota plans.
−Removed: Although our bookings have performed slightly better than our initial COVID-19 scenario planning, we are currently expecting a significant shortfall in 2020 bookings compared to our original plan for the year as we continue to see challenges in building pipeline.
−Removed: The magnitude of our 2020 bookings shortfall is expected to be impacted by the depth and duration of the COVID-19 pandemic.
−Removed: Our strategy has historically relied on a balanced approach to growth and profitability.
−Removed: As discussed above, the pandemic has created short-term uncertainty in our revenue outlook and the early impacts on pipeline and bookings will likely limit our ability to drive near-term revenue growth at our originally planned levels.
−Removed: Therefore, in line with our strategy, we have made a pivot to greater emphasis on delivering shareholder value through increased profitability and cash flow, which are more controllable.
Customer retention
3 unchanged sentences
Due primarily to these factors, we believe a recurring revenue customer retention measure that combines recurring subscription, maintenance and service customer contracts provides a better representation of our customers' overall behavior.
−Removed: For the twelve months ended September 30, 2020, approximately 92% of our customers with recurring revenue contracts were retained.
+Added: For the twelve months ended March 31, 2021, approximately 93% of our customers with recurring revenue contracts were retained.
This customer retention rate is unchanged from our rate for the full year ended December 31, 2020.
Balance sheet and cash flow
−Removed: At September 30, 2020, our cash and cash equivalents were $30.6 million and the carrying amount of our debt under the 2017 Credit Facility was $444.0 million.
+Added: At March 31, 2021, our cash and cash equivalents were $27.8 million and the carrying amount of our debt under the 2020 Credit Facility was $488.8 million.
Our net leverage ratio was 1.79 to 1.00 .
−Removed: Third Quarter 2020 Form 10-Q
−Removed: Blackbaud, Inc.
−Removed: During the nine months ended September 30, 2020, we generated $109.2 million in cash from operations, primarily from operating cost reductions put in place in response to COVID-19 and the increased use of stock-based compensation.
−Removed: During the nine months ended September 30, 2020, we had a net decrease in borrowings of $23.6 million.
−Removed: Our assumption of the real estate loans associated with our purchase of our Headquarter Facility was a noncash investing and financing transaction (see discussion below).
−Removed: During the nine months ended September 30, 2020, we also had aggregate cash outlays of $57.9 million for purchases of property and equipment and capitalized software development costs.
−Removed: Recent Developments
−Removed: Purchase of Headquarters Facility
−Removed: In August 2020, we completed the purchase of our Headquarters Facility.
−Removed: Prior to the completion of the Transaction, we leased the Headquarters facility from the Seller.
−Removed: We paid the Seller a purchase price that included the assumption of the Seller's obligations of $61.1 million, cash of $15.2 million and certain lender fees, closing costs, adjustments and prorations as set forth in the PSA.
−Removed: We funded the cash portion of the purchase price through borrowings under the 2017 Credit Facility.
−Removed: October 2020 refinancing
−Removed: On October 30, 2020, we entered into the 2020 Credit Facility.
−Removed: The 2020 Credit Facility matures in October 2025 and replaces the 2017 Credit Facility by amending and restating it to (a) increase the amount available under the revolving credit facility to $500.0 million, (b) increase the amount available under the term loan facility to $400.0 million and (c) provide for a net leverage ratio of, (i) commencing with the first fiscal quarter ending December 31, 2020 and through September 30, 2022, 4.00 to 1.00 and (ii) commencing with the fiscal quarter ending December 31, 2022 and thereafter, 3.75 to 1.00, among other changes.
−Removed: See Part II, Item 5.
−Removed: “Other Information” for detailed information relating to the terms of the 2020 Credit Facility.
−Removed: Third Quarter 2020 Form 10-Q
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
+Added: During the three months ended March 31, 2021, we generated $30.1 million in cash from operations, had a net increase in borrowings of $21.0 million, returned $28.1 million to stockholders by way of share repurchases and had aggregate cash outlays of $12.8 million for purchases of property and equipment and capitalized software development costs.
Results of Operations
−Removed: Comparison of the three and nine months ended September 30, 2020 and 2019
+Added: Comparison of the three months ended March 31, 2021 and 2020
Revenue and Cost of Revenue
8 unchanged sentences
We intend to continue focusing on innovation, quality and integration of our cloud solutions, which we believe will drive future revenue growth.
−Removed: Third Quarter 2020 Form 10-Q
+Added: Recurring revenue increased by $1.9 million or 0.9%, during the three months ended March 31, 2021, when compared to the same period in 2020, driven primarily by the following:
+Added: + Increase in transactional revenue of $2.8 million, primarily due to the continued shift toward virtual and online fundraising and charitable giving
+Added: - Decrease in contractual recurring revenue of $0.9 million largely due to a decrease in maintenance revenue related to our continuing efforts to migrate customers from legacy on-premises solutions onto our cloud solutions as well as the bookings shortfalls during 2020 resulting from COVID-19
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
−Removed: Recurring revenue decreased by $5.1 million or 2.5%, during the three months ended September 30, 2020, when compared to the same period in 2019, driven primarily by the following:
−Removed: - Decrease in subscriptions revenue of $1.5 million largely related to a decrease in transactional revenue as many of our customers' in-person events have shifted online, been postponed or cancelled due to COVID-19
−Removed: - Decrease in maintenance revenue of $3.7 million primarily related to our continuing efforts to migrate customers from legacy on-premises solutions onto our solutions powered by Blackbaud SKY, our modern cloud platform
−Removed: Recurring revenue increased by $9.4 million or 1.5%, during the nine months ended September 30, 2020, when compared to the same period in 2019, driven primarily by the following:
−Removed: + Increase in subscriptions revenue of $21.0 million related to positive demand from customers across our portfolio of cloud solutions, an increase in transactional revenue, including charitable giving related to COVID-19, and an increase in services embedded in our renewable cloud solution contracts
−Removed: - Decrease in maintenance revenue of $11.5 million primarily related to our continuing efforts to migrate customers from legacy on-premises solutions onto our solutions powered by Blackbaud SKY, our modern cloud platform
−Removed: Partially offsetting subscriptions revenue were decreases in the mix of retained and managed services contracts we present in recurring.
−Removed: Revenue from retained and managed service contracts that we do not expect to have a term consistent with our cloud solution contracts is included in one-time services and other revenue beginning January 1, 2020.
−Removed: This change in presentation resulted in decreases in recurring revenue and offsetting increases to one-time services and other revenue of $4.2 million and $12.7 million during the three and nine months ended September 30, 2020, respectively.
−Removed: Cost of recurring revenue decreased by $3.4 million or 3.9%, during the three months ended September 30, 2020, when compared to the same period in 2019, driven primarily by the following:
−Removed: + Increase in amortization of software development costs of $2.4 million due to investments made on innovation, quality and the integration of our cloud solutions
−Removed: + Increase in hosting and data center costs of $1.0 million as we are migrating our cloud infrastructure to leading public cloud service providers
−Removed: - Decrease in transaction-based costs of $1.7 million related to payment services integrated in our cloud solutions
+Added: Cost of recurring revenue decreased by $0.7 million or 0.8%, during the three months ended March 31, 2021, when compared to the same period in 2020, driven primarily by the following:
- Decrease in amortization of intangible assets from business combinations of $1.7 million
−Removed: - Decrease in compensation costs primarily associated with the decision to replace our 2020 cash bonus plans with grants of performance-based equity awards
−Removed: - Decrease in costs associated with certain retained and managed services contracts for which revenue is included in one-time services and other revenue beginning January 1, 2020, as discussed above
−Removed: Cost of recurring revenue increased by $6.2 million or 2.4%, during the nine months ended September 30, 2020, when compared to the same period in 2019, driven primarily by the following:
+Added: - Decreases in allocated facilities costs related to efficiencies in our real estate footprint, and third-party contractor costs
+Added: + Increase in compensation costs of $1.3 million primarily related to stock-based compensation due to the factors discussed above on page 23
+ Increase in amortization of software development costs of $1.0 million due to investments made on innovation, quality and the integration of our cloud solutions
−Removed: + Impairment charge of $4.3 million during the three months ended June 30, 2020, against certain previously capitalized software development costs that reduced the carrying value of those assets to zero.
−Removed: The impairment charge resulted primarily from our decision to accelerate the end of customer support for certain solutions.
−Removed: + Increase in hosting and data center costs of $3.3 million as we are migrating our cloud infrastructure to leading public cloud service providers
−Removed: + Increase in transaction-based costs of $1.3 million related to payment services integrated in our cloud solutions
−Removed: - Decrease in amortization of intangible assets from business combinations of $5.0 million
−Removed: - Decrease in compensation costs primarily associated with the decision to replace our 2020 cash bonus plans with grants of performance-based equity awards
−Removed: - Decrease in costs associated with certain retained and managed services contracts for which revenue is included in one-time services and other revenue beginning January 1, 2020, as discussed above
−Removed: Third Quarter 2020 Form 10-Q
−Removed: Blackbaud, Inc.
−Removed: The 0.6% increase in recurring gross margin for the three months ended September 30, 2020, when compared to the same period in 2019 , was primarily the result of the decrease in lower margin transactional revenue.
−Removed: The 0.3% decrease in recurring gross margin for the nine months ended September 30, 2020, when compared to the same period in 2019, was primarily the result of the impairment of previously capitalized software development costs, and incremental costs associated with our continued shift toward selling cloud solutions, including data center costs and amortization of software development costs.
−Removed: We expect continued pressure on recurring gross margin largely driven by duplicate data center costs as we migrate our cloud infrastructure to leading cloud service providers.
+Added: Recurring gross margin increased by 0.7% for the three months ended March 31, 2021, when compared to the same period in 2020, primarily due to the increase in recurring revenue slightly outpacing the decrease in related costs.
One-time services and other
4 unchanged sentences
Cost of one-time services and other is primarily comprised of compensation costs for professional services and onsite training personnel, other costs incurred in providing onsite customer training, third-party contractor expenses, data expense incurred to perform one-time analytic services, third-party software royalties, costs of user conferences, allocated depreciation, facilities and IT support costs and amortization of intangible assets from business combinations.
−Removed: Third Quarter 2020 Form 10-Q
+Added: One-time services and other revenue decreased by $6.3 million, or 33.7%, during the three months ended March 31, 2021, when compared to the same period in 2020, driven primarily by the following:
+Added: - Decrease in one-time consulting revenue of $4.7 million due primarily to less implementation and customization services.
+Added: We changed our commission plans during the first quarter of 2020 to intentionally shift our sales teams' focus towards selling our cloud solutions.
+Added: Additionally, the bookings shortfalls during 2020 caused by the COVID-19 pandemic contributed to the decrease in one-time consulting revenue.
+Added: - Decrease in one-time analytics revenue of $1.0 million as analytics are generally integrated in our cloud solutions
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
−Removed: One-time services and other revenue decreased by $1.0 million, or 6.3%, and $1.4 million, or 2.8%, during the three and nine months ended September 30, 2020, respectively, when compared to the same periods in 2019, driven primarily by the following:
−Removed: + Increases in the mix of retained and managed services contracts we present in one-time services and other.
−Removed: Revenue from retained and managed service contracts that we do not expect to have a term consistent with our cloud solution contracts is included in one-time services and other revenue beginning January 1, 2020.
−Removed: This change in presentation resulted in increases to one-time services and other revenue and offsetting decreases in recurring revenue of $4.2 million and $12.7 million during the three and nine months ended September 30, 2020.
−Removed: - Decreases in one-time consulting revenue of $2.5 million and $8.0 million, respectively, primarily from less one-time sales related to COVID-19 as well as services increasingly being embedded in our renewable cloud solution contracts.
−Removed: Our embedded services are recorded as recurring revenue.
−Removed: - Decreases in one-time analytics revenue of $0.8 million and $2.9 million as analytics are generally integrated in our cloud solutions
−Removed: - Decreases in onsite training revenue of $0.6 million and $1.1 million due to COVID-19
−Removed: Cost of one-time services and other remained relatively consistent during the three and nine months ended September 30, 2020, when compared to the same periods in 2019.
−Removed: The 7.8% and 3.3% decreases in one-time services and other gross margin during the three and nine months ended September 30, 2020, respectively, when compared to the same periods in 2019, were primarily the result of the reductions in one-time consulting and analytics revenue discussed above.
+Added: Cost of one-time services and other decreased by $0.8 million, or 5.2%, during the three months ended March 31, 2021, when compared to the same periods in 2020, driven primarily by the following:
+Added: - Decrease in compensation costs other than stock-based compensation of $1.3 million largely due to a decrease in headcount
+Added: - Decrease in third-party contractor costs of $0.7 million primarily due to the timing of our spending
+Added: + Increase in stock-based compensation costs of $2.6 million due to the factors discussed above on page 23
+Added: One-time services and other gross margin decreased by 35.1% during the three months ended March 31, 2021, respectively, when compared to the same period in 2020, primarily due to the significant reductions in one-time consulting and analytics revenue discussed above.
Operating Expenses
2 unchanged sentences
Percentages indicate expenses as a percentage of total revenue
−Removed: Third Quarter 2020 Form 10-Q
−Removed: Blackbaud, Inc.
Sales, marketing and customer success
Sales, marketing and customer success expense includes compensation costs, variable sales commissions, travel-related expenses, advertising and marketing materials, public relations costs, variable reseller commissions and allocated depreciation, facilities and IT support costs.
−Removed: We see a large market opportunity in the long-term and will continue to make investments to drive sales effectiveness, which is a component of our four-point growth strategy.
+Added: We see a large market opportunity in the long-term and will continue to make investments to drive sales effectiveness.
We have also implemented software tools to enhance our digital footprint and drive lead generation.
−Removed: In response to the COVID-19 pandemic, we implemented a modest and targeted headcount reduction during the second quarter, including a reduction in our sales headcount with a focus on retaining our most highly productive sales executives.
−Removed: Sales, marketing and customer success expense decreased by $7.0 million or 12.7%, and $6.8 million or 4.1%, during the three and nine months ended September 30, 2020, respectively, when compared to the same periods in 2019, primarily driven by the following:
−Removed: + For the nine months ended September 30, 2020, increase in employee severance costs of $1.0 million related to a reduction in our sales headcount in response to the COVID-19 pandemic as discussed above
−Removed: - Decreases in compensation costs of $3.5 million and $2.6 million, respectively, primarily related to the decision to replace our 2020 cash bonus plans with grants of performance-based equity awards;
−Removed: for the three months ended September 30, 2020, compensation costs also decreased due to the reduction in sales headcount discussed above
−Removed: - Decreases in travel costs of $2.1 million and $3.6 million, respectively, due to our restriction on non-essential employee travel in response to the COVID-19 pandemic
−Removed: - Decreases in commissions expense of $0.7 million and $0.9 million, respectively, related to a decrease in commissionable sales
+Added: In response to the COVID-19 pandemic, we implemented a modest and targeted headcount reduction during the second quarter of 2020, including a reduction in our sales headcount with a focus on retaining our most highly productive sales executives.
+Added: The enhancements we are making in our go-to-market approach are expected to significantly reduce the payback period for our customer acquisition costs while increasing sales velocity.
+Added: As a result, we do not expect our sales, marketing and customer success expense to return to pre-pandemic levels.
+Added: Sales, marketing and customer success expense decreased by $9.9 million or 16.9%, during the three months ended March 31, 2021, respectively, when compared to the same period in 2020, primarily driven by the following:
+Added: - Decrease in compensation costs other than stock-based compensation of $8.6 million due to the targeted reduction in sales headcount during the second quarter of 2020, discussed above
+Added: - Decrease in allocated costs of $2.5 million primarily related to a decrease in rent expense and the impact of the targeted reduction in sales headcount during the second quarter of 2020, as discussed above
+Added: - Decrease in travel costs of $2.2 million due to our restriction on non-essential employee travel in response to the COVID-19 pandemic
+Added: + Increase in stock-based compensation costs of $2.9 million due to the factors discussed above on page 23
+Added: First Quarter 2021 Form 10-Q
+Added: Blackbaud, Inc.
Research and development
Research and development expense includes compensation costs for engineering and product management personnel, third-party contractor expenses, software development tools and other expenses related to developing new solutions or upgrading and enhancing existing solutions that do not qualify for capitalization, and allocated depreciation, facilities and IT support costs.
−Removed: We continue to make investments to delight our customers with innovative cloud solutions, which is a component of our four-point growth strategy.
−Removed: Research and development expenses decreased by $3.2 million or 12.2%, and $7.6 million or 9.5%, during the three and nine months ended September 30, 2020, respectively, when compared to the same periods in 2019, primarily driven by the following:
−Removed: - Decreases in compensation costs of $2.5 million and $6.0 million, respectively, primarily related to the decision to replace our 2020 cash bonus plans with grants of performance-based equity awards
−Removed: - Decreases in third-party contractor costs of $0.9 million and $1.2 million, respectively
−Removed: Not included in research and development expense for the three months ended September 30, 2020 and 2019 were $10.2 million and $11.1 million, respectively, and for the nine months ended September 30, 2020 and 2019 were $31.6 million and $33.9 million, respectively, of qualifying costs associated with development activities that are required to be capitalized under the internal-use software accounting guidance such as those for our cloud solutions, as well as development costs associated with acquired companies.
+Added: We continue to make investments to delight our customers with innovative cloud solutions, which is a component of our four-point strategy.
+Added: We increased engineering hiring beginning in the fourth quarter of 2020.
+Added: Research and development expenses increased by $4.2 million or 16.8%, during the three months ended March 31, 2021, when compared to the same period in 2020, primarily driven by the following:
+Added: + Increase in compensation costs of $3.3 million primarily related to stock-based compensation due to the factors discussed above on page 23
+Added: + Decrease in software development costs of $1.7 million that were required to be capitalized under the internal-use software guidance, primarily due to lower engineering headcount
+Added: Not included in research and development expense for the three months ended March 31, 2021 and 2020 were $9.1 million and $10.8 million, respectively, of qualifying costs associated with development activities that are required to be capitalized under the internal-use software accounting guidance such as those for our cloud solutions, as well as development costs associated with acquired companies.
Qualifying capitalized software development costs associated with our cloud solutions are subsequently amortized to cost of subscriptions revenue over the related asset's estimated useful life, which generally range from three to seven years.
We expect that the amount of software development costs capitalized will be relatively consistent in the near-term as we continue making investments in innovation, quality and the integration of our solutions, which we believe will drive long-term revenue growth.
−Removed: Third Quarter 2020 Form 10-Q
−Removed: Blackbaud, Inc.
General and administrative
General and administrative expense consists primarily of compensation costs for general corporate functions, including senior management, finance, accounting, legal, human resources and corporate development, third-party professional fees, insurance, allocated depreciation, facilities and IT support costs, acquisition-related expenses and other administrative expenses.
−Removed: During the third quarter of 2020, we adjusted our workforce strategy to provide more flexibility for our employees to work remotely after our offices reopen.
+Added: During the third quarter of 2020, we adjusted our workforce strategy to provide more flexibility to our employees after our offices reopen and we expect to have more employees working remotely either part-time or full-time, even within our hub locations.
This change is expected to create efficiencies within our real estate footprint as we shift toward more collaborative workspaces within our offices.
−Removed: As a result, during the three months ended September 30, 2020, we reduced the estimated useful lives of our operating lease ROU assets for certain of our office locations we expect to exit, which resulted in an increase in operating lease costs during the period.
−Removed: For these same office locations, we also reduced the estimated useful lives of certain facilities-related fixed assets, which resulted in an increase in depreciation expense.
−Removed: We currently expect most of the transactions related to these real estate activities will close during the fourth quarter of 2020 with a one-time cash outlay of between $20.0 million and $25.0 million during the third and fourth quarters of 2020.
−Removed: We incurred approximately $6.8 million of pre-tax costs related to these real estate activities during the third quarter of 2020.
−Removed: General and administrative expense increased by $5.2 million or 18.1%, and $5.3 million or 6.2%, during the three and nine months ended September 30, 2020, when compared to the same periods in 2019, primarily driven by the following:
−Removed: + Increases in real estate activity costs of $6.8 and $6.8, respectively, due to our workforce strategy changes in response to the COVID-19 pandemic, as discussed above
−Removed: + Increases in corporate costs of $2.5 million and $5.9 million, respectively, primarily related to increases in bad debt expense;
−Removed: for additional details, see Note 2 of our condensed consolidated financial statements in this report
−Removed: - Decreases in compensation costs of $2.0 million and $2.7 million, respectively, primarily related to the decision to replace our 2020 cash bonus plans with grants of performance-based equity awards
−Removed: - Decreases in acquisition-related expenses and integration costs of $1.2 million and $3.1 million, respectively
−Removed: - Decreases in third-party contractor costs of $1.0 million and $1.4 million, respectively
−Removed: Restructuring
−Removed: During 2017, in an effort to further our organizational objectives, including improved operating efficiency, customer outcomes and employee satisfaction, we initiated a multi-year plan to consolidate and relocate some of our existing offices to highly modern and more collaborative workspaces with short-term financial commitments, which was substantially completed as of December 2019.
−Removed: During the three and nine months ended September 30, 2019, we incurred $0.4 million and $3.1 million, respectively, in before-tax restructuring charges related to these activities.
−Removed: Such charges during the three and nine months ended September 30, 2020 were insignificant.
−Removed: Interest Expense
−Removed: Three months ended
−Removed: September 30,
−Removed: Nine months ended
−Removed: September 30,
−Removed: (dollars in millions) 2020
−Removed: Interest expense $ 4.0 $ 5.1 (21.8) % $ 12.0 $ 16.2 (25.8) %
−Removed: % of total revenue 1.9 % 2.3 % 1.8 % 2.4 %
−Removed: The decreases in interest expense in dollars and as a percentage of total revenue during the three and nine months ended September 30, 2020, when compared to the same periods in 2019, were primarily due to decreases in our average daily borrowings and our weighted average effective interest rates.
−Removed: We expect our interest expense to remain relatively consistent in the near-term.
−Removed: Third Quarter 2020 Form 10-Q
+Added: General and administrative expense increased by $4.7 million or 18.3%, during the three months ended March 31, 2021, when compared to the same period in 2020, primarily driven by the following:
+Added: + Increase in stock-based compensation costs of $5.1 million due to the factors discussed above on page 23
+Added: + Increase in corporate costs of $2.2 million primarily related to increases in third-party consulting fees and insurance costs
+Added: - Decrease in rent expense of $3.0 million primarily related to the purchase of our global headquarters facility during the third quarter of 2020 and our exit of certain other office leases globally during the second half of 2020 in-line with our new workforce strategy, discussed above
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
+Added: Interest Expense
+Added: Interest expense ($M)
+Added: Percentages indicate expenses as a percentage of total revenue
+Added: The increase in interest expense in dollars and as a percentage of total revenue during the three months ended March 31, 2021, when compared to the same period in 2020, was primarily due to the Real Estate Loans assumed for the purchase of our global headquarters facility in August 2020 and the deferred financing costs and debt discount associated with the 2020 Credit Facility, which was entered into in October 2020.
Deferred Revenue
The table below compares the components of deferred revenue from our consolidated balance sheets:
−Removed: (dollars in millions) Timing of recognition September 30,
+Added: (dollars in millions) Timing of recognition March 31,
2021 December 31,
9 unchanged sentences
To the extent that our customers are billed for our solutions and services in advance of delivery, we record such amounts in deferred revenue.
−Removed: Our recurring revenue contracts are generally for a term of three years at contract inception with one to three-year renewals thereafter, billed annually in advance and non-cancelable.
−Removed: We generally invoice our customers with recurring revenue contracts in annual cycles 30 days prior to the end of the contract term.
−Removed: Deferred revenue from recurring revenue contracts increased during the nine months ended September 30, 2020, primarily due a seasonal increase in customer contract renewals.
−Removed: Historically, due to the timing of customer budget cycles, we have an increase in customer contract renewals at or near the beginning of our third quarter.
−Removed: Deferred revenue from one-time services and other increased during the nine months ended September 30, 2020, primarily due an increase in the mix of retained and managed services contracts we present in one-time services and other beginning January 1, 2020, as discussed above.
−Removed: We have acquired businesses whose net tangible assets include deferred revenue.
−Removed: In accordance with GAAP reporting requirements, we recorded write-downs of deferred revenue from customer arrangements predating the acquisition to fair value, which resulted in lower recorded deferred revenue as of the acquisition date than the actual amounts paid in advance for solutions and services under those customer arrangements.
−Removed: Therefore, our deferred revenue after an acquisition will not reflect the full amount of deferred revenue that would have been reported if the acquired deferred revenue was not written down to fair value.
−Removed: Further explanation of this impact is included below under the caption "Non-GAAP financial measures".
−Removed: Income tax provision
−Removed: Three months ended
−Removed: September 30,
−Removed: Nine months ended
−Removed: September 30,
−Removed: (dollars in millions) 2020
+Added: Our recurring revenue contracts are generally for a term of three years at contract inception, billed annually in advance, and non-cancelable.
+Added: We have been for several years successfully shifting our legacy customer base away from annual renewals and moving them onto multi-year renewal contracts.
+Added: We generally invoice our customers with recurring revenue contracts in annual cycles 30 days prior to the end each one-year period.
+Added: Deferred revenue from recurring revenue contracts decreased during the three months ended March 31, 2021, primarily due a seasonal decrease in customer contract renewals.
+Added: Historically, due to the timing of customer budget cycles, we have an increase in customer contract renewals at or near the beginning of our third quarter, which generally results in our lowest balance of deferred revenue at the end of our first quarter.
+Added: Deferred revenue from one-time services and other increased during the three months ended March 31, 2021, primarily due to increased bookings during the fourth quarter of 2020 and the first quarter of 2021.
+Added: First Quarter 2021 Form 10-Q
+Added: Blackbaud, Inc.
Income tax provision
−Removed: Effective income tax rate 26.5 % 7.4 % 24.6 % 10.7 %
−Removed: The increase in our effective tax rate for the three months ended September 30, 2020, when compared to the same period in 2019, was primarily attributable to higher 2019 discrete benefits against lower pre-tax income.
−Removed: The 2019 effective tax rate was positively impacted by a reduction to the liability for unrecognized tax benefits.
−Removed: The effective tax rate for 2020 was positively impacted by an adjustment to the prior year tax provision net of a tax charge resulting from an increase in the U.K.
−Removed: The increase in our effective tax rate for the nine months ended September 30, 2020, when compared to the same period in 2019, was primarily attributable to a reduction in benefits attributable to stock based compensation against increased 2020 profitability.
+Added: Income tax provision ($M)
+Added: Percentages indicate effective income tax rates
+Added: The increase in our effective income tax rate for the three months ended March 31, 2021, when compared to the same period in 2020, was primarily attributable to higher 2021 discrete tax expense against lower pre-tax income.
+Added: The 2020 effective income tax rate was positively impacted by benefits attributable to stock-based compensation.
+Added: The 2021 effective income tax rate was negatively impacted by tax expense attributable to stock-based compensation against lower pre-tax income.
Non-GAAP Financial Measures
The operating results analyzed below are presented on a non-GAAP basis.
−Removed: We use non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share internally in analyzing our operational performance.
−Removed: Accordingly, we
−Removed: Third Quarter 2020 Form 10-Q
−Removed: Blackbaud, Inc.
−Removed: believe these non-GAAP measures are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance.
+Added: We use non-GAAP financial measures internally in analyzing our operational performance.
+Added: Accordingly, we believe these non-GAAP measures are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance.
While we believe these non-GAAP measures provide useful supplemental information, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
In addition, these non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies.
−Removed: We have acquired businesses whose net tangible assets include deferred revenue.
−Removed: In accordance with GAAP reporting requirements, we recorded write-downs of deferred revenue under arrangements predating the acquisition to fair value, which resulted in lower recognized revenue than the contributed purchase price until the related obligations to provide services under such arrangements are fulfilled.
−Removed: Therefore, our GAAP revenues after the acquisitions will not reflect the full amount of revenue that would have been reported if the acquired deferred revenue was not written down to fair value.
−Removed: The non-GAAP measures described below reverse the acquisition-related deferred revenue write-downs so that the full amount of revenue booked by the acquired companies is included, which we believe provides a more accurate representation of a revenue run-rate in a given period and, therefore, will provide more meaningful comparative results in future periods.
The non-GAAP financial measures discussed below exclude the impact of certain transactions because we believe they are not directly related to our operating performance in any particular period, but are for our long-term benefit over multiple periods.
1 unchanged sentence
Three months ended
−Removed: September 30,
−Removed: Nine months ended
−Removed: September 30,
(dollars in millions) 2021
−Removed: GAAP Revenue $ 215.0 $ 221.1 (2.8) % $ 670.6 $ 662.6 1.2 %
−Removed: Non-GAAP adjustments:
−Removed: Acquisition-related deferred revenue write-down — 0.3 (100.0) % — 1.7 (100.0) %
−Removed: Non-GAAP revenue (1)
−Removed: $ 215.0 $ 221.4 (2.9) % $ 670.6 $ 664.3 1.0 %
GAAP gross profit $ 115.8 $ 118.8 (2.5) %
1 unchanged sentence
Non-GAAP adjustments:
−Removed: Acquisition-related deferred revenue write-down — 0.3 (100.0) % — 1.7 (100.0) %
Stock-based compensation expense 5.4 0.9 519.4 %
Amortization of intangibles from business combinations 9.1 10.9 (16.5) %
−Removed: Employee severance — — (100.0) % 0.8 1.1 (28.3) %
14.5 11.8 22.5 %
3 unchanged sentences
(1) The individual amounts for each year may not sum to non-GAAP revenue, subtotal or non-GAAP gross profit due to rounding.
−Removed: Third Quarter 2020 Form 10-Q
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
Three months ended
−Removed: September 30,
−Removed: Nine months ended
−Removed: September 30,
(dollars in millions, except per share amounts) 2021
2 unchanged sentences
Non-GAAP adjustments:
−Removed: Acquisition-related deferred revenue write-down — 0.3 (100.0) % — 1.7 (100.0) %
Stock-based compensation expense 30.0 13.6 120.9 %
9 unchanged sentences
GAAP income before provision for income taxes $ 0.5 $ 5.3 (90.3) %
−Removed: GAAP net income $ 4.9 $ 4.6 6.8 % $ 21.3 $ 10.6 101.6 %
+Added: GAAP net (loss) income $ (0.2) $ 4.6 (103.5) %
Shares used in computing GAAP diluted earnings per share 47,363,197 48,455,751 (2.3) %
13 unchanged sentences
Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software development, and capital expenditures for property and equipment.
−Removed: Nine months ended
−Removed: September 30,
+Added: Three months ended
(dollars in millions) 2021
−Removed: GAAP net cash provided by operating activities $ 109.2 $ 122.1 (10.6) %
+Added: GAAP net cash provided by (used in) operating activities $ 30.1 $ (24.5) (222.9) %
purchase of property and equipment (3.5) (2.9) 21.0 %
1 unchanged sentence
Non-GAAP free cash flow $ 17.3 $ (38.3) (145.2) %
−Removed: Third Quarter 2020 Form 10-Q
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
Non-GAAP organic revenue growth
−Removed: In addition, we discuss non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis and non-GAAP organic recurring revenue growth, in analyzing our performance.
+Added: In addition, we discuss non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis and non-GAAP organic recurring revenue growth, in analyzing our operating performance.
We believe that these non-GAAP measures are useful to investors, as a supplement to GAAP measures, for evaluating the periodic growth of our business on a consistent basis.
5 unchanged sentences
(dollars in millions) Three months ended
−Removed: September 30,
−Removed: Nine months ended
−Removed: September 30,
GAAP revenue $ 219.2 $ 223.6
7 unchanged sentences
Foreign currency impact on Non-GAAP organic revenue (3)
−Removed: (0.8) — 1.5 —
Non-GAAP organic revenue on constant currency basis (3)
12 unchanged sentences
The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and EURO.
−Removed: Third Quarter 2020 Form 10-Q
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
+Added: Rule of 40 is defined as non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin.
+Added: Non-GAAP adjusted EBITDA is defined as GAAP net income plus interest, net;
+Added: income tax provision (benefit);
+Added: depreciation;
+Added: amortization of intangible assets from business combinations;
+Added: amortization of software development costs;
+Added: acquisition-related deferred revenue write-down;
+Added: stock-based compensation;
+Added: acquisition-related integration costs;
+Added: acquisition-related expenses;
+Added: employee severance;
+Added: and restructuring and other real estate activities.
+Added: Three months ended
+Added: (dollars in millions) 2021
+Added: GAAP net (loss) income $ (0.2) $ 4.6 (103.5) %
+Added: Non-GAAP adjustments:
+Added: Interest, net 5.0 3.6 36.4 %
+Added: GAAP income tax provision 0.7 0.7 (1.7) %
+Added: Depreciation 3.2 3.5 (9.3) %
+Added: Amortization of intangibles from business combinations 9.7 11.7 (17.1) %
+Added: Amortization of software development costs (1)
+Added: 8.0 6.7 19.3 %
+Added: Subtotal 26.5 26.2 1.1 %
+Added: Non-GAAP EBITDA $ 26.3 $ 30.9 (14.7) %
+Added: Non-GAAP EBITDA margin 12.0 % 13.8 %
+Added: Non-GAAP adjustments:
+Added: Stock-based compensation expense 30.0 13.6 120.9 %
+Added: Employee severance 1.0 0.1 921.6 %
+Added: Acquisition-related integration costs (0.1) — 206.3 %
+Added: Acquisition-related expenses 0.1 0.1 (53.2) %
+Added: Restructuring and other real estate activities (0.1) — (562.5) %
+Added: Subtotal 30.9 13.8 123.4 %
+Added: Adjusted Non-GAAP EBITDA $ 57.2 $ 44.7 28.0 %
+Added: Adjusted Non-GAAP EBITDA margin 26.1 %
+Added: Rule of 40 (2)
+Added: (1) Includes amortization expense related to software development costs and amortization expense from capitalized cloud computing implementation costs.
+Added: (2) Measured by non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin.
+Added: See Non-GAAP organic revenue growth table above.
+Added: First Quarter 2021 Form 10-Q
+Added: Blackbaud, Inc.
Our revenues normally fluctuate as a result of certain seasonal variations in our business.
−Removed: Our transaction revenue has historically been at its lowest in the first quarter due to the timing of customer fundraising initiatives and events.
−Removed: Our revenue from payment services has historically increased during the fourth quarter due to year-end giving.
+Added: Our first quarter has historically been the seasonal low for bookings, with the second and fourth quarters historically being seasonally higher, and our bookings tend to be back-end loaded within individual quarters given our quarterly quota plans.
+Added: Transactional revenue is non-contractual and less predictable given the susceptibility to certain drivers such as timing and number of events and marketing campaigns, as well as fluctuations in donation volumes and tuition payments.
+Added: Our transactional revenue has historically been at its lowest in the first quarter due to the timing of customer fundraising initiatives and events.
+Added: We have historically experienced seasonal highs during the fourth quarter due to year-end giving campaigns and during the second quarter when a large number of events are held.
Our revenue from professional services has historically been lower in the first quarter when many of those services commence and in the fourth quarter due to the holiday season.
1 unchanged sentence
Our expenses, however, do not vary significantly as a result of these factors, but do fluctuate on a quarterly basis due to varying timing of expenditures.
−Removed: Our cash flow from operations normally fluctuates quarterly due to the combination of the timing of customer contract renewals including renewals associated with customers of acquired companies, delivery of professional services and occurrence of customer events, the payment of bonuses, as well as merit-based salary increases, among other factors.
−Removed: Historically, due to lower revenues in our first quarter, combined with the payment of bonuses from the prior year in our first quarter and the payment of certain annual vendor contracts, our cash flow from operations has been lowest in our first quarter.
+Added: Our cash flow from operations normally fluctuates quarterly due to the combination of the timing of customer contract renewals including renewals associated with customers of acquired companies, delivery of professional services and occurrence of customer events, as well as merit-based salary increases, among other factors.
+Added: Historically, due to lower revenues in our first quarter, combined with the payment of certain annual vendor contracts, our cash flow from operations has been lowest in our first quarter.
Due to the timing of customer contract renewals and student enrollments, many of which take place at or near the beginning of our third quarter, our cash flow from operations has been lower in our second quarter as compared to our third and fourth quarters.
−Removed: Partially offsetting these favorable drivers of cash flow from operations in our third and fourth quarters are merit-based salary increases, which are generally effective in April each year.
+Added: Partially offsetting these favorable drivers of cash flow from operations in our third and fourth quarters are base salary merit increases, which were replaced in 2020 with performance-based equity awards due to COVID-19, but are expected to return in July 2021.
In addition, deferred revenues can vary on a seasonal basis for the same reasons.
Our cash flow from financing is negatively impacted in our first quarter when most of our equity awards vest, as we pay taxes on behalf of our employees related to the settlement or exercise of equity awards.
+Added: During the second quarter of 2021, we expect an increase in the amount taxes we pay on behalf of our employees related to the settlement of equity awards when compared to the same period in 2020, as the equity granted in May 2020 in lieu of cash bonus plans and base salary merit increases will vest.
These patterns may change as a result of the continued shift to online giving, growth in volume of transactions for which we process payments, or as a result of acquisitions, new market opportunities, new solution introductions, the COVID-19 pandemic or other factors.
1 unchanged sentence
The following table presents selected financial information about our financial position:
−Removed: (dollars in millions) September 30,
+Added: (dollars in millions) March 31,
2021 December 31,
5 unchanged sentences
The following table presents selected financial information about our cash flows:
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
(dollars in millions) 2021
−Removed: Net cash provided by operating activities $ 109.2 $ 122.1 (10.6) %
+Added: Net cash provided by (used in) operating activities $ 30.1 $ (24.5) (222.9) %
Net cash used in investing activities (12.8) (13.8) (7.5) %
Net cash used in financing activities (379.6) (278.9) 36.1 %
+Added: First Quarter 2021 Form 10-Q
+Added: Blackbaud, Inc.
Our principal sources of liquidity are our operating cash flow, funds available under the 2020 Credit Facility and cash on hand.
3 unchanged sentences
In that context, we regularly evaluate opportunities to enhance our capital structure including through potential debt or equity issuances.
−Removed: Third Quarter 2020 Form 10-Q
−Removed: Blackbaud, Inc.
−Removed: To better enable us to weather the extraordinary business challenges brought about by the global COVID-19 pandemic, to protect the safety and welfare of our employees, and to further effect our long-term strategy to deliver the greatest value to our stockholders, we have taken several actions.
−Removed: These initial measures taken are expected to provide us the financial flexibility needed to manage a wide array of outcomes that may result from the pandemic.
−Removed: Some of these actions include the following:
−Removed: • Rescinded our previously announced policy to pay an annual dividend at a rate of $0.48 per share of common stock and discontinued the declaration and payment of all cash dividends, beginning with the second quarter of 2020 and thereafter until such time, if any, as our Board of Directors may otherwise determine in its sole discretion;
−Removed: • Temporarily suspended our 401(k)-match program, whereby we have historically matched 50% of qualified U.S.
−Removed: employees' contributions to our 401(k) plan up to 6% of their salaries, effective with the payroll period commencing April 1, 2020;
−Removed: • Temporarily froze our hiring efforts and implemented a modest and targeted headcount reduction, though we have since began backfilling key roles, including engineering positions;
−Removed: • Michael Gianoni, our President and Chief Executive Officer, elected to forego receipt of all but that portion of his base salary necessary to fund, on a pre-tax basis, his contributions to continue to participate in our health benefits plan, between April 1, 2020 and June 16, 2020;
−Removed: • Restricted non-essential employee travel and put in place other operating cost containment actions;
−Removed: • All of our employees with a base salary equal to or less than $75 thousand received financial support in the form of a one-time bonus of $1 thousand on April 30, 2020;
−Removed: • On May 1, 2020, we granted RSUs to our employees that were eligible for base salary merit increases in lieu of such increases, which will vest on May 1, 2021 subject to the recipient's continued employment with us;
−Removed: • On May 1, 2020, we granted PRSUs to our employees that were eligible for a 2020 cash bonus plan in lieu of such cash bonus, which may be earned and become eligible for vesting on May 1, 2021 subject to meeting certain performance conditions and the recipient's continued employment with us.
−Removed: • During the third quarter of 2020, we adjusted our workforce strategy to provide more flexibility for our employees to work remotely when our offices reopen.
−Removed: This change also expands our access to a larger and more diverse talent pool, empowers our leaders to make decisions based on skills and business need rather than location, and it is expected to create efficiencies within our real estate strategy as we optimize our footprint and shift toward more collaborative workspaces within our offices.
−Removed: We currently expect most of the transactions related to these real estate activities will close during the fourth quarter of 2020 with a one-time cash outlay of between $20.0 million and $25.0 million during the third and fourth quarters of 2020.
−Removed: We incurred approximately $6.8 million of pre-tax costs related to these real estate activities during the third quarter of 2020.
−Removed: In addition to the initial actions we have taken to date, we are continuously evaluating further possible actions in order to respond quickly to rapidly changing conditions, if needed.
−Removed: We are experiencing an increase in our aging of receivables and observed changes in some of our customers' payment behavior associated with the COVID-19 pandemic and this development may continue in the near term.
−Removed: We have received short-term payment relief requests as a result of COVID-19, most often in the form of payment deferral requests.
−Removed: We are evaluating each request on a case-by-case basis to assess the customer's ability to pay.
−Removed: Not all customer requests will ultimately result in modified payment terms, nor are we forgoing our contractual rights under customer agreements.
−Removed: During the three and nine months ended September 30, 2020, our bad debt expense increased by $2.4 million and $5.3 million, respectively, compared to the same periods in 2019.
−Removed: We are continually monitoring our customer receivable balances, payment terms, and creditworthiness for changes that could have a significant impact on the collectability of our accounts receivables, our operating results and financial position.
−Removed: At September 30, 2020, our total cash and cash equivalents balance included approximately $17.2 million of cash that was held by operations outside the U.S.
+Added: At March 31, 2021, our total cash and cash equivalents balance included approximately $16.6 million of cash that was held by operations outside the U.S.
While these funds may not be needed to fund our U.S.
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Operating Cash Flow
−Removed: Net cash provided by operating activities decreased by $13.0 million during the nine months ended September 30, 2020, when compared to the same period in 2019, primarily due to a $45.5 million decrease in cash flow from operations associated with working capital, partially offset by a $32.5 million increase in net income adjusted for non-
−Removed: Third Quarter 2020 Form 10-Q
−Removed: Blackbaud, Inc.
−Removed: cash expenses.
+Added: Net cash provided by operating activities increased by $54.6 million during the three months ended March 31, 2021, when compared to the same period in 2020, primarily due to a $46.6 million increase in cash flow from operations associated with working capital and an $8.0 million increase in net income adjusted for non-cash expenses.
Throughout both periods, our cash flows from operations were derived principally from:
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and (ii) changes in our working capital.
−Removed: The increase in net income adjusted for non-cash expenses was primarily from operating cost reductions put in place in response to COVID-19 and the increased use of stock-based compensation in lieu of cash-based compensation.
Working capital changes are composed of changes in accounts receivable, prepaid expenses and other assets, trade accounts payable, accrued expenses and other liabilities, and deferred revenue.
−Removed: The decrease in cash flow from operations associated with working capital during the nine months ended September 30, 2020, when compared to the same period in 2019, was primarily due to:
−Removed: • an increase in current period bonus payments as a result of an increase in amounts accrued as of December 31, 2019 for over-performance against 2019 targets;
−Removed: • a decrease in the current period bonus accrual due to our decision to replace cash payments for our 2020 bonus plans with performance-based equity awards;
−Removed: • an increase in the aging of customer receivable balances primarily due to the COVID-19 pandemic;
+Added: The increase in cash flow from operations associated with working capital during the three months ended March 31, 2021, when compared to the sa me period in 2020, was primarily due to:
+Added: • the payment of our 2019 cash bonus plans in 2020 and the replacement of our 2020 cash bonus plans with performance-based equity awards (which we expect will continue going forward);
+Added: • an increase in the collection of customer receivable balances;
• fluctuations in the timing of vendor payments.
Investing Cash Flow
−Removed: Net cash used in investing activities of $57.9 million decreased by $95.1 million during the nine months ended September 30, 2020, when compared to the same period in 2019.
−Removed: During the nine months ended September 30, 2019, we used net cash of $109.4 million for our acquisition of YourCause and we did not make any similar investments during the same period in 2020.
−Removed: During the nine months ended September 30, 2020, we used $32.0 million for software development costs, which was relatively consistent with cash spent during the same period in 2019.
−Removed: We continue to invest in our innovative cloud solutions, as well as development activities for Blackbaud SKY, our modern cloud platform.
−Removed: We also spent $25.8 million of cash for purchases of property and equipment during the nine months ended September 30, 2020, which was an increase of $16.2 million when compared to the same period in 2019.
−Removed: The additional cash expended was primarily used to purchase our Headquarters Facility.
+Added: Net cash used in investing activities of $12.8 million decreased by $1.0 million during the three months ended March 31, 2021, when compared to the same period in 2020.
+Added: During the three months ended March 31, 2021, we used $9.3 million for software development costs, which was down $1.6 million from cash spent during the same period in 2020, primarily due to lower engineering headcount.
+Added: We increased engineering hiring beginning in the fourth quarter of 2020 and continue to invest in our innovative cloud solutions, as well as development activities for Blackbaud SKY, our modern cloud platform.
+Added: We also spent $3.5 million of cash for purchases of property and equipment during the three months ended March 31, 2021, which was an increase of $0.6 million when compared to the same period in 2020.
Financing Cash Flow
−Removed: During the nine months ended September 30, 2020, we had a net decrease in borrowings of $23.6 million.
−Removed: We paid $21.3 million to satisfy tax obligations of employees upon settlement of equity awards during the nine months ended September 30, 2020 compared to $20.3 million during the same period in 2019.
+Added: During the three months ended March 31, 2021, we had a net increase in borrowings of $21.0 million.
+Added: We paid $18.4 million to satisfy tax obligations of employees upon settlement of equity awards during the three months ended March 31, 2021 compared to $19.8 million during the same period in 2020.
The amount of taxes paid by us on the behalf of employees related to the settlement of equity awards varies from period to period based upon the timing of grants and vesting, as well as the market price for shares of our common stock at the time of settlement.
−Removed: Most of our equity awards currently vest in our first quarter.
−Removed: In addition, during the nine months ended September 30, 2020, we paid dividends of $6.0 million, down from $17.7 million during the same period of 2019, as we discontinued the declaration and payment of all cash dividends, beginning with the second quarter of 2020.
−Removed: Cash used in financing activities associated with changes in restricted cash due to customers increased $121.9 million during the nine months ended September 30, 2020 when compared to the same period in 2019, as the amount of restricted cash held and payable by us to customers as of December 31, 2019 was significantly larger than at the same date in 2018 primarily due to the timing of year-end donations.
−Removed: Additionally, effective August 3, 2020, a significant amount of restricted cash related to charitable giving transacted through our social responsibility and grantmaking solutions is now held and disbursed by the Blackbaud Giving Fund, an independent nonprofit organization, strategic partner of ours, and sponsoring organization for a donor advised fund.
−Removed: This change was made primarily to facilitate faster tax receipts for our customers and their employees.
−Removed: Third Quarter 2020 Form 10-Q
+Added: While most of our equity awards currently vest in our first quarter, the equity awards that we granted in May 2020 to replace our 2020 cash bonus plans and base salary merit increases will vest in May 2021.
+Added: During the three months
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
+Added: ended March 31, 2020, we paid dividends of $6.0 million and we did not pay dividends during the same period in 2021, as we discontinued the declaration and payment of all cash dividends, beginning with the second quarter of 2020.
+Added: Cash used in financing activities associated with changes in restricted cash due to customers increased $42.5 million during the three months ended March 31, 2021 when compared to the same period in 2020, as the amount of restricted cash held and payable by us to customers as of December 31, 2020 was larger than at the same date in 2019 primarily due to the timing of year-end donations.
+Added: Stock repurchase program
+Added: In November 2020, our Board of Directors reauthorized and expanded a stock repurchase program that authorizes us to purchase up to $250.0 million of our outstanding shares of common stock.
+Added: The program does not have an expiration date.
+Added: Under the stock repurchase program, we are authorized to repurchase shares from time to time in accordance with applicable laws both on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and in privately negotiated transactions.
+Added: The timing and amount of repurchases depends on several factors, including market and business conditions, the trading price of our common stock and the nature of other investment opportunities.
+Added: The repurchase program may be limited, suspended or discontinued at any time without prior notice.
+Added: During the three months ended March 31, 2021, we purchased 465,821 shares for $28.1 million.
2020 Credit Facility
−Removed: We have drawn on our credit facility from time to time to help us meet financial needs, such as financing for business acquisitions.
−Removed: At September 30, 2020, our available borrowing capacity under the 2017 Credit Facility was $229.6 million.
−Removed: The 2017 Credit Facility matures in June 2022.
−Removed: At September 30, 2020, the carrying amount of our debt under the 2017 Credit Facility was $444.0 million.
−Removed: Our average daily borrowings during the three and nine months ended September 30, 2020 were $472.7 million and $496.7 million, respectively.
+Added: Historically, we have drawn on our credit facility from time to time to help us meet financial needs, primarily due to the seasonality of our cash flows from operations and financing for business acquisitions.
+Added: At March 31, 2021, our available borrowing capacity under the 2020 Credit Facility was $406.0 million.
+Added: The 2020 Credit Facility matures in October 2025.
+Added: At March 31, 2021, the carrying amount of our debt under the 2020 Credit Facility was $488.8 million.
+Added: Our average daily borrowings during the three months ended March 31, 2021 were $489.5 million.
The following is a summary of the financial covenants under the 2020 Credit Facility:
−Removed: Financial covenant Requirement Ratio as of September 30, 2020
+Added: Financial covenant Requirement Ratio as of March 31, 2021
Net leverage ratio ≤ 4.00 to 1.00 1.79 to 1.00
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(i) no default or event of default shall have occurred and be continuing under the 2020 Credit Facility, and (ii) our pro forma net leverage ratio, as set forth in the 2020 Credit Facility, must be 0.25 less than the net leverage ratio requirement at the time of dividend declaration or share repurchase.
−Removed: At September 30, 2020, we were in compliance with our debt covenants under the 2017 Credit Facility.
−Removed: October 2020 refinancing
−Removed: On October 30, 2020, we entered into the 2020 Credit Facility.
−Removed: The 2020 Credit Facility matures in October 2025 and replaces the 2017 Credit Facility by amending and restating it to (a) increase the amount available under the revolving credit facility to $500.0 million, (b) increase the amount available under the term loan facility to $400.0 million and (c) provide for a net leverage ratio of, (i) commencing with the first fiscal quarter ending December 31, 2020 and through September 30, 2022, 4.00 to 1.00 and (ii) commencing with the fiscal quarter ending December 31, 2022 and thereafter, 3.75 to 1.00, among other changes.
−Removed: See Part II, Item 5.
−Removed: “Other Information” for detailed information relating to the terms of the 2020 Credit Facility.
−Removed: Third Quarter 2020 Form 10-Q
+Added: At March 31, 2021, we were in compliance with our debt covenants under the 2020 Credit Facility.
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
Commitments and Contingencies
−Removed: As of September 30, 2020, we had contractual obligations with future minimum commitments as follows:
+Added: As of March 31, 2021, we had contractual obligations with future minimum commitments as follows:
Payments due by period
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(1) Represents principal payments only, under the following assumptions:
−Removed: (i) that the amounts outstanding under the 2017 Credit Facility, our Real Estate Loans and our other debt at September 30, 2020 will remain outstanding until maturity, with minimum payments occurring as currently scheduled, and (ii) that there are no assumed future borrowings on the 2017 Credit Facility for the purposes of determining minimum commitment amounts.
+Added: (i) that the amounts outstanding under the 2020 Credit Facility, our Real Estate Loans and our other debt at March 31, 2021 will remain outstanding until maturity, with minimum payments occurring as currently scheduled, and (ii) that there are no assumed future borrowings on the 2020 Credit Facility for the purposes of determining minimum commitment amounts.
(2) Represents interest payment obligations related to our interest rate swap agreements.
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In certain cases, these arrangements require a minimum annual purchase commitment by us.
−Removed: The term loan under the 2017 Credit Facility required, and the 2020 Credit Facility (as described below at Part II, Item 5.
−Removed: “Other Information”) requires, periodic principal payments.
−Removed: The balance of the term loans and any amounts drawn on the revolving credit loans previously were due in June 2022 under the 2017 Credit Facility and now will be due in October 2025 under the 2020 Credit Facility.
+Added: The term loan under the 2020 Credit Facility and our other debt require periodic principal payments.
+Added: The balance of the term loans and any amounts drawn on the revolving credit loans are due upon maturity of the 2020 Credit Facility in October 2025.
The Real Estate Loans also require periodic principal payments and the balance of the Real Estate Loans are due upon maturity in April 2038.
−Removed: The total liability for uncertain tax positions as of September 30, 2020 and December 31, 2019, was $4.8 million and $4.3 million, respectively.
−Removed: Our accrued interest and penalties related to tax positions taken on our tax returns was $1.1 million and $1.0 million as of September 30, 2020 and December 31, 2019, respectively.
+Added: The total liability for uncertain tax positions as of March 31, 2021 and December 31, 2020, was $4.6 million and $4.6 million, respectively.
+Added: Our accrued interest and penalties related to tax positions taken on our tax returns was $1.1 million and $1.1 million as of March 31, 2021 and December 31, 2020, respectively.
Off-Balance Sheet Arrangements
−Removed: As of September 30, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
+Added: As of March 31, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Foreign Currency Exchange Rates
−Removed: Approximately 16% of our total revenue for the nine months ended September 30, 2020 was generated from operations outside the U.S.
+Added: Approximately 15% of our total revenue for the three months ended March 31, 2021 was generated from operations outside the U.S.
We do not have significant operations in countries in which the economy is considered to be highly inflationary.
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dollars for purposes of reporting our consolidated financial results.
−Removed: The accumulated currency translation adjustment, recorded within accumulated other comprehensive loss as a component of stockholders’ equity, was a loss of $5.9 million as of September 30, 2020 and a loss of $4.0 million as of December 31, 2019.
−Removed: Third Quarter 2020 Form 10-Q
+Added: The accumulated currency translation adjustment, recorded within accumulated other comprehensive loss as a component of stockholders’ equity, was a gain of $3.1 million as of March 31, 2021 and a gain of $0.6 million as of December 31, 2020.
+Added: First Quarter 2021 Form 10-Q
Blackbaud, Inc.
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dollar strengthened, foreign currency translation resulted in a decrease in our revenue and expenses denominated in non-U.S.
−Removed: During the nine months ended September 30, 2020, foreign translation resulted in decreases in our revenues and expenses denominated in non-U.S.
+Added: During the three months ended March 31, 2021, foreign translation resulted in increases in our revenues and expenses denominated in non-U.S.
Though we have exposure to fluctuations in currency exchange rates, primarily those between the U.S.
dollar and both the British Pound and Canadian dollar, the impact has generally not been material to our consolidated results of operations or financial position.
−Removed: For the nine months ended September 30, 2020, the fluctuation in foreign currency exchange rates reduced our total revenue and our income from operations by $1.5 million and $0.8 million, respectively.
+Added: For the three months ended March 31, 2021, the fluctuation in foreign currency exchange rates increased our total revenue and our income from operations by $2.0 million and $0.7 million, respectively.
We will continue monitoring such exposure and take action as appropriate.
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Critical Accounting Policies and Estimates
−Removed: There have been no significant changes in our critical accounting policies and estimates during the nine months ended September 30, 2020 as compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
+Added: There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2021 as compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Recently Issued Accounting Pronouncements
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.