What changed in this filing

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Item 1. Financial Statements

2022-05-05 compared with 2021-11-04 · 219 added, 280 removed, 458 unchanged (52% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(dollars in thousands) September 30,

(dollars in thousands) March 31,

2022 December 31,

2 unchanged sentences

Restricted cash 279,594 596,616

Accounts receivable, net of allowance of $ 10,847 and $ 10,292 at September 30, 2021 and December 31, 2020, respectively

Accounts receivable, net of allowance of $ 10,772 and $ 11,155 at March 31, 2022 and December 31, 2021, respectively

91,770 102,726

28 unchanged sentences

Common stock, $ 0.001 par value;

180,000,000 shares authorized, 62,353,643 and 60,904,638 shares issued at September 30, 2021 and December 31, 2020, respectively

180,000,000 shares authorized, 67,658,172 and 66,165,666 shares issued at March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital 993,223 968,927

Treasury stock, at cost;

14,039,117 and 12,054,268 shares at September 30, 2021 and December 31, 2020, respectively

14,715,944 and 14,182,805 shares at March 31, 2022 and December 31, 2021, respectively

( 535,585 ) ( 500,911 )

Accumulated other comprehensive income (loss) 3,319 ( 2,497 )

Accumulated other comprehensive income 15,295 6,522

Retained earnings 232,049 242,456

2 unchanged sentences

The accompanying notes are an integral part of these condensed consolidated financial statements.

Third Quarter 2021 Form 10-Q

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

1 unchanged sentence

Three months ended

September 30, Nine months ended

September 30,

(dollars in thousands, except per share amounts) 2022 2021

14 unchanged sentences

Total operating expenses 139,741 109,162

Income from operations 11,846 10,087 31,533 38,093

(Loss) income from operations ( 5,979 ) 6,644

Interest expense ( 7,599 ) ( 5,114 )

Other income, net 862 542 339 2,242

Income before provision for income taxes 8,705 6,632 17,701 28,286

Income tax provision 2,517 1,756 4,946 6,948

Net income $ 6,188 $ 4,876 $ 12,755 $ 21,338

Earnings per share

Other income (expense), net 1,121 ( 1,010 )

(Loss) income before provision for income taxes ( 12,457 ) 520

Income tax (benefit) provision ( 2,050 ) 684

Net loss $ ( 10,407 ) $ ( 164 )

Loss per share

Basic $ ( 0.20 ) $ —

3 unchanged sentences

Diluted weighted average shares 51,199,717 47,363,197

Other comprehensive (loss) income

Other comprehensive income

Foreign currency translation adjustment ( 2,132 ) 2,511

Unrealized gain (loss) on derivative instruments, net of tax 262 943 4,756 ( 1,628 )

Total other comprehensive (loss) income ( 2,972 ) 5,604 5,816 ( 3,582 )

Comprehensive income $ 3,216 $ 10,480 $ 18,571 $ 17,756

Unrealized gain on derivative instruments, net of tax 10,905 4,149

Total other comprehensive income 8,773 6,660

Comprehensive (loss) income $ ( 1,634 ) $ 6,496

The accompanying notes are an integral part of these condensed consolidated financial statements.

Third Quarter 2021 Form 10-Q

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Condensed Consolidated Statements of Cash Flows

Nine months ended

September 30,

Three months ended

(dollars in thousands) 2022 2021

Cash flows from operating activities

Net income $ 12,755 $ 21,338

Adjustments to reconcile net income to net cash provided by operating activities:

Net loss $ ( 10,407 ) $ ( 164 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 25,545 20,461

14 unchanged sentences

Capitalized software development costs ( 12,683 ) ( 9,302 )

Purchase of net assets of acquired companies, net of cash and restricted cash acquired ( 19,985 ) —

Net cash used in investing activities ( 36,934 ) ( 12,772 )

2 unchanged sentences

Payments on debt ( 33,765 ) ( 59,667 )

Debt issuance costs — ( 593 )

Employee taxes paid for withheld shares upon equity award settlement ( 34,674 ) ( 18,426 )

Proceeds from exercise of stock options — 4

Change in due to customers ( 315,294 ) ( 353,597 )

1 unchanged sentence

Purchase of treasury stock — ( 28,066 )

Dividend payments to stockholders — ( 5,960 )

Net cash used in financing activities ( 325,448 ) ( 379,619 )

4 unchanged sentences

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown above in the condensed consolidated statements of cash flows:

(dollars in thousands) September 30,

(dollars in thousands) March 31,

2022 December 31,

3 unchanged sentences

The accompanying notes are an integral part of these condensed consolidated financial statements.

Third Quarter 2021 Form 10-Q

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

10 unchanged sentences

Net loss — — — — — ( 10,407 ) ( 10,407 )

Purchase of 465,821 treasury shares under stock repurchase program

— — — ( 28,066 ) — — ( 28,066 )

Vesting of restricted stock units 206,418 — — — — — —

Employee taxes paid for 240,867 withheld shares upon equity award settlement

Stock issuance costs related to purchase of EVERFI (see Note 3)

— — ( 983 ) — — — ( 983 )

Stock-based compensation — — 29,995 — — 10 30,005

Restricted stock grants 519,009 1 — — — — 1

Restricted stock cancellations ( 34,789 ) — — — — — —

Other comprehensive income — — — — 6,660 — 6,660

Balance at March 31, 2021 61,595,276 $ 62 $ 574,958 $ ( 399,583 ) $ 4,163 $ 236,560 $ 416,160

Net income — — — — — 6,731 6,731

Purchase of 405,047 treasury shares under stock repurchase program

Retirements of common stock (1)

( 33,075 ) — ( 2,581 ) — — — ( 2,581 )

6 unchanged sentences

Other comprehensive income — — — — 8,773 — 8,773

Balance at June 30, 2021 62,332,714 $ 62 $ 605,486 $ ( 449,877 ) $ 6,291 $ 243,312 $ 405,274

Net income — — — — — 6,188 6,188

Purchase of 583,280 treasury shares under stock repurchase program

— — — ( 40,279 ) — — ( 40,279 )

Vesting of restricted stock units 908 — — — — — —

Employee taxes paid for 4,313 withheld shares upon equity award settlement

— — — ( 300 ) — — ( 300 )

Stock-based compensation — — 28,920 — — 6 28,926

Restricted stock grants 54,132 — — — — — —

Restricted stock cancellations ( 34,111 ) — — — — — —

Other comprehensive loss — — — — ( 2,972 ) — ( 2,972 )

Balance at September 30, 2021 62,353,643 $ 62 $ 634,406 $ ( 490,456 ) $ 3,319 $ 249,506 $ 396,837

Third Quarter 2021 Form 10-Q

Blackbaud, Inc.

Condensed Consolidated Statements of Stockholders' Equity (continued)

Balance at March 31, 2022 67,658,172 $ 68 $ 993,223 $ ( 535,585 ) $ 15,295 $ 232,049 $ 705,050

(1) Represents shares retired after determining certain EVERFI's selling shareholders would be paid in cash, rather than shares of our common stock.

See Note 3 for additional information regarding our acquisition of EVERFI.

(dollars in thousands) Common stock Additional

7 unchanged sentences

Balance at December 31, 2020 60,904,638 $ 61 $ 544,963 $ ( 353,091 ) $ ( 2,497 ) $ 236,714 $ 426,150

Net income — — — — — 4,639 4,639

Payment of dividends ($ 0.12 per share)

— — — — — ( 5,960 ) ( 5,960 )

Exercise of stock options and vesting of restricted stock units 210,057 — 1 — — — 1

Employee taxes paid for 245,358 withheld shares upon equity award settlement

— — — ( 19,782 ) — — ( 19,782 )

Stock-based compensation — — 13,539 — — 41 13,580

Restricted stock grants 563,947 1 — — — — 1

Restricted stock cancellations ( 47,456 ) — — — — — —

Other comprehensive loss — — — — ( 8,850 ) — ( 8,850 )

Balance at March 31, 2020 60,932,639 $ 61 $ 471,344 $ ( 310,447 ) $ ( 14,140 ) $ 233,575 $ 380,393

Net income — — — — — 11,823 11,823

Exercise of stock options and vesting of restricted stock units 7,111 — 3 — — — 3

Employee taxes paid for 21,200 withheld shares upon equity award settlement

Net loss — — — — — ( 164 ) ( 164 )

Purchase of 465,821 treasury shares under stock repurchase program

( 28,066 ) — — ( 28,066 )

Stock-based compensation — — 20,103 — — 30 20,133

Restricted stock grants 20,776 — — — — — —

Restricted stock cancellations ( 59,426 ) — — — — — —

Other comprehensive loss — — — — ( 336 ) — ( 336 )

Balance at June 30, 2020 60,901,100 $ 61 $ 491,450 $ ( 311,661 ) $ ( 14,476 ) $ 245,428 $ 410,802

Net income — — — — — 4,876 4,876

Vesting of restricted stock units 206,418 — — — — — —

5 unchanged sentences

Other comprehensive income — — — — 6,660 — 6,660

Balance at September 30, 2020 60,903,925 $ 61 $ 512,269 $ ( 311,951 ) $ ( 8,872 ) $ 250,328 $ 441,835

Balance at March 31, 2021 61,595,276 $ 62 $ 574,958 $ ( 399,583 ) $ 4,163 $ 236,560 $ 416,160

The accompanying notes are an integral part of these condensed consolidated financial statements.

Third Quarter 2021 Form 10-Q

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

2 unchanged sentences

Serving the entire social good community—nonprofits, higher education institutions, K–12 schools, healthcare organizations, faith communities, arts and cultural organizations, foundations, companies and individual change agents—we connect and empower organizations to increase their impact through cloud software, services, expertise and data intelligence.

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.

Serving the industry for 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 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 (CSR) and environmental, social and governance (ESG), school management, ticketing, grantmaking, financial management, payment processing and analytics.

Serving the industry for more than four decades, we are a remote-first company headquartered in Charleston, South Carolina, with operations in the United States, Australia, Canada, Costa Rica and the United Kingdom.

Basis of Presentation

3 unchanged sentences

The consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date.

Operating results and cash flows for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021, or any other future period.

Operating results and cash flows for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022, or any other future period.

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations for interim reporting of the SEC.

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Our chief operating decision maker uses consolidated financial information to make operating decisions, assess financial performance and allocate resources.

Our chief operating decision maker is our chief executive officer ("CEO").

As discussed in Note 13, beginning in the second quarter of 2021, we combined our General Markets Group ("GMG") and Enterprise Markets Group ("EMG") into a single U.S.

Our chief operating decision maker is our chief executive officer.

As discussed in Note 13 to these condensed consolidated financial statements, beginning in the second quarter of 2021, we combined our General Markets Group ("GMG") and Enterprise Markets Group ("EMG") into a single U.S.

Markets Group ("UMG") and moved our Corporations vertical under our International Markets Group ("IMG").

This change was made to better align our resources toward customer retention and growth which, are key objectives as we progress toward our long-term aspirational goals.

The change did not impact our conclusions that we have one operating and reportable segment and one goodwill reporting unit.

Third Quarter 2021 Form 10-Q

We also acquired EVERFI (as defined below) as of December 31, 2021.

As we are working to integrate EVERFI into our business, it has not yet been included in one of our market groups.

These changes did not impact our conclusions that we have one operating and reportable segment and one goodwill reporting unit.

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

10 unchanged sentences

Summary of significant accounting policies

There have been no new or material changes to our significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 23, 2021.

There have been no material changes to our significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022.

Business Combinations

2021 Acquisition

On December 31, 2021, we acquired all of the outstanding equity securities, including all voting equity interests, of EVERFI, Inc., a Delaware corporation ("EVERFI"), pursuant to an agreement and plan of merger.

The acquisition advanced our position as a leader in the rapidly evolving ESG and CSR spaces.

We acquired the equity securities for approximately $ 442.7 million in cash consideration and 3,811,348 shares of the company's common stock, valued at approximately $ 301.1 million, for an aggregate purchase price of approximately $ 743.8 million, subject to closing adjustments.

The cash consideration and related expenses were funded primarily through cash on hand and new borrowings under the 2020 Credit Facility (as defined below).

As a result of the acquisition, EVERFI has become a wholly owned subsidiary of ours.

The operating results of EVERFI have been included in our consolidated financial statements from the date of acquisition.

In accordance with applicable accounting rules, we determined that the impact of this acquisition was not material to our consolidated financial statements;

therefore, revenue and earnings since the acquisition date and pro forma information are not required to be presented.

The fair values assigned to the assets acquired and liabilities assumed in our acquisition of EVERFI are based on our best estimates and assumptions as of the reporting date and are considered preliminary pending finalization.

The estimates and assumptions are subject to change as we obtain additional information during the measurement period, which may be up to one year from the acquisition date.

The assets and liabilities, pending finalization, include the valuation of intangible assets as well as the assumed deferred income tax balances.

During the three months ended March 31, 2022, we recorded an insignificant measurement period adjustment to the estimated fair value of the EVERFI assets acquired and liabilities assumed following the receipt of new information.

The adjustment resulted in an increase to net working capital, excluding deferred revenue, with the corresponding offset to goodwill.

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Goodwill and Other Intangible Assets

The change in goodwill during the nine months ended September 30, 2021, consisted of the following:

The change in goodwill during the three months ended March 31, 2022, consisted of the following:

(dollars in thousands) Total

Balance at December 31, 2021 $ 1,058,640

Adjustments related to prior year business combinations (1)

Effect of foreign currency translation ( 1,643 )

Balance at September 30, 2021 $ 635,912

Earnings Per Share

We compute basic earnings per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period.

Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares and dilutive potential common shares outstanding during the period.

Diluted earnings per share reflect the assumed exercise, settlement and vesting of all dilutive securities using the “treasury stock method” except when the effect is anti-dilutive.

Balance at March 31, 2022 $ 1,056,794

(1) See Note 3 to these condensed consolidated financial statements for a discussion of the measurement period adjustment during the three months ended March 31, 2022 to the estimated fair value of the EVERFI assets acquired and liabilities assumed.

Loss Per Share

We compute basic earnings (loss) per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period.

Diluted earnings (loss) per share is computed by dividing net income available to common stockholders by the weighted average number of common shares and dilutive potential common shares outstanding during the period.

Diluted earnings (loss) per share reflect the assumed exercise, settlement and vesting of all dilutive securities using the “treasury stock method” except when the effect is anti-dilutive.

Potentially dilutive securities consist of shares issuable upon the exercise of stock options, settlement of stock appreciation rights and vesting of restricted stock awards and units.

Third Quarter 2021 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

The following table sets forth the computation of basic and diluted earnings per share:

Diluted loss per share for the three months ended March 31, 2022 was the same as basic loss per share as there was a net loss in the period and inclusion of potentially dilutive securities was anti-dilutive.

The following table sets forth the computation of basic and diluted earnings (loss) per share:

Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands, except per share amounts) 2022

Net income $ 6,188 $ 4,876 $ 12,755 $ 21,338

Net loss $ ( 10,407 ) $ ( 164 )

Weighted average common shares 51,199,717 47,363,197

6 unchanged sentences

Anti-dilutive shares excluded from calculations of diluted earnings per share 1,558,751 1,360,378

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Fair Value Measurements

8 unchanged sentences

(dollars in thousands) Level 1 Level 2 Level 3 Total

Fair value as of September 30, 2021

Fair value as of March 31, 2022

Financial assets:

2 unchanged sentences

Fair value as of December 31, 2021

Financial liabilities:

Financial assets:

Derivative instruments $ — $ 7,160 $ — $ 7,160

Total financial liabilities $ — $ 4,159 $ — $ 4,159

Third Quarter 2021 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Total financial assets $ — $ 7,160 $ — $ 7,160

Our derivative instruments within the scope of Accounting Standards Codification ("ASC") 815, Derivatives and Hedging , are required to be recorded at fair value.

Our derivative instruments that are recorded at fair value include interest rate swaps.

See Note 8 for additional information about our derivative instruments.

See Note 9 to these condensed consolidated financial statements for additional information about our derivative instruments.

The fair value of our interest rate swaps was based on model-driven valuations using LIBOR rates, which are observable at commonly quoted intervals.

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We do not currently anticipate a significant impact to our financial position or results of operations as a result of this action as we expect that our financial contracts currently indexed to LIBOR will either expire or be modified without significant financial impact before the p hase out occurs.

We believe the carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, accrued expenses and other current liabilities and due to customers approximate their fair values at September 30, 2021 and December 31, 2020, due to the immediate or short-term maturity of these instruments.

We believe the carrying amount of our debt approximates its fair value at September 30, 2021 and December 31, 2020, as the debt bears interest rates that approximate market value.

As LIBOR rates are observable at commonly quoted intervals, our debt under the 2020 Credit Facility (as defined below) is classified within Level 2 of the fair value hierarchy.

We believe the carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, accrued expenses and other current liabilities and due to customers approximate their fair values at March 31, 2022 and December 31, 2021, due to the immediate or short-term maturity of these instruments.

We believe the carrying amount of our debt approximates its fair value at March 31, 2022 and December 31, 2021, as the debt bears interest rates that approximate market value.

As LIBOR and SOFR rates are observable at commonly quoted intervals, our debt under the 2020 Credit Facility (as defined below) is classified within Level 2 of the fair value hierarchy.

Our fixed rate debt is also classified within Level 2 of the fair value hierarchy.

We did not transfer any assets or liabilities among the levels within the fair value hierarchy during the nine months ended September 30, 2021.

Additionally, we did not hold any Level 3 assets or liabilities during the nine months ended September 30, 2021.

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

We did not transfer any assets or liabilities among the levels within the fair value hierarchy during the three months ended March 31, 2022.

Additionally, we did not hold any Level 3 assets or liabilities during the three months ended March 31, 2022.

Non-recurring fair value measurements

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For goodwill impairment testing, we estimate fair value using market-based methods including the use of market capitalization and consideration of a control premium.

There were no material non-recurring fair value adjustments to our long-lived assets, intangible assets, goodwill and operating lease ROU assets during the nine months ended September 30, 2021 .

There were no material non-recurring fair value adjustments to our long-lived assets, intangible assets, goodwill and operating lease ROU assets during the three months ended March 31, 2022 .

Consolidated Financial Statement Details

Restricted cash

(dollars in thousands) September 30,

(dollars in thousands) March 31,

2022 December 31,

Restricted cash due to customers $ 276,130 $ 593,296

Letters of credit for operating leases 2,193 2,256

Real estate escrow balances 1,271 1,064

Total restricted cash $ 279,594 $ 596,616

Third Quarter 2021 Form 10-Q

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

1 unchanged sentence

Prepaid expenses and other assets

(dollars in thousands) September 30,

(dollars in thousands) March 31,

2022 December 31,

3 unchanged sentences

33,950 28,880

Derivative instruments 21,947 7,160

Receivables for probable insurance recoveries (4)(5)

12,715 18,202

Implementation costs for cloud computing arrangements, net (6)(7)

11,354 11,892

Unbilled accounts receivable 6,302 10,385

Prepaid insurance 11,237 5,363

Derivative instruments 2,283 —

Unbilled accounts receivable 5,545 5,443

Taxes, prepaid and receivable 4,006 3,986

Deferred tax assets 1,569 1,546

Other assets 11,302 11,835

2 unchanged sentences

Prepaid expenses and other current assets $ 99,913 $ 95,506

(1) Amortization expense from costs of obtaining contracts was $ 8.8 million and $ 26.9 million for the three and nine months ended September 30, 2021, respectively, and $ 9.4 million and $ 28.2 million for the three and nine months ended September 30, 2020, respectively.

(2) The current portion of costs of obtaining contracts as of September 30, 2021 and December 31, 2020 was $ 30.3 million and $ 31.9 million, respectively.

(3) The current portion of prepaid software maintenance and subscriptions as of September 30, 2021 and December 31, 2020 was $ 25.4 million and $ 19.8 million, respectively.

(1) Amortization expense from costs of obtaining contracts was $ 8.5 million and $ 9.2 million for the three months ended March 31, 2022 and 2021, respectively.

(2) The current portion of costs of obtaining contracts as of March 31, 2022 and December 31, 2021 was $ 29.7 million and $ 30.2 million, respectively.

(3) The current portion of prepaid software maintenance and subscriptions as of March 31, 2022 and December 31, 2021 was $ 29.8 million and $ 24.7 million, respectively.

(4) All receivables for probable insurance recoveries are classified as current.

(5) See discussion of the Security Incident at Note 9.

(5) See discussion of the Security Incident at Note 10 to these condensed consolidated financial statements.

(6) These costs primarily relate to the multi-year implementations of our new global enterprise resource planning and customer relationship management systems.

(7) Amortization expense from capitalized cloud computing implementation costs was insignificant and $ 1.3 million for the three and nine months ended September 30, 2021, respectively, and insignificant for the three and nine months ended September 30, 2020.

Accumulated amortization for these costs was $ 2.5 million as of September 30, 2021 and $ 1.1 million as of December 31, 2020.

(7) Amortization expense from capitalized cloud computing implementation costs was insignificant for the three months ended March 31, 2022 and 2021.

Accumulated amortization for these costs was $ 3.5 million and $ 3.0 million as of March 31, 2022 and December 31, 2021, respectively.

Accrued expenses and other liabilities

(dollars in thousands) September 30,

(dollars in thousands) March 31,

2022 December 31,

Accrued legal costs (1)

$ 21,341 $ 4,808

Taxes payable (1)

$ 23,305 $ 19,777

Accrued legal costs (2)

12,208 11,724

Operating lease liabilities, current portion 8,930 9,170

1 unchanged sentence

Accrued commissions and salaries 4,656 7,872

Unrecognized tax benefit 3,656 3,351

Accrued health care costs 2,601 3,042

Accrued vacation costs 2,210 2,234

Derivative instruments — 4,159

Accrued bonuses 1,460 5,829

Accrued transaction-based costs related to payments services 1,418 5,427

Unrecognized tax benefit 1,409 1,248

Amounts payable to former EVERFI option holders (3)

Other liabilities 8,101 9,310

2 unchanged sentences

Accrued expenses and other current liabilities $ 72,195 $ 100,096

(1) We deferred payments of the employer's portion of Social Security taxes during 2020 under the Coronavirus, Aid, Relief and Economic Security Act, half of which was due by the end of calendar year 2021 with the remainder due by the end of calendar year 2022.

(2) All accrued legal costs are classified as current.

The increase in accrued legal costs from December 31, 2020 was primarily due to the Security Incident.

(2) We deferred payments of the employer's portion of Social Security taxes during 2020 under the Coronavirus, Aid, Relief and Economic Security Act ("CARES Act"), half of which was due by the end of calendar year 2021 with the remainder due by the end of calendar year 2022.

Third Quarter 2021 Form 10-Q

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Other income, net

Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands) 2021

Interest income $ 82 $ 767 $ 311 $ 1,399

Other income (expense), net 780 ( 225 ) 28 843

Other income, net $ 862 $ 542 $ 339 $ 2,242

(3) Represents amounts that had not been paid by EVERFI to its former option holders as of December 31, 2021, solely due to the timing of the acquisition on the last day of 2021.

See Note 3 to these condensed consolidated financial statements for additional information regarding our acquisition of EVERFI.

The following table summarizes our debt balances and the related weighted average effective interest rates, which includes the effect of interest rate swap agreements.

1 unchanged sentence

effective interest rate at

(dollars in thousands) September 30,

(dollars in thousands) March 31,

2022 December 31,

2020 September 30,

2021 March 31,

2022 December 31,

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In October 2020, we entered into a five-year $ 900.0 million senior credit facility (the "2020 Credit Facility").

At September 30, 2021, we were in compliance with our debt covenants under the 2020 Credit Facility.

At March 31, 2022, we were in compliance with our debt covenants under the 2020 Credit Facility.

First incremental term loan

In December 2021, we entered into the First Incremental Term Loan Agreement (the "Incremental Amendment").

The Incremental Amendment amended the 2020 Credit Facility and, among other things, provided for a $ 250.0 million incremental term loan (the “2021 Incremental Term Loan”).

Financing for EVERFI acquisition

On December 31, 2021, we acquired EVERFI for approximately $ 442.7 million in cash consideration and 3,811,348 shares of the company's common stock, valued at approximately $ 301.1 million, for an aggregate purchase price of approximately $ 743.8 million, subject to closing adjustments.

We financed the cash consideration and related expenses through cash on hand and new borrowings u nder the 2020 Credit Facility , including $ 250.0 million under the 2021 Incremental Term Loan (as defined above).

First amendment to 2020 Credit Facility

On January 31, 2022, we entered into the First Amendment to Credit Agreement (the “Amendment”).

The Amendment amended the 2020 Credit Facility to, among other things, (i) modify the definition of “Applicable Margin”, (ii) modify the net leverage ratio financial covenant to require a net leverage ratio of (A) 4.00 :1.00 or less for the fiscal quarter ended December 31, 2021 and for fiscal quarters ending thereafter through December 31, 2023 and (B) 3.75 :1.00 or less for the fiscal quarters ending March 31, 2024 and thereafter, (iii) reset the $ 250.0 million fixed dollar basket with respect to the accordion feature and (iv) modify certain negative covenants to provide additional operational flexibility.

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Real estate loans

In August 2020, we completed the purchase of our global headquarters facility.

As part of the purchase price, we assumed the Seller’s obligations under two senior secured notes with an aggregate outstanding principal amount of $ 61.1 million (collectively, the “Real Estate Loans”).

At September 30, 2021, we were in compliance with our debt covenants under the Real Estate Loans.

As part of the purchase price, we assumed the seller’s obligations under two senior secured notes with a then-aggregate outstanding principal amount of $ 61.1 million (collectively, the “Real Estate Loans”).

At March 31, 2022, we were in compliance with our debt covenants under the Real Estate Loans.

From time to time, we enter into third-party financing agreements for purchases of software and related services for our internal use.

1 unchanged sentence

Interest associated with the notes is imputed at the rate we would incur for amounts borrowed under our then-existing credit facility at the inception of the notes.

The following table summarizes our currently effective financing agreements as of September 30, 2021:

The following table summarizes our currently effective financing agreements as of March 31, 2022:

(dollars in thousands) Term

4 unchanged sentences

December 2019 51 4 January 2020 $ 2,150

January 2020 39 3 March 2020 3,470

Third Quarter 2021 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Derivative Instruments

3 unchanged sentences

We designated each of the interest rate swap agreements as a cash flow hedge at the inception of the contracts.

The terms and notional values of our derivative instruments were as follows as of September 30, 2021:

The terms and notional values of our derivative instruments were as follows as of March 31, 2022:

(dollars in thousands) Term of derivative instrument Notional

6 unchanged sentences

The fair values of our derivative instruments were as follows as of:

Asset derivatives Liability derivatives

(dollars in thousands) Balance sheet location September 30,

2021 December 31,

2020 Balance sheet location September 30,

Asset derivatives

(dollars in thousands) Balance sheet location March 31,

2022 December 31,

Derivative instruments designated as hedging instruments:

Interest rate swaps, current portion Prepaid expenses

current assets $ — $ — Accrued expenses

current liabilities $ — $ 2,698

Interest rate swaps, long-term portion Other assets 2,283 — Other liabilities — 1,461

Interest rate swaps, long-term

Other assets 21,947 7,160

Total derivative instruments designated as hedging instruments $ 21,947 $ 7,160

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

The effects of derivative instruments in cash flow hedging relationships were as follows:

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other comprehensive loss into income

(dollars in thousands) September 30,

(dollars in thousands) March 31,

2022 Three months ended

September 30, 2021

Nine months ended

September 30, 2021

March 31, 2022

Interest rate swaps $ 21,947 Interest expense $ ( 358 )

September 30,

2021 Three months ended

September 30, 2020

Nine months ended

September 30, 2020

March 31, 2021

Interest rate swaps $ 1,420 Interest expense $ ( 1,376 )

Third Quarter 2021 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Our policy requires that derivatives used for hedging purposes be designated and effective as a hedge of the identified risk exposure at the inception of the contract.

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Changes in the fair value measurements of the derivative instruments and the related income tax expense or benefit are reflected as adjustments to accumulated other comprehensive income (loss) until the actual hedged expense is incurred or until the hedge is terminated at which point the unrealized gain (loss) is reclassified from accumulated other comprehensive income (loss) to current earnings.

The estimated accumulated other comprehensive loss as of September 30, 2021 that is expected to be reclassified into earnings within the next twelve months is $ 1.4 million.

There were no ineffective portions of our interest rate swap derivatives during the nine months ended September 30, 2021 and 2020.

The estimated accumulated other comprehensive income as of March 31, 2022 that is expected to be reclassified into earnings within the next twelve months is $ 5.7 million.

There were no ineffective portions of our interest rate swap derivatives during the three months ended March 31, 2022 and 2021.

See Note 12 for a summary of the changes in accumulated other comprehensive income (loss) by component.

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We have operating leases for corporate offices, subleased offices and certain equipment and furniture.

As of September 30, 2021, we did not have any operating leases that had not yet commenced.

The components of lease expense were as follows:

As of March 31, 2022, we did not have any operating leases that had not yet commenced.

The following table summarizes the components of our lease expense:

Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands) 2022

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(1) Includes short-term lease costs, which were immaterial.

See Note 14 for a discussion of the workforce strategy actions we took during October 2021.

Other commitments

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In certain cases, these arrangements require a minimum annual purchase commitment by us.

As of September 30, 2021, the remaining aggregate minimum purchase commitment under these arrangements was approximately $ 39.7 million through 2024.

As of March 31, 2022, the remaining aggregate minimum purchase commitment under these arrangements was approximately $ 31.7 million through 2025.

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Solution and service indemnifications

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We have not identified any losses and, accordingly, we have not recorded a liability related to these indemnifications.

Third Quarter 2021 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Legal proceedings

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As noted below, this coverage has reduced our fina ncial exposure related to the Security Incident, and we will continue to seek recoveries under these insurance policies.

Based on our review of expenses incurred to date, and upon consideration of the number of matters outstanding (as described below), w e believe that total costs related to the Security Incident will exceed the limits of our insurance coverage during the fourth quarter of 2021.

However, we are currently unable to estimate the approximate amount or range of any such excess.

In the three and nine months ended September 30, 2021, we recorded $ 11.4 million and $ 35.9 million, respectively, of expenses related to the Security Incident and offsetting probable insurance recoveries of $ 10.6 million and $ 34.5 million, respectively.

As of September 30, 2021, we have recorded cumulative expenses related to the Security Incident of $ 45.7 million and cumulative probable insurance recoveries of $ 43.9 million.

Due to the time required to submit and process such insurance claims, we have not yet received all of the accrued insurance recoveries.

Of the insurance recoveries recorded, $ 18.0 million had been paid as of September 30, 2021.

Recorded expenses consisted primarily of payments for legal fees related to governmental inquiries and investigations and customer constituent class actions.

We present expenses and insurance recoveries related to the Security Incident in general and administrative expense on o ur condensed consolidated statements of comprehensive income and as operating activities on our condensed consolidated statements of cash flows.

We expect to continue to experience significant expenses related to our response to the Security Incident, resolution of legal proceedings, claims, inquiries and investigations discussed below, and our efforts to further enhance our security measures, and those expenses may be material.

Based on our analysis of the factors described above, we have not recorded a liability related to the Security Incident as of September 30, 2021 because we are unable at this time to reasonably estimate the possible loss or range of loss.

Third Quarter 2021 Form 10-Q

We recorded expenses and offsetting probable insurance recoveries related to the Security Incident as follows:

Three months ended

(dollars in thousands) 2022

Gross expense $ 9,005 $ 12,814

Offsetting probable insurance recoveries ( 1,804 ) ( 12,813 )

Net expense $ 7,201 $ 1

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

The following summarizes our cumulative expenses, probable insurance recoveries and insurance recoveries paid as of:

(dollars in thousands) March 31,

2022 December 31,

Cumulative gross expense $ 59,396 $ 50,391

Cumulative offsetting insurance recoveries ( 49,913 ) ( 48,109 )

Cumulative net expense $ 9,483 $ 2,282

Cumulative offsetting insurance recoveries paid $ ( 37,277 ) $ ( 29,968 )

Due to the time required to submit and process such insurance claims, we have not yet received all of the accrued insurance recoveries.

Recorded expenses consisted primarily of payments for legal fees related to governmental inquiries and investigations and customer constituent class actions.

We present expenses and insurance recoveries related to the Security Incident in general and administrative expense on o ur consolidated statements of comprehensive income and as operating activities on our consolidated statements of cash flows.

T otal costs related to the Security Incident that we expect will be recoverable exceeded the limit of our insurance coverage during the first quarter of 2022.

For full year 2022, we currently expect net cash outlays of approximately $ 25.0 million to $ 35.0 million for ongoing legal fees related to the Security Incident.

In line with our policy as discussed above, legal fees are expensed as incurred.

Based on our analysis of the factors described above, we have not recorded a liability for a loss contingency related to the Security Incident as of March 31, 2022 because we are unable at this time to reasonably estimate the possible loss or range of loss.

Customer claims.

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In addition, insurance companies representing various customers’ interests through subrogation claims have contacted us.

One insurance company has filed a subrogation claim in court.

Customer and insurer subrogation claims generally seek reimbursement of their costs and expenses associated with notifying their own customers of the Security Incident and taking steps to assure that personal information has not been compromised as a result of the Security Incident.

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As a result of these uncertainties, we may be unable to determine the probability of loss until, or after, a court has finally determined that a plaintiff has satisfied the applicable class action procedural requirements.

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Furthermore, for putative class actions, it is often not possible to estimate the possible loss or a range of loss amounts, even where we have determined that a loss is reasonably possible.

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Governmental inquiries and investigations.

To date, we have received a consolidated, multi-state Civil Investigative Demand issued on behalf of 48 state Attorneys General and the District of Columbia and separate Civil Investigative Demands from the offices of the Illinois Attorney General and the California Attorney General relating to the Security Incident.

In addition, we have received communications, inquires and requests from the U.S.

Federal Trade Commission, the SEC, the U.S.

Department of Health and Human Services, the Information Commissioner’s Office in the United Kingdom under the U.K.

Data Protection Act 2018 (the "ICO", the Office of the Australian Information Commissioner, the Office of the Privacy Commissioner of Canada, the Spanish Data Protection Authority, and the Data Protection Commission of Ireland).

On September 28, 2021, the ICO notified us that it has closed its investigation of the Security Incident.

To date, we have received a consolidated, multi-state Civil Investigative Demand issued on behalf of 49 state Attorneys General and the District of Columbia and a separate Civil Investigative Demand from the office of the California Attorney General relating to the Security Incident.

We also are subject to the following pending governmental actions:

• an investigation by the U.S.

Federal Trade Commission;

• a formal investigation by the SEC;

• an investigation by the U.S.

Department of Health and Human Services;

• an investigation by the Office of the Australian Information Commissioner;

• an investigation by the Office of the Privacy Commissioner of Canada.

On September 28, 2021, the Information Commissioner's Office in the United Kingdom under the U.K Data Protection Act 2018 (the "ICO") notified us that it has closed its investigation of the Security Incident.

Based on its investigation and having considered our actions before, during and after the Security Incident, the ICO issued our European subsidiary a reprimand in accordance with Article 58(2)(b) of the U.K.

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On January 15, 2021, we were notified by the Data Protection Commission of Ireland that it has concluded its investigation of the Security Incident without taking any action against us.

Third Quarter 2021 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

We continue to cooperate with all ongoing inquiries and investigations, which include various requests for documents, policies, narratives and communications, as well as requests to interview or depose various Company-related personnel.

As noted above, each of these separate governmental inquiries and investigations could result in adverse judgements, settlements, fines, penalties, or other resolution, the amount, scope and timing of which we are currently unable to predict, but could have a material adverse impact on our results of operations, cash flows, or financial condition.

Our income tax provision and effective income tax rates, including the effects of period-specific events, were:

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Our income tax (benefit) provision and effective income tax rates, including the effects of period-specific events, were:

Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands) 2022

Income tax provision $ 2,517 $ 1,756 $ 4,946 $ 6,948

Income tax (benefit) provision $ ( 2,050 ) $ 684

Effective income tax rate 16.5 % 131.5 %

The increase in our effective income tax rate for the three months ended September 30, 2021, when compared to the same period in 2020, was primarily attributable to higher 2021 non-deductible stock-based compensation and reduced state tax credits.

Furthermore, the 2020 effective tax rate was positively impacted by a favorable return to provision adjustment offset against tax expense attributable to a corporate income tax rate increase enacted during the period.

The increase in our effective income tax rate for the nine months ended September 30, 2021 when compared to the same period in 2020, was primarily attributable to the impact of non-deductible expenses against lower pre-tax income.

Stock-based Compensation

Stock-based compensation expense is allocated to cost of revenue and operating expenses on the condensed consolidated statements of comprehensive income based on where the associated employee’s compensation is recorded.

The following table summarizes stock-based compensation expense:

Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands) 2021

Included in cost of revenue:

Cost of recurring $ 2,997 $ 1,608 $ 8,900 $ 3,229

Cost of one-time services and other 1,266 2,080 5,958 3,894

Total included in cost of revenue 4,263 3,688 14,858 7,123

Included in operating expenses:

Sales, marketing and customer success 4,942 4,004 15,048 10,085

Research and development 6,110 4,098 19,725 11,245

General and administrative 13,611 9,053 39,849 26,103

Total included in operating expenses 24,663 17,155 74,622 47,433

Total stock-based compensation expense $ 28,926 $ 20,843 $ 89,480 $ 54,556

Third Quarter 2021 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

For the three months ended March 31, 2022, we have utilized the discrete effective tax rate method, as allowed by ASC 740-270-30-18, Income Taxes—Interim Reporting , to calculate our interim income tax provision.

The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate.

The discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis.

We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as our full-year forecasted pre-tax income, relative to our forecasted permanent differences, has the potential to distort our estimated annual effective tax rate.

The decrease in our effective income tax rate for the three months ended March 31, 2022 when compared to the same period in 2021 was primarily attributable to the impact of stock based compensation.

The 2022 effective tax rate was negatively impacted by increased tax expense attributable to stock based compensation against pre-tax loss for the period.

Stockholders' Equity

Stock repurchase program

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.

The program does not have an expiration date.

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.

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.

The repurchase program may be limited, suspended or discontinued at any time without prior notice.

Under the 2020 Credit Facility, we have restrictions on our ability to repurchase shares of our common stock, which are summarized on page 42 below.

We account for purchases of treasury stock under the cost method.

During the three and nine months ended September 30, 2021, we purchased 583,280 and 1,454,148 shares for $ 40.3 million and $ 98.4 million, respectively.

The remaining amount available to purchase stock under the stock repurchase program was $ 110.6 million as of September 30, 2021.

Changes in accumulated other comprehensive income (loss) by component

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Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands) 2022

4 unchanged sentences

Other comprehensive income (loss) before reclassifications, net of tax effects of $( 3,789 ) and $( 1,100 )

( 109 ) 1 2,329 ( 3,472 )

Amounts reclassified from accumulated other comprehensive (loss) income to interest expense 505 1,276 3,289 2,499

Amounts reclassified from accumulated other comprehensive income to interest expense 358 1,376

Tax benefit included in provision for income taxes ( 94 ) ( 357 )

Total amounts reclassified from accumulated other comprehensive (loss) income 371 942 2,427 1,844

Net current-period other comprehensive income (loss) 262 943 4,756 ( 1,628 )

Accumulated other comprehensive income (loss) balance, end of period $ 1,655 $ ( 2,951 ) $ 1,655 $ ( 2,951 )

Total amounts reclassified from accumulated other comprehensive income 264 1,019

Net current-period other comprehensive income 10,905 4,149

Accumulated other comprehensive income balance, end of period $ 16,162 $ 1,048

Foreign currency translation adjustment:

Accumulated other comprehensive income (loss) balance, beginning of period $ 4,898 $ ( 10,582 ) $ 604 $ ( 3,967 )

Accumulated other comprehensive income balance, beginning of period $ 1,265 $ 604

Translation adjustments ( 2,132 ) 2,511

Accumulated other comprehensive income (loss) balance, end of period 1,664 ( 5,921 ) 1,664 ( 5,921 )

Accumulated other comprehensive income (loss), end of period $ 3,319 $ ( 8,872 ) $ 3,319 $ ( 8,872 )

Third Quarter 2021 Form 10-Q

Accumulated other comprehensive (loss) income balance, end of period ( 867 ) 3,115

Accumulated other comprehensive income, end of period $ 15,295 $ 4,163

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

2 unchanged sentences

Transaction price allocated to the remaining performance obligations

As of September 30, 2021, approximately $ 821 million of revenue is expected to be recognized from remaining performance obligations.

As of March 31, 2022, approximately $ 984 million of revenue is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 60 % of these remaining performance obligations over the next 12 months, with the remainder recognized thereafter.

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Contract balances

Our contract assets as of September 30, 2021 and December 31, 2020 were insignificant.

Our contract assets as of March 31, 2022 and December 31, 2021 were insignificant.

Our opening and closing balances of deferred revenue were as follows:

(in thousands) September 30,

(in thousands) March 31,

2022 December 31,

Total deferred revenue $ 355,677 $ 378,746

The increase in deferred revenue during the nine months ended September 30, 2021 was primarily due to a seasonal increase in customer contract renewals and, to a lesser extent, early progress in initiatives to bring our pricing in line with the market .

The decrease in deferred revenue during the three months ended March 31, 2022 was primarily due to a seasonal decrease in customer contract renewals.

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.

The amount of revenue recognized during the nine months ended September 30, 2021 that was included in the deferred reven ue balance at the beginning of the period was approximately $ 270 million.

The amount of revenue recognized during the nine months ended September 30, 2021 from performance obligations satisfied in prior periods was insignificant.

Generally, our lowest balance of deferred revenue during the year is at the end of our first quarter.

The amount of revenue recognized during the three months ended March 31, 2022 that was included in the deferred reven ue balance at the beginning of the period was approximately $ 152 million.

The amount of revenue recognized during the three months ended March 31, 2022 from performance obligations satisfied in prior periods was insignificant.

Disaggregation of revenue

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Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands) 2022

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This change was made to better align our resources toward customer retention and growth, which are key objectives as we progress toward our long-term aspirational goals.

The UMG and the IMG comprised our go-to-market organizations as of September 30, 2021 .

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

The UMG, IMG and EVERFI comprised our go-to-market organizations as of March 31, 2022.

The following is a description of each market group as of that date:

1 unchanged sentence

• The IMG focuses on sales primarily to all prospects and customers outside of the U.S, as well as corporations.

Third Quarter 2021 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

• We acquired EVERFI as of December 31, 2021 as discussed in Note 3 to these condensed consolidated financial statements.

As we are working to integrate EVERFI into our business, it has not yet been included in one of our market groups.

The following table presents our revenue by market group:

Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands) 2022

3 unchanged sentences

Total revenue $ 257,124 $ 219,191

(1) Due to the market group change discussed above, we have recast our revenue by market group for the three and nine months ended September 30, 2020 to present them on a consistent basis with the current year.

(1) Due to the market group change discussed above, we have recast our revenue by market group for the three months ended March 31, 2021 to present them on a consistent basis with the current year.

The following table presents our recurring revenue by type:

Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands) 2022

2 unchanged sentences

Total recurring revenue $ 244,666 $ 206,750

Subsequent Events

Workforce strategy actions

In October 2021, we made the decision to permanently close our fixed office locations (with the exception of our global headquarters facility in Charleston, South Carolina), effective December 1, 2021.

This change was intended to align our real estate footprint with our transition to a remote-first workforce.

We may enter into arrangements for smaller more flexible workspaces where necessary.

We currently expect to incur between $ 13.0 million and $ 14.0 million of pre-tax costs related to these actions during the fourth quarter of 2021.

We expect that the costs associated with these actions will be largely noncash impairment charges, primarily for operating lease ROU assets in the office locations we have determined to exit.

Third Quarter 2021 Form 10-Q

First Quarter 2022 Form 10-Q

Blackbaud, Inc.

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.

What changed 10-Q

Item 1. Financial Statements