What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-07-31 compared with 2024-05-01 · 270 added, 171 removed, 554 unchanged (44% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(dollars in thousands, except per share amounts) March 31,

(dollars in thousands, except per share amounts) June 30,

2024 December 31,

2 unchanged sentences

Restricted cash 800,670 697,006

Accounts receivable, net of allowance of $ 6,204 and $ 6,907 at March 31, 2024 and December 31, 2023, respectively

Accounts receivable, net of allowance of $ 6,006 and $ 6,907 at June 30, 2024 and December 31, 2023, respectively

152,832 101,862

28 unchanged sentences

Common stock, $ 0.001 par value;

180,000,000 shares authorized, 70,861,507 and 69,188,304 shares issued at March 31, 2024 and December 31, 2023, respectively;

51,624,243 and 53,625,440 shares outstanding at March 31, 2024 and December 31, 2023, respectively

180,000,000 shares authorized, 70,883,488 and 69,188,304 shares issued at June 30, 2024 and December 31, 2023, respectively;

51,623,951 and 53,625,440 shares outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,208,624 1,203,012

Treasury stock, at cost;

19,237,264 and 15,562,864 shares at March 31, 2024 and December 31, 2023, respectively

19,259,537 and 15,562,864 shares at June 30, 2024 and December 31, 2023, respectively

( 857,452 ) ( 591,557 )

4 unchanged sentences

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

First Quarter 2024 Form 10-Q

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

1 unchanged sentence

Three months ended

June 30, Six months ended

(dollars in thousands, except per share amounts) 2024 2023 2024 2023

16 unchanged sentences

Other income, net 3,310 2,778 6,657 4,785

Income (loss) before benefit for income taxes 3,790 ( 18,602 )

Income tax benefit ( 1,456 ) ( 3,901 )

Income (loss) before provision (benefit) for income taxes 29,687 ( 8,095 ) 33,477 ( 26,697 )

Income tax provision (benefit) 7,883 ( 10,200 ) 6,427 ( 14,101 )

Net income (loss) $ 21,804 $ 2,105 $ 27,050 $ ( 12,596 )

5 unchanged sentences

Diluted weighted average shares 51,677,418 53,643,124 52,371,927 52,389,112

Other comprehensive income (loss)

Other comprehensive (loss) income

Foreign currency translation adjustment $ 339 $ 3,055 $ ( 846 ) $ 5,213

Unrealized gain (loss) on derivative instruments, net of tax 4,095 ( 10,692 )

Total other comprehensive income (loss) 2,910 ( 8,534 )

Unrealized (loss) gain on derivative instruments, net of tax ( 1,386 ) 5,383 2,709 ( 5,309 )

Total other comprehensive (loss) income ( 1,047 ) 8,438 1,863 ( 96 )

Comprehensive income (loss) $ 20,757 $ 10,543 $ 28,913 $ ( 12,692 )

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

First Quarter 2024 Form 10-Q

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Condensed Consolidated Statements of Cash Flows

Three months ended

Six months ended

(dollars in thousands) 2024 2023

20 unchanged sentences

Net cash used in disposition of business ( 1,179 ) —

Other investing activities ( 5,029 ) —

Net cash used in investing activities ( 40,718 ) ( 31,535 )

2 unchanged sentences

Payments on debt ( 966,680 ) ( 171,824 )

Debt issuance costs ( 6,458 ) —

Employee taxes paid for withheld shares upon equity award settlement ( 54,483 ) ( 33,687 )

2 unchanged sentences

Purchase of treasury stock ( 262,596 ) —

Net cash used in financing activities ( 394,637 ) ( 353,238 )

Net cash provided by financing activities 25,657 10,443

Effect of exchange rate on cash, cash equivalents and restricted cash ( 523 ) 2,489

Net decrease in cash, cash equivalents and restricted cash ( 345,388 ) ( 345,777 )

Net increase in cash, cash equivalents and restricted cash 102,851 56,399

Cash, cash equivalents and restricted cash, beginning of period 728,257 733,931

1 unchanged sentence

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) March 31,

(dollars in thousands) June 30,

2024 December 31,

3 unchanged sentences

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

First Quarter 2024 Form 10-Q

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

17 unchanged sentences

Balance at March 31, 2024 70,861,507 $ 71 ( 19,237,264 ) $ ( 855,692 ) $ 1,184,338 $ 1,222 $ 204,115 $ 534,054

Net income — — — — — — 21,804 21,804

Vesting of restricted stock units 10,719 — — — — — — —

Shares withheld to satisfy tax withholdings — — ( 22,273 ) ( 1,760 ) — — — ( 1,760 )

Stock-based compensation — — — — 24,286 — — 24,286

Restricted stock grants 21,164 — — — — — — —

Restricted stock cancellations ( 9,902 ) — — — — — — —

Other comprehensive loss — — — — — ( 1,047 ) — ( 1,047 )

Balance at June 30, 2024 70,883,488 $ 71 ( 19,259,537 ) $ ( 857,452 ) $ 1,208,624 $ 175 $ 225,919 $ 577,337

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Condensed Consolidated Statements of Stockholders' Equity (continued)

(dollars in thousands) Common stock Treasury stock Additional

13 unchanged sentences

Balance at March 31, 2023 69,154,863 $ 69 ( 15,278,827 ) $ ( 568,277 ) $ 1,105,189 $ 404 $ 182,348 $ 719,733

Net income — — — — — — 2,105 2,105

Vesting of restricted stock units 23,550 — — — — — — —

Shares withheld to satisfy tax withholdings — — ( 32,540 ) ( 2,270 ) — — — ( 2,270 )

Stock-based compensation — — — — 33,364 — — 33,364

Restricted stock grants 6,031 — — — — — — —

Restricted stock cancellations ( 20,200 ) — — — — — — —

Other comprehensive income — — — — — 8,438 — 8,438

Balance at June 30, 2023 69,164,244 $ 69 ( 15,311,367 ) $ ( 570,547 ) $ 1,138,553 $ 8,842 $ 184,453 $ 761,370

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

First Quarter 2024 Form 10-Q

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

8 unchanged sentences

The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date.

Operating results and cash flows for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024, or any other future period.

Operating results and cash flows for the six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024, 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.

12 unchanged sentences

Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could materially differ from these estimates.

First Quarter 2024 Form 10-Q

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

9 unchanged sentences

We incurred an insignificant amount of legal costs associated with the disposition of this business.

As a result of the disposition, we recorded a $ 1.6 million loss, which was recorded in general and administrative expense in the unaudited, condensed consolidated statement of comprehensive income for the three months ended March 31, 2024.

Earnings (Loss) Per Share

3 unchanged sentences

Potentially dilutive securities consist of shares issuable upon vesting of restricted stock awards and units.

Diluted loss per share for the three months ended March 31, 2023 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.

Diluted loss per share for the six months ended June 30, 2023 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

Six months ended

(dollars in thousands, except per share amounts) 2024

8 unchanged sentences

Anti-dilutive shares excluded from calculations of diluted earnings (loss) per share 12,367 9,487 1,023,093 1,151,974

First Quarter 2024 Form 10-Q

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

13 unchanged sentences

(Level 3) Total

Fair value as of March 31, 2024

Fair value as of June 30, 2024

Financial assets:

2 unchanged sentences

Total financial assets $ — $ 14,534 $ — $ 14,534

Fair value as of March 31, 2024

Fair value as of June 30, 2024

Financial liabilities:

Foreign currency forward contracts $ — $ 56 $ — $ 56

Contingent consideration obligations — — 1,403 1,403

Total financial liabilities $ — $ 56 $ — $ 56

2 unchanged sentences

Interest rate swaps $ — $ 16,198 $ — $ 16,198

Foreign currency forward contracts — — — —

Total financial assets $ — $ 16,198 $ — $ 16,198

5 unchanged sentences

Total financial liabilities $ — $ 5,540 $ 1,403 $ 6,943

First Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

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

1 unchanged sentence

See Note 8 to these unaudited, condensed consolidated financial statements for additional information about our derivative instruments.

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

The fair value of our interest rate swaps and foreign currency forward contracts are based on model-driven valuations using Secured Overnight Financing Rate ("SOFR") rates and foreign currency forward rates, respectively, which are observable at commonly quoted intervals.

3 unchanged sentences

As the fair value measurements for our contingent consideration obligations contain significant unobservable inputs, they are classified within Level 3 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, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, as the debt bears interest rates that approximate market value.

As 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.

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 June 30, 2024 and December 31, 2023, due to the immediate or short-term maturity of these instruments.

We believe the carrying amount of our debt approximates its fair value at June 30, 2024 and December 31, 2023, as the debt bears interest rates that approximate market value.

As SOFR rates are observable at commonly quoted intervals, our debt under the 2024 Credit Facilities (as defined below) is classified within Level 2 of the fair value hierarchy.

The fair value of our fixed rate debt does not exceed the carrying amount.

We did not transfer any assets or liabilities among the levels within the fair value hierarchy during the three months ended March 31, 2024.

We did not transfer any assets or liabilities among the levels within the fair value hierarchy during the six months ended June 30, 2024.

Non-recurring fair value measurements

5 unchanged sentences

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 significant 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, 2024.

In June 2024, we entered into a sublease for an additional portion of our Washington, DC office location, which we previously closed for our own use in February 2023 to align with our remote-first workforce strategy.

We considered our entry into the sublease an impairment indicator.

As a result, during the three and six months ended June 30, 2024, we recorded noncash impairment charges of $ 3.1 million against certain operating lease ROU assets and noncash impairment charges against certain property and equipment assets which were insignificant.

We present these impairment charges in general and administrative expense on our unaudited, condensed consolidated statements of comprehensive income (loss) and as other non-cash adjustments within operating activities on our unaudited condensed consolidated statements of cash flows.

There were no other significant non-recurring fair value adjustments to our long-lived assets, intangible assets, goodwill or operating lease ROU assets during the six months ended June 30, 2024.

Consolidated Financial Statement Details

Restricted cash

(dollars in thousands) March 31,

(dollars in thousands) June 30,

2024 December 31,

2 unchanged sentences

Total restricted cash $ 800,670 $ 697,006

First Quarter 2024 Form 10-Q

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

1 unchanged sentence

Prepaid expenses and other assets

(dollars in thousands) March 31,

(dollars in thousands) June 30,

2024 December 31,

7 unchanged sentences

Unbilled accounts receivable 5,789 5,615

Equity method investment (6)

Taxes, prepaid and receivable 5,549 3,418

Deferred tax assets 617 644

Other assets 16,554 14,346

2 unchanged sentences

Prepaid expenses and other current assets $ 92,290 $ 99,285

(1) Amortization expense from costs of obtaining contracts was $ 4.8 million and $ 8.3 million for the three months ended March 31, 2024 and 2023, respectively.

(2) The current portion of costs of obtaining contracts as of March 31, 2024 and December 31, 2023 was $ 18.8 million and $ 25.3 million, respectively.

(3) The current portion of prepaid software maintenance and subscriptions as of March 31, 2024 and December 31, 2023 was $ 31.6 million and $ 32.4 million, respectively.

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

(5) Amortization expense from capitalized cloud computing implementation costs was insignificant for the three months ended March 31, 2024 and 2023, respectively.

Accumulated amortization for these costs was $ 8.4 million and $ 7.7 million as of March 31, 2024 and December 31, 2023, respectively.

(1) Amortization expense from costs of obtaining contracts was $ 4.9 million and $ 9.7 million for the three and six months ended June 30, 2024, respectively, and $ 8.1 million and $ 16.4 million for the three and six months ended June 30, 2023, respectively.

(2) The current portion of costs of obtaining contracts as of June 30, 2024 and December 31, 2023 was $ 19.6 million and $ 25.3 million, respectively.

(3) The current portion of prepaid software maintenance and subscriptions as of June 30, 2024 and December 31, 2023 was $ 32.1 million and $ 32.4 million, respectively.

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

(5) Amortization expense from capitalized cloud computing implementation costs was $ 0.7 million and insignificant for the three months ended June 30, 2024 and 2023, respectively, and $ 1.4 million and $ 1.1 million for the six months ended June 30, 2024 and 2023, respectively.

Accumulated amortization for these costs was $ 9.1 million and $ 7.7 million as of June 30, 2024 and December 31, 2023, respectively.

(6) Represents a strategic investment that did not result in Blackbaud having significant influence over the investee.

Accrued expenses and other liabilities

(dollars in thousands) March 31,

(dollars in thousands) June 30,

2024 December 31,

Accrued legal costs (1)

$ 10,473 $ 3,659

Taxes payable

10,428 21,282

Accrued legal costs (1)

Customer credit balances 7,631 10,238

1 unchanged sentence

Accrued commissions and salaries 2,995 4,413

Accrued health care costs 2,387 3,865

Accrued vacation costs 2,594 2,452

Accrued health care costs 2,230 3,865

Accrued transaction-based costs related to payments services 1,934 4,323

Contingent consideration liability

Derivative instruments 56 5,540

Contingent consideration liability

Other liabilities 12,816 10,704

4 unchanged sentences

See Note 9 to these unaudited, condensed consolidated financial statements for additional information about our loss contingency accruals and other legal expenses.

First Quarter 2024 Form 10-Q

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

2 unchanged sentences

Three months ended

Six months ended

(dollars in thousands) 2024

Interest income $ 2,815 $ 2,308 $ 4,863 $ 3,544

Currency revaluation gains (losses) 283 ( 245 )

Currency revaluation losses ( 380 ) ( 535 ) ( 97 ) ( 779 )

Other income, net 875 1,005 1,891 2,020

3 unchanged sentences

effective interest rate at

(dollars in thousands) March 31,

(dollars in thousands) June 30,

2024 December 31,

2023 March 31,

2023 June 30,

2024 December 31,

8 unchanged sentences

Debt, net of current portion $ 998,071 $ 760,405 5.12 % 4.17 %

2020 credit facility

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

At March 31, 2024, we were in compliance with our debt covenants under the 2020 Credit Facility.

2024 refinancing

On April 30, 2024, we entered into the Third Amendment to Credit Agreement (the "Amendment"), by and among us, the lenders party thereto and Bank of America N.A., as administrative agent (the "Agent").

The Amendment amends the Amended and Restated Credit Agreement, dated as of October 30, 2020 (as previously amended, the "2020 Credit Agreement" and the 2020 Credit Agreement as amended by the Amendment, the “2024 Credit Agreement”), by and among us, the lenders from time-to-time party thereto and the Agent.

The Amendment amends the 2020 Credit Agreement to, among other things, (a) refinance the existing $ 1.1 billion credit facilities under the 2020 Credit Agreement to provide for new credit facilities in the aggregate principal amount of $ 1.5 billion consisting of (i) a $ 700.0 million revolving credit facility (the “2024 Revolving Facility”) and (ii) a $ 800.0 million term loan facility (the “2024 Term Facility” and together with the 2024 Revolving Facility, the “2024 Credit Facilities”), (b) extend the maturity date to April 30, 2029, (c) modify the definition of Applicable Margin (as defined below) and (iv) modify certain negative and financial covenants to provide additional operational flexibility.

Upon closing, we borrowed $ 800.0 million pursuant to the 2024 Term Facility and $ 208.2 million pursuant to the 2024 Revolving Facility and used the proceeds to repay the outstanding principal balances of the term loans under the 2020 Credit Agreement (the "2020 Term Facilities"), and repay $ 196.6 million of outstanding revolving credit loans under the 2020 Credit Agreement (the "2020 Revolving Facility").

Certain lenders of the 2024 Term Facility participated in the 2020 Term Facilities and the change in present value of our future cash flows to these lenders under the 2020 Term Facilities and under the 2024 Term Facility was less than 10%.

Accordingly, we accounted for the refinancing event for these lenders as a debt modification.

Certain lenders of the 2020 Term Facilities did not participate in the 2024 Term Facility.

Accordingly, we accounted for the refinancing event for these lenders as a debt extinguishment.

Certain lenders of the 2020 Revolving Facility participated in the 2024 Revolving Facility and provided increased borrowing capacities.

Accordingly, we accounted for the refinancing event for these lenders as a debt modification.

Certain lenders of the 2020 Revolving Facility did not participate in the 2024 Revolving Facility.

Accordingly, we accounted for the refinancing event for these lenders as a debt extinguishment.

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

We recorded an insignificant loss on debt extinguishment related to the write-off of debt discount and deferred financing costs for the portions of the 2020 Credit Agreement considered to be extinguished.

This loss was recognized in the consolidated statements of comprehensive income within other income, net.

In connection with our entry into the 2024 Credit Agreement, we paid $ 6.5 million in financing costs, of which $ 1.6 million were capitalized in other assets and, together with a portion of the unamortized deferred financing costs from the 2020 Credit Agreement and prior agreements, are being amortized into interest expense over the term of the new facility.

As of June 30, 2024, deferred financing costs totaling $ 1.9 million were included in other assets on our consolidated balance sheets.

We recorded aggregate financing costs of $ 3.6 million as a direct deduction from the carrying amount of our debt liability, which related to debt discount (fees paid to lenders) and debt issuance costs for the 2024 Term Facility.

Summary of the 2024 Credit Facilities

The 2024 Revolving Facility includes (i) a $ 50.0 million letter of credit subfacility, (ii) a $ 50.0 million swingline subfacility and (iii) a $ 150.0 million sublimit available for multicurrency borrowings.

Under the 2024 Credit Facilities, dollar tranche revolving loans and term loans bear interest at a rate per annum equal to, at the option of the Company:

(a) a base rate equal to the highest of (i) the Federal Funds Rate plus 0.50 %, (ii) the prime rate announced by Bank of America, N.A., and (iii) Term SOFR plus 1.00 % (the “Base Rate”), plus an applicable margin as specified in the 2024 Credit Agreement (the “Applicable Margin”);

(b) Term SOFR plus the Applicable Margin;

or (c) the Daily SOFR Rate plus the Applicable Margin.

The Applicable Margin shall be adjusted quarterly, varies based on our net leverage ratio and varies based on whether the loan is a Base Rate Loan ( 0.375 % to 1.500 %), or a Term SOFR Loan/Daily SOFR Loan ( 1.375 % to 2.500 %).

The 2024 Credit Agreement also provides for a commitment fee of between 0.250 % and 0.500 % of the unused commitment under the 2024 Revolving Facility depending on our net leverage ratio.

Under the 2024 Credit Facilities, designated currency tranche revolving loans bear interest at a rate per annum equal to, at the option of the Company:

(a) the Designated Currency Daily Rate (as defined in the 2024 Credit Agreement) plus the Applicable Margin;

or (b) the Designated Currency Term Rate (as defined in the 2024 Credit Agreement) plus the Applicable Margin.

The Applicable Margin shall be adjusted quarterly and varies based on our net leverage ratio for both Designated Currency Daily Rate Loans and Designated Currency Term Rate Loans ( 1.375 % to 2.500 %).

We may prepay the 2024 Credit Agreement in whole or in part at any time without premium or penalty, other than customary breakage costs with respect to certain types of loans.

Under the terms of the 2024 Credit Agreement, we are entitled on one or more occasion, subject to the satisfaction of certain conditions, to request an increase in the commitments under the 2024 Revolving Facility and/or request additional incremental term loans in the aggregate principal amount of up to the sum of (i) the greater of (A) $ 360.0 million and (B) 100 % of EBITDA (as defined in the 2024 Credit Agreement), plus (ii) at our option, up to an amount such that the net leverage ratio shall be no greater than 3.50 to 1.00.

The 2024 Credit Agreement contains various representations, warranties and affirmative, negative and financial covenants customary for financings of this type.

Financial covenants include a net leverage ratio and an interest coverage ratio.

At June 30, 2024, we were in compliance with our debt covenants under the 2024 Credit Facilities.

Real estate loans

1 unchanged sentence

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, 2024, we were in compliance with our debt covenants under the Real Estate Loans.

The Real Estate Loans require periodic principal payments and the balance of the Real Estate Loans are due upon maturity in April 2038.

At June 30, 2024, 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.

First Quarter 2024 Form 10-Q

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

The following table summarizes our currently effective supplier financing agreements as of March 31, 2024:

The following table summarizes our currently effective supplier financing agreements as of June 30, 2024:

(dollars in thousands) Term

5 unchanged sentences

January 2023 36 3 April 2023 $ 2,491

April 2024 36 3 May 2024 $ 2,073

(1) Represent noncash investing and financing transactions during the periods indicated as we purchased software and services by assuming directly related liabilities.

The changes in supplier financing obligations during the three months ended March 31, 2024, consisted of the following:

The changes in supplier financing obligations during the six months ended June 30, 2024, consisted of the following:

(dollars in thousands) Total

Balance at December 31, 2023 $ 2,800

Balance at March 31, 2024 $ 2,231

Balance at June 30, 2024 $ 2,782

As of June 30, 2024, the required annual maturities related to the 2024 Credit Facilities, the Real Estate Loans and our other debt were as follows:

Years ending December 31,

(dollars in thousands) Annual

2024 - remaining $ 10,829

Thereafter 924,142

Total required maturities $ 1,026,047

Derivative Instruments

4 unchanged sentences

master agreements with our counterparties.

As of March 31, 2024 and December 31, 2023, we have presented the fair value of our derivative instruments at the gross amounts in the condensed consolidated balance sheets as the gross fair values of our derivative instruments equaled their net fair values.

As of June 30, 2024 and December 31, 2023, we have presented the fair value of our derivative instruments at the gross amounts in the condensed consolidated balance sheets as the gross fair values of our derivative instruments equaled their net fair values.

Cash flow hedges

We have entered into interest rate swap agreements, which effectively convert portions of our variable rate debt under the 2020 Credit Facility to a fixed rate for the term of the swap agreements.

We have entered into interest rate swap agreements, which effectively convert portions of our variable rate debt under the 2024 Credit Facilities to a fixed rate for the term of the swap agreements.

We designated each of the interest rate swaps as cash flow hedges at the inception of the contracts.

As of March 31, 2024 and December 31, 2023, the aggregate notional values of the interest rate swaps were $ 935.0 million and $ 935.0 million, respectively.

Our entry into the 2024 Credit Agreement in April 2024 did not affect our interest rate swap agreements, including their designation as cash flow hedges, as the 2024 Credit Agreement has substantially the same critical terms as the the 2020 Credit Agreement.

As of June 30, 2024 and December 31, 2023, the aggregate notional values of the interest rate swaps were $ 935.0 million and $ 935.0 million, respectively.

All of the contracts have maturities on or before October 2028.

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

We have entered into foreign currency forward contracts to hedge revenues denominated in the Canadian Dollar ("CAD") against changes in the exchange rate with the United States Dollar ("USD").

We designated each of these foreign currency forward contracts as cash flow hedges at the inception of the contracts.

As of March 31, 2024 and December 31, 2023, the aggregate notional values of the foreign currency forward contracts designated as cash flow hedges that we held to buy USD in exchange for Canadian Dollars were $ 30.6 million CAD and $ 29.9 million CAD, respectively.

As of June 30, 2024 and December 31, 2023, the aggregate notional values of the foreign currency forward contracts designated as cash flow hedges that we held to buy USD in exchange for Canadian Dollars were $ 32.1 million CAD and $ 29.9 million CAD, respectively.

All of the contracts have maturities of 12 months or less.

First Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Net investment hedges

1 unchanged sentence

We designated each of these foreign currency forward contracts as net investment hedges at the inception of the contracts.

As of March 31, 2024 and December 31, 2023, the aggregate notional values of the foreign currency forward contracts designated as net investment hedges to reduce the volatility of the U.S.

As of June 30, 2024 and December 31, 2023, the aggregate notional values of the foreign currency forward contracts designated as net investment hedges to reduce the volatility of the U.S.

dollar value of a portion of our GBP-denominated investments was £ 14.0 million and £ 13.2 million, respectively.

1 unchanged sentence

Asset derivatives Liability derivatives

(dollars in thousands) Balance sheet location March 31,

(dollars in thousands) Balance sheet location June 30,

2024 December 31,

2023 Balance sheet location March 31,

2023 Balance sheet location June 30,

2024 December 31,

11 unchanged sentences

Total derivative instruments designated as hedging instruments $ 14,534 $ 16,198 $ 56 $ 5,540

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

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

11 unchanged sentences

other comprehensive income (loss) into income (loss)

(dollars in thousands) March 31,

(dollars in thousands) June 30,

2024 Three months ended

March 31, 2024

June 30, 2024

Six months ended

June 30, 2024

Cash Flow Hedges

4 unchanged sentences

2023 Three months ended

March 31, 2023

June 30, 2023

Six months ended

June 30, 2023

Cash Flow Hedges

3 unchanged sentences

Foreign currency forward contracts $ ( 401 ) $ — $ —

First Quarter 2024 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.

2 unchanged sentences

For net investment hedges, changes in the fair value measurements of the derivative instruments and the related income tax expense or benefit are reflected as adjustments to translation adjustment, a component of accumulated other comprehensive income (loss), and recognized in earnings only when the hedged GBP investment is liquidated.

The estimated accumulated other comprehensive income as of March 31, 2024 that is expected to be reclassified into earnings within the next twelve months is $ 14.7 million.

There were no ineffective portions of our interest rate swap or foreign currency forward derivatives during the three months ended March 31, 2024 and 2023.

The estimated accumulated other comprehensive income as of June 30, 2024 that is expected to be reclassified into earnings within the next twelve months is $ 11.6 million.

There were no ineffective portions of our interest rate swap or foreign currency forward derivatives during the six months ended June 30, 2024 and 2023.

See Note 11 to these unaudited, condensed consolidated financial statements for a summary of the changes in accumulated other comprehensive income (loss) by component.

2 unchanged sentences

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

As of March 31, 2024, we did not have any operating leases that had not yet commenced.

As of June 30, 2024, we did not have any operating leases that had not yet commenced.

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

The following table summarizes the components of our lease expense:

Three months ended

Six months ended

(dollars in thousands) 2024

5 unchanged sentences

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

Maturities of our operating lease liabilities as of June 30, 2024 were as follows:

Years ending December 31,

(dollars in thousands) Operating leases

2024 - remaining $ 3,376

Thereafter 20,689

Total lease payments 48,737

Amount representing interest 7,560

Present value of future payments $ 41,177

Other commitments

The term loans under the 2020 Credit Facility require periodic principal payments.

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 term loans under the 2024 Credit Facilities require periodic principal payments.

The balance of the term loans and any amounts drawn on the revolving credit loans are due upon maturity of the 2024 Credit Facilities in April 2029.

The Real Estate Loans also require periodic principal payments and the balance of the Real Estate Loans are due upon maturity in April 2038.

1 unchanged sentence

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

As of March 31, 2024, the remaining aggregate minimum purchase commitment under these arrangements was approximately $ 239.8 million through 2029.

As of June 30, 2024, the remaining aggregate minimum purchase commitment under these arrangements was approximately $ 228.0 million through 2029.

Solution and service indemnifications

1 unchanged sentence

We have not identified any losses that might be covered by these indemnifications.

First Quarter 2024 Form 10-Q

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

22 unchanged sentences

Three months ended

Six months ended

(dollars in thousands) 2024

2 unchanged sentences

Net expense $ 1,822 $ 26,777 $ 12,145 $ 44,560

First Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

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

(dollars in thousands) March 31,

(dollars in thousands) June 30,

2024 December 31,

3 unchanged sentences

Cumulative offsetting insurance recoveries paid $ ( 50,000 ) $ ( 50,000 )

Recorded expenses have consisted primarily of payments to third-party service providers and consultants, including legal fees, settlement of the previously disclosed SEC and multi-state Attorneys General investigations (discussed below), settlements of customer claims and accruals for certain loss contingencies.

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Recorded expenses have consisted primarily of payments to third-party service providers and consultants, including legal fees, settlement of the previously disclosed SEC investigation, multi-state Attorneys General investigation, and Attorney General of the State of California investigation (discussed below), settlements of customer claims and accruals for certain loss contingencies.

Not included in the expenses discussed above were costs associated with enhancements to our cybersecurity program.

2 unchanged sentences

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

For the three months ended March 31, 2024, we incurred net pre-tax expenses of $ 10.3 million related to the Security Incident, which included $ 3.3 million for ongoing legal fees and additional accruals for loss contingencies of $ 7.0 million.

During the three months ended March 31, 2024, we had net cash outlays of $ 2.0 million related to the Security Incident for ongoing legal fees.

For the three and six months ended June 30, 2024, we incurred net pre-tax expenses of $ 1.8 million and $ 12.1 million, respectively, related to the Security Incident, which included $ 1.8 million and $ 5.1 million, respectively, for ongoing legal fees and additional accruals for loss contingencies of $ 0.0 million and $ 7.0 million, respectively.

During the six months ended June 30, 2024, we had net cash outlays of $ 5.8 million related to the Security Incident for ongoing legal fees.

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

1 unchanged sentence

Not included in these ranges are our previous settlements or current accruals for loss contingencies related to the matters discussed below.

As of March 31, 2024, we have recorded approximately $ 8.5 million in aggregate liabilities for loss contingencies based primarily on recent negotiations with certain customers and governmental agencies related to the Security Incident that we believed we could reasonably estimate in accordance with our loss contingency procedures described above.

As of June 30, 2024, we have recorded approximately $ 8.5 million in aggregate liabilities for loss contingencies, which included $ 6.8 million for our settlement with the Attorney General of the State of California on June 13, 2024, and other accruals based primarily on recent negotiations with certain customers related to the Security Incident that we believed we could reasonably estimate in accordance with our loss contingency procedures described above.

Our liabilities for loss contingencies are recorded in accrued expenses and other current liabilities on our unaudited, condensed consolidated balance sheets.

It is reasonably possible that our estimated actual losses may change in the near term for those matters and be materially in excess of the amounts accrued, but we are unable at this time to reasonably estimate the possible additional loss.

There are other Security Incident-related matters, including customer claims, customer constituent class actions and governmental investigations, for which we have not recorded a liability for a loss contingency as of March 31, 2024 because we are unable at this time to reasonably estimate the possible loss or range of loss.

There are other Security Incident-related matters, including customer claims, customer constituent class actions and governmental investigations, for which we have not recorded a liability for a loss contingency as of June 30, 2024 because we are unable at this time to reasonably estimate the possible loss or range of loss.

Each of these matters could, separately or in the aggregate, result in an adverse judgment, settlement, fine, penalty 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.

Customer claims.

To date, we have received approximately 260 specific requests from customers for reimbursement of expenses incurred by them related to the Security Incident, approximately 214 (or 82 %) of which have been fully resolved and closed and approximately 39 (or 15 %) are inactive and are considered by us to have been abandoned by the customers.

To date, we have received approximately 260 specific requests from customers for reimbursement of expenses incurred by them related to the Security Incident, all of which have been fully resolved and closed or are inactive and are considered by us to have been abandoned by the customers.

We have also received approximately 400 reservations of the right to seek expense recovery in the future from customers or their attorneys in the U.S., U.K.

2 unchanged sentences

data subjects, which we are reviewing.

In addition, insurance companies representing various customers’ interests through subrogation claims have contacted us, and certain insurance companies have filed subrogation claims in court, of which 3 cases remain active and unresolved.

First Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Customer constituent class actions.

Presently, we are a defendant in putative consumer class action cases in U.S.

federal courts (most of which have been consolidated under multi district litigation to a single federal court) and in Canadian courts alleging harm from the Security Incident.

federal courts (which have been consolidated under multi district litigation to a single federal court) and in Canadian courts alleging harm from the Security Incident.

The plaintiffs in these cases, who purport to represent various classes of individual constituents of our customers, generally claim to have been harmed by alleged actions and/or omissions by us in connection with the Security Incident and assert a variety of common law and statutory claims seeking monetary damages, injunctive relief, costs and attorneys’ fees and other related relief.

2 unchanged sentences

If these procedural requirements are not met, the lawsuit cannot proceed as a class action and the plaintiff may lose the financial incentive to proceed with the case.

We are currently engaged in court proceedings to determine whether this will proceed as a class action.

We are currently engaged in court proceedings to

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

determine whether this will proceed as a class action.

Frequently, a court’s determination as to these procedural requirements is subject to appeal to a higher court.

3 unchanged sentences

This analysis is further complicated by the fact that the plaintiffs lack contractual privity with us.

On May 14, 2024, the United States District Court for the District of South Carolina (the "Court") issued a memorandum opinion and order (1) denying the multi district litigation plaintiffs' motion for class certification because of the plaintiffs' failure to meet their burden of proof as to ascertainability, (2) granting our motion to exclude the multi district litigation plaintiffs' expert on the issue of ascertainability, and (3) denying the multi district litigation plaintiffs' motion to exclude our expert on the issue of ascertainability.

Further, the Court denied as moot all other pending motions.

On May 28, 2024, the plaintiffs filed a petition for permission to appeal under Rule 23(f) of the Federal Rules of Civil Procedure with the Fourth Circuit Court of Appeals (the “Fourth Circuit”) and we subsequently filed an opposition to such petition.

On July 30, 2024, the Fourth Circuit denied the plaintiffs' petition.

This litigation remains ongoing.

Governmental investigations.

We have received a Civil Investigative Demand from the office of the California Attorney General relating to the Security Incident and are in discussions with the Attorney General about potential resolution of issues arising from this investigation.

Although we are hopeful that we can resolve this matter on acceptable terms, there is no assurance that we will be able to do so on terms acceptable to us and the state of California.

We also are subject to the following pending governmental actions:

• an investigation by the U.S.

Federal Trade Commission (the "FTC"), as further described below;

• an investigation by the U.S.

As previously disclosed, we are subject to an ongoing investigation by the U.S.

Department of Health and Human Services.

We also responded to inquiries from the Office of the Australian Information Commissioner in September 2020 and the Office of the Privacy Commissioner of Canada in October 2020.

As previously disclosed, on February 1, 2024, the FTC announced its approval of an Agreement Containing Consent Order (the “Proposed Order”) evidencing its settlement with the Company in connection with the Security Incident.

Pursuant to its rules, the FTC placed the Proposed Order and related draft complaint on the public record for a period of 30 days for the receipt of public comments after which the FTC will consider any comments received from interested persons prior to determining whether and in what form to finalize the Proposed Order.

The 30-day comment period expired on March 14, 2024.

As part of the FTC’s proposed order, the Company has not been fined and is not otherwise required to make any payment.

Furthermore, the Company has agreed to the FTC’s proposed order without admitting or denying any of the FTC’s allegations, except as expressly stated otherwise in the Proposed Order.

If finalized, the settlement described in the Proposed Order will fully resolve the FTC investigation.

Although we believe the Proposed Order will be finalized in substantially its current form, there can be no assurances as to whether that will occur or its timing.

For more information, see the form of Proposed Order that was furnished as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 2, 2024 and in Note 11 to our audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC on February 21, 2024.

As previously disclosed, on June 13, 2024, we agreed to a Final Judgment and Permanent Injunction with the Attorney General of the State of California (the "Final Judgment") relating to the Security Incident.

This settlement fully resolved the last remaining U.S.

state attorney general investigation into the Security Incident.

Under the terms of the settlement, we agreed to comply with applicable laws;

not to make misleading statements related to our data protection, privacy, security, confidentiality, integrity, breach notification requirements, and similar matters;

and to implement and improve certain cybersecurity programs and tools.

The terms of the settlement with California are generally consistent with those to which we agreed in settling with the other 49 state Attorneys General and the District of Columbia on October 5, 2023, as discussed below.

As part of the settlement, we also agreed to pay a total of $ 6.8 million to the State of California.

This amount was fully accrued as a contingent liability in the Company's financial statements as of March 31, 2024 and June 30, 2024, and subsequently paid in the third quarter of 2024.

Nothing contained in the Final Judgment is intended to be, and shall not in any event be construed or deemed to be, an admission or concession or evidence of any liability or wrongdoing whatsoever on the part of Blackbaud or any fact or violation of law, rule, or regulation.

For more information, see the Final Judgment and Permanent Injunction of the State of California, County of San Diego that was furnished as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on June 14, 2024.

On May 20, 2024, the U.S.

Federal Trade Commission (the "FTC") finalized an Order (the “FTC Order”) evidencing its settlement with us in connection with the Security Incident.

As part of the FTC Order, we were not fined and were not otherwise required to make any payment.

Furthermore, we agreed to the FTC Order without admitting or denying any of the FTC’s allegations, except as expressly stated otherwise in the FTC Order.

The settlement described in the FTC Order fully resolved the FTC investigation.

For more information, see the form of proposed order that was furnished as Exhibit 99.2 to our Current Report on Form 8-K filed with the SEC on February 2, 2024 and is identical in substance to the final FTC Order, and in Note 11 to our audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC on February 21, 2024.

As previously disclosed, on October 5, 2023, we entered into separate, substantially similar Administrative Orders with each of 49 state Attorneys General and the District of Columbia relating to the Security Incident which fully resolved the previously disclosed multi-state Civil Investigative Demand and the separate Civil Investigative Demand from the Office of the Indiana Attorney General relating to the Security Incident.

First Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

On March 9, 2023, we reached a settlement with the SEC in connection with the Security Incident that fully resolved the previously disclosed SEC investigation of the Security Incident.

1 unchanged sentence

Data Protection Act 2018 notified us that it has closed its investigation of the Security Incident.

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

On September 24, 2021, we received notice from the Spanish Data Protection Authority that it has concluded its investigation of the Security Incident.

3 unchanged sentences

As noted above, each of these separate governmental investigations could result in adverse judgments, 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 benefit and effective income tax rates, including the effects of period-specific events, were:

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

Three months ended

Six months ended

(dollars in thousands) 2024

Income tax benefit $ ( 1,456 ) $ ( 3,901 )

Income tax provision (benefit) $ 7,883 $ ( 10,200 ) $ 6,427 $ ( 14,101 )

Effective income tax rate 26.6 % 126.0 % 19.2 % 52.8 %

The change in our effective income tax rate for the three months ended March 31, 2024 when compared to the same period in 2023 was primarily attributable to favorable impacts of benefits attributable to stock-based compensation and research and development tax credits.

The change in our effective income tax rate for the three and six months ended June 30, 2024, when compared to the same periods in 2023 were largely driven by prior year pre-tax losses versus current year pre-tax income.

Additionally, the 2024 periods were favorably impacted by benefits attributable to stock-based compensation and research and development tax credits whereas stock-based compensation negatively impacted our effective income tax rates for the 2023 periods.

Lastly, the 2023 periods were negatively impacted by non-deductible accruals related to security incident, which have impacted the 2024 periods to a much lesser degree.

Stockholders' Equity

3 unchanged sentences

The repurchase program does not have an expiration date and may be limited, suspended or discontinued at any time without prior notice.

Under the 2024 Credit Agreement (as defined below), we have restrictions on our ability to repurchase shares of our common stock, which are summarized on page 40 in this report.

Under the 2024 Credit Agreement, we have restrictions on our ability to repurchase shares of our common stock, which are summarized on page 47 in this report.

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

1 unchanged sentence

In March 2024, we entered into an issuer forward repurchase transaction with a large financial institution to repurchase an aggregate $ 200 million of shares of our common stock (the "ASR Transaction").

Pursuant to the terms of the ASR Transaction, we provided the financial institution with a prepayment of $ 200 million and received an initial delivery of 2.1 million shares of our common stock, representing approximately 70 % of the total shares then-expected to be repurchased under the ASR

First Quarter 2024 Form 10-Q

The final number of shares of common stock delivered to us under the ASR Transaction will be based on the average of the daily volume-weighted average prices of the common stock during the term of the ASR Transaction, less a discount and subject to customary adjustments upon events affecting the common stock (e.g., dilutive or concentrative events, mergers and acquisitions, and market disruptions).

At settlement, the financial institution may be required to deliver

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

At settlement, the financial institution may be required to deliver additional shares of our common stock to us or, under certain circumstances, we may be required to deliver a cash payment or shares of our common stock to the financial institution, with the method of settlement at our election.

additional shares of our common stock to us or, under certain circumstances, we may be required to deliver a cash payment or shares of our common stock to the financial institution, with the method of settlement at our election.

The final settlement of the ASR Transaction is scheduled to occur by the fourth quarter of 2024, unless settled earlier at the election of the financial institution.

The difference of $ 52.2 million between the prepayment of $ 200 million and the value of the shares repurchased on the ASR Transaction date represents an unsettled prepaid forward contract indexed to our common stock and met all of the applicable criteria for equity classification;

therefore, it was not accounted for as a derivative instrument as of March 31, 2024.

therefore, it was not accounted for as a derivative instrument as of June 30, 2024.

Because of our ability to settle in shares, the $ 52.2 million prepaid forward contract was classified as a reduction to additional paid-in capital within our unaudited, condensed consolidated statement of stockholders' equity.

We funded the ASR Transaction prepayment with borrowings pursuant to a revolving credit loan under the 2020 Credit Facility.

During the three months ended March 31, 2024, we repurchased an aggregate of 2,954,211 shares for $ 262.6 million, including the initial delivery of shares repurchased pursuant to the ASR Transaction.

The remaining amount available to purchase stock under the approved stock repurchase program was $ 259.7 million as of March 31, 2024.

We funded the ASR Transaction prepayment with borrowings pursuant to a revolving credit loan under the 2020 Credit Agreement.

During the three months ended June 30, 2024, we did no t repurchase any shares.

During the six months ended June 30, 2024, we repurchased an aggregate of 2,954,211 shares for $ 262.6 million, including the initial delivery of shares repurchased pursuant to the ASR Transaction.

The remaining amount available to purchase stock under the approved stock repurchase program was $ 259.7 million as of June 30, 2024.

On July 16, 2024, our Board of Directors reauthorized, expanded and replenished our stock repurchase program by expanding the total capacity under the program from $ 500.0 million to $ 800.0 million available for repurchases.

As of July 16, 2024, the amount available to purchase stock under the Company's repurchase program was $ 800.0 million.

See Note 13 to these unaudited, condensed financial statements for additional information.

Changes in accumulated other comprehensive income (loss) by component

1 unchanged sentence

Three months ended

Six months ended

(in thousands) 2024

Accumulated other comprehensive (loss) income, beginning of period $ ( 1,688 ) $ 8,938

Accumulated other comprehensive income (loss), beginning of period $ 1,222 $ 404 $ ( 1,688 ) $ 8,938

By component:

1 unchanged sentence

Accumulated other comprehensive income balance, beginning of period $ 12,253 $ 13,141 $ 8,158 $ 23,833

Other comprehensive income (loss) before reclassifications, net of tax effects of $( 2,966 ) and $ 2,566

Other comprehensive income before reclassifications, net of tax effects of $( 974 ), $( 3,238 ), $( 3,940 ) and $( 672 )

2,731 9,231 10,852 1,942

Amounts reclassified from accumulated other comprehensive income (loss) ( 5,507 ) ( 4,624 )

Amounts reclassified from accumulated other comprehensive income ( 5,585 ) ( 5,192 ) ( 11,092 ) ( 9,816 )

Tax expense included in provision for income taxes 1,468 1,344 2,949 2,565

Total amounts reclassified from accumulated other comprehensive income (loss) ( 4,026 ) ( 3,403 )

Net current-period other comprehensive income (loss) 4,095 ( 10,692 )

Total amounts reclassified from accumulated other comprehensive income ( 4,117 ) ( 3,848 ) ( 8,143 ) ( 7,251 )

Net current-period other comprehensive (loss) income ( 1,386 ) 5,383 2,709 ( 5,309 )

Accumulated other comprehensive income balance, end of period $ 10,867 $ 18,524 $ 10,867 $ 18,524

4 unchanged sentences

Accumulated other comprehensive income, end of period $ 175 $ 8,842 $ 175 $ 8,842

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Revenue Recognition

Transaction price allocated to the remaining performance obligations

As of March 31, 2024, approximately $ 1.2 billion of revenue under contract is expected to be recognized from remaining performance obligations.

As of June 30, 2024, approximately $ 1.3 billion of revenue under contract is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 55 % of these remaining performance obligations over the next 12 months, with the remainder recognized thereafter.

First Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

We applied the practical expedient in ASC 606-10-50-14 and have excluded the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less (one-time services);

and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (transactional revenue).

We applied the practical expedient in ASC 606-10-50-14 and have excluded the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (transactional revenue).

Contract balances

Our contract assets as of March 31, 2024 and December 31, 2023 were insignificant.

Our contract assets as of June 30, 2024 and December 31, 2023 were insignificant.

Our closing balances of deferred revenue were as follows:

(in thousands) March 31,

(in thousands) June 30,

2024 December 31,

Total deferred revenue $ 429,413 $ 394,927

The decrease in deferred revenue during the three months ended March 31, 2024 was primarily due to a seasonal decrease in customer contract renewals.

The increase in deferred revenue during the six months ended June 30, 2024 was primarily due to a seasonal increase 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.

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, 2024 that was included in the deferred reven ue balance at the beginning of the period was approximately $ 173 million.

The amount of revenue recognized during the three months ended March 31, 2024 from performance obligations satisfied in prior periods was insignificant .

The amount of revenue recognized during the six months ended June 30, 2024 that was included in the deferred reven ue balance at the beginning of the period was approximately $ 279 million.

The amount of revenue recognized during the six months ended June 30, 2024 from performance obligations satisfied in prior periods was insignificant .

Disaggregation of revenue

3 unchanged sentences

Three months ended

Six months ended

(dollars in thousands) 2024

3 unchanged sentences

Total revenue $ 287,286 $ 271,042 $ 566,536 $ 532,795

The Social Sector and Corporate Sector market groups comprised our go-to-market organizations as of March 31, 2024.

The Social Sector and Corporate Sector market groups comprised our go-to-market organizations as of June 30, 2024.

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

1 unchanged sentence

• The Corporate Sector market group focuses on sales to customers and prospects in the corporate sector globally, and includes EVERFI and YourCause.

First Quarter 2024 Form 10-Q

Second Quarter 2024 Form 10-Q

Blackbaud, Inc.

2 unchanged sentences

Three months ended

Six months ended

(dollars in thousands) 2024

5 unchanged sentences

Three months ended

Six months ended

(dollars in thousands) 2024

3 unchanged sentences

Subsequent Events

April 2024 credit agreement refinancing

The Amendment amends the Amended and Restated Credit Agreement, dated as of October 30, 2020 (as previously amended, the "Existing Credit Agreement" and the Existing Credit Agreement as amended by the Amendment, the “2024 Credit Agreement”), by and among us, the lenders from time-to-time party thereto and the Agent.

The Amendment amends the Existing Credit Agreement to, among other things, (a) refinance the existing $ 1.1 billion credit facilities under the Existing Credit Agreement to provide for new credit facilities in the aggregate principal amount of $ 1.5 billion consisting of (i) a $ 700.0 million revolving credit facility with a $ 50.0 million letter of credit subfacility, a $ 50.0 million swingline subfacility and a $ 150.0 million sublimit available for multicurrency borrowings (the “2024 Revolving Facility”) and (ii) a $ 800.0 million term loan facility (the “2024 Term Facility” and together with the 2024 Revolving Facility, the “2024 Credit Facilities”), (b) extend the maturity date to April 30, 2029, (c) modify the definition of Applicable Margin (as defined below) and (iv) modify certain negative and financial covenants to provide additional operational flexibility.

Under the 2024 Credit Facilities, dollar tranche revolving loans and term loans bear interest at a rate per annum equal to, at the option of the Company:

(b) Term SOFR plus the Applicable Margin;

or (c) the Daily SOFR Rate plus the Applicable Margin.

The 2024 Credit Agreement also provides for a commitment fee of between 0.250 % and 0.500 % of the unused commitment under the 2024 Revolving Facility depending on our net leverage ratio.

Under the 2024 Credit Facilities, designated currency tranche revolving loans bear interest at a rate per annum equal to, at the option of the Company:

(a) the Designated Currency Daily Rate (as defined in the 2024 Credit Agreement) plus the Applicable Margin;

or (b) the Designated Currency Term Rate (as defined in the 2024 Credit Agreement) plus the Applicable Margin.

We may prepay the 2024 Credit Agreement in whole or in part at any time without premium or penalty, other than customary breakage costs with respect to certain types of loans.

First Quarter 2024 Form 10-Q

Blackbaud, Inc.

Notes to Condensed Consolidated Financial Statements

Under the terms of the 2024 Credit Agreement, we are entitled on one or more occasion, subject to the satisfaction of certain conditions, to request an increase in the commitments under the 2024 Revolving Facility and/or request additional incremental term loans in the aggregate principal amount of up to the sum of (i)(x) the greater of (A) $ 360.0 million and (B) 100 % of EBITDA (as defined in the 2024 Credit Agreement), plus (ii) at our option, up to an amount such that the net leverage ratio shall be no greater than 3.50 to 1.00.

The 2024 Credit Agreement contains various representations, warranties and affirmative, negative and financial covenants customary for financings of this type.

Financial covenants include a net leverage ratio and an interest coverage ratio.

The Amendment is filed as Exhibit 10.1 of this Quarterly Report on Form 10-Q.

The descriptions of the Amendment and the 2024 Credit Agreement contained herein do not purport to be complete and are subject to, and qualified in their entirety by, the full and complete terms contained in the Amendment, a copy of which is filed as Exhibit 10.1 and is incorporated herein by reference.

First Quarter 2024 Form 10-Q

Stock Repurchase Program

On July 16, 2024, our Board of Directors reauthorized, expanded and replenished our existing stock repurchase program.

The expansion raised the total capacity under the stock repurchase program from $ 500.0 million to $ 800.0 million available for repurchases.

The program does not have an expiration date.

From January 1, 2024 and prior to the replenishment on July 16, 2024, we repurchased 2,954,211 shares of our stock for $ 262.6 million under the stock repurchase program, representing approximately 5.5% of our common stock outstanding as of December 31, 2023.

As of July 16, 2024, the amount available to purchase stock under our repurchase program was $ 800.0 million.

Repurchases by us will be subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors.

Stock repurchases may be made from time to time in open market transactions, in private transactions or otherwise in accordance with applicable securities laws and regulations and other legal requirements, including compliance with our finance agreements.

There is no minimum number of shares that we are required to repurchase and the repurchase program may be suspended or discontinued at any time without prior notice.

All shares purchased will be held in our treasury for possible future use.

We anticipate funding any stock repurchases from its cash flow from operations, though we may fund repurchases through borrowings or otherwise in our discretion.

Additional information regarding the stock repurchase program reauthorization is contained in our Current Report on Form 8-K filed with the SEC on July 18, 2024.

Second Quarter 2024 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