Blackbaud Reports $1.155 Billion Revenue for Fiscal Year 2024, Faces Operating Loss

Blackbaud, Inc. reported a total revenue of $1.155 billion for the fiscal year ending December 31, 2024, marking a 4.5% increase from $1.105 billion in 2023. The growth was primarily driven by a $36.7 million rise in contractual recurring revenue, attributed to the company's three-year contract renewal initiative and pricing adjustments within the social sector. Additionally, transactional recurring revenue increased by $20.9 million, bolstered by strong performance in Blackbaud Tuition Management and JustGiving solutions. However, the company experienced a decline in one-time services revenue, largely due to the divestiture of its EVERFI business, which negatively impacted overall performance.

The company's operating income saw a significant decline, resulting in a loss of $270.5 million compared to a profit of $44.7 million in the previous year. This downturn was largely due to a pre-tax loss of $405.4 million associated with the disposition of EVERFI, which included noncash impairment charges of $390.2 million. Despite the challenges, Blackbaud's gross dollar retention rate remained stable at approximately 90%, indicating a consistent ability to retain existing customers.

Strategically, Blackbaud has focused on several key initiatives, including product innovation, bookings growth, and cost management. The company has integrated generative AI capabilities into its solutions, enhancing user experience and fundraising outcomes. Additionally, Blackbaud has streamlined its operations, reducing headcount from approximately 3,600 in 2022 to around 2,600 by the end of 2024, following the divestiture of EVERFI. The company is also expanding its operations in India to access a broader talent pool while maintaining a remote-first workforce.

As of December 31, 2024, Blackbaud's cash and cash equivalents stood at $67.6 million, with total debt amounting to $1.075 billion. The company generated $296 million in cash flow from operations, a notable increase from $199.6 million in 2023. Blackbaud's net leverage ratio was reported at 2.57 to 1.00, indicating a manageable level of debt relative to its earnings. Looking ahead, Blackbaud anticipates continued investments in innovation and cybersecurity, with expectations of generating sufficient cash flow to meet operational needs and debt obligations.

In summary, while Blackbaud faced challenges in profitability due to the divestiture of EVERFI and associated impairment charges, the company demonstrated resilience in revenue growth and customer retention. The strategic focus on innovation and operational efficiency positions Blackbaud for potential recovery and growth in the coming fiscal periods.