Blackbaud (BLKB) 10-Q 5 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 24, 2017
Document And Entity Information [Abstract]
Document type	10-Q
Amendment flag	false
Document period end date	Mar. 31, 2017
Document fiscal year focus	2,017
Document fiscal period focus	Q1
Trading symbol	blkb
Entity registrant name	BLACKBAUD INC
Entity central index key	1,280,058
Current fiscal year end date	--12-31
Entity filer category	Large Accelerated Filer
Entity common stock, shares outstanding		48,037,329

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 13,872	$ 16,902
Restricted cash due to customers	164,748	353,771
Accounts receivable, net of allowance of $3,328 and $3,291 at March 31, 2017 and December 31, 2016, respectively	90,510	88,932
Prepaid expenses and other current assets	49,172	48,314
Total current assets	318,302	507,919
Property and equipment, net	47,200	50,269
Software development costs, net	41,139	37,582
Goodwill	438,307	438,240
Intangible assets, net	243,263	253,676
Other assets	22,914	22,524
Total assets	1,111,125	1,310,210
Current liabilities:
Trade accounts payable	20,666	23,274
Accrued expenses and other current liabilities	39,072	54,196
Due to customers	164,748	353,771
Debt, current portion	4,375	4,375
Deferred revenue, current portion	237,101	244,500
Total current liabilities	465,962	680,116
Debt, net of current portion	351,995	338,018
Deferred tax liability	29,636	29,558
Deferred revenue, net of current portion	7,681	6,440
Other liabilities	7,801	8,533
Total liabilities	863,075	1,062,665
Commitments and contingencies (see Note 8)
Stockholders' equity:
Preferred stock; 20,000,000 shares authorized, none outstanding	0	0
Common stock, $0.001 par value; 180,000,000 shares authorized, 58,410,419 and 57,672,401 shares issued at March 31, 2017 and December 31, 2016, respectively	58	58
Additional paid-in capital	319,731	310,452
Treasury stock, at cost; 10,375,257 and 10,166,801 shares at March 31, 2017 and December 31, 2016, respectively	(230,065)	(215,237)
Accumulated other comprehensive loss	(175)	(457)
Retained earnings	158,501	152,729
Total stockholders' equity	248,050	247,545
Total liabilities and stockholders' equity	$ 1,111,125	$ 1,310,210

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Accounts receivable, allowance	$ 3,328	$ 3,291
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	180,000,000	180,000,000
Common stock, shares issued	58,410,419	57,672,401
Treasury stock, shares	10,375,257	10,166,801

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue
Subscriptions	$ 118,179	$ 96,851
Maintenance	33,781	37,160
Services and other	31,661	35,245
Total revenue	183,621	169,256
Cost of revenue
Cost of subscriptions	54,926	49,666
Cost of maintenance	5,982	5,318
Cost of services and other	24,574	24,905
Total cost of revenue	85,482	79,889
Gross profit	98,139	89,367
Operating expenses
Sales, marketing and customer success	42,240	35,609
Research and development	22,706	22,715
General and administrative	21,923	19,679
Amortization	691	752
Total operating expenses	87,560	78,755
Income from operations	10,579	10,612
Interest expense	(2,377)	(2,675)
Other income (expense), net	286	(105)
Income before provision for income taxes	8,488	7,832
Income tax (benefit) provision	(3,023)	1,595	[1]
Net income	$ 11,511	$ 6,237
Earnings per share
Basic earnings per share	$ 0.25	$ 0.14
Diluted earnings per share	$ 0.24	$ 0.13
Common shares and equivalents outstanding
Basic weighted average shares	46,501,761	45,967,863
Diluted weighted average shares outstanding	47,482,840	47,064,164
Dividends per share (in dollars per share)	$ 0.12	$ 0.12
Other comprehensive income (loss)
Foreign currency translation adjustment	$ 100	$ 403
Unrealized gain (loss) on derivative instruments, net of tax	182	(669)
Total other comprehensive income (loss)	282	(266)
Comprehensive income	$ 11,793	$ 5,971
[1]	As discussed in Note 2 to these consolidated financial statements, we early adopted ASU 2016-09 relating to stock-based compensation during the three months ended September 30, 2016. Under ASU 2016-09, tax benefits in excess of compensation costs (windfalls) generated upon the exercise or settlement of stock awards are no longer recognized as additional paid-in capital but are instead recognized as a reduction to income tax expense. This change in accounting for income taxes was effective for us on a prospective basis as of the beginning of the 2016 fiscal year.

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities
Net income	$ 11,511	$ 6,237
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	18,091	17,609
Provision for doubtful accounts and sales returns	2,738	1,017
Stock-based compensation expense	9,294	7,743
Deferred taxes	(50)	626
Amortization of deferred financing costs and discount	239	239
Other non-cash adjustments	(243)	(217)
Changes in operating assets and liabilities, net of acquisition and disposal of businesses:
Accounts receivable	(4,041)	817
Prepaid expenses and other assets	(1,214)	1,846
Trade accounts payable	(1,267)	139
Accrued expenses and other liabilities	(15,536)	(20,416)
Restricted cash due to customers	188,824	141,055
Due to customers	(188,824)	(141,055)
Deferred revenue	(6,758)	(8,883)
Net cash provided by operating activities	12,764	6,757
Cash flows from investing activities
Purchase of property and equipment	(2,719)	(7,837)
Capitalized software development costs	(6,583)	(5,798)
Purchase of net assets of acquired companies, net of cash	59	0
Net cash used in investing activities	(9,243)	(13,635)
Cash flows from financing activities
Proceeds from issuance of debt	67,600	74,600
Payments on debt	(53,794)	(60,494)
Employee taxes paid for withheld shares upon equity award settlement	(14,828)	(5,516)
Proceeds from exercise of stock options	11	3
Dividend payments to stockholders	(5,765)	(5,700)
Net cash (used in) provided by financing activities	(6,776)	2,893
Effect of exchange rate on cash and cash equivalents	225	707
Net decrease in cash and cash equivalents	(3,030)	(3,278)
Cash and cash equivalents, beginning of period	16,902	15,362
Cash and cash equivalents, end of period	$ 13,872	$ 12,084

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands	Total	Common stock [Member]	Additional paid-in capital [Member]	Treasury stock [Member]	Accumulated other comprehensive loss [Member]	Retained earnings [Member]
Balance (in shares) at Dec. 31, 2016		57,672,401
Balance at Dec. 31, 2016	$ 247,545	$ 58	$ 310,452	$ (215,237)	$ (457)	$ 152,729
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	11,511					11,511
Payment of dividends	(5,765)					(5,765)
Exercise of stock options and stock appreciation rights and vesting of restricted stock units (in shares)		273,415
Exercise of stock options and stock appreciation rights and vesting of restricted stock units	11		11
Employee taxes paid for 208,456 withheld shares upon equity award settlement	(14,828)			(14,828)
Stock-based compensation	9,294		9,268			26
Restricted stock grants (in shares)		499,734
Restricted stock grants	0	$ 0
Restricted stock cancellations (in shares)		(35,131)
Other comprehensive income	282				282
Balance (in shares) at Mar. 31, 2017		58,410,419
Balance at Mar. 31, 2017	$ 248,050	$ 58	$ 319,731	$ (230,065)	$ (175)	$ 158,501

Consolidated Statements of Sto7

Consolidated Statements of Stockholders' Equity (Parenthetical)	3 Months Ended
	Mar. 31, 2017shares
Statement of Stockholders' Equity [Abstract]
Surrender of shares upon vesting of restricted stock and restricted stock units and exercise of stock appreciation rights	208,456

Organization

Organization	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	1. Organization We are the world’s leading cloud software company powering social good. Serving the entire social good community—nonprofits, foundations, corporations, education institutions, and individual change agents—we connect and empower organizations to increase their impact through software, services, expertise, and data intelligence. Our portfolio is tailored to the unique needs of vertical markets, with solutions for fundraising and relationship management, digital marketing, advocacy, accounting, payments, analytics, school management, grant management, corporate social responsibility and volunteerism. Serving the industry for more than three decades, we are headquartered in Charleston, South Carolina and have operations in the United States, Australia, Canada and the United Kingdom. As of March 31, 2017 , we had approximately 35,000 customers.

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Basis of Presentation	2. Basis of Presentation Unaudited interim consolidated financial statements The accompanying interim consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to state fairly the consolidated balance sheets, consolidated statements of comprehensive income, consolidated statements of cash flows and consolidated statements of stockholders’ equity, for the periods presented in accordance with accounting principles generally accepted in the United States ("GAAP"). The consolidated balance sheet at December 31, 2016 , has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017 , 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. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 , and other forms filed with the SEC from time to time. Reclassifications Due to the insignificance of our revenue from "license fees and other," we have combined that revenue with our "services" revenue beginning in 2017. In order to provide comparability between periods presented, "services" and "license fees and other" have been combined within "services and other" in the previously reported consolidated statements of comprehensive income to conform to presentation of the current period. Similarly, "cost of services" and "cost of license fees and other" have been combined within "cost of services and other" in the previously reported consolidated statements of comprehensive income to conform to presentation of the current period . Basis of consolidation The consolidated financial statements include the accounts of Blackbaud, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Recently adopted accounting pronouncements As previously disclosed, during the three months ended September 30, 2016 we early adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09") , which addresses, among other items, the accounting for income taxes and forfeitures, and cash flow presentation of share-based compensation. The early adoption of ASU 2016-09 increased net income for the three months ended March 31, 2016, and resulted in an increase in net cash provided by operating activities and a decrease in net cash provided by financing activities for the three months ended March 31, 2016. Detailed information regarding the impact of our adoption of ASU 2016-09 can be found in our annual report on Form 10-K for the year ended December 31, 2016. Recently issued accounting pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment ("ASU 2017-04") , which removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted, and applied prospectively. We do not expect ASU 2017-04 to have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business ("ASU 2017-01") , which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted, and applied prospectively. We are currently evaluating the impact of adopting this standard. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash ("ASU 2016-18") , which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted, including adoption in an interim period, but any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The new standard must be adopted retrospectively. We are currently evaluating the impact of this standard on our consolidated statements of cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02) . ASU 2016-02 will require lessees to record most leases on their balance sheets but recognize expenses in the income statement in a manner similar to current guidance. The updated guidance also eliminates certain real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. All entities will classify leases to determine how to recognize lease-related revenue and expense. Classification will continue to affect amounts that lessors record on the balance sheet. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. Upon adoption, entities will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. We expect ASU 2016-02 will impact our consolidated financial statements and are currently evaluating the extent of the impact that implementation of this standard will have on adoption. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09) . ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The standard also provides guidance on the recognition of costs related to obtaining customer contracts. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. ASU 2014-09 will be effective for us beginning in the first quarter of 2018. We are currently evaluating the transition methods and the impact that the adoption of ASU 2014-09 will have on our consolidated financial statements and related disclosures. As a result of our evaluation to date, we expect that ASU 2014-09 will generally result in a longer deferral of commissions expense as compared with our current amortization periods for such costs, and may result in the deferral of more sales commissions. In addition, we expect changes in the allocation of transactions prices for contracts where we sell perpetual software licenses as ASU 2014-09 requires that the transaction price in a contract be allocated based on relative standalone selling prices of the separate performance obligations. We also anticipate incremental disclosures, including, but not limited to, quantitative reconciliations of opening and closing balances of contract assets and liabilities, the value of remaining performance obligations at the end of each reporting period, and disaggregation of revenue.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangible Assets	3. Goodwill and Other Intangible Assets The change in goodwill for each reportable segment (as defined in Note 12 below) during the three months ended March 31, 2017 , consisted of the following: (dollars in thousands) EMG GMG IMG Total Balance at December 31, 2016 $ 241,334 $ 192,238 $ 4,668 $ 438,240 Adjustments related to prior year business combination (1) (21 ) (37 ) (1 ) (59 ) Effect of foreign currency translation — — 126 126 Balance at March 31, 2017 $ 241,313 $ 192,201 $ 4,793 $ 438,307 (1) The change in goodwill was related to a post-closing working capital adjustment associated with the prior year acquisition of Good+Geek, Inc. ("Attentive.ly").

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Earnings Per Share	4. 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. 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. The following table sets forth the computation of basic and diluted earnings per share: Three months ended (dollars in thousands, except per share amounts) 2017 2016 Numerator: Net income $ 11,511 $ 6,237 Denominator: Weighted average common shares 46,501,761 45,967,863 Add effect of dilutive securities: Stock-based awards 981,079 1,096,301 Weighted average common shares assuming dilution 47,482,840 47,064,164 Earnings per share: Basic $ 0.25 $ 0.14 Diluted $ 0.24 $ 0.13 Anti-dilutive shares excluded from calculations of diluted earnings per share 199,199 55,844

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurements	5. Fair Value Measurements We use a three-tier fair value hierarchy to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: • Level 1 - Quoted prices for identical assets or liabilities in active markets; • Level 2 - Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable. Recurring fair value measurements Financial assets and liabilities measured at fair value on a recurring basis consisted of the following, as of: Fair value measurement using (dollars in thousands) Level 1 Level 2 Level 3 Total Fair value as of March 31, 2017 Financial assets: Derivative instruments (1) $ — $ 343 $ — $ 343 Total financial assets $ — $ 343 $ — $ 343 Fair value as of December 31, 2016 Financial assets: Derivative instruments (1) $ — $ 206 $ — $ 206 Total financial assets $ — $ 206 $ — $ 206 Fair value as of December 31, 2016 Financial liabilities: Derivative instruments (1) $ — $ 163 $ — $ 163 Total financial liabilities $ — $ 163 $ — $ 163 (1) The fair value of our interest rate swaps was based on model-driven valuations using LIBOR rates, which are observable at commonly quoted intervals. Accordingly, our interest rate swaps are classified within Level 2 of the fair value hierarchy. We believe the carrying amounts of our cash and cash equivalents, restricted cash due to customers, accounts receivable, trade accounts payable, accrued expenses and other current liabilities and due to customers approximate their fair values at March 31, 2017 and December 31, 2016 , 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, 2017 and December 31, 2016 , as the debt bears interest rates that approximate market value. As LIBOR rates are observable at commonly quoted intervals, our debt is 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 three months ended March 31, 2017 . Additionally, we did not hold any Level 3 assets or liabilities during the three months ended March 31, 2017 . Non-recurring fair value measurements Assets and liabilities that are measured at fair value on a non-recurring basis include intangible assets and goodwill, which are recognized at fair value during the period in which an acquisition is completed, from updated estimates and assumptions during the measurement period, or when they are considered to be impaired. These non-recurring fair value measurements, primarily for intangible assets acquired, are based on Level 3 unobservable inputs. In the event of an impairment, we determine the fair value of the goodwill and intangible assets using a discounted cash flow approach, which contains significant unobservable inputs and, therefore, is considered a Level 3 fair value measurement. The unobservable inputs in the analysis generally include future cash flow projections and a discount rate. There were no non-recurring fair value adjustments to intangible assets and goodwill during the three months ended March 31, 2017 , except for an insignificant business combination accounting adjustment to the initial fair value estimates of the Attentive.ly assets acquired and liabilities assumed at the acquisition date from updated information obtained during the measurement period. See Note 3 to these consolidated financial statements for additional details. The measurement period of a business combination may be up to one year from the acquisition date. We record any measurement period adjustments to the fair value of assets acquired and liabilities assumed, with the corresponding offset to goodwill.

Consolidated Financial Statemen

Consolidated Financial Statement Details	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Consolidated Financial Statement Details	6. Consolidated Financial Statement Details Accrued expenses and other liabilities (dollars in thousands) March 31, December 31, Accrued bonuses $ 8,667 $ 19,217 Accrued commissions and salaries 5,478 9,352 Lease incentive obligations 5,360 5,604 Customer credit balances 4,759 5,148 Deferred rent liabilities 4,116 4,110 Taxes payable 2,331 3,452 Unrecognized tax benefit 3,359 3,295 Accrued subscriptions 3,032 2,840 Accrued vacation costs 2,169 2,214 Accrued health care costs 2,683 1,495 Other liabilities 4,919 6,002 Total accrued expenses and other liabilities 46,873 62,729 Less: Long-term portion 7,801 8,533 Accrued expenses and other current liabilities $ 39,072 $ 54,196

Derivative Instruments

Derivative Instruments	3 Months Ended
	Mar. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivatives Instruments	7. Derivative Instruments We use derivative instruments to manage our variable interest rate risk. In March 2014 , we entered into an interest rate swap agreement (the "March 2014 Swap Agreement"), which effectively converts portions of our variable rate debt under our existing credit facility (the "2014 Credit Facility") to a fixed rate for the term of the swap agreement. The initial notional value of the March 2014 Swap Agreement was $125.0 million with an effective date beginning in March 2014 . In March 2017 , the notional value of the March 2014 Swap Agreement decreased to $75.0 million for the remaining term through February 2018 . We designated the March 2014 Swap Agreement as a cash flow hedge at the inception of the contract. In October 2015 , we entered into an additional interest rate swap agreement (the "October 2015 Swap Agreement"), which effectively converts portions of our variable rate debt under the 2014 Credit Facility to a fixed rate for the term of the October 2015 Swap Agreement. The notional value of the October 2015 Swap Agreement was $75.0 million with an effective date beginning in October 2015 and maturing in February 2018 . We designated the October 2015 Swap Agreement as a cash flow hedge at the inception of the contract. The fair values of our derivative instruments were as follows as of: (dollars in thousands) Balance sheet location March 31, December 31, Derivative instruments designated as hedging instruments: Interest rate swap, current portion Prepaid expenses and other current assets $ 343 $ — Interest rate swap, long-term portion Other assets $ — $ 206 Total derivative instruments designated as hedging instruments $ 343 $ 206 March 31, December 31, Derivative instruments designated as hedging instruments: Interest rate swaps, long-term portion Other liabilities — 163 Total derivative instruments designated as hedging instruments $ — $ 163 The effects of derivative instruments in cash flow hedging relationships were as follows: Gain (loss) recognized in accumulated other comprehensive loss as of Location of gain (loss) reclassified from accumulated other comprehensive loss into income Gain (loss) reclassified from accumulated other comprehensive loss into income (dollars in thousands) March 31, Three months ended March 31, 2017 Interest rate swaps $ 343 Interest expense $ (119 ) March 31, Three months ended March 31, 2016 Interest rate swaps $ (1,135 ) Interest expense $ (308 ) 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. Accumulated other comprehensive income (loss) includes unrealized gains or losses from the change in fair value measurement of our derivative instruments each reporting period and the related income tax expense or benefit. 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 income as of March 31, 2017 that is expected to be reclassified into earnings within the next twelve months is insignificant . There were no ineffective portions of our interest rate swap derivatives during the three months ended March 31, 2017 and 2016 . See Note 11 to these consolidated financial statements for a summary of the changes in accumulated other comprehensive income (loss) by component.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	8. Commitments and Contingencies Leases Total rent expense was $4.0 million and $2.0 million for the three months ended March 31, 2017 and 2016 , respectively. The quarterly South Carolina state incentive payments we received as a result of locating our headquarters facility in Berkeley County, South Carolina, ended in the fourth quarter of 2016. These amounts were recorded as a reduction of rent expense upon receipt and were $1.0 million for the three months ended March 31, 2016 . Other commitments The term loans under the 2014 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 2014 Credit Facility in February 2019 . We utilize third-party technology in conjunction with our solutions and services, with contractual obligations varying in length from one to five years. In certain cases, such arrangements require a minimum annual purchase commitment. As of March 31, 2017 , the remaining aggregate minimum purchase commitment under these arrangements was approximately $51.0 million through 2021 . Solution and service indemnifications In the ordinary course of business, we provide certain indemnifications of varying scope to customers against claims of intellectual property infringement made by third parties arising from the use of our solutions or services. If we determine that it is probable that a loss has been incurred related to solution or service indemnifications, any such loss that could be reasonably estimated would be recognized. We have not identified any losses and, accordingly, we have not recorded a liability related to these indemnifications. Legal proceedings We are subject to legal proceedings and claims that arise in the ordinary course of business. We make a provision for a loss contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Unless otherwise specifically disclosed in this note, we have determined as of March 31, 2017 , that no provision for liability nor disclosure is required related to any claim against us because (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial. All legal costs associated with litigation are expensed as incurred. Litigation is inherently unpredictable. However, we believe that we have valid defenses with respect to the legal matters pending against us. It is possible, nevertheless, that our consolidated financial position, results of operations or cash flows could be negatively affected in any particular period by an unfavorable resolution of one or more of such proceedings claims or investigations.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Income Taxes	9. Income Taxes Our Income tax (benefit) provision and effective income tax rates including the effects of period-specific events, were: Three months ended (dollars in thousands) 2017 2016 (1) Income tax (benefit) provision $ (3,023 ) $ 1,595 Effective income tax rate (35.6 )% 20.4 % (1) As discussed in Note 2 to these consolidated financial statements, we early adopted ASU 2016-09 relating to stock-based compensation during the three months ended September 30, 2016. Under ASU 2016-09, tax benefits in excess of compensation costs (windfalls) generated upon the exercise or settlement of stock awards are no longer recognized as additional paid-in capital but are instead recognized as a reduction to income tax expense. This change in accounting for income taxes was effective for us on a prospective basis as of the beginning of the 2016 fiscal year. The decrease in our effective income tax rate during the three months ended March 31, 2017 , when compared to the same period in 2016 , was primarily due to a $6.1 million discrete tax benefit to expense relating to stock-based compensation items, as compared to a $1.1 million discrete tax benefit for the same period in 2016. The increase in the discrete tax benefit for the three months ended March 31, 2017 , as compared to the same period in 2016, was attributable to an increase in the market price for shares of our common stock, as reported by the NASDAQ Stock Market LLC ("NASDAQ"), as well as an increase in the number of stock awards that vested and were exercised. Our effective income tax rate may fluctuate quarterly as a result of factors, including transactions entered into, changes in the geographic distribution of our earnings or losses, our assessment of certain tax contingencies, valuation allowances, and changes in tax law in jurisdictions where we conduct business. We have deferred tax assets for federal, state, and international net operating loss carryforwards and state tax credits. The federal and state net operating loss carryforwards are subject to various Internal Revenue Code limitations and applicable state tax laws. A portion of the foreign and state net operating loss carryforwards and a portion of state tax credits have a valuation reserve due to the uncertainty of realizing such carryforwards and credits in the future. The total amount of unrecognized tax benefit that, if recognized, would favorably affect the effective income tax rate, was $2.4 million and $2.4 million at March 31, 2017 and December 31, 2016 , respectively. We recognize accrued interest and penalties, if any, related to unrecognized tax benefits as a component of income tax expense.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	10. Stock-based Compensation Stock-based compensation expense is allocated to cost of revenue and operating expenses on the 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 (dollars in thousands) 2017 2016 Included in cost of revenue: Cost of subscriptions $ 294 $ 275 Cost of maintenance 86 118 Cost of services and other 411 452 Total included in cost of revenue 791 845 Included in operating expenses: Sales, marketing and customer success 1,439 896 Research and development 1,717 1,471 General and administrative 5,347 4,531 Total included in operating expenses 8,503 6,898 Total stock-based compensation expense $ 9,294 $ 7,743

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Stockholders' Equity	11. Stockholders' Equity Dividends Our Board of Directors has adopted a dividend policy, which provides for the distribution to stockholders of a portion of cash generated by us that is in excess of operational needs and capital expenditures. The 2014 Credit Facility limits the amount of dividends payable and certain state laws restrict the amount of dividends distributed. In February 2017 , our Board of Directors approved an annual dividend rate of $0.48 per share to be made in quarterly payments. Dividend payments are not guaranteed and our Board of Directors may decide, in its absolute discretion, at any time and for any reason, not to declare and pay further dividends. The following table provides information with respect to quarterly dividends of $0.12 per share paid on common stock during the three months ended March 31, 2017 . Declaration Date Dividend per Share Record Date Payable Date February 8, 2017 $ 0.12 February 28 March 15 On May 1, 2017 , our Board of Directors declared a second quarter dividend of $0.12 per share payable on June 15, 2017 to stockholders of record on May 26, 2017 . Changes in accumulated other comprehensive loss by component The changes in accumulated other comprehensive loss by component, consisted of the following: Three months ended (dollars in thousands) 2017 2016 Accumulated other comprehensive loss, beginning of period $ (457 ) $ (825 ) By component: Gains and losses on cash flow hedges: Accumulated other comprehensive income (loss) balance, beginning of period $ 25 $ (19 ) Other comprehensive income (loss) before reclassifications, net of tax effects of $(71) and $555 110 (856 ) Amounts reclassified from accumulated other comprehensive loss to interest expense 119 308 Tax benefit included in provision for income taxes (47 ) (121 ) Total amounts reclassified from accumulated other comprehensive loss 72 187 Net current-period other comprehensive income (loss) 182 (669 ) Accumulated other comprehensive income (loss) balance, end of period $ 207 $ (688 ) Foreign currency translation adjustment: Accumulated other comprehensive loss balance, beginning of period $ (482 ) $ (806 ) Translation adjustments 100 403 Accumulated other comprehensive loss balance, end of period (382 ) (403 ) Accumulated other comprehensive loss, end of period $ (175 ) $ (1,091 )

Segment Information

Segment Information	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Segment Information	12. Segment Information During the first quarter of 2017, we changed the names of our reportable segments. However, there was no change in the determination of our reportable segments or our reporting units. As of March 31, 2017 , our reportable segments were the General Markets Group ("GMG"), the Enterprise Markets Group ("EMG"), and the International Markets Group ("IMG"). Following is a description of each reportable segment: • The GMG is generally focused on marketing, sales, delivery and support to all emerging and mid-sized prospects and customers in North America; • The EMG is generally focused on marketing, sales, delivery and support to all large and/or strategic prospects and customers in North America; and • The IMG is focused on marketing, sales, delivery and support to all prospects and customers outside of North America. Our chief operating decision maker is our chief executive officer ("CEO"). The CEO reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance. The CEO uses internal financial reports that provide segment revenues and operating income, excluding stock-based compensation expense, amortization expense, depreciation expense, research and development expense and certain corporate sales, marketing, general and administrative expenses. Currently, the CEO believes that the exclusion of these costs allows for a better understanding of the operating performance of the operating units and management of other operating expenses and cash needs. The CEO does not review any segment balance sheet information. Summarized reportable segment financial results, were as follows: Three months ended (dollars in thousands) 2017 2016 Revenue by segment: GMG $ 94,901 $ 87,952 EMG 79,632 71,499 IMG 9,056 9,758 Other (1) 32 47 Total revenue $ 183,621 $ 169,256 Segment operating income (2) : GMG $ 45,704 $ 42,611 EMG 42,475 35,766 IMG 1,249 996 Other (1) 16 30 89,444 79,403 Less: Corporate unallocated costs (3) (59,025 ) (50,415 ) Stock-based compensation costs (9,294 ) (7,743 ) Amortization expense (10,546 ) (10,633 ) Interest expense (2,377 ) (2,675 ) Other income (expense), net 286 (105 ) Income before provision for income taxes $ 8,488 $ 7,832 (1) Other includes revenue and the related costs from the sale of solutions and services not directly attributable to a reportable segment. (2) Segment operating income includes direct, controllable costs related to the sale of solutions and services by the reportable segment. (3) Corporate unallocated costs include research and development, depreciation expense, and certain corporate sales, marketing, general and administrative expenses.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2017
Subsequent Events [Abstract]
Subsequent Events	13. Subsequent Events AcademicWorks acquisition On April 3, 2017 , we acquired all of the outstanding shares of capital stock, including all voting equity interests, of AcademicWorks, Inc., a Texas corporation ("AcademicWorks"), pursuant to a stock purchase agreement. AcademicWorks is the market leader in scholarship management for higher education and K-12 institutions, foundations, and grant-making institutions. The acquisition extends our offerings for our higher education, K-12, and corporate and foundation customers. We acquired AcademicWorks for an aggregate purchase price of $50.0 million in cash, subject to certain adjustments set forth in the stock purchase agreement. We financed the acquisition through a draw down of a revolving credit loan under the 2014 Credit Facility. As a result of the acquisition, AcademicWorks has become a wholly-owned subsidiary of ours. We will include the operating results of AcademicWorks, as well as any goodwill arising from the acquisition, in our consolidated financial statements primarily within EMG from the date of acquisition. During the three months ended March 31, 2017, we incurred insignificant acquisition-related expenses associated with the acquisition of AcademicWorks, which were recorded in general and administrative expense. Due to the timing of the transaction, the initial accounting for this acquisition, including the measurement of assets acquired, liabilities assumed and goodwill, is not complete and is pending detailed analyses of the facts and circumstances that existed as of the April 3, 2017 acquisition date.

Basis of Presentation (Details)

Basis of Presentation (Details)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Unaudited interim consolidated financial statements	Unaudited interim consolidated financial statements The accompanying interim consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to state fairly the consolidated balance sheets, consolidated statements of comprehensive income, consolidated statements of cash flows and consolidated statements of stockholders’ equity, for the periods presented in accordance with accounting principles generally accepted in the United States ("GAAP"). The consolidated balance sheet at December 31, 2016 , has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017 , 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. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 , and other forms filed with the SEC from time to time. Reclassifications Due to the insignificance of our revenue from "license fees and other," we have combined that revenue with our "services" revenue beginning in 2017. In order to provide comparability between periods presented, "services" and "license fees and other" have been combined within "services and other" in the previously reported consolidated statements of comprehensive income to conform to presentation of the current period. Similarly, "cost of services" and "cost of license fees and other" have been combined within "cost of services and other" in the previously reported consolidated statements of comprehensive income to conform to presentation of the current period .
Basis of consolidation	Basis of consolidation The consolidated financial statements include the accounts of Blackbaud, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Recently adopted accounting pronouncements	Recently adopted accounting pronouncements As previously disclosed, during the three months ended September 30, 2016 we early adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09") , which addresses, among other items, the accounting for income taxes and forfeitures, and cash flow presentation of share-based compensation. The early adoption of ASU 2016-09 increased net income for the three months ended March 31, 2016, and resulted in an increase in net cash provided by operating activities and a decrease in net cash provided by financing activities for the three months ended March 31, 2016. Detailed information regarding the impact of our adoption of ASU 2016-09 can be found in our annual report on Form 10-K for the year ended December 31, 2016.
Recently issued accounting pronouncements	Recently issued accounting pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment ("ASU 2017-04") , which removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted, and applied prospectively. We do not expect ASU 2017-04 to have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business ("ASU 2017-01") , which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted, and applied prospectively. We are currently evaluating the impact of adopting this standard. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash ("ASU 2016-18") , which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted, including adoption in an interim period, but any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The new standard must be adopted retrospectively. We are currently evaluating the impact of this standard on our consolidated statements of cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02) . ASU 2016-02 will require lessees to record most leases on their balance sheets but recognize expenses in the income statement in a manner similar to current guidance. The updated guidance also eliminates certain real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. All entities will classify leases to determine how to recognize lease-related revenue and expense. Classification will continue to affect amounts that lessors record on the balance sheet. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. Upon adoption, entities will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. We expect ASU 2016-02 will impact our consolidated financial statements and are currently evaluating the extent of the impact that implementation of this standard will have on adoption. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09) . ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The standard also provides guidance on the recognition of costs related to obtaining customer contracts. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. ASU 2014-09 will be effective for us beginning in the first quarter of 2018. We are currently evaluating the transition methods and the impact that the adoption of ASU 2014-09 will have on our consolidated financial statements and related disclosures. As a result of our evaluation to date, we expect that ASU 2014-09 will generally result in a longer deferral of commissions expense as compared with our current amortization periods for such costs, and may result in the deferral of more sales commissions. In addition, we expect changes in the allocation of transactions prices for contracts where we sell perpetual software licenses as ASU 2014-09 requires that the transaction price in a contract be allocated based on relative standalone selling prices of the separate performance obligations. We also anticipate incremental disclosures, including, but not limited to, quantitative reconciliations of opening and closing balances of contract assets and liabilities, the value of remaining performance obligations at the end of each reporting period, and disaggregation of revenue.
Legal proceedings	Legal proceedings We are subject to legal proceedings and claims that arise in the ordinary course of business. We make a provision for a loss contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

Goodwill and Other Intangible22

Goodwill and Other Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Change in Goodwill by Reportable Segment	The change in goodwill for each reportable segment (as defined in Note 12 below) during the three months ended March 31, 2017 , consisted of the following: (dollars in thousands) EMG GMG IMG Total Balance at December 31, 2016 $ 241,334 $ 192,238 $ 4,668 $ 438,240 Adjustments related to prior year business combination (1) (21 ) (37 ) (1 ) (59 ) Effect of foreign currency translation — — 126 126 Balance at March 31, 2017 $ 241,313 $ 192,201 $ 4,793 $ 438,307 (1) The change in goodwill was related to a post-closing working capital adjustment associated with the prior year acquisition of Good+Geek, Inc. ("Attentive.ly").

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Computation of Basic and Diluted Earnings Per Share	The following table sets forth the computation of basic and diluted earnings per share: Three months ended (dollars in thousands, except per share amounts) 2017 2016 Numerator: Net income $ 11,511 $ 6,237 Denominator: Weighted average common shares 46,501,761 45,967,863 Add effect of dilutive securities: Stock-based awards 981,079 1,096,301 Weighted average common shares assuming dilution 47,482,840 47,064,164 Earnings per share: Basic $ 0.25 $ 0.14 Diluted $ 0.24 $ 0.13 Anti-dilutive shares excluded from calculations of diluted earnings per share 199,199 55,844

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Assets and Liabilities Measured at Fair Value on a Recurring Basis	Financial assets and liabilities measured at fair value on a recurring basis consisted of the following, as of: Fair value measurement using (dollars in thousands) Level 1 Level 2 Level 3 Total Fair value as of March 31, 2017 Financial assets: Derivative instruments (1) $ — $ 343 $ — $ 343 Total financial assets $ — $ 343 $ — $ 343 Fair value as of December 31, 2016 Financial assets: Derivative instruments (1) $ — $ 206 $ — $ 206 Total financial assets $ — $ 206 $ — $ 206 Fair value as of December 31, 2016 Financial liabilities: Derivative instruments (1) $ — $ 163 $ — $ 163 Total financial liabilities $ — $ 163 $ — $ 163 (1) The fair value of our interest rate swaps was based on model-driven valuations using LIBOR rates, which are observable at commonly quoted intervals. Accordingly, our interest rate swaps are classified within Level 2 of the fair value hierarchy.

Consolidated Financial Statem25

Consolidated Financial Statement Details (Tables)	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Components of Accrued Expenses and Other Liabilities	Accrued expenses and other liabilities (dollars in thousands) March 31, December 31, Accrued bonuses $ 8,667 $ 19,217 Accrued commissions and salaries 5,478 9,352 Lease incentive obligations 5,360 5,604 Customer credit balances 4,759 5,148 Deferred rent liabilities 4,116 4,110 Taxes payable 2,331 3,452 Unrecognized tax benefit 3,359 3,295 Accrued subscriptions 3,032 2,840 Accrued vacation costs 2,169 2,214 Accrued health care costs 2,683 1,495 Other liabilities 4,919 6,002 Total accrued expenses and other liabilities 46,873 62,729 Less: Long-term portion 7,801 8,533 Accrued expenses and other current liabilities $ 39,072 $ 54,196

Derivative Instruments (Tables)

Derivative Instruments (Tables)	3 Months Ended
	Mar. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Fair Values of Derivative Instruments	The fair values of our derivative instruments were as follows as of: (dollars in thousands) Balance sheet location March 31, December 31, Derivative instruments designated as hedging instruments: Interest rate swap, current portion Prepaid expenses and other current assets $ 343 $ — Interest rate swap, long-term portion Other assets $ — $ 206 Total derivative instruments designated as hedging instruments $ 343 $ 206 March 31, December 31, Derivative instruments designated as hedging instruments: Interest rate swaps, long-term portion Other liabilities — 163 Total derivative instruments designated as hedging instruments $ — $ 163
Effects of Derivative Instruments in Cash Flow Hedging Relationships	The effects of derivative instruments in cash flow hedging relationships were as follows: Gain (loss) recognized in accumulated other comprehensive loss as of Location of gain (loss) reclassified from accumulated other comprehensive loss into income Gain (loss) reclassified from accumulated other comprehensive loss into income (dollars in thousands) March 31, Three months ended March 31, 2017 Interest rate swaps $ 343 Interest expense $ (119 ) March 31, Three months ended March 31, 2016 Interest rate swaps $ (1,135 ) Interest expense $ (308 )

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Schedule of Effective Income Tax Rates	Our Income tax (benefit) provision and effective income tax rates including the effects of period-specific events, were: Three months ended (dollars in thousands) 2017 2016 (1) Income tax (benefit) provision $ (3,023 ) $ 1,595 Effective income tax rate (35.6 )% 20.4 % (1) As discussed in Note 2 to these consolidated financial statements, we early adopted ASU 2016-09 relating to stock-based compensation during the three months ended September 30, 2016. Under ASU 2016-09, tax benefits in excess of compensation costs (windfalls) generated upon the exercise or settlement of stock awards are no longer recognized as additional paid-in capital but are instead recognized as a reduction to income tax expense. This change in accounting for income taxes was effective for us on a prospective basis as of the beginning of the 2016 fiscal year.

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Stock-Based Compensation Expense	The following table summarizes stock-based compensation expense: Three months ended (dollars in thousands) 2017 2016 Included in cost of revenue: Cost of subscriptions $ 294 $ 275 Cost of maintenance 86 118 Cost of services and other 411 452 Total included in cost of revenue 791 845 Included in operating expenses: Sales, marketing and customer success 1,439 896 Research and development 1,717 1,471 General and administrative 5,347 4,531 Total included in operating expenses 8,503 6,898 Total stock-based compensation expense $ 9,294 $ 7,743

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Changes in accumulated other comprehensive loss by component	The changes in accumulated other comprehensive loss by component, consisted of the following: Three months ended (dollars in thousands) 2017 2016 Accumulated other comprehensive loss, beginning of period $ (457 ) $ (825 ) By component: Gains and losses on cash flow hedges: Accumulated other comprehensive income (loss) balance, beginning of period $ 25 $ (19 ) Other comprehensive income (loss) before reclassifications, net of tax effects of $(71) and $555 110 (856 ) Amounts reclassified from accumulated other comprehensive loss to interest expense 119 308 Tax benefit included in provision for income taxes (47 ) (121 ) Total amounts reclassified from accumulated other comprehensive loss 72 187 Net current-period other comprehensive income (loss) 182 (669 ) Accumulated other comprehensive income (loss) balance, end of period $ 207 $ (688 ) Foreign currency translation adjustment: Accumulated other comprehensive loss balance, beginning of period $ (482 ) $ (806 ) Translation adjustments 100 403 Accumulated other comprehensive loss balance, end of period (382 ) (403 ) Accumulated other comprehensive loss, end of period $ (175 ) $ (1,091 )

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Reportable Segment Financial Results	Summarized reportable segment financial results, were as follows: Three months ended (dollars in thousands) 2017 2016 Revenue by segment: GMG $ 94,901 $ 87,952 EMG 79,632 71,499 IMG 9,056 9,758 Other (1) 32 47 Total revenue $ 183,621 $ 169,256 Segment operating income (2) : GMG $ 45,704 $ 42,611 EMG 42,475 35,766 IMG 1,249 996 Other (1) 16 30 89,444 79,403 Less: Corporate unallocated costs (3) (59,025 ) (50,415 ) Stock-based compensation costs (9,294 ) (7,743 ) Amortization expense (10,546 ) (10,633 ) Interest expense (2,377 ) (2,675 ) Other income (expense), net 286 (105 ) Income before provision for income taxes $ 8,488 $ 7,832 (1) Other includes revenue and the related costs from the sale of solutions and services not directly attributable to a reportable segment. (2) Segment operating income includes direct, controllable costs related to the sale of solutions and services by the reportable segment. (3) Corporate unallocated costs include research and development, depreciation expense, and certain corporate sales, marketing, general and administrative expenses.

Organization (Details)

Organization (Details)	Mar. 31, 2017Customers
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Approximate number of customers distributed across verticals	35,000

Goodwill and Other Intangible32

Goodwill and Other Intangible Assets (Change in Goodwill by Reportable Segment) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 438,240
Effect of foreign currency translation	126
Ending balance	438,307
EMG [Member]
Goodwill [Roll Forward]
Effect of foreign currency translation	0
GMG [Member]
Goodwill [Roll Forward]
Effect of foreign currency translation	0
IMG [Member]
Goodwill [Roll Forward]
Effect of foreign currency translation	126
Attentive.ly [Member]
Goodwill [Roll Forward]
Adjustments related to prior year business combination	(59)	[1]
Attentive.ly [Member] | EMG [Member]
Goodwill [Roll Forward]
Beginning balance	241,334
Adjustments related to prior year business combination	(21)	[1]
Ending balance	241,313
Attentive.ly [Member] | GMG [Member]
Goodwill [Roll Forward]
Beginning balance	192,238
Adjustments related to prior year business combination	(37)	[1]
Ending balance	192,201
Attentive.ly [Member] | IMG [Member]
Goodwill [Roll Forward]
Beginning balance	4,668
Adjustments related to prior year business combination	(1)	[1]
Ending balance	$ 4,793
[1]	The change in goodwill was related to a post-closing working capital adjustment associated with the prior year acquisition of Good+Geek, Inc. ("Attentive.ly").

Earnings Per Share (Computation

Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net income	$ 11,511	$ 6,237
Weighted average common shares	46,501,761	45,967,863
Stock-based awards	981,079	1,096,301
Weighted average common shares assuming dilution	47,482,840	47,064,164
Earnings (Loss) Per Share, Basic and Diluted [Abstract]
Basic earnings per share	$ 0.25	$ 0.14
Diluted earnings per share	$ 0.24	$ 0.13
Anti-dilutive shares excluded from calculations of diluted earnings per share	199,199	55,844

Fair Value Measurements (Assets

Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Fair value measurements, recurring [Member] - USD ($) $ in Thousands		Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities			$ 163
Total financial liabilities			163
Derivative assets		$ 343	206
Total financial assets		343	206
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities			0
Total financial liabilities			0
Derivative assets		0	0
Total financial assets		0	0
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	[1]		163
Total financial liabilities			163
Derivative assets	[1]	343	206
Total financial assets		343	206
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities			0
Total financial liabilities			0
Derivative assets		0	0
Total financial assets		$ 0	$ 0
[1]	The fair value of our interest rate swaps was based on model-driven valuations using LIBOR rates, which are observable at commonly quoted intervals. Accordingly, our interest rate swaps are classified within Level 2 of the fair value hierarchy.

Consolidated Financial Statem35

Consolidated Financial Statement Details (Components of Accrued Expenses and Other Liabilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued bonuses	$ 8,667	$ 19,217
Accrued commissions and salaries	5,478	9,352
Lease incentive obligations	5,360	5,604
Customer credit balances	4,759	5,148
Deferred rent liabilities	4,116	4,110
Taxes payable	2,331	3,452
Unrecognized tax benefit	3,359	3,295
Accrued subscriptions	3,032	2,840
Accrued vacation costs	2,169	2,214
Accrued health care costs	2,683	1,495
Other liabilities	4,919	6,002
Total accrued expenses and other liabilities	46,873	62,729
Less: Long-term portion	7,801	8,533
Accrued expenses and other current liabilities	$ 39,072	$ 54,196

Derivative Instruments (Details

Derivative Instruments (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Oct. 31, 2015	Mar. 31, 2014
Derivative [Line Items]
Ineffective portion of interest rate swap(s)	$ 0	$ 0
March 2014 Swap [Member]
Derivative [Line Items]
Notional value of the swap agreement				$ 125
Future notional value of the swap agreement				$ 75
October 2015 Swap [Member]
Derivative [Line Items]
Notional value of the swap agreement			$ 75

Derivative Instruments (Fair Va

Derivative Instruments (Fair Value of Derivative Instruments) (Details) - Designated as hedging instrument [Member] - Interest rate swap [Member] - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Derivatives, Fair Value [Line Items]
Total derivative assets designated as hedging instruments	$ 343	$ 206
Total derivative liabilities designated as hedging instruments	0	163
Prepaid expenses and other current assets [Member]
Derivatives, Fair Value [Line Items]
Interest rate swap assets, current	343	0
Other assets [Member]
Derivatives, Fair Value [Line Items]
Interest rate swap assets, long-term portion	0	206
Other liabilities [Member]
Derivatives, Fair Value [Line Items]
Interest rate swap liabilities, long-term portion	$ 0	$ 163

Derivative Instruments (Effects

Derivative Instruments (Effects of Derivative Instruments in Cash Flow Hedging Relationships) (Details) - Interest rate swap [Member] - Cash flow hedging [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in accumulated other comprehensive loss	$ 343	$ (1,135)
Interest expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified from accumulated other comprehensive loss into income	$ (119)	$ (308)

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating Leased Assets [Line Items]
Total rent expense	$ 4	$ 2
Third-party technology [Member]
Long-term Purchase Commitment [Line Items]
Remaining aggregate minimum purchase commitment	$ 51
Minimum [Member] | Third-party technology [Member]
Long-term Purchase Commitment [Line Items]
Contractual arrangement length	1 year
Maximum [Member] | Third-party technology [Member]
Long-term Purchase Commitment [Line Items]
Contractual arrangement length	5 years
Current HQ Facility [Member] | South Carolina [Member]
Operating Leased Assets [Line Items]
Reduction in rent expense		$ 1

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Effective income tax rate reconciliation, deduction, excess tax benefit (deficiency), amount	$ 6.1	$ 1.1
Unrecognized tax benefit that, if recognized, would favorably affect the effective tax rate	$ 2.4		$ 2.4

Income Taxes (Schedule of Effec

Income Taxes (Schedule of Effective Income Tax Rates) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	[1]
Income Tax Disclosure [Abstract]
Income tax (benefit) provision	$ (3,023)	$ 1,595
Effective income tax rate	(35.60%)	20.40%
[1]	As discussed in Note 2 to these consolidated financial statements, we early adopted ASU 2016-09 relating to stock-based compensation during the three months ended September 30, 2016. Under ASU 2016-09, tax benefits in excess of compensation costs (windfalls) generated upon the exercise or settlement of stock awards are no longer recognized as additional paid-in capital but are instead recognized as a reduction to income tax expense. This change in accounting for income taxes was effective for us on a prospective basis as of the beginning of the 2016 fiscal year.

Stock-Based Compensation (Summa

Stock-Based Compensation (Summary of Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated stock-based compensation expense	$ 9,294	$ 7,743
Cost of subscriptions [Member]
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated stock-based compensation expense	294	275
Cost of maintenance [Member]
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated stock-based compensation expense	86	118
Cost of services and other [Member]
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated stock-based compensation expense	411	452
Total included in cost of revenue [Member]
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated stock-based compensation expense	791	845
Sales, marketing and customer success [Member]
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated stock-based compensation expense	1,439	896
Research and development [Member]
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated stock-based compensation expense	1,717	1,471
General and administrative [Member]
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated stock-based compensation expense	5,347	4,531
Total included in operating expenses [Member]
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated stock-based compensation expense	$ 8,503	$ 6,898

Stockholders' Equity (Details)

Stockholders' Equity (Details) - $ / shares	Mar. 15, 2017	Feb. 28, 2017	Mar. 31, 2017	Mar. 31, 2016	Jun. 15, 2017
Dividends Payable [Line Items]
Annual dividend per share approved (in dollars per share)		$ 0.48
Quarterly dividends paid per share (in dollars per share)			$ 0.12
Dividends paid per share (in dollars per share)	$ 0.12		$ 0.12	$ 0.12
Subsequent event [Member]
Dividends Payable [Line Items]
Dividends payable per share (in dollars per share)					$ 0.12

Stockholders' Equity (Changes i

Stockholders' Equity (Changes in accumulated other comprehensive loss by component) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Accumulated Other Comprehensive Income [Roll Forward]
Accumulated other comprehensive (loss) income, beginning of period	$ (457)	$ (825)
Translation adjustments	100	403
Accumulated other comprehensive (loss) income, end of period	(175)	(1,091)
Gains and losses on cash flow hedges [Member]
Accumulated Other Comprehensive Income [Roll Forward]
Accumulated other comprehensive (loss) income, beginning of period	25	(19)
Other comprehensive loss before reclassifications	110	(856)
Amounts reclassified from accumulated other comprehensive loss to interest expense	119	308
Tax benefit included in provision for income taxes	(47)	(121)
Total amounts reclassified from accumulated other comprehensive loss	72	187
Net current-period other comprehensive income (loss)	182	(669)
Accumulated other comprehensive (loss) income, end of period	207	(688)
Unrealized gains (losses), tax effects	(71)	555
Foreign currency translation adjustment [Member]
Accumulated Other Comprehensive Income [Roll Forward]
Accumulated other comprehensive (loss) income, beginning of period	(482)	(806)
Translation adjustments	100	403
Accumulated other comprehensive (loss) income, end of period	$ (382)	$ (403)

Segment Information (Reportable

Segment Information (Reportable Segment Financial Results) (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
Total revenue		$ 183,621	$ 169,256
Total segment operating income		10,579	10,612
Corporate unallocated costs	[1]	(59,025)	(50,415)
Stock-based compensation costs		(9,294)	(7,743)
Amortization expense		(10,546)	(10,633)
Interest expense		(2,377)	(2,675)
Other income (expense), net		286	(105)
Income before provision for income taxes		8,488	7,832
GMG [Member]
Segment Reporting Information [Line Items]
Total revenue		94,901	87,952
Total segment operating income	[2]	45,704	42,611
EMG [Member]
Segment Reporting Information [Line Items]
Total revenue		79,632	71,499
Total segment operating income	[2]	42,475	35,766
IMG [Member]
Segment Reporting Information [Line Items]
Total revenue		9,056	9,758
Total segment operating income	[2]	1,249	996
Other [Member]
Segment Reporting Information [Line Items]
Total revenue	[3]	32	47
Total segment operating income	[2],[3]	16	30
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total segment operating income		$ 89,444	$ 79,403
[1]	Corporate unallocated costs include research and development, depreciation expense, and certain corporate sales, marketing, general and administrative expenses.
[2]	Segment operating income includes direct, controllable costs related to the sale of solutions and services by the reportable segment.
[3]	Other includes revenue and the related costs from the sale of solutions and services not directly attributable to a reportable segment.

Subsequent Events (Details)

Subsequent Events (Details) $ in Millions	Apr. 03, 2017USD ($)
Subsequent event [Member] | AcademicWorks [Member]
Subsequent Event [Line Items]
Total cash consideration paid for the acquisition	$ 50