Document
Document - shares | 3 Months Ended | |
Mar. 31, 2023 | May 01, 2023 | |
Document Information [Line Items] | ||
Document type | 10-Q | |
Document quarterly report | true | |
Document period end date | Mar. 31, 2023 | |
Document transition report | false | |
Entity file number | 000-50600 | |
Entity registrant name | Blackbaud, Inc. | |
Entity incorporation, state or country code | DE | |
Entity tax identification number | 11-2617163 | |
Entity address, address line one | 65 Fairchild Street | |
Entity address, city | Charleston | |
Entity address, state | SC | |
Entity address, postal zip code | 29492 | |
City area code | 843 | |
Local phone number | 216-6200 | |
Entity current reporting status | Yes | |
Entity interactive data current | Yes | |
Entity filer category | Large Accelerated Filer | |
Entity small business | false | |
Entity emerging growth company | false | |
Entity shell company | false | |
Entity common stock, shares outstanding | 53,862,559 | |
Amendment flag | false | |
Document fiscal year focus | 2023 | |
Document fiscal period focus | Q1 | |
Entity central index key | 0001280058 | |
Current fiscal year end date | --12-31 | |
Common stock [Member] | ||
Document Information [Line Items] | ||
Title of 12(b) security | Common Stock, $0.001 Par Value | |
Trading symbol | BLKB | |
Security exchange name | NASDAQ | |
Preferred stock purchase rights [Member] | ||
Document Information [Line Items] | ||
Title of 12(b) security | Preferred Stock Purchase Rights | |
No Trading Symbol Flag | true | |
Security exchange name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 24,083 | $ 31,691 |
Total restricted cash | 364,071 | 702,240 |
Accounts receivable, net of allowance of $7,688 and $7,318 at March 31, 2023 and December 31, 2022, respectively | 100,253 | 102,809 |
Customer funds receivable | 2,136 | 249 |
Prepaid expenses and other current assets | 88,779 | 81,654 |
Total current assets | 579,322 | 918,643 |
Property and equipment, net | 105,309 | 107,426 |
Operating lease right-of-use assets | 47,176 | 45,899 |
Software and content development costs, net | 145,705 | 141,023 |
Goodwill | 1,051,652 | 1,050,272 |
Intangible assets, net | 622,237 | 635,136 |
Other assets | 87,947 | 94,304 |
Total assets | 2,639,348 | 2,992,703 |
Current liabilities: | ||
Trade accounts payable | 46,528 | 42,559 |
Accrued expenses and other current liabilities | 72,799 | 86,002 |
Due to customers | 364,397 | 700,860 |
Debt, current portion | 19,136 | 18,802 |
Deferred revenue, current portion | 361,003 | 382,419 |
Total current liabilities | 863,863 | 1,230,642 |
Debt, net of current portion | 858,912 | 840,241 |
Deferred tax liability | 131,460 | 125,759 |
Deferred revenue, net of current portion | 6,956 | 2,817 |
Operating lease liabilities, net of current portion | 45,190 | 44,918 |
Other liabilities | 13,234 | 4,294 |
Total liabilities | 1,919,615 | 2,248,671 |
Commitments and contingencies (see Note 8) | ||
Stockholders' equity: | ||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock; 20,000,000 shares authorized, none 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 | 69,154,863 | 67,814,044 |
Common stock, $0.001 par value; 180,000,000 shares authorized, 69,154,863 and 67,814,044 shares issued at March 31, 2023 and December 31, 2022, respectively | $ 69 | $ 68 |
Additional paid-in capital | $ 1,105,189 | $ 1,075,264 |
Treasury stock, shares | 15,278,827 | 14,745,230 |
Treasury stock, at cost; 15,278,827 and 14,745,230 shares at March 31, 2023 and December 31, 2022, respectively | $ (568,277) | $ (537,287) |
Accumulated other comprehensive income | 404 | 8,938 |
Retained earnings | 182,348 | 197,049 |
Total stockholders' equity | 719,733 | 744,032 |
Total liabilities and stockholders' equity | $ 2,639,348 | $ 2,992,703 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 7,688 | $ 7,318 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue | ||
Revenue | $ 261,753 | $ 257,124 |
Cost of revenue | ||
Cost of revenue | 123,112 | 123,362 |
Gross profit | 138,641 | 133,762 |
Operating expenses | ||
Sales, marketing and customer success | 54,385 | 55,216 |
Research and development | 40,591 | 39,952 |
General and administrative | 52,838 | 43,762 |
Amortization | 774 | 811 |
Total operating expenses | 148,588 | 139,741 |
Loss from operations | (9,947) | (5,979) |
Interest expense | (10,662) | (7,599) |
Other income, net | 2,007 | 1,121 |
Loss before provision for income taxes | (18,602) | (12,457) |
Income tax benefit | (3,901) | (2,050) |
Net loss | $ (14,701) | $ (10,407) |
Loss per share | ||
Basic earnings per share | $ (0.28) | $ (0.20) |
Diluted earnings per share | $ (0.28) | $ (0.20) |
Common shares and equivalents outstanding | ||
Basic weighted average shares | 52,132,999 | 51,199,717 |
Diluted weighted average shares outstanding | 52,132,999 | 51,199,717 |
Other comprehensive (loss) income | ||
Foreign currency translation adjustment | $ 2,158 | $ (2,132) |
Unrealized (loss) gain on derivative instruments, net of tax | (10,692) | 10,905 |
Total other comprehensive (loss) income | (8,534) | 8,773 |
Comprehensive loss | (23,235) | (1,634) |
Recurring [Member] | ||
Revenue | ||
Revenue | 252,748 | 244,666 |
Cost of revenue | ||
Cost of revenue | 114,500 | 112,174 |
One-time services and other [Member] | ||
Revenue | ||
Revenue | 9,005 | 12,458 |
Cost of revenue | ||
Cost of revenue | $ 8,612 | $ 11,188 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (14,701) | $ (10,407) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 27,272 | 25,545 |
Provision for doubtful accounts and sales returns | 1,522 | 1,875 |
Stock-based compensation expense | 29,925 | 27,860 |
Deferred taxes | 9,245 | (7,431) |
Amortization of deferred financing costs and discount | 500 | 645 |
Other non-cash adjustments | (215) | (150) |
Changes in operating assets and liabilities, net of acquisition and disposal of businesses: | ||
Accounts receivable | 1,139 | 9,010 |
Prepaid expenses and other assets | (2,750) | (2,067) |
Trade accounts payable | 3,362 | 15,919 |
Accrued expenses and other liabilities | (15,931) | (13,430) |
Deferred revenue | (17,562) | (22,865) |
Net cash provided by operating activities | 21,806 | 24,504 |
Cash flows from investing activities | ||
Purchase of property and equipment | (1,364) | (4,266) |
Capitalized software and content development costs | (13,967) | (12,683) |
Purchase of net assets of acquired companies, net of cash and restricted cash acquired | 0 | (19,985) |
Net cash used in investing activities | (15,331) | (36,934) |
Cash flows from financing activities | ||
Proceeds from issuance of debt | 92,600 | 59,400 |
Payments on debt | (75,403) | (33,765) |
Employee taxes paid for withheld shares upon equity award settlement | (31,417) | (34,674) |
Change in due to customers | (337,159) | (315,294) |
Change in customer funds receivable | (1,859) | (1,115) |
Net cash used in financing activities | (353,238) | (325,448) |
Effect of exchange rate on cash, cash equivalents and restricted cash | 986 | (504) |
Net decrease in cash, cash equivalents and restricted cash | (345,777) | (338,382) |
Cash, cash equivalents and restricted cash, beginning of period | 733,931 | 651,762 |
Cash, cash equivalents and restricted cash, end of period | 388,154 | $ 313,380 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||
Cash and cash equivalents | 24,083 | |
Total restricted cash | 364,071 | |
Total cash, cash equivalents and restricted cash in the statement of cash flows | $ 388,154 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock [Member] | Additional paid-in capital [Member] | Treasury Stock, Common | Accumulated other comprehensive income (loss) [Member] | Retained earnings [Member] | |
Balance (in shares) at Dec. 31, 2021 | 66,165,666 | ||||||
Balance at Dec. 31, 2021 | $ 717,060 | $ 66 | $ 968,927 | $ (500,911) | $ 6,522 | $ 242,456 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (10,407) | (10,407) | |||||
Vesting of restricted stock units (in shares) | 976,312 | ||||||
Vesting of restricted stock units | 0 | 0 | |||||
Employee taxes paid for withheld shares upon equity award settlement | (34,674) | (34,674) | |||||
Stock-based compensation | 27,860 | 27,860 | 0 | ||||
Restricted stock grants (in shares) | 580,209 | ||||||
Restricted stock grants | 2 | $ 2 | |||||
Restricted stock cancellations (in shares) | (30,940) | ||||||
Other comprehensive income | 8,773 | 8,773 | |||||
Balance (in shares) at Mar. 31, 2022 | 67,658,172 | ||||||
Balance at Mar. 31, 2022 | 705,050 | $ 68 | 993,223 | (535,585) | 15,295 | 232,049 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock issuance costs related to purchase of EVERFI | (983) | (983) | |||||
Retirements of common stock (in shares) | [1] | (33,075) | |||||
Retirements of common stock | (2,581) | (2,581) | |||||
Balance (in shares) at Dec. 31, 2022 | 67,814,044 | ||||||
Balance at Dec. 31, 2022 | 744,032 | $ 68 | 1,075,264 | (537,287) | 8,938 | 197,049 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (14,701) | (14,701) | |||||
Vesting of restricted stock units (in shares) | 954,147 | ||||||
Vesting of restricted stock units | 0 | 0 | |||||
Employee taxes paid for withheld shares upon equity award settlement | (30,990) | (30,990) | |||||
Stock-based compensation | 29,925 | 29,925 | 0 | ||||
Restricted stock grants (in shares) | 427,941 | ||||||
Restricted stock grants | 1 | $ 1 | |||||
Restricted stock cancellations (in shares) | (41,269) | ||||||
Other comprehensive income | (8,534) | (8,534) | |||||
Balance (in shares) at Mar. 31, 2023 | 69,154,863 | ||||||
Balance at Mar. 31, 2023 | $ 719,733 | $ 69 | $ 1,105,189 | $ (568,277) | $ 404 | $ 182,348 | |
[1]Represents shares retired after determining certain EVERFI's selling shareholders would be paid in cash, rather than shares of our common stock. |
Organization
Organization | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization We are the leading software provider exclusively dedicated to powering social impact. Serving the nonprofit and education sectors, companies committed to social responsibility and individual change makers, our essential software is built to accelerate impact in fundraising, nonprofit financial management, digital giving, grantmaking, corporate social responsibility and education management. A remote-first company, we have operations in the United States, Australia, Canada, Costa Rica and the United Kingdom, supporting users in 100+ countries. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 2. Basis of Presentation Unaudited condensed consolidated interim financial statements The accompanying condensed consolidated interim 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 ("U.S.") ("GAAP"). The consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023, 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 condensed consolidated interim 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, 2022, and other forms filed with the SEC from time to time. Basis of consolidation The condensed consolidated financial statements include the accounts of Blackbaud, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Reportable segment We report our operating results and financial information in one operating and reportable segment. Our chief operating decision maker uses consolidated financial information to make operating decisions, assess financial performance and allocate resources. Our chief operating decision maker is our chief executive officer. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we reconsider and evaluate our estimates and assumptions, including those that impact revenue recognition, long-lived and intangible assets, income taxes, business combinations, stock-based compensation, capitalization of software and content development costs, our allowances for credit losses and sales returns, costs of obtaining contracts, valuation of derivative instruments, loss contingencies and insurance recoveries, among others. Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could materially differ from these estimates. Recently adopted accounting pronouncements In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update 2022-04, Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations ("ASU 2022-04"). This update requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose key terms of the programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The guidance does not affect the recognition, measurement, or financial statement presentation of supplier finance programs. We adopted ASU 2022-04 on January 1, 2023 and the adoption did not have a material impact on our condensed consolidated financial statements. Recently issued accounting pronouncements There are no recently issued accounting pronouncements that we expect to have a material impact on our consolidated financial statements when adopted in the future. Summary of significant accounting policies There have been no material changes to our significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 24, 2023. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 3. Loss Per Share We compute basic loss per share by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares and dilutive potential common shares outstanding during the period. Diluted loss per share reflects 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. Diluted loss per share for the three months ended March 31, 2023 and 2022 was the same as basic loss per share as there were net losses in both periods and inclusion of potentially dilutive securities was anti-dilutive. The following table sets forth the computation of basic and diluted loss per share: Three months ended March 31, (dollars in thousands, except per share amounts) 2023 2022 Numerator: Net loss $ (14,701) $ (10,407) Denominator: Weighted average common shares 52,132,999 51,199,717 Add effect of dilutive securities: Stock-based awards — — Weighted average common shares assuming dilution 52,132,999 51,199,717 Loss per share Basic $ (0.28) $ (0.20) Diluted $ (0.28) $ (0.20) Anti-dilutive shares excluded from calculations of diluted loss per share 1,638,453 1,558,751 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. 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 that are measured at fair value on a recurring basis consisted of the following, as of the dates indicated below: Fair value measurement using (dollars in thousands) Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total Fair value as of March 31, 2023 Financial assets: Interest rate swaps $ — $ 26,514 $ — $ 26,514 Foreign currency forward contracts — 96 — 96 Total financial assets $ — $ 26,610 $ — $ 26,610 Fair value as of March 31, 2023 Financial liabilities: Interest rate swaps $ — $ 8,920 $ — $ 8,920 Foreign currency forward contracts — 499 — 499 Contingent consideration obligations — — 2,710 2,710 Total financial liabilities $ — $ 9,419 $ 2,710 $ 12,129 Fair value as of December 31, 2022 Financial assets: Interest rate swaps $ — $ 31,870 $ — $ 31,870 Foreign currency forward contracts — 247 — 247 Total financial assets $ — $ 32,117 $ — $ 32,117 Fair value as of December 31, 2022 Financial liabilities: Foreign currency forward contracts $ — $ 323 $ — $ 323 Contingent consideration obligations — — 2,710 2,710 Total financial liabilities $ — $ 323 $ 2,710 $ 3,033 Our derivative instruments within the scope of Accounting Standards Codification ("ASC") 815, Derivatives and Hedging , are required to be recorded at fair value. Our derivative instruments that are recorded at fair value include interest rate swaps and foreign currency forward contracts. See Note 7 to these condensed consolidated financial statements for additional information about our derivative instruments. 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. Accordingly, our interest rate swaps and foreign currency forward contracts are classified within Level 2 of the fair value hierarchy. Our financial contracts that were indexed to LIBOR were modified to reference SOFR during the three months ended September 30, 2022. These modifications did not have a significant financial impact. Contingent consideration obligations arise from business acquisitions. The fair values are based on discounted cash flow analyses reflecting a probability-weighted assessment approach derived from the likelihood of possible achievement of specified performance measures or events and captures the contractual nature of the contingencies, commercial risk, and the time value of money. 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, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, 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. Our fixed rate debt is also classified within Level 2 of the fair value hierarchy. We did not transfer any assets or liabilities among the levels within the fair value hierarchy during the three months ended March 31, 2023. Non-recurring fair value measurements Assets and liabilities that are measured at fair value on a non-recurring basis include long-lived assets, intangible assets, goodwill and operating lease right-of-use ("ROU") assets. These assets are recognized at fair value during the period in which an acquisition is completed or at lease commencement, 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 long-lived assets, intangible assets acquired and operating lease ROU assets, are based on Level 3 unobservable inputs. In the event of an impairment, we determine the fair value of these assets other than goodwill 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. For goodwill impairment testing, we estimate fair value using market-based methods including the use of market capitalization and consideration of a control premium. |
Consolidated Financial Statemen
Consolidated Financial Statement Details | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Financial Statement Details | 5. Consolidated Financial Statement Details Restricted cash (dollars in thousands) March 31, December 31, Restricted cash due to customers $ 362,261 $ 700,611 Real estate escrow balances and other 1,810 1,629 Total restricted cash $ 364,071 $ 702,240 Prepaid expenses and other assets (dollars in thousands) March 31, December 31, Costs of obtaining contracts (1)(2) $ 71,956 $ 74,272 Prepaid software maintenance and subscriptions (3) 37,125 34,766 Derivative instruments 26,610 32,117 Implementation costs for cloud computing arrangements, net (4)(5) 9,993 10,189 Prepaid insurance 9,962 4,902 Unbilled accounts receivable 7,092 5,775 Taxes, prepaid and receivable 1,728 1,855 Deferred tax assets 1,152 1,153 Other assets 11,108 10,929 Total prepaid expenses and other assets 176,726 175,958 Less: Long-term portion 87,947 94,304 Prepaid expenses and other current assets $ 88,779 $ 81,654 (1) Amortization expense from costs of obtaining contracts was $8.3 million and $8.5 million for the three months ended March 31, 2023 and 2022, respectively. (2) The current portion of costs of obtaining contracts as of March 31, 2023 and December 31, 2022 was $28.5 million and $29.1 million, respectively. (3) The current portion of prepaid software maintenance and subscriptions as of March 31, 2023 and December 31, 2022 was $32.6 million and $31.7 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, 2023 and 2022, respectively. Accumulated amortization for these costs was $5.7 million and $5.2 million as of March 31, 2023 and December 31, 2022, respectively. Accrued expenses and other liabilities (dollars in thousands) March 31, December 31, Accrued legal costs (1) $ 35,705 $ 28,448 Derivative instruments 9,419 323 Customer credit balances 7,990 8,257 Operating lease liabilities, current portion 7,962 7,723 Accrued commissions and salaries 5,407 6,944 Taxes payable 3,580 16,667 Contingent consideration liability 2,710 2,710 Accrued health care costs 2,213 2,467 Accrued vacation costs 2,019 2,156 Accrued transaction-based costs related to payments services 1,882 5,059 Other liabilities 7,146 9,542 Total accrued expenses and other liabilities 86,033 90,296 Less: Long-term portion 13,234 4,294 Accrued expenses and other current liabilities $ 72,799 $ 86,002 (1) All accrued legal costs are classified as current. Other income, net Three months ended March 31, (dollars in thousands) 2023 2022 Interest income $ 1,236 $ 123 Currency revaluation (losses) gains (245) 582 Other income, net 1,016 416 Other income, net $ 2,007 $ 1,121 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt The following table summarizes our debt balances and the related weighted average effective interest rates, which includes the effect of interest rate swap agreements. Debt balance at Weighted average (dollars in thousands) March 31, December 31, March 31, December 31, Credit facility: Revolving credit loans $ 199,400 $ 177,800 5.47 % 5.18 % Term loans 619,688 623,750 4.44 % 4.26 % Real estate loans 57,849 58,189 5.22 % 5.22 % Other debt 3,632 2,247 8.47 % 7.38 % Total debt 880,569 861,986 4.74 % 4.52 % Less: Unamortized discount and debt issuance costs 2,521 2,943 Less: Debt, current portion 19,136 18,802 6.99 % 6.45 % Debt, net of current portion $ 858,912 $ 840,241 4.69 % 4.48 % 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, 2023, we were in compliance with our debt covenants under the 2020 Credit Facility. Real estate loans In August 2020, we completed the purchase of our global headquarters facility. As part of the purchase price, we assumed the seller’s obligations under two senior secured notes with a then-aggregate outstanding principal amount of $61.1 million (collectively, the “Real Estate Loans”). At March 31, 2023, we were in compliance with our debt covenants under the Real Estate Loans. Other debt From time to time, we enter into third-party financing agreements for purchases of software and related services for our internal use. Generally, the agreements are non-interest-bearing notes requiring annual payments. Interest associated with the notes is imputed at the rate we would incur for amounts borrowed under our then-existing credit facility at the inception of the notes. The following table summarizes our currently effective supplier financing agreements as of March 31, 2023: (dollars in thousands) Term Number of First Annual Original Loan Effective dates of agreements (1) : December 2022 39 3 January 2023 $ 1,710 January 2023 36 3 April 2023 2,491 (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, 2023, consisted of the following: (dollars in thousands) Total Balance at December 31, 2022 $ 2,247 Additions 2,491 Settlements (1,106) Balance at March 31, 2023 $ 3,632 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives Instruments | 7. Derivative Instruments We generally use derivative instruments to manage our interest rate and foreign currency exchange risk. We currently have derivatives classified as cash flow hedges and net investment hedges. We do not enter into any derivatives for trading or speculative purposes. All of our derivative instruments are governed by International Swap Dealers Association, Inc. master agreements with our counterparties. As of March 31, 2023 and December 31, 2022, we have presented the fair value of our derivative instruments at the gross amounts in the condensed consolidated balance sheet 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 designated each of the interest rate swaps as cash flow hedges at the inception of the contracts. As of March 31, 2023 and December 31, 2022, the aggregate notional values of the interest rate swaps were $935.0 million and $435.0 million, respectively. All of the contracts have maturities on or before October 2028. 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 the forwards as cash flow hedges at the inception of the contracts. As of March 31, 2023 and December 31, 2022, 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 $27.7 million CAD and $22.6 million CAD, respectively. All of the contracts have maturities of 12 months or less. Net investment hedges We have entered into foreign currency forward contracts to hedge a portion of the foreign currency exposure that arises on translation of our investments denominated in British Pounds ("GBP") into USD. We designated each of these foreign currency forward contracts as net investment hedges at the inception of the contracts. As of March 31, 2023 and December 31, 2022, we had £14.0 million and £11.2 million, respectively, of 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. The fair values of our derivative instruments were as follows as of: Asset derivatives Liability derivatives (dollars in thousands) Balance sheet location March 31, December 31, Balance sheet location March 31, December 31, Derivative instruments designated as hedging instruments: Foreign currency forward contracts, current portion Prepaid expenses and other current assets $ 96 $ 247 Accrued expenses $ 499 $ 323 Interest rate swaps, long-term Other assets 26,514 31,870 Other liabilities 8,920 — Total derivative instruments designated as hedging instruments $ 26,610 $ 32,117 $ 9,419 $ 323 The effects of derivative instruments in cash flow and net investment hedging relationships were as follows: Gain (loss) recognized in accumulated other comprehensive income as of Location of gain (loss) reclassified from accumulated other comprehensive income into loss Gain (loss) reclassified from accumulated other comprehensive income into loss (dollars in thousands) March 31, Three months ended March 31, 2023 Cash Flow Hedges Interest rate swaps $ 17,594 Interest expense $ 4,499 Foreign currency forward contracts $ 14 Revenue $ 125 Net Investment Hedges Foreign currency forward contracts $ (417) $ — March 31, Three months ended March 31, 2022 Cash Flow Hedges Interest rate swaps $ 21,947 Interest expense $ (358) 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. Excluding 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 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) and related tax effects are reclassified from accumulated other comprehensive income (loss) to current earnings. 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, 2023 that is expected to be reclassified into earnings within the next twelve months is |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Leases We have operating leases for corporate offices, subleased offices and certain equipment and furniture. As of March 31, 2023, we did not have any operating leases that had not yet commenced. The following table summarizes the components of our lease expense: Three months ended March 31, (dollars in thousands) 2023 2022 Operating lease cost (1) $ 2,385 $ 2,532 Variable lease cost 432 437 Sublease income (811) (431) Net lease cost $ 2,006 $ 2,538 (1) Includes short-term lease costs, which were immaterial. 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 Real Estate Loans also require periodic principal payments and the balance of the Real Estate Loans are due upon maturity in April 2038. We have contractual obligations for third-party technology used in our solutions and for other services we purchase as part of our normal operations. In certain cases, these arrangements require a minimum annual purchase commitment by us. As of March 31, 2023, the remaining aggregate minimum purchase commitment under these arrangements was approximately $280.7 million through 2027. 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. We have not identified any losses that might be covered by these indemnifications. Legal proceedings We are subject to legal proceedings and claims that arise in the ordinary course of business, as well as certain other non-ordinary course proceedings, claims and investigations, as described below. We make a provision for a loss contingency when it is both probable that a material liability has been incurred and the amount of the loss can be reasonably estimated. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For proceedings in which an unfavorable outcome is reasonably possible but not probable and an estimate of the loss or range of losses arising from the proceeding can be made, we disclose such an estimate, if material. If such a loss or range of losses is not reasonably estimable, we disclose that fact. We review any such loss contingency provisions at least quarterly and adjust them to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. We recognize insurance recoveries, if any, when they are probable of receipt. All associated costs due to third-party service providers and consultants, including legal fees, are expensed as incurred. Legal proceedings are inherently unpredictable. However, we believe that we have valid defenses with respect to the legal matters pending or threatened against us and intend to defend ourselves vigorously against all claims asserted. It is possible that our consolidated financial position, results of operations or cash flows could be materially negatively affected in any particular period by an unfavorable resolution of one or more of such legal proceedings. Security incident As previously disclosed, we are subject to risks and uncertainties as a result of a ransomware attack against us in May 2020 in which a cybercriminal removed a copy of a subset of data from our self-hosted environment (the "Security Incident"). Based on the nature of the Security Incident, our research and third party (including law enforcement) investigation, we do not believe that any data went beyond the cybercriminal, has been misused, or has been disseminated or otherwise made available publicly. Our investigation into the Security Incident by our cybersecurity team and third-party forensic advisors remains ongoing. As a result of the Security Incident, we are currently subject to certain legal proceedings, claims and investigations, as discussed below, and could be the subject of additional legal proceedings, claims, inquiries and investigations in the future that might result in adverse judgments, settlements, fines, penalties or other resolution. To limit our exposure to losses related to claims against us, including data breaches such as the Security Incident, we maintain $50 million of insurance above a $250 thousand deductible payable by us. As noted below, this coverage has reduced our fina ncial exposure related to the Security Incident. We recorded expenses and offsetting probable insurance recoveries related to the Security Incident as follows: Three months ended March 31, (dollars in thousands) 2023 2022 Gross expense $ 17,783 $ 9,005 Offsetting probable insurance recoveries — (1,804) Net expense $ 17,783 $ 7,201 The following summarizes our cumulative expenses, insurance recoveries recognized and insurance recoveries paid as of: (dollars in thousands) March 31, December 31, Cumulative gross expense $ 125,788 $ 108,005 Cumulative offsetting insurance recoveries recognized (50,000) (50,000) Cumulative net expense $ 75,788 $ 58,005 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, as well as settlement of the previously disclosed SEC investigation (as 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. We present expenses and insurance recoveries related to the Security Incident in general and administrative expense on our consolidated statements of comprehensive loss and as operating activities on our consolidated statements of cash flows. Total costs related to the Security Incident exceeded the limit of our insurance coverage during the first quarter of 2022. 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, 2023, we incurred net pre-tax expense of $17.8 million related to the Security Incident, which included $7.6 million for ongoing legal fees and an additional accrual for loss contingencies of $10.2 million. During the three months ended March 31, 2023, we had net cash outlays of $9.2 million related to the Security Incident, which included ongoing legal fees and the $3.0 million civil penalty paid related to the SEC settlement (as discussed below). In line with our policy, legal fees are expensed as incurred. For full year 2023, we currently expect net pre-tax expense of approximately $20.0 million to $30.0 million and net cash outlays of approximately $25.0 million to $35.0 million for ongoing legal fees related to the Security Incident. 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, 2023, we have recorded approximately $30.2 million in aggregate liabilities for loss contingencies based primarily on recent negotiations with certain governmental agencies related to the Security Incident that we believe we can reasonably estimate in accordance with our loss contingency procedures described above. It is reasonably possible that our estimated or 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, 2023 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 for reimbursement of expenses, approximately 205 (or 79%) have been fully resolved and closed. 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. and Canada related to the Security Incident. We have also received notices of proposed claims on behalf of a number of U.K. 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. Customer and insurer subrogation claims generally seek reimbursement of their costs and expenses associated with notifying their own customers of the Security Incident and taking steps to assure that personal information has not been compromised as a result of the Security Incident. Our review of customer and subrogation claims includes analyzing individual customer contracts into which we have entered, the specific claims made and applicable law. Customer constituent class actions. Presently, we are a defendant in 19 putative consumer class action cases [17 in U.S. federal courts (which have been consolidated under multi district litigation to a single federal court) and 2 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. Lawsuits that are putative class actions require a plaintiff to satisfy a number of procedural requirements before proceeding to trial. These requirements include, among others, demonstration to a court that the law proscribes in some manner our activities, the making of factual allegations sufficient to suggest that our activities exceeded the limits of the law and a determination by the court—known as class certification—that the law permits a group of individuals to pursue the case together as a class. 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. Frequently, a court’s determination as to these procedural requirements is subject to appeal to a higher court. As a result of these uncertainties, we may be unable to determine the probability of loss until, or after, a court has finally determined that a plaintiff has satisfied the applicable class action procedural requirements. Furthermore, for putative class actions, it is often not possible to reasonably estimate the possible loss or a range of loss amounts, even where we have determined that a loss is reasonably possible. Generally, class actions involve a large number of people and raise complex legal and factual issues that result in uncertainty as to their outcome and, ultimately, making it difficult for us to estimate the amount of damages that a plaintiff might successfully prove. This analysis is further complicated by the fact that the plaintiffs lack contractual privity with us. Governmental investigations. To date, we have received a consolidated, multi-state Civil Investigative Demand issued on behalf of 49 state Attorneys General and the District of Columbia, a separate Civil Investigative Demand from the office of the Indiana Attorney General and a separate Civil Investigative Demand from the office of the California Attorney General relating to the Security Incident. We have been in discussions, directly with certain Attorneys General or indirectly through an executive committee of the multi-state group of Attorneys General, about potential resolution of issues arising from these investigations. Although we are hopeful that we can resolve these matters on acceptable terms, there is no assurance that we will be able to do so on terms acceptable to us and to any or all such states. We also are subject to the following pending governmental actions: • an investigation by the U.S. Federal Trade Commission; • an investigation by the U.S. Department of Health and Human Services; • an investigation by the Office of the Australian Information Commissioner; and • an investigation by the Office of the Privacy Commissioner of Canada. As previously disclosed, on March 9, 2023, the Company reached a settlement with the SEC in connection with the Security Incident. This settlement fully resolves the previously disclosed SEC investigation of the Security Incident and is further described in an SEC cease-and-desist order (the “SEC Order”). Under the terms of the SEC Order, the Company has agreed to cease-and-desist from committing or causing any violations or any future violations of Sections 17(a)(2) and (3) of the Securities Act of 1933, as amended (the “Securities Act”), and Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rules 12b-20, 13a-13 and 13a-15(a) thereunder. No other violations of the securities laws are alleged in the SEC Order. As part of the SEC Order, the Company also agreed to pay, and has paid, a civil penalty in the amount of $3.0 million. The Company consented to the entry of the SEC Order without admitting or denying the findings of the SEC Order, other than with respect to the SEC’s jurisdiction over the Company and the subject matter of the SEC Order. The SEC Order describing the settlement was furnished as Exhibit 99.1 and the SEC’s press release announcing this resolution is furnished as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 9, 2023. On September 28, 2021, the Information Commissioner’s Office in the United Kingdom under the U.K. Data Protection Act 2018 (the "ICO") notified us that it has closed its investigation of the Security Incident. Based on its investigation and having considered our actions before, during and after the Security Incident, the ICO issued our European subsidiary a reprimand in accordance with Article 58(2)(b) of the U.K. General Data Protection Regulation ("U.K. GDPR") due to our non-compliance, in the ICO's view, with the requirements set out in Article 32 of the U.K. GDPR regarding the processing of personal data. The ICO did not impose a penalty related to the Security Incident, nor did it impose any requirements for further action by us. On September 24, 2021, we received notice from the Spanish Data Protection Authority that it has concluded its investigation of the Security Incident, pursuant to which our European subsidiary paid a penalty of €60,000 in relation to the alleged late notification of two Spanish data controllers regarding the Security Incident. On January 15, 2021, we were notified by the Data Protection Commission of Ireland that it has concluded its investigation of the Security Incident without taking any action against us. We continue to cooperate with all ongoing investigations, which include various requests for documents, policies, narratives and communications, as well as requests to interview or depose various Company-related personnel. As noted above, each of these separate governmental 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes Our income tax benefit and effective income tax rates, including the effects of period-specific events, were: Three months ended March 31, (dollars in thousands) 2023 2022 Income tax benefit $ (3,901) $ (2,050) Effective income tax rate 21.0 % 16.5 % During the three months ended March 31, 2022, we utilized the discrete effective tax rate method, as allowed by ASC 740-270-30-18, Income Taxes—Interim Reporting , to calculate our interim income tax provision. The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis. We believe that, at this time, the use of this discrete method is no longer more appropriate than the annual effective tax rate method. The increase in our effective income tax rate for the three months ended March 31, 2023 when compared to the same period in 2022 was primarily attributable to unfavorable impact of non-deductible Security Incident accruals, lower foreign-derived intangible income deduction and an increase to the UK corporate tax rate offset against benefit attributable to valuation allowance reduction. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders' Equity Changes in accumulated other comprehensive income (loss) by component The changes in accumulated other comprehensive income (loss) by component, consisted of the following: Three months ended March 31, (in thousands) 2023 2022 Accumulated other comprehensive income, beginning of period $ 8,938 $ 6,522 By component: Gains and losses on cash flow hedges: Accumulated other comprehensive income balance, beginning of period $ 23,833 $ 5,257 Other comprehensive (loss) income before reclassifications, net of tax effects of $2,566 and $(3,789) (7,289) 10,641 Amounts reclassified from accumulated other comprehensive (loss) income (4,624) 358 Tax expense (benefit) included in provision for income taxes 1,221 (94) Total amounts reclassified from accumulated other comprehensive (loss) income (3,403) 264 Net current-period other comprehensive (loss) income (10,692) 10,905 Accumulated other comprehensive income balance, end of period $ 13,141 $ 16,162 Foreign currency translation adjustment: Accumulated other comprehensive (loss) income balance, beginning of period $ (14,895) $ 1,265 Translation adjustment 2,158 (2,132) Accumulated other comprehensive loss balance, end of period (12,737) (867) Accumulated other comprehensive income, end of period $ 404 $ 15,295 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 11. Revenue Recognition Transaction price allocated to the remaining performance obligations As of March 31, 2023, approximately $1.1 billion of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 60% of these remaining performance obligations over the next 12 months, with the remainder recognized thereafter. 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). Contract balances Our contract assets as of March 31, 2023 and December 31, 2022 were insignificant. Our closing balances of deferred revenue were as follows: (in thousands) March 31, December 31, Total deferred revenue $ 367,959 $ 385,236 The decrease in deferred revenue during the three months ended March 31, 2023 was primarily due to a seasonal decrease in customer contract renewals. Historically, due to the timing of customer budget cycles, we have an increase in customer contract renewals at or near the beginning of our third quarter. 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, 2023 that was included in the deferred reven ue balance at the beginning of the period was approximately $162 million. The amount of revenue recognized during the three months ended March 31, 2023 from performance obligations satisfied in prior periods was insignificant . Disaggregation of revenue We sell our cloud solutions and related services in three primary geographical markets: to customers in the United States, to customers in the United Kingdom and to customers located in other countries. The following table presents our revenue by geographic area based on the address of our customers: Three months ended March 31, (dollars in thousands) 2023 2022 United States $ 221,669 $ 214,394 United Kingdom 26,048 27,660 Other countries 14,036 15,070 Total revenue $ 261,753 $ 257,124 During the third quarter of 2022, we reorganized our market groups. The Social Sector and Corporate Sector market groups comprised our go-to-market organizations as of March 31, 2023. The following is a description of each market group as of that date: • The Social Sector market group focuses on sales to customers and prospects in the social sector, such as nonprofits, foundations, education institutions, healthcare organizations and other not-for-profit entities globally, and includes JustGiving; and • The Corporate Sector market group focuses on sales to customers and prospects in the corporate sector globally, and includes EVERFI and YourCause. The following table presents our revenue by market group: Three months ended March 31, (dollars in thousands) 2023 2022 (1) Social Sector $ 224,897 $ 219,995 Corporate Sector 36,856 37,129 Total revenue $ 261,753 $ 257,124 (1) Due to the market group change discussed above, we have recast our revenue by market group for the three months ended March 31, 2022 to present them on a consistent basis with the current year. The following table presents our recurring revenue by type: Three months ended March 31, (dollars in thousands) 2023 2022 Contractual recurring $ 177,603 $ 174,531 Transactional recurring 75,145 70,135 Total recurring revenue $ 252,748 $ 244,666 |
Basis of Presentation (Policy)
Basis of Presentation (Policy) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Unaudited interim consolidated financial statements | Unaudited condensed consolidated interim financial statements The accompanying condensed consolidated interim 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 ("U.S.") ("GAAP"). The consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023, 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 condensed consolidated interim 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, 2022, and other forms filed with the SEC from time to time. |
Basis of consolidation | Basis of consolidation The condensed consolidated financial statements include the accounts of Blackbaud, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Reportable segment | Reportable segment We report our operating results and financial information in one operating and reportable segment. Our chief operating decision maker uses consolidated financial information to make operating decisions, assess financial performance and allocate resources. Our chief operating decision maker is our chief executive officer. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we reconsider and evaluate our estimates and assumptions, including those that impact revenue recognition, long-lived and intangible assets, income taxes, business combinations, stock-based compensation, capitalization of software and content development costs, our allowances for credit losses and sales returns, costs of obtaining contracts, valuation of derivative instruments, loss contingencies and insurance recoveries, among others. Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could materially differ from these estimates. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update 2022-04, Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted loss per share: Three months ended March 31, (dollars in thousands, except per share amounts) 2023 2022 Numerator: Net loss $ (14,701) $ (10,407) Denominator: Weighted average common shares 52,132,999 51,199,717 Add effect of dilutive securities: Stock-based awards — — Weighted average common shares assuming dilution 52,132,999 51,199,717 Loss per share Basic $ (0.28) $ (0.20) Diluted $ (0.28) $ (0.20) Anti-dilutive shares excluded from calculations of diluted loss per share 1,638,453 1,558,751 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial assets and liabilities that are measured at fair value on a recurring basis consisted of the following, as of the dates indicated below: Fair value measurement using (dollars in thousands) Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total Fair value as of March 31, 2023 Financial assets: Interest rate swaps $ — $ 26,514 $ — $ 26,514 Foreign currency forward contracts — 96 — 96 Total financial assets $ — $ 26,610 $ — $ 26,610 Fair value as of March 31, 2023 Financial liabilities: Interest rate swaps $ — $ 8,920 $ — $ 8,920 Foreign currency forward contracts — 499 — 499 Contingent consideration obligations — — 2,710 2,710 Total financial liabilities $ — $ 9,419 $ 2,710 $ 12,129 Fair value as of December 31, 2022 Financial assets: Interest rate swaps $ — $ 31,870 $ — $ 31,870 Foreign currency forward contracts — 247 — 247 Total financial assets $ — $ 32,117 $ — $ 32,117 Fair value as of December 31, 2022 Financial liabilities: Foreign currency forward contracts $ — $ 323 $ — $ 323 Contingent consideration obligations — — 2,710 2,710 Total financial liabilities $ — $ 323 $ 2,710 $ 3,033 |
Consolidated Financial Statem_2
Consolidated Financial Statement Details (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of Restricted Cash | Restricted cash (dollars in thousands) March 31, December 31, Restricted cash due to customers $ 362,261 $ 700,611 Real estate escrow balances and other 1,810 1,629 Total restricted cash $ 364,071 $ 702,240 |
Components of Prepaid Expenses and Other Assets | Prepaid expenses and other assets (dollars in thousands) March 31, December 31, Costs of obtaining contracts (1)(2) $ 71,956 $ 74,272 Prepaid software maintenance and subscriptions (3) 37,125 34,766 Derivative instruments 26,610 32,117 Implementation costs for cloud computing arrangements, net (4)(5) 9,993 10,189 Prepaid insurance 9,962 4,902 Unbilled accounts receivable 7,092 5,775 Taxes, prepaid and receivable 1,728 1,855 Deferred tax assets 1,152 1,153 Other assets 11,108 10,929 Total prepaid expenses and other assets 176,726 175,958 Less: Long-term portion 87,947 94,304 Prepaid expenses and other current assets $ 88,779 $ 81,654 (1) Amortization expense from costs of obtaining contracts was $8.3 million and $8.5 million for the three months ended March 31, 2023 and 2022, respectively. (2) The current portion of costs of obtaining contracts as of March 31, 2023 and December 31, 2022 was $28.5 million and $29.1 million, respectively. (3) The current portion of prepaid software maintenance and subscriptions as of March 31, 2023 and December 31, 2022 was $32.6 million and $31.7 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, 2023 and 2022, respectively. Accumulated amortization for these costs was $5.7 million and $5.2 million as of March 31, 2023 and December 31, 2022, respectively. |
Components of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities (dollars in thousands) March 31, December 31, Accrued legal costs (1) $ 35,705 $ 28,448 Derivative instruments 9,419 323 Customer credit balances 7,990 8,257 Operating lease liabilities, current portion 7,962 7,723 Accrued commissions and salaries 5,407 6,944 Taxes payable 3,580 16,667 Contingent consideration liability 2,710 2,710 Accrued health care costs 2,213 2,467 Accrued vacation costs 2,019 2,156 Accrued transaction-based costs related to payments services 1,882 5,059 Other liabilities 7,146 9,542 Total accrued expenses and other liabilities 86,033 90,296 Less: Long-term portion 13,234 4,294 Accrued expenses and other current liabilities $ 72,799 $ 86,002 (1) All accrued legal costs are classified as current. |
Components of Other Income and Expense | Other income, net Three months ended March 31, (dollars in thousands) 2023 2022 Interest income $ 1,236 $ 123 Currency revaluation (losses) gains (245) 582 Other income, net 1,016 416 Other income, net $ 2,007 $ 1,121 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Debt | The following table summarizes our debt balances and the related weighted average effective interest rates, which includes the effect of interest rate swap agreements. Debt balance at Weighted average (dollars in thousands) March 31, December 31, March 31, December 31, Credit facility: Revolving credit loans $ 199,400 $ 177,800 5.47 % 5.18 % Term loans 619,688 623,750 4.44 % 4.26 % Real estate loans 57,849 58,189 5.22 % 5.22 % Other debt 3,632 2,247 8.47 % 7.38 % Total debt 880,569 861,986 4.74 % 4.52 % Less: Unamortized discount and debt issuance costs 2,521 2,943 Less: Debt, current portion 19,136 18,802 6.99 % 6.45 % Debt, net of current portion $ 858,912 $ 840,241 4.69 % 4.48 % |
Summary of Currently Effective Supplier Financing Agreements | The following table summarizes our currently effective supplier financing agreements as of March 31, 2023: (dollars in thousands) Term Number of First Annual Original Loan Effective dates of agreements (1) : December 2022 39 3 January 2023 $ 1,710 January 2023 36 3 April 2023 2,491 (1) Represent noncash investing and financing transactions during the periods indicated as we purchased software and services by assuming directly related liabilities. |
Changes in Supplier Financing Obligations | The changes in supplier financing obligations during the three months ended March 31, 2023, consisted of the following: (dollars in thousands) Total Balance at December 31, 2022 $ 2,247 Additions 2,491 Settlements (1,106) Balance at March 31, 2023 $ 3,632 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Values of Derivative Instruments | The fair values of our derivative instruments were as follows as of: Asset derivatives Liability derivatives (dollars in thousands) Balance sheet location March 31, December 31, Balance sheet location March 31, December 31, Derivative instruments designated as hedging instruments: Foreign currency forward contracts, current portion Prepaid expenses and other current assets $ 96 $ 247 Accrued expenses $ 499 $ 323 Interest rate swaps, long-term Other assets 26,514 31,870 Other liabilities 8,920 — Total derivative instruments designated as hedging instruments $ 26,610 $ 32,117 $ 9,419 $ 323 |
Effects of Derivative Instruments in Cash Flow Hedging Relationships | The effects of derivative instruments in cash flow and net investment hedging relationships were as follows: Gain (loss) recognized in accumulated other comprehensive income as of Location of gain (loss) reclassified from accumulated other comprehensive income into loss Gain (loss) reclassified from accumulated other comprehensive income into loss (dollars in thousands) March 31, Three months ended March 31, 2023 Cash Flow Hedges Interest rate swaps $ 17,594 Interest expense $ 4,499 Foreign currency forward contracts $ 14 Revenue $ 125 Net Investment Hedges Foreign currency forward contracts $ (417) $ — March 31, Three months ended March 31, 2022 Cash Flow Hedges Interest rate swaps $ 21,947 Interest expense $ (358) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Components of Lease Expense | The following table summarizes the components of our lease expense: Three months ended March 31, (dollars in thousands) 2023 2022 Operating lease cost (1) $ 2,385 $ 2,532 Variable lease cost 432 437 Sublease income (811) (431) Net lease cost $ 2,006 $ 2,538 (1) Includes short-term lease costs, which were immaterial. |
Schedule of Security Incident Expense and Probable Insurance Recoveries | We recorded expenses and offsetting probable insurance recoveries related to the Security Incident as follows: Three months ended March 31, (dollars in thousands) 2023 2022 Gross expense $ 17,783 $ 9,005 Offsetting probable insurance recoveries — (1,804) Net expense $ 17,783 $ 7,201 The following summarizes our cumulative expenses, insurance recoveries recognized and insurance recoveries paid as of: (dollars in thousands) March 31, December 31, Cumulative gross expense $ 125,788 $ 108,005 Cumulative offsetting insurance recoveries recognized (50,000) (50,000) Cumulative net expense $ 75,788 $ 58,005 Cumulative offsetting insurance recoveries paid $ (50,000) $ (50,000) |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rates | Our income tax benefit and effective income tax rates, including the effects of period-specific events, were: Three months ended March 31, (dollars in thousands) 2023 2022 Income tax benefit $ (3,901) $ (2,050) Effective income tax rate 21.0 % 16.5 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | The changes in accumulated other comprehensive income (loss) by component, consisted of the following: Three months ended March 31, (in thousands) 2023 2022 Accumulated other comprehensive income, beginning of period $ 8,938 $ 6,522 By component: Gains and losses on cash flow hedges: Accumulated other comprehensive income balance, beginning of period $ 23,833 $ 5,257 Other comprehensive (loss) income before reclassifications, net of tax effects of $2,566 and $(3,789) (7,289) 10,641 Amounts reclassified from accumulated other comprehensive (loss) income (4,624) 358 Tax expense (benefit) included in provision for income taxes 1,221 (94) Total amounts reclassified from accumulated other comprehensive (loss) income (3,403) 264 Net current-period other comprehensive (loss) income (10,692) 10,905 Accumulated other comprehensive income balance, end of period $ 13,141 $ 16,162 Foreign currency translation adjustment: Accumulated other comprehensive (loss) income balance, beginning of period $ (14,895) $ 1,265 Translation adjustment 2,158 (2,132) Accumulated other comprehensive loss balance, end of period (12,737) (867) Accumulated other comprehensive income, end of period $ 404 $ 15,295 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Contract Balances | Our closing balances of deferred revenue were as follows: (in thousands) March 31, December 31, Total deferred revenue $ 367,959 $ 385,236 |
Disaggregation of Revenue | The following table presents our revenue by geographic area based on the address of our customers: Three months ended March 31, (dollars in thousands) 2023 2022 United States $ 221,669 $ 214,394 United Kingdom 26,048 27,660 Other countries 14,036 15,070 Total revenue $ 261,753 $ 257,124 The following table presents our revenue by market group: Three months ended March 31, (dollars in thousands) 2023 2022 (1) Social Sector $ 224,897 $ 219,995 Corporate Sector 36,856 37,129 Total revenue $ 261,753 $ 257,124 (1) Due to the market group change discussed above, we have recast our revenue by market group for the three months ended March 31, 2022 to present them on a consistent basis with the current year. |
Disaggregation Of Revenue, Recurring | The following table presents our recurring revenue by type: Three months ended March 31, (dollars in thousands) 2023 2022 Contractual recurring $ 177,603 $ 174,531 Transactional recurring 75,145 70,135 Total recurring revenue $ 252,748 $ 244,666 |
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, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (14,701) | $ (10,407) |
Weighted average common shares | 52,132,999 | 51,199,717 |
Stock-based awards | 0 | 0 |
Weighted average common shares assuming dilution | 52,132,999 | 51,199,717 |
Basic earnings per share | $ (0.28) | $ (0.20) |
Diluted earnings per share | $ (0.28) | $ (0.20) |
Anti-dilutive shares excluded from calculations of diluted loss per share | 1,638,453 | 1,558,751 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration obligations | $ 2,710 | $ 2,710 |
Fair value measurements, recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps, derivative assets | 26,514 | 31,870 |
Foreign currency forward contracts, derivative assets | 96 | 247 |
Total financial assets | 26,610 | 32,117 |
Interest rate swaps, derivative liabilities | 8,920 | |
Foreign currency forward contracts, derivative liabilities | 499 | 323 |
Contingent consideration obligations | 2,710 | 2,710 |
Total financial liabilities | 12,129 | 3,033 |
Fair value measurements, recurring [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps, derivative assets | 0 | 0 |
Foreign currency forward contracts, derivative assets | 0 | 0 |
Total financial assets | 0 | 0 |
Interest rate swaps, derivative liabilities | 0 | |
Foreign currency forward contracts, derivative liabilities | 0 | 0 |
Contingent consideration obligations | 0 | 0 |
Total financial liabilities | 0 | 0 |
Fair value measurements, recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps, derivative assets | 26,514 | 31,870 |
Foreign currency forward contracts, derivative assets | 96 | 247 |
Total financial assets | 26,610 | 32,117 |
Interest rate swaps, derivative liabilities | 8,920 | |
Foreign currency forward contracts, derivative liabilities | 499 | 323 |
Contingent consideration obligations | 0 | 0 |
Total financial liabilities | 9,419 | 323 |
Fair value measurements, recurring [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps, derivative assets | 0 | 0 |
Foreign currency forward contracts, derivative assets | 0 | 0 |
Total financial assets | 0 | 0 |
Interest rate swaps, derivative liabilities | 0 | |
Foreign currency forward contracts, derivative liabilities | 0 | 0 |
Contingent consideration obligations | 2,710 | 2,710 |
Total financial liabilities | $ 2,710 | $ 2,710 |
Consolidated Financial Statem_3
Consolidated Financial Statement Details (Components of Restricted Cash) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Restricted cash due to customers | $ 362,261 | $ 700,611 |
Real estate escrow balances and other | 1,810 | 1,629 |
Total restricted cash | $ 364,071 | $ 702,240 |
Consolidated Financial Statem_4
Consolidated Financial Statement Details (Components of Prepaid Expenses and Other Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Costs of obtaining contracts | [1],[2] | $ 71,956 | $ 74,272 | |
Prepaid software maintenance and subscriptions, current and long-term | [3] | 37,125 | 34,766 | |
Derivative instruments | 26,610 | 32,117 | ||
Implementation costs for cloud computing arrangements | [4],[5] | 9,993 | 10,189 | |
Prepaid insurance | 9,962 | 4,902 | ||
Unbilled accounts receivable | 7,092 | 5,775 | ||
Taxes, prepaid and receivable | 1,728 | 1,855 | ||
Deferred tax assets | 1,152 | 1,153 | ||
Other assets | 11,108 | 10,929 | ||
Total prepaid expenses and other assets | 176,726 | 175,958 | ||
Less: Long-term portion | 87,947 | 94,304 | ||
Prepaid expenses and other current assets | 88,779 | 81,654 | ||
Amortization expense from costs of obtaining contracts | 8,300 | $ 8,500 | ||
Current portion of costs of obtaining contracts | 28,500 | 29,100 | ||
Prepaid software maintenance and subscriptions, current | 32,600 | 31,700 | ||
Implementation costs for cloud computing arrangements, accumulated amortization | $ 5,700 | $ 5,200 | ||
[1]Amortization expense from costs of obtaining contracts was $8.3 million and $8.5 million for the three months ended March 31, 2023 and 2022, respectively.[2]The current portion of costs of obtaining contracts as of March 31, 2023 and December 31, 2022 was $28.5 million and $29.1 million, respectively.[3]The current portion of prepaid software maintenance and subscriptions as of March 31, 2023 and December 31, 2022 was $32.6 million and $31.7 million, respectively.[4]Amortization expense from capitalized cloud computing implementation costs was insignificant for the three months ended March 31, 2023 and 2022, respectively. Accumulated amortization for these costs was $5.7 million and $5.2 million as of March 31, 2023 and December 31, 2022, respectively.[5]These costs primarily relate to the multi-year implementations of our new global enterprise resource planning and customer relationship management systems. |
Consolidated Financial Statem_5
Consolidated Financial Statement Details (Components of Accrued Expenses and Other Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accrued legal costs | [1] | $ 35,705 | $ 28,448 |
Derivative instruments | 9,419 | 323 | |
Customer credit balances | 7,990 | 8,257 | |
Operating lease liabilities, current portion | 7,962 | 7,723 | |
Accrued commissions and salaries | 5,407 | 6,944 | |
Taxes payable | 3,580 | 16,667 | |
Contingent consideration obligations | 2,710 | 2,710 | |
Accrued health care costs | 2,213 | 2,467 | |
Accrued vacation costs | 2,019 | 2,156 | |
Accrued transaction-based costs related to payments services | 1,882 | 5,059 | |
Other liabilities | 7,146 | 9,542 | |
Total accrued expenses and other liabilities | 86,033 | 90,296 | |
Less: Long-term portion | 13,234 | 4,294 | |
Accrued expenses and other current liabilities | $ 72,799 | $ 86,002 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | |
[1]All accrued legal costs are classified as current. |
Consolidated Financial Statem_6
Consolidated Financial Statement Details (Components of Other Income and Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Interest income | $ 1,236 | $ 123 |
Currency revaluation (losses) gains | (245) | 582 |
Other income, net | 1,016 | 416 |
Other income, net | $ 2,007 | $ 1,121 |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | Oct. 30, 2020 | Aug. 31, 2020 |
Business Acquisition [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 900 | |
Global HQ [Member] | ||
Business Acquisition [Line Items] | ||
Debt, face amount | $ 61.1 |
Debt (Summary of Debt) (Details
Debt (Summary of Debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Line of Credit Facility [Line Items] | ||
Debt, gross | $ 880,569 | $ 861,986 |
Other debt | 3,632 | 2,247 |
Less: Unamortized discount and debt issuance costs | 2,521 | 2,943 |
Less: Debt, current portion | 19,136 | 18,802 |
Debt, net of current portion | $ 858,912 | $ 840,241 |
Weighted average effective interest rate | 4.74% | 4.52% |
Revolving credit loans [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt, gross | $ 199,400 | $ 177,800 |
Weighted average effective interest rate | 5.47% | 5.18% |
Term loans [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt, gross | $ 619,688 | $ 623,750 |
Weighted average effective interest rate | 4.44% | 4.26% |
Mortgages [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt, gross | $ 57,849 | $ 58,189 |
Weighted average effective interest rate | 5.22% | 5.22% |
Loans payable [Member] | ||
Line of Credit Facility [Line Items] | ||
Weighted average effective interest rate | 8.47% | 7.38% |
Short-term debt [Member] | ||
Line of Credit Facility [Line Items] | ||
Weighted average effective interest rate | 6.99% | 6.45% |
Long-term debt [Member] | ||
Line of Credit Facility [Line Items] | ||
Weighted average effective interest rate | 4.69% | 4.48% |
Debt (Summary of Currently Effe
Debt (Summary of Currently Effective Third-Party Financing Agreements) (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Dec. 31, 2022 | |
Loans payable [Member] | |||
Debt Instrument [Line Items] | |||
Original Loan Value | [1] | $ 2,491 | $ 1,710 |
[1]Represent noncash investing and financing transactions during the periods indicated as we purchased software and services by assuming directly related liabilities. |
Debt (Changes in Supplier Finan
Debt (Changes in Supplier Financing Obligations) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Balance at December 31, 2022 | $ 2,247 | |
Additions | 2,491 | |
Settlements | (1,106) | |
Balance at March 31, 2023 | $ 3,632 | |
Supplier Finance Program, Obligation, Statement of Financial Position [Extensible Enumeration] | Debt, current portion, Debt, net of current portion | Debt, current portion, Debt, net of current portion |
Derivative Instruments (Details
Derivative Instruments (Details) £ in Millions, $ in Millions, $ in Millions | 3 Months Ended | ||||||
Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2023 CAD ($) | Mar. 31, 2023 GBP (£) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 CAD ($) | Dec. 31, 2022 GBP (£) | |
Derivative [Line Items] | |||||||
Accumulated other comprehensive loss expected to be reclassified into earnings within next 12 months | $ (18.6) | ||||||
Ineffective portion of interest rate swap(s) | 0 | $ 0 | |||||
Interest rate swap [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, notional amount | $ 935 | $ 435 | |||||
Foreign currency forward contracts [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, notional amount | $ 27.7 | £ 14 | $ 22.6 | £ 11.2 |
Derivative Instruments (Fair Va
Derivative Instruments (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other current assets | Prepaid expenses and other current assets |
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Designated as hedging instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 26,610 | $ 32,117 |
Derivative liabilities, fair value | 9,419 | 323 |
Designated as hedging instrument [Member] | Foreign currency forward contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, foreign currency forward contracts, current | 96 | 247 |
Derivative liability, foreign currency forward contracts, current | 499 | 323 |
Designated as hedging instrument [Member] | Interest rate swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, interest rate swaps, long-term | 26,514 | 31,870 |
Derivative liability, interest rate swaps, long-term | $ 8,920 | $ 0 |
Derivative Instruments (Effects
Derivative Instruments (Effects of Derivative Instruments in Cash Flow Hedging Relationships) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense, Revenue | Interest Expense, Revenue |
Foreign currency forward contracts [Member] | Cash flow hedging [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in accumulated other comprehensive income as of | $ 14 | |
Gain (loss) reclassified from accumulated other comprehensive income into loss | 125 | |
Foreign currency forward contracts [Member] | Net investment hedging [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in accumulated other comprehensive income as of | (417) | |
Gain (loss) reclassified from accumulated other comprehensive income into loss | 0 | |
Interest rate swap [Member] | Cash flow hedging [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in accumulated other comprehensive income as of | 17,594 | $ 21,947 |
Gain (loss) reclassified from accumulated other comprehensive income into loss | $ 4,499 | $ (358) |
Commitments and Contingencies_2
Commitments and Contingencies (Details) € in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Mar. 09, 2023 USD ($) | Sep. 30, 2021 EUR (€) | Mar. 31, 2023 USD ($) cases | |
Loss Contingencies [Line Items] | |||
Liability insurance, amount, total | $ 50,000 | ||
Liability insurance, amount, deductible | 250 | ||
Security Incident, net pre-tax expense | 17,800 | ||
Security Incident, ongoing legal fees | 7,600 | ||
Loss contingency accrual, period increase (decrease) | 10,200 | ||
Security Incident, net cash outlays | 9,200 | ||
Loss contingency accrual | $ 30,200 | ||
Plaintiffs, number | cases | 260 | ||
Claims settled, number | cases | 205 | ||
Pending claims, number | cases | 400 | ||
Security incident, number of state Attorneys General | cases | 49 | ||
Loss Contingency, Claims Settled, Percent | 79% | ||
Spain [Member] | |||
Loss Contingencies [Line Items] | |||
Security Incident, penalty paid | € | € 60 | ||
US SEC | |||
Loss Contingencies [Line Items] | |||
Security Incident, penalty paid | $ 3,000 | ||
Minimum [Member] | |||
Loss Contingencies [Line Items] | |||
Security Incident, expected cost | $ 20,000 | ||
Expected net cash outlays for ongoing legal fees | 25,000 | ||
Maximum [Member] | |||
Loss Contingencies [Line Items] | |||
Security Incident, expected cost | 30,000 | ||
Expected net cash outlays for ongoing legal fees | $ 35,000 | ||
Putative Consumer Class Action Cases | |||
Loss Contingencies [Line Items] | |||
Plaintiffs, number | cases | 19 | ||
Putative Consumer Class Action Cases - Canadian Courts | |||
Loss Contingencies [Line Items] | |||
Plaintiffs, number | cases | 2 | ||
Putative Consumer Class Action Cases - US Federal Courts | |||
Loss Contingencies [Line Items] | |||
Plaintiffs, number | cases | 17 | ||
Third-party technology [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Remaining aggregate minimum purchase commitment | $ 280,700 |
Commitments and Contingencies_3
Commitments and Contingencies (Components of Lease Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease cost | [1] | $ 2,385 | $ 2,532 |
Variable lease cost | 432 | 437 | |
Sublease income | (811) | (431) | |
Net lease cost | $ 2,006 | $ 2,538 | |
[1]Includes short-term lease costs, which were immaterial. |
Commitments and Contingencies_4
Commitments and Contingencies (Schedule of Security Incident Expense and Probable Insurance Recoveries) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Security Incident, gross expense | $ 17,783 | $ 9,005 | |
Security Incident, offsetting probable insurance recoveries | 0 | (1,804) | |
Security Incident, net expense | 17,783 | 7,201 | |
Security Incident, cumulative gross expense | 125,788 | $ 108,005 | |
Security Incident, cumulative offsetting probable insurance recoveries | (50,000) | (50,000) | |
Security Incident, cumulative net expense | 75,788 | $ 58,005 | |
Security Incident, cumulative offsetting insurance recoveries paid | $ (50,000) | $ (50,000) |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rates) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ (3,901) | $ (2,050) |
Effective income tax rate | 21% | 16.50% |
Stockholders' Equity (Changes i
Stockholders' Equity (Changes in Accumulated Other Comprehensive Loss by Component) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income [Roll Forward] | ||
Accumulated other comprehensive (loss) income, beginning of period | $ 8,938 | $ 6,522 |
Other comprehensive (loss) income before reclassifications, net of tax effects of $2,566 and $(3,789) | 2,566 | (3,789) |
Tax expense (benefit) included in provision for income taxes | (3,901) | (2,050) |
Net current-period other comprehensive (loss) income | 8,534 | (8,773) |
Translation adjustment | 2,158 | (2,132) |
Accumulated other comprehensive income (loss), end of period | 404 | 15,295 |
Gains and losses on cash flow hedges [Member] | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||
Accumulated other comprehensive (loss) income, beginning of period | 23,833 | 5,257 |
Other comprehensive income (loss) before reclassifications, net of tax effects | 7,289 | (10,641) |
Amounts reclassified from accumulated other comprehensive (loss) income | (4,624) | 358 |
Tax expense (benefit) included in provision for income taxes | 1,221 | (94) |
Total amounts reclassified from accumulated other comprehensive (loss) income | (3,403) | 264 |
Net current-period other comprehensive (loss) income | (10,692) | 10,905 |
Accumulated other comprehensive income (loss), end of period | 13,141 | 16,162 |
Foreign currency translation adjustment [Member] | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||
Accumulated other comprehensive (loss) income, beginning of period | (14,895) | 1,265 |
Translation adjustment | 2,158 | (2,132) |
Accumulated other comprehensive income (loss), end of period | $ (12,737) | $ (867) |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue recognized that was included in deferred revenue at beginning of period | $ 162 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 1,100 |
Revenue, remaining performance obligation, percentage to be recognized | 60% |
Revenue, remaining performance obligation, expected timing of satisfaction | 12 months |
Revenue Recognition (Contract B
Revenue Recognition (Contract Balances) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Total deferred revenue | $ 367,959 | $ 385,236 |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Revenue by Geography) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 261,753 | $ 257,124 |
United States [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 221,669 | 214,394 |
United Kingdom [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 26,048 | 27,660 |
Other countries [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 14,036 | $ 15,070 |
Revenue Recognition (Disaggre_2
Revenue Recognition (Disaggregation of Revenue by Market Group) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 261,753 | $ 257,124 |
Social Sector | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 224,897 | 219,995 |
Corporate Sector | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 36,856 | $ 37,129 |
Revenue Recognition (Disaggre_3
Revenue Recognition (Disaggregation of Recurring Revenue by Type) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 261,753 | $ 257,124 |
Contractual recurring [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 177,603 | 174,531 |
Transactional recurring [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 75,145 | 70,135 |
Recurring [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 252,748 | $ 244,666 |
Uncategorized Items - blkb-2023
Label | Element | Value |
Surrender Of Shares Upon Restricted Stock And Restricted Unit Vesting And Exercise of Stock Appreciation Rights | blkb_SurrenderOfSharesUponRestrictedStockAndRestrictedUnitVestingAndExerciseofStockAppreciationRights | 533,139 |
Surrender Of Shares Upon Restricted Stock And Restricted Unit Vesting And Exercise of Stock Appreciation Rights | blkb_SurrenderOfSharesUponRestrictedStockAndRestrictedUnitVestingAndExerciseofStockAppreciationRights | 533,597 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 733,931,000 |