BLKB - Earnings call transcript Q3 2020

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Operator

Good day and welcome to Blackbaud's Third Quarter 2020 Earnings Call. Today's conference is being recorded. I would now like to turn the conference over to Mark Furlong, Senior Director of Finance. Please go ahead, sir.

Mark Furlong

Good morning everyone. on quarter us Earnings joining for Blackbaud's XXXX third Call. Thanks

more and are on refer Boor, recent differ Blackbaud's our President will Tony open could the your then cause me line that Please comments XX-K Mike risks make and materially those Blackbaud's SEC more Mike prepared will comments call Vice from up Tony Joining uncertainties we and filings note today most that today Gianoni, contain risks. information that forward-looking and statements to projected. and CEO, other and President Executive for the on CFO. Please questions. results Form We subject to our to for actual and believe those or otherwise for internally our financial from release a substitution is night, be measures that site. our representative of a issued measures we in both specified, on in Investor the presentation note supplemental not combination to of how is our A business. this non-GAAP and measure are GAAP non-GAAP Unless non-GAAP refer Relations available should and GAAP results measures and last only will schedule Please as financial in reconciliation we more call. press we GAAP on considered, detailed available isolation of a Web non-GAAP measures.

website. our Relations briefly upcoming investor our Investor cover engagement the I'll is Before Mike, turn which available to I on over call activity,

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Mike Gianoni

Mark. Good our thanks today. morning joining Thanks for call and everyone

keen This to to more I'll out clearly growth few show share this pivoting pandemic. brief financials updates improving also growth and profitability cover earnings quarter, results, more morning before with detail. of quarter revenue Tony rate, over the are we coming it toward from focus the that a toward third Our our a turning in

First, good employees for proud serving security sector. XXXX, are of support dedication we we of program has as unique I our like and cyber they've significantly cyber rise, human new the of to I'm our to the terms update the on all challenges, a done culture new of provide customers, security over I and Blackbaud preparation how to in up to it's behalf in recent attack and navigate very attack would our these several cyber want have thank and These incident, tremendous resources threats to testament incident. in customers a stepped you the invested the this. involved and enhance to types our and last to to an unmatched incredibly on standard years for work adopting the really and Blackbaud it's the our commitment our dollars, I'd high start this to like in saying to our related happened, apologize again brief a of job by their to people at social Blackbaud unfortunate to customers needs the like also environment.

the and our our need. Our ensure vulnerability to efforts how understand investigation, them they we occurred this our to was of one to able Through and which they diligent products. top we've is supporting information in exactly our remediated have and tied priority forensics being early the customers were help this generation through

majority our majority while harden I'll of our cloud in cyber private security not customers you, the continue transparent remind involve to cloud did on incident, of this it program and learned progress. are solutions not our and environments lessons incorporating and our improving part environment public We our from being the our further incident environments. with our this of were customers on

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contend Digital new advance one digital-first vertical customers has which environment new will mindset, year-to-date. Turning powerful in missions new markets each to a organizations, some and ways ability for We as tech pandemic. consider Blackbaud of result, their in solutions the for short as of universal with this long-term falling hearing market their market opportunity the uncertainty complexity pandemic, quarter customers need by software bookings strategy pipeline are our build believe plan across in for transformation as a working. but and theme new this from in stack. quarter; organizations a the begin employ resulting our and team's unique to shift existing of the for beyond is shifted their to play distributed to of a the impacted reality, with elongated the this organizations organizations and expanding The budget a have strategies challenges role solutions future our short-term to created and long-term today's the to these the continued posed leading and sales cycles, seek challenges and the has more we're adopted to to as market daily

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made the portfolio. changing and BBCON, immense resources unutilized also been funds to for scholarship the at expansion of respond the number product customers' easier to addition enhancements capabilities example, we expediting to support for few market to provide reprioritizing announcements our just during requests no to are product needs; In to global organizations institutions and cost, we've as it of of YourCause verticals highlighted COVID-XX customers Prayer messaging online. going we fitness were higher-education prayer fundraising employees capabilities making causes Wall A and our during directors enables help ensure geographies Blackbaud's new variety many a Text supportive across across for CSRconnect peer-to-peer the and that the faith and to of no tracking quarter. Virtual that such around of during companies congregates bring and a together world. integration These share and innovations the adopt

innovation know, first of also you and with Blackbaud across As we the our cloud growth of unique the of good delight walls commitment our as four needs extends we strategies serve. the outside innovative solutions markets organizations the recognize is social customers to

engineers network Many unprecedented for easier tools software making and integration unique and built solutions. with by meet platform organization's enabling their of a Blackbaud customers' seamless extend allowing providers, with for SKY the ever to innovation, other an it growing APIs products to customers Blackbaud is Our level are community fueled partner powering our developer our enhance and with Blackbaud our needs. than open from

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access more creates flexibility prescriptive us applying also the it our and customers. efficiencies marketing expands and to our to solid talent our a in more such have both as our time, larger ultimately our this provide increasing cycles. us, empowers our to than any digital-first Blackbaud. cost optimize we rather more means as enhance to want toward on every For enabling us more a make digital employees support workforce and lead our how leaders experience remotely. remote operate, software as without employees our decisions a this customers and adjusting enable to to positive we strategy footprint can employee seen our allowing digital collaborative made at efforts. business work we've based the conversational we shift to XXxX investments sales our It investment estate in marketing be to to in need proven head to also enhances of workspaces generation accelerating employee effective We're in We've footprint AI on includes market effectively location, within and early skills qualify leading within with for This offices. real and operate and engage count, strategy pool, workforce We've points, their we proof and some and us mindset diverse our change leads

of employees, as best I'm focus on the we remain in continue globally had nearly market changes sector sales of adoption of we good well QX. years modern ahead long-term a XX this accelerate the for trends, singular success, driving believe focused organizations. the positioned is and we're as We've one a our COVID-XX in future just our market, the and on for partner expanded impact how while generation innovation. solutions the the effectiveness for existing heightened to this Blackbaud XXXX driving and we excited in We we Given to bookings. the leader functionality put to work at early about social delivering making social cloud lead look very example this will a enhance of good and unmatched

continue customers resilient ability and on their Our short-term pandemic during deliver are customers a revenue to challenges ways ensure find creative the outlook, created continue can near-term to revenue to to growth. The to they drive and uncertainty our will posed our missions. limit our in have

to delivering value which and controllable. such, we've shareholder pivot flow, through greater As cash made emphasis a are increased profitability on place more

we Over sharper the open it the see focus I'll Q&A. meaningful execute up that, growth turn balanced strategy with long before With call term opportunity for Tony to as drive over an Tony? to we we on a earnings profitability. our

Tony Boor

for your key and Thanks third quarter trends cover opening highlights line up before Mike. Good briefly the questions. morning underlying everyone. our I'll

detail materials posted our QX performance. website full yesterday's refer investor the can on You press for the and our release to

we primarily pressure declined line XXXX lower revenue on is shifted revenue and current altogether scenarios. our as by online, on revenue to transactional be X.X% of X.X% was in-person in results, Turning recurring latest growth putting driven related pandemic be declining had declines revenue as This our revenue have canceled. to quarter versus an with customers and challenged environment with QX recurring and said, decline largely quarter to with the in organic near-term continue basis. missions that third or postponed planning events The in was in the

transactional online pandemic. around remains tied at encouraging seen the and durations losses campaigns, our of predictable volume, with we've activities and customers source of temporary these uncertainty While revenue length least the events offsetting least revenue signs the in given to

three Our ahead contracted over continued now XXXX recurring to renewals plan of of revenue us. performed well as quarters trend with behind our original

by on pressure this ahead, been presented reclassified revenue to that more Looking managed with of quarter services the recurring the for one-time rate our have and services so XXX points reduced and will revenue. basis Consistent our QX full-year million basis QX fourth shortfall approximately This after year, we pipeline XXXX expect organic historically XXXX on would bookings on revenue. other retained in approximately change. and $X XXX points and put of we growth recurring reclassification or and normalizing revenue

please the included more available detail, our our on in schedule Web investor For refer to presentation supplemental Relations site. Investor

operating the diluted gross quarter margin margin of million, was response to $XX third income significant representing last quarter, we of a our cost Similar earnings, to XX.X%, generated operating share early $X.XX. actions of to our generated per Moving reduction and earnings quarter. an for in XX.X% the pandemic

and service cloud and margin of scale actions not XX. While of confident ability our our of ability the the going XX% of of investments third XX our business elevate to on familiar to next repeat of long-term operating revenues areas opportunity profile, quarter sustainable forward growth near-term all plus year, have related ample inclusive the and engineering, our Many Rule of the room third much like party shift with of improve these you margin through critical security infrastructure in a the pressure to cloud deliver indicative will is believe significantly. we combination on and Rule profitability to to more are We're in we providers.

to balance sheet. statement Now, let's and the turn cash flow

$XX Our cash QX XX.X%. a free flow free million flow of margin was representing cash

workforce XXX building headquarters outlay and of which quarter approximately office Blackbaud and roughly This of for part Charleston we our quarter adjacent margin leases cash of we the currently will is These third terminations strategy million give at points. exit work lease estate our new the was additional reduced flow the we for optimizing forward The of around completed cost early our on $XX upfront lease. as basis going our globe. plans free cash our which future flexibility purchase generate transaction expanded including savings footprint During the real land, newly significant by the certain focused us will strategy. evolve

times to of a a $XXX terminations lease than of these at at with for outlay million ratio capital $XXX ended cash the capacity. $XX of quarter we in during majority and fourth stood the X.X between million. X.X million $XX less our the calls of end million of times QX, quarter net debt, debt-to-EBITDA the expect strategy with and borrowing We one-time close with We

put summary, current to in ability in the have to in extending Our to and necessary revenue currently XXXX. by critical to challenges of uncertainty navigate drive caused investments we opportunity are debt we provide future. process and are mature and continue Despite we amending, to will the flexibility scheduled our continue June is of our us near-term environment, expanding today's of success capacity we XXXX business. the and debt on the additional facility XXXX a pandemic, the believe which In of for of pressure making long-term and customers growth us positioned in well the to ensure front the the significant our

quarter remaining manage open that third I'd growth. reflects shareholder ability through of driving committed from outcomes could The value the questions. a possible like the while to and up that, result wide pandemic, array our With to earnings to for line increased your profitability

Operator

Thank you Instructions]. [Operator

will from We Stifel. question Roderick first Tom our take of now

line Your open. now is

Tom Roderick

to and that the the to ways, the kind versus just side upside and you what me by the back last do sort ask a is much I I or events see the the and events that think the So at of that business? driven other to the if it well, endeavors, can side gain look start a transactional around of on delivered as just wanted bit of us mean, we Mike, I from on to you business we outlook some -- the the a payments quarter first business that and up outstanding of transactional relative that put visibility of but of sort when swing giving business. be transactional think you tough perspective being sense of question then quarter, pretty coming nice the give can in can back. both even of about you process how to do let transactional little question was you of in a seeing particularly postmortem time could How do dive piece

Mike Gianoni

Yes. Sure Tom. Couple things of there.

transactional we QX in consumption and business. about talked the sort So of

drove good didn't customers be those was run to great from for that right. The pressure some under it's and and time, that the the was they of reimplemented, we are types sort kind all up, much don't customer some and it's about QX -- We and we revenue need thing galas, have on Those on a lines summer because happen In that saw time, some payment lots of of do what those couple types customers will to QX our go and usage pretty a results some we with shifts, the is revenue in interesting summer that QX non-profit in of QX. drive QX, why customer drop, was do those customers right decent customers QX. didn't events transactions. in a revenue of all fights, of world start having events there, still that though based the COVID just so summer need happening right things in in so Like, lot is time. and that. great that that question saw

at they tell those firing that's with come are to planning all on to where what going level to contact of come back, customers, up hard the So, kind macro again, back. going they it's it's and at events were in

in Some not hard main -- bit have the tell. rescheduled of it's little QX, but so a to kind for

because -- those is So, are upside there risk. for customers good current at there all none customers them of us are future

those in it's to around Our retention in related remains but quarter really weakness just the that. actual coming so third high, events activity back, summer saw months some we the

Tom Roderick

happy are faith-based as not some that's product, than seen into to operating you new you particularly those to that's timeframe. take what and sort level, higher higher put much of over relates this, that higher or to marketing hit before during think get that. hard like -- investments And we've those you then, of ed -- Tony I'm to, an about XX think Curious back, but events it into putting to the pushing hit for this so have them how newer come great. it about and and How historically thank excited but you're commitment all as thinking into you into markets. either maybe the whoever months commit I'll certain pandemic we're and XX% resources you been out let all than the margin months the get sounds to do how two for you wants by sales you the next you want that XX those of resources about markets

Mike Gianoni

the seen investments some couple with same really ramped our drive a here, the folks investments, increasing the we've returns we've doing So then since of R&D in a investments good digital on moving company. across and digital will home. actually we're in company several up lot in working parts March learned have and so of at that all marketing-wise, our Sales there, at time things we're we're further the margin so innovation, increasing actually areas that really

lot way via new So who experts good that investment we've the up digital seeing our and all qualify of some systems lead prepared put through that so doing conversational good we've to and in, way. which less that in in selling a per is of remarks, We've really a so tool, software AI heck return. way scalability. up is a our are my great investments tools, is XXxX online, folks which teams, leads mentioned action I a scaled really tools a people sort really that web at demos cost of generation are our lead remote in ramped we're lead

level better COVID. of tough because a drive to our looking we're obviously on this that of year's driving expected although So, way good bookings keep scale and bookings, if

registrants talked out. prospects is my investments fantastic about a that proven prepared of percentage I was huge and XX our which Tom, remarks In XX,XXX BBCON right well. like digital of just as So, years really just BBCON are is

I'd just long term. thing kind tied around Tony's question more comment mention The like other driving is margin to on and to of your

to Day, will we're have an been going again We'll going we long-term we're about Investor quite goals has basis. we're an Investor so and do which so we have to a shift is again So, to what community once schedule, that when. that talk have Day not aspirational sure make might look we for asking going that can lot, that to profitability as this the like longer-term on a

Tom Roderick

ahead the helpful, Very appreciate Great. comments. Go Tony.

Tony Boor

models the plan but you forecasts QX. short our for are expectations, still One revenue our I off actually original to guidance, we there we scenario me run to Since hard follow-up plan exceeded want QX but hot fell the QX, transaction, the sure through transactional for the internal it's compare in in and -- us tell have original on out make our to discuss covered to pulled on. I'd had year to a little our that

continued that, we need mind of able dealing distancing services then keep and little And the in summer galas for of walks there's think when pandemic to versus trend and secondarily, continues get to the for of because to note the work short where So to also have rides then and and those to seen kind of social I plan just of pandemic. with up were come other bit our just that's to -- one really we and really maybe of the I all with year moving done we're expecting customers we transactions and runs internally, resources all and our those continued rounded about held you in has be cloud were for that two-fold, it's market of the last do less the of tough the the think, disconnect stuff need services that couple Mike's were the historically, that other point, to what expectations years. thing with not -- in impact kind so well, guys a entire there's up trend we've is, it's the and so happen customization of I'd

Operator

comes next from our question Peterson And you. Brian Thank Raymond of James.

is line open. now Your

Brian Peterson

Good taking and question. for morning, thanks the

of to have curious and a up and put the wanted think guys there's the return marketing on in growth macro should some place. how crystal the marketing but motions sales investors the of it digital like about be, that understand follow motions, just and some don't stabilizes? we have investments growth these what macro With wanted kind normalize? conceptually of Tom's through capacity just when that be the about trends macro I last of digital the to you're and these sounds obviously, question will ball and lot as a we how I'm efficiencies So to gained you should motions that maybe making thinking

Mike Gianoni

Brian. thanks sure, Yes,

within of customers different right. a different and So they're serve situations types COVID, in lot we of

some are because talked we're running and built bookings there of the kind big So, where others institutions down normalcy some on event like going look planning do or while macro that's for about what little last it to because the are just that's muscle are we no now going COVID, class what are the scrambled combo, things to and running sure getting of go a have operating we -- to pops the events, they those then the and side. out when they some in mom at be two seeing have up so open slowed educational there, yet them of figure the and some If the and remote transactions right. them how remote, with behind all to all to to And schools. not we're the months like they're

revenue because primary we all hand have one customers the retention are and remain a events because and our again on it's is I high driver. they positioned will they well So, believe

digital of hard to having them kind main, it's sector to that Some success scale business by in more again, predict going more again, have digital which sales, of of digital driving about. pretty going means some more good events And engineers driving our and I'll still we're the pretty with margin and COVID switched margin with forward. in getting say excited innovation, lower more hiring and and lastly, cost through driving up up but

Tony Boor

tag should right. to transactional Mike's talked the I'll from on with perspective spoke maybe Brian, And and very about bounce very, there quickly, we've as a side timing Tom back Mike

So the of overnight that summer and and galas and to almost balls have to the runs and those next those assuming we'd year we're the all and allowed. come etc, heart revenue allowed walks being expect back transaction the the events rides with

are and to think down do where a drive we as things that have I really will those that vaccines we that. comes and So, society

piece that other to a us in with as that's has through the and We're bookings. revenue are aware the softness pipeline, hurt and on of ratable going bookings because recognition always some XXXX longer-tail. seeing those just pandemic The little you

of we're to bit next have be more year because bookings impact so visible revenue worth year of impact this seeing And a a from we little but full year, it's those going shortfalls.

I before our that assuming of months back the comes we lag month next six way kind think through lag sometime XX to work year market that.

delay see early rec if XXXX next overall. of much part first I'd growth subs. say with get the normal to by quicker that just year I have we'd So, back hope kind rev more on of little the of rebounded we a and would Transactions the sometime on resurgence rabble in

Mike Gianoni

thing, really focused that add the I'll up one and thing in driving of this Brian Tony remarks, these we're on prepared Rule more combination this, add on last is of ladder which the -- I'd The said just XX. just

driving top both on bottom So, line we're forward. that P&L, which a of combination of being aggressive planning pretty in the and going

Brian Peterson

there, some to end terms overlay exposure in within top the or there? yesterday, great two transactional just know business, comments, know there. of question this, was we of your to from transactional higher any your you relative if think I some Smart kind color about lot a we but I'm don't color you investors comments That's getting have were customer of add if in And ed curious as markets, a Any can three had I just are or of you Tuitions the business what anything Great. I kind but certain base? to exposure,

Mike Gianoni

summer the is about, these sort education Tuition the talked all and really what in we Smart just on and putting ride required really the that didn't activity, and of a in a a is sector the summer the of really it's events pressure. is all of happen happen because distancing. again, fine pressure the It's downside, just that social of type So the walk, that didn't doing gala,

Tony Boor

their online to you And churches, because market spike timing as still about basket. dramatically; that is person other but of surge online forced faith-based the think I'd they mention giving pandemic, giving couldn't move passing for Brian so the it people to people in do to were the the thing

etc those because not the events. and so the we and being the able fairly to of because host have and in To several QX marathons. and giving. I'd quarter And the didn't the areas, a related actually it to again ramp just we part was our Like really -- in revenue and big a we TeamRaiser transactional rides usage shortfall in walks runs reiterate significant -- Mike's point, was saw in anticipated

So gross some really place mind in part mentioned of good We will quite the quarter margin processing that up lower I it that actually the how models things the payments very again once gross but like transactions. don't on of the I'd our was have tuition, surprised one of in was, to need commentary gross again. True being TeamRaiser remember also I they're of wasn't some in keep folks things and dilutive who back the these it saw margin, bounce from expect -- they from related pieces things open margin transactional were JustGiving pricing contract higher quickly sell-side I has related one -- of business. are the some high credit gross just offers those of card right. but margins usage a some shortfall

pretty that's significant on that keep good think impact all of shouldn't dilutive, were being important I a to of mind we operating those as margins margin of for as so So, folks transactions well. has loss think in some

Brian Peterson

point. That's a good

Tony Boor

with platforms, lot announced footprint, payments. also we TeamRaiser is or platform. of kind platform Salesforce and And pretty platform drives that Online that want our which robust just big We're one is to Luminate of expanding a a usage integration I Tony a this add Brian, our the mentioned, which with of something; really

us So future we're to a for a with Salesforce there and expanding well. to different those that board so, which reasons more make across platform that opening decisions customers -- in as that the go lot provides we've and of integrated payments and usage of kind scenarios

Brian Peterson

investors. this that your ways? feel How the answered know to a you've Salesforce past you the do with I up different I with know like in work flexibility just maybe in question integration. that impacts customers And on Mike, with follow-up comes

Mike Gianoni

lot. opens a that I think up

a opportunities enterprise we Just to just typically Salesforce Raiser's question we Luminate. also fundraising we so to what of data see the data like NXT interesting of robust our provide some lot, macro, the we've and of different but vertical, our X% in been provided it's in. win And looked not competitors, competitors the really kind get provide with I'd little way, probably in because with and TeamRaiser. Salesforce the a because back difference. with Salesforce asked points saying think rates Salesforce integrate we the couple against the we like against By by not our addition looks and they're are point, couple and with of integration CRM We second and asked and at by just lot the Couple get have in other software, and things. we did granularity, went realized sometimes of well like world haven't enough a Edge Salesforce announced there's and I right basically a win and markets total years on as Luminate rates of because platform this we've our data same things so changed no X% several about Salesforce we're a the this

say one. you clear them see of of explain So, don't more about verticals there. information always at we see and or the it all our and this kind we just provide deals, faith-based in But, to be if look all of that we or would X% just to

Operator

And our Baird. next Thank Rob Oliver, from you. comes question

Your line open. now is

Rob Oliver

the My I was with you few if update you you guys know a a been a at guys your wondering partnership have us I could us into know big had said in makes particularly active have maybe curious, could past that for an a very a time deals follow-up have few that's lean years I Microsoft come then provide very this on without the channel there questions on likely and that, way that. bit here that you Mike, that and you for just wouldn't of pandemic. during we're there and Tony. the quick Microsoft,

So, you're now curious customer momentum, kind if but maybe just -- could we that's Microsoft seeing they investor love some and hear channel, upcoming a the of any, in event. examples, what into get maybe something that to few the years at partnership the

Mike Gianoni

to happy provide examples sure, Rob. Yes, customer

more So we're well type partnering and and business higher the relationship mostly we've in We're been it's happened well. healthcare relationship. and business enterprise selling their in non-Microsoft places higher has unit from non-profit with it's like collaborative ed and and them, The partnered well so going quite contacts units, ed has as and on there. those more with run into made matured that deals also good a non-profits business as healthcare partnered their into unit executives

the compensated we co-lo well and our XXX is -- NXT relationships solid, and our Azure, pushing as them other so because with plans Azure really to Azure product their our complementary really and as it's their the there good the to that well, the partner map Office Raiser's gone moving done in is and it to datacenters is with we've the Azure, and on so at for it's again Edge Azure quite road The some think it's pretty pull and going really us move side products so way consumption, continue we're as works where on to models are in I consumption, to base too, example, thing further which great compensation as get we're we've to were the Azure got from marketplace and integrations we're relationship set so really us far teams anyway, are well.

Rob Oliver

you've of set got is ballpark we to on data just like think I you've breach on of face you, costs and ex-insure, for a that's cost of guys couple certainly not you but the costs all cover to insurance examples, got are just something going going can remediation then got and that here it Tony liability that. sounds other you remediation but based much,

maybe be just guys assume you those both costs. you're bit little more how factoring as to curious that I but would that, that just you. that's up get you'd get of something XX set in, for on a So, thinking of wanted color Thank and

Tony Boor

the filings there would more I watch obviously be disclosure lot say a our in So SEC because will on those topic.

us material good material have the we sure coordinating that's from in going we cover. that covered -- you'll a to covering clear with not accrued needs currently they're -- in with when comes amount a our make that insurance not to insurance be by anything have net Right liability have what or place on there anticipate it now closely recorded Q out, don't see to perspective. We be basis. insurers We key on is are going not this and the working and very them we're

done that great front. security a material see a Continuing our some and I weren't the to said, of through, be that got -- will but resources we've take disclosure -- good to right. think think it's time. a painful will we receivables the certainly resources in other So, resources to it, Obviously, and have internal there liabilities in there'll we'll of job. obviously and That estimated again is a of plenty than team into guys financials see spending internally, that build where thing, The but the incur the the you'll place, we still but any got work internal of great, to believe we but XXXX able is cyber efforts our point, was you'll they things basis on some on in midst topic this we're At I their be on just utilizing really our lot these investment company. continued our and net insurance a in time right big going the to nothing systems, our over cost our in plan. book, of majority in probably cover going would lot we we've numbers our now

Operator

from our next ISI. question you. comes Thank Evercore Kirk Materne And of

Your line now is open.

Kirk Materne

Really stabilize your sort just was I around could you they and characterize if be least of period Mike, two trying from think of of not conversations starting ahead wondering business? sort but ago? today can anything, think I'm do to of versus kind to tight, changed say Meaning, if tone might of are or clients or a curious are year the where where they now? with of today perhaps is to they function conversations want need are still side budgets six just just sort are the clients non-transactional to the they sure you to make at months the

Mike Gianoni

haven't opened we're forward, some the a because forward. macro, platforms had this cloud looking some to The in are it's those them maybe a yet, they're be for even have thing, realize while. them pretty say Yeah, to forward, in they're okay, thinking so that in so board they're Zooms different it's looking they our and spot. -- they But to business cultural I Many like different our is changed. would and arts open institutions and arts to caveat at not, months centers of eight COVID about, so the and of use of that important across verticals things seven are how doing well, Jeans digital performing looking things, they've around mostly they're the are the months, going some into

drive future. have to and think We about the business our forward continue to

have those So, way. conversations shifted that

for not in of mean all off pretty on the far way question was but bookings still are have shifted your what they right in we so the sure, planned, but Our markets. conversation, that

Kirk Materne

of and but, thinking guess, I say if you more expansion term you face And to it margins. to then, I of face, virtually kind shifted have versus meaning going and net around sort between, sales assume longer business I can of matter efforts that's create always factoring forward, I business, even you virtually is new more also doing confidence want can how after -- your much into assume efficiencies how does be this there guess your about can more business your sales --

wonder if So, could that? Thanks. on just you expand I

Mike Gianoni

across environments on Again, us we've workforce rolled to estate is already diversity. learned it's which going cost of being efficiencies, lot with the help I remote drive since plans. super the lot aggressive COVID a real think companies -- all we policies, a We are it's going our types us post more policies a new March, lot like job see that you our access company, in to to skills and workforce

zip from enabled IT that for a the and year digital some and not usage of we investment platforms proven in platforms experts, remove great you a in leads over are codes two years ago, put you sales. job internal If go started types say driving job behind did we itself brought in we out. and bunch that related sales, sales, a with digitally and back game to for would it's but I digitally

virtually since been selling have March all right. So teams all our of

is in predict used they're I think to -- ton not there be it's face that what because so think of working COVID, that All software I continue. to go bookings going to doing folks I And we're back see companies. are opportunity. going of to we're that a demos, of them whether prospects. lot think one's to so, Blackbaud, although a actually our of operationally well, we face, no are know -- or don't to down I it's existing I don't quite going

SMB the The model, been that way where a frankly of our have lot model didn't other treat thing we in is deals cost much in digitally in frankly, are We've SMB, too SMB we've I sort and do and for because incurred ago too very could like of do more deal. digital, and we -- in past deals very, online it SMB an it, said, over our it type in is us could we which COVID SMB where most it the forced learned, invest are year the scale to of it, past. we digitally for could it a started we learned that enough

So, March there's -- lots and long on the of marketing will scalability good both think learnings I top and for run. in sales the us, line drive here in since opportunity bottom that

Operator

you. And Thank Ryan our Incorporated. Stephens from of next comes question MacWilliams

Your now open. line is

Ryan MacWilliams

Thanks me for for taking just the today. question, one

in target end any and leverage the target, Thanks. you reach market turning changes criteria have you're of given opportunities here? we're out As your markets, you? your this to your to additional difficulties in acquisition proactively environment seen involving toward And some

Mike Gianoni

the are some activities remain out going We smaller to the are of pressure. There are because pretty companies on. that under valuations some that there connected lower

quite saying the Our XX I short profitability, pivoted strategy for hasn't think, toward in us. which is Rule the run of we've controllable and and a really a we changed more bit, really model keep good as

also So, the strategy but activity recent The profitability as hasn't changed. -- keep well. driving looking things, we at we're

So, part second was opportunities your to related as I remain of there think well? question that a will and there

Ryan MacWilliams

on you thanks. the your of No, hit bulk is. it Appreciate time,

Mike Gianoni

Okay.

bet. You

Operator

and closing like the gentlemen, would ladies to question does remarks. session. call now our And I over Mike back Gianoni to you. any answer Thank turn conclude for and this

Mike Gianoni

we've pandemic front challenges, and our with the budget on near-term by uniquely greater of a long-term a currently plans, has model, long-term believe quarter. plan leader close and I in opportunity early just saying we board which our as but that recently. Rule of I'll again our XXXX. some us, in We're operator, share the you of positioned to think more of I I'm profitability the to we're refreshing have and and Thank focus across The marketplace XX created our proud in Great. finalizing significant status that we execution XXXX a in BBCON like done elevate things this puts whole some and

As we'll aspirational call. will thank goals the in have Day Tony an I and as Analyst meeting and and also Analyst and Day provide today at mentioned, participating long-term today's and I you well, the for

Thank Have you. good So, day. rest thanks of a everyone. your

Operator

conference you participating. Ladies this Thank today's and for concludes call. gentlemen,

disconnect. now may You

Blackbaud (BLKB) 31 Oct 202020 Q3 Earnings call transcript