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Blackbaud, Inc. Announces Third Quarter 2007 Results and Fourth Quarter 2007 Dividend

CHARLESTON, S.C.--(BUSINESS WIRE)--Blackbaud, Inc. (Nasdaq: BLKB), the leading provider of software and related services designed specifically for nonprofit organizations, today announced financial results for its third quarter ended September 30, 2007.

Marc Chardon, Chief Executive Officer of Blackbaud, stated, “We were pleased with the Company’s overall performance in the third quarter, which was highlighted by revenue and profitability that was above the high-end of our expectations. Demand for our solutions continues to be solid, and we believe our overall market opportunity remains largely under penetrated, as evidenced by the continuing addition of new customers across all segments of our market. At the same time we are also seeing success, as we have historically, in selling additional solutions to our large base of almost 19,000 customers.”

Chardon added, “During the third quarter, the contribution to our results from our most recent acquisitions, the Target Companies and eTapestry, continued to be very strong, with each generating better than expected revenue performance. Equally as important from a long-term perspective, we continue to be encouraged by the growing interest levels we are seeing for our new Enterprise CRM and Direct Marketing solutions.”

For the quarter ended September 30, 2007, Blackbaud reported total revenue of $67.8 million, an increase of 36% compared with the third quarter of 2006. License revenue increased 9% to $8.5 million, subscriptions increased 154% to $7.1 million, services revenue increased 55% to $26.3 million, and maintenance revenue increased 16% to $24.0 million, compared with the same period in 2006.

Blackbaud’s income from operations and net income, determined in accordance with generally accepted accounting principles (“GAAP”), were $15.3 million and $8.8 million, respectively, for the third quarter of 2007 compared with income from operations of $13.6 million and net income of $8.4 million in the same period last year. GAAP diluted earnings per share were $0.20 for the quarter ended September 30, 2007, compared with GAAP diluted earnings per share of $0.19 in the same period last year.

For the quarter ended September 30, 2007, non-GAAP income from operations, which excludes stock-based compensation expense and amortization of intangibles arising from business combinations, was $17.7 million, an increase from $15.7 million in the prior year period and above the high-end of the Company’s previously issued guidance range and represented a non-GAAP operating margin of 26%. Non-GAAP net income was $10.5 million for the quarter ended September 30, 2007, an increase from $9.8 million in the same period last year. Non-GAAP diluted earnings per share were $0.23 for the quarter ended September 30, 2007, an increase from $0.22 in the prior year period and at the high-end of Blackbaud’s previously issued guidance.

A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Cash from operations for the quarter ended September 30, 2007 was $30.5 million, an increase of 18% over the $25.7 million generated in the same period last year.

Timothy V. Williams, Chief Financial Officer of Blackbaud, stated, “We were pleased with the progress of integrating the Target Companies and eTapestry acquisitions during the quarter, which were key factors driving the better-than-expected operating profitability results. In addition, subscription-based services continue to be the highest growth portion of Blackbaud’s business, enhancing the Company’s long-term business model and revenue visibility.”

Fourth Quarter Dividend

Blackbaud announced today that its Board of Directors has declared a fourth quarter dividend of $0.085 per share payable on December 14, 2007 to stockholders of record on November 28, 2007.

Conference Call Details

Blackbaud will host a conference call today, November 1, 2007, at 5:00 p.m. (Eastern Time) to discuss Blackbaud’s financial results, operations and related matters. To access this call, dial 888-263-2905 (domestic) or 913-312-0697(international). A replay of this conference call will be available through November 8, 2007, at 888-203-1112 (domestic) or 719-457-0820 (international). The replay passcode is 8344025. A live webcast of this conference call will be available on the "Investor Relations" page of the Company's Web site, and a replay will be archived on the Web site as well.

About Blackbaud

Blackbaud is the leading global provider of software and services designed specifically for nonprofit organizations, enabling them to improve operational efficiency, build strong relationships, and raise more money to support their missions. Approximately 19,000 organizations — including the American Red Cross, Dartmouth College, the WGBH Educational Foundation, Episcopal High School, Lincoln Center, Cancer Research UK, Special Olympics, and Arthritis Foundation — use one or more of Blackbaud products and services for fundraising, constituent relationship management, financial management, direct marketing, school administration, ticketing, business intelligence, website management, prospect research, consulting, and analytics. Since 1981, Blackbaud’s sole focus and expertise has been partnering with nonprofits and providing them the solutions they need to make a difference in their local communities and worldwide. Headquartered in the United States, Blackbaud also has operations in Canada, the United Kingdom, and Australia. For more information, visit www.blackbaud.com.

All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.