Blackbaud Finalizes Sale of EVERFI to Private Investment Firm

Blackbaud Completes Sale of EVERFI

Blackbaud, Inc. (NASDAQ: BLKB), a leading software company that prioritizes social impact, has finalized the sale of its EVERFI business. This decision aligns with Blackbaud's ongoing focus on its core services and strategic objectives.

Financial Overview and Strategic Review

The sale, which was made to a private investment firm, is set against the backdrop of a thorough strategic review by Blackbaud. The company generated an impressive $1.15 billion in revenue over the past twelve months, maintaining a strong gross profit margin of 55.2%. Dale Strange, the president of corporate impact at Blackbaud, emphasized their commitment to ensuring a seamless transition for EVERFI's customers and employees.

Commitment to Customer Support

As Strange noted, EVERFI will continue to deliver vital educational courses covering topics such as financial literacy and workplace training. This commitment underscores Blackbaud's dedication to supporting social initiatives even after the sale.

Blackbaud's Core Offerings and Future Plans

Post-transaction, Blackbaud will retain its YourCause portfolio and Impact Edge solution, both crucial for corporate giving and engagement. These services reinforce the company's stance on enabling businesses to expand their social impact.

Acknowledged Contributions to Social Impact

Blackbaud has received numerous accolades for its contributions to social responsibility, including recognition from Newsweek and Forbes. Operating in multiple countries, the company excels in remote-first operations, allowing it to support users globally.

Recent Performance Insights

Despite the sale, recent analysis indicates expected net income growth and share buybacks by management. Additionally, Blackbaud reported a noncash impairment charge of approximately $415 million for the EVERFI asset group due to underperformance, which prompted a reassessment of business alternatives.

Revenue Growth and Guidance Updates

In the Third Quarter of 2024, Blackbaud experienced a 6.6% increase in overall revenue and a moderate 6.8% rise in contractual recurring revenue. However, they noted a significant 26% decline in revenue from the EVERFI segment, leading to an updated annual revenue guidance of $1.150 billion to $1.160 billion.

Analyst Reactions and Stock Outlook

Analysts at Baird have revised their outlook for Blackbaud, downgrading the stock from Outperform to Neutral. They also reduced the price target to $80 from $92, a shift influenced by a general reset in growth expectations and the updated perspective on Blackbaud's core social sector.

Future Strategic Directions

Looking ahead, Blackbaud plans to offload the underperforming EVERFI segment, with Goldman Sachs advising on potential strategic options. The company remains committed to its stock repurchase initiative, aiming to buy back up to 10% of its common stock by the end of the year.

Frequently Asked Questions

What is the recent sale related to Blackbaud?

Blackbaud has completed the sale of its EVERFI business to a private investment firm, focusing on its core offerings.

How did Blackbaud perform financially recently?

In the last year, Blackbaud generated $1.15 billion in revenue and reported a 6.6% increase overall, despite challenges in its EVERFI segment.

What recognition has Blackbaud received?

Blackbaud has been named among America's Most Responsible Companies and America's Best Employers, highlighting its social impact contributions.

What are Blackbaud's future plans post-sale?

Blackbaud plans to focus on its remaining services and engage in stock repurchase strategies while exploring strategic options for the EVERFI segment.

How is Blackbaud's stock being viewed by analysts?

Analysts have recently downgraded Blackbaud's stock from Outperform to Neutral, adjusting the price target based on new growth expectations.

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