#1blackbaud Blackbaud Investor Presentation Ticker: BLKB August 2, 2023#2Forward-looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this presentation consist of, among other things, statements regarding future operating results, all of which are based on current expectations, estimates, and forecasts, and the beliefs and assumptions of the Company's management. Words such as "believes," "seeks," "expects," "may," "might," "should," "intends," "could," "would," "likely," "will," "targets," "plans," "anticipates," "aims," "projects," "estimates," or any variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions that are difficult to predict. Accordingly, they should not be viewed as assurances of future performance, and actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that could cause actual results to differ materially from the Company's expectations expressed in this presentation include: expectations for continuing to successfully execute the Company's growth and operational improvement strategies; expectations of future growth in the social good software solutions market, segments within that market and the Company's total addressable market; expectations that achieving the Company's goals will extend its competitive advantage and provide improved product quality and innovative solutions for its customers; expectations that centers of excellence and use of best-of-breed platforms will drive increasing operating efficiency and contribute to margin improvement; expectations that the Company's financial position provides flexibility to fuel future growth through acquisitions or other opportunities; expectations that past acquisitions have expanded the Company's customer and market opportunities; risks associated with unfavorable media coverage; risks associated with acquisitions; risks inherent in the expansion of our international operations; risks related to the United Kingdom's departure from the European Union; the possibility of reduced growth or amount of charitable giving; uncertainty regarding increased business and renewals from existing customers; risks associated with implementation of software products; the ability to attract and retain key personnel; risks related to the Company's leverage, credit facility and share repurchase program; lengthy sales and implementation cycles; technological changes that make the Company's products and services less competitive; risk related to the adequacy of our data security procedures and cybersecurity and data protection risks and related liabilities and potential legal proceedings involving us and uncertainty regarding existing legal proceedings and the other risk factors set forth from time to time in the Company's SEC filings. Factors that could cause or contribute to such differences include, but are not limited to, those summarized under Risk Factors in the Company's most recent annual report on Form 10-K, and any quarterly reports on Forms 10-Q thereafter, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from the Company's investor relations department. Given these risks and uncertainties, you should not place undue reliance on these forward- looking statements. Also, forward-looking statements represent the Company's beliefs and assumptions only as of the date of this presentation. Except as required by law, the Company does not intend, and undertakes no obligation, to revise or update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Trademark Usage All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc. This presentation contains trade names, trademarks and service marks of other companies. The Company does not intend its use or display of other parties' trade names, trademarks and service marks to imply a relationship with, or endorsement or sponsorship of, these other parties. 2 b➤#3Historical Financials and Non-GAAP Financial Measures Use of Non-GAAP Financial Measures: The Company has provided in this presentation financial information that has not been prepared in accordance with GAAP. The Company uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating the Company's ongoing operational performance. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results from period to period with other companies in the Company's industry, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. The Company believes that these non-GAAP financial measures reflect the Company's ongoing business in a manner that allows for meaningful period-to-period comparison and analysis of trends in the Company's business. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures. Blackbaud discusses non-GAAP organic revenue growth measures, including non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic recurring revenue growth, and non-GAAP organic recurring revenue growth on a constant currency basis, which Blackbaud believes provide useful information for evaluating the periodic growth of its business as well as growth on a consistent basis. Each measure of non-GAAP organic revenue growth excludes incremental acquisition-related revenue attributable to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, if any, each measure of non-GAAP organic revenue growth reflects presentation of full year incremental non-GAAP revenue derived from such companies as if they were combined throughout the prior period, and it includes the current period non-GAAP revenue attributable to those companies. In addition, each measure of non-GAAP organic revenue growth excludes prior period revenue associated with divested businesses. The exclusion of the prior period revenue is intended to present the results of the divested businesses within the results of the combined company for the same period of time in both the prior and current periods. Blackbaud believes this presentation provides a more comparable representation of our current business' organic revenue growth and revenue run-rate. In these materials, Blackbaud is presenting the following unaudited information: historical recurring and total revenue for the three and six month periods ended June 30, 2023, for the fiscal year ended December 31, 2022 and the interim periods therein; calculations for recurring revenue growth and total revenue growth for the six month period ended June 30, 2023 and the interim periods therein; and calculations of non-GAAP organic revenue growth, non-GAAP organic recurring revenue growth, non-GAAP organic revenue growth on a constant currency basis and non-GAAP organic recurring revenue growth on a constant currency basis for the same periods. Rule of 40 is defined as non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. Non-GAAP adjusted EBITDA is defined as GAAP net income plus interest, net; income tax provision (benefit); depreciation; amortization of intangible assets from business combinations; amortization of software and content development costs; stock-based compensation; acquisition and disposition-related costs; employee severance; restructuring and other real estate activities; costs, net of insurance, related to the previously disclosed security incident discovered in May 2020 (the "Security Incident"); and impairment of capitalized software development costs. Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, and capital expenditures for property and equipment. In addition, and in order to provide a meaningful basis for comparison, Blackbaud now uses non-GAAP adjusted free cash flow in analyzing its operating performance. Non-GAAP adjusted free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, capital expenditures for property and equipment, plus cash outflows, net of insurance, related to the Security Incident. Blackbaud believes non-GAAP free cash flow and non-GAAP adjusted free cash flow provide useful measures of the company's operating performance. Non-GAAP adjusted free cash flow is not intended to represent and should not be viewed as the amount of residual cash flow available for discretionary expenditures. Historical Financial Statements Being Presented: In these materials, Blackbaud is presenting the following unaudited historical financial information: historical consolidated balance sheets as of the fiscal year ended December 31, 2022 and interim consolidated balance sheets for each of the quarters within fiscal 2023 and 2022; historical consolidated statements of comprehensive income for the fiscal year ended December 31, 2022 and interim consolidated statements of comprehensive income for each of the quarters within fiscal 2023 and 2022; historical consolidated statements of cash flows for the fiscal year ended December 31, 2022 and interim consolidated statements of cash flows for each of the interim year-to-date periods within fiscal 2023 and 2022; and historical non-GAAP financial information for the fiscal year ended December 31, 2022 and for each of the quarters within fiscal 2023 and 2022 as well as reconciliations of the non-GAAP measures to their most directly comparable GAAP measures and related non-GAAP adjustments. Blackbaud is providing this unaudited financial information to allow investors and analysts to more easily access and review the Company's historical consolidated financial data by including such information in one document. Reconciliation of GAAP to Non-GAAP Financial Measures: Reconciliations of the most directly comparable GAAP measures to non-GAAP financial measures and related adjustments, as well as details of Blackbaud's methodology for calculating non- GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic recurring revenue growth, non-GAAP organic recurring revenue growth on a constant currency basis and Rule of 40 can be found in the Appendix to these materials and on the "Investor Relations" page of the Company's website. Blackbaud has not reconciled forward-looking non-GAAP financial measures contained in this investor material to their most directly comparable GAAP measures. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to compensation, acquisition transactions and integration, tax items or others that may arise. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts. 3 b➤#4Blackbaud At-a-Glance Leading provider of software for powering social impact Essential software built to accelerate impact in fundraising, nonprofit financial management, digital giving, grantmaking, corporate social responsibility and education management Arts and Cultural Organizations Companies Faith Communities Foundations Healthcare Organizations Higher Education Individual Change Institutions K-12 Schools Nonprofit Agents 40+ years serving industry with demonstrated track record $1.1B annual recurring revenue¹ 3,000+ remote employees $100B + donated, granted, and invested through our platforms every year 40,000+ customers under contract² Millions of users and supporters in 100+ countries 1 Non-GAAP, at mid-point of 2023 financial guidance, rounded to one decimal. Financial goals represent full year targets. 2 Customers with contractual billing arrangements in 2022#5Key highlights Clear leader with durable business model in a large, resilient end market comprising over $480B in charitable giving in the US alone Executing a strategy to achieve Rule of 40 exiting 2023 and driving high-single digit to double-digit revenue growth with mid-30s Adjusted EBITDA margin in 2024 and beyond Driving strong financial performance through execution of five key operational initiatives implemented last year across product, bookings, transactional revenue, pricing and costs Innovating on the most comprehensive solution set of purpose-built and mission critical software and services powering social impact Intend to reduce net leverage to our ~2.0x target and expect to resume share repurchases through our Board-authorized program while maintaining a strong balance sheet#6Business overview#7Blackbaud is the leading provider of software for powering social impact We build, integrate and implement vertical-specific solutions purpose-built for the unique needs of our customers. Cloud Software We drive impact through dedicated customer support and training, along with strategic and managed services tailored to our customers. Services b Data Intelligence Using exclusive data, analytics and expertise, we deliver unparalleled insight and intelligence to the customers we serve. Expertise With over four decades of experience, we are undisputed industry experts on technology for social good. 7 b➤#8Our core competencies expand what is possible for purpose-driven organizations Fundraising and Engagement Fundraising Peer-to-Peer Fundraising Marketing $ Financial Management Fund Accounting Financial Aid Management Tuition Management Grant and Award Management Grantmaking Award Management Organizational and Program Management Ticketing Education Management Social Responsibility Payment Services Data Intelligence Services Merchant Services Data Health Insights Performance Consulting Services Implementation and Optimization Services EVERFI Grantmaking Employee Giving and Volunteering Payables 8 b➤#9Most comprehensive solution set that accelerates impact · . Blackbaud is the leading provider of software wholly dedicated to powering social impact Only Blackbaud offers a full portfolio of purpose-built, integrated solutions blackbaud Corporate Social Responsibility & ESG Fundraising, Relationship Management & Engagement Payment Services benevity CyberGrants • Highly fragmented competition Bright Funds offers single-point solutions Large customer base with strong retention Informed by internal competitive intelligence and analysis salesforce.org OUR COMPETITORS 1 Authorize.Net Financial Management, Grant & Award Management Organizational & Program Management Intacct. FACTS гen web. (and partners) dp donorperfect Bonterra. ab quickbooks. ALTRATA communitybrands AWARDSPRING VERACROSS tessitura NETWORK bloomerang PowerSchool FOUNDANT ellucian technologies 9 b➤#10Fueling accelerated impact for our customers $4.3B goal for the Campaign for Carolina exceeded a year early utilizing Blackbaud CRM 300K meals packed by employees for Rise Against Hunger using YourCause ® CSRconnect Ⓡ $400K raised through a virtual chili cook-off powered by JustGiving Ⓡ from BlackbaudⓇ Peer-to-Peer Fundraising THE UNIVERSITY of NORTH CAROLINA at CHAPEL HILL Community Home Health & Hospice UNITED AIRLINES b➤ M Archbishop Moeller High School Charleston Animal Society m c a sd Museum of Contemporary Art San Diego 200% boost in fundraising, including a $1 million gift, powered by Blackbaud Raiser's Edge NXTⓇ 100x reduction in time setting up tuition account with Blackbaud's suite of education management solutions 350% Increase in online donations after adoption of Blackbaud Altru and XTruLink, a Blackbaud partner Sourced from Blackbaud customer stories 10 b➤#11Recognized as a leader in ESG actions and disclosures ESG Priorities We're committed to strengthening the impact we make through the way we operate our business, setting high standards, and reporting with transparency on the efforts we are making in priority areas including: • • • People and Culture Fueling Social Impact Driving Climate Solutions • Governance and Data Responsibility Awards and Recognition R TrustRadius Tech Cares 2022 GOLD 2022 STEVIE WINNER FOR SALES & CUSTOMER SERVICE PRESENTED BY RIPPLEMATCH Campus Forward AWARDS THE DEME AMADO FORGARLY CARDER RECRUITMENT Disclosures and Frameworks SUSTAINABILITY ACCOUNT UNTING GRI SASB STANDARDS Public Scoring BOARD Forbes 2022 AMERICA'S BEST MIDSIZE EMPLOYERS QUARTZ BEST COMPANIES FOR REMOTE WORKERS WINNER 2022 TR TrustRadius AMERICA'S HOST RESPONSIBLE COMPANIES 2022 MOST LOVED 2022 Newsweek statista College Grad.com Top Employers SUSTAINABLE DEVELOPMENT GOALS TCFD TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CDP DISCLOSURE INSIGHT ACTION m Governance 2 - ISS‣ ✔ Environment 2 MSCI ESG RATINGS AA Low Risk SUSTAINALYTICS a Morningstar company Social 1 - CCC B BB BBB A AA AAA Negligible Low Medium High Severe b➤#12Large and underpenetrated total addressable market $3.5B Fundraising, Relationship Management and Engagement Revenue Penetration: <20% Corporate Social Responsibility and ESG Revenue Penetration: <5% $11.5B $20B+ $3.0B Blackbaud TAM Payment Services Revenue Penetration: <10% $1.5B $1.5B Financial Management, Grant and Award Management Revenue Penetration: <10% Organizational and Program Management Revenue Penetration: <10% Sources: FY 2022 Blackbaud Revenue. Global Blackbaud TAM based on IRS data, Canadian Revenue Agency, Private School Universe, IPEDS, Dun & Bradstreet, HIMSS, Guidestar, S&P Global database, Small Business & Entrepreneurship Council, Blackbaud internal data 12 b➤#13Proven history of double-digit recurring revenue and Adjusted EBITDA growth 9% CAGR FY12-FY22 Total Revenue 13% CAGR FY12-FY22 Recurring Revenue $453M Recurring Revenue One-time Services & Other $1,058M • 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $263M 11% CAGR FY12-FY22 Adjusted EBITDA $90M 2012 2013 2014 2015 Adjusted EBITDA 2016 2017 2018 2019 2020 2021 2022 Non-GAAP Revenue. Beginning with 2016, results reflect adoption of ASC 606. Non-GAAP Adjusted EBITDA as defined on page 3. . • Recurring revenue represented 96% of total revenue in 2022 Multiple levers to drive meaningful growth going forward underpinned by five point operating plan. Adjusted EBITDA growth in excess of total revenue growth • Execution of successful M&A strategy has grown the revenue base and accelerated growth and the shift to the cloud 13 b➤#14Update on ongoing operational initiatives#15Five key initiatives implemented last year showing early signs of success 1 2 Product Innovation and delivery Bookings growth and acceleration 3 Transactional revenue optimization and expansion 4 Modernized approach to pricing and multi- year customer contracts 5 Keen attention to cost management 15 b➤#16Adding substantial value for customers through innovation Launched next generation Intelligence for Good Ⓡ strategy with an extensive agenda of initiatives and investments targeted at making artificial intelligence more accessible, powerful and responsible across the social impact sector Al for Peer-to-Peer (P2P) Fundraisers Al for Online Giving Initiative 1 blackbaud SOCIAL GOOD STARTUP PROGRAM July 2023 cohort of Blackbaud's Social Good Start- up Program is specifically focused on mission-driven tech startups using generative Al to increase impact for companies and nonprofits focused on social responsibility Al for Major Giving Officers Al for Donor Stewardship Al for Educators Al for School Administrators Al for Corporate Impact ✓ Momentum Recently completed strategic investment in Momentum, a leading Al-focused Blackbaud Partner and graduate of Blackbaud's Social Good Startup tech accelerator program 16 bx ம்#17Solid year to date bookings performance demonstrates end market resilience MUSC Medical University of South Carolina J.P.Morgan ALS ASSOCIATION Remain focused on signing new logos as well as upsell and cross-sell opportunities GRACE SCHOOL GREATER LANSING foodbank Toledo Museum Art Initiative 2 17 b➤#18Initiatives across resilient and diverse transactional revenue streams drive continued consistent growth Transactional recurring revenue streams¹ Initiative 3 Transactional recurring revenue growth 1 Based on 2022 transactional revenue 5% Event-Based Usage 20% Tuition Processing 20% Consumer Giving 55% Donation Processing . • • 7% 8% 8% 8% 2019 2020 2021 2022 Strong momentum in consumer giving and tuition. processing as payments further migrate online Rate increase on Blackbaud Merchant Services took effect August 1st. Incremental to January rate change previously disclosed Additional payments solutions optimization to drive enhanced donor experience 18 b-#19Modernized renewal pricing provides better economics and visibility Initiative 4 Renewal Term Rate Increase at Renewal Embedded Escalator in Multi-Year Contracts PRIOR APPROACH Mix of annual and multi-year renewal contracts Mid-single digit rate increase upon renewal No embedded annual price increase on multi-year contracts NEW APPROACH Primarily 3-year contract renewal terms. Mid- to high-teens rate increase upon renewal Mid- to high-single digit rate increase embedded in both years 2 & 3 Mid-to High-Teens Illustration of Rate Increase on a 3-Year Contract Renewal Mid-Single Digits Mid-to High-Single Digits Mid- to High-Single Digits NA NA Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 19 b#20Initiative New renewal pricing approach provides compounding 4 multi-year benefit Illustration of revenue uplift for average 3-year renewal contract in 2023 = = Partial Year Impact Subsequent Contract Renewal - Partial Year Impact = = Full Year Impact Year 2 Embedded Escalator Partial Year Impact Year 3 Embedded Escalator Partial Year Impact Year 2 Embedded Escalator - Full Year Impact Year 2 & 3 Embedded Escalator - Full Year Impact Year 1 Renewal Rate Increase Partial Year Impact 2023 Year 1 Renewal Rate Increase - Full Year Impact 2024 Year 1 Renewal Rate Increase - Full Year Impact 2025 Year 1 Renewal Rate Increase - Full Year Impact 2026 20 20 b➤#21Contract renewal distribution creates sustainable longer-term growth Mix of contracts eligible for renewal rate increase by renewal year¹ Initiative 4 Nearly 70% of 2023 cohort has renewed as of July, however less than 25% of the total revenue opportunity has been recognized in Q2. Revenue uplift from 2023 cohort more than doubles in 2024 2025 25% 2026 10% 2024 30% 1 As of end of July 2023, excludes new bookings 2023 35% ~5% ~25% ~60% >2x increase 100% 100% 100% 100% ~85% Q1'23 Q2'23 Q3 '23 Q4'23 Q1'24 Q2 '24 Q3 '24 Q4'24 % of revenue opportunity recognized for 2023 cohort FY23 FY24 21 b➤#22Keen attention to cost management will contribute to ongoing margin expansion Initiative 5 Headcount Actions IT Consolidation Employees Data Center Closures 3.6k 4 3.2k 3.0k 2 2021 2022 Current 2022 2023 Expect EBITDA margins to maintain in low 30s through end of 2023 Spend Management Favorable renegotiation of key vendor contracts, including Azure and AWS Reduced real estate footprint · Beginning to realize benefit of previous cost actions • Plan to maintain at lower headcount levels post Q4 '22 and Q1 '23 reductions Fall-through benefit from renewal rate increases • Continue to manage cost structure to realize scale from expense base . Positive shift in competitive dynamics 22 b➤#23Financial Outlook#24Solid Q2 2023 with significant margin expansion Revenue Year over Year Rule of 40 Year over Year¹ $6.0 ($3.8) $271.0 $264.9 $3.9 Q2 2022 Revenue Contractual Recurring Revenue Transactional Revenue One-time Services & Other Revenue Q2 2023 Revenue Contractual recurring revenue • • Transactional revenue • 31.9% 36.1% Q2 2022 Q2 2023 Renewal pricing initiative continues to perform well Expect contractual recurring revenue growth acceleration through second half of year as we pass seasonal renewal high in June/July and renewal price increases begin to compound Continued strong performance from Tuition Management and Just Giving in quarter BBMS rate change bolstering donation processing revenue Rule of 40 Highlights: • Four-point YoY improvement in Rule of 40 performance driven by significant adjusted EBITDA margin expansion Expect further Rule of 40 improvement through the second half of 2023 as renewal pricing initiatives compound and revenue growth accelerates One-time services & other revenue • • Approximately 3% of total revenues in quarter, in line with intentional shift in mix toward higher margin recurring revenues More than one point of drag on organic revenue growth in the quarter • Targeting 36.5% on Rule of 40 performance at the midpoint of 2023 FY financial guidance, which will be a seven and a half-point improvement over 2022 1 Non-GAAP performance through 6/30/23. Rule of 40 at constant currency measured by non-GAAP organic revenue growth on constant currency basis plus non-GAAP Adjusted EBITDA margin shown on constant currency basis. Non-GAAP adjusted EBITDA is defined as GAAP net income plus interest, net; income tax provision (benefit); depreciation; amortization of intangible assets from business combinations; amortization of software and content development costs; stock-based compensation; acquisition and disposition-related costs; employee severance; restructuring and other real estate activities; costs, net of insurance, related to the previously disclosed security incident discovered in May 2020 (the "Security Incident" 24 and impairment of capitalized software development costs. Please refer to the appendix of this presentation. مـ#252023 total company increased guidance Expect accelerating financial performance every quarter in 2023 Metric Total Revenue Mid-Point - $1,095M $1,125M $1,110M Adjusted EBITDA Margin 30.5% 31.5% - 31.0% Diluted EPS $3.63 - $3.94 $3.79 Adjusted Free Cash Flow $190M $210M - $200M Anticipating organic revenue growth rate in the mid-single digits with pricing initiatives across every revenue stream Near-term focus on pricing execution, operational improvements and cost control driving substantial margin expansion Targeting ~36.5% Rule of 40 at constant currency at the midpoint of guidance Strong adjusted free cash flow generation Non-GAAP. Assumptions included in full year 2023 financial guidance: Non-GAAP annualized effective tax rate of 20%; Interest expense for the year of $37M - $41M; Fully diluted shares for the year in the range of 53M - 54M; Capital expenditures for the year in the range of $65M to $75M, including approx. $55M to $65M of capitalized software and content development costs In order to provide a meaningful basis for comparison, Blackbaud now uses non-GAAP adjusted free cash flow in analyzing its operating performance. Non-GAAP adjusted free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, capital expenditures for property and equipment, plus cash flow, net of insurance, related to the previously disclosed Security Incident discovered in May 2020 (the "Security Incident"). For full year 2022, Blackbaud currently expects net cash outlays of $25 million to $35 million for ongoing legal fees related to the Security Incident. In line with the Company's policy, all associated costs due to third-party service providers and consultants, including legal fees, are expensed as incurred. As of June 30, 2023, we have recorded approximately $50 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. 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. Please refer to the section below titled "Non-GAAP Financial Measures" for more information on Blackbaud's use of non-GAAP financial measures. 25 مـ#26Expect accelerating growth in both 2023 and 2024 Area 2022 Revenue 2022 Organic revenue growth 2023 Outlook 2024+ Outlook Contractual recurring $709M 2% Mid-single digit growth High-single digit to low-double digit growth Transactional recurring $303M 8% High-single digit to low- double digit growth Sustainable mid-single digit to high-single digit growth One-time services $46M (20%) Similar decline as 2022 Total revenue $1,058M 3% $1,095M $1,125M/ ~5.5% CC @ midpoint Decline slows in FY24; stabilizes thereafter High-single digit to low-double digit growth 26 b➤#27On track to achieve Rule of 40 exiting 2023 with sustainable improvement expected in 2024 and beyond 2022 2023 (midpoint) 2023 exit 2024+ Drivers of sustained Rule of 40 improvement rate Organic revenue 4% 5.5% High-single digits growth¹ High-single digits to low- double digits Adjusted EBITDA margin¹ 25% 31% Low-to Mid-30s Mid-30s Rule of 401 29% 36.5% 40%+ Further Expansion 1 Non-GAAP at constant currency • . • Pricing initiatives drive multi-year compounding impact to primarily Social Sector contractual revenue that resets in 2026 Continued consistent growth in transactional revenue as online giving further proliferates Significant growth opportunity in Corporate Sector Gross margin expansion benefit over time from renewal pricing initiatives • Continued productivity gains and cost discipline 27 مـ#28Cash flow generation and capital allocation $78 • We intend to reduce net leverage to our ~2.0x target in the near-term through both cash flow generation and adjusted EBITDA growth • Over time, we expect to resume share repurchases through our Board-authorized program while maintaining a strong balance sheet Non-GAAP adjusted free cash flow¹ $168 $154 $200 2020 2021 2022 2023 Net leverage² 3.3x 3.2x 1.8x 2020 2021 2022 ~2.0x 2023 1 FY 2023 figure reflects midpoint of guidance. Non-GAAP adjusted free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, capital expenditures for property and equipment, plus cash outflows, net of insurance, related to the previously disclosed Security Incident discovered in May 2020. 2 Calculation of net debt over TTM EBITDA is based on credit agreement in place at the end of the respective reporting period. Current covenant for leverage ratio is less than or equal to 4.0x through Q4 2023. 28 bx ம்#29Appendix#30Historical Reconciliations of GAAP and Non-GAAP Organic Revenue Growth (Unaudited) (dollars in thousands) GAAP revenue GAAP revenue growth Less: Non-GAAP revenue from divested businesses (1) Non-GAAP organic revenue(2) Non-GAAP organic revenue growth Non-GAAP organic revenue(2) Foreign currency impact on Non-GAAP organic revenue (3) $ 2.1 % Six months ended 06/30/2023 $ 532,795 06/30/2022 Three months ended 06/30/2023 Year ended 03/31/2023 12/31/2022 12/31/2022 09/30/2022 522,051 2.3% 271,042 $ 261,753 1.8 % $ 1,058,105 $ 274,757 $ 261,297 $ Three months ended 06/30/2022 264,927 $ 257,124 03/31/2022 (2,613) $ 532,795 $ 519,438 2.6 % 271,042 $ 2.8 % 261,753 2.3 % (3,535) $ 1,054,570 $ (10) 274,747 $ (912) 260,385 $ (1,304) 263,623 $ 255,815 (1,309) $ 532,795 $ 519,438 $ 271,042 261,753 1,054,570 274,747 $ 260,385 $ 263,623 $ 255,815 3,657 980 Non-GAAP organic revenue on constant currency basis (3) $ 536,452 Non-GAAP organic revenue growth on constant currency basis $ 3.3 % 519,438 $ 272,022 $ 3.2 % 2,677 264,430 $ 1,054,570 274,747 $ 260,385 $ 263,623 $ 255,815 3.4 % GAAP recurring revenue GAAP recurring revenue growth 515,138 497,173 262,390 252,748 1,011,733 265,173 249,387 252,507 244,666 3.6 % 3.9 % 3.3 % Less: Non-GAAP recurring revenue from divested businesses (1) Non-GAAP organic recurring revenue(2) (2,545) $ 515,138 $ 494,628 4.1 % 262,390 $ 4.4 % 252,748 3.8 % $ (3,439) 1,008,294 $ (1) 265,172 $ (893) 248,494 $ (1,266) 251,241 $ (1,279) 243,387 Non-GAAP organic recurring revenue growth Non-GAAP organic recurring revenue(2) $ 515,138 $ 494,628 $ 262,390 3,388 518,526 $ 4.8 % $ 1,008,294 $ 265,172 $ 248,494 $ 251,241 $ 243,387 916 494,628 $ 263,306 $ 4.8 % $ 252,748 2,472 255,220 4.9 % $ 1,008,294 $ 265,172 $ 248,494 $ 251,241 $ 243,387 Foreign currency impact on non-GAAP organic recurring revenue (3) Non-GAAP organic recurring revenue on constant currency basis (3) Non-GAAP organic recurring revenue growth on constant currency basis (1) Non-GAAP revenue from divested businesses excludes revenue associated with divested businesses. The exclusion of the prior period revenue is to present the results of the divested business with the results of the combined company for the same period of time in both the prior and current periods. (2) Non-GAAP organic revenue and non-GAAP organic recurring revenue for the prior year periods presented herein may not agree to non-GAAP organic revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth is calculated. (3) To determine non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and EURO. 30 فــ#31Reconciliations of Non-GAAP Organic Revenue Growth and Rule of 40 (Unaudited) (dollars in thousands) Three months ended 06/30/2023 Six months ended 06/30/2022 06/30/2023 06/30/2022 $ 2,105 $ (3,422) $ (12,596) $ (13,829) GAAP net income Non-GAAP adjustments: Add: Interest, net Less: GAAP income tax benefit Add: Depreciation Add: Amortization of intangibles from business combinations Add: Amortization of software and content development costs(1) Subtotal Non-GAAP EBITDA Non-GAAP EBITDA margin Non-GAAP adjustments: Add: Stock-based compensation expense Add: Employee severance Add: Acquisition and disposition-related costs Add: Restructuring and other real estate activities Add: Security Incident-related costs, net of insurance (2) Add: Impairment of capitalized software development costs Subtotal Non-GAAP adjusted EBITDA Non-GAAP adjusted EBITDA margin Rule of 40(3) Non-GAAP adjusted EBITDA Foreign currency impact on Non-GAAP adjusted EBITDA (4) Non-GAAP adjusted EBITDA on constant currency basis (4) Non-GAAP adjusted EBITDA margin on constant currency basis Rule of 40 on constant currency basis (5) 8,859 8,862 18,285 16,338 (10,200) (2,367) (14,101) (4,417) 3,272 3,585 6,608 7,123 13,924 13,209 27,809 26,509 10,934 9,488 21,540 18,733 26,789 32,777 60,141 64,286 $ 28,894 $ 29,355 $ 47,545 $ 50,457 10.7 % 8.9% - 33,364 27,854 63,289 55,714 632 (849) 462 4,954 462 2,292 (230) 3,249 71 26,777 8,348 44,560 15,549 2,263 2,263 59,924 41,219 112,573 77,308 $ 88,818 $ 70,574 $ 160,118 $ 127,765 32.8 % 30.1 % 35.6 % 32.7% $ 88,818 574 89,392 $ 32.9 % 70,574 160,118 1,651 1,871 127,765 2,152 72,225 $ 161,989 30.2 % $ 129,917 36.1 % 33.5 % (1) Includes amortization expense related to software and content development costs and amortization expense from capitalized cloud computing implementation costs. (2) Includes Security Incident-related costs incurred, net of probable insurance recoveries. Recorded expenses consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims and accruals for certain loss contingencies. Not included in this adjustment were costs associated with enhancements to our cybersecurity program. (3) Measured by non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. See Non-GAAP organic revenue growth table on prior slide. (4) To determine non-GAAP adjusted EBITDA on a constant currency basis, non-GAAP adjusted EBITDA from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and EURO. (5) Measured by non-GAAP organic revenue growth on constant currency basis plus non-GAAP adjusted EBITDA margin on constant currency basis. See Non-GAAP organic revenue growth table on prior slide. 31 b➤#32Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) (in thousands, except per share amounts) Revenue GAAP Three Months Ended June 30, 2023 Stock-based compensation expense Amortization of intangibles from business combinations Employee Acquisition and disposition-related severance Security Incident- related costs, net of insurance (1) Non-GAAP adjustments subtotal costs Non-GAAP Recurring One-time services and other Total revenue $ 262,390 $ 8,652 271,042 $ $ Cost of revenue Cost of recurring 113,926 Cost of one-time services and other 7,549 (3,559) (584) (12,790) (22) (346) (32) Total cost of revenue 121,475 (4,143) (13,136) (54) Gross profit 149,567 $ $ $ $ 262,390 8,652 271,042 (16,371) (962) 97,555 6,587 (17,333) 104,142 4,143 13,136 54 17,333 166,900 Recurring gross margin 56.6 % One-time services and other gross margin 12.7 % Total gross margin 55.2 % 6.2% 62.8 % 11.2 % 23.9 % 6.4 % 61.6 % Operating expenses Sales, marketing and customer success 53,191 (7,193) Research and development 36,146 (7,605) General and administrative 59,148 (14,423) | | | (453) (7,646) 45,545 (2) (7,607) 28,539 (123) 849 (26,777) (40,474) 18,674 Amortization 788 (788) - (788) Total operating expenses 149,273 (29,221) (788) (578) 849 (26,777) (56,515) 92,758 Income from operations 294 33,364 13,924 632 (849) 26,777 73,848 74,142 Total operating margin 0.1 % 27.3 % 27.4 % Net Income $ Shares used in computing diluted earnings per share Diluted earnings per share $ 2,105 53,643 0.04 $ 52,602 53,643 $ 0.98 32 b➤ (1) Includes Security Incident-related costs incurred, net of insurance recoveries. Recorded expenses consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims and accruals for certain loss contingencies. Not included in this adjustment were costs associated with enhancements to our cybersecurity program.#33Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) (in thousands, except per share amounts) Revenue GAAP Stock-based compensation expense Six Months Ended June 30, 2023 Amortization of intangibles from business combinations Employee Acquisition and disposition-related severance Security Incident- related costs, net of insurance (1) Non-GAAP adjustments subtotal costs Non-GAAP Recurring One-time services and other Total revenue $ 515,138 $ 17,657 532,795 $ $ Cost of revenue Cost of recurring 228,426 (6,746) (25,556) (433) Cost of one-time services and other 16,161 (1,351) (691) (364) Total cost of revenue 244,587 (8,097) (26,247) (797) Gross profit 288,208 Recurring gross margin 55.7 % One-time services and other gross margin 8.5 % Total Gross Margin 54.1 % $ $ $ $ 515,138 17,657 532,795 (32,735) 195,691 (2,406) 13,755 (35,141) 209,446 8,097 26,247 797 35,141 323,349 6.3 % 62.0 % 13.6 % 22.1 % 6.6% 60.7 % Operating expenses Sales, marketing and customer success 107,576 (12,708) (2,089) (14,797) 92,779 Research and development 76,737 (14,907) (1,135) (16,042) 60,695 General and administrative 111,986 (27,577) (933) 230 (44,560) (72,840) 39,146 Amortization 1,562 (1,562) (1,562) Total operating expenses 297,861 (55,192) (1,562) (4,157) 230 (44,560) (105,241) 192,620 Income from operations (9,653) 63,289 27,809 4,954 (230) 44,560 140,382 130,729 Total Operating Margin (1.8)% 26.3 % 24.5 % Net (loss) income $ Shares used in computing diluted (loss) earnings per share Diluted (loss) earnings per share $ (12,596) 52,389 (0.24) $ 90,948 53,169 $ 1.71 (1) Includes Security Incident-related costs incurred, net of probable insurance recoveries. Recorded expenses consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims and accruals for certain loss contingencies. Not included in this adjustment were costs associated with enhancements to our cybersecurity program. 33 b➤#34Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) (in thousands, except per share amounts) Revenue GAAP Stock-based compensation expense Three Months Ended June 30, 2022 Amortization of intangibles from business combinations Employee severance Acquisition and disposition-related Security Incident- related costs, net of insurance (1) Impairment of capitalized software development costs Non-GAAP adjustments subtotal costs Non-GAAP Recurring One-time services and other Total revenue $ 252,507 $ 12,420 264,927 $ Cost of revenue Cost of recurring 114,487 Cost of one-time services and other 11,120 (2,888) (876) (12,059) (50) (345) (331) Total cost of revenue 125,607 (3,764) (12,404) (381) 139,320 3,764 12,404 381 Gross profit Recurring gross margin 54.7 % One-time services and other gross margin 10.5 % Total gross margin 52.6 % $ $ $ $ $ 252,507 12,420 264,927 (14,997) (1,552) (16,549) 99,490 9,568 109,058 16,549 155,869 5.9 % 60.6 % 12.5 % 23.0 % 6.2% 58.8 % Operating expenses Sales, marketing and customer success 52,737 Research and development 38,333 (5,293) (5,875) (5,293) 47,444 (5,875) 32,458 General and administrative 47,391 (12,922) (81) (2,292) (8,348) (2,263) (25,906) 21,485 Amortization 805 (805) Total operating expenses 139,266 (24,090) (805) (81) (2,292) (8,348) (2,263) (805) (37,879) 101,387 Income from operations 54 27,854 13,209 462 2,292 8,348 2,263 54,428 - % 54,482 20.6 % 20.6 % Total Operating Margin Net (loss) income $ Shares used in computing diluted (loss) earnings per share Diluted (loss) earnings per share $ (3,422) 51,661 (0.07) $ 38,911 51,986 $ 0.75 (1) Includes Security Incident-related costs incurred, net of probable insurance recoveries. Recorded expenses consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims and accruals for certain loss 34 contingencies. Not included in this adjustment were costs associated with enhancements to our cybersecurity program. b➤#35Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Six Months Ended June 30, 2022 Amortization of (in thousands, except per share amounts) Revenue Recurring One-time services and other Total revenue GAAP $ 497,173 $ 24,878 522,051 Stock-based compensation expense intangibles from business combinations $ Employee severance Cost of revenue Cost of recurring 226,661 (6,006) (24,189) (50) Cost of one-time services and other 22,308 (1,907) (704) (331) Total cost of revenue 248,969 (7,913) (24,893) (381) Acquisition and disposition-related costs $ Restructuring and other real estate activities $ Security Incident- related costs, net of insurance (1) Impairment of capitalized software development costs Non-GAAP adjustments subtotal Non-GAAP $ $ 497,173 24,878 522,051 (30,245) 196,416 (2,942) 19,366 (33,187) 215,782 Gross profit 273,082 7,913 24,893 381 33,187 306,269 Recurring gross margin 54.4 % One-time services and other gross margin 10.3 % Total Gross Margin 52.3 % 6.1 % 60.5 % 11.9 % 6.4 % 22.2 % 58.7 % Operating expenses Sales, marketing and customer success 107,953 (10,304) (10,304) 97,649 Research and development 78,285 (12,117) (12,117) 66,168 General and administrative 91,153 (25,380) (81) (3,249) (71) (15,549) (2,263) (46,593) 44,560 Amortization 1,616 (1,616) (1,616) Total operating expenses 279,007 (47,801) (1,616) (81) (3,249) (71) (15,549) (2,263) (70,630) 208,377 Income from operations (5,925) 55,714 26,509 462 3,249 71 15,549 2,263 103,817 97,892 (1.1)% 19.9 % 18.8 % Total Operating Margin Net (loss) income $ Shares used in computing diluted (loss) earnings per share Diluted (loss) earnings per share $ (13,829) 51,432 (0.27) $ 68,457 51,954 $ 1.32 (1) Includes Security Incident-related costs incurred, net of probable insurance recoveries. Recorded expenses consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims and accruals for certain loss contingencies. Not included in this adjustment were costs associated with enhancements to our cybersecurity program. 35 b➤#36Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Historical Consolidated Balance Sheets (Unaudited) (in thousands) Assets Current assets: Cash and cash equivalents Restricted cash Q1 2022 Accounts receivable, net of allowance Customer funds receivable Prepaid expenses and other current assets Total current assets Property and equipment, net Operating lease right-of-use assets Software and content development costs, net Goodwill Intangible assets, net Other assets Total assets $ 33,786 $ 279,594 29,029 $ 449,491 31,413 $ 343,928 91,770 149,237 86,704 31,691 $ 702,240 102,809 24,083 $ 364,071 29,041 761,289 100,253 168,908 2,049 1,194 1,853 249 2,136 3,731 99,913 98,041 83,639 81,654 88,779 81,597 507,112 726,992 547,537 918,643 579,322 1,044,566 112,675 111,865 109,474 107,426 105,309 104,672 51,808 50,036 47,430 45,899 47,176 45,497 126,766 130,329 135,594 141,023 145,705 151,158 1,056,794 1,051,230 1,047,178 1,050,272 1,051,652 1,053,342 683,348 664,400 643,994 635,136 622,237 609,524 90,194 $ 2,628,697 $ 90,670 2,825,522 $ 95,376 2,626,583 $ 94,304 2,992,703 $ 87,947 2,639,348 $ 84,254 3,093,013 Liabilities and stockholders' equity Current liabilities: Trade accounts payable $ 39,490 $ Accrued expenses and other current liabilities 72,195 Due to customers 278,179 36,640 $ 77,411 449,402 36,374 $ 78,471 42,559 $ 86,002 46,528 $ 40,730 72,799 102,747 344,305 700,860 364,397 763,845 Debt, current portion 18,116 18,154 18,193 18,802 19,136 19,176 Deferred revenue, current portion 350,952 412,712 393,679 382,419 361,003 434,631 Total current liabilities 758,932 994,319 871,022 1,230,642 863,863 1,361,129 Debt, net of current portion 963,109 921,619 835,881 840,241 858,912 827,403 Deferred tax liability 144,590 135,393 131,773 125,759 131,460 91,306 Deferred revenue, net of current portion 4,725 3,547 2,920 2,817 6,956 3,520 Operating lease liabilities, net of current portion 50,785 48,542 46,400 44,918 45,190 43,529 Other liabilities 1,506 Total liabilities 1,923,647 1,628 2,105,048 5,775 1,893,771 4,294 13,234 4,756 2,248,671 1,919,615 2,331,643 Commitments and contingencies Stockholders' equity: Preferred stock Common stock, $0.001 par value Additional paid-in capital Treasury stock, at cost Accumulated other comprehensive income 68 68 68 68 69 69 993,223 (535,585) 15,295 1,020,835 1,048,688 1,075,264 1,105,189 (536,511) 7,455 (536,968) 2,716 (537,287) 8,938 (568,277) 1,138,553 (570,547) 404 8,842 Retained earnings 232,049 228,627 218,308 197,049 182,348 184,453 Total stockholders' equity 705,050 720,474 732,812 744,032 719,733 761,370 Total liabilities and stockholders' equity $ 2,628,697 $ 2,825,522 $ 2,626,583 $ 2,992,703 $ 2,639,348 $ 3,093,013 36 b➤#37Historical Consolidated Statements of Comprehensive Income (Unaudited) Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 (in thousands, except share and per share amounts) Revenue Q2 2023 Recurring One-time services and other $ 244,666 $ 252,507 $ 12,458 12,420 249,387 $ 11,910 Total revenue 257,124 264,927 261,297 265,173 $ 9,584 274,757 1,011,733 $ 46,372 1,058,105 252,748 $ 9,005 261,753 262,390 8,652 271,042 Cost of revenue Cost of recurring 112,174 114,487 111,488 125,300 463,449 114,500 113,926 Cost of one-time services and other 11,188 11,120 9,449 10,183 41,940 8,612 Total cost of revenue 123,362 125,607 120,937 135,483 505,389 123,112 7,549 121,475 Gross profit 133,762 139,320 140,360 139,274 552,716 138,641 149,567 Operating expenses Sales, marketing and customer success 55,216 52,737 56,414 57,088 221,455 54,385 53,191 Research and development 39,952 38,333 40,451 38,177 156,913 40,591 36,146 General and administrative 43,762 47,391 49,860 58,895 199,908 52,838 59,148 Amortization 811 805 647 662 2,925 774 788 Total operating expenses (Loss) income from operations Interest expense 139,741 139,266 147,372 154,822 581,201 148,588 149,273 (5,979) 54 (7,012) (15,548) (28,485) (9,947) (7,599) (8,976) (9,337) (9,891) (35,803) (10,662) 294 (11,167) Other income, net 1,121 3,133 4,454 5 8,713 2,007 2,778 Loss before benefit for income taxes (12,457) (5,789) (11,895) Income tax benefit (2,050) (2,367) (1,576) Net (loss) income $ (10,407) $ (3,422) $ (10,319) $ (25,434) (4,175) (21,259) $ (55,575) (10,168) (45,407) $ (18,602) (3,901) (8,095) (10,200) (14,701) $ 2,105 (Loss) earnings per share Basic $ (0.20) $ (0.07) $ (0.20) $ (0.41) $ (0.88) $ Diluted $ (0.20) $ (0.07) $ (0.20) $ (0.41) $ (0.88) $ (0.28) $ (0.28) $ 0.04 0.04 Common shares and equivalents outstanding Basic weighted average shares Diluted weighted average shares 51,199,717 51,199,717 51,660,739 51,660,739 51,692,152 51,692,152 51,716,948 51,716,948 51,569,148 51,569,148 52,132,999 52,132,999 52,642,411 53,643,124 Other comprehensive (loss) income Foreign currency translation adjustment Unrealized gain (loss) on derivative instruments, net of tax Total other comprehensive income (loss) Comprehensive (loss) income (2,132) 10,905 8,773 (10,398) 2,558 (7,840) (11,536) 7,906 (16,160) 2,158 3,055 6,797 (1,684) 18,576 (10,692) 5,383 (4,739) 6,222 2,416 (8,534) 8,438 $ (1,634) $ (11,262) $ (15,058) $ (15,037) $ (42,991) $ (23,235) $ 10,543 Note 1: The individual amounts for each quarter may not sum to full year totals due to rounding. 37 b➤#38Historical Consolidated Statements of Cash Flows (Unaudited) 3 months ended (in thousands) Cash flows from operating activities 3/31/2022 6 months ended 6/30/2022 9 months ended 9/30/2022 12 months ended 12/31/2022 3 months ended 3/31/2023 6 months ended 6/30/2023 Net loss $ (10,407) $ (13,829) $ (24,148) $ (45,407) $ (14,701) $ (12,596) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 53,622 25,545 51,283 76,606 102,369 27,272 Provision for credit losses and sales returns Stock-based compensation expense Deferred taxes 1,875 3,653 4,374 6,066 1,522 3,798 27,860 55,714 83,659 110,294 29,925 63,289 (7,431) (16,656) (21,672) (26,644) 9,245 (33,101) Amortization of deferred financing costs and discount 645 1,254 1,827 2,364 500 Other non-cash adjustments (150) 4,225 5,677 5,676 (215) 963 (1,569) Changes in operating assets and liabilities, net of acquisition and disposal of businesses: Accounts receivable 9,010 (50,818) 9,998 (7,340) 1,139 (69,624) Prepaid expenses and other assets (2,067) 3,685 22,246 26,235 (2,750) 9,470 Trade accounts payable 15,919 12,769 14,435 21,607 3,362 (3,431) Accrued expenses and other liabilities Deferred revenue Net cash provided by operating activities (13,430) (8,739) (7,028) (2,386) (15,931) 11,948 (22,865) 39,238 23,832 11,059 (17,562) 52,233 24,504 81,779 189,806 203,893 21,806 75,002 Cash flows from investing activities Purchase of property and equipment (4,266) (7,518) (10,512) (12,289) (1,364) (2,779) Capitalized software and content development costs (12,683) (27,183) (42,757) (58,774) (13,967) (28,756) Purchase of net assets of acquired companies, net of cash and restricted cash acquired (19,985) (19,016) (20,945) (20,912) Net cash used in sale of business 6,426 6,426 Net cash used in investing activities (36,934) (53,717) (67,788) (85,549) (15,331) (31,535) Cash flows from financing activities Proceeds from issuance of debt 59,400 113,200 Payments on debt (33,765) (129,548) 126,900 (229,442) 211,000 (310,740) 92,600 (75,403) 158,000 (171,824) Stock issuance costs (557) Employee taxes paid for withheld shares upon equity award settlement (34,674) (35,600) Change in due to customers (315,294) (141,001) Change in customer funds receivable (1,115) (546) (1,205) (36,057) (243,109) (1,291) (1,339) (36,376) (31,417) (33,687) 111,386 (337,159) 61,313 380 (1,859) (3,359) Net cash (used in) provided by financing activities Effect of exchange rate on cash, cash equivalents, and restricted cash Net (decrease) increase in cash, cash equivalents, and restricted cash Cash, cash equivalents, and restricted cash, beginning of period Cash, cash equivalents, and restricted cash, end of period Note 1: The individual amounts for each quarter may not sum to full year totals due to rounding. (325,448) (194,052) (384,204) (25,689) (353,238) 10,443 (504) (7,252) (14,235) (10,486) 986 2,489 (338,382) (173,242) (276,421) 82,169 651,762 $ 313,380 $ 651,762 478,520 $ 651,762 375,341 $ 651,762 733,931 $ (345,777) 733,931 56,399 733,931 388,154 $ 790,330 38 فــ#39Historical Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) (in thousands, except share and per share amounts) GAAP Revenue GAAP gross profit GAAP gross margin Non-GAAP adjustments: Add: Stock-based compensation expense Add: Amortization of intangibles from business combinations Q1 2022 Q2 2022 Q3 2022 $ 257,124 $ 264,927 $ 261,297 $ Q4 2022 274,757 $ FY 2022 (1) 1,058,105 Q1 2023 Q2 2023 $ 261,753 $ 271,042 $ 133,762 $ 52.0% 139,320 52.6 % $ 140,360 $ 53.7 % 139,274 50.7 % $ 552,716 52.2 % $ 138,641 $ 53.0 % 149,567 55.2% 4,149 12,489 3,764 3,414 3,109 14,436 3,954 4,143 12,404 11,913 11,686 48,492 13,111 13,136 Add: Employee severance Subtotal Non-GAAP gross profit 381 16,638 $ 150,400 $ Non-GAAP gross margin GAAP (loss) income from operations 58.5% 16,549 155,869 $ 58.8 % (33) 15,294 1,787 2,135 16,582 65,063 743 17,808 54 17,333 155,654 $ 59.6% 155,856 $ 56.7% 617,779 $ 58.4 % 156,449 $ 166,900 59.8 % 61.6 % $ (5,979) $ GAAP operating margin Add: Stock-based compensation expense (2.3)% 54 $ - % (7,012) $ (2.7)% (15,548) $ (5.7)% (28,485) (2.7)% $ (9,947) $ 294 (3.8)% 0.1 % Non-GAAP adjustments: Add: Amortization of intangibles from business combinations 27,860 13,300 27,854 27,945 26,635 110,294 29,925 33,364 13,209 12,560 12,348 51,417 13,885 13,924 Add: Employee severance Add: Acquisition and disposition-related costs Add: Restructuring and other real estate activities Add: Security Incident-related costs, net of insurance Add: Impairment of capitalized software development costs Subtotal 462 232 4,470 5,164 4,322 632 957 2,292 2,456 430 6,135 619 (849) 71 71 7,201 8,348 13,658 26,516 2,263 49,389 54,428 56,851 Non-GAAP income from operations Non-GAAP operating margin $ 43,410 $ 54,482 $ 49,839 $ 16.9 % 20.6 % 19.1 % 70,399 54,851 $ 20.0 % 55,723 2,263 231,067 202,582 $ 19.1 % 17,783 26,777 66,534 73,848 56,587 $ 74,142 21.6 % 27.4 % GAAP loss before benefit for income taxes $ (12,457) $ (5,789) $ GAAP net (loss) income $ (10,407) $ (3,422) $ (11,895) $ (10,319) $ (25,434) $ (21,259) $ (55,575) $ (45,407) $ (18,602) $ (14,701) $ (8,095) 2,105 Shares used in computing GAAP diluted (loss) earnings per share GAAP diluted (loss) earnings per share 51,199,717 51,660,739 51,692,152 51,716,948 51,569,148 52,132,999 53,643,124 $ (0.20) $ (0.07) $ (0.20) $ (0.41) $ (0.88) $ (0.28) $ 0.04 Non-GAAP adjustments: Less: GAAP income tax benefit Add: Total Non-GAAP adjustments affecting income from operations Non-GAAP income before provision for income taxes (2,050) (2,367) (1,576) (4,175) (10,168) (3,901) (10,200) 49,389 54,428 56,851 70,399 231,067 66,534 73,848 36,932 48,639 44,956 44,965 175,492 47,932 65,753 Assumed non-GAAP income tax provision (3) Non-GAAP net income 7,386 9,728 8,991 $ 29,546 $ 38,911 $ 35,965 $ 8,993 35,972 $ 35,098 140,394 $ 9,586 38,346 13,151 $ 52,602 Shares used in computing Non-GAAP diluted earnings per share Non-GAAP diluted earnings per share 52,076,858 51,985,530 52,362,781 52,923,158 52,207,573 53,171,410 53,643,124 $ 0.57 $ 0.75 $ 0.69 $ 0.68 $ 2.69 $ 0.72 $ 0.98 (1) The individual amounts for each quarter may not sum to full year totals due to rounding. (2) Includes Security Incident-related costs incurred, net of probable insurance recoveries. Recorded expenses consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims and accruals for certain loss contingencies. Not included in this adjustment were costs associated with enhancements to our cybersecurity program. (3) We apply a non-GAAP effective tax rate of 20.0% when calculating non-GAAP net income and non-GAAP diluted earnings per share. 39 b➤#40Historical Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) 3 months ended (in thousands) GAAP net cash provided by operating activities Less: purchase of property and equipment 3/31/2022 6 months ended 6/30/2022 9 months ended 9/30/2022 12 months ended 12/31/2022 3 months ended 3/31/2023 6 months ended 06/30/2023 24,504 (4,266) 81,779 (7,518) 189,806 203,893 21,806 75,002 (10,512) (12,289) (1,364) (2,779) Less: capitalized software and content development costs Non-GAAP free cash flow (12,683) (27,183) (42,757) (58,774) (13,967) (28,756) $ Add: Security Incident-related cash flows, net of insurance Non-GAAP adjusted free cash flow 7,555 $ 823 $ 8,378 $ 47,078 $ 5,164 52,242 $ 136,537 $ 132,830 $ 6,475 $ 43,467 9,536 146,073 $ 20,864 153,694 $ 9,223 15,822 15,698 $ 59,289 40 40 فــ#41blackbaud Thank you