Mike Gianoni: Yes, there is still lots of interest in corporations funding what we view with EVERFI in K-12 schools. And we have announced some expansions in my prepared remarks in previous quarters. And so the corporate social responsibility budgets are still there in, say, the Fortune 500. It’s just where they deploy those budgets. So the pressure we’ve seen has predominantly been in the financial services space starting last year. But the demand is still there and the interest is still there. And what’s interesting about the K-12 network we have, we bring that network and our reach and that capability to customers and prospective customers. And there is a lot of interest at the CEO level of Fortune 500 companies and Board level given the investments they do.
The bigger footprint is in financial services and they are required to get back with the Community Reinvestment Act. So it’s a regulatory requirement. And so we’re still a platform that is of interest there. There is some shifts that happened in the last year. which caused a drag on the business. But we’ve got an operating plan underway across the EVERFI business. We have an outstanding reputation. I have met a lot of customers in the last couple of years, and they are very enamored with what EVERFI has built and delivers. There has never been a question related to that, spend more around where the CSR spend has been. But we have a big footprint in financial services, we’ve got more opportunities there to grow the business with big customers and we’re operating internally on a plan to make sure that business adds to shareholder value.
Exiting the UK was a part of that. Our organic growth went up because we divested the UK business, for example. It’s a small business related to Blackbaud, but much higher percentage related to EVERFI when you think of EVERFI as a subset of the corporate impact revenue, right? So, EVERFI will grow more just because we exited the UK business, and there’s more to come on operating improvements in EVERFI.
Kirk Materne: Okay. And then just, Tony, one quick one for you, in your presentation, you obviously called out this year in transactional recurring, it’s a tougher comp. Is there anything we should keep in mind from just a seasonality perspective along those lines? Meaning when you think about the global events last year, were there any quarters that we should just be thinking about that will have a bigger impact on growth this year from a comp perspective? Thanks
Tony Boor: Yes. Thanks, Kirk, that’s a really good question. There is typical seasonality, as everybody is aware, on the transaction side of the business. Typically, the back half of the year, we do have some in Q2 as well with some of the efforts around the schools, and the school years, and so forth. But certainly, Q3 and Q4, we have a lot of transactional. The end-of-year giving, Giving Tuesday, those kind of things typically will drive seasonality in the business. The difficult part for us to forecast and predict both from a cost, and timing and length of 10-year is the viral events that happened because of major events in the world. Last year, to your point, we had quite a bit of impact, positive impact, in the back half.
We spoke of that quite a bit on last quarter’s call. We ended up, that transaction business normally has a growth CAGR of somewhere in the 7% to 8% range per year over the last few years. Last year, on the social impact side, I think, we came in at about 11% or 12%, and that was largely driven by these – we had more viral events and they were larger, longer-term viral events than what we had seen in recent years. And so it’s tough to predict. We typically don’t build those into our forecast. It’s going to make a tough compare this year because right now, based upon forecast, we’re not assuming any of those, but not to say we won’t have some viral events. Typically, we have one or two a year. We just can’t tell when they will happen. So that will be the wildcard for us this year.
Kirk Materne: Yes, that’s helpful.
Mike Gianoni: Yes. So there is some variances by quarter. We just did a press release, for example, on the London Marathon and fundraising on our JustGiving platform, which had a lot of great growth. That just happened in April. So it’s in Q2. But I think some of the stats there were 18,000 fundraisers raised money for 1,700 nonprofits, and it was a really nice growth year-over-year. Those kind of things are hard to predict how they would come out. So, the growth of those organically are sometimes hard to predict. And also sometimes, some of those move from quarter-to-quarter as well, and you don’t know about it until three or six months ahead of time. So, it causes some variability quarter-to-quarter.
Kirk Materne: Okay, that’s helpful. Thank you, all
Tony Boor: Thanks, Kirk.
Mike Gianoni: You are welcome.
Operator: Thank you. Ladies and gentlemen, as there are no further questions, I now hand the conference over to Mike Gianoni, our Chief Executive Officer, for his closing comments.
Mike Gianoni: Thank you, operator. Everyone, when I reflect back on the past year, there are many aspects of our business that are far improved year-over-year. Our pace of innovation has really increased. Our modernized approach to contract renewals is now well established, and the majority of our customers are adopting the three-year renewal terms, which is great. On the profitability side, our efficiency has increased and margins are expanding. We’ve generated strong adjusted cash flow. We’re actively returning capital to our investors through stock repurchases. Our financial results have improved significantly over the past year, and we expect improvement to continue in 2024. As we progress through this year, our focus is maintaining good momentum in the business executing improvement plans were needed, continuing to deliver strong financial results in world-class solutions for customers. Thanks, everyone.
Operator: Thank you. The conference of Blackbaud has now concluded. Thank you for your participation. You may now disconnect your lines.
