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Blackbaud says this week its move to three-year contracts for its software is highly successful.

During the recent webcast for earnings for the year ended December 31, CEO Mike Gianoni noted, “Most folks are taking three-year contract option.” Blackbaud ended the year with 65 percent of customers moving to the longer terms from one-year contracts. It expects that about 30 percent of those remaining will renew for three years during 2024. The new contracts build in price increases and in addition, Gianoni said, “We moved our list prices up a bit.” Because of those increases, he said the company must continue to add functionality to applications because “We feel we need to earn the right to have price increases.  In addition, Gianoni noted changes to sales compensation with “a tweak to the plan to keep focusing on adding new units across the board.” For 2023, the nonprofit software company returned to profitability with. Net income of $1.8 million, compared to a loss of $45.4 million for 2022. Last year’s revenue was $1.07 billion, an increase of from $1.06 billion the prior year. CFO Tony Boor noted an increase in cash flow for 2024, which enabled to pay for a variety of items from cash flow, including $50 million in costs stemming from a 2020 ransomware attack. These costs have included settlements with 49 states and penalties from the SEC and Federal Trade commission.

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