Blackbaud (BLKB) risk factors, FY2024 10-K

Strategic Risks

1. 01Our failure to compete successfully, including through technology innovations or new and improved solutions, could cause our revenue or market share to decline
2. 02To meet our objectives successfully, we must attract and retain highly qualified personnel with specialized skill sets. If we are unable to attract and retain suitably qualified management, there could be a material adverse impact on our business
3. 03The market for software and services for the social impact community might not grow and the organizations in that community might not continue to adopt, or renew their subscriptions for, our solutions and services
4. 04Changes in the US federal or state governmental grant, award or other funding programs could negatively impact the operations of our nonprofit customers, which could have a material adverse effect on our business, results of operations, financial condition and liquidity
5. 05We are incorporating generative AI technology into certain of our solutions and services. This technology is new and developing, and while we aim to adopt known best practices, it may result in operational, financial and reputational harm and other adverse consequences to our business
6. 06If we do not successfully address the risks inherent in the expansion of our international operations, our business could suffer
7. 07Unfavorable media coverage related to peer-to-peer fundraising campaigns on our social platforms could negatively impact our business
8. 08Acquisitions could be difficult to consummate and integrate into our operations, and they could disrupt our business, dilute stockholder value or impair our financial results
9. 09For example, following our acquisition of EVERFI, Inc ("EVERFI") in December 2021, we experienced the loss of certain employees and were unable to realize the anticipated returns on our investment prior to our disposition of the business in December 2024
10. 10A reduction in the growth or amount of charitable giving due to deteriorating general economic conditions, a recession or otherwise could adversely affect our operating results and financial condition
11. 11Our failure to obtain licenses for, or our use of, third-party technologies could harm our business

Operational Risks

1. 12As previously disclosed, on July 16, 2020, we contacted certain customers to inform them about the Security Incident
2. 13See Note 11 to our consolidated financial statements included in this report for a more detailed description of the Security Incident and related matters
3. 14In addition, any legislative or regulatory changes adopted in reaction to the Security Incident or other companies’ data breaches could require us to make modifications to the operation of our business that could have an adverse effect and/or increase or accelerate our compliance costs
4. 15Climate change and other natural disasters, new regulations and standards and climate-related goals have impacted, and may in the future impact, our operations and financial performance
5. 16New regulations and standards relating to public disclosure, including proposed new rules related to climate change, could adversely impose significant costs on us to comply with such regulations
6. 17Defects, delays or interruptions in our cloud solutions and hosting services could diminish demand for these services and subject us to substantial liability
7. 18Material defects or errors in the software we use to deliver our services could harm our reputation, result in significant costs to us and impair our ability to sell our services

Financial Risks

1. 19Because a significant portion of our revenue is recognized over time on a ratable basis over the contract term, downturns in sales may not be immediately reflected in our revenue
2. 20We significantly increased our leverage in connection with stock repurchases, and may increase our leverage in the future in connection with acquisitions, Security Incident costs or other business purposes, which could adversely impact our business and financial performance
3. 21Our balance sheet includes significant amounts of goodwill and intangible assets. The impairment of a significant portion of these assets, such as the EVERFI impairment charges, could negatively affect our operating results
4. 22Restrictions in our credit facility limit certain of our activities, including dividend payments, stock repurchases and acquisitions
5. 23We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term stockholder value. Stock repurchases could also increase the volatility of the trading price of our stock and will diminish our cash reserves and increase our debt
6. 24We have recorded significant deferred tax assets, and we might never realize their full value, which would result in a charge against our earnings

Legal and Compliance Risks

1. 25Privacy and data protection concerns, including evolving domestic and international government regulation in the area of consumer data privacy or data protection, could adversely affect our business and operating results
2. 26Claims that we or our technologies infringe upon the intellectual property or other proprietary rights of a third party may require us to incur significant costs, enter into royalty or licensing agreements or develop or license substitute technology
3. 27Our solutions utilize open source software, which may subject us to litigation, require us to re-engineer our solutions, or otherwise divert resources away from our development efforts
4. 28We rely upon trademark, copyright, patent and trade secret laws to protect our proprietary rights, which might not provide us with adequate protection
5. 29trademark, copyright and trade secret laws, as well as nondisclosure agreements, each of which affords only limited protection
6. 30Provisions in our organizational documents, certain officer compensation arrangements and Delaware law may delay or prevent an acquisition or change of control of our Company that could be deemed beneficial to our stockholders
7. 31Changes in our effective tax rate and additional tax liabilities and global tax developments may impact our financial results