The breach at software giant Blackbaud did not have a significant impact on the company’s revenue. While the company will invest in cybersecurity, between $ 36 million and $ 41 million will be spent on real estate consolidation this year.

Blackbaud officials said COVID had the biggest impact on revenue, for the third quarter ended September 30 during a call with stock analysts. Total non-GAAP (generally accepted accounting principles) revenue was $ 215 million, down 2.9%, with $ 200.1 million of non-GAAP recurring revenue, or 93.1% of total non-GAAP revenue. Recurring non-GAAP revenue was down 2.6%.

Non-GAAP operating income was $ 48.1 million, with a non-GAAP operating margin of 22.4%, according to data released by Blackbaud.

Blackbaud President and CEO Mike Gianoni and Tony Boor, Executive Vice President and CFO, spoke about financial performance and changes in the company’s workforce and operations caused by the pandemic. The biggest issue was the cancellation of events by Blackbaud users due to COVID-19. Blackbaud collects a transaction fee when a donor makes a donation or registers for an event.

“Our customers continue to face the challenges caused by the pandemic that will put pressure on our ability to generate short-term revenue growth in 2020 and 2021, so we are executing our balanced strategy with a greater focus on profitability.” , said Gianoni. “Digital transformation has shifted from a long-term strategy to an everyday reality, as market organizations have adapted to new and distributed ways of working. “

Gianoni said the sales pipeline for the rest of the year and for 2021 is weak due to the lengthening decision-making timeline of charities due to the pandemic.

With Blackbaud also shifting to a strong digital focus, which includes staff working in environments other than offices, the company is spending between $ 20 million and $ 25 million to terminate office leases around the world. Blackbaud also spent $ 16 million to buy the new headquarters campus in Charleston, South Carolina, which it was leasing.

Blackbaud made headlines in July when it was announced that a ransom had been paid to hackers who entered the system in February but were not discovered until May. Some donor data was viewed during the breach, impacting what Blackbaud officials called a small number of users, but required notification to customers around the world. Blackbaud officials declined to say how many nonprofits had information stolen or how much ransom was paid.

Gianoni said the costs associated with the hack were not material to the company’s financial statements, although they were reported to the Securities and Exchange Commission (SEC). As a public company, Blackbaud must file with the SEC when there is a potential to impact results.

Some of the data points released during the analyst call include:

• Total GAAP revenue was $ 215.0 million, down 2.8%, with $ 200.1 million in GAAP recurring revenue, or 93.1% of total GAAP revenue. GAAP recurring revenue was down 2.5%.
• Total non-GAAP revenue was $ 215.0 million, down 2.9%, with $ 200.1 million in non-GAAP recurring revenue, representing 93.1% of total revenue non-GAAP. Recurring non-GAAP revenue was down 2.6%.
• Recurring non-GAAP organic revenue decreased 2.6%.
• GAAP operating income was $ 10.1 million, with a GAAP operating margin of 4.7%, an increase of 110 basis points.
• Non-GAAP operating income was $ 48.1 million, with a non-GAAP operating margin of 22.4%, an increase of 590 basis points.
• GAAP net income was $ 4.9 million, with diluted GAAP earnings per share of $ 0.10, up $ 0.01 per share.
• Non-GAAP net income was $ 35.7 million, with diluted non-GAAP earnings per share of $ 0.73, up $ 0.17 per share.
• Non-GAAP free cash flow was $ 41.4 million, a decrease of $ 21.1 million.

Boor said that while nothing is imminent, they are considering smaller companies that could be under pressure from the pandemic and that its debt facility and leverage ratios would allow for acquisitions where appropriate. Blackbaud’s debt ratio is 115%.

Blackbaud is a public company and the shares are traded on the NASDAQ. Shares closed at $ 49.34 on Friday, down 38% year-to-date and a year-over-year change down 43.5%. The company’s net margins are just under 2.5%.