Blackbaud considering alternatives for Everfi, to take charge up to $415M

In a regulatory filing, Blackbaud (BLKB) said it previously disclosed that while EVERFI, a component of its Corporate Sector market group, represented a small portion of the company’s total revenue at approximately 8% for the nine months ended September 30, the company expected EVERFI to continue to be a drag on its overall performance. “We recently hired a strategic advisor to assist us in considering a range of alternatives for EVERFI, one of which includes a potential divestiture of the business. As part of evaluating alternatives for EVERFI, we prepared a revised business forecast that included a new level of detail, including separately identifiable cash flows for EVERFI. The Company then reassessed its asset groupings under ASC 360-10 and determined there was a new asset group for EVERFI and evaluated this asset group for potential impairment. On December 9, 2024, the Company concluded that a material impairment charge is required related to its EVERFI asset group, which primarily includes finite-lived intangible assets and capitalized software and content development costs. The estimated pre-tax noncash charge may be up to approximately $415 million, which will be reflected in our consolidated financial statements for the fourth quarter of 2024. The Company is currently in the process of measuring the impairment and the actual amount of the impairment charge could differ materially from this estimate. In accordance with Item 2.06 of Form 8-K, the Company will file an amendment to this Current Report on Form 8-K after it makes a determination of an estimate of the amount or range of amounts of the impairment charge. The impairment charge will not result in any future cash expenditures. There may be additional impairment charges recorded as a result of completing our evaluation of strategic alternatives for EVERFI. EVERFI remains well positioned to support its customers. We will continue to provide updates as progress is made on this initiative,” the company stated.