Good afternoon ladies and gentlemen. Thank you for standing by. Welcome to the Blackbaud third quarter 2009 earnings conference call. Today’s call is being recorded. (Operator Instructions) I would now like to turn the conference over to Mr. Tim Williams, Chief Financial Officer of Blackbaud. Please go ahead.

Thank you very much everyone for joining us this afternoon. We are here today to review our third quarter 2009 results and with me on the call today is Marc Chardon, President and Chief Executive Officer. Marc and I have prepared remarks and then we will open up the call a bit later for the questions. Please note our remarks today contain forward-looking statements. These statements are based solely on present information and are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Please refer to our SEC filings, including our most recent Annual Report on Form 10-K and the risk factors contained therein, as well as our periodic reports into the Securities Act of 1934 for more information on these risks and uncertainties and on the limitations that apply to our forward-looking statements. Also please note that a webcast of today’s call will be available in the Investor Relations section of our website. With that, I’d like to turn the call over to Marc and I’ll come back a little bit later to give some further details regarding our financials. Marc?

Thank you Tim, and my thanks to all of you on the call for joining us today to review our third quarter 2009 financial results. We are very pleased with the company’s better than expected performance for the third quarter, particularly considering the economic environment which remains quite challenging. The enterprise component of our business continues to be an important driver of a very solid overall results. We also continue to strengthen our leadership position in the online fund raising segment of the market. We are generating strong growth of our subscription revenues sources and believe the company is well positioned to return to low to mid teens revenue growth when the economic environment eventually improves. Let’s take a look at financial highlights for the third quarter. Our total non-GAAP revenue of approximately $79.7 million was above the high end of our guidance, up from $77.2 million last quarter, went down 3.6% when compared to the year ago period. The company’s expense management has been very strong throughout 2009 and we executed particularly well in this area during the third quarter. Our profitability was well above our expectations and we now expect to exceed our full year non-GAAP operating margin target. Tim will cover this in more detail in a moment. This is a significant accomplishment considering the investments that we continue to make in our growth initiatives combined with the challenging economic environment in which we are operating. Looking at the components of our revenue, subscriptions remained the highest growth component in the third quarter. It seems it was only a short time ago that we were attempting to project when subscriptions would eventually be larger than license revenue. In Q3, subscriptions were more than three times as large as license revenue, which now is the smallest contributor to…

Thanks Marc. Let me begin this afternoon by providing some further details of our third quarter operating results followed by our guidance for the fourth quarter and wrapping up with a very quick review of our capital management program. First, let me start with the income statement. As you heard already GAAP revenue came in at $79.2 million and after adding back $500,000 for the third quarter impact of the purchase accounting write down associated with Kintera’s deferred revenue, you get to non-GAAP revenue of $79.7 million. This was $1.7 million above the high end our guidance range but represented a decrease of 3.6% on a year-over-basis. We estimate that Q3 revenue would have been down a little over 2% on a constant currency basis. Obviously, these year-over-year movements are well below our long term target of low to mid teens growth which we believe is the consequence of the difficult economic environment impacting our end markets. One other point that is worth noting here is as we have now passed the one year anniversary of the Kintera acquisition and we are no longer going to report growth rates for performance with and without contribution from the Kintera assets. Looking further at the details of our total revenue, non-GAAP subscription revenue was $19.3 million, an increase of 19% on a year-over-year basis, increased to 24% of our total revenue in the third quarter, up from 20% in the year ago period. It’s worth pointing out that this growth compares favorably with many of the pure play subscription based software companies in the current economic environment. License revenue was $5.9 million in the third quarter compared to $8.1 million in the year ago quarter. The decline in license revenue is principally a result of the fact that the majority of our…

(Operator Instructions) Your first question comes from Phillip Rueppel - Wells Fargo Securities.

A couple of things around the success you are having in the eCRM space, especially in the higher education arena. I know in the past you had mentioned a catalyst what’s also necessary for some of these universities to switch such as the capital campaign, are you starting to see that we are just going ahead and moving forward without such catalysts. Then second of all, is the competitive environment different in some of these larger eCRM deals and kind of what are you replacing there, lots of home grown systems or multiple competitors?

Thank you, Phil. To answer your first half of your question is that we’re not seeing any material change in the factors that drive the purchase behavior in these organizations, nor are we seeing any material change in the competitive outlook, typically in the university segment we’ve been replacing BSR system, typically in the sort of family human services and development environments we are most frequently replacing either something that was home grown or a service bureau type offering plus something that was home grown.

Then just a second question if I might; you mentioned Mark that the market, it’s pretty similar to what you had mentioned a quarter ago. Are there any signs that you’re looking for that might lead to an ability to predict pick up in the nonprofit spending perspective, do you think after we see sort of year end fund raising funds you will have a better idea sort of how 2010 will play out?

Well, again it’s very dependent on the sector. So yes, we are seeing some slight improvements in what you would call same-store fundraising for online fundraising, for example, so sometimes that we maybe bottoming out in some of those online segments. We are seeing still a lot of pressure in the mid market, and that basically comes through in what you call no decisions, the number of deals in the pipeline is the same, are actually up from last year, but the number of no decisions if I member correctly is up 2.5 times from last year. So, I guess if no decisions start going in the other direction I’ll start telling you I’m beginning to feel good. I don’t know anything other than the economy and unemployment as two factors in the lower end of the market to look as sort of indicators of when that might be though.

(Operator Instructions) Your next question comes from Ross Macmillan - Jefferies. Ross Macmillan - Jefferies & Co: Tim, a question on the eCRM deals especially that you’ve got so many now in higher ed, and it’s about revenue recognition. I guess now that you sold so many you are probably delivering functionality that says sufficient for the customer to say that the obligation is fulfilled and therefore you could recognize the license upfront. So, is it likely as if you sell more into higher ed that we’re going to see more of those deals done with the license component taken upfront? Thanks.

Well I do agree with your premise about where the functionality is. At the end of the day it still is going to depend upon the terms and conditions and the nature of the services that we’re delivering under the contracts that we reach with these customers. Although the functionality is getting to the point where increasingly it should be easier to have it be accepted as it is, I don’t think we are at the stage where we could say it’s likely to result in more revenue being recognized upfront, we are just not quite there yet. Certainly, we see some signs of that. I would say however though in addition to this that, remember our strategy has been, and will continue to be, that we’re going to try to take the larger of these deal where we can and structure them in ways that we can recognize the license component over time as opposed to upfront. Ross Macmillan - Jefferies & Co: Are you already, and this is just my ignorance, but are you already offering some of the core original products, like Raiser’s Edge under a subscription model?

We don’t offer the Raiser’s Edge under a subscription model in general. It is possible to do that, but it’s essentially zero. What we do instead is we sell the license and then host the product, and I remind you it’s the client server generation product that uses Citrix as its method of access. So it’s not a web based on-demand meterable type of application. So people pay for posting and they pay for it an annual maintenance fee. Ross Macmillan - Jefferies & Co: And as we move to RE8 and the future roadmap will that ultimately change towards more recurring subscription?

I believe that that will turn into that direction. The first version of our generation in products for the mid market will be the arts and cultural solutions and that will be offered first as a SaaS only product. So we may find that in the low to mid end like with our eTapestry offering that more and more people are looking for no up front and ability to pay on an as you go basis, get the value and you pay for the money. Ross Macmillan - Jefferies & Co: Tim, maybe just one last one; just on the guidance on Q4. Obviously there are some line items that you assume will decline sequentially, assume license and the services businesses are the ones that are most likely to see that, is that a fair assumption?

Well, what are not, as you know we don’t give specific guidance on specific line items, but I think your general presumptions are probably not too far from reality.

Your next question comes from John Neff - William Blair. John Neff - William Blair & Company: A couple of questions here, any sense of year-to-date and maybe in the quarter either revenue from eCRM or eCRM sales as a percentage of gross sales, any way we can sort of contextualize how important that product is relative to the overall revenue picture?

Yeah, just in general as a practical matter we have not tried to give specific numbers for specific products in terms of their makeup in revenue, but sort of given the nature of eCRM and its importance to us. I’ll just give you a couple of data points. First of all, in terms of revenue it represented just under 5% of a revenue in the quarter, eCRM did. But that can kind of be a little confusing if you don’t remember of course how big maintenance is as a total contributor to our revenue. We think the more important things is that when you look at the bookings or the sales in the quarter, I believe it was close to 20% of the sales in the quarter came form eCRM. John Neff - William Blair & Company: A question for you just on international and maybe international as a percentage of revenue in the quarter and any sort of trends or market observations you have about how the business is faring outside the United States?

As far as its composition, I think on an as reported basis it was around 14%. When you look at the individual performance, really we had a weak quarter for Blackbaud Europe and continued weakness in Canada. The Canada situation is sort of tied, if you will, although that’s what’s happening in the US. Europe on the other hand had been pretty strong for a couple of quarters, and really it was associated with this quarter more than anything else, but that’s roughly where we are, of course from a currency basis if you look at it on a constant currency basis the overall year-over-year comparisons would be a little bit better, but that’s the general picture internationally. John Neff - William Blair & Company: Then, I would imagine that that’s some of the lower cost versions of some other type of product, eTapestry on the low end, NetCommunity grow versus NetCommunity likely helping customers sort of cope financially with this down turn, any concern that it helps now and hurts later when things recover?

Well, I think that your assumption is probably only about half right at that. Certainly we’re seeing BBNC grow as a way of helping people spread sort of the upfront cost of getting on to internet platform. So, yes, I think that there is really sort of a relatively high sort of relationship between those two. What you see there is that, it’s something 10% to 20% below the three year TCV when you do a grow versus a BBNC regular, but remember also we are doing less service. So it’s not necessarily about things, and then obviously, once you go beyond four plus years the higher subscription level more than outweighs what would have been lower maintenance revenue. So from a shareholder value perspective I would say Grow is every bit as good as the BBNC deal, a straight BBNC deal. From the respective Raiser’s Edge and eTapestry we see very little overlap in those markets, they truly seem to serve quite different customer bases. We do lead sharing, we spread maybe a 100 leads across the two teams from one team to the other over the past quarter, a very small number of those actually decided to go to the second offering and many of them came right back to the original offer, once they realized and had done a full comparison. So, we are pretty good at segmenting those market subsets and pretty good at targeting the product which are quite different at different levels. So, I don’t see any impact in terms of long run value on this in any way shape or form, I think it’s modestly positive for Grow and I think the two markets right now that we cover with eTapestry are quite distinct. John Neff - William Blair & Company: Then last question I guess for Tim, if you could just maybe refresh us on utility of deferred revenue growth and the percentage change from period to period, is that a clean metric for gauging subscription growth or is that skewed by invoice timing?

No, it’s not a good metric for that, not yet. Certainly our aspirations are that subscriptions will grow to the point that it will be, but we still have, still the overwhelming portion of deferred revenue relates to maintenance, and therefore as we’ve described in the past there are some vagaries here in terms of the timing of when customers renew their maintenance. We have a couple of times in the year where we have higher levels of maintenance renewals than other times in the year, and so, you can’t just look at sequential movement in deferred revenue and get a meaningful metric yet out of it.

Your next question comes from Sterling Auty - J.P. Morgan

This is [Sackett] from Sterling’s team, a couple of questions from my side. Tim you said that there were about three eCRM deals in the quarter, were all those signed in a perpetual basis?

Yes, they were.

Then I think you also said that even if you exclude those three deals, you would have been above the high end of your guidance given that that was about $78 million, you came in at about 80, is it fair to say that those two deals we made up about $2 million in total license revenue?

No, we’re not putting any number on the amount related to any of those deals individually or in the aggregate. I think, remember we have said with respect to Michigan that there was no material, specifically no material impact during 2009. But with respect to the other two, I’m just not going to go there in terms of what the impact was.

The primary distinction would have been on the license revenue. It takes time to ramp up the services delivery in these contracts. So, I would remind you that typically the services at the very low end might be one time the license, but typically there are more than --- more like two to four times the license revenue.

Last question, I know that you are not looking to provide 2010 guidance, but this year you have done a great job in delivering the roughly two eCRM deals for quarter. Looking at you pipeline as you sort of enter your 2010 budgeting process, do you feel that you can deliver on the two eCRM deals per quarter looking into 2010?

We feel pretty comfortable that the pipeline is there for that. We’re not - I certainly wouldn’t say that I’m going to see an acceleration. In any given quarter, we had quarters of zero and we had quarter of four, we had eight quarter, one quarter with four. So I think saying that we can average two is probably a relatively good.

I won’t pay [Inaudible] economic environment, you never now

We have no further question in the queue. I would like to turn it back over to our presenters for any additional or closing remarks.

I would just thank everybody for joining us today, it’s obviously a very interesting economic time, but we are quite confident that we made the right investments and they are in a good position. The benefit from it is when things turn up and that we have the focus on cost and on sales effectiveness to see us through the downside if it continues for longer than any of that. So we appreciate your attention and your time and look forward to talking to you individually in the coming quarter and then talking with you again in another quarter.

Thank you so much. Bye-bye.

Ladies and gentlemen that does conclude our call for today. We thank you for your participation.