Blackbaud, the cloud software giant serving the social good sector, just wrapped up their Q1 2024 earnings call. Amidst the usual talk of accelerating growth, AI innovation, and impressive cash flow, there's a hidden signal buried within the transcript, one that might just foreshadow a dramatic turnaround for their oft-discussed EVERFI platform.

On the surface, EVERFI remains a drag on Blackbaud's corporate sector. Executives acknowledged headwinds in the form of tightening corporate social responsibility (CSR) budgets, particularly within the financial services industry, EVERFI's core customer base. They even announced the strategic divestiture of EVERFI's UK creative agency, a move explicitly positioned to improve profitability and align with the company's value creation objectives.

But here's where things get interesting. While acknowledging the challenges, Blackbaud CEO Mike Gianoni painted a picture of sustained corporate interest in EVERFI's unique value proposition, especially its deep penetration into the K-12 educational network. He highlighted the enduring appeal of CSR initiatives for Fortune 500 companies, pointing to News Corp and Fidelity Investments as examples of recent EVERFI expansions.

And then came the kicker. Gianoni casually dropped a bombshell: the NFL, during the Super Bowl, ran not one, but two ads showcasing their "Character Playbook" program, a program built and delivered on EVERFI's platform. This wasn't just a fleeting mention; Gianoni explicitly stated that this high-profile exposure is generating a surge of inbound inquiries for EVERFI.

Think about that for a moment. The NFL, arguably the most powerful brand in American sports, chose to spend millions of dollars during the most-watched television event of the year to promote a program powered by EVERFI. That's not just a vote of confidence; it's a powerful endorsement that reverberates across the corporate landscape.

Now, consider the timing. This Super Bowl exposure occurred just before Blackbaud's earnings call, yet the company chose to reiterate their full-year guidance, even factoring in a $6 million revenue reduction from the EVERFI UK divestiture. This suggests that Blackbaud already anticipates a substantial revenue boost from EVERFI in the coming quarters, a boost significant enough to offset the divestiture impact and potentially exceed their initial projections.

Here's a hypothesis: Blackbaud is deliberately downplaying EVERFI's potential, waiting for the NFL Super Bowl effect to fully materialize before adjusting their guidance upwards. They're playing it cool, letting the momentum build before revealing the true extent of the turnaround.

Hypothetical EVERFI Revenue Growth

The following chart illustrates a hypothetical scenario where EVERFI's revenue rebounds significantly in the coming quarters, driven by the NFL Super Bowl exposure. Please note that this is a hypothetical representation for illustrative purposes only and does not reflect actual financial data or guidance.

Let's examine the numbers. Blackbaud's corporate sector, which includes EVERFI and their successful YourCause platform, declined 5.5% in Q1. However, YourCause continues to perform well, meaning the decline is attributed entirely to EVERFI. If we assume that YourCause maintained its previous growth trajectory, EVERFI's decline in Q1 might have been closer to 10%. To offset the $6 million UK divestiture and achieve 7.4% organic growth, EVERFI would need to deliver approximately $13 million in incremental revenue for the remaining three quarters, essentially erasing the Q1 decline and adding a further 3.4% growth.

This isn't just a random number; it aligns with the potential impact of the NFL Super Bowl exposure. Imagine a scenario where several Fortune 500 companies, inspired by the NFL's high-profile endorsement, choose to partner with EVERFI for their CSR initiatives. Each of these new contracts could be worth millions in annual recurring revenue, quickly adding up to the required $13 million.

Of course, this is just a hypothesis. However, the evidence suggests that EVERFI, far from fading into irrelevance, might be on the cusp of a dramatic resurgence, fueled by the NFL's powerful endorsement and Blackbaud's ongoing operational improvement plan. If this hypothesis proves true, Blackbaud's corporate sector could become a significant growth engine, propelling the company well beyond their Rule of 40 ambitions and redefining the landscape of corporate social responsibility.

"Fun Fact: EVERFI's educational platform reaches over 45 million learners globally, covering critical topics such as financial literacy, STEM education, social-emotional learning, and diversity and inclusion. This makes EVERFI a powerful force for positive change, shaping the minds of future generations."