Blackbaud HQ

Blackbaud Inc. is based on Daniel Island, where it opened a new headquarters campus (above) in June. File/Provided

Blackbaud Inc. is looking to spend money to make money. 

In reporting earnings last week, the Daniel Island-based software provider said its operating expenses climbed to $114.4 million in the first quarter, 16 percent more than a year before.

Higher spending comes as Blackbaud, one of South Carolina's largest technology employers with about 3,400 workers worldwide, increases the headcount on its sales team and pushes a growth strategy. 

CEO Mike Gianoni told investors and analysts during a conference call Wednesday the sales force grew by 20 percent last year. The company plans to continue to hire aggressively in 2019, he added.

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Mike Gianoni is CEO of Blackbaud, one of South Carolina's biggest technology firms. He is in his fifth year of leading the Daniel Island-based company. File/Wade Spees/Staff

Spending at the publicly traded company, which sells its products primarily to nonprofit organizations, has ticked up naturally as Blackbaud looks to grow. But operating expenses in the first three months of 2019 — when it reported a net loss of $1.1 million — were considerably larger than usual, according to a review of its past financials.

"We are in an investment year to better position the business for accelerated growth and long-term success, and we are tracking well to expectations," finance chief Tony Boor said in a statement. 

Boor added during a conference call with investors that the company also is putting more money toward innovation projects.

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Blackbaud highlighted how it is improving how much of its revenue is generated from selling renewable subscriptions for its software, rather than one-time licensing deals. Recurring revenue for the quarter grew by about 10 percent compared to last year.

The January-March period included a sizable acquisition of a smaller rival, its biggest buy in three years. Blackbaud finalized its $157 million purchase of the Plano, Texas-based YourCause at the start of the year. 

Gianoni also lauded the company for making the annual Forbes list for Best Midsize Employers. Blackbaud ranked 147th and it was the fourth year in a row it made the list.

It also was on Forbes' list for Best Employers for Diversity, ranking 229th among a group that included the Medical University of South Carolina, which came at No. 13. 

A partnership with Microsoft is also well on its way, Gianoni said. The two software companies announced the collaboration late last year. They will be developing and selling software jointly, but none of the products has hit the market yet.

Reach Mary Katherine Wildeman at 843-937-5594. Follow her on Twitter @mkwildeman.