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It has been about a month since the last earnings report for Blackbaud (BLKB - Free Report) . Shares have added about 21.2% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Blackbaud due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

BLKB Q2 Earnings Beat on Gross Margin Gain, Revenues Miss

Blackbaud reported non-GAAP earnings for the second quarter of 2026 of $1.33 per share, up 9.0% year over year. The figure beat the Zacks Consensus Estimate of $1.32 by 0.76%, aided by a higher non-GAAP gross margin and a lower diluted share count.

Revenues of $290.6 million rose 3.0% but missed the consensus mark of $292 million by 0.54%. Contractual and transactional recurring revenues increased, while one-time services declined. Recurring revenues grew 3.3% to $285.3 million and represented 98.2% of total revenues.

BLKB's Recurring Streams Drive Growth

Contractual recurring revenues increased $6.2 million to $186.4 million. Pricing initiatives and demand for cloud solutions supported the increase. Transactional recurring revenues advanced $2.8 million to $98.9 million, helped by higher volumes for Blackbaud Integrated Payments and Blackbaud Tuition Management.

One-time services and other revenues fell to $5.3 million from $5.8 million. Geographically, U.S. revenues reached $234.0 million, while revenues from the United Kingdom and other countries were $37.0 million and $19.6 million, respectively.

Blackbaud's Gross Margin Expands

GAAP cost of revenues declined 1.1% to $112.4 million. The GAAP gross margin expanded 160 basis points to 61.3%, reflecting higher revenues, lower contractor costs and reduced amortization of acquisition-related intangibles, partly offset by increased hosting and data-center costs.

The non-GAAP gross margin improved 70 basis points to 64.2%. However, non-GAAP operating income slipped to $94.6 million from $95.0 million, while the related margin contracted 110 basis points to 32.6% as spending on marketing, research and internal software increased.

BLKB's AI Pipeline Deepens

The fundraising Development Agent reached general availability ahead of schedule. Blackbaud also announced four additional Agents for Good offerings covering data health, admissions, digital marketing and accounts payable. The company said these products are not expected to make a meaningful revenue contribution in 2026.

More than half of Raiser’s Edge NXT customers use machine-learning-enabled donor prospecting, generating tens of billions of predictions annually. Management also cited competitive wins and returning customers as evidence that product innovation is supporting bookings and win rates.

Blackbaud's Cash Flow Backs Buybacks

Second-quarter operating cash flow increased $24.1 million to $91.1 million. Non-GAAP free cash flow rose $23.8 million to $75.3 million, with the free cash flow margin improving 760 basis points to 25.9%.

During the first half, BLKB repurchased 2.4 million shares for $110.1 million. Including net share settlement of employee awards, repurchase activity represented 6.2% of the shares outstanding on Dec. 31, 2025. Weighted average diluted shares fell 7.0% year over year to 44.9 million.

BLKB Reaffirms 2026 Outlook

Blackbaud reaffirmed 2026 revenue guidance of $1.173-$1.179 billion, adjusted EBITDA of $430-$438 million, non-GAAP earnings of $5.15-$5.25 per share and free cash flow of $280-$290 million. Management expects results in the upper half of all four ranges, with earnings and free cash flow at or above the high end.

Performance is expected to be weighted toward the second half, particularly the fourth quarter. A new platform fee should contribute to that weighting. The roughly 40% larger contractual renewal cohort is expected to reduce 2026 revenue growth by 0.5-0.75 percentage points.

Blackbaud's Contract Base Adds Visibility

Gross dollar retention was approximately 91% for the 12 months ended June 30. Roughly 90% of contractual recurring revenues are tied to contracts of three years or longer, while 25% are associated with terms of at least four years.

Deferred revenues increased 9.3% from year-end to $406.4 million. Remaining performance obligations totaled about $1.6 billion, with approximately 45% expected to be recognized over the next 12 months. Blackbaud ended the quarter with $34.4 million in cash, $1.15 billion in debt and a net leverage ratio of 2.58.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a flat trend in fresh estimates.

VGM ScoresAt this time, Blackbaud has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook Blackbaud has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry PlayerBlackbaud is part of the Zacks Computer - Software industry. Over the past month, Commvault Systems (CVLT - Free Report) , a stock from the same industry, has gained 20.6%. The company reported its results for the quarter ended June 2026 more than a month ago.

Commvault reported revenues of $314.13 million in the last reported quarter, representing a year-over-year change of +11.4%. EPS of $1.42 for the same period compares with $1.01 a year ago.

For the current quarter, Commvault is expected to post earnings of $1.25 per share, indicating a change of +37.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.5% over the last 30 days.

Commvault has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.

Key Takeaways Blackbaud's AI agents target deeper customer penetration across fundraising and operational workflows.About 90% of contractual recurring revenue is tied to agreements lasting at least three years.Payments rose to $98.9 million, while five AI products are not expected to materially lift 2026 revenue. Blackbaud, Inc. (BLKB - Free Report) combines subscription software, payments and purpose-built workflows for nonprofit, education and social impact customers. That gives the company a large recurring base before its newer artificial intelligence products scale.

The investor question is whether multi-year contracts, embedded payments and cross-selling can move Blackbaud beyond modest near-term revenue growth as AI agents broaden the platform.

Blackbaud's Recurring Base Anchors VisibilityRecurring revenue increased 3.3% to $285.3 million in the second quarter and represented 98.2% of total revenue. That mix gives Blackbaud more visibility than a model that depends heavily on implementation work or other services.

Contractual recurring revenue comes from subscription and maintenance arrangements. Transactional recurring revenue is tied to activity such as payment processing and tuition management, so it can fluctuate more from period to period.

BLKB's Contract Terms Extend Revenue DurabilityBlackbaud’s contract base also supports revenue durability. Approximately 90% of contractual recurring revenue is tied to agreements lasting at least three years, while 25% is linked to terms of four years or longer.

That structure is reflected in deferred revenue of $406.4 million and roughly $1.6 billion of remaining performance obligations. These figures do not remove renewal risk, but they show a meaningful amount of contracted business already lined up for future periods.

Blackbaud's Payments Add Transactional GrowthTransactional recurring revenue increased $2.8 million to $98.9 million in the second quarter. Higher Blackbaud Integrated Payments and Tuition Management volumes added a growth channel alongside the company’s subscription base.

Payments also deepen Blackbaud’s position inside customer workflows because donation, tuition and related transactions connect directly to its software systems. Still, transaction volumes can vary between periods, making this revenue stream less predictable than contractual recurring revenue.

BLKB's AI Pipeline Expands Cross-Sell PotentialBlackbaud’s Development Agent has moved into production, adding supervised donor outreach to its product set. Early engagement results give management a basis to expand the use case across fundraising workflows.

The roadmap includes four additional agents focused on data health, admissions, digital marketing and accounts payable. Management does not expect the five AI products to contribute materially to 2026 revenue, so the near-term case rests more on adoption signals and cross-sell potential than on immediate financial impact.

Salesforce, Inc. (CRM - Free Report) provides a useful comparison because nonprofit organizations often evaluate broad customer relationship management platforms alongside purpose-built fundraising software. Paycom Software, Inc. (PAYC - Free Report) is another relevant software name for investors watching how automated workflows can support recurring application revenue.

BLKB's Neutral Signals Frame the OutlookThe bottom line is that Blackbaud has the ingredients for steadier growth, but the timing remains measured. Recurring revenue visibility, long-term contracts and payment volume growth support the model, while modest revenue expansion and renewal pressure keep the outlook balanced.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BLKB has a VGM Score of A. The VGM Score combines value, growth and momentum characteristics, and an A is favorable within the Zacks Style Scores framework.

For investors, the AI pipeline is best viewed as an option on deeper customer penetration. Blackbaud still needs to convert product activity into renewal strength, cross-selling and sustained revenue acceleration before the story moves beyond visibility to faster growth.

Company Expects to Finish Fiscal Year 2026 in the Upper Half of Financial Guidance Ranges

, /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the world's leading provider of AI-powered solutions for social impact, today announced financial results for its second quarter ended June 30, 2026.

"Our second quarter and first-half results came in as expected, and combined with our confidence in the second half, position us to finish in the upper half of our FY26 guidance ranges for revenue, adjusted EBITDA, non-GAAP EPS, and free cash flow, with EPS and free cash flow at the high end," said Mike Gianoni, president, CEO and vice chairman of the board of directors, Blackbaud. "We continue to invest aggressively in AI, reflected in the accelerating pace of innovation across our Agents for Good™ solutions, which help customers advance their missions and operate more efficiently while also strengthening our own productivity and profitability."

Second Quarter 2026 Results Compared to Second Quarter 2025 Results:

GAAP total revenue was $290.6 million, up 3.0% and non-GAAP organic revenue increased 3.0%. GAAP recurring revenue was $285.3 million, up 3.3% and represented 98.2% of total revenue. Non-GAAP organic recurring revenue increased 3.3%. GAAP income from operations was $62.0 million, with GAAP operating margin of 21.3%, an increase of 100 basis points. Non-GAAP income from operations was $94.6 million, with non-GAAP operating margin of 32.6%, a decrease of 110 basis points. GAAP net income was $35.4 million, with GAAP diluted earnings per share of $0.79, up $0.24 per share. Non-GAAP net income was $59.7 million, with non-GAAP diluted earnings per share of $1.33, up $0.11 per share. Non-GAAP adjusted EBITDA was $110.3 million, up $1.2 million, with non-GAAP adjusted EBITDA margin of 38.0%, a decrease of 70 basis points. Rule of 40 score was 41.0%. GAAP net cash provided by operating activities was $91.1 million, an increase of $24.1 million, with GAAP operating cash flow margin of 31.3%, an increase of 760 basis points. Non-GAAP free cash flow was $75.3 million, an increase of $23.8 million, with non-GAAP free cash flow margin of 25.9%, an increase of 760 basis points. "We again executed well against our operating plan while investing in innovation and efficiency across the business," said Chad Anderson, executive vice president and CFO, Blackbaud. "We're building the foundation for substantial shareholder value, supported by an attractive financial model and steady momentum toward our long-term goals. We also remain aggressive in repurchasing our shares having already repurchased just over 6% this year, reducing our total shares outstanding by approximately 15% since the fourth quarter of 2023."

An explanation of all non-GAAP financial measures referenced in this press release, including the Rule of 40, is included below under the heading "Non-GAAP Financial Measures." A reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Recent Company Highlights

Blackbaud announced multiple new Agents for Good™ and AI-powered product enhancements planned as part of a reimagined cloud-native, AI-first connected platform, underscoring the company's continued innovation momentum and differentiated position as the trusted AI engine for social impact. The Blackbaud Institute published research that shows that while AI adoption is accelerating across the social impact sector, the organizations seeing transformational results have higher levels of AI maturity, moving beyond fragmented experimentation to systemic, governed AI use. To support the long-term health of the sector, Blackbaud has convened the AI Coalition for Social Impact, which has launched a free certification program to equip professionals to adopt AI responsibly, confidently and effectively. At its bi-annual Product Update Briefings and annual bbdevdays Developers Conference, Blackbaud showcased continued product and platform innovation highlighting new AI-powered capabilities, expanded connected workflows, and developer tools that reinforce the company's trusted AI engine strategy and help customers build, extend, and scale purpose-built solutions for social impact. Blackbaud strengthened its leadership in education, launching an Innovation Partnership and strategic investment in Student First to help higher education institutions build a more connected campus operating model, and unveiling new AI innovation for K–12 independent schools, including an Admissions Agent in development to help schools deliver more personalized, efficient admissions experiences. The company earned recognition from the American Business Awards for AI innovation and leadership, was named to Newsweek's World's Greenest Companies list for the second consecutive year, and was honored on the TIME America's Best Companies 2026 list, underscoring continued momentum in responsible innovation, sustainability and workplace excellence. Blackbaud released its 2025 Impact Report, highlighting progress across responsible AI, sustainability and global social impact, reinforcing the company's commitment to using purpose-built technology and responsible business practices to help customers and communities drive measurable outcomes. Visit www.blackbaud.com/newsroom for more information about Blackbaud's recent highlights.

Financial Outlook
Blackbaud today reaffirmed its 2026 full year financial guidance and expects to finish in the upper half of the range across all four key metrics:

GAAP revenue of $1.173 billion to $1.179 billion Non-GAAP adjusted EBITDA of $430 million to $438 million Non-GAAP diluted earnings per share of $5.15 to $5.25 Non-GAAP free cash flow of $280 million to $290 million Included in its 2026 full year financial guidance are the following updated assumptions:

Non-GAAP annualized effective tax rate is expected to be approximately 24.5% Interest expense for the year is expected to be approximately $62 million to $66 million Diluted weighted average shares outstanding for the year are expected to be approximately 45.0 million to 46.0 million Capital expenditures for the year are expected to be approximately $60 million to $70 million, including approximately $52 million to $62 million of capitalized software development costs Blackbaud has not reconciled forward-looking full-year non-GAAP financial measures contained in this news release to their most directly comparable GAAP measures, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to compensation, acquisition transactions and integration, tax items or others that may arise during the year. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts.

Stock Repurchase Program
As of June 30, 2026, Blackbaud had approximately $850 million remaining under its common stock repurchase program that was expanded, replenished and reauthorized in December 2025. Based on our current plans, and stock repurchases to date, we expect total repurchases during 2026 to represent between 6% and 10.0% of our outstanding common stock as of December 31, 2025.

Conference Call Details

What: 

Blackbaud's 2026 Second Quarter Conference Call

When: 

July 29, 2026

Time:   

8:00 a.m. (Eastern Time)

Live Call: 

1-877-407-3088 (US/Canada)

Webcast:   

Blackbaud's Investor Relations Webpage

About Blackbaud
Blackbaud (NASDAQ: BLKB) is the world's leading provider of AI-powered solutions for social impact. Serving nonprofits, educational institutions, companies committed to corporate social responsibility and individual change makers, Blackbaud propels impact at scale with the sector's most intelligent solutions for fundraising and engagement, education solutions, financial management and CSR and grantmaking. With the deepest expertise powered by the world's largest philanthropic data set, the most connected workflows, and the most powerful impact network, Blackbaud's solutions are building a future where resources are unleashed at the speed of need. Blackbaud has been recognized by Fast Company, Newsweek, Quartz, Forbes and more for AI innovation, responsible leadership and workplace excellence. Blackbaud has operations in the United States, Australia, Canada, Costa Rica, India and the United Kingdom, supporting users in 100+ countries. Learn more at www.blackbaud.com, or follow us on X/Twitter, LinkedIn, Instagram, and Facebook.

Investor Contact
[email protected]

Media Contact
[email protected]

Forward-Looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the predictability of our financial condition and results of operations. These statements involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: management of integration of acquired companies; uncertainty regarding increased business and renewals from existing customers; a shifting revenue mix that may impact gross margin; continued success in sales growth; risks related to the development, deployment, regulation, security, market adoption and perception of artificial intelligence technologies; cybersecurity and data protection risks and related liabilities; potential litigation involving us; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Blackbaud's investor relations department. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Trademarks
All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

Non-GAAP Financial Measures
Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. Blackbaud uses non-GAAP financial measures internally in analyzing its operational performance. Accordingly, Blackbaud believes these non-GAAP measures are useful to investors, as a supplement to GAAP measures, in evaluating its ongoing operational performance and trends and in comparing its financial results from period-to-period with other companies in Blackbaud's industry, many of which present similar non-GAAP financial measures to investors. However, these non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies.

The non-GAAP financial measures discussed above exclude the impact of certain transactions that Blackbaud believes are not directly related to its operating performance in any particular period, but are for its long-term benefit over multiple periods. Blackbaud believes these non-GAAP financial measures reflect its ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.

While Blackbaud believes these non-GAAP measures provide useful supplemental information, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures.

Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software development, and capital expenditures for property and equipment. Blackbaud believes non-GAAP free cash flow provides a useful measure of the company's operating performance. Non-GAAP free cash flow is not intended to represent and should not be viewed as the amount of residual cash flow available for discretionary expenditures.

In addition, Blackbaud uses non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic recurring revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, in analyzing its operating performance. Blackbaud believes that these non-GAAP measures are useful to investors, as a supplement to GAAP measures, for evaluating the periodic growth of its business on a consistent basis. Each of these measures excludes incremental acquisition-related revenue attributable to companies, if any, acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, each of these measures reflects presentation of full-year incremental non-GAAP revenue derived from such companies as if they were combined throughout the prior period. In addition, each of these measures excludes prior period revenue associated with divested businesses, if any. The exclusion of the prior period revenue is to present the results of the divested businesses within the results of the combined company for the same period of time in both the prior and current periods. Blackbaud believes this presentation provides a more comparable representation of its current business' organic revenue growth and revenue run-rate.

Rule of 40 is defined as non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. Non-GAAP adjusted EBITDA is defined as GAAP net income plus interest, net; income tax provision (benefit); depreciation; amortization of intangible assets from business combinations; amortization of software development costs; stock-based compensation expense; Global Capabilities Center ("GCC") workforce transition costs; acquisition and disposition-related costs; and Security Incident-related costs.

Blackbaud, Inc.

Consolidated Balance Sheets

(Unaudited)

(dollars in thousands, except per share amounts)

June 30,
2026

December 31,
2025

Assets

Current assets:

Cash and cash equivalents

$          34,388

$          38,914

Restricted cash

846,620

720,061

Accounts receivable, net of allowance of $6,672 and $5,876 at June 30, 2026 and
December 31, 2025, respectively

134,888

80,517

Customer funds receivable

6,378

1,308

Prepaid expenses and other current assets

96,620

89,290

Total current assets

1,118,894

930,090

Property and equipment, net

85,499

85,076

Software development costs, net

158,999

155,842

Goodwill

1,055,923

1,056,815

Intangible assets, net

93,379

106,654

Other assets

81,802

56,205

Total assets

$      2,594,496

$      2,390,682

Liabilities and stockholders' equity

Current liabilities:

Trade accounts payable

$          35,431

$          27,344

Accrued expenses and other current liabilities

37,603

43,272

Due to customers

851,793

719,833

Debt, current portion

22,595

22,660

Deferred revenue, current portion

403,630

368,986

Total current liabilities

1,351,052

1,182,095

Debt, net of current portion

1,127,412

1,087,037

Deferred tax liability

33,407

21,981

Deferred revenue, net of current portion

2,773

2,778

Other liabilities

12,822

11,737

Total liabilities

2,527,466

2,305,628

Commitments and contingencies

Stockholders' equity:

Preferred stock; 20,000,000 shares authorized, none outstanding

—

—

Common stock, $0.001 par value; 180,000,000 shares authorized, 74,035,437 and
72,312,354 shares issued at June 30, 2026 and December 31, 2025, respectively;
45,513,708 and 46,705,325 shares outstanding at June 30, 2026 and December 31, 2025, respectively

74

72

Additional paid-in capital

1,438,227

1,391,641

Treasury stock, at cost; 28,521,729 and 25,607,029 shares at June 30, 2026 and December 31, 2025, respectively

(1,452,356)

(1,316,224)

Accumulated other comprehensive loss

(925)

(5,948)

Retained earnings

82,010

15,513

Total stockholders' equity

67,030

85,054

Total liabilities and stockholders' equity

$      2,594,496

$      2,390,682

Blackbaud, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)

(dollars in thousands, except per share amounts)

Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

Revenue

$     290,597

$     282,030

$     571,737

$     551,966

Cost of revenue

112,434

113,633

227,015

228,448

Gross profit

178,163

168,397

344,722

323,518

Operating expenses

Sales, marketing and customer success

46,256

44,046

93,605

88,690

Research and development

34,856

33,595

71,772

67,154

General and administrative

34,449

32,856

64,710

89,535

Amortization of intangible assets

586

566

1,174

1,100

Total operating expenses

116,147

111,063

231,261

246,479

Income from operations

62,016

57,334

113,461

77,039

Interest expense

(17,579)

(18,411)

(33,615)

(35,356)

Other income, net

1,984

1,118

4,380

3,223

Income before provision for income taxes

46,421

40,041

84,226

44,906

Income tax provision

11,063

13,575

17,729

14,117

Net income

$      35,358

$      26,466

$      66,497

$      30,789

Earnings per share

Basic

$         0.79

$         0.55

$         1.47

$         0.64

Diluted

$         0.79

$         0.55

$         1.46

$         0.63

Common shares and equivalents outstanding

Basic weighted average shares

44,759,580

47,784,062

45,158,724

48,104,780

Diluted weighted average shares

44,884,337

48,248,057

45,605,260

48,786,793

Other comprehensive income (loss)

Foreign currency translation adjustment

$        (117)

$        7,324

$      (1,597)

$      10,583

Unrealized gain (loss) on derivative instruments, net of tax

3,042

(5,314)

6,620

(12,006)

Total other comprehensive income (loss)

2,925

2,010

5,023

(1,423)

Comprehensive income

$      38,283

$      28,476

$      71,520

$      29,366

Blackbaud, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Six months ended
June 30,

(dollars in thousands)

2026

2025

Cash flows from operating activities

Net income

$       66,497

$       30,789

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

41,293

43,346

Net provision for credit losses and sales returns

3,020

2,973

Stock-based compensation expense

46,586

49,422

Deferred taxes

9,380

(653)

Amortization of deferred financing costs and discount

1,269

1,346

Other non-cash adjustments

1,313

(5,407)

Changes in operating assets and liabilities, net of acquisition and disposal of businesses:

Accounts receivable

(57,465)

(64,984)

Prepaid expenses and other assets

(11,416)

(8,955)

Trade accounts payable

6,818

(8,408)

Accrued expenses and other liabilities

530

(9,910)

Deferred revenue

34,688

38,770

Net cash provided by operating activities

142,513

68,329

Cash flows from investing activities

Purchase of property and equipment

(4,117)

(1,311)

Capitalized software development costs

(26,127)

(27,787)

Cash used in disposition of business

—

(12,235)

Other investing activities

(8,675)

—

Net cash used in investing activities

(38,919)

(41,333)

Cash flows from financing activities

Proceeds from issuance of debt

209,500

272,300

Payments on debt

(180,857)

(187,666)

Employee taxes paid for withheld shares upon equity award settlement

(25,319)

(38,655)

Change in due to customers

132,582

128,582

Change in customer funds receivable

(5,175)

(3,262)

Purchase of treasury stock, including excise tax payments

(111,637)

(103,205)

Net cash provided by financing activities

19,094

68,094

Effect of exchange rate on cash, cash equivalents and restricted cash

(655)

7,212

Net increase in cash, cash equivalents and restricted cash

122,033

102,302

Cash, cash equivalents and restricted cash, beginning of period

758,975

809,512

Cash, cash equivalents and restricted cash, end of period

$      881,008

$      911,814

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown above in the consolidated statements of cash flows:

(dollars in thousands)

June 30,
2026

December 31,
2025

Cash and cash equivalents

$       34,388

$       38,914

Restricted cash

846,620

720,061

Total cash, cash equivalents and restricted cash in the statement of cash flows

$      881,008

$      758,975

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

(dollars in thousands, except per share amounts)

Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

GAAP Revenue

$   290,597

$   282,030

$   571,737

$   551,966

GAAP gross profit

$   178,163

$   168,397

$   344,722

$   323,518

GAAP gross margin

61.3 %

59.7 %

60.3 %

58.6 %

Non-GAAP adjustments:

Add: Stock-based compensation expense

2,714

3,250

5,801

5,948

Add: Amortization of intangibles from business combinations

5,404

7,020

11,671

14,072

Add: Employee severance

—

302

—

302

Add: GCC workforce transition costs(1)

267

—

542

—

Subtotal

8,385

10,572

18,014

20,322

Non-GAAP gross profit

$   186,548

$   178,969

$   362,736

$   343,840

Non-GAAP gross margin

64.2 %

63.5 %

63.4 %

62.3 %

GAAP income from operations

$     62,016

$     57,334

$   113,461

$     77,039

GAAP operating margin

21.3 %

20.3 %

19.8 %

14.0 %

Non-GAAP adjustments:

Add: Stock-based compensation expense

22,706

27,252

46,586

49,422

Add: Amortization of intangibles from business combinations

5,990

7,586

12,845

15,172

Add: Employee severance

—

2,147

—

2,147

Add: GCC workforce transition costs(1)

1,974

—

3,000

—

Add: Acquisition and disposition-related costs(2)

866

264

1,013

25,396

Add: Security Incident-related costs

—

395

—

2,575

Add: Impairment of capitalized software development costs

1,056

—

1,056

—

Subtotal

32,592

37,644

64,500

94,712

Non-GAAP income from operations

$     94,608

$     94,978

$   177,961

$   171,751

Non-GAAP operating margin

32.6 %

33.7 %

31.1 %

31.1 %

GAAP income before provision for income taxes

$     46,421

$     40,041

$     84,226

$     44,906

GAAP net income

$     35,358

$     26,466

$     66,497

$     30,789

Shares used in computing GAAP diluted earnings per share

44,884,337

48,248,057

45,605,260

48,786,793

GAAP diluted earnings per share

$       0.79

$       0.55

$       1.46

$       0.63

Non-GAAP adjustments:

Add: GAAP income tax provision

11,063

13,575

17,729

14,117

Add: Total non-GAAP adjustments affecting income from operations

32,592

37,644

64,500

94,712

Non-GAAP income before provision for income taxes

79,013

77,685

148,726

139,618

Assumed non-GAAP income tax provision(3)

19,358

19,033

36,438

34,207

Non-GAAP net income

$     59,655

$     58,652

$   112,288

$   105,411

Shares used in computing non-GAAP diluted earnings per share

44,884,337

48,248,057

45,605,260

48,786,793

Non-GAAP diluted earnings per share

$       1.33

$       1.22

$       2.46

$       2.16

(1) GCC workforce transition costs represent severance and other costs incurred in connection with the transition of certain roles to our Global Capability Center in Hyderabad, India.

(2) Includes charges of $24.3 million incurred during the six months ended June 30, 2025 related to the release from our lease for office space in Washington, DC.

(3) We use a non-GAAP effective tax rate of 24.5% when calculating non-GAAP net income and non-GAAP diluted earnings per share. We base this rate on our estimated annual GAAP income tax rate, adjusted for items excluded from GAAP income when calculating non-GAAP income and for significant nonrecurring tax adjustments. We review this non-GAAP tax rate annually to determine whether it remains appropriate for evaluating our financial performance. In conducting this review, we consider our GAAP annual effective tax rate, changes in tax legislation, non-GAAP adjustments, and shifts in the geographic mix of revenues and expenses. We also evaluate other factors that we deem significant. Because the tax treatment of non-GAAP adjustments differs from GAAP and because of our methodology for estimating the annual tax rate, the non-GAAP tax rate may differ from the GAAP tax rate and from our actual tax liabilities.

Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)

(dollars in thousands)

Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

GAAP revenue

$   290,597

$     282,030

$   571,737

$     551,966

GAAP revenue growth

3.0 %

3.6 %

Less: Non-GAAP revenue from divested businesses(1)

—

—

—

—

Non-GAAP organic revenue(2)

$   290,597

$     282,030

$   571,737

$     551,966

Non-GAAP organic revenue growth

3.0 %

3.6 %

Non-GAAP organic revenue(2)

$   290,597

$     282,030

$   571,737

$     551,966

Foreign currency impact on non-GAAP organic revenue(3)

(690)

—

(2,930)

—

Non-GAAP organic revenue on constant currency basis(3)

$   289,907

$     282,030

$   568,807

$     551,966

Non-GAAP organic revenue growth on constant currency basis

2.8 %

3.1 %

GAAP recurring revenue

$   285,291

$     276,279

$   561,776

$     539,604

GAAP recurring revenue growth

3.3 %

4.1 %

Less: Non-GAAP recurring revenue from divested businesses(1)

—

—

—

—

Non-GAAP organic recurring revenue(2)

$   285,291

$     276,279

$   561,776

$     539,604

Non-GAAP organic recurring revenue growth

3.3 %

4.1 %

Non-GAAP organic recurring revenue(2)

$   285,291

$     276,279

$   561,776

$     539,604

Foreign currency impact on non-GAAP organic recurring revenue(3)

(670)

—

(2,868)

—

Non-GAAP organic recurring revenue on constant currency basis(3)

$   284,621

$     276,279

$   558,908

$     539,604

Non-GAAP organic recurring revenue growth on constant currency basis

3.0 %

3.6 %

(1) Non-GAAP revenue from divested businesses excludes revenue associated with divested businesses in the prior period. The exclusion of the prior period revenue is to present the results of the divested business with the results of the combined company for the same period of time in both the prior and current periods.

(2) Non-GAAP organic revenue and non-GAAP organic recurring revenue for the prior year periods presented herein may not agree to non-GAAP organic revenue and non-GAAP organic recurring revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth are calculated.

(3) To determine non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro.

Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)

(dollars in thousands)

Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

GAAP net income

$    35,358

$      26,466

$    66,497

$      30,789

Non-GAAP adjustments:

Add: Interest, net

15,652

16,443

30,009

31,733

Add: GAAP income tax provision

11,063

13,575

17,729

14,117

Add: Depreciation

2,845

2,667

5,051

5,642

Add: Amortization of intangibles from business combinations

5,990

7,586

12,845

15,172

Add: Amortization of software development costs(1)

12,804

12,304

25,225

24,176

Subtotal

48,354

52,575

90,859

90,840

Non-GAAP EBITDA

$    83,712

$      79,041

$   157,356

$     121,629

Non-GAAP EBITDA margin(2)

28.8 %

27.5 %

Non-GAAP adjustments:

Add: Stock-based compensation expense

$    22,706

$      27,252

$    46,586

$      49,422

Add: Employee severance

—

2,147

—

2,147

Add: GCC workforce transition costs(3)

1,974

—

3,000

—

Add: Acquisition and disposition-related costs(3)

866

264

1,013

25,396

Add: Security Incident-related costs

—

395

—

2,575

Add: Impairment of capitalized software development costs

1,056

—

1,056

—

Subtotal

26,602

30,058

51,655

79,540

Non-GAAP adjusted EBITDA

$   110,314

$     109,099

$   209,011

$     201,169

Non-GAAP adjusted EBITDA margin(4)

38.0 %

36.6 %

Rule of 40(5)

41.0 %

40.2 %

Non-GAAP adjusted EBITDA

$   110,314

$     109,099

$   209,011

$     201,169

Foreign currency impact on Non-GAAP adjusted EBITDA(6)

(162)

(1,096)

(1,191)

(891)

Non-GAAP adjusted EBITDA on constant currency basis(6)

$   110,152

$     108,003

$   207,820

$     200,278

Non-GAAP adjusted EBITDA margin on constant currency basis

38.0 %

36.5 %

Rule of 40 on constant currency basis(7)

40.8 %

39.6 %

(1) Includes amortization expense related to software development costs, and amortization expense from capitalized cloud computing implementation costs.

(2) Measured by GAAP revenue divided by non-GAAP EBITDA.

(3) See additional details in the reconciliation of GAAP to Non-GAAP operating income above.

(4) Measured by non-GAAP organic revenue divided by non-GAAP adjusted EBITDA.

(5) Measured by non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. See Non-GAAP organic revenue growth table above.

(6) To determine non-GAAP adjusted EBITDA on a constant currency basis, non-GAAP adjusted EBITDA from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro.

(7) Measured by non-GAAP organic revenue growth on constant currency basis plus non-GAAP adjusted EBITDA margin on constant currency basis.

(dollars in thousands)

Six months ended
June 30,

2026

2025

GAAP net cash provided by operating activities

$   142,513

$     68,329

GAAP operating cash flow margin

24.9 %

12.4 %

Non-GAAP adjustments:

Less: purchase of property and equipment

(4,117)

(1,311)

Less: capitalized software development costs

(26,127)

(27,787)

Non-GAAP free cash flow

$   112,269

$     39,231

Non-GAAP free cash flow margin

19.6 %

7.1 %

SOURCE Blackbaud

Expanded Collaboration Helps Colleges and Universities Improve Visibility, Streamline Operations and Support Student Success  

, /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the world's leading provider of AI-powered solutions for social impact, today announced an Innovation Partnership with Student First, the provider of the most modern, AI-powered higher education student information system (SIS) designed to simplify administrative workflows and enhance the student experience.

Building on Blackbaud's strategic investment in Student First earlier this year and the companies' ongoing collaboration through the Blackbaud Partner Network, this new Strategic Innovation Partnership deepens the relationship between the two companies and advances a shared vision for a Connected Campus in higher education.

"Our Innovation Partnership with Student First reflects a shared commitment to helping colleges and universities connect the systems and data that matter most," said Mark Davis, vice president and general manager of education products, Blackbaud. "As institutions face growing pressure to do more with less, they need technology that helps teams work from a shared view. By bringing together the systems that shape both the student experience and institutional performance, Blackbaud and Student First are helping colleges and universities build a stronger foundation for student success and long-term sustainability through our commitment to execution of a shared roadmap across both companies."

Rising costs, enrollment pressures and evolving student expectations are forcing colleges and universities to rethink how they operate. Yet for many institutions, the systems that support critical infrastructure remain disconnected, creating barriers to collaboration, limiting visibility and making it harder to align resources with student success goals.

By bringing together best-in-class solutions for student information, enrollment, financial aid, scholarships, advancement, finance and tuition payments, Blackbaud and Student First are working together to create a Connected Campus operating model that helps colleges and universities unite data, people and processes across the institution to provide greater visibility, reduce complexity and empower institutions to make more informed decisions. With this enhanced level of information flow and collaboration, institutions can align resources to strategic priorities, strengthen financial stewardship and drive student success at scale.

"This strategic partnership represents the first collaboration of its kind between two education technology innovators," said David Meek, CEO of Student First. "Earlier this year we said the most advanced SIS in higher education belongs alongside the best financial and advancement platform in the market. This expanded partnership proves that at scale. Extending our work with Blackbaud into product, sales, and marketing means institutions across their ecosystem get direct access to a connected campus experience, not just the promise of one."

With this new, expanded partnership, Blackbaud and Student First will work together across product, sales and marketing teams to advance a shared Connected Campus strategy for higher education. 

The strategic partnership also reflects a shared commitment to AI for a purpose in higher education: practical, human-centered innovation that helps administrators, faculty and staff reduce manual work, surface meaningful insights and spend more time supporting students. This approach aligns with Student First's view that AI should optimize, analyze, and automate, while human expertise remains central to decisions that shape the student experience.

By pairing Student First's cloud-native, AI-powered SIS and automation-first approach with Blackbaud's AI-powered solutions for social impact, the companies are advancing innovation designed to fit into institutional workflows, reduce administrative time and workload, and support better decisions across the connected campus.

Institutions are already seeing the potential value of a more connected approach.

"With Blackbaud Financial Edge NXT and Student First, we'll have the capacity to automate many of our processes—such as degree audits, billing and applying financial aid—which historically were manual and time-intensive," said Mark Hanshaw, associate provost and general counsel for Cumberland University.

Recent enhancements include AI-driven workflow automation that reduces manual administrative effort across core campus operations, along with predictive intelligence capabilities that identify patterns, trends, and potential risks earlier, enabling institutional leaders to make more proactive, data-informed decisions. Together, these capabilities help colleges and universities improve efficiency, streamline operations, and focus more resources on supporting student success.

The collaboration brings together complementary capabilities designed specifically for higher education. Student First provides a modern, cloud-native Student Information System (SIS) and financial aid platform that supports the full student lifecycle. Blackbaud delivers industry-leading solutions including Blackbaud Financial Edge NXT®, Blackbaud Raiser's Edge NXT®, Blackbaud Award Management™ and Blackbaud Integrated Payments™, helping institutions connect advancement, finance, scholarship management and tuition payment operations within a broader campus ecosystem.

The combined approach is designed to help institutions:

Bridge the gap between advancement and finance by connecting student, financial aid, scholarship, advancement, finance and tuition payment data Reduce manual processes and operational complexity Improve visibility across traditionally disconnected departments Support more informed planning, decision-making and resource allocation Strengthen alignment between institutional resources and student success goals Learn more about Blackbaud's Connected Campus plans in upcoming Product Update Briefings and at bbcon 2026, taking place Sept. 21-Oct. 1 in Columbus, Ohio.

About Blackbaud
Blackbaud (NASDAQ: BLKB) is the world's leading provider of AI-powered solutions for social impact. Serving nonprofits, educational institutions, companies committed to corporate social responsibility, and individual change makers, Blackbaud propels impact at scale with the sector's most intelligent solutions for fundraising and engagement, education solutions, financial management and CSR and grantmaking. With the deepest expertise powered by the world's largest philanthropic data set, the most connected workflows, and the most powerful impact network, Blackbaud's solutions are building a future where resources are unleashed at the speed of need. Blackbaud has been recognized by Fast Company, Newsweek, Quartz, Forbes and more for AI innovation, responsible leadership and workplace excellence. Blackbaud has operations in the United States, Australia, Canada, Costa Rica, India and the United Kingdom, supporting users in 100+ countries. Learn more at www.blackbaud.com or follow us on X/Twitter, LinkedIn, Instagram and Facebook.

Media Inquiries
[email protected] 

Forward-looking Statements
Except for historical information, all of the statements, expectations and assumptions contained in this news release are forward-looking statements that involve a number of risks and uncertainties, including statements regarding expected benefits of products and product features. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; management of integration of acquired companies and other risks associated with acquisitions; risks associated with successful implementation of multiple integrated software products; the ability to attract and retain key personnel; risks associated with management of growth; lengthy sales and implementation cycles; technological changes that make our products and services less competitive; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Blackbaud's investor relations department. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

SOURCE Blackbaud

At its 2026 K–12 User Conference, Blackbaud shared human-centered AI capabilities that will help schools increase enrollment, strengthen engagement, and reduce operational complexity

, /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the world's leading provider of AI-powered solutions for social impact, today announced new AI-driven innovations for independent K–12 schools at its 2026 K–12 User Conference, including a preview of its new Admissions Agent designed to help schools guide prospective families, improve enrollment outcomes, and streamline admissions workflows.

Private schools today are navigating rising expectations for personalized experiences alongside growing administrative pressure, increasingly complex operations and high turnover rates. Many are exploring how to apply AI in meaningful ways that support their teams by reducing administrative burden and spending more time building the human connections that define education.

Blackbaud's latest innovations are built to meet this moment, bringing human-centered AI to education with intelligent tools embedded directly into its K-12 solutions to help schools turn insight into action. By unifying these capabilities within a shared data foundation, Blackbaud's Total School Solution helps schools reduce fragmentation, gain clearer insight, and take more coordinated action across their entire community.

"Education is, and always will be, a deeply human experience," said Mark Davis, vice president and general manager of education products, Blackbaud. "Our focus is on using responsible AI to reduce administrative burden and strengthen the relationships at the heart of schools, giving teams the tools to act earlier, operate more efficiently, and deliver more connected experiences for families."

Introducing the Admissions Agent
At the center of Blackbaud's latest announcements is the Admissions Agent, part of the company's broader Agents for Good™ agentic AI suite. Purpose-built for schools, the Admissions Agent will enable every independent school to offer the high-touch, personalized admissions experience that previously only the most well-resourced institutions could achieve. The Agent works semi-autonomously or fully autonomously based on each school's comfort level, always within guardrails and always human-centered.

The Agent will:

Reduce friction throughout the admissions funnel, guiding families through each stage of the process Give potential applicants rapid answers to critical questions Keep families engaged with timely, personalized follow-up Identify where prospective families may be dropping off from the admission process Increase qualified, complete applications with a concierge admissions experience Blackbaud will launch an early adopter program soon to partner with schools on shaping the solution to meet the specific needs of school administrators.

Driving a New Era of Connected Intelligence
Blackbaud is embedding AI across its K–12 solutions to help schools move from managing systems to driving outcomes. Innovation highlighted across Blackbaud's Total School Solution to reduce manual work and improve coordination across the campus includes:

Candidate Insights—predictive enrollment and engagement insights—that draw on both historical and real-time data, as well as Blackbaud's proprietary insights to recommend next best actions to engage candidates Blackbaud AI Chat that helps administrators quickly ask questions of their data, get insights in plain language and take action, directly within the solution A Common Records Engine that syncs data in real time between Blackbaud Student Information System™ and Blackbaud Raiser's Edge NXT®, breaking down silos between departments A new Enrollment Contracts capability that simplifies the enrollment process, enabling administrators to streamline contract adjustments and automatically pull in financial management teams once a contract is signed Student Success Insights that help schools proactively identify and support at-risk students A new Parent Initiated Attendance feature that allows parents to submit absences, tardies and early dismissals directly through the Student Information System portal, providing real-time information to both administrative staff and teachers Enhancements across Blackbaud's Learning Management System from a new, simpler grading hub to AI tools that help teachers create and manage assignments An AI-enabled Collections Assistant that helps finance teams get ahead of late payments and see the full picture of a family's situation Together, these advancements enable schools to operate more proactively and reduce administrative burden while improving how they engage students and families.

A Community Focused on the Future
Blackbaud's K–12 User Conference brings together hundreds of school leaders, educators, and administrators for three days of hands-on learning, product innovation sessions, and peer collaboration. Attendees explore new technologies, participate in breakout sessions and discussions, and connect with peers and partners to share best practices and ideas for the future of K–12 private education. Day three will feature the popular Unconference experience—an open, participant-driven forum where educators shape the agenda based on topics that matter most to them.

"Blackbaud has a long history of commitment to education and schools, and this conference is one of the special things they do," said John Yen, director of technology, Polytechnic School. "There are so few conferences and networking opportunities for the support staff and administrators in schools, and this is an important opportunity to engage, learn, and share best practices. With AI at the forefront of technology today, ensuring the underpinnings of our school operations is the essential foundation in weathering changing times and the ongoing evolution in education."

Supporting Stronger Outcomes for Schools
"Research shows that teachers and staff spend over 50% of their time on administrative work," Blackbaud's Mark Davis added. "At Blackbaud we're integrating AI into the tools they use every day to reduce that burden and provide more opportunity to focus on what's most important: empowering student success."

Learn more about Blackbaud's AI-powered solutions for K–12 schools here. And learn more about Blackbaud's approach to Responsible AI here.

About Blackbaud
Blackbaud (NASDAQ: BLKB) is the world's leading provider of AI-powered solutions for social impact. Serving nonprofits, educational institutions, companies committed to corporate social responsibility, and individual change makers, Blackbaud propels impact at scale with the sector's most intelligent solutions for fundraising and engagement, education solutions, financial management and CSR and grantmaking. With the deepest expertise powered by the world's largest philanthropic data set, the most connected workflows, and the most powerful impact network, Blackbaud's solutions are building a future where resources are unleashed at the speed of need. Blackbaud has been recognized by Fast Company, Newsweek, Quartz, Forbes and more for AI innovation, responsible leadership and workplace excellence. Blackbaud has operations in the United States, Australia, Canada, Costa Rica, India and the United Kingdom, supporting users in 100+ countries. Learn more at www.blackbaud.com or follow us on X/Twitter, LinkedIn, Instagram and Facebook.

Media Inquiries
[email protected] 

Forward-looking Statements
Except for historical information, all of the statements, expectations and assumptions contained in this news release are forward-looking statements that involve a number of risks and uncertainties, including statements regarding expected benefits of products and product features. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; management of integration of acquired companies and other risks associated with acquisitions; risks associated with successful implementation of multiple integrated software products; the ability to attract and retain key personnel; risks associated with management of growth; lengthy sales and implementation cycles; technological changes that make our products and services less competitive; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Blackbaud's investor relations department. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

SOURCE Blackbaud