BLKB

It has been about a month since the last earnings report for Blackbaud (BLKB). 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. In the past month, investors have witnessed a flat trend in fresh estimates. At 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. Blackbaud has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Blackbaud is part of the Zacks Computer - Software industry. Over the past month, Commvault Systems (CVLT), 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. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Blackbaud, Inc. (BLKB) : Free Stock Analysis Report CommVault Systems, Inc. (CVLT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, July 29, 2026 at 8:00 a.m. ET Head of Investor Relations - Tom Barth Chief Executive Officer, President and Vice Chairman - Michael Gianoni Executive Vice President and Chief Financial Officer - Chad Anderson Operator: Good day, and welcome to Blackbaud's Second Quarter 2026 Earnings Conference Call. Today's conference is being recorded. I'll now turn the conference over to Tom Barth, Head of Investor Relations. Please go ahead, sir. Tom Barth: Good morning, everyone. Thank you for joining us on Blackbaud's Second Quarter 2026 Earnings Call. Joining me on the call today are Mike Gianoni, Blackbaud's Chief Executive Officer, President and Vice Chairman; and Chad Anderson, Blackbaud's Executive Vice President and Chief Financial Officer. Please note that our comments today contain forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those projected. Please refer to our most recent Form 10-K and other SEC filings for more information on those risks. Today's discussion will focus on non-GAAP results. Please refer to our press release and investor materials posted to our website for full details on our financial performance, including GAAP results, full year guidance and long-term aspirational goals. We believe that a combination of GAAP and non-GAAP measures provide a more representative view of how we measure our business. Unless otherwise specified, we will refer only to non-GAAP financial measures on this call. Please note that non-GAAP financial measures should not be considered in isolation from or as a substitute for GAAP measures. We have also provided a slide presentation with supplemental data and additional highlights and financial metrics. The earnings release, supplemental tables and presentation are available in the Investor Relations section of our website on blackbaud.com. And with that, let me turn the call over to you, Mike. Michael Gianoni: Thank you, Tom. Good morning, everyone. We appreciate you joining today. We delivered another quarter of solid execution against our operating plan with a continued focus on efficiency in a rapidly accelerating pace of product innovation. We achieved our planned revenue and other financial targets for the quarter. As you saw in our press release, we pointed investors to the high end of our full year financial guidance ranges, which does not include any meaningful revenue contribution from our 5 new AI products launched or announced this year. AI enablement remains central to our success, both in terms of the capabilities we're delivering to customers and in the way Blackbaud is operating, our first Agentic products moved from launch into real customer results, which is reinforcing our confidence and built our strategy and the opportunity ahead. We continue to invest aggressively in innovation to produce meaningful product enhancements and new solutions throughout our portfolio, including Generative and Agentic AI capabilities. Our products enable our customers to dramatically improve engagement levels, raise harmony and lead their organizations while increasing operational efficiency ultimately allowing them to spend more time executing on the missions in less time on administrative tasks. No company can better help customers deliver on their meaningful missions than Blackbaud. Blackbaud brings nearly 45 years of specialized domain expertise serving as a system of record for our customers with deeply embedded workflows purpose-built for the social impact sector. At the same time, we have continued to invest heavily in cybersecurity and AI governance to help protect our customers' data and provide a framework for our AI solutions to use that data responsibly. These are some of our customers' largest concerns, and we have addressed them head on. A significant number of organizations in our vertical markets have limited IT resources and face turnover and staffing shortages. We win because our solutions are intuitive, require fewer complex customizations and integrations and translate advances like AI into practical outcomes, customers can trust building confidence that it's supporting longer contract turns at renewal. In fact, approximately 90% of our contractual reoccurring revenue is on 3-year or longer contracts and 25% on 4-year or longer contracts. You may recall that just a few years ago, more than half of our renewal volume was from customers on 1-year contracts. This quarter, we again saw a healthy mix of new customer logo wins and cross sales of additional solutions to our existing customers. Several of our new logo wins were competitive displacements across multiple verticals. New logos this quarter included Nelson University, which selected Raiser's Edge NXT together with our analytics capabilities in the East Hampton Historical Society, which shows Raiser's Edge NXT to modernize its fundraising. Additionally, we continue to see great momentum in upselling with our development agent with cross-sells in our [ hired ] and nonprofit verticals. We also had several notable wins that were competitive takeaways and returning customers. Jacksonville Zoo moved to Raiser's Edge NXT and prospect insights, displacing an incumbent point solution and returning to Blackbaud after several years away. And the Center for Autism Services Alberta selected Financial Edge NXT, a competitive takeaway from a horizontal accounting provider and another returning customer. These wins reflect the strength of purpose-built connected solutions over fragmented generic alternatives and the value of our solutions and meeting our customers' ambitious goals. We are more confident than ever that AI strengthens our ability to deliver differentiated solutions and drive future growth as well as improving how we run Blackbaud. Our first Agentic AI offering of fundraising development agent launched into general availability ahead of schedule earlier this year and we are now seeing genuine measurable results and return on investment from our customers. The development agent identifies potential in dormant donors who are not in a major gift officer portfolio and executes personalized, brand-aligned multi-touch engagement sequences under human supervision. Early results are compelling. In production, the agent is generating a reply rate but significantly above the industry average, a message open rate metric meaningfully above industry benchmarks and an average attributable gift size well above industry norms. Importantly, customers are engaging a broader donor base without adding headcount. And the development agent is just the first of many ways we expect to add value to our customers. Over the last few weeks, we announced 4 additional agents for good solutions planned for the coming months. Each embedded directly in the solutions our customers already use every day. The data health agent, which will run autonomously within our fundraising solutions to identify duplicate entries confirm contact information, resolve consistent life changes, helping development offices run more curated and targeted campaigns. This agent will free up customer resources as most customers have data health assigned to staff. The admissions agent, which will enable any independent K-12 school to offer the high-touch, personalized emissions experience that previously only the most well resourced institutions could achieve. The digital marketing agent, which will help plan campaigns intelligently from selecting the right audience to generating tailored content to optimizing outreach across channels in real time and the accounts payable agent, Financial Edge NXT's first autonomous AI agent, which will work alongside finance teams to improve their own efficiencies to include being able to automate invoice intake and optimize payments. Alongside these agents, we're advancing a reimagined cloud-native AI-first connected platform, a single operating system for social impact that connects every product learns from every interaction and gets smarter over time, all while keeping humans firmly in control. We'll unveil the full details of this connected system, along with additional product news at BBCON 2026 in Columbus, Ohio at the end of September, we're excited about what's ahead. I also wanted to highlight some innovation specific to our K-12 vertical. Within K-12, we previewed the admissions agent and our 2026 user conference and introduce a wave of embedded AI across our total school solution, including predictive candidate insights, new enrollment contract capabilities and student success insights that help schools proactively support at-risk students. Also embedded is Blackbaud AI chat that helps administrators quickly ask questions of their data, get insights and plain language and take action directly within the solution as well as a common records engine that syncs data in real time across our student information and fundraising systems, breaking down silos between departments and offering our customers the capability to integrate various systems. Our competitive differentiation is clear and widening. Our strength comes from combining proprietary data were the most robust sets of social impact data process and secured in real time with the sector's reaches social impact Signal Graph, deep embedded sector contacts and purpose-built governance. Native integrations across systems of record, engagement, financial accounting, transaction processing and intelligence, further strengthen that advantage. Our agents stand apart precisely because they are embedded in the solutions customers already trust, reducing the data gaps and security risks created by bolt-on-tools. We're also seeing continued momentum in customer adoption, usage of AI-powered workflows has expanded meaningfully over the past several quarters and more than half of our Raiser's Edge NXT customers use machine learning enabled donor prospecting, generating tens of billions of predictions annually that live and aggregate within our systems, creating a self-improving feedback loop that generates better fundraising outcomes across our customer base. We also believe trust is critical to organizations, allowing intelligent systems to act on their behalf. Our customers trust in us as their partner, trust in our solutions that they are used to, trust in the data and trust in our security our advantages for both our customers and for Blackbaud, trust matters as AI usage increases. Recent research from the Blackbaud Institute shows that AI is now common across the social impact sector. yet most organizations are held back by gap between adoption and effective use. We're helping close that gap in two ways: by delivering trusted transformational AI capabilities inside the tools our customers already use and through the AI coalition for social impact, which recently launched a free product agnostic AI or social impact certification program to help professionals adopt AI effectively and responsibly. Now turning to how we use AI internally. We continue to identify, experiment and scale solutions across engineering, sales and marketing, customer success and the back office to improve speed and operational efficiency. Our engineering teams use leading [ Generative ] AI tools such as Microsoft, GitHub, CoPilot and Anthropic Claude and other approved solutions to accelerate development, reduce time to remediate software issues and increased throughput on new product delivery. We're also applying AI to better qualify inbound interest, support sales development and improved customer support. I believe our past performance is compelling in addition to improving our operations, go-to-market capabilities and pace of innovation, we are focused on the value creation opportunities ahead in the near, mid and long term, both operationally and financially. As a reminder, from 2026 through 2030, we are targeting double-digit annual EPS growth driven by the following: organic total revenue growth of 4% to 6% annually with potential upside based on viral events and new product launches such as our agents for good catalog. Adjusted EBITDA growth of 6% to 8% annually while expanding our adjusted EBITDA margin at 40% plus. Slide 24 in our investor deck provides more detail on the planned initiatives to drive continued margin expansion, most of which are already underway. We expect this improvement in EBITDA to continue to translate to strong free cash flow growth. We plan to use our very strong cash flows to drive purposeful capital allocation strategy with consistent stock repurchases as a core tenet. We expect to deploy 50% or more of our cumulative free cash flow generated between 2026 and 2030, for stock purchases and continue to reduce our common stock outstanding. This is a continuation of our significant stock repurchase program over the last couple of years in which we have reduced common stock outstanding by approximately 15% since the fourth quarter of 2023. In the more near term, as we stated in our earnings press release today, we are pointing investors to the high end of our original FY '26 guide across revenue, adjusted EBITDA, EPS and free cash flow. Chad will provide more detail and color in a minute. To conclude, we believe Blackbaud is a compelling investment with multiple opportunities for strong shareholder returns. From an operating, financial and strategic perspective, we are pleased to be carrying real momentum into the second half of the year and the years ahead. We look forward to our continued journey. I also would like to thank the entire Blackbaud team for their continued strong efforts and having Blackbaud named to Times' list of America's Best Companies in 2026 and a job well done. I'd like to turn it over to Chad to walk through our second quarter results and our guide for the remainder of 2026. Chad Anderson: Thanks, Mike, and good morning, everyone. In the second quarter, we continued to balance cost management with growth opportunities and innovation. As we do each quarter, we're focused on durable subscription-led performance prudent expectations around transactional revenue and steady progress on profitability and cash flow. Our Q2 performance reflected continued demand for our mission-critical solutions along with growth in transactional revenue. As always, transactional revenue can vary from quarter-to-quarter, and our guidance philosophy assumes performance consistent with historical patterns and does not include any assumption for viral giving events. Q2 organic revenue grew 3% to $291 million. As we previously indicated, we expected some moderation in organic revenue growth during the year given the size and timing of certain renewal cohorts. Our second quarter results were in line with those expectations and support our full year outlook. Non-GAAP adjusted EBITDA was $110 million representing an adjusted EBITDA margin of approximately 38%, reflecting continued operating discipline while maintaining investment in growth initiatives and innovation. Our disciplined operating focus again translated into strong bottom line performance. Non-GAAP EPS increased 9% to $1.33 in the second quarter, and we're on track to achieve high teens EPS for the full year 2026, the high end of our guidance range. Free cash flow increased approximately $24 million, up 46% year-over-year to $75 million in the quarter. Strong free cash flow generation continues to support our balanced capital allocation strategy. We remain committed to investing in growth innovation and customer success while returning capital to shareholders during the first half of 2026 including the net share settlement of employee stock compensation, we repurchased just over 6% of our outstanding common stock as of December 31, 2025. Since the fourth quarter of 2023, we've offset 100% of dilution from stock-based compensation and also reduced common shares outstanding by approximately 15%. Overall, we delivered another solid quarter and first half, reinforcing our confidence in the full year outlook. Now moving on to our 2026 outlook. Based on our first half performance and our current view of the operating environment, we are reaffirming our full year guidance ranges but now expect to finish in the upper half of the range across all 4 key metrics: revenue adjusted EBITDA, EPS and free cash flow. For EPS and free cash flow, we expect results to be at or above the high end of the ranges. As a reminder, we continue to expect 2026 quarterly financial performance, including revenue growth and profitability to be heavily weighted to the back half of the year and particularly the fourth quarter some of which I'll discuss in a moment. Before I close, I'd like to provide a few housekeeping items that are already contemplated in our financial guidance and may be helpful as you think about modeling the business through the balance of 2026 and into 2027. Donor expectations continuing to evolve with increased emphasis on donor experience, reliability, privacy and security. Blackbaud continues to invest in modern online giving capabilities to meet these expectations. Our modern online giving forms are designed to help customers raise more for their missions through configurable donor experiences, streamline data integration and optional fee offset capabilities while maintaining a strong focus on donor trust and data protection. As part of that investment, we've introduced a platform fee on certain online form transactions. The fee supports continued innovation and investment in secure, reliable, online giving infrastructure and related platform enhancements to minimize the impact to the majority of our customers they can use our existing donor cover option whereby donors pay the fee associated with their transaction. As we've previously discussed, the platform fee is expected to contribute to the back half weighting of our 2026 financial results with the largest benefit expected in the fourth quarter. Turning to gross dollar retention. As we've discussed previously, Blackbaud's 2026 contractual recurring renewal cohort is approximately 40% larger than last year. As a result, we continue to expect a near-term dip in reported gross dollar retention as a greater amount of recurring revenue comes up for renewal during the year. As we move past this larger renewal cohort, we expect gross dollar retention rates to climb back to our more recent norm of 91% to 92% by the end of 2027. This dynamic was factored into our full year 2026 revenue guidance. And as stated earlier, we currently expect to finish in the upper half of the guidance range. Looking to 2026 and beyond, we expect free cash flow to continue growing significantly. We anticipate deploying at least 50% of cumulative free cash flow generated from 2026 through 2030 and toward share repurchases beyond that commitment, the company has tremendous optionality for dynamically allocating capital to its highest and best use based on market conditions including additional share repurchases, debt reduction and strategic tuck-in acquisitions. We have a lot to be proud of, executing well through recessions, financial crisis, COVID and the shift to the cloud through a commitment to providing meaningful solutions to our customers and strong execution of our operating plan on our journey to becoming a Rule of 45 company we remain committed to providing investors with an attractive financial model, balance between growth of revenues, earnings and cash flows along with a prudent and purposeful capital allocation strategy and always, we remain focused on providing enhanced value to our customers and our shareholders. Thank you all. Mike and I would be happy to take your questions. Operator? Operator: [Operator Instructions]. Our first question comes from Brian Peterson with Raymond James. Brian Peterson: I wanted to start on some of the win backs that you mentioned, Mike. You don't always mentioned them every quarter, but I'd love to understand if there's anything in terms of the timing of why you're winning back some of those customers you may have lost? And as we think about win rates overall, is there anything you can share about how those have developed in 2026? Michael Gianoni: Brian, thanks for the question. Yes, I mentioned a couple of those. Those customers are coming back due to the innovation that we're driving in our core products. And then the AI solutions were embedding in those core products. So it really is all about the innovation investments that we're making and announcing and the outcomes that our customers are producing. We've got a lot of information around when customers join Blackbaud and use one of our fundraising solution, there's a pretty big uplift in donations raise it really improves their revenue. So that, I think, is a prominent factor in these win-backs. But we feel really good about when that happens. Brian Peterson: Okay. That's great to hear. And maybe I know you guys raised the guidance to kind of the upper end of the range. Any help on what's underpinning that? And how do we think about that in terms of the line items between contractual recurring and then transactional? Michael Gianoni: Yes. Thanks. So yes, so we mentioned that we are pointing everyone to the top half of the guide range. We also mentioned in addition to that, or included is sort of the very top end of the range for cash flow and EPS. So sort of top half for the other metrics like revenue, very top for free cash flow and EPS. We're having a great year in bookings. So super positive achievement in overachieving our internal sales bookings plans, we've got a lot of great leadership in sales. Some new leadership has come in just in the last 6 or 8 months. And so we're having a great year related to win rates, just beating our internal sales quota plans in a lot of areas in the company that gives us a lot of confidence in pointing everyone to the top half of revenue for this year. And as you know, great effects for next year and future years because pretty much when customers sign up with us based on the 3-year contract. The other thing I mentioned this in my prepared remarks, I'll just mention because it's relevant to your question, last time I talked about the fact that we had 20% of our customers on 4-year or longer contracts. I just made an update in this call, it was 25% of our customers around 4-year or longer contracts, which is really great for the long run for us. Operator: Our next question comes from Rob Oliver with Baird. Robert Oliver: Two for me, Mike, first for you. Just an update on the logo program. I know this has been part of your go-to-market push since bringing in new sales leadership. And obviously, there's some noise around the gross retention around current customers and stuff. But I just wanted to understand some -- where you are with the new logo program? And any proof points you can point to get us comfortable that's on the right track? Michael Gianoni: Yes. The gross retention, we talked about is gas revenue retention and I think we've said this many times, we have a cohort this year that's 40% higher. So the results of the quarter and the guide moving to the upper half is all in our plan, and we finalized the plan a year ago. So all that stuff contemplated in the plan. So we're actually on track. All this is quite well expected. So we feel good about that, Rob. We're doing really well with new logos in areas like K-12 and nonprofit and higher ed. Those markets are doing really well. Our year cost business is just nailing a lot of new logos across the board. I've mentioned these in past calls, your case is closing new logos with some of the largest companies in the world, Fortune 100 companies are signing up. So it's a pretty wide distribution in new logos. And again, our sales teams, many of our sales teams are only selling new logos. So we have some that you cross-sell want to do logos in the door or we announce new products, but many of them just do new logos. So again, we feel really good about sales bookings. We're nicely ahead of plan and all that's going quite well. Robert Oliver: Great. And then Chad, one for you. Just -- I'm trying to square the commentary around the high end of the guidance versus the kind of 3% constant currency growth that we saw in this quarter versus the 4% to 4.5% for the full year. And I know that called out a couple of things second half waiting on renewals. Obviously, that makes sense. And then transactions and stuff like that in Q4. Just wondering if there's anything else going on there in terms of the pricing around these renewal contracts if you're getting the price? And then one specific question just around the platform pieces that's new. Would you be able to decide the potential impact of that on that Q4. Chad Anderson: Yes. No, that's great. And thanks for the question, Rob. And to Mike's earlier point, we're performing the plan. So program continues to perform well. We might describe the increased cohort size. But as we think about the second half of the year, we're operating to plan. We talked about the renewals. I'd also mention that the transaction revenue in the quarter had a tough compare. So we exceeded kind of our traditional growth ranges in 2025 and have a little bit of viral giving as well. So we've seen that come back down into kind of the normal range, as you would expect. And whenever I think about the second half of the year, we also talked about the launch of the platform fee. And really, you can think about that as investments that we're making in order to drive better outcomes for our customers from a donor experience perspective, the monetization model is quite common within the industry as well. We're feeling really good about it. Our customers will have options if they choose their donors cover the fees or not. So it's quite common we've launched that effectively in the Q3 time frame. We had planned for it. It was included in our guide, and that's contributing to the back end weighting and particularly into Q4, Rob. Operator: Our next question comes from Parker Lane with Stifel. J. Lane: Mike, I was wondering if you can talk about the sales motion agents, I think you're up to 4 solutions that are out there today. Does every seller in the organization promote those agents to try to get this into the customer base or you have dedicated teams around those today? And are you offering customers the opportunity to pilot and trial some of these agents before making the commitment on the subscription side of things? Or do they have to commit on subscription? Michael Gianoni: Yes. Thanks. So the first product out in the market is the development agent. We announced last year we had early adopter program. and then went to general availability for customers just in March, a couple of months ago. What we've done with that, Parker, is we started with a dedicated team because there was a lot of learnings for us and for customers. So in the EAP program that started last year, for the first time ever in a new product that we signed up customers to paying contracts just to the early adopters, which they all did. And then the general availability pricing is much higher, obviously, that came out in March. And so it's sort of a ramp-up. You could think about a new product, getting announced getting early adopters using the product with a dedicated selling team, which are embedded in the product and engineering teams. So we're really close to the customer, and it's really important to get that very close feedback loop from customers because we're iterating and improving the product all the time. And then once the product more matures, it gets to general availability. And then after a month or 2 or so, then we move it into the general global sales team. It really is to help the products mature, help our organization learn, help the customers learn. So that's sort of the evolution when we launch these new products. The really cool thing is we've announced 5 of them now. So development agent a while ago into general availability, 4 more in the press release just recently. And there'll be more announced this year. We'll have more new AI products announced predominantly at our BBCON conference at the end of September, I think it is in Ohio. And you guys are welcome to come if you'd like. So we'll have even more products announced then. And they're getting to be specific by vertical as well. We announced the admissions agents, for example, which is obviously for tools for K-12 where the development agent kind of goes across our verticals because they all use our fundraising solutions. And these are fully Agentic new products for Blackbaud, which is super exciting. And there's nothing better in sales to have a brand-new solutions to talk to prospective or existing customers about. So we're excited about the pace of innovation, and we're just getting going here. J. Lane: Thanks, Mike. Chad, maybe one for you. Looking at the levers for additional margin expansion through 2030, vendor optimization, AI and other efficiency gains are included on that list. Maybe let's go ahead in hand to some set. Can you just talk about how big those levers are relative to the other areas like the workforce strategy, platform modernization and data center closures? Chad Anderson: Sure. And Parker, thanks for the question. And we're pleased with the progress of our margin expansion, which is continuing to progress very well there. A number of levers. It's important to know that within the guide, we haven't contemplated efficiency gains in a meaningful way from AI. It's notable. We're continuing to execute on a number of initiatives, but it's also important just to note you have the natural flow like fall through of the subscription model as well as the SaaS model. So from that perspective, we're pleased. We continue to focus and have good outcomes relative to building out the GCC and the workforce strategy in Hyderabad. So we expect to continue to see improvements there. We've talked about modernization, those kind of our tech stack as well. So those are a couple of the items we've laid out a bit more detail on those within the investor deck for UC as well. Michael Gianoni: Yes, Mark, I'll add to that, too. We're in the in the deep process around becoming an AI-first company. We are refactoring every department in Blackbaud. Every part of the company, what you're seeing now is a pretty significant improvement in innovation with 5 AI products launched using AI to build those products. I also mentioned it's a key thing that those products are embedded in our trusted solutions, having trust in the solutions for the customers is super important. And we've got a system of record and system of intelligence set of products has now embedded a Agentic AI that gives us a competitive advantage. But we are refactoring the whole company. So we are using AI in marketing, in sales, in support in the call center, in engineering in product management, in the PMO to refactor the entirety of how we run the business and how the business is structured as well, that's not yet factored into additional revenue growth or improve margins yet. But it's early days, but I can tell you, I can clearly see some pretty interesting improvements in the operating performance of the company based on this initiative. And we're being very aggressive but also governed as we refactor the entirety of the business. Operator: Our next question comes from Peter Burkly with Evercore ISI. Peter Burkly: You talked about sort of the different levels of AI maturity in the industry and you guys are refering AI coalition to sort of help that progress over time. So I'm just curious your view today on where are your customers on average in terms of that maturity stage. And understanding that it's not agents aren't necessarily expected to contribute much to revenue this year. But if you think the maturity curve is sort of progressing, where you start seeing Agentic in contribution first half of next year, second half of next year is more of a longer-term play. Just more color along those lines would be helpful. Michael Gianoni: Yes. I think I'll answer that kind of in two parts. Like the industry maturity, which is the customers. Everyone is using experimenting with AI in different ways. Our customers, it depends on -- we have customers that are such a wide range, right? Like we can -- we can talk about a very small local nonprofit or we can talk about YourCause customers, which are in the Fortune 100. So it's a pretty wide range. But I would say that the folks that we interact with -- they're all interested in using AI. I'd say it's very early days and their ability to have AI positively impact their business, except for the products they're buying from us like the development agent. I talked about some of the things we're seeing with the development agent around big increases in things like reply rates, message open rates, it actually dip sizes, which is revenue for them. So they're getting improved outcomes based on that solution. And so I still think it's early days. The other part of that question, I think, is our ability to monetize this. So not really in our numbers this year, we'll see some new revenue coming from these solutions next year, just growing over time. The interesting part also is, again, that a really big deal for our customers is there's a mix of excitement and fear of AI. I think everybody has that. that includes our customers of all sizes. But working with Blackbaud, is a reason why 25% of our contracts are 4 years or longer now. So there's a trust in working with Blackbaud, there's a trust that we're putting Agentic solutions into our trusted platforms. As you know, the data in our platform are not available to large language models. Proprietary data, customer data, Blackbaud enriched data. And there's proprietary AI learned models, contextual models that are owned by Blackbaud and it's a trusted environment. So I think that this adoption is going to grow tremendously. I still think it's early days for customers, but I think the approach that we're taking, which is fully agenetic solution under customer control, embedded in our systems of record is going to be really exciting and beneficial for our customers and for Blackbaud. Tom Barth: Okay. Well, that's it for today. Thank you for joining us. We will be attending a number of investor events over the coming months, including several investor conferences, which are listed on our Investor Relations site and as well as Mike mentioned, our BBCON Customer Conference at the end of September. We hope to see you then and/or speak with you very soon. In the meantime, we wish you continued success and have a wonderful day. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Blackbaud, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Blackbaud wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* Now, it’s worth noting Stock Advisor’s total average return is 953% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Blackbaud (BLKB) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Blackbaud (BLKB) came out with quarterly earnings of $1.33 per share, beating the Zacks Consensus Estimate of $1.23 per share. This compares to earnings of $1.21 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +8.13%. A quarter ago, it was expected that this software and services provider in the nonprofit sector would post earnings of $1.08 per share when it actually produced earnings of $1.14, delivering a surprise of +5.56%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Blackbaud, which belongs to the Zacks Computer - Software industry, posted revenues of $290.6 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.12%. This compares to year-ago revenues of $281.38 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Blackbaud shares have lost about 43.3% since the beginning of the year versus the S&P 500's gain of 8.5%. While Blackbaud has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Blackbaud was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.32 on $292.17 million in revenues for the coming quarter and $5.19 on $1.18 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computer - Software is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Intuit (INTU), has yet to report results for the quarter ended July 2026. This maker of TurboTax, QuickBooks and other accounting software is expected to post quarterly earnings of $3.59 per share in its upcoming report, which represents a year-over-year change of +30.6%. The consensus EPS estimate for the quarter has been revised 0.2% lower over the last 30 days to the current level. Intuit's revenues are expected to be $4.27 billion, up 11.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Blackbaud, Inc. (BLKB) : Free Stock Analysis Report Intuit Inc. (INTU) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The software provider expects to finish fiscal 2026 in the upper half of its guidance ranges after delivering steady revenue growth, stronger cash flow, and continued AI investment. Blackbaud (NASDAQ:BLKB) reported second-quarter revenue of $290.6 million, up 3.0% year over year, with recurring revenue representing 98.2% of total sales. The company reaffirmed its full-year 2026 guidance and now expects results to finish in the upper half of its financial outlook, with EPS and free cash flow at the high end. GAAP diluted EPS increased to $0.79, while non-GAAP diluted EPS rose to $1.33. Operating cash flow and free cash flow improved significantly, supporting continued share repurchases and AI investments. Blackbaud repurchased just over 6% of its shares during 2026 to date and still has approximately $850 million remaining under its authorization. Blackbaud (NASDAQ:BLKB) reported second-quarter 2026 revenue of $290.6 million, a 3.0% increase from the prior year, as recurring revenue grew 3.3% to $285.3 million and accounted for 98.2% of total revenue. GAAP operating income increased to $62.0 million, producing a 21.3% operating margin, while GAAP net income reached $35.4 million, or $0.79 per diluted share. On a non-GAAP basis, diluted earnings per share increased to $1.33 from the prior year. Cash generation strengthened during the quarter. Operating cash flow rose to $91.1 million, while non-GAAP free cash flow increased to $75.3 million, reflecting margin improvements of 760 basis points for both metrics. Management reaffirmed full-year guidance for revenue, adjusted EBITDA, non-GAAP EPS, and free cash flow, while indicating the company expects to finish in the upper half of each guidance range. Blackbaud also said EPS and free cash flow are expected to reach the high end of their respective ranges. The results point to a business continuing to generate stable recurring revenue while improving cash generation despite ongoing investment in artificial intelligence. The high proportion of recurring revenue provides visibility into future performance, while stronger operating cash flow supports both product development and capital returns. Blackbaud continues to prioritize AI across its platform, announcing additional Agents for Good™ capabilities, AI-powered product enhancements, and broader investments in its cloud-native platform. These initiatives are intended to strengthen the company’s competitive position in software serving nonprofit organizations, educational institutions, and other social impact customers. Capital allocation also remains a key part of the investment story. The company has already repurchased more than 6% of its outstanding shares during 2026 and expects total repurchases this year to represent between 6% and 10% of shares outstanding as of the end of 2025. Continued buybacks, combined with solid free cash flow generation, may support shareholder returns alongside ongoing investment in innovation. Investors will likely monitor: Whether Blackbaud delivers results at the high end of its reaffirmed 2026 guidance. Adoption of its expanding AI-powered products and Agents for Good platform. Trends in recurring revenue growth and operating margins. The pace of additional share repurchases under the remaining $850 million authorization. Blackbaud stock price

Interested in Blackbaud, Inc.? Here are five stocks we like better. Second-quarter results met plan: Organic revenue rose 3% year over year to $291 million, adjusted EBITDA reached $110 million, adjusted EPS increased 9% to $1.33, and free cash flow rose 46% to $75 million. Blackbaud reaffirmed its full-year guidance and expects results toward the upper end of its ranges, with performance weighted to the second half. AI expansion is a key growth initiative: Blackbaud’s Development Agent is showing early customer engagement above industry benchmarks, while four additional AI agents are planned for fundraising, admissions, marketing and accounts payable. Management said its outlook does not assume meaningful 2026 revenue from these products. Capital returns and contract changes remain significant: Blackbaud repurchased just over 6% of shares outstanding in the first half of 2026 and plans to direct at least 50% of cumulative 2026–2030 free cash flow to buybacks. Meanwhile, about 90% of contractual recurring revenue is now under contracts of three years or longer, though a larger 2026 renewal cohort could temporarily pressure gross dollar retention. Blackbaud (NASDAQ:BLKB) reported second-quarter 2026 results that met its operating plan, with management pointing investors toward the upper end of its full-year financial guidance ranges as the company expands its artificial intelligence product portfolio and continues share repurchases. Chief Executive Officer, President and Vice Chairman Mike Gianoni said the company delivered planned revenue and financial targets during the quarter while maintaining a focus on efficiency and product innovation. He said the updated outlook does not assume a meaningful revenue contribution this year from the company’s five newly launched or announced AI products. → This Tiny AI Supplier Could Be More Important Than the Chipmakers “AI enablement remains central to our success,” Gianoni said, citing both customer-facing capabilities and internal operational uses. He said Blackbaud is investing in cybersecurity and AI governance as customers seek protections for their data and responsible frameworks for AI use. Chief Financial Officer Chad Anderson said second-quarter organic revenue rose 3% year over year to $291 million. Non-GAAP adjusted EBITDA was $110 million, producing an adjusted EBITDA margin of about 38%. Non-GAAP earnings per share increased 9% to $1.33, while free cash flow rose 46% year over year, or about $24 million, to $75 million. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Anderson said the company expected some moderation in organic revenue growth during 2026 because of the size and timing of certain renewal cohorts. The second-quarter performance was in line with those expectations, he said. Blackbaud reaffirmed its full-year guidance ranges and now expects to finish in the upper half of its outlook for revenue, adjusted EBITDA, earnings per share and free cash flow. For EPS and free cash flow, Anderson said the company expects results to be at or above the high end of its ranges. Management expects results to be weighted toward the second half of the year, particularly the fourth quarter. → Innovative ETF Strategies That Are Paying Off This Summer The company said its newly introduced platform fee on certain online giving form transactions is expected to contribute to the second-half weighting, with the largest benefit anticipated in the fourth quarter. Customers can use an existing donor-cover option under which donors pay transaction-related fees, according to Anderson. Management also reiterated that Blackbaud’s 2026 contractual recurring renewal cohort is approximately 40% larger than the prior-year cohort. The company expects a near-term decline in reported gross dollar retention as more recurring revenue comes up for renewal, before retention returns to a more recent range of 91% to 92% by the end of 2027. Gianoni highlighted the company’s Development Agent, a fundraising-focused agentic AI product that became generally available ahead of schedule earlier in 2026. The product identifies prospective and dormant donors outside major gift officers’ portfolios and conducts personalized, multi-touch engagement sequences under human supervision. According to Gianoni, early production results showed reply rates and message-open metrics above industry benchmarks, along with average attributable gift sizes above industry norms. He said customers are using the product to engage a broader donor base without adding headcount. Blackbaud has also announced four additional “Agents for Good” offerings that are planned for the coming months: Data Health Agent, designed to identify duplicate records, confirm contact information and address constituent life changes within fundraising solutions. Admissions Agent, intended to support personalized admissions experiences for independent K-12 schools. Digital Marketing Agent, designed to help customers select audiences, generate tailored content and optimize outreach across channels. Accounts Payable Agent, which Blackbaud said will automate invoice intake and optimize payments within Financial Edge NXT. Gianoni said the company plans to unveil further details about a cloud-native, AI-first connected platform at its bbcon 2026 event in Columbus, Ohio, at the end of September. He described the planned platform as a connected system designed to link products, learn from interactions and retain human control over AI-driven actions. More than half of Raiser's Edge NXT customers use machine-learning-enabled donor prospecting, Gianoni said. Those capabilities generate tens of billions of predictions annually within Blackbaud’s systems, he added. Management cited a mix of new customer wins, cross-sales and competitive displacements during the quarter. New customers included Nelson University, which selected Raiser's Edge NXT and analytics capabilities, and the East Hampton Historical Society, which selected Raiser's Edge NXT for fundraising modernization. Blackbaud also cited returning customers that replaced competing providers. Jacksonville Zoo adopted Raiser's Edge NXT and Prospect Insights after using an incumbent point solution, while Centre for Autism Services Alberta selected Financial Edge NXT after using a horizontal accounting provider. During the question-and-answer session, Gianoni said customer win-backs were being supported by innovation in Blackbaud’s core products and embedded AI capabilities. He also said the company is exceeding its internal sales-bookings plans and seeing favorable win rates across several areas, including K-12, nonprofit, higher education and its YourCause business. Blackbaud said approximately 90% of contractual recurring revenue is now on contracts of three years or longer, while 25% is on contracts of at least four years. Gianoni noted that only a few years ago, more than half of renewal volume came from one-year customer contracts. The company reiterated long-term targets for 2026 through 2030 that include 4% to 6% annual organic total revenue growth, 6% to 8% annual adjusted EBITDA growth and adjusted EBITDA margins above 40%. Gianoni said potential revenue upside could come from viral giving events and new product launches, including the company’s AI agent offerings. Anderson said Blackbaud continues to pursue margin expansion through workforce strategy initiatives, technology modernization and other operational measures. He added that the company has not incorporated meaningful AI-driven efficiency gains into its guidance, although management is applying AI across engineering, sales, marketing, customer support and back-office functions. During the first half of 2026, including the net share settlement of employee stock compensation, Blackbaud repurchased just over 6% of its shares outstanding as of Dec. 31, 2025, Anderson said. Since the fourth quarter of 2023, the company has offset all dilution from stock-based compensation and reduced shares outstanding by about 15%. Blackbaud expects to allocate at least 50% of cumulative free cash flow generated from 2026 through 2030 to share repurchases, while retaining flexibility for additional repurchases, debt reduction and strategic tuck-in acquisitions. Blackbaud, Inc is a leading provider of cloud software, services and data intelligence solutions designed specifically for the social good community. The company's main offerings include fundraising and relationship management platforms, financial management systems, grant and award management tools, and advanced analytics. Its flagship products—such as Raiser's Edge NXT, Blackbaud Financial Edge NXT and Blackbaud NetCommunity—help nonprofit organizations, educational institutions, healthcare providers and foundations streamline donor engagement, optimize financial operations and measure program impact. Founded in 1981 and headquartered in Charleston, South Carolina, Blackbaud has grown from a small technology startup into a global specialist in nonprofit software. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Blackbaud Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by a continued focus on operational efficiency and a rapidly accelerating pace of product innovation, particularly in Agentic AI. Management attributed competitive wins and returning customers to the strength of purpose-built, connected solutions over fragmented generic alternatives. Strategic positioning has shifted toward longer-term stability, with 25% of contractual recurring revenue now on 4-year or longer contracts, up from 20% previously. The company is refactoring every internal department using AI to improve speed and throughput, though these efficiency gains are not yet fully reflected in financial targets. Market differentiation is being widened by embedding AI directly into trusted systems of record, addressing customer concerns regarding data security and governance. New logo wins were supported by a healthy mix of competitive displacements in the K-12, higher education, and nonprofit verticals. Management is pointing to the high end of full-year guidance for revenue, adjusted EBITDA, EPS, and free cash flow based on strong first-half execution. Financial results are expected to be heavily weighted toward the back half of 2026, specifically the fourth quarter, driven by the introduction of a new platform fee. The 2026-2030 strategic framework targets double-digit annual EPS growth and organic revenue growth of 4% to 6%, with potential upside from new AI product launches. Capital allocation will prioritize stock repurchases, with a commitment to deploy at least 50% of cumulative free cash flow through 2030 to reduce common stock outstanding. Guidance assumes a near-term dip in gross dollar retention due to a 40% larger renewal cohort in 2026, with a projected return to 91%-92% levels by the end of 2027. A new platform fee on certain online transactions was introduced to support infrastructure innovation, which will primarily impact Q4 results. Transactional revenue growth moderated in Q2 due to a difficult year-over-year comparison and the absence of viral giving events. The company has reduced common stock outstanding by approximately 15% since the fourth quarter of 2023 through aggressive repurchase programs. Management noted that while AI adoption is high, a gap exists between adoption and effective use, which they are addressing through a new certification program. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that win-backs are primarily driven by core product innovation and the integration of AI solutions that provide measurable revenue uplifts for customers. Sales bookings are currently overachieving internal plans, supported by new leadership and a focus on new logo acquisition. The company uses a phased approach, starting with dedicated teams for early adopters before moving products to the global sales team once they reach general availability. While AI products are not expected to contribute meaningfully to 2026 revenue, management anticipates growth from these solutions starting in 2027. Margin expansion is supported by the natural flow-through of the SaaS model, workforce strategy in Hyderabad, and tech stack modernization. Management is aggressively refactoring the entire company to be 'AI-first,' which is expected to improve operating performance beyond current guidance.

Company Expects to Finish Fiscal Year 2026 in the Upper Half of Financial Guidance Ranges CHARLESTON, S.C., July 29, 2026 /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 OutlookBlackbaud 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 ProgramAs 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 About BlackbaudBlackbaud (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 [email protected] Media [email protected] Forward-Looking StatementsExcept 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. TrademarksAll 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. 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: View original content to download multimedia:https://www.prnewswire.com/news-releases/blackbaud-announces-2026-second-quarter-results-302837503.html

This article first appeared on GuruFocus. Organic Revenue Growth: 3% increase to $291 million in Q2. Adjusted EBITDA: $110 million, with a margin of approximately 38%. Non-GAAP EPS: Increased 9% to $1.33 in Q2. Free Cash Flow: Increased 46% year-over-year to $75 million in Q2. Stock Repurchase: Over 6% of outstanding common stock repurchased in the first half of 2026. Contractual Recurring Revenue: Approximately 90% on three-year or longer contracts, 25% on four-year or longer contracts. Full Year Guidance: Expected to finish in the upper half of the range for revenue, adjusted EBITDA, EPS, and free cash flow. Warning! GuruFocus has detected 6 Warning Signs with BLKB. Is BLKB fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Blackbaud Inc (NASDAQ:BLKB) achieved its planned revenue and financial targets for the quarter, pointing investors to the high end of its full-year financial guidance ranges. The company launched five new AI products this year, with AI enablement being central to its success, enhancing customer capabilities and operational efficiency. Approximately 90% of Blackbaud Inc (NASDAQ:BLKB)'s contractual recurring revenue is on three-year or longer contracts, with 25% on four-year or longer contracts, indicating strong customer retention. The Development Agent, Blackbaud Inc (NASDAQ:BLKB)'s first agentic AI offering, has shown compelling early results, including higher reply rates and larger average gift sizes. Blackbaud Inc (NASDAQ:BLKB) continues to invest heavily in innovation, cybersecurity, and AI governance, addressing customer concerns and enhancing product offerings. The company's organic revenue growth moderated to 3% in Q2, reflecting the size and timing of certain renewal cohorts. Blackbaud Inc (NASDAQ:BLKB) faces challenges with a larger renewal cohort in 2026, which may temporarily impact gross dollar retention rates. Transactional revenue can vary from quarter to quarter, and the company's guidance does not include assumptions for viral giving events. The introduction of a platform fee on certain online form transactions may impact customer perceptions, despite being a common industry practice. AI products are not expected to contribute significantly to revenue this year, indicating a longer timeline for monetization. Q: Can you explain the recent win backs of customers and how win rates have developed in 2026? A: Mike Gianoni, CEO, explained that customers are returning due to the innovation and AI solutions embedded in Blackbaud's core products. The improvements in fundraising solutions have led to significant revenue uplift for customers, which is a key factor in these win backs. Q: What is driving the guidance towards the upper end of the range, and how does it affect contractual and transactional revenue? A: Mike Gianoni, CEO, stated that strong sales bookings and leadership have led to exceeding internal sales plans, giving confidence to guide towards the upper half of the revenue range. The company has a high percentage of customers on long-term contracts, which supports future revenue stability. Q: How is the new logo program progressing, and what are the proof points of its success? A: Mike Gianoni, CEO, reported strong performance in acquiring new logos, particularly in K-12, non-profit, and higher education sectors. The YourCause business is also securing new logos with large companies, contributing to the positive sales bookings. Q: Can you provide more details on the platform fee and its impact on Q4 results? A: Chad Anderson, CFO, explained that the platform fee is part of investments to enhance donor experiences and is common in the industry. It was launched in Q3 and is expected to contribute to the back-end weighting of financial results, particularly in Q4. Q: How is Blackbaud's AI strategy impacting internal operations and future growth? A: Mike Gianoni, CEO, highlighted that Blackbaud is becoming an AI-first company, refactoring every department to improve operations. While AI-driven efficiency gains are not yet factored into financial projections, they are expected to enhance operating performance significantly. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

CHARLESTON, S.C., July 15, 2026 /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the world's leading provider of AI-powered solutions for social impact, will report its second quarter 2026 financial results on Wednesday, July 29, before the U.S. financial markets open for trading. In conjunction with this announcement, Blackbaud will host a conference call at 8:00 a.m. ET to discuss the company's financial results. A webcast will be available and archived on Blackbaud's investor webpage following the call. 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, nonprofit financial management, digital giving, grant making, corporate social responsibility, and education management. 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. View original content to download multimedia:https://www.prnewswire.com/news-releases/blackbaud-announces-date-of-second-quarter-2026-financial-results-302826387.html

AI Adoption in the Social Impact Sector Is Booming, but Effectiveness Is Not; New Report Investigates Why and What Organizations Should Do Next CHARLESTON, S.C., June 24, 2026 /PRNewswire/ -- The Blackbaud Institute, a research lab at Blackbaud (NASDAQ: BLKB), the world's leading provider of AI‑powered solutions for social impact, today released new research that delivers a clear framework for intentional AI adoption to support the social impact sector's ability to maintain financial resilience, grow donor confidence, and continue responding to pressing societal needs despite constrained resources. The report, Bridging the AI Effectiveness Gap: New Research on What Drives AI Impact and Trust in the Social Sector, draws on surveys from thousands of social impact professionals and donors to identify what separates organizations that are seeing real results from AI from those that are not. While 85% of social impact professionals report using AI at work, only about 33% believe their organization is using it very effectively. The research reveals a clear divide between a small group of "AI‑Adaptive" organizations—the 10% of organizations at the top of the AI maturity scale that have moved beyond experimentation to systemic, governed AI use—and the majority of organizations that are still applying AI in fragmented, individual ways. The AI‑Adaptive organizations are realizing significant dividends on their AI investment, consistently reporting stronger outcomes tied to long‑term sector health, including revenue growth, donor retention and staff productivity. This research comes at a critical time for the social impact sector with traditional fundraising models under increasing strain due to staffing shortages, high turnover and limited resources, all of which directly impact organizations' ability to sustain revenue growth. "AI presents a transformative opportunity to fundamentally reshape social impact," said Carrie Cobb, chief data and AI officer, Blackbaud. "But this research makes it clear that adoption alone is not enough. To achieve meaningful outcomes, organizations must be intentional about grounding their AI approach in strong data, clear governance and transparency. It's about more than time and cost savings. It's about leveraging AI to position the sector for a future of sustainable growth." Key Findings There are four key gaps that organizations should address to improve AI maturity: Time savings exist everywhere, but impact does not: There's a clear AI maturity dividend: The AI Imperative for FundraisingFor fundraising teams, AI offers a path to more efficient operations, more personalized outreach and greater scale, but only if organizations evolve how they use technology and do so with trust as the foundation. "The AI opportunity is unlike any other in the history of fundraising, but realizing it requires more than new tools," said Sudip Datta, chief product officer, Blackbaud. "The opportunity isn't just in using AI—it's in using it in ways that build trust, unlock the power of data, and drive smarter action. The future health of the social impact sector depends on organizations rethinking their technology and operating models to move up the AI maturity scale, so that AI helps reduce friction, strengthen relationships and unleash resources at the speed of need." To support the sector in this journey, Blackbaud has convened the AI Coalition for Social Impact, a collaboration of leading organizations and experts committed to removing barriers to responsible AI adoption across the social impact sector and unlocking the power of AI for good. The first initiative of the Coalition is a free certification program for social impact professionals launching this summer. Read the ReportTo explore the full findings and learn what distinguishes AI‑Adaptive organizations from the rest of the sector, read the Bridging the AI Effectiveness Gap report here. About the Blackbaud InstituteThe Blackbaud Institute is a research lab and educational resource powered by the Blackbaud Philanthropic Dataset, the world's largest combined dataset on giving, volunteering, grantmaking, and social impact. The Institute conducts independent research and publishes insights that help organizations understand trends shaping the social impact sector and make more informed decisions. Learn more at institute.blackbaud.com. About BlackbaudBlackbaud (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 [email protected] Forward-looking StatementsExcept 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. View original content to download multimedia:https://www.prnewswire.com/news-releases/new-blackbaud-institute-research-reveals-key-gaps-social-impact-organizations-must-bridge-to-achieve-transformational-results-with-ai-302808652.html