Blackbaud launched a number of innovations at the bbcon user conference, further strengthening its AI layout.

Charleston, South Carolina, USA, October 28th / PRNewswire / -- Blackbaud (Nasdaq ticker: BLKB), a global leader in providing solutions driven by AI for the social impact sector, today announced its financial results for the third quarter ending September 30, 2026.

Blackbaud, President, CEO, and Vice Chairman of the Board, Mike Gianoni stated: "Innovation continues to drive our clear market leadership and expands our competitive moat. As we demonstrated at our recent bbcon conference in September, we are continuing to increase our investment in AI to help customers deepen their relationships with supporters, raise more funds, and operate more efficiently. For investors, we believe that Blackbaud is a solid investment choice with the potential to create shareholder value—this judgment is supported by our strong financial performance since the beginning of 2026 and our accelerating pace of innovation. I am continuously excited about the company's momentum in the short, medium, and long terms."

Third-quarter performance in 2026 compared to the third quarter of 2025:

• GAAP reported total revenue of $292.6 million, a year-on-year increase of 4.1%; non-GAAP organic revenue also grew by 4.1%.
• GAAP's recurring revenue amounted to 287 million US dollars, a year-on-year increase of 4.1%, accounting for 98.1% of total revenue; non-GAAP organic recurring revenue also grew by 4.1%.
• GAAP reported a operating profit of 60 million US dollars, and GAAP had an operating margin of 20.5%, an increase of 110 basis points.
• Non-GAAP operating profit was 94.6 million US dollars, and the non-GAAP operating margin was 32.3%, an increase of 240 basis points.
• GAAP reported a net profit of 46.1 million US dollars, and GAAP had an diluted earnings per share of 1.02 US dollars, an increase of 0.04 US dollars.
• Non-GAAP net profit was 61.2 million US dollars, and non-GAAP diluted earnings per share were 1.36 US dollars, an increase of 0.26 US dollars.
• After adjustment, EBITDA has been set to $111.1 million, an increase of $11.4 million; after adjustment, the profit margin of EBITDA is 38.0%, up by 260 basis points.
• Rule of 40 points account for 42.1%.
• GAAP provided $141.7 million in net cash from operating activities, an increase of $2.5 million; GAAP had an operating cash flow profit margin of 48.4%, a decrease of 110 basis points.
• The free cash flow for non-GAAP is $126 million, an increase of $2.8 million; the free cash flow margin for non-GAAP is 43.1%, a decrease of 70 basis points.

Blackbaud, Executive Vice President and Chief Financial Officer, Chad Anderson stated: " Blackbaud continues to be well-prepared for long-term success. Our strong performance reflects executive discipline, continuous productivity improvements, and optimization of our balance sheet. We remain committed to providing investors with an attractive financial model that maintains a balance between revenue, profit, and cash flow growth, while adopting a prudent and goal-oriented capital allocation strategy. Since the beginning of the year and since the end of 2025, we have repurchased more than 7% of our outstanding common shares and reduced our leverage ratio from 2.7 times in the first quarter to 2.3 times in the third quarter. We have many accomplishments to be proud of and are looking forward to the fourth quarter of 2026 and beyond."

All financial indicators mentioned in this press release that are not GAAP, including Rule and of 40, are explained in the section "Non-GAAP Financial Indicators" below. The company has provided a reconciliation table of non-GAAP financial indicators with the most directly comparable GAAP indicators in the financial statement tables attached to this press release.

Recent Company Highlights

• On bbcon 2026:
• Blackbaud launches Platform for Good ™, which is its unified operating system for the social impact sector. It integrates the company's products, AI, workflows, and ecosystem into a shared architecture to help organizations identify opportunities, expand their capabilities, and transform information into action with greater confidence. Blackbaud also announced a series of innovations covering fundraising, marketing, financial management, and education to enhance the platform's overall value.
• Blackbaud has also released Lantern ™, which is the first domain-specific language model designed specifically to optimize fundraising intelligence. Lantern was developed through strategic cooperation with Databricks and is built upon Blackbaud's forty years of experience in fundraising workflows, decision-making, and outcomes. As a result, it is capable of understanding the rhythm of fundraising and highlighting opportunities that might otherwise be overlooked. Starting from 2027, Lantern will be integrated into Platform for Good, and it will begin to support certain features of Blackbaud Raiser's Edge NXT ®, Agents for Good ™.
• In addition, Blackbaud has updated its continuously expanding series of Agents, for, and Good, including progress on Development Agent. It has also launched Data Health Agent – a continuously running data administrator that detects and handles data issues through reviewed and approved workflows. Blackbaud has also previewed intelligent agent experiences for finance and education.
• BILL and Blackbaud announce a strategic partnership to simplify the accounts payable processes for non-profit and educational finance teams, integrating BILL's commercial payment network and payment processing capabilities into Blackbaud Financial Edge NXT ® Payment Assistant ™. This collaborative effort is aimed at supporting finance teams throughout the entire process from invoicing and approval to payment and reconciliation, reducing manual operations in financial management workflows.
• Blackbaud expands the availability of YourCause ® from Blackbaud ® solutions for Expedited Giving and Expedited Giving, accelerating the flow of donations from businesses and employees to non-profit organizations. Expedited Giving ensures that donations are delivered 90% faster than the industry average, while Expedited Giving + is the fastest option in the industry, allowing for near-real-time direct donations to non-profit organizations with the help of Blackbaud Integrated Payments.
• Blackbaud announces the establishment of a new integration with Microsoft, Copilot and Intuit Mailchimp, connecting Raiser's Edge NXT to preferred technologies, and providing users with more working methods and a first-class experience.

For more recent highlights related to Blackbaud, please visit www.blackbaud.com / newsroom.

Financial Outlook

Blackbaud today reiterated its financial guidance for the entire year of 2026 and expects to meet the upper targets for four key indicators:

• GAAP reported revenues ranging from $1.173 billion to $1.179 billion
• After adjustment, EBITDA is set between $430 million and $438 million, not GAAP.
• Non-GAAP dilutes earnings per share to $5.15 to $5.25
• Non-GAAP free cash flow ranges from $280 million to $290 million.

The company's financial guidance for the full year of 2026 includes the following updated assumptions:

• The annual effective tax rate for non-GAAP is expected to be around 24.5%.
• The annual interest expenses are expected to range from $62 million to $66 million.
• The diluted weighted average number of outstanding shares for the whole year is expected to be approximately 45 million to 46 million shares.
• The annual capital expenditure is expected to be around $60 million to $70 million, of which approximately $52 million to $62 million will be for the capitalization costs of software development.

Blackbaud has not adjusted the forward-looking annual non-GAAP financial indicators in this press release with the most directly comparable GAAP indicators, which is permitted under Item 10(e)(1)(i)(B) of the S-K regulations. Since it would require unreasonable effort to estimate and quantify with reasonable certainty various necessary GAAP components at present, such adjustments are not possible. These components include those related to compensation, acquisition transactions and integrations, tax items, or other items that may arise during the year. These components and other factors may have a significant impact on the amounts of the future most directly comparable GAAP indicators and may differ significantly from the non-GAAP indicators.

Stock Repurchase Plan

As of September 30, 2026, there is still an available amount of approximately $832 million under Blackbaud's common stock repurchase plan. The plan was expanded, supplemented, and reauthorized in December 2025. Based on the company's current plan and the repurchase situation to date, it is estimated that the total repurchase amount for the entire year of 2026 will be equivalent to 7% to 10% of the outstanding common stocks as of December 31, 2025.

Telephone Conference Details

About Blackbaud

Blackbaud (Nasdaq ticker: BLKB) is a globally leading provider of AI solutions that drive social impact. The company serves non-profit organizations, educational institutions, companies committed to corporate social responsibility, and individual change agents, enabling them to maximize their impact through fundraising and engagement, educational solutions, financial management, and the most intelligent solutions in CSR and grant management. Leveraging its deep expertise supported by the world's largest charitable dataset, the most tightly connected workflows, and the strongest network of impact practitioners, Blackbaud's solutions are building a future where resources can be released at the speed of need. Blackbaud has received recognition from media outlets such as Fast Company, Newsweek, Quartz, and Forbes for its AI innovation, responsible leadership, and outstanding workplace performance. Blackbaud operates in the United States, Australia, Canada, Costa Rica, India, and the United Kingdom, supporting users in over 100 countries. For more information, visit www.blackbaud.com, or follow the company on X/ Twitter, LinkedIn, Instagram, and Facebook.

Investor Contact

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Forward-looking Statements

Except for historical information, all statements, expectations, and assumptions in this press release are forward-looking statements that are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements regarding the predictability of the company's financial condition and operating results. These statements involve various risks and uncertainties. Although Blackbaud endeavors to be accurate in making these forward-looking statements, future circumstances may differ from the assumptions on which they are based. In addition, other important factors that could lead to significant differences between actual results and expectations include: the management of integrating the acquired company; uncertainties regarding the growth of existing customer business and contract renewals; changes in revenue structure that may affect gross margins; whether sales growth can be sustained; risks related to the development, deployment, regulation, security, market acceptance, and awareness of artificial intelligence technology; risks and related responsibilities of cybersecurity and data protection; potential litigation that may involve the company; and other risk factors listed from time to time by Blackbaud in the SEC documents, which are available for free on the SEC website at www.sec.gov or may be requested from Blackbaud's investor relations department. Except as required by law, Blackbaud has no obligation to update these forward-looking statements and intends not to do so.

Trademarks

All product names that appear as Blackbaud in this text are trademarks or registered trademarks of Blackbaud and Inc.

Non-GAAP financial indicators

Blackbaud has provided financial information in this press release that has not been prepared in accordance with GAAP. Blackbaud uses non-GAAP financial indicators internally to analyze its operational performance. Therefore, Blackbaud believes that these non-GAAP indicators can serve as a supplement to the GAAP indicators, helping investors assess its ongoing operational performance and trends, and allowing for comparison of its financial results with those of other companies in the same industry over time; many of these companies also provide investors with similar non-GAAP financial indicators. However, due to possible differences in the specific calculation methods among companies, these non-GAAP indicators may not be completely comparable to the corresponding indicators of other companies.

The aforementioned financial indicators, excluding those marked with GAAP, have eliminated the impact of certain transactions that Blackbaud considers not to be directly related to the operational performance of a particular period, but which are beneficial to its long-term interests over multiple periods. Blackbaud believes that these non-GAAP indicators present their results in a way that better reflects their ongoing business operations, facilitating period-to-period comparisons and analysis of business trends.

Although Blackbaud believes that these non-GAAP indicators provide useful supplementary information, non-GAAP financial indicators should not be viewed in isolation, nor should they replace the financial information prepared according to GAAP. Investors are advised to consult the adjustment tables between these non-GAAP indicators and the most directly comparable GAAP financial indicators.

GAAP Free cash flow is defined as operating cash flow minus capital expenditures, which includes the cost of software development that needs to be capitalized, as well as capital expenditures for property and equipment. Blackbaud believes that GAAP free cash flow is a useful indicator to measure a company's operational performance. GAAP Free cash flow is not intended to represent, nor should it be considered, as the amount of remaining cash flow that can be used for discretionary expenditures.

In addition, when analyzing business performance, Blackbaud also uses non-GAAP organic revenue growth, non-GAAP organic revenue growth calculated at a fixed exchange rate, non-GAAP organic recurring revenue growth, and non-GAAP organic recurring revenue growth calculated at a fixed exchange rate. Blackbaud believes that these non-GAAP indicators can serve as a complement to the GAAP indicators, helping investors to assess the phased growth of its business on a consistent basis. Each of the above indicators does not include the incremental revenue from acquisitions made during the current fiscal year (if any). For companies acquired in the previous fiscal year, these indicators reflect the annual incremental non-GAAP revenue of those companies, as if they had been fully consolidated throughout that period. Furthermore, these indicators do not include revenue related to divested businesses from the previous period (if any). Excluding revenue from the previous period is done to present the performance of the divested businesses within the consolidated company's results over the same time frame for both periods. Blackbaud believes that this presentation method allows for a better comparison of the organic revenue growth and revenue operating rates of its current business.

Rule of 40 is defined as non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA profit margin. Non-GAAP adjusted EBITDA is defined as GAAP net profit plus net interest; income tax provision (benefit); depreciation; amortization of intangible assets resulting from business combinations; amortization of software development costs; equity incentive expenses; global employee transformation costs; costs related to acquisitions and dispositions; as well as costs related to security incidents.