Financial Data and Key Metrics Changes - Blackbaud generated revenue of $281 million, representing a 5.2% organic growth year-over-year [4] - Adjusted EBITDA margin improved to 35.4%, up more than 200 basis points year-over-year [4] - Non-GAAP diluted earnings per share increased to $1.10, an 11% rise year-over-year [4] - Free cash flow was particularly strong at $125 million, up from $98 million last year, indicating a 28% growth year-over-year [15][16] Business Line Data and Key Metrics Changes - The company reported solid contractual recurring revenue growth and continued strength in transactional recurring revenue lines [14] - New logo wins included significant contracts with St. Mary's College and Concordia College, showcasing the effectiveness of their product offerings [6][7] - The average annual recurring revenue (ARR) from new logo deals has been increasing, with a focus on mid-tier and enterprise customers [28] Market Data and Key Metrics Changes - Annual charitable giving in the U.S. is nearing $600 billion, up more than 6% year-over-year, indicating a resilient market for Blackbaud's services [5] - Corporate giving has reached an all-time high, becoming the fastest-growing nonprofit revenue source over the last five years [5] Company Strategy and Development Direction - Blackbaud is focusing on acquiring new logos, driving innovation, and strengthening customer relationships through additional solutions and renewals [5] - The company is investing in AI capabilities, with over 70 planned or available AI enhancements aimed at improving fundraising efforts [9] - The capital allocation strategy prioritizes stock repurchase, with an increase in the repurchase target from 5% to 5.2% to 7% for 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to create substantial shareholder value, supported by strong year-to-date performance [12] - The guidance for 2025 includes revenue projections of $1,120 million to $1,130 million, with organic growth at approximately 5% [19] - The anticipated EBITDA margins are projected to be between 35.4% and 36.2%, with a focus on margin expansion opportunities [20] Other Important Information - The company identified a prior period non-cash error related to income tax calculations, which resulted in immaterial impacts on previously filed financial statements [18][31] - Incremental investments of approximately $7 million in product innovation and AI development are planned for the third and fourth quarters [18] Q&A Session Summary Question: Customer feedback on AI and agentic functionality - Management noted excitement around AI capabilities, with about 40% of customers adopting new features quickly, and plans to monetize these solutions in the future [24][25] Question: New logo wins and contract sizes - Management confirmed a focus on larger ARR deals, with multi-year contracts being standard, and noted an increase in average contract sizes [28][29] Question: Revenue reclassification rationale - The revision was related to an immaterial non-cash error in tax calculations, which was corrected as part of best practices [31][32] Question: Monetization timeline for agentic AI - Management expects modest revenue from agentic AI solutions to start in 2026, with a clear ROI for customers using these agents [34][36] Question: Structural drivers for higher growth in transactional revenue - Management highlighted strong performance across all transaction platforms, with no viral events impacting growth in the quarter [41]

Company Overview - Blackbaud is a market leader in providing software for social impact, serving over 40,000 customers with approximately 2,600 employees across 100+ countries[16] - The company facilitates over $100 billion annually in donations, grants, and investments through its platforms[16] - Blackbaud's annual recurring revenue is approximately $1.1 billion (Non-GAAP, at the midpoint of 2025 financial guidance)[16] Market Opportunity and Product Innovation - Blackbaud operates in a large and underpenetrated total addressable market (TAM) exceeding $10 billion[31] - Revenue penetration in key segments like Fundraising, Relationship Management and Engagement is less than 20%, and Financial Management, Grant and Award Management is less than 10%[31] - The company is focused on product innovation, including AI-driven solutions like Blackbaud Development Agent and integrations with platforms like Constant Contact[39, 42] Financial Performance and Outlook - Blackbaud is targeting a Rule of 45 by FY2030, combining organic revenue growth and adjusted EBITDA margin[73] - The company's Q3 2025 non-GAAP organic revenue grew by 5.2% year-over-year[65] - Q3 2025 non-GAAP adjusted EBITDA margin was 35.4%, a 220 basis point improvement from Q3 2024[66] - Q3 2025 non-GAAP diluted EPS grew by 11% year-over-year[66] - Blackbaud increased its 2025 total revenue guidance to a midpoint of $1.125 billion, with an adjusted EBITDA margin of 35.8% and diluted EPS of $4.40[70] - The company expects to repurchase 5.2% to 7.0% of its common stock outstanding in 2025 and has reduced common stock outstanding by 10% since Q4 2023[82]

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Financial Performance - GAAP total revenue for Q3 2025 was $281.1 million, down 1.9% year-over-year, while non-GAAP organic revenue increased by 5.2%[5] - GAAP recurring revenue was $275.8 million, down 1.5%, representing 98.1% of total revenue, with non-GAAP organic recurring revenue increasing by 5.5%[5] - GAAP net income was $47.5 million, with GAAP diluted earnings per share of $0.98, an increase of $0.63 per share year-over-year[5] - Non-GAAP adjusted EBITDA was $99.7 million, up $4.6 million, with a non-GAAP adjusted EBITDA margin of 35.4%, an increase of 220 basis points[5] - Non-GAAP free cash flow for Q3 2025 was $123.2 million, an increase of $34.9 million, with a margin of 43.8%, up 1,300 basis points[5] - The Rule of 40 score for Q3 2025 was 40.6%, indicating a balanced growth in revenue and profitability[5] - Non-GAAP income from operations for the nine months ended September 30, 2025, was $255,750, compared to $236,689 for the same period in 2024, representing a growth of 8.0%[42] - Non-GAAP adjusted EBITDA for the nine months ended September 30, 2025, was $300,828,000, up from $285,898,000 in 2024, reflecting a growth of 5.2%[48] - Non-GAAP adjusted free cash flow for the nine months ended September 30, 2025, was $166,767, compared to $187,350 in 2024[46] Revenue and Profitability Trends - Total revenue for the three months ended September 30, 2025, was $281,143, a decrease of 1.6% compared to $286,598 in the same period of 2024[31] - GAAP revenue for Q3 2025 was $281,143, a decrease of 1.9% compared to $286,598 in Q3 2024[42] - Non-GAAP organic revenue for Q3 2025 was $281,143, reflecting a growth of 5.2% from $267,294 in Q3 2024[42] - GAAP gross profit for Q3 2025 increased to $167,490, resulting in a gross margin of 59.6%, up from 54.9% in Q3 2024[42] - Basic earnings per share for the three months ended September 30, 2025, was $1.00, compared to $0.36 in 2024, reflecting a significant increase[31] - The company reported a net income of $78,282,000 for the nine months ended September 30, 2025, compared to $46,840,000 in 2024, marking a 67.2% increase[48] Cash Flow and Assets - Cash flows from operating activities for the nine months ended September 30, 2025, were $207,540, compared to $222,386 in 2024, indicating a decrease of 6.7%[34] - The company reported a decrease in cash and cash equivalents to $38,255 as of September 30, 2025, down 43.5% from $67,628 at December 31, 2024[35] - Total current assets decreased to $638,835 as of September 30, 2025, down 34.6% from $976,593 at December 31, 2024[29] - The company’s total assets decreased to $2,104,441 as of September 30, 2025, down 15.7% from $2,496,000 at December 31, 2024[29] - Total liabilities decreased to $1,996,251 as of September 30, 2025, down 15.7% from $2,369,161 at December 31, 2024[29] Stock and Capital Management - The company repurchased more than 5% of its common stock outstanding year-to-date and reduced its leverage ratio from 2.9x in Q1 to 2.4x in Q3[4] - Blackbaud's capital expenditures for 2025 are expected to be approximately $55 million to $65 million, including $50 million to $60 million for capitalized software development costs[11] - Stock-based compensation expense for the three months ended September 30, 2025, was $21,657,000, compared to $21,125,000 in 2024[48] Research and Development - Research and development expenses for the three months ended September 30, 2025, were $37,198, slightly down from $37,916 in 2024[31] - Blackbaud announced new AI capabilities at the bbcon 2025 conference, enhancing its product portfolio with smarter analytics and data insights[11] Other Financial Adjustments - The company incurred $24.3 million in charges related to the release from a lease for office space during the nine months ended September 30, 2025[38] - Security Incident-related costs for the nine months ended September 30, 2025, amounted to $2.8 million, down from $12.8 million in the same period of 2024[39] - The provision for credit losses and sales returns for Q1 2025 was $0.8 million, unchanged from the previous quarter[58] - Deferred revenue for Q1 2025 decreased by $29.4 million, reflecting a significant adjustment from $29.8 million[58]

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Core Insights - The report highlights that GivingTuesday donors exhibit a consistently higher rate of repeat giving compared to other donors, indicating their lasting impact on charitable contributions [1] Group 1: Report Findings - The Blackbaud Institute, in collaboration with GivingTuesday, released a report focusing on the long-term effects of GivingTuesday donors [1] - The report provides strategies for nonprofits to enhance year-round engagement with donors [1] Group 2: Implications for Nonprofits - Nonprofits are encouraged to leverage the insights from the report to strengthen their donor engagement strategies throughout the year [1]

Core Insights - Blackbaud is hosting the North America Corporate Social Impact Summit from March 30 to April 1, 2026, in Nashville, Tennessee, aimed at CSR professionals [1][4] - The event will feature over 250 attendees, focusing on corporate philanthropy, employee engagement, and product innovation [1][2] - The Summit will include high-impact keynotes, breakout sessions, and networking opportunities, maintaining an intimate experience despite expected growth [2][3] Event Details - The Summit will showcase product innovations, including exclusive previews of YourCause products for 2026 [2] - Attendees can participate in strategic one-on-ones, interactive activities, and evening receptions designed to foster community and collaboration [3] - Registration opens in October 2025, with early access for bbcon 2025 attendees [4] Company Overview - Blackbaud is a leading software provider dedicated to social impact, serving nonprofits, education sectors, and companies focused on social responsibility [6] - The company has facilitated over $100 billion in fundraising, grantmaking, and financial management annually through its platforms [6] - Blackbaud has received recognition from Newsweek, Quartz, and Forbes for its commitment to social responsibility and employee satisfaction [6]

Core Insights - Blackbaud, Inc. has concluded its annual technology conference, bbcon 2025, focusing on the role of AI in enhancing social impact through a vast network of organizations and causes [1] Group 1: Innovations and AI Developments - Blackbaud introduced two major innovations: transforming Blackbaud AI into a system of intelligent action and launching Blackbaud Agents for Good, which are proactive virtual team members [2][3] - New AI-driven features include donor stewardship reports, Recognition Programs, and hyper-personalized donor journeys aimed at enhancing engagement and loyalty [2][9] - Over 70 sector-specific AI capabilities were showcased, including the Development Agent for managing donor portfolios and Prospect Insights Pro for predictive analytics [4] Group 2: Financial Projections - For the full year 2025, Blackbaud projects GAAP revenues between $1.120 billion and $1.130 billion, indicating approximately 5% organic growth at the midpoint [7] - Non-GAAP EPS is anticipated to be between $4.30 and $4.50, an increase from earlier expectations of $4.16-$4.35 [7] Group 3: Company Strategy and Focus - Blackbaud is concentrating on cloud software solutions and data-driven decisions, leveraging AI, machine learning, and predictive analytics [6] - The company is committed to margin expansion opportunities while investing in innovation, AI, and cybersecurity [6] Group 4: Stock Performance - Blackbaud currently holds a Zacks Rank 3 (Hold), with shares declining 23.5% over the past year, contrasting with a 22.9% growth in the Computer – Software industry [8]

Core Insights - Blackbaud has introduced a new era of intelligent action powered by over 70 embedded, sector-specific AI capabilities and groundbreaking agentic AI, aiming to enhance social impact organizations [1][2][3] - The company emphasizes the transformative potential of AI for social impact organizations, providing tools that enable greater confidence, connection, and possibilities [2][3] AI Capabilities - Blackbaud's AI offerings include features such as AI-powered donor stewardship reports, hyper-personalized donor journeys, and Document Intelligence that automates data extraction from invoices [4] - The introduction of Blackbaud Agents for Good™ allows virtual team members to manage complex tasks, enabling human practitioners to focus on relationship-building and storytelling [4] - Chat for Blackbaud AI serves as a smart assistant, summarizing information and suggesting next steps to enhance team efficiency [4] Responsible AI Initiatives - Blackbaud is committed to responsible AI, having formed the AI Coalition for Social Impact, which includes various organizations aimed at promoting responsible AI adoption in the nonprofit sector [5] - The coalition's flagship initiative is a free, platform-agnostic AI for Social Impact Certification Course, designed specifically for the social impact sector [5] Event Highlights - The bbcon 2025 conference showcased Blackbaud's innovations and celebrated organizations making significant social impacts [6] - The event included the announcement of winners for various awards, recognizing contributions to social good and technological advancements [8] Company Overview - Blackbaud is a leading software provider dedicated to social impact, serving nonprofits, educational institutions, and companies focused on corporate social responsibility [7] - The company has facilitated over $100 billion in fundraising and grant management annually, supporting users in over 100 countries [7]

Core Insights - Blackbaud announced new AI capabilities aimed at enhancing social impact organizations' ability to tackle significant challenges, including the formation of an AI Coalition for Social Impact to address systemic barriers [1][2][4] Group 1: AI Initiatives and Product Enhancements - Blackbaud launched its agentic AI suite, Agents for Good™, designed to act as virtual team members that autonomously execute complex workflows, thereby expanding the capacity of social impact organizations [3] - The first agent, a Development Agent, will help teams identify and engage donors they currently cannot reach, unlocking new revenue streams at a lower cost [3] - Key enhancements include AI-powered insights and automated follow-up processes, transforming traditional systems into intelligent action platforms [7][9] Group 2: AI Coalition for Social Impact - The AI Coalition for Social Impact was established to promote responsible AI adoption and equip the sector with necessary skills and resources [4][6] - Founding members include various organizations such as the Association of Corporate Citizenship Professionals and the Responsible AI Institute, collaborating on a free AI certification course tailored for the social impact sector [5][10] - The coalition aims to ensure that responsible AI practices are integrated into governance, training, and product design [6] Group 3: Future Vision and Market Position - Blackbaud envisions creating an agentic ecosystem where its AI can seamlessly integrate with other AI systems, enhancing operational efficiency for users [8][9] - The company reported a 22% increase in connections to third-party applications over the past year, indicating a strong commitment to expanding its partner integrations [8] - Blackbaud's platform generates over 30 billion predictions annually, showcasing its extensive data capabilities to assist customers in reaching their target prospects [9]