Financial Data and Key Metrics Changes - In Q2 2025, the company generated revenue of $281 million, representing a 6.8% organic growth year over year [6][23] - Adjusted EBITDA margin improved to 38.5%, up nearly 300 basis points year over year [6][23] - Non-GAAP diluted earnings per share (EPS) increased to $1.21, up 12% year over year [6][23] - Adjusted free cash flow was $53 million, up from $36 million last year, representing an adjusted free cash flow margin of 18.9% compared to 12.7% in Q2 2024 [23][24] Business Line Data and Key Metrics Changes - The company highlighted strong performance in transaction solutions, contributing to revenue overperformance [23] - New customer acquisitions included significant deals with organizations like a large youth development organization and Sunnybrook Foundation, showcasing the company's strength in the nonprofit sector [9][11] Market Data and Key Metrics Changes - The company reported strong growth in the higher education vertical, with California Polytechnic State University selecting Blackbaud's solutions for its digital transformation [11][12] - The YourCause solution saw strong expansion with large customers like NASDAQ and Tyson Foods, indicating robust demand in the corporate employee engagement space [12] Company Strategy and Development Direction - The company is focused on acquiring new logos, driving innovation, and strengthening customer relationships through additional solutions and renewals [7][8] - Continued investment in innovation is a priority, with advancements in AI capabilities and product offerings like the AgenTeq AI strategy [17][80] - The company aims for mid-single-digit organic revenue growth, EBITDA growth exceeding revenue growth, and double-digit EPS growth moving forward [20][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term success, citing consistent growth and profitability [22] - The company raised its guidance for 2025, projecting revenue between $1.12 billion and $1.13 billion, reflecting strong first-half performance [27][28] - Management noted that while transactional revenue can be volatile, they do not expect the same level of overperformance in the second half of the year [42] Other Important Information - The company has reduced leverage to 2.7 times, down from 2.9 times, indicating improved financial health [25] - The impact of recent tax law changes is being analyzed, with expectations of reduced cash taxes in the near term [26][87] Q&A Session Summary Question: How is AI impacting customer conversations and budget considerations? - Management noted that AI has been a topic of interest among customers, with ongoing investments in AI capabilities and new product offerings expected to drive revenue [34][36] Question: How should investors think about transactional revenue relative to long-term growth rates? - Management indicated that while the first half saw strong transactional performance, they do not expect this to recur in the second half, and any viral giving events would represent upside [42][43] Question: What are the priorities for the new Head of North American Sales? - The new hire is expected to bring fresh ideas and best practices, enhancing the company's ability to compete and drive new customer acquisitions [49][50] Question: What is the thought process behind stock buybacks? - The company has repurchased approximately 4% of its shares and is focused on balancing stock repurchases with debt repayment, considering interest rates and market conditions [52][54] Question: How is the company approaching upsell opportunities with existing customers? - Management stated that upselling is an ongoing activity, not limited to contract renewals, with a focus on cross-selling across various customer types [67] Question: What are the implications of the recent tax law changes? - The primary impact is expected from the repeal of Section 174, which will favorably affect cash taxes related to domestic R&D expenditures [87][88]

Financial Data and Key Metrics Changes - In Q2 2025, Blackbaud generated revenue of $281 million, representing a 6.8% organic growth year over year [6][22] - Adjusted EBITDA margin improved to 38.5%, up nearly 300 basis points year over year [6][22] - Non-GAAP diluted earnings per share (EPS) increased to $1.21, up 12% year over year [6][22] - Adjusted free cash flow was $53 million, up from $36 million last year, representing an adjusted free cash flow margin of 18.9% compared to 12.7% in Q2 2024 [22] Business Line Data and Key Metrics Changes - The company highlighted strong performance in transaction solutions, contributing to revenue overperformance [22] - New customer acquisitions included significant deals with organizations like a large youth development organization and Sunnybrook Foundation, showcasing growth in the nonprofit and higher education sectors [7][10] Market Data and Key Metrics Changes - Blackbaud's YourCause solution saw strong customer additions, including large brands like NASDAQ and Tyson Foods, indicating growth in corporate engagement [11] - The company is experiencing a growing momentum in the higher education vertical, as evidenced by partnerships with institutions like California Polytechnic State University [10] Company Strategy and Development Direction - The company is focused on acquiring new logos, driving innovation, and strengthening customer relationships through additional solutions and renewals [7] - Blackbaud is investing aggressively in innovation, particularly in AI, with initiatives like the AI Everywhere strategy and the upcoming AgenTeq offerings [16][17] - The company aims for mid-single-digit organic revenue growth, EBITDA growth exceeding revenue growth, and double-digit diluted EPS growth [19][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term success, citing consistent growth and profitability [21] - The company raised its guidance for the remainder of 2025, projecting revenue between $1.12 billion and $1.13 billion, reflecting strong first-half performance [26] - Management noted that while transactional revenue can be volatile, they do not expect the same level of overperformance in the second half of the year [40] Other Important Information - The company is analyzing the tax implications of recent legislation, which is expected to reduce cash taxes in the near term [24][88] - Blackbaud's leverage decreased to 2.7 times in Q2, down from 2.9 times in the previous quarter, indicating improved financial health [23] Q&A Session Summary Question: How is AI coming up in customer conversations and budget considerations? - Management indicated that AI is a significant topic in customer discussions, with ongoing investments in AI capabilities and new product developments expected to drive revenue [31][34] Question: How should investors think about transactional revenue relative to long-term growth rates? - Management acknowledged strong transactional performance in the first half but cautioned that such overperformance may not recur in the second half, emphasizing the importance of monitoring [40] Question: What are the priorities for the new Head of North America, Bill Ford? - Management expressed optimism about Bill Ford's experience and insights, expecting him to enhance the company's ability to compete and drive new customer acquisitions [48] Question: What is the thought process behind the stock buyback strategy? - Management clarified that while stock repurchases are a priority, they are also focused on debt repayment, with a balanced approach to capital allocation [51] Question: How are contract renewals structured and what is the expected impact? - Management noted that renewals are typically higher in Q2 and Q4, with a smooth process expected as the company approaches the end of its three-year contract cycle [58] Question: What are the implications of the recent tax law changes? - Management highlighted that the repeal of Section 174 related to R&D expenditures is expected to have a favorable impact on cash taxes, although specific sizing is still under analysis [88]

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this presentation consist of, among other things, statements regarding future operating results, all of which are based on current expectations, estimates, and forecasts, and the beliefs and assumptions of the Company's management. Words such as "believes," "seeks," "expects," "may, ...

[Press Release Overview](index=1&type=section&id=Press%20Release%20Overview) [Announcement and Executive Commentary](index=1&type=section&id=Announcement%20and%20Executive%20Commentary) Blackbaud announced its Q2 2025 earnings, raising full-year guidance, with the CEO highlighting significant growth and profitability improvements since 2020 and a record Rule of 40 score, while the CFO attributed outperformance to operational execution and a robust financial model - Blackbaud announced its **Q2 2025 earnings** and **raised its full-year financial guidance**[1](index=1&type=chunk)[4](index=4&type=chunk) - CEO Mike Gianoni stated the company significantly exceeded the **Rule of 40** in Q2, reaching a **record 45.3%**, with plans to advance towards the Rule of 45[2](index=2&type=chunk)[5](index=5&type=chunk) - CFO Chad Anderson noted revenue and profitability exceeded expectations, driven by **rigorous operational execution**, **continuous productivity improvements**, and a **strong financial model**[4](index=4&type=chunk) [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) [Key Financial Metrics (GAAP & Non-GAAP)](index=1&type=section&id=Key%20Financial%20Metrics%20(GAAP%20%26%20Non-GAAP)) Blackbaud achieved robust financial performance in Q2 2025, with significant growth in non-GAAP organic and recurring revenue despite a slight GAAP total revenue decrease due to the EVERFI divestiture, demonstrating enhanced operational efficiency and profitability across key GAAP and non-GAAP metrics Q2 2025 Key Financial Data (Compared to Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | Change Rate | Notes | | :-------------------------------- | :------------- | :------------- | :--- | :----- | :--- | | **GAAP Total Revenue** | $281.4 million | $287.2 million | -$5.8 million | -2.1% | Impacted by EVERFI divestiture | | **Non-GAAP Organic Revenue** | $281.4 million | $263.5 million | +$17.9 million | +6.8% | | | **GAAP Recurring Revenue** | $275.6 million | $281.4 million | -$5.8 million | -2.0% | 98.0% of total revenue, impacted by EVERFI divestiture | | **Non-GAAP Organic Recurring Revenue** | $275.6 million | $258.0 million | +$17.6 million | +6.9% | | | **GAAP Operating Income** | $56.7 million | $42.1 million | +$14.6 million | +34.7% | Operating Margin 20.1% (+540 bps) | | **Non-GAAP Operating Income** | $94.3 million | $86.1 million | +$8.2 million | +9.5% | Operating Margin 33.5% (+350 bps) | | **GAAP Net Income** | $26.0 million | $21.8 million | +$4.2 million | +19.3% | | | **GAAP Diluted EPS** | $0.54 | $0.42 | +$0.12 | +28.6% | | | **Non-GAAP Net Income** | $58.2 million | $55.7 million | +$2.5 million | +4.5% | | | **Non-GAAP Diluted EPS** | $1.21 | $1.08 | +$0.13 | +12.0% | | | **Non-GAAP Adjusted EBITDA** | $108.5 million | $102.5 million | +$6.0 million | +5.9% | Adjusted EBITDA Margin 38.5% (+280 bps) | | **Rule of 40 Score** | 45.3% | - | - | - | | | **GAAP Net Cash from Operating Activities** | $66.9 million | $53.8 million | +$13.1 million | +24.3% | Operating Cash Flow Margin 23.8% (+510 bps) | | **Non-GAAP Free Cash Flow** | $51.5 million | $32.6 million | +$18.9 million | +58.0% | Free Cash Flow Margin 18.3% (+690 bps) | | **Non-GAAP Adjusted Free Cash Flow** | $53.1 million | $36.4 million | +$16.7 million | +45.9% | Adjusted Free Cash Flow Margin 18.9% (+620 bps) | [Company Updates and Future Outlook](index=2&type=section&id=Company%20Updates%20and%20Future%20Outlook) [Recent Company Highlights](index=2&type=section&id=Recent%20Company%20Highlights) Blackbaud achieved several key milestones in Q2 2025, including executive appointments, deepened AI strategy and product integration, a strategic partnership with Constant Contact, industry report publication, and ESG recognition - Appointed Salesforce veteran **Bill Fort** as **Senior Vice President of North America Sales**[11](index=11&type=chunk) - Unveiled the **Agentic AI vision** at the annual developer conference, aiming to enhance client efficiency in donor cultivation and fundraising operations through AI[11](index=11&type=chunk) - Showcased the **Intelligence for Good® AI strategy** in the May product update brief, emphasizing direct integration of powerful, responsible AI into products[11](index=11&type=chunk) - Partnered with **Constant Contact** to integrate leading digital marketing capabilities through **Blackbaud Raiser's Edge NXT®**, enabling social impact clients to more effectively reach and engage supporters[11](index=11&type=chunk) - Blackbaud Institute released the **2025 Status of Fundraising Report**, indicating growing recognition of technology (including AI) in the social impact sector and its positive effect on fundraising revenue growth[11](index=11&type=chunk) - Published the **2024 Impact Report** and was named one of **Newsweek's World's Most Environmental Companies for 2025**, highlighting the company's ESG commitment[11](index=11&type=chunk) [Full Year 2025 Financial Guidance](index=2&type=section&id=Full%20Year%202025%20Financial%20Guidance) Blackbaud raised its full-year 2025 financial guidance, covering key metrics such as GAAP revenue, non-GAAP adjusted EBITDA margin, non-GAAP EPS, and non-GAAP adjusted free cash flow, based on strong first-half performance - Blackbaud **raised its full-year 2025 financial guidance**, excluding the potential impact of a future "One Big Beautiful Bill Act"[10](index=10&type=chunk) Full Year 2025 Financial Guidance | Metric | Full Year 2025 Guidance | | :-------------------------------- | :------------- | | **GAAP Revenue** | $1.120 billion - $1.130 billion | | **Non-GAAP Adjusted EBITDA Margin** | 35.4% - 36.2% | | **Non-GAAP EPS** | $4.30 - $4.50 | | **Non-GAAP Adjusted Free Cash Flow** | $190 million - $200 million | | **Non-GAAP Annualized Effective Tax Rate** | Approximately 24.5% | | **Full-Year Interest Expense** | Approximately $65 million - $69 million | | **Full-Year Fully Diluted Shares** | Approximately 48.5 million - 49.5 million shares | | **Full-Year Capital Expenditures** | Approximately $55 million - $65 million (including $50-$60 million capitalized software development costs) | [Stock Repurchase Program](index=3&type=section&id=Stock%20Repurchase%20Program) As of June 30, 2025, Blackbaud's common stock repurchase program had approximately $545 million remaining authorization - As of June 30, 2025, Blackbaud's common stock repurchase program (expanded, supplemented, and reauthorized in July 2024) had approximately **$545 million remaining authorization**[15](index=15&type=chunk) [Reclassifications](index=3&type=section&id=Reclassifications) Effective 2025, Blackbaud combined "recurring revenue" and "one-time services and other revenue" into "revenue," and "recurring costs" and "one-time services and other costs" into "cost of revenue" to ensure comparability of financial statements - Effective 2025, due to the immateriality of one-time services and other revenue, the company combined **"recurring revenue"** and **"one-time services and other revenue"** into **"revenue"**[16](index=16&type=chunk) - To ensure comparability across periods, previously reported **"recurring revenue"** and **"one-time services and other revenue"** in the consolidated statements of comprehensive income have been combined to align with current period presentation[16](index=16&type=chunk) - Similarly, **"recurring costs"** and **"one-time services and other costs"** have been combined into **"cost of revenue"**[16](index=16&type=chunk) [Corporate Information and Disclosures](index=3&type=section&id=Corporate%20Information%20and%20Disclosures) [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) Blackbaud will host its Q2 2025 conference call on July 30, 2025, to discuss financial results - Blackbaud's **Q2 2025 conference call** will be held on **July 30, 2025, at 8:00 AM ET**[17](index=17&type=chunk) - Live access is available by dialing **1-877-407-3088 (US/Canada)** or via webcast on the **Blackbaud Investor Relations webpage**[17](index=17&type=chunk) [About Blackbaud](index=3&type=section&id=About%20Blackbaud) Blackbaud is a leading social impact software provider, serving nonprofits, educational institutions, corporate social responsibility departments, and individual changemakers globally, accelerating impact in fundraising, financial management, and digital giving, with multiple industry recognitions - Blackbaud (NASDAQ: BLKB) is a **leading software provider focused on powering social impact**[17](index=17&type=chunk) - Serves **nonprofit and education sectors**, companies committed to **corporate social responsibility**, and **individual changemakers**[17](index=17&type=chunk) - Its software is designed to accelerate impact in **fundraising, nonprofit financial management, digital giving, grantmaking, corporate social responsibility, and education management**[17](index=17&type=chunk) - Over **$100 billion** is raised, granted, or managed annually through the Blackbaud platform, serving **millions of users**[17](index=17&type=chunk) - Recognized by **Newsweek** as one of America's Most Responsible Companies, by **Quartz** as a Best Company for Remote Workers, and by **Forbes** as one of America's Best Employers[17](index=17&type=chunk) - As a remote-first company, Blackbaud has operations in the **US, Australia, Canada, Costa Rica, India, and the UK**, supporting users in **over 100 countries**[17](index=17&type=chunk) [Investor & Media Contacts](index=3&type=section&id=Investor%20%26%20Media%20Contacts) Provides contact email addresses for investor relations and media relations - Investor contact email: **IR@blackbaud.com**[18](index=18&type=chunk) - Media contact email: **media@blackbaud.com**[18](index=18&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements protected by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, involving projections of the company's financial condition and operating results, which are subject to risks and uncertainties, and the company undertakes no obligation to update these statements - All statements, expectations, and assumptions in this press release (other than historical information) are **forward-looking statements**, protected by the **safe harbor provisions of the Private Securities Litigation Reform Act of 1995**[20](index=20&type=chunk) - These statements involve numerous **risks and uncertainties**, including managing acquired company integration, uncertainties in existing customer business and renewals, impact of revenue mix changes on gross margins, continued success of sales growth, cybersecurity and data protection risks and related liabilities, and potential litigation[20](index=20&type=chunk) - Blackbaud undertakes **no obligation to update these forward-looking statements**, except as required by law[20](index=20&type=chunk) [Non-GAAP Financial Measures Explanation](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) Blackbaud provides non-GAAP financial information, explaining its rationale and definitions for using these metrics, including non-GAAP free cash flow, adjusted free cash flow, organic revenue growth, and Rule of 40, emphasizing their usefulness as supplements to GAAP - Blackbaud uses **non-GAAP financial measures** to analyze its operating performance, believing they supplement GAAP measures and aid investors in evaluating ongoing operational performance and trends[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - **Non-GAAP free cash flow** is defined as **cash flow from operations less capital expenditures** (including capitalized software development costs and property and equipment capital expenditures)[25](index=25&type=chunk) - **Non-GAAP adjusted free cash flow** adds cash outflows related to the **May 2020 security incident** to non-GAAP free cash flow[25](index=25&type=chunk) - **Non-GAAP organic revenue growth** and **non-GAAP organic recurring revenue growth** exclude incremental revenue from current period acquisitions and adjust for divested business revenue to provide a more comparable view of business growth performance[27](index=27&type=chunk) - The **Rule of 40** is defined as **non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin**[28](index=28&type=chunk) - **Non-GAAP adjusted EBITDA** is defined as **GAAP net income plus net interest, provision for income taxes, depreciation, amortization of intangible assets from business combinations, amortization of capitalized software development costs, share-based compensation, employee severance costs, acquisition and disposition related costs, security incident related costs, and impairment and disposition charges**[28](index=28&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Blackbaud's consolidated balance sheet shows increases in total assets and liabilities, with significant rises in restricted cash and accounts receivable, while stockholders' equity decreased Consolidated Balance Sheet Key Data (As of June 30, 2025, and December 31, 2024) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | Change Rate | | :-------------------------------- | :------------- | :------------- | :--- | :----- | | **Assets** | | | | | | Cash and Cash Equivalents | $41,566 | $67,628 | -$26,062 | -38.5% | | Restricted Cash | $870,248 | $741,884 | +$128,364 | +17.3% | | Accounts Receivable, Net | $145,237 | $83,539 | +$61,698 | +73.9% | | Total Assets | $2,629,393 | $2,495,715 | +$133,678 | +5.4% | | **Liabilities** | | | | | | Accounts Payable | $42,664 | $50,810 | -$8,146 | -16.0% | | Customer Funds Payable | $874,757 | $742,340 | +$132,417 | +17.8% | | Debt, Non-Current Portion | $1,136,112 | $1,051,110 | +$85,002 | +8.1% | | Total Liabilities | $2,541,443 | $2,353,722 | +$187,721 | +8.0% | | **Stockholders' Equity** | | | | | | Total Stockholders' Equity | $87,950 | $141,993 | -$54,043 | -38.1% | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Blackbaud achieved year-over-year growth in net income and operating income for Q2 and H1 2025, despite a slight decrease in total revenue, with improved gross profit and operating margins reflecting effective cost control and efficiency gains Consolidated Statements of Comprehensive Income Key Data (For the Periods Ended June 30, 2025) | Metric (in thousands) | Q2 2025 | Q2 2024 | Change Rate (QoQ) | H1 2025 | H1 2024 | Change Rate (YoY) | | :-------------------------------- | :------------- | :------------- | :----------- | :----------- | :----------- | :----------- | | **Revenue** | $281,382 | $287,286 | -2.1% | $552,043 | $566,536 | -2.6% | | **Cost of Revenue** | $113,633 | $124,700 | -8.9% | $228,448 | $250,906 | -8.9% | | **Gross Profit** | $167,749 | $162,586 | +3.2% | $323,595 | $315,630 | +2.5% | | **Operating Expenses** | $111,063 | $120,494 | -7.8% | $246,479 | $262,819 | -6.3% | | **Operating Income** | $56,686 | $42,092 | +34.7% | $77,116 | $52,811 | +46.0% | | **Interest Expense** | ($18,411) | ($15,715) | +17.1% | ($35,356) | ($25,991) | +36.0% | | **Income Tax Expense** | $13,413 | $7,883 | +70.1% | $14,136 | $6,427 | +119.9% | | **Net Income** | $25,980 | $21,804 | +19.2% | $30,847 | $27,050 | +14.0% | | **Diluted EPS** | $0.54 | $0.42 | +28.6% | $0.63 | $0.52 | +21.2% | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In H1 2025, Blackbaud's cash flow from operating activities decreased, but cash flow from financing activities significantly increased, primarily due to debt issuance, while investing activities cash outflow remained relatively stable Consolidated Statements of Cash Flows Key Data (For the Periods Ended June 30, 2025) | Metric (in thousands) | H1 2025 | H1 2024 | Change | Change Rate | | :-------------------------------- | :------------- | :------------- | :--- | :----- | | **Net Cash Provided by Operating Activities** | $68,329 | $118,435 | -$50,106 | -42.3% | | **Net Cash Used in Investing Activities** | ($41,333) | ($40,718) | -$615 | +1.5% | | **Net Cash Provided by Financing Activities** | $68,094 | $25,657 | +$42,437 | +165.4% | | **Cash, Cash Equivalents, and Restricted Cash at End of Period** | $911,814 | $831,108 | +$80,706 | +9.7% | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) [Non-GAAP Gross Profit and Operating Income Reconciliation](index=9&type=section&id=Non-GAAP%20Gross%20Profit%20and%20Operating%20Income%20Reconciliation) Blackbaud provides a reconciliation of GAAP gross profit and operating income to their non-GAAP counterparts, with key adjustments including share-based compensation, amortization of business combination intangibles, severance, acquisition/disposition costs, and security incident costs, significantly improving non-GAAP margins Non-GAAP Gross Profit and Operating Income Reconciliation (For the Periods Ended June 30, 2025) | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------------- | :------------- | :----------- | :----------- | | **GAAP Gross Profit** | $167,749 | $162,586 | $323,595 | $315,630 | | **Non-GAAP Gross Profit** | $178,321 | $180,602 | $343,917 | $352,083 | | **Non-GAAP Gross Margin** | 63.4% | 62.9% | 62.3% | 62.1% | | **GAAP Operating Income** | $56,686 | $42,092 | $77,116 | $52,811 | | **Non-GAAP Operating Income** | $94,330 | $86,139 | $171,828 | $158,573 | | **Non-GAAP Operating Margin** | 33.5% | 30.0% | 31.1% | 28.0% | | **Key Adjustments (Q2 2025):** | | | | | | Share-Based Compensation Expense | $27,252 | $24,286 | $49,422 | $57,856 | | Amortization of Intangible Assets from Business Combinations | $7,586 | $15,541 | $15,172 | $31,108 | | Employee Severance Costs | $2,147 | — | $2,147 | — | | Acquisition and Disposition Related Costs | $264 | $2,398 | $25,396 | $4,653 | | Security Incident Related Costs | $395 | $1,822 | $2,575 | $12,145 | - Acquisition and disposition related costs for H1 2025 included **$24.3 million** for the termination of a Washington D.C. office space lease, acquired through the **EVERFI acquisition**[38](index=38&type=chunk) - Security incident related costs primarily include **third-party service provider and consultant fees** (including legal fees), as well as **customer claims and negotiated settlements**; as of June 30, 2025, approximately **$1.6 million** in loss contingencies have been recorded[39](index=39&type=chunk) [Non-GAAP Revenue and Recurring Revenue Reconciliation](index=10&type=section&id=Non-GAAP%20Revenue%20and%20Recurring%20Revenue%20Reconciliation) Blackbaud reconciles GAAP revenue and recurring revenue to non-GAAP organic and organic recurring revenue, providing a clearer view of core business growth by excluding divested business revenue and accounting for foreign exchange impacts Non-GAAP Revenue and Recurring Revenue Reconciliation (For the Periods Ended June 30, 2025) | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------------- | :------------- | :----------- | :----------- | | **GAAP Revenue** | $281,382 | $287,286 | $552,043 | $566,536 | | **GAAP Revenue Growth** | -2.1% | - | -2.6% | - | | **Non-GAAP Organic Revenue** | $281,382 | $263,530 | $552,043 | $519,371 | | **Non-GAAP Organic Revenue Growth** | 6.8% | - | 6.3% | - | | **Non-GAAP Organic Revenue (Constant Currency)** | $279,472 | $263,530 | $550,431 | $519,371 | | **Non-GAAP Organic Revenue Growth (Constant Currency)** | 6.0% | - | 6.0% | - | | **GAAP Recurring Revenue** | $275,631 | $281,376 | $539,681 | $552,894 | | **GAAP Recurring Revenue Growth** | -2.0% | - | -2.4% | - | | **Non-GAAP Organic Recurring Revenue** | $275,631 | $257,958 | $539,681 | $507,422 | | **Non-GAAP Organic Recurring Revenue Growth** | 6.9% | - | 6.4% | - | | **Non-GAAP Organic Recurring Revenue (Constant Currency)** | $273,737 | $257,958 | $538,064 | $507,422 | | **Non-GAAP Organic Recurring Revenue Growth (Constant Currency)** | 6.1% | - | 6.0% | - | - **Non-GAAP organic revenue** and **recurring revenue** exclude revenue generated by divested businesses in prior periods to provide a more comparable view of business performance[42](index=42&type=chunk) - **Non-GAAP organic revenue growth at constant currency** is determined by converting foreign currency reporting entity revenues to U.S. dollars using comparable prior period weighted average foreign currency exchange rates, primarily impacted by **AUD, GBP, CAD, and EUR**[44](index=44&type=chunk) [Non-GAAP EBITDA, Adjusted EBITDA, and Free Cash Flow Reconciliation](index=11&type=section&id=Non-GAAP%20EBITDA%2C%20Adjusted%20EBITDA%2C%20and%20Free%20Cash%20Flow%20Reconciliation) Blackbaud provides reconciliations from GAAP net income to non-GAAP EBITDA and adjusted EBITDA, and from GAAP operating cash flow to non-GAAP free cash flow and adjusted free cash flow, illustrating the company's true operating profitability and cash generation capabilities after excluding specific non-cash and non-recurring items Non-GAAP EBITDA and Adjusted EBITDA Reconciliation (For the Periods Ended June 30, 2025) | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------------- | :------------- | :----------- | :----------- | | **GAAP Net Income** | $25,980 | $21,804 | $30,847 | $27,050 | | **Non-GAAP EBITDA** | $78,393 | $74,020 | $121,706 | $116,770 | | **Non-GAAP EBITDA Margin** | 27.9% | - | 22.0% | - | | **Non-GAAP Adjusted EBITDA** | $108,451 | $102,526 | $201,246 | $191,424 | | **Non-GAAP Adjusted EBITDA Margin** | 38.5% | - | 36.5% | - | | **Rule of 40** | 45.3% | - | 42.8% | - | | **Rule of 40 (Constant Currency)** | 44.4% | - | 42.4% | - | | **Key Adjustments (Q2 2025):** | | | | | | Net Interest | $16,443 | $12,900 | $31,733 | $21,128 | | GAAP Provision for Income Taxes | $13,413 | $7,883 | $14,136 | $6,427 | | Depreciation | $2,667 | $3,253 | $5,642 | $6,328 | | Amortization of Intangible Assets from Business Combinations | $7,586 | $15,541 | $15,172 | $31,108 | | Amortization of Capitalized Software Development Costs | $12,304 | $12,639 | $24,176 | $24,729 | | Share-Based Compensation Expense | $27,252 | $24,286 | $49,422 | $57,856 | | Employee Severance Costs | $2,147 | — | $2,147 | — | | Acquisition and Disposition Related Costs | $264 | $2,398 | $25,396 | $4,653 | | Security Incident Related Costs | $395 | $1,822 | $2,575 | $12,145 | Non-GAAP Free Cash Flow Reconciliation (For the Periods Ended June 30, 2025) | Metric (in thousands) | H1 2025 | H1 2024 | | :-------------------------------- | :------------- | :------------- | | **GAAP Net Cash Provided by Operating Activities** | $68,329 | $118,435 | | **GAAP Operating Cash Flow Margin** | 12.4% | 20.9% | | **Non-GAAP Free Cash Flow** | $39,231 | $83,925 | | **Non-GAAP Free Cash Flow Margin** | 7.1% | 14.8% | | **Non-GAAP Adjusted Free Cash Flow** | $41,704 | $89,747 | | **Non-GAAP Adjusted Free Cash Flow Margin** | 7.6% | 15.8% | | **Key Adjustments (H1 2025):** | | | | Less: Purchases of Property and Equipment | ($1,311) | ($6,118) | | Less: Capitalized Software Development Costs | ($27,787) | ($28,392) | | Add: Security Incident Related Cash Outflows | $2,473 | $5,822 |

Core Viewpoint - Blackbaud has raised its full-year 2025 financial guidance due to strong performance in the first half of the year, demonstrating significant improvement in growth and profitability since 2020 [1][4][2]. Financial Performance - For the second quarter of 2025, GAAP total revenue was $281.4 million, a decrease of 2.1% compared to the same period in 2024, primarily due to the divestiture of EVERFI. Non-GAAP organic revenue increased by 6.8% [6][29]. - GAAP recurring revenue was $275.6 million, down 2.0%, representing 98.0% of total revenue, while non-GAAP organic recurring revenue rose by 6.9% [6][29]. - GAAP income from operations was $56.7 million, with a GAAP operating margin of 20.1%, an increase of 540 basis points. Non-GAAP income from operations was $94.3 million, with a non-GAAP operating margin of 33.5%, an increase of 350 basis points [6][29]. - GAAP net income was $26.0 million, with GAAP diluted earnings per share of $0.54, up $0.12 per share. Non-GAAP net income was $58.2 million, with non-GAAP diluted earnings per share of $1.21, up $0.13 per share [6][29]. - Non-GAAP adjusted EBITDA was $108.5 million, up $5.9 million, with a non-GAAP adjusted EBITDA margin of 38.5%, an increase of 280 basis points [6][29]. Financial Guidance - The company has updated its full-year 2025 financial guidance, projecting GAAP revenue between $1.120 billion and $1.130 billion, non-GAAP adjusted EBITDA margin of 35.4% to 36.2%, and non-GAAP earnings per share of $4.30 to $4.50 [7][8]. - Non-GAAP adjusted free cash flow is expected to be between $190 million and $200 million [8]. Recent Highlights - Blackbaud's Rule of 40 score reached 45.3%, indicating strong operational performance [6][29]. - As of June 30, 2025, the company had approximately $545 million remaining under its common stock repurchase program [10]. Company Overview - Blackbaud is a leading software provider dedicated to powering social impact, serving nonprofit and education sectors, and has raised over $100 billion through its platforms annually [12].

Core Insights - Blackbaud will report its second quarter 2025 financial results on July 30, 2025, before U.S. markets open [1] - A conference call to discuss the financial results will be held at 8:00 a.m. ET on the same day [2] Company Overview - Blackbaud is a leading software provider focused on social impact, serving nonprofit and education sectors, as well as companies committed to social responsibility [3] - The company has raised, granted, or managed over $100 billion annually through its platforms, supporting millions of users in over 100 countries [3] - Blackbaud has received recognition from Newsweek, Quartz, and Forbes for its responsible business practices and employee satisfaction [3]

Core Insights - Blackbaud, Inc. (BLKB) and Constant Contact have launched an integration aimed at enhancing digital engagement in the social impact sector by embedding Constant Contact's AI-driven marketing tools into Blackbaud's Raiser's Edge NXT [1][9] Group 1: Integration Benefits - The integration allows social impact organizations to engage supporters through a unified interface, utilizing email, SMS, social media, and other digital marketing channels directly within Raiser's Edge NXT [2] - Users of Raiser's Edge NXT will benefit from improved supporter engagement through customized campaigns, with Constant Contact's AI tools facilitating rapid campaign creation, including content suggestions and scheduling [3] - The integration eliminates manual data transfers, enhancing automation, preference management, and data synchronization, thereby streamlining operations [3][6] Group 2: Product Rollout and Future Plans - The integration is being rolled out in phases, starting this month with select Raiser's Edge NXT customers, with general availability expected by early August [5] - Blackbaud plans to expand its product portfolio and accelerate product launches, focusing on cloud software solutions and advanced technologies, with investments anticipated in 2025 [7] Group 3: Market Position and Performance - Blackbaud currently holds a Zacks Rank of 3 (Hold), with its shares declining by 12% over the past year, contrasting with a 13.2% growth in the Computer – Software industry [8]

Core Viewpoint - The strategic integration between Blackbaud Raiser's Edge NXT and Constant Contact aims to enhance digital engagement for social impact organizations by combining advanced fundraising capabilities with AI-driven digital marketing tools [1][2][3]. Group 1: Integration Details - The integration will embed Constant Contact's AI-driven digital marketing platform within Blackbaud Raiser's Edge NXT, allowing users to effectively engage supporters through email, SMS, social media, and other digital marketing functions [2][5]. - This collaboration is expected to provide a holistic view of donor behavior, enabling AI-powered personalization and tailored messaging to constituents at scale [3][5]. Group 2: Benefits for Customers - Enhanced Supporter Engagement: Users can create personalized journeys for supporters using dynamic outreach campaigns tailored to individual interests, leveraging the data within Raiser's Edge NXT [7]. - Accelerated Campaign Creation: Constant Contact's platform allows for quick creation of marketing campaigns, including recommended content and communication schedules, significantly reducing the time needed to launch multi-channel campaigns [7]. - Streamlined Operations: The integration simplifies data management by eliminating manual transfers, allowing for easier automation and personalization based on supporter interactions [7]. Group 3: Rollout Information - A phased rollout of the integration will begin in July 2025 for a limited number of customers, with general availability expected in early August 2025 [6].

Group 1 - Blackbaud will host its annual tech conference, bbcon 2025, from October 6-8 in Philadelphia, featuring keynote speaker Adam Grant [1][2] - The conference aims to bring together thousands of Blackbaud users and those interested in leveraging Blackbaud's software for social impact, offering over 100 sessions led by industry experts [3] - Blackbaud is recognized as a leading software provider dedicated to social impact, serving various sectors including nonprofits and education, with over $100 billion raised or managed annually through its platforms [5] Group 2 - Adam Grant is a prominent organizational psychologist and bestselling author, known for his insights on leadership and motivation, and has a significant following on social media [2] - The conference will provide opportunities for attendees to enhance their skills, network within the Blackbaud community, and learn about upcoming innovations from Blackbaud leaders [3] - Blackbaud operates as a remote-first company with a global presence, supporting users in over 100 countries [5]

Core Insights - Blackbaud released its 13th annual YourCause CSR Industry Review, analyzing corporate social responsibility (CSR) program data and employee philanthropic behavior from over 300 companies with more than 7 million global employees [1][2] Employee Engagement and Philanthropy Trends - In 2024, employee engagement in volunteering and giving programs remained stable, with average annual employee donations at $744 and average total company matches at $730 [6] - The average annual volunteer hours per volunteer was 13 hours, with companies having less than 1,000 employees showing a 63.8% volunteer engagement rate [6] - Payroll giving had the highest engagement rate, despite offline giving contributing more dollars [6] Corporate Grant Trends - There was a notable increase in corporate grants in 2024, with the average amount per grant rising by approximately 13% and the median sum of grants per client increasing by around 38% compared to the previous year [6] Combined Programs Impact - Companies offering both giving and volunteer programs experienced higher engagement rates than those offering only one type of program, highlighting the effectiveness of combined initiatives [6]