Blackbaud(US:BLKB)2026-02-18 22:06Stock Repurchase and Financial Management - The company announced an increase in its expected stock repurchase range for fiscal year 2025 to between 7.0% and 8.5% of outstanding common stock as of December 31, 2024, with $214.0 million used to repurchase 3,337,844 shares in 2025, representing approximately 7.9% of outstanding stock [39]. - As of December 31, 2025, $960.6 million remains available for stock repurchases, with plans to repurchase between 5.0% and 10.0% of outstanding common stock in 2026 [39]. - The company anticipates utilizing at least 50% of its free cash flow from 2026 to 2030 for stock repurchases [39]. - The company repurchased $217.2 million of its common stock in 2025, a decrease from $418.0 million in 2024 [358]. - The stock repurchase program was expanded to $1.0 billion, with $960.6 million remaining available for repurchases as of December 31, 2025 [361]. - The company expects total capital expenditures for 2026 to be between $60.0 million and $70.0 million [355]. - The net leverage ratio as of December 31, 2025, was 2.52 to 1.00, below the maximum requirement of 3.75 to 1.00 [366]. - Expected future interest payments on debt are approximately $209.5 million over the life of the debt obligations [371]. AI and Technology Integration - The company is focused on enhancing customer experience through AI-powered solutions, integrating payment services, analytics, and business intelligence into its offerings [41]. - AI is a core pillar of the company's long-term business strategy, with ongoing development of AI features to improve operational efficiency and decision-making [49]. - The company has introduced generative AI features across multiple products to enhance customer engagement and streamline workflows [47]. - Blackbaud Raiser's Edge NXT® is highlighted as the first and only all-inclusive cloud fundraising and relationship management solution, integrating various functionalities to enhance user experience [57]. - The company’s data intelligence solutions provide predictive insights and fundraising performance metrics, helping nonprofits optimize their strategies [52]. - Blackbaud Financial Edge NXT® is recognized as the market-leading solution for fund accounting, ensuring compliance and transparency for nonprofit organizations [64]. - The company emphasizes its commitment to responsible AI development, monitoring regulatory developments to mitigate ethical and legal issues [50]. - Blackbaud's technology strategy includes leveraging multiple clouds (AWS and Azure) for high reliability and security, enabling rapid innovation [92]. - The company emphasizes AI-powered solutions, with a commitment to responsible AI adoption through initiatives like the AI Literacy Program launched in 2025 [99]. Employee Engagement and Corporate Responsibility - Blackbaud employed approximately 2,800 professionals worldwide as of December 31, 2025, with no union representation [94]. - Approximately 91% of employees value Blackbaud's commitment to social responsibility, driving engagement and service quality [95]. - Employee participation in affinity groups grew by 5% in 2025, engaging 45% of the global workforce [101]. - The company has achieved carbon neutrality annually since 2021 and was recognized by Newsweek as one of the World's Greenest Companies in 2025 [101]. Financial Performance Metrics - GAAP revenue for 2025 was $1,128.4 million, a decrease of 2.3% from $1,154.6 million in 2024 [324]. - Non-GAAP organic revenue for 2025 was $1,128.4 million, reflecting a growth of 5.5% compared to $1,069.1 million in 2024 [329]. - Non-GAAP net income for 2025 was $215.5 million, compared to $210.0 million in 2024, indicating a slight increase [324]. - Non-GAAP adjusted EBITDA for 2025 was $405.3 million, with a margin of 35.9% [334]. - The Rule of 40 metric for 2025 was 41.4%, combining non-GAAP organic revenue growth and non-GAAP adjusted EBITDA margin [334]. - GAAP gross profit for 2025 was $663.3 million, with a gross margin of 58.8%, up from 54.7% in 2024 [324]. - Non-GAAP gross profit for 2025 was $702.7 million, with a gross margin of 62.3% [324]. - GAAP net income for 2025 was $115.0 million, a significant recovery from a loss of $299.5 million in 2024 [334]. - Non-GAAP organic recurring revenue for 2025 was $1,106.2 million, representing a growth of 5.8% from $1,045.7 million in 2024 [329]. - Non-GAAP free cash flow for 2025 was $203.5 million, down from $228.8 million in 2024, representing an 11.0% decrease [342]. - Cash and cash equivalents decreased by 42.5% to $38.9 million in 2025 from $67.6 million in 2024 [347]. - Total carrying value of debt increased by 3.2% to $1.1 billion in 2025 compared to $1.075 billion in 2024 [347]. Revenue and Deferred Revenue Insights - Deferred revenue increased by 3.1% from $360.6 million in 2024 to $371.8 million in 2025, with the current portion rising by 2.9% [309]. - The increase in deferred revenue was primarily due to billings related to contract renewals and new subscription sales of cloud solutions [311]. - Fluctuations in foreign currency exchange rates increased total revenue by $3.5 million and income from operations by $2.1 million during 2025 [376]. - The accumulated currency translation adjustment was a loss of $3.8 million as of December 31, 2025, compared to a loss of $12.7 million as of December 31, 2024 [375]. Legal and Compliance Matters - The company has completed required improvements to its cybersecurity programs and tools as part of legal settlements [374]. - The company has not made any material changes in its accounting methodology for revenue recognition during the year ended December 31, 2025 [380]. - The company made assumptions in estimating future cash flows and fair values, including annual revenue growth rates and discount rates reflecting risk [398]. - No significant non-recurring fair value adjustments were made to long-lived assets or intangible assets during 2025 [399]. - The company does not anticipate material changes in future estimates or assumptions for assessing impairment losses [400]. - If actual results differ from estimates, the company may face impairment charges that could adversely impact its financial position [400]. - Recently issued accounting pronouncements may affect the company's financial position and results of operations when adopted [401].