Blackbaud Ticker: BLKB February 10, 2026 Forward-looking Statements 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 Compa ...

Financial Performance - GAAP total revenue for FY25 was $1.1 billion, down 2.3% year-over-year, while non-GAAP organic revenue increased by 5.5%[12] - GAAP recurring revenue was $1.1 billion, down 2.0% year-over-year, representing 98.0% of total revenue, with non-GAAP organic recurring revenue increasing by 5.8%[12] - GAAP net income for FY25 was $115.0 million, with GAAP diluted earnings per share of $2.37, an increase of $8.29 per share[12] - Non-GAAP adjusted EBITDA for FY25 was $405.3 million, up $17.3 million, with a margin of 35.9%, an increase of 220 basis points[12] - The Rule of 40 score for FY25 was 41.4%[12] - Non-GAAP free cash flow for FY25 was $203.5 million, a decrease of $25.2 million, with a margin of 18.0%, down 180 basis points[12] - Total revenue for the year ended December 31, 2025, was $1,128,365, a decrease of 2.3% from $1,154,624 in 2024[33] - Gross profit increased to $663,292 for the year ended December 31, 2025, compared to $631,426 in 2024, reflecting a growth of 5.0%[33] - Net income for the year ended December 31, 2025, was $114,970, a significant improvement from a net loss of $299,524 in 2024[33] - Operating expenses for the year decreased to $472,538 in 2025 from $902,803 in 2024, a reduction of 47.7%[33] - Cash flows from operating activities for the year ended December 31, 2025, were $265,550, down from $295,969 in 2024[35] - GAAP revenue for Q4 2025 was $295,256, a decrease of 2.3% compared to Q4 2024's $302,113[41] - Non-GAAP organic revenue for Q4 2025 was $295,256, reflecting a growth of 4.3% from Q4 2024's $283,017[41] - GAAP gross profit increased to $172,284 in Q4 2025, up from $162,530 in Q4 2024, resulting in a gross margin of 58.4%[41] - Non-GAAP income from operations for the year ended 2025 was $344,442, compared to $319,249 in 2024, with a non-GAAP operating margin of 30.5%[41] - GAAP net income for the year ended 2025 was $114,970, a significant improvement from a loss of $299,524 in 2024[46] - Non-GAAP diluted earnings per share for the year ended 2025 was $4.45, compared to $4.06 in 2024[41] Future Outlook - Blackbaud announced a financial outlook for FY26, projecting GAAP revenue between $1.173 billion and $1.179 billion[18] - Non-GAAP diluted earnings per share for FY26 is expected to be between $5.15 and $5.25[18] Stock and Capital Management - Blackbaud has approximately $961 million remaining under its stock repurchase program, with plans to repurchase 5.0% to 10.0% of outstanding common stock in 2026[16] AI and Innovation - Blackbaud partnered with Anthropic to enhance AI capabilities and showcased AI-powered innovations at product update briefings[12] Balance Sheet and Cash Flow - Total assets decreased to $2,390,682 as of December 31, 2025, from $2,496,000 in 2024, a decline of 4.2%[31] - Total liabilities decreased to $2,305,628 as of December 31, 2025, compared to $2,369,161 in 2024, a reduction of 2.7%[31] - Cash and cash equivalents at the end of 2025 were $38,914, down from $67,628 at the end of 2024, a decrease of 42.5%[35] - The company reported a basic earnings per share of $2.41 for the year ended December 31, 2025, compared to a loss of $5.92 in 2024[33] - The company’s additional paid-in capital increased to $1,391,641 in 2025 from $1,291,442 in 2024, reflecting a growth of 7.8%[31] - GAAP net cash provided by operating activities for 2025 was $265,550, down from $295,969 in 2024[52] - GAAP operating cash flow margin decreased to 23.5% in 2025 from 25.6% in 2024[52] - Non-GAAP free cash flow for 2025 was $203,547, compared to $228,769 in 2024[52] - Non-GAAP free cash flow margin declined to 18.0% in 2025 from 19.8% in 2024[52] - Non-GAAP adjusted free cash flow for 2025 was $208,187, down from $244,694 in 2024[52] - Non-GAAP adjusted free cash flow margin decreased to 18.5% in 2025 from 21.2% in 2024[52] - Non-GAAP adjustments included a $4,640 increase in Security Incident-related cash flows for 2025[52] Currency Impact - The company reported a foreign currency impact on non-GAAP organic revenue of $(3,516) for the year ended 2025[41] - The primary foreign currencies impacting financial results were the Australian Dollar, British Pound, Canadian Dollar, and Euro[48] - Non-GAAP EBITDA was calculated by translating foreign currency results to U.S. Dollars using prior period exchange rates[48] Security Incident Costs - Security Incident-related costs for the year ended 2025 amounted to $3.1 million, down from $13.7 million in 2024[38] Growth and Profitability Metrics - The Rule of 40 metric for the year ended 2025 was 39.7%, indicating a strong balance between growth and profitability[46]

Core Insights - Blackbaud reported strong financial results for FY25, achieving the Rule of 40 two years ahead of schedule, indicating a solid market leadership position and effective execution of strategic initiatives [1][2] Financial Performance - **Fourth Quarter 2025 Results**: - Non-GAAP adjusted free cash flow was $41.4 million, down $15.9 million from Q4 2024, with a margin of 14.0%, a decrease of 500 basis points [1] - GAAP total revenue was $295.3 million, down 2.3% year-over-year, primarily due to the divestiture of EVERFI [1] - Non-GAAP adjusted EBITDA was $104.5 million, up $2.3 million, with a margin of 35.4%, an increase of 160 basis points [1] - GAAP net income was $36.7 million, with diluted earnings per share of $0.76, up $7.82 per share [1] - **Full-Year 2025 Results**: - Non-GAAP adjusted free cash flow was $208.2 million, down $36.5 million, with a margin of 18.5%, a decrease of 270 basis points [2] - GAAP total revenue was $1.1 billion, down 2.3% year-over-year, with recurring revenue of $1.1 billion, down 2.0% [2] - Non-GAAP adjusted EBITDA was $405.3 million, up $17.3 million, with a margin of 35.9%, an increase of 220 basis points [2] - GAAP net income was $115.0 million, with diluted earnings per share of $2.37, up $8.29 per share [2] Financial Outlook - For FY26, Blackbaud expects non-GAAP free cash flow of $280 million to $290 million and non-GAAP diluted earnings per share of $5.15 to $5.25 [2] - GAAP revenue guidance for FY26 is projected to be between $1.173 billion and $1.179 billion [2] Recent Highlights - Blackbaud welcomed 11 startups to its Social Good Tech Accelerator and was recognized on Newsweek's America's Most Responsible Companies List for the fifth consecutive year [1] - The company announced a reauthorized and expanded $1 billion stock repurchase program, with expectations to repurchase 5.0% to 10.0% of outstanding common stock in 2026 [2]

Core Insights - Blackbaud has been recognized with three prestigious awards for its contributions to AI and responsible technology development, highlighting its leadership in the social impact sector [1][2][6] Group 1: Awards and Recognition - Blackbaud received the BIG Innovation Award for its "Intelligence for Good®" initiative, which has implemented over 70 AI capabilities across its product suite [6] - The Responsible AI Institute awarded Blackbaud as an Outstanding Organization for its ethical AI development framework and industry leadership [6] - The Stevie® Awards recognized Blackbaud's Thought Leadership Campaign of the Year for its AI Coalition for Social Impact, which aims to facilitate responsible AI adoption [6] Group 2: Company Commitment and Impact - Blackbaud's initiatives are designed to enhance the social impact sector, serving over 140,000 organizations in more than 100 countries, managing over $100 billion annually [6] - Organizations utilizing Blackbaud's AI solutions have reported a 44% increase in fundraising, demonstrating the effectiveness of its technology [6] - The company emphasizes transparency, inclusivity, and equity in its AI development, ensuring that AI serves as a positive force in the social impact sector [6]

Core Insights - Blackbaud has announced a multi-year, six-figure philanthropic contribution to Generation: You Employed, aimed at advancing workforce development and creating pathways to economic mobility globally [1][3] - The partnership will leverage AI-driven curriculum innovation to help individuals overcome barriers to meaningful employment, addressing skills gaps and limited access to quality training [2][3] Company Overview - Blackbaud is recognized as the world's leading provider of AI-powered solutions for social impact, serving various sectors including nonprofits and educational institutions [7][8] - The company has a strong commitment to responsible AI innovation, as evidenced by its initiatives like the AI Agent for Social Impact and the AI Coalition for Social Impact [4] Generation: You Employed - Generation is a global nonprofit founded in 2015, focused on equipping adults with the skills and support necessary for meaningful careers, having trained over 145,000 graduates who have earned more than $2.2 billion in wages [6] - The organization collaborates with over 22,000 employers and partners to improve the workforce system and create lasting change [6]

Core Insights - Blackbaud will report its fourth quarter and full year 2025 financial results on February 10, 2026, at 8:00 a.m. ET, which will include guidance for 2026 and discussions on long-term aspirational goals and AI innovation [1][2] Company Overview - Blackbaud is recognized as the world's leading provider of AI-powered solutions for social impact, serving various sectors including nonprofits, educational institutions, and companies focused on corporate social responsibility [3] - The company aims to enhance impact at scale through intelligent solutions for fundraising, financial management, digital giving, grant making, and education management, leveraging the largest philanthropic data set [3] - Blackbaud operates in multiple countries including the United States, Australia, Canada, Costa Rica, India, and the United Kingdom, supporting users in over 100 countries [3]

Core Insights - Blackbaud, Inc. (BLKB) is experiencing growth due to a strong product portfolio, AI-driven innovation, and margin expansion, aiming for Rule of 45 status by 2030 [1][10] - The company's shares increased approximately 12.5% in the past month, outperforming the Zacks Computer – Software industry's growth of 2.8% [1] Product Portfolio and Innovation - Blackbaud is focusing on cloud software solutions and data-driven decisions, utilizing AI, machine learning, and predictive analytics [3] - The introduction of Agents for Good, an AI suite, aims to assist social impact organizations by automating complex tasks [4] - The launch of the 2025 Ultimate End-of-Year Fundraising Toolkit is designed to enhance fundraising success for organizations [5] - A partnership with Constant Contact allows for better engagement across various digital channels within Blackbaud Raiser's Edge NXT [6] Financial Performance and Projections - For full-year 2025, Blackbaud anticipates non-GAAP EPS between $4.30 and $4.50, with an adjusted EBITDA margin projected at 35.4-36.2% [7][9] - The company expects adjusted free cash flow of $195–$205 million for 2025, supporting investments in innovation and shareholder returns [10] - Projected GAAP revenues are between $1.120 billion and $1.130 billion, indicating approximately 5% organic growth [11] Competitive Landscape and Challenges - Blackbaud faces competition from nonprofit-focused peers and large enterprises, which pressures pricing and margins [12] - Ongoing acquisitions increase integration risk and have inflated goodwill and intangibles to 55.6% of total assets as of September 30, 2025 [12] Valuation and Investment Appeal - The stock trades at a forward 12-month P/E ratio of 18.46, below the industry's average of 28.81, indicating potential undervaluation [13] - With strong cash flow, a robust product portfolio, and consistent share repurchase programs, BLKB presents an attractive investment opportunity [14]

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Summary of Blackbaud Conference Call Company Overview - **Company**: Blackbaud - **Industry**: Vertical software company focused on the global social good space, serving nonprofits, foundations, K-12 schools, and corporate social responsibility programs [2][3] Financial Performance - **Q3 2025 Highlights**: Strong performance with raised guidance in all categories, including cash flow [3][31] - **Revenue Growth**: Expected mid-single-digit organic revenue growth, higher EBITDA growth, and double-digit earnings per share growth [6][31] - **Cash Flow**: Raised cash flow guidance twice this year, with improvements expected next year [32][34] Market Opportunity - **Total Addressable Market (TAM)**: Estimated at $10 billion, focusing on mid-tier and enterprise-sized institutions [5] - **Nonprofit Sector Resilience**: U.S. giving is around $600 billion annually, growing at 2-3% per year, with a 6% growth last year [6][7] Product and Sales Strategy - **Product Pricing**: One-third of revenue from transaction fees; the rest from cloud software subscriptions with multi-year contracts [11] - **Sales Cycle**: Typically 6-8 months, with significant decisions made by executives [12] - **Growth Algorithm**: Combination of acquiring new customers and cross-selling to existing ones [14] Competitive Landscape - **Competitors**: Primarily smaller, founder-led firms and some apps built on Salesforce or Dynamics; no enterprise-level competitors [16][18] AI Integration - **AI Utilization**: Blackbaud is both a consumer and creator of AI, with over 70 AI capabilities in core solutions and plans for a fully agentic AI solution in 2026 [19][20] - **Internal AI Use**: Implementing AI for sales forecasting and lead generation, improving efficiency and productivity [25][26] Capital Allocation - **Share Buybacks**: Plans to buy back 7-8% of shares outstanding this year, with a focus on buybacks, debt reduction, and small acquisitions [28][29] Future Outlook - **2026 Expectations**: Anticipates solid growth driven by new product launches and a stable customer base; confident in being undervalued and aggressive in stock buybacks [34][35] Key Takeaways - **Recurring Revenue**: 98% of revenue is recurring, indicating stability [34] - **Market Resilience**: Proven resilience through economic downturns and COVID-19 [7][34] - **Focus on Engineering and AI**: A significant portion of the workforce is in engineering, emphasizing innovation and product development [34]

Core Insights - Blackbaud has launched a groundbreaking fundraising connector for Claude for Nonprofits in partnership with Anthropic, aimed at enhancing how mission-driven organizations utilize AI to increase their impact [1][2] - The integration allows Blackbaud customers to access over 40 years of nonprofit performance data directly within their existing platforms, improving decision-making based on real donor behavior rather than generic data [1][2] - This initiative is part of a broader strategy to leverage AI technology across Blackbaud's solutions, including the introduction of virtual team members called Agents for Good, which will help organizations optimize their workflows and focus on mission-critical tasks [3][4] Company Strategy - The partnership with Anthropic aligns with Blackbaud's goal to expand its AI capabilities, providing users with more flexibility and actionable insights to enhance their fundraising efforts [2][3] - Blackbaud plans to further develop the Anthropic connector across its nonprofit, education, and corporate solutions, indicating a commitment to continuous innovation in the social impact sector [4] - The introduction of Agents for Good is expected to create new monetization opportunities and drive growth within the Blackbaud ecosystem, positioning the company for sustained success [3][4] Market Position - Blackbaud is recognized as a leader in AI for social impact, serving a wide range of sectors including nonprofits and education, with over $100 billion raised, granted, or managed through its platforms annually [4] - The company has received accolades for its commitment to social responsibility and remote work, enhancing its reputation in the industry [5]