Financial Data and Key Metrics Changes - Full year 2025 organic revenues increased by 5.5% to $1,128 million, with adjusted EBITDA of $405 million, up approximately 8% after adjusting for the impact of the EVERFI divestiture [18][19] - Adjusted EBITDA margin improved to 35.9%, up 220 basis points from 2024 [19] - Non-GAAP EPS rose to $4.45, reflecting a year-over-year increase of approximately 12% [19] - Adjusted free cash flow for 2025 was $208 million, exceeding the high end of the revised guidance range [19] Business Line Data and Key Metrics Changes - The company continues to invest in AI capabilities, enhancing product offerings and operational efficiency, which is expected to drive future growth [5][10] - The average daily usage of AI chat features grew five times since October, with over half of Raiser's Edge NXT customers utilizing machine learning-enabled donor prospecting [10] Market Data and Key Metrics Changes - Nonprofits are experiencing varying levels of stress, with some facing reduced government grants, but overall, the demand for Blackbaud's platform remains strong as customers rely more on it for donations [48] - The company has not seen any customers go out of business, indicating resilience in the market [49] Company Strategy and Development Direction - Blackbaud aims to achieve organic total revenue growth of 4%-6% from 2026 to 2030, with potential upside from new product launches [30] - The company is targeting Adjusted EBITDA growth of 6%-8% CAGR between 2026 and 2030, while expanding the Adjusted EBITDA margin to over 40% [30] - A significant focus on AI and operational efficiency is expected to drive future growth and profitability [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current economic conditions without significant adverse impacts on revenue [21] - The company anticipates a slightly tougher comparison in Q1 and Q2 of 2026 due to strong transactional revenue performance in the previous year [22] Other Important Information - The company repurchased approximately 8% of its common stock in 2025, following an 11% repurchase in 2024 [20] - A new phase of workforce strategy is being introduced, including expansion into India, which is expected to provide long-term benefits [24] Q&A Session Summary Question: Insights on AI pricing and customer adoption - Management indicated that the pricing model discussed pertains to the development agent, with expectations for future products to follow [38] Question: Customer retention and renewal trends - Renewals remain strong, with over 20% of customers opting for four-year or longer contracts, indicating confidence in the company's offerings [40] Question: Current market stress for nonprofits - Management noted that while some nonprofits are facing funding challenges, the reliance on Blackbaud's platform has increased, benefiting the company [48] Question: Contribution to long-term revenue growth - Management clarified that new AI products are not included in the long-term guidance, but there are opportunities for price increases, new logos, and cross-selling [52]

Financial Data and Key Metrics Changes - Full year 2025 organic revenues increased by 5.5% to $1,128 million [18] - Adjusted EBITDA rose approximately 8% to $405 million, resulting in an adjusted EBITDA margin of 35.9%, up 220 basis points from 2024 [19] - Non-GAAP EPS increased to $4.45, up approximately 12% year-over-year [19] - Adjusted free cash flow for the year was $208 million, exceeding the high end of the revised guidance range [19] Business Line Data and Key Metrics Changes - The company achieved its goal of becoming a Rule of 40 company two years ahead of plan, driven by operational efficiencies and product innovation [4] - The introduction of AI capabilities has significantly enhanced customer engagement and operational efficiency, with over half of Raiser's Edge NXT customers utilizing machine learning-enabled donor prospecting [10] Market Data and Key Metrics Changes - The company noted that users in its vertical markets tend to be less tech-savvy, which presents both challenges and opportunities for product adoption [6] - Nonprofits are experiencing varying levels of stress, particularly regarding government funding, but many are relying more on the company's platform for donations [48] Company Strategy and Development Direction - The company is aggressively investing in AI and cybersecurity to enhance product offerings and customer data security [5] - The strategic focus includes expanding the global workforce, particularly in India, to leverage talent and reduce costs [64] - The company aims for organic total revenue growth of 4%-6% from 2026 to 2030, with a target of Adjusted EBITDA growth at 6%-8% CAGR [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market challenges and emphasized the resilience of its customer base [48] - The company anticipates that new AI products will provide potential revenue upside, although they are not included in the current financial guidance [22] Other Important Information - The company repurchased approximately 8% of its common stock in 2025, following an 11% repurchase in 2024 [20] - The company plans to allocate at least 50% of its cumulative free cash flow from 2026 to 2030 for stock repurchases [31] Q&A Session Summary Question: Insights on AI pricing and customer adoption - Management indicated that the pricing model for the new development agent is just the first product, with more to come in the future [38] Question: Customer retention and contract renewals - Management reported strong renewals, with over 20% of customers opting for four-year or longer contracts, indicating customer confidence [40] Question: Current market stress for nonprofits - Management noted that while some nonprofits are facing funding challenges, they are increasingly relying on the company's platform for donations, which has not led to business failures [48] Question: Contribution to long-term revenue growth - Management clarified that new AI products are not included in long-term guidance, but there is a balanced contribution from price increases, new logos, and cross-selling [52]

Financial Data and Key Metrics Changes - Full year 2025 organic revenues increased by 5.5% to $1,128 million, with adjusted EBITDA rising approximately 8% to $405 million, resulting in an adjusted EBITDA margin of 35.9%, up 220 basis points from 2024 [17][18] - Non-GAAP EPS increased to $4.45, up approximately 12% year-over-year [18] - Adjusted free cash flow for the year was $208 million, exceeding the high end of the revised guidance range [18] Business Line Data and Key Metrics Changes - The company achieved its goal of becoming a Rule of 40 company two years ahead of plan, driven by operational efficiencies and product innovation, particularly in AI [4] - The average daily AI chat usage grew five times since October, with over half of Raiser's Edge NXT customers utilizing machine learning-enabled donor prospecting [9] Market Data and Key Metrics Changes - The company noted that while some customers are experiencing reduced government grants, this has not significantly impacted their business, as nonprofits are increasingly relying on the Blackbaud platform for donations [36] - The 2026 contractual revenue renewal cohort is approximately 40% larger than the previous year, which is expected to negatively impact total revenue growth by half a point to three-quarters of a point [21] Company Strategy and Development Direction - The company is focused on aggressive investment in innovation, particularly in AI capabilities, to enhance product offerings and operational efficiency [5][15] - Blackbaud plans to leverage its data moat and AI solutions to drive future growth, with a target of organic total revenue growth of 4%-6% from 2026 to 2030 [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market challenges, emphasizing that the need for their platform is increasing among nonprofits facing funding pressures [36] - The company anticipates a significant increase in free cash flow in 2026, projecting $280 million-$290 million, and plans to allocate at least 50% of cumulative free cash flow from 2026 to 2030 for stock repurchases [25][30] Other Important Information - The company has reduced its debt leverage from 2.9 times in Q1 to 2.5 times at the end of the year [18] - Blackbaud is expanding its workforce strategy, including operations in India, which is expected to provide long-term benefits [23][44] Q&A Session Summary Question: Insights on AI pricing and deployment - Management clarified that the pricing model discussed pertains to the development agent, which is the first product in a new revenue line, with more products expected in the future [32][33] Question: Current environment for nonprofits and funding stress - Management noted that while some nonprofits are experiencing reduced government grants, this has not led to significant business losses for Blackbaud, as customers are relying more on their platform [36] Question: Contribution to long-term revenue growth - Management indicated that new AI products are not included in the long-term guidance, but there are opportunities for pricing increases, new logos, and cross-selling contributing to revenue growth [38]

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]