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]

Core Insights - Blackbaud, Inc. (BLKB) reported third-quarter 2025 non-GAAP EPS of $1.10, exceeding the Zacks Consensus Estimate by 2.8%, with an 11.1% year-over-year increase in earnings [1][8] - Total revenues decreased by 1.9% year over year to $281.1 million, primarily due to the divestiture of EVERFI, but still surpassed the Zacks Consensus Estimate by 0.5% [1][2] Financial Performance - Non-GAAP organic revenues increased by 5.2% on a reported basis and 4.8% on a constant-currency basis year over year [3] - Non-GAAP organic recurring revenues rose by 5.5% on a reported basis and 5.1% on a constant-currency basis [3] - Non-GAAP gross margin improved to 63% from 61% a year ago, while total operating expenses fell by 2.8% year over year to $112.9 million [4] - GAAP operating margin increased by 500 basis points to 19.4%, and non-GAAP operating margin rose by 240 basis points to 29.9% [4] Balance Sheet & Cash Flow - As of September 30, 2025, Blackbaud had total cash and equivalents of $457.4 million, down from $911.8 million as of June 30, 2025 [5] - Total debt decreased to $1 billion from $1.1 billion over the same period [5] - Cash provided by operating activities was $207.5 million, compared to $222.4 million in the prior-year quarter [6] Share Repurchase Program - Blackbaud has nearly $514 million available under its stock buyback program, which was expanded and renewed in July 2024 [9] - The company expects total share repurchases in 2025 to represent between 5.2% and 7.0% of its outstanding common stock as of December 31, 2024 [9] 2025 Outlook - Blackbaud reiterated its guidance for full-year 2025, projecting GAAP revenues between $1.120 billion and $1.130 billion, reflecting approximately 5% organic growth at the midpoint on a constant currency basis [10] - Non-GAAP adjusted EBITDA margin is expected to be in the range of 35.4-36.2%, with non-GAAP EPS anticipated between $4.30 and $4.50 [11] - Non-GAAP adjusted free cash flow for 2025 is forecasted to be in the range of $195-$205 million [11] Recent Developments - Blackbaud introduced new embedded AI capabilities across its product portfolio, marking a significant advancement towards its vision for intelligent action [13] - The company launched the 2025 Ultimate End-of-Year Fundraising Toolkit to assist organizations in maximizing fundraising success [14]

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]