Core Insights - Blackbaud's CEO Michael Gianoni emphasized the central role of AI in the company's product strategy and operations, stating that the company is fully committed to AI initiatives and requires all employees to undergo AI training [1][5][7] Financial Performance - For FY2025, Blackbaud reported organic revenue growth of 5.5%, reaching $1.128 billion, with adjusted EBITDA of $405 million and a margin of 35.9% [4][8] - Non-GAAP EPS increased to $4.45, reflecting a year-over-year growth of approximately 12% after accounting for the impact of the EVERFI divestiture [3][8] - The company generated adjusted free cash flow of $208 million, exceeding the upper limit of its revised guidance [3][8] Capital Allocation - Blackbaud accelerated its share repurchase program, buying back about 8% of its outstanding common stock in 2025, following an 11% repurchase in 2024 [2][8] - Debt leverage improved, decreasing from 2.9x in Q1 to 2.5x by year-end [2][8] 2026 Guidance - The company provided guidance for 2026, projecting revenue between $1.173 billion and $1.179 billion, representing 4% to 4.5% organic growth [6][15] - Adjusted EBITDA is expected to be between $430 million and $438 million, indicating a growth of 6% to 8% year-over-year [6][15] - Non-GAAP EPS is forecasted to be between $5.15 and $5.25, marking a growth of 16% to 18% [15][19] Long-term Targets - Blackbaud aims for organic revenue growth of 4% to 6% from 2026 to 2030, with adjusted EBITDA growth of 6% to 8% CAGR and an expansion of adjusted EBITDA margin to over 40% [18] - The company plans to allocate at least 50% of cumulative free cash flow from 2026 to 2030 for stock repurchases [18] AI Initiatives - The company is rolling out generative AI features across its products, including the introduction of "Blackbaud AI Chat" and the "Blackbaud Agents for Good" initiative, which aims to enhance donor engagement [9][11] - The first product under the Agents for Good initiative is a subscription-based fundraising development agent, expected to generate new revenue streams [12][13] Customer Environment - Gianoni noted that while some customers face funding challenges, the overall environment remains stable, with no significant business closures reported among clients [22] - The company is focusing on internal productivity gains from AI and expanding operations in India to drive margin improvements [23]

Core Insights - Blackbaud is reshaping nonprofit technology with purpose-built AI, focusing on moving from systems of record to systems of intelligent action [2][3] - The company showcased innovations during its bi-annual Product Update Briefings, emphasizing the integration of AI across its product suite [2][3] Product Innovations - Blackbaud introduced the Development Agent, the first of its Agents for Good™, designed to proactively manage donor portfolios and enhance outreach [2] - Major updates to Raiser's Edge NXT include AI capabilities that streamline fundraising workflows and deepen donor engagement, such as natural language interaction with donor data [3] - The Enterprise Fundraising CRM is being modernized with enhanced usability and intelligence, providing deeper insights into donor behavior [3] Financial Management Enhancements - Financial Edge NXT is being transformed with AI-powered capabilities for invoice management and accounts payable workflows, improving accuracy and efficiency [6] - Integrated Payments enhancements allow U.S. organizations to accept contactless payments using just an iPhone, streamlining transaction processes [6] K-12 Solutions - Blackbaud is enhancing its K-12 solutions with features that simplify tuition operations, improve billing reliability, and streamline financial aid applications [6][7] - New tools in the Student Information System aim to improve grading management and student success tracking [6] Corporate Impact Tools - Blackbaud Impact Edge™ now includes expanded AI capabilities for measuring program outcomes and strategic investments [8] - YourCause GrantsConnect has launched Form Intelligence to assist grant managers in crafting impactful applications [8] Data Intelligence Improvements - Persistent Key (U.S.) is introduced for master data management, enhancing record matching and data consistency across systems [9] Fundraising Efficiency - Luminate Online and TeamRaiser are being enhanced with features that improve fundraising efficiency and donor experience, including new payment options and AI tools for content creation [10]

Financial Data and Key Metrics Changes - Blackbaud generated revenue of $281 million, representing a 5.2% organic growth year-over-year [4] - Adjusted EBITDA margin improved to 35.4%, up more than 200 basis points year-over-year [4] - Non-GAAP diluted earnings per share increased to $1.10, an 11% rise year-over-year [4] - Free cash flow was particularly strong at $125 million, up from $98 million last year, indicating a 28% growth year-over-year [16] Business Line Data and Key Metrics Changes - The company continues to focus on acquiring new logos, driving innovation, and strengthening customer relationships through additional solutions and renewals [5] - Significant new logo wins include St. Mary's College and Concordia College, with multi-year agreements signed for their fundraising goals [7][8] - The average annual recurring revenue (ARR) from new logo deals is increasing, with a minimum contract length of three years [30] Market Data and Key Metrics Changes - Annual charitable giving in the U.S. is nearing $600 billion, up more than 6% year-over-year, indicating a resilient market for Blackbaud's offerings [5] - Corporate giving has reached an all-time high, becoming the fastest-growing nonprofit revenue source over the last five years [5] Company Strategy and Development Direction - Blackbaud is focused on mid-single-digit organic revenue growth, EBITDA growth exceeding revenue growth, and double-digit diluted EPS growth [12] - The company is increasing its stock repurchase target from 5% to a range of 5.2% to 7% for 2025, reflecting confidence in its value [12] - Investments in product innovation, particularly in AI capabilities, are a priority to enhance customer engagement and operational efficiency [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to create substantial shareholder value, supported by strong year-to-date performance [12] - The anticipated cash tax benefits from recent tax law changes are expected to positively impact free cash flow through 2027 [18] - The company is committed to maintaining a balance between growth and profitability while focusing on capital allocation strategies [15] Other Important Information - The company identified a prior period non-cash error related to income tax calculations, which resulted in immaterial impacts on previously filed financial statements [19][34] - Blackbaud's operational discipline and efficiencies are yielding positive results, contributing to higher profitability [6] Q&A Session Summary Question: Customer feedback on AI and agentic functionality - Management noted excitement around AI capabilities, with 40% of customers adopting new features quickly, and plans to monetize these solutions in the near future [24][25] Question: New logo wins and contract sizes - New logo wins are showing larger average ARR deals, with contracts typically being a minimum of three years [30][31] Question: Revenue reclassification rationale - The revenue reclassification was due to an immaterial non-cash error related to income tax calculations, corrected as a best practice [32][34] Question: Monetization timeline for agentic AI - Monetization of agentic AI solutions is expected to start modestly next year, with clear ROI anticipated for customers [39][40] Question: Structural drivers for transactional revenue growth - Transactional revenue is performing well across all platforms, with no viral events impacting growth, indicating strong fundamentals [47]

Financial Data and Key Metrics Changes - Blackbaud generated revenue of $281 million, representing a 5.2% organic growth year-over-year [4] - Adjusted EBITDA margin improved to 35.4%, up more than 200 basis points year-over-year [4] - Non-GAAP diluted earnings per share increased to $1.10, an 11% rise year-over-year [4] - Free cash flow was particularly strong at $125 million, up from $98 million last year, indicating a 28% growth year-over-year [16] Business Line Data and Key Metrics Changes - The company continues to focus on acquiring new logos, driving innovation, and strengthening customer relationships through additional solutions and renewals [5] - Significant new logo wins include St. Mary's College and Concordia College, with multi-year agreements signed for their fundraising goals [7][8] - The average annual recurring revenue (ARR) from new logo deals is increasing, with a minimum contract length of three years [30] Market Data and Key Metrics Changes - Annual charitable giving in the U.S. is nearing $600 billion, up more than 6% year-over-year, indicating a resilient market for Blackbaud's offerings [5] - Corporate giving has reached an all-time high, becoming the fastest-growing nonprofit revenue source over the last five years [5] Company Strategy and Development Direction - Blackbaud is focusing on mid-single-digit organic revenue growth, EBITDA growth exceeding revenue growth, and double-digit diluted EPS growth [12] - The company is increasing its stock repurchase target from 5% to a range of 5.2% to 7% for 2025, demonstrating confidence in its value [12] - Investments in product innovation, particularly in AI capabilities, are a priority for future growth [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to create substantial shareholder value, supported by strong year-to-date performance [12] - The company anticipates continued strong performance in Q4, with a focus on driving adjusted free cash flow and returning capital to shareholders [21] - Management noted that the operational discipline and efficiencies are yielding positive results, contributing to higher profitability [6] Other Important Information - The company identified a prior period non-cash error related to income tax calculations, which resulted in immaterial impacts to previously filed financial statements [19][34] - Blackbaud's guidance for 2025 includes projected revenue in the range of $1,120 million to $1,130 million, with an anticipated EBITDA margin of approximately 35.4% to 36.2% [20] Q&A Session Summary Question: Customer feedback on AI and agentic functionality - Management noted excitement around AI capabilities, with about 40% of customers quickly adopting new features [23][24] Question: New logo wins and contract sizes - New logo wins are showing larger average ARR deals, with contracts typically being a minimum of three years [30] Question: Revenue reclassification and tax restatement - The revenue reclassification was due to an immaterial non-cash error related to income tax calculations, which was corrected as a best practice [32][34] Question: Monetization of agentic AI - Monetization of agentic AI solutions is expected to start modestly next year, with clear ROI anticipated for customers [38][40] Question: Structural drivers for higher growth in transactional revenue - Management indicated strong performance across all transaction platforms, with no viral events impacting growth [47]

Financial Data and Key Metrics Changes - Blackbaud generated revenue of $281 million, representing a 5.2% organic growth year-over-year [4] - Adjusted EBITDA margin improved to 35.4%, up more than 200 basis points year-over-year [4] - Non-GAAP diluted earnings per share increased to $1.10, an 11% rise year-over-year [4] - Free cash flow was particularly strong at $125 million, up from $98 million last year, indicating a 28% growth year-over-year [15][16] Business Line Data and Key Metrics Changes - The company reported solid contractual recurring revenue growth and continued strength in transactional recurring revenue lines [14] - New logo wins included significant contracts with St. Mary's College and Concordia College, showcasing the effectiveness of their product offerings [6][7] - The average annual recurring revenue (ARR) from new logo deals has been increasing, with a focus on mid-tier and enterprise customers [28] Market Data and Key Metrics Changes - Annual charitable giving in the U.S. is nearing $600 billion, up more than 6% year-over-year, indicating a resilient market for Blackbaud's services [5] - Corporate giving has reached an all-time high, becoming the fastest-growing nonprofit revenue source over the last five years [5] Company Strategy and Development Direction - Blackbaud is focusing on acquiring new logos, driving innovation, and strengthening customer relationships through additional solutions and renewals [5] - The company is investing in AI capabilities, with over 70 planned or available AI enhancements aimed at improving fundraising efforts [9] - The capital allocation strategy prioritizes stock repurchase, with an increase in the repurchase target from 5% to 5.2% to 7% for 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to create substantial shareholder value, supported by strong year-to-date performance [12] - The guidance for 2025 includes revenue projections of $1,120 million to $1,130 million, with organic growth at approximately 5% [19] - The anticipated EBITDA margins are projected to be between 35.4% and 36.2%, with a focus on margin expansion opportunities [20] Other Important Information - The company identified a prior period non-cash error related to income tax calculations, which resulted in immaterial impacts on previously filed financial statements [18][31] - Incremental investments of approximately $7 million in product innovation and AI development are planned for the third and fourth quarters [18] Q&A Session Summary Question: Customer feedback on AI and agentic functionality - Management noted excitement around AI capabilities, with about 40% of customers adopting new features quickly, and plans to monetize these solutions in the future [24][25] Question: New logo wins and contract sizes - Management confirmed a focus on larger ARR deals, with multi-year contracts being standard, and noted an increase in average contract sizes [28][29] Question: Revenue reclassification rationale - The revision was related to an immaterial non-cash error in tax calculations, which was corrected as part of best practices [31][32] Question: Monetization timeline for agentic AI - Management expects modest revenue from agentic AI solutions to start in 2026, with a clear ROI for customers using these agents [34][36] Question: Structural drivers for higher growth in transactional revenue - Management highlighted strong performance across all transaction platforms, with no viral events impacting growth in the quarter [41]

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]

Core Insights - Blackbaud, Inc. is focusing on artificial intelligence and innovation to drive growth, enhancing its product portfolio with AI-driven capabilities for nonprofits, educational institutions, and CSR professionals [1][9] - The company has launched several initiatives aimed at improving donor stewardship and fundraising outcomes, including advancements in AI-driven fundraising and financial management [1][2] - Blackbaud's financial outlook for 2025 has been raised to $1.120–$1.130 billion, indicating approximately 5% organic growth at the midpoint, with an adjusted EBITDA margin projected between 35.4% and 36.2% [6][9] AI and Innovation Initiatives - Blackbaud introduced major enhancements to its Impact Edge platform, incorporating advanced AI capabilities and deeper analytics for CSR reporting [4] - The company has partnered with Constant Contact to improve engagement for social impact organizations through integrated digital channels [3] - Blackbaud's Intelligence for Good strategy emphasizes the integration of responsible AI into its products, enhancing efficiency in donor cultivation and stewardship [2] Competitive Landscape - Blackbaud faces significant competition from companies like Salesforce, Oracle, and Pegasystems, which may pressure pricing and margins [7] - Competitors are also advancing their AI capabilities, with Salesforce expanding its generative AI offerings and Oracle experiencing growth in its cloud database services [8][10][11] - To maintain competitiveness, Blackbaud must continue investing in research and development, which could impact operating margins [7]

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].