Blackbaud (NASDAQ:BLKB) used its fourth quarter and full-year 2025 earnings call to highlight improved profitability and cash flow, introduce 2026 guidance, and lay out multi-year financial targets alongside an expanded focus on artificial intelligence initiatives.
2025 results and capital actions
Chief Financial Officer Anthony Boor said 2025 closed “another successful year,” citing higher organic revenue growth alongside what he described as “dramatically improved profitability and cash flow.” For the full year, Blackbaud reported organic revenue growth of 5.5% to $1.128 billion. Adjusted EBITDA was $405 million, up about 8% after adjusting for the estimated impact of the EVERFI divestiture, and adjusted EBITDA margin was 35.9%, up 220 basis points from 2024.
Blackbaud also emphasized capital allocation, including a stepped-up pace of share repurchases. Boor said the company repurchased about 8% of its common stock outstanding in 2025, following 11% repurchased in 2024. He added that debt leverage declined from 2.9x in the first quarter to 2.5x at year-end.
AI strategy and new product initiatives
Chief Executive Officer Michael Gianoni framed AI as central to Blackbaud’s product roadmap and internal operations, addressing what he called a key industry question about whether AI will help or hurt “system-of-record vertical software firms.” Gianoni said the company is “all in on AI,” noting that every employee is required to complete AI training.
On the product side, Gianoni said Blackbaud has introduced generative AI features across multiple products and released “Blackbaud AI Chat” at the end of 2025 to provide contextual responses and drive actions inside its platform. He highlighted increased usage, saying average daily AI chat usage grew five times since October. Gianoni also pointed to machine learning-enabled donor prospecting, saying more than half of Raiser’s Edge NXT customers have the capability enabled and that it generates nearly 30 billion predictions annually.
Gianoni emphasized what he described as a “data moat” built on philanthropic data processed in real time, benchmark data from the Blackbaud Institute, licensed datasets, and specialized philanthropic datasets such as Blackbaud Giving Search. He said the data is governed with cybersecurity and AI governance investments and is not publicly available on the internet for large language models to access.
Looking forward, Gianoni described a move toward “agentic” AI via an initiative called “Blackbaud Agents for Good,” introduced at bbcon in October. He described agentic virtual team members that can take on tasks within governance oversight. The first planned product is a “fundraising development agent” designed to help organizations engage donors they otherwise lack capacity to reach. Gianoni gave an example of a university with 190,000 alumni where the fundraising team focuses on the top 10,000, with the agent targeting the remaining 180,000 through communications channels including email and text.
He said the development agent will be a “new revenue line” for Blackbaud, using an annual subscription model with multi-year contracts. While he said it is “a bit early,” Gianoni expects pricing “in the tens of thousands per year” and noted the company has “thousands of existing customers,” framing the opportunity as both cross-sell and new-logo. He added that donations raised by the agent could be processed through integrated payments, potentially increasing transactional revenue. Gianoni said the development agent is producing results with early adopters and is expected to be fully commercially available later in the year.
During Q&A, Gianoni clarified that his pricing comments applied specifically to the first agent product, and he said additional products are expected to come through the Agents for Good catalog.
2026 outlook and assumptions
For 2026, Boor said guidance assumes no material changes in macroeconomic conditions or foreign exchange rates, no viral event-based giving, and “no meaningful impact to 2026 revenue from AI products,” which he characterized as potential upside. He also said the guidance assumes no significant productivity gains from internal AI use.
Blackbaud guided to revenue of $1.173 billion to $1.179 billion, representing 4% to 4.5% organic growth. On profitability, the company forecast non-GAAP adjusted EBITDA of $430 million to $438 million, implying 6% to 8% year-over-year growth. The company also guided to non-GAAP EPS of $5.15 to $5.25, which Boor said would represent 16% to 18% growth and would be the first time crossing $5 in EPS.
Free cash flow guidance for 2026 was $280 million to $290 million. Boor attributed the step-up in part to moving past roughly $60 million of one-time items and working capital fluctuations that negatively affected 2025 free cash flow. He also said 2026 guidance assumes a net positive cash impact of about $10 million to $15 million from cash tax savings related to the Omnibus Appropriations Act, partially offset by expenses tied to the company’s global workforce expansion.
Additional guidance assumptions included:
- Non-GAAP effective tax rate of 24.5%
- Interest expense of about $62 million to $66 million (versus $68 million in 2025)
- Fully diluted shares of about 45 million to 46 million (versus 48.5 million in 2025)
- Capital expenditures of about $60 million to $70 million, including $52 million to $62 million of capitalized software development costs
Boor also discussed dynamics within revenue growth. He said transactional recurring revenue rose nearly 9% in 2025, which he described as slightly above the historical 8% CAGR from 2020 to 2024, and the 2026 guide assumes transactional growth closer to historical norms. He also said the 2026 contractual revenue renewal cohort is about 40% larger than last year and is expected to reduce total revenue growth by roughly 0.5 to 0.75 percentage points.
Long-term targets through 2030
Gianoni said Blackbaud achieved “Rule of 40” status two years ahead of plan and used the call to lay out targets for 2026 through 2030. The company is targeting organic total revenue growth of 4% to 6% over that period, with potential upside tied to viral events and new product launches such as Agents for Good. It is also targeting adjusted EBITDA growth of 6% to 8% CAGR and expanding adjusted EBITDA margin to “40%+.”
On capital allocation, management reiterated a focus on buybacks. Boor said the company anticipates using at least 50% of cumulative free cash flow from 2026 to 2030 for stock repurchases, while also noting flexibility to allocate capital to additional repurchases, debt repayment, or “synergistic tuck-in M&A.” In Q&A, management said share repurchase remains the top priority, while small, founder-led tuck-in acquisitions remain an option.
The company also set a goal for non-GAAP EPS CAGR of “13%+” between 2026 and 2030, citing the midpoint of 2026 guidance as an initial step toward that trajectory.
Customer environment and margin expansion levers
In response to a question about nonprofit funding stress, Gianoni said the most significant stress test for Blackbaud’s market was COVID, when many customer organizations closed temporarily. He acknowledged some customers are receiving less or no government grants, but said that when that happens, they “rely on us even more” as a platform for donations. He said the company has not seen customers go out of business and characterized the environment as not being an issue for customers based on what Blackbaud is seeing.
Asked about drivers of margin expansion, management pointed to three areas discussed on the call: internal productivity gains from AI use cases, workforce strategy including expansion of operations in India (with Gianoni noting a shift away from third-party relationships), and the planned closure of the last two small data centers.
Blackbaud said it will participate in several investor events in February and March, according to management’s closing comments.
About Blackbaud (NASDAQ:BLKB)
Blackbaud, Inc is a leading provider of cloud software, services and data intelligence solutions designed specifically for the social good community. The company’s main offerings include fundraising and relationship management platforms, financial management systems, grant and award management tools, and advanced analytics. Its flagship products—such as Raiser’s Edge NXT, Blackbaud Financial Edge NXT and Blackbaud NetCommunity—help nonprofit organizations, educational institutions, healthcare providers and foundations streamline donor engagement, optimize financial operations and measure program impact.
Founded in 1981 and headquartered in Charleston, South Carolina, Blackbaud has grown from a small technology startup into a global specialist in nonprofit software.
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