Blackbaud, Inc.

What they do

Blackbaud sells cloud-based fundraising, engagement, and financial management software, along with payment and transaction services. Its products include Raiser's Edge NXT and Enterprise Fundraising CRM, plus data intelligence tools that use AI for predictive insights and donor analytics. The company operates in the US, Australia, Canada, Costa Rica, India, and the UK, serving users in over 100 countries.

Revenue drivers

• Cloud software subscriptions — Charges for use of cloud and hosted software solutions; this is the primary revenue source, with GAAP recurring revenue of $285.3 million in Q2 2026 (98.2% of total revenue).
• Payment and transaction services — Provides payment processing and transaction services to customers; this represents a secondary but significant revenue stream.
• Data intelligence and AI products — Offers data health, predictive insights, and fundraising performance tools, including AI agents; these are integrated into core software and add value, though not separately disclosed in revenue.
• Education and CSR solutions — Serves K-12 and higher education institutions with products like Student First and Blackbaud Education solutions, plus CSR and grantmaking tools; these are part of the overall software portfolio.

Recent performance

In Q2 2026, GAAP total revenue was $290.6 million, up 3.0% year-over-year, with non-GAAP organic revenue also up 3.0%. GAAP net income was $35.4 million, with diluted EPS of $0.79, up $0.24 per share. Non-GAAP adjusted EBITDA was $110.3 million, a margin of 38.0%. GAAP operating cash flow was $91.1 million, up $24.1 million from the prior year. In fiscal 2025, the company reported revenue of $1.13 billion and net income of $115.0 million, a recovery from a net loss of $283.2 million in 2024.

Strategy

Blackbaud's stated strategy centers on the 'Intelligence for Good' initiative, integrating AI across its products and internal operations. The company is investing in AI agents ('Agents for Good') and a connected, AI-first platform, aiming to improve customer outcomes and drive operating leverage. Management also emphasizes product connectivity and interoperability to streamline workflows. The company is aggressive in share repurchases, having reduced shares outstanding by about 15% since Q4 2023.

Risks

• High leverage — As of June 30, 2026, long-term debt was $1.13 billion against total assets of $2.59 billion and shareholder equity of only $67.0 million.
• Cybersecurity and data protection — The company faces significant risks from data breaches and privacy regulations, given its handling of sensitive donor and constituent data.
• AI implementation and integration — Success depends on integrating AI across products; failure to deliver expected outcomes could hurt customer retention and growth.
• Competition and market dynamics — The nonprofit software market is competitive, and economic conditions could pressure customer spending on fundraising and engagement tools.

Outlook

Management expects to finish fiscal year 2026 in the upper half of its guidance ranges for revenue, adjusted EBITDA, non-GAAP EPS, and free cash flow, with EPS and free cash flow at the high end. The company continues to invest aggressively in AI, particularly in Agents for Good solutions, which management says will help customers and improve internal productivity and profitability.