BLKB - Blackbaud, Inc.

Blackbaud provides Raiser's Edge NXT and Blackbaud SKY cloud software platforms purpose-built for nonprofit fundraising, donor management, financial accounting, and grant tracking. The business model is nonprofit and social sector SaaS with multi-year subscription contracts, serving universities, hospitals, faith organizations, and K-12 schools. Revenue is approximately $1.1B annually, concentrated in North America with growing international presence in the UK and Australia.

Past Year Trends

• Blackbaud grew full-year 2025 organic revenue 5.5% to $1.128 billion while expanding non-GAAP adjusted EBITDA margin 220 basis points to 35.9% ($405 million), achieving its self-imposed Rule of 40 target two years ahead of the original schedule. (Bullish)
• Transactional recurring revenue grew nearly 9% in FY2025, above the company's historical 8% CAGR for that stream, as payment-processing volumes through Blackbaud's integrated giving solutions accelerated; GAAP recurring revenue reached 98.5% of total revenue. (Bullish)
• Blackbaud repurchased 2,707,953 shares for $174.5 million during 2025 and in December 2025 its board expanded the total buyback authorization from $800 million to $1 billion, signaling confidence in free cash flow generation and reducing share count materially. (Bullish)

Next Year Trends

• Blackbaud's FY2026 guidance calls for organic revenue growth of only 4%–4.5% (to $1.173–$1.179 billion), a deceleration from 2025's 5.5%, which could disappoint investors expecting sustained acceleration given the Rule of 40 achievement narrative. (Bearish)
• The company has embedded 70+ AI capabilities and launched its first agentic product, the Development Agent, with Raiser's Edge NXT customers already generating roughly 30 billion AI predictions annually, creating a concrete upsell and retention lever as AI tiers are priced into renewals in 2026. (Bullish)
• Residual legal and regulatory exposure from the May 2020 ransomware data breach continues to generate cash outflows and potential incremental settlement costs; unresolved state attorney general actions or class-action proceedings could crystallize additional charges against FY2026 free cash flow, which is guided at $280–$290 million. (Bearish)

Red Flags

[Securities Fraud / Investigation] SEC charged Blackbaud with making misleading disclosures about a 2020 ransomware attack — the company publicly stated that donor bank account numbers and Social Security numbers had not been exfiltrated, but internally learned within days that they had been; Blackbaud settled for $3 million. — U.S. Securities and Exchange Commission, March 2023

[Financial Restatement / Auditor Issue] Blackbaud restated consolidated financial statements for fiscal years 2004, 2005, and 2006 due to misapplication of revenue recognition methodology (monthly convention instead of actual-days basis), resulting in a reduction to retained earnings. — Blackbaud SEC Filing / 10-K Restatement, 2007