Blackbaud Q1 Earnings Call Highlights

Key Points

• AI commercialization is front and center: Blackbaud launched its first agentic AI product, the Blackbaud Fundraising Development Agent, to general availability and is positioning it as a new subscription revenue line (pricing “in the tens of thousands” annually) with cross-sell and payments-driven transactional upside.
• Solid Q1 financials and active buybacks: Q1 organic revenue rose 4.2% to $281M, non-GAAP EPS jumped 20% to $1.14 and non-GAAP EBITDA was $99M, while free cash flow increased to $37M and the company repurchased roughly 4.5% of shares in the quarter (about 14% since Q4 2023).
• Guidance reaffirmed but back‑loaded with near-term AI spend: Management reiterated full-year guidance and long-term 2026–2030 targets (4–6% organic revenue growth, 6–8% adjusted EBITDA growth, 40%+ margin), but expects results to be weighted to the back half of 2026 and warned of a slight Q2 adjusted EBITDA decline due to planned AI investments.

Blackbaud NASDAQ: BLKB executives emphasized product innovation—particularly around generative and “agentic” AI—alongside continued focus on efficiency and capital returns as the company reviewed first-quarter 2026 results and reiterated its full-year outlook.

Management highlights AI roadmap and early commercialization

CEO, President and Vice Chairman Mike Gianoni said the company delivered “solid execution against our operating plan to start 2026,” pairing operating efficiency with “a strong pace of product innovation.” He repeatedly highlighted AI enablement as central to both customer-facing capabilities and Blackbaud’s internal operations, pointing to investments in “generative and agentic AI capabilities” and ongoing work on governance and cybersecurity.

Gianoni said Blackbaud’s first agentic AI offering—the Blackbaud Fundraising Development Agent—reached general availability in the first quarter “ahead of schedule,” though he characterized commercialization as still in early stages and potential upside as the company makes guidance and investment decisions. He described “Agents for Good” as a new product category, with the Development Agent as the first release and “many” more planned across the portfolio.

On adoption and data, Gianoni said more than half of Raiser's Edge NXT customers use machine learning-enabled donor prospecting, which he said generates “nearly 30 billion predictions annually.” He also described Blackbaud AI Chat as embedded within the company’s systems of record and leveraging customer-permissioned data in a governed environment.

Development Agent positioned as new revenue line

Gianoni framed the Fundraising Development Agent as a new revenue line with an annual subscription model similar to other Blackbaud products. He said it is “still early,” but the company expects pricing “in the tens of thousands per year,” and expects to cross-sell subscriptions to “thousands of existing customers,” in addition to new logo sales.

He added that donations raised by the Development Agent would be processed through Blackbaud’s integrated payments platform, which he said could drive additional transactional revenue. Gianoni said early adopter customers are already seeing results and that the company’s webinars and sales events for existing customers were “oversubscribed” with enthusiastic reception.

Q1 results: organic revenue up 4.2%, EPS up 20%

EVP and CFO Chad Anderson said the company balanced cost management with growth opportunities and innovation, while maintaining a “subscription-led” approach and “prudent expectations” for transactional revenue, which he noted can be variable quarter to quarter. Blackbaud’s guidance philosophy, he said, assumes performance consistent with historical patterns and “does not include any assumption for viral giving events.”

Anderson reported:

• Q1 organic revenue grew 4.2% to $281 million.
• Non-GAAP adjusted EBITDA was $99 million, up $7 million, with about a 1 percentage point improvement in adjusted EBITDA margin.
• Non-GAAP EPS increased to $1.14, up 20% from $0.95 a year earlier.
• Free cash flow rose nearly $50 million year over year to $37 million.

Anderson also said the company continued share repurchases in the quarter. Including the net share settlement of employee stock compensation, he said Blackbaud bought back approximately 4.5% of shares outstanding at the end of 2025.

Guidance reaffirmed; AI investments to affect quarterly cadence

Based on first-quarter performance and the company’s view of the operating environment, Anderson said Blackbaud is reaffirming the full-year guidance ranges and assumptions previously provided in February. He reiterated that the company expects 2026 quarterly performance—including revenue growth and profitability—to be “heavily weighted to the back half of the year, and particularly the fourth quarter.”

During the Q&A, Anderson added a modeling note tied to AI spending: while guidance is reaffirmed for the year, the company expects adjusted EBITDA dollars to decline slightly year over year in the second quarter due to planned AI investments in customer-facing products and internal operations. Gianoni emphasized the comment was about quarterly timing rather than the full year.

Customer wins, longer contracts, and capital allocation priorities

Gianoni said Blackbaud continues to see a mix of new customer wins and expansion selling to existing customers, and noted that “over 20%” of customers are on four-year or longer contract terms. He cited examples of new logos and competitive displacements across verticals, including private K-12 schools purchasing a “total school solution,” a performing arts center adopting Financial Edge NXT and Blackbaud Advisory+, a veterans organization adopting an end-to-end fundraising solution, and a U.K.-based nonprofit purchasing Raiser's Edge NXT as part of a broader digital transformation.

Pressed on new logo momentum, Gianoni described how sales teams are organized by vertical and further split between “back-to-base sales and new logo sales.” He also said one first-quarter deal was “one of the largest deals in our history,” describing it as a five-year enterprise agreement with a large nonprofit that purchased “pretty much the product portfolio.”

On longer-term goals, Gianoni reiterated the company’s targets from 2026 through 2030, including organic total revenue growth of 4% to 6% annually, adjusted EBITDA growth of 6% to 8% annually with adjusted EBITDA margin expanding to 40%+, and a non-GAAP EPS CAGR goal of 13%+ supported in part by share repurchases. He said the company expects to deploy 50%+ of cumulative free cash flow generated between 2026 and 2030 toward repurchases, and said Blackbaud has reduced common shares outstanding by approximately 14% since Q4 2023.

Anderson said the company sees “tremendous optionality” for capital allocation depending on market conditions, including additional repurchases, debt repayment, or “synergistic tuck-in M&A.”

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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