Blackbaud Stock Earnings Reports

Blackbaud reported a strong Q3 2025: revenue of $281M (organic growth 5.2%), adjusted EBITDA margin of 35.4% (up ~220 bps YoY), non-GAAP EPS of $1.10 (up 11% YoY) and very strong adjusted free cash flow of $125M (up 28% YoY). Management reiterated full-year 2025 guidance (revenue $1.120B–$1.130B; non-GAAP EPS $4.30–$4.50) while raising adjusted free cash flow guidance to $195M–$205M due primarily to expected cash tax savings from recent tax legislation. The company is investing incrementally (~$7M in Q3–Q4) in AI and agentic AI (“Agents for Good”), beginning monetization this quarter with expected modest revenue in 2026 and a larger ramp thereafter. Operational levers highlighted include margin expansion via infrastructure optimization, productivity gains from AI, continued transactional revenue strength across three payment platforms, and growing average ARR from larger, multiyear deals (minimum contract term now generally 3 years, with many 4+ years). Capital allocation priorities remain buybacks (increasing 2025 repurchase target to 5.2%–7%), continued share reduction (nearly 2M shares repurchased through Q3, ~10% reduction since Q4 2023), debt paydown optionality, and selective tuck-in M&A. Financial health notes: leverage improved to ~2.4x, one-time working capital headwinds (~$60M) expected in 2025 not to repeat in 2026, and an immaterial prior-period tax accounting correction disclosed.