Blackbaud (BLKB) Q3 2025 earnings summary

Executive summary

• Q3 2025 delivered strong non-GAAP organic revenue growth of 5.2% and margin expansion, with GAAP revenue at $281.1M, impacted by the EVERFI divestiture.

• Income from operations rose 32.6% year-over-year to $54.6M, driven by cost reductions and operational efficiencies.

• Maintained global leadership in social impact software, serving over 40,000 customers and focusing on AI-driven innovation and high retention rates.

• End markets remain resilient, with U.S. charitable giving up 6% year-over-year and corporate giving at an all-time high.

• Named #20 on Fast Company's 2025 Best Workplaces for Innovators list.

Financial highlights

• Non-GAAP organic revenue grew 5.2% in Q3 2025 to $281M–$286.6M; non-GAAP adjusted EBITDA margin improved to 35.4% (up 220 bps); non-GAAP diluted EPS rose 11% to $1.10.

• GAAP revenue declined 1.9% year-over-year due to the EVERFI divestiture; transactional recurring revenue increased by $7.7M in Q3.

• Free cash flow for Q3 was $125M, with adjusted free cash flow margin at 44.5%.

• Share repurchases totaled over 5% of outstanding shares YTD, with $514M remaining under the $800M authorization.

• Leverage ratio reduced to 2.4x in Q3 2025.

Outlook and guidance

• 2025 revenue guidance: $1.120B–$1.130B (approx. 5% organic growth at midpoint); non-GAAP EPS $4.30–$4.50; adjusted EBITDA margin 35.4%–36.2%.

• Adjusted free cash flow guidance raised to $195M–$205M, reflecting tax law benefits and innovation investments.

• Share repurchases expected to total 5.2%–7.0% of outstanding shares in 2025, with similar activity planned for 2026.

• Weighted average diluted share count projected at 48.5M–49.5M for 2025.

• Continued investment in AI, innovation, and cloud infrastructure, with a focus on operational efficiency.