Blackbaud (BLKB) Q4 2025 earnings summary

Executive summary

• Achieved Rule of 40 status two years ahead of plan, driven by operational efficiency, product innovation, and strong recurring revenue growth, especially in AI enablement and go-to-market improvements.

• Aggressively investing in generative and agentic AI, launching products like Blackbaud AI Chat and Agents for Good, and partnering with Anthropic to enhance customer fundraising and operational efficiency.

• Multi-year subscription model with increasing contract lengths; over 20% of customers now on four-year or longer contracts.

• Strong customer retention and cross-sell opportunities, with AI products expected to drive future upside.

• Completed divestiture of EVERFI, impacting year-over-year revenue comparisons.

Financial highlights

• FY25 non-GAAP organic revenue grew 5.5% to $1.128 billion, with Q4 2025 non-GAAP organic revenue of $295.3 million, up 4.3% year-over-year.

• Adjusted EBITDA rose 8% to $405 million, with margin expanding 220 basis points to 35.9%.

• Non-GAAP EPS increased 12% to $4.45; adjusted free cash flow was $208 million, with a margin of 18.5%.

• Repurchased 8% of outstanding shares in 2025, following 11% in 2024, and reduced common stock outstanding by 13% since Q4 2023.

• Reduced debt leverage from 2.9x to 2.5x during 2025, with $369.8 million in debt repayments.

Outlook and guidance

• 2026 organic revenue growth projected at 4%-4.5%, with revenue of $1.173-$1.179 billion.

• Adjusted EBITDA guidance of $430-$438 million, up 6%-8% year-over-year.

• Non-GAAP EPS expected at $5.15-$5.25, representing 16%-18% growth.

• Free cash flow guidance of $280-$290 million, reflecting recovery from 2025 one-time items.

• 2026 guidance excludes material AI revenue impact, viral event-based giving, and major productivity gains from internal AI use.