Blackbaud, Inc. Q4 FY2025 earnings call

• Achieved becoming a Rule of 40 company 2 years ahead of plan due to operating plan focused on efficiencies, product innovation (including AI enablement), go-to-market programs, and social impact focus. • Invests aggressively in innovation for product enhancements, including generative and agentic AI. Products help customers raise money, increase efficiency, and focus on missions. • Has 45 years of domain expertise, serves as system of record for social impact sector with intuitive solutions. • Invested in cybersecurity and AI governance. • Blackbaud AI Chat is industry-leading, embedded in systems of record with unique data. • Blackbaud Agents for Good introduced, with first being a fundraising Development Agent that offers new revenue streams and cross-sell opportunities. • Internally uses AI in sales, contract renewals, quality assurance, and personal productivity, showing significant impact on internal productivity.

No specific breakdown of product segments by revenue contribution was detailed in the transcript.

• 2026 organic revenue growth projected at 4%-4.5%, with revenue range $1.173B-$1.179B. • Non-GAAP adjusted EBITDA expected $430M-$438M (6%-8% growth YoY). • Non-GAAP EPS range $5.15-$5.25 (16%-18% growth YoY). • Free cash flow guided $280M-$290M. • Long-term (2026-2030) aspirational goals: 4%-6% organic revenue growth, adjusted EBITDA CAGR 6%-8% with margin >40%, EPS CAGR 13%+, and 50%+ of cumulative free cash flow from 2026-2030 for stock repurchases.

• Comments contain forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from projected. Refer to SEC filings for more info.

Q: Congrats on the strong quarter. Double-click on AI comments, pricing, cross-sell, and customer retention.

A: Michael Gianoni mentioned the Development Agent is a new revenue line, over 20% of customers on 4-year+ contracts, renewals remain strong with a bigger cohort in 2026.

Q: About nonprofit stress and top line CAGR contribution from new logos, pricing, cross-sell.

A: Chad Anderson noted nonprofits' resiliency post-COVID, Michael Gianoni said long-term numbers don't include new AI products yet, include price increases, new logos, cross-selling, and transaction revenue.

Q: Focus on M&A and leverage target through 2030.

A: Michael Gianoni said share repurchase is top priority, tuck-in M&A still on the table; Chad Anderson mentioned continuing to delever but no new specific target stated.

Q: Key margin expansion catalysts and timing.

A: Michael Gianoni cited internal AI use for productivity/innovation, global workforce strategy in India (moving away from third-party relationships), and closing small data centers as key catalysts.