Earnings release
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Blackbaud Announces 2026 Third Quarter Financial Results October 28, 2026 Blackbaud Expands AI Leadership Through Numerous Innovation Announcements at bbcon User Conference CHARLESTON, S.C., Oct. 28, 2026 /PRNewswire/ -- Blackbaud (NASDAQ: BLKB), the world's leading provider of AI-powered solutions for social impact, today announced financial results for its third quarter ended September 30, 2026. "Innovation continues to drive our clear market leadership and a widening competitive moat," said Mike Gianoni, president, CEO and vice chairman of the board of directors, Blackbaud. "As demonstrated at our recent bbcon conference in September, we continue to make significant investments in AI, empowering our customers to deepen constituent relationships, raise more money and operate more efficiently. For investors, we believe Blackbaud is a sound investment choice that has the potential to create shareholder value—a belief that is supported by our strong 2026 year-to-date financial results and accelerating pace of innovation. I continue to be excited about the company's momentum in the near, mid and long term." Third Quarter 2026 Results Compared to Third Quarter 2025 Results: GAAP total revenue was $292.6 million, up 4.1% and non-GAAP organic revenue increased 4.1%. GAAP recurring revenue was $287.0 million, up 4.1% and represented 98.1% of total revenue. Non-GAAP organic recurring revenue increased 4.1%. GAAP income from operations was $60.0 million, with GAAP operating margin of 20.5%, an increase of 110 basis points. Non-GAAP income from operations was $94.6 million, with non-GAAP operating margin of 32.3%, an increase of 240 basis points. GAAP net income was $46.1 million, with GAAP diluted earnings per share of $1.02, up $0.04 per share. Non-GAAP net income was $61.2 million, with non-GAAP diluted earnings per share of $1.36, up $0.26 per share. Non-GAAP adjusted EBITDA was $111.1 million, up $11.4 million, with non-GAAP adjusted EBITDA margin of 38.0%, an increase of 260 basis points. Rule of 40 score was 42.1%. GAAP net cash provided by operating activities was $141.7 million, an increase of $2.5 million, with GAAP operating cash flow margin of 48.4%, a decrease of 110 basis points. Non-GAAP free cash flow was $126.0 million, an increase of $2.8 million, with non-GAAP free cash flow margin of 43.1%, a decrease of 70 basis points. "Blackbaud continues to be well-positioned for long-term success," said Chad Anderson, executive vice president and CFO, Blackbaud. "Our strong results reflect our execution discipline, ongoing productivity improvements, and balance sheet optimization. We remain committed to providing investors an attractive financial model balanced across growth in revenues, earnings, and cash flows, along with a prudent and purposeful capital allocation strategy. Year-to-date we have repurchased more than 7% of our common stock outstanding since the end of 2025 while also reducing our leverage ratio from 2.7x in Q1 to 2.3x in Q3. We have a lot to be proud of and a lot more to look forward to in Q4 2026 and beyond." An explanation of all non-GAAP financial measures referenced in this press release, including the Rule of 40, is included below under the heading "Non-GAAP Financial Measures." A reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release. Recent Company Highlights At bbcon 2026: Blackbaud introduced Platform for Good™ , its unified operating system for social impact, bringing the company's products, data, AI, workflows and ecosystem together on a shared architecture to help organizations identify opportunities, expand capacity and move from information to action with greater confidence. Blackbaud also announced a broad portfolio of innovations across fundraising, marketing, financial management and education designed to strengthen the connected value of the platform. Blackbaud also unveiled Lantern™ , the first domain-specific language model purpose-built to optimize fundraising intelligence. Developed through a strategic collaboration with Databricks, Lantern is built on Blackbaud's four decades of experience in fundraising workflows, decisions, and results, so it understands the rhythms of fundraising and can illuminate opportunities that might otherwise go unseen. Starting in 2027, Lantern will be embedded within the Platform for Good and will begin powering select Blackbaud Raiser's Edge NXT® and Agents for Good™ capabilities. In addition, Blackbaud shared updates on its expanding family of Agents for Good , including advancements to the Development Agent and the introduction of the Data Health Agent, a continuous data steward designed to detect and address data issues through review-and-approve workflows. Blackbaud also previewed agentic experiences for finance and education. BILL and Blackbaud announced a strategic partnership to simplify the accounts payable process for nonprofit and education finance teams, embedding BILL's business payments network and payment-processing capabilities into
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Blackbaud Financial Edge NXT® Payment Assistant™. The connected experience is designed to support finance teams from invoice and approval through payment and reconciliation, reducing manual work within the financial management workflow. Blackbaud expanded the availability of Expedited Giving and Expedited Giving+ within its YourCause® from Blackbaud® solutions, accelerating how corporate and employee donations reach nonprofits. Expedited Giving delivers donations 90% faster than the industry average, while Expedited Giving+ is the industry's fastest option, enabling direct-to-nonprofit donations in near real time leveraging Blackbaud Integrated Payments. Blackbaud announced new integrations with Microsoft 365 Copilot and Intuit Mailchimp, connecting Raiser's Edge NXT to preferred technologies and giving users more ways to work, with best-in-class experiences. Visit www.blackbaud.com/newsroom for more information about Blackbaud's recent highlights. Financial Outlook Blackbaud today reaffirmed its 2026 full year financial guidance and expects to finish in the upper half of the range across all four key metrics: GAAP revenue of $1.173 billion to $1.179 billion Non-GAAP adjusted EBITDA of $430 million to $438 million Non-GAAP diluted earnings per share of $5.15 to $5.25 Non-GAAP free cash flow of $280 million to $290 million Included in its 2026 full year financial guidance are the following updated assumptions: Non-GAAP annualized effective tax rate is expected to be approximately 24.5% Interest expense for the year is expected to be approximately $62 million to $66 million Diluted weighted average shares outstanding for the year are expected to be approximately 45.0 million to 46.0 million Capital expenditures for the year are expected to be approximately $60 million to $70 million, including approximately $52 million to $62 million of capitalized software development costs Blackbaud has not reconciled forward-looking full-year non-GAAP financial measures contained in this news release to their most directly comparable GAAP measures, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to compensation, acquisition transactions and integration, tax items or others that may arise during the year. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts. Stock Repurchase Program As of September 30, 2026, Blackbaud had approximately $832 million remaining under its common stock repurchase program that was expanded, replenished and reauthorized in December 2025. Based on our current plans, and stock repurchases to date, we expect total repurchases during 2026 to represent between 7% and 10% of our outstanding common stock as of December 31, 2025. Conference Call Details What: Blackbaud's 2026 Third Quarter Conference Call When: October 28, 2026 Time: 8:00 a.m. (Eastern Time) Live Call: 1-877-407-3088 (US/Canada) Webcast: Blackbaud's Investor Relations Webpage About Blackbaud Blackbaud (NASDAQ: BLKB) is the world's leading provider of AI-powered solutions for social impact. Serving nonprofits, educational institutions, companies committed to corporate social responsibility and individual change makers, Blackbaud propels impact at scale with the sector's most intelligent solutions for fundraising and engagement, education solutions, financial management and CSR and grantmaking. With the deepest expertise powered by the world's largest philanthropic data set, the most connected workflows, and the most powerful impact network, Blackbaud's solutions are building a future where resources are unleashed at the speed of need. Blackbaud has been recognized by Fast Company, Newsweek, Quartz, Forbes and more for AI innovation, responsible leadership and workplace excellence. Blackbaud has operations in the United States, Australia, Canada, Costa Rica, India and the United Kingdom, supporting users in 100+ countries. Learn more at www.blackbaud.com, or follow us on X/Twitter, LinkedIn, Instagram, and Facebook. Investor Contact IR@blackbaud.com Media Contact media@blackbaud.com Forward-Looking Statements Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements
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regarding the predictability of our financial condition and results of operations. These statements involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: management of integration of acquired companies; uncertainty regarding increased business and renewals from existing customers; a shifting revenue mix that may impact gross margin; continued success in sales growth; risks related to the development, deployment, regulation, security, market adoption and perception of artificial intelligence technologies; cybersecurity and data protection risks and related liabilities; potential litigation involving us; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Blackbaud's investor relations department. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law. Trademarks All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc. Non-GAAP Financial Measures Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. Blackbaud uses non-GAAP financial measures internally in analyzing its operational performance. Accordingly, Blackbaud believes these non-GAAP measures are useful to investors, as a supplement to GAAP measures, in evaluating its ongoing operational performance and trends and in comparing its financial results from period-to-period with other companies in Blackbaud's industry, many of which present similar non-GAAP financial measures to investors. However, these non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. The non-GAAP financial measures discussed above exclude the impact of certain transactions that Blackbaud believes are not directly related to its operating performance in any particular period, but are for its long-term benefit over multiple periods. Blackbaud believes these non-GAAP financial measures reflect its ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business. While Blackbaud believes these non-GAAP measures provide useful supplemental information, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures. Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software development, and capital expenditures for property and equipment. Blackbaud believes non-GAAP free cash flow provides a useful measure of the company's operating performance. Non-GAAP free cash flow is not intended to represent and should not be viewed as the amount of residual cash flow available for discretionary expenditures. In addition, Blackbaud uses non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic recurring revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, in analyzing its operating performance. Blackbaud believes that these non-GAAP measures are useful to investors, as a supplement to GAAP measures, for evaluating the periodic growth of its business on a consistent basis. Each of these measures excludes incremental acquisition-related revenue attributable to companies, if any, acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, each of these measures reflects presentation of full-year incremental non-GAAP revenue derived from such companies as if they were combined throughout the prior period. In addition, each of these measures excludes prior period revenue associated with divested businesses, if any. The exclusion of the prior period revenue is to present the results of the divested businesses within the results of the combined company for the same period of time in both the prior and current periods. Blackbaud believes this presentation provides a more comparable representation of its current business' organic revenue growth and revenue run-rate. Rule of 40 is defined as non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. Non-GAAP adjusted EBITDA is defined as GAAP net income plus interest, net; income tax provision (benefit); depreciation; amortization of intangible assets from business combinations; amortization of software development costs; stock-based compensation expense; global workforce transition costs; acquisition and disposition-related costs; and Security Incident-related costs. Blackbaud, Inc. Consolidated Balance Sheets (Unaudited) (dollars in thousands, except per share amounts) September 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 35,734$ 38,914 Restricted cash 428,166 720,061 Accounts receivable, net of allowance of $6,529 and $5,876 at September 30, 2026 and December 31, 2025, respectively 76,214 80,517 Customer funds receivable 3,918 1,308 Prepaid expenses and other current assets 86,064 89,290 Total current assets 630,096 930,090 Property and equipment, net 83,827 85,076 Software development costs, net 159,048 155,842 Goodwill 1,055,937 1,056,815 Intangible assets, net 87,413 106,654 Other assets 90,516 56,205
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Total assets $ 2,106,837$ 2,390,682 Liabilities and stockholders' equity Current liabilities: Trade accounts payable $ 38,404$ 27,344 Accrued expenses and other current liabilities 51,047 43,272 Due to customers 430,703 719,833 Debt, current portion 22,654 22,660 Deferred revenue, current portion 380,989 368,986 Total current liabilities 923,797 1,182,095 Debt, net of current portion 1,022,143 1,087,037 Deferred tax liability 25,100 21,981 Deferred revenue, net of current portion 3,674 2,778 Other liabilities 12,638 11,737 Total liabilities 1,987,352 2,305,628 Commitments and contingencies Stockholders' equity: Preferred stock; 20,000,000 shares authorized, none outstanding — — Common stock, $0.001 par value; 180,000,000 shares authorized, 74,080,118 and 72,312,354 shares issued at September 30, 2026 and December 31, 2025, respectively; 45,102,406 and 46,705,325 shares outstanding at September 30, 2026 and December 31, 2025, respectively 74 72 Additional paid-in capital 1,459,322 1,391,641 Treasury stock, at cost; 28,977,712 and 25,607,029 shares at September 30, 2026 and December 31, 2025, respectively (1,471,199) (1,316,224) Accumulated other comprehensive income (loss) 3,210 (5,948) Retained earnings 128,078 15,513 Total stockholders' equity 119,485 85,054 Total liabilities and stockholders' equity $ 2,106,837 $ 2,390,682 Blackbaud, Inc. Consolidated Statements of Comprehensive Income (Unaudited) (dollars in thousands, except per share amounts) Three months ended September 30, Nine months ended September 30, 2026 2025 2026 2025 Revenue $ 292,641$ 281,143$ 864,378$ 833,109 Cost of revenue 114,850 113,653 341,865 342,101 Gross profit 177,791 167,490 522,513 491,008 Operating expenses Sales, marketing and customer success 46,218 44,105 139,823 132,795 Research and development 36,206 37,198 107,978 104,352 General and administrative 34,828 31,044 99,538 120,579 Amortization of intangible assets 588 570 1,762 1,670 Total operating expenses 117,840 112,917 349,101 359,396 Income from operations 59,951 54,573 173,412 131,612 Interest expense (16,109) (16,774) (49,724) (52,130) Other income, net 2,597 3,245 6,977 6,468 Income before provision (benefit) for income taxes 46,439 41,044 130,665 85,950 Income tax provision (benefit) 371 (6,448) 18,100 7,669 Net income $ 46,068$ 47,492$ 112,565$ 78,281 Earnings per share Basic $ 1.04$ 1.00$ 2.51$ 1.63 Diluted $ 1.02$ 0.98$ 2.49$ 1.61 Common shares and equivalents outstanding Basic weighted average shares 44,267,816 47,680,002 44,858,491 47,961,631 Diluted weighted average shares 44,961,588 48,498,285 45,245,216 48,634,027 Other comprehensive income (loss) Foreign currency translation adjustment $ (106)$ (2,284)$ (1,703)$ 8,299 Unrealized gain (loss) on derivative instruments, net of tax 4,241 (622) 10,861 (12,628)
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Total other comprehensive income (loss) 4,135 (2,906) 9,158 (4,329) Comprehensive income $ 50,203$ 44,586$ 121,723$ 73,952 Blackbaud, Inc. Consolidated Statements of Cash Flows (Unaudited) Nine months ended September 30, (dollars in thousands) 2026 2025 Cash flows from operating activities Net income $ 112,565$ 78,281 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 62,595 64,652 Net provision for credit losses and sales returns 5,064 3,788 Stock-based compensation expense 67,682 71,079 Deferred taxes 4,892 (16,682) Amortization of deferred financing costs and discount 1,861 1,940 Other non-cash adjustments 1,313 (5,180) Changes in operating assets and liabilities, net of acquisition and disposal of businesses: Accounts receivable (817) (2,422) Prepaid expenses and other assets (8,832) (9,707) Trade accounts payable 11,750 (3,233) Accrued expenses and other liabilities 13,242 2,033 Deferred revenue 12,929 22,991 Net cash provided by operating activities 284,244 207,540 Cash flows from investing activities Purchase of property and equipment (7,320) (4,805) Capitalized software development costs (38,635) (40,268) Cash used in disposition of business — (12,235) Other investing activities (8,675) — Net cash used in investing activities (54,630) (57,308) Cash flows from financing activities Proceeds from issuance of debt 230,700 307,000 Payments on debt (307,760) (316,922) Employee taxes paid for withheld shares upon equity award settlement (25,696) (39,669) Change in due to customers (288,369) (323,467) Change in customer funds receivable (2,692) (1,676) Purchase of treasury stock, including excise tax payments (129,933) (133,338) Net cash used in financing activities (523,750) (508,072) Effect of exchange rate on cash, cash equivalents and restricted cash (939) 5,768 Net decrease in cash, cash equivalents and restricted cash (295,075) (352,072) Cash, cash equivalents and restricted cash, beginning of period 758,975 809,512 Cash, cash equivalents and restricted cash, end of period $ 463,900$ 457,440 The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown above in the consolidated statements of cash flows: (dollars in thousands) September 30, 2026 December 31, 2025 Cash and cash equivalents $ 35,734 $ 38,914 Restricted cash 428,166 720,061 Total cash, cash equivalents and restricted cash in the statement of cash flows $ 463,900$ 758,975 Blackbaud, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (dollars in thousands, except per share amounts) Three months ended September 30, Nine months ended September 30, 2026 2025 2026 2025
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GAAP Revenue $ 292,641 $ 281,143 $ 864,378 $ 833,109 GAAP gross profit $ 177,791 $ 167,490 $ 522,513 $ 491,008 GAAP gross margin 60.8 % 59.6 % 60.4 % 58.9 % Non-GAAP adjustments: Add: Stock-based compensation expense 2,693 2,850 8,494 8,798 Add: Amortization of intangibles from business combinations 5,405 6,811 17,076 20,883 Add: Employee severance — (18) — 284 Add: Global workforce transition costs(1) 1,014 — 1,556 — Subtotal 9,112 9,643 27,126 29,965 Non-GAAP gross profit $ 186,903 $ 177,133 $ 549,639 $ 520,973 Non-GAAP gross margin 63.9 % 63.0 % 63.6 % 62.5 % GAAP income from operations $ 59,951$ 54,573 $ 173,412 $ 131,612 GAAP operating margin 20.5 % 19.4 % 20.1 % 15.8 % Non-GAAP adjustments: Add: Stock-based compensation expense 22,100 21,657 68,686 71,079 Add: Amortization of intangibles from business combinations 5,993 7,381 18,838 22,553 Add: Employee severance — (242) — 1,905 Add: Global workforce transition costs(1) 5,439 — 8,439 — Add: Acquisition and disposition-related costs(2) 237 383 1,250 25,779 Add: Security Incident-related costs 853 247 853 2,822 Add: Impairment of capitalized software development costs — — 1,056 — Subtotal 34,622 29,426 99,122 124,138 Non-GAAP income from operations $ 94,573$ 83,999 $ 272,534 $ 255,750 Non-GAAP operating margin 32.3 % 29.9 % 31.5 % 30.7 % GAAP income before provision (benefit) for income taxes $ 46,439$ 41,044 $ 130,665 $ 85,950 GAAP net income $ 46,068$ 47,492 $ 112,565 $ 78,281 Shares used in computing GAAP diluted earnings per share 44,961,588 48,498,285 45,245,216 48,634,027 GAAP diluted earnings per share $ 1.02$ 0.98 $ 2.49$ 1.61 Non-GAAP adjustments: Add: GAAP income tax provision (benefit) 371 (6,448) 18,100 7,669 Add: Total non-GAAP adjustments affecting income from operations 34,622 29,426 99,122 124,138 Non-GAAP income before provision for income taxes 81,061 70,470 229,787 210,088 Assumed non-GAAP income tax provision(3) 19,860 17,265 56,298 51,472 Non-GAAP net income $ 61,201$ 53,205 $ 173,489 $ 158,616 Shares used in computing non-GAAP diluted earnings per share 44,961,588 48,498,285 45,245,216 48,634,027 Non-GAAP diluted earnings per share $ 1.36$ 1.10 $ 3.83$ 3.26 (1) Global workforce transition costs represent severance and other costs incurred in connection with actions under our global workforce strategy. (2) Includes charges of $24.3 million incurred during the nine months ended September 30, 2025 related to the release from our lease for office space in Washington, DC. (3) We use a non-GAAP effective tax rate of 24.5% when calculating non-GAAP net income and non-GAAP diluted earnings per share. We base this rate on our estimated annual GAAP income tax rate, adjusted for items excluded from GAAP income when calculating non-GAAP income and for significant nonrecurring tax adjustments. We review this non-GAAP tax rate annually to determine whether it remains appropriate for evaluating our financial performance. In conducting this review, we consider our GAAP annual effective tax rate, changes in tax legislation, non-GAAP adjustments, and shifts in the geographic mix of revenues and expenses. We also evaluate other factors that we deem significant. Because the tax treatment of non-GAAP adjustments differs from GAAP and because of our methodology for estimating the annual tax rate, the non-GAAP tax rate may differ from the GAAP tax rate and from our actual tax liabilities. Blackbaud, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (dollars in thousands) Three months ended September 30, Nine months ended September 30, 2026 2025 2026 2025
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GAAP revenue $ 292,641 $ 281,143 $ 864,378 $ 833,109 GAAP revenue growth 4.1 % 3.8 % Less: Non-GAAP revenue from divested businesses(1) — — — — Non-GAAP organic revenue(2) $ 292,641 $ 281,143 $ 864,378 $ 833,109 Non-GAAP organic revenue growth 4.1 % 3.8 % Non-GAAP organic revenue(2) $ 292,641 $ 281,143 $ 864,378 $ 833,109 Foreign currency impact on non-GAAP organic revenue(3) (237) — (3,167) — Non-GAAP organic revenue on constant currency basis(3) $ 292,404 $ 281,143 $ 861,211 $ 833,109 Non-GAAP organic revenue growth on constant currency basis 4.0 % 3.4 % GAAP recurring revenue $ 287,030 $ 275,802 $ 848,806 $ 815,406 GAAP recurring revenue growth 4.1 % 4.1 % Less: Non-GAAP recurring revenue from divested businesses(1) — — — — Non-GAAP organic recurring revenue(2) $ 287,030 $ 275,802 $ 848,806 $ 815,406 Non-GAAP organic recurring revenue growth 4.1 % 4.1 % Non-GAAP organic recurring revenue(2) $ 287,030 $ 275,802 $ 848,806 $ 815,406 Foreign currency impact on non-GAAP organic recurring revenue(3) (227) — (3,095) — Non-GAAP organic recurring revenue on constant currency basis(3) $ 286,803 $ 275,802 $ 845,711 $ 815,406 Non-GAAP organic recurring revenue growth on constant currency basis 4.0 % 3.7 % (1) Non-GAAP revenue from divested businesses excludes revenue associated with divested businesses in the prior period. The exclusion of the prior period revenue is to present the results of the divested business with the results of the combined company for the same period of time in both the prior and current periods. (2) Non-GAAP organic revenue and non-GAAP organic recurring revenue for the prior year periods presented herein may not agree to non- GAAP organic revenue and non-GAAP organic recurring revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth are calculated. (3) To determine non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro. Blackbaud, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (dollars in thousands) Three months ended September 30, Nine months ended September 30, 2026 2025 2026 2025 GAAP net income $ 46,068$ 47,492 $ 112,565 $ 78,281 Non-GAAP adjustments: Add: Interest, net 13,865 14,403 43,874 46,136 Add: GAAP income tax provision (benefit) 371 (6,448) 18,100 7,669 Add: Depreciation 3,177 2,181 8,228 7,823 Add: Amortization of intangibles from business combinations 5,993 7,381 18,838 22,553 Add: Amortization of software development costs(1) 12,978 12,605 38,203 36,781 Subtotal 36,384 30,122 127,243 120,962 Non-GAAP EBITDA $ 82,452$ 77,614 $ 239,808 $ 199,243 Non-GAAP EBITDA margin(2) 28.2 % 27.7 % Non-GAAP adjustments: Add: Stock-based compensation expense $ 22,100$ 21,657 $ 68,686 $ 71,079 Add: Employee severance — (242) — 1,905 Add: Global workforce transition costs(3) 5,439 — 8,439 — Add: Acquisition and disposition-related costs(3) 237 383 1,250 25,779 Add: Security Incident-related costs 853 247 853 2,822 Add: Impairment of capitalized software development costs — — 1,056 — Subtotal 28,629 22,045 80,284 101,585 Non-GAAP adjusted EBITDA $ 111,081 $ 99,659 $ 320,092 $ 300,828
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Non-GAAP adjusted EBITDA margin(4) 38.0 % 37.0 % Rule of 40(5) 42.1 % 40.8 % Non-GAAP adjusted EBITDA $ 111,081 $ 99,659 $ 320,092 $ 300,828 Foreign currency impact on Non-GAAP adjusted EBITDA(6) (76) (512) (1,267) (1,403) Non-GAAP adjusted EBITDA on constant currency basis(6) $ 111,005 $ 99,147 $ 318,825 $ 299,425 Non-GAAP adjusted EBITDA margin on constant currency basis 38.0 % 37.0 % Rule of 40 on constant currency basis(7) 42.0 % 40.4 % (1) Includes amortization expense related to software development costs, and amortization expense from capitalized cloud computing implementation costs. (2) Measured by non-GAAP EBITDA divided by non-GAAP organic revenue. (3) See additional details in the reconciliation of GAAP to non-GAAP operating income above. (4) Measured by non-GAAP adjusted EBITDA divided by non-GAAP organic revenue. (5) Measured by non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. See Non-GAAP organic revenue growth table above. (6) To determine non-GAAP adjusted EBITDA on a constant currency basis, non-GAAP adjusted EBITDA from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro. (7) Measured by non-GAAP organic revenue growth on constant currency basis plus non-GAAP adjusted EBITDA margin on constant currency basis. (dollars in thousands) Nine months ended September 30, 2026 2025 GAAP net cash provided by operating activities $ 284,244 $ 207,540 GAAP operating cash flow margin 32.9 % 24.9 % Non-GAAP adjustments: Less: purchase of property and equipment (7,320) (4,805) Less: capitalized software development costs (38,635) (40,268) Non-GAAP free cash flow $ 238,289 $ 162,467 Non-GAAP free cash flow margin 27.6 % 19.5 % View original content to download multimedia:https://www.prnewswire.com/news-releases/blackbaud-announces-2026-third-quarter-financial- results-302921392.html SOURCE Blackbaud