# BLACKBAUD INC (BLKB) Informational only - not investment advice. CIK: 0001280058 SIC: 7372 Services-Prepackaged Software SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7372 Services-Prepackaged Software](/industry/7372/) Latest 10-K filed: 2026-02-18 SEC page: https://www.sec.gov/edgar/browse/?CIK=1280058 Filing source: https://www.sec.gov/Archives/edgar/data/1280058/000128005826000006/blkb-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 1128365000 | USD | 2025 | 2026-02-18 | | Net income | 114970000 | USD | 2025 | 2026-02-18 | | Assets | 2390682000 | USD | 2025 | 2026-02-18 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-18. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001280058.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2013 | 2014 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | | 788,487,000 | 848,606,000 | 900,423,000 | 913,219,000 | 927,740,000 | 1,058,105,000 | 1,107,080,000 | 1,154,624,000 | 1,128,365,000 | | Net income | | 28,290,000 | | 73,633,000 | 44,841,000 | 11,908,000 | 7,717,000 | 5,698,000 | -45,407,000 | 3,018,000 | -299,524,000 | 114,970,000 | | Operating income | | 46,364,000 | | 68,178,000 | 59,417,000 | 27,145,000 | 37,243,000 | 24,906,000 | -28,485,000 | 46,353,000 | -271,377,000 | 190,754,000 | | Gross profit | | 290,983,000 | | 426,583,000 | 466,864,000 | 481,999,000 | 485,154,000 | 484,545,000 | 552,716,000 | 599,055,000 | 631,426,000 | 663,292,000 | | Diluted EPS | | 0.62 | | 1.54 | 0.93 | 0.25 | 0.16 | 0.12 | -0.88 | 0.06 | -5.92 | 2.37 | | Assets | 706,610,000 | 943,183,000 | | | 1,615,305,000 | 1,992,963,000 | 2,044,734,000 | 2,971,617,000 | 2,992,703,000 | 2,912,279,000 | 2,496,000,000 | 2,390,682,000 | | Liabilities | 545,066,000 | 757,267,000 | | | 1,241,522,000 | 1,596,199,000 | 1,618,584,000 | 2,254,557,000 | 2,248,671,000 | 2,103,574,000 | 2,369,161,000 | 2,305,628,000 | | Stockholders' equity | | | 269,078,000 | 336,289,000 | 373,783,000 | 396,764,000 | 426,150,000 | 717,060,000 | 744,032,000 | 809,903,000 | 126,839,000 | 85,054,000 | | Cash and cash equivalents | 11,889,000 | 14,735,000 | | | 30,866,000 | 31,810,000 | 35,750,000 | 55,146,000 | 31,691,000 | 31,251,000 | 67,628,000 | 38,914,000 | | Net margin | | | | 9.34% | 5.28% | 1.32% | 0.85% | 0.61% | -4.29% | 0.27% | -25.94% | 10.19% | | Operating margin | | | | 8.65% | 7.00% | 3.01% | 4.08% | 2.68% | -2.69% | 4.19% | -23.50% | 16.91% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001280058.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | -0.07 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | -0.20 | reported discrete quarter | | 2023-Q2 | 2023-03-31 | | -14,701,000 | | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | -0.28 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 271,042,000 | | 0.04 | reported discrete quarter | | 2023-Q3 | 2023-06-30 | | 2,105,000 | | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 277,626,000 | | 0.17 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 295,011,000 | 5,399,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 279,250,000 | 5,246,000 | 0.10 | reported discrete quarter | | 2024-Q2 | 2024-03-31 | | 5,246,000 | | reported discrete quarter | | 2024-Q3 | 2024-06-30 | | 21,804,000 | | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 287,286,000 | | 0.42 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 286,727,000 | | 0.40 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 302,232,000 | -330,764,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 270,661,000 | 4,867,000 | 0.10 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | 4,867,000 | | reported discrete quarter | | 2025-Q3 | 2025-06-30 | 282,000,000 | 26,466,000 | 0.55 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 281,382,000 | | 0.54 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 295,256,000 | 36,689,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 281,140,000 | 31,139,000 | 0.67 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1280058/000128005826000016/blkb-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-04-29 Report date: 2026-03-31 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited, condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis presents financial information denominated in millions of dollars which can lead to differences from rounding when compared to similar information contained in the unaudited, condensed consolidated financial statements and related notes which are primarily denominated in thousands of dollars. Executive Summary We are 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, we propel impact at scale with the sector’s most intelligent solutions for fundraising and engagement, education solutions, financial management and CSR and grantmaking. We have operations in the United States, Australia, Canada, Costa Rica, India and the United Kingdom, supporting users in 100+ countries. Our revenue is primarily generated from the following sources: (i) charging for the use of our software solutions in cloud and hosted environments; and (ii) providing payment and transaction services. Business Update We delivered solid execution against our operating plan to start 2026, with a continued focus on efficiency and a strong pace of product innovation. AI initiatives remain an important area of emphasis—both in the capabilities we are delivering to customers and in the way we operate the business. During the first quarter, we expanded the availability of AI‑enabled capabilities across our product portfolio and launched our first agentic AI solution, the Blackbaud fundraising development agent, into general availability. This solution is designed to assist fundraising teams by automating certain outreach and stewardship activities within existing workflows, using customer‑permissioned data and operating under defined governance and user controls. The fundraising development agent is expected to be offered under a subscription pricing model. While commercialization remains in the early stages, we currently anticipate that annual subscription pricing would generally be in the tens of thousands of dollars, depending on customer size and use case. We expect this offering to be marketed both to existing customers as an incremental subscription and to prospective new customers as part of our broader product portfolio. We continue to evaluate customer adoption, operational impacts, and potential financial contributions as part of our ongoing planning and investment process. Adoption of AI‑enabled functionality continued across portions of our customer base during the quarter. A significant portion of our Raiser’s Edge NXT customers utilize machine‑learning‑enabled donor prospecting capabilities, which leverage historical and behavioral data to support fundraising activities. These capabilities are supported by proprietary Blackbaud data, licensed datasets, benchmarking data, and other philanthropic datasets, all subject to our cybersecurity and data governance framework. We recently disclosed that more than 20% of our renewing customers have elected to enter into four-year or longer contracts. To date in the current renewal cycle, we have seen an increasing number of customers request five-year contracts. We believe this reflects continued customer engagement with our solutions and our ability to support them and their missions into the future. We also continued to apply AI internally to improve efficiency across engineering, marketing, customer success and the back office. During the quarter, our engineering teams increased their use of approved generative AI development tools to accelerate software development and issue remediation, contributing to productivity improvements and faster delivery of enhancements. 20 First Quarter 2026 Form 10-Q Table of Contents Blackbaud, Inc. (Unaudited) In February 2026, we announced our intention to repurchase between 5% and 10% of our outstanding common stock as of December 31, 2025 during the course of 2026 under our stock repurchase program. During the three months ended March 31, 2026, we repurchased an aggregate of 1,601,057 shares for $82.1 million. Including net share settlement of employee stock compensation, these repurchases represent approximately 4.5% of our outstanding common stock as of December 31, 2025. As of March 31, 2026, $878.5 million remained available under our stock repurchase program. Over the long term, we expect stock repurchases to remain an important component of our capital allocation strategy, subject to market conditions, business performance, leverage considerations, and other factors. We anticipate utilizing at least 50% of our free cash flow from 2026 to 2030 for stock repurchases. See discussion of our Non‑GAAP Financial Measures below. Financial Summary Total revenue ($M) Income from operations ($M) YoY Growth (%) YoY Growth (%) Revenue increased by $11.2 million, during the three months ended March 31, 2026, when compared to the same period in 2025, driven largely by the following: + Increase in contractual recurring revenue of $6.8 million primarily related to the positive impact of our pricing initiatives and the demand of our cloud solutions. + Increase in transactional recurring revenue of $6.3 million primarily due to positive results related to pricing initiatives and, to a lesser extent, increases in volume for our Blackbaud Integrated Payments; also contributing to the increase in transactional recurring revenue during the three months ended March 31, 2026 was an increase related to fluctuations in foreign currency exchange rates of $1.3 million. - Decrease in one-time consulting revenue of $2.0 million, primarily due to fewer sales of implementation and customization services. First Quarter 2026 Form 10-Q 21 Table of Contents Blackbaud, Inc. (Unaudited) Income from operations increased by $31.7 million, during the three months ended March 31, 2026, when compared to the same period in 2025, driven largely by the following: + Decrease in acquisition and disposition-related costs within general and administrative expenses of $25.0 million primarily related to our release from our lease for office space in Washington, DC, which occurred during February 2025 and did not reoccur in 2026 + Increase in total revenue, as described above + Decrease in third-party contractor costs of $3.3 million primarily due to transition of work to employees in our Global Capability Center ("GCC") in Hyderabad, India, decreased use of outside contractors and completion of prior year investments, partially offset by an increase in investment in AI innovation + Decrease in Security Incident-related expenses of $2.2 million that occurred during 2025 that did not reoccur in 2026. For more information, see Note 11 to our audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC on February 18, 2026. + Increase of $1.6 million due to the non recurrence of a first quarter 2025 contra expense for transition services associated with the EVERFI disposition in December 2024. - Increase in third-party software costs of $2.4 million related to internal solutions we use to run our business - Increase in stock-based compensation expense of $1.7 million primarily due to certain executive retirements                                                                                                                                                                                                                     We are continuing to make critical investments in the business in areas such as innovation, AI, cybersecurity, and our continued shift of cloud infrastructure to leading public cloud service providers. We continuously seek opportunities to optimize our portfolio of solutions to focus time and resources on innovation that will have the greatest impact for our customers and the markets we serve, and drive the highest return on investment. To that end, we will continue to simplify and rationalize our portfolio through product sunsets and divestitures of non-core businesses and technologies. 22 First Quarter 2026 Form 10-Q Table of Contents Blackbaud, Inc. (Unaudited) Gross dollar retention Our recurring subscription contracts are typically for a term of three years at contract inception with standard three-year renewals thereafter. A key factor to our overall success is the renewal and expansion of our existing subscription agreements with our customers. Management uses gross dollar retention in analyzing our success at delighting our customers with innovative and cloud solutions. Gross dollar retention is defined as contracted annual recurring revenue ("CARR") divided by beginning CARR with a measurement period of twelve months. For the twelve months ended March 31, 2026, our gross dollar retention was approximately 92%. This gross dollar retention rate is relatively unchanged from our rate for the twelve months ended December 31, 2025. Changes in the amount of contractual annual recurring revenue up for renewal in a given period may impact absolute churn dollars even when customer renewal rates remain relatively consistent from year-to-year. We are continually investing in innovation, which we believe will support gross dollar retention over the long-term. Balance sheet and cash flow At March 31, 2026, our cash and cash equivalents were $34.1 million. Under the 2024 Credit Facilities, the carrying amount of our debt was $1.1 billion and our net leverage ratio was 2.67 to 1.00. During the three months ended March 31, 2026, we generated $51.5 million in cash from operations, had a net increase in borrowings of $64.9 million, returned $82.1 million to stockholders by way of share repurchases, and had aggregate cash outlays of $14.5 million for purchases of property and equipment and capitalized software development costs. On July 4, 2025, the United States enacted the OBBBA, which introduced significant changes to U.S. tax law. See Note 9 to our unaudited, condensed consolidated financial statements in this report for more information. OBBBA impacts meaningfully contributed to reducing U.S. cash taxes in 2025 and we expect to continue to see meaningful reductions to cash taxes through 2027. U.S. state OBBBA conformity considerations (which continue to evolve as the states address the new Federal tax legislation) and the phase-in of the OBBBA international tax provisions in 2026 may continue to affect this cash reduction. First Quarter 2026 Form 10-Q 23 Table of Contents Blackbaud, Inc. (Unaudited) Results of Operations Comparison of the three months ended March 31, 2026 and 2025 Revenue and Cost of Revenue Revenue ($M) Cost of revenue ($M) Gross profit ($M) and gross margin (%) YoY Growth (%) YoY Growth (%) Our revenue includes three components: contractual recurring, transactional recurring and one-time services and other. •Contractual recurring revenue is primarily comprised of fees for the use of our subscription-based software solutions, which includes providing access to cloud solutions, online training programs and subscription-based analytic services. Contractual recurring revenue also includes fees from maintenance services for our on-premises solutions. •Transactional recurring revenue is comprised of transaction fees associated with the use of our solutions, including donation processing, tuition management, consumer giving and event-based usage. •One-time services and other revenue is comprised of fees for one-time consulting, analytic and onsite training services, and fees for retained and [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Item 1A Risk factors and our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The following discussion and analysis presents financial information denominated in millions of dollars which can lead to differences from rounding when compared to similar information contained in the consolidated financial statements and related notes, which are primarily denominated in thousands of dollars. Executive Summary We are 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, we propel impact at scale with the sector’s most intelligent solutions for fundraising and engagement, education solutions, financial management and CSR and grantmaking. We have operations in the United States, Australia, Canada, Costa Rica, India and the United Kingdom, supporting users in 100+ countries. Our revenue is primarily generated from the following sources: (i) charging for the use of our software solutions in cloud and hosted environments; and (ii) providing payment and transaction services. Operating Initiatives Supporting Long-Term Growth and Margin Improvement •Product Innovation and Delivery A central element of our long‑term strategy is the disciplined integration of AI across our products, platform and internal operations, which management views as foundational to driving operating leverage, enhancing customer outcomes and supporting sustainable growth over time. Our product innovation efforts have focused on two primary areas: (i) advancing AI across the portfolio, and (ii) enhancing product connectivity and interoperability to streamline customer workflows. These enhancements are designed to help customers improve fundraising outcomes while reducing administrative burden. Through our multi-year Intelligence for Good® initiative, we continue to integrate machine learning and AI-driven capabilities into our products to improve efficiency and support better outcomes for our customers. Our machine learning features for prospect identification have been adopted by more than half of Raiser's Edge NXT® customers. We have also introduced generative AI features across multiple products, primarily supporting the composition of donor and constituent communications. In late 2025, we released Blackbaud AI Chat, which provides contextual responses within our solutions and assists users in completing tasks more efficiently. At bbcon®, our annual user conference in October 2025, we launched Agents for Good™, our agentic AI suite, designed to augment customer teams with virtual AI-driven assistants capable of autonomously executing complex workflows across fundraising, finance and corporate impact functions. These innovations expand the ways customers can use our solutions and are expected to contribute to future bookings, product adoption and customer retention. •Targeting Mid-Single-Digit Revenue Growth Contractual Recurring Revenue (~64% of total revenue) Contractual recurring revenue is driven by new‑customer bookings, cross‑sell and upsell activity within our existing customer base and the retention of existing customer revenue. Our sales organization includes teams focused on both new logo acquisition and expansion within existing customers. In addition to these motions, our new product opportunities (such as Agents for Good discussed above) provide our customer account teams with incremental solutions 38 2025 Form 10-K Table of Contents Blackbaud, Inc. to sell into existing customers. These three motions—new logo, cross-sell/upsell, and new product—support our multi-year “land and expand” strategy. Most of our software customers now operate on standard three‑year contract terms with mid-to-high single-digit price increases at renewal and embedded annual price increases. These terms provide improved revenue visibility and are expected to contribute to stability in retention rates. Revenue from these arrangements is generally recognized ratably over the contract term. While our contract renewal program is designed around three‑year terms, more than 20% of renewing customers have elected to enter into four‑year or longer contracts. Accordingly, our customer base is primarily composed of three‑year contracts, with over 20% of customers committed under extended‑term arrangements, which contributes to revenue visibility while extending the duration over which renewals occur. Because revenue from these contractual arrangements is recognized ratably over the contract term, changes in contract duration affect the period over which revenue is recognized but do not change the pattern of revenue recognition within the contract. To the extent contracts include embedded annual price escalators, the total fees attributable to the subscription-based software solutions are recognized on a straight-line basis over the term of the arrangement, resulting in a more even pattern of revenue recognition over longer periods. Accordingly, period‑over‑period revenue growth continues to be driven primarily by the retention of existing customer revenue, combined with new bookings, expansion activity and contractual renewals with price increases and embedded annual price escalators over the contractual term. Extended‑term arrangements contribute to improved visibility into future revenue and cash flows. Renewal performance can vary from year to year due to the size and composition of renewal cohorts. Approximately 40% of our existing customer contracts are due for renewal in 2026, compared to approximately 30% in 2027 and approximately 30% in 2028. The contractual annual recurring revenue dollars up for renewal associated with the 2026 renewal cohort are approximately 40% higher than those up for renewal in 2025, reflecting the normal progression of our multi-year contract renewal cycle and the timing of customer renewals. Because the 2026 cohort is meaningfully larger, we may experience higher churn dollars in that year relative to prior years. These cohort dynamics are a normal part of our renewal cycle and can influence year-over-year revenue trends, even when underlying customer retention patterns remain stable. Transactional Recurring Revenue (~34% of total revenue) Transactional recurring revenue is diversified across multiple activity types. The primary components of this revenue stream—and their associated products—include: ◦Donation Processing (~55%) - support by Blackbaud Integrated Payments, which powers donation activity across our fundraising and CRM solutions. ◦Consumer Giving (~20%) - driven by JustGiving, which facilitates individual, peer-to-peer and community-driven giving. ◦Tuition Management (~20%) - generated through Blackbaud Tuition Management, which processes tuition, fees and related financial transactions for K-12 private schools. ◦Event‑based Usage (~5%) - derived from usage-based transactions across certain registration, ticketing and event-related workflows within our product suite. The diversity of these underlying transaction types has contributed to consistent high-single-digit growth in transactional recurring revenue in recent years. In certain periods, transactional recurring revenue may benefit from temporary increases in charitable giving related to isolated events, which can contribute to short‑term variability in transaction volumes. Future growth in this category will depend on volume (e.g., donation activity, giving behavior, tuition payments), same‑store volume trends, the shift toward donor online giving, customer adoption of our payments capabilities and pricing optimization initiatives. Certain components of transactional revenue—as with the broader social good sector—are influenced by external factors such as giving patterns, macroeconomic conditions and seasonal activity. We have experienced continued growth in donation processing, consumer giving and tuition management, have implemented targeted rate increases across select areas of our payments portfolio, and are executing additional 2025 Form 10-K 39 Table of Contents Blackbaud, Inc. optimization initiatives intended to enhance the donor experience and support long-term transactional revenue expansion. •Operating Efficiency and Margin Improvement We are focused on improving operating efficiency and enhancing profitability over time. This includes actions to optimize our workforce, improve productivity, modernize our technology platform and simplify our cost structure. Consistent with this focus, we are applying AI across our internal operations as a tool to support productivity, scalability and operational effectiveness over time. We have taken several steps to improve efficiency in recent years, including reductions in headcount, optimization of our real estate footprint, renegotiation of key vendor contracts, continued migration of our product infrastructure to public cloud environments and planned closure of our two remaining legacy private data centers. We are also deploying AI-enabled tools across our internal operations, including research and development, customer operations and general and administrative functions, to automate routine activities, accelerate workflows and support internal productivity, while maintaining appropriate controls and governance. As part of our multi-year global workforce strategy, we are expanding our global footprint through the continued build-out of our Global Capability Center ("GCC") in Hyderabad, India. This expansion enhances our access to talent, enables labor arbitrage while maintaining a high quality of work, and supports a follow-the-sun operating model. Our adoption of AI complements this strategy by informing how we assess roles, skill requirements and productivity opportunities as our operating model evolves. Beginning in 2024, we have relied on a combination of (i) insourcing certain roles previously performed by third parties into the GCC, (ii) evaluating roles and required skill sets, including opportunities created through our adoption of AI, to determine whether positions that become vacant through attrition should be backfilled within the GCC, and (iii) opportunistically transitioning additional roles to the GCC. We expect to continue this approach as we execute the next phase our global workforce strategy through 2027. In connection with these efforts, we currently expect to incur pre‑tax GCC workforce transition costs of $6 million to $8 million in 2026, consisting primarily of severance and other employee transition‑related expenses. These costs will be recognized as incurred as impacted employees are notified and related services are received. Because planning for later phases of this multiyear initiative remains ongoing, our current estimates relate only to expected costs in 2026. We expect to provide updates as planning progresses. We expect the actions taken in 2026, together with later phases of the initiative, to begin generating operating cost efficiencies starting in 2027, although the timing and magnitude of these benefits will depend on the pace of execution, role transitions, technology adoption and other operational factors. •Stock repurchase program On December 1, 2025, our Board of Directors reauthorized, expanded and replenished our stock repurchase program by raising the total capacity under the program from $800.0 million to $1.0 billion available for repurchases. The program does not have an expiration date and authorizes the repurchase of shares from time to time in accordance with applicable laws, including through open market transactions, transactions under Rule 10b5-1 trading plans, and privately negotiated transactions. The timing and amount of repurchases are determined based on a variety of factors, including market and business conditions, the trading price of our common stock and alternative uses of capital, and the program may be limited, suspended or discontinued at any time without prior notice. 40 2025 Form 10-K Table of Contents Blackbaud, Inc. On December 2, 2025, we announced an increase in our expected fiscal year 2025 stock repurchase range to between 7.0% and 8.5% of our outstanding common stock as of December 31, 2024. During the year ended December 31, 2025, we repurchased 3,337,844 shares for $214.0 million. Including net share settlement of employee stock compensation, these repurchases represented approximately 7.9% of our outstanding common stock as of December 31, 2024. As of December 31, 2025, $960.6 million remained available for repurchases under the program. During 2026, we intend to repurchase between 5.0% and 10.0% of our outstanding common stock as of December 31, 2025 under our existing stock repurchase program. Over the long term, we expect stock repurchases to remain an important component of our capital allocation strategy, subject to market conditions, business performance, leverage considerations, and other factors. We anticipate utilizing at least 50% of our free cash flow from 2026 to 2030 for stock repurchases. See discussion of our Non‑GAAP Financial Measures below. Financial Summary Total revenue ($M) Income (loss) from operations ($M) YoY Growth (%) YoY Growth (%) Total revenue decreased by $26.3 million during 2025, driven largely by the following: - Decrease in contractual recurring revenue of $52.7 million, primarily related to our sale of EVERFI which represented $82.6 million; partially offset by growth of $29.8 million due to the positive impact of our pricing initiatives and new subscription sales of our cloud solutions. - Decrease in one-time consulting revenue of $4.2 million primarily due to our sale of EVERFI Limited in March 2024 and, to a lesser extent, fewer sales of implementation services. + Increase in transactional recurring revenue of $30.6 million primarily due to increases in volume for our Blackbaud Integrated Payments and Blackbaud Tuition Management and, to a lesser extent, positive results related to pricing initiatives; also contributing to the increase in transactional recurring revenue during the year ended December 31, 2025 was an increase related to fluctuations in foreign currency exchange rates of $2.8 million. For information on the impact of foreign currency fluctuations on our financial results, see Foreign Currency Exchange Rates below on page 59. 2025 Form 10-K 41 Table of Contents Blackbaud, Inc. Income from operations increased by $462.1 million during 2025, driven largely by the following: + Pre-tax loss on disposition of EVERFI, during the year ended December 31, 2024, of $405.4 million, including noncash impairment charges of $390.2 million, which did not reoccur during 2025. See Note 4 to our consolidated financial statements in this report for additional details. + Decrease in compensation costs other than stock-based compensation of $42.0 million primarily due to our sale of EVERFI + Decrease in amortization of intangible assets from business combinations of $30.6 million largely due to the previously disclosed impairment charge related to our EVERFI asset group in December 2024, which primarily included finite-lived intangible assets + Decrease in Security Incident-related expenses of $10.6 million largely related to decreases in loss contingency accruals. See Note 11 to our consolidated financial statements in this report for our discussion of the Security Incident. + Decrease in third-party contractor costs of $10.6 million primarily due to our sale of EVERFI, partially offset by increased spending for AI features embedded in our solutions + Decrease in advertising costs of $4.4 million primarily due to our sale of EVERFI + Decrease in stock-based compensation expense of $12.1 million primarily due to a decrease in the grant date fair value of equity award grants, and to a lesser extent, our sale of EVERFI; partially offset by an increase primarily due to estimated overall Company performance against 2025 goals + Decrease in rent expense of $3.9 million primarily related to our release from our lease for office space in Washington, DC in February 2025 - Decrease in total revenue, as described above - Increase in acquisition and disposition-related costs within general and administrative expenses of $19.8 million primarily related to our release from our lease for office space in Washington, DC in February 2025 - Decrease of $7.5 million in software development costs that were required to be capitalized under generally accepted accounting principles ("GAAP"), primarily due to our sale of EVERFI - Increase in transaction-based costs of $5.4 million related to the increase in the volume of transactions for which we process payments and, to a lesser extent, increases in vendor rates - Increase in third-party software costs of $3.3 million primarily related to investments in our internal cybersecurity program We are continuing to make investments in the business in areas such as innovation, AI, cybersecurity and our continued shift of cloud infrastructure to leading public cloud service providers. We continuously seek opportunities to optimize our portfolio of solutions to focus time and resources on innovation that will have the greatest impact for our customers and the markets we serve, and drive the highest return on investment. To that end, we will continue to simplify and rationalize our portfolio through product sunsets and divestitures of non-core businesses and technologies. Gross dollar retention 42 2025 Form 10-K Table of Contents Blackbaud, Inc. Our recurring subscription contracts are typically for a term of three years at contract inception with standard three-year renewals thereafter. A key factor to our overall success is the renewal and expansion of our existing subscription agreements with our customers. Management uses gross dollar retention in analyzing our success at delighting our customers with innovative and cloud solutions. Gross dollar retention is defined as contracted annual recurring revenue ("CARR") divided by beginning CARR with a measurement period of twelve months. During 2025, our gross dollar retention was approximately 92%. This gross dollar retention rate increased over our rate for the full year ended December 31, 2024 primarily due to our sale of EVERFI. Changes in the amount of contractual annual recurring revenue up for renewal in a given period may impact absolute churn dollars even when customer renewal rates remain relatively consistent from year to year. We are continually investing in innovation, which we believe will support gross dollar retention over the long-term. Balance sheet and cash flow At December 31, 2025, our cash and cash equivalents were $38.9 million. Under the 2024 Credit Facilities, the carrying amount of our debt was $1.1 billion and our net leverage ratio was 2.52 to 1.00. During 2025, we generated $265.6 million in cash flow from operations, had a net increase in borrowings of $34.7 million, returned $214.0 million to stockholders by way of share repurchases and had aggregate cash outlays of $62.0 million for purchases of property and equipment and capitalized software development costs. On July 4, 2025, the United States enacted the OBBBA, which introduced significant changes to U.S. tax law. See Note 12 to our consolidated financial statements in this report for more information. OBBBA impacts meaningfully contributed to reducing U.S. cash taxes in 2025. We expect to continue to see meaningful reductions to cash taxes through 2027. U.S. state OBBBA conformity considerations (which continue to evolve as the states address the new Federal tax legislation) and the phase-in of the OBBBA international tax provisions in 2026 may continue to affect this cash reduction. Results of Operations Reportable segment We report our operating results and financial information in one operating and reportable segment. See Note 16 to our consolidated financial statements in this report for additional information. Comparison of 2025 vs. 2024 For information regarding the comparison of 2024 to 2023, please refer to Part II Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 21, 2025. Disposition As previously disclosed, on December 31, 2024, we disposed of our EVERFI business, formerly a wholly owned subsidiary of Blackbaud, Inc, to a private investment firm that is unaffiliated with Blackbaud for nominal cash consideration. The results of operations of EVERFI are not included in our consolidated results of operations subsequent to the date of disposition. Reclassifications Our revenue from "recurring" and "one-time services and other" have been combined within "revenue" beginning in 2025 due to the immateriality of our one-time services and other revenue. In order to provide comparability between periods presented, our “recurring“ and “one-time services and other" revenue lines have been combined within “revenue" in the previously reported consolidated statements of comprehensive income to conform to the presentation of the current period. Similarly, "cost of recurring" and "cost of one-time services and other" have been combined within "cost of revenue" in the previously reported consolidated statements of comprehensive income to conform to the presentation of the current period. Revision of Prior Period Financial Statements During the third quarter of 2025, we identified a prior period noncash error related to the previously recorded valuation allowance in accounting for income taxes. We have revised previously issued financial statements to correct this error, along with other immaterial prior period errors. None of the revisions were considered material to the prior periods impacted, as disclosed in Note 13 to our unaudited, condensed consolidated financial statements contained in our Quarterly Report on Form 10-Q filed with the SEC on November 3, 2025. All amounts in Item 2 of this filing are provided as revised. 2025 Form 10-K 43 Table of Contents Blackbaud, Inc. Revenue and Cost of Revenue Revenue ($M) Cost of revenue ($M) Gross profit ($M) and gross margin (%) YoY Growth (%) YoY Growth (%) Our revenue includes three components: contractual recurring, transactional recurring and one-time services and other. •Contractual recurring revenue is primarily comprised of fees for the use of our subscription-based software solutions, which includes providing access to cloud solutions, including cloud solutions that incorporate AI-enabled functionality, online training programs and subscription-based analytic services. Contractual recurring revenue also includes fees from maintenance services for our on-premises solutions. •Transactional recurring revenue is comprised of fees and voluntary donor contributions (to offset processing fees) associated with the use of our solutions, including donation processing, tuition management, consumer giving and event-based usage. •One-time services and other revenue is comprised of fees for one-time consulting, analytic and onsite training services, and fees for retained and managed services contracts that we do not expect to have a term consistent with our cloud solution contracts. Cost of revenue is primarily comprised of compensation costs for customer support, production IT, professional services and onsite training personnel, hosting and data center costs, third-party contractor expenses, third-party royalty and data expenses, allocated depreciation, facilities and IT support (including cybersecurity) costs, amortization of intangible assets from business combinations, amortization of software development costs, transaction-based costs related to payments services including remittances of amounts due to third-parties, data expense incurred to perform one-time analytic services and other costs incurred in providing support, recurring services and onsite customer training to our customers. Our customers continue to prefer cloud subscription offerings with integrated analytics, training and payment services. We intend to continue focusing on innovation, quality and integration of our cloud solutions, which we believe will drive future revenue growth. 44 2025 Form 10-K Table of Contents Blackbaud, Inc. 2025 vs. 2024 Revenue decreased by $26.3 million, or 2.3%. For a discussion of our changes in revenue, see "Revenue" above starting on page 41 in this report. Cost of revenue decreased by $58.1 million, or 11.1%, driven primarily by the following: - Decrease in amortization of intangible assets from business combinations of $29.3 million largely due to the previously disclosed impairment charge related to our EVERFI asset group in December 2024, which primarily included finite-lived intangible assets - Decrease in compensation costs of $21.4 million primarily due to our sale of EVERFI - Decrease in allocated overhead costs of $6.3 million primarily related to the decreased headcount from our sale of EVERFI - Decrease in third-party contractor costs of $4.5 million related to our sale of EVERFI and decreased use of outside contractors + Increase in transaction-based costs of $5.2 million related to the increase in the volume of transactions for which we process payments and, to a lesser extent, increases in vendor rates Gross margin increased by 410 basis points primarily due to the decrease in cost of revenue outpacing the decrease in revenue. Operating Expenses Sales, marketing and customer success ($M) Research and development ($M) General and administrative ($M) Percentages indicate expenses as a percentage of total revenue Sales, marketing and customer success Sales, marketing and customer success expense includes compensation costs, variable sales commissions, travel-related expenses, advertising and marketing materials, public relations costs, variable reseller commissions and allocated depreciation, facilities and IT support (including cybersecurity) costs. We see a large market opportunity in the long-term and will continue to make investments to drive sales effectiveness. These investments include enhancements to our go‑to‑market approach and the use of software tools, including AI‑enabled sales development capabilities, to enhance our digital footprint, support lead generation and improve sales execution efficiency. For example, we utilize AI to increase sales development representative engagement and customer conversations, supporting pipeline generation. The enhancements we are making in our go-to-market approach are expected to reduce our average customer acquisition cost per customer and related payback period while increasing sales velocity. 2025 Form 10-K 45 Table of Contents Blackbaud, Inc. 2025 vs. 2024 Sales, marketing and customer success expenses decreased by $19.9 million, or 10.1%. The decreases in dollars and as a percentage of total revenue were primarily driven by the following: - Decrease in compensation costs of $11.7 million primarily related to our sale of EVERFI - Decrease in advertising costs of $4.4 million primarily related to our sale of EVERFI - Decrease in commissions expense of $1.7 million primarily due to our sale of EVERFI Research and development Research and development expense includes compensation costs for engineering and product management personnel, third-party contractor expenses, software development tools and other expenses related to developing new solutions or upgrading and enhancing existing solutions that do not qualify for capitalization, and allocated depreciation, facilities and IT support (including cybersecurity) costs. 2025 vs. 2024 We continue to make investments intended to delight our customers with innovative and secure cloud solutions, including AI technology. Research and development expense decreased by $15.6 million, or 10.1%. The decreases in dollars and as a percentage of total revenue were primarily driven by the following: - Decrease in compensation costs of $13.9 million primarily related to our sale of EVERFI - Decrease in third-party contractor costs of $7.3 million primarily related to our sale of EVERFI, partially offset by increased spending for AI features embedded in our solutions - Decrease in allocated overhead costs of $3.1 million primarily related to our sale of EVERFI and decreased headcount + Decrease in software development costs of $8.3 million that were required to be capitalized under GAAP, primarily related to our sale of EVERFI Not included in research and development expense for 2025 and 2024 were $52.5 million and $60.8 million, respectively, of qualifying costs associated with software development activities that are required to be capitalized under GAAP, such as those for our cloud solutions. Qualifying capitalized development costs associated with our cloud solutions are subsequently amortized to cost of revenue over the related assets' estimated useful life, which generally range from three to seven years. We expect that the amount of software development costs capitalized will be relatively consistent in the near-term as we continue making investments in innovation, quality, security and the integration of our solutions, which we believe will drive long-term revenue growth. 46 2025 Form 10-K Table of Contents Blackbaud, Inc. General and administrative General and administrative expense consists primarily of compensation costs for general corporate functions, including senior management, finance, accounting, legal, human resources and corporate development, Security Incident-related expenses (including legal fees, settlements and loss contingency accruals), third-party professional fees, insurance, allocated depreciation, facilities and IT support (including cybersecurity) costs, acquisition-related expenses and other administrative expenses. 2025 vs. 2024 General and administrative expenses increased by $11.9 million, or 8.3%. The increases in dollars and as a percentage of total revenue were primarily driven by the following: + Increase in acquisition and disposition-related costs of $19.8 million primarily related to our release from our lease for office space in Washington, DC in February 2025 + Decrease in total costs allocated from general and administrative expense of $11.4 million primarily related to a reductions in IT support and facilities costs, and the decreased headcount from our sale of EVERFI. Depreciation, facilities and IT support (including cybersecurity) costs are pooled and recorded to general and administrative expense and allocated to other lines of our statements of comprehensive income based on headcount. + Increase in third-party software costs of $3.6 million primarily related to investments in our internal cybersecurity program - Decrease in Security Incident-related expenses of $10.6 million largely related to decreases in loss contingency accruals. See Note 11 to our consolidated financial statements in this report for our discussion of the Security Incident. - Decrease in stock-based compensation costs of $5.4 million primarily due to a decrease in the grant date fair value of equity award grants, and to a lesser extent, our sale of EVERFI; partially offset by an increase primarily due to estimated overall Company performance against 2025 goals - Decrease in rent expense of $3.5 million primarily related to our release from our lease for office space in Washington, DC in February 2025 - Decrease in corporate costs of $2.3 million primarily related to a decrease in insurance premiums - Decrease in compensation costs other than stock-based compensation of $1.6 million primarily due to our sale of EVERFI 2025 Form 10-K 47 Table of Contents Blackbaud, Inc. Interest Expense Interest expense ($M) Percentages indicate expenses as a percentage of total revenue 2025 vs. 2024 Interest expense increased in dollars and as a percentage of total revenue during 2025 when compared to 2024, primarily due to our incremental borrowings to fund stock repurchases during 2024 and 2025 and the expiration of favorable interest rate swaps in October 2024. We currently expect interest expense for the full year 2026 to be approximately $62 million to $66 million although our interest expense in connection with the variable rate portion of our outstanding debt could increase in a rising interest rate environment. See Note 10 to our consolidated financial statements in this report for more information regarding our derivative instruments, which we use to manage our variable interest rate risk, and Item 7A. Quantitative and Qualitative Disclosures about Market Risk: Interest Rate Risk on page 63 for more information about our variable interest rate exposure and related risk. Other Income, Net Other income, net ($M) Percentages indicate other income, net as a percentage of total revenue 2025 vs. 2024 The decrease in other income, net in dollars and as a percentage of total revenue during 2025, when compared to 2024, was primarily due to a current year currency revaluation loss compared to a gain in the prior year and, to a lesser extent, by a decrease in interest income largely driven by lower year-over-year U.S. federal interest rates. See Note 8 to our consolidated financial statements in this report for more information regarding our other income. 48 2025 Form 10-K Table of Contents Blackbaud, Inc. Deferred Revenue The table below compares the components of deferred revenue from our consolidated balance sheets: (dollars in millions) December 31, 2025 December 31, 2024 Change Deferred revenue(1) 371.8  360.6  3.1  % Less: Long-term portion 2.8  2.0  37.9  % Current portion(1) $ 369.0  $ 358.5  2.9  % (1)The individual amounts for each year may not sum to total deferred revenue or current portion of deferred revenue due to rounding. To the extent that our customers are billed for our solutions and services in advance of delivery, we record such amounts in deferred revenue. Our recurring revenue contracts are generally for a term of three years at contract inception with three-year renewals thereafter, billed annually in advance and non-cancelable. We generally invoice our customers with recurring revenue contracts in annual cycles 30 days prior to the end each one-year period. Revenue from these arrangements is generally recognized ratably over the contract term. The increase in deferred revenue during the year ended December 31, 2025 was primarily due to billings related to contract renewals and new subscription sales of our cloud solutions. Historically, due to the timing of customer budget cycles, we have an increase in billings and customer contract renewals at or near the beginning of our third quarter. Generally, our lowest balance of deferred revenue during the year is at the end of our first quarter. Income Taxes Income tax provision (benefit) ($M) Percentages indicate effective income tax rates Our effective income tax rate may fluctuate quarterly and annually as a result of factors, including changes in tax law in jurisdictions where we conduct business, transactions entered into, changes in the geographic distribution of our earnings or losses, and our assessment of certain tax contingencies and valuation allowances. We have deferred tax assets for U.S. federal, U.S. state, and international net operating loss carryforwards, federal and state capital loss carryforwards and tax credits. The federal and state net operating loss and capital loss carryforwards are subject to various Internal Revenue Code limitations and applicable state tax laws. The foreign net operating loss carryforwards have a valuation allowance due to the uncertainty of realizing such carryforwards in the future. As of December 31, 2024, we recorded a valuation allowance against all of our U.S. deferred tax assets in excess of deferred tax liabilities due to combination of our cumulative pretax loss position and net deferred tax asset position resulting from divestiture of EVERFI. Our U.S. consolidated group remains in a three‑year cumulative pretax book loss position. As such, we intend to continue maintaining a valuation allowance on our U.S. net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. We file income tax returns in the U.S. for federal and various state jurisdictions as well as in foreign jurisdictions including Canada, the U.K., Australia, Ireland, Costa Rica and India. We are generally subject to U.S. federal income tax examinations for 2025 Form 10-K 49 Table of Contents Blackbaud, Inc. calendar tax years ending 2022 through 2025, as well as state and foreign income tax examinations for various years depending on statutes of limitations and net operating loss and/or tax credit utilization in those jurisdictions. 2025 vs. 2024 The increase in our effective income tax rate for year ended December 31, 2025, when compared to the same period in 2024, was primarily attributable to normalization of several non-recurring events in 2024, in which we had recorded the valuation allowance against all of our U.S. deferred tax assets in excess of deferred tax liabilities due to the combination of our cumulative pretax loss position and net deferred tax asset position resulting from our divestiture of EVERFI. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into U.S. federal income tax law. OBBBA permanently extends immediate expensing of research and development (“R&D”) expenditures under Internal Revenue Code Section 174 and provides transition rules for previously capitalized R&D costs. Under ASC 740, these changes modify the measurement of certain deferred tax assets (“DTAs”), particularly those arising from capitalized Section 174 expenditures. Additionally, in 2025, the valuation allowance decreased primarily due to the pre-tax income recorded during the current year as well as the enactment of the OBBBA, which resulted in the realizability of certain U.S. deferred tax assets. We intend to continue maintaining a full valuation allowance on our U.S. net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Management continues to evaluate the impact of future phases of OBBBA that will become effective beginning in 2026, including changes to international tax provisions and interest limitation rules; however, for 2025, no further material impact beyond the valuation allowance‑driven effects is expected. Non-GAAP Financial Measures The operating results analyzed below are presented on a non-GAAP basis. We use non-GAAP financial measures internally in analyzing our operational performance. Accordingly, we believe these non-GAAP measures are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. While we believe 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. In addition, 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 below exclude the impact of certain transactions because we believe they are not directly related to our operating performance in any particular period, but are for our long-term benefit over multiple periods. We believe that these non-GAAP financial measures reflect our ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. 50 2025 Form 10-K Table of Contents Blackbaud, Inc. Years ended December 31, (dollars in millions, except per share amounts) 2025 2024 GAAP Revenue $ 1,128.4  $ 1,154.6  GAAP gross profit $ 663.3  $ 631.4  GAAP gross margin 58.8  % 54.7  % Non-GAAP adjustments: Add: Stock-based compensation expense 11.5  14.1  Add: Amortization of intangibles from business combinations 27.6  57.0  Add: Employee severance 0.3  —  Subtotal(1) 39.4  71.0  Non-GAAP gross profit(1) $ 702.7  $ 702.5  Non-GAAP gross margin 62.3  % 60.8  % GAAP income (loss) from operations $ 190.8  $ (271.4) GAAP operating margin 16.9  % (23.5) % Non-GAAP adjustments: Add: Stock-based compensation expense 92.9  105.0  Add: Amortization of intangibles from business combinations 29.9  60.5  Add: Employee severance 1.9  —  Add: Acquisition and disposition-related costs(2) 25.9  6.1  Add: Security Incident-related costs(3) 3.1  13.7  Add: EVERFI impairment and disposition charges —  405.4  Subtotal(1) 153.7  590.6  Non-GAAP income from operations(1) $ 344.4  $ 319.2  Non-GAAP operating margin 30.5  % 27.6  % GAAP income (loss) before provision (benefit) for income taxes $ 131.8  $ (312.5) GAAP net income (loss) $ 115.0  $ (299.5) Shares used in computing GAAP diluted earnings (loss) per share 48,469,961  50,560,538  GAAP diluted earnings (loss) per share $ 2.37  $ (5.92) Non-GAAP adjustments: Add: GAAP income tax provision (benefit) 16.8  (12.9) Add: Total non-GAAP adjustments affecting income from operations 153.7  590.6  Non-GAAP income before provision for income taxes(1) 285.5  278.2  Assumed non-GAAP income tax provision(4) 69.9  68.2  Non-GAAP net income(1) $ 215.5  $ 210.0  Shares used in computing Non-GAAP diluted earnings per share 48,469,961  51,750,308  Non-GAAP diluted earnings per share $ 4.45  $ 4.06  (1)The individual amounts for each year may not sum to subtotal, non-GAAP gross profit, non-GAAP income from operations, non-GAAP income before provision for income taxes or non-GAAP net income due to rounding. (2)Includes charges of $24.3 million incurred during the twelve months ended December 31, 2025 related to the release from our lease for office space in Washington, DC (which was acquired as part of our acquisition of EVERFI in December 2021) and noncash impairment charges incurred during the twelve months ended December 31, 2024 related to the sublease of our Washington, DC office location prior to the EVERFI disposition. (3)Includes Security Incident-related costs incurred during the twelve months ended December 31, 2025 and 2024 of $3.1 million and $13.7 million, respectively, which included approximately $1.1 million and $6.8 million, respectively, in recorded accruals for loss contingencies. Recorded expenses consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims, negotiated settlements and accruals for certain loss contingencies. Not included in this adjustment were costs associated with enhancements to our cybersecurity program. As of December 31, 2025, we do not have any recorded liabilities for loss contingencies related to the Security Incident. (4)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. 2025 Form 10-K 51 Table of Contents Blackbaud, Inc. Non-GAAP organic revenue growth In addition, we use 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 our operating performance. We believe that these non-GAAP measures are useful to investors, as a supplement to GAAP measures, for evaluating the periodic growth of our business on a consistent basis. Each of these measures of non-GAAP organic revenue growth excludes incremental acquisition-related revenue attributable to companies, if any, acquired in the current fiscal year. For companies, if any, acquired in the immediately preceding fiscal year, each of these non-GAAP organic revenue growth 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 non-GAAP organic revenue growth measures excludes prior period revenue associated with divested businesses. 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. We believe this presentation provides a more comparable representation of our current business’ organic revenue growth and revenue run-rate. Years ended December 31, (dollars in millions) 2025 2024 GAAP revenue $ 1,128.4  $ 1,154.6  GAAP revenue growth (2.3) % Less: Non-GAAP revenue from divested businesses(1) —  (85.6) Non-GAAP organic revenue(2) $ 1,128.4  $ 1,069.1  Non-GAAP organic revenue growth 5.5  % Non-GAAP organic revenue(2) 1,128.4  1,069.1  Foreign currency impact on Non-GAAP organic revenue(3) (3.5) —  Non-GAAP organic revenue on constant currency basis(3) $ 1,124.8  $ 1,069.1  Non-GAAP organic revenue growth on constant currency basis 5.2  % GAAP recurring revenue $ 1,106.2  $ 1,128.2  GAAP recurring revenue growth (2.0) % Less: Non-GAAP recurring revenue from divested businesses(1) —  (82.6) Non-GAAP organic recurring revenue $ 1,106.2  $ 1,045.7  Non-GAAP organic recurring revenue growth 5.8  % Non-GAAP organic recurring revenue(2) $ 1,106.2  $ 1,045.7  Foreign currency impact on non-GAAP organic recurring revenue(3) (3.5) —  Non-GAAP organic recurring revenue on constant currency basis(3) $ 1,102.7  $ 1,045.7  Non-GAAP organic recurring revenue growth on constant currency basis 5.4  % (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. 52 2025 Form 10-K Table of Contents Blackbaud, Inc. Rule of 40 We define Rule of 40 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; employee severance; acquisition and disposition-related costs; Security Incident-related costs; and impairment and disposition charges. Years ended December 31, (dollars in millions) 2025 2024 GAAP net income (loss) $ 115.0  $ (299.5) Non-GAAP adjustments: Add: Interest, net 60.1  45.8  Add: GAAP income tax provision (benefit) 16.8  (12.9) Add: Depreciation 10.1  12.8  Add: Amortization of intangibles from business combinations 29.9  60.5  Add: Amortization of software development costs(1) 49.7  51.2  Subtotal(2) 166.5  157.4  Non-GAAP EBITDA(2) $ 281.5  $ (142.1) Non-GAAP EBITDA margin(3) 24.9  % Non-GAAP adjustments: Add: Stock-based compensation expense $ 92.9  $ 105.0  Add: Employee severance 1.9  —  Add: Acquisition and disposition-related costs(4) 25.9  6.1  Add: Security Incident-related costs(4) 3.1  13.7  Add: EVERFI impairment and disposition charges —  405.4  Subtotal(2) 123.8  530.1  Non-GAAP Adjusted EBITDA(2) $ 405.3  $ 388.0  Non-GAAP Adjusted EBITDA margin(5) 35.9  % Rule of 40(6) 41.4  % Non-GAAP adjusted EBITDA $ 405.3  $ 388.0  Foreign currency impact on Non-GAAP adjusted EBITDA (1.8) (1.6) Non-GAAP adjusted EBITDA on constant currency basis(7) $ 403.5  $ 386.4  Non-GAAP adjusted EBITDA margin on constant currency basis(7) 35.9  % Rule of 40 on constant currency basis(8) 41.1  % (1)Includes amortization expense related to software development costs and amortization expense from capitalized cloud computing implementation costs. (2)The individual amounts for each year may not sum to subtotal, non-GAAP EBITDA, non-GAAP adjusted EBITDA or non-GAAP adjusted EBITDA on a constant currency basis due to rounding. (3)Measured by GAAP revenue divided by non-GAAP EBITDA. (4)See additional details in the reconciliation of GAAP to Non-GAAP operating income above. (5)Measured by non-GAAP organic revenue divided by non-GAAP adjusted EBITDA. (6)Measured by non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. See Non-GAAP organic revenue growth table above. (7)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. (8)Measured by non-GAAP organic revenue growth on constant currency basis plus non-GAAP adjusted EBITDA margin on constant currency basis. See Non-GAAP organic revenue growth table above. 2025 Form 10-K 53 Table of Contents Blackbaud, Inc. Non-GAAP free cash flow and non-GAAP adjusted free cash flow 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. Non-GAAP adjusted 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, plus cash outflows related to the Security Incident. We believe non-GAAP free cash flow and non-GAAP adjusted free cash flow provides useful measures of the Company's operating performance. Non-GAAP adjusted free cash flow is not intended to represent and should not be viewed as the amount of residual cash flow available for discretionary expenditures. Years ended December 31, (dollars in millions) 2025 2024 GAAP net cash provided by operating activities $ 265.6  $ 296.0  GAAP operating cash flow margin 23.5  % 25.6  % Non-GAAP adjustments: Less: purchase of property and equipment (7.8) (7.4) Less: capitalized software development costs (54.2) (59.8) Non-GAAP free cash flow(1) $ 203.5  $ 228.8  Non-GAAP free cash flow margin 18.0  % 19.8  % Non-GAAP adjustments: Add: Security Incident-related cash flows, net of insurance 4.6  15.9  Non-GAAP adjusted free cash flow(1) $ 208.2  $ 244.7  Non-GAAP adjusted free cash flow margin 18.5  % 21.2  % (1)The individual amounts for each year may not sum to non-GAAP free cash flow or non-GAAP adjusted free cash flow due to rounding. Seasonality Our revenues normally fluctuate as a result of certain seasonal variations in our business. Our first quarter has historically been the seasonal low for bookings, with the second and fourth quarters historically being seasonally higher, and our bookings tend to be back-end loaded within individual quarters given our quarterly quota plans. Transactional revenue is non-contractual and less predictable given the susceptibility to certain drivers such as timing and number of events and marketing campaigns, as well as fluctuations in donation volumes and tuition payments. Our transactional revenue has historically been at its lowest in the first quarter due to the timing of customer fundraising initiatives and events. We have historically experienced seasonal highs during the fourth quarter due to year-end giving campaigns and during the second quarter when a large number of events are held. Our revenue from professional services has historically been lower in the first quarter when many of those services commence and in the fourth quarter due to the holiday season. As a result of these and other factors, our total revenue has historically been lower in the first quarter than in the remainder of our fiscal year, with the fourth quarter historically achieving the highest total revenue. Our expenses, other than transaction-based costs related to our payments services, do not vary significantly as a result of these factors, but do fluctuate on a quarterly basis due to varying timing of expenditures. Our cash flow from operations normally fluctuates quarterly due to the combination of the timing of customer contract billings and renewals, delivery of professional services and occurrence of customer events, as well as merit-based salary increases, among other factors. Historically, due to lower revenues in our first quarter, combined with the payment of certain annual vendor contracts, our cash flow from operations has been lowest in our first quarter. Due to the timing of customer contract renewals and student enrollments, many of which take place at or near the beginning of our third quarter, our cash flow from operations has generally been lower in our second quarter as compared to our third and fourth quarters. Partially offsetting these favorable drivers of cash flow from operations in our third and fourth quarters are base salary merit increases, which occur in July. In addition, deferred revenues can vary on a seasonal basis due to the timing of customer contract billings and renewals and student enrollments or significant acquisitions. Our cash flow from financing is negatively impacted in our first quarter when most of our equity awards vest, as we pay taxes on behalf of our employees related to the settlement or exercise of equity awards. 54 2025 Form 10-K Table of Contents Blackbaud, Inc. These patterns may change as a result of the continued shift to online giving, growth in volume of transactions for which we process payments, large dollar customer bookings and contract renewals, fluctuations in the timing of vendor payments, or as a result of acquisitions, new market opportunities, new solution introductions or other factors. Liquidity and Capital Resources The following table presents selected financial information about our financial position: (dollars in millions) December 31, 2025 December 31, 2024 Change Cash and cash equivalents $ 38.9  $ 67.6  (42.5) % Property and equipment, net 85.1  91.9  (7.5) % Software development costs, net 155.8  148.3  5.1  % Total carrying value of debt 1,109.7  1,075.0  3.2  % Working capital (252.0) (275.5) 8.5  % The following table presents selected financial information about our cash flows: Years ended December 31, (dollars in millions) 2025  2024  Change Net cash provided by operating activities $ 265.6  $ 296.0  (10.3) % Net cash used in investing activities (74.9) (73.4) 2.1  % Net cash used in financing activities (247.4) (139.4) 77.5  % Our principal sources of liquidity are our operating cash flow, funds available under the 2024 Credit Facilities and cash on hand. Our operating cash flow depends on continued customer renewal of our subscription and maintenance arrangements, market acceptance of our solutions and services, the volume and size of transactions for which we process payments and our customers' ability to pay. Based on current estimates of revenue and expenses, we believe that the currently available sources of funds and anticipated cash flows from operations will be adequate for at least the next twelve months to finance our operations, fund anticipated capital expenditures and meet our debt obligations. We also believe that we will be able to continue to meet our long-term cash requirements due to our anticipated cash flow from operations, solid financial position and ability to access capital from financial markets. To the extent we undertake future material acquisitions, investments or unanticipated capital or operating expenditures, we may require additional capital. In that context, we regularly evaluate opportunities to enhance our capital structure, including through potential debt or equity issuances. As a well-known seasoned issuer, we filed an automatic shelf registration statement for an undetermined amount of debt and equity securities with the SEC on January 10, 2025. Under this universal shelf registration statement we may offer and sell, from time to time, debt securities, common stock, preferred stock, depositary shares, warrants, stock purchase contracts and stock purchase units. Subject to certain conditions and pursuant to applicable SEC regulations, this registration statement is effective for three years from its date of filing with the SEC, or through January 9, 2028. At December 31, 2025, our total cash and cash equivalents balance included approximately $13.4 million of cash that was held by operations outside the U.S. While these funds may not be needed to fund our U.S. operations for at least the next twelve months, if we need these funds, we may be required to accrue and pay taxes to repatriate the funds. We currently do not intend nor anticipate a need to repatriate our cash held outside the U.S. Operating Cash Flow Throughout 2025 and 2024, our cash flows from operations were derived principally from: (i) our earnings from on-going operations prior to non-cash expenses such as depreciation, amortization, stock-based compensation, deferred taxes, amortization of deferred financing costs and debt discount and adjustments to our net provision for credit losses and sales returns, the EVERFI impairment charges, loss on disposition of business; and (ii) changes in our working capital. Working capital changes are comprised of changes in accounts receivable, prepaid expenses and other assets, trade accounts payable, accrued expenses and other liabilities and deferred revenue. 2025 Form 10-K 55 Table of Contents Blackbaud, Inc. 2025 vs. 2024 Net cash provided by operating activities decreased by $30.4 million during the year ended December 31, 2025, when compared to the same period in 2024, primarily due to a $51.5 million decrease in cash flow from operations associated with working capital, partially offset by a $21.0 million increase in net income adjusted for non-cash expenses. The decrease in cash flow from operations associated with working capital during 2025, when compared to 2024, was primarily due to fluctuations in the timing of vendor payments. On July 4, 2025, the United States enacted the OBBBA, which introduced significant changes to U.S. tax law. See Note 12 to our consolidated financial statements in this report for more information. OBBBA impacts meaningfully contributed to reducing U.S. cash taxes in 2025. We expect to continue to see meaningful reductions to cash taxes through 2027. U.S. state OBBBA conformity considerations (which continue to evolve as the states address the new Federal tax legislation) and the phase-in of the OBBBA international tax provisions in 2026 may continue to affect this cash reduction. Investing Cash Flow During 2026, we expect our total capital expenditures, including estimated outlays for capitalized software development costs, to be between approximately $60.0 million and $70.0 million. 2025 vs. 2024 Net cash used in investing activities of $74.9 million increased by $1.5 million during 2025, when compared to 2024. During 2025, we used $54.2 million for software development costs, which was a decrease of $5.5 million from cash spent during 2024. We spent $7.8 million of cash for purchases of property and equipment during 2025, which was relatively in line with cash spent in 2024. In addition, during 2025, we used net cash of $12.2 million for the disposition of a business compared to $1.2 million for the disposition of a business and $5.0 million for a minority investment in a business during 2024. Financing Cash Flow 2025 vs. 2024 During 2025, we had a net increase in borrowings of $34.7 million, primarily due to our stock repurchase program and to satisfy tax obligations of employees upon settlement of equity awards (see discussion below). During 2025, we repurchased $217.2 million of our common stock (including excise tax) compared to $418.0 million during 2024. We paid $40.4 million to satisfy tax obligations of employees upon settlement of equity awards during 2025 compared to $56.8 million during 2024. The amount of taxes paid by us on behalf of employees related to the settlement of equity awards varies from period to period based upon the timing of grants and vesting, as well as the market price for shares of our common stock at the time of settlement. Most of our equity awards currently vest in our first quarter. During 2025, cash flow from financing activities associated with changes in restricted cash due to customers decreased $25.6 million, compared to an increase of $47.0 million during 2024. This line in the statement of cash flows represents the change in the amount of restricted cash held and payable by us to customers from one period to the next. This restricted cash due to customers is not available to us for operational purposes. Stock repurchase program On December 1, 2025, our Board of Directors reauthorized, expanded and replenished our stock repurchase program by raising the total capacity under the program from $800.0 million to $1.0 billion available for repurchases. The program does not have an expiration date. Under the stock repurchase program, we are authorized to repurchase shares from time to time in accordance with applicable laws both on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and in privately negotiated transactions. The timing and amount of repurchases depends on several factors, including market and business conditions, the trading price of our common stock and the nature of other investment opportunities. The repurchase program may be limited, suspended or discontinued at any time without prior notice. 56 2025 Form 10-K Table of Contents Blackbaud, Inc. On December 2, 2025, we announced an increase in our expected fiscal year 2025 stock repurchase range to between 7.0% and 8.5% of our outstanding common stock as of December 31, 2024. During the year ended December 31, 2025, we repurchased 3,337,844 shares for $214.0 million. Including net share settlement of employee stock compensation, these repurchases represented approximately 7.9% of our outstanding common stock as of December 31, 2024. As of December 31, 2025, $960.6 million remained available for repurchases under the program. During 2026, we intend to repurchase between 5.0% and 10.0% of our outstanding common stock as of December 31, 2025 under our existing stock repurchase program. Over the long term, we expect stock repurchases to remain an important component of our capital allocation strategy, subject to market conditions, business performance, leverage considerations, U.S. excise taxes and other factors. We anticipate utilizing at least 50% of our free cash flow from 2026 to 2030 for stock repurchases. See discussion of our Non‑GAAP Financial Measures above. 2024 Credit Facilities Historically, we have drawn on our credit facility from time to time to help us meet financial needs primarily due to the seasonality of our cash flows from operations and financing for business acquisitions. At December 31, 2025, our available borrowing capacity under the 2024 Credit Facilities was $413.6 million. The 2024 Credit Facilities mature in April 2029. At December 31, 2025, the carrying amount of our debt under the 2024 Credit Facilities was $1.1 billion. Our average daily borrowings were $1.1 billion during 2025. The term loans under the 2024 Credit Facilities and our other debt require periodic principal payments. The balance of the term loans and any amounts drawn on the revolving credit loans are due upon maturity of the 2024 Credit Facilities in April 2029. Certain real estate loans (as described in Note 9 to our audited consolidated financial statements in this report) also require periodic principal payments and the balances of the real estate loans are due upon maturity in April 2038. The following is a summary of the financial covenants under the 2024 Credit Facilities: Financial Covenant Requirement Ratio as of December 31, 2025 Net Leverage Ratio(1) ≤ 3.75 to 1.00 2.52 to 1.00 Interest Coverage Ratio ≥ 2.50 to 1.00 6.27 to 1.00 (1)Under the terms of the 2024 Credit Facilities, the Net Leverage Ratio requirement may be increased by up to 0.50 provided we satisfy certain requirements, including a permitted business acquisition, and provided that the maximum Net Leverage Ratio shall not exceed 4.25 to 1.00. Under the 2024 Credit Facilities, we also have restrictions on our ability to declare and pay dividends and our ability to repurchase shares of our common stock. In order to pay any cash dividends and/or repurchase shares of stock: (i) no default or event of default shall have occurred and be continuing under the 2024 Credit Facilities, and (ii) our pro forma net leverage ratio, as set forth in the 2024 Credit Facilities, must be 0.25 less than the net leverage ratio requirement at the time of dividend declaration or stock repurchase. At December 31, 2025, we were in compliance with our debt covenants under the 2024 Credit Facilities. See Note 9 to our consolidated financial statements in this report for additional information regarding the 2024 Credit Facilities. 2025 Form 10-K 57 Table of Contents Blackbaud, Inc. Commitments and Contingencies As of December 31, 2025, we had contractual obligations with future minimum commitments as follows: Payments due by period (in millions) Less than 1 year More than 1 year Total(1) Recorded contractual obligations: Debt $ 22.7  $ 1,087.8  $ 1,110.4  Operating leases 1.9  5.1  7.0  Interest payments on debt 1.0  2.3  3.4  Unrecorded contractual obligations: Purchase obligations 94.4  69.7  164.0  Interest payments on debt 58.1  148.1  206.2  Total contractual obligations(1) $ 178.0  $ 1,313.0  $ 1,491.1  (1)The individual amounts may not sum to the total due to rounding. Debt As of December 31, 2025, we had total remaining principal payments of approximately $1.1 billion. These payments represent principal payments only, under the following assumptions: (i) that the amounts outstanding under the 2024 Credit Facilities, our real estate loans and our other debt at December 31, 2025 will remain outstanding until maturity, with minimum payments occurring as currently scheduled, and (ii) that there are no assumed future borrowings on the revolving credit loans under the 2024 Revolving Facility for the purposes of determining minimum commitment amounts. See Note 9 to our consolidated financial statements in this report for more information. Interest payments on debt In addition to principal payments, as of December 31, 2025, we expect to pay interest expense over the life of our debt obligations of approximately $209.5 million. These payments represent our estimated future interest payments on debt using our debt balances and the related weighted average effective interest rates as of December 31, 2025, which includes the effect of interest rate swap agreements. The actual interest expense recognized in our consolidated statements of comprehensive income (loss) will depend on the amount of debt, the length of time the debt is outstanding and the interest rate, which could be different from our assumptions on our remaining principal payments described above. Operating leases As of December 31, 2025, we had remaining operating lease payments of $7.0 million. These payments have not been reduced by sublease income, incentive payments, reimbursement of leasehold improvements or the amount representing imputed interest. Our operating leases are generally for corporate offices, subleased offices and certain equipment and furniture. Given our Remote-Flexible workforce strategy and real estate footprint optimization efforts, we do not anticipate entering any new, material operating leases for offices for the foreseeable future. See Note 11 to our consolidated financial statements in this report for more information. Purchase obligations As of December 31, 2025, we had remaining purchase obligations of $164.0 million. These purchase obligations are for third-party technology used in our solutions and for other services we purchase as part of our normal operations. In certain cases, these arrangements require a minimum annual purchase commitment by us. Our purchase obligations are not recorded as liabilities on our consolidated balance sheets as of December 31, 2025, as we had not received the related services. See Note 11 to our consolidated financial statements in this report for more information. 58 2025 Form 10-K Table of Contents Blackbaud, Inc. Other commitments In connection with the settlement of the multi-state Attorneys General investigation, the California Attorney General investigation and the FTC investigation relating to the Security Incident, as discussed in Note 11 to our consolidated financial statements in this report, we agreed to implement certain improvements to of our cybersecurity programs and tools through May 2044. We have completed the required program improvements, and our remaining obligations primarily relate to ongoing maintenance and updates. The currently anticipated costs to comply with these ongoing obligations are primarily expected to be expensed as incurred. Foreign Currency Exchange Rates Approximately 16% of our total revenue for 2025 was generated from operations outside the U.S. We do not have significant operations in countries in which the economy is considered to be highly inflationary. Our consolidated financial statements are denominated in U.S. dollars and, accordingly, changes in the exchange rate between foreign currencies and the U.S. dollar will affect the translation of our subsidiaries’ financial results into U.S. dollars for purposes of reporting our consolidated financial results. The accumulated currency translation adjustment, recorded within accumulated other comprehensive loss as a component of stockholders’ equity, was a loss of $3.8 million as of December 31, 2025 and a loss of $12.7 million as of December 31, 2024. We have entered into foreign currency forward contracts to hedge a portion of the foreign currency exposure that arises on translation of our investments denominated in British Pounds into U.S. dollars. The vast majority of our contracts are entered into by our U.S. or U.K. entities. The contracts entered into by the U.S. entity are almost always denominated in U.S. dollars or Canadian dollars, and contracts entered into by our U.K., Australian and Irish subsidiaries are generally denominated in British Pounds, Australian dollars and Euros, respectively. Historically, as the U.S. dollar weakened, foreign currency translation resulted in an increase in our revenues and expenses denominated in non-U.S. currencies. Conversely, as the U.S. dollar strengthened, foreign currency translation resulted in a decrease in our revenues and expenses denominated in non-U.S. currencies. During 2025, foreign translation resulted in increases in our revenues and expenses denominated in non-U.S. currencies. Though we have exposure to fluctuations in currency exchange rates, primarily those between the U.S. dollar and both the British Pound and Canadian dollar, the impact has generally not been material to our consolidated results of operations or financial position. During 2025, the fluctuation in foreign currency exchange rates increased our total revenue and our income from operations by $3.5 million and $2.1 million, respectively. We have entered into foreign currency forward contracts to hedge revenues denominated in the Canadian dollar against changes in the exchange rate with the U.S. dollar. We will continue monitoring such exposure and take action as appropriate. To determine the impacts on revenue (or income from operations) from fluctuations in currency exchange rates, current period revenues (or income from operations) from entities reporting in foreign currencies were translated into U.S. dollars using the comparable prior year period's weighted average foreign currency exchange rates. These impacts are non-GAAP financial information and are not in accordance with, or an alternative to, information prepared in accordance with GAAP. Critical Accounting Estimates Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we reconsider and evaluate our estimates and assumptions. We base our estimates on historical experience, current trends and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could materially differ from any of our estimates under different assumptions or conditions. Our significant accounting policies are discussed in Note 2 to our consolidated financial statements in this report. We believe the accounting estimates listed below are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. 2025 Form 10-K 59 Table of Contents Blackbaud, Inc. Revenue Recognition Description Judgments and Uncertainties Effect if Actual Results Differ  From Assumptions See Note 2 to our consolidated financial statements in this report for a complete discussion of our revenue recognition policies. Revenues are recognized when control of our services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We determine revenue recognition through the following steps: (1) Identification of the contract, or contracts, with a customer; (2) Identification of the performance obligations in the contract; (3) Determination of the transaction price; (4) Allocation of the transaction price to the performance obligations in the contract; and (5) Recognition of revenue when, or as, we satisfy a performance obligation. We have not made any material changes in the accounting methodology we use to recognize revenue during the year ended December 31, 2025. Our revenue recognition accounting methodology may contain uncertainties because it could require us to make significant estimates and assumptions, and to apply judgment for certain customer contracts. For example, for certain arrangements that have multiple performance obligations, we may need to exercise judgment and use estimates in order to (1) determine whether performance obligations are distinct and should be accounted for separately; (2) determine the standalone selling price of each performance obligation; (3) allocate the transaction price among the various performance obligations on a relative standalone selling price basis; and (4) determine whether revenue for each performance obligation should be recognized at a point in time or over time. If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of revenue or deferred revenue that we report in a particular period. 60 2025 Form 10-K Table of Contents Blackbaud, Inc. Business Combinations Description Judgments and Uncertainties Effect if Actual Results Differ  From Assumptions We allocate the purchase price of an acquired business to its identifiable assets acquired and liabilities assumed at the acquisition date based upon their estimated fair values. The excess of the purchase price over the amount allocated to the identifiable assets acquired and liabilities assumed, if any, is recorded as goodwill. We use available information to estimate fair values. We typically engage outside appraisal firms to assist in the fair value determination of long-lived and identifiable intangible assets, and any other significant assets or liabilities. We adjust the preliminary purchase price allocation, as necessary, up to one year after the acquisition closing date as we obtain new information about facts and circumstances that existed as of the closing date. We have not made any material changes in the accounting methodology we use for business combinations during the year ended December 31, 2025. Our purchase price allocation methodology contains uncertainties because it requires us to make significant estimates and assumptions, and to apply judgment to estimate the fair value of assets acquired and liabilities assumed, especially with respect to long-lived and intangible assets. Management estimates the fair value of assets acquired and liabilities assumed based on quoted market prices, the carrying value of the acquired assets and widely accepted valuation techniques, including discounted cash flows, market multiple analyses and replacement cost. We apply significant judgment in estimating the fair value of intangible assets acquired, which involves the use of significant assumptions. Significant assumptions used in the valuation of customer relationships include future revenue and operating expenses, customer attrition rates, contributory asset charges, tax amortization benefit, and discount rates. Significant assumptions used in the valuation of certain developed technology assets include future revenue, proprietary technology obsolescence curve, royalty rate, and discount rate. Significant assumptions used in the valuation of marketing assets include assumptions about the period of time the brand will continue to be valuable, royalty rate, and discount rate. Significant assumptions used in the valuation of content intangible assets include cost-based assumptions. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable, and unanticipated events and changes in circumstances may occur. If actual results are materially different than the assumptions we used to determine fair value of the assets acquired and liabilities assumed through a business combination as well as the estimated useful lives of the acquired intangible assets, it is possible that adjustments to the carrying values of such assets and liabilities will have a material impact on our financial position and results of operations. See Note 3 to our consolidated financial statements in this report for information regarding our business acquisitions. 2025 Form 10-K 61 Table of Contents Blackbaud, Inc. Income Taxes Description Judgments and Uncertainties Effect if Actual Results Differ  From Assumptions We make estimates and judgments in accounting for income taxes. Our income tax returns, like those of most companies, are periodically audited by domestic and foreign tax authorities. We measure and recognize uncertain tax positions. To recognize uncertain tax positions, we must first determine if it is more likely than not that the position will be sustained upon audit. We must then measure the benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. We make estimates in determining tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial reporting purposes. We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized. We have not made any material changes in the accounting methodology we use to assess income tax during the year ended December 31, 2025. The calculation of our income tax provision requires estimates due to transactions, credits and calculations where the ultimate tax determination is uncertain. Uncertainties arise as a consequence of the actual source of taxable income between domestic and foreign locations, the outcome of tax audits and the ultimate utilization of tax credits. Our effective income tax rate is also affected by changes in the geographic distribution of our earnings or losses, changes in tax law in jurisdictions where we conduct business, changes in tax laws and policies in jurisdictions where we conduct business, tax effects of nondeductible or nontaxable items and changes in valuation allowances. Significant judgment is required in the identification and measurement of uncertain tax positions. Our liability for unrecognized tax benefits contains uncertainties because management is required to make assumptions and to apply judgment to estimate the exposures associated with our various filing positions. In assessing the adequacy of a recorded valuation allowance significant judgment is required. We consider all positive and negative evidence and a variety of factors including the scheduled reversal of deferred tax liabilities, historical and projected future taxable income, and prudent and feasible tax planning strategies. Although we believe that the judgments and estimates discussed herein are reasonable, actual results could differ, and we may be exposed to losses or gains that could be material. To the extent actual results differ from estimated amounts recorded, such differences will impact the income tax provision in the period in which the determination is made. If we determine there is less than a 50% likelihood that we will be able to use a deferred tax asset in the future in excess of its net carrying value, then an adjustment to the deferred tax asset valuation allowance is made to increase income tax expense, thereby reducing net income in the period such determination was made. Long-lived Assets and Intangible Assets Other Than Goodwill Description Judgments and Uncertainties Effect if Actual Results Differ  From Assumptions We review our long-lived assets and intangible assets other than goodwill for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. If such events or changes in circumstances occur, we use the undiscounted cash flow method to determine whether our long-lived and intangible assets other than goodwill are impaired. To the extent that the carrying value of the asset or asset group exceeds the undiscounted cash flows over the estimated remaining life of the asset, we measure the impairment using discounted cash flows. We have not made any material changes in the accounting methodology we use to assess impairment loss during the year ended December 31, 2025. In estimating future cash flows, assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of cash flows from other asset groups. When measuring impairment of an asset or asset group using discounted cash flows, we make assumptions and apply judgment in estimating future cash flows and asset or asset group fair values, including annual revenue growth rates, a terminal year growth rate and selecting a discount rate that reflects the risk inherent in future cash flows. During 2025, there were no significant non-recurring fair value adjustments to our long-lived assets, intangible assets, goodwill or operating lease ROU assets. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to assess impairment losses. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to an impairment charge that could materially adversely impact our consolidated financial position and results of operations. Recently Issued Accounting Pronouncements For a discussion of the impact that recently issued accounting pronouncements are expected to have on our financial position and results of operations when adopted in the future, see Note 2 to our consolidated financial statements in this report. 62 2025 Form 10-K Table of Contents Blackbaud, Inc.