Blackbaud (BLKB) investor relations material

Executive summary

• Achieved Q2 2026 revenue of $290.6M, up 3% year-over-year, with strong execution, operational efficiency, and accelerated AI innovation, including five new AI products and sector partnerships.

• Recurring revenue accounted for 98% of Q2 2026 total revenue, with improved contract terms and high retention rates above 90%.

• Aggressive share repurchases reduced shares outstanding by approximately 15% since Q4 2023, with $850M remaining authorized.

• Healthy mix of new customer wins, competitive takeaways, and returning customers across multiple verticals, supported by AI-driven solutions.

• Earned recognition for AI innovation, sustainability, and workplace excellence from multiple organizations.

Financial highlights

• Q2 2026 non-GAAP organic revenue grew 3% to $290.6M; non-GAAP adjusted EBITDA was $110.3M (38.0% margin); non-GAAP EPS was $1.33.

• GAAP net income was $35.4M (diluted EPS $0.79); non-GAAP net income was $59.7M.

• Free cash flow rose 46% year-over-year to $75.3M in Q2; non-GAAP free cash flow margin was 25.9%.

• Rule of 40 score reached 41.0% for H1 2026.

• Operating cash flow for H1 2026 was $142.5M, up 108.6% year-over-year.

Outlook and guidance

• FY26 guidance targets GAAP revenue of $1.173B–$1.179B, non-GAAP adjusted EBITDA of $430M–$438M, non-GAAP EPS of $5.15–$5.25, and free cash flow of $280M–$290M.

• Performance expected to finish in the upper half of guidance, with EPS and free cash flow at or above the high end.

• Long-term targets: 4–6% annual organic revenue growth, 6–8% adjusted EBITDA growth, 13%+ non-GAAP EPS CAGR, and 40%+ adjusted EBITDA margin from 2026–2030.

• At least 50% of cumulative free cash flow from 2026–2030 to be used for share repurchases.

• Temporary pressure on gross dollar retention in 2026 due to a larger renewal cohort, with recovery to 91–92% by end of 2027.