10-Q · April 29, 2026
Blackbaud, Inc. reported solid revenue growth of 4.2% in Q1 2026, reaching $281.4 million, driven primarily by increases in contractual and transactional recurring revenues. The company also showed notable improvements…
Earnings analysis · 10-Q
BLKB earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
Blackbaud delivered Q2 revenue of $290.6 million, up 3.0% year over year, alongside stronger GAAP profitability: gross margin expanded to 61.3%, operating margin reached 21.3%, and GAAP EPS rose to $0.79 from $0.55.…
Read full summary
Blackbaud delivered Q2 revenue of $290.6 million, up 3.0% year over year, alongside stronger GAAP profitability: gross margin expanded to 61.3%, operating margin reached 21.3%, and GAAP EPS rose to $0.79 from $0.55. First-half cash generation improved materially, with $142.5 million of operating cash flow and $112.3 million of free cash flow, supporting $110.1 million of share repurchases. Offsetting these strengths, management flagged temporary retention pressure from a 2026 renewal cohort with approximately 40% more recurring revenue up for renewal and ended the quarter with $1.15 billion of debt.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.79
- Segment
- Contractual recurring revenue increased $6.2 million year over year in Q2 2026, primarily from pricing initiatives and cloud-solution demand.
- Segment
- Transactional recurring revenue increased $2.8 million year over year in Q2 2026, primarily from higher Blackbaud Integrated Payments and Blackbaud Tuition Management volumes.
What stood out
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Revenue and recurring revenue grew
Q2 revenue was $290.6 million, up $8.6 million (3.0%) year over year. Recurring revenue reached $285.3 million, up 3.3%, representing the principal source of growth.
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GAAP margins expanded
GAAP gross margin expanded 160 basis points year over year to 61.3% as cost of revenue declined $1.2 million (1.1%) despite higher revenue. GAAP operating margin rose 100 basis points to 21.3%, with operating income up $4.7 million to $62.0 million.
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Earnings increased year over year
GAAP diluted EPS increased to $0.79 from $0.55 a year earlier, while non-GAAP diluted EPS increased to $1.33 from $1.22. Net income rose $8.9 million to $35.4 million.
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Cash conversion improved sharply
First-half operating cash flow more than doubled to $142.5 million from $68.3 million, and non-GAAP free cash flow rose to $112.3 million from $39.2 million. The 19.6% free-cash-flow margin was 12.5 percentage points above the prior-year 7.1%.
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Substantial capital return
The company repurchased $110.1 million of stock in the first six months, or 2,398,852 shares; including net settlement of employee equity compensation, activity represented about 6.2% of shares outstanding at December 31, 2025. Authorization remaining was $850.4 million at June 30.
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AI commercialization and adoption advancing
Management continues to invest in AI: the fundraising development agent entered general availability, with annual subscription pricing generally in the tens of thousands of dollars, and more than half of Raiser's Edge NXT customers use machine-learning-enabled donor prospecting capabilities.
What to watch
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Larger renewal cohort pressures retention
Gross dollar retention was approximately 91% for the 12 months ended June 30, 2026, below the December 31, 2025 trailing-12-month rate. Management expects temporary pressure because the 2026 renewal cohort has roughly 40% more CARR coming due than the 2025 cohort.
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Leverage increased alongside buybacks
Debt carrying value increased $40.3 million, or 3.6%, from $1.1097 billion at December 31, 2025 to $1.1500 billion at June 30, 2026, following a $28.6 million net increase in borrowings. FY2026 interest expense is expected at $62 million to $66 million.
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Tax and liquidity headwinds remain
Management expects evolving state conformity with OBBBA and phase-in of international provisions to partly offset cash-tax reductions in 2026 and 2027, and expects a material impact in both fiscal years. Cash declined $4.5 million to $34.4 million while working capital remained negative at $(232.2) million.
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Investment spending can constrain margins
Sales, marketing and customer-success expense rose $2.2 million (5.0%) year over year, including a $2.1 million increase in advertising for JustGiving and AI-offering awareness. Research and development expense also increased $1.3 million (3.8%) amid continued AI, security, and cloud investments.
Management's outlook
The 10-Q does not provide company-wide revenue or EPS guidance. Management quantified expected FY2026 interest expense at approximately $62 million to $66 million, expects gross-dollar retention to improve after the larger 2026 renewal cohort and return toward historical levels by the end of 2027, and expects capitalized software-development spending to remain relatively consistent in the near term.
Earlier filings 4
10-K · February 18, 2026
Blackbaud positions itself as the leading provider of AI-powered cloud software for social impact, emphasizing AI integration (Intelligence for Good®, Blackbaud AI Chat, Agents for Good™) and a “land and expand”…
10-Q · April 30, 2025
Blackbaud reported revenue of $270.661M for the quarter ended March 31, 2025, down versus prior-year Q1 revenue of $279.250M but with improved gross profit and operating income margins. Gross profit rose to $155.846M…
10-Q · July 31, 2024
Blackbaud reported Q2 revenue of $287,286 (dollars in thousands) and recurring revenue of $281,376 (thousands), up vs. prior-year revenue of $271,042 (thousands). Profitability improved materially: gross profit rose to…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.