Blackbaud (NASDAQ:BLKB) reported second-quarter 2026 results that met its operating plan, with management pointing investors toward the upper end of its full-year financial guidance ranges as the company expands its artificial intelligence product portfolio and continues share repurchases.
Chief Executive Officer, President and Vice Chairman Mike Gianoni said the company delivered planned revenue and financial targets during the quarter while maintaining a focus on efficiency and product innovation. He said the updated outlook does not assume a meaningful revenue contribution this year from the company’s five newly launched or announced AI products.
Second-Quarter Results and Outlook
Chief Financial Officer Chad Anderson said second-quarter organic revenue rose 3% year over year to $291 million. Non-GAAP adjusted EBITDA was $110 million, producing an adjusted EBITDA margin of about 38%. Non-GAAP earnings per share increased 9% to $1.33, while free cash flow rose 46% year over year, or about $24 million, to $75 million.
Anderson said the company expected some moderation in organic revenue growth during 2026 because of the size and timing of certain renewal cohorts. The second-quarter performance was in line with those expectations, he said.
Blackbaud reaffirmed its full-year guidance ranges and now expects to finish in the upper half of its outlook for revenue, adjusted EBITDA, earnings per share and free cash flow. For EPS and free cash flow, Anderson said the company expects results to be at or above the high end of its ranges. Management expects results to be weighted toward the second half of the year, particularly the fourth quarter.
The company said its newly introduced platform fee on certain online giving form transactions is expected to contribute to the second-half weighting, with the largest benefit anticipated in the fourth quarter. Customers can use an existing donor-cover option under which donors pay transaction-related fees, according to Anderson.
Management also reiterated that Blackbaud’s 2026 contractual recurring renewal cohort is approximately 40% larger than the prior-year cohort. The company expects a near-term decline in reported gross dollar retention as more recurring revenue comes up for renewal, before retention returns to a more recent range of 91% to 92% by the end of 2027.
AI Products and Customer Adoption
Gianoni highlighted the company’s Development Agent, a fundraising-focused agentic AI product that became generally available ahead of schedule earlier in 2026. The product identifies prospective and dormant donors outside major gift officers’ portfolios and conducts personalized, multi-touch engagement sequences under human supervision.
According to Gianoni, early production results showed reply rates and message-open metrics above industry benchmarks, along with average attributable gift sizes above industry norms. He said customers are using the product to engage a broader donor base without adding headcount.
Blackbaud has also announced four additional “Agents for Good” offerings that are planned for the coming months:
- Data Health Agent, designed to identify duplicate records, confirm contact information and address constituent life changes within fundraising solutions.
- Admissions Agent, intended to support personalized admissions experiences for independent K-12 schools.
- Digital Marketing Agent, designed to help customers select audiences, generate tailored content and optimize outreach across channels.
- Accounts Payable Agent, which Blackbaud said will automate invoice intake and optimize payments within Financial Edge NXT.
Gianoni said the company plans to unveil further details about a cloud-native, AI-first connected platform at its bbcon 2026 event in Columbus, Ohio, at the end of September. He described the planned platform as a connected system designed to link products, learn from interactions and retain human control over AI-driven actions.
More than half of Raiser’s Edge NXT customers use machine-learning-enabled donor prospecting, Gianoni said. Those capabilities generate tens of billions of predictions annually within Blackbaud’s systems, he added.
Sales, Renewals and Contract Terms
Management cited a mix of new customer wins, cross-sales and competitive displacements during the quarter. New customers included Nelson University, which selected Raiser’s Edge NXT and analytics capabilities, and the East Hampton Historical Society, which selected Raiser’s Edge NXT for fundraising modernization.
Blackbaud also cited returning customers that replaced competing providers. Jacksonville Zoo adopted Raiser’s Edge NXT and Prospect Insights after using an incumbent point solution, while Centre for Autism Services Alberta selected Financial Edge NXT after using a horizontal accounting provider.
During the question-and-answer session, Gianoni said customer win-backs were being supported by innovation in Blackbaud’s core products and embedded AI capabilities. He also said the company is exceeding its internal sales-bookings plans and seeing favorable win rates across several areas, including K-12, nonprofit, higher education and its YourCause business.
Blackbaud said approximately 90% of contractual recurring revenue is now on contracts of three years or longer, while 25% is on contracts of at least four years. Gianoni noted that only a few years ago, more than half of renewal volume came from one-year customer contracts.
Margins and Capital Allocation
The company reiterated long-term targets for 2026 through 2030 that include 4% to 6% annual organic total revenue growth, 6% to 8% annual adjusted EBITDA growth and adjusted EBITDA margins above 40%. Gianoni said potential revenue upside could come from viral giving events and new product launches, including the company’s AI agent offerings.
Anderson said Blackbaud continues to pursue margin expansion through workforce strategy initiatives, technology modernization and other operational measures. He added that the company has not incorporated meaningful AI-driven efficiency gains into its guidance, although management is applying AI across engineering, sales, marketing, customer support and back-office functions.
During the first half of 2026, including the net share settlement of employee stock compensation, Blackbaud repurchased just over 6% of its shares outstanding as of Dec. 31, 2025, Anderson said. Since the fourth quarter of 2023, the company has offset all dilution from stock-based compensation and reduced shares outstanding by about 15%.
Blackbaud expects to allocate at least 50% of cumulative free cash flow generated from 2026 through 2030 to share repurchases, while retaining flexibility for additional repurchases, debt reduction and strategic tuck-in acquisitions.
About Blackbaud (NASDAQ:BLKB)
Blackbaud, Inc is a leading provider of cloud software, services and data intelligence solutions designed specifically for the social good community. The company’s main offerings include fundraising and relationship management platforms, financial management systems, grant and award management tools, and advanced analytics. Its flagship products—such as Raiser’s Edge NXT, Blackbaud Financial Edge NXT and Blackbaud NetCommunity—help nonprofit organizations, educational institutions, healthcare providers and foundations streamline donor engagement, optimize financial operations and measure program impact.
Founded in 1981 and headquartered in Charleston, South Carolina, Blackbaud has grown from a small technology startup into a global specialist in nonprofit software.
