Blackbaud (NASDAQ:BLKB) reported third-quarter 2026 revenue growth of 4.1% to $293 million, while non-GAAP adjusted EBITDA reached $111 million and non-GAAP earnings per share increased 24% to $1.36. The company also generated $126 million in free cash flow during the quarter, exceeding its prior expectations, executives said on the company’s earnings call.
Chief Executive Officer Mike Gianoni said the company expects to finish 2026 in the upper half of its guidance range for revenue and adjusted EBITDA. For earnings per share and free cash flow, Blackbaud expects results at or above the high end of its guidance ranges.
“We delivered another quarter of solid execution against our operating plan, with earnings per share and cash flow coming in better than expected,” Gianoni said.
AI platform and fundraising model announced
At its bbcon 2026 event, Blackbaud announced Platform for Good, a unified operating system intended to connect the company’s products, data, AI capabilities and sector expertise. Gianoni said the platform is structured around a data core, an intelligence layer and an action layer that supports AI assistants, agents and workflows with human oversight.
The company also introduced Lantern, a domain-specific language model for fundraising developed through a strategic collaboration with Databricks. According to Gianoni, Lantern is trained on synthetic scenarios modeled on Blackbaud’s Social Impact Signal Graph and is designed to understand fundraising concepts such as donor retention, upgrade paths and lifetime relationships.
Lantern is expected to begin powering selected Raiser’s Edge NXT and Agents for Good capabilities in 2027, with broader availability across Platform for Good planned thereafter. Gianoni emphasized that Lantern does not use customer-specific data, instead relying on synthetically created data designed to mimic customer patterns.
Blackbaud’s first agentic product, the Development Agent, became available earlier in 2026. The product is designed to help fundraising teams identify and engage donors outside a major gift officer’s portfolio, subject to human supervision. The company also announced enhancements to the Development Agent and introduced the Data Health Agent, which is intended to identify and address data issues through review-and-approve workflows.
Gianoni said Blackbaud is signing customers to early-adopter programs for its Data Health Agent and an AI Marketing platform, with general availability for those offerings expected early next year. He said the company has begun closing Raiser’s Edge NXT contracts where customer interest in the Development Agent helped drive adoption of the core fundraising platform.
However, Blackbaud’s 2026 guidance does not include a meaningful revenue contribution from its new AI products. Gianoni described Agents for Good and Lantern commercialization as potential upside over time.
Core product investments and customer activity
Alongside its AI initiatives, Blackbaud said it continues to invest in the core systems used by fundraising, finance, education and grant-making customers. The company unveiled a rebuilt version of Raiser’s Edge NXT, which Gianoni described as a native-cloud, AI-powered platform with embedded intelligence, automation and connected data.
New Raiser’s Edge NXT capabilities include AI tools designed to identify prospective donors and giving signals, as well as a Strategy Assistant that provides benchmarks and recommendations within customer workflows. The platform draws on more than $1 trillion in giving history tracked through Raiser’s Edge NXT, Gianoni said.
The company also announced Blackbaud Marketing, embedded within Raiser’s Edge NXT, as well as a next-generation Payment Assistant developed through a partnership with BILL. In higher education, Blackbaud introduced a connected-campus solution built with Student First.
Blackbaud cited several customer wins during the quarter, including a replacement of a global CRM system at California State University, Chico, with Raiser’s Edge NXT. The company also said it signed a new customer for both Raiser’s Edge NXT and the AI Development Agent, and closed a seven-figure, multiyear enterprise agreement with International Schools Partnership, which operates more than 100 schools globally.
Approximately 90% of Blackbaud’s contractual recurring revenue is now on contracts of at least three years, while roughly 25% is on contracts of four years or longer, up from 20% earlier in the year, Gianoni said.
Retention, transaction revenue and productivity initiatives
Chief Financial Officer Chad Anderson said third-quarter results reflected demand for the company’s subscription-led products and growth in transaction revenue. He cautioned that transactional revenue can vary by quarter and that Blackbaud’s outlook does not assume viral giving events.
Blackbaud introduced a platform fee within its transactional revenue business during the third quarter. Anderson said the expected contribution from that fee is included in the company’s 2026 outlook and should support transaction revenue growth through the first half of 2027.
The company also continues to work through an unusually large renewal cohort. Anderson said Blackbaud’s 2026 contractual recurring-revenue renewal cohort is approximately 40% larger than last year, affecting reported gross dollar retention and moderating contractual recurring-revenue growth through the first half of 2027.
For 2027, Blackbaud expects its recurring-revenue renewal cohort to be nearly 25% smaller than in 2026. The company expects gross dollar retention to return to its historical range of 91% to 92% by the end of 2027.
- Third-quarter revenue: $293 million, up 4.1%
- Non-GAAP adjusted EBITDA: $111 million
- Adjusted EBITDA margin: 38%
- Non-GAAP EPS: $1.36, up 24%
- Free cash flow: $126 million
Blackbaud repurchased just over 7% of its common shares outstanding during the first nine months of 2026, including the net share settlement of employee stock compensation. Since the fourth quarter of 2023, the company has reduced common shares outstanding by approximately 16%, according to Anderson.
Its debt leverage declined from 2.7 times at the end of the first quarter to just under 2.3 times in the third quarter. Looking through 2030, Blackbaud plans to allocate at least 50% of cumulative free cash flow toward share repurchases, while retaining flexibility for debt reduction and potential tuck-in acquisitions.
The company expects to close its remaining two company-operated co-location data centers by year-end, completing a multiyear infrastructure modernization effort. Anderson said related financial benefits are expected to begin in 2027 and accrue over time. Blackbaud is also expanding a global capability center in India and expects $8 million to $10 million in full-year workforce transition costs, primarily reflecting cash impacts in the fourth quarter from a voluntary separation program.
Blackbaud reiterated its longer-term targets of 4% to 6% annual organic revenue growth, 6% to 8% annual adjusted EBITDA growth, adjusted EBITDA margins above 40%, and double-digit annual EPS growth from 2026 through 2030.
About Blackbaud (NASDAQ:BLKB)
Blackbaud, Inc (NASDAQ: BLKB) develops cloud-based software and services for nonprofit organizations, educational institutions, healthcare and other social-impact organizations. Its technology helps customers manage fundraising, donor relationships, financial operations, grantmaking, marketing, ticketing, payments and community engagement.
The company’s product portfolio includes solutions such as Raiser’s Edge NXT for nonprofit fundraising and constituent relationship management, Financial Edge NXT for nonprofit accounting, Luminate for online fundraising and advocacy, Grantmaking, Blackbaud Tuition Management, and Altru for cultural organizations.
