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What changed in BLACKBAUD INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BLACKBAUD INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+445 added−464 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-21)

Top changes in BLACKBAUD INC's 2025 10-K

445 paragraphs added · 464 removed · 277 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

71 edited+61 added−51 removed69 unchanged
Biggest changeMarkets since April 2021. He joined us as Executive Vice President and President, Enterprise Markets Group in April 2018. Prior to joining us, Mr. Gregoire was Group President of the Financial Institutions Group at Fiserv, a global technology provider serving the financial services industry, from March 2014 until February 2018.
Biggest changeGregoire was Group President of the Financial Institutions Group at Fiserv, a global technology provider serving the financial services industry, from March 2014 until February 2018. He joined Fiserv in December 2002 and served in other key leadership roles including Division President and Chief Operating Officer, Card Services, and Senior Vice President of Product and Network Strategy. Mr.
Blackbaud CRM helps organizations build deeper and more personalized relationships with constituents, build their brands through online engagement and multichannel communication tools, and more effectively fundraise, leveraging campaign management, business intelligence and predictive analytics. Blackbaud CRM can be integrated with enterprise online solutions to enable multi-channel marketing, online engagement and event fundraising.
Blackbaud Enterprise Fundraising CRM helps organizations build deeper and more personalized relationships with constituents, build their brands through online engagement and multichannel communication tools, and more effectively fundraise, leveraging campaign management, business intelligence and predictive analytics. Blackbaud Enterprise Fundraising CRM can be integrated with enterprise online solutions to enable multi-channel marketing, online engagement and event fundraising.
We believe Raiser's Edge NXT is the most advanced technology available to nonprofits seeking to operate more efficiently and raise more support for their missions. Blackbaud CRM™ is a comprehensive, configurable fundraising and relationship management solution.
We believe Raiser's Edge NXT is the most advanced technology available to nonprofits seeking to operate more efficiently and raise more support for their missions. Blackbaud Enterprise Fundraising CRM™ is a comprehensive, configurable fundraising and relationship management solution.
Delight Our Customers We intend to make our customers' experience with us effective, efficient and satisfying from their initial interest in our solutions and services through their decision to purchase, engage with customer support and implement and use our solutions. We continue to focus on initiatives aimed at improving the consistency and quality of user experience across our offerings.
Delight Our Customers We intend to make our customers' experience with us effective, efficient and satisfying from their initial interest in our AI-powered solutions and services through their decision to purchase, engage with customer support and implement and use our solutions. We continue to focus on initiatives aimed at improving the consistency and quality of user experience across our offerings.
Our Customer Success team develops and fosters relationships within all levels of the customer organization to help ensure that customers get the most value out of our solutions and services, while helping them achieve their desired outcomes. Our customer success resources work to proactively communicate to drive overall satisfaction and retention of our customers' business.
Our Customer Success team develops and fosters relationships within all levels of the customer organization to help ensure that customers get the most value out of our AI-powered solutions and services, while helping them achieve their desired outcomes. Our customer success resources work to proactively communicate to drive overall satisfaction and retention of our customers' business.
Benefits, such as priority routing or additional support channels, are continuously enhanced. Customers enrolled in the programs enjoy fast, reliable customer support, receive regular software updates, stay up-to-date with regular communication and can leverage a unified customer portal for quick and easy access to these resources.
Benefits, such as priority routing or additional support channels, are continuously enhanced. Customers enrolled in the programs enjoy timely, reliable customer support, receive regular software updates, stay up-to-date with regular communication and can leverage a unified customer portal for quick and easy access to these resources.
The SEC maintains an Internet site that contains these reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov . Information About Our Executive Officers The following table sets forth information concerning our executive officers as of February 15, 2025: Name Age Title Michael P.
The SEC maintains an Internet site that contains these reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov . Information About Our Executive Officers The following table sets forth information concerning our executive officers as of February 15, 2026: Name Age Title Michael P.
Raiser's Edge NXT is the first and only cloud fundraising and relationship management solution that is all-inclusive, fully integrated with data health, predictive analytics, email marketing, donation forms, event management, payment processing and process automation to create tailored, user-specific experiences.
Raiser's Edge NXT is the first and only cloud fundraising and relationship management solution that is all-inclusive, fully integrated with data health, AI-powered predictive analytics, email marketing, donation forms, event management, payment processing and process automation to create tailored, user-specific experiences.
Strategy Our objective is to maintain and extend our position as the leading provider of cloud software and services essential for the core business operations unique to social impact organizations, teams, and schools. Our key strategies for achieving this objective are described below.
Strategy Our objective is to maintain and extend our position as the leading provider of AI-powered cloud software and services essential for the core business operations unique to social impact organizations, teams, and schools. Our key strategies for achieving this objective are described below.
However, once basic needs are met, programs unique to social impact organizations like the stewardship of relationships and partnerships critical to major gift fundraising and community education; the cultivation and management of gifts and grants sponsorship; the intricacies of not-for-profit specific fund accounting; the multi-level networking required for peer-to-peer activism and employee engagement; and the sensitive data and reporting behind critical programs run by and for healthcare and education institutions ensure the ongoing need for highly specialized tools.
However, once basic needs are met, programs unique to social impact organizations like the stewardship of relationships and partnerships critical to major gift fundraising and corporate grants; the cultivation and management of gifts and sponsorships; the intricacies of not-for-profit specific fund accounting; the multi-level networking required for peer-to-peer activism and employee engagement; and the sensitive data and reporting behind critical programs run by and for healthcare and education institutions ensure the ongoing need for highly specialized tools.
We believe we compete against these solutions by offering a set of integrated solutions rather than a single point solution, which we believe improves the overall customer experience and reduces organizational risk.
We believe we compete against these solutions by offering a set of integrated, AI-driven solutions rather than a single point solution, which we believe improves the overall customer experience and reduces organizational risk.
Our solutions are built specifically for fundraising and relationship management, marketing and engagement, financial management, grant and award management, education management, ticketing, social responsibility, payment services and analytics.
Our AI-powered solutions are built specifically for fundraising and relationship management, marketing and engagement, financial management, grant and award management, education management, ticketing, social responsibility, payment services and analytics.
Because of these challenges, we believe nonprofits, education institutions, healthcare organizations and houses of worship can benefit from software applications and services specifically designed to serve their particular needs and workflows to grow revenue, work effectively and accomplish their missions. 2024 Form 10-K 3 Table of Contents Blackbaud, Inc.
Because of these challenges, we believe nonprofits, education institutions, healthcare organizations and houses of worship can benefit from AI-powered software applications and services and specifically designed to serve their particular needs and workflows to grow revenue, work effectively and accomplish their missions. 2025 Form 10-K 3 Table of Contents Blackbaud, Inc.
Such methods are often costly and inefficient because of the difficulties in effectively collecting, sharing and using donation-related information. Furthermore, general purpose software applications frequently have limited functionality for the unique needs of our customer base and do not efficiently integrate multiple databases.
Such methods are often costly and inefficient because of the difficulties in effectively collecting, sharing and using donation-related information. Furthermore, general purpose software applications frequently have limited functionality for the unique needs of our customer base and do not efficiently integrate multiple databases or solutions from multiple vendors.
We believe we compete well in this market through a combination of positive brand recognition among all three of these groups and the combination of our consumer- and organization-oriented tools relative to those of the competition. 12 2024 Form 10-K Table of Contents Blackbaud, Inc.
We believe we compete well in this 2025 Form 10-K 13 Table of Contents Blackbaud, Inc. market through a combination of positive brand recognition among all three of these groups and the combination of our consumer- and organization-oriented tools relative to those of the competition.
(See “Solutions and Services” below for additional information regarding the development and integration of AI into our solutions and services.) Attract and Retain Top Talent and Actively Engage Employee Base Our employees are energized by our opportunity to fuel social impact.
(See “Solutions and Services” below for additional information regarding the development and integration of AI into our solutions and services as a key business strategy.) Attract and Retain Top Talent and Actively Engage Employee Base Our employees are energized by our opportunity to fuel social impact.
Blackbaud Award Management™ is a comprehensive, integrated scholarship management platform for higher education and K-12 institutions and foundations, allowing students to apply for all awards using one intuitive and streamlined application 8 2024 Form 10-K Table of Contents Blackbaud, Inc. process and eliminating many time-consuming administrative tasks. This leads to improved awarding, reporting, compliance, communication and stewardship.
Blackbaud Award Management™ is a comprehensive, integrated scholarship management platform for higher education and K-12 institutions and foundations, allowing students to apply for all awards using one intuitive and streamlined application process and eliminating many time-consuming administrative tasks. This leads to improved awarding, reporting, compliance, communication and stewardship.
Both fundraisers and leaders benefit from tailored consulting to address weaknesses and enhance strengths to comprehensively improve fundraising team performance. 2024 Form 10-K 7 Table of Contents Blackbaud, Inc. Blackbaud Altru® is a cloud solution that helps arts and cultural organizations consolidate admissions, membership, fundraising, merchandise, marketing and more, giving users a comprehensive view of their supporters.
Both fundraisers and leaders benefit from tailored consulting to address weaknesses and enhance strengths to comprehensively improve fundraising team performance. Blackbaud Altru® is a cloud solution that helps arts and cultural organizations consolidate admissions, membership, fundraising, merchandise, marketing and more, giving users a comprehensive view of their supporters.
Examples of constituent insights include: predictive modeling that indicates the likelihood and capacity of a constituent making a gift, wealth screening software that uses publicly available records to build detailed wealth profiles of constituents and persona cluster segmentation that groups constituents based on shared traits with guidance for optimizing messaging to each group.
Examples of constituent insights include: predictive modeling that indicates the likelihood and capacity of a constituent making a gift, wealth screening software that uses publicly available records to build detailed wealth profiles of constituents and persona cluster segmentation that groups constituents based on shared traits with guidance for optimizing messaging to each group. 8 2025 Form 10-K Table of Contents Blackbaud, Inc.
We maintain many trademarks, including, but not limited to “Blackbaud,” “Raiser's Edge NXT” and “Luminate.” We currently have one active patent on our technology and have one pending patent application. Human Capital Resources As of December 31, 2024, we had approximately 2,600 employees, none of whom are represented by unions or are covered by collective bargaining agreements.
We maintain many trademarks, including, but not limited to “Blackbaud,” “Raiser's Edge NXT” and “Luminate.” We currently have one active patent on our technology and have one pending patent application. Human Capital Resources As of December 31, 2025, we employed approximately 2,800 talented professionals worldwide, none of whom are represented by unions or covered by collective bargaining agreements.
We are also leveraging AI to transform the way we work at Blackbaud and intend to continue 6 2024 Form 10-K Table of Contents Blackbaud, Inc. to identify, experiment and scale a range of solutions across marketing, customer success and engineering through applied AI.
We are also leveraging AI to transform the way we work at Blackbaud and intend 2025 Form 10-K 7 Table of Contents Blackbaud, Inc. to continue to identify, experiment and scale a range of solutions across our marketing, customer success, engineering and general and administrative functions through applied AI.
Working Capital For a discussion of our working capital practices, see “Management’s Discussion and Analysis of Financial Conditions and Results of Operations — Liquidity and Capital Resources” in Item 7 in this report. 14 2024 Form 10-K Table of Contents Blackbaud, Inc. Available Information Our website address is www.blackbaud.com .
Working Capital For a discussion of our working capital practices, see “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Liquidity and Capital Resources” in Item 7 of this report. Available Information Our website address is www.blackbaud.com .
Olson 61 Senior Vice President and General Counsel Michael P. Gianoni joined us as Chief Executive Officer and President in January 2014 and was appointed Vice Chairman of the Board in January 2024.
Olson 62 Chief Legal Officer Michael P. Gianoni joined us as Chief Executive Officer and President in January 2014 and was appointed Vice Chairman of the Board in January 2024.
Customers use our performance solutions to identify areas of weakness and opportunities for improvement, track the donor impact of strategic initiatives, understand and respond to industry trends, set realistic benchmarks and fundraising goals and maintain a consistent reporting methodology to assess growth over time.
Customers use our performance solutions to identify areas of weakness and opportunities for improvement, track the donor impact of strategic initiatives, understand and respond to industry trends, set realistic benchmarks and fundraising goals and maintain a consistent reporting methodology to assess growth over time. Fundraising and Engagement Blackbaud Raiser's Edge NXT® is our flagship fundraising and relationship management solution.
Blackbaud Enrollment Management System™ is an enrollment management system that simplifies a school’s admissions process. Blackbaud Enrollment Management System helps admissions teams and prospective families manage and track their progress, from inquiry and application through acceptance and enrollment.
Blackbaud Enrollment Management System™ is an enrollment management system that simplifies a school’s admissions process. Blackbaud Enrollment Management System helps admissions teams and prospective families manage and track their progress, from inquiry and application through acceptance and enrollment. 10 2025 Form 10-K Table of Contents Blackbaud, Inc.
Our AI capabilities enable social impact organizations to transform data into insights and outcomes. Blackbaud's data intelligence solutions and services use data science and AI to turn customer data into valuable insights that inform decision-making and help them achieve their goals efficiently.
Blackbaud's data intelligence solutions and services use data science and AI to turn customer data into valuable insights that inform decision-making and help them achieve their goals efficiently.
Payment Services Our solutions provide our customers payment processing capabilities that enable their donors to make donations and purchase goods and services using numerous payment options, including credit card and automated clearing house (“ACH”) checking transactions, through secure online transactions. Blackbaud Merchant Services™ is a value-added service integrated with our solutions that makes credit card processing simple and secure.
Payment Services Our solutions provide our customers payment processing capabilities that enable their donors to make donations and purchase goods and services using numerous payment options, including credit card and automated clearing house (“ACH”) checking transactions, through secure online transactions.
Seasonality For a discussion of seasonal variations in our business, see “Management’s Discussion and Analysis of Financial Conditions and Results of Operations — Seasonality” in Item 7 in this report.
Seasonality For a discussion of seasonal variations in our business, see “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Seasonality” in Item 7 of this report. 2025 Form 10-K 15 Table of Contents Blackbaud, Inc.
Olson is responsible for Blackbaud's legal activities. Prior to joining us, he was an attorney with Alcatel-Lucent USA, the U.S. subsidiary of Alcatel-Lucent (now owned by Nokia Corporation) that designs, develops, and builds wireline, wireless, and converged communications networks, from July 1997 to September 2008. Prior to joining Alcatel-Lucent, Mr.
He joined us as Senior Vice President and General Counsel in September 2008. Prior to joining us, he was an attorney with Alcatel-Lucent USA, the U.S. subsidiary of Alcatel-Lucent (now owned by Nokia Corporation) that designs, develops, and builds wireline, wireless, and converged communications networks, from July 1997 to September 2008. Prior to joining Alcatel-Lucent, Mr.
Gianoni 64 Chief Executive Officer, President and Vice Chairman of the Board Anthony W. Boor 62 Executive Vice President and Chief Financial Officer David J. Benjamin 53 Executive Vice President and Chief Commercial Officer Kevin P. Gregoire 57 Executive Vice President and Chief Operating Officer Kevin R. McDearis 57 Executive Vice President and Chief Technology Officer Jon W.
Gianoni 65 Chief Executive Officer, President and Vice Chairman of the Board Chad M. Anderson 53 Executive Vice President and Chief Financial Officer David J. Benjamin 54 Executive Vice President and Chief Commercial Officer Kevin P. Gregoire 58 Executive Vice President and Chief Operating Officer Kevin R. McDearis 58 Executive Vice President and Chief Technology Officer Jon W.
For certain areas of the market, entry barriers are low, as general tools for small businesses can usually be configured to manage the most basic marketing, contact management, and accounting needs of social impact organizations.
Competition The market for software and related services targeting philanthropic-focused for-profit, nonprofit organizations and schools is competitive and highly fragmented. For certain areas of the market, entry barriers are low, as general tools for small businesses can usually be configured to manage the most basic marketing, contact management, and accounting needs of social impact organizations.
Financial Edge NXT eliminates redundant tasks and manual processes across the organization and within the financial office itself through Payment Assistant, native functionality for automated bill pay and Expense Management, functionality for submission of expenses.
Financial Edge NXT eliminates redundant tasks and manual processes across the organization and within the financial office itself through Payment Assistant™, native functionality for automated bill pay and Expense Management, functionality for submission of expenses. We recently introduced AI-powered document intelligence for scanning of invoices to reduce manual data entry.
He holds a BS in Accounting from New Mexico State University. David J. Benjamin has served as our Executive Vice President and Chief Commercial Officer since July 2022. He joined us as Executive Vice President and President, International Markets Group in April 2018. Prior to joining us, Mr.
He holds a BS in Finance from Indiana University. 16 2025 Form 10-K Table of Contents Blackbaud, Inc. David J. Benjamin has served as our Executive Vice President and Chief Commercial Officer since July 2022. He joined us as Executive Vice President and President, International Markets Group in April 2018. Prior to joining us, Mr.
Blackbaud brings over four decades of leadership to this sector: since originally incorporating in New York in 1982 and later reincorporating as a South Carolina corporation in 1991 and as a Delaware corporation in 2004. Millions of people across more than 100 countries connect, give, learn and engage through Blackbaud platforms.
Blackbaud brings over four decades of leadership to this sector: since originally incorporating in New York in 1982 and later reincorporating as a South Carolina corporation in 1991 and as a Delaware corporation in 2004.
Prior to that, he was at Guardian Media Group, a mass media company owning various media operations company, where he served as Divisional Chief Operating Officer, among other leadership roles, from June 1995 to September 2007.
Prior to that, he was at Guardian Media Group, a mass media company owning various media operations company, where he served as Divisional Chief Operating Officer, among other leadership roles, from June 1995 to September 2007. He holds a BA in European Business from London Metropolitan University and an MBA from The Manchester Metropolitan University. Kevin P.
Olson was employed in legal positions with MCI, Inc., a global business and residential communications company, from September 1996 to July 1997, and Unisys Corporation, a global information technology company, from July 1992 to September 1996. Mr.
Olson was employed in legal positions with MCI, Inc., a global business and residential communications company, from September 1996 to July 1997, and Unisys Corporation, a global information technology company, from July 1992 to September 1996. Mr. Olson is a member of the MUSC (Medical University of South Carolina) Hollings Cancer Center Advisory Board.
Predictive Insights inform strategic decision-making and actions that increase efficiency and drive successful outcomes. Insights are extracted by combining customer data with licensed and proprietary data before leveraging advanced AI capabilities and expertise from Blackbaud’s dedicated team of data scientists.
Insights are extracted by combining customer data with licensed and proprietary data before leveraging advanced AI capabilities and expertise from Blackbaud’s dedicated team of data scientists.
It includes tools to build online fundraising campaigns as part of an organization's existing website or as a stand-alone fundraising site. Donation forms, gift processing and tools for communicating through web pages and email give our customers the essentials for building sustainable donor relationships. Blackbaud TeamRaiser® is the industry’s most comprehensive peer-to-peer fundraising event solution.
Donation forms, gift processing and tools for communicating through web pages and email give our customers the essentials for building sustainable donor relationships. Blackbaud TeamRaiser® is the industry’s most comprehensive peer-to-peer fundraising event solution.
For example, our “Intelligence for Good” program integrates several machine learning and AI capabilities that help our customers streamline workflows, enhance efficiency and achieve better outcomes. We have introduced generative AI features across multiple products, mainly for composing outreach communications, and will soon be offering the ability for our customers to provide contextual responses to question and answer actions.
For example, our “Intelligence for Good” program integrates machine learning and AI capabilities that help our customers streamline workflows, enhance efficiency and achieve better outcomes. We have introduced generative AI features across multiple products, ranging from composition of outreach communications to contextual responses to customer questions.
Our competition falls into four primary categories: • Niche products are usually developed as a solution for a single problem at an organization and are adopted by similar organizations to solve a specialized need. These are typically offered by vendors who may have deep industry expertise but may not have the resources to expand beyond a specialized area.
Our competition falls into four primary categories: • Niche products are usually developed as a solution for a single problem at an organization and are adopted by similar organizations to solve a specialized need.
We believe we compete successfully against these traditional fundraising service providers, primarily because our solutions and services are more automated, more robust, more tailored to the needs of nonprofit organizations and more efficient. Technology and Architecture Our technology strategy consists of several key building blocks including cloud operations, developer tools, data intelligence and core services.
We believe we compete successfully against these traditional fundraising service providers, primarily because our solutions and services are more automated, more robust, more tailored to the needs of nonprofit organizations and more efficient.
During 2024, we had nearly 100,000 customers that paid Blackbaud through transactional fees and approximately 40,000 customers with contractual billing arrangements. We are deeply proud to play a part in our customers’ success in their missions to provide healthcare and cure diseases, advance education, preserve and share arts and culture, protect the environment, support those in need and much more.
We are deeply proud to play a part in our customers’ success in their missions to provide healthcare and cure diseases, advance education, preserve and share arts and culture, protect the environment, support those in need and much more.
Customers are charged one rate for credit card transactions, making Blackbaud Merchant Services a competitive option. The service also provides customers with a payment card industry (“PCI”) compliant process and streamlined bank reconciliation. We also provide our K-12 private school customers with student tuition payment processing services.
Blackbaud Integrated Payments™ (formerly, Blackbaud Merchant Services ) is a value-added service integrated with our solutions that makes credit card processing simple and secure. Customers are charged one rate for credit card transactions, making Blackbaud Integrated Payments a competitive option. The service also provides customers with a payment card industry (“PCI”) compliant process and streamlined bank reconciliation.
In 2021, we formally rolled out a remote work strategy as a company, which supports Blackbaud's goal to attract top talent globally. For additional information, see “Human Capital Resources” below.
In 2025, we rolled out an updated approach to our Remote-Flexible workforce strategy, which supports Blackbaud's goal to attract and develop top talent globally. For additional information, see “Human Capital Resources” below.
Our marketing organization, which includes brand, digital, content, product, event and demand generation marketing and corporate communications, develops and launches multi-channel campaigns designed to create brand recognition and market awareness for our solutions and services. Our digital demand generation motion focuses on targeted account-based marketing plays, as well as intent-based programs including paid search, retargeting, social and content syndication programs.
Our marketing organization, which includes brand, digital, content, product, event and demand generation marketing and corporate communications, develops and launches multi-channel campaigns designed to create brand recognition and market awareness for our AI-powered solutions and services.
These services either integrate with or are already integrated into our software solutions to give our customers a comprehensive view of their supporters and the market and provide information essential to making well-informed operating decisions. Blackbaud’s Intelligence for Good® is our comprehensive strategy to deliver AI that is accessible, powerful and responsible.
Our data intelligence offerings provide solutions for data health, predictive insights and fundraising performance, enabling nonprofits to define effective campaign strategies and maximize fundraising results. These services either integrate with or are already integrated into our software solutions to give our customers a comprehensive view of their supporters and the market and provide information essential to making well-informed operating decisions.
He holds an AS in electrical engineering from Waterbury State Technical College, a BS with a business concentration from Charter Oak State College, and an MBA and an honorary Doctorate from the University of New Haven. Anthony W.
He holds an AS in electrical engineering from Waterbury State Technical College, a BS with a business concentration from Charter Oak State College, and an MBA and an honorary Doctorate from the University of New Haven. Chad M. Anderson joined Blackbaud in March 2013 and was promoted to Executive Vice President and Chief Financial Officer in April 2025.
It seamlessly integrates with multiple Blackbaud products including Raiser's Edge NXT, Blackbaud Tuition Management, Blackbaud Billing Management and Blackbaud Grantmaking so nonprofit organizations can connect their business offices and workflows across the organization.
Blackbaud Financial Edge NXT has powerful reporting tools to help finance teams drive transparency and open modern APIs to support data integrations or enhanced workflows. It seamlessly integrates with multiple Blackbaud products including Raiser's Edge NXT, Blackbaud Tuition Management and Blackbaud Billing Management so nonprofit organizations can connect their business offices and workflows across the organization.
He also served on the Board of Directors of the Technology Association of Georgia from 2011 to 2016 and as Vice Chairman of the Board in 2014. He holds a BS in Management from The Georgia Institute of Technology. Jon W. Olson joined us as Senior Vice President and General Counsel in September 2008. Mr.
He also served on the Board of Directors of the Technology Association of Georgia from 2011 to 2016 and as Vice Chairman of the Board in 2014. He holds a BS in Management from The Georgia Institute of Technology. Jon W. Olson has served as our Chief Legal Officer since April 2025 and is responsible for Blackbaud's legal activities.
He was responsible for leading a global IT organization in strategy development, organization development, portfolio and project management, software and infrastructure engineering, service delivery and operations. Prior to that, Mr.
McDearis was the Chief Information Officer at Manhattan Associates, Inc., a technology leader in supply chain and omnichannel commerce, from August 2012 to July 2014. He was responsible for leading a global IT organization in strategy development, organization development, portfolio and project management, software and infrastructure engineering, service delivery and operations. Prior to that, Mr.
SKY UX allows developers to create applications with the same consistent, cohesive user interface as Blackbaud’s native solutions using an open-source framework that implements Blackbaud design patterns and provides guidelines and tooling for the entire application lifecycle. Our Intelligence for Good® strategy affirms our commitment to AI that is convenient, powerful and responsible.
SKY API enables developers to augment Blackbaud solutions with industry-standard REST APIs, standards-based authentication protocols, and a best-in-class developer experience. SKY UX allows developers to create applications with the same consistent, cohesive user interface as Blackbaud’s native solutions using an open-source framework that implements Blackbaud design patterns and provides guidelines and tooling for the entire application lifecycle.
Customers also are empowered with self-help resources such as Knowledgebase articles, user guides, Blackbaud Community, our on-demand library of enablement sessions and have around-the-clock access to support resources for mission-critical needs. Professional and Managed Services Our expert consultants, and those in our partner program, provide implementation, optimization, data conversion and customization services for our software solutions.
Customers also are empowered with self-help resources such as AI-based support tools, Knowledgebase articles, user guides, Blackbaud Community, our on-demand library of enablement sessions and have around-the-clock access to support resources for mission-critical needs. 2025 Form 10-K 11 Table of Contents Blackbaud, Inc.
In addition, lead generation is supplemented by our customer success organization via employee-generated sales leads. Our partner program also includes optional engagements around referrals, technical integrations, and implementation services which also support and supplement our go-to-market efforts by promoting customer choice and facilitating extensible capabilities.
Our partner program also includes optional engagements around referrals, technical integrations, and implementation services which also support and supplement our go-to-market efforts by promoting customer choice and facilitating extensible capabilities. These sales, sales support, partners and customer success professionals are primarily located throughout the United States, the U.K., Canada and Australia.
Olson is a member of the MUSC (Medical University of South Carolina) Hollings Cancer Center Advisory Board and is on the board of Charleston Jazz. He holds a BS from Georgetown University, a JD from Dickinson School of Law and an MBA from Seton Hall University. 16 2024 Form 10-K Table of Contents Blackbaud, Inc.
He holds a BS from Georgetown University, a JD from Dickinson School of Law and an MBA from Seton Hall University. 2025 Form 10-K 17 Table of Contents Blackbaud, Inc.
We leverage multiple clouds in our architectures (including AWS and Azure) and have both single and multi-tenant solutions. The best-in-class infrastructure enables rapid innovation with high levels of reliability, availability and security, and lets Blackbaud evolve services over time at independent paces as tech trends and tools emerge.
The best-in-class infrastructure enables rapid innovation with high levels of reliability, availability and security, and lets Blackbaud evolve services over time at independent paces as tech trends and tools emerge. Blackbaud also provides a toolset for customers, partners, and developers to extend the Blackbaud SKY ecosystem.
Blackbaud's data intelligence portfolio consists of three key outcome areas: 2024 Form 10-K 9 Table of Contents Blackbaud, Inc. Data Health solutions enhance and maintain constituent data so the customer is always working with accurate and up-to-date information.
Data Health solutions enhance and maintain constituent data so the customer is always working with accurate and up-to-date information.
He joined us in August 2014 as our Senior Vice President of Global Product Development. Prior to joining us, Mr. McDearis was the Chief Information Officer at Manhattan Associates, Inc., a technology leader in supply chain and omnichannel commerce, from August 2012 to July 2014.
McDearis has served as our Executive Vice President and Chief Technology Officer since October 2016 and is responsible for the company’s global product and technology portfolio, including cybersecurity. He joined us in August 2014 as our Senior Vice President of Global Product Development. Prior to joining us, Mr.
ITEM 1. BUSINESS Description of Business We are the leading software provider exclusively dedicated to powering social impact. Serving the nonprofit and education sectors, companies committed to social responsibility and individual change makers, our essential software is built to accelerate impact in fundraising, nonprofit financial management, digital giving, grantmaking, corporate social responsibility and education management.
ITEM 1. BUSINESS Description of Business 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 a large base of loyal customers and strategic partners that provide references and recommendations often featured in our advertising and promotional activities. 2024 Form 10-K 11 Table of Contents Blackbaud, Inc. Competition The market for software and related services targeting philanthropic-focused for-profit and nonprofit organizations is competitive and highly fragmented.
We also target publication of our thought leadership content and position our subject matter experts in industry journals and publications. We have a large base of loyal customers and strategic partners that provide references and recommendations often featured in our advertising and promotional activities. 12 2025 Form 10-K Table of Contents Blackbaud, Inc.
He holds a BS from the United States Military Academy at West Point, and an MBA from the F.W. Olin School of Business at Babson College. Kevin R. McDearis has served as our Executive Vice President and Chief Technology Officer since October 2016 and is responsible for the company’s global product and technology portfolio, including cybersecurity.
Gregoire is also a veteran of the United States Army, where he served as Lieutenant in the Corps of Engineers and was awarded three Army Commendation Medals. He holds a BS from the United States Military Academy at West Point, and an MBA from the F.W. Olin School of Business at Babson College. Kevin R.
Financial Management Blackbaud Financial Edge NXT® is the market leading solution for fund and sub fund accounting to ensure stewardship for donated funds and compliance for government grants and contracts. Blackbaud Financial Edge NXT has powerful reporting tools to help finance teams drive transparency and open modern APIs to support data integrations or enhanced workflows.
It also has sophisticated reporting functionality and tools to manage marketing, communications and fundraising. 2025 Form 10-K 9 Table of Contents Blackbaud, Inc. Financial Management Blackbaud Financial Edge NXT® is the market leading solution for fund and sub fund accounting to ensure stewardship for donated funds and compliance for government grants and contracts.
We supplement the digital motion with our annual user conference, bbcon ® , select participation at virtual and in-person third-party trade shows, technical conferences, and technology seminars. We also target publication of our thought leadership content and position our subject matter experts in industry journals and publications.
Our digital demand generation motion focuses on targeted account-based marketing plays, as well as intent-based programs including paid search, retargeting, social and content syndication programs. We supplement the digital motion with our annual user conference, bbcon ® , select participation at virtual and in-person third-party trade shows, technical conferences, and technology seminars.
These services include: • System implementation; • Data conversion, business process analysis and application customization; • Database merging and enrichment; • Secure credit card transaction processing; • Database production activities; • Website design services; and • Outcome-based and prescriptive services. 10 2024 Form 10-K Table of Contents Blackbaud, Inc.
Professional and Managed Services Our expert consultants, and those in our partner program, provide implementation, optimization, data conversion and customization services for our AI-powered software solutions. These services include: • System implementation; • Data conversion, business process analysis and application customization; • Database merging and enrichment; • Database production activities; • Website design services; and • Outcome-based and prescriptive services.
We are developing and implementing AI features in certain of our solutions and services as a key element of our strategy to delight our customers and remain a market leader in the social impact sector.
We are developing and implementing AI features in certain of our solutions and services as a key element of our strategy to enhance customer workflows, improve operational efficiency and support decision-making, while maintaining appropriate human oversight and governance controls.
This technology provides a system that is simple to maintain, efficient to operate and is intuitively easy to learn without extensive training. Blackbaud Luminate Online®, delivered in the cloud, helps our customers better understand their online supporters, make the right ask at the right time and raise more money online.
Blackbaud Luminate Online®, delivered in the cloud, helps our customers better understand their online supporters, make the right ask at the right time and raise more money online. It includes tools to build online fundraising campaigns as part of an organization's existing website or as a stand-alone fundraising site.
He holds a BA in European Business from London Metropolitan University and an MBA from The Manchester Metropolitan University. 2024 Form 10-K 15 Table of Contents Blackbaud, Inc. Kevin P. Gregoire has served as our Executive Vice President and Chief Operating Officer since July 2022. Prior to that, he was the Executive Vice President and President of U.S.
Gregoire has served as our Executive Vice President and Chief Operating Officer since July 2022. Prior to that, he was the Executive Vice President and President of U.S. Markets since April 2021. He joined us as Executive Vice President and President, Enterprise Markets Group in April 2018. Prior to joining us, Mr.
Our largest single customer accounted for less than 1% of our 2024 consolidated revenue. Sales and Marketing Most of our solutions and related services are sold through our direct sales force. Our direct sales force is complemented by a team of sales development representatives responsible for sales lead generation and qualification.
Our direct sales force is complemented by a team of sales development representatives responsible for sales lead generation and qualification. In addition, lead generation is supplemented by our customer success organization via employee-generated sales leads.
(See “Risk Factors” below for more information regarding the risks associated with our use of AI and the description below of our current uses of AI in our solutions and services.) Our specific solutions and services include: Fundraising and Engagement Blackbaud Raiser's Edge NXT® is our flagship fundraising and relationship management solution.
(See “Risk Factors” below for more information regarding the risks associated with our use of AI and the description below of our current uses of AI in our solutions and services.) For purposes of this Annual Report on Form 10‑K, we use the term “Artificial Intelligence” or “AI” as defined by the National Institute of Standards and Technology (“NIST”).
The diversity of the underlying transaction volumes from these four sources has resulted in consistent transactional recurring revenue growth in the mid-to-high single digits over the past several years.
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.
Prior to joining us, he served as an executive with Brightpoint, Inc., a global provider of device lifecycle services to the wireless industry, beginning in 1999, most recently as its Executive Vice President, Chief Financial Officer and Treasurer. He also served as the interim President of Europe, Middle East and Africa during Brightpoint's significant restructuring of that region. Mr.
Anderson was Chief Financial Officer of the Europe, Middle East, and Africa region at Brightpoint Inc., a global provider of mobile device lifecycle services to the wireless industry, from March 2009 until February 2013 and Vice President of Finance for International Operations at Brightpoint from February 2008 until March 2009.
This differentiator not only builds strong employee engagement but also helps us provide a higher level of service to our customers. With over 76% of employees volunteering with nonprofits annually and one in seven serving on a nonprofit board or committee, our direct experience enables our teams to better serve our customer base.
It drives engagement and enables us to deliver exceptional service to customers. Our employees live this commitment: approximately 74% volunteer annually with nonprofits, and one in seven serves on a nonprofit board or committee, bringing firsthand experience to the communities we serve. 14 2025 Form 10-K Table of Contents Blackbaud, Inc.
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Execute on our Five Key Operational Initiatives In early 2023, we outlined five key operational initiatives targeted to drive innovation, bookings growth, revenue expansion and lower costs. During 2024, we continued to execute on these key initiatives. 1.
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With the deepest expertise powered by the world’s largest philanthropic data set, the most connected workflows, and the most powerful impact network, our solutions are building a future where resources are unleashed at the speed of need.
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Product Innovation and Delivery To maintain our market leadership position, we are accelerating the pace of innovation and new feature delivery to our customers. Our focus has been on two areas, artificial intelligence (AI) and enhancements that continue to improve the connectivity of our suite of solutions.
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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.
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These enhancements are aimed at improving fundraising outcomes while reducing the administrative burden of our end users. Some examples include: • We have released a number of AI capabilities in our solutions, including generative AI functionality for our JustGiving platform.
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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.
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During 2024, we released generative AI capabilities for Raiser’s Edge NXT®, and we expect that Blackbaud Copilot will be available to our Raiser's Edge NXT customers soon.
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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.
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Using Blackbaud Copilot, users can ask ad hoc questions such as “How can I improve my average donation size?” and the tool will provide intelligent responses as well as recommended actions intended to drive that outcome. • During 2024, our Online Giving and Prospect Insights capabilities were natively integrated into Raiser's Edge NXT.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeTo date, we have received approximately 260 specific requests from customers for reimbursement of expenses incurred by them related to the Security Incident, all of which have been fully resolved and closed or are inactive and are considered by us to have been abandoned by the customers.
Biggest changeAs a result of the Security Incident, we received approximately 260 specific requests from customers for reimbursement of expenses incurred by them related to the Security Incident, approximately 400 reservations of the right to seek expense recovery in the future from customers or their attorneys in the U.S., U.K. and Canada related to the Security Incident and notices of proposed claims on behalf of a number of U.K. data subjects, all of which have been fully resolved and closed or are inactive and are considered by us to have been abandoned.
For example, when providing our solutions to certain customers in the healthcare industry, we must comply with applicable provisions of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), and might be subject to similar provisions of other legislation, including, without limitation, the Gramm-Leach-Bliley Act and related regulations, and the California Consumer Privacy Act of 2018, and may apply to some of our customers and areas of business.
For example, when providing our solutions to certain customers in the healthcare industry, we must comply with applicable provisions of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), and might be subject to similar provisions of other legislation, including, without limitation, the Gramm-Leach-Bliley Act and related regulations, and the California Consumer Privacy Act of 2018 and related regulations, and may apply to some of our customers and areas of business.
(See Note 9 to our consolidated financial statements included in this report for a more detailed description of our 2024 Credit Facilities.) There can be no assurance that we will be able to remain in compliance with the covenants to which we are now subject or may be subject in the future and, if we fail to do so, that we will be able to obtain waivers from our lenders or amend the covenants.
(See Note 9 to our consolidated financial statements in this report for a more detailed description of our 2024 Credit Facilities.) There can be no assurance that we will be able to remain in compliance with the covenants to which we are now subject or may be subject in the future and, if we fail to do so, that we will be able to obtain waivers from our lenders or amend the covenants.
Even though we may carry cyber-technology insurance policies that provide insurance coverage under certain circumstances, we have in the past suffered losses and may in the future suffer losses as a result of a security breach that exceed the coverage available under our insurance policies or for which we do not have coverage.
Even though we carry cyber-technology insurance policies that provide insurance coverage under certain circumstances, we have in the past suffered losses and may in the future suffer losses as a result of a security breach that significantly exceed the coverage available under our insurance policies or for which we do not have coverage.
Certain of our solutions, in particular our financial management and payment services solutions, relate to activity heavily regulated by government agencies in the U.S., the U.K. and other countries in which we operate.
Certain of our solutions, in particular our financial management and payment services solutions, relate to activity heavily regulated by government agencies in the U.S., the U.K., Canada and other countries in which we operate.
Many of our generative AI features include the processing of personal data and are, and may be further, subject to laws, policies, legal obligations and codes of conduct related to privacy and data protection.
Many of our AI features include the processing of personal data and are, and may be further, subject to laws, policies, legal obligations and codes of conduct related to privacy and data protection.
The potential risks associated with acquisitions and investment transactions include, but are not limited to: • failure to realize anticipated returns on investment, cost savings and synergies; • difficulty in assimilating the operations, policies and personnel of the acquired company; • unanticipated costs associated with acquisitions; 2024 Form 10-K 19 Table of Contents Blackbaud, Inc. • challenges in combining product offerings and entering into new markets in which we may not have experience; • distraction of management’s attention from normal business operations; • potential loss of key employees of the acquired company; • difficulty implementing effective internal controls over financial reporting, disclosure controls and procedures and cybersecurity and data protection procedures; • impairment of relationships with customers or suppliers; and • issues not discovered in due diligence, which may include product quality issues or legal or other contingencies.
The potential risks associated with acquisitions and investment transactions include, but are not limited to: • failure to realize anticipated returns on investment, cost savings and synergies; 2025 Form 10-K 21 Table of Contents Blackbaud, Inc. • difficulty in assimilating the operations, policies and personnel of the acquired company; • unanticipated costs associated with acquisitions; • challenges in combining product offerings and entering into new markets in which we may not have experience; • distraction of management’s attention from normal business operations; • potential loss of key employees of the acquired company; • difficulty implementing effective internal controls over financial reporting, disclosure controls and procedures and cybersecurity and data protection procedures; • impairment of relationships with customers or suppliers; and • issues not discovered in due diligence, which may include product quality issues or legal or other contingencies.
Our customers' renewal rates may decline or fluctuate as a result of a number of factors, including their level of satisfaction with our solutions and services and their ability to continue their operations and spending levels due to general economic conditions, extraordinary business interruptions, client-specific financial issues or otherwise.
Our customers' renewal rates may decline or fluctuate as a result of a number of factors, including their level of satisfaction with our solutions, services and pricing strategies and their ability to continue their operations and spending levels due to general economic conditions, extraordinary business interruptions, client-specific financial issues or otherwise.
In addition, we derive a significant portion of our revenue from transaction-based payment processing fees that we collect from our customers through our Blackbaud Merchant Services solution, which enables our customers' donors to make donations and purchase goods and services using various payment options.
In addition, we derive a significant portion of our revenue from transaction-based payment processing fees that we collect from our customers through our Blackbaud Integrated Payments solution, which enables our customers' donors to make donations and purchase goods and services using various payment options.
We may also be subject to additional tax liabilities and penalties due to changes in non-income-based taxes resulting from changes in federal, state, local or international tax laws, changes in taxing jurisdictions’ administrative interpretations, decisions, policies and positions, results of tax examinations, settlements or judicial decisions, changes in accounting principles, or changes to our business operations, including as a result of acquisitions.
We may also be subject to additional tax liabilities and penalties due to changes in non-income-based taxes resulting from changes in U.S. federal, state, provincial, local or international tax laws, changes in tax laws in taxing jurisdictions’ administrative interpretations, decisions, policies and positions, results of tax examinations, settlements or judicial decisions, changes in accounting principles, or changes to our business operations, including as a result of acquisitions and dispositions.
Our use of third-party technologies also exposes us to increased risks including, but not limited to, risks associated with the integration of new technology into our solutions, the diversion of our resources from development of our own proprietary technology and our inability to generate revenue from licensed technology sufficient to offset associated acquisition and maintenance costs. 20 2024 Form 10-K Table of Contents Blackbaud, Inc.
Our use of third-party technologies also exposes us to increased risks including, but not limited to, risks associated with the integration of new technology into our solutions, the diversion of our resources from development of our own proprietary technology and our inability to generate revenue from licensed technology sufficient to offset associated acquisition and maintenance costs. 22 2025 Form 10-K Table of Contents Blackbaud, Inc.
Changes in the US federal or state governmental grant, award or other funding programs could negatively impact the operations of our nonprofit customers, which could have a material adverse effect on our business, results of operations, financial condition and liquidity.
Changes in the U.S. federal or state governmental grant, award or other funding programs could negatively impact the operations of our nonprofit customers, which could have a material adverse effect on our business, results of operations, financial condition and liquidity.
Also, some AI scenarios present ethical issues. If we enable or offer AI solutions that are controversial because of their purported or actual impact on human rights, privacy, employment or other social issues, we may experience reputational harm.
Also, some AI scenarios present ethical issues. If we enable or offer AI solutions that are controversial because of their purported or actual impact on human rights, privacy, employment or other social issues, we may experience reputational harm and legal liability.
Additional information regarding the Rights Agreement and its termination, is contained in the Company’s Current Reports on Form 8-K filed with the SEC on October 2, 2023, January 26, 2024 and March 18, 2024 and in the Company's Form 8-A/A filed with the SEC on March 18, 2024. Officer Compensation Arrangements.
Additional information regarding the Rights Agreement and its termination is contained in the Company’s Current Reports on Form 8-K filed with the SEC on October 2, 2023, January 26, 2024 and March 18, 2024 and in the Company's Form 8-A/A filed with the SEC on March 18, 2024.
In addition, the introduction of solutions encompassing new technologies, such as AI, can render existing solutions obsolete and unmarketable.
In addition, the introduction of solutions encompassing new technologies, such as AI (as discussed below), can render existing solutions obsolete and unmarketable.
While we monitor our use of open source software and try to ensure that none is used in a manner that would require us to disclose the source code or that would otherwise breach the terms of an open source agreement, such use could inadvertently occur and we may be required to release proprietary source code, pay damages for breach of contract, re-engineer our applications, discontinue sales in the event re-engineering cannot be accomplished on a timely basis, or take other remedial action that may divert resources away from our development efforts, any of which could adversely affect our business.
While we monitor our use of open source software and try to ensure that none is used in a manner that would require us to disclose the source code or that would otherwise breach the terms of an open source agreement, such use could inadvertently occur and we may be required to release proprietary source code, pay damages for breach of contract, re-engineer our applications, discontinue sales in the event re-engineering cannot be accomplished on a timely basis, or take other remedial action that may divert resources away from our development efforts, any of which could adversely affect our business. 2025 Form 10-K 29 Table of Contents Blackbaud, Inc.
Many of our customers depend in significant part on the US federal and state governments for grants, awards and other funding to maintain their operations.
Many of our customers depend in significant part on the U.S. federal and state governments for grants, awards and other funding to maintain their operations.
Changes in our effective tax rate and additional tax liabilities and global tax developments may impact our financial results. We are subject to income taxes in the United States and various other jurisdictions. Significant judgment is often required in the determination of our worldwide provision for income taxes.
Changes in our effective tax rate and additional tax liabilities, including those related to our stock repurchases, and global tax developments may impact our financial results. We are subject to income taxes in the United States and various other jurisdictions. Significant judgment is often required in the determination of our worldwide provision for income taxes.
The impairment of a significant portion of these assets, such as the EVERFI impairment charges, could negatively affect our operating results. As of December 31, 2024, we had $1.1 billion and $132.9 million of goodwill and intangible assets, respectively.
The impairment of a significant portion of these assets, such as the EVERFI impairment charges, could negatively affect our operating results. As of December 31, 2025, we had $1.1 billion and $106.7 million of goodwill and intangible assets, respectively.
While we regularly evaluate new information that may change our judgment resulting in recognition, derecognition or changes in measurement of a tax position taken, there can be no assurance that the final determination of any examinations will not have an adverse effect on our operating results or financial position.
While we regularly evaluate new information that may change our judgment resulting in recognition, derecognition or changes in measurement of a tax position taken, there can be no assurance that the final determination of any examinations will not have an adverse effect on our operating results or financial position. 2025 Form 10-K 31 Table of Contents Blackbaud, Inc.
Historically, subscription and maintenance renewals have represented a significant portion of our total revenue. Because of this characteristic of our 2024 Form 10-K 17 Table of Contents Blackbaud, Inc. business, if our customers choose not to renew their subscriptions or maintenance arrangements with us on beneficial terms or at all, our business, operating results and financial condition could be harmed.
Historically, subscription and maintenance renewals have represented a significant portion of our total revenue. Because of this characteristic of our business, if our customers choose not to renew their subscriptions or maintenance arrangements with us on beneficial terms or at all, our business, operating results and financial condition could be harmed.
In addition, these laws and regulations could impose significant costs on our customers and us and make it more difficult for donors to make online donations.
In addition, these laws and regulations could impose significant costs on our customers and us and make it more difficult for donors to make online donations. (See "Item 1A. Risk Factors.
Such developments, for example, may include certain United States’ proposals as well as the Organization for Economic Co-operation and Development’s, the European Commission’s and certain major jurisdictions’ heightened interest in and taxation of companies participating in the digital economy. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Such developments, for example, may include certain United States’ proposals as well as the Organization for Economic Co-operation and Development’s ("the OECD"), the European Commission’s and certain major jurisdictions’ heightened interest in and taxation of companies participating in the digital economy.
Furthermore, we continue to undertake system upgrades designed to improve the availability, reliability, resiliency and speed of our payments systems. These efforts are costly and time-consuming, involve significant technical complexity and risk, may divert our resources from new features and products and may ultimately not be effective.
Furthermore, we continue to undertake system upgrades designed to improve the availability, reliability, resiliency and speed of our payments systems. These efforts are costly and time- 2025 Form 10-K 25 Table of Contents Blackbaud, Inc. consuming, involve significant technical complexity and risk, may divert our resources from new features and products and may ultimately not be effective.
(See Note 11 to our consolidated financial statements in this report for additional information regarding the Security Incident.) The degree to which we are leveraged could have adverse effects on our business, including the following: • Requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, dividends, stock repurchases and other general corporate purposes; • Increasing the amount of interest we pay, particularly if interest rates increase; • Limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; • Restricting us from making additional strategic acquisitions or exploiting business opportunities; • Placing us at a competitive disadvantage compared to our competitors that have less debt; • Reducing our currently available borrowing capacity or limiting our ability to borrow additional funds; and • Decreasing our ability to compete effectively or operate successfully under adverse economic and industry conditions.
The degree to which we are leveraged could have adverse effects on our business, including the following: • Requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, dividends, stock repurchases and other general corporate purposes; • Increasing the amount of interest we pay, particularly if interest rates increase; • Limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; • Restricting us from making additional strategic acquisitions or exploiting business opportunities; • Placing us at a competitive disadvantage compared to our competitors that have less debt; • Reducing our currently available borrowing capacity or limiting our ability to borrow additional funds; and • Decreasing our ability to compete effectively or operate successfully under adverse economic and industry conditions. 26 2025 Form 10-K Table of Contents Blackbaud, Inc.
If our enhanced products and services do not achieve widespread market adoption or there is a reduction in demand due to a lack of customer acceptance, technology challenges, strengthening competition, weakening economic conditions, or security or privacy concerns, our business could be harmed and our financial results could be adversely affected. 18 2024 Form 10-K Table of Contents Blackbaud, Inc.
If our AI-enhanced products and services do not achieve widespread market adoption or there is a reduction in demand due to a lack of customer acceptance, technology challenges, strengthening competition, weakening economic conditions, or security or privacy concerns, our business could be harmed and our financial results could be adversely affected.
In addition, implementation of some or all of this program diminishes our cash reserves and/or increases our debt, which may impact our ability to finance future growth, to pursue possible future strategic opportunities and acquisitions and fund liabilities and expenses related to the Security Incident.
In addition, implementation of some or all of this program diminishes our cash reserves and/or increases our debt, which may impact our ability to finance future growth and to pursue possible future strategic opportunities and acquisitions.
We cannot predict the specific terms of any such proposals or changes, whether or when they will be implemented, or their effect on our operations. Certain proposals or changes could, if implemented, have an adverse, material impact on our business, results of operations, financial condition or liquidity. We are incorporating generative AI technology into certain of our solutions and services.
We cannot predict the specific terms of any such proposals or changes, whether or when they will be implemented, or their effect on our operations. Certain proposals or changes could, if implemented, have an adverse, material impact on our business, results of operations, financial condition or liquidity.
In addition, issues relating to intellectual property rights in AI-generated content have not been fully addressed by the courts, laws or regulations. Accordingly, the implementation of generative AI technologies into our products and services may result in exposure to claims related to copyright infringement or other intellectual property misappropriation.
In addition, issues relating to intellectual property rights in AI-generated content have not been fully addressed by the courts, laws or regulations. Accordingly, the implementation of AI technologies into our products and services may result in exposure to claims related to copyright infringement or other intellectual property misappropriation. 2025 Form 10-K 19 Table of Contents Blackbaud, Inc.
If we incur additional debt, these risks may intensify. Our ability to meet our debt service obligations will depend upon our future performance, which will be subject to the financial, business and other factors affecting our operations, many of which are beyond our control. 2024 Form 10-K 25 Table of Contents Blackbaud, Inc.
If we incur additional debt, these risks may intensify. Our ability to meet our debt service obligations will depend upon our future performance, which will be subject to the financial, business and other factors affecting our operations, many of which are beyond our control.
As noted above, our executive offices and some of our data centers are located in areas that are vulnerable to the effects of climate change and could be subject to increased interruptions as a result of the severity and increased frequency of extreme weather events such as hurricanes, wildfires, floods, heat waves, or power shortages.
As noted above, our executive offices, some of our data centers and our operations in India are located in areas that are vulnerable to the effects of climate change and could be subject to increased interruptions as a result of the severity and increased frequency of extreme weather events such as 24 2025 Form 10-K Table of Contents Blackbaud, Inc. hurricanes, wildfires, floods, heat waves, or power shortages.
In addition, • On March 9, 2023, the Company reached a settlement with the SEC that fully resolved the previously disclosed SEC investigation of the Security Incident; • On October 5, 2023, the Company entered into separate, substantially similar Administrative Orders with each of 49 state Attorneys General and the District of Columbia that fully resolved the previously disclosed multi-state Civil Investigative Demand and the separate Civil Investigative Demand from the Office of the Indiana Attorney General relating to the Security Incident; • On May 20, 2024, the U.S.
In addition, the Company reached a settlement with the SEC that fully resolved an SEC investigation of the Security Incident; entered into separate, substantially similar Administrative Orders with each of 49 state Attorneys General and the District of Columbia that fully resolved a multi-state Civil Investigative Demand and the separate Civil Investigative Demand from the Office of the Indiana Attorney General relating to the Security Incident; reached a settlement with the U.S.
If our customers or we were found to be subject to and in violation of any privacy or data protection laws or regulations, our business may be materially and adversely impacted and we and/or our customers would likely have to change our business practices.
If our customers or we were found to be subject to and in violation of any privacy or data protection laws or regulations, our business may be materially and adversely impacted and we and/or our customers would likely have to change our business 28 2025 Form 10-K Table of Contents Blackbaud, Inc. practices.
Likewise, the use of AI involves significant technical complexity and requires specialized expertise. The success of any enhancement or new product depends on many factors, including its relevance to our customers, timely implementation and market acceptance.
Likewise, the use of AI technology involves significant technical complexity and requires specialized expertise, which is expected to require increased investment in infrastructure and headcount. The success of any enhancement or new product depends on many factors, including its relevance to our customers, timely implementation and market acceptance.
Internet-based services sometimes contain undetected errors when first 2024 Form 10-K 23 Table of Contents Blackbaud, Inc. introduced or when new versions or enhancements are released. We have from time to time found defects in our web-based services and new errors might again be detected in the future.
Internet-based services sometimes contain undetected errors when first introduced or when new versions or enhancements are released. We have from time to time found defects in our web-based services and new errors might again be detected in the future.
For example, following our acquisition of EVERFI, Inc ("EVERFI") in December 2021, we experienced the loss of certain employees and were unable to realize the anticipated returns on our investment prior to our disposition of the business in December 2024.
For example, following our acquisition of EVERFI, Inc ("EVERFI") in December 2021, we were unable to realize the anticipated returns on our investment prior to our disposition of the business in December 2024 due to certain of the reasons listed above.
This power to hold an emergency special meeting of the Board of Directors on short notice could discourage a potential acquirer from launching a bid to acquire majority ownership of the Company, a proxy solicitation in order to replace the current Board of Directors, or otherwise attempting to obtain control of the Company. 2024 Form 10-K 29 Table of Contents Blackbaud, Inc.
This power to hold an emergency special meeting of the Board of Directors on short notice could discourage a potential acquirer from launching a bid to acquire majority ownership of the Company, a proxy solicitation in order to replace the current Board of Directors, or otherwise attempting to obtain control of the Company. Officer Compensation Arrangements.
The terms of the California Judgment, FTC Order, the Attorneys General Administrative Orders and our settlement with the SEC require that we implement and maintain certain processes and programs and comply with certain legal requirements related to cybersecurity and data protection. Any future regulatory investigation or litigation settlements may also contain such requirements.
The terms of the California Judgment, FTC Order, the Attorneys General Administrative Orders and our settlement with the SEC require that we implement and maintain certain processes and programs and comply with certain legal requirements related to cybersecurity and data protection.
Because competition for highly qualified personnel is intense, we might not be able to attract and retain key personnel needed to support our planned growth. To meet our objectives successfully, we must attract and retain highly qualified personnel with specialized skill sets.
Because competition for highly qualified personnel is intense, we might not be able to attract and retain key personnel needed to support our planned growth.
New and emerging AI technologies may require additional investment in the development and maintenance of various models, approaches and processes, as well as development of protections and safeguards for the use of AI technologies, which may be expensive and could impact our financial results if we decide to further expand generative AI into our products and services.
AI technologies require substantial additional investment in the development and maintenance of various models, approaches and processes, as well as development of protections and safeguards for the use of AI technologies, which is expensive and could negatively impact our financial results as we further expand AI technology into our products and services.
We have recorded significant deferred tax assets, and we might never realize their full value, which would result in a charge against our earnings. As of December 31, 2024, we had deferred tax assets of $162.3 million.
We have recorded significant deferred tax assets, and we might never realize their full value, which would result in a charge against our earnings. As of December 31, 2025, we had deferred tax assets of $125.6 million. As of December 31, 2025, we have retained a valuation allowance against our U.S. net deferred tax assets.
Conforming 24 2024 Form 10-K Table of Contents Blackbaud, Inc. our solutions and services to PCI DSS or other payment services related regulations or requirements imposed by payment networks or our customers or payment processing partners is expensive and time-consuming.
Conforming our solutions and services to PCI DSS or other payment services related regulations or requirements imposed by payment networks or our customers or payment processing partners is expensive and time-consuming.
Bribery Act of 2010, and any trade regulations ensuring fair trade practices; • greater risk of failure to comply with foreign country employment or other human resources laws and regulations; • the imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements, including those pertaining to export restrictions, privacy and data protection, trade and employment restrictions and intellectual protections; and • general business disruptions caused by geopolitical situations and developments.
Bribery Act of 2010, and any trade regulations ensuring fair trade practices; • greater risk of failure to comply with foreign country employment or other human resources laws and regulations; • the imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements, including those pertaining to export restrictions, privacy and data protection, trade and employment restrictions and intellectual protections; and • general business disruptions caused by geopolitical situations and developments including, for example, in India, which has experienced in the past, and may again experience, civil unrest and terrorism and has, and may again, been involved in conflicts with other countries, such as the recent conflict with Pakistan.
Federal Trade Commission (the "FTC") finalized an Order (the “FTC Order”) evidencing its settlement with us in connection with the Security Incident; • On June 13, 2024, we agreed to a Final Judgment and Permanent Injunction with the Attorney General of the State of California (the "California Judgment") relating to the Security Incident; and • We previously received notices of governmental actions or investigations by the U.S.
Federal Trade Commission (the "FTC") in connection with the Security Incident; and agreed to a Final Judgment and Permanent Injunction with the Attorney General of the State of California (the "California Judgment") relating to the Security Incident. In addition, we received notices of governmental actions or investigations by the U.S.
An impairment of a significant portion of goodwill or intangible assets, such as the EVERFI impairment charges discussed in Note 4 to our consolidated financial statements in this report, could materially and negatively affect our results of operations and financial condition. Restrictions in our credit facility limit certain of our activities, including dividend payments, stock repurchases and acquisitions.
An impairment of a significant portion of goodwill or intangible assets, such as the EVERFI impairment charges discussed in Note 4 to our consolidated financial statements in this report, have in the past, and could in the future, materially and negatively affect our results of operations and financial condition.
Furthermore, many of our AI features may rely on third-party service providers. As such, any improper processing of personal data by these service providers could harm our reputation, business or customers, or expose us to legal liability.
Our use of AI technology may also present additional security risks due to embedded security vulnerabilities. Furthermore, many of our AI features may rely on third-party developers and other service providers, and any improper processing of personal data by these service providers could harm our reputation, business or customers, or expose us to legal liability.
The locations of our principal executive offices and our data centers are vulnerable to the effects of climate events and other natural disasters, including hurricanes, heat waves and earthquakes, which we have experienced in the past. In addition, the effects of climate change are harder to mitigate for our remote-first workforce, which exposes the Company to business disruption.
The locations of our principal executive offices, our data centers and our operations in India are vulnerable to the effects of climate events and other natural disasters, including hurricanes, heat waves, floods and earthquakes, which we have experienced in the past.
(See Note 14 to our consolidated financial statements in this report for additional information related to our stock repurchase program, including authorization amount, shares purchased, amounts paid and shares remaining available for purchase.) 26 2024 Form 10-K Table of Contents Blackbaud, Inc.
(See Note 14 to our consolidated financial statements in this report for additional information related to our stock repurchase program, including authorization amount, shares purchased, amounts paid and shares remaining available for purchase.) 2025 Form 10-K 27 Table of Contents Blackbaud, Inc. During 2025, we have continued to be subject to 1% U.S. federal excise taxes on share repurchases.
Furthermore, our subscription arrangements are generally for a term of three years at contract inception with three-year renewals thereafter. Our maintenance arrangement renewals are generally for a term of three years. As the end of the contract term approaches, we seek the renewal of the agreement with the customer.
Our subscription arrangements are generally for a term of three years at contract inception with three-year renewals thereafter, and our maintenance arrangement renewals are generally for a term of three years.
In addition, the implementation of one or more of our software solutions can involve significant capital commitments by our customers, which they may be unwilling or unable to make. If demand for and market acceptance of our solutions and services does not increase, we might not grow our business as we expect.
In addition, the implementation of one or more of our software solutions can involve significant capital commitments by our customers, which they may be unwilling or unable to make.
If we are unable to attract and retain suitably qualified management, there could be a material adverse impact on our business. Further, we use equity incentive programs and equity awards in lieu of cash as part of our overall employee compensation agreements to both attract and retain personnel.
Further, we use equity incentive programs and equity awards in lieu of cash as part of our overall employee compensation agreements to both attract and retain personnel.
We currently have non-U.S. operations primarily in the U.K., Canada, Australia, Costa Rica and India, and we intend to expand further into international markets. Expansion of our international operations has required, and will continue to require, a significant amount of attention from our management and substantial financial resources and might require us to add qualified management in these markets.
Expansion of our international operations has required, and will continue to require, a significant amount of attention from our management and substantial financial resources and might require us to add qualified management in these markets.
See below for a discussion of our previously issued and subsequently cancelled Series A Preferred Stock. The Board of Directors possesses the authority to call and hold emergency special meetings of the Board of Directors with less than forty-eight hours’ notice.
The Board of Directors possesses the authority to call and hold emergency special meetings of the Board of Directors with less than forty-eight hours’ notice.
A decline in our stock price could negatively impact the effectiveness of these equity incentive and related compensation programs as retention and recruiting tools. We may need to create new or additional equity incentive programs and/or compensation packages to remain competitive, which could be dilutive to our existing stockholders and/or adversely affect our results of operations.
We may need to create new or additional equity incentive programs and/or compensation packages to remain competitive, which could be dilutive to our existing stockholders and/or adversely affect our results of operations. The market for software and services for the social impact community might not grow as expected, which would negatively impact the growth of our business.
The technologies underpinning these features are in the early stages of commercial use and exist in an emerging regulatory environment, which presents regulatory, litigation, ethical, reputational, operational and financial risks. Many U.S. and international governmental bodies and regulators have adopted, or are in the process of developing, new regulations related to the use of AI and machine learning technologies.
Many U.S. federal, U.S. state and international governmental bodies and regulators have adopted, or are in the process of developing, new laws and regulations related to the use of AI and machine learning technologies.
In addition, insurance companies representing various customers’ interests through subrogation claims have contacted us, and certain insurance companies have filed subrogation claims in court, of which two cases remain active and unresolved. We also were a defendant in putative consumer class action cases in Canadian courts alleging harm from the Security Incident which have now been resolved.
We also were a defendant in putative consumer class action cases in U.S. and Canadian courts alleging harm from the Security Incident, all of which have now been resolved.
Department of Health and Human Services, the Office of the Australian Information Commissioner and the Office of the Privacy Commissioner of Canada, each of which we now believe are now longer active actions or investigations. See Note 11 to our consolidated financial statements included in this report for a more detailed description of the Security Incident and related matters.
Department of Health and Human Services, the Office of the Australian Information Commissioner and the Office of the Privacy Commissioner of Canada, each of which we now believe are now longer active actions or investigations.
Under the Rights Agreement, the Rights would have become exercisable if an entity, person or group acquires beneficial ownership of 20% or more of the outstanding Common Stock in a transaction not approved by the Board of Directors.
The Rights would have become exercisable if an 30 2025 Form 10-K Table of Contents Blackbaud, Inc. entity, person or group acquires beneficial ownership of 20% or more of the outstanding Common Stock in a transaction not approved by the Board of Directors at a price, and in a manner, that would have likely made any takeover or change of control attempt by such entity, person or group prohibitively expensive.
To protect our core proprietary technology, we rely on a combination of patent, 28 2024 Form 10-K Table of Contents Blackbaud, Inc. trademark, copyright and trade secret laws, as well as nondisclosure agreements, each of which affords only limited protection.
We might not be successful in protecting our proprietary technology, particularly in non-U.S. jurisdictions, and our proprietary rights might not provide us with a meaningful competitive advantage. To protect our core proprietary technology, we rely on a combination of patent, trademark, copyright and trade secret laws, as well as nondisclosure agreements, each of which affords only limited protection.
During 2024, we have been subject to this excise tax, but the amount will vary depending on various factors, including the amount and frequency of any stock repurchases and any permitted reductions or exceptions to the amount subject to the tax.
This tax liability will vary depending on various factors, including the amount and frequency of any stock repurchases and any permitted reductions or exceptions to the amount subject to the tax. Any resulting increase in our tax obligation or cash taxes paid could adversely affect our financial position and cash flows.
Although we aim to develop and use AI responsibly and attempt to identify and mitigate ethical and legal issues presented by its use, we may be unsuccessful in identifying or resolving issues before they arise. If we do not successfully address the risks inherent in the expansion of our international operations, our business could suffer.
Although we aim to develop and use AI responsibly and attempt to identify and mitigate ethical and legal issues presented by its use, we may be unsuccessful in identifying or resolving issues before they arise, which may affect our ability to develop and use AI or subject us to legal liability. 20 2025 Form 10-K Table of Contents Blackbaud, Inc.
We significantly increased our leverage in connection with stock repurchases, and may increase our leverage in the future in connection with acquisitions, Security Incident costs or other business purposes, which could adversely impact our business and financial performance. We incurred a substantial amount of indebtedness to fund the ASR Transaction (as defined on page 105 ) and other stock repurchases.
We have maintained an elevated leverage position, primarily due to stock repurchases, and we may increase our leverage in the future in connection with acquisitions or other business purposes, which could adversely impact our business and financial performance.
(See Note 11 to our consolidated financial statements included in this report for a description of the Security Incident and related legal proceedings and regulatory matters.) 2024 Form 10-K 27 Table of Contents Blackbaud, Inc. We are in the information technology business, and our solutions and services store, retrieve, transfer, manipulate and manage our customers’ information and data.
Operational Risks" in this report regarding the Security Incident and related risks.) We are in the information technology business, and our solutions and services store, retrieve, transfer, manipulate and manage our customers’ information and data.
Any disruption or failure in our AI systems or infrastructure could result in delays or errors in our operations, which could harm our business and financial results. Our generative AI technology features may also generate output that is misleading, insecure, inaccurate, harmful or otherwise flawed, which may harm our reputation, business or customers, or expose us to legal liability.
This presents additional risks, including the possibility of opaque decision making, unique security concerns due to agent permissioning, challenges with monitoring actions and assigning and enforcing accountability. Our AI technology features may also generate output that is misleading, inaccurate, harmful or otherwise flawed, which may harm our reputation, business or customers, or expose us to legal liability.
Significant management time and Company resources have been, and are expected to continue to be, devoted to the Security Incident. For example, for full year 2024, we incurred net pre-tax expenses of $13.7 million related to the Security Incident, which included $7.0 million for ongoing legal fees and $6.8 million for settlements and recorded liabilities for loss contingencies.
Furthermore, significant management time and Company resources have been, and are expected to continue to be, devoted to the Security Incident.
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The market for software and services for the social impact community might not grow and the organizations in that community might not continue to adopt, or renew their subscriptions for, our solutions and services.
Added
To meet our objectives successfully, we must attract and retain highly qualified personnel with specialized skill sets, including with regard to our AI products and our expansion in India, each as discussed in more detail below. If we are unable to attract and retain suitably qualified management, there could be a material adverse impact on our business.
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This technology is new and developing, and while we aim to adopt known best practices, it may result in operational, financial and reputational harm and other adverse consequences to our business. We are implementing AI features in certain of our solutions and services.
Added
Declines in our stock price may have in the past negatively impacted, and could again in the future negatively impact, the effectiveness of these equity incentive and related compensation programs as retention and recruiting tools.
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The Security Incident has had, and may continue to have, numerous adverse effects on our business, results of operations, financial condition and cash flows. As previously disclosed, on July 16, 2020, we contacted certain customers to inform them about the Security Incident.
Added
If demand for and market acceptance of our solutions and services does not increase, we might not grow our business as we expect. 18 2025 Form 10-K Table of Contents Blackbaud, Inc.
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We have also received approximately 400 reservations of the right to seek expense recovery in the future from customers or their attorneys in the U.S., U.K. and Canada related to the Security Incident, 2024 Form 10-K 21 Table of Contents Blackbaud, Inc. none of which resulted in claims submitted to us and are considered by us to have been abandoned by the customers.
Added
Our existing customers may not continue to adopt, or renew their subscriptions for, our solutions and services, which could have a material adverse effect on our business, results of operations and financial liquidity.
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We have also received notices of proposed claims on behalf of a number of U.K. data subjects, which have been fully resolved and closed or are inactive and are considered by us to have been abandoned by the data subjects.
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While three‑year terms remain the standard minimum under our renewal program, a portion of our customers elect to renew for longer terms, including four‑year or longer arrangements, which extends the duration over which renewals occur. As the end of the contract term approaches, we seek the renewal of the agreement with the customer.
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In addition, presently, we are a defendant in putative consumer class action cases in U.S. federal courts (most of which have been consolidated under multi district litigation to a single federal court) alleging harm from the Security Incident.
Added
For example, approximately 40% of our existing customer contracts are due for renewal in 2026, approximately 30% in 2027 and approximately 30% in 2028.
Removed
The plaintiffs in these cases, who generally purport to represent various classes of individual constituents of our customers, generally claim to have been harmed by alleged actions and/or omissions by us in connection with the Security Incident and assert a variety of common law and statutory claims seeking monetary damages, injunctive relief, costs and attorneys’ fees, and other related relief.
Added
To the extent a greater proportion of customers enter into extended‑term arrangements, the timing of renewals may become more concentrated in later periods, and while our extended-term arrangements typically include embedded price increases and other contractual terms designed to support economics over the contract term, we may have fewer opportunities in any given year to comprehensively re‑price or renegotiate customer relationships.
Removed
On May 14, 2024, the Court issued a memorandum opinion and order (1) denying the multi district litigation plaintiffs' motion for class certification, (2) granting our motion to exclude the multi district litigation plaintiffs' expert, (3) denying the multi district litigation plaintiffs' motion to exclude our expert and (4) denying all other pending motions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+1 added−2 removed13 unchanged
Biggest changeSee Note 11 to the consolidated audited financial statements contained in this report for additional information regarding the Security Incident and its past and potential impact on the Company. Notwithstanding our strong commitment to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. See Item 1A.
Biggest changeNotwithstanding our strong commitment to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. See Item 1A. "Risk Factors" for a discussion of our cybersecurity risks.
The ORCAS Committee receives detailed cybersecurity information from key security personnel and reports at least quarterly up through our Risk Steering Committee, which is made up of executives and senior management from various Blackbaud departments: Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Technology Officer, General Counsel, Chief Privacy Officer and CISO, who has extensive information technology and program management experience.
The REEF Committee receives detailed cybersecurity information from key security personnel and reports at least quarterly up through our Risk Steering Committee, which is made up of executives and senior management from various Blackbaud departments: Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Information Officer, Chief Technology Officer, Chief Legal Officer, Chief Privacy Officer and CISO, who has extensive information technology and program management experience.
Our CISO has served in various roles of increasing responsibility in information technology and information security for more than 25 years, including serving in various cybersecurity leadership roles within public and private companies.
Our CISO has served in various roles of increasing responsibility in information technology and information security for more than 25 years, including serving in various cybersecurity leadership roles at private companies.
See Note 11 to the consolidated audited financial statements contained in this report for additional information regarding the Security Incident. We utilize a four-prong strategy for assessing, identifying and managing material risks from cybersecurity threats: 1.
See Note 11 to the consolidated audited financial statements contained in this report for additional information regarding the Security Incident. 32 2025 Form 10-K Table of Contents Blackbaud, Inc. We utilize a four-prong strategy for assessing, identifying and managing material risks from cybersecurity threats: 1.
As previously disclosed, we have been and remain subject to risks and uncertainties as a result of a ransomware attack against us in May 2020 in which a cybercriminal removed a copy of a subset of data from our self-hosted environment.
As previously disclosed, we were subject to a ransomware attack against us in May 2020 in which a cybercriminal removed a copy of a subset of data from our self-hosted environment.
The Risk Oversight Committee communicates as appropriate with the full Board of Directors, which is ultimately responsible for cybersecurity risk oversight.
The Risk Oversight Committee communicates as appropriate with the full Board of Directors, which is ultimately responsible for cybersecurity risk oversight. 34 2025 Form 10-K Table of Contents Blackbaud, Inc.
"Risk Factors" for a discussion of our cybersecurity risks. Governance Management's Assessment and Management of Cybersecurity Threats Our multi-level cybersecurity governance and risk management structure begins with our Operational Risk Compliance and Security (“ORCAS”) Committee consisting of cross-functional management representatives throughout our Company.
Governance Management's Assessment and Management of Cybersecurity Threats Our multi-level cybersecurity governance and risk management structure begins with our Risk Evaluation & Enterprise Framework ("REEF") Committee consisting of cross-functional management representatives throughout our Company.
As a result of the Security Incident, we are currently subject to certain legal proceedings and claims and could be the subject of additional legal proceedings, claims, inquiries and investigations in the future that might result in adverse judgments, settlements, fines, penalties or other resolution.
As a result of the Security Incident, we were subject to various legal proceedings, claims, inquiries and investigations, the resolution of which resulted in material adverse judgments, settlements, fines, penalties or other resolutions.
We also participate in global communities and conference platforms to share information and present on best practices to improve the industry’s security awareness posture.
We also participate in global communities and conference platforms to share information and present on best practices to improve the industry’s security awareness posture. In addition, Blackbaud employees are all engaged in on-going security and privacy awareness training campaigns to ensure they are empowered to protect both Blackbaud’s and our customers’ data.
The Cybersecurity Subcommittee determines cybersecurity materiality and is made up of our General Counsel, CISO, Chief Accounting Officer and Director of SEC Reporting.
Additionally, our cybersecurity Incident Response plan timely informs our Cybersecurity Incident Subcommittee on active cybersecurity incidents that are potentially material. The Cybersecurity Subcommittee determines cybersecurity materiality and is made up of our Chief Legal Officer, CISO and Senior Director of SEC Reporting.
He holds two undergraduate degrees—one in business administration and the other in computer information systems, a graduate degree in information systems and maintains two cybersecurity industry recognized certifications: Certified Information Systems Security Professional (CISSP) and Certified Cloud Security Professional (CCSP), both from the International Information System Security Certification Consortium.
He holds two undergraduate degrees—one in business administration and the other in computer information systems—and a graduate degree in information systems, maintains multiple cybersecurity industry recognized certifications and is an alumnus of the FBI CISO Academy. Cybersecurity leaders reporting to our CISO also have significant information technology and information security experience and industry recognized certifications.
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In addition, Blackbaud employees are all engaged in on-going security and privacy awareness training campaigns to ensure they are empowered to protect both Blackbaud’s and our customers’ data. 2024 Form 10-K 31 Table of Contents Blackbaud, Inc.
Added
See Note 11 to the consolidated audited financial statements contained in this report for additional information regarding the Security Incident and its impact on the Company. 2025 Form 10-K 33 Table of Contents Blackbaud, Inc.
Removed
Cybersecurity leaders reporting to our CISO also have significant information technology and information security experience and industry recognized certifications. 32 2024 Form 10-K Table of Contents Blackbaud, Inc. Additionally, our cybersecurity Incident Response plan timely informs our Cybersecurity Incident Subcommittee on active cybersecurity incidents that are potentially material.

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−0 removed0 unchanged
Biggest changeIn October 2024, we signed a membership agreement for office space in Hyderabad, India to support our business operations in India. In February 2025, we were released from our lease for office space in Washington, DC (which was acquired as part of our acquisition of EVERFI in December 2021).
Biggest changeIn February 2025, we were released from our lease for office space in Washington, DC (which was acquired as part of our acquisition of EVERFI in December 2021). For additional information, see Note 11 to our consolidated financial statements in this report. ITEM 3.
For additional information, see Note 18 to our consolidated financial statements in this report. ITEM 3. LEGAL PROCEEDINGS For a discussion of our legal proceedings, see Note 11 to our consolidated financial statements in this report.
LEGAL PROCEEDINGS For a discussion of our legal proceedings, see Note 11 to our consolidated financial statements in this report.
ITEM 2. PROPERTIES We own our LEED Gold certified global headquarters facility in Charleston, South Carolina, which consists of approximately 172,000 square feet. We believe that it is in good operating condition and adequately serves our current business operations. As a remote-first workforce company, we have leased a significant portion of the office space in our global headquarters facility.
ITEM 2. PROPERTIES We own our LEED Gold certified global headquarters facility in Charleston, South Carolina, which consists of approximately 172,000 square feet. We believe that it is in good operating condition and adequately serves our current business operations.
Added
As a Remote-Flexible workforce company, we have leased a significant portion of the office space in our global headquarters facility to unrelated third parties. In June 2025 and January 2026, we signed leases as lessee for 69,058 and 45,370 square feet, respectively, of office space in Hyderabad, India to support our business operations in India.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. Legal proceedings 33 Item 4. Mine safety disclosures 33 PART II. 34 Item 5. Market for registrant's common equity, related stockholder matters and issuer purchases of equity securities 34 Item 6. [Reserved] 35 Item 7. Management's discussion and analysis of financial condition and results of operations 36 Item 7A.
Biggest changeItem 3. Legal proceedings 35 Item 4. Mine safety disclosures 35 PART II. 36 Item 5. Market for registrant's common equity, related stockholder matters and issuer purchases of equity securities 36 Item 6. [Reserved] 37 Item 7. Management's discussion and analysis of financial condition and results of operations 38 Item 7A.
Quantitative and qualitative disclosures about market risk 64 Item 8. Financial statements and supplementary data 65
Quantitative and qualitative disclosures about market risk 63 Item 8. Financial statements and supplementary data 64

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+1 added−2 removed2 unchanged
Biggest changePeriod Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (2) Beginning balance, October 1, 2024 $ 737,188 October 1, 2024 through October 31, 2024 710,974 $ 25.74 (3) 710,974 718,886 November 1, 2024 through November 30, 2024 899,327 83.55 889,480 644,562 December 1, 2024 through December 31, 2024 762 78.13 — 644,562 Total 1,611,063 $ 58.04 1,600,454 $ 644,562 (1) Includes 10,609 shares (9,847 in November and 762 in December) withheld by us to satisfy the minimum tax obligations of employees due upon vesting of restricted stock awards and units.
Biggest changePeriod Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (2) Beginning balance, October 1, 2025 $ 514,399 October 1, 2025 through October 31, 2025 250,738 $ 64.15 249,464 498,394 November 1, 2025 through November 30, 2025 458,121 58.50 455,939 471,724 December 1, 2025 through December 31, 2025 660,648 62.34 659,891 960,569 Total 1,369,507 $ 61.39 1,365,294 $ 960,569 (1) Includes 4,213 shares (1,274 in October, 2,182 in November and 757 in December) withheld by us to satisfy the minimum tax obligations of employees due upon vesting of restricted stock awards and units.
Issuer Purchases of Equity Securities The following table provides information about shares of common stock acquired or repurchased during the three months ended December 31, 2024 under our stock repurchase program as then in effect, as well as common stock withheld by us to satisfy the minimum tax obligations of employees due upon vesting of restricted stock awards and units.
Issuer Purchases of Equity Securities The following table provides information about shares of common stock acquired or repurchased during the three months ended December 31, 2025 under our stock repurchase program as then in effect, as well as common stock withheld by us to satisfy the minimum tax obligations of employees due upon vesting of restricted stock awards and units.
The performance graph compares the performance of our common stock to the Nasdaq Composite Index and the Nasdaq Computer Index. The graph covers the most recent five-year period ended December 31, 2024. The graph assumes that the value of the investment in our common stock and each index was $100.00 at December 31, 2019, and that all dividends are reinvested.
The performance graph compares the performance of our common stock to the Nasdaq Composite Index and the Nasdaq Computer Index. The graph covers the most recent five-year period ended December 31, 2025. The graph assumes that the value of the investment in our common stock and each index was $100.00 at December 31, 2020, and that all dividends are reinvested.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “BLKB.” According to the records of our transfer agent, as of February 18, 2025, there were approximately 101 stockholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “BLKB.” According to the records of our transfer agent, as of February 9, 2026, there were approximately 95 stockholders of record of our common stock.
Dividends We have not declared or paid any cash dividends on our common stock since the first quarter of 2020, and we do not presently plan to pay cash dividends on our common stock in the foreseeable future.
The program does not have an expiration date. Dividends We have not declared or paid any cash dividends on our common stock since the first quarter of 2020, and we do not presently plan to pay cash dividends on our common stock in the foreseeable future.
The level of this acquisition activity varies from period to period based upon the timing of award grants and vesting. (2) In July 2024, our Board of Directors reauthorized, expanded and replenished our stock repurchase program by raising the total capacity under the program from $500.0 million to $800.0 million available for repurchases.
The level of this acquisition activity varies from period to period based upon the timing of award grants and vesting. (2) In December 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.
Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, this number is not representative of the total number of beneficial owners of our stock. On February 18, 2025, the closing price of our common stock was $70.96.
Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, this number is not representative of the total number of beneficial owners of our stock. On February 9, 2026, the closing price of our common stock was $48.25.
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December 31, 2019 2020 2021 2022 2023 2024 Blackbaud, Inc. $100.00 $72.44 $99.39 $74.07 $109.11 $93.03 Nasdaq Composite Index 100.00 144.92 177.06 119.45 172.77 223.87 Nasdaq Computer Index 100.00 157.33 199.80 129.82 212.86 284.38 34 2024 Form 10-K Table of Contents Blackbaud, Inc.
Added
December 31, 2020 2021 2022 2023 2024 2025 Blackbaud, Inc. $100.00 $137.21 $102.26 $150.63 $128.42 $110.01 Nasdaq Composite Index 100.00 122.18 82.43 119.22 154.48 187.14 Nasdaq Computer Index 100.00 127.00 82.52 135.30 180.76 232.70 36 2025 Form 10-K Table of Contents Blackbaud, Inc.
Removed
The program does not have an expiration date. (3) Includes the settlement of the ASR in October 2024 in which no cash was exchanged (see discussion on page 56 ).

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

115 edited+63 added−101 removed59 unchanged
Biggest changeCost of recurring revenue increased by $24.1 million, or 5.1%, driven primarily by the following: + Increase in hosting and data center costs of $5.1 million as we continue to migrate our cloud infrastructure to leading public cloud service providers and make investments in security; currently, we expect our cloud infrastructure migration efforts and increased level of cybersecurity investments to continue for the foreseeable future + Increase in amortization of intangible assets from business combinations of $4.6 million as most of the intangible assets we acquired with EVERFI in December 2021 were amortized on a curve that represented the expected period of economic benefit + Increase in transaction-based costs of $4.0 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 contractor costs of $3.8 million largely related to enhancements to our cybersecurity program + Increase in third-party software costs of $2.9 million primarily due to the number of licenses needed and also price increases for the software being used + Increase in amortization of capitalized software and content development costs of $2.8 million due to our continued investments in the innovation and security of our solutions - Decrease in stock-based compensation costs of $1.4 million primarily due to overall Company performance against 2024 goals and a decrease in the grant date fair value of equity award grants Recurring gross margin increased by 10 basis points primarily due to the increase in recurring revenue outpacing the increase in cost of recurring revenue.
Biggest changeSee 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 $3.3 million primarily related to investments in our internal cybersecurity program We are continuing to make investments in the business in areas such as innovation, AI, cybersecurity and our continued shift of cloud infrastructure to leading public cloud service providers.
Income Taxes Income tax (benefit) provision ($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.
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.
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, 2024 will remain outstanding until maturity, with minimum payments occurring as currently scheduled, and (ii) that there are no assumed future borrowings on the 2024 Revolving Facility for the purposes of determining minimum commitment amounts.
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.
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 renewals and student enrollments or significant acquisitions.
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.
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 and content development costs; stock-based compensation; employee severance; acquisition and disposition-related costs; Security Incident-related costs; and impairment and disposition charges.
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.
The actual interest expense recognized in our consolidated statements of comprehensive 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.
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.
Our cash flow from operations normally fluctuates quarterly due to the combination of the timing of customer contract renewals, delivery of professional services and occurrence of customer events, as well as merit-based salary increases, among other factors.
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.
Certain real estate loans (as described in Note 9 to our audited consolidated financial statements included in this report) also require periodic principal payments and the balances of the real estate loans are due upon maturity in April 2038.
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.
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 and Costa Rica.
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 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. 2024 Form 10-K 59 Table of Contents Blackbaud, Inc.
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.
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, 2024.
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.
See Note 3 to our consolidated financial statements in this report for information regarding our business acquisitions. 2024 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.
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.
We have not made any material changes in the accounting methodology we use to recognize revenue during the year ended December 31, 2024. 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.
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.
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, 2024.
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.
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 judgement in estimating the fair value of intangible assets acquired, which involves the use of significant assumptions.
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.
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 costs.
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.
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 64 for more information about our variable interest rate exposure and related risk.
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.
(4) 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.
(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.
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 2024 Form 10-K Table of Contents Blackbaud, Inc.
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.
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, 2024.
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.
(3) 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.
(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.
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, 2024, which includes the effect of interest rate swap agreements.
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.
Operating Cash Flow Throughout 2024 and 2023, 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 income taxes, amortization of deferred financing costs and debt discount, adjustments to our provision for credit losses and sales returns, the EVERFI impairment charges, loss on disposition of business; and (ii) changes in our working capital.
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.
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 2024, foreign translation resulted in increases in our revenues and expenses denominated in non-U.S. currencies.
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.
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.
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.
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. 2024 Form 10-K 63 Table of Contents Blackbaud, Inc.
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.
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. 2024 Form 10-K 53 Table of Contents Blackbaud, Inc.
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.
The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro. 2024 Form 10-K 51 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.
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.
The foreign net operating loss carryforwards have a valuation reserve due to the uncertainty of realizing such carryforwards in the future.
The foreign net operating loss carryforwards have a valuation allowance due to the uncertainty of realizing such carryforwards in the future.
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. 2024 Form 10-K 49 Table of Contents Blackbaud, Inc.
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.
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 have agreed to implement and improve certain of our cybersecurity programs and tools through May 2044.
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.
During 2024, the fluctuation in foreign currency exchange rates increased our total revenue and our income from operations by $3.0 million and $1.1 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.
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.
See Non-GAAP organic revenue growth table above. 52 2024 Form 10-K 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 and content development, and capital expenditures for property and equipment.
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.
The following is a summary of the financial covenants under the 2024 Credit Facilities: Financial Covenant Requirement Ratio as of December 31, 2024 Net Leverage Ratio (1) ≤ 3.75 to 1.00 2.57 to 1.00 Interest Coverage Ratio ≥ 2.50 to 1.00 7.13 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.
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.
Operating leases As of December 31, 2024, we had remaining operating lease payments of $45.4 million. These payments have not been reduced by sublease income, incentive payments, reimbursement of leasehold improvements or the amount representing imputed interest of $6.7 million. Our operating leases are generally for corporate offices, subleased offices and certain equipment and furniture.
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.
We have deferred tax assets for federal, state, and international net operating loss carryforwards, a federal and state capital loss carryforward 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.
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 accumulated currency translation adjustment, recorded within accumulated other comprehensive loss as a component of stockholders’ equity, was a loss of $12.7 million as of December 31, 2024 and a loss of $9.8 million as of December 31, 2023.
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.
Cost of recurring revenue is primarily comprised of compensation costs for customer support and production IT personnel, hosting and data center costs, third-party contractor expenses, third-party royalty and data expenses, allocated depreciation, facilities and IT support 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 and other costs incurred in providing support and recurring services to our customers.
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.
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, 2024, we expect to pay interest expense over the life of our debt obligations of approximately $273.4 million.
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 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 accounting principles generally accepted in the United States ("GAAP").
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.
In addition, we used net cash of $1.2 million in the disposition of a business and $5.0 million for a minority investment in a business during 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.
Further, 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.
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.
Years ended December 31, (dollars in millions) 2024 2023 GAAP net cash provided by operating activities $ 296.0 $ 199.6 GAAP operating cash flow margin 25.6 % 18.1 % Non-GAAP adjustments: Less: purchase of property and equipment (7.4) (4.7) Less: capitalized software and content development costs (59.8) (59.4) Non-GAAP free cash flow (1) $ 228.8 $ 135.5 Non-GAAP free cash flow margin 19.8 % 12.3 % Non-GAAP adjustments: Add: Security Incident-related cash flows, net of insurance 15.9 78.0 Non-GAAP adjusted free cash flow (1) $ 244.7 $ 213.5 Non-GAAP adjusted free cash flow margin 21.2 % 19.3 % (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.
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.
We currently expect interest expense for the full year 2025 to be approximately $65 million to $69 million although our interest expense in connection with the variable rate portion of our outstanding debt could increase in a rising interest rate environment.
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.
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, dispositions, such as our sale of EVERFI on December 31, 2024, new market opportunities, new solution introductions or other factors.
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.
We are continually investing in innovation, which we believe will increase gross dollar retention over the long-term. Balance sheet and cash flow At December 31, 2024, our cash and cash equivalents were $67.6 million. Under the 2024 Credit Facilities, the carrying amount of our debt was $1.0 billion and our net leverage ratio was 2.57 to 1.00.
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.
The amount of taxes paid by us on behalf of employees related to the settlement or exercise 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.
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.
Debt As of December 31, 2024, we had total remaining principal payments of $1.1 billion.
Debt As of December 31, 2025, we had total remaining principal payments of approximately $1.1 billion.
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 costs, acquisition-related expenses and other administrative expenses. 2024 vs. 2023 General and administrative expenses decreased by $47.2 million, or 24.9%.
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 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 leading software provider exclusively dedicated to powering social impact.
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.
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.
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.
The enhancements we are making in our go-to-market approach are expected to reduce our average customer acquisition cost per customer as well as the related payback period while increasing sales velocity. 44 2024 Form 10-K Table of Contents Blackbaud, Inc. 2024 vs. 2023 Sales, marketing and customer success expenses decreased by $14.7 million, or 6.9%.
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%.
At December 31, 2024, our available borrowing capacity under the 2024 Credit Facilities was $468.7 million. The 2024 Credit Facilities mature in April 2029. At December 31, 2024, the carrying amount of our debt under the 2024 Credit Facilities was $1.0 billion. Our average daily borrowings were $929.5 million during 2024.
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.
Investing Cash Flow During 2025, we expect our total capital expenditures, including estimated outlays for capitalized software development costs, to be between approximately $55.0 million and $65.0 million. 2024 vs. 2023 Net cash used in investing activities of $73.4 million increased by $9.0 million during 2024, when compared to 2023.
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.
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. 62 2024 Form 10-K Table of Contents Blackbaud, Inc.
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.
(3) Includes Security Incident-related costs incurred during the twelve months ended December 31, 2024 of $13.7 million, which included approximately $6.8 million in recorded liabilities for loss contingencies, and during the twelve months ended December 31, 2023 of $53.4 million, which included approximately $31.0 million in recorded liabilities for loss contingencies.
(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.
(2) 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.
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.
Qualifying capitalized software and content development costs associated with our cloud solutions and online educational courses are subsequently amortized to cost of recurring revenue over the related asset's estimated useful life, which generally range from three to seven years.
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.
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.
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.
Non-GAAP adjusted free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development and capital expenditures for property and equipment, plus cash outflows, net of insurance, related to the Security Incident.
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.
Stock repurchase program On January 17, 2024, our Board of Directors reauthorized, expanded and replenished our stock repurchase program by raising the total capacity under the program from $250.0 million to $500.0 million available for repurchases. The program does not have an expiration date.
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.
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.
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.
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.
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.
Liquidity and Capital Resources The following table presents selected financial information about our financial position: (dollars in millions) December 31, 2024 December 31, 2023 Change Cash and cash equivalents $ 67.6 $ 31.3 116.4 % Property and equipment, net 91.9 98.7 (6.9) % Software and content development costs, net 148.3 160.2 (7.4) % Total carrying value of debt 1,075.0 779.7 37.9 % Working capital (275.8) (267.4) (3.1) % The following table presents selected financial information about our cash flows: Years ended December 31, (dollars in millions) 2024 2023 Change Net cash provided by operating activities $ 296.0 $ 199.6 48.3 % Net cash used in investing activities (73.4) (64.4) 14.0 % Net cash used in financing activities (139.4) (143.0) (2.5) % Our principal sources of liquidity are our operating cash flow, funds available under the 2024 Credit Facilities and cash on hand.
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.
Deferred Revenue The table below compares the components of deferred revenue from our consolidated balance sheets: (dollars in millions) December 31, 2024 December 31, 2023 Change Total deferred revenue (1) 361.5 394.9 (8.5) % Less: Long-term portion 2.0 2.4 (15.9) % Current portion (1) $ 359.5 $ 392.5 (8.4) % (1) The individual amounts for each year may not sum to total deferred revenue or current portion of deferred revenue due to rounding.
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.
During 2024, we generated $296.0 million in cash flow from operations, had a net increase in borrowings of $296.7 million, returned $418.0 million to stockholders by way of share repurchases and had aggregate cash outlays of $67.2 million for purchases of property and equipment and capitalized software and content development costs.
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.
At December 31, 2024, we were in compliance with our debt covenants under the 2024 Credit Facilities. See Note 9 to our consolidated financial statements included in this report for additional information regarding the 2024 Credit Facilities.
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.
Given our remote-first workforce strategy and real estate footprint optimization efforts, as discussed above, 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.
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.
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.
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.
We expect that the amount of software development costs capitalized will modestly decrease in the near-term due to the disposition of EVERFI. We continue to prioritize making investments in innovation, quality, security and the integration of our solutions, which we believe will drive long-term revenue growth. 2024 Form 10-K 45 Table of Contents Blackbaud, Inc.
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.
Years ended December 31, (dollars in millions) 2024 2023 GAAP net (loss) income $ (283.2) $ 1.8 Non-GAAP adjustments: Add: Interest, net 45.8 31.1 Add: GAAP income tax (benefit) provision (28.4) 15.8 Add: Depreciation 12.8 13.0 Add: Amortization of intangibles from business combinations 60.5 55.6 Add: Amortization of software and content development costs (1) 51.2 45.3 Subtotal (2) 141.9 160.9 Non-GAAP EBITDA (2) $ (141.2) $ 162.7 Non-GAAP EBITDA margin (3) (12.2) % Non-GAAP adjustments: Add: Stock-based compensation expense 105.0 127.8 Add: Employee severance — 5.1 Add: Acquisition and disposition-related costs (4) 6.1 7.5 Add: Security Incident-related costs (4) 13.7 53.4 Add: EVERFI impairment and disposition charges 405.4 — Subtotal (2) 530.1 193.8 Non-GAAP Adjusted EBITDA (2) $ 388.9 $ 356.5 Non-GAAP Adjusted EBITDA margin (5) 33.7 % Rule of 40 (6) 38.9 % Non-GAAP adjusted EBITDA 388.9 356.5 Foreign currency impact on Non-GAAP adjusted EBITDA (1.6) — Non-GAAP adjusted EBITDA on constant currency basis (7) 387.3 356.5 Non-GAAP adjusted EBITDA margin on constant currency basis (7) 33.6 % Rule of 40 on constant currency basis (8) 38.6 % (1) Includes amortization expense related to software and content development costs and amortization expense from capitalized cloud computing implementation costs.
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.
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.
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%.
We paid $56.8 million to satisfy tax obligations of employees upon settlement or exercise of equity awards during 2024 compared to $35.9 million during 2023.
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.
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. 2024 vs. 2023 Net cash provided by operating activities increased by $96.3 million during the year ended December 31, 2024, when compared to the same period in 2023, primarily due to a $49.4 million increase in net income adjusted for non-cash expenses and a $46.9 million increase in cash flow from operations associated with 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 $21.0 million increase in net income adjusted for non-cash expenses.
Interest Expense Interest expense ($M) Percentages indicate expenses as a percentage of total revenue 2024 vs. 2023 Interest expense increased in dollars and as a percentage of total revenue during 2024 when compared to 2023, primarily due to our incremental borrowings to fund our ASR Transaction (as defined on page 105 ) and other stock repurchases.
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 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.
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.
Income from operations decreased by $315.2 million during 2024, driven largely by the following: - Pre-tax loss on disposition EVERFI of $405.4 million, including noncash impairment charges of $390.2 million.
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.
Subject to certain conditions, this registration statement will be effective through January 9, 2028. At December 31, 2024, our total cash and cash equivalents balance included approximately $13.9 million of cash that was held by operations outside the U.S.
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.
For additional information on the impact of foreign currency fluctuations on our financial results, see Foreign Currency Exchange Rates below on page 59 .
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.
Comparison of 2024 vs. 2023 For information regarding the comparison of 2023 to 2022, please refer to Part II Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 21, 2024. Acquisition On August 19, 2022, we acquired Kilter, Inc.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign Currency Risk For a discussion of our exposure to foreign currency exchange rate fluctuations, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Foreign Currency Exchange Rates” in Item 7 of this report. 64 2024 Form 10-K Table of Contents Blackbaud, Inc.
Biggest changeForeign Currency Risk For a discussion of our exposure to foreign currency exchange rate fluctuations, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Foreign Currency Exchange Rates” in Item 7 of this report. 2025 Form 10-K 63 Table of Contents Blackbaud, Inc.
Our interest rate exposure includes SOFR rates. Due to the nature of our debt, the materiality of the fair values of the derivative instruments and the highly liquid, short-term nature and level of our cash and cash equivalents as of December 31, 2024, we believe that the risk of exposure to changing interest rates for those positions is immaterial.
Our interest rate exposure includes SOFR rates. Due to the nature of our debt, the materiality of the fair values of the derivative instruments and the highly liquid, short-term nature and level of our cash and cash equivalents as of December 31, 2025, we believe that the risk of exposure to changing interest rates for those positions is immaterial.
There were no significant changes in how we manage interest rate risk between December 31, 2023 and December 31, 2024.
There were no significant changes in how we manage interest rate risk between December 31, 2024 and December 31, 2025.

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