Blackbaud Reports Revenue of $292.6 Million and Adjusted EPS of $1.36 in Third Quarter
Key Facts
Blackbaud reported results on October 28, 2026, for the third quarter ended September 30, recording revenue of $292.6 million, up 4.1% from the same period in 2025. Organic revenue, a company-defined non-GAAP measure, also rose 4.1%. The results highlight moderate revenue growth alongside stronger improvement in some profitability measures. Recurring revenue was $287.0 million, up 4.1% year over year. It accounted for 98.1% of total quarterly revenue, reflecting broad reliance on recurring revenue sources.
GAAP net income was $46.1 million, and diluted earnings per share were $1.02, an increase of $0.04 per share compared with the third quarter of 2025. On a non-GAAP basis, net income reached $61.2 million and diluted earnings per share were $1.36, an increase of $0.26. The difference between the measures shows that the assessment of profitability varies depending on the basis used. The company also recorded operating income of $60.0 million and an operating margin of 20.5%. The operating margin rose 110 basis points from the comparable period.
Adjusted earnings before interest, taxes, depreciation and amortization were $111.1 million, an increase of $11.4 million from the third quarter of 2025. The margin on this measure rose to 38.0%, up 260 basis points year over year. The company recorded a 42.1% score under the Rule of 40, which combines revenue growth and profitability in a single measure for software companies. These indicators show that earnings improved faster than revenue during the quarter. They remain adjusted measures, alongside operating income and net income calculated under accounting standards.
Net cash provided by operating activities was $141.7 million, an increase of $2.5 million from the same period a year earlier. Free cash flow, a company-defined non-GAAP measure, reached $126.0 million, up $2.8 million. These cash flows provide another perspective on cash generated during the quarter, alongside earnings and operating margins. The chief financial officer said the company had repurchased more than 7% of its outstanding shares from the end of 2025 through the announcement date. He added that the leverage ratio fell from 2.7 times in the first quarter to 2.3 times in the third quarter.
Blackbaud reaffirmed its 2026 financial guidance, saying it expects to finish the year in the upper half of the specified ranges for all four key measures. The annual GAAP revenue range is $1.173 billion to $1.179 billion. The company set a range of $430 million to $438 million for adjusted earnings before interest, taxes, depreciation and amortization, and adjusted diluted earnings per share of $5.15 to $5.25. It also forecast adjusted free cash flow of $280 million to $290 million. The annual guidance places the quarterly results within the framework of the company's targets for the rest of 2026, while keeping its outlook in the upper half of all four ranges.
On the product front, the company announced the launch of Lantern, a large language model specialized in fundraising intelligence. It said integration into the Good Platform will begin in 2027, with selected capabilities running in Raiser’s Edge NXT and Agents for Good products. The announcement sets a future date for the start of integrating the model’s capabilities, without linking it to current-quarter revenue. The company held its earnings call on October 28, 2026, at 8:00 a.m. Eastern Time. The call took place on the day the results were announced.