Blackbaud (NASDAQ:BLKB) released first-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below.
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The full earnings call is available at https://edge.media-server.com/mmc/p/9mdyh7dp/
Summary
Blackbaud reported solid execution and financial performance in Q1 2026, with a focus on efficiency and AI-driven product innovation.
The company achieved a 4.2% organic revenue growth to $281 million and a 20% increase in non-GAAP EPS to $1.14.
Blackbaud launched its first AgentIQ AI offering, indicating a strong future focus on AI capabilities to enhance customer engagement and operational efficiency.
Management reaffirmed its 2026 guidance, highlighting expected double-digit EPS growth driven by organic revenue growth and margin expansion.
The company continues to invest in AI and cybersecurity, aiming to leverage its extensive data and domain expertise for competitive differentiation.
Full Transcript
Tom Barth (Head of Investor Relations)
Good morning everyone. Thank you for joining us on Blackbaud’s first quarter 2026 earnings call. Joining me today on the call is Mike Ginnoni, Blackbaud CEO, President and Vice Chairman, and Chad Anderson, Blackbaud’s Executive Vice President and Chief Financial Officer. Please note that our comments today contain forward looking statements subject to risks and uncertainties that could cause actual results to differ materially from those projected. Please refer to our Most recent form 10K and other SEC filings for more information on those risks. Today’s discussion will focus on non GAAP results. Please refer to our press release and investor materials posted to our website for full details on our financial performance, including GAAP results, full year guidance and long term aspirational goals. We believe that a combination of GAAP and non GAAP measures provides a more representative view of how we measure our business. Unless otherwise specified, we will refer only to non GAAP financial measures on this call. Please note that non GAAP financial measures should not be considered in isolation from or as a substitute for GAAP measures. We’ve also provided a slide presentation with supplemental data and additional highlights and financial metrics. The earnings release supplemental tables and presentation are available in the Investor Relations section of our website on blackbaud.com and with that, let me turn the call over to you Mike.
Chad Anderson (Executive Vice President and Chief Financial Officer)
Thank you, Tom. Good morning, everyone. We appreciate you joining today. We delivered solid execution against our operating plan plan to start 2026 with a continued focus on efficiency and a strong pace of product innovation. AI enablement remains key to our success, both in terms of the capabilities we are delivering to customers and in the way Blackbaud is operating. We continue to invest aggressively in innovation to produce meaningful product enhancements throughout our portfolio, portfolio, including generative and agentic AI capabilities. Our products enable our customers to dramatically improve engagement levels, raise more money and lead their organizations while increasing operational efficiency, ultimately allowing them to spend more time executing on their missions and less time on administrative tasks. No company can better help our customers deliver on their meaningful missions than Blackbaud. Blackbaud brings nearly 45 years of specialized domain expertise serving as a system of record for our customers with deeply embedded workflows purpose built for the social impact sector. Further, we have invested and continue to invest heavily in cybersecurity and AI governance to help ensure that our customers data remains secure and that our AI solutions use data responsibly. Many organizations in our vertical markets have limited IT resources and face turnover and staffing shortages. We win because our solutions are intuitive, require fewer complex customizations and integrations and translate advances like AI into practical outcomes customers can trust, building confidence that is supporting longer contract terms at renewal. As I mentioned last quarter, over 20% of our customers are on four year or longer term contract terms. This quarter we continue to see a nice mix of new customer logo wins and selling additional solutions to our existing customers. Several examples of new logos were competitive displacements across many of our verticals. This includes several private K-12 schools that purchased our Total school solution, a performing arts center who moved to Financial Edge NXT and Advisory plus to unlock potential donors and meet their expansive goals, a well known veterans organization which replaced a fragmented siloed fundraising environment with our end to end solution, allowing a better view of their donors and improving their collaboration across their fundraising team and a UK based nonprofit buying Raiser’s Edge NXT as part of a wider digital transformation project and now can benefit from our AI innovation and solutions. To be clear, we are all in on AI and are confident that AI strengthens our ability to deliver differentiated solutions and drive future growth as well as also improving how we run Blackbaud while in the first quarter our first Agent IQ AI offering, the fundraising Development Agent, launched into general availability ahead of schedule. We’re still early stages of broader commercialization which we view as potential upside over time as we make guidance and investment decisions. Our engineering teams are using leading generative AI tools such as Microsoft, GitHub, Copilot, Anthropic, Claude, and other approved solutions to accelerate development, reduce time to remediate software issues and increased throughput on new product delivery. We’re also expanding generative AI features across our portfolio including blackbaud AI Chat which provides contextual answers and can initiate actions within workflows. Blackbaud AI Chat, is differentiated because it’s embedded within our systems of record, leveraging customer permissioned data, Blackbaud specific data and years of social good benchmarks within a governed environment. Our competitive differentiation is clear. We have a data moat, one of the most robust sets of philanthropic and social impact data processed and secured in real time combined with decades of domain expertise. Native integrations across systems of record engagement, financial accounting and intelligence further strengthen that advantage. These AI capabilities are seeing strong adoption momentum. Usage of AI powered workflows has expanded meaningfully over the past several quarters and more than half of our Raiser’s Edge NXT customers use machine learning enabled donor prospecting, generating nearly 30 billion predictions annually and creating a feedback loop that improves outcomes across our customer base. These capabilities are powered by an extensive and diverse set of data sources including blackbaud Institute survey and benchmarking data, license data sets from leading providers, identity resolution capabilities and specialized philanthropic data sets such as blackbaud Giving Search. Our Applied Intelligence layer aggregates behavioral signals across the ecosystem to feed predictive analytics and advanced AI models. Supported by strong governance, cybersecurity and a focus on data integrity, we have embedded new agentic AI solutions in our products that can operate with appropriate access to customer permissioned data and workflows. Agents for Good is a new product category for Blackbaud and as I mentioned earlier in Q1 we launched our first agent for good solution, the Blackbaud Fundraising Development Agent, which is an agentic virtual team member member that can proactively take on complex tasks, workflows and initiatives while operating within strong governance and oversight by power users. This agent, natively embedded within the trusted blackbaud environment, enables teams to identify and steward donors that they do not have the capacity to reach today, unlocking new revenue streams at a fraction of the cost possible in the past. This fundraising development agent is a new revenue line and a significant accomplishment for blackbaud to frame this a bit. The pricing model is an annual subscription fee similar to the majority of our products. It’s still early, but we expect the price will be in the tens of thousands per year and we expect to cross sell subscriptions to thousands of existing customers in addition to new logo sales. Applicable donations raised by the development agent would be processed through blackbaud integrated payments platform, driving additional transactional revenue. This new development agent is already producing results for our early adopter customers and is now commercially available with several new customers in Q1. Additionally, we have run a number of webinars and sales events for existing customers where attendance was oversubscribed and the reception was enthusiastic. We couldn’t be more pleased and this development agent is the first of many agents …
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