Blackbaud, Inc.

morning thank you for joining us our call will begin in one minute thank you so Good day, and welcome to Blackboard's first quarter 2026 earnings call. Today's conference is being recorded. I'll now turn the conference over to Tom Barth, Head of Investor Relations. Please go ahead, sir.

Good morning, everyone. Thank you for joining us on Blackboard's first quarter 2026 earnings call. Joining me today on the call is Mike Giannone, Blackboard CEO, President, and Vice Chairman of and Chad Anderson, Blackbaud's Executive Vice President and Chief Financial Officer. Please note that our comments today contain forward-looking statements subject to risk and uncertainties that could cause actual results to differ materially from those projected. Please refer to our most recent Form 10-K 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 gap results, full year guidance, and long-term aspirational goals. We believe that a combination of gap and non-gap measures provides a more representative view of how we measure our business. Unless otherwise specified, we will refer only to non-gap 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.

Thank you, Tom. Good morning, everyone. We appreciate you joining today. We delivered solid execution against our operating 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're 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, 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 in 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 remain 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 contract terms. This quarter, we continue to see a nice mix of new customer logo wins and selling additional solutions to our existing customers. Some 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 access their collaboration across their fundraising team, and a UK-based nonprofit buying Razor'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 agentic 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 Cloud, and other approved solutions to accelerate development, reduce time to remediate software issues, and increase throughput on new product delivery. We're also expanding generative AI features across our portfolio, including BlackBot AI Chat, which provides contextual answers and can initiate actions within workflows. BlackBot 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 Razor's Edge NXT customers use machine learning-enabled donor prospecting, generating nearly 30 billion predictions annually, and creating a feedback loop and 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, licensed 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 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 our 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 we plan to introduce across our product portfolio as part of our Agents for Good initiative. To reiterate, We believe this agentic AI solution embedded within our system of record provides a competitive advantage to Blackbaud. Our agents leverage our proprietary and customer-specific data within existing workflows underpinned by strong AI governance and cybersecurity framework. Additionally, we offer our solutions through multi-year subscription model and do not utilize seat-based pricing. Now turning to how we use AI internally. We continue to identify, experiment, and scale solutions across engineering, sales and marketing, customer success, and the back office to improve speed and operational efficiency. For example, we're using AI to write code, better qualify inbound interest, support sales development, and improve customer support workflows, helping teams focus more time on high value interactions. While our record of past performance is compelling, We're just getting started. In addition to improving our operations, go-to-market capabilities, and increased pace of innovation, we have successfully addressed many of the challenges the company faced over the past few years, allowing us to focus on the value creation opportunities ahead in the near, mid, and long term. Last quarter, I walked through our longer term aspirations. As a reminder, from 2026 through 2030, we are targeting double-digit annual EPS growth driven by the following. Organic total revenue growth of 4% to 6% annually with potential upside based on viral events and new product launches such as our Agents for Good catalog. Adjusted EBITDA growth of 6% to 8% annually while expanding our adjusted EBITDA margin to 40% plus. Slide 24 in our investor deck provides more detail on the planned initiatives to drive continued margin expansion, most of which are already underway. We expect this improvement EBITDA to translate to strong free cash flow growth. The $285 million midpoint of our 2026 cash flow guidance range represents a 25% CAGR since 2020. These strong cash flows drive a purposeful capital allocation strategy with consistent stock repurchases as a core tenant. We expect to deploy 50% plus of our cumulative free cash flow generated between 2026 and 2030 towards stock repurchases and continue to reduce our common stock outstanding. This is a continuation of our significant stock repurchase program over the last couple of years, in which we reduced common stock outstanding by approximately 14% since Q4 2023. Based upon the planned growth across revenue, EBITDA, and cash flow, as well as our aggressive repurchase of our shares, our goal is non-GAAP EPS category of 13% plus between 2026 and 2030. We're off to a good start in 2026 in that regard, with expected non-GAAP EPS growth of 17% at the midpoint of our 2026 guide, and we're confident in our ability to deliver double-digit EPS growth in 2027 and beyond. To conclude, we believe BlackBaud is a compelling investment with multiple opportunities for strong shareholder returns, from an operating, financial, and strategic perspective, we are pleased to be carrying momentum into the years ahead. We look forward to our continued journey. I would like to congratulate the entire Blackbaud team for a good start here in 2026. And as always, thank them for the job well done. Thank you. I now like to turn it over to Chad to walk through Q1 results and our guide for the remainder of 2026. Chad?