Summary
Blackbaud started fiscal 2025 with a mixed first quarter. Revenue was $270.7 million, down 3.1% from the prior-year quarter, as the sale of EVERFI removed a sizable chunk of the top line. Non-GAAP organic revenue still increased 5.8%. Gross profit was $155.8 million, up 1.8%, and gross margin rose to 57.6%, up 2.8 percentage points. Operating income was $20.4 million, up 90.6%, while operating margin expanded to 7.5%, up 3.7 percentage points. Non-GAAP income from operations was $77.5 million, with a 28.6% non-GAAP operating margin, up 270 basis points. Net income was $4.9 million, down 7.2%, and diluted EPS was $0.10, flat with the prior-year quarter. Non-GAAP net income was $47.3 million, and non-GAAP diluted EPS was $0.96, up $0.03 per share.
Cash flow told a different story. Operating cash flow was $1.4 million, down 97.9% from the prior-year quarter. Capital expenditures were $0.7 million, up 163.6%. Non-GAAP free cash flow was negative $12.3 million, down $63.6 million, and non-GAAP adjusted free cash flow was negative $11.4 million, down $64.7 million. Deferred revenue was $332.2 million, down 9.5% from the prior-year quarter. The MD&A notes deferred revenue typically reaches its lowest point in the first quarter on seasonal billings. Gross dollar retention was approximately 92% for the twelve months ended March 31, 2025. The company repurchased 1,513,022 shares for $100.0 million, leaving $544.5 million under its repurchase program. It plans to buy back 3% to 5% of its December 31, 2024 shares outstanding during 2025. Net leverage was 2.91 to 1.00, with $333.7 million of available borrowing capacity.
The revenue decline came mostly from the divested EVERFI business, while transactional recurring revenue and pricing initiatives provided a partial offset. Operating income benefited from lower compensation, stock-based compensation, Security Incident expenses, amortization, and contractor costs, but acquisition and disposition costs and the revenue decline partly offset those gains. Non-GAAP adjusted EBITDA was $92.8 million, up $3.9 million, with a 34.3% margin, up 250 basis points. Rule of 40 was 40.1%. Recent highlights included disaster relief and wildfire recovery support in Los Angeles, AI integration in YourCause, the launch of Blackbaud Integrated Payments, and Optimized Donation Forms in Canada. The Blackbaud Institute released 2024 Trends in Giving. Security Incident costs and liabilities remain a drag, and management flagged uncertainty around federal grant funding, plus cybersecurity, litigation, revenue mix, interest expense, and vendor payment timing risks.
Management reaffirmed full-year 2025 guidance. The outlook calls for organic revenue growth at constant currency of 4.5% to 5.4%, non-GAAP adjusted EBITDA margin of 34.9% to 35.9%, non-GAAP earnings per share of $4.16 to $4.35, and non-GAAP adjusted free cash flow of $185 million to $195 million. Assumptions include a non-GAAP annualized effective tax rate of approximately 24.5% and fully diluted shares of approximately 48.5 million to 49.5 million. The company also aims to become a Rule of 45 company by 2030, and it reported Rule of 40 of 40.1% for the first quarter.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $270.7M | $302.2M | -10.4% | $279.3M | -3.1% |
| Gross profit | $155.8M | $164.4M | -5.2% | $153.0M | +1.8% |
| Gross margin | 57.6% | 54.4% | +3.2 pp | 54.8% | +2.8 pp |
| Research & development | $33.6M | $39.3M | -14.7% | $42.8M | -21.6% |
| Sales & marketing | $44.6M | $50.1M | -10.9% | $50.9M | -12.2% |
| General & administrative | $56.7M | $35.9M | +58.0% | $47.8M | +18.7% |
| Total operating expenses | $135.4M | $531.5M | -74.5% | $142.3M | -4.9% |
| Operating income (loss) | $20.4M | -$367.1M | +105.6% | $10.7M | +90.6% |
| Operating margin | 7.5% | -121.5% | +129.0 pp | 3.8% | +3.7 pp |
| Net income (loss) | $4.9M | -$330.8M | +101.5% | $5.2M | -7.2% |
| Net margin | 1.8% | -109.4% | +111.2 pp | 1.9% | -0.1 pp |
| Diluted EPS | $0.10 | -$6.54 | +$6.64 | $0.10 | ±$0.00 |
Risks
Operating cash flow decreased 97.9% to $1.39M in FY2025 Q1 from $64.62M in FY2024 Q1. Non-GAAP free cash flow was negative $12.3M, and deferred revenue was $332.24M, down 9.5% from the prior-year quarter.
MD&A notes concerns about federal grant funding in the U.S. and the potential impact on customers, even though Blackbaud says its solutions are not in the funds flow from federal agencies. The company describes a challenging market and uncertainty that could affect customer spending.
GAAP revenue decreased 3.1% to $270.66M in FY2025 Q1 from $279.25M in FY2024 Q1. MD&A attributes the decline largely to a $14.9M decrease in contractual recurring revenue, $22.1M of which related to the sale of EVERFI.
The Security Incident continues to affect results; FY2025 Q1 net pre-tax expenses were $2.2M, including $1.1M ongoing legal fees and $1.1M additional loss contingency accruals. As of March 31, 2025, approximately $1.6M in aggregate liabilities were recorded, and future matters could result in adverse judgments or settlements.
Interest expense increased in FY2025 Q1 due to incremental borrowings for stock repurchases and expiration of favorable interest rate swaps in October 2024. Management expects full year 2025 interest expense of approximately $65M to $69M, and variable-rate debt could increase in a rising rate environment.
At March 31, 2025, debt carrying amount was $1.1B and net leverage ratio was 2.91 to 1.00 under the 2024 Credit Facilities. The company repurchased 1,513,022 shares for $100.0M in FY2025 Q1 and intends to repurchase 3% to 5% of outstanding shares in 2025, which could pressure liquidity.
Gross dollar retention was approximately 92% for the twelve months ended March 31, 2025. The rate increased over the twelve months ended December 31, 2024 primarily due to the sale of EVERFI, so underlying retention excluding that divestiture may be less favorable.
MD&A states the first quarter is historically the seasonal low for bookings and cash flow, with deferred revenue typically lowest at the end of the first quarter. This seasonality can amplify quarterly volatility in revenue and operating cash flow.
General and administrative expense increased 18.7% in FY2025 Q1, driven by $22.9M of acquisition and disposition-related costs primarily related to release from the Washington, DC office lease. Such charges can create earnings volatility.
SaaS KPIs
All quarters →Non-GAAP Adjusted EBITDA Margin
Non-GAAP Operating Margin
Non-GAAP Organic Recurring Revenue Growth
Rule of 40
Non-GAAP Organic Revenue Growth
Non-GAAP Adjusted Free Cash Flow Margin
Non-GAAP Free Cash Flow Margin
GAAP Recurring Revenue
Non-GAAP Gross Margin
Non-GAAP Organic Revenue Growth (constant currency)
Recurring Revenue as % of Total Revenue
Rule of 40 (constant currency)
Summary, forecast, risks and KPIs are extracted from BLACKBAUD INC's SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.