What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-18 compared with 2025-02-21 · 361 added, 473 removed, 1037 unchanged (45% of the section changed)

4 unchanged sentences

Consolidated Balance Sheets

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of Blackbaud, Inc.

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive loss, cash flows and stockholders’ equity for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income (loss), cash flows and stockholders’ equity for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

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The processing of transactions and recording of revenues for these services involves a significant volume of transactions that are highly automated and are based on contractual terms with the customer and the Company’s third-party vendors.

Auditing the revenues for these payment processing services is complex because the processes are highly automated and involve multiple IT systems with a significant volume of transactions and related underlying data.

Auditing the revenues for these payment processing services is complex because the processes are highly automated and involve multiple information technology ("IT") systems with a significant volume of transactions and related underlying data.

Further, auditing the revenues for these payment processing services required the involvement of data professionals to assist in validating the integrity of the underlying data and recalculating the revenues recorded during the period.

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, and the related consolidated statements of comprehensive loss, cash flows, and stockholders' equity for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 21, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income (loss), cash flows, and stockholders' equity for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 18, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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Operating lease right-of-use assets 4,630 26,554

Software and content development costs, net 148,319 160,194

Software development costs, net 155,842 148,319

Goodwill 1,056,815 1,052,506

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Accumulated other comprehensive loss ( 5,948 ) ( 4,869 )

(Accumulated deficit) retained earnings ( 84,303 ) 198,869

Retained earnings (accumulated deficit) 15,513 ( 99,457 )

Total stockholders’ equity 85,054 126,839

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Blackbaud, Inc.

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Comprehensive Income (Loss)

(dollars in thousands, except per share amounts) Years ended December 31,

2025 2024 2023

Recurring $ 1,129,114 $ 1,071,520 $ 1,011,733

One-time services and other 26,381 33,912 46,372

Total revenue 1,155,495 1,105,432 1,058,105

Revenue $ 1,128,365 $ 1,154,624 $ 1,107,080

Cost of revenue 465,073 523,198 508,025

Cost of recurring 494,588 470,455 463,449

Cost of one-time services and other 21,704 31,733 41,940

Total cost of revenue 516,292 502,188 505,389

Gross profit 663,292 631,426 599,055

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General and administrative 154,610 142,723 189,938

Amortization 3,541 3,139 2,925

Amortization of intangible assets 2,234 3,541 3,139

EVERFI disposition — 405,360 —

Total operating expenses 472,538 902,803 552,702

(Loss) income from operations ( 270,506 ) 44,705 ( 28,485 )

Income (loss) from operations 190,754 ( 271,377 ) 46,353

Interest expense ( 67,970 ) ( 55,634 ) ( 39,922 )

Other income, net 8,999 14,549 12,861

(Loss) income before (benefit) provision for income taxes ( 311,591 ) 17,644 ( 55,575 )

Income tax (benefit) provision ( 28,419 ) 15,824 ( 10,168 )

Net (loss) income $ ( 283,172 ) $ 1,820 $ ( 45,407 )

(Loss) earnings per share

Income (loss) before provision (benefit) for income taxes 131,783 ( 312,462 ) 19,292

Income tax provision (benefit) 16,813 ( 12,938 ) 16,274

Net income (loss) $ 114,970 $ ( 299,524 ) $ 3,018

Earnings (loss) per share

Basic $ 2.41 $ ( 5.92 ) $ 0.06

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Diluted weighted average shares 48,469,961 50,560,538 53,721,342

Other comprehensive (loss) income

Other comprehensive loss

Foreign currency translation adjustment $ 8,867 $ ( 2,822 ) $ 5,049

Unrealized (loss) gain on derivative instruments, net of tax ( 359 ) ( 15,675 ) 18,576

Total other comprehensive (loss) income ( 3,181 ) ( 10,626 ) 2,416

Comprehensive loss $ ( 286,353 ) $ ( 8,806 ) $ ( 42,991 )

Unrealized loss on derivative instruments, net of tax ( 9,946 ) ( 359 ) ( 15,675 )

Total other comprehensive loss ( 1,079 ) ( 3,181 ) ( 10,626 )

Comprehensive income (loss) $ 113,891 $ ( 302,705 ) $ ( 7,608 )

The accompanying notes are an integral part of these consolidated financial statements.

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Cash flows from operating activities

Net (loss) income $ ( 283,172 ) $ 1,820 $ ( 45,407 )

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income (loss) $ 114,970 $ ( 299,524 ) $ 3,018

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 86,215 121,665 109,487

Provision for credit losses and sales returns 4,932 4,500 6,066

Net provision for credit losses and sales returns 4,382 4,932 4,500

Stock-based compensation expense 92,910 104,968 127,762

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Purchase of property and equipment ( 7,767 ) ( 7,443 ) ( 4,685 )

Capitalized software and content development costs ( 59,757 ) ( 59,443 ) ( 58,774 )

Capitalized software development costs ( 54,236 ) ( 59,757 ) ( 59,443 )

Purchase of net assets of acquired companies, net of cash and restricted cash acquired ( 700 ) — ( 13 )

Cash (used) received in disposition of business ( 1,179 ) — 6,426

Cash used in disposition of business ( 12,235 ) ( 1,179 ) —

Other investing activities — ( 5,029 ) ( 250 )

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Debt issuance costs — ( 6,458 ) —

Stock issuance costs — — ( 1,339 )

Employee taxes paid for withheld shares upon equity award settlement ( 40,403 ) ( 56,828 ) ( 35,867 )

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Change in customer funds receivable 997 ( 1,679 ) ( 60 )

Purchase of treasury stock ( 418,034 ) ( 18,831 ) —

Purchase of treasury stock, including excise tax payments ( 217,152 ) ( 418,034 ) ( 18,831 )

Net cash used in financing activities ( 247,399 ) ( 139,351 ) ( 142,965 )

Effect of exchange rate on cash, cash equivalents and restricted cash 6,250 ( 1,955 ) 2,048

Net increase (decrease) in cash, cash equivalents and restricted cash 81,255 ( 5,674 ) 82,169

Net (decrease) increase in cash, cash equivalents and restricted cash ( 50,537 ) 81,255 ( 5,674 )

Cash, cash equivalents and restricted cash, beginning of year 809,512 728,257 733,931

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(loss) income

(Accumulated deficit) retained

earnings Total stockholders' equity

Retained earnings (accumulated deficit) Total stockholders' equity

Shares Amount Shares Amount

Balance at December 31, 2022 67,814,044 $ 68 ( 14,745,230 ) $ ( 537,287 ) $ 1,075,264 $ 8,938 $ 197,049 $ 744,032

Net loss — — — — — — ( 45,407 ) ( 45,407 )

Common stock issued in purchase of EVERFI — — — — ( 1,352 ) — — ( 1,352 )

Net income — — — — — — 3,018 3,018

Retirements of common stock (1)

( 143 ) — — — ( 14 ) — — ( 14 )

Purchase of treasury shares under stock repurchase program — — ( 221,836 ) ( 18,831 ) — — — ( 18,831 )

Vesting of restricted stock units 1,007,921 — — — — — — —

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Restricted stock cancellations ( 106,859 ) — — — — — — —

Other comprehensive income — — — — — 2,416 — 2,416

Other comprehensive loss — — — — — ( 10,626 ) — ( 10,626 )

Balance at December 31, 2023 69,188,304 $ 69 ( 15,562,864 ) $ ( 591,557 ) $ 1,203,012 $ ( 1,688 ) $ 200,067 $ 809,903

Net income — — — — — — 1,820 1,820

Retirements of common stock (1)

( 143 ) — — — ( 14 ) — — ( 14 )

Purchase of treasury shares under stock repurchase program — — ( 221,836 ) ( 18,831 ) — — — ( 18,831 )

Net loss — — — — — — ( 299,524 ) ( 299,524 )

Purchase of treasury shares under stock repurchase program, inclusive of excise tax — — ( 5,362,439 ) ( 411,963 ) ( 9,246 ) — — ( 421,209 )

Vesting of restricted stock units 1,410,169 — — — — — — —

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Balance at December 31, 2024 70,943,373 $ 71 ( 21,697,785 ) $ ( 1,060,348 ) $ 1,291,442 $ ( 4,869 ) $ ( 99,457 ) $ 126,839

Net loss — — — — — — ( 283,172 ) ( 283,172 )

Net income — — — — — — 114,970 114,970

Purchase of treasury shares under stock repurchase program, inclusive of excise tax — — ( 3,337,844 ) ( 215,473 ) — — — ( 215,473 )

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Notes to Consolidated Financial Statements

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.

A remote-first company, we have operations in the United States, Australia, Canada, Costa Rica, India and the United Kingdom, supporting users in 100+ countries.

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.

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.

We have operations in the United States, Australia, Canada, Costa Rica, India and the United Kingdom, supporting users in 100+ countries.

Basis of Presentation

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The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

Reclassifications

Our revenue from "recurring" and "one-time services and other" have been combined within "revenue" beginning in 2025 due to the immateriality of our one-time services and other revenue.

In order to provide comparability between periods presented, our “recurring“ and “one-time services and other" revenue lines have been combined within “revenue" in the previously reported consolidated statements of comprehensive income to conform to the presentation of the current period.

Similarly, "cost of recurring" and "cost of one-time services and other" have been combined within "cost of revenue" in the previously reported consolidated statements of comprehensive income to conform to the presentation of the current period.

Revision of prior period financial statements

As disclosed in our third quarter 2025 Form 10-Q, we revised our prior period financial statements and applicable notes to correct for an error related to the previously recorded valuation allowance that was not material to our previously issued consolidated financial statements for the periods impacted, as well as other unrelated immaterial errors and related notes.

The appropriate revisions to our historical consolidated financial statements and the related notes thereto are reflected herein.

For more information, see Note 2 and Note 13 to our unaudited condensed consolidated financial statements contained in our Quarterly Report on Form 10-Q filed with the SEC on November 3, 2025.

Basis of consolidation

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The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods.

On an ongoing basis, we reconsider and evaluate our estimates and assumptions, including those that impact revenue recognition, long-lived and intangible assets, income taxes, business combinations, stock-based compensation, capitalization of software development costs, our allowances for credit losses and sales returns, costs of obtaining contracts, valuation of derivative instruments, loss contingencies and insurance recoveries, among others.

On an ongoing basis, we reconsider and evaluate our estimates and assumptions, including those that impact revenue recognition, long-lived and intangible assets, income taxes, business combinations, stock-based compensation, software development costs, our allowances for credit losses and sales returns, costs of obtaining contracts, valuation of derivative instruments, loss contingencies and insurance recoveries, among others.

Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could materially differ from these estimates.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Recently adopted accounting pronouncements

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07").

This update requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources.

We adopted ASU 2023-07 on December 31, 2024 and the adoption did not have a material impact on our condensed consolidated financial statements.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (" ASU 2023-09").

This update requires that on a annual basis, entities disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

In addition, the update requires that entities disclose additional information about income taxes paid as well as additional disclosures of pretax income and income tax expense, and remove the requirement to disclose certain items that are no longer considered cost beneficial or relevant.

We adopted ASU 2023-09 on December 31, 2025, using a retrospective approach for all annual periods presented.

Because we adopted the standard retrospectively, certain prior‑period income tax disclosures for 2024 and 2023 have been revised to conform to the new presentation and disaggregation requirements.

These revisions primarily reflect the reclassification of certain reconciling items within the rate reconciliation into the newly prescribed categories and the disaggregation of income taxes paid and income tax expense by jurisdiction.

The adoption did not affect previously reported total income tax expense, net income or shareholders’ equity for any period presented.

Recently issued accounting pronouncements

There are no recently issued accounting pronouncements that are expected to have a material impact on our financial position or results of operations when adopted in the future.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

This update is intended to improve transparency by requiring entities to disclose, in the notes to the financial statements, a disaggregation of certain expense categories that are included within the line items presented on the face of the income statement.

The standard is effective for our annual reporting period beginning in 2027 and for interim reporting periods beginning in 2028, with early adoption permitted.

The standard may be applied either prospectively or retrospectively, with early adoption permitted.

We are currently evaluating the timing and method of adoption and assessing the impact of this ASU on the preparation of our financial statement disclosures.

Summary of significant accounting policies

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Revenue is recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

We determine revenue recognition through the following steps:

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Contractual recurring

Contractual recurring revenue is primarily comprised of fees for the use of our subscription-based software solutions, which includes providing access to cloud solutions, online training programs and subscription-based analytic services.

Contractual recurring revenue is primarily comprised of fees for the use of our subscription-based software solutions, which includes providing access to cloud solutions, including cloud solutions that incorporate AI-enabled functionality, online training programs and subscription-based analytic services.

Contractual recurring revenue also includes fees from maintenance services for our on-premises solutions.

Contractual recurring revenue represents stand-ready performance obligations in which we are making our solutions or services available to our customers continuously over time or the value of the contract renews.

Therefore, contractual recurring revenue is generally recognized over time on a ratable basis over the contract term, beginning on the date that the solution or service is made available to the customer.

Our contractual recurring revenue contracts are generally for a term of three years at contract inception with three -year renewals thereafter, billed annually in advance and non-cancelable.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Transactional recurring

Transactional recurring revenue is comprised of transaction fees associated with the use of our solutions, including donation processing, tuition management, consumer giving and event-based usage.

Transactional recurring revenue is comprised of fees and voluntary donor contributions (to offset processing fees) associated with the use of our solutions, including donation processing, tuition management, consumer giving and event-based usage.

Our payment services are offered with the assistance of third-party vendors.

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Standalone selling prices of our solutions and services are typically estimated based on observable transactions when the solutions or services are sold on a standalone basis.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Costs of obtaining contracts, contract assets and deferred revenue

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To the extent that our customers are billed for our solutions and services in advance of us satisfying the related performance obligations, we record such amounts in deferred revenue.

We present sales taxes and other taxes collected from customers and remitted to governmental authorities on a net basis and, as such, exclude them from revenues.

We present sales, use, value-added, and similar taxes that are imposed on and collected from customers and remitted to governmental authorities on the customers' behalf on a net basis, and, as such, exclude them from revenues.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Fair value measurements

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See Note 10 to these consolidated financial statements for further discussion of our derivative instruments.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Cash and cash equivalents

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As of and for the years ended December 31, 2025, 2024 and 2023, there were no significant concentrations with respect to our consolidated revenues or accounts receivable.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Property and equipment

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Goodwill as of the acquisition date represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets acquired and liabilities assumed.

We apply significant judgement in estimating the fair value of intangible assets acquired, which involves the use of significant assumptions.

We apply significant judgment in estimating the fair value of intangible assets acquired, which involves the use of significant assumptions.

Significant assumptions used in the valuation of customer relationships include future revenue and operating expenses, customer attrition rates, contributory asset charges, tax amortization benefit, and discount rates.

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Goodwill is not amortized, but tested annually for impairment on the first day of our fourth quarter, or more frequently if indicators of potential impairment arise.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis to determine whether it is necessary to perform the quantitative impairment test.

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Based on our current internal reporting structure, we have one operating segment, one reportable segment, and one reporting unit.

In each of 2024, 2023 and 2022, we performed the quantitative impairment test, which indicated that the estimated fair values of the identified reporting units significantly exceeded their respective carrying values.

In each of 2025, 2024 and 2023, we performed the impairment assessment, which indicated that the estimated fair values of the identified reporting units significantly exceeded their respective carrying values.

There were no impairments of goodwill during 2025, 2024 and 2023.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Intangible assets other than goodwill

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Basis of amortization Amortization

Customer relationships Straight-line and Curve of Economic Benefit (1)

Marketing assets Straight-line and Curve of Economic Benefit (1)

Developed technology Straight-line and Curve of Economic Benefit (1)

Customer relationships

Curve of Economic Benefit (1)

Marketing assets

Curve of Economic Benefit (1)

Developed technology

Straight-line and Curve of Economic Benefit (1)

(1) Certain of the customer relationships, marketing assets and developed technology assets are amortized on a curve that represents the expected period of economic benefit.

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If the carrying amount of a finite-lived intangible asset is no longer recoverable based upon the undiscounted cash flows of the asset, the amount of impairment is the difference between the carrying amount and the fair value of the asset.

All of our intangible assets were acquired in business combinations.

See Note 6 to these consolidated financial statements for a discussion of our impairment of certain intangible assets during 2024 and 2022.

There were no impairments of acquired intangible assets during 2023.

Substantially all of our intangible assets were acquired in business combinations.

See Note 6 to these consolidated financial statements for a discussion of our impairment of certain intangible assets during 2024.

There were no impairments of acquired intangible assets during 2025 and 2023.

Impairment of long-lived assets

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If such events or changes in circumstances are present, the undiscounted cash flow method is used to determine whether the asset or asset group is impaired.

There were no impairments of long-lived assets during 2025.

See Note 6 to these consolidated financial statements for a discussion of our impairment of certain long-lived assets during 2024 and 2023.

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These costs are amortized ratably over the term of the credit facility as interest expense.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Other debt issuance costs, as well as the debt discount associated with the 2024 Credit Facilities (as defined below) and portions of the unamortized balances from prior facilities, are recorded as a direct deduction from debt.

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Income tax benefits resulting from the vesting and exercise of stock-based compensation awards are recognized in the period the unit or award is vested or option or right is exercised.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

We make estimates and judgments in accounting for income taxes.

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To recognize such positions, we must first determine if it is more likely than not that the position will be sustained upon audit.

We must then measure the benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

These positions include interest and/or penalties.

We may release or increase unrecognized tax benefits as audits progress, as statutes of limitations expire, or as other facts or laws may change impacting these positions.

It is reasonably possible that the amount of unrecognized tax benefits could change within the next twelve months due to audit activity or changes in tax law.

Significant judgment is required in the identification and measurement of uncertain tax positions.

Foreign currency translation and remeasurement differences may affect our deferred tax balances and income tax expense, and in accordance with ASC 740 we do not recognize deferred taxes for temporary differences arising solely from exchange‑rate changes.

Foreign currency

Net assets recorded in a foreign currency are translated at the exchange rate on the balance sheet date.

Revenue and expense items are translated using an average of monthly exchange rates.

Revenue and expense items are translated using an average of daily exchange rates.

The resulting translation adjustments are recorded in accumulated other comprehensive income.

Gains and losses resulting from foreign currency transactions denominated in currency other than the functional currency are recorded at the approximate rate of exchange at the transaction date in other income, net.

For the years ended December 31, 2024 and 2022, we recorded net foreign currency gains that were insignificant and $ 4.6 million, respectively.

During the year ended December 31, 2023, we recorded a net foreign currency loss that was insignificant.

For the years ended December 31, 2025 and 2023, we recorded net foreign currency losses that were $ 2.8 million and insignificant, respectively.

During the year ended December 31, 2024, we recorded a net foreign currency gain that was insignificant.

Research and development

Research and development costs are expensed as incurred except as noted below under Software and content development costs .

These costs include compensation costs for engineering and product management personnel, third-party contractor expenses, software development tools and other expenses related to researching and developing new solutions or upgrading and enhancing existing solutions that do not qualify for capitalization, and allocated depreciation, facilities and IT support costs.

Software and content development costs

We incur certain costs associated with the development of internal-use software and content, which are primarily related to activities performed to develop our cloud solutions and the development of online education curriculum to be delivered on

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

the Company's cloud platform.

Internal and external costs incurred in the preliminary project stage of internal-use software development and content are expensed as incurred.

Research and development costs are expensed as incurred except as noted below under Software development costs .

Software development costs

We incur certain costs associated with the development of internal-use software, which are primarily related to activities performed to develop our cloud solutions and the development of online education curriculum to be delivered on the Company's cloud platform.

Internal and external costs incurred in the preliminary project stage of internal-use software development are expensed as incurred.

Once the software or content being developed has reached the application development stage, qualifying internal costs including payroll and payroll-related costs of employees who are directly associated with and devote time to the software or content project as well as external direct costs of materials and services are capitalized.

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Qualifying costs capitalized during the application development stage include those related to specific upgrades and enhancements when it is probable that those costs incurred will result in additional functionality.

Overhead costs, including general and administrative costs, as well as maintenance, training and all other costs associated with post-implementation stage activities are expensed as incurred.

Overhead costs, including general and administrative costs, as well as

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

maintenance, training and all other costs associated with post-implementation stage activities are expensed as incurred.

In addition, internal costs that cannot be reasonably separated between maintenance and relatively minor upgrades and enhancements are expensed as incurred.

In certain circumstances, content development costs are considered deferred costs, when ownership of developed content belongs to the customer.

Qualifying capitalized software and content development costs are amortized on a straight-line basis over the software asset's estimated useful life, which is generally three to seven years .

Qualifying capitalized software development costs are amortized on a straight-line basis over the software asset's estimated useful life, which is generally three to seven years .

We evaluate the useful lives of these assets on an annual basis and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

See Note 6 to these consolidated financial statements for a discussion of our impairment of certain capitalized software and content development costs during 2024 and 2022.

There were no impairments of capitalized software assets during 2023.

We write off the gross carrying amount and accumulated amortization balances for all fully amortized capitalized software and content development cost assets.

See Note 6 to these consolidated financial statements for a discussion of our impairment of certain capitalized software development costs during 2024.

There were no impairments of capitalized software assets during 2025 and 2023.

We write off the gross carrying amount and accumulated amortization balances for all fully amortized capitalized software development cost assets.

Allowance for credit losses

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In judging the adequacy of the allowance for credit losses, we consider multiple factors including historical bad debt experience, the current aging of our receivables and current economic conditions that may affect our customers' ability to pay.

A considerable amount of judgment is required in assessing these factors and if any receivables were to deteriorate, an additional provision for credit losses could be required.

Judgment is required in assessing these factors and if any receivables were to deteriorate, an additional provision for credit losses could be required.

Accounts are written off after all means of collection are exhausted and recovery is considered remote.

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beginning of year Provision/

adjustment Write-off Recovery Balance at

$ 6,096 $ 3,010 $ ( 4,833 ) $ 215 $ 4,488

6,022 2,012 ( 2,539 ) 601 6,096

9,375 1,281 ( 5,162 ) 528 6,022

adjustment Write-offs charged against allowance Recoveries

collected Balance at

Allowance for sales returns

We maintain a reserve for returns and credits which is estimated based on several factors including historical experience, known credits yet to be issued, the aging of customer accounts and the nature of service level commitments.

A considerable amount of judgment is required in assessing these factors.

Judgment is required in assessing these factors.

Provisions for sales returns and credits are charged against the related revenue items.

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(in thousands) Balance at

beginning of year Provision/

adjustment Deduction Balance at

$ 811 $ 2,966 $ ( 3,037 ) $ 740

1,296 2,488 ( 2,973 ) 811

1,780 4,785 ( 5,269 ) 1,296

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

beginning of year Provision Utilization

of allowance Balance at

The allowance presented on the consolidated balance sheets represents the combined allowance for credit losses and the allowance for sales returns.

The net provision for credit losses and sales returns presented in operating activities on our consolidated statement of cash flows reflects the net non‑cash impact of current‑period expense and contra‑revenue adjustments, while utilization of prior‑period estimates is reflected in changes in operating assets and liabilities.

Advertising costs

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The liability for costs associated with exit or disposal activities is measured initially at fair value and only recognized when the liability is incurred.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

We determine if an arrangement is a lease at inception.

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Although we believe we have substantial defenses in these matters, we could incur judgments or enter into settlements of claims that could have a material adverse effect on our consolidated financial position, results of operations or cash flows in any particular period.

(Loss) earnings per share

We compute basic (loss) earnings per share by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares outstanding during the period.

Earnings (loss) per share

We compute basic earnings (loss) per share by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period.

Diluted earnings per share is computed by dividing net income attributable to common stockholders by the weighted average number of common shares and dilutive potential common shares outstanding during the period.

11 unchanged sentences

This loss on disposition together with EVERFI impairment charges are recorded within EVERFI disposition on our consolidated statements of comprehensive loss for the year ended December 31, 2024.

See Note 4 to these consolidated financial statements for additional information about the EVERFI impairment charges.

EVERFI Limited

3 unchanged sentences

As a result of the disposition, we recorded a $ 1.6 million loss, which was recorded in general and administrative expense on our consolidated statements of comprehensive loss for the year ended December 31, 2024.

2022 disposition

Blackbaud FIMS™ and DonorCentral® NXT

On September 9, 2022, we sold our Foundation Information Management System ("FIMS") and DonorCentral NXT solutions to Fusion Laboratories, LLC for cash proceeds of approximately $ 6.4 million, net of closing adjustments.

During the year ended December 31, 2022, we recognized a noncash impairment charge of $ 2.0 million against certain insignificant FIMS customer relationship intangible assets that were then held for sale.

The impairment charge was recorded in general and administrative expense on our consolidated statements of comprehensive loss.

2022 acquisition

On August 19, 2022, we acquired all of the outstanding stock of Kilter, Inc., a Delaware corporation, pursuant to an agreement and plan of merger, for approximately $ 2.9 million in cash, net of closing adjustments.

In addition to the consideration paid at closing, the agreement and plan of merger included cash consideration payable, up to a maximum of $ 3.0 million, if during the two-year period commencing January 1, 2023 Kilter met certain application participation targets.

These targets were not met and, therefore, no liability is recorded as of December 31, 2024.

Fair values were also assigned to the other assets acquired and liabilities assumed, primarily consisting of goodwill and a finite-lived developed technology intangible asset, which will be amortized over an estimated useful life of three years.

We finalized the purchase price allocation of Kilter, including the valuation of assets acquired and liabilities assumed, during the third quarter of 2023.

Insignificant acquisition-related costs, which primarily consisted of legal services, were recorded as general and administrative expense during the year ended December 31, 2023.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Goodwill and Other Intangible Assets

11 unchanged sentences

Developed technology

Content — 17,900

Total finite-lived gross carrying amount

3 unchanged sentences

Developed technology

Content — ( 3,978 )

Total accumulated amortization

Intangible assets, net

During the year ended December 31, 2024, changes to the gross carrying amounts of intangible asset classes were primarily related to the EVERFI impairment charges and subsequent disposition discussed below, write-offs of fully amortized intangible assets and the effect of foreign currency translation.

EVERFI impairment charges

In July 2024, we hired a strategic advisor to assist us in considering a range of alternatives for EVERFI, one of which included a potential divestiture of the business.

As part of evaluating alternatives for EVERFI, during the fourth quarter of 2024, we prepared a revised business forecast that included a new level of detail, including separately identifiable cash flows for EVERFI.

The Company then reassessed its asset groupings under ASC 360-10 and determined there was a new asset group for EVERFI and evaluated this asset group for potential impairment.

On December 9, 2024, the Company concluded that a material impairment charge was required related to its EVERFI asset group, which primarily included finite-lived intangible assets and capitalized software and content development costs.

On December 29, 2024, we classified EVERFI's assets and liabilities as held for sale and we determined there would be an additional impairment charge to record the EVERFI disposal group at its estimated fair value less costs to sell resulting in total noncash impairment charges of $ 390.2 million.

On December 31, 2024, we disposed of EVERFI for a nominal amount that resulted in a loss on disposition of $ 15.2 million, which together with the impairment charges, is recorded within EVERFI disposition on our consolidated statements of

During the year ended December 31, 2025, changes to the gross carrying amounts of intangible asset classes were primarily related to write-offs of fully amortized intangible assets and the effect of foreign currency translation.

2025 Form 10-K

1 unchanged sentence

Notes to Consolidated Financial Statements

comprehensive loss.

EVERFI impairment charges

As previously disclosed, on December 9, 2024, we concluded that a material impairment charge was required related to its EVERFI asset group, which primarily included finite-lived intangible assets and capitalized software development costs.

See Note 3 to these consolidated financial statements for additional information about the disposition of EVERFI.

5 unchanged sentences

Included in cost of revenue

Cost of recurring $ 55,659 $ 51,079 $ 47,085

Cost of one-time services and other 1,298 1,384 1,407

Total included in cost of revenue 56,957 52,463 48,492

Included in operating expenses

3 unchanged sentences

(dollars in thousands) Amortization

Total $ 103,332

2025 Form 10-K

1 unchanged sentence

Notes to Consolidated Financial Statements

(Loss) Earnings Per Share

The following table sets forth the computation of basic and diluted (loss) earnings per share:

Earnings (Loss) Per Share

The following table sets forth the computation of basic and diluted earnings (loss) per share:

Years ended December 31,

(dollars in thousands, except per share amounts) 2025 2024 2023

Net (loss) income $ ( 283,172 ) $ 1,820 $ ( 45,407 )

Net income (loss)

Weighted average common shares

2 unchanged sentences

Weighted average common shares assuming dilution

(Loss) earnings per share

Basic $ ( 5.60 ) $ 0.03 $ ( 0.88 )

Diluted $ ( 5.60 ) $ 0.03 $ ( 0.88 )

Anti-dilutive shares excluded from calculations of diluted (loss) earnings per share 54,236 45,614 1,046,307

Diluted loss per share for the years ended December 31, 2024 and 2022 was the same as basic loss per share as there were net losses in each period and inclusion of potentially dilutive securities was anti-dilutive.

Earnings (loss) per share

Anti-dilutive shares excluded from calculations of diluted earnings (loss) per share

Diluted loss per share for the year ended December 31, 2024 was the same as basic loss per share as there was a net loss in the period and inclusion of potentially dilutive securities was anti-dilutive.

2025 Form 10-K

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Fair value as of December 31, 2025

Financial assets:

Interest rate swaps $ — $ 16,198 $ — $ 16,198

Total financial assets $ — $ 16,198 $ — $ 16,198

Fair value as of December 31, 2023

Financial liabilities:

1 unchanged sentence

Foreign currency forward contracts

Contingent consideration obligations — — 1,403 1,403

Total financial liabilities

Fair value as of December 31, 2024

Financial assets:

Interest rate swaps

Foreign currency forward contracts

Total financial assets

Our derivative instruments within the scope of Accounting Standards Codification ("ASC") 815, Derivatives and Hedging , are required to be recorded at fair value.

3 unchanged sentences

Accordingly, our interest rate swaps and foreign currency forward contracts are classified within Level 2 of the fair value hierarchy.

Contingent consideration obligations arise from business acquisitions.

The fair values are based on discounted cash flow analyses reflecting a probability-weighted assessment approach derived from the likelihood of possible achievement of specified performance measures or events and captures the contractual nature of the contingencies, commercial risk, and the time value of money.

As the fair value measurements for our contingent consideration obligations contain significant unobservable inputs, they are classified within Level 3 of the fair value hierarchy.

See Note 3 to these consolidated financial statements for additional information about our contingent consideration obligations.

We believe the carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, accrued expenses and other current liabilities and due to customers approximate their fair values at December 31, 2025 and December 31, 2024, due to the immediate or short-term maturity of these instruments.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

We believe the carrying amount of our debt approximates its fair value at December 31, 2025 and December 31, 2024, as the debt bears interest rates that approximate market value.

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We did not transfer any assets or liabilities among the levels within the fair value hierarchy during the years ended December 31, 2025, 2024 and 2023.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Non-recurring fair value measurements

2 unchanged sentences

These non-recurring fair value measurements, primarily for long-lived assets, intangible assets acquired and operating lease ROU assets, are based on Level 3 unobservable inputs.

In the event of an impairment, we determine the fair value of these assets other than goodwill using a discounted cash flow approach, which contains significant unobservable inputs and, therefore, is considered a Level 3 fair value measurement.

For long-lived assets, intangible assets and operating lease ROU assets, in the event of an impairment, we determine the fair value of these assets other than goodwill using a discounted cash flow approach, which contains significant unobservable inputs and, therefore, is considered a Level 3 fair value measurement.

The unobservable inputs in the analysis generally include future cash flow projections and a discount rate.

For goodwill impairment testing, we estimate fair value using market-based methods including the use of market capitalization and consideration of a control premium.

During the year ended December 31, 2024, we recorded noncash impairment charges of $ 367.5 million against certain intangible assets, noncash impairment charges of $ 22.6 million against certain previously capitalized software and content development costs, noncash impairment charges of $ 3.1 million against certain operating lease ROU assets and noncash impairment charges against certain property and equipment assets which were insignificant.

There were no significant non-recurring fair value adjustments during 2025.

During the year ended December 31, 2024, we recorded noncash impairment charges of $ 367.5 million against certain intangible assets, noncash impairment charges of $ 22.6 million against certain previously capitalized software development costs, noncash impairment charges of $ 3.1 million against certain operating lease ROU assets and noncash impairment charges against certain property and equipment assets, which were insignificant.

See Notes 4, 7, and 11, respectively, to these consolidated financial statements for additional details.

1 unchanged sentence

See Notes 11 and 7, respectively, to these consolidated financial statements for additional details.

During the year ended December 31, 2022, we recorded noncash impairment charges of $ 2.3 million against certain previously capitalized software development costs, $ 2.0 million against certain insignificant customer relationship intangible assets that were held for sale, $ 1.0 million against certain operating lease ROU assets and insignificant impairment charges against certain property and equipment assets.

See Notes 11 and 7, respectively, to these consolidated financial statements for additional details.

There were no other non-recurring fair value adjustments during 2024, 2023 and 2022 except for certain business combination accounting adjustments to the initial fair value estimates of the assets acquired and liabilities assumed at the acquisition date from updated estimates and assumptions during the measurement period.

See Note 3 to these consolidated financial statements for additional details.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Property and Equipment and Software and Content Development Costs

Other than the items described above, there were no other non-recurring fair value adjustments during 2024 or 2023, except for certain immaterial business combination accounting adjustments to the initial fair value estimates of the assets acquired and liabilities assumed at the acquisition date from updated estimates and assumptions during the measurement period.

Property and Equipment and Software Development Costs

Property and equipment

2 unchanged sentences

(dollars in thousands) 2025 2024

Land — $ 9,548 $ 9,548

Building 39 61,284 61,284

Building improvements

12,112 11,720

Equipment 1 - 5

Computer hardware

36,632 50,064

Computer software

20,455 21,982

Construction in progress

Furniture and fixtures

Leasehold improvements Lesser of lease term or estimated useful life 10,206 10,345

Leasehold improvements

Lesser of lease term or estimated useful life

Total property and equipment

2 unchanged sentences

Depreciation expense was $ 10.1 million, $ 12.8 million and $ 13.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.

During the years ended December 31, 2024 and 2022, we recorded insignificant noncash impairment charges against certain property and equipment assets.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

During the year ended December 31, 2024, we recorded insignificant noncash impairment charges against certain property and equipment assets.

During the year ended December 31, 2023, we recorded noncash impairment charges of $ 1.1 million against certain property and equipment assets.

Each of th ese impairment charges resulted from our entry into subleases for different portions of our Washington, DC office location, which we closed in February 2023 to align with our remote-first workforce strategy.

These charges are included in general and administrative expense on our consolidated statements of comprehensive loss.

Software and content development costs

Software and content development costs consisted of the following as of:

These charges are included in general and administrative expense on our consolidated statements of comprehensive income (loss).

Software development costs

Software development costs consisted of the following as of:

(years) December 31,

1 unchanged sentence

Software development costs

$ 268,510 $ 287,519

Content development costs

accumulated amortization

Software and content development costs, net

$ 148,319 $ 160,194

During the year ended December 31, 2024, we recorded noncash impairment charges of $ 22.6 million against certain previously capitalized software and content development costs.

Software development costs, net

During the year ended December 31, 2024, we recorded noncash impairment charges of $ 22.6 million against certain previously capitalized software development costs.

The impairment charges are includ ed in EVERFI impairment charges within EVERFI disposition on our consolidated statements of comprehensive loss.

For additional information, see the discussion of the EVERFI impairment charges in Note 4 to these consolidated financial statements .

Other changes to the gross carrying amount of software development costs were primarily related to qualifying costs associated with development activities that are required to be capitalized under the internal-use software accounting guidance such as those for our cloud solutions, write-offs of fully amortized assets, and the effect of foreign currency translation.

Amortization expense related to software development costs was $ 46.3 million, $ 48.3 million and $ 42.8 million for the years ended December 31, 2025, 2024 and 2023, respectively, and is included primarily in cost of revenue.

2025 Form 10-K

1 unchanged sentence

Notes to Consolidated Financial Statements

During the year ended December 31, 2022, we recorded noncash impairment charges of $ 2.3 million against certain previously capitalized software development costs that reduced the carrying value of those assets to zero.

The impairment charges were reflected in general and administrative expense on the statements of comprehensive loss.

These impairment charges resulted primarily from our decision to accelerate the end of customer support for certain solutions.

Other changes to the gross carrying amount of software and content development costs were primarily related to qualifying costs associated with development activities that are required to be capitalized under the internal-use software accounting guidance such as those for our cloud solutions and online education curriculum, write-offs of fully amortized assets, and the effect of foreign currency translation.

Amortization expense related to software and content development costs was $ 48.3 million, $ 42.8 million and $ 36.8 million for the years ended December 31, 2024, 2023 and 2022, respectively, and is included primarily in cost of recurring.

Consolidated Financial Statement Details

9 unchanged sentences

Costs of obtaining contracts (1)(2)

$ 57,911 $ 62,377

Prepaid software maintenance and subscriptions (3)

36,277 35,169

Derivative instruments 10,550 16,198

Taxes, prepaid and receivable

Implementation costs for cloud computing arrangements, net (4)(5)

1 unchanged sentence

Investment in equity securities (6)

Taxes, prepaid and receivable 4,257 3,418

Prepaid insurance

Other assets 14,026 14,346

Derivative instruments

Total prepaid expenses and other assets

4 unchanged sentences

(3) The current portion of prepaid software maintenance and subscriptions as of December 31, 2025 and December 31, 2024 was $ 30.4 million and $ 34.0 million, respectively.

(4) These costs primarily relate to the multi-year implementations of our global enterprise resource planning and customer relationship management systems.

(4) These costs primarily relate to the implementations of our global enterprise resource planning system, customer relationship management systems and other cloud-based systems.

(5) Amortization expense from capitalized cloud computing implementation costs was $ 3.4 million, $ 2.9 million and $ 2.5 million for the years ended December 31, 2025, 2024 and 2023, respectively.

8 unchanged sentences

Taxes payable

Accrued costs to sell EVERFI (1)

Customer credit balances

Stock-based compensation liability (2)

Operating lease liabilities, current portion 4,489 6,701

Unrecognized tax benefit 4,285 2,954

Accrued commissions and salaries

Accrued transaction-based costs related to payments services 3,903 4,323

Derivative instruments

Accrued health care costs

Accrued legal costs (3)

Unrecognized tax benefit

Accrued transaction-based costs related to payments services

Accrued vacation costs

Derivative instruments — 5,540

Contingent consideration liability

Operating lease liabilities, current portion

Accrued legal costs (1)

Stock-based compensation liability

Accrued costs to sell EVERFI (2)

Other liabilities

2 unchanged sentences

Accrued expenses and other current liabilities

(1) See Note 3 for a discussion of our sale of EVERFI on December 31, 2024.

(2) This stock-based compensation liability will be settled during 2025 using shares of the Company’s common stock.

(1) All accrued legal costs are classified as current.

See Note 11 to these consolidated financial statements for additional information about our loss contingency accruals and other legal expenses.

(2) See Note 3 for a discussion of our sale of EVERFI on December 31, 2024.

Other income, net

2 unchanged sentences

Interest income

Currency revaluation gains (losses) 487 ( 36 ) 4,635

Currency revaluation (losses) gains

Other income, net

12 unchanged sentences

Revolving credit loans

Term loans 790,000 607,500 5.59 % 3.51 %

Real estate loans

Other debt 2,783 2,800 8.77 % 8.42 %

Total debt 1,077,818 781,145 5.75 % 4.24 %

Unamortized discount and debt issuance costs

2 unchanged sentences

2024 refinancing

On April 30, 2024, we entered into the Third Amendment to Credit Agreement (the "Amendment"), by and among us, the lenders party thereto and Bank of America N.A., as administrative agent (the "Agent").

The Amendment amends the Amended and Restated Credit Agreement, dated as of October 30, 2020 (as previously amended, the "2020 Credit Agreement" and the 2020 Credit Agreement as amended by the Amendment, the “2024 Credit Agreement”), by and among us, the lenders from time-to-time party thereto and the Agent.

The Amendment amends the 2020 Credit Agreement to, among other things, (a) refinance the existing $ 1.1 billion credit facilities under the 2020 Credit Agreement to provide for new credit facilities in the aggregate principal amount of $ 1.5 billion consisting of (i) a $ 700.0 million revolving credit facility (the “2024 Revolving Facility”) and (ii) a $ 800.0 million term loan facility (the “2024 Term Facility” and together with the 2024 Revolving Facility, the “2024 Credit Facilities”), (b) extend the maturity date to April 30, 2029, (c) modify the definition of Applicable Margin (as defined below) and (iv) modify certain negative and financial covenants to provide additional operational flexibility.

Upon closing, we borrowed $ 800.0 million pursuant to the 2024 Term Facility and $ 208.2 million pursuant to the 2024 Revolving Facility and used the proceeds to repay the outstanding principal balances of the term loans under the 2020 Credit Agreement (the "2020 Term Facilities"), and repay $ 196.6 million of outstanding revolving credit loans under the 2020 Credit Agreement (the "2020 Revolving Facility").

Certain lenders of the 2024 Term Facility participated in the 2020 Term Facilities and the change in present value of our future cash flows to these lenders under the 2020 Term Facilities and under the 2024 Term Facility was less than 10%.

Accordingly, we accounted for the refinancing event for these lenders as a debt modification.

Certain lenders of the 2020 Term Facilities did not participate in the 2024 Term Facility.

Accordingly, we accounted for the refinancing event for these lenders as a debt extinguishment.

Certain lenders of the 2020 Revolving Facility participated in the 2024 Revolving Facility and provided increased borrowing capacities.

Accordingly, we accounted for the refinancing event for these lenders as a debt modification.

Certain lenders of the 2020 Revolving Facility did not participate in the 2024 Revolving Facility.

Accordingly, we accounted for the refinancing event for these lenders as a debt extinguishment.

We recorded an insignificant loss on debt extinguishment related to the write-off of debt discount and deferred financing costs for the portions of the 2020 Credit Agreement considered to be extinguished.

This loss was recognized in the consolidated statements of comprehensive loss within other income, net.

In connection with our entry into the 2024 Credit Agreement, we paid $ 6.5 million in financing costs, of which $ 1.6 million were capitalized in other assets and, together with a portion of the unamortized deferred financing costs from the 2020 Credit Agreement and prior agreements, are being amortized into interest expense over the term of the new facility.

As of December 31, 2024, deferred financing costs totaling $ 1.7 million were included in other assets on our consolidated balance sheets.

We recorded aggregate financing costs of $ 3.6 million as a direct deduction from the carrying amount of our debt liability, which related to debt discount (fees paid to lenders) and debt issuance costs for the 2024 Term Facility.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

In April 2024, we entered into a 5-year $ 1.5 billion Amended and Restated Credit Agreement (the "2024 Credit Agreement").

The 2024 Credit Agreement matures in April 30, 2029 and replaced our 5-year $ 1.1 billion credit facility entered into during October 2020 (the "2020 Credit Agreement") by amending and restating it to include a $ 700.0 million revolving credit facility (the “2024 Revolving Facility”) and an $ 800.0 million term loan facility (the “2024 Term Facility” and together with the 2024 Revolving Facility, the “2024 Credit Facilities”).

Upon closing, we borrowed $ 800.0 million pursuant to the 2024 Term Facility and $ 208.2 million pursuant to the 2024 Revolving Facility and used the proceeds to repay the outstanding principal balances of the term loans under the 2020 Credit Agreement, and repay $ 196.6 million of outstanding revolving credit loans under the 2020 Credit Agreement.

Summary of the 2024 Credit Facilities

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We may prepay the 2024 Credit Agreement in whole or in part at any time without premium or penalty, other than customary breakage costs with respect to certain types of loans.

Under the terms of the 2024 Credit Agreement, we are entitled on one or more occasion, subject to the satisfaction of certain conditions, to request an increase in the commitments under the 2024 Revolving Facility and/or request additional incremental term loans in the aggregate principal amount of up to the sum of (i) the greater of (A) $ 360.0 million and (B) 100 % of EBITDA (as defined in the 2024 Credit Agreement), plus (ii) at our option, up to an amount such that the net leverage ratio shall be no greater than 3.50 to 1.00.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

ratio shall be no greater than 3.50 to 1.00.

At December 31, 2025, our available borrowing capacity under the 2024 Credit Agreement was $ 413.6 million.

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At December 31, 2025, we were in compliance with our debt covenants under the 2024 Credit Facilities.

Financing costs

As of December 31, 2025 and 2024, deferred financing costs totaling $ 1.3 million and $1.7 million, respectively, were included in other assets on our consolidated balance sheets.

Real estate loans

7 unchanged sentences

Our assumption of these loans are noncash financing transactions and are reflected in our supplemental disclosure of cash flow information.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

The following table summarizes our currently effective financing agreements as of December 31, 2025:

4 unchanged sentences

Effective dates of agreements (1) :

December 2022 39 3 January 2023 $ 1,710

January 2023 36 3 April 2023 2,491

April 2024 36 3 May 2024 2,073

December 2022

(1) Represent noncash investing and financing transactions during the periods indicated as we purchased software and services by assuming directly related liabilities.

The changes in supplier financing obligations during the years ended December 31, 2024, consisted of the following:

The changes in supplier financing obligations during the year ended December 31, 2025, consisted of the following:

(dollars in thousands) Total

1 unchanged sentence

Balance at December 31, 2025

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2025, the required annual maturities related to the 2024 Credit Facilities, the Real Estate Loans and our other debt were as follows:

1 unchanged sentence

(dollars in thousands) Annual

2025 $ 23,875

Thereafter 44,246

Total required maturities

10 unchanged sentences

Our entry into the 2024 Credit Agreement in April 2024 did not affect our interest rate swap agreements, including their designation as cash flow hedges, as the 2024 Credit Agreement has substantially the same critical terms as the 2020 Credit Agreement.

As of December 31, 2024 and December 31, 2023, the aggregate notional values of the interest rate swaps were $ 700.0 million and $ 935.0 million, respectively.

As of December 31, 2025 and December 31, 2024, the aggregate notional values of the interest rate swaps were $ 700.0 million.

All of the contracts have maturities on or before October 2028.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

We have entered into foreign currency forward contracts to hedge revenues denominated in the Canadian Dollar ("CAD") against changes in the exchange rate with the United States Dollar ("USD").

7 unchanged sentences

dollar value of a portion of our GBP-denominated investments was £ 12.0 million and £ 12.9 million, respectively.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

The fair values of our derivative instruments were as follows as of:

5 unchanged sentences

Derivative instruments designated as hedging instruments:

Interest rate swaps, current portion Prepaid expenses

and other current assets $ — $ 16,198 Accrued expenses

Interest rate swaps, current portion

Prepaid expenses

and other current assets

Accrued expenses

and other current liabilities

1 unchanged sentence

Prepaid expenses

and other current assets 1,288 — Accrued expenses

and other current assets

Accrued expenses

and other current liabilities

Interest rate swaps, long-term

Other assets 9,262 — Other liabilities — 5,004

Other liabilities

Total derivative instruments designated as hedging instruments

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

The effects of derivative instruments in cash flow and net investment hedging relationships were as follows:

Gain recognized

(Loss) gain recognized

in accumulated other

comprehensive

of (loss) gain

reclassified from

1 unchanged sentence

comprehensive

(loss) income

income (loss)

Gain reclassified from

1 unchanged sentence

comprehensive loss

into (loss) income

into income (loss)

(dollars in thousands) December 31,

2024 Year ended

2025 Years ended

December 31, 2025

Cash Flow Hedges

Interest rate swaps $ 9,262 Interest expense $ 19,134

Foreign currency forward contracts $ 937 Revenue $ 479

Interest rate swaps

Interest expense

Foreign currency forward contracts

Net Investment Hedge

Foreign currency forward contracts

2023 Year ended

2024 Years ended

December 31, 2024

Cash Flow Hedges

Interest rate swaps $ 11,194 Interest expense $ 20,418

Foreign currency forward contracts $ ( 235 ) Revenue $ 388

Interest rate swaps

Interest expense

Foreign currency forward contracts

Net Investment Hedges

Foreign currency forward contracts

2022 Year ended

2023 Years ended

December 31, 2023

Cash Flow Hedges

Interest rate swaps $ 31,870 Interest expense $ 5,520

Foreign currency forward contracts $ 247 Revenue $ 165

Interest rate swaps

Interest expense

Foreign currency forward contracts

Net Investment Hedges

1 unchanged sentence

Our policy requires that derivatives used for hedging purposes be designated and effective as a hedge of the identified risk exposure at the inception of the contract.

Accumulated other comprehensive income (loss) includes unrealized gains or losses from the change in fair value measurement of our derivative instruments each reporting period and the related income tax expense or benefit.

Excluding net investment hedges, changes in the fair value measurements of the derivative instruments and the related income tax expense or benefit are reflected as adjustments to accumulated other comprehensive income (loss) until the actual hedged expense is incurred or until the hedge is terminated at which point the unrealized gain (loss) and related tax effects are reclassified from accumulated other comprehensive income (loss) to current earnings.

Accumulated other comprehensive loss includes unrealized gains or losses from the change in fair value measurement of our derivative instruments each reporting period and the related income tax expense or benefit.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

hedged expense is incurred or until the hedge is terminated at which point the unrealized gain (loss) and related tax effects are reclassified from accumulated other comprehensive income loss to current earnings.

For net investment hedges, changes in the fair value measurements of the derivative instruments and the related income tax expense or benefit are reflected as adjustments to translation adjustment, a component of accumulated other comprehensive income (loss), and recognized in earnings only when the hedged GBP investment is liquidated.

The estimated accumulated other comprehensive income as of December 31, 2024 that is expected to be reclassified into earnings within the next twelve months is $ 5.0 million.

The estimated accumulated other comprehensive income as of December 31, 2025 that is expected to be reclassified into earnings within the next twelve months is insignificant.

There were no ineffective portions of our interest rate swap or foreign currency forward derivatives during the years ended December 31, 2025, 2024 and 2023.

5 unchanged sentences

As of December 31, 2025, we did not have any operating leases that had not yet commenced.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Release from Washington, DC lease

In February 2025, we made a one-time cash release payment of $ 28.0 million to the lessor in connection with a release from our lease for office space in Washington, DC (which was acquired as part of our acquisition of EVERFI in December 2021).

Due to our Remote-Flexible workforce strategy, we had not used the office space since February 2023 and had subleased a portion of the space.

During the year ended December 31, 2025, we recorded a loss on lease termination of $ 24.3 million in general and administrative expense.

The following table summarizes the components of our lease expense:

1 unchanged sentence

Operating lease cost (1)

$ 6,430 $ 8,812 $ 9,501

Variable lease cost

2 unchanged sentences

(1) Includes short-term lease costs, which were immaterial.

During the years ended December 31, 2024, 2023, and 2022, we recorded noncash impairment charges of $ 3.1 million, $ 5.6 million, and $ 1.0 million, respectively, against certain operating lease ROU assets.

These impairment charges resulted from our entry into subleases for different portions of our Washington, DC office location, which we closed in February 2023 to align with our remote-first workforce strategy.

These charges are reflected in general and administrative expense on the statements of comprehensive loss.

During the years ended December 31, 2024 and 2023, we recorded noncash impairment charges of $ 3.1 million and $ 5.6 million, respectively, against certain operating lease ROU assets.

These impairment charges resulted from our entry into subleases for different portions of our Washington, DC office location, which we closed in February 2023 to align with our Remote-Flexible workforce strategy.

These charges are reflected in general and administrative expense on the statements of comprehensive income (loss).

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Maturities of our operating lease liabilities as of December 31, 2025 were as follows:

1 unchanged sentence

(dollars in thousands) Operating leases

Thereafter 15,232

Total lease payments

6 unchanged sentences

Operating lease ROU assets

$ 26,554 $ 36,927

Accrued expenses and other current liabilities

8 unchanged sentences

Weighted average discount rate

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Supplemental cash flow information related to leases was as follows:

2 unchanged sentences

Operating cash flows from operating leases

$ 7,511 $ 10,983 $ 11,439

Right-of-use assets obtained in exchange for lease obligations (non-cash):

7 unchanged sentences

As of December 31, 2025, the remaining aggregate minimum purchase commitment under these arrangements was approximately $ 164.0 million through 2030.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Solution and service indemnifications

17 unchanged sentences

Based on the nature of the Security Incident, our research and third party (including law enforcement) investigation, we do not believe that any data went beyond the cybercriminal, has been misused, or has been disseminated or otherwise made available publicly.

As a result of the Security Incident, we are currently subject to certain legal proceedings and claims, as discussed below, and could be the subject of additional legal proceedings, claims, inquiries and investigations in the future that might result in

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

adverse judgments, settlements, fines, penalties or other resolution.

As a result of the Security Incident, we have been 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.

To limit our exposure to losses related to claims against us, including data breaches such as the Security Incident, we maintain $ 50 million of insurance abo ve a $ 250 thousand deductible payable by us.

As noted below, this coverage reduced our financial exposure related to the Security Incident in prior years.

We recorded expenses and offsetting insurance recoveries related to the Security Incident as follows:

We recorded expenses related to the Security Incident as follows:

Years ended December 31,

(dollars in thousands) 2025 2024 2023

Gross expense $ 13,700 $ 53,426 $ 57,614

Offsetting insurance recoveries — — ( 1,891 )

Net expense $ 13,700 $ 53,426 $ 55,723

Security Incident expenses

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

The following summarizes our cumulative expenses, insurance recoveries recognized and insurance recoveries paid as of:

6 unchanged sentences

Cumulative offsetting insurance recoveries paid

Recorded expenses have consisted primarily of payments to third-party service providers and consultants, including legal fees, settlement of the previously disclosed SEC and multi-state Attorneys General investigation and Attorney General of the State of California investigation (discussed below), settlements of customer claims and accruals for certain loss contingencies.

Recorded expenses have consisted primarily of payments to third-party service providers and consultants, including legal fees, settlement of governmental investigations, settlements of customer claims and accruals for certain loss contingencies.

Not included in the expenses discussed above were costs associated with enhancements to our cybersecurity program.

We present expenses and insurance recoveries related to the Security Incident in general and administrative expense on our consolidated statements of comprehensive loss and as operating activities on our consolidated statements of cash flows.

We present expenses and insurance recoveries related to the Security Incident in general and administrative expense on our consolidated statements of comprehensive income (loss) and as operating activities on our consolidated statements of cash flows.

Total costs related to the Security Incident exceeded the limit of our insurance coverage during the first quarter of 2022.

We expect to continue to incur expenses related to our response to the Security Incident, resolution of legal proceedings, claims and investigations, including those discussed below, and our efforts to further enhance our cybersecurity measures.

For the year ended December 31, 2024, we incurred net pre-tax expense of $ 13.7 million related to the Security Incident, which included $ 7.0 million for ongoing legal fees.

It also includes a settlement of loss contingencies of $ 6.8 million.

Also, for the year ended December 31, 2024, we had net cash outlays of $ 15.9 million related to the Security Incident, which included ongoing legal fees and the $ 6.8 million paid during the third quarter of 2024 related to our settlement with the Attorney General of the State of California (discussed below).

In line with our policy, legal fees are expensed as incurred.

For the year ended December 31, 2025, we currently expect net pre-tax expense of approximately $ 2.0 million to $ 3.0 million and net cash outlays of approximately $ 3.0 million to $ 4.0 million for ongoing legal fees related to the Security Incident.

As of December 31, 2024, we have recorded approximately $ 0.7 million in aggregate liabilities for loss contingencies based primarily on recent negotiations with certain customers related to the Security Incident that we believe we can reasonably estimate in accordance with our loss contingency procedures described above.

Our liabilities for loss contingencies are recorded in accrued expenses and other current liabilities on our consolidated balance sheets.

It is reasonably possible that our estimated or actual losses may change in the near term for those matters and be materially in excess of the amounts accrued, but we are unable at this time to reasonably estimate the possible additional loss.

There are other Security Incident-related matters for which we have not recorded a liability for a loss contingency as of December 31, 2024 because we are unable at this time to reasonably estimate the possible loss or range of loss.

Each of these matters could, separately or in the aggregate, result in an adverse judgment, settlement, fine, penalty or other resolution, the amount, scope and timing of which we are currently unable to predict, but could have a material adverse impact on our results of operations, cash flows or financial condition.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Customer claims.

To 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.

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, none of which resulted in claims submitted to us and are considered by us to have been abandoned by the customers.

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.

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.

Customer constituent class actions .

Presently, we are a defendant in putative consumer class action cases in U.S.

federal courts (which have been consolidated under multi district litigation to a single federal court) alleging harm from the Security Incident.

The plaintiffs in these cases, who 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.

On May 14, 2024, the United States District Court for the District of South Carolina (the "Court") issued a memorandum opinion and order (1) denying the multi district litigation plaintiffs' motion for class certification because of the plaintiffs' failure to meet their burden of proof as to ascertainability, (2) granting our motion to exclude the multi district litigation plaintiffs' expert on the issue of ascertainability, and (3) denying the multi district litigation plaintiffs' motion to exclude our expert on the issue of ascertainability.

Further, the Court denied as moot all other pending motions.

On July 30, 2024, the Fourth Circuit Court of Appeals denied the plaintiffs' petition for permission to appeal the Court's ruling.

This litigation remains ongoing.

In December 2024 and January 2025, judges in Ontario and British Columbia, respectively, approved a settlement between us and plaintiffs in putative consumer class actions cases in Canada.

In January 2025, the insignificant settlement was paid to Canadian charities designated in the settlement agreement as cy pres recipients.

Governmental investigations.

As previously disclosed, we were subject to an investigation by the U.S.

Department of Health and Human Services.

We also responded to inquiries from the Office of the Australian Information Commissioner in September 2020 and the Office of the Privacy Commissioner of Canada in October 2020.

Although we have not received notices of the termination of any of these inquiries and investigations, we believe that they are no longer active.

On June 13, 2024, we agreed to a Final Judgment and Permanent Injunction with the Attorney General of the State of California (the "Final Judgment") relating to the Security Incident.

This settlement fully resolved the last remaining U.S.

state attorney general investigation into the Security Incident.

Under the terms of the settlement, we agreed to comply with applicable laws;

not to make misleading statements related to our data protection, privacy, security, confidentiality, integrity, breach notification requirements, and similar matters;

and to implement and improve certain cybersecurity programs and tools.

The terms of the settlement with California are generally consistent with those to which we agreed in settling with the other 49 state Attorneys General and the District of Columbia on October 5, 2023, as discussed below.

As part of the settlement, we also paid a total of $ 6.8 million to the State of California.

Nothing contained in the Final Judgment is intended to be, and shall not in any event be construed or deemed to be, an admission or concession or evidence of any liability or wrongdoing whatsoever on the part of Blackbaud or any fact or violation of law, rule, or regulation.

For more information, see the Final Judgment and Permanent Injunction of the State of California, County of San Diego that was furnished as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on June 14, 2024.

On May 20, 2024, the U.S.

Federal Trade Commission (the "FTC") finalized an Order (the “FTC Order”) evidencing its settlement with us in connection with the Security Incident.

As part of the FTC Order, we were not fined and were not otherwise required to make any payment.

Furthermore, we agreed to the FTC Order without admitting or denying any of the FTC’s allegations, except as expressly stated otherwise in the FTC Order.

The settlement described in the FTC Order fully resolved the FTC investigation.

For more information, see the form of proposed order that was furnished as Exhibit 99.2 to our Current Report on Form 8-K filed with the SEC on February 2, 2024 and is identical in substance to the final FTC Order, and in Note 11 to our audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC on February 21, 2024.

On October 5, 2023, we entered into separate, substantially similar Administrative Orders with each of 49 state Attorneys General and the District of Columbia relating to the Security Incident which fully resolved the previously disclosed multi-state

For the year ended December 31, 2025, we incurred net pre-tax expense of $ 3.1 million related to the Security Incident for ongoing legal fees and recorded accruals for loss contingencies of $ 1.1 million.

Also, for the year ended December 31, 2025, we had net cash outlays of $ 4.6 million related to the Security Incident for ongoing legal fees and $ 1.8 million paid during the third quarter of 2025 related to previously recorded accruals for loss contingencies related to the Security Incident.

As of December 31, 2025, we do not have any recorded liabilities for loss contingencies related to the Security Incident.

As previously disclosed, during the three months ended September 30, 2025, we paid an insignificant settlement amount to the plaintiffs in the previously disclosed multi-district litigation filed in the United States District Court of South Carolina.

On September 22, 2025, that court issued an order definitively closing that case.

As a result, all customer constituent class actions related to the Security Incident are now resolved and closed.

In addition, as previously reported, insurance companies representing various customers’ interests through subrogation claims contacted us, and certain insurance companies filed subrogation claims in court, two of which remain pending and are the only customer claims currently unresolved.

For more information about the completed government investigations and related actions, see Note 11 to our audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC on February 21, 2025 and Note 8 to our unaudited, condensed consolidated financial statements contained in our Quarterly Report on Form 10-Q filed with the SEC on April 30, 2025.

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 are generally subject to U.S.

federal income tax examination for calendar tax years 2022 through 2025 as well as state and foreign income tax examinations for various years depending on statutes of limitations and net operating loss and/or tax credit utilization in those jurisdictions.

2025 Form 10-K

1 unchanged sentence

Notes to Consolidated Financial Statements

Civil Investigative Demand and the separate Civil Investigative Demand from the Office of the Indiana Attorney General relating to the Security Incident.

On March 9, 2023, we reached a settlement with the SEC in connection with the Security Incident that fully resolved the previously disclosed SEC investigation of the Security Incident.

On September 28, 2021, the Information Commissioner’s Office in the United Kingdom under the U.K.

Data Protection Act 2018 notified us that it has closed its investigation of the Security Incident.

On September 24, 2021, we received notice from the Spanish Data Protection Authority that it has concluded its investigation of the Security Incident.

On January 15, 2021, we were notified by the Data Protection Commission of Ireland that it has concluded its investigation of the Security Incident.

For more information about these completed government investigations and related actions, see Note 11 to our audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC on February 21, 2024.

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 are generally subject to U.S.

federal income tax examination for calendar tax years 2021 through 2024 as well as state and foreign income tax examinations for various years depending on statutes of limitations of those jurisdictions.

The following summarizes the components of income tax (benefit) expense:

The following summarizes the components of income tax expense (benefit):

Years ended December 31,

1 unchanged sentence

Current taxes:

Federal $ 36,367 $ 18,879 $ 3,485

State and local

2 unchanged sentences

Deferred taxes:

Federal ( 65,559 ) ( 18,303 ) ( 16,880 )

State and local

1 unchanged sentence

Total deferred taxes

Total income tax (benefit) provision $ ( 28,419 ) $ 15,824 $ ( 10,168 )

The following summarizes the components of (loss) income before provision for income taxes:

Total income tax provision (benefit)

The following summarizes the components of income (loss) before provision (benefit) for income taxes:

Years ended December 31,

(dollars in thousands) 2025 2024 2023

International

Income (loss) before provision (benefit) for income taxes

The following summarizes cash paid for taxes, net of refunds:

Years ended December 31,

(dollars in thousands) 2025 2024 2023

4,696 14,242 10,463

International:

(Loss) income before provision for income taxes $ ( 311,591 ) $ 17,644 $ ( 55,575 )

United Kingdom 11,480 9,632 8,407

Other 877 467 615

International total 12,357 10,099 9,022

Total cash paid for income taxes (net of refunds) $ 28,141 $ 60,668 $ 35,619

(1) No state accounted for more than 5% of total cash taxes paid.

2025 Form 10-K

1 unchanged sentence

Notes to Consolidated Financial Statements

A reconciliation between the effect of applying the federal statutory rate and the effective income tax rate used to calculate our income tax provision is as follows:

A reconciliation between the effect of applying the U.S.

federal statutory rate and the effective income tax rate used to calculate our income tax provision is as follows:

Years ended December 31,

2025 2024 2023

Amount Percent Amount Percent Amount Percent

Federal statutory rate

State income taxes, net of federal benefit 2.2 20.0 1.5

Change in foreign income tax rate applied to deferred tax balances — — 0.1

Change in state income tax rate applied to deferred tax balances ( 0.1 ) 7.1 1.8

Federal credits generated 1.9 ( 42.3 ) 11.5

State and local income taxes, net of federal income tax effect (1)

Foreign tax effects

United Kingdom

Statutory tax rate difference between United Kingdom and United States

Other foreign jurisdictions

Effect of changes in tax laws or rates enacted in the current period

Change in U.S.

Federal income tax laws (2)

Change in U.S.

State income tax rate applied to deferred tax balances

Effect of cross-border tax laws

GILTI inclusion (Net CFC Tested Income Inclusion starting Jan.

FDII benefit (Foreign-Derived Deduction Eligible Income ("FDDEI") starting Jan.

research and experimentation tax credits

Federal foreign tax credits

Changes in valuation allowances

Nontaxable or nondeductible items

Section 162(m) limitation

Stock-based compensation

Sale of subsidiary

FDII benefit 0.6 ( 10.2 ) 2.3

State credits, net of federal benefit 0.5 ( 9.1 ) 7.2

Return to accrual adjustment ( 0.1 ) ( 8.3 ) 1.4

Nondeductible meals, entertainment and transportation

GILTI inclusion ( 0.4 ) 9.3 ( 2.6 )

Nondeductible Security Incident-related fines or penalties

( 0.5 ) 35.7 ( 8.7 )

Foreign tax rate ( 0.5 ) 6.1 1.0

Unrecognized tax benefit ( 0.7 ) 0.7 0.5

Section 162(m) limitation ( 1.7 ) 30.1 ( 6.4 )

Change in valuation reserve

( 15.1 ) 10.8 ( 5.4 )

Other ( 0.1 ) 1.0 0.1

Changes in unrecognized tax benefits

Sale of subsidiary

Return to accrual adjustment

Other adjustments

Income tax provision effective rate

The decrease in our effective income tax rate for year ended December 31, 2024, when compared to the same period in 2023, was primarily attributable to the valuation allowance recorded in the current period.

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 the combination of our cumulative pretax loss position and net deferred tax asset position resulting from our divestiture of EVERFI.

We intend to continue maintaining a full valuation allowance on our U.S.

net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.

Furthermore, the effect of our various rate drivers is reversed by the Company’s 2024 loss position versus income in 2023.

(1) State taxes in California, Florida, Maryland, Minnesota, Pennsylvania and Washington, D.C.

made up the majority (greater than 50%) of the tax effect in this category.

(2) The rate impact of OBBBA is reflected within “Changes in valuation allowances” in our effective tax rate reconciliation given that the primary financial reporting effect of OBBBA is a reduction in DTAs, which in turn results in a corresponding reduction in the valuation allowance recorded against those DTAs, rather than a standalone recurring rate item.

2025 Form 10-K

1 unchanged sentence

Notes to Consolidated Financial Statements

The increase in our effective income tax rate for year ended December 31, 2025, when compared to the same period in 2024, was primarily attributable to normalization of several non-recurring events in 2024, in which we had recorded the valuation allowance against all of our U.S.

deferred tax assets in excess of deferred tax liabilities due to the combination of our cumulative pretax loss position and net deferred tax asset position resulting from our divestiture of EVERFI.

On July 4, 2025, the OBBBA was enacted into U.S.

federal income tax law.

OBBBA permanently extends immediate expensing of R&D expenditures under Internal Revenue Code Section 174 and provides transition rules for previously capitalized R&D costs.

Under ASC 740, these changes modify the measurement of certain DTAs, particularly those arising from capitalized Section 174 expenditures.

Additionally, in 2025, the valuation allowance decreased primarily due to the pre-tax income recorded during the current year as well as the enactment of the OBBBA, which resulted in the realizability of certain U.S.

deferred tax assets.

We intend to continue maintaining a valuation allowance on our U.S.

net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.

Management continues to evaluate the impact of future phases of OBBBA that will become effective beginning in 2026, including changes to international tax provisions and interest limitation rules;

however, for 2025, no further material impact beyond the valuation‑allowance‑driven effects is expected.

The significant components of our deferred tax assets and liabilities were as follows:

2 unchanged sentences

Capitalized R&D and software costs

$ 78,809 $ 47,351

Federal, state and foreign tax credits

Stock-based compensation

Operating leases 10,751 12,867

Deferred revenue 7,633 5,992

Capital loss carryforward

Federal and state and foreign net operating loss carryforwards

Capital loss carryforward

Deferred revenue

Operating leases

Allowance for credit losses

1 unchanged sentence

Accrued bonuses

Other 1,615 2,982

Total deferred tax assets

3 unchanged sentences

Operating leases

Fixed assets ( 4,716 ) ( 5,833 )

Other ( 9,010 ) ( 8,342 )

Total deferred tax liabilities

1 unchanged sentence

Net deferred tax liability

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2025, our federal, foreign and state net operating loss carryforwards for income tax purposes were approximately $ 53.4 million, $ 1.0 million and $ 50.3 million, respectively.

6 unchanged sentences

We also have federal and state capital loss carryforwards of $ 30.2 million expiring in 2029.

The foreign and state net operating loss carryforwards, capital loss carryforward and state credit carryforwards have a valuation reserve due to management's uncertainty regarding the future ability to use such carryforwards.

The foreign and state net operating loss carryforwards, capital loss carryforward and state credit carryforwards have a valuation allowance due to management's uncertainty regarding the future ability to use such carryforwards.

The following table illustrates the change in our deferred tax asset valuation allowance:

3 unchanged sentences

expense Balance at

2024 $ 37,862 $ 48,810 $ 86,672

2023 34,769 3,093 37,862

2022 31,974 2,795 34,769

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

The following table sets forth the change to our unrecognized tax benefit for the years ended December 31, 2025, 2024 and 2023:

9 unchanged sentences

The total amount of unrecognized tax benefit that, if recognized, would favorably affect the effective tax rate was $ 4.5 million at December 31, 2025.

Certain prior period amounts relating to our 2014 acquisitions were covered under indemnification agreements and, therefore, had a corresponding indemnification asset.

Due to lapse of statute of limitations, the indemnified unrecognized tax benefit was released in 2022 resulting in income tax benefit with offsetting expense included in pretax income from corresponding release of indemnification asset.

We recognize accrued interest and penalties, if any, related to unrecognized tax benefits as a component of income tax expense.

The total amount of accrued interest and penalties included in the consolidated balance sheet as of December 31, 2025 and December 31, 2024 was $ 1.1 million and insignificant, respectively.

The total amount of interest and penalties included in the consolidated statements of comprehensive loss as an increase or decrease in income tax expense for 2024 was $ 0.8 million and for 2023 and 2022 was insignificant.

We have taken federal and state tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits might decrease within the next twelve months.

The total amount of interest and penalties included in the consolidated statements of comprehensive loss as an increase or decrease in income tax expense for 2025, 2024 and 2023 was insignificant.

We have taken U.S.

federal and U.S.

state tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits might decrease within the next twelve months.

This possible decrease could result from the expiration of statutes of limitations.

3 unchanged sentences

income taxes and foreign withholding taxes on those undistributed earnings of our foreign subsidiaries.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Stock-based Compensation

4 unchanged sentences

We issue common stock from our pool of authorized stock upon exercise of stock options and stock appreciation rights, vesting of restricted stock units or upon granting of restricted stock.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Recently, we have issued three types of awards under our plans:

During the years ended December 31, 2025, 2024 and 2023, we have issued three types of awards under our plans:

restricted stock awards, time-based restricted stock units, and performance-based restricted stock units.

5 unchanged sentences

Performance-based restricted stock units

Awards granted to our executive officers and certain members of management are subject to accelerated vesting upon a change in control as defined in the employees’ employment agreement or retention agreement.

Awards granted to our executive officers and certain other employees are subject to accelerated vesting upon a change in control as defined in the employees’ employment agreement or retention agreement, and continued vesting in accordance with our Long-term Incentive Retirement Program, subject to satisfaction of applicable retirement eligibility requirements and required approvals.

Expense recognition

We recognize compensation expense associated with stock options and awards with performance or market based vesting conditions on an accelerated basis over the requisite service period of the individual grantees, which generally equals the vesting period.

We recognize compensation expense associated with restricted stock awards and SARs on a straight-line basis over the requisite service period of the individual grantees, which generally equals the vesting period.

We recognize the effect of awards for which the requisite service period is not rendered when the award is forfeited (that is, we recognize the effect of forfeitures in compensation cost when they occur).

5 unchanged sentences

Included in cost of revenue:

Cost of recurring $ 12,606 $ 14,052 $ 11,258

Cost of one-time services and other 1,486 2,606 3,178

Total included in cost of revenue 14,092 16,658 14,436

Included in operating expenses:

21 unchanged sentences

Unvested at January 1, 2025

Granted 422,685 69.86

Forfeited ( 77,785 ) 65.27

Vested ( 632,266 ) 67.47

Unvested at December 31, 2025

14 unchanged sentences

Unvested at January 1, 2025

Granted 330,913 67.73

Forfeited ( 30,834 ) 70.03

Vested ( 291,144 ) 66.54

Unvested at December 31, 2025

12 unchanged sentences

Unvested at January 1, 2025

Granted 778,467 67.90

Forfeited ( 51,271 ) 66.66

( 907,497 ) 61.17

Unvested at December 31, 2025

11 unchanged sentences

The repurchase program does not have an expiration date and may be limited, suspended or discontinued at any time without prior notice.

Under the 2024 Credit Agreement, we have restrictions on our ability to repurchase shares of our common stock, which are summarized on page 56 in this report.

Under the 2024 Credit Agreement, we have certain restrictions, as defined, on our ability to repurchase shares of our common stock, which are summarized on page 56 in this report.

We account for purchases of treasury stock under the cost method.

On January 17, 2024, our Board of Directors reauthorized, expanded and replenished our stock repurchase program by expanding the total capacity under the program from $ 250.0 million to $ 500.0 million available for repurchases.

In March 2024, we entered into an issuer forward repurchase transaction with a large financial institution to repurchase an aggregate $ 200 million of shares of our common stock (the "ASR Transaction").

Pursuant to the terms of the ASR Transaction, we provided the financial institution with a prepayment of $ 200 million and received an initial delivery of 2.1 million shares of our common stock, representing approximately 70 % of the total shares then-expected to be repurchased under the ASR Transaction.

The final number of shares of common stock delivered to us under the ASR Transaction was based on the average of the daily volume-weighted average prices of the common stock during the term of the ASR Transaction, less a discount and subject to customary adjustments upon events affecting the common stock (e.g., dilutive or concentrative events, mergers and acquisitions, and market disruptions).

We funded the ASR Transaction prepayment with borrowings pursuant to a revolving credit loan under the then effective 2020 Credit Agreement.

On October 29, 2024, in connection with the settlement of the ASR Transaction, we received approximately 490,000 shares of our common stock, in addition to the 2.1 million shares received in March 2024.

The difference of $ 9.2 million be tween the prepayment of $ 200 million and the value of the shares repurchased on the ASR Transaction is classified as a reduction to additional paid-in capital within our consolidated statement of stockholders' equity.

No cash was exchanged as part of the settlement of the ASR Transaction.

On July 16, 2024, our Board of Directors reauthorized, expanded and replenished our stock repurchase program by expanding the total capacity under the program from $ 500.0 million to $ 800.0 million available for repurchases.

On December 1, 2025, our Board of Directors reauthorized, expanded and replenished our stock repurchase program by expanding the total capacity under the program from $ 800.0 million to $ 1.0 billion available for repurchases.

During the year ended December 31, 2025, we repurchased an aggregate of 3,337,844 shares for $ 214.0 million.

The remaining amount available to purchase stock under the approved stock repurchase program was $ 960.6 million as of December 31, 2025.

2025 Form 10-K

1 unchanged sentence

Notes to Consolidated Financial Statements

During the year ended December 31, 2024, we repurchased an aggregate of 5,362,439 shares for $ 418.0 million, including the shares repurchased pursuant to the ASR Transaction.

The remaining amount available to purchase stock under the approved stock repurchase program was $ 644.6 million as of December 31, 2024.

Changes in accumulated other comprehensive (loss) income by component

6 unchanged sentences

Accumulated other comprehensive income balance, beginning of period

Other comprehensive income (loss) before reclassifications, net of tax effects of $( 5,080 ), $ 201 and $( 8,068 )

14,047 ( 271 ) 22,772

Amounts reclassified from accumulated other comprehensive income (loss) ( 19,613 ) ( 20,806 ) ( 5,685 )

Other comprehensive (loss) income before reclassifications, net of tax effects of $( 709 ), $( 5,080 ) and $ 201

Amounts reclassified from accumulated other comprehensive (loss) income

Tax expense included in provision for income taxes

Total amounts reclassified from accumulated other comprehensive income (loss) ( 14,406 ) ( 15,404 ) ( 4,196 )

Net current-period other comprehensive (loss) income ( 359 ) ( 15,675 ) 18,576

Accumulated other comprehensive income balance, end of period $ 7,799 $ 8,158 $ 23,833

Total amounts reclassified from accumulated other comprehensive (loss) income

Net current-period other comprehensive loss

Accumulated other comprehensive (loss) income balance, end of period

Foreign currency translation adjustment:

Accumulated other comprehensive (loss) income balance, beginning of period $ ( 9,846 ) $ ( 14,895 ) $ 1,265

Accumulated other comprehensive loss balance, beginning of period

Translation adjustment

Accumulated other comprehensive loss balance, end of period

Accumulated other comprehensive (loss) income, end of period $ ( 4,869 ) $ ( 1,688 ) $ 8,938

Accumulated other comprehensive loss, end of period

Defined Contribution Plan

5 unchanged sentences

There were no discretionary contributions by us to the 401K Plan in 2025, 2024 and 2023.

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Segment Information

We have one operating segment and one reportable segment.

Our CODM is our chief executive officer ("CEO"), who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about our revenue, for purposes of making decisions about assessing financial performance and allocating resources.

Our CEO considers costs of revenue, sales, marketing and customer success, research and development, and general and administrative expense categories on our consolidated statements of comprehensive loss as significant.

Our chief operating decision maker is our chief executive officer ("CEO"), who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about our revenue, for purposes of making decisions about assessing financial performance and allocating resources.

Our CEO uses consolidated operating margin and net income as the primary measures of profit or loss.

These financial metrics are used by our CEO to make key operating decisions, such as the allocation of budget between costs of revenues and our different operating expense categories.

Our other segment items include amortization, interest expense, other income, net, and income tax (benefit) provision on our consolidated statements of comprehensive loss.

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Our other segment items include amortization, interest expense, other income, net, and income tax provision (benefit) on our consolidated statements of comprehensive income (loss).

The following table presents long-lived assets by geographic region based on the location of the assets.

4 unchanged sentences

Total long-lived assets

$ 118,480 $ 135,616

See Note 17 to these consolidated financial statements for information about our revenues by geographic region.

5 unchanged sentences

Contract balances

Our contract assets as of December 31, 2024 and December 31, 2023 were insignificant.

We did not have any contract assets as of December 31, 2025 and December 31, 2024.

Our closing balances of deferred revenue were as follows:

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Total deferred revenue

The decrease in deferred revenue during 2024 was primarily due to our divestiture of EVERFI on December 31, 2024.

The increase in deferred revenue during 2025 was primarily due to billings related to contract renewals and new subscription sales of our cloud solutions.

Historically, due to the timing of customer budget cycles, we have an increase in customer contract renewals at or near the beginning of our third quarter.

2 unchanged sentences

The amount of revenue recognized during 2025 from performance obligations satisfied in prior periods was insignificant .

2025 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

Disaggregation of revenue

7 unchanged sentences

Total revenue (1)

2024 Form 10-K

Blackbaud, Inc.

Notes to Consolidated Financial Statements

The Social Sector and Corporate Sector market groups comprised our go-to-market organizations as of December 31, 2024.

The following is a description of each market group as of that date:

• The Social Sector market group focuses on sales to customers and prospects in the social sector, such as nonprofits, foundations, education institutions, healthcare organizations and other not-for-profit entities globally, and includes JustGiving;

• The Corporate Sector market group focuses on sales to customers and prospects in the corporate sector globally, and included EVERFI and YourCause.

The following table presents our revenue by market group:

(dollars in thousands) 2024

Social Sector

$ 1,022,215 $ 954,845 $ 907,197

Corporate Sector

133,280 150,587 150,908

Total revenue $ 1,155,495 $ 1,105,432 $ 1,058,105

The following table presents our recurring revenue by type:

(1) The decrease in total revenue from 2024 to 2025 was primarily due to our sale of EVERFI on December 31, 2024.

The following table presents our revenue by type:

(dollars in thousands) 2025

2 unchanged sentences

Total recurring revenue

Subsequent Events

Release from Washington, DC lease

In February 2025, we made a one-time cash release payment of $ 28 million to the lessor in connection with a release from our lease for office space in Washington, DC (which was acquired as part of our acquisition of EVERFI in December 2021).

Due to our remote-first workforce strategy, we had not used the office space since February 2023 and had subleased a portion of the space.

One-time services and other

Total revenue (1)

(1) The decrease in total revenue from 2024 to 2025 was primarily due to our sale of EVERFI on December 31, 2024.

Significant customer

Our largest single customer accounted for less than 1 % of our 2025 consolidated revenue.

2025 Form 10-K

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data