Basis of Presentation

9 Months Ended

Sep. 30, 2025


2. Basis of Presentation

Unaudited condensed consolidated interim financial statements

The accompanying condensed consolidated interim financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial reporting. These condensed consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to state fairly the condensed consolidated balance sheets, condensed consolidated statements of comprehensive income, consolidated statements of cash flows and consolidated statements of stockholders’ equity, for the periods presented in accordance with accounting principles generally accepted in the United States ("U.S.") ("GAAP"). The condensed consolidated balance sheet at December 31, 2024 has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three and/or nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025, or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations for interim reporting of the SEC. These unaudited, condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, and other forms filed with the SEC from time to time.

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

During the three months ended September 30, 2025, we identified a prior period error related to the previously recorded valuation allowance, which resulted in an understatement of the deferred tax liability by $15.5 million as of December 31, 2024, March 31, 2025 and June 30, 2025, and a corresponding overstatement of the income tax benefit and an understatement of the net loss for the year ended December 31, 2024. There was no impact to our income tax provision for the first and second quarters of 2025. We evaluated the materiality of the error and determined that the impact was not material to our previously issued consolidated financial statements for the prior periods impacted but that correcting the error in the current period would have been material to our consolidated results of operations for the three and nine months ended September 30, 2025, and would be material to our forecasted consolidated results of operations for the year ended December 31, 2025. Accordingly, we have revised our prior period financial statements and applicable notes to correct the valuation allowance error as of and for the year ended December 31, 2024, and as of and for the three and six months ended June 30, 2025. Additionally, we corrected other unrelated immaterial errors and related notes as of and for the years ended December 31, 2023 and December 31, 2024, as of and for the three months ended March 31, 2024, as of and for the three and six months ended June 30, 2024, as of and for the three and nine months ended September 30, 2024, as of and for the three months ended March 31, 2025, and as of and for the three and six months ended June 30, 2025. See Note 13 for additional information and a summarized quantification of the revised financial statements. Revisions to our previously

reported disclosures have been reflected in Note 3, Earnings Per Share, Note 5, Consolidated Financial Statement Details, and Note 12, Revenue Recognition.

Basis of consolidation

The unaudited, condensed consolidated financial statements include the accounts of Blackbaud, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of estimates

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

Recently issued accounting pronouncements

There are no recently issued accounting pronouncements that we expect to have a material impact on our consolidated financial statements when adopted in the future.

Summary of significant accounting policies

There have been no material changes to our significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 21, 2025.