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Blackbaud Announces 2026 Second Quarter Results

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Company Expects to Finish Fiscal Year 2026 in the Upper Half of Financial Guidance Ranges

CHARLESTON, S.C., July 29, 2026 /PRNewswire/ — Blackbaud (NASDAQ: BLKB), the world’s leading provider of AI-powered solutions for social impact, today announced financial results for its second quarter ended June 30, 2026.

“Our second quarter and first-half results came in as expected, and combined with our confidence in the second half, position us to finish in the upper half of our FY26 guidance ranges for revenue, adjusted EBITDA, non-GAAP EPS, and free cash flow, with EPS and free cash flow at the high end,” said Mike Gianoni, president, CEO and vice chairman of the board of directors, Blackbaud. “We continue to invest aggressively in AI, reflected in the accelerating pace of innovation across our Agents for Good™ solutions, which help customers advance their missions and operate more efficiently while also strengthening our own productivity and profitability.”

Second Quarter 2026 Results Compared to Second Quarter 2025 Results:

GAAP total revenue was $290.6 million, up 3.0% and non-GAAP organic revenue increased 3.0%.GAAP recurring revenue was $285.3 million, up 3.3% and represented 98.2% of total revenue. Non-GAAP organic recurring revenue increased 3.3%.GAAP income from operations was $62.0 million, with GAAP operating margin of 21.3%, an increase of 100 basis points.Non-GAAP income from operations was $94.6 million, with non-GAAP operating margin of 32.6%, a decrease of 110 basis points.GAAP net income was $35.4 million, with GAAP diluted earnings per share of $0.79, up $0.24 per share.Non-GAAP net income was $59.7 million, with non-GAAP diluted earnings per share of $1.33, up $0.11 per share.Non-GAAP adjusted EBITDA was $110.3 million, up $1.2 million, with non-GAAP adjusted EBITDA margin of 38.0%, a decrease of 70 basis points.Rule of 40 score was 41.0%.GAAP net cash provided by operating activities was $91.1 million, an increase of $24.1 million, with GAAP operating cash flow margin of 31.3%, an increase of 760 basis points.Non-GAAP free cash flow was $75.3 million, an increase of $23.8 million, with non-GAAP free cash flow margin of 25.9%, an increase of 760 basis points.

“We again executed well against our operating plan while investing in innovation and efficiency across the business,” said Chad Anderson, executive vice president and CFO, Blackbaud. “We’re building the foundation for substantial shareholder value, supported by an attractive financial model and steady momentum toward our long-term goals. We also remain aggressive in repurchasing our shares having already repurchased just over 6% this year, reducing our total shares outstanding by approximately 15% since the fourth quarter of 2023.”

An explanation of all non-GAAP financial measures referenced in this press release, including the Rule of 40, is included below under the heading “Non-GAAP Financial Measures.” A reconciliation of the company’s non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Recent Company Highlights

Blackbaud announced multiple new Agents for Good™ and AI-powered product enhancements planned as part of a reimagined cloud-native, AI-first connected platform, underscoring the company’s continued innovation momentum and differentiated position as the trusted AI engine for social impact.The Blackbaud Institute published research that shows that while AI adoption is accelerating across the social impact sector, the organizations seeing transformational results have higher levels of AI maturity, moving beyond fragmented experimentation to systemic, governed AI use. To support the long-term health of the sector, Blackbaud has convened the AI Coalition for Social Impact, which has launched a free certification program to equip professionals to adopt AI responsibly, confidently and effectively.At its bi-annual Product Update Briefings and annual bbdevdays Developers Conference, Blackbaud showcased continued product and platform innovation highlighting new AI-powered capabilities, expanded connected workflows, and developer tools that reinforce the company’s trusted AI engine strategy and help customers build, extend, and scale purpose-built solutions for social impact.Blackbaud strengthened its leadership in education, launching an Innovation Partnership and strategic investment in Student First to help higher education institutions build a more connected campus operating model, and unveiling new AI innovation for K–12 independent schools, including an Admissions Agent in development to help schools deliver more personalized, efficient admissions experiences.The company earned recognition from the American Business Awards for AI innovation and leadership, was named to Newsweek’s World’s Greenest Companies list for the second consecutive year, and was honored on the TIME America’s Best Companies 2026 list, underscoring continued momentum in responsible innovation, sustainability and workplace excellence.Blackbaud released its 2025 Impact Report, highlighting progress across responsible AI, sustainability and global social impact, reinforcing the company’s commitment to using purpose-built technology and responsible business practices to help customers and communities drive measurable outcomes.

Visit www.blackbaud.com/newsroom for more information about Blackbaud’s recent highlights.

Financial Outlook
Blackbaud today reaffirmed its 2026 full year financial guidance and expects to finish in the upper half of the range across all four key metrics:

GAAP revenue of $1.173 billion to $1.179 billionNon-GAAP adjusted EBITDA of $430 million to $438 millionNon-GAAP diluted earnings per share of $5.15 to $5.25Non-GAAP free cash flow of $280 million to $290 million

Included in its 2026 full year financial guidance are the following updated assumptions:

Non-GAAP annualized effective tax rate is expected to be approximately 24.5%Interest expense for the year is expected to be approximately $62 million to $66 millionDiluted weighted average shares outstanding for the year are expected to be approximately 45.0 million to 46.0 millionCapital expenditures for the year are expected to be approximately $60 million to $70 million, including approximately $52 million to $62 million of capitalized software development costs

Blackbaud has not reconciled forward-looking full-year non-GAAP financial measures contained in this news release to their most directly comparable GAAP measures, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to compensation, acquisition transactions and integration, tax items or others that may arise during the year. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts.

Stock Repurchase Program
As of June 30, 2026, Blackbaud had approximately $850 million remaining under its common stock repurchase program that was expanded, replenished and reauthorized in December 2025. Based on our current plans, and stock repurchases to date, we expect total repurchases during 2026 to represent between 6% and 10.0% of our outstanding common stock as of December 31, 2025.

Conference Call Details

What: 

Blackbaud’s 2026 Second Quarter Conference Call

When: 

July 29, 2026

Time:   

8:00 a.m. (Eastern Time)

Live Call: 

1-877-407-3088 (US/Canada)

Webcast:   

Blackbaud’s Investor Relations Webpage

About Blackbaud
Blackbaud (NASDAQ: BLKB) is 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, Blackbaud propels 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, Blackbaud’s solutions are building a future where resources are unleashed at the speed of need. Blackbaud has been recognized by Fast Company, Newsweek, Quartz, Forbes and more for AI innovation, responsible leadership and workplace excellence. Blackbaud has operations in the United States, Australia, Canada, Costa Rica, India and the United Kingdom, supporting users in 100+ countries. Learn more at www.blackbaud.com, or follow us on X/Twitter, LinkedIn, Instagram, and Facebook.

Investor Contact
IR@blackbaud.com

Media Contact
media@blackbaud.com

Forward-Looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the predictability of our financial condition and results of operations. These statements involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: management of integration of acquired companies; uncertainty regarding increased business and renewals from existing customers; a shifting revenue mix that may impact gross margin; continued success in sales growth; risks related to the development, deployment, regulation, security, market adoption and perception of artificial intelligence technologies; cybersecurity and data protection risks and related liabilities; potential litigation involving us; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from Blackbaud’s investor relations department. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Trademarks
All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

Non-GAAP Financial Measures
Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. Blackbaud uses non-GAAP financial measures internally in analyzing its operational performance. Accordingly, Blackbaud believes these non-GAAP measures are useful to investors, as a supplement to GAAP measures, in evaluating its ongoing operational performance and trends and in comparing its financial results from period-to-period with other companies in Blackbaud’s industry, many of which present similar non-GAAP financial measures to investors. However, these non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies.

The non-GAAP financial measures discussed above exclude the impact of certain transactions that Blackbaud believes are not directly related to its operating performance in any particular period, but are for its long-term benefit over multiple periods. Blackbaud believes these non-GAAP financial measures reflect its ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.

While Blackbaud believes these non-GAAP measures provide useful supplemental information, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures.

Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software development, and capital expenditures for property and equipment. Blackbaud believes non-GAAP free cash flow provides a useful measure of the company’s operating performance. Non-GAAP free cash flow is not intended to represent and should not be viewed as the amount of residual cash flow available for discretionary expenditures.

In addition, Blackbaud uses non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic recurring revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, in analyzing its operating performance. Blackbaud believes that these non-GAAP measures are useful to investors, as a supplement to GAAP measures, for evaluating the periodic growth of its business on a consistent basis. Each of these measures excludes incremental acquisition-related revenue attributable to companies, if any, acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, each of these measures reflects presentation of full-year incremental non-GAAP revenue derived from such companies as if they were combined throughout the prior period. In addition, each of these measures excludes prior period revenue associated with divested businesses, if any. The exclusion of the prior period revenue is to present the results of the divested businesses within the results of the combined company for the same period of time in both the prior and current periods. Blackbaud believes this presentation provides a more comparable representation of its current business’ organic revenue growth and revenue run-rate.

Rule of 40 is defined as non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. Non-GAAP adjusted EBITDA is defined as GAAP net income plus interest, net; income tax provision (benefit); depreciation; amortization of intangible assets from business combinations; amortization of software development costs; stock-based compensation expense; Global Capabilities Center (“GCC”) workforce transition costs; acquisition and disposition-related costs; and Security Incident-related costs.

Blackbaud, Inc.

Consolidated Balance Sheets

(Unaudited)

(dollars in thousands, except per share amounts)

June 30,
2026

December 31,
2025

Assets

Current assets:

Cash and cash equivalents

$          34,388

$          38,914

Restricted cash

846,620

720,061

Accounts receivable, net of allowance of $6,672 and $5,876 at June 30, 2026 and
December 31, 2025, respectively

134,888

80,517

Customer funds receivable

6,378

1,308

Prepaid expenses and other current assets

96,620

89,290

Total current assets

1,118,894

930,090

Property and equipment, net

85,499

85,076

Software development costs, net

158,999

155,842

Goodwill

1,055,923

1,056,815

Intangible assets, net

93,379

106,654

Other assets

81,802

56,205

Total assets

$      2,594,496

$      2,390,682

Liabilities and stockholders’ equity

Current liabilities:

Trade accounts payable

$          35,431

$          27,344

Accrued expenses and other current liabilities

37,603

43,272

Due to customers

851,793

719,833

Debt, current portion

22,595

22,660

Deferred revenue, current portion

403,630

368,986

Total current liabilities

1,351,052

1,182,095

Debt, net of current portion

1,127,412

1,087,037

Deferred tax liability

33,407

21,981

Deferred revenue, net of current portion

2,773

2,778

Other liabilities

12,822

11,737

Total liabilities

2,527,466

2,305,628

Commitments and contingencies

Stockholders’ equity:

Preferred stock; 20,000,000 shares authorized, none outstanding

—

—

Common stock, $0.001 par value; 180,000,000 shares authorized, 74,035,437 and
72,312,354 shares issued at June 30, 2026 and December 31, 2025, respectively;
45,513,708 and 46,705,325 shares outstanding at June 30, 2026 and December 31, 2025, respectively

74

72

Additional paid-in capital

1,438,227

1,391,641

Treasury stock, at cost; 28,521,729 and 25,607,029 shares at June 30, 2026 and December 31, 2025, respectively

(1,452,356)

(1,316,224)

Accumulated other comprehensive loss

(925)

(5,948)

Retained earnings

82,010

15,513

Total stockholders’ equity

67,030

85,054

Total liabilities and stockholders’ equity

$      2,594,496

$      2,390,682

Blackbaud, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)

(dollars in thousands, except per share amounts)

Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

Revenue

$     290,597

$     282,030

$     571,737

$     551,966

Cost of revenue

112,434

113,633

227,015

228,448

Gross profit

178,163

168,397

344,722

323,518

Operating expenses

Sales, marketing and customer success

46,256

44,046

93,605

88,690

Research and development

34,856

33,595

71,772

67,154

General and administrative

34,449

32,856

64,710

89,535

Amortization of intangible assets

586

566

1,174

1,100

Total operating expenses

116,147

111,063

231,261

246,479

Income from operations

62,016

57,334

113,461

77,039

Interest expense

(17,579)

(18,411)

(33,615)

(35,356)

Other income, net

1,984

1,118

4,380

3,223

Income before provision for income taxes

46,421

40,041

84,226

44,906

Income tax provision

11,063

13,575

17,729

14,117

Net income

$      35,358

$      26,466

$      66,497

$      30,789

Earnings per share

Basic

$         0.79

$         0.55

$         1.47

$         0.64

Diluted

$         0.79

$         0.55

$         1.46

$         0.63

Common shares and equivalents outstanding

Basic weighted average shares

44,759,580

47,784,062

45,158,724

48,104,780

Diluted weighted average shares

44,884,337

48,248,057

45,605,260

48,786,793

Other comprehensive income (loss)

Foreign currency translation adjustment

$        (117)

$        7,324

$      (1,597)

$      10,583

Unrealized gain (loss) on derivative instruments, net of tax

3,042

(5,314)

6,620

(12,006)

Total other comprehensive income (loss)

2,925

2,010

5,023

(1,423)

Comprehensive income

$      38,283

$      28,476

$      71,520

$      29,366

Blackbaud, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Six months ended
June 30,

(dollars in thousands)

2026

2025

Cash flows from operating activities

Net income

$       66,497

$       30,789

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

41,293

43,346

Net provision for credit losses and sales returns

3,020

2,973

Stock-based compensation expense

46,586

49,422

Deferred taxes

9,380

(653)

Amortization of deferred financing costs and discount

1,269

1,346

Other non-cash adjustments

1,313

(5,407)

Changes in operating assets and liabilities, net of acquisition and disposal of businesses:

Accounts receivable

(57,465)

(64,984)

Prepaid expenses and other assets

(11,416)

(8,955)

Trade accounts payable

6,818

(8,408)

Accrued expenses and other liabilities

530

(9,910)

Deferred revenue

34,688

38,770

Net cash provided by operating activities

142,513

68,329

Cash flows from investing activities

Purchase of property and equipment

(4,117)

(1,311)

Capitalized software development costs

(26,127)

(27,787)

Cash used in disposition of business

—

(12,235)

Other investing activities

(8,675)

—

Net cash used in investing activities

(38,919)

(41,333)

Cash flows from financing activities

Proceeds from issuance of debt

209,500

272,300

Payments on debt

(180,857)

(187,666)

Employee taxes paid for withheld shares upon equity award settlement

(25,319)

(38,655)

Change in due to customers

132,582

128,582

Change in customer funds receivable

(5,175)

(3,262)

Purchase of treasury stock, including excise tax payments

(111,637)

(103,205)

Net cash provided by financing activities

19,094

68,094

Effect of exchange rate on cash, cash equivalents and restricted cash

(655)

7,212

Net increase in cash, cash equivalents and restricted cash

122,033

102,302

Cash, cash equivalents and restricted cash, beginning of period

758,975

809,512

Cash, cash equivalents and restricted cash, end of period

$      881,008

$      911,814

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown above in the consolidated statements of cash flows:

(dollars in thousands)

June 30,
2026

December 31,
2025

Cash and cash equivalents

$       34,388

$       38,914

Restricted cash

846,620

720,061

Total cash, cash equivalents and restricted cash in the statement of cash flows

$      881,008

$      758,975

Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

(dollars in thousands, except per share amounts)

Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

GAAP Revenue

$   290,597

$   282,030

$   571,737

$   551,966

GAAP gross profit

$   178,163

$   168,397

$   344,722

$   323,518

GAAP gross margin

61.3 %

59.7 %

60.3 %

58.6 %

Non-GAAP adjustments:

Add: Stock-based compensation expense

2,714

3,250

5,801

5,948

Add: Amortization of intangibles from business combinations

5,404

7,020

11,671

14,072

Add: Employee severance

—

302

—

302

Add: GCC workforce transition costs(1)

267

—

542

—

Subtotal

8,385

10,572

18,014

20,322

Non-GAAP gross profit

$   186,548

$   178,969

$   362,736

$   343,840

Non-GAAP gross margin

64.2 %

63.5 %

63.4 %

62.3 %

GAAP income from operations

$     62,016

$     57,334

$   113,461

$     77,039

GAAP operating margin

21.3 %

20.3 %

19.8 %

14.0 %

Non-GAAP adjustments:

Add: Stock-based compensation expense

22,706

27,252

46,586

49,422

Add: Amortization of intangibles from business combinations

5,990

7,586

12,845

15,172

Add: Employee severance

—

2,147

—

2,147

Add: GCC workforce transition costs(1)

1,974

—

3,000

—

Add: Acquisition and disposition-related costs(2)

866

264

1,013

25,396

Add: Security Incident-related costs

—

395

—

2,575

Add: Impairment of capitalized software development costs

1,056

—

1,056

—

Subtotal

32,592

37,644

64,500

94,712

Non-GAAP income from operations

$     94,608

$     94,978

$   177,961

$   171,751

Non-GAAP operating margin

32.6 %

33.7 %

31.1 %

31.1 %

GAAP income before provision for income taxes

$     46,421

$     40,041

$     84,226

$     44,906

GAAP net income

$     35,358

$     26,466

$     66,497

$     30,789

Shares used in computing GAAP diluted earnings per share

44,884,337

48,248,057

45,605,260

48,786,793

GAAP diluted earnings per share

$       0.79

$       0.55

$       1.46

$       0.63

Non-GAAP adjustments:

Add: GAAP income tax provision

11,063

13,575

17,729

14,117

Add: Total non-GAAP adjustments affecting income from operations

32,592

37,644

64,500

94,712

Non-GAAP income before provision for income taxes

79,013

77,685

148,726

139,618

Assumed non-GAAP income tax provision(3)

19,358

19,033

36,438

34,207

Non-GAAP net income

$     59,655

$     58,652

$   112,288

$   105,411

Shares used in computing non-GAAP diluted earnings per share

44,884,337

48,248,057

45,605,260

48,786,793

Non-GAAP diluted earnings per share

$       1.33

$       1.22

$       2.46

$       2.16

(1) GCC workforce transition costs represent severance and other costs incurred in connection with the transition of certain roles to our Global Capability Center in Hyderabad, India.

(2) Includes charges of $24.3 million incurred during the six months ended June 30, 2025 related to the release from our lease for office space in Washington, DC.

(3) We use a non-GAAP effective tax rate of 24.5% when calculating non-GAAP net income and non-GAAP diluted earnings per share. We base this rate on our estimated annual GAAP income tax rate, adjusted for items excluded from GAAP income when calculating non-GAAP income and for significant nonrecurring tax adjustments. We review this non-GAAP tax rate annually to determine whether it remains appropriate for evaluating our financial performance. In conducting this review, we consider our GAAP annual effective tax rate, changes in tax legislation, non-GAAP adjustments, and shifts in the geographic mix of revenues and expenses. We also evaluate other factors that we deem significant. Because the tax treatment of non-GAAP adjustments differs from GAAP and because of our methodology for estimating the annual tax rate, the non-GAAP tax rate may differ from the GAAP tax rate and from our actual tax liabilities.

Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)

(dollars in thousands)

Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

GAAP revenue

$   290,597

$     282,030

$   571,737

$     551,966

GAAP revenue growth

3.0 %

3.6 %

Less: Non-GAAP revenue from divested businesses(1)

—

—

—

—

Non-GAAP organic revenue(2)

$   290,597

$     282,030

$   571,737

$     551,966

Non-GAAP organic revenue growth

3.0 %

3.6 %

Non-GAAP organic revenue(2)

$   290,597

$     282,030

$   571,737

$     551,966

Foreign currency impact on non-GAAP organic revenue(3)

(690)

—

(2,930)

—

Non-GAAP organic revenue on constant currency basis(3)

$   289,907

$     282,030

$   568,807

$     551,966

Non-GAAP organic revenue growth on constant currency basis

2.8 %

3.1 %

GAAP recurring revenue

$   285,291

$     276,279

$   561,776

$     539,604

GAAP recurring revenue growth

3.3 %

4.1 %

Less: Non-GAAP recurring revenue from divested businesses(1)

—

—

—

—

Non-GAAP organic recurring revenue(2)

$   285,291

$     276,279

$   561,776

$     539,604

Non-GAAP organic recurring revenue growth

3.3 %

4.1 %

Non-GAAP organic recurring revenue(2)

$   285,291

$     276,279

$   561,776

$     539,604

Foreign currency impact on non-GAAP organic recurring revenue(3)

(670)

—

(2,868)

—

Non-GAAP organic recurring revenue on constant currency basis(3)

$   284,621

$     276,279

$   558,908

$     539,604

Non-GAAP organic recurring revenue growth on constant currency basis

3.0 %

3.6 %

(1) Non-GAAP revenue from divested businesses excludes revenue associated with divested businesses in the prior period. The exclusion of the prior period revenue is to present the results of the divested business with the results of the combined company for the same period of time in both the prior and current periods.

(2) Non-GAAP organic revenue and non-GAAP organic recurring revenue for the prior year periods presented herein may not agree to non-GAAP organic revenue and non-GAAP organic recurring revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth are calculated.

(3) To determine non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period’s quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro.

Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)

(dollars in thousands)

Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

GAAP net income

$    35,358

$      26,466

$    66,497

$      30,789

Non-GAAP adjustments:

Add: Interest, net

15,652

16,443

30,009

31,733

Add: GAAP income tax provision

11,063

13,575

17,729

14,117

Add: Depreciation

2,845

2,667

5,051

5,642

Add: Amortization of intangibles from business combinations

5,990

7,586

12,845

15,172

Add: Amortization of software development costs(1)

12,804

12,304

25,225

24,176

Subtotal

48,354

52,575

90,859

90,840

Non-GAAP EBITDA

$    83,712

$      79,041

$   157,356

$     121,629

Non-GAAP EBITDA margin(2)

28.8 %

27.5 %

Non-GAAP adjustments:

Add: Stock-based compensation expense

$    22,706

$      27,252

$    46,586

$      49,422

Add: Employee severance

—

2,147

—

2,147

Add: GCC workforce transition costs(3)

1,974

—

3,000

—

Add: Acquisition and disposition-related costs(3)

866

264

1,013

25,396

Add: Security Incident-related costs

—

395

—

2,575

Add: Impairment of capitalized software development costs

1,056

—

1,056

—

Subtotal

26,602

30,058

51,655

79,540

Non-GAAP adjusted EBITDA

$   110,314

$     109,099

$   209,011

$     201,169

Non-GAAP adjusted EBITDA margin(4)

38.0 %

36.6 %

Rule of 40(5)

41.0 %

40.2 %

Non-GAAP adjusted EBITDA

$   110,314

$     109,099

$   209,011

$     201,169

Foreign currency impact on Non-GAAP adjusted EBITDA(6)

(162)

(1,096)

(1,191)

(891)

Non-GAAP adjusted EBITDA on constant currency basis(6)

$   110,152

$     108,003

$   207,820

$     200,278

Non-GAAP adjusted EBITDA margin on constant currency basis

38.0 %

36.5 %

Rule of 40 on constant currency basis(7)

40.8 %

39.6 %

(1) Includes amortization expense related to software development costs, and amortization expense from capitalized cloud computing implementation costs.

(2) Measured by GAAP revenue divided by non-GAAP EBITDA.

(3) See additional details in the reconciliation of GAAP to Non-GAAP operating income above.

(4) Measured by non-GAAP organic revenue divided by non-GAAP adjusted EBITDA.

(5) Measured by non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. See Non-GAAP organic revenue growth table above.

(6) To determine non-GAAP adjusted EBITDA on a constant currency basis, non-GAAP adjusted EBITDA from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period’s quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro.

(7) Measured by non-GAAP organic revenue growth on constant currency basis plus non-GAAP adjusted EBITDA margin on constant currency basis.

(dollars in thousands)

Six months ended
June 30,

2026

2025

GAAP net cash provided by operating activities

$   142,513

$     68,329

GAAP operating cash flow margin

24.9 %

12.4 %

Non-GAAP adjustments:

Less: purchase of property and equipment

(4,117)

(1,311)

Less: capitalized software development costs

(26,127)

(27,787)

Non-GAAP free cash flow

$   112,269

$     39,231

Non-GAAP free cash flow margin

19.6 %

7.1 %

 

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Teradata Introduces New Privacy, Security, and Resiliency Capabilities as AI Forces Change in Enterprise Data Protection

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New capabilities protect the sensitive data and intelligence behind enterprise AI while keeping mission-critical operations available and recoverable

SAN DIEGO, Oct. 20, 2026 /PRNewswire/ — Teradata (NYSE: TDC) today announced new privacy, security, and resiliency capabilities designed to address one of the defining challenges of enterprise AI: how sensitive data is protected, who and what can access it, and whether it remains available and recoverable when something goes wrong. Teradata addresses all three through an integrated approach that reduces raw identity exposure, enforces protection closer to the data, and keeps the intelligence powering AI available and recoverable. In practice, that means protecting the intelligence behind AI without diminishing what makes it valuable.

Key Capabilities

Poly-Anonymization®: reduces raw identity exposure while preserving the relationships and utility AI and analytics requireFormat-preserving encryption: protects sensitive values without changing their format or breaking downstream systemsPost-quantum security and readiness: strengthens protection against emerging quantum-era threats through Anonomatic PII Vault® and TLS 1.3 hybrid-key exchange for data in transitImmutable backup protection: prevents recovery points from being modified or deleted, strengthening cyber-recovery readinessDatabase-level high availability: an additional availability layer for mission-critical workloads, distinct from disaster recovery

Why It Matters Now
As AI becomes mission-critical, it expands both the value and the vulnerability of enterprise data. Sensitive information now moves among users, applications, models, and agents, making it harder to secure at the boundary alone. AI is designed to combine disparate information to find patterns and make decisions, which means data that isn’t individually identifiable can become so when AI brings it together.

Executive Quote
“Privacy, security, and resiliency have historically been treated as separate problems with separate solutions. That approach doesn’t hold up when AI is moving sensitive data across users, applications, models, and agents simultaneously. This announcement reflects how we think those capabilities need to work together, and it’s the foundation for how we intend to extend that protection as AI environments grow more complex and the actors operating within them multiply.”
          -Sumeet Arora, Chief Product Officer, Teradata

Privacy Protection
Access control determines who can see sensitive data. Identity reduction changes how much identifying information needs to be present in the analytical environment in the first place. Teradata combines both, through an OEM partnership with Anonomatic, whose privacy capabilities are natively available to Teradata customers.

Poly-Anonymization replaces PII fields with a stable identifier while holding underlying identity separately within Anonomatic PII Vault, a post-quantum-secure environment built with multiple layers of overlapping security controls designed to protect sensitive identity information. Authorized users can restore identity when a legitimate use case requires it, but everyone else works with data that retains its analytical structure, its relationships, and its utility. The result is an analytical environment where sensitive data can be used for AI, analytics, testing, and approved collaboration without broadly exposing who the data is about.

Unlike approaches that rely solely on mathematically reversible encryption, PII Vault combines identity separation, Poly-Anonymization, access controls, and additional layered protections to reduce identity exposure while retaining the utility required for AI and analytics. Format-preserving encryption extends that protection to situations where a value’s structure matters to downstream systems, protecting sensitive data without breaking the applications and workflows built around it.

Testing at large scale demonstrated that Teradata’s Anonomatic-powered privacy-preserving controls can support enterprise analytical workloads without the performance tradeoffs organizations typically associate with data privacy. Multi-table join queries on protected data used fewer Teradata resources than equivalent queries on unprotected data, though results will vary by workload and configuration.

Partner Quote
“Enterprise AI creates a fundamentally different privacy challenge. Organizations need to use sensitive, individual-level data to build effective AI, but the traditional tools for protecting that data weren’t designed to preserve what AI needs to work. Our partnership with Teradata makes it possible to reduce identity exposure at enterprise scale without forcing organizations to choose between protection and utility.”
          -Matt Fleck, Founder and CEO at Anonomatic, a data security software company focused on making PII data privacy secure, simple and cost effective

Native Data Security
Protection that follows the data requires controls enforced at the data layer, not just at the systems surrounding it. Teradata applies classification, policy enforcement, and access controls closer to the data itself. Together, these capabilities provide a governance-led foundation for protecting data and intelligence across users, applications, and workloads.

For data in transit, Teradata introduces post-quantum protection via TLS 1.3 hybrid-key exchange, which combines classical and post-quantum cryptographic algorithms in a single handshake. As quantum computing advances make current encryption standards increasingly vulnerable, organizations that establish cryptographic readiness now will be better positioned for what’s ahead.

New native capabilities including dynamic data masking, data classification and tagging, column-level encryption, and global identity extend that protection across the data layer. Through a partnership with Immuta, a data authorization platform between identity and enterprise data, dynamic ABAC brings identity-aware, attribute-driven access control that enforces policy consistently across users and AI workloads without duplicating data or rewriting governance rules.

Teradata’s security architecture is designed to extend as AI environments evolve, with ongoing investment in controls that govern how AI agents access and act on enterprise data within policy boundaries.

Enterprise Data Protection
For enterprises running AI at scale, a cyberattack is a threat to the data, context, and operational knowledge that AI depends on to function. Teradata Enterprise Data Protection addresses that reality through a workload-aligned approach that lets organizations match protection levels to business criticality rather than applying the same resiliency architecture to every workload. The objective is not simply to restore data, but to restore the trusted context AI needs to resume mission-critical operations.

Database-level high availability via real-time replication introduces an additional availability layer designed for continuous synchronization and low recovery objectives.

Immutable backup protection strengthens cyber-recovery readiness by ensuring recovery points cannot be modified, encrypted, or deleted, even by privileged administrators. As ransomware increasingly targets backup data specifically, protected recovery points have become as critical as the protection strategies built around them. Teradata’s resiliency architecture is designed to extend as cyber threats and recovery requirements evolve.

Additional capabilities including backup and recovery, scheduled data synchronization, and disaster recovery round out a more consistent Enterprise Data Protection experience.

Availability

Privacy capabilities, powered by Anonomatic and delivered by Teradata, are available now for Teradata Cloud on AWS, Azure, and Google Cloud.Native data security capabilities including dynamic data masking, data classification and tagging, and column-level encryption are available on Teradata Cloud across AWS, Azure, and Google Cloud. Dynamic data masking, data classification and tagging are available for Teradata Factory and on-premises deployment options.Teradata Enterprise Data Protection including immutable backup protection is available now on Teradata Cloud across AWS, Azure, and Google Cloud with availability on Teradata Customer Cloud planned in the coming months. 

About Teradata
Teradata empowers enterprises to turn intelligence into autonomous action, grounding AI agents in deep business context and trusted data. As AI agents multiply, Teradata is the context foundation, governance layer, and performance backbone that companies need now. The Teradata Autonomous Knowledge Platform puts AI into production across cloud, on-premises, and hybrid environments.

Forward-Looking Statements
This press release contains “forward-looking statements” about the expectations, beliefs, plans, and intentions relating to Teradata’s privacy, security, and resiliency capabilities. Such statements include statements regarding future product availability, capabilities, and offerings, and expected benefits to Teradata customers. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, Teradata’s results could differ materially from the results expressed or implied by the forward-looking statements made. Teradata undertakes no obligation, and does not intend to update the forward-looking statements. Factors that may cause actual results to differ materially from those in any forward-looking statements include: (i) delays and unexpected difficulties and expenses in executing the planned product capabilities and offerings, (ii) changes in the regulatory landscape related to AI and (iii) uncertainty as to whether customer adoption will justify the investments in the product capabilities and offerings. Further information on factors that could affect Teradata’s financial and other results is included in the filings Teradata makes with the Securities and Exchange Commission from time to time.

The Teradata logo is a trademark, and Teradata is a registered trademark of Teradata Corporation and/or its affiliates in the U.S. and worldwide.

Poly-Anonymization and PII Vault are registered trademarks of Anonomatic, Inc.

MEDIA CONTACT
Jennifer Donahue
Jennifer.Donahue@Teradata.com

View original content:https://www.prnewswire.com/news-releases/teradata-introduces-new-privacy-security-and-resiliency-capabilities-as-ai-forces-change-in-enterprise-data-protection-302913579.html

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Teradata Expands Sovereign AI Across On-Premises and Air-Gapped Cloud Environments

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New Teradata Factory and Teradata Sovereign Cloud on Google Distributed Cloud capabilities give enterprises greater control over where their most sensitive data and AI operate

SAN DIEGO, Oct. 20, 2026 /PRNewswire/ — Teradata (NYSE: TDC) today announced a portfolio of deployment and platform capabilities designed to give governments and enterprises greater control over the data, AI, and technology that power their most critical operations. This includes expanded capabilities for Teradata Factory with AI Studio and the availability of Teradata Sovereign Cloud on Google Distributed Cloud air-gapped environment.

What’s New
Teradata’s portfolio spans two complementary deployment models designed to address different sovereignty requirements.

The expanded capabilities for Teradata Factory with AI Studio bring a unified AI environment to operate on data, vectors, models, and agents directly into customer-controlled on-premises infrastructure. These capabilities include:

Tera, the agentic coworker for enterprise data work, including Tera Harness and Tera Context EngineAgentStack, the complete AI agent development capabilities to build, manage, observe and operate agents through natural language, pro-code, low-code, and Model Context Protocol (MCP) interfacesModel services, which provide machine learning operations and AI model management with pre-integrated model and bring-your-own-model supportData pipelines for ingesting multimodal unstructured data, vector embeddings, vector storage and hybrid search for RAGAnalytics, native notebooks backed by in-database analytics and Teradata’s Elastic Python Compute, built on Ray and Arrow, bring AI to where data lives

Teradata Sovereign Cloud on Google Distributed Cloud air-gapped brings Teradata’s high-performance enterprise-scale analytics into fully isolated environments. Key benefits of running Teradata Sovereign Cloud on Google Distributed Cloud air-gapped include:

Full isolation: Deploy Teradata in an air-gapped environment with no external connectivity— keeping classified and regulated data fully containedSecurity and compliance: Meet stringent regulatory requirements while maintaining complete audit trails and governanceHigh-performance analytics and AI at scale: Run complex queries across billions of rows and petabytes of data with predictable performance

Why it Matters
Research points to growing urgency. According to a 2026 BARC global study of 320 business and IT decision-makers, 62 percent of organizations cite data and AI in core business processes as a key driver of sovereignty requirements. A separate IBM study found that 91 percent of executives say they do not fully understand their organization’s dependencies across AI vendors, models and infrastructure. And Gartner predicts that by 2030, more than 75 percent of enterprises outside the United States will have a digital sovereignty strategy, supported by a sovereign cloud strategy.

As AI moves into mission-critical operations, sovereignty is no longer only about where data resides. Organizations must also consider where AI runs, which models are used, how enterprise information is accessed, who operates the environment, and which external technologies their AI depends on.

This is particularly relevant for governments, defense organizations, regulated industries and critical infrastructure, where data residency, privacy, jurisdiction, operational continuity or national-security requirements can limit the use of traditional public-cloud AI services.

Teradata frames sovereignty across three dimensions: data sovereignty (where data lives and who can access it), operational sovereignty (who controls the environment and whether it can operate independently), and digital sovereignty (which technologies and AI models the organization depends on). An organization can satisfy data residency requirements and still lack full sovereignty if AI processing occurs externally, external administrators can access the environment, or operations stop when public connectivity is unavailable.

Teradata’s sovereign portfolio is designed to address these requirements, bringing enterprise analytics and AI inside the boundaries that organizations control.

The Deployment Portfolio
Teradata Factory and Teradata Sovereign Cloud on Google Distributed Cloud air-gapped address different sovereignty requirements.

Teradata Factory is an integrated hardware and software rack that brings a private enterprise data and AI environment into customer-controlled on-premises infrastructure. It is designed for organizations that require direct physical control over their infrastructure and AI execution.

Teradata Sovereign Cloud on Google Distributed Cloud air-gapped provides a cloud operating model inside a sovereign boundary. The environment has no connection to the public internet and is operated by the customer. It is designed for organizations that need the operational model of cloud within a fully isolated, sovereign environment. Teradata provides the enterprise analytics layer within the air-gapped boundary, enabling organizations to support use cases such as operational reporting, mission analysis, intelligence fusion, training and simulation analytics, and defense logistics and sustainment inside the sovereign boundary.

Together, Teradata Factory and Teradata Sovereign Cloud on Google Distributed Cloud air-gapped support a hybrid approach to sovereign deployment, giving organizations the flexibility to run enterprise analytics and AI inside whichever boundary their requirements demand.

Executive Perspectives
“As AI becomes embedded in mission-critical decisions, organizations can no longer treat sovereignty as a data-location requirement. They need control over where AI runs, which models are used, who can operate the environment, and whether critical workloads can continue if external connectivity disappears. And increasingly, sovereignty is not a single location. It is an architecture that spans public cloud, sovereign cloud, and on-premises infrastructure. Teradata is uniquely built for that reality. We can run in all of those environments, connect them through Teradata Fabric without requiring data to move, and give organizations the freedom to choose the AI models and infrastructure that work for them.”

— Sumeet Arora, Chief Product Officer, Teradata

“Google Distributed Cloud is purpose-built, air-gapped infrastructure that delivers complete technical, operational and software sovereignty. By combining Google Distributed Cloud’s sovereign infrastructure with Teradata’s AI and knowledge capabilities, we are giving enterprise customers in regulated industries the ability to innovate without sacrificing control over their data.”

— Muninder Singh Sambi, VP of Product Management, Google Distributed Cloud

Availability
The expanded Teradata sovereign capabilities for Teradata Factory with AI Studio will be available in Q1 2027. Teradata Sovereign Cloud on Google Distributed Cloud air-gapped is available in Private Preview.

About Teradata
Teradata empowers enterprises to turn intelligence into autonomous action, grounding AI agents in deep business context and trusted data. As AI agents multiply, Teradata is the context foundation, governance layer, and performance backbone that companies need now. The Teradata Autonomous Knowledge Platform puts AI into production across cloud, on-premises, and hybrid environments.

Teradata Forward-Looking Statements
This press release contains “forward-looking statements” about the expectations, beliefs, plans, and intentions relating to Teradata’s sovereign portfolio. Such statements include statements regarding future product availability, capabilities, and offerings, and expected benefits to Teradata customers. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, Teradata’s results could differ materially from the results expressed or implied by the forward-looking statements made. Teradata undertakes no obligation, and does not intend to update the forward-looking statements. Factors that may cause actual results to differ materially from those in any forward-looking statements include: (i) delays and unexpected difficulties and expenses in executing the planned product capabilities and offerings, (ii) changes in the regulatory landscape related to AI and (iii) uncertainty as to whether customer adoption will justify the investments in the product capabilities and offerings. Further information on factors that could affect Teradata’s financial and other results is included in the filings Teradata makes with the Securities and Exchange Commission from time to time.

The Teradata logo is a trademark, and Teradata is a registered trademark of Teradata Corporation and/or its affiliates in the U.S. and worldwide.

MEDIA CONTACT
January Machold
January.Machold@Teradata.com

 

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State Farm® and MIT AgeLab Collaborate to Study What’s Driving Distraction Behind the Wheel

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Drivefulness™ research explores the human side of a nearly $100 billion roadway risk

BLOOMINGTON, Ill., Oct. 20, 2026 /PRNewswire/ — As vehicles become more connected and technology-enabled, the challenge of distracted driving is becoming more complex across the country. The question is no longer simply what distracts drivers, but understanding why people make certain choices behind the wheel and how technology may influence those decisions.

State Farm® and the MIT AgeLab are exploring those questions through a research initiative examining driver attention, distraction, and the behaviors that influence decision-making behind the wheel. Researchers have coined the term “drivefulness” to describe a state in which a driver is safe, aware, appropriately engaged, and ready to respond to the road, while being supported in having the best possible driving experience for them.

The study brings together State Farm’s decades of experience understanding crash risk, driver behavior, and the real-world consequences of distraction with MIT AWARE initiative’s multidisciplinary research expertise in transportation safety, human factors, behavioral science, and how people interact with technology.

Distracted driving carries significant human and economic consequences. According to U.S. Department of Transportation research, distraction was involved in 29% of motor vehicle crashes studied, contributing to more than 10,000 deaths, 1.3 million injuries, and an estimated $98.2 billion in economic costs.

Understanding the relationship among driver attention, distraction, and behaviors could help inform how automakers, organizations, regulators, and insurers approach roadway safety, risk prevention, and the design of future driving experiences.

“Distracted driving is not simply about whether a driver knows what is safe or unsafe. It reflects a much more complex interaction between the driver’s state, the demands of the driving environment, and the technologies that compete for or support their attention,” said Dr. Pnina Gershon of the MIT AgeLab. “With this research, we are looking beyond individual moments of distraction to understand what drivers need to be prepared, attentive, and appropriately engaged during the driving task. That allows us to think differently about safety and about how technology, information, and interventions can support drivers before, during, and after the drive.”

Dr. Gershon is the director of the MIT AWARE initiative and a co-director of the MIT Advanced Vehicle Technology Consortium. With more than two decades of research experience, she leads work at the intersection of driving safety, human behavior, health, and human-centered AI. Her research uses sensing, real-world data, and behavioral analytics to understand human states and to develop technologies and interventions that support safer, more effective interactions between people and increasingly automated systems.

Understanding the behavior behind the risk

Drivers may know distraction is dangerous, but State Farm research shows that knowledge doesn’t always change what happens behind the wheel. Sixty-eight percent of drivers admit to engaging in distracting behaviors while driving, and 44% say they have crashed or experienced a near-crash while doing so.

Perception may be part of the challenge. Sixty-two percent of drivers believe taking their eyes off the road for two or more seconds is safe, even though a two-second glance away doubles crash risk.

“Technology is changing the driving experience, creating new opportunities to better understand and support drivers,” said Jeff Legner, technology executive at State Farm. “The more we learn about how people interact with technology behind the wheel, the better positioned we are to anticipate evolving risks, improve driver experiences and explore new approaches to accident prevention. This research can help turn those insights into meaningful ways to support drivers before, during and after every drive.”

Combining real-world risk with behavioral science

State Farm has worked to address distracted driving from multiple angles, including advocating for stronger hands-free laws, supporting cross-industry safety research and advancing technology that can help drivers better understand their behavior. That work includes telematics-based tools for customers and collaboration with companies such as Cambridge Mobile Telematics to explore how technology and data can help reduce roadway risk. The MIT AgeLab brings deep expertise in understanding the human side of a rapidly changing driving environment.

The collaboration builds on an established research relationship between State Farm and MIT, including State Farm’s participation in the MIT Advanced Vehicle Technology Consortium, which studies how drivers interact with increasingly automated and technology-enabled vehicles.

First findings expected in October
The first phase of the research is focused on establishing a deeper understanding of how people perceive and manage attention behind the wheel.

Findings from the first phase of the drivefulness study are expected later in October 2026, providing an early look at what the research is uncovering about driver attention, distraction and behavior through consumer survey findings.

The findings will help inform the next phase of drivefulness research, beginning in January 2027, on how people, technology and the driving environment can work together to support safer driving.

About State Farm®
For over 100 years, the mission of State Farm has been to help people manage the risks of everyday life, recover from the unexpected and realize their dreams. State Farm Mutual Automobile Insurance Company and its affiliates are the largest providers of auto and home insurance combined in the United States. Its more than 19,200 agent offices and over 62,000 employees serve over 96 million policies and accounts – including auto, fire, life, health, commercial policies and financial services accounts. Commercial auto insurance, along with coverage for renters, business owners, boats and motorcycles, is also available. State Farm Mutual Automobile Insurance Company is the parent of the State Farm family of companies. State Farm is ranked No. 32 on the 2025 Fortune 500 list of largest companies. For more information, please visit http://www.statefarm.com.

About the AWARE initiative at the MIT AgeLab
AWARE is an MIT research initiative focused on developing intelligent vehicle systems that can better understand drivers and support them in real-world conditions. Based at the MIT AgeLab and Center for Transportation & Logistics, AWARE brings together naturalistic driving research, advanced simulation, behavioral science, and artificial intelligence to study how driver state, behavior, and context interact across the driving journey. Its research examines areas such as distraction, fatigue, impairment, workload, automation use, driver monitoring, and human-machine interaction, with the goal of moving beyond simply detecting driver behavior toward systems that can sense, interpret, respond, and promote safer and more appropriate driver engagement. Through this work, AWARE is building the evidence and methods needed to support the next generation of adaptive, human-centered mobility technologies. For more information about AWARE, visit https://ctl.mit.edu/aware-initiative, and about the AgeLab, visit https://agelab.mit.edu/.

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