Blackbaud, Inc.

Filing receipts

“Cost of revenue decreased by $0.2 million, or 0.2%, during the three months ended March 31, 2026, when compared to the same period in 2025, driven primarily by the following: - Decrease in third-party contractor costs of $1.7 million primarily related to transition of work to employees in our GCC, decreased use of outside contractors and completion of prior year investments - Decrease in compensation costs of $1.5 million primarily due to a shift in resources from supporting cost of revenue to research and development + Increase in direct costs of revenue of $2.3 million primarily due to an increase in the volume of transactions for which we process payments and data center costs Gross marg...”

“The increases in dollars and as a percentage of revenue were primarily driven by the following: + Increase in compensation costs of $3.7 million primarily due to a shift in resources from supporting cost of revenue to research and development, merit-based salary increases and increased engineering headcount to support our innovation focus - Decrease in third-party contractor costs of $1.9 million primarily related to transition of work to employees in our GCC and prior year investments ramping down, partially offset by an increase in investment in AI innovation Not included in research and development expense for the three months ended March 31, 2026 and 2025 were $12.2 million and $12.4 mi...”

“costs of revenue of $2.3 million primarily due to an increase in the volume of transactions for which we process payments and data center costs Gross margin increased by 180 basis points for the three months ended March 31, 2026, when compared to the same period in 2025, due to the increase in revenue combined with the decrease in cost of revenue.”