What the changes say
- Leverage peaked at 2.91x and remained 2.52x at year-end, while borrowing capacity increased to $1.5 billion.
- Renewal exposure is quantified: approximately 40% of customer contracts renew in 2026, 30% in 2027, and 30% in 2028.
- Security Incident disclosures emphasize two unresolved subrogation cases and continuing effects on confidence, demand, retention, and recruiting.
- The standalone generative-AI risk was dropped, but AI expertise is now included in hiring and retention risk.
What changed since the prior 10-K
New
- NewStrategic Risks
Because competition for highly qualified personnel is intense, we might not be able to attract and retain key personnel needed to support our planned growth
Hiring risk now specifically includes AI expertise and expansion in India, while weaker stock-based compensation could require dilutive new awards.
- NewStrategic Risks
The market for software and services for the social impact community might not grow as expected, which would negatively impact the growth of our business
Growth depends on social-impact organizations adopting integrated software instead of legacy, internal, or less automated alternatives requiring significant investment.
- NewStrategic Risks
Our existing customers may not continue to adopt, or renew their subscriptions for, our solutions and services, which could have a material adverse effect on our business, results of operations and financial liquidity
Renewal risk is quantified across 2026–2028, with extended contracts potentially concentrating renewals later and reducing repricing opportunities.
- NewOperational Risks
A material example of the foregoing risks is the ransomware attack that in May 2020 during which a cybercriminal removed a copy of a subset of data from our self-hosted environment (the “Security Incident”)
The 2020 ransomware incident still has two active, unresolved insurance subrogation cases after customer reimbursement and class-action matters were resolved.
- NewOperational Risks
Furthermore, significant management time and Company resources have been, and are expected to continue to be, devoted to the Security Incident
Continuing management and resource demands from the Security Incident could reduce customer confidence, demand, retention, growth opportunities, and recruiting.
- NewOperational Risks
consuming, involve significant technical complexity and risk, may divert our resources from new features and products and may ultimately not be effective
Meeting PCI DSS and other payment-network requirements is costly and complex, with noncompliance risking fines, liability, reputational damage, and transaction-processing limits.
- NewFinancial Risks
We have maintained an elevated leverage position, primarily due to stock repurchases, and we may increase our leverage in the future in connection with acquisitions or other business purposes, which could adversely impact our business and financial performance
Stock repurchases and Security Incident expenses kept leverage elevated at 2.52x at December 31, 2025, after a 2.91x peak.
- NewFinancial Risks
If we incur additional debt, these risks may intensify. Our ability to meet our debt service obligations will depend upon our future performance, which will be subject to the financial, business and other factors affecting our operations, many of which are beyond our control
Additional borrowing could breach covenants under the expanded $1.5 billion 2024 Credit Facilities and trigger immediate repayment obligations.
Dropped
- DroppedStrategic Risks
To meet our objectives successfully, we must attract and retain highly qualified personnel with specialized skill sets. If we are unable to attract and retain suitably qualified management, there could be a material adverse impact on our business
- DroppedStrategic Risks
The market for software and services for the social impact community might not grow and the organizations in that community might not continue to adopt, or renew their subscriptions for, our solutions and services
General difficulty attracting and retaining qualified management and the effect of falling stock price on equity compensation.
- DroppedStrategic Risks
We are incorporating generative AI technology into certain of our solutions and services. This technology is new and developing, and while we aim to adopt known best practices, it may result in operational, financial and reputational harm and other adverse consequences to our business
Broad risk that social-impact organizations may not adopt or renew Blackbaud’s solutions and services.
- DroppedOperational Risks
As previously disclosed, on July 16, 2020, we contacted certain customers to inform them about the Security Incident
- DroppedOperational Risks
See Note 11 to our consolidated financial statements included in this report for a more detailed description of the Security Incident and related matters
Generative-AI features could create regulatory, litigation, ethical, operational, financial, and reputational harm.
- DroppedOperational Risks
In addition, any legislative or regulatory changes adopted in reaction to the Security Incident or other companies’ data breaches could require us to make modifications to the operation of our business that could have an adverse effect and/or increase or accelerate our compliance costs
- DroppedFinancial Risks
We significantly increased our leverage in connection with stock repurchases, and may increase our leverage in the future in connection with acquisitions, Security Incident costs or other business purposes, which could adversely impact our business and financial performance
- DroppedLegal and Compliance Risks
trademark, copyright and trade secret laws, as well as nondisclosure agreements, each of which affords only limited protection
Reworded
- 88% rewrittenStrategic Risks
Changes in the U.S. federal or state governmental grant, award or other funding programs could negatively impact the operations of our nonprofit customers, which could have a material adverse effect on our business, results of operations, financial condition and liquidity
No substantive change; the discussion of government funding dependence and nonprofit customer budgets is unchanged.
Was: Changes in the US federal or state governmental grant, award or other funding programs could negatively impact the operations of our nonprofit customers, which could have a material adverse effect on our business, results of operations, financial condition and liquidity
- 86% rewrittenLegal and Compliance Risks
We rely upon trademark, copyright, patent and trade secret laws to protect our proprietary rights, which might not provide us with adequate protection
The risk now highlights weaker protection in non-U.S. jurisdictions and adds card-charge restrictions and other regulations as threats.
- 66% rewrittenLegal and Compliance Risks
Changes in our effective tax rate and additional tax liabilities, including those related to our stock repurchases, and global tax developments may impact our financial results
No substantive change; the discussion of effective tax rates, tax liabilities, and global tax developments is unchanged.
Was: Changes in our effective tax rate and additional tax liabilities and global tax developments may impact our financial results
- 37% rewrittenFinancial Risks
We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term stockholder value. Stock repurchases could also increase the volatility of the trading price of our stock and will diminish our cash reserves and increase our debt
No substantive change; the discussion of repurchase authorization, stock-price volatility, and shareholder value is unchanged.
- 37% rewrittenOperational Risks
Material defects or errors in the software we use to deliver our services could harm our reputation, result in significant costs to us and impair our ability to sell our services
No substantive change; the discussion of software defects, correction costs, and integration-related difficulty is unchanged.
- 32% rewrittenLegal and Compliance Risks
Provisions in our organizational documents, certain officer compensation arrangements and Delaware law may delay or prevent an acquisition or change of control of our Company that could be deemed beneficial to our stockholders
No substantive change; the discussion of Delaware law, organizational documents, and officer arrangements remains unchanged.
- 22% rewrittenFinancial Risks
Our balance sheet includes significant amounts of goodwill and intangible assets. The impairment of a significant portion of these assets, such as the EVERFI impairment charges, could negatively affect our operating results
Goodwill remained $1.1 billion, while intangible assets declined from $132.9 million at December 31, 2024 to $106.7 million at December 31, 2025.
All 31 risk factors
Headings as the filing states them, in filing order.
Strategic Risks
- 01Our failure to compete successfully, including through technology innovations or new and improved solutions, could cause our revenue or market share to decline
- 02Because competition for highly qualified personnel is intense, we might not be able to attract and retain key personnel needed to support our planned growthNew
- 03The market for software and services for the social impact community might not grow as expected, which would negatively impact the growth of our businessNew
- 04Our existing customers may not continue to adopt, or renew their subscriptions for, our solutions and services, which could have a material adverse effect on our business, results of operations and financial liquidityNew
- 05Changes in the U.S. federal or state governmental grant, award or other funding programs could negatively impact the operations of our nonprofit customers, which could have a material adverse effect on our business, results of operations, financial condition and liquidity88% rewritten
- 06If we do not successfully address the risks inherent in the expansion of our international operations, including in India, our business could suffer
- 07Unfavorable media coverage related to peer-to-peer fundraising campaigns on our social platforms could negatively impact our business
- 08Acquisitions could be difficult to consummate and integrate into our operations, and they could disrupt our business, dilute stockholder value or impair our financial results
- 09For example, following our acquisition of EVERFI, Inc ("EVERFI") in December 2021, we were unable to realize the anticipated returns on our investment prior to our disposition of the business in December 2024 due to certain of the reasons listed above
- 10A reduction in the growth or amount of charitable giving due to deteriorating general economic conditions, a recession or otherwise could adversely affect our operating results and financial condition
- 11Our failure to obtain licenses for, or our use of, third-party technologies could harm our business
Operational Risks
- 12A material example of the foregoing risks is the ransomware attack that in May 2020 during which a cybercriminal removed a copy of a subset of data from our self-hosted environment (the “Security Incident”)New
- 13Furthermore, significant management time and Company resources have been, and are expected to continue to be, devoted to the Security IncidentNew
- 14Climate change and other natural disasters, new regulations and standards and climate-related goals have impacted, and may in the future impact, our operations and financial performance
- 15New regulations and standards relating to public disclosure, including proposed new rules related to climate change, could adversely impose significant costs on us to comply with such regulations
- 16Defects, delays or interruptions in our cloud solutions and hosting services could diminish demand for these services and subject us to substantial liability
- 17Material defects or errors in the software we use to deliver our services could harm our reputation, result in significant costs to us and impair our ability to sell our services37% rewritten
- 18consuming, involve significant technical complexity and risk, may divert our resources from new features and products and may ultimately not be effectiveNew
Financial Risks
- 19Because a significant portion of our revenue is recognized over time on a ratable basis over the contract term, downturns in sales may not be immediately reflected in our revenue
- 20We have maintained an elevated leverage position, primarily due to stock repurchases, and we may increase our leverage in the future in connection with acquisitions or other business purposes, which could adversely impact our business and financial performanceNew
- 21If we incur additional debt, these risks may intensify. Our ability to meet our debt service obligations will depend upon our future performance, which will be subject to the financial, business and other factors affecting our operations, many of which are beyond our controlNew
- 22Our balance sheet includes significant amounts of goodwill and intangible assets. The impairment of a significant portion of these assets, such as the EVERFI impairment charges, could negatively affect our operating results22% rewritten
- 23Restrictions in our credit facility limit certain of our activities, including dividend payments, stock repurchases and acquisitions
- 24We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term stockholder value. Stock repurchases could also increase the volatility of the trading price of our stock and will diminish our cash reserves and increase our debt37% rewritten
- 25We have recorded significant deferred tax assets, and we might never realize their full value, which would result in a charge against our earnings
Legal and Compliance Risks
- 26Privacy and data protection concerns, including evolving domestic and international government regulation in the area of consumer data privacy or data protection, could adversely affect our business and operating results
- 27Claims that we or our technologies infringe upon the intellectual property or other proprietary rights of a third party may require us to incur significant costs, enter into royalty or licensing agreements or develop or license substitute technology
- 28Our solutions utilize open source software, which may subject us to litigation, require us to re-engineer our solutions, or otherwise divert resources away from our development efforts
- 29We rely upon trademark, copyright, patent and trade secret laws to protect our proprietary rights, which might not provide us with adequate protection86% rewritten
- 30Provisions in our organizational documents, certain officer compensation arrangements and Delaware law may delay or prevent an acquisition or change of control of our Company that could be deemed beneficial to our stockholders32% rewritten
- 31Changes in our effective tax rate and additional tax liabilities, including those related to our stock repurchases, and global tax developments may impact our financial results66% rewritten
Other Blackbaud 10-Ks
- FY2024 10-K risk factors31 risks
Legal and financial fallout from the 2020 Security Incident remains a material drag, costing $13.7 million in 2024.
Filed Feb 21, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.