Blow out is two words when it functions as a verb (e.g., blow out the candles). It is one word, blowout, when it functions as a noun. The noun may refer to many things, including (1) a sudden rupture, (2) a sudden escape of gas, (3) a lopsided victory in sports, (4) a large party, (5) massive spending, (6) massive profits, and (7) a serious fight or argument. Blowout also works as an adjective in phrases such as blowout victory and blowout party.
British and Australian publications often use blow-out instead of blowout, but the unhyphenated compound is gaining ground.
In the following examples, blowout is one word because it functions as a noun or adjective:
Experts often liken it to a blowout in a car tyre. [Daily Mail]
There was no blowout party full of 13-year-olds doing the electric slide. [Washington Post]
In April, a blowout of a natural gas well in Pennsylvania spewed thousands of gallons of drilling fluid. [Vancouver Sun]
But a funny thing happened on the way to the Cubs’ blowout loss. [Chicago Sun-Times]
And in these examples, blow out is two words because it functions as a verb:
Long gone are the days when Foran would blow out the candles on his cake and then head for the nearest nightclub. [Australian]
All Broady could do was blow out his cheeks and solemnly shake his head. [Guardian]
Toronto went on to blow out the Yankees 16-7. [Winnipeg Free Press]