Upland Software (UPLD) FY Conference Summary Company Overview - Upland Software has undergone a significant business transformation over the last eighteen months, focusing on divesting underperforming assets and concentrating on markets with strong competitive advantages, high margins, and growth rates [4][20] - The company has built an offshore development center in India to enhance product innovation and has AI-enabled its product portfolio [4][6] Financial Performance - Upland has repaid $242 million of debt since the beginning of the previous year, reducing net debt leverage to 3.9 times, with a target of 3.7 times by year-end [5] - Adjusted EBITDA margins have improved from 20% last year to 27% this year, with expectations to exceed 30% in the back half of the year [6][24] - The company reported approximately $200 million in annual total core revenue, growing at over 2.5% in the latter half of the year [7][19] - 93% of Upland's revenue is recurring, with a net dollar retention rate of 99% [9][15] Market Position and Growth - Upland operates in an $11 billion market that is growing at 15% annually [7][16] - The company aims for long-term organic growth in the mid to upper single digits [17][31] - Upland's products are highly rated and serve a diverse range of industries, including technology, financial services, healthcare, and manufacturing [16] Product and Customer Insights - Upland's AI-powered knowledge and content management software provides real ROI for enterprise customers [6][11] - Notable customer success stories include significant cost savings achieved through Upland's products, such as a global payroll processor saving $4 million annually and a top-tier US bank saving $6 million [12][13] - The average annual recurring revenue (ARR) for Upland's 1,100 enterprise accounts is approximately $137,000, representing nearly 90% of recurring revenue [15] Strategic Focus - The company is shifting from an acquisition-driven growth model to a focus on organic growth and product improvement [30][31] - Upland is enhancing its sales strategy by moving back to a field sales model, hiring salespeople with niche market experience [35][36] - Marketing efforts have been centralized while also incorporating digital marketing strategies to improve lead generation [38] Debt Refinancing and Future Outlook - Upland has successfully refinanced its debt, extending maturity by six years and adding a $30 million undrawn revolver for liquidity [5][41] - The management team is focused on maintaining a simple, product-driven business model while continuing to pay down debt [31][32] - The company anticipates that reported numbers will improve as divestitures and sunset assets are behind them, leading to increased visibility and interest from investors [45]

Core Insights - Upland Software reported Q2 2025 results reflecting a strategic shift towards core operations, with GAAP revenue of $53.4 million slightly exceeding analyst expectations of $53.2 million, while non-GAAP EPS was $0.15, marking a year-over-year revenue decline of 22.9% [1][2][5] - The company is focusing on high-margin core businesses, resulting in a significant drop in free cash flow to $2.7 million from $5.2 million a year earlier [1][2][6] Financial Performance - GAAP revenue for Q2 2025 was $53.4 million, down from $69.3 million in Q2 2024, a decrease of 22.9% [2][5] - Non-GAAP EPS decreased by 21.1% year-over-year, from $0.19 in Q2 2024 to $0.15 in Q2 2025 [2] - Adjusted EBITDA remained stable at $13.6 million, with an improved margin rising from 20% in Q2 2024 to 25% in Q2 2025 [2][6] - Free cash flow declined by 48.9% year-over-year, from $5.2 million to $2.7 million [2][6] Business Strategy - Upland Software is concentrating on product families where it has a competitive edge, particularly through AI integration across its applications [3][4] - The company aims to drive product innovation, customer retention, and maintain a stable recurring revenue model, with a focus on cross-selling and new account growth [4][10] Customer Metrics - Upland added 100 new customers, including 12 major accounts, and expanded relationships with 263 existing clients, although this growth slightly lags behind earlier in the year [9] - The company reported a net dollar retention rate of 96% as of December 31, 2024, with a pro forma figure of 99% for the current business [9][10] Future Guidance - For Q3 2025, Upland expects total revenue between $46.8 million and $52.8 million, with adjusted EBITDA projected between $14.5 million and $17.5 million [12] - For FY2025, the company forecasts total revenue of $211.8 million to $223.8 million, with adjusted EBITDA expected in the range of $55.8 million to $61.8 million, indicating a projected adjusted EBITDA margin increase to 27% [13]

Table of Contents For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-36720 UPLAND SOFTWARE, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | Title of each class | Trading Symbol | Name of each exchange on which registered | | --- | - ...

Financial Data and Key Metrics Changes - In Q2 2025, the company beat its revenue and adjusted EBITDA guidance midpoints, achieving an adjusted EBITDA of $13.6 million, resulting in an adjusted EBITDA margin of 25%, a 500 basis point increase from 20% in 2024 [6][7][16] - Free cash flow for Q2 remained strong at $2.7 million, impacted by approximately $7 million of one-time divestiture-related expenses [8][17] - The company has paid down $242 million of debt since the beginning of last year and extended the maturity of its debt to July 2031 [13][14] Business Line Data and Key Metrics Changes - The company welcomed 100 new customers in Q2, including 12 major customers, and expanded relationships with 263 existing customers, with 28 major expansions [9][10] - The growth rate of retained core assets has turned positive, indicating a meaningful milestone for the business [7] Market Data and Key Metrics Changes - The company expects core organic growth to improve to approximately 3% in 2025, assuming no macro disruptions from tariffs [20] - For Q3 2025, reported total revenue is expected to be between $46.8 million and $52.8 million, reflecting a year-over-year decline primarily due to divestitures [20][21] Company Strategy and Development Direction - The company has streamlined its product portfolio, focusing on markets with consistent growth and higher margins, while AI enabling its product offerings [13][14] - The company aims to continue deleveraging and driving organic growth, with potential for M&A opportunities in the future once the business stabilizes [35][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment, noting improvements in marketing sourced bookings and the potential for AI to act as a tailwind for the business [38] - The company is focused on enhancing its sales execution and pipeline generation, with ongoing investments in demand generation [48] Other Important Information - The company successfully completed refinancing of its debt, establishing a new $30 million revolving credit facility, which strengthens its balance sheet and enhances liquidity [13][19] - The company earned 68 badges in G2's summer 2025 reports, reflecting strong performance across its product portfolio [10][12] Q&A Session Summary Question: Why is private credit the right option versus other facilities? - The company moved to private credit due to the size of its current term facility being below the range for the TLD market, and it is excited about the partnership with SoundPoint [26][27] Question: What is the plan for excess cash flow over the next couple of years? - The company plans to direct cash flow toward deleveraging rather than M&A at this point [28] Question: What products are selling well in the current macro environment? - The company is seeing opportunities in large enterprises, particularly with products like Upland Right Answers and Upland BAI Insight, which are integral to larger enterprise AI implementations [30][31] Question: Is there a future for M&A activity? - While the focus is currently on organic growth and deleveraging, the company may consider M&A opportunities in the future once the business stabilizes [35][36] Question: How is the demand environment and pipeline build? - The demand environment appears fine, with increasing marketing sourced bookings and investments in demand generation showing positive results [38] Question: What drove the change in free cash flow guidance? - The increase in free cash flow guidance was due to lower divestiture-related expenses, cash from the sale of swaps, and reduced tax liabilities [41][42] Question: How much revenue in Q2 was from divested businesses? - Revenue from divested businesses in Q2 was approximately $4 million to $5 million [43] Question: What are the priorities for accelerating top-line growth? - The company has focused on AI enabling its product portfolio and improving sales execution, particularly in outbound lead generation [48]

EXHIBIT 99.1 Upland Software Reports Second Quarter 2025 Financial Results July 31, 2025, 09:00 AM Eastern Standard Time AUSTIN, Texas--(BUSINESS WIRE)-- Upland Software, Inc. (Nasdaq: UPLD), a leader in AI-powered knowledge and content management software, today announced its financial and operating results for the second quarter 2025 and issued guidance for its third quarter and full year of 2025. Second Quarter 2025 Financial Highlights "With our Q2 results, we are pleased to report a return to positive ...

Financial Data and Key Metrics Changes - Q1 adjusted EBITDA was $13.1 million, resulting in an adjusted EBITDA margin of 21%, up from 20% reported in 2024 [6][16] - Free cash flow for Q1 was $7.9 million, which was higher than expected [7] - The company anticipates adjusted EBITDA margins to increase to 26% in Q2 and further expand in the second half of 2025 [12][20] Business Line Data and Key Metrics Changes - The core organic growth rate in Q1 was flat, but is expected to move to 2% in Q2, with further increases anticipated throughout 2025 [6][11] - The company welcomed 107 new customers in Q1, including 19 major customers, and expanded relationships with 245 existing customers [7][8] Market Data and Key Metrics Changes - The divestiture of mobile messaging product lines lowered the 2025 revenue guidance midpoint by $25 million but had no impact on adjusted EBITDA guidance [11][18] - The net dollar retention rate for the core business as of December 31, 2024, would have been 99% excluding divestitures, compared to the reported 96% [11] Company Strategy and Development Direction - The company is focusing on markets with the strongest competitive advantage, higher margins, and higher growth rates [11][27] - The divestitures are part of a strategy to streamline operations and enhance focus on core products [11][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about positive core organic growth starting in Q2 and increasing throughout the year [12][27] - The company has seen improvements in digital marketing capabilities, contributing to increased marketing sourced bookings [36][38] Other Important Information - The company paid down $34.2 million of debt in Q1 2025, with total debt paydowns in 2025 reaching approximately $34.2 million [13][17] - The average customer lifetime for the core business is now over eight years, indicating strong customer retention [47] Q&A Session Summary Question: How should the market view the go-to-market strategy following the termination of the Chief Sales Officer? - Management noted significant progress in the go-to-market strategy, emphasizing a focus on markets with competitive advantages and realigning sales with product group general managers [27] Question: Should additional divestitures be expected as the company streamlines towards growth? - Management indicated that no material additional divestitures are anticipated, as the repositioning of the business is largely complete [29] Question: What is driving the faster organic growth and improving margins? - The primary driver of improvement is the focus on high-margin, high-growth products, along with investments in digital marketing and product enhancements [34][36] Question: When was the full build-out of the India development center completed, and what benefits have been seen? - The full build-out was completed at the end of the previous year, with increased productivity and throughput being observed [42][43] Question: What is the outlook for free cash flow and any one-time costs related to divestitures? - The company expects $20 million in free cash flow for the year, excluding one-time divestiture-related expenses [45] Question: What is the visibility into top-line acceleration and pipeline metrics? - Management reported strong visibility with 93% of revenue being recurring and a net dollar retention rate of 99%, indicating confidence in future growth [47][49]

Financial Data and Key Metrics Changes - Q1 adjusted EBITDA was $13.1 million, resulting in an adjusted EBITDA margin of 21%, up from 20% in 2024 [6][16] - Free cash flow for Q1 was $7.9 million, which was higher than expected [7] - The company anticipates adjusted EBITDA margins to increase to 26% in Q2 and further expand in the second half of 2025 [6][20] Business Line Data and Key Metrics Changes - The core organic growth rate in Q1 was flat, but is expected to improve to 2% in Q2, with further increases anticipated throughout 2025 [6][12] - The company welcomed 107 new customers in Q1, including 19 major customers, and expanded relationships with 245 existing customers [7][8] Market Data and Key Metrics Changes - The divestiture of mobile messaging product lines lowered the 2025 revenue guidance midpoint by $25 million but did not impact adjusted EBITDA guidance [12][18] - The net dollar retention rate for the core business as of December 31, 2024, would have been 99% excluding divestitures, compared to the reported 96% [12] Company Strategy and Development Direction - The company is focusing on markets with the strongest competitive advantage, higher margins, and higher growth rates [27] - The divestitures are part of a strategy to streamline operations and enhance focus on core products [29] - The company has realigned sales with general managers of product groups, eliminating the need for centralized sales management [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about positive growth momentum, projecting a core organic growth rate of 2% in Q2 and further increases in the second half of 2025 [6][12] - The company has seen improvements in digital marketing capabilities, contributing to increased marketing-sourced bookings [35] - Management noted strong visibility in revenue, with 93% being recurring and an average customer lifetime of nearly nine years [45] Other Important Information - The company paid down $34.2 million of debt in Q1 2025, with total paydowns in 2025 reaching approximately $34.2 million, in addition to $189 million in 2024 [14][17] - The full year 2025 adjusted EBITDA is expected to be between $55 million and $64 million, representing a 7% increase from 2024 [19][20] Q&A Session Summary Question: How should the market view the go-to-market strategy following the termination of the Chief Sales Officer? - Management highlighted progress in the go-to-market strategy, focusing on competitive advantages and higher growth rates, with a positive core organic growth rate expected [27] Question: Should additional divestitures be expected as the company streamlines towards growth? - Management indicated that substantial repositioning has been completed, and no material additional divestitures are anticipated at this time [29] Question: What is driving the faster organic growth and improving margins? - Management attributed the improvements primarily to focusing on high-margin, high-growth products and enhancing digital marketing capabilities [35] Question: When was the full build-out of the India development center completed, and when will benefits be seen? - The full build-out was completed at the end of the previous year, with increased productivity expected from ongoing R&D investments [42] Question: What is the outlook for free cash flow and any one-time costs related to divestitures? - Management confirmed a revised free cash flow outlook of $20 million, excluding one-time divestiture-related expenses [43] Question: What is the visibility into top-line acceleration and pipeline metrics? - Management reported strong visibility with a high net dollar retention rate and an average contract term of two years, indicating confidence in exceeding the 2% growth target [45]

Revenue Performance - Upland Software's revenue grew from $149.9 million in 2018 to $274.8 million in 2024, representing a compound annual growth rate of 11%[120]. - For the three-month period ended March 31, 2025, total revenue was $63.655 million, a decrease from $70.736 million in the same period of 2024[129]. - Total revenue for the three months ended March 31, 2025, was $63.7 million, a decrease of 10% from $70.7 million in the same period of 2024[139]. - Upland's subscription and support revenue from Sunset Assets was $4.481 million for the three-month period ended March 31, 2025[129]. - Subscription and support revenue decreased by $6.4 million, primarily due to a decline of $2.5 million from Sunset Assets and $3.9 million from divested businesses[139]. Profitability and Expenses - Adjusted EBITDA for the three-month period ended March 31, 2025, was $13.082 million, compared to $13.103 million in the same period of 2024[132]. - Total cost of revenue was $18.0 million, down 14% from $21.0 million in the prior year, resulting in a gross profit of $45.6 million, which is 72% of total revenue[140]. - Operating expenses totaled $46.7 million, a significant decrease from $141.3 million in the previous year, leading to a loss from operations of $1.1 million[140]. - Sales and marketing expenses decreased by 19% to $13.8 million, representing 22% of total revenue[144]. - Research and development expenses were $11.5 million, a decrease of 7% from $12.5 million, maintaining 18% of total revenue[146]. - General and administrative expenses decreased by 12% to $11.6 million, accounting for 18% of total revenue[148]. - Depreciation and amortization expenses were $8.0 million, down 30% from $11.4 million, primarily due to the decline in amortization from intangible assets associated with divested product lines[150]. - Divestiture-related expenses amounted to $1.7 million, representing 2% of total revenue, with no such expenses recorded in the prior year[152]. - Net loss attributable to common shareholders was $27.3 million, compared to a net loss of $97.5 million in the same period last year[139]. - The company reported a net loss of $25.848 million for the three-month period ended March 31, 2025, compared to a net loss of $96.130 million in the same period of 2024[132]. Cash Flow and Financial Position - Cash provided by operating activities was $8.3 million for the three months ended March 31, 2025, an increase of approximately $3.2 million from $5.1 million in 2024[165]. - Cash provided by investing activities was $3.8 million for the three months ended March 31, 2025, compared to cash used of $(0.2) million in 2024[168]. - Cash used in financing activities increased to $(34.7) million for the three months ended March 31, 2025, compared to $(9.6) million in 2024, primarily due to increased payments on Term Loans[170]. - As of March 31, 2025, the company had $33.7 million in cash and cash equivalents, down from $57.1 million as of December 31, 2024[160]. - The company had a working capital deficit of $17.1 million as of March 31, 2025, compared to a deficit of $2.0 million as of December 31, 2024[162]. Strategic Initiatives - Upland plans to pursue acquisitions of complementary technologies and businesses to expand its product library and market access[121]. - The company aims to incorporate AI functionality into its products to enhance customer experiences and drive measurable ROI[119]. - Upland's management emphasizes the importance of maintaining relationships with third parties and adapting to changing market conditions[122]. Foreign Operations and Currency Impact - Foreign revenue as a percentage of total revenue was 29% for the three months ended March 31, 2025, compared to 30% for the same period in 2024[120]. - The effect of a hypothetical 10% change in foreign currency exchange rates could have resulted in a change in revenue of $1.4 million for the three months ended March 31, 2025[181]. - The company incurs operating expenses in various foreign currencies, including Australian dollars, Canadian dollars, Indian Rupees, British pounds, Euros, and Israeli New Shekels[181]. - The translation adjustments of non-financial assets and liabilities of foreign subsidiaries are recorded in accumulated other comprehensive income (loss)[182]. - Foreign currency gains (losses) from intercompany loans used to fund acquisitions of foreign subsidiaries are recognized as a component of accumulated other comprehensive income (loss)[182]. Interest and Other Financial Metrics - Net interest income improved to $(2.4) million for the three months ended March 31, 2025, a 51% decrease from $(5.0) million in the same period of 2024[155]. - Total other expense increased by 419% to $(26.1) million for the three months ended March 31, 2025, compared to $(5.0) million in 2024[154]. - Benefit from income taxes increased by 146% to $0.5 million for the three months ended March 31, 2025, compared to $1.3 million in 2024[157]. - The effective cash interest rate for the three months ended March 31, 2025, was 5.9%[179]. - As of March 31, 2025, the outstanding balance of Term Loans is $259.4 million, maturing on August 6, 2026[180]. - A hypothetical change of 100 basis points in variable rate debt could have resulted in a $0.1 million increase in total interest expense for the three months ended March 31, 2025[180].

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) [Q1 2025 Financial Performance](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) In Q1 2025, Upland's total revenue decreased by 10% year-over-year to $63.7 million, though it surpassed internal guidance. The company significantly narrowed its GAAP net loss to $25.8 million from $96.1 million in the prior year. Adjusted EBITDA remained stable at $13.1 million, with the margin improving from 19% to 21% of total revenue. Free cash flow saw a notable increase to $7.9 million - The company exceeded its guidance for **Revenue** and **Adjusted EBITDA** in Q1 2025[3](index=3&type=chunk) | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $63.7M | $70.7M | -10% | | Subscription & Support Revenue | $60.2M | $67.1M | -10% | | GAAP Net Loss | ($25.8M) | ($96.1M) | +73.2% | | GAAP Net Loss per Share | ($0.97) | ($3.37) | +71.2% | | Adjusted EBITDA | $13.1M | $13.1M | 0% | | Adjusted EBITDA Margin | 21% | 19% | +2 p.p. | | GAAP Operating Cash Flow | $8.3M | $5.1M | +62.7% | | Free Cash Flow | $7.9M | $4.9M | +61.2% | - Cash on hand was **$34 million** at the end of Q1 2025 after making **$34 million** in debt paydowns during the quarter[4](index=4&type=chunk) [Q1 2025 Business & Operational Highlights](index=1&type=section&id=First%20Quarter%20Business%20Highlights) During the first quarter, Upland secured 107 new customers and expanded relationships with 245 existing ones. The company advanced its AI-powered portfolio with the launch of Panviva Sidekick and Adestra Audiences. Subsequent to the quarter's end, Upland divested its mobile messaging product lines to sharpen its focus on higher-margin, higher-growth markets, a move that would have improved its Core Net Dollar Retention Rate to 99% - Acquired **107 new customers** (19 major) and expanded relationships with **245 existing customers** (26 major expansions)[3](index=3&type=chunk) - Subsequent to Q1, the company sold its mobile messaging product lines to focus on markets with stronger competitive advantage, higher margins, and higher growth[9](index=9&type=chunk) - Excluding the divestiture, the Net Dollar Retention Rate for the Core business as of December 31, 2024, would have been **99%**, compared to the reported **96%**[9](index=9&type=chunk) - Key product launches included Panviva Sidekick for AI-powered agent guidance and Adestra Audiences for advanced email marketing analytics[9](index=9&type=chunk) - Upland's solutions earned **76 badges** in G2's Spring 2025 market reports, with notable recognition for AI-enabled products like Upland BA Insight and Upland InterFAX[9](index=9&type=chunk) [Financial Outlook](index=2&type=section&id=Business%20Outlook) [Q2 2025 Guidance](index=2&type=section&id=Q2%202025%20Guidance) For the second quarter of 2025, Upland anticipates total revenue between $50.3 million and $56.3 million, reflecting a 23% year-over-year decline at the midpoint, primarily due to a recent divestiture. Despite the revenue drop, Adjusted EBITDA is expected to be flat year-over-year at $12.1 million to $15.1 million, with the margin forecast to expand significantly to 26% from 20% in Q2 2024 | Metric | Q2 2025 Guidance (Midpoint) | YoY Change (Midpoint) | | :--- | :--- | :--- | | Total Revenue | $53.3M | -23% | | Subscription & Support Revenue | $50.0M | - | | Adjusted EBITDA | $13.6M | 0% | | Adjusted EBITDA Margin | 26% | +6 p.p. | [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) For the full year 2025, Upland projects total revenue between $209.5 million and $227.5 million, a 20% decline at the midpoint from 2024, influenced by the sale of its mobile messaging lines. However, the company expects a 7% increase in Adjusted EBITDA to a range of $55.0 million to $64.0 million. This reflects a significant anticipated improvement in the full-year Adjusted EBITDA margin to 27% from 20% in the previous year - The sale of mobile messaging product lines reduced the full-year 2025 revenue guidance by approximately **$25.0 million** but did not impact the Adjusted EBITDA guidance[5](index=5&type=chunk) | Metric | Full Year 2025 Guidance (Midpoint) | YoY Change (Midpoint) | | :--- | :--- | :--- | | Total Revenue | $218.5M | -20% | | Subscription & Support Revenue | $205.0M | - | | Adjusted EBITDA | $59.5M | +7% | | Adjusted EBITDA Margin | 27% | +7 p.p. | [Financial Statements](index=7&type=section&id=Financial%20Statements) [Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, total revenue was $63.7 million, a decrease from $70.7 million in Q1 2024. The company reported a net loss of $25.8 million, which was a substantial improvement from the $96.1 million loss in the prior-year period. The prior year's loss was heavily impacted by an $87.2 million goodwill impairment charge, which did not recur. The current quarter's loss includes a $23.5 million loss on the divestiture of businesses | (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $63,655 | $70,736 | | Gross Profit | $45,607 | $49,687 | | Loss from Operations | ($1,052) | ($91,641) | | Impairment of Goodwill | $0 | $87,227 | | Loss on Divestitures | ($23,457) | $0 | | Net Loss | ($25,848) | ($96,130) | | Net Loss per Share | ($0.97) | ($3.37) | [Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, Upland's total assets were $457.0 million, down from $529.5 million at year-end 2024. This decrease was driven by a reduction in cash to $33.7 million (from $56.4 million) following debt repayments, and a decrease in intangible assets. Total liabilities also decreased to $370.1 million from $424.6 million, primarily due to a reduction in notes payable | (in thousands) | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $33,705 | $56,426 | | Total Assets | $456,972 | $529,522 | | Notes Payable (Current & Noncurrent) | $256,506 | $290,194 | | Total Liabilities | $370,127 | $424,597 | | Total Stockholders' Equity (Deficit) | ($37,823) | ($18,305) | [Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash from operating activities increased to $8.3 million from $5.1 million in Q1 2024. Investing activities provided $3.8 million in cash, mainly from proceeds from business divestitures. Financing activities used $34.7 million, almost entirely for the repayment of notes payable. This resulted in a net decrease in cash of $22.7 million for the quarter | (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,305 | $5,121 | | Net cash provided by (used in) investing activities | $3,789 | ($183) | | Net cash used in financing activities | ($34,723) | ($9,599) | | Change in cash, cash equivalents and restricted cash | ($22,721) | ($4,945) | [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) [Reconciliation of Net Loss to Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Upland's Adjusted EBITDA for Q1 2025 was $13.1 million, consistent with the prior-year period. The reconciliation from a GAAP net loss of $25.8 million involved adding back several items, most notably a $23.5 million loss on divestitures, $9.7 million in depreciation and amortization, and $2.7 million in stock-based compensation | (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | ($25,848) | ($96,130) | | Add: Depreciation and amortization | $9,661 | $13,802 | | Add: Stock-based compensation | $2,675 | $3,522 | | Add: Loss on divestitures | $23,457 | $0 | | Add: Impairment of goodwill | $0 | $87,227 | | **Adjusted EBITDA** | **$13,082** | **$13,103** | [Reconciliation of Net Loss to Non-GAAP Net Income](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Net%20Loss%20and%20Non-GAAP%20EPS) Non-GAAP net income for Q1 2025 increased to $8.2 million from $6.8 million in Q1 2024, resulting in a diluted non-GAAP EPS of $0.23, up from $0.19. Key adjustments to the GAAP net loss included adding back amortization of purchased intangibles ($9.4 million), stock-based compensation ($2.7 million), and the loss on divestitures ($23.5 million) | (in thousands, except per share) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | ($25,848) | ($96,130) | | Add: Amortization of purchased intangibles | $9,401 | $13,510 | | Add: Loss on divestitures of businesses | $23,457 | $0 | | Add: Impairment of goodwill | $0 | $87,227 | | **Non-GAAP net income** | **$8,211** | **$6,848** | | **Non-GAAP earnings per share, diluted** | **$0.23** | **$0.19** | [Reconciliation of Operating Cash Flow to Free Cash Flow](index=11&type=section&id=Reconciliation%20of%20Operating%20Cash%20Flow%20to%20Free%20Cash%20Flow) Free Cash Flow for Q1 2025 was $7.9 million, a significant increase from $4.9 million in the same period last year. This was calculated by taking the net cash provided by operating activities of $8.3 million and subtracting $0.4 million for the purchase of property and equipment | (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,305 | $5,121 | | Less: Purchase of property and equipment | ($424) | ($183) | | **Free Cash Flow** | **$7,881** | **$4,938** |

Customer Base and Revenue - The company has over 10,000 customers, with no single customer accounting for more than 10% of revenue[5] - Approximately 90% of recurring revenue for the year ended December 31, 2024, was generated from major accounts, defined as those with contracted annual recurring revenue of $25,000 or more[23] - The annual net dollar retention rate was 96% as of December 31, 2024, indicating strong customer loyalty and success[5] - The company aims to increase sales to existing customers, as very few currently use more than one application, presenting significant cross-selling opportunities[5] Sales and Marketing Strategy - The company employs a land-and-expand go-to-market strategy, focusing on expanding the adoption of initial applications across customer organizations[24] - The customer success organization is dedicated to driving adoption, value realization, retention, and loyalty across the customer base[28] Employee and Organizational Structure - The company has a total of 998 full-time employees as of December 31, 2024, with a majority located in the United States and other countries[39] Financial Performance and Seasonality - The company has historically experienced seasonality, with a higher percentage of agreements signed in the fourth quarter, leading to increased cash flow in the first quarter[37] Research and Development - The company continues to invest in research and development to enhance applications and support third-party integrations[5] Tax and Valuation Considerations - As of December 31, 2024, the company recorded a valuation allowance of $50.4 million against its deferred tax assets, indicating potential future tax expense implications[252] - The company has adopted an indefinite reinvestment position for foreign earnings, resulting in no deferred tax liability accrued for anticipated future dividends from foreign subsidiaries[253] - The company assesses goodwill for impairment annually on October 1st, with evaluations based on qualitative and quantitative analyses of fair value compared to carrying value[255][256] - The company utilizes the asset and liability method for accounting income taxes, recognizing deferred tax assets and liabilities based on expected future tax consequences[251] - Significant estimates are made in determining the value of deferred tax assets, including expected reversal periods and the availability of net operating losses[251] - The company accounts for tax uncertainties based on a "more likely than not" threshold for recognition and derecognition of tax positions[254] - The company’s tax provision could be adversely affected by lower-than-anticipated earnings in jurisdictions with lower statutory rates[250] Debt and Lease Obligations - Future interest on debt obligations is calculated using the interest rate effective as of December 31, 2024, with floating-to-fixed interest rate swap agreements in place to mitigate interest rate risk[47] - The company leases office space under operating leases that expire between 2024 and 2033, with future rental income from subletting excess space not included in operating lease obligations[47] Currency and Business Changes - Changes in foreign currency exchange rates, entry into new businesses, and changes in existing businesses may affect the company's tax provision[250]