Core Insights - Upland Software, Inc. has launched AI Conversational Search for its Panviva Sidekick, enhancing knowledge retrieval for enterprises [1] - The new feature integrates natural language processing with trusted organizational data, addressing the challenge of maintaining AI efficiency while ensuring regulatory compliance [1] Company Overview - Upland Software is recognized as a leader in AI-powered knowledge and content management software [1] - The introduction of Panviva Sidekick aims to transform enterprise knowledge retrieval processes [1]

Core Insights - Upland Software has launched the Upland BA Insight Platform, emphasizing a strategic investment in AI innovation to enhance search experiences for complex organizations [1][2] Product Features - The BA Insight Platform includes features such as SmartHub, ConnectivityHub, AutoClassifier, Smart Preview, and Connectors, aimed at delivering more connected, contextual, and actionable search experiences [1][2] - Key innovations focus on making search experiences smarter, faster, and more insightful, while maintaining the ability to utilize traditional search methods [3][4] Collaboration and Integration - The collaboration with Amazon Web Services (AWS) is crucial for delivering intelligent, secure, and scalable AI-driven search solutions, including native integrations with Amazon Q Business and AWS generative AI assistant [4][5] - This integration allows organizations to unlock conversational search capabilities and gain actionable insights across all content sources securely and at scale [4][5] Customer Impact - The BA Insight Platform is designed to enhance enterprise search and AI enablement, making it smarter and more intuitive for the future of work [5][6] - Over 1,100 enterprise customers rely on Upland Software to address complex challenges and facilitate AI adoption [6]

Core Insights - Upland Software, Inc. has released its first annual report on AI adoption in the proposal industry, highlighting trends and observations from global professionals [1][2] - The report emphasizes the transformative impact of AI on proposal management while addressing challenges faced during implementation [2] Industry Trends - The report surveyed hundreds of RFP and proposal professionals to identify current trends in AI adoption within the industry [2] - Key findings indicate that AI is driving significant transformation and growth in proposal processes [2] Implementation Challenges - Organizations encounter various challenges when implementing AI, including security concerns and the need for buy-in across dispersed teams [2] - The report suggests that companies must proactively address these challenges to successfully integrate AI into their processes [2] Company Commitment - Upland Software is focused on developing complementary generative AI tools aimed at enhancing efficiency and personalization for users [2] - The company aims to provide tools that improve productivity and ensure consistent, compliant, and responsive sales documents throughout the deal cycle [2] Additional Information - Upland Software serves over 1,100 enterprise customers, helping them navigate complex challenges and facilitating AI adoption [3]

Core Insights - Upland Software, Inc. has earned 49 badges in G2's Winter 2026 market reports, indicating strong customer validation and consistent value for its products [1] Product Highlights - Upland BA Insight, the company's AI enablement solution, saw an increase in earned badges this season, showcasing its growing recognition in the market [1] - Upland Qvidian, the AI-powered proposal management software, continues to deliver impactful results, reinforcing its effectiveness [1] - Upland Panviva also contributes to the company's strong performance in the market, although specific details were not provided [1]

Core Insights - Upland Software reported Q3 CY2025 revenue of $50.53 million, a 24.2% year-on-year decline, but exceeded Wall Street's expectations by 1.2% [1][6] - The company provided Q4 revenue guidance of $49.4 million, which is 2.7% below analyst estimates of $50.79 million [1][4][6] - Non-GAAP profit was $0.30 per share, significantly beating analysts' consensus estimates by 73.1% [1][6] Revenue and Profitability - Adjusted operating income was $14.81 million, with a margin of 29.3%, surpassing analyst expectations of $4.28 million [6] - Operating margin improved to 10.6%, up from -5% in the same quarter last year [6] - Market capitalization stands at $52.94 million [6] Management Commentary - Management highlighted operational improvements and a focused product strategy as key drivers for margin expansion despite revenue decline due to divestitures [5] - CEO Jack McDonald noted significant agreements with major technology and pharmaceutical companies, indicating progress in AI product adoption [3] - CFO Michael Hill emphasized the company's focus on the Knowledge and Content Management market and the importance of expanding large deals and maintaining customer retention [4]

Financial Data and Key Metrics Changes - In Q3 2025, the company beat its revenue guidance midpoint and met its adjusted EBITDA guidance midpoint, with a core organic growth rate of 3% [5] - Adjusted EBITDA for Q3 was $16 million, resulting in an adjusted EBITDA margin of 32%, up from 21% in Q3 2024 [12] - Free cash flow for the quarter was $6.7 million, with a target of around $20 million for the full year [10][12] - Net debt leverage decreased to 3.8x, with a goal of reaching 3.7x by year-end [6][13] Business Line Data and Key Metrics Changes - The company welcomed 97 new customers in Q3, including 14 major customers, and expanded relationships with 168 existing customers, 13 of which were major expansions [5] - The product portfolio has been streamlined to focus on markets that drive growth and profitability, with significant momentum in AI-powered products [6][10] Market Data and Key Metrics Changes - The company earned 49 badges in G2's fall 2025 market reports, indicating strong market presence [6] - Upland Right Answers and Upland BA Insight are now available in the AWS marketplace, enhancing customer discovery and purchase processes [6][7] Company Strategy and Development Direction - The company is focusing on AI-enabled products as key technologies in broader enterprise AI implementations, which is expected to drive future growth [9][10] - The strategy includes continued deleveraging of the balance sheet and enhancing liquidity through refinancing and a new $30 million revolver [11][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sales pipeline, citing larger deals as indicators of positive trends, with a target of 3% growth for 2026 and 5% thereafter [21][22] - The adjusted EBITDA margin is expected to continue expanding, with a long-term target of over 32% [17][18] Other Important Information - The company has significantly improved its balance sheet by paying down $242 million of debt since the beginning of the previous year [18] - Full-year 2025 total revenue is expected to decline by 21% at the midpoint due to earlier divestitures, with guidance for Q4 revenue between $46.4 million and $52.4 million [13][14] Q&A Session Summary Question: What gives confidence in achieving future growth targets? - Management noted that larger deals and partnerships with major players like Microsoft and Amazon provide optimism for future growth [21][22] Question: Clarification on fourth quarter guidance regarding license revenue? - The decline in license revenue is primarily due to professional license revenue not materializing as expected, affecting EBITDA [23][24] Question: Any changes to gross revenue retention trends? - The company targets to maintain upper 90% retention rates, with 99% retention at the end of 2024 [25] Question: Growth from installed base versus net new customers? - Growth is expected from both installed base and new customers, with a focus on knowledge and content management products [28][29] Question: What's working in sales execution? - Upgrading the sales force and leveraging SEO strategies have been effective, along with partnerships with larger tech companies [31][32] Question: How is the pace of new product introductions? - There has been a dramatic improvement in product development, with a focus on AI integration and reliability [34][35] Question: Impact of perpetual license revenue reduction? - The reduction is not due to a single customer loss but reflects a general decrease in expected perpetual license revenue [37]

Financial Performance - For the three-month period ended September 30, 2025, the Core Organic Growth Rate was 2.6%[139] - Total revenue for the three months ended September 30, 2025, was $50,526,000, compared to $66,692,000 for the same period in 2024, representing a decline of approximately 24.2%[143] - Core organic revenue for the three months ended September 30, 2025, was $45,176,000, up from $44,029,000 in 2024, indicating a year-over-year increase of approximately 2.6%[143] - The net loss for the three months ended September 30, 2025, was $1,122,000, compared to a net loss of $1,733,000 for the same period in 2024[146] - Adjusted EBITDA for the three months ended September 30, 2025, was $16,032,000, compared to $14,000,000 for the same period in 2024, reflecting an increase of approximately 14.5%[146] - Total revenue for the three months ended September 30, 2025, was $50.5 million, a decrease of 24% from $66.7 million in the same period of 2024, primarily due to declines in divested product lines[153] - Subscription and support revenue decreased by 25% to $47.7 million for the three months ended September 30, 2025, compared to $63.8 million in 2024[152] - For the nine months ended September 30, 2025, total revenue was $167.6 million, down 19% from $206.8 million in 2024, mainly due to declines in divested product lines[154] Cost and Expenses - Total cost of revenue for the three months ended September 30, 2025, was $11.7 million, a decrease of 41% from $19.7 million in 2024[155] - Gross profit for the three months ended September 30, 2025, was $38.8 million, representing a gross margin of 77%, compared to 70% in the same period of 2024[155] - Operating expenses for the three months ended September 30, 2025, totaled $33.5 million, representing 66% of total revenue, compared to 75% in 2024[155] - Sales and marketing expense decreased to $9.7 million in Q3 2025 from $16.3 million in Q3 2024, a decline of 41%[161] - For the nine months ended September 30, 2025, sales and marketing expense was $34.2 million, down 32% from $50.1 million in the same period in 2024[162] - Research and development expense was $7.9 million in Q3 2025, a decrease of 31.1% from $11.4 million in Q3 2024[164] - For the nine months ended September 30, 2025, research and development expense totaled $29.2 million, down 19.1% from $36.1 million in the same period in 2024[165] - General and administrative expense was $8.8 million in Q3 2025, a decrease of 20% from $11.1 million in Q3 2024[167] - For the nine months ended September 30, 2025, general and administrative expense was $30.6 million, down 20% from $38.2 million in the same period in 2024[168] - Depreciation and amortization expense was $6.4 million in Q3 2025, a decrease of 45% from $11.5 million in Q3 2024[171] - For the nine months ended September 30, 2025, depreciation and amortization expense was $21.2 million, down 38% from $34.3 million in the same period in 2024[172] - Divestiture-related expenses were $0.8 million in Q3 2025, compared to nil in Q3 2024, marking a 100% increase[174] Losses and Impairments - Net loss attributable to common shareholders for the three months ended September 30, 2025, was $2.6 million, or $0.09 per share, compared to a net loss of $3.1 million, or $0.12 per share, in 2024[152] - The company reported a loss before provision for income taxes of $1.4 million for the three months ended September 30, 2025, compared to a loss of $1.2 million in 2024[152] - Loss on divestitures of businesses was $0.5 million for the three months ended September 30, 2025, compared to nil in the same period of 2024, as the company finalized divestitures of certain product lines[180] - Loss on debt extinguishment was $2.3 million for the three months ended September 30, 2025, compared to nil in the same period of 2024, due to the replacement of the previous credit facility[181] - For the nine months ended September 30, 2025, loss on divestitures of businesses totaled $24.4 million, with no such losses reported in the same period of 2024[184] - Impairment of goodwill and other intangibles recorded was $2.5 million in the nine months ended September 30, 2025, compared to $87.2 million in the same period in 2024, a decrease of 97%[176] Cash Flow and Financing - Cash provided by operating activities was $18.5 million for the nine months ended September 30, 2025, an increase of approximately $3.6 million from $14.9 million in the same period of 2024[197] - Cash provided by investing activities was $8.0 million for the nine months ended September 30, 2025, compared to cash used of $0.6 million in the same period of 2024, reflecting an increase of $8.5 million[200] - Cash used in financing activities was $61.6 million for the nine months ended September 30, 2025, a decrease of $131.2 million from $192.8 million in the same period of 2024[202] - As of September 30, 2025, the company had $23.4 million in cash and cash equivalents, down from $57.1 million as of December 31, 2024, primarily due to debt repayments[191] - Cash paid for lender fees and debt issuance costs was $6.8 million for the nine months ended September 30, 2025, compared to $0.1 million for the same period in 2024[203] - As of September 30, 2025, the outstanding balance under the Credit Agreement was $240.0 million, maturing in July 2031[212] - A hypothetical change of 100 basis points in variable rate debt could have resulted in a $0.6 million increase in total interest expense for the nine months ended September 30, 2025[213] - The company has an interest rate cap on $120 million of outstanding debt, effectively capping the secured overnight financing rate at 4.5%[212] Market Risks and Economic Factors - The financial impact of the One Big Beautiful Bill Act (OBBBA) is being monitored for potential future effects through 2027[133] - The company plans to continue monitoring macroeconomic factors, including inflation and supply chain constraints, that may impact its operations[131] - The company is exposed to market risks including interest rate, foreign exchange, and inflation risks due to its operations both domestically and internationally[210] - The effect of a hypothetical 10% change in foreign currency exchange rates could have resulted in a change in revenue of $3.6 million for the nine months ended September 30, 2025[214] - The company has not engaged in any currency hedging strategies to manage foreign exchange rate exposure[214] Customer and Product Strategy - The company reported a total of 1,100 enterprise customers relying on its AI-powered knowledge and content management software[135] - The company is focused on expanding its go-to-market operations and increasing sales of its products[131] - The company is committed to integrating AI functionality into its products to enhance customer experiences and drive measurable ROI[135] Accounting Policies - The company evaluates its estimates, judgments, and assumptions on an ongoing basis, which may change as new events occur[207] - There were no material changes in critical accounting policies and estimates compared to the Annual Report for the year ended December 31, 2024[206]

Revenue Performance - Total revenue for Q3 2025 was $50.5 million, a decrease of 24% from $66.7 million in Q3 2024, primarily due to divestitures[5] - Subscription and support revenue was $47.7 million, down 25% from $63.8 million in Q3 2024, also primarily due to divestitures[5] - For Q4 2025, total revenue is expected to be between $46.4 million and $52.4 million, reflecting a year-over-year decline of 27% at the midpoint[6] - Full year 2025 total revenue is projected to be between $214.0 million and $220.0 million, indicating a 21% decline at the midpoint from 2024[7] - Total revenue for Q3 2025 was $50,526,000, a decrease of 24.2% compared to $66,692,000 in Q3 2024[29] Profitability Metrics - Adjusted EBITDA was $16.0 million, representing 32% of total revenue, compared to $14.0 million or 21% of total revenue in Q3 2024[5] - Adjusted EBITDA for the full year 2025 is expected to be between $56.5 million and $59.5 million, a 4% increase at the midpoint from 2024[7] - Adjusted EBITDA for Q3 2025 was $16,032 thousand, up from $14,000 thousand in Q3 2024, representing an increase of about 14.5%[35] - Gross profit for Q3 2025 was $38,849,000, representing a gross margin of 76.7% compared to 70.4% in Q3 2024[29] Net Loss and Expenses - GAAP net loss was $1.1 million, an improvement from a net loss of $1.7 million in Q3 2024, with a loss per share of $0.09 compared to $0.12 in Q3 2024[5] - Net loss for Q3 2025 was $1,122,000, an improvement from a net loss of $1,733,000 in Q3 2024[29] - Operating expenses for Q3 2025 totaled $33,501,000, a decrease from $50,298,000 in Q3 2024[29] - The company reported a loss on divestitures of businesses amounting to $24,364 thousand for the nine months ended September 30, 2025[36] - The company incurred $2,301 thousand in loss on debt extinguishment for Q3 2025, with no such loss reported in Q3 2024[35] Cash Flow and Assets - Free Cash Flow for Q3 2025 was $6,681 thousand, compared to $4,202 thousand in Q3 2024, indicating a growth of approximately 58.9%[38] - Cash and cash equivalents were $22,755,000, down from $56,426,000 at the end of 2024[31] - Cash, cash equivalents, and restricted cash at the end of Q3 2025 totaled $23,381 thousand, down from $59,739 thousand at the end of Q3 2024[33] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $18,482 thousand, compared to $14,898 thousand for the same period in 2024, an increase of approximately 23.0%[33] Customer Acquisition and Market Presence - Upland welcomed 97 new customers in Q3 2025, including 14 major customers, and expanded relationships with 168 existing customers[4] - Upland RightAnswers and Upland BA Insight are now available in AWS Marketplace, enhancing customer access to AI solutions[8] Debt and Liabilities - The company's debt was successfully refinanced, extending maturity to July 2031 and securing a $30 million revolver for liquidity[5] - Total current assets decreased to $65,100,000 from $118,392,000 as of December 31, 2024[31] - Total liabilities decreased to $328,764,000 from $424,597,000 as of December 31, 2024[31]

Core Insights - Upland Software reported a total revenue of $50.5 million for Q3 2025, a decrease of 24% from $66.7 million in Q3 2024, primarily due to divestitures [4] - The company achieved an Adjusted EBITDA of $16.0 million, representing 32% of total revenue, an increase from 21% in the same quarter last year [4] - Upland welcomed 97 new customers in Q3 2025, including 14 major customers, and expanded relationships with 168 existing customers [5] Financial Performance - Subscription and support revenue was $47.7 million, down 25% from $63.8 million in Q3 2024 [4] - GAAP net loss was $1.1 million, an improvement from a loss of $1.7 million in Q3 2024, with a net loss per share of $0.09 compared to $0.12 in the previous year [4] - Free cash flow increased to $6.7 million from $4.2 million in Q3 2024 [4] Business Outlook - For Q4 2025, Upland expects total revenue to be between $46.4 million and $52.4 million, indicating a year-over-year decline of 27% at the midpoint [7] - Full year 2025 revenue is projected to be between $214.0 million and $220.0 million, reflecting a 21% decline at the midpoint from 2024 [8] - Adjusted EBITDA for the full year is expected to be between $56.5 million and $59.5 million, a 4% increase from the previous year [8] Product and Market Developments - Upland's AI product portfolio is gaining traction, with significant multi-year customer contracts [3] - The company received 49 badges in G2's Fall 2025 market reports, indicating strong momentum across its product offerings [5] - Upland RightAnswers and Upland BA Insight are now available in AWS Marketplace, enhancing customer accessibility to Upland's AI solutions [5]

Financial Results Announcement - Upland Software, Inc. will release its financial results for the third quarter of 2025 before market opens on November 6, 2025 [1] - A conference call and webcast will follow at 10:00 a.m. Central Time / 11:00 a.m. Eastern Time [1] Access Information - The call can be accessed via a webcast on investor.uplandsoftware.com or by dialing specific toll-free numbers for North America and international participants [2] - Attendees will need to use conference ID 8422976 to join the call [2] - A recording of the webcast will be available on investor.uplandsoftware.com after the call [2] Company Overview - Upland Software is a leader in AI-powered knowledge and content management software, helping enterprises unlock critical knowledge and automate content workflows [3] - The company serves over 1,100 enterprise customers, focusing on enhancing customer and employee experiences while supporting regulatory compliance [3] Recent Achievements - Upland Software earned 49 badges in G2's Fall 2025 market reports, indicating continued momentum across its product portfolio [5] - Upland's AI-powered proposal management software, Upland Qvidian, received numerous positive customer reviews [5] Product Availability - Upland RightAnswers is now available in AWS Marketplace, facilitating easier access to the company's knowledge management solution for enterprise contact centers [6] Industry Engagement - Upland BA Insight will showcase generative AI innovation at ILTACON 2025, emphasizing its focus on innovation and strategic partnerships [7]