[Part I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and accompanying notes for the reporting periods [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Key Balance Sheet Items | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $138,284 | $189,158 | | Accounts receivable | $35,120 | $50,499 | | Total current assets | $205,812 | $262,991 | | Total assets | $1,030,046 | $1,029,007 | | Total current liabilities | $170,538 | $156,444 | | Total liabilities | $718,116 | $712,719 | | Total stockholders' equity | $311,930 | $316,288 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Key Operational Results | Metric (in thousands, except per share) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $80,227 | $76,264 | $158,943 | $150,233 | | Gross profit | $53,674 | $51,252 | $107,635 | $100,794 | | Loss from operations | $(10,888) | $(9,163) | $(25,665) | $(26,691) | | Net loss | $(16,393) | $(19,042) | $(39,224) | $(39,726) | | Net loss per common share, basic and diluted | $(0.52) | $(0.63) | $(1.25) | $(1.32) | [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive Loss Summary | Metric (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(16,393) | $(19,042) | $(39,224) | $(39,726) | | Other comprehensive income (loss) | $(14,703) | $(908) | $9,170 | $12,996 | | Comprehensive loss | $(31,096) | $(19,950) | $(30,054) | $(26,730) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Changes in Stockholders' Equity | Metric (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Common Stock | $3 | $3 | | Additional Paid-In Capital | $594,080 | $568,384 | | Accumulated Other Comprehensive Loss | $(2,344) | $(11,514) | | Accumulated Deficit | $(279,809) | $(240,585) | | Total Stockholders' Equity | $311,930 | $316,288 | - The number of common shares issued and outstanding increased from **31,096,548** as of December 31, 2021, to **31,632,628** as of June 30, 2022[9](index=9&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summary of Cash Flows | Metric (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $22,260 | $23,308 | | Net cash used in investing activities | $(62,653) | $(92,924) | | Net cash used in financing activities | $(6,608) | $(3,381) | | Change in cash and cash equivalents | $(50,874) | $(73,490) | | Cash and cash equivalents, end of period | $138,284 | $176,539 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=1.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) - The financial statements are prepared in conformity with GAAP and include Upland Software, Inc and its wholly-owned subsidiaries[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) - The Company assessed the impact of COVID-19 on estimates and assumptions and determined there was **no material impact** as of August 9, 2022[30](index=30&type=chunk) - No individual customer represented **more than 10% of total revenues** for the six months ended June 30, 2022, or more than 10% of accounts receivable as of June 30, 2022 or December 31, 2021[32](index=32&type=chunk) - Interest rate swap agreements effectively converted **$540 million of variable interest debt to a fixed rate of 5.4%**, with the fair value of these swaps being a **$26.0 million asset** as of June 30, 2022[33](index=33&type=chunk) - ASU 2020-06 (debt with conversion options) was adopted in Q1 2022 with **no material impact**, while ASU 2021-08 (business combinations) is being evaluated[38](index=38&type=chunk)[40](index=40&type=chunk) [2. Acquisitions](index=13&type=section&id=2.%20Acquisitions) - In 2022, Upland acquired BA Insight and Objectif Lune, which contributed approximately **$2.8 million** and **$10.5 million** in revenue respectively since their acquisition dates[42](index=42&type=chunk) - In 2021, Upland completed acquisitions of Panviva, BlueVenn, and Second Street, with earnout payments for BlueVenn and Second Street resulting in **no payments made**[42](index=42&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[55](index=55&type=chunk) - **Goodwill of $126.6 million** from these acquisitions is primarily attributed to expected synergies and the value of the acquired workforce[50](index=50&type=chunk) Cash Consideration for Recent Acquisitions | Acquisition | Cash Consideration (in thousands) | | :--- | :--- | | BA Insight | $33,355 | | Objectif Lune | $29,750 | | Panviva | $19,931 | | BlueVenn | $53,535 | | Second Street | $25,436 | Transaction Related Expenses | Transaction Related Expenses (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total transaction related expenses | $400 | $2,000 | $4,900 | $6,100 | [3. Fair Value Measurements](index=16&type=section&id=3.%20Fair%20Value%20Measurements) - The fair value of the interest rate swap was a **$26.0 million asset** as of June 30, 2022, an increase from an $8.4 million liability at December 31, 2021, due to rising short-term interest rates[56](index=56&type=chunk)[57](index=57&type=chunk) - The carrying value of long-term debt (**$525.2 million** at June 30, 2022) approximates its fair value[58](index=58&type=chunk) [4. Goodwill and Other Intangible Assets](index=17&type=section&id=4.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill and Intangible Asset Balances | Metric (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Goodwill | $492,481 | $457,472 | | Total intangible assets, net | $277,001 | $279,920 | Amortization Expense | Amortization Expense (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total amortization expense | $13,500 | $12,700 | $27,400 | $24,700 | Estimated Annual Amortization Expense | Estimated Annual Amortization Expense (in thousands) | | :--- | | Remainder of 2022 | $25,803 | | 2023 | $50,546 | | 2024 | $48,060 | | 2025 | $44,823 | | 2026 | $41,871 | | 2027 and thereafter | $65,898 | | Total | $277,001 | [5. Income Taxes](index=18&type=section&id=5.%20Income%20Taxes) - The Company recognized an income tax benefit of **$0.5 million** for Q2 2022 and **$0.6 million** for the six months ended June 30, 2022, primarily from foreign income taxes[63](index=63&type=chunk) - For the six months ended June 30, 2021, a tax benefit of **$2.9 million** was recognized, mainly from releasing a valuation allowance related to the Second Street acquisition[64](index=64&type=chunk) - A **valuation allowance** is recorded against U.S. net deferred tax assets due to historical operating losses[65](index=65&type=chunk) [6. Debt](index=19&type=section&id=6.%20Debt) - The Credit Facility includes a **$350 million Term Loan**, a **$190 million Incremental Term Loan**, and a **$60 million Revolving Credit Facility**, which was fully available as of June 30, 2022[69](index=69&type=chunk)[70](index=70&type=chunk)[79](index=79&type=chunk) - Interest rate swaps fix the interest rate for the Term Loans at **5.4%** for the full 7-year term[74](index=74&type=chunk) - The fair value of the interest rate swap was a **$26.0 million asset** at June 30, 2022, with an estimated **$6.4 million** expected to be reclassified to Interest expense in the next twelve months[75](index=75&type=chunk)[76](index=76&type=chunk) - The Company was in **compliance with all debt covenants** as of June 30, 2022[81](index=81&type=chunk) Long-Term Debt Summary | Metric (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Senior secured loans | $516,725 | $518,330 | | Less current maturities | $(3,167) | $(3,167) | | Total long-term debt | $513,558 | $515,163 | [7. Net Loss Per Share](index=21&type=section&id=7.%20Net%20Loss%20Per%20Share) - Due to net losses, **basic and diluted loss per share were the same** for all periods presented[83](index=83&type=chunk) Net Loss Per Share Calculation | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Loss per common share, basic and diluted | $(0.52) | $(0.63) | $(1.25) | $(1.32) | [8. Commitments and Contingencies](index=21&type=section&id=8.%20Commitments%20and%20Contingencies) - The Company has purchase commitments for hosting services, third-party technology, and other operational services[84](index=84&type=chunk) - No current or pending legal proceedings are anticipated to have a **material adverse effect** on the Company's financial statements[85](index=85&type=chunk) [9. Stockholders' Equity](index=22&type=section&id=9.%20Stockholders'%20Equity) - Accelerated stock-based compensation expense was **$4.4 million** for the three and six months ended June 30, 2022[94](index=94&type=chunk) - Unvested restricted units outstanding as of June 30, 2022, totaled **1,986,210 units**[97](index=97&type=chunk) Components of Accumulated Other Comprehensive Income (AOCI) | Component of AOCI (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Foreign currency translation adjustment | $(24,060) | $(5,657) | | Unrealized translation gain on intercompany loans | $(4,243) | $2,552 | | Unrealized gain (loss) on interest rate swaps | $25,959 | $(8,409) | | Total accumulated other comprehensive loss | $(2,344) | $(11,514) | Stock-Based Compensation Expense | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total | $14,877 | $13,550 | $26,496 | $31,374 | [10. Revenue Recognition](index=24&type=section&id=10.%20Revenue%20Recognition) - Revenue is recognized when control of goods or services is transferred to customers, following a five-step model in accordance with ASC 606[101](index=101&type=chunk)[102](index=102&type=chunk) - Subscription and support revenue is recognized **ratably over the contract term**, while perpetual license revenue is recognized **upfront**[104](index=104&type=chunk)[105](index=105&type=chunk) - Professional services revenue is recognized **over time** as services are performed[106](index=106&type=chunk) - As of June 30, 2022, approximately **$298.6 million of revenue** is expected to be recognized from remaining performance obligations, with **70% expected within the next 12 months**[119](index=119&type=chunk) Revenue by Geography | Revenue by Geography (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | United States | $55,482 | $53,350 | $109,258 | $108,602 | | United Kingdom | $10,952 | $13,460 | $23,459 | $23,529 | | Canada | $5,783 | $3,738 | $9,531 | $7,206 | | Other International | $8,010 | $5,716 | $16,695 | $10,896 | | Total revenue | $80,227 | $76,264 | $158,943 | $150,233 | [11. Related Party Transactions](index=28&type=section&id=11.%20Related%20Party%20Transactions) - The Company reported **no material related party transactions** for the three and six months ended June 30, 2022[123](index=123&type=chunk) [12. Subsequent Events](index=28&type=section&id=12.%20Subsequent%20Events) - On July 14, 2022, Upland entered into an agreement to issue and sell **115,000 shares of Series A Preferred Stock** for an aggregate purchase price of **$115.0 million**[124](index=124&type=chunk) - Holders of Series A Preferred Stock will receive dividends at **4.5% per annum** for the first seven years, increasing to **7% thereafter**[125](index=125&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition, operational results, and key business metrics [Overview](index=30&type=section&id=Overview) - Upland provides cloud-based software applications for digital transformation across various business functions[130](index=130&type=chunk)[139](index=139&type=chunk) - The Company employs a **'land-and-expand' go-to-market strategy**, selling primarily through a direct sales organization[132](index=132&type=chunk) - Revenue grew from $98.0 million in 2017 to $302.0 million in 2021, a **compound annual growth rate of 33%**[134](index=134&type=chunk) - Upland has completed **31 acquisitions** from February 2012 through June 30, 2022, as part of its growth strategy[135](index=135&type=chunk) - The COVID-19 pandemic's impact is ongoing, but the Company has seen improved market stability and resumed acquisition activity in 2021 and early 2022[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) [Revenue](index=33&type=section&id=Revenue) - Total revenue growth for Q2 2022 was negatively impacted by **3 percentage points** from foreign currency exchange rates (FX)[144](index=144&type=chunk)[148](index=148&type=chunk) - Acquisitions contributed **$10.0 million** to total revenue increase in Q2 2022 and **$18.4 million** in 6M 2022[144](index=144&type=chunk)[148](index=148&type=chunk) - Non-GAAP Core Organic Revenue **decreased by $3.0 million** for Q2 2022 and by **$3.9 million** for 6M 2022, primarily due to declines in several revenue categories[144](index=144&type=chunk)[145](index=145&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) Revenue by Category | Revenue Category (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | % Change | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Subscription and support | $75,017 | $72,405 | 4% | $148,644 | $143,058 | 4% | | Perpetual license | $1,858 | $415 | 348% | $3,636 | $767 | 374% | | Professional services | $3,352 | $3,444 | (3)% | $6,663 | $6,408 | 4% | | Total revenue | $80,227 | $76,264 | 5% | $158,943 | $150,233 | 6% | [Cost of Revenue and Gross Profit Percentage](index=35&type=section&id=Cost%20of%20Revenue%20and%20Gross%20Profit%20Percentage) - Acquisitions contributed **$1.6 million** to subscription and support cost of revenue in Q2 2022 and **$3.7 million** in 6M 2022[154](index=154&type=chunk)[156](index=156&type=chunk) - Acquisitions contributed **$0.7 million** to professional services cost of revenue in Q2 2022 and **$1.6 million** in 6M 2022[155](index=155&type=chunk)[157](index=157&type=chunk) Cost of Revenue Summary | Cost of Revenue (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | % Change | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Subscription and support | $24,125 | $23,161 | 4% | $46,194 | $45,843 | 1% | | Professional services and other | $2,428 | $1,851 | 31% | $5,114 | $3,596 | 42% | | Total cost of revenue | $26,553 | $25,012 | 6% | $51,308 | $49,439 | 4% | | Gross profit percentage | 67% | 67% | - | 68% | 67% | - | [Operating Expenses](index=37&type=section&id=Operating%20Expenses) - Sales and marketing expense increased due to acquisitions (**$1.8M in Q2**, **$3.9M in 6M**) and ongoing go-to-market investments[159](index=159&type=chunk)[160](index=160&type=chunk) - Research and development expense increased due to acquisitions (**$2.0M in Q2**, **$3.9M in 6M**), offset by lower organic personnel costs[162](index=162&type=chunk)[164](index=164&type=chunk) - General and administrative expense increased in Q2 2022 due to higher non-cash stock compensation but decreased in 6M 2022 due to overall lower compensation costs[166](index=166&type=chunk)[167](index=167&type=chunk) - Depreciation and amortization expense increased due to acquired intangible assets from recent acquisitions (**$1.5M in Q2**, **$3.3M in 6M**)[169](index=169&type=chunk)[171](index=171&type=chunk) - Acquisition-related expenses decreased in Q2 2022 due to lower transaction costs but increased slightly in 6M 2022 due to higher integration expenses[173](index=173&type=chunk)[174](index=174&type=chunk) Operating Expense Summary | Operating Expense (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | % Change | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales and marketing | $15,331 | $14,298 | 7% | $30,924 | $26,730 | 16% | | Research and development | $11,676 | $11,113 | 5% | $23,743 | $22,053 | 8% | | General and administrative | $21,828 | $19,192 | 14% | $41,442 | $43,561 | (5)% | | Depreciation and amortization | $10,802 | $10,278 | 5% | $21,853 | $20,021 | 9% | | Acquisition-related expenses | $4,925 | $5,534 | (11)% | $15,338 | $15,120 | 1% | [Other Income (Expense)](index=40&type=section&id=Other%20Income%20(Expense)) - Other income (expense), net, shifted from an expense to an income in both the three and six months ended June 30, 2022, primarily due to **currency exchange gains**[176](index=176&type=chunk)[177](index=177&type=chunk) Other Income (Expense) Summary | Other Income (Expense) (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | % Change | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Interest expense, net | $(7,754) | $(7,942) | (2)% | $(15,516) | $(15,729) | (1)% | | Other income (expense), net | $1,777 | $(399) | (545)% | $1,359 | $(162) | (939)% | [Benefit from (Provision for) Income Taxes](index=40&type=section&id=Benefit%20from%20(Provision%20for)%20Income%20Taxes) - The Company recorded an income tax benefit in Q2 2022, primarily from foreign operations, a significant change from a provision in Q2 2021[179](index=179&type=chunk)[181](index=181&type=chunk) Income Tax Summary | Income Taxes (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | % Change | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Benefit from (provision for) income taxes | $472 | $(1,538) | (131)% | $598 | $2,856 | (79)% | [Key Metrics](index=41&type=section&id=Key%20Metrics) - **Adjusted EBITDA**, a non-GAAP measure, **increased by 3%** for both the three and six months ended June 30, 2022, compared to the prior year periods[185](index=185&type=chunk) Adjusted EBITDA | Metric (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $24,508 | $23,728 | $47,954 | $46,572 | [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company believes current cash and available credit will be sufficient to fund operations and support continued growth through acquisitions for at least the next twelve months[189](index=189&type=chunk) - Cash and cash equivalents **decreased by $50.9 million** from December 31, 2021, to June 30, 2022, primarily due to **$62.4 million in cash paid for acquisitions**[190](index=190&type=chunk) - The recently announced Securities Purchase Agreement will provide an additional **$115.0 million in liquidity**[193](index=193&type=chunk) - Cash provided by operating activities **decreased by $1.0 million to $22.3 million** for the six months ended June 30, 2022[205](index=205&type=chunk) - Cash used in investing activities **decreased by $30.3 million to $62.7 million** for the six months ended June 30, 2022, due to fewer acquisitions[208](index=208&type=chunk) - Cash used in financing activities **increased by $3.2 million to $6.6 million** for the six months ended June 30, 2022[211](index=211&type=chunk) Key Liquidity Metrics | Metric (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $138,284 | $189,158 | | Available borrowings under credit facility | $60,000 | $60,000 | | Borrowings outstanding under credit facility | $525,200 | $527,900 | | Working capital surplus | $35,300 | $106,500 | [Critical Accounting Policies and the Use of Estimates](index=45&type=section&id=Critical%20Accounting%20Policies%20and%20the%20Use%20of%20Estimates) - Key accounting policies involving significant management judgment include revenue recognition, income taxes, business combinations, and stock-based compensation[215](index=215&type=chunk) - **No material changes** to critical accounting policies and estimates were reported for the six months ended June 30, 2022[214](index=214&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's exposure to interest rate, foreign currency, and inflation risks - The Company's exposure to interest rate risk is mitigated by interest rate swaps that **fix the Term Loan rate at 5.4%**[218](index=218&type=chunk) - Foreign currency exchange risk arises from international operations; a hypothetical **10% change in exchange rates** could impact revenue by **$4.0 million** for the six months ended June 30, 2022[219](index=219&type=chunk) - Inflation has **not had a material effect** on the Company's business in the last three fiscal years, but future pressures could adversely affect financial results[221](index=221&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and internal financial reporting controls - Management concluded that the Company's disclosure controls and procedures were **effective** as of June 30, 2022[224](index=224&type=chunk) - There were **no changes in internal control** over financial reporting during the quarter ended June 30, 2022, that materially affected, or are reasonably likely to materially affect, internal controls[225](index=225&type=chunk) [Part II. OTHER INFORMATION](index=49&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors related to inflation and the issuance of Series A Preferred Stock - **Inflation** has the potential to adversely affect the Company's liquidity and results of operations by increasing costs[230](index=230&type=chunk) - The newly issued **Series A Preferred Stock ranks senior to common stock**, carries corporate governance rights, and could lead to dilution of common stockholders' rights[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk) - A redemption feature of the Series A Preferred Stock may **discourage or delay potential takeovers** of the Company[234](index=234&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q - The exhibits include certifications from the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002 and Inline XBRL data[238](index=238&type=chunk) [SIGNATURES](index=52&type=section&id=SIGNATURES) This section contains the required signatures for the Quarterly Report on Form 10-Q - The report was signed on **August 9, 2022**, by Michael D. Hill, Chief Financial Officer of UPLAND SOFTWARE, INC[243](index=243&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q2 2022 was $80.2 million, a 5% year-over-year increase, with an 8% growth without FX impact [21] - Recurring revenue from subscription and support increased 4% year-over-year to $75 million, with a 6% growth without FX impact [21] - Adjusted EBITDA for Q2 2022 was $24.5 million, maintaining a 31% margin, up from $23.7 million in Q2 2021 [23] - Free cash flow generated in Q2 was $13.9 million, contributing to a total of $22 million year-to-date [24] Business Line Data and Key Metrics Changes - Perpetual license revenue increased to $1.9 million in Q2 2022, up from $0.4 million in Q2 2021 [22] - Professional services revenue was $3.4 million for the quarter, reflecting a 3% year-over-year decline [22] - Strong expansion was noted in products such as Kapost, InGenius, Objectif Lune, and BA Insight [10][11] Market Data and Key Metrics Changes - The company expanded relationships with 403 existing customers, including 53 major expansions, and welcomed 123 new customers in Q2 [10] - The company experienced a strong quarter for selling Premier Success Plans, which provide high fidelity support to customers [11] Company Strategy and Development Direction - The company is committed to innovation, with product improvements announced for Altify and Objectif Lune [9] - A strategic equity investment of $115 million from HGGC was announced, aimed at strengthening the business and capitalizing on acquisition opportunities [14][16] - The company is actively pursuing additional acquisitions and sees a favorable market environment for such opportunities [14][54] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment has not significantly impacted customer buying behaviors, with no deals pushed out [51] - The company remains conservative in its guidance, with expected revenue growth impacted by FX headwinds [28][44] - Management expressed confidence in the M&A pipeline, anticipating a favorable environment for acquisitions due to recent market turbulence [54] Other Important Information - The company has approximately $366 million in total tax NOL carry forwards, with an estimated $211 million available for utilization [27] - As of June 30, 2022, the company had outstanding net debt of approximately $387 million, which is expected to drop to around $277 million after the new investment closes [25] Q&A Session Summary Question: Could you elaborate on cross-selling and expansion success within existing customers? - Management highlighted strong expansion activity in Kapost, InGenius, Objectif Lune, and BA Insight, driven by investments in go-to-market strategies [34] Question: Are there specific products or regions facing macro impacts? - Management indicated no significant macro impacts affecting specific products or regions [35] Question: What benefits do you foresee from the HGGC partnership? - Management emphasized HGGC's expertise in M&A and go-to-market strategies, which will support Upland's growth and value creation [38][39] Question: Can you discuss the guidance and confidence in sequential growth? - Management stated that guidance is conservative, primarily affected by FX impacts, and expressed confidence in maintaining growth [44] Question: Any changes in investment focus regarding R&D and product development? - Management confirmed no major changes, maintaining a commitment to innovation and go-to-market investments [45] Question: What is the outlook for the M&A pipeline? - Management anticipates a favorable M&A environment due to market turbulence, with a strong pipeline but a patient approach to execution [54] Question: Is the cross-sell motion still a priority? - Management affirmed that expansion through customer success and product AEs remains a key focus [63] Question: Is there additional conservatism in the guidance due to the macroeconomic environment? - Management confirmed that a typical level of conservatism is embedded in the guidance [64] Question: What is the rationale for the recent equity raise? - Management highlighted the strategic partnership with HGGC and the validation of the business model as key reasons for the equity raise [66]

Upland Software, Inc. (NASDAQ:UPLD) Q1 2022 Earnings Conference Call May 4, 2022 5:00 PM ET Company Participants Jack McDonald – Chairman and Chief Executive Officer Rod Favaron – President Mike Hill – Chief Financial Officer Conference Call Participants Scott Berg – Needham & Company Luv Sodha – Jefferies Jake Roberge – William Blair Alex Sklar – Raymond James Operator Thank you for standing by and welcome to the Upland Software First Quarter 2022 Earnings Call. At this time, all participants are in listen ...

Table of Contents 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 For the quarterly period ended March 31, 2022 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. (Exact name of registrant as specified in its charter) Delaware 27-2992077 (State or other ju ...

Upland Software, Inc. (NASDAQ:UPLD) Q4 2021 Earnings Conference Call February 24, 2022 5:00 PM ET Company Participants Jack McDonald - Chairman & Chief Executive Officer Mike Hill - Chief Financial Officer Rod Favaron - President Conference Call Participants Bhavan Suri - William Blair Joe Meares - Truist Luv Sodha - Jefferies Luke Morison - Canaccord Alex Sklar - Raymond James Operator Thank you for standing by and welcome to the Upland Software Fourth Quarter 2021 Earnings Call. . At this time, all part ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36720 Upland Software, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Delaware 27-2992077 (I.R.S. Empl ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2021 was $76.1 million, representing a growth of 3% year-over-year [33] - Recurring revenue from subscription and support grew 2% year-over-year to $72.3 million [33] - Adjusted EBITDA for Q3 2021 was $25 million, consistent with the previous year, with an adjusted EBITDA margin of 33% [38] - Free cash flow for Q3 2021 was $4.9 million, with a year-to-date total of approximately $28 million [39][40] - The company lowered its Q4 revenue guidance by $3.9 million due to reduced messaging volumes and lower new logo bookings [10][12] Business Line Data and Key Metrics Changes - Organic growth in recurring revenues, excluding political, was flat in Q3 2021, with a full-year expectation of 2% growth [13] - Professional services revenue increased by 12% year-over-year to $3.1 million [33] - The messaging volumes from progressive advocacy organization customers were lower than expected, impacting revenue [12][58] Market Data and Key Metrics Changes - The company expects a quarterly revenue run rate of $75 million for Q4 2021, reflecting the impacts of COVID-19 on the business [11][17] - The net dollar retention rate is currently in the low to mid-90s, down from 94% in 2020, but expected to improve in 2022 due to multiyear renewals [16][25] Company Strategy and Development Direction - The company is targeting total revenue growth of 15% per year, combining organic growth and acquisitions, with a focus on self-funded growth [20][66] - The management remains committed to the current strategy of building a strong go-to-market and product organization, with no plans for a major pivot [62][67] - The company aims to add $40 million to $50 million in acquired revenues by the end of 2022 [11][91] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a mixed quarter with strong adjusted EBITDA but lower than expected messaging volumes [9] - There are positive early indicators for Q4 bookings, but the company is taking a conservative approach until sustained improvement is seen [57][110] - The management expressed confidence in the long-term growth potential and the effectiveness of the changes made in the sales and marketing structure [71][73] Other Important Information - The company has approximately $240 million in liquidity, including $180 million in cash and a $60 million undrawn revolver [41] - The net debt leverage is around 3.6, with outstanding net debt of approximately $350 million [43] Q&A Session Summary Question: Visibility and confidence in the pipeline - Management noted that the pipeline creation was impacted by the transition to a fully digital lead generation model during the pandemic, affecting new logo bookings [54][56] Question: Changes in competitive environment - Management indicated no material competitive changes but noted improved relationships with major platform players like Salesforce [70][72] Question: Impact of new logo and expansion sales on acquisition pace - Management confirmed that the pace of acquisitions remains unchanged at $40 million to $50 million per year, supported by internally generated cash flow [91] Question: Goodwill write-off clarification - Management clarified that there were no write-offs, only adjustments in purchase accounting related to acquisitions [87] Question: Drivers of lower messaging volume - The decline was primarily due to lower variable messaging volumes from progressive advocacy organization customers, not due to churn [112][123]

Table of Contents 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 UPLAND SOFTWARE, INC. For the quarterly period ended September 30, 2021 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 (Exact name of registrant as specified in its charter) (State or other jurisdiction of in ...

Upland Software, Inc. (NASDAQ:UPLD) Q2 2021 Earnings Conference Call August 4, 2021 5:00 PM ET Company Participants Jack McDonald - Chairman and Chief Executive Officer Mike Hill - Chief Financial Officer Rod Favaron - President and Chief Commercial Officer Conference Call Participants Bhavan Suri - William Blair & Company LLC Luv Sodha - Jefferies LLC Michael Rackers - Needham & Company, LLC Joseph Meares - Truist Securities, Inc. Aaron Spychalla - Craig-Hallum Capital Group LLC Luke Hannan - Canaccord Gen ...

Table of Contents 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 For the quarterly period ended June 30, 2021 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. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorpo ...