PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) Upland Software's unaudited Q1 2020 condensed consolidated financial statements, covering balance sheets, operations, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents Upland Software's condensed consolidated balance sheets as of March 31, 2020, and December 31, 2019 | Metric | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | **Assets** | | | | Cash and cash equivalents | $98,688 | $175,024 | | Total current assets | $170,872 | $238,880 | | Total assets | $883,533 | $896,828 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $135,287 | $129,367 | | Total liabilities | $724,441 | $683,967 | | Total stockholders' equity | $159,092 | $212,861 | | Total liabilities and stockholders' equity | $883,533 | $896,828 | - Cash and cash equivalents decreased by **$76.3 million** from December 31, 2019, to March 31, 2020[10](index=10&type=chunk) - Total assets decreased by **$13.3 million**, while total liabilities increased by **$40.5 million**, leading to a **$53.8 million** decrease in total stockholders' equity[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details Upland Software's condensed consolidated statements of operations for the three months ended March 31, 2020, and 2019 | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | YoY Change (%) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------- | | Total revenue | $68,032 | $48,493 | 40.3% | | Gross profit | $45,831 | $33,705 | 35.9% | | Loss from operations | $(15,323) | $(2,565) | 497.4% | | Net loss | $(20,081) | $(7,830) | 156.5% | | Net loss per common share, basic and diluted | $(0.81) | $(0.38) | 113.2% | | Weighted-average common shares outstanding | 24,906,932 | 20,442,626 | 21.8% | - Subscription and support revenue increased by **42%** to **$63.9 million** in Q1 2020 from **$45.0 million** in Q1 2019[12](index=12&type=chunk) - Total operating expenses significantly increased by **68.6%** to **$61.2 million**, primarily due to higher acquisition-related expenses (**$15.2 million** in Q1 2020 vs **$7.7 million** in Q1 2019)[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Outlines Upland Software's condensed consolidated statements of comprehensive loss for the three months ended March 31, 2020, and 2019 | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net loss | $(20,081) | $(7,830) | | Foreign currency translation adjustment | $(3,459) | $(637) | | Unrealized translation gain (loss) on foreign currency denominated intercompany loans | $(7,313) | $3,006 | | Unrealized loss on interest rate swaps | $(31,401) | — | | Comprehensive loss | $(62,254) | $(5,461) | - The comprehensive loss significantly increased from **$(5.5) million** in Q1 2019 to **$(62.3) million** in Q1 2020, primarily driven by a substantial unrealized loss on interest rate swaps of **$(31.4) million** and increased foreign currency translation adjustments[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Presents Upland Software's condensed consolidated statements of stockholders' equity as of December 31, 2019, and March 31, 2020 | Metric | Balance at December 31, 2019 (in thousands) | Balance at March 31, 2020 (in thousands) | | :-------------------------------- | :---------------------------------------- | :--------------------------------------- | | Common Stock (Shares) | 25,250,120 | 25,305,427 | | Common Stock (Amount) | $3 | $3 | | Additional Paid-In Capital | $345,127 | $353,720 | | Accumulated Other Comprehensive Loss | $(1,223) | $(43,396) | | Accumulated Deficit | $(131,046) | $(151,235) | | Total Stockholders' Equity | $212,861 | $159,092 | - Total stockholders' equity decreased by **$53.8 million**, primarily due to a net loss of **$20.1 million** and significant unrealized losses on interest rate swaps (**$31.4 million**) and foreign currency translation adjustments[20](index=20&type=chunk) - Additional paid-in capital increased by **$8.6 million**, largely due to **$9.3 million** in stock-based compensation[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Details Upland Software's condensed consolidated statements of cash flows for the three months ended March 31, 2020, and 2019 | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net cash provided by (used in) operating activities | $(5,309) | $4,877 | | Net cash used in investing activities | $(68,148) | $(3,172) | | Net cash used in financing activities | $(3,204) | $(4,800) | | Change in cash and cash equivalents | $(76,336) | $(2,716) | | Cash and cash equivalents, end of period | $98,688 | $14,022 | - The company experienced a significant shift from net cash provided by operating activities (**$4.9 million**) in Q1 2019 to net cash used in operating activities (**$(5.3) million**) in Q1 2020[22](index=22&type=chunk) - Net cash used in investing activities dramatically increased to **$(68.1) million** in Q1 2020, primarily due to **$67.7 million** for business combinations (Localytics acquisition)[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Summary of Significant Accounting Policies](index=14&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines Upland's significant accounting policies, covering financial statement presentation, estimates, credit risk, COVID-19 impact, derivatives, fair value, and recent pronouncements - The company adopted ASU 2016-13 in Q1 2020, resulting in a cumulative-effect adjustment to decrease the beginning balance of Accumulated deficit by **$0.1 million** due to accelerated recognition of credit losses[39](index=39&type=chunk) - As of March 31, 2020, the fair value of interest rate swaps, included in Other long-term liabilities, was **$29.0 million**, compared to **$2.4 million** in Other assets as of December 31, 2019, reflecting a significant change in fair value[31](index=31&type=chunk) - Management is not aware of any specific event or circumstance requiring an update to its estimates or judgments or a revision of asset/liability carrying values as of May 8, 2020, despite the COVID-19 pandemic[28](index=28&type=chunk) [2. Acquisitions](index=17&type=section&id=2.%20Acquisitions) Details Upland's acquisition of Localytics in Q1 2020 and summarizes 2019 acquisitions, including consideration and preliminary purchase accounting - Acquired Localytics on February 6, 2020, for a total consideration of **$69.0 million**, including **$67.655 million** in cash[41](index=41&type=chunk)[42](index=42&type=chunk) - Localytics contributed approximately **$2.5 million** in revenue from acquisition date through March 31, 2020[41](index=41&type=chunk) - Total transaction-related expenses for acquisitions were **$3.

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Upland Software provides cloud-based enterprise work management software and grows primarily through strategic acquisitions - Upland provides cloud-based enterprise work management software through four main cloud offerings: Customer Experience Management Cloud (CXM), Enterprise Sales and Marketing Cloud (ESM), Project and IT Management Cloud (PITM), and Document Workflow Cloud (DW)[19](index=19&type=chunk) - Total revenue grew **49%** from $149.9 million in 2018 to $222.6 million in 2019, with subscription and support revenue also growing by 49%[20](index=20&type=chunk) - The company has completed **25 acquisitions** in the 8 years ending December 31, 2019, as a primary component of its growth strategy[21](index=21&type=chunk) - Key competitive strengths include a diversified customer base of over **9,000 customers**, a recurring revenue model, and proven M&A capability[25](index=25&type=chunk)[26](index=26&type=chunk) - Key growth strategies include acquiring complementary software businesses, increasing sales to existing customers, and adding new customers[27](index=27&type=chunk) - As of December 31, 2019, the company had **832 employees**, with the majority located in the United States, Canada, and the United Kingdom[42](index=42&type=chunk) Revenue by Type | Revenue Type | 2019 (%) | 2018 (%) | 2017 (%) | | :--- | :--- | :--- | :--- | | Subscription and support | 92% | 91% | 87% | | Perpetual license | 3% | 3% | 4% | | Professional services | 5% | 6% | 9% | [Item 1A. Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks related to customer retention, acquisition integration, competition, international operations, cybersecurity, and internal controls - Growth depends on retaining existing customers, securing additional subscriptions, and cross-selling, with non-renewals potentially harming future operating results[45](index=45&type=chunk) - Failure to effectively manage rapid growth from frequent acquisitions could disrupt operations, increase costs, and negatively impact customer satisfaction[47](index=47&type=chunk)[49](index=49&type=chunk) - The company's **$410.0 million loan facility** contains operating and financial covenants that may restrict business and financing activities[62](index=62&type=chunk)[63](index=63&type=chunk) - The market for enterprise work management software is **intensely competitive**, with competition from larger companies and point solution providers[64](index=64&type=chunk)[65](index=65&type=chunk) - International expansion efforts are subject to risks such as uncertain political climates, compliance with foreign laws, and data privacy regulations like **GDPR**[69](index=69&type=chunk)[70](index=70&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - Actual or perceived security vulnerabilities or failures to comply with privacy obligations like **CCPA** could lead to reputational damage and loss of business[80](index=80&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk) - The company identified a **material weakness** in the operating effectiveness of its income tax provision review process as of December 31, 2019[504](index=504&type=chunk)[511](index=511&type=chunk) [Item 1B. Unresolved Staff Comments](index=33&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments[140](index=140&type=chunk) [Item 2. Properties](index=33&type=section&id=Item%202.%20Properties) The company's principal corporate offices are in Austin, Texas, with additional leased facilities in domestic and international locations - The principal corporate offices are in Austin, Texas, with a lease expiring in June 2025[141](index=141&type=chunk) - Additional leased office facilities are located domestically and internationally in Australia, Canada, Ireland, Israel, and the United Kingdom[141](index=141&type=chunk) [Item 3. Legal Proceedings](index=34&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not currently involved in any legal proceedings that would have a material adverse effect on its business or financial condition[142](index=142&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the registrant[143](index=143&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under "UPLD", and it does not anticipate paying dividends in the foreseeable future - Common stock is traded on the NASDAQ Global Market under the symbol **"UPLD"**[145](index=145&type=chunk) - As of February 21, 2020, there were **36 stockholders of record** and the closing price was $42.42[146](index=146&type=chunk) - The company has **never declared or paid dividends** on its common stock and does not expect to, prioritizing earnings for operations and growth[147](index=147&type=chunk) [Item 6. Selected Financial Data](index=39&type=section&id=Item%206.%20Selected%20Financial%20Data) This section presents five years of selected historical financial data, highlighting significant revenue growth and key non-GAAP metrics Consolidated Statements of Operations Data (in thousands) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Subscription and support | $203,866 | $136,578 | $85,467 | $65,552 | $57,193 | | Perpetual license | $5,738 | $3,902 | $4,346 | $1,650 | $2,805 | | Professional services | $13,033 | $9,405 | $8,139 | $7,565 | $9,913 | | **Total revenue** | **$222,637** | **$149,885** | **$97,952** | **$74,767** | **$69,911** | | Total cost of revenue | $69,117 | $48,589 | $33,647 | $27,565 | $26,671 | | Gross profit | $153,520 | $101,296 | $64,305 | $47,202 | $43,240 | | Total operating expenses | $177,826 | $106,890 | $75,441 | $55,726 | $53,463 | | Loss from operations | $(24,306) | $(5,594) | $(11,136) | $(8,524) | $(10,223) | | Total other expense | $(27,870) | $(15,054) | $(6,293) | $(3,459) | $(2,402) | | Net loss | $(45,371) | $(10,839) | $(18,725) | $(13,513) | $(13,664) | | Net loss per common share | $(1.96) | $(0.54) | $(1.02) | $(0.82) | $(0.91) | Consolidated Balance Sheet Data (in thousands) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $175,024 | $16,738 | $22,326 | $28,758 | $18,473 | | Total assets | $896,828 | $483,198 | $281,259 | $150,588 | $122,414 | | Deferred revenue | $77,054 | $58,204 | $45,377 | $23,799 | $19,939 | | Total liabilities | $683,967 | $395,891 | $189,844 | $91,575 | $62,144 | | Total stockholders' equity (deficit) | $212,861 | $87,307 | $91,415 | $59,013 | $60,270 | Other Financial Data (in thousands, except %) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Annualized recurring revenue value at year-end | $209,700 | $131,919 | $106,099 | $63,968 | $58,918 | | Annual net dollar retention rate | 93 % | 97 % | 98 % | 95 % | 90 % | | Adjusted EBITDA | $82,520 | $53,105 | $30,316 | $12,616 | $4,143 | Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net loss | $(45,371) | $(10,839) | $(18,725) | $(13,513) | $(13,664) | | Depreciation and amortization expense | 34,621 | 21,347 | 11,914 | 9,794 | 8,451 | | Interest expense, net | 22,313 | 13,273 | 6,582 | 2,781 | 1,858 | | Loss on debt extinguishment | 2,317 | — | — | — | — | | Other expense (income), net | 3,240 | 1,781 | (289) | 678 | 544 | | Provision for income taxes | (6,805) | (9,809) | 1,296 | 1,530 | 1,039 | | Stock-based compensation expense | 25,754 | 14,130 | 9,977 | 4,333 | 2,741 | | Acquisition-related expense | 39,657 | 18,728 | 15,092 | 5,583 | 2,455 | | Non-recurring litigation costs | — | — | — | 25 | 406 | | Purchase accounting deferred revenue discount | 6,794 | 4,494 | 4,469 | 1,405 | 313 | | **Adjusted EBITDA** | **$82,520** | **$53,105** | **$30,316** | **$12,616** | **$4,143** | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial results, emphasizing the acquisition-driven growth strategy, revenue composition, operating costs, and liquidity - Upland's revenue grew **878%** from $22.8 million in 2012 to $222.6 million in 2019, primarily driven by acquisitions[173](index=173&type=chunk) - Subscription and support revenue accounted for **92% of total revenue in 2019**, indicating a strong recurring revenue model[174](index=174&type=chunk) - The company completed **five acquisitions in 2019** and **four in 2018**, contributing significantly to revenue growth[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) - Total revenue increased by **$72.7 million (49%)** from 2018 to 2019, with **$65.6 million** attributed to acquisitions closed after January 1, 2018[207](index=207&type=chunk) - Net loss increased significantly from **$(10.8) million** in 2018 to **$(45.4) million** in 2019, primarily due to higher acquisition-related and interest expenses[204](index=204&type=chunk) - Acquisition-related expenses more than doubled from **$18.7 million** in 2018 to **$39.7 million** in 2019[221](index=221&type=chunk)[222](index=222&type=chunk) - As of December 31, 2019, the company had **$175.0 million in cash** and **$539.0 million in outstanding borrowings** under its credit facility[231](index=231&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) Key Financial Metrics (in thousands, except %) | Metric | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Annualized recurring revenue value at year-end | $209,700 | $131,919 | $106,099 | | Annual net dollar retention rate | 97 % | 98 % | 93 % | | Adjusted EBITDA | $82,520 | $53,105 | $30,316 | [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=65&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to interest rate, foreign exchange, and inflation risks, with hedging instruments used for its term loan - Interest rate risk on the **$540 million term loan is hedged**, fixing the rate at **5.4%** for 7 years, while the $60 million revolving facility has a floating rate[282](index=282&type=chunk) - A hypothetical **10% change in foreign currency exchange rates** would have resulted in a **$5.9 million** change in revenue for 2019[283](index=283&type=chunk) - The company has not engaged in foreign currency hedging strategies to date[283](index=283&type=chunk) - Inflation has not had a material effect on the business in the last three fiscal years[285](index=285&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=67&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements, which received an unqualified opinion despite an adverse opinion on internal controls - The Independent Registered Public Accounting Firm issued an **adverse opinion** on the company's internal control over financial reporting as of December 31, 2019, due to a material weakness[292](index=292&type=chunk)[510](index=510&type=chunk)[511](index=511&type=chunk) - Despite the material weakness, the auditor expressed an **unqualified opinion** on the consolidated financial statements for the period ended December 31, 2019[291](index=291&type=chunk)[513](index=513&type=chunk) Consolidated Balance Sheets (in thousands) | Asset/Liability | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $175,024 | $16,738 | | Total current assets | $238,880 | $67,288 | | Intangible assets, net | $282,727 | $179,572 | | Goodwill | $346,134 | $225,322 | | Total assets | $896,828 | $483,198 | | Total current liabilities | $129,367 | $107,649 | | Notes payable, less current maturities | $521,881 | $273,713 | | Total liabilities | $683,967 | $395,891 | | Total stockholders' equity | $212,861 | $87,307 | Consolidated Statements of Operations (in thousands) | Metric | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Total revenue | $222,637 | $149,885 | $97,952 | | Gross profit | $153,520 | $101,296 | $64,305 | | Total operating expenses | $177,826 | $106,890 | $75,441 | | Loss from operations | $(24,306) | $(5,594) | $(11,136) | | Net loss | $(45,371) | $(10,839) | $(18,725) | | Net loss per common share | $(1.96) | $(0.54) | $(1.02) | Consolidated Statements of Cash Flows (in thousands) | Activity | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $12,076 | $7,347 | $7,716 | | Net cash used in investing activities | $(217,761) | $(161,686) | $(110,775) | | Net cash provided by financing activities | $363,768 | $149,923 | $96,178 | | Change in cash and cash equivalents | $158,286 | $(5,588) | $(6,432) | | Cash and cash equivalents, end of period | $175,024 | $16,738 | $22,326 | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=114&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with its accountants on accounting and financial disclosure matters - There were no changes in or disagreements with accountants on accounting and financial disclosure[498](index=498&type=chunk) [Item 9A. Controls and Procedures](index=114&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were not effective due to a material weakness in the income tax provision review process - Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2019, due to a material weakness in the income tax provision review process[499](index=499&type=chunk)[504](index=504&type=chunk) - The assessment of internal control over financial reporting excluded recently acquired InGenius and Altify, which constituted **16.4% of total assets**[502](index=502&type=chunk) - Remediation plans are underway to add resources and modify internal processes to improve the income tax review process[506](index=506&type=chunk) [Item 9B. Other Information](index=115&type=section&id=Item%209B.%20Other%20Information) The company reported no other information required by this item - No other information is required to be reported[507](index=507&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=116&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, officers, and governance is incorporated by reference from the 2020 Proxy Statement - Information on directors, executive officers, and corporate governance is **incorporated by reference** from the 2020 Annual Meeting of Stockholders Proxy Statement[521](index=521&type=chunk) - The company has adopted a "Code of Business Conduct and Ethics" applicable to its directors, officers, and employees, available on its website[520](index=520&type=chunk) [Item 11. Executive Compensation](index=116&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation details are incorporated by reference from the 2020 Proxy Statement - Executive compensation information is **incorporated by reference** from the 2020 Annual Meeting of Stockholders Proxy Statement[521](index=521&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=116&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference from the 2020 Proxy Statement - Security ownership information for certain beneficial owners and management is **incorporated by reference** from the 2020 Annual Meeting of Stockholders Proxy Statement[522](index=522&type=chunk) [Item 13. Certain Relationships and Related Transactions and Director Independence](index=116&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the 2020 Proxy Statement - Information on certain relationships, related transactions, and director independence is **incorporated by reference** from the 2020 Annual Meeting of Stockholders Proxy Statement[522](index=522&type=chunk) [Item 14. Principal Accountant Fees and Services](index=116&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Principal accountant fees and services information is incorporated by reference from the 2020 Proxy Statement - Information on principal accountant fees and services is **incorporated by reference** from the 2020 Annual Meeting of Stockholders Proxy Statement[523](index=523&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=116&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and provides an index of exhibits filed with the report - Financial statements are listed on the "Index to Consolidated Financial Statements" in Item 8[523](index=523&type=chunk) - An Exhibit Index is provided, detailing various agreements, certificates, and other documents, many of which are incorporated by reference[523](index=523&type=chunk)[528](index=528&type=chunk)[529](index=529&type=chunk)[531](index=531&type=chunk)[532](index=532&type=chunk) - Schedule II-Valuation and Qualifying Accounts has been omitted because the required information is included in the notes to the consolidated financial statements[525](index=525&type=chunk) [Item 16. Form 10-K Summary](index=116&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the report - Form 10-K Summary is not applicable[524](index=524&type=chunk) SIGNATURES

Upland Software, Inc. (NASDAQ:UPLD) Q4 2019 Earnings Conference Call February 27, 2020 5:00 PM ET Company Participants Jack McDonald – Chairman and Chief Executive Officer Mike Hill – Chief Financial Officer Tim Mattox – President and Chief Operating Officer Conference Call Participants Kamil Mielczarek – William Blair Brent Thill – Jefferies Jeff Van Rhee – Craig-Hallum Richard Baldry – Roth Capital Terry Tillman – SunTrust Robinson Alex Sklar – Raymond James Operator Ladies and gentlemen, thank you for st ...

Upland Overview January 2020 Safe Harbor Statement This presentation includes "forward-looking statements," which are subject to substantial risks, uncertainties and assumptions, subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Accordingly, you should not place undue reliance on these forward-looking statements. Forward-looking statements include any statement that does not directly relate to any historical or current fact and often include words such as "believ ...

Upland Overview December 2019 Safe Harbor Statement This presentation includes "forward-looking statements," which are subject to substantial risks, uncertainties and assumptions, subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Accordingly, you should not place undue reliance on these forward-looking statements. Forward-looking statements include any statement that does not directly relate to any historical or current fact and often include words such as "belie ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 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 of Delaware 27-2992077 (Stat ...

Upland Software, Inc. (NASDAQ:UPLD) Q3 2019 Results Conference Call November 7, 2019 5:00 PM ET Company Participants Jack McDonald - Chairman and Chief Executive Officer Mike Hill - Chief Financial Officer Tim Mattox - President and Chief Operating Officer Conference Call Participants Brad Zelnick - Credit Suisse Bhavan Suri - William Blair Luv Sodha - Jefferies Brian Peterson - Raymond James Eric Lemus - SunTrust Operator Ladies and gentlemen thank you for standing by and welcome to the Upland Software Thi ...

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Part I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Upland Software, Inc.'s unaudited condensed consolidated financial statements for the period ended June 30, 2019, reflect significant asset and revenue growth, primarily from acquisitions, alongside increased operating losses and debt [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2019, total assets increased to **$657.6 million**, driven by cash from a stock offering and acquisition-related goodwill and intangibles, while total liabilities rose to **$424.6 million** due to higher notes payable Condensed Consolidated Balance Sheets (in thousands of USD) | | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total current assets** | $157,014 | $67,288 | | **Goodwill** | $273,363 | $225,322 | | **Intangible assets, net** | $207,232 | $179,572 | | **Total assets** | **$657,580** | **$483,198** | | **Total current liabilities** | $107,472 | $107,649 | | **Notes payable, less current maturities** | $305,335 | $273,713 | | **Total liabilities** | **$424,608** | **$395,891** | | **Total stockholders' equity** | **$232,972** | **$87,307** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2019 total revenue increased **47%** to **$53.0 million**, but a significant rise in operating expenses, including **$9.3 million** in acquisition-related costs, led to a net loss of **$5.4 million** Condensed Consolidated Statements of Operations (in thousands of USD, except per share data) | | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | | :--- | :--- | :--- | | **Total revenue** | $53,013 | $35,946 | | **Gross profit** | $36,430 | $25,097 | | **Loss from operations** | $(5,532) | $(691) | | **Net loss** | **$(5,369)** | **$(5,230)** | | **Net loss per common share, basic and diluted** | $(0.24) | $(0.26) | [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) The company reported a comprehensive loss of **$7.1 million** for Q2 2019, including a **$5.4 million** net loss and a **$1.8 million** foreign currency translation adjustment loss Condensed Consolidated Statements of Comprehensive Loss (in thousands of USD) | | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | | :--- | :--- | :--- | | **Net loss** | $(5,369) | $(5,230) | | **Foreign currency translation adjustment** | $(1,757) | $(2,227) | | **Comprehensive loss** | **$(7,126)** | **$(7,457)** | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity significantly increased to **$233.0 million** by June 30, 2019, primarily due to a **$151.2 million** increase in additional paid-in capital from a common stock issuance - A public offering of 3,795,000 shares of common stock resulted in a **$151.2 million** increase in additional paid-in capital during the six months ended June 30, 2019[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2019, operating activities provided **$5.4 million** in cash, investing activities used **$83.2 million** for acquisitions, and financing activities provided **$168.6 million**, leading to a **$91.6 million** increase in cash and equivalents Condensed Consolidated Statements of Cash Flows (in thousands of USD) | | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $5,396 | $3,740 | | **Net cash used in investing activities** | $(83,188) | $(45,877) | | **Net cash provided by financing activities** | $168,617 | $39,220 | | **Change in cash and cash equivalents** | $91,623 | $(3,289) | | **Cash and cash equivalents, end of period** | **$108,361** | **$19,037** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial items, including two 2019 acquisitions contributing **$3.8 million** in revenue, the adoption of ASU 2016-02 recognizing **$6.3 million** in right-of-use assets, subsequent debt refinancing, and **$161.1 million** in remaining performance obligations - Completed the acquisitions of Postup Holdings and Kapost in Q2 2019, contributing approximately **$2.4 million** and **$1.4 million** in revenue, respectively, since their acquisition dates[45](index=45&type=chunk) - Adopted the new lease standard ASU 2016-02 on January 1, 2019, recognizing **$6.3 million** in right-of-use assets and corresponding lease liabilities[41](index=41&type=chunk)[42](index=42&type=chunk) - As of June 30, 2019, the company had approximately **$161.1 million** of revenue expected from remaining performance obligations, with **71%** anticipated in the next 12 months[116](index=116&type=chunk) - Subsequent to the quarter end, on August 6, 2019, the company entered into a new **$350 million** senior secured term loan B facility and a new **$60 million** revolving credit facility, replacing its existing credit facility[121](index=121&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q2 2019's **47%** revenue growth primarily to acquisitions, with Adjusted EBITDA rising to **$19.1 million**, while acquisition-related expenses increased **195%**, and liquidity improved significantly with cash reaching **$108.4 million** after a **$151.1 million** stock offering [Overview](index=32&type=section&id=Overview) Upland provides cloud-based enterprise work management software, driving growth primarily through **twenty-two acquisitions** from 2012 to 2019, increasing revenue from **$22.8 million** to **$149.9 million** and expanding international revenue share - The company's growth strategy involves acquiring complementary technologies and businesses to expand product families, customer base, and market access[133](index=133&type=chunk) - Revenue grew from **$22.8 million** in 2012 to **$149.9 million** in 2018, representing an approximate **558%** growth rate[132](index=132&type=chunk) [Key Metrics](index=33&type=section&id=Key%20Metrics) Adjusted EBITDA, a key non-GAAP metric, increased to **$19.1 million** for Q2 2019 and **$36.9 million** for the six months ended June 30, 2019, reflecting improved operational performance Reconciliation of Net Loss to Adjusted EBITDA (in thousands of USD) | | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | | :--- | :--- | :--- | | **Net loss** | $(5,369) | $(5,230) | | **Adjustments** | $24,452 | $17,775 | | **Adjusted EBITDA** | **$19,083** | **$12,545** | [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Q2 2019 total revenue increased **47%** to **$53.0 million**, driven by acquisitions, while operating expenses, particularly acquisition-related costs, rose **195%** to **$9.3 million**, reflecting the company's growth strategy - Q2 2019 total revenue increased by **$17.1 million** (**47%**) year-over-year, with **$15.2 million** attributed to acquisitions not fully in the comparative period[146](index=146&type=chunk) - Acquisition-related expenses for Q2 2019 were **$9.3 million**, a **195%** increase from **$3.1 million** in Q2 2018, reflecting recent transaction costs[178](index=178&type=chunk)[179](index=179&type=chunk) - A tax benefit of **$6.1 million** was recorded in Q2 2019, compared to a **$0.9 million** provision in Q2 2018, primarily due to the release of a valuation allowance from domestic entity acquisitions with deferred tax liabilities[187](index=187&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity significantly improved in H1 2019, with cash and cash equivalents rising to **$108.4 million** due to **$151.1 million** net proceeds from a May 2019 stock offering, and subsequent debt refinancing with a new **$350 million** term loan - Cash and cash equivalents increased to **$108.4 million** as of June 30, 2019, largely due to a public stock offering[191](index=191&type=chunk) - In May 2019, the company completed a public offering of 3,795,000 shares, raising net proceeds of **$151.1 million**[197](index=197&type=chunk) - On August 6, 2019, the company replaced its existing credit facility with a new **$350 million** term loan and a **$60 million** revolving credit facility[195](index=195&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies interest rate risk on variable-rate debt, foreign currency exchange risk from international operations, and inflation as primary market risks, noting a **$0.3 million** impact from a 100 basis point interest rate change and a **$3.0 million** revenue impact from a 10% foreign exchange rate change - A hypothetical 100 basis point change in interest rates would result in a maximum potential change to annual interest expense of **$0.3 million** based on debt levels at June 30, 2019[213](index=213&type=chunk) - A hypothetical **10%** change in foreign currency exchange rates would have resulted in a change in revenue of **$3.0 million** for the six months ended June 30, 2019[214](index=214&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2019 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2019[219](index=219&type=chunk) Part II. OTHER INFORMATION [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's 2018 Annual Report on Form 10-K, referring stakeholders to that document for a comprehensive overview - There have been no material changes during 2019 to the risk factors included in the company's 2018 Annual Report on Form 10-K[222](index=222&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section indexes all exhibits filed with the Form 10-Q, including CEO and CFO certifications required by Sarbanes-Oxley Act and XBRL data files - The Exhibit Index lists certifications from the CEO and CFO pursuant to Sarbanes-Oxley Act Sections 302 and 906, along with XBRL instance and taxonomy documents[226](index=226&type=chunk)

Upland Software, Inc. (NASDAQ:UPLD) Q2 2019 Results Conference Call August 7, 2019 5:00 PM ET Company Participants Jack McDonald – Chairman and Chief Executive Officer Mike Hill – Chief Financial Officer Tim Mattox – President and Chief Operating Officer Conference Call Participants Bhavan Suri – William Blair John DiFucci – Jefferies Richard Davis – Canaccord Genuity Jeff Van Rhee – Craig-Hallum Joshua Reilly – Needham Brian Peterson – Raymond James Richard Baldry – Roth Capital Eric Lemus – SunTrust Robin ...