Upland Software(UPLD) - 2025 Q1 - Quarterly Results

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