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