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]

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]

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]