AUSTIN, Texas--(BUSINESS WIRE)--Upland Software, Inc. (Nasdaq: UPLD), a leader in AI-powered knowledge and content management software, today announced it has earned 49 badges in G2's Winter 2026 market reports, highlighting consistent value and customer validation for its products. Upland BA Insight, the company's AI enablement solution, increased earned badges this season, while AI-powered proposal management software, Upland Qvidian, continues to deliver impactful results. Upland Panviva als. ...

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 Data and Key Metrics Changes - Q1 adjusted EBITDA was $13.1 million, resulting in an adjusted EBITDA margin of 21%, up from 20% reported in 2024 [6][16] - Free cash flow for Q1 was $7.9 million, which was higher than expected [7] - The company anticipates adjusted EBITDA margins to increase to 26% in Q2 and further expand in the second half of 2025 [12][20] Business Line Data and Key Metrics Changes - The core organic growth rate in Q1 was flat, but is expected to move to 2% in Q2, with further increases anticipated throughout 2025 [6][11] - The company welcomed 107 new customers in Q1, including 19 major customers, and expanded relationships with 245 existing customers [7][8] Market Data and Key Metrics Changes - The divestiture of mobile messaging product lines lowered the 2025 revenue guidance midpoint by $25 million but had no impact on adjusted EBITDA guidance [11][18] - The net dollar retention rate for the core business as of December 31, 2024, would have been 99% excluding divestitures, compared to the reported 96% [11] Company Strategy and Development Direction - The company is focusing on markets with the strongest competitive advantage, higher margins, and higher growth rates [11][27] - The divestitures are part of a strategy to streamline operations and enhance focus on core products [11][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about positive core organic growth starting in Q2 and increasing throughout the year [12][27] - The company has seen improvements in digital marketing capabilities, contributing to increased marketing sourced bookings [36][38] Other Important Information - The company paid down $34.2 million of debt in Q1 2025, with total debt paydowns in 2025 reaching approximately $34.2 million [13][17] - The average customer lifetime for the core business is now over eight years, indicating strong customer retention [47] Q&A Session Summary Question: How should the market view the go-to-market strategy following the termination of the Chief Sales Officer? - Management noted significant progress in the go-to-market strategy, emphasizing a focus on markets with competitive advantages and realigning sales with product group general managers [27] Question: Should additional divestitures be expected as the company streamlines towards growth? - Management indicated that no material additional divestitures are anticipated, as the repositioning of the business is largely complete [29] Question: What is driving the faster organic growth and improving margins? - The primary driver of improvement is the focus on high-margin, high-growth products, along with investments in digital marketing and product enhancements [34][36] Question: When was the full build-out of the India development center completed, and what benefits have been seen? - The full build-out was completed at the end of the previous year, with increased productivity and throughput being observed [42][43] Question: What is the outlook for free cash flow and any one-time costs related to divestitures? - The company expects $20 million in free cash flow for the year, excluding one-time divestiture-related expenses [45] Question: What is the visibility into top-line acceleration and pipeline metrics? - Management reported strong visibility with 93% of revenue being recurring and a net dollar retention rate of 99%, indicating confidence in future growth [47][49]

Financial Data and Key Metrics Changes - Q1 adjusted EBITDA was $13.1 million, resulting in an adjusted EBITDA margin of 21%, up from 20% in 2024 [6][16] - Free cash flow for Q1 was $7.9 million, which was higher than expected [7] - The company anticipates adjusted EBITDA margins to increase to 26% in Q2 and further expand in the second half of 2025 [6][20] Business Line Data and Key Metrics Changes - The core organic growth rate in Q1 was flat, but is expected to improve to 2% in Q2, with further increases anticipated throughout 2025 [6][12] - The company welcomed 107 new customers in Q1, including 19 major customers, and expanded relationships with 245 existing customers [7][8] Market Data and Key Metrics Changes - The divestiture of mobile messaging product lines lowered the 2025 revenue guidance midpoint by $25 million but did not impact adjusted EBITDA guidance [12][18] - The net dollar retention rate for the core business as of December 31, 2024, would have been 99% excluding divestitures, compared to the reported 96% [12] Company Strategy and Development Direction - The company is focusing on markets with the strongest competitive advantage, higher margins, and higher growth rates [27] - The divestitures are part of a strategy to streamline operations and enhance focus on core products [29] - The company has realigned sales with general managers of product groups, eliminating the need for centralized sales management [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about positive growth momentum, projecting a core organic growth rate of 2% in Q2 and further increases in the second half of 2025 [6][12] - The company has seen improvements in digital marketing capabilities, contributing to increased marketing-sourced bookings [35] - Management noted strong visibility in revenue, with 93% being recurring and an average customer lifetime of nearly nine years [45] Other Important Information - The company paid down $34.2 million of debt in Q1 2025, with total paydowns in 2025 reaching approximately $34.2 million, in addition to $189 million in 2024 [14][17] - The full year 2025 adjusted EBITDA is expected to be between $55 million and $64 million, representing a 7% increase from 2024 [19][20] Q&A Session Summary Question: How should the market view the go-to-market strategy following the termination of the Chief Sales Officer? - Management highlighted progress in the go-to-market strategy, focusing on competitive advantages and higher growth rates, with a positive core organic growth rate expected [27] Question: Should additional divestitures be expected as the company streamlines towards growth? - Management indicated that substantial repositioning has been completed, and no material additional divestitures are anticipated at this time [29] Question: What is driving the faster organic growth and improving margins? - Management attributed the improvements primarily to focusing on high-margin, high-growth products and enhancing digital marketing capabilities [35] Question: When was the full build-out of the India development center completed, and when will benefits be seen? - The full build-out was completed at the end of the previous year, with increased productivity expected from ongoing R&D investments [42] Question: What is the outlook for free cash flow and any one-time costs related to divestitures? - Management confirmed a revised free cash flow outlook of $20 million, excluding one-time divestiture-related expenses [43] Question: What is the visibility into top-line acceleration and pipeline metrics? - Management reported strong visibility with a high net dollar retention rate and an average contract term of two years, indicating confidence in exceeding the 2% growth target [45]