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]

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]

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]