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]