Upland Software(US:UPLD)2021-05-06 03:38Financial Data and Key Metrics Changes - Total revenue for Q1 2021 was $74 million, representing a 9% growth year-over-year [13] - Recurring revenue from subscription and support grew 11% year-over-year to $70.7 million [13] - Adjusted EBITDA for Q1 2021 was $22.8 million, or 31% of total revenue, down from $24.6 million or 36% of total revenue in Q1 2020 [15] - Free cash flow for Q1 2021 was $12.2 million, despite $9.6 million in acquisition-related expenses [15][16] - The company expects full-year 2021 free cash flow to exceed $30 million, potentially over $40 million depending on future acquisitions [16] Business Line Data and Key Metrics Changes - Professional Services revenue was $3 million for the quarter, a 20% year-over-year decline due to COVID-19 travel impacts [13] - Organic recurring revenue growth was 3%, and 6% when excluding political-related revenue from Q1 2020 [9] Market Data and Key Metrics Changes - The company reported a 9% total revenue growth, with a strong performance in recurring revenue [9][13] - The demand environment is showing signs of returning to pre-COVID levels, with a net dollar retention rate in the mid-90s [32] Company Strategy and Development Direction - The company restarted its M&A engine, completing two strategic acquisitions: Second Street and BlueVenn, which are expected to enhance its Customer Experience Management (CXM) suite [9][11] - The acquisition program is now self-sustaining, relying on free cash flow rather than equity capital markets [9] - The company is focusing on cross-selling opportunities and integrating acquired products into existing sales channels [23][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment returning to normal, although they maintain a conservative outlook for the remainder of the year [32] - The company is actively pursuing additional acquisition opportunities across various product suites, including Contact Center and Document Workflow [26][64] Other Important Information - The company has approximately $246.7 million in liquidity, including $186.7 million in cash and a $60 million undrawn revolver [17] - Upland has about $356 million in total tax NOL carry-forwards, with an estimated $215 million available for utilization prior to expiration [17] Q&A Session Summary Question: Progress on BlueVenn and Second Street acquisitions - Management is excited about both acquisitions, which are strategic and accretive, enhancing the CXM product suite [22] Question: M&A funnel opportunities - The company has a strong pipeline across all key product suites, with potential acquisitions likely outside of CXM [26] Question: Cross-sell journey and organic revenue growth - Management indicated that foundational work is being done to support cross-sell efforts, with expectations for growth in 2022 [30][31] Question: Demand environment post-COVID - Management noted that the business proved resilient during COVID, and the demand environment is beginning to normalize [32] Question: Mobile messaging products usage - The company is seeing expected organic growth of 6% when excluding political revenue from the previous year [35] Question: Bookings and pipeline growth - Bookings are in line with expectations, with a mix of new versus expansion deals [39][40] Question: Retaining acquired sales talent - The company focuses on retaining top talent from acquisitions while integrating them into the larger sales organization [46] Question: Update on HP relationship - The relationship with HP is developing positively, with training and pipeline building underway [50][51] Question: Contact center market opportunities - The company sees significant potential in the contact center space and is looking to expand its solution suite in this area [64] Question: M&A pipeline and COVID impact - The COVID impact has led to an influx of potential acquisition targets, with a focus on quality and resilience during the pandemic [68][69]