Upland Software(US:UPLD)2024-11-09 23:43Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $66.7 million, a decrease of 10% year-over-year [15] - Recurring revenue from subscription and support declined 9% year-over-year to $63.8 million [15] - Adjusted EBITDA for Q3 was $14 million, down from $16.2 million in Q3 2023, representing 21% of total revenue [17][26] - Operating expenses for Q3 were $35.6 million, or 53% of total revenue, reflecting ongoing investments in sales, marketing, and product [16] Business Line Data and Key Metrics Changes - Perpetual license revenue decreased to $1.1 million in Q3, down from $1.5 million in Q3 2023 [15] - Professional services revenue was $1.8 million for the quarter, a 32% year-over-year decline [15] - The company welcomed 122 new customers in Q3, including 18 major customers, and expanded relationships with 312 existing customers [7] Market Data and Key Metrics Changes - The company recognized $9 million of deferred gain from the sale of half of its interest rate swaps, triggered by a $177 million paydown of debt [19] - At the end of Q3, the company had outstanding net debt of approximately $241 million, factoring in about $60 million of cash on the balance sheet [20] Company Strategy and Development Direction - The company is focused on continuing cost refinements to support increased EBITDA next year [29] - Investments in modern digital marketing and sales capabilities have led to significant improvements in lead generation and conversion [32][33] - The company aims for positive core organic growth in 2025, targeting low to mid-single digits [34] Management's Comments on Operating Environment and Future Outlook - Management expects to exit 2024 with positive core organic growth and continued expansion of adjusted EBITDA [9] - The company anticipates a decline in total revenue of 7% at the midpoint for the full year 2024 compared to 2023 [25] - Adjusted EBITDA for the full year 2024 is expected to be between $54.1 million and $57.1 million, a decrease of 14% from 2023 [26] Other Important Information - The company has made significant investments in AI solutions, with Upland RightAnswers being recognized in the 2024 KMWorld AI 100 [13] - The company announced the availability of Upland BA Insight for Microsoft Azure AI Search, enhancing its product offerings [11] Q&A Session Summary Question: Inquiry about cost cuts and operational efficiency - Management indicated that costs will continue to decrease, with ongoing refinements contributing to increased EBITDA [29] Question: High-level overview of go-to-market changes - Management highlighted improvements in digital marketing and sales capabilities, leading to better lead generation and conversion [32][33] Question: Strategic thinking on debt repayment and refinancing - Management explained that the $177 million debt paydown was aimed at reducing interest expenses, with plans for refinancing in fiscal year 2025 [35][36]