Upland Software(US:UPLD)2024-02-23 01:22Financial Data and Key Metrics Changes - For Q1 2024, adjusted EBITDA is expected to be between $11.3 million and $14.3 million, representing a 27% decrease from Q1 2023 [1] - Full year 2024 adjusted EBITDA is projected to be between $49 million and $61 million, a 15% decrease from 2023 [3] - Total revenue for Q4 2023 was $72.2 million, an 8% year-over-year decline [77] - Recurring revenue from subscription support decreased 8% year-over-year to $68.2 million [70] Business Line Data and Key Metrics Changes - Perpetual license revenue increased slightly to $1.8 million in Q4 2023 from $1.6 million in Q4 2022 [70] - Professional services revenue was $2.2 million for Q4 2023, reflecting a 26% year-over-year decline [70] Market Data and Key Metrics Changes - The company expects total revenue for the full year ending December 31, 2024, to be between $259 million and $283 million, indicating a 9% decline at the midpoint from 2023 [2] Company Strategy and Development Direction - The company aims to exit 2024 with a core organic growth rate of around 3%, focusing on building a true sales culture and enhancing product development [13][68] - The strategy includes significant investments in sales, marketing, and product development, particularly through the establishment of a Center of Excellence in India [9][12] - The company plans to turn acquisitions back on, targeting one or two deals in 2024, while also continuing a $25 million stock buyback program [41][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive core organic growth by the end of 2024, despite current challenges [13][68] - The company is focusing on mid-single digits core organic growth and margin expansion beginning in 2025 [36][40] Other Important Information - As of December 31, 2023, the company had outstanding net debt of approximately $245 million, with gross debt around $482 million [73] - The company reported free cash flow of $48.7 million for the full year 2023 [72] Q&A Session Summary Question: Update on go-to-market strategy and core revenue growth - Management indicated significant improvements in product development and sales processes, with a target of exiting 2024 with 3% core revenue growth [8][13] Question: Guidance on product revenue and non-core vs core revenues - Management noted that core organic growth is expected to turn positive in 2024, while sunset assets will continue to impact revenue [16][17] Question: Sales approach and cross-selling opportunities - The sales approach is primarily product-based, with a mix of inside and field sales, aiming for a balanced focus on expansion and new sales [22][25] Question: Expectations for free cash flow in 2024 - The company is targeting $20 million to $25 million of free cash flow for 2024 [26] Question: Capital allocation strategy between M&A, buybacks, and debt pay-down - The company plans to continue its stock buyback program while also looking for strategic acquisitions, balancing these with debt management [43][45] Question: Successes in bundling solutions and go-to-market motion - Management highlighted that product-centric sales are most effective, with a focus on expanding existing customer relationships [47][48] Question: Free cash flow contribution from sunset assets - Sunset assets are expected to contribute low free cash flow, with minimal impact anticipated [50]