Upland Software Reports Fourth Quarter 2023 Financial Results
- Total revenue for Q4 2023 was $72.2 million, an 8% decrease from the previous year.
- Subscription and support revenue also decreased by 8% to $68.2 million.
- GAAP net loss was $16.0 million, an improvement from $22.7 million in Q4 2022.
- Adjusted EBITDA was $14.1 million, representing 19% of total revenue.
- Cash on hand at the end of Q4 2023 was $236.6 million.
- Upland earned 44 badges in G2's Winter 2024 market reports, showcasing product recognition and customer satisfaction.
- The company expanded relationships with existing customers and welcomed new customers in Q4 2023.
- Upland's focus on growth and value for customers is highlighted by various product recognitions and launches.
- Guidance for Q1 and full year 2024 reflects investments in sales, marketing, and product development.
- Adjusted EBITDA for Q1 2024 is expected to be between $11.3 and $14.3 million.
- Full year 2024 revenue is projected to be between $259.0 and $283.0 million.
- Upland's executive team will host a conference call to discuss financial results and business outlook.
- Total revenue and subscription revenue saw a decline in Q4 2023 compared to the previous year.
- Adjusted EBITDA decreased to 19% of total revenue in Q4 2023.
- The company's guidance for Q1 and full year 2024 reflects a decrease in revenue compared to the previous periods.
- Investments in sales, marketing, and product development may impact profitability in the short term.
Insights
The reported decline in total revenue and subscription and support revenue for Upland Software in Q4 2023 indicates a contraction in the company's core business activities. The decrease of 8% year-over-year in both metrics is notable as subscription revenues are typically a stable and predictable source of income for software companies. Despite this contraction, the improvement in GAAP net loss from $22.7 million to $16.0 million suggests that the company has managed to reduce its expenses or improve operational efficiency.
However, the decline in Adjusted EBITDA from 31% to 19% of total revenue points to a potential deterioration in profitability. It is important for stakeholders to consider the impact of these financials on the company's valuation and future cash flows, especially given the guidance for a continued decline in revenue and Adjusted EBITDA margin for the first quarter and full year of 2024.
The repurchase of the company's common stock could be seen as a sign of self-confidence by the management in the company's intrinsic value, despite the revenue decline. However, investors should assess whether this use of cash aligns with long-term value creation, particularly when the company is experiencing a downward trend in revenue.
The announcement of expanded relationships with 307 existing customers and the addition of 154 new customers, including 15 major ones, suggests that Upland Software has a growing customer base, which could be a positive indicator for future growth and market penetration. The recognition of Upland's products in G2's Winter 2024 market reports and the Enterprise Content Management Data Quadrant report may enhance the company's reputation and could lead to increased sales over time.
However, the strategic decision to sunset non-strategic product offerings and customer contracts, referred to as 'Sunset Assets', may be contributing to the immediate decline in revenue. This realignment could be a strategic move to focus on core products and markets, which may benefit the company in the long run but presents short-term challenges. The launch of the new Customer Reference Activity Hub and the integration with Azure AI Search indicate an ongoing commitment to product development and innovation, which are crucial in the competitive software industry.
The financial results of Upland Software reflect broader economic trends affecting the technology sector, including potential shifts in demand for digital transformation tools. The reduction in revenue and Adjusted EBITDA margin may be symptomatic of market saturation or increased competition. The company's forward-looking guidance suggests that management anticipates continued pressure on the financials, which could be indicative of a cautious outlook on the economy or sector-specific headwinds.
Investments in sales, marketing and product development, as part of Upland's growth plan, may impact short-term profitability but are essential for long-term competitiveness. Stakeholders should consider the balance between these investments and the company's financial health, especially in a potentially tightening economic environment. The cash on hand will be a critical factor in sustaining operations and funding these strategic initiatives.
Fourth Quarter 2023 Financial Highlights
-
Total revenue was
$72.2 million 8% from$78.8 million -
Subscription and support revenue was
$68.2 million 8% from$74.1 million -
GAAP net loss was
$16.0 million $22.7 million $17.4 million $24.0 million $0.56 $0.75 -
Adjusted EBITDA was
$14.1 million 19% of total revenue, compared to$24.3 million 31% of total revenue, in the fourth quarter of 2022. -
GAAP operating cash flow was
$8.8 million $5.8 million $8.6 million $5.7 million -
Cash on hand as of the end of the fourth quarter of 2023 was
$236.6 million $10.8 million
"We continue to make progress on our growth plan and remain focused on building great software and delivering value for customers," said Jack McDonald, Upland's chairman and chief executive officer. "We are proud to see continued and increasing recognition of our products as evidenced by the 44 badges earned in G2's Winter 2024 market reports."
Fourth Quarter Business Highlights
- We expanded relationships with 307 existing customers, 33 of which were major expansions. We also welcomed 154 new customers to Upland in the fourth quarter, including 15 new major customers.
- Upland was recognized, for the third year in a row, as a gold medalist and leader in the 2023 Enterprise Content Management Data Quadrant report from SoftwareReviews for our document management and workflow automation product, FileBound. The award is based on the combined knowledge of real users, and placement is based on overall satisfaction with product features, vendor experience, capabilities, and emotional sentiment.
- Upland RO Innovation has launched an all-new Customer Reference Activity Hub to help sales, marketing, and customer success teams find and engage with their most influential customer references so they can boost brand awareness and generate more business.
- In December, we hosted a webinar on content search intelligence featuring how Azure AI Search, when seamlessly integrated with BA Insight's cutting-edge technology, revolutionizes how organizations access, manage, and derive insights from their data.
- Upland earned 44 badges in G2’s Winter 2024 market reports across a variety of products. These included our knowledge management solutions, Upland RightAnswers and Upland Panviva, along with Upland Qvidian, our proposal management software, and digital marketing products, Upland Adestra and Upland Second Street. Rankings on G2 reports are based on independent data provided by real software buyers.
Business Outlook
The following guidance reflects another year of significant incremental sales, marketing and product investments that Upland is making as part of its comprehensive growth plan as well as the effects of decreasing revenue and expenses related to our previously announced decisions to sunset certain non-strategic product offerings and a limited number of non-strategic customer contracts (collectively referred to as our “Sunset Assets”).
For the quarter ending March 31, 2024, Upland expects reported total revenue to be between
For the full year ending December 31, 2024, Upland expects reported total revenue to be between
Conference Call Details
Upland's executive team will host a live conference call and webcast at 4:00 p.m. Central Time, 5:00 p.m. Eastern Time today to review Upland’s financial results and outlook for the business. The call can be accessed via a webcast on investor.uplandsoftware.com, or by dialing 1-800-715-9871 in
Following the completion of the conference call, a recording of the webcast will be made available at investor.uplandsoftware.com for twelve months.
About Upland Software
Upland Software, Inc. enables global businesses to work smarter with over 25 proven cloud software products that increase revenue, reduce costs, and deliver immediate value. Our solutions cover digital marketing, knowledge management, contact center service, sales productivity, content lifecycle automation, and more. Upland's powerful cloud products are trusted by more than 10,000 global customers. Learn how Upland helps businesses achieve outcomes that matter at www.uplandsoftware.com.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: Adjusted EBITDA, non-GAAP net income (loss), non-GAAP net income (loss) per share and free cash flow.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results, such as our revenues excluding the impact for foreign currency fluctuations or our operating performance excluding not only non-cash charges, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and they are used by our institutional investors and the analyst community to help them analyze the health of our business. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the tables provided below in this release.
We are unable to reconcile any forward-looking non-GAAP financial measures to their directly comparable GAAP financial measures because the information which is needed to complete a reconciliation is unavailable at this time without unreasonable effort. Additionally, we are unable to quantify the impact of foreign currency exchange fluctuations on components of our income statement beyond revenues because the information which is needed to do so is unavailable at this time without unreasonable effort.
Upland defines Adjusted EBITDA as net income (loss), calculated in accordance with GAAP, plus depreciation and amortization expense, interest expense, net, other expense (income), net, provision (benefit) for income taxes, stock-based compensation expense, acquisition-related expenses, non-recurring litigation costs, purchase accounting adjustments for deferred revenue and impairment of goodwill.
Upland defines non-GAAP net income (loss) as net income (loss), calculated in accordance with GAAP, plus, amortization of purchased intangible assets, amortization of debt discount, loss on debt extinguishment, stock-based compensation expenses, acquisition-related expenses, non-recurring litigation expenses, purchase accounting adjustments for deferred revenue, non-recurring provision for income tax, impairment of goodwill and the related tax effect of the adjustments above.
Upland defines free cash flow as GAAP operating cash flow less purchases of property and equipment.
Upland defines major accounts as accounts with greater than or equal to
Upland defines major expansions as existing customers who expanded the amount of annual recurring revenue under their contract by at least
Upland defines cash gross margin as product revenue less subscription and support cost of sales, excluding depreciation & amortization.
In connection with periodic reviews of our business, we have decided to discontinue the availability of certain non-strategic product offerings and a limited number of non-strategic customer contracts (collectively referred to as “Sunset Assets”).
Overage Charges are subscription and support revenues earned in addition to contractual minimum customer commitments as a result of the usage volume of services including text and e-mail messaging and third-party pass-through costs that exceed the levels stipulated in contracts with the Company.
Upland defines Core Organic Growth Rate as the percentage change between two reported periods in subscription and support revenue, excluding subscription and support revenue from Sunset Assets and Overage Charges. We calculate our year-over-year Core Organic Growth Rate as though all acquisitions or dispositions closed as of the end of the latest period were closed as of the first day of the prior year period presented. Core Organic Growth Rate does not represent actual organic revenue generated by our business as it stood at the beginning of the respective period.
Forward-looking Statements
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance, including our guidance related to future performance, and are subject to substantial risks, uncertainties and assumptions. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make. Accordingly, you should not place undue reliance on these forward-looking statements. Forward-looking statements include any statement that does not directly relate to any historical or current fact and often include words such as “anticipate,” “believe,” “may,” “will,” “continue,” “seek,” “estimate,” “intend,” “hope,” “predict,” “could,” “should,” “would,” “project,” “plan,” “expect” or the negative or plural of these words or similar expressions, although not all forward-looking statements contain these words.
Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including, but are not limited to: our financial performance and our ability to achieve or sustain profitability or predict future results; our plans regarding future acquisitions, acquisition expense timing and our ability to consummate and integrate acquisitions; our ability to expand our go to market operations, including our marketing and sales organization and cross selling opportunities, and successfully increase sales of our products; our ability to obtain financing in the future on acceptable terms or at all; our expectations with respect to revenue, cost of revenue, average annual spend, margin expense and operating expenses in future periods; our expectations with regard to revenue from perpetual licenses and professional services; our ability to adapt to macroeconomic factors impacting the global economy, including foreign currency exchange risk, inflation and supply chain constraints; our ability to attract and retain customers; our ability to successfully enter new markets and manage our international expansion; our ability to comply with privacy laws and regulations; our ability to deliver high-quality customer service; our plans regarding, and our ability to effectively manage, our growth, including organic growth; maintaining our senior management team and key personnel; the performance of our resellers; our ability to adapt to changing market conditions and competition; our ability to adapt to technological change and continue to innovate; global economic and financial market conditions and uncertainties; the growth of demand for cloud-based, digital transformation applications; our ability to integrate our applications with other software applications; maintaining and expanding our relationships with third parties; costs associated with defending intellectual property infringement and other claims; our ability to maintain, protect and enhance our brand and intellectual property; our expectations with regard to trends, such as seasonality, which affect our business; impairments to goodwill and other intangible assets; our beliefs regarding how our applications benefit customers and what our competitive strengths are; the operation, reliability and security of our third-party data centers; our expectations as to the payment of dividends; our Share Repurchase Plan, including expectations regarding the timing and manner of repurchases made under the Share Repurchase Plan; our current level of indebtedness, including our exposure to variable interest rate risk; the potential elimination or limitation of tax incentives or tax losses and/or reductions of
The forward-looking statements herein represent Upland's views as of the date of this press release, and these views could change. However, while Upland may elect to update these forward-looking statements at some point in the future, Upland specifically disclaims any obligation to do so, except as required by law. These forward-looking statements should not be relied upon as representing the views of Upland as of any date subsequent to the date of this press release.
Upland Software, Inc. |
||||||||||||||||
Condensed Consolidated Statements of Operations |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Subscription and support |
|
$ |
68,184 |
|
|
$ |
74,148 |
|
|
$ |
281,554 |
|
|
$ |
297,887 |
|
Perpetual license |
|
|
1,760 |
|
|
|
1,628 |
|
|
|
6,077 |
|
|
|
6,948 |
|
Total product revenue |
|
|
69,944 |
|
|
|
75,776 |
|
|
|
287,631 |
|
|
|
304,835 |
|
Professional services |
|
|
2,234 |
|
|
|
3,035 |
|
|
|
10,221 |
|
|
|
12,468 |
|
Total revenue |
|
|
72,178 |
|
|
|
78,811 |
|
|
|
297,852 |
|
|
|
317,303 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
||||||||
Subscription and support |
|
|
22,483 |
|
|
|
24,201 |
|
|
|
88,894 |
|
|
|
93,948 |
|
Professional services and other |
|
|
1,226 |
|
|
|
2,506 |
|
|
|
7,467 |
|
|
|
9,793 |
|
Total cost of revenue |
|
|
23,709 |
|
|
|
26,707 |
|
|
|
96,361 |
|
|
|
103,741 |
|
Gross profit |
|
|
48,469 |
|
|
|
52,104 |
|
|
|
201,491 |
|
|
|
213,562 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Sales and marketing |
|
|
17,438 |
|
|
|
14,131 |
|
|
|
64,342 |
|
|
|
59,416 |
|
Research and development |
|
|
11,662 |
|
|
|
10,799 |
|
|
|
49,375 |
|
|
|
46,187 |
|
General and administrative |
|
|
13,895 |
|
|
|
14,352 |
|
|
|
61,264 |
|
|
|
70,462 |
|
Depreciation and amortization |
|
|
14,405 |
|
|
|
11,699 |
|
|
|
58,614 |
|
|
|
43,669 |
|
Acquisition-related expenses |
|
|
451 |
|
|
|
2,632 |
|
|
|
3,060 |
|
|
|
21,556 |
|
Impairment of goodwill |
|
|
— |
|
|
|
12,500 |
|
|
|
128,755 |
|
|
|
12,500 |
|
Total operating expenses |
|
|
57,851 |
|
|
|
66,113 |
|
|
|
365,410 |
|
|
|
253,790 |
|
Loss from operations |
|
|
(9,382 |
) |
|
|
(14,009 |
) |
|
|
(163,919 |
) |
|
|
(40,228 |
) |
Other expense: |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
(5,322 |
) |
|
|
(6,275 |
) |
|
|
(18,684 |
) |
|
|
(29,145 |
) |
Other income (expense), net |
|
|
(675 |
) |
|
|
(2,479 |
) |
|
|
236 |
|
|
|
(781 |
) |
Total other expense |
|
|
(5,997 |
) |
|
|
(8,754 |
) |
|
|
(18,448 |
) |
|
|
(29,926 |
) |
Loss before benefit from (provision for) income taxes |
|
|
(15,379 |
) |
|
|
(22,763 |
) |
|
|
(182,367 |
) |
|
|
(70,154 |
) |
Benefit from (provision for) income taxes |
|
|
(633 |
) |
|
|
87 |
|
|
|
2,493 |
|
|
|
1,741 |
|
Net loss |
|
$ |
(16,012 |
) |
|
$ |
(22,676 |
) |
|
$ |
(179,874 |
) |
|
$ |
(68,413 |
) |
Preferred stock dividends |
|
|
(1,359 |
) |
|
|
(1,300 |
) |
|
|
(5,347 |
) |
|
|
(1,846 |
) |
Net loss attributable to common stockholders |
|
$ |
(17,371 |
) |
|
$ |
(23,976 |
) |
|
$ |
(185,221 |
) |
|
$ |
(70,259 |
) |
Net income (loss) per common share: |
|
|
|
|
|
|
|
|
||||||||
Net loss per common share, basic and diluted |
|
$ |
(0.56 |
) |
|
$ |
(0.75 |
) |
|
$ |
(5.77 |
) |
|
$ |
(2.23 |
) |
Weighted-average common shares outstanding, basic and diluted |
|
|
30,995,441 |
|
|
|
31,906,980 |
|
|
|
32,074,906 |
|
|
|
31,528,881 |
|
Upland Software, Inc. |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(in thousands) |
||||||||
|
|
December 31, |
|
December 31, |
||||
|
|
2023 |
|
2022 |
||||
|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
236,559 |
|
|
$ |
248,653 |
|
Accounts receivable, net of allowance |
|
|
38,765 |
|
|
|
47,594 |
|
Deferred commissions, current |
|
|
10,429 |
|
|
|
10,961 |
|
Unbilled receivables |
|
|
2,701 |
|
|
|
5,313 |
|
Income tax receivable, current |
|
|
3,775 |
|
|
|
542 |
|
Prepaid expenses and other current assets |
|
|
8,004 |
|
|
|
8,232 |
|
Total current assets |
|
|
300,233 |
|
|
|
321,295 |
|
Tax credits receivable |
|
|
1,657 |
|
|
|
2,411 |
|
Property and equipment, net |
|
|
1,932 |
|
|
|
1,830 |
|
Operating lease right-of-use asset |
|
|
2,929 |
|
|
|
5,719 |
|
Intangible assets, net |
|
|
182,349 |
|
|
|
248,851 |
|
Goodwill |
|
|
353,778 |
|
|
|
477,043 |
|
Deferred commissions, noncurrent |
|
|
12,568 |
|
|
|
13,794 |
|
Interest rate swap assets |
|
|
14,270 |
|
|
|
41,168 |
|
Other assets |
|
|
308 |
|
|
|
1,348 |
|
Total assets |
|
$ |
870,024 |
|
|
$ |
1,113,459 |
|
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY |
||||||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
8,137 |
|
|
$ |
14,939 |
|
Accrued compensation |
|
|
7,174 |
|
|
|
7,393 |
|
Accrued expenses and other current liabilities |
|
|
7,050 |
|
|
|
10,644 |
|
Deferred revenue |
|
|
102,763 |
|
|
|
106,465 |
|
Liabilities due to sellers of businesses |
|
|
— |
|
|
|
5,429 |
|
Operating lease liabilities, current |
|
|
2,351 |
|
|
|
3,205 |
|
Current maturities of notes payable |
|
|
3,172 |
|
|
|
3,136 |
|
Total current liabilities |
|
|
130,647 |
|
|
|
151,211 |
|
Notes payable, less current maturities |
|
|
473,502 |
|
|
|
511,847 |
|
Deferred revenue, noncurrent |
|
|
3,860 |
|
|
|
4,707 |
|
Operating lease liabilities, noncurrent |
|
|
1,597 |
|
|
|
4,947 |
|
Noncurrent deferred tax liability, net |
|
|
16,025 |
|
|
|
18,416 |
|
Other long-term liabilities |
|
|
461 |
|
|
|
1,170 |
|
Total liabilities |
|
|
626,092 |
|
|
|
692,298 |
|
Series A Convertible Preferred stock |
|
|
117,638 |
|
|
|
112,291 |
|
Stockholders’ equity: |
|
|
|
|
||||
Common stock |
|
|
3 |
|
|
|
3 |
|
Additional paid-in capital |
|
|
608,995 |
|
|
|
606,755 |
|
Accumulated other comprehensive loss |
|
|
6,168 |
|
|
|
11,110 |
|
Accumulated deficit |
|
|
(488,872 |
) |
|
|
(308,998 |
) |
Total stockholders’ equity |
|
|
126,294 |
|
|
|
308,870 |
|
Total liabilities, convertible preferred stock and stockholders’ equity |
|
$ |
870,024 |
|
|
$ |
1,113,459 |
|
Upland Software, Inc. |
||||||||||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||||||||||
(in thousands) |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
||||||||
Operating activities |
|
|
|
|
|
|
|
|
||||||||
Net loss |
|
$ |
(16,012 |
) |
|
$ |
(22,676 |
) |
|
$ |
(179,874 |
) |
|
$ |
(68,413 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
|
17,510 |
|
|
|
14,813 |
|
|
|
71,985 |
|
|
|
56,146 |
|
Change in fair value of liabilities due to sellers of businesses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(75 |
) |
Deferred income taxes |
|
|
(1,558 |
) |
|
|
(3,784 |
) |
|
|
(4,209 |
) |
|
|
(7,075 |
) |
Amortization of deferred costs |
|
|
3,261 |
|
|
|
3,157 |
|
|
|
13,170 |
|
|
|
12,198 |
|
Foreign currency re-measurement loss |
|
|
445 |
|
|
|
(52 |
) |
|
|
(538 |
) |
|
|
(12 |
) |
Non-cash interest, net and other income, net |
|
|
(896 |
) |
|
|
569 |
|
|
|
(2,976 |
) |
|
|
2,256 |
|
Non-cash stock-based compensation expense |
|
|
4,682 |
|
|
|
7,579 |
|
|
|
22,874 |
|
|
|
41,602 |
|
Non-cash loss on impairment of goodwill |
|
|
— |
|
|
|
12,500 |
|
|
|
128,755 |
|
|
|
12,500 |
|
Non-cash loss on retirement of fixed assets |
|
|
1 |
|
|
|
53 |
|
|
|
47 |
|
|
|
79 |
|
Changes in operating assets and liabilities, net of purchase business combinations: |
|
|
|
|
|
|
|
|
||||||||
Accounts receivable |
|
|
(1,252 |
) |
|
|
(8,496 |
) |
|
|
8,916 |
|
|
|
9,691 |
|
Prepaid expenses and other current assets |
|
|
4,934 |
|
|
|
4,922 |
|
|
|
(471 |
) |
|
|
10,070 |
|
Other assets |
|
|
(1,393 |
) |
|
|
(2,608 |
) |
|
|
10,866 |
|
|
|
(12,811 |
) |
Accounts payable |
|
|
(6,025 |
) |
|
|
(5,711 |
) |
|
|
(6,896 |
) |
|
|
(7,175 |
) |
Accrued expenses and other liabilities |
|
|
(1,459 |
) |
|
|
(2,757 |
) |
|
|
(6,188 |
) |
|
|
(14,013 |
) |
Deferred revenue |
|
|
6,551 |
|
|
|
8,332 |
|
|
|
(5,518 |
) |
|
|
(4,989 |
) |
Net cash provided by operating activities |
|
|
8,789 |
|
|
|
5,841 |
|
|
|
49,943 |
|
|
|
29,979 |
|
Investing activities |
|
|
|
|
|
|
|
|
||||||||
Purchase of property and equipment |
|
|
(186 |
) |
|
|
(148 |
) |
|
|
(1,220 |
) |
|
|
(866 |
) |
Purchase business combinations, net of cash acquired |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(62,356 |
) |
Net cash used in investing activities |
|
|
(186 |
) |
|
|
(148 |
) |
|
|
(1,220 |
) |
|
|
(63,222 |
) |
Financing activities |
|
|
|
|
|
|
|
|
||||||||
Payments of debt costs |
|
|
(31 |
) |
|
|
(3 |
) |
|
|
(221 |
) |
|
|
(203 |
) |
Payments on notes payable |
|
|
(1,350 |
) |
|
|
(1,350 |
) |
|
|
(40,400 |
) |
|
|
(5,400 |
) |
Repurchase of shares |
|
|
(10,845 |
) |
|
|
— |
|
|
|
(14,060 |
) |
|
|
— |
|
Issuance of Series A Convertible Preferred stock, net of issuance costs |
|
|
— |
|
|
|
(75 |
) |
|
|
— |
|
|
|
110,445 |
|
Taxes paid related to net share settlement of equity awards |
|
|
(349 |
) |
|
|
(417 |
) |
|
|
(1,091 |
) |
|
|
(1,576 |
) |
Issuance of common stock, net of issuance costs |
|
|
3 |
|
|
|
1 |
|
|
|
5 |
|
|
|
191 |
|
Additional consideration paid to sellers of businesses |
|
|
(67 |
) |
|
|
(1,132 |
) |
|
|
(5,617 |
) |
|
|
(9,306 |
) |
Net cash provided by (used in) financing activities |
|
|
(12,639 |
) |
|
|
(2,976 |
) |
|
|
(61,384 |
) |
|
|
94,151 |
|
Effect of exchange rate fluctuations on cash |
|
|
1,004 |
|
|
|
4,216 |
|
|
|
567 |
|
|
|
(1,413 |
) |
Change in cash and cash equivalents |
|
|
(3,032 |
) |
|
|
6,933 |
|
|
|
(12,094 |
) |
|
|
59,495 |
|
Cash and cash equivalents, beginning of period |
|
|
239,591 |
|
|
|
241,720 |
|
|
|
248,653 |
|
|
|
189,158 |
|
Cash and cash equivalents, end of period |
|
$ |
236,559 |
|
|
$ |
248,653 |
|
|
$ |
236,559 |
|
|
$ |
248,653 |
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
||||||||
Cash paid for interest, net of interest rate swaps |
|
$ |
8,990 |
|
|
$ |
7,316 |
|
|
$ |
32,137 |
|
|
$ |
29,120 |
|
Cash paid for taxes |
|
$ |
879 |
|
|
$ |
713 |
|
|
$ |
7,106 |
|
|
$ |
3,876 |
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
||||||||
Business combination consideration including holdbacks and earnouts |
|
$ |
— |
|
|
$ |
306 |
|
|
$ |
— |
|
|
$ |
8,126 |
|
Upland Software, Inc. |
||||||||||||||||
Reconciliation of Adjusted EBITDA |
||||||||||||||||
(in thousands, unaudited) |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Reconciliation of net loss to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
||||||||
Net loss |
|
$ |
(16,012 |
) |
|
$ |
(22,676 |
) |
|
$ |
(179,874 |
) |
|
$ |
(68,413 |
) |
Add: |
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization expense |
|
|
17,510 |
|
|
|
14,813 |
|
|
|
71,985 |
|
|
|
56,146 |
|
Interest expense, net |
|
|
5,322 |
|
|
|
6,275 |
|
|
|
18,684 |
|
|
|
29,145 |
|
Other expense (income), net |
|
|
675 |
|
|
|
2,479 |
|
|
|
(236 |
) |
|
|
781 |
|
Provision for (benefit from) income taxes |
|
|
633 |
|
|
|
(87 |
) |
|
|
(2,493 |
) |
|
|
(1,741 |
) |
Stock-based compensation expense |
|
|
4,682 |
|
|
|
7,579 |
|
|
|
22,874 |
|
|
|
41,602 |
|
Acquisition-related expense |
|
|
451 |
|
|
|
2,632 |
|
|
|
3,060 |
|
|
|
21,556 |
|
Non-recurring litigation costs |
|
|
699 |
|
|
|
18 |
|
|
|
1,126 |
|
|
|
33 |
|
Purchase accounting deferred revenue discount |
|
|
92 |
|
|
|
730 |
|
|
|
557 |
|
|
|
5,496 |
|
Impairment of goodwill |
|
|
— |
|
|
|
12,500 |
|
|
|
128,755 |
|
|
|
12,500 |
|
Adjusted EBITDA |
|
$ |
14,052 |
|
|
$ |
24,263 |
|
|
$ |
64,438 |
|
|
$ |
97,105 |
|
Upland Software, Inc. |
||||||||||||||||
Reconciliation of Non-GAAP Net Loss and Non-GAAP EPS |
||||||||||||||||
(in thousands, except share and per share data, unaudited) |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Reconciliation of net loss to non-GAAP net income: |
|
|
|
|
|
|
|
|
||||||||
Net loss |
|
$ |
(16,012 |
) |
|
$ |
(22,676 |
) |
|
$ |
(179,874 |
) |
|
$ |
(68,413 |
) |
Add: |
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense |
|
|
4,682 |
|
|
|
7,579 |
|
|
|
22,874 |
|
|
|
41,602 |
|
Amortization of purchased intangibles |
|
|
17,184 |
|
|
|
14,473 |
|
|
|
70,566 |
|
|
|
54,609 |
|
Amortization of debt discount |
|
|
581 |
|
|
|
569 |
|
|
|
2,313 |
|
|
|
2,256 |
|
Acquisition-related expense |
|
|
451 |
|
|
|
2,632 |
|
|
|
3,060 |
|
|
|
21,556 |
|
Nonrecurring litigation expense |
|
|
699 |
|
|
|
18 |
|
|
|
1,126 |
|
|
|
33 |
|
Purchase accounting deferred revenue discount |
|
|
92 |
|
|
|
730 |
|
|
|
557 |
|
|
|
5,496 |
|
Impairment of goodwill |
|
|
— |
|
|
|
12,500 |
|
|
|
128,755 |
|
|
|
12,500 |
|
Tax effect of adjustments above |
|
|
(2,302 |
) |
|
|
(1,560 |
) |
|
|
(11,509 |
) |
|
|
(7,985 |
) |
Non-GAAP net income |
|
$ |
5,375 |
|
|
$ |
14,265 |
|
|
$ |
37,868 |
|
|
$ |
61,654 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average ordinary shares outstanding, basic |
|
|
30,995,441 |
|
|
|
31,906,980 |
|
|
|
32,074,906 |
|
|
|
31,528,881 |
|
Weighted average ordinary shares outstanding, diluted |
|
|
37,992,837 |
|
|
|
38,639,536 |
|
|
|
38,920,323 |
|
|
|
34,059,394 |
|
Non-GAAP earnings per share, basic |
|
$ |
0.17 |
|
|
$ |
0.45 |
|
|
$ |
1.18 |
|
|
$ |
1.96 |
|
Non-GAAP earnings per share, diluted |
|
$ |
0.14 |
|
|
$ |
0.37 |
|
|
$ |
0.97 |
|
|
$ |
1.81 |
|
Upland Software, Inc. |
||||||||||||||||
Reconciliation of Operating Cash Flow to Free Cash Flow |
||||||||||||||||
(in thousands, unaudited) |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Reconciliation of operating cash flow to Free Cash Flow: |
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities |
|
$ |
8,789 |
|
|
$ |
5,841 |
|
|
$ |
49,943 |
|
|
$ |
29,979 |
|
Less: Purchase of property and equipment |
|
|
(186 |
) |
|
|
(148 |
) |
|
|
(1,220 |
) |
|
|
(866 |
) |
Free Cash Flow |
|
$ |
8,603 |
|
|
$ |
5,693 |
|
|
$ |
48,723 |
|
|
$ |
29,113 |
|
Upland Software, Inc. |
||||||||||||
Supplemental Financial Information |
||||||||||||
(in thousands, unaudited) |
||||||||||||
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
Stock-based compensation: |
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
$ |
102 |
|
$ |
497 |
|
$ |
952 |
|
$ |
1,984 |
Research and development |
|
|
552 |
|
|
626 |
|
|
2,463 |
|
|
2,733 |
Sales and marketing |
|
|
495 |
|
|
655 |
|
|
2,059 |
|
|
4,239 |
General and administrative |
|
|
3,533 |
|
|
5,801 |
|
|
17,400 |
|
|
32,646 |
Total |
|
$ |
4,682 |
|
$ |
7,579 |
|
$ |
22,874 |
|
$ |
41,602 |
|
|
|
|
|
|
|
|
|
||||
Depreciation: |
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
$ |
— |
|
$ |
2 |
|
$ |
5 |
|
$ |
8 |
Operating expense |
|
|
326 |
|
|
338 |
|
|
1,414 |
|
|
1,529 |
Total |
|
$ |
326 |
|
$ |
340 |
|
$ |
1,419 |
|
$ |
1,537 |
|
|
|
|
|
|
|
|
|
||||
Amortization: |
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
$ |
3,105 |
|
$ |
3,112 |
|
$ |
13,366 |
|
$ |
12,469 |
Operating expense |
|
|
14,079 |
|
|
11,361 |
|
|
57,200 |
|
|
42,140 |
Total |
|
$ |
17,184 |
|
$ |
14,473 |
|
$ |
70,566 |
|
$ |
54,609 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240222570197/en/
Investor Relations Contact:
Michael D. Hill
investor-relations@uplandsoftware.com
512-960-1031
Media Contact:
Lloyd Berry
512-960-1010
media@uplandsoftware.com
Source: Upland Software Inc.
FAQ
What was Upland Software's total revenue for Q4 2023?
What was the GAAP net loss for Upland Software in Q4 2023?
How did Upland Software's Adjusted EBITDA compare between Q4 2023 and Q4 2022?
What was Upland Software's cash on hand at the end of Q4 2023?
How many badges did Upland Software earn in G2's Winter 2024 market reports?
What is Upland Software's guidance for total revenue in Q1 2024?
What is the projected Adjusted EBITDA margin for Upland Software in Q1 2024?
What is Upland Software's guidance for total revenue in full year 2024?
When will Upland Software's executive team host a conference call to discuss financial results?
