Upland Software, Inc. (Nasdaq: UPLD), a leader in cloud-based
tools for digital transformation, today announced financial and
operating results for the second quarter of 2021 and issued
guidance for its third quarter and full year of 2021.
Second Quarter 2021 Financial Highlights
- Total revenue was $76.3 million, an increase of 7% from $71.3
million in the second quarter of 2020.
- Subscription and support revenue was $72.4 million, an increase
of 7% from $67.7 million in the second quarter of 2020.
- GAAP net loss was $19.0 million, or a loss of $0.63 cents per
share, compared to a GAAP net loss of $14.2 million, or a loss of
$0.57 cents per share, in the second quarter of 2020.
- Adjusted EBITDA was $23.7 million, or 31% of total revenue,
compared to $23.7 million, or 33% of total revenue, in the second
quarter of 2020.
- GAAP operating cash flow was $10.8 million, compared to GAAP
operating cash flow of $0.8 million in the second quarter of 2020.
Free cash flow was $10.6 million, compared to free cash flow of
$0.4 million in the second quarter of 2020.
- Cash on hand as of the end of the second quarter of 2021 was
$176.5 million.
"In Q2, we closed the strategic and accretive acquisition of
Panviva,” said Jack McDonald, Upland’s chairman and chief executive
officer. “In addition, we posted strong free cash flow, while
continuing to invest in our go-to-market growth initiatives,” he
added. “Our acquisition pipeline remains robust and we are active
in the market for additional opportunities.”
Second Quarter Business Highlights
- We expanded relationships with 311 existing customers, 51 of
which were major expansions. We also welcomed 133 new customers to
Upland in the second quarter, including 32 new major
customers.
- We completed the acquisition of Panviva, expanding our presence
in the knowledge management market for regulated industries
including utilities, healthcare, and financial services.
- We welcomed Dan Doman as our new Chief Product Officer. Dan is
focused on optimizing our product strategy and sharpening our
R&D focus, all while working closely with our M&A and
go-to-market functions.
Business Outlook
For the quarter ending September 30, 2021, Upland expects
reported total revenue to be between $75.4 and $79.4 million,
including subscription and support revenue between $72.2 and $75.8
million, for growth in recurring revenue of 4% at the mid-point
over the quarter-ended September 30, 2020. Third quarter 2021
Adjusted EBITDA is expected to be between $23.9 and $25.9 million,
for an Adjusted EBITDA margin of 32% at the mid-point. This
Adjusted EBITDA guide at the mid-point is in line with the
quarter-ended September 30, 2020.
For the full year ending December 31, 2021, Upland expects
reported total revenue to be between $300.8 and $312.8 million,
including subscription and support revenue between $287.1 and
$297.1 million, for growth in recurring revenue of 5% at the
mid-point over the year ended December 31, 2020. Full year 2021
Adjusted EBITDA is expected to be between $94.8 and $100.8 million,
for an Adjusted EBITDA margin of 32% at the mid-point. This
Adjusted EBITDA guide at the midpoint is a reduction of 2% over the
year ended December 31, 2020, reflecting incremental investments in
our go-to-market activities.
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 1-866-270-1533 in the United States or
+1-412-317-0797 if outside the United States, using the conference
identification number: 10158078. This webcast will contain
forward-looking statements and other material information regarding
Upland’s financial and operating results.
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 helps global businesses accelerate digital transformation
with a powerful cloud software library that provides choice,
flexibility, and value. Our growing library of products delivers
the "last mile" plug-in processes, reporting, and job specific
workflows that major cloud platforms and homegrown systems don’t
provide. We focus on specific business challenges and support every
corner of the organization, operating at scale and delivering quick
time to value for our 1,700+ enterprise customers. To learn more,
visit 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.
Upland defines Adjusted EBITDA as net income (loss), calculated
in accordance with GAAP, plus net income (loss) from discontinued
operations, depreciation and amortization expense, interest
expense, net, other expense (income), net, provision for income
taxes, stock-based compensation expense, acquisition-related
expenses, non-recurring litigation costs, and purchase accounting
adjustments for deferred revenue.
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, 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 $25,000 in annual recurring revenue.
Upland defines major expansions as existing customers who
expanded the amount of annual recurring revenue under their
contract by at least $25,000.
Upland defines cash gross margin as product revenue less
subscription and support cost of sales, excluding depreciation
& amortization.
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 "believe," "expect," "anticipate," "intend," "plan,"
"estimate," "seek," "will," "may," "hope," "predict," "could,"
"should," "would," "project," 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,
sustain or increase profitability or predict future results; our
ability to attract and retain customers; our ability to deliver
high-quality customer service; the growth of demand for enterprise
work management applications; our plans regarding, and our ability
to effectively manage, our growth; our plans regarding future
acquisitions and our ability to consummate and integrate
acquisitions; maintaining our senior management and key personnel;
our ability to maintain and expand our direct sales organization;
our ability to obtain financing in the future on acceptable terms
or at all; the performance of our resellers; our ability to adapt
to changing market conditions and competition; our ability to
successfully enter new markets and manage our international
expansion; the operation and reliability of our third-party data
centers and other service providers; our ability to adapt to
technological change and continue to innovate; our ability to
integrate our applications with other software applications; our
ability to comply with privacy laws and regulations; and factors
that could affect our business and financial results identified in
Upland's filings with the Securities and Exchange Commission (the
"SEC"), including Upland's most recent 10-K filed with the SEC.
Additional information will also be set forth in Upland's future
quarterly reports on Form 10-Q, annual reports on Form 10-K and
other filings that Upland makes with the SEC. 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 June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenue:
Subscription and support
$
72,405
$
67,699
$
143,058
$
131,590
Perpetual license
415
491
767
852
Total product revenue
72,820
68,190
143,825
132,442
Professional services
3,444
3,125
6,408
6,905
Total revenue
76,264
71,315
150,233
139,347
Cost of revenue:
Subscription and support
23,161
21,200
45,843
41,139
Professional services and other
1,851
2,472
3,596
4,734
Total cost of revenue
25,012
23,672
49,439
45,873
Gross profit
51,252
47,643
100,794
93,474
Operating expenses:
Sales and marketing
14,298
11,820
26,730
22,751
Research and development
11,113
10,294
22,053
19,412
General and administrative
19,192
17,655
43,561
34,331
Depreciation and amortization
10,278
9,037
20,021
18,308
Acquisition-related expenses
5,534
5,781
15,120
20,939
Total operating expenses
60,415
54,587
127,485
115,741
Income (loss) from operations
(9,163
)
(6,944
)
(26,691
)
(22,267
)
Other expense:
Interest expense, net
(7,942
)
(7,873
)
(15,729
)
(15,516
)
Other expense, net
(399
)
(15
)
(162
)
(1,417
)
Total other expense
(8,341
)
(7,888
)
(15,891
)
(16,933
)
Loss before benefit from (provision for)
income taxes
(17,504
)
(14,832
)
(42,582
)
(39,200
)
Benefit from (provision for) income
taxes
(1,538
)
673
2,856
4,960
Net loss
$
(19,042
)
$
(14,159
)
$
(39,726
)
$
(34,240
)
Net loss per common share, basic and
diluted
$
(0.63
)
$
(0.57
)
$
(1.32
)
$
(1.37
)
Weighted-average common shares
outstanding, basic and diluted
30,097,749
25,032,996
30,034,252
25,057,715
Upland Software, Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
June 30,
December 31,
2021
2020
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
176,539
$
250,029
Accounts receivable, net of allowance
38,936
44,472
Deferred commissions, current
7,878
5,784
Unbilled receivables
5,652
4,561
Prepaid and other
13,579
12,694
Total current assets
242,584
317,540
Tax credits receivable
2,729
2,427
Property and equipment, net
3,161
2,778
Operating lease right-of-use asset
6,740
10,124
Intangible assets, net
304,752
279,975
Goodwill
470,182
383,598
Deferred commissions, noncurrent
14,444
12,962
Other assets
1,807
1,816
Total assets
$
1,046,399
$
1,011,220
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
15,608
$
5,395
Accrued compensation
15,142
8,138
Accrued expenses and other current
liabilities
13,361
13,438
Deferred revenue
95,245
87,552
Due to sellers
11,143
416
Operating lease liabilities, current
3,621
3,315
Current maturities of notes payable
3,153
3,166
Total current liabilities
157,273
121,420
Notes payable, less current maturities
516,751
518,437
Deferred revenue, noncurrent
1,667
1,587
Operating lease liabilities,
noncurrent
8,537
8,387
Noncurrent deferred tax liability, net
31,774
24,092
Interest rate swap liabilities
17,754
30,032
Other long-term liabilities
1,206
650
Total liabilities
734,962
704,605
Stockholders’ equity:
Common stock
3
3
Additional paid-in capital
546,771
515,219
Accumulated other comprehensive loss
(13,238
)
(26,234
)
Accumulated deficit
(222,099
)
(182,373
)
Total stockholders’ equity
311,437
306,615
Total liabilities and stockholders’
equity
$
1,046,399
$
1,011,220
Upland Software, Inc.
Condensed Consolidated Statements
of Cash Flows
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Operating activities
Net loss
$
(19,042
)
$
(14,159
)
$
(39,726
)
$
(34,240
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
13,201
11,658
25,669
23,395
Change in fair value of liabilities to
sellers of businesses
(2,729
)
155
(2,729
)
155
Deferred income taxes
1,951
(637
)
(3,389
)
(4,985
)
Amortization of deferred costs
2,081
1,026
3,848
1,920
Foreign currency re-measurement loss
(4
)
(90
)
10
497
Non-cash interest and other expense
561
556
1,115
1,108
Non-cash stock compensation expense
13,550
10,980
31,374
20,300
Changes in operating assets and
liabilities, net of purchase business combinations:
Accounts receivable
6,599
6,852
10,174
5,188
Prepaids and other
(2,616
)
(3,965
)
(3,631
)
(6,743
)
Accounts payable
1,375
(2,819
)
5,915
(6,258
)
Accrued expenses and other liabilities
(648
)
(1,314
)
(2,424
)
(7,256
)
Deferred revenue
(3,474
)
(7,438
)
(2,898
)
2,415
Net cash provided by (used in) operating
activities
10,805
805
23,308
(4,504
)
Investing activities
Purchase of property and equipment
(225
)
(400
)
(507
)
(696
)
Purchase of customer relationships
—
—
—
(201
)
Purchase business combinations, net of
cash acquired
(19,799
)
—
(92,417
)
(67,651
)
Net cash used in investing activities
(20,024
)
(400
)
(92,924
)
(68,548
)
Financing activities
Payments on finance leases
—
(28
)
(4
)
(83
)
Proceeds from notes payable, net of
issuance costs
(113
)
(70
)
(113
)
(142
)
Payments on notes payable
(1,350
)
(1,350
)
(2,700
)
(2,700
)
Taxes paid related to net share settlement
of equity awards
—
(1,372
)
—
(2,140
)
Issuance of common stock, net of issuance
costs
177
—
178
41
Additional consideration paid to sellers
of businesses
—
(8,580
)
(742
)
(9,580
)
Net cash used in financing activities
(1,286
)
(11,400
)
(3,381
)
(14,604
)
Effect of exchange rate fluctuations on
cash
372
217
(493
)
542
Change in cash and cash equivalents
(10,133
)
(10,778
)
(73,490
)
(87,114
)
Cash and cash equivalents, beginning of
period
186,672
98,688
250,029
175,024
Cash and cash equivalents, end of
period
$
176,539
$
87,910
$
176,539
$
87,910
Upland Software, Inc.
Reconciliation of Adjusted
EBITDA
(in thousands, unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation of net loss to Adjusted
EBITDA:
Net loss
$
(19,042
)
$
(14,159
)
$
(39,726
)
$
(34,240
)
Add:
Depreciation and amortization expense
13,201
11,658
25,669
23,395
Interest expense, net
7,942
7,873
15,729
15,516
Other expense (income), net
399
15
162
1,417
Benefit from income taxes
1,538
(673
)
(2,856
)
(4,960
)
Stock-based compensation expense
13,550
10,980
31,374
20,300
Acquisition-related expense
5,534
5,781
15,120
20,939
Purchase accounting deferred revenue
discount
606
2,272
1,100
5,973
Adjusted EBITDA
$
23,728
$
23,747
$
46,572
$
48,340
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 June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation of net loss to non-GAAP
net income:
Net loss
$
(19,042
)
$
(14,159
)
$
(39,726
)
$
(34,240
)
Add:
Stock-based compensation expense
13,550
10,980
31,374
20,300
Amortization of purchased intangibles
12,732
11,160
24,745
22,365
Amortization of debt discount
561
556
1,115
1,108
Acquisition-related expense
5,534
5,781
15,120
20,939
Purchase accounting deferred revenue
discount
606
2,272
1,100
5,973
Tax effect of adjustments above
(1,361
)
(1,440
)
(2,675
)
(3,308
)
Non-GAAP net income
$
12,580
$
15,150
$
31,053
$
33,137
Weighted average ordinary shares
outstanding, basic
30,097,749
25,032,996
30,034,252
25,057,715
Weighted average ordinary shares
outstanding, diluted
30,695,700
25,419,592
30,648,957
25,470,778
Non-GAAP earnings per share, basic
$
0.42
$
0.61
$
1.03
$
1.32
Non-GAAP earnings per share, diluted
$
0.41
$
0.60
$
1.01
$
1.30
Upland Software, Inc.
Reconciliation of Operating Cash
Flow to Free Cash Flow
(in thousands, unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation of Operating Cash Flow
to Free Cash Flow:
Net cash provided by (used in) operating
activities
$
10,805
$
805
$
23,308
$
(4,504
)
Less: Purchase of Property and
Equipment
(225
)
(400
)
(507
)
(696
)
Free Cash Flow
$
10,580
$
405
$
22,801
$
(5,200
)
Upland Software, Inc.
Supplemental Financial
Information
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Stock-based compensation:
Cost of revenue
$
563
$
570
$
1,005
$
888
Research and development
942
1,019
1,656
1,634
Sales and marketing
1,619
898
2,756
1,447
General and administrative
10,426
8,493
25,957
16,331
Total
$
13,550
$
10,980
$
31,374
$
20,300
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Depreciation:
Cost of revenue
$
11
$
45
$
22
$
116
Operating expense
458
453
902
914
Total
$
469
$
498
$
924
$
1,030
Amortization:
Cost of revenue
$
2,912
$
2,576
$
5,626
$
4,971
Operating expense
9,820
8,584
19,119
17,394
Total
$
12,732
$
11,160
$
24,745
$
22,365
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210804006060/en/
Investor Relations Contact: Mike Hill
investor-relations@uplandsoftware.com 512-960-1031
Media Contact: Kendell Kelton media@uplandsoftware.com
678-575-7428
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