Upland Software Reports Fourth Quarter 2023 Financial Results

02/22/2024

Upland Software, Inc. (Nasdaq: UPLD), a leader in cloud-based tools for digital transformation, today announced financial and operating results for the fourth quarter 2023 and issued guidance for its first quarter and full year of 2024.

Fourth Quarter 2023 Financial Highlights

  • Total revenue was $72.2 million, a decrease of 8% from $78.8 million in the fourth quarter of 2022.
  • Subscription and support revenue was $68.2 million, a decrease of 8% from $74.1 million in the fourth quarter of 2022.
  • GAAP net loss was $16.0 million compared to a GAAP net loss of $22.7 million in the fourth quarter of 2022. GAAP net loss attributable to common stockholders was $17.4 million compared to GAAP net loss attributable to common stockholders of $24.0 million in the fourth quarter of 2022. GAAP net loss per share attributable to common stockholders was $0.56 per share, compared to a GAAP net loss per share attributable to common stockholders of $0.75 per share in the fourth quarter of 2022.
  • Adjusted EBITDA was $14.1 million, or 19% of total revenue, compared to $24.3 million, or 31% of total revenue, in the fourth quarter of 2022.
  • GAAP operating cash flow was $8.8 million, compared to GAAP operating cash flow of $5.8 million in the fourth quarter of 2022. Free cash flow was $8.6 million, compared to free cash flow of $5.7 million in the fourth quarter of 2022.
  • Cash on hand as of the end of the fourth quarter of 2023 was $236.6 million, after buying back $10.8 million of the Company's outstanding common stock in the quarter.

"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 $65.0 and $71.0 million, including subscription and support revenue between $62.5 and $67.5 million, for a decline in total revenue of 12% at the mid-point from the quarter-ended March 31, 2023. First quarter 2024 Adjusted EBITDA is expected to be between $11.3 and $14.3 million, for an Adjusted EBITDA margin of 19% at the mid-point. This Adjusted EBITDA guide at the mid-point is a decrease of 27% from the quarter-ended March 31, 2023.

For the full year ending December 31, 2024, Upland expects reported total revenue to be between $259.0 and $283.0 million, including subscription and support revenue between $247.0 and $267.0 million, for a decline in total revenue of 9% at the mid-point from the year ended December 31, 2023. Full year 2024 Adjusted EBITDA is expected to be between $49.0 and $61.0 million, for an Adjusted EBITDA margin of 20% at the mid-point. This Adjusted EBITDA guide at the midpoint is a decrease of 15% from the year ended December 31, 2023.

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 North America or 1-646-307-1963 if outside North America, international rates apply. Attendees will need to use access code 8422976 to join the call. 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 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 $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.

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 U.S. federal net operating losses; the risk that we did not consider another contingency included in this list; 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 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

 

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.