Upland Software (UPLD) 2 May 242024 Q1 Earnings call transcript

Thank you for standing by, and welcome to the Upland Software First Quarter 2024 Earnings Call. [Operator Instructions] The conference call will be recorded and simultaneously webcast at investor.uplandsoftware.com, and a replay will be available there for 12 months.By now, everyone should have access to the first quarter 2024 earnings release, which was distributed today at 4:00 p.m. Eastern Time.

If you have not received the release, it's available on Upland's website.I'd now like to turn the call over to Jack McDonald, Chairman and CEO of Upland Software. Please go ahead, sir.

right. All welcome XXXX and call. our to you, earnings QX Thank CFO. Mike I'm by our joined today Hill, We're today's to going start QX review. call with a

that, the then some and Following we get for provide the can before statement? will numbers you Mike, QX read Q&A. detail But our harbor open we'll on and started, it safe up guidance, Mike

Thank Yes. you, Jack.

unavailable Jack. measures is we're back over the reconciliation information call reconcile press results, with operations. on note measures needed of that, this associated to on as that in any laws. revisions During or publicly financial any its additional our today's used announcing Investor tools risks with GAAP the complete and with I'll within securities to comparable do financial analytical A unreasonable unable any effort.With forward-looking provide or the a GAAP in reports discussion most forward-looking statements because non-GAAP We our and call, to on Upland in call, when management statements our we financial statements.On available Relations that, SEC. the website.Please filed to non-GAAP Upland available understand duty comparable to to measures our such which that uncertainties forward-looking intend today are will contained time results, is reconciliations to our information the has to of with assumptions meanings considered measures which provided are to will based include release The non-GAAP Upland are GAAP today. the directly detailed measures statements made of Upland of turn refer management periodic financial to without and section of updates not forward-looking release views the this any currently undertake the is combination at

All right. Thanks, Mike.

some as our revenue came free headlines, the And and execute on adjusted midpoints. green guidance seeing in we expected.Now cash to So and we our plan, EBITDA shoots flow beat continue are emerging. growth our QX we

in sales got a field we've sales sales, customer sales, for which motions. course, closed with inside our DSRs, is green quarter, X year in motion including seeing growth which bookings sales core sales that well of us ARR. X effectiveness that XXX,XXX inside teams as, that and marketing, first those that in rep recall plan.Other efficiency quarter, couple improving. our We're include growth new we rate SEO we're We're increasing. exceeded driving lead. core seeing marketing churn digital multipronged core ranks overall a a deals.We direct cost Our teams.You'll are of in the the organic -- customer organization our bookings positive shoots success this sales by sales as are to inside closed our first per channel, part those increasing, seeing sales qualified is generation close inside saw deals in page deals major starting and pipeline seeing We're and of newer seeing sellers successful leads That averaged and step motion as that from

early rate green growth some of organic plus remains minus So a at to see.Our core we're X%. to exit that goal XXXX shoots or there happy

badges, is the new that more that. we're going first XX hit XXX before, welcomed customers quarter, items a relationships number course, customers, over of guarantees are noted is while cloud-based badges I've the there also new fax and but RightAnswers of Reports. major to A proposal product is front, goals.In various XX in sales Qvidian, that earned Upland existing customers, Upland to to continue receiving Panviva, management of including including our XXXX our which no which to to guidance optimization quarter-over-quarter. and XX recognitions count see.The garner InterFAX, badges major Market GX's number Altify, are portfolio. software We Upland increased highlight. As solutions, included product our Upland conservative to liter its and than company's management we badge we And and couple our that expansions.On in great with Upland in our QX, across new Spring knowledge expanded XXX response software, those That's highlight. service

AI and the transformative management. that.Upland organizations Landscape Upland remains RightAnswers. advances embrace So as included of knowledge continuing them enhancing solutions report helping Forrester's and AI the solutions, to Solutions happy And guiding to future in the was committed Customer through Software management for vendor with a revolution, our notable technology, knowledge see Panviva those of

a of of teams, in across portfolio. is quarter as in diligently development a moment.Our underway to more initiatives AI course, product innovate that our concerned, first So lot worked the have on

partnership also Watsonx we're extraction, We form with proposal choice.We capabilities. an AI integration AI-powered Altify Upland happy with for customers data auto-generated which have very XX AI underway, initiatives of around active exciting integrate an Upland Qvidian's got and including drove Salesforce variety which giving guided and is and a with IBM We've Qvidian, about. automation, IBM with response Watsonx. summarization of OpenAI

partnering the partnerships. AI and Salesforce excited IBM front.We're on with about Salesforce the also So both

with and customers partnerships their compliance and AI us. deeply risk.And but governance be Salesforce introducing to data what that governance, only it when give around technology Our about us need at risk is so and core they enterprise responsibly. is the to trust about to complies these and IBM generative standards utilize it like benefit with this want new And Upland privacy, able our it businesses, about partnerships if customers And our business, space, on the their focus about their can greatly management. it to know care into comes and security,

to like And the over with to the for value so call to deliver that we positions turn that Mike. way going customers.So us said, I'm our back

a investments margin full year Jack. incremental significant outlook reflect is our and in Thank sales, 'XX. and impairment year I'll quarter price expenses, revenue. the stock for quarter we growth $XX.X as revenue our decreased, total charge 'XX, have and the note we in past.Total from we've plan.I first pursuant excluding was for support our plan by subscription or XXXX EBITDA of These the Assets results the decline planned end million, our growth $X.X for from XXXX quarter million and for first of expected, another would product stock right. the the is representing investments and million, as This cash was amortization, million that generally of of making XX% the results for of This of our of for the did of not back total declined services our flow which declines financial X% in to part depreciation expectations. sales, XX% quarter year-over-year $XX.X marketing considering $X.X the XXXX was and All our XXXX.Professional revenue, at license you, of Sunset revenue.Overall X% as we of XX% quarter XX% had cover first triggered or margin.Operating down second decrease our quarter, which a the comp, talked outlook for expenses $XX.X our likely to million runoff with price revenue quarter declined and growth for of line impairment.Our to as revenue about noncash well quarter, quarter in or our XXXX. been not we XX% of Recurring 'XX, year-over-year. at the goodwill as as first adding have stock-based $X.X decision year-over-year and was and $XX.X impairment acquisition-related was free first from first quarter. adjusted million revenue with during in with XX% down depreciation, cash first of quarter product decline. of gross decline total the GAAP was operating $X.X and an of the $XX.X or was EBITDA the XX% in a These and was when first incur first regarding million refer were Had $XX.X goodwill, Sunset million. investments a Sunset the million are our runoff expectations quarter, Perpetual in adjusted revenue, Assets.For amortization, of the consistent planned marketing reflects million revenue the which revenue the million margin Asset product of quarter gross our 'XX, quarter cash gross first should the our was $X.X line flow

the sheet as Our ongoing in net cash $XXX million approximately had XX, debt free of on XXXX.As XX, on XXXX, balance of cash in sheet. generation balance we million our the March factoring after our of addition is cash March outstanding $XXX flow to of approximate

fully approximately of X.X% million the now portion September locking full hedged, term debt $XXX repurchase through XXX August early XXXX. debt in debt XXXX, was X.X XX, shares. note rate we our an March of the maturity through to common of ended the was $X.X $XXX March million our approximately As interest buy stock XXXX, our shares used gross million cash plus our still approximately at that which This our March stock on of million, which of approximately during XX, about is total cumulative our of term of basis at XX, cost buybacks $XXX of that March for remaining XXXX. XX, X.X% XXXX.I our that stock in million will of SOFR of to rate quarter back debt XXXX, effectively also flows X.X interest points, million under of began at limited program brings $XX.X million The approximately

part growth result Assets.I for plan potential As full and past significant described midpoint a a year product following as should we $XX our we guidance revenue it as guidance calls, making QX reminder, note that the of our is sales, related as comprehensive total midpoint Sunset that will decreasing our the execute.As XX, reflects guidance XXXX, the effects of expenses and are investments marketing to are buyback ending raising of for beats. million incremental plan the a December our stock well as fully on

the EBITDA XX, midpoint at year between revenue This Upland margin decline the year Upland XXXX and XXXX $XXX.X million million and revenue ended revenue revenue decline of at is the between for decrease support and and ended reported $XX.X quarter adjusted midpoint subscription XXXX.Full between to XX% the expected quarter the a subscription from Jack. and and to December adjusted support total full in the for million expected So XXXX, XXXX.Second of $XX.X the ended including a for revenue from of EBITDA XX, total of a at million, is an be June the XX, total million with June EBITDA midpoint quarter back quarter between the XX, midpoint. year to revenue for XXXX.For million, EBITDA expects the pass is X% be $XX.X a $XXX.X December ending $XX.X million be for at the $XXX.X reported the is million $XXX.X total XXXX, adjusted million be at guidance an to EBITDA million December I'll over guidance XX% between expects adjusted call XX, $XX.X $XX.X adjusted including EBITDA June of This and and midpoint million year that, XXXX.And of $XX.X from ending decrease at ended XX, XX% $XX.X to XX% the XX% million between midpoint. from margin adjusted in

Thanks, Mike. right. All

you. call ready now open are Thank for up Q&A. We to the

Roberge Jake [Operator from of your Blair. line William question Instructions] And of first comes the

is expansion of? any follow-up. color should a on impacts driving customer weakness aware sequential Is there And then weakness? one that there additions. first Are you what's be and The have I macro new on customer the in and some year-over-year

renewals, in had the and of actually, we quarter. expansions good bookings -- a The terms quarter, for

have there. You're looking It necessarily doesn't counts. deal at just size

So in. not piece that's you're factoring the

more Got progress of Is in that you on anything quick there? new then like a XXXX. mentioned lot that? a And I know it. focus sense. on last to Any quarter, there one That just acquisitions makes potential out one. call

to and Nothing announce interesting, in the out year. point, at market at to a Yes, would but things active couple something like and we of this looking. done get there be that to this opportunities we're I actively super are looking continue

question next comes from Sklar Your of James. Alex Raymond

This is Johnathan McCary on for Alex.

where product on been you and of on you and pricing can the you've initiatives us update you've mentioned? know terms the packaging in groupings bundles. focused I stand So

process Just found right yet. curious that the balance in and are kind if where of there you you

Yes.

reflect customers. to amongst implemented I pricing of increase last and realities our think we year where competitors program price the we're value the delivering market is for

terms positive that And of ARR in fully are so rolled and from generation. that has out, we seeing been a impact

and So working. fully implemented

give you all that of an changed process that can at you there? update line on as assets same earnestly more or us then, time And Is there of on line timing? be kind Okay. Mike, the there sunsetting time the still

that so Yes. Same for line a years time be down, wind X, burn. to X it slow will

Instructions] will now [Operator are more questions. conference remarks. for no back turn closing to Jack There over I the McDonald

and much, very our next quarterly Thank you Thank will we you. you Okay. see earnings call. on

Ladies and that concludes all today's you gentlemen, for Thank joining. call.

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