UPLD - Earnings call transcript Q1 2021

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Operator

Thank you for standing by, and welcome to the Upland Software First Quarter 2021 Earnings Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. The conference call will be recorded and simultaneously webcast at investor.uplandsoftware.com, and a replay will be available there for 12 months. have was the PM distributed should earnings Quarter Eastern everyone which release, today now, access First to XXXX Time. By at X:XX

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

Jack McDonald

summarize Chief I'm our our Rod Favaron, by Thank welcome our to today sales, Hill, recent you some Mike QX President results. joined Commercial and product and CFO, highlights. and I'll XXXX Earnings Call. operations Officer our and

will QX will but Mike Mike open before guidance. that, the provide and we'll started. get read Following some the insights the Then, Q&A, we numbers Safe on call Harbor for up our statement.

Mike Hill

Thank you, Jack.

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

Jack McDonald

Blue accretive we for no year Then while the Street Second guarantees, make our strong even $XX.X expenses M&A and we and cash that's XXXX did our restarted can there that posting flow while acquisitions, two engine. Thanks Van, million First of after and strategic acquisition is Mike. Quarter, a and free and We acquisitions. goal to completed be strong

are and and Our our acquisition before, now the in noted flow active resources we've opportunities cash market self-sustaining we adjusted EBITDA robust acquisition is the our that X% pipeline free for expected, investments. as as XX%, to additional is mean in market revenue financial the Quarter, came and capital First in longer dependent we growth had go on we're no program at total our equity reflecting as markets,

X%. when recurring $XX.X in We XXXX recurring was revenue side, from had cash organic the First the political-related million. of was free QX comparison X% organic Quarter now revenue our growth Our flow growth exclude the you period,

Quarter, XXX expanded of On the we relationships expansions. customers, front were First major sales in XX which the with

and in releases with packs. products, XX First the five across customers the apps Quarter We released customers. also the and of customers, side, expanded the following and welcomed faxes, from customer in and leading documents to integrations I and multiple and our an Upland's front to portfolio a in Again single ability M&A. Experience content anchoring document and directly these three and to we joint announcement new then work suite management mobile Sage provide HP Upland document sources for the digitize emails, online. Management IT in SMS, quarter Customer suite Upland salesforce capabilities the drive capture including of of Upland electronic scans, which as Blue we HP, HP deeper major example, is Product support partners specific closed further engagement Project action capabilities fall, view the was product QX devices. feature We with and mentioned, we of new on for the for will Van, active security Intacct data email, HP that and new across acquisition applications path key In key workflow index Hewlett-Packard XXX their delivered will major acquisition a collaboration with content extract our platform and from customer product product

nice and customers second to content CXM consumers addition interactive the their suite, revenue. capabilities drive ways also engage of another Street give context We our streets to acquisition to closed our more second

strong goal a M&A very year for strong and be make there no acquisitions. to As could again guarantees, XXXX, pipeline is while mentioned I the it's our

are We for additional active the opportunities. market in

that, So back to with to turn going the I'm over call Mike.

Mike Hill

our highlights Second the XXXX. financial the the and cover I'll Jack. year for First Quarter and for outlook you, full Thank Quarter

and and revenue and stock down X of to I in margin until million was Overall, expenses expenses course amortization depending million first depreciation of expenses that year-over-year revenue XX% gross to Acquisition-related cash of $X.X last as First $XX acquisition income exit and Recurring our statement, revenue total or was X%. at all will uncontrollable XX% First Quarter adding factors note the Services First year's acquisition-related and when this or continue as to XX% growth which subscription COVID acquired million, amortization, varies XX% margin location. related quarter, and the to rate for from XX% of $X which representing from by acquisitions the QX are the complete expected XX% was approximately generally from XX% million of as the the generally $XX.X strong revenue such to acquisition-to-acquisition year-over-year office run On annual XX% excluding of expenses margin. million was and Anniversary. gross acquisition. Quarter Professional revenue, result a decline, acquisition for within travel Quarter the First Quarter back million. each First expenses, related $XX.X Operating an support total due XX% for our then gross impacts. transaction grew compensation remained lease depreciation, $X.X Also, activity. we were a geographic XX these incurred on to the XX% refer acquisition, expenses acquisition during for product are will of taper Generally related rapidly these the transformation months renewed expenses expected. were as and

or revenue XXXX. Quarter $XX.X was of for down million Quarter compared adjusted the XXXX First revenue, Our EBITDA X% million First of of $XX.X XX% to total XX% total or

EBITDA As investments to go-to-market on expected, was the cash increased to lower our flow. due adjusted compared year last

even was and of acquisition-related was in flow of Quarter $XX.X XXXX, million free-cash First the operating cash $X.X expenses with million million QX. GAAP $XX.X flow For

of million accounts XXXX and cash generating we in changes on be million free and after some future upon We some $XX timing flow acquisition, should on collections are cash had over depending cash free accounts positive of the flow flow expenses. and over focused working receivable. GAAP substantial size also so $XX like capital the possibly even operating acquisition-related

markets. $XXX.X our as liquidity an balance of for carry-forwards maximum for will of XXXX that to XX, without to estimate generation should total note the sheet EBITDA flow sheet, income note and is ongoing should around be our million comprised of currently up and this to for million and net With a March taxes, that our Upland times adjusted XXX.X guide. self-sustained of million X.X dependency growth of utilization of will XXX cash expiration. based equity midpoint million the is of we XXXX debt ongoing leverage X.X available these, approximately the credit our addition our existing on cash at net times $XXX leverage of undrawn on available So balance around existing expanding regard while generation our facility free to revolver. debt of approximately I approximately maintaining has prior million cash I tax $XX allow currently on This NOL flow that capital

note March that our of $X.X of principal XXXX per XX, net I on million of our $XXX.X year the approximately XXX.X As we about debt in payments had are after per sheet. or balance million year. cash X% debt term in outstanding million factoring

at X.X% cash our the debt of rate making interest is interest annual approximately balance debt $XX payments million on at our August maturing the level. With in XXXX, our term current outstanding remaining locked

no current Additionally, will debt borrowings. our I that on term out has covenants point financial

to for and over quarter ended guidance, revenue the $XX.X XX, ended June including XX, the be the midpoint for total between Now of at for million growth between support and reported quarter Upland in revenue and $XX $XX subscription revenue recurring $XX.X X% XXXX, June XXXX. million expects

adjusted to and $XX expected is million. XXXX, $XX Quarter EBITDA Second between be

quarter at For reduction midpoint the the our incremental activities. investment of ended over at June XXXX, an adjusted a X% XX, and EBITDA margin our the go-to-market reflecting midpoint, XX% representing of

support $XXX.X the including ending to and million. December revenue between million expects be $XXX total between $XXX.X XXXX, Upland reported For XX, and full year and $XXX subscription revenue

at at representing the the X% over the for of midpoint midpoint, year XXXX. and investments our year-ended XXXX, reflecting between of is million go-to-market December the XX% the ended $XXX.X over midpoint December adjusted growth year Full $XX.X XXXX, expected recurring again For X% in revenue in be to EBITDA XX, adjusted activities. margin of reduction XX, at a EBITDA incremental an

back So Jack. over the to pass that, I'll with call

Jack McDonald

we're free now questions the to ready direct Thanks, feel call me Mike, Mike. open Please or for Rod And Q&A. to to up

Operator

first now question-and-answer Blair. go Bhavan of our from will ahead question William Instructions] And Please We comes session. the begin Suri [Operator

Bhavan Suri

for first the hear acquisitions Second early, is interest about customers from progressing. great This it's to on the share on Hi, and just of BlueVenn [ph][/ph] current love Bhavan, and the I congrats I everyone. all, would initial love just how know Street are would but quarter Jake to

Jack McDonald

they email push execute a right and very and so part our portfolio web, powerful then both consumers, functions that [Customer product can their is those got text Campaigns, around Yes. our centralized SMS a and create they by which Second suite. in-app Great, for and Marketing record about enables CXM but question, product and behalf into key Data Street thanks fit suite strategic, our CDP acquisitions, accretive it [ph][/ph] and the highly on a very maintain them us some to of BlueVenn both BlueVenn also there. of channels Platform] fulfil core delivery adds as our both excited CXM of notification, acquisitions, platform so these Automated across capabilities of digital we've multiple can so customers and to

On of to Second is the table a could in side challenge build the and Street our know, our key Street their database campaigns. for of proven user the of and that thus a you databases by number to consumer brings second and customers to customers continue to subscriber and contests marketing technologies used drive, interactive content effectiveness be increase so consumers or

would of bring is would before, we for core differently than as really really acquisitions, part our have existing distribution on how we two to these So, and the planned fit drive we the of doing hit cross-sell product that is sales a today proceeding into we're sooner things ground products now the like Rod's much our beginning both looking campaigns great to on diligence pre-closing one is integration that. leadership with running at of now and that products acquired them,

days through to products me early pushing Rod So to in let his of there. over our those give of early on observations it thoughts channel pass cross-sell kind

Rod Favaron

Yes.

that as Second decorate earlier the So to those leverage down gather building that we in [ph][/ph] two talking quarter said started obviously other audience each and Street products Street and a little got on we Jack Second database from in data place the bit as that, the later themselves being blue BlueVenn. and in really quarter to

customers. to salespeople, fairly those by year crisply, Management] Team, BlueVenn quick cross early the Experience get we it's much part front were of we more both Second Street [Customer and our selling able with crisp an very making we and Sales the was integrating playbook last those companies that our in so of So worked products CXM these of on being process that really

begun able and our base the time so of products And just to and so pipeline, and already was the have takes I we that to there for look, how not we're quickly were pipeline software generated out cycles sales into of sell enterprise that to sort both excited quickly people is but pretty it get those that build getting

Bhavan Suri

is this funnel. segment that collar is you'll Great, CXM different the you in a thanks for to the seeing it continue Where a opportunity? or are acquisition? will the Do next think greatest on M&A invest you with follow-up the likely target you and

Jack McDonald

across six So buying we've there in or that we're use frankly or right seven now, got the all suites enterprise, pipeline a X cases addressing. and key really are really very strong centers in because some product cases use other

PICM. strong So, you it's some opportunities looking pipeline know, that workflow in would will and lot the we're outside of CXM a There a at pretty those document Center. Contact next guess on across as my are one there as and be is well be

year. in you'll I activity see areas through think all we as those the of So move

Bhavan Suri

questions. taking for thanks Right, my

Operator

go from question Please next Our Brent Jefferies. of [ph] comes

Unidentified Analyst

I to see Congrats quarter. I frame innings terminology that [indiscernible]. been to first know guess for maybe terms are mentioned, cross-sell cross-sell the I and we and but over Rod revenue we like and question on what cash bit organic the could is journey were joined the taking ask like motion the free when team in a still flow this of it's in and year early, really Maybe since wanted driving number we you of if hold Rod like this Jack. is in both little This growth? It's baseball

Rod Favaron

Yes.

I've I'll year. this Jack appreciate out commentary and So, for you been I pointing here a here, is start in Ron. that collar so

refresher, what the manage over leadership marketing, and place hired account infrastructure year customers customer go-to-market now progress the a success, in a added and sort formation global those there. XXX a of flying ramping of pipeline We building team last we in a customers of just their the as our knowledge on and and see and lot we've have new of accounts, global to had we made the like teams we executive so managers top vertically, are sales,

other retooled thing we demand Gen did The was up. bottom

designed So late website really launched we in but generating. frankly team team we you'll building Team Development the our see to new did a other in SDR a XX is stood focused is centrally of we QX drive January which the up then pipeline, and qualifying all Rep We located, STRs team. lead last Sales now out Upland catching marketing have late really year, qualifying thing of in that on flow and

of foundational work So get a to we've continue lot team to been in doing to the a place grow.

will, As things sell now of part campaigns running of that demand gen showing machine deals lot to if cross-sell a out. very cross convert these couple growth, again I'll time specific the take you the is a of good are were and proactive pipeline point

that in year until impact market. our to COVID see go a have appreciate net obviously did in While rate XXX lap and good and and business, lot recurring made revenue to improvements the progress order fully retention we to and decrease dollar points go market, remember last to about wait basis we really have to of we COVID due in

So just guarantees as are to XXXX this add that, a of definitely us work and level think this scale multi-quarter but say, and in the we I'll as journey in sort is there outcomes, we preparing company. a no to to next is

Jack McDonald

Yes.

the key go-to-market of add as and he's the different on he on I personnel would product Rod moves, through on really so, increasingly well piece. only is walked catalyzed made now culture think kind a I distribution and Upland is, and I as thing think, has here process the

as suite be said where and the logo of said and outcomes, is a on we so, think I take we there and with great a it. and so ahead it's of We what forward, see you as here drive to move from it you beginning couldn't acquisition go XXXX we no beginning have this we've really about journey new tremendous Mike can is be about we to in he but the multi-quarter think cross-sell customer can we're said, guarantees start excited consistent I it. products excited And more opportunity base there got Rod a what and really

Unidentified Analyst

year Pardon me, the and last out, environment. may COVID, impact, if back you but folks economy follow-up the up one some pointed lot work overall impact did on coming as, certain that. see you extent? to from the quick as be Rod with Obviously open half par not a stuff so Are [ph] we a on will to benefit some spend and I overall back the and you would of into demand whole back of seeing year that going see

Jack McDonald

Thank you.

Rod Favaron

dollar move the plays now, still the the incredibly think see and right, impressive environment consistent that's more is be last retention phase year even the the you're to I and outlook how back seeing resilient which that our environment. normal so and we'll a pandemic, the think given year of 'XXs I in net you're rate demand was proved out business COVID pre COVID mid to begin toward with

that so that on fully a Our in more out, outlook of going quarters but conservative few that, a to guide terms trend seems maintain takes play is be to positive. to we're

Jack McDonald

you. it. Got Thank

Operator

Next Needham. question of Go Berg Please Scott comes Ahead from

Unidentified Analyst

taking for this [ph] is you Scott. everyone, Hi Thank for my on question. John

those Thank be there far obviously they're are last anything the products Is as relative a quantify election you but lot out. stretching what As X and you. lot today can are messaging during you you down a grow the to cycle, going far mobile months products obviously going seeing as as to usage ago, not.

Jack McDonald

Yes, question. I know. the for Thanks

that revenue related to we in year. wanted last we we view about share the and spike election this presidential transparent a usage, cycle. a investors talked the and So saw demand to had of do year political Obviously with not what was without we with last

that organic breaking number. we're why at growth that's So

politics coming growth we're and ex as for But a long-term obviously there X% in that then single-digit applications politics mid offering that's business a feel are on right Upland. number would organic and so have for expected focused lot where messaging beyond we a that this of CXM quarter. growing great about and And

Rod Favaron

Great, thanks guys.

Operator

turn This like to concludes conference I closing session. McDonald would over Jack remarks. the our question-and-answer any back for to

Jack McDonald

on thank Great. earnings seeing to we for look Well, forward time afternoon, next your you call. this everyone you, and the

Operator

presentation. is conference you attending concluded. Thank The today’s for now

You may now disconnect.

Upland Software (UPLD) 6 May 212021 Q1 Earnings call transcript