UPLD - Earnings call transcript Q4 2021

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Operator

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

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

Jack McDonald

our following up Mike to welcome could will around before that, guidance. today statement? our QX and provide call. CFO. Mike started, earnings After will on our joined Favaron, opening start comments for I and XXXX we will get the and by on read customers results I'm And some the open On Rod questions. some provide our you will our and we color product President; some call, But Hill, Mike call QX that, Thank today's harbor Rod and safe the developments. you insights QX numbers with

Mike Hill

Jack. Thanks, Yes.

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

Jack McDonald

Mike. Thanks

we quarter So latest QX our Insight. to happy announce are to results share was great acquisition BA a the also strong and and of

are So EBITDA. line. adjusted beat and revenue on here ad We the

the again, And free expenses. over did And full flow, cash costs. $XX.X year, cash And that's million of that's $XX million over after revenue quarter. the $XX.X So free of dramatically flow on We coming generated flow. in targets and outperformed on both adjusted cash million guidance for again the flow acquisition full acquisition in the after above free we of our for midpoint our fourth year. It free EBITDA. of cash

at stronger On call, XX%. net earnings third retention XX%. would at come came quarter thought said, we rate than Our in around expected our dollar in we we

host QX up to we this meaningful the later Rod finally and and points we and that. of both ended, reflective came M&A XXX we And in both in speak net had our that the but have in is our from bit product XXXX. our software move commitment retention increased a those And And we we which dollar had to customer to again, our quarter in substantially library we basis we QX to front improvements immediately then a accretive. going also outperformed better improvement pipeline increase innovation. are QX additional continue as quarter here call, continue expect So strong than after strategic in in a bookings rate and acquisitions of closed us. the in to little two rebound through of acquisitions base

is that Mike call. through later finally the guidance going to in for strong So XXXX and walk

the So with to over turn Rod. that let call me

Rod Favaron

Thank you, Jack. Good everyone. afternoon

In a of As existing Jack those we QX. expanded were back expansions. mentioned strong relationships QX was from new with major bookings and expansions quarter bounce quarter XXX XX the a good customers,

including We XXXX. Upland made quarter XX to We Xx motion new on as our year in bookings than also XXXX continued customers welcomed major grew cross-sell over customers. XXX progress full fourth more the cross-sell new

Also expanding product feature was 'XX four QX our quarter. product active most digital hybrid new existing excited for delivered very major models. customers and sell our relatively packs small cross for a coming than account the more comprehensive a [indiscernible] And encouraged our support how reminder shows workflow remote which last is announced quarter net across improve into of outlook product bookings. in Upland we throughout We we're automate off new a cross-sell release transformation net Jack new a to finished XXXX quarter. to double we're needing our about. base, to above As anticipated product business mentioned retention at achievements. date salary as From while We extended in we product releases what across in XXXX admittedly retention XX% year-over-year library an implement which we perspective significantly a to by new dollar existing continuing for

to introduced provide us win responses increasing rates. most features RFP and the importantly Qvidian designed proposals products compliance several to better efficiency, Our team ability create new while and deal

customers also improve growing a market. IT environments their help our very to cost product of simple part financial new in from immanent cloud is a is and the Cloud Simple a Cloud Simple compliance security launched -- We designed which product. capability complex an

Our India This our in to center strategy step established forward operation global operating leverage a will took model. as an software a we key as serve of in further for cornerstone. excellence development important QX R&D global new offshore

read will about this weeks. the more coming in You

On to front the BA product Insight the M&A Upland of announced addition the library. we today,

are workers. that excited in but about of is search this customer fit We Insight systems customers. deal strategic for Upland and and our product its the hands robust enterprise the knowledge BA search for an integrates

business enterprise As Insight as integrations mostly you is and know the which engine and life sciences, RightAnswers over enterprise Their XX search leading our engines. Insight legal wheelhouse systems BA base ruin. growing our BA management Panviva AI seven has into library product four knowledge content engines customer and document industries of and search products. joins services in and

self-service. As productive call in XXXX enable recall and we to and tenants will common RightAnswers, delivers methodology to technology make answers more you to acquired consolidate questions to

While Panviva health acquired in services. a in year, regulated workflow-based financial service earlier such customer delivers as XXXX guidance utilities to in care last industries agents

to with very addition management our how fits BA it fits In knowledge Insight products, well. helps it

ingrate search. of to turn to a our call As will lot that, document you enterprise Mike. With can imagine workflow library over the with I drive document systems as within it

Mike Hill

outlook quarter cover I'll our the for Rod. full first for year and the and fourth you financial the quarter Thank XXXX. highlights

to from million, On a representing the million. subscription year-over-year. was revenue X% the revenue year-over-year reduced decrease segment, total Recurring of support $XX.X income for quarter $XX.X X% fourth

that of not XXXX support mobile QX election note XXXX. product our should in of and I U.S. campaigns, presidential related did subscription revenue included However, of CXM repeat QX $X.X messaging from to million which

quarter, $XX.X amortization in of revenues which in and quarter strong margin. refer compensation all excluding million to and Also, $X.X political XX% million were XX%, for acquisition-related the in acquisition-related stock-based Overall, or the as depreciation, or increased. quarter, when revenue, QX these expenses, as back quarter, was gross excluding which So quarter as revenue for revenues increase. -- margin of the at XXXX XX% about Professional cash our expected. fourth gross adding XX% expenses margin the X% total was a expenses year-over-year loss Services fourth $X.X we and product expected. approximately were generally the during were depreciation amortization, million Operating actually remained fourth

revenue, or the total quarter million, quarter total for fourth $XX.X fourth of EBITDA $XX.X revenue Our or of adjusted XX% XXXX. million, of was of XXXX from down XX%

EBITDA revenue in for political was the lower XXXX. flow. As QX this expected quarter the adjusted than extra to due year quarter Cash ago

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

year. the full even million $XX.X $XX.X free in cash GAAP flow million acquisition-related expenses cash flow million was of for operating year and XXXX, $XX.X was with the So

after even So successfully free generating GAAP and flow are flow operating we cash acquisition-related expenses. substantial cash

year $XXX cash our approximately this approximate revolver. generation the and $XX targeting Lune million XXXX Objectif $XX paid weighted cash recent at from free transaction million plus given $XXX our recent it are in be but of million existing costs sheet $XX flow acquisitions in of of for on flow $XX comprised closing million less back-end balance will cash BA our the This acquisitions. to of XXXX, our undrawn cash the million December million, ongoing liquidity to free XX, as of million addition transformation Insight our $XX of two is We

net After the had $XXX As outstanding of in factoring of we balance net in our QX, $XXX XXXX our December debt is acquisitions million. approximately sheet. debt here approximately two after XX, million on cash

leverage at about approximately with So debt adjusted debt are cash on remaining debt at year the based per payments the of term our I The around or August times our million in payments interest term making the $X.X on balance midpoint locked current annual note currently principal X.X%, $XX XXXX our EBITDA net our outstanding million per guide. XXXX. maturing year debt, our level. is rate is X% that our of X.X on will

be $XXX $XXX point of debt will term cash current that our year Additionally, available no to taxes, expiration. million million and out will carryforwards regard will utilization income to taxes. note, expect I Upland we approximately of currently I NOL for that borrowings. approximately around still on total $X that covenants With financial prior these tax estimate per has in million has we

Now for guidance.

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

of between million increase and XXXX million adjusted an ended to The first is adjusted an the XX EBITDA $XX margin This guide is quarter X% expected of for at adjusted from the quarter be XXXX. midpoint March midpoint. EBITDA XX% from $XX EBITDA

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

Jack McDonald

Mike. right. All Thanks

We are open for the call to now questions. ready up

Operator

Our is first with Suri Bhavan, to question Bhavan your Instructions] open. William [Operator goes Blair. line

ahead. go Your can

Bhavan Suri

sort guess Thank talk there. thanks and seen I with couple bookings Great to is reset booking market maybe the been with job a RR I'll a of see questions, great And sort team. working what's the fabulous that back numbers and also years. strategy come Rod’s start taking close you've sort job. of driving that see you. sales is my the Rod of to for seeing It's visible you to are driving what you sort top giving rates for some how year. that's sort of the in -- funnel down pipeline but flows the maybe the of team of start the coming I'd pipeline the to at that of the and of and -- love

Rod Favaron

from a at looking of We've at evolved That's thanks. pipeline pipeline sort great down top-level into really one our three. Yes, question.

imagine. can you as types deal three have We

new have logos. We

and same we or have the into product have into our cross-sells same-store customer. We the more of base sales same

creation. of we business. a cross-sell lot a separate customer pipelines so success now manage engaged is the a our now it's pipeline motions you but sales new And sales and are imagine that different. motion for the logo actually team as of motion, It's business bit more The pipeline marketing can as in a

in lot cross-sell So customer we as really -- I of progress a think was things the new product engaging well of one with success made and that's identifying last product expansion. year as team both our we

the at our cross-sell expansion look rate better we and a because and a you -- and up without competing of And at have a they already quicker. another back They're using new They already new just you're at need pipe details rates are really so conversion as as rate or and product than better last get the more. into sales they own product. converts logo. or and net cycles need vendor

And frankly with different Upland so versions those the of for different we motions. different top are of driving And parts pipelines have of parts different pipeline. the

a And I so sort lot has. of independently that the and of we think sort Hopefully funnel of XXXX pipelines matured in measuring measuring on creation independently. top

Bhavan Suri

tends et The Yes. is you prepared bring answer. helpful. very That that cetera. of about detailed of are different No, will appreciate only touch doubling, I'm say, I'm up the I your longer-term hey got remarks I ROI. cross a the clients cross ways in a on those? drive with because actually that hey asking provide to Are and and you on where that question more getting products these executives let's was now are sort promising to you guess, relationship to show taking did relationships okay sort you product the and whoever upload whole a yourself about off you large of and my we and where guys to you -- using strategic or level saying, of the bring or sliver. relationships very able you say, those spread talking you're you you're the on we strategic the where trusted are then talking of and get you value showing or -- suite them a still touch to be Jack at partner have going to it in as sort CIO are How senior

Rod Favaron

Yes, great question.

had back little a major may their XXX the XXXX our of our team I say our most So recall all certainly across -- in is in I'd just they we of seats a our company. been And same really company And by back up you'll and that customers was have, beginning global their our from XXXX them literally Tuesday the else created late mission big if bit but accounts industries. got telecom top has without cross-sell. – life customers biggest executive customers, sponsor -- manage our Obviously you, those retaining had that sell group. love various to names to had I own a what naming do more with find is cross-sell. we I call That conversation at very we what a media the you all paraphrase.

lot we through fits. So went a of potential other

phone our And leads, call -- some driven to our by account biggest happened our are Officer I of on customers folks product Product was so management that dragging global be Chief the getting the of those R&D that the with into by some team. really

that So continue to mature. will

we're that XXXX. drove definitely is a bookings while a yes but increased part credibility. it what that -- to you that the know build seeing of cross-sell takes to big you relationships throughout have As make And sure those and

Bhavan Suri

you. hearing Thanks you. forward those this more Got Got part quarter for And nice to my driving of look questions. keeping about the and cross-sell guys. relationships taking We suite. across

Operator

you, Bhavan. Thank

next Our goes line Tillman Truist. to Terry Terry, is with question your open.

Joe Meares

any new nice strength from up customers This on XXX logos? the Meares where Appreciate the see free is And cash in not do Jack. you verticals taking surprising you? them did for new or the and flow. Of of quarter Joe the in on you if new question job come biggest for the Hi. Terry. picked

Rod Favaron

there any jumped is footprint they new a industry I We've I such that don't think verticals, given say half speak. across having now. keeps and enterprise really with wasn't or any was lot a out. would us our industry being impacted from surprising one base frankly that a verticals. There strength came wide of from which too got so encouraging by quarter to tough

Joe Meares

broad-based is good. From in

software market to valuations -- seeing perspective, rise. though even seem a has follow-up. to from a be company continuing retrenched private We're as the Just valuation generally

coming So then, top where your much. And you so would for end remind -- if the valuations what Thanks headlines top that's us up picking deals? down. on are leverage could be end private wondering if not seeing max company your there just you're your anything net in just

Jack McDonald

Yes.

capital of of generally, we're position the terms a acquisitions in would in I strength say and So and more acquisitions, we control allocation regarding here timing.

We and have we've pipeline liquidity cash flow got strong and a of deals.

our other comment as allocation generally speculative and going again I'd say to playbook the right evaluating as the any move of kind the the shareholder transactions our through to buybacks to we're So and regarding discussions. stock to not and first year execute to investments of or more the constantly of to monitor and here market two we're absence strong a any our start capital strategic off quarter. presence allocation continue again, acquisitions alternatives with during policy capital framework, make is on drive But part we value.

Joe Meares

Thanks again.

Operator

Joe. you, Thank

open. Thill your Our next Brent to with Jefferies. Brent, line goes is question

can ahead. go You

Luv Sodha

Hi. again This for on have this questions. Luv Thill. Rod. Could Thank my Sodha Maybe are software talk demand is exposure you in one well. you you the environment of some demand and And a Could cross first overall Jack the your taking apps the as Brent you in for bacon talk to fear maybe for about how fast expectations maybe pull-forward impacted XXXX? it far-off and some for and what XXXX? into you

Jack McDonald

put for the saw uptick fourth I in that look, And Well, in quarter. substantial we we've guidance out a XXXX. think we bookings mentioned strong

in see the about good guidance, and terms seeing that the what customers our we're year good market. the about from we in we So of feel demand that and

Rod Favaron

I'll just add that.

one marketing sales performance all more our customer frankly, at And products. our more our products it our managerial across QX, BXC If our workflow CD higher There sets, one wasn't you area all and and suites, personalized the center good industry products, our business enterprise a And like in good wasn't will drove look experience was call products either. you question by our it earlier the if in a library products. across indicator product, which spectrum. driven the all really demand to takes across of performance or that

pretty So was diverse it frankly.

think. we encouraging So

Luv Sodha

follow-up Got year. were expansion impact net the versus than we expecting the improvements should taking it. think the of the How dollar the from Chinese motion retention improving? quick in a for next And on more then cross-sell you

Rod Favaron

good it's same Yes balance. – net as I a think retention are in retentive. we in seeing gross we're performance the The

not it's growth out, extension. dropping covering we're So like and with up

So metrics those we're both seeing success of in much pretty linearly.

So positive we a both benefit in think places. there's

John McDonald

The I'd come in QX And to to rate continuing came add earnings last dollar XXX call so we basis on that only at XXXX. thing in that, net points better. see do we that and expected talked again, in XX% at XX%, we fact about the through retention year, improvement

of number prior, able mentioned we've a to As we contracts. multiyear were secure

set that we continuing as So dollar should through XXXX. rate net for us in up attention move improvement that

Luv Sodha

one. Got it. And one last

investments invest On the next are process? investment year side, buckets in you making and be to you out side margin build could to that about will Thank the you GAM into the continuing you're the and confident if the of you. marketing may sales

John McDonald

that got Yeah. we the team in We've place need.

that moment there. new budget on investments course the current the we're a consistent out speed product initiatives so exciting side, and we've highlighted, that's on and And the Rod guidance got but the ago some making, with

Luv Sodha

you. Thank it. Got

Rod Favaron

Luv. you, Thank

Operator

DJ with is Our next question your Hynes DJ, open. Canaccord. to goes line

You can go ahead.

Luke Morison

question. taking for Thanks DJ. for on Luke is this the Hey,

think the things how that So business. you're one of investors really appreciate I the about positioning

We this without that our questions the get sometimes capital self-funding how equity strategy do works some markets. on fact can accessing the mechanically now it's and execute Now, you're tough.

three $XX year could million maybe million That's if you a I'm $XXX revenue that in multiple. if say, through time you So at talk in M&A. per buy wondering,

three $XXX If that years to to four you that in out acquisition million $XXX run million spend.

generative, around you I cash enough have gap. sure not balance on but that to the in $XXX cash think million and sheet I'm close that's you're

leverage debt that's thinking if comfortable we there are And high taking Thanks. the an time. ratios over assume case right be difference I would you way? is your how – incremental about the the guys that So

Jack McDonald

three it execute a that Look on flow, right the credit our Yeah. of generated And you when internally we can M&A hand at look combination facilities $XX a you're at I year level million about way. think times. thinking at cash roughly and of our cash our

In leverage, Xx terms around debt of at we're running net today leverage.

number we're plus is so comfortable. where And that or minus

to given little up said, a it a there's transaction as trend long we As willing see bit a along back line we're all as go following down.

So no changes there.

Luke Morison

a already. you just organic maybe I quarter. then quick organic there And the everything I'm disclosed sure guys Thanks. in not in don't helpful. growth if was item. housekeeping That's think

just clarify that. maybe So

Jack McDonald

Yeah.

organic the For year X%. was growth full ex political

Luke Morison

Thank Great. you.

Operator

Thank you Luke.

open. Our Van next Jeff you question Craig-Hallum. Jeff, to line with goes is Rhee

can go ahead. You

Unidentified Analyst

Hi guys. on This Dan Jeff. for [ph] is

I the related advocacy part of part you. for messaging, question guess First sorry, is Last to groups. backdown do messaging the quarter in the the to guide the not messaging, part how political political revenue but of was of --

Just curious stabilize levels? that how that trended sequentially or quarter-over-quarter? Have prior to you back come seen

Jack McDonald

Yeah.

So which our the consistent outcomes XXXX, side. there for the I guidance with seen expectations. solid revenue guidance on we've reflected think very that's again is And in

Unidentified Analyst

next And to back bookings, number. then question, bookings Helpful. going

a or done the little new expansion colour way Curious a to up-sell breakdown or the colour there bookings bookings rest is that the quantify the more on provide of cross-sell little year-over-year. there? has of gave of bookings bit what number, about You and on any versus

Rod Favaron

but down. track Yeah. We down. don't we that we don't break break Obviously that it,

Unidentified Analyst

for Okay, fair That’s All me. right. enough. it

Operator

you, Thank Dan.

your last question Alex to James. goes Our Raymond is Alex, line Sklar open. with

ahead. You go can

Alex Sklar

lasting or in little if kind XXXX frame wants you you the this outlook know in of just bit in some what upper the help or don't rains initial Jack terms wider swing range? lower and of I in years. bounds Mike one. are the take of Can that Rod factors you're to a But recent key Thanks. still are

Mike Hill

Yes Alex.

a the some is put of year full And a remainder the guide that year off year because already So, because it to year year we've tighten range bit is of a tends just got to go. start wider typically when for in. the through as move the up full then we we

terms range. I quarterly guide in is find that think you'll consistent the of

Alex Sklar

Okay. you kind of Well, like paid this this remarks free I mid-XXs a one of in but were transaction Mike. maybe I to for they I results really past. a XX% on think conversion this another conversion flow think rate costs prepared the your The year. cash know out you've you team And ex in impressive rate talked

So, onetime is I'm you the forward curious could quarter, a we higher rate kind think exclusive do there or conversion of those benefiting anything see going of M&A? results in

Mike Hill

think that conversion I XX% pre-acquisition-related XX% to sort to No, of expenses about think is the way it. right

I yes, So, about correctly. it think you think

Alex Sklar

just just one more in. regardless M&A, Maybe million I'll million for the The is $XX is acquired on to $XX a $XX cash of Okay. or on today? you've guide squeeze that that free what flow based future million floor

Mike Hill

we've a because weighted here couple we're on looking today QX. have again at But we that's acquisitions end the Based what range back that of in acquired now.

are Of we'll year. here as through go forth. we differences the course there update timing And and so

Alex Sklar

you. Thank great. right, All

Operator

to management call. Q&A That Alex. will the for you, concludes remarks. any the back of session over the pass Thank team conference I the closing

Jack McDonald

Great.

you you our earnings Okay. joining see much thank Well, on will us next for and we afternoon call. this so

Operator

participation. Thank call. today's concludes That for you your

You can now lines. your disconnect

Upland Software (UPLD) 25 Feb 222021 Q4 Earnings call transcript