UPLD - Earnings call transcript Q1 2022

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Operator

Thank you for standing by and welcome to the Upland Software First Quarter 2022 Earnings Call. At this time, all participants are in listen-only mode. Later, we will conduct a Q&A session. Instructions will be given at that time. The conference call will be recorded and simultaneously webcast at investor.uplandsoftware.com. be for will months. replay a available XX there And the have XXXX today By P.M. should to at first o'clock distributed now, everyone was access quarter which earnings X release, Time. Eastern

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

Jack McDonald

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

Mike Hill

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

Jack McDonald

Mike. Thanks, right. All

a strong great QX the a So quarter and start was to new year.

the announced in we cash our we quarter. million to in after later beat to quarter. expenses the free speak good We EBITDA. acquisitions revenue we a So plan flow. $X but this from midpoints that's on here call, the flow are is acquisition and headlines. and and operating Rod quarter, had two bookings substantial going also adjusted outperformed cash generated free the on in We and And the

AccuRoute In of And including and quarter, host product commitment is to messaging. reflective innovation. new our increased all and in a major addition we the mobile that, to improvements product that Upland of announced of Kapost, for releases

Excellence, our of multi-market we Center addition operation to global India, provides In opening announced strategy. product the of which development in our and a cornerstone that that, for development

the family. Insight, QX, and Objectif product document additional the remain in And customer further accretive acquisitions our for particular Lune and our strong product outlook and year. in strategic our two base, on library strengthening closed for and also building in BA market finally, workflow We we acquisitions and

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

Rod Favaron

everyone. on Good side, Thank comments. I'll little a start Jack's afternoon, the you, on bit sales Jack. some more of detail

bookings with those was deals quarter, As XXX In we a XX Jack expansions. expanded of relationships customers. quarter. good existing were the mentioned, QX major

We also quarter, the customers. logos new to XX including welcomed major new in XXX Upland first

well new our Our customer verticals. were sales products distributed and industry across

We also across had our a good products. expansion quarter

our a for both Upland product, our Mobile our and had Premier selling account-based QX product Success selling, strong Messaging Altify also our product, expansion Specifically, is for strong which quarter text enablement sales quarters. Plans. messaging was

on-premise content, customers as move BFB Snowflake improving with our And and customers and the We improve as FileBound, which product we Switching our solutions Plans product. capabilities complex a to successful. When help mobile really data subscription leading leader are automation. nine packages enterprise records, as support some that its expanded this, integration, from medical and area. and Cloud excited report Kapost, product, minor capturing collection to solutions. accomplishments multiple product our submitted already that AccuRoute, center high-fidelity major announced management applications the course reviews, hires new machine-learning scale releases our R&D content for Kapost, XX that over reminder, our months, functionality dramatically product recognized a focuses in performance the for We've XX with Success With the the organizations. database, to we XXXX intend creation delivered a the in first content on of significantly most opened months cross-functional and continue feature a innovation the located product revenue With leadership bit Premier will onto platform employee position routing next for India scale that, announced I scale collaboration, data We in the XX gold we experience. major our software model. our new the to bridge senior quadrant presence marketing was is launched release platform, content made offshore our little operations major between and Mike. team support releases. As user and we're electronic like further scalability the pack help into to audiences the overall we QX. about product. our core document more critical further in R&D during processes, to turn had messaging And medalist call of over segments leveraging team as market, roles. customers management over customers we the be that content to And and enterprise operating on full-time engage that them Upland finally, product services that excellence our dynamic and give workflow enabling. the detail to new on messaging, and

Mike Hill

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

million. income was X% and $X.X first the gross compensation, gross for $XX.X $XX.X increase. year-over-year total with were all the approximately to from line XX% $XX.X a XX% acquisition-related support On strong amortization, depreciation increase million remains services expenses, adding the to depreciation, of quarter, quarter year-over-year and were margin revenue revenue first for representing as quarter, XX%, the revenue, or statement, was Recurring during first was which the stock-based increased million, in Overall, million in X% gross which plan. subscription expected. revenue $XX.X margin at Professional an product year-over-year. and XX% cash of in quarter quarter, as or refer XX% first were Operating excluding million the margin. acquisition-related total we expenses generally and expenses, back amortization, when Also, our

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

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

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

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

XXst, outstanding factoring had debt in net on approximately of million balance As after our $XXX of we sheet. cash XXXX, March

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

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

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

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

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

Jack McDonald

thanks, Mike. Alright,

to ready open are questions. We for up the call

Operator

[Operator question Please Scott Berg proceed. Instructions] Our Needham. from first with is

Scott Berg

on his Mike the the (ph) guess Jack, the in thanks on since taking sales congrats well, quarter. Rags question Hill the as probably and my here. questions way call, Rod I directed for on we'll first quarter and

existing we about dollar of your I your in a modules, driven How You characterize opportunities good guess net expansions up-sells, is think to historically of cross-sells, is higher been slowly numbers bookings? you. retention getting cross-selling your to different are in-terms really products. Thank did should cross-sell the more than and by know which modules customers? I progress up lot other

Jack McDonald

for Thanks the question.

good. good particularly cross-sell that really continues say. the that in -- would in quarter continues And the was obviously as was the continue say -- pipeline cross to want we would closings expansion better Cross I bookings pipeline good So I same fashion and mentioned, was, like so the continues were stood than good as cross-sell it that to quarter out The improve be deal grow expansions. thing to I to.

Scott Berg

Okay. XX% a at below least they just Mike, percentage first your my nominally least quarters. have EBITDA from revenue, a as them in than by margins, higher adjusted math, recent at been were a of perspective, areas, looks long like time follow-up for time. your all It over the really of I expense have

maybe next Is or intermediate I costs it understand But in about this some you're opportunities at there think that up the a term little way maybe model, to for XX%, over extra about sounds months? what XX the months it we to help XX the like of Thank to saw try guidance near-term the needle? you. rest model, how should us Just And year, think bit a the XX% was moving move and the bit. quarter. low what the the little right are the drove

Mike Hill

to is guide. That's XX% Scott. way in Yeah, about it think year. unchanged our the for the

as And as the margin, recall, EBITDA margin EBITDA the see year, margins up year, cap our lowest may we seasonally you the because at we of quarter payroll our first year. those for the taxes. calendar out, typically through move As move typically throughout

and lowest, with So end office XX%. service our organization the average going G&A acquisitions, On we forward, highest, shared margins still at is leverage. scale back see in typically at the margins start additional we the

XX more, efficiencies again, ongoing possibly acquired revenue XXX a of we're $XX So as -- basis We cost acquisitions, million rate basis margins with we improving scale. run year. to targeting as points see those points,

So changes on really no margins.

Scott Berg

Chris, questions, Thanks all taking it's have. I my everyone. for

Operator

question. Thank you for your

Terry with from proceed. is Please Our question next Truist. Tillman

Unidentified Analyst

This questions. the Robert thanks for great, Oh taking is for on Terry.

Just starting plan. headcount get to on going rough a go-to-market update to is whether off. Curious and hiring

last is Rod capacity team, their the you global think life said mission cross-sell. differently, is I that accounts around in mentioned there and to Specifically how quarter

So how life going? is

Mike Hill

question me. good a that's for Yeah,

with Let the start me headcount question.

consultants, So not is XX headcount, including including our right sales leadership at people. solutions overall

I close to planned. we that plan time-to-time people think few think We we but replace close that is the from a like very everybody have very else, what have number. do I to to that's

there's headcount So question. a answer quick the to

global XX is Manager cross-sell we challenge up million have customers same-store have they're accounts important back to of or us then those to make an guys way is so that to team's customers they if sales, And mission. will. and expansion being the to a they Global and side, think sure team if to they make have have retained I in part that add are they sure that I'm with to about cross-sell. On revenue, $XX and than the Account bring you doing more revenue The started

are So add and to for the had business group, the account good those job QX for nice outcomes that cohort we're three they groups. cohort a overall doing outperforming global with up a looking from global biggest they and compare And you levers if account the customers. our

right we're where So team it's sometimes at hit how with their stronger stronger strong on expansion, like renewals. the are it's three it's they happy We'd given hit don't that quarter, at always But to sometimes measure sometimes performance a portfolio. now relative overall They it's all to once. once. sometimes on that's we and all quite cross-sell,

Unidentified Analyst

the There's private has markets any markets to get M&A public way. so, to Thank the more been a deals capital just allocating great. color more And just alternatives hit buybacks perhaps market there private broadly, in you. me. on of one That's reductions for Curious if on meaningful impact strategical pipeline in or the thanks. versus attractiveness evaluation

Mike Hill

we in got a control and strength of position cash and liquidity here We're Regarding deals. a of flow pipeline acquisitions. and timing. We've strong

weigh we'll in we continue sense. quarter, off market and so so execute the two And options and strong accretive to to announced start strategic We acquisitions makes the a we're the for year. monitor when first it and the

presence the transactions. such strategic other related speculative not absence or involving or or may our of it's have on buybacks policy stock Regarding alternatives, the type of transactions discussions to any comment company company's securities to the

Unidentified Analyst

Great. Thank you.

Operator

Thank you for your question.

from Rhee is Craig-Hallum Our Group. next with question proceed. Capital Jeff Please Van

Unidentified Analyst

Aaron on Thanks Jeff. is quarter. my for This for taking guys. Hey Nice questions.

Ukraine, macro-environment curious recession, First on fears question, of just from inflation, that? a any in your perspective, if you've going meaningful to seen you from seen have impact anything business

Mike Hill

So the thanks question. for

Regarding there, so exposure no real nothing and a really few contractors there. Russia, no We material and Ukraine but exposure. had

indicates Regarding we the guidance a outlook maintain outlook generally, strong year. our for as

Unidentified Analyst

front changed operating the one, next going just given the market flow? on Okay. as some And outlook else uncertainty, cash of M&A M&A Has then on. anything curious everything versus allocation free as your in capital far

Jack McDonald

relates we're position a to not in shopping and we're ago, liquidity only pipeline ready moment got but when of a to also somatic. We've a can strength and We've strong we deals, got a that of mentioned list execute it's I M&A. Financial, As execute. as it

to going strategic acquisitions the we've the strong execute first as we're quarter. to it in So with market makes year sense. when accretive two I continue monitor the mentioned, and and And started

there. a start too off off to So strong

Unidentified Analyst

looking modeling and we was lines, the anything at this than a forward? about a just different call think Mike, expense one, last basis there then on looks being quarter. out non-GAAP like going how it Is as G&A And that should there some sadder expected, to of little

Mike Hill

through in front-end this down the G&A payroll are trending a we like there's Again, that trend calendar. as G&A generally the some generally think taxes move things probably as through will down the in G&A, quarter, extra year. But year. I loaded we probably you'll move see

Unidentified Analyst

Perfect. guys. Thanks. it appreciate I

Operator

Thanks for your question.

Our is with next Please Brent Jefferies. from question proceed. Thill

Luv Sodha

us the macro demand my you about or appetite you're seeing. spend the there rate first Hi. the the for that talked customers? how for overall last from forward? questions. on environment taking have you're And Jack question rising the Rod will environment, Brent to same seeing Maybe demand help stuff. on that a just The is they This categorize could -- Luv Thill. again Thank you In out going the one for Sodha

Rod Favaron

one of by this I way, demand the ways the logo measure think one ways, the call of Rod our that is we inbound what I'll new is pipeline.

and group very They're are coming to the showing hand pipeline And month people one so been these products. raising and looking has and our our an cohort over in last XX intent brands, indicating consistent and months. for the interest their our at of know that in created know products us month who

so not inbound price our I increases. seen our from shift. had our And quarter in a QX, best increase demand a I anecdote think was while. we have It An price

a to intend increase do who increases of our So little like strategic customers are is willing allows spend customers, more us we which feel to talking we after price that [Indiscernible] motion still we, rolling the we're to and demand out the as products are. to nature and bit do continue price so that there more,

the I out the still -- are from side the nothing all of the healthy. No, think indicators demand ordinary. all

Luv Sodha

No, room magnitude maybe price environment you quick higher talk the that to follow-up, given as super the is could of helpful. I in? about that's there a do increases? those we're inflationary guess more And

Rod Favaron

Yeah.

somewhat haven't relative on and any actually and magnitude based to sector. yet we different numbers So will be announced it product

that. in I get larger bit not of and rather for be historical frankly, believe opportunity an will we're I do not a What think those there's alone to than I'd into that. we So say is

of you I think inflationary that's reality. look sector if around part this the

Luv Sodha

about about we easier may. the on back compares the maybe election election-related the Could you organic half growth, mid-term spend And maybe compares? how the in coming up. in U.S. the And and one if think that? we have Obviously, should talk do year, a of I it. Got get

So could terms talk should And in we organic think half the maybe you. growth? how of you about the about cadence of the year back there? Thank

Jack McDonald

Yeah.

through organic target is organic growth. we backing digits to revenues presidential low-to-mid-single terms and -- overage expect core no growth, our which core The strengthen So from year, business charges. out steady-state those growth mid-single out in of core of organic political backing change and on digits the

political side, see is In the presidential terms of there impact what we the biggest the elections. on quadrennial

while with the the the some we comes presidential. see mid-terms, bigger so impact could number from And

we some groups. you want had have political around QX to some with Now, bookings UMM interesting progress large to Rod, talk political? the

Rod Favaron

characterize Really of tangentially had more decided much obviously the I just we've only the in opposed time major long Sure. but to lot not it's for by a as we just buy a way presidential to related smaller to associated any ongoing relationship. it. commitment a and Customers volume election best guess to mid-term more.

in out So tangential subtracting numbers. we to do presidential world, that information the relative any see peak the growth organizations organic we're of valley related but political and

Luv Sodha

Perfect. it. Thank you. Got

Operator

your Thank question. you for

is question next from Blair. from Please William proceed. Jake Our Roberge

Jake Roberge

and Hey quarter for great my guys, questions. thanks the taking congrats on

and back get these organic and largely the be QX that growth issues tough of low-to-mid in the wanted to caused expansion. behind we step business a issues am the year, impacting was take like I to single-digit sales can the today, I of likely when last margin There So headwinds should steady number restructuring just But and at election. kind cadence were thinking and model by comps look the back that QX related of right trough business the the at to and in and XXXX a of look XXXX. pipeline that

we throughout trying So about just move the year? to how think

Mike Hill

Yes.

came overage Core we year, year. political mean, in sunset we growth excluding around core as growth presidential at the assets. I and at the organic at core right? organic excluding charges, And X%, any revenues, XXXX obviously organic look So for see strengthening through this

As we've contract of an got Mike XX before, has talked duration average about months.

impact growth of organic see pandemic-related churn. any move core a little delayed as bit get through a the But here we on you directionally improving revenue year. So we

Jake Roberge

games that just thanks. to about Great, we just, then earlier. back the talked And

new a whole above for larger strategic you've had can any where So of the products products to I'm kind place can just changes show start have cross-sell those the suite. a customers curious products of at you've over really that that they've with And acquired if now spread few one are those up new quarters. they games partner that these driving really -- in trusted place with where the last enterprises seen few ones relationships we where your years? more you and

Rod Favaron

Yeah, there. we're I think getting

And in. to cool start. we go motion. with year out I have mind like most Would us. customer to last we as you this And current it think to cross-sell that successes of you've get four in crossing customer's and that to now know, so. the they and and into very opposed solid leadership, in I taking and we know got say their level folks are sure called of customer of or first it? the they the probably cycles the would selling other have a them to these decided takes place sales know account senior of it same, you make saw, already that the those been want As of quarters right We the a more get everybody big products, stuff. global Keeping credibility, the back-half while, say in care walking hey, them

but to So might longer which worth Like about, the of isolated part by them library the get the a have bit sometimes we're And team sure retained X. once global take happy, sales of existing those within X. like definitely we've vertical. and better organized we've industry X. just be fits the same, through them seeing I And reminder, we but easier so little they're customers new. Sell of cycles our that. is of more so sales the contracts account products and they're vertical. Sell something which customers it's talked got Make cycle, engage, said,

focus our the cross-selling, which and products motion. of efficient and just with on together So that to probability go winning, products highest they is being know of which which

what exactly doing. that's So they're

You've described it.

I think get quarter. they're every relationships deeper

Jake Roberge

questions. Great. taking Thanks my for

Operator

The Thank from Please from comes Raymond you for last James. with question your Raymond proceed. question. Alex Sklar

Alex Sklar

Thanks, Jack.

hire Chief last Product You a new Officer year.

get give we'll the up. occurred kind have to us update there's have been cadence you coming impact any of and an release that the excellence within And of online Can on of organization? then excellent I'm Now that of part center curious from product definitely the seems just changes if shift. margin

Jack McDonald

Yes.

out, bring we Chief innovation product call. on went So did pace rightly point you new And that a as a Officer. the through number of earlier Product has in increased and Rod those of

level really multi-market we're with seen. of really center So the execution also cornerstone the in R&D providing pleased we've our and terms about We're a alignment of excited excellence capability. that global of for the

In of organization outlook. it's that be investment. current the it margin transferring of other going of our cost online think impact, contemplated start as We already center an efficient is terms nothing outside to from what's be to brought excellence. And parts able of in in to we'll

So up we're productive get while we change managing think tick capacity costs. net going in in to a any

So there go. you

Alex Sklar

investments Perfect I some to relative you marketing the opportunity. talked Any and new there guess and particularly Rod, on to the of as the to expansion. top ask of cross-sell want a pipeline the made? it given relates color year, about I lot we logo last funnel creation, growth about

Rod Favaron

quite lead at the with couple team's the how I inbound targeted better The with right news. continues funnel flow we're marketing dollar where pretty last gotten converting. say we've quarters is ITPS the evolve, pipeline not the I'm the house a Yeah, product so comfortable Yeah, I new right we're get with spending flow, lead to it -- and top the and lot think would of a to now happy where consistent better of now, by-products, at is that proceeding. so

Alex Sklar

Thank Great. you. Okay.

Operator

now last Thank back your Jack over you to call any comments. for the for pass question. I'll

Jack McDonald

Well, next for will All earnings joining we and on see all call. right. you the thank you

Operator

XXXX participation. concludes Thank Upland you first call. That the for Software quarter earnings your

disconnect You may lines. now your

Upland Software (UPLD) 5 May 222022 Q1 Earnings call transcript