UPLD - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by, and welcome to the Upland Software Second 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. And a replay will be available there for 12 months. have was the P.M. distributed should earnings quarter everyone which release, today now, access second to XXXX By at X Time. Eastern

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

Jack McDonald

and today's I’m by Mike results, Hill, All right. to provide welcome our today And then will our QX with CFO. around joined product On call, color Thank you. XXXX I start earnings go-to-markets call. developments. some Upland’s QX and

Following that, Mike, then started, the our But Mike open will numbers We'll get statements? on we will provide you Q&A. some guidance. for before QX insights read the the up call Harbor and Safe

Mike Hill

Jack. you, Thank Yes.

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

Jack McDonald

Mike. Thanks, outperformed All EBITDA and quarter that million outperformed right. free midpoints cash QX on revenue adjusted cash $XX.X on operating in we quarter. headlines. FX with even headwind in both on flow. was a an would beat our generated the here plan we and and strong quarter flow. We I the the are note We and free in

new releases these of that a including and We had Lune. of bit the host a for I'll and in our little quarter are Altify announced more innovation. detail quarter good to of product And a in in cover reflective moment. increased course, also a commitment We bookings improvements Objectif

acquisitions. quarter in all after acquisitions the And closed, and first a is Objectif integration and the two announced from the Insight market BA there from we investment the of for active remain quarter, continued strategic we finally, equity Lune We our then planned, and HGGC. as proceeding additional

XX existing I go-to-market, major me again, those we go in was relationships as here. of bookings on the In headlines were we Around customers So let those expanded quarter. expansions. a XXX QX mentioned good as quarter, and dig with

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

expansion was and products Lune, our quarter industry were our Objectif CRM New distributed automation in strong product; that deals product; to more content integration business strong subscription particularly and operation document QX our QX had Premier a Plans. our help products and our platform; strong for quarter give them support across software phone BA Insight, well selling We InGenius, are our Success our high a AI composition across customer also search These product driven quarters. to communication fidelity verticals. services post had enterprise expansion packages successful. customers be all

On a Plan, on busy enhancements. awaited enables users announced that's Genesys account records enhancements their for faster largest assigned XXXX its dedicated AppFoundry, account account the by digital going CRM directly a accounts all customer customer is telephony aimed major Lune marketplace integration a QX which the long complex to application and product Altify’s business side, at for Account release solutions. introduced in we capability and that their starting innovations been which this customers. the industry's acquisition. get supporting had included spring product of series first on from now inside plans post experience capability Objectif was Salesforce. premium manager efficiency transformation work driven InGenius focused release a And Altify to on within available on as communications announced is

and we of to capitalize decade that will partnership management once which cloud the on to software this the a markets our the the and XX, financial in backed fully billion private HGGC help to that shareholder million is firm. after has for HGGC track recent a record opportunity acquires. announced turmoil July $XXX reshapes close Upland drive addition, on value companies proven pipe private new with investment of partnering build in emerging venture we equity us as acquisition growth. In type business teams from equity see strengthen and funding leading of quarter, the valuations a a HGGC, $X.X And fundamentally

President, support $XX.XX best. reasons. his a Rod Upland additional is want A as on It's announced the structure personal conversion going financial Rod known partnership effective had later a the clean very the relationship This strategic also generally, us equity business share This for software is Favaron in rigorous price it platforms points like at stepping thank as a going strengthen model. driven that's with with similar did years. and price particular his And on will companies and announcement. Upland. a the creation attractive about process. is just cash August going of We help diligence supporting to for firm go-to-market more for at build HGGC M&A help HGGC a to July and we're a XXst. and service value wish few believe to This long-term also down with per And him an partner. made And Rod health XX decision I that major we a HGGC with to be but platform us our We've from pick operational private multiple validation and that coming our in or and after investment great smart to to right they've investor the dividends have company's had plan value. our which year IDERA have systems, option. success growth the is HGGC. to in say to software models

to our hand forma financial I cash facility HGGC in Finally, will term credit with annual nearly pro our EBITDA on. the that $XXX want that build together our is for to a be foundation million attractive adjusted on strong and just $XXX.X million, note long investment,

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

Mike Hill

X% Thank of and and from XXXX. back highlights XX% in second representing the Professional the depreciation gross our quarter have XX% which million, you, the gross of $X.X the X% quarter in full the the decline. Operating to margin. Jack. would Also, was revenue the plan. was for second at $X.X $X.X we million services expenses, generally revenue as second FX quarter year-over-year, amortization, and approximately on expected. $XX.X stock-based excluding refer were $X.X related second revenue million FX recurring Recurring million, line year gross $XX were QX quarter which have the XX% remained increased revenue all outlook would were margin been was the I'll of cover second to depreciation, second been strong quarter, million third in year-over-year amortization increase year-over-year support quarter, our revenue, as revenue up for an Total expenses the million comp expenses impact or X%. quarter total the a financial subscription and the with license or XX% acquisition-related increased quarter Perpetual margin for and during acquisition Overall cash and product when impact, $XX.X growth adding for XXXX. growth quarter, to for X%. X% second from without million without in

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

million cash and second flow GAAP was million. quarter XXXX, the free flow $XX cash $XX.X For operating was

balance XX, addition and cash flow existing the revolver. So in we even cash million sheet addition June $XXX our million in free of flow liquidity XXXX, million are our flow of $XXX million full after to acquisition-related of cash free $XX generation our $XX of operating undrawn million expenses. as existing XXXX. We're successfully $XXX cash year of to targeting our million approximately of ongoing for free cash to generating substantial $XX This plus in is liquidity comprised GAAP flow approximately

will million in million. we liquidity $XXX our a the noted, further around pipe raise $XXX weeks, Jack as Additionally, on expect coming which close to new transaction to

of our million, EBITDA approximately interest midpoint interest approximately closes around net is million our level. debt our factoring should XX, X.X with are XXXX year after payments per the current remaining debt our per our principal outstanding weeks, outstanding times our leverage debt XXXX. As debt cash X% balance around million or and Again, $XX will annual about net note August new or of $X.X based debt rate net our balance should to locked that $XXX -- after on cash $XXX drop our adjusted on the had at the debt on term at drop maturing million guide. coming making pipe the in term of payments to June XXXX, the of $XXX The in sheet. million on X.X% we our year I

for And Additionally, covenants With to NOL has of carry income estimate regard I will Not borrowings. has we that year. financial million cash tax $XXX on still debt expect I will total forwards. to around will $X approximately taxes note of Upland no that taxes, that available be approximately million we prior for $XXX these, guidance. utilization current of expiration. per point out term currently our million

by growth dollar XXXX QX both constant forward and revenue following XXXX currency. to a currency Upland's in includes estimated for adjusted impact estimated and is guidance approximately Since start currency X.X U.S. the Let X, resulting the EBITDA. percentage headwind points XXXX year adjusted May period. The saying in full that for $X.X unchanged strengthened FX be total in XXXX FX headwinds a guidance me of million headwind headwind remains the the in larger XXXX, impact

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

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

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

Jack McDonald

Thanks, All right. Mike.

questions. open call the Let's for up

Operator

today from question Needham. first Our Scott Instructions] comes [Operator from Berg you. Thank

line ahead. Please Your is open. go

Michael Rackers

cross-selling Michael customer for are maybe seeing on success Thanks the I'm Considering strong go today. and Hi, where? modules and expansion which quarter my taking a more customers? a just and bit just Rackers Berg. the is on for strength existing on for bit question Could expansions, within This you everyone. Scott deeper

Jack McDonald

Yes.

as years I we momentum at InGenius, on we in has So in some And the and activity the good the expansion eye with say, more accounts, best out in would I managers Insight. we've couple opening remarks, particular the our our global great the cross-sell investments some of look really top focusing quarter, I I in there. Lune over would diamond saw just Objectif where our my some traction made in XXX go-to-market as that past accounts toward created highlighted, account in driving really traction. call Compost, in strong area expansion as BA (ph) and saw an

the we So saw that's quarter. best the motion where in

Michael Rackers

you. Thank impacts regions one just you're any then the specific we're or with macro there where additional Great. And products bigger Are a or more. headwinds facing today? any seeing macro environment just

Jack McDonald

No.

Michael Rackers

Great. Thank you.

Operator

next from comes question Tillman Truist Our from Terry Securities.

Your line open. is

Unidentified Participant

that we (ph) go-to-market kinds see taking accrue? was for on do of and to benefits specifically side hoping benefit partnership. for on click Thanks see This the of I Great. the to on their with when Terry. some is can What Robert question. accruing expertise start the Thanks. you HGGC double

Jack McDonald

Yeah.

a So we at for put HGGC to we is strong the premium the us. pipe that a that together market. Love partner of very think substantial terms

I of in both our think driving expertise, long and as did as real business model after you bring history think driven look And it M&A their when successfully value validation software before. They experience deep it's creation of at I record, operating our a is I in mentioned diligence investing as HGGC track and as coming resources rigorous well improvement. a go-to-market companies.

across So history, XX I that want say they’ve to executed. their year

like transactions these hybris organic XX Denodo total add-on from value it's and companies to like with of of investments think and range systems I software M&A XX high $XX Idera. platform billion. growth sort health platforms around And businesses and transaction

of in I'd investment Again, roughly note HGGC. And talking year. pro that engaged be plan have is sheet. a And going we're forma about final balance we'll the that there we're value million on so building in creation with for to that $XXX more the point cash later

markets see position execute what kind strong So in on we very think we a opportunity in the to very of acquisition a coming we as attractive plan.

Unidentified Participant

Thanks again. great. That's

Operator

comes question Capital with next Rhee from Craig-Hallum Jeff Van Our Group.

Your line go Please ahead. is open.

Aaron Spychalla

appreciate question. is Hey, Aaron I Jeff. you guys. This taking for (ph) on the

from one, First midpoint flat at you midpoint should guidance, back QX, and maybe essentially of the sequentially for QX it's of in take if QX to then Mike, look the the QX.

growing half me a takes the through sequentially that So confidence the about the bit year? and just kind to talk little and into what of back of went puts of kind of around

Jack McDonald

always for on Thanks Aaron. Yeah, conservative We're the question. guidance.

is just been being that as in So I terms the the And guidance quarter think there conservative for most of on of only flatness really that of sequential we're just FX impacts. out again, course, changed right, I has mentioned

shorter So that's of really kind there. the the story

Aaron Spychalla

forward? motion lot changed investment, talk development helpful. the the question, the if I far to here focus sales how of of quarter and me. product me is on about bit over R&D excuse you're as two, Obviously, going investment in product as little the go-to-market you. Got cadence your versus That's -- development but last the just a just or thinking kind next concerned. anything's about And a of talk thinking

Jack McDonald

major yet. just changes there I'd say no

to increased we're right innovation. investments about more year. commitment plan a in looking in and I And additional our internally, the later creation made with have We some of to value We've have number now will our HGGC at say items go-to-market.

Aaron Spychalla

helpful. in. Perfect. can then more I sneak And one last if That's one

far customer, as the expansion Just give anything as in size can you pipeline, curious color anything if changed going any has forward, the of that? versus new like

Jack McDonald

deviations here team you been results no for look on from excited and And current kind QX. bookings, QX, what the was quarter, if course we've think of delivering. is and executing good speed I the in a it at quarter major

we've been doing. highlight I to would beyond say continuation of So what nothing

Aaron Spychalla

me. for it That's it Appreciate guys. Awesome.

Operator

now William Jake from Roberge Blair. turn to We

Please line is Your open. ahead. go

Jake Roberge

Thanks my for Hey, questions. guys. taking

just is you Just as result XXX Because in wanted macro customer over talk you seeing to ever. deals pushed little usual? particularly -- seen what as Have about out been of any just in that's could expansions, you're with seen business a the a that time first bit more we've around really buying environment or the macro behaviors. it get more

great. So that pretty was

more seeing color the love get macro. would on what just to you're So in

Jack McDonald

Nothing would monitoring to call now. in but nothing kind you're this an of out. Obviously, right I call that environment, out that

Jake Roberge

could that that pipeline the then So M&A start obviously, turbulence a able markets really there's pipeline? to acquisition bit that explore and and on valuations do more And quarters or been few of think about you really a Great. your you to you more that public a funding still path lot UC Okay. to top be to talk little Are down. see more capitalize more really macro in to to companies we're coming the businesses volatility? really funnel and starting drive starts starts of and before the

Jack McDonald

of I makes to play. in after around to well environment, control we're kind of we've market. think to capitalized be And the the we think going on the all the in we're patient of the sense. and the delay pipeline make market lived looks into a always echoing decade DC here a And when Well, -- think in before good, once this to of you is to valuation execute public but course, point, companies. we it. of it which backed a the running what's going go kind we there's and are and and private going timing opportunity to going we're going and we're for But be going in public that that. through markets where great seep consolidation is there's software cloud terms in a funding the cycle And a I've seen sound headlines of somewhat in environment

Jake Roberge

my the quarter. Thanks great and for on questions congrats great. taking Sounds

Operator

from James. Raymond now We Sklar to turn Alex

open. is go Please ahead. line Your

Alex Sklar

this really strong Mike, quarter. cash Thanks. generation again

that or additional Should million M%A additional million dollars $XX it another goes, higher a $XX be Does being guidance the about that set and as any to could contemplate think we far As deals? absent way? floor

Mike Hill

Alex. Yeah,

we So did cash XXXX. $XX a free million over little of last year, in generation flow

year, we're in the We roughly QX, expecting here this here million year-to-date. so did QX, million in million So same. $XX $X $XX

it. $XX differences million accounts. could end kind to range $XX possible thing too upper of appropriate. early working So given concerned, be for and seems tell obviously we're the timing We'll of beat that that we it's million and capital shooting to obviously the in Again,

acquisitions timing assumed that of we does know You future size because extent and and asked whether the future it and acquisitions. or not in it not wouldn't obviously, has simply

excludes it So future acquisitions.

Alex Sklar

Very Okay. of Jack, up rods Thank kind following there forward (ph)? the in team in expect changes the of anything structure have in terms been on should you. helpful. then any questions, (ph) terms And announced of And go-to-market some organization the of sales of kind that departure? overall of going we following

Jack McDonald

of leadership We've place in Yeah. The is there. energetic. the with I and a this great call say, morning, opportunities opportunity in us. our front is a more successful. our as HGGC on in existing and insights team team that making support got of bookings And even going terms after an our their to excited of team I avail and efforts go-to-market with we strengthening team ourselves was see

more in say have the year. to later we'll So that on

Alex Sklar

Thank you. Okay, great.

Operator

final from from Our Brent comes question Jefferies. Thill

Please open. go is line Your ahead.

Luv Sodha

is little bit the This still cross-sell And Maybe (ph) and ask just if Brent taking Thank the there? talk and GAMs Sodha questions. the you then on one, about a for the for motion could on top priority. is Thill. Wanted that investment following to question. up go-to-market a productivity first my Luv you

Jack McDonald

Yeah.

through and product look really much customer you we I our executing and a there. through no part is say also and generally, we're our changes our expansion that GAMs Upland's is big to key so don't plan. of know there organization what our sales success, do AEs current against If obviously at motion

Luv Sodha

the the Mike. embedding of Got guide? it. may you for one Are the One given if conservatism on into any companies our are environment. quick and I coverage a more lot additional conservatism embedding macroeconomic

Mike Hill

Luv. Yeah,

tried our Of on conservative be to course, always so. remain guidance we've and

normal there's So a Upland decent typical feel our like there is, in so conservatism guide. we healthy amount,

Luv Sodha

you. that investment. I the could talk you're question levels? it. guess, the doing these cash the generating cash Got through guess last I one healthy at of on free flow. Thank HGGC given position rationale maybe you And the and raise

Jack McDonald

to a $XX.XX which Yeah. in per take Look, is significant HGCC This incredibly excited was attractive share Upland. we're pipe, that an priced have growth conversion Luv stake price.

price. to a premium So structure our or in pick cash at dividend our it's It's got significant clean current option.

us track a firm a that's real build validation think and of a smart with successful that a partnership getting business of it's value help software I and that our a model as investor. done record long-term can got

X.X the we've It think plus $XXX million We the we to support to we've us right partner. got It cash. strengthen of leverage got go-to-market. and So our really reduces think help gives times that credit cash to to next years our facility couple attractive we us against M&A strong flow coming give a our build and opportunity the this financial and term foundation here. execute see on long that over

Luv Sodha

it. Got you. Thank

Operator

our final I'll and concludes hand back for This McDonald, to CEO Chairman Q&A. remarks. Jack now

Jack McDonald

Okay. the earnings Well, much call. see thank next we you very you will and on

Operator

to like your We'd concluded. now is call participation. thank you Today's for

You now disconnect your lines. may

Upland Software (UPLD) 3 Aug 222022 Q2 Earnings call transcript