UPLD - Earnings call transcript Q2 2024

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 2021 Earnings Call Later, [Operator Instructions] I'd now like to turn the call over to John McDonald, Chairman and CEO of Upland Software. Please go ahead, sir.

John McDonald

All right. Thank you, and welcome to our Q2 2024 earnings call. I'm joined today by Michael Hill, our CFO. with review. start to going our QX I'm And the numbers Mike will detail on provide some and following that, our guidance. After call that, up for Q&A. the we'll open But safe read before Mike statement. we the started, get harbor will

Michael Hill

Jack. right. All you, Thank

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

John McDonald

Mike. Thanks, right. All

quarter. headlines revenue the beat the are midpoint. on and EBITDA adjusted our guidance QX We Here

posted in core excess midpoints. bookings we did of those QX. just churn, So like in beat We core

meaningful the X% based going That's key I'd posting this organic point of this row, But target up in churn. and us compares in And excess core is churn you the bit the after up the sequentially X up That on organic set bookings continue year, Good bounce EBITDA, adjusted quarter in adjusted bookings in a quarters from quarter. on that's core what's as quarter year. quarter. this year, guidance, million to core first is by midpoint quarter-by-quarter. our for core that's again, rate can that So a for this adjusted of in of positive growth news year-over-year this part note rate the each see around we of quarter. $XX.X it's in expect growth to our front. will EBITDA core XXXX. excess million second core putting the in the QX also $XX.X to of grow quarter EBITDA

$XX.X million $XX.X QX, in QX, million $XX in So QX, in again, in million QX. million $XX.X

rate. at the is the So to year nearly million $XX plan run adjusted EBITDA a exit

to organic core to positive So we're expansion targeting next of core growth for growth. X% adjusted organic We're and number million setting that the next going up with year XXXX mid-$XX be year. EBITDA continued

bringing the believe, and the starting towards quarter. quarter growth going this the EBITDA on of steps positive we with each terms low turn, now core getting show in up And So to and made organic EBITDA. past quarters both forward, point

but ship in to early starting the see turn stages, are still we here. again, So the

customers. includes to welcomed we in new So new major XXX XX Upland and QX, customers that

green that's capacity, in are ARR shoot. XXX expansions. growth lead pipeline with products, for expanded XX capacity, deals larger customers, will I also including a generation, we chunkier to and our we've We deals, And relationships sales critical SDR see that investment kind of say the based starting existing made major on

our sales we've some deals. A We including done, search, to an the we up done, those good the SDR spring team those marketing-sourced having products. work we've qualify that I'll deals from XXXX reports Again, GX's it's fruit in accessing intent leads, earned capacity portfolio bear right? on market starting other caution to Summer seeing and work terms the green so in that early, where, data, but That's organic shoots XXXX these was points. marketing the done of see news badges that work And So investment starting that it's product done that XX are badges the their that that pipeline, the larger it's XX in we've chunkier here. to we're across in of few we've reports.

garner Our AI knowledge to management in Upland software, continue proposal our increased Upland recognitions while in numerous another Panveva, answers Covidien, solutions, quarter a AI up power earned management badges, row. right and and

Interfax, and, service a which list. cloud-based products is badge secure I see more talked process Upland And and AI, is which IBM Watson X release partnership GX new beginning beta to powerful enhance continues a new that assist in got sales the customer response RFP this also badges standout which Additional And Covidien goodness to processes would a proposal industry RFP helping expect response personalized to called these fact receive we've telephony right note, responses. again, to dedicated AI platform, with other as adds come and AI course, for RFP reviews to capabilities in of a leader products the is with Uplanded of and on engagement computer the quickly Qvidian. service uncover more generation model integrating with proposals and a Genius, proposal we quickly and AI more included integration Upland Qvidian AI assist. is before And the powers and course, solution, easily from Covidien features. there. also AI automation teams about of and with the create Covidien and we've regenerative

beta, integrate Panveva, our into answers to of now some some products. And global XXth, began centers radiology a generally cases, to and that you of year a at in initiatives beginning imaging teleradiology million integration look deep is are note Upland at these in announced Upland the of XX When RIS, announcement right work both solutions cases, leader are Ramot for capabilities and you providers, And and examples. available. transmission fax were Covidien we come product course, the ago and PACS partner where in So over cloud-based also Ramot are PowerServer that the AI a through of Interfax. to these market, well milestone in look doing

and including it's robust So features, PIA secure power complement security compliance HIPAA service, compliance, HIPAA-compliant Interfaces architecture.

services, as solutions, seeing really and growth there care Upland some secure high-margin characteristics have note our some products great an some but for Altify. great see. time are transfer which of also on that, with seeing we're and so I to a And seeing success acceleration health is we file also in financial as

contained of our Altify that announced X.XX the release, which can course, platform. the space way forces deploy enhancements sales a experience enterprise products Altify the we planning force and is sales that methodology, of and native. and do sales quarter, is white analysis transform a the and that kind really course, activities, of to release enables And in customer generation AI needle BXB terms adding product move During Altipy's of the really account to capabilities super-efficient sales major with native to and force coordinate

at again, evolution. Salesforce the in step us So been for partnership the has X.XX, just next and great Altify

numbers a the the call driving expansion. and Mike and margin review with towards to to guidance. going step to growth quarter, the another So that, great along over driving Mike? way I'm And turn

Michael Hill

assets. XXXX All our and you, our outlook sales, financial investments third and of I'll of growth results marketing, quarter outlook the quarter the as results for to the right. product our and pursuant year Thank These full and the our continued runoff announced plan the Jack. well second previously XXXX. as XXXX reflect incremental cover for for Sunset

are $XX.X quarter Professional with our assets. of revenue planned XXXX. second second quarter, were been on million, reflects we for $X.X or the our quarter, XX% and growth $XX.X was was of This was is making for compensation, million services in XX% sales, $XX.X income and expectations that's back to XX% we refer year-over-year. declines subscription XX%, Overall margin. during the Operating X% and $X.X the revenue second runoff from a statement. second which year-over-year of So year-over-year million amortization, amortization, Provincial was and line when and with total quarter, and and for have $X.X X% million of adding product the product declined Sunset investments decrease plan. expenses our million. the revenue marketing, revenue gross consistent quarter, to of up margin from license excluding gross the quarter our cash in depreciation, a the These Recurring increased the as part XX% for the decline. as Total margin support the million stock-based revenue revenue. gross of 'XX, representing quarter second for depreciation to

This $XX.X generally revenue our total second XX% decision XXXX for from of second the EBITDA quarter investments Our of year-over-year growth or our of EBITDA regarding Sense million total is and XX% revenue, considering $XX.X assets. million decline adjusted or adjusted down quarter as was XXXX. expected,

our QX as QX this million million Jack guidance. to million quarter the $XX.X each see quarter said, QX million sequentially midpoint QX and year growing in on to based in $XX.X EBITDA of this However, $XX.X can you from in adjusted in our $XX and

has as up said, million $XX EBITDA, for Jack us, of mid-$XX the annual adjusted setting million this So rate us year. almost and run XXXX exiting next

$X.X which cash with is for the $X.X For GAAP was expectations. XXXX, free in cash and of quarter second flow flow cash was line million, operating our flow, million,

of XX, the generation to is remaining $X during net free note had approximately ongoing stock plus quarter. of repurchase of million XXXX. stock June, of The that of our on XX, million approximately now debt million to cumulative the of at addition common $XXX a after we million approximately our also cash buyback shares June that of September SOFR in second in back XX. as will flow X.X our outstanding interest the XXX stock repurchase. used debt balance our cash we factoring $XX At end June under gross term the that flows points, QX, $XXX plan debt the interest I on cash Our sheet XX. of X our At of was in is early approximately fully is rate of cash This program sheet. of an concluded rate August limited was our began buy million total XXXX. shares which at of of X.X% basis in with million approximately full million of million of end still balance effectively maturity hedged which our debt, our term million, X.X% on our $XXX portion $XXX approximately through which locking of at debt $XXX

Now the guidance. on

following related sales, As described the marketing, a product plan the I reflect we as amount the expenses as part our full-year investments and our Sunset growth beats. as that on have of past adjusted effects significant and revenue calls, assets. QX midpoint making and incremental for to by that will continues guidance Also, the total the well of comprehensive revenue decreasing guidance raised of XXXX are to EBITDA we guidance midpoint note

reported So $XX.X decline expect midpoint September $XX.X $XX.X revenue for quarter support XX% we from the of for the revenue in between the and million XXXX. at million quarter XX, revenue and $XX.X be including a ending to million, ended between September total XXXX, subscription XX, and million total

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

the margin at from and for a adjusted ended EBITDA growing adjusted guidance reported XXXX, Full-year million, annualized XXXX. XX, which $XXX.X between XX, again, For $XX.X total of XXXX in December December a ending total year million the guide of be revenue the XX% million both quarterly subscription $XX.X every million, EBITDA an to total year of $XXX.X and is support and X% sequentially the year we between adjusted these million year, in $XXX.X for ended decline including million, be decrease midpoint mentioned have a December between this revenue $XXX.X and XX% $XX is from to the implied million $XX.X almost represent guidance year in rate. Jack the EBITDA I expect XX, million, the at expected full point for out, at at revenue This for and decline XXXX, midpoint. quarter EBITDA the exiting of that QX midpoint, as I'll run at adjusted is points midpoint and

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

John McDonald

Mike. right. All Thanks,

Let's open there might and the call-up take any be. questions

Operator

your by the number X. All is on right. followed That star # Perfect. X telephone keypad. again

line the from comes Black from Needham. question of Ian first Our

Scott Berg

Core exceeded Black you changes note, go-to-market core Scott is churn, far is the company bookings through Berg. for on but now? as Ian This again, have how the

John McDonald

I put would the demand lead sense qualification we've through in gen about that lead in the that that we place inside process we're put place teams say in put halfway in the place sellers. and generation the we've

field We force. sales have upgraded our

in place leadership. And some which to see terms few of we to brought a new are and great products. the generation pipeline across seeing in have the We beginning sales is increases put that of in hitting, see significant in now chunkier sales results of

and those to has now fruits labors been here. begin work the starting of so done, ripen And the we're see to

ops, growth now benefits as well seeing, on in numbers. cloud the And positive quarters that investment quarter-by-quarter. put again, renewals net those you in we we're and where we're our seeing that time, So of good feel was execution are and a and core part ARR. At together, and product the of X X row of same about we

realize run second set half next $XX attack that the up the growth rate the I our at of about core EBITDA And that's a year. to us next million But QX again, goal organic adjusted to with the we're year. X% to And only beginning. the target get feeling in million mid-$XX Now exiting year good should year.

EBITDA, X% we rate sort take least million, to we've if or core at we're made going having at of $XX single and this of a now and higher from troughed there. million, million So turn digits to low back organic business it And with see mid-$XX $X the negative of turn. thing get negative next that of then, to this we year made course, want growth

Operator

of Craig Jeffrey Our line Rhee from Hallum. from the next question comes Van

Jeff Van Rhee

is on Dan This for Jeff.

on assets. just the Just Sunset off starting

about of assets. a guys getting million $X.X do of You great there's XX-Q still promptly out sunset the job looks like

Just thoughts maybe like down about that? expect roll-off? roughly sort off should absolute on of on expect of million. and looks that we It how value that a we should the Or of modeling how basis, that's similar pace to pace unfold. we an of just $X roll year-over-year, Should be

Michael Hill

Yes, Daniel, is Mike. this

So We've with calendar XXXX. of from standpoint, the here just got about modeling consistent it's $XX million we've think going to asset be in Sunset a past. what I in revenue very said

about $XX year. million, to And Next year, XXXX, next million $X million, XXXX, it half, in or it, that's will going million. so to again decline then call to have down $X somewhere $X around

the of So sort that's the of runoff. pace

Jeff Van Rhee

thoughts And envision just to we tackling the incrementally is XX%, being refinancing? then as debt especially the how toward a point and you any of for closer on, get as the what strategy considering balance path M&A, just

John McDonald

Yes. This is Jack.

of a doing refinancing the XXXX. So first we half anticipate in

So execute we'll that's then. it the plan, and against

Jeff Van Rhee

product for level, last Okay. portfolio for to And look product the the to of and just down then as me. weakness. Digging sort you

John McDonald

a and Paiva have some used saw saw Altify, good enterprise a is contact both centers solution, right enterprise cognitive for sales enablement our which growing is some and a regulated positive in which solutions. with earlier, the BAI, BXB variety Microsoft, implementations. where deals where applications momentum We as I including connectors on of solutions, a QX. products answers which some number are AI-powered lot there. search we've remain of industries, our we highly where mentioned nice our Azure got a highlights partnership We're in industries. part is chunky of knowledge Well, One AI there. seeing in of

which, solution. Mobile our but mobile seeing again, So turnaround We're still that early, messaging positive nice a see continuing text to Commons, is results in there.

into at the positioning in the growing look commerce we we've key products of efforts. organic over terms in put X.X products, search work investment, investment, when that the our them last So upgrading stream appropriately, years these our of product cloud the by getting

now first ranking. all double we've For were rankings X X.X got number page. a #X not and much top first-page years And XX rankings. that products, lot of ago, rankings our search We've got pretty these

be I those of there. are are reviews of with So but also still the products. of increasing are recognition, the GX, These out a to mentioned badges we work number done, ton a where part good

job done and product the brought in portfolio reasons the we enough $XX not year focus of them. ago. this million a a marketing investment have the That's a We selling years good couple to one investment. and committed HGGC million, $XX of growth

in by see results We're also we're Obviously, by making some feel others. we're success. we products but we've areas, be learning quarter the basic So down investment And quarter-by-quarter. that's execute on quarter, seeing month positioned, doing take month, toggle seeing in at we're been But to starting we tweaks, good the we investment are where where and it. toggle again, just it, opportunities or better. to to we're up things hard can of the need about

Jeff Van Rhee

me one for just Mike. then last And for

Just us to content out XX% up to XX%. down through on trajectory can modeling margins, business transitioning there. to of How the the of sort read was, help as sort we hard margins gross be is let's 'XX, tell the gross on assets, hard trajectory XX%, of It's QX the say, there? you should to cut

Michael Hill

Yes.

the will are Those little even gross those Daniel, generally assets lower-margin I improve as sunset think products, over gradually margins. decline. bit a time, margins

sort So gradually. time now not of points kind tens improvement I'm talking of but a about lot, of over basis

Jeff Van Rhee

me. That's helpful. That's Okay. for it

Operator

of question from from next line the Alex Sklar Our comes Raymond James.

Alexander Sklar

for market. could you're was Jack, comment on Alex. the curious seeing I John you sales if is cycles on maybe This in

we out sales cycles. elongated calling Some have been companies like

have I a you seeing how over days. few speak what trends follow-ups. that maybe and last if you're curious And Just XX to the could

John McDonald

No.

of sales seen We have a cycles. not lengthening

because anything, our gosh, months. we ARR that efforts source marketing the of quarter. couple marketing were up we're $XXX,XXX closed that ramping regard saw But aosyncratic started we've in if and maybe a over in last sourced Now XX deals really

demand right next So you now different in result, ask in quarter, me AI-powered for solutions maybe seeing the marketplace, but we're seeing that didn't lengthening have see QX. a we the not we'll

Alexander Sklar

there? what's trough expansions, were how you about And commonality, any to you expect think remarks, And question the helpful into success up year-over-year. kind a of that driving geographically? on trajectory we the prepared account my which near-term leads some just but hit sequentially of the That's major the know commentary maybe next that there. rig metric? Do mentioned should here? on nicely and I

John McDonald

I understand the make out You're this the [indiscernible], you effort, talking CS effort leadership. about called there. of expansion question. to sure want I growth -- account just that in guys Yes. major our was in bringing new Part

value. our new we Infor, brought in Customer driving tech to customer partners reactive being step our is that are early the where it customers, in with a from We've rigor from and Revenue of and Officer. in So from enablement investing CS. a level being Officer, was Officer we of year a We've in in Sales or been Again, and deployed up Chief Chief a really proactive discipline success process, our function Chief ago. team Success moving but change that teams stack

And we're well here. in as optimistic keep so check NDRR over last that as both to GDRR up see improved the year might NDRR. is I'm improved going me

Yes. I basis think about XXX points?

at we're so or was that XX I was that at the least pick XX% running think disclosed mark year-end And million. at now

drive bookings bookings of as points of we're disproportionate Expansions yet that been pipeline all been expect activity think sales decline another by And in to around our X right? we're today. I improve be supplement that our the couple bringing to a our couple couple XXX us on this share logo Because and are efforts next to opportunities to there's we've to more can I done. the expansions marketing. at base of expansion of leaving on Again, success frankly, existing larger base, that think I comprised past customer work to value work we of generation over So a of we doing our years. the also new in lot for logo increases, we're capability customer way new that. there's opportunities. early share investment years. over been And customer customer is process, the making to teams has because basis table directing the And of the have be goal of the doing

plan. a still of thus again, And of good. it's But do. far, look So core signs the work part our to lots growth

Alexander Sklar

about can then one you Okay. any that just last And on here. pieces talking moving there's That's the for realize just helpful. I acquisition internally me. forward. you've going pipeline share But been commentary

quarter, you're always think I you looking. last mentioned

multiples as M&A from what how and the should move curious private seeing think we we Just forward you're in about model?

John McDonald

will focused to opportunistic. see going organic high. our next we course, we're the on margin we down and and flow market to continue We're here. multiples driving expansion focused debt. years to I Private create stay in focus, opportunities remain how cash the be and growth. generating on and That's of also are over monitor of and pay couple value then, to continuing But

not XX months, based keep look focus. at months. we That's private on today. that's, So least as where have XX seen out And remained of high, any too the just is core for I not have I think always over trading next really I the have the been us out really open. the course, our market XX of core our to that's screaming there. multiples kind eyes But opportunities stock we just

Just make case for hard a to it.

Alexander Sklar

That's helpful there. color

Operator

David next comes And Hynes of from as Canaccord from a our reminder, the line question Genuity.

David Hynes

Reagan Dan to one for start. for is This Maybe DJ. on Jack

are So marketing you nice sales intent, and capacity. some like SDR investments your search areas from across seeing guys returns

pace investments the positioned of productivity also to then investments guys sales as clearly, wondering around to And that you have from they these you're I'm But nice here. here? continue ramp. thinking any just guide how marketing So of thoughts and path EBITDA are about from the

John McDonald

of are we think execution I in invested of So plan laid we terms out. fully the originally

opportunity that lot chunk and to with center on to of to Indian a our do the do $XX investment, million million of was side, you'll that from we've has that standing a of XXX and of there, up able that and where super-efficient we developers it a So that product been don't as was pods gone X has a need excellence deployed. annual that with we're we on $XX a had sales recall, million had $X to you marketing, further to grow put there. There, place fully see in forward spend increase to development and investment. Then move that

In in all target fact, are We've money place. we're systems processes better we seeing to the opportunities got the the We've spending. got in place.

Now it's about it motions, think get tuning organic to to it more rankings these place maintain it. Many about cost those of in example, does you for search, than them.

So data content you your in to reviews, that market. the on start forward get are intent we getting the positive now the accessing out roll

a on frankly, we're And more time. be of motions, And why XXXX. of we'll have something efficient those already for get with lot those the reasons will again, done. Again, that's one targeting year, we're been organic. mid-XXs. then X where So I And you'll handle think see through in continue starting to enhancement. the next some things that think targeting see it a And margin I all to

David Hynes

traction? you Got Can you're you ARR for deal most the average bit is talk where you. the core a looking And what like? deals little in about highlighted Awesome. seeing size increase chunkier products. lands larger And then

John McDonald

Yes.

is customers you if drive our the XXX,XXX. our XX% at customers So enterprise more average of across X,XXX than those revenue business, look ARR and

right chunky bigger. or in range a with opportunity that size sometimes go you that's Now in

of and $XX,XXX expand starting opportunity. Sometimes kind land or $XX,XXX with you're

Doman's marketing, too demand gen, the the got, to up in us and side, of on the small sales tremendous product Over tools after some I again, a has And early, little for past the that the done on over bit we're want in board new always opportunities. last talent, not we've it's leadership had more getting product just we're seeing done of now put going investment we've on couple our it, couple, of new we've years, team fine and a stuff. hands this. great the but bigger the salespeople years, X emphasize investment what of kind the mojo sales back investment Dan but the point a to getting in the And then job seeing adding getting of set on

So for able getting needed issues, well products over any the that we chat contact center these addressing like out bring really around RightAnswers, to year be and AI, us starting where first ago stability the were market of product opportunity feature be, a to issues, GPT to to there, first we to seeing addressing platform the a integration. so efforts one

that's see deals. be to we're some going those again, to And chunkier it's we're So but optimistic. what starting of quarter-by-quarter,

David Hynes

do the And mix final back expansion kind Awesome. with does next revenue you a over off here. sales then made and just few those and years? growth net this that current new will that building of marketing the and all as making customer revenue expansion of mix where expect one, you're investments, today? you And then look discussion that with circling to What the of just the comments progress go like between

John McDonald

But with year's it expansion. of a and that, And know new running pit. it But which new. probably see where where you this the that would investment we're more couple going be XX-XX, say making, been year next of expansion, historical XX-XX. don't were would I I of XX getting we're statement. that's of at .Some back us Yes. the to kind is should has trough The for looking XX% business at average now. XX% years for sort it I more I be will roughly will it's -- statement, to more that a see XX this ago,

Operator

the it back over I'll At remarks. to queue. questions more this turn for are no Jack closing time, in there McDonald

John McDonald

everyone we our next you for thank quarterly just much. call. I so to want will Okay. time on see and you earnings their Thank today,

Operator

conclude And today's presentation. a day. pleasant that does Have

Upland Software (UPLD) 1 Aug 242024 Q2 Earnings call transcript