Upland Software (UPLD) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $69.3 million, down 7% year-over-year, with subscription and support revenue also declining 7% to $65.5 million; core bookings exceeded core churn for the second consecutive quarter, supporting targeted 3% core organic growth in 2025.

• Adjusted EBITDA was $13.6 million (20% margin), down from $16.6 million (22% margin) in Q2 2023, but up sequentially from Q1; net loss improved to $11.4 million from $15.1 million in Q2 2023.

• 155 new customers and 17 major customers added; 275 existing customer expansions, including 41 major expansions.

• Investments in sales, marketing, and product development are yielding larger deals and improved pipeline generation, with AI integration and product enhancements driving product recognition and customer engagement.

• $11 million in share repurchases completed in the first half of 2024, exhausting the authorized repurchase plan.

Financial highlights

• Gross margin was 70% in Q2 2024, with product gross margin at 71% and cash gross margin at 75%.

• Perpetual license revenue increased to $1.7 million from $1.3 million year-over-year; professional services revenue declined 23% to $2.1 million.

• Operating expenses (excluding D&A and SBC) were $37.9 million (55% of revenue), reflecting ongoing growth investments; total operating expenses decreased to $54.2 million from $59.7 million year-over-year.

• Cash and cash equivalents at quarter-end were $232.4 million.

• Net loss per share was $0.47 in Q2 2024, compared to $0.51 in Q2 2023.

Outlook and guidance

• Q3 2024 revenue expected between $63.2 million and $69.2 million, with adjusted EBITDA between $12.5 million and $15.5 million (21% margin midpoint), representing an 11% revenue and 13% EBITDA decline year-over-year.

• Full-year 2024 revenue guidance raised to $269.6 million–$281.6 million, adjusted EBITDA to $52.6 million–$58.6 million (20% margin midpoint), both reflecting a 7% and 14% decline year-over-year, respectively.

• Sequential quarterly adjusted EBITDA growth expected throughout 2024, exiting Q4 at nearly $60 million annualized run rate, targeting mid-$60 million in 2025.

• No new acquisitions are planned in the near term; growth to be driven by existing product suite and operational improvements.

• Current liquidity and cash position are expected to be sufficient to fund operations for at least the next twelve months.