Upland Software (UPLD) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $66.7M, down 10% year-over-year, mainly due to declines in Sunset Assets and core subscription revenue.

• Adjusted EBITDA for Q3 2024 was $14.0M (21% margin), down from $16.2M (22%) in Q3 2023.

• Net loss for Q3 2024 was $1.7M, a significant improvement from $8.7M in Q3 2023; net loss per share improved to $0.12 from $0.31.

• 122 new customers added, including 18 major ones; 312 existing customer expansions, 27 major.

• No new acquisitions in 2024; focus remains on core growth, integration, and AI-driven product momentum.

Financial highlights

• Recurring subscription revenue: $63.8M, down 9% year-over-year; professional services: $1.8M, down 32%.

• Gross margin stable at 70%; product gross margin: 72% (75% cash gross margin).

• Operating expenses decreased 15% year-over-year to $50.3M, driven by lower personnel, stock compensation, and amortization.

• Q3 GAAP operating cash flow: $4.3M; free cash flow: $4.2M, both down year-over-year.

• Ended Q3 with $59.7M in cash after $177M in term loan paydowns.

Outlook and guidance

• Q4 2024 revenue guidance: $65.9M–$71.9M; subscription revenue: $60.2M–$65.2M (5% decline YoY at midpoint).

• Q4 2024 adjusted EBITDA: $13.4M–$16.4M (22% margin at midpoint), up 6% YoY.

• Full-year 2024 revenue: $272.6M–$278.6M (7% decline YoY at midpoint); adjusted EBITDA: $54.1M–$57.1M (20% margin), down 14% YoY.

• Targeting low- to mid-single-digit core organic growth and adjusted EBITDA in low to mid $60M for 2025.

• Sufficient liquidity is expected to fund operations for at least the next twelve months.