0001505155-21-000007.txt : 20210224 0001505155-21-000007.hdr.sgml : 20210224 20210224160503 ACCESSION NUMBER: 0001505155-21-000007 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 20210224 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20210224 DATE AS OF CHANGE: 20210224 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Upland Software, Inc. CENTRAL INDEX KEY: 0001505155 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 272992077 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36720 FILM NUMBER: 21673035 BUSINESS ADDRESS: STREET 1: 401 CONGRESS AVE. STREET 2: SUITE 1850 CITY: AUSTIN STATE: TX ZIP: 78701 BUSINESS PHONE: 512-960-1010 MAIL ADDRESS: STREET 1: 401 CONGRESS AVE. STREET 2: SUITE 1850 CITY: AUSTIN STATE: TX ZIP: 78701 FORMER COMPANY: FORMER CONFORMED NAME: Silverback Acquisition Corp DATE OF NAME CHANGE: 20101105 8-K 1 upld-20210224.htm 8-K upld-20210224
0001505155false00015051552021-02-242021-02-24


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
February 24, 2021
Date of Report (Date of earliest event reported)
UPLAND SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
Delaware001-3672027-2992077
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer
Identification No.)
401 Congress Avenue, Suite 1850
Austin, Texas 78701
(Address of principal executive offices, including zip code)

(512) 960-1010
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.0001 per shareUPLDThe Nasdaq Global Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                                             




Item 2.02 Results of Operations and Financial Condition.

On February 24, 2021, Upland Software, Inc. issued a press release announcing its financial results for the quarter and full year ended December 31, 2020. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01      Financial Statements and Exhibits.

(d) Exhibits.
Exhibit No.
 Description
104The cover page from this Current Report on Form 8-K, formatted as Inline XBRL




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
UPLAND SOFTWARE, INC.
By:/s/ Kin Gill
Kin Gill
SVP, General Counsel and Secretary
Date: February 24, 2021


EX-99.1 2 a4q20991earningsrelease.htm EX-99.1 Q4 2020 EARNINGS RELEASE Document

EXHIBIT 99.1
Upland Software Reports Fourth Quarter and Full Year 2020 Financial Results
February 24, 2021, 04:01 PM Eastern Standard Time
AUSTIN, Texas--(BUSINESS WIRE)-- Upland Software, Inc. (Nasdaq: UPLD), a leader in cloud-based tools for digital transformation, today announced financial and operating results for the fourth quarter and full year of 2020 and issued guidance for its first quarter and full year of 2021.

Fourth Quarter 2020 Financial Highlights

Total revenue was $78.2 million, an increase of 18% from $66.1 million in the fourth quarter of 2019.
Subscription and support revenue was $74.9 million, an increase of 27% from $59.1 million in the fourth quarter of 2019.
GAAP net loss was $5.7 million, or a loss of $0.19 cents per share, compared to a GAAP net loss of $19.9 million, or a loss of $0.80 cents per share, in the fourth quarter of 2019.
Adjusted EBITDA was $26.6 million, or 34% of total revenue, an increase of 7% from $25.0 million, or 38% of total revenue, in the fourth quarter of 2019.
GAAP operating cash flow was $21.5 million, an increase from $7.0 million of GAAP operating cash flow in the fourth quarter of 2019. Free cash flow was $21.2 million, an increase from $6.7 million of free cash flow in the fourth quarter of 2019.
Cash on hand as of the end of the fourth quarter of 2020 was $250.0 million.

Full Year 2020 Financial Highlights

Total revenue was $291.8 million, an increase of 31% from $222.6 million in 2019.
Subscription and support revenue was $277.5 million, an increase of 36% from $203.9 million in 2019.
GAAP net loss was $51.2 million, or a loss of $1.92 cents per share, compared to a GAAP net loss of $45.4 million, or a loss of $1.96 cents per share, in 2019.
Adjusted EBITDA was $99.9 million, or 34% of total revenue, an increase of 21% from $82.5 million, or 37% of total revenue, in 2019.
GAAP operating cash flow was $35.6 million, an increase from $12.1 million of GAAP operating cash flow in 2019. Free cash flow was $34.5 million, an increase from $11.0 million of free cash flow in 2019.

"Q4 was a strong close to a year that demonstrated the strength and resilience of Upland’s business,” said Jack McDonald, Upland’s chairman and chief executive officer. “We posted record organic growth, and free cash flow and, after the end of the quarter, we announced the acquisition of Second Street, restarting our M&A engine,” he added. “Our acquisition pipeline is robust, and our acquisition program is self-sustaining as our free cash flow and financial resources mean we are no longer dependent on the equity capital markets.”

Fourth Quarter Business Highlights

Posted a strong 94% net dollar retention rate.
Expanded relationships with 242 existing customers, 55 of which were major expansions. We also welcomed 111 new customers to Upland in Q4, including 38 new major customers.
Focused on enhanced security features and customer collaboration, with five major releases and 11 feature packs across Upland's product portfolio. For example: in our Project & IT Management product suite, we expanded our Microsoft Teams integration to accelerate cross-team collaboration and communication for our users; and in our Document Workflow product



suite, we announced new capabilities and integrations focused on in-demand security features, such as single sign-on.
After the close of the quarter, closed the acquisition of Second Street, expanding our audience engagement platform within our CXM Cloud.
Continued investment in go-to-market initiatives, including establishing the Global Account sales team focused on our top 175 customers in key industries like Financial Services, Healthcare, CPG, and High Tech, building a new, centralized lead generation Sales Development team, and, after the close of the quarter, launching a refreshed brand and streamlined website.

Business Outlook

For the quarter ending March 31, 2021, Upland expects reported total revenue to be between $70.6 and $74.6 million, including subscription and support revenue between $67.6 and $70.6 million, for growth in recurring revenue of 8% at the mid-point over the quarter-ended March 31, 2020. First quarter 2021 Adjusted EBITDA is expected to be between $21.6 and $23.6 million, for an Adjusted EBITDA margin of 31% at the mid-point, representing a reduction of 8% at the mid-point over the quarter-ended March 31, 2020, reflecting our incremental investment in our sales headcount and related lead generation activities.

For the full year ending December 31, 2021, Upland expects reported total revenue to be between $288.6 and $300.6 million, including subscription and support revenue between $276.3 and $286.3 million, for growth in recurring revenue of 1% at the mid-point over the year ended December 31, 2020. Full year 2021 Adjusted EBITDA is expected to be between $90.8 and $96.8 million, for an Adjusted EBITDA margin of 32% at the mid-point, representing a reduction of 6% at the mid-point over the year ended December 31, 2020, reflecting our incremental investment in our sales headcount and related lead generation activities.

Conference Call Details

Upland's executive team will host a live conference call and webcast at 4:00 p.m. Central Time, 5:00 p.m. Eastern Time today to review Upland’s financial results and outlook for the business. The call can be accessed via a webcast on investor.uplandsoftware.com, or by dialing 1-866-270-1533 in the United States or +1-412-317-0797 if outside the United States, using the conference identification number: 10151107. This webcast will contain forward-looking statements and other material information regarding Upland’s financial and operating results.

Following the completion of the conference call, a recording of the webcast will be made available at investor.uplandsoftware.com for twelve months.

About Upland Software

Upland Software (Nasdaq: UPLD) is a leader in cloud-based tools for digital transformation. The Upland Cloud enables thousands of organizations to engage with customers on key digital channels, optimize sales team performance, manage projects and IT costs, and automate critical document workflows. The Upland Cloud is backed by a 100% customer success commitment and the UplandOne platform, which puts customers at the center of everything we do. To learn more, visit www.uplandsoftware.com.





Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: Adjusted EBITDA, non-GAAP net income (loss), non-GAAP net income (loss) per share and free cash flow.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results, such as our revenues excluding the impact for foreign currency fluctuations or our operating performance excluding not only non-cash charges, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and they are used by our institutional investors and the analyst community to help them analyze the health of our business. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the tables provided below in this release.

We are unable to reconcile any forward-looking non-GAAP financial measures to their directly comparable GAAP financial measures because the information which is needed to complete a reconciliation is unavailable at this time without unreasonable effort.

Upland defines Adjusted EBITDA as net income (loss), calculated in accordance with GAAP, plus net income (loss) from discontinued operations, depreciation and amortization expense, interest expense, net, other expense (income), net, provision for income taxes, stock-based compensation expense, acquisition-related expenses, non-recurring litigation costs, and purchase accounting adjustments for deferred revenue.

Upland defines non-GAAP net income (loss) as net income (loss), calculated in accordance with GAAP, plus, amortization of purchased intangible assets, amortization of debt discount, loss on debt extinguishment, stock-based compensation expenses, acquisition-related expenses, non-recurring litigation expenses, purchase accounting adjustments for deferred revenue, non-recurring provision for income tax, and the related tax effect of the adjustments above.

Upland defines free cash flow as GAAP operating cash flow less purchases of property and equipment.

Upland defines major accounts as accounts with greater than or equal to $25,000 in annual recurring revenue.

Upland defines major expansions as existing customers who expanded the amount of annual recurring revenue under their contract by at least $25,000.

Forward-looking Statements

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance, including our guidance related to future performance, and are subject to substantial risks, uncertainties and assumptions. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements.



Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make. Accordingly, you should not place undue reliance on these forward-looking statements. Forward-looking statements include any statement that does not directly relate to any historical or current fact and often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "hope," "predict," "could," "should," "would," "project," or the negative or plural of these words or similar expressions, although not all forward-looking statements contain these words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including, but are not limited to: our financial performance and our ability to achieve, sustain or increase profitability or predict future results; our ability to attract and retain customers; our ability to deliver high-quality customer service; the growth of demand for enterprise work management applications; our plans regarding, and our ability to effectively manage, our growth; our plans regarding future acquisitions and our ability to consummate and integrate acquisitions; maintaining our senior management and key personnel; our ability to maintain and expand our direct sales organization; our ability to obtain financing in the future on acceptable terms or at all; the performance of our resellers; our ability to adapt to changing market conditions and competition; our ability to successfully enter new markets and manage our international expansion; the operation and reliability of our third-party data centers and other service providers; our ability to adapt to technological change and continue to innovate; our ability to integrate our applications with other software applications; our ability to comply with privacy laws and regulations; and factors that could affect our business and financial results identified in Upland's filings with the Securities and Exchange Commission (the "SEC"), including Upland's most recent 10-K filed with the SEC. Additional information will also be set forth in Upland's future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that Upland makes with the SEC. The forward-looking statements herein represent Upland's views as of the date of this press release, and these views could change. However, while Upland may elect to update these forward-looking statements at some point in the future, Upland specifically disclaims any obligation to do so, except as required by law. These forward-looking statements should not be relied upon as representing the views of Upland as of any date subsequent to the date of this press release.

###

Investor Relations Contact:
Mike Hill
investor-relations@uplandsoftware.com
512-960-1031

Media Contact:
Kendell Kelton
media@uplandsoftware.com 
678-575-7428




Upland Software, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
 Three Months Ended December 31,Twelve Months Ended December 31,
 2020201920202019
(unaudited)(unaudited)(unaudited)
Revenue:
Subscription and support$74,922 $59,109 $277,504 $203,866 
Perpetual license621 3,531 1,884 5,738 
Total product revenue75,543 62,640 279,388 209,604 
Professional services2,704 3,426 12,390 13,033 
Total revenue78,247 66,066 291,778 222,637 
Cost of revenue:
Subscription and support25,179 18,891 89,880 61,465 
Professional services1,811 2,182 8,566 7,652 
Total cost of revenue26,990 21,073 98,446 69,117 
Gross profit51,257 44,993 193,332 153,520 
Operating expenses:
Sales and marketing11,566 11,490 46,077 35,170 
Research and development9,623 8,501 39,002 29,037 
General and administrative16,877 13,845 68,072 48,077 
Depreciation and amortization9,494 8,455 36,919 25,885 
Acquisition-related expenses2,562 15,213 27,075 39,657 
Total operating expenses50,122 57,504 217,145 177,826 
Income (loss) from operations1,135 (12,511)(23,813)(24,306)
Other expense:
Interest expense, net(7,935)(6,434)(31,529)(22,313)
Loss on debt extinguishment— — — (2,317)
Other income (expense), net708 (1,559)(111)(3,240)
Total other expense (7,227)(7,993)(31,640)(27,870)
Loss before benefit from income taxes(6,092)(20,504)(55,453)(52,176)
Benefit from income taxes423 639 4,234 6,805 
Net loss$(5,669)$(19,865)$(51,219)$(45,371)
Net loss per common share, basic and diluted$(0.19)$(0.80)$(1.92)$(1.96)
Weighted-average common shares outstanding, basic and diluted29,403,603 24,726,132 26,632,116 23,099,549 




Upland Software, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
December 31,
20202019
 (unaudited)
Assets
Current assets:
Cash and cash equivalents$250,029 $175,024 
Accounts receivable, net of allowance44,472 50,938 
Deferred commissions, current5,784 3,059 
Unbilled receivables4,561 5,111 
Prepaid and other12,694 4,748 
Total current assets317,540 238,880 
Tax credits receivable2,427 4,186 
Property and equipment, net2,778 3,917 
Operating lease right-of-use asset10,124 8,056 
Intangible assets, net279,975 282,727 
Goodwill383,598 346,134 
Deferred commissions, noncurrent12,962 8,763 
Other assets1,816 4,165 
Total assets$1,011,220 $896,828 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$5,395 $5,904 
Accrued compensation8,138 11,559 
Accrued expenses and other current liabilities13,438 15,344 
Deferred revenue87,552 76,558 
Due to sellers416 14,276 
Operating lease liabilities, current3,315 2,533 
Current maturities of notes payable3,166 3,193 
Total current liabilities121,420 129,367 
Notes payable, less current maturities518,437 521,881 
Deferred revenue, noncurrent1,587 496 
Operating lease liabilities, noncurrent8,387 5,862 
Noncurrent deferred tax liability, net24,092 25,685 
Interest rate swap liabilities30,032 — 
Other long-term liabilities650 676 
Total liabilities704,605 683,967 
Stockholders’ equity:
Common stock
Additional paid-in capital515,219 345,127 
Accumulated other comprehensive loss(26,234)(1,223)
Accumulated deficit(182,373)(131,046)
Total stockholders’ equity306,615 212,861 
Total liabilities and stockholders’ equity$1,011,220 $896,828 




Upland Software, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
 Three Months Ended December 31,Twelve Months Ended December 31,
 2020201920202019
 (unaudited)(unaudited)(unaudited)
Operating activities
Net loss$(5,669)$(19,865)$(51,219)$(45,371)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization12,073 10,899 47,164 34,621 
Deferred income taxes(4,187)1,744 (7,533)(9,432)
Amortization of deferred costs1,512 921 4,684 3,476 
Foreign currency re-measurement loss(39)(97)272 58 
Non-cash interest and other expense564 419 2,233 1,398 
Non-cash stock compensation expense10,429 7,038 41,692 25,754 
Non-cash loss on divestiture of assets— 1,988 — 1,988 
Non-cash loss on retirement of fixed assets162 — 635 — 
Non-cash loss on debt extinguishment— — — 2,317 
Changes in operating assets and liabilities, net of purchase business combinations:
Accounts receivable(2,785)(3,245)10,355 3,160 
Prepaids and other1,511 (1,252)(8,582)(5,532)
Accounts payable(1,299)830 (3,081)(73)
Accrued expenses and other liabilities964 884 (7,825)(4,153)
Deferred revenue8,232 6,758 6,825 3,865 
Net cash provided by operating activities21,468 7,022 35,620 12,076 
Investing activities
Purchase of property and equipment(281)(317)(1,114)(1,040)
Purchase of customer relationships— (258)(201)(696)
Purchase business combinations, net of cash acquired(4)(110,254)(67,655)(216,025)
Net cash used in investing activities(285)(110,829)(68,970)(217,761)
Financing activities
Payments on finance leases(2)(30)(88)(529)
Proceeds from notes payable, net of issuance costs(134)243,360 (303)625,666 
Payments on notes payable(1,350)(60,350)(5,400)(383,568)
Taxes paid related to net share settlement of equity awards(6,551)(2,139)(12,659)
Issuance of common stock, net of issuance costs365 130,539 151,551 
Additional consideration paid to sellers of businesses(3,058)(10,807)(14,710)(16,693)
Net cash provided by financing activities(4,178)165,624 107,899 363,768 
Effect of exchange rate fluctuations on cash52 (99)456 203 
Change in cash and cash equivalents17,057 61,718 75,005 158,286 
Cash and cash equivalents, beginning of period232,972 113,306 175,024 16,738 
Cash and cash equivalents, end of period$250,029 $175,024 $250,029 $175,024 




Upland Software, Inc.
Reconciliation of Adjusted EBITDA
(in thousands, unaudited)
Three Months Ended December 31,Twelve Months Ended December 31,
2020201920202019
Reconciliation of net loss to Adjusted EBITDA:
Net loss$(5,669)$(19,865)$(51,219)$(45,371)
Add:
Depreciation and amortization expense12,073 10,899 47,164 34,621 
Interest expense, net7,935 6,434 31,529 22,313 
Other expense (income), net(708)1,559 111 3,240 
Loss on debt extinguishment— — — 2,317 
Benefit from income taxes(423)(639)(4,234)(6,805)
Stock-based compensation expense10,429 7,038 41,692 25,754 
Acquisition-related expense2,562 15,213 27,075 39,657 
Purchase accounting deferred revenue discount404 4,336 7,785 6,794 
Adjusted EBITDA$26,603 $24,975 $99,903 $82,520 


Upland Software, Inc.
Reconciliation of Non-GAAP Net Loss and Non-GAAP EPS
(in thousands, except share and per share data, unaudited)
Three Months Ended December 31,Twelve Months Ended December 31,
2020201920202019
Reconciliation of net loss to non-GAAP net income:
Net loss$(5,669)$(19,865)$(51,219)$(45,371)
Add:
Stock-based compensation expense10,429 7,038 41,692 25,754 
Amortization of purchased intangibles11,350 10,342 44,937 32,395 
Amortization of debt discount563 421 2,232 1,400 
Non-cash loss on divestiture of assets— 1,988 — 1,988 
Acquisition-related expense2,562 15,213 27,075 39,657 
Loss on debt extinguishment— — — 2,317 
Purchase accounting deferred revenue discount404 4,336 7,785 6,794 
Tax effect of adjustments above(1,233)(2,409)(5,671)(6,213)
Non-GAAP net income$18,406 $17,064 $66,831 $58,721 
Weighted average ordinary shares outstanding, basic29,403,603 24,726,132 26,632,116 23,099,549 
Weighted average ordinary shares outstanding, diluted30,275,963 25,465,083 27,159,114 23,906,901 
Non-GAAP earnings per share, basic$0.63 $0.69 $2.51 $2.54 
Non-GAAP earnings per share, diluted$0.61 $0.67 $2.46 $2.46 







Upland Software, Inc.
Reconciliation of Operating Cash Flow to Free Cash Flow
(in thousands, unaudited)
Three Months Ended December 31,Twelve Months Ended December 31,
2020201920202019
Reconciliation of Operating Cash Flow to Free Cash Flow:
Net cash provided by operating activities$21,468 $7,022 $35,620 $12,076 
Less: Purchase of Property and Equipment(281)(317)(1,114)(1,040)
Free Cash Flow$21,187 $6,705 $34,506 $11,036 

Upland Software, Inc.
Supplemental Financial Information
(in thousands)
Three Months Ended December 31,Twelve Months Ended December 31,
2020201920202019
(unaudited)(unaudited)(unaudited)
Stock-based compensation:
Cost of revenue$439 $237 $1,951 $1,000 
Research and development752 673 3,391 2,310 
Sales and marketing1,035 531 3,450 1,543 
General and administrative8,203 5,597 32,900 20,901 
Total$10,429 $7,038 $41,692 $25,754 


Three Months Ended December 31,Twelve Months Ended December 31,
2020201920202019
(unaudited)(unaudited)(unaudited)
Depreciation:
Cost of revenue$17 $118 $170 $834 
Operating expense706 439 2,057 1,392 
Total$723 $557 $2,227 $2,226 
Amortization:
Cost of revenue$2,562 $2,325 $10,075 $7,903 
Operating expense8,788 8,017 34,862 24,492 
Total$11,350 $10,342 $44,937 $32,395 


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