0001505155-21-000050.txt : 20211103 0001505155-21-000050.hdr.sgml : 20211103 20211103160426 ACCESSION NUMBER: 0001505155-21-000050 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20211103 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20211103 DATE AS OF CHANGE: 20211103 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: 211375294 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-20211103.htm 8-K upld-20211103
0001505155false00015051552021-11-032021-11-03

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
November 3, 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 November 3, 2021, Upland Software, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2021. 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
EVP, Chief Legal Officer and Secretary
Date: November 3, 2021


EX-99.1 2 a3q21991earningsrelease.htm EX-99.1 Document

EXHIBIT 99.1
Upland Software Reports Third Quarter 2021 Financial Results
November 3, 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 third quarter of 2021 and revised guidance for its fourth quarter and full year of 2021.

Third Quarter 2021 Financial Highlights

Total revenue was $76.1 million, an increase of 3% from $74.2 million in the third quarter of 2020.
Subscription and support revenue was $72.3 million, an increase of 2% from $71.0 million in the third quarter of 2020.
GAAP net loss was $11.0 million, or a loss of $0.36 cents per share, compared to a GAAP net loss of $11.3 million, or a loss of $0.42 cents per share, in the third quarter of 2020.
Adjusted EBITDA was $25.0 million, or 33% of total revenue, compared to $25.0 million, or 34% of total revenue, in the third quarter of 2020.
GAAP operating cash flow was $5.3 million, compared to GAAP operating cash flow of $18.7 million in the third quarter of 2020. Free cash flow was $4.9 million, compared to free cash flow of $18.5 million in the third quarter of 2020.
Cash on hand as of the end of the third quarter of 2021 was $179.6 million.

“In Q3 we posted strong Adjusted EBITDA and remained on track to achieve our free cash flow generation targets for the year,” said Jack McDonald, Upland’s chairman and chief executive officer. “We did not see in Q3 the uptick in new logo bookings and renewals we had expected,” he added. “We remain determined to improve our sales performance and note that our focus throughout this year on securing multi-year customer renewals and expansions means a higher percentage of our revenue is now contracted through 2022, which supports improved net dollar retention rates next year,” he added. “Finally, we remain active in the market for additional acquisition opportunities.”

Third Quarter Business Highlights

We expanded relationships with 281 existing customers, 45 of which were major expansions. We also welcomed 109 new customers to Upland in the third quarter, including 27 new major customers.
We secured multiple six-figure long-term renewals and expansions with major global Financial Services firms. Within this industry, there is growing interest in our knowledge management product library to help drive and facilitate more effective, compliance-led knowledge sharing due to ever-increasing and evolving global regulations.
We launched Altify Sales Reference Manager, a new reference application built natively on the Salesforce platform. This product helps B2B sellers widen their pools of reference accounts, resulting in enhanced deal velocity and increased win rates, directly from within Salesforce.
And our InGenius product became one of the first Service Cloud Voice for Partner Telephony integrators available on the Salesforce AppExchange, helping customers maintain their existing telecommunications investment and infrastructure while taking advantage of the new Service Cloud Voice environment within Salesforce.









Business Outlook

For the quarter ending December 31, 2021, Upland expects reported total revenue to be between $73.2 and $77.2 million, including subscription and support revenue between $70.2 and $73.8 million, for decline in recurring revenue of 4% at the mid-point over the quarter-ended December 31, 2020. Fourth quarter 2021 Adjusted EBITDA is expected to be between $23.4 and $25.4 million, for an Adjusted EBITDA margin of 32% at the mid-point. This Adjusted EBITDA guide at the mid-point is a decline of 8% from the quarter-ended December 31, 2020. By way of comparison, Q4 2020 had $6.6 million of political messaging revenue, which will not repeat in Q4 of 2021.

For the full year ending December 31, 2021, Upland expects reported total revenue to be between $299.5 and $303.5 million, including subscription and support revenue between $285.5 and $289.1 million, for growth in recurring revenue of 4% at the mid-point over the year ended December 31, 2020. Full year 2021 Adjusted EBITDA is expected to be between $95.0 and $97.0 million, for an Adjusted EBITDA margin of 32% at the mid-point. This Adjusted EBITDA guide at the midpoint is a reduction of 4% over the year ended December 31, 2020. By way of comparison, 2020 had $18.2 million of political messaging revenue, which will not repeat in 2021.

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 1-844-200-6205 in the United States or +1-929-526-1599 if outside the United States. Attendees will need to use access code 303259 to join the call. 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 helps global businesses accelerate digital transformation with a powerful cloud software library that provides choice, flexibility, and value. Our growing library of products delivers the "last mile" plug-in processes, reporting, and job specific workflows that major cloud platforms and homegrown systems don’t provide. We focus on specific business challenges and support every corner of the organization, operating at scale and delivering quick time to value for our 1,700+ enterprise customers. 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.

Upland defines cash gross margin as product revenue less subscription and support cost of sales, excluding depreciation & amortization.

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 September 30,Nine Months Ended September 30,
 2021202020212020
(unaudited)(unaudited)(unaudited)(unaudited)
Revenue:
Subscription and support$72,264 $70,992 $215,322 $202,582 
Perpetual license684 411 1,451 1,263 
Total product revenue72,948 71,403 216,773 203,845 
Professional services3,105 2,781 9,513 9,686 
Total revenue76,053 74,184 226,286 213,531 
Cost of revenue:
Subscription and support22,968 23,562 68,811 64,701 
Professional services and other1,848 2,021 5,444 6,755 
Total cost of revenue24,816 25,583 74,255 71,456 
Gross profit51,237 48,601 152,031 142,075 
Operating expenses:
Sales and marketing14,364 11,760 41,094 34,511 
Research and development10,441 9,967 32,494 29,379 
General and administrative17,725 16,864 61,286 51,195 
Depreciation and amortization10,764 9,117 30,785 27,425 
Acquisition-related expenses3,685 3,574 18,805 24,513 
Total operating expenses56,979 51,282 184,464 167,023 
Income (loss) from operations(5,742)(2,681)(32,433)(24,948)
Other expense:
Interest expense, net(7,971)(8,078)(23,700)(23,594)
Other income (expense), net(650)598 (812)(819)
Total other expense (8,621)(7,480)(24,512)(24,413)
Loss before benefit from (provision for) income taxes(14,363)(10,161)(56,945)(49,361)
Benefit from (provision for) income taxes3,348 (1,149)6,204 3,811 
Net loss$(11,015)$(11,310)$(50,741)$(45,550)
Net loss per common share, basic and diluted$(0.36)$(0.42)$(1.68)$(1.77)
Weighted-average common shares outstanding, basic and diluted30,428,675 27,220,134 30,167,171 25,725,495 




Upland Software, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
September 30,December 31,
20212020
 (unaudited)
Assets
Current assets:
Cash and cash equivalents$179,584 $250,029 
Accounts receivable, net of allowance37,076 44,472 
Deferred commissions, current8,721 5,784 
Unbilled receivables5,847 4,561 
Prepaid and other8,560 12,694 
Total current assets239,788 317,540 
Tax credits receivable3,054 2,427 
Property and equipment, net3,035 2,778 
Operating lease right-of-use asset6,990 10,124 
Intangible assets, net292,807 279,975 
Goodwill460,178 383,598 
Deferred commissions, noncurrent14,168 12,962 
Other assets1,691 1,816 
Total assets$1,021,711 $1,011,220 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$16,181 $5,395 
Accrued compensation11,259 8,138 
Accrued expenses and other current liabilities9,960 13,438 
Deferred revenue90,368 87,552 
Liabilities due to sellers of businesses10,531 416 
Operating lease liabilities, current3,555 3,315 
Current maturities of notes payable3,158 3,166 
Total current liabilities145,012 121,420 
Notes payable, less current maturities515,958 518,437 
Deferred revenue, noncurrent2,075 1,587 
Operating lease liabilities, noncurrent7,650 8,387 
Noncurrent deferred tax liability, net27,484 24,092 
Interest rate swap liabilities15,642 30,032 
Other long-term liabilities844 650 
Total liabilities714,665 704,605 
Stockholders’ equity:
Common stock
Additional paid-in capital558,495 515,219 
Accumulated other comprehensive loss(18,338)(26,234)
Accumulated deficit(233,114)(182,373)
Total stockholders’ equity307,046 306,615 
Total liabilities and stockholders’ equity$1,021,711 $1,011,220 




Upland Software, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)

 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
 (unaudited)(unaudited)(unaudited)(unaudited)
Operating activities
Net loss$(11,015)$(11,310)$(50,741)$(45,550)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization13,751 11,696 39,420 35,091 
Change in fair value of liabilities due to sellers of businesses(774)155 (3,503)155 
Deferred income taxes(4,337)1,639 (7,726)(3,346)
Amortization of deferred costs2,435 1,252 6,283 3,172 
Foreign currency re-measurement loss(186)18 311 
Non-cash interest and other expense567 561 1,682 1,669 
Non-cash stock compensation expense12,047 10,963 43,421 31,263 
Non-cash loss on retirement of fixed assets473 473 
Changes in operating assets and liabilities, net of purchase business combinations:
Accounts receivable1,574 7,952 11,748 13,140 
Prepaids and other(41)(3,350)(3,672)(10,093)
Accounts payable732 4,476 6,647 (1,782)
Accrued expenses and other liabilities(5,687)(1,843)(8,111)(8,944)
Deferred revenue(3,924)(3,822)(6,822)(1,407)
Net cash provided by operating activities5,338 18,656 28,646 14,152 
Investing activities
Purchase of property and equipment(458)(137)(965)(833)
Purchase of customer relationships— — — (201)
Purchase business combinations, net of cash acquired— — (92,417)(67,651)
Net cash used in investing activities(458)(137)(93,382)(68,685)
Financing activities
Payments on finance leases(8)(3)(12)(86)
Proceeds from notes payable, net of issuance costs(7)(27)(120)(169)
Payments on notes payable(1,350)(1,350)(4,050)(4,050)
Taxes paid related to net share settlement of equity awards(373)— (373)(2,140)
Issuance of common stock, net of issuance costs50 130,133 228 130,174 
Additional consideration paid to sellers of businesses(27)(2,072)(769)(11,652)
Net cash provided by (used in) financing activities(1,715)126,681 (5,096)112,077 
Effect of exchange rate fluctuations on cash(120)(138)(613)404 
Change in cash and cash equivalents3,045 145,062 (70,445)57,948 
Cash and cash equivalents, beginning of period176,539 87,910 250,029 175,024 
Cash and cash equivalents, end of period$179,584 $232,972 $179,584 $232,972 




Upland Software, Inc.
Reconciliation of Adjusted EBITDA
(in thousands, unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Reconciliation of net loss to Adjusted EBITDA:
Net loss$(11,015)$(11,310)$(50,741)$(45,550)
Add:
Depreciation and amortization expense13,751 11,696 39,420 35,091 
Interest expense, net7,971 8,078 23,700 23,594 
Other expense (income), net650 (598)812 819 
Benefit from income taxes(3,348)1,149 (6,204)(3,811)
Stock-based compensation expense12,047 10,963 43,421 31,263 
Acquisition-related expense3,685 3,574 18,805 24,513 
Purchase accounting deferred revenue discount1,275 1,408 2,375 7,381 
Adjusted EBITDA$25,016 $24,960 $71,588 $73,300 


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 September 30,Nine Months Ended September 30,
2021202020212020
Reconciliation of net loss to non-GAAP net income:
Net loss$(11,015)$(11,310)$(50,741)$(45,550)
Add:
Stock-based compensation expense12,047 10,963 43,421 31,263 
Amortization of purchased intangibles13,201 11,222 37,946 33,587 
Amortization of debt discount567 561 1,682 1,669 
Acquisition-related expense3,685 3,574 18,805 24,513 
Purchase accounting deferred revenue discount1,275 1,408 2,375 7,381 
Tax effect of adjustments above(1,973)(1,275)(4,648)(4,660)
Non-GAAP net income$17,787 $15,143 $48,840 $48,203 
Weighted average ordinary shares outstanding, basic30,428,675 27,220,134 30,167,171 25,725,495 
Weighted average ordinary shares outstanding, diluted30,951,123 27,751,221 30,817,435 26,149,617 
Non-GAAP earnings per share, basic$0.58 $0.56 $1.62 $1.87 
Non-GAAP earnings per share, diluted$0.57 $0.55 $1.58 $1.84 







Upland Software, Inc.
Reconciliation of Operating Cash Flow to Free Cash Flow
(in thousands, unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Reconciliation of Operating Cash Flow to Free Cash Flow:
Net cash provided by operating activities$5,338 $18,656 $28,646 $14,152 
Less: Purchase of Property and Equipment(458)(137)(965)(833)
Free Cash Flow$4,880 $18,519 $27,681 $13,319 

Upland Software, Inc.
Supplemental Financial Information
(in thousands, unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Stock-based compensation:
Cost of revenue$539 $624 $1,544 $1,512 
Research and development671 1,005 2,327 2,639 
Sales and marketing1,636 968 4,392 2,415 
General and administrative9,201 8,366 35,158 24,697 
Total$12,047 $10,963 $43,421 $31,263 

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Depreciation:
Cost of revenue$$37 $27 $153 
Operating expense545 437 1,447 1,351 
Total$550 $474 $1,474 $1,504 
Amortization:
Cost of revenue$2,982 $2,542 $8,608 $7,513 
Operating expense10,219 8,680 29,338 26,074 
Total$13,201 $11,222 $37,946 $33,587 


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