Upland Software Reports Fourth Quarter and Full Year 2020 Financial Results

first_img 59,109 22,313 26,632,116 ) Facebook 6,825 Stock-based compensation expense $ 7,038 $ $ 2019 896,828 (68,970 ) Total product revenue Amortization of debt discount 439 ) 34,621 $ WhatsApp ) 62,640 Accounts receivable 291,778 $ 34,506 34,862 21,187 Prepaid and other 68,072 5,738 $ 13,033 ) Three Months Ended December 31, 41,692 Professional services ) 3,426 12,390 (45,371 58,721 515,219 51,257 Accounts payable Current liabilities: Cost of revenue: ) 2020 (51,219 2020 Interest rate swap liabilities 439 232,972 — 61,465 1 82,520 Net cash provided by operating activities 250,029 ) 1,035 Gross profit 365 752 12,076 — — 2.54 107,899 (5,669 46,077 1,511 $ $ 404 564 — General and administrative Research and development Operating expense (unaudited) $ 24,726,132 ) $ 10,429 ) ) (110,829 15,213 118 (12,511 Perpetual license ) (317 2019 ) AUSTIN, Texas–(BUSINESS WIRE)–Feb 24, 2021– 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 HighlightsTotal 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 HighlightsTotal 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 HighlightsPosted 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. 1,135 Notes payable, less current maturities 16,738 ) ) ) Operating expenses: Tax credits receivable Interest expense, net 621 ) 61,718 8,788 $ — Loss on debt extinguishment 175,024 Total revenue TAGS  2019 3,391 ) Upland Software, Inc. Condensed Consolidated Balance Sheets (in thousands) 2020 Due to sellers (1,559 $ 175,024 4,336 Unbilled receivables 15,213 Property and equipment, net 3 ) 29,403,603 ) (31,640 (unaudited) ) Loss on debt extinguishment 0.61 75,543 416 (6,434 2019 277,504 Total ) $ Less: Purchase of Property and Equipment $ ) 4,234 (45,371 89,880 $ ) (3,245 Other income (expense), net 3,917 $ Income (loss) from operations $ (5,669 (4,187 1,400 — 2020 14,276 ) Loss on debt extinguishment ) Purchase of customer relationships $ 2,227 10,075 ) $ (1,040 44,937 ) ) (67,655 345,127 $ $ ) Purchase accounting deferred revenue discount 7,785 Revenue: $ (131,046 (317 (unaudited) 250,029 15,213 Twelve Months Ended December 31, ) (4,178 363,768 $ 5,784 2.46 Deferred revenue 24,092 238,880 25,754 (5,532 Upland Software, Inc. Reconciliation of Non-GAAP Net Loss and Non-GAAP EPS (in thousands, except share and per share data, unaudited) 8,387 (3,058 2019 ) 2,427 1,988 (unaudited) 2,325 6,794 3,059 13,438 32,900 Intangible assets, net $ 10,342 1,988 Net loss 346,134 $ ) 10,342 (0.80 48,077 243,360 ) (19,865 1,011,220 78,247 683,967 (52,176 87,552 (26,234 35,620 ) Foreign currency re-measurement loss 5,904 Purchase business combinations, net of cash acquired Acquisition-related expense — 279,388 Operating expense 98,446 69,117 27,075 (529 635 170 2.51 (10,807 4,336 24,975 625,666 3,166 ) — 2020 8,232 9,494 518,437 $ (31,529 (1.96 676 ) 8,501 5,862 Three Months Ended December 31, $ 25,685 ) Reconciliation of net loss to non-GAAP net income: 0.67 ) 650 12,694 ) 704,605 31,529 Net loss 2019 ) (6,805 Weighted average ordinary shares outstanding, diluted — Operating lease liabilities, noncurrent (24,306 (303 ) ) $ $ (unaudited) ) (2,139 30,275,963 25,465,083 Non-cash loss on retirement of fixed assets 212,861 $ 1,988 $ $ (23,813 ) Three Months Ended December 31, 1,398 3,450 Local NewsBusiness 2019 1,011,220 36,919 2020 ) Accumulated other comprehensive loss December 31, $ (5,669 $ — 18,406 Cash and cash equivalents, end of period Total liabilities and stockholders’ equity 66,831 $ Reconciliation of Operating Cash Flow to Free Cash Flow: 1,559 Acquisition-related expense $ 21,073 (4,234 Net cash used in investing activities 47,164 34,621 ) ) ) ) 23,906,901 Operating activities Upland Software, Inc. Supplemental Financial Information (in thousands) $ Amortization of deferred costs 1,512 921 (7,533 $ ) Deferred revenue, noncurrent 29,403,603 (1,114 ) 8,056 $ Non-cash interest and other expense 884 Upland Software, Inc. Reconciliation of Adjusted EBITDA (in thousands, unaudited) 18,891 ) 2019 (1,114 7,038 8,017 25,754 Pinterest — 121,420 (217,761 Non-GAAP net income (134 Benefit from income taxes ) 7,022 27,075 Cash and cash equivalents, beginning of period Total current liabilities 1,816 — Payments on finance leases Loss before benefit from income taxes 12,073 531 ) 10,899 5,597 10,355 Amortization: Prepaids and other 3,193 421 (7,993 $ 25,754 Net cash provided by financing activities ) Sales and marketing 1,000 — 830 $ 217,145 (73 ) $ (51,219 Non-cash loss on divestiture of assets 639 ) 282,727 11,566 Deferred revenue 1,744 Depreciation and amortization ) (5,400 $ (281 $ 24,492 24,726,132 Investing activities Purchase of property and equipment ) (30 2020center_img 2,182 2019 Three Months Ended December 31, (1,040 423 Benefit from income taxes Total assets 11,036 1,543 Payments on notes payable ) $ 39,657 2020 $ 23,099,549 (110,254 $ (6,092 Current maturities of notes payable (216,025 4,165 Interest expense, net (285 10,429 30,032 ) ) Net cash provided by operating activities ) 41,692 8,138 12,073 39,657 ) $ Research and development $ ) ) ) — Non-cash loss on debt extinguishment Upland Software, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share data) 12,962 1,988 — $ 3,476 (1,350 2,562 ) ) 1,587 2019 3,160 Stock-based compensation: (6,213 10,124 2 66,066 ) 15,344 (12,659 (1,252 ) (4 By Digital AIM Web Support – April 6, 2021 2,226 58 2019 17 44,993 (9,432 175,024 39,002 Accrued compensation ) 25,179 (unaudited) Twitter 563 13,845 521,881 (14,710 279,975 $ (99 Common stock 456 ) Change in cash and cash equivalents (201 11,350 $ 158,286 306,615 (97 (696 ) ) (16,693 $ 250,029 Accounts payable $ $ $ $ 29,037 — (unaudited) 5,395 ) $ ) $ 3,240 Operating lease liabilities, current Cost of revenue (5,669 ) 11,490 (19,865 17,064 Liabilities and stockholders’ equity $ (19,865 $ Additional consideration paid to sellers of businesses 4,748 Add: Depreciation and amortization expense 203,866 10,899 (45,371 Stock-based compensation expense 723 7,935 6,434 (2,409 Changes in operating assets and liabilities, net of purchase business combinations: ) (1,233 2020 708 ) 47,164 17,057 Other expense (income), net 3 — ) 2,057 $ Upland Software, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) Total liabilities Acquisition-related expenses Noncurrent deferred tax liability, net ) (51,219 General and administrative 193,332 (unaudited) 75,005 (unaudited) 21,468 Adjusted EBITDA 3,315 130,539 $ (39 (8,582 (unaudited) $ (20,504 6,794 2,317 $ 26,603 $ 151,551 $ Total current assets 383,598 Total cost of revenue $ 6,705 Total stockholders’ equity Deferred commissions, noncurrent 39,657 (1,223 (182,373 Taxes paid related to net share settlement of equity awards $ 7,038 10,429 113,306 896,828 Twelve Months Ended December 31, Current assets: 237 $ Proceeds from notes payable, net of issuance costs ) (45,371 2020 21,468 209,604 26,990 Weighted-average common shares outstanding, basic and diluted Subscription and support 8,566 Amortization of purchased intangibles $ (2,785 Weighted average ordinary shares outstanding, basic 317,540 ) (5,671 ) 2,232 (2 $ 57,504 4,186 $ Twelve Months Ended December 31, Net loss per common share, basic and diluted 76,558 Other long-term liabilities 27,075 ) (22,313 — $ Accrued expenses and other current liabilities 272 Purchase accounting deferred revenue discount 2,562 2,562 Issuance of common stock, net of issuance costs 2,310 3,865 74,922 50,122 6,758 Accounts receivable, net of allowance 2,778 ) 5,111 7,785 25,885 $ 111 Depreciation: 1,884 834 Operating lease right-of-use asset 165,624 2020 4,561 ) 175,024 26,632,116 (19,865 ) 419 3,531 ) Subscription and support (51,219 ) 0.63 ) Twelve Months Ended December 31, 23,099,549 6,805 Assets Twitter ) 2,533 35,170 2,233 (7,935 Pinterest (423 Non-GAAP earnings per share, diluted (2,317 496 25,754 WhatsApp 44,472 41,692 2020 10,429 Accrued expenses and other liabilities 2.46 153,520 (281 Twelve Months Ended December 31, (639 (0.19 35,620 $ Add: $ Adjustments to reconcile net loss to net cash provided by operating activities: Twelve Months Ended December 31, ) Deferred income taxes Non-cash loss on divestiture of assets Non-GAAP earnings per share, basic 7,038 ) Free Cash Flow (60,350 9,623 99,903 (258 $ 404 27,159,114 ) 2019 ) (unaudited) — ) Additional paid-in capital Cash and cash equivalents 129,367 Other expense: (unaudited) Total Cost of revenue 1,951 12,076 Reconciliation of net loss to Adjusted EBITDA: $ (1,299 8,763 20,901 Tax effect of adjustments above 16,877 Three Months Ended December 31, 673 2,317 (6,551 ) 1,392 11,559 (7,227 2020 4,684 8,203 Depreciation and amortization Professional services 44,937 (708 Three Months Ended December 31, (27,870 2,562 50,938 Other assets 1,811 ) Accumulated deficit Net loss 0.69 8,455 $ (7,825 Financing activities Net loss (unaudited) (88 Deferred commissions, current 177,826 $ (3,081 ) ) ) 2020 2019 $ 7,652 706 Sales and marketing (383,568 (55,453 162 View source version on businesswire.com:https://www.businesswire.com/news/home/20210224006027/en/ CONTACT: Investor Relations Contact: Mike Hill [email protected] 512-960-1031 Media Contact: Kendell Kelton [email protected] 678-575-7428 KEYWORD: TEXAS UNITED STATES NORTH AMERICA INDUSTRY KEYWORD: SOFTWARE TECHNOLOGY DATA MANAGEMENT SOURCE: Upland Software Inc. Copyright Business Wire 2021. PUB: 02/24/2021 04:02 PM/DISC: 02/24/2021 04:02 PM http://www.businesswire.com/news/home/20210224006027/en 964 2,317 (1.92 ) 2020 Upland Software Reports Fourth Quarter and Full Year 2020 Financial Results 557 (3,240 Cost of revenue 222,637 Goodwill $ 2,704 203 Total other expense 41,692 7,903 (111 Stockholders’ equity: Total Total operating expenses (4,153 Three Months Ended December 31, $ 11,350 2019 52 2019 Effect of exchange rate fluctuations on cash 32,395 32,395 Twelve Months Ended December 31, — Upland Software, Inc. Reconciliation of Operating Cash Flow to Free Cash Flow (in thousands, unaudited) Facebook 7,022 Non-cash stock compensation expense Previous articleRapinoe-led US beats Argentina 6-0 to win SheBelieves CupNext articlePagerDuty to Report Fourth Quarter and Full Fiscal Year 2021 Results on March 17, 2021 Digital AIM Web Supportlast_img read more