Summary
Upland Software reported first quarter fiscal 2026 results with a much smaller revenue base following its 2025 divestitures. Total revenue was $48.7 million for the quarter, down 23.5% from the prior-year quarter. Gross profit was $36.8 million, down 19.4%. Gross margin improved to 75.5%. Operating income swung to $5.0 million from a loss in the prior-year quarter. Net loss narrowed to $1.2 million, and diluted EPS improved to -$0.09. The revenue decline was expected and tied to the divestitures completed in 2025 and to Sunset Assets. The company has been reshaping its portfolio toward higher margin product lines. Gross margin expansion shows the remaining mix is more software-heavy, but the top line is substantially smaller. Operating income turned positive even as revenue fell, helped by lower costs and the absence of prior-year divestiture losses.
Non-GAAP measures show a steadier core. Adjusted EBITDA was $12.7 million, little changed from $13.1 million in the prior-year quarter. Core Organic Growth Rate was 0.25%, and core organic revenue was $44.2 million compared with $44.1 million. That core figure strips out perpetual license revenue, professional services revenue, Sunset Assets, divestitures and Overage Charges. The near-flat core organic revenue suggests the remaining business is not growing much, even as reported revenue falls. Core organic growth is the company's key measure of underlying performance, and at 0.25% it is essentially flat. The reported revenue drop is therefore not a clean read on the ongoing business.
Cash generation weakened. Operating cash flow was $5.6 million for the quarter, down 32.5% from the prior-year quarter. Capital expenditures were $0.1 million, down 80.9%. Deferred revenue was $73.7 million, down 11.1%, and remaining performance obligations were $165.2 million, down 23.2%. Those forward-looking items point to pressure on future revenue recognition. The company ended the quarter with $30.4 million of cash, cash equivalents and restricted cash and $233.7 million of debt outstanding. It holds a $30 million revolving credit facility and says available cash, positive cash flows from operations and that facility should cover anticipated cash needs.
Operationally, Upland describes itself as a leader in AI-powered knowledge and content management software, with more than 1,100 enterprise customers relying on it. No divestitures closed in the quarter, and the company continues to manage Sunset Assets after the 2025 sales. The filing flags goodwill impairment as a critical accounting estimate and warns that a quantitative test could force a write-down if fair value falls below carrying value. Foreign exchange movements also cut cash by $0.2 million. Adjusted EBITDA excludes depreciation and amortization, interest, taxes, stock-based compensation, acquisition and divestiture costs, and impairment charges, so it is not a substitute for GAAP net loss.
The quarter shows a smaller business that is more profitable on a GAAP operating basis and still producing cash. Adjusted EBITDA of $12.7 million was nearly flat, so the GAAP earnings improvement was not matched by EBITDA growth. The company also carries higher net interest expense than a year ago, which weighed on the bottom line. The open question is whether core organic revenue can accelerate from 0.25% while deferred revenue and remaining performance obligations decline. Without a return to core growth, reported revenue faces continued pressure from those lower balances even as margins hold.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $48.7M | $49.3M | -1.3% | $63.7M | -23.5% |
| Gross profit | $36.8M | $37.7M | -2.5% | $45.6M | -19.4% |
| Gross margin | 75.5% | 76.5% | -1.0 pp | 71.7% | +3.8 pp |
| Research & development | $8.0M | $7.3M | +10.0% | $11.5M | -30.3% |
| Sales & marketing | $9.5M | $9.9M | -4.1% | $13.8M | -31.1% |
| General & administrative | $8.5M | $7.4M | +15.4% | $11.6M | -26.5% |
| Total operating expenses | $31.7M | $30.5M | +3.8% | $46.7M | -32.0% |
| Operating income (loss) | $5.0M | $7.2M | -29.6% | -$1.1M | +579.9% |
| Operating margin | 10.4% | 14.5% | -4.2 pp | -1.6% | +12.0 pp |
| Net income (loss) | -$1.2M | $1.1M | -212.3% | -$25.8M | +95.2% |
| Net margin | -2.5% | 2.2% | -4.8 pp | -40.6% | +38.1 pp |
| Diluted EPS | -$0.09 | -$0.01 | -$0.08 | -$0.97 | +$0.88 |
Risks
On April 7, 2026 the company received a Nasdaq notification that its closing bid price had been below the $1.00 per share minimum for 30 consecutive business days, with a cure deadline of October 5, 2026. Failure to regain compliance could result in delisting, reducing liquidity, market price, analyst coverage and access to capital markets.
Total revenue fell 24% to $48.7 million in the three months ended March 31, 2026 from $63.7 million in the prior-year quarter, driven by expected declines from divested product lines and Sunset Assets. Core Organic Growth Rate was only 0.25% for the quarter, indicating limited growth in the remaining business.
Net interest expense rose 83% to $4.5 million in the three months ended March 31, 2026, largely because interest rate derivatives reduced interest expense by $1.2 million versus $3.4 million in the prior-year quarter, while $233.7 million of debt remained outstanding as of March 31, 2026.
The company intends to implement a reverse stock split to regain Nasdaq compliance, as disclosed in its April 20, 2026 proxy statement, but the split requires stockholder approval and there is no assurance it would be approved or would restore sustained compliance with Rule 5450(a)(1).
Deferred revenue declined 11.1% to $73.7 million and remaining performance obligations declined 23.2% to $165.2 million for the current quarter versus the prior-year quarter, signaling reduced forward bookings and deferred revenue visibility.
Goodwill is assessed for impairment at the consolidated entity level as a single reporting unit, comparing estimated fair value to carrying value. A sustained decline in the common stock price and market capitalization increases the likelihood that fair value falls below carrying value, potentially requiring an impairment charge.
SaaS KPIs
All quarters →Adjusted EBITDA
Enterprise Customers
Core Organic Growth Rate
Core organic revenue
Summary, forecast, risks and KPIs are extracted from Upland Software, Inc.'s SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.