Summary
Upland Software reported second quarter 2021 total revenue of $76.3 million, up 7% from $71.3 million in the second quarter of 2020. Gross profit was $51.3 million, up 7.6% from $47.6 million, and gross margin rose to 67.2% from 66.8%, a gain of 0.4 percentage points. The picture below the gross line was weaker. Operating loss was $9.2 million, compared with $6.9 million in the prior-year quarter, so the loss widened 32.0%. Operating margin slipped to -12.0% from -9.7%, down 2.3 percentage points. Net loss was $19.0 million, or a loss of $0.63 per diluted share, and that loss widened from a year earlier.
The cash side of the business was the standout. Operating cash flow was $10.8 million for the quarter, compared with $0.8 million in the second quarter of 2020. Free cash flow, which the company defines as operating cash flow less purchases of property and equipment, was $10.6 million, compared with $0.4 million. Capital expenditures were $0.2 million, down 43.8% from $0.4 million. Adjusted EBITDA was $23.7 million, or 31% of total revenue, compared with $23.7 million, or 33% of total revenue, in the prior-year quarter. Current deferred revenue was $95.2 million, up 17.5% from $81.0 million a year ago, which points to billings collected ahead of recognition.
Customer activity held up. Upland expanded relationships with 311 existing customers, 51 of which were major expansions, and welcomed 133 new customers, including 32 new major customers. It closed the Panviva acquisition, which adds knowledge management tools for regulated industries such as utilities, healthcare and financial services, and named Dan Doman as chief product officer with a mandate to sharpen product strategy and research and development. Management says the acquisition pipeline remains robust and the company is active in the market for more deals.
Guidance covers the third quarter and the full year. For the quarter ending September 30, 2021, Upland expects recurring revenue growth of 4% at the midpoint over the quarter ended September 30, 2020, and third quarter Adjusted EBITDA between $23.9 million and $25.9 million, for an Adjusted EBITDA margin of 32% at the midpoint. For the full year ending December 31, 2021, recurring revenue growth is expected to be 5% at the midpoint over the year ended December 31, 2020. Full year 2021 Adjusted EBITDA is guided to $94.8 million to $100.8 million, a margin of 32% at the midpoint. That is a reduction of 2% over the year ended December 31, 2020 and reflects incremental investment in go-to-market activities.
The quarter carried real mix pressure. The second quarter of 2020 included $3.6 million of CXM usage revenue from US election-year presidential campaigns, and none of that repeated this period or will repeat for the rest of 2021. Acquisitions not fully in the comparative period contributed $7.2 million to the increase in total revenue after a $0.6 million purchase accounting deferred revenue discount, while total revenue for the organic business decreased by $1.8 million. Acquisition-related expense was $5.5 million, down 4%, and management cautions that these costs will swing with the size, timing and complexity of future deals. COVID-19 continues to affect new bookings and churn, and the company says the extent of that impact is uncertain. Upland has completed twenty-nine acquisitions from February 2012 through June 30, 2021, so integration work and its costs remain a fixture of the model.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2021 | Q1 FY2021 | QoQ | Q2 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $76.3M | $74.0M | +3.1% | $71.3M | +6.9% |
| Gross profit | $51.3M | $49.5M | +3.5% | $47.6M | +7.6% |
| Gross margin | 67.2% | 67.0% | +0.2 pp | 66.8% | +0.4 pp |
| Research & development | $11.1M | $10.9M | +1.6% | $10.5M | +6.0% |
| Sales & marketing | $14.3M | $12.4M | +15.0% | $11.8M | +21.0% |
| General & administrative | $19.2M | $24.4M | -21.2% | $17.7M | +8.7% |
| Total operating expenses | $60.4M | $67.1M | -9.9% | $54.6M | +10.7% |
| Operating income (loss) | -$9.2M | -$17.5M | +47.7% | -$6.9M | -32.0% |
| Operating margin | -12.0% | -23.7% | +11.7 pp | -9.7% | -2.3 pp |
| Net income (loss) | -$19.0M | -$20.7M | +7.9% | -$14.2M | -34.5% |
| Net margin | -25.0% | -28.0% | +3.0 pp | -19.9% | -5.1 pp |
| Diluted EPS | -$0.63 | — | — | — | — |
| Customers | 10,000 | 10,000 | ±0.0% | 9,000 | +11.1% |
Risks
Operating loss widened to $9.16 million in FY2021 Q2 from $6.94 million in FY2020 Q2, and net loss widened to $19.04 million from $14.16 million; operating margin declined to -12.0% from -9.7%. For FY2021 year to date, operating loss widened to $26.69 million from $22.27 million and net loss widened to $39.73 million from $34.24 million.
The three months ended June 30, 2020 included $3.6 million of CXM usage revenue from US election-year presidential campaigns; MD&A states this did not repeat in the current period and will not repeat for the remainder of 2021. The six months ended June 30, 2020 included $5.7 million of such revenue.
For the three months ended June 30, 2021, total revenue increased 6.9% to $76.3 million, but acquisitions not fully in the comparative period contributed $7.2 million while Organic Business total revenue decreased by $1.8 million. For the six months ended June 30, 2021, total revenue increased 7.8% to $150.2 million while Organic Business total revenue decreased by $0.9 million.
MD&A states the company has seen an impact to new bookings and churn attributable to COVID-19 and that continued impact is uncertain; professional services revenue for the six months ended June 30, 2021 decreased 7% to $6.4 million, with Organic Business professional services decreasing $1.5 million due primarily to COVID-19 related travel impacts.
Acquisition-related expense for the three months ended June 30, 2021 includes a $2.7 million gain from a decrease in fair value of earnout liabilities for BlueVenn and Second Street, partially offset by a $1.9 million loss on sublease from changed subtenant assumptions. The company has made twenty-nine acquisitions from February 2012 through June 30, 2021, and acquisition-related expenses will vary quarter to quarter.
As of June 30, 2021, $530.6 million of borrowings were outstanding under the credit facility and the interest rate swap had a fair value of a $17.8 million liability. The credit facility contains restrictive covenants limiting asset transfers, mergers, acquisitions, dividends, additional indebtedness, liens, and changes in management.
General and administrative expense for the six months ended June 30, 2021 increased 27% to $43.6 million, driven primarily by increased non-cash stock compensation expense, including a one-time increase related to the departure of the former co-President and Chief Operating Officer.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Major expansions
New customers
Adjusted EBITDA margin
New major customers
Total Customers
Enterprise Customers
Users
Existing customer expansions
Summary, forecast, risks and KPIs are extracted from Upland Software, Inc.'s SEC filings for Q2 FY2021 (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.