Summary
Upland Software reported second quarter 2024 total revenue of $69.34 million, down 6.9% from $74.50 million in the second quarter of 2023. Gross profit fell 2.9% to $48.86 million, yet gross margin improved to 70.5% from 67.5%. The revenue decline was primarily due to the expected decline in revenue from Sunset Assets, lower overage charges, and a decline in professional services revenue, partly offset by higher perpetual license revenue. Core Organic Growth Rate, a non-GAAP measure, was positive 0.3% for the quarter. Upland serves over 10,000 customers with over 25 cloud software products. Foreign revenue was 29% of total revenue in the six months ended June 30, 2024 and 30% in the same period of 2023.
Profitability improved on a GAAP basis. Operating loss narrowed to $5.37 million from $9.39 million, a 42.8% reduction in the loss. Net loss narrowed to $11.44 million from $15.15 million, or 24.5%. Diluted loss per share was $0.47, compared with $0.51. Operating margin was -7.7%, up from -12.6%. Adjusted EBITDA, a non-GAAP measure, was $13.6 million, or 20% of total revenue, compared with $16.6 million, or 22% of total revenue. Year to date, operating loss narrowed 33.9% to $97.01 million from $146.82 million. Net loss year to date narrowed 30.7% to $107.57 million from $155.19 million. The first quarter of 2024 included a goodwill impairment charge; no such charge hit the second quarter.
Cash generation slowed. Second quarter operating cash flow was $5.47 million, down 22.1% from $7.02 million. Year-to-date operating cash flow was $10.59 million, down 53.6% from $22.85 million. Free cash flow, a non-GAAP measure, was $5.2 million, compared with $6.7 million. Capital expenditures were $0.27 million, down 5.2%. Deferred revenue, current portion, was $95.07 million, down 7.1% from $102.29 million a year earlier. Remaining performance obligations stood at $252.70 million. The company's credit facility includes term loans and a revolver, and management states that current cash and available borrowings will fund operations for at least the next twelve months.
Upland issued guidance for the third quarter and full year 2024. For the third quarter, total revenue is expected between $63.2 and $69.2 million, including subscription and support revenue between $60.1 and $65.1 million, for a decline of 11% at the midpoint from the quarter ended September 30, 2023. Third quarter Adjusted EBITDA is expected between $12.5 and $15.5 million, for an Adjusted EBITDA margin of 21% at the midpoint and a decrease of 13% from the quarter ended September 30, 2023. For the full year, total revenue is expected between $269.6 and $281.6 million, including subscription and support revenue between $254.1 and $264.1 million, for a decline of 7% at the midpoint from the year ended December 31, 2023. Full year Adjusted EBITDA is expected between $52.6 and $58.6 million, for an Adjusted EBITDA margin of 20% at the midpoint and a decline of 14% from the year ended December 31, 2023.
Operationally, Upland expanded relationships with 275 existing customers, including 41 major expansions. It added 155 new customers, including 17 new major customers. The company earned 56 badges in G2's Summer 2024 market reports, up from 44 in the Spring 2024 reports. AI products such as Upland RightAnswers, Upland Panviva, and Upland Qvidian continued to receive recognition. Upland and RamSoft announced the 40 millionth fax transmitted through their integration. The company also said Core Bookings exceeded Core Churn for the second quarter in a row. Risks include the possibility of future goodwill impairments if the stock price declines, macroeconomic pressures such as foreign currency fluctuations, inflation, and supply chain constraints, and the need to retain customers and integrate AI capabilities. The company also faces competition and execution risk on its announced growth investments.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $69.3M | $70.7M | -2.0% | $74.5M | -6.9% |
| Gross profit | $48.9M | $49.7M | -1.7% | $50.3M | -2.9% |
| Gross margin | 70.5% | 70.2% | +0.2 pp | 67.5% | +2.9 pp |
| Research & development | $12.2M | $12.5M | -2.2% | $12.4M | -2.1% |
| Sales & marketing | $16.8M | $17.0M | -1.3% | $15.8M | +6.6% |
| General & administrative | $13.9M | $13.2M | +4.9% | $15.6M | -10.9% |
| Total operating expenses | $54.2M | $141.3M | -61.6% | $59.7M | -9.2% |
| Operating income (loss) | -$5.4M | -$91.6M | +94.1% | -$9.4M | +42.8% |
| Operating margin | -7.8% | -129.6% | +121.8 pp | -12.6% | +4.8 pp |
| Net income (loss) | -$11.4M | -$96.1M | +88.1% | -$15.1M | +24.5% |
| Net margin | -16.5% | -135.9% | +119.4 pp | -20.3% | +3.8 pp |
| Diluted EPS | -$0.47 | -$3.37 | +$2.90 | -$0.51 | +$0.04 |
| Customers | 10,000 | 10,000 | ±0.0% | 10,000 | ±0.0% |
Risks
Total revenue decreased 6.9% in FY2024 Q2 to $69.3 million and 7.6% year to date to $140.1 million, driven primarily by an expected $4.8 million decline in Sunset Assets revenue in the quarter and an $8.7 million decline year to date. Core Organic Growth Rate was only positive 0.3% for the quarter, indicating limited growth in the retained business.
The company recorded an $87.2 million goodwill impairment in the three months ended March 31, 2024 due to declines in its stock price, and MD&A states future impairments could occur if the stock price declines further. This contributed to a year-to-date operating loss of $97.0 million.
Operating cash flow decreased 22.1% in FY2024 Q2 to $5.5 million and 53.6% year to date to $10.6 million, driven by changes in net loss, working capital, and decreases in deferred revenue. The decline reduces internal funding capacity.
As of June 30, 2024, $479.4 million of Term Loans were outstanding and mature August 6, 2026, while the $60.0 million undrawn Revolver matures August 6, 2024. The company states it has no intent or need to draw on the Revolver before maturity, but the near-term maturity and variable interest rate exposure remain constraints.
Deferred revenue, current portion, was $95.1 million at June 30, 2024, down 7.1% versus the prior-year quarter, reflecting lower invoicing or bookings momentum. This metric is an indicator of future revenue and cash receipts.
Sales and marketing expense increased 7% in FY2024 Q2 and 13% year to date, primarily from personnel and marketing investments under the growth plan, even as total revenue declined. If these investments do not reverse the revenue decline, profitability and cash flow may remain under pressure.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Major expansions
New customers
New major customers
Total Customers
Core Organic Growth Rate
Core organic revenue
Existing customers expanded
Summary, forecast, risks and KPIs are extracted from Upland Software, Inc.'s SEC filings for Q2 FY2024 (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.