Summary
Upland Software reported second quarter 2025 total revenue of $53.4 million, down 23% from the prior-year quarter. The decline was tied mostly to divested product lines. Gross profit was $39.9 million, down 18.2%, and gross margin was 74.8%, up from the prior-year quarter. GAAP operating loss was $7.0 million, and the loss widened from the prior-year quarter. Operating margin was negative 13.2%, down from the prior-year quarter. GAAP net loss was $13.0 million, and the loss widened from the prior-year quarter. Diluted EPS was a loss of $0.51, and the per-share loss widened from the prior-year quarter.
Year-to-date results show the same divestiture-driven pressure. Revenue for the first six months of 2025 was $117.0 million, down 16.4%. Net loss for the first six months was $38.9 million, a narrowed loss from the first six months of 2024. Operating cash flow for the quarter was $3.3 million, down 39.9% from the prior-year quarter, while year-to-date operating cash flow was $11.6 million, up 9.5%. Capital expenditures were $0.6 million for the quarter, up 131.4%, and $1.1 million year to date, up 131.5%. Deferred revenue was $72.3 million, down 23.9% from the prior-year quarter. Remaining performance obligations were $169.4 million, down 33.0%.
Non-GAAP measures showed a more stable core. Adjusted EBITDA was $13.6 million, or 25% of total revenue, compared with $13.6 million, or 20% of total revenue, in the prior-year quarter. Free cash flow was $2.7 million, compared with $5.2 million. Core Organic Growth Rate was 1.2% for the quarter, which management described as a return to positive core organic growth. Upland added 100 new customers, including 12 new major customers, and expanded 263 existing customer relationships, 28 of which were major expansions. The company earned 68 badges in G2's Summer 2025 market reports and was included in the 2025 Gartner Market Guide for Customer Service Knowledge Management Systems. After quarter end, Upland completed a refinancing that extended debt maturity to July 2031, paid down $18 million in principal, and established a new $30 million revolving credit facility. The new facility includes a $240 million term loan.
Guidance points to a smaller third quarter. For the quarter ending September 30, 2025, Upland guided to a revenue decline of 25% at the midpoint from the quarter ended September 30, 2024, with Adjusted EBITDA of $14.5 million to $17.5 million, an increase of 14% at the midpoint. Guided third quarter Adjusted EBITDA margin is 32% at the midpoint, up 1,100 basis points from the 21% margin for the quarter ended September 30, 2024. For the full year ending December 31, 2025, the company guided to a revenue decline of 21% at the midpoint from the year ended December 31, 2024, with Adjusted EBITDA of $55.8 million to $61.8 million, an increase of 6% at the midpoint, and a full year Adjusted EBITDA margin of 27% at the midpoint, up 700 basis points from 20% for the year ended December 31, 2024. The revenue declines are tied to completed divestitures. Risks include continued revenue pressure from those divestitures, variable interest rate risk on the company's debt, foreign currency exchange risk, and execution on AI product delivery and customer retention.
The quarter's profit picture is mixed. Gross margin improved even as revenue fell, which suggests cost of revenue declined faster than sales. The revenue base is smaller after divestitures, and deferred revenue and remaining performance obligations both declined by double-digit percentages, signaling less backlog and fewer committed future dollars. The quarter's GAAP net loss widened while the year-to-date net loss narrowed, a pattern shaped by last year's large goodwill impairment and this year's divestiture-related charges. Operating cash flow declined in the quarter but rose year to date. Capital expenditures increased, though from a small base. Management's guidance calls for lower revenue but higher Adjusted EBITDA margins, which points to continued cost discipline and a mix shift toward higher-margin products.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $53.4M | $63.7M | -16.1% | $69.3M | -23.0% |
| Gross profit | $39.9M | $45.6M | -12.4% | $48.9M | -18.2% |
| Gross margin | 74.8% | 71.7% | +3.2 pp | 70.5% | +4.4 pp |
| Research & development | $9.8M | $11.5M | -15.3% | $12.2M | -19.7% |
| Sales & marketing | $10.8M | $13.8M | -21.7% | $16.8M | -35.9% |
| General & administrative | $10.2M | $11.6M | -12.1% | $13.9M | -26.4% |
| Total operating expenses | $47.0M | $46.7M | +0.7% | $54.2M | -13.4% |
| Operating income (loss) | -$7.0M | -$1.1M | -568.7% | -$5.4M | -31.0% |
| Operating margin | -13.2% | -1.6% | -11.5 pp | -7.8% | -5.4 pp |
| Net income (loss) | -$13.0M | -$25.8M | +49.6% | -$11.4M | -13.9% |
| Net margin | -24.4% | -40.6% | +16.2 pp | -16.5% | -7.9 pp |
| Diluted EPS | -$0.51 | -$0.97 | +$0.46 | -$0.47 | -$0.04 |
Risks
Total revenue decreased 23.0% year over year to $53.4 million in FY2025 Q2, and year-to-date revenue decreased 16.4% to $117.0 million. MD&A attributes the decline primarily to expected declines from divested product lines and Sunset Assets, indicating a shrinking revenue base.
Deferred revenue (current portion) decreased 23.9% year over year to $72.3 million, and remaining performance obligations decreased 33.0% to $169.4 million as of June 30, 2025. These declines may signal reduced forward revenue visibility.
The company recorded $2.5 million of impairment expense in FY2025 Q2 related to certain Sunset intangible assets, following an $87.2 million goodwill impairment in FY2024 year to date. MD&A notes future goodwill impairments could occur if the company experiences significant stock price declines.
Net loss widened to $13.0 million in FY2025 Q2 from $11.4 million in FY2024 Q2, and operating loss widened to $7.0 million from $5.4 million, despite gross margin improving 4.4 pp to 74.8%. This indicates persistent unprofitability at the operating and net levels.
As of June 30, 2025, the company had $258.1 million of borrowings outstanding under Term Loans set to mature August 6, 2026, and cash, cash equivalents and restricted cash decreased $15.4 million from December 31, 2024 to June 30, 2025. On July 25, 2025, it refinanced with a new $240.0 million six-year term loan and a $30.0 million revolver maturing July 2031.
FY2025 Q2 divestiture-related expenses were $6.9 million, including a $5.2 million one-time termination fee, and the six months ended June 30, 2025 included a $23.9 million loss on divestitures of businesses. The strategy to focus on higher margin and higher growth potential product lines may not offset revenue lost from divested products.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Major expansions
New customers
Adjusted EBITDA margin
Total Customers
Core Organic Growth Rate
Core organic revenue
Summary, forecast, risks and KPIs are extracted from Upland Software, Inc.'s SEC filings for Q2 FY2025 (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.