Summary
Upland Software reported second quarter 2026 total revenue of $49.14 million, down 7.9% from $53.38 million in the second quarter of 2025. The decline came mostly from divestitures completed in 2025, which the MD&A says reduced revenue by $3.8 million, and Sunset Assets, which cut $0.5 million. Gross profit was $37.47 million for the quarter, down 6.2% from $39.95 million a year earlier. Gross margin improved to 76.3% from 74.8%, so the remaining business is more profitable even as the top line shrinks.
Profitability below the gross line deteriorated sharply. Operating loss was $29.69 million for the quarter, and the loss widened by 322.1% from the prior-year quarter. Operating margin was negative 60.4%, down 47.2 percentage points from negative 13.2%. Net loss was $35.32 million, and the quarter's loss widened by 171.1% from the prior-year quarter. Diluted EPS was negative $12.53, compared with negative $5.08 in the second quarter of 2025. The press release attributes the larger net loss primarily to a non-cash goodwill impairment recorded in June 2026.
Year-to-date results tell a different story on the bottom line. Net loss for the first six months of 2026 was $36.55 million, compared with $38.88 million in the first six months of 2025, a 6.0% narrowing. Diluted EPS year to date was negative $13.52, compared with negative $14.72, an 8.2% narrowing. Revenue year to date was $97.83 million, down 16.4% from $117.04 million. Operating cash flow for the quarter was $5.37 million, up 63.3% from $3.29 million. Free cash flow was $5.3 million, compared with $2.7 million. Non-GAAP net income was $6.6 million, up 18% from $5.6 million. Adjusted EBITDA was $12.8 million, or 26% of total revenue, compared to $13.6 million, or 25% of total revenue, in the prior-year quarter. Capital expenditures were $87,000, down 86.3% from $634,000. Deferred revenue, current portion, was $66.10 million, down 8.6% from $72.31 million. Remaining performance obligations were $169.80 million, flat versus $169.40 million, up 0.2%.
Operationally, Upland added 81 new customers in the quarter, including 7 new major customers. It also expanded relationships with 200 existing customers, 19 of which were major expansions. Core Organic Growth Rate was negative 0.39% for the three months ended June 30, 2026. The company was recognized in Forrester's The Knowledge Management Solutions Landscape, Q2 2026, and earned 43 badges in G2's Summer 2026 market reports, with Panviva earning 12 badges.
Guidance points to continued pressure. For the third quarter ending September 30, 2026, Upland expects total revenue to decline 7% at the midpoint from the quarter ended September 30, 2025, primarily because of divestitures completed in 2025. Third quarter Adjusted EBITDA is expected between $11.9 million and $13.4 million, a decline of 21% at the midpoint, and Adjusted EBITDA margin is expected to be 27% at the midpoint compared with 32% for the quarter ended September 30, 2025. For the full year ending December 31, 2026, the company expects a total revenue decline of 11% at the midpoint from the year ended December 31, 2025. Full year Adjusted EBITDA is expected between $49.8 million and $52.8 million, a decline of 12% at the midpoint, and margin is expected to be 27% at the midpoint compared with 27% for the year ended December 31, 2025.
Risks remain concentrated in the revenue base and the balance sheet. The company continues to lap divestitures completed in 2025, and Sunset Assets are still a drag. Management has said it wants to sharpen operating groups around the clearest AI opportunities and deleverage the balance sheet. Goodwill impairment could occur again if the stock price declines or other indicators emerge. The quarter's cash generation and non-GAAP profitability provide some cushion, but the core organic growth rate near zero shows that the turnaround is still early.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $49.1M | $48.7M | +0.9% | $53.4M | -7.9% |
| Gross profit | $37.5M | $36.8M | +1.9% | $39.9M | -6.2% |
| Gross margin | 76.3% | 75.5% | +0.8 pp | 74.8% | +1.4 pp |
| Research & development | $7.8M | $8.0M | -3.5% | $9.8M | -20.6% |
| Sales & marketing | $9.5M | $9.5M | +0.4% | $10.8M | -11.7% |
| General & administrative | $9.1M | $8.5M | +6.2% | $10.2M | -11.3% |
| Total operating expenses | $67.2M | $31.7M | +111.8% | $47.0M | +43.0% |
| Operating income (loss) | -$29.7M | $5.0M | -688.1% | -$7.0M | -322.1% |
| Operating margin | -60.4% | 10.4% | -70.8 pp | -13.2% | -47.3 pp |
| Net income (loss) | -$35.3M | -$1.2M | -2771.4% | -$13.0M | -171.1% |
| Net margin | -71.9% | -2.5% | -69.3 pp | -24.4% | -47.5 pp |
| Diluted EPS | -$12.53 | -$0.09 | -$12.44 | -$0.51 | -$12.02 |
Risks
On July 31, 2026 the company received a Nasdaq notification that it no longer meets the $15 million minimum market value of publicly held shares requirement under Rule 5450(b)(2&3)(C), after having regained compliance with the $1.00 minimum bid price rule on July 8, 2026 following a 1-for-10 reverse stock split. It has until January 27, 2027 to regain compliance, and failure could result in delisting, reduced liquidity, reduced analyst coverage and impaired access to capital markets or strategic transactions.
A decline in the company's stock price and other impairment indicators in the three months ended June 30, 2026 drove a $35.2 million goodwill impairment charge, which pushed the quarterly operating loss to $29.7 million from a $7.0 million loss in the prior-year quarter. Management states that further goodwill impairments could occur if the company experiences significant stock price declines or other indicators of impairment.
Total revenue fell 8% to $49.1 million in the quarter and 16% to $97.8 million year to date, driven largely by $3.8 million of expected quarterly declines from divested product lines and $0.5 million from Sunset Assets. Core Organic Growth Rate was negative 0.39% for the three months ended June 30, 2026, and deferred revenue (current portion) declined 8.6% year over year to $66.1 million, indicating limited new subscription momentum in the retained business.
Remaining performance obligations were essentially flat year over year at $169.8 million (up 0.2%), showing little forward bookings growth even as recognized revenue declines, and subscription and support revenue fell 9% in the quarter and 17% year to date.
The company had $229.6 million of debt outstanding as of June 30, 2026, and net interest expense rose 37% to $9.0 million for the six months ended June 30, 2026, partly because interest rate derivatives reduced net interest expense by $2.4 million in 2026 versus $4.9 million in the prior-year period.
Profitability depends on ongoing cost reductions, including a $2.0 million quarterly and $5.5 million year-to-date decrease in research and development expense tied to terminating an outsourced R&D contract and shifting work to the India Center of Excellence, alongside lower headcount across sales, marketing and G&A. Failure to sustain these savings while stabilizing revenue would pressure results.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Major expansions
New customers
Adjusted EBITDA margin
Core Organic Growth Rate
Core organic revenue
Existing customer expansions
Summary, forecast, risks and KPIs are extracted from Upland Software, Inc.'s SEC filings for Q2 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.