Summary
Upland Software reported third-quarter fiscal 2021 total revenue of $76.1 million, up 2.5% from $74.2 million in the prior-year quarter. Gross profit was $51.2 million, up 5.4%, and gross margin rose to 67.4% from 65.5%, a gain of 1.9 percentage points. The operating picture weakened. Operating loss was $5.7 million, wider than the $2.7 million loss in the prior-year quarter, and operating margin fell to negative 7.5% from negative 3.6%, down 3.9 percentage points. Net loss narrowed to $11.0 million from $11.3 million, and diluted EPS was negative $0.36, compared with negative $0.42.
Cash generation slowed in the quarter. Operating cash flow was $5.3 million, down 71.4% from $18.7 million in the prior-year quarter. Capital expenditures were $0.46 million, up 234.3% from $0.14 million. Deferred revenue, current portion, was $90.4 million, up 15.1% from $78.5 million a year earlier. On a non-GAAP basis, Adjusted EBITDA was $25.0 million, or 33% of total revenue, compared with $25.0 million, or 34%, in the prior-year quarter. Free cash flow was $4.9 million, compared with $18.5 million.
Through the first nine months of fiscal 2021, total revenue was $226.3 million, up 6.0% from $213.5 million. Gross profit was $152.0 million, up 7.0%, and gross margin was 67.2%, up 0.6 percentage points. Operating loss was $32.4 million, wider than the $24.9 million loss in the prior-year period, and operating margin was negative 14.3%, down 2.6 percentage points. Net loss widened to $50.7 million from $45.6 million, while diluted EPS was negative $1.68, compared with negative $1.77. Operating cash flow year to date was $28.6 million, up 102.4% from $14.2 million, and capital expenditures were $0.97 million, up 15.8% from $0.83 million.
Operationally, Upland expanded relationships with 281 existing customers, including 45 major expansions. It added 109 new customers, including 27 new major customers. The company secured multiple six-figure long-term renewals and expansions with major global Financial Services firms. It launched Altify Sales Reference Manager and made InGenius one of the first Service Cloud Voice for Partner Telephony integrators on the Salesforce AppExchange. Management said the quarter did not show the uptick in new logo bookings and renewals it had expected. Management also said its focus on multi-year renewals and expansions means a higher percentage of revenue is contracted through 2022. The company said it remains active in the market for additional acquisition opportunities.
Guidance points to pressure. For the fourth quarter of fiscal 2021, Upland guided to a decline in recurring revenue of 4% at the midpoint over the quarter ended December 31, 2020, with subscription and support revenue making up the bulk of the quarter. Fourth-quarter Adjusted EBITDA is guided to $23.4 million to $25.4 million, a 32% margin at the midpoint, down 8% from the quarter ended December 31, 2020. The company noted that the fourth quarter of 2020 included political messaging revenue that will not repeat. For the full year ending December 31, 2021, the company guided to recurring revenue growth of 4% at the midpoint over the year ended December 31, 2020, and full-year Adjusted EBITDA of $95.0 million to $97.0 million, a 32% margin at the midpoint, a reduction of 4% over the year ended December 31, 2020. Management noted that 2020 included political messaging revenue that will not repeat in 2021. Risks include uncertainty around COVID-19 effects on bookings and churn, integration of acquisitions, compliance with credit facility covenants, foreign currency swings, and tax rate changes.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2021 | Q2 FY2021 | QoQ | Q3 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $76.1M | $76.3M | -0.3% | $74.2M | +2.5% |
| Gross profit | $51.2M | $51.3M | -0.0% | $48.6M | +5.4% |
| Gross margin | 67.4% | 67.2% | +0.2 pp | 65.5% | +1.9 pp |
| Research & development | $10.4M | $11.1M | -6.0% | $10.4M | +0.4% |
| Sales & marketing | $14.4M | $14.3M | +0.5% | $11.8M | +22.1% |
| General & administrative | $17.7M | $19.2M | -7.6% | $16.9M | +5.1% |
| Total operating expenses | $57.0M | $60.4M | -5.7% | $51.3M | +11.1% |
| Operating income (loss) | -$5.7M | -$9.2M | +37.3% | -$2.7M | -114.2% |
| Operating margin | -7.5% | -12.0% | +4.5 pp | -3.6% | -3.9 pp |
| Net income (loss) | -$11.0M | -$19.0M | +42.2% | -$11.3M | +2.6% |
| Net margin | -14.5% | -25.0% | +10.5 pp | -15.3% | +0.8 pp |
| Diluted EPS | -$0.36 | -$0.63 | +$0.27 | — | — |
| Customers | 10,000 | 10,000 | ±0.0% | 10,000 | ±0.0% |
Risks
The three and nine months ended September 30, 2020 included $6.0 million and $11.6 million of CXM usage revenue from US election-year presidential campaigns that did not repeat in 2021 and will not repeat for the remainder of 2021. As a result, total revenue for the Organic Business decreased by $6.0 million in the third quarter and by $6.4 million in the first nine months of 2021.
Operating loss widened to $5.7 million in the third quarter of 2021 from $2.7 million in the prior-year quarter, and widened to $32.4 million for the first nine months of 2021 from $24.9 million in the prior-year period. Net loss widened to $50.7 million for the first nine months of 2021 from $45.6 million in the prior-year period.
COVID-19 has impacted new bookings and churn, and the company cannot predict the extent to which the pandemic will continue to affect its business or operating results. The effect may not be fully reflected until future periods because the platform is subscription-based.
Upland has completed twenty-nine acquisitions from February 2012 through September 30, 2021, including Second Street, BlueVenn, and Panviva in 2021. Acquisition-related expenses will vary quarter to quarter, and the company paid $97.7 million in cash for three 2021 acquisitions, net of $1.2 million cash acquired.
Cash and cash equivalents decreased $70.4 million from December 31, 2020 to September 30, 2021, and working capital surplus declined to $94.8 million from $196.1 million. As of September 30, 2021, Upland had $529.2 million of borrowings outstanding under its credit facility and only $60.0 million of available borrowings.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Major expansions
New customers
Adjusted EBITDA margin
New major customers
Total Customers
Enterprise Customers
Existing customers expanded
Users
Summary, forecast, risks and KPIs are extracted from Upland Software, Inc.'s SEC filings for Q3 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.