Summary
Upland Software finished fiscal 2025 with a much smaller top line and a cleaner cost structure. Fourth quarter revenue was $49.31 million, down 27.5% from $68.03 million in the prior-year quarter. Full year revenue came in at $216.88 million, a decline of 21.1% from $274.79 million. The 10-K credits the drop mainly to divested product lines and to Sunset Assets, the non-strategic products the company pulled from the market, while core product lines contributed a small increase in subscription and support revenue. Perpetual license and professional services revenue also shrank. The divestitures closed during 2025 removed both revenue and expense, so the reported decline overstates the change in the business that remains.
Margins and operating profit moved the other way. Fourth quarter gross margin was 76.5%, up 5.7 percentage points from 70.8%, and the full year landed at 74.8% against 70.5%. Operating income for the quarter was $7.17 million, a swing from a $1.97 million operating loss a year earlier, and operating margin reached 14.5% from negative 2.9%. For the full year, operating income was $4.43 million against a $102.30 million operating loss in 2024. Lower amortization of acquired intangibles, headcount reductions, and the termination of a legacy outsourced research and development contract all fed the improvement. Acquisition and divestiture related expenses of $9.7 million for the year, including a $5.5 million one-time termination fee tied to that vendor contract, sat inside the expense base.
Below the operating line, the picture is noisier. Fourth quarter net income was $1.10 million, compared with a $3.43 million net loss in the prior-year quarter. The full year produced a net loss of $38.90 million, narrower than the $112.73 million loss in 2024, and diluted loss per share narrowed to $1.56 from $4.26. Three items dominate the gap between operating profit and the bottom line. A $24.4 million loss on divestitures of businesses, a $2.3 million non-cash loss on debt extinguishment tied to the July refinancing, and net interest expense of $15.8 million, up 77% from $8.9 million as the benefit from interest rate derivatives shrank. Impairment charges fell to $2.5 million from $87.2 million a year earlier.
Cash generation held up. Full year operating cash flow was $25.80 million, up 6.4% from $24.24 million, though fourth quarter operating cash flow fell 21.7% to $7.32 million from $9.34 million. Capital expenditures were $1.35 million for the year, up 53.3% from $0.88 million, and fourth quarter capital expenditures dropped 72.8% to $0.09 million. Cash, cash equivalents and restricted cash ended the year at $30.02 million, down from $57.05 million, after $55.2 million of debt repayment and $7.1 million of refinancing fees. Total liquidity was $60.02 million and included an undrawn $30.0 million revolving facility. Working capital was in deficit by $18.5 million against $2.0 million a year earlier.
Backlog and recurring revenue tell the harder story. Year-end annualized recurring revenue value was $165.9 million, down from $225.6 million. Annual net dollar retention rate was 96%, unchanged from 96%. Deferred revenue of $74.77 million was down 20.2% from $93.71 million, and remaining performance obligations of $165.60 million were down 31.2% from $240.70 million. Core organic growth rate for the fourth quarter was negative 0.1%, with core organic revenue of $44.36 million essentially level with $44.41 million. Adjusted EBITDA was $58.0 million for the year against $55.6 million. The main things to watch are a $240.0 million six-year term loan and $30.0 million revolver from the July 2025 credit agreement, a 9.7% floating rate at year end, $405.1 million of contractual obligations, a goodwill impairment test performed each October, and $10.0 million of cash held by foreign subsidiaries.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $49.3M | $50.5M | -2.4% | $68.0M | -27.5% |
| Gross profit | $37.7M | $38.8M | -2.9% | $48.2M | -21.7% |
| Gross margin | 76.5% | 76.9% | -0.4 pp | 70.8% | +5.7 pp |
| Research & development | $7.3M | $7.9M | -7.1% | $11.3M | -35.2% |
| Sales & marketing | $9.9M | $9.7M | +1.8% | $16.2M | -38.9% |
| General & administrative | $7.4M | $8.8M | -15.8% | $11.3M | -34.5% |
| Total operating expenses | $30.5M | $33.5M | -8.8% | $50.1M | -39.1% |
| Operating income (loss) | $7.2M | $5.3M | +34.1% | -$2.0M | +463.5% |
| Operating margin | 14.5% | 10.6% | +4.0 pp | -2.9% | +17.4 pp |
| Net income (loss) | $1.1M | -$1.1M | +197.6% | -$3.4M | +131.9% |
| Net margin | 2.2% | -2.2% | +4.4 pp | -5.0% | +7.3 pp |
| Diluted EPS | -$0.01 | -$0.09 | +$0.08 | -$0.17 | +$0.16 |
| Net retention rate | 96.0% | — | — | 96.0% | ±0.0 pp |
Risks
Total revenue was down 21.1% year to date and down 27.5% in FY2025 Q4, with MD&A attributing the decline largely to divested product lines and Sunset Assets; Core Organic Growth Rate was negative 0.1% for the three months ended December 31, 2025.
At Dec 31, 2025, total outstanding indebtedness under the Credit Facility was $238.5 million; $118.5 million of outstanding debt was not subject to interest rate instruments, interest expense, net increased 77% year over year, and Credit Facility covenants restrict business and financing activities.
Common stock closed below $1.00 per share on February 12, 2026; if it remains below $1.00 for 30 consecutive trading days, the company expects a Nasdaq deficiency notice and may pursue a reverse stock split to regain compliance.
Series A Preferred Stock ranks senior to common stock, pays dividends at 4.5% until the seven-year anniversary and 7% thereafter, and has governance rights; payment-in-kind dividends or conversion could further dilute common holders.
A stock price decline at Dec 31, 2025 triggered a quantitative goodwill impairment evaluation, which found no impairment at that date; prior declines led to $87.2 million goodwill impairment in 2024 and $128.8 million in 2023, and $2.5 million intangible impairment in Q2 2025.
ARR was $165.9 million as of Dec 31, 2025 compared with $225.6 million as of Dec 31, 2024; annual net dollar retention rate was 96% at Dec 31, 2025 and 96% at Dec 31, 2024, and MD&A says growth depends on renewals, upgrades, and cross-sells exceeding downgrades and non-renewals.
As of Dec 31, 2025, net operating loss carryforwards were approximately $216.7 million, but ownership-change limitations are expected to cause $153.9 million of federal net operating losses and $4.2 million of research and development credits to expire before utilization.
Risk factors emphasize that failure to timely and accurately implement AI in product offerings could materially harm competitive position; new laws such as the EU AI Act may impose compliance costs and penalties.
The company previously identified a material weakness in 2024 related to a management review control over prospective financial information used in the goodwill impairment assessment; failure to maintain effective internal controls could lead to misstated financials or Nasdaq listing issues.
MD&A reports a $24.4 million loss on divestitures of businesses in 2025 and $9.7 million of acquisition and divestiture related expenses; the company continues to assess sunsetting or divesting underperforming assets, which may reduce revenue and earnings.
SaaS KPIs
All quarters →Adjusted EBITDA
Enterprise Customers
Core Organic Growth Rate
Core organic revenue
Annual Net Dollar Retention Rate
Summary, forecast, risks and KPIs are extracted from Upland Software, Inc.'s SEC filings for Q4 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.