Upland Software Reports Record Third Quarter 2017 Financial Results with 36% Revenue Growth and Raises Full Year 2017 Guidance
Company achieves greater than $100 million annualized revenue run rate for the first time.
Upland Software, Inc. (Nasdaq: UPLD) today announced financial and operating results for the third quarter of 2017 and provided increased guidance for its fourth quarter and full year of 2017.
Third Quarter 2017 Financial Highlights
- Total revenue was $26.1 million, an increase of 36% from $19.2 million in the third quarter of 2016.
- Subscription and support revenue was $23.2 million, an increase of 36% from $17.0 million in the third quarter of 2016.
- GAAP net loss was $3.5 million compared to a net loss of $2.4 million in the third quarter of 2016, principally as a result of one-time expenses related to the accretive acquisition of Waterfall in the current quarter that were not present in the third quarter of 2016 and a $0.7 million non-cash charge for the write-down of an unnecessary office lease from a recent acquisition.
- Adjusted EBITDA was $8.3 million, an increase of 133% from $3.6 million in the third quarter of 2016. A reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP measure, is provided in the financial tables that accompany this release.
- Cash on hand as of the end of the third quarter was $53.0 million.
“Q3 was another outstanding quarter with record 36% revenue growth, record Adjusted EBITDA, and the strategic and accretive acquisition of Waterfall,” said Jack McDonald, chairman and chief executive officer of Upland Software. “We have now met or beat guidance in each of the 13 consecutive quarters since going public,” he added. “Moreover, we are raising our guidance resulting in Q4 revenue growth of 35% and Adjusted EBITDA margins of 35% at the midpoints, continuing our strong momentum. Our pipeline of accretive acquisitions remains robust, and we have the operating and financial resources to execute.”
Third Quarter Business Highlights
- Expanded 173 existing customer relationships, including 23 major expansions, and added 94 new customer relationships, including 14 major accounts.
- Delivered the first major release of our Upland RightAnswers Enterprise Knowledge Management solution to improve overall agent and self-service experience; improved the product foundation; and implemented the first phase of Upland’s consistent, intuitive UI/UX.
- Delivered a new cloud cost and usage management module, integrated with Amazon Web Services, for our ComSci ITFM offering.
- Released seven customer-driven feature packs and product foundation enhancements that included updates to the mobile app in our web content management platform; multipart-SMS reporting improvements, new legislator and geocoding data, and performance improvements in our Upland Mobile Messaging platform; and performance and security enhancements for our Workflow Automation product family.
- Continued to transition from a colocation data center strategy to Amazon Web Services to create a scalable, standard cloud environment in anticipation of ongoing customer growth.
Business Outlook
Upland provides quarterly and annual revenue guidance, updated, as appropriate, at each quarterly reporting period. For the fourth quarter of 2017, Upland expects reported total revenue to be between $25.6 and $26.6 million, including subscription and support revenue between $23.0 and $23.8 million, for growth in recurring revenue of 37% at the mid-point over the fourth quarter ended December 31, 2016. Adjusted EBITDA is expected to be between $8.8 and $9.4 million, for an Adjusted EBITDA margin of 35% at the mid-point, representing growth of 114% at the mid-point over the quarter-ended December 31, 2016.
Upland raises its 2017 annual revenue guidance range and expects a total reported revenue to be between $95.8 and $96.8 million, including subscription and support revenue between $83.7 and $84.5 million, for growth in recurring revenue of 28% at the mid-point over the year ended December 31, 2016. Adjusted EBITDA is expected to be between $29.4 and $30.0 million, for an Adjusted EBITDA margin of 31% at the mid-point, representing growth of 135% at the mid-point over the year ended December 31, 2016.