TLDR
- Q1 revenue beat estimates at $63.66 million but declined 10% year-on-year.
- EPS of $0.23 topped forecasts by 32.7%.
- Shares surged over 20% after the report.
- Full-year revenue guidance cut by 10.3% to $218.5 million.
- Next earnings date is May 12, 2025.
Upland Software, Inc. (NASDAQ: UPLD) stock surged by over 20% in early trading after reporting Q1 2025 results that beat Wall Street expectations.
The business automation software provider, with a market cap of $67.5 million, outperformed on revenue and profit despite lowering its full-year outlook.
Q1 Results Top Estimates
In the first quarter, Upland reported revenue of $63.66 million, surpassing analyst expectations of $61.74 million despite a 10% year-on-year decline. Subscription and support revenue came in at $60.2 million, down 10% from a year ago. Non-GAAP EPS reached $0.23, exceeding forecasts by 32.7%. Adjusted EBITDA totaled $13.08 million with a margin of 20.6%, slightly above consensus.
$UPLD Upland Software Reports First Quarter 2025 Financial Resultshttps://t.co/OcL9t9D9we
— Lycanbull (@Lycanbull) May 12, 2025
The company’s GAAP net loss narrowed to $25.8 million from $96.1 million in the same period last year. GAAP net loss per share improved to $0.97 from $3.37. Free cash flow rose to $7.9 million, up from $4.9 million a year ago, and operating cash flow reached $8.3 million.
Lowered Guidance Weighs on Outlook
Despite the earnings beat, Upland reduced its revenue guidance for the full year. The midpoint of its forecast now stands at $218.5 million, down 10.3% from prior estimates, due to the sale of its mobile messaging business and weak demand trends. Revenue for the next quarter is expected between $50.3 million and $56.3 million, signaling a 23% decline at the midpoint.
However, the company raised its EBITDA outlook, expecting full-year adjusted EBITDA of $59.5 million at the midpoint, up from analysts’ projections. Upland also expects second-quarter adjusted EBITDA margin to improve significantly to 26%, compared to 20% a year earlier.
Customer Growth and AI Expansion
Upland added 107 new customers in the quarter, including 19 major accounts, and expanded deals with 245 existing clients. It highlighted strong wins across its AI-enabled product lines, such as Upland Panviva and Adestra, which launched new capabilities to boost analytics and contact center performance.
CEO Jack McDonald expressed optimism, citing “sizable product wins” and progress in expanding the company’s core growth rate and margins. Excluding divestitures, the company’s net dollar retention rate would have been 99%, compared to a reported 96%.
While revenue trends remain weak with analysts projecting a 10.9% decline over the next year, Upland’s operational improvements and AI-driven initiatives are expected to support margin expansion in 2025.
