Business automation software provider Upland Software (NASDAQ: UPLD) reported Q1 CY2024 results beating Wall Street analysts' expectations, with revenue down 8.2% year on year to $70.74 million. On the other hand, the company expects next quarter's revenue to be around $67.4 million, slightly below analysts' estimates. It made a non-GAAP profit of $0.19 per share, down from its profit of $0.28 per share in the same quarter last year.
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Upland (UPLD) Q1 CY2024 Highlights:
- Revenue: $70.74 million vs analyst estimates of $68.33 million (3.5% beat)
- EPS (non-GAAP): $0.19 vs analyst estimates of $0.14 (39.7% beat)
- Revenue Guidance for Q2 CY2024 is $67.4 million at the midpoint, below analyst estimates of $67.74 million
- The company lifted its revenue guidance for the full year from $271 million to $273.7 million at the midpoint, a 1% increase
- Gross Margin (GAAP): 70.2%, up from 66.9% in the same quarter last year
- Free Cash Flow of $4.94 million, down 42.6% from the previous quarter
- Market Capitalization: $57.11 million
"In Q1, we beat our revenue and Adjusted EBITDA guidance midpoints," said Jack McDonald, Upland's chairman and chief executive officer.
Founder Jack McDonald’s second software rollup, Upland Software (NASDAQ:UPLD) is a one stop shop for sales and marketing software, project management, HR, and contact center services for small and medium sized businesses.
Marketing Software
Whether or not companies market their products through social media, all businesses need to meet customers where they are; and increasingly, that is social media. As more and more people use a greater number of social media platforms, social media management software become more valuable to their customers.
Sales Growth
As you can see below, Upland's revenue has been flat over the last three years, coming in at $70.74 million this quarter compared to $73.97 million in Q1 2021.
Upland's revenue was down again this quarter, falling 8.2% year on year.
Next quarter, Upland is guiding for a 9.5% year-on-year revenue decline to $67.4 million, a further deceleration from the 7.1% year-on-year decrease it recorded in the same quarter last year. Looking ahead, Wall Street was expecting revenue to decline 6.2% over the next 12 months before the earnings results announcement.
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Cash Is King
If you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Upland's free cash flow came in at $4.94 million in Q1, down 68.4% year on year.
Upland has generated $38.05 million in free cash flow over the last 12 months, a decent 13.1% of revenue. This FCF margin stems from its asset-lite business model and gives it a decent amount of cash to reinvest in its business.
Key Takeaways from Upland's Q1 Results
We were impressed by Upland's strong gross margin improvement this quarter. We were also glad its revenue and EPS outperformed Wall Street's estimates. On the other hand, its revenue guidance for the next quarter missed analysts' expectations. Zooming out, we think this was still a decent, albeit mixed, quarter, showing that the company is staying on track. The stock is flat after reporting and currently trades at $2.02 per share.
So should you invest in Upland right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.