Upland (NASDAQ:UPLD) Reports Q4 In Line With Expectations But Full-Year Guidance Underwhelms

Jabin Bastian /
2024/02/22 4:06 pm EST

Business automation software provider Upland Software (NASDAQ: UPLD) reported results in line with analysts' expectations in Q4 FY2023, with revenue down 8.4% year on year to $72.18 million. On the other hand, next quarter's revenue guidance of $68 million was less impressive, coming in 5.9% below analysts' estimates. It made a non-GAAP profit of $0.14 per share, down from its profit of $0.37 per share in the same quarter last year.

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Upland (UPLD) Q4 FY2023 Highlights:

  • Revenue: $72.18 million vs analyst estimates of $71.85 million (small beat)
  • EPS (non-GAAP): $0.14 vs analyst expectations of $0.18 (22.2% miss)
  • Revenue Guidance for Q1 2024 is $68 million at the midpoint, below analyst estimates of $72.23 million
  • Management's revenue guidance for the upcoming financial year 2024 is $271 million at the midpoint, missing analyst estimates by 6.6% and implying 9% decline (vs 6.1% decline in FY2023)
  • Free Cash Flow of $8.60 million, down 51.6% from the previous quarter
  • Gross Margin (GAAP): 67.2%, up from 66.1% in the same quarter last year
  • Market Capitalization: $141.9 million

"We continue to make progress on our growth plan and remain focused on building great software and delivering value for customers," 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

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Sales Growth

As you can see below, Upland's revenue has been declining over the last two years, shrinking from $75.73 million in Q4 FY2021 to $72.18 million this quarter.

Upland Total Revenue

Upland's revenue was down again this quarter, falling 8.4% year on year.

Next quarter, Upland is guiding for a 11.8% year-on-year revenue decline to $68 million, a further deceleration from the 2.1% year-on-year decrease it recorded in the same quarter last year. For the upcoming financial year, management expects revenue to be $271 million at the midpoint, declining 9% year on year compared to 6.1% drop in FY2023.

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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 $8.60 million in Q4, up 51.1% year on year.

Upland Free Cash Flow

Upland has generated $48.72 million in free cash flow over the last 12 months, a solid 16.4% of revenue. This strong FCF margin stems from its asset-lite business model, giving it optionality and plenty of cash to reinvest in its business.

Key Takeaways from Upland's Q4 Results

We struggled to find many strong positives in these results. Its full-year revenue guidance was below expectations and it suggests a slowdown in demand. The company is down 2% on the results and currently trades at $4.33 per share.

Upland may have had a tough quarter, but does that actually create an opportunity to invest 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.