Upland Software Q4 Earnings Call Highlights

Upland Software (NASDAQ:UPLD) executives told investors on the company’s fourth-quarter 2025 earnings call that results came in “roughly as expected,” while highlighting expanding profitability, strong free cash flow, and a CEO transition that management framed as aligned with the company’s evolving strategy.

Fourth-quarter performance and customer activity

Chairman and CEO Jack McDonald said fourth-quarter revenue, adjusted EBITDA, and margins were generally in line with expectations. He noted the company’s Q4 “core organic growth rate was flat” due to a difficult comparison against Q4 2024, which included what he described as “lumpy additional usage volume revenue.” McDonald emphasized that core organic growth can “bounce around” quarter to quarter, while describing an improving multi-year trend and stating the company is targeting 1%–2% core organic growth in 2026.

Upland reported an annual net dollar retention rate of 96% for 2025, which McDonald said was consistent with the prior year. He also highlighted customer activity in the quarter, including 110 new customers and 199 expansions with existing customers. Management said these wins and expansions were spread across the company’s AI-powered product portfolio.

In response to an analyst question about the quarter’s sales execution and pipeline, McDonald said the company had a stronger third quarter in terms of major deals, but added that management was “a little bit disappointed in the Q4 bookings performance.” He said the pipeline for 2026 “looks decent,” particularly for core knowledge management growth products, where he said the company is building a “healthier pipeline of larger deals,” while stressing the need to execute.

Margins, cash flow, and balance sheet

McDonald reported adjusted EBITDA of $15.3 million in Q4 2025, resulting in an adjusted EBITDA margin of 31%. CFO Mike Hill said the 31% adjusted EBITDA margin compared with 22% in the fourth quarter of 2024, calling it a “big improvement.” Hill also said fourth-quarter gross margin increased from earlier in 2025 as the company realized higher margins on its ongoing product lines following divestitures.

Cash flow was another focal point. Hill said GAAP operating cash flow was $7.3 million in the quarter and free cash flow was $7.2 million. McDonald attributed the stronger-than-expected Q4 free cash flow to successful collection efforts, helping bring full-year 2025 free cash flow to $24.4 million, above the company’s stated $20 million target.

Hill added that the company’s free cash flow outperformance versus its 2025 target was “really due to early receivables collections, which would have otherwise occurred in 2026,” and noted that without those early collections, the company’s 2026 free cash flow target would have been higher.

On the balance sheet, Hill said Upland ended the quarter with approximately $209 million of net debt, including about $29 million of cash. He said net debt leverage was 3.6x trailing adjusted EBITDA, which he said was better than the company’s target.

Guidance reflects divestiture impact and seasonal margin dynamics

For the quarter ending March 31, 2026, Hill guided for reported total revenue of $47 million to $50 million, including subscription and support revenue of $44.8 million to $47.3 million. He said the midpoint implies a 24% year-over-year revenue decline, primarily due to divestitures completed in the first and second quarters of 2025.

Upland’s first-quarter 2026 adjusted EBITDA guidance was $11.9 million to $13.4 million, which Hill said implies a 3% decline at the midpoint compared with the year-ago quarter. He guided to an adjusted EBITDA margin of 26% at the midpoint, a 500-basis-point improvement from 21% in the year-ago quarter.

For full-year 2026, Hill guided to reported total revenue of $194.2 million to $206.2 million, including subscription and support revenue of $183.6 million to $193.7 million. At the midpoint, Hill said this would represent an 8% decline from 2025, again primarily driven by the 2025 divestitures. Full-year 2026 adjusted EBITDA was guided to $52.6 million to $58.6 million, with an adjusted EBITDA margin of 28% at the midpoint, which Hill said would be 100 basis points higher than 2025’s 27%.

When asked why margin guidance was below the 31% level achieved in recent quarters, Hill pointed to typical seasonality, saying the company generally exits the year at its highest margins and starts the year at its lowest margins. He cited items such as calendar-based payroll taxes that tend to impact the first half of the year more significantly.

Leadership transition: McDonald to become chairman, Nathaniel named CEO

McDonald also announced a leadership change, stating that Sean Nathaniel will join Upland as its new CEO, while McDonald transitions to chairman. McDonald said Nathaniel previously worked at Upland from 2013 to 2020 and served as CTO and in senior general management roles across a significant portion of the product portfolio.

McDonald said Nathaniel brings “highly relevant experience” related to AI initiatives focused on enterprise knowledge, content, and data. He described Nathaniel’s vision as reinforcing Upland’s role in helping organizations convert knowledge, content, and data into “trusted operational intelligence” to support AI- and agent-driven operating models. McDonald said Upland already has capabilities aligned with this vision and that Nathaniel’s priority will be to sharpen execution and translate those capabilities into measurable customer and shareholder value.

Asked why the transition is occurring now, McDonald said the business has shifted from a model centered on acquisition-driven growth toward a focus on operations and advancing an AI-enabled product portfolio. He characterized Nathaniel as a “product-centric and AI-focused” leader suited to the company’s next phase.

Portfolio focus and management’s view of AI-driven demand

During the call, management reiterated that Upland’s product portfolio is now more focused around the knowledge and content management market. Hill said roughly two-thirds to three-quarters of revenue, or “maybe even a little bit more,” comes from what he called the company’s “growth products” versus its specialized market products, adding that most of those growth products are AI-enabled and positioned to benefit from AI as a tailwind.

McDonald also discussed how AI is affecting the broader SaaS landscape, arguing that products that function as systems of record or as enabling infrastructure layers could be more defensible. He cited examples of large bookings over the past 12 months tied to customers’ agentic AI implementations, where he said Upland products such as RightAnswers can provide a “trusted, auditable, governable, knowledge layer” to support AI outputs. He also referenced work with consulting firms on AI-driven portals, sales to hyperscalers for internal use, and partnerships with hyperscalers to bring capabilities from products like RightAnswers and BA Insight into those partners’ customer bases.

About Upland Software (NASDAQ:UPLD)

Upland Software, Inc is a provider of enterprise work management software delivered through a cloud-based, software-as-a-service model. The company offers a suite of integrated applications designed to help organizations plan, execute and measure work across various business functions including project management, marketing workflows, document automation and contract management.

Its flagship product lines include Upland PSA for professional services automation, Upland Bluebeam for digital collaboration in architecture and engineering workflows, Upland Qvidian for proposal automation, and Upland Pinpoint for customer communication management.