Upland Software (NASDAQ: UPLD) reported Q1 EPS of $0.72, $0.22 better than the analyst estimate of $0.50. Revenue for the quarter came in at $68 million versus the consensus estimate of $64.1 million.

First Quarter 2020 Financial Highlights

• Total revenue was $68.0 million, an increase of 40% from $48.5 million in the first quarter of 2019.
• Subscription and support revenue was $63.9 million, an increase of 42% from $45.0 million in the first quarter of 2019.
• GAAP net loss was $20.1 million, or a loss of $0.81 cents per share, compared to a GAAP net loss of $7.8 million, or a loss of $0.38 cents per share, in the first quarter of 2019.
• Adjusted EBITDA was $24.6 million, or 36% of total revenue, an increase of 38% from $17.8 million, or 37% of total revenue, in the first quarter of 2019.
• Cash on hand as of the end of the first quarter was $98.7 million.

"Our Q1 performance and strong, revised guidance demonstrate Upland’s resilience as we navigate the COVID-19 pandemic," said Jack McDonald, Chairman and CEO of Upland Software. "Our products have helped our customers succeed in this new remote working environment," he added. "Upland’s enterprise customer base, high recurring revenue, retention and margins, limited exposure to highly impacted verticals, strong balance sheet, and flexible cost structure position us well to emerge from this pandemic ready to capitalize on new growth opportunities." He continued, “We will pause acquisitions in the short term while nurturing our pipeline and continuing our go-to-market investments."

“Our balance sheet remains strong with cash on-hand and available liquidity under our Revolver of over $150 million, and comfortably positive cash flows expected for the remainder of the year,” said Mike Hill, CFO of Upland Software. “We are in a strong position today because of the actions we took in 2019 to fortify our capital base, raising equity and putting in place a new credit facility which extended the maturity of our term debt out to August 2026, reduced our annual principal payments to only one percent, and removed all financial covenants on current borrowings," he added.

GUIDANCE:

Upland Software sees Q2 2020 revenue of $62.5-66.5 million, versus the consensus of $66.82 million.

Upland Software sees FY2020 revenue of $257.4-269.4 million, versus the consensus of $270.64 million.

• The second quarter 2020 guidance and updated full-year 2020 guidance we are providing today factor in the expected impacts of COVID-19 based on information available to us today. Our guidance is also based on the assumption that the most significant headwinds will occur in the second and third quarters of 2020 and that economic conditions will begin to open up more broadly by the end of the year. Significant variation from these assumptions could cause us to modify our guidance higher or lower. While we have taken this opportunity to identify additional cost efficiencies in our already high margin operating model, our guidance assumes a continuation of our go-to-market investment initiative.
• For the quarter ending June 30, 2020, Upland expects reported total revenue to be between $62.5 and $66.5 million, including subscription and support revenue between $59.9 and $62.9 million, for growth in recurring revenue of 26% at the mid-point over the quarter-ended June 30, 2019. Second quarter 2020 Adjusted EBITDA is expected to be between $20.5 and $22.5 million, for an Adjusted EBITDA margin of 33% at the mid-point, representing growth of 13% at the mid-point over the quarter-ended June 30, 2019.
• For the full year ending December 31, 2020, Upland expects reported total revenue to be between $257.4 and $269.4 million, including subscription and support revenue between $244.8 and $253.8 million, for growth in recurring revenue of 22% at the mid-point over the year ended December 31, 2019. Full year 2020 Adjusted EBITDA is expected to be between $87.2 and $93.2 million, for an Adjusted EBITDA margin of 34% at the mid-point, representing growth of 9% at the mid-point over the year ended December 31, 2019.

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