Upland Software, Inc.

Previous wording

•our ability to adapt to macroeconomic factors impacting the global economy, including the Russia-Ukraine conflict, the conflicts in the Middle East, foreign currency exchange risk, inflation and supply chain constraints;

Current wording

•our ability to adapt to macroeconomic factors impacting the global economy, including the Russia-Ukraine conflict, the conflicts in the Middle East, changes in trade policy, foreign currency exchange risk, inflation and supply chain constraints;

Previous wording

Upland Software, Inc. (“Upland,” “we,” “us,” “our,” or the “Company”), a Delaware corporation headquartered in Austin, Texas, is a leader in AI-powered knowledge and content management software. Our solutions help enterprises unlock critical knowledge, automate content workflows, and drive measurable ROI—enhancing customer and employee experiences while supporting regulatory compliance. More than 1,100 enterprise customers rely on Upland to solve complex challenges and provide a trusted path for AI adoption.

Current wording

Upland Software, Inc. is a leader in AI-powered knowledge and content management software. Our solutions help enterprises unlock critical knowledge, automate content workflows, and drive measurable ROI—enhancing customer and employee experiences while supporting regulatory compliance. More than 1,100 enterprise customers rely on Upland to solve complex challenges and provide a trusted path for AI adoption.

Previous wording

Beginning with the three months ended June 30, 2023, we began disclosing our Core Organic Growth Rate, a non-GAAP financial measure. We use Core Organic Growth Rate as a key performance measure to assess our consolidated operating performance over time and for planning and forecasting purposes. Core Organic Growth Rate is the percentage change between two reported periods in subscription and support revenue, excluding subscription and support revenue from Sunset Assets, subscription and support revenue from divestitures, and Overage Charges, each as defined below. We calculate our year-over-year Core Organic Growth Rate as though all acquisitions or dispositions closed as of the end of the latest period were closed as of the first day of the prior year period presented. Core Organic Growth Rate does not represent actual organic revenue generated by our business as it stood at the beginning of the respective period.

Current wording

We use Core Organic Growth Rate as a key performance measure to assess our consolidated operating performance over time and for planning and forecasting purposes. Core Organic Growth Rate is the percentage change between two reported periods in subscription and support revenue, excluding subscription and support revenue from Sunset Assets, subscription and support revenue from divestitures, and Overage Charges, each as defined below. We calculate our year-over-year Core Organic Growth Rate as though all acquisitions or dispositions closed as of the end of the latest period were closed as of the first day of the prior year period presented. Core Organic Growth Rate does not represent actual organic revenue generated by our business as it stood at the beginning of the respective period.

Previous wording

For the three-month period ended March 31, 2025, our Core Organic Growth Rate was 0.2%.

Current wording

For the three-month period ended June 30, 2025, our Core Organic Growth Rate was 1.2%.

Previous wording

We monitor our Adjusted EBITDA to help us evaluate the effectiveness and efficiency of our operations. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss), calculated in accordance with GAAP, adjusted for depreciation and amortization expense, net interest expense, loss on debt extinguishment, net other expense, benefit from income taxes, stock-based compensation expense, acquisition and divestiture related expense, purchase accounting deferred revenue discount, gains and losses on divestitures of businesses, and impairment of goodwill.

Current wording

We monitor our Adjusted EBITDA to help us evaluate the effectiveness and efficiency of our operations. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss), calculated in accordance with GAAP, adjusted for depreciation and amortization expense, net interest expense, loss on debt extinguishment, net other expense (income), benefit from (provision for) income taxes, stock-based compensation expense, acquisition and divestiture related expense, purchase accounting deferred revenue discount, gains and losses on divestitures of businesses, and impairment charges.

Previous wording

•Impairment of goodwill and depreciation and amortization are non-cash charges, and the assets being depreciated or amortized, which contribute to the generation of revenue, will often have to be replaced in the future and Adjusted EBITDA does not reflect cash requirements for such replacements; however, much of the depreciation and amortization relates to amortization of acquired intangible assets as well as the goodwill as a result of business combination purchase accounting adjustments, which will not need to be replaced in the future;

Current wording

•Impairment of goodwill and other intangibles and depreciation and amortization are non-cash charges, and the assets being depreciated or amortized, which contribute to the generation of revenue, will often have to be replaced in the future and Adjusted EBITDA does not reflect cash requirements for such replacements; however, much of the depreciation and amortization relates to amortization of acquired intangible assets as well as the goodwill as a result of business combination purchase accounting adjustments, which will not need to be replaced in the future;

Previous wording

Comparison of the Three Months Ended March 31, 2025 and 2024

Current wording

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

Previous wording

See Note 12. Divestitures regarding product lines divested in the three months ended March 31, 2025.

Current wording

See Note 12. Divestitures regarding product lines divested in the three and six months ended June 30, 2025.

Previous wording

Total revenue was $63.7 million in the three months ended March 31, 2025, compared to $70.7 million in the three months ended March 31, 2024, a decrease of $7.0 million, or 10%. This decrease is primarily due to the expected decline in subscription and support revenue from Sunset Assets of $2.5 million, and the decline in subscription and support revenue related to divested businesses of $3.9 million. The remaining decrease results from declines in overage charges of approximately $0.5 million, declines in total professional services revenue of $0.3 million, offset by an increase in total perpetual license revenue of $0.1 million.

Current wording

Total revenue was $53.4 million in the three months ended June 30, 2025, compared to $69.3 million in the three months ended June 30, 2024, a decrease of $15.9 million, or 23%. This decrease is primarily due to the expected declines in revenue related to divested product lines of $14.8 million and revenue related to Sunset Assets of $0.7 million. The remaining change results from declines in professional services revenue of $0.2 million, and perpetual license revenue of $0.5 million, offset by an increase in subscription and support revenue of $0.3 million related to core products.

Previous wording

Cost of subscription and support revenue was $17.0 million in the three months ended March 31, 2025, compared to $19.8 million in the three months ended March 31, 2024, a decrease of $2.8 million, or 15%. $1.1 million of the decrease is attributable to infrastructure costs, personnel costs and amortization expense related to divested product lines. The remaining decrease in cost of subscription and support revenue is due to a decrease of $0.3 million in variable telecom carrier costs, decreases of $0.8 million in personnel costs and a decrease of $0.6 million in amortization of intangible assets.

Current wording

Cost of subscription and support revenue was $12.4 million in the three months ended June 30, 2025, compared to $19.2 million in the three months ended June 30, 2024, a decrease of $6.8 million, or 36%. The decrease related to divested product lines was $5.7 million attributable to infrastructure costs, variable telecom carrier costs, personnel costs and non-cash amortization of divested intangibles. The decrease related to Sunset assets was $0.4 million and the remaining decrease related to decreases of $0.3 million in personnel-related expenses and $0.4 million in non-cash amortization of intangibles in our on-going product lines.

Previous wording

Cost of professional services and other revenue was $1.1 million in the three months ended March 31, 2025, compared to $1.2 million in the three months ended March 31, 2024, a decrease of $0.1 million, or 10%. The decrease in cost of professional services was comprised of a decrease in personnel-related expenses in both our divested product lines and our remaining product lines.

Current wording

Cost of professional services and other revenue was $1.0 million in the three months ended June 30, 2025, compared to $1.2 million in the three months ended June 30, 2024, a decrease of $0.2 million, or 17%. The decrease in cost of professional services and other revenue was comprised of a decrease in personnel-related expenses of $0.1 million in our divested product lines and $0.1 million in our on-going product lines.

Previous wording

Research and development expense was $11.5 million in the three months ended March 31, 2025, compared to $12.5 million in the three months ended March 31, 2024, a decrease of $1.0 million, or 7.3%. The decline in research and development expense is primarily attributable to a $0.4 million decrease in personnel-related costs in our divested product lines and $0.6 million in personnel-related costs in our remaining product lines as we continue to shift our spending focus to our India Center of Excellence, as well as decreases in third-party software costs.

Current wording

Research and development expense was $21.3 million in the six months ended June 30, 2025, compared to $24.6 million in the six months ended June 30, 2024 a decrease of $3.3 million, or 13.5%. The decrease in research and development expense is primarily attributable to a $2.3 million decrease in personnel-related costs in our divested product lines, a $0.3 million decrease in personnel-related costs in our Sunset Assets and a $0.7 million decrease in personnel-related costs in our remaining product lines.

Previous wording

Depreciation and amortization expense was $8.0 million in the three months ended March 31, 2025, compared to $11.4 million in the three months ended March 31, 2024, a decrease of $3.4 million, or 30%. $2.7 million of the decrease resulted from the decline in amortization from intangible assets associated with the divested product lines. The remainder of the decrease is due to remaining intangible assets becoming fully amortized in prior periods.

Current wording

Depreciation and amortization expense was $6.9 million in the three months ended June 30, 2025, compared to $11.4 million in the three months ended June 30, 2024, a decrease of $4.5 million, or 40%. All of the decrease resulted from the decline in amortization from intangible assets associated with the divested product lines.

Previous wording

Interest expense, net of interest income, was $2.4 million of net interest income in the three months ended March 31, 2025 compared to $5.0 million of net interest expense in the three months ended March 31, 2024, a change of $2.6 million or 51%. This was due primarily to prepayments on the Company’s Term Loans during the three months ended March 31, 2025, which lowered cash interest expense by $5.3 million. This reduction was offset by a decline in cash interest inflow related to our interest rate swaps of $0.8 million. Amortization of realized and unrealized gains on interest rates swaps from accumulated other comprehensive income to interest expense, net was $3.9 million for the three months ended March 31, 2025 as compared to amortization of $1.5 million in the three months ended March 31, 2024. The amortization effects on interest expense, net was offset by changes in the fair value of the interest rate swaps recorded to interest expense, net of $2.2 million in the three months ended March 31, 2025 with no such effects recorded to interest expense, net in the three months ended March 31, 2024. Interest income for the three months ended March 31, 2025 declined $2.3 million from interest income in the three months ended March 31, 2024 due to lower cash and cash equivalents.

Current wording

Interest expense, net of interest income, was $4.1 million of net interest income in the three months ended June 30, 2025 compared to $5.1 million of net interest expense in the three months ended June 30, 2024, a change of $1.0 million or 18%. This was due to prepayments on the our Term Loans in prior periods, which lowered cash interest expense by $4.9 million, inclusive of the effects of the interest rate swaps. This reduction was offset by the changes in the fair value of the interest rate swaps recorded to interest expense, net of $1.3 million in the three months ended June 30, 2025 with no such effects recorded to interest expense, net in the three months ended June 30, 2024. Interest income for the three months ended June 30, 2025 declined $2.6 million from interest income in the three months ended June 30, 2024 due to lower cash and cash equivalents.

Previous wording

The benefit for income taxes was $1.3 million in the three months ended March 31, 2025, compared to a benefit from income taxes of $0.5 million in the three months ended March 31, 2024, resulting in an increase in benefit from income taxes of $0.8 million. The benefit from income taxes for the three months ended March 31, 2025 relates primarily to the deferred tax benefit from the business divestitures in the first quarter of 2025. This tax benefit is partially offset by the income tax from non-U.S. and U.S. operations.

Current wording

The benefit from income taxes was $0.2 million in the three months ended June 30, 2025, compared to a provision for income taxes of $1.2 million in the three months ended June 30, 2024, resulting in an increase in benefit from income taxes of $1.4 million. The benefit from income taxes for the three months ended June 30, 2025 relates primarily to the deferred tax benefit from the business divestitures in the second quarter of 2025. This tax benefit is partially offset by the income tax from non-U.S. and U.S. operations.

Previous wording

We have financed our operations primarily through cash generated from operating activities, the raising of capital including sales of our Common Stock or our convertible preferred stock, and borrowings under our Credit Facility. We believe that current cash and cash equivalents, and cash flows from operating activities will be sufficient to fund our operations for at least the next twelve months.

Current wording

We have financed our operations primarily through cash generated from operating activities, the raising of capital including sales of our Common Stock or our convertible preferred stock, and borrowings under credit facilities.

Previous wording

As of March 31, 2025, we had $33.7 million of cash, cash equivalents and restricted cash and $259.4 million of borrowings outstanding under our Term Loans that mature August 6, 2026. As of December 31, 2024, we had $57.1 million of cash, cash equivalents and restricted cash and $293.7 million of borrowings outstanding under our Term Loans. The $22.7 million decrease in cash, cash equivalents and restricted cash from December 31, 2024 to March 31, 2025 was due primarily $34.2 million in debt repayment which includes $30.2 million of prepayments made in the current quarter, offset by $4.2 million cash proceeds from divestitures of businesses and $8.3 million in cash inflows from operations.

Current wording

As of June 30, 2025, we had $41.6 million of cash, cash equivalents and restricted cash and $258.1 million of borrowings outstanding under our Term Loans. As of December 31, 2024, we had $57.1 million of cash, cash equivalents and restricted cash and $293.7 million of borrowings outstanding under our Term Loans. The $15.4 million decrease in cash, cash equivalents and restricted cash from December 31, 2024 to June 30, 2025 was primarily due to $35.6 million in debt repayments made in the six months ended June 30, 2025. Other uses of cash included $1.1 million in purchases of leasehold improvements and equipment and $0.7 million taxes paid related to net settlement of shares which were offset by $9.1 million cash proceeds from divestitures of businesses, $11.6 million in cash inflows from operations and $1.2 million positive effect of exchange rates during the six months ended June 30, 2025.

Previous wording

Our cash and cash equivalents held by our foreign subsidiaries was $19.9 million as of March 31, 2025 and $32.4 million as of December 31, 2024. Our intent is to permanently reinvest these funds outside the U.S. and our current plans do not demonstrate a need to repatriate them to fund our domestic operations. We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries.

Current wording

Our cash and cash equivalents held by our foreign subsidiaries was $21.9 million as of June 30, 2025 and $32.4 million as of December 31, 2024. Our intent is to permanently reinvest these funds outside the U.S. and our current plans do not demonstrate a need to repatriate them to fund our domestic operations. We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries.

Previous wording

Cash provided by operating activities was $8.3 million for the three months ended March 31, 2025 compared to cash provided by operating activities of $5.1 million for the three months ended March 31, 2024, an increase of approximately $3.2 million comprised of a non-recurring $1.2 million cash gain on the sale of a portion of our interest rate swaps in the three months ended March 31, 2025. as well as changes in working capital for the three months ended March 31, 2025 which include collections on accounts receivable, increases in prepaid and other current assets, payments of current liabilities and decreases in deferred revenue.

Current wording

Cash provided by operating activities was $11.6 million for the six months ended June 30, 2025 compared to cash provided by operating activities of $10.6 million for the six months ended June 30, 2024, an increase of approximately $1.0 million. This increase was primarily due to a non-recurring $1.2 million cash gain on the sale of a portion of our interest rate swaps in the six months ended June 30, 2025. This cash gain was slightly offset by changes in our working capital for the six months ended June 30, 2025 due to collections on accounts receivable, increases in prepaid expenses, increases in other assets, payments of current liabilities and changes in deferred revenue.

Previous wording

Cash provided by investing activities was $3.8 million for the three months ended March 31, 2025 compared to cash used by investing activities of $0.2 million for the three months ended March 31, 2024, an increase of $4.0 million. During the three months ended March 31, 2025, the Company divested of certain product lines and received cash proceeds of $4.2 million. Cash used in investing activities consisted of purchases of property and equipment of $0.4 million for the three months ended March 31, 2025 compared to $0.2 million of purchases of property and equipment for the three months ended March 31, 2024.

Current wording

Cash provided by investing activities was $8.0 million for the six months ended June 30, 2025 compared to cash used by investing activities of $0.5 million for the six months ended June 30, 2024, an increase of $8.5 million. During the six months ended June 30, 2025, the Company divested of certain products and received cash proceeds of $9.1 million. Cash used in investing activities consisted of purchases of leasehold improvements and equipment of $1.1 million for the six months ended June 30, 2025 compared to $0.5 million of purchases of property and equipment for the six months ended June 30, 2024.

Previous wording

Cash used in financing activities was $34.7 million for the three months ended March 31, 2025 compared to $9.6 million for the three months ended March 31, 2024, an increase of $25.1 million of cash used due to $32.9 million in additional payments on the Company’s Term Loans in the three months ended March 31, 2025 over payments made in the three months ended March 31, 2024, netted with $7.9 million used for Common Stock repurchases in the three months ended March 31, 2024 over the three months ended March 31, 2025.

Current wording

Cash used in financing activities was $36.3 million for the six months ended June 30, 2025 compared to $14.3 million for the six months ended June 30, 2024, an increase of $22.0 million of cash used due to $32.9 million in additional payments on our Term Loans in the six months ended June 30, 2025 over payments made in the six months ended June 30, 2024, netted with $11.0 million used for Common Stock repurchases in the six months ended June 30, 2024 compared to none for the six months ended June 30, 2025.

Previous wording

Our unaudited interim financial statements and other financial information for the three months ended March 31, 2025, as presented herein and in “Item 1. Financial Statements” to this Quarterly Report on Form 10-Q, reflect no material changes in our critical accounting policies and estimates as set forth in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report”). Please refer to our Annual Report for a detailed description of our critical accounting policies that involve significant management judgment.

Current wording

Our unaudited interim financial statements and other financial information for the three and six months ended June 30, 2025, as presented herein and in “Item 1. Financial Statements” to this Quarterly Report on Form 10-Q, reflect no material changes in our critical accounting policies and estimates as set forth in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report”). Please refer to our Annual Report for a detailed description of our critical accounting policies that involve significant management judgment.