Upland Software, Inc. (UPLD) - 10-Q Summary
Business Context and Reporting Period
Company: Upland Software, Inc.
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: June 30, 2026
Business Overview: Upland provides an intelligence layer for enterprise knowledge and data. The company operates as a single reporting segment. During the period, the company executed a 1-for-10 reverse stock split (effective June 17, 2026) to regain compliance with Nasdaq minimum bid price requirements.
Key Financial Metrics (Six Months Ended June 30, 2026)
| Metric | Amount (in thousands) |
|---|---|
| Total Revenue | $97,831 |
| Gross Profit | $74,227 |
| Gross Margin | 76% |
| Net Loss | $(36,548) |
| Net Loss Attributable to Common Stockholders | $(39,572) |
| Diluted Net Loss Per Share | $(13.52) |
| Adjusted EBITDA | $25,490 |
| Cash and Cash Equivalents | $31,044 |
| Total Debt (Current + Noncurrent) | $223,843 |
| Operating Cash Flow | $10,973 |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 16% year-over-year (YoY) to $97.8 million. This was primarily driven by the divestiture of product lines in 2025 ($17.8 million impact) and the classification of "Sunset Assets" ($0.9 million impact).
- Goodwill Impairment: The company recorded a significant non-cash goodwill impairment charge of $35.2 million in the second quarter of 2026. This was triggered by a sustained decline in stock price and market capitalization, which reduced the estimated fair value of the company below its carrying value.
- Operating Expenses: Total operating expenses decreased significantly compared to the prior year, largely due to the absence of $8.6 million in divestiture-related expenses recorded in the first half of 2025. However, the impairment charge increased total operating expenses for the quarter.
- Interest Expense: Net interest expense increased 37% YoY to $9.0 million, driven by higher effective interest rates on outstanding debt, partially offset by a lower debt balance.
Guidance, Outlook, and Risks
- Nasdaq Compliance Risk: On July 31, 2026, the company received a deficiency notice from Nasdaq for failing to meet the $15 million minimum market value of publicly held shares (MVPHS) requirement. The company has 180 days (until January 27, 2027) to regain compliance. Failure to do so could result in delisting.
- Debt Covenants: The company is in compliance with all covenants under its Credit Agreement, including a consolidated secured leverage ratio limit of 6.0 to 1.0.
- Liquidity: Management believes cash on hand ($31.7 million including restricted cash), positive operating cash flows, and a $30 million revolving credit facility are sufficient to meet anticipated needs.
- Future Impairments: Management noted that if the stock price declines further or operational results do not meet expectations, additional material goodwill impairments could occur.
- Core Organic Growth: For the three months ended June 30, 2026, the Core Organic Growth Rate was negative 0.39%.
Investor Verification Checklist
- Delisting Risk: Verify the company's plan to regain compliance with Nasdaq's $15 million market value requirement by January 2027.
- Goodwill Valuation: Assess the sustainability of the company's fair value given the recent $35.2 million impairment and the sensitivity of future valuations to stock price performance.
- Debt Service: Review the impact of the 9.7% floating interest rate on future cash flows and the ability to meet quarterly principal payments on the $240 million term loan.
- Revenue Quality: Analyze the "Core Organic Growth Rate" and the impact of "Sunset Assets" to understand the true trajectory of the remaining business.
- Preferred Stock Obligations: Note the $136.7 million liquidation preference (including accrued dividends) on Series A Convertible Preferred Stock, which ranks senior to common stock.