Upland Software Inc Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Scott Berg - Needham & Company, Inc. - Analyst : This is Ian Black on for Scott Berg. Core bookings have exceeded core churn, again, as you note, but how far through the go-to-market changes is the Company now?

Question: Jeffrey Van Rhee - Craig-Hallum Capital Group LLC - Analyst : This is Dan on for Jeff. Just starting off just on the Sunset assets. You guys do a great job of getting the 10-Q out promptly looks like there's about $8.5 million still of sunset assets. Just thoughts on the pace of roll off of that and how we should expect that to unfold. It looks like year-over-year, that's down maybe about $5 million. Should we expect sort of on an absolute value basis, roughly a similar pace of roll-off? Or just how should we be modeling that?

Question: Jeffrey Van Rhee - Craig-Hallum Capital Group LLC - Analyst : And then any thoughts on, especially as a point of being considering M&A, just what the strategy is for tackling the debt balance and as we get incrementally closer to 25%, just how you envision the path toward refinancing?

Question: Jeffrey Van Rhee - Craig-Hallum Capital Group LLC - Analyst : Okay. And then just last for me. Digging down sort of to the product level, as you look to the product portfolio and for weakness.

Question: Jeffrey Van Rhee - Craig-Hallum Capital Group LLC - Analyst : And then just one last for me for Mike. Just on gross margins, can you help us sort of cut through as the business is sort of transitioning out of the content assets, hard to tell the trajectory on gross margins was, let's say, 72% Q4 '23, up to 75%, down to 73%. It's hard to read the trajectory there. How should we be modeling there?

Question: Jeffrey Van Rhee - Craig-Hallum Capital Group LLC - Analyst : Okay. That's helpful. That's it for me.

Question: Alex Sklar - Raymond James Financial Services, Inc. - Analyst : This is John on for Alex. Jack, I was curious maybe if you could comment on sales cycles you're seeing in the market. Some companies like we have been calling out elongated sales cycles. Just curious if you could speak to what you're seeing and maybe how that trends over the last 90 days. And I have a few follow-ups.

Question: Alex Sklar - Raymond James Financial Services, Inc. - Analyst : That's helpful there. And that leads into my next question on the major account expansions, which were up nicely sequentially and year-over-year. I know you mentioned some rig the prepared remarks, but just any commentary on what's driving the success there? commonality, maybe geographically? And how we should think about the trajectory of that metric? Do you expect to kind of hit a near-term trough here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 01, 2024 / 9:00PM, UPLD.OQ - Q2 2024 Upland Software Inc Earnings Call

Question: Alex Sklar - Raymond James Financial Services, Inc. - Analyst : Okay. That's helpful. And then just last one for me. I realize there's moving pieces internally that you've been talking about here. But just any commentary you can share on the acquisition pipeline going forward. I think last quarter, you mentioned you're always looking. Just curious what you're seeing from private multiples and how we should think about M&A as we move forward in the model?

Question: Alex Sklar - Raymond James Financial Services, Inc. - Analyst : That's helpful color there.

Question: Dan Reagan - Canaccord Genuity Group, Inc. - Analyst : This is Dan Reagan on for DJ. Maybe one for Jack to start. So you guys are seeing some nice returns from your sales and marketing investments across areas like search intent, SDR capacity. So clearly, you guys are positioned to have that nice EBITDA guide path from here. But I'm wondering how you're thinking about the pace of sales and marketing investments from here? And then also just any thoughts around the productivity of these investments as they continue to ramp.

Question: Dan Reagan - Canaccord Genuity Group, Inc. - Analyst : Got you. Awesome. And then you highlighted chunkier deals in larger ARR lands for core products. Can you talk a little bit about what the average deal size increase is looking like? And where you're seeing the most traction?

Question: Dan Reagan - Canaccord Genuity Group, Inc. - Analyst : Awesome. And then just as a final one, circling back to the customer expansion discussion and kind of building off of comments that you just made here. What does the current growth mix look like between expansion revenue and net new revenue today? And then with the progress that you're making with all of those sales and marketing investments, where do you expect that this mix will go over the next few years?