Upland Software, Inc. reports 1,925% EBITDA growth in 2018 and 53.0% Revenue growth
03/07/2019 • About Upland Software, Inc. (
$UPLD) • By InTwits
Upland Software, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Upland Software, Inc. is a fast growth stock: 2018 revenue growth was 53.0%, 5 year revenue CAGR was 29.5% at 2018 ROIC -2.0%
- Upland Software, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has unprofitable business model: ROIC is -2.0%
- It operates with high leverage: Net Debt/EBITDA is 16.7x while industry average is -2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 53.0%. Revenue growth showed acceleration in 18Q4 - it increased 62.2% YoY. During the last 5 years Revenue growth bottomed in 2016 at 6.9% and was accelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.63 pp from 3.1% to 3.7% in 2018. EBITDA Margin followed a growing trend at 5.8 pp per annum in the last 5 years.
Gross Margin increased slightly on 1.9 pp from 65.6% to 67.6% in 2018. During the last 5 years Gross Margin bottomed in 2015 at 61.9% and was growing since that time. SG&A as a % of Revenue decreased on 4.1 pp from 39.4% to 35.3% in 2018. SG&A as a % of Revenue stuck to a declining trend at -2.2 pp per annum in the last 5 years.
Net Income margin jumped on 11.9 pp from -19.1% to -7.2% in 2018. Net Income margin stuck to a growing trend at 4.8 pp per annum in 2014-2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.62% in 2018. Upland Software, Inc.'s CAPEX/Revenue decreased slightly on 0.74 pp from 1.4% in 2015 to 0.62% in 2018. It's average CAPEX/Revenue for the last three years was 0.64%. CAPEX as a % of Revenue followed a declining trend at -0.24 pp per annum in 2014-2018.
Return on investment
The company operates at negative ROIC (-2.0%) and ROE (-12.1%). ROIC increased on 5.1 pp from -7.1% to -2.0% in 2018. ROE jumped on 12.8 pp from -24.9% to -12.1% in 2018. ROIC followed a growing trend at 4.7 pp per annum in 2014-2018.
Leverage (Debt)
Debt level is 16.7x Net Debt / EBITDA and 17.8x Debt / EBITDA. Net Debt / EBITDA dropped on 98.8x from 115.6x to 16.7x in 2018. Debt jumped on 150% while cash dropped on 25.0%.
Upland Software, Inc. has no short term refinancing risk: cash is higher than short term debt (255.2%).
Management team
John T Mcdonald "Jack" is a the company's CEO. John T Mcdonald "Jack" is a founder and has spent 9 years with the company. Upland Software, Inc.'s CFO is Michael D Hill "Mike". Michael D Hill "Mike" has 4 years tenure at the company.
Financial and operational results
FY ended 12/31/2018
Upland Software, Inc. ($UPLD) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 64.6 | 69.9 | 74.8 | 98.0 | 149.9 | 53.0% |
| Gross Profit | 41.5 | 43.2 | 47.2 | 64.3 | 101.3 | 57.5% |
| SG&A | 28.2 | 31.2 | 30.4 | 38.6 | 53.0 | 37.3% |
| EBITDA | -10.9 | -1.8 | 1.3 | 0.8 | 15.8 | 1,924.8% |
| Net Income | -20.1 | -13.7 | -13.5 | -18.7 | -10.8 | |
Balance Sheet
|
|---|
| Cash | 31.0 | 18.5 | 28.8 | 22.3 | 16.7 | -25.0% |
| Short Term Debt | 11.0 | 3.2 | 3.8 | 3.4 | 6.6 | 93.3% |
| Long Term Debt | 12.3 | 22.4 | 45.7 | 108.8 | 273.7 | 151.5% |
Cash flow
|
|---|
| Capex | 0.9 | 1.0 | 0.7 | 0.4 | 0.9 | 136.1% |
Ratios
|
|---|
| Revenue growth | 56.8% | 8.3% | 6.9% | 31.0% | 53.0% | |
| EBITDA growth | -1,215.6% | -83.7% | -171.7% | -38.7% | 1,924.8% | |
|
|---|
| Gross Margin | 64.2% | 61.9% | 63.1% | 65.6% | 67.6% | 1.9% |
| EBITDA Margin | -16.9% | -2.5% | 1.7% | 0.8% | 10.5% | 9.7% |
| SG&A, % of revenue | 43.7% | 44.6% | 40.7% | 39.4% | 35.3% | -4.1% |
| Net Income Margin | -31.2% | -19.5% | -18.1% | -19.1% | -7.2% | 11.9% |
| CAPEX, % of revenue | 1.3% | 1.4% | 0.9% | 0.4% | 0.6% | 0.2% |
|
|---|
| ROIC | -23.2% | -11.2% | -8.7% | -7.1% | -2.0% | 5.1% |
| ROE | | -20.8% | -22.7% | -24.9% | -12.1% | 12.8% |
| Net Debt/EBITDA | | | 16.4x | 115.6x | 16.7x | -98.8x |
Upland Software, Inc. ($UPLD) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 32 | 36 | 37 | 45 | | 52.3% | 54.4% | 42.5% | 62.2% |
| EBITDA | 4 | 4 | 6 | 2 | | | | 675.9% | 38.2% |
| Net Income | -3 | -5 | -4 | 2 | | | | | |
Balance Sheet
|
|---|
| Cash | 33 | 19 | 16 | 17 | | 67.4% | -66.8% | -69.6% | -25.0% |
| Short Term Debt | 3 | 3 | 4 | 7 | | 22.2% | -10.3% | 154.6% | 93.3% |
| Long Term Debt | 157 | 156 | 154 | 274 | | 187.4% | 127.1% | 71.0% | 151.5% |
Ratios
|
|---|
| Gross Margin | 66.3% | 69.8% | 67.5% | 66.8% | | 0.2% | 4.2% | 2.4% | 0.9% |
| EBITDA Margin | 11.7% | 12.1% | 15.4% | 4.3% | | 17.6% | 12.8% | 12.6% | -0.8% |
| Net Income Margin | -10.0% | -14.5% | -11.4% | 4.0% | | 17.1% | 10.4% | 2.0% | 17.6% |
Peers in Application Software
Below you can find Upland Software, Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| nFusz Inc ($FUSZ) | | | | | 433.3% |
| CloudCommerce Inc ($CLWD) | | -38.1% | 247.6% | 40.9% | 301.1% |
| Seven Stars Cloud Group, Inc. ($SSC) | | 134.7% | 663.8% | 310.3% | 161.7% |
| Aurora Mobile Limited ($JG) | | | | 304.9% | 150.8% |
| Intelligent Systems Corporation ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 14.0% | 14.3% | 14.8% | 15.2% |
|---|
| Upland Software, Inc. ($UPLD) | | 8.3% | 6.9% | 31.0% | 53.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Skkynet Cloud Systems Inc ($SKKY) | 99.7% | 97.4% | 98.0% | 97.6% | 96.5% |
| hopTo Inc ($HPTO) | 91.8% | 87.8% | 95.9% | 98.2% | 95.4% |
| Aware, Inc. ($AWRE) | 75.4% | 87.2% | 90.3% | 94.6% | 92.3% |
| Alteryx, Inc. ($AYX) | 77.5% | 80.5% | 81.3% | 83.4% | 91.0% |
| Aspen Technology, Inc. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 62.8% | 61.7% | 64.2% | 64.4% | 65.7% |
|---|
| Upland Software, Inc. ($UPLD) | 64.2% | 61.9% | 63.1% | 65.6% | 67.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aspen Technology, Inc. ($AZPN) | 34.5% | 42.2% | 46.0% | 45.2% | 43.3% |
| ANSYS, Inc. ($ANSS) | 45.9% | 45.8% | 45.1% | 41.9% | 41.4% |
| Paycom Software, Inc. ($PAYC) | 15.1% | 19.5% | 35.1% | 34.4% | 35.9% |
| j2 Global, Inc. ($JCOM) | 41.6% | 40.6% | 41.7% | 36.5% | 35.7% |
| Adobe Inc. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.1% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| Upland Software, Inc. ($UPLD) | -16.9% | -2.5% | 1.7% | 0.8% | 10.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($TFVR) | 0.0% | 350.5% | 4.3% | | 1,021.9% |
| MGT Capital Investments Inc ($MGTI) | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% |
| Integrated Ventures Inc ($INTV) | | | | | 199.9% |
| ShotSpotter, Inc. ($SSTI) | | 18.3% | 28.9% | 27.1% | 24.3% |
| Ellie Mae, Inc. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| Upland Software, Inc. ($UPLD) | 1.3% | 1.4% | 0.9% | 0.4% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InsPro Technologies Corp ($ITCC) | -558.9% | | | | 127.4% |
| Manhattan Associates, Inc. ($MANH) | 64.8% | 78.7% | 99.3% | 102.5% | 80.9% |
| Intuit Inc. ($INTU) | 34.2% | 23.7% | 52.1% | 72.6% | 66.8% |
| Aspen Technology, Inc. ($AZPN) | 133.4% | | | | 58.1% |
| Paycom Software, Inc. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.2% | -13.1% | -9.8% | -11.8% | -10.4% |
|---|
| Upland Software, Inc. ($UPLD) | -23.2% | -11.2% | -8.7% | -7.1% | -2.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Nuance Communications, Inc. ($NUAN) | 7.9x | 5.7x | 5.3x | 7.1x | 15.2x |
| Asure Software Inc ($ASUR) | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x |
| SS&C Technologies Holdings, Inc. ($SSNC) | 1.7x | 7.3x | 4.6x | 3.1x | 8.5x |
| Avaya Holdings Corp. ($AVYA) | | | | | 7.4x |
| Five9, Inc. ($FIVN) | | | -6.7x | -8.6x | 7.3x |
| |
|---|
| Median (69 companies) | -1.4x | -1.0x | -0.9x | -0.9x | -0.7x |
|---|
| Upland Software, Inc. ($UPLD) | | | 16.4x | 115.6x | 16.7x |
