Upland Software, Inc. Net Debt / EBITDA dropped on 18.3x from 28.0x to 9.7x in 2020 and Debt showed almost no change
02/24/2021 • About Upland Software, Inc. (
$UPLD) • By InTwits
Upland Software, Inc. reported 2020 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: 2020 revenue growth was 31.1%, 5 year revenue CAGR was 33.1% at 2020 ROIC -2.9%
- EBITDA Margin is quite volatile: 10.0% in 2020, 5.8% in 2019, 10.5% in 2018, 0.8% in 2017, 1.7% in 2016
- Upland Software, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has unprofitable business model: ROIC is -2.9%
- It operates with high leverage: Net Debt/EBITDA is 9.7x while industry average is 18.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Upland Software, Inc.'s Revenue surged on 31.1%. Revenue growth showed slowdown in 20Q4 - it was 18.4% YoY. During 2016-2020 Revenue growth topped in 2018 at 53.0% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.9 pp from -0.50% to 8.4% in 2020.
Gross Margin decreased on 2.7 pp from 69.0% to 66.3% in 2020. During 2016-2020 Gross Margin topped in 2019 at 69.0%. SG&A as a % of Revenue increased slightly on 1.7 pp from 37.4% to 39.1% in 2020. During 2016-2020 SG&A as a % of Revenue bottomed in 2018 at 35.3% and was growing since that time.
Net Income margin increased on 2.8 pp from -20.4% to -17.6% in 2020.
Investments (CAPEX, working capital and M&A)
Upland Software, Inc.'s CAPEX/Revenue was 0.38% in 2020. The company showed almost no change in CAPEX/Revenue from 2017 to 2020. For the last three years the average CAPEX/Revenue was 0.49%.
Return on investment
The company operates at negative ROIC (-2.9%) and ROE (-19.7%). ROIC increased slightly on 1.3 pp from -4.3% to -2.9% in 2020. ROE jumped on 10.5 pp from -30.2% to -19.7% in 2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 9.7x and Debt / EBITDA is 18.2x. Net Debt / EBITDA dropped on 18.3x from 28.0x to 9.7x in 2020. Debt showed almost no change in 2020 while cash jumped on 42.9%.
Upland Software, Inc. has no short term refinancing risk: cash is higher than short term debt (3,852.5%).
Management team
Upland Software, Inc.'s CEO is John T Mcdonald "Jack". John T Mcdonald "Jack" has 10 years tenure with the company. Upland Software, Inc.'s CFO Michael D Hill "Mike" has spent 6 years with the company.
Financial and operational results
FY ended 12/31/2020
Upland Software, Inc. ($UPLD) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 74.8 | 98.0 | 149.9 | 222.6 | 291.8 | 31.1% |
| Gross Profit | 47.2 | 64.3 | 101.3 | 153.5 | 193.3 | 25.9% |
| SG&A | 30.4 | 38.6 | 53.0 | 83.2 | 114.1 | 37.1% |
| EBITDA | 1.3 | 0.8 | 15.8 | 12.8 | 29.2 | 127.9% |
| Net Income | -13.5 | -18.7 | -10.8 | -45.4 | -51.2 | |
Balance Sheet
|
|---|
| Cash | 28.8 | 22.3 | 16.7 | 175.0 | 250.0 | 42.9% |
| Short Term Debt | 3.8 | 3.4 | 6.6 | 5.8 | 6.5 | 11.9% |
| Long Term Debt | 45.7 | 108.8 | 273.7 | 527.8 | 526.8 | -0.2% |
Cash flow
|
|---|
| Capex | 0.7 | 0.4 | 0.9 | 1.0 | 1.1 | 7.1% |
Ratios
|
|---|
| Revenue growth | 6.9% | 31.0% | 53.0% | 48.5% | 31.1% | |
| EBITDA growth | -171.7% | -38.7% | 1,924.8% | -18.6% | 127.9% | |
|
|---|
| Gross Margin | 63.1% | 65.6% | 67.6% | 69.0% | 66.3% | -2.7% |
| EBITDA Margin | 1.7% | 0.8% | 10.5% | 5.8% | 10.0% | 4.3% |
| SG&A, % of revenue | 40.7% | 39.4% | 35.3% | 37.4% | 39.1% | 1.7% |
| Net Income Margin | -18.1% | -19.1% | -7.2% | -20.4% | -17.6% | 2.8% |
| CAPEX, % of revenue | 0.9% | 0.4% | 0.6% | 0.5% | 0.4% | -0.1% |
|
|---|
| ROIC | -8.7% | -7.1% | -2.0% | -4.3% | -2.9% | 1.3% |
| ROE | -22.7% | -24.9% | -12.1% | -30.2% | -19.7% | 10.5% |
| Net Debt/EBITDA | 16.4x | 115.6x | 16.7x | 28.0x | 9.7x | -18.3x |
Upland Software, Inc. ($UPLD) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 68 | 71 | 74 | 78 | | 40.3% | 34.5% | 34.7% | 18.4% |
| EBITDA | -4 | 5 | 9 | 13 | | -167.2% | 64.3% | 58.4% | - |
| Net Income | -20 | -14 | -11 | -6 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 99 | 88 | 233 | 250 | | 603.8% | -18.9% | 105.6% | 42.9% |
| Short Term Debt | 7 | 7 | 6 | 6 | | -21.1% | 143.6% | 38.2% | 11.9% |
| Long Term Debt | 533 | 531 | 529 | 527 | | 93.9% | 71.7% | 54.0% | -0.2% |
Ratios
|
|---|
| Gross Margin | 67.4% | 66.8% | 65.5% | 65.5% | | -2.1% | -1.9% | -4.2% | -2.6% |
| EBITDA Margin | -5.3% | 6.6% | 12.2% | 16.9% | | -16.3% | 1.2% | 1.8% | 18.6% |
| Net Income Margin | -29.5% | -19.9% | -15.2% | -7.2% | | -13.4% | -9.7% | 7.1% | 22.8% |
Peers in Application Software
Below we provide Upland Software, Inc. benchmarking against other companies in Application Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 14.8% | 15.1% | 19.4% | 14.5% |
|---|
| Upland Software, Inc. ($UPLD) | - | 31.0% | 53.0% | 48.5% | 31.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.4% | 65.3% | 67.9% | 70.6% |
|---|
| Upland Software, Inc. ($UPLD) | 63.1% | 65.6% | 67.6% | 69.0% | 66.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| Upland Software, Inc. ($UPLD) | 1.7% | 0.8% | 10.5% | 5.8% | 10.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| Upland Software, Inc. ($UPLD) | 0.9% | 0.4% | 0.6% | 0.5% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.4% | -1.8% |
|---|
| Upland Software, Inc. ($UPLD) | -8.7% | -7.1% | -2.0% | -4.3% | -2.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.9x | -0.7x | 0.4x | 0.0x |
|---|
| Upland Software, Inc. ($UPLD) | 16.4x | 115.6x | 16.7x | 28.0x | 9.7x |
