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This week’s results delivered two very different messaging narratives: LINK is doubling down on RCS and OTT, while Upland has officially exited messaging. Upland is recentering as a vertical SaaS player. LINK is leaning into richer channels and making the case that margin expansion, not message count, may be the new North Star.
Even though Upland is now off the list because of the divestiture, we’ll still discuss it if only to look at its messaging roots..
The Good
LINK reported 9% organic gross profit growth and 18% adjusted EBITDA growth in fixed currency. EBITDA margin climbed to 12%, up 2.5 points from last year.
RCS and WhatsApp are no longer experiments. OTT traffic grew 130% YoY. RCS volume is up 45% over the past twelve months (TTM), hitting 119 million messages. CPaaS deals involving bots, marketing automation, and rich media brought in NOK 15M ($1.43M) in new gross profit.
Churn held at 1.5%, and net dollar retention is expected to recover in the second half of the year. New contracts totaled NOK 42M ($4M), with seventeen of them RCS-heavy.
Upland has exited the messaging business. The post-Q1 sale of its mobile messaging lines cut $25M in revenue guidance but didn’t touch EBITDA. What remains is leaner and more profitable. Core NRR will rise to 99%, and EBITDA margins are set to climb to 26% in Q2.
This is revelatory.
You cut $25M from your top line, and yet it doesn’t affect EBITDA. This means it didn’t touch your gross margin or contribution margin. And your NRR goes up? That tells me the messaging business had been in decline for a while. Notwithstanding its roots as Waterfall Software (see sidebar), whatever remained was the revenue equivalent of junk food. Sure, it brought in money, but very little value.
In that light, Upland’s EPS beat ($0.23 vs. $0.17) looks impressive. It’s projecting 2% organic growth in Q2, added 107 new customers, and expanded across 245 existing ones.
Sidebar: Waterfall Software a.k.a. Upland’s Messaging Business
Before there was Attentive for enterprise SMS marketing, there was Waterfall.
Based in Los Angeles, Waterfall helped brands run sophisticated SMS and MMS campaigns before mobile messaging was cool—or even particularly functional. It served political campaigns, retail brands, and anyone brave enough to invest in mobile marketing back when it still meant shortcode setup delays and frequent carrier audits.
The company had the bones of a category leader. But like many early players, it came before the market was ready. Acquired by Upland in 2017, Waterfall was folded into a larger portfolio and quietly lost its name.
This recent sale marks the final chapter. What started with ambition now ends with a line item. No press release. No farewell tour. Just a reminder that timing, not talent, usually decides how the story ends.
And for what it’s worth, Upland sold the business for the same amount it paid eight years ago. A full circle, if not exactly a win.
The Interesting
LINK is seeing real use-case traction. WhatsApp volumes in logistics—order updates, payment prompts, NPS surveys—scaled from 2.5 million to 50 million in a year. iOS 18’s rollout of RCS is expected to unlock even broader demand in the coming quarters.
The company closed two more UK acquisitions, adding 3,600 clients and pushing its market share to 8%. The expanded footprint gives LINK pricing power with operators and new upsell opportunities across its CPaaS suite.
Upland, meanwhile, is tightening operations. No chief sales officer. A centralized dev hub in India. GMs aligned to product lines. It has reshaped into a vertical software operator with a private equity-style cost structure and focus.
That discipline allowed Upland to pay down $34M in debt this quarter. NRR is up, product marketing is sharper, and it’s aiming to turn a flat-growth story into one with margin-led lift.
The Unknown
LINK’s revenue declined 7% organically, even as volumes rose 17%. That shows there still might be low-margin revenue hanging around. Net retention remains soft and needs time to reset after last year’s client exits.
LINK is executing on a margin-first play and loading up on conversational CPaaS, RCS, and WhatsApp. Upland has walked away from message volume entirely. Two very different answers to the same question: Can messaging still deliver durable returns?
Finally
Upland just became the first CPaaS-adjacent vendor to formally exit messaging. That’s a line in the sand: If the margin isn’t there, move on. LINK is doing the opposite: trying to shed bad traffic, loading up on OTT, and building around richer, higher-return channels.
The next phase of CPaaS won’t be about scale for scale’s sake. It’ll be about who can price, package, and defend value—message by message. The platforms that win won’t just deliver; they’ll retain.
Question: Who should take Upland’s place on the list? The only requirement is that it be in the CPaaS or CPaaS-adjacent space and be public. Perhaps RingCentral?
Disclaimer: This is not stock advice. Everything about the messaging business interests me, including asset pricing. Use your judgment to invest your money.