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Last year, I questioned whether Upland was preparing for an M&A, given its sluggish growth, lack of clear product momentum, but high gross margins. I still have no clarity on that front.
This year, Upland beat Q4 guidance and projects 2.5% core organic growth in 2025—a turnaround from the -1% average in 2024. Adjusted EBITDA margins are on track to rise from 20% to 24% in 2025. The company is also aggressively paying down debt, with $33 million already reduced in 2025 on top of $189 million in 2024.
But the big question remains: Where is this going?
Disclaimer: This is not stock advice. Everything about the messaging business interests me, including asset pricing. Use your judgment to invest your money.
The Good
Incremental Progress in Growth and Profitability
Upland added 110 new customers in Q4, including 21 major ones, and expanded relationships with 291 existing customers. Net dollar retention improved slightly to 96% from 95% last year—still below the 100%-plus typical of enterprise software.
Revenue guidance for 2025 includes 2.5% core organic growth, better than the -1% average in 2024, though not enough to mark a major turnaround. Adjusted EBITDA margins are expected to rise from 20% to 24%, alongside continued debt reduction. After cutting $189 million in 2024, Upland has already paid down $33 million in early 2025 and plans to continue reducing debt by up to $2 million per month. Debt eats equity, so this is a smart move.
AI Is Becoming a Bigger Part of the Story
Upland has rolled out AI features across 80% of its core content and knowledge management products. It also landed a $5 million ARR deal with a major tech company for AI Assist—an encouraging sign that AI is contributing to sales.
The Interesting
Portfolio Cleanup Continues
Upland sold off two non-strategic, underperforming product lines, reducing 2025 revenue guidance by $18 million. The company says these products weren’t contributing margin (see sidebar), so selling them simplifies execution and improves core growth metrics. This is good management discipline: Low-margin products add bloat without creating real value—like junk food that fills you up but slows you down.
Where’s the Clear Product Strategy?
Upland has talked up its AI push, its Center of Excellence in India, and various product accolades. But none of it has yet resulted in a true breakout product or a clear product-led growth strategy.
Twilio, Bandwidth, and Sinch are all executing their “Act II” strategies—leveraging AI, expanding into new product categories, and finding real traction in new revenue streams. Even LINKMobility has a defined playbook with its Consensus-style operating model. Upland is yet to share such Act II clarity.
Sidebar: Using Margins to Measure Product Maturity
Years ago on OpenView’s blog, I detailed how gross and contribution margins unearth a product’s profitability:
- Using Gross Margin to Score Your Product’s Maturity
- SaaS Contribution Margin: Discover Where Your Money Maker Lies
The Unknown
Can Upland Break Out of Its Holding Pattern?
Does 2.5% growth really count as momentum? The company needs consistent acceleration toward mid-single-digit growth to prove it’s not just treading water.
Retention is improving, but it risks being seen as just a cost-cutting operation with AI features bolted on.
Is an M&A Exit Still on the Table?
Last year, I wondered if Upland was setting itself up for an acquisition. It has cut costs, paid down debt, and streamlined its portfolio—moves that make it a more attractive target.
So is it turning itself into a viable long-term business—or just making itself easier to buy?
Finally
Upland has made incremental improvements. Growth is no longer negative, AI is making its way into deals, and debt is coming down.
But there’s still no clear Act II. The company needs more than just AI product enhancements and debt reduction. It needs real, scalable growth drivers. It’s showing good financial discipline; what’s needed is revenue acceleration.