Upland Software Reports 24% Revenue Decline in Q3 2025, Net Loss Narrows

Upland Software, Inc. reported a significant decline in its financial performance for the third quarter of 2025, with total revenue of $50.5 million, down 24% from $66.7 million in the same period last year. The decrease was primarily attributed to expected declines in revenue from divested product lines, which accounted for a loss of $16.8 million, and a reduction of $0.5 million from Sunset Assets. Subscription and support revenue also fell by 25% to $47.7 million, while professional services revenue decreased by 10% to $1.6 million. For the nine months ended September 30, 2025, total revenue was $167.6 million, a 19% decrease from $206.8 million in the prior year.

The company's gross profit for the third quarter was $38.8 million, representing a gross margin of 77%, compared to 70% in the same quarter of 2024. This improvement in gross margin was driven by a reduction in the cost of revenue, which decreased by 41% to $11.7 million, largely due to lower costs associated with divested product lines. Operating expenses also saw a significant reduction, totaling $33.5 million, down from $50.3 million in the previous year, reflecting cost-cutting measures and a focus on core operations. Upland reported an income from operations of $5.3 million, a notable turnaround from a loss of $3.3 million in the same quarter last year.

Upland's net loss for the third quarter was $1.1 million, or $(0.09) per share, compared to a net loss of $1.7 million, or $(0.12) per share, in the prior year. The company attributed the improved performance to strategic divestitures and a focus on higher-margin products. However, the nine-month results showed a net loss of $40.0 million, significantly lower than the $109.3 million loss reported for the same period in 2024. The company also incurred a loss on divestitures of $24.4 million during the nine months, reflecting its ongoing restructuring efforts.

In terms of operational metrics, Upland's customer base remains strong, with over 1,100 enterprise customers utilizing its AI-powered knowledge and content management solutions. The company has also made strategic changes, including the divestiture of certain product lines to focus on higher growth potential areas. As of September 30, 2025, Upland had $23.4 million in cash and cash equivalents, a decrease from $57.1 million at the end of 2024, primarily due to debt repayments and operational expenditures.

Looking ahead, Upland Software anticipates continued challenges in revenue generation due to the impact of divestitures and market conditions. However, the company remains optimistic about its core product offerings and the potential for growth in AI-driven solutions. Upland plans to leverage its existing customer relationships and expand its market presence while managing costs effectively to improve profitability in the coming quarters.