Upland Software generated $5.3 million of free cash flow during the second quarter of 2026, nearly double the $2.7 million generated a year earlier, even as reported revenue declined following a series of business divestitures completed in 2025.
Operating cash flow increased to $5.4 million from $3.3 million in the prior-year period. Quarterly cash generation improved despite total revenue declining 8% to $49.1 million from $53.4 million.
Upland attributed the revenue decline primarily to divestitures completed during 2025 rather than deterioration across the entire remaining business. Subscription and support revenue was $46.2 million, down 9% from $50.5 million a year earlier, also primarily because of the divested businesses.
Adjusted EBITDA reached $12.8 million, representing 26% of revenue, compared with $13.6 million and a 25% margin in Q2 2025. Although absolute adjusted EBITDA declined, adjusted EBITDA margin expanded by approximately one percentage point.
Non-GAAP net income increased 18% to $6.6 million from $5.6 million. GAAP results were affected by a large non-cash charge, with Upland reporting a $35.3 million net loss primarily because of a goodwill impairment recorded in June.
Customer activity remained substantial during the quarter. Upland added 81 new customers, including seven major customers, while expanding relationships with 200 existing customers. Nineteen of those expansions were classified as major.
Management is focusing the remaining portfolio more heavily around AI-powered knowledge and content management. Upland sees enterprise knowledge management shifting from systems designed primarily for human users toward infrastructure capable of serving and automating work for AI agents.
The company highlighted areas including agentic curation automation, knowledge as AI infrastructure and secure knowledge sharing. Its portfolio includes Upland RightAnswers and Panviva for AI-powered knowledge management, BA Insight for AI enablement and InterFAX as an AI-enabled cloud fax offering.
Upland ended Q2 with $31 million of cash. Management said its priorities include concentrating capital in markets where it believes the company can establish an AI advantage while continuing to deleverage the balance sheet.
For the third quarter, Upland expects revenue of $45.7 million to $48.7 million and adjusted EBITDA of $11.9 million to $13.4 million. The midpoint of adjusted EBITDA guidance implies a 27% margin.
For full-year 2026, revenue is expected to range from $190.1 million to $196.1 million, with the year-over-year decline primarily reflecting the 2025 divestitures. Adjusted EBITDA is expected at $49.8 million to $52.8 million, representing an approximately 27% margin at the midpoint, unchanged from the full-year 2025 margin.
KEY QUOTES:
“We are still in the early innings of building the company I described in my shareholder letter issued on July 28, 2026 – one that concentrates capital where we believe we can actually win and turns our AI advantage into both revenue growth and operating margin expansion.”
“Q2 gave us real proof points along that path. We exceeded the midpoints on both revenue and Adjusted EBITDA, added 81 new customers, and earned notable industry recognitions. While there is more work ahead, like sharpening our operating groups around the areas with the clearest AI land-grab opportunity and deleveraging the balance sheet, the groundwork being laid today is what the next chapter of Upland will be built on.”
Sean Nathaniel, President and Chief Executive Officer of Upland Software
