What happened

Shares of Upland Software (NASDAQ:UPLD) have dropped today, down by 11% as of 1:10 p.m. EST, after the company reported third-quarter earnings. The enterprise software specialist missed expectations for both top and bottom lines.

So what

Revenue in the third quarter came in at $55.1 million, just shy of the $55.4 million in sales that analysts were modeling for. That resulted in adjusted net income of $13.2 million, or $0.52 per share, which was below the $0.57 per share in profits that investors were expecting. Adjusted EBITDA was $20.7 million, and Upland said it closed a new $410 million credit agreement that it plans to use to fund future growth, which could include potential acquisitions.

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Image source: Getty Images.

"Q3 was a record quarter with strong revenue growth, record Adjusted EBITDA, and a host of innovative product releases," CEO Jack McDonald said in a statement. "In addition, since the end of Q2, we have closed three strategic and accretive acquisitions that have taken Upland to a $259 million revenue run-rate and a $99 million Adjusted EBITDA run-rate."

Now what

In terms of outlook, Upland expects fourth-quarter revenue to be in the range of $61.2 million to $64.2 million, compared to the consensus estimate of $62.7 million. Subscription revenue should represent $57.6 million to $60 million of that top-line forecast. Adjusted EBITDA in the fourth quarter should be $23.4 million to $24.8 million.

Upland is working on more acquisitions, with McDonald adding, "Our M&A pipeline is robust, we are actively pursuing additional strategic acquisition opportunities, and as our strong Q4 and full year guidance reflects, we are looking forward to a strong end to the year."

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