What Happened?

Shares of business automation software provider Upland Software (NASDAQ: UPLD) jumped 24.9% in the morning session after the company reported strong third quarter earnings. Upland beat analysts' EBITDA expectations. While sales were in line during the quarter, next quarter's revenue guidance implied a more modest decline and came in higher than Wall Street's estimates. The company is also demonstrating strengths on the AI front, following the announcement of the Upland BA Insight for Microsoft Azure AI Search to help customers efficiently sort through their data. It is still too early to tell how UPLD's AI bets will play out, but the updates suggest the company is headed in the right direction. Overall, this quarter was solid, and the market is focused on positive aspects such as guidance.

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What The Market Is Telling Us

Upland’s shares are extremely volatile and have had 69 moves greater than 5% over the last year. But moves this big are rare even for Upland and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 6 months ago when the stock gained 72.8% on the news that the company reported first quarter results with strong gross margin improvement. Its revenue and EPS also outperformed Wall Street's estimates. 

On the other hand, its revenue guidance for the next quarter missed analysts' expectations. Zooming out, we think this was a strong quarter showing that the company is staying on track.

Upland is down 38.9% since the beginning of the year, and at $2.59 per share, it is trading 48.1% below its 52-week high of $4.98 from December 2023. Investors who bought $1,000 worth of Upland’s shares 5 years ago would now be looking at an investment worth $73.84.

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