PRO Pros Holding Inc

• Total revenue of $85.0 million in the fourth quarter, up 10% year-over-year.
• Subscription revenue of $69.3 million in the fourth quarter, up 14% year-over-year.
• Subscription gross margin of 79% and non-GAAP subscription gross margin of 81% in the fourth quarter, an improvement of more than 270 basis points year-over-year.
• Operating cash flow of $24.0 million in the fourth quarter, up 73% year-over-year.

PROS Holdings, Inc. (NYSE: PRO), a leading provider of AI-powered SaaS pricing and selling solutions, today announced financial results for the fourth quarter and full year ended December 31, 2024.

“I’m incredibly proud of our team for finishing the year strong – in 2024, we achieved 14% subscription revenue growth, delivered a 400% improvement in adjusted EBITDA, won exceptional new customers, and deepened our relationships across our expanding customer base,” stated CEO Andres Reiner. “These results, combined with being ranked a Leader in every key industry analyst evaluation specific to our solutions, highlight our market momentum and position us for continued growth in 2025 and beyond.”

Fourth Quarter and Full Year 2024 Financial Highlights

Key financial results for the fourth quarter and full year 2024 are shown below. Throughout this press release all dollar figures are in millions, except net earnings (loss) per share. Unless otherwise noted, all results are on a reported basis and are compared with the prior-year period.

 

GAAP

 

Non-GAAP

 

Q4 2024

 

Q4 2023

 

Change

 

Q4 2024

 

Q4 2023

 

Change

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

$

85.0

 

 

$

77.5

 

 

 

10

%

 

 

n/a

 

 

n/a

 

 

n/a

 

Subscription Revenue

$

69.3

 

 

$

60.8

 

 

 

14

%

 

 

n/a

 

 

n/a

 

 

n/a

 

Subscription and Maintenance Revenue

$

72.4

 

 

$

65.2

 

 

 

11

%

 

 

n/a

 

 

n/a

 

 

n/a

 

Profitability:

 

 

 

 

Gross Profit

$

57.6

 

 

$

48.7

 

 

 

18

%

 

$

59.4

 

$

50.8

 

 

17

%

Operating (Loss) Income

$

(1.6

)

 

$

(10.6

)

 

$

9.0

 

 

$

9.9

 

$

1.5

 

 

580

%

Net (Loss) Income

$

(2.0

)

 

$

(10.2

)

 

$

8.2

 

 

$

7.5

 

$

1.1

 

 

608

%

Net (Loss) Earnings Per Share

$

(0.04

)

 

$

(0.22

)

 

$

0.18

 

 

$

0.16

 

$

0.02

 

$

0.14

 

Adjusted EBITDA

 

n/a

 

 

 

n/a

 

 

 

n/a

 

 

$

10.9

 

$

2.5

 

 

333

%

Cash:

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by Operating Activities

$

24.0

 

 

$

13.8

 

 

 

73

%

 

 

n/a

 

 

n/a

 

 

n/a

 

Free Cash Flow

 

n/a

 

 

 

n/a

 

 

 

n/a

 

 

$

23.5

 

$

13.6

 

 

73

%

 

GAAP

 

Non-GAAP

 

FY 2024

 

FY 2023

 

Change

 

FY 2024

 

FY 2023

 

Change

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

$

330.4

 

 

$

303.7

 

 

 

9

%

 

 

n/a

 

 

n/a

 

 

n/a

 

Subscription Revenue

$

266.3

 

 

$

234.0

 

 

 

14

%

 

 

n/a

 

 

n/a

 

 

n/a

 

Subscription and Maintenance Revenue

$

279.8

 

 

$

254.0

 

 

 

10

%

 

 

n/a

 

 

n/a

 

 

n/a

 

Subscription Annual Recurring Revenue ("ARR")

 

n/a

 

 

 

n/a

 

 

 

n/a

 

 

$

281.5

 

$

259.0

 

 

9

%

Subscription ARR in constant currency

 

n/a

 

 

 

n/a

 

 

 

n/a

 

 

$

283.7

 

$

259.0

 

 

10

%

Profitability:

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

$

217.0

 

 

$

188.4

 

 

 

15

%

 

$

224.9

 

$

197.7

 

 

14

%

Operating (Loss) Income

$

(19.0

)

 

$

(50.6

)

 

$

31.6

 

 

$

26.4

 

$

1.5

 

 

1,641

%

Net (Loss) Income

$

(20.5

)

 

$

(56.4

)

 

$

35.9

 

 

$

19.3

 

$

2.2

 

 

761

%

Net (Loss) Earnings Per Share

$

(0.43

)

 

$

(1.22

)

 

$

0.79

 

 

$

0.41

 

$

0.05

 

$

0.36

 

Adjusted EBITDA

 

n/a

 

 

 

n/a

 

 

 

n/a

 

 

$

30.0

 

$

6.0

 

 

400

%

Cash:

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by Operating Activities

$

27.4

 

 

$

9.9

 

 

 

177

%

 

 

n/a

 

 

n/a

 

 

n/a

 

Free Cash Flow

 

n/a

 

 

 

n/a

 

 

 

n/a

 

 

$

26.2

 

$

11.4

 

 

130

%

The attached table provides a summary of PROS results for the period, including a reconciliation of GAAP to non-GAAP metrics.

Recent Business Highlights

• Welcomed many new customers who are adopting the PROS Platform such as Arco, BradyPLUS, Cooper Machinery, Fastjet, HBK, Pipeline Packaging, and Werner Electric, among others.
• Expanded adoption of the PROS Platform within existing customers including Adobe, Air Canada, Averitt, BASF, Flydubai, Henkel, Hertz, Holcim, Lufthansa Group, and Manitou, among others.
• Earned recognition as a Leader in the 2025 Gartner® Magic Quadrant™ for Configure, Price, and Quote (CPQ) Applications for the third time, achieving PROS highest leadership ranking in the evaluation to date, a testament to PROS leadership in innovation and expanding market presence.
• Received the Leader designation in the IDC MarketScape: Worldwide Configure Price Quote (CPQ) Applications for Commerce 2024-2025, in recognition of PROS AI-driven innovations including our advanced pricing capabilities and seamless ecosystem integrations.
• Received the IDC 2024 CX CPQ Customer Satisfaction Award, ranking among the highest in a survey from 2,500 organizations globally across approximately 40 customer satisfaction metrics, with recognition for ease of implementation and user experience.
• Released over 560 new features in the PROS Platform in 2024 that drove new customer acquisition and customer expansion throughout the year, including new solutions such as Smart Rebate Management and generative AI-powered Fare Finder Genie.
• Processed 4.4 trillion transactions in our platform in 2024, a 29% increase in volume year-over-year, underscoring the PROS Platform's significant market value and increasing customer adoption.

Financial Outlook

PROS currently anticipates the following based on an estimated 47.9 million diluted weighted average shares outstanding for the first quarter of 2025 and a 22% non-GAAP estimated tax rate for the first quarter and full year 2025.

 

Q1 2025 Guidance

 

v. Q1 2024 at Mid-Point

 

Full Year 2025 Guidance

 

v. Prior Year at Mid-Point

Total Revenue

$85.0 to $86.0

 

6%

 

$360.0 to $362.0

 

9%

Subscription Revenue

$70.25 to $70.75

 

10%

 

$294.0 to $296.0

 

11%

Subscription ARR

n/a

 

n/a

 

$308.0 to $311.0

 

10%

Non-GAAP Earnings Per Share

$0.10 to $0.12

 

$0.07

 

n/a

 

n/a

Adjusted EBITDA

$7.5 to $8.5

 

74%

 

$42.0 to $44.0

 

43%

Free Cash Flow

n/a

 

n/a

 

$40.0 to $44.0

 

61%

Conference Call

In conjunction with this announcement, PROS Holdings, Inc. will host a conference call on Thursday, February 6, 2025, at 4:45 p.m. ET to discuss the Company’s financial results and business outlook. To access this call, dial 1-877-407-9039 (toll-free) or 1-201-689-8470. The live and archived webcasts of this call can be accessed under the “Investor Relations” section of the Company’s website at www.pros.com.

A telephone replay will be available until Thursday, February 13, 2025, 11:59 PM ET at 1-844-512-2921 (toll-free) or 1-412-317-6671 using the pass code 13750860.

About PROS

PROS Holdings, Inc. (NYSE: PRO) is a leading provider of AI-powered SaaS pricing and selling solutions. Our vision is to optimize every shopping and selling experience. With 40 years of industry expertise and a proven track record of success, PROS helps B2B and B2C companies across the globe, in a variety of industries, including airlines, manufacturing, distribution, and services, drive profitable growth. The PROS Platform leverages AI to provide real-time predictive insights that enable businesses to drive revenue and margin improvements. To learn more about PROS and our innovative SaaS solutions, please visit our website at www.pros.com.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our financial outlook; expectations; ability to achieve future growth and profitability goals; management's confidence and optimism; positioning; customer successes; demand for our software solutions; pipeline; business expansion; revenue; subscription revenue; subscription ARR; non-GAAP earnings (loss) per share; adjusted EBITDA; free cash flow; shares outstanding and effective tax rate. The forward-looking statements contained in this press release are based upon our historical performance and our current plans, estimates and expectations and are not a representation that such plans, estimates or expectations will be achieved. Factors that could cause actual results to differ materially from those described herein include, among others, risks related to: (a) cyberattacks, data breaches and breaches of security measures within our products, systems and infrastructure or products, systems and infrastructure of third parties upon whom we rely, (b) the macroeconomic environment and geopolitical uncertainty and events, (c) increasing business from customers, maintaining subscription renewal rates and capturing customer IT spend, (d) managing our growth and profit objectives effectively, (e) disruptions from our third party data center, software, data, and other unrelated service providers, (f) implementing our solutions, (g) cloud operations, (h) intellectual property and third-party software, (i) acquiring and integrating businesses and/or technologies, (j) catastrophic events, (k) operating globally, including economic and commercial disruptions, (l) potential downturns in sales and lengthy sales cycles, (m) software innovation, (n) competition, (o) market acceptance of our software innovations, (p) maintaining our corporate culture, (q) personnel risks including loss of any key employees and competition for talent, (r) expanding and training our direct and indirect sales force, (s) evolving data privacy, cyber security, data localization and AI laws, (t) the rapid adoption, evolution, and understanding of AI, (u) our debt repayment obligations, (v) the timing of revenue recognition and cash flow from operations, and (w) returning to profitability. Additional information relating to the risks and uncertainties affecting our business is contained in our filings with the SEC. These forward-looking statements represent our expectations as of the date hereof. Subsequent events may cause these expectations to change, and PROS disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

PROS has provided in this release certain non-GAAP financial measures, including non-GAAP gross profit and margin, non-GAAP subscription margin, non-GAAP income (loss) from operations or non-GAAP operating income (loss), subscription annual recurring revenue, adjusted EBITDA, free cash flow, non-GAAP tax rate, non-GAAP net income (loss), and non-GAAP earnings (loss) per share. PROS uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating PROS ongoing operational performance and cloud transition. Non-GAAP gross margin can be compared to gross margin which can be calculated from the condensed consolidated statements of income (loss) by dividing gross profit by total revenue. Non-GAAP gross margin is similarly calculated but first adds back to gross profit the portion of certain of the non-GAAP adjustments described below attributable to cost of revenue. Non-GAAP subscription margin can be compared to subscription margin which can be calculated from the condensed consolidated statements of income (loss) by dividing subscription gross profit (subscription revenue minus subscription cost) by subscription revenue. Non-GAAP subscription margin is similarly calculated but first subtracts out from subscription cost the portion of certain of the non-GAAP adjustments described below attributable to cost of subscription. These items and amounts are presented in the Supplemental Schedule of Non-GAAP Financial Measures.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure as detailed above. A reconciliation of GAAP financial measures to the non-GAAP financial measures has been provided in the tables included as part of this press release, and can be found, along with other financial information, in the investor relations portion of our website. PROS use of non-GAAP financial measures may not be consistent with the presentations by similar companies in PROS industry. PROS has also provided in this release certain forward-looking non-GAAP financial measures, including non-GAAP income (loss) from operations, subscription annual recurring revenue, non-GAAP earnings (loss) per share, adjusted EBITDA, free cash flow, non-GAAP tax rates, and calculated billings (collectively the "non-GAAP financial measures") as follows:

Non-GAAP income (loss) from operations: Non-GAAP income (loss) from operations excludes the impact of share-based compensation, amortization of acquisition-related intangibles and severance. Non-GAAP income (loss) from operations excludes the following items from non-GAAP estimates:

• Share-Based Compensation: Although share-based compensation is an important aspect of compensation for our employees and executives, our share-based compensation expense can vary because of changes in our stock price and market conditions at the time of grant, varying valuation methodologies, and the variety of award types. Since share-based compensation expense can vary for reasons that are generally unrelated to our performance during any particular period, we believe this could make it difficult for investors to compare our current financial results to previous and future periods. Therefore, we believe it is useful to exclude share-based compensation in order to better understand our business performance and allow investors to compare our operating results with peer companies.
• Amortization of Acquisition-Related Intangibles: We view amortization of acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company's research and development efforts, trade names, customer lists and customer relationships, as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangibles is a static expense, one that is not typically affected by operations during any particular period.
• Severance: Severance related to costs incurred as the Company reprioritized its investments to focus on supporting key growth areas of its business. As a result of this reprioritization, the Company incurred severance, employee benefits, outplacement and related costs. These amounts are unrelated to our core performance during any particular period, and therefore, we believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.

Non-GAAP earnings (loss) per share: Non-GAAP net income (loss) excludes the items listed above as excluded from non-GAAP income (loss) from operations and also excludes amortization of debt premium and issuance costs, (gain) loss on equity investments, net, loss on derivatives, loss on debt extinguishment and the taxes related to these items and the items excluded from non-GAAP income (loss) from operations. Estimates of non-GAAP earnings (loss) per share are calculated by dividing estimates for non-GAAP net income (loss) by our estimate of weighted average shares outstanding for the future period. In addition to the items listed above as excluded from non-GAAP income (loss) from operations, non-GAAP net income (loss) excludes the following items from non-GAAP estimates:

• Amortization of Debt Premium and Issuance Costs: Amortization of debt premium and issuance costs are related to our convertible notes. These amounts are unrelated to our core performance during any particular period, and therefore, we believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.
• (Gain) Loss on Equity Investments, net: (Gain) loss on equity investments, net relate to observable price changes for equity investments without a readily determinable fair value identified during the quarter ended December 31, 2023, including other-than temporary loss. These amounts are unrelated to our core performance during any particular period, and therefore, we believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.
• Loss on Derivatives: Loss on derivatives relates to mark to market features identified as part of the exchange of certain of our convertible notes (the "Exchange") and related capped call, non-recurring transactions, during the quarter ended September 30, 2023. These amounts are unrelated to our core performance during any particular period, and therefore, we believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.
• Loss on Debt Extinguishment: Loss on debt extinguishment relates to the Exchange, a non-recurring transaction, during the quarter ended September 30, 2023. These amounts are unrelated to our core performance during any particular period, and therefore, we believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.
• Taxes: We exclude the tax consequences associated with non-GAAP items to provide investors with a useful comparison of our operating results to prior periods and to our peer companies because such amounts can vary significantly. In the fourth quarter of 2014, we concluded that it is more likely than not that we will be unable to fully realize our deferred tax assets and accordingly, established a valuation allowance against those assets. The ongoing impact of the valuation allowance on our non-GAAP effective tax rate has been eliminated to allow investors to better understand our business performance and compare our operating results with peer companies.

Subscription Annual Recurring Revenue: Subscription Annual Recurring Revenue ("subscription ARR") is used to assess the trajectory of our cloud business. Subscription ARR means, as of a specified date, the contracted subscription revenue, including contracts with a future start date, together with annualized overage fees incurred above contracted minimum transactions. Subscription ARR should be viewed independently of revenue and any other GAAP measure.

Non-GAAP Tax Rate: The estimated non-GAAP effective tax rate adjusts the tax effect to quantify the impact of the excluded non-GAAP items.

Adjusted EBITDA: Adjusted EBITDA is defined as GAAP net income (loss) before interest expense, provision for income taxes, depreciation and amortization, as adjusted to eliminate the effect of stock-based compensation cost, severance, amortization of acquisition-related intangibles, depreciation and amortization, and capitalized internal-use software development costs. Adjusted EBITDA should not be considered as an alternative to net income (loss) as an indicator of our operating performance.

Free Cash Flow: Free cash flow is a non-GAAP financial measure which is defined as net cash provided by (used in) operating activities, excluding severance payments, less capital expenditures and capitalized internal-use software development costs.

Calculated Billings: Calculated billings is defined as total subscription, maintenance and support revenue plus the change in recurring deferred revenue in a given period.

These non-GAAP estimates are not measurements of financial performance prepared in accordance with GAAP, and we are unable to reconcile these forward-looking non-GAAP financial measures to their directly comparable GAAP financial measures because the information described above which is needed to complete a reconciliation is unavailable at this time without unreasonable effort.

 

PROS Holdings, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

December 31, 2024

 

December 31, 2023

Assets:

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

161,983

 

 

$

168,747

 

Trade and other receivables, net of allowance of $922 and $574, respectively

 

 

64,982

 

 

 

49,058

 

Deferred costs, current

 

 

4,634

 

 

 

4,856

 

Prepaid and other current assets

 

 

7,517

 

 

 

12,013

 

Total current assets

 

 

239,116

 

 

 

234,674

 

Restricted cash

 

 

10,000

 

 

 

10,000

 

Property and equipment, net

 

 

19,745

 

 

 

23,051

 

Operating lease right-of-use assets

 

 

16,066

 

 

 

14,801

 

Deferred costs, noncurrent

 

 

11,515

 

 

 

10,292

 

Intangibles, net

 

 

7,044

 

 

 

11,678

 

Goodwill

 

 

107,278

 

 

 

107,860

 

Other assets, noncurrent

 

 

9,138

 

 

 

9,477

 

Total assets

 

$

419,902

 

 

$

421,833

 

Liabilities and Stockholders’ (Deficit) Equity:

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and other liabilities

 

$

8,589

 

 

$

3,034

 

Accrued liabilities

 

 

14,085

 

 

 

13,257

 

Accrued payroll and other employee benefits

 

 

27,117

 

 

 

32,762

 

Operating lease liabilities, current

 

 

6,227

 

 

 

5,655

 

Deferred revenue, current

 

 

130,977

 

 

 

120,955

 

Current portion of convertible debt, net

 

 

—

 

 

 

21,668

 

Total current liabilities

 

 

186,995

 

 

 

197,331

 

Deferred revenue, noncurrent

 

 

5,438

 

 

 

3,669

 

Convertible debt, net, noncurrent

 

 

270,797

 

 

 

272,324

 

Operating lease liabilities, noncurrent

 

 

23,870

 

 

 

25,118

 

Other liabilities, noncurrent

 

 

1,505

 

 

 

1,264

 

Total liabilities

 

 

488,605

 

499,706

 

Stockholders' (deficit) equity:

 

 

 

Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued

 

 

—

 

 

—

 

Common stock, $0.001 par value, 75,000,000 shares authorized; 52,083,732

and 51,184,584 shares issued, respectively; 47,403,009 and 46,503,861 shares outstanding, respectively

 

 

52

 

 

 

51

 

Additional paid-in capital

 

 

634,212

 

 

604,084

 

Treasury stock, 4,680,723 common shares, at cost

 

 

(29,847

)

 

(29,847

)

Accumulated deficit

 

 

(667,727

)

 

(647,252

)

Accumulated other comprehensive loss

 

 

(5,393

)

 

 

(4,909

)

Total stockholders’ (deficit) equity

 

 

(68,703

)

 

 

(77,873

)

Total liabilities and stockholders’ (deficit) equity

$

419,902

$

421,833

PROS Holdings, Inc.

Condensed Consolidated Statements of Loss

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue:

 

 

 

 

 

 

 

 

Subscription

 

$

69,255

 

 

$

60,764

 

 

$

266,272

 

 

$

234,024

 

Maintenance and support

 

 

3,153

 

 

 

4,460

 

 

 

13,494

 

 

 

19,958

 

Total subscription, maintenance and support

 

 

72,408

 

 

 

65,224

 

 

 

279,766

 

 

 

253,982

 

Services

 

 

12,561

 

 

 

12,260

 

 

 

50,606

 

 

 

49,726

 

Total revenue

 

 

84,969

 

 

 

77,484

 

 

 

330,372

 

 

 

303,708

 

Cost of revenue:

 

 

 

 

 

 

 

 

Subscription

 

 

14,229

 

 

 

14,550

 

 

 

57,882

 

 

 

57,212

 

Maintenance and support

 

 

1,716

 

 

 

1,776

 

 

 

7,027

 

 

 

7,703

 

Total cost of subscription, maintenance and support

 

 

15,945

 

 

 

16,326

 

 

 

64,909

 

 

 

64,915

 

Services

 

 

11,434

 

 

 

12,410

 

 

 

48,420

 

 

 

50,398

 

Total cost of revenue

 

 

27,379

 

 

 

28,736

 

 

 

113,329

 

 

 

115,313

 

Gross profit

 

 

57,590

 

 

 

48,748

 

 

 

217,043

 

 

 

188,395

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling and marketing

 

 

21,755

 

 

 

21,175

 

 

 

88,048

 

 

 

92,389

 

Research and development

 

 

22,445

 

 

 

23,018

 

 

 

89,725

 

 

 

89,361

 

General and administrative

 

 

14,957

 

 

 

15,164

 

 

 

58,292

 

 

 

57,247

 

Loss from operations

 

 

(1,567

)

 

 

(10,609

)

 

 

(19,022

)

 

 

(50,602

)

Convertible debt interest and amortization

 

 

(1,125

)

 

 

(1,233

)

 

 

(4,596

)

 

 

(5,882

)

Other income, net

 

 

1,145

 

 

 

2,109

 

 

 

4,457

 

 

 

1,063

 

Loss before income tax provision

 

 

(1,547

)

 

 

(9,733

)

 

 

(19,161

)

 

 

(55,421

)

Income tax provision

 

 

420

 

 

 

462

 

 

 

1,314

 

 

 

933

 

Net loss

 

$

(1,967

)

 

$

(10,195

)

 

$

(20,475

)

 

$

(56,354

)

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.04

)

 

$

(0.22

)

 

$

(0.43

)

 

$

(1.22

)

Weighted average number of shares:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

47,349

 

 

 

46,370

 

 

 

47,116

 

 

 

46,155

 

PROS Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Operating activities:

 

 

 

 

 

 

 

Net loss

 

$

(1,967

)

 

$

(10,195

)

 

$

(20,475

)

 

$

(56,354

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,932

 

 

 

2,406

 

 

 

8,303

 

 

 

10,707

 

Amortization of debt premium and issuance costs

 

 

(307

)

 

 

(233

)

 

 

(1,203

)

 

 

861

 

Share-based compensation

 

 

10,535

 

 

 

10,768

 

 

 

40,754

 

 

 

42,357

 

Deferred income tax, net

 

 

(11

)

 

 

(63

)

 

 

(11

)

 

 

(63

)

Provision for credit losses

 

 

247

 

 

 

(107

)

 

 

299

 

 

 

(19

)

Gain on lease modification

 

 

—

 

 

 

—

 

 

 

(697

)

 

 

—

 

Loss on disposal of assets

 

 

10

 

 

 

6

 

 

 

784

 

 

 

57

 

(Gain) loss on equity investments, net

 

 

—

 

 

 

(828

)

 

 

—

 

 

 

(828

)

Loss on derivatives

 

 

—

 

 

 

146

 

 

 

—

 

 

 

4,489

 

Loss on debt extinguishment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,779

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Trade and other receivables

 

 

(16,999

)

 

 

674

 

 

 

(16,211

)

 

 

(899

)

Deferred costs

 

 

(1,011

)

 

 

(1,055

)

 

 

(1,001

)

 

 

(351

)

Prepaid expenses and other assets

 

 

3,741

 

 

 

(1,378

)

 

 

4,899

 

 

 

(1,347

)

Operating lease right-of-use assets and liabilities

 

 

(288

)

 

 

(1,100

)

 

 

(2,126

)

 

 

(2,786

)

Accounts payable and other liabilities

 

 

3,940

 

 

 

(1,664

)

 

 

6,131

 

 

 

(5,039

)

Accrued liabilities

 

 

711

 

 

 

(766

)

 

 

1,798

 

 

 

723

 

Accrued payroll and other employee benefits

 

 

4,243

 

 

 

9,192

 

 

 

(5,663

)

 

 

8,950

 

Deferred revenue

 

 

19,237

 

 

 

8,041

 

 

 

11,802

 

 

 

7,640

 

Net cash provided by operating activities

 

 

24,013

 

 

 

13,844

 

 

 

27,383

 

 

 

9,877

 

Investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(497

)

 

 

(375

)

 

 

(1,166

)

 

 

(2,543

)

Capitalized internal-use software development costs

 

 

—

 

 

 

(48

)

 

 

(58

)

 

 

(48

)

Investment in equity securities, net

 

 

118

 

 

 

—

 

 

 

5

 

 

 

(113

)

Net cash used in investing activities

 

 

(379

)

 

 

(423

)

 

 

(1,219

)

 

 

(2,704

)

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from employee stock plans

 

 

—

 

 

 

—

 

 

 

2,079

 

 

 

2,170

 

Tax withholding related to net share settlement of stock awards

 

 

(1,408

)

 

 

(2,468

)

 

 

(12,704

)

 

 

(9,299

)

Debt issuance costs related to convertible debt

 

 

—

 

 

 

(2,198

)

 

 

—

 

 

 

(2,198

)

Purchase of Capped Call

 

 

—

 

 

 

578

 

 

 

—

 

 

 

(22,193

)

Repayment of convertible debt

 

 

—

 

 

 

—

 

 

 

(21,713

)

 

 

—

 

Debt issuance costs related to Credit Agreement

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(837

)

Net cash used in financing activities

 

 

(1,408

)

 

 

(4,088

)

 

 

(32,338

)

 

 

(32,357

)

Effect of foreign currency rates on cash

 

 

(807

)

 

 

334

 

 

 

(590

)

 

 

304

 

Net change in cash, cash equivalents and restricted cash

 

 

21,419

 

 

 

9,667

 

 

 

(6,764

)

 

 

(24,880

)

Cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

Beginning of period

 

 

150,564

 

 

 

169,080

 

 

 

178,747

 

 

 

203,627

 

End of period

 

$

171,983

 

 

$

178,747

 

 

$

171,983

 

 

$

178,747

 

 

 

 

 

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

161,983

 

 

$

168,747

 

 

$

161,983

 

 

$

168,747

 

Restricted cash

 

 

10,000

 

 

 

10,000

 

 

 

10,000

 

 

 

10,000

 

Total cash, cash equivalents and restricted cash

 

$

171,983

 

 

$

178,747

 

 

$

171,983

 

 

$

178,747

 

PROS Holdings, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except per share data) (Unaudited)

We use these non-GAAP financial measures to assist in the management of the Company because we believe that this information provides a more consistent and complete understanding of the underlying results and trends of the ongoing business due to the uniqueness of these charges.

See breakdown of the reconciling line items on page 11.

Three Months Ended December 31,

 

Quarter over Quarter

 

Year Ended December 31,

 

Year over Year

 

2024

 

 

 

2023

 

 

% change

 

 

2024

 

 

 

2023

 

 

% change

GAAP gross profit

 

$

57,590

 

 

$

48,748

 

 

18

%

 

$

217,043

 

 

$

188,395

 

 

15

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

Amortization of acquisition-related intangibles

 

 

629

 

 

 

953

 

 

 

 

 

3,273

 

 

 

4,632

 

 

 

Severance

 

 

—

 

 

 

—

 

 

 

 

 

—

 

 

 

749

 

 

 

Share-based compensation

 

 

1,180

 

 

 

1,073

 

 

 

 

 

4,576

 

 

 

3,923

 

 

 

Non-GAAP gross profit

 

$

59,399

 

 

$

50,774

 

 

17

%

 

$

224,892

 

 

$

197,699

 

 

14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP gross margin

 

 

69.9

%

 

 

65.5

%

 

 

 

68.1

%

 

 

65.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP loss from operations

 

$

(1,567

)

 

$

(10,609

)

 

(85

)%

 

$

(19,022

)

 

$

(50,602

)

 

(62

)%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of acquisition-related intangibles

 

 

953

 

 

 

1,301

 

 

 

 

 

4,628

 

 

 

6,173

 

 

 

Severance

 

 

—

 

 

 

—

 

 

 

 

 

—

 

 

 

3,586

 

 

 

Share-based compensation

 

 

10,535

 

 

 

10,768

 

 

 

 

 

40,754

 

 

 

42,357

 

 

 

Total non-GAAP adjustments

 

 

11,488

 

 

 

12,069

 

 

 

 

45,382

 

 

 

52,116

 

 

 

Non-GAAP income from operations

 

$

9,921

 

 

$

1,460

 

 

580

%

 

$

26,360

 

 

$

1,514

 

 

1,641

%

 

 

 

 

 

 

 

 

 

 

Non-GAAP income from operations % of total revenue

 

 

11.7

%

 

 

1.9

%

 

 

 

8.0

%

 

 

0.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(1,967

)

 

$

(10,195

)

 

(81

)%

 

$

(20,475

)

 

$

(56,354

)

 

(64

)%

Non-GAAP adjustments:

 

 

 

 

 

 

 

Total non-GAAP adjustments affecting loss from operations

 

 

11,488

 

 

 

12,069

 

 

 

 

45,382

 

 

 

52,116

 

 

 

Amortization of debt premium and issuance costs

 

 

(377

)

 

 

(303

)

 

 

 

(1,482

)

 

 

737

 

 

 

(Gain) loss on equity investments, net

 

 

—

 

 

 

(828

)

 

 

 

 

—

 

 

 

(828

)

 

 

Loss on derivatives

 

 

—

 

 

 

146

 

 

 

 

 

—

 

 

 

4,489

 

 

 

Loss on debt extinguishment

 

 

—

 

 

 

—

 

 

 

 

 

—

 

 

 

1,779

 

 

 

Tax impact related to non-GAAP adjustments

 

 

(1,685

)

 

 

164

 

 

 

 

 

(4,129

)

 

 

301

 

 

 

Non-GAAP net income

 

$

7,459

 

 

$

1,053

 

 

608

%

 

$

19,296

 

 

$

2,240

 

 

761

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP earnings per share

 

$

0.16

 

 

$

0.02

 

 

 

 

$

0.41

 

 

$

0.05

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing non-GAAP earnings per share

 

 

47,534

 

 

 

47,786

 

 

 

 

47,579

 

 

 

47,139

 

 

PROS Holdings, Inc.

Supplemental Schedule of Non-GAAP Financial Measures

Increase (Decrease) in GAAP Amounts Reported

(In thousands)

(Unaudited)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Cost of Subscription Items

 

 

 

 

 

 

 

 

Amortization of acquisition-related intangibles

 

 

629

 

 

953

 

 

3,273

 

 

4,632

Severance

 

 

—

 

 

—

 

 

—

 

 

125

Share-based compensation

 

 

239

 

 

208

 

 

920

 

 

703

Total cost of subscription items

 

$

868

 

$

1,161

 

$

4,193

 

$

5,460

 

 

 

 

 

 

 

 

 

Cost of Maintenance Items

 

 

 

 

 

 

 

 

Severance

 

 

—

 

 

—

 

 

—

 

 

307

Share-based compensation

 

 

102

 

 

93

 

 

433

 

 

364

Total cost of maintenance items

 

$

102

 

$

93

 

$

433

 

$

671

 

 

 

 

 

 

 

 

 

Cost of Services Items

 

 

 

 

 

 

 

 

Severance

 

 

—

 

 

—

 

 

—

 

 

317

Share-based compensation

 

 

839

 

 

772

 

 

3,223

 

 

2,856

Total cost of services items

 

$

839

 

$

772

 

$

3,223

 

$

3,173

 

 

 

 

 

 

 

 

 

Sales and Marketing Items

 

 

 

 

 

 

 

 

Amortization of acquisition-related intangibles

 

 

324

 

 

348

 

 

1,355

 

 

1,541

Severance

 

 

—

 

 

—

 

 

—

 

 

1,595

Share-based compensation

 

 

2,469

 

 

2,811

 

 

9,209

 

 

11,834

Total sales and marketing items

 

$

2,793

 

$

3,159

 

$

10,564

 

$

14,970

 

 

 

 

 

 

 

 

 

Research and Development Items

 

 

 

 

 

 

 

 

Severance

 

 

—

 

 

—

 

 

—

 

 

1,008

Share-based compensation

 

 

2,256

 

 

2,684

 

 

8,799

 

 

10,524

Total research and development items

 

$

2,256

 

$

2,684

 

$

8,799

 

$

11,532

 

 

 

 

 

 

 

 

 

General and Administrative Items

 

 

 

 

 

 

 

 

Severance

 

 

—

 

 

—

 

 

—

 

 

234

Share-based compensation

 

 

4,630

 

 

4,200

 

 

18,170

 

 

16,076

Total general and administrative items

 

$

4,630

 

$

4,200

 

$

18,170

 

$

16,310

 

PROS Holdings, Inc.

Supplemental Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands)

(Unaudited)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

GAAP Loss from Operations

 

$

(1,567

)

 

$

(10,609

)

 

$

(19,022

)

 

$

(50,602

)

Amortization of acquisition-related intangibles

 

 

953

 

 

 

1,301

 

 

 

4,628

 

 

 

6,173

 

Severance

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,586

 

Share-based compensation

 

 

10,535

 

 

 

10,768

 

 

 

40,754

 

 

 

42,357

 

Depreciation and other amortization

 

 

979

 

 

 

1,105

 

 

 

3,675

 

 

 

4,534

 

Capitalized internal-use software development costs

 

 

—

 

 

 

(48

)

 

 

(58

)

 

 

(48

)

Adjusted EBITDA

 

$

10,900

 

 

$

2,517

 

 

$

29,977

 

 

$

6,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by Operating Activities

 

$

24,013

 

 

$

13,844

 

 

$

27,383

 

 

$

9,877

 

Severance

 

 

—

 

 

 

211

 

 

 

—

 

 

 

4,081

 

Purchase of property and equipment

 

 

(497

)

 

 

(375

)

 

 

(1,166

)

 

 

(2,543

)

Capitalized internal-use software development costs

 

 

—

 

 

 

(48

)

 

 

(58

)

 

 

(48

)

Free Cash Flow

 

$

23,516

 

 

$

13,632

 

 

$

26,159

 

 

$

11,367

 

 

 

 

 

 

 

 

 

 

Guidance

 

 

 

 

 

 

 

 

 

 

Q1 2025 Guidance

 

Full Year 2025 Guidance

 

 

Low

 

High

 

Low

 

High

Adjusted EBITDA

 

 

 

 

 

 

 

 

GAAP Loss from Operations

 

$

(5,400

)

 

$

(4,400

)

 

$

(13,300

)

 

$

(11,300

)

Amortization of acquisition-related intangibles

 

 

1,000

 

 

 

1,000

 

 

 

3,700

 

 

 

3,700

 

Share-based compensation

 

 

11,000

 

 

 

11,000

 

 

 

48,000

 

 

 

48,000

 

Depreciation and other amortization

 

 

900

 

 

 

900

 

 

 

3,600

 

 

 

3,600

 

Adjusted EBITDA

 

$

7,500

 

 

$

8,500

 

 

$

42,000

 

 

$

44,000

 

 

PROS Holdings, Inc.

Supplemental Reconciliation of GAAP to Non-GAAP Financial Measures (Continued)

(In thousands)

(Unaudited)

 

 

 

Three Months Ended December 31,

 

Quarter over Quarter

 

Year Ended December 31,

 

Year over Year

 

 

 

2024

 

 

 

2023

 

 

% change

 

 

2024

 

 

 

2023

 

 

% change

GAAP subscription gross profit

 

$

55,026

 

 

$

46,214

 

 

19

%

 

$

208,390

 

 

$

176,812

 

 

18

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of acquisition-related intangibles

 

 

629

 

 

 

953

 

 

 

 

 

3,273

 

 

 

4,632

 

 

 

Severance

 

 

—

 

 

 

—

 

 

 

 

 

—

 

 

 

125

 

 

 

Share-based compensation

 

 

239

 

 

 

208

 

 

 

 

 

920

 

 

 

703

 

 

 

Non-GAAP subscription gross profit

 

$

55,894

 

 

$

47,375

 

 

18

%

 

$

212,583

 

 

$

182,272

 

 

17

%

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP subscription gross margin

 

 

80.7

%

 

 

78.0

%

 

 

 

 

79.8

%

 

 

77.9

%

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250206040651/en/

Investor Contact: PROS Investor Relations Belinda Overdeput 713-335-5879 ir@pros.com