- Subscription revenue of $67.1 million, up 12%
year-over-year.
- Subscription gross margin of 78% and non-GAAP subscription
gross margin of 80%, an improvement of more than 190 basis points
year-over-year.
- Continued improvement in areas of profitability, including a
185% improvement in operating cash flow year-to-date.
PROS Holdings, Inc. (NYSE: PRO), a leading provider of
AI-powered SaaS pricing, CPQ, revenue management, and digital offer
marketing solutions, today announced financial results for the
third quarter ended September 30, 2024.
“I’m proud of our team for delivering a strong third quarter
where we exceeded the high-end of our guidance ranges across all
metrics,” stated CEO Andres Reiner. “Our strong performance
reflects the trust and confidence businesses have in our platform,
which is why we’re winning prominent new customers and expanding
our existing base, further demonstrating the value and innovation
we bring to the market.”
Third Quarter 2024 Financial Highlights
Key financial results for the third quarter 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
Q3 2024
Q3 2023
Change
Q3 2024
Q3 2023
Change
Revenue:
Total Revenue
$
82.7
$
77.3
7
%
n/a
n/a
n/a
Subscription Revenue
$
67.1
$
60.0
12
%
n/a
n/a
n/a
Subscription and Maintenance Revenue
$
70.4
$
64.7
9
%
n/a
n/a
n/a
Profitability:
Gross Profit
$
54.4
$
48.8
12
%
$
56.3
$
50.9
11
%
Operating Income (Loss)
$
—
$
(7.8
)
$
7.9
$
8.4
$
4.5
$
3.8
Net Income (Loss)
$
0.2
$
(13.9
)
$
14.1
$
6.6
$
4.0
$
2.5
Net Earnings (Loss) Per Share
$
—
$
(0.30
)
$
0.30
$
0.14
$
0.09
$
0.05
Adjusted EBITDA
n/a
n/a
n/a
$
9.3
$
5.6
$
3.6
Cash:
Net Cash Provided by Operating
Activities
$
1.6
$
8.7
$
(7.1
)
n/a
n/a
n/a
Free Cash Flow
n/a
n/a
n/a
$
1.4
$
8.5
$
(7.1
)
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 a global top 5 telecommunications provider, Dan Air, Fox
Rent-A-Car, Noweda, South African Airways, Twist Bioscience, and
Vallen, among others.
- Expanded adoption of the PROS Platform within existing
customers including Asiana Air, BASF, Fonterra, Etihad. Kenworth de
Monterrey, Lufthansa, and TE Connectivity, among others.
- Added an AI agent to PROS Search Engine Marketing (SEM)
solution that leverages advanced models to optimize bidding
strategies for paid search; one AI model analyzes trends in clicks
and average cost-per-click, while another estimates the probability
of conversion—these insights inform the AI agent's optimized bid
proposals, helping marketing teams improve search engine
performance and maximize ROI.
- Launched Smart Rebate Management, enabling sellers to deliver
optimized, fully digital offers by integrating pricing, discounts,
promotions and rebates, while providing a holistic view of economic
levers for more tailored and optimal offers across all
channels.
- Certified as a Great Place to Work® for the third time and
across all eligible countries, recognizing our inclusive,
people-first culture.
Financial Outlook
PROS currently anticipates the following based on an estimated
47.5 million diluted weighted average shares outstanding for the
fourth quarter of 2024 and a 22% non-GAAP estimated tax rate for
the fourth quarter and full year 2024.
Q4 2024 Guidance
v. Q4 2023 at
Mid-Point
Full Year 2024
Guidance
v. Prior Year at
Mid-Point
Total Revenue
$84.1 to $85.1
9%
$329.5 to $330.5
9%
Subscription Revenue
$68.5 to $69.0
13%
$265.5 to $266.0
14%
Subscription ARR
n/a
n/a
$280.0 to $284.0
9%
Non-GAAP Earnings Per Share
$0.12 to $0.14
$0.11
n/a
n/a
Adjusted EBITDA
$8.4 to $9.4
$6.4
$27.5 to $28.5
$22.0
Free Cash Flow
n/a
n/a
$21.0 to $24.0
$11.1
Conference Call
In conjunction with this announcement, PROS Holdings, Inc. will
host a conference call on Tuesday, October 29, 2024, 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 Tuesday, November 5,
2024, 11:59 PM ET at 1-844-512-2921 (toll-free) or 1-412-317-6671
using the pass code 13748298.
About PROS
PROS Holdings, Inc. (NYSE: PRO) is a leading provider of
AI-powered SaaS pricing, CPQ, revenue management, and digital offer
marketing solutions. Our vision is to optimize every shopping and
selling experience. With nearly 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) our debt repayment obligations, (u) the timing of
revenue recognition and cash flow from operations, and (v)
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, 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.
- 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)
September 30, 2024
December 31, 2023
Assets:
Current assets:
Cash and cash equivalents
$
140,564
$
168,747
Trade and other receivables, net of
allowance of $690 and $574, respectively
48,225
49,058
Deferred costs, current
4,448
4,856
Prepaid and other current assets
10,782
12,013
Total current assets
204,019
234,674
Restricted cash
10,000
10,000
Property and equipment, net
20,391
23,051
Operating lease right-of-use assets
13,770
14,801
Deferred costs, noncurrent
10,690
10,292
Intangibles, net
7,997
11,678
Goodwill
107,970
107,860
Other assets, noncurrent
9,332
9,477
Total assets
$
384,169
$
421,833
Liabilities and Stockholders’ (Deficit)
Equity:
Current liabilities:
Accounts payable and other liabilities
$
5,270
$
3,034
Accrued liabilities
13,603
13,257
Accrued payroll and other employee
benefits
22,831
32,762
Operating lease liabilities, current
3,590
5,655
Deferred revenue, current
114,538
120,955
Current portion of convertible debt,
net
—
21,668
Total current liabilities
159,832
197,331
Deferred revenue, noncurrent
2,675
3,669
Convertible debt, net, noncurrent
271,173
272,324
Operating lease liabilities,
noncurrent
24,482
25,118
Other liabilities, noncurrent
1,231
1,264
Total liabilities
459,393
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; 51,953,232 and 51,184,584 shares issued,
respectively; 47,272,509 and 46,503,861 shares outstanding,
respectively
52
51
Additional paid-in capital
625,085
604,084
Treasury stock, 4,680,723 common shares,
at cost
(29,847
)
(29,847
)
Accumulated deficit
(665,760
)
(647,252
)
Accumulated other comprehensive loss
(4,754
)
(4,909
)
Total stockholders’ (deficit) equity
(75,224
)
(77,873
)
Total liabilities and stockholders’
(deficit) equity
$
384,169
$
421,833
PROS Holdings, Inc.
Condensed Consolidated
Statements of Income (Loss)
(In thousands, except per share
data)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Revenue:
Subscription
$
67,068
$
59,987
$
197,017
$
173,260
Maintenance and support
3,361
4,693
10,341
15,498
Total subscription, maintenance and
support
70,429
64,680
207,358
188,758
Services
12,273
12,570
38,045
37,466
Total revenue
82,702
77,250
245,403
226,224
Cost of revenue:
Subscription
14,470
14,510
43,653
42,662
Maintenance and support
1,698
1,769
5,311
5,927
Total cost of subscription, maintenance
and support
16,168
16,279
48,964
48,589
Services
12,130
12,185
36,986
37,988
Total cost of revenue
28,298
28,464
85,950
86,577
Gross profit
54,404
48,786
159,453
139,647
Operating expenses:
Selling and marketing
20,074
20,324
66,293
71,214
Research and development
21,081
22,205
67,280
66,343
General and administrative
13,218
14,099
43,335
42,083
Income (loss) from operations
31
(7,842
)
(17,455
)
(39,993
)
Convertible debt interest and
amortization
(1,121
)
(1,497
)
(3,471
)
(4,649
)
Other income (expense), net
1,531
(4,288
)
3,312
(1,046
)
Income (loss) before income tax
provision
441
(13,627
)
(17,614
)
(45,688
)
Income tax provision
206
241
894
471
Net income (loss)
$
235
$
(13,868
)
$
(18,508
)
$
(46,159
)
Net income (loss) per share:
Basic and diluted
$
—
$
(0.30
)
$
(0.39
)
$
(1.00
)
Weighted average number of shares:
Basic
47,231
46,225
47,038
46,084
Diluted
47,338
46,225
47,038
46,084
PROS Holdings, Inc.
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Operating activities:
Net income (loss)
$
235
$
(13,868
)
$
(18,508
)
$
(46,159
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
1,976
2,549
6,371
8,301
Amortization of debt premium and issuance
costs
(310
)
348
(896
)
1,094
Share-based compensation
7,271
10,933
30,219
31,589
Provision for credit losses
(108
)
—
52
88
Gain on lease modification
—
—
(697
)
—
Loss on disposal of assets
—
16
774
51
Loss on derivatives
—
4,343
—
4,343
Loss on debt extinguishment
—
1,779
—
1,779
Changes in operating assets and
liabilities:
Accounts and unbilled receivables
(385
)
4,497
788
(1,573
)
Deferred costs
(562
)
363
10
704
Prepaid expenses and other assets
984
1,480
1,158
31
Operating lease right-of-use assets and
liabilities
(322
)
(449
)
(1,838
)
(1,686
)
Accounts payable and other liabilities
(1,694
)
(2,123
)
2,191
(3,375
)
Accrued liabilities
(1,331
)
412
1,087
1,489
Accrued payroll and other employee
benefits
3,605
3,446
(9,906
)
(242
)
Deferred revenue
(7,765
)
(5,008
)
(7,435
)
(401
)
Net cash provided by (used in) operating
activities
1,594
8,718
3,370
(3,967
)
Investing activities:
Purchases of property and equipment
(231
)
(345
)
(669
)
(2,168
)
Capitalized internal-use software
development costs
—
—
(58
)
—
Investment in equity securities
—
(113
)
(113
)
(113
)
Net cash used in investing activities
(231
)
(458
)
(840
)
(2,281
)
Financing activities:
Proceeds from employee stock plans
1,055
1,033
2,079
2,170
Tax withholding related to net share
settlement of stock awards
(1,135
)
(1,163
)
(11,296
)
(6,831
)
Debt issuance costs related to Credit
Agreement
—
(837
)
—
(837
)
Purchase of capped call
—
(22,771
)
—
(22,771
)
Repayment of convertible debt
—
—
(21,713
)
—
Net cash used in financing activities
(80
)
(23,738
)
(30,930
)
(28,269
)
Effect of foreign currency rates on
cash
195
(9
)
217
(30
)
Net change in cash, cash equivalents and
restricted cash
1,478
(15,487
)
(28,183
)
(34,547
)
Cash, cash equivalents and restricted
cash:
Beginning of period
149,086
184,567
178,747
203,627
End of period
$
150,564
$
169,080
$
150,564
$
169,080
Reconciliation of cash, cash
equivalents and restricted cash to the condensed consolidated
balance sheets
Cash and cash equivalents
$
140,564
$
159,080
$
140,564
$
159,080
Restricted cash
10,000
10,000
10,000
10,000
Total cash, cash equivalents and
restricted cash
$
150,564
$
169,080
$
150,564
$
169,080
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 10.
Three Months Ended September
30,
Quarter over Quarter
Nine Months Ended September
30,
Year over Year
2024
2023
% change
2024
2023
% change
GAAP gross profit
$
54,404
$
48,786
12
%
$
159,453
$
139,647
14
%
Non-GAAP adjustments:
Amortization of acquisition-related
intangibles
738
1,099
2,644
3,679
Severance
—
—
—
749
Share-based compensation
1,177
1,033
3,396
2,850
Non-GAAP gross profit
$
56,319
$
50,918
11
%
$
165,493
$
146,925
13
%
Non-GAAP gross margin
68.1
%
65.9
%
67.4
%
64.9
%
GAAP income (loss) from operations
$
31
$
(7,842
)
(100
)%
$
(17,455
)
$
(39,993
)
(56
)%
Non-GAAP adjustments:
Amortization of acquisition-related
intangibles
1,074
1,446
3,675
4,872
Severance
—
—
—
3,586
Share-based compensation
7,271
10,933
30,219
31,589
Total non-GAAP adjustments
8,345
12,379
33,894
40,047
Non-GAAP income from operations
$
8,376
$
4,537
85
%
$
16,439
$
54
30,343
%
Non-GAAP income from operations % of total
revenue
10.1
%
5.9
%
6.7
%
—
%
GAAP net income (loss)
$
235
$
(13,868
)
(102
)%
$
(18,508
)
$
(46,159
)
(60
)%
Non-GAAP adjustments:
Total non-GAAP adjustments affecting
income (loss) from operations
8,345
12,379
33,894
40,047
Amortization of debt premium and issuance
costs
(380
)
294
(1,105
)
1,040
Loss on derivatives
—
4,343
—
4,343
Loss on debt extinguishment
—
1,779
—
1,779
Tax impact related to non-GAAP
adjustments
(1,643
)
(895
)
(2,444
)
137
Non-GAAP net income
$
6,557
$
4,032
63
%
$
11,837
$
1,187
897
%
Non-GAAP earnings per share
$
0.14
$
0.09
$
0.25
$
0.03
Shares used in computing non-GAAP earnings
per share
47,338
47,397
47,554
46,823
PROS Holdings, Inc.
Supplemental Schedule of
Non-GAAP Financial Measures
Increase (Decrease) in GAAP
Amounts Reported
(In thousands)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Cost of Subscription Items
Amortization of acquisition-related
intangibles
738
1,099
2,644
3,679
Severance
—
—
—
125
Share-based compensation
244
201
681
495
Total cost of subscription items
$
982
$
1,300
$
3,325
$
4,299
Cost of Maintenance Items
Severance
—
—
—
307
Share-based compensation
98
93
331
271
Total cost of maintenance items
$
98
$
93
$
331
$
578
Cost of Services Items
Severance
—
—
—
317
Share-based compensation
835
739
2,384
2,084
Total cost of services items
$
835
$
739
$
2,384
$
2,401
Sales and Marketing Items
Amortization of acquisition-related
intangibles
336
347
1,031
1,193
Severance
—
—
—
1,595
Share-based compensation
675
2,992
6,740
9,023
Total sales and marketing items
$
1,011
$
3,339
$
7,771
$
11,811
Research and Development Items
Severance
—
—
—
1,008
Share-based compensation
898
2,817
6,543
7,840
Total research and development items
$
898
$
2,817
$
6,543
$
8,848
General and Administrative
Items
Severance
—
—
—
234
Share-based compensation
4,521
4,091
13,540
11,876
Total general and administrative items
$
4,521
$
4,091
$
13,540
$
12,110
PROS Holdings, Inc.
Supplemental Reconciliation of
GAAP to Non-GAAP Financial Measures
(In thousands)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Adjusted EBITDA
GAAP Income (Loss) from
Operations
$
31
$
(7,842
)
$
(17,455
)
$
(39,993
)
Amortization of acquisition-related
intangibles
1,074
1,446
3,675
4,872
Severance
—
—
—
3,586
Share-based compensation
7,271
10,933
30,219
31,589
Depreciation and other amortization
902
1,103
2,696
3,429
Capitalized internal-use software
development costs
—
—
(58
)
—
Adjusted EBITDA
$
9,278
$
5,640
$
19,077
$
3,483
Net Cash Provided by (Used in)
Operating Activities
$
1,594
$
8,718
$
3,370
$
(3,967
)
Severance
—
121
—
3,870
Purchase of property and equipment
(231
)
(345
)
(669
)
(2,168
)
Capitalized internal-use software
development costs
—
—
(58
)
—
Free Cash Flow
$
1,363
$
8,494
$
2,643
$
(2,265
)
Guidance
Q4 2024 Guidance
Full Year 2024
Guidance
Low
High
Low
High
Adjusted EBITDA
GAAP Loss from Operations
$
(3,600
)
$
(2,600
)
$
(21,000
)
$
(20,000
)
Amortization of acquisition-related
intangibles
800
800
4,400
4,400
Share-based compensation
10,300
10,300
40,500
40,500
Depreciation and other amortization
900
900
3,600
3,600
Adjusted EBITDA
$
8,400
$
9,400
$
27,500
$
28,500
PROS Holdings, Inc.
Supplemental Reconciliation of
GAAP to Non-GAAP Financial Measures (Continued)
(In thousands)
(Unaudited)
Three Months Ended September
30,
Quarter over Quarter
Nine Months Ended September
30,
Year over Year
2024
2023
% change
2024
2023
% change
GAAP subscription gross profit
$
52,598
$
45,477
16
%
$
153,364
$
130,598
17
%
Non-GAAP adjustments:
Amortization of acquisition-related
intangibles
738
1,099
2,644
3,679
Severance
—
—
—
125
Share-based compensation
244
201
681
495
Non-GAAP subscription gross profit
$
53,580
$
46,777
15
%
$
156,689
$
134,897
16
%
Non-GAAP subscription gross margin
79.9
%
78.0
%
79.5
%
77.9
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241029370725/en/
Investor Contact: PROS Investor Relations Belinda
Overdeput 713-335-5879 ir@pros.com
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