Summary of PROS Holding FY Conference Call Company Overview - PROS Holding is a SaaS company specializing in revenue management and pricing optimization, with total revenue of approximately $360 million [2][12] - The company has a long history dating back to 1985 and has developed sophisticated machine learning algorithms for dynamic pricing, initially in the airline industry [2][4] Key Highlights AI Capabilities - PROS has strong AI capabilities that serve as a defensive moat, allowing for rapid price adjustments in response to market volatility [4][12] - The algorithms developed over decades provide significant value to customers, particularly in managing commodity cost changes [4][12] Market Position and Opportunities - The company is well-known in the travel sector but sees significant growth potential in the B2B space, where brand awareness is lower [5][12] - PROS has initiated new partnerships, such as with BigCommerce, to enhance market reach and awareness [6][55] Business Performance - The first half of 2025 showed strong performance across both B2B and travel segments, with improved sales cycle times and competitive win rates [10][11] - The company has increased its guidance for subscription ARR and revenue due to positive performance [12][49] Competitive Landscape - PROS primarily competes against in-house solutions and Excel spreadsheets, with notable competitors including Pricefx and ServiceNow [20][21] - In the travel sector, major competitors include Amadeus and Sabre, which have broader service offerings [22][23] Industry Trends Travel Segment - Airlines are shifting towards owning the entire traveler experience, creating opportunities for PROS to provide comprehensive pricing and offer management solutions [26][27] - The demand for ancillary services and bundled offerings is increasing, positioning PROS favorably to assist airlines in this transition [26][27] AI Monetization - PROS is exploring new monetization models for its AI capabilities, potentially moving towards outcome-based pricing [31][32] - The company emphasizes the importance of deterministic algorithms for pricing, contrasting with the non-deterministic nature of generative AI [39][41] Growth Initiatives Go-to-Market Strategy - PROS plans to enhance its demand generation efforts with more industry-specific messaging and targeted campaigns [44][45] - The company is focusing on building partnerships with system integrators (SIs) to expand its market presence [56][57] Financial Goals - PROS aims for a revenue growth rate of 16-21% and a free cash flow margin of 19-24% by 2027 [49][50] - The company is prioritizing top-line growth while also seeking to improve operational efficiency through AI [50][51] Conclusion - PROS Holding is positioned for growth through its advanced AI capabilities, strategic partnerships, and a focus on enhancing its market presence in both B2B and travel sectors [58][60] - The leadership team is committed to evolving the company's culture and operational strategies to capitalize on emerging opportunities in the market [8][62]

Summary of American Tower Conference Call Company Overview - **Company**: American Tower Corporation - **Event**: KeyBank Technology Leadership Forum - **Date**: August 11, 2025 Key Points Industry and Company Strategy - American Tower is transitioning from a passive tower business to a more technical role, focusing on data centers and satellite investments [4][5] - The acquisition of CoreSite in 2021 is a significant part of the capital plan, emphasizing the convergence of satellite and terrestrial networks [5][6] - The company is exploring "power as a service" in Africa, indicating a shift towards more integrated services [5] Data Centers and Edge Computing - The company is developing edge facilities, with a focus on the Raleigh data center, which aims to prove the concept of distributed computing [8][10] - Initial investments in small edge facilities did not meet expectations, leading to a reevaluation of strategies [12][13] - Power constraints in centralized locations are driving the need for distributed edge facilities, with Raleigh designed to accommodate modular power increments [14][15] AI and Technological Transformation - The company is in the early stages of AI adoption, focusing on improving productivity and harmonizing datasets from various acquisitions [27][28] - AI is seen as a game changer for operational efficiency, with a focus on orchestrating AI agents across use cases [30] Satellite and Tower Business - Investments in AST Space Mobile are viewed as complementary to the tower business, enhancing connectivity in underserved areas [32][34] - The company believes that towers will remain essential infrastructure, even with the rise of satellite technology [34][36] Spectrum Opportunities - The recent tax bill allows the FCC to auction spectrum, which is seen as a significant opportunity for American Tower [42][43] - Key spectrum bands of interest include upper C band and six gigahertz, which are crucial for future growth [46][48] - The company anticipates that the auction process will enhance capacity and drive new deployments [51][52] Future Outlook - The transition to 5G has been slower than expected, but the new tax incentives may accelerate carrier investments [56][57] - The integration of telecommunications and computing at the edge is expected to enhance user experiences and drive future growth [61] Additional Insights - The company is focusing on modular data center designs to meet the growing demand for power and efficiency [15][21] - There is a recognition of the need for shared resources in the community to support local tech companies [24] - The potential for AI to transform business operations is acknowledged, with ongoing efforts to leverage AI for better decision-making [28][30]

Core Insights - PROS Holdings reported Q2 2025 results that exceeded Wall Street estimates for both revenue and earnings, with GAAP revenue of $88.7 million and non-GAAP EPS of $0.13, significantly higher than the consensus forecast of $0.06 [1][2] Financial Performance - GAAP revenue increased by 8.2% year-over-year from $82.0 million in Q2 2024 to $88.7 million in Q2 2025 [2] - Non-GAAP EPS rose by 85.7% from $0.07 in Q2 2024 to $0.13 in Q2 2025 [2] - Subscription revenue grew by 12% year-over-year, reaching $73.3 million, showing acceleration from the previous quarter [1][5] - Non-GAAP subscription gross margin improved to 80% in Q2 2025, up from 79.6% in Q2 2024 [6] Company Overview and Growth Strategy - PROS Holdings specializes in AI-driven enterprise software for pricing, quoting, and revenue management, targeting complex sectors like airlines and manufacturing [3] - The company focuses on technological leadership in AI and cloud computing, investing heavily in R&D to drive product innovation [4][7] Operational Highlights - The company secured new contracts with clients such as Air Greenland and Lennox, while expanding existing relationships with American Airlines and BASF [5] - Adjusted EBITDA showed strong improvement, although free cash flow declined due to timing of collections and increased commercial activities [8] Future Outlook - For Q3 2025, PROS Holdings expects GAAP revenue between $90.5 and $91.5 million, indicating approximately 10% growth at the midpoint [9] - The company raised its full-year subscription revenue outlook, projecting Subscription ARR for FY2025 to be between $310 million and $313 million [9] - Non-GAAP EPS for Q3 2025 is forecasted to be between $0.15 and $0.17, with adjusted EBITDA expected at $11 to $12 million [9]

Group 1 - The investment thesis for PROS Holdings (NYSE: PRO) is based on consistent double-digit high margin revenue growth rather than being classified as a high-flying SaaS growth stock [1] - The company is demonstrating expanding revenue, which is a positive indicator for potential investors [1] Group 2 - The individual investor focuses on undercovered companies, particularly in technology, software, electronics, and energy transition sectors [1] - The investor has over 7 years of personal capital investment experience and has developed a professional investment background through extensive analysis of various companies [1]

Core Insights - Pros Holdings reported revenue of $88.72 million for the quarter ended June 2025, reflecting an 8.2% increase year-over-year and exceeding the Zacks Consensus Estimate of $87.7 million by 1.16% [1] - The company's EPS for the quarter was $0.13, up from $0.07 in the same quarter last year, resulting in an EPS surprise of 85.71% compared to the consensus estimate of $0.07 [1] Revenue Breakdown - Total subscription, maintenance, and support revenue was $75.9 million, surpassing the average estimate of $74.94 million by analysts, marking a 10% increase year-over-year [4] - Subscription revenue reached $73.33 million, exceeding the average estimate of $72.35 million, with an 11.8% year-over-year growth [4] - Maintenance and support revenue was $2.57 million, slightly below the estimated $2.58 million, showing a significant decline of 24.2% compared to the previous year [4] - Services revenue amounted to $12.82 million, slightly above the average estimate of $12.76 million, with a year-over-year decrease of 1.6% [4] Stock Performance - Over the past month, shares of Pros Holdings have returned -2.2%, contrasting with the Zacks S&P 500 composite's increase of 2.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Group 1 - Pros Holdings reported quarterly earnings of $0.13 per share, exceeding the Zacks Consensus Estimate of $0.07 per share, representing an earnings surprise of +85.71% [1] - The company achieved revenues of $88.72 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.16% and showing an increase from $82.01 million year-over-year [2] - Over the last four quarters, Pros Holdings has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2 - Pros Holdings shares have declined approximately 27.9% since the beginning of the year, contrasting with the S&P 500's gain of 8.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.19 on revenues of $91.96 million, and for the current fiscal year, it is $0.63 on revenues of $361.02 million [7] Group 3 - The Zacks Industry Rank indicates that the Computer - Software industry is currently in the top 19% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8] - Another company in the same industry, Intuit, is expected to report quarterly earnings of $2.65 per share, reflecting a year-over-year change of +33.2%, with revenues projected at $3.74 billion, up 17.6% from the previous year [9]

Financial Data and Key Metrics Changes - In Q2, subscription revenue grew by 12% year over year to $73.3 million, while total revenue increased by 8% year over year to $88.7 million, both exceeding guidance ranges [19] - Adjusted EBITDA improved by 42% year over year to $7.4 million, also exceeding guidance [20] - Free cash flow for Q2 was $3.2 million, bringing the total for 2025 to $4.3 million, an improvement of over $3 million compared to the first half of last year [21] - Non-GAAP earnings per share for Q2 was $0.13, exceeding guidance [22] Business Line Data and Key Metrics Changes - Recurring revenue accounted for 86% of total revenue in Q2, up from 84% in Q2 of the previous year [19] - Non-GAAP subscription gross margin was 80% in Q2, improving by over 50 basis points year over year [20] - Non-GAAP service gross margins increased to 11% in Q2 from 10% reported last year [20] Market Data and Key Metrics Changes - The airline business saw continued momentum with new customer wins such as Air Greenland and ValueJet, and expanded partnerships with major carriers [10] - New customers in various sectors, including a global life sciences leader and a top U.S. auto parts distributor, selected Smart CPQ solutions [8] Company Strategy and Development Direction - The company is focused on leading with innovation and building a comprehensive AI-powered commercial platform to help businesses succeed [11] - Plans to enhance platform extensibility and deepen AI agent capabilities are in place, with a focus on driving goal-oriented execution across various use cases [12] - The company aims to strengthen its go-to-market function and improve lead quality and conversion rates through targeted campaigns [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macro environment but expressed confidence in the company's ability to help customers navigate these uncertainties [6] - The company is well-positioned to capture long-term value and lead in the next era of enterprise transformation, particularly through AI innovations [15] - Management expects subscription revenue and ARR guidance to be raised due to strong business momentum [19] Other Important Information - The company announced a partnership with Commerce to combine enterprise-grade pricing and CPQ capabilities with e-commerce solutions, aiming to enhance distribution and demand flow [14][56] - The company is actively working on simplifying product deployment to drive subscription revenue growth [66] Q&A Session Summary Question: What initiatives are in place to build tighter alignment between marketing and sales? - Management discussed tailoring marketing campaigns to specific industries and aligning sales activities accordingly, with expected benefits in a few quarters [27][29] Question: How does the company view the opportunity in the travel segment? - Management expressed optimism about the airline industry's demand for offer management solutions, noting significant interest from airlines in redefining their tech stacks [30][32] Question: What needs to happen for subscription growth to accelerate into 2026? - Management indicated that optimizing the top of the funnel and leveraging partnerships will be key to accelerating growth [39][41] Question: Can you elaborate on the macro environment and its impact on sales cycles? - Management confirmed that while the sales environment remains challenging, there are opportunities for growth, particularly in complex environments where their products add value [70][72] Question: How is the company maintaining its competitive advantage around AI? - The focus is currently on driving usage and adoption of AI agents, with plans to evaluate monetization models based on customer feedback [83][85]

Financial Performance - Total Revenue for Q2 2025 reached $88.7 million, an 8% increase compared to $82 million in Q2 2024[56] - Subscription Revenue for Q2 2025 grew by 12% to $73.3 million, up from $65.6 million in Q2 2024[56] - Adjusted EBITDA for Q2 2025 was $7.4 million, a $2.2 million increase from $5.2 million in Q2 2024[56] - Non-GAAP Earnings Per Share for Q2 2025 was $0.13, compared to $0.07 in Q2 2024[56] - Free Cash Flow for Q2 2025 was $3.2 million, a decrease of $3 million from $6.2 million in Q2 2024[56] - TTM (Trailing Twelve Months) Total Revenue reached $342.7 million, an 8% increase from $317.4 million[56] - TTM Subscription Revenue reached $280.5 million, a 12% increase from $250.7 million[56] - TTM Adjusted EBITDA reached $36.3 million, an $18.4 million increase from $18 million[56] - TTM Free Cash Flow reached $29.2 million, a $5.8 million increase from $23.4 million[56] - TTM Non-GAAP Earnings Per Share reached $0.56, a $0.34 increase from $0.22[56] Growth and Market Opportunity - PROS estimates an underpenetrated, addressable market of over $38 billion[8, 29] - The company processes over 4.5 trillion transactions annually, a 12% year-over-year increase[8, 24] - The company has a customer gross revenue retention rate of over 93%[8] - The company estimates subscription revenue between $295.5 million and $297.5 million for full year 2025[58]

PART I. FINANCIAL INFORMATION [Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Interim%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited interim financials for Q2 2025 show 8% revenue growth, a reduced net loss, and balance sheet shifts from recent debt transactions [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $443.0 million, liabilities grew to $527.9 million primarily from convertible debt, widening the stockholders' deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $178,958 | $161,983 | | Total current assets | $261,206 | $239,116 | | Total assets | $443,041 | $419,902 | | **Liabilities & Equity** | | | | Deferred revenue, current | $135,497 | $130,977 | | Convertible debt, net | $312,027 | $270,797 | | Total liabilities | $527,920 | $488,605 | | Total stockholders' (deficit) equity | $(84,879) | $(68,703) | [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Q2 2025 total revenue increased 8% to $88.7 million, with net loss significantly reduced to $1.8 million due to a debt extinguishment gain Q2 Financial Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Subscription Revenue | $73,333 | $65,600 | +12% | | Total Revenue | $88,715 | $82,013 | +8% | | Gross Profit | $59,520 | $53,194 | +12% | | Loss from Operations | $(7,599) | $(7,184) | +6% | | Net Loss | $(1,756) | $(7,386) | -76% | | Diluted Net Loss per Share | $(0.10) | $(0.16) | -38% | Six-Month Financial Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Subscription Revenue | $144,163 | $129,949 | +11% | | Total Revenue | $175,037 | $162,701 | +8% | | Gross Profit | $117,910 | $105,049 | +12% | | Loss from Operations | $(11,424) | $(17,486) | -35% | | Net Loss | $(5,445) | $(18,743) | -71% | | Diluted Net Loss per Share | $(0.16) | $(0.40) | -60% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating cash flow improved to $4.4 million, while financing activities provided $14.1 million, primarily from new convertible debt issuance Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $4,430 | $1,776 | | Net cash used in investing activities | $(26) | $(609) | | Net cash provided by (used in) financing activities | $14,115 | $(30,850) | | **Net change in cash, cash equivalents and restricted cash** | **$16,975** | **$(29,661)** | - The significant shift in financing cash flow from a use of **$30.9M** in H1 2024 to a source of **$14.1M** in H1 2025 was primarily due to the issuance of new convertible debt (**$50.0M**) and the purchase of a Capped Call (**$27.9M**) in 2025, compared to a repayment of convertible debt (**$21.7M**) in 2024[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, a $4.2 million gain on debt extinguishment from convertible note exchanges, and $494.7 million in remaining performance obligations - As of June 30, 2025, the company has **$494.7 million** in remaining performance obligations, of which it expects to recognize **$252.7 million** as revenue over the next 12 months[38](index=38&type=chunk) - In June 2025, the company exchanged approximately **$186.9 million** of its 2027 Notes for new 2030 Notes and sold an additional **$50.0 million** of 2030 Notes This resulted in a **$4.2 million** gain on debt extinguishment[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - In connection with the new 2030 Notes, the company entered into Capped Call Transactions for approximately **$27.9 million** to reduce potential stock dilution and effectively increase the conversion price from **$20.48** to **$30.34** per share[66](index=66&type=chunk)[67](index=67&type=chunk) - Total unrecognized compensation cost related to share-based arrangements was **$106.5 million** as of June 30, 2025, which is expected to be recognized over a weighted average period of **2.7 years**[51](index=51&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 performance, noting 12% subscription revenue growth, improved gross margins, macroeconomic impacts, AI adoption, and sufficient liquidity [Q2 2025 Financial Overview](index=18&type=section&id=Q2%202025%20Financial%20Overview) Q2 2025 highlights include 12% subscription revenue growth, 8% total revenue increase, 86% recurring revenue, and an improved 79% subscription gross margin - Subscription revenue increased by **12%** for the three months ended June 30, 2025, compared to the same period in 2024[76](index=76&type=chunk) - Gross revenue retention rates remained above **93%** for the twelve months ended June 30, 2025[77](index=77&type=chunk) - Subscription gross profit margin was **79%** for Q2 2025, an improvement from **78%** in Q2 2024, due to optimization of cloud infrastructure[78](index=78&type=chunk) [Factors Affecting Our Performance](index=18&type=section&id=Factors%20Affecting%20Our%20Performance) Performance is influenced by a challenging macroeconomic environment leading to measured buying, while rapid AI interest and digital purchasing trends drive demand - The uncertain macroeconomic environment is driving measured buying behavior, more complex customer review cycles, and a focus on smaller initial purchases with rapid ROI[80](index=80&type=chunk) - Rapid market interest in generative AI is driving businesses to invest in AI applications, which fuels demand for the company's solutions[80](index=80&type=chunk) - Long-term trends toward digital purchasing are increasing demand for technology that provides fast, frictionless, and consistent buying experiences across all sales channels[80](index=80&type=chunk)[81](index=81&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) Q2 2025 total revenue grew 8% driven by 12% subscription growth, gross profit margin improved to 67%, and operating expenses rose 11% due to employee costs Revenue Breakdown and Growth (in thousands) | Revenue Stream | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Subscription | $73,333 | $65,600 | +12% | $144,163 | $129,949 | +11% | | Maintenance and support | $2,567 | $3,385 | -24% | $5,297 | $6,980 | -24% | | Services | $12,815 | $13,028 | -2% | $25,577 | $25,772 | -1% | | **Total revenue** | **$88,715** | **$82,013** | **+8%** | **$175,037** | **$162,701** | **+8%** | Operating Expense Breakdown and Growth (in thousands) | Expense Category | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Selling and marketing | $26,791 | $23,537 | +14% | $50,799 | $46,219 | +10% | | Research and development | $23,019 | $21,786 | +6% | $45,626 | $46,199 | -1% | | General and administrative | $17,309 | $15,055 | +15% | $32,909 | $30,117 | +9% | | **Total operating expenses** | **$67,119** | **$60,378** | **+11%** | **$129,334** | **$122,535** | **+6%** | - The increase in Selling and Marketing expenses was primarily due to higher employee-related costs, including a **$1.1 million** severance accrual for a former executive, and increased spending on sales and marketing events[91](index=91&type=chunk) - The increase in General and Administrative expenses was mainly driven by higher noncash share-based compensation related to stock awards for the new CEO and accelerated expense for the retiring former CEO[93](index=93&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held **$179.0 million** in cash and cash equivalents, with sufficient liquidity from cash, operating cash flows, and a **$50 million** credit facility for the next twelve months - At June 30, 2025, the company had **$179.0 million** in cash and cash equivalents and **$10.0 million** in restricted cash[99](index=99&type=chunk) - The company's principal sources of liquidity are cash, cash flows from operations, and a potential **$50 million** from its credit agreement[100](index=100&type=chunk) - There were no outstanding borrowings under the company's credit facility as of June 30, 2025[108](index=108&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes in the company's exposure to market risks have occurred since its Annual Report on Form 10-K - There have been no material changes in the company's exposure to market risks from those disclosed in its Annual Report[113](index=113&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - As of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[114](index=114&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that would have a material effect[115](index=115&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business - The company is not currently aware of any legal proceedings that would have a material adverse effect on its business[116](index=116&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since its Annual Report on Form 10-K - There have been no material changes in the Company's risk factors from those disclosed in its Annual Report[117](index=117&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[118](index=118&type=chunk) [Item 5. Other Information](index=25&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during Q2 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the three months ended June 30, 2025[121](index=121&type=chunk)

PROS Holdings, Inc. Q2 2025 Earnings Release [Financial Highlights](index=1&type=section&id=Financial%20Highlights) PROS Holdings exceeded Q2 2025 guidance, with total revenue growing 8% to $88.7 million and subscription revenue up 12% to $73.3 million, alongside improved profitability - The company exceeded the high end of its guidance ranges for all metrics in the second quarter[2](index=2&type=chunk) Q2 2025 Financial Performance vs. Q2 2024 (in millions, except per share data) | Metric | Q2 2025 (GAAP) | Q2 2024 (GAAP) | Change | Q2 2025 (Non-GAAP) | Q2 2024 (Non-GAAP) | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $88.7 | $82.0 | 8% | n/a | n/a | n/a | | **Subscription Revenue** | $73.3 | $65.6 | 12% | n/a | n/a | n/a | | **Operating (Loss) Income** | $(7.6) | $(7.2) | $(0.4) | $6.5 | $4.4 | $2.2 | | **Net (Loss) Income** | $(1.8) | $(7.4) | $5.6 | $6.3 | $3.3 | $3.1 | | **Net (Loss) EPS** | $(0.10) | $(0.16) | $0.06 | $0.13 | $0.07 | $0.06 | | **Adjusted EBITDA** | n/a | n/a | n/a | $7.4 | $5.2 | $2.2 | | **Net Cash from Ops** | $3.2 | $6.4 | $(3.2) | n/a | n/a | n/a | | **Free Cash Flow** | n/a | n/a | n/a | $3.2 | $6.2 | $(3.0) | [Business Highlights](index=1&type=section&id=Business%20Highlights) The company demonstrated strong business momentum by raising its full-year outlook for subscription revenue and ARR, expanding its customer base, increasing platform adoption, and securing strategic partnerships and industry awards - Raised its full-year outlook for both subscription revenue and subscription Annual Recurring Revenue (ARR)[6](index=6&type=chunk) - Expanded its customer base with new clients including Air Greenland, Aurigny Air, HellermannTyton, Lennox, Louis Dreyfus, and RHI Magnesita[7](index=7&type=chunk) - Increased platform adoption within existing major customers like American Airlines, BASF, Carrier, and Saint-Gobain[7](index=7&type=chunk) - Announced a strategic partnership with Commerce to integrate enterprise-grade pricing and CPQ with eCommerce solutions, targeting B2B merchants[14](index=14&type=chunk) - Earned recognition as a Leader in ISG's 2025 CPQ Buyers Guide and won the 2025 CSO Award for cybersecurity excellence for the second consecutive year[14](index=14&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) PROS issued a positive financial outlook, forecasting continued revenue growth for Q3 and full year 2025, alongside significant projected increases in Adjusted EBITDA and Free Cash Flow Q3 2025 and Full Year 2025 Guidance (in millions, except per share data) | Metric | Q3 2025 Guidance | YoY Growth (Mid) | Full Year 2025 Guidance | YoY Growth (Mid) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $90.5 - $91.5 | 10% | $360.0 - $362.0 | 9% | | **Subscription Revenue** | $74.8 - $75.3 | 12% | $295.5 - $297.5 | 11% | | **Subscription ARR** | n/a | n/a | $310.0 - $313.0 | 11% | | **Adjusted EBITDA** | $11.0 - $12.0 | 24% | $42.0 - $44.0 | 43% | | **Free Cash Flow** | n/a | n/a | $40.0 - $44.0 | 61% | | **Non-GAAP EPS** | $0.15 - $0.17 | $0.02 | n/a | n/a | [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's financial position and performance, including balance sheet, income statement, and cash flow highlights [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, PROS reported total assets of **$443.0 million**, total liabilities of **$527.9 million**, and a stockholders' deficit of **$84.9 million**, primarily due to increased convertible debt Selected Balance Sheet Items (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $178,958 | $161,983 | | Total current assets | $261,206 | $239,116 | | **Total assets** | **$443,041** | **$419,902** | | Deferred revenue, current | $135,497 | $130,977 | | Convertible debt, net, noncurrent | $312,027 | $270,797 | | **Total liabilities** | **$527,920** | **$488,605** | | Total stockholders' (deficit) equity | $(84,879) | $(68,703) | [Condensed Consolidated Statements of Loss](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss) For Q2 2025, total revenue increased to **$88.7 million**, gross profit rose to **$59.5 million**, and GAAP net loss significantly narrowed to **$1.8 million**, or **($0.10)** per diluted share Q2 2025 Income Statement Highlights (in thousands) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Subscription Revenue | $73,333 | $65,600 | | **Total revenue** | **$88,715** | **$82,013** | | Gross profit | $59,520 | $53,194 | | Loss from operations | $(7,599) | $(7,184) | | **Net loss** | **$(1,756)** | **$(7,386)** | | Diluted net loss per share | $(0.10) | $(0.16) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q2 2025, net cash from operating activities was **$3.2 million**, a decrease from prior year, while financing activities provided **$17.2 million** primarily from convertible debt issuance, ending with **$189.0 million** in cash and equivalents Q2 2025 Cash Flow Summary (in thousands) | Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,215 | $6,420 | | Net cash used in investing activities | $(41) | $(256) | | Net cash provided by (used in) financing activities | $17,246 | $(23,536) | | **Net change in cash, cash equivalents and restricted cash** | **$18,935** | **$(17,337)** | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=4&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) PROS provides non-GAAP metrics to offer a clearer view of operational performance by excluding non-cash or non-recurring items, converting GAAP losses into non-GAAP income for Q2 2025 - The primary non-GAAP adjustments are the exclusion of share-based compensation, amortization of acquisition-related intangibles, severance costs, amortization of debt premium, and gain on debt extinguishment[17](index=17&type=chunk)[18](index=18&type=chunk)[24](index=24&type=chunk) Q2 2025 GAAP to Non-GAAP Reconciliation (in thousands) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Gross Profit | $59,520 | $1,736 | $61,256 | | Loss from Operations | $(7,599) | $14,113 | $6,514 | | Net Loss | $(1,756) | $8,092 | $6,336 | Adjusted EBITDA Reconciliation for Q2 2025 (in thousands) | Line Item | Amount | | :--- | :--- | | GAAP Loss from Operations | $(7,599) | | Amortization of acquisition-related intangibles | $956 | | Severance | $1,147 | | Share-based compensation | $12,010 | | Depreciation and other amortization | $915 | | **Adjusted EBITDA** | **$7,429** |