Summary of PROS Update / Briefing May 14, 2025 Company Overview - **Company**: PROS - **Industry**: AI-driven software solutions, particularly in pricing and revenue management Key Points and Arguments AI Innovations and Product Development - PROS is launching **50 new AI agents** aimed at transforming productivity and business outcomes by combining large language models with mathematical models [10][12] - The concept of **"every person in the company will be a manager"** is introduced, emphasizing the role of AI agents in enhancing individual productivity [10] - AI agents will assist in various tasks, such as sales processes, by autonomously managing renewals and pricing strategies [12][13] - The focus on **customer co-development** of products highlights the collaborative culture within PROS [8][14] Market Demand and Volatility - Market volatility, including factors like inflation and tariffs, drives demand for PROS solutions, as companies seek to adapt quickly to changing conditions [17][22] - PROS technology enables companies to execute pricing strategies rapidly, providing a competitive edge during volatile periods [19][20] Financial Performance and Guidance - PROS reported a **positive free cash flow** in Q1 for the first time in a long time, indicating strong financial health [23] - The company anticipates an **accelerating second half** of the year based on strong bookings in both subscription and services [24] Strategic Focus and Market Positioning - The new CEO emphasizes the need to **amplify brand awareness** and enhance demand generation efforts, particularly through partnerships [30][32] - PROS aims to leverage its **partner ecosystem** to increase market penetration and capitalize on opportunities within the CRM landscape [52][54] Travel Industry Insights - Airlines are increasingly focused on **offer optimization** and enhancing customer experiences, which aligns with PROS' capabilities [35][37] - The company is witnessing a resurgence in demand as airlines recover from the impacts of COVID-19, with a focus on technology that drives efficiency without increasing headcount [44][45] Competitive Landscape - PROS holds a **leadership position** in the CPQ market, differentiating itself with a headless commerce architecture that is adaptable across various CRM systems [88][90] - The competitive environment is seen as improving, with PROS positioned to benefit from the transition away from traditional CRM solutions [89][91] AI Adoption and Internal Efficiency - The internal adoption of AI is extensive, with a focus on using AI to enhance operational efficiency and scale without increasing headcount [75][78] - The leadership team is committed to embedding AI across all functions, which is expected to yield significant future benefits [80][82] Revenue Model and Stability - PROS' revenue model is largely insulated from fluctuations in passenger volumes in the airline industry, with only about **1% of revenue** directly impacted by volume [86] - The company has a tiered pricing structure that provides stability even during downturns in the airline sector [86] Additional Important Insights - The emphasis on **responsible AI** and building trust in AI solutions is crucial for wider adoption among B2B customers [57][59] - The company is exploring opportunities to restructure its capital to enhance flexibility and support growth initiatives [66][68] This summary encapsulates the key insights from the PROS update, highlighting the company's strategic direction, market positioning, and financial outlook.

Group 1 - The stock of Pros Holdings (PRO) closed at $16.87, reflecting a 2.1% gain over the past four weeks, with a mean price target of $28.86 indicating a potential upside of 71.1% [1] - The average price targets from analysts range from a low of $22 to a high of $38, with a standard deviation of $5.98, suggesting a variability in estimates; the lowest estimate indicates a 30.4% increase, while the highest suggests a 125.3% upside [2] - Analysts show a consensus that PRO will report better earnings than previously estimated, which is a positive indicator for potential stock price increases [4][11] Group 2 - The Zacks Consensus Estimate for the current year has increased by 18.9% over the last 30 days, with three estimates moving higher and no negative revisions [12] - PRO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating a strong potential for upside in the near term [13] - While price targets may not be entirely reliable, the direction they imply appears to be a good guide for potential price movements [13]

Group 1 - PROS Holdings (NYSE: PRO) has experienced poor stock performance this year due to increased investor uncertainty related to its exposure to the airline industry, which is currently under demand pressure [1] - The company's Q1 results have not been detailed in the provided text, but the context suggests that they may be impacted by the challenges faced by the airline sector [1] Group 2 - The article does not provide any specific financial metrics or performance indicators for PROS Holdings or the airline industry [1]

Core Insights - Pros Holdings (PRO) reported revenue of $86.32 million for the quarter ended March 2025, marking a year-over-year increase of 7% and exceeding the Zacks Consensus Estimate of $85.43 million by 1.04% [1] - The company's earnings per share (EPS) for the same period was $0.13, compared to $0.04 a year ago, aligning with the consensus EPS estimate [1] Revenue Breakdown - Total subscription, maintenance, and support revenue reached $73.56 million, surpassing the average estimate of $73.20 million by analysts, reflecting an 8.3% year-over-year increase [4] - Subscription revenue was reported at $70.83 million, exceeding the average estimate of $70.50 million, with a year-over-year change of 10.1% [4] - Maintenance and support revenue was $2.73 million, slightly above the average estimate of $2.70 million, but showed a significant year-over-year decline of 24.1% [4] - Services revenue amounted to $12.76 million, exceeding the average estimate of $12.24 million, with a minimal year-over-year change of 0.1% [4] Stock Performance - Pros Holdings shares have returned -11.1% over the past month, in contrast to the Zacks S&P 500 composite's -0.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - Pros Holdings reported quarterly earnings of $0.13 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.04 per share a year ago [1] - The company posted revenues of $86.32 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 1.04%, and up from $80.69 million year-over-year [2] - Pros Holdings has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates four times during the same period [2] Group 2 - The stock has underperformed, losing about 22.2% since the beginning of the year, compared to the S&P 500's decline of 5.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $89.68 million, and for the current fiscal year, it is $0.61 on revenues of $360.67 million [7] - The Computer - Software industry, to which Pros Holdings belongs, is currently in the top 33% of Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Pros (PRO) Q1 2025 Earnings Call May 01, 2025 04:45 PM ET Company Participants Belinda Overdeput - Senior Director - IRAndres Reiner - President and CEOStefan Schulz - CFOScott Berg - Managing DirectorMatthew Kikkert - Equity Research AssociateNehal Chokshi - Managing Director Conference Call Participants Zane Meehan - Associate Analyst, Equity Research Operator Welcome to the PROS Holdings First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A ...

Financial Data and Key Metrics Changes - The company reported a trailing twelve month recurring calculated billings growth of 14% year over year, marking the strongest performance in ten quarters [6] - Subscription revenue reached $70.8 million, up 10% year over year, while total revenue was $86.3 million, up 7% year over year, both exceeding guidance [20] - Free cash flow improved by $6 million year over year to $1.1 million, despite Q1 typically being a seasonally high cash used quarter [19][22] - Non-GAAP earnings per share was $0.13, also exceeding guidance [23] Business Line Data and Key Metrics Changes - Recurring revenue constituted 85% of total revenue, an increase from 84% in Q1 of the previous year [20] - Non-GAAP subscription gross margin improved to 81%, an increase of over 160 basis points year over year [21] - Non-GAAP services gross margin was 13%, improving by over 460 basis points year over year [21] Market Data and Key Metrics Changes - The company saw strong demand in the travel sector, winning contracts with two of the top seven US carriers [12] - The ongoing market volatility has led to increased adoption of AI-powered pricing and selling solutions, with companies recognizing the need for real-time data-driven decisions [9][10] Company Strategy and Development Direction - The company is focused on enhancing its AI-powered pricing and selling solutions, which are deemed mission-critical in volatile markets [6][14] - The upcoming Outperform conference will showcase the latest AI innovations, emphasizing the integration of AI with customer experience [14] - The company plans to increase investments in selling and marketing in the second quarter [23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the complex selling environment due to macroeconomic uncertainties but noted strong execution and demand across B2B and travel sectors [5][34] - There is confidence in the company's ability to navigate market volatility, with an increase in inbound demand and SDR-based meetings booked [35] - The company maintains its full-year guidance despite positive momentum, citing macro risks as a consideration [62] Other Important Information - The company announced the planned retirement of its CEO, with Jeff Cotton set to take over as president and CEO [15][16] - The company exited Q1 with $170 million in cash and investments [22] Q&A Session Summary Question: Insights on the travel segment's momentum - Management noted improvements in travel bookings and highlighted innovations in offer optimization that resonate with airlines [30][31] Question: Impact of current macro conditions on business - Management indicated that the complex selling environment has not negatively impacted demand, with companies accelerating initiatives [34][35] Question: Clarification on gross margin improvements - Management explained that efficiencies in cloud solutions and automation in services have driven better gross margins [40][41] Question: Customer behavior regarding implementations - Management reported no significant changes in demand patterns, with strong demand for CPQ solutions [44] Question: Revenue guidance breakdown - Management provided a split of approximately 40% new customers and 60% existing customers, expecting this mix to remain consistent [51] Question: Go-to-market changes contributing to improved bookings - Management highlighted improvements in sales execution, marketing function, and demand generation as key contributors to better bookings [55]

PROS Holdings, Inc. Q1 2025 Investor Presentation Updated May 1, 2025 ir@pros.com © 2025 PROS, Inc. All rights reserved. Confidential and Proprietary. Disclaimer / Forward-Looking Statements This presentation 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; ability to achieve "Rule of 40"; management's confidence and optimism ...

Revenue Performance - Subscription revenue increased by 10% to $70.83 million for Q1 2025 compared to Q1 2024, contributing to a total revenue increase of 7% to $86.32 million[62][69] - Recurring revenue accounted for 85% of total revenue, with gross revenue retention rates remaining above 93%[63] - Maintenance and support revenue decreased by 24% to $2.73 million, attributed to customer churn and migration to cloud solutions[70] - Services revenue remained stable at $12.76 million, with gross profit percentages for services improving to 8% from 3%[71][74] Profitability and Margins - Subscription gross profit margin improved to 79% in Q1 2025 from 77% in Q1 2024, while total gross profit margin increased to 68% from 64%[64] - The net loss decreased significantly to 4% of total revenue in Q1 2025 from 14% in Q1 2024[68] Cash Flow and Liquidity - Operating cash flow improved to $1.2 million in Q1 2025, compared to cash used of $4.6 million in Q1 2024, due to reduced net loss and strong collections[65] - Net cash provided by operating activities for Q1 2025 was $1.2 million, a significant improvement from a net cash used of $4.6 million in Q1 2024[87] - Cash and cash equivalents stood at $160 million as of March 31, 2025, with working capital increasing to $55.5 million[83] - The net change in cash, cash equivalents, and restricted cash for Q1 2025 was a decrease of $1.96 million, compared to a decrease of $12.32 million in Q1 2024[86] Operating Expenses - Total operating expenses remained relatively stable at $62.22 million in Q1 2025, with selling and marketing expenses increasing by 6%[75] Tax and Financial Provisions - The effective tax rate was (21)% for Q1 2025, reflecting foreign income and withholding taxes, with a significant increase in the income tax provision[81] Financing Activities - Net cash used in financing activities for Q1 2025 was $3.1 million, a decrease from $7.3 million in Q1 2024, attributed to lower tax withholding payments related to employee share-based awards[89] Debt and Credit Agreements - As of March 31, 2025, there were no outstanding borrowings under the Credit Agreement, with $0.4 million of unamortized debt issuance costs included in prepaid and other current assets[92] - The Credit Agreement requires maintaining a cash balance of at least $10 million, which is included in restricted cash[93] Market Risks and Financial Condition - There are no off-balance sheet arrangements that materially affect the company's financial condition[90] - The company has not experienced any material changes in exposure to market risks[96] Accounting and Reporting - The company’s financial statements are prepared in accordance with GAAP, requiring estimates and assumptions that could affect reported amounts[95]

Financial Performance - Total revenue for Q1 2025 was $86.3 million, representing a 7% increase year-over-year from $80.7 million in Q1 2024[4] - Subscription revenue reached $70.8 million in Q1 2025, up 10% from $64.3 million in Q1 2024[6] - Gross profit for Q1 2025 was $58.4 million, a 13% improvement compared to $51.9 million in Q1 2024[4] - Operating loss improved to $(3.8) million in Q1 2025 from $(10.3) million in Q1 2024, reflecting a $6.5 million improvement[4] - Net loss narrowed to $(3.7) million in Q1 2025, compared to $(11.4) million in Q1 2024, marking a $7.7 million improvement[4] - Free cash flow improved to $1.1 million in Q1 2025, a 123% increase from $(4.9) million in Q1 2024[4] - Non-GAAP net income for Q1 2025 was $6,402,000, a significant increase of 216% from $2,029,000 in Q1 2024[33] - The company reported a net loss of $3,689,000 in Q1 2025, which is a 68% improvement from a net loss of $11,357,000 in Q1 2024[29] - Adjusted EBITDA for Q1 2025 was $8,702,000, a significant increase from $4,585,000 in Q1 2024, representing an 89% year-over-year growth[38] Revenue Guidance - The company anticipates Q2 2025 total revenue guidance of $87.0 to $88.0 million, representing a 7% increase year-over-year[9] - Subscription revenue guidance for Q2 2025 is projected at $72.0 to $72.5 million, reflecting a 10% increase compared to Q2 2024[9] - Adjusted EBITDA for full year 2025 is expected to be between $42.0 to $44.0 million, a 43% increase year-over-year[9] - The guidance for Q2 2025 projects Adjusted EBITDA between $4,000,000 and $5,000,000[38] - Full Year 2025 guidance estimates Adjusted EBITDA to be between $42,000,000 and $44,000,000[38] Asset and Liability Management - Total current assets increased to $244,062,000 as of March 31, 2025, compared to $239,116,000 at the end of 2024[27] - Total liabilities rose to $492,972,000 as of March 31, 2025, up from $488,605,000 at the end of 2024[27] - The company’s cash and cash equivalents decreased slightly to $160,023,000 from $161,983,000 at the end of 2024[27] - Deferred revenue increased to $146,113,000 in Q1 2025, up from $130,977,000 in Q4 2024, indicating growth in future revenue recognition[27] Subscription Metrics - GAAP subscription gross profit for Q1 2025 reached $56,281,000, up 13% from $49,736,000 in Q1 2024[39] - Non-GAAP subscription gross profit for Q1 2025 was $57,157,000, reflecting a 12% increase from $50,891,000 in Q1 2024[39] - Non-GAAP earnings per share for Q1 2025 was $0.13, compared to $0.04 in Q1 2024[33] - Non-GAAP subscription gross margin increased to 80.7% in Q1 2025 from 79.1% in Q1 2024[39] Operational Improvements - Share-based compensation for Q1 2025 was $10,669,000, down from $12,700,000 in Q1 2024[38] - Amortization of acquisition-related intangibles decreased to $953,000 in Q1 2025 from $1,301,000 in Q1 2024[38] - GAAP Loss from Operations for Q1 2025 improved to $(3,825,000) compared to $(10,302,000) in Q1 2024[38] Product Innovations - The company introduced new AI innovations, including PROS Sales Agent and PROS Rebate Agent, to enhance its product offerings[14]