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** |

Core Insights - PROS Holdings, Inc. and Commerce have formed a strategic partnership aimed at redefining B2B digital commerce through AI-powered pricing and selling solutions [1][2][3] Company Overview - PROS Holdings, Inc. is a leading provider of SaaS solutions that optimize omnichannel shopping and selling experiences, leveraging predictive AI, real-time analytics, and automation to enhance pricing and product recommendations [5] - Commerce operates an open, AI-driven commerce ecosystem, connecting various tools and systems to empower businesses to innovate and grow, serving a diverse range of clients [6] Industry Trends - B2B buyers are increasingly demanding accuracy, speed, and transparency throughout the purchasing journey, necessitating advanced solutions to handle the complexities of large-scale operations [2] - The partnership aims to address these demands by integrating PROS' enterprise-grade pricing and CPQ with Commerce's applications, resulting in fewer delays and reduced errors [2][3] Strategic Implications - The collaboration is expected to enable businesses to optimize pricing, streamline quoting processes, and deliver real-time offers, thereby enhancing buyer confidence and accelerating decision-making [3] - This partnership is positioned to set a new standard for modern commerce, impacting not only B2B but also B2C retailers managing large, dynamic catalogs [4]

Summary of PROS Update / Briefing June 13, 2025 Company Overview - **Company**: PROS - **Industry**: Technology (specifically focused on pricing and revenue optimization solutions) Key Points and Arguments Leadership Transition - Jeff Cotton has recently taken over as President and CEO, focusing on understanding the company and its customers during his initial weeks [4][5] - The company is experiencing significant opportunities for growth, particularly in expanding existing customer relationships and cross-selling products [6][7] Market Opportunities - There is a strong potential for expanding the customer base in both B2B and travel sectors, with existing customers showing interest in additional products [6][7] - The company is actively pursuing partnerships in the CRM, e-commerce, and ERP spaces to enhance deal flow and market presence [8] Financial Performance and Guidance - PROS reaffirmed its Q2 guidance, indicating that business performance remains strong despite recent leadership changes [12][14] - The company executed a convertible debt transaction worth $235 million, which involved exchanging existing bonds for new ones, effectively reducing debt levels [15][18] AI and Competitive Advantage - PROS maintains a competitive edge through its proprietary algorithms and machine learning models, which are tailored to customer-specific data rather than general public data [20][21] - The company emphasizes the importance of real-time predictions in pricing and revenue optimization, which standard LLMs cannot provide [21][22] Sales Strategy - The company is focused on accelerating deal velocity and expanding its sales approach, aiming to increase the number of opportunities while maintaining a strong win rate [25][26] - There is a commitment to leveraging AI to improve productivity and drive growth without increasing headcount [28][29] Partnerships and Market Position - PROS is exploring strategic partnerships, particularly in the airline sector, to enhance its competitive positioning and offer differentiated solutions [44][46] - The company is looking to establish relationships with management consulting firms to integrate PROS solutions into their travel offerings [46] Future Outlook - The leadership is committed to the "Rule of 40" framework, aiming for balanced growth in free cash flow and profitability while investing in market opportunities [28][30] - Jeff Cotton emphasizes the importance of aligning the executive team around go-to-market strategies to drive growth and execution [36][48] Additional Important Content - The company is focused on maintaining a stable capital structure while providing flexibility for future growth initiatives [18] - The leadership transition is seen as an opportunity to enhance alignment and execution within the organization [36][48]

Summary of PROS Holdings Conference Call Company Overview - **Company**: PROS Holdings - **Industry**: AI-powered pricing and revenue management solutions - **Core Focus**: Optimizing shopping and selling experiences through AI solutions, including revenue management, price optimization, and CPQ (Configure Price Quote) [12][10][11] Key Points Leadership Transition - **New CEO**: Jeff Cotton has taken over from long-time CEO Andres, who served for over 15 years [15][14] - **CEO Selection Criteria**: Experience in technology, go-to-market strategies, and alignment with company culture were key factors in the selection [16][17] Business Strategy and Goals - **Long-term Objectives**: The company aims to be a "Rule of 40" company, balancing revenue growth and free cash flow margins [19][20] - **AI Integration**: Continued emphasis on infusing AI into all aspects of the business, both in product offerings and internal operations [21][22] - **Channel Strategy**: Plans to diversify go-to-market strategies beyond direct sales to include partnerships and other channels [22] Market Trends and Opportunities - **B2B Market Dynamics**: Increased volatility in pricing strategies due to market conditions has led to a greater willingness among B2B companies to adopt AI solutions for pricing [24][25] - **Travel Industry Recovery**: The travel sector, particularly passenger airlines, is showing signs of recovery and increased interest in revenue optimization solutions [26][27] - **Real-time Pricing Capabilities**: PROS offers real-time pricing solutions that can react to market changes in as little as 400 milliseconds, providing a competitive edge [29] Financial Performance and Projections - **Revenue Guidance**: Projected revenue for the year is approximately $361 million, with 85% recurring revenue from a strong SaaS model [13] - **Backlog and Growth**: The company has a healthy backlog that is expected to drive growth in the second half of the year [60][61] Product Innovations - **Agentic AI**: Introduction of Agentic AI to enhance product capabilities and customer value, with plans to expand the number of agents on the platform [67][68] - **Dynamic Ancillary Pricing**: New product aimed at optimizing ancillary revenue streams for airlines, which is becoming increasingly important for profitability [36] Customer Engagement and Feedback - **Customer Testimonials**: Positive feedback from customers at the Outperform conference highlighted the effectiveness and adaptability of PROS solutions compared to competitors [68][70] Margin Management - **Margin Expansion**: Focus on improving free cash flow margins through AI integration and operational efficiencies, with confidence in achieving targets by 2027 [64][65] Additional Insights - **Sales Team Tenure**: Increased average tenure of sales representatives is contributing to improved sales effectiveness and shorter sales cycles [30] - **Industry Focus**: PROS is seeing traction across various industries, including industrial manufacturing, chemicals, energy, and food, indicating a broad market opportunity [43][44] This summary encapsulates the key insights and strategic directions discussed during the PROS Holdings conference call, highlighting the company's focus on AI, market recovery, and growth potential.

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]