PROS(PRO) - 2025 Q1 - Quarterly Report

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$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$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]