PROS(US:PRO)2025-07-31 20:21PROS Holdings, Inc. Q2 2025 Earnings Release Financial Highlights 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 quarter2 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 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 - Expanded its customer base with new clients including Air Greenland, Aurigny Air, HellermannTyton, Lennox, Louis Dreyfus, and RHI Magnesita7 - Increased platform adoption within existing major customers like American Airlines, BASF, Carrier, and Saint-Gobain7 - Announced a strategic partnership with Commerce to integrate enterprise-grade pricing and CPQ with eCommerce solutions, targeting B2B merchants14 - 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 year14 Financial Outlook 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 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 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 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 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 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 extinguishment171824 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 |