PROS Holdings, Inc., the CFO’s best-kept secret for profitable growth, today announced financial results for the fourth quarter and full year ended December 31, 2022.
“I’m proud of our team for their strong execution in delivering 15% subscription revenue growth in 2022 while driving greater efficiencies in our business,” stated CEO Andres Reiner. “Our market-leading profit and revenue optimization solutions are mission critical for businesses looking to thrive in economic uncertainty and fuel profitable growth. We enter this year well positioned to capitalize on the market opportunity in front of us.”
CFO Stefan Schulz said, “In 2022 we consistently drove revenue outperformance while delivering positive adjusted EBITDA in the second half of the year, despite a challenging economic environment. We are now projecting to generate positive adjusted EBITDA and free cash flow in 2023, accelerating our path to our long-term profitability goals.”
Fourth Quarter and Full Year 2022 Financial Highlights
Key financial results for the fourth quarter and full year 2022 are shown below. Throughout this press release all dollar figures are in millions, except net (loss) earnings per share. Unless otherwise noted, all results are on a reported basis and are compared with the prior-year period.
|
GAAP |
Non-GAAP |
|||||||||||||||||
|
Q4 2022 |
Q4 2021 |
Change |
Q4 2022 |
Q4 2021 |
Change |
|||||||||||||
|
Revenue: |
||||||||||||||||||
|
Total Revenue |
$70.9 |
$65.0 |
9% |
n/a |
n/a |
n/a |
||||||||||||
|
Subscription Revenue |
$53.1 |
$47.0 |
13% |
n/a |
n/a |
n/a |
||||||||||||
|
Subscription and Maintenance Revenue |
$59.5 |
$55.4 |
7% |
n/a |
n/a |
n/a |
||||||||||||
|
Profitability: |
||||||||||||||||||
|
Gross Profit |
$43.5 |
$39.0 |
11% |
$46.2 |
$40.7 |
14% |
||||||||||||
|
Operating (Loss) Income |
$(14.9) |
$(21.6) |
$6.8 |
$1.2 |
$(8.2) |
$9.4 |
||||||||||||
|
Net (Loss) Income |
$(17.3) |
$(23.6) |
$6.3 |
$1.1 |
$(7.2) |
$8.3 |
||||||||||||
|
Net (Loss) Earnings Per Share |
$(0.38) |
$(0.53) |
$0.15 |
$0.02 |
$(0.16) |
$0.18 |
||||||||||||
|
Adjusted EBITDA |
n/a |
n/a |
n/a |
$2.4 |
$(6.4) |
$8.7 |
||||||||||||
|
Cash: |
||||||||||||||||||
|
Net Cash Used in Operating Activities |
$(2.0) |
$(1.0) |
$(1.0) |
n/a |
n/a |
n/a |
||||||||||||
|
Free Cash Flow |
n/a |
n/a |
n/a |
$1.1 |
$(1.3) |
$2.4 |
||||||||||||
|
GAAP |
Non-GAAP |
|||||||||||||||||
|
FY 2022 |
FY 2021 |
Change |
FY 2022 |
FY 2021 |
Change |
|||||||||||||
|
Revenue: |
||||||||||||||||||
|
Total Revenue |
$276.1 |
$251.4 |
10% |
n/a |
n/a |
n/a |
||||||||||||
|
Subscription Revenue |
$204.0 |
$178.0 |
15% |
n/a |
n/a |
n/a |
||||||||||||
|
Subscription and Maintenance Revenue |
$232.6 |
$213.1 |
9% |
n/a |
n/a |
n/a |
||||||||||||
|
Annual Recurring Revenue ("ARR") |
n/a |
n/a |
n/a |
$245.3 |
$226.7 |
8% |
||||||||||||
|
Annual Recurring Revenue in constant currency |
n/a |
n/a |
n/a |
$247.5 |
$226.7 |
9% |
||||||||||||
|
Subscription ARR |
n/a |
n/a |
n/a |
$227.0 |
$195.1 |
16% |
||||||||||||
|
Subscription ARR in constant currency |
n/a |
n/a |
n/a |
$229.0 |
$195.1 |
17% |
||||||||||||
|
Profitability: |
||||||||||||||||||
|
Gross Profit |
$166.1 |
$146.5 |
13% |
$176.9 |
$152.1 |
16% |
||||||||||||
|
Operating Loss |
$(78.1) |
$(74.3) |
$(3.8) |
$(20.1) |
$(32.9) |
$12.8 |
||||||||||||
|
Net Loss |
$(82.2) |
$(81.2) |
$(1.0) |
$(18.0) |
$(29.1) |
$11.1 |
||||||||||||
|
Net Loss Per Share |
$(1.82) |
$(1.83) |
$0.01 |
$(0.40) |
$(0.66) |
$0.26 |
||||||||||||
|
Adjusted EBITDA |
n/a |
n/a |
n/a |
$(14.9) |
$(24.8) |
$10.0 |
||||||||||||
|
Cash: |
||||||||||||||||||
|
Net Cash Used in Operating Activities |
$(23.9) |
$(18.6) |
$(5.4) |
n/a |
n/a |
n/a |
||||||||||||
|
Free Cash Flow |
n/a |
n/a |
n/a |
$(21.7) |
$(20.2) |
$(1.5) |
||||||||||||
The attached table provides a summary of PROS results for the period, including a reconciliation of GAAP to non-GAAP metrics.
Recent Business Highlights
- Welcomed new customerswho are adopting PROS solutions such as Aegean Airlines, Air Albania, Auto Wares, GE Power, Greater Bay Airlines, Sidel, Signature Aviation, Unlimited Technology and Vector Security, among others.
- Launched our next generation of Price Optimization powered by PROS Gen IV AIwhich makes PROS the first in the market to drive hyper-personalized price recommendations using neural network technology.
- Announced an Analyst Day event to take place on Tuesday, May 23, 2023, during our 2023 Outperformuser conference in Denver, CO; investors who wish to attend the full conference will receive a discounted conference rate - register today.
- Recognized as one of PEOPLE’s 2022 Companies that Care, a list of the top 100 US companies that have succeeded in business while demonstrating outstanding respect, care, and concern for their employees.
Financial Outlook
PROS currently anticipates the following based on an estimated 46.0 million basic weighted average shares outstanding for the first quarter of 2023 and a 22% non-GAAP estimated tax rate for the first quarter and full year 2023.
|
Q1 2023 Guidance |
v. Q1 2022 at Mid-Point |
Full Year 2023 Guidance |
v. Prior Year at Mid-Point |
||||
|
Total Revenue |
$70.4 to $71.4 |
7% |
$293.0 to $296.0 |
7% |
|||
|
Subscription Revenue |
$54.0 to $54.5 |
11% |
$230.7 to $232.7 |
14% |
|||
|
Subscription ARR |
n/a |
n/a |
$250.0 to $253.0 |
11% |
|||
|
Non-GAAP Loss Per Share |
$(0.12) to $(0.09) |
$0.11 |
n/a |
n/a |
|||
|
Adjusted EBITDA |
$(4.0) to $(3.0) |
$5.6 |
$3.0 to $6.0 |
$19.4 |
|||
|
Free Cash Flow |
n/a |
n/a |
$2.0 to $6.0 |
$25.7 |
Conference Call
In conjunction with this announcement, PROS Holdings, Inc. will host a conference call on Thursday, February 9, 2023, at 4:45 p.m. EST to discuss the Company’s financial results and business outlook. To access this call, dial 1-877-407-9039 (toll-free) or 1-201-689-8470. The live and archived webcasts of this call can be accessed under the “Investor Relations” section of the Company’s website at www.pros.com.
A telephone replay will be available until Thursday, February 16, 2023, 11:59 PM EST at 1-844-512-2921 (toll-free) or 1-412-317-6671 using the pass code 13735564.
