PROS Holdings, Inc., a leading provider of AI-powered SaaS pricing, CPQ, revenue management, and digital offer marketing solutions, announced financial results for the third quarter ended September 30, 2023.
“We delivered a strong third quarter, exceeding our guidance ranges across all metrics, delivering 16% subscription revenue growth and more than $17 million of improvement to free cash flow year-over-year,” stated CEO Andres Reiner. “We are delivering on our growth objectives while driving incredible improvements to our operational efficiency, a testament to our team's relentless focus on achieving our goal of being a rule of 40 company by 2026.”
Third Quarter 2023 Financial Highlights
Key financial results for the third quarter 2023 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 |
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|
Q3 2023 |
Q3 2022 |
Change |
Q3 2023 |
Q3 2022 |
Change |
||||||
|
Revenue: |
|||||||||||
|
Total Revenue |
$77.3 |
$70.3 |
10% |
n/a |
n/a |
n/a |
|||||
|
Subscription Revenue |
$60.0 |
$51.8 |
16% |
n/a |
n/a |
n/a |
|||||
|
Subscription and Maintenance Revenue |
$64.7 |
$58.8 |
10% |
n/a |
n/a |
n/a |
|||||
|
Profitability: |
|||||||||||
|
Gross Profit |
$48.8 |
$42.7 |
14% |
$50.9 |
$45.3 |
12% |
|||||
|
Operating (Loss) Income |
$(7.8) |
$(16.2) |
$8.3 |
$4.5 |
$(3.3) |
$7.9 |
|||||
|
Net (Loss) Income |
$(13.9) |
$(13.9) |
$— |
$4.0 |
$(2.9) |
$6.9 |
|||||
|
Net (Loss) Earnings Per Share |
$(0.30) |
$(0.31) |
$0.01 |
$0.09 |
$(0.06) |
$0.15 |
|||||
|
Adjusted EBITDA |
n/a |
n/a |
n/a |
$5.6 |
$(2.2) |
$7.8 |
|||||
|
Cash: |
|||||||||||
|
Net Cash Provided by (Used in) Operating Activities |
$8.7 |
$(9.0) |
$17.7 |
n/a |
n/a |
n/a |
|||||
|
Free Cash Flow |
n/a |
n/a |
n/a |
$8.5 |
$(9.1) |
$17.6 |
|||||
|
The attached table provides a summary of PROS results for the period, including a reconciliation of GAAP to non-GAAP metrics. |
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Recent Business Highlights
- Welcomed many new customers who are adopting the PROS Platform such as Genesis Energy, GOL Airlines, JetSMART, SKS Airways, and Trivium Packaging, among others.
- Expanded adoption of the PROS Platform within existing customers including Air New Zealand, Graybar, Ingredion, Spire Healthcare, and Turkish Airlines, among others.
- Announced the go live of PROS Smart Price Optimization and Management for Qatar Airways Cargo, the third largest air cargo carrier in the world by volume; PROS now powers online bookings across Qatar Cargo’s entire network, providing their customers an enhanced digital buying experience that allows immediate online booking confirmation with accurate and personalized pricing.
- Launched registration for the 2024 Outperform with PROS Conference, one of the preeminent AI conferences in the world, scheduled for May 20-22, 2024 in Orlando, FL; the conference will bring together experts from across industries to discuss how AI can drive business forward.
- Awarded one of the “Best Technology Companies to Work For” by U.S. News in recognition of our people-first culture; the scorecard cited PROS as having exceptionally high rankings by employees across areas such as company stability, belongingness and esteem, and opportunities for career development.
- Selected to present PROS AI team’s published paper “Machine Learning based Framework for Robust Price-Sensitivity Estimation with Application to Airline Pricing” at the prestigious and highly selective 29th Annual KDD Conference, the premier international forum for data mining researchers and practitioners.
- Recently completed the exchange of approximately 85% of PROS outstanding convertible notes due in May 2024 for newly issued convertible notes due in September 2027 under the existing indenture for the 2027 notes; the exchange shifts the maturity of most of PROS debt to 2027 while slightly lowering the total amount of convertible debt outstanding at par value.
Financial Outlook
PROS currently anticipates the following based on an estimated 47.5 million diluted weighted average shares outstanding for the fourth quarter of 2023 and a 22% non-GAAP estimated tax rate for the fourth quarter and full year 2023.
|
Q4 2023 Guidance |
v. Q4 2022 at Mid |
Full Year 2023 |
v. Prior Year at Mid |
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|
Total Revenue |
$76.0 to $77.0 |
8% |
$302.2 to $303.2 |
10% |
|||
|
Subscription Revenue |
$60.0 to $60.5 |
13% |
$233.3 to $233.8 |
14% |
|||
|
Subscription ARR |
n/a |
n/a |
$251.0 to $254.0 |
11% |
|||
|
Non-GAAP Earnings Per Share |
$0.03 to $0.05 |
$0.02 |
n/a |
n/a |
|||
|
Adjusted EBITDA |
$3.0 to $4.0 |
$1.1 |
$6.5 to $7.5 |
$21.9 |
|||
|
Free Cash Flow |
n/a |
n/a |
$3.5 to $6.5 |
$26.7 |
Conference Call
In conjunction with this announcement, PROS Holdings, Inc. will host a conference call on Tuesday, October 31, 2023, at 4:45 p.m. ET 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 Tuesday, November 7, 2023, 11:59 PM ET at 1-844-512-2921 (toll-free) or 1-412-317-6671 using the pass code 13741806.
