PROS Holdings, Inc., a leading provider of AI-powered SaaS pricing, CPQ, revenue management, and digital offer marketing solutions, announced financial results for the fourth quarter and full year ended December 31, 2023.
“Our team delivered an outstanding 2023, outperforming our subscription ARR, revenue, and free cash flow generation goals for the year,” stated CEO Andres Reiner. “The PROS value proposition has never been more relevant as businesses continue to lean into digitization, automation, and AI to fuel profitable growth. We continue to set the pace of AI innovation in our markets, and our platform strategy has made our AI innovations easier than ever to adopt. We enter 2024 well-positioned to capitalize on the incredible market opportunity in front of us.”
Fourth Quarter and Full Year 2023 Financial Highlights
Key financial results for the fourth quarter and full year 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 |
||||||||||
|
Q4 2023 |
Q4 2022 |
Change |
Q4 2023 |
Q4 2022 |
Change |
||||||
|
Revenue: |
|||||||||||
|
Total Revenue |
$77.5 |
$70.9 |
9% |
n/a |
n/a |
n/a |
|||||
|
Subscription Revenue |
$60.8 |
$53.1 |
14% |
n/a |
n/a |
n/a |
|||||
|
Subscription and Maintenance Revenue |
$65.2 |
$59.5 |
10% |
n/a |
n/a |
n/a |
|||||
|
Profitability: |
|||||||||||
|
Gross Profit |
$48.7 |
$43.5 |
12% |
$50.8 |
$46.2 |
10% |
|||||
|
Operating (Loss) Income |
$(10.6) |
$(14.9) |
$4.3 |
$1.5 |
$1.2 |
$0.2 |
|||||
|
Net (Loss) Income |
$(10.2) |
$(17.3) |
$7.2 |
$1.1 |
$1.1 |
$— |
|||||
|
Net (Loss) Earnings Per Share |
$(0.22) |
$(0.38) |
$0.16 |
$0.02 |
$0.02 |
$— |
|||||
|
Adjusted EBITDA |
n/a |
n/a |
n/a |
$2.5 |
$2.4 |
$0.1 |
|||||
|
Cash: |
|||||||||||
|
Net Cash Provided by (Used in) Operating Activities |
$13.8 |
$(2.0) |
$15.8 |
n/a |
n/a |
n/a |
|||||
|
Free Cash Flow |
n/a |
n/a |
n/a |
$13.6 |
$1.1 |
$12.6 |
|||||
|
GAAP |
Non-GAAP |
||||||||||
|
FY 2023 |
FY 2022 |
Change |
FY 2023 |
FY 2022 |
Change |
||||||
|
Revenue: |
|||||||||||
|
Total Revenue |
$303.7 |
$276.1 |
10% |
n/a |
n/a |
n/a |
|||||
|
Subscription Revenue |
$234.0 |
$204.0 |
15% |
n/a |
n/a |
n/a |
|||||
|
Subscription and Maintenance Revenue |
$254.0 |
$232.6 |
9% |
n/a |
n/a |
n/a |
|||||
|
Subscription Annual Recurring Revenue ("ARR") |
n/a |
n/a |
n/a |
$259.0 |
$227.0 |
14% |
|||||
|
Subscription ARR in constant currency |
n/a |
n/a |
n/a |
$257.9 |
$227.0 |
14% |
|||||
|
Profitability: |
|||||||||||
|
Gross Profit |
$188.4 |
$166.1 |
13% |
$197.7 |
$176.9 |
12% |
|||||
|
Operating (Loss) Income |
$(50.6) |
$(78.1) |
$27.5 |
$1.5 |
$(20.1) |
$21.6 |
|||||
|
Net (Loss) Income |
$(56.4) |
$(82.2) |
$25.9 |
$2.2 |
$(18.0) |
$20.3 |
|||||
|
Net (Loss) Earnings Per Share |
$(1.22) |
$(1.82) |
$0.60 |
$0.05 |
$(0.40) |
$0.45 |
|||||
|
Adjusted EBITDA |
n/a |
n/a |
n/a |
$6.0 |
$(14.9) |
$20.9 |
|||||
|
Cash: |
|||||||||||
|
Net Cash Provided by (Used in) Operating Activities |
$9.9 |
$(23.9) |
$33.8 |
n/a |
n/a |
n/a |
|||||
|
Free Cash Flow |
n/a |
n/a |
n/a |
$11.4 |
$(21.7) |
$33.1 |
|||||
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 many new customers who are adopting the PROS Platform such as Air Montenegro, Castrol, Endress + Hauser, Etac, Hammond Power Solutions, ICL Group, Kaiser + Kraft, Really Cool Airlines, Saudia, and Schneider Electric, among others.
- Expanded adoption of the PROS Platform within existing customers including Air Canada, Air Europa, BASF, Carrier, Graybar, Hewlett Packard Enterprise, Japan Airlines, K-LINE, SKS Airways, Smith & Nephew, and Spire Healthcare, among others.
- Released over 400 new features in the PROS Platform in 2023 including ground-breaking industry-first innovations such as PROS Gen IV Price Optimization, Capacity-Aware Optimization, Collaborative Quoting, and Dynamic Pricing of Ancillaries, among others, which captivated the market, driving new customer acquisition and customer expansions throughout the year.
- Processed 3.4 trillion transactions through the PROS Platform in 2023, with a remarkable 1 trillion transactions processed in the fourth quarter alone – a more than 50% increase year-over-year; the volume of data PROS is processing is a testament to the immense value we deliver to our customers and the ongoing expansion of adoption of our solutions.
- PROS AI team’s research paper on “Revenue Management without Demand Forecasting: A Data-Driven Approach for Bid Price Generation” was accepted by the Journal of Revenue and Pricing Management; the paper details the research behind PROS Capacity-Aware Price Optimization AI, PROS recently launched AI solution that optimizes price strategy in scenarios where a business faces the dual challenge of diminishing supply and unpredictable demand.
- Continued to drive significant value for our customers, as highlighted by many new customer testimonials on PROS website, including one featuring Jen Kohlmeyer, Director of Pricing and Profitability at Crescent Electric Supply Company, on how using PROS AI-powered platform fuels profitable growth by automating manual processes, improving efficiencies, and driving optimized pricing even in volatile markets.
Financial Outlook
PROS currently anticipates the following based on an estimated 48.1 million diluted weighted average shares outstanding for the first quarter of 2024 and a 22% non-GAAP estimated tax rate for the first quarter and full year 2024.
|
Q1 2024 Guidance |
v. Q1 2023 at Mid-Point |
Full Year 2024 Guidance |
v. Prior Year at Mid-Point |
||||
|
Total Revenue |
$79.0 to $80.0 |
9% |
$332.0 to $334.0 |
10% |
|||
|
Subscription Revenue |
$63.0 to $63.5 |
13% |
$263.0 to $265.0 |
13% |
|||
|
Subscription ARR |
n/a |
n/a |
$289.0 to $292.0 |
12% |
|||
|
Non-GAAP Earnings Per Share |
$0.00 to $0.02 |
$0.07 |
n/a |
n/a |
|||
|
Adjusted EBITDA |
$0.7 to $1.7 |
$3.5 |
$16.0 to $19.0 |
$11.5 |
|||
|
Free Cash Flow |
n/a |
n/a |
$22.0 to $26.0 |
$12.6 |
Conference Call
In conjunction with this announcement, PROS Holdings, Inc. will host a conference call on Thursday, February 8, 2024, 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 Thursday, February 15, 2024, 11:59 PM ET at 1-844-512-2921 (toll-free) or 1-412-317-6671 using the pass code 13743793.
