[February 06, 2018] |
|
PROS Holdings, Inc. Reports Fourth Quarter and Full Year 2017 Financial Results
PROS Holdings, Inc. (NYSE: PRO), a cloud software company powering the
shift to modern commerce, today announced financial results for the
fourth quarter and full year ended December 31, 2017.
"2017 was a major inflection point in our cloud transition as we
returned to year-over-year revenue growth," stated CEO Andres
Reiner. "We are pleased with our strong fourth quarter and full year
performance, exceeding the high end of guidance across all metrics. We
enter 2018 excited by the large market opportunity in front of us as we
leverage our AI platform to lead companies in making the shift to modern
commerce."
CFO Stefan Schulz said, "We continue to drive growth and scale in our
business, and we achieved two key milestones in our cloud transition in
the fourth quarter. We saw subscription revenue overtake maintenance
revenue for the first time, and we generated positive free cash flow. We
have strong momentum coming into 2018 and remain on track to accomplish
our long-term financial goals."
Fourth Quarter and Full Year 2017 Financial Highlights
Key financial results for the fourth quarter and full year 2017 are
shown below. Throughout this press release, all dollar figures are in
millions, except net loss per share. Unless otherwise noted, all results
are on a reported basis and are compared with the prior-year period.
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
Non-GAAP
|
|
|
|
Q4 2017
|
|
|
|
Q4 2016
|
|
|
|
% Change
|
|
|
|
Q4 2017
|
|
|
|
Q4 2016
|
|
|
|
% Change
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue
|
|
|
$
|
46.3
|
|
|
|
|
$
|
39.9
|
|
|
|
|
16
|
%
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
Subscription Revenue
|
|
|
19.1
|
|
|
|
|
11.0
|
|
|
|
|
74
|
%
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
Subscription and Maintenance Revenue
|
|
|
36.2
|
|
|
|
|
28.4
|
|
|
|
|
27
|
%
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
Profitability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
28.2
|
|
|
|
|
24.0
|
|
|
|
|
18
|
%
|
|
|
|
29.9
|
|
|
|
|
25.0
|
|
|
|
|
20
|
%
|
Operating Loss
|
|
|
(12.8
|
)
|
|
|
|
(16.3
|
)
|
|
|
|
nm
|
|
|
|
(5.5
|
)
|
|
|
|
(9.6
|
)
|
|
|
|
nm
|
Net Loss
|
|
|
(17.0
|
)
|
|
|
|
(18.5
|
)
|
|
|
|
nm
|
|
|
|
(4.3
|
)
|
|
|
|
(6.5
|
)
|
|
|
|
nm
|
Net Loss Per Share
|
|
|
(0.53
|
)
|
|
|
|
(0.61
|
)
|
|
|
|
nm
|
|
|
|
(0.13
|
)
|
|
|
|
(0.21
|
)
|
|
|
|
nm
|
Adjusted EBITDA
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
(4.9
|
)
|
|
|
|
(8.6
|
)
|
|
|
|
nm
|
Cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by (Used in) Operating Activities
|
|
|
4.5
|
|
|
|
|
(7.2
|
)
|
|
|
|
nm
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
Free Cash Flow
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
$
|
3.6
|
|
|
|
|
$
|
(10.0
|
)
|
|
|
|
nm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
Non-GAAP
|
|
|
|
FY 2017
|
|
|
|
FY 2016
|
|
|
|
% Change
|
|
|
|
FY 2017
|
|
|
|
FY 2016
|
|
|
|
% Change
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue
|
|
|
$
|
168.8
|
|
|
|
|
$
|
153.3
|
|
|
|
|
10
|
%
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
Subscription Revenue
|
|
|
60.5
|
|
|
|
|
38.2
|
|
|
|
|
59
|
%
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
Subscription and Maintenance Revenue
|
|
|
129.9
|
|
|
|
|
106.7
|
|
|
|
|
22
|
%
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
Annual Recurring Revenue ("ARR")
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
160.6
|
|
|
|
|
122.2
|
|
|
|
|
31
|
%
|
Profitability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
100.3
|
|
|
|
|
89.9
|
|
|
|
|
11
|
%
|
|
|
|
105.5
|
|
|
|
|
94.1
|
|
|
|
|
12
|
%
|
Operating Loss
|
|
|
(64.9
|
)
|
|
|
|
(65.4
|
)
|
|
|
|
nm
|
|
|
|
(36.3
|
)
|
|
|
|
(40.9
|
)
|
|
|
|
nm
|
Net Loss
|
|
|
(77.9
|
)
|
|
|
|
(75.2
|
)
|
|
|
|
nm
|
|
|
|
(25.5
|
)
|
|
|
|
(28.0
|
)
|
|
|
|
nm
|
Net Loss Per Share
|
|
|
(2.46
|
)
|
|
|
|
(2.47
|
)
|
|
|
|
nm
|
|
|
|
(0.81
|
)
|
|
|
|
(0.92
|
)
|
|
|
|
nm
|
Adjusted EBITDA
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
(33.7
|
)
|
|
|
|
(35.4
|
)
|
|
|
|
nm
|
Cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Operating Activities
|
|
|
(25.3
|
)
|
|
|
|
(14.3
|
)
|
|
|
|
nm
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
Free Cash Flow
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
$
|
(29.5
|
)
|
|
|
|
$
|
(24.3
|
)
|
|
|
|
nm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The attached tables provide a summary of PROS results for the period,
including a reconciliation of GAAP to non-GAAP metrics.
2017 and Recent Business Highlights
-
Released numerous new innovations enabling modern commerce, including
the Q4 introduction of Monet™,
PROS artificial intelligence analyst that delivers data science-driven
insights in PROS solutions, and the Q4 launch of PROS next-generation Guidance
solution, providing customers with an unprecedented level of
transparency and self-service capabilities in PROS cloud.
-
Extended PROS modern commerce leadership position in the travel
industry by introducing shopping, pricing and merchandising solutions
through the acquisition of Vayant
Travel Technologies based in Sofia, Bulgaria. Announced plans to expand
the Sofia office to accommodate future growth plans.
-
Named the inaugural partner to showcase PROS modern commerce solutions
for the manufacturing industry across the more than 50 Microsoft
Technology Centers (MTC) globally. MTCs educate companies on how
to accelerate their digital transformation and will feature how PROS
Smart CPQ solutions powered by Microsoft Azure modernize the sales
experience by delivering personalized offers and a fluid channel
experience integrated with Microsoft Dynamics 365.
-
Won prestigious awards around innovation, partnership and customer
success, including: Microsoft Partner of the Year awards in both the Alliance
Global Commercial ISV and U.S.
EPG, ISV - Business Applications categories in recognition of the
value that PROS delivers to customers while leveraging Microsoft
technologies; and the CRM
Watchlist Award in recognition of PROS continued impact on
customers and the market overall.
-
Strengthened leadership position in the market by being named the Constellation
ShortList™ for Pricing Optimization, and the Constellation
ShortList™ for Configure, Price, Quote Solutions, as well as
achieving the highest possible scores for reference customer
assessment and intelligence and analytics criteria in The
Forrester Wave™: Configure-Price-Quote Solutions report.
-
Successfully completed a private
offering of $106.3 million aggregate principal amount at maturity
of convertible senior notes due 2047; net proceeds were $90.5 million.
-
Appointed Tom
Dziersk as Executive Vice President of Global Sales and Celia
Fleischaker as Chief Marketing Officer to drive continued market
adoption of PROS modern commerce solutions.
Financial Outlook
PROS anticipates the following based on an estimated 32.3 million basic
weighted average shares outstanding, for the first quarter 2018, and a
22% non-GAAP estimated tax rate for the first quarter and full year 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2018 Guidance
|
|
|
|
v. Q1 2017 at Mid-Point
|
|
|
|
Full Year 2018 Guidance
|
|
|
|
v. Prior Year at Mid-Point
|
Total Revenue
|
|
|
|
$45.6 to $46.6
|
|
|
|
15%
|
|
|
|
$187.0 to $190.0
|
|
|
|
12%
|
Subscription Revenue
|
|
|
|
$19.1 to $19.6
|
|
|
|
58%
|
|
|
|
$90.0 to $91.0
|
|
|
|
49%
|
ARR
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
$186.0 to $189.0
|
|
|
|
17%
|
Non-GAAP Loss Per Share
|
|
|
|
$(0.21) to $(0.19)
|
|
|
|
nm
|
|
|
|
n/a
|
|
|
|
n/a
|
Adjusted EBITDA
|
|
|
|
$(6.8) to $(5.8)
|
|
|
|
nm
|
|
|
|
$(27.0) to $(25.0)
|
|
|
|
nm
|
Free Cash Flow
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
$(5.0) to $(2.0)
|
|
|
|
$26.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call
In conjunction with this announcement, PROS Holdings, Inc. will host a
conference call on Tuesday, February 6, 2018, 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
webcast of the conference call can be accessed under the "Investor
Relations" section of the Company's website at www.pros.com.
Following the call, an archived webcast will be available in the
"Investor Relations" section of the Company's website at www.pros.com.
A telephone replay will be available until Tuesday, February 20, 2018,
at 1-844-512-2921 (toll-free) or 1-412-317-6671 using the pass code
13675221. An archived webcast of this conference call will also be
available in the "Investor Relations" section of the Company's website
at www.pros.com.
About PROS
PROS Holdings, Inc. (NYSE: PRO) is a cloud software company powering the
shift to modern commerce by helping companies create personalized and
frictionless buying experiences for their customers. Fueled by dynamic
pricing science and machine learning, PROS solutions make it possible
for companies to price, configure and sell their products and services
in an omnichannel environment with speed, precision and consistency. Our
customers, who are leaders in their markets, benefit from decades of
data science expertise infused into our industry solutions. To learn
more, visit www.pros.com.
Forward-looking Statements
This press release contains forward-looking statements, including
statements about our future financial performance; positioning;
management's confidence and optimism; customer successes; demand for
enterprise revenue, profit realization and modern commerce software
solutions; business expansion; business predictability; ARR; revenue;
adjusted EBITDA; free cash flow; shares outstanding and effective tax
rate. The forward-looking statements contained in this press release are
based upon our historical performance and our current plans, estimates
and expectations and are not a representation that such plans, estimates
or expectations will be achieved. Factors that could cause actual
results to differ materially from those described herein include risks
related to: (a) our ability to execute on our cloud strategy, (b)
reduced revenue and cash flow resulting from our transition to a cloud
strategy, (c) threats to the security of our or our customer's data, (d)
potential business or service disruptions from our third party data
centers, cloud platform providers or other unrelated service providers,
(e) market acceptance of our new products and product enhancements, (f)
the risk that the markets for our software does not grow as anticipated,
(g) the length of our sales cycles, (h) the risk that we will not be
able to maintain historical maintenance, support and subscription
renewal rates, (i) competition from vendors of sales, pricing, revenue
management and configure-price-quote solutions as well as from companies
internally developing their own solutions, (j) potential unauthorized or
improper actions of our personnel, (k) the risk that acquisitions we
have and may enter into in the future may be difficult to integrate,
fail to achieve our objectives, disrupt our business, dilute stockholder
value or divert management attention, (l) any downturn in sales to our
target markets, (m) potential delays or other challenges related to the
implementation of our solutions, (n) the difficulties of making accurate
estimates necessary to complete a project and recognize revenue, (o)
personnel risks associated with growing a business generally, (p) the
impact that a slowdown in the world or any particular economy has on our
business sales cycles, prospects' and customers' spending decisions,
timing of implementation decisions, payment and renewal decision, (q)
our debt repayment obligations, (r) the impact of currency fluctuations
on our results of operations, and (s) civil and political unrest in
geographic regions in which we operate. Additional information relating
to the uncertainty affecting PROS' business is contained in our filings
with the Securities and Exchange Commission. These forward-looking
statements represent PROS' expectations as of the date of this press
release. Subsequent events may cause these expectations to change, and
PROS disclaims any obligations to update or alter these forward-looking
statements in the future, whether as a result of new information, future
events or otherwise.
Non-GAAP Financial Measures
PROS has provided in this release certain financial information that has
not been prepared in accordance with GAAP. This information includes
non-GAAP income (loss) from operations, annual recurring revenue,
adjusted EBITDA, free cash flow, tax rate, net income (loss) and diluted
earnings (loss) per share. PROS uses these non-GAAP financial measures
internally in analyzing its financial results and believes they are
useful to investors, as a supplement to GAAP measures, in evaluating
PROS' ongoing operational performance and cloud-first transition.
Non-GAAP financial measures should not be considered in isolation from,
or as a substitute for, financial information prepared in accordance
with GAAP. Investors are encouraged to review the reconciliation of
these non-GAAP measures to their most directly comparable GAAP financial
measure as detailed above. A reconciliation of GAAP to the non-GAAP
financial measures has been provided in the tables included as part of
this press release, and can be found, along with other financial
information, in the investor relations portion of our website. PROS' use
of non-GAAP financial measures may not be consistent with the
presentations by similar companies in PROS' industry. PROS has also
provided in this release certain forward-looking non-GAAP financial
measures, including non-GAAP income (loss) from operations, annual
recurring revenue, adjusted EBITDA, free cash flow and non-GAAP tax
rates (collectively the "non-GAAP financial measures") as follows:
Non-GAAP income (loss) from operations: Non-GAAP income (loss)
from operations excludes the impact of stock-based compensation,
amortization of acquisition-related intangibles, acquisition-related
expenses, amortization of debt discount and issuance costs, and related
taxes. Non-GAAP income (loss) from operations excludes the following
items from non-GAAP estimates:
-
Share-Based Compensation: Although share-based compensation is
an important aspect of compensation for our employees and executives,
our share-based compensation expense can vary because of changes in
our stock price and market conditions at the time of grant, varying
valuation methodologies, and the variety of award types. Since
share-based compensation expense can vary for reasons that are
generally unrelated to our performance during any particular period,
we believe this could make it difficult for investors to compare our
current financial results to previous and future periods. Therefore,
we believe it is useful to exclude share-based compensation in order
to better understand our business performance and allow investors to
compare our operating results with peer companies.
-
Amortization of Acquisition-Related Intangibles: We view
amortization of acquisition-related intangible assets, such as the
amortization of the cost associated with an acquired company's
research and development efforts, trade names, customer lists and
customer relationships, as items arising from pre-acquisition
activities determined at the time of an acquisition. While these
intangible assets are continually evaluated for impairment,
amortization of the cost of purchased intangibles is a static expense,
one that is not typically affected by operations during any particular
period.
-
Acquisition-Related Expenses: Acquisition-related expenses
include integration costs and other one-time direct costs associated
with our acquisitions. These amounts are unrelated to our core
performance during any particular period and are impacted by the
timing and size of the acquisitions. We exclude acquisition-related
expenses to provide investors a method to compare our operating
results to prior periods and to peer companies because such amounts
can vary significantly based on the frequency of acquisitions and
magnitude of acquisition expenses.
-
Amortization of Debt Discount and Issuance Costs: Amortization
of debt discount and issuance costs are related to our convertible
notes. These amounts are unrelated to our core performance during any
particular period, and therefore, we believe it is useful to exclude
these amounts in order to better understand our business performance
and allow investors to compare our results with peer companies.
-
Taxes: We exclude the tax consequences associated with non-GAAP
items to provide investors with a useful comparison of our operating
results to prior periods and to our peer companies because such
amounts can vary significantly. In the fourth quarter of 2014, we
concluded that it is more likely than not that we will be unable to
fully realize our deferred tax assets and accordingly, established a
valuation allowance against those assets. The ongoing impact of the
valuation allowance on our non-GAAP effective tax rate has been
eliminated to allow investors to better understand our business
performance and compare our operating results with peer companies.
Annual Recurring Revenue: Annual Recurring Revenue ("ARR") is
used to assess the trajectory of our cloud business. ARR means, as of a
specified date, the contracted recurring revenue, including contracts
with a future start date, together with annualized overage fees incurred
above contracted minimum transactions, and excluding perpetual and term
license agreements recognized as license revenue in accordance with
GAAP. ARR should be viewed independently of revenue and any other GAAP
measure.
Non-GAAP Tax Rate: The estimated non-GAAP effective tax rate
adjusts the tax effect to quantify the impact of the excluded non-GAAP
items.
Adjusted EBITDA: Adjusted EBITDA is defined as GAAP net income
(loss) before interest expense, provision for income taxes, depreciation
and amortization, as adjusted to eliminate the effect of stock-based
compensation cost, amortization of acquisition-related intangibles,
depreciation and amortization, integration costs and other one-time
direct costs associated with our acquisitions, and capitalized
internal-use software development costs. Adjusted EBITDA should not be
considered as an alternative to net income (loss) as an indicator of our
operating performance.
Free Cash Flow: Free cash flow is a non-GAAP financial measure
which is defined as net cash provided by (used in) operating activities,
less additions to property, plant and equipment, purchases of other
(non-acquisition-related) intangible assets and capitalized internal-use
software development costs.
These non-GAAP estimates are not measurements of financial performance
prepared in accordance with GAAP, and we are unable to reconcile these
forward-looking non-GAAP financial measures to their directly comparable
GAAP financial measures because the information described above which is
needed to complete a reconciliation is unavailable at this time without
unreasonable effort.
|
|
|
|
|
|
|
|
|
PROS Holdings, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
|
|
December 31, 2016
|
Assets:
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
160,505
|
|
|
|
|
$
|
118,039
|
|
Short-term investments
|
|
|
|
-
|
|
|
|
|
15,996
|
|
Accounts and unbilled receivables, net of allowance of $760
|
|
|
|
32,484
|
|
|
|
|
33,285
|
|
Prepaid and other current assets
|
|
|
|
9,067
|
|
|
|
|
6,337
|
|
Total current assets
|
|
|
|
202,056
|
|
|
|
|
173,657
|
|
Property and equipment, net
|
|
|
|
14,007
|
|
|
|
|
15,238
|
|
Intangibles, net
|
|
|
|
26,929
|
|
|
|
|
12,650
|
|
Goodwill
|
|
|
|
38,458
|
|
|
|
|
20,096
|
|
Other long-term assets
|
|
|
|
7,233
|
|
|
|
|
6,013
|
|
Total assets
|
|
|
|
$
|
288,683
|
|
|
|
|
$
|
227,654
|
|
Liabilities and Stockholders' Equity:
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and other liabilities
|
|
|
|
$
|
2,976
|
|
|
|
|
$
|
2,744
|
|
Accrued liabilities
|
|
|
|
6,733
|
|
|
|
|
7,279
|
|
Accrued payroll and other employee benefits
|
|
|
|
16,712
|
|
|
|
|
18,349
|
|
Deferred revenue
|
|
|
|
75,604
|
|
|
|
|
68,349
|
|
Total current liabilities
|
|
|
|
102,025
|
|
|
|
|
96,721
|
|
Long-term deferred revenue
|
|
|
|
19,591
|
|
|
|
|
11,389
|
|
Convertible debt, net
|
|
|
|
213,203
|
|
|
|
|
122,299
|
|
Other long-term liabilities
|
|
|
|
843
|
|
|
|
|
639
|
|
Total liabilities
|
|
|
|
335,662
|
|
|
|
|
231,048
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none
issued
|
|
|
|
-
|
|
|
|
|
-
|
|
Common stock, $0.001 par value, 75,000,000 shares authorized;
36,356,760 and 35,001,236 shares issued, respectively; 31,939,175
and 30,583,651 shares outstanding, respectively
|
|
|
|
36
|
|
|
|
|
35
|
|
Additional paid-in capital
|
|
|
|
207,924
|
|
|
|
|
175,678
|
|
Treasury stock, 4,417,585 common shares, at cost
|
|
|
|
(13,938
|
)
|
|
|
|
(13,938
|
)
|
Accumulated deficit
|
|
|
|
(238,185
|
)
|
|
|
|
(160,259
|
)
|
Accumulated other comprehensive loss
|
|
|
|
(2,816
|
)
|
|
|
|
(4,910
|
)
|
Total stockholders' equity
|
|
|
|
(46,979
|
)
|
|
|
|
(3,394
|
)
|
Total liabilities and stockholders' equity
|
|
|
|
$
|
288,683
|
|
|
|
|
$
|
227,654
|
|
|
|
|
|
|
|
|
|
|
PROS Holdings, Inc.
Condensed Consolidated Statements of Income (Loss)
(In thousands, except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
|
|
|
|
$
|
19,082
|
|
|
|
|
$
|
10,962
|
|
|
|
|
$
|
60,539
|
|
|
|
|
$
|
38,158
|
|
Maintenance and support
|
|
|
|
17,076
|
|
|
|
|
17,462
|
|
|
|
|
69,408
|
|
|
|
|
68,565
|
|
Total subscription, maintenance and support
|
|
|
|
36,158
|
|
|
|
|
28,424
|
|
|
|
|
129,947
|
|
|
|
|
106,723
|
|
License
|
|
|
|
1,679
|
|
|
|
|
3,636
|
|
|
|
|
5,562
|
|
|
|
|
11,814
|
|
Services
|
|
|
|
8,507
|
|
|
|
|
7,866
|
|
|
|
|
33,307
|
|
|
|
|
34,739
|
|
Total revenue
|
|
|
|
46,344
|
|
|
|
|
39,926
|
|
|
|
|
168,816
|
|
|
|
|
153,276
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
|
|
|
|
8,253
|
|
|
|
|
5,037
|
|
|
|
|
27,858
|
|
|
|
|
17,379
|
|
Maintenance and support
|
|
|
|
2,807
|
|
|
|
|
3,415
|
|
|
|
|
11,693
|
|
|
|
|
13,681
|
|
Total cost of subscription, maintenance and support
|
|
|
|
11,060
|
|
|
|
|
8,452
|
|
|
|
|
39,551
|
|
|
|
|
31,060
|
|
License
|
|
|
|
72
|
|
|
|
|
47
|
|
|
|
|
282
|
|
|
|
|
246
|
|
Services
|
|
|
|
7,015
|
|
|
|
|
7,453
|
|
|
|
|
28,733
|
|
|
|
|
32,047
|
|
Total cost of revenue
|
|
|
|
18,147
|
|
|
|
|
15,952
|
|
|
|
|
68,566
|
|
|
|
|
63,353
|
|
Gross profit
|
|
|
|
28,197
|
|
|
|
|
23,974
|
|
|
|
|
100,250
|
|
|
|
|
89,923
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
|
17,491
|
|
|
|
|
16,255
|
|
|
|
|
68,116
|
|
|
|
|
63,980
|
|
General and administrative
|
|
|
|
9,822
|
|
|
|
|
10,627
|
|
|
|
|
40,336
|
|
|
|
|
38,537
|
|
Research and development
|
|
|
|
13,592
|
|
|
|
|
13,350
|
|
|
|
|
56,021
|
|
|
|
|
52,804
|
|
Acquisition-related
|
|
|
|
107
|
|
|
|
|
-
|
|
|
|
|
720
|
|
|
|
|
-
|
|
Loss from operations
|
|
|
|
(12,815
|
)
|
|
|
|
(16,258
|
)
|
|
|
|
(64,943
|
)
|
|
|
|
(65,398
|
)
|
Convertible debt interest and amortization
|
|
|
|
(4,140
|
)
|
|
|
|
(2,376
|
)
|
|
|
|
(13,218
|
)
|
|
|
|
(9,319
|
)
|
Other income (expense), net
|
|
|
|
69
|
|
|
|
|
101
|
|
|
|
|
384
|
|
|
|
|
(38
|
)
|
Loss before income tax provision (benefit)
|
|
|
|
(16,886
|
)
|
|
|
|
(18,533
|
)
|
|
|
|
(77,777
|
)
|
|
|
|
(74,755
|
)
|
Income tax provision (benefit)
|
|
|
|
94
|
|
|
|
|
(20
|
)
|
|
|
|
149
|
|
|
|
|
470
|
|
Net loss
|
|
|
|
$
|
(16,980
|
)
|
|
|
|
$
|
(18,513
|
)
|
|
|
|
$
|
(77,926
|
)
|
|
|
|
$
|
(75,225
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
$
|
(0.53
|
)
|
|
|
|
$
|
(0.61
|
)
|
|
|
|
$
|
(2.46
|
)
|
|
|
|
$
|
(2.47
|
)
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
31,927
|
|
|
|
|
30,557
|
|
|
|
|
31,627
|
|
|
|
|
30,395
|
|
|
|
|
|
|
|
|
|
PROS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2017
|
|
|
2016
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(16,980
|
)
|
|
|
$
|
(18,513
|
)
|
|
|
|
$
|
(77,926
|
)
|
|
|
$
|
(75,225
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
3,484
|
|
|
|
2,111
|
|
|
|
|
10,531
|
|
|
|
9,507
|
|
Amortization of debt discount and issuance costs
|
|
|
2,901
|
|
|
|
1,653
|
|
|
|
|
9,264
|
|
|
|
6,439
|
|
Share-based compensation
|
|
|
5,131
|
|
|
|
6,021
|
|
|
|
|
22,796
|
|
|
|
20,466
|
|
Deferred income tax, net
|
|
|
(67
|
)
|
|
|
(24
|
)
|
|
|
|
(520
|
)
|
|
|
40
|
|
Provision for doubtful accounts
|
|
|
-
|
|
|
|
400
|
|
|
|
|
-
|
|
|
|
174
|
|
Loss on disposal of assets
|
|
|
59
|
|
|
|
19
|
|
|
|
|
59
|
|
|
|
19
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts and unbilled receivables
|
|
|
2,163
|
|
|
|
(7,228
|
)
|
|
|
|
2,022
|
|
|
|
5,671
|
|
Prepaid expenses and other assets
|
|
|
2,586
|
|
|
|
(169
|
)
|
|
|
|
(3,715
|
)
|
|
|
(915
|
)
|
Accounts payable and other liabilities
|
|
|
(1,034
|
)
|
|
|
(359
|
)
|
|
|
|
700
|
|
|
|
(2,905
|
)
|
Accrued liabilities
|
|
|
(582
|
)
|
|
|
1,914
|
|
|
|
|
(1,055
|
)
|
|
|
2,801
|
|
Accrued payroll and other employee benefits
|
|
|
3,378
|
|
|
|
4,486
|
|
|
|
|
(2,344
|
)
|
|
|
5,195
|
|
Deferred revenue
|
|
|
3,496
|
|
|
|
2,503
|
|
|
|
|
14,875
|
|
|
|
14,388
|
|
Net cash provided by (used in) operating activities
|
|
|
4,535
|
|
|
|
(7,186
|
)
|
|
|
|
(25,313
|
)
|
|
|
(14,345
|
)
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(51
|
)
|
|
|
(717
|
)
|
|
|
|
(1,286
|
)
|
|
|
(7,241
|
)
|
Purchase of equity securities
|
|
|
-
|
|
|
|
(2,000
|
)
|
|
|
|
-
|
|
|
|
(2,000
|
)
|
Acquisition of Vayant, net of cash acquired
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(34,130
|
)
|
|
|
-
|
|
Capitalized internal-use software development costs
|
|
|
(801
|
)
|
|
|
(479
|
)
|
|
|
|
(2,797
|
)
|
|
|
(1,048
|
)
|
Purchase of intangible asset
|
|
|
(50
|
)
|
|
|
(1,625
|
)
|
|
|
|
(125
|
)
|
|
|
(1,625
|
)
|
Purchases of short-term investments
|
|
|
-
|
|
|
|
(10,056
|
)
|
|
|
|
-
|
|
|
|
(154,990
|
)
|
Proceeds from maturities of short-term investments
|
|
|
-
|
|
|
|
45,000
|
|
|
|
|
15,992
|
|
|
|
141,500
|
|
Net cash (used in) provided by investing activities
|
|
|
(902
|
)
|
|
|
30,123
|
|
|
|
|
(22,346
|
)
|
|
|
(25,404
|
)
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of stock options
|
|
|
(16
|
)
|
|
|
469
|
|
|
|
|
6,331
|
|
|
|
889
|
|
Proceeds from employee stock plans
|
|
|
-
|
|
|
|
-
|
|
|
|
|
1,535
|
|
|
|
1,090
|
|
Tax withholding related to net share settlement of stock awards
|
|
|
(132
|
)
|
|
|
(223
|
)
|
|
|
|
(7,375
|
)
|
|
|
(5,467
|
)
|
Payments of notes payable
|
|
|
(54
|
)
|
|
|
-
|
|
|
|
|
(209
|
)
|
|
|
(196
|
)
|
Debt issuance costs related to Revolver
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(150
|
)
|
|
|
-
|
|
Debt issuance costs related to convertible debt
|
|
|
(305
|
)
|
|
|
-
|
|
|
|
|
(2,978
|
)
|
|
|
-
|
|
Proceeds from issuance of convertible debt, net
|
|
|
-
|
|
|
|
-
|
|
|
|
|
93,500
|
|
|
|
-
|
|
Net cash (used in) provided by financing activities
|
|
|
(507
|
)
|
|
|
246
|
|
|
|
|
90,654
|
|
|
|
(3,684
|
)
|
Effect of foreign currency rates on cash
|
|
|
20
|
|
|
|
(352
|
)
|
|
|
|
(529
|
)
|
|
|
(298
|
)
|
Net change in cash and cash equivalents
|
|
|
3,146
|
|
|
|
22,831
|
|
|
|
|
42,466
|
|
|
|
(43,731
|
)
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
157,359
|
|
|
|
95,208
|
|
|
|
|
118,039
|
|
|
|
161,770
|
|
End of period
|
|
|
$
|
160,505
|
|
|
|
$
|
118,039
|
|
|
|
|
$
|
160,505
|
|
|
|
$
|
118,039
|
|
|
PROS Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
|
|
We use these non-GAAP financial measures to assist in the
management of the Company because we believe that this information
provides a more consistent and complete understanding of the
underlying results and trends of the ongoing business due to the
uniqueness of these charges.
|
See breakdown of the reconciling line items on page 11.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Quarter over Quarter
|
|
|
Year Ended December 31,
|
|
|
Year over Year
|
|
|
|
2017
|
|
|
2016
|
|
|
% change
|
|
|
2017
|
|
|
2016
|
|
|
% change
|
GAAP gross profit
|
|
|
$
|
28,197
|
|
|
|
$
|
23,974
|
|
|
|
18
|
%
|
|
|
$
|
100,250
|
|
|
|
$
|
89,923
|
|
|
|
11
|
%
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangibles
|
|
|
1,280
|
|
|
|
481
|
|
|
|
|
|
|
3,297
|
|
|
|
1,957
|
|
|
|
|
Share-based compensation
|
|
|
402
|
|
|
|
547
|
|
|
|
|
|
|
1,971
|
|
|
|
2,267
|
|
|
|
|
Non-GAAP gross profit
|
|
|
$
|
29,879
|
|
|
|
$
|
25,002
|
|
|
|
20
|
%
|
|
|
$
|
105,518
|
|
|
|
$
|
94,147
|
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross margin
|
|
|
64.5
|
%
|
|
|
62.6
|
%
|
|
|
|
|
|
62.5
|
%
|
|
|
61.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP loss from operations
|
|
|
$
|
(12,815
|
)
|
|
|
$
|
(16,258
|
)
|
|
|
(21
|
)%
|
|
|
$
|
(64,943
|
)
|
|
|
$
|
(65,398
|
)
|
|
|
(1
|
)%
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related expenses
|
|
|
107
|
|
|
|
-
|
|
|
|
|
|
|
720
|
|
|
|
-
|
|
|
|
|
Amortization of acquisition-related intangibles
|
|
|
2,112
|
|
|
|
683
|
|
|
|
|
|
|
5,174
|
|
|
|
2,971
|
|
|
|
|
Severance
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
1,070
|
|
|
|
|
Share-based compensation
|
|
|
5,131
|
|
|
|
6,021
|
|
|
|
|
|
|
22,796
|
|
|
|
20,466
|
|
|
|
|
Total Non-GAAP adjustments
|
|
|
7,350
|
|
|
|
6,704
|
|
|
|
|
|
|
28,690
|
|
|
|
24,507
|
|
|
|
|
Non-GAAP loss from operations
|
|
|
$
|
(5,465
|
)
|
|
|
$
|
(9,554
|
)
|
|
|
(43
|
)%
|
|
|
$
|
(36,253
|
)
|
|
|
$
|
(40,891
|
)
|
|
|
(11
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP loss from operations % of total revenue
|
|
|
(11.8
|
)%
|
|
|
(23.9
|
)%
|
|
|
|
|
|
(21.5
|
)%
|
|
|
(26.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
$
|
(16,980
|
)
|
|
|
$
|
(18,513
|
)
|
|
|
(8
|
)%
|
|
|
$
|
(77,926
|
)
|
|
|
$
|
(75,225
|
)
|
|
|
4
|
%
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP adjustments affecting loss from operations
|
|
|
7,350
|
|
|
|
6,704
|
|
|
|
|
|
|
28,690
|
|
|
|
24,507
|
|
|
|
|
Amortization of debt discount and issuance costs
|
|
|
2,891
|
|
|
|
1,653
|
|
|
|
|
|
|
9,228
|
|
|
|
6,439
|
|
|
|
|
Tax impact related to non-GAAP adjustments
|
|
|
2,486
|
|
|
|
3,643
|
|
|
|
|
|
|
14,498
|
|
|
|
16,241
|
|
|
|
|
Non-GAAP net loss
|
|
|
$
|
(4,253
|
)
|
|
|
$
|
(6,513
|
)
|
|
|
(35
|
)%
|
|
|
$
|
(25,510
|
)
|
|
|
$
|
(28,038
|
)
|
|
|
(9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted loss per share
|
|
|
$
|
(0.13
|
)
|
|
|
$
|
(0.21
|
)
|
|
|
|
|
|
$
|
(0.81
|
)
|
|
|
$
|
(0.92
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing non-GAAP loss per share
|
|
|
31,927
|
|
|
|
30,557
|
|
|
|
|
|
|
31,627
|
|
|
|
30,395
|
|
|
|
|
|
|
|
|
|
|
|
PROS Holdings, Inc.
Supplemental Schedule of Non-GAAP Financial Measures
Increase (Decrease) in GAAP Amounts Reported
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Year Ended December 31,
|
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
Cost of Subscription Items
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangibles
|
|
|
1,099
|
|
|
315
|
|
|
|
2,603
|
|
|
1,277
|
Share-based compensation
|
|
|
50
|
|
|
64
|
|
|
|
237
|
|
|
249
|
Total cost of subscription items
|
|
|
$
|
1,149
|
|
|
$
|
379
|
|
|
|
$
|
2,840
|
|
|
$
|
1,526
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Maintenance Items
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangibles
|
|
|
170
|
|
|
156
|
|
|
|
652
|
|
|
639
|
Share-based compensation
|
|
|
80
|
|
|
82
|
|
|
|
298
|
|
|
328
|
Total cost of maintenance items
|
|
|
$
|
250
|
|
|
$
|
238
|
|
|
|
$
|
950
|
|
|
$
|
967
|
|
|
|
|
|
|
|
|
|
|
|
Cost of License Items
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangibles
|
|
|
11
|
|
|
10
|
|
|
|
42
|
|
|
41
|
Total cost of license items
|
|
|
$
|
11
|
|
|
$
|
10
|
|
|
|
$
|
42
|
|
|
$
|
41
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Services Items
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
|
272
|
|
|
401
|
|
|
|
1,436
|
|
|
1,690
|
Total cost of services items
|
|
|
$
|
272
|
|
|
$
|
401
|
|
|
|
$
|
1,436
|
|
|
$
|
1,690
|
|
|
|
|
|
|
|
|
|
|
|
Sales and Marketing Items
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangibles
|
|
|
832
|
|
|
202
|
|
|
|
1,877
|
|
|
1,008
|
Severance
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
1,070
|
Share-based compensation
|
|
|
1,035
|
|
|
1,265
|
|
|
|
4,348
|
|
|
3,824
|
Total sales and marketing items
|
|
|
$
|
1,867
|
|
|
$
|
1,467
|
|
|
|
$
|
6,225
|
|
|
$
|
5,902
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative Items
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangibles
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
6
|
Share-based compensation
|
|
|
2,617
|
|
|
2,773
|
|
|
|
11,163
|
|
|
9,040
|
Total general and administrative items
|
|
|
$
|
2,617
|
|
|
$
|
2,773
|
|
|
|
$
|
11,163
|
|
|
$
|
9,046
|
|
|
|
|
|
|
|
|
|
|
|
Research and Development Items
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
|
1,077
|
|
|
1,436
|
|
|
|
5,314
|
|
|
5,335
|
Total research and development items
|
|
|
$
|
1,077
|
|
|
$
|
1,436
|
|
|
|
$
|
5,314
|
|
|
$
|
5,335
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related expenses
|
|
|
$
|
107
|
|
|
$
|
-
|
|
|
|
$
|
720
|
|
|
$
|
-
|
|
|
|
|
|
|
|
PROS Holdings, Inc.
Supplemental Reconciliation of GAAP to Non-GAAP Financial
Measures
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Year Ended December 31,
|
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
GAAP Loss from Operations
|
|
|
$
|
(12,815
|
)
|
|
$
|
(16,258
|
)
|
|
|
$
|
(64,943
|
)
|
|
$
|
(65,398
|
)
|
Acquisition-related expenses
|
|
|
107
|
|
|
-
|
|
|
|
720
|
|
|
-
|
|
Amortization of acquisition-related intangibles
|
|
|
2,112
|
|
|
683
|
|
|
|
5,174
|
|
|
2,971
|
|
Severance
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
1,070
|
|
Share-based compensation
|
|
|
5,131
|
|
|
6,021
|
|
|
|
22,796
|
|
|
20,466
|
|
Depreciation
|
|
|
1,372
|
|
|
1,428
|
|
|
|
5,357
|
|
|
6,536
|
|
Capitalized internal-use software development costs
|
|
|
(801
|
)
|
|
(479
|
)
|
|
|
(2,797
|
)
|
|
(1,048
|
)
|
Adjusted EBITDA
|
|
|
$
|
(4,894
|
)
|
|
$
|
(8,605
|
)
|
|
|
$
|
(33,693
|
)
|
|
$
|
(35,403
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
$
|
4,535
|
|
|
$
|
(7,186
|
)
|
|
|
$
|
(25,313
|
)
|
|
$
|
(14,345
|
)
|
Purchase of property and equipment
|
|
|
(51
|
)
|
|
(717
|
)
|
|
|
(1,286
|
)
|
|
(7,241
|
)
|
Purchase of intangible asset
|
|
|
(50
|
)
|
|
(1,625
|
)
|
|
|
(125
|
)
|
|
(1,625
|
)
|
Capitalized internal-use software development costs
|
|
|
(801
|
)
|
|
(479
|
)
|
|
|
(2,797
|
)
|
|
(1,048
|
)
|
Free Cash Flow
|
|
|
$
|
3,633
|
|
|
$
|
(10,007
|
)
|
|
|
$
|
(29,521
|
)
|
|
$
|
(24,259
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance
|
|
|
Q1 2018 Guidance
|
|
|
Full Year 2018 Guidance
|
|
|
|
Low
|
|
High
|
|
|
Low
|
|
High
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
GAAP Loss from Operations
|
|
|
$
|
(16,000
|
)
|
|
$
|
(15,000
|
)
|
|
|
$
|
(61,000
|
)
|
|
$
|
(59,000
|
)
|
Amortization of acquisition-related intangibles
|
|
|
2,100
|
|
|
2,100
|
|
|
|
7,900
|
|
|
7,900
|
|
Share-based compensation
|
|
|
6,100
|
|
|
6,100
|
|
|
|
22,900
|
|
|
22,900
|
|
Depreciation
|
|
|
1,300
|
|
|
1,300
|
|
|
|
4,400
|
|
|
4,400
|
|
Capitalized internal-use software development costs
|
|
|
(300
|
)
|
|
(300
|
)
|
|
|
(1,200
|
)
|
|
(1,200
|
)
|
Adjusted EBITDA
|
|
|
$
|
(6,800
|
)
|
|
$
|
(5,800
|
)
|
|
|
$
|
(27,000
|
)
|
|
$
|
(25,000
|
)
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180206006182/en/
[ Back To TMCnet.com's Homepage ]
|