PROS Holdings, Inc. Reports Second Quarter 2017 Financial Results
- Subscription revenue up 47% year-over-year.
- Recurring revenue comprised 76% of total revenue, compared with 70% in the same period last
year.
- Won Microsoft Alliance Global Commercial ISV Partner of the Year Award.
PROS Holdings, Inc. (NYSE:PRO), a cloud software company powering the shift to modern commerce, today announced financial
results for the second quarter ended June 30, 2017.
CEO Andres Reiner stated, “We are excited to see our strategic vision continue to unfold with another solid performance in the
second quarter. On the strength of our land and expand strategy and our industry approach, we grew subscription revenue 47%
year-over-year, exceeding the high end of guidance. Our rich history in AI and machine learning puts us in a strong position to
capitalize on a large market opportunity to power modern commerce.”
Second Quarter 2017 Financial Highlights
Key financial results for the second quarter 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 |
|
|
Q2 2017 |
|
Q2 2016 |
|
% Change |
|
Q2 2017 |
|
Q2 2016 |
|
% Change |
| Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
| Total Revenue |
|
$ |
40.4 |
|
|
$ |
37.0 |
|
|
9% |
|
n/a |
|
n/a |
|
n/a |
| Subscription Revenue |
|
13.4 |
|
|
9.1 |
|
|
47% |
|
n/a |
|
n/a |
|
n/a |
| Subscription and Maintenance Revenue |
|
30.6 |
|
|
25.9 |
|
|
18% |
|
n/a |
|
n/a |
|
n/a |
| Profitability: |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Loss |
|
(16.7 |
) |
|
(18.1 |
) |
|
nm |
|
(10.1 |
) |
|
(11.4 |
) |
|
nm |
| Net Loss |
|
(19.5 |
) |
|
(20.5 |
) |
|
nm |
|
(7.0 |
) |
|
(7.8 |
) |
|
nm |
| Net Loss Per Share |
|
(0.62 |
) |
|
(0.68 |
) |
|
nm |
|
(0.22 |
) |
|
(0.26 |
) |
|
nm |
| Adjusted EBITDA |
|
n/a |
|
n/a |
|
n/a |
|
(9.5 |
) |
|
(9.7 |
) |
|
nm |
| Cash: |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Cash Used in Operating Activities |
|
(9.1 |
) |
|
(6.6 |
) |
|
nm |
|
(9.1 |
) |
|
(6.6 |
) |
|
nm |
| Free Cash Flow |
|
n/a |
|
n/a |
|
n/a |
|
$ |
(10.1 |
) |
|
$ |
(8.5 |
) |
|
nm |
| |
The attached tables provide a summary of PROS results for the period, including a reconciliation of GAAP to non-GAAP
metrics.
Recent Business Highlights
- Acquired Vayant Travel Technologies in an all-cash transaction for $35 million to extend PROS modern commerce
solutions for the travel industry. Vayant’s SaaS shopping, pricing and merchandising technology complements PROS AI-based
dynamic pricing and revenue management solutions; combined, the technologies can help travel companies deliver more
personalized offers and expanded choices to their customers.
- Won Microsoft Partner of the Year awards in both the Alliance Global Commercial ISV and U.S. EPG, ISV - Business Applications categories; the awards recognize the value that PROS delivers to
customers while leveraging Microsoft technologies, including Microsoft Azure, Cortana Intelligence Suite, Dynamics 365, and
more.
- Hosted customers, partners and experts from more than 35 countries at the PROS Outperform conference with attendance up 30% year-over-year; representatives from companies such as
Cargill, Forrester Research, HP Inc., Honeywell, Microsoft, Southwest Airlines and others presented best practices on making
the shift to modern commerce with PROS artificial intelligence and machine learning innovations.
- Unveiled PROS latest modern commerce innovations: machine learning Opportunity Detection that uncovers trends in buying behavior and identifies new sales opportunities;
cognitive computing that provides B2B buyer personalization and robust demand forecasting for airlines using real-time data;
and product configuration that leverages augmented reality using Microsoft HoloLens.
- Announced an alliance with CognitiveScale, a provider of industry-specific augmented intelligence software, to leverage cognitive cloud
technologies and provide customers with highly personalized, intelligent, contextual and evidence-based insights and
recommendations.
- 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 and are expected to be used for general corporate purposes, including acquisitions or
other strategic transactions, working capital and capital expenditures, and debt repayment from time to time based on market
conditions.
Financial Outlook
PROS anticipates the following for the third quarter 2017, based on an estimated 31.9 million basic weighted average shares
outstanding, and a 36% non-GAAP estimated tax rate for the third quarter and full year 2017:
| |
|
|
Q3 2017 Guidance |
|
v. Q3 2016 at
Mid-Point
|
|
Full Year 2017
Guidance
|
|
v. Prior Year at
Mid-Point
|
| Total Revenue |
|
$40.5 to $41.0 |
|
6% |
|
$165.5 to $168.5 |
|
9% |
| Subscription Revenue |
|
$14.8 to $15.0 |
|
51% |
|
$57.5 to $58.0 |
|
51% |
| ARR |
|
n/a |
|
n/a |
|
$154.5 to $156.5 |
|
27% |
| Non-GAAP Loss Per Share |
|
$(0.24) to $(0.23) |
|
n/a |
|
n/a |
|
n/a |
| Adjusted EBITDA |
|
$(10.0) to $(9.5) |
|
n/a |
|
$(35.5) to $(34.5) |
|
n/a |
| Free Cash Flow |
|
n/a |
|
n/a |
|
$(29.5) to $(28.0) |
|
n/a |
| |
Conference Call
In conjunction with this announcement, PROS Holdings, Inc. will host a conference call on Thursday, August 3, 2017, 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 Thursday, August 17, 2017, at 1-844-512-2921
(toll-free) or 1-412-317-6671 using the pass code 13665107. 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: PROS) 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-first strategy, (b) reduced revenue and cash flow resulting from our
transition to a cloud-first 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 which includes both subscription and maintenance contracts, plus
overage fees incurred above contracted minimum transactions, and excludes perpetual license, term license and service agreements,
which are current and contracted with a future start date. 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)
|
| |
|
|
June 30, 2017 |
|
December 31, 2016 |
| Assets: |
|
|
|
|
| Current assets: |
|
|
|
|
| Cash and cash equivalents |
|
$ |
197,969 |
|
|
$ |
118,039 |
|
| Short-term investments |
|
6,000 |
|
|
15,996 |
|
| Accounts and unbilled receivables, net of allowance of $760 |
|
33,258 |
|
|
33,285 |
|
| Prepaid and other current assets |
|
7,011 |
|
|
6,337 |
|
| Total current assets |
|
244,238 |
|
|
173,657 |
|
| Property and equipment, net |
|
14,614 |
|
|
15,238 |
|
| Intangibles, net |
|
11,844 |
|
|
12,650 |
|
| Goodwill |
|
20,908 |
|
|
20,096 |
|
| Other long-term assets |
|
6,378 |
|
|
6,013 |
|
| Total assets |
|
$ |
297,982 |
|
|
$ |
227,654 |
|
| Liabilities and Stockholders’ Equity: |
|
|
|
|
| Current liabilities: |
|
|
|
|
| Accounts payable and other liabilities |
|
$ |
5,300 |
|
|
$ |
2,744 |
|
| Accrued liabilities |
|
10,420 |
|
|
7,279 |
|
| Accrued payroll and other employee benefits |
|
9,740 |
|
|
18,349 |
|
| Deferred revenue |
|
71,348 |
|
|
68,349 |
|
| Total current liabilities |
|
96,808 |
|
|
96,721 |
|
| Long-term deferred revenue |
|
13,514 |
|
|
11,389 |
|
| Convertible debt, net |
|
207,468 |
|
|
122,299 |
|
| Other long-term liabilities |
|
655 |
|
|
639 |
|
| Total liabilities |
|
318,445 |
|
|
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; 36,123,975 and
35,001,236 shares issued, respectively; 31,706,390 and 30,583,651 shares outstanding, respectively |
|
36 |
|
|
35 |
|
| Additional paid-in capital |
|
196,962 |
|
|
175,678 |
|
| Treasury stock, 4,417,585 common shares, at cost |
|
(13,938 |
) |
|
(13,938 |
) |
| Accumulated deficit |
|
(199,979 |
) |
|
(160,259 |
) |
| Accumulated other comprehensive loss |
|
(3,544 |
) |
|
(4,910 |
) |
| Total stockholders’ equity |
|
(20,463 |
) |
|
(3,394 |
) |
| Total liabilities and stockholders’ equity |
|
$ |
297,982 |
|
|
$ |
227,654 |
|
| |
| |
|
PROS Holdings, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands, except per share data)
(Unaudited)
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Revenue: |
|
|
|
|
|
|
|
|
| Subscription |
|
$ |
13,434 |
|
|
$ |
9,143 |
|
|
$ |
25,648 |
|
|
$ |
17,344 |
|
| Maintenance and support |
|
17,132 |
|
|
16,775 |
|
|
35,208 |
|
|
33,437 |
|
| Total subscription, maintenance and support |
|
30,566 |
|
|
25,918 |
|
|
60,856 |
|
|
50,781 |
|
| License |
|
1,090 |
|
|
2,457 |
|
|
3,280 |
|
|
5,759 |
|
| Services |
|
8,750 |
|
|
8,663 |
|
|
16,399 |
|
|
18,426 |
|
| Total revenue |
|
40,406 |
|
|
37,038 |
|
|
80,535 |
|
|
74,966 |
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
| Subscription |
|
5,800 |
|
|
4,088 |
|
|
11,737 |
|
|
7,534 |
|
| Maintenance and support |
|
2,881 |
|
|
3,578 |
|
|
6,027 |
|
|
6,850 |
|
| Total cost of subscription, maintenance and support |
|
8,681 |
|
|
7,666 |
|
|
17,764 |
|
|
14,384 |
|
| License |
|
72 |
|
|
99 |
|
|
137 |
|
|
161 |
|
| Services |
|
7,333 |
|
|
8,283 |
|
|
14,794 |
|
|
17,214 |
|
| Total cost of revenue |
|
16,086 |
|
|
16,048 |
|
|
32,695 |
|
|
31,759 |
|
| Gross profit |
|
24,320 |
|
|
20,990 |
|
|
47,840 |
|
|
43,207 |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
| Selling and marketing |
|
17,172 |
|
|
16,066 |
|
|
33,645 |
|
|
34,084 |
|
| General and administrative |
|
9,782 |
|
|
9,616 |
|
|
20,190 |
|
|
18,657 |
|
| Research and development |
|
14,076 |
|
|
13,358 |
|
|
28,383 |
|
|
26,490 |
|
| Loss from operations |
|
(16,710 |
) |
|
(18,050 |
) |
|
(34,378 |
) |
|
(36,024 |
) |
| Convertible debt interest and amortization |
|
(2,590 |
) |
|
(2,317 |
) |
|
(4,984 |
) |
|
(4,604 |
) |
| Other expense, net |
|
(64 |
) |
|
(55 |
) |
|
(32 |
) |
|
(113 |
) |
| Loss before income tax provision |
|
(19,364 |
) |
|
(20,422 |
) |
|
(39,394 |
) |
|
(40,741 |
) |
| Income tax provision |
|
149 |
|
|
105 |
|
|
326 |
|
|
263 |
|
| Net loss |
|
$ |
(19,513 |
) |
|
$ |
(20,527 |
) |
|
$ |
(39,720 |
) |
|
$ |
(41,004 |
) |
|
|
|
|
|
|
|
|
|
| Net loss per share: |
|
|
|
|
|
|
|
|
| Basic and diluted |
|
$ |
(0.62 |
) |
|
$ |
(0.68 |
) |
|
$ |
(1.27 |
) |
|
$ |
(1.35 |
) |
| Weighted average number of shares: |
|
|
|
|
|
|
|
|
| Basic and diluted |
|
31,615 |
|
|
30,330 |
|
|
31,357 |
|
|
30,278 |
|
| |
| |
|
PROS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
| |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Operating activities: |
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(19,513 |
) |
|
$ |
(20,527 |
) |
|
$ |
(39,720 |
) |
|
$ |
(41,004 |
) |
| Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
1,972 |
|
|
2,508 |
|
|
4,005 |
|
|
4,973 |
|
| Amortization of debt discount and issuance costs |
|
1,835 |
|
|
1,598 |
|
|
3,510 |
|
|
3,166 |
|
| Share-based compensation |
|
5,932 |
|
|
5,869 |
|
|
12,094 |
|
|
11,253 |
|
| Deferred income tax, net |
|
— |
|
|
15 |
|
|
33 |
|
|
42 |
|
| Provision for doubtful accounts |
|
— |
|
|
(43 |
) |
|
— |
|
|
(139 |
) |
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
| Accounts and unbilled receivables |
|
(406 |
) |
|
1,223 |
|
|
137 |
|
|
2,480 |
|
| Prepaid expenses and other assets |
|
(315 |
) |
|
(1,262 |
) |
|
(981 |
) |
|
(804 |
) |
| Accounts payable and other liabilities |
|
(793 |
) |
|
(2,255 |
) |
|
2,838 |
|
|
(1,454 |
) |
| Accrued liabilities |
|
(147 |
) |
|
(394 |
) |
|
287 |
|
|
640 |
|
| Accrued payroll and other employee benefits |
|
2,356 |
|
|
957 |
|
|
(8,601 |
) |
|
(2,246 |
) |
| Deferred revenue |
|
(37 |
) |
|
5,703 |
|
|
5,089 |
|
|
13,721 |
|
| Net cash used in operating activities |
|
(9,116 |
) |
|
(6,608 |
) |
|
(21,309 |
) |
|
(9,372 |
) |
| Investing activities: |
|
|
|
|
|
|
|
|
| Purchases of property and equipment |
|
(211 |
) |
|
(1,817 |
) |
|
(695 |
) |
|
(5,339 |
) |
| Capitalized internal-use software development costs |
|
(736 |
) |
|
(72 |
) |
|
(1,308 |
) |
|
(72 |
) |
| Purchases of short-term investments |
|
— |
|
|
(53,982 |
) |
|
— |
|
|
(88,928 |
) |
| Proceeds from maturities of short-term investments |
|
— |
|
|
47,000 |
|
|
9,983 |
|
|
49,500 |
|
| Net cash (used in) provided by investing activities |
|
(947 |
) |
|
(8,871 |
) |
|
7,980 |
|
|
(44,839 |
) |
| Financing activities: |
|
|
|
|
|
|
|
|
| Exercise of stock options |
|
3,078 |
|
|
14 |
|
|
5,276 |
|
|
14 |
|
| Proceeds from employee stock plans |
|
— |
|
|
— |
|
|
776 |
|
|
470 |
|
| Tax withholding related to net share settlement of stock awards |
|
(89 |
) |
|
(42 |
) |
|
(5,754 |
) |
|
(4,839 |
) |
| Payments of notes payable |
|
(105 |
) |
|
(53 |
) |
|
(155 |
) |
|
(91 |
) |
| Debt issuance costs related to Revolver |
|
— |
|
|
— |
|
|
(125 |
) |
|
— |
|
| Proceeds from issuance of convertible debt, net |
|
93,500 |
|
|
— |
|
|
93,500 |
|
|
— |
|
| Net cash provided by (used in) financing activities |
|
96,384 |
|
|
(81 |
) |
|
93,518 |
|
|
(4,446 |
) |
| Effect of foreign currency rates on cash |
|
(220 |
) |
|
11 |
|
|
(259 |
) |
|
38 |
|
| Net change in cash and cash equivalents |
|
86,101 |
|
|
(15,549 |
) |
|
79,930 |
|
|
(58,619 |
) |
| Cash and cash equivalents: |
|
|
|
|
|
|
|
|
| Beginning of period |
|
111,868 |
|
|
118,700 |
|
|
118,039 |
|
|
161,770 |
|
| End of period |
|
$ |
197,969 |
|
|
$ |
103,151 |
|
|
$ |
197,969 |
|
|
$ |
103,151 |
|
| |
| |
|
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 9.
|
| |
|
|
Three Months Ended
June 30,
|
|
Quarter
over
Quarter
|
|
Six Months Ended
June 30,
|
|
Year
over
Year
|
|
|
2017 |
|
2016 |
|
% change |
|
2017 |
|
2016 |
|
% change |
| GAAP gross profit |
|
$ |
24,320 |
|
|
$ |
20,990 |
|
|
16 |
% |
|
$ |
47,840 |
|
|
$ |
43,207 |
|
|
11 |
% |
| Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of intangible assets |
|
485 |
|
|
495 |
|
|
|
|
962 |
|
|
986 |
|
|
|
| Share-based compensation |
|
515 |
|
|
577 |
|
|
|
|
1,090 |
|
|
1,176 |
|
|
|
| Non-GAAP gross profit |
|
$ |
25,320 |
|
|
$ |
22,062 |
|
|
15 |
% |
|
$ |
49,892 |
|
|
$ |
45,369 |
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP gross margin |
|
62.7 |
% |
|
59.6 |
% |
|
|
|
62.0 |
% |
|
60.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP loss from operations |
|
$ |
(16,710 |
) |
|
$ |
(18,050 |
) |
|
(7 |
)% |
|
$ |
(34,378 |
) |
|
$ |
(36,024 |
) |
|
(5 |
)% |
| Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of intangible assets |
|
680 |
|
|
766 |
|
|
|
|
1,349 |
|
|
1,551 |
|
|
|
| Share-based compensation |
|
5,932 |
|
|
5,869 |
|
|
|
|
12,094 |
|
|
11,253 |
|
|
|
| Total Non-GAAP adjustments |
|
6,612 |
|
|
6,635 |
|
|
|
|
13,443 |
|
|
12,804 |
|
|
|
| Non-GAAP loss from operations |
|
$ |
(10,098 |
) |
|
$ |
(11,415 |
) |
|
(12 |
)% |
|
$ |
(20,935 |
) |
|
$ |
(23,220 |
) |
|
(10 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP loss from operations % of total revenue |
|
(25.0 |
)% |
|
(30.8 |
)% |
|
|
|
(26.0 |
)% |
|
(31.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP net loss |
|
$ |
(19,513 |
) |
|
$ |
(20,527 |
) |
|
(5 |
)% |
|
$ |
(39,720 |
) |
|
$ |
(41,004 |
) |
|
(3 |
)% |
| Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Total Non-GAAP adjustments affecting loss from operations |
|
6,612 |
|
|
6,635 |
|
|
|
|
13,443 |
|
|
12,804 |
|
|
|
| Amortization of debt discount and issuance costs |
|
1,818 |
|
|
1,598 |
|
|
|
|
3,493 |
|
|
3,166 |
|
|
|
| Tax impact related to non-GAAP adjustments |
|
4,084 |
|
|
4,492 |
|
|
|
|
8,410 |
|
|
9,180 |
|
|
|
| Non-GAAP net loss |
|
$ |
(6,999 |
) |
|
$ |
(7,802 |
) |
|
(10 |
)% |
|
$ |
(14,374 |
) |
|
$ |
(15,854 |
) |
|
(9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP diluted loss per share |
|
$ |
(0.22 |
) |
|
$ |
(0.26 |
) |
|
|
|
$ |
(0.46 |
) |
|
$ |
(0.52 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares used in computing non-GAAP loss per share |
|
31,615 |
|
|
30,330 |
|
|
|
|
31,357 |
|
|
30,278 |
|
|
|
| |
| |
|
PROS Holdings, Inc.
Supplemental Schedule of Non-GAAP Financial Measures
Increase (Decrease) in GAAP Amounts Reported
(In thousands)
(Unaudited)
|
| |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Cost of Subscription Items |
|
|
|
|
|
|
|
|
| Amortization of intangible assets |
|
317 |
|
|
321 |
|
|
630 |
|
|
643 |
|
| Share-based compensation |
|
51 |
|
|
103 |
|
|
129 |
|
|
154 |
|
| Total cost of subscription items |
|
$ |
368 |
|
|
$ |
424 |
|
|
$ |
759 |
|
|
$ |
797 |
|
|
|
|
|
|
|
|
|
|
| Cost of Maintenance Items |
|
|
|
|
|
|
|
|
| Amortization of intangible assets |
|
158 |
|
|
163 |
|
|
312 |
|
|
322 |
|
| Share-based compensation |
|
84 |
|
|
80 |
|
|
173 |
|
|
157 |
|
| Total cost of maintenance items |
|
$ |
242 |
|
|
$ |
243 |
|
|
$ |
485 |
|
|
$ |
479 |
|
|
|
|
|
|
|
|
|
|
| Cost of License Items |
|
|
|
|
|
|
|
|
| Amortization of intangible assets |
|
10 |
|
|
11 |
|
|
20 |
|
|
21 |
|
| Total cost of license items |
|
$ |
10 |
|
|
$ |
11 |
|
|
$ |
20 |
|
|
$ |
21 |
|
|
|
|
|
|
|
|
|
|
| Cost of Services Items |
|
|
|
|
|
|
|
|
| Share-based compensation |
|
380 |
|
|
394 |
|
|
788 |
|
|
865 |
|
| Total cost of services items |
|
$ |
380 |
|
|
$ |
394 |
|
|
$ |
788 |
|
|
$ |
865
|
|
|
|
|
|
|
|
|
|
|
| Sales and Marketing Items |
|
|
|
|
|
|
|
|
| Amortization of intangible assets |
|
195 |
|
|
271 |
|
|
387 |
|
|
559 |
|
| Share-based compensation |
|
1,131 |
|
|
1,697 |
|
|
2,404 |
|
|
3,477 |
|
| Total sales and marketing items |
|
$ |
1,326 |
|
|
$ |
1,968 |
|
|
$ |
2,791 |
|
|
$ |
4,036 |
|
|
|
|
|
|
|
|
|
|
| General and Administrative Items |
|
|
|
|
|
|
|
|
| Amortization of intangible assets |
|
— |
|
|
— |
|
|
— |
|
|
6 |
|
| Share-based compensation |
|
2,880 |
|
|
2,302 |
|
|
5,682 |
|
|
4,032 |
|
| Total general and administrative items |
|
$ |
2,880 |
|
|
$ |
2,302 |
|
|
$ |
5,682 |
|
|
$ |
4,038 |
|
|
|
|
|
|
|
|
|
|
| Research and Development Items |
|
|
|
|
|
|
|
|
| Share-based compensation |
|
1,406 |
|
|
1,293 |
|
|
2,918 |
|
|
2,568 |
|
| Total research and development items |
|
$ |
1,406 |
|
|
$ |
1,293 |
|
|
$ |
2,918 |
|
|
$ |
2,568 |
|
| |
| |
|
PROS Holdings, Inc.
Supplemental Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands)
(Unaudited)
|
| |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Adjusted EBITDA |
|
|
|
|
|
|
|
|
| GAAP Loss from Operations |
|
$ |
(16,710 |
) |
|
$ |
(18,050 |
) |
|
$ |
(34,378 |
) |
|
$ |
(36,024 |
) |
| Amortization of intangible assets |
|
680 |
|
|
766 |
|
|
1,349 |
|
|
1,551 |
|
| Share-based compensation |
|
5,932 |
|
|
5,869 |
|
|
12,094 |
|
|
11,253 |
|
| Depreciation |
|
1,292 |
|
|
1,742 |
|
|
2,656 |
|
|
3,422 |
|
| Capitalized internal-use software development costs |
|
(736 |
) |
|
(72 |
) |
|
(1,308 |
) |
|
(72 |
) |
| Adjusted EBITDA |
|
$ |
(9,542 |
) |
|
$ |
(9,745 |
) |
|
$ |
(19,587 |
) |
|
$ |
(19,870 |
) |
|
|
|
|
|
|
|
|
|
| Free Cash Flow |
|
|
|
|
|
|
|
|
| Net cash used in operating activities |
|
$ |
(9,116 |
) |
|
$ |
(6,608 |
) |
|
$ |
(21,309 |
) |
|
$ |
(9,372 |
) |
| Purchase of property and equipment |
|
(211 |
) |
|
(1,817 |
) |
|
(695 |
) |
|
(5,339 |
) |
| Capitalized internal-use software development costs |
|
(736 |
) |
|
(72 |
) |
|
(1,308 |
) |
|
(72 |
) |
| Free Cash Flow |
|
$ |
(10,063 |
) |
|
$ |
(8,497 |
) |
|
$ |
(23,312 |
) |
|
$ |
(14,783 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Guidance |
|
Q3 2017 Guidance |
|
Full Year 2017 Guidance |
|
|
Low |
|
High |
|
Low |
|
High |
| Adjusted EBITDA |
|
|
|
|
|
|
|
|
| GAAP Loss from Operations |
|
$ |
(17,600 |
) |
|
$ |
(17,100 |
) |
|
$ |
(65,000 |
) |
|
$ |
(64,000 |
) |
| Amortization of intangible assets |
|
700 |
|
|
700 |
|
|
2,700 |
|
|
2,700 |
|
| Share-based compensation |
|
6,200 |
|
|
6,200 |
|
|
24,100 |
|
|
24,100 |
|
| Depreciation |
|
1,300 |
|
|
1,300 |
|
|
5,200 |
|
|
5,200 |
|
| Capitalized internal-use software development costs |
|
(600 |
) |
|
(600 |
) |
|
(2,500 |
) |
|
(2,500 |
) |
| Adjusted EBITDA |
|
$ |
(10,000 |
) |
|
$ |
(9,500 |
) |
|
$ |
(35,500 |
) |
|
$ |
(34,500 |
) |
| |
Investor Contact:
PROS Investor Relations
Tim Girgenti, 713-335-5879
ir@pros.com
or
Media Contact:
PROS Public Relations
Yvonne Donaldson, 713-335-5310
ydonaldson@pros.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20170803006277/en/