PROS Holdings, Inc. Reports Fourth Quarter and Full Year 2021 Financial Results|||

HOUSTON–(Business organization WIRE)–PROS Holdings, Inc. (NYSE: PRO), a market-leading provider of SaaS solutions optimizing shopping and selling experiences, today announced financial results for the fourth quarter and total year ended December 31, 2021.

“Despite the continued impact that COVID-19 has had on our business organization, I’m proud of how our team aligned to meet or exceed the guidance ranges we established for 2021,” stated CEO Andres Reiner. “We accept a stiff passion and commitment towards delivering incredible value to our customers, which is highlighted by our best-in-course gross revenue retention charge per unit of over 93% and all-time high NPS scores. Nosotros are excited nearly 2022 and confident that we have the right people, platform and strategy to capture the large marketplace opportunity in front of us.”

Fourth Quarter and Full Yr 2021 Financial Highlights

Key financial results for the quaternary quarter and full yr 2021 are shown below. Throughout this press release all dollar figures are in millions, except internet 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 2021		Q4 2020		Alter		Q4 2021		Q4 2020		Modify
Revenue:
Total Revenue	$65.0		$60.9		7%		n/a		north/a		n/a
Subscription Revenue	$47.0		$42.9		10%		n/a		north/a		due north/a
Subscription and Maintenance Acquirement	$55.iv		$52.6		five%		n/a		n/a		n/a
Profitability:
Gross Profit	$39.0		$35.5		x%		$40.seven		$37.0		x%
Operating Loss	$(21.6)		$(xiii.4)		$(8.two)		$(viii.2)		$(6.1)		$(2.0)
Net Loss	$(23.6)		$(xviii.2)		$(5.iv)		$(7.2)		$(five.9)		$(1.4)
Internet Loss Per Share	$(0.53)		$(0.42)		$(0.eleven)		$(0.sixteen)		$(0.xiv)		$(0.02)
Adjusted EBITDA	n/a		due north/a		n/a		$(vi.four)		$(4.2)		$(2.two)
Cash:
Net Greenbacks (Used in) Provided past Operating Activities	$(1.0)		$12.5		$(13.4)		n/a		northward/a		n/a
Free Cash Flow	northward/a		n/a		n/a		$(one.3)		$11.4		$(12.8)
	GAAP						Non-GAAP
	FY 2021		FY 2020		Alter		FY 2021		FY 2020		Change
Revenue:
Total Acquirement	$251.4		$252.4		—%		n/a		n/a		n/a
Subscription Revenue	$178.0		$170.5		iv%		n/a		due north/a		n/a
Subscription and Maintenance Acquirement	$213.1		$215.two		(1)%		due north/a		north/a		n/a
Annual Recurring Revenue (“ARR”)	due north/a		n/a		n/a		$226.vii		$209.vii		8%
Annual Recurring Revenue in constant currency	north/a		n/a		n/a		$229.2		$209.7		9%
Profitability:
Gross Turn a profit	$146.v		$147.8		(one)%		$152.one		$153.9		(1)%
Operating Loss	$(74.three)		$(66.1)		$(viii.3)		$(32.ix)		$(34.vii)		$1.8
Internet Loss	$(81.two)		$(77.0)		$(4.two)		$(29.i)		$(28.3)		$(0.9)
Cyberspace Loss Per Share	$(1.83)		$(one.78)		$(0.05)		$(0.66)		$(0.65)		$(0.01)
Adapted EBITDA	n/a		n/a		due north/a		$(24.8)		$(27.6)		$2.vii
Cash:
Internet Cash Used in Operating Activities	$(18.half dozen)		$(49.four)		$xxx.8		n/a		due north/a		n/a
Costless Cash Flow	due north/a		north/a		n/a		$(20.ii)		$(53.3)		$33.one

The attached tabular array provides a summary of PROS results for the menstruation, including a reconciliation of GAAP to not-GAAP metrics.

Recent Concern Highlights

• Customers achieved more than 6% revenue comeback, on average, by leveraging the PROS Platform based on a value assessment of over 100 client case studies spanning our target industries.

• Completed the conquering of EveryMundo LLC, a digital offer marketing pioneer that enables more straight customer appointment through dynamic webpages, offer visualization, and digital advertizement campaigns. With EveryMundo, PROS empowers brands to broaden their digital attain, pulling buyers into straight selling motions to create superior brand experiences and foster loyalty.

• Delivered a successful virtual PROS 2021 Outperform Customer Briefing featuring 43 customer speakers; over four,300 people from around the world registered to learn near the latest innovations delivered on the PROS Platform and how to ability omnichannel selling.

• Expanded our partnership with Microsoft to accelerate market adoption of Microsoft Dynamics 365 and PROS combined digital selling solution.

• Received prestigious honors in recognition of our AI-powered digital selling innovations, including beingness named All-time in Biz Silver Award’s 2021 Enterprise Product of the Yr for Sales and Pricing Software Category Leader in G2 Wintertime 2021.

• Welcomed several new customers who are adopting the PROS Platform such every bit Air Baltic, B. Braun, Rockwool, and Majestic Brunei, among others.

Financial Outlook

PROS currently anticipates the following based on an estimated 45.1 million basic weighted average shares outstanding for the first quarter of 2022 and a 22% non-GAAP estimated tax rate for the start quarter and total year 2022.

	Q1 2022 Guidance		v. Q1 2021 at Mid-Signal		Full Twelvemonth 2022 Guidance		v. Prior Yr at Mid-Point
Total Revenue	$65.0 to $66.0		7%		$267.0 to $270.0		seven%
Subscription Revenue	$48.0 to $48.five		thirteen%		$200.0 to $202.0		thirteen%
ARR	n/a		north/a		$246.0 to $250.0		9%
Subscription ARR	northward/a		n/a		$224.0 to $228.0		16%
Not-GAAP Loss Per Share	$(0.26) to $(0.24)		$(0.03)		north/a		n/a
Adjusted EBITDA	$(12.0) to $(11.0)		$(2.1)		$(28.0) to $(25.0)		$(1.seven)
Free Greenbacks Catamenia	n/a		n/a		$(25.0) to $(21.0)		$(2.8)

Conference Phone call

In conjunction with this announcement, PROS Holdings, Inc. will host a conference phone call on Thursday, February 10, 2022, at 4:45 p.m. EST to talk over the Visitor’s fiscal results and business outlook. To access this call, dial ane-877-407-9039 (toll-free) or ane-201-689-8470. The live and archived webcasts of this phone 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 24, 2022, eleven:59 PM EST at one-844-512-2921 (toll-free) or ane-412-317-6671 using the laissez passer code 13725919.

Well-nigh PROS

PROS Holdings, Inc. (NYSE: PRO) is a market-leading provider of SaaS solutions that optimize shopping and selling experiences. Built on the PROS Platform, these intelligent solutions leverage concern AI, intuitive user experiences and process automation to deliver frictionless, personalized purchasing experiences designed to meet the real-time demands of today’s B2B and B2C omnichannel shoppers, regardless of industry. To learn more, visit world wide web.pros.com.

Forward-looking Statements

This press release contains frontwards-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements well-nigh the business impact and elapsing of the coronavirus (COVID-19) pandemic; our financial outlook; expectations; ability to achieve futurity growth and profitability; management’southward confidence and optimism; positioning; customer successes; demand for our software solutions; pipeline; business expansion; revenue; subscription revenue; ARR; not-GAAP loss per share; adjusted EBITDA; costless cash flow; shares outstanding and effective tax charge per unit. 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 exist achieved. Factors that could crusade bodily results to differ materially from those described herein include, amid others, risks related to: (a) the impact of the COVID-19 pandemic, such every bit the scope and duration of the outbreak, including variants, and, among other effects, the timeframe for recovery of the travel manufacture, (b) cyberattacks, data breaches and breaches of security measures within our products, systems and infrastructure or products, systems and infrastructure of third parties upon whom we rely, (c) increasing business concern from customers and maintaining subscription renewal rates, (d) managing our growth finer, (e) disruptions from our 3rd party data center, software, information, and other unrelated service providers, (f) implementing our solutions, (1000) deject operations, (h) intellectual property and third-political party software, (i) acquiring and integrating businesses and/or technologies, (j) catastrophic events, (g) operating globally, including economical and commercial disruptions, (l) potential downturns in sales and lengthy sales cycles, (m) software innovation, (n) competition, (o) marketplace credence of our software innovations, (p) maintaining our corporate culture, (q) personnel risks including loss of whatever key employees and contest for talent, (r) expanding and grooming our direct and indirect sales force, (southward) evolving data privacy, cyber security and data localization laws, (t) our debt repayment obligations, (u) the timing of revenue recognition and cash flow from operations, (v) migrating customers to our latest cloud solutions, and (west) returning to profitability. Additional information relating to the risks and uncertainties affecting our business organization is independent in our filings with the SEC. These forward-looking statements represent our expectations as of the date hereof. Subsequent events may cause these expectations to modify, and PROS disclaims whatever obligations to update or modify these forrad-looking statements in the futurity, whether as a consequence of new information, futurity events or otherwise.

Not-GAAP Fiscal Measures

PROS has provided in this release sure not-GAAP financial measures, including non-GAAP gross profit and margin, non-GAAP income (loss) from operations or non-GAAP operating loss, almanac recurring revenue, adjusted EBITDA, free cash flow, non-GAAP tax rate, not-GAAP net income (loss) or non-GAAP net loss, and diluted earnings (loss) per share or not-GAAP net loss per share. PROS uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, equally a supplement to GAAP measures, in evaluating PROS’ ongoing operational performance and cloud transition. Non-GAAP gross margin can exist compared to gross margin which tin be calculated from the condensed consolidated statements of income (loss) by dividing gross profit by full revenue. Non-GAAP gross margin is similarly calculated simply first adds dorsum to gross profit the portion of certain of the non-GAAP adjustments described below attributable to cost of revenue. Non-GAAP subscription margin can be compared to subscription margin which tin be calculated from the condensed consolidated statements of income (loss) by dividing subscription gross turn a profit (subscription acquirement minus subscription cost) by subscription acquirement. Non-GAAP subscription margin is similarly calculated but offset subtracts out from subscription price the portion of certain of the non-GAAP adjustments described below owing to cost of subscription. These items and amounts are presented in the Supplemental Schedule of Non-GAAP Financial Measures.

Non-GAAP financial measures should not be considered in isolation from, or equally 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 direct 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, forth with other financial information, in the investor relations portion of our website. PROS’ utilise of non-GAAP financial measures may not be consistent with the presentations past like companies in PROS’ manufacture. PROS has also provided in this release certain forward-looking non-GAAP fiscal measures, including non-GAAP income (loss) from operations, annual recurring acquirement, non-GAAP loss per share, adjusted EBITDA, free cash menses, non-GAAP tax rates, and calculated billings (collectively the “non-GAAP financial measures”) as follows:

Non-GAAP income (loss) from operations:
Not-GAAP income (loss) from operations excludes the bear on of share-based compensation, amortization of conquering-related intangibles and new headquarters noncash rent expense. Not-GAAP income (loss) from operations excludes the following items from not-GAAP estimates:

• Share-Based Bounty:
  Although share-based compensation is an important aspect of bounty for our employees and executives, our share-based compensation expense can vary because of changes in our stock price and market conditions at the fourth dimension 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 whatsoever item period, nosotros believe this could make information technology difficult for investors to compare our current financial results to previous and time to come periods. Therefore, we believe it is useful to exclude share-based compensation in gild to amend understand our business operation and permit investors to compare our operating results with peer companies.

• Acquittal of Conquering-Related Intangibles:
  Nosotros view acquittal of conquering-related intangible assets, such as the acquittal of the cost associated with an caused company’s research and development efforts, trade names, client lists and customer relationships, as items arising from pre-conquering activities determined at the time of an acquisition. While these intangible assets are continually evaluated for harm, acquittal of the price of purchased intangibles is a static expense, one that is non typically affected by operations during whatsoever item menses.

• Acquisition-Related Expenses:
  Acquisition-related expenses include integration costs and other one-fourth dimension direct costs associated with our acquisitions. These amounts are unrelated to our cadre performance during whatsoever detail 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.

• New Headquarters Noncash Rent Expense:
  Noncash rent expense is related to our new corporate headquarters and is incurred prior to occupation of this facility. These amounts are unrelated to our core performance during any particular menstruation and we believe this could brand information technology difficult for investors to compare our electric current financial results to previous and future periods. Therefore, nosotros believe it is useful to exclude the noncash rent expense on the preoccupied new headquarters in social club for investors to better understand our business concern performance and allow investors to compare our operating results with peer companies.

Non-GAAP loss per share:
Non-GAAP cyberspace income (loss) excludes the items listed above as excluded from not-GAAP income (loss) from operations and as well excludes acquittal of debt discount and issuance costs and the taxes related to these items and the items excluded from not-GAAP income (loss) from operations. Estimates of non-GAAP loss per share are calculated past dividing estimates for non-GAAP loss by our estimate of shares outstanding for the future period. In addition to the items listed above as excluded from non-GAAP income (loss) from operations, non-GAAP net income (loss) excludes the following items from non-GAAP estimates:

• 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 cadre performance during any particular period, and therefore, we believe it is useful to exclude these amounts in order to ameliorate empathise our business performance and permit investors to compare our results with peer companies.

• Taxes:
  Nosotros 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 ended that it is more likely than non that we will be unable to fully realize our deferred tax avails and appropriately, established a valuation assart against those assets. The ongoing bear upon of the valuation allowance on our non-GAAP effective taxation rate has been eliminated to permit investors to amend understand our business performance and compare our operating results with peer companies.

Annual Recurring Revenue:
Annual Recurring Acquirement (“ARR”) is used to assess the trajectory of our deject business. ARR ways, equally of a specified engagement, the contracted recurring acquirement, 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. Subscription ARR is calculated in the aforementioned manner, but excludes maintenance and support ARR.

Non-GAAP Revenue enhancement Rate:
The estimated non-GAAP constructive tax rate adjusts the revenue enhancement result to quantify the bear upon of the excluded non-GAAP items.

Adapted EBITDA:
Adjusted EBITDA is defined as GAAP internet income (loss) before involvement expense, provision for income taxes, depreciation and amortization, every bit adjusted to eliminate the event of stock-based compensation price, acquisition-related expenses, acquittal of acquisition-related intangibles, depreciation and amortization, new headquarters noncash hire expense, and capitalized internal-employ software evolution costs. Adjusted EBITDA should not be considered as an alternative to net income (loss) as an indicator of our operating performance.

Gratuitous Cash Flow:
Gratuitous cash flow is a non-GAAP financial measure out which is defined every bit net greenbacks provided by (used in) operating activities, less capital expenditures (excluding expenditures for PROS new headquarters), purchases of other (not-acquisition-related) intangible assets and capitalized internal-use software development costs.

Calculated Billings:
Calculated billings is defined every bit total subscription, maintenance and support revenue plus the change in recurring deferred acquirement in a given period.

These non-GAAP estimates are non measurements of financial performance prepared in accord with GAAP, and nosotros are unable to reconcile these frontwards-looking non-GAAP financial measures to their direct comparable GAAP financial measures because the information described above which is needed to consummate 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, 2021				Dec 31, 2020
Assets:
Current assets:
Cash and greenbacks equivalents		$	227,553			$	329,134
Trade and other receivables, net of allowance of $1,206 and $iv,122, respectively			40,581				49,578
Deferred costs, current			5,772				five,941
Prepaid and other current avails			9,623				9,647
Full electric current assets			283,529				394,300
Property and equipment, cyberspace			thirty,958				36,504
Operating lease right-of-use assets			25,732				30,689
Deferred costs, noncurrent			9,510				12,544
Intangibles, internet			27,618				viii,341
Goodwill			108,133				l,044
Other assets, noncurrent			ix,003				seven,549
Full avails		$	494,483			$	539,971
Liabilities and Stockholders’ Equity:
Electric current liabilities:
Accounts payable and other liabilities		$	4,034			$	4,246
Accrued liabilities			12,631				13,065
Accrued payroll and other employee benefits			31,994				25,514
Operating lease liabilities, current			8,457				5,937
Deferred revenue, electric current			97,713				99,156
Full electric current liabilities			154,829				147,918
Deferred acquirement, noncurrent			eight,553				11,372
Convertible debt, net, noncurrent			288,287				218,028
Operating lease liabilities, noncurrent			38,034				44,099
Other liabilities, noncurrent			1,196				1,517
Total liabilities			490,899				422,934
Stockholders’ disinterestedness:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued			—				—
Common stock, $0.001 par value, 75,000,000 shares authorized; 49,201,265 and 48,142,267 shares issued, respectively; 44,520,542 and 43,461,544 shares outstanding, respectively			49				48
Boosted paid-in capital letter			546,693				589,040
Treasury stock, iv,680,723 common shares, at toll			(29,847	)			(29,847	)
Accumulated arrears			(508,652	)			(438,773	)
Accumulated other comprehensive loss			(four,659	)			(3,431	)
Total stockholders’ equity			3,584				117,037
Total liabilities and stockholders’ equity		$	494,483			$	539,971

PROS Holdings, Inc.
Condensed Consolidated Statements of Income (Loss)
(In thousands, except per share data)
(Unaudited)
		3 Months Concluded December 31,								Year Ended December 31,
		2021				2020				2021				2020
Revenue:
Subscription		$	47,015			$	42,897			$	178,006			$	170,473
Maintenance and support			8,390				nine,663				35,111				44,692
Total subscription, maintenance and support			55,405				52,560				213,117				215,165
Services			ix,568				viii,298				38,306				37,259
Total revenue			64,973				60,858				251,423				252,424
Cost of revenue:
Subscription			12,906				13,520				53,418				51,673
Maintenance and back up			2,053				2,303				8,512				ix,880
Total price of subscription, maintenance and support			14,959				15,823				61,930				61,553
Services			11,018				nine,496				42,995				43,080
Full toll of revenue			25,977				25,319				104,925				104,633
Gross profit			38,996				35,539				146,498				147,791
Operating expenses:
Selling and marketing			22,666				19,300				86,445				87,182
Research and development			21,422				xix,368				82,268				77,165
General and authoritative			14,161				x,297				49,742				49,524
Conquering-related			2,386				—				ii,386				—
Loss from operations			(21,639	)			(13,426	)			(74,343	)			(66,080	)
Convertible debt involvement and amortization			(ane,576	)			(4,480	)			(6,304	)			(11,125	)
Other income (expense), net			89				(202	)			308				897
Loss earlier income tax provision			(23,126	)			(18,108	)			(80,339	)			(76,308	)
Income tax provision			483				76				870				676
Net loss		$	(23,609	)		$	(18,184	)		$	(81,209	)		$	(76,984	)
Internet loss per share:
Basic and diluted		$	(0.53	)		$	(0.42	)		$	(1.83	)		$	(ane.78	)
Weighted average number of shares:
Basic and diluted			44,438				43,452				44,348				43,301

PROS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
		Iii Months Ended December 31,								Yr Ended Dec 31,
		2021				2020				2021				2020
Operating activities:
Net loss		$	(23,609	)		$	(18,184	)		$	(81,209	)		$	(76,984	)
Adjustments to reconcile internet loss to net cash used in operating activities:
Depreciation and amortization			3,232				iii,750				12,060				xiv,334
Amortization of debt discount and issuance costs			372				3,287				1,491				8,743
Share-based compensation			9,665				5,922				35,075				24,399
Provision for doubtful accounts			168				(766	)			(ane,910	)			four,783
Changes in operating assets and liabilities:
Accounts and unbilled receivables			iv,039				xix,034				12,560				ten,450
Deferred costs			906				406				3,202				2,749
Prepaid expenses and other avails			1,431				(1,507	)			one,828				(1,376	)
Operating lease right-of-employ assets and liabilities			1,499				nine,805				1,534				16,974
Accounts payable and other liabilities			(1,108	)			(half dozen,992	)			(515	)			(4,817	)
Accrued liabilities			113				1,652				(426	)			(ix,848	)
Accrued payroll and other employee benefits			4,478				3,495				four,693				(vii,106	)
Deferred revenue			(ii,156	)			(7,450	)			(half-dozen,938	)			(31,690	)
Net cash (used in) provided by operating activities			(970	)			12,452				(18,555	)			(49,389	)
Investing activities:
Purchases of property and equipment			(364	)			(iv,942	)			(2,796	)			(28,493	)
Acquisition of EveryMundo, net of cash acquired			(79,482	)			—				(79,482	)			—
Capitalized internal-use software development costs			—				(421	)			—				(1,686	)
Purchase of equity securities			(225	)			(168	)			(2,895	)			(281	)
Internet cash used in investing activities			(80,071	)			(five,531	)			(85,173	)			(30,460	)
Financing activities:
Proceeds from employee stock plans			—				—				three,111				2,824
Tax withholding related to net share settlement of stock awards			—				(147	)			(352	)			(xx,481	)
Payments of notes payable			—				—				(288	)			—
Gain from issuance of convertible debt, net			—				—				—				146,925
Debt issuance costs related to convertible debt			—				(344	)			—				(ane,019	)
Purchase of capped call			—				—				—				(25,335	)
Cyberspace greenbacks (used in) provided by financing activities			—				(491	)			2,471				102,914
Effect of foreign currency rates on cash			(48	)			352				(324	)			(eight	)
Net change in cash and greenbacks equivalents			(81,089	)			6,782				(101,581	)			23,057
Cash and cash equivalents:
Offset of period			308,642				322,352				329,134				306,077
Stop of period		$	227,553			$	329,134			$	227,553			$	329,134

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