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

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 full year ended December 31, 2021.

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

Fourth Quarter and Full Year 2021 Financial Highlights

Key financial results for the fourth quarter and full year 2021 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 2021

 

Q4 2020

 

Change

 

Q4 2021

 

Q4 2020

 

Change

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

$65.0

 

$60.9

 

7%

 

n/a

 

n/a

 

n/a

Subscription Revenue

$47.0

 

$42.9

 

10%

 

n/a

 

n/a

 

n/a

Subscription and Maintenance Revenue

$55.4

 

$52.6

 

5%

 

n/a

 

n/a

 

n/a

Profitability:

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

$39.0

 

$35.5

 

10%

 

$40.7

 

$37.0

 

10%

Operating Loss

$(21.6)

 

$(13.4)

 

$(8.2)

 

$(8.2)

 

$(6.1)

 

$(2.0)

Net Loss

$(23.6)

 

$(18.2)

 

$(5.4)

 

$(7.2)

 

$(5.9)

 

$(1.4)

Net Loss Per Share

$(0.53)

 

$(0.42)

 

$(0.11)

 

$(0.16)

 

$(0.14)

 

$(0.02)

Adjusted EBITDA

n/a

 

n/a

 

n/a

 

$(6.4)

 

$(4.2)

 

$(2.2)

Cash:

 

 

 

 

 

 

 

 

 

 

 

Net Cash (Used in) Provided by Operating Activities

$(1.0)

 

$12.5

 

$(13.4)

 

n/a

 

n/a

 

n/a

Free Cash Flow

n/a

 

n/a

 

n/a

 

$(1.3)

 

$11.4

 

$(12.8)

 

 

 

 

GAAP

 

Non-GAAP

 

FY 2021

 

FY 2020

 

Change

 

FY 2021

 

FY 2020

 

Change

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

$251.4

 

$252.4

 

—%

 

n/a

 

n/a

 

n/a

Subscription Revenue

$178.0

 

$170.5

 

4%

 

n/a

 

n/a

 

n/a

Subscription and Maintenance Revenue

$213.1

 

$215.2

 

(1)%

 

n/a

 

n/a

 

n/a

Annual Recurring Revenue ("ARR")

n/a

 

n/a

 

n/a

 

$226.7

 

$209.7

 

8%

Annual Recurring Revenue in constant currency

n/a

 

n/a

 

n/a

 

$229.2

 

$209.7

 

9%

Profitability:

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

$146.5

 

$147.8

 

(1)%

 

$152.1

 

$153.9

 

(1)%

Operating Loss

$(74.3)

 

$(66.1)

 

$(8.3)

 

$(32.9)

 

$(34.7)

 

$1.8

Net Loss

$(81.2)

 

$(77.0)

 

$(4.2)

 

$(29.1)

 

$(28.3)

 

$(0.9)

Net Loss Per Share

$(1.83)

 

$(1.78)

 

$(0.05)

 

$(0.66)

 

$(0.65)

 

$(0.01)

Adjusted EBITDA

n/a

 

n/a

 

n/a

 

$(24.8)

 

$(27.6)

 

$2.7

Cash:

 

 

 

 

 

 

 

 

 

 

 

Net Cash Used in Operating Activities

$(18.6)

 

$(49.4)

 

$30.8

 

n/a

 

n/a

 

n/a

Free Cash Flow

n/a

 

n/a

 

n/a

 

$(20.2)

 

$(53.3)

 

$33.1

The attached table provides a summary of PROS results for the period, including a reconciliation of GAAP to non-GAAP metrics.

Recent Business Highlights

  • Customers achieved more than 6% revenue improvement, on average, by leveraging the PROS Platform based on a value assessment of over 100 customer case studies spanning our target industries.
  • Completed the acquisition of EveryMundo LLC, a digital offer marketing pioneer that enables more direct customer engagement through dynamic webpages, offer visualization, and digital ad campaigns. With EveryMundo, PROS empowers brands to broaden their digital reach, pulling buyers into direct selling motions to create superior brand experiences and foster loyalty.
  • Delivered a successful virtual PROS 2021 Outperform Customer Conference featuring 43 customer speakers; over 4,300 people from around the world registered to learn about the latest innovations delivered on the PROS Platform and how to power omnichannel selling.
  • Expanded our partnership with Microsoft to accelerate market adoption of Microsoft Dynamics 365 and PROS combined digital selling solution.
  • Welcomed several new customers who are adopting the PROS Platform such as Air Baltic, B. Braun, Rockwool, and Royal 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 first quarter and full year 2022.

 

Q1 2022 Guidance

 

v. Q1 2021 at Mid-Point

 

Full Year 2022 Guidance

 

v. Prior Year at Mid-Point

Total Revenue

$65.0 to $66.0

 

7%

 

$267.0 to $270.0

 

7%

Subscription Revenue

$48.0 to $48.5

 

13%

 

$200.0 to $202.0

 

13%

ARR

n/a

 

n/a

 

$246.0 to $250.0

 

9%

Subscription ARR

n/a

 

n/a

 

$224.0 to $228.0

 

16%

Non-GAAP Loss Per Share

$(0.26) to $(0.24)

 

$(0.03)

 

n/a

 

n/a

Adjusted EBITDA

$(12.0) to $(11.0)

 

$(2.1)

 

$(28.0) to $(25.0)

 

$(1.7)

Free Cash Flow

n/a

 

n/a

 

$(25.0) to $(21.0)

 

$(2.8)

Conference Call

In conjunction with this announcement, PROS Holdings, Inc. will host a conference call on Thursday, February 10, 2022, at 4:45 p.m. EST to discuss the Company’s financial results and business outlook. To access this call, dial 1-877-407-9039 (toll-free) or 1-201-689-8470. The live and archived webcasts of this call can be accessed under the “Investor Relations” section of the Company’s website at www.pros.com.

A telephone replay will be available until Thursday February 24, 2022, 11:59 PM EST at 1-844-512-2921 (toll-free) or 1-412-317-6671 using the pass code 13725919.

About 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 business 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 www.pros.com.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the business impact and duration of the coronavirus (COVID-19) pandemic; our financial outlook; expectations; ability to achieve future growth and profitability; management's confidence and optimism; positioning; customer successes; demand for our software solutions; pipeline; business expansion; revenue; subscription revenue; ARR; non-GAAP loss per share; 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, among others, risks related to: (a) the impact of the COVID-19 pandemic, such as the scope and duration of the outbreak, including variants, and, among other effects, the timeframe for recovery of the travel industry, (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 from customers and maintaining subscription renewal rates, (d) managing our growth effectively, (e) disruptions from our third party data center, software, data, and other unrelated service providers, (f) implementing our solutions, (g) cloud operations, (h) intellectual property and third-party software, (i) acquiring and integrating businesses and/or technologies, (j) catastrophic events, (k) operating globally, including economic and commercial disruptions, (l) potential downturns in sales and lengthy sales cycles, (m) software innovation, (n) competition, (o) market acceptance of our software innovations, (p) maintaining our corporate culture, (q) personnel risks including loss of any key employees and competition for talent, (r) expanding and training our direct and indirect sales force, (s) 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 (w) returning to profitability. Additional information relating to the risks and uncertainties affecting our business is contained 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 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 non-GAAP financial measures, including non-GAAP gross profit and margin, non-GAAP income (loss) from operations or non-GAAP operating loss, annual recurring revenue, adjusted EBITDA, free cash flow, non-GAAP tax rate, non-GAAP net income (loss) or non-GAAP net loss, and diluted earnings (loss) per share or non-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, as a supplement to GAAP measures, in evaluating PROS’ ongoing operational performance and cloud transition. Non-GAAP gross margin can be compared to gross margin which can be calculated from the condensed consolidated statements of income (loss) by dividing gross profit by total revenue. Non-GAAP gross margin is similarly calculated but first adds back 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 can be calculated from the condensed consolidated statements of income (loss) by dividing subscription gross profit (subscription revenue minus subscription cost) by subscription revenue. Non-GAAP subscription margin is similarly calculated but first subtracts out from subscription cost the portion of certain of the non-GAAP adjustments described below attributable 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 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, non-GAAP loss per share, adjusted EBITDA, free cash flow, non-GAAP tax rates, and calculated billings (collectively the "non-GAAP financial measures") as follows:

Non-GAAP income (loss) from operations: Non-GAAP income (loss) from operations excludes the impact of share-based compensation, amortization of acquisition-related intangibles and new headquarters noncash rent expense. 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.
  • 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 period and 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 the noncash rent expense on the preoccupied new headquarters in order for investors to better understand our business performance and allow investors to compare our operating results with peer companies.

Non-GAAP loss per share: Non-GAAP net income (loss) excludes the items listed above as excluded from non-GAAP income (loss) from operations and also excludes amortization of debt discount and issuance costs and the taxes related to these items and the items excluded from non-GAAP income (loss) from operations. Estimates of non-GAAP loss per share are calculated by 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 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. Subscription ARR is calculated in the same manner, but excludes maintenance and support ARR.

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, acquisition-related expenses, amortization of acquisition-related intangibles, depreciation and amortization, new headquarters noncash rent expense, 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 capital expenditures (excluding expenditures for PROS new headquarters), purchases of other (non-acquisition-related) intangible assets and capitalized internal-use software development costs.

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

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, 2021

 

December 31, 2020

Assets:

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

227,553

 

 

$

329,134

 

Trade and other receivables, net of allowance of $1,206 and $4,122, respectively

 

 

40,581

 

 

 

49,578

 

Deferred costs, current

 

 

5,772

 

 

 

5,941

 

Prepaid and other current assets

 

 

9,623

 

 

 

9,647

 

Total current assets

 

 

283,529

 

 

 

394,300

 

Property and equipment, net

 

 

30,958

 

 

 

36,504

 

Operating lease right-of-use assets

 

 

25,732

 

 

 

30,689

 

Deferred costs, noncurrent

 

 

9,510

 

 

 

12,544

 

Intangibles, net

 

 

27,618

 

 

 

8,341

 

Goodwill

 

 

108,133

 

 

 

50,044

 

Other assets, noncurrent

 

 

9,003

 

 

 

7,549

 

Total assets

 

$

494,483

 

 

$

539,971

 

Liabilities and Stockholders’ Equity:

 

 

 

 

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, current

 

 

97,713

 

 

 

99,156

 

Total current liabilities

 

 

154,829

 

 

 

147,918

 

Deferred revenue, noncurrent

 

 

8,553

 

 

 

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' 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; 49,201,265

and 48,142,267 shares issued, respectively; 44,520,542 and 43,461,544 shares outstanding, respectively

 

 

49

 

 

 

48

 

Additional paid-in capital

 

 

546,693

 

 

 

589,040

 

Treasury stock, 4,680,723 common shares, at cost

 

 

(29,847

)

 

 

(29,847

)

Accumulated deficit

 

 

(508,652

)

 

 

(438,773

)

Accumulated other comprehensive loss

 

 

(4,659

)

 

 

(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)

 

 

 

Three Months Ended 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

 

 

 

9,663

 

 

 

35,111

 

 

 

44,692

 

Total subscription, maintenance and support

 

 

55,405

 

 

 

52,560

 

 

 

213,117

 

 

 

215,165

 

Services

 

 

9,568

 

 

 

8,298

 

 

 

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 support

 

 

2,053

 

 

 

2,303

 

 

 

8,512

 

 

 

9,880

 

Total cost of subscription, maintenance and support

 

 

14,959

 

 

 

15,823

 

 

 

61,930

 

 

 

61,553

 

Services

 

 

11,018

 

 

 

9,496

 

 

 

42,995

 

 

 

43,080

 

Total cost 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

 

 

 

19,368

 

 

 

82,268

 

 

 

77,165

 

General and administrative

 

 

14,161

 

 

 

10,297

 

 

 

49,742

 

 

 

49,524

 

Acquisition-related

 

 

2,386

 

 

 

 

 

 

2,386

 

 

 

 

Loss from operations

 

 

(21,639

)

 

 

(13,426

)

 

 

(74,343

)

 

 

(66,080

)

Convertible debt interest and amortization

 

 

(1,576

)

 

 

(4,480

)

 

 

(6,304

)

 

 

(11,125

)

Other income (expense), net

 

 

89

 

 

 

(202

)

 

 

308

 

 

 

897

 

Loss before 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

)

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.53

)

 

$

(0.42

)

 

$

(1.83

)

 

$

(1.78

)

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)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2021

 

2020

 

2021

 

2020

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(23,609

)

 

$

(18,184

)

 

$

(81,209

)

 

$

(76,984

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,232

 

 

 

3,750

 

 

 

12,060

 

 

 

14,334

 

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

)

 

 

(1,910

)

 

 

4,783

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts and unbilled receivables

 

 

4,039

 

 

 

19,034

 

 

 

12,560

 

 

 

10,450

 

Deferred costs

 

 

906

 

 

 

406

 

 

 

3,202

 

 

 

2,749

 

Prepaid expenses and other assets

 

 

1,431

 

 

 

(1,507

)

 

 

1,828

 

 

 

(1,376

)

Operating lease right-of-use assets and liabilities

 

 

1,499

 

 

 

9,805

 

 

 

1,534

 

 

 

16,974

 

Accounts payable and other liabilities

 

 

(1,108

)

 

 

(6,992

)

 

 

(515

)

 

 

(4,817

)

Accrued liabilities

 

 

113

 

 

 

1,652

 

 

 

(426

)

 

 

(9,848

)

Accrued payroll and other employee benefits

 

 

4,478

 

 

 

3,495

 

 

 

4,693

 

 

 

(7,106

)

Deferred revenue

 

 

(2,156

)

 

 

(7,450

)

 

 

(6,938

)

 

 

(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

)

 

 

(4,942

)

 

 

(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

)

Net cash used in investing activities

 

 

(80,071

)

 

 

(5,531

)

 

 

(85,173

)

 

 

(30,460

)

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from employee stock plans

 

 

 

 

 

 

 

 

3,111

 

 

 

2,824

 

Tax withholding related to net share settlement of stock awards

 

 

 

 

 

(147

)

 

 

(352

)

 

 

(20,481

)

Payments of notes payable

 

 

 

 

 

 

 

 

(288

)

 

 

 

Proceeds from issuance of convertible debt, net

 

 

 

 

 

 

 

 

 

 

 

146,925

 

Debt issuance costs related to convertible debt

 

 

 

 

 

(344

)

 

 

 

 

 

(1,019

)

Purchase of capped call

 

 

 

 

 

 

 

 

 

 

 

(25,335

)

Net cash (used in) provided by financing activities

 

 

 

 

 

(491

)

 

 

2,471

 

 

 

102,914

 

Effect of foreign currency rates on cash

 

 

(48

)

 

 

352

 

 

 

(324

)

 

 

(8

)

Net change in cash and cash equivalents

 

 

(81,089

)

 

 

6,782

 

 

 

(101,581

)

 

 

23,057

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

Beginning of period

 

 

308,642

 

 

 

322,352

 

 

 

329,134

 

 

 

306,077

 

End of period

 

$

227,553

 

 

$

329,134

 

 

$

227,553

 

 

$

329,134

 

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

 

 

2021

 

2020

 

% change

 

2021

 

2020

 

% change

GAAP gross profit

 

$

38,996

 

 

$

35,539

 

 

10%

 

$

146,498

 

 

$

147,791

 

 

(1)%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

New headquarters noncash rent expense

 

 

 

 

 

 

 

 

 

 

 

 

 

417

 

 

 

Amortization of acquisition-related intangibles

 

 

752

 

 

 

886

 

 

 

 

 

1,948

 

 

 

3,586

 

 

 

Share-based compensation

 

 

926

 

 

 

587

 

 

 

 

 

3,679

 

 

 

2,132

 

 

 

Non-GAAP gross profit

 

$

40,674

 

 

$

37,012

 

 

10%

 

$

152,125

 

 

$

153,926

 

 

(1)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP gross margin

 

 

62.6

%

 

 

60.8

%

 

 

 

 

60.5

%

 

 

61.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP loss from operations

 

$

(21,639

)

 

$

(13,426

)

 

61%

 

$

(74,343

)

 

$

(66,080

)

 

13%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

 

 

2,386

 

 

 

 

 

 

 

 

2,386

 

 

 

 

 

 

New headquarters noncash rent expense

 

 

 

 

 

 

 

 

 

 

 

 

 

1,479

 

 

 

Amortization of acquisition-related intangibles

 

 

1,420

 

 

 

1,363

 

 

 

 

 

4,017

 

 

 

5,507

 

 

 

Share-based compensation

 

 

9,665

 

 

 

5,922

 

 

 

 

 

35,075

 

 

 

24,399

 

 

 

Total Non-GAAP adjustments

 

 

13,471

 

 

 

7,285

 

 

 

 

 

41,478

 

 

 

31,385

 

 

 

Non-GAAP loss from operations

 

$

(8,168

)

 

$

(6,141

)

 

33%

 

$

(32,865

)

 

$

(34,695

)

 

(5)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP loss from operations % of total revenue

 

 

(12.6

)%

 

 

(10.1

)%

 

 

 

 

(13.1

)%

 

 

(13.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(23,609

)

 

$

(18,184

)

 

30%

 

$

(81,209

)

 

$

(76,984

)

 

5%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Total Non-GAAP adjustments affecting loss from operations

 

 

13,471

 

 

 

7,285

 

 

 

 

 

41,478

 

 

 

31,385

 

 

 

Amortization of debt discount and issuance costs

 

 

372

 

 

 

3,277

 

 

 

 

 

1,491

 

 

 

8,703

 

 

 

Tax impact related to non-GAAP adjustments

 

 

2,529

 

 

 

1,736

 

 

 

 

 

9,098

 

 

 

8,645

 

 

 

Non-GAAP net loss

 

$

(7,237

)

 

$

(5,886

)

 

23%

 

$

(29,142

)

 

$

(28,251

)

 

3%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP diluted loss per share

 

$

(0.16

)

 

$

(0.14

)

 

 

 

$

(0.66

)

 

$

(0.65

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing non-GAAP loss per share

 

 

44,438

 

 

 

43,452

 

 

 

 

 

44,348

 

 

 

43,301

 

 

 

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,

 

 

2021

 

2020

 

2021

 

2020

Cost of Subscription Items

 

 

 

 

 

 

 

 

New headquarters noncash rent expense

 

 

 

 

 

 

 

 

 

 

 

42

 

Amortization of acquisition-related intangibles

 

 

752

 

 

 

714

 

 

 

1,935

 

 

 

2,928

 

Share-based compensation

 

 

207

 

 

 

126

 

 

 

715

 

 

 

423

 

Total cost of subscription items

 

$

959

 

 

$

840

 

 

$

2,650

 

 

$

3,393

 

 

 

 

 

 

 

 

 

 

Cost of Maintenance Items

 

 

 

 

 

 

 

 

New headquarters noncash rent expense

 

 

 

 

 

 

 

 

 

 

 

64

 

Amortization of acquisition-related intangibles

 

 

 

 

 

172

 

 

 

13

 

 

 

658

 

Share-based compensation

 

 

136

 

 

 

64

 

 

 

498

 

 

 

242

 

Total cost of maintenance items

 

$

136

 

 

$

236

 

 

$

511

 

 

$

964

 

 

 

 

 

 

 

 

 

 

Cost of Services Items

 

 

 

 

 

 

 

 

New headquarters noncash rent expense

 

 

 

 

 

 

 

 

 

 

 

311

 

Share-based compensation

 

 

583

 

 

 

397

 

 

 

2,466

 

 

 

1,467

 

Total cost of services items

 

$

583

 

 

$

397

 

 

$

2,466

 

 

$

1,778

 

 

 

 

 

 

 

 

 

 

Sales and Marketing Items

 

 

 

 

 

 

 

 

New headquarters noncash rent expense

 

 

 

 

 

 

 

 

 

 

 

283

 

Amortization of acquisition-related intangibles

 

 

668

 

 

 

477

 

 

 

2,069

 

 

 

1,921

 

Share-based compensation

 

 

3,073

 

 

 

978

 

 

 

10,407

 

 

 

6,536

 

Total sales and marketing items

 

$

3,741

 

 

$

1,455

 

 

$

12,476

 

 

$

8,740

 

 

 

 

 

 

 

 

 

 

Research and Development Items

 

 

 

 

 

 

 

 

New headquarters noncash rent expense

 

 

 

 

 

 

 

 

 

 

 

517

 

Share-based compensation

 

 

2,421

 

 

 

1,647

 

 

 

8,288

 

 

 

6,061

 

Total research and development items

 

$

2,421

 

 

$

1,647

 

 

$

8,288

 

 

$

6,578

 

 

 

 

 

 

 

 

 

 

General and Administrative Items

 

 

 

 

 

 

 

 

New headquarters noncash rent expense

 

 

 

 

 

 

 

 

 

 

 

262

 

Share-based compensation

 

 

3,245

 

 

 

2,710

 

 

 

12,701

 

 

 

9,670

 

Total general and administrative items

 

$

3,245

 

 

$

2,710

 

 

$

12,701

 

 

$

9,932

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

 

$

2,386

 

$

 

$

2,386

 

$

PROS Holdings, Inc.

Supplemental Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands)

(Unaudited)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2021

 

2020

 

2021

 

2020

Adjusted EBITDA

 

 

 

 

 

 

 

 

GAAP Loss from Operations

 

$

(21,639

)

 

$

(13,426

)

 

$

(74,343

)

 

$

(66,080

)

Acquisition-related expenses

 

 

2,386

 

 

 

 

 

 

2,386

 

 

 

 

Amortization of acquisition-related intangibles

 

 

1,420

 

 

 

1,363

 

 

 

4,017

 

 

 

5,507

 

New headquarters noncash rent expense

 

 

 

 

 

 

 

 

 

 

 

1,479

 

Share-based compensation

 

 

9,665

 

 

 

5,922

 

 

 

35,075

 

 

 

24,399

 

Depreciation and other amortization

 

 

1,812

 

 

 

2,387

 

 

 

8,043

 

 

 

8,827

 

Capitalized internal-use software development costs

 

 

 

 

 

(421

)

 

 

 

 

 

(1,686

)

Adjusted EBITDA

 

$

(6,356

)

 

$

(4,175

)

 

$

(24,822

)

 

$

(27,554

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by operating activities

 

$

(970

)

 

$

12,452

 

 

$

(18,555

)

 

$

(49,389

)

Purchase of property and equipment (excluding new headquarters)

 

 

(364

)

 

 

(601

)

 

 

(1,655

)

 

 

(2,248

)

Capitalized internal-use software development costs

 

 

 

 

 

(421

)

 

 

 

 

 

(1,686

)

Free Cash Flow

 

$

(1,334

)

 

$

11,430

 

 

$

(20,210

)

 

$

(53,323

)

 

 

 

 

 

 

 

 

 

Guidance

 

 

 

 

 

 

 

 

 

 

Q1 2022 Guidance

 

Full Year 2022 Guidance

 

 

Low

 

High

 

Low

 

High

Adjusted EBITDA

 

 

 

 

 

 

 

 

GAAP Loss from Operations

 

$

(26,400

)

 

$

(25,400

)

 

$

(90,300

)

 

$

(87,300

)

Amortization of acquisition-related intangibles

 

 

2,400

 

 

 

2,400

 

 

 

8,400

 

 

 

8,400

 

Share-based compensation

 

 

10,400

 

 

 

10,400

 

 

 

48,400

 

 

 

48,400

 

Depreciation and other amortization

 

 

1,600

 

 

 

1,600

 

 

 

5,500

 

 

 

5,500

 

Adjusted EBITDA

 

$

(12,000

)

 

$

(11,000

)

 

$

(28,000

)

 

$

(25,000

)

 

Contacts

Investor Contact:

PROS Investor Relations

Belinda Overdeput

713-335-5895

ir@pros.com

Media Contact:

Amy Williams

713-335-5978

awilliams@pros.com

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