PROS Announces Third Quarter 2014 Financial Results

HOUSTON, Tex., Nov. 7 — PROS Holdings, Inc., a big data software company, today announced financial results for the third quarter ended September 30, 2014.

Total non-GAAP revenue for the third quarter of 2014 was $48.7 million and represented an increase of 32% over the third quarter of 2013.

CEO Andres Reiner stated, “We are pleased with our strong third quarter results as we continue to execute on our long-term diversified growth strategy. Through the first nine months of the year, we have added a record number of new customers across a diverse range of industries, indicative of the increased demand for our unique big data applications that help companies outperform. We will continue to invest in increasing awareness and adoption, extending our product leadership position, and expanding our global reach and scale to capitalize on the large market opportunity.”

For the quarter ended September 30, 2014, GAAP operating loss was $3.7 million, compared with operating income of $1.4 million in the third quarter of 2013. GAAP net loss for the third quarter was $3.7 million or $0.13 per share, compared with net income of $1.0 million, or $0.03 per share, in the third quarter of 2013.

For the quarter ended September 30, 2014, non-GAAP operating income was $5.5 million, compared with $6.3 million in the third quarter of 2013. Non-GAAP net income for the third quarter of 2014 was $3.4 million, or $0.11 per share, compared with $4.6 million, or $0.15 per share in the third quarter of 2013.

Recent Business Highlights

• Successfully completed the acquisition of over 95% of the outstanding shares and voting rights of Cameleon Software SA, which will result in the full delisting of Cameleon Software SA by the end of 2014.
• Continued to position PROS for long-term growth with leadership changes that will help bring further scale and focus; Tim Girgenti, Chief Marketing Officer since 2010 is now the Company’s Chief Strategy Officer; Patrick Schneidau, a 10-year PROS veteran, is the Company’s new Chief Marketing Officer.
• Released PROS Cameleon CPQ Fall ’14, uniting the power of predictive and prescriptive pricing analytics with simple-to-use configure-price-quote (CPQ) capabilities, enabling sales teams to deliver smarter, faster, winning quotes to customers.
• Announced Cameleon Parts Quoting, a graphically interactive configuration of PROS Cameleon CPQ solution that supports use cases common to discrete and process manufacturing organizations, including those in the high-tech, industrial equipment and automotive industries.
• Introduced PROS Group Sales Optimizer (GSO), a new solution that enables airlines and their customers to book group travel in real-time. PROS GSO includes dynamic pricing integrated with sales effectiveness, revenue management and contract management.

Executive Vice President and Chief Financial Officer Charles Murphy stated, “We are pleased with our results for the third quarter which came in above our guidance. Our non-GAAP revenue grew 32% period over period, driven by accelerating organic growth and solid contribution from our acquisitions. Our balance sheet also strengthened with cash and cash equivalents increasing to $40.4 million dollars, and we generated $12.2 million in cash flow from operations. We are well positioned to capture the increasing demand for our solutions, and this is reflected in our guidance for the fourth quarter and full year 2014.”

The attached tables provide a reconciliation of GAAP to non-GAAP revenue, gross profit, income from operations, net income as well as earnings per share for the three and nine months ended September 30, 2014.

Financial Outlook

Based on information as of today, PROS anticipates the following:

• Total non-GAAP revenue for the fourth quarter of 2014 in the range of $52 million to $55 million and total non-GAAP revenue for the full year 2014 in the range of $190 million to $193 million.
• Non-GAAP operating income of $7 million to $8.5 million and non-GAAP income per share of $0.14 to $0.17 for the fourth quarter of 2014, which excludes estimated non-cash share-based compensation charges of approximately $6.3 million, and estimated intangible amortization and integration-related expenses of approximately $2.0 million. The Company expects non-GAAP operating margin for the full year 2014 to be 9-10%.
• Non-GAAP estimated tax rate of approximately 37% for the fourth quarter and full year 2014.
• Estimated weighted average diluted shares outstanding of 30.5 million and 30.3 million for the fourth quarter and full year 2014, respectively.