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August 8, 2014

PROS Holdings Reports Second Quarter 2014 Financial Results

HOUSTON, Tex., Aug. 8 — PROS Holdings, Inc., a big data software company, today announced financial results for the second quarter ended June 30, 2014.

Total non-GAAP revenue for the second quarter of 2014 was $46.5 million and represented an increase of 31% over the second quarter of 2013.

CEO Andres Reiner stated, “Overall we had a strong second quarter at PROS. Our team is deeper and broader, our portfolio of world-class customers is growing, our pace of product innovation continues, our partner ecosystem is strengthening, and our acquisitions are performing well. We are seeing indications that the market is accelerating with a record number of new customer wins in the first half, underpinning our confidence in our long-term growth strategy.”

For the quarter ended June 30, 2014, GAAP operating loss was $7.9 million, compared with operating income of $0.8 million in the second quarter of 2013. GAAP net loss for the second quarter was $7.0 million or $0.24 per share, compared with net income of $0.6 million, or $0.02 per share, in the second quarter of 2013.

For the quarter ended June 30, 2014, non-GAAP operating income was $3.5 million, compared with $4.9 million in the second quarter of 2013. Non-GAAP net income for the second quarter of 2014 was $1.8 million, or $0.06 per share, compared with $3.5 million, or $0.12 per share in the second quarter of 2013.

Financial Presentation

PROS has revised the presentation of revenue and cost of revenue in its condensed consolidated statements of comprehensive income to provide investors with more meaningful information regarding its business.

Recent Business Highlights

  • Recorded strong bookings growth in the first half, outpacing revenue growth, both on an organic basis and a total basis; growth driven by a record number of deals in a first half, of which approximately 70% were new customer wins.
  • Added a record number of new customers across a diverse set of industries, such as Anixter International, The Perstorp Group, Stahl Group, Qantas Airways, and YRC Worldwide, among others; continued to strengthen partnerships with existing customers such as Etihad Airways, Mopar and Swiss International Air Lines, among others.
  • Continued to strengthen PROS leadership team and position the company for continued growth with the addition of John “Jake” Cleveland as senior vice president of worldwide sales, and the appointment of Chris J. Jones as senior vice president of alliances and partners.
  • Achieved the latest level of product certifications from SAP for integration of PROS solutions into SAP ERP and SAP CRM, continuing to provide the most complete and seamless integration experience in SAP.

Executive Vice President and Chief Financial Officer Charles Murphy stated, “We are pleased with our results for the second quarter with our non-GAAP revenue growing 31% period over period, driven by our recent acquisitions, increased license revenue recognized at contract and more recurring revenue. Our guidance for the third quarter reflects some variability, but based on our strong sales performance in the first half of the year and our expanding opportunities, we remain confident in our ability to reach our prior full year revenue guidance.”

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

Financial Outlook

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

  • Total non-GAAP revenue for the third quarter of 2014 in the range of $47 million to $48.5 million. The Company is reiterating its full year revenue guidance with total non-GAAP revenue for the full year ending December 31, 2014, in the range of $190 million to $194 million.
  • Non-GAAP operating income of $3 million to $4.5 million and non-GAAP income per share of $0.05 to $0.08 for the third quarter of 2014, which excludes estimated non-cash share-based compensation charges of approximately $6.4 million, and estimated intangible amortization and integration-related expenses of approximately $2.1 million. Non-GAAP operating margin expectations for the full year 2014 remain at approximately 10%.
  • Non-GAAP estimated tax rate of approximately 40% for the third quarter and full year 2014.
  • Estimated weighted average diluted shares outstanding of 30.4 million for the third quarter and full year 2014.
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