PROS Holdings, Inc. (PRO) Bundle
A Brief History of PROS Holdings, Inc.
Company Overview
PROS Holdings, Inc. is a technology company that specializes in AI-driven pricing and revenue management solutions. As of 2024, the company operates primarily in the United States, Europe, and other global markets.
Financial Performance
As of September 30, 2024, PROS reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenue | $82,702,000 | $77,250,000 | $245,403,000 | $226,224,000 |
| Subscription Revenue | $67,068,000 | $59,987,000 | $197,017,000 | $173,260,000 |
| Net Income (Loss) | $235,000 | ($13,868,000) | ($18,508,000) | ($46,159,000) |
| Gross Profit | $54,404,000 | $48,786,000 | $159,453,000 | $139,647,000 |
Revenue Breakdown
Revenue composition for Q3 2024 highlights the following:
| Type | Q3 2024 | Q3 2023 |
|---|---|---|
| Subscription Revenue | $67,068,000 | $59,987,000 |
| Maintenance and Support Revenue | $3,361,000 | $4,693,000 |
| Services Revenue | $12,273,000 | $12,570,000 |
Operating Expenses
The operating expenses for the three months ended September 30, 2024, were as follows:
| Expense Type | Q3 2024 | Q3 2023 |
|---|---|---|
| Selling and Marketing | $20,074,000 | $20,324,000 |
| Research and Development | $21,081,000 | $22,205,000 |
| General and Administrative | $13,218,000 | $14,099,000 |
| Total Operating Expenses | $54,373,000 | $56,628,000 |
Cash Flow and Liquidity
As of September 30, 2024, the cash flow metrics were as follows:
| Cash Flow Type | 9M 2024 | 9M 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $3,370,000 | ($3,967,000) |
| Net Cash Used in Investing Activities | ($840,000) | ($2,281,000) |
| Net Cash Used in Financing Activities | ($30,930,000) | ($28,269,000) |
Stockholders' Equity
As of September 30, 2024, the stockholders' equity details were:
| Component | Amount |
|---|---|
| Common Stock | $52,000 |
| Additional Paid-In Capital | $625,085,000 |
| Treasury Stock | ($29,847,000) |
| Accumulated Deficit | ($665,760,000) |
| Total Stockholders' (Deficit) Equity | ($75,224,000) |
Debt and Financing
As of September 30, 2024, the company had the following outstanding debt:
| Debt Type | Principal Amount | Net Carrying Amount |
|---|---|---|
| 2024 Notes | $21,700,000 | $21,700,000 |
| 2027 Notes | $266,816,000 | $271,173,000 |
Market Position and Strategy
PROS Holdings has focused on enhancing its product offerings and expanding its market reach, particularly in AI-driven solutions. The company has been navigating a challenging macroeconomic environment while striving for profitable growth.
As of September 30, 2024, the company had cash and cash equivalents totaling $140.6 million, down from $168.7 million at the end of 2023, primarily due to the repayment of the 2024 Notes.
A Who Owns PROS Holdings, Inc. (PRO)
Major Shareholders
As of 2024, PROS Holdings, Inc. (PRO) has several major shareholders including institutional investors and insiders. The following table details the largest shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 9.7% | Institutional |
| BlackRock, Inc. | 8.4% | Institutional |
| Dimensional Fund Advisors LP | 6.3% | Institutional |
| FMR LLC (Fidelity) | 5.1% | Institutional |
| Insider Holdings | 3.2% | Insider |
Insider Ownership
Insider ownership is an important aspect of company governance. As of 2024, the following key executives and board members hold significant shares in PROS Holdings:
| Insider Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Andres Reiner | CEO | 1,000,000 | 2.1% |
| Mark P. McGowan | CFO | 300,000 | 0.6% |
| Board Member A | Board Member | 150,000 | 0.3% |
Institutional Investor Trends
Institutional investors are increasingly showing interest in PROS Holdings. The following table summarizes the changes in institutional ownership over the last year:
| Institution | Q1 2023 Ownership | Q4 2023 Ownership | Change (%) |
|---|---|---|---|
| The Vanguard Group, Inc. | 8.9% | 9.7% | 0.8% |
| BlackRock, Inc. | 8.0% | 8.4% | 0.4% |
| Dimensional Fund Advisors LP | 5.9% | 6.3% | 0.4% |
Market Capitalization and Stock Performance
As of late 2024, PROS Holdings, Inc. has a market capitalization of approximately $1.5 billion. The stock performance has seen fluctuations due to market conditions and company performance metrics:
| Metric | Value |
|---|---|
| Current Stock Price | $31.65 |
| 52-Week High | $38.50 |
| 52-Week Low | $25.25 |
| Year-to-Date Performance | +15% |
Recent Developments
Recent developments related to ownership include a series of stock buybacks and the issuance of convertible debt, which may impact future ownership structures:
| Event | Date | Impact |
|---|---|---|
| Convertible Debt Issuance | October 2023 | Increased institutional ownership |
| Stock Buyback Program | January 2024 | Enhanced shareholder value |
Conclusion
As of 2024, the ownership landscape of PROS Holdings, Inc. is characterized by a mix of institutional and insider investors, with a focus on enhancing shareholder value through strategic initiatives.
PROS Holdings, Inc. (PRO) Mission Statement
Overview of Mission Statement
The mission statement of PROS Holdings, Inc. reflects its commitment to leveraging artificial intelligence to drive profitable growth for its customers. PROS aims to deliver solutions that enhance the shopping and selling experiences for businesses worldwide, focusing on optimizing pricing and revenue management.
Financial Performance Indicators
As of the third quarter of 2024, PROS Holdings reported an increase in subscription revenue by 12% and 14% for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. Total revenue also saw an increase of 7% and 8% for the same time frames.
| Performance Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $82.7 million | $77.3 million | 7% |
| Subscription Revenue | $67.1 million | $60.0 million | 12% |
| Recurring Revenue | 85% of Total Revenue | N/A | N/A |
| Gross Profit Margin | 66% | 63% | 3% |
Recurring Revenue Insights
Recurring revenue, which encompasses subscription and maintenance support revenue, accounted for 85% and 84% of total revenue for the three and nine months ending September 30, 2024, respectively. The gross revenue retention rate remained above 93%.
Operational Efficiency
The company's subscription gross profit margin improved to 78% for the three and nine months ended September 30, 2024, compared to 76% and 75% during the same periods in 2023.
Cash Flow and Liquidity Position
PROS Holdings reported cash provided by operating activities amounting to $3.4 million for the nine months ended September 30, 2024. This marks an improvement from cash used in operating activities of $4.0 million for the nine months ended September 30, 2023.
| Cash Flow Metrics | 2024 | 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $3.4 million | ($4.0 million) |
| Cash and Cash Equivalents | $140.6 million | $168.7 million |
| Working Capital | $44.2 million | $37.3 million |
Market Position and Competitive Landscape
PROS Holdings is positioned as a leader in AI-driven pricing and revenue optimization solutions, catering to various sectors including travel, manufacturing, and distribution. The company continues to navigate a complex macroeconomic environment influenced by factors such as inflation and supply chain disruptions.
Research and Development Investment
In the third quarter of 2024, PROS invested $21.1 million in research and development, reflecting a focus on enhancing its product offerings and maintaining competitive advantage.
| Operating Expenses | Q3 2024 | Q3 2023 |
|---|---|---|
| Selling and Marketing | $20.1 million | $20.3 million |
| Research and Development | $21.1 million | $22.2 million |
| General and Administrative | $13.2 million | $14.1 million |
| Total Operating Expenses | $54.4 million | $56.6 million |
Conclusion of Mission Statement Alignment
The financial metrics and operational strategies outlined in PROS Holdings' mission statement underscore the company's commitment to delivering value through innovation and customer-centric solutions. The focus on AI-driven technologies positions PROS to meet the evolving needs of its clients effectively.
How PROS Holdings, Inc. (PRO) Works
Business Model
PROS Holdings, Inc. operates primarily in the field of AI-driven pricing and revenue management solutions. The company focuses on providing advanced analytics and cloud-based solutions designed to optimize pricing and sales operations across various industries, including travel, distribution, and manufacturing.
Financial Performance
As of September 30, 2024, PROS Holdings reported significant growth in its financial metrics, illustrating its operational efficiency and market demand for its solutions.
| Metric | Q3 2024 | Q3 2023 | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Total Revenue | $82,702,000 | $77,250,000 | $5,452,000 | 7% |
| Subscription Revenue | $67,068,000 | $59,987,000 | $7,081,000 | 12% |
| Maintenance and Support Revenue | $3,361,000 | $4,693,000 | ($1,332,000) | (28%) |
| Services Revenue | $12,273,000 | $12,570,000 | ($297,000) | (2%) |
| Net Income (Loss) | $235,000 | ($13,868,000) | $14,103,000 | — |
Revenue Breakdown
For the nine months ended September 30, 2024, the revenue breakdown indicates a strong reliance on subscription models:
| Revenue Type | Amount ($) | Percentage of Total Revenue |
|---|---|---|
| Subscription | $197,017,000 | 80% |
| Maintenance and Support | $10,341,000 | 4% |
| Services | $38,045,000 | 16% |
Cost Structure
In terms of cost, PROS Holdings has managed to maintain a stable cost structure while improving gross profit margins. The following table outlines key cost metrics:
| Cost Type | Q3 2024 ($) | Q3 2023 ($) | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Cost of Revenue | $28,298,000 | $28,464,000 | ($166,000) | (1%) |
| Cost of Subscription | $14,470,000 | $14,510,000 | ($40,000) | — |
| Cost of Services | $12,130,000 | $12,185,000 | ($55,000) | — |
Profitability Metrics
PROS Holdings has shown improvement in profitability metrics, with a subscription gross profit margin of 78% for Q3 2024, up from 76% in Q3 2023.
Liquidity Position
As of September 30, 2024, PROS Holdings had cash and cash equivalents totaling $140.6 million, a decrease from $168.7 million at the end of 2023. The company reported a working capital of $44.2 million.
Debt and Financing
PROS Holdings has convertible debt with a net carrying amount of $271.2 million as of September 30, 2024. The company has also engaged in capped call transactions to manage potential dilution.
Geographic Revenue Distribution
Revenue by geographic region for Q3 2024 is as follows:
| Region | Revenue ($) | Percentage of Total Revenue |
|---|---|---|
| United States | $29,251,000 | 35% |
| Europe | $25,391,000 | 31% |
| Rest of the World | $28,060,000 | 34% |
Future Performance Outlook
PROS Holdings expects to recognize approximately $429.3 million of revenue from remaining performance obligations as of September 30, 2024, with $231.0 million expected to be recognized over the next 12 months.
How PROS Holdings, Inc. (PRO) Makes Money
Revenue Streams
PROS Holdings, Inc. generates revenue through multiple streams, primarily consisting of subscription revenue, maintenance and support, and services. As of Q3 2024, the revenue breakdown is as follows:
| Revenue Type | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Subscription | $67,068 | $59,987 | $7,081 | 12% |
| Maintenance and Support | $3,361 | $4,693 | ($1,332) | (28%) |
| Total Subscription, Maintenance and Support | $70,429 | $64,680 | $5,749 | 9% |
| Services | $12,273 | $12,570 | ($297) | (2%) |
| Total Revenue | $82,702 | $77,250 | $5,452 | 7% |
Subscription Revenue Growth
Subscription revenue has seen a significant increase, attributed to a rise in new and existing customer subscription contracts. In the nine months ended September 30, 2024, subscription revenue reached $197,017, a 14% increase compared to $173,260 in the same period of 2023.
Maintenance and Support Revenue Decline
Conversely, maintenance and support revenue has decreased, primarily due to existing maintenance customers migrating to cloud solutions and maintenance churn. For Q3 2024, maintenance and support revenue was $3,361, down from $4,693 in Q3 2023, reflecting a 28% decrease.
Services Revenue Overview
Services revenue for Q3 2024 was $12,273, slightly down from $12,570 in Q3 2023, marking a 2% decline. This fluctuation is influenced by the completion of several large implementations in the previous year.
Cost Structure and Profitability
PROS operates with a focus on maintaining profitability across its revenue streams. For Q3 2024, the gross profit was $54,404, yielding a gross margin of approximately 66%.
| Cost Type | Q3 2024 Cost (in thousands) | Q3 2023 Cost (in thousands) | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Cost of Subscription | $14,470 | $14,510 | ($40) | (<1%) |
| Cost of Maintenance and Support | $1,698 | $1,769 | ($71) | (4%) |
| Total Cost of Subscription, Maintenance and Support | $16,168 | $16,279 | ($111) | (<1%) |
| Cost of Services | $12,130 | $12,185 | ($55) | (<1%) |
| Total Cost of Revenue | $28,298 | $28,464 | ($166) | (<1%) |
Operating Expenses
Operating expenses for Q3 2024 totaled $54,373, with the following breakdown:
| Operating Expense Type | Q3 2024 Expense (in thousands) | Q3 2023 Expense (in thousands) | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Selling and Marketing | $20,074 | $20,324 | ($250) | (1%) |
| Research and Development | $21,081 | $22,205 | ($1,124) | (5%) |
| General and Administrative | $13,218 | $14,099 | ($881) | (6%) |
| Total Operating Expenses | $54,373 | $56,628 | ($2,255) | (4%) |
Cash Flow and Liquidity
As of September 30, 2024, PROS reported cash and cash equivalents of $140.6 million. The company generated $3.4 million in cash from operating activities for the nine months ended September 30, 2024, compared to a cash outflow of $4.0 million for the same period in 2023.
| Cash Flow Component | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $3,370 | ($3,967) |
| Net Cash Used in Investing Activities | ($840) | ($2,281) |
| Net Cash Used in Financing Activities | ($30,930) | ($28,269) |
| Net Change in Cash | ($28,183) | ($34,547) |
Future Revenue Expectations
As of September 30, 2024, PROS anticipates recognizing approximately $429.3 million in revenue from remaining performance obligations, with around $231.0 million expected to be recognized over the next 12 months.
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Article updated on 8 Nov 2024
Resources:
- PROS Holdings, Inc. (PRO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of PROS Holdings, Inc. (PRO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View PROS Holdings, Inc. (PRO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.