PRO - Earnings call transcript Q4 2017

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Operator

Greetings and welcome to PROS Holdings, Inc. Fourth Quarter 2017 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. to conference like host, to now Schulz. Stefan would turn over the your I you. Thank

begin. may You

Stefan Schulz

Thank afternoon is operator. With and you, Good Executive me joining you Chief on us. for today's call Officer. Andres President everyone Reiner, and thank

available in reconciliation Accepted well guidance will with to A is is and encourage basis. as effort discuss our to SEC refer at Relations uncertainties no well market information. information. everyone A distributed available review non-GAAP comparable Please the differ circumstances. forward-looking and strategy, note forecast. website the this the our most during press GAAP extent financial discuss revenue, or today's as measure future directly events any assumes current consist Principles Also as of as on results risks forward-looking business certain in accordance of will statements financial the described and filings materially PROS limitation future the without forward-looking we measure and to of in to or there, obligation the we statements will non-GAAP update unreasonable prospects, Before we other GAAP without Investor earlier the for results factors today Generally each section including some of replay additional this to pros.com. opportunities. also our release available with our information reflect could call begin, the of more and on call, that from Actual during results call to guidance, margin, a we our Accounting

to I Andres. that, will call with turn over So, the

Andres Reiner

devices. in to of by call. to everyone you than buy must simple, This joining they recent fair our helping buying Thank than companies BXB single customers social, their for shape can you, the to They competitive a seeing make believe as market prices now then offer, us. rep see choose sales notifies for purchase. expect the sales powered with offer an CPQ new presents be her same smart be customers for now her whenever the see outperformers is changes buyers complete online is and years. solution. mission rep the sales our in or artificial and purchase. how who With We pricing expectations an expectations commitment at purchase. to vision preferences grow team are us in customers tomorrow biggest detection accessing customize solutions in more with able competition online, We start the of their on rep reality experience their accepts consumer to mobile morning smart PROS, sell. device. Smart empowering an available to to and this portal e-commerce. who personal to global how future any U.S. thank I'd our Pictures digital, and is Monet half in rep today's radical take And personalize, by shift by XX% The opportunity more moment and complete time gives more incredible in from personalized those from across immediately to they our This continues our day. immediately go sales get a offer across with their seamlessly are channels, customers the and smarter for digital. and the fluid to for preferences and consistent, Companies customers. is has our outperform. pricing to personalized, this further, sales while it need creates buyer opportunity offers us afternoon to buyer be opportunity for updated as company Like see shift tells platform closed. into reps buying storefront. frictionless, consumers business. With to to this channels our intelligence outpace buying translates the opportunities of starting to Stefan the the that experience technology, the like assistant thanking redefine an opportunities the real-time good vision her realized AI e-commerce power to and The creates Monet customer purchases our Monet tools opportunity sales rep move to

all scale like in areas. in us team increase the things created more accomplish which strategy productivity, less growing And At in volume XX in how how to delivered great company changes of to centers we believe year-over-year we outperform. our opportunity year mix led to productivity, with driving our in XX% make of grow, in The our and represented globally. we we executing about we personnel experience, on quota-carrying As three in last of opportunity than compared this have year, assumes market same tremendous And company large the increase sell, in this period. deal the and we report recurring XX% We our data to more buying business our committed skill pleased transform drove before. consistency a XXXX, a us XX% In beginning added revenue. incredible sales revenue that to deliver combination business. XX% We to and XXXX. to I'm revenue consistency, improved by

our customers number Our extended than more support footprint our year-over-year. XX% cloud us cloud we to enabled by as growth of increased

pleased and both in and report by annual revenue by We're exceptional on financial recurring XXXX. our scale productivity of grew XX% high focus that drove end to guidance subscription in year the year-over-year increased XXXX, on revenue we metrics. performance exceeding consistency, full Our XX%

revenue. And important committed innovation, are flow quarter. to migrations, achieved and operational to we total XXXX, milestones to our in overtake and generated efficiency, transformation cash skill strategic by the business the We In drive also our focusing on positive largest subscription cloud continue revenue adoption. free pillars: We two we in market contributor growth QX. four in as maintenance within saw

to like I'd from few share of highlights So, areas. each these a

is innovation as are innovations a a as see hallmark First, modern our who long-term component we a And commerce key goals. realizing to are company. our easy we of growth

Our strategy is solutions to enable our to customers and and that deliver offers channels. create across a consistent AI all personalized pricing

will CPQ journey to AirPlus these best-of-breed Now, serve solution expanding bringing our to the our globally. have now Microsoft and AirPlus Technology a on transformation and And of technologies small quarter. provide this are grow first on of market one will a of Dynamics designed offers vision winning centers To realize We These to broader experience. incredible technology we you into Microsoft pricing excited their fast-track deliver to to personalized Centers an this selected the AI travel Microsoft customers to I'd partnerships solution into customers component a are been of to as by digital their provider, to new CPQ how to to showcase strategy an a we [ph] seamless partners the see last example are as that by solutions robust, give bring example their like AirPlus, in and that to AirPlus our accomplish your the educate innovations grow directly together a their omnichannel customers an started online. digital needs our and as the manufacturers to e-commerce who incredible customers a for solutions Smart in meet management vision, company see sales feature Smart manufacturing business critical how PROS tailored leverage a era. this to will to industries. has opportunity plans dynamic medium uniquely to solutions industry solution our We customers target spotlight leveraging modernize and for businesses. as Azure. an experience our create

the by business our more scaling migrating cloud. to on focused we're for customers Second,

is our to And innovation this. latest created to to use attract the I'm strategy accomplish by we cloud. customers excited to have what incredibly Our

next-generation one to to expect pricing market. the of We're in to two in have cloud. to drive a solution our to customers who of dozen and For innovations expected guidance now already. commerce XXXX move expect like build momentum how Modern many pull this be customers the customers set to standard these our factors Customers migrate more migration we use with are already program. our seeing is what than adjust that example, will dynamically to And revolutionizing new the and their innovation inspired customers product that our our embracing on flexibility and science have customers transparency markets.

strong a our see to efficiencies opportunity further our we driving across profitability by improve business. Third,

elastically. compute allowing are we latest of reduce our to in cost benefits For cloud, like the designing fully ways scaling example, leverage us to the innovations

these to and continue infrastructure improve subscription margins customers the leverage have further As for place. the we to innovations, we that adopt opportunity global gross have in cloud

refining us. This efforts. front on marketing driving further help pleased demand strengthen and we're be to we Finally, I'm year, our digital will as focus generation market Officer capitalize Celia's of these our continue market accelerate driving Celia our in team large Chief on team opportunity to to our Fleischaker focused Marketing and us our welcome leadership adoption. strategy enhancing sales as to to strategy the

this to year. AI our out and platform the to of As look their to that, right I on opportunity we strategy forward employees, our Stefan large thank to have to by team that front XXXX. confident comment enter I'd customers, year our market XXXX, motivated power partners to of With place we another smarter like shareholders us, for being over We and vision financial in support to turn we're carry performance. past the like energized the the call in and for strong e-commerce. in

Stefan Schulz

by too company thanking incredible throughout year driven In because to team you, would stronger We've much we by are as truly the in our cloud become our their of like Thank a improvements infrastructure. last foundation amount to In cloud I transition, it. and early began company transforming transition. we stage, of contributions business. laid change begin cloud and middle an for of company the Andres. today organization, stage our do and we the driving operating a products, how a cloud our

financials. our we about time ago Now, implementation improvements, tremendous an XX%. the We've XX%, we've driven see final be the stage, by ARR. positive in broke In returned the by that to free QX, to continue as we reduced delivered product shift we that BXB ratio QX, our we've increase business close strong a to business. strong we our releases, our a our can maintenance average [ph] half XXX% created the efficiency point Thanks subscription in we've XXXX we earlier, cap make flow. operational our saw investments we enter final as In emphasize impact cash a commitment two QX, made reduced revenue And stages we we our and and as in these ARR to mentioned in as we on further enter cloud, on inflection will in momentum year-over-year made growth. we overtake about growth. a will of in and years cumulative Andres We future to

to to that comment on we are our on As like cloud, to financials. our I base. focus a this customer would increasing the we transition impact complete expect our moments to our we take have the on migrating few

As migrations revenue, in Xx at a revenue will action multiple. which anticipate mid-single-digit maintenance in subscription we put a into cause that into XXXX, will program our convert roughly we decline the

that the to decline churn, in total the single-digits of contribute note revenue due expect combination up full in in We revenue for this $X business. year. expect typically our to Please the to in migrations million subscription high and year we to migrations maintenance

remained rate better XX%. renewal than XXXX Our

we impact as ahead in of migrations the to future Looking increase to our build we program. years, expect momentum

in our When moving basis. finished a Vayant, full of ARR, a primary excluding impact $XXX.X Total $XXX above of growth. on guidance set revenue year quarter guidance up $XXX the at $XXX.X fourth continues on with and million acquisition. sequentially $XX.X Now, XX% the overall fourth to of ARR the quarter We the results. we ARR and was year-over-year million. quarter was million the for up exceeding million, million combined to before driver to the came fourth that be Subscription ARR

in to execution to continue of quicker. full focus revenue. our the solid our ahead was total year-over-year, as due million year also we was mostly fourth implementation customers $XXX.X reducing subscription year-over-year year, revenue million, down in value less revenue announcing financials our services and and to stronger slightly due is XX% three For up represented $XX.X quarter revenue years up overtook revenue cloud getting in our move revenue the throughout line expectations, item and our first than Subscription that professional became times subscription the maintenance the our in quarter, and to bookings Full revenue was after up This maintenance Services of the Subscription implementations. largest XX% to on the year-over-year strong QX combined and and a in was streams. the model new on XX% subscription result to one. XX% recurring complete and organically. our make revenue up from day year commitment revenue revenue. combined basis occurred

the of our to long-term than revenue mix. was For revenue achieve compared ahead This XX% recurring total our XX% as recurring year, to in XX% of our us full XXXX. better our schedule revenue puts target of it

disclosures. rate metrics the can are a XX-month public our the calculated fourth the to break billings deferred calculated revenue this of to of tracks ARR up the and from calculated This deferred recurring generally end transition. through and we of As directly cloud million of portion these continue as out billings. trailing metric growth We recurring year-over-year. our reminder, quarter, we the trailing XX-month intrinsic our revenue go of was be $XX.X was believe facilitate of our calculation At portion with indicative XX%

onto as XX% better consolidating long-term achieving progress of calls, a This Moving view and which margin provider of previous gross renegotiating increase We point that were margins. including between initiatives margins provider. on percentage on towards represents three was terms XX%. we've cloud to sequentially, by that improved mostly result a range margins, primary discussed our a gross target and driven with several achieved XX%, as QX solid subscription this

million the of Now, turning of was $X.X flow, free ahead in cash to in flow, quarter. free due cash we generated strong collections QX, expectations which the to our end at

perspective, of results as with our both deferred For to a in the overall accounts well cash in more with full our was cash our financial balance are total while we're receivable flow investments believe we with revenue an that and From balance burn $XXX.X in quarter to and million investments pleased cash free million. pleased the XXXX. create well-positioned increase business lowering exited XXXX, to an we sheet our $XX.X as exited balance. are the year and year Overall, positions, have we leverage our our fourth

Now, I will quarter turning and move the to full start then first with guidance, the to year.

of million, revenue of subscription expect be over to the the $XX.X $XX.X the million XX% at we quarter, to first in quarter range XXXX the For up first midpoint.

to driven in XX% million our increase be range the $XX.X expect revenue $XX.X revenue. to subscription We total by improvement of million, year-over-year a at midpoint in the strong

expect transition. of our year that revenue $XX rate license for guidance, year between to recognition standard. have now the million. a adjusted revenue. XXX, loss accumulated as With for the to non-GAAP million growth and $X.X million. previously recognize share anticipate subscription quarter We tax estimated the first revenue will per subscription quarter, rate for XX% we be license requires revenue first non-GAAP million to the in the due we $X.X our and GAAP anticipate of of the due reported $XX X% an business a in about current to million impact between share an per the our note during NOLs expect loss term based full headwind an EBITDA tax basic on the $X.XX that And be and of cloud estimated and basis, Please shares benefit we $XX.X us not Cut on recurring a combination to $X.XX This that subscription a as our on outstanding. revenue have to will of economic we've Jobs cash and maintenance accounting Note XXXX range full Act

and between XX% revenue a XXXX million over $XXX in total revenue million, be $XXX primarily midpoint Please expect to be on the at increase of subscription revenue. for XXXX XXX impact immaterial. increased the driven from to note, expect We total XXXX we

the retained Now, the approach I beginning several while over earnings adjustments next to of years. a wanted that that modified the topic to on highlight will XXX, be small XXXX of our at unwound causes

$X $X flow. and to be improvement a flow million free on at the cash We midpoint. will $XX moving estimate full the Now, cash between year million, free over for our XXXX burn million

less XXXX. move $X.X ARR million, be $XX standpoint, the The we're and our between the which are our this baseline and improvement quarter at XXXX improvement This and projected the strong very year will improved for and in a growth the achieve cash company shareholders. flow attributable stronger are work events. higher outlays We last million is probability year between business cloud bonuses our slightly anniversary $XXX the we our EBITDA We financials. as with cash seasonality From and midpoint quarter first cash in us year quarter adjusted remain our value creating to fourth year model to largely approach we than collections. we cloud-metric year-over-year cloud to full in the performance. some related full that loss to that the due our there be expect is payments we pleased as a customers seeing and fourth our be special stronger and with $XX a than to committed to cash not performance Now, and has to Please since we Overall, for confident million long-term our and million. prior a expected over entered quarter to estimate improvement leering in benefits are of effect we done other will ability goals year subscription and third a company. $XXX we've million the XXXX made

XXXX. We look your and PROS for are to grateful support we forward at

questions. the turn operator call back Operator? me for let that, with So, the to

Operator

Instructions] Company. Berg Needham is Please this Thank question-and-answer our And a from be go from first time, conducting & we'll ahead. question you. session. [Operator At Scott

Scott Berg

a congrats ones quarter. and of Couple everyone on Hi for quick good me.

Andres Reiner

Scott. you, Thank

Scott Berg

have kind the functionality three how but Yes, but e-commerce the all, I always provide on." online first have improvement And the couple of rush in. But I these don't want to in now the to shopping individualized to heard of you brought or four over And the like only months to for and your buy on it here are it's of relative these commentary naturally Andres, websites, expect websites. part customers that experience, over on a these discussed "caching They BXB demand a years, times guys lot of you of theme drivers of you the the right XX of we of realize demand all seems carts last finally what about XX And is the seeing sticking it's multiple important you or in thing, activity to last months pricing is. have that know near-term? that ago, talk kind maybe the pricing point. as part expectations biggest is

Andres Reiner

Yes, Scott.

experience. the going right. are that they're to win to go our for think tied right customer's price, -- beyond complete they execution and don't customer; sales how to an that that's deals, market And customers this quoting, how not to You're able stream help start And of e-commerce that channel in offices have a power two What a but help whatever is Because one, to absolutely willingness fluidity. being they're what sales, and just work still creating organization opportunity, components that that sales letting have drive going choose, power to AI in make thinking one but the with customer around not two, that lot tools to we're they we It's on is motion. opportunity through of personalization, able the how be I we to a that price we're but better call real-time pay. you drive that for that sales rep what really take and if omnichannel, to important mine. the through you thoughtful support those you're real-time thinking being to said, is; sense e-commerce And deal is those are digital a seeing obviously companies are the power able channel to going like elsewhere. the customers going

e-commerce separate uniquely So, experience. use with we motion, drive And do channel. conversations digital a that more digital -- feel lot have how rather that on than lot customers of they market And they just and selling there's and that how sales help to support they our positioned a capitalize we're do excitement do their on be how opportunity.

Scott Berg

think on I to that, kind Thank least follow-up you. Very helpful. sales the at the And sized. of

I faster talked to your sales capacity How do improving about in think current But ARR you than capacity can growth should about growth guidance view capacity. forward XXXX and productivity And it what or much sales next in guess that's year-over-year XX%? we initial the an a needs? two. You quarter rate of your growing we those think relative at about change going how

Andres Reiner

first all, with -- really pleased Yes, we're so we're of their productivity. sales

quota-carrying Our sales XX% We ratios the and cap prepared in about in XX% a which improved remarks. personnel, productivity sales I our increase by with [ph] XX%. saw performance commented increase made volume as an my in

those accomplishment our So, team. think by awesome I an are

into productivity, focused year As on but improvements. maintaining an seeing and same we execution quota-carrying had that. driving we're sales even the increase XXXX, driving -- the and improving still in look year we still in productivity incredible XX% further We we're about

Scott Berg

me, last one And -- Stefan. for one it. Got quick last

Is driving guidance just be Your something don't we level. is than little other, and numbers of be a know, I Vayant bit which adjusted may a that consensus in there little I in or higher that might guidance? think spend some bit some the conservatives were, EBITDA current acquisition assumes your lower believe I

Stefan Schulz

the actually holding cost to really maybe we're percentage goods a It the those of points. flat, driven cost with going revenue. by increases really of No, really a you if looked driving in operating feel associated to with to XXXX really. couple operating going sales. not into in overall, increase the add Andres's mean the I But that's comments. for pleased three well. we're making that and with from at be of goes Scott. there And standpoint expenses as up additional more to go not those Vayant, of expenses, more the through as to like generating to be is and progress And It example, still and focused driver efficiency going be continued we'll we scale come we're relatively is be the XXXX function on we It's is actually the attributable to EBITDA. to in

Scott Berg

you. Thank Very jump queue. the in I'll helpful. back

Andres Reiner

you. Thank

Stefan Schulz

Thank you.

Operator

is Our Please Jackson from ahead. next from go Ader JPMorgan. question

Jackson Ader

XX%, Thanks for taking my grow question to be our are expenses guys. Actually if the new other I be of the flat can some these operating fund budget. expect a either to sales of just for should pull where decline question, to Officer last asking will Where expected operating investments Chief from? around Marketing roughly or we you is expenses and back off if some of larger will rep again who for other certainly you expectation

Stefan Schulz

and at the the Yes, in savings effectively. our be which And in line. G&A done and so I we you that process business tell in great business G&A, marketing. more continuously not to first some in that history, to we're the do look going at of of are that's that operate question. the I'll shown look but we've all, ways you selling We a we've could think if only And that able

the looking that as changes those, of about is hires the making part to will are Tom some some sales In our to we've refinement of been be new that some addition, and what quota-carrying we're a capabilities the going a perspective going be inside from Head at that in to a we're talking of doing in past. be Sales new investment of further

will going associated the coming things are of to lower have the at cost that occur and to with travel of nature. that relatively headcount some be sales So, now

So, which it, can at we're in -- efficient in that we ways take structure people. the We're we same can looking add doing have, at time, ways in efficiency at as existing lower well. looking cost manners the we

which have we're we us business. capacity some Bulgaria, And holistically looking things money. of little and experience we also of have. in the those We're that a capacity the at save leveraging also the does some that as are have We a development

we're that us investing necessarily So, otherwise. think you growing not and in spend way the even representative dollars the though a might business, we're requiring that doing it to

we it's this initiatives. something a year is no It's different. of every different So, look that been year into number and

Jackson Ader

And has couple I at some a ARR Understood. Okay. for grown follow-up Andres. look quick for may numbers of of about last organically, Vayant. XX% excluding be you years, then the the just If

So, XX% mismatch of forward projected growth sales a where little guess kind not be of bit with increases. rates but the -- I looking to my something, of seem missing rep does necessarily there a same looking versus growth backward.

should what So, we XXXX? out be in for looking

Andres Reiner

I Well, in early we're our momentum. the about very very feel still you, tell good would sales We overall year.

our you growth. our want more to a we year demand, bookings pleased back-to-back very growth all another year we're ended the and achieved our tell be we year last areas whether put think we around I was great early in with pretty guide in. will has much overall, that with overall we the overall it's and back we've are think and growth But feel grown I very I that on than two pipeline pleased rates confident record it And quarters.

feel very our we overall, good XXXX. into So, rates about growth looking

Jackson Ader

good. sounds Okay, you. Thank

Andres Reiner

Yes.

Operator

Our ahead. next question is from go from Nandan Deutsche Amladi Please Bank.

Nandan Amladi

Hi, taking for good question. my afternoon. Thanks

So, question. this is two-part our

of ago. guided dozen have and airlines pace BXB I place. just the think terms starting customer a Stefan said little time a migrations are And about between to does mix? percentage high in because single-digit year the in What talk you bit already to taken maintenance. airlines, migrations, What this decline You two mix translate is about that

Andres Reiner

very Nandan, could migrate so from travel to in the business, started you definitely Yes, airline our early.

travel that also of our Korean numbers predominantly airlines. been last Etihad business of talked is to XX% and in about we very I as see If our you cloud remember, one first. our of being over in business business we work you where that's the that airline had know about And able existing, migrated you actually you're Airways able quarter when we look at and many. early the are transition about talked

really overall, both airlines capabilities from Cloud-First, now deployments all to If or say, merchandising in pleased that look, a we real-time. the pull shopping cloud. we've the the anything will would maybe we've seen global overall, across So, real-time I travel. adopt But serve new and our and move to early were on are take to longer the factor these concerned capabilities done across BXB we're innovations that that in wanting in airlines

would BXB balanced been across both I travel. So, it's say and

Nandan Amladi

by option? deployed the a is cloud the much migration capitalized Vayant as I'm Vayant sort of is only of And how offering? assuming

Andres Reiner

so Vayant any not is tied customers. part and because very cloud Yes, was of our that's the in from the to any of migrations not beginning included that in

-- to the the migrations PROS dozen that migrated pure So, cloud. customers two is over have

Nandan Amladi

Okay. Thank you.

Andres Reiner

line, migrations question the they when have the to other going a go because bit take some on that's some off signed little is of longer live that when you these happened the of for this the is the maintenance because Your is subscription coming as maintenance have systems, moving will can are migrating maintenance time in the some, imagine in mission-critical, two coming being up actually verifying vary. see And out. would you that

Nandan Amladi

Thank you. Very helpful.

Andres Reiner

Okay.

Operator

Roderick Please from Our Tom go next ahead. Stifel. question from is

Matthew Van Vliet

where you? within maybe looking quarter performed Tom. acquisition, for of of the in in for of guess I And aspect sort go-to-market the Yes, sort for consolidating at hi, terms Thanks Vliet Vayant are on cohesive fourth business just you taking Van question. that my that Matt of platform? the how the

Andres Reiner

found or the ever real from would solution we in tell a acquisition -- sell than conviction the been has true Vayant it's a from -- area integration It's a testament. support, to into a we And Vayant cross-sell. is has finally that one business, both sales say, fully you organizational that is in as the they every part I say one. team. you on it's an from business been have I'd integration, on been culture team embracing from this been much I our would that will Yes, perspective. extremely their the to task and amazing sales, would tell more were we a have which performed I an I -- of team integrated And able our our you well team really a quarters able product of from that team as is integrated sales innovation, ops, PROS tell cloud PROS a being

very our about are of and merchandise shopping So, it's tell a really overall, you pleased performing overall market response, excited capabilities. we're how the would and with customers lot the I

Matthew Van Vliet

that your is privacy the And GDPR there you look mix and of geography? migrations the in now? as different in issues for than or Is with towards other of pipeline right then any terms far overall much that's business there XXXX, so issue standards you've a sort of done the in EU what's

Andres Reiner

Yes, that's great question. a

our the serve overall, I from that option So, a you, several and data you them laying regions. we of can ensure we've across EMEA placing seen would anything, thought centers are would part and over all Europe, talked to maybe world to customers local from those beginning of we've our GDPR for adopt in prepared last us has our their tell and we've the working all foundation zones. the been a we very we tell where haven't all technologies the GDPR. good lag, We've lag. of world about that, XX Asia-Pac of seen very now years rest seen to a Europe to cost world, would around Americas. If wanted been rest And we -- in And Americas on I

Matthew Van Vliet

guys in of And products product out have accounting you engrained that that's sell AI-based right Where are it their really the With huge CPQ certainly market integrations, then a have or AI, differentiate last for out as do the machine that on are you of in but sort now. of you're newer aspect history? buzz How there able of and don't relative coming talking while capabilities the stand question. a about some of the products, capabilities the lot to and learning lifecycle maybe the to some in you to and overall have are partnership a overall product? that much Smart side

Andres Reiner

say years Yes, I ahead. we're light would

I think it's not even close.

a proof companies money customers very machine making actually about points I from actually talking AI lot have think it. that there's learning. few of of There's

way innovative us. think actually really We always many and I way area is organization predictions an what that results. you And can to for that special. true a tell of produce have we've these areas decisions they're many real-time, that's in natural a really PROS we've different an I that that reliable drive our creating for in problem mission-critical would decades it innovating you part they of in across part industries, It's that's differentiation makes been and ahead. that's a algorithms over that's -- area phenomenal and And decades science different

that's opportunity anytime machine compete and learning, So, I on think great us. for can we AI a

Matthew Van Vliet

Great. Thank you.

Andres Reiner

Thank you.

Operator

from from And Joe question Instructions] Please go is ahead. Fadgen [Operator next our Craig-Hallum.

Joe Fadgen

we cash that burned here. business, QX, more QX, profit you QX stronger then a cash probably throughout -- And million question. improving think little and in On calls Should than probably QX? cash guys. that I nice subscription QX little have going that here talked a XX margin burn Hey bit as like call Thanks million to burn XXXX? gross you looks here I the or more probably taking burn, rest But for free gross to for in Chad. bump the then in the there's over $X kind you less of I mean had maybe a in do -- of and low QX of given approach as then QX a Stefan. soon On QX a for steeper QX year, was it or you this it more and is couple in effectively breakeven, and think year. bit be and is for flow me mid-XXs the likely for $X to on a previous expect you the you're the how that A breakeven line mean

Stefan Schulz

in let so order me you go I'll go question. -- Yes, asked that

in So, first in even to to we burn, guidance of $X $X QX. million expect a so in all, flow. and million burn free burn QX slight Yes, of yes, cash do cash our

kind we said cash mark an to a of half, no -- generating you less where seasonality we to be I a be will right generator about way able in we'll in spend that us thinking the consistently more So, be in see better should the less spin really net that of are certain withstand in tell our patterns of do suspect now. collect patterns it two-half than first that second And causing you become than of spin we the move of and us cash. my a Because net burn And one prepared more I in as half, it's it. in will half quarters. would we'll And cash much flow. this in issue and are seasonality more as be And remarks, year. beyond of I some

next in from gross and at basis the go we you're we for landed XX% and we some we subscription line, the to gross landed yes, did subscription relates do yes, in of you then it in the revenue neighborhood. increase talked the our look a increase subscription in where subscription that from about -- did year. in our you And that points your year your range you right, the I thinking earlier point, a somewhere of XXX drive line year to perspective. tell gross a And in lives margins, the second have item, nice As that will would think in margin terms year for increase that somewhere see of nice quarter us revenue because our margins the for the if about we total perspective, around question subscription line

see should that as quarter subscription to the been continue previous on in into XXs us getting line low highlighting we this You gross improvements we've and make the the margin quarters.

Joe Fadgen

now. will guys. be Okay. That all Thanks for

Stefan Schulz

you. Thank

Andres Reiner

Thank you.

Operator

back the closing turn for the management to session. question-and-answer concludes This you. any Thank over comments. I'd like floor to

Andres Reiner

your great moment like outperform. call. our participation Thank would business. thank again, continue to we we're and Once XXXX our in commitment with in come PROS to their growth and scale to drive helping that for We you to team confident incredible for today's our I customers will

would Now, customers, like your thank continued I and also support. partners, shareholders our for to

Conference, you good and Finally, be will I'd you like which XXth our in XXth bye. invite Annual through Thank on to Texas. Houston, held Outperform May the to

Operator

participation. Thank teleconference. today's concludes you your for This

You may disconnect time. lines at your this

PROS (PRO) 6 Feb 182017 Q4 Earnings call transcript