PRO - Earnings call transcript Q4 2019

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Operator

Greetings and welcome to the PROS Holdings, Full Year and Fourth Quarter 2019 Earnings 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.

I would now like to turn the conference call over to your host, Shannon Tatz, Vice President of Investor Relations.

Shannon Tatz

operator. you, Thank and everyone, for us. joining Good thank afternoon, you

filings replay on of Our at Investor earnings call a SEC release, pros.com. website our found press today’s and can section of Relations the be

is call Stefan and Financial today’s on Chief me Andres President Executive Schulz, and Reiner, Officer. Officer; Chief With

materially include results and our such Please business strategy from will commentary prospects note could our without current including and the of statements that opportunity financial future Actual projections. limitation differ some market our and today forward-looking those statements about forecast.

our the reflect For to assumes filings. please circumstances. update refer more obligation events future information, risk to factors no to described in SEC any or statements forward-looking PROS

the during will measures Reconciliations As GAAP non-GAAP release. without a to the we call extent the press effort our reminder, earnings directly in most are available available comparable measures discuss and unreasonable metrics. between non-GAAP

With to you, that, Andres. the over I’ll call turn

Andres Reiner

and us afternoon joining thank good for Shannon, you, everyone Thank you call. today's on

on CAGR proud by XX% reflect I'm years. revenue achieved XX% a I incredibly also the subscription we've revenue past subscription of accomplished. year four grew and XXXX, As for Last we what

we've our At this strong are grow the to incredible people together. at and of culture rate sustained core and our that created ability

by I'd and team. strategy. I'll to bit market transitioning sharing cover adoption to So like more start XXXX our innovation little a about our highlights before

record-low we day as record to care the team and of humbled team. innovators a had as and our Every company. had year talented customers, other. attrition about and dedicated number I watching owners, honor tremendously cloud are people Our a our promotions with I'm Last such and thrive employee communities each of work passionate, their

intentional our to full grow, continue realize to As their want we in supporting be potential. people we

the Rice a into XXX program the to deeper had of company. of our This and at leadership One us their scale alignment providing team our leaders and way partnership people opportunity is Jones the School helping growth accomplishing to global by skills our in Business increase In development Graduate XXXX, lead University. program with values. future this leaders, strategy our is our we're strengthen dive leadership of over and positioning and

us. is culture a of important learning to incredibly Fostering

So continue development and can so in in our we and widely to invest people plan to learning we XXXX be successful. help beyond,

to As People continuing Nikki Chief we to our focus global on we champion our and share promoted excited I'm people culture, lead that strategy to people Brewer as Officer.

leading Nikki brand to been and thrilled our in joined support program. to role. new continue our shaping to develop grow, in I'm have has our instrumental her XXXX PROS in total efforts rewards employer and her team and

features of to innovation XXX An was highlights excellent releases example Now our innovation to XXX last and in our launch more over CPQ. of year. drive DNA. Smart the more next-generation Last help I'll Innovation of the year share our transition some our customers is product our from than new team delivered platform even our in value.

that our buying designed This so customers deliver tens times. response handle customers In enterprise deliver solution of help thousands even our this experience. massive items we with solution with of an can quotes was to line better subsecond scale next-generation

CPQ buying customer who ancillary Airbus some industry-leading speed frictionless new precision. on our services One to solution to the and planet helping markets. companies enable experience the to last capabilities their the division This with well-known partnered most to manufacturing with in fast of is capability lead thousands their of build quarter of options PROS these digital is and and selected provide Smart take helicopters helicopter across Airbus. needed advantage configure new

digital to personalize sales for their deliver solution to was customers ultimately our select a help high-value, PROS winning ability and decision technical their Key highly a sellers to experience. Airbus'

value realize X.X with cloud, Our grow innovations to transactions year is trillion are processed business which which Last extend in our like is than reach. we helping our more approximately our us solutions, XX% year-over-year. leading increase our and customers Airbus a

delivered power Smart our CPQ. created success of companies quotes over transformations. And we're customers to price e-commerce. We truly outcome also digital one growth, million XX calculations our real-time having their the in This over explosive an billion with is selling through and leading

customer of customers' a on seeing adoption platform. our strong We're growth both existing expansions new and

So how to we're with customers. I'd of just two working examples share like together our

experience, chose real-time to solution travel for delivering move demand patterns latest prices on more best-in-class our next-generation deliver the accurately customer more to they and across a quarter, to to innovations. a Emirates, Last than our AI channels. Emirates plan years leverage adopt reputation cloud to a predict management and built PROS XX has revenue customer

for of a record migration quarters XXXX. that share innovations beat migrations also inspired is latest were cloud. many target our one to and drove by Emirates, to customers the pleased And move to total that our I'm QX, we in

family. Last to PROS new customers year, many welcomed the we

a us that of to partner last customer Another industry-leading their and is their quarter example customers an Core delivering experience. obsessing customer with Group. Foods Harbor about new is strategy chose to

With differentiate to our with industry. further prices as to look to by AI-powered disrupt personalized excited solutions they offers. and their customers' and them expectations delivering partner further exceed foodservice their We're team plans their

people delivering that business. committed of in to companies the having This on great mission selling outperform on companies impact we're customers' examples year, transformations. are we by These and helping their our leading remain digital our of

and adoption to focusing pillars: delivering incredible expansions, leading on to helping accelerating this AI our four market an strategic customer plan experience, and innovation, accomplish by and customer learn We grow. people

AI In our market focused areas. even sharing plans on these our a by innovations I'll few faster. bringing we're to XXXX, in of each of close

onto benefit innovating frequent our ways and continuously to is pricing that customers algorithms more platform industry-leading release Our latest their on towards updates team selling even can AI. so our from

amazing sharing market brand be awareness. story on customers' successes. bolder our want our adoption expansions, our We customer we're To accelerate telling focused and increasing to in and

delivering adoption. to best-in-class drive base, our customer grow global a on we experience and As we're help focused exceptional customer consistent

of get value to Allessio, leadership Officer, Customer John even help more global faster. a our practices customers the to Chief team our we're creating prescriptive us be Under and

to to foster continue and people with our extending help Finally, our collaboration. global support we'll thrive. to We're also development our leading-edge initiatives learning people technology

We realizing entered We're being our by about deliver record plan our vision passionate this our powering and excited economy. to year strategy opportunity AI of our in and year another digital in further platform the is to executing commerce the XXXX. market

PROS and for customers, your Thank an team our for you PROS. and of our you making shareholders place, partners thank to to incredible global support

turn Stefan With to call that, the and financial cover over to like performance to outlook. I'd

Stefan Schulz

a over to total increase our of of helped the which in another The XX% $XXX migrations strong strong quarter strength mentioned, over revenue XX% our million contributed growth team revenue total last with as year. year. quarter, And Thank you, Andres. year, We delivered our record delivered fourth also last for Andres eclipse quarter performance. a revenue representing us

Before reporting teams transitioning Controller Accounting to corporate performance, team. over has Officer. into will our Cook Scott and revenue have our XX to financial leading PROS I'm years well fourth as been we accounting share and for Chief as our as pleased that with continue quarter our Corporate global serve promoted Scott to

and rates our total revenue XX% fourth growth year Now results, Recurring over to XX% quarter. in subscription growth our revenue and moving revenue the last of fourth of revenue respectively. total services with quarter our drove XX% revenue represented

the deferred end our the quarter, the And trailing at of and also third portion recurring over last up year up of in XX-month recurring was XX% our revenue $XXX growth improvement billings rate the we XX%, a anticipated. XX% over million higher calculated than significant year. were slightly The sequentially

$XXX.X million basis, Our currency XXXX up was annual on ARR a or year-over-year. recurring XX% revenue constant

from a increase Our ARR benefit strong customer churn. in bookings portion XXXX, this but benefited of offset was in performance by small a

renewal dollar have offset a rates gross gross on we with basis churn method, churn means or experienced not this upsell in track the mid-XXs. historically we activities. which We cross-sell Using do gross

see revenue points. to did rate retention over of rate gross percentage we growth ARR XXXX, In a impacted declined XX% our which couple our by slightly just

best-in-class. the revenue be our which forward we rates we believe that still to retention XX% will Going believe range gross in are XX%

to on moving profitability. Now,

improved subscription point year-over-year in a year efficiency gross six XX%, full non-GAAP our as to continued Our building our XXXX. margins during engineering team improvement percentage products

using XX% in while processed compute we incremental resources. more transactions example, the year, For less

gaining in to global grow. our as infrastructure business leverage continues our We are also

Our strong recurring achieve us long-term gross gross to our margins subscription margin helped target.

to Our full year services margins declined XXXX. due the non-GAAP in lower second total of half year-over-year slightly gross margins

quarter. Our gross fourth services margins were our for expectations the below

in While lessening of level utilized the consistency use with maintain quarter, in to partners fourth order a the we customer at anticipated deliveries. than third-party higher resources

to We improve to expect to high single-digit in services our the margins XXXX. mid rates

EBITDA Our was larger the fourth loss than services million. $X.X Cost EBITDA adjusted driver this for primary adjusted was loss. quarter expected of

year-over-year. was Our million, full EBITDA loss $X.X improvement $XX.X a representing million year

just flow year cash million cash a free $XXX,XXX. under free quarter burn flow fourth Our $XX in resulted of which full was

of a From we balance year ended the sheet $XXX.X investments perspective, balance million. and a with cash

In to business Overall, revenue addition well-positioned XXXX. are over are up continue our XX% we which our XXXX. deferred was continued we that in financial we to grow with position and $XXX.X pleased to total build believe results to our million,

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

of quarter $XX.X first driven up by revenue midpoint, range $XX the subscription revenue. in XX% to year-over-year in at total the million expect We strong to be the largely million,

XX% to million We of up range million, in the midpoint. the be revenue $XX.X expect $XX subscription to at year-over-year

range EBITDA an of for anticipate in basic with quarter million first first share loss shares adjusted We we quarter, non-GAAP the $XX.X non-GAAP on based expect XX.X $X.XX the to $XX rate the $X.XX an loss per estimated between outstanding. million and in and estimated to tax be of XX% million our a

EBITDA last are be taxes lower our Our lower pay expenses the kickoff on sequentially estimate taxes causing quarter and as throughout lower reliance and first in our resources anticipate on This EBITDA first to our combined to activities. than improve our we higher future year. is to higher payroll cost, quarter quarters. services projects trend, year partner We with company payroll typically due much

$XXX.X the for midpoint, for XX% XXXX million revenue year XXXX over by to we a the estimate now $XXX.X between full at And million, increase subscription growth. primarily and total guidance, be driven revenue

grow services a expect anticipate than approximately XXXX in of growth but we rate rate to services lower XX%. at XXXX and a revenue We

$XXX full $XXX of rate XXXX million We million, over expect representing XX% midpoint. subscription to a growth revenue be the at for the year and between

to continue rate we decline in cloud revenues. move expect We and more the maintenance our revenue to our drive XXs customers low the as subscription to

representing ARR of XX% be million and rate We also expect growth XX%. $XXX $XXX between to million, to a

in rate Our increase ARR support XXXX XXXX. is personnel to quota-carrying XX% beyond. business for this in to for approximately And by to growth growth are planning and we expected our new increase

the for website. out new have We quota-carrying business broken business our metrics in personnel on our sheet

QX that and spend is seasonally to flow we for to $X expect bonus free Please and taxes, in in between moving burn cash profitability, payroll on Now, to million payments, mind highest XXXX. due our annual events. $X quarter keep million company

substantially rates year. expect flow commission past to higher to free due rest improved bonus flows years, the from as our burn cash the the cash of XXXX the resulting in quarter outperformance. in anticipate free higher We year-over-year But we and be throughout payout first

And of midpoint. finally, adjusted the million, we which slight anticipate at $XX.X a represents loss year-over-year to million $XX.X XXXX improvement EBITDA a

heightened XXXX. As the of started the with move two we quarters XXXX, that we in we business, in into of last investments are our to continue expecting level

result ARR growth this a improvement are our we anticipating of As year. to these an investments, rate

thank with our our to comments them our helping and about on performance. people, echo year. companies last incredible full are and of global Andres's very outperform quarter I pleased mission year delivering for team would we and Overall, like fourth

we review social our and team to our website. to accelerated our XXXX, deliver growth To available strong well are invite and more on corporate positioned responsibility learn efforts, in their you culture, XXXX. report, is to which I inaugural about Thanks a our

our we achieve creating well shareholders. long-term And enter to we and goals. confident We to for that remain are customers our XXXX growth committed positioned incredibly value

are you PROS. your support look for to this events grateful in we at We quarter. seeing our And of forward

that, With questions, back call let me Operator? for to the operator turn the

Operator

comes from with the of of you. proceed question Stifel. Roderick [Operator Please your Our question. Instructions] Tom first line Thank

Tom Roderick

for Thanks afternoon. my Yeah. Hi Good questions. taking everybody.

just of through little going with here bear Andres, on kind bit start me just So, you. me let with And the a quarter.

trailing some But subscription successes right. some to and in terms of sort revenues, cross-currents certainly the the of great bookings, bookings, the pointing calculated deferred everything's XX-month the up

cash of next are metrics little some lighter you're acceleration. got year, than looking you And Maybe not a what into showing the kind necessarily flows are we modeling. of

stories the with of bases exception like are the it perhaps slower. So on a track some moving installed feels the largely little of

bit give airline, business I think you about to there's us you as break on BXB. lever, a the was which about. is, whether opportunity But business in which most that throwing hoping push little it's do feel what of installed like think more for of about you could pieces to an pushing do sense them. you us pieces at And business apart resources base, harder perhaps as And you the feel do strongly the a a services as

of of some some they Thanks. those through these cross-currents, Talk we metrics, impact the XXXX. how at and as look year

Andres Reiner

think Yeah. us. very a the I with We very, the and pleased a the Tom, year a with end ended and started QX last I'll year, was year quarter. for with start I ended was on how we record strong. at strong record quarter very full

strength area of of we we the I where proud team would in overall, extremely during strength solution saw, a that executed. CPQ particular the So I how would a our of saw a say say lot Areas lot year. we was

lot And with platform. multi-product our did in a at with not deals, CPQ, we but full so selling launching better general, just

that year, The of fourth was in strength in the other good half especially migrations. quarter area saw back we the including the

migrations And long-time. knew were huge a amazing We a them see XX-year for our having having was a solutions for And to migration an adopt to -- cloud success latest-generation RM relationship, the important huge us we a continue Emirates' customer win. is part.

So results. the couldn't I overall, with more you be would tell pleased I

the we guidance say hasn't philosophy would into As and at changed. I guidance year look going our

year. guide tend I think And similar in we early it's a in still always way. the to

used we look the year go back guided, last you and If philosophy. same at we how

have at view overall on guidance over do And based we're next the quarters. few we what our looking making mean, that. I

What pipeline, our I faster. So tell the changing. is pipeline is from would not philosophy you a growing

year, ratios last are coverage Our better than this year.

we're bullish on about So, point pretty what I year. guiding the in would But say feel have we time. we this confidence based at

Tom Roderick

address in this is global Excellent, I'd it sure if airline didn't a way news I I too here. purchases. near to know early customers down. pandemic be the what impact have okay in thinking. term hot is I'm are guess wouldn't software travel topic a on pulse remiss, and probably With a I your And their

you've But will there of airline how your with Is a around sort this hey thing like time-to-time. says to enough long to history your any maybe What's react experience been customers from situation there's. see, that this?

expect quick Or A, little these to you bit kicks are on but back to pause impact? spending things themselves. a of resolve up? then And it pretty wouldn't see any

Andres Reiner

Yeah.

this SARS been look, incredible I've helping demand time. looking happened. I customers, as support impact a them is it's I was So airline pattern. long we I that decades do PROS And partnerships we at experience. from here tell they're saw when in would what to you as for changing revenue have when we their And it. see our minimize want

say, get being year, success we through time on So how look slower steer I major I to and little to wouldn't them we would we're being would That a -- travel more seen say that probably being a revenue trying over new tend we're for based bit I the overall understanding difficult customer haven't how to the a them, will close historically, us but It's on a revenue. side, support big than we case we this aggressive impact in opportunities. ramp expect impact. from on them. overly expect of supportive of them But guiding

Tom Roderick

Thank information the Thanks for Thank on you hear. for to good That’s quarter. for you. all – the Outstanding. the fourth detail. the

Andres Reiner

Thanks.

Operator

next Company. Our Berg proceed Needham your Please the from line Scott comes question of with of question. &

Josh Reilly

Congrats on on Josh This strong is guys. quarter. for the Hey Scott.

the on behind guys' Is your What's XXXX off forcing the on driver prior the part? a is Or it for shift? with our other this well strategy beginning visibility in assumption increase? maintenance any starting just better Or is So expectation. decline revenue above that. color

Stefan Schulz

Yeah.

Andres as more to we commented and saw with progression that Stefan, more -- particular XXXX. quarter expect into was this that become we see one we the our one go and of the type say and continue to And the Josh. So what And see even of with Emirates. is that started we fourth towards to strategy migration things successful case in I'd end on XXXX of

maintenance significant customers off And on our that our next-generation it's onto we legacy has as solutions revenue -- a impact the cloud products. migrate of

So perspective. beyond significant that's commented a really the rate seeing we've not big a It's really primarily on primarily change We're change already driver. primary retention what from the migrations. from coming

Josh Reilly

And at great. range. then ARR year low Okay, I the guidance for believe end of in the came the

more there And customers? to new it there Customer get something just a on Could we is think some make then doing the million in in there that? $XXX. will Officer area? be the uptick I is changes anything few was churn $XXX Is driving Or Chief broader that to there? color that that

Andres Reiner

Yeah, no.

think, And no being churn, tends say rate the cases. that did tell foremost in be extremely So is That legacy first I is acceptable. you customer success. use about churn and -- single best-in-class. case, see to look to I us platform where it And we would single-use churn would I we're passionate retained product the still XX.X%

That one we're that dedicated adoption, place we resources, dedicated can full is us. driving customer customer for for rate, expansion, and but all maintain I our so area more will well that we only success, that sure success our being we they're have in in not value concern as area so believe and which and help of customers John touch are organization, no that the ensure this ensure programs really XXX% way case, making focused

think expect be pretty with the executing, rates how we're and I in these XX%, mid-XXs range confident. to XX% we're a lot we of

Josh Reilly

Thanks great. Okay, guys.

Andres Reiner

Thank you.

Operator

Keybank of Capital line The from with of question. Please your next Markets. Celino comes proceed Jason question the

Jason Celino

new any breakout reflection reps. change focus? for Hey, market to kind on breakout or around, Is question. in a the taking One of my go quota-carrying guys, of, the thanks this

Andres Reiner

Yeah, to is more new and a no tell but would bookings not our on really sales What on direct focus a historically on we market focus. all go our you had I customer to success managers be one. focus success our delivery NPS our used organization used our on managers customer customer and renewals. That's be to remaining. and But customer one historically success

the last roles built pure. managers all in Over these migrating we of customer where we customer time XXX% success. their success a as Sawatzky year whole spend customer lead organization more Jill them to we're new making brought now And and in success,

were therefore, playing PS-oriented breakout bit pure to roles. We in reps new that a migrated giving you we're expect renewals. this And, more role success transparency year that a customer be CSM to business CDMs booking between all the and

that, The area perspective, that for we XX% a be is to which personnel, sales going we a an great growth to last we're force. we on can you place. need. the the handle the what is feel we very we're confident believe continue renewal a built had that the in year, in side bit team that little the sales new out to in about a improvements from sales giving which productivity below scale driving And as growth we're drive with area that We but team the quota-carrying new and visibility we

Jason Celino

more how that Great. the And workload. consulting on are adding one is -- help ramp going? then how mean, partners to update with SI I

Andres Reiner

Yeah.

up teams. talked EY -- working is I been So partners where would used and range. the very implementation an well involved SI to we percent partner our others be projects about that of we've the their in tell you XX% well with ramping

to that involved range, a expanding higher own the their XX% it's quite and ramp up. they're has projects is Now bit. where from increased of us the on to number starting separate Also so closer

well. opportunities ecosystem So as partner-sourced another good very was saw -- in we the the wins success well. an progress was that on partner and area partner-involved record of good year we see as number XXXX This

Jason Celino

back I'll in Thanks. go Great. queue.

Andres Reiner

Thanks. Great.

Operator

of proceed Please questions Robert come of question. RBC with the set line your Simmons Next of from Capital Markets.

Robert Simmons

rate? Hey, handle you there exactly accounted great. in for is the uplift, If Or taking Thanks my cloud that revenue how your wondering to do is I questions. how for migrations those? XXX%? considered retention was are

Stefan Schulz

a a how maintenance What Xx you our we've multiply base paying be like would for might as We've and speak. one a is that where would nature that to about paying old the to past it. on that the multiplier think expect depending the Robert Xx about -- base customer the a you representing to was was fits to can talked product call you subscription Xx the times the have depending to from so There's modeled from Xx we not as space about the forward. all on-prem that solution of paying that to take standpoint. that's they multiplier multiplier new multiplier and maintenance not customer different we the on the be average -- the it that the -- more migrations that in Xx and subscription Xx be But going ourselves get will because think migration, all the uptake of size

Robert Simmons

then accounts what that but account uplift -- I'm that due And Right. in wondering Is no? do is for you how or for XX%? that the

Andres Reiner

No.

Stefan Schulz

Oh.

the So churn. it relates to about no. as No, talking you're

Robert Simmons

Yes.

Stefan Schulz

Yes should renewal at or not rates the is all. that factored say. the renewal Yes, rates I into

a migration considered not a rates all. renewal churn affects part of or our at event is So

Robert Simmons

Got Thank it. you. Great.

Stefan Schulz

Yeah.

Operator

questions with Our come the Craig-Hallum. of of Please line proceed your Chad from of question. next Bennett set

Chad Bennett

taking questions. for Thanks my Great.

I you in think business-related new quota maybe growth Andres, front, sales on about XX% talked the So carriers.

think need of base? in year the from your -- different basis. XX% see to rep in the year standpoint If of of to on you productivity SaaS to a mind how from pretty that do performance this about person your... versus at XXXX and productivity expectations improved think a where kind under contribution is about the to you that dramatically revenue the new net your Or of get How mix revenue any you look SaaS should it this specifically we per growth per standpoint, rep just just a

Andres Reiner

a great that's No, question.

in that this can look And range, today, subscription we XX% mostly we achieve look to And increased achieved that back those XXXX. slightly really a going that help the the XX%, numbers. quota-carrying while you that at we you going it's our to guide we we it, personnel adding, growth year, have much if if we're bigger for think about for increase the in half at quota-carrying growth. -- the new the feel high way from with we of business So reps last subscription year, -- it's XX% help look at the XX% that but if by you

So focus overall, continued think that four-plus is ramping to I last one ensuring areas we're have productivity. of as the the also that up over we've reps improving that years we're

So XX% We're personnel we that thing little one that I XX%. ramp is a little it think enablement. be also different will the marketing more, aggressively caution up growing is investing quota-carrying may bit and pretty even but though during and of may -- up roughly year, in bit a

Part of in going out. focus for recognition I a brand getting bit us our about talked bolder the really

demand, that only made So we a in is an enablement our organization. this feel drive help area that to strategic to our ensure also drive And as team is to not and decisions and team a our improvement scale making marketing, we leadership more successful. going lot we're invest more but and training productivity branding help

Chad Bennett

again, color great. decline quarter is I appreciate if me you decline. remind we're into terms of the the talked the fourth about Stefan in the than maybe year low-XXs the for now thinking or one the more Okay, Stefan. And -- end of maintenance there. -- maybe heading so

or I SaaS -- so thought? our revenue up and rate in can revenue -- cloud terms I wouldn't wouldn't growth I XX% think XX% actually XX% so what there's we timing go get from previously we were where before roughly of maybe to

Stefan Schulz

Yes.

we've will So, well. where lot Chad, we of that in QX that's what program, more this -- team saw as migrations seen occur our a more in success sales as happens about focus and that and

for new. to example, we mix existing we end little saw that where new the and maybe talk of would about And XX% XX-XX bit, be XX-XX, towards be to would just business like, bookings saw is, say, last shift around XX% mix what year of So, a a bookings. existing we

continue. that We expect to see

going believe this a existing doing, to it we So, form rep think quite of be to lot We going would customers, on activity. activity in of existing is that going see also bit upsell to taken But still have the the way, a focused so sales migrations. the be now to migration. sales of cross-sell, been of new we're

it So, of think light, replace of that in existing to that a some type business. the going of it's

Andres Reiner

in let's that deal a thing add, for deal, And day of one. on that paying typical and is signed delay, is migration traditional start over a more ARR, new I a one x day will paying it starts already customers one top full migration, net say, there's on a Chad, difficult. where to is for and are something because other it amount tends for that on maintenance It's of slight subscription that that recognizing period,

on both short see term, great the long-term can sides. you So migration but, a obviously, for a slight delay success on revenue when do you

Chad Bennett

a maybe quick, if could it one, Actually, then fit last in. I And Andres. good point, that's real

the maybe tough performed year-over-year was question quarter, I it it's up significantly. three just but look, Just EMEA But a first following quarters, on prior -- growing well pretty EMEA. this of If on kind comp.

in what guess, just for come during for you I if that's at quarter? region EMEA, then, And talk generally that the expectations the did Thank this -- can are within changed you environment much. year? your demand you Just, maybe plan EMEA about what and

Andres Reiner

a question. that's No, great Yes.

continue EMEA, especially in QX in this looking of you, back at to EMEA, don't the see strong. the I And good of especially half, the as have in back visibility front year. the see momentum But to much year. out as half and early good at look ended strength as at continue of we would We year, the the we fairly tell half at So year we we EMEA. look

are back things from So, we which had in That I that were EMEA our the good I came remarks. and would half EMEA we two was far my look of QX, about Airbus Those to Helicopters win. at Prior we so EMEA, and one team's out yes, that for continue good. great say, about talked examples see as talked Henkel, are actually prepared talked very great on about of example. quarter, QX just QX wins. I performance

-- So

Chad Bennett

you. Thank

Andres Reiner

Thanks.

Operator

of set from of questions next Our line question. JPMorgan. with Please the of proceed come Jackson your Ader

Jackson Ader

Thanks. guys. questions Thanks for taking the

think Stefan. one, continued relative ARR looks we this actually should It for versus year widened growth? the delta about relationship First last to the that trailing XX-month's like How of couple of billings years. the number

Stefan Schulz

beginning very That's be we ARR, going you they're Yes. expect calculate even we're And increases taking changed the contract Jackson. but know, setting their it both to to when usage, different that customer we're and like, we scope. may it necessarily increases for the then -- it though, that in the same then because trying stone mainly as actually relationship contract, true. not and the to the forever as close, have they're counting about it get Yes, at number, ways, as ARR for thing, example, in its where,

So calculate there're we way the it's calculated, I way the it should some inherent flaws or say. in

calculated strong going growth we that billings, talked made then in we when And QX, had the to then, timing that challenges had we've in some like, a we similarly XX%. where be how knew disappointing in QX, the you knowing have on were past rate, for example, up

in truth the found the spent the course digging we right looking We over generally is lot of are differences is And what all into pointing the at quarter, the really the are. past time both of middle. direction. somewhere matter you answer of And a what those in of that this was, them

that is the high giving from a and for the utilizing, range think we're recurring very to a of two way, two of happening booking are ends really that perspective I range. what's XX% the us in growth It's right just revenue perspective. probably metrics consistent So terms in albeit, teens

Jackson Ader

Okay. quota-carrying personnel reps? missed if sense. guess, who just and a the just for is that non-new follow-up they I new responsible then, quick That net the are fall the business? it. makes a I business And Or migration to this quota-carrying so But would apologize new and -- for Is technically considered business, is migration? I those

Andres Reiner

the done That's reps. still by new business

handle is The only handle don't that they all So expansion. renewals. they areas

Jackson Ader

Yeah.

you. is had. That Okay. all I Thank

Andres Reiner

Great.

Operator

your with Securities. question. Joe Next JMP Goodwin set the of come of questions proceed of from line Please

Joe Goodwin

you question. so much for taking Thank Yes. my

side competitive Just just an a Can update one. quick business? on on dynamics CPQ the the give you of the us

Andres Reiner

Yes.

say solutions, the Smart performance our model anything, launch agreement and more would or agreements So in now the you're tens we talked market. of just not now our continue large we so well change. able CPQ I as perspective I thousands less those being capabilities quotes. supports when quoting a competitive create if where as that of strengthen to but spot of support long-term our into a We major to deals, no say agreement latest-generation long-term entering especially from about would enterprise

So I competitive differentiation. environment the would changes. we're from feel a an we major no large From driving more we perspective, say in feel enterprise

Joe Goodwin

you. Thank Great.

Operator

Securities. Tyler line with the Our comes Northland from final of Wood of question Please question. your proceed

Tyler Wood

to going migration. question. taking my the more One for back Thanks

is into it there QX. kind going You Was XXXX more mentioned spread seeing the emerging who's uptick in evenly the broadly patterns sooner who's base? they are migrating out? pretty And that wait vertical or to type there Or particular migrating in any going drove and versus of customer who's then any you're that? customer across

Andres Reiner

talked we in others year. yet. the several during And continue good that just that No, travel scenarios, say last migrated I real see we're would Korean we of the QX, on about Air them Emirates through year many in migrations seeing year. the we but not patterns both to and

year. BXB we also talked on about -- we We Airgas that Honeywell, others the migrated through and side the

that they're also they're But to geographies or use new seen products expand board is years have us new opportunities So as are we've been seeing of are with that across cases. seeing we're overall, like customers more regions the would in years new you've tell that whether and migrating overall, what migrating well what customers seen XX like -- be Emirates I some usually the when new that using some it some are to we're XX ours you last and is or migrating. recent

So no real specific segment, frankly.

Tyler Wood

year. on good right. All Thanks. the Congrats

Andres Reiner

Thank you.

Operator

the of like session. question-and-answer to Ladies would turn Tatz the the we I Shannon to back and call gentlemen, for end closing remarks. reached have

Shannon Tatz

We conferences you events speaking call. with listening look in Thank to the at you forward for today's and to quarter.

attending Francisco in San San well. March the Technology on Stanley be February Morgan in the TMT will JMP Francisco on X as Securities conference Conference XX and We

and February XX be XX. also with on York will We in Keybank Boston and marketing New

have today's and at you following please Thank call you If any ir@pros.com. questions goodbye. contact us

PROS (PRO) 7 Feb 202019 Q4 Earnings call transcript