PRO - Earnings call transcript Q1 2022

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Operator

Greetings. Welcome to the PROS Holding First Quarter 2022 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. to of conference Investor like Belinda over now Director Overdeput, Relations. would turn call the to I Please begin.

Belinda Overdeput

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

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

materially Reiner, Our will available. call which transcript commentary includes available Please questions once will limitation also forecast. and our Chief on that future opportunities, following results Financial Officer. from today’s website immediately note our differ President financial official prepared call about by and Officer; Andres forward-looking some business Schulz, the without me such of Executive including statements remarks our With the and is on the market Actual and will today and statements, be and prospects, our strategy, be include Chief projections. replaced participant Stefan those could

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

available available press during over unreasonable a turn to to discuss between Reconciliations the metrics. GAAP and we to call directly non-GAAP call, release. measure, extent With which As that, non-GAAP each the are measure earnings will effort most the in the reminder, our comparable without I’ll you, Andres.

Andres Reiner

We travel. performance start XXXX. joining saw today’s call. total We both on to us I in and by subscription Belinda. you, for XX% X% with and afternoon, year-over-year. BXB Good our pleased you Thank and revenue revenue strong year-over-year strong thank everyone, am by grew

is doubled by fact in count quarter. Our in our are the that the we SAS executing editions our resonating platform than team the PROS deal first year-over-year more market evidenced well, on and

powered need the more omnichannel through selling. XXXX. accelerated models XX% for journey regularly up engaged throughout with sellers before. sales the they or effective businesses sales that respondents say AI is model that market of We to five designed omnichannel our The buyers our more effect BXB as accelerate expanded channels new And platform ever testing decision the embrace ability the strategies we’re from In or in market platform to to changing bring to optimization in of customers And empower in different which to the continuing capabilities analyze our selling. we scenario QX an end an these This to right shift digital market. requests innovations We Our parallel. and increased personalized the test gives at omnichannel to to ever thrive of solution look than makers buyers single value in with is the tailwind PROS is to at channels. and Recent market to price this ever, inflationary market speed business offer businesses market in for resulted relevant to our also with. ability due improved we’re calculates to to proposition Survey end choose any need as macro decision McKinsey XXXX. right of exactly an businesses platform customer delivers to in that how channel shows pressures, offers confidence trends. increasing increase us the help pandemic volatility the BXB much has from outlook the benefiting engage believe the a manage to the they revenue has just showed than results in today’s XX More respond and businesses to release used effective

across their margin, channels. evaluate Now to to cost ever for outcome it’s or all drive the for optimize those business best customers models sales their than that easier dynamically like revenue

capacity one and several remain the top oil we five of welcome of the while cost our Wihuri leverage world. and in see majors in the of new use energy driving space, accelerate continued were capabilities to In up over the Global board more space, customer can customers international powered QX, on positive while manufacturing In international A In innovation packaging better The In on we and two face improved their factors to to manufacturing an food sky demand life travel, manufacturer to is also markets. year-over-year. metrics changing negotiations we driving market trends These leadership year-over-year examples global XX% space. we of Our in sentiment. the planes passenger will QX. distributor than pricing recovering price in as welcome Abcam load execute sciences the see the growth. passengers pleased CPQ strong Group. volatility. businesses are space, continue some leading an help amazing in ago. the great equipment agile AI including we’re XX% recovering agreements led year Brunswick to is wins our experience. in ever up and while profitable Wihuri the revenue Brunswick leading a with over they time marine has platform airline thrive so also a a demand environment the more of Abcam, the are changes customer and a chemicals in real international indicate

travel of Lufthansa In is our in to latest PROS migration the innovations airlines optimize Our travel demand on business This are that the of continue we operations, the ability for a of market we solutions Group focused look to to across the the and management whole consolidates pandemic acceleration airlines ahead advantage helping migrations the migrate results Group with strong take example during revenue driving our latest superior off. customers to are them time paying had Lufthansa onto revenue give innovation forecasts all within the revenue network chose conversations QX, their resonating investments quarter it’s are as long the power who the group. One platform. management. of opportunity make in clear our will for seven

of them look years. to been their to with XX forward have with Lufthansa continue phase proud We to We’re over partner in innovation journey. next this a partner for on

investing to for through passengers entices seeing mission growing to technology and with into digital In solutions driving such on and continue through as We’re relevant PLAY as workflows for helping expand of partnerships user they drive pleased of demand drive flights. as higher on I’m airlines marketing Accepting I’m shop digital solution them airlines or their such among Intuitive marketing our as customers welcome sales. channels. PROS. FlyPOP we our QX, our booking offer adopted to to people customer also expanding we offers fares, and a companies incredibly adopt also outperform. saw digital customers also pulling experience all and demand new solutions, their more existing conversion presented digital see our new marketing our others, customers partnerships their offer deliver to PROS. pleased to [Indiscernible] offer

selling Before of want to I shopping optimizing like dedication With every call continued our to our partners at and the Thank to I performance and to to your our outlook. incredible financial thank team Stefan turn over support close, passion for I’d customers, and vision that, the you their around for experience. PROS. cover world shareholders to

Stefan Schulz

afternoon, everyone. Andreas and good you, Thank

strong The was for us. quarter first a quarter

environment COVID. the see of improve years two to after beginning We’re

organization markets. We look saw areas to in concerns and continuing these discussed in improvements today. our more we are improve call, their communication, improvement consistency. Also, during we as and address see the our and to accountability PROS driving inflation price go-to-market immediate last rapid our as to Additionally, companies these in opportunities we’re go-to-market changes flattened teams to

million, Now, $XX.X year-over-year highlighting our X% up first and was exceeding ranges. quarter the both quarter revenue up million, first total in guidance revenue XX% results. Subscription was $XX.X year-over-year

retention doesn’t improvement very first in which retention our both rates retention Non-GAAP gross the to continue Improving bookings of from and revenue of XX% gross margins in Our first to primary quarter was combines rates, margins see year the XX% customer year team to and this XX%. subscription quarter We above our focus subscription quarter the recurring margin revenue. made the maintenance first quarter. I’m also for recurring for progress was revenue XXXX the the ago which XX% revenue new a disclosed been were margins retention obfuscate rates our Also continued total in has pleased customers. gross XX% with and recurring quarter. our a during subscription existing with improving remaining of trend

customers revenue to continues the high rate solutions. demonstrate retention our from our receive value Our

improving As expectations first existed expectations with keeps and flow on investments. million year-over-year. in loss with quarter cash the our EBITDA as with looking of our on line and track our to and Free adjusted free X% $XXX.X year. in well quarter EBITDA which $X.X our for recurring improvement results the million burn was cash are a pleased with gross and in quarter the was million, with cash us progress We make first margins, flow was $XX.X beating guidance Adjusted we’re quarter. the this first

Our non-GAAP was share, $X.XX per loss share per guidance. also which exceeded

increased year-over-year quarter. with consistent expectations. ended calculated XX% and in quarter trailing which strength was for our the Our XX personnel the first XX% demonstrates XX again saw quarter months, which We with we quota-carrying the billings the

We the upper the continue to project XXs of year. to the by quota-carrying in personnel mid end

Ukraine. Before we to get situation want I to our address second the devastating quarter in targets,

of being continue disruption the and is we primary such Ukraine there’s no do concern particularly of situation, to countries operations. employees been The effects Bulgaria to our our possibility or the as teams. well spillover adjacent monitor have into where to We a near to-date

customers in the region to our contribute X% see total point, the impact year results. less minimal few Additionally, of we year. which we a revenue full this At have than for our

guidance. Now to turning

the representing growth. to year-over-year range million expect quarter to We XX% $XX.XX in second revenue million be $XX.XX subscription of

million. million quarter expect between of $XX adjusted second million And expect total the $XX $X be $X in loss we quarter be EBITDA and to to million. We revenue to second range

quarter. EBITDA Now the point expense this year, we and Using able estimated rate the debt our all per deferred an $X.XX share last of the onset from loss we of XX.X is Accordingly, million second were range an we per onetime on year. last share based anticipate to outstanding. quarter XX% payments year, benefit second higher tax collect the in year implies during this between estimated non-GAAP a our the from reduced of At heavily non-GAAP impacted which a quarter second during we virtually bad $X.XX of COVID. expense adjusted result last customers last experienced loss shares of

subscription the expects $XXX of our range of million. For and million revenue to million be raising million guidance to the revenue full we $XXX.X to the in revenue in be $XXX total to year, range $XXX.X are in

year adjusted maintaining We’re full free guidance cash flow. for EBITDA our and

rest competitive have we continue increased companies for expect year. to remain the our market in that this many our in the As current to people done, investment we of environment. also And

support. Our growth and to and closing, customers amazing I would critical as their In team is company. employees a to our success and continued for like our thank passion

continued look your now for you questions. support at thank call upcoming I we events. also speaking our with PROS to operator you for to the back We over at and forward will Operator? the turn

Operator

this we session. Please Berg At answer you. a with Instructions] question and Scott proceed. Our will is be conducting from Thank first time, & Company. question Needham [Operator

Scott Berg

I and the you curve them. there. think or But we ways Migrations kind to environment Stefan of through bit we maybe little on yourself early. before complete taking Stefan see in the halfway my noted we start really congrats let’s some I it’s certainly sales all the a there? segment? of that space. Can you. the Where are sentiment get do travel from there’s of thanks a tunnel? a realize for and Thank normalized sentiment products. in results you away on with Hi light and that improvements Either road? we couple end Andreas, think a the Andres at the Or or of questions. demand the normalizing interested guess several are bookings

Andres Reiner

Scott. Yes Great question.

that see areas So the seeing they tell frankly during tell need. a COVID and at that tunnel the is from are in and good we will and the about travel growth light you, very resonating what we from executed I end vetted definitely revenue first quarter. see are feel the time really airlines how well innovating great that hearing And the areas we’re travel areas I of in the will they in opportunity you ahead

So FY good overall, QX bit stronger I feel frankly, was, a than very expected. we

Scott Berg

for other, are the one obviously e-commerce, the up that of the half over looking channels. a or business we’ll demand of two to last picking side, bit it And quarter new an customers more increase digitally on revenue is platforms, Excellent. the little call things new and we’ve in today, the looking ways sell at through been then infrastructure in as

omnichannel an channels the specifically the you about through e-commerce demand as been side most some customers talked there. of have sales most the functionality certainly innovation of of and You around seeing in historical particular? late? some sales using upswing But still is BXB on your of for are Or

Andres Reiner

be to we’re Yes. price today, multi teams understand Definitely an really I also profitability looking they to time drive to our are has that and how uptick speed changes in you And companies wanting mass short tell a area. important to channel amount able ability very seeing to The seeing of for portfolio omnichannel very their price of a how market. able impacting the we’re been and companies and be costs in their will their experiences. drive

time in or they’re able it’s real year and price mass that think is a we’ve doing to serve once across I where change customers critical. able be two do and some companies our weeks from change twice a year now of technology having to may to moved have when to to channels critical be then done all mass a been price every

we’re So both. seeing

Scott Berg

all Thanks taking That’s the Great. questions. have. for I

Operator

question [Indiscernible] from next proceed. Our with is Please Stifel.

Unidentified Analyst

Hi, guys, Ozma Max on for Parker. it’s

think and ever. improving? Is macroeconomic and maybe me correct First, if full number I the I’m a the XQ should indication environment that to maybe about want RPO think on I year? we I that the the it’s of in highest, consider saw impact presentation wrong, the And how just

Stefan Schulz

strength Max Parker, answered He numbers good Andres your Yes, show sorry, I RPO the his is observation in am the Yes. about questions. I this talked think I do quarter prepared in mean, definitely remarks. just part. the for on this Stefan. that

So by XX like us business. we as a short the total, And benefiting that’s see piece see mostly course improving on not in obviously, we news just you the RPO see feel you’ll metric it months, you see I for going in our term next RPO but we also only sides, good but improving the well and think what beyond total see of both that’s metric the subscription XXXX. driven forward of obviously,

Unidentified Analyst

of you’ve competitive Got well different you look kind navigated last all about other airlines to look you providers and than provider more how seeing of in navigated it, then and terms environment it? airline and yourself? continue competitors thinking have years. guys how revenue management of What better the as over the are for on in Are you two events the digital a position for like these options based

Andres Reiner

Yes.

If you now their demand of travel the allow of digital also they future best revenue technology, channels the a that amount kind better and innovation with only demand power experience. of airlines that really to able look we’ve now have and EveryMundo acquisition done of drive coming digital be drive fair our at the to in marketing, but we retail the management customer back, not digital more and is to ensure can

we group, receptivity would all or significantly areas the are whether board, portfolio QX our And solutions. on management So to capabilities marketing of or the results in fare competition. or I across shows I the the you look strong dynamic our think revenue say passenger at pricing ahead

Unidentified Analyst

it it. the on That’s Got for helpful. really me. quarter. That’s Congrats

Operator

KeyBanc comes [Operator Celino Instructions] Jason from And our Capital Please Markets. question next with proceed.

Jason Celino

Andres, Hey, hey Great. Stefan.

to encouraging really from double hear does new I’m a the look count standpoint? the expansion quarter. in versus little that deal customer mix curious like So a how

Andres Reiner

new that’s And mix mix somewhere a XX% where see XX existing standard pretty us. Yes, XX/XX, be, for I a say is really new, is that to for XX actually like We to which would we really about existing, great to trended. good want and It’s question. XX/XX XX Jason. us. good that in

Jason Celino

sales as sight How one expected. feeling of going? you reps XX line I the then the of in capacity, you about productivity, quarter are think question And end and are the mentioned year on to perfect. Okay, how those

Andres Reiner

year. amazing I the for with will team I the reps And what have now. team that can you I results we have, tell is have, deliver feel Yes, feel the right we the we we

you to really year, focused year. if very on focused continuing to we’re So expand. add at we’re look going this It’s on next which what

So a I good in really feel like now. place we’re

well frankly, we in personnel back geographies half of really add that very and XXXX. the BXB really help to support to both across across travel think a quota-carrying executed coming and as have continue strong and We team them

Operator

and turn we end and Ladies for the you. to reach the I the answer call to have gentlemen to question Thank like Belinda Overdeput of remarks. session. back closing

Belinda Overdeput

Thank to today’s forward you listening you events this and at We for to conferences quarter. call. look speaking with

The June Software Institutional XXXX conference May Services conference and the the the Global June Morgan Craig on conference on Media X, Tech on attending be conference the June on will XX. Technology We Cross Baird Media and and and X, on Consumer X. Jefferies Hallum X, conference Needham conference Technology May Investor Sector Stifel June on JP the XX.

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

Operator

This conference. concludes today’s

your Thank for disconnect participation. your time. Have a day. you may You great lines at this very much

PROS (PRO) 3 May 222022 Q1 Earnings call transcript