PROS Q1 2025: Navigating Contradictions in Travel Momentum, Subscription Growth, and AI Integration

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Strong Financial Performance:
- PROS Holdings reported trailing 12-month recurring calculated billings growth of 14% year-over-year, marking their strongest performance in the metric in 10 quarters.
- The growth was driven by industry recognition of PROS as a market leader, ongoing market volatility, and accelerating adoption of AI-powered pricing and selling solutions.

Subscriber Revenue Expansion:
- Subscription revenue increased to $70.8 million, up 10% year-over-year, with total revenue reaching $86.3 million, up 7% year-over-year.
- The growth was attributed to improved bookings linearity, reduced sales cycle times, and successful product innovations.

Improved Gross and Earnings Margins:
- The non-GAAP subscription gross margin improved to 81%, a 160 basis points year-over-year increase, and adjusted EBITDA was $8.7 million, a 90% improvement over last year.
- These improvements resulted from operational efficiencies, including reduced cloud computing redundancies and increased use of AI in services.

Free Cash Flow and Cash Position Strengthening:
- PROS achieved positive free cash flow of $1.1 million in the quarter, a $6 million improvement year-over-year, and exited the quarter with $170 million in cash and investments.
- This was due to better-than-expected execution in go-to-market functions and product team innovations.