- **Q2 Growth Surpasses Expectations**: Subscription revenue +12%, total revenue +8%, EBITDA +42% YoY. New customers and partnerships drive momentum.
- **AI Agents in Pilot Phase**: 12 agents launched, targeting B2B and travel use cases. Q3 customer testing to accelerate adoption.
- **Travel Segment Expansion**: Airlines shifting to offer management platforms, driving PROS wins (e.g., Scoot, American Airlines).
- **Financial Strength**: Free cash flow $3.2M (vs. -$2.8M YoY), debt reduced by 12%. Full-year guidance raised for ARR, revenue, and EBITDA.
- **Strategic Partnerships**: Commerce partnership to expand distribution, with potential for reseller model.
- **AI Monetization Focus**: Prioritizing adoption over short-term monetization, with outcome-based pricing in development.


**【CEO Summary Section】**
- **Q2 Performance**: Subscription revenue grew 12% YoY to $73.3M, total revenue 8% YoY to $88.7M, exceeding guidance. Adjusted EBITDA rose 42% YoY to $7.4M. New customers include Lennox, Louis Dreyfus, and RHI Magnesita, with expanded partnerships in B2B and travel sectors.
- **AI Innovation**: Launched 12 AI agents (4 for B2B, 8 for travel) in pilot phases, with Q3 customer testing. Agents combine language models with proprietary numerical models for goal-oriented execution.
- **Strategic Priorities**: 
  1. Top-of-funnel alignment between marketing and sales for lead quality improvement.
  2. Targeted campaigns in key verticals (e.g., manufacturing, airline rebate management).
  3. Strategic partnerships (e.g., Commerce) to expand distribution and accelerate growth.
- **Travel Segment Momentum**: New wins with Air Greenland, ValueJet, and Scoot (Singapore Airlines subsidiary), plus expanded partnerships with American Airlines and Holcim. Airlines are shifting to offer management platforms, creating demand for PROS solutions.

**【CFO Financial Commentary】**
- **Q2 Financials**: Non-GAAP subscription gross margin 80% (up 50bps YoY), service gross margin 11% (up 100bps YoY). Free cash flow $3.2M (vs. -$2.8M YoY), ending Q2 with $189M cash.
- **Debt Optimization**: Retired $186.9M of 2027 notes, reducing 2027 debt to $79.9M and total debt by 12%.
- **Guidance Update**: Full-year subscription ARR raised to $310M-$313M (11% YoY), subscription revenue to $295.5M-$297.5M (11% YoY), EBITDA $42M-$44M (43% YoY growth), free cash flow $40M-$44M (61% YoY growth).

**【Q&A Highlights】**
- **Top-of-Funnel Strategy**: Aligning marketing campaigns with sales targets in subsegments (e.g., manufacturing). Expected to impact bookings in 2026.
- **Travel Segment Growth**: Airlines transitioning to offer management platforms, driving demand for PROS solutions. Long sales cycles but strong pipeline.
- **Commerce Partnership**: Referral-based co-selling with potential to evolve into reseller model. Early wins include re-engaging a previously inactive customer.
- **AI Monetization**: Focused on adoption first, with outcome-based pricing models under development.
- **Services Mix**: Shifting to partner-driven deployments to reduce reliance on internal services revenue.
- **Macro Environment**: Challenging sales cycles in international markets, but PROS solutions help customers navigate tariff volatility.


PROS Holdings, Inc. (PRO) Q2 2025 Earnings Call Transcript

- **Revenue Growth & Margin Expansion**: Q1 subscription revenue +10% YoY, overall non-GAAP gross margin 70% (+270bps YoY), free cash flow $1.1M (123% YoY growth).
- **AI-Driven Wins**: Fortune 500 chemicals company, Digi-Key (AI price optimization), and two top US airlines highlight AI adoption for real-time decision-making.
- **FY25 Outlook**: Subscription ARR $308-311M (+10%), EBITDA $42-44M (+$13M YoY), free cash flow $40-44M (+$15.8M YoY).
- **Key Trends**: 14% YoY billings growth, 93%+ gross retention, and 85% recurring revenue mix reflect sticky customer base.
- **Incoming Leadership**: Jeff Cotten to lead AI innovation, with Q2 Outperform conference showcasing PROS Sales Agent and Rebate Agent.

**【CEO Summary Section】**
- Q1 2025 revenue exceeded high-end guidance with 10% YoY growth in subscription revenue and 7% in total revenue, driven by B2B and travel market recoveries.
- Trailing 12-month recurring calculated billings grew 14% YoY, the strongest in 10 quarters, supported by AI-powered solutions adoption.
- Key wins include Fortune 500 chemicals company, Digi-Key (expanded price optimization), and two top US airlines, showcasing demand for real-time AI-driven pricing and selling.
- Gross margin improved 270bps to 70% YoY, with free cash flow up 123% YoY to $1.1M.
- Incoming CEO Jeff Cotten set to lead strategic execution of AI innovations like PROS Sales Agent and Rebate Agent, targeting seamless AI-human synergy.

**【CFO Financial Commentary】**
- Subscription revenue: $70.8M (+10% YoY), services gross margin +460bps to 13%, overall non-GAAP gross margin +270bps to 70%.
- Adjusted EBITDA: $8.7M (+90% YoY), free cash flow: $1.1M (vs. -$4.9M YoY), ending cash: $170M.
- FY25 guidance: Subscription ARR $308-311M (+10%), total revenue $360-362M (+9%), EBITDA $42-44M (+$13M YoY), free cash flow $40-44M (+$15.8M YoY).
- Q2 2025 outlook: Subscription $72-72.5M (+10%), total $87-88M (+7%), EBITDA $4-5M, EPS $0.04-0.06.

**【Q&A Key Themes】**
- **Market Volatility & AI Demand**: Customers accelerating AI adoption to mitigate supply chain, tariff, and demand volatility (e.g., Digi-Key, ADI Global Distribution).
- **Gross Margin Expansion**: Cloud efficiency improvements (real-time compute optimization) and services automation drove 160bps subscription margin gain.
- **Travel Recovery**: Won two top US airlines, demonstrating demand for predictive revenue management and offer optimization.
- **Go-to-Market Execution**: 10% YoY sales cycle time reduction, 3Q straight-line bookings improvement, and 40-60% new/expand split stability.
- **Outperform Conference**: $2M+ investment in Q2 for AI innovation showcase, expected to drive long-term customer value and pipeline.


PROS (PRO)-1 May 25-2025 Q1 Earnings call transcript

- **Revenue Momentum**: 14% subscription growth in 2024, $30M EBITDA (400% YoY), and 8% free cash flow margin.
- **AI-Driven Efficiency**: 81% subscription gross margin, 4.4T transactions processed, and Fare Finder Genie embedding generative AI.
- **2025 Outlook**: $308M-$311M ARR (+10%), $42M-$44M EBITDA, and $40M-$44M free cash flow.
- **Travel Recovery**: Airlines adopting dynamic pricing solutions, with Q4 bookings driving 2025 growth.
- **AI Expansion**: Customer Success teams now own expansion quotas, and AI solutions like Fare Finder Genie monetizing autonomous revenue.

**【CEO Key Highlights】**
- **2024 Performance**: Delivered 14% subscription revenue growth and 9% total revenue growth, with $30M adjusted EBITDA (400% improvement vs. 2023) and 8% free cash flow margin.
- **AI Integration**: Achieved 81% non-GAAP subscription gross margin in Q4, processing 4.4T transactions (+29% YoY). Introduced Fare Finder Genie, embedding generative AI for tailored travel experiences.
- **Market Leadership**: Named a Leader in Gartner Magic Quadrant and IDC MarketScape, with highest customer satisfaction in CPQ market.
- **Customer Wins**: Secured new logos like BradyPLUS, HBK, Werner Electric, and expanded with Holcim (Smart Rebate Management).

**【CFO Financial Breakdown】**
- **Q4 2024 Results**: 
  - Subscription revenue: $69.3M (+14% YoY)
  - Total revenue: $85.0M (+10% YoY)
  - Non-GAAP subscription gross margin: 81% (vs. 78% in 2023)
  - Adjusted EBITDA: $10.9M; Free cash flow: $23.5M
- **2025 Guidance**: 
  - Subscription ARR: $308M-$311M (+10% YoY)
  - Subscription revenue: $294M-$296M (+11% YoY)
  - Adjusted EBITDA: $42M-$44M (+$13M YoY)
  - Free cash flow: $40M-$44M (+$15.8M YoY)

**【Q&A Key Takeaways】**
- **Travel Recovery**: Travel bookings growth expected to accelerate in 2025, with airlines focusing on offer optimization (e.g., Air Canada's dynamic pricing, Lufthansa's ancillary pricing).
- **Sales Strategy**: Customer Success teams now own expansion quotas, aligning with land-realize-expand strategy. Partner channel focus on key ecosystem integrations.
- **AI Commercialization**: Generative AI embedded in core solutions (e.g., Fare Finder Genie) to drive autonomous revenue uplift, with potential for 82%-83%+ subscription gross margin.
- **Currency Impact**: Q1 2025 subscription growth (+10% YoY) tempered by 1% FX headwind, but bookings momentum expected to fuel H2 growth.
- **Tariff Volatility**: B2B customers increasingly rely on real-time AI for surgical price adjustments, highlighting PROS' value in volatile markets.

PROS (PRO)-6 Feb 25-2024 Q4 Earnings call transcript

PROS (PRO)-29 Oct 24-2024 Q3 Earnings call transcript

Pros (PRO)-30 Jul 24-2024 Q2 Earnings call transcript

Pros (PRO)-7 May 24-2024 Q1 Earnings call transcript

Pros (PRO)-8 Feb 24-2023 Q4 Earnings call transcript

Pros (PRO)-31 Oct 23-2023 Q3 Earnings call transcript

Pros (PRO)-25 Jul 23-2023 Q2 Earnings call transcript

Pros (PRO)-2 May 23-2023 Q1 Earnings call transcript

Pros (PRO)-9 Feb 23-2022 Q4 Earnings call transcript

Pros (PRO)-2 Nov 22-2022 Q3 Earnings call transcript

Pros (PRO)-29 Jul 22-2022 Q2 Earnings call transcript

Pros (PRO)-3 May 22-2022 Q1 Earnings call transcript

Pros (PRO)-11 Feb 22-2021 Q4 Earnings call transcript

Pros (PRO)-2 Nov 21-2021 Q3 Earnings call transcript

Pros (PRO)-7 Aug 21-2021 Q2 Earnings call transcript

Pros (PRO)-8 May 21-2021 Q1 Earnings call transcript

Pros (PRO)-5 Feb 21-2020 Q4 Earnings call transcript

Pros (PRO)-1 Nov 20-2020 Q3 Earnings call transcript

Pros (PRO)-1 Aug 20-2020 Q2 Earnings call transcript

Pros (PRO)-8 May 20-2020 Q1 Earnings call transcript

Pros (PRO)-7 Feb 20-2019 Q4 Earnings call transcript

Pros (PRO)-24 Oct 19-2019 Q3 Earnings call transcript

Pros (PRO)-26 Jul 19-2019 Q2 Earnings call transcript

Pros (PRO)-28 Apr 19-2019 Q1 Earnings call transcript

Pros (PRO)-8 Feb 19-2018 Q4 Earnings call transcript

Pros (PRO)-25 Oct 18-2018 Q3 Earnings call transcript

Pros (PRO)-26 Jul 18-2018 Q2 Earnings call transcript

Pros (PRO)-26 Apr 18-2018 Q1 Earnings call transcript

Pros (PRO)-6 Feb 18-2017 Q4 Earnings call transcript

Pros (PRO)-26 Oct 17-2017 Q3 Earnings call transcript

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