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PROS Holdings, Inc. Reports Fourth Quarter and Full Year 2016 Financial Results

February 7, 2017 4:15 PM

HOUSTON--(BUSINESS WIRE)-- PROS Holdings, Inc. (NYSE: PRO), a revenue and profit realization company, today announced financial results for the fourth quarter and full year ended December 31, 2016.

“2016 was a breakthrough year for PROS as we transformed to a cloud company and executed on our mission of helping companies outperform,” stated CEO Andres Reiner. “We are pleased with our strong fourth quarter finish and full year performance, exceeding guidance on all of our key growth metrics. We enter 2017 confident that we have the right team, the right strategy, and the right solutions to capitalize on a large market opportunity as more companies turn to data science-driven solutions to power modern commerce.”

CFO Stefan Schulz said, “We made great progress in 2016 toward our long-term profitability goals and passed several key milestones related to our cloud transition. We outperformed on expenses and free cash flow while delivering strong revenue and bookings, which underscores our improvements in execution and productivity and the great value we deliver to customers. We are a stronger company coming into 2017 and well-positioned to continue our momentum.”

Fourth Quarter and Full Year 2016 Financial Highlights

Key financial results for the fourth quarter and full year 2016 are shown below. Throughout this press release, all dollar figures are in millions, except net loss per share. Unless otherwise noted, all results are on a reported basis and are compared to the prior year period.

GAAP Non-GAAP
Q4 2016 Q4 2015 % Change Q4 2016 Q4 2015 % Change
Revenue and Bookings:
Revenue $ 39.9 $ 42.0 (5 )% $ 39.9 $ 42.7 (7 )%
Subscription Revenue 11.0 8.0 37 % 11.0 8.0 37 %
Annual Recurring Revenue ("ARR") n/a n/a n/a 122.2 98.2 24 %
Annual Contract Value ("ACV") bookings n/a n/a n/a 9.3 6.4 45 %
Profitability:
Operating Loss (16.3 ) (15.0 ) nm (9.6 ) (3.5 ) nm
Net Loss (18.5 ) (17.7 ) nm (6.5 ) (2.8 ) nm
Net Loss Per Share (0.61 ) (0.60 ) nm (0.21 ) (0.09 ) nm
Adjusted EBITDA n/a n/a n/a (8.6 ) (2.0 ) nm
Cash:
Net cash (used in) provided by operating activities (7.2 ) 8.7 nm (7.2 ) 8.7 nm
Free Cash Flow n/a n/a n/a $ (10.0 ) $ 6.8 nm
GAAP Non-GAAP
FY 2016 FY 2015 % Change FY 2016 FY 2015 % Change
Revenue and Bookings:
Revenue $ 153.3 $ 168.2 (9 )% $ 153.3 $ 172.0 (11)%
Subscription Revenue 38.2 29.0 32 % 38.2 29.2 31%
Annual Recurring Revenue ("ARR") n/a n/a n/a 122.2 98.2 24%
Annual Contract Value ("ACV") bookings n/a n/a n/a 29.7 21.5 38%
Profitability:
Operating Loss (65.4 ) (55.5 ) nm (40.9 ) (17.4 ) nm
Net Loss (75.2 ) (65.8 ) nm (28.0 ) (13.4 ) nm
Net Loss Per Share (2.47 ) (2.23 ) nm (0.92 ) (0.45 ) nm
Adjusted EBITDA n/a n/a n/a (35.4 ) (12.1 ) nm
Cash:
Net cash (used in) provided by operating activities (14.3 ) 15.5 nm (14.3 ) 15.5 nm
Free Cash Flow n/a n/a n/a $ (24.3 ) $ 8.5 nm

The attached tables provide a summary of PROS results for the period, including a reconciliation of GAAP to non-GAAP revenue, gross profit, income (loss) from operations, and net income (loss), as well as earnings (loss) per share.

2016 and Recent Business Highlights

Financial Outlook

PROS anticipates the following for the first quarter and full year 2017, based on an estimated 31.0 and 31.2 million basic weighted average shares outstanding, respectively, and a 36% non-GAAP estimated tax rate:

Q1 2017 Guidance

v. Q1 2016 atMid-Point

Full Year 2017Guidance

v. Prior Year atMid-Point

Total Revenue $38 to $39 2% $162.5 to $165.5 7%
Subscription Revenue $11.5 to $11.8 42% $54 to $55 43%
ARR n/a n/a $147 to $149 21%
Non-GAAP Loss Per Share $(0.30) to $(0.29) n/a n/a n/a
Adjusted EBITDA $(13) to $(12) n/a $(35) to $(34) n/a
Free Cash Flow n/a n/a $(21) to $(19) n/a

Conference Call

In conjunction with this announcement, PROS Holdings, Inc. will host a conference call on Tuesday, February 7, 2017, at 4:45 p.m. ET to discuss the Company’s financial results and business outlook. To access this call, dial 1-877-407-9039 (toll free) or 1-201-689-8470. The live webcast of the conference call can be accessed under the “Investor Relations” section of the Company’s website at www.pros.com.

Following the call, an archived webcast will be available in the “Investor Relations” section of the Company’s website at www.pros.com. A telephone replay will be available until Tuesday, February 14, 2017, at 1-877-870-5176 (toll free) or 1-858-384-5517 using the pass code 13651356. An archived webcast of this conference call will also be available in the “Investor Relations” section of the Company’s website at www.pros.com.

About PROS

PROS Holdings, Inc. (NYSE: PRO) is a revenue and profit realization company that helps customers realize their potential through the blend of simplicity and data science. PROS offers solutions to help accelerate sales, formulate winning pricing strategies and align product, demand and availability. PROS revenue and profit realization solutions are designed to allow customers to experience meaningful revenue growth, sustained profitability and modernized business processes. To learn more, visit www.pros.com.

Forward-looking Statements

This press release contains forward-looking statements, including statements about our future financial performance; positioning; management's confidence and optimism; customer successes; demand for enterprise revenue and profit realization software solutions; business expansion; business predictability; ARR; revenue; adjusted EBITDA; free cash flow; shares outstanding and effective tax rate. The forward-looking statements contained in this press release are based upon our historical performance and our current plans, estimates and expectations and are not a representation that such plans, estimates or expectations will be achieved. Factors that could cause actual results to differ materially from those described herein include risks related to: (a) our ability to execute on our cloud-first strategy, (b) reduced revenue and cash flow resulting from our transition to a cloud-first strategy, (c) threats to the security of our or our customer’s data, (d) potential business or service disruptions from our third party data centers, cloud platform providers or other unrelated service providers, (e) market acceptance of our new products and product enhancements, (f) the risk that the markets for our software does not grow as anticipated, (g) the length of our sales cycles, (h) the risk that we will not be able to maintain historical maintenance, support and subscription renewal rates, (i) competition from vendors of sales, pricing, revenue management and configure-price-quote solutions as well as from companies internally developing their own solutions, (j) potential unauthorized or improper actions of our personnel, (k) the risk that acquisitions we have and may enter into in the future may be difficult to integrate, fail to achieve our objectives, disrupt our business, dilute stockholder value or divert management attention, (l) any downturn in sales to our target markets, (m) potential delays or other challenges related to the implementation of our solutions, (n) the difficulties of making accurate estimates necessary to complete a project and recognize revenue, (o) personnel risks associated with growing a business generally, (p) the impact that a slowdown in the world or any particular economy has on our business sales cycles, prospects’ and customers’ spending decisions, timing of implementation decisions, payment and renewal decision, (q) our debt repayment obligations, (r) the impact of currency fluctuations on our results of operations, and (s) civil and political unrest in geographic regions in which we operate. Additional information relating to the uncertainty affecting PROS’ business is contained in our filings with the Securities and Exchange Commission. These forward-looking statements represent PROS’ expectations as of the date of this press release. Subsequent events may cause these expectations to change, and PROS disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

PROS has provided in this release certain financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP (loss) income from operations, annual recurring revenue, annual contract value bookings, adjusted EBITDA, free cash flow, tax rate, net income and diluted earnings per share. PROS uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating PROS’ ongoing operational performance and cloud-first transition.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure as detailed above. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release, and can be found, along with other financial information, in the investor relations portion of our website. PROS' use of non-GAAP financial measures may not be consistent with the presentations by similar companies in PROS' industry. PROS has also provided in this release certain forward-looking non-GAAP financial measures, including non-GAAP revenue, non-GAAP (loss) income from operations, annual recurring revenue, annual contract value bookings, adjusted EBITDA, free cash flow and non-GAAP tax rates (collectively the "non-GAAP financial measures") as follows:

Non-GAAP revenue: Business combination accounting principles under GAAP require us to recognize the fair value of software subscription, maintenance and professional services contracts assumed in our acquisitions of SignalDemand, Inc. and Cameleon Software SA. A portion of these software subscription and professional services are deferred and typically recognized over the term of the software subscription contract, so our GAAP revenues during the term of the contract after the acquisition do not reflect the full amount of revenues that would have been reported if the acquired deferred software subscription and professional services revenues were not written down to fair value. The revenue for maintenance is deferred and typically recognized over a one-year period, so our GAAP revenues for the one-year period after the acquisition do not reflect the full amount of revenues that would have been reported if the acquired deferred maintenance revenue was not written down to fair value. The non-GAAP revenue adjustments eliminate the effect of the deferred revenue write-down and include the costs associated with the revenue adjustment. We believe these adjustments to the revenue from these contracts and to the associated costs are useful to investors as an additional means to reflect revenue trends of our business.

Non-GAAP income from operations: Non-GAAP (loss) income from operations includes the non-GAAP revenue discussed above and also excludes the impact of stock-based compensation, amortization of acquisition-related intangibles, amortization of debt discount and issuance costs, recovery of bankruptcy claims, severance, as well as impairment of internal-use software. Non-GAAP (loss) income from operations excludes the following items from non-GAAP estimates:

Annual Recurring Revenue: Annual Recurring Revenue ("ARR") is used to assess the trajectory of our cloud business. ARR means, as of a specified date, the contracted recurring revenue which includes both subscription and maintenance contracts, and excludes perpetual license, term license and service agreements, which are current and contracted with a future start date. ARR should be viewed independently of revenue and any other GAAP measure.

Annual Contract Value Bookings: Annual Contract Value ("ACV") bookings are comprised of the estimated annual value of our Total Contract Value ("TCV") bookings. ACV bookings are comprised of annual maintenance and subscriptions, one seventh of the license TCV, and excludes services and subscription renewals. ACV should be viewed independently of revenue and any other GAAP measure. TCV bookings are comprised of the total value of new customer contracts closed during a specified period, excluding maintenance in excess of one year, and including license, maintenance, services, term license and subscription renewals, that we believe to be firm commitments to provide our software solutions and related services. Bookings by their nature are significantly based on estimates and judgments that we make regarding total contract values, and our bookings growth projections are not meant as a substitute measure for revenue in accordance with GAAP. We believe our bookings growth projection is useful to investors as an additional means to evaluate our business performance.

Non-GAAP Tax Rate: The estimated non-GAAP effective tax rate adjusts the tax effect to quantify the impact of the excluded non-GAAP items.

Adjusted EBITDA: Adjusted EBITDA is defined as GAAP net (loss) income before interest expense, provision for income taxes, depreciation and amortization, as adjusted to eliminate the effect of the deferred revenue write-down from our acquisitions of SignalDemand, Inc. and Cameleon Software SA, tax consequences associated with the stock-based compensation costs arising from our acquisitions, amortization of acquisition-related intangibles, depreciation and amortization, impairment of internal-use software and capitalized internal-use software development costs. Adjusted EBITDA should not be considered as an alternative to net (loss) income as an indicator of our operating performance.

Free Cash Flow: Free cash flow is a non-GAAP financial measure which is defined as net cash provided by operating activities, less additions to property, plant and equipment, purchases of other (non-acquisition-related) intangible assets and capitalized internal-use software development costs.

These non-GAAP estimates are not measurements of financial performance prepared in accordance with GAAP, and we are unable to reconcile these forward-looking non-GAAP financial measures to their directly comparable GAAP financial measures because the information described above which is needed to complete a reconciliation is unavailable at this time without unreasonable effort.

PROS Holdings, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

December 31, 2016 December 31, 2015
Assets:
Current assets:
Cash and cash equivalents $ 118,039 $ 161,770
Short-term investments 15,996 2,500
Accounts and unbilled receivables, net of allowance of $760 and $586, respectively 33,285 39,115
Prepaid and other current assets 6,337 7,540
Total current assets 173,657 210,925
Property and equipment, net 15,238 15,777
Intangibles, net 12,650 14,191
Goodwill 20,096 20,445
Other long-term assets 6,013 1,873
Total assets $ 227,654 $ 263,211
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable and other liabilities $ 2,744 $ 8,273
Accrued liabilities 7,279 4,333
Accrued payroll and other employee benefits 18,349 13,084
Deferred revenue 68,349 60,664
Total current liabilities 96,721 86,354
Long-term deferred revenue 11,389 4,665
Convertible debt, net 122,299 115,860
Other long-term liabilities 639 918
Total liabilities 231,048 207,797
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued

-

-

Common stock, $0.001 par value, 75,000,000 shares authorized; 35,001,236 and 34,156,561 shares issued, respectively; 30,583,651 and 29,738,976 shares outstanding, respectively 35 34
Additional paid-in capital 175,678 158,674
Treasury stock, 4,417,585 common shares, at cost (13,938 ) (13,938 )
Accumulated deficit (160,259 ) (85,034 )
Accumulated other comprehensive loss (4,910 ) (4,322 )
Total stockholders’ equity (3,394 ) 55,414
Total liabilities and stockholders’ equity $ 227,654 $ 263,211

PROS Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands, except per share data)

(Unaudited)

Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
Revenue:
License $ 3,636 $ 6,152 $ 11,814 $ 32,716
Services 7,866 10,775 34,739 42,875
Subscription 10,962 8,023 38,158 28,989
Total license, services and subscription 22,464 24,950 84,711 104,580
Maintenance and support 17,462 17,062 68,565 63,666
Total revenue 39,926 42,012 153,276 168,246
Cost of revenue:
License 47 62 246 304
Services 7,453 9,083 32,047 36,147
Subscription 5,037 3,456 17,379 12,786
Total license, services and subscription 12,537 12,601 49,672 49,237
Maintenance and support 3,415 2,812 13,681 12,173
Total cost of revenue 15,952 15,413 63,353 61,410
Gross profit 23,974 26,599 89,923 106,836
Operating expenses:
Selling and marketing 16,255 18,336 63,980 74,146
General and administrative 10,627 8,731 38,537 38,517
Research and development 13,350 11,682 52,804 46,780
Impairment of internal-use software

-

2,890

-

2,890
Loss from operations (16,258 ) (15,040 ) (65,398 ) (55,497 )
Convertible debt interest and amortization (2,376 ) (2,272 ) (9,319 ) (8,914 )
Other expense, net 101 (90 ) (38 ) (661 )
Loss before income tax (benefit) provision (18,533 ) (17,402 ) (74,755 ) (65,072 )
Income tax (benefit) provision (20 ) 329 470 739
Net loss $ (18,513 ) $ (17,731 ) $ (75,225 ) $ (65,811 )
Net loss per share:
Basic and diluted $ (0.61 ) $ (0.60 ) $ (2.47 ) $ (2.23 )
Weighted average number of shares:
Basic and diluted 30,557 29,722 30,395 29,578

PROS Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
Operating activities:
Net loss $ (18,513 ) $ (17,731 ) $ (75,225 ) $ (65,811 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 2,111 2,472 9,507 10,395
Amortization of debt discount and issuance costs 1,653 1,554 6,439 6,039
Share-based compensation 6,021 6,483 20,466 27,864
Deferred income tax, net (24 ) 27 40 165
Provision for doubtful accounts 400 (414 ) 174 (282 )
Loss on disposal of assets 19 167 19 167
Impairment of internal-use software

-

2,890

-

2,890
Changes in operating assets and liabilities:
Accounts and unbilled receivables (7,228 ) 11,800 5,671 32,274
Prepaid expenses and other assets (169 ) 612 (915 ) 229
Accounts payable and other liabilities (359 ) (719 ) (2,905 ) (4,049 )
Accrued liabilities 1,914 436 2,801 800
Accrued payroll and other employee benefits 4,486 2,861 5,195 (2,048 )
Deferred revenue 2,503 (1,710 ) 14,388 6,899
Net cash (used in) provided by operating activities (7,186 ) 8,728 (14,345 ) 15,532
Investing activities:
Purchases of property and equipment (717 ) (1,938 ) (7,241 ) (6,794 )
Purchase of equity securities (2,000 )

-

(2,000 )

-

Capitalized internal-use software development costs (479 )

-

(1,048 ) (233 )
Purchase of intangible asset (1,625 )

-

(1,625 )

-

Change in restricted cash

-

100

-

100
Purchases of short-term investments (10,056 ) (2,521 ) (154,990 ) (57,697 )
Proceeds from maturities of short-term investments 45,000 22,500 141,500 55,200
Net cash provided by (used in) investing activities 30,123 18,141 (25,404 ) (9,424 )
Financing activities:
Exercise of stock options 469 273 889 706
Proceeds from employee stock plans

-

-

1,090 839
Tax withholding related to net share settlement of stock awards (223 ) (158 ) (5,467 ) (5,124 )
Payment of contingent consideration for PROS France

-

-

-

(1,304 )
Payments of notes payable

-

(51 ) (196 ) (263 )
Debt issuance costs related to convertible debt

-

-

-

(408 )
Net cash provided by (used in) financing activities 246 64 (3,684 ) (5,554 )
Effect of foreign currency rates on cash (352 ) (111 ) (298 ) 197
Net change in cash and cash equivalents 22,831 26,822 (43,731 ) 751
Cash and cash equivalents:
Beginning of period 95,208 134,948 161,770 161,019
End of period $ 118,039 $ 161,770 $ 118,039 $ 161,770

PROS Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)
(Unaudited)
We use these non-GAAP financial measures to assist in the management of the Company because we believe that this information provides a more consistent and complete understanding of the underlying results and trends of the ongoing business due to the uniqueness of these charges.
See breakdown of the reconciling line items on page 10.

Three Months Ended December 31,

Quarter over Quarter Year Ended December 31, Year over Year
2016 2015 % change 2016 2015 % change
GAAP revenue $ 39,926 $ 42,012 (5 )% $ 153,276 $ 168,246 (9 )%
Non-GAAP adjustment:
Acquisition-related deferred revenue write-down

-

701

-

3,766
Non-GAAP revenue $ 39,926 $ 42,713 (7 )% $ 153,276 $ 172,012 (11 )%
GAAP gross profit $ 23,974 $ 26,599 (10 )% $ 89,923 $ 106,836 (16 )%
Non-GAAP adjustments:
Acquisition-related deferred revenue write-down, net of cost of revenue

-

206

-

1,373
Amortization of intangible assets 481 542 1,957 2,201
Share-based compensation 547 823 2,267 3,719
Non-GAAP gross profit $ 25,002 $ 28,170 (11 )% $ 94,147 $ 114,129 (18 )%
Non-GAAP gross margin 62.6 % 66.0 % 61.4 % 66.3 %
GAAP loss from operations $ (16,258 ) $ (15,040 ) 8 % $ (65,398 ) $ (55,497 ) 18 %
Non-GAAP adjustments:
Acquisition-related deferred revenue write-down, net of cost of revenue

-

206

-

1,373
Amortization of intangible assets 683 974 2,971 4,840
Accretion expense for acquisition-related contingent consideration

-

-

-

22
Impairment of internal-use software

-

2,890

-

2,890
Recovery of bankruptcy claim

-

-

-

(626 )
Severance

-

940 1,070 1,696
Share-based compensation 6,021 6,483 20,466 27,864
Total Non-GAAP adjustments $ 6,704 $ 11,493 $ 24,507 $ 38,059
Non-GAAP loss from operations $ (9,554 ) $ (3,547 ) 169 % $ (40,891 ) $ (17,438 ) 134 %
Non-GAAP loss from operations % of total revenue (23.9 )% (8.3 )% (26.7 )% (10.1 )%
GAAP net loss $ (18,513 ) $ (17,731 ) 4 % $ (75,225 ) $ (65,811 ) 14 %
Non-GAAP adjustments:
Total Non-GAAP adjustments affecting loss from operations 6,704 11,493 24,507 38,059
Amortization of debt discount and issuance costs 1,653 1,554 6,439 6,039
Tax impact related to non-GAAP adjustments 3,643 1,895 16,241 8,271
Non-GAAP net loss $ (6,513 ) $ (2,789 ) 134 % $ (28,038 ) $ (13,442 ) 109 %
Non-GAAP diluted loss per share $ (0.21 ) $ (0.09 ) $ (0.92 ) $ (0.45 )
Shares used in computing non-GAAP loss per share 30,557 29,722 30,395 29,578

PROS Holdings, Inc.

Supplemental Schedule of Non-GAAP Financial Measures

Increase (Decrease) in GAAP Amounts Reported

(In thousands)

(Unaudited

Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
Revenue Items
Acquisition-related deferred revenue write-down - service revenue

-

683

-

3,449
Acquisition-related deferred revenue write-down - subscription revenue

-

2

-

226
Acquisition-related deferred revenue write-down - maintenance revenue

-

16

-

91
Total revenue items $

-

$ 701 $

-

$ 3,766
Cost of License Items
Amortization of intangible assets 10 10 41 41
Total cost of license items $ 10 $ 10 $ 41 $ 41
Cost of Services Items
Acquisition-related deferred cost write-down

-

(495 )

-

(2,393 )
Share-based compensation 401 835 1,690 3,340
Total cost of services items $ 401 $ 340 $ 1,690 $ 947
Cost of Subscription Items
Amortization of intangible assets 315 374 1,277 1,519
Share-based compensation 64 (76 ) 249 124
Total cost of subscription items $ 379 $ 298 $ 1,526 $ 1,643
Cost of Maintenance Items
Amortization of intangible assets 156 158 639 641
Share-based compensation 82 64 328 255
Total cost of maintenance items $ 238 $ 222 $ 967 $ 896
Sales and Marketing Items
Amortization of intangible assets 202 350 1,008 2,306
Severance

-

940 1,070 1,282
Share-based compensation 1,265 1,995 3,824 8,536
Total sales and marketing items $ 1,467 $ 3,285 $ 5,902 $ 12,124
General and Administrative Items
Accretion expense for acquisition-related contingent consideration

-

-

-

22
Amortization of intangible assets

-

82 6 333
Recovery of bankruptcy claim

-

-

-

(626 )
Share-based compensation 2,773 2,293 9,040 10,293
Total general and administrative items $ 2,773 $ 2,375 $ 9,046 $ 10,022
Research and Development Items
Severance

-

-

-

414
Share-based compensation 1,436 1,372 5,335 5,316
Total research and development items $ 1,436 $ 1,372 $ 5,335 $ 5,730
Impairment of internal-use software $

-

$ 2,890 $

-

$ 2,890

PROS Holdings, Inc.

Supplemental Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands)

(Unaudited)

Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
Adjusted EBITDA
GAAP Loss from Operations $ (16,258 ) $ (15,040 ) $ (65,398 ) $ (55,497 )
Acquisition-related deferred revenue write-down, net of cost of revenue

-

206

-

1,373
Amortization of intangible assets 683 974 2,971 4,840
Accretion expense for acquisition-related contingent consideration

-

-

-

22
Impairment of internal-use software

-

2,890

-

2,890
Recovery of bankruptcy claim

-

-

-

(626 )
Severance

-

940 1,070 1,696
Share-based compensation 6,021 6,483 20,466 27,864
Depreciation 1,428 1,498 6,536 5,555
Capitalized internal-use software development costs (479 )

-

(1,048 ) (233 )
Adjusted EBITDA $ (8,605 ) $ (2,049 ) $ (35,403 ) $ (12,116 )
Free Cash Flow
Net cash (used in) provided by operating activities $ (7,186 ) $ 8,728 $ (14,345 ) $ 15,532
Purchase of property and equipment (717 ) (1,938 ) (7,241 ) (6,794 )
Purchase of intangible asset (1,625 )

-

(1,625 )

-

Capitalized internal-use software development costs (479 )

-

(1,048 ) (233 )
Free Cash Flow $ (10,007 ) $ 6,790 $ (24,259 ) $ 8,505
Guidance Q1 2017 Guidance Full Year 2017 Guidance
Low High Low High
Adjusted EBITDA
GAAP Loss from Operations $ (20,875 ) $ (19,875 ) $ (67,050 ) $ (66,050 )
Amortization of intangible assets 650 650 2,700 2,700
Share-based compensation 6,125 6,125 24,850 24,850
Depreciation 1,350 1,350 5,500 5,500
Capitalized internal-use software development costs (250 ) (250 ) (1,000 ) (1,000 )

Adjusted EBITDA

$ (13,000 ) $ (12,000 ) $ (35,000 ) $ (34,000 )

Investor Contact:

PROS Investor Relations

Tim Girgenti, 713-335-5879

[email protected]

or

Media Contact:

PROS Public Relations

Yvonne Donaldson, 713-335-5310

[email protected]

Source: PROS

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