Pros Holdings Inc (PRO) Q3 2024 Earnings Call Highlights: Strong Revenue Growth and Strategic ...

GuruFocus News
4 min read

In This Article:

  • Subscription Revenue: $67.1 million in Q3, up 12% year-over-year.

  • Total Revenue: $82.7 million in Q3, up 7% year-over-year.

  • Recurring Revenue: 85% of total revenue in Q3.

  • Gross Revenue Retention Rate: 93% or better on a trailing 12-month basis.

  • Calculated Billings: Increased 3% year-over-year in Q3 and 9% for the trailing 12 months.

  • Non-GAAP Subscription Margin: 80% in Q3, improved by over 190 basis points year-over-year.

  • Non-GAAP Gross Margin: 68% in Q3, improved by approximately 220 basis points year-over-year.

  • Adjusted EBITDA: $9.3 million in Q3, improved by 65% year-over-year.

  • Free Cash Flow: $1.4 million in Q3, $2.6 million year-to-date, improved by 217% year-over-year.

  • Cash and Investments: $150.6 million at the end of Q3.

  • Non-GAAP Earnings Per Share: $0.14 in Q3.

  • Annual Subscription Revenue Guidance: $265.5 million to $266 million, 14% growth at the midpoint.

  • Annual Adjusted EBITDA Guidance: $27.5 million to $28.5 million, 367% improvement year-over-year at the midpoint.

  • Annual Free Cash Flow Guidance: $21 million to $24 million, 98% improvement year-over-year at the midpoint.

  • Annual Total Revenue Guidance: $329.5 million to $330.5 million, 9% growth at the midpoint.

  • Q4 Subscription Revenue Guidance: $68.5 million to $69 million, 13% growth at the midpoint.

  • Q4 Total Revenue Guidance: $84.1 million to $85.1 million, 9% growth at the midpoint.

  • Q4 Adjusted EBITDA Guidance: $8.4 million to $9.4 million, 254% improvement year-over-year at the midpoint.

  • Q4 Non-GAAP Earnings Per Share Guidance: $0.12 to $0.14 per share.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Pros Holdings Inc (NYSE:PRO) exceeded the high-end of their guidance ranges across all metrics for the third quarter.

  • Subscription revenue grew by 12% year-over-year, with total revenue up 7%, both surpassing expectations.

  • The company achieved a 448% improvement in adjusted EBITDA and a 217% improvement in free cash flow year-to-date.

  • The PROS Platform continues to innovate with AI, launching new solutions like the embedded AI agent in their Search Engine Marketing solution.

  • Approximately 50% of bookings in Q3 came from new logos, indicating strong market penetration and customer acquisition.

Negative Points

  • CEO Andres Reiner announced his retirement, which may lead to uncertainty during the transition period.

  • The travel industry, a significant market for PROS, is experiencing slower investment pace, impacting potential growth.

  • Despite strong performance, geopolitical risks and macroeconomic uncertainties could impact future results.

  • Professional services growth has lagged behind subscription growth, indicating potential challenges in service delivery or demand.

  • The company maintained its subscription ARR guidance, reflecting caution due to external market conditions.

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