10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

___________________________________________________________________________ 

FORM 10-Q

___________________________________________________________________________ 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the transition period from      to .

Commission File Number: 001-33554

___________________________________________________________________________ 

PROS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

__________________________________________________________________________ 

Delaware	76-0168604
(State of Incorporation)	(I.R.S. Employer Identification No.)

3200 Kirby Drive, Suite 600				77098
Houston	TX
(Address of Principal Executive Offices)				(Zip Code)
		(713)	335-5151
(Registrant's telephone number, including area code)
(Former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock $0.001 par value per share	PRO	New York Stock Exchange

    Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

    Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒   No  ☐

    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐ (do not check if a smaller reporting company)	Smaller Reporting Company	☐
Emerging Growth Company	☐

    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐  No  ☒

    The number of shares outstanding of the registrant's Common Stock, $0.001 par value, was 44,378,704 as of July 27, 2021.

Table of Contents

PROS Holdings, Inc.

Form 10-Q

For the Quarterly Period Ended June 30, 2021

Table of Contents

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Interim Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Comprehensive Income (Loss)	5
	Condensed Consolidated Statements of Cash Flows	6
	Condensed Consolidated Statements of Stockholders' Equity	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23
Item 4.	Controls and Procedures	23
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosure	24
Item 5.	Other Information	24
Item 6.	Exhibits	24
Signatures		26

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). All statements in this report other than historical facts are forward-looking and are based on current estimates, assumptions, trends, and projections. Statements which include the words "believes," "seeks," "expects," "may," "should," "intends," "likely," "targets," "plans," "anticipates," "estimates," or the negative version of those words and similar expressions are intended to identify forward-looking statements. Numerous important factors, risks and uncertainties affect our operating results, including, without limitation, those described in our Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q, and could cause our actual results to differ materially, from the results implied by these or any other forward-looking statements made by us or on our behalf. You should pay particular attention to the important risk factors and cautionary statements described in the section of our Annual Report on Form 10-K entitled "Risk Factors" and the section of this Quarterly Report on Form 10-Q entitled "Risk Factors." You should also carefully review the cautionary statements described in the other documents we file with the Securities and Exchange Commission, specifically the Annual Report on Form 10-K, all Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

You should not rely on forward-looking statements as predictions of future events, as we cannot guarantee that future results, levels of activity, performance or achievements will meet expectations. The forward-looking statements made herein are only made as of the date hereof, and we undertake no obligation to publicly update such forward-looking statements for any reason.

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PART I.     FINANCIAL INFORMATION

ITEM 1. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

PROS Holdings, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited) 

	June 30, 2021		December 31, 2020
Assets:
Current assets:
Cash and cash equivalents	$	318,326	$	329,134
Trade and other receivables, net of allowance of $1,182 and $4,122, respectively	41,295		49,578
Deferred costs, current	5,879		5,941
Prepaid and other current assets	9,376		9,647
Total current assets	374,876		394,300
Property and equipment, net	34,267		36,504
Operating lease right-of-use assets	27,632		30,689
Deferred costs, noncurrent	11,196		12,544
Intangibles, net	6,596		8,341
Goodwill	49,698		50,044
Other assets, noncurrent	7,238		7,549
Total assets	$	511,503	$	539,971
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable and other liabilities	$	5,265	$	4,246
Accrued liabilities	12,786		13,065
Accrued payroll and other employee benefits	22,543		25,514
Operating lease liabilities, current	6,203		5,937
Deferred revenue, current	101,235		99,156
Total current liabilities	148,032		147,918
Deferred revenue, noncurrent	7,896		11,372
Convertible debt, net	287,542		218,028
Operating lease liabilities, noncurrent	40,837		44,099
Other liabilities, noncurrent	1,468		1,517
Total liabilities	485,775		422,934
Commitments and contingencies (see Note 9)
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; 49,020,405  and 48,142,267 shares issued, respectively; 44,339,682 and 43,461,544 shares outstanding, respectively	49		48
Additional paid-in capital	526,926		589,040
Treasury stock, 4,680,723 common shares, at cost	(29,847)		(29,847)
Accumulated deficit	(467,518)		(438,773)
Accumulated other comprehensive loss	(3,882)		(3,431)
Total stockholders' equity	25,728		117,037
Total liabilities and stockholders' equity	$	511,503	$	539,971

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROS Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands, except per share data)

(Unaudited) 

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue:
Subscription	$	44,224	$	42,377	$	86,872	$	85,547
Maintenance and support	8,570		11,741		18,244		24,264
Total subscription, maintenance and support	52,794		54,118		105,116		109,811
Services	9,607		9,629		18,663		20,247
Total revenue	62,401		63,747		123,779		130,058
Cost of revenue:
Subscription	13,589		12,392		27,390		25,256
Maintenance and support	2,157		2,610		4,415		5,400
Total cost of subscription, maintenance and support	15,746		15,002		31,805		30,656
Services	10,658		10,948		21,091		24,021
Total cost of revenue	26,404		25,950		52,896		54,677
Gross profit	35,997		37,797		70,883		75,381
Operating expenses:
Selling and marketing	21,190		21,011		42,754		45,931
Research and development	20,095		18,397		40,553		37,533
General and administrative	11,018		13,528		24,472		28,408
Loss from operations	(16,306)		(15,139)		(36,896)		(36,491)
Convertible debt interest and amortization	(1,576)		(2,085)		(3,152)		(4,147)
Other income, net	4		146		290		977
Loss before income tax provision	(17,878)		(17,078)		(39,758)		(39,661)
Income tax provision	168		130		317		282
Net loss	$	(18,046)	$	(17,208)	$	(40,075)	$	(39,943)
Net loss per share:
Basic and diluted	$	(0.41)	$	(0.40)	$	(0.90)	$	(0.92)
Weighted average number of shares:
Basic and diluted	44,321		43,304		44,283		43,203
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	$	157	$	86	$	(451)	$	(84)
Other comprehensive income (loss), net of tax	157		86		(451)		(84)
Comprehensive loss	$	(17,889)	$	(17,122)	$	(40,526)	$	(40,027)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROS Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands) (Unaudited)

	Six Months Ended June 30,
	2021		2020
Operating activities:
Net loss	$	(40,075)	$	(39,943)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	6,092		6,933
Amortization of debt discount and issuance costs	746		3,448
Share-based compensation	16,776		12,099
Provision for doubtful accounts	(1,690)		5,286
Changes in operating assets and liabilities:
Accounts and unbilled receivables	9,919		5,116
Deferred costs	1,409		1,626
Prepaid expenses and other assets	1,095		323
Operating lease right-of-use assets and liabilities	26		6,122
Accounts payable and other liabilities	899		(2,525)
Accrued liabilities	(201)		(6,623)
Accrued payroll and other employee benefits	(2,975)		(14,979)
Deferred revenue	(1,435)		(23,838)
Net cash used in operating activities	(9,414)		(46,955)
Investing activities:
Purchases of property and equipment	(2,085)		(19,198)
Capitalized internal-use software development costs	—		(806)
Investment in equity securities	(501)		—
Net cash used in investing activities	(2,586)		(20,004)
Financing activities:
Proceeds from employee stock plans	1,596		1,364
Tax withholding related to net share settlement of stock awards	(352)		(20,221)
Net cash provided by (used in) financing activities	1,244		(18,857)
Effect of foreign currency rates on cash	(52)		(104)
Net change in cash and cash equivalents	(10,808)		(85,920)
Cash and cash equivalents:
Beginning of period	329,134		306,077
End of period	$	318,326	$	220,157
Supplemental disclosure of cash flow information:
Noncash investing activities:
Purchase of property and equipment accrued but not paid	$	335	$	3,538

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROS Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

(Unaudited) 

	Three Months Ended June 30, 2021
	Common Stock			Additional Paid-In Capital		Treasury Stock			Accumulated (Deficit) Retained Earnings		Accumulated other comprehensive loss		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance at March 31, 2021	44,252,765	$	49	$	518,338	4,680,723	$	(29,847)	$	(449,472)	$	(4,039)	$	35,029
Stock awards net settlement	86,917	—		—		—	—		—		—		—
Noncash share-based compensation	—	—		8,588		—	—		—		—		8,588
Other comprehensive income (loss)	—	—		—		—	—		—		157		157
Net loss	—	—		—		—	—		(18,046)		—		(18,046)
Balance at June 30, 2021	44,339,682	$	49	$	526,926	4,680,723	$	(29,847)	$	(467,518)	$	(3,882)	$	25,728

	Three Months Ended June 30, 2020
	Common Stock			Additional Paid-In Capital		Treasury Stock			Accumulated (Deficit) Retained Earnings		Accumulated other comprehensive loss		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance at March 31, 2020	43,291,660	$	48	$	548,014	4,680,723	$	(29,847)	$	(384,524)	$	(4,081)	$	129,610
Stock awards net settlement	12,801	—		(49)		—	—		—		—		(49)
Noncash share-based compensation	—	—		5,731		—	—		—		—		5,731
Other comprehensive income (loss)	—	—		—		—	—		—		86		86
Net loss	—	—		—		—	—		(17,208)		—		(17,208)
Balance at June 30, 2020	43,304,461	$	48	$	553,696	4,680,723	$	(29,847)	$	(401,732)	$	(3,995)	$	118,170

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PROS Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Continued)

(In thousands, except share data)

(Unaudited) 

	Six Months Ended June 30, 2021
	Common Stock			Additional Paid-In Capital		Treasury Stock			Accumulated (Deficit) Retained Earnings		Accumulated other comprehensive loss		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance at December 31, 2020	43,461,544	$	48	$	589,040	4,680,723	$	(29,847)	$	(438,773)	$	(3,431)	$	117,037
Stock awards net settlement	836,168	1		(353)		—	—		—		—		(352)
Proceeds from employee stock plans	41,970	—		1,596		—	—		—		—		1,596
Cumulative effect of adoption of ASU 2020-06	—	—		(80,098)		—	—		11,330		—		(68,768)
Noncash share-based compensation	—	—		16,741		—	—		—		—		16,741
Other comprehensive income (loss)	—	—		—		—	—		—		(451)		(451)
Net loss	—	—		—		—	—		(40,075)		—		(40,075)
Balance at June 30, 2021	44,339,682	$	49	$	526,926	4,680,723	$	(29,847)	$	(467,518)	$	(3,882)	$	25,728

	Six Months Ended June 30, 2020
	Common Stock			Additional Paid-In Capital		Treasury Stock			Accumulated (Deficit) Retained Earnings		Accumulated other comprehensive loss		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance at December 31, 2019	42,630,123	$	47	$	560,496	4,680,723	$	(29,847)	$	(361,789)	$	(3,911)	$	164,996
Stock awards net settlement	647,401	1		(20,222)		—	—		—		—		(20,221)
Proceeds from employee stock plans	26,774	—		1,364		—	—		—		—		1,364
Warrant exercise	163	—		—		—	—		—		—		—
Noncash share-based compensation	—	—		12,058		—	—		—		—		12,058
Other comprehensive income (loss)	—	—		—		—	—		—		(84)		(84)
Net loss	—	—		—		—	—		(39,943)		—		(39,943)
Balance at June 30, 2020	43,304,461	$	48	$	553,696	4,680,723	$	(29,847)	$	(401,732)	$	(3,995)	$	118,170

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROS Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization and Nature of Operations

PROS Holdings, Inc., a Delaware corporation, through its operating subsidiaries (collectively, the "Company"), provides software-as-a-service ("SaaS") solutions that optimize shopping and selling experiences. Built on the PROS platform, these intelligent solutions leverage business artificial intelligence ("AI"), intuitive user experiences and process automation to deliver frictionless, personalized purchasing experiences designed to meet the real-time demands of today’s business-to-business ("B2B") and business-to-consumer ("B2C") omnichannel shoppers, regardless of industry. Companies can use these solutions to assess their market environments in real time to deliver customized prices and offers. The Company's solutions enable buyers to move fluidly across its customers’ direct sales, partner, online, mobile and emerging channels with personalized experiences regardless of which channel those buyers choose. The Company's decades of data science and AI expertise are infused into its solutions and are designed to reduce time and complexity through actionable intelligence.

2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial reporting and applicable quarterly reporting regulations of the Securities and Exchange Commission ("SEC"). In management's opinion, the accompanying interim unaudited condensed consolidated financial statements include all adjustments necessary for a fair statement of the financial position of the Company as of June 30, 2021, the results of operations for the three and six months ended June 30, 2021 and 2020, cash flows for the six months ended June 30, 2021 and 2020, and stockholders' equity for the three and six months ended June 30, 2021 and 2020.

Certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 ("Annual Report") filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2020 was derived from the Company's audited consolidated financial statements but does not include all disclosures required under GAAP.

Risks and uncertainties

Since its initial onset in early 2020, the coronavirus ("COVID-19") pandemic has created significant global uncertainty, and compliance with the various containment measures implemented by governmental authorities has impacted the Company's business, as well as the businesses of its customers, suppliers and other counterparties, and the scope and duration of the outbreak and timeframe for economic recovery is uncertain. As there are no comparable recent events that provide guidance as to the long-term effect of the COVID-19 pandemic, the Company is unable to predict the full impact that COVID-19 will have on its results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic and containment measures.

Changes in accounting policies

    There have been no material changes in the Company’s significant accounting policies and their application as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, except for the Company's adoption of certain accounting standards described in more detail under "Recently adopted accounting pronouncements" in this Note 2 below.

Fair value measurement

The Company's financial assets that are included in cash and cash equivalents and that are measured at fair value on a recurring basis consisted of $293.8 million and $301.3 million at June 30, 2021 and December 31, 2020, respectively, and were invested in treasury money market funds. The fair value of the treasury money market funds is determined based on quoted market prices, which represents level 1 in the fair value hierarchy as defined by ASC 820.

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Trade and other receivables

    Trade and other receivables are primarily comprised of trade receivables, net of allowance for doubtful accounts, contract assets and unbilled receivables. The Company records trade accounts receivable for its unconditional rights to consideration arising from the Company's performance under contracts with customers. The Company's standard billing terms are that payment is due upon receipt of invoice, payable generally within thirty to sixty days. The carrying value of such receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. When developing its estimate of expected credit losses on trade and other receivables, the Company considers the available information relevant to assessing the collectability of cash flows, which includes a combination of both internal and external information relating to past events, current conditions, and future forecasts as well as relevant qualitative and quantitative factors that relate to the environment in which the Company operates.

    Contract assets represent conditional rights to consideration that have been recognized as revenue in advance of billing the customer. Unbilled receivables represent unconditional rights to consideration arising from contingent revenue that have been recognized as revenue in advance of billing the customer.

Deferred costs

    Sales commissions earned by the Company's sales representatives are considered incremental and recoverable costs of obtaining a customer contract. Sales commissions are deferred and amortized on a straight-line basis over the period of benefit, which the Company has determined to be five to eight years. The Company determined the period of benefit by taking into consideration its customer contracts, expected renewals of those customer contracts (as the Company currently does not pay an incremental sales commission for renewals), the Company's technology and other factors. The Company also defers amounts earned by employees other than sales representatives who earn incentive payments under compensation plans that are also tied to the value of customer contracts acquired. Deferred costs were $17.1 million and $18.5 million as of June 30, 2021 and December 31, 2020, respectively. Amortization expense for the deferred costs was $1.5 million and $1.4 million for the three months ended June 30, 2021 and 2020, respectively, and $3.1 million and $2.9 million for the six months ended June 30, 2021 and 2020, respectively. Amortization of deferred costs is included in selling and marketing expense in the accompanying unaudited condensed consolidated statements of comprehensive income (loss).

    Deferred implementation costs

    The Company capitalizes certain contract fulfillment costs, including personnel and other costs (such as hosting, employee salaries, benefits and payroll taxes), that are associated with arrangements where professional services are not distinct from other undelivered obligations in its customer contracts. The Company analyzes implementation costs and capitalizes those costs that are directly related to customer contracts, that are expected to be recoverable, and that enhance the resources which will be used to satisfy the undelivered performance obligations in those contracts. Deferred implementation costs are amortized ratably over the remaining contract term once the revenue recognition criteria for the respective performance obligation has been met and revenue recognition commences. Deferred implementation costs were $2.7 million and $2.9 million as of June 30, 2021 and December 31, 2020, respectively. Amortization expense for the deferred implementation costs was $0.3 million and $0.6 million for the three months ended June 30, 2021 and 2020, respectively, and $0.6 million and $1.0 million for the six months ended June 30, 2021 and 2020, respectively. Deferred implementation costs are included in prepaid and other current assets and other assets, noncurrent in the unaudited condensed consolidated balance sheets. Amortization of deferred implementation costs is included in cost of subscription and cost of services revenues in the accompanying unaudited condensed consolidated statements of comprehensive income (loss).

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    Recently adopted accounting pronouncements

    In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options ("Subtopic 470-20") and Derivatives and Hedging - Contracts in an Entity's Own Equity ("Subtopic 815-40"), which simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. This new standard is effective for the Company's interim and annual periods beginning January 1, 2022, and earlier adoption is permitted on January 1, 2021. The Company may elect to apply the amendments on a retrospective or modified retrospective basis. The Company early adopted the new standard effective January 1, 2021 on the modified retrospective basis. The adoption decreased additional paid-in capital by $80.1 million related to the equity conversion component of the outstanding convertible notes which was previously separated and recorded in equity, and increased convertible debt, net by $68.8 million related to the removal of the debt discounts and adjustment of debt issuance cost recorded under the previous standard. The net cumulative effect of the adjustments of $11.3 million was recorded as a decrease to the opening balance of the accumulated deficit as of January 1, 2021. As a result of the adoption the non-cash interest expense was lower for three and six months ended June 30, 2021 and will be lower for the remaining term of the outstanding convertible notes. The adoption had no impact on the condensed consolidated statements of cash flows.

    Recently issued accounting pronouncements not yet adopted

    With the exception of the new standard discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the six months ended June 30, 2021, as compared to the recent accounting pronouncements described in the Company's Annual Report, that are of significance or potential significance to the Company.

3. Deferred Revenue and Performance Obligations

    Deferred Revenue

    For the three months ended June 30, 2021 and 2020, the Company recognized approximately $45.3 million and $48.8 million, respectively, and for the six months ended June 30, 2021 and 2020, the Company recognized approximately $70.3 million and $84.0 million, respectively, of revenue that was included in the deferred revenue balances at the beginning of the respective periods and primarily related to subscription services, maintenance and support, and services.

    Performance Obligations

     As of June 30, 2021, the Company expects to recognize approximately $390.5 million of revenue from remaining performance obligations. The Company expects, based on the terms of the related, underlying contractual arrangements, to recognize revenue on approximately $190.3 million of these performance obligations over the next 12 months, with the balance recognized thereafter. However, as a result of uncertain economic conditions caused by COVID-19, the amount of revenue recognized from the Company's contractual remaining performance obligations could vary and be less than what the Company expects as revenue recognized could be delayed or not occur depending on the ongoing impact of COVID-19.

4. Disaggregation of Revenue

    Revenue by Geography

    The geographic information in the table below is presented for the three and six months ended June 30, 2021 and 2020. The Company categorizes geographic revenues based on the location of the customer's headquarters. Because the Company's contracts are predominately denominated in U.S. dollars, it has limited exposure to foreign currency exchange risk as discussed under "Foreign Currency Exchange Risk" of Part I, Item 3 below.

	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
(in thousands)	Revenue		Percent		Revenue		Percent		Revenue		Percent		Revenue		Percent
United States of America	$	21,875	35	%	$	20,715	32	%	$	42,751	35	%	$	42,515	33	%
Europe	18,562		30	%	17,682		28	%	37,254		30	%	37,612		29	%
The rest of the world	21,964		35	%	25,350		40	%	43,774		35	%	49,931		38	%
Total revenue	$	62,401	100	%	$	63,747	100	%	$	123,779	100	%	$	130,058	100	%

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5. Leases

    The Company has operating leases for data centers, computer infrastructure, corporate offices and certain equipment. These leases have remaining lease terms ranging from 1 year to 12 years. Some of these leases include options to extend for up to 15 years, and some include options to terminate within 1 year.

    As of June 30, 2021, the Company did not have any finance leases.

    Supplemental cash flow information related to leases was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cash paid for operating lease liabilities	$	1,917	$	1,973	$	4,378	$	3,600
Right-of-use asset obtained in exchange for operating lease liability	$	194	$	—	$	291	$	1,759

    As of June 30, 2021, maturities of lease liabilities were as follows (in thousands):

Year Ending December 31,	Amount
Remaining 2021	$	4,894
2022	10,468
2023	11,374
2024	5,383
2025	4,253
2026	4,134
Thereafter	27,726
Total operating lease payments	68,232
Less: Imputed interest	(19,807)
Less: Anticipated lease incentive	(1,385)
Total operating lease liabilities	$	47,040

6. Earnings per Share

    The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2021 and 2020:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2021		2020		2021		2020
Numerator:
Net loss	$	(18,046)	$	(17,208)	$	(40,075)	$	(39,943)
Denominator:
Weighted average shares (basic)	44,321		43,304		44,283		43,203
Dilutive effect of potential common shares	—		—		—		—
Weighted average shares (diluted)	44,321		43,304		44,283		43,203
Basic loss per share	$	(0.41)	$	(0.40)	$	(0.90)	$	(0.92)
Diluted loss per share	$	(0.41)	$	(0.40)	$	(0.90)	$	(0.92)

    Dilutive potential common shares consist of shares issuable upon the settlement of stock appreciation rights ("SARs"), and the vesting of restricted stock units ("RSUs") and market stock units ("MSUs"). Potential common shares determined to be antidilutive and excluded from diluted weighted average shares outstanding were approximately 1.2 million for the three months ended June 30, 2021 and 2020, and 1.3 million and 1.4 million for the six months ended June 30, 2021 and 2020, respectively. In addition, potential common shares related to the convertible notes determined to be antidilutive and excluded from diluted weighted average shares outstanding were 5.8 million for three and six months ended June 30, 2021, and 2.2 million for the three and six months ended June 30, 2020.

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7. Noncash Share-based Compensation

    The Company's 2017 Equity Incentive Plan (as amended and restated, the "2017 Stock Plan") was approved by the Company's stockholders in May 2019 and reserved an aggregate amount of 4,550,000 shares available for issuance. In May 2021, the Company's stockholders approved an amendment to the 2017 Stock Plan increasing the aggregate amount of shares available for issuance to 7,650,000. As of June 30, 2021, 4,047,069 shares remain available for issuance under the 2017 Stock Plan.

    The following table presents the number of shares or units outstanding for each award type as of June 30, 2021 and December 31, 2020, respectively, (in thousands): 

Award type	June 30, 2021	December 31, 2020
Restricted stock units (time-based)	1,869	1,802
Restricted stock units (performance-based)	140	162
Stock appreciation rights	—	28
Market stock units	126	111

During the three months ended June 30, 2021, the Company granted 39,695 RSUs (time-based) with a weighted average grant-date fair value of $38.32 per share.

During the six months ended June 30, 2021, the Company granted 823,589 RSUs (time-based) with a weighted average grant-date fair value of $47.59 per share. The Company also granted 125,541 MSUs with a weighted average grant-date fair value of $56.05 to certain executive employees during the six months ended June 30, 2021. These MSUs vest on January 31, 2024 and the actual number of MSUs that will be eligible to vest is based on the total stockholder return of the Company relative to the total stockholder return of the Index over the performance period, as defined by each award's plan documents or individual award agreements. The maximum number of shares issuable upon vesting is 200% of the MSUs initially granted. The Company did not grant any stock options, SARs or performance-based RSUs during the six months ended June 30, 2021.

The assumptions used to value the MSUs granted during the six months ended June 30, 2021 were as follows:

	June 30, 2021
Volatility	53.29	%
Risk-free interest rate	0.22	%
Expected option life in years	2.97
Dividend yield	—

Share-based compensation expense is allocated to expense categories on the unaudited condensed consolidated statements of comprehensive income (loss). The following table summarizes share-based compensation expense included in the Company's unaudited condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2021 and 2020:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Share-based compensation:
Cost of revenue	$	976	$	502	$	1,802	$	1,026
Operating expenses:
Selling and marketing	2,510		1,965		4,734		3,831
Research and development	2,117		1,368		3,943		2,875
General and administrative	3,003		1,917		6,297		4,367
Total included in operating expenses	7,630		5,250		14,974		11,073
Total share-based compensation expense	$	8,606	$	5,752	$	16,776	$	12,099

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    At June 30, 2021, the Company had an estimated $78.4 million of total unrecognized compensation costs related to share-based compensation arrangements. These costs will be recognized over a weighted average period of 2.8 years.

    The Company's Employee Stock Purchase Plan (as amended, the "ESPP") provides for eligible employees to purchase shares on an after-tax basis in an amount between 1% and 10% of their annual pay: (i) on June 30 of each year at a 15% discount of the fair market value of the Company's common stock on January 1 or June 30, whichever is lower, and (ii) on December 31 of each year at a 15% discount of the fair market value of the Company's common stock on July 1 or December 31, whichever is lower. An employee may not purchase more than $5,000 in either of the six-month measurement periods described above or more than $10,000 annually. In May 2021, the Company's stockholders approved an amendment to the ESPP Plan increasing the aggregate amount of shares available for issuance under the ESPP to 1,000,000. During the three and six months ended June 30, 2021, the Company issued zero and 41,970 shares under the ESPP, respectively. As of June 30, 2021, 532,824 shares remain authorized and available for issuance under the ESPP. As of June 30, 2021, the Company held approximately $1.5 million on behalf of employees for future purchases under the ESPP, and this amount was recorded in accrued payroll and other employee benefits in the Company's unaudited condensed consolidated balance sheet.

8. Convertible Senior Notes

    The following is a summary of the Company's convertible senior notes as of June 30, 2021 (in thousands):

	Date of Issuance	Unpaid Principal Balance		Net Carrying Amount				Contractual Interest Rates
				Current		Noncurrent
1% Convertible Notes due in 2024 ("2024 Notes")	May 2019	$	143,750	$	—	$	141,210	1%
2.25% Convertible Notes due in 2027 ("2027 Notes")	September 2020	$	150,000	$	—	$	146,332	2.25%

The 2027 and 2024 Notes (collectively, the "Notes") are general unsecured obligations and rank senior in right of payment to all of the Company's indebtedness that is expressly subordinated in right of payment to the Notes, rank equally in right of payment with all of the Company's existing and future liabilities that are not so subordinated, are effectively junior to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all indebtedness and other liabilities of the Company's subsidiaries (including trade payables but excluding intercompany obligations owed to the Company or its subsidiaries).

Interest related to the 2027 Notes is payable semiannually in arrears in cash on March 15 and September 15 of each year, beginning on March 15, 2021. Interest related to the 2024 Notes is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2019. The 2027 Notes mature on September 15, 2027 and the 2024 Notes mature on May 15, 2024, unless redeemed or converted in accordance with their terms prior to such date.

Each $1,000 of principal of the 2027 Notes will initially be convertible into 23.9137 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $41.82 per share. Each $1,000 of principal of the 2024 Notes will initially be convertible into 15.1394 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $66.05 per share. The initial conversion price for the 2027 and the 2024 Notes is subject to adjustment upon the occurrence of certain specified events.

As of June 30, 2021, the 2027 and 2024 Notes are not yet convertible and their remaining term is approximately 74 months and 34 months, respectively.

As of June 30, 2021 and December 31, 2020, the fair value of the principal amount of the Notes in the aggregate was $342.9 million and $363.8 million, respectively. The estimated fair value was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including the Company's stock price and interest rates, which represents level 2 in the fair value hierarchy.

Effective January 1, 2021, the Company early adopted ASU 2020-06, Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in an Entity's Own Equity. Upon adoption of the new standard, the Company removed the debt discount and adjusted the debt issuance cost which was previously allocated between the liability and the equity component, resulting in an increase of $68.8 million to convertible debt, net. In addition, the Company recorded a reduction to additional paid-in capital of $80.1 million related to the equity conversion component of the outstanding convertible notes which was previously separated and recorded in equity. The net cumulative impact of the adoption of the standard was recorded as a decrease to accumulated deficit.

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The Notes consist of the following (in thousands):

	June 30, 2021		December 31, 2020
Liability component:
Principal	$	293,750	$	293,750
Less: debt discount and issuance cost, net of amortization	(6,208)		(75,722)
Net carrying amount	$	287,542	$	218,028
Equity component(1)	$	—	$	80,098

(1)     Recorded within additional paid-in capital in the unaudited condensed consolidated balance sheet. As of December 31, 2020, it included $47.2 million and $32.9 million related to the 2027 and 2024 Notes, respectively, which was net of $1.3 million and $1.1 million issuance cost in equity, respectively.

The following table sets forth total interest expense recognized related to the Notes (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Coupon interest	$	1,203	$	359	$	2,406	$	719
Amortization of debt issuance costs	373		158		746		314
Amortization of debt discount	—		1,568		—		3,114
Total	$	1,576	$	2,085	$	3,152	$	4,147

    Capped Call Transactions

    In September 2020 and in May 2019, in connection with the offering of the 2027 and 2024 Notes, respectively, the Company entered into privately negotiated capped call transactions (collectively, the "Capped Call") with certain option counterparties. The Capped Call transactions cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock initially underlying the Notes, at a strike price that corresponds to the initial conversion price of the Notes, also subject to adjustment, and are exercisable upon conversion of the Notes. The Capped Call transactions are intended to reduce potential dilution to the Company’s common stock and/or offset any cash payments the Company will be required to make in excess of the principal amounts upon any conversion of Notes, and to effectively increase the overall conversion price of the 2027 Notes from $41.82 to $78.90 per share, and for the 2024 Notes from $66.05 to $101.62 per share. As the Capped Call transactions meet certain accounting criteria, they are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of the Capped Call was $25.3 million and $16.4 million for the 2027 and 2024 Notes, respectively, and was recorded as part of additional paid-in capital.

9. Commitments and Contingencies

    Litigation

    In the ordinary course of business, the Company regularly becomes involved in contract and other negotiations and, in more limited circumstances, becomes involved in legal proceedings, claims and litigation. The outcomes of these matters are inherently unpredictable. The Company is not currently involved in any outstanding litigation that it believes, individually or in the aggregate, will have a material adverse effect on its business, financial condition, results of operations or cash flows.

Purchase commitments

In the ordinary course of business, the Company enters into various purchase commitments for goods and services.

In March 2019, the Company entered into a noncancelable agreement with a computing infrastructure vendor that amended the existing agreement dated June 2017. The amended agreement expires in March 2022. The purchase commitment as of June 30, 2021 was $24.9 million for the remaining period through the expiration of the agreement.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    The terms “we,” “us,” “PROS” and “our” refer to PROS Holdings, Inc. and all of its subsidiaries that are consolidated in conformity with generally accepted accounting principles in the United States.

    This management's discussion and analysis of financial condition and results of operations should be read along with the unaudited condensed consolidated financial statements and unaudited notes to unaudited condensed consolidated financial statements included in Part I, Item 1 ("Interim Condensed Consolidated Financial Statements (Unaudited)"), as well as the audited consolidated financial statements and notes to consolidated financial statements and management's discussion and analysis of financial condition and results of operations set forth in our Annual Report.

Q2 2021 Financial Overview

For the three and six months ended June 30, 2021, our revenue was impacted by last year's lower customer subscription bookings, project delays and a decrease in revenue retention rates as a result of the COVID-19 pandemic. Our prior year new customer subscription bookings impacted this year’s subscription revenue growth given the lag between subscription bookings and the revenue recognized on those subscription bookings. As a result, our subscription revenue increased 4% and 2% for the three and six months ended June 30, 2021, respectively, as compared to the same periods in 2020, and our total revenue decreased 2% and 5% for the three and six months ended June 30, 2021, respectively, as compared to the same periods in 2020. Recurring revenue (which consists of subscription revenue and maintenance and support revenue) as a percentage of total revenue accounted for 85% of total revenue for the three and six months ended June 30, 2021 as compared to 85% and 84% for the three and six months ended June 30, 2020, respectively.

Cash used in operating activities was $9.4 million for the six months ended June 30, 2021, as compared to $47.0 million for the six months ended June 30, 2020. The improvement was primarily attributable to several customers during the first half of 2020 deferring payments as a result of COVID-19 as well as to a lower annual incentive payment in 2021 as compared to prior year.

Free cash flow is another key metric to assess the strength of our business. We define free cash flow, a non-GAAP financial measure, as net cash provided by (used in) operating activities minus capital expenditures (excluding expenditures for our new headquarters), purchases of other (non-acquisition-related) intangible assets and capitalized internal-use software development costs. We believe free cash flow may be useful to investors and other users of our financial information in evaluating the amount of cash generated by our business operations. Free cash flow used during the three months ended June 30, 2021 was $5.7 million, compared to $23.5 million for the three months ended June 30, 2020. Free cash flow used during the six months ended June 30, 2021 was $10.4 million, compared to $49.0 million for the six months ended June 30, 2020. This improvement was primarily due to a $37.5 million decrease in net cash used in operating activities mainly attributable to several customers during the first half of 2020 deferring payments as a result of COVID-19 as well as to a lower annual incentive payment in 2021 as compared to prior year. The following is a reconciliation of free cash flow to the most comparable GAAP measure, net cash used in operating activities (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net cash used in operating activities	$	(4,985)	$	(22,782)	$	(9,414)	$	(46,955)
Purchase of property and equipment (excluding new headquarters)	(741)		(306)		(944)		(1,263)
Capitalized internal-use software development costs	—		(394)		—		(806)
Free Cash Flow	$	(5,726)	$	(23,482)	$	(10,358)	$	(49,024)

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Factors Affecting Our Performance

    Key factors and trends that have affected, and we believe will continue to affect, our operating results include:

•COVID-19 Global Impact. The duration of the COVID-19 pandemic remains uncertain, and the pace and timeframe for recovery from the economic impact of COVID-19 continues to vary across the countries and industries in which we do business. The travel industry, a sector served by our solutions, was particularly adversely impacted by unprecedented declines in travel demand in 2020, forcing airlines to respond by significantly reducing capacity, grounding flights, reducing personnel and other costs, adjusting corporate liquidity and, in certain cases, filing for bankruptcy protection. The timeline for recovery of the travel industry remains fluid and dynamic, with significant geographic variation. For example, while airline travel demand in the United States has shown early signs of recovery in 2021 as COVID-19 vaccination rates increase, we expect international travel demand to recover more slowly due to ongoing international travel restrictions as vaccination rates vary significantly by geography. While COVID-19 has accelerated existing trends with respect to digital commerce as explained below, the economic impact and uncertainty attributable to the pandemic has affected our business, also as explained below. The global workplace environment has also substantially changed in the wake of COVID-19. To support the health and well-being of our employees, customers, partners and communities, our global workforce has been primarily working remotely since March 2020; although we have opened our offices where permitted for employees who choose to work in the office. Many of our customers are also continuing to work remotely, which in some cases has delayed, and may continue to impact the timing of new business and implementations of our solutions. The duration and extent of the impact of COVID-19 continues to be unknown and could continue to impact the pace and timing of adoption and implementation of our solutions, cash flow from operations and customer retention. For a full discussion on the risks and uncertainties to our business associated with COVID-19, please see the Risk Factors section of our Annual Report on Form 10-K.

•COVID-19 Financial Impact. Given our primarily subscription-based revenue model, the global economic impact of COVID-19 in 2020 on new customer bookings, revenue retention, contract restructuring, and project delays adversely impacted our revenue in the first half of 2021. Our prior year new customer subscription bookings impacted this year’s subscription revenue growth given the lag between subscription bookings and the revenue recognized on those subscription bookings. Although we supported certain customers who requested concessions during 2020 by deferring payments, we have since collected a substantial majority of the amounts associated with these concessions, as evidenced by our strong cash collections in the first half of 2021. We expect the ongoing global economic impact of COVID-19 will continue to impact our revenue in 2021, as the continuing impact of COVID-19 and rate of economic recovery remains uncertain and varies across industries and geographies.

•Buying Preferences Driving Technology Adoption. Corporate buyers are increasingly demanding the same type of digital buying experience that they enjoy as consumers. Buyers often prefer not to interact with sales representatives as their primary source of research, and increasingly prefer to buy online when they have already decided what to buy. This trend has accelerated as a result of the COVID-19 pandemic. In response, we believe that businesses are increasingly modernizing their sales process to compete in digital commerce by adopting technologies which provide fast, frictionless, and personalized buying experiences across sales channels. We believe we are uniquely positioned to help power these buying experiences with our AI-powered solutions that enable buyers to move fluidly and with personalized experiences across our customers’ direct sales, online, mobile and partner channels.

•Continued Investments. As a result of the economic impact of COVID-19, we are continuing to be measured in our investments and focused on cost control efforts across our organization, while continuing to create awareness for our solutions, expand our customer base and grow our subscription revenues. While we incurred losses in 2020 and in the first half of 2021, we believe our market is large and underpenetrated and intend to continue investing in sales, marketing, customer success, cloud support, security, privacy, infrastructure and other long-term initiatives to expand our ability to sell and renew our subscription offerings globally. We also plan to continue investing in product development to enhance our existing technologies, including initiatives to accelerate customer time-to-value and provide out-of-the-box integration with third-party commerce solutions, and develop new applications and technologies.

•Cloud Migrations. Sales of our cloud-based solutions have, and we expect future sales of our cloud-based solutions will continue to reduce our future maintenance and support revenue, as long-term customers continue to migrate from our legacy licensed solutions to our current cloud solutions.

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Results of Operations

The following table sets forth certain items in our unaudited condensed consolidated statements of comprehensive income (loss) as a percentage of total revenues for the three and six months ended June 30, 2021 and 2020:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue:
Subscription	71	%	66	%	70	%	66	%
Maintenance and support	14		18		15		19
Total subscription, maintenance and support	85		85		85		84
Services	15		15		15		16
Total revenue	100		100		100		100
Cost of revenue:
Subscription	22		19		22		19
Maintenance and support	3		4		4		4
Total cost of subscription, maintenance and support	25		24		26		24
Services	17		17		17		18
Total cost of revenue	42		41		43		42
Gross profit	58		59		57		58
Operating Expenses:
Selling and marketing	34		33		35		35
Research and development	32		29		33		29
General and administrative	18		21		20		22
Total operating expenses	84		83		87		86
Convertible debt interest and amortization	(3)		(3)		(3)		(3)
Other income net	—		—		—		1
Loss before income tax provision	(29)		(27)		(32)		(30)
Income tax provision	—		—		—		—
Net loss	(29)	%	(27)	%	(32)	%	(31)	%

    Revenue:

	Three Months Ended June 30,				Variance				Six Months Ended June 30,				Variance
(Dollars in thousands)	2021		2020		$		%		2021		2020		$		%
Subscription	$	44,224	$	42,377	$	1,847	4	%	$	86,872	$	85,547	$	1,325	2	%
Maintenance and support	8,570		11,741		(3,171)		(27)	%	18,244		24,264		(6,020)		(25)	%
Total subscription, maintenance and support	52,794		54,118		(1,324)		(2)	%	105,116		109,811		(4,695)		(4)	%
Services	9,607		9,629		(22)		—	%	18,663		20,247		(1,584)		(8)	%
Total revenue	$	62,401	$	63,747	$	(1,346)	(2)	%	$	123,779	$	130,058	$	(6,279)	(5)	%

Subscription revenue. Subscription revenue increased primarily due to an increase in the sale of new and existing customer subscription contracts as compared to prior year. Our ability to manage customer attrition rates will directly impact our ability to continue to grow our subscription revenue. Due to the uncertainty over how long the economic conditions caused by the COVID-19 pandemic will persist, we expect subscription revenue to grow at a slower pace than what we have historically experienced.

Maintenance and support revenue. Maintenance and support revenue decreased primarily as result of existing maintenance customers migrating to our cloud solutions and a decrease in customer retention due to the impact of COVID-19. We expect maintenance revenue to continue to decline as we continue to migrate maintenance customers to our cloud solutions.

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Services revenue. Services revenue remained flat for the three months ended June 30, 2021. Services revenue decreased for the six months ended June 30, 2021 primarily as a result of the timing of services recognition related to our subscription contracts as compared to the same period in 2020 due to the impact of COVID-19. Services revenue varies from period to period depending on different factors, including the level of professional services required to implement our solutions, the timing of services revenue recognition on certain subscription contracts and any additional professional services requested by our customers during a particular period.

    Cost of revenue and gross profit:

	Three Months Ended June 30,				Variance				Six Months Ended June 30,				Variance
(Dollars in thousands)	2021		2020		$		%		2021		2020		$		%
Cost of subscription	$	13,589	$	12,392	$	1,197	10	%	$	27,390	$	25,256	$	2,134	8	%
Cost of maintenance and support	2,157		2,610		(453)		(17)	%	4,415		5,400		(985)		(18)	%
Total cost of subscription, maintenance and support	15,746		15,002		744		5	%	31,805		30,656		1,149		4	%
Cost of services	10,658		10,948		(290)		(3)	%	21,091		24,021		(2,930)		(12)	%
Total cost of revenue	26,404		25,950		454		2	%	52,896		54,677		(1,781)		(3)	%
Gross profit	$	35,997	$	37,797	$	(1,800)	(5)	%	$	70,883	$	75,381	$	(4,498)	(6)	%

Cost of subscription. Cost of subscription increased primarily due to increased infrastructure costs to support our current subscription customer base. Our subscription gross profit percentages were 69% and 71% for the three months ended June 30, 2021 and 2020, respectively, and 68% and 70% for the six months ended June 30, 2021 and 2020, respectively.

Cost of maintenance and support. Cost of maintenance and support decreased primarily due to a decrease in personnel costs as a result of the need to support a declining maintenance customer base as we migrate customers to our subscription solutions, and a decrease in amortization expense related to intangible assets which were fully amortized in 2021. Maintenance and support gross profit percentages were 75% and 78% for the three months ended June 30, 2021 and 2020, respectively, and 76% and 78% for the six months ended June 30, 2021 and 2020, respectively.

Cost of services. Cost of services decreased for the three and six months ended June 30, 2021 primarily due to the lower utilization of third-party contractors and reduced travel expenses due to the COVID-19 pandemic. Services gross profit percentages were (11)% and (14)% for the three months ended June 30, 2021 and 2020, respectively, and (13)% and (19)% for the six months ended June 30, 2021 and 2020, respectively. Services gross profit percentages for the three and six months ended June 30, 2021 improved primarily as a result of a decrease in utilization of higher cost third-party contractors. Services gross profit percentages vary period to period depending on different factors, including the level of professional services required to implement our solutions, our mix of utilization of employees or third-party contractors and our effective man-day rates.

Gross profit. Gross profit for the three and six months ended June 30, 2021 decreased primarily due to the decrease in total revenue as compared to the same period in 2020.

Operating expenses:

	Three Months Ended June 30,				Variance				Six Months Ended June 30,				Variance
(Dollars in thousands)	2021		2020		$		%		2021		2020		$		%
Selling and marketing	$	21,190	$	21,011	$	179	1	%	$	42,754	$	45,931	$	(3,177)	(7)	%
Research and development	20,095		18,397		1,698		9	%	40,553		37,533		3,020		8	%
General and administrative	11,018		13,528		(2,510)		(19)	%	24,472		28,408		(3,936)		(14)	%
Total operating expenses	$	52,303	$	52,936	$	(633)	(1)	%	$	107,779	$	111,872	$	(4,093)	(4)	%

Selling and marketing expenses. Sales and marketing expenses remained relatively unchanged for the three months ended June 30, 2021. Sales and marketing expenses decreased for the six months ended June 30, 2021 primarily due to a decrease of $1.9 million for sales and marketing events and a decrease in travel expenses of $1.6 million due to the COVID-19 pandemic, partially offset by an increase of $0.3 million in overhead and other costs.

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Research and development expenses. Research and development expenses increased for the three and six months ended June 30, 2021 primarily due to an increase in employee-related costs, including increases of $0.7 million and $1.1 million of non-cash share-based compensation for the three and six months ended June 30, 2021, respectively.

General and administrative expenses. General and administrative expenses decreased primarily due to a $1.1 million and $1.7 million reduction in bad debt expense during the three and six months ended June 30, 2021, respectively, due to improved credit conditions with certain customers. The decrease was partially offset by an increase in employee-related costs, including increases of $1.1 million and $1.9 million of non-cash share-based compensation for the three and six months ended June 30, 2021, respectively.

Other income, net:

	Three Months Ended June 30,				Variance				Six Months Ended June 30,				Variance
(Dollars in thousands)	2021		2020		$		%		2021		2020		$		%
Convertible debt interest and amortization	$	(1,576)	$	(2,085)	$	509	(24)	%	$	(3,152)	$	(4,147)	$	995	(24)	%
Other income, net	$	4	$	146	$	(142)	(97)	%	$	290	$	977	$	(687)	(70)	%

Convertible debt interest and amortization. Convertible debt expense for the three and six months ended June 30, 2021 and 2020 related to coupon interest and amortization of debt discount and issuance costs attributable to our Notes. Convertible debt interest and amortization decreased primarily as a result of the adoption of ASU 2020-06 on January 1, 2021. Upon adoption, there was no longer a debt discount on our outstanding notes and as a result the related amortization cost was no longer recognized in 2021.

Other income, net. The change in other income, net for the three and six months ended June 30, 2021, primarily related to a decrease in interest income partially offset by foreign currency impact during the period.

    Income tax provision:

	Three Months Ended June 30,						Variance				Six Months Ended June 30,						Variance
(Dollars in thousands)	2021			2020			$		%		2021			2020			$		%
Effective tax rate	(0.9)		%	(0.8)		%	n/a		n/a		(0.8)		%	(0.7)		%	n/a		n/a
Income tax provision	$	168		$	130		$	38	29	%	$	317		$	282		$	35	12	%

Income tax provision. The tax provision for the three and six months ended June 30, 2021 included both foreign income and withholding taxes. No tax benefit was recognized on jurisdictions with a projected loss for the year due to the valuation allowances on our deferred tax assets.

Our effective tax rate was (0.9)% and (0.8)% for the three and six months ended June 30, 2021, respectively, and (0.8)% and (0.7)% for the three and six months ended June 30, 2020, respectively. The income tax rate varies from the 21% federal statutory rate primarily due to the valuation allowances on our deferred tax assets. While our expected tax rate would be 0% due to the full valuation allowance on our deferred tax assets, the income tax provision and related effective tax rates is due to foreign income and withholding taxes.

Jurisdictions with a projected loss for the year where no tax benefit can be recognized due to the valuation allowances on our deferred tax assets are excluded from the estimated annual federal effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections.

Liquidity and Capital Resources

At June 30, 2021, we had $318.3 million of cash and cash equivalents and $226.8 million of working capital as compared to $329.1 million of cash and cash equivalents and $246.4 million of working capital at December 31, 2020.

Our principal sources of liquidity are our cash and cash equivalents, cash flows generated from operations and potential borrowings under our $50 million secured Credit Agreement ("Revolver") with the lenders party thereto and Wells Fargo Bank, National Association as agent for the lenders party thereto. The facility expires in July 2022. In addition, we could

20

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issue convertible senior notes to supplement our overall liquidity position. Our material drivers or variants of operating cash flow are net income (loss), noncash expenses (principally share-based compensation, intangible amortization and amortization of debt discount and issuance costs) and the timing of periodic invoicing and cash collections from customer revenue. Our operating cash flows are also impacted by the timing of payments to our vendors and the payments of our other liabilities.

    We believe our existing cash, cash equivalents, including funds available under our Revolver and our current estimates of future operating cash flows, will provide adequate liquidity and capital resources to meet our operational requirements, anticipated capital expenditures and coupon interest payments for our Notes for the next twelve months. Our future working capital requirements will depend on many factors, including the operations of our existing business, potential growth of our subscription services, future acquisitions we might undertake, expansion into complementary businesses, and the impact of COVID-19, including the pace and timing of adoption and implementation of our solutions and customer churn. During the period of uncertainty and volatility related to COVID-19, we will continue to monitor our liquidity.

    The following table presents key components of our unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020: 

	Six Months Ended June 30,
(Dollars in thousands)	2021		2020
Net cash used in operating activities	$	(9,414)	$	(46,955)
Net cash used in investing activities	(2,586)		(20,004)
Net cash provided by (used in) financing activities	1,244		(18,857)
Cash and cash equivalents (beginning of period)	329,134		306,077
Cash and cash equivalents (end of period)	$	318,326	$	220,157

Operating Activities

    Net cash used in operating activities for the six months ended June 30, 2021 was $9.4 million. The $37.5 million improvement over last year was primarily attributable to several customers during the first half of 2020 deferring payments as a result of COVID-19 as well as to a lower annual incentive payment in 2021 as compared to prior year.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2021 was $2.6 million, which was primarily related to capital expenditures of $2.1 million mainly attributable to the build out of our new headquarters which was committed prior to the pandemic and $0.5 million investment in equity securities. The build out of our new headquarters mainly occurred in fiscal year 2020 and as a result capital expenditures decreased in the first half of 2021.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2021 was $1.2 million, which was attributable to proceeds from employee stock plans of $1.6 million, partially offset by $0.4 million paid for tax withholdings on vesting of employee share-based awards. Tax withholdings on vesting of employee share-based awards decreased significantly in the first half of 2021 as compared to prior year as a result of a sell-to-cover taxes program established in late 2020 for 2021 employee vested share-based awards.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material. We do not have any relationships with unconsolidated entities or financial partnerships, such as variable interest entities, that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Contractual Obligations and Commitments

    Other than changes described in Note 9 above, there have been no material changes to our contractual obligations and commitments disclosed in our Annual Report.

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Credit facility

There were no outstanding borrowings under the Revolver as of June 30, 2021. As of June 30, 2021, we had $0.1 million of unamortized debt issuance costs related to the Revolver included in prepaids and other current assets and other long-term assets in the unaudited condensed consolidated balance sheets. For the three and six months ended June 30, 2021 and 2020, we recorded an immaterial amount of amortization of debt issuance cost which is included in other income, net in the unaudited condensed consolidated statements of comprehensive income (loss).

Recent Accounting Pronouncements

    See "Recently adopted accounting pronouncements" in Note 2 above for discussion of recent accounting pronouncements including the respective expected dates of adoption.

Critical accounting policies and estimates

    Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. Actual results could differ from those estimates. The complexity and judgment required in our estimation process, as well as issues related to the assumptions, risks and uncertainties inherent in determining the nature and timing of satisfaction of performance obligations and determining the standalone selling price of performance obligations, affect the amounts of revenue, expenses, unbilled receivables and deferred revenue. Estimates are also used for, but not limited to, receivables, allowance for doubtful accounts, operating lease right-of-use assets and operating lease liabilities, useful lives of assets, depreciation, income taxes and deferred tax asset valuation, valuation of stock options, other current liabilities and accrued liabilities. Numerous internal and external factors can affect estimates. Our critical accounting policies related to the estimates and judgments are discussed in our Annual Report under management's discussion and analysis of financial condition and results of operations.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange Risk

    Although our contracts are predominately denominated in U.S. dollars, we are exposed to foreign currency exchange risk because we also have some contracts denominated in foreign currencies. The effect of a hypothetical 10% adverse change in exchange rates on our foreign denominated receivables as of June 30, 2021 would result in a loss of approximately $0.6 million. We are also exposed to foreign currency risk due to our operating subsidiaries in France, United Kingdom, Canada, Germany, Ireland, Australia, Bulgaria and United Arab Emirates. A hypothetical 10% adverse change in the value of the U.S. dollar in relation to the euro, which is our single most significant foreign currency exposure, would have decreased revenue for the three and six months ended June 30, 2021 by approximately $0.5 million and $1.0 million, respectively. However, due to the relatively low volume of payments made and received through our foreign subsidiaries, we do not believe that we have significant exposure to foreign currency exchange risks. Fluctuations in foreign currency exchange rates could harm our financial results in the future.

    We currently do not use derivative financial instruments to mitigate foreign currency exchange risks. We continue to review this matter and may consider hedging certain foreign exchange risks through the use of currency derivatives in future years.

Interest Rate Risk

    We are exposed to market risk for changes in interest rates related to the variable interest rate on borrowings under the Revolver. As of June 30, 2021, we had no borrowings under the Revolver.

    As of June 30, 2021, we had outstanding principal amounts of $150.0 million and $143.8 million of the 2027 and the 2024 Notes, respectively, which are fixed rate instruments. Therefore, our results of operations are not subject to fluctuations in interest rates. The fair value of the Notes may change when the market price of our stock fluctuates.

    We believe that we do not have any material exposure to changes in the fair value as a result of changes in interest rates due to the short-term nature of our cash equivalents.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

    Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) as of June 30, 2021. Based on our evaluation of our disclosure controls and procedures as of June 30, 2021, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

    During the first quarter of 2021, the Company completed the implementation of a new enterprise resource planning ("ERP") system and the internal controls have been updated to reflect the change. There have been no other changes in our internal control over financial reporting during the three months ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that our employees are working remotely due to COVID-19. We are continually monitoring and assessing the impact of COVID-19 on our internal controls to minimize the impact on their design and operating effectiveness.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are a party to legal proceedings and claims arising in the ordinary course of business. We are not currently aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition, results of operations or cash flows.

ITEM 1A. RISK FACTORS

    There have been no material changes in the Company's risk factors from those disclosed in Part I, Item 1A, of our Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We have an ongoing authorization from our board of directors to repurchase up to $15.0 million in shares of our common stock in the open market or through privately negotiated transactions. As of June 30, 2021, $10.0 million remained available for repurchase under the existing repurchase authorization. We did not make any purchases of our common stock under this program for the three months ended June 30, 2021.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Index to Exhibits
		Provided	Incorporated by Reference
Exhibit No.	Description	Herewith	Form	Filing Date
31.1	Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a).	X
31.2	Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/ 15d-14(a).	X
32.1*	Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.	X
Exhibit No.	Description
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

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* This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, or otherwise subject to the liability of that Section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		PROS HOLDINGS, INC.
August 3, 2021	By:	/s/ Andres Reiner
		Andres Reiner
		President and Chief Executive Officer (Principal Executive Officer)
August 3, 2021	By:	/s/ Stefan Schulz
		Stefan Schulz
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

26

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Andres Reiner, certify that:

1.I have reviewed this quarterly report on Form 10-Q of PROS Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 3, 2021	/s/ Andres Reiner
	Andres Reiner
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stefan Schulz, certify that:

1.I have reviewed this quarterly report on Form 10-Q of PROS Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 3, 2021	/s/ Stefan Schulz
	Stefan Schulz
	Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Andres Reiner, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of PROS Holdings, Inc., on Form 10-Q for the period ended June 30, 2021 fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PROS Holdings, Inc.

August 3, 2021	/s/ Andres Reiner
	Andres Reiner
	President and Chief Executive Officer

I, Stefan Schulz, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of PROS Holdings, Inc., on Form 10-Q for the period ended June 30, 2021 fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PROS Holdings, Inc. 

August 3, 2021	/s/ Stefan Schulz
	Stefan Schulz
	Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to PROS Holdings, Inc. and will be retained by PROS Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. This certification "accompanies" the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Jul. 27, 2021
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Document Transition Report	false
Entity File Number	001-33554
Entity Registrant Name	PROS HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	76-0168604
Entity Address, Address Line One	3200 Kirby Drive, Suite 600
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77098
City Area Code	(713)
Local Phone Number	335-5151
Title of 12(b) Security	Common stock $0.001 par value per share
Trading Symbol	PRO
Security Exchange Name	NYSE
Entity Central Index Key	0001392972
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		44,378,704
Former Address [Member]
Entity Information [Line Items]
Entity Address, Address Line One
Entity Address, City or Town
Entity Address, State or Province
Entity Address, Postal Zip Code

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 318,326	$ 329,134
Trade and Other Receivables, Net, Current	41,295	49,578
Deferred Costs, Current	5,879	5,941
Prepaid and other current assets	9,376	9,647
Total current assets	374,876	394,300
Property and equipment, net	34,267	36,504
Operating Lease, Right-of-Use Asset	27,632	30,689
Deferred Costs, Noncurrent	11,196	12,544
Intangible Assets, Net (Excluding Goodwill)	6,596	8,341
Goodwill	49,698	50,044
Other long term assets, net	7,238	7,549
Total assets	511,503	539,971
Current liabilities:
Accounts payable	5,265	4,246
Accrued liabilities	12,786	13,065
Accrued payroll and other employee benefits	22,543	25,514
Operating Lease, Liability, Current	6,203	5,937
Deferred Revenue, Current	101,235	99,156
Total current liabilities	148,032	147,918
Long-term deferred revenue	7,896	11,372
Convertible Debt, Noncurrent	287,542	218,028
Operating Lease, Liability, Noncurrent	40,837	44,099
Other Liabilities, Noncurrent	1,468	1,517
Total liabilities	485,775	422,934
Commitments and contingencies (see Note 9)
Stockholders' equity:
Preferred Stock, Value, Issued	0	0
Common Stock, Value, Issued	49	48
Additional paid-in capital	526,926	589,040
Treasury Stock, Value	(29,847)	(29,847)
Retained Earnings (Accumulated Deficit)	(467,518)	(438,773)
Accumulated Other Comprehensive Income (Loss), Net of Tax	(3,882)	(3,431)
Total stockholders' equity	25,728	117,037
Total liabilities and stockholders' equity	$ 511,503	$ 539,971
Preferred stock - shares authorized	5,000,000	5,000,000
Preferred stock - par value	$ 0.001	$ 0.001
Preferred stock - shares issued	0	0
Common stock - shares authorized	75,000,000	75,000,000
Common stock - par value	$ 0.001	$ 0.001
Treasury stock - shares	4,680,723	4,680,723

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Allowance for bad debts	$ 1,182,000	$ 4,122,000
Preferred stock - par value	$ 0.001	$ 0.001
Preferred stock - shares authorized	5,000,000	5,000,000
Preferred stock - shares issued	0	0
Common stock - par value	$ 0.001	$ 0.001
Common stock - shares authorized	75,000,000	75,000,000
Common stock - shares issued	49,020,405	48,142,267
Common stock - shares outstanding	44,339,682	43,461,544
Treasury stock - shares	4,680,723	4,680,723

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenue from Contract with Customer, Including Assessed Tax	$ 62,401	$ 63,747	$ 123,779	$ 130,058
Cost of Goods and Services Sold	26,404	25,950	52,896	54,677
Gross Profit	35,997	37,797	70,883	75,381
Operating Expenses
Selling and Marketing Expense	21,190	21,011	42,754	45,931
General and Administrative Expense	11,018	13,528	24,472	28,408
Research and development	20,095	18,397	40,553	37,533
Income from operations	(16,306)	(15,139)	(36,896)	(36,491)
Other income (expense):
Convertible debt interest and amortization	(1,576)	(2,085)	(3,152)	(4,147)
Other Nonoperating Income (Expense)	4	146	290	977
Loss before income tax provision	(17,878)	(17,078)	(39,758)	(39,661)
Income tax provision (benefit)	168	130	317	282
Net income (loss)	$ (18,046)	$ (17,208)	$ (40,075)	$ (39,943)
Earnings Per Share, Basic	$ (0.41)	$ (0.40)	$ (0.90)	$ (0.92)
Net earnings (loss) per share:
Earnings Per Share, Basic and Diluted	(0.41)	(0.40)	(0.90)	(0.92)
Earnings Per Share, Diluted	$ (0.41)	$ (0.40)	$ (0.90)	$ (0.92)
Weighted average number of shares:
Weighted Average Number of Shares Outstanding, Basic and Diluted	44,321	43,304	44,283	43,203
Weighted Average Number of Shares Outstanding, Basic	44,321	43,304	44,283	43,203
Other comprehensive income, net of tax:
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	$ 157	$ 86	$ (451)	$ (84)
Other comprehensive income	157	86	(451)	(84)
Comprehensive income (loss)	(17,889)	(17,122)	(40,526)	(40,027)
Accumulated Other Comprehensive Income, net of tax [Member]
Other comprehensive income, net of tax:
Other comprehensive income	157	86	(451)	(84)
Subscription and Circulation [Member]
Revenue from Contract with Customer, Including Assessed Tax	44,224	42,377	86,872	85,547
Cost of Goods and Services Sold	13,589	12,392	27,390	25,256
Maintenance [Member]
Revenue from Contract with Customer, Including Assessed Tax	8,570	11,741	18,244	24,264
Cost of Goods and Services Sold	2,157	2,610	4,415	5,400
Subscription, maintenance and support
Revenue from Contract with Customer, Including Assessed Tax	52,794	54,118	105,116	109,811
Cost of Goods and Services Sold	15,746	15,002	31,805	30,656
Service [Member]
Revenue from Contract with Customer, Including Assessed Tax	9,607	9,629	18,663	20,247
Cost of Goods and Services Sold	$ 10,658	$ 10,948	$ 21,091	$ 24,021

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Operating activities:
Net income (loss)	$ (40,075,000)	$ (39,943,000)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, Depletion and Amortization	6,092,000	6,933,000
Amortization of Financing Costs and Discounts	746,000	3,448,000
Share-based compensation	16,776,000	12,099,000
Provision for doubtful accounts	(1,690,000)	5,286,000
Changes in operating assets and liabilities:
Accounts and unbilled receivables	9,919,000	5,116,000
Increase (Decrease) in Deferred Costs	1,409,000	1,626,000
Prepaid expenses and other assets	1,095,000	323,000
Increase (Decrease) in Other Noncurrent Assets and Liabilities, Net	26,000	6,122,000
Accounts payable	899,000	(2,525,000)
Accrued liabilities	(201,000)	(6,623,000)
Accrued payroll and other employee benefits	(2,975,000)	(14,979,000)
Deferred revenue	(1,435,000)	(23,838,000)
Net cash provided by (used in) operating activities	(9,414,000)	(46,955,000)
Investing activities:
Purchases of property and equipment	(2,085,000)	(19,198,000)
Internal-use software development costs capitalized	0	(806,000)
Payments to Acquire Other Investments	(501,000)	0
Net cash provided by (used in) investing activities	(2,586,000)	(20,004,000)
Financing activities:
Proceeds from Stock Plans	1,596,000	1,364,000
Tax withholding related to net share settlement of restricted stock units	(352,000)	(20,221,000)
Net cash provided by (used in) financing activities	1,244,000	(18,857,000)
Effect of Exchange Rate on Cash and Cash Equivalents	(52,000)	(104,000)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect	(10,808,000)	(85,920,000)
Cash and cash equivalents:
Beginning of period	329,134,000	306,077,000
End of period	318,326,000	220,157,000
Capital Expenditures Incurred but Not yet Paid	$ 335,000	$ 3,538,000

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Condensed Consolidated Statement of Stockholders' Equity Statement - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Retained Earnings [Member] Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Income, net of tax [Member]
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2019			42,630,123
Stockholders' Equity Attributable to Parent- Beginning Balance at Dec. 31, 2019	$ 164,996		$ 47	$ 560,496	$ (29,847)	$ (361,789)		$ (3,911)
Treasury Stock, Shares - Beginning Balance at Dec. 31, 2019					4,680,723
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures			647,401
Stock Issued During Period, Value, Restricted Stock Award, Gross	(20,221)		$ 1	(20,222)
Stock Issued During Period, Shares, Employee Stock Purchase Plans			26,774
Proceeds from Stock Plans	$ 1,364			1,364
Warrant Exercise, Shares	0		163
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	$ 12,058			12,058
Other Comprehensive Income (Loss), Net of Tax	(84)							(84)
Net Income (Loss) Attributable to Parent	(39,943)					(39,943)
Treasury Stock, Shares - Enging Balance at Jun. 30, 2020					4,680,723
Stockholders' Equity Attributable to Parent- Ending Balance at Jun. 30, 2020	118,170		$ 48	553,696	$ (29,847)	(401,732)		(3,995)
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2020			43,304,461
Common Stock, Shares, Outstanding, Beginning Balance at Mar. 31, 2020			43,291,660
Stockholders' Equity Attributable to Parent- Beginning Balance at Mar. 31, 2020	129,610		$ 48	548,014	$ (29,847)	(384,524)		(4,081)
Treasury Stock, Shares - Beginning Balance at Mar. 31, 2020					4,680,723
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures			12,801
Stock Issued During Period, Value, Restricted Stock Award, Gross	(49)			(49)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	5,731			5,731
Other Comprehensive Income (Loss), Net of Tax	86							86
Net Income (Loss) Attributable to Parent	(17,208)					(17,208)
Treasury Stock, Shares - Enging Balance at Jun. 30, 2020					4,680,723
Stockholders' Equity Attributable to Parent- Ending Balance at Jun. 30, 2020	$ 118,170		$ 48	553,696	$ (29,847)	(401,732)		(3,995)
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2020			43,304,461
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2020	43,461,544		43,461,544
Stockholders' Equity Attributable to Parent- Beginning Balance at Dec. 31, 2020	$ 117,037		$ 48	589,040	$ (29,847)	(438,773)		(3,431)
Treasury Stock, Shares - Beginning Balance at Dec. 31, 2020	4,680,723				4,680,723
Stockholders' Equity Attributable to Parent- Ending Balance at Jan. 01, 2021		$ (68,768)					$ 11,330
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2020	43,461,544		43,461,544
Stockholders' Equity Attributable to Parent- Beginning Balance at Dec. 31, 2020	$ 117,037		$ 48	589,040	$ (29,847)	(438,773)		(3,431)
Treasury Stock, Shares - Beginning Balance at Dec. 31, 2020	4,680,723				4,680,723
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures			836,168
Stock Issued During Period, Value, Restricted Stock Award, Gross	$ (352)		$ 1	(353)
Stock Issued During Period, Shares, Employee Stock Purchase Plans	41,970		41,970
Proceeds from Stock Plans	$ 1,596			1,596
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt				(80,098)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	16,741			16,741
Other Comprehensive Income (Loss), Net of Tax	(451)							(451)
Net Income (Loss) Attributable to Parent	$ (40,075)					(40,075)
Treasury Stock, Shares - Enging Balance at Jun. 30, 2021	4,680,723				4,680,723
Stockholders' Equity Attributable to Parent- Ending Balance at Jun. 30, 2021	$ 25,728		$ 49	526,926	$ (29,847)	(467,518)		(3,882)
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2021	44,339,682		44,339,682
Common Stock, Shares, Outstanding, Beginning Balance at Mar. 31, 2021			44,252,765
Stockholders' Equity Attributable to Parent- Beginning Balance at Mar. 31, 2021	$ 35,029		$ 49	518,338	$ (29,847)	(449,472)		(4,039)
Treasury Stock, Shares - Beginning Balance at Mar. 31, 2021					4,680,723
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures			86,917
Stock Issued During Period, Value, Restricted Stock Award, Gross	$ 0
Stock Issued During Period, Shares, Employee Stock Purchase Plans	0
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	$ 8,588			8,588
Other Comprehensive Income (Loss), Net of Tax	157							157
Net Income (Loss) Attributable to Parent	$ (18,046)					(18,046)
Treasury Stock, Shares - Enging Balance at Jun. 30, 2021	4,680,723				4,680,723
Stockholders' Equity Attributable to Parent- Ending Balance at Jun. 30, 2021	$ 25,728		$ 49	$ 526,926	$ (29,847)	$ (467,518)		$ (3,882)
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2021	44,339,682		44,339,682

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Organization and Nature of Operations	6 Months Ended
	Jun. 30, 2021
Organization and Nature of Operations [Abstract]
Organization and nature of operations	Organization and Nature of Operations    PROS Holdings, Inc., a Delaware corporation, through its operating subsidiaries (collectively, the "Company"), provides software-as-a-service ("SaaS") solutions that optimize shopping and selling experiences. Built on the PROS platform, these intelligent solutions leverage business artificial intelligence ("AI"), intuitive user experiences and process automation to deliver frictionless, personalized purchasing experiences designed to meet the real-time demands of today’s business-to-business ("B2B") and business-to-consumer ("B2C") omnichannel shoppers, regardless of industry. Companies can use these solutions to assess their market environments in real time to deliver customized prices and offers. The Company's solutions enable buyers to move fluidly across its customers’ direct sales, partner, online, mobile and emerging channels with personalized experiences regardless of which channel those buyers choose. The Company's decades of data science and AI expertise are infused into its solutions and are designed to reduce time and complexity through actionable intelligence.

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Summary of Significant Accounting Policies (Notes)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Summary of Significant Accounting Policies

Basis of presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial reporting and applicable quarterly reporting regulations of the Securities and Exchange Commission ("SEC"). In management's opinion, the accompanying interim unaudited condensed consolidated financial statements include all adjustments necessary for a fair statement of the financial position of the Company as of June 30, 2021, the results of operations for the three and six months ended June 30, 2021 and 2020, cash flows for the six months ended June 30, 2021 and 2020, and stockholders' equity for the three and six months ended June 30, 2021 and 2020.

Certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 ("Annual Report") filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2020 was derived from the Company's audited consolidated financial statements but does not include all disclosures required under GAAP.

Risks and uncertainties

Since its initial onset in early 2020, the coronavirus ("COVID-19") pandemic has created significant global uncertainty, and compliance with the various containment measures implemented by governmental authorities has impacted the Company's business, as well as the businesses of its customers, suppliers and other counterparties, and the scope and duration of the outbreak and timeframe for economic recovery is uncertain. As there are no comparable recent events that provide guidance as to the long-term effect of the COVID-19 pandemic, the Company is unable to predict the full impact that COVID-19 will have on its results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic and containment measures.

Changes in accounting policies

    There have been no material changes in the Company’s significant accounting policies and their application as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, except for the Company's adoption of certain accounting standards described in more detail under "Recently adopted accounting pronouncements" in this Note 2 below.

Fair value measurement

The Company's financial assets that are included in cash and cash equivalents and that are measured at fair value on a recurring basis consisted of $293.8 million and $301.3 million at June 30, 2021 and December 31, 2020, respectively, and were invested in treasury money market funds. The fair value of the treasury money market funds is determined based on quoted market prices, which represents level 1 in the fair value hierarchy as defined by ASC 820.

Trade and other receivables

    Trade and other receivables are primarily comprised of trade receivables, net of allowance for doubtful accounts, contract assets and unbilled receivables. The Company records trade accounts receivable for its unconditional rights to consideration arising from the Company's performance under contracts with customers. The Company's standard billing terms are that payment is due upon receipt of invoice, payable generally within thirty to sixty days. The carrying value of such receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. When developing its estimate of expected credit losses on trade and other receivables, the Company considers the available information relevant to assessing the collectability of cash flows, which includes a combination of both internal and external information relating to past events, current conditions, and future forecasts as well as relevant qualitative and quantitative factors that relate to the environment in which the Company operates.

    Contract assets represent conditional rights to consideration that have been recognized as revenue in advance of billing the customer. Unbilled receivables represent unconditional rights to consideration arising from contingent revenue that have been recognized as revenue in advance of billing the customer.

Deferred costs

    Sales commissions earned by the Company's sales representatives are considered incremental and recoverable costs of obtaining a customer contract. Sales commissions are deferred and amortized on a straight-line basis over the period of benefit, which the Company has determined to be five to eight years. The Company determined the period of benefit by taking into consideration its customer contracts, expected renewals of those customer contracts (as the Company currently does not pay an incremental sales commission for renewals), the Company's technology and other factors. The Company also defers amounts earned by employees other than sales representatives who earn incentive payments under compensation plans that are also tied to the value of customer contracts acquired. Deferred costs were $17.1 million and $18.5 million as of June 30, 2021 and December 31, 2020, respectively. Amortization expense for the deferred costs was $1.5 million and $1.4 million for the three months ended June 30, 2021 and 2020, respectively, and $3.1 million and $2.9 million for the six months ended June 30, 2021 and 2020, respectively. Amortization of deferred costs is included in selling and marketing expense in the accompanying unaudited condensed consolidated statements of comprehensive income (loss).

    Deferred implementation costs

    The Company capitalizes certain contract fulfillment costs, including personnel and other costs (such as hosting, employee salaries, benefits and payroll taxes), that are associated with arrangements where professional services are not distinct from other undelivered obligations in its customer contracts. The Company analyzes implementation costs and capitalizes those costs that are directly related to customer contracts, that are expected to be recoverable, and that enhance the resources which will be used to satisfy the undelivered performance obligations in those contracts. Deferred implementation costs are amortized ratably over the remaining contract term once the revenue recognition criteria for the respective performance obligation has been met and revenue recognition commences. Deferred implementation costs were $2.7 million and $2.9 million as of June 30, 2021 and December 31, 2020, respectively. Amortization expense for the deferred implementation costs was $0.3 million and $0.6 million for the three months ended June 30, 2021 and 2020, respectively, and $0.6 million and $1.0 million for the six months ended June 30, 2021 and 2020, respectively. Deferred implementation costs are included in prepaid and other current assets and other assets, noncurrent in the unaudited condensed consolidated balance sheets. Amortization of deferred implementation costs is included in cost of subscription and cost of services revenues in the accompanying unaudited condensed consolidated statements of comprehensive income (loss).

    Recently adopted accounting pronouncements

    In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options ("Subtopic 470-20") and Derivatives and Hedging - Contracts in an Entity's Own Equity ("Subtopic 815-40"), which simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. This new standard is effective for the Company's interim and annual periods beginning January 1, 2022, and earlier adoption is permitted on January 1, 2021. The Company may elect to apply the amendments on a retrospective or modified retrospective basis. The Company early adopted the new standard effective January 1, 2021 on the modified retrospective basis. The adoption decreased additional paid-in capital by $80.1 million related to the equity conversion component of the outstanding convertible notes which was previously separated and recorded in equity, and increased convertible debt, net by $68.8 million related to the removal of the debt discounts and adjustment of debt issuance cost recorded under the previous standard. The net cumulative effect of the adjustments of $11.3 million was recorded as a decrease to the opening balance of the accumulated deficit as of January 1, 2021. As a result of the adoption the non-cash interest expense was lower for three and six months ended June 30, 2021 and will be lower for the remaining term of the outstanding convertible notes. The adoption had no impact on the condensed consolidated statements of cash flows.

    Recently issued accounting pronouncements not yet adopted

    With the exception of the new standard discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the six months ended June 30, 2021, as compared to the recent accounting pronouncements described in the Company's Annual Report, that are of significance or potential significance to the Company.

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Deferred Revenue and Performance Obligation (Notes)

6 Months Ended

Jun. 30, 2021

Deferred Revenue and Performance Obligation [Abstract]

Deferred revenue and performance obligation [Text Block]

Deferred Revenue and Performance Obligations

    Deferred Revenue

    For the three months ended June 30, 2021 and 2020, the Company recognized approximately $45.3 million and $48.8 million, respectively, and for the six months ended June 30, 2021 and 2020, the Company recognized approximately $70.3 million and $84.0 million, respectively, of revenue that was included in the deferred revenue balances at the beginning of the respective periods and primarily related to subscription services, maintenance and support, and services.

    Performance Obligations

     As of June 30, 2021, the Company expects to recognize approximately $390.5 million of revenue from remaining performance obligations. The Company expects, based on the terms of the related, underlying contractual arrangements, to recognize revenue on approximately $190.3 million of these performance obligations over the next 12 months, with the balance recognized thereafter. However, as a result of uncertain economic conditions caused by COVID-19, the amount of revenue recognized from the Company's contractual remaining performance obligations could vary and be less than what the Company expects as revenue recognized could be delayed or not occur depending on the ongoing impact of COVID-19.

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Disaggregation of Revenue (Notes)

6 Months Ended

Jun. 30, 2021

Disaggregation of Revenue [Abstract]

Disaggregation of Revenue [Text Block]

Disaggregation of Revenue

    Revenue by Geography

    The geographic information in the table below is presented for the three and six months ended June 30, 2021 and 2020. The Company categorizes geographic revenues based on the location of the customer's headquarters. Because the Company's contracts are predominately denominated in U.S. dollars, it has limited exposure to foreign currency exchange risk as discussed under "Foreign Currency Exchange Risk" of Part I, Item 3 below.

	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
(in thousands)	Revenue		Percent		Revenue		Percent		Revenue		Percent		Revenue		Percent
United States of America	$	21,875	35	%	$	20,715	32	%	$	42,751	35	%	$	42,515	33	%
Europe	18,562		30	%	17,682		28	%	37,254		30	%	37,612		29	%
The rest of the world	21,964		35	%	25,350		40	%	43,774		35	%	49,931		38	%
Total revenue	$	62,401	100	%	$	63,747	100	%	$	123,779	100	%	$	130,058	100	%

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Leases (Notes)

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

Lessee, Operating Leases [Text Block]

Leases

    The Company has operating leases for data centers, computer infrastructure, corporate offices and certain equipment. These leases have remaining lease terms ranging from 1 year to 12 years. Some of these leases include options to extend for up to 15 years, and some include options to terminate within 1 year.

    As of June 30, 2021, the Company did not have any finance leases.

    Supplemental cash flow information related to leases was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cash paid for operating lease liabilities	$	1,917	$	1,973	$	4,378	$	3,600
Right-of-use asset obtained in exchange for operating lease liability	$	194	$	—	$	291	$	1,759

    As of June 30, 2021, maturities of lease liabilities were as follows (in thousands):

Year Ending December 31,	Amount
Remaining 2021	$	4,894
2022	10,468
2023	11,374
2024	5,383
2025	4,253
2026	4,134
Thereafter	27,726
Total operating lease payments	68,232
Less: Imputed interest	(19,807)
Less: Anticipated lease incentive	(1,385)
Total operating lease liabilities	$	47,040

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Noncash Share-based Compensation (Note)

6 Months Ended

Jun. 30, 2021

Noncash Share-based Compensation [Abstract]

Noncash Share-based Compensation

Noncash Share-based Compensation

    The Company's 2017 Equity Incentive Plan (as amended and restated, the "2017 Stock Plan") was approved by the Company's stockholders in May 2019 and reserved an aggregate amount of 4,550,000 shares available for issuance. In May 2021, the Company's stockholders approved an amendment to the 2017 Stock Plan increasing the aggregate amount of shares available for issuance to 7,650,000. As of June 30, 2021, 4,047,069 shares remain available for issuance under the 2017 Stock Plan.

    The following table presents the number of shares or units outstanding for each award type as of June 30, 2021 and December 31, 2020, respectively, (in thousands): 

Award type	June 30, 2021	December 31, 2020
Restricted stock units (time-based)	1,869	1,802
Restricted stock units (performance-based)	140	162
Stock appreciation rights	—	28
Market stock units	126	111

During the three months ended June 30, 2021, the Company granted 39,695 RSUs (time-based) with a weighted average grant-date fair value of $38.32 per share.

During the six months ended June 30, 2021, the Company granted 823,589 RSUs (time-based) with a weighted average grant-date fair value of $47.59 per share. The Company also granted 125,541 MSUs with a weighted average grant-date fair value of $56.05 to certain executive employees during the six months ended June 30, 2021. These MSUs vest on January 31, 2024 and the actual number of MSUs that will be eligible to vest is based on the total stockholder return of the Company relative to the total stockholder return of the Index over the performance period, as defined by each award's plan documents or individual award agreements. The maximum number of shares issuable upon vesting is 200% of the MSUs initially granted. The Company did not grant any stock options, SARs or performance-based RSUs during the six months ended June 30, 2021.

The assumptions used to value the MSUs granted during the six months ended June 30, 2021 were as follows:

	June 30, 2021
Volatility	53.29	%
Risk-free interest rate	0.22	%
Expected option life in years	2.97
Dividend yield	—

Share-based compensation expense is allocated to expense categories on the unaudited condensed consolidated statements of comprehensive income (loss). The following table summarizes share-based compensation expense included in the Company's unaudited condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2021 and 2020:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Share-based compensation:
Cost of revenue	$	976	$	502	$	1,802	$	1,026
Operating expenses:
Selling and marketing	2,510		1,965		4,734		3,831
Research and development	2,117		1,368		3,943		2,875
General and administrative	3,003		1,917		6,297		4,367
Total included in operating expenses	7,630		5,250		14,974		11,073
Total share-based compensation expense	$	8,606	$	5,752	$	16,776	$	12,099

    At June 30, 2021, the Company had an estimated $78.4 million of total unrecognized compensation costs related to share-based compensation arrangements. These costs will be recognized over a weighted average period of 2.8 years.

    The Company's Employee Stock Purchase Plan (as amended, the "ESPP") provides for eligible employees to purchase shares on an after-tax basis in an amount between 1% and 10% of their annual pay: (i) on June 30 of each year at a 15% discount of the fair market value of the Company's common stock on January 1 or June 30, whichever is lower, and (ii) on December 31 of each year at a 15% discount of the fair market value of the Company's common stock on July 1 or December 31, whichever is lower. An employee may not purchase more than $5,000 in either of the six-month measurement periods described above or more than $10,000 annually. In May 2021, the Company's stockholders approved an amendment to the ESPP Plan increasing the aggregate amount of shares available for issuance under the ESPP to 1,000,000. During the three and six months ended June 30, 2021, the Company issued zero and 41,970 shares under the ESPP, respectively. As of June 30, 2021, 532,824 shares remain authorized and available for issuance under the ESPP. As of June 30, 2021, the Company held approximately $1.5 million on behalf of employees for future purchases under the ESPP, and this amount was recorded in accrued payroll and other employee benefits in the Company's unaudited condensed consolidated balance sheet.

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Convertible debt (Notes)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

Convertible Senior Notes

    The following is a summary of the Company's convertible senior notes as of June 30, 2021 (in thousands):

	Date of Issuance	Unpaid Principal Balance		Net Carrying Amount				Contractual Interest Rates
				Current		Noncurrent
1% Convertible Notes due in 2024 ("2024 Notes")	May 2019	$	143,750	$	—	$	141,210	1%
2.25% Convertible Notes due in 2027 ("2027 Notes")	September 2020	$	150,000	$	—	$	146,332	2.25%

The 2027 and 2024 Notes (collectively, the "Notes") are general unsecured obligations and rank senior in right of payment to all of the Company's indebtedness that is expressly subordinated in right of payment to the Notes, rank equally in right of payment with all of the Company's existing and future liabilities that are not so subordinated, are effectively junior to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all indebtedness and other liabilities of the Company's subsidiaries (including trade payables but excluding intercompany obligations owed to the Company or its subsidiaries).

Interest related to the 2027 Notes is payable semiannually in arrears in cash on March 15 and September 15 of each year, beginning on March 15, 2021. Interest related to the 2024 Notes is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2019. The 2027 Notes mature on September 15, 2027 and the 2024 Notes mature on May 15, 2024, unless redeemed or converted in accordance with their terms prior to such date.

Each $1,000 of principal of the 2027 Notes will initially be convertible into 23.9137 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $41.82 per share. Each $1,000 of principal of the 2024 Notes will initially be convertible into 15.1394 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $66.05 per share. The initial conversion price for the 2027 and the 2024 Notes is subject to adjustment upon the occurrence of certain specified events.

As of June 30, 2021, the 2027 and 2024 Notes are not yet convertible and their remaining term is approximately 74 months and 34 months, respectively.

As of June 30, 2021 and December 31, 2020, the fair value of the principal amount of the Notes in the aggregate was $342.9 million and $363.8 million, respectively. The estimated fair value was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including the Company's stock price and interest rates, which represents level 2 in the fair value hierarchy.

Effective January 1, 2021, the Company early adopted ASU 2020-06, Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in an Entity's Own Equity. Upon adoption of the new standard, the Company removed the debt discount and adjusted the debt issuance cost which was previously allocated between the liability and the equity component, resulting in an increase of $68.8 million to convertible debt, net. In addition, the Company recorded a reduction to additional paid-in capital of $80.1 million related to the equity conversion component of the outstanding convertible notes which was previously separated and recorded in equity. The net cumulative impact of the adoption of the standard was recorded as a decrease to accumulated deficit.

The Notes consist of the following (in thousands):

	June 30, 2021		December 31, 2020
Liability component:
Principal	$	293,750	$	293,750
Less: debt discount and issuance cost, net of amortization	(6,208)		(75,722)
Net carrying amount	$	287,542	$	218,028
Equity component(1)	$	—	$	80,098

(1)     Recorded within additional paid-in capital in the unaudited condensed consolidated balance sheet. As of December 31, 2020, it included $47.2 million and $32.9 million related to the 2027 and 2024 Notes, respectively, which was net of $1.3 million and $1.1 million issuance cost in equity, respectively.

The following table sets forth total interest expense recognized related to the Notes (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Coupon interest	$	1,203	$	359	$	2,406	$	719
Amortization of debt issuance costs	373		158		746		314
Amortization of debt discount	—		1,568		—		3,114
Total	$	1,576	$	2,085	$	3,152	$	4,147

    Capped Call Transactions

    In September 2020 and in May 2019, in connection with the offering of the 2027 and 2024 Notes, respectively, the Company entered into privately negotiated capped call transactions (collectively, the "Capped Call") with certain option counterparties. The Capped Call transactions cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock initially underlying the Notes, at a strike price that corresponds to the initial conversion price of the Notes, also subject to adjustment, and are exercisable upon conversion of the Notes. The Capped Call transactions are intended to reduce potential dilution to the Company’s common stock and/or offset any cash payments the Company will be required to make in excess of the principal amounts upon any conversion of Notes, and to effectively increase the overall conversion price of the 2027 Notes from $41.82 to $78.90 per share, and for the 2024 Notes from $66.05 to $101.62 per share. As the Capped Call transactions meet certain accounting criteria, they are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of the Capped Call was $25.3 million and $16.4 million for the 2027 and 2024 Notes, respectively, and was recorded as part of additional paid-in capital.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

    Litigation

    In the ordinary course of business, the Company regularly becomes involved in contract and other negotiations and, in more limited circumstances, becomes involved in legal proceedings, claims and litigation. The outcomes of these matters are inherently unpredictable. The Company is not currently involved in any outstanding litigation that it believes, individually or in the aggregate, will have a material adverse effect on its business, financial condition, results of operations or cash flows.

Purchase commitments

In the ordinary course of business, the Company enters into various purchase commitments for goods and services.

In March 2019, the Company entered into a noncancelable agreement with a computing infrastructure vendor that amended the existing agreement dated June 2017. The amended agreement expires in March 2022. The purchase commitment as of June 30, 2021 was $24.9 million for the remaining period through the expiration of the agreement.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial reporting and applicable quarterly reporting regulations of the Securities and Exchange Commission ("SEC"). In management's opinion, the accompanying interim unaudited condensed consolidated financial statements include all adjustments necessary for a fair statement of the financial position of the Company as of June 30, 2021, the results of operations for the three and six months ended June 30, 2021 and 2020, cash flows for the six months ended June 30, 2021 and 2020, and stockholders' equity for the three and six months ended June 30, 2021 and 2020.

Certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 ("Annual Report") filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2020 was derived from the Company's audited consolidated financial statements but does not include all disclosures required under GAAP.

Risks and uncertainties

Since its initial onset in early 2020, the coronavirus ("COVID-19") pandemic has created significant global uncertainty, and compliance with the various containment measures implemented by governmental authorities has impacted the Company's business, as well as the businesses of its customers, suppliers and other counterparties, and the scope and duration of the outbreak and timeframe for economic recovery is uncertain. As there are no comparable recent events that provide guidance as to the long-term effect of the COVID-19 pandemic, the Company is unable to predict the full impact that COVID-19 will have on its results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic and containment measures.

Accounting Standards Update and Change in Accounting Principle

Changes in accounting policies

    There have been no material changes in the Company’s significant accounting policies and their application as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, except for the Company's adoption of certain accounting standards described in more detail under "Recently adopted accounting pronouncements" in this Note 2 below.

Fair value measurement

Fair value measurement

The Company's financial assets that are included in cash and cash equivalents and that are measured at fair value on a recurring basis consisted of $293.8 million and $301.3 million at June 30, 2021 and December 31, 2020, respectively, and were invested in treasury money market funds. The fair value of the treasury money market funds is determined based on quoted market prices, which represents level 1 in the fair value hierarchy as defined by ASC 820.

Trade and Other Accounts Receivable, Unbilled Receivables, Policy [Policy Text Block]

Trade and other receivables

    Trade and other receivables are primarily comprised of trade receivables, net of allowance for doubtful accounts, contract assets and unbilled receivables. The Company records trade accounts receivable for its unconditional rights to consideration arising from the Company's performance under contracts with customers. The Company's standard billing terms are that payment is due upon receipt of invoice, payable generally within thirty to sixty days. The carrying value of such receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. When developing its estimate of expected credit losses on trade and other receivables, the Company considers the available information relevant to assessing the collectability of cash flows, which includes a combination of both internal and external information relating to past events, current conditions, and future forecasts as well as relevant qualitative and quantitative factors that relate to the environment in which the Company operates.

    Contract assets represent conditional rights to consideration that have been recognized as revenue in advance of billing the customer. Unbilled receivables represent unconditional rights to consideration arising from contingent revenue that have been recognized as revenue in advance of billing the customer.

Revenue Recognition, Customer Acquisitions [Policy Text Block]

Deferred costs

    Sales commissions earned by the Company's sales representatives are considered incremental and recoverable costs of obtaining a customer contract. Sales commissions are deferred and amortized on a straight-line basis over the period of benefit, which the Company has determined to be five to eight years. The Company determined the period of benefit by taking into consideration its customer contracts, expected renewals of those customer contracts (as the Company currently does not pay an incremental sales commission for renewals), the Company's technology and other factors. The Company also defers amounts earned by employees other than sales representatives who earn incentive payments under compensation plans that are also tied to the value of customer contracts acquired. Deferred costs were $17.1 million and $18.5 million as of June 30, 2021 and December 31, 2020, respectively. Amortization expense for the deferred costs was $1.5 million and $1.4 million for the three months ended June 30, 2021 and 2020, respectively, and $3.1 million and $2.9 million for the six months ended June 30, 2021 and 2020, respectively. Amortization of deferred costs is included in selling and marketing expense in the accompanying unaudited condensed consolidated statements of comprehensive income (loss).

Deferred Charges, Policy [Policy Text Block]

Deferred implementation costs    The Company capitalizes certain contract fulfillment costs, including personnel and other costs (such as hosting, employee salaries, benefits and payroll taxes), that are associated with arrangements where professional services are not distinct from other undelivered obligations in its customer contracts. The Company analyzes implementation costs and capitalizes those costs that are directly related to customer contracts, that are expected to be recoverable, and that enhance the resources which will be used to satisfy the undelivered performance obligations in those contracts. Deferred implementation costs are amortized ratably over the remaining contract term once the revenue recognition criteria for the respective performance obligation has been met and revenue recognition commences. Deferred implementation costs were $2.7 million and $2.9 million as of June 30, 2021 and December 31, 2020, respectively. Amortization expense for the deferred implementation costs was $0.3 million and $0.6 million for the three months ended June 30, 2021 and 2020, respectively, and $0.6 million and $1.0 million for the six months ended June 30, 2021 and 2020, respectively. Deferred implementation costs are included in prepaid and other current assets and other assets, noncurrent in the unaudited condensed consolidated balance sheets. Amortization of deferred implementation costs is included in cost of subscription and cost of services revenues in the accompanying unaudited condensed consolidated statements of comprehensive income (loss).

New Accounting Pronouncements, Policy [Policy Text Block]

Recently adopted accounting pronouncements

    In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options ("Subtopic 470-20") and Derivatives and Hedging - Contracts in an Entity's Own Equity ("Subtopic 815-40"), which simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. This new standard is effective for the Company's interim and annual periods beginning January 1, 2022, and earlier adoption is permitted on January 1, 2021. The Company may elect to apply the amendments on a retrospective or modified retrospective basis. The Company early adopted the new standard effective January 1, 2021 on the modified retrospective basis. The adoption decreased additional paid-in capital by $80.1 million related to the equity conversion component of the outstanding convertible notes which was previously separated and recorded in equity, and increased convertible debt, net by $68.8 million related to the removal of the debt discounts and adjustment of debt issuance cost recorded under the previous standard. The net cumulative effect of the adjustments of $11.3 million was recorded as a decrease to the opening balance of the accumulated deficit as of January 1, 2021. As a result of the adoption the non-cash interest expense was lower for three and six months ended June 30, 2021 and will be lower for the remaining term of the outstanding convertible notes. The adoption had no impact on the condensed consolidated statements of cash flows.

    Recently issued accounting pronouncements not yet adopted

    With the exception of the new standard discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the six months ended June 30, 2021, as compared to the recent accounting pronouncements described in the Company's Annual Report, that are of significance or potential significance to the Company.

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Disaggregation of Revenue (Tables)

6 Months Ended

Jun. 30, 2021

Disaggregation of Revenue [Abstract]

Schedule of Disaggregation Of Revenue [Table Text Block]

The geographic information in the table below is presented for the three and six months ended June 30, 2021 and 2020. The Company categorizes geographic revenues based on the location of the customer's headquarters. Because the Company's contracts are predominately denominated in U.S. dollars, it has limited exposure to foreign currency exchange risk as discussed under "Foreign Currency Exchange Risk" of Part I, Item 3 below.

	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
(in thousands)	Revenue		Percent		Revenue		Percent		Revenue		Percent		Revenue		Percent
United States of America	$	21,875	35	%	$	20,715	32	%	$	42,751	35	%	$	42,515	33	%
Europe	18,562		30	%	17,682		28	%	37,254		30	%	37,612		29	%
The rest of the world	21,964		35	%	25,350		40	%	43,774		35	%	49,931		38	%
Total revenue	$	62,401	100	%	$	63,747	100	%	$	123,779	100	%	$	130,058	100	%

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Leases (Tables)

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

Supplemental Lease Information [Table Text Block]

Supplemental cash flow information related to leases was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cash paid for operating lease liabilities	$	1,917	$	1,973	$	4,378	$	3,600
Right-of-use asset obtained in exchange for operating lease liability	$	194	$	—	$	291	$	1,759

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

As of June 30, 2021, maturities of lease liabilities were as follows (in thousands):

Year Ending December 31,	Amount
Remaining 2021	$	4,894
2022	10,468
2023	11,374
2024	5,383
2025	4,253
2026	4,134
Thereafter	27,726
Total operating lease payments	68,232
Less: Imputed interest	(19,807)
Less: Anticipated lease incentive	(1,385)
Total operating lease liabilities	$	47,040

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Earnings per Share (Table)

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2021 and 2020:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2021		2020		2021		2020
Numerator:
Net loss	$	(18,046)	$	(17,208)	$	(40,075)	$	(39,943)
Denominator:
Weighted average shares (basic)	44,321		43,304		44,283		43,203
Dilutive effect of potential common shares	—		—		—		—
Weighted average shares (diluted)	44,321		43,304		44,283		43,203
Basic loss per share	$	(0.41)	$	(0.40)	$	(0.90)	$	(0.92)
Diluted loss per share	$	(0.41)	$	(0.40)	$	(0.90)	$	(0.92)

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Noncash Share-based Compensation (Tables)

6 Months Ended

Jun. 30, 2021

Noncash Share-based Compensation [Abstract]

Awards outstanding [Table Text Block]

The following table presents the number of shares or units outstanding for each award type as of June 30, 2021 and December 31, 2020, respectively, (in thousands): 

Award type	June 30, 2021	December 31, 2020
Restricted stock units (time-based)	1,869	1,802
Restricted stock units (performance-based)	140	162
Stock appreciation rights	—	28
Market stock units	126	111

Schedule of Share-based Compensation Expense

The following table summarizes share-based compensation expense included in the Company's unaudited condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2021 and 2020:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Share-based compensation:
Cost of revenue	$	976	$	502	$	1,802	$	1,026
Operating expenses:
Selling and marketing	2,510		1,965		4,734		3,831
Research and development	2,117		1,368		3,943		2,875
General and administrative	3,003		1,917		6,297		4,367
Total included in operating expenses	7,630		5,250		14,974		11,073
Total share-based compensation expense	$	8,606	$	5,752	$	16,776	$	12,099

Market Stock Units Valuation Assumptions

The assumptions used to value the MSUs granted during the six months ended June 30, 2021 were as follows:

	June 30, 2021
Volatility	53.29	%
Risk-free interest rate	0.22	%
Expected option life in years	2.97
Dividend yield	—

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Convertible debt (Tables)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

The following is a summary of the Company's convertible senior notes as of June 30, 2021 (in thousands):

	Date of Issuance	Unpaid Principal Balance		Net Carrying Amount				Contractual Interest Rates
				Current		Noncurrent
1% Convertible Notes due in 2024 ("2024 Notes")	May 2019	$	143,750	$	—	$	141,210	1%
2.25% Convertible Notes due in 2027 ("2027 Notes")	September 2020	$	150,000	$	—	$	146,332	2.25%

Convertible Debt [Table Text Block]

The Notes consist of the following (in thousands):

	June 30, 2021		December 31, 2020
Liability component:
Principal	$	293,750	$	293,750
Less: debt discount and issuance cost, net of amortization	(6,208)		(75,722)
Net carrying amount	$	287,542	$	218,028
Equity component(1)	$	—	$	80,098

(1)     Recorded within additional paid-in capital in the unaudited condensed consolidated balance sheet. As of December 31, 2020, it included $47.2 million and $32.9 million related to the 2027 and 2024 Notes, respectively, which was net of $1.3 million and $1.1 million issuance cost in equity, respectively.

The following table sets forth total interest expense recognized related to the Notes (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Coupon interest	$	1,203	$	359	$	2,406	$	719
Amortization of debt issuance costs	373		158		746		314
Amortization of debt discount	—		1,568		—		3,114
Total	$	1,576	$	2,085	$	3,152	$	4,147

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Summary of Significant Accounting Policies Significant Accounting Policies (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Summary of Significant Accounting Policies [Line Items]
Treasury money market funds, at fair value	$ 293.8		$ 293.8		$ 301.3
Deferred Costs	17.1		17.1		18.5
Amortization of Deferred Charges	1.5	$ 1.4	3.1	$ 2.9
Capitalized Contract Cost, Net	2.7		2.7		$ 2.9
Capitalized Contract Cost, Amortization	$ 0.3	$ 0.6	$ 0.6	$ 1.0

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Summary of Significant Accounting Policies New Accounting Pronouncements (Details) - USD ($) $ in Thousands	Jan. 01, 2021	Jun. 30, 2021	Dec. 31, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Retained Earnings (Accumulated Deficit)		$ (467,518)	$ (438,773)
Accounting Standards Update 2020-06
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Debt Instrument, Unamortized Discount and Debt Issuance Cost	$ 68,800
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt	80,100
Retained Earnings (Accumulated Deficit)	$ 11,300

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Deferred Revenue and Performance Obligation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Deferred Revenue and Performance Obligation [Abstract]
Deferred Revenue, Revenue Recognized	$ 45.3	$ 48.8	$ 70.3	$ 84.0
Revenue, Remaining Performance Obligation, Amount	390.5		390.5
Revenue Remaining Performance Obligation, to be recognized within 12 months	$ 190.3		$ 190.3

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Disaggregation of Revenue Revenue by Geography (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenues	$ 62,401	$ 63,747	$ 123,779	$ 130,058
Percentage of total revenue	100.00%	100.00%	100.00%	100.00%
UNITED STATES
Revenues	$ 21,875	$ 20,715	$ 42,751	$ 42,515
Percentage of total revenue	35.00%	32.00%	35.00%	33.00%
Europe [Member]
Revenues	$ 18,562	$ 17,682	$ 37,254	$ 37,612
Percentage of total revenue	30.00%	28.00%	30.00%	29.00%
The rest of the world [Member]
Revenues	$ 21,964	$ 25,350	$ 43,774	$ 49,931
Percentage of total revenue	35.00%	40.00%	35.00%	38.00%

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Leases (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Option to Renew	15 years		15 years
Lessee, Operating Lease, Termination Option			1 year
Operating Lease, Payments	$ 1,917	$ 1,973	$ 4,378	$ 3,600
Right-of-use Asset Obtained in Exchange for Operating Lease Liability	$ 194	$ 0	$ 291	$ 1,759
Minimum [Member]
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Term of Contract	1 year		1 year
Maximum [Member]
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Term of Contract	12 years		12 years

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Leases Schedule of lease liability maturities (Details) $ in Thousands	Jun. 30, 2021 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Remaining 2021	$ 4,894
2022	10,468
2023	11,374
2024	5,383
2025	4,253
2026	4,134
Thereafter	27,726
Operating Leases, Payments Due	68,232
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(19,807)
Lessee, Operating Lease, Anticipated Incentives	(1,385)
Operating Lease, Liability	$ 47,040

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Earnings per Share (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Share-based Payment Arrangement [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive potential common shares excluded from computation of earnings per share	1.2	1.2	1.3	1.4
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive potential common shares excluded from computation of earnings per share	5.8	2.2	5.8	2.2

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Earnings per Share Basis and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Numerator
Net income (loss)	$ (18,046)	$ (17,208)	$ (40,075)	$ (39,943)
Denominator
Weighted average shares (basic)	44,321	43,304	44,283	43,203
Dilutive effect of potential common shares	0	0	0	0
Weighted average shares (diluted)	44,321	43,304	44,283	43,203
Basic Earnings Per Share	$ (0.41)	$ (0.40)	$ (0.90)	$ (0.92)
Diluted earnings per share	$ (0.41)	$ (0.40)	$ (0.90)	$ (0.92)

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Noncash Share-based Compensation (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2021 USD ($) $ / shares shares	Jun. 30, 2021 USD ($) $ / shares shares
Noncash Share-based Compensation (Narrative) [Line Items]
Unrecognized compensation cost related to share-based compensation | $	$ 78,400,000	$ 78,400,000
Weighted average period to recognize cost, in years		2 years 9 months 18 days
Share-based compensation arrangement by share-based payment, Minimum Employee Subscription rate	1.00%	1.00%
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate	10.00%	10.00%
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date		15.00%
Maximum Amount Contributable by employees under ESPP- Half yearly | $		$ 5,000
Maximum Amount Contributable By Employees Under ESPP- Annually | $		$ 10,000
Stock Issued During Period, Shares, Employee Stock Purchase Plans	0	41,970
ESPP contributions by Employees | $		$ 1,500,000
RSUs
Noncash Share-based Compensation (Narrative) [Line Items]
Awards, other than options, granted in period	39,695	823,589
Weighted average grant date fair value, per share, of awards granted in period | $ / shares	$ 38.32	$ 47.59
Employee Stock [Member]
Noncash Share-based Compensation (Narrative) [Line Items]
Shares reserved for issuance under Plan	1,000,000	1,000,000
Shares available for future grants	532,824	532,824
Performance Shares [Member]
Noncash Share-based Compensation (Narrative) [Line Items]
Awards, other than options, granted in period		125,541
Weighted average grant date fair value, per share, of awards granted in period | $ / shares		$ 56.05
2017 Equity Incentive Plan [Member] [Member]
Noncash Share-based Compensation (Narrative) [Line Items]
Shares reserved for issuance under Plan	4,550,000	4,550,000
Shares available for future grants	4,047,069	4,047,069
2017 Amended Equity Incentive Plan [Member]
Noncash Share-based Compensation (Narrative) [Line Items]
Shares reserved for issuance under Plan	7,650,000	7,650,000

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Noncash Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 8,606	$ 5,752	$ 16,776	$ 12,099
Cost of Sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	976	502	1,802	1,026
Selling and Marketing Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	2,510	1,965	4,734	3,831
General and Administrative Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	3,003	1,917	6,297	4,367
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	2,117	1,368	3,943	2,875
Operating Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 7,630	$ 5,250	$ 14,974	$ 11,073

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Noncash Share-based Compensation Awards outstanding (Details) - shares shares in Thousands	Jun. 30, 2021	Dec. 31, 2020
Restricted Stock Unit - time based [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number	1,869	1,802
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number	140	162
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number	0	28
Market Share Units (MSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number	126	111

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Noncash Share-based Compensation Assumptions (Details) - Market Share Units (MSUs) [Member]	6 Months Ended
	Jun. 30, 2021
Assumptions For Fair Value Calculation of Market Stock Units [Line Items]
Volatility	53.29%
Risk-free interest rate	0.22%
Expected life, in years	2 years 11 months 19 days
Dividend yield	0.00%

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Convertible debt (Details) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended		12 Months Ended
	Jan. 01, 2021 USD ($)	Jun. 30, 2021 USD ($) $ / shares	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) $ / shares	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 293,750		$ 293,750		$ 293,750
Convertible Debt, Noncurrent		287,542		287,542		218,028
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net		6,208		6,208		75,722
Convertible Debt		287,542		287,542		218,028
Debt Instrument, Convertible, Carrying Amount of Equity Component		0		0		80,098
Debt Instrument, Periodic Payment, Interest		1,203	$ 359	2,406	$ 719
Amortization of Financing Costs		373	158	746	314
Amortization of Debt Discount (Premium)		0	1,568	0	3,114
Interest Expense, Debt		1,576	$ 2,085	3,152	$ 4,147
Debt Instrument, Fair Value Disclosure		$ 342,900		$ 342,900		363,800
Accounting Standards Update 2020-06
Debt Instrument [Line Items]
Debt Instrument, Unamortized Discount and Debt Issuance Cost	$ 68,800
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt	$ 80,100
Notes due 2024 [Member]
Debt Instrument [Line Items]
Convertible debt, issuance cost, equity component						1,100
Debt Instrument, Convertible, Conversion Ratio				15.1394
Debt Instrument, Convertible, Stock Price Trigger | $ / shares				$ 66.05
Debt Instrument, Convertible, Conversion Price | $ / shares		$ 101.62		$ 101.62
Debt Instrument, Face Amount		$ 143,750		$ 143,750
Convertible Debt, Current		0		0
Convertible Debt, Noncurrent		$ 141,210		$ 141,210
Debt Instrument, Convertible, Carrying Amount of Equity Component						32,900
Debt Instrument, Convertible, Remaining Discount Amortization Period				34 months
Purchase of convertible bond hedge				$ 16,400
Debt Instrument, Interest Rate, Stated Percentage		1.00%		1.00%
Notes due 2027
Debt Instrument [Line Items]
Convertible debt, issuance cost, equity component						1,300
Debt Instrument, Convertible, Conversion Ratio				23.9137
Debt Instrument, Convertible, Stock Price Trigger | $ / shares				$ 41.82
Debt Instrument, Convertible, Conversion Price | $ / shares		$ 78.90		$ 78.90
Debt Instrument, Face Amount		$ 150,000		$ 150,000
Convertible Debt, Current		0		0
Convertible Debt, Noncurrent		$ 146,332		$ 146,332
Debt Instrument, Convertible, Carrying Amount of Equity Component						$ 47,200
Debt Instrument, Convertible, Remaining Discount Amortization Period				74 months
Purchase of convertible bond hedge				$ 25,300
Debt Instrument, Interest Rate, Stated Percentage		2.25%		2.25%

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Commitments and Contingencies Purchase commitments (Details) $ in Millions	Jun. 30, 2021 USD ($)
Long-term Purchase Commitment [Line Items]
Purchase Obligation	$ 24.9