8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

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

Date of Report (Date of earliest event reported): May 23, 2023

PROS Holdings, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware
(State or Other Jurisdiction of Incorporation)
001-33554	76-0168604
(Commission File Number)	(IRS Employer Identification No.)

3200 Kirby Drive, Suite 600	Houston	TX		77098
(Address of Principal Executive Offices)				(Zip Code)
Registrant’s telephone number, including area code			(713)	335-5151
(Former Name or Former Address, if Changed Since Last Report)

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. o

Item 7.01 Regulation FD Disclosure.

On May 23, 2023, the Company held an analyst day event for investors and published the presentation slides ("Analyst Day Presentation") on the Investor Relations section of the Company’s website located at https://ir.pros.com/. From time to time, the Company may also present and/or distribute the Analyst Day Presentation to the investment community to provide updates and summaries of its business. A copy of the Analyst Day Presentation is furnished herewith as Exhibit 99.1.

Investors should note that the Company uses the Investor Relations section of its corporate website to announce material information to investors and the marketplace. While not all of the information that the Company posts on its corporate website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in the Company to review the information that it shares on the Investor Relations section of its website.

The information contained in the Analyst Day Presentation is summary information that is intended to be considered in the context of the Company's SEC filings and other public announcements that the Company may make, by press release or otherwise, from time to time. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished pursuant to Item 7.01 and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any registration statement or other document filed with the SEC by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing. The information set forth in this Item 7.01 shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.	Description
99.1	PROS Holdings, Inc. Analyst Day Presentation

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, hereunto duly authorized.

	PROS HOLDINGS, INC.
Date: May 23, 2023		/s/ Damian W. Olthoff
		Damian W. Olthoff
		General Counsel and Secretary

EX-99.1

PROS Holdings, Inc. 2023 Analyst Day Updated May 23, 2023 ir@pros.com

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 2 Disclaimer / Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our financial outlook; expectations; ability to achieve future growth and profitability; management's confidence and optimism; positioning; customer successes; demand for our software solutions; pipeline; business expansion; revenue; subscription revenue; ARR; non-GAAP earnings (loss) per share; adjusted EBITDA; free cash flow; shares outstanding and effective tax rate. The forward-looking statements contained in this presentation are based upon our historical performance and our current plans, estimates and expectations and are not a representation that such plans, estimates or expectations will be achieved. Factors that could cause actual results to differ materially from those described herein include, among others, risks related to: (a) the macroeconomic environment, (b) the effects of inflation, (c) the impact of the COVID-19 pandemic, (d) cyberattacks, data breaches and breaches of security measures within our products, systems and infrastructure or products, systems and infrastructure of third parties upon whom we rely, (e) increasing business from customers and maintaining subscription renewal rates, (f) managing our growth and profit objectives effectively, (g) disruptions from our third party data center, software, data, and other unrelated service providers, (h) implementing our solutions, (i) cloud operations, (j) intellectual property and third-party software, (k) acquiring and integrating businesses and/or technologies, (l) catastrophic events, (m) operating globally, including economic and commercial disruptions, (n) potential downturns in sales and lengthy sales cycles, (o) software innovation, (p) competition, (q) market acceptance of our software innovations, (r) maintaining our corporate culture, (s) personnel risks including loss of any key employees and competition for talent, (t) expanding and training our direct and indirect sales force, (u) evolving data privacy, cyber security and data localization laws, (v) our debt repayment obligations, (w) the timing of revenue recognition and cash flow from operations, (x) migrating customers to our latest cloud solutions, and (y) returning to profitability. Additional information relating to the risks and uncertainties affecting our business is contained in our filings with the SEC. These forward-looking statements represent our expectations as of the date hereof. Subsequent events may cause these expectations to change, and PROS disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise. This presentation includes certain supplemental non-GAAP financial measures, that we believe are useful to investors as tools for assessing the comparability between periods as well as company by company. Our computation of these measures may not be comparable to other similarly titled measures computed by other companies. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, our financial information and results prepared in accordance with U.S. GAAP included in our periodic filings made with the SEC. Investors are encouraged to review the reconciliation of our historical non-GAAP financial measures to the comparable GAAP results, which can be found, along with other financial information, on the investor relations’ page of our website at PROS.com. We are unable to reconcile forward-looking non-GAAP financial measures to their directly comparable GAAP financial measures because the information needed to complete a reconciliation is unavailable at this time without unreasonable effort.

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 3 Analyst Day Agenda Topic Presenter(s) Opening Remarks Belinda Overdeput, Head of Investor Relations Customer Panel Belinda Overdeput (Moderator) Amit Khandelwal, Emirates Airline Art Klebanov, Deluxe Jen Kohlmeyer, Crescent Electric Supply Jason Sprunk, Rockwell Automation Vision, Opportunity & Strategy Andres Reiner, President & Chief Executive Officer Dr. Michael Wu, Chief AI Strategist Go-To-Market Martin Simoncic, President, B2B Go-To-Market Surain Adyanthaya, President, Travel Go-To-Market Financial Model Overview Stefan Schulz, Chief Financial Officer PROS Executive Team Q&A Andres Reiner, President & Chief Executive Officer Dr. Michael Wu, Chief AI Strategist Martin Simoncic, President, B2B Go-To-Market Surain Adyanthaya, President, Travel Go-To-Market Stefan Schulz, Chief Financial Officer

Customer Panel

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 5 Amit Khandelwal Divisional Vice President, Revenue Optimization & Distribution Jen Kohlmeyer Director of Pricing and Profitability Art Klebanov Vice President of Pricing, Promotional Solutions Jason Sprunk Director, Global Revenue Management Systems & Operations

Andres Reiner President & CEO

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 7 Our Vision To optimize every shopping and selling experience.

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 8 The Challenges Businesses Face Today The way we work is evolving. Manual business processes and disconnected digital tools cause more time to be spent on process than on driving business forward. Digitization, automation, and AI are critical for keeping up and driving a better employee experience. Business uncertainty is here to stay. Everything is in a constant state of rapid change – costs, currencies, supply chains, prices, demand patterns – and in response, businesses must constantly change what they sell, how they sell, and how they price. Customers have increasingly higher expectations. Buyers expect every buying experience to be as magical as the best one they have ever had (“the Amazon effect”). Self-serve, personalization, transparency, and accuracy driven by convenience, value, and confidence across all touchpoints.

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 9 The PROS Platform The Solution: An End-to-End Platform Focused on Maximizing Value for Buyers and Sellers Buyer Speed Fair Price Great Value Personalized Seller Real-Time Insights Maximize Revenue Maximize Margin Maximize Volume AI Real-Time Secure Scalable High Availability Extensible Superior UX Insights Powered by an Industry-Leading Real-Time, AI Platform Real-Time Omnichannel Digital Marketing Offer & Order Management Revenue Management / Demand Forecasting Offer Optimization Distribution Digital Experience Group Pricing & Sales Corporate Travel Pricing & Sales Smart Configure, Price, Quote Quote / Contract Product Configuration / Bundling Product Recommendation(s) Product Information Contract Terms Renew / Amend / Extend Subscriptions Smart Price Optimization & Management Price Strategy Discounts Rebates / Promotions Cost Information Product Availability Control Competitor Data / Market Dynamics Indirect Sales / Distributors Direct Sales Independent Agents Marketing Cargo Pricing & Sales Front Office Systems eCommerce / Marketplaces Direct Sales / CRM Partner Portal / Agency Portal / GDS Marketing Systems + Many More API Back Office Systems ERP PSS Excel / Flat Files / Home Grown API + Many More

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 10 Our Definition of AI 10 Automate Learn AI = machine mimicry of certain aspects of human behaviors with 2 important characteristics:

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 11 4 Major Categories of AI Applications 11 AI AUTONOMOUS AI INTERNET AI PERCEPTUAL AI BUSINESS • ancillary offer optimization • cross-sell/upsell recommendation • churn prediction • production planning + scheduling (supply aware optimization) profit optimization revenue/margin • negotiated price optimization • non-negotiated price optimization • EMSR (expected marginal seat rev.) cost • inventory control + optimization • capacity aware optimization • demand forecasting sales/production guidance bu si ne ss pr ob le m s

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 12 How We Leverage AI to Solve Practical Business Problems 12 perceptual (cognitive) internet (personalization) business (decision) autonomous • ancillary offer optimization • cross-sell/upsell recommendation • churn prediction • production planning + scheduling (supply aware optimization) profit optimization revenue/margin • negotiated price optimization • non-negotiated price optimization • EMSR (expected marginal seat rev.) cost • inventory control + optimization • capacity aware optimization • demand forecasting sales/production guidance bu si ne ss pr ob le m s neural networks (NN) • FF wide & deep NN • NN matrix factorization online learning • Bayesian inference • variational inference decision trees • gradient boosting • random forest many semi-parametric + parametric estimation predictive prescriptive operations research • linear programming • nonlinear programming • dynamic programing • integer programming reinforcement learning • multi-arm bandit • Thompson sampling • upper confidence bound data science techniques • constraint satisfaction programming • Shapley value (SHAP) • kNN clustering • extensible AI recommender system • collaborative filtering human-computer interaction • ChatGPT (Azure OpenAI) le ar ni ng p ar ad ig m s, m od el s + to ol s Gen IV price optimizationPROS AI

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 13 The TAM PROS Addresses is Massive, Global, and Growing $38B+ Underpenetrated, Addressable Market(1) $14B+ Strategic Industries & Geographies $3.2B Automotive & Industrial $3.3B Travel $2.1B Healthcare $1.9B Technology $1.8B Food & Consumables $1.1B Business Services $800mm Chemicals & Energy 1) TAM represents our estimated global total revenue and market opportunity but does not represent the actual market opportunity that we may target or ultimately service or otherwise derive revenue from. Our estimate of TAM may be revised in the future depending on a variety of factors, including competitive dynamics, our sales efforts, customer needs, industry shifts and other economic factors. • Expanded Travel portfolio with Digital Offer Marketing, Offer Optimization, Digital Experience and Corporate Travel solutions • Expanded to include companies’ size $100M+ with the launch of the PROS Platform and SaaS modules

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 14 Strategic Focus Areas Land the Platform, Realize Value, and Expand with Many Paths Leverage Partnerships to Accelerate deal Velocity Accelerate Customer Time to Value

Martin Simoncic President, B2B Go-To-Market

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 16 Consistently Winning Logos Across a Diverse Set of Industries TechnologyHealthcare Chemicals & Energy Food & Consumables 4 of top 30 global food manufacturers 4 of top 12 global medical device companies 2 of top 3 global PC manufacturers 4 of top 10 global oil and gas companies 2 of top 4 US railroad companies ServicesAutomotive & Industrial 3 of top 10 global industrial distributors

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 17 PROS Industry-Leading Real-Time, AI Platform Modular & Composable Real-Time Omnichannel

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 18 The Only Platform Ranked a Leader in PO&M and CPQ Leader in Gartner’s Magic Quadrant for CPQ Leader in IDC MarketScape for Price Optimization & Management Named to the Shortlist for CPQ and Price Optimization

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 19 The PROS Platform is Proven to Drive Profitable Growth 400% ROI in 3 years Payback in 9 months & Source: Forrester Total Economic Impact Report, 2023 +8% Revenue Uplift +200 bp Margin Improvement +67% Efficiency Gain Source: PROS study of 131 customers’ self-reported results, 2022

Land Realize Expand

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 21 Proven Success in Executing Land & Expand Strategy $425k $3.3M Q1'18 Q1'23 Multinational Oil & Gas Company 7.7x $136k $928k Q1'18 Q1'23 Industrial Equipment Distributor 6.8x $527k $4.1M Q1'18 Q1'23 Industrial Manufacturing Conglomerate 7.7x $229k $1.4M Q1'18 Q1'23 Leading B2B Distributor 6.2x

Surain Adyanthaya President, Travel Go-To-Market

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 23 The airline industry is going through rapid evolution

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 24 Positioning PROS as the Leader in Offer & Order Management Revenue Management Assortment Optimization RM based on classes dynamic availability with fare strategies Price Adjustments Dynamic pricing with class-based adjustments Continuous Pricing Dynamic pricing using willingness-to-pay AI Deliver Continuous Price Through all channels and supported in retail strategies Offer Optimization Fare Families and Ancillary Catalog Business rule driven product and bundle (fare and ancillary) strategies Personalization through Segmentation Product differentiation based on passenger type and context Dynamic Pricing of Ancillaries Price determination of products based on AI Dynamic Personalized Bundles Product and price determination of products based on AI Distribution Direct Connect to MSE PSS offload and cost optimization through direct distribution to MSEs Direct Connect Channel Strategies Control and flexibility over channel distribution through business rules Full Offer Management through NDC NDC-enabled product, price and distribution rules determination per channel, sub-channel and individual seller Full Order Management through NDC NDC-enabled management of orders through the entire lifecycle from booking to fulfilment Digital Experience Branded Fares + Affinity Shopping Differentiated shopping experience with brand selection and inspirational flight search apps Integration of Ancillaries & 3rd Party Products More variety of choice and air & non-air extras incorporated in the booking flow Self-Service End-to-end shopping cart management through the direct digital channel: flight changes & refunds, ancillary purchase, etc. Flexible UX/UI with Experimentation Flexibility through A/B testing, performance monitoring and business rules. Digital Offer Marketing Group, Corporate Travel & Cargo Pricing & Sales Enabling airlines to become digital retailers, powering end-to-end travel experiences from inspiration to booking to fulfillment

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 25 Land, Realize, Expand to Capture Our Growing TAM $3.3B+ Estimated Travel Total Addressable Market • Expanded portfolio with Digital Offer Marketing, Offer Optimization, Digital Experience and Corporate Travel solutions • “Essentials” packages and modularized capabilities allow for adoption by airlines of any size at lower entry points • Land, Realize, Expand Strategy to drive further market penetration and extend our leadership position TAM represents our estimated global total revenue and market opportunity but does not represent the actual market opportunity that we may target or ultimately service or otherwise derive revenue from. Our estimate of TAM may be revised in the future depending on a variety of factors, including competitive dynamics, our sales efforts, customer needs, industry shifts and other economic factors.

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 26 Extensive Opportunity to Expand Wallet Share in Existing Accounts $38k $282k Q2'21 Q1'23 Passenger Airline 1 7.5x $639k $3.1M Q1'18 Q1'23 Passenger Airline 3 4.8x $262k $1.6M Q1'18 Q1'23 Passenger Airline 2 6.3x $1.3M $5.1M Q1'18 Q1'23 Passenger Airline 4 4x

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 27 PROS is the Trusted Innovation Partner for Airlines Around the Globe 50% of global passengers processed by PROS solutions Airline customers on 6 continents Source: T2RL, 2022 Passenger Volumes 55 of the world’s top 100 airlines use PROS 93 of the world’s top 200 airlines use PROS

Stefan Schulz Chief Financial Officer

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 29 Foundation for Improving Revenue Growth and Profit Expansion • Track Record for 20+% Revenue Growth and Strong Gross Retention Rates • PROS Platform Provides Greater Access to Industry-Best Solutions • Significantly More Transactions in Last Two Years • Newly Packaged Modules are Offered at Lower Entry Points • Subscription Gross Margins Have Improved by Nearly 20 Percentage Points • Industry’s Most Complete AI • Leveraging Up-to-the-Second Data to Provide Real Time Predictions • Multiple Algorithms (including Neural Network) to Solve Many Different Business Challenges • Global Airline Industry Continues to Recover • IATA Projects 2019 Volumes Will Return During 2024 • Airlines in Recovered Geographies are Making Software Investments

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 30 PROS Has Delivered Long-Term Sustainable Growth $29 $38 $61 $99 $145 $170 $178 $204 $71 $97 $118 $145 $186 $168 $153 $169 $197 $250 $252 $251 $276 CY10A CY11A CY12A CY13A CY14A CY15A CY16A CY17A CY18A CY19A CY20A CY21A CY22A Total Revenue ($MM) Subscription Transition CY15 – CY19 GTM Transformation CY22 - Ongoing 49% CY15 – CY19 Subscription CAGR COVID CY20 – CY21 27% CY10 – CY14 Revenue CAGR Subscription Revenue

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 31 $29 $38 $61 $99 $145 $170 $178 $204 CY15A CY16A CY17A CY18A CY19A CY20A CY21A CY22A Subscription Services Maintenance Subscription Revenue ($MM) 49% CY15 – CY19 CAGR 32% CY15 – CY22 CAGR 74% 10% 16% 17% 19% 38% 26% Subscription Maintenance Services License Subscription Transition is Largely Complete

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 32 Consistently Strong Gross Retention Rate 93+%

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 33 Subscription Gross Margin Expansion Progress (Non-GAAP) 62% 58% 59% 68% 73% 72% 71% 77% CY15A CY16A CY17A CY18A CY19A CY20A CY21A CY22A

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 34 Targeting “Rule of 40” in Three Years 16-21% 19-24% Total Revenue Growth Free Cash Flow Margin Financial targets assume macroeconomic conditions remain consistent with conditions as of the time of this presentation.

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 35 Profitability Improvements Starts with Gross Margins 2022A 2026E -1% 10-12% Non-GAAP Services Gross Margin 2022A 2026E 80-82% 77% Non-GAAP Subscription Gross Margin 2022A 2026E 69-71% 64% Non-GAAP Gross Margin

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 36 Other Keys to Achieve “Rule of 40” Metric CY2022 Actuals 2026 Targets Subscription Revenue Growth Rate 15% 18-22% Expense1 to Revenue Ratio Research & Development 29% 19-21% Sales & Marketing 28% 23-26% General & Administrative 14% 10-12% 1) For purposes of the E/R ratios presented, historical non-GAAP expense was utilized. For reconciliations of 2022 non-GAAP operating expenses to GAAP, refer to the supplemental tables in our Q4 & FY 2022 earnings press release.

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 37 To Summarize… • We know what it takes to build a 20+% growth business • Significant progress towards profitability • Today’s B2B and Travel solutions are more capable and consumable through the PROS Platform • The gap between our technology and our competitor’s technology has widened • Adoption of AI is increasing by the day

PROS Executive Team Q&A

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 39 Andres D. Reiner President & CEO Stefan Schulz Chief Financial Officer Surain Adyanthaya President, Travel GTM Martin Simoncic President, B2B GTM Michael Wu Chief AI Strategist

Thank You Visit pros.com or contact ir@pros.com for more information.

Appendix

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 42 Supplemental Information – Explanation of Non-GAAP Measures PROS has provided certain financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP gross profit, non-GAAP gross margin, non-GAAP subscription gross margin, non-GAAP recurring revenue gross margin, adjusted EBITDA and free cash flow. PROS uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating PROS’ ongoing operational performance and cloud transition. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in these tables and in the earnings press release. PROS' use of non-GAAP financial measures may not be consistent with the presentations by similar companies in PROS' industry. Non-GAAP gross profit: Non-GAAP gross profit is defined as GAAP gross profit less amortization of acquisition-related intangibles, severance and share-based compensation costs allocated to cost of subscription, maintenance and support, and services. Non-GAAP gross margin is calculated as the percentage of non-GAAP gross profit divided by total revenue. Non-GAAP subscription gross margin and recurring revenue gross margin are similarly calculated to compare the non-GAAP gross profit of subscription revenue and recurring revenue (subscription, maintenance and support revenue), respectively, to total subscription and recurring revenue, respectively. In calculating the non-GAAP gross profit of subscription revenue, the total costs of subscription are adjusted to reduce such costs by the portion of amortization of acquisition-related intangibles, severance and share-based compensation costs allocated to cost of subscription. In calculating the non-GAAP gross profit of recurring revenue, the total costs of subscription, maintenance and support are adjusted to reduce such costs by the portion of amortization of acquisition-related intangibles, severance and share-based compensation costs allocated to cost of subscription and cost of maintenance and support. Adjusted EBITDA: Adjusted EBITDA is defined as GAAP net income (loss) before interest expense, provision for income taxes, depreciation and amortization, as adjusted to eliminate the effect of stock-based compensation cost, severance, acquisition-related expenses, amortization of acquisition-related intangibles, and depreciation and amortization. Adjusted EBITDA should not be considered as an alternative to net loss as an indicator of our operating performance. Free Cash Flow: Free cash flow is a non-GAAP financial measure which is defined as net cash provided by (used in) operating activities, excluding severance payments, less capital expenditures (excluding expenditures for PROS new headquarters), purchases of other (non-acquisition-related) intangible assets and capitalized internal-use software development costs.

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 43 Supplemental Information - GAAP to Non-GAAP Reconciliations (In thousands, Unaudited) Gross Profit Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 GAAP Gross Profit $ 35,997 $ 36,619 $ 38,996 $ 39,131 $ 40,721 $ 42,738 $ 43,467 $ 43,640 Amortization of acquisition-related intangibles 391 384 752 1,983 1,685 1,555 1,441 1,337 Severance - - - - - - 245 749 Share-based compensation 976 951 926 825 1,006 1,050 1,017 832 Non-GAAP Gross Profit $ 37,364 $ 37,954 $ 40,674 $ 41,939 $ 43,412 $ 45,343 $ 46,170 $ 46,558 Non-GAAP Gross Margin 60% 61% 63% 63% 64% 64% 65% 64% Subscription Gross Profit Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 GAAP Subscription Gross Profit $ 30,635 $ 30,997 $ 34,109 $ 34,986 $ 36,640 $ 37,934 $ 39,442 $ 41,876 Amortization of acquisition-related intangibles 391 384 752 1,983 1,685 1,555 1,441 1,337 Severance - - - - - - 8 125 Share-based compensation 178 182 207 151 185 174 148 125 Non-GAAP Subscription Gross Profit $ 31,204 $ 31,563 $ 35,068 $ 37,120 $ 38,510 $ 39,663 $ 41,039 $ 43,463 Non-GAAP Subscription Gross Margin 71% 72% 75% 76% 76% 77% 77% 78% Recurring Revenue Gross Profit Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 GAAP Recurring Revenue Gross Profit $ 37,048 $ 37,430 $ 40,446 $ 40,674 $ 41,901 $ 43,053 $ 43,962 $ 45,306 Amortization of acquisition-related intangibles 391 384 752 1,983 1,685 1,555 1,441 1,337 Severance - - - - - - 8 432 Share-based compensation 305 313 343 242 283 283 266 205 Non-GAAP Recurring Revenue Gross Profit $ 37,744 $ 38,127 $ 41,541 $ 42,899 $ 43,869 $ 44,891 $ 45,677 $ 47,280 Non-GAAP Recurring Revenue Gross Margin 71% 72% 75% 76% 76% 76% 77% 77% Adjusted EBITDA Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 GAAP Loss From Operations $ (16,306) $ (15,808) $ (21,639) $ (26,503) $ (20,537) $ (16,181) $ (14,873) $ (18,796) Acquisition-related expenses - - 2,386 - - - - - Amortization of acquisition-related intangibles 885 845 1,420 2,975 2,597 2,221 1,973 1,806 Severance - - - 1,508 - - 4,034 3,586 Share-based compensation 8,606 8,634 9,665 11,225 10,766 10,626 10,097 9,904 Depreciation and other amortization 2,139 1,891 1,812 1,672 1,204 1,174 1,151 1,195 Adjusted EBITDA $ (4,676) $ (4,438) $ (6,356) $ (9,123) $ (5,970) $ (2,160) $ 2,382 $ (2,305) Free Cash Flow Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Cash Flow From Operations $ (4,985) $ (8,171) $ (970) $ (11,014) $ (1,931) $ (8,991) $ (1,970) $ (6,413) Severance - - - - - - 3,058 3,170 Purchase of property and equipment (excluding new headquarters) (741) (347) (364) (461) (308) (76) (16) (1,546) Free Cash Flow $ (5,726) $ (8,518) $ (1,334) $ (11,475) $ (2,239) $ (9,067) $ 1,072 $ (4,519)

©2023 PROS, Inc. All rights reserved. Confidential and Proprietary page 44 Supplemental Information - GAAP to Non-GAAP Reconciliations (In thousands, Unaudited) Subscription Gross Profit CY'15 CY'16 CY'17 CY'18 CY'19 CY'20 CY'21 CY'22 GAAP Subscription Gross Profit $ 16,203 $ 20,779 $ 32,681 $ 63,089 $ 102,988 $ 118,800 $ 124,588 $ 149,002 Amortization of acquisition-related intangibles 1,519 1,277 2,603 3,942 3,249 2,928 1,935 6,664 Severance - - - - - - - 8 New headquarters noncash rent expense - - - 5 64 42 - - Share-based compensation 124 249 237 218 280 423 715 658 Non-GAAP Subscription Gross Profit $ 17,846 $ 22,305 $ 35,521 $ 67,254 $ 106,581 $ 122,193 $ 127,238 $ 156,332 Non-GAAP Subscription Gross Margin 62% 58% 59% 68% 73% 72% 71% 77%

XML

Document and Entity Information Document	Feb. 09, 2023
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	May 23, 2023
Entity Registrant Name	PROS Holdings, Inc.
Entity Central Index Key	0001392972
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity File Number	001-33554
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
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock $0.001 par value per share
Trading Symbol	PRO
Security Exchange Name	NYSE
Entity Emerging Growth Company	false