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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Pros Holding Inc | NYSE:PRO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-1.14 | -3.32% | 33.16 | 34.31 | 33.04 | 34.31 | 119,313 | 19:42:55 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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76-0168604
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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3100 Main Street, Suite 900
Houston TX
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77002
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(Address of Principal Executive Offices)
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(Zip Code)
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(713) 335-5151
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||
(Registrant's telephone number, including area code)
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Large Accelerated Filer
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o
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Accelerated Filer
|
x
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Non-Accelerated Filer
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o
(do not check if a smaller reporting company)
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Smaller Reporting Company
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o
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Page
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Item 1.
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Item 4.
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||
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Item 1.
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||
Item 1A.
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Item 2.
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||
Item 3.
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||
Item 4.
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||
Item 5.
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Item 6.
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||
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June 30, 2017
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|
December 31, 2016
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||||
Assets:
|
|
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|
||||
Current assets:
|
|
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|
||||
Cash and cash equivalents
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$
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197,969
|
|
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$
|
118,039
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Short-term investments
|
6,000
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|
|
15,996
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||
Accounts and unbilled receivables, net of allowance of $760
|
33,258
|
|
|
33,285
|
|
||
Prepaid and other current assets
|
7,011
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|
|
6,337
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||
Total current assets
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244,238
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|
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173,657
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||
Property and equipment, net
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14,614
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15,238
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||
Intangibles, net
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11,844
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12,650
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||
Goodwill
|
20,908
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20,096
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Other long-term assets
|
6,378
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|
|
6,013
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Total assets
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$
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297,982
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$
|
227,654
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Liabilities and Stockholders' Equity:
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|
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||||
Current liabilities:
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|
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||||
Accounts payable and other liabilities
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$
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5,300
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|
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$
|
2,744
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|
Accrued liabilities
|
10,420
|
|
|
7,279
|
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||
Accrued payroll and other employee benefits
|
9,740
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|
18,349
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Deferred revenue
|
71,348
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|
|
68,349
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||
Total current liabilities
|
96,808
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|
96,721
|
|
||
Long-term deferred revenue
|
13,514
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11,389
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Convertible debt, net
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207,468
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122,299
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||
Other long-term liabilities
|
655
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|
639
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|
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Total liabilities
|
318,445
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231,048
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Commitments and contingencies (Note 6)
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|
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||||
Stockholders' equity:
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||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued
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—
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|
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—
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Common stock, $0.001 par value, 75,000,000 shares authorized; 36,123,975 and 35,001,236 shares issued, respectively; 31,706,390 and 30,583,651 shares outstanding, respectively
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36
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|
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35
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||
Additional paid-in capital
|
196,962
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175,678
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||
Treasury stock, 4,417,585 common shares, at cost
|
(13,938
|
)
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(13,938
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)
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||
Accumulated deficit
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(199,979
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)
|
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(160,259
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)
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Accumulated other comprehensive loss
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(3,544
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)
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(4,910
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)
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Total stockholders' equity
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(20,463
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)
|
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(3,394
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)
|
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Total liabilities and stockholders' equity
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$
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297,982
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|
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$
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227,654
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
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2017
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2016
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2017
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2016
|
||||||||
Revenue:
|
|
|
|
|
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|
||||||||
Subscription
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$
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13,434
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|
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$
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9,143
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$
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25,648
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|
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$
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17,344
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Maintenance and support
|
17,132
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16,775
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35,208
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33,437
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||||
Total subscription, maintenance and support
|
30,566
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25,918
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60,856
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50,781
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||||
License
|
1,090
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2,457
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|
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3,280
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|
|
5,759
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|
||||
Services
|
8,750
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|
8,663
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|
16,399
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|
|
18,426
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|
||||
Total revenue
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40,406
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|
37,038
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|
80,535
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|
74,966
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Cost of revenue:
|
|
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||||||||
Subscription
|
5,800
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|
|
4,088
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|
|
11,737
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|
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7,534
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|
||||
Maintenance and support
|
2,881
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|
3,578
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6,027
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6,850
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|
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Total cost of subscription, maintenance and support
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8,681
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7,666
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17,764
|
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|
14,384
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||||
License
|
72
|
|
|
99
|
|
|
137
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|
|
161
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|
||||
Services
|
7,333
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|
|
8,283
|
|
|
14,794
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|
|
17,214
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|
||||
Total cost of revenue
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16,086
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16,048
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32,695
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31,759
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|
||||
Gross profit
|
24,320
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|
20,990
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|
|
47,840
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|
|
43,207
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|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Selling and marketing
|
17,172
|
|
|
16,066
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|
33,645
|
|
|
34,084
|
|
||||
General and administrative
|
9,782
|
|
|
9,616
|
|
|
20,190
|
|
|
18,657
|
|
||||
Research and development
|
14,076
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|
13,358
|
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|
28,383
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|
26,490
|
|
||||
Loss from operations
|
(16,710
|
)
|
|
(18,050
|
)
|
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(34,378
|
)
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(36,024
|
)
|
||||
Convertible debt interest and amortization
|
(2,590
|
)
|
|
(2,317
|
)
|
|
(4,984
|
)
|
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(4,604
|
)
|
||||
Other expense, net
|
(64
|
)
|
|
(55
|
)
|
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(32
|
)
|
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(113
|
)
|
||||
Loss before income tax provision
|
(19,364
|
)
|
|
(20,422
|
)
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(39,394
|
)
|
|
(40,741
|
)
|
||||
Income tax provision
|
149
|
|
|
105
|
|
|
326
|
|
|
263
|
|
||||
Net loss
|
$
|
(19,513
|
)
|
|
$
|
(20,527
|
)
|
|
$
|
(39,720
|
)
|
|
$
|
(41,004
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
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(0.62
|
)
|
|
$
|
(0.68
|
)
|
|
$
|
(1.27
|
)
|
|
$
|
(1.35
|
)
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
31,615
|
|
|
30,330
|
|
|
31,357
|
|
|
30,278
|
|
||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
$
|
1,116
|
|
|
$
|
(394
|
)
|
|
$
|
1,376
|
|
|
$
|
362
|
|
Unrealized gain (loss) on available-for-sale securities
|
3
|
|
|
21
|
|
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(10
|
)
|
|
26
|
|
||||
Other comprehensive income (loss), net of tax
|
1,119
|
|
|
(373
|
)
|
|
1,366
|
|
|
388
|
|
||||
Comprehensive loss
|
$
|
(18,394
|
)
|
|
$
|
(20,900
|
)
|
|
$
|
(38,354
|
)
|
|
$
|
(40,616
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(39,720
|
)
|
|
$
|
(41,004
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
4,005
|
|
|
4,973
|
|
||
Amortization of debt discount and issuance costs
|
3,510
|
|
|
3,166
|
|
||
Share-based compensation
|
12,094
|
|
|
11,253
|
|
||
Deferred income tax, net
|
33
|
|
|
42
|
|
||
Provision for doubtful accounts
|
—
|
|
|
(139
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts and unbilled receivables
|
137
|
|
|
2,480
|
|
||
Prepaid expenses and other assets
|
(981
|
)
|
|
(804
|
)
|
||
Accounts payable and other liabilities
|
2,838
|
|
|
(1,454
|
)
|
||
Accrued liabilities
|
287
|
|
|
640
|
|
||
Accrued payroll and other employee benefits
|
(8,601
|
)
|
|
(2,246
|
)
|
||
Deferred revenue
|
5,089
|
|
|
13,721
|
|
||
Net cash used in operating activities
|
(21,309
|
)
|
|
(9,372
|
)
|
||
Investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(695
|
)
|
|
(5,339
|
)
|
||
Capitalized internal-use software development costs
|
(1,308
|
)
|
|
(72
|
)
|
||
Purchases of short-term investments
|
—
|
|
|
(88,928
|
)
|
||
Proceeds from maturities of short-term investments
|
9,983
|
|
|
49,500
|
|
||
Net cash provided by (used in) investing activities
|
7,980
|
|
|
(44,839
|
)
|
||
Financing activities:
|
|
|
|
||||
Exercise of stock options
|
5,276
|
|
|
14
|
|
||
Proceeds from employee stock plans
|
776
|
|
|
470
|
|
||
Tax withholding related to net share settlement of stock awards
|
(5,754
|
)
|
|
(4,839
|
)
|
||
Payments of notes payable
|
(155
|
)
|
|
(91
|
)
|
||
Debt issuance costs related to Revolver
|
(125
|
)
|
|
—
|
|
||
Proceeds from issuance of convertible debt, net
|
93,500
|
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
93,518
|
|
|
(4,446
|
)
|
||
Effect of foreign currency rates on cash
|
(259
|
)
|
|
38
|
|
||
Net change in cash and cash equivalents
|
79,930
|
|
|
(58,619
|
)
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
118,039
|
|
|
161,770
|
|
||
End of period
|
$
|
197,969
|
|
|
$
|
103,151
|
|
•
|
there is persuasive evidence of an arrangement;
|
•
|
the service has been or is being provided to the customer;
|
•
|
collection of the fee is reasonably assured; and
|
•
|
the amount of fees to be paid by the customer is fixed and determinable.
|
Award type
|
|
June 30, 2017
|
|
December 31, 2016
|
||
Stock options
|
|
215
|
|
|
734
|
|
Restricted stock units (time-based)
|
|
2,294
|
|
|
2,237
|
|
Restricted stock units (market-based)
|
|
460
|
|
|
460
|
|
Stock appreciation rights
|
|
391
|
|
|
515
|
|
Market stock units
|
|
347
|
|
|
342
|
|
|
|
June 30, 2017
|
Volatility
|
|
45.88%
|
Risk-free interest rate
|
|
1.52%
|
Expected option life in years
|
|
3.10
|
Dividend yield
|
|
—
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands, except per share data)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(19,513
|
)
|
|
$
|
(20,527
|
)
|
|
$
|
(39,720
|
)
|
|
$
|
(41,004
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares (basic)
|
31,615
|
|
|
30,330
|
|
|
31,357
|
|
|
30,278
|
|
||||
Dilutive effect of potential common shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average shares (diluted)
|
31,615
|
|
|
30,330
|
|
|
31,357
|
|
|
30,278
|
|
||||
Basic loss per share
|
$
|
(0.62
|
)
|
|
$
|
(0.68
|
)
|
|
$
|
(1.27
|
)
|
|
$
|
(1.35
|
)
|
Diluted loss per share
|
$
|
(0.62
|
)
|
|
$
|
(0.68
|
)
|
|
$
|
(1.27
|
)
|
|
$
|
(1.35
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Share-based compensation:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
$
|
515
|
|
|
$
|
577
|
|
|
$
|
1,090
|
|
|
$
|
1,176
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Selling and marketing
|
1,131
|
|
|
1,697
|
|
|
2,404
|
|
|
3,477
|
|
||||
General and administrative
|
2,880
|
|
|
2,302
|
|
|
5,682
|
|
|
4,032
|
|
||||
Research and development
|
1,406
|
|
|
1,293
|
|
|
2,918
|
|
|
2,568
|
|
||||
Total included in operating expenses
|
5,417
|
|
|
5,292
|
|
|
11,004
|
|
|
10,077
|
|
||||
Total share-based compensation expense
|
$
|
5,932
|
|
|
$
|
5,869
|
|
|
$
|
12,094
|
|
|
$
|
11,253
|
|
•
|
during any calendar quarter commencing after the calendar quarter ending on March 31, 2015, if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
|
•
|
during the five consecutive business day period immediately following any five consecutive trading day period in which the trading price per $1,000 principal amount of 2019 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; or
|
•
|
upon the occurrence of specified corporate events.
|
•
|
during any calendar quarter commencing after the calendar quarter ending September 30, 2017, if the last reported sale price of the Company's common stock for 20 or more trading days (whether or not consecutive) in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 130% of the applicable conversion price in effect on each such trading day;
|
•
|
during the five consecutive business day period immediately following any five consecutive trading day period (the "Measurement Period") in which the trading price per 2047 Note for each day of that Measurement Period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such day; or
|
•
|
upon the occurrence of specified corporate events.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Liability component:
|
|
|
|
||||
Principal
|
$
|
250,000
|
|
|
$
|
143,750
|
|
Less: debt discount and issuance cost, net of amortization
|
(42,532
|
)
|
|
(21,451
|
)
|
||
Net carrying amount
|
$
|
207,468
|
|
|
$
|
122,299
|
|
|
|
|
|
||||
Equity component (1)
|
$
|
37,560
|
|
|
$
|
28,714
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
2.0% coupon
|
$
|
772
|
|
|
$
|
719
|
|
|
$
|
1,491
|
|
|
$
|
1,438
|
|
Amortization of debt issuance costs
|
228
|
|
|
207
|
|
|
442
|
|
|
411
|
|
||||
Amortization of debt discount
|
1,590
|
|
|
1,391
|
|
|
3,051
|
|
|
2,755
|
|
||||
Total
|
$
|
2,590
|
|
|
$
|
2,317
|
|
|
$
|
4,984
|
|
|
$
|
4,604
|
|
Year Ending December 31,
|
|
Amount
|
||
Remaining 2017
|
|
$
|
1,849
|
|
2018
|
|
2,754
|
|
|
2019
|
|
2,043
|
|
|
2020
|
|
902
|
|
|
2021
|
|
415
|
|
|
2022 and thereafter
|
|
143
|
|
|
Total minimum lease payments
|
|
$
|
8,106
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net cash used in operating activities
|
|
$
|
(9,116
|
)
|
|
$
|
(6,608
|
)
|
|
$
|
(21,309
|
)
|
|
$
|
(9,372
|
)
|
Purchase of property and equipment
|
|
(211
|
)
|
|
(1,817
|
)
|
|
(695
|
)
|
|
(5,339
|
)
|
||||
Capitalized internal-use software development costs
|
|
(736
|
)
|
|
(72
|
)
|
|
(1,308
|
)
|
|
(72
|
)
|
||||
Free Cash Flow
|
|
$
|
(10,063
|
)
|
|
$
|
(8,497
|
)
|
|
$
|
(23,312
|
)
|
|
$
|
(14,783
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
Revenue
|
|
Percent
|
|
Revenue
|
|
Percent
|
|
Revenue
|
|
Percent
|
|
Revenue
|
|
Revenue
|
||||||||||||
United States of America
|
$
|
15,199
|
|
|
38
|
%
|
|
$
|
13,706
|
|
|
37
|
%
|
|
$
|
31,029
|
|
|
38
|
%
|
|
$
|
28,182
|
|
|
38
|
%
|
Europe
|
11,076
|
|
|
27
|
%
|
|
11,238
|
|
|
30
|
%
|
|
22,482
|
|
|
28
|
%
|
|
22,068
|
|
|
29
|
%
|
||||
The rest of the world
|
14,131
|
|
|
35
|
%
|
|
12,094
|
|
|
33
|
%
|
|
27,024
|
|
|
34
|
%
|
|
24,716
|
|
|
33
|
%
|
||||
Total revenue
|
$
|
40,406
|
|
|
100
|
%
|
|
$
|
37,038
|
|
|
100
|
%
|
|
$
|
80,535
|
|
|
100
|
%
|
|
$
|
74,966
|
|
|
100
|
%
|
•
|
We intend to continue investing for long-term growth. We have invested, and expect to continue to invest, in product development to enhance our existing technologies and develop new applications and technologies. In addition, we plan to continue to expand our ability to sell our subscription offerings globally through investments in sales and marketing and cloud support and infrastructure. These investments will increase our costs on an absolute basis in the near-term.
|
•
|
Since 2016, we have sold more subscription-based solutions and a lower percentage of perpetual licenses as part of our cloud strategy, and we expect this trend to continue. This increase in the sales of subscription-based solutions has resulted in an increase in our subscription revenue, and deferred more of our revenue recognition to later periods than we experienced prior to the announcement of our cloud-first strategy in 2015. We also expect that the trend in sales of subscription-based solutions will result in a decrease over time in our maintenance and support revenue over time.
|
•
|
During 2016 and in early 2017, the global economic environment continued to show signs of uncertainty regarding future domestic and global economic growth, and the global financial system experienced numerous ongoing geopolitical issues around the globe. During times of uncertain economic conditions, we generally experience longer sales cycles, increased scrutiny on purchasing decisions and overall cautiousness by customers. Certain foreign countries continue to face significant economic, political and social crises, and it is possible that these crises could result in economic deterioration in the markets in which we operate. This economic uncertainty may negatively affect the overall demand environment in fiscal 2017, particularly in the U.S. and Europe. These changes, and other effects we cannot anticipate, may negatively impact our business, business operations, results of operations, financial condition and cash flows. We believe that our expanded offerings of industry-specific solutions and innovative technology will enable us to stay competitive in a challenging economic environment as business leaders continue to focus on projects that quickly deliver value, however the extent to which the current economic conditions will further affect our business is uncertain.
|
•
|
Our income tax rates vary from the federal and state statutory rates due to the valuation allowances on our deferred tax assets and foreign withholding taxes; changing tax laws, regulations, and interpretations in multiple jurisdictions in which we operate; changes to the financial accounting rules for income taxes; unanticipated changes in tax rates; differences in accounting and tax treatment of our equity-based compensation and the tax effects of purchase accounting for acquisitions. We expect this fluctuation in income tax rates to continue as well as its potential impact on our results of operations.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Revenue:
|
|
|
|
|
|
|
|
||||
Subscription
|
33
|
%
|
|
25
|
%
|
|
32
|
%
|
|
23
|
%
|
Maintenance and support
|
42
|
|
|
45
|
|
|
44
|
|
|
45
|
|
Total subscription, maintenance and support
|
76
|
|
|
70
|
|
|
76
|
|
|
68
|
|
License
|
3
|
|
|
7
|
|
|
4
|
|
|
8
|
|
Services
|
22
|
|
|
23
|
|
|
20
|
|
|
25
|
|
Total revenue
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
||||
Subscription
|
14
|
|
|
11
|
|
|
15
|
|
|
10
|
|
Maintenance and support
|
7
|
|
|
10
|
|
|
7
|
|
|
9
|
|
Total cost of subscription, maintenance and support
|
21
|
|
|
21
|
|
|
22
|
|
|
19
|
|
License
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Services
|
18
|
|
|
22
|
|
|
18
|
|
|
23
|
|
Total cost of revenue
|
40
|
|
|
43
|
|
|
41
|
|
|
42
|
|
Gross profit
|
60
|
|
|
57
|
|
|
59
|
|
|
58
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
||||
Selling and marketing
|
42
|
|
|
43
|
|
|
42
|
|
|
45
|
|
General and administrative
|
24
|
|
|
26
|
|
|
25
|
|
|
25
|
|
Research and development
|
35
|
|
|
36
|
|
|
35
|
|
|
35
|
|
Total operating expenses
|
102
|
|
|
105
|
|
|
102
|
|
|
106
|
|
Convertible debt interest and amortization
|
(6
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
(6
|
)
|
Other income (expense), net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Loss before income tax provision
|
(48
|
)
|
|
(55
|
)
|
|
(49
|
)
|
|
(54
|
)
|
Income tax provision
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net loss
|
(48
|
)%
|
|
(55
|
)%
|
|
(49
|
)%
|
|
(55
|
)%
|
|
Three Months Ended June 30,
|
|
Variance
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||||||||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Subscription
|
$
|
13,434
|
|
|
$
|
9,143
|
|
|
$
|
4,291
|
|
|
47
|
%
|
|
$
|
25,648
|
|
|
$
|
17,344
|
|
|
$
|
8,304
|
|
|
48
|
%
|
Maintenance and support
|
17,132
|
|
|
16,775
|
|
|
357
|
|
|
2
|
%
|
|
35,208
|
|
|
33,437
|
|
|
1,771
|
|
|
5
|
%
|
||||||
Total subscription, maintenance and support
|
30,566
|
|
|
25,918
|
|
|
4,648
|
|
|
18
|
%
|
|
60,856
|
|
|
50,781
|
|
|
10,075
|
|
|
20
|
%
|
||||||
License
|
1,090
|
|
|
2,457
|
|
|
(1,367
|
)
|
|
(56
|
)%
|
|
3,280
|
|
|
5,759
|
|
|
(2,479
|
)
|
|
(43
|
)%
|
||||||
Services
|
8,750
|
|
|
8,663
|
|
|
87
|
|
|
1
|
%
|
|
16,399
|
|
|
18,426
|
|
|
(2,027
|
)
|
|
(11
|
)%
|
||||||
Total revenue
|
$
|
40,406
|
|
|
$
|
37,038
|
|
|
$
|
3,368
|
|
|
9
|
%
|
|
$
|
80,535
|
|
|
$
|
74,966
|
|
|
$
|
5,569
|
|
|
7
|
%
|
|
Three Months Ended June 30,
|
|
Variance
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||||||||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Cost of subscription
|
$
|
5,800
|
|
|
$
|
4,088
|
|
|
$
|
1,712
|
|
|
42
|
%
|
|
$
|
11,737
|
|
|
$
|
7,534
|
|
|
$
|
4,203
|
|
|
56
|
%
|
Cost of maintenance and support
|
2,881
|
|
|
3,578
|
|
|
(697
|
)
|
|
(19
|
)%
|
|
6,027
|
|
|
6,850
|
|
|
(823
|
)
|
|
(12
|
)%
|
||||||
Total cost of subscription, maintenance and support
|
8,681
|
|
|
7,666
|
|
|
1,015
|
|
|
13
|
%
|
|
17,764
|
|
|
14,384
|
|
|
3,380
|
|
|
23
|
%
|
||||||
Cost of license
|
72
|
|
|
99
|
|
|
(27
|
)
|
|
(27
|
)%
|
|
137
|
|
|
161
|
|
|
(24
|
)
|
|
(15
|
)%
|
||||||
Cost of services
|
7,333
|
|
|
8,283
|
|
|
(950
|
)
|
|
(11
|
)%
|
|
14,794
|
|
|
17,214
|
|
|
(2,420
|
)
|
|
(14
|
)%
|
||||||
Total cost of revenue
|
16,086
|
|
|
16,048
|
|
|
38
|
|
|
—
|
%
|
|
32,695
|
|
|
31,759
|
|
|
936
|
|
|
3
|
%
|
||||||
Gross profit
|
$
|
24,320
|
|
|
$
|
20,990
|
|
|
$
|
3,330
|
|
|
16
|
%
|
|
$
|
47,840
|
|
|
$
|
43,207
|
|
|
$
|
4,633
|
|
|
11
|
%
|
|
Three Months Ended June 30,
|
|
Variance
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||||||||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Selling and marketing
|
$
|
17,172
|
|
|
$
|
16,066
|
|
|
$
|
1,106
|
|
|
7
|
%
|
|
$
|
33,645
|
|
|
$
|
34,084
|
|
|
$
|
(439
|
)
|
|
(1
|
)%
|
General and administrative
|
9,782
|
|
|
9,616
|
|
|
166
|
|
|
2
|
%
|
|
20,190
|
|
|
18,657
|
|
|
1,533
|
|
|
8
|
%
|
||||||
Research and development
|
14,076
|
|
|
13,358
|
|
|
718
|
|
|
5
|
%
|
|
28,383
|
|
|
26,490
|
|
|
1,893
|
|
|
7
|
%
|
||||||
Total operating expenses
|
$
|
41,030
|
|
|
$
|
39,040
|
|
|
$
|
1,990
|
|
|
5
|
%
|
|
$
|
82,218
|
|
|
$
|
79,231
|
|
|
$
|
2,987
|
|
|
4
|
%
|
|
Three Months Ended June 30,
|
|
Variance
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||||||||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Convertible debt interest and amortization
|
$
|
(2,590
|
)
|
|
$
|
(2,317
|
)
|
|
$
|
(273
|
)
|
|
12
|
%
|
|
$
|
(4,984
|
)
|
|
$
|
(4,604
|
)
|
|
$
|
(380
|
)
|
|
8
|
%
|
Other expense, net
|
$
|
(64
|
)
|
|
$
|
(55
|
)
|
|
$
|
(9
|
)
|
|
16
|
%
|
|
$
|
(32
|
)
|
|
$
|
(113
|
)
|
|
$
|
81
|
|
|
(72
|
)%
|
|
Three Months Ended June 30,
|
|
Variance
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||||||||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Effective tax rate
|
(1
|
)%
|
|
(1
|
)%
|
|
n/a
|
|
|
n/a
|
|
|
(1
|
)%
|
|
(1
|
)%
|
|
n/a
|
|
|
n/a
|
|
||||||
Income tax provision
|
$
|
149
|
|
|
$
|
105
|
|
|
$
|
44
|
|
|
42
|
%
|
|
$
|
326
|
|
|
$
|
263
|
|
|
$
|
63
|
|
|
24
|
%
|
|
Six Months Ended June 30,
|
||||||
(Dollars in thousands)
|
2017
|
|
2016
|
||||
Net cash used in operating activities
|
$
|
(21,309
|
)
|
|
$
|
(9,372
|
)
|
Net cash provided by (used in) investing activities
|
7,980
|
|
|
(44,839
|
)
|
||
Net cash provided by (used in) financing activities
|
93,518
|
|
|
(4,446
|
)
|
||
Cash and cash equivalents (beginning of period)
|
118,039
|
|
|
161,770
|
|
||
Cash and cash equivalents (end of period)
|
$
|
197,969
|
|
|
$
|
103,151
|
|
•
|
difficulties in integrating the operations and personnel of the acquired companies;
|
•
|
difficulties in maintaining acceptable standards, controls, procedures and policies, including integrating financial reporting and operating systems, particularly with respect to foreign and/or public subsidiaries;
|
•
|
potential disruption of ongoing business and distraction of management;
|
•
|
inability to maintain relationships with customers of the acquired business;
|
•
|
impairment of relationships with employees and customers as a result of any integration of new management and other personnel;
|
•
|
difficulties in incorporating acquired technology and rights into our solutions and services;
|
•
|
unexpected expenses resulting from the acquisition; and
|
•
|
potential unknown liabilities associated with acquired businesses.
|
Index to Exhibits
|
||||||||||
|
|
|
|
Provided
|
|
Incorporated by Reference
|
||||
Exhibit No.
|
|
Description
|
|
Herewith
|
|
Form
|
|
SEC File No.
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
Indenture, dated June 21, 2017, between PROS Holdings, Inc. and Wilmington Trust, National Association, as trustee.
|
|
|
|
8-K
|
|
333-141884
|
|
6/22/2017
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Ninth Amendment to Credit Agreement, dated June 15, 2017, by and between PROS, Inc., Wells Fargo Bank, National Association, as administrative agent, and the Lenders party thereto.
|
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8-K
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333-141884
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6/15/2017
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10.2
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Form of Private Placement Purchase Agreement, dated June 15, 2017, between PROS Holdings, Inc. and each purchaser named therein.
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8-K
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333-141884
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6/21/2017
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10.3
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Agreement and Plan of Merger, dated August 3, 2017, by and among the Company, Wisdom U.S. Merger Sub Corporation, Vayant Travel Technologies, Inc. and NEVEQ Capital Partners, as agent for Target's securityholders thereunder.
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8-K
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333-141884
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8/3/2017
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10.4
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2017 Equity Incentive Plan.
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X
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10.5
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Form of Notice of Grant of Market Stock Units and Award Agreement under the 2017 Equity Incentive Plan.
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X
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10.6
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Form of Notice of Grant of Stock Option and Award Agreement under the 2017 Equity Incentive Plan.
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X
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10.7
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Form of Notice of Grant of Performance Restricted Stock Units and Award Agreement under the 2017 Equity Incentive Plan.
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X
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10.8
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Form of Notice of Grant of Restricted Stock Units and Award Agreement under the 2017 Equity Incentive Plan.
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X
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10.9
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Form of Notice of Grant of Stock Appreciation Rights and Award Agreement under the 2017 Equity Incentive Plan.
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X
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31.1
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Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a).
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X
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31.2
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Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/ 15d-14(a).
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X
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32.1*
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Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
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X
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Exhibit No.
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Description
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101.INS
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XBRL Instance Document.
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101.SCH
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XBRL Taxonomy Extension Schema Document.
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document.
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101.PRE
|
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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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PROS HOLDINGS, INC.
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August 3, 2017
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By:
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/s/ Andres Reiner
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Andres Reiner
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|
|
President and Chief Executive Officer
(Principal Executive Officer)
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August 3, 2017
|
By:
|
|
/s/ Stefan Schulz
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|
|
Stefan Schulz
|
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
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