Pros Holdings Inc (PRO) 2023 Q3 法說會逐字稿

Greetings. Welcome to the PROS Holdings Third Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference call over to Belinda Overdeput, Director of Investor Relations.

問候。歡迎參加 PROS Holdings 2023 年第三季財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。我現在想將電話會議轉給投資者關係總監 Belinda Overdeput。

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Our earnings press release, SEC filings and a replay of today's call can be found on the Investor Relations section of our website at pros.com. Our prepared remarks will be available on our website immediately following the call and will be replaced by the official transcript, which includes participant questions once available.

謝謝你，接線生。大家下午好，感謝您加入我們。我們的收益新聞稿、美國證券交易委員會 (SEC) 文件和今天電話會議的重播可以在我們網站 pros.com 的投資者關係部分找到。我們準備好的評論將在電話會議後立即在我們的網站上發布，並將由正式的文字記錄取代，其中包括參與者提出的問題。

With me on today's call is Andres Reiner, President and Chief Executive Officer; and Stefan Schulz, Chief Financial Officer. Please note that some of the commentary today will include forward-looking statements, including, without limitation, those about our strategy, future business prospects and market opportunities and our financial projections and guidance. Actual results could differ materially from such statements in our forecast.

與我一起參加今天電話會議的是總裁兼執行長 Andres Reiner；和財務長史蒂芬·舒爾茨。請注意，今天的一些評論將包含前瞻性陳述，包括但不限於有關我們的策略、未來業務前景和市場機會以及我們的財務預測和指導的陳述。實際結果可能與我們預測中的此類陳述有重大差異。

For more information, please refer to the risk factors described in our SEC filings. PROS assumes no obligation to update any forward-looking statements to reflect future events or circumstances. As a reminder, during the call, we will discuss non-GAAP metrics. Reconciliations between each non-GAAP measure and the most directly comparable GAAP measure to the extent to which available without unreasonable effort, are available in our earnings press release. With that, I'll turn the call over to you, Andres.

欲了解更多信息，請參閱我們向 SEC 提交的文件中描述的風險因素。 PROS 不承擔更新任何前瞻性陳述以反映未來事件或情況的義務。提醒一下，在電話會議期間，我們將討論非 GAAP 指標。我們的收益新聞稿中提供了每項非公認會計準則衡量指標與最直接可比較的公認會計準則衡量指標之間的調節表（無需不合理的努力即可獲得）。這樣，我會把電話轉給你，安德烈斯。

Thank you, Belinda. Good afternoon, everyone, and thank you for joining us on today's call. I'm proud to share we delivered a strong third quarter, exceeding our guidance ranges across all metrics. We grew subscription revenue by 16% year-over-year, total revenue by 10% year-over-year and delivered $5.6 million in positive adjusted EBITDA, an improvement of $7.8 million year-over-year.

謝謝你，貝琳達。大家下午好，感謝您參加今天的電話會議。我很自豪地告訴大家，我們第三季的業績表現強勁，所有指標都超出了我們的指導範圍。我們的訂閱營收年增 16%，總營收年增 10%，並實現正調整 EBITDA 560 萬美元，年增 780 萬美元。

Results are a testament to our team's relentless focus on driving profitable growth to achieve our goal of being a Rule of 40 company by 2026. As the market increasingly embraces AI, PROS' long-term trajectory continues to strengthen. C-suite leaders across industries are encouraging their teams to infuse AI into their operations and PROS is a clear choice given our enterprise AI is proven to fuel profitable revenue growth.

結果證明了我們團隊堅持不懈地致力於推動獲利成長，以實現到 2026 年成為 40 強公司的目標。隨著市場越來越接受人工智慧，PROS 的長期發展軌跡不斷加強。各行業的最高管理層領導者都鼓勵他們的團隊將人工智慧融入他們的營運中，鑑於我們的企業人工智慧已被證明可以推動獲利性收入成長，PROS 是一個明確的選擇。

When it comes to enterprise AI, accuracy, trust and speed are critical, and this is what sets PROS apart. We ensure accuracy and trust by using an ensemble approach to combine multiple AI algorithms together. For example, we ensemble our price prediction algorithms with outlier detection and explainable AI algorithms to deliver the most optimal and transparent results possible.

當談到企業人工智慧時，準確性、信任和速度至關重要，這就是 PROS 的與眾不同之處。我們透過使用整合方法將多種人工智慧演算法組合在一起來確保準確性和信任。例如，我們將價格預測演算法與異常值檢測和可解釋的人工智慧演算法相結合，以提供盡可能最佳和透明的結果。

Our models are adaptive. They self-learn and recalibrate based on user interaction and real-time data signals to provide the most up-to-date predictions. We offer unparalleled solution performance with response times that are guaranteed within milliseconds for real-time solutions. Through greater accuracy, trust and speed, PROS delivers the promise of AI today. Our mission is to help people and companies outperform.

我們的模型是自適應的。它們根據用戶互動和即時數據訊號進行自學習和重新校準，以提供最新的預測。我們提供無與倫比的解​​決方案效能，即時解決方案的回應時間保證在毫秒內。透過更高的準確性、信任度和速度，PROS 兌現了當今人工智慧的承諾。我們的使命是幫助個人和公司取得優異成績。

Our enterprise AI generates significant revenue, margin and efficiency improvement for our customers. As shown in our published ROI study. Recently, we ran an analysis to see how this business outcomes translate into shareholder returns for our customers. We found that PROS publicly traded customers outperformed the Dow and S&P 500 by more than 15 percentage points, between the beginning of 2022 and the end of Q3 2023.

我們的企業人工智慧為我們的客戶帶來了顯著的收入、利潤和效率提升。正如我們發布的投資報酬率研究所示。最近，我們進行了一項分析，看看這種業務成果如何轉化為客戶的股東回報。我們發現，從 2022 年初到 2023 年第三季末，PROS 公開交易客戶的表現優於道瓊指數和標準普爾 500 指數超過 15 個百分點。

I'm proud that we're helping such amazing customers drive these incredible returns. I encourage you to check out this chart in our Q3 investor presentation. Our land and expand strategy is working, demonstrated by our accelerating subscription revenue growth. Significant improvements to profitability and the pace at which we're continuing to land new customers and expand their use of our platform.

我很自豪我們能夠幫助如此出色的客戶帶來令人難以置信的回報。我鼓勵您查看我們第三季投資者演示中的這張圖表。我們的土地和擴張策略正在發揮作用，訂閱收入的加速成長證明了這一點。獲利能力顯著提高，我們繼續吸引新客戶並擴大他們對我們平台的使用的速度也顯著提高。

In Q3, we continued to welcome new logos across our target industries. And now I'll share a few examples. Genesis Energy, a New Zealand-based electricity and gas supplier, selected the PROS Platform to provide a seamless customer experience with a harmonized omnichannel strategy. Trivium Packaging, a leading global manufacturer of metal packaging selected the PROS Platform in Q3 to fuel profitable growth. Trivium will improve their responsiveness to shifting raw material costs with dynamic pricing and drive accelerated time to quote with CPQ.

在第三季度，我們繼續歡迎目標行業的新徽標。現在我將分享一些例子。 Genesis Energy 是一家紐西蘭電力和天然氣供應商，選擇 PROS 平台透過統一的全通路策略提供無縫的客戶體驗。 Trivium Packaging 是全球領先的金屬包裝製造商，在第三季選擇了 PROS 平台來推動獲利成長。 Trivium 將透過動態定價提高他們對原材料成本變化的響應能力，並透過 CPQ 加快報價時間。

JetSMART and GOL Airlines selected the PROS Platform to use our digital offer marketing solutions to increase online traffic and drive higher conversion of sales through digital channels. SKS Airways, a new Malaysian carrier planning to launch at the beginning of 2024, selected PROS a strategic partner in driving their growth strategy. SKS Airways will use PROS revenue management platform to help them predict demand scale their operations and maximize revenue.

JetSMART 和 GOL Airlines 選擇 PROS 平台來使用我們的數位優惠行銷解決方案來增加線上流量並透過數位管道推動更高的銷售轉換。 SKS Airways 是一家計劃於 2024 年初開業的馬來西亞新航空公司，選擇 PROS 作為策略合作夥伴來推動其成長策略。 SKS Airways 將使用 PROS 收入管理平台來幫助他們預測需求、擴大營運規模並最大限度地提高收入。

Now I'm excited to share a few of the incredible expansions, we saw with our customers in Q3. Ingredion, a leading global ingredient solution provider began their journey with PROS to drive a digitally-connected sales motion and optimize pricing. Since implementing our platform, Ingredion is driving more accurate pricing by leveraging real-time cost changes, resulting in faster time to quote and an improved customer experience.

現在，我很高興與客戶分享我們在第三季與客戶看到的一些令人難以置信的擴展。全球領先的配料解決方案提供商 Ingredion 開始與 PROS 合作，推動數位連接的銷售活動並優化定價。自從實施我們的平台以來，Ingredion 透過利用即時成本變化來推動更準確的定價，從而縮短了報價時間並改善了客戶體驗。

Ingredion has expanded margins using PROS AI powered pricing to optimize product and customer mix and even highlighted this on the recent earnings call. Ingredion's CEO, James Zallie said on the call, "Our results demonstrate our ability to be responsive to shifting market dynamics and deliver continued profit growth." We're proud of Ingredion's success and pleased to share they expanded their use of the PROS Platform to a new region, each of the last 2 quarters.

Ingredion 利用 PROS AI 驅動的定價來優化產品和客戶組合，擴大了利潤，甚至在最近的財報電話會議上強調了這一點。 Ingredion 執行長 James Zallie 在電話會議上表示：“我們的業績證明了我們有能力應對不斷變化的市場動態並實現持續的利潤增長。”我們為 Ingredion 的成功感到自豪，並很高興地分享他們在過去兩個季度中每個季度都將 PROS 平台的使用擴展到了一個新地區。

Air New Zealand expanded their use of the PROS Platform with the adoption of Dynamic Offers solution. With PROS Dynamic Offers, Air New Zealand will modernize their retailing strategy with our leading capabilities in airfare shopping and pricing, enabling them to design, distribute and manage price fares across direct, indirect and digital sales channels.

紐西蘭航空透過採用動態優惠解決方案擴大了 PROS 平台的使用。透過 PROS Dynamic Offers，紐西蘭航空將利用我們在機票購物和定價方面的領先能力，實現其零售策略的現代化，使他們能夠跨直接、間接和數位銷售通路設計、分銷和管理價格票價。

Turkish Airlines expanded their use of our platform with their adoption of our digital offer marketing solution and their recent go-live of our latest generation of solutions for revenue management, Real-Time Dynamic Pricing and Group Sales. Turkish Airlines has been a PROS customer since 2009, and it's been amazing to be part of their stunning breakthrough during this time. Turkish Airlines has more than doubled the number of destinations it flies to since the beginning of our partnership. And today, it flies to more countries than any other airline in the world.

土耳其航空透過採用我們的數位報價行銷解決方案以及最近啟用了我們最新一代的收入管理、即時動態定價和團體銷售解決方案，擴大了對我們平台的使用。土耳其航空自 2009 年以來一直是 PROS 客戶，能夠在這段時間內成為他們驚人突破的一部分真是太棒了。自從我們建立合作夥伴關係以來，土耳其航空已將其飛往的目的地數量增加了一倍以上。如今，它飛往的國家比世界上任何其他航空公司都多。

Our platform innovations enabled the next generation of modern retailing for Turkish Airlines on a massive global scale. Real-Time Dynamic Pricing is the key to fueling revenue growth, managing availability and intelligently controlling each offer. With the PROS Platform, Turkish Airlines can increase online traffic and drive higher conversion rates of optimized offers, across our global passengers and group business. Driving their growth strategy.

我們的平台創新為土耳其航空在全球範圍內實現了下一代現代零售業。即時動態定價是推動收入成長、管理可用性和智慧控制每個報價的關鍵。借助 PROS 平台，土耳其航空可以增加全球乘客和團體業務的線上流量並提高優化報價的轉換率。推動他們的成長策略。

In closing, I would like to thank our global team for making PROS an incredible company in delivering on our mission of helping people and companies outperform. Also, I would like to thank our customers, partners and shareholders for their ongoing support of PROS. With that, I would like to turn the call over to Stefan to cover financial performance and outlook.

最後，我要感謝我們的全球團隊讓 PROS 成為一家令人難以置信的公司，並履行了我們幫助人們和公司取得優異成績的使命。此外，我還要感謝我們的客戶、合作夥伴和股東對 PROS 的持續支持。說到這裡，我想將電話轉給 Stefan，討論財務表現和前景。

Thank you, Andres, and good afternoon, everyone. We delivered another strong quarter, which puts us in a position to raise our outlook once again for the year. Year-to-date, we have grown our subscription revenue by 15% and total revenue by 10%, while delivering over $20 million in improvements to both adjusted EBITDA and free cash flow.

謝謝你，安德烈斯，大家午安。我們又實現了強勁的季度業績，這使我們能夠再次提高今年的預期。今年迄今為止，我們的訂閱收入成長了 15%，總收入成長了 10%，同時調整後 EBITDA 和自由現金流的改善超過 2,000 萬美元。

We have now generated positive adjusted EBITDA on a year-to-date basis and expect positive free cash flow for the full year, after an expected seasonally strong fourth quarter. These profitability improvements have been made while also executing to our revenue growth plan. We are off to a good start towards reaching our goal of achieving Rule of 40 by 2026, and I am pleased with our progress towards these objectives.

年初至今，我們已實現調整後的 EBITDA 為正，並預計在第四季度季節性強勁之後，全年自由現金流為正。這些獲利能力的提高是在執行我們的收入成長計劃的同時實現的。我們在實現 2026 年實現 40 條規則的目標方面有了一個良好的開端，我對我們在實現這些目標方面取得的進展感到高興。

Now for our third quarter results. Subscription revenue in the third quarter was $60 million, up 16% year-over-year, and total revenue was $77.3 million, up 10% year-over-year. Both exceeding the high end of our guidance ranges. Our third quarter recurring revenue was 84% of total revenue. As expected, our third quarter calculated billings were relatively flat year-over-year and increased 5% for the trailing 12 months.

現在是我們第三季的業績。第三季訂閱營收為 6,000 萬美元，年增 16%，總營收為 7,730 萬美元，年增 10%。兩者都超出了我們指導範圍的上限。我們第三季的經常性收入佔總收入的 84%。正如預期的那樣，我們第三季的計算帳單與去年同期相比相對持平，並且在過去 12 個月中成長了 5%。

As a reminder, the size and timing of our billings have an impact on our quarterly growth rate. Our trailing 12-month gross revenue retention rate in the third quarter remained above 93%. Non-GAAP subscription gross margin was 78% for the quarter, improving from 77% a year ago. Our non-GAAP services margin was 9% in the third quarter, improving from 4% a year ago.

提醒一下，我們的帳單規模和時間會對我們的季度成長率產生影響。第三季我們過去 12 個月的總營收保留率維持在 93% 以上。本季非 GAAP 訂閱毛利率為 78%，高於一年前的 77%。第三季我們的非 GAAP 服務利潤率為 9%，高於一年前的 4%。

Our overall profitability improvements start with gross margins. And year-to-date, we have delivered over 145 basis points of improvement to subscription gross margins and over 800 basis points of improvement to services gross margins compared to last year. Driving greater efficiencies in how we deliver our solutions has been an area of focus for our professional services and product teams. And I want to congratulate them for their achievements in this area.

我們整體獲利能力的提高始於毛利率。今年迄今為止，與去年相比，我們的訂閱毛利率提高了 145 個基點，服務毛利率提高了 800 個基點。提高交付解決方案的效率一直是我們專業服務和產品團隊關注的重點領域。我要祝賀他們在這領域所取得的成就。

Adjusted EBITDA was $5.6 million in the third quarter, exceeding guidance. We also generated $8.5 million of free cash flow in the third quarter, a $17.6 million improvement compared to last year. From a balance sheet perspective, we exited the third quarter with $169.1 million of cash and cash equivalents and have access to our $50 million revolving line of credit. Additionally, we exchanged approximately $122 million of our convertible notes due in May 2024, for approximately $117 million of additional notes under our 2027 indenture.

第三季調整後 EBITDA 為 560 萬美元，超出預期。第三季我們也產生了 850 萬美元的自由現金流，比去年增加了 1,760 萬美元。從資產負債表的角度來看，我們在第三季結束時擁有 1.691 億美元的現金和現金等價物，並可以獲得 5,000 萬美元的循環信貸額度。此外，我們也以 2024 年 5 月到期的約 1.22 億美元可轉換票據交換了 2027 年契約下約 1.17 億美元的額外票據。

The new notes under the 2027 indenture are recorded on our balance sheet at fair value because our 2027 notes were trading at a premium to par. So even though the exchange resulted in a lower level of debt at par value, our balance sheet will reflect a higher amount of debt. This noncash premium will be amortized down to the debt's par value over the next 4 years.

2027 年契約下的新票據以公允價值記錄在我們的資產負債表中，因為我們 2027 年票據的交易價格高於面額。因此，即使交換導致以面額計算的債務水準較低，我們的資產負債表仍將反映較高的債務金額。此非現金溢價將在未來 4 年內攤銷至債務面額。

As a result of this exchange, we have reduced our debt due in May of 2024 to approximately $22 million. Our non-GAAP earnings per share was $0.09 per share. Now turning to guidance. For the full year, we are raising our subscription and total revenue guidance. We expect subscription revenue to be in the range of $233.3 million to $233.8 million. And total revenue to be in the range of $302.2 million to $303.2 million.

透過此次交換，我們已將 2024 年 5 月到期的債務減少至約 2,200 萬美元。我們的非 GAAP 每股收益為 0.09 美元。現在轉向指導。對於全年，我們提高了訂閱量和總收入指導。我們預計訂閱收入將在 2.333 億美元至 2.338 億美元之間。總收入將在 3.022 億美元至 3.032 億美元之間。

We are also raising the midpoint of our EBITDA and free cash flow guidance. We expect adjusted EBITDA profit for the full year of between $6.5 million and $7.5 million. And free cash flow of between $3.5 million and $6.5 million. We're maintaining our guidance for subscription ARR at $251 million to $254 million. And for the fourth quarter, we expect subscription revenue to be in the range of $60 million to $60.5 million and total revenue to be in the range of $76 million to $77 million. We are anticipating a sequential decline in services revenue due to the holidays.

我們也提高了 EBITDA 和自由現金流指引的中點。我們預計全年調整後 EBITDA 利潤在 650 萬美元至 750 萬美元之間。自由現金流在 350 萬至 650 萬美元之間。我們將訂閱 ARR 指引維持在 2.51 億至 2.54 億美元之間。對於第四季度，我們預計訂閱收入將在 6,000 萬美元至 6,050 萬美元之間，總收入將在 7,600 萬美元至 7,700 萬美元之間。我們預計，由於假期，服務收入將連續下降。

We expect fourth quarter adjusted EBITDA profit of between $3 million and $4 million. And using an estimated non-GAAP tax rate of 22%, we anticipate fourth quarter non-GAAP earnings per share of between $0.03 and $0.05 per share based on an estimated 47.5 million diluted weighted average shares outstanding.

我們預計第四季度調整後 EBITDA 利潤將在 300 萬至 400 萬美元之間。根據估計的非 GAAP 稅率 22%，我們預計第四季非 GAAP 每股盈餘將在 0.03 美元至 0.05 美元之間，基於估計的 4,750 萬股稀釋加權平均流通股。

In closing, I would like to thank our employees and customers for their continued passion and support. We also thank our shareholders for their continued support of PROS, and we look forward to speaking with you at our upcoming events. I will now turn the call back over to the operator for questions. Operator?

最後，我要感謝我們的員工和客戶持續的熱情和支持。我們也感謝股東對 PROS 的持續支持，我們期待在即將舉行的活動中與您交談。我現在將把電話轉回給接線員詢問問題。操作員？

(Operator Instructions) Our first question comes from the line of Chad Bennett with Craig-Hallum Capital Group.

（操作員說明）我們的第一個問題來自 Craig-Hallum Capital Group 的 Chad Bennett。

Great. Nice job again on great execution in the quarter. It's great seeing the reacceleration in subscription revenue growth to 16%, pretty material, year-to-date. And then also that flowing down to a very nice EBITDA and earnings beat. I guess, question I have is I kind of marked down, Andres, all the logos you talk about and expansions every quarter.

偉大的。本季的出色執行再次表現出色。很高興看到今年迄今訂閱收入成長再次加速至 16%，相當可觀。然後，這也會帶來非常好的 EBITDA 和獲利成長。我想，我的問題是，安德烈斯，你談論的所有徽標和每個季度的擴展都被標記下來了。

And I could be wrong, but I think there are a fair amount of travel-related transactions this quarter. Can you give us a sense of where we are in that recovery and maybe into the fourth quarter here and how we should think about the travel business and bookings there?

我可能是錯的，但我認為本季有相當多的與旅行相關的交易。您能否讓我們了解我們在復甦中所處的位置，可能會進入第四季度，以及我們應該如何考慮那裡的旅行業務和預訂？

Yes, Chad, great question. Yes, I would say travel had a good quarter, a very strong quarter, and we're very pleased both on the land with GOL Airlines, JetSMART, and SKS Airways as examples. And also on the expansion side as well, Air New Zealand expanding to Dynamic Offers, a huge win for us in continuing to broaden our reach within Air New Zealand and also Turkish Airlines continue to expand now with our digital offer marketing.

是的，查德，好問題。是的，我想說，旅遊業有一個很好的季度，一個非常強勁的季度，我們對這兩個領域都非常滿意，以 GOL 航空公司、JetSMART 和 SKS 航空公司為例。同樣在擴張方面，紐西蘭航空擴展到動態優惠，這對我們繼續擴大紐西蘭航空的影響力來說是一個巨大的勝利，土耳其航空現在也繼續透過我們的數位優惠行銷進行擴張。

What I would tell you is that where we innovated during the pandemic is areas that airlines, we knew when they started investing they would want to adopt these solutions. And definitely, they're resonating in the market is improving, as we expected into Q3 and Q4.

我要告訴你的是，我們在疫情期間創新的領域是航空公司，我們知道當他們開始投資時他們會希望採用這些解決方案。當然，正如我們對第三季和第四季的預期那樣，它們在市場中的共鳴正在改善。

Okay. So we are seeing demand recovery into the second half here?

好的。那我們看到需求在下半年有所復甦嗎？

Yes. I would tell you, it's pretty consistent with what we expected in a good way. We said we expect that in the back half of the year for demand to pick up, and we're seeing it.

是的。我會告訴你，這與我們的預期非常一致。我們說過，我們預計需求將在今年下半年回升，我們已經看到了這一點。

Okay. And then maybe just on the other side -- or the B2B side of the business. Just in terms of how to characterize, I think you talked about last quarter a pretty significant reduction in sales cycles. I think you said 30% and an improvement in new logo activity, that you saw last quarter, is that business, I assume it's driving the reacceleration or a decent amount of it. But, is there any characterization of how much that business has accelerated year-to-date and how to think about that going forward?

好的。然後也許就在另一邊——或者是業務的 B2B 邊。就如何描述而言，我認為您談到了上個季度銷售週期的顯著縮短。我想你說的 30% 和新標誌活動的改善，你在上個季度看到的，就是這項業務，我認為它正在推動重新加速或相當大的加速。但是，該業務今年迄今的加速程度是否有任何特徵，以及如何看待未來的發展？

Yes. Chad, great question. We're seeing the same improvement in the B2B new logo velocity, that we talked about last quarter. We're seeing about a 30% improvement in those sales cycle times. And we're continuing to drive deal growth there. We're always proud to talk about the land site, Genesis Energy and Trivium Packaging. As well as I would tell you, the land, realize and expand strategy that we started at the beginning of the year, we're seeing it working. Ingredion is a perfect example. They're seeing significant value in each of the last 2 quarters, Q2 and Q3. They expanded into new regions. And I believe that motion, while we're not fully to our potential, we're executing very well.

是的。乍得，好問題。我們看到 B2B 新標誌速度也得到了同樣的改進，這與我們上季度討論過的一樣。我們發現銷售週期時間縮短了約 30%。我們將繼續推動那裡的交易成長。我們總是很自豪地談論該土地、Genesis Energy 和 Trivium Packaging。我想告訴你的是，我們在今年年初啟動的土地、實現和擴展策略，我們看到它正在發揮作用。安瑞安 (Ingredion) 就是一個完美的例子。他們在過去兩個季度（第二季和第三季）中都看到了巨大的價值。他們擴展到新的地區。我相信，雖然我們還沒有充分發揮我們的潛力，但我們的行動執行得很好。

Our next question comes from the line of Rob Oliver with Baird.

我們的下一個問題來自 Rob Oliver 和 Baird 的對話。

I had 2. My first, Andres was just around -- and I recognize that it's still early, but a question around the Microsoft partnership. Obviously, some excitement around Azure, with the recent report and seeing some interest in AI solutions. And I know it's early for you guys, but would be curious to hear how you characterize that sort of progress and what constitutes early success for the Microsoft partnership? And then I had a quick follow-up as well.

我有 2 個。我的第一個，Andres 就在附近——我意識到現在還為時過早，但這是一個圍繞微軟合作夥伴關係的問題。顯然，隨著最近的報告以及人們對人工智慧解決方案的興趣，人們對 Azure 感到興奮。我知道對你們來說現在還為時過早，但我很想知道你們如何描述這種進展以及微軟合作關係的早期成功是什麼？然後我也進行了快速跟進。

Yes. I would tell you, look, the Microsoft partnership continues to strengthen in all areas. I think from an innovation, we're continuing to drive innovation on the front of OpenAI and some generative AI capabilities around their next-generation Viva Sales platform in PROS. But on a go-to-market, I would tell you there is very strong collaboration across all of our geographies between Microsoft and PROS. We can now resell our solutions in their marketplace, and we're working very well. Still early phases, but I would tell you the partnership is as strong as it's ever been.

是的。我想告訴你，看，微軟的合作關係在各個領域都在持續加強。我認為，從創新的角度來看，我們將繼續推動 OpenAI 前沿的創新，以及圍繞 PROS 中的下一代 Viva Sales 平台的一些生成式 AI 功能。但在進入市場時，我想告訴您，Microsoft 和 PROS 之間在我們所有地區都進行了非常強大的合作。我們現在可以在他們的市場上轉售我們的解決方案，而且我們運作得很好。雖然仍處於早期階段，但我想告訴您，雙方的合作關係一如既往地牢固。

Great. Okay. Excellent to hear. And then just -- it looks like a really strong quarter for you guys in Europe, and I just wanted to parse that a little bit and understand, was it more on the B2B side, more on the air travel side? And then be curious for any color around those deals, partner-led or sort of the new more modular sales model, what's driving that strength?

偉大的。好的。很高興聽到。然後，對於歐洲的你們來說，這看起來是一個非常強勁的季度，我只是想稍微分析一下並了解，是 B2B 方面更多，還是航空旅行方面更多？然後對這些交易的任何色彩感到好奇，合作夥伴主導的或某種新的更模組化的銷售模式，是什麼推動了這種力量？

Yes. No, great question. I would tell you, look, in general, we're seeing -- we are focused on this land, realize and expand strategy. So I would say, in general, we're trying to land these smaller deals and drive acceleration.

是的。不，很好的問題。我想告訴你，總的來說，我們看到——我們專注於這片土地，實現並擴展策略。所以我想說，總的來說，我們正在努力達成這些較小的交易並推動加速。

As we know, it is a complex market, and we knew coming into this year that was more important than ever that we land in a fast time to value be able to measure uplift and drive quick expansion because companies are very focused on where they invest. And I think we've executed on that strategy well both in travel and B2B.

眾所周知，這是一個複雜的市場，我們知道進入今年比以往任何時候都更加重要，我們必須快速實現價值，能夠衡量提升並推動快速擴張，因為公司非常關注他們的投資領域。我認為我們在旅遊和 B2B 領域都很好地執行了這一策略。

With respect to EMEA, we saw good demand on the travel front, with expansions, and we talked about some of those and also on the B2B front. So across both sides. But I would say both teams are very, very focused on how we land an account. And what is the best next offer that we can offer for existing customers to drive those rapid expansions.

就歐洲、中東和非洲地區而言，我們看到了旅遊領域的良好需求和擴張，我們討論了其中的一些以及 B2B 領域的需求。如此橫跨兩邊。但我想說，兩個團隊都非常非常關注我們如何獲得客戶。我們可以為現有客戶提供的最佳下一個報價是什麼，以推動這些快速擴張。

Our next question comes from the line of Jason Celino with KeyBanc Capital Markets Inc.

我們的下一個問題來自 KeyBanc Capital Markets Inc. 的 Jason Celino。

One on sales capacity, next year is just around the corner at this point. I wanted to get an update on how you're thinking about, sales capacity heading into next year. Do you feel comfortable with your coverage, any thoughts there?

一是關於銷售能力，明年已經指日可待。我想了解您對明年銷售能力的看法的最新情況。您對自己的報道感到滿意嗎？有什麼想法嗎？

Yes. Great question, Jason. I would tell you we're in a good place from a sales capacity. We've continued to add the reps that we need, to onboard and get them productive for next year. So I feel like we're in a good place. We'll continue to execute through this quarter, we'll continue to add reps in preparation, but I feel we're in a really good place with the team.

是的。好問題，傑森。我想告訴你，從銷售能力來看，我們處於一個很好的位置。我們繼續增加我們需要的代表，讓他們在明年保持高效率。所以我覺得我們處於一個很好的位置。我們將在本季繼續執行，我們將繼續增加準備人員，但我覺得我們與團隊的關係非常好。

We're also continuing to focus on driving higher rep productivity. This is an area that we started. And I would tell you, we've made improvement to our CAC ratios and we feel we can get to best-in-class, and we're going to continue also to focus on driving higher productivity, as we look into next year. But we feel from a capacity, we're in a good place.

我們也持續致力於提高代表生產力。這是我們開始的一個領域。我想告訴你，我們已經提高了 CAC 比率，我們認為我們可以達到一流水平，並展望明年，我們將繼續專注於提高生產力。但我們從能力上感覺，我們處於一個很好的位置。

Perfect. And then, just a quick one for Stefan on the EBITDA beat, nice leverage there. It looks like you're raising the full year by only a little bit, any expenses or investments that we should be aware of, for Q4?

完美的。然後，Stefan 快速地了解了 EBITDA，這是一個很好的槓桿。看起來您只為全年增加了一點點，我們應該注意第四季度的任何費用或投資嗎？

No, Jason. We did, in our forecast, assuming we deliver based on anticipation and how we're seeing the plan come in, there will be some variable compensation components that come into play in the fourth quarter. That's the only reason you see that number sequentially come down slightly from Q3 to Q4. And is that potential variable incentive component, that's it.

不，傑森。在我們的預測中，假設我們根據預期以及我們如何看待計劃的實施來交付，那麼第四季度將會有一些可變的薪酬成分發揮作用。這是您看到該數字從第三季到第四季度略有下降的唯一原因。潛在的可變激勵因素就是這樣。

Our next question comes from the line of Scott Berg with Needham.

我們的下一個問題來自斯科特·伯格和李約瑟的對話。

Congrats on good quarter. I guess a couple of things -- it's probably just 1, last to me. There is a rumor at the end of the quarter that you've hired another investment bank potentially, I guess, evaluate maybe some sort incoming inquiries in the company. Not that I expect you to comment on any acquisition activity on the company here publicly. But I guess any thoughts on what the criteria or scenario would be that maybe potentially, actually go through with the sale of the company? Because I think you guys are at a fantastic point right now with AI, with the rebound and travel. I would think the future looks really strong and you probably have some interest in maintaining this as a public entity for a while.

恭喜季度表現良好。我猜想有幾件事——對我來說最後可能只是 1。本季末有傳言稱，您可能聘請了另一家投資銀行，我猜，可能會評估公司收到的某種詢問。我並不是希望您在這裡公開評論該公司的任何收購活動。但我想，對於公司出售可能實際執行的標準或場景，有什麼想法嗎？因為我認為你們現在在人工智慧方面處於一個非常棒的階段，有反彈和旅行。我認為未來看起來非常強勁，您可能有興趣將其作為公共實體維持一段時間。

Yes, Scott, great question. And obviously, look, we don't comment on rumors or market speculation, but what we can tell you is that we are laser-focused on executing our goal of being a Rule of 40 company by 2026. We believe we're in a very strong market position, a leader in our space, $38 billion TAM, and we've proven that we're executing really well on our land, realize and expand strategy. So we feel we have a great opportunity to drive pretty significant shareholder returns. So I think we feel we're in a great place and we're just focused on executing.

是的，斯科特，好問題。顯然，我們不會對謠言或市場猜測發表評論，但我們可以告訴您的是，我們正專注於執行到 2026 年成為 40 條規則公司的目標。我們相信我們正處於一個非常強大的市場地位，我們領域的領導者，380 億美元的TAM，我們已經證明我們在我們的土地上執行得很好，實現並擴展了戰略。因此，我們認為我們有很好的機會來推動相當可觀的股東回報。所以我認為我們感覺我們處於一個很好的位置，我們只是專注於執行。

Great. And then from a follow-up perspective, Stefan, you beat all profitability metrics pretty handily in the quarter. It looks like your sales and marketing expense is down quarter-over-quarter, more than kind of the historical seasonal nature. I guess anything driving that, in particular? And my guess is we should probably be thinking of sales and marketing being at a higher rate here starting in Q4 going forward?

偉大的。然後，從後續的角度來看，Stefan，您在本季輕鬆地超越了所有獲利指標。看起來您的銷售和行銷費用環比下降，不僅僅是歷史季節性的下降。我想有什麼因素在推動這一點，特別是？我的猜測是，我們可能應該考慮從第四季度開始，銷售和行銷的速度會更高？

Yes, Scott, I think your assumption about it going up again is a good one. The reason for the sequential decline from Q2 to Q3, had really to do with our Outperform event. So a lot of resources go towards that event, not only just the third-party fees and the direct fees associated with it, but there's a lot of indirect fees that go to support that event.

是的，斯科特，我認為你關於它再次上漲的假設是正確的。從第二季到第三季連續下降的原因與我們的跑贏大盤事件有關。因此，該活動投入了許多資源，不僅是第三方費用和與之相關的直接費用，還有很多間接費用用於支持活動。

And so you saw that plus a couple of other events that occurred in the second quarter, and we didn't have as much in the third quarter. So that's the real big reason behind seeing that type of a movement. So again, to your point, I think going forward, you'll see that number start to rebound a bit.

所以你看到了第二季發生的一些其他事件，而第三季我們沒有那麼多事件。所以這就是看到這種運動背後的真正重要原因。再次，就你的觀點而言，我認為展望未來，你會看到這個數字開始略有反彈。

Our next question comes from the line of Parker Lane with Stifel.

我們的下一個問題來自 Parker Lane 和 Stifel 的對話。

First one's for you, Andres, you're exposed to a lot of different industries out there. I'd be really curious to hear with the prioritization of AI and being the subject that everyone is really concerned about, are there any particular verticals where you're seeing the greatest prioritization of AI or the budgets actually being a little bit more substantial than average?

第一個是給你的，安德烈斯，你接觸過很多不同的行業。我真的很想知道人工智慧的優先順序以及作為每個人真正關心的主題，是否有任何特定的垂直領域您看到人工智慧的最大優先順序或預算實際上比平均的？

Yes, Parker, great question. What I would tell you is, while we're seeing industries that are being impacted, that maybe their performance not well, we're not seeing this deprioritization of our initiatives.

是的，帕克，好問題。我要告訴你的是，雖然我們看到一些行業正在受到影響，也許他們的表現不佳，但我們並沒有看到我們的計劃被優先考慮。

So broadly, we're seeing very strong industry interest across. And I think the importance of AI and digitization of sales in driving the right price guidance in this high volatility environment is continuing to resonate. And I think -- I said it all along at the beginning, I think it was very important for us to be able to land small, be able to measure the uplift in ROI, get to value quickly and us executing to that has clearly demonstrated.

總的來說，我們看到整個行業的興趣非常濃厚。我認為人工智慧和銷售數位化對於在這種高度波動的環境中推動正確的價格指導的重要性正在繼續引起共鳴。我認為——我一開始就說過，我認為能夠規模較小、能夠衡量投資回報率的提升、快速實現價值對我們來說非常重要，而我們的執行力已經清楚地證明了這一點。

I think the visibility of AI and the importance of AI has only increased. And I would say we're seeing that more and more interest of adopting our Gen 4 dynamic pricing algorithms or next generation of dynamic pricing for -- or revenue management and travel solutions. The digitization of the customer experience and travel in those areas. So overall, I would tell you we feel pretty good about the market environment right now.

我認為人工智慧的可見度和重要性只會增加。我想說的是，我們看到越來越多的人對採用我們的第四代動態定價演算法或下一代動態定價或收入管理和旅遊解決方案感興趣。這些領域的客戶體驗和旅行的數位化。總的來說，我想告訴你，我們對目前的市場環境感覺非常好。

Understood. Yes, I appreciate that. And then Stefan, for you, I know you've oriented investors and us on the sell-side around, ARR as the core metric. But wanted you to touch on RPO, if you could, a little bit. And when should we expect sort of a normalization in that metric? I saw it's declined here a couple of quarters?

明白了。是的，我很欣賞這一點。然後，Stefan，對於您來說，我知道您已經以 ARR 作為核心指標來引導投資者和我們賣方。但如果可以的話，希望您談談 RPO。我們什麼時候應該期待該指標的標準化？我看到它已經下降了幾個季度？

Yes. Parker, that is a function of the things that we've been talking about, to Andres' point about the land, realize and expand strategy. We're -- our typical contracts are going to be quite a bit smaller than they have been historically. And so as that unwinds throughout the RPO disclosure, you're seeing an inconsistent way, in which we used to run the business versus how we're running the business today, and it's showing itself in RPO.

是的。帕克，這是我們一直在談論的事情的一個功能，安德烈斯關於土地、實現和擴展戰略的觀點。我們的典型合約將比歷史上的規模小得多。因此，隨著 RPO 揭露的展開，您會看到一種不一致的方式，我們過去經營業務的方式與我們今天經營業務的方式不一致，這在 RPO 中得到了體現。

So to your point, I think as we get towards the middle part of next year, I think we should have that anniversaried out. And so we should be starting to see the real impact of our -- of the momentum in our business start to be reflective in more of those RPO metrics.

所以就你的觀點而言，我認為當我們接近明年中期時，我認為我們應該結束這個週年紀念。因此，我們應該開始看到我們業務動能的真正影響開始反映在更多的 RPO 指標中。

Now, having said that, there are still anomalies that go into that metric just like there are with calculated billings from a timing of renewal and when that occurs to regenerate that contractual obligation. But I think, generally speaking, we should see a more -- an outcome that's more representative of the momentum in the business starting in the middle part of next year.

現在，話雖如此，該指標仍然存在異常情況，就像根據續約時間以及何時重新產生合約義務計算的帳單一樣。但我認為，總的來說，我們應該會看到一個更能代表明年中期開始的業務動能的結果。

Our next question comes from the line of Camden Levy with Oppenheimer.

我們的下一個問題來自卡姆登·利維和奧本海默的對話。

This is Camden Levy sitting in for Brian Schwartz. Just one here. given your guys' exposure to the travel industry and just thinking about Q3 moving into Q4, specifically just this first month of October, have you guys seen any like sequential softening in consumer demand from the ongoing conflict in the Middle East as it relates to EMEA and just some of the strength that you saw in that market this quarter?

我是卡姆登·利維 (Camden Levy)，替補布萊恩·施瓦茨 (Brian Schwartz)。這裡只有一個。考慮到你們對旅遊業的了解，並考慮第三季度進入第四季度，特別是10 月第一個月，你們是否看到由於中東地區持續不斷的衝突（與歐洲、中東和非洲地區相關）導致消費者需求出現類似的連續疲軟現像以及您本季在該市場看到的一些優勢？

Yes, Camden, great question. I would tell you, we're watching that very carefully. So far, we haven't seen any impact to demand or big impact to our customers. So -- but we are actively monitoring the situation. But so far, we have not seen any impact, and we're not seeing our customers be impacted by that currently.

是的，卡姆登，好問題。我會告訴你，我們正在非常仔細地觀察這一點。到目前為止，我們還沒有看到需求受到任何影響，也沒有看到對我們的客戶產生重大影響。所以——但我們正在積極監測局勢。但到目前為止，我們還沒有看到任何影響，目前我們也沒有看到我們的客戶受到影響。

Okay. And then maybe just by following up on it. I know you like (inaudible) the customer conversations or just ongoing pipeline that you had with travel partners or suppliers in, I guess, like EMEA and like Middle East, have any of those conversations maybe perhaps stalled or elongated as a result of October per se?

好的。然後也許只是跟進它。我知道您喜歡（聽不清楚）與旅行合作夥伴或供應商進行的客戶對話或正在進行的管道，我猜，像歐洲、中東和非洲和中東，這些對話可能會因為10 月的結果而陷入停滯或延長瑟？

Yes. Great question. I would tell you no, no stalls. It's continuing. And I would say, we are actively engaging in both of those regions, EMEA and Middle East. And we're continuing to see the focus on their strategy. And I think they've seen the importance of innovating and the value that it can drive. So, so far, we haven't seen any instances of them slowing down.

是的。很好的問題。我會告訴你不，沒有攤位。它還在繼續。我想說的是，我們正在積極參與歐洲、中東和非洲和中東這兩個地區的業務。我們繼續看到他們的戰略受到關注。我認為他們已經看到了創新的重要性及其可以帶來的價值。因此，到目前為止，我們還沒有看到任何放緩的情況。

Our next question comes from the line of Victor Cheng with Bank of America.

我們的下一個問題來自美國銀行 Victor Cheng 的電話。

Congrats on the solid quarter again. Just 2 from my side. Obviously, you mentioned you continue to see a faster sales cycle. But can you give us some more color maybe on the pipeline and what you're seeing at the top of the funnel. Whether there's more happening at the top. And maybe if you could split it by geography as well, maybe a bit more color on the U.S. as well as it appears to be a bit softer in Q2 -- in Q3.

再次恭喜季度業績穩健。離我這邊只有2個。顯然，您提到您將繼續看到更快的銷售週期。但是您能給我們更多關於管道的資訊以及您在漏斗頂部看到的內容嗎？高層是否有更多事情發生。也許如果你也可以按地理位置劃分，美國的色彩可能會更多一些，而且在第二季和第三季似乎會更加疲軟。

Yes, Victor. Great question. So we didn't see any softness in the U.S. in Q3. And overall, top of the funnel continues to grow well. It puts us in a -- we feel in a good position to continue to drive growth.

是的，維克多。很好的問題。因此，我們在第三季沒有看到美國出現任何疲軟。總體而言，漏斗頂部繼續增長良好。它使我們處於一個有利的位置，可以繼續推動成長。

So overall, I would tell you, whether we look at industries or geographies, we're seeing good demand across. There's not an area that we're seeing decline, whether it be at the top end of the funnel or within, say, Q3. So we saw pretty good demand across the U.S., Europe and other regions. As well as across industries. One other thing I will note is the mix continues to be between new and existing in that 50-50 mix as well.

總的來說，我想告訴你，無論我們看行業還是地區，我們都看到了良好的需求。我們沒有看到任何區域出現下降，無論是在漏斗的頂端還是在第三季之內。因此，我們看到美國、歐洲和其他地區的需求相當不錯。跨行業也是如此。我要指出的另一件事是，新產品和現有產品的混合仍然是 50-50 的混合。

Got it. And then the other one is maybe on travel. Obviously, you mentioned that demand is coming back. But I just wanted to check, is kind of the airline IT spend still below that prepandemic level. And as we think about '24 with a lot of the volumes broadly normalized, and when I think about airline industry in general, they're going through once-in-a-generation change, both on distribution, on software side, with offer orders management. Should we expect a much bigger appetite in '24, '25, when should we see that coming in?

知道了。然後另一個可能正在旅行。顯然，您提到需求正在回升。但我只是想檢查一下，航空公司的 IT 支出是否仍低於疫情前的水平。當我們想到 24 世紀時，許多銷量都已基本正常化，當我想到整個航空業時，他們正在經歷一代人一次的變革，無論是在分銷方面，還是在軟體方面，在報價方面訂單管理。我們是否應該期待 24、25 年會有更大的胃口，我們什麼時候才能看到這種情況？

Yes. Great question, Victor. I would tell you that Q3 was a big progress quarter for us to see travel trend more towards 2019 volumes. And I think we feel very good about Q4 and as we look into next year of that continuing. So I think it's a little premature to call '24, but I feel all the ingredients are there. Airlines are starting to invest, and they're investing in the areas that we innovated as we talked about.

是的。好問題，維克多。我想告訴您，第三季度是我們取得重大進步的季度，我們看到旅行趨勢更加接近 2019 年的銷售量。我認為我們對第四季度感覺非常好，並且當我們展望明年的情況時會繼續。所以我認為現在稱之為「24」還為時過早，但我覺得所有的要素都已具備。航空公司開始投資，他們正在投資我們談到的創新領域。

So I think our market position is continuing to strengthen. And I think all the areas where we expanded our portfolio are resonating really, really well. I mean, just recently, there was an article about Lufthansa and our continuous pricing as an example, that they've had very significant success this year, and they attribute to the investments, they did with PROS during the pandemic and now reaping those benefits.

所以我認為我們的市場地位正在繼續加強。我認為我們擴展產品組合的所有領域都引起了非常非常好的共鳴。我的意思是，就在最近，有一篇關於漢莎航空和我們的持續定價的文章作為例子，他們今年取得了非常重大的成功，他們將其歸功於投資，他們在大流行期間對PROS 進行了投資，現在獲得了這些好處。

Those are great proof points that the innovations that we did are paying off, and I believe that customers will continue to follow to do those latest generations of revenue management and our full solution from the digital fare marketing, all the way into revenue management to drive better returns for their business. So overall, I feel very good about travel, as we look into '24, but it's a little premature to call next year.

這些都是很好的證據，表明我們所做的創新正在得到回報，我相信客戶將繼續遵循最新一代的收入管理和我們從數位票價行銷到收入管理的完整解決方案，以推動為他們的業務帶來更好的回報。總的來說，當我們展望 24 世紀時，我對旅行感覺非常好，但明年打電話還為時過早。

At this time, ladies and gentlemen, we have reached the end of the question-and-answer session. I would like to turn the call back to Belinda Overdeput for closing remarks.

女士們、先生們，至此，我們的問答環節已經結束了。我想將電話轉回貝琳達·奧德普特（Belinda Overdeput），讓其致閉幕詞。

Thank you for listening to today's call. We look forward to speaking with you at conferences and events this quarter. We will be attending the Stifel Midwest One-on-One Growth Conference in Chicago on November 9, the Craig-Hallum Alpha Select Conference in New York City on November 16. The Needham Virtual SaaS 101 Conference also on November 16 and the UBS Global Tech Conference in Scottsdale on November 29 and 30. If you have any questions following today's call, please contact us at ir@pros.com. Thank you, and goodbye.

感謝您收聽今天的電話。我們期待在本季度的會議和活動中與您交談。我們將參加11 月9 日在芝加哥舉行的Stifel Midwest 一對一增長會議、11 月16 日在紐約舉行的Craig-Hallum Alpha Select 會議、11 月16 日舉行的Needham Virtual SaaS 101 會議以及UBS Global Tech 會議。會議將於 11 月 29 日至 30 日在斯科茨代爾舉行。如果您在今天的電話會議後有任何疑問，請透過 ir@pros.com 與我們聯繫。謝謝，再見。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。