NYSE:PRO Company Overview - 21Nov111. “Powering Profitability”
November 21, 2011
®
Leading Provider of
Enterprise Pricing Software
®
©2011 PROS Holdings, Inc. All rights reserved.
2. Forward-looking Statements
Included in this material are forward-looking statements including,
but not limited to, those related to earnings and other financial
projections. These predictions, estimates, and other forward-
looking statements involve known and unknown risks and
uncertainties that may cause actual results to differ materially
from those expressed or implied in this presentation. We refer
you to the documents we file with the Securities and Exchange
Commission, which identify and discuss important factors that
could cause actual results to differ materially from those
discussed in these forward-looking statements. All statements
included in these materials are based upon information known at
the time, and PROS Holdings assumes no obligation to update
any such statements.
®
©2011 PROS Holdings, Inc. All rights reserved.
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3. Company Overview
to leverage the power of pricing to
improve
million revenue FY 2010,
L&I growth up
implementations in countries over year history
Serve four major verticals across B2B & B2C
Introduced two cloud product offerings in 2Q11
man-years of pricing science
R&D investment
®
©2011 PROS Holdings, Inc. All rights reserved.
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4. PROS Serves B2B and B2C Markets
Fortune 500 : 4 of top 20
Healthcare Wholesalers: 3 of top 7
Office & Electronics Wholesalers: 2 of top 6
Airlines: 8 of top 10 (most profitable)
Automotive Services: 2 of top 5
Heavy Equipment: 2 of top 5
®
©2011 PROS Holdings, Inc. All rights reserved.
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5. Global Partner Ecosystem
System Technology Reseller
Integrators Partners Partners
®
©2011 PROS Holdings, Inc. All rights reserved.
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6. Investing for Long-term Growth
sales and marketing
innovation, cloud
partner ecosystem, M&A
®
©2011 PROS Holdings, Inc. All rights reserved.
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7. Investment Highlights
Differentiated product leadership with proven results
Large underpenetrated global market – ~7,500 enterprise targets*
Increasing awareness of need for pricing software
Strong revenue visibility
Mid 90% maintenance renewal rate
Strong balance sheet, solid $66.4 million cash position, no debt
Q3 2011 record revenue of $25.2 million
*Source: Hoovers - December 2010
®
©2011 PROS Holdings, Inc. All rights reserved.
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8. Large Market Opportunity
Enterprise ~7,500
$500M+ Targets
Mid-Market
$100-500M ~ 18,000 Targets
Enterprise B2B Market Penetration: 3% to 5%
® Market Data Source: Hoovers December 2010
©2011 PROS Holdings, Inc. All rights reserved.
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10. Prescriptive Pricing Solution Across Entire
Pricing Lifecycle
Pocket Margin
Pocket Price
Willingness to Pay
Cost to Serve
Win/Loss
Forecasting
Segmentation
®
©2011 PROS Holdings, Inc. All rights reserved.
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11. Increased Visibility of Pricing Success
“Successful price increases in all our segments The Price Is (More) Right: Improved
contributed 14 percentage points to sales technology – and leadership from finance –
growth.” may help companies optimize their margins.
– BASF, Oct 27, 2011 – CFO Magazine, June 1, 2011
Top Concerns of CFOs for 2011
• Ability to maintain margins
• Ability to forecast results
• Deal with price pressure from competitors
February 2011 “The single most important decision in
evaluating a business is PRICING POWER.”
Warren Buffett
Financial Crisis Inquiry Commission Interview
May 2010
®
©2011 PROS Holdings, Inc. All rights reserved.
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12. Intensifying Market Dynamics
Maximizing Profit Capture for Medical Device
Manufacturers: Gain Control Over Pricing Strategies,
Value Stories, and Profit Visibility
Medical Design Technology
July 13, 2011
Fuel Intentions - Volatile fuel prices are creating
new opportunities for some firms.
CFO Magazine
July 15, 2011
Price volatility is here to stay
Financial Times
Kimberly-Clark misses profit mark, will raise prices May 23, 2011
The Dallas Morning News
April 25, 2011
Threat Builds on the Margins
Companies’ Profitability Comes Under Pressure From Rising Commodity Prices
Wall Street Journal
Feb 11, 2011
®
©2011 PROS Holdings, Inc. All rights reserved.
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13. Financial Model
Historically High Revenue Visibility
Revenue recognized using percentage of completion
No revenue recognized at contract signing
Total FYE 2010 record backlog $107M, up 27% YOY
Mid 40% recurring revenue
Diversified Revenue Mix Across Industries and Geography
Manufacturing, Distribution, Services, Travel
~60% revenue outside US
Customers in 50 countries
Strong History of Profitability and Cash Flow
12 years of non-GAAP* profitability and positive cash flow
Long-term leverage in model
®
* Reconciliations of GAAP to non-GAAP financial information are included in our earnings releases
©2011 PROS Holdings, Inc. All rights reserved. available on our website.
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14. Growth Trends
Non-GAAP, $ in millions
PROS Revenue Trend
$25.2 2010 Non-GAAP* revenue $74.2 million
$23.8
$21.4
$20.2
$18.8
Record $107M backlog YE 2010
45% L&I growth 3Q11 YOY
3Q11 Operating income 16.8%
3Q11 Maintenance revenue up 17% YOY
3Q10 4Q10 1Q11 2Q11 3Q11 YTD 2011 Operating cash flow 15.7%
YOY ∆ 14% 19% 24% 33% 34%
®
* Reconciliations of GAAP to non-GAAP financial information are included in our earnings releases
©2011 PROS Holdings, Inc. All rights reserved. available on our website.
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15. Why We’re Confident
PROS received a “Strong Positive” rating from Gartner.
Report clearly underscores why pricing software has
become a strategic and mainstream business tool.
MarketScope for Price Optimization and Management Software
for B2B, 2011
Michael Dunne 7/29/11
®
©2011 PROS Holdings, Inc. All rights reserved.
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