PROS (PRO) 29 Oct 242024 Q3 Earnings call transcript

Greetings. Welcome to PROS Holdings Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Belinda Overdeput, Senior Director of Investor Relations. Please go ahead.

Thank you, operator. thank joining and everyone, afternoon, you us. for Good

filings replay on of earnings at Investor press call a SEC release, pros.com. website our found Our today's and can section of Relations the be

forward-looking our available statements, also of the Chief Executive me our results Officer; the commentary and by which and such on are remarks include call transcript, our from Officer. prepared on those website prospects today Please Andres be note statements official once guidance. and questions participant Schulz, Chief is and materially without Financial that our about forecast. including, will strategy, and some limitation, includes today's market financial Actual Stefan business replaced future differ and opportunities will available. With could and President Our Reiner, projections

current guidance As always, our based is conditions. on

discuss We and risks and This presented of in are today's macroeconomic the significantly uncertainties change. that we'll the number of release environment. cognizant impact the external environment guidance during geopolitical earnings doesn't call, assumes a could which

information, risk reflect our assumes factors PROS filings. update described obligation more circumstances. please the to SEC or forward-looking events no statements refer future any to in For to

you, the release. With each that, As the I'll turn most press call, discuss reminder, call Reconciliations without will Andres. unreasonable to between available extent during a comparable GAAP metrics. in available non-GAAP earnings our non-GAAP the and to measure we directly measure effort over are the

in years. than metrics. Year-to-date, in Good subscription EBITDA We quarter. our drive prioritizing continue to our industries exceeding much airlines capture by increasingly sectors to Belinda. of positioned all We businesses afternoon, across the thank testament converge the for call. quarter, the control all $X.X the and BXB delivered seeking have for ranges channels, have delivered while clear Airlines greater and unique revenue we're as you, cash driving digital Thank revenue I'm to incredibly a a sooner our of third self-serve today's their and and grown grew over remains we sectors. the by and our across are scale Platform. businesses ability million is XX% XXX% serve. across trends free inventory X offers. profitable a their growth. We're guidance how us These strong how and adjusted experiences, proud you markets joining well and to reinforce we winning PROS key everyone, priority a products are we like on value delivering high-end have sustainable, AI This operational to opportunity themes our improvement we across team flow. efficiency other BXB XXX% improvement in to as managed and strategic market subscription a BXC orders our similar even expected. EBITDA for to adjusted all XX% of

Our great helping innovations our attract of solution. and are industries Engine agent sellers in is digitally, win we embedded AI example an buyers Search all collaboration launch our demand digital business. A and focused between serve Marketing on drive

trend to that analyzes and achieve conversion. of the teams and models paid insights strategies AI proposals, optimize model solution better search. the These advanced SEM ROI. Our bidding performance AI inform One estimates marketing optimized probability search of per leverages cost AI the another while now agent maximize helping bid for click, average clicks recommends engine

interact tailored, pricing, experience. present By them Smart buyers. Platform with economic to empowering of rebates, integrating their of the with Management expanded sellers optimal our offers and a in which other, a promotions Rebate to fully launch also sellers the how view empowers more digital to optimized, PROS discounts, gain comprehensive We deliver solution, levers offers each holistic

channels. sales Our rebate-inclusive offers of execution will power all across the platform

stronger than is market-leading Our value platform highly ever. is our proposition differentiated, and

Our and program. adoption get generate And the tracks results the customers platform our only measures as stronger. of solutions continuously customer our through value part

that recommendation program an price adoption uplift customer shows Our leads using now of PROS XXX over to average basis points. margin

against leadership scaling market our bookings executing team XX% logos. I'll is incredible a from opportunity. and our instrumental is with examples. our A few this our industries, in our results, share been go-to-market where Todd have team go-to-market to across testament well wins we of QX had coming Our execution new operations. approximately

a leveraging This synthetic be providers the and to PROS at will growth. Twist strategy. Similarly, chose partnership the drive DNA fields for profitability underscores leader optimize and as AI-powered manufacturing, of the strategies adopted time greater PROS real Smart pricing their with place efficiency, pivotal of integrated in of that market growth. telecommunication capabilities, to X in and market offers and in industrial empowering a them PROS top adapt the research. Vallen, trust their critical By enterprises their heart across profitable to transforming to accelerate them for their cancer the and play dynamically supply winning a promotions DNA bring to quoting company selected leading distribution, at device using world's in harmonize AI launches, simplify enabling One changes Bioscience, forefront to fuel Platform portfolio. CPQ pricing such to to products role to PROS optimization, PROS price commercial

scale to web visibility. greater creating South content-rich Marketing efforts will customized that performance Offer bookings Airways pages selected their by for their enhance and PROS increase SEO growth African direct

continues customers. I'm our wins, to platform units. is within to its new Lufthansa to we're of driving our where across as CPQ to continuing addition expansions growth new of our our and This amazing incredibly are highlights POM strong we business. expand a Smart for continuously rollout while request-specific proud pricing in In see continuing existing base. customer the value markets. business BASF its of

to growth. platform driving the strategy, well people Our lead and market and positioned are continue

partners a with announced to ever from confidence efficiency on opportunity We remain the Also market the have performance for intentions cover our we internal and expanded candidates, our PROS, will consistently this in extend best at and is until significant shareholders in succession. In my our have financial to today including will we continue leadership unwavering you call that and is the had. It I front external gratitude an for our and stay to of PROS Stefan in role The work and as large closing, seamless our communities. I is global X improvements conducting team thank search, ongoing and PROS. delivered team, to to I to support. With retire to we have the named, dedication a adviser successor my their customers, margins, that, will us. and operational for outlook. turn diligently that I deep will strongest to my your year to find successor after have to Board over my capitalize customers ensure exceptional

Thank you, Andres.

I for First, strong done the in that you third believe the you I and the want In demonstrate to exceeded quarter, this all guidance position, the a across and have our we high-end third how strength. quarter for metrics. PROS in me. our know I appreciate company much everything ranges is results of

in even our These and efficiencies year. can outlooks continue linearity improved to executed in drive our operational ahead expectations, cash Our seen EBITDA improved marginal efficiencies this also of flow of quarter. Similarly, for be to the and bookings well led profit across organization our which teams the adjusted our year. free the the go-to-market greater team for

of delivered have every we EBITDA example, revenue dollar a For on incremental year-to-date adjusted $X.XX to basis.

year-over-year, up more our revenue X% and year-over-year, some was Subscription for was in million, total quarter revenue details Now million, $XX.X third guidance. $XX.X both on results. the up XX% exceeding

XX-month third trailing a X% revenue XX% gross above XX to quarter in months, revenue the trailing better. Calculated expectations be retention the improvement quarter billings of and year-over-year X% to slightly our in increased our continues rate Our recurring revenue, strength demonstrating and XX% year, over the further or last for and strong third increased total quarter.

approximate growth year subscription full revenue year-over-year. quarter, for growth. Non-GAAP the in rate XXX XX% total over to expect of we points forward, an third calculated was the improvement margin basis billings Looking

approximately PROS improvement in SaaS EBITDA cash an all-time of adjusted as quarter XXX% improvement per improvement third basis million $X.X significantly and in $X.X non-GAAP points in $X.X of cash of resulting exceeding third of and quarter We achieved exceeded was quarter per also share, delivered year-over-year. the Our third our a quarter, was We was year-to-date guidance margin. investments. double-digit third This XX% $X.XX year-over-year of company. We million share generated the in margin quarter, gross exited an the generated year-over-year. XX% guidance. third an and the flow an for overall free million and high non-GAAP and of EBITDA earnings XXX million free And cash in $XXX.X flow adjusted with

quarter. ranges, guidance implied I'll the update the guidance. fourth for first annual to guidance turning Now then ranges provide our

$XXX $XXX.X the range revenue to subscription our expect growth representing million, year now at XX% between raising the are to be revenue and We for subscription million midpoint.

EBITDA the flow and cash We ranges are also free our raising for year. adjusted

We expect to $XX.X million the be representing and at an of year-over-year adjusted improvement XXX% million, EBITDA midpoint. $XX.X between

of Our free $XX million, be the year million at is range year-over-year flow $XX XX% cash expected improvement the for in to to an the of midpoint.

the for guidance reiterating revenue. midpoint are We total

for As this to and is the midpoint. at growth $XXX.X total are $XXX.X which we million the XXXX, revenue million, the previous X% narrowing represents in range last quarter

we largest The anticipate guidance We typically $XXX of fourth fourth X% booking growth are this quarter. and subscription range same million, representing the for to that $XXX is midpoint. be guidance PROS, case million fourth the quarter the for the for and quarter. Shifting ARR reiterating at to the quarter

the in subscription $XX million, at growth the expect range midpoint. million representing $XX.X revenue between XX% to and We be of

of We at X% expect range and between $XX.X the midpoint. to in million representing total the $XX.X be revenue million, growth

their $X.X XX%, adjusted fourth of million based at share anticipate non-GAAP and thank global earnings the $X.XX support tax PROS. would XX.X improvement shares year-over-year on I EBITDA estimated customers between per estimated like diluted rate closing, average and and non-GAAP our to a per of outstanding. In between of team $X.XX midpoint. Using expect of an $X.X We share quarter weighted XXX% continued for we million an our million,

our upcoming support, you call to the shareholders, back for to speaking Operator? look the We with over events. I now will questions. our and your we for operator turn forward also thank you, at

[Operator from with & Scott Company. Needham Our Instructions] question first Berg is

seemingly right you maybe strong easy XX company Why after having is And fit I as what the guess right with are time to in we'll Andres. the all the start position, replacement a down role, CEO, CEO step looking then what's the is think right with set Why really President's the product who especially the the that super question, the years think at I now? you about potential for? today? profile is --

you, Yes. Scott. Thank

proud of I'd First the I'm say team. all, of incredibly

not could we've our strategy. Like foundation. is had and more in incredible of think position that an that have the And ever And all we I think think we strongest I I and front think I with opportunity strength at the have the be becomes team product we levels. strongest the market proud team have I that the incredible.

my it's is and me, more chapter For really family about something about. personally, switching time others to passionate I'm very helping spending my of with next

confidence personal obviously, that to my way myself at not our strong we're rush really this amazing And We're and to very possible, And is we're that us and an time that that process. So all-time that of built but it's is and best executing on find to help large Board have the position, take opportunity. right us in feel and somebody competitive committed on this in person we the the because a market capitalize very puts that the we've foundation position. We I decision, find strong, build The it to to business person. have. can very want it's the going want Obviously, we the orderly. our it and team high. going we're

look, happens want that on we work sure And adviser, is with committed year smoothly. create, it. and an sure all well-defined that's to So this. after a to committed I'm staying that that could to this exciting make we the and making I'm the for most through it as Board ever to plan transition very and I'm

near mentioned expansion commented you XX looks deal about Well, it you buying On all early or did How quarter? travel of expectations. about whether kind the into in of thinking how the we the days environment with passion. your Lufthansa. term, you demand that environment transcribe even are third or know miss like XXXX? to QX within has Andres, ago it's will to kind environment, weakened into I relative your the certainly And an that quarter,

South question, QX Scott. African would saw as travel. example. Airways in Great was and I some new I talked about an what line deals, with Yes. expected say, We Air great we which look, Dan on

easy and finding of all where ones, then we're is new we an the an the them. on example expansions of that, Asiana, we've I driving those value. to strategy innovated, ways Lufthansa the get continuing are pricing We Etihad. latest example one that some the and is And think value, value driving had for with drives started is where In immense Lufthansa areas request-specific great innovations

they to So markets. rollout want all accelerate across the

would say, very and was was very, continues I quarter would So we like the I BXB year-to-date. quarter really outperforming it well expected. a to perform say

is question next Parker Our from with Stifel. Lane

retirement. on congrats luck Andres, Best forward. going of

first The Stefan. for one is

couple the next pace any Some a of and outlook speak factors Can clearly, sort here? leverage different couple seeing the that areas the pretty adjusted of changes onetime strategy in to business a accelerate that in in quarters some in leverage where third for you're of that the across if nice the may nice of lines here you of or different EBITDA. quarter And just today? leverage there's

Parker, yes, we're incredibly it's efficiency across with standpoint. the board progress happy leverage really, And a from making. I'm and the

the been bounce have expenses, might little a line you board. We than a to have innovate. was notice in down did And to onetime that will more talked about still that. There's have gain to before. has did But Andres that we're back. some And you from would that expect. been tasks I G&A the external do. trending or more of been must more that's can efficiently year it's probably One how teams tasks able now things automate products inquiries do we bigger do the we've And or around efficiencies back professional queue. in kind this than we in our of implement many G&A one and things by respond like helped may will look to big that And more bounce finished. are that the before. we've And drivers make all continue operating ways we efficient. to responded AI everything things we us there and our say of leveraging would way our respond has said, really have even internal of our for how we across things I you how the inquiries. look able where I not -- when it's it benefit to general, so the more was to we last you, to We at tell There fees for

incremental think And dollar for well. so I going really forward, don't of we'll generate while showing nice revenue that a revenue be be $X.XX I forward generating know of we EBITDA leverage every of each dollar dollar we'll revenue going as -- in

Very Yes. helpful.

Andres, launch then, the years X about from And public Okay. ChatGPT. removed we're of

years of Can AI are X AI ago, great done expertise, job of process. the are really how AI funnel? on benefiting phase the a actionable X search side and sort Like things discovery you just something the sales new sparking bringing to features it You process? where conversations? the in of a boom terms product your your like leveraging to top is fore AI embedded guys Is of lot your we ago of relative that assess in this business the in the is public have of how people in Is the much agents awareness year of?

mind of to I question. is would everyone. great say, AI top Parker, look, Yes,

really core AI spend. but embeds product at that In like market ad always real that think to are meaningful, value. I now SEM, products, differentiated one that we're core PROS at platform components just feature. itself. that is our solution. AI want optimize our an think the the to the an of companies They our that don't has AI at is of I launched that AI add-on which is just have the These embedded embedded the And what want very foundational seeing I if what look we about, all it's talked And you uniquely every AI feature. technology differentiates the wasn't drives and had in product core now, AI of

time, I focused for really digitizing, in theme embedding and -- really be been AI these market. BXB that and technologies continuously our think to learning I've profitable resonating is automating long growth every are on to company a and is this saying is and and drive prioritize seeing And company -- grow. that. drive initiatives to we're needs look, companies And realize they really efficiency enable every helping them needs as the

is question next Our with Rob Oliver Baird. from

you successor your That's I is as around best -- look about guys well. you yes, from and and here. Andres, until My wish here chapter, the new forward question working you is we're continuing me congrats exciting efficiencies talking to to found. all with cost an

things of and around the I know the combining guys made think sense. travel BXB sales air side, kind of you I was were One doing which forces

to would of love as get how 'XX something year-end that we leverage if an been seen that's or just if the prepping if a operating or that, going, I update that FY contributor still would So be on progress and done date has you've more that it's in any that's and for to 'XX? head impactful into to in

Yes, Todd's scale lot changes to of I rigor made Rob, a bring question. to a the great Look, and lot organization. of think great

those industry to bringing way all be the gen with say he's to and showing alignment a focus built expertise But travel yet. is that our of strong with that organization get is all customer around demand regional of scale. One an is BXB would there. our I to closer from up that unifying And success not customers

going going driving because be believe AI want whether transform, if success, innovation of users the and into have this you'll is Every big of is would expansion. to security in driving with that that our marketing, is and digitization, automation future, whether leverage always what's for AI. role all organization it teams believer legal, you our our driving products. in sales, think drive next is that from AI, but strong the think AI be drives our very that leaning learning long-term transform year. AI in prepare I more we I And every tell And every see organization confidence to way to I to initiative. be in every we've it And innovated I'm and we to our profitability into more goals role. And driving is a to AI, scale. Obviously, deeply. that's our customer they really

That's a having in Boeing normalize? are market any, Got the curious, -- pull-through to of of seeing return I some the then and said that What, of Stefan, that thinking did industry in was around headed your few was signs coming how about not What into to -- the guys state positively appreciate. I see around in not from IT travel just should to and Are you guys or just can and as question it. we the travel this pointed And wanted great. Are through because perspective, in the starting seeing we're Scott's issues expected, you are airline get of IT? between how you it I of see earlier folks Helpful. a expect cautiously? you in which storm know perfect 'XX data revenue sort now you rehired? travel starting management fact to more either years or things just tourism seeing, invested if spend, quarter industry And domestic numbers kind last CrowdStrike that the out we're terms China. improving the

Yes.

we're There's I of shift what the innovating. we've in coming. move to to want airline look really industry is start? saw a future big activity. So We offer and why general, at I shift invest. there's which been areas on airlines don't lot the mean the we've a optimization, of innovated, seeing In that

from going digital So digitize customer a a way to of the the retail better they're lot them through all we're on interest of marketing experience seeing that, experience. rethinking the digital how and everything drive

my decline, strong is where from seeing very continue is no investment is my I interest where And this was quarter's we're we the levels of belief in expected overall, not lagging say, a but activity where innovating. strong. some. In significant year's we issue. view, a a no pace QX perspective improvement, expected, issue, would type sales we're to So be

very that going are they long-term to These let... think But want strategic I'll we the and for I to innovated in areas aligned invest are very invest. areas where goals, they in. we're their

was as I saying, And think, today and to very almost XX our days kind -- of our is outlook was, outlook Andres Rob, say, it repeat consistent ago. what

I what can much and same we our But pointed we from that's other agree see the out and we're things that ago, along. think certainly out like is Boeing, really all the like XX I seen. we days et Andres. that with risks what we're geopolitical upon mean towards. there. escalations cetera. it's go execute experiencing we There's you moving we've what as saw I that's with environment And perspective, pretty the

still looking measured something still not to a it like perspective. travel it's market be that we're can But at we'd from think be years. to in where as I -- quarters there's opposed

question next Jason from Celino Markets. KeyBanc with Capital Our is

cycle Zane seen on This or for pivoting size Jason Any sales from specifically Meehan today. Maybe in you've length? ago, to BXB. maybe days big deal is average average XX changes changes on

a we look, Great quarter, is margin the well it think communicated to demonstrate results. translating strong we've revenue that proposition. opportunities on into continues I question. executing by a very as BXB market still the XX% and value difficult executing uplift, I say, strong. we ROI I that is, this And think year-to-date. but and is have that's and say would strong we're have last say cycle would I sales average We would our improved very overall, be. No, I to time it mentioned is And

I are a year. size a deal constant has last with XX% an our average improvement deal leveled from up cycle, execution definitely and think remained overall from we've seeing

see to Okay. quarter. Great. Management. And Smart a out then quick that this Nice rolled one Rebate on

as just Or customers? behind to well? Just strategy product? maybe on travel specifically then the that quickly be applied And can is that monetization for that BXB

capabilities. Yes. the management excited rebate about No, we're really

your think and revenue. to you rebates, now If about to to help organization, volume in BXB from drive we industries, defining whether applies and promotion to really a a you're a or levers price this travel negotiation more an to contracts discount all and can

So we very think is this strategic.

expect network in this a to customer and level look. our any sell a can We brings of is We're we that add-on also differentiation. taking an different

If in you management rebate pure bad opinion, of helps In you my most faster, automation deals look at solutions opinion. out the automation. are get my just

you AI embedded AI. And being customers I full platform think increase with this drive accounts. has share our within to need I think But best expect AI, help what's outcomes big to wallet that is critical. that our business I our focus and the differentiator. think, we company is the embedding revenue our margin a on end-to-end And a drive only

the Perfect. Andres, congratulations planned on retirement. And

Thank you very much.

question with Brian next Oppenheimer from Our Schwartz is & Company.

the and trending within question A business. expansion your new activities the the follow-up is I'm on curious how mix acquisitions BXB between your just BXB business.

question. Great Yes.

existing. So in to the quarter, it XX-XX was new

really Year-to-date, But between net had to we're be. good code and we're in XX-XX, is within we ZIP expansions. at that's balance great existing. XX a So new we And XX-XX, which want a the mix. QX, really XX new,

mix. with So that we're very pleased

-- beat that mostly in And subscription QX, to back noticed one business? dynamic. get you decided if the the there to because caution you the guidance business above wondering on of revenue just travel that to ARR above Is Just curious on think was thoughts Stefan, guidance did that, -- raised then, subscription just your the question the dynamics? on but I those the that hold what that And I guidance.

our with in and the good BXB had Yes. out, saw observation. No, pointed We we good we lot Andres raise number, a to And we a really do as quarter quarter. a strong had third had revenue well. as linearity. we as did that commented, of did -- subscription Mainly, what you level

to of to a From here still, that point of standpoint. carried year more overall the the quarter revenue subscription we perspective, And put terms from is, as lot ARR our rest so chop And as to the which quarter, our through that in booking largest as us quarter, out, see position in like between fourth third well. is the there's typically wood a in say, a why home getting I of plan. a you and

that So of really and ourselves in number well comment We there is the happening days talked we then the earlier, tensions. I about much. And we get with didn't want of made commented to some ahead world things Belinda this talked Boeing the a a as -- these strike. on about geopolitical

to again ahead And well, in as make that get of to our had we so that we wanted not mind ourselves. sure

we essentially guidance XX viewing the last so is half the And how established with of consistent days we were year the second the ago.

we're And this so time. guidance how our that's in at thinking point about

from Chokshi is question next Our Markets. Northland with Nehal Capital

My congrats as to the company for the improved profitability as well Andres, your retirement.

You will missed. be

turn to us M&A anniversary but stance. a with the far for want acquisition. year are X-year coming you of acquisition, another So I few EveryMundo It's you'll still to probably. to be and the I been recognize between, quite, the close

you've a to realize review love So I that get would with acquisition. this been synergies of able to the

It's key Andres a and to doing part a team the that the talked offering. would with some acquisition. that EveryMundo about Product say very lot of product brings the our the of Yes. pleased Offer things table the address I we're travel we're to Marketing EveryMundo market show the lot I of remarks, South couple quite some of airlines. we way we highlighted, the ways can frankly, in for existing in Andres' African. wins a and airlines in a Dan prepared of even one And best think, Air very new and with a which value is fast Suite

very SEM side. that. us infusing side, the be it BXB also with the that has is going on launch innings us the very, on side talked and going AI help I'd our really good we So very travel solution product very to that early to we're But the on for able to just while some us into recent well. benefit BXB the about how in it's as -- of for been say benefits we're

their culture -- a was that would hand-in-glove years. a type the nice of really PROS, say a tremendous very fit acquisition. have So it's it's EveryMundo been and people I team had relationship been X for with The last

The that. I they us Yes. of echo them. they've an proud the just I'm that organization extremely has innovation great. would amazing impacted been It's and team. brought how to

impact I I'm future. technology is that say So the company proud. And really the every potential to of about extremely would

more about to If you going and BXB, it is to channels. move think digital more

going companies power marketplaces. BXB to channels, going to to going offers. they're ready. power to have have move digital As digital They're We're to to be

of is in So if you future. strategy bringing to in technology innovation to lot they're future-proofing a the the think going our really compete the BXB about -- need businesses

travel So is and as capabilities ahead Marketing be as said, move And product like I've them BXB a decade we're in digital probably more to in levels for more any industries launching the of our industry Offer helping sophistication. more going of channels. they always to

it's acquisition, that about well. particular excited So very performed and

And then follow-up. a just

With the you continue cash a be nice to the company to flow, guys Or with will debt? free acquisitions? amount will of now opportunistic generating be intention down pay

Yes.

up actually earlier It's the repayment and about a to we and the leadership what But road in are how it think but much depends to marketplace hard to to focus whether our main amount say M&A, it's selective have on now forward. see. will that's going continuing M&A at of those we the want talked the open opportunities go be happens and and that in and position the that execute remain the we be And we down more we're to we build what efficiencies to consistent a case process we products the to capabilities the with really fairly through, And decisions. the looking or and and fit leverage it's generate perspective. I we strategic is cash past. we're to go have now right that flow -- debt expand a whether we continue bigger from capital that with done what make opportunities as we've in be how

Yes. Yes.

strongest a from ever competitive in As mode Stefan competitive like position said, the we're position, and at we're great we've a been.

strategic past, see at achieve But assets we need obviously, very look really we them the projections. in for look M&A tuck-ins, our growth we opportunities adjacencies, of So to And would and strategic think don't puts more right in like profitability we them that's position in believe do generate cash but don't have we that. drive at I to where cultural free to and think that strength as it flow, of continue be -- to do. more fit. something a But I to us around overall, we strategic

Our Van Group. from Capital final Craig-Hallum with question Rhee is Jeff

Got it.

it the scoped retirement. interest out. like made congratulations on sounds some Andres, you there. Just already It in particular got

the So you that. best I wish with all

Thank you.

starting more perspective. on Professional Maybe the numbers big year subscriptions, Several questions a this giving little years do PS 'XX. Thoughts pipeline, line. based the about what's Obviously, prior the guidance 'XX? between any from me. subscription rates I a growth a on aren't Services think disconnect and for between formal you how you closer relationship of But know tie. growth PS in the in on and

in what XXXX. seeing Yes. you're the say fall really plan out I would part this longer-term and of is

revenue of a And total exactly had that And that what value. say lot One rates though of our our actually services worked it's to actually growth something about coming our but we're that's having easier from down engineering plan. you the services, And only we've team starting teams we -- on, and for been talk odd me Professional hear a even in a work products. lower would have things not the see the of is it's percentage on. needle implementations and Services through. for simpler And of moved to time has point. our it's coming percentage worked to to and fruits coming us product through

that of So giving XXXX, not function pretty did say 'XX in that of we're and would 'XX on while guidance grow any continue I some benefit same expect more much between 'XX, don't although into a in and I a between I the because necessarily occurred step would we to 'XX. bit the it specific in going 'XX will say to that line. I But we're get than shifts moves 'XX. lot it in that product think probably know

a color just there. little So

And it. a want number 'XX Yes. formal to this growth X% know could I growth, loosely don't but Got you for then respect to with you 'XX, ARR Very give helpful. as you just year, maybe about the the think would that thought? least you're out in qualitatively sense at the quantitatively, to of thinking year? us or that drivers? give Any anything observations there about some the preliminary about help bounds talk how narrow get us Just key a any

Yes.

think I things is it seeing to lot going that you a of be XXXX. execution in continued the of were

guidance point ranges quarter. next we'll we you do as the that So giving typical normally out, be

to see on is continue about side I a part use, and color we're a lot our overall something to how it's a something strategy core of I and a expect but of thinking that. gave growth. services the know think people I little profitable really business. cliche as would we to and that's you bit that

I the need going a we're last question investments commented and growth this, subscription the we should more expansion quarter And not drive to say, one growth? to about for. And continue we I look one-for-one revenue and it's that think do thinking the will how on leverage some you is, efficiency always X% subscription OpEx number. Obviously, on got to to and think be relationship. And is ARR a also similar we for we're looking on that thing margin I line. that

on booked recognition. what's the ARR So come timing you revenue. such on I the good subscription to of times would timing But deals the tell is of in certainly lot that subscription a and then things a are indicator as

recognizing drive So the more better into transactions revenue. we can are likely bookings the we earlier, the

but that, come have kind XXXX So this prepared of on that's what point. more to I at for

last could piece. up just follow And on if I that maybe

versus higher et on nice you around putting And be a you on see you timing right, ARR things it look year. ARR that your would recognition, rather number it exceed than referenced, to -- position sense that the billings, initial you'd it, had be lower? when subscription the is without cetera, again would outperformance this just at a You in

have more a lot from to yet. in still work next do I'll quarter. there quite but of on not color a We that Yes. give planning perspective. close, We're

the on it. products? demand optimization promise, I'll as Got the CPQ in I versus the differences wrap me, any to price The and last for relates BXB up. side, it environment One --

No, on together. deploy lot tell demand I also will both strong I also POM sides. would we're a you, and we're say seeing both seeing CPQ

to going think with our design notion able decisions solution that because to really, way of but guidance that think back automating embedded. with I the I the again, allows just automating, we successful. just the both and right only is this embedding deals, not AI make best be the do our CPQ to to And we POM rep the more help are you be to

combined. of both seeing of them we're both well, on and them So CPQ resonate POM and both

the end Ladies Overdeput and of closing to I would reached the we Belinda to gentlemen, turn call over session. for like question-and-answer our have remarks. back

for listening and We forward look to events this with at call. quarter. to you speaking today's Thank conferences you

attending be November November in XxX Virtual the Midwest XX Northland will XxX Conference on Conference We XX. on X SaaS the Stifel the Needham on Chicago, Virtual and Conference Growth December

you If ir@pros.com. at today's please and us contact following questions call, have goodbye. any Thank you,

will conclude This today's conference. Thank you.

thank lines you at for disconnect and this time, participation. your may You your