PROS Holdings, Inc. (PRO) Earnings Call Transcript & Summary

Good morning. I'm Bill Russell, Chairman of the Board of Directors of PROS Holdings. And I'd like to welcome you to our annual meeting of stockholders, which is being held virtually this year due to the public health impact of the coronavirus or COVID-19. This global pandemic has presented all of us with unique challenges, including how to safely and efficiently conduct this year's annual meeting of stockholders through a virtual format. So we appreciate everyone's understanding in this challenging time. I will be serving as the Chairman of the Meeting, and the meeting is now called to order. As we're holding this meeting virtually, the other members of the Board of Directors are also participating virtually. They are Andres Reiner, Greg Petersen, Les Rechan, Tim Williams, Penny Herscher, Mariette Woestemeyer and Ron Woestemeyer. Also attending virtually is Carlos Dominguez, who is standing for election to the Board for the first time. We look forward to welcoming Carlos to the Board soon. As previously announced, Ron Woestemeyer, who founded PROS with his wife, Mariette, will be retiring from the Board following this annual meeting. It has been my professional and personal honor to serve alongside Ron and the Board of PROS for many years. And on behalf of the entire Board of Directors, the employees and customers of PROS, I want to say thank you, Ron, for your amazing contributions to this company, and we wish you all the best in retirement. Others attending this meeting virtually include Stefan Schulz, our Executive Vice President and Chief Financial Officer; and Damian Olthoff, our General Counsel, who has been appointed secretary of this meeting to record the minutes. So I'll now turn over the meeting to Mr. Olthoff to handle procedural matters and the formal business of the meeting. And during the meeting, Mr. Reiner will make a few remarks. Damian?

Thank you, Bill. Our Inspector of Elections for the meeting is Mr. Drew Valentine. Mr. Valentine is employed by DLA Piper, signed an oath of office and will tabulate the results of the voting. The company received an Affidavit from Broadridge Financial Solutions, the service provider that distributed our proxy, indicating that the notice of the Annual Meeting of Stockholders was mailed on or about March 17, 2020. Only stockholders of record on the record date of March 5, 2020, are entitled to vote at this meeting. The proxy materials will be maintained with the minutes of the meeting. The list of the company's stockholders as of the record date has been on file at the office of the company for the preceding 10 days and is available today for examination electronically in the virtual meeting platform. Mr. Valentine reported to me that we have present, by proxy, a sufficient number of shares to constitute a quorum, so the meeting is duly constituted, and the meeting may now proceed with its business. As described in the notice of meeting, we are voting on 3 agenda items today. These items have been described in the proxy materials previously delivered to all stockholders of record for the meeting. Given the virtual format of this year's annual meeting, the company announced in its press release on April 6, 2020, that stockholders could submit questions in advance at www.proxyvote.com. Although no presubmitted questions were received, if any applicable stockholder questions arise during the meeting, we will address them during our earnings call next week or post answers on our Investor Relations website at ir.pros.com following the earnings call. The first item on which we are voting today is the election of 3 Class I directors and 1 Class III director to the Board of Directors, with each Class 1 Director to serve for a 3-year term expiring in 2023 and the Class III director to serve for a 2-year term expiring in 2022, each of them to serve until their successors are duly elected and qualified. Mr. Greg Petersen, Mr. Timothy Williams and Mrs. Mariette Woestemeyer have been nominated as Class I directors to fill a 3-year term. And Mr. Carlos Dominguez has been nominated as a Class III director to fill a 2-year term. Mr. Petersen, Mr. Williams and Mrs. Woestemeyer, are current directors of the company. The second item on which we are voting today is to conduct an advisory vote on executive compensation. The third item on which we are voting today is the ratification of appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ended December 31, 2020. It is approximately 8:04 a.m. Central Daylight Time, and the polls are open, and we will proceed with the voting of the previously described matters. It is not necessary for stockholders to vote electronically today if they have already voted by proxy, unless they wish to change their vote. Any stockholder who wishes to vote electronically at this time may do so using the virtual meeting platform. Now I would like to turn it to Andres Reiner, our President and CEO. Please be aware that Mr. Reiner's remarks today may contain forward-looking statements. These statements are based solely on present information and are subject to risks and uncertainties that can cause actual results to differ materially from those projected in the forward-looking statements. Please refer to our SEC filings for more information on these risks and uncertainties and on the limitations that apply to our forward-looking statements. Andres?

Thank you, Damian. Good morning, and welcome to PROS' Annual Stockholder Meeting, and thank you for joining us today via the virtual meeting platform. All of us have been affected by the global COVID-19 pandemic. Our thoughts are with all of those who were directly impacted. And our gratitude goes out to all those who are aiding our communities during this crisis. At PROS, we're focused on ensuring the safety and health of our people and communities while supporting our customers and partners. We continue to execute on our business continuity plans and capabilities to support our global workforce and customers through virtualization and to support our processes and technology to be able to continue to drive business and deliver solutions. We have faced difficult situations in our company's history before, 9/11, SARS, Hurricane Harvey. And each time, we've emerged stronger because of our caring team and our desire to help our customers and fellow employees. I'm confident we will rise to this challenge and continue to deliver on our mission of helping people and companies outperform. We're currently in a quiet period prior to our Q1 earnings release and investor call, which is scheduled for May 5. As a result, I cannot speak at this time to our most recent results. We will do so in a comprehensive manner in a few days' time. However, I would like to look back briefly to 2019. 2019 was a strong year for PROS. Thanks to the tremendous effort of our amazing team, we grew total revenue by 27% year-over-year, our highest growth rate yet as a cloud company, where AI solutions are resonating in the market, which has driven us to achieve a 48% compounded annual growth rate in our subscription revenue over the last 4 years. At the core of us delivering the strong and sustained growth are our people and the incredible culture that we've created together. Our people are owners, innovators and care tremendously about our customers, their communities and each other. Every day, I'm humbled to work with such passionate, dedicated and talented team. Innovation remains at the heart of our strategy. We enhanced our AI solutions and platform to handle even more scale with great speed and precision. Last year, we processed over 1.7 trillion transactions in our cloud, delivered over 11 billion real-time price calculations to power e-commerce and enabled our customers to create over 1 million quotes in our Smart CPQ solution. We also released our next-generation smart CPQ and revenue management solutions in the market, which are helping our customers across industry power their digital selling transformations. Despite the current public health crisis, as we enter this new decade, we are excited about our team, market opportunity and innovative solutions. Now more than ever, digital selling in AI are critical for companies to gain a competitive advantage in their go-to-market strategy. And we're well positioned to lead companies in these areas. I would also like to personally thank Ron Woestemeyer on the occasion of his retirement from the Board of Directors. I've worked with Ron here at PROS for more than 2 decades. Words do not do justice to the vision, leadership and mentorship he has provided to this company since he founded it with Mariette 35 years ago. Thank you, Ron, for all your amazing contributions to our people, customers and communities. To our stockholders, I say thank you for your continued support of PROS, and I invite you to listen to our earnings conference call, which will be webcast on May 5, during which we will go into more detail regarding Q1 results and our outlook as we navigate this challenging time. With that, I'll now turn the meeting back over to our Corporate Secretary, Damian Olthoff.

It is approximately 8:10 a.m. Central Daylight Time, and the polls are now closed. Normally, we would announce the results of the voting at the annual meeting of stockholders. However, given the logistics of holding this meeting virtually, we will receive the final tabulation of voting from our Inspector of Elections and file with the SEC to announce the results within a few days following the meeting. There being no further business, the meeting is now adjourned. Thank you, and have a good day.