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

Good morning. I'm Bill Russell, Chairman of the Board of Directors of PROS Holdings, Inc., and I would like to welcome you to our Annual Meeting of Stockholders, which is being held virtually again this year due to ongoing social distancing measures required by COVID-19. The global pandemic has presented all of us with unique challenges over the past year, including how to safely and efficiently conduct this year's annual meeting of stockholders through a virtual format. 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. Firstly, I'd like to take the opportunity to introduce our other members of the Board of Directors. They are Carlos Dominguez, Raja Hammoud, Penny Herscher, Cathy Lesjak, Greg Petersen, Andres Reiner, Tim Williams and Mariette Woestemeyer. Three of our directors, Carlos Dominguez, Raja Hammoud and Cathy Lesjak, joined the Board during 2020. As previously announced, Penny Herscher, who has served on the Board since 2018, is ending her service with PROS as of this meeting. We thank her for her contributions to PROS over the past several years. I'd also like to introduce 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. I'll now turn over the meeting to Damian to handle procedural matters and the formal business of the meeting. And during the meeting, Andres 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 of mailing from Broadridge Financial Services, the service provider that distributed our proxy, indicating that the notice of The Annual Meeting of Stockholders was mailed on or about April 2, 2021. Only stockholders of record on the record date of March 25, 2021, are entitled to vote at this meeting. The proxy materials will be maintained with the minutes of this meeting. A 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 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're voting on 5 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 proxy statement that shareholders could submit questions in advance at www.proxyvote.com. Although no pre-submitted questions were received, if any applicable stockholder questions arise during this meeting, we will address them by posting answers on the PROS Investor Relations website at ir.pros.com. The first item on which we are voting today is the election of 2 Class II directors to the Board of Directors, with each Class II director to serve for a 3-year term expiring in 2024 and each of them to serve until their successors are duly elected and qualified. Ms. Raja Hammoud, Mr. William Russell have been nominated as Class II directors to fill the 3-year term. Ms. Hammoud and Mr. Russell 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 approval of amendments to our Amended and Restated 2017 Equity Incentive Plan to, among other things, increase the number of shares authorized for issuance by 3.1 million shares. The fourth item on which we are voting today is the approval of an amendment to our 2013 Employee Stock Purchase Plan to increase the number of shares authorized for employee purchase by 500,000 shares. The fifth 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 ending December 31, 2021. It is approximately 9:34 a.m. Central Daylight Time, and the polls are now open. We will proceed to vote on the previously described matters. It is not necessary for stockholders to vote electronically today if they've already voted by proxy unless they wish to change their vote. Any stockholders who wish to vote electronically at this time may do so using the virtual meeting platform. Now I would like to turn it over to Andres Reiner, our President and CEO. Please be aware that Mr. Reiner's remarks today may contain forward-looking statements, and 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 the PROS Annual Stockholder Meeting, and thank you for joining us today via the virtual meeting platform. 2020 brought uncertainty, adversity and opportunities to our business and customers as the COVID-19 pandemic affected all of us. Despite the challenges on our business and our customers, I'm proud to say that we grew our subscription revenue by 17% in 2020. This success is attributable to our amazing team and culture. At PROS, we want a better world for all and are committed to ensuring that our employees can realize their full potential. In recognition of the amazing culture, the team continues to build together. I'm pleased to share that PROS received a Great Place to Work certification. We remain committed to ensuring that our employees can bring their authentic selves to work in an inclusive environment so they can thrive and grow. Innovation is core to our DNA. And in 2020, we added over 600 new features to the PROS platform with more than 200 releases. Speed to market has never been as critical as it is now in digital marketplaces. Our latest platform innovations enable both B2B and travel customers to develop, test and deliver AI-powered dynamic pricing at scale and in real-time while providing an exceptional buying experience. PROS has been at the forefront of business AI for decades, continuously delivering leading-edge innovations, where advanced AI and machine learning algorithms use an ensemble approach to combine multiple models to deliver the best outcome possible. Our models are also adaptive. They self-learn and recalibrate based on user interactions and data signals. The strength of our AI is proven by the significant ROI we delivered through win rate improvement, revenue growth and margin uplift for our customers. I'm extremely proud of how our people adapted to supporting our customers last year. For example, our team delivered a record number of go-lives in 2020, most of which were completed 100% virtually and further strengthened our customer advocacy scores. We continue to deliver exceptional value and an incredible experience for our customers to help them outperform in their markets. We're off to a strong start in 2021, and we're encouraged by the demand for solutions and the market opportunity in front of us as the macro environment continues to recover. In fact, industry analysts now expect digital sales to overtake direct sales as the primary B2B channel by the end of 2021. Organizations need more than ever a platform they can deliver a true omnichannel sales experience. The PROS platform has been uniquely designed to optimize selling across direct and digital channels. Airlines are anticipating a pent-up demand for travel as the recovery progresses, and they will need a sharp focus on delivering highly personalized offers that drive conversion of passenger sales. In Q1, we launched PROS dynamic offers, giving airlines the power to deliver personalized fare, seat and ancillary products and bundles to their customers through any distribution channel. In closing, I also join Bill in thanking Penny Herscher for her service to PROS. I've enjoyed working with her on the Board, and I'm grateful for her contributions to PROS. To our stockholders, I thank you for your continued support of PROS, and I invite you to review our most recent earnings information which was released on May 4. With that, I'll now turn the meeting back over to Damian.

It is approximately 9:40 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 the 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 this meeting. There being no further business, the meeting is adjourned. Thank you.

The annual stockholders meeting of PROS Holding Inc. has concluded, and you may disconnect.