Q4 2021 Pros Holdings Inc Earnings Call
Greetings and welcome to the Pros holdings fourth quarter and full year 2021 earnings conference call.
Speaker 1: Greetings. Welcome to the PROS Holdings fourth quarter and full year 2021 earnings conference call.
Speaker 1: At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
Speaker 1: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.
Speaker 1: I would now like to turn the conference call over to Belinda Overdiput, Director of Investor Relations. Please go ahead.
I would now like to turn the conference call over to Belinda over to put.
Director of Investor Relations. Please go ahead.
Yeah.
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 <unk> Dot com.
Speaker 2: 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 also be available on our website immediately following the call and will be replaced by the official transcript, which includes participant questions. Once available with me on today's call is Andres Reiner, President and Chief Executive Officer, and Stefan Schulz Chief Financial Officer.
Speaker 2: Our prepared remarks will also be available on our website immediately following the call and will be replaced by the official transcript, which includes participant questions once available. With me on today's call is Anders Reiner, President and Chief Executive Officer, and Stefan Schultz, Chief Financial Officer.
Speaker 2: 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.
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.
Speaker 2: Actual results could differ materially from such statements in our forecast. In particular, there remains significant uncertainty around the duration and impact of COVID-19.
Actual results could differ materially from such statements and our forecast in particular, there remains significant uncertainty around the duration and impact of COVID-19. This means that results could change at any time and the contemplated impact of COVID-19 on the company's business results and outlook is the best estimate based on the information available as of today for more information.
Speaker 2: This means that results could change at any time, and the contemplated impact of COVID-19 on the company's business results and outlook is the best estimate based on the information available as of today. For more information, please refer to the risk factors described in our FCC filings.
Please refer to the risk factors described in our SEC filings.
Speaker 2: PROS assumes no obligation to update any forward-looking statements to reflect future events or circumstances.
Pros assumes no obligation to update any forward looking statements to reflect future events or circumstances.
Speaker 2: 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.
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.
Thank you Bill and good afternoon, everyone and thank you for joining us on today's call.
Speaker 3: Thank you, Belinda. Good afternoon, everyone, and thank you for joining us on today's.
Speaker 3: As I reflect on 2021, I'm thankful to our team for what we've accomplished despite the disruptions with COVID on our business and our...
That reflect on 2020 , one I'm thankful to our team for what we've accomplished despite the disruptions of Covid on our business and our communities.
Speaker 3: ARR increased 9% year-over-year, and subscription revenue by 4% year-over-year.
Yeah, our increased 9% year over year in subscription revenue by 4% year over year.
Speaker 3: or gross revenue retention rate for the year returned to pre-COVID levels and was greater than 93.
Our gross revenue retention rate for the year returned to pre COVID-19 levels and with greater than 93%.
I'm proud to share that we generated over 33 million of free cash flow improvements year over year Martha.
Speaker 3: I'm proud to share that we generated over 33 million of free cashflow improvements year over year. I'm also pleased that Davrey Mundo...
I'm also pleased that the remainder team joined the pros family. These shared the same passion for innovation and customer success as well.
Speaker 3: They shared the same passion for innovation and customer success.
Speaker 3: I'm confident that because of our passion for innovation, we have the best digital selling platform in
I'm confident that because of our passion for innovation, we have the best digital selling platform in the market.
Speaker 3: We've been continuously innovating for over 35 years to help our customers today, five years from now in ten years.
We've been continuously innovating for over 35 years to help our customers today five years from now and 10 years from now in.
Speaker 3: In 2021, we continued our heritage of innovation with the launch of the Pro Splat.
In 2021 we continued or heritage of innovation with the launch of the pros platform.
Speaker 3: I believe we deliver significantly more measurable ROI than anyone in our community.
I believe we deliver significantly more measurable ROI than anyone in our market.
Speaker 3: Value assessment we completed with participation from more than 100 customers showed, on average, 6% revenue improvement from the use of our...
Your assessment, we completed with participation from more than 100 customer showed an average 6% revenue improvement from the use of our platform.
Speaker 3: Also believe that we have the fastest time to Valium, we're getting...
We also believe that we have the fastest time to value and we're getting faster.
Speaker 3: Our new prescriptive activation packages helped us drive an 18% improvement in time to value in 20...
Our new prescriptive activation packages helped us drive in 18% improvement in time to value in 2020 one.
Speaker 3: In fact, industry analysts have also validated our market leadership position with 15 company awards and accolades in 2021.
In fact industry analysts have also validated our market leadership position with 15 Company awards and accolades in 2020 one.
Including leadership positions in G. Two for pricing software the Gartner Magic quadrant for C. P. Q in the IDC market scale for better be price optimization and management. So proud of this recognition of our incredible innovations.
Speaker 3: including leadership positions in G2 for pricing software, the Gartner Magic Quadrant for CPQ, and the IDC Marketscape for B2B price optimization and management.
Speaker 3: So proud of this recognition of our incredible innovation.
In Q4, we welcomed new customers adopting the <unk> platform.
Speaker 3: In Q4, we welcome new customers adopting the pros plan.
B Braun medical a leading manufacturer of medical technology, and pharmaceutical products selected our smart price optimization and management solution.
Speaker 3: Bebron Medical, a leading manufacturer of medical technology and pharmaceutical products, selected or smart price optimization and management solutions.
These solution equips B Braun to respond quickly to changing market dynamics drive higher win rates and improved revenue and profitability.
Speaker 3: This solution equips B.B.R.U.N. to respond quickly to changing market dynamics.
Speaker 3: drive higher win rates and improve revenue and profitability.
Speaker 3: Or rapid time to value improving record of customer success are key reasons why B-Bron selected.
More rapid time to value improving record of customer success are key reasons, why b braun's selective probes.
Why pool and manufacturer of Stonewall products also selected pros in Q4, Rockwell will use our smart see PQ solution to streamline their selling processing quickly respond to customer quotes or ability to support direct and digital sales was one of the many reasons Rockwell chose.
Speaker 3: Rockwool, a manufacturer of stone wool products, also selected pros in Cuba.
Speaker 3: Rockwell will use our smart CPQ solution to streamline their selling process and quickly respond to customer
Speaker 3: Our ability to support direct and digital sales was one of the many reasons Rockwell chose.
It's.
Speaker 3: We're thrilled to welcome B. Bron and Rockwell, among others, to the Brose family and look forward to partnering with you.
We're thrilled to welcome B Braun and Rockwall among others through the Bros family and look forward to partnering with them.
The <unk> platform is also inspiring existing customers to migrate to the cloud.
Speaker 3: The PROS platform is also inspiring existing customers to migrate to the cloud.
Speaker 3: Clarion, one of Pro's first B2B customers and American Standard at customers since 2012, chose to migrate to her smart price optimization and management solutioning.
<unk> one approach first b to B customers and American standard of customer since 2012 chose to migrate to our smart price optimization and management solution in Q4.
Speaker 3: We're proud of our partnerships with Clarion and American Standard and look forward to continuing to drive long term value for their
We're proud of our partnerships with Clariant in American standard and look forward to continuing to drive long term value for their businesses.
So a result of the pandemic businesses around the world are increasingly prioritizing digital initiatives that strengthen direct customer engagement and build loyalty.
Speaker 3: As a result of the pandemic, businesses around the world are increasingly prioritizing digital initiatives that strengthen direct customer engagement and build loyalty.
This is front of mining the airline industry, where airlines are anticipating bookings through digital direct indirect connecting D. C channels to grow by 12 percentage points in the next three years, while the bookings through offline GDS in other channels decline. Additionally airlines interests in offer.
Speaker 3: This is front of mind in the airline industry where airlines are anticipating bookings through digital direct and direct connect NBC channels to grow by 12 percentage points in the next three.
Speaker 3: While the bookings through offline, GDS, and other channels...
Speaker 3: Additionally, airlines' interest in offer personalization has nearly tripled between pre-COVID and the recovery.
Personalization has nearly tripled between pre COVID-19 and the recovery phase.
With pros dynamic coffers pros digital retail and now digital offer marketing solution proceeds is extremely well positioned to help airlines deliver on these objectives.
Speaker 3: With Prost Dynamic Offers, Prost Digital Retail, and now Digital Offer Marketing Solution, Prost is extremely well positioned to help airlines deliver on this object.
Speaker 3: PROS Dynamics offers and powers airlines to create, price, and distribute personalized fare, seat, and ancillary offers through any airline web, mobile, or direct connect NDC
Pros dynamic off first empowers airlines to create pricing distribute personalize fair seat in ancillary offers through any airline web mobile or direct connecting D. C Chan.
Pros digital retail takes it dynamic offers solution one step further by adding or internet booking engine and user interface, giving airlines full control over their customer experience from the offer creation to order management.
Speaker 3: Pro Digital Retail takes the dynamic offer solution one step further by adding our internet booking engine and user interface, giving airlines full control over their customer experience from the offer creation to order match.
Speaker 3: For example, in Q4, existing customers like Air Europa and Golf Air expanded their partnerships with us to fuel revenue growth through their digital technology.
For example in Q4 existing customers like ear Eurobank golf here expanded their partnerships with us to fuel revenue growth through their digital channels.
Our acquisition of every moon dose digital offer marketing solution accelerates, our vision to optimize every shopping and selling experience.
Speaker 3: Requisition of every Mundo's digital offer marketing solution accelerates our vision to optimize every shopping and selling.
Speaker 3: Prose now provides brands greater control over their end-to-end customer journey with more meaningful interactions in the research and shopping.
<unk> now provides brands greater control over their ink twin customer journey with more meaningful interactions seem to researching shopping face. These solution to help brands drive more direct customer engagement through dynamic webpages offer virtualization in digital AD came.
Speaker 3: This solution helps brands drive more direct customer engagement through dynamic web pages, offer virtualization in digital ad games.
Pains.
In Q4 air ball taken viewing among others selected these solutions to increase website traffic improve user experience and drive higher booking conversion rates.
Speaker 3: In Q4, AirBaltic and Vueling, among others, selected these solutions to increase website traffic, improve user experience, and drive higher booking conversions.
Speaker 3: Before I transition to our 2022 strategy, I want to comment on our recent organizational change around the removal of the chief operating officer.
Before I transition towards 2022 strategy when he comments on our recent organizational change around the removal of the chief operating officer role.
Speaker 3: This fine organizational structure will drive greater speeding toward...
He is flying the organizational structure will drive greater speeding toward business more consistent execution and further empower sort teams to drive success I'm confident that these changes will better position us for long term growth and I look forward to working more closely with our amazing team.
Speaker 3: more consistent execution, and further empowers our teams to drive.
Speaker 3: I'm confident that these changes will better position us for long-term growth, and I look forward to working more closely with our amazing team to extend our market leadership.
<unk> to extend our market leadership position.
In 2022 we're continuing to invest in the three key pillars of our strategy.
Speaker 3: In 2022, we're continuing to invest in the three key pillars of our strategy. First is driving market adoption.
First is driving market adoption of the pros platform.
We're accelerating market adoption by increasing our sales marketing and delivery investments, we're going to be bolder in telling our story and sharing our customers send me seen success. Additionally, we're ramping up quota carrying personnel and expanding our delivery teams to support our growth.
Speaker 3: We're accelerating market adoption by increasing our sales, marketing, and delivery investments.
Speaker 3: We're going to be bolder in telling our story and sharing our customers' amazing success.
Speaker 3: Additionally, we're ramping up quota care and personnel in expanding our delivery teams to support our growth.
Speaker 3: Second, leveraging partnerships to accelerate our
Second leveraging partnerships to accelerate our growth, we recently announced the expansion of our Microsoft partnership to accelerate mass adoption of the seamlessly integrated Microsoft dynamics 365 imposed platform.
Speaker 3: We recently announced the expansion of our Microsoft partnership to accelerate mass adoption of the seamlessly integrated Microsoft Dynamics 365 in Prose Platform.
Speaker 3: We're also leveraging our ecosystem of system integrators like EY to increase our global footprint and further capitalize on our growth opportunities.
We're also leveraging our ecosystem of system integrators like U y to increase our global footprint and further capitalize on our growth opportunity.
Our final strategic pillar is delivering exceptional value in an incredible experience to our customers.
Speaker 3: Our final strategic pillar is delivering exceptional value and an incredible experience to our.
In 2021 or N. P. S scores reached an all time high above the industry average in our gross revenue retention rates significantly improved back to pre COVID-19 levels. We featured 43 customer speakers during our annual outperform conference.
Speaker 3: In 2021, our NPS scores reach an all-time high above the industry average.
Speaker 3: and our gross revenue retention rate significantly improved back to pre-COVID love.
Speaker 3: We featured 43 customer speakers during our annual AppReform conference. All these data...
All of these data points are a key test them in to the strength of our customer partnerships in our passion for customer success.
Speaker 3: to the strength of our customer partnerships in our passion for customers.
In 2022 will build on our team's incredible efforts last year.
Speaker 3: In 2022, we'll build on our team's incredible efforts.
We're expanding our prescriptive delivery packages to allow our customers to activate more use cases with even faster time to value.
Speaker 3: We're expanding our prescriptive delivery packages to allow our customers to activate more use cases with even faster time to value.
We'll also continue to help our customers get best in class, our ROI and accelerate their expansion journeys with our platform.
Speaker 3: We'll also continue to help our customers get best in class ROI and accelerate their expansion journeys with our
Speaker 3: We entered this year well positioned to accelerate our growth. We have the right people, strategy, and platform to capture this strong market opportunity.
We entered this year well positioned to accelerate our growth we have the right people strategy and platform to capture this strong market opportunity in front of us. So I close I'd like to thank our global team for their passion and dedication to driving customer success and broad market adoption of the protein platform while.
Speaker 3: Side close, I'd like to thank our global team for their passion and dedication to driving customer success and broad market adoption of the PROS platform while making PROS a great place.
Making pros a great place to work.
Speaker 3: Thank you to our customers, partners, and shareholders for your continued support.
Thank you tore customers partners and shareholders for your continued support of pros with that I'd like to turn the call over to Stefan to cover financial performance and outlook.
Speaker 3: With that, I'd like to turn the call over to Stefan to cover financial performance.
Thanks, Andreas and good afternoon, everyone.
Speaker 3: Thanks, Andres. And good afternoon, everyone. I would like to first welcome every Mundo to the pros family. We are excited to have them as a part of our team and add their innovative solutions to our platform.
We'd like to first welcome every Monday to the pros family.
We're excited to have them as a part of our team and add their innovative solutions to our platform.
Before covering our results I want to comment on the overall business we.
Speaker 3: Before covering our results, I want to comment on the overall business.
Speaker 4: We were significantly impacted by COVID in 2020 and 2021.
We were significantly impacted by Covid in 'twenty, 'twenty and 2021 we pulled our annual guidance in 2020, but reinstated annual guidance in early 2021 and I'm happy to report that our results either landed within or beat the initial guidance ranges, we provided towards the beginning of the year.
Speaker 4: We pulled our annual guidance in 2020, but reinstated annual guidance in early 2021, and I'm happy to report that our results either landed within or beat the initial guidance ranges we provided towards the beginning of the year.
Looking back the impact of Covid lasted longer than we all thought as one variant followed another variant.
Speaker 4: Looking back, the impact of COVID lasted longer than we all thought, as one variant followed another variant.
Speaker 4: I'm very proud of the work our team did to support our customers and deliver to our SBA.
I'm very proud of the work our team did to support our customers and deliver to our estimates I'm also especially.
Speaker 4: I'm also especially pleased with the improvements to our free cash flow, subscription gross margin, and gross revenue retention.
Especially pleased with the improvements to our free cash flow subscription gross margin and gross revenue retention.
Now moving to our results, which do include one month of every window.
Speaker 4: Now moving to our results, which do include one month of every Moondog.
Speaker 4: Subscription revenue in Q4 was $47 million, up 10% year over year, and $178 million for the full year, up 4% year over year and exceeding guidance.
Subscription revenue in Q4 was $47 million up 10% year over year and $178 million for the full year up 4% year over year exceeding guidance.
Total revenue in Q4 was $65 million up 7% year over year and $251.4 million for the full year and relatively flat year over year.
Speaker 4: Total revenue in Q4 was $65 million, up 7% year over year, and $251.4 million for the full year and relatively flat year over year.
Our gross revenue retention rate was above 93% a significant improvement as compared to approximately 88% in 2020.
Speaker 4: Our gross revenue retention rate was above 93%, a significant improvement as compared to approximately 88% in 2020.
As a reminder, we disclose gross revenue retention rates not net revenue retention rates.
Speaker 4: As a reminder, we disclose gross revenue retention rates, not net revenue retention rates.
Gross revenue retention does not include bookings from existing customers, which can mask real customer churn.
Speaker 4: Gross revenue retention does not include bookings from existing customers, which can mask real customer churn.
Speaker 4: Our revenue retention rates continue to demonstrate the value our customers see in our solution.
Our revenue retention rates continue to demonstrate the value our customers see in our solutions.
In Q4, our non-GAAP subscription gross margins improve sequentially again, and we're 75% while our full year non-GAAP subscription gross margins were 71%.
Speaker 4: In Q4, our non-GAAP subscription gross margins improved sequentially again and were 75%, while our full year non-GAAP subscription gross margins were 71%.
Speaker 4: We continue to see innovations within our cloud operations to drive greater efficiencies, resulting in margins that expanded throughout the year. I'm proud of our team for their efforts to drive these results, which also positions us well for 2022.
We continued to see innovations within our cloud operations to drive greater efficiencies, resulting in margins that expanded throughout the year.
I'm proud of our team for their efforts to drive these results, which also positions us well for 2022.
Speaker 4: We continue to make progress on adjusted EBITDA throughout the year and are pleased with our adjusted EBITDA performance this quarter. Our adjusted EBITDA loss was $6.4 million during the fourth quarter and $24.8 million for the full year, beating guidance. Our full year adjusted EBITDA improved 10% year over year.
We continue to make progress on adjusted EBITDA throughout the year and are pleased with our adjusted EBITDA performance. This quarter, our adjusted EBITDA loss was $6 $4 million during the fourth quarter and $24.8 million for the full year, beating guidance, our full year adjusted EBITDA improved 10% year over year.
Yeah.
Speaker 4: Our loss per share was $0.16 per share, which also beat the guidance.
Our loss per share was <unk> 16 per share, which also beat the guidance range.
Our Q4 calculated billings increased 30% year over year and 15% for the trailing 12 months, which was in line with our expectations.
Speaker 4: Our Q4 calculated billings increased 30% year over year and 15% for the trailing 12 months, which was in line with our expectations.
Our total ER or in constant currency was $229 $2 million at the end of the year and included $197.3 million of subscription a R. R.
Speaker 4: Our total ARR in constant currency was $229.2 million at the end of the year, and included $197.3 million of subscription ARR.
Our subscription E. R. R is becoming the predominant component of our total E. R. R. As we expected and we believe it is a good leading indicator of our booking momentum.
Speaker 4: Our subscription ARR is becoming the predominant component of our total ARR, as we expected, and we believe it is a good leading indicator of our booking momentum.
Speaker 4: We will be including this metric along with our total ARR disclosure going forward.
We will be including this metric along with our total air our disclosure going forward.
Free cash flow burn for Q4 was $1.3 million, bringing our full year free cash flow burn to $20.2 million, a 33.1 million dollar improvement over last year.
Speaker 4: Free cash flow burn for Q4 was $1.3 million, bringing our full year free cash flow burn to $20.2 million, a $33.1 million improvement over last year.
Speaker 4: The significant improvement over last year was driven by a combination of improved customer retention rates.
The significant improvement over last year was driven by a combination of improved customer retention rates.
And operating efficiencies in 'twenty 'twenty. One we also recovered all of the remaining customer payment deferrals extend it in 'twenty 'twenty as a part of our Covid concessions.
Speaker 4: In 2021, we also recovered all of the remaining customer payment deferrals extended in 2020 as a part of our COVID concession.
We exited the year with $227.6 million of cash and investments after the investment to acquire every window.
Speaker 4: We exited the year with $227.6 million of cash and investments after the investment to acquire every Monday.
We over achieved our year end target of adding quota carrying personnel and including every Monday, we ended the year with 67.
Speaker 4: We overachieved our year-end target of adding quota carrying personnel, and including every Mundo, we ended the year with 67.
We expect to increase our quota carrying personnel again in 2022 and believe we will be in the upper seventy's by the end of the year. Although we are expecting the total quota carrying personnel figure to dropped slightly in the first quarter.
Speaker 4: We expect to increase our quota carrying personnel again in 2022, and believe we will be in the upper 70s by the end of the year, although we are expecting the total quota carrying personnel figure to drop slightly in the first quarter.
Before I cover guidance I wanted to provide insights into what we're seeing in our business today.
Speaker 4: Before I cover guidance, I wanted to provide insight into what we're seeing in our business today.
As I mentioned earlier Covid has impacted our business for the last two years and while Covid will likely still be a challenge for all of US in 2022, we are seeing signs that customers and prospects in the hardest hit industries are considering investments.
Speaker 4: As I mentioned earlier, COVID has impacted our business for the last two years. And while COVID will likely still be a challenge for all of us in 2022, we are seeing signs that customers and prospects in the hardest hit industries are considering investing in the industry.
Additionally, we have flattened our go to market organization, which we believe will drive more consistent execution.
Speaker 4: Additionally, we have flattened our go-to-market organization, which we believe will drive more consistent execution.
Speaker 4: Together, these two changes will enable us to improve our revenue growth as we progress through 2022.
Together. These two changes will enable us to improve our revenue growth as we progress through 2022.
Speaker 4: As a result, we are guiding to stronger ARR growth rates in 2022 from what we've seen in 2020 and 2021.
As a result, we are guiding to stronger are our growth rates in 2022 from what we've seen in 'twenty 'twenty and 2021 .
Speaker 4: So with that, here's our guidance for 2022 with the stated growth rates reflecting the midpoint of the range.
So with that here's our guidance for 2022 with the stated growth rates, reflecting the midpoint of the ranges.
Speaker 4: Total ARR of $246 to $250 million, a 9% increase over last year, and subscription ARR of $224 million to $228 million, which would represent a 16% increase over last year.
Totally are are up $246 million to $250 million, a 9% increase over last year and subscription here are of 224 million to $228 million, which would represent a 16% increase over last year.
Speaker 4: Also, we expect subscription revenue to be in the range of $200 to $202 million dollars, reflecting a 13% increase, and total revenue to be within the range of $267 to $270 million dollars, which would be a 7% growth rate year-over-year.
Also we expect subscription revenue to be in the range of $200 million to $202 million, reflecting a 13% increase in total revenue to be within the range of $267 million to $270 million, which would be a 7% growth rate year over year.
Speaker 4: We are expecting adjusted EBITDA loss to be in the range of $25 to $28 million and free cash flow burn to be in the range of $21 to $25 million, essentially flat to slightly down year over year.
We are expecting adjusted EBITDA loss to be in the range of $25 million to $28 million and free cash flow burn to be in the range of $21 million to $25 million essentially flat to slightly down year over year.
We expect both metrics to gradually improve each quarter over the course of 2022 .
Speaker 4: We expect both metrics to gradually improve each quarter over the course of 2022.
Speaker 4: As Andres mentioned in his remarks, we are investing in our sales, marketing, and delivery teams to accelerate our growth. And we also expect a higher level of spin for all of our people. Our team is 222% value based. We have lifelich's wayne cup for our home America. ah
As Andres mentioned in his remarks, we are investing in our sales marketing and delivery teams to accelerate our growth and we also expect a higher level of spend for all of our people.
Our team is central to our success, we must compete in the current market environment to ensure we keep our best and brightest focused on driving value for our customers, while creating a place where everyone can reach their full potential.
Speaker 4: We must compete in the current market environment to ensure we keep our best and brightest focus on driving value for our customers while creating a place where everyone can reach their full potential.
Turning to the first quarter of 2022 we expect subscription revenue to be in the range of 48 to $48 $5 million, representing 13% year over year growth.
Speaker 4: Turning to the first quarter of 2022, we expect subscription revenue to be in the range of $48 to $48.5 million, representing 13% year-over-year growth.
Speaker 4: We expect Q1 total revenue to be in the range of $65 to $66 million, representing 7% year-over-year.
We expect Q1 total revenue to be in the range of $65 million to $66 million, representing 7% year over year growth.
We expect Q1, adjusted EBITDA loss of between 11 and $12 million.
Speaker 4: We expect Q1 adjusted EBITDA loss of between $11 and $12 million.
And using an estimated non-GAAP tax rate of 22%, we anticipate Q1 non-GAAP loss per share of between 24 and 26 cents per share based on an estimated 45.1 million shares outstanding.
Speaker 4: And using an estimated non-gap tax rate of 22%, we anticipate Q1 non-gap loss per share of between 24 and 26 cents per share, based on an estimated 45.1 million shares outstanding.
Speaker 4: In closing, I would like to thank our amazing employees and customers for their continued passion and support. We also thank you for your 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
In closing I would like to thank our amazing employees and customers for their continued passion and support. We also thank you for your 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.
Thank you at this time, we will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker.
Speaker 1: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question.
Speaker 1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, as we poll for questions.
Equipment, it may be necessary to pick up your handset before pressing the star keys, one moment. Please as we poll for questions.
Our first question comes from Tom Roderick with Stifel. Please proceed with your question.
Speaker 1: Our first question comes from Tom Roderick with Stiefel. Please proceed with your question.
Great. Thank you good afternoon, and thank you for taking my questions here Andrew.
Speaker 5: Great. Thank you. Good afternoon. Thank you for taking my questions here. Andres, I'm going to ask you to take the first question here. And, of course, feel free to chime in, Stefan, if you'd like to. But I would love just a little bit more detail relative to the sort of tale of two worlds, as you saw it here in 2021 and what that means for the way you've constructed guidance for 2022. And, of course, what I'm talking about with the tale of two worlds is the airlines have certainly been hit with some headwinds. They've been tough, maybe some signs of coming out of it, but certainly the variants more recently didn't help on that front. So when you construct a 16% growth guidance and subscription ARR, we'd love to hear how you think about the relative positioning of growth for B2B versus airlines. And to the extent that airlines may continue to be a headwind here for a little bit, how long do you see that occurring as you kind of look at the business?
Andreas I'm going to ask you to take the first question here and of course, you know feel free to chime in stuff out of you if you'd like to but would love just a little bit more detail relative to you know the the sort of a tale of two worlds as you saw it here in 2021 and what that means for you know the way you've constructed guidance for 2022 and of <unk>.
What I'm talking about what the tale of two worlds as the airlines have certainly been hit with some headwinds they've been tough maybe some science is coming out of it but certainly the variance more recently it didn't help on that front. So when you construct the 16% growth guidance on subscription a R. R would love to hear how you think about the relative positioning.
Of growth for B to B versus airlines and you know to the extent that airlines may continue to be a headwind here for a little bit how long do you see that occurring as you kind of look at the business.
Speaker 3: That's a great question, Tom. As you can expect, B2B is driving predominantly the growth as we head into this year. But we do expect travel to start to contribute more. But I would say, you know, predominantly the growth.
That's a great question.
As you can expect to be driving predominantly big growth as we head into this year, but we do expect travel to start to contribute more but I would say you know.
Predominantly they grow.
Speaker 3: will continue to be B2B. We still think on the travel industry, the expectation is they get to approximately 78% of 2019 numbers by the end of the year. So we are seeing signs of investment and encouraging signs, but we're not taking into our guidance.
We will continue to be B to B and we still think on the travel industry that staycation is they get to approximately 78% of 2019 numbers by the end of the year. So we are seeing signs of investment and encouraging signs, but we're not baking into our guidance.
Speaker 3: you know, travel coming back to the previous growth rates yet.
You know travel coming back.
The previous growth rates yet.
Speaker 4: That's fair enough. That's not fair. Yeah, I think I would add. Go ahead. Yep. I was just going to add. I think you'll see that building throughout the year, Tom, as you know, in the SAS, you know, model, the bookings that we'll have throughout the year will start to layer and then we'll start to see that impacting our revenue growth rates as we go throughout the year. So, you know, we should be exiting with growth rates that are in excess of the annual numbers that we provided in our guidance.
Fair enough that I think I would add.
Go ahead yeah.
Just going to add I think you'll see that building throughout the year. Tom is as you know in the SaaS.
Model the bookings that will have throughout the year, we will start to layer and then we'll start to see that impacting our revenue growth rates as we go throughout the year. So now we should be exiting with growth rates that are in excess of the annual numbers that we that we provided in our guidance.
Speaker 5: Wonderful. And, you know, pivoting that question, focusing a little bit more on the B2B success, and you're talking about making some nice investments on the sales force to drive some of those successes. Perhaps you got to dive in a little bit more on some of the subverticals because we've all heard challenges in supply chain and perhaps energy and chemicals have had some challenges, but listening to your conversation here seems pretty positive and optimistic relative to the challenges those industries face. So perhaps it's a longer term trend line of B2B e-commerce that's lifting that underneath it. But yeah, I'd love to hear some of the catalysts underpinning the decisions that your customers are making and, you know, is digital transformation really in fact sort of outweighing some of the challenges some of the industrials and cyclical industries have faced with supply chain issues? Yeah, no, that's a great question, Tom. I think, look, I think
Wonderful and pivoting that question, focusing a little bit more on the beta be success and you're talking about making some nice investments on the sales force to drive some of those successes.
Perhaps you can kind of dive in a little bit more on some of the sub verticals because we've all her challenges in supply chain, and perhaps energy and chemicals have had some challenges, but but listening to your comp conversation here seems pretty positive and optimistic relative to the challenges those industries face so perhaps as a longer term trend line.
<unk> of B to B e-commerce , that's lifting that underneath it but that but yeah I'd love to hear some of the catalysts underpinning the decisions that your customers are making and you know as digital transformation. It really in fact sort of outweighing some of the challenges some of the industrials and and in cyclical industries have faced with supply chain issues.
That's a great question.
I think look I think today in this market if you think about inflation.
Speaker 3: Today in this market, if you think about inflation...
Speaker 3: supply chain disruption, the ability to drive dynamic price changes quickly.
Fly chain disruption did daily piece to drive dynamic price changes quickly.
Speaker 3: are crucial or must have. I would say, look, we're historically a B2B company would change price maybe twice a year.
Our crucial are a must have.
Say look where historically <unk> company would change price maybe twice a year I mean in this day and age they can survive I mean their margins would be greatly impacted or they may not win this race.
Speaker 3: I mean, in this day and age, they can survive. I mean, their margins would be greatly impacted, or they may not win business.
Speaker 3: So I think the ability to be able to get to value quickly and be able to deploy technology like our Prose platform.
So I think the ability to be able to get the value quickly and be able to deploy technology like our <unk> platform.
Speaker 3: is crucial, and we've seen that demand across all.
It's crucial.
We're seeing that demand.
So pretty much all of our target industries, whether it be chemical distribution manufacturing medical they need for speed.
Speaker 3: pretty much our target B2B industries, whether it be chemical distribution, manufacturing, medical.
Speaker 3: The need for speed, and I did talk in my prepared remarks, I think the value that we generated, I talked about in my prepared remarks around the 6% revenue uplift that we measured in over a hundred of our customers.
And I did talk in my prepared remarks, I think the value that we generate.
Talked about in my prepared remarks around the 6% revenue uplift that we measured in over 100 of our customers I mean, they have that tangible ROI or leadership position, both in <unk> and in pricing.
Speaker 3: I mean, to have that tangible ROI or leadership position, both in CPQ and in pricing, I think there's been a lot of innovation that we've made to make our solutions drive faster time to value and to be able to measure the value of returns that we generate. I think we're in a very strong position to capitalize on this opportunity.
You know I think there's been a lot of innovation that we've made.
To make our solutions drive faster time to value and to be able to measure the value and returns that we generate I think we're in a in a very strong position to capitalize on.
This opportunity.
Speaker 5: Wonderful. One last really quick one if you don't mind. I noted in the prior press release you gave just about a month ago that Everymundo was expected to contribute maybe $14,000,000-$15,000,000 in ARR for the year that just passed. And if I think about the multiple that you kind of paid relative to that ARR, seemingly right around where your own stock is trading at, so perhaps that suggests they're growing somewhat similar. As you constructed the guidance for the ARR for next year, should we expect that Everymundo is contributing any more than the average growth rate, or kind of what we're seeing for the total projected ARR growth rate is loosely organic, if that makes sense?
Wonderful one last really quick one if you don't mind I noted in the prior press release, you gave just about a month ago that every Monday was expected to contribute maybe 14 $15 million and and AOR for the year that just passed and if I think about the multiple that you kind of paid relative to that a R. R seemingly right around where your own.
The stock is trading at so perhaps that suggests they're growing somewhat similar as you constructed the guidance for the ALR for next year should we expect that that every mundo is is contributing any more than the typical you know then the the avalere average growth rate or kind of what we're seeing for the total projected are our growth rate is is loosely you.
Organic if that makes sense.
Yes, so Tom the our growth rate for for every Mondo. When we acquired them was was a little north of 20%.
Speaker 4: Yeah, so, Tom, the ARR growth rate for every Mundo, when we acquired them, was a little north of 20 percent. And we're expecting them to, you know, kind of keep that same momentum as a part of PROSE as well. Very helpful. I'll jump back into you, Sam.
And we're expecting them to.
Kind of keep that same momentum.
As a part of pros as well.
Very helpful I'll jump back in queue. Thank you.
Thank you Tom.
Our next question comes from Scott Berg with Needham and company. Please proceed with your question.
Speaker 1: Our next question comes from Scott Berg with Needham and Company. Please proceed with your question.
Hi, Andreas and Stephen Thanks for taking my questions and congrats on finishing the year well.
Speaker 6: Hi Andreas and Stefan, thanks for taking my questions and congrats on finishing the year well!
Speaker 6: I guess I want to start off, Andreas, with one of your three pillars. You talked about leveraging partnerships more and really wanted to dive in on the Microsoft partnership. They've been a partner of yours for several years now, so it didn't surprise me as something completely new that you're going to expand that relationship with them. But what should we expect from this expanded relationship? It sounds like it's a little bit more focused on go-to-market maybe than what we've seen before, but I wanted to understand if that's correct or if there's another angle that we should be at.
I guess I wanted to start off Andreas with one of your three pillars you'd talked about leveraging partnerships more and really wanted to kind of dive in on the Microsoft partnership they've been a partner of yours for several years now. So it didn't surprise me is as you know something completely new that youre going to expand their relationship with them, but what should we expect from this expanded really.
Asian ship it sounds like it's a little bit more focused on go to market maybe than what we've seen before but wanted to understand if that's correct or if theres. Another angle that we should be looking at.
Yes, Scott as you've now look we've always said that Microsoft has been a very strong partner of pros in that and I think this next chapter of our partnership is really formalizing more go to market alignment.
Speaker 3: Yes, Scott. As you know, look, we've always said that Microsoft has been a very strong partner approach, and I think this next chapter of our partnership is really formalizing more go-to-market.
Speaker 3: I think there's been a lot of great innovation that we've driven jointly to the market, but now we both see the opportunity to really capitalize on the market opportunity by driving joint go-to-market alignment.
I think there's been a lot of great innovation that we've driven jointly to the market.
But now we both see the opportunity to really capitalize on the market opportunity by driving joint go to market alignment.
From a marketing from a sales and from me continuing to drive joining innovations in our platform.
Speaker 3: both from a marketing, from a sales, and from a continuing to drive joint innovations in our platform. So, I would tell you it's a formal alignment with goals around go-to-market results. And I would tell you we have commitment.
We would tell you said for more alignment.
With goals around go to market results.
And I would tell you that we have commitment top to top is to drive success.
Speaker 3: top to top to drive success on the partnership. And we're excited about being part of the manufacturing cloud launch as well. And I would tell you pretty much every opportunity we're working on, we're collaborating with Microsoft.
On the partnership and we're excited about being part of the manufacturing cloud launch as well and I would tell you pretty much every opportunity we're working on we're collaborating with Microsoft.
Got it very helpful. And then I wanted to ask a little bit more about your sales rep increases that were noted this year I think the number was 67% in last year going into the high 70.
Speaker 6: Got it very helpful. And then I wanted to ask a little bit more about your sales rep increases that were noted this year. I think the number was 67 to end last year going to the high 70s. My Minnesota math tells me that's a 15 to 20 percent growth rate depending on where you land.
Minnesota Math tells me that the 15% to 20% growth rate, depending on where you land.
That that sounds like a pretty aggressive number relative to where your.
Speaker 6: That sounds like a pretty aggressive number relative to where your AR growth rate is, but it's probably more about how you expect your industries to rebound in 23 versus 22. Is that the way we should think about kind of the growth rate of the company starting next year, getting back to that kind of upper teens to 20% level?
Our growth rate is but it's probably more about how you expect your industries to rebound in 'twenty three versus 22 is that the way we should think about kind of the growth rate of the company starting next year getting back to that kind of upper teens to 20% level.
Yeah, the way to look at it is we see continued rebound in if you think about a lot of the quota carrying personnel head count hires that will make this year, especially in the back half will be really for next year.
Speaker 3: Yeah, the way to look at it is we see continued rebound. And if you think about a lot of the quota care and personnel head count hires that will make this year, especially in the back half, will be really for next year.
Speaker 3: And we see the opportunities for growth both on the B2B side, but we also see travel starting to come back, especially for the back half of the year and contributing back, you know. So definitely that's our expectation.
And we see the opportunities for growth both on the <unk> side, but we also see travel.
Sorry to come back, especially for the back half of the year in contributing back.
So definitely that's that's our expectation.
Great. That's all I have the moment congrats again, thank you.
Thank you.
Our next question comes from Jackson Ader with Jpmorgan. Please proceed with your question.
Speaker 1: Our next question comes from Jackson Ater with JP Morgan. Please proceed with your question.
Great. Good evening guys. Thanks for taking my questions.
Speaker 6: Great. Good evening, guys. Thanks for taking our questions. Stephan, I just want to nail down kind of how...
Stephane I just one of them.
Kind of how.
Your feeling about the environment, maybe today versus when you gave us like a preliminary look into 'twenty two at that Investor event in November or is your stance at least on the travel business a little bit more conservative than it was then.
Speaker 3: your feeling about the environment maybe today versus when you gave us like a preliminary look into 22 at that investor event in November . Is your stance at least on the travel business a little bit more conservative than it was then?
Speaker 4: I don't know. I don't think it's more conservative.
Oh, no I don't think its more conservative.
We did go through a lot of changes from the from the Investor event to today, Oh Micron became a more serious threat than what we were really thinking but at the time, but you know they're spin.
Speaker 4: You know, we did go through a lot of changes from the from the investor event to today. I think Omicron became a more serious threat than what we were really thinking. But at the time, but, you know, there's been there's continuing good news even throughout that, you know, that that variant.
There's continuing good news even throughout that.
That variance.
Speaker 4: that the travel industry is starting to show more and more signs of recovering.
The travel industry is starting to show more and more signs of recovery.
Speaker 4: You know, just recently there's been some news around Australia opening up again, which is fairly significant. Some other areas in the Far East are looking to open up as well. And, you know, as you know, that's a big part of our business, our airlines and carriers that are in that part of the world. So seeing that happen is really good news for us, so it gives us some.
Just recently Theres been some news around Australia opening up again, which is fairly significant and some other areas in the far east are looking to open up as well and as you know that's a that's a big part of our business.
Airlines and carriers that are in that part of the world. So seeing that happen is really good news for us. So it gives us some some additional confidence that there's there's opportunities coming down the line for that so you know as Andreas commented earlier, we're not expecting traveled to come all the way back but.
Speaker 4: some additional confidence that there's, you know, there's opportunities, you know, coming down the line for that. So.
Speaker 4: You know, as Andres commented earlier, we're not expecting travel to come all the way back.
But we are expecting our travel business too.
Speaker 4: But we are expecting our travel business to contribute more so to our revenue results in 2022 than the travel business was able to do in 20 and 21.
To contribute more so too are our revenue results. In 2022, then the travel business was able to do it in 2020 one.
Gotcha, Okay, and then just a really quick follow up just on that point on on kind of travel coming back Andreas you mentioned throughout 'twenty 'twenty 'twenty into 'twenty one.
Speaker 7: Gotcha. Okay. And then just a really quick follow up just on that point on kind of travel coming back.
Speaker 7: Andre, you mentioned throughout 2020 and 2021, just needing to be a good partner, renegotiate some of the deals and the contracts with your travel customers.
Just needing to be.
Being a good partner to renegotiate some of the deals in the contracts with your travel customers.
Speaker 7: And I think part of that deal was also that you'd hopefully be able to capture.
And part of that deal was also that you hopefully be able to capture more of the upside in travel mileage recovery.
Speaker 7: more of the upside in travel mileage recovery. So I'm just curious to know...
So I'm just curious.
Speaker 7: I don't know what type of speed or mileage recovery is factored into this new outlook for 2020.
What type of steep or mileage recovery is factored into this new outlook for 'twenty two.
Speaker 3: Yeah, so right now we're not factoring huge recovery on the travel side from the renegotiated contracts. It would be too early for us to predict that based on the current environment, I would tell you. Right now, as I said, we're at 55, roughly 55% of 2019 numbers. And it'd be too premature to factor that in.
Yes, so right now.
We're not factoring a huge recovery on the travel side from they renegotiate a contract it would be too early for us to predict that based on the current environment I would tell you right now as I said, we're at 55% to 55% of 2019.
Numbers and it would be too premature.
To factor that in.
Yeah, I think timna.
Speaker 4: Yeah, I think to complement what Andres is saying, a lot of what we're seeing in terms of
There's a couple that would address this thing.
A lot of what we're seeing in terms of of.
There are opportunities on the travel side are our new opportunities.
Speaker 4: opportunities on the travel side are new opportunities. You know, not exactly recovery of some of the concessions that were provided in 2020. It's really more around the new opportunities. Okay. All right.
You know not not not exactly recovery of some of the some of the concessions that were provided in 2020, it's really more around the new opportunities.
Okay, Alright that makes sense. Thank you.
Thank you.
Our next question comes from and your Chachi with Northland Capital markets. Please proceed with your question.
Speaker 1: Our next question comes from Nihal Chokshi with Northland Capital Markets.
Speaker 7: Yeah, thank you. You may have already covered this, but can you give us the breakdown between B2B and travel for calendar 21 on a revenue and billing basis?
Yeah. Thank you you may have already covered this but can you give us a break down between b to b and travel for calendar 'twenty, one on a revenue and billings basis.
Yeah.
So they all yes, we have historically not provided that.
Speaker 4: So now, yeah, we have historically not provided that split.
That split.
Speaker 4: Mainly because there are a number of factors that go into it. You may recall when we had our investor day at Outperform, you know, we had United as one of our customers on the panel. And, you know, as you might think of United as a travel industry, you probably heard when they were talking, it's a B2B solution that they have purchased and they're putting into play. And so for all those reasons, we really haven't broken it out. But what we can tell you.
Mainly because there are a number of factors that go into it you may recall, when we had our investor day.
And outperform.
We had United as one of our one of our customers on the panel and you might think of United is a travel industry, you've probably heard when they were talking it's a beta be solution that they have purchased and they are putting into play and so for all those reasons, we really haven't haven't broken it out but what we can tell you is.
Speaker 4: is that our travel business has actually been a drag on the growth rate for ARR.
That.
Our travel our travel business has.
Has actually been a drag on the growth rate for for R.
Our our FERC for all the reasons that we're talking about with Jackson earlier.
Speaker 4: for all the reasons that we were talking about with Jackson earlier. So we're thinking that is going to change in 2022, and that travel will actually be a part of the growth. And a lot of that's gonna be stemming from some new opportunities that we're seeing.
So we're thinking that is going to change in 2022 and that travel will actually be a part of the growth and.
Lot of that is gonna be stemming from some new opportunities that we're seeing.
Speaker 4: on things like our retail optimizer and our
On things like our R. R.
Our retail reach.
Retail optimizer and our.
Yeah, I'm, drawing a blank now there's protamine digital retail and digital retail and dynamic I'll say we.
Speaker 4: Yeah, I'm drawing a blank now. The other product. Digital retail. Digital retail and dynamic offers, thank you. We see some opportunities on those product lines as well as well as some of our RM solutions.
We feel some opportunities on those product lines as well as well as some of our RF solutions.
Speaker 8: Okay, great. Thanks. Another question is that...
Okay. Great. Thanks. Another question is that so the 16% of our our growth isn't as is I E that includes every Monday with acquisition.
Speaker 8: So the 16% subscription ARR growth is an as-is, i.e. that includes every month of acquisition. You just said that the 15 million ARR in calendar 21 going 20%. So if I exclude that, I think you're talking about 7% organic subscription ARR growth. And I believe at the outperform event, you were talking about a mid-team subscription ARR growth for calendar 22, which was prior to the every month of acquisition.
So that the 59, a R R and counter 'twenty, one growing 20%. So if I exclude that I think you're talking about 7% organic subscription are our growth and I believe at the outperformance that you were talking about a mid teen subscription of Ara growth for calendar 'twenty, two which was prior to.
Every Monday with acquisition. So a is that correct and b. If so what has changed to change out perspective.
Speaker 8: So, A, is that correct, and B, if so, what has changed then to change that?
Yeah, No I think that's a good question I'm glad you asked that question because.
Speaker 4: Yeah, no, I think that's a good question. I'm glad you asked that question because
Speaker 4: Nothing has changed from what we were saying back in, at Outperform. Our ARR metrics, both on the subscription side and on the total side.
Nothing has changed from what we were saying back in at outperform.
Our our metrics both on the subscription side and on the total side or are consistent with one another in other words the base that we're talking about off of 2021 includes every mundo as well as the base that we enter 2022 with includes every mondo. So you can actually think about the growth rate for both subscription and total.
Speaker 4: are are consistent with one another. In other words, the base that we're talking about off of
Speaker 4: 2021 includes every Mundo as well as the base that we end on 2022 with includes every Mundo. So you can actually think about the growth rate for both subscription and total being more or less organic.
Being more or less organic.
I got it so when when you were at outperform talking about you're a or are you already factoring in the every Monday acquisition that was basically almost.
Speaker 4: I got it. So, when you were at Alperform talking about your ARR, you were already factoring in the Everymundo acquisition that was basically almost closed. No, no, no. The Everymundo acquisition is included in the 2021 number for ARR as much as it's included in the, you know, ARR metric for 2022. So, basically, we're not getting a benefit of adding in an Everymundo business into our base number.
No no no.
Every Mundo acquisition is included in the 2021 number for a R. R. As much as it is included in the <unk>.
M a R or metric for 2022, so basically we're not getting a benefit of adding in and every Monday business into our base number.
Speaker 8: That makes sense. Okay. Yep. I believe I understand. Okay.
That makes okay Yep I believe I understand okay. Thank you.
Thank you.
Our next question comes from Chad Bennett with Craig Hallum. Please proceed with your question.
Speaker 1: Our next question comes from Chad Bennett with Craig Hallam.
Speaker 7: Great, thanks for taking my questions. So just maybe one for Stephan first, just as we look at gross margin, specifically subscription gross margin, you know you saw a steady uptick throughout the year, this year. How should we think about that heading into 22 and the ability to show some more leverage there?
Great. Thanks for taking my questions. So just maybe one for Stefan first just as we look at gross margins specifically subscription gross margin.
Yeah, you saw steady uptick throughout the year. This year, how should we think about that heading into 'twenty, two and the ability to show some more leverage there.
Speaker 4: Yeah, so Chad, I think there's going to be continued leverage in that in that metric as we go forward. Maybe not as much as we saw in in 2021. But I do expect us to continue to see, you know, growth in that number. And certainly from an annual perspective, I think you'll see a much better, much better metric on that line than what we saw in 2021.
Yeah, So Chad I think theres going to be continued leverage in that in that metric as we go forward maybe not as much as we saw in 2021, but I do expect us to continue to see growth in that number and certainly from an annual perspective, I think youll see a much.
A much better metric on that line than what we saw in 2021.
And then I would add to your spending.
Speaker 3: One thing I will add on that, there's been a lot of innovation that we've done around our platform to drive efficiencies and ease of adoption, and you're seeing those benefits show up on the gross margin.
One thing I will add on that you spent a lot of innovation that we've done around our platform to drive efficiency and ease of adoption and you're seeing those benefits show up on the gross margin.
Got it. Thank you and then you know I I assume you know based on yeah. Our growth expected to be ahead of head of subscription growth, which is what we want to see.
Speaker 7: Got it, thank you. And then, you know, I assume, you know, based on ARR growth, expected to be ahead of subscription growth, which is what we want to see. Stephan, and I know you don't guide to the billings or RPO, but should we expect that, you know, billings and RPO growth?
Stephan and I know you don't guide to billings or RPM, but should we expect that you know billings in our P O growth.
Speaker 7: you know, accelerates ahead of, you know, subscription growth, you know, throughout the year and kind of normal seasonality for all those metrics. Obviously, last year was a little bit odd, but just kind of normal seasonality to bookings throughout the year.
Accelerates ahead of.
Subscription growth.
Throughout the year and independent normal seasonality for all those metrics, obviously last year was a little bit a little bit odd, but just kind of normal seasonality to bookings throughout the year.
Speaker 4: Uh, yeah, it should be um less volatile than what we saw in in 2021 to your point Um, I think I think as you think about calculated billing for next year, you know, you're probably looking at a very similar Uh growth rate call it mid-teens is what you're seeing on subscription arr so you can think of it along those lines Um, and I think to your point it will be it'll be a number that grows as we progress through the
Yeah, it should be less volatile than what we saw in in 2020 one to your point.
Think I.
As you think about calculated billings for next year, you're probably looking at a very similar.
Growth rate call. It mid teens is what youre seeing on subscription. There are so you can think of it along those lines and I think to your point it will be it'll be a number that grows as we progressed through the year.
Speaker 7: Okay, got it. And then, Andre, just real quick on the B2B business, obviously the growth there was masked by the travel business last year. But how do you think about the growth rate?
Okay got it.
And then Andreas just real quick on the <unk> business.
Obviously the growth there was masked.
But by the travel business last year.
But how do you think about the growth rate.
For that business this year and and you know should we think about continued acceleration in that growth rate of that business. This year, and then I'll hop off thanks.
Speaker 7: for that business this year and, you know, should we think about continued acceleration in that growth rate of that business this year? And then I'll hop off, thanks.
Yeah, No that's a great question Chad.
Speaker 3: Yeah, no, that's a great question, Chad. Based on the AR guide that we're providing, it implies that we're expecting that business to continue to accelerate from a growth rate. And I would tell you that based on
Based on that they are a guide that we're providing it implies that we're expecting that business to continue to accelerate from a growth rate and I would tell you that based on.
On what we're seeing we feel very very good about that.
Speaker 3: on what we're seeing, we feel very, very good about that. I would say last year, one of the things I'd like to comment on is that we did see a lot of net new logo wins, you know, 33% growth on net new logo wins.
I would say last year, one of the things I like to comment on is that we did see a lot of net new logo wins.
At 33%.
Growth on net new logo wins in 70% of our bookings being net new.
Speaker 3: in 70% of our bookings being net new, which is good to see. That's what inspires our confidence as we look at this year.
Which is good to see that's what inspires our confidence as we look at this year.
That's great color. Thank you much.
Yeah.
Our next question comes from Jason Celaeno with Keybanc capital markets. Please proceed with your question.
Speaker 1: Our next question comes from Jason Salino with KeyBank Capital Markets.
Speaker 8: Hi, this is actually Devin on for Jason today. Thanks for taking our questions. Maybe just the first one I have is on Every Mundo. Seems like a really good addition to PROSE. And as I was doing some research, looking at the websites, seems like they have a really strong foothold within airlines, you know, including two of the big three in the U.S. So just wondering, you know, what are, you know, PROSE plans moving forward, kind of to leverage this robust airlines customer base that they have?
Hi, This is actually Devin on for Jason today. Thanks for taking my questions. Maybe just first one I have is on every window.
It seems like a really good addition to pros and as I was doing some research looking at the websites.
A strong foothold within airlines, including two of the big three in the U S. I'm. Just wondering you know what our plans are moving forward to leverage this robust airlines customer base that they have.
Yeah, Kevin Great question, we're very excited about every mondo and there is off our marketing platform for two reasons. Since you mentioned one they have an incredible customer list, we have only 40% overlap.
Speaker 3: Yeah, Devin. Great question. We're very excited about Everymundo and their digital offer marketing platform.
Speaker 3: For two reasons, as you mentioned, one, they have an incredible customer list. We have only 40 percent overlap. But more importantly, the access to shopping data. We always talked about optimizing every shopping and selling motion and having access to shopping data and helping.
But more importantly, the access to shopping data and we always talked about optimizing every shopping and selling motion and having access to shopping data and helping our brand market offers and drive demand to their digital channels is very strict T. We also have done quite a bit of work on.
Speaker 3: brands market offers and drive demand to their digital channels is very strategic.
Speaker 3: We also have done quite a bit of work on on our data science team around leveraging shopping data. And we've seen that shopping data can improve demand forecast by 20 to 40 percent.
Our data science team around leveraging shopping data and we've seen that shopping data can improve on demand forecast by 20% to 40%.
Speaker 3: So we see opportunities in the data they have helping improve, you know, our demand forecasting capabilities. We also see opportunities beyond the travel industry.
So we see opportunities in the data they have helping improve.
Our demand forecasting capabilities, we also see opportunities beyond the travel industry.
Speaker 3: and giving B2B companies the opportunity to start driving digital offer marketing.
And given <unk> companies the opportunity to start driving digital offer marketing.
Speaker 3: for their solutions to drive demand to their digital channels, both on a B2B and a B2B2C model. So, pretty excited about the acquisition, an incredible team, and looking forward to continuing to co-innovate with them.
For their solutions to drive demand to their digital channels, both on a b to B and <unk> C model, so pretty excited about.
The acquisition of an incredible team and looking forward to continuing to co innovate with them.
Great Yeah, that's definitely exciting and then just maybe one quick one I know United Airlines definitely good reference when furby it'll be just curious how that pipeline might be shaping up for air travel customers, particularly that are also looking to implement sort of same similar b to b offerings.
Speaker 9: Great. Yeah, that's definitely exciting. And then just maybe one quick one. I know United Airlines, definitely a good reference win for B2B. Just curious how that pipeline might be shaping up for your travel customers particularly that are also looking to implement sort of same similar B2B offerings.
I would tell you that.
Speaker 3: I would tell you that we see good opportunities in that front. We continue to see them. And we feel pretty good about it just moving forward.
We see good opportunities in that front we.
We continue to see them.
And we feel.
Pretty good about that just moving forward.
Great. Thanks for the color.
Yes.
Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back to Belinda over to put for closing remarks.
Speaker 1: Ladies and gentlemen, we have reached the end of the question and answer session, and I would like to turn the call back to Belinda Overdiput for closing the session.
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 Morgan Stanley Technology Media and Telecom conference on March 8th if you have any questions. Following today's call. Please contact us at IR.
Speaker 2: 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 Morgan Stanley Technology, Media, and Telecom Conference on March 8th. If you have any questions following today's call, please contact us at iratpros.com. Thank you and goodbye.
<unk> <unk> dot com, Thank you and goodbye.
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Yeah.
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