PROS Holdings Inc. (PRO)
Q1 2010 Earnings Call
May 5, 2010 04:30 pm ET
Charlie Murphy - EVP and CFO
Bert Winemiller - Chairman & CEO
Yogesh Amle - JPMorgan
Nandan Amladi - Deutsche Bank
Ian Kell - Northland Securities
Nabil Elsheshai - Pacific Crest Securities
Ross MacMillan - Jeffries
Previous Statements by PRO
» PROS Holdings Inc. Q2 2009 Earnings Call Transcript
» PROS Holdings Inc. F1Q09 Earnings Call Transcript
» PROS Holdings Inc. Q4 2008 Earnings Call Transcript
Good day, ladies and gentlemen and welcome to the Q1 2010 PROS Holdings, Inc. earnings conference call. My name is [Kiana] and I will be your operator for today. At this time, all participants are in a listen-only mode. (Operator instructions) As a reminder, this conference is being recorded for replay purposes.
I would now like to turn the conference over to your host for today Mr. Charlie Murphy, Executive Vice President and CFO. Your may proceed.
Thank you, operator. Good afternoon everyone and thank you for joining us today for the PROS Holdings, financial results conference call for the first quarter of 2010. Joining me on today’s call is Bert Winemiller, PROS Chairman and Chief Executive Officer. In today’s conference call, Bert will provide a commentary on the highlights for the first quarter of 2010 and then I will provide a review of the financial results and our outlook before we open up the call to questions.
Before beginning, we must caution you that today’s remarks in this discussion, including statements made during the question-and-answer session contain forward-looking statements. These statements are subject to numerous and important factors, risks and uncertainties, which could cause actual results to differ from the results implied by these or other forward-looking statements.
Also these statements are based solely on the present information and are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Please refer to our Form 10-Q, Form 10-K and other filings with the SEC in the risk factors contained herein. Also, please note that a replay of today’s webcast will be available in the Investor Relations section of our website at www.prospricing.com.
I would also like to point out that the company’s use of non-GAAP financial measures is explained in today’s earnings press release, and a full reconciliation between each non-GAAP measure, and the most directly comparable GAAP measure is provided in the tables accompanying the press release, distributed earlier today, and can also be find on our website in the Investor Relations section.
With that, I’d like to turn the call over to Bert.
Thank you, Charlie, and thanks to those of you listening to our call. With the challenging 2009 behind us, we have made great progress on our strategic initiatives that will position us to serve the large long term market opportunity for our high return on investment, pricing optimization software products. We are pleased with our financial performance in the first quarter of 2010, especially while we continue to invest in our product in sales and marketing initiatives.
For the first quarter, we are reporting revenue of $17.3 million, which was at the high end of our guidance and was an increase over the fourth quarter. Non-GAAP operating income was $2.2 million for the first quarter, which was also at the top end of our guidance. I'm also very pleased to report that our backlog is up over the end of 2009.
PROS is a global company with revenue diversified across geographies and our target industry sectors. Revenue that came from outside the US represented 56% of the first quarter 2010 revenue and 62% of first quarter license and implementation revenue came from our target industry sectors of manufacturing, distribution and services.
We continue to provide our customers with a high return on investment, which is in turn healthiness to attract new customers. We also had much success with our fast time to value program; where we host all of our pricing solutions meet customers and the initial phase of an implementation. This allows our customers to identify millions of dollars of pricing profit opportunities in the first 30 days. Our continuing focus on customer satisfaction and implementation success resulted in PROS been selected as the 2010 strategic partner vendor of the year by a large distributor of office products.
Case steadies like this have helped us demonstrate the return on investment potential for new prospects. For example, one of the largest chemical companies based in the United States, has executed a contract for the deployment of the PROS Scientific Analytics with segmentation. This is another significant competitive win in the chemicals industry. Many companies that understand the high return on investment that our software provides are under pressure on this tough economy to get funding for the pricing projects.
Some prospects are using proof of value engagement for by concrete ROI for business users to obtain budget authorization for a full production system purchase. A leading industrial distributor PROS to go ahead for full implementation on scientific analytics pricing optimizer and deal optimizer, with segmentation and pricing guidance capabilities after a successful proof of value engagement.
A Fortune 500 distributor of healthcare products and services also signed to move forward on the full insulation of scientific analytics and price optimizer for its medical division after their successful proof of value engagement. This is another great customer win in the healthcare distribution space. Those provide to optimize pricing guidance to the customers for proprietary sales coding system a displays slower target and stretch optimize prices using pro science. Sales management utilizes pro scientific analytics to drive value realization and create peer pricing reports to ensure adoption among the field sales organization.