Executive Summary

PROS delivered a solid Q3: total revenue $91.7M (+11% YoY) and subscription revenue $76.0M (+13% YoY), with non-GAAP gross margin up ~270 bps to 70.8% and non-GAAP EPS $0.22 .
Results modestly exceeded S&P Global consensus: revenue $91.7M vs $91.1M*, and non-GAAP EPS $0.22 vs $0.16*; internal guidance was also exceeded, with Adjusted EBITDA $15.0M vs $11–$12M guided .
Strategic overhang dominates the stock narrative: PROS agreed to be acquired by Thoma Bravo for $23.25/share (~$1.4B EV); management suspended guidance and did not host a Q3 call while the deal proceeds .
Business highlights: expanded logo wins/expansions (e.g., Adobe, American Airlines, Kraft Heinz) and third‑party recognition (G2 leader; Stevie Award) reinforce product momentum into the pending split of travel (standalone) and B2B (to combine with Conga) post‑close .

What Went Well and What Went Wrong

What Went Well

Double-digit top-line growth with improving profitability: total revenue +11% YoY to $91.7M and non‑GAAP gross margin up to 70.8%; non‑GAAP operating income rose to $14.1M and Adjusted EBITDA to $15.0M .
Non‑GAAP EPS beat and guidance outperformance: $0.22 non‑GAAP EPS vs $0.16* consensus, and Adjusted EBITDA $15.0M vs $11–$12M guided, driven by margin expansion and operating leverage .
Commercial traction and accolades: new and expanded customer relationships (Adobe, American Airlines, Kraft Heinz, Turkish Airlines), G2 leadership and a Gold Stevie award citing PROS AI Agents underscore market momentum and product innovation .

Management quotes (Q2 call, reflecting ongoing themes):

“We delivered a strong second quarter, exceeding the high end of our guidance ranges across all metrics... well positioned to capture long-term value and lead in this next era of AI-powered enterprise transformation.” — CEO Jeff Cotten .
“Our non-GAAP subscription gross margin was 80%... overall non-GAAP gross margin was 69% in the second quarter” — CFO Stefan Schulz .

What Went Wrong

No Q3 earnings call and suspension of guidance due to the Thoma Bravo transaction, limiting forward visibility and investor engagement .
GAAP profitability remains negative despite improving non‑GAAP metrics: GAAP net loss was $(4.2)M (−$0.09/share) in Q3, impacted by stock‑based comp and transaction costs tied to the pending deal .
Services remains a drag relative to subscription growth; management continues to lean on partners and product deployment simplification to shift mix towards higher‑margin subscription .

Financial Results

Headline metrics vs prior quarters (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Total Revenue ($M)	$86.3	$88.7	$91.7
Subscription Revenue ($M)	$70.8	$73.3	$76.0
Non‑GAAP EPS ($)	$0.13	$0.13	$0.22
Adjusted EBITDA ($M)	$8.7	$7.4	$15.0
Non‑GAAP Gross Margin (%)	70%	69%	70.8%
Non‑GAAP Subscription Gross Margin (%)	81%	80%	81.0%

Notes: Q3 YoY revenue growth +11%; subscription +13% .

Revenue mix (by type; oldest → newest)

Revenue Type ($M)	Q3 2024	Q2 2025	Q3 2025
Subscription	$67.1	$73.3	$76.0
Maintenance & Support	$3.4	$2.6	$2.1
Services	$12.3	$12.8	$13.6
Total Revenue	$82.7	$88.7	$91.7

Cash and profitability KPIs (oldest → newest)

KPI	Q1 2025	Q2 2025	Q3 2025
Free Cash Flow ($M)	$1.1	$3.2	$11.5
Net Cash from Operations ($M)	—	$3.2	$11.4
GAAP Net Income ($M)	—	$(1.8)	$(4.2)

Guidance Changes

In light of the pending Thoma Bravo acquisition, PROS suspended guidance in Q3 and did not hold an earnings call .

Metric	Period	Previous Guidance (7/31/25)	Current (10/27/25)	Change
Total Revenue	Q3 2025	$90.5–$91.5M	Guidance suspended	Withdrawn
Subscription Revenue	Q3 2025	$74.8–$75.3M	Guidance suspended	Withdrawn
Non‑GAAP EPS	Q3 2025	$0.15–$0.17	Guidance suspended	Withdrawn
Adjusted EBITDA	Q3 2025	$11–$12M	Guidance suspended	Withdrawn
Subscription ARR	FY 2025	$310–$313M	Guidance suspended	Withdrawn
Total Revenue	FY 2025	$360–$362M	Guidance suspended	Withdrawn
Free Cash Flow	FY 2025	$40–$44M	Guidance suspended	Withdrawn
Adjusted EBITDA	FY 2025	$42–$44M	Guidance suspended	Withdrawn

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025)	Previous Mentions (Q2 2025)	Current Period (Q3 2025)	Trend
AI/technology initiatives	Highlighted advancing autonomous/agentic AI; previewed AI Agents and use cases (sales/rebates)	Launched 12 AI Agents; focus on adoption over monetization; early pilots across B2B and travel	Recognition (Gold Stevie) citing AI Agents; product momentum continues	Positive, building credibility and adoption
Go‑to‑market execution	Improved sales cycle times, linearity; focus on marketing/demand gen	Tightening top‑of‑funnel rigor; partner‑led distribution; Commerce (BigCommerce) tie‑up	No Q3 call; continued customer wins and platform recognition	Positive, but less disclosed due to no call
Travel/airlines	Travel demand improved; wins at two top U.S. carriers	Strong momentum; best‑of‑breed offer management focus; long sales cycles acknowledged	Thoma Bravo plans travel business as standalone growth platform post‑close	Strategic focus increasing
Macro/tariffs	Volatility seen as demand driver for PROS solutions	Macro challenging; some non‑U.S. delays; volatility also a demand catalyst	No incremental macro color (no call)	Mixed but manageable
Services mix and partners	Emphasis on faster time‑to‑value and efficiency	Expect services growth to lag; partner ecosystem to take more implementation work	No update (no call)	Mix shift toward subscription continues

Management Commentary

“We delivered a strong second quarter, exceeding the high end of our guidance ranges across all metrics... well positioned to capture long-term value and lead in this next era of AI-powered enterprise transformation.” — Jeff Cotten, CEO .
“Our non-GAAP subscription gross margin was 80%... overall non-GAAP gross margin was 69% in the second quarter” — Stefan Schulz, CFO .
Q3 press release business highlights include new/expanded customers (Bleckmann, ELKO Grupa, Adobe, American Airlines, AutoZone, Turkish Airlines) and awards (G2 Pricing Software leader; Gold Stevie Award for AI innovation) .
Strategic plan post‑transaction: run travel as a standalone platform investment; combine PROS’ B2B business with Thoma Bravo portfolio company Conga to create a broader revenue lifecycle platform .

Q&A Highlights (from Q2 call; no Q3 call held)

Top‑of‑funnel rigor and partner distribution: CEO outlined aligning marketing and sales by sub‑segments, building a “conveyor belt” demand framework, and targeting reseller evolution with Commerce; early co‑sell/refs underway .
Travel/airlines opportunity: Best‑of‑breed offer management at the core of airlines’ next‑gen stacks; healthy demand despite long cycles .
Macro dynamics: Challenging environment with some international project pauses; volatility/tariffs also drive demand for PROS’ solutions .
Services vs subscription: Expect services growth to moderate as partners take on more work; prioritizing subscription mix and easier deployments .
Profitability investment: Efficiency gains redeployed to sales/marketing to drive growth; maintaining discipline while investing in GTM .

Estimates Context

Metric	Q3 2025 Actual	S&P Global Consensus	Surprise
Revenue ($M)	$91.7	$91.1*	+$0.6M (~+0.7%)
Non‑GAAP EPS ($)	$0.22	$0.16*	+$0.06 (~+35%)

Company also exceeded its internal Q3 Adjusted EBITDA guidance with $15.0M actual vs $11–$12M guided .
Note: S&P’s “EBITDA Consensus Mean” (11.6M*) reflects a standardized definition that may not be comparable to PROS’ reported Adjusted EBITDA ($15.0M) .

Values marked with * are retrieved from S&P Global (consensus estimates).

Key Takeaways for Investors

Q3 execution was clean with small revenue beat and a sizable EPS beat; operating leverage accelerated with non‑GAAP margin expansion and Adjusted EBITDA more than doubling sequentially .
The take‑private at $23.25/share reshapes the risk‑reward; the primary near‑term catalyst is deal approval/closing (targeted Q4’25) .
Post‑close strategic plan (travel standalone; B2B with Conga) could unlock focused growth vectors and cross‑sell potential across revenue lifecycle management .
Demand signals remain favorable: AI‑led product momentum, enterprise/logo wins, and industry recognition support medium‑term adoption despite macro choppiness .
Mix shift and partner strategy should continue to bias the model toward higher‑margin subscription revenue and faster deployments over time .
With guidance suspended and no Q3 call, visibility hinges on deal milestones; absent surprises, fundamental performance appears on track relative to pre‑deal Q3 guidance and consensus .
Watch for regulatory/shareholder approvals and any updates on the Conga combination and travel platform strategy that could influence long‑term positioning .

Appendix: Additional Press Releases and Transaction Context

PROS Smart Price Optimization & Management listed on SAP Store (integration with SAP S/4HANA/BTP) — expands ecosystem reach .
Thoma Bravo acquisition details: $23.25/share cash; ~41.7% premium to last close and 53.2% to 30‑day VWAP as of 9/19/25; expected close in Q4’25, subject to customary approvals .
Post‑close plans: Travel as standalone platform investment; PROS B2B to combine with Conga to deliver an integrated, AI‑powered revenue lifecycle platform .

PROS Holdings, Inc. (PRO)·Q3 2025 Earnings Summary