PROS Swings to Loss Amidst Thoma Bravo Acquisition Costs

TL;DR

**PROS is bleeding cash on merger costs, but the Thoma Bravo deal is still on track to take them private, so don't expect a turnaround on the public market.**

AI Summary

PROS Holdings, Inc. reported a net loss of $4.247 million for the three months ended September 30, 2025, a significant decline from a net income of $0.235 million in the same period of 2024. For the nine months ended September 30, 2025, the net loss was $9.692 million, an improvement from a $18.508 million net loss in the prior year. Total revenue increased to $91.676 million for the three months ended September 30, 2025, up from $82.702 million in 2024, driven by a 13.3% increase in subscription revenue to $76.006 million. Operating expenses rose, with general and administrative expenses increasing to $20.501 million from $13.218 million, partly due to $2.3 million in transaction costs related to the pending merger with Thoma Bravo. The company's cash and cash equivalents increased to $188.404 million as of September 30, 2025, from $161.983 million at December 31, 2024. Convertible debt, net, increased to $311.905 million from $270.797 million, reflecting new debt issuance and associated costs. The company is set to be acquired by Thoma Bravo, with the merger expected to close in Q4 2025, which will take PROS private.

Why It Matters

This filing is critical for investors as it details the financial performance of PROS Holdings, Inc. just before its anticipated acquisition by Thoma Bravo, expected in Q4 2025. The reported net loss of $4.247 million for the quarter, despite revenue growth, highlights the impact of merger-related transaction costs on profitability. For employees, the acquisition by a private equity firm like Thoma Bravo often signals potential operational changes, though the company states it will remain headquartered in Houston. Customers may see continued investment in AI-powered solutions, but the shift to private ownership could alter long-term strategic focus. The delisting from the NYSE will remove a publicly traded AI and pricing optimization competitor, impacting the broader market's competitive landscape.

Risk Assessment

Risk Level: medium — The risk level is medium due to the pending merger with Thoma Bravo, which introduces execution risk, regulatory approval risk, and shareholder approval risk, as noted in the 'Proposed Merger' section. While the merger is expected to close in Q4 2025, any unforeseen delays or complications could impact the company's financial stability. Additionally, the company reported a net loss of $4.247 million for the three months ended September 30, 2025, and an accumulated deficit of $677.419 million, indicating ongoing profitability challenges despite revenue growth.

Analyst Insight

Investors should consider selling PROS Holdings, Inc. shares if they haven't already, given the impending delisting from the New York Stock Exchange upon the Thoma Bravo acquisition. The focus should shift to understanding the terms of the merger and ensuring a smooth exit from the position, as the company's public trading life is nearing its end.

Financial Highlights

debt To Equity

N/A

revenue

$91,676,000

operating Margin

N/A

total Assets

$444,929,000

total Debt

$339,570,000

net Income

-$4,247,000

eps

N/A

gross Margin

N/A

cash Position

$188,404,000

revenue Growth

+10.8%

Revenue Breakdown

Key Numbers

• $91.676M — Total Revenue (Q3 2025) (Increased from $82.702M in Q3 2024, showing 10.8% growth.)
• $76.006M — Subscription Revenue (Q3 2025) (Increased from $67.068M in Q3 2024, a 13.3% increase.)
• $(4.247M) — Net Loss (Q3 2025) (Swung from a net income of $0.235M in Q3 2024.)
• $(9.692M) — Net Loss (YTD Q3 2025) (Improved from a net loss of $18.508M in YTD Q3 2024.)
• $2.3M — Merger Transaction Costs (YTD Q3 2025) (Incurred for legal, accounting, and advisory fees related to the Thoma Bravo merger.)
• $188.404M — Cash and Cash Equivalents (Sept 30, 2025) (Increased from $161.983M at December 31, 2024.)
• $311.905M — Convertible Debt, net (Sept 30, 2025) (Increased from $270.797M at December 31, 2024, due to new issuance.)
• 48,297,780 — Common Shares Outstanding (Oct 20, 2025) (Reflects the total shares before the anticipated merger.)
• $677.419M — Accumulated Deficit (Sept 30, 2025) (Increased from $667.727M at December 31, 2024, indicating continued losses.)
• Q4 2025 — Expected Merger Close (The anticipated quarter for the acquisition by Thoma Bravo to finalize.)

Key Players & Entities

• PROS Holdings, Inc. (company) — registrant
• Thoma Bravo, L.P. (company) — acquiring private equity firm
• Portofino Parent, LLC (company) — Parent company in merger
• Portofino Merger Sub, Inc. (company) — Merger subsidiary
• New York Stock Exchange (regulator) — exchange where PROS common stock is listed
• SEC (regulator) — Securities and Exchange Commission
• $2.3 million (dollar_amount) — transaction costs incurred for the merger
• $4.247 million (dollar_amount) — net loss for the three months ended September 30, 2025
• $91.676 million (dollar_amount) — total revenue for the three months ended September 30, 2025
• $76.006 million (dollar_amount) — subscription revenue for the three months ended September 30, 2025

FAQ

Risk Factors

• Merger Uncertainty and Transaction Costs [high — financial]: The pending acquisition by Thoma Bravo introduces risks related to deal completion, potential disruptions to business operations, and significant transaction costs. The company incurred $2.3 million in merger-related transaction costs during the nine months ended September 30, 2025, impacting profitability.
• Increasing Operating Expenses [medium — financial]: General and administrative expenses increased to $20.501 million in Q3 2025 from $13.218 million in Q3 2024, partly due to merger costs. This rise in operating expenses, coupled with a net loss in the quarter, indicates pressure on profitability.
• Net Loss and Accumulated Deficit [medium — financial]: PROS reported a net loss of $4.247 million for Q3 2025, a reversal from a net income of $0.235 million in Q3 2024. The accumulated deficit stands at $677.419 million as of September 30, 2025, highlighting a history of losses.
• Competition in Cloud-Based Software [medium — market]: The company operates in a highly competitive market for cloud-based pricing and sales software. Intense competition could impact market share, pricing power, and revenue growth.
• Convertible Debt Obligations [medium — financial]: Convertible debt, net, increased to $311.905 million as of September 30, 2025. Managing this debt, especially in the context of ongoing losses and the transition to a private company, presents financial risk.

Industry Context

PROS Holdings operates in the competitive Software-as-a-Service (SaaS) market, specifically focusing on cloud-based pricing and sales solutions. The industry is characterized by rapid technological advancements, increasing demand for AI-driven analytics, and a trend towards consolidation as larger players acquire innovative companies. Companies in this space often face challenges in customer acquisition costs and retaining subscribers amidst fierce competition.

Regulatory Implications

As a publicly traded company nearing acquisition, PROS faces scrutiny regarding its financial reporting and compliance with SEC regulations. Post-acquisition, as a private entity, regulatory oversight will shift, but ongoing compliance with data privacy laws (e.g., GDPR, CCPA) and cybersecurity standards remains critical for its cloud-based offerings.

What Investors Should Do

1. Monitor merger progress and closing conditions.
2. Analyze the impact of merger costs on profitability.
3. Evaluate subscription revenue growth sustainability.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported net loss of $4.247M on revenue of $91.676M, with significant increase in G&A expenses due to merger costs.
• 2025-12-31: Anticipated Merger Close (Q4 2025) — PROS Holdings, Inc. is expected to be acquired by Thoma Bravo and taken private, marking a significant transition for the company.

Glossary

Accumulated deficit

The total net losses of a company since its inception that have not been offset by net income. (Indicates PROS has historically incurred more expenses than revenues, standing at $677.419 million as of September 30, 2025.)

Convertible debt, net

Debt that can be converted into a predetermined amount of equity in the issuing company. (Represents a significant liability for PROS, increasing to $311.905 million, with potential dilution if converted.)

Subscription revenue

Revenue generated from recurring fees for access to software or services over a specified period. (The primary revenue driver for PROS, showing strong growth of 13.3% to $76.006 million in Q3 2025.)

General and administrative expenses

Costs associated with the overall management and operation of a business, not directly tied to production or sales. (These expenses rose significantly to $20.501 million in Q3 2025, partly due to $2.3 million in merger transaction costs.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, PROS Holdings, Inc. experienced a significant shift from net income to a net loss, reporting a loss of $4.247 million versus a $0.235 million profit. Total revenue, however, saw healthy growth of 10.8% to $91.676 million, primarily fueled by a 13.3% increase in subscription revenue. Operating expenses, particularly general and administrative costs, rose substantially, impacted by merger transaction costs, which contributed to the decline in profitability. The company's cash position improved, but its convertible debt also increased.

Key Financial Figures

• $0.001 — hange on which registered Common stock $0.001 par value per share PRO New York Stock

Filing Documents

• pro-20250930.htm (10-Q) — 1055KB
• empagrmntamendcotten.htm (EX-10.1) — 22KB
• empagrmntamendschulz.htm (EX-10.2) — 21KB
• a2025q3ex311ceocertificati.htm (EX-31.1) — 10KB
• a2025q3ex312cfocertificati.htm (EX-31.2) — 10KB
• a2025q3ex321ceocfocertific.htm (EX-32.1) — 8KB
• pro-20250930_g1.jpg (GRAPHIC) — 156KB
• 0001392972-25-000164.txt ( ) — 5781KB
• pro-20250930.xsd (EX-101.SCH) — 38KB
• pro-20250930_cal.xml (EX-101.CAL) — 63KB
• pro-20250930_def.xml (EX-101.DEF) — 221KB
• pro-20250930_lab.xml (EX-101.LAB) — 555KB
• pro-20250930_pre.xml (EX-101.PRE) — 363KB
• pro-20250930_htm.xml (XML) — 582KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Interim Condensed Consolidated Financial Statements (Unaudited)

Item 1. Interim Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Balance Sheets 4 Condensed Consolidated Statements of Comprehensive (Loss) Income 5 Condensed Consolidated Statements of Cash Flows 6 Condensed Consolidated Statements of Stockholders' (Deficit) Equity 7 Notes to Condensed Consolidated Financial Statements 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 18

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 25

Controls and Procedures

Item 4. Controls and Procedures 25

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 26

Risk Factors

Item 1A. Risk Factors 26

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 28

Mine Safety Disclosure

Item 4. Mine Safety Disclosure 28

Other Information

Item 5. Other Information 28

Exhibits

Item 6. Exhibits 29

Signatures

Signatures 30 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). All statements in this report other than historical facts are forward-looking and are based on current estimates, assumptions, trends, and projections. Statements which include the words "believes," "seeks," "expects," "may," "should," "intends," "likely," "targets," "plans," "anticipates," "estimates," or the negative version of those words and similar expressions are intended to identify forward-looking statements. Numerous important factors, risks and uncertainties affect our operating results, including the pending merger pursuant to which we will be acquired by Thoma Bravo, and, without limitation, those described in our Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q, which could cause our actual results to differ materially, from the results implied by these or any other forward-looking statements made by us or on our behalf. You should pay particular attention to the important risk factors and cautionary statements described in the section of our Annual Report on Form 10-K entitled "Risk Factors" and the section of this Quarterly Report on Form 10-Q entitled "Risk Factors." You should also carefully review the cautionary statements described in the other documents we file with the Securities and Exchange Commission, specifically the Annual Report on Form 10-K, all Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. You should not rely on forward-looking statements as predictions of future events, as we cannot guarantee that future results, levels of activity, performance or achievements will meet expectations. The forward-looking statements made herein are only made as

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ITEM 1. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) PROS Holdings, Inc. Condensed Consolidated Balance Sheets (In thousands, except share and per share amounts) (Unaudited) September 30, 2025 December 31, 2024 Assets: Current assets: Cash and cash equivalents $ 188,404 $ 161,983 Trade and other receivables, net of allowance of $ 1,069 and $ 922 , respectively 62,020 64,982 Deferred costs, current 4,990 4,634 Prepaid and other current assets 10,338 7,517 Restricted cash, current 10,000 — Total current assets 275,752 239,116 Restricted cash, noncurrent — 10,000 Property and equipment, net 17,754 19,745 Operating lease right-of-use assets 16,845 16,066 Deferred costs, noncurrent 12,704 11,515 Intangibles, net 4,174 7,044 Goodwill 108,944 107,278 Other assets, noncurrent 8,756 9,138 Total assets $ 444,929 $ 419,902 Liabilities and Stockholders' (Deficit) Equity: Current liabilities: Accounts payable and other liabilities $ 5,801 $ 8,589 Accrued liabilities 16,792 14,085 Accrued payroll and other employee benefits 22,133 27,117 Operating lease liabilities, current 4,249 6,227 Deferred revenue, current 127,431 130,977 Total current liabilities 176,406 186,995 Deferred revenue, noncurrent 5,131 5,438 Convertible debt, net 311,905 270,797 Operating lease liabilities, noncurrent 25,925 23,870 Other liabilities, noncurrent 1,740 1,505 Total liabilities 521,107 488,605 Commitments and contingencies (see Note 9) Stockholders' (deficit) equity: Preferred stock, $ 0.001 par value, 5,000,000 shares authorized; none issued — — Common stock, $ 0.001 par value, 75,000,000 shares authorized; 52,934,115 and 52,083,732 shares issued, respectively; 48,253,392 and 47,403,009 shares outstanding, respectively 53 52 Additional paid-in capital 637,474 634,212 Treasury stock, 4,680,723 common shares, at cost ( 29,847 ) ( 29,847 ) Accumulated deficit ( 677,419 ) ( 667,727 ) Accumulated other comprehensive loss ( 6,439 ) ( 5

View Full Filing

View this 10-Q filing on SEC EDGAR