PROS Holdings, Inc. (NYSE:PRO) Q3 2023 Earnings Call Transcript

PROS Holdings, Inc. (NYSE:PRO) Q3 2023 Earnings Call Transcript October 31, 2023

PROS Holdings, Inc. misses on earnings expectations. Reported EPS is $-0.30001 EPS, expectations were $0.03.

Operator: Greetings. Welcome to the PROS Holdings Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference call over to Belinda Overdeput, Director of Investor Relations.

Belinda Overdeput: 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 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. 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 and guidance.

Actual results could differ materially from such statements and our forecast. For more information, please refer to the Risk Factors described in our SEC filings. PROS assumes no obligation to update any forward-looking statements to reflect future events or circumstances. 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.

Andres Reiner: Thank you, Belinda. Good afternoon, everyone, and thank you for joining us on today’s call. I am proud to share we delivered a strong third quarter, exceeding our guidance ranges across all metrics. We grew subscription revenue by 16% year-over-year, total revenue by 10% year-over-year and delivered $5.6 million in positive adjusted EBITDA, an improvement of $7.8 million year-over-year. Our results are a testament to our team’s relentless focus on driving profitable growth to achieve our goal of being a Rule of 40 company by 2026. As the market increasingly embraces AI, PROS long-term trajectory continues to strengthen. C-suite leaders across industries are encouraging their teams to infuse AI into their operations, and PROS is a clear choice given our enterprise AI is proven to fuel profitable revenue growth.

When it comes to enterprise AI, accuracy, trust, and speed are critical, and this is what sets PROS apart. We ensure accuracy and trust by using an ensemble approach to combine multiple AI algorithms together. For example, we ensemble our price prediction algorithms with outlier detection and explainable AI algorithms to deliver the most optimal and transparent results possible. Our models are adaptive, they self-learn and recalibrate based on user interaction and real-time data signals to provide the most up-to-date predictions. We offer unparalleled solution performance with response times that are guaranteed within milliseconds for our real-time solutions. Through greater accuracy, trust, and speed, PROS delivers the promise of AI today.

Our mission is to help people and companies outperform. Our enterprise AI generates significant revenue, margin, and efficiency improvements for our customers, as shown in our published ROI study. Recently, we ran an analysis to see how these business outcomes translate into shareholder returns for our customers. We found that PROS publicly traded customers outperformed the Dow and S&P 500 by more than 15 percentage points between the beginning of 2022 and the end of Q3 2023. I’m proud that we are helping such amazing customers drive these incredible returns. I encourage you to check out this chart in our Q3 Investor Presentation. Our land-and-expand strategy is working, demonstrated by our accelerating subscription revenue growth, significant improvements to profitability, and the pace at which we are continuing to land new customers and expand their use of our platform.

In Q3 we continued to welcome new logos across our target industries, and now I’ll share a few examples. Genesis Energy, a New Zealand-based electricity and gas supplier, selected the PROS Platform to provide a seamless customer experience with a harmonized omnichannel strategy. Trivium Packaging, a leading global manufacturer of metal packaging, selected the PROS Platform in Q3 to fuel profitable growth. Trivium will improve their responsiveness to shifting raw material costs with dynamic pricing and drive accelerated time-to-quote with CPQ. JetSMART and GOL Airlines selected the PROS Platform to use our digital offer marketing solutions to increase online traffic and drive higher conversion of sales through digital channels. SKS Airways, a new Malaysian carrier planning to launch at the beginning of 2024, selected PROS as a strategic partner in driving their growth strategy.

SKS Airways will use PROS Revenue Management platform to help them predict demand, scale their operations, and maximize revenue. Now, I’m excited to share a few of the incredible expansions we saw with our customers in Q3. Ingredion, a leading global ingredient solutions provider, began their journey with PROS to drive a digitally connected sales motion and optimized pricing. Since implementing our platform, Ingredion is driving more accurate pricing by leveraging real-time cost changes resulting in faster time-to-quote and an improved customer experience. Ingredion has expanded margins using PROS AI-powered pricing to optimize product and customer mix, and even highlighted this on their recent earnings call. Ingredion’s CEO, James Zallie, said on the call “our results demonstrate our ability to be responsive to shifting market dynamics and deliver continued profit growth.” We are proud of Ingredion’s success and pleased to share they expanded their use of the PROS Platform to a new region each of the last two quarters.

Air New Zealand expanded their use of the PROS Platform with the adoption of our Dynamic Offers solution. With PROS Dynamic Offers, Air New Zealand will modernize their retailing strategy with our leading capabilities in airfare shopping and pricing, enabling them to design, distribute and manage priced fares across direct, indirect, and digital sales channels. Turkish Airlines expanded their use of our platform with their adoption of our digital offer marketing solution and their recent go live of our latest generation of solutions for revenue management, real-time dynamic pricing, and group sales. Turkish Airlines has been a PROS customer since 2009, and it’s been amazing to be part of their stunning break through during this time. Turkish Airlines has more than doubled the number of destinations it flies to since the beginning of our partnership, and today flies to more countries than any other airline in the world.

Our platform innovations enable the next-generation of modern retailing for Turkish Airlines on a massive global scale. Real-time dynamic pricing is the key to fueling revenue growth, managing availability, and intelligently controlling each offer. With the PROS Platform, Turkish Airlines can increase online traffic and drive higher conversion rates of optimized offers across their global passenger and group businesses, driving their growth strategy. In closing, I would like to thank our global team for making PROS an incredible company and delivering on our mission of helping people and companies outperform. Also, I would like to thank our customers, partners, and shareholders for their ongoing support of PROS. With that, I would like to turn the call over to Stefan to cover our financial performance and outlook.

Stefan Schulz: Thank you, Andres, and good afternoon, everyone. We delivered another strong quarter which puts us in a position to raise our outlook once again for the year. Year-to-date we have grown our subscription revenue by 15% and total revenue by 10% while delivering over $20 million in improvements to both adjusted EBITDA and free cash flow. We have now generated positive adjusted EBITDA on a year-to-date basis and expect positive free cash flow for the full-year, after an expected seasonally strong fourth quarter. These profitability improvements have been made while also executing to our revenue growth plan. We are off to a good start towards reaching our goal of achieving Rule of 40 by 2026, and I am pleased with our progress towards these objectives.

Now, for our third quarter results. Subscription revenue in the third quarter was $60 million, up 16% year-over-year and total revenue was $77.3 million, up 10% year-over-year, both exceeding the high-end of our guidance ranges. Our third quarter recurring revenue was 84% of total revenue. As expected, our third quarter calculated billings were relatively flat year-over-year and increased 5% for the trailing 12-months. As a reminder, the size and timing of our billings have an impact on our quarterly growth rate. Our trailing 12-month gross revenue retention rate in the third quarter remained above 93%. Non-GAAP subscription gross margin was 78% for the quarter, improving from 77% a year ago. Our non-GAAP services margin was 9% in the third quarter, improving from 4% a year ago.

Our overall profitability improvements start with gross margins, and year-to-date we have delivered over 145 basis points of improvement to subscription gross margins and over 800 basis points of improvement to services gross margins compared to last year. Driving greater efficiencies in how we deliver our solutions has been an area of focus for our professional services and product teams, and I want to congratulate them for their achievements in this area. Adjusted EBITDA was $5.6 million in the third quarter, exceeding guidance. We also generated $8.5 million of free cash flow in the third quarter, a $17.6 million improvement compared to last year. From a balance sheet perspective, we exited the third quarter with $169.1 million of cash and cash equivalents and have access to our $50 million revolving line of credit.

Additionally, we exchanged approximately $122 million of our convertible notes due in May 2024 for approximately $117 million in additional notes under our 2027 indenture. The new notes under the 2027 indenture are recorded on our balance sheet at fair value because our 2027 notes were trading at a premium to par, so even though the exchange resulted in a lower level of debt at par value, our balance sheet will reflect a higher amount of debt. This non-cash premium will be amortized down to the debt’s par value over the next four years. As a result of this exchange, we have reduced our debt due in May 2024 to approximately $22 million. Our non-GAAP earnings per share was $0.09 per share. Now turning to guidance. For the full-year, we are raising our subscription and total revenue guidance.

We expect subscription revenue to be in the range of $233.3 million to $233.8 million and total revenue to be in the range of $302.2 million to $303.2 million. We are also raising the midpoint of our EBITDA and free cash flow guidance. We expect adjusted EBITDA profit for the full-year of between $6.5 million and $7.5 million and free cash flow of between $3.5 million and $6.5 million. We are maintaining our guidance for subscription ARR at $251 million to $254 million. And for the fourth quarter, we expect subscription revenue to be in the range of $60 million to $60.5 million and total revenue to be in the range of $76 million to $77 million. We are anticipating a sequential decline in services revenue due to the holidays. We expect fourth quarter adjusted EBITDA profit of between $3 million and $4 million.

And using an estimated non-GAAP tax rate of 22%, we anticipate fourth quarter non-GAAP earnings per share of between $0.03 and $0.05 per share, based on an estimated 47.5 million diluted weighted average shares outstanding. In closing, I would like to thank our employees and customers for their continued passion and support. We also thank our shareholders for their continued 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?

Operator: Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions]. Our first question comes from the line of Chad Bennett with Craig-Hallum Capital Group. Please proceed with your question.

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Q&A Session

Chad Bennett: Great. Thanks. Nice job again on great execution in the quarter. It’s great seeing the reacceleration in subscription revenue growth to 16%, pretty material year-to-date and then also that flowing down to a very nice EBITDA and earnings beat. I guess question I have is I kind of marked down, Andres, all the logos you talk about in expansions every quarter. And I could be wrong, but I think there are a fair amount of travel-related transactions this quarter. Can you give us a sense of where we are in that recovery and maybe into the fourth quarter here and how we should think about the travel business and bookings there?

Andres Reiner: Yes, Chad, great question. Yes. I would say travel had a good quarter; a very strong quarter and we’re very pleased both on the lands with GOL Airlines, JetSMART and SKS Airways as examples and also on the expansion side, as well. You know Air New Zealand expanding to dynamic offers, huge win for us and continuing to broaden our reach within Air New Zealand and also Turkish Airlines continuing to expand now with our digital offer marketing. What I would tell you is that where we innovated during the pandemic is areas that airlines we knew when they started investing. They would want to adopt these solutions and definitely they’re resonating. And the market is improving as we expected into Q3 and Q4.

Chad Bennett: Okay. So we are seeing demand recovery into the second half here.

Andres Reiner: Yes. Yes. I would tell you it’s pretty consistent with what we expected in a good way. We said we expected in the back half of the year for demand to pick up and we’re seeing it.

Chad Bennett: Okay. And then maybe just on the other side of the — B2B side of the business, just in terms of how to characterize, I think you talked about last quarter a pretty significant reduction in sales cycles, I think you said 30% and an improvement in new logo activity that you saw last quarter. Is that business — I assume it’s driving the reacceleration or a decent amount of it, but is there any characterization of how much that business has accelerated year-to-date and how to think about that going forward? Thanks.

Andres Reiner: Yes, Chad, great question. We’re seeing the same improvement in the B2B new logo velocity that we talked about last quarter. We’re seeing about a 30% improvement in those sales cycle times and we’re continuing to drive deal growth there. We’re always proud to talk about the lands like Genesis Energy and Trivium Packaging as well. As I would tell you, the land realize and expand strategy that we started at the beginning of the year, we’re seeing it working Ingredion is a perfect example. They’re seeing significant value in each of the last two quarters. Q2 and Q3 they expanded into new regions and I believe that motion, while we’re not fully to our potential, we’re executing very well.

Chad Bennett: Got it. Thanks for the color. Nice job.

Andres Reiner: Thank you.

Operator: Our next question comes from the line of Rob Oliver with Baird. Please proceed with your question.

Rob Oliver: Great. Hi guys, thank you very much for taking my question. Good afternoon. I had two. My first, Andres, was just around and I recognize that it’s still early, but a question around the Microsoft partnership obviously some excitement around Azure with the recent report and seeing some interest in AI solutions. And I know it’s early for you guys, but would be curious to hear how you characterize the sort of progress and what constitutes early success for the Microsoft partnership. And then I had a quick follow-up as well.

Andres Reiner: Yes. I would tell you, look, the Microsoft partnership continues to strengthen in all areas. I think from an innovation, we’re continuing to drive innovation on the front of OpenAI and some generative AI capabilities around their next-generation Viva Sales platform and PROS. But on a go-to-market, I would tell you there’s very strong collaboration across all of our geographies between Microsoft and PROS. We can now resell our solutions in their marketplace and we’re working very well. Still early phases, but I would tell you the partnership is as strong as it’s ever been.

Rob Oliver: Great. Okay. Excellent to hear. And then just looks like a real strong quarter for you guys in Europe and I just wanted to parse on that a little bit and understand was it more on the B2B side, more on the air travel side and then be curious for any color around those deals, partner led or sort of the new more modular sales model, what’s driving that that strength? Thank you.

Andres Reiner: Yes. No, great question. I would tell you, look, in general, we’re seeing — we’re focused on this land realized expand strategy. So I would say, in general, we’re trying to land these smaller deals and drive acceleration. As we know it is a complex market and we knew coming into this year, there was more important than ever that we land in a fast time to value, be able to measure uplift and drive quick expansion because companies are very focused on where they invest. And I think we’ve executed on that strategy well both in travel and B2B. With respect to EMEA, we saw good demand on the travel front with expansions and we talked about some of those and also on the B2B front. So across both sides, but I would say both teams are very, very focused on how we land an account and what is the best next offer that we can offer for existing customers to drive those rapid expansions.

Operator: Our next question comes from the line of Jason Celino with KeyBanc Capital Markets Inc. Please proceed with your question.

Jason Celino: Great. Thanks for taking my question. One on sales capacity. Next year is just around the corner at this point. Wanted to get an update, how you’re thinking about sales capacity heading into next year. Do you feel comfortable with your coverage? Any thoughts there?

Andres Reiner: Yes. Great question, Jason. I would tell you we’re in a good place from a sales capacity. We’ve continued to add the reps that we need to onboard and get them productive for next year. So I feel like we’re in a good place. We’ll continue to execute through this quarter. We’ll continue to have reps in preparation, but I feel we’re in a really good place with the team. We’re also continuing to focus on driving higher rep productivity. This is an area that we started and I would tell you we’ve made improvement to our CAC ratios and we feel we can get to best-in-class. And we’re going to continue also to focus on driving higher rev productivity as we look into next year. But we feel from a capacity, we’re in a good place.

Jason Celino: Perfect. And then, just a quick one for Stefan, on the EBITDA beat nice leverage there. Looks like you’re raising the full-year by only a little bit. Any expenses or investments that we should be aware of for Q4?

Stefan Schulz: No, Jason. We did in our forecast assuming we deliver based on anticipation and how we’re seeing the plan come in; there’ll be some variable compensation components that come into play in the fourth quarter. That’s the only reason you see that number sequentially come down slightly from Q3 to Q4 is that potential variable incentive component. That’s it.

Jason Celino: Great. Excellent. Good stuff. Thank you.

Andres Reiner: Thank you.

Stefan Schulz: Thank you.

Operator: Our next question comes from the line of Scott Berg with Needham. Please proceed with your question.

Scott Berg: Hi, Andres, and Stefan, congrats on the good quarter and thanks for taking my questions. I guess a couple things, surprised this one lasted to me. There’s a rumor at the end of the quarter that you’ve hired another investment bank potentially, I guess, evaluate maybe some sort of incoming inquiries into the company. Not that I expect you to comment on any acquisition activity on the company here publicly, but I guess any thoughts on what the criteria or scenario would be to maybe potentially actually go through with the sale of the company? Because I think you guys are at a fantastic point right now with AI, with rebound and travel. I would think the future looks really strong and you probably have some interest in maintaining this as a public entity for a while. Thank you.

Andres Reiner: Yes, Scott. Great question. And obviously, look, we don’t comment on rumors or market speculation, but what we can tell you is that we are laser-focused on executing our goal of being a Rule of 40 company by 2026. We believe we’re in a very strong market position, a leader in our space, $38 billion TAM, and we’ve proven that we’re executing really well on our land realize and expand strategy. So we feel we have a great opportunity to drive pretty significant shareholder returns. So I think we feel we’re in a great place and we’re just focused on executing.

Scott Berg: Great. Thank you. And then, from a follow-up perspective, Stefan, you beat all profitability metrics pretty handily in the quarter. Looks like your sales and marketing expense was down quarter-over-quarter more than kind of the historical seasonal nature. I guess anything driving that in particular and my guess is, we should probably be thinking of sales and marketing being at a higher rate here starting in Q4 going forward.

Stefan Schulz: Yes. Scott, I think your assumption about it going up again is a good one. The reason for the sequential decline from Q2 to Q3 had really to do with our outperform event. So a lot of resources go towards that event, not only just the third-party fees and the direct fees associated with it, but there’s a lot of indirect fees that go to support that event. And so you saw that plus a couple of other events that occurred in the second quarter, and we didn’t have as much in the third quarter. So that’s the real big reason behind seeing that type of a movement. So again, to your point, I think going forward; you’ll see that number start to rebound a bit.

Scott Berg: Great. That’s all I have. Thanks for taking my questions.

Andres Reiner: Thank you.

Operator: Our next question comes from the line of Parker Lane with Stifel. Please proceed with your question.

Parker Lane: Yes. Hi, guys, appreciate taking the questions here. First one’s for you, Andres. You’re exposed to a lot of different industries out there. I’d be really curious to hear with the prioritization of AI and being the subject that everyone’s really concerned about. Are there any particular verticals where you’re seeing the greatest prioritization of AI or the budgets actually being a little bit more substantial than average?

Andres Reiner: Yes, Parker, great question. What I would tell you is while we’re seeing industries that are being impacted, that maybe their performance not well, we’re not seeing the de-prioritization of our initiatives. So broadly, we’re seeing very strong industry interests across. And I think the importance of AI and digitization of sales and driving the right price guidance in this high volatility environment is continuing to resonate. And I think I said it all along at the beginning, I think it was very important for us to be able to land small, be able to measure the uplift in ROI, get to value quickly and us executing to that has clearly demonstrated. I think the visibility of AI and the importance of AI has only increased.

And I would say we’re seeing that more and more interest of adopting or Gen IV dynamic pricing algorithms or next-generation of dynamic pricing for revenue management and travel solutions, digitization of the customer experience and travel in those areas. So overall, I would tell you we feel pretty good about the market environment right now.

Parker Lane: Understood. Yes, I appreciate that. And then, Stefan, for you, I know you’ve oriented investors and us on the sell side here around ARR as the core metric, but wanted you to touch on RPO if you could a little bit. And when should we expect sort of a normalization in that metric? I saw it’s declined here a couple of quarters.

Stefan Schulz: Yes. Parker, that’s a — that is a function of the things that we’ve been talking about to Andres’ point about the land realize and expand strategy, we’re — our typical contracts are going to be quite a bit smaller than they have been historically. And so as that unwinds throughout the RPO disclosure, you’re seeing an inconsistent way in which we used to run the business versus how we’re running the business today, and it’s showing itself in RPO. So to your point, I think as we get towards the middle part of next year, I think we should have that anniversaried out, and so we should be starting to see the real impact of our — of the momentum in our business start to be reflective in more of those RPO metrics.

Now, having said that, there’s still anomalies that go into that metric, just like there are with calculated billings from a timing of renewal and when that occurs to regenerate that contractual obligation. But I think generally speaking, we should see a more — an outcome that’s more representative of the momentum in the business starting in the middle part of next year.

Parker Lane: Got it. Okay. That’s all for me. Thank you.

Andres Reiner: Thank you.

Operator: Our next question comes from the line of Camden Levy with Oppenheimer. Please proceed with your question.

Camden Levy: Hi. This is Camden Levy sitting in for Brian Schwartz. Thanks for taking my question. Just one here, giving your guidance exposure to the travel industry and just thinking about Q3 moving into Q4, specifically just this first month of October. Have you guys seen any like sequential softening in consumer demand from the ongoing conflict in the Middle East as it relates to EMEA and just some of the strength that you saw in that market this quarter? Thanks.

Andres Reiner: Yes, Camden, great question. I would tell you we’re watching that very carefully. So far, we haven’t seen any impact to demand or big impact to our customers. So — but we are actively monitoring the situation. But so far, we have not seen an impact and we’re not seeing our customers be impacted by that currently.

Camden Levy: Okay. And then, maybe just like following-up on it, any like of the customer conversations or just ongoing pipeline that you had with travel partners or suppliers in, I guess, like EMEA and like Middle East, have any of those conversations maybe perhaps stalled or elongated as a result of October per se?

Andres Reiner: Yes. Great question. I would tell you no stalls. It’s continuing. And I would say, we are active engaging in both of those regions EMEA and Middle East, and we’re continuing to see the focus on their strategy. And I think they’ve seen the importance of innovating and the value that it can drive. So, so far, we haven’t seen any instances of them slowing down.

Camden Levy: Okay. That’s it for me. Thank you so much.

Andres Reiner: Thank you.

Operator: Our next question comes from the line of Victor Cheng with Bank of America. Please proceed with your question.

Victor Cheng: Hi, Andres, and hi, Stefan, congrats on the solid quarter again. Just two from my side. Obviously, you mentioned you continue to see a faster sales cycle, but can you give us some more color maybe on the pipeline, what you’re seeing at the top of the funnel, whether there’s more happening at the top, and maybe if you split it by geography as well, maybe a bit more color on the U.S. as well as it appears to be a bit softer in Q2 — in Q3.

Andres Reiner: Yes, Victor, great question. So we didn’t see any softness in the U.S. in Q3. And overall, top of the funnel continues to grow well. It puts us in a — we feel in a good position to continue to drive growth. So overall, I would tell you, whether we look at industries or geographies, we’re seeing good demand across. There’s not an area that we’re seeing a decline, whether it be at the top end of the funnel or within say Q3. So we saw pretty good demand across the U.S., Europe, in other regions, as well as across industries. One other thing I will note is the mix continues to be between new and existing in that 50:50 mix as well.

Victor Cheng: Got it. And then the other one is maybe on travel. Obviously, you mentioned that demand is coming back, but just want to check is going to be airline IT spend still below that pre-pandemic level. And as we think about 2024 with a lot of the volumes broadly normalized, and when I think about airline industry in general, they’re going through a once in a generation change both on distribution, on software side with offer orders management. Should we expect a much bigger appetite in 2024/2025? When should we see that coming in?

Andres Reiner: Yes. Great question, Victor. I would tell you that Q3 was a big progress quarter for us to see travel trend more towards 2019 volumes. And I think we feel very good about Q4 and as we look into next year of that continuing. So I think it’s a little premature to call 2024, but I feel all the ingredients are there. Airlines are starting to invest and they’re investing in the areas that we innovated, as we talked about. So I think our market position is continuing to strengthen, and I think all the areas where we expanded our portfolio are resonating really, really well. I mean, just recently there was an article about Lufthansa and our continuous pricing as an example, that they’ve had very significant success this year and they attribute to the investments they did with PROS during the pandemic and now reaping those benefits.

Those are great proof points that the innovations that we did are paying off. And I believe that customers will continue to follow to adopt those latest generations of revenue management and our full solution from the digital fair marketing all the way into revenue management to drive better returns for their business. So overall, I feel very good about travel as we look into 2024, but it’s a little premature to call next year.

Victor Cheng: Very clear. Thank you.

Andres Reiner: Thank you.

Operator: Thank you. At this time, ladies and gentlemen, we have reached the end of the question-and-answer session. I would like to turn the call back to Belinda Overdeput for closing remarks.

Belinda Overdeput: 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 Stifel Midwest One-on-One Growth Conference in Chicago on November 9, the Craig-Hallum Alpha Select Conference in New York City on November 16, the Needham Virtual SaaS One-on-One Conference also on November 16, and the UBS Global Tech Conference in Scottsdale on November 29 and 30. If you have any questions following today’s call, please contact us at ir@pros.com. Thank you, and goodbye.

Operator: This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.