Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

___________________________________________________________________________

FORM 10-Q

_________________________________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-33554

___________________________________________________________________________

PROS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

__________________________________________________________________________


Delaware						76-0168604
(State of Incorporation)						(I.R.S. Employer Identification No.)

3200 Kirby Drive, Suite 600

77098

Houston

(Address of Principal Executive Offices)

(Zip Code)

(713)

335-5151

(Registrant's telephone number, including area code)

(Former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock $0.001 par value per share

PRO

New York Stock Exchange

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller Reporting Company	☐
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant's Common Stock, $0.001 par value, was 47,305,965 as of October 22, 2024.

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PROS Holdings, Inc.

Form 10-Q

For the Quarterly Period Ended September 30, 2024

Table of Contents


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Interim Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Comprehensive Income (Loss)	5
	Condensed Consolidated Statements of Cash Flows	6
	Condensed Consolidated Statements of Stockholders' (Deficit) Equity	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4.	Controls and Procedures	24

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosure	26
Item 5.	Other Information	26
Item 6.	Exhibits	26
Signatures		27

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, without limitation, those described in our Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q, and 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 of the date hereof, and we undertake no obligation to publicly update such forward-looking statements for any reason.

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PART I. FINANCIAL INFORMATION

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, 2024		December 31, 2023
Assets:
Current assets:
Cash and cash equivalents	$	140,564	$	168,747

Trade and other receivables, net of allowance of $690 and $574, respectively	48,225		49,058
Deferred costs, current	4,448		4,856
Prepaid and other current assets	10,782		12,013

Total current assets	204,019		234,674
Restricted cash	10,000		10,000
Property and equipment, net	20,391		23,051
Operating lease right-of-use assets	13,770		14,801
Deferred costs, noncurrent	10,690		10,292
Intangibles, net	7,997		11,678
Goodwill	107,970		107,860


Other assets, noncurrent	9,332		9,477
Total assets	$	384,169	$	421,833
Liabilities and Stockholders' (Deficit) Equity:
Current liabilities:
Accounts payable and other liabilities	$	5,270	$	3,034
Accrued liabilities	13,603		13,257
Accrued payroll and other employee benefits	22,831		32,762
Operating lease liabilities, current	3,590		5,655
Deferred revenue, current	114,538		120,955
Current portion of convertible debt, net	—		21,668
Total current liabilities	159,832		197,331
Deferred revenue, noncurrent	2,675		3,669
Convertible debt, net	271,173		272,324
Operating lease liabilities, noncurrent	24,482		25,118
Other liabilities, noncurrent	1,231		1,264
Total liabilities	459,393		499,706
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; 51,953,232 and 51,184,584 shares issued, respectively; 47,272,509 and 46,503,861 shares outstanding, respectively	52		51
Additional paid-in capital	625,085		604,084
Treasury stock, 4,680,723 common shares, at cost	(29,847)		(29,847)
Accumulated deficit	(665,760)		(647,252)
Accumulated other comprehensive loss	(4,754)		(4,909)

Total stockholders' (deficit) equity	(75,224)		(77,873)
Total liabilities and stockholders' (deficit) equity	$	384,169	$	421,833

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROS Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue:
Subscription	$	67,068	$	59,987	$	197,017	$	173,260
Maintenance and support	3,361		4,693		10,341		15,498
Total subscription, maintenance and support	70,429		64,680		207,358		188,758

Services	12,273		12,570		38,045		37,466
Total revenue	82,702		77,250		245,403		226,224
Cost of revenue:
Subscription	14,470		14,510		43,653		42,662
Maintenance and support	1,698		1,769		5,311		5,927
Total cost of subscription, maintenance and support	16,168		16,279		48,964		48,589

Services	12,130		12,185		36,986		37,988
Total cost of revenue	28,298		28,464		85,950		86,577
Gross profit	54,404		48,786		159,453		139,647
Operating expenses:
Selling and marketing	20,074		20,324		66,293		71,214
Research and development	21,081		22,205		67,280		66,343
General and administrative	13,218		14,099		43,335		42,083


Income (loss) from operations	31		(7,842)		(17,455)		(39,993)
Convertible debt interest and amortization	(1,121)		(1,497)		(3,471)		(4,649)
Other income (expense), net	1,531		(4,288)		3,312		(1,046)
Income (loss) before income tax provision	441		(13,627)		(17,614)		(45,688)
Income tax provision	206		241		894		471
Net income (loss)	$	235	$	(13,868)	$	(18,508)	$	(46,159)



Net income (loss) per share:
Basic and diluted	$	—	$	(0.30)	$	(0.39)	$	(1.00)

Weighted average number of shares:
Basic	47,231		46,225		47,038		46,084
Diluted	47,338		46,225		47,038		46,084
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	$	390	$	(359)	$	155	$	(174)

Other comprehensive income (loss), net of tax	390		(359)		155		(174)
Comprehensive income (loss)	$	625	$	(14,227)	$	(18,353)	$	(46,333)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROS Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2024		2023
Operating activities:
Net loss	$	(18,508)	$	(46,159)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	6,371		8,301
Amortization of debt premium and issuance costs	(896)		1,094
Share-based compensation	30,219		31,589



Provision for credit losses	52		88
Gain on lease modification	(697)		—
Loss on disposal of assets	774		51


Loss on derivatives	—		4,343
Loss on debt extinguishment	—		1,779
Changes in operating assets and liabilities:
Accounts and unbilled receivables	788		(1,573)
Deferred costs	10		704
Prepaid expenses and other assets	1,158		31
Operating lease right-of-use assets and liabilities	(1,838)		(1,686)
Accounts payable and other liabilities	2,191		(3,375)
Accrued liabilities	1,087		1,489
Accrued payroll and other employee benefits	(9,906)		(242)
Deferred revenue	(7,435)		(401)
Net cash provided by (used in) operating activities	3,370		(3,967)
Investing activities:
Purchases of property and equipment	(669)		(2,168)


Capitalized internal-use software development costs	(58)		—


Investment in equity securities	(113)		(113)



Net cash used in investing activities	(840)		(2,281)
Financing activities:


Proceeds from employee stock plans	2,079		2,170
Tax withholding related to net share settlement of stock awards	(11,296)		(6,831)



Debt issuance costs related to Credit Agreement	—		(837)


Purchase of capped call	—		(22,771)
Repayment of convertible debt	(21,713)		—



Net cash used in financing activities	(30,930)		(28,269)
Effect of foreign currency rates on cash	217		(30)
Net change in cash, cash equivalents and restricted cash	(28,183)		(34,547)
Cash, cash equivalents and restricted cash:
Beginning of period	178,747		203,627
End of period	$	150,564	$	169,080

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:
Cash and cash equivalents	$	140,564	$	159,080
Restricted cash	10,000		10,000
Total cash, cash equivalents and restricted cash	$	150,564	$	169,080

Supplemental disclosure of cash flow information:
Noncash investing activities:
Purchase of property and equipment accrued but not paid	$	237	$	236

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROS Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ (Deficit) Equity

(In thousands, except share data)

(Unaudited)


	Three Months Ended September 30, 2024
















	Common Stock			Additional Paid-In Capital		Treasury Stock			Accumulated Deficit		Accumulated other comprehensive loss		Total Stockholders’ (Deficit) Equity
	Shares	Amount				Shares	Amount
Balance at June 30, 2024	47,129,558	$	52	$	617,894	4,680,723	$	(29,847)	$	(665,995)	$	(5,144)	$	(83,040)

Stock awards net settlement	99,653	—		(1,135)		—	—		—		—		(1,135)
Proceeds from employee stock plans	43,298	—		1,055		—	—		—		—		1,055







Noncash share-based compensation	—	—		7,271		—	—		—		—		7,271

Other comprehensive income (loss)	—	—		—		—	—		—		390		390
Net income (loss)	—	—		—		—	—		235		—		235
Balance at September 30, 2024	47,272,509	$	52	$	625,085	4,680,723	$	(29,847)	$	(665,760)	$	(4,754)	$	(75,224)


	Three Months Ended September 30, 2023
	Common Stock			Additional Paid-In Capital		Treasury Stock			Accumulated Deficit		Accumulated other comprehensive loss		Total Stockholders’ (Deficit) Equity
	Shares	Amount				Shares	Amount
Balance at June 30, 2023	46,140,736	$	51	$	606,599	4,680,723	$	(29,847)	$	(623,189)	$	(5,068)	$	(51,454)
Stock awards net settlement	58,814	—		(1,163)		—	—		—		—		(1,163)
Proceeds from employee stock plans	48,859	—		1,033		—	—		—		—		1,033








Noncash share-based compensation	—	—		10,933		—	—		—		—		10,933
Other comprehensive income (loss)	—	—		—		—	—		—		(359)		(359)
Net income (loss)	—	—		—		—	—		(13,868)		—		(13,868)
Balance at September 30, 2023	46,248,409	$	51	$	617,402	4,680,723	$	(29,847)	$	(637,057)	$	(5,427)	$	(54,878)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROS Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ (Deficit) Equity (Continued)

(In thousands, except share data)

(Unaudited)


	Nine Months Ended September 30, 2024
















	Common Stock			Additional Paid-In Capital		Treasury Stock			Accumulated Deficit		Accumulated other comprehensive loss		Total Stockholders’ (Deficit) Equity
	Shares	Amount				Shares	Amount
Balance at December 31, 2023	46,503,861	$	51	$	604,084	4,680,723	$	(29,847)	$	(647,252)	$	(4,909)	$	(77,873)

Stock awards net settlement	684,942	1		(11,297)		—	—		—		—		(11,296)
Proceeds from employee stock plans	83,706	—		2,079		—	—		—		—		2,079







Noncash share-based compensation	—	—		30,219		—	—		—		—		30,219

Other comprehensive income (loss)	—	—		—		—	—		—		155		155
Net income (loss)	—	—		—		—	—		(18,508)		—		(18,508)
Balance at September 30, 2024	47,272,509	$	52	$	625,085	4,680,723	$	(29,847)	$	(665,760)	$	(4,754)	$	(75,224)


	Nine Months Ended September 30, 2023
	Common Stock			Additional Paid-In Capital		Treasury Stock			Accumulated Deficit		Accumulated other comprehensive loss		Total Stockholders’ (Deficit) Equity
	Shares	Amount				Shares	Amount
Balance at December 31, 2022	45,638,003	$	50	$	590,475	4,680,723	$	(29,847)	$	(590,898)	$	(5,253)	$	(35,473)
Stock awards net settlement	506,398	1		(6,832)		—	—		—		—		(6,831)
Proceeds from employee stock plans	104,008	—		2,170		—	—		—		—		2,170








Noncash share-based compensation	—	—		31,589		—	—		—		—		31,589
Other comprehensive income (loss)	—	—		—		—	—		—		(174)		(174)
Net income (loss)	—	—		—		—	—		(46,159)		—		(46,159)
Balance at September 30, 2023	46,248,409	$	51	$	617,402	4,680,723	$	(29,847)	$	(637,057)	$	(5,427)	$	(54,878)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PROS Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization and Nature of Operations

PROS Holdings, Inc., a Delaware corporation, through its operating subsidiaries (collectively, the "Company"), provides solutions that optimize shopping and selling experiences. PROS solutions leverage artificial intelligence ("AI"), self-learning and automation to ensure that every transactional experience is fast, frictionless and distinctive for every shopper, supporting both business-to-business ("B2B") and business-to-consumer ("B2C") companies across industry verticals. Companies can use these selling, pricing, revenue optimization, distribution and retail, and digital offer marketing solutions to assess their market environments in real time to deliver customized prices and offers. The Company's solutions enable their customers to provide the buyers of their products the ability to move fluidly from one sales channel to another, whether direct, partner, online, mobile or other emerging channels, each with a personalized experience regardless of which channel is used. The Company's decades of data science and AI expertise are infused into its solutions and are designed to reduce time and complexity through actionable intelligence.

2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial reporting and applicable quarterly reporting regulations of the Securities and Exchange Commission ("SEC"). In management's opinion, the accompanying interim unaudited condensed consolidated financial statements include all adjustments necessary for a fair statement of the financial position of the Company as of September 30, 2024, the results of operations for the three and nine months ended September 30, 2024 and 2023, cash flows for the nine months ended September 30, 2024 and 2023, and stockholders' (deficit) equity for the three and nine months ended September 30, 2024 and 2023.

Certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 ("Annual Report") filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2023 was derived from the Company's audited consolidated financial statements but does not include all disclosures required under GAAP.

Changes in accounting policies

There have been no material changes in the Company’s significant accounting policies and their application as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Fair value measurement

The Company's financial assets that are included in cash and cash equivalents and that are measured at fair value on a recurring basis consisted of $131.2 million and $153.2 million at September 30, 2024 and December 31, 2023, respectively, and were invested in treasury funds, money market funds, and interest-bearing deposits in banks. The fair value of those investments is determined based on quoted market prices, which represents level 1 in the fair value hierarchy as defined by ASC 820. See Note 8 for the fair value measurement of the convertible notes.

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Deferred costs

Sales commissions earned by the Company's sales representatives are considered incremental and recoverable costs of obtaining a customer contract. Sales commissions are deferred and amortized on a straight-line basis over the period of benefit, which the Company has determined to be five to eight years. The Company determined the period of benefit by taking into consideration its customer contracts, expected renewals of those customer contracts (as the Company currently does not pay an incremental sales commission for renewals), the Company's technology and other factors. The Company also defers amounts earned by employees other than sales representatives who earn incentive payments under compensation plans also tied to the value of customer contracts acquired. Deferred costs were $15.1 million as of September 30, 2024 and December 31, 2023. Amortization expense for the deferred costs was $1.1 million and $1.4 million for the three months ended September 30, 2024 and 2023, respectively, and $3.6 million and $4.4 million for the nine months ended September 30, 2024 and 2023, respectively. Amortization of deferred costs is included in selling and marketing expense in the accompanying unaudited condensed consolidated statements of comprehensive income (loss).

Recently issued accounting pronouncements not yet adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and other segment items on an annual and interim basis. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The ASU is to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding income taxes paid by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024, and early adoption is permitted. The new standard is to be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.

With the exception of the new standards discussed above, there have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended September 30, 2024, as compared to the recent accounting pronouncements described in the Company's Annual Report, that are of significance or potential significance to the Company.

3. Deferred Revenue and Performance Obligations

Deferred revenue

For the three months ended September 30, 2024 and 2023, the Company recognized approximately $54.9 million and $52.5 million, respectively, and for the nine months ended September 30, 2024 and 2023, the Company recognized approximately $110.0 million and $100.7 million, respectively, of revenue that was included in the deferred revenue balances at the beginning of the respective periods and related to subscription, maintenance and support, and services.

Performance obligations

As of September 30, 2024, the Company expects to recognize approximately $429.3 million of revenue from remaining performance obligations. The Company expects, based on the terms of the related underlying contractual arrangements, to recognize revenue on approximately $231.0 million of these performance obligations over the next 12 months, with the balance recognized thereafter. Remaining performance obligations represent contractually committed revenue yet to be recognized, which includes deferred revenue and unbilled amounts that will be recognized as revenue in future periods.

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4. Disaggregation of Revenue

Revenue by geography

The geographic information in the table below is presented for the three and nine months ended September 30, 2024 and 2023. The Company categorizes geographic revenues based on the location of the customer's headquarters.


	Three Months Ended September 30,								Nine Months Ended September 30,
	2024				2023				2024				2023
(in thousands)	Revenue		Percent		Revenue		Percent		Revenue		Percent		Revenue		Percent
United States of America	$	29,251	35	%	$	26,925	35	%	$	84,174	34	%	$	80,381	36	%
Europe	25,391		31	%	25,691		33	%	76,897		31	%	73,388		32	%
The rest of the world	28,060		34	%	24,634		32	%	84,332		35	%	72,455		32	%
Total revenue	$	82,702	100	%	$	77,250	100	%	$	245,403	100	%	$	226,224	100	%

5. Leases

The Company has operating leases for data centers, computer infrastructure, corporate offices and certain equipment. These leases have remaining lease terms ranging from 1 year to 9 years. Some of these leases include options to extend for up to 15 years, and some include options to terminate within 1 year.

As of September 30, 2024, the Company did not have any finance leases.

Supplemental cash flow information related to leases was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cash paid for operating lease liabilities	$	1,790	$	1,859	$	5,805	$	5,767
Right-of-use asset obtained in exchange for operating lease liability	$	229	$	86	$	2,369	$	365

In February 2024, an existing operating lease was modified due to a reduction of square footage at one of the Company's offices. The result of this modification was an increase in the related right-of-use asset of $2.1 million, an increase in the corresponding lease liability of $1.4 million, and a noncash gain of $0.7 million recorded as a reduction of the lease cost within cost of revenue and operating expenses. In connection with the lease modification, the Company also recorded a loss on disposal of assets of $0.8 million which is included in other income (expense), net in the accompanying unaudited condensed consolidated statements of comprehensive income (loss).

In January 2023, an existing operating lease was modified due to a change in future payments. The result of the 2023 modification was a decrease in the related right-of-use asset and corresponding lease liability of $1.0 million.

As of September 30, 2024, maturities of lease liabilities were as follows (in thousands):


Year Ending December 31,	Amount
Remaining 2024	$	1,948
2025	4,136
2026	3,914
2027	3,809
2028	3,862
2029	3,913
Thereafter	14,486
Total operating lease payments	36,068
Less: Imputed interest	(7,996)

Total operating lease liabilities	$	28,072

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6. Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2024		2023		2024		2023
Numerator:
Net income (loss)	$	235	$	(13,868)	$	(18,508)	$	(46,159)
Denominator:
Weighted average shares (basic)	47,231		46,225		47,038		46,084
Dilutive effect of potential common shares	107		—		—		—
Weighted average shares (diluted)	47,338		46,225		47,038		46,084
Basic income (loss) per share	$	—	$	(0.30)	$	(0.39)	$	(1.00)
Diluted income (loss) per share	$	—	$	(0.30)	$	(0.39)	$	(1.00)

Dilutive potential common shares consist of shares issuable upon the vesting of restricted stock units ("RSUs") and market stock units ("MSUs"). Potential common shares determined to be antidilutive and excluded from diluted weighted average shares were approximately 2.5 million and 1.4 million for the three months ended September 30, 2024 and 2023, respectively, and 1.9 million for the nine months ended September 30, 2024 and 2023. In addition, potential common shares related to the convertible notes determined to be antidilutive and excluded from diluted weighted average shares were 6.4 million and 5.8 million for the three months ended September 30, 2024 and 2023, respectively, and 6.5 million and 5.8 million for the nine months ended September 30, 2024 and 2023, respectively.

7. Noncash Share-based Compensation

The Company's 2017 Equity Incentive Plan (as amended and restated, the "2017 Stock Plan") had an aggregate authorized limit of 7,650,000 shares for issuance. In May 2023, the Company's stockholders approved an amendment to the 2017 Stock Plan increasing the aggregate amount of shares available for issuance to 10,550,000. As of September 30, 2024, 3,380,014 shares remain available for issuance under the 2017 Stock Plan.

The following table presents the number of shares or units outstanding for each award type as of September 30, 2024 and December 31, 2023 (in thousands):


Award type	September 30, 2024	December 31, 2023

Restricted stock units (time-based)	2,731	2,767



Market stock units	439	358

During the three months ended September 30, 2024, the Company granted 77,191 RSUs (time-based) with a weighted average grant-date fair value of $19.90 per share.

During the nine months ended September 30, 2024, the Company granted 1,410,809 RSUs (time-based) with a weighted average grant-date fair value of $34.48 per share. The Company also granted 179,681 MSUs with a weighted average grant-date fair value of $39.95 to certain executive employees during the nine months ended September 30, 2024. These MSUs vest on January 31, 2027, and the actual number of MSUs that will be eligible to vest is based on the total stockholder return of the Company relative to the total stockholder return of the Index over the performance period, as defined by each award's plan documents or individual award agreements. The maximum number of shares issuable upon vesting is 200% of the MSUs initially granted.

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The Company estimates the fair value of MSUs on the date of grant using a Monte Carlo simulation model. The weighted average assumptions used to value the MSUs granted during the nine months ended September 30, 2024 were as follows:


	Nine Months Ended September 30, 2024
Volatility	51.24	%
Risk-free interest rate	4.14	%
Expected award life in years	2.90
Dividend yield	—	%

Share-based compensation expense is allocated to expense categories in the unaudited condensed consolidated statements of comprehensive income (loss). The following table summarizes share-based compensation expense included in the Company's unaudited condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Share-based compensation:
Cost of revenue	$	1,177	$	1,033	$	3,396	$	2,850
Operating expenses:
Selling and marketing (1)	675		2,992		6,740		9,023
Research and development (1)	898		2,817		6,543		7,840
General and administrative	4,521		4,091		13,540		11,876
Total included in operating expenses	6,094		9,900		26,823		28,739
Total share-based compensation expense	$	7,271	$	10,933	$	30,219	$	31,589

(1) During the three months ended September 30, 2024, both sales and marketing expense, and research and development expense included a $1.3 million reversal of noncash share-based compensation expense, as certain performance criteria as a condition to vest is not expected to be met.

At September 30, 2024, the Company had an estimated $78.2 million of total unrecognized compensation costs related to share-based compensation arrangements. These costs will be recognized over a weighted average period of 2.7 years.

The Company's Employee Stock Purchase Plan (as amended, the "ESPP") permits eligible employees to purchase Company shares on an after-tax basis in an amount between 1% and 10% of their annual pay: (i) on June 30 of each year at a 15% discount of the fair market value of the Company's common stock on January 1 or June 30, whichever is lower, and (ii) on December 31 of each year at a 15% discount of the fair market value of the Company's common stock on July 1 or December 31, whichever is lower. An employee may not purchase more than $5,000 in either of the six-month measurement periods described above or more than $10,000 annually. In May 2021, the Company's stockholders approved an amendment to the ESPP increasing the aggregate amount of shares available for issuance under the ESPP to 1,000,000. During the three and nine months ended September 30, 2024, the Company issued 43,298 and 83,706 shares under the ESPP, respectively. As of September 30, 2024, 199,411 shares remain authorized and available for issuance under the ESPP. As of September 30, 2024, the Company held approximately $0.7 million on behalf of employees for future purchases under the ESPP, and this amount was recorded in accrued payroll and other employee benefits in the Company's unaudited condensed consolidated balance sheet.

8. Convertible Senior Notes

The following is a summary of the Company's convertible senior notes as of September 30, 2024 (in thousands):


	Date of Issuance	Unpaid Principal Balance		Contractual Interest Rates



1% Convertible Notes due in 2024 ("2024 Notes")	May 2019	$	—		1%
2.25% Convertible Notes due in 2027 ("2027 Notes")	September 2020 and October 2023	$	266,816		2.25%
Total Notes		$	266,816

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The 2027 and 2024 Notes (collectively, the "Notes") are general unsecured obligations and rank senior in right of payment to all of the Company's indebtedness that is expressly subordinated in right of payment to the Notes, rank equally in right of payment with all of the Company's existing and future liabilities that are not so subordinated, are effectively junior to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all indebtedness and other liabilities of the Company's subsidiaries (including trade payables but excluding intercompany obligations owed to the Company or its subsidiaries).

The 2027 Notes mature on September 15, 2027, unless redeemed or converted in accordance with their terms prior to such date. The 2024 Notes matured on May 15, 2024 and the Company repaid the outstanding principal balance of $21.7 million during the second quarter of 2024.

Interest related to the 2027 Notes is payable semi-annually in arrears in cash on March 15 and September 15 of each year, beginning on March 15, 2021. Interest related to the 2024 Notes was payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2019.

Each $1,000 of principal of the 2027 Notes will initially be convertible into 23.9137 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $41.82 per share and is subject to adjustment upon the occurrence of certain specified events. Each $1,000 of principal of the 2024 Notes was initially to be convertible into 15.1394 shares of the Company’s common stock, which was equivalent to an initial conversion price of approximately $66.05 per share and was subject to adjustment upon the occurrence of certain specified events.

On August 23, 2023, the Company entered into legally binding exchange agreements with a limited number of existing holders of the 2024 Notes to exchange approximately $122.0 million aggregate principal amount of the existing 2024 Notes for a principal amount of the 2027 Notes at an exchange ratio to be determined based on the daily volume-weighted average trading price of the Company’s common stock over a thirty-day trading period beginning August 24, 2023 (such exchange transactions, the “Exchange”). On October 10, 2023, the Company settled the exchange agreements for the exchange of $122.0 million aggregate principal amount of its outstanding 2024 Notes for newly issued $116.8 million aggregate principal amount of its outstanding 2027 Notes. Following the settlement of the Exchange, $21.7 million in aggregate principal amount of the 2024 Notes and $266.8 million in aggregate principal amount of the 2027 Notes remained outstanding with terms unchanged. The 2027 Notes issued in the Exchange constitute a further issuance of, and form a single series and will be fungible with, the existing 2027 Notes.

Although the Exchange was not completed as of September 30, 2023, the Company determined that, from an accounting perspective, the Exchange was a legally binding restructuring of the debt that represented a substantial modification of the terms of the 2024 Notes subject to the Exchange, and therefore was required to be accounted for as an extinguishment transaction. This resulted in a $1.8 million loss on debt extinguishment recorded during the three months ended September 30, 2023 which was included in other income (expense), net in the unaudited condensed consolidated statements of comprehensive income (loss). In addition, the Company concluded that the variability in the principal amount of the 2027 Notes to be issued in connection with the Exchange due to changes in stock price was a feature embedded in the restructured debt that was required to be accounted for as an embedded derivative and remeasured to fair value until settlement in October 2023. During the three months ended September 30, 2023, the Company recorded a derivative loss of $3.8 million which was included in other income (expense), net in the unaudited condensed consolidated statements of comprehensive income (loss). The estimated fair value was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including the Company's stock price, interest rates and the value of the 2027 Notes, which represented level 2 in the fair value hierarchy.

As of September 30, 2024, the 2027 Notes are not yet convertible and their remaining term is approximately 36 months.

As of September 30, 2024 and December 31, 2023, the fair value of the outstanding principal amount of the Notes in the aggregate was $239.4 million and $320.5 million, respectively. The estimated fair value was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including the Company's stock price and interest rates, which represents level 2 in the fair value hierarchy.

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The Notes consist of the following (in thousands):


	September 30, 2024		December 31, 2023

Principal	$	266,816	$	288,529
Debt premium, net of amortization	7,758		9,776
Debt issuance costs, net of amortization	(3,401)		(4,313)
Net carrying amount	$	271,173	$	293,992

The following table sets forth total interest expense recognized related to the Notes (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Coupon interest	$	1,501	$	1,203	$	4,576	$	3,609
Amortization of debt issuance costs	289		294		913		1,040
Amortization of debt premium	(669)		—		(2,018)		—
Total	$	1,121	$	1,497	$	3,471	$	4,649

Capped call transactions

In September 2020 and in May 2019, in connection with the offering of the 2027 and 2024 Notes, respectively, the Company entered into privately negotiated capped call transactions (collectively, the "Capped Call") with certain option counterparties. The Capped Call transactions cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock initially underlying the Notes, at a strike price that corresponds to the initial conversion price of the Notes, also subject to adjustment, and are exercisable upon conversion of the Notes. The Capped Call transactions are intended to reduce potential dilution to the Company’s common stock and/or offset any cash payments the Company will be required to make in excess of the principal amounts upon any conversion of the Notes, and to effectively increase the overall conversion price of the 2027 Notes from $41.82 to $78.90 per share and, for the 2024 Notes, from $66.05 to $101.62 per share. As the Capped Call transactions meet certain accounting criteria, they are recorded in stockholders’ (deficit) equity and are not accounted for as derivatives. The cost of the Capped Call was $25.3 million and $16.4 million for the 2027 and 2024 Notes, respectively, and was recorded as part of additional paid-in capital. On May 15, 2024, the 2024 Notes matured and the Capped Call associated with the 2024 Notes expired unexercised. The expiration of the 2024 Notes Capped Call did not have an impact on the unaudited condensed consolidated financial statements.

In August 2023, in connection with the Exchange, the Company entered into additional capped call transactions (the “Additional Capped Call”) with certain option counterparties. The Company agreed to pay a premium to the option counterparties for the Additional Capped Call for an amount to be determined based on the volume-weighted average trading price of the Company’s common stock over a thirty-day reference period beginning August 24, 2023. The conversion price of the Additional Capped Call is the same as the 2027 Notes Capped Call above. Initial funding of the Additional Capped Call occurred in the third quarter of 2023. The Additional Capped Call had a deferred premium component indexed to the Company's stock price and required to be settled in cash, and therefore the Additional Capped Call was a derivative instrument that, at inception, did not meet the qualifications for equity classification. During the three months ended September 30, 2023, the Company recorded a derivative loss of $0.5 million, which was included in other income (expense), net in the unaudited condensed consolidated statements of comprehensive income (loss). The estimated fair value was determined based on valuation methods using inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including the Company's stock price and interest rates, and other unobservable inputs such as volatility, which represented level 3 in the fair value hierarchy. On October 10, 2023, the Company settled the deferred premium on the Additional Capped Call resulting in a final value of $22.2 million. Once the deferred premium was settled, the instrument met the requirements for equity classification and the Company reclassified the Additional Capped Call to additional paid-in capital.

9. Commitments and Contingencies

Litigation

In the ordinary course of business, the Company regularly becomes involved in contract and other negotiations and, in more limited circumstances, becomes involved in legal proceedings, claims and litigation. The outcomes of these matters are inherently unpredictable. The Company is not currently involved in any outstanding litigation that it believes, individually or in the aggregate, will have a material adverse effect on its business, financial condition, results of operations or cash flows.

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Purchase commitments

The purchase commitments consist of agreements to purchase goods and services entered into the ordinary course of business, mainly related to infrastructure platforms, business technology software and support, and other services. The following table summarizes the non-cancelable unconditional purchase commitments for each of the next five years and thereafter as of September 30, 2024 (in thousands). The table below includes a multi-year contract with an obligation to spend $105.4 million by November 2026. The timing of the related payments presented below is based on management's estimate as to when those contractual commitments will be satisfied.


Year Ending December 31,	Amount
Remaining 2024	$	7,342
2025	50,287
2026	54,326
2027	1,146
2028	1,226
2029	1,226
Thereafter	—
Total	$	115,553

10. Severance and Other Related Costs

In the first quarter of 2023, the Company made certain organizational changes and incurred approximately zero and $3.6 million of severance, employee benefits, outplacement and related costs during the three and nine months ended September 30, 2023, respectively. These costs were recorded primarily as operating expenses in the unaudited condensed consolidated statements of comprehensive income (loss), mainly research and development, and sales and marketing. During the three and nine months ended September 30, 2023, cash payments of $0.1 million and $3.9 million, respectively, were recorded for the incurred costs. The Company settled the remaining accrued expense within 2023.

11. Other Income (Expense), Net

Other income (expense), net consisted of the following (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Interest income, net	1,507		2,086		4,825		5,867
Foreign currency (loss) gain, net	(170)		(238)		(934)		(700)
Loss on derivatives (1)	—		(4,343)		—		(4,343)
Loss on debt extinguishment (1)	—		(1,779)		—		(1,779)

Other (2)	194		(14)		(579)		(91)
Total other income (expense), net	$	1,531	$	(4,288)	$	3,312	$	(1,046)

(1) Losses were recognized in connection with the Notes Exchange, see Note 8.

(2) Includes loss on disposal of assets of $0.8 million related to a lease modification in the first quarter of 2024, see Note 5.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The terms “we,” “us,” “PROS” and “our” refer to PROS Holdings, Inc. and all of its subsidiaries that are consolidated in conformity with generally accepted accounting principles in the United States.

This management's discussion and analysis of financial condition and results of operations should be read along with the unaudited condensed consolidated financial statements and unaudited notes to unaudited condensed consolidated financial statements included in Part I, Item 1 ("Interim Condensed Consolidated Financial Statements (Unaudited)"), as well as the audited consolidated financial statements and notes to consolidated financial statements and management's discussion and analysis of financial condition and results of operations set forth in our Annual Report.

Q3 2024 Financial Overview

In the third quarter of 2024, we continued to grow our subscription revenue, increasing subscription revenue by 12% and 14% for the three and nine months ended September 30, 2024, respectively, as compared to the same periods in 2023. Total revenue increased by 7% and 8% for the three and nine months ended September 30, 2024, respectively, as compared to the same periods in 2023.

For the three and nine months ended September 30, 2024, recurring revenue (which consists of subscription revenue and maintenance and support revenue) accounted for 85% and 84% of total revenue, respectively. Our gross revenue retention rates remained above 93% during the twelve months ended September 30, 2024.

In the third quarter of 2024, we continued to improve on our profitability metrics. Our subscription gross profit margin was 78% for the three and nine months ended September 30, 2024 as compared to 76% and 75% for the three and nine months ended September 30, 2023, respectively.

Cash provided by operating activities was $3.4 million for the nine months ended September 30, 2024 as compared to cash used in operating activities of $4.0 million for the nine months ended September 30, 2023. The improvement was primarily due to a significant reduction in our net loss.

Factors Affecting Our Performance

Key factors and trends that have affected, and we believe will continue to affect, our operating results include:

•Geopolitical and Macroeconomic Environment. The companies we serve continue to navigate a challenging geopolitical, macroeconomic and regulatory environment impacted by geopolitical conflicts, including the Russia-Ukraine and Middle East conflicts, continued inflation, changing interest rates, supply chain disruptions, tight labor markets, pricing volatility, rapid new regulations, and other local and regional macroeconomic conditions. Uncertain macroeconomic, regulatory and industry conditions in the geographies where we operate create a continued challenging selling environment for enterprise technology deployments, including in some cases more complex customer review and approval cycles. For example, AI regulation, such as the EU AI Act, creates uncertainty and increases scrutiny by companies adopting AI, even where the AI utilized is compliant with applicable regulations. Despite this environment, we remain confident in our ability to help our customers drive profitable growth by optimizing their shopping and selling experiences. For example, pricing volatility and inflation can be meaningful catalysts for demand for our AI-driven price optimization and management solutions. We believe in the near term that new customers will continue to emphasize smaller scope initial purchases and fast return on their investments. We believe this emphasis will require solid execution by our teams to capitalize on these demand drivers.

•Profitable Growth as a Priority. We continue to focus on our multi-year profitability progress by investing in a disciplined manner to drive revenue growth, increase operating margins and cash from operations and support our long-term initiatives. This includes investments designed to accelerate our customer time-to-value, improve efficiency and operations, further leveraging AI in our business operations, provide out-of-the-box integration with third-party commerce solutions and develop new applications and technologies. We expect our product development, sales and

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marketing, and general and administrative expenses as a percentage of total revenues will decrease long-term as we increase our revenues and continue to improve our profitability.

•Artificial Intelligence. The rapidly evolving market interest in generative AI and associated interest in all aspects of AI continues to drive businesses around the world and across industries to consider, invest in and use applications leveraging AI. For example, companies use AI to extract insights from their data, improve and customize their offerings, and drive process and operating efficiencies. Our AI-powered solutions enable buyers to move fluidly and with personalized experiences across our customers’ sales channels, and our digital offer marketing solutions help our customers drive their buyers directly into their direct selling channels. The pace of change across industries helps fuel demand for our solutions as businesses look to replace manual processes with AI. We have utilized AI in our solutions for years and our deep experience in AI continues to influence our category-leading solutions. For example, our current AI uses a neural network to improve prediction accuracy. We are also utilizing and considering new ways to expand AI use in our own business operations to drive efficiencies, improve knowledge management, gain insights and increase productivity.

•Travel Industry Dynamics. The travel industry continues to recover from the unprecedented disruption caused by the pandemic with global air passenger traffic exceeding pre-pandemic levels during 2024. Demand for air travel remains strong, and the airline industry is working to reestablish equilibrium in light of aircraft delivery issues and operational, cost and supply chain challenges. Airlines are increasingly recognizing the importance of competing for customers based on the total travel experience, while also improving financial performance. In some cases, this includes a renewed focus on revenue management systems. We believe our other solutions are also well-positioned, particularly as airlines look to enhance their digital marketing, booking capabilities, and ancillary offerings. However, operational challenges within the airline industry continue to impact sales cycles and approval processes.

•Digital Purchasing Driving Technology Adoption. We believe the long-term trends toward digital purchasing by both consumers and corporate buyers drives demand for technology that provides fast, frictionless and distinctive buying experiences across direct sales, partner, online, mobile and emerging channels. Buyers often prefer to conduct their own research rather than rely primarily on sales representatives, and tend to make purchases online once they have decided what to buy. For example, in the airline industry, the pandemic accelerated a long-term trend towards direct booking channels, and we anticipate airlines continuing to invest in technology to enhance their ability to capture a greater percentage of bookings and provide direct offers through their own channels such as their websites. We believe companies increasingly compete based on customer experience and must adopt technologies which power consistent offers and experiences across sales channels.

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Results of Operations

The following table sets forth certain items in our unaudited condensed consolidated statements of comprehensive income (loss) as a percentage of total revenues for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue:
Subscription	81	%	78	%	80	%	77	%
Maintenance and support	4		6		4		7
Total subscription, maintenance and support	85		84		84		83

Services	15		16		16		17
Total revenue	100		100		100		100
Cost of revenue:
Subscription	17		19		18		19
Maintenance and support	2		2		2		3
Total cost of subscription, maintenance and support	20		21		20		21

Services	15		16		15		17
Total cost of revenue	34		37		35		38
Gross profit	66		63		65		62
Operating Expenses:
Selling and marketing	24		26		27		31
Research and development	25		29		27		29
General and administrative	16		18		18		19


Total operating expenses	66		73		72		79
Convertible debt interest and amortization	(1)		(2)		(1)		(2)
Other income (expense), net	2		(6)		1		—
Income (loss) before income tax provision	1		(18)		(7)		(20)
Income tax provision	—		—		—		—
Net income (loss)	—	%	(18)	%	(8)	%	(20)	%

Revenue:


	Three Months Ended September 30,				Variance				Nine Months Ended September 30,				Variance
(Dollars in thousands)	2024		2023		$		%		2024		2023		$		%
Subscription	$	67,068	$	59,987	$	7,081	12	%	$	197,017	$	173,260	$	23,757	14	%
Maintenance and support	3,361		4,693		(1,332)		(28)	%	10,341		15,498		(5,157)		(33)	%
Total subscription, maintenance and support	70,429		64,680		5,749		9	%	207,358		188,758		18,600		10	%
Services	12,273		12,570		(297)		(2)	%	38,045		37,466		579		2	%
Total revenue	$	82,702	$	77,250	$	5,452	7	%	$	245,403	$	226,224	$	19,179	8	%

Subscription revenue. Subscription revenue increased primarily due to an increase in new and existing customer subscription contracts.

Maintenance and support revenue. Maintenance and support revenue decreased primarily as a result of existing maintenance customers migrating to our cloud solutions and, to a lesser extent, customer maintenance churn. We expect maintenance revenue to continue to decline as we continue to migrate maintenance customers to our cloud solutions.

Services revenue. During the three months ended September 30, 2024, services revenue decreased mainly due to the completion of several large implementations during the third quarter of 2023. During the nine months ended September 30, 2024, services revenue increased primarily as a result of higher sales of professional services to our existing customers.

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Services revenue varies from period to period depending on different factors, including the level of professional services required to implement our solutions, which in turn can vary depending on the mix of new versus existing customer software solution sales. Services revenue is also impacted by the timing of services revenue recognition on certain subscription contracts and efficiencies in our solutions implementations requiring less professional services during a particular period.

Cost of revenue and gross profit:


	Three Months Ended September 30,				Variance				Nine Months Ended September 30,				Variance
(Dollars in thousands)	2024		2023		$		%		2024		2023		$		%
Cost of subscription	$	14,470	$	14,510	$	(40)	—	%	$	43,653	$	42,662	$	991	2	%
Cost of maintenance and support	1,698		1,769		(71)		(4)	%	5,311		5,927		(616)		(10)	%
Total cost of subscription, maintenance and support	16,168		16,279		(111)		(1)	%	48,964		48,589		375		1	%

Cost of services	12,130		12,185		(55)		—	%	36,986		37,988		(1,002)		(3)	%
Total cost of revenue	28,298		28,464		(166)		(1)	%	85,950		86,577		(627)		(1)	%
Gross profit	$	54,404	$	48,786	$	5,618	12	%	$	159,453	$	139,647	$	19,806	14	%

Cost of subscription. Cost of subscription remained relatively unchanged for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. During the nine months ended September 30, 2024, cost of subscription increased primarily due to higher infrastructure costs to support the growth in our current subscription customer base and higher employee-related costs primarily due to an increase in headcount. These increases were partially offset by decreases in amortization expense for intangible assets and internal-use software expense. Our subscription gross profit percentages were 78% for the three and nine months ended September 30, 2024, and 76% and 75% for the three and nine months ended September 30, 2023, respectively.

Cost of maintenance and support. Cost of maintenance and support decreased mainly due to lower personnel costs as our maintenance customer base has decreased primarily due to migrations to our subscription solutions. Maintenance and support gross profit percentages were 49% for the three and nine months ended September 30, 2024, and 62% for the three and nine months ended September 30, 2023. Gross profit percentages decreased in 2024 as compared to prior year primarily due to lower maintenance and support revenue and the cost of maintenance and support being partially fixed.

Cost of services. Cost of services remained relatively unchanged for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. During the nine months ended September 30, 2024, cost of services decreased primarily due to a decrease in contract labor and other non-employee related costs. Services gross profit percentages were 1% and 3% for the three months ended September 30, 2024 and 2023, respectively, and 3% and (1)% for the nine months ended September 30, 2024 and 2023, respectively. Services gross profit percentages vary period to period depending on different factors, including the level of professional services required to implement our solutions, the utilization of our employees and our effective man-day rates.

Operating expenses:


	Three Months Ended September 30,				Variance				Nine Months Ended September 30,				Variance
(Dollars in thousands)	2024		2023		$		%		2024		2023		$		%
Selling and marketing	$	20,074	$	20,324	$	(250)	(1)	%	$	66,293	$	71,214	$	(4,921)	(7)	%
Research and development	21,081		22,205		(1,124)		(5)	%	67,280		66,343		937		1	%
General and administrative	13,218		14,099		(881)		(6)	%	43,335		42,083		1,252		3	%


Total operating expenses	$	54,373	$	56,628	$	(2,255)	(4)	%	$	176,908	$	179,640	$	(2,732)	(2)	%

Selling and marketing expenses. During the three months ended September 30, 2024, selling and marketing expenses decreased primarily due to a decrease in employee-related costs and was partially offset by increases in travel expenses, consulting and other non-employee related costs. Employee-related costs declined primarily due to a $1.3 million reversal of noncash share-based compensation expense, as certain performance criteria as a condition to vest is not expected to be met.

During the nine months ended September 30, 2024, selling and marketing expenses decreased primarily due to a decrease in employee-related costs. Employee-related costs declined primarily due to noncash share-based compensation expense, as the EveryMundo equity consideration vested in November 2023, and severance expenses incurred during the prior year. The decrease was partially offset by an increase in travel expenses.

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Research and development expenses. During the three months ended September 30, 2024, research and development expenses decreased primarily due to a decrease in employee-related costs. Employee-related costs declined primarily due to a $1.3 million reversal of noncash share-based compensation expense, as certain performance criteria as a condition to vest is not expected to be met.

During the nine months ended September 30, 2024, research and development expenses increased primarily due to higher headcount and an increase in contract labor, partially offset by a decrease in noncash share-based compensation expense as the EveryMundo equity consideration vested in November 2023.

General and administrative expenses. General and administrative expenses decreased primarily due to a one-time recoupment of professional fees of $0.8 million for the three months ended September 30, 2024 as compared to the same period in 2023. During the nine months ended September 30, 2024, general and administrative expenses increased primarily due to higher employee-related expenses, mainly noncash share-based compensation expense, and was partially offset by a one-time recoupment of professional fees.

Non-operating expenses:


	Three Months Ended September 30,				Variance				Nine Months Ended September 30,				Variance
(Dollars in thousands)	2024		2023		$		%		2024		2023		$		%
Convertible debt interest and amortization	$	(1,121)	$	(1,497)	$	376	(25)	%	$	(3,471)	$	(4,649)	$	1,178	(25)	%
Other income (expense), net	$	1,531	$	(4,288)	$	5,819	(136)	%	$	3,312	$	(1,046)	$	4,358	(417)	%

Convertible debt interest and amortization. Our convertible debt expense consists of coupon interest and amortization of debt premium and debt issuance costs attributable to our Notes. The decrease in expense was attributed to the exchange of approximately 85% of outstanding convertible notes due in May 2024 for newly issued convertible notes now due in September 2027. See Note 8 for more information.

Other income (expense), net. The change in other income (expense), net was primarily related to a $4.3 million derivative loss and a $1.8 million loss on debt extinguishment related to the convertible notes exchange recorded in the third quarter of 2023. See Note 8 for more information. The change also included a decrease due to lower interest income during the periods as well as the impact of foreign currency fluctuations.

Income tax provision:


	Three Months Ended September 30,						Variance				Nine Months Ended September 30,						Variance
(Dollars in thousands)	2024			2023			$		%		2024			2023			$		%
Effective tax rate	47		%	(2)		%	n/a		n/a		(5)		%	(1)		%	n/a		n/a
Income tax provision	$	206		$	241		$	(35)	(15)	%	$	894		$	471		$	423	90	%

Income tax provision. The tax provision for the three and nine months ended September 30, 2024 included both foreign income and withholding taxes. No tax benefit was recognized on jurisdictions with a projected loss for the year due to the valuation allowances on our deferred tax assets.

Our effective tax rate was 47% and (2)% for the three months ended September 30, 2024 and 2023, respectively, and (5)% and (1)% for the nine months ended September 30, 2024 and 2023, respectively. The income tax rate varies from the 21% federal statutory rate primarily due to the valuation allowances on our deferred tax assets. While our expected tax rate would be 0% due to the full valuation allowance on our deferred tax assets, the income tax provision and related effective tax rates was due to foreign income and withholding taxes.

Jurisdictions with a projected loss for the year where no tax benefit can be recognized due to the valuation allowances on our deferred tax assets are excluded from the estimated annual federal effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections.

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Liquidity and Capital Resources

At September 30, 2024, we had $140.6 million of cash and cash equivalents and $44.2 million of working capital as compared to $168.7 million of cash and cash equivalents and $37.3 million of working capital at December 31, 2023. The decrease in cash and cash equivalents was primarily related to the repayment of the outstanding principal of our 2024 Notes of $21.7 million, which matured in May 2024.

Our principal sources of liquidity are our cash and cash equivalents, cash flows generated from operations and potential borrowings under our $50 million credit agreement (the "Credit Agreement"). In addition, we could access capital markets to supplement our liquidity position. Our material drivers or variants of operating cash flow are net income (loss) and the timing of invoicing and cash collections from our customers. Our operating cash flows are also impacted by the timing of payments to our vendors and the payments of other liabilities.

We believe we will have adequate liquidity and capital resources to meet our operational requirements, anticipated capital expenditures, and coupon interest of our 2027 Notes for the next twelve months. Our future working capital requirements depend on many factors, including the operations of our existing business, growth of our customer subscription services, future acquisitions we might undertake, expansion into complementary businesses, timing of adoption and implementation of our solutions and customer churn. Capital markets have tightened in response to the macroeconomic environment making new financing more difficult and/or expensive and we may not be able to obtain such financing on terms acceptable to us or at all.

The following table presents key components of our unaudited condensed consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023:


	Nine Months Ended September 30,
(Dollars in thousands)	2024		2023
Net cash provided by (used in) operating activities	$	3,370	$	(3,967)
Net cash used in investing activities	(840)		(2,281)
Net cash used in financing activities	(30,930)		(28,269)
Effect of foreign currency rates on cash	217		(30)
Net change in cash, cash equivalents and restricted cash	$	(28,183)	$	(34,547)

Operating activities

Net cash provided by operating activities for the nine months ended September 30, 2024 was $3.4 million. The improvement was primarily due to a significant reduction in our net loss.

Investing activities

Net cash used in investing activities for the nine months ended September 30, 2024 was $0.8 million. The decrease was mainly due to higher capital expenditures in 2023, primarily related to a third-party software license renewal.

Financing activities

Net cash used in financing activities for the nine months ended September 30, 2024 was $30.9 million. The increase of $2.7 million year-over-year was primarily due to the $21.7 million repayment of our 2024 Notes as they matured in May 2024 and higher tax withholding payments of $4.5 million related to the vesting of employee share-based awards. The increase was partially offset by decreases attributable to a $22.8 million purchase of capped call in 2023 in connection with the convertible notes exchange, and $0.8 million of debt issuance costs associated with the execution of our Credit Agreement in 2023.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material. We do not have any relationships with unconsolidated entities or financial partnerships, such as variable interest entities, that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

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Contractual Obligations and Commitments

See Note 9 above for information on our contractual obligations and commitments.

Credit facility

As of September 30, 2024, there were no outstanding borrowings under our Credit Agreement. As of September 30, 2024, $0.5 million of unamortized debt issuance costs related to the Credit Agreement is included in prepaid and other current assets and other assets, noncurrent in the unaudited condensed consolidated balance sheets. For the three and nine months ended September 30, 2024, we recorded an insignificant amount of amortization of debt issuance costs which is included in other income (expense), net in the unaudited condensed consolidated statements of comprehensive income (loss).

The Credit Agreement also has a depository condition which requires us to maintain a cash balance of at least $10.0 million with the administrative agent throughout the term of the Credit Agreement. This amount has been included in restricted cash in the unaudited condensed consolidated balance sheets.

Recent Accounting Pronouncements

See "Recently issued accounting pronouncements not yet adopted" in Note 2 above for discussion of recent accounting pronouncements including the respective expected dates of adoption, if any.

Critical accounting policies and estimates

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. Actual results could differ from those estimates. The complexity and judgment required in our estimation process, as well as issues related to the assumptions, risks and uncertainties inherent in determining the nature and timing of satisfaction of performance obligations and determining the standalone selling price of performance obligations, affect the amounts of revenue, expenses, unbilled receivables and deferred revenue. Estimates are also used for, but not limited to, receivables, allowance for credit losses, operating lease right-of-use assets and operating lease liabilities, useful lives of assets, depreciation, income taxes and deferred tax asset valuation, valuation of stock awards, other current liabilities and accrued liabilities. Numerous internal and external factors can affect estimates. Our critical accounting policies related to the estimates and judgments are discussed in our Annual Report under management's discussion and analysis of financial condition and results of operations.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposure to market risks from those disclosed in Part II, Item 7A, of our Annual Report.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) as of September 30, 2024. Based on our evaluation of our disclosure controls and procedures as of September 30, 2024, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are a party to legal proceedings and claims arising in the ordinary course of business. We are not currently aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition, results of operations or cash flows.

ITEM 1A. RISK FACTORS

Except as set forth below, there have been no material changes in the Company's risk factors from those disclosed in Part I, Item 1A, of our Annual Report.

We depend on third-party data centers, software, data and other unrelated service providers and any disruption from such third-party providers could impair the delivery of our service and negatively affect our business.

Our cloud products are dependent upon third-party hardware, software and cloud hosting vendors, including Microsoft Azure, IBM Softlayer and AWS, all of which must interoperate for end users to achieve their computing goals. We utilize third-party data center hosting facilities, cloud platform providers and other service providers to host and deliver our subscription services as well as for our own business operations. We host our cloud products from data centers in a variety of countries. While we control and generally have exclusive access to our servers and all of the components of our network that are located in our external data centers, we do not control the operation of these facilities and they are vulnerable to damage or interruption from hurricanes, earthquakes, floods, fires, power loss, telecommunications and human failures and similar events. They may also be subject to Security Incidents, break-ins, sabotage, intentional acts of vandalism and similar misconduct. Despite our failover capabilities, standard protocols and other precautions, the occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate notice or other unanticipated problems at these facilities could result in lengthy interruptions in our service. In addition, disruptions to the supply chain necessary to maintain these third-party systems or to run our business could impact our service availability and performance. These providers have no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew these agreements on commercially reasonable terms or at all, or if one of our data center operators is acquired, we may be required to transfer our servers and other infrastructure to new data center facilities, and we may incur significant costs and possible service interruption in connection with doing so.

Certain of our applications are essential to our customers’ ability to quote, price, and/or sell their products and services. Interruption in our service may affect the availability, accuracy or timeliness of quotes, pricing or other information and could require us to issue service credits to our customers, damage our reputation, cause our customers to terminate their use of our solutions, require us to indemnify our customers against certain losses, and prevent us from gaining additional business from current or future customers. In addition, certain of our applications require access to our customers' data which may be held by third parties, some of whom are, or may become, our competitors. For example, many of our travel industry products rely upon access to airline data held by large airline IT providers which compete against certain of our airline products. Certain of these competitors have in the past, and may again in the future, make it difficult for our airline customers to access their data in a timely and/or cost-effective manner.

We have experienced, and may experience in the future, system disruptions, outages and other performance problems due to third-party data centers, software, data and other service providers, many of which are shared by other SaaS providers. These disruptions could impair the delivery of our service and negatively affect our business, damage our reputation, negatively impact our future sales and/or cash flows and lead to legal liability and other costs, and the full impact of which may not be immediately known.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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ITEM 4. MINE SAFETY DISCLOSURE

None.

ITEM 5. OTHER INFORMATION

Securities Trading Plans of Directors and Executive Officers

During the three months ended September 30, 2024, the following directors and officers, as defined in Rule 16a-1(f), adopted a "Rule 10b5-1 trading arrangement" as defined in Regulation S-K Item 408(a):

On September 11, 2024, Scott Cook, our Chief Accounting Officer, adopted a Rule 10b5-1 trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). The plan provides for the sale of up to 15,000 shares of our common stock. The plan will terminate on December 31, 2025, subject to early termination for certain specified events set forth in the plan, including if all transactions under the trading plan are completed.

No other director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K during the three months ended September 30, 2024.

ITEM 6. EXHIBITS

Index to Exhibits

Provided

Incorporated by Reference

Exhibit No.

Description

Herewith

Form

Filing Date

31.1

Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a).

31.2

Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/ 15d-14(a).

32.1*

Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

Exhibit No.

Description

101.INS

XBRL Instance Document.

101.SCH

XBRL Taxonomy Extension Schema Document.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.


*			This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, or otherwise subject to the liability of that Section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		PROS HOLDINGS, INC.

October 29, 2024	By:	/s/ Andres Reiner
		Andres Reiner
		President and Chief Executive Officer (Principal Executive Officer)

October 29, 2024	By:	/s/ Stefan Schulz
		Stefan Schulz
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Andres Reiner, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PROS Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


October 29, 2024						/s/ Andres Reiner
						Andres Reiner
						President and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stefan Schulz, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PROS Holdings, Inc.;

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


October 29, 2024						/s/ Stefan Schulz
						Stefan Schulz
						Executive Vice President and Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Andres Reiner, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of PROS Holdings, Inc., on Form 10-Q for the period ended September 30, 2024 fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PROS Holdings, Inc.


October 29, 2024						/s/ Andres Reiner
						Andres Reiner
						President and Chief Executive Officer

I, Stefan Schulz, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of PROS Holdings, Inc., on Form 10-Q for the period ended September 30, 2024 fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PROS Holdings, Inc.


October 29, 2024						/s/ Stefan Schulz
						Stefan Schulz
						Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to PROS Holdings, Inc. and will be retained by PROS Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. This certification "accompanies" the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Oct. 22, 2024
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-33554
Entity Registrant Name	PROS HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	76-0168604
Entity Address, Address Line One	3200 Kirby Drive, Suite 600
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77098
City Area Code	(713)
Local Phone Number	335-5151
Title of 12(b) Security	Common stock $0.001 par value per share
Trading Symbol	PRO
Security Exchange Name	NYSE
Entity Central Index Key	0001392972
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		47,305,965
Former Address [Member]
Entity Information [Line Items]
Entity Address, Address Line One
Entity Address, City or Town
Entity Address, State or Province
Entity Address, Postal Zip Code

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 140,564	$ 168,747
Trade and Other Receivables, Net, Current	48,225	49,058
Deferred Costs, Current	4,448	4,856
Prepaid and other current assets	10,782	12,013
Total current assets	204,019	234,674
Restricted Cash, Noncurrent	10,000	10,000
Property and equipment, net	20,391	23,051
Operating Lease, Right-of-Use Asset	13,770	14,801
Deferred Costs, Noncurrent	10,690	10,292
Intangible Assets, Net (Excluding Goodwill)	7,997	11,678
Goodwill	107,970	107,860
Other long term assets, net	9,332	9,477
Total assets	384,169	421,833
Current liabilities:
Accounts payable	5,270	3,034
Accrued liabilities	13,603	13,257
Accrued payroll and other employee benefits	22,831	32,762
Operating Lease, Liability, Current	3,590	5,655
Deferred Revenue, Current	114,538	120,955
Convertible Debt, Current	0	21,668
Total current liabilities	159,832	197,331
Long-term deferred revenue	2,675	3,669
Convertible Debt, Noncurrent	271,173	272,324
Operating Lease, Liability, Noncurrent	24,482	25,118
Other Liabilities, Noncurrent	1,231	1,264
Total liabilities	459,393	499,706
Commitments and contingencies (see Note 9)
Stockholders' equity:
Preferred Stock, Value, Issued	0	0
Common Stock, Value, Issued	52	51
Additional paid-in capital	625,085	604,084
Treasury Stock, Value	(29,847)	(29,847)
Retained Earnings (Accumulated Deficit)	(665,760)	(647,252)
Accumulated Other Comprehensive Income (Loss), Net of Tax	(4,754)	(4,909)
Total stockholders' equity	(75,224)	(77,873)
Total liabilities and stockholders' equity	$ 384,169	$ 421,833
Preferred stock - shares authorized	5,000,000	5,000,000
Preferred stock - par value	$ 0.001	$ 0.001
Preferred stock - shares issued	0	0
Common stock - shares authorized	75,000,000	75,000,000
Common stock - par value	$ 0.001	$ 0.001
Treasury Stock, Common, Shares	4,680,723	4,680,723

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Allowance for bad debts	$ 690,000	$ 574,000
Preferred stock - par value	$ 0.001	$ 0.001
Preferred stock - shares authorized	5,000,000	5,000,000
Preferred stock - shares issued	0	0
Common stock - par value	$ 0.001	$ 0.001
Common stock - shares authorized	75,000,000	75,000,000
Common stock - shares issued	51,953,232	51,184,584
Common stock - shares outstanding	47,272,509	46,503,861
Treasury Stock, Common, Shares	4,680,723	4,680,723

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue from Contract with Customer, Including Assessed Tax	$ 82,702	$ 77,250	$ 245,403	$ 226,224
Cost of Goods and Services Sold	28,298	28,464	85,950	86,577
Gross Profit	54,404	48,786	159,453	139,647
Operating Expenses
Selling and Marketing Expense	20,074	20,324	66,293	71,214
Research and development	21,081	22,205	67,280	66,343
General and Administrative Expense	13,218	14,099	43,335	42,083
Income (loss) from operations	31	(7,842)	(17,455)	(39,993)
Other income (expense):
Convertible debt interest and amortization	(1,121)	(1,497)	(3,471)	(4,649)
Nonoperating Income (Expense)	1,531	(4,288)	3,312	(1,046)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total	441	(13,627)	(17,614)	(45,688)
Income tax provision (benefit)	206	241	894	471
Net income (loss)	$ 235	$ (13,868)	$ (18,508)	$ (46,159)
Income (Loss) from Continuing Operations, Basic and Diluted	$ 0	$ (0.30)	$ (0.39)	$ (1.00)
Weighted average number of shares:
Weighted Average Number of Shares Outstanding, Basic	47,231	46,225	47,038	46,084
Weighted Average Number of Shares Outstanding, Diluted	47,338	46,225	47,038	46,084
Other comprehensive income, net of tax:
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	$ 390	$ (359)	$ 155	$ (174)
Other comprehensive income (loss)	390	(359)	155	(174)
Comprehensive income (loss)	625	(14,227)	(18,353)	(46,333)
Accumulated Other Comprehensive Income, net of tax [Member]
Other comprehensive income, net of tax:
Other comprehensive income (loss)	390	(359)	155	(174)
Subscription, maintenance and support
Revenue from Contract with Customer, Including Assessed Tax	70,429	64,680	207,358	188,758
Cost of Goods and Services Sold	16,168	16,279	48,964	48,589
Subscription and Circulation [Member]
Revenue from Contract with Customer, Including Assessed Tax	67,068	59,987	197,017	173,260
Cost of Goods and Services Sold	14,470	14,510	43,653	42,662
Maintenance [Member]
Revenue from Contract with Customer, Including Assessed Tax	3,361	4,693	10,341	15,498
Cost of Goods and Services Sold	1,698	1,769	5,311	5,927
Service [Member]
Revenue from Contract with Customer, Including Assessed Tax	12,273	12,570	38,045	37,466
Cost of Goods and Services Sold	$ 12,130	$ 12,185	$ 36,986	$ 37,988

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Operating activities:
Net income (loss)	$ (18,508)	$ (46,159)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, Depletion and Amortization	6,371	8,301
Amortization of Financing Costs and Discounts	(896)	1,094
Share-based compensation	30,219	31,589
Provision for doubtful accounts	52	88
Gain on lease modification	(697)	0
Loss on Disposition of Other Assets	774	51
Derivative, Loss on Derivative	0	4,343
Loss on Extinguishment of Debt	0	1,779
Changes in operating assets and liabilities:
Accounts and unbilled receivables	788	(1,573)
Increase (Decrease) in Deferred Costs	10	704
Prepaid expenses and other assets	1,158	31
Increase (Decrease) in Other Noncurrent Assets and Liabilities, Net	(1,838)	(1,686)
Accounts payable	2,191	(3,375)
Accrued liabilities	1,087	1,489
Accrued payroll and other employee benefits	(9,906)	(242)
Deferred revenue	(7,435)	(401)
Net cash provided by (used in) operating activities	3,370	(3,967)
Investing activities:
Purchases of property and equipment	(669)	(2,168)
Payments to Acquire Other Productive Assets	(58)	0
Payments to Acquire Other Investments	(113)	(113)
Net cash provided by (used in) investing activities	(840)	(2,281)
Financing activities:
Proceeds from Stock Plans	2,079	2,170
Tax withholding related to net share settlement of restricted stock units	(11,296)	(6,831)
Payments of Debt Issuance Costs	0	(837)
Purchase of capped call	0	(22,771)
Repayment of convertible debt	(21,713)	0
Net cash provided by (used in) financing activities	(30,930)	(28,269)
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Continuing Operations	217	(30)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect	(28,183)	(34,547)
Cash, cash equivalents and restricted cash:
Beginning of period	178,747	203,627
End of period	150,564	169,080
Cash and cash equivalents	140,564	159,080
Restricted Cash, Noncurrent	10,000	10,000
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Total	150,564	169,080
Capital Expenditures Incurred but Not yet Paid	$ 237	$ 236

Condensed Consolidated Statement of Stockholders' Equity Statement - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock, Common [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income, net of tax [Member]
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2022		45,638,003
Stockholders' Equity Attributable to Parent- Beginning Balance at Dec. 31, 2022	$ (35,473)	$ 50	$ 590,475	$ (29,847)	$ (590,898)	$ (5,253)
Treasury Stock, Common, Shares, Beginning Balance at Dec. 31, 2022				4,680,723
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		506,398
Stock Issued During Period, Value, Restricted Stock Award, Gross	(6,831)	$ 1	(6,832)
Stock Issued During Period, Shares, Employee Stock Purchase Plans		104,008
Proceeds from Stock Plans	2,170		2,170
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	31,589		31,589
Other Comprehensive Income (Loss), Net of Tax	(174)					(174)
Net Income (Loss) Attributable to Parent	(46,159)				(46,159)
Stockholders' Equity Attributable to Parent- Ending Balance at Sep. 30, 2023	(54,878)	$ 51	617,402	$ (29,847)	(637,057)	(5,427)
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2023		46,248,409
Treasury Stock, Common, Shares, Ending Balance at Sep. 30, 2023				4,680,723
Common Stock, Shares, Outstanding, Beginning Balance at Jun. 30, 2023		46,140,736
Stockholders' Equity Attributable to Parent- Beginning Balance at Jun. 30, 2023	(51,454)	$ 51	606,599	$ (29,847)	(623,189)	(5,068)
Treasury Stock, Common, Shares, Beginning Balance at Jun. 30, 2023				4,680,723
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		58,814
Stock Issued During Period, Value, Restricted Stock Award, Gross	(1,163)		(1,163)
Stock Issued During Period, Shares, Employee Stock Purchase Plans		48,859
Proceeds from Stock Plans	1,033		1,033
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	10,933		10,933
Other Comprehensive Income (Loss), Net of Tax	(359)					(359)
Net Income (Loss) Attributable to Parent	(13,868)				(13,868)
Stockholders' Equity Attributable to Parent- Ending Balance at Sep. 30, 2023	$ (54,878)	$ 51	617,402	$ (29,847)	(637,057)	(5,427)
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2023		46,248,409
Treasury Stock, Common, Shares, Ending Balance at Sep. 30, 2023				4,680,723
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2023	46,503,861	46,503,861
Stockholders' Equity Attributable to Parent- Beginning Balance at Dec. 31, 2023	$ (77,873)	$ 51	604,084	$ (29,847)	(647,252)	(4,909)
Treasury Stock, Common, Shares, Beginning Balance at Dec. 31, 2023	4,680,723			4,680,723
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		684,942
Stock Issued During Period, Value, Restricted Stock Award, Gross	$ (11,296)	$ 1	(11,297)
Stock Issued During Period, Shares, Employee Stock Purchase Plans	83,706	83,706
Proceeds from Stock Plans	$ 2,079		2,079
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	30,219		30,219
Other Comprehensive Income (Loss), Net of Tax	155					155
Net Income (Loss) Attributable to Parent	(18,508)				(18,508)
Stockholders' Equity Attributable to Parent- Ending Balance at Sep. 30, 2024	$ (75,224)	$ 52	625,085	$ (29,847)	(665,760)	(4,754)
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2024	47,272,509	47,272,509
Treasury Stock, Common, Shares, Ending Balance at Sep. 30, 2024	4,680,723			4,680,723
Common Stock, Shares, Outstanding, Beginning Balance at Jun. 30, 2024		47,129,558
Stockholders' Equity Attributable to Parent- Beginning Balance at Jun. 30, 2024	$ (83,040)	$ 52	617,894	$ (29,847)	(665,995)	(5,144)
Treasury Stock, Common, Shares, Beginning Balance at Jun. 30, 2024				4,680,723
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		99,653
Stock Issued During Period, Value, Restricted Stock Award, Gross	$ (1,135)		(1,135)
Stock Issued During Period, Shares, Employee Stock Purchase Plans	43,298	43,298
Proceeds from Stock Plans	$ 1,055		1,055
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	7,271		7,271
Other Comprehensive Income (Loss), Net of Tax	390					390
Net Income (Loss) Attributable to Parent	235				235
Stockholders' Equity Attributable to Parent- Ending Balance at Sep. 30, 2024	$ (75,224)	$ 52	$ 625,085	$ (29,847)	$ (665,760)	$ (4,754)
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2024	47,272,509	47,272,509
Treasury Stock, Common, Shares, Ending Balance at Sep. 30, 2024	4,680,723			4,680,723

Organization and Nature of Operations	9 Months Ended
Organization and Nature of Operations	Sep. 30, 2024
Organization and Nature of Operations [Abstract]
Organization and nature of operations	Organization and Nature of Operations PROS Holdings, Inc., a Delaware corporation, through its operating subsidiaries (collectively, the "Company"), provides solutions that optimize shopping and selling experiences. PROS solutions leverage artificial intelligence ("AI"), self-learning and automation to ensure that every transactional experience is fast, frictionless and distinctive for every shopper, supporting both business-to-business ("B2B") and business-to-consumer ("B2C") companies across industry verticals. Companies can use these selling, pricing, revenue optimization, distribution and retail, and digital offer marketing solutions to assess their market environments in real time to deliver customized prices and offers. The Company's solutions enable their customers to provide the buyers of their products the ability to move fluidly from one sales channel to another, whether direct, partner, online, mobile or other emerging channels, each with a personalized experience regardless of which channel is used. The Company's decades of data science and AI expertise are infused into its solutions and are designed to reduce time and complexity through actionable intelligence.

Summary of Significant Accounting Policies (Notes)	9 Months Ended
Summary of Significant Accounting Policies (Notes)	Sep. 30, 2024
Accounting Policies [Abstract]
Significant Accounting Policies [Text Block]	Summary of Significant Accounting Policies Basis of presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial reporting and applicable quarterly reporting regulations of the Securities and Exchange Commission ("SEC"). In management's opinion, the accompanying interim unaudited condensed consolidated financial statements include all adjustments necessary for a fair statement of the financial position of the Company as of September 30, 2024, the results of operations for the three and nine months ended September 30, 2024 and 2023, cash flows for the nine months ended September 30, 2024 and 2023, and stockholders' (deficit) equity for the three and nine months ended September 30, 2024 and 2023. Certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 ("Annual Report") filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2023 was derived from the Company's audited consolidated financial statements but does not include all disclosures required under GAAP. Changes in accounting policies There have been no material changes in the Company’s significant accounting policies and their application as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Fair value measurement The Company's financial assets that are included in cash and cash equivalents and that are measured at fair value on a recurring basis consisted of $131.2 million and $153.2 million at September 30, 2024 and December 31, 2023, respectively, and were invested in treasury funds, money market funds, and interest-bearing deposits in banks. The fair value of those investments is determined based on quoted market prices, which represents level 1 in the fair value hierarchy as defined by ASC 820. See Note 8 for the fair value measurement of the convertible notes. Deferred costs Sales commissions earned by the Company's sales representatives are considered incremental and recoverable costs of obtaining a customer contract. Sales commissions are deferred and amortized on a straight-line basis over the period of benefit, which the Company has determined to be five to eight years. The Company determined the period of benefit by taking into consideration its customer contracts, expected renewals of those customer contracts (as the Company currently does not pay an incremental sales commission for renewals), the Company's technology and other factors. The Company also defers amounts earned by employees other than sales representatives who earn incentive payments under compensation plans also tied to the value of customer contracts acquired. Deferred costs were $15.1 million as of September 30, 2024 and December 31, 2023. Amortization expense for the deferred costs was $1.1 million and $1.4 million for the three months ended September 30, 2024 and 2023, respectively, and $3.6 million and $4.4 million for the nine months ended September 30, 2024 and 2023, respectively. Amortization of deferred costs is included in selling and marketing expense in the accompanying unaudited condensed consolidated statements of comprehensive income (loss). Recently issued accounting pronouncements not yet adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and other segment items on an annual and interim basis. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The ASU is to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding income taxes paid by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024, and early adoption is permitted. The new standard is to be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures. With the exception of the new standards discussed above, there have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended September 30, 2024, as compared to the recent accounting pronouncements described in the Company's Annual Report, that are of significance or potential significance to the Company.

Deferred Revenue and Performance Obligation (Notes)	9 Months Ended
Deferred Revenue and Performance Obligation (Notes)	Sep. 30, 2024
Deferred Revenue and Performance Obligation [Abstract]
Deferred revenue and performance obligation [Text Block]	Deferred Revenue and Performance Obligations Deferred revenue For the three months ended September 30, 2024 and 2023, the Company recognized approximately $54.9 million and $52.5 million, respectively, and for the nine months ended September 30, 2024 and 2023, the Company recognized approximately $110.0 million and $100.7 million, respectively, of revenue that was included in the deferred revenue balances at the beginning of the respective periods and related to subscription, maintenance and support, and services. Performance obligations As of September 30, 2024, the Company expects to recognize approximately $429.3 million of revenue from remaining performance obligations. The Company expects, based on the terms of the related underlying contractual arrangements, to recognize revenue on approximately $231.0 million of these performance obligations over the next 12 months, with the balance recognized thereafter. Remaining performance obligations represent contractually committed revenue yet to be recognized, which includes deferred revenue and unbilled amounts that will be recognized as revenue in future periods.

Disaggregation of Revenue (Notes)

9 Months Ended

Sep. 30, 2024

Disaggregation of Revenue [Abstract]

Disaggregation of Revenue [Text Block]

Disaggregation of Revenue

Revenue by geography


	Three Months Ended September 30,								Nine Months Ended September 30,
	2024				2023				2024				2023
(in thousands)	Revenue		Percent		Revenue		Percent		Revenue		Percent		Revenue		Percent
United States of America	$	29,251	35	%	$	26,925	35	%	$	84,174	34	%	$	80,381	36	%
Europe	25,391		31	%	25,691		33	%	76,897		31	%	73,388		32	%
The rest of the world	28,060		34	%	24,634		32	%	84,332		35	%	72,455		32	%
Total revenue	$	82,702	100	%	$	77,250	100	%	$	245,403	100	%	$	226,224	100	%

Leases (Notes)

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Lessee, Operating Leases [Text Block]

Leases

As of September 30, 2024, the Company did not have any finance leases.

Supplemental cash flow information related to leases was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cash paid for operating lease liabilities	$	1,790	$	1,859	$	5,805	$	5,767
Right-of-use asset obtained in exchange for operating lease liability	$	229	$	86	$	2,369	$	365

As of September 30, 2024, maturities of lease liabilities were as follows (in thousands):


Year Ending December 31,	Amount
Remaining 2024	$	1,948
2025	4,136
2026	3,914
2027	3,809
2028	3,862
2029	3,913
Thereafter	14,486
Total operating lease payments	36,068
Less: Imputed interest	(7,996)

Total operating lease liabilities	$	28,072

Earnings per Share (Note)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2024		2023		2024		2023
Numerator:
Net income (loss)	$	235	$	(13,868)	$	(18,508)	$	(46,159)
Denominator:
Weighted average shares (basic)	47,231		46,225		47,038		46,084
Dilutive effect of potential common shares	107		—		—		—
Weighted average shares (diluted)	47,338		46,225		47,038		46,084
Basic income (loss) per share	$	—	$	(0.30)	$	(0.39)	$	(1.00)
Diluted income (loss) per share	$	—	$	(0.30)	$	(0.39)	$	(1.00)

Noncash Share-based Compensation (Note)

9 Months Ended

Sep. 30, 2024

Noncash Share-based Compensation [Abstract]

Noncash Share-based Compensation

The following table presents the number of shares or units outstanding for each award type as of September 30, 2024 and December 31, 2023 (in thousands):


Award type	September 30, 2024	December 31, 2023

Restricted stock units (time-based)	2,731	2,767



Market stock units	439	358

During the three months ended September 30, 2024, the Company granted 77,191 RSUs (time-based) with a weighted average grant-date fair value of $19.90 per share.


	Nine Months Ended September 30, 2024
Volatility	51.24	%
Risk-free interest rate	4.14	%
Expected award life in years	2.90
Dividend yield	—	%


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Share-based compensation:
Cost of revenue	$	1,177	$	1,033	$	3,396	$	2,850
Operating expenses:
Selling and marketing (1)	675		2,992		6,740		9,023
Research and development (1)	898		2,817		6,543		7,840
General and administrative	4,521		4,091		13,540		11,876
Total included in operating expenses	6,094		9,900		26,823		28,739
Total share-based compensation expense	$	7,271	$	10,933	$	30,219	$	31,589

Convertible debt (Notes)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

Convertible Senior Notes

The following is a summary of the Company's convertible senior notes as of September 30, 2024 (in thousands):


	Date of Issuance	Unpaid Principal Balance		Contractual Interest Rates



1% Convertible Notes due in 2024 ("2024 Notes")	May 2019	$	—		1%
2.25% Convertible Notes due in 2027 ("2027 Notes")	September 2020 and October 2023	$	266,816		2.25%
Total Notes		$	266,816

As of September 30, 2024, the 2027 Notes are not yet convertible and their remaining term is approximately 36 months.

The Notes consist of the following (in thousands):


	September 30, 2024		December 31, 2023

Principal	$	266,816	$	288,529
Debt premium, net of amortization	7,758		9,776
Debt issuance costs, net of amortization	(3,401)		(4,313)
Net carrying amount	$	271,173	$	293,992

The following table sets forth total interest expense recognized related to the Notes (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Coupon interest	$	1,501	$	1,203	$	4,576	$	3,609
Amortization of debt issuance costs	289		294		913		1,040
Amortization of debt premium	(669)		—		(2,018)		—
Total	$	1,121	$	1,497	$	3,471	$	4,649

Capped call transactions

Commitments and Contingencies

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Litigation

Purchase commitments


Year Ending December 31,	Amount
Remaining 2024	$	7,342
2025	50,287
2026	54,326
2027	1,146
2028	1,226
2029	1,226
Thereafter	—
Total	$	115,553

Severance and other related costs	9 Months Ended
Severance and other related costs	Sep. 30, 2024
Restructuring and Related Activities [Abstract]
Restructuring, Impairment, and Other Activities Disclosure	Severance and Other Related Costs In the first quarter of 2023, the Company made certain organizational changes and incurred approximately zero and $3.6 million of severance, employee benefits, outplacement and related costs during the three and nine months ended September 30, 2023, respectively. These costs were recorded primarily as operating expenses in the unaudited condensed consolidated statements of comprehensive income (loss), mainly research and development, and sales and marketing. During the three and nine months ended September 30, 2023, cash payments of $0.1 million and $3.9 million, respectively, were recorded for the incurred costs. The Company settled the remaining accrued expense within 2023.

Other Income and Expenses

9 Months Ended

Sep. 30, 2024

Other Income and Expenses [Abstract]

Other Nonoperating Income and Expense

Other Income (Expense), Net

Other income (expense), net consisted of the following (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Interest income, net	1,507		2,086		4,825		5,867
Foreign currency (loss) gain, net	(170)		(238)		(934)		(700)
Loss on derivatives (1)	—		(4,343)		—		(4,343)
Loss on debt extinguishment (1)	—		(1,779)		—		(1,779)

Other (2)	194		(14)		(579)		(91)
Total other income (expense), net	$	1,531	$	(4,288)	$	3,312	$	(1,046)

(1) Losses were recognized in connection with the Notes Exchange, see Note 8.

(2) Includes loss on disposal of assets of $0.8 million related to a lease modification in the first quarter of 2024, see Note 5.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net income (loss)	$ 235	$ (13,868)	$ (18,508)	$ (46,159)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Scott Cook [Member]
Trading Arrangements, by Individual
Name	Scott Cook
Title	Chief Accounting Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	September 11, 2024
Arrangement Duration	476 days
Aggregate Available	15,000

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2024
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial reporting and applicable quarterly reporting regulations of the Securities and Exchange Commission ("SEC"). In management's opinion, the accompanying interim unaudited condensed consolidated financial statements include all adjustments necessary for a fair statement of the financial position of the Company as of September 30, 2024, the results of operations for the three and nine months ended September 30, 2024 and 2023, cash flows for the nine months ended September 30, 2024 and 2023, and stockholders' (deficit) equity for the three and nine months ended September 30, 2024 and 2023. Certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 ("Annual Report") filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2023 was derived from the Company's audited consolidated financial statements but does not include all disclosures required under GAAP.
Accounting Standards Update and Change in Accounting Principle	Changes in accounting policies There have been no material changes in the Company’s significant accounting policies and their application as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Fair value measurement	Fair value measurement The Company's financial assets that are included in cash and cash equivalents and that are measured at fair value on a recurring basis consisted of $131.2 million and $153.2 million at September 30, 2024 and December 31, 2023, respectively, and were invested in treasury funds, money market funds, and interest-bearing deposits in banks. The fair value of those investments is determined based on quoted market prices, which represents level 1 in the fair value hierarchy as defined by ASC 820. See Note 8 for the fair value measurement of the convertible notes.
Revenue Recognition, Customer Acquisitions [Policy Text Block]	Deferred costs Sales commissions earned by the Company's sales representatives are considered incremental and recoverable costs of obtaining a customer contract. Sales commissions are deferred and amortized on a straight-line basis over the period of benefit, which the Company has determined to be five to eight years. The Company determined the period of benefit by taking into consideration its customer contracts, expected renewals of those customer contracts (as the Company currently does not pay an incremental sales commission for renewals), the Company's technology and other factors. The Company also defers amounts earned by employees other than sales representatives who earn incentive payments under compensation plans also tied to the value of customer contracts acquired. Deferred costs were $15.1 million as of September 30, 2024 and December 31, 2023. Amortization expense for the deferred costs was $1.1 million and $1.4 million for the three months ended September 30, 2024 and 2023, respectively, and $3.6 million and $4.4 million for the nine months ended September 30, 2024 and 2023, respectively. Amortization of deferred costs is included in selling and marketing expense in the accompanying unaudited condensed consolidated statements of comprehensive income (loss).
New Accounting Pronouncements, Policy [Policy Text Block]	Recently issued accounting pronouncements not yet adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and other segment items on an annual and interim basis. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The ASU is to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding income taxes paid by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024, and early adoption is permitted. The new standard is to be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures. With the exception of the new standards discussed above, there have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended September 30, 2024, as compared to the recent accounting pronouncements described in the Company's Annual Report, that are of significance or potential significance to the Company.

Disaggregation of Revenue (Tables)

9 Months Ended

Sep. 30, 2024

Disaggregation of Revenue [Abstract]

Schedule of Disaggregation Of Revenue [Table Text Block]


	Three Months Ended September 30,								Nine Months Ended September 30,
	2024				2023				2024				2023
(in thousands)	Revenue		Percent		Revenue		Percent		Revenue		Percent		Revenue		Percent
United States of America	$	29,251	35	%	$	26,925	35	%	$	84,174	34	%	$	80,381	36	%
Europe	25,391		31	%	25,691		33	%	76,897		31	%	73,388		32	%
The rest of the world	28,060		34	%	24,634		32	%	84,332		35	%	72,455		32	%
Total revenue	$	82,702	100	%	$	77,250	100	%	$	245,403	100	%	$	226,224	100	%

Leases (Tables)

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Supplemental Lease Information [Table Text Block]

Supplemental cash flow information related to leases was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cash paid for operating lease liabilities	$	1,790	$	1,859	$	5,805	$	5,767
Right-of-use asset obtained in exchange for operating lease liability	$	229	$	86	$	2,369	$	365

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

As of September 30, 2024, maturities of lease liabilities were as follows (in thousands):


Year Ending December 31,	Amount
Remaining 2024	$	1,948
2025	4,136
2026	3,914
2027	3,809
2028	3,862
2029	3,913
Thereafter	14,486
Total operating lease payments	36,068
Less: Imputed interest	(7,996)

Total operating lease liabilities	$	28,072

Earnings per Share (Table)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2024		2023		2024		2023
Numerator:
Net income (loss)	$	235	$	(13,868)	$	(18,508)	$	(46,159)
Denominator:
Weighted average shares (basic)	47,231		46,225		47,038		46,084
Dilutive effect of potential common shares	107		—		—		—
Weighted average shares (diluted)	47,338		46,225		47,038		46,084
Basic income (loss) per share	$	—	$	(0.30)	$	(0.39)	$	(1.00)
Diluted income (loss) per share	$	—	$	(0.30)	$	(0.39)	$	(1.00)

Noncash Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Noncash Share-based Compensation [Abstract]

Awards outstanding [Table Text Block]

The following table presents the number of shares or units outstanding for each award type as of September 30, 2024 and December 31, 2023 (in thousands):


Award type	September 30, 2024	December 31, 2023

Restricted stock units (time-based)	2,731	2,767



Market stock units	439	358

Schedule of Share-based Compensation Expense

The following table summarizes share-based compensation expense included in the Company's unaudited condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Share-based compensation:
Cost of revenue	$	1,177	$	1,033	$	3,396	$	2,850
Operating expenses:
Selling and marketing (1)	675		2,992		6,740		9,023
Research and development (1)	898		2,817		6,543		7,840
General and administrative	4,521		4,091		13,540		11,876
Total included in operating expenses	6,094		9,900		26,823		28,739
Total share-based compensation expense	$	7,271	$	10,933	$	30,219	$	31,589

Market Stock Units Valuation Assumptions

The weighted average assumptions used to value the MSUs granted during the nine months ended September 30, 2024 were as follows:


	Nine Months Ended September 30, 2024
Volatility	51.24	%
Risk-free interest rate	4.14	%
Expected award life in years	2.90
Dividend yield	—	%

Convertible debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

The following is a summary of the Company's convertible senior notes as of September 30, 2024 (in thousands):


	Date of Issuance	Unpaid Principal Balance		Contractual Interest Rates



1% Convertible Notes due in 2024 ("2024 Notes")	May 2019	$	—		1%
2.25% Convertible Notes due in 2027 ("2027 Notes")	September 2020 and October 2023	$	266,816		2.25%
Total Notes		$	266,816

Convertible Debt [Table Text Block]

The Notes consist of the following (in thousands):


	September 30, 2024		December 31, 2023

Principal	$	266,816	$	288,529
Debt premium, net of amortization	7,758		9,776
Debt issuance costs, net of amortization	(3,401)		(4,313)
Net carrying amount	$	271,173	$	293,992

The following table sets forth total interest expense recognized related to the Notes (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Coupon interest	$	1,501	$	1,203	$	4,576	$	3,609
Amortization of debt issuance costs	289		294		913		1,040
Amortization of debt premium	(669)		—		(2,018)		—
Total	$	1,121	$	1,497	$	3,471	$	4,649

Commitment and Contingencies (Tables)

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Long-Term Purchase Commitment

The following table summarizes the non-cancelable unconditional purchase commitments for each of the next five years and thereafter as of September 30, 2024 (in thousands). The table below includes a multi-year contract with an obligation to spend $105.4 million by November 2026. The timing of the related payments presented below is based on management's estimate as to when those contractual commitments will be satisfied.


Year Ending December 31,	Amount
Remaining 2024	$	7,342
2025	50,287
2026	54,326
2027	1,146
2028	1,226
2029	1,226
Thereafter	—
Total	$	115,553

Other Income and Expenses (Tables)

9 Months Ended

Sep. 30, 2024

Other Income and Expenses [Abstract]

Schedule of Other Nonoperating Income (Expense)

Other income (expense), net consisted of the following (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Interest income, net	1,507		2,086		4,825		5,867
Foreign currency (loss) gain, net	(170)		(238)		(934)		(700)
Loss on derivatives (1)	—		(4,343)		—		(4,343)
Loss on debt extinguishment (1)	—		(1,779)		—		(1,779)

Other (2)	194		(14)		(579)		(91)
Total other income (expense), net	$	1,531	$	(4,288)	$	3,312	$	(1,046)

(1) Losses were recognized in connection with the Notes Exchange, see Note 8.

(2) Includes loss on disposal of assets of $0.8 million related to a lease modification in the first quarter of 2024, see Note 5.

Summary of Significant Accounting Policies Significant Accounting Policies (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Accounting Policies [Abstract]
Treasury money market funds, at fair value	$ 131.2		$ 131.2		$ 153.2
Deferred Costs	15.1		15.1		$ 15.1
Amortization of Deferred Charges	$ 1.1	$ 1.4	$ 3.6	$ 4.4

Deferred Revenue and Performance Obligation (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Deferred Revenue and Performance Obligation [Abstract]
Deferred Revenue, Revenue Recognized	$ 54.9	$ 52.5	$ 110.0	$ 100.7
Revenue, Remaining Performance Obligation, Amount	429.3		429.3
Revenue Remaining Performance Obligation, to be recognized within 12 months	$ 231.0		$ 231.0

Disaggregation of Revenue Revenue by Geography (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenues	$ 82,702	$ 77,250	$ 245,403	$ 226,224
Percentage of total revenue	100.00%	100.00%	100.00%	100.00%
UNITED STATES
Revenues	$ 29,251	$ 26,925	$ 84,174	$ 80,381
Percentage of total revenue	35.00%	35.00%	34.00%	36.00%
Europe [Member]
Revenues	$ 25,391	$ 25,691	$ 76,897	$ 73,388
Percentage of total revenue	31.00%	33.00%	31.00%	32.00%
The rest of the world [Member]
Revenues	$ 28,060	$ 24,634	$ 84,332	$ 72,455
Percentage of total revenue	34.00%	32.00%	35.00%	32.00%

Leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Option to Renew	15 years		15 years
Lessee, Operating Lease, Termination Option			1 year
Operating Lease, Payments	$ 1,790	$ 1,859	$ 5,805	$ 5,767
Right-of-use Asset Obtained in Exchange for Operating Lease Liability	$ 229	$ 86	2,369	365
Lease modification, increase in right of use asset			2,100
Lease modification, increase in right of use liability			1,400
Gain on lease modification			(697)	0
Loss on Disposition of Other Assets			$ 774	51
Decrease in right-of-use asset and related lease liability due to modification				$ 1,000
Minimum [Member]
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Term of Contract	1 year		1 year
Maximum [Member]
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Term of Contract	9 years		9 years

Leases Schedule of lease liability maturities (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract]
Remaining 2024	$ 1,948
2025	4,136
2026	3,914
2027	3,809
2028	3,862
2029	3,913
Thereafter	14,486
Operating Leases, Payments Due	36,068
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(7,996)
Operating Lease, Liability	$ 28,072

Earnings per Share (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
Earnings per Share (Details) - shares shares in Millions	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-based Payment Arrangement [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive potential common shares excluded from computation of earnings per share	2.5	1.4	1.9	1.9
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive potential common shares excluded from computation of earnings per share	6.4	5.8	6.5	5.8

Earnings per Share Basis and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Numerator
Net income (loss)	$ 235	$ (13,868)	$ (18,508)	$ (46,159)
Denominator
Weighted average shares (basic)	47,231	46,225	47,038	46,084
Dilutive effect of potential common shares	107	0	0	0
Weighted average shares (diluted)	47,338	46,225	47,038	46,084
Basic Earnings (Loss) Per Share	$ 0	$ (0.30)	$ (0.39)	$ (1.00)
Diluted earnings (loss) per share	$ 0	$ (0.30)	$ (0.39)	$ (1.00)

Noncash Share-based Compensation (Details)	3 Months Ended	9 Months Ended
Noncash Share-based Compensation (Details)	Sep. 30, 2024 USD ($) $ / shares shares	Sep. 30, 2024 USD ($) $ / shares shares
Noncash Share-based Compensation (Narrative) [Line Items]
Unrecognized compensation cost related to share-based compensation \| $	$ 78,200,000	$ 78,200,000
Weighted average period to recognize cost, in years		2 years 8 months 12 days
Share-based compensation arrangement by share-based payment, Minimum Employee Subscription rate	1.00%	1.00%
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate	10.00%	10.00%
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date		15.00%
Maximum Amount Contributable by employees under ESPP- Half yearly \| $		$ 5,000
Maximum Amount Contributable By Employees Under ESPP- Annually \| $		$ 10,000
Stock Issued During Period, Shares, Employee Stock Purchase Plans	43,298	83,706
ESPP contributions by Employees \| $		$ 700,000
RSUs
Noncash Share-based Compensation (Narrative) [Line Items]
Awards, other than options, granted in period	77,191	1,410,809
Weighted average grant date fair value, per share, of awards granted in period \| $ / shares	$ 19.90	$ 34.48
Employee Stock [Member]
Noncash Share-based Compensation (Narrative) [Line Items]
Shares reserved for issuance under Plan	1,000,000	1,000,000
Shares available for future grants	199,411	199,411
Market Share Units (MSUs) [Member]
Noncash Share-based Compensation (Narrative) [Line Items]
Awards, other than options, granted in period		179,681
Weighted average grant date fair value, per share, of awards granted in period \| $ / shares		$ 39.95
2017 Equity Incentive Plan [Member] [Member]
Noncash Share-based Compensation (Narrative) [Line Items]
Shares reserved for issuance under Plan	7,650,000	7,650,000
2017 Amended Equity Incentive Plan [Member]
Noncash Share-based Compensation (Narrative) [Line Items]
Shares reserved for issuance under Plan	10,550,000	10,550,000
Shares available for future grants	3,380,014	3,380,014

Noncash Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 7,271	$ 10,933	$ 30,219	$ 31,589
Stock based compensation reversal	1,300
Cost of Sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	1,177	1,033	3,396	2,850
Selling and Marketing Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	675	2,992	6,740	9,023
General and Administrative Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	4,521	4,091	13,540	11,876
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	898	2,817	6,543	7,840
Operating Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 6,094	$ 9,900	$ 26,823	$ 28,739

Noncash Share-based Compensation Awards outstanding (Details) - shares shares in Thousands	Sep. 30, 2024	Dec. 31, 2023
Restricted Stock Unit - time based [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number	2,731	2,767
Market Share Units (MSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number	439	358

Noncash Share-based Compensation Assumptions (Details) - Market Share Units (MSUs) [Member]	9 Months Ended
	Sep. 30, 2024
Assumptions For Fair Value Calculation of Market Stock Units [Line Items]
Volatility	51.24%
Risk-free interest rate	4.14%
Expected life, in years	2 years 10 months 24 days
Dividend yield	0.00%

Convertible debt (Details) $ / shares in Units, $ in Thousands		3 Months Ended			9 Months Ended
	Oct. 10, 2023 USD ($)	Sep. 30, 2024 USD ($) $ / shares	Jun. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) $ / shares	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)	Aug. 23, 2023 USD ($)
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 266,816			$ 266,816		$ 288,529
Repayment of convertible debt			$ 21,700		(21,713)	$ 0
Loss on Extinguishment of Debt		0		$ 1,779	0	1,779
Derivative, Loss on Derivative					0	4,343
Debt Instrument, Fair Value Disclosure		239,400			239,400		320,500
Debt Instrument, Unamortized Premium		7,758			7,758		9,776
Debt Instrument, Premium and Debt Issuance Costs, Net		(3,401)			(3,401)		(4,313)
Convertible Debt		271,173			271,173		$ 293,992
Debt Instrument, Periodic Payment, Interest		1,501		1,203	4,576	3,609
Amortization of Financing Costs		289		294	913	1,040
Amortization of Debt Discount (Premium)		(669)		0	(2,018)	0
Interest Expense, Debt		1,121		1,497	3,471	$ 4,649
Notes due 2024 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 21,700	$ 0			$ 0
Debt Instrument, Interest Rate, Stated Percentage		1.00%			1.00%
Debt Instrument, Convertible, Conversion Ratio					15.1394
Debt Instrument, Convertible, Stock Price Trigger \| $ / shares					$ 66.05
Partial Extinguishment of Debt, Principal Amount	122,000
Debt Instrument, Convertible, Conversion Price \| $ / shares		$ 101.62			$ 101.62
Value of capped call		$ 16,400			$ 16,400
Notes due 2027
Debt Instrument [Line Items]
Debt Instrument, Face Amount	266,800	$ 266,816			$ 266,816
Debt Instrument, Interest Rate, Stated Percentage		2.25%			2.25%
Debt Instrument, Convertible, Conversion Ratio					23.9137
Debt Instrument, Convertible, Stock Price Trigger \| $ / shares					$ 41.82
Debt Instrument, Convertible, Remaining Discount Amortization Period		36 months			36 months
Debt Conversion, Converted Instrument, Amount	116,800
Debt Instrument, Convertible, Conversion Price \| $ / shares		$ 78.90			$ 78.90
Value of capped call		$ 25,300			$ 25,300
Notes due 2024- subject to Exchange
Debt Instrument [Line Items]
Debt Instrument, Face Amount								$ 122,000
Notes Exchange
Debt Instrument [Line Items]
Derivative, Loss on Derivative				3,800
Value of capped call	$ 22,200
Notes Exchange - Capped Call
Debt Instrument [Line Items]
Derivative, Loss on Derivative				$ 500

Commitments and Contingencies Purchase commitments (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Long-term Purchase Commitment [Line Items]
Remaining of 2024	$ 7,342
2025	50,287
2026	54,326
2027	1,146
2028	1,226
2029	1,226
Thereafter	0
Unrecorded Unconditional Purchase Obligation	115,553
Purchase Commitment, Remaining Minimum Amount Committed	$ 105,400

Severance and other related costs (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Restructuring and Related Activities [Abstract]
Severance Costs	$ 0.0	$ 3.6
Cash Payments for Severance and other related	$ 0.1	$ 3.9

Other Income and Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Interest Income (Expense), Nonoperating, Net	$ 1,507	$ 2,086	$ 4,825	$ 5,867
Gain (Loss), Foreign Currency Transaction, before Tax	(170)	(238)	(934)	(700)
Derivative, Gain (Loss) on Derivative, Net	0	(4,343)	0	(4,343)
Gain (Loss) on Extinguishment of Debt	0	(1,779)	0	(1,779)
Other Nonoperating Income (Expense)	194	(14)	(579)	(91)
Nonoperating Income (Expense)	$ 1,531	$ (4,288)	3,312	(1,046)
Loss on Disposition of Other Assets			$ 774	$ 51

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