Pros (PRO) Q4 2024 earnings summary

Executive summary

• Achieved strong Q4 and FY 2024 performance with 14% subscription revenue growth and 10% total revenue growth in Q4, and 14% subscription and 9% total revenue growth for the year.

• Adjusted EBITDA reached $30M for FY 2024, a 400% increase from 2023, with Q4 adjusted EBITDA at $10.9M, up 333% year-over-year.

• Free cash flow for FY 2024 was $26.2M, up 130% year-over-year; Q4 free cash flow was $23.5M, up 73% from Q4 2023.

• AI-driven innovation, operational efficiency, and industry leadership in CPQ solutions recognized by Gartner and IDC were key drivers.

• Net loss narrowed significantly: Q4 GAAP net loss was $2.0M vs. $10.2M prior year; full-year net loss was $20.5M vs. $56.4M.

Financial highlights

• Q4 subscription revenue: $69.3M (up 14% YoY); full-year: $266.3M (up 14% YoY); Q4 total revenue: $85M (up 10% YoY); full-year: $330.4M (up 9% YoY).

• Recurring revenue was 85% of total revenue in Q4 and full year.

• Subscription ARR at year-end: $283.7M (up 10% YoY constant currency); Q4 recurring calculated billings up 25% YoY.

• Non-GAAP subscription gross margin: 81% in Q4, 80% for the year; total non-GAAP gross margin: 70% in Q4, 68% for the year (up from 65% in 2023).

• Adjusted EBITDA: $10.9M in Q4, $30M for the year (up $24M YoY); free cash flow: $23.5M in Q4, $26.2M for the year (up $14.8M YoY); cash and investments at year-end: $172M.

Outlook and guidance

• 2025 guidance: subscription ARR of $308–311M (10% YoY growth), subscription revenue of $294–296M (11% YoY growth), total revenue of $360–362M (9% YoY growth).

• Full-year adjusted EBITDA expected at $42–44M (up $13M YoY); free cash flow $40–44M (up $15.8M YoY).

• Q1 2025 guidance: subscription revenue $70.25–70.75M (10% YoY growth), total revenue $85–86M (6% YoY growth), adjusted EBITDA $7.5–8.5M.

• Expecting accelerating subscription growth through 2025, especially from travel sector recovery.

• Long-term goal to achieve "Rule of 40" with 16–21% total revenue growth and 19–24% free cash flow margin.