Greetings, welcome to the PROS Holdings Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference call over to Belinda Overdeput, Senior Manager of Investor Relations..

Thank you, operator. Good afternoon, everyone. And thank you for joining us. Our earnings press release, SEC filings and a replay of today's call can be found on the Investor Relations section of our Web site at pros.com. With me on Today's call is Andres Reiner, President and Chief Executive Officer and Stefan Schultz, Chief Financial Officer.

Consistent with our global teams operating today, the three of us are hosting this call from our homes. Please note that some of the commentary today will include forward-looking statements, including without limitation, those about our strategy, future business prospects and market opportunities and our financial projections.

Actual results could differ materially from such statements in our forecast. In particular, there is significant uncertainty around the duration and impact of COVID.

This means that results could change at any time and the contemplated impact of COVID on the company's business results and outlook is the best estimate based on the information available as of today. For more information, please refer to the risk factors described in our SEC filings.

PROS assumes no obligation to update any forward-looking statements to reflect future events or circumstances. As a reminder, during the call, we will discuss non-GAAP metrics.

Reconciliations between each non-GAAP measure and the most directly comparable GAAP measure to the extent to which available without unreasonable effort are available in our earnings press release. With that, I'll turn the call over to you Andres..

Thank you, Belinda. Good afternoon, everyone and thank you for joining us on today's call. As I reflect on the past year, I'm incredibly proud of our amazing team, and how we supported our customers, partners and each other. Despite the impact of COVID on our business and our customers, we grew our subscription revenue by 17% in 2020.

I'm also pleased to share that we exceeded the high end of our guidance range across all metrics, which Stefan will cover in more detail later. These results are driven by our people and culture which is defined by our values of ownership, innovation and caring for each other, our customers and our communities.

In 2020, we kept each other safe and supported each other through personal challenges. We stood by our customers and partnered with them through the challenges they faced and rapidly delivered innovations to help them come back stronger. Innovation is core to our DNA.

In last quarter, we added many innovations across our platform, including next generation pluggable AI models and self-service capabilities to accelerate adoption. We see more than ever the ability to power in omni-channel digital sales experiences an imperative for businesses today.

Industry analysts expect that by 2025, 80% of B2B sales interactions will occur in digital channels. The PROS platform is uniquely positioned to deliver an omni-channel digital sales motion and we've focused our innovations on making our platform even faster to adopt by our customers.

For example, our latest smart CPQ innovations make it even easier for customers to accelerate their digital sales transformations with self service capabilities. This provides businesses with greater flexibility to adjust and implement go-to-market strategies in real time and deliver a better customer experience.

Innovations like these are why this past quarter carrier selected our platform to power a frictionless digital sales motion. Speed to market has never been as critical as it is today in digital marketplaces. Our latest platform innovations enable customers to develop, test and deliver AI powered dynamic pricing at scale and in real time.

Capabilities such as these are why leading companies like WESCO are adopting our platform. The fortune 500 electrical distribution and services company merged with Anixter last year, PROS customers since 2014.

WESCO recognized the immense value of our AI powered omni-channel platform and plans to adopt PROS across their global enterprise to deliver upon their digital growth strategy.

The strength of our AI powered platform, deep customer partnerships and the ability to deliver a frictionless sales experience make PROS the choice for industry leading companies like BASF.

The global chemicals manufacturer is upgrading to our cloud technology after almost a decade of partnership to deliver a better customer experience with dynamic market-based prices. We're encouraged by the continued strong demand for B2B solutions as companies embrace the rapid changing market.

For the travel business, we believe 2021 will see a continued increase in passenger demand, driven primarily by leisure and domestic travel, but not back to pre-COVID levels. The recent vaccine symbolizes an early step in recovery for the travel industry and we're pleased to see improved passenger demand in some markets.

Our technology is a cornerstone for an airline's business. And there's no better example than our newest customer Breeze Airways, an innovative US based startup. Breeze selected PROS to power their revenue management strategy and drive their digital selling journey as their business comes online.

This is a testament to the exceptional value of our technology. And we look forward to partnering with Breeze and helping them successfully launch this year. We're pleased to welcome Carrier and Breeze among other new customers to the PROS family and continue to expand our partnership with existing customers.

Now I'll share our 2021 strategy before I close with a few highlights on our incredible people and culture. This year, we remain committed on our mission of helping people and companies outperform by leading their digital selling transformations.

We plan to accomplish this by continuing to execute upon our strategy of driving market transformation with our end-to-end platform, further leveraging partnerships to accelerate growth and delivering exceptional value and an incredible experience for customers.

We will drive market transformation with our platform by ensuring the market understands the depth and breadth of our capabilities. We'll continue to innovate to accelerate time to value and empower businesses to create and deliver personalized offers to their customers across digital and traditional channels.

We're focused on further leveraging partnerships with commerce technology platforms, system integrators and online marketplaces. Last quarter, we launched our pricing solutions on the SAP App Center to make the power of PROS platform more consumable than ever to the full SAP ecosystem.

We'll continue to extend the reach of our market leading technology through our partner network in 2021. We'll build upon our customer experience and engagement teams amazing effort last year, with a continued focus on delivering exceptional value and an incredible experience for our customers.

Despite the challenges of the pandemic our team delivered a record number of go-lives in 2020, most of which were completed 100% virtually and further strengthen our customer advocacy scores.

I'm incredibly proud of our team and I'd like to thank John Allessio for all his contributions to PROS in building a world class organization and wish him the best in his retirement. Stepping into the role of Chief Customer Officer is Martin Simoncic.

We're excited to have Martin back at PROS and he will be responsible for end-to-end customer engagement, platform adoption and value deliver as we scale our business and customer base. I'm also thrilled to welcome Sherry Lautenbach to the PROS family as Senior Vice President of Global B2B Sales.

Sherry will be responsible for accelerating market adoption of the PROS platform as organizations seek to transform end-to-end selling experiences to meet buyers increasing demands. At PROS we want a better world for all and are committed to ensuring that our employees can realize their full potential.

Our employee resource groups continue to make an incredible impact inside and outside of our organization through community volunteering efforts in educational programs on diversity, equity and inclusion. We're also committed to our emphasis on helping our people learn and grow.

Our team completed over 10,000 training courses ranging in topics from leadership and teamwork to mindfulness and communications. I'm very proud to see our team continue to grow in the face of adversity. In recognition of the amazing culture our team has created together I'm pleased to share that PROS has received a Great Place to Work certification.

We remain committed to ensuring that our employees can bring their authentic selves to work in an inclusive environment so they can thrive and grow. We enter this year passionate about realizing our vision to optimize every shopping and selling experience.

We have the right people, strategy and platform to grow and capture this strong market opportunity in front of us. As I close, I'd like to thank our global team for their incredible passion and efforts towards our vision and making PROS an incredible place. Thank you to our customers, partners and shareholders for your support of PROS.

With that, I'd like to turn the call over to Stefan to cover our financial performance and outlook..

Thank you, Andres. Like Andres, I'm also very proud of our entire team as we continue to execute and support our customers despite the challenges related to the pandemic that continue to persist. I'll start by highlighting some of our fourth quarter and full year key metrics.

Subscription revenue was $42.9 million, up 5% year-over-year, while our full year subscription revenue was $170.5 million, which was up 17% year-over-year. The growth in subscription revenue drove the slight growth in total revenue for the year, which came in at $252.4 million.

Our revenue was impacted by customers that were significantly affected by COVID, including some customers that declared bankruptcy. As a result, our gross revenue retention for the year was approximately 88%.

However, absent the impact of COVID, our gross revenue retention would have been between 92% and 93%, which is consistent with the retention rate last year and the expectations shared last quarter. Our recurring revenue as a percentage of total revenue continued to grow and was 86% for the fourth quarter and 85% for the full year.

Full year non-GAAP subscription gross margins were 72% as compared to 73% last year. The decline in subscription gross margins can be attributed to investment increases in our infrastructure, and the reduced revenue from customers impacted by COVID. Fourth quarter and full year non-GAAP total gross margins were 61%.

This compares to 60% in the fourth quarter last year, and 63% for the full year in 2019. The decline in full year gross margins can also be attributed to the impact COVID has had on our total revenue. Adjusted EBITDA loss was $4.2 million for the quarter, which was significantly better than expected.

The outperformance was driven mostly by additional cost savings realized during the quarter. We were able to improve upon our cost savings goals each quarter during 2020. Starting in the second quarter, we initiated a cost savings program which targeted savings of $13 million versus our original plan.

For the year we ended up saving approximately $25 million. Our trailing 12 month calculated billings decreased 18% year-over-year, which was a higher decline than the change in annual recurring revenue or ARR.

The larger decrease was driven by certain onetime billing events that positively impacted our 2019 calculated billings, as well as several customer contract restructurings in 2020, which deferred billings in the future periods. Our ARR was $209.7 million at the end of the year, and exceeded the guidance range we set last quarter.

Our ARR includes both subscription and maintenance contracts, and the subscription component now represents more than 80% of our total ARR. We generated $11.4 million in free cash flow during the fourth quarter, which resulted in full year free cash flow burn of $53.3 million.

This was significantly better than expected as a result of our near record fourth quarter cash collections. We were able to collect a substantial majority of payment deferrals previously offered to customers.

At the end of the third quarter, we disclosed approximately $26 million in customer payment deferrals that were included in our accounts receivable. At the end of the year, that amount had fallen to approximately $12 million.

We exited 2020 with $329 million of cash and investments and have access to an additional $50 million through our unused revolving line of credit. As previously mentioned, we have aligned to a virtual first sales model and streamlined our organization along industry and geographic lines.

We've also increased our investments in our revenue operations team, which includes an increased focus on sales and partner enablement. Through this process, we reduced the number of quota-carrying personnel to 51 at the end of the year. This is a temporary decline as we have already started to build our sales team in 2021.

We expect to increase the number of quota-carrying personnel throughout the year and exit the year with more than 60 people. Before turning to guidance, I would like to discuss the continuing impact COVID is having on our business.

The reduction in bookings and contract restructurings due to COVID during 2020 will have an impact on our revenue growth rate in 2021. While we believe we will grow this year, many of our customers are still experiencing negative effects to their businesses caused by COVID. This is especially true for our travel related customers.

Due to the continued uncertainty and variability in the macro environment, we are not providing guidance for the full year at this time. But we will continue to provide quarterly guidance just as we did in 2020. For the first quarter of 2021, we expect subscription revenue to be in the range of $42 million to $42.5 million.

We expect first quarter total revenue to be in the range of $59.7 million to $60.7 million. We expect first quarter adjusted EBITDA loss to be between $12 million and $13 million.

And lastly, with an estimated non-GAAP tax rate of 22%, we anticipate first quarter non-GAAP loss per share of between $0.27 and $0.29 per share based on an estimated 44.2 million basic shares outstanding. Lastly, even though we're not providing annual guidance, we do believe free cash flow will improve by at least $15 million.

Before I turn it over to questions, I would like to mention that we will be adopting new accounting guidance for convertible debt. Beginning in the first quarter of 2021, our convertible debt will be presented on the balance sheet at par value rather than the discounted balance.

We believe this change will simplify our presentation and it will have no impact on our non-GAAP operating results or cash flow. In closing, I'm incredibly proud of our employees who continue to remain focused on helping our customers during these turbulent times.

I thank you for your support of PROS and we look forward to speaking with you at upcoming events. I will now turn the call back over to the operator for questions.

Operator?.

Thank you. At this time we will be conducting a question-and-answer session. [Operator Instructions] And our first question is from Scott Berg with Needham & Company. Please proceed with your question..

Hi, this is Alex on for Scott. Thanks for taking my question. We saw the company announced several airline deals with the likes of companies like Emirates that had agreed to migrate to the cloud right before the pandemic.

Have you seen any of these travel customers move forward with these migration plans yet? Are they holding off until their respective businesses improve?.

Hi, this is Andres. Yes, we have seen as an example, Emirates has migrated to the cloud. So we've seen our travel customers continue to evolve their migrations. We also talked last quarter about Qatar moving to GSO migrating to the cloud. So they've been investing this time period to come out stronger as they recover..

Great and then when you're looking at the composition of your ramping B2B bookings from the pandemic lows, are these deals more weighted towards newer ecommerce usage for pricing optimization needs? Are all the smaller bite sized deals the companies will have success with in 2019, are these more traditional larger pricing optimization deals that the company has been seeing?.

Yeah, so we're seeing a little bit of both. We've seen some companies in B2B start small and want to drive value in specific markets. But we're seeing also a lot of companies lean in to this digital sales motion and wanting to start solutions to help them drive success in terms of powering digital channels, as well..

Great, thank you. That's all for me..

Thank you..

And our next question is from Rob Oliver with Baird. Please proceed with your question..

Great. Good evening, guys. Thank you very much. Happy New Year to everybody as well. Stefan, couple of questions for you just on your comment around sales headcount, so I just want to understand what you said, I think you said you took sales headcount down into year-end, but expected, then to baseline and maybe go higher.

So if that's right, just a couple questions around that.

Was that a result of sort of confidence around the letter go-to-market, not needing as many salespeople in certain stricken verticals or a combination of those two? And then, as you think about the sales headcount throughout this year, if you can give us some sense of how you think that might look towards year end? I think you said you're at 51, quota-carrying now and if that would be skewed more towards the B2B side.

Thanks. I realize there's a lot in there, appreciate it..

Well, I'll take the last part first. So yes, it will be skewed more towards the B2B side, and you should see progress as we look to go beyond 60 people by the end of the year. You should see steady progress on that as we go throughout 2021.

In terms of what we did in the fourth quarter, you may remember, we did signal that we felt like our quota-carrying personnel was going to come down a little bit. It came down a little more than what we had signaled.

But that was all, kind of by design, as we went into the fourth quarter, started making plans about the areas we wanted to invest in and quite honestly there were some lower performers that were moved down as well.

So when you combine all of those things, we decided to go ahead and take advantage of the shifts that we're making, make the adjustments, understanding that this may appear and look as though there's some questions about whether or not there's the need for those salespeople, but there are.

We just made the decision to execute on the changes, and then grow throughout the year. But the last thing I'll say, and I did comment on this as well in my prepared remarks, we do feel like there's an opportunity to be more effective and efficient in this virtual environment.

We've started to see that happening from the second quarter through the fourth quarter, and we expect to see that continue into 2021 as well..

That's really helpful. Yeah, and on that last point and Andres this may be for you. But so I think during those sales hires as you mentioned Stefan towards that B2B seemed right. I know that the wake of the pandemic even that area has seen some delays. And I guess, just wondering, clearly, there's some confidence you guys have.

And from a macro perspective, I think we would share that. But are there things you guys are seeing right now or any shifts that your customers that would indicate they're starting to move a bit more rapidly on the B2B side? Thank you guys very much..

A couple of things I would say, look, part of us, last year was building a foundation for long-term growth. We felt very strong about coming into this year in terms of feel like stability. In pipeline, we're continuing to see those increases quite well and really simplifying kind of our go-to-market based on industries.

So that was a part of the strategy, but we felt that maybe even allow us [indiscernible] long-term. It's something that we felt the important changes to make, to execute better. As we look at the year in terms of the pipeline, and the strength of the pipeline, we're seeing good improvement..

Rob, hopefully you were able to get all of that..

I think I got, Yeah, I think I got most of it, a little bit of fade at the end. But thank you guys, very much appreciate it..

Is that better?.

Yeah, much better..

That's better Andres. Thank you..

Thanks guys, appreciate it..

And our next question is from Tom Roderick with Stifel. Please proceed with your question..

Hey, guys, it's Max on for Tom. Thanks for taking my questions. I just want to start by kind of talking about the B2B success, and how you said looking forward this year, there's going to be a lot of work with like partners and system integrators.

Can you talk about how the SAP App Centre and then also like those partners impacted sales over the last year and quarter, I guess?.

Yeah. So in terms of our partner strategy, we've continued to expand across multiple. We talked about Magento in the last quarter and this quarter, we talked about joining the SAP App Centre. As you know SAP is a very strong ecosystem within our customer base, approximately 70% of our customers are from the SAP ecosystem.

And it's our continued investment over a decade into that ecosystem we're seeing I would say a lot of our opportunities come from the SAP ecosystem.

But in general, what I would tell you is that our partner team is doing an amazing job and an increasing number of the opportunities are coming from our full partner ecosystem, which includes our Microsoft partnership, which is one of our strongest partners in the market, as well as partners like Evine, Accenture, and Deloitte, many of our other SI partners.

And more and more I would tell you, in the majority of deals we're partnering with one of our strategic partners..

Got you, that's really helpful. And then thinking about airlines, I know that the previous forecast was no real new airline bookings in the first half of '21. I imagine that's still pretty similar. But there's also kind of positive notes like Breeze Airways signing on whether or not they go live in the first half of the year will be seen later.

But if you could talk any more about kind of expectation around that side, that'd be great..

Yeah. No, so I think the airline industry I think is still trying to innovate in the areas of digital sales motion. As you can imagine, as they come back online, the more they can move every aspect of their business, their contracts, their group and their passenger side to be 100% frictionless sales motion the better.

So digital retailing is resonating a lot well - very well and continuing to innovate on the latest generation revenue management solutions. I would say that at this point, a lot of airlines are waiting to see the passenger volumes continue to improve.

They did see with the rollout of the vaccines an initial improvement, as I commented in my prepared remarks, but predominantly, it's been on the domestic side and leisure travel and we expect that to gradually improve. I would say, back half of the year, we should see some improvement.

But in the first half, I would say travel is still going to be a little bit better than last year, but not a significant improvement..

Great. Thanks. That's all from me..

And our next question is from Jackson Ader with JP Morgan. Please proceed with your question..

Great, thanks for taking my questions, guys. The first one is just maybe a little bit more color on kind of the expectations for ARR growth in '21.

Not necessarily looking for - obviously for guidance, but just how should we think about the relative kind of growth or strength between airline and B2B and then - and also, as you think about maybe the mix between renewal bookings and net new bookings.

How that should shape up here in 21?.

Yeah, I'll let Andres comment on the new and renewal, but we - as I said in my prepared remarks, we do expect our overall business to grow. And in order for us to be able to do that ARR has to grow as well as you probably already know and B2B will definitely be the driver to that.

We're not at this point in time planning on a significant recovery in the travel space, at least as we're planning for 2021. And I think the reason for that is we're going to wait to see more momentum building not only from a passenger perspective, but also from an investment perspective.

And so as we start to see that, then we'll start to put more of a travel component to our growth plans. But our growth plans are primarily driven by B2B..

Okay, and then Andres, anything on the on the mix between kind of net new and renewals and then I just have one quick follow up..

Yeah, so I would tell you, last year our mix and it's been pretty standard throughout the year, so it's about 50% is new versus existing and that's maintained. I expect that to continue to be similar this year. I would say we have a pretty strong migration pipeline. And we've continued to see success last year.

We expect that to continue this year as well. It's a pretty robust net new on the B2B side obviously..

Okay, and then the follow up on gross retention, really appreciate the color on the difference between COVID impacts and non-COVID impacts with the retention range, but that 92% to 93% range is still kind of below, I think what pros would have expected a couple of years ago, kind of closer to the mid 90s.

Is this just a function of the mix continuing to shift more to B2B or is there something else that I may be missing?.

Well, yeah, I think that's true. We've said that overall, we were in the mid 90s and travel was going to be a little higher than that, B2B was going to be a little lower than that, so there's certainly some of that in what you're saying. But I would tell you that we do see a mid 90s, as we get through this type of an environment that we're in.

We do see us getting back to that in the future. I'll be honest. I don't know that we'll see it quite ready - quite yet in 2021. But we do see getting back to that mid 90s, as we get to kind of get back to that same mix of having to travel and B2B component.

But yeah, to your point, no question that B2B has been slightly lighter than the travel component..

Okay, makes sense. Thank you..

Thank you..

And our next question is from Chad Bennett with Craig-Hallum. Please proceed with your question..

Great, thanks for taking my questions. So Stefan maybe for you, just in terms of giving us an update on where you ended up at year end in terms of contract amendments or modifications? Where we ended up if - I think in the third quarter really around 18 million at that point. Maybe I'm wrong.

Maybe I'm dating myself, but just kind of where we are there, where we ended up?.

Yeah, so yeah, you're right. I commented last quarter on three different components. I talked about the amount of billings or I should say receivables that were deferred and then I also talked about the impact that our bookings had from the COVID environment. Then I also mentioned the impact on revenue.

The only one updated in Q4 was the receivable deferral I talked about it going from 26 million down to 12, because we had a really good strong collection quarter in the fourth quarter. But looking at the other two metrics, those stayed about the same.

So therefore, I didn't really provide an update, because what we were kind of projecting at the end of the third quarter ended up being what ended up happening. So I talked about a bookings impact of around $25 million and that's the area that we landed for the full year and then the same thing on the impact on revenue itself.

I talked about $18 million in the third quarter and that estimate it's the same as we ended the year in Q4..

Got it, no, I appreciate the update there. And so if I look at - just in terms of thinking about this upcoming year and growth and I know there's been some, like you said modifications and hopefully we kind of recoup some of that - and billings and cash payments are back to normal.

But if I look at recurring billings in the quarter, I mean, they were down mightily like 30% plus year-over-year, if my math is right. And if we just do the math on your first quarter guide and assume some expectations on deferred rev seasonally and so forth, it looks like they're down again.

How do we - unless you're seeing a major in the first well, month plus or the first quarter the year a major rebound in bookings.

How do we get back to not only overall revenue growth, but specifically subscription revenue growth?.

Yeah. Well, I'll tell you that. Let me start with the back part of your question and then get to the front part of your question. What's going to drive growth in 2021 is going to be subscription revenue. Services will play a part, but subscription will be the largest component.

When you look at calculated billings, I'd be remiss if I didn't talk about some of the timing impacts that are there and I wanted to call out in my prepared remarks, the delta that we had between calculated billings and ARR, because to your point, calculated billings looks far worse in the fourth quarter than what you saw in ARR.

And you may recall we had some really positive events that occurred a year ago that are having a negative impact on us now. And the vast majority of the decline, that 30% decline you're talking about has to do with timing. Now, there's still a component that's - the reduction that is because of the COVID impact on our business, that's for sure.

And that you see in ARR as well. But to kind of fast forward through the answer here, you should see calculated billings improve throughout the year in 2021.

And I would expect also to see calculated billings actually have a higher growth rate than you would see ARR for the same exact reasons why you see a lower impact on calculated billings and ARR in 2020. It's just - it's the timing of billings that impact that. And you know Chad, it's the reason we've kept ARR as a metric.

Three or four years ago, we had talked about stopping ARR and focusing just on calculated billings, and we ended up keeping ARR exactly for this reason. The timing differences can skew you too far one way or the other and that certainly was the case in the end of 2020..

No, I appreciate the color and the timing and obviously the comps are going to get easier here much. Just real quick, if I can slip one last one in for you, Stefan. So maintenance revenue was down a little over 20% in '20. How should we think about that going forward or at least for fiscal '21? And I'll hop off thanks much..

Yeah, I want to comment - you're right. Before I go to this question, you're right about the comps getting easier. But where I'm going is not even looking at comps, the actual calculated billings should improve throughout the year on a dollar-to-dollar basis. So just to - but you're right, the comps get easier too.

So the growth rates should be improved. But back to your question around maintenance, yeah, maintenance will decline probably by about a similar amount that it did in 2020. We continue to expect to see the migration continue to move forward. And so we expect to see a very similar reaction to the maintenance revenue that you saw in 2020..

Thank you much..

Our next question is from Joe Goodwin with JMP Securities. Please proceed with your question..

Hey, guys, thank you so much for taking my questions. First, is there any update on the number of bankruptcies? I know 3Q there was nine, is there - have you guys discovered any additional ones there? Any update there..

No, we're very happy to say there have not been any incremental bankruptcy..

Awesome, great news and then Andreas just curious, where are you spending most of your time today? I mean, what's your main focus? Where do you really focus on right now?.

Yeah, now I'm always on the go-to-market side and with our customers. I would say that the majority of my time is helping to support our full go-to-market team and I love collaborating with customers and I've spent quite a bit of time on that. So that's really where the focus is.

And a lot for investments I will tell you, like last year was a challenging year for us.

But across every aspect of our business, we innovated and we lean in very hard towards digital sales motion and a virtual first strategy across every aspect of our business to really advance us for the future, and how we're engaging from a marketing, from a sales perspective, how we're transforming our sales motion and our industry focus and our enablement both for sales and for partner ecosystem as well as on the delivery and the CEO organization and our customer engagement has improved dramatically.

And I would say really proud of the team for all the great efforts that they've done..

Thank you..

[Operator Instructions] Our next question is from Jason Celino with KeyBanc Capital Markets. Please proceed with your question..

Hey, guys, good afternoon, nice to hear from you. Maybe it's first for Andreas.

The B2B industries that you guys operate in, you have several, but I'm curious as to which ones might be holding in better or which ones might be seeing some earlier recovery trends?.

Yeah, now, that's a great, great question Jason. So we're seeing industries like chemical, distribution, food, industrial manufacturing, those seem to be doing very well.

And I would say, look, industries like distribution are moving very fast to a digital sales motion and moving beyond just powering the sales team, but powering their own ecommerce as well as marketplaces, and we're seeing a lot of industries like these drive very strategic initiatives, beyond sales and to power these digital channels..

Okay, great.

And then a quick one for Stefan, Q4, solid free cash flow quarter, EBITDA was near - Q1 EBITDA guidance, little step up on the loss, is that just related to the timing of the hiring?.

No, it's more just timing of how expenses fall. We always see the jump in payroll taxes and employee benefits that happen in the first quarter. There's also some company events that take place in the first quarter that drive up expenses.

You should see expenses actually come down, as we go throughout the - especially on the OpEx side, see that come down as we get through the - those minimums on the payroll taxes, so that's always a driver in Q1 and that's the biggest reason why you see a dip in the EBITDA..

Great, incredibly helpful, thank you..

Thank you..

Ladies and gentlemen, we have reached the end of the question-and-answer session. I would like to turn the call back to Belinda Overdeput for closing remarks..

Thank you for listening to today's call. We look forward to speaking with you at conferences and events this quarter. We will be attending the JMP Securities Technology Conference on March 1 and the Morgan Stanley TMT conference on March 3. If you have any questions following today's call, please contact us at ir@pros.com Thank you and goodbye..