Analyst(s): Keith Kirkpatrick
Publication Date: August 4, 2025
PROS Holdings delivered a strong Q2 FY 2025, with 12% subscription revenue growth and a 24% jump in adjusted EBITDA, compared with the same period a year ago. AI-powered SaaS solutions fueled new customer wins and margin expansion, prompting management to raise full-year guidance across key metrics.
What is Covered in this Article:
- Q2 2025 financial performance with double-digit subscription revenue growth and profitability gains.
- Sustained B2B and airline sector momentum, driven by new and expanded customer adoption.
- Continued margin expansion and operational efficiency improvements.
- Strategic innovation in agentic AI and new platform partnerships powering future growth.
- Forward-looking guidance with increased outlook for revenue, profitability, and free cash flow.
The News: PROS Holdings, Inc. (NYSE: PRO) reported total revenue of $88.7M for the second quarter of FY 2025, up 8% year-over-year, surpassing the Wall Street consensus estimate of $87.5M by 1.4%. Subscription revenue reached $73.3M, growing 12% year-over-year and exceeding the consensus of $72.5M by 1.1%. GAAP gross profit was $59.5M, climbing 12% from $53.2M a year earlier. The company’s non-GAAP gross profit came in at $61.3M, versus $55.3M in Q2 FY 2024, for an 11% improvement.
Adjusted non-GAAP EBITDA for the quarter was $7.4M, up 42% compared to $5.2M a year ago and beating guidance of $7.0M at the midpoint. Free cash flow for the quarter was $3.2M, while the company exited the quarter with $189.0M in cash and investments. Recurring revenue comprised 86% of total revenue, up from 84% in the prior year.
Non-GAAP earnings per share (EPS) was $0.13, ahead of guidance and up from $0.07 in Q2 FY 2024. GAAP net loss per share improved to $(0.10) from $(0.16) last year.
The company raised its FY 2025 outlook: Subscription revenue is now expected to be in the $295.5M to $297.5M range (11% growth at the midpoint), total revenue is forecast at $360M to $362M (9% growth), and adjusted EBITDA is projected to be $42M to $44M (43% improvement at the midpoint). Free cash flow is anticipated to reach $40M to $44M, a 61% increase year-over-year.
CEO Jeff Cotten stated, “At the heart of commercial success today is bringing the right mix of products and solutions together with the right price to win, and businesses are turning to PROS to optimize their winning formula. This is evidenced by our strong second quarter, where we exceeded the high end of our guidance ranges across all metrics. I’m proud of our team, and excited for the future of PROS, as we are well-positioned to capture long-term value and lead in this next era of AI-powered enterprise transformation.”
PROS Holdings Q2 FY 2025 Earnings Exceed High-End Guidance; Full-Year Outlook Raised on AI-Powered SaaS Momentum
Analyst Take: PROS Holdings delivered a robust Q2 FY 2025, decisively beating the high end of guidance for every major metric and underscoring sustained momentum in its AI-powered SaaS platform. Double-digit subscription growth—bolstered by new wins in B2B, life sciences, and airlines—along with tangible margin expansion and improved cash flow, demonstrates that PROS is executing well on both its innovation and operational priorities.
Management’s strong focus on enterprise AI, including the unveiling of PROS AI Agents, positions the company to capitalize on the next wave of intelligent automation. Strategic partnerships such as the just-announced alliance with Commerce (formerly BigCommerce) are likely to extend PROS’s reach deeper into B2B eCommerce and reinforce its value proposition in dynamic pricing and configuration.
Operationally, disciplined go-to-market execution was evident in improving sales cycles, enhanced win rates, and solid bookings linearity. With a raised FY 2025 outlook, the company is sending a clear signal of confidence in both the demand environment and its financial trajectory.
Subscription Revenue Growth and Customer Momentum
PROS’s 12% subscription revenue growth to $73.3M was a standout, driven by wins with new customers such as Lennox, Louis Dreyfus, and RHI Magnesita. It expanded adoption by key accounts such as American Airlines, Carrier, and Holcim. The B2B sector continued to show strength, while airlines and global logistics clients further diversified the customer base. These wins validate the market’s continuing appetite for AI-driven pricing and offer optimization.
Margin Expansion and Operational Efficiency
The company expanded non-GAAP subscription gross margin to 80%, up by more than 50 basis points, and overall non-GAAP gross margin improved to 69%. Adjusted EBITDA jumped 42% year-over-year to $7.4M. These margin improvements reflect operational discipline, positive sales momentum, and a continued shift toward higher-value recurring SaaS revenue.
Innovation and Strategic Partnerships
PROS’s launch of its agentic AI platform at Outperform 2025 and the strategic partnership with Commerce (formerly BigCommerce) signal a commitment to deepening AI capabilities and accelerating channel growth. PROS AI Agents, combining natural language and proprietary numerical models, enter pilot customer phases in Q3 and are seen as instrumental for long-term differentiation. Expanded commercial partnerships will help drive new logo acquisition and upsell opportunities, especially as AI adoption accelerates in B2B commerce.
Financial Outlook and Capital Structure
The company boosted guidance across all headline metrics for FY 2025. Subscription revenue is now expected to grow 11% to nearly $297M, total revenue by 9% to $362M, and adjusted EBITDA by 43% to $44M. Management successfully reduced debt by $2M through a note exchange, lowering overall leverage and increasing financial flexibility, an important signal for both operational stability and strategic optionality.
Guidance and Final Thoughts
PROS Holdings enters the second half of FY 2025 with a strong foundation and growing momentum. The company’s durable subscription growth, margin expansion, and rising profitability confirm the value proposition of its AI-powered commerce platform.
The ability for the company’s AI agents to deliver value, which are currently in pilot phases of deployment and will be available for customers to test in Q3, will be critical to propelling topline growth and deepening engagement with customers.
Like other SaaS vendors, PROS will face challenges sustaining its margin expansion, given the uncertain economic environment and significant competition from others in the market. However, the company’s strong execution across all metrics provides investors with confidence that it will continue to outperform expectations amid the evolving landscape of AI-driven enterprise solutions.
See the full press release on PROS Holdings’ Second Quarter 2025 financial results on the company website.
Declaration of generative AI and AI-assisted technologies in the writing process: During the preparation of this work, the author(s) used Futurum’s generative AI tool, to summarize the earnings data, the earnings call transcript, and incorporate the data from the prior quarter’s earnings release. After using this tool/service, the author(s) reviewed and edited the content as needed and take full responsibility for the publication’s content.
Disclosure: Futurum is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum as a whole.
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Author Information
Keith Kirkpatrick is Research Director, Enterprise Software & Digital Workflows for The Futurum Group. Keith has over 25 years of experience in research, marketing, and consulting-based fields.
He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.
In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.
He is a member of the Association of Independent Information Professionals (AIIP).
Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.
