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PROS Holdings, Inc. (NYSE:PRO)

Deutsche Bank Technology Conference Call

September 11, 2013 5:40 pm ET

Executives

Charles H. Murphy – Executive Vice President and Chief Financial Officer

Tim Girgenti – Chief Marketing Officer

Unidentified Analyst

Well good afternoon, thanks for joining us. We are pleased to have management team from PROS Holdings, standing behind me is Charlie Murphy, CFO of the company; and to my left Tim Girgenti, Chief Marketing Officer. So I think Charley is going to go over a few slides to start us off and then we’ll go into Q&A.

Charles H. Murphy

Thank you. Thanks everyone for coming. This will be real fast on the slides, I think Q&A is important but just focus at a glance just gives us some perspective on the company for those who just don’t know us. I think its really important that lot has changed since the company went public in June of 2007. We are now in over 37 industries, back then we were in perhaps 7 or 8 industries, so lots of expansion across the B2B space on a common product platform which is very important.

All of our B2B customers get the same products after the common platform. I think as you can see, very good revenue growth, lots of implementations truly a global company over 55 countries we are in today. Fairly large under penetrated market. We [indiscernible] focused on over 30 industries and that’s very helpful to us. There are other companies that are out there that our target much, much specifically one, two, three or maybe four or five industries. We are very fortunate. We are very broad based between B2C and B2C.

So, very diverse geographically as well. Lot of revenue comes from revenue it’s already booked. We have 75% revenue visibility coming into 2013. We have best-in-class for maintenance renewal rates, 95% plus and that really gets to part of the legacy of the company. We’ve always built great products and we have always been very focused on customer satisfaction. So once we deploy the state deploy and because these products are very much integral to the companies business too, using our products they are easy to plug once they are installed.

For a company of our size, we have a strong balance sheet, good history of profitability and positive cash flow and no debt. So we get pretty much the opportunity to create our own vision to move forward as we want to move forward. An example of that is back down during the recession in 2008, we made the decision based on the strength of our balance sheet and the market opportunity ahead of us to knock at that spending to keep the spending out, not too it was the easy thing to do which is the CFO cut spending, he didn’t. We kept the spending up in 2009, 2010 and they came out of recession with a great 2011, 2012 and now 2013.

This shows that the growth trends in the company 66% or little over two years. So the company had closed is doing well. Our strategy talk to us three years ago, would have been the same strategy, we’re here to accelerate adoption. This is one of our key initiatives. What’s great about our market opportunity is that on the B2B space, we’re only about 5% penetrated according to Gartner. As 95% of the companies out here still not using technology such as ours, if the sales affecting us in pricing.

So essentially it gives us a great green space to work with. Our challenge is to look at 95%, now that we hear from the technology exists and how powerful the ROI is on that, so it’s already interaction is very important. Product leadership that we’ve historically spent 22% to 24% of our revenue on R&D, continue to do that today. We very much believe that this is an early stage market opportunity. It’s very important to do that. And as I mentioned we have one product platform. We deploy the same product to all of our customers with respect to the industry current like except the travel.

However, initially this was expand to global region scale. On that we’re building on our partner ecosystem. We have an M&A strategy as well. So these are our key three strategies that the company is focused on and we’ll continue to be focused on the next several years.

And with that I’ll just leave this one logo slide. I think it shows – you’ve recognized many of the names on this slide. If you go back seven years ago there was no penetration. The manufacturing distribution some in services and again the company’s legacy was travel. We’ve been in the travel space for 27 years. Within that it’s predominantly airline and within our airline business 97% of that’s outside the United States. So when you think about airlines, airlines outside the United States are actually doing very well and that’s where our business is.

We have 17 of the top 25 airlines in the world, eight of the 10 most profitable. But that story is a great story for us. But it’s not the growth story for the company. The growth story for the company is everything to the left, the B2B space manufacturing distribution services.

So with that I’ll leave that to Q&A.

Unidentified Analyst

Okay. Thank you, Charlie.

Charles H. Murphy

Thank you.

Question-and-Answer Session

Unidentified Analyst

Thanks for the update. So to the point you made about the under-penetration in the B2B space being only 5%, consumer facing businesses have been doing price optimization more aggressively, I mean airlines being great example of that. Five minutes of web browsing can produce different pricing. So why is B2B so under-penetrated and relatively speaking why has more attention gone on the B2C side from an industry perspective?

Tim Girgenti

I would say first, the market itself, the solution availability or off-the-shelf software like ours is still less than seven years old. So it’s part of just that the technology has not been available until recently. But we are seeing the rate of adoption on the B2B side or seeing very favorable trends there in terms of the growth over the last few years. I think last year, if you recall, the first year that more than half of our revenue came from our B2B businesses. So we kind of think about it at the start up within legacy business, the start up and it was – very happy to see that and that’s sort of on time to actually get to a 56% of our revenue coming out of those B2B industries.

Unidentified Analyst

Yes. So I know we’ve discussed this in the years past and your annual user conference always brings a lot of customers who have had great success. But in terms of evangelizing the product or advocating mainstream, is there still little work left to do maybe in specific verticals?

Charles H. Murphy

Yes, I would say now there is still work to be done, but we’ve made a lot of progress. The market has made a lot of progress. If you go back four years ago, there was very little coverage about this topic around optimization. Big data and big data science five years ago really wasn’t a relevant topic and now everyone is talking about it. They do that for a long time. So we have seen in the last few years a nice uptick in awareness and interest. We are seeing customers now telling their stories publicly and expressing the value that they’ve received at our conferences like you mentioned and we’re really just getting started. There is still a lot of opportunity for our other customers who tell their stories as well.

We do look at the indicators in the market who are going mainstream and a couple of those are in the beginning of this marketplace. So there was a lot of early – the early innovators and early adopters. What we’re seeing now is that second wave of customers who are buying the solution because heard that others in their industry are doing that and they feel like it becomes a competitive necessity. That’s a behavioral change that we are looking for.

We’ve actually seen some of that in the past few years and so those are a couple of the indicators and we are seeing that. So we’re seeing the move. I don’t think we’re ready to say that we are now mainstream, but certainly we’re seeing the right leading indicators.

Unidentified Analyst

So if I can encapsulate all of what you just said. Certain verticals are ahead of others. What verticals do you see more opportunity and perhaps a couple that you think are further behind? Equity is a little evangelical type.

Charles H. Murphy

The verticals where we’re seeing a lot of activity are the service parts or aftermarket parts business in chemicals, hi-tech manufacturing and medical devices, distribution. It wasn’t represented up here. Where there’s actually a lot more opportunity or the pain is quite substantial and whether still evangelizing required is in some of the service spaces, the sub verticals within services and we have quite a few services or really customers and the value that they are getting out of the PROS solution is incredible. We had one of them actually. One of our customers told a prospect that they received or achieved $100 billion of incremental value each of the first few years of using our solutions at the services company. So there is a lot of opportunity in the services space still.

Unidentified Analyst

Okay. So let me pause and see if there are any questions from the audience. No one yet, all right. Let’s give some more time. By the way the screen has a name of a different company. I don’t know if you need to change it too.

Charles H. Murphy

We can’t answer that question.

Unidentified Analyst

Yes. Well, there is none. So Charlie, you crossed the $100 million revenue threshold during last year and obviously you continue to manage the business pretty well from a cost discipline perspective. Has your cash is building up on the balance sheet, what you plan to do obviously R&D has a percentage of revenue you said, 22%, 24% probably need to stand that as you enter new verticals, maybe not some of these newer geographies but certainly expanding the number of verticals in which you play. What approach are you taking to managing the cash and capital allocation all the time?

Charles H. Murphy

Yeah, we got an history of profitability, positive cash flow. As the CFO I feel very confident by that. Another I can confident by is that typically when we sign a contract we don’t get all the cash and contract signed, [indiscernible] obviously implementation services and on occasion license fees could be tied to some milestone.

So we may have $88 million of cash in the balance sheet, we have a factor of 1x time set and half balance sheet cash sitting on my backlog. So we’ve got a big backlog number that we communicated at the end of the last year, it was over $140 million, I think cash in the backlog, cash in the balance sheets, so I feel really good about the company’s financial position.

We do have an M&A strategy and our expectations will be using some of that cash, perhaps even all of that cash with some future date to M&A. We did put a $50 million line in place last year, the year ago last June, but we’re very specific purpose we will make it backup to our existing working capital position. So right now we wouldn’t be thinking of doing this, we want to invest in the growth, so it’s going to be investing back on the business and M&A.

Unidentified Analyst

Yes, and what are some of the areas that you would prioritize for M&A? Is it technology or is it new regions, new verticals.

Charles H. Murphy

Yes, lot of questions we get would it be perhaps companies in our own space and hence they are probably not because we have already got great product et cetera, et cetera, and it would be more the question of do you build, do you buy and in those adjacencies that will be very attractive to us.

We will be looking to adjacent markets that would allow us to expand our product portfolio to continue enhance our competitive differentiation, and to make it easier for companies to come to one place to get more of a vision fulfilled when it comes to how do I become either optimizing my sales organization, optimizing my sales, I should say or overall pricing effectiveness.

So there are companies, there are industries, today they are very close to us, over time, they are going to start coming together, they will be moving into the pricing space, they will be moving into their space, so we have plenty who are using our balance sheet to move us into some of those adjacencies.

Unidentified Analyst

And have you made any acquisitions?

Tim Girgenti

It’s all organic, yeah.

Charles H. Murphy

This will be new for us, so we brought a gentlemen in over 18 months ago with 10 or 12 years of M&A experience specifically to work with us. We have our vision. We know what the adjacencies are that we are very interested in focusing on and we have looked at some companies, but just didn’t like we looked at, so we continue to look.

Unidentified Analyst

Okay. So a question came in from the audience. In the B2C segment of your business, why don’t you serve the hospitality industry, specifically hotels? What makes that market attractive or unattractive?

Charles H. Murphy

Sure. Okay. Yeah, we do service the hotels. It’s just not a big market opportunity for us. Early on, we thought it will be a bigger opportunity than actually resulted in. And one of the reasons is, we never went down market in hotels. We are just like airlines, we always had up market, we went to the more companies that needed more sophisticated technologies that help them optimize the networks.

And hotels is a challenge, lots of hotels are an amalgamation of affiliates, different individuals actually own the hotels, the franchise operations and it’s very difficult to get down to that franchise operation to get them interested in licensing products. It’s a highly centralized hotel complex. It fits our product portfolio very well. If it’s a hotel complex, it’s high decentralized, lots of franchise operations, quite frankly it just doesn’t fit, and it’s a fairly mature space, the hotel space just like airline. And our domain it’s always been in the airline, less in hotels, less in cruise, and [indiscernible] auto companies use those. So we are strong in auto rental, strong in airline.

And right now hotel is just not a focus for us, because the real focus for us on the B2B side, and continuing to build our travel business, but within travel, we are talking more airline than we are talking in any of the segments in the travel. B2B is our growth opportunity, that’s where we are investing.

So today we wouldn’t really make a considerable effort to invest much in the hotel segment of our business.

Unidentified Analyst

Okay, any other questions from the audience? All right, so Tim, question on the competitive space, you made a comment earlier about how certain companies are recognizing that or the car rental example that Charlie decided. If all of the current new companies are using pros, how did they continue to benefit from the solution, it becomes an equalizing effect?

Charles H. Murphy

Yeah, that’s, we get that question quite a bit and it’s not in fact that case because what we do is we will help companies optimize their strategies. So every company has a different strategy, so for example, we have two office supply distributors, the two largest office supply distributors in the market as our customers. And we aren’t necessarily in every case setting a strategy for a given product.

We are helping them to optimize their strategy. So for each of them, both be selling the bottle of water but pricing itself is not the strategy, pricing is the outcome. So you view this as a loss, why don’t you guys view this as a value add, same exact product. So it depends, are we optimizing our market share strategy, are we optimizing our margins strategy or are we optimizing a revenue strategy.

So that’s really one way we are helping these customers is we’re actually just supporting the whole business strategy not necessarily saying that product is, you should sell that same product at the exact same location. If you look, across all the markets we serve it’s pretty common that we have many of the same competitors and we are optimizing for them and the prices aren’t the same.

Unidentified Analyst

And then your approach with the system integration partners, over the years you have built up a nice community, that SI Partners. How much new business are they bringing in, you had very strong license and implementation growth last year, was that a function of the SI community coming on board more meaningfully or was lot of it still your own efforts in the direct sales and they just helped to implement.

Charles H. Murphy

Yes, I would say, it’s still some were our own efforts this is still fairly early stage with our systems integrated specifying much more of our strategic initiatives, it’s we’re working on very much more of our strategic initiatives, I’ve been working on that. And we believe as the Atlantas increases and as the adoption increases we’ll be able to bring more SI participation into our implementations and over time future state we’d like to see them actually take all the implementation but that would be future state several years out. And of course when you hit that point, they will be premium opportunity but there is just references into opportunities maybe bring us deal directly but today it’s pretty much still a close direct sales model and we’re using the systems since we have to supplement our professional services, educate them, start bringing them along and so as the market starts to move they could take an increasingly larger portion of our services and some they can help all they services but yet we want to quit [ph] PRO we want them to be bringing us the opportunities.

Unidentified Analyst

Sure. But then would your rev rec have to change at that point?

Charles H. Murphy

Yes, it would. Exactly because at some point if it’s all license in those services you’re going to be recognizing at the time the contract is signed, licensed.

Unidentified Analyst

Right. So this is kind of a topical question. How would you compare and contrast your business model against someone like Model N there was a recent IPO?

Charles H. Murphy

Yes, I think we can both take pieces of that. First, we don’t know that much about Model N, they don’t compete with us at all. They’re not in our competitive set. Model N does talk about revenue management, but they talk about the complete contacts than we do. Revenue management applies to our travel business, but there it’s really heavy science forecasting optimization pricing. When they talk about revenue management it’s more about contract administration and it’s more about rebate. So how do actually makes you control your rebate.

So you don’t have the leakage and thereby diminishing your revenue. It’s not transaction-based pricing at all, like we do so. I know they went pubic I think in the second quarter of this year and we were hoping them to do well because they do say they’re in the revenue management space, but it’s very different than what we do.

Unidentified Analyst

Yes. In fact during the IPO process your company was used as a comp for them because they have an L&I model just like you do.

Charles H. Murphy

Yes, I think their rev rec model was very similar. There is a commonality in the rev rec model.

Unidentified Analyst

And the vertical, yes. And of course they are more single vertical or two vertically focused broader.

Charles H. Murphy

Yes, they just say they are primarily in two industries I believe and I think 80% of the revenue is coming from sell back in. That’s different when I was, our models were right over 30 industries and the largest portion of revenue last year came from the customer acquisition. So very different. Other than percentage of completion it’s highly different models.

Unidentified Analyst

Okay.

Charles H. Murphy

Tim, anything to add?

Tim Girgenti

No, I think go head.

Charles H. Murphy

So this question applies to your maintenance renewals. It says 95% renewal rates are very good, but what can you tell us about the other 5%? Where are they going and what can you learn from them. Who is the greedy guy that’s asking that question? Yeah 95% or above is certainly best-in-class, we say 95% generally is better than that. The other small portion typically it comes from open air travel business, where airlines, maybe acquired, small airlines over the years and then they, those airlines go away, they pull them into their operations, casing a very, very small that might have, it’s even the case of bankruptcy in the airline industry, very small. That’s where it comes from, it’s really not related to the B2B side of our business as much as you did for the legacy.

Unidentified Analyst

All right.

Charles H. Murphy

Really, there is not, not a lot we can learn from it and quite obviously we’ve got the two pillars, this company was built that was product, product, product and then customer satisfaction, business satisfaction. So with a great customer satisfaction were highly referencable, once deployed we stay deployed. So we look at it and say what [indiscernible] learn from it, but there really isn’t a lot, this events that really are beyond our control.

In case a company may get acquired and the acquired company just says, whatever reason we’re consolidating everything into our systems and back and half right.

Charles H. Murphy

Right. So in the context of rev model and discussion about SI partners taking on more, one of the more I guess recent revenue model is term licenses. So it gives you the feel of a subscription carried on being physically a multi-tenant SaaS technology. So have you thought about that, would that fit in your business model?

Charles H. Murphy

No, it does and actually the year we were most successful. We want to do term deals, particularly in the travel side of our business. The other way we are more success on doing that was 2009, right in the middle of the recession, capital budgets are very tight and companies more willing to actually enter into term deals. And that was actually a year we had our peak term deals. We are encouraging, we are working towards getting more term deals. I think this year, it could very well be another year for us we get close to a record, if not a record, which we would like, we preferred to get broader distribution of our revenue to our recurring revenue model. It’s about 40% today. We’d like to get that up.

The good news is the L&I is going so fast on the B2B side, that’s hard to move that up much, but we very much have an issue and the first segment we are looking at quite frankly is the travel segment, trying to converge as much of that to some form of recurring revenues we can.

Unidentified Analyst

So I guess when it’s a meaningful piece, I’d assume you’d start reporting that?

Charles H. Murphy

Yeah, we would and actually we do now. We do, but it’s very small piece. We actually report this on our 10-K and our 10-Q filings. We talk about how much of our revenue is coming from maintenance, how much maintenance, how much some term contracts and how much in terms of SaaS, but it’s a small percentage.

Unidentified Analyst

And of course you also had a subscription product, on pros.com.

Charles H. Murphy

That’s right.

Unidentified Analyst

That you had I guess launched during the recession or near months to or maybe a little after?

Charles H. Murphy

It’s little bit after that.

Unidentified Analyst

Yes, to make the price of entry a little bit easier, because the average sales price that remains $1.5 million to $2 million and it’s a big commitment for company to make, so I was talking from that front, is that a meaningful part of your business, does it serve a feeder function I guess to your main product?

Tim Girgenti

So I will take that one. We introduced a product for the mid market about a year a half ago called Quote2Win. It’s a deal quoting solution available natively on the pros.com platform and then recently we introduced another mid market solution available, it’s cloud-based solution called Step and it’s a data science and cloud technology for optimizing prices and during the scientific segmentation and both of those products fall in the category of part of our three to five year growth strategy. We talked about PROS. We believe we can achieve a 20% sustainable growth rate in the foreseeable future and these two products or the whole mid-market strategy are part of the portfolio of investments we’re making to sustain that growth three to five years from now.

So both of those are early days. We are building out the mid-market. There are certainly demand and interest there, but it’s very, very early days and we’re investing in a lot more market awareness and building out our distribution capabilities in those markets today. We have customers on both those products and we’re pleased with the interest we’re seeing there. But we expect to see that actually start having an impact, a meaningful impact not in 2014. We’ll be doing deals, but these are small deals, just recurring revenue. So we’ll take a while for that to really compile.

Unidentified Analyst

So what is the typical size of those deals?

Charles H. Murphy

It’s really too early to say exactly what it is. We actually think where it’ll end up is this could be anywhere from $50,000 to $150,000-$200,000 deals ARR [ph] and so that’s where we are modeling in that range. And these are targeted companies that have revenues between $100 million and $500 million a year that will use that product.

Unidentified Analyst

And are they intended to just work out-of-the-box if their work is required? You have a lengthy implementation cycle.

Charles H. Murphy

It’s nowhere near like. In fact we built these both from the round up to become more of a self-serve model and as you know products have to mature into that and we’ve done really well there, but certainly nowhere near like our implementation on the enterprise side.

So for example on Step there is no integrating into an ERP system. There is no integrating into a CRM. They literally can create a data file in Excel, drag and drop it on the website and it automatically starts showing sign and doing all the segmentation right in front of them. In a matter of minutes they have the entire portfolio of customers and products re-segmented powered by science. I mean so it’s a completely different model. We build both those products from the ground up. We didn’t take our enterprise product and scale them down. And that’s partly why [ph].

Unidentified Analyst

All right. Any questions from the audience? All right. Since Andres took over, now it’s been about two, 2.5 years…

Charles H. Murphy

Probably three years.

Unidentified Analyst

Three years. Okay. Clearly you’ve become much growth-oriented company. Last year it was kind of home run in terms of your license growth and focus on this, the three new B2B protocols. How much longer do you think you can sustain that sort of 35%, 40% kind of growth that we saw in the few quarters last year?

Charles H. Murphy

B2B side?

Unidentified Analyst

Yes, on the B2B side.

Charles H. Murphy

Well, we’re saying we believe we have confidence we can grow the company 20% future years and we’re also saying that we believe we can get out legacy business out from the very low single-digits, I’m talking normal single-digits last year to high single-digit this year and then hopefully you just say to the low double-digits to the travel. So with the success, which you have aside you start look at the B2B. We would need about 30% revenue growth on B2B, just saying the 20% revenue growth model. So we’re not looking at – we have still very good growth.

We don’t need the growth we have last year, which is coming off of fairly small base the year before because the year before travel still a larger proportion of the company. So that’s where we don’t people to be focusing on. You have to have this level of sustainable growth at B2B to have a 20% model. We don’t believe that’s the case.

We believe we have the strategies in place to get us to a 20% model and our overall strategy isn’t just hinged on where we’ve had most of our success has been B2B in North America, that’s not our overall strategy. The overall strategy continue to be successful here, will be successful in Europe, we’ve got new product innovations, we’ve already announced this year. When you’re spending 22% to 24% of your revenue on product you should expect more new product innovations coming out in the future.

So product innovations are very important part of our 20% sustainable revenue growth and to give you an example, we introduced product into the travel space, they take it. They need this. They fully appreciate and understand the value of the types of products we can bring to them. So as we developed more product, four to seven years ago we didn’t invest as much in travel, we put most almost all of our investment in B2B, we want to jump start that. When Andres came in, Andres said, we are going to more evenly spread that a bit, we’re going to get back to investing in travel, and we’re already seeing the benefits of that. You paid for it when the travel revenue dropped down to a low single-digits we see some of the benefits of that coming back.

So this isn’t – I think it’s a company to us, help this company to our investors, this isn’t a one product one market strategy. It’s a multiple product, multiple market strategy with increased focus on distribution. And we can get distribution if we can get the awareness out. So with the awareness, with the increased adoption, we can work on the distribution.

Is that helpful?

Unidentified Analyst

Yeah, absolutely. Well, your stock has really worked this yet. There has been [indiscernible] relatively speaking compared to some other companies. But on the comparative front, we only have a couple of minutes left. So on the comparative front any changes?

Charles H. Murphy

No, we have not seen any meaningful changes on a comparative landscape for several years in fact. It’s been very stable and everyone, we still continue to compete with the same set of players. As we’ve entered into new markets we are competing with some new players for example in the rebate space, as we bring new capabilities out. We do expect to see other competitors, but that’s really our doing. There is nobody actually imposing any new competition on us at this point.

Unidentified Analyst

And your partnership with SAP and Microsoft.

Charles H. Murphy

It’s good.

Unidentified Analyst

One of your competitors has actually resold on SAP’s paper? That doesn’t seem to stop your progress.

Charles H. Murphy

Well, so let me first talk about Microsoft. First we were named Microsoft Application Development Partner of the Year this year. We’re very happy with that. That’s a pretty meaningful award. We worked very closely with Microsoft for many years and we will continue to do so. We believe it gives our customers a TCO advantage, a performance advantage and we do a lot of co-marketing with them and co-innovation.

On the SAP side, more than half of our B2B customers are SAP shops. They are choosing PROS. We do compete in every SAP account. It’s a competitive deal every time, but we’re very confident with how we are winning those. We have the highest degree of integration, a certified integration for the SAP environment.

We also were the first and currently the only player in our space to be in the OEM program for SAP HANA. SAP actually selected us for that because they know that we play in the real-time big data space whereas our competitors are much more about process and automation and not about real-time big data science. So the partnership is good. Our customers value that. We have a good relationship and partnership with SAP. We simply don’t have a commercial terms relationship with them.

Unidentified Analyst

I’ll leave you with a couple of big picture questions. Where do you see PROS five years from now?

Tim Girgenti

I don’t want to hop in.

Charles H. Murphy

It’s multi hundred million. So I mean the mantra within the company for a number of, so I remember last minute several of this has been scalability, scalability, scalability. We believe on the market opportunity and still early stage of 95% of company out there not using technology such us ours.

So we believe we’ve got a great, and great market opportunity, we think we are in a great market position. I mean we don’t think of our selves as we are going from $118 million to $144 million of revenue now will do $170 million. We don’t think of ourselves that we think ourselves as a $500 million than a $1 billion company. And we’ve been investing accordingly.

Unidentified Analyst

Great. So what keeps you up and night?

Tim Girgenti

Good, I’ll answer this one. There are two things that we are focused intensely on we have I couldn’t be more proud of the customer success that we’ve had and the referenceability that we have. I couldn’t be more proud of our products, the value of this, our people, we have all of those great assets in place.

What keeps me up at night and us up and night is awareness and distribution. We don’t have a product challenge, we don’t have a people, we have a customer challenge, it is getting the word out. It is getting every CEO that you’re investing in to ask them asking them what are they doing about pricing, price optimization what they are doing about their sales performance, our releasing data science to guide their sales rep to know exactly whether they should spend their time and give them a better chance of improving win rates.

Our mission is to drive awareness so that this technology exists and then to get the technology into a distribution model that gives us the great reach. Those are the things that we believe are what – in front of us, the opportunities ahead of us and we’ve been working on both of the areas for a number of years. We made great improvements. We just still think that there is upside there. Would you Charles?

Charles H. Murphy

Yes, absolutely, one thing it’s kind of hit joke within the company, Tim joined us a little over three years and is the Chief Marketing Officer and we really didn’t have a marketing organization. Now that we a enterprise sales organization four years ago wider. You didn’t need that when you were in the travel space, the best of free provider, but kind of an inside joke on the company as Tim would say every year, marketing still hasn’t caught up with the product.

Charles H. Murphy

Yes, he could not help market the product.

Tim Girgenti

I am embarrassed. We’re still not out marketing the product. I don’t have sales representatives. You can’t say that yet.

Charles H. Murphy

No, we’re still counting on this product.

Tim Girgenti

Unusual in this comment. It is, I know I am embarrassed, my brother [indiscernible].

Unidentified Analyst

All right. Well, with that I think we’re almost out of time. Any last questions from the audience, if not we’ll wrap it up here.

Charles H. Murphy

All right. Thank you.

Tim Girgenti

Thank you very much.

Unidentified Analyst

Thank you again.

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Source: PROS Holdings' Management Presents at Deutsche Bank Technology Conference (Transcript)
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