PROS Holdings, Inc.

telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference call over to Belinda Overdeput, Director 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 website at pros.com. Our prepared remarks will also be available on our website immediately following the call and will be replaced by the official transcript, which includes participant questions once available. With me on today's call is Andres Reiner, President and Chief Executive Officer, and Stefan Schultz, Chief Financial Officer. 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 and guidance. Actual results could differ materially from such statements in our forecast. 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-gap metrics, reconciliations between each non-gap measure and the most directly comparable gap measure, to the extent to which available without unreasonable effort, are available in our earnings press release. Before I turn the call over, I'd like to remind investors and analysts of our upcoming 2024 Outperform with Pros conference, which will take place May 20th to 22nd in Orlando, Florida. Outperform with Pros is one of the world's preeminent AI conferences, where you will hear from experts across industries on how to use AI to drive business forward. We will also host a panel for investors and analysts on the 22nd. Registration is open on our website. 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. I'm so proud of what our team accomplished in 2023. We had an incredible year. Last year, we delivered 14% subscription AR growth year over year, significantly outperforming the high end of our guidance range. We grew our total revenue by 10% and subscription revenue by 15% while generating $11.4 million in free cash flow, an outstanding improvement of over $33 million year over year. We set a goal to get to a Rule of 10 in 2023, and we outperformed that goal by reaching Rule of 14. We continue to be laser focused on delivering to our long-term goal of being a rule of 40 company. The pros value proposition has never been more relevant as businesses continue to lean into digitization, automation, and AI to drive operational efficiencies in fuel revenue growth. We continue to launch groundbreaking AI innovations that are captivating the market. We are an innovation company at our core. Every year, we provide new innovations to inspire our customers, and last year was no different. We added over 400 new features across the Pros platform in 2023, including revolutionary industry-first innovations, such as capacity-aware optimization, collaborative quoting, in dynamic ancillary pricing to name a few. We're constantly innovating to drive even more value to our customers and help them thrive in the era of AI. The strategic changes we made in late 2021 with the launch of the PROS platform made our market leading AI innovations easier than ever to adopt through our land, realize and expand strategy. The ongoing success of these changes was evident again in 2023 and in Q4 as we experienced a record-breaking quarter for deal volumes. In Q4, we drove incredible wins in new customer acquisition and expansions across B2B and travel. Now I'll highlight a few of our amazing Q4 wins starting with new customers. Schneider Electric and Castrol both selected the PROS platform to fuel their growth strategies. Schneider Electric, a global leader in energy technology, chose to activate our price optimization and management solution to drive winning prices in real time that continuously adjust to market changes. Castrol, a leading manufacturer of industrial lubricants, chose to activate our price optimization, price management, and CPQ solutions to drive a superior customer experience by optimizing and automating their global sales process. In travel, we're winning new customers around the globe. From world-class airlines to brand new startups, all of whom want to lead the travel industry in innovation. For example, Saudia, the flag carrier of Saudi Arabia, and Really Cool Airlines, a new startup set to take flight this year, both selected the PROS platform in Q4. Saudia is activating our revenue management and group sales optimizer solutions to power profitable growth with dynamic, market relevant offers and a seamless sales experience. Really Cool Airlines is activating our revenue management solution to offer a personalized and seamless integrated travel experience to their customers. Now onto some of our incredible expansions in Q4. Thanks to our continuous focus on innovation and value realization, we're seeing customers such as Smith and Nephew Air Canada and Japan Airlines, among many others, continue to expand on the PROS platform. Smith and Nephew, a global medical technology company, continues to expand CPQ across more geographies and business units to drive even more value by powering a seamless sales experience across their global enterprise. Japan Airlines and Air Canada have been customers of PROS for two and three decades respectively. And because of the innovation and success they drive with PROS, they continue to expand adoption of the PROS platform. Japan Airlines expanded their use of our digital offer marketing solution and upgraded to our ultimate edition of Group Sales Optimizer. Japan Airlines also added their cargo business on our platform with the adoption of our price optimization and management solution in capacity-aware optimization AI. These expansions enhanced Japan Airlines' ability to drive winning offers across their passenger, group, and cargo businesses. Air Canada chose to activate our corporate sales solution and upgrade to the ultimate edition of our real-time dynamic pricing solution. Post-corporate sales enables Air Canada to drive a frictionless sales experience for their corporate contracts business. With RTDP Ultimate, Air Canada drives even more value through our latest AI innovations for continuous pricing, empowering them to price fares across the spectrum with the best willingness to pay AI to date. As I said before, we are an innovation company. We're committed to continuously innovating to provide even more value to our customers. This commitment extends beyond what our customers need now to address what they will need to drive success for decades to come. This is why we have immense pride in seeing longstanding customers like Japan Airlines and Air Canada continue to expand their partnership with pros by adopting our latest innovations. Our innovations are not only driving expansions, but are also inspiring customers to migrate to the cloud, like we saw in Q4 with Hewlett Packard Enterprise. HPE has been a valued PROS customer for a decade, and now they're transitioning to the PROS platform to take advantage of our latest innovations in price optimization and management, including our industry-leading real-time pricing engine and our Gen 4 AI. This is such an exciting time at PROS. Today, more businesses are focused on how they can use digitization, automation, and AI to drive profitable growth than ever before. And we are well positioned to capitalize on this market opportunity. And as I said before, we are laser focused on our goal to achieve a rule of 40. This means we must continue to innovate to expand our growth and drive greater efficiency every year. Which brings me to our strategic focus areas for 2024. First, we'll continue focusing on our land realize and expand strategy. In 2023, this strategy continued to help us drive accelerated deal velocity improved rep productivity by nearly 20%, and reduced customer time to value. We achieved a notable 28% reduction in B2B new logo sales cycle times year over year. We also achieved a 20% reduction in time to value across our core offerings year over year, while simultaneously driving significant expansion of our services gross margins. in outstanding achievement. In 2024, we will continue to innovate to extend our market leadership position, bringing even more solutions to market, further expanding the value realization potential for our customers. Second, we will continue to expand our platform by expanding our marketplace. Our marketplace currently holds over 140 solutions, over half of which are developed by partners. In 2024, we will introduce more of our offerings and extend access to a wider ecosystem of partners, driving even more value to our customers and the market. Finally, we will continue our legacy of being a pioneer and leader in AI by infusing AI into every aspect of our business. Not only we will continue to innovate to deliver market-leading AI innovations through our platform, but we're embracing AI innovation to drive efficiency across every aspect of our business. Our organization aims not only to transform how we operate, but establish a new standard for how enterprises should use AI to power their operations moving forward. Before I close, I want to say how proud I am of our amazing team for their unwavering dedication to our mission of helping people and companies outperform. Our employees embody our core values of ownership, innovation, and care for each other, our customers, and our communities. I want to thank our global team for making PROS an exceptional company. and congratulate all of them for their great achievements. I'd also like to thank our customers, partners, and shareholders for their ongoing support of PROS. With that, I'd like to turn the call over to Stefan to cover financial performance and outlook.