All right. I think we'll go ahead and get started. You know, it's day two, but this is my first fireside chat, so, let's get going. Welcome. Starting on a high note. Yeah. Welcome, PROS Holdings. We have Belinda Overdeput with IR, and then we have Sunil John, the Chief Product Officer at PROS. Hi, everyone. Hey. So maybe we can just start with intros. I think most people know what PROS does, but I think a few people in the audience may not. So what does the company do? And then, Sunil, you know, we'd love to hear about your background and what you do with the company. Yeah. I'll kick us off with the intro. At PROS, our vision is to optimize every shopping and selling experience, and our platform uses AI to solve, problems and help businesses attract demand, price smarter, price more dynamically, and sell faster. We sell solutions in market categories like revenue management, digital offer marketing, configure price quote, or CPQ, and price optimization. Our solution span have been successful in over 40 industries, across things like B2B industries, manufacturing, distribution-type industries, and then we also have a pretty heavy presence in airlines. We're about $317 million in revenue, and about 84% of that is recurring. We've built a healthy SaaS business, largely done our SaaS transition. We have a massive market opportunity in front of us. We're really excited about everybody being excited about AI, 'cause I like to say we've been doing it since before it was cool, so looking forward to telling you more today. Yeah, and hi, everyone. Sunil John, Chief Product Officer of PROS. I've been at PROS now for almost 20 years. Most of that time is spanned leading product management and leading our M&A activity, over that time period. My background before that was as an engineer, really focused on, vehicle route optimization solutions. So moving over into price optimization and into some of our AI techniques was a natural segue. Excellent. And then, Sunil, I'd love to hear about some of the new enhancements that PROS has been working on, I think specifically with some of these Gen IV enhancements. Mm-hmm. Yeah, so really proud of our team all across PROS that have built some really great solutions. You know, our Gen IV family of solutions, one of them is around price optimization. So our Gen IV family, it's based on a very novel neural network-based approach that we can use to recommend a specific price envelope for a negotiated exchange between the buyer and the seller. So one of the nice things about this approach is we handle recommendations under very sparse data conditions. So our approach to making the recommendation is ensembled with some explainability algorithms because we never want to be an opaque box. And so our recommendations have been well received in the market because of this ability to handle large data volumes, sparse data recommendations when there's not enough data. We can recommend what the right price should be and handling things at large scale. Another innovation is what we call our Capacity-Aware Optimization. Think of a business that's capacity constrained. Typically, you think of a seat on an airline, but that could also be a fleet of vehicles that you need to use to deliver your goods to your end customers, and there's some capacity constraints on that, especially with time windows. We have a solution for that that we just unveiled that's also part of this Gen IV family. And then another one that we've launched is our Dynamic Ancillary Pricing. So think of this as an exploratory algorithm that's very useful when you have static prices. Think, you might see bags that have been $25 forever in airlines, and you want to explore what the opportunity is to explore the elasticity curves on that. Or in very volatile environments, when prices are changing very, very fast, you want the AI to explore a little bit where the price envelope can be. These are some solutions that we've brought to market over the last 12 months. Okay. That's kind of a good bedrock. So my next question is, you know, especially in travel, you know, revenue optimization has been around for a long time. Obviously, B2B, it's a more exciting opportunity, but you're kind of competing against either do-it-yourself or nothing at all. So how do these new enhancements lead to expansion at customers or new wins? Yeah, one of the biggest transitions we've made recently is our shift from selling products to selling a platform. So on our platform, one of the things that that's enabled is a lot more of these modular solutions. So customers can start with a particular solution focused in either a particular geography or a particular line of business, and as they get value, they can see the value that they achieve, the ROI. It's incredible, and they can start expanding into more and more areas of their business, either with new SKUs, new geographies, new lines of business. Okay. Before I maybe switch to, you know, some of the other AI or customer outcome topics, I thought it'd be kind of topical to talk about your, the travel caution. Mm-hmm That you guys have been highlighting. You know, as at our conference, we've had a lot of travel delays this weekend. That is an understatement. Yeah. So, maybe speak to what you said on the earnings call, and then internally, operationally, at these travel companies, at these airlines, you know, help us understand, like, what's going on and preventing them from investing more on the software side? Yeah, I'll start, and definitely feel free to add color. So I think all of us who've traveled over the last year have seen the airports are super busy. Passenger demand is really strong. So I think when we comment about seeing some challenges within the airline industry, I think just taking a step back and thinking about where airlines have come from. They went from overnight having no demand over COVID, to bringing operations back after laying off a significant portion of their workforce, to seeing demand snap back faster than I think anyone had thought, particularly in regions like the U.S. and Europe, where demand has been very robust and strong for the last couple of years. So when you have that type of snapback, there's a little bit of growing pains from an operational standpoint, and I think we'd rather be in the situation we're in now with airlines than a situation where no one's flying anywhere, and we're in a global pandemic, but it has created some challenges. Then compounding that, there's been things like inflation, which are rising the cost of labor, and supply chain, which is also putting pressure on airline margins. So what we saw over the last couple of quarters was a lot of commentary. If you look at airline earnings reports from this most recent quarter, even pre-CrowdStrike outage, which I'll get to in a minute, you started to see the commentary a bit more on profits being pressured in the second half of the year. A lot of them have brought down profit expectations, and so what we've seen is these operational challenges are needing to be triaged, and we are helping airlines through a lot of these things. Our solutions are very valuable in, from a revenue optimization perspective, but from a focus perspective, airlines are just dealing with some pretty basic challenges first, like, let's get flights out on time. Let's make sure we have crew staffed where we need crew staffed. These things are gonna take priority. And so, then you enter CrowdStrike, and you're dealing with a whole other set of challenges from a technology perspective, where they're realizing, okay, we had some single points of failure in our systems that we now know we need to address. And so our commentary on our earnings call was, we have a number of deals right now where we've already been selected vendor of choice, but we are seeing those sales cycles lengthen because airline focus is on other parts of their operation right now. And so it's not a matter of if those deals will come in, it's more a matter of when. And so as a result, we did have to take down our outlook, particularly looking at the second-half bookings, which is usually our seasonally strong period from an airline perspective, just to account for some of that. I mean, Andres gave color of an example where he had been speaking with a CEO who was gung ho to start this project and said, "Hey, we've gotta, we've gotta wait 30 days." And of course, when someone tells you 30 days, you don't want to assume it's actually gonna be 30 days. It could be something longer than that. And so those are just illustratively some of the things that we're seeing, and it's not just U.S.-focused. Yeah. It's pretty widespread, and, I mean, we're seeing different challenges in different regions, but, you know, I don't think we think these are long-term in nature. I think it's more just they're in triage mode right now, getting the operations right, and then they'll get back to focusing on some of the more strategic initiatives, like some of the things they're doing with PROS. Okay. Any questions from the audience? Maybe one more question on this topic, and then we'll kind of move on. But I think with the, kind of the assumption now that, travel bookings will, I think, be flat this year, I think. Actually, down. Down, sorry. Sorry. Down. I know, which I hate to say. I think. Yeah. I think Stefan kind of alluded that it would have an impact on your. Yeah Margin trajectory. Yeah. Can you just explain that a little bit? 'Cause it seems like a one-year road bump. I guess, why would it kind of extend? Yeah. So we do have these long-term targets we'd put out. Our Rule of 40, it's a top-line target of 16%-21% on total growth, and then it's a Free Cash Flow margin target of 19%-24%. I'll first say, we're super pleased with the progress we've made against this so far. We've had huge transformations in our business from a margin perspective over the last couple of years, and so we really feel like we've laid the foundation to continue to drive scale in our organization. But that model did contemplate that travel would continue to come back at the pace that we had been seeing in 2023, and of course, this year we've seen a little bit of a pause on some of these things, which is affecting the growth outlook for this year on the travel side. B2B is driving basically all the growth that you're seeing at this point, and so we feel like when those things resolve, you know, we're gonna start to be able to show that acceleration that we had planned, and you'll start to see that in these outer years. But as a result, we did feel it was prudent to kind of pull a little bit back on the timing. We had initially been shooting for 2026 to hit those revenue and free cash flow targets. We're now saying it could be, you know, 2027 at this point, but there's a lot of conviction around hitting those targets. The whole organization has rallied around it. There's a lot we're doing from an innovation standpoint, to drive efficiency, and so we can definitely share some of those examples from a product standpoint, but we feel really good about the changes we've made in our business. We've just got to see some of these challenges subside. Okay, excellent. Yeah, no, that's a fair explanation. Maybe switching to kind of the AI themes. Mm-hmm A little bit. Like, at the beginning, you said you, you know, did AI before it was cool. I mean, it's gone through a lot of names, you know, data analytics, you know, et cetera. Mm-hmm. Yeah. Maybe, can you speak to how PROS uses AI within your different products and, like, what kind of data you're leveraging? Yeah, you bet. You bet. So, you know, our AI is often predictive, or, you know, in the academic circles, it's called discriminative in nature, but not that we're discriminating against people. It's just discriminative versus generative. And so, the types of algorithms, so we have forecasting capabilities that we use throughout all of our platform. We have revenue management. Another way of explaining that is the opportunity cost estimation when you have constrained supply, price optimization, mix optimization, and product recommendation. So there's a whole family of these algorithms that we usually ensemble together with various explainability algorithms to drive particular business outcomes. Now, we marry that with generative AI techniques. So for generative AI, we use Azure OpenAI. Microsoft's been a long-term partner of ours, and we're very close to working with them. And when we use this generative AI, it starts helping the recommendations that we produce in a summarization angle, in explainability angle, so you can translate the result to a little bit more of a human-readable form. Translation, so that's translation, across maybe languages, but also think about that from how we eliminate friction of customers onboarding their data onto our systems. So using generative AI, we can take data out of a host system, translate that, and put it into our systems, and now all of a sudden, it's faster for customers to adopt that altogether. Okay. And with this new focus on AI, has that driven more leads or, I guess, top-of-funnel interest? Just help us understand how much, if at all, it's been a tailwind to kind of on the customer side. So the focus on AI has been long term in there because we've, like you said, we did before it was cool, on there. But, you know, on the product side of things, one of the biggest focus areas we're doing is applying it to the growth initiatives. So long term, we do want to have more of a PLG motion, a product-led growth motion, starting with some triability, and this is where AI is, again, helping us to get customers into the top of the funnel. So long term, that's going to be a big boost to our top-line sales targets. Okay. And then, you know, as the Chief Product Officer, to what extent you can share, I mean, how are you using AI internally for your own, you know, product development or even to make your organization more efficient? Curious if you have any good anecdotes. Absolutely. So, you know, the one of the biggest use cases of Generative AI is in the code generation. So in our R&D, we use that a lot for both generation of test data as well as generation of code. So we started off with a lot of, you know, unit test cases and things like that, where we want our engineers to focus on the higher level business value add. But we want to make sure our software is always very robust, so we've been working a lot on code generation for test cases, test generation for large datasets, and that's really helped us cycle time a lot faster in terms of getting our releases out. That's probably the biggest use case. Okay. Are you using GitHub. GitHub's Copilot? Copilot. Yep, GitHub's Copilot. Not to get off topic, but, you know, there's this, I cover DevOps. Yeah. I mean, there's this debate that, you know, these code generation tools might, you know, displace, you know, future developers. Curious how you're using that to either supplement efficiency and what your views are long term of what that might look like. You know, I don't feel like it's going to replace developers. You know, we hire developers because of their creativity and what they could apply to a business problem, so somebody still needs to direct the AI on what to do. Now, is it going to get more automated? Yes. Is it going to get better and better? Yes. But in the same way that open source didn't displace all commercial software, you're not going to have an AI just generate what to do. You know, we're always still going to need a human to decide what the AI should do and to review those results. At the end of the day, we, as an organization, are going to own the software that's produced, and so we're not going to outsource that just to AI. We are going to have it augment to make our humans better. Okay, interesting. Sorry to get off topic. No, no, no. Very relevant question. Yeah. I did want to touch on some of the go-to-market changes. Mm-hmm. I think, Todd McNabb joined, you know, as CRO earlier this year. Maybe if you're able to speak to some of the go-to-market evolution, maybe before he joined, and then maybe what the vision is going forward. Yeah, I'll start, and then I know Sunil has some stuff to comment on there, too. But, we did bring in. Actually, let me take a step back. So in 2022, we launched the PROS Platform, which is how we've been selling our solutions today. Sunil talked about being more modular in how we sell to the market, allowing customers to take smaller bites, drive value faster, and then expand. And so, we've made significant progress in terms of sales velocity, more on the B2B side, given where travel is from an end market perspective right now, and productivity as well, being able to onboard reps, get them productive faster because it's just a higher velocity sales motion. And so we've been pleased with the success of that so far. We brought in Todd to really build on that and help us scale it. He's got deep experience in scaling organizations. He has brought a lot of rigor to the sales process, how we think about driving the expansion, so that as soon as we get the land, we're pre-planning that out five quarters in advance. What are all the places that we're going to go next? And really building what we're calling internally, the flywheel of that approach and that sales motion. And so, one of the major changes with Todd is we've unified our B2B and travel go-to-market team, so sales, delivery, customer success, under one leader. And I will say, this year, we're not changing account assignments, we're not changing quotas in the middle of the year, so I'll just put that out there as the caveat. But part of the unification is there are a lot of innovations, and Sunil can elaborate on this, in our platform that we're actually cross-selling into different end markets. And so we used to be a lot more divided in how we approach customers, but what that created is you have, for example, an airline customer who has a CSM for their B2B cargo solution and a CSM for revenue management, and those CSMs are talking to them about different solutions. And that makes it harder to get closer to the customer and drive the expansion when you've got multiple people responsible for different portions of the account. And so by unifying the team, we're able to actually get that customer, someone in-region, who owns everything on their account and that portfolio, and drive that expansion and that customer relationship over time. So that's a lot from a synergy perspective of what you're going to see as we get out in 2025 and 2026. That we'll be able to add sales heads, of course, to support the growth, but we won't have to add to the same degree that we may have in the past to be able to drive those efficiencies across sales and marketing. And, Sunil, maybe you can give an example from a product perspective of how we're cross-selling. Yeah, you know, so one example. Well, I'll give you two examples. One is corporate sales for travel, for airlines. You know, they often have corporate contracts that they have with their customers, and so using the quoting solutions that we've typically deployed historically in the B2B side for them to sell to their customers has been a good hit. Similarly, the capacity constraint example that I talked about earlier, where you're usually using capacity-constrained algorithms to optimize the seat, you're using that for vehicle fleets, for cargo capacity. There are a lot of different use cases, and we're starting to see this blend a lot together, between the solutions that we traditionally thought of as just B2B, characterized by unpredictable demand and unlimited supply, and travel, which was usually predictable demand and constrained supply. Those are starting to intermingle a lot since the pandemic, and a lot of eyes are being opened on both sides. Okay. So, Belinda, if I'm able to paraphrase it. Mm-hmm. I think a couple of years ago, you made your pricing packaging more simpler. Yes And that's driven kind of like a big uptake in, like, deal volumes. Yep. Sounds like now you're going to be fine-tuning the go-to-market to streamline it. Yes A little bit more. Yep. So going forward, I think you mentioned needing to hire a little more. Mm. Maybe speak to what the hiring roadmap looks like? Yeah for this year, and then, internally, are you going to be having roles get changed or how that might work? Yeah. So for this year, any sales hiring we're doing is really to support 25 and 26, so we feel really good about the team we have for the rest of this year to deliver to our goals. But we are looking at adding different headcount in different regions again to support that model, where we're going to be very close to our customers, and the teams are in region, supporting the customers in region. And so that's mostly what you're going to see. Okay, excellent. And then maybe for the last five minutes, I'd like to touch on B2B. I just want to see if the audience has any quick questions. So with B2B, I think it's been clearly the bright spot in your business. Mm-hmm. You've been innovating with a lot of the products that you've kind of mentioned so far. Can you just talk about how some of the secular trends have changed, maybe over the last couple of years, and, like, what you're looking forward to over the next one to two? Yeah, from the B2B, if I look at the broad market and looking out over the next one to five, 10 years, one big shift is everybody's going much more digital. You know, going away from. And when I think about manual, I think about Excel sheets, and not paper sheets, but, like, Excel sheets and very disparate systems, having that more streamlined and having an integrated, unified digital experience. There's another trend around our end customers, our B2B end customers, wanting to enter the sales cycle and do a lot of things on their own. So the self-service component that you saw in B2C, starting in 1995, is happening in B2B right now as well. And the other thing that's happening is, people are really recognizing that AI is the tool to make this progression a lot better in their own businesses. The volatility that we're experiencing in markets today is only going to get increasing, and because of that increase, you need a system, a learning system, an AI system, to really react to that, whether it's on, How do I get people on the top of the funnel? How do I re-optimize the revenue that I can get from those customers? How do I manage the order and all the service issues? This is where AI can really help, and we feel like these three trends are good for us long term. Okay, and then B2B is such a broad term for the industries you serve. Are there specific industries that are more conducive to that? So, distribution and discrete manufacturing, process manufacturing, those are places where we're seeing a lot of traction, certainly right now. They're usually characterized by either lots of SKUs or very configurable products, and because of that, and a lot of the supply chain issues that feed into those, that gives our opportunity for our solutions to really shine. I mean, we have a customer, BASF is the largest chemical producer in the world, and, the perfect example of them, we talked about them on the Q2 earnings call. So they actually have been using our, our price optimization, our CPQ solution. Obviously, chemicals has dealt with a lot of challenges from a supply chain perspective and inflation perspective, and because of the value they get from PROS and how it's helping them proactively manage that, they're actually expanding it globally to their entire organization. So we're super pleased with the progress there, and I think it underscores kind of what Sunil is saying, of the more volatile markets get, which seems to just be the case over time, you know, the more necessary it is to have a solution that's AI-built, that, allows you to be proactive. Okay. I think there's only, like, two minutes left, so. Oh, sure. I'll jump in, Jason. I'm just curious, what are the thoughts on the balance sheet today, kind of given, you know, you got convert out there, you got some cash, cash equivalent- Mm-hmm. I mean, how are you thinking about sort of managing that, I guess, as you kind of go forward? Yeah. So we do have one convert that's out in 2027. We did just retire the remaining, it was about $22 million of our 2024 converts with cash in the second quarter. And we're now generating cash as a business, so we're free cash flow positive. We will be this year, and we plan to make improvements on that every year as we get out to our Rule of 40 target. So right now, from a balance sheet perspective, we're comfortable with how we are right at the moment, and our plans to continue to generate cash. And I think, obviously, cash is expensive in this kind of market, so being in a place where you're generating it on your own is ideal. So we're happy to be in this position, and we'll kind of see as we get out to 2027, how things look at that time and what options are available. But we feel good about what we have from a strategic flexibility standpoint. Okay. No, good question. With that, I'd like to just close it up. Maybe last question. I don't know if Andres or, or Stefan are listening, but maybe tell us something that investors may not know about one of them and, or maybe what you like to do in your free time. You know, it's probably easier for me to talk about Andres and Stefan then. Yeah Since I have the opportunity on stage. You know, one of the things that I would, I would say, about them is, you know, when you see typical tech execs and things like that, you don't always appreciate how much they value the people. And so the, the amount of time that they spend talking to our employees all around the world, is really incredible. And that's what makes our culture really special on there. I would agree. I'd echo that. They are currently at our board meeting right now, so shout out to them and our entire board for being there. And, I would say, yeah, I think fun facts are Andres just bought a house in Park City. Oh Which we were just talking about that. Yeah. So if, you know, if things move to Park City, then that's good location for us. Okay. Um, yeah. All of that governance team now. Yeah. Perfect. Thanks again for making it out. Thank you Even with the travel delays, so thanks so much. Yeah. Thanks, Jason. Thanks, everyone. Appreciate it.