Market Overview

PROS Holdings, Inc. Reports Second Quarter 2018 Financial Results

Share:
  • Subscription revenue up 64% year-over-year.
  • Total revenue up 17% year-over-year.
  • Free cash flow improvement of $4.9 million year-over-year.

PROS
Holdings, Inc.
(NYSE:PRO), a cloud software company powering the
shift to modern commerce, today announced financial results for the
second quarter ended June 30, 2018.

CEO Andres Reiner stated, "I'm really pleased with the velocity that we
are driving in our business. In the first half of the year, we increased
our deal volume by 32%. We are in a great position to continue our
growth trajectory since our solutions sit squarely at the cross section
of two defining business trends of our time: digital transformation and
AI. Our strong momentum and large market opportunity contributed to our
Q2 beat and gives us confidence to improve our growth outlook for the
year."

Second Quarter 2018 Financial Highlights

Key financial results for the second quarter 2018 are shown
below. Throughout this press release, all dollar figures are in
millions, except net loss per share. Unless otherwise noted, all results
are on a reported basis and are compared with the prior-year period.

       
GAAP Non-GAAP
Q2 2018   Q2 2017   % Change Q2 2018   Q2 2017   % Change
Revenue:
Total Revenue 47.4 40.4 17% n/a n/a n/a
Subscription Revenue 22.0 13.4 64% n/a n/a n/a
Subscription and Maintenance Revenue 38.3 30.6 25% n/a n/a n/a
Profitability:
Gross Profit 28.7 24.3 18% 30.3 25.3 20%
Operating Loss (13.0) (16.7) nm (5.6) (10.1) nm
Net Loss (16.8) (19.5) nm (5.2) (7.0) nm
Net Loss Per Share (0.52) (0.62) nm (0.16) (0.22) nm
Adjusted EBITDA n/a n/a n/a (5.4) (9.5) nm
Cash:
Net Cash Used in Operating Activities (3.6) (9.1) nm n/a n/a n/a
Free Cash Flow n/a n/a n/a (5.2) (10.1) nm
 

The attached tables provide a summary of PROS results for the period,
including a reconciliation of GAAP to non-GAAP metrics.

Recent Business Highlights

  • Hosted PROS
    Outperform 2018
    global customer conference, the premiere
    conference for companies powering their digital transformation, where
    PROS unveiled plans to extend solution capabilities to fully integrate
    with leading eCommerce
    platforms, including Salesforce CloudCraze and SAP Hybris.
  • Announced a partnership with SAP
    Hybris
    to integrate PROS shopping and merchandising solutions with
    SAP's omnichannel commerce solution to deliver a best-of-breed digital
    selling solution to the airline industry.
  • Showcased PROS manufacturing solutions in the Microsoft booth at Hannover
    Messe 2018
    , the world's leading exhibition for industrial
    technology with more than 200,000 professionals in attendance,
    representing virtually every aspect of manufacturing.
  • Joined forces with YRC
    Freight
    at the SMC3 Connections Conference to share
    best practices related to leveraging predictive analytics in the
    logistics industry in a panel titled "Strategic Analytics: Maximizing
    Data and Information Value."
  • Awarded twelve prominent speaking positions to share PROS science and
    research thought leadership at prestigious conferences, including the 29th
    Annual Production and Operations Management Society (POMS)

    Conference, the 2018 INFORMS
    Revenue Management and Pricing Conference, and the Professional
    Pricing Society
    29th Annual Spring Pricing Workshops and
    Conference.
  • Appointed Michael
    Wu, Ph.D.
    , one of the world's premier authorities, thought leaders
    and authors on artificial intelligence, data science and the digital
    experience, as Chief Artificial Intelligence Strategist.

Financial Outlook

PROS anticipates the following for the third quarter and full year 2018
based on an estimated 32.8 million and 32.6 million, respectively, basic
weighted average shares outstanding and a 22% non-GAAP estimated tax
rate:

               
Q3 2018 Guidance

v. Q3 2017 at
Mid-Point

Full Year 2018
Guidance

v. Prior Year at
Mid-Point

Total Revenue $47.5 to $48.5 14% $192.0 to $194.0 14%
Subscription Revenue $23.0 to $23.5 47% $91.5 to $92.5 52%
ARR n/a n/a $187.0 to $190.0 17%
Non-GAAP Loss Per Share $(0.20) to $(0.18) nm n/a n/a
Adjusted EBITDA $(7.0) to $(6.0) $2.7 $(26.0) to $(24.0) $8.7
Free Cash Flow n/a n/a $(5.0) to $(2.0) $26.0
 

Conference Call

In conjunction with this announcement, PROS Holdings, Inc. will host a
conference call on Thursday, July 26, 2018, at 4:45 p.m. ET to discuss
the Company's financial results and business outlook. To access this
call, dial 1-877-407-9039 (toll-free) or 1-201-689-8470. The live
webcast of the conference call can be accessed under the "Investor
Relations" section of the Company's website at www.pros.com.

A telephone replay will be available until Thursday, August 9, 2018, at
1-844-512-2921 (toll-free) or 1-412-317-6671 using the pass code
13680874. An archived webcast of this conference call will also be
available in the "Investor Relations" section of the Company's website
at www.pros.com.

About PROS

PROS Holdings, Inc. (NYSE:PRO) is a cloud software company powering the
shift to modern commerce by helping companies create personalized and
frictionless buying experiences for their customers. Fueled by dynamic
pricing science and machine learning, PROS solutions make it possible
for companies to price, configure and sell their products and services
in an omni-channel environment with speed, precision and consistency.
Our customers, who are leaders in their markets, benefit from decades of
data science expertise infused into our industry solutions. To learn
more, visit www.pros.com.

Forward-looking Statements

This press release contains forward-looking statements, including
statements about our future financial performance; positioning;
management's confidence and optimism; customer successes; demand for
enterprise revenue, profit realization and modern commerce software
solutions; business expansion; business predictability; ARR; revenue;
adjusted EBITDA; free cash flow; shares outstanding and effective tax
rate. The forward-looking statements contained in this press release are
based upon our historical performance and our current plans, estimates
and expectations and are not a representation that such plans, estimates
or expectations will be achieved. Factors that could cause actual
results to differ materially from those described herein include risks
related to: (a) our ability to execute on our cloud strategy, (b)
reduced revenue and cash flow resulting from our transition to a cloud
strategy, (c) threats to the security of our or our customer's data, (d)
potential business or service disruptions from our third party data
centers, cloud platform providers or other unrelated service providers,
(e) market acceptance of our new products and product enhancements, (f)
the risk that the markets for our software do not grow as anticipated,
(g) the length of our sales cycles, (h) the risk that we will not be
able to maintain historical maintenance, support and subscription
renewal rates, (i) competition from vendors of sales, pricing, revenue
management and configure-price-quote solutions as well as from companies
internally developing their own solutions, (j) potential unauthorized or
improper actions of our personnel, (k) the risk that acquisitions we
have and may enter into in the future may be difficult to integrate,
fail to achieve our objectives, disrupt our business, dilute stockholder
value or divert management attention, (l) any downturn in sales to our
target markets, (m) potential delays or other challenges related to the
implementation of our solutions, (n) the difficulties of making accurate
estimates necessary to complete a project and recognize revenue, (o)
personnel risks associated with growing a business generally, (p) the
impact that a slowdown in the world or any particular economy has on our
business sales cycles, prospects' and customers' spending decisions,
timing of implementation decisions, payment and renewal decision, (q)
our debt repayment obligations, (r) the impact of currency fluctuations
on our results of operations, and (s) civil and political unrest in
geographic regions in which we operate. Additional information relating
to the uncertainty affecting PROS' business is contained in our filings
with the Securities and Exchange Commission. These forward-looking
statements represent PROS' expectations as of the date of this press
release. Subsequent events may cause these expectations to change, and
PROS disclaims any obligations to update or alter these forward-looking
statements in the future, whether as a result of new information, future
events or otherwise.

Non-GAAP Financial Measures

PROS has provided in this release certain financial information that has
not been prepared in accordance with GAAP. This information includes
non-GAAP income (loss) from operations, annual recurring revenue,
adjusted EBITDA, free cash flow, tax rate, net income (loss) and diluted
earnings (loss) per share. PROS uses these non-GAAP financial measures
internally in analyzing its financial results and believes they are
useful to investors, as a supplement to GAAP measures, in evaluating
PROS' ongoing operational performance and cloud-first transition.

Non-GAAP financial measures should not be considered in isolation from,
or as a substitute for, financial information prepared in accordance
with GAAP. Investors are encouraged to review the reconciliation of
these non-GAAP measures to their most directly comparable GAAP financial
measure as detailed above. A reconciliation of GAAP to the non-GAAP
financial measures has been provided in the tables included as part of
this press release, and can be found, along with other financial
information, in the investor relations portion of our website. PROS' use
of non-GAAP financial measures may not be consistent with the
presentations by similar companies in PROS' industry. PROS has also
provided in this release certain forward-looking non-GAAP financial
measures, including non-GAAP income (loss) from operations, annual
recurring revenue, adjusted EBITDA, free cash flow and non-GAAP tax
rates (collectively the "non-GAAP financial measures") as follows:

Non-GAAP income (loss) from operations: Non-GAAP income (loss)
from operations excludes the impact of stock-based compensation,
amortization of acquisition-related intangibles, acquisition-related
expenses, amortization of debt discount and issuance costs, and related
taxes. Non-GAAP income (loss) from operations excludes the following
items from non-GAAP estimates:

  • Share-Based Compensation: Although share-based compensation is
    an important aspect of compensation for our employees and executives,
    our share-based compensation expense can vary because of changes in
    our stock price and market conditions at the time of grant, varying
    valuation methodologies, and the variety of award types. Since
    share-based compensation expense can vary for reasons that are
    generally unrelated to our performance during any particular period,
    we believe this could make it difficult for investors to compare our
    current financial results to previous and future periods. Therefore,
    we believe it is useful to exclude share-based compensation in order
    to better understand our business performance and allow investors to
    compare our operating results with peer companies.
  • Amortization of Acquisition-Related Intangibles: We view
    amortization of acquisition-related intangible assets, such as the
    amortization of the cost associated with an acquired company's
    research and development efforts, trade names, customer lists and
    customer relationships, as items arising from pre-acquisition
    activities determined at the time of an acquisition. While these
    intangible assets are continually evaluated for impairment,
    amortization of the cost of purchased intangibles is a static expense,
    one that is not typically affected by operations during any particular
    period.
  • Acquisition-Related Expenses: Acquisition-related expenses
    include integration costs and other one-time direct costs associated
    with our acquisitions. These amounts are unrelated to our core
    performance during any particular period and are impacted by the
    timing and size of the acquisitions. We exclude acquisition-related
    expenses to provide investors a method to compare our operating
    results to prior periods and to peer companies because such amounts
    can vary significantly based on the frequency of acquisitions and
    magnitude of acquisition expenses.
  • Amortization of Debt Discount and Issuance Costs: Amortization
    of debt discount and issuance costs are related to our convertible
    notes. These amounts are unrelated to our core performance during any
    particular period, and therefore, we believe it is useful to exclude
    these amounts in order to better understand our business performance
    and allow investors to compare our results with peer companies.
  • Taxes: We exclude the tax consequences associated with non-GAAP
    items to provide investors with a useful comparison of our operating
    results to prior periods and to our peer companies because such
    amounts can vary significantly. In the fourth quarter of 2014, we
    concluded that it is more likely than not that we will be unable to
    fully realize our deferred tax assets and accordingly, established a
    valuation allowance against those assets. The ongoing impact of the
    valuation allowance on our non-GAAP effective tax rate has been
    eliminated to allow investors to better understand our business
    performance and compare our operating results with peer companies.

Annual Recurring Revenue: Annual Recurring Revenue ("ARR") is
used to assess the trajectory of our cloud business. ARR means, as of a
specified date, the contracted recurring revenue, including contracts
with a future start date, together with annualized overage fees incurred
above contracted minimum transactions, and excluding perpetual and term
license agreements recognized as license revenue in accordance with
GAAP. ARR should be viewed independently of revenue and any other GAAP
measure.

Non-GAAP Tax Rate: The estimated non-GAAP effective tax rate
adjusts the tax effect to quantify the impact of the excluded non-GAAP
items.

Adjusted EBITDA: Adjusted EBITDA is defined as GAAP net income
(loss) before interest expense, provision for income taxes, depreciation
and amortization, as adjusted to eliminate the effect of stock-based
compensation cost, amortization of acquisition-related intangibles,
depreciation and amortization, integration costs and other one-time
direct costs associated with our acquisitions, and capitalized
internal-use software development costs. Adjusted EBITDA should not be
considered as an alternative to net income (loss) as an indicator of our
operating performance.

Free Cash Flow: Free cash flow is a non-GAAP financial measure
which is defined as net cash provided by (used in) operating activities,
less additions to property, plant and equipment, purchases of other
(non-acquisition-related) intangible assets and capitalized internal-use
software development costs.

These non-GAAP estimates are not measurements of financial performance
prepared in accordance with GAAP, and we are unable to reconcile these
forward-looking non-GAAP financial measures to their directly comparable
GAAP financial measures because the information described above which is
needed to complete a reconciliation is unavailable at this time without
unreasonable effort.

 

PROS Holdings, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

       
June 30, 2018 December 31, 2017
Assets:
Current assets:
Cash and cash equivalents $ 141,867 $ 160,505
Trade and other receivables, net of allowance of $983 and $760,
respectively
39,349 32,484
Deferred costs 3,053 3,137
Prepaid and other current assets 5,518   5,930  
Total current assets 189,787 202,056
Property and equipment, net 14,856 14,007
Long-term deferred costs 10,966 3,194
Intangibles, net 22,921 26,929
Goodwill 38,443 38,458
Other long-term assets 4,467   4,039  
Total assets $ 281,440   $ 288,683  
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable and other liabilities $ 4,725 $ 2,976
Accrued liabilities 8,828 6,733
Accrued payroll and other employee benefits 12,392 16,712
Deferred revenue 89,270   75,604  
Total current liabilities 115,215 102,025
Long-term deferred revenue 14,957 19,591
Convertible debt, net 219,108 213,203
Other long-term liabilities 819   843  
Total liabilities 350,099   335,662  
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none
issued

Common stock, $0.001 par value, 75,000,000 shares authorized;
37,128,924

and 36,356,760 shares issued, respectively; 32,711,339 and
31,939,175 shares

outstanding, respectively 37 36
Additional paid-in capital 212,481 207,924
Treasury stock, 4,417,585 common shares, at cost (13,938 ) (13,938 )
Accumulated deficit (264,161 ) (238,185 )
Accumulated other comprehensive loss (3,078 ) (2,816 )
Total stockholders' equity (68,659 ) (46,979 )
Total liabilities and stockholders' equity $ 281,440   $ 288,683  
       

PROS Holdings, Inc.

Condensed Consolidated Statements of Income (Loss)

(In thousands, except per share data)

(Unaudited)

 
Three Months Ended June 30, Six Months Ended June 30,
2018   2017 2018   2017
Revenue:
Subscription $ 22,038 $ 13,434 $ 42,988 $ 25,648
Maintenance and support 16,225   17,132   32,799   35,208  
Total subscription, maintenance and support 38,263 30,566 75,787 60,856
License 695 1,090 1,761 3,280
Services 8,468   8,750   17,788   16,399  
Total revenue 47,426 40,406 95,336 80,535
Cost of revenue:
Subscription 8,491 5,800 17,255 11,737
Maintenance and support 2,953   2,881   5,910   6,027  
Total cost of subscription, maintenance and support 11,444 8,681 23,165 17,764
License 64 72 137 137
Services 7,216   7,333   14,943   14,794  
Total cost of revenue 18,724   16,086   38,245   32,695  
Gross profit 28,702 24,320 57,091 47,840
Operating expenses:
Selling and marketing 18,590 17,172 36,158 33,645
General and administrative 10,145 9,782 20,834 20,190
Research and development 12,960 14,076 27,744 28,383
Acquisition-related     95    
Loss from operations (12,993 ) (16,710 ) (27,740 ) (34,378 )
Convertible debt interest and amortization (4,226 ) (2,590 ) (8,405 ) (4,984 )
Other income (expense), net 244   (64 ) 446   (32 )
Loss before income tax (benefit) provision (16,975 ) (19,364 ) (35,699 ) (39,394 )
Income tax (benefit) provision (131 ) 149   1   326  
Net loss $ (16,844 ) $ (19,513 ) $ (35,700 ) $ (39,720 )
 
Net loss per share:
Basic and diluted $ (0.52 ) $ (0.62 ) $ (1.10 ) $ (1.27 )
Weighted average number of shares:
Basic and diluted 32,651 31,615 32,514 31,357
       

PROS Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
Three Months Ended June 30, Six Months Ended June 30,
2018   2017 2018   2017
Operating activities:
Net loss $ (16,844 ) $ (19,513 ) $ (35,700 ) $ (39,720 )
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization 3,256 1,972 6,620 4,005
Amortization of debt discount and issuance costs 2,988 1,835 5,929 3,510
Share-based compensation 5,462 5,932 11,398 12,094
Deferred income tax, net (252 ) (252 ) 33
Provision for doubtful accounts 215 215
Loss on disposal of assets 2 37
Changes in operating assets and liabilities:
Accounts and unbilled receivables (10,556 ) (406 ) (7,102 ) 137
Deferred costs (880 ) (642 )
Prepaid expenses and other assets 1,513 (315 ) (62 ) (981 )
Accounts payable and other liabilities 1,039 (793 ) 1,729 2,838
Accrued liabilities 3,529 (147 ) 2,114 287
Accrued payroll and other employee benefits 3,854 2,356 (4,327 ) (8,601 )
Deferred revenue 3,096   (37 ) 11,733   5,089  
Net cash used in operating activities (3,578 ) (9,116 ) (8,310 ) (21,309 )
Investing activities:
Purchases of property and equipment (409 ) (211 ) (1,187 ) (695 )
Capitalized internal-use software development costs (1,168 ) (736 ) (2,484 ) (1,308 )
Proceeds from maturities of short-term investments       9,983  
Net cash (used in) provided by investing activities (1,577 ) (947 ) (3,671 ) 7,980
Financing activities:
Exercise of stock options 326 3,078 1,201 5,276
Proceeds from employee stock plans 834 776
Tax withholding related to net share settlement of stock awards (1,713 ) (89 ) (8,968 ) (5,754 )
Payments of notes payable 3 (105 ) (55 ) (155 )
Debt issuance costs related to Revolver (125 )
Proceeds from issuance of convertible debt, net   93,500     93,500  
Net cash (used in) provided by financing activities (1,384 ) 96,384 (6,988 ) 93,518
Effect of foreign currency rates on cash 260   (220 ) 331   (259 )
Net change in cash and cash equivalents (6,279 ) 86,101 (18,638 ) 79,930
Cash and cash equivalents:
Beginning of period 148,146   111,868   160,505   118,039  
End of period $ 141,867   $ 197,969   $ 141,867   $ 197,969  
 

PROS Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)

 

We use these non-GAAP financial measures to assist in the
management of the Company because we believe that this information
provides a
more consistent and complete understanding of the
underlying results and trends of the ongoing business due to the
uniqueness of these charges.

See breakdown of the reconciling line items on page 9.

         
Three Months Ended June 30,

Quarter
over
Quarter

Six Months Ended June 30,

Year over
Year

2018   2017 % change 2018   2017 % change
GAAP gross profit $ 28,702 $ 24,320 18 % $ 57,091 $ 47,840 19 %
Non-GAAP adjustments:
Amortization of acquisition-related intangibles 1,181 485 2,422 962
Share-based compensation 398   515   880   1,090  
Non-GAAP gross profit $ 30,281   $ 25,320   20 % $ 60,393   $ 49,892   21 %
 
Non-GAAP gross margin 63.8 % 62.7 % 63.3 % 62.0 %
 
GAAP loss from operations $ (12,993 ) $ (16,710 ) (22 )% $ (27,740 ) $ (34,378 ) (19 )%
Non-GAAP adjustments:
Acquisition-related expenses 95
Amortization of acquisition-related intangibles 1,897 680 3,912 1,349
Share-based compensation 5,462   5,932   11,398   12,094  
Total Non-GAAP adjustments 7,359   6,612   15,405   13,443  
Non-GAAP loss from operations $ (5,634 ) $ (10,098 ) (44 )% $ (12,335 ) $ (20,935 ) (41 )%
 
Non-GAAP loss from operations % of total revenue (11.9 )% (25.0 )% (12.9 )% (26.0 )%
 
GAAP net loss $ (16,844 ) $ (19,513 ) (14 )% $ (35,700 ) $ (39,720 ) (10 )%
Non-GAAP adjustments:
Total Non-GAAP adjustments affecting loss from operations 7,359 6,612 15,405 13,443
Amortization of debt discount and issuance costs 2,976 1,818 5,905 3,493
Tax impact related to non-GAAP adjustments 1,330   4,084   3,167   8,410  
Non-GAAP net loss $ (5,179 ) $ (6,999 ) (26 )% $ (11,223 ) $ (14,374 ) (22 )%
 
Non-GAAP diluted loss per share $ (0.16 ) $ (0.22 ) $ (0.35 ) $ (0.46 )
 
Shares used in computing non-GAAP loss per share 32,651 31,615 32,514 31,357
 

PROS Holdings, Inc.

Supplemental Schedule of Non-GAAP Financial Measures

Increase (Decrease) in GAAP Amounts Reported

(In thousands)

(Unaudited)

       
Three Months Ended June 30, Six Months Ended June 30,
2018   2017 2018   2017
Cost of Subscription Items
Amortization of acquisition-related intangibles 997 317 2,050 630
Share-based compensation 35   51   88   129
Total cost of subscription items $ 1,032   $ 368   $ 2,138   $ 759
 
Cost of Maintenance Items
Amortization of acquisition-related intangibles 172 158 349 312
Share-based compensation 54   84   132   173
Total cost of maintenance items $ 226   $ 242   $ 481   $ 485
 
Cost of License Items
Amortization of acquisition-related intangibles 12   10   23   20
Total cost of license items $ 12   $ 10   $ 23   $ 20
 
Cost of Services Items
Share-based compensation 309   380   660   788
Total cost of services items $ 309   $ 380   $ 660   $ 788
 
Sales and Marketing Items
Amortization of acquisition-related intangibles 716 195 1,490 387
Share-based compensation 1,284   1,131   2,568   2,404
Total sales and marketing items $ 2,000   $ 1,326   $ 4,058   $ 2,791
 
General and Administrative Items
Share-based compensation 2,688   2,880   5,567   5,682
Total general and administrative items $ 2,688   $ 2,880   $ 5,567   $ 5,682
 
Research and Development Items
Share-based compensation 1,092   1,406   2,383   2,918
Total research and development items $ 1,092   $ 1,406   $ 2,383   $ 2,918
       
Acquisition-related expenses $   $   $ 95   $
 

PROS Holdings, Inc.

Supplemental Reconciliation of GAAP to Non-GAAP Financial
Measures

(In thousands)

(Unaudited)

       
Three Months Ended June 30, Six Months Ended June 30,
2018   2017 2018   2017
Adjusted EBITDA
GAAP Loss from Operations $ (12,993 ) $ (16,710 ) $ (27,740 ) $ (34,378 )
Acquisition-related expenses 95
Amortization of acquisition-related intangibles 1,897 680 3,912 1,349
Share-based compensation 5,462 5,932 11,398 12,094
Depreciation 1,359 1,292 2,708 2,656
Capitalized internal-use software development costs (1,168 ) (736 ) (2,484 ) (1,308 )
Adjusted EBITDA $ (5,443 ) $ (9,542 ) $ (12,111 ) $ (19,587 )
 
Free Cash Flow
Net cash used in operating activities $ (3,578 ) $ (9,116 ) $ (8,310 ) $ (21,309 )
Purchase of property and equipment (409 ) (211 ) (1,187 ) (695 )
Capitalized internal-use software development costs (1,168 ) (736 ) (2,484 ) (1,308 )
Free Cash Flow $ (5,155 ) $ (10,063 ) $ (11,981 ) $ (23,312 )
 
 
Guidance Q3 2018 Guidance Full Year 2018 Guidance
Low High Low High
Adjusted EBITDA
GAAP Loss from Operations $ (14,600 ) $ (13,600 ) $ (56,300 ) $ (54,300 )
Amortization of acquisition-related intangibles 1,900 1,900 7,500 7,500
Share-based compensation 5,500 5,500 22,100 22,100
Depreciation 1,300 1,300 5,300 5,300
Capitalized internal-use software development costs (1,100 ) (1,100 ) (4,600 ) (4,600 )
Adjusted EBITDA $ (7,000 ) $ (6,000 ) $ (26,000 ) $ (24,000 )

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