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PROS HOLDINGS, INC. FOURTH QUARTER & FULL YEAR 2020 EARNINGS CONFERENCE CALL TRANSCRIPTFEBRUARY 04, 2021Stefan SchulzThank you, Andres.Like Andres, I'm also very proud of our entire team, as we continue to execute and support our customers despitethe challenges related to the pandemic, that continue to persist.I'll start by highlighting some of our fourth quarter and full year key metrics. Subscription revenue was 42.9 million,up 5% year-over-year, while our full year subscription revenue was 170.5 million, which was up 17% year-overyear. The growth in subscription revenue drove the slight growth in total revenue for the year, which came in at 252.4 million.Our revenue was impacted by customers that were significantly affected by COVID, including some customers thatdeclared bankruptcy. As a result, our gross revenue retention for the year was approximately 88%. However,absent the impact of COVID, our gross revenue retention would have been between 92% and 93%, which isconsistent with the retention rate last year and the expectations shared last quarter.Our recurring revenue as a percentage of total revenue continued to grow and was 86% for the fourth quarter and85% for the full year.Full-year non-GAAP subscription gross margins were 72% as compared to 73% last year. The decline insubscription gross margins can be attributed to investment increases in our infrastructure and the reduced revenuefrom customers impacted by COVID.Fourth quarter and full-year non-GAAP total gross margins were 61%. This compares to 60% in the fourth quarterlast year and 63% for the full-year in 2019. The decline in full-year gross margins can also be attributed to theimpact COVID has had on our total revenue.Adjusted EBITDA loss was 4.2 million for the quarter, which was significantly better than expected. Theoutperformance was driven mostly by additional cost savings realized during the quarter. We were able to improveupon our cost savings goals each quarter during 2020. Starting in the second quarter, we initiated a cost savingsprogram which targeted savings of 13 million versus our original plan. For the year, we ended up savingapproximately 25 million.Our trailing 12-month calculated billings decreased 18% year-over-year, which was a higher decline than thechange in Annual Recurring Revenue, or ARR. The larger decrease was driven by certain one-time billings eventsthat positively impacted our 2019 calculated billings as well as several customer contract restructurings in 2020which deferred billings into future periods.Our ARR, was 209.7 million at the end of the year, and exceeded the guidance range we set last quarter. OurARR includes both subscription and maintenance contracts and the subscription component now represents morethan 80% of our total ARR.We generated 11.4 million in free cash flow during the fourth quarter, which resulted in full-year free cash flowburn of 53.3 million. This was significantly better than expected, as a result of our near-record fourth quarter cashcollections.We were able to collect a substantial majority of payment deferrals previously offered to customers. At the end ofthe third quarter, we disclosed approximately 26 million in customer payment deferrals that were included in ouraccounts receivable. At the end of the year, that amount had fallen to approximately 12 million.5 Page

PROS HOLDINGS, INC. FOURTH QUARTER & FULL YEAR 2020 EARNINGS CONFERENCE CALL TRANSCRIPTFEBRUARY 04, 2021We exited 2020 with 329 million of cash and investments and have access to an additional 50 million through ourunused revolving line of credit.As previously mentioned, we have aligned to a virtual-first sales model and streamlined our organization alongindustry and geographic lines. We've also increased our investments in our Revenue Operations team whichincludes an increased focus on sales and partner enablement. Through this process, we reduced the number ofquota-carrying personnel to 51 at the end of the year. This is a temporary decline as we have already started tobuild our sales team in 2021. We expect to increase the number of quota-carrying personnel throughout the yearand exit the year with more than 60 people.Before turning to guidance, I would like to discuss the continuing impact COVID is having on our business. Thereduction in bookings and contract restructurings due to COVID during 2020 will have an impact on our revenuegrowth rate in 2021. While we believe we will grow this year, many of our customers are still experiencing negativeeffects to their businesses caused by COVID - this is especially true for our travel-related customers. Due to thecontinued uncertainty and variability in the macro environment, we are not providing guidance for the full year atthis time, but we will continue to provide quarterly guidance just as we did during 2020.For the first quarter of 2021, we expect subscription revenue to be in the range of 42 million to 42.5 million.We expect first quarter total revenue to be in the range of 59.7 million to 60.7 million.We expect first quarter Adjusted EBITDA loss to be between 12 million and 13 million.Lastly, with an estimated non-GAAP tax rate of 22%, we anticipate first quarter non-GAAP loss per share ofbetween 0.27 and 0.29 per share, based on an estimated 44.2 million basic shares outstanding.Lastly, even though we are not providing annual guidance, we do believe free cash flow will improve by at least 15million.Before I turn it over to questions, I would like to mention that we will be adopting new accounting guidance forconvertible debt. Beginning in the first quarter of 2021, our convertible debt will be presented on the balance sheetat par value rather than the discounted balance. We believe this change will simplify our presentation, and it willhave no impact on our non-GAAP operating results or cash flow.In closing, I am incredibly proud of our employees who continue to remain focused on helping our customers duringthese turbulent times.I thank you for your support of PROS and we look forward to speaking with you at upcoming events.I will now turn the call back over to the Operator for questions. Operator?6 Page

PROS HOLDINGS, INC. FOURTH QUARTER & FULL YEAR 2020 EARNINGS CONFERENCE CALL TRANSCRIPTFEBRUARY 04, 2021OperatorThank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question,please press star, one on your telephone keypad. A confirmation tone will indicate your line is in the questionqueue. You may press star, two if you would like to remove your question from the queue. For participants usingspeaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment,please, while we poll for questions.Our first question is from Scott Berg with Needham & Company. Please proceed with your question.AlexHi, this is Alex on for Scott. Thanks for taking my question. We saw the Company announce several airline dealswith the likes of companies like Emirates that had agreed to migrate to the cloud right before the pandemic. Haveyou seen any of these travel customers move forward with these migrations plans yet, or are they holding off untiltheir respective businesses improve?Andres ReinerThis is Andres. Yes, we have seen, as an example, Emirates, has migrated to the cloud, so we've seen our travelcustomers continue to evolve their migrations. We also talked last quarter about Qatar moving to DSO migrating tothe cloud. So we have seen some of them invest in this time period to come out stronger and, I'd say, recover.AlexGreat. And then when you're looking at the composition of your ramping B2B bookings from the pandemic lows, arethese deals more weighted towards newer e-commerce usage for pricing optimization needs, or are they smallerbite-sized deals the Company will have success within 2019, or are these more traditional larger pricingoptimization deals that the Company has been seeing?Andres ReinerYes. So we're seeing a little bit of both. We've seen some companies in B2B start small and want to drive value inspecific markets, but we're seeing also a lot of companies lean in to this digital sales motion and wanting to startsolutions to help them drive success in terms of powering digital channels as well.AlexGreat. Thank you. That's all for me.Andres ReinerThank you.OperatorOur next question is from Rob Oliver with Baird. Please proceed with your question.7 Page

PROS HOLDINGS, INC. FOURTH QUARTER & FULL YEAR 2020 EARNINGS CONFERENCE CALL TRANSCRIPTFEBRUARY 04, 2021Rob OliverGreat. Good evening guys. Thanks very much. Happy New Year to everybody as well. Stefan, a couple ofquestions for you just on your comment around sales headcount. I just want to understand what you said. I thinkyou said you took sales headcount down into year-end but you expected then the baseline to maybe go higher. Soif that's right, just a couple of questions around that. Was that a result of sort of confidence around the (inaudible)go-to-market not needing as many sales people in certain (inaudible) verticals, or a combination of those two? Andthen as you think about sales headcount throughout this year, if you can give us some sense of how you think thatmight look? For year-end I think you said you're at 51 quota carrying now, and if that would be skewed moretowards the B2B side? Thanks. I realize there's a lot in there. I appreciate it.Stefan SchulzWell I'll take the last part first. So yes, it will be skewed more towards the B2B side and you should see progress aswe look to go beyond 60 people by the end of the year. You should see steady progress on that as we gothroughout 2021.In terms of what we did in the fourth quarter, you may remember we did signal that we felt like our quota carryingpersonnel was going to come down a little bit. It came down a little more than what we had signaled, but that wasall kind of by design. We went into the fourth quarter, started making plans about the areas we wanted to invest inand, quite honestly, there were some lower performers that were (inaudible) down as well.So, when you combine all of those things, we decided to go ahead and take advantage of the shifts that we'remaking, make the adjustments, understanding that this may appear and look as though there's some questionsabout whether or not there's the need for those sales people, but there are, we just made the decision to executeon the changes and then grow throughout the year.But the last thing I'll say, and I did comment on this as well in my prepared remarks, we do feel like there's anopportunity to be more effective and efficient in this virtual environment. We've started to see that happening fromthe second quarter through the fourth quarter, and we expect to see that continue into 2021 as well.Rob OliverThat's really helpful. Yes, and on that last point, and Andres, this may be for you. I think gearing those sales higheras you mentioned, Stefan, towards B2B seems right. I know that the wake of the pandemic even that area has seensome delays. I guess, just wondering, clearly there's some confidence you guys have and from a macroperspective I think we would share that, but are the things you guys are seeing right now, any shifts at yourcustomers that would indicate they're starting to move a bit more rapidly on the B2B side? Thank you guys verymuch.Andres ReinerA couple of things. I would say, look, part of us last year was building a foundation for long-term growth and we feltvery strong about coming into this year in terms of deal activity and pipeline, we're continuing to see those increasequite well, and really simplifying kind of our go-to-market based on industries. So that was part of the strategy. Butwe felt that (audio interference) long term is something that we felt the important changes to make to execute better(audio interference). As we look at the year in terms of the pipeline and the strength of pipeline, we're seeing thatimprove.8 Page

PROS HOLDINGS, INC. FOURTH QUARTER & FULL YEAR 2020 EARNINGS CONFERENCE CALL TRANSCRIPTFEBRUARY 04, 2021Stefan SchulzRob, hopefully, you were able to get all of that.Rob OliverI think I got—yes, I think I got most of it. A little bit of fade the end. But thank you guys very much. Appreciate it.Andres ReinerIs that better?Rob OliverYes, it's much better.Stefan SchulzThat's better, Andres. Thank you.Rob OliverThanks guys. Appreciate it.OperatorOur next question is from Tom Roderick with Stifel. Please proceed with your question.MaxHey guys. It's Max on for Tom. Thanks for taking my questions. I just want to start by kind of talking about the B2Bsuccess and how you said looking forward this year there's going to be a lot of work with partners and systemintegrators. Can you talk about how the SAP App Center and then also those partners impacted sales over the lastyear and quarter, I guess?Andres ReinerYes. In terms of our partner strategy, we continue to expand across multiple—we talked about Magento in the lastquarter and this quarter we talked about joining the SAP App Center. As you know, SAP has a very strongecosystem within our customer base, approximately 70% of our customers are from the SAP ecosystem, and it'sour continued investment over a decade into that ecosystem. We're seeing, I would say, a lot more opportunitiescome from the SAP ecosystem. But in general, what I would tell you is that our partner team is doing an amazingjob in increasing the number of the opportunities that are coming from our full partner ecosystem, which includesour Microsoft partnership, which is one of our strongest partners in the market, as well as partners like eWine(phon), Accenture and Deloitte, many of our other SI partners. And more and more I would tell you in the majority ofdeals, we're partnering with one of our strategic partners.9 Page

PROS HOLDINGS, INC. FOURTH QUARTER & FULL YEAR 2020 EARNINGS CONFERENCE CALL TRANSCRIPTFEBRUARY 04, 2021MaxYes. Actually, that's really helpful. And then thinking about airlines, I know that the previous forecast was no realnew airline bookings in the first half of '21. I imagine that's still pretty similar. But there's also kind of positive notes,like Breeze Airways signing on, whether or not they go live in the first half of the year will be seen later. If you couldtalk any more about kind of the expectation around that side that'd be great.Andres ReinerYes, no, I think the airline industry I think is still trying to innovate in the areas of digital sales motion. As you canimagine, as they come back online, the more they can move every aspect of their business, their contracts, theirgroup and their passenger side to be 100% frictionless sales motion the better. So digital retailing is resonating verywell and continuing to innovate on the latest generation revenue management solution.So I would say that at this point a lot of airlines are waiting to see the passenger volumes continue to improve. Theydid see with the roll-out of the vaccines and initial improvement, as I commented in my prepared remarks, butpredominantly it's been on the domestic side and leisure travel. We expect that to gradually improve. I would sayback half of the year we should see some improvement. But in the first half I would say travel is still going to be alittle bit better than last year but not a significant improvement.MaxGreat. Thanks. That's all for me.OperatorOur next question is from Jackson Ader with J.P. Morgan. Please proceed with your question.Jackson AderGreat. Thanks for taking my questions guys. The first one is just maybe a little bit more color on kind of theexpectations for ARR growth in '21. Not necessarily looking for, obviously, at the guidance, but just how should wethink about the relative growth or strength between airline and B2B? And also as you think about maybe the mixbetween renewal bookings and net new bookings, how that should shape up here in '21?Stefan SchulzYes, I'll let Andres comment on the new and renewal. But as I've said in my prepared remarks, we do expect ouroverall business to grow, and in order for us to be able to do that ARR has to grow as well, as you probably alreadyknow. B2B will definitely be the driver to that. We're not at this point in time planning on a significant recovery in thetravel space, at least as we're planning for 2021. And I think the reason for that is we're going to wait to see moremomentum building, not only from a passenger perspective, but also from an investment perspective. So as westart to see that, then we'll start to grow (phon) to more of a travel component to our growth plans. But our growthplans are primarily driven by B2B.Jackson AderOkay. Andres, anything on the mix between net new and renewals? And then I just have one quick follow-up.10 P a g e

PROS HOLDINGS, INC. FOURTH QUARTER & FULL YEAR 2020 EARNINGS CONFERENCE CALL TRANSCRIPTFEBRUARY 04, 2021Andres ReinerYes. So I would tell you last year or (inaudible), and it's been pretty standard throughout the year. So it's about 50%is new versus existing, and that's maintained. I expect that to continue to be similar this year. I would say we have apretty strong migration pipeline and we've continued to see success last year. We expect that to continue this year,as well as a pretty robust net new on the B2B side, obviously.Jackson AderOkay. The follow-up on gross retention, really appreciate the color on the difference between COVID impacts andnon-COVID impacts with the retention range. That 92% to 93% range is still kind of below I think what PROS wouldhave expected a couple of years ago, kind of closer to the mid 90s. Is this just a function of the mix continuing toshift more to B2B or is there something else that I may be missing?Stefan SchulzWell, yes, I think that's true. We've said that overall we were in the mid 90s and travel was going to be a little higherthan that and B2B was going to be a little lower than that, so there's certainly some of that in what you're seeing.But I would tell you that we do see a mid 90s and as we get through this type of an environment that we're in, we dosee us getting back to that in the future. I'll be honest, I don't know that we'll see it quite yet in 2021, but we do seegetting back to that mid 90s, as we kind of get back to that same mix of having the travel and B2B component. Butyes, to your point, no question that B2B is just slightly lighter than the travel component.Jackson AderOkay. Makes sense. Thank you.Andres ReinerThank you.Stefan SchulzMm-hmm.OperatorOur next question is from Chad Bennett with Craig-Hallum. Please proceed with your question.Chad BennettGreat. Thanks for taking my questions. Stefan, maybe for you. Just in terms of giving us an update on where youended up at year-end in terms of contract amendments or modifications, where we ended up. I think in the thirdquarter we were around 18 million at that point. Maybe I'm wrong. Maybe I'm dating myself. But just kind of wherewe are there, where we ended up?11 P a g e

PROS HOLDINGS, INC. FOURTH QUARTER & FULL YEAR 2020 EARNINGS CONFERENCE CALL TRANSCRIPTFEBRUARY 04, 2021Stefan SchulzYes. Yes, you're right. I commented last quarter on three different components. I talked about the amou

FOURTH QUARTER & FULL YEAR 2020 EARNINGS CONFERENCE CALL TRANSCRIPT FEBRUARY 04, 2021 1 P a g e C O R P O R A T E P A R T I C I P A N T S Belinda Overdeput, Senior Manager, Investor Relations . Senior Manager of Investor Relations. Belinda Overdeput Thank you, Operator. Good afternoon, everyone, and thank you for joining us. .