PROS Holdings, Inc. (PRO): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed view of where PROS Holdings, Inc. is putting its capital and what's actually generating cash right now, especially with that Thoma Bravo acquisition pending. Honestly, the portfolio shows a classic tech split: the AI-powered Smart POM and CPQ are the Stars driving 11% year-over-year Subscription ARR growth, but the sticky Airline Revenue Management is the Cash Cow, set to deliver about $43 million in Adjusted EBITDA for FY 2025. Still, we have to factor in the low-margin Professional Services pulling down the average-that's the Dog-and the big R&D spend on the new AI Agents, which are the Question Marks needing serious investment to become the next growth engine. Let's break down exactly where your capital is working inside PROS Holdings, Inc. right now.

Background of PROS Holdings, Inc. (PRO)

PROS Holdings, Inc. (PRO) is a company that provides software-as-a-service solutions powered by artificial intelligence, focusing on optimizing pricing and selling experiences for businesses. They help companies across various industries create, optimize, and market offers while handling orders across digital channels. You can think of their core offering as intelligent commerce, leveraging revenue and pricing science.

Looking at the most recent figures, PROS Holdings, Inc. reported its third quarter 2025 financial results on October 27, 2025. For that quarter, the total revenue came in at $91.7 million, which was an 11% increase compared to the same period last year. Honestly, the growth engine here is clearly the subscription side of the business.

Subscription revenue, which is the recurring, more predictable part of their business, hit $76.0 million in Q3 2025, marking a 13% year-over-year jump. This strong subscription performance helped expand the total gross margin by about 300 basis points to 69%, with the non-GAAP total gross margin reaching 71%.

To be fair, the bottom line showed a net loss of $4.2 million in the third quarter, translating to an earnings per share loss of -$0.09. Still, the company showed significant improvement in cash generation, with Free Cash Flow jumping to $11.5 million in Q3 2025, up substantially from $1.4 million the year prior.

Strategically, a major event occurred in late 2025: PROS Holdings, Inc. entered into a definitive agreement on September 22, 2025, to be acquired by Thoma Bravo L.P. This all-cash transaction valued the company at approximately $1.4 billion, or $23.25 per share. The company's solutions portfolio includes PROS Smart Price Optimization and Management, PROS Smart Configure Price Quote (CPQ) solutions, and offerings for the airline industry.

The market recognizes their product strength; for instance, PROS was named an ISG 2025 CPQ leader for the fourth consecutive quarter. Plus, they recently received recognition as a finalist for the 2025 Microsoft Dynamics 365 Sales and Customer Insights Partner of the Year Award in November 2025. Finance: draft the pro-forma balance sheet impact of the Thoma Bravo acquisition by next Tuesday.

PROS Holdings, Inc. (PRO) - BCG Matrix: Stars

You're looking at the engine room of PROS Holdings, Inc., the segment where market share and growth are both high. These are the products demanding capital to stay ahead of the curve, but they are the ones defining the future revenue trajectory.

The AI-powered Smart Price Optimization and Management (POM) solution is a key component here, operating in a space where PROS Holdings, Inc. maintains a leadership position in pricing software. Also critical is the Smart Configure Price Quote (CPQ) solution.

For the Smart CPQ offering, the market validation is clear: PROS Holdings, Inc. was named a Leader in Overall Product Experience and Customer Experience in the 2025 ISG CPQ Buyers Guide. This evaluation assessed 18 vendors in the space, confirming the product's top-tier standing based on criteria like Adaptability, Capability, Manageability, Reliability, and Usability. Furthermore, the Smart Price Optimization and Management solution has achieved placement on the SAP® Store.

These core SaaS products are directly responsible for the strong top-line momentum in the recurring revenue base. The business is projecting Subscription Annual Recurring Revenue (ARR) to hit a range of $310-$313 million for Fiscal Year 2025. This growth is being driven by a reported 11% year-over-year increase in Subscription ARR, which is the metric you use to track the cloud business trajectory.

To give you a snapshot of the recent performance fueling this Star status, here are some key subscription metrics:

The need for heavy investment is a direct consequence of this high-growth market share. You see this commitment in the balance sheet; for instance, PROS Holdings, Inc. invested $23 million in research and development during the second quarter of 2025 alone. This spending is necessary to maintain the competitive edge against established players like Salesforce and SAP, ensuring the AI capabilities remain mission critical.

The investment focus is on sustaining market leadership, which translates to:

• Embedding advanced AI for responsiveness and accuracy.
• Maintaining consistency, compliance, and profitability at scale.
• Supporting complex configuration, dynamic pricing, and buyer-specific terms.

If PROS Holdings, Inc. can sustain this success as the market growth rate naturally decelerates, these products are positioned to transition into the Cash Cow quadrant. Finance: draft 13-week cash view by Friday.

PROS Holdings, Inc. (PRO) - BCG Matrix: Cash Cows

You're looking at the core engine of PROS Holdings, Inc. (PRO) profitability, the segment that generates more cash than it consumes, which is exactly what a Cash Cow should do. This is anchored by the overall Subscription Revenue base, which demonstrated a high non-GAAP gross margin of exactly 80% as of the second quarter of 2025. That margin performance is a clear indicator of a mature, high-value offering where competitive advantage has been firmly established.

Here's a quick look at the key financial markers supporting this quadrant's strength, based on the latest guidance and reported figures:

The stickiness you're looking for is evident in the established, long-standing Airline Revenue Management solutions. This segment benefits from high customer commitment, evidenced by the trailing twelve-month gross revenue retention rate, which remains better than 93%. We see this stability in recent contract activity, including expansions with major players like American Airlines and new wins such as Air Greenland. Because this market is mature and PROS Holdings, Inc. (PRO) holds a strong position, the need for heavy promotional spending is low, allowing the segment to passively milk those gains.

This highly profitable recurring revenue stream is the primary source underpinning the company's projected full-year 2025 Adjusted EBITDA. Management has guided this metric to a range between $42 million and $44 million for the full fiscal year 2025, with the outline suggesting a target of $43 million. This cash generation is crucial; it's what funds the company's administrative needs and allows for strategic investment elsewhere in the portfolio.

Furthermore, the segment generates significant Free Cash Flow, which is the ultimate measure of a Cash Cow's value to the enterprise. The guidance for the full fiscal year 2025 Free Cash Flow is set robustly between $40 million and $44 million. You want to maintain productivity here, definitely, because this cash flow is what keeps the lights on and funds the potential Stars and Question Marks.

• Subscription Revenue CAGR (FY15 - FY24): 28%
• Subscription Revenue (FY 2025 Guidance Midpoint): Approximately $296.5 million
• Q2 2025 Recurring Revenue as a percentage of Total Revenue: 86%

PROS Holdings, Inc. (PRO) - BCG Matrix: Dogs

You're looking at the segment of PROS Holdings, Inc. (PRO) that fits squarely into the Dogs quadrant, which is the Professional Services/Services Revenue stream. This revenue is non-recurring, and honestly, it carries a lower margin compared to the core Software-as-a-Service (SaaS) business.

This segment is not a strategic growth driver for PROS Holdings, Inc. (PRO), even though the business is necessary for initial implementation work. It's a necessary evil, perhaps, but it's definitely not where the future growth story is written.

Here are the key characteristics that define this unit as a Dog, based on the latest available data:

• Dogs are in low growth markets and have low market share.
• Dogs should be avoided and minimized.
• Expensive turn-around plans usually do not help.
• Dogs are units or products with a low market share and low growth rates.
• They frequently break even, neither earning nor consuming much cash.
• These business units are prime candidates for divestiture.

The financial reality in the third quarter of 2025 shows this dynamic clearly. The Services segment brought in only $15.7 million of the Q3 2025 total revenue of $91.7 million, which works out to about 17.1% of the total top line. That's a small slice of the pie.

The growth profile confirms its Dog status. The growth rate for this services component is slower than the subscription business, and this slower pace is actively pulling down the overall total revenue growth. For the full fiscal year 2025, the projected total revenue growth rate is 9%. In contrast, the core subscription business saw a year-over-year growth of 13% in Q3 2025 alone. That difference in growth rates is what keeps the Services segment firmly in the low-growth category relative to the rest of the company.

Here's the quick math on the Q3 2025 revenue split, showing the core business dwarfs the services component:

The focus for PROS Holdings, Inc. (PRO) management should definitely be on shifting the revenue mix away from this segment over time, perhaps by relying more on channel partners for implementation or simplifying the deployment process. If onboarding takes 14+ days, churn risk rises, and that ties up resources better spent on the high-growth SaaS engine.

Finance: draft 13-week cash view by Friday.

PROS Holdings, Inc. (PRO) - BCG Matrix: Question Marks

You're looking at the new, high-potential bets PROS Holdings, Inc. is placing to secure its next phase of growth. These are the Question Marks: products and strategic moves in growing markets where the company is still fighting to establish a dominant position. They are cash consumers right now, but the upside is turning them into Stars.

The primary focus here is the newly introduced PROS AI Agents, which were in pilot stages as of Q3 2025. These agents, which combine natural language and numerical reasoning for goal-oriented automation, are key to unlocking productivity for buyers and sellers. The company was named a leader in the 2025 CPQ Buyers Guide by ISG, which it attributes directly to these AI agents and enhanced industry-specific solutions.

This push is being supported by a major strategic alignment: the partnership with Commerce (formerly BigCommerce) to integrate pricing and CPQ capabilities directly with e-commerce platforms. This initiative is designed to capture a new, high-growth channel by leveraging reseller networks, which is a direct go-to-market investment to quickly gain share in that segment.

These Question Marks are consuming capital now to secure future recurring revenue streams. For example, PROS Holdings, Inc. invested $23 million in research and development during the second quarter of 2025, underscoring its commitment to AI and cloud innovation. This investment is aimed at accelerating subscription growth beyond the 11% rate projected for the full year 2025 subscription revenue guidance of $294.0 million to $296.0 million.

The early results show promise, suggesting these investments are beginning to pay off, though the full market share capture is yet to be realized. The subscription revenue growth in Q3 2025 hit 13% year-over-year, reaching $76.0 million, slightly ahead of the 11% full-year projection.

Here's a look at the investment context versus the current growth trajectory:

The strategy for these Question Marks is clear: heavy investment is required to rapidly increase market share before these new offerings stagnate and risk becoming Dogs. The success of the AI Agents and the Commerce partnership will determine if PROS Holdings, Inc. can convert this high-growth potential into a Star quadrant position.

The key indicators you should watch for to gauge success in this quadrant are:

• Acceleration of subscription revenue growth above the 13% Q3 rate.
• The rate of new customer wins in B2B sectors like manufacturing and life sciences.
• The impact of the Commerce partnership on distribution channel bookings.
• The trend in operating expenses, specifically Sales & Marketing spend, as the go-to-market efforts scale.

If onboarding takes longer than expected, churn risk rises. Finance: draft 13-week cash view by Friday.