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Why Pros Holdings Shares Jumped Today

Evan Niu, CFA, The Motley Fool

What happened

Shares of Pros Holdings (NYSE: PRO) have jumped today, up by 12% as of 10:50 a.m. EDT, after the e-commerce software specialist reported first-quarter earnings results. Both top- and bottom-line figures topped analysts' expectations.

So what

Revenue in the first quarter increased 17% to $56.1 million, ahead of the $54.7 million in sales that analysts were modeling for. That all led to a non-GAAP net loss of $4.2 million, or $0.11 per share. The consensus estimate had called for an adjusted loss of $0.14 per share. Subscription revenue grew 45% to $30.4 million, with non-GAAP subscription gross margin expanding by 7.5 percentage points to 71%.

Rising blue and orange stock chart

Image source: Getty Images.

"I'm incredibly pleased with our strong start to 2019," CEO Andres Reiner said in a statement. He continued:

We are seeing a tailwind in our market as companies are creating strategic initiatives around AI and digital transformation. Our sales funnel is growing as companies are seeking out our AI solutions to transform how they sell in the digital economy, and our strong market momentum contributed to more than a 40% increase in year-over-year deal volume. The strength of our people and product strategy has positioned us exceptionally well to take advantage of the attractive market opportunity in front us.

Now what

In addition to better-than-expected results in the first quarter, Pros also issued upbeat guidance for the second quarter and raised its outlook for the year.

Total revenue in the second quarter is expected to be $61 million to $62 million, compared to the Street's forecast of $56.3 million in sales. Within total revenue, subscription revenue should be $32.5 million to $33 million. Non-GAAP loss per share is expected to be $0.09 to $0.11, with adjusted EBITDA of negative $3 million to negative $4 million.

For the full year, revenue is forecast at $241 million to $242 million, up from prior guidance issued in February of $231 million to $233 million. Subscription revenue for 2019 is now expected to be $135 million to $136 million, up from $130 million to $131 million.

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Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.