##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period from                 to
 Commission File Number: 001-33554
 PROS HOLDINGS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    76-0168604(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 3100 Main Street, Suite 900, Houston, TX 77002
(713) 335-5151  (Address and telephone number of principal executive offices)
 þ o
 o þ
  Large Accelerated Filer o
    

Accelerated Filer þ
    

Non-Accelerated Filer o
    

Smaller Reporting Company o(Do not check if a smaller reporting company)
 o þ




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##### 



PagePART I. Financial InformationItem 1. Unaudited condensed consolidated financial statementsCondensed consolidated balance sheets at March 31, 2010 and December 31, 2009 (Unaudited)
    
    
    3Condensed consolidated statements of operations for the three months ended March 31, 2010 and 2009 (Unaudited)
    
    
    4Condensed consolidated statements of cash flows for the three months ended March 31, 2010 and 2009 (Unaudited)
    
    
    5Notes to unaudited condensed consolidated financial statements
    
    
    6Item 2. Managements discussion and analysis of financial condition and results of operations
    
    
    10Item 3. Quantitative and qualitative disclosures about market risk
    
    
    15Item 4. Controls and procedures
    
    
    16PART II. Other InformationItem 1. Legal proceedings
    
    
    16Item 1A. Risk factors
    
    
    17Item 2. Unregistered sales of equity securities and use of proceeds
    
    
    29Item 3. Defaults upon senior securities
    
    
    29Item 4. Submission of matters to a vote of security holders
    
    
    29Item 5. Other information
    
    
    29Item 6. Exhibits
    
    
    29Signatures
    
    
    32EX-31.1EX-31.2EX-32.1
   Except for the historical financial information contained herein, the matters discussed in
this report on Form 10-Q (as well as documents incorporated herein by reference) may be considered
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking
statements include declarations regarding the intent, belief or current expectations of PROS
Holdings, Inc. and its management and may be signified by the words expects, anticipates,
target, project, goals, estimates, potential, predicts, may, might, could,
intends, believes or similar language. You are cautioned that any such forward-looking
statements are not guarantees of future performance and involve a number of risks and
uncertainties. Actual results could differ materially from those indicated by such forward-looking
statements. Factors that could cause or contribute to such differences include those discussed
under Risk Factors and elsewhere in this report. PROS Holdings, Inc. disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
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PART I. Financial Information
 
 Item 1.
    
    Unaudited Condensed Consolidated Financial Statements
 PROS Holdings, Inc.

Consolidated Balance Sheets
(In thousands, except share amounts)
 (Unaudited)
 March 31,



December 31,2010




2009Assets:Current assets:Cash and cash equivalents
    
    $
    61,335
    
    
    $
    62,449Accounts and unbilled receivables, net of allowance
of $1,300
    
    
    18,999
    
    
    
    12,035Prepaid and other current assets
    
    
    4,095
    
    
    
    4,143Total current assets
    
    
    84,429
    
    
    
    78,627Restricted cash
    
    
    293
    
    
    
    Property and equipment, net
    
    
    3,018
    
    
    
    2,959Other long term assets, net
    
    
    3,845
    
    
    
    3,743Total assets
    
    $
    91,585
    
    
    $
    85,329Liabilities and Stockholders Equity:Current liabilities:Accounts payable
    
    $
    1,768
    
    
    $
    1,198Accrued liabilities
    
    
    2,699
    
    
    
    3,199Accrued payroll and other employee benefits
    
    
    3,813
    
    
    
    4,510Deferred revenue
    
    
    19,525
    
    
    
    14,099Other current liabilities
    
    
    4,866
    
    
    
    4,866Total current liabilities
    
    
    32,671
    
    
    
    27,872Long-term deferred revenue
    
    
    2,181
    
    
    
    2,418Commitments and contingencies (Note 4)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, 30,427,177 and 30,163,508 shares issued, respectively,
26,009,592 and 25,745,923 shares outstanding, respectively
    
    
    30
    
    
    
    30Additional paid-in capital
    
    
    64,660
    
    
    
    63,439Treasury stock, 4,417,585 common shares, at cost
    
    
    (13,938
    )
    
    
    (13,938
    )Retained earnings
    
    
    5,981
    
    
    
    5,508Total stockholders equity
    
    
    56,733
    
    
    
    55,039Total liabilities and stockholders equity
    
    $
    91,585
    
    
    $
    85,329
 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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PROS Holdings, Inc.
 
 Consolidated Statements of Operations  (In thousands, except share and per share data)  (Unaudited)
 For the Three MonthsEnded March 31,2010
    
    
    2009Revenue:License and implementation
    
    $
    10,372
    
    
    $
    11,924Maintenance and support
    
    
    6,955
    
    
    
    6,102Total revenue
    
    
    17,327
    
    
    
    18,026Cost of revenue:License and implementation
    
    
    3,220
    
    
    
    3,592Maintenance and support
    
    
    1,495
    
    
    
    1,226Total cost of revenue
    
    
    4,715
    
    
    
    4,818Gross profit
    
    
    12,612
    
    
    
    13,208Operating expenses:Selling, general and administrative
    
    
    6,632
    
    
    
    5,505Research and development
    
    
    5,214
    
    
    
    5,048Income from operations
    
    
    766
    
    
    
    2,655Other income:Interest income
    
    
    11
    
    
    
    90Income before income tax provision
    
    
    777
    
    
    
    2,745Income tax provision
    
    
    306
    
    
    
    755Net income
    
    $
    471
    
    
    $
    1,990Net earnings attributable to common
stockholders per share:Basic
    
    $
    0.02
    
    
    $
    0.08Diluted
    
    $
    0.02
    
    
    $
    0.08Weighted average number of shares:Basic
    
    
    25,912,444
    
    
    
    25,706,306Diluted
    
    
    26,551,166
    
    
    
    26,120,638
 The accompanying notes are an integral part of these unaudited condensed consolidated financial
statements.
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PROS Holdings, Inc.

Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 For the Three MonthsEnded March 31,2010
    
    
    2009Operating activities:Net income
    
    $
    471
    
    
    $
    1,990Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation
    
    
    330
    
    
    
    319Stock-based compensation
    
    
    1,419
    
    
    
    1,152Excess tax benefits on vesting of restricted stock units
    
    
    (532
    )
    
    
    Provision for doubtful accounts
    
    
    
    
    
    
    40Amortization of capitalized costs
    
    
    37
    
    
    
    60Changes in operating assets and liabilities:
    
    
    
    
    
    
    Accounts receivable
    
    
    (6,189
    )
    
    
    (601
    )Unbilled receivables
    
    
    (792
    )
    
    
    (889
    )Prepaid expenses and other
    
    
    309
    
    
    
    250Accounts payable, accrued liabilities
and accrued payroll
    
    
    (627
    )
    
    
    (1,831
    )Deferred revenue
    
    
    5,189
    
    
    
    (348
    )Net cash (used in) provided by operating activities
    
    
    (385
    )
    
    
    142Investing activities:Purchases of property and equipment
    
    
    (240
    )
    
    
    (118
    )Increase in
restricted cash
    
    
    (293
    )
    
    
    Net cash used in investing activities
    
    
    (533
    )
    
    
    (118
    )Financing activities:Exercise of stock options
    
    
    76
    
    
    
    17Excess tax benefits on vesting of restricted stock units
    
    
    532
    
    
    
    Tax withholding related to net share settlement of restricted stock units
    
    
    (804
    )
    
    
    Net cash (used in) provided by financing activities
    
    
    (196
    )
    
    
    17Net (decrease) increase in cash and cash
equivalents
    
    
    (1,114
    )
    
    
    41Cash and cash equivalents:Beginning of period
    
    
    62,449
    
    
    
    51,979End of period
    
    $
    61,335
    
    
    $
    52,020
 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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PROS Holdings, Inc.
 
 Notes to Unaudited Condensed Consolidated Financial Statements
 (unaudited)
 1. Summary of business and basis of presentation
 Nature of operations
  Basis of presentation
  Basis of consolidation
  Dollar amounts
  Use of estimates
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Fair value measurements
 Fair Value Measurement and Disclosure
 Deferred revenue and unbilled receivables
  Foreign currency
  Income taxes
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2. Earnings per share
  For the Three MonthsEnded March 31,2010
    
    
    2009Numerator:Net income attributable to common stockholders
    
    $
    471
    
    
    $
    1,990Denominator:Weighted average shares (basic)
    
    
    25,912
    
    
    
    25,706Dilutive effect of stock options, restricted stock
units and stock appreciation rights
    
    
    639
    
    
    
    415Weighted average shares (diluted)
    
    
    26,551
    
    
    
    26,121Basic earnings per share
    
    $
    0.02
    
    
    $
    0.08Diluted earnings per share
    
    $
    0.02
    
    
    $
    0.08
  3. Stock-based compensation
   4. Commitments and contingencies
 Litigation
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5. Subsequent events
  9




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Item 2. Managements discussion and analysis of financial condition and results of operations
 The terms we, us and our refer to PROS Holdings, Inc. and all of its subsidiaries that
are consolidated in conformity with accounting principles generally accepted in the United States
of America.
 Cautionary statement
 .
 Overview
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Trends and uncertainties
  
    
    Difficult Economic Conditions.We believe the market for pricing and margin
optimization software is underpenetrated and in the early innovator stage of
adoption. Market interest for our software has increased over the past several years.
The current economy continues to be challenging which may have a negative impact on
the adoption of pricing and margin optimization software. Due to the difficult
economic conditions, we are continuing to experience longer sales times, increased
scrutiny on purchasing decisions and overall cautiousness taken by customers. As a
way of dealing with a challenging economic environment, customers have been changing
their purchasing strategies, including, contract terms that, in some instances, have
affected the timing of revenue recognition or have resulted in an increase in the
number of limited term license agreements entered into over the past several quarters
as opposed to perpetual license agreements. We believe our solutions provide value to
our customers during periods of growth as well as in recessions, but it is uncertain
the extent to which the difficult economic conditions will further affect our
business.
    
    Variability in revenue among industries and geography.We sell our products to
customers in the manufacturing, distribution, services, hotel and cruise and airline
industries. From a geographical standpoint, approximately 56% and 57% of our
consolidated revenues were derived from customers outside the United States for the
three months ended March 31, 2010 and 2009, respectively. The current economic
environment could change our trends of revenue within industries and across
geographies if certain industries or geographies are more impacted than others.
    
    Litigation expense.We are currently involved in litigation with a customer related to our software. We expect to incur
approximately $1.2 million of litigation expense related to this
dispute in the second quarter of 2010. We
anticipate that the expense related to this litigation will increase as we approach trial which currently is scheduled for the first quarter of
2011. We believe the attempted termination of the contract is wrongful, and we
are vigorously defending this matter and seeking payment of remaining amounts owed
under the contract. For additional information on this litigation, please see
footnote 4 of the notes to unaudited condensed consolidated financial statements.
    
    Research and experimentation tax credit.At the end of 2009, Congress recessed
without reinstating the Research & Experimentation (R&E) tax credit beyond the
current expiration date of December 31, 2009. Since its enactment in 1981, Congress
has reinstated on a retroactive basis the R&E tax credit several times.
However, unless the R&E tax credit is reinstated, we will record federal income taxes
in 2010 at the enacted federal rate of 35%, net of other tax credits that may benefit
us, if any.
 Critical accounting policies and estimates
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Results of operations
 Comparison of three months ended March 31, 2010 with three months ended March 31, 2009
 Revenue:
 For the Three Months Ended March 31,2010
    
    
    2009As a percentage
    
    
    
    
    
    
    As a percentage(Dollars in thousands)
    
    Amount
    
    
    of total revenue
    
    
    Amount
    
    
    of total revenue
    
    
    Variance $
    
    
    Variance %License and implementation
    
    $
    10,372
    
    
    
    60
    %
    
    $
    11,924
    
    
    
    66
    %
    
    $
    (1,552
    )
    
    
    (13
    )%Maintenance and support
    
    
    6,955
    
    
    
    40
    %
    
    
    6,102
    
    
    
    34
    %
    
    
    853
    
    
    
    14
    %Total
    
    $
    17,327
    
    
    
    100
    %
    
    $
    18,026
    
    
    
    100
    %
    
    $
    (699
    )
    
    
    (4
    )%
 License and implementation.
 Maintenance and support.
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Cost of revenue and gross profit:
 For the Three Months Ended March 31,2010
    
    
    2009As a percentage
    
    
    
    
    
    
    As a percentage(Dollars in thousands)
    
    Amount
    
    
    of related revenue
    
    
    Amount
    
    
    of related revenue
    
    
    Variance $
    
    
    Variance %Cost of license and
implementation
    
    $
    3,220
    
    
    
    31
    %
    
    $
    3,592
    
    
    
    30
    %
    
    $
    (372
    )
    
    
    (10
    )%Cost of maintenance and
support
    
    
    1,495
    
    
    
    21
    %
    
    
    1,226
    
    
    
    20
    %
    
    
    269
    
    
    
    22
    %Total cost of revenue
    
    $
    4,715
    
    
    
    27
    %
    
    $
    4,818
    
    
    
    27
    %
    
    $
    (103
    )
    
    
    (2
    )%Gross profit
    
    $
    12,612
    
    
    
    73
    %
    
    $
    13,208
    
    
    
    73
    %
    
    $
    (596
    )
    
    
    (5
    )%
 Cost of license and implementation.
 Cost of maintenance and support.
 Gross profit.
 Operating expenses:
 For the Three Months Ended March 31,2010
    
    
    2009As a percentage
    
    
    
    
    
    
    As a percentage(Dollars in thousands)
    
    Amount
    
    
    of total revenue
    
    
    Amount
    
    
    of total revenue
    
    
    Variance $
    
    
    Variance %Selling, general and administrative
    
    $
    6,632
    
    
    
    38
    %
    
    $
    5,505
    
    
    
    31
    %
    
    $
    1,127
    
    
    
    20
    %Research and development
    
    
    5,214
    
    
    
    30
    %
    
    
    5,048
    
    
    
    28
    %
    
    
    166
    
    
    
    3
    %Total operating expenses
    
    $
    11,846
    
    
    
    68
    %
    
    $
    10,553
    
    
    
    59
    %
    
    $
    1,293
    
    
    
    12
    %
 Selling, general and administrative expenses.
 Research and development expenses.
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Other income:
 For the Three MonthsEnded March 31,(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    Variance $
    
    
    Variance %Interest income
    
    $
    11
    
    
    $
    90
    
    
    $
    (79
    )
    
    
    (88
    )%Other income
    
    $
    11
    
    
    $
    90
    
    
    $
    (79
    )
    
    
    (88
    )%
 Interest income.
 Income tax provision:
 For the Three MonthsEnded March 31,(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    Variance $
    
    
    Variance %Effective tax rate
    
    
    39
    %
    
    
    28
    %
    
    
    n/a
    
    
    
    11
    %Income tax provision
    
    $
    306
    
    
    $
    755
    
    
    $
    (449
    )
    
    
    (59
    )%
 Income tax provision.
  Liquidity and capital resources
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For the Three MonthsEnded March 31,(Dollars in thousands)
    
    2010
    
    
    2009Net cash (used in) provided by operating activities
    
    $
    (385
    )
    
    $
    142Net cash used in investing activities
    
    
    (533
    )
    
    
    (118
    )Net cash (used in) provided by financing activities
    
    
    (196
    )
    
    
    17Cash and cash equivalents (end of period)
    
    $
    61,335
    
    
    $
    52,020
 Cash flow analysis:
  Contractual obligations
  Off-balance sheet arrangements
  Available information
  
 Item 3. Quantitative and qualitative disclosures about market risk
 Foreign currency risk
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Item 4. Controls and procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  Remediation Efforts
  
    
    formally documented the existing contract review by the legal department in which
non-standard terms and conditions for each new sales contract are identified; and
    
    implemented a new checklist to enhance the documentation and evaluation of revenue
recognition criteria for each new sales contract to provide for more in-depth analysis and
ensure appropriate revenue recognition for  each contract.
  
 PART II. Other Information
 
 Item 1. Legal proceedings
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Item 1A. Risk factors
  Risks relating to our business and industry:
 The continued deterioration of general U. S. and global economic conditions could
adversely affect our sales and operating results.
    A significant or prolonged economic downturn in industries in which we focus, may result in
our customers or prospects reducing or postponing spending on the products we offer.
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A weakening economy and changing business conditions could result in substantial defaults or
slowing of payments by our customers on our accounts receivable which could have a significant
negative impact on our business, results of operations, financial condition or liquidity.
  We focus exclusively on the pricing and revenue optimization software market, and if this
market develops more slowly than we expect, our business will be harmed.
    Any downturn in sales to our target markets of manufacturing, distribution, services, hotel
and cruise, and airline would adversely affect our operating results.
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The expiration of the research and experimentation tax credit or other general business credit
could have a negative impact on our business, results of operations, financial condition or
liquidity.
  Our software products require implementation projects that are subject to significant risks
and delays, the materialization of which could negatively impact the effectiveness of our
solutions, resulting in harm to our reputation, business and financial performance.
  Competition from vendors of pricing solutions and enterprise applications as well as from
companies internally developing their own solutions could adversely affect our ability to sell our
software products and could result in pressure to price our software products in a manner that
reduces our margins and harms our operating results.
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We are subject to a lengthy sales cycle and delays or failures to complete sales may harm our
business and cause our revenue and operating income to decline in the future.
  Our revenue recognition is primarily based upon our ability to estimate the efforts required
to complete our implementation projects, which may be difficult to estimate.
  Failure to sustain our historical maintenance and support renewal rates and pricing would
adversely affect our operating result.
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We might not generate increased business from our current customers, which could limit our
revenue in the future.
  If our cost estimates for fixed-fee arrangements do not accurately anticipate the cost and
complexity of implementing our software products, our profitability could be reduced and we could
experience losses on these arrangements.
  Our revenue recognition policy may cause any decreases in sales not to be reflected in our
revenue immediately.
  We may enter into acquisitions that may be difficult to integrate, fail to achieve our
strategic objectives, disrupt our business, dilute stockholder value or divert management
attention.
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If we fail to develop or acquire new pricing and revenue optimization functionality to enhance
our existing software products, we will not be able to grow our business and it could be harmed.
  
    
    rapid technological developments;
    
    newly emerging and changing customer requirements; and
    
    frequent product introductions, updates and functional enhancements.
   Defects or errors in our software products could harm our reputation, impair our ability to
sell our products and result in significant costs to us.
  
    
    lost or delayed market acceptance and sales of our software products;
    
    delays in payment to us by customers;
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
    
    injury to our reputation;
    
    diversion of our resources;
    
    legal claims, including product liability claims, against us;
    
    increased maintenance and support expenses; and
    
    increased insurance costs.
  If we fail to retain our key personnel or if we fail to attract additional qualified
personnel, our operating results could be adversely affected.
  Intellectual property litigation and infringement claims may cause us to incur significant
expense or prevent us from selling our software products.
  
    
    incur substantial expenses and expend significant management efforts to defend such claims;
    
    pay damages, potentially including treble damages, if we are found to have willfully
infringed such parties patents or copyrights;
    
    cease making, licensing or using products that are alleged to incorporate the intellectual
property of others;
    
    distract management and other key personnel from performing their duties for us;
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
    
    enter into potentially unfavorable royalty or license agreements in order to obtain the
right to use necessary technologies; and
    
    expend additional development resources to redesign our products.
   If we fail to protect our proprietary rights and intellectual property adequately, our
business and prospects may be harmed.
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We use open source software in our products that may subject our software products to general
release or require us to re-engineer our products, which may cause harm to our business.
  We utilize third-party software that we incorporate into our software products, and impaired
relations with these third parties, defects in third-party software or a third partys inability or
failure to enhance their software over time could adversely affect our operating performance and
financial condition.
  New accounting standards or interpretations of existing accounting standards, including those
related to revenue recognition, could adversely affect our operating results.
  Our international sales subject us to risks that may adversely affect our operating results.
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
    
    economic conditions in various parts of the world;
    
    unexpected changes in regulatory requirements;
    
    less protection for intellectual property rights in some countries;
    
    new and different sources of competition;
    
    multiple, conflicting and changing tax laws and regulations that may affect both our
international and domestic tax liabilities and result in increased complexity and costs;
    
    if we were to establish international offices, the difficulty of managing and staffing
such international offices and the increased travel, infrastructure and legal compliance
costs associated with multiple international locations;
    
    difficulties in enforcing contracts and collecting accounts receivable, especially in
developing countries;
    
    if more contracts become denominated in local currency, fluctuations in exchange rates;
and
    
    tariffs and trade barriers, import/export controls and other regulatory or contractual
limitations on our ability to sell or develop our products in certain foreign markets.
  Our operations might be affected by the occurrence of a natural disaster or other catastrophic
event in Houston, Texas.
  Our ability to raise capital in the future may be limited, and our failure to raise capital
when needed could prevent us from executing our strategy.
  We incur significant increased costs as a result of operating as a public company, and our
management will be required to devote substantial time to new compliance initiatives.
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Risks relating to ownership of our common stock:
 Market volatility may affect our stock price and the value of your investment.
   
    
    variations in our quarterly or annual operating results;
    
    decreases in market valuations of comparable companies;
    
    fluctuations in stock market prices and volumes;
    
    decreases in financial estimates by equity research analysts;
    
    announcements by our competitors of significant contracts, new products or product
enhancements, acquisitions, distribution partnerships, joint ventures or capital commitments;
    
    departure of key personnel;
    
    changes in governmental regulations and standards affecting the software industry and our
products;
    
    sales of common stock or other securities by us in the future;
    
    damages, settlements, legal fees and other costs related to litigation, claims and other
contingencies;
    
    deterioration of the general U. S. and global economic condition; and
    
    other risks described elsewhere in this section.
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Shares of our common stock are relatively illiquid
  If equity research analysts cease to publish research or reports about us or if they issue
unfavorable commentary or downgrade our common stock, the price of our common stock could decline.
  Anti-takeover provisions in our Certificate of Incorporation and Bylaws and under Delaware law
could make an acquisition of us, which may be beneficial to our stockholders, more difficult and
may prevent attempts by our stockholders to replace or remove our current management.
  
    
    the division of our board of directors into three classes to be elected on a staggered
basis, one class each year;
    
    a prohibition on actions by written consent of our stockholders;
    
    the elimination of the right of stockholders to call a special meeting of stockholders;
    
    a requirement that stockholders provide advance notice of any stockholder nominations of
directors or any proposal of new business to be considered at any meeting of stockholders;
    
    a requirement that a supermajority vote be obtained to amend or repeal certain provisions
of our certificate of incorporation; and
    
    the ability of our board of directors to issue preferred stock without stockholder
approval.
  We do not intend to pay dividends on our common stock in the foreseeable future.
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##### Table of Contents



Item 2. Unregistered sales of equity securities and use of proceeds.
   
 Item 3. Defaults upon senior securities.
  
 Item 4. Submission of matters to a vote of security holders.
  
 Item 5. Other information.
  
 Item 6. Exhibits.
  3.1
    
    Amended and Restated Certificate of Incorporation (incorporated
by reference to Exhibit 3.1.1 of the Registrants Form S-1
Registration Statement (Registration No. 333-141884), declared
effective by the Securities and Exchange Commission on June 27,
2007).3.2
    
    Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.3 of the Registrants Form 8-K filed with the
Securities and Exchange Commission on August 27, 2008).4.1
    
    Specimen certificate for shares of common stock (incorporated by
reference to the exhibit of the same number to the Registrants
Form S-1 Registration Statement (Registration No. 333-141884),
declared effective by the Securities and Exchange Commission on
June 27, 2007).10.1
    
    1999 Equity Incentive Plan, as amended to date, and form of
stock option agreement (incorporated by reference to the exhibit
10.2 to the Registrants Form S-1 Registration Statement
(Registration No. 333-141884), declared effective by the
Securities and Exchange Commission on June 27, 2007).10.2
    
    2007 Equity Incentive Plan and form of stock option agreement
(incorporated by reference to the exhibit 10.3 to the
Registrants Form S-1 Registration Statement (Registration No.
333-141884), declared effective by the Securities and Exchange
Commission on June 27, 2007).10.3
    
    Stock Purchase and Stockholders Agreement, dated June 8, 1998,
by and among Registrant (as successor in interest to PROS
Strategic Solutions, Inc.) and certain stockholders
(incorporated by reference to the exhibit 10.4 to the
Registrants Form S-1 Registration Statement (Registration No.
333-141884), declared effective by the Securities and Exchange
Commission on June 27, 2007).10.3.1
    
    Amendment to Stock Purchase and Stockholders Agreement dated
March 26, 2007 by and among Registrant (as successor in interest
to PROS Strategic Solutions, Inc.) and certain stockholders.
(incorporated by reference to the exhibit 10.4.1 to the
Registrants Form S-1 Registration Statement (Registration No.
333-141884), declared effective by the Securities and Exchange
Commission on June 27, 2007).10.5
    
    Registration Rights Agreement, dated May 25, 1999, by and
between Registrant (as successor in interest to PROS Strategic
Solutions, Inc.) and David Samuel Coats (incorporated by
reference to the exhibit 10.6 to the Registrants Form S-1
Registration Statement (Registration No. 333-141884), declared
effective by the Securities and Exchange Commission on June 27,
2007).
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##### Table of Contents



10.6
    
    Registration Rights Agreement, dated April 13, 2000, by and
between Registrant (as successor in interest to PROS Strategic
Solutions, Inc.) and Robert Salter (incorporated by reference to
the exhibit 10.7 to the Registrants Form S-1 Registration
Statement (Registration No. 333-141884), declared effective by
the Securities and Exchange Commission on June 27, 2007).10.7
    
    Registration Rights Agreement, dated June 8, 2007, by and among
Registrant, Mariette M. Woestemeyer and Ronald F. Woestemeyer
(incorporated by reference to the exhibit 10.8 to the
Registrants Form S-1 Registration Statement (Registration No.
333-141884), declared effective by the Securities and Exchange
Commission on June 27, 2007).10.8
    
    Office Lease, dated January 31, 2001, by and between PROS
Revenue Management L.P. and Houston Community College System
(incorporated by reference to the exhibit 10.10 to the
Registrants Form S-1 Registration Statement (Registration No.
333-141884), declared effective by the Securities and Exchange
Commission on June 27, 2007).10.8.1
    
    First Amendment to Office Lease, dated May 31, 2006, by and
between PROS Revenue Management L.P. and Houston Community
College System (incorporated by reference to the exhibit 10.10.1
to the Registrants Form S-1 Registration Statement
(Registration No. 333-141884), declared effective by the
Securities and Exchange Commission on June 27, 2007).10.9*
    
    Employment Agreement, dated September 30, 2005, by and between
PROS Revenue Management L.P. and Albert Winemiller (incorporated
by reference to the exhibit 10.11 to the Registrants Form S-1
Registration Statement (Registration No. 333-141884), declared
effective by the Securities and Exchange Commission on June 27,
2007).10.9.1*
    
    Immediately Exercisable Stock Option Grant, dated April 2, 2007,
by and between Registrant and Albert Winemiller (incorporated by
reference to the exhibit 10.11.1 to the Registrants Form S-1
Registration Statement (Registration No. 333-141884), declared
effective by the Securities and Exchange Commission on June 27,
2007).10.9.2*
    
    Amendment No.1 to Employment Agreement, dated April 2, 2007, by
and between Registrant and Albert Winemiller (incorporated by
reference to the exhibit 10.11.2 to the Registrants Form S-1
Registration Statement (Registration No. 333-141884), declared
effective by the Securities and Exchange Commission on June 27,
2007).10.9.3*
    
    Amendment No. 2 to Employment Agreement, dated March 24, 2009,
by and between PROS Revenue Management L.P. and Albert E.
Winemiller. (incorporated by reference to the exhibit 10.4 to
the Registrants Form 8-K filed the Securities and Exchange
Commission on March 26, 2009).10.10*
    
    Employment Agreement, dated September 30, 2005, by and between
PROS Revenue Management L.P. and Charles Murphy (incorporated by
reference to the exhibit 10.12 to the Registrants Form S-1
Registration Statement (Registration No. 333-141884), declared
effective by the Securities and Exchange Commission on June 27,
2007).10.10.1*
    
    Immediately Exercisable Incentive Stock Option Grant, dated
September 30, 2005, by and between Registrant and Charles Murphy
(incorporated by reference to the exhibit 10.12.1 to the
Registrants Form S-1 Registration Statement (Registration No.
333-141884), declared effective by the Securities and Exchange
Commission on June 27, 2007).10.10.2*
    
    Immediately Exercisable Stock Option Grant, dated April 2, 2007,
by and between Registrant and Charles Murphy (incorporated by
reference to the exhibit 10.12.2 to the Registrants Form S-1
Registration Statement (Registration No. 333-141884), declared
effective by the Securities and Exchange Commission on June 27,
2007).10.10.3*
    
    Amendment No.1 to Employment Agreement, dated April 2, 2007, by
and between Registrant and Charles Murphy (incorporated by
reference to the exhibit 10.12.3 to the Registrants Form S-1
Registration Statement (Registration No. 333-141884), declared
effective by the Securities and Exchange Commission on June 27,
2007).10.10.4*
    
    Amendment No. 2 to Employment Agreement, dated March 24, 2009,
by and between PROS Revenue Management L.P. and Charles H.
Murphy. (incorporated by reference to the exhibit 10.4 to the
Registrants Form 8-K filed the Securities and Exchange
Commission on March 26, 2009).10.11*
    
    Employment Agreement, dated January 15, 1999, by and between
PROS Revenue Management L.P. and Ronald Woestemeyer
(incorporated by reference to the exhibit 10.12 to the
Registrants Form S-1 Registration Statement (Registration No.
333-141884), declared effective by the Securities and Exchange
Commission on June 27, 2007).10.11.1*
    
    Amendment No. 1 to Employment Agreement, dated February 2, 2004,
by and between PROS Revenue
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##### Table of Contents



Management L.P. and Ronald
Woestemeyer (incorporated by reference to the exhibit 10.13.1 to
the Registrants Form S-1 Registration Statement (Registration
No. 333-141884), declared effective by the Securities and
Exchange Commission on June 27, 2007).10.12*
    
    Form of Indemnification Agreement entered into among Registrant,
its affiliates and its directors and officers (incorporated by
reference to the exhibit number 10.16 to the Registrants Form
S-1 Registration Statement (Registration No. 333-141884),
declared effective by the Securities and Exchange Commission on
June 27, 2007).10.13*
    
    Employment Agreement, dated April 24, 2008, by and between PROS
Revenue Management L.P. and Andres Reiner  Senior
Vice-President Product Development. (incorporated by reference
to the exhibit 10.17 to the Registrants Form 10-Q filed the
Securities and Exchange Commission on August 7, 2008).10.13.1*
    
    Amendment No. 1 to Employment Agreement, dated March 24, 2009,
by and between PROS Revenue Management L.P. and Andres Reiner 
Senior Vice-President Product Development. (incorporated by
reference to the exhibit 10.1 to the Registrants Form 8-K filed
the Securities and Exchange Commission on March 26, 2009).31.1#
    
    Certification of Chief Executive Officer Pursuant to Exchange
Act Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section
302 of the Sarbanes Oxley Act of 2002.31.2#
    
    Certification of Chief Financial Officer Pursuant to Exchange
Act Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.32.1#
    
    Certifications of Chief Executive Officer and Chief Financial
Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Constitutes management contracts or compensatory arrangements#
    
    Filed with this report 31




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##### Table of Contents



SIGNATURES
  PROS HOLDINGS, INC.Date: May 7, 2010
    By:
    /s/ Albert E.  WinemillerAlbert E.  WinemillerPresident and Chief Executive OfficerDate: May 7, 2010
    By:
    /s/ Charles H.  MurphyCharles H.  MurphyExecutive Vice President and
 Chief Financial Officer

(Principal Accounting Officer) 32