[144] Zurn Elkay Water Solutions Corporation SEC Filing

Rhea-AI Filing Summary

PROS Holdings (NYSE: PRO) Q2 2025 Form 10-Q highlights

• Top-line growth: Total revenue rose 8% YoY to $88.7 million, driven by a 12% jump in subscription revenue to $73.3 million. Recurring revenue (subscription + maintenance) represented 86% of total sales.
• Margin expansion: Overall gross margin improved two points to 67%. Subscription gross margin reached 79% (up 1 ppt) due to cloud-infrastructure efficiency.
• Profitability trend: Net loss narrowed to $1.8 million (-$0.04 basic EPS) from $7.4 million (-$0.16). Operating loss was roughly flat at $7.6 million.
• Cash & liquidity: Cash and equivalents increased to $179.0 million from $162.0 million at year-end; operating cash flow turned positive at $4.4 million (vs. $1.8 million).
• Debt actions: Exchanged $186.9 million of 2.25% 2027 notes for new 2.5% 2030 notes and sold an additional $50 million of 2030 notes; recorded a $4.2 million extinguishment gain and purchased capped calls that effectively raise the conversion price to $30.34 per share.
• Balance sheet: Total assets $443.0 million; total liabilities $527.9 million; stockholders’ deficit widened to $84.9 million mainly from share-based compensation and capped-call premium.
• Retention & mix: Gross revenue retention remained above 93%; U.S. accounted for 36% of revenue, Europe 30%, Rest-of-World 34%.

Management cites continued macro uncertainty but notes improving subscription mix, higher gross margins and stronger cash generation as key progress toward profitability.

Positive

• Subscription revenue up 12% YoY, reinforcing shift to high-margin recurring model.
• Net loss reduced by 76% YoY and operating cash flow turned positive to $4.4 million.
• Debt maturity extended to 2030 with a $4.2 million gain on extinguishment, lessening near-term refinancing pressure.
• Gross margin expanded to 67% on cloud-delivery efficiencies.

Negative

• Company remains in stockholders’ deficit of $84.9 million.
• Share-based compensation high at $12 million (14% of revenue), diluting shareholders.
• Convertible issuance adds $50 million principal and slightly higher coupon (2.5%), increasing leverage.
• Still operating loss of $7.6 million; profitability not yet achieved.

Insights

Equity Research Analyst

TL;DR: Solid revenue growth, narrower loss, positive OCF; dilution risk from new converts offset by capped call.

Quarter shows PROS transitioning toward a SaaS-heavy model—subscription revenue +12% YoY now 83% of mix, supporting 79% segment margin. Net loss shrank by $5.6 million and operating cash turned positive, indicating operating leverage despite high SBC ($12 million this quarter). Debt exchange lengthens maturity profile to 2030 and removes >$185 million of 2027 paper; coupon rises 25 bps but capped call lifts effective conversion to $30.34, tempering dilution. However, shareholders’ deficit deepened and total liabilities exceed assets, so path to sustained GAAP profitability remains critical.

Credit Analyst

TL;DR: Refinancing enhances tenor, liquidity strong; leverage still high, equity deficit persists.

Liquidity headroom is comfortable: $179 million cash plus $50 million undrawn revolver versus $39 million lease liabilities through 2030. Exchange into 2.5% 2030 notes pushes weighted-average maturity to ~5 years, lowering near-term refinancing risk. Net debt/annualized revenue approximates 0.8×, acceptable for a recurring-revenue software issuer. Yet equity deficit of $85 million and ongoing operating losses constrain credit quality. Positive operating cash flow must sustain to cover ~ $6 million annual coupon and sizeable purchase commitments ($96 million through 2029). Overall impact rated modestly positive.

Form 144 Filer Information	UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 144 NOTICE OF PROPOSED SALE OF SECURITIES PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933
FORM 144

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144: Issuer Information

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See the definition of "person" in paragraph (a) of Rule 144. Information is to be given not only as to the person for whose account the securities are to be sold but also as to all other persons included in that definition. In addition, information shall be given as to sales by all persons whose sales are required by paragraph (e) of Rule 144 to be aggregated with sales for the account of the person filing this notice.

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144: Securities Information

Title of the Class of Securities To Be Sold	Name and Address of the Broker	Number of Shares or Other Units To Be Sold	Aggregate Market Value	Number of Shares or Other Units Outstanding	Approximate Date of Sale	Name the Securities Exchange
Common	Morgan Stanley Smith Barney LLC Executive Financial Services 1 New York Plaza 8th Floor New York NY 10004	22138	953060.82	167552517	07/31/2025	NYSE

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144: Securities To Be Sold

Title of the Class	Date you Acquired	Nature of Acquisition Transaction	Name of Person from Whom Acquired	Is this a Gift?	Date Donor Acquired	Amount of Securities Acquired	Date of Payment	Nature of Payment *
Common	10/04/2021	Performance Shares	Issuer			22138	10/04/2021	Not Applicable

* If the securities were purchased and full payment therefor was not made in cash at the time of purchase, explain in the table or in a note thereto the nature of the consideration given. If the consideration consisted of any note or other obligation, or if payment was made in installments describe the arrangement and state when the note or other obligation was discharged in full or the last installment paid.

Furnish the following information as to all securities of the issuer sold during the past 3 months by the person for whose account the securities are to be sold.

144: Securities Sold During The Past 3 Months

Name and Address of Seller	Title of Securities Sold	Date of Sale	Amount of Securities Sold	Gross Proceeds
MARK PETERSON 511 W. Freshwater Way Milwaukee WI 53204	Common	05/13/2025	7000	261159.50

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The person for whose account the securities to which this notice relates are to be sold hereby represents by signing this notice that he does not know any material adverse information in regard to the current and prospective operations of the Issuer of the securities to be sold which has not been publicly disclosed. If such person has adopted a written trading plan or given trading instructions to satisfy Rule 10b5-1 under the Exchange Act, by signing the form and indicating the date that the plan was adopted or the instruction given, that person makes such representation as of the plan adoption or instruction date.

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FAQ

How much revenue did PROS Holdings (PRO) generate in Q2 2025?

$88.7 million, an 8% year-over-year increase.

What was PROS’ Q2 2025 EPS?

Basic EPS was -$0.04, improving from -$0.16 in Q2 2024.

How did the convertible debt exchange affect the balance sheet?

PROS swapped $186.9 million of 2027 notes for new 2030 notes and issued another $50 million, booking a $4.2 million gain and extending maturities.

What is PROS Holdings’ cash position after the quarter?

Cash and equivalents stood at $179.0 million with an additional $10 million in restricted cash.

What are the current gross and subscription margins?

Total gross margin is 67%; subscription gross margin reached 79%.

Did PROS generate positive operating cash flow?

Yes, $4.4 million in operating cash flow for the first six months of 2025.