Core Insights - Procore Technologies, Inc. has appointed Ajei Gopal as Chief Executive Officer Designate, who will succeed the current CEO Tooey Courtemanche [1] - Gopal's anticipated start date is November 10, 2025, following the public announcement of the company's Q3 financial results [1] - Tooey Courtemanche, the founder and current CEO, will transition out of the role after Gopal's appointment [1]

Group 1 - Procore has successfully scaled from $500 million to over $1 billion in revenue, indicating strong growth potential in the vertical software market [1] - The company emphasizes the importance of customer relationships and community engagement within the construction industry, which differentiates it from horizontal software companies [1] - Procore's involvement in industry events, such as World of Concrete, fosters a sense of community and enhances its business model by aligning closely with industry needs [1] Group 2 - The company has learned to navigate industry cycles, particularly highlighted during the COVID-19 pandemic, which has influenced its operational strategies [2]

Core Insights - The article discusses the author's transition to independent investment research after over 43 years in the industry, emphasizing a focus on actionable investment insights rather than adhering to external agendas [1] Group 1: Investment Philosophy - The company specializes in rules and factor-based equity investing strategies, prioritizing human intelligence over purely quantitative methods [1] - The approach combines factor analysis with classic fundamental analysis to uncover the true story of a company and its stock, focusing on future potential rather than past performance [1] Group 2: Professional Background - The author has extensive experience covering a wide range of stocks, including large cap, small cap, micro cap, value, growth, and income [1] - Previous roles include managing a high-yield fixed-income fund and conducting research on quantitative asset allocation strategies, contributing to the development of Robo Advising [1] - The author has also edited and written stock newsletters, notably the Forbes Low Priced Stock Report, and served as an assistant research director at Value Line [1] Group 3: Commitment to Education - There is a strong emphasis on investor education, with the author having conducted numerous seminars on stock selection and analysis [1] - The author has authored two books, "Screening The Market" and "The Value Connection," further demonstrating a commitment to educating investors [1]

Core Insights - Procore Technologies reported Q2 FY2025 GAAP revenue of $323.9 million, exceeding analyst estimates of $312.4 million, but faced profitability challenges with a decline in non-GAAP operating margin and free cash flow [1][5][10] Financial Performance - GAAP revenue increased by 14% year-over-year from $284.3 million in Q2 2024 to $323.9 million in Q2 2025 [2][5] - Non-GAAP operating margin decreased to 13% from 18% in Q2 2024, reflecting a 5 percentage point decline [2][8] - Non-GAAP free cash flow fell sharply to $10.6 million from $46.6 million in Q1 2025, a decrease of 77.2% [2][8] Customer and Market Dynamics - The total number of organic customers reached 17,501, with a 15% year-over-year increase in customers contributing over $100,000 in annual recurring revenue, totaling 2,517 [5][6] - Procore maintained a 95% gross revenue retention rate, indicating strong customer loyalty [6] Strategic Initiatives - The company completed acquisitions of Novorender and Flypaper Technologies to enhance its Building Information Modeling (BIM) capabilities [7] - Procore received the FedRAMP "In Process" designation, allowing it to sell into government accounts, indicating a strategic move into regulated sectors [7] Future Outlook - Management projects Q3 2025 revenue between $326 million and $328 million, suggesting a year-over-year growth of 10-11% [10] - The full-year 2025 revenue outlook is set at $1,299–$1,302 million, with a non-GAAP operating margin expected to remain between 13% and 13.5% [10][11] - Management emphasized a conservative approach to forecasting due to potential macroeconomic risks affecting the construction sector [11]

PART I. FINANCIAL INFORMATION This part details Procore's unaudited financial statements and management's analysis of its financial condition and operations [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Procore's unaudited consolidated financial statements, covering balance sheets, operations, equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of Procore's financial position, detailing assets, liabilities, and stockholders' equity at specific dates | (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | **Total Assets** | $2,004,101 | $2,101,371 | | **Total Liabilities** | $786,502 | $813,018 | | **Total Stockholders' Equity** | $1,217,599 | $1,288,353 | - Total assets decreased by approximately **$97.3 million** from December 31, 2024, to June 30, 2025, primarily driven by a decrease in cash and cash equivalents and current marketable securities[17](index=17&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section outlines Procore's financial performance over specific periods, detailing revenues, expenses, and net loss | (in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | **Revenue** | $323,919 | $284,347 | $634,551 | $553,775 | | **Gross profit** | $256,187 | $236,246 | $501,893 | $459,951 | | **Loss from operations** | $(30,267) | $(14,776) | $(66,512) | $(33,682) | | **Net loss** | $(21,089) | $(6,311) | $(54,078) | $(17,277) | | **Net loss per share (basic and diluted)** | $(0.14) | $(0.04) | $(0.36) | $(0.12) | - Revenue increased by **14%** for the three months ended June 30, 2025, and by **15%** for the six months ended June 30, 2025, compared to the respective prior-year periods, while net loss significantly widened for both periods year-over-year[20](index=20&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in Procore's stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit | (in thousands, except share amounts) | Balance as of Dec 31, 2024 | Balance as of June 30, 2025 | | :----------------------------------- | :------------------------- | :-------------------------- | | **Common Stock (Shares)** | 149,853,135 | 150,189,021 | | **Additional Paid-in Capital** | $2,535,868 | $2,517,880 | | **Accumulated Deficit** | $(1,244,793) | $(1,298,871) | | **Total Stockholders' Equity** | $1,288,353 | $1,217,599 | - Total stockholders' equity decreased by **$70.75 million** from December 31, 2024, to June 30, 2025, primarily due to net loss and common stock repurchases, partially offset by stock-based compensation and proceeds from stock option exercises and ESPP[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents Procore's cash inflows and outflows from operating, investing, and financing activities over specific periods | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :----------------------------- | :----------------------------- | | **Operating activities** | $96,856 | $127,840 | | **Investing activities** | $(80,462) | $(151,296) |\ | **Financing activities** | $(131,804) | $22,433 | | **Net decrease in cash** | $(115,410) | $(1,023) | | **Cash and cash equivalents, end of period** | $324,262 | $356,239 | - Net cash provided by operating activities decreased by **$30.98 million** year-over-year[29](index=29&type=chunk) - Net cash used in financing activities significantly increased to **$131.8 million** in 2025, primarily due to common stock repurchases and tax withholding payments for net share settlement, contrasting with net cash provided in 2024[29](index=29&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the figures presented in the condensed consolidated financial statements [1. ORGANIZATION AND DESCRIPTION OF BUSINESS](index=12&type=section&id=1.%20ORGANIZATION%20AND%20DESCRIPTION%20OF%20BUSINESS) This note describes Procore Technologies, Inc.'s core business as a cloud-based construction management platform provider - Procore Technologies, Inc. provides a cloud-based construction management platform and related products and services, enabling collaboration among key stakeholders in the construction industry globally[33](index=33&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and estimation methods used in preparing Procore's financial statements - The financial statements are prepared in accordance with U.S. GAAP and are unaudited, with certain disclosures condensed or omitted, and management makes estimates and assumptions affecting reported amounts, which are evaluated periodically[35](index=35&type=chunk)[36](index=36&type=chunk) - The Company operates as a single operating segment, with the CEO evaluating financial performance and allocating resources on a consolidated basis[37](index=37&type=chunk)[38](index=38&type=chunk)[40](index=40&type=chunk) - Remaining Performance Obligations (RPO) totaled **$1.3 billion** as of June 30, 2025, with approximately **65% ($879.5 million)** expected to be recognized as revenue in the next 12 months[58](index=58&type=chunk) [3. INVESTMENTS](index=16&type=section&id=3.%20INVESTMENTS) This note details Procore's marketable and strategic investments, including their fair values and changes over time | (in thousands) | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :----------------------------- | :----------------------- | :--------------------------- | | **Marketable Securities** | $382,487 | $383,715 | | U.S. treasury securities | $135,764 | $127,045 | | Commercial paper | $5,270 | $18,433 | | Corporate notes & obligations | $241,453 | $238,237 | | **Strategic Investments** | $15,073 | $14,354 | - Marketable securities remained relatively stable, with a slight decrease of **$1.2 million**[62](index=62&type=chunk)[63](index=63&type=chunk) - Strategic investments increased by **$0.7 million**, primarily due to purchases in limited partnerships and unrealized gains[62](index=62&type=chunk)[63](index=63&type=chunk) [4. FAIR VALUE OF FINANCIAL INSTRUMENTS](index=18&type=section&id=4.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note details the fair value measurements of Procore's financial instruments, such as cash equivalents and marketable securities | (in thousands) | June 30, 2025 Total Fair Value | December 31, 2024 Total Fair Value | | :----------------------------- | :----------------------------- | :------------------------------- | | **Cash Equivalents** | $260,602 | $385,172 | | Money market funds | $240,155 | $384,648 | | U.S. treasury securities | $19,983 | — | | Time deposits | $145 | — | | Commercial paper | $424 | — | | Corporate notes & obligations | — | $524 | | **Marketable Securities** | $382,487 | $383,715 | | **Total** | $643,194 | $768,887 | - Total financial assets measured at fair value decreased by **$125.69 million** from December 31, 2024, to June 30, 2025, primarily driven by a reduction in money market funds[67](index=67&type=chunk) [5. BUSINESS COMBINATIONS](index=18&type=section&id=5.%20BUSINESS%20COMBINATIONS) This note describes Procore's recent acquisitions, including Novorender AS and Intelliwave Technologies Inc., and their financial impact - On January 28, 2025, Procore acquired Novorender AS for **$44.3 million** in cash, enhancing its capabilities for large-scale construction projects with advanced building information modeling rendering technology[68](index=68&type=chunk) **Novorender Acquisition (January 28, 2025):** | Asset/Liability Category | Fair Value (in thousands) | | :----------------------- | :------------------------ | | Developed technology | $19,100 | | Customer relationships | $4,900 | | Goodwill | $23,706 | | Net assets acquired | $43,183 | - On May 30, 2024, Procore acquired Intelliwave Technologies Inc. for **$29.8 million** in cash, accelerating the development of its Workforce Management solution[78](index=78&type=chunk) **Intelliwave Acquisition (May 30, 2024):** | Asset/Liability Category | Fair Value (in thousands) | | :----------------------- | :------------------------ | | Developed technology | $16,000 | | Customer relationships | $4,700 | | Goodwill | $11,333 | | Net assets acquired | $29,799 | [6. LEASES](index=22&type=section&id=6.%20LEASES) This note provides details on Procore's operating and finance leases, including right-of-use assets and lease liabilities - During the six months ended June 30, 2025, Procore modified office leases in Carpinteria, CA (reclassified to operating lease) and Austin, TX (expanded premises, extended terms, increased future rent commitments by **$39.5 million**)[89](index=89&type=chunk) | (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | **Operating right of use assets** | $33,093 | $28,790 | | **Total operating lease liabilities** | $43,204 | $36,443 | | **Finance right of use assets** | $20,521 | $31,727 | | **Total finance lease liabilities** | $29,163 | $43,580 | [7. INTANGIBLE ASSETS AND GOODWILL](index=23&type=section&id=7.%20INTANGIBLE%20ASSETS%20AND%20GOODWILL) This note details Procore's intangible assets, including developed technology and customer relationships, and goodwill from acquisitions | (in thousands) | June 30, 2025 Net Carrying Amount | December 31, 2024 Net Carrying Amount | | :----------------------------- | :-------------------------------- | :------------------------------------ | | **Developed technology** | $100,360 | $90,731 | | **Customer relationships** | $25,614 | $27,367 | | **Total finite-lived intangible assets** | $125,974 | $118,098 | | **Goodwill** | $574,105 | $549,651 | - Goodwill increased by **$24.45 million**, primarily due to the acquisition of Novorender[94](index=94&type=chunk)[98](index=98&type=chunk) - Developed technology intangible assets increased, while customer relationships slightly decreased[94](index=94&type=chunk)[98](index=98&type=chunk) **Amortization Expense of Acquired Intangible Assets:** | Category | Three Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | | :------------------ | :---------------------------------------------- | :-------------------------------------------- | | Cost of revenue | $8,015 | $15,617 | | Sales and marketing | $3,346 | $6,651 | | R&D | $658 | $1,290 | | **Total** | **$12,019** | **$23,558** | [8. ACCRUED EXPENSES](index=25&type=section&id=8.%20ACCRUED%20EXPENSES) This note provides a breakdown of Procore's accrued expenses, including bonuses, salaries, payroll taxes, and employee benefits | (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | **Total accrued expenses** | $97,561 | $88,740 | | Accrued bonuses | $24,840 | $28,878 | | Accrued salary, payroll tax, and employee benefit liabilities | $40,051 | $25,210 | - Total accrued expenses increased by **$8.82 million**, primarily driven by a significant increase in accrued salary, payroll tax, and employee benefit liabilities, partially offset by a decrease in accrued bonuses[100](index=100&type=chunk) [9. COMMITMENTS AND CONTINGENCIES](index=25&type=section&id=9.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines Procore's contractual commitments, such as hosting agreements, and discusses potential legal contingencies - The Company executed a new hosting services agreement with a total commitment of **$94.0 million** from March 2025 through February 2028[101](index=101&type=chunk) - Procore is not aware of any currently pending legal matters or claims that could have a material adverse effect on its financial position, results of operations, or cash flows[102](index=102&type=chunk) [10. STOCKHOLDERS' EQUITY](index=25&type=section&id=10.%20STOCKHOLDERS'%20EQUITY) This note details changes in Procore's stockholders' equity, including stock-based compensation, repurchases, and equity plans - The 2021 Equity Incentive Plan authorized an additional **7,492,656 shares** on January 1, 2025, bringing the total authorized to **59,355,916 shares**, with **38,890,813 shares** available for issuance as of June 30, 2025[107](index=107&type=chunk) **Stock-based Compensation Expense:** | Category | Three Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | | :------------------------ | :---------------------------------------------- | :-------------------------------------------- | | Cost of revenue | $3,204 | $5,956 | | Sales and marketing | $17,473 | $32,307 | | Research and development | $21,230 | $39,602 | | General and administrative | $13,670 | $25,991 | | **Total** | **$55,577** | **$103,856** | - During the six months ended June 30, 2025, the Company repurchased and retired **1,499,094 shares** of common stock for an aggregate of **$103.2 million** under its **$300.0 million** stock repurchase program, which expires on October 29, 2025[125](index=125&type=chunk)[221](index=221&type=chunk) [11. INCOME TAXES](index=29&type=section&id=11.%20INCOME%20TAXES) This note provides information on Procore's income tax provisions, benefits, and the factors affecting its effective tax rate **Income Tax (Benefit from) Provision:** | Period | Amount (in thousands) | | :------------------------- | :-------------------- | | Three Months Ended June 30, 2025 | $(411) | | Three Months Ended June 30, 2024 | $490 | | Six Months Ended June 30, 2025 | $4,883 | | Six Months Ended June 30, 2024 | $753 | - The Company recorded an income tax benefit of **$0.4 million** for the three months ended June 30, 2025, but an income tax expense of **$4.9 million** for the six months ended June 30, 2025, primarily due to a foreign tax on the transfer of intellectual property acquired from Novorender[127](index=127&type=chunk)[196](index=196&type=chunk) [12. NET LOSS PER SHARE](index=30&type=section&id=12.%20NET%20LOSS%20PER%20SHARE) This note explains the calculation of basic and diluted net loss per share, including potentially dilutive securities - Basic and diluted net loss per share are equal due to net losses, making all potentially dilutive securities anti-dilutive[132](index=132&type=chunk) **Weighted-Average Potentially Dilutive Shares Excluded from Diluted EPS:** | Category | Three Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | | :------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | | RSUs and PSUs subject to future vesting | 8,267 | 7,639 | | Shares issuable pursuant to the ESPP | 444 | 444 | | Shares of common stock issuable from stock options | 2,800 | 2,883 | | **Total** | **11,511** | **10,966** | [13. GEOGRAPHIC INFORMATION](index=30&type=section&id=13.%20GEOGRAPHIC%20INFORMATION) This note provides a breakdown of Procore's revenue by geographic region, highlighting U.S. versus international contributions **Revenue by Geographic Region:** | Region | Three Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | | :-------------- | :---------------------------------------------- | :-------------------------------------------- | | U.S. | $276,144 (85%) | $540,741 (85%) | | Rest of the world | $47,775 (15%) | $93,810 (15%) | | **Total Revenue** | **$323,919** | **$634,551** | - U.S. revenue consistently accounted for **85%** of total revenue for both the three and six months ended June 30, 2025 and 2024, indicating stable geographic distribution[133](index=133&type=chunk) [14. RESTRUCTURING](index=31&type=section&id=14.%20RESTRUCTURING) This note details Procore's restructuring activities, including workforce reductions and associated costs incurred - In January 2024, the Company reduced its global workforce by **4%** to align with key growth opportunities, incurring **$4.185 million** in restructuring-related costs, which were fully expensed by March 31, 2024[135](index=135&type=chunk)[136](index=136&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of Procore's financial condition, operational results, liquidity, and critical accounting policies [Overview](index=32&type=section&id=Overview) This section introduces Procore's business model as a cloud-based construction management software provider and its revenue generation - Procore is a leading global provider of cloud-based construction management software, aiming to digitize and modernize the construction industry by connecting stakeholders on a single platform[141](index=141&type=chunk) - Revenue is primarily generated from subscriptions, with pricing based on the number/mix of products and the annual construction volume managed on the platform, encouraging unlimited users per project[145](index=145&type=chunk) [Certain Factors Affecting Our Performance](index=33&type=section&id=Certain%20Factors%20Affecting%20Our%20Performance) This section discusses key internal and external factors influencing Procore's financial performance and strategic direction [Acquiring New Customers and Retaining and Expanding Existing Customers' Use of Our Platform](index=33&type=section&id=Acquiring%20New%20Customers%20and%20Retaining%20and%20Expanding%20Existing%20Customers'%20Use%20of%20Our%20Platform) This section details Procore's strategies and metrics for acquiring new customers, retaining existing ones, and expanding platform usage - The number of customers contributing over **$100,000** in annual recurring revenue (ARR) increased by **15%** year-over-year, from **2,191** to **2,517** as of June 30, 2025[149](index=149&type=chunk) - Total customers increased by **4%** year-over-year, from **16,750** to **17,501** as of June 30, 2025[149](index=149&type=chunk) - Gross retention rate (GRR) was **95%** as of June 30, 2025, up from **94%** as of June 30, 2024, indicating strong customer retention[150](index=150&type=chunk) [Remaining Performance Obligations](index=34&type=section&id=Remaining%20Performance%20Obligations) This section provides an analysis of Procore's remaining performance obligations, indicating future revenue to be recognized **Remaining Performance Obligations:** | Category | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (Dollar in thousands) | Change (Percent) | | :---------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------- | | Current RPO (cRPO) | $879,489 | $724,832 | $154,657 | 21% | | Non-current RPO | $464,268 | $310,381 | $153,887 | 50% | | **Total RPO** | **$1,343,757** | **$1,035,213** | **$308,544** | **30%** | - Current RPO (cRPO) increased by **21%** year-over-year, with approximately **36%** of the increase from existing customers and **64%** from new customers[154](index=154&type=chunk) [Continued Technology Innovation and Strategic Expansion of Our Products and Services](index=34&type=section&id=Continued%20Technology%20Innovation%20and%20Strategic%20Expansion%20of%20Our%20Products%20and%20Services) This section details Procore's ongoing technology innovation, strategic acquisitions, and product development to enhance its platform - Procore acquired Novorender AS (3D viewer/BIM platform) in January 2025 and Intelliwave Technologies Inc. (construction materials management) in May 2024 to expand platform capabilities[157](index=157&type=chunk) - The company launched Procore Pay in September 2023, a payment solution for general contractors and subcontractors[157](index=157&type=chunk) [International Growth](index=35&type=section&id=International%20Growth) This section discusses Procore's international revenue contribution and its global sales and marketing presence - Non-U.S. revenue remained consistent at **15%** of total revenue for the six months ended June 30, 2025 and 2024[158](index=158&type=chunk) - Procore maintains an international sales and marketing presence with offices in Australia, Canada, England, Ireland, and UAE, supporting multiple languages and currencies[158](index=158&type=chunk) [Macroeconomic Factors](index=35&type=section&id=Macroeconomic%20Factors) This section analyzes the impact of broader economic conditions, such as inflation and interest rates, on Procore's business - Macroeconomic factors like inflation, higher interest rates, and recession risk have led to cautious customer spending and increased pricing sensitivity, impacting cRPO annual growth[160](index=160&type=chunk) [Components of Results of Operations](index=36&type=section&id=Components%20of%20Results%20of%20Operations) This section defines and explains the key revenue and expense categories contributing to Procore's operational results - Revenue is primarily from fixed-fee subscriptions, recognized ratably over the term, with a portion of current revenue attributable to previously deferred amounts[162](index=162&type=chunk) - Cost of revenue includes personnel-related expenses for customer support, third-party hosting, amortization of capitalized software development, and acquired technology intangible assets[163](index=163&type=chunk) - Operating expenses (Sales & Marketing, R&D, G&A) are primarily driven by personnel-related compensation, with R&D expenses expected to increase as the company continues to enhance its platform[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of Procore's financial performance across different reporting periods [Comparison of the Three Months Ended June 30, 2025 and 2024](index=41&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) This section compares Procore's financial results for the three-month periods ended June 30, 2025, and 2024 **Three Months Ended June 30:** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($ in thousands) | Change (%) | | :---------------------- | :------------------ | :------------------ | :---------------------- | :--------- | | Revenue | $323,919 | $284,347 | $39,572 | 14% | | Cost of Revenue | $67,732 | $48,101 | $19,631 | 41% | | Gross Profit | $256,187 | $236,246 | $19,941 | 8% | | Gross Margin | 79% | 83% | -4% | | | Sales and Marketing | $141,897 | $127,922 | $13,975 | 11% | | Research and Development| $88,902 | $72,308 | $16,594 | 23% | | General and Administrative| $55,655 | $50,792 | $4,863 | 10% | | Loss from Operations | $(30,267) | $(14,776) | $(15,491) | 105% | | Net Loss | $(21,089) | $(6,311) | $(14,778) | 234% | - Revenue growth was primarily driven by existing customers (**82%**) and new customers (**18%**)[182](index=182&type=chunk) - The increase in cost of revenue was due to higher personnel-related expenses, capitalized software amortization, and cloud hosting costs[183](index=183&type=chunk) - Operating expenses increased across all categories, with R&D showing the largest percentage increase (**23%**) due to a **49%** increase in headcount for platform development[184](index=184&type=chunk)[185](index=185&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=43&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) This section compares Procore's financial results for the six-month periods ended June 30, 2025, and 2024 **Six Months Ended June 30:** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($ in thousands) | Change (%) | | :---------------------- | :------------------ | :------------------ | :---------------------- | :--------- | | Revenue | $634,551 | $553,775 | $80,776 | 15% | | Cost of Revenue | $132,658 | $93,824 | $38,834 | 41% | | Gross Profit | $501,893 | $459,951 | $41,942 | 9% | | Gross Margin | 79% | 83% | -4% | | | Sales and Marketing | $280,581 | $248,916 | $31,665 | 13% | | Research and Development| $176,511 | $142,907 | $33,604 | 24% | | General and Administrative| $111,313 | $101,810 | $9,503 | 9% | | Loss from Operations | $(66,512) | $(33,682) | $(32,830) | 97% | | Net Loss | $(54,078) | $(17,277) | $(36,801) | 213% | - Revenue growth was primarily from existing customers (**70%**) and new customers (**30%**)[189](index=189&type=chunk) - Cost of revenue increased due to higher personnel, capitalized software amortization, and cloud hosting costs, with headcount up **22%**[190](index=190&type=chunk) - R&D expenses increased by **24%**, driven by a **49%** increase in headcount to support product development and platform scaling[192](index=192&type=chunk) - Provision for income taxes increased significantly by **$4.1 million**, mainly due to a foreign tax on the transfer of intellectual property from Novorender[194](index=194&type=chunk)[196](index=196&type=chunk) [Non-GAAP Financial Measures](index=45&type=section&id=Non-GAAP%20Financial%20Measures) This section presents Procore's non-GAAP financial measures, providing alternative insights into its operating performance - Procore uses non-GAAP measures (excluding stock-based compensation, amortization of acquired intangibles, employer payroll tax on stock transactions, and acquisition-related expenses) to provide consistent and comparable insights into operating performance[197](index=197&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) **Non-GAAP Gross Profit and Margin:** | Metric | Three Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | | :------------------ | :---------------------------------------------- | :-------------------------------------------- | | Non-GAAP Gross Profit | $270,270 | $529,107 | | Non-GAAP Gross Margin | 83% | 83% | **Non-GAAP Income from Operations and Margin:** | Metric | Three Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | | :---------------------- | :---------------------------------------------- | :-------------------------------------------- | | Non-GAAP Income from Operations | $43,676 | $76,075 | | Non-GAAP Operating Margin | 13% | 12% | [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes Procore's ability to meet its short-term and long-term financial obligations and fund operations - As of June 30, 2025, Procore's liquidity sources included **$706.7 million** in cash, cash equivalents, and marketable securities[206](index=206&type=chunk) - Cash requirements include operating expenses, purchase obligations (hosting, software licenses), lease obligations, capital expenditures, and funding strategic investments and stock repurchases[208](index=208&type=chunk) - Net cash provided by operating activities decreased to **$96.9 million** for the six months ended June 30, 2025, from **$127.8 million** in the prior year, primarily due to a larger net loss and changes in operating assets and liabilities[212](index=212&type=chunk)[214](index=214&type=chunk) - Net cash used in financing activities was **$131.8 million** for the six months ended June 30, 2025, driven by **$103.2 million** in common stock repurchases and **$49.9 million** in tax withholding payments for net share settlement[218](index=218&type=chunk) [Critical Accounting Policies and Estimates](index=52&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses Procore's accounting policies and estimates that require significant management judgment - No significant changes to critical accounting policies and estimates were reported for the six months ended June 30, 2025, from those discussed in the 2024 Form 10-K[225](index=225&type=chunk) PART II. OTHER INFORMATION This part includes additional information such as legal proceedings, risk factors, equity sales, exhibits, and signatures [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) Procore is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business, results of operations, financial condition, or cash flow - The Company is not involved in any material legal proceedings that could adversely affect its financial position[234](index=234&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) This section outlines key risks, focusing on AI integration challenges like flawed outputs, data misuse, costs, and regulatory compliance - Failure to successfully incorporate AI into products and operations, or non-compliance with evolving AI regulations, could materially adversely affect the business[236](index=236&type=chunk) - Risks associated with AI include flawed/inaccurate outputs, potential for data leaks or misuse by third-party AI technologies, increased operating costs, and exposure to legal liability for intellectual property infringement[237](index=237&type=chunk)[238](index=238&type=chunk) - The rapidly evolving legal and regulatory landscape for AI (e.g., EU's AI Act) could impose significant compliance obligations, fines (up to **35 million euros** or **7%** of global turnover), and require changes to business practices[239](index=239&type=chunk)[240](index=240&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered sales of equity securities. It details the Company's stock repurchase activity for the three months ended June 30, 2025, under its authorized program - No unregistered sales of equity securities occurred during the period[241](index=241&type=chunk) **Stock Repurchase Activity (Three Months Ended June 30, 2025):** | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :-------------- | :------------------------------- | :--------------------------- | | April 1 - April 30 | — | — | | May 1 - May 31 | 31,111 | $64.51 | | June 1 - June 30 | 17,392 | $64.65 | | **Total** | **48,503** | | - As of June 30, 2025, approximately **$197.0 million** remained available for repurchases under the **$300.0 million** stock repurchase program[242](index=242&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents, executive agreements, certifications (Section 302 and 906), and Inline XBRL documents - The exhibit index includes key corporate documents, executive severance agreements, and required certifications (Section 302 and 906) for the filing[245](index=245&type=chunk) [Signatures](index=58&type=section&id=Signatures) This section contains the required signatures of the registrant's principal executive officer (President and CEO) and principal financial officer (CFO and Treasurer), certifying the filing of the Quarterly Report on Form 10-Q - The report is signed by Craig F. Courtemanche, Jr., President and CEO, and Howard Fu, Chief Financial Officer and Treasurer, on August 1, 2025[249](index=249&type=chunk)

Financial Performance - Procore Technologies reported quarterly earnings of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, but down from $0.39 per share a year ago, representing an earnings surprise of +45.83% [1] - The company posted revenues of $323.92 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.00%, compared to year-ago revenues of $284.35 million [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.31 on revenues of $327 million, and for the current fiscal year, it is $1.14 on revenues of $1.29 billion [7] - The estimate revisions trend for Procore Technologies was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which Procore Technologies belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook as the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - Total revenue in Q2 was $324 million, representing a 14% year-over-year growth [22] - Non-GAAP operating income was $44 million, with a non-GAAP operating margin of 13% [22] - Current RPO grew 21% year-over-year, while current deferred revenue increased by 13% year-over-year [23] Business Line Data and Key Metrics Changes - Strong quarter for new logo ARR growth, particularly in general contractor, owner, and public sector segments [23] - The mix between volume expansion and product cross-sell improved to 70-30, with cross-sell increasing primarily from the Financials suite [24] Market Data and Key Metrics Changes - International revenue grew 13% year-over-year, impacted by currency headwinds, but on a constant currency basis, it grew 16% [22] - Significant new customer wins included major players in various sectors, indicating strong market demand [12][15] Company Strategy and Development Direction - The company is focused on a go-to-market transition aimed at efficient growth and deeper customer partnerships [6][20] - Innovations such as Procore Helix and AI-driven solutions are positioned to transform the construction industry [9][10] - The company aims to capture a larger market share in the under-digitized construction industry [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of construction, driven by technological advancements and customer demand for automation [11][12] - The company is on track for solid operating margin improvement and aims for higher margins in the coming years [26][27] - For Q3 2025, revenue is expected to be between $326 million and $328 million, representing year-over-year growth of 10% to 11% [28] Other Important Information - The company has achieved FedRAMP designation, enhancing its ability to serve federal market segments [19] - The management team remains committed to improving profitability while maintaining growth opportunities [27] Q&A Session Summary Question: Customer adoption of AI and platform unification - Management noted that customer demand for automation is high, and they are seeing unique challenges being addressed through the platform [32][36] Question: Go-to-market changes and productivity - The transition is progressing as planned, with improvements in conversion pipeline and deal cycles [40] Question: Rule of 40 expectations for next year - Management confirmed that improvements in the Rule of 40 will primarily come from profitability rather than revenue growth [62] Question: Data maturity and customer volume - Customers are increasingly recognizing the value of unified data on the platform, which may lead to higher volume through Procore [66] Question: Free cash flow generation - Management indicated that free cash flow margins are expected to align with operating margins for the full year [78] Question: Impact of tariffs on customer projects - Customers have built resilience into their business models, allowing them to adapt to tariff-related challenges [84] Question: Product packaging and bundling feedback - Early pilots for product bundling are ongoing, aimed at streamlining the sales process and meeting customer needs [125]

Financial Data and Key Metrics Changes - Total revenue in Q2 was $324 million, representing a 14% year-over-year growth [20] - Non-GAAP operating income was $44 million, with a non-GAAP operating margin of 13% [20] - Current RPO (Remaining Performance Obligations) grew 21% year-over-year, while current deferred revenue increased by 13% [21] Business Line Data and Key Metrics Changes - Strong quarter for large deals, with 6 and 7 figure deals growing 21% year-over-year, resulting in over 2,500 customers contributing more than $100,000 in ARR [5] - The mix between volume expansion and product cross-sell improved to 70-30 from the historical 80-20, driven by higher attach rates of the Financials suite [22] Market Data and Key Metrics Changes - International revenue grew 13% year-over-year, impacted by currency headwinds, but on a constant currency basis, it grew 16% [20] - Significant global expansion wins included contracts with major contractors in Japan and the UAE, as well as partnerships with universities and large utility companies [14][15] Company Strategy and Development Direction - The company is focused on a go-to-market transition aimed at efficient growth and deeper customer partnerships [5] - Innovations introduced include Procore Helix, which enhances AI capabilities, and a comprehensive portfolio management solution for owners [7][8] - The company aims to leverage AI to transform workflows and attract a new generation of talent to the construction industry [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of construction, highlighting customer resilience and the potential for technological transformation [10][86] - The company is on track for solid operating margin improvement and aims for higher margins in the coming years [24][26] - The outlook for Q3 2025 anticipates revenue between $326 million and $328 million, representing year-over-year growth of 10% to 11% [27] Other Important Information - The company has achieved FedRAMP designation, enhancing its ability to serve federal agencies and contractors [17] - Management emphasized the importance of maintaining a disciplined approach to spending while focusing on operational leverage [27] Q&A Session Summary Question: Customer adoption of AI and platform unification - Management noted that customer demand for automation is high, and they are seeing unique challenges that customers want to address through the platform [30][31] Question: Go-to-market changes and productivity - The transition is progressing as planned, with improvements in conversion pipeline and deal cycles noted [38][39] Question: Rule of 40 and margin expansion - Management reiterated commitment to margin expansion, indicating that profitability will drive improvements in the Rule of 40 metric [46][61] Question: Customer feedback on pricing models - Management indicated flexibility in pricing models, with a focus on meeting customer preferences, especially in the owner segment [51][53] Question: Free cash flow generation - Management stated that free cash flow margins are expected to align with operating margins for the full year, despite quarterly fluctuations [78] Question: Impact of tariffs on customer projects - Customers are resilient and have built flexibility into their business models to manage tariff impacts [85][86] Question: Product packaging and bundling feedback - Early pilots on product packaging are ongoing, aimed at streamlining the sales process and meeting customer needs [130][132]

[Executive Summary](index=1&type=section&id=Executive%20Summary) Procore's Q2 2025 performance, strategic initiatives, and future financial outlook are summarized [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Procore reported solid Q2 2025 financial results, achieving 14% revenue growth, a 13% non-GAAP operating margin, and a 15% increase in high-value customers Financial Performance Summary | Metric | Q2 2025 (in millions) | YoY Change | | :--------------------------------- | :-------- | :--------- | | Revenue | $324 million | +14% | | GAAP Gross Margin | 79% | - | | Non-GAAP Gross Margin | 83% | - | | GAAP Operating Margin | (9%) | - | | Non-GAAP Operating Margin | 13% | - | | Operating Cash Inflow | $31 million | - | | Free Cash Inflow | $11 million | - | | Gross Revenue Retention Rate | 95% | - | - Number of organic customers contributing more than **$100,000** of annual recurring revenue totaled **2,517** as of June 30, 2025, an increase of **15%** year-over-year[7](index=7&type=chunk) - Added **195** net new organic customers in the second quarter, ending with a total of **17,501** organic customers[7](index=7&type=chunk) [Recent Business Highlights](index=1&type=section&id=Recent%20Business%20Highlights) Procore enhanced BIM capabilities via acquisitions, secured a federal designation, and unveiled product innovations at its Innovation Summit - Announced acquisitions of Novorender and Flypaper Technologies to double down on **Building Information Modeling (BIM)**[7](index=7&type=chunk) - Achieved Federal Risk and Authorization Management Program (**FedRAMP®**) "In Process" Designation and now listed on the FedRAMP marketplace[7](index=7&type=chunk) - Hosted Procore Innovation Summit and shared exciting product innovations[7](index=7&type=chunk) [Third Quarter and Full Year 2025 Outlook](index=1&type=section&id=Third%20Quarter%20and%20Full%20Year%20Outlook) Procore provided guidance for Q3 and the full year 2025, projecting continued revenue growth and stable non-GAAP operating margins Financial Outlook | Metric | Q3 2025 Outlook (in millions) | Full Year 2025 Outlook (in millions) | | :-------------------------- | :-------------------- | :--------------------- | | Revenue | $326M - $328M | $1,299M - $1,302M | | YoY Growth | 10% - 11% | 13% | | Non-GAAP Operating Margin | 13% - 13.5% | 13% - 13.5% | [Company Information](index=2&type=section&id=Company%20Information) Procore's conference call details, company overview, and contact information are provided [Quarterly Conference Call](index=2&type=section&id=Quarterly%20Conference%20Call) Procore will host a Q2 2025 earnings conference call on July 31, 2025, with a live webcast available on its investor relations website - Procore Technologies, Inc. will hold a conference call to discuss its second quarter results at **2:00 p.m., Pacific Time**, on **Thursday, July 31, 2025**[8](index=8&type=chunk) - A live audio webcast will be accessible on Procore's investor relations website at **http://investors.procore.com**[8](index=8&type=chunk) [About Procore](index=4&type=section&id=About%20Procore) Procore Technologies, Inc. is a leading global construction management software provider, leveraging AI and data for efficiency across millions of projects worldwide - Procore Technologies, Inc. (**NYSE: PCOR**) is a leading technology partner for every stage of construction[18](index=18&type=chunk) - Built for the industry, Procore's unified technology platform drives efficiency and mitigates risk through **AI & data-driven insights** and decision making[18](index=18&type=chunk) - Over **three million projects** have run on Procore across **150+ countries**[18](index=18&type=chunk) [Media and Investor Contacts](index=4&type=section&id=Media%20Contact) Contact information for media and investor inquiries is provided - Media Contact: **press@procore.com**[19](index=19&type=chunk) - Investor Contact: **ir@procore.com**[19](index=19&type=chunk) [Non-GAAP Financial Measures & Other Metrics](index=2&type=section&id=Non-GAAP%20Financial%20Measures) Procore's non-GAAP financial measures, free cash flow, and other key operational metrics are defined [Explanation of Non-GAAP Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) Procore utilizes non-GAAP measures, excluding specific non-cash or non-recurring items, to provide consistent and comparable insights into operating performance - Procore defines Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Income from Operations, Non-GAAP Operating Margin, Non-GAAP Net Income, and Non-GAAP Net Income per Share as the respective GAAP measures, excluding **stock-based compensation expense, amortization of acquired intangible assets, employer payroll tax related to employee stock transactions, and acquisition-related expenses**[12](index=12&type=chunk) - These non-GAAP financial measures are not prepared in accordance with GAAP, and are presented for supplemental purposes only[11](index=11&type=chunk) - Procore believes that non-GAAP financial information, when taken collectively, is helpful to investors because it provides **consistency and comparability** with past financial performance, and may assist in comparisons with other companies[11](index=11&type=chunk) [Free Cash Flow Definition](index=3&type=section&id=Free%20Cash%20Flow) Free cash flow is defined as net cash from operating activities less capital expenditures, serving as a key liquidity measure - Procore defines free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized software development costs[16](index=16&type=chunk) - Procore believes free cash flow is an important liquidity measure of the cash (if any) that is available, after our operating activities and capital expenditures[16](index=16&type=chunk) [Other Metrics](index=4&type=section&id=Other%20Metrics) Customer count excludes business combination customers without standard contracts, with other metric definitions referenced in the latest Form 10-Q - The aforementioned customer count excludes customers acquired from business combinations that do not have standard Procore annual contracts[17](index=17&type=chunk) - For information on how we calculate gross revenue retention rate and annual recurring revenue, refer to our most recent Quarterly Report on **Form 10-Q**[17](index=17&type=chunk) [GAAP Financial Statements](index=5&type=section&id=GAAP%20Financial%20Statements) Procore's condensed consolidated GAAP statements for operations, balance sheets, and cash flows are presented [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(unaudited)) Procore reported Q2 2025 revenue of $323.9 million, a gross profit of $256.2 million, and a widened net loss of $21.1 million, with increased operating expenses Condensed Consolidated Statements of Operations (unaudited) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $323,919 | $284,347 | $634,551 | $553,775 | | Cost of revenue | $67,732 | $48,101 | $132,658 | $93,824 | | Gross profit | $256,187 | $236,246 | $501,893 | $459,951 | | Sales and marketing | $141,897 | $127,922 | $280,581 | $248,916 | | Research and development | $88,902 | $72,308 | $176,511 | $142,907 | | General and administrative | $55,655 | $50,792 | $111,313 | $101,810 | | Total operating expenses | $286,454 | $251,022 | $568,405 | $493,633 | | Loss from operations | $(30,267) | $(14,776) | $(66,512) | $(33,682) | | Net loss | $(21,089) | $(6,311) | $(54,078) | $(17,277) | | Net loss per share, basic and diluted | $(0.14) | $(0.04) | $(0.36) | $(0.12) | Operating Expense Adjustments | Expense Category (in thousands) | Q2 2025 Stock-based Comp | Q2 2024 Stock-based Comp | Q2 2025 Amortization | Q2 2024 Amortization | Q2 2025 Employer Payroll Tax | Q2 2024 Employer Payroll Tax | Q2 2025 Acquisition-related | Q2 2024 Acquisition-related | | :------------------------------ | :----------------------- | :----------------------- | :------------------- | :------------------- | :--------------------------- | :--------------------------- | :-------------------------- | :-------------------------- | | Cost of revenue | $5,868 | $3,683 | $8,015 | $6,156 | $200 | $161 | - | - | | Sales and marketing | $17,589 | $15,671 | $3,346 | $3,145 | $748 | $788 | $138 | $1,000 | | Research and development | $21,237 | $17,628 | $658 | $665 | $1,103 | $900 | $695 | - | | General and administrative | $13,718 | $13,961 | - | - | $462 | $494 | $166 | $563 | | Total | $58,412 | $50,943 | $12,019 | $9,966 | $2,513 | $2,343 | $999 | $1,563 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) As of June 30, 2025, total assets and liabilities decreased, while remaining performance obligations significantly increased by 30% year-over-year Condensed Consolidated Balance Sheets (unaudited) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $324,262 | $437,722 | | Total current assets | $912,520 | $1,099,879 | | Total assets | $2,004,101 | $2,101,371 | | Total current liabilities | $705,883 | $728,032 | | Total liabilities | $786,502 | $813,018 | | Total stockholders' equity | $1,217,599 | $1,288,353 | Remaining Performance Obligations | Remaining Performance Obligations (in thousands) | June 30, 2025 | June 30, 2024 | Dollar Change (in thousands) | Percent Change | | :----------------------------------------------- | :-------------- | :-------------- | :------------ | :------------- | | Current | $879,489 | $724,832 | $154,657 | 21% | | Non-current | $464,268 | $310,381 | $153,887 | 50% | | Total | $1,343,757 | $1,035,213 | $308,544 | 30% | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) Net cash from operating activities decreased in Q2 2025, with investing activities using less cash and financing activities shifting to a net outflow Condensed Consolidated Statements of Cash Flows (unaudited) | Cash Flow Activity (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $30,828 | $58,695 | $96,856 | $127,840 | | Net cash used in investing activities | $(16,951) | $(146,626) | $(80,462) | $(151,296) | | Net cash (used in) provided by financing activities | $(5,424) | $15,757 | $(131,804) | $22,433 | | Net increase (decrease) in cash and cash equivalents | $8,453 | $(72,174) | $(115,410) | $(1,023) | | Cash and cash equivalents, end of period | $324,262 | $356,239 | $324,262 | $356,239 | [Non-GAAP Reconciliations](index=10&type=section&id=Non-GAAP%20Reconciliations) Reconciliations of GAAP to non-GAAP financial measures for gross profit, operating expenses, income from operations, net income, and free cash flow are presented [Reconciliation of Gross Profit and Margin](index=10&type=section&id=Reconciliation%20of%20gross%20profit%20and%20gross%20margin%20to%20non-GAAP%20gross%20profit%20and%20non-GAAP%20gross%20margin) For Q2 2025, non-GAAP gross profit was $270.3 million with an 83% margin, adjusted from GAAP figures primarily for stock-based compensation and amortization Reconciliation of Gross Profit and Gross Margin | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Revenue | $323,919 | $284,347 | | GAAP Gross profit | $256,187 | $236,246 | | Stock-based compensation expense | $5,868 | $3,683 | | Amortization of acquired technology intangible assets | $8,015 | $6,156 | | Employer payroll tax on employee stock transactions | $200 | $161 | | Non-GAAP gross profit | $270,270 | $246,246 | | GAAP Gross margin | 79% | 83% | | Non-GAAP gross margin | 83% | 87% | [Reconciliation of Operating Expenses](index=11&type=section&id=Reconciliation%20of%20operating%20expenses%20to%20non-GAAP%20operating%20expenses) Non-GAAP operating expenses for Q2 2025 were lower than GAAP across all categories due to adjustments, with sales and marketing at 37% of revenue Reconciliation of Operating Expenses | Operating Expense (in thousands) | GAAP Q2 2025 | Non-GAAP Q2 2025 | GAAP Q2 2024 | Non-GAAP Q2 2024 | | :------------------------------- | :----------- | :--------------- | :----------- | :--------------- | | Sales and marketing | $141,897 | $120,076 | $127,922 | $107,318 | | Research and development | $88,902 | $65,209 | $72,308 | $53,115 | | General and administrative | $55,655 | $41,309 | $50,792 | $35,774 | Operating Expense as % of Revenue | Operating Expense as % of Revenue | GAAP Q2 2025 | Non-GAAP Q2 2025 | GAAP Q2 2024 | Non-GAAP Q2 2024 | | :-------------------------------- | :----------- | :--------------- | :----------- | :--------------- | | Sales and marketing | 44% | 37% | 45% | 38% | | Research and development | 27% | 20% | 25% | 19% | | General and administrative | 17% | 13% | 18% | 13% | [Reconciliation of Income from Operations and Operating Margin](index=12&type=section&id=Reconciliation%20of%20income%20from%20operations%20and%20operating%20margin%20to%20non-GAAP%20income%20from%20operations%20and%20non-GAAP%20operating%20margin) Procore's Q2 2025 GAAP operating loss of $30.3 million adjusted to a non-GAAP income of $43.7 million, with a non-GAAP operating margin of 13% Reconciliation of Income from Operations and Operating Margin | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Revenue | $323,919 | $284,347 | | GAAP Loss from operations | $(30,267) | $(14,776) | | Stock-based compensation expense | $58,412 | $50,943 | | Amortization of acquired intangible assets | $12,019 | $9,966 | | Employer payroll tax on employee stock transactions | $2,513 | $2,343 | | Acquisition-related expenses | $999 | $1,563 | | Non-GAAP income from operations | $43,676 | $50,039 | | GAAP Operating margin | (9%) | (5%) | | Non-GAAP operating margin | 13% | 18% | [Reconciliation of Net Loss/Income and EPS](index=13&type=section&id=Reconciliation%20of%20net%20loss%20and%20net%20loss%20per%20share%20to%20non-GAAP%20net%20income%20and%20non-GAAP%20net%20income%20per%20share) Procore's Q2 2025 GAAP net loss of $21.1 million converted to a non-GAAP net income of $52.9 million, resulting in a diluted non-GAAP EPS of $0.35 Reconciliation of Net Loss/Income and EPS | Metric (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $323,919 | $284,347 | | GAAP Net loss | $(21,089) | $(6,311) | | Stock-based compensation expense | $58,412 | $50,943 | | Amortization of acquired intangible assets | $12,019 | $9,966 | | Employer payroll tax on employee stock transactions | $2,513 | $2,343 | | Acquisition-related expenses | $999 | $1,563 | | Non-GAAP net income | $52,854 | $58,504 | | GAAP net loss per share, diluted | $(0.14) | $(0.04) | | Non-GAAP net income per share, diluted | $0.35 | $0.39 | [Computation of Free Cash Flow](index=13&type=section&id=Computation%20of%20free%20cash%20flow) Procore's non-GAAP free cash flow for Q2 2025 significantly decreased to $10.6 million, primarily due to lower operating cash and increased capitalized software costs Computation of Free Cash Flow | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $30,828 | $58,695 | | Purchases of property, plant, and equipment | $(2,975) | $(1,874) | | Capitalized software development costs | $(17,226) | $(10,218) | | Non-GAAP free cash flow | $10,627 | $46,603 | [Legal Disclosures](index=2&type=section&id=Forward-Looking%20Statements) This section provides a disclaimer for forward-looking statements, highlighting inherent risks and no obligation for updates [Forward-Looking Statements Disclaimer](index=2&type=section&id=Forward-Looking%20Statements%20Disclaimer) This disclaimer addresses forward-looking statements about Procore's future performance and industry trends, noting substantial risks and no obligation to update them - This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, regarding Procore's outlook for Q3 and full fiscal year 2025, involving substantial risks and uncertainties[9](index=9&type=chunk) - The outcome of events described in these forward-looking statements is subject to risks, uncertainties, and other factors that could cause results to differ materially from Procore's current expectations[10](index=10&type=chunk) - Procore assumes no obligation to update any forward-looking statements to reflect events or circumstances that exist or change after the date on which they were made, except as required by law[10](index=10&type=chunk)

Core Viewpoint - Procore Technologies (PCOR) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended June 2025, with the actual results being crucial for its near-term stock price movement [1][2]. Earnings Expectations - The consensus estimate for Procore's quarterly earnings is $0.24 per share, reflecting a year-over-year decrease of 38.5%. Revenues are projected to be $311.47 million, which is a 9.5% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly reassessed their initial estimates during this period [4]. Earnings Surprise Prediction - Procore's Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.18%. The company currently holds a Zacks Rank of 3, making it challenging to predict an earnings beat [12]. Historical Performance - In the last reported quarter, Procore was expected to post earnings of $0.17 per share but exceeded expectations with earnings of $0.23, resulting in a surprise of +35.29%. Over the last four quarters, the company has beaten consensus EPS estimates three times [13][14]. Industry Comparison - Another player in the software industry, Automatic Data Processing (ADP), is expected to report earnings of $2.22 per share for the same quarter, indicating a year-over-year increase of 6.2%. ADP's revenues are projected to be $5.05 billion, up 5.9% from the previous year [18][19].