Core Insights - The article discusses the current market trends and potential investment opportunities within specific sectors, highlighting the importance of thorough analysis before making investment decisions [1][2]. Group 1: Market Trends - Recent market fluctuations have shown a significant impact on investor sentiment, with a notable increase in volatility observed in the tech sector [1]. - Analysts are focusing on the recovery patterns of various industries post-pandemic, particularly in consumer discretionary and travel sectors, which are showing signs of rebound [1]. Group 2: Investment Opportunities - There are emerging opportunities in renewable energy companies, driven by increased government incentives and consumer demand for sustainable solutions [1]. - The healthcare sector is also highlighted as a potential area for growth, especially companies involved in telehealth and biotechnology, which have gained traction during the pandemic [1]. Group 3: Risks and Considerations - Investors are advised to remain cautious of potential regulatory changes that could impact certain industries, particularly technology and finance [1]. - The article emphasizes the need for continuous monitoring of economic indicators that could affect market stability and investment returns [1].

Core Insights - True value in investments is derived from growth rather than short-term gains, emphasizing the importance of a long-term perspective [1] - Great businesses provide significant societal value and demonstrate durability, which is a key factor in their valuation [1] - Companies that offer products and services significantly superior to competitors are positioned for substantial growth [1] Business Characteristics - Selection, convenience, and value are critical attributes sought in businesses [1] - Durability acts as a multiplier for value, with a preference for non-cyclical businesses [1] - The ability to innovate and maintain competitive advantages is essential for long-term success [1] Revenue and Structure - Multiple revenue streams and anti-fragile business structures are preferred for resilience [1] - A business's ability to recover from adversity is a strong indicator of its durability [1] - Uniqueness is identified as the primary driver of value [1] Cost and Investment Strategy - Low costs associated with maintaining existing operations allow for high leverage in reinvestment and growth [1] - Minimal marketing expenses are advantageous for sustainable growth [1] - Trust and network effects are valuable indicators of a business's durability [1] Management and Leadership - Effective management is crucial, with a preference for executives whose interests align with the business [1] - Companies led by seasoned CEOs, founders, or family businesses are favored [1] - A culture that empowers employees and attracts talent is indicative of a good business [1] Market Timing and Investment Philosophy - The best investment opportunities arise when negative news is already priced in, revealing true value [1] - Companies that can maintain stability during layoffs and adverse conditions are seen as more valuable [1] - Price movements are influenced by expectations, with a focus on undervalued companies amidst negative sentiment [1]

Core Viewpoint - Procore Technologies, Inc. (NYSE: PCOR) is viewed positively due to its continuous revenue growth and potential for further expansion [1] Group 1 - The company has been classified as a "Buy" based on its revenue growth trajectory [1]

Core Insights - Procore Technologies reported quarterly earnings of $0.23 per share, exceeding the Zacks Consensus Estimate of $0.17 per share, but down from $0.30 per share a year ago, resulting in an earnings surprise of 35.29% [1] - The company achieved revenues of $310.63 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.75% and up from $269.43 million year-over-year [2] - Procore Technologies has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates four times in the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $314.29 million, and for the current fiscal year, it is $1.15 on revenues of $1.28 billion [7] - The estimate revisions trend for Procore Technologies is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which Procore Technologies belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5]

Financial Data and Key Metrics Changes - Total revenue in Q1 was $311 million, up 15% year over year, with international revenue growing 18% year over year [30] - Non-GAAP operating income was $32 million, representing a non-GAAP operating margin of 10% [30] - Current RPO grew 20% year over year, and current deferred revenue grew 15% year over year [31] Business Line Data and Key Metrics Changes - Procore has over 2,400 customers contributing more than $100,000 in ARR, indicating strong customer retention and growth [12] - The company added new customers across various sectors, including a major semiconductor company and a global commercial real estate firm [21][22] Market Data and Key Metrics Changes - International revenue growth was impacted by currency headwinds, with a constant currency growth of 20% year over year [30] - The company noted a steady pipeline and no significant changes in customer plans despite tariff uncertainties [10][36] Company Strategy and Development Direction - Procore is focused on driving digital transformation in the construction industry and enhancing its platform capabilities, including AI integration [11][15] - The company aims to expand its customer base, particularly in underpenetrated segments like owners and specialty contractors, and to increase product cross-sell opportunities [19][20] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about long-term growth despite short-term uncertainties due to tariffs, emphasizing the importance of productivity gains and risk management [10][12] - The company is maintaining its revenue guidance for the full year, expecting revenue between $1.286 billion and $1.290 billion, representing a year-over-year growth of 12% [39] Other Important Information - Procore has initiated a CEO succession plan, with a focus on finding a candidate who shares the company's vision and operational expertise [28][29] - The company returned approximately $100 million to shareholders through share repurchases in Q1 [34] Q&A Session Summary Question: Can you discuss the drivers behind the CRPO acceleration? - Management noted a strong new logo quarter and an increase in contract duration, contributing to the performance [46] Question: What are the early signs of success in international markets? - Management highlighted positive feedback from customers regarding new technical resources and bespoke go-to-market efforts [48][50] Question: How does Procore's value proposition resonate with customers amid uncertainty? - Management emphasized that customers appreciate Procore as a partner, providing more than just software solutions [56] Question: What metrics should be prioritized for measuring progress? - Management indicated that dollar volume is more critical than customer count, focusing on expanding existing customer relationships [78] Question: How is the company managing operational changes during the go-to-market transition? - Management acknowledged some disruption but expressed confidence in the transition's alignment with long-term goals [96]

Financial Data and Key Metrics Changes - Total revenue in Q1 was $311 million, up 15% year over year, with international revenue growing 18% year over year [29][30] - Non-GAAP operating income was $32 million, representing a non-GAAP operating margin of 10% [30] - Current RPO grew 20% year over year, and current deferred revenue grew 15% year over year [30] Business Line Data and Key Metrics Changes - The company has over 2,400 customers contributing more than $100,000 in ARR, indicating strong customer retention and growth [11] - The average contract duration increased from approximately 20 months to about 21.5 months, with the proportion of ARR on multi-year deals rising from 38% to 43% [44] Market Data and Key Metrics Changes - International revenue growth was impacted by currency headwinds, contributing approximately two points of headwind to international revenue growth; on a constant currency basis, international revenue grew 20% year over year [29][30] - The company noted a steady pipeline and that customers have not substantially altered their plans despite tariff uncertainties [9][34] Company Strategy and Development Direction - The company is focused on driving digital transformation in the construction industry and enhancing its platform capabilities, including AI integration [10][14] - The strategy includes acquiring new customers, expanding volume with existing customers, cross-selling products, and international expansion [19][20] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about long-term growth despite short-term headwinds from tariffs, emphasizing the importance of productivity gains and risk management [12][18] - The company is maintaining its revenue guidance for the full year, expecting revenue between $1.286 billion and $1.290 billion, representing total year-over-year growth of 12% [38] Other Important Information - The company is undergoing a go-to-market transition to build deeper partnerships with customers, which has been well received despite some initial disruption [25][26] - A CEO succession plan is in place, with a search for a successor being conducted thoughtfully and without urgency [27][28] Q&A Session Questions and Answers Question: Can you discuss the drivers behind the CRPO acceleration and the strength of new logos versus net revenue retention? - The company had a strong new logo quarter, contributing to performance, with longer contract durations providing flexibility for customers [42][44] Question: What are the early signs of success in international markets following the management changes? - New technical resources have improved customer engagement and adoption, indicating positive growth prospects [46][48] Question: How does the company view its role as a partner versus a vendor in the current market? - The company is seen as a partner providing significant value beyond software, helping customers navigate challenges and improve transparency [54] Question: How does the company plan to leverage its AI capabilities in the construction ecosystem? - The company has a unique vantage point with extensive data across various project types, enabling it to develop valuable AI tools that enhance productivity [58][60] Question: What metrics should investors focus on to measure progress in customer growth? - The focus is on dollar volume rather than customer count, with significant untapped opportunities remaining in the market [79][80] Question: Can you provide insights into the impact of longer contract durations on revenue recognition? - Longer durations allow for earlier reloading of CRPO, but do not impact revenue recognition directly [81][83]

Revenue Performance - Revenue for Q1 2025 was $311 million, representing a 15% year-over-year increase[7] - Revenue for the three months ended March 31, 2025, was $310,632 thousand, an increase of 15.3% compared to $269,428 thousand in 2024[31] - For Q2 2025, revenue is expected to be between $310 million and $312 million, indicating a year-over-year growth of 9% to 10%[7] - Full year 2025 revenue guidance is projected to be between $1,286 million and $1,290 million, reflecting a 12% year-over-year growth[7] Customer Metrics - The gross revenue retention rate achieved was 95% in Q1 2025[7] - The number of organic customers contributing over $100,000 in annual recurring revenue increased by 14% year-over-year to 2,418[7] - Procore added 218 net new organic customers in Q1 2025, totaling 17,306 organic customers[7] Financial Metrics - GAAP gross margin was 79%, while non-GAAP gross margin was 83%[7] - Operating cash inflow for Q1 2025 was $66 million, with free cash inflow of $47 million[7] - Non-GAAP income from operations for the three months ended March 31, 2025, was $32,399 thousand, compared to $37,066 thousand in 2024[33] - Non-GAAP net income for Q1 2025 was $35,655,000, down 20.8% from $45,006,000 in Q1 2024[34] - Non-GAAP net income per share, basic, was $0.24 in Q1 2025, compared to $0.31 in Q1 2024[34] - Non-GAAP free cash flow for Q1 2025 was $46,664,000, a decrease of 18.9% from $57,542,000 in Q1 2024[35] Loss and Expenses - Net loss for the three months ended March 31, 2025, was $(32,989) thousand, compared to $(10,966) thousand in 2024[30] - Cash and cash equivalents decreased to $313,734 thousand as of March 31, 2025, from $437,722 thousand at the end of 2024[27] - Total current assets decreased to $816,487 thousand in 2025 from $1,099,879 thousand in 2024[27] - Acquisition-related expenses totaled $2,080 thousand in 2025, significantly higher than $448 thousand in 2024[25] - Stock-based compensation expense increased to $48,279 thousand in 2025 from $40,132 thousand in 2024[30] Shareholder Actions - Procore repurchased approximately 1.5 million shares for about $100 million, with $200 million remaining for future repurchases[7] Industry Insights - The inaugural Future State of Construction Report was released, highlighting trends driven by AI, automation, and workforce shifts in the construction industry[7] Other Financial Changes - Total remaining performance obligations (RPO) increased by 28% to $1,290,265 thousand in 2025 from $1,006,815 thousand in 2024[28] - Total liabilities decreased to $767,067 thousand in 2025 from $813,018 thousand in 2024[27] - Weighted-average shares used in computing diluted net income per share increased to 154,220,017 in Q1 2025 from 151,184,305 in Q1 2024[34] - Capitalized software development costs increased to $(15,331,000) in Q1 2025 from $(9,514,000) in Q1 2024[35] - Employer payroll tax on employee stock transactions was $4,001,000 in Q1 2025, slightly down from $4,189,000 in Q1 2024[34]

Core Viewpoint - Procore Technologies (PCOR) is anticipated to report a year-over-year decline in earnings despite an increase in revenues, which could significantly influence its stock price depending on the actual results compared to estimates [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for May 1, 2025, with expectations of quarterly earnings at $0.17 per share, reflecting a year-over-year decrease of 43.3%. Revenues are projected to be $302.32 million, representing a 12.2% increase from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised down by 38.71% over the last 30 days, indicating a collective reassessment by analysts regarding the company's earnings prospects [4][10]. Earnings Surprise Prediction - The Zacks Earnings ESP (Expected Surprise Prediction) model indicates that the Most Accurate Estimate for Procore is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -3.45%. This suggests a bearish outlook from analysts [6][11]. Historical Performance - In the last reported quarter, Procore was expected to post earnings of $0.11 per share but only achieved $0.01, leading to a surprise of -90.91%. Over the last four quarters, the company has beaten consensus EPS estimates three times [12][13]. Industry Comparison - In the Zacks Internet - Software industry, Udemy, Inc. (UDMY) is expected to report earnings of $0.10 per share for the same quarter, indicating a year-over-year increase of 233.3%. However, Udemy also has a negative Earnings ESP of -8.16%, making it difficult to predict an earnings beat [17][18].

Core Insights - True value in investments comes from growth rather than short-term gains, emphasizing a long-term perspective on evaluation [1] - Great businesses provide significant societal value and exhibit durability, deserving of substantial growth [1] - Key characteristics sought in businesses include selection, convenience, value, and durability, with a preference for non-cyclical businesses [1] Business Characteristics - Businesses that consistently outperform competitors through superior products and services are favored [1] - The ability to create multiple revenue streams and maintain complex operations is seen as advantageous [1] - A business's resilience in the face of adversity is a critical test of its durability [1] Value Drivers - Uniqueness is identified as the primary driver of value [1] - Low costs associated with maintaining existing operations allow for high leverage in reinvestment and growth [1] - Trust and network effects are important indicators of a business's durability [1] Management Importance - Effective management is crucial, with a preference for executives who have aligned interests and a strong focus on the business [1] - Companies led by seasoned CEOs, founders, or family businesses are viewed favorably [1] - Good management fosters a culture that empowers employees and attracts talent [1] Investment Strategy - The success of companies like Amazon illustrates the benefits of a customer-centric approach [1] - Buyback strategies are recommended for businesses with durable models [1] - The optimal investment timing is when negative news is already priced in, revealing true value [1] Market Dynamics - Price movements are influenced by expectations and surprises, with a focus on undervalued factors amidst negative sentiment [1]

Core Insights - The article does not provide specific insights or analysis regarding any companies or industries, focusing instead on disclaimers and disclosures related to the author's position and affiliations [1][2]. Summary by Categories - **Company Analysis**: No specific company analysis or performance data is provided in the article [1][2]. - **Industry Insights**: The article lacks any insights or trends related to specific industries [1][2]. - **Market Trends**: There are no discussions on market trends or investment opportunities mentioned [1][2].