Customer Growth and Revenue - As of December 31, 2023, the number of customers on the platform reached 16,367, reflecting a year-over-year growth rate of 13%[32] - The number of customers contributing more than $100,000 of annual recurring revenue (ARR) increased to 2,008, representing a year-over-year growth rate of 27%[32] - Revenue for 2023 was $950.0 million, showing a year-over-year growth of 32% compared to $720.2 million in 2022[32] - Customers contributing more than $1,000,000 of ARR grew to 62, reflecting a year-over-year growth rate of 32%[32] - Customers contributing more than $100,000 of ARR represented 60% of total ARR in 2023, up from 52% in 2021[32] Financial Performance - The company reported net losses of $189.7 million in 2023, an improvement from $286.9 million in 2022[32] - Revenue for 2023 reached $950.0 million, up from $720.2 million in 2022, representing a growth of approximately 32%[113] - The company incurred a net loss of $189.7 million in 2023, following losses of $286.9 million in 2022 and $265.2 million in 2021[115] - As of December 31, 2023, the company had an accumulated deficit of $1.1 billion[115] Product and Platform Features - The platform's modular architecture allows integration with third-party applications, enhancing functionality and user experience[45] - The platform supports various product categories, including Preconstruction, Project Execution, Workforce Management, and Financial Management[48] - The platform features developer-friendly open APIs and tools, enabling customers and third-party developers to build integrations and customized applications, enhancing product functionality[61] - Procore Estimating streamlines the bidding process, enabling customers to quickly perform digital quantity takeoffs and create customer-facing proposals, improving profitability[75] - Procore Pay was introduced as a payment solution to facilitate transactions between general contractors and subcontractors, integrating various functionalities[88] Market Strategy and Expansion - The company focuses on expanding existing customers' use of the platform by capturing more projects and offering new products[32] - The growth strategy includes expanding sales and marketing efforts to increase customer base, particularly targeting owners, general contractors, and specialty contractors[75] - The company plans to pursue targeted acquisitions to enhance platform features and functionality, having acquired Levelset and LaborChart in 2021, and Unearth Technologies in 2023[75] - The company aims to expand its operations both domestically and internationally to drive future growth[113] - The company plans to continue expanding its international operations, which may include opening offices in new jurisdictions and providing products in additional languages[128] Competition and Market Challenges - The company faces significant competition in the construction management software market, with competitors having advantages such as better name recognition and larger marketing budgets[132] - The construction management software market is still in early phases of maturity, with many companies relying on outdated workflows[90] - The company acknowledges that failure to adapt could materially adversely affect its business and financial condition[121] Technology and Innovation - The company is investing in technology innovation and product development to enhance customer experience and expand its centralized platform[71] - The company is planning to continue significant investments to increase capacity and develop new technologies in its cloud infrastructure operations[143] Data Privacy and Security - The company is subject to stringent data privacy and security laws, with potential fines of up to €20 million or 4% of annual global revenue for violations under the EU's GDPR[154] - Compliance with various data protection laws, including the CCPA, may require significant resources and could lead to operational disruptions if not managed properly[158] - Cyberattacks and malicious activities threaten the confidentiality and integrity of sensitive information, with increasing difficulty in detection and a variety of sources involved[166] - Ransomware attacks are becoming more prevalent and severe, potentially leading to significant operational interruptions and reputational harm[167] - The company has implemented security measures, but there is no assurance that these measures will be effective against all vulnerabilities[171] Legal and Regulatory Risks - The company may face increased scrutiny and legal challenges related to data transfers from the EU and U.K. to the U.S., which could disrupt operations[157] - The evolving legal landscape regarding data privacy and AI may necessitate changes in business practices and incur additional compliance costs[156] - The company may face reputational harm and financial consequences from litigation related to regulatory compliance and other business practices[186] - The company is subject to governmental export and import controls that could impair its ability to compete in international markets[196] Intellectual Property - The company holds 56 issued patents and has 73 pending patent applications in the U.S. as of December 31, 2023[103] - The company relies on a combination of patent, copyright, trademark, and trade secret laws to protect its intellectual property rights[206] - The issued patents in the U.S. will expire between 2034 and 2042[206] Human Resources and Management - The company has 3,694 full-time employees, with 3,119 based in the U.S. and 575 in international locations[98] - The company is highly dependent on key management personnel, particularly the CEO, for achieving strategic objectives, and losing them could adversely affect operations[145] - The company faces significant competition for qualified personnel, which is critical for enhancing products and services and achieving growth in research and development[147] - Maintaining corporate culture is essential for innovation and teamwork, and failure to do so could impair the ability to attract and retain customers[148]

Financial Data and Key Metrics Changes - Total revenue in Q4 was $260 million, up 29% year-over-year, with international revenue growing 32% year-over-year. On a constant currency basis, international revenue grew 35% year-over-year [45] - Free cash flow generation was $29 million, leading to free cash flow per share of $0.32 for the full year 2023 [29][49] - The net revenue retention rate remained stable at 114%, with gross retention at 95% [85] Business Line Data and Key Metrics Changes - Expansion performed better than new logo acquisition, with customer count growth decelerating slightly [23] - The company surpassed $1 billion in total Annual Recurring Revenue (ARR) [29] - Current Remaining Performance Obligations (cRPO) grew 24% year-over-year, aided by early renewals [45][116] Market Data and Key Metrics Changes - The demand environment remains challenging, with a notable shift in customer sentiment due to rising interest rates [30] - The company is focusing on the upper end of the market, which typically has longer sales cycles [50][67] Company Strategy and Development Direction - The company plans to focus on its core strengths while investing in related areas to bolster core offerings [15] - The acquisition of Unearth aims to enhance support for horizontal infrastructure projects [16] - The company sees significant growth opportunities in the ENR 400 contractors and broader specialty contractor landscape [18][42] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that 2023 was a challenging year compared to 2022 but emphasizes the importance of efficiency improvements and customer relationships [20][32] - The company expects 2024 to be another strong year for cash flow generation, with revenue guidance between $1.137 billion and $1.142 billion, representing a 20% year-over-year growth [53][81] - Management remains optimistic about future growth despite current economic headwinds [79][134] Other Important Information - The company improved non-GAAP operating margins by 1,200 basis points in 2023, reflecting a strong commitment to operational efficiency [75] - The leadership team is focused on redistributing resources to high-ROI areas, resulting in only 4% headcount growth year-over-year [48] Q&A Session Summary Question: What does the focus on larger general contractors mean for customer count? - Management does not over-index on customer count, focusing instead on expansion with enterprise customers who are increasing volume and product purchases [84][85] Question: How is the company managing cRPO volatility in Q1? - Management indicated that dynamics remain consistent with Q4, facing a challenging demand environment [86] Question: Will Procore's bookings see a lagging or real-time impact from market upswing? - Management stated that the pricing model allows for forward-looking metrics, as customers commit to future volume [89] Question: Can the company invest in growth areas while improving margins? - Management confirmed that there is flexibility within the margin guidance to continue investing in growth opportunities [90] Question: What are the implications of longer sales cycles on new business activity? - Management noted that longer sales cycles are impacting commitments, but improvements in customer sentiment could lead to stronger commitments [98]

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for the company [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for Procore Technologies, Inc., including the balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This table presents the company's financial position, detailing assets, liabilities, and stockholders' equity | (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :--------------- | :----------- | :----------- | | **Assets** | | | | Total current assets | $841,946 | $799,219 | | Total assets | $1,783,001 | $1,740,410 | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $561,555 | $531,638 | | Total liabilities | $659,250 | $623,630 | | Total stockholders' equity | $1,123,751 | $1,116,780 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This table summarizes the company's financial performance, including revenue, gross profit, and net loss | (in thousands, except per share) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenue | $247,907 | $186,429 | $689,969 | $518,150 | | Gross profit | $203,782 | $148,650 | $563,338 | $410,304 | | Loss from operations | $(50,351) | $(71,813) | $(178,343) | $(215,252) | | Net loss | $(43,847) | $(71,205) | $(160,175) | $(215,747) | | Net loss per share (basic & diluted) | $(0.31) | $(0.52) | $(1.13) | $(1.59) | [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section details changes in stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit - As of September 30, 2023, the company had **143,452,776 shares** of common stock issued and outstanding, an increase from **139,159,534 shares** at December 31, 2022. Additional paid-in capital increased from **$2,068,225 thousand** to **$2,235,480 thousand**, while the accumulated deficit grew from **$(949,143) thousand** to **$(1,109,318) thousand**[27](index=27&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This table outlines cash flows from operating, investing, and financing activities, showing changes in cash balances | (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $51,272 | $(10,084) | | Net cash used in investing activities | $(58,539) | $(338,646) | | Net cash provided by financing activities | $26,650 | $29,258 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $19,383 | $(319,472) | | Cash, cash equivalents and restricted cash, end of period | $318,318 | $267,726 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Organization and Description of Business](index=13&type=section&id=1.%20Organization%20and%20Description%20of%20Business) This note describes Procore Technologies, Inc.'s 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[35](index=35&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - The company operates as a **single operating segment**[39](index=39&type=chunk) [2. Summary of Significant Accounting Policies](index=13&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and estimates used in preparing the financial statements - The company's financial statements are prepared in accordance with U.S. GAAP, with management making estimates for revenue recognition, contract cost assets, fair value measurements, stock-based compensation, and other areas[37](index=37&type=chunk)[38](index=38&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - Marketable securities are classified as short-term available-for-sale debt securities, with **no credit losses** recorded in the periods presented[42](index=42&type=chunk) - Procore ceased originations under its materials financing program in October 2023[43](index=43&type=chunk) - As of September 30, 2023, gross receivables from this program were **$12.4 million**, with an allowance for expected credit losses of **$4.4 million**[44](index=44&type=chunk) - The aggregate amount of the transaction price allocated to remaining performance obligations (RPO) was **$890.4 million** as of September 30, 2023, with **$635.0 million (71%)** expected to be recognized as revenue in the next 12 months[55](index=55&type=chunk) [3. Investments](index=16&type=section&id=3.%20Investments) This note details the company's marketable securities and strategic investments, including their fair values Marketable Securities (in thousands) | Type | Amortized Cost (Sep 30, 2023) | Fair Value (Sep 30, 2023) | Amortized Cost (Dec 31, 2022) | Fair Value (Dec 31, 2022) | | :------------------------ | :---------------------------- | :------------------------ | :---------------------------- | :------------------------ | | U.S. treasury securities | $122,063 | $121,932 | $86,666 | $86,477 | | Commercial paper | $72,851 | $72,777 | $73,234 | $72,914 | | Corporate notes and obligations | $96,564 | $96,340 | $65,150 | $65,150 | | Time deposits | $17,115 | $17,113 | $60,951 | $60,952 | | **Total** | **$308,593** | **$308,162** | **$286,001** | **$285,493** | - During the nine months ended September 30, 2023, the company had maturities of marketable securities totaling **$287.6 million** and sales of **$5.5 million**[57](index=57&type=chunk) - Strategic investments include equity securities, limited partnerships, and available-for-sale debt securities, with a contractual obligation for additional investment funding of up to **$5.9 million** in limited partnerships[58](index=58&type=chunk)[59](index=59&type=chunk) [4. Fair Value of Financial Instruments](index=18&type=section&id=4.%20Fair%20Value%20of%20Financial%20Instruments) This note provides a breakdown of financial assets measured at fair value across different valuation levels Financial Assets Measured at Fair Value (in thousands) | Category | Level 1 (Sep 30, 2023) | Level 2 (Sep 30, 2023) | Level 3 (Sep 30, 2023) | Total (Sep 30, 2023) | | :------- | :--------------------- | :--------------------- | :--------------------- | :------------------- | | Cash equivalents: Money market funds | $286,061 | — | — | $286,061 | | Marketable securities: U.S. treasury securities | $121,932 | — | — | $121,932 | | Marketable securities: Commercial paper | — | $72,777 | — | $72,777 | | Marketable securities: Corporate notes and obligations | — | $96,340 | — | $96,340 | | Marketable securities: Time deposits | — | $17,113 | — | $17,113 | | Strategic investments: Investments in available-for-sale debt securities | — | — | $360 | $360 | | **Total** | **$407,993** | **$186,230** | **$360** | **$594,583** | [5. Leases](index=19&type=section&id=5.%20Leases) This note describes the company's lease arrangements, including changes to right-of-use assets and liabilities - Operating lease commencements and modifications resulted in net increases to right-of-use assets and corresponding operating lease liabilities of **$13.6 million** during the nine months ended September 30, 2023, primarily for office spaces in Dublin, Ireland, Tampa, Florida, and Toronto, Canada[65](index=65&type=chunk) [6. Intangible Assets and Goodwill](index=19&type=section&id=6.%20Intangible%20Assets%20and%20Goodwill) This note details the company's intangible assets and goodwill, including recent acquisitions and amortization - On September 15, 2023, Procore acquired Unearth Technologies, Inc. for **$9.2 million**, primarily for developed technology with an estimated useful life of **five years**[66](index=66&type=chunk) - Goodwill stood at **$539.1 million** as of September 30, 2023, with changes primarily due to foreign currency translation[70](index=70&type=chunk) Finite-Lived Intangible Assets (in thousands) | Asset Type | Gross Carrying Amount (Sep 30, 2023) | Accumulated Amortization (Sep 30, 2023) | Net Carrying Amount (Sep 30, 2023) | Weighted Average Remaining Useful Life (Years) | | :------------------ | :----------------------------------- | :-------------------------------------- | :--------------------------------- | :--------------------------------------------- | | Developed technology | $166,302 | $(60,547) | $105,755 | 4.5 | | Customer relationships | $66,350 | $(27,878) | $38,472 | 4.4 | | **Total** | **$232,652** | **$(88,425)** | **$144,227** | **4.5** | [7. Accrued Expenses](index=20&type=section&id=7.%20Accrued%20Expenses) This note itemizes the components of accrued expenses, including bonuses, commissions, and payroll liabilities Components of Accrued Expenses (in thousands) | Component | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------------------- | :----------- | :----------- | | Accrued bonuses | $24,184 | $28,357 | | Accrued commissions | $13,112 | $20,389 | | Accrued salary, payroll tax, and employee benefit liabilities | $42,105 | $34,113 | | Other accrued expenses | $15,729 | $16,323 | | **Total accrued expenses** | **$95,130** | **$99,182** | [8. Commitments and Contingencies](index=20&type=section&id=8.%20Commitments%20and%20Contingencies) This note outlines the company's outstanding purchase commitments and potential legal contingencies - The company has outstanding minimum purchase commitments of **$34.2 million** as of September 30, 2023, primarily for hosting services[72](index=72&type=chunk) - No material legal matters or claims are currently pending that would adversely affect financial position[74](index=74&type=chunk)[75](index=75&type=chunk) [9. Stock-Based Compensation](index=21&type=section&id=9.%20Stock-Based%20Compensation) This note details the company's stock-based compensation plans, including authorized shares and expense recognition - The 2021 Equity Incentive Plan authorized **44,622,937 shares** of common stock for issuance as of September 30, 2023, with **31,407,854 shares** available[78](index=78&type=chunk) - Total unrecognized stock-based compensation cost for RSUs and PSUs was **$416.5 million**, expected to be recognized over **2.6 years**[84](index=84&type=chunk) Total Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Cost of revenue | $1,931 | $1,835 | $5,509 | $5,339 | | Sales and marketing | $14,310 | $15,483 | $41,781 | $38,351 | | Research and development | $16,347 | $17,758 | $52,395 | $43,910 | | General and administrative | $12,221 | $9,701 | $32,549 | $28,281 | | **Total expense** | **$44,809** | **$44,777** | **$132,234** | **$115,881** | [10. Income Taxes](index=25&type=section&id=10.%20Income%20Taxes) This note reports income tax expenses and the company's valuation allowance on deferred tax assets - Income tax expenses were **$0.2 million** and **$0.6 million** for the three and nine months ended September 30, 2023, respectively[96](index=96&type=chunk) - The company maintains a **full valuation allowance** on its U.S. federal and state net deferred tax assets[96](index=96&type=chunk) [11. Net Loss Per Share](index=25&type=section&id=11.%20Net%20Loss%20Per%20Share) This note explains the calculation of basic and diluted net loss per share, noting anti-dilutive securities - Due to net losses, all potentially dilutive securities are anti-dilutive, meaning basic and diluted net loss per share are equal[99](index=99&type=chunk) - For the three months ended September 30, 2023, basic and diluted net loss per share was **$(0.31)**, and for the nine months, it was **$(1.13)**[21](index=21&type=chunk)[99](index=99&type=chunk) [12. Geographic Information](index=25&type=section&id=12.%20Geographic%20Information) This note provides a breakdown of revenue by geographic region, highlighting U.S. versus international contributions Revenue by Geographic Region (in thousands) | Region | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | U.S. | $212,902 | $159,585 | $593,135 | $442,963 | | Rest of the world | $35,005 | $26,844 | $96,834 | $75,187 | | **Total revenue** | **$247,907** | **$186,429** | **$689,969** | **$518,150** | | Percentage of revenue: U.S. | 86% | 86% | 86% | 85% | | Percentage of revenue: Rest of the world | 14% | 14% | 14% | 15% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting key performance drivers, revenue components, operating expenses, and liquidity [Overview](index=26&type=section&id=Overview) This section introduces Procore's business as a cloud-based construction management software provider and its market approach - Procore is a leading global provider of cloud-based construction management software, aiming to connect and empower construction industry stakeholders[104](index=104&type=chunk)[106](index=106&type=chunk) - The platform modernizes construction by providing real-time access to project information, simplifying workflows, and facilitating communication, with pricing generally based on products and annual construction volume[108](index=108&type=chunk) [Certain Factors Affecting Our Performance](index=27&type=section&id=Certain%20Factors%20Affecting%20Our%20Performance) This section discusses key drivers and trends influencing the company's financial performance, including customer growth and RPO - Customer count increased **14% year-over-year** to **16,067** as of September 30, 2023[110](index=110&type=chunk) - The Gross Retention Rate (GRR) remained strong at **95%** for both September 30, 2023, and 2022, indicating high customer retention[112](index=112&type=chunk) Remaining Performance Obligations (in thousands) | Category | Sep 30, 2023 | Sep 30, 2022 | Change (Dollar) | Change (Percent) | | :------- | :----------- | :----------- | :-------------- | :--------------- | | Current RPO | $635,000 | $501,400 | $133,600 | 27% | | Non-current RPO | $255,381 | $213,600 | $41,781 | 20% | | **Total RPO** | **$890,381** | **$715,000** | **$175,381** | **25%** | - The company continues to invest in technology innovation and product development, including the launch of Procore Risk Advisors in March 2023[116](index=116&type=chunk)[117](index=117&type=chunk) - The materials financing program, assumed from the Levelset acquisition, ceased originations in October 2023[118](index=118&type=chunk) - International expansion is a key growth opportunity, with non-U.S. revenue accounting for **14%** of total revenue for the nine months ended September 30, 2023[119](index=119&type=chunk)[120](index=120&type=chunk) [Components of Results of Operations](index=30&type=section&id=Components%20of%20Results%20of%20Operations) This section details the various revenue and expense categories that constitute the company's operating results - Revenue is primarily generated from subscriptions, recognized ratably over the term[124](index=124&type=chunk) - Cost of revenue includes personnel, hosting, and amortization of acquired technology and capitalized software development costs[125](index=125&type=chunk) - Operating expenses (sales & marketing, R&D, G&A) are heavily influenced by personnel-related compensation and are expected to increase with business growth and international expansion[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - Other financial items include interest income from marketable securities, interest expense from finance leases, accretion income from marketable debt securities, and other net expenses (foreign currency, equity securities)[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - The company maintains a **full valuation allowance** for U.S. deferred tax assets[135](index=135&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance for the reported periods Revenue and Gross Profit Comparison (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Change (Dollar) | Change (Percent) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change (Dollar) | Change (Percent) | | :------------ | :-------------------------- | :-------------------------- | :-------------- | :--------------- | :-------------------------- | :-------------------------- | :-------------- | :--------------- | | Revenue | $247,907 | $186,429 | $61,478 | 33% | $689,969 | $518,150 | $171,819 | 33% | | Cost of Revenue | $44,125 | $37,779 | $6,346 | 17% | $126,631 | $107,846 | $18,785 | 17% | | Gross Profit | $203,782 | $148,650 | $55,132 | 37% | $563,338 | $410,304 | $153,034 | 37% | | Gross Margin | 82% | 80% | 2% pts | | 82% | 79% | 3% pts | | Operating Expenses Comparison (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Change (Dollar) | Change (Percent) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change (Dollar) | Change (Percent) | | :---------------------- | :-------------------------- | :-------------------------- | :-------------- | :--------------- | :-------------------------- | :-------------------------- | :-------------- | :--------------- | | Sales and marketing | $129,672 | $109,608 | $20,064 | 18% | $372,397 | $306,806 | $65,591 | 21% | | Research and development | $72,708 | $71,493 | $1,215 | 2% | $225,960 | $195,569 | $30,391 | 16% | | General and administrative | $51,753 | $39,362 | $12,391 | 31% | $143,324 | $123,181 | $20,143 | 16% | | Loss from operations | $(50,351) | $(71,813) | $21,462 | 30% | $(178,343) | $(215,252) | $36,909 | 17% | - Interest income significantly increased by **$2.8 million** (3 months) and **$11.9 million** (9 months) due to higher interest rates and purchases of marketable securities[148](index=148&type=chunk)[149](index=149&type=chunk) - Accretion income, net, also saw substantial increases of **$2.3 million** (3 months) and **$5.9 million** (9 months) for similar reasons[156](index=156&type=chunk)[157](index=157&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles GAAP to non-GAAP financial measures, providing alternative views of core business performance - The company uses non-GAAP measures (Gross Profit, Gross Margin, Operating Expenses, Income/Loss from Operations, Operating Margin) to evaluate performance, excluding stock-based compensation, amortization of acquired intangibles, employer payroll tax on stock transactions, and acquisition-related expenses[158](index=158&type=chunk)[160](index=160&type=chunk) - These adjustments aim to provide a clearer view of core business performance[160](index=160&type=chunk) Non-GAAP Operating Margin Reconciliation (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | GAAP Loss from operations | $(50,351) | $(71,813) | $(178,343) | $(215,252) | | Total adjustments | $58,005 | $58,447 | $178,945 | $156,994 | | Non-GAAP income (loss) from operations | $7,654 | $(13,366) | $602 | $(58,308) | | GAAP Operating margin | (20%) | (39%) | (26%) | (42%) | | Non-GAAP operating margin | 3% | (7%) | 0% | (11%) | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet short-term and long-term obligations, including cash flow and capital needs - As of September 30, 2023, principal liquidity sources were cash, cash equivalents, and marketable securities totaling **$626.5 million**[165](index=165&type=chunk) - The company ceased originations under its materials financing program in October 2023, with **$8.0 million** in net receivables outstanding[168](index=168&type=chunk) - Despite an accumulated deficit of **$1.1 billion**, existing liquidity is believed to be sufficient for the next 12 months, though additional capital may be required for strategic initiatives[169](index=169&type=chunk)[170](index=170&type=chunk) Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $51,272 | $(10,084) | | Net cash used in investing activities | $(58,539) | $(338,646) | | Net cash provided by financing activities | $26,650 | $29,258 | - Net cash provided by operating activities was **$51.3 million** for the nine months ended September 30, 2023, a significant improvement from net cash used of **$10.1 million** in the prior year, driven by increased deferred revenue and accounts receivable collections[175](index=175&type=chunk)[177](index=177&type=chunk) - Net cash used in investing activities decreased to **$58.5 million** from **$338.6 million**, primarily due to marketable securities maturities and sales offsetting purchases[178](index=178&type=chunk)[179](index=179&type=chunk) [Critical Accounting Policies and Estimates](index=44&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights accounting policies requiring significant management judgment and their impact on financial reporting - The company's critical accounting policies and estimates, detailed in Note 2 and the Annual Report on Form 10-K, involve significant judgment in areas such as revenue recognition, fair value measurements, and stock-based compensation[183](index=183&type=chunk) - No significant changes to these policies were reported for the nine months ended September 30, 2023[184](index=184&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to various market risks, including foreign currency, interest rate, and inflation risks, and how these might impact its financial condition and results of operations [Foreign Currency and Exchange Risk](index=45&type=section&id=Foreign%20Currency%20and%20Exchange%20Risk) This section discusses the company's exposure to foreign currency fluctuations and its current hedging strategy - The company is exposed to foreign currency exchange rate fluctuations as revenue is primarily in USD, but expenses are in various foreign currencies[186](index=186&type=chunk) - Currently, no derivative or hedging transactions are in place, but this may change if exposure becomes more significant[186](index=186&type=chunk) [Interest Rate Risk](index=45&type=section&id=Interest%20Rate%20Risk) This section addresses the company's exposure to interest rate changes on its cash and marketable securities - With **$626.5 million** in cash, cash equivalents, and marketable securities, the company is subject to interest rate risk[187](index=187&type=chunk) - However, due to the short-term nature of its investments, material risks from interest rate changes are not anticipated, and no derivative financial instruments are used for hedging[187](index=187&type=chunk) [Inflation Risk](index=45&type=section&id=Inflation%20Risk) This section evaluates the potential impact of inflation on the company's operations, costs, and pricing - Inflation can positively impact pricing by increasing construction volume, but it can also lead to higher personnel costs, supply chain challenges, and delayed projects[188](index=188&type=chunk) - The company does not believe inflation has had a material effect on its business to date[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of the company's disclosure controls and procedures and internal control over financial reporting, concluding on their effectiveness and noting any changes [(a) Evaluation of Disclosure Controls and Procedures](index=46&type=section&id=%28a%29%20Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports management's conclusion on the effectiveness of the company's disclosure controls and procedures - As of September 30, 2023, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures are **effective** at a reasonable level to ensure timely and accurate reporting of required information[190](index=190&type=chunk)[191](index=191&type=chunk) [(b) Changes in Internal Control Over Financial Reporting](index=46&type=section&id=%28b%29%20Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section addresses any material changes in the company's internal control over financial reporting during the quarter - There have been **no changes** in internal control over financial reporting during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[191](index=191&type=chunk) [(c) Limitations on Effectiveness of Controls and Procedures](index=46&type=section&id=%28c%29%20Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) This section acknowledges inherent limitations of control systems, including the risk of circumvention or management override - Management acknowledges that control systems provide only reasonable, not absolute, assurance and can be circumvented by individual acts, collusion, or management override, leading to potential undetected errors or fraud[192](index=192&type=chunk) [PART II. OTHER INFORMATION](index=47&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes legal proceedings, risk factors, equity sales, other information, and exhibits [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings that are expected to have a material adverse effect on its business, results of operations, financial condition, or cash flow - Procore is not currently a party to any legal proceedings that, if determined adversely, would reasonably be expected to have a **material adverse effect** on its business, results of operations, financial condition, or cash flow[195](index=195&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks that could materially adversely affect the company's business, financial condition, results of operations, and prospects. These risks span various categories, including business and industry-specific challenges, human capital and culture, regulatory and legal compliance, intellectual property, acquisition-related issues, tax matters, and financial market risks [Risks Related to Our Business and Industry](index=47&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) This section details risks associated with the company's growth, industry competition, economic sensitivity, and operational reliance - The company's rapid growth may not be indicative of future performance, and it has a history of losses, with **no assurance of future profitability**[198](index=198&type=chunk)[200](index=200&type=chunk) - Its business is highly susceptible to economic changes and spending fluctuations within the construction industry, which could reduce revenue[203](index=203&type=chunk) - Failure to adapt to the rapidly evolving construction management software industry, develop new products, or provide adequate customer support could materially affect the business[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - International expansion, while a growth opportunity, introduces increased business, regulatory, and economic risks, including foreign currency fluctuations[209](index=209&type=chunk)[212](index=212&type=chunk) - Maintaining a strong brand and expanding sales and marketing capabilities are crucial for customer acquisition and retention[213](index=213&type=chunk)[214](index=214&type=chunk) - The company operates in a highly competitive market, facing potential price pressures and competitors with greater resources[215](index=215&type=chunk)[217](index=217&type=chunk) - Service interruptions, performance issues, and reliance on third-party data centers (like AWS) pose significant operational risks[218](index=218&type=chunk)[223](index=223&type=chunk) - The materials financing program, which ceased originations in October 2023, exposed the company to credit, performance, and liquidity risks, including potential financial losses from customer defaults and challenges in enforcing mechanic's lien rights across various jurisdictions[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk) [Risks Related to Our Employees and Culture](index=53&type=section&id=Risks%20Related%20to%20Our%20Employees%20and%20Culture) This section addresses risks concerning talent acquisition, retention, and the preservation of corporate culture - The company's future success is highly dependent on its ability to attract, retain, and motivate key management personnel, including its CEO, and other qualified employees[230](index=230&type=chunk)[232](index=232&type=chunk) - Failure to maintain its corporate culture, especially with growing remote work, could hinder innovation, teamwork, and execution[233](index=233&type=chunk) [Risks Related to Our Regulatory and Legal Environment](index=54&type=section&id=Risks%20Related%20to%20Our%20Regulatory%20and%20Legal%20Environment) This section covers risks from data privacy laws, cybersecurity threats, evolving regulations, and potential legal challenges - The company is subject to stringent, evolving, and potentially inconsistent data privacy and security laws globally (e.g., CCPA, CPRA, EU/UK GDPR, LGPD)[235](index=235&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk)[240](index=240&type=chunk) - Non-compliance or perceived failures could lead to regulatory actions, litigation, significant fines, reputational harm, and operational disruptions, especially concerning cross-border data transfers[246](index=246&type=chunk) - Information technology systems and data, including those of third parties, are vulnerable to cyberattacks, fraud, and other compromises, which could result in security incidents, operational disruptions, and severe consequences[247](index=247&type=chunk)[248](index=248&type=chunk)[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) - Remote work and acquisitions further increase these risks[257](index=257&type=chunk) - The company faces a wide range of evolving laws and regulations (e.g., internet, marketing, taxation, labor), with uncertainty in their application and enforcement[262](index=262&type=chunk)[263](index=263&type=chunk) - Increased government scrutiny of the technology industry, potential changes to Section 230 of the CDA, and export/import controls, along with anti-corruption laws (FCPA, UK Bribery Act), could negatively affect business operations and lead to penalties[265](index=265&type=chunk)[267](index=267&type=chunk)[269](index=269&type=chunk)[271](index=271&type=chunk)[275](index=275&type=chunk) - Lien rights management services may subject the company to Unlicensed Practice of Law (UPL) allegations, with varying and vague laws across jurisdictions[276](index=276&type=chunk)[277](index=277&type=chunk) - The materials financing program also faced regulatory scrutiny, with a risk of being re-characterized as loans, leading to additional compliance requirements and potential penalties[279](index=279&type=chunk)[281](index=281&type=chunk)[283](index=283&type=chunk) [Risks Related to Our Intellectual Property](index=63&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section discusses risks concerning intellectual property protection, third-party licenses, and platform misuse - Failure to adequately protect intellectual property rights (patents, copyrights, trademarks, trade secrets) could diminish brand value and allow competitors to replicate the platform[285](index=285&type=chunk)[287](index=287&type=chunk)[288](index=288&type=chunk) - Reliance on third-party licenses means an inability to maintain these could limit product development[291](index=291&type=chunk) - The use of open-source software also carries risks of litigation and potential public release of proprietary code[292](index=292&type=chunk) - Misuse of the platform by customers or users for unauthorized, offensive, or illegal activities (e.g., spam, scams, copyright infringement) could damage the company's reputation and lead to litigation and liability, especially with potential changes to Section 230 of the CDA[293](index=293&type=chunk)[294](index=294&type=chunk) [Risks Related to Our Acquisitions](index=65&type=section&id=Risks%20Related%20to%20Our%20Acquisitions) This section outlines challenges in integrating acquisitions and realizing their anticipated strategic and financial benefits - The company may be unsuccessful in making, integrating, and maintaining acquisitions, joint ventures, and strategic investments, potentially failing to realize anticipated benefits, disrupting ongoing business, increasing expenses, and leading to impairment charges[295](index=295&type=chunk)[296](index=296&type=chunk) - Financing these transactions could also affect financial condition or stock value[297](index=297&type=chunk) [Risks Related to Tax Matters](index=65&type=section&id=Risks%20Related%20to%20Tax%20Matters) This section addresses potential liabilities from sales taxes, transfer pricing, and changes in tax laws - Tax authorities may successfully assert that the company should have collected sales and use, VAT, or similar taxes, leading to substantial liabilities due to uncertainties in 'nexus' and taxability of online services, especially with evolving economic nexus laws post-Wayfair[299](index=299&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk) - The company's corporate structure and intercompany arrangements subject it to complex transfer pricing regulations, risking additional taxes, interest, and penalties if tax authorities disagree with its determinations[303](index=303&type=chunk)[304](index=304&type=chunk) - Changes in tax laws (e.g., TCJA, Inflation Reduction Act, BEPS 2.0) could significantly increase tax obligations[305](index=305&type=chunk)[306](index=306&type=chunk) - The ability to use Net Operating Loss (NOL) carryforwards and other tax attributes may be limited by ownership changes under IRC Section 382 and 383, potentially accelerating or permanently increasing state taxes owed[307](index=307&type=chunk) [Risks Related to Capital Requirements, Credit Concentration, Liquidity, and Our Marketable Securities Portfolio](index=68&type=section&id=Risks%20Related%20to%20Capital%20Requirements%2C%20Credit%20Concentration%2C%20Liquidity%2C%20and%20Our%20Marketable%20Securities%20Portfolio) This section covers risks related to capital needs, investment portfolio value, and financial services industry stability - The company may need to raise additional capital for business growth, which may not be available on acceptable terms, potentially hindering its ability to compete[309](index=309&type=chunk)[310](index=310&type=chunk) - Its marketable securities portfolio is subject to credit, liquidity, market, and interest rate risks, which could cause its value to decline[311](index=311&type=chunk) - Adverse developments in the financial services industry, such as bank failures (e.g., Silicon Valley Bank), could materially affect the company's liquidity and ability to access its cash, cash equivalents, and marketable securities, as balances often exceed FDIC insurance limits[312](index=312&type=chunk)[313](index=313&type=chunk) [General Risks Related to Our Business and Investing in Our Common Stock](index=69&type=section&id=General%20Risks%20Related%20to%20Our%20Business%20and%20Investing%20in%20Our%20Common%20Stock) This section covers risks concerning financial reporting, operational disruptions, stock volatility, and corporate governance - Failure to maintain effective disclosure controls and internal control over financial reporting could impair the ability to produce timely and accurate financial statements, leading to a loss of investor confidence and potential regulatory sanctions[314](index=314&type=chunk)[317](index=317&type=chunk) - Revenue recognition over subscription terms means that downturns or upturns in new business are not immediately reflected in results[318](index=318&type=chunk)[319](index=319&type=chunk) - Excessive fraudulent activity or inability to meet evolving credit card association merchant standards could result in substantial costs and loss of credit card acceptance[322](index=322&type=chunk)[323](index=323&type=chunk) - The business is also vulnerable to disruptions from catastrophic occurrences like natural disasters or conflicts[324](index=324&type=chunk)[325](index=325&type=chunk) - The market price of common stock may be volatile due to macroeconomic factors and industry trends[327](index=327&type=chunk) - Concentration of ownership among executive officers, directors, and principal stockholders may limit the influence of new investors[328](index=328&type=chunk) - Provisions in organizational documents and Delaware law could make company acquisition more difficult and limit stockholder actions[330](index=330&type=chunk) - Exclusive forum provisions in the certificate of incorporation (Delaware Court of Chancery for certain disputes, U.S. federal district courts for Securities Act claims) could limit stockholders' ability to choose a judicial forum, potentially increasing costs or discouraging lawsuits[332](index=332&type=chunk)[334](index=334&type=chunk)[335](index=335&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=73&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds during the reporting period - There were **no unregistered sales** of equity securities or use of proceeds during the quarterly period ended September 30, 2023[336](index=336&type=chunk)[337](index=337&type=chunk) [Item 5. Other Information](index=74&type=section&id=Item%205.%20Other%20Information) This section provides information on insider trading arrangements adopted by directors and officers during the quarter Insider Trading Arrangements (Rule 10b5-1) | Name and Position | Action | Adoption Date | Rule 10b5-1 | Total Shares of Common Stock to be Sold (Max) | Expiration Date | | :---------------------------- | :------- | :--------------- | :---------- | :-------------------------------------------- | :----------------- | | Howard Fu, Chief Financial Officer and Treasurer | Adoption | August 9, 2023 | x | 28,084 | August 9, 2024 | | Graham V. Smith, Director | Adoption | September 7, 2023 | x | 11,057 | September 7, 2024 | | Benjamin C. Singer, Chief Legal Officer and Corporate Secretary | Adoption | September 8, 2023 | x | 80,454 | September 9, 2024 | | Nanci E. Caldwell, Director | Adoption | September 11, 2023 | x | 29,597 | September 11, 2024 | | Elisa A. Steele, Director | Adoption | September 14, 2023 | x | 23,417 | September 14, 2024 | [Item 6. Exhibits](index=75&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including organizational documents, certifications, and XBRL-related files - The report includes exhibits such as the Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Section 302 and 906 Certifications of Principal Executive and Financial Officers, and Inline XBRL documents[345](index=345&type=chunk) [Signatures](index=76&type=section&id=Signatures) This section contains the official signatures of the company's President and Chief Executive Officer, and Chief Financial Officer and Treasurer, certifying the filing of the Quarterly Report on Form 10-Q - The Quarterly Report on Form 10-Q was signed on **November 2, 2023**, by Craig F. Courtemanche, Jr., President and Chief Executive Officer, and Howard Fu, Chief Financial Officer and Treasurer[349](index=349&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________________________ FORM 10-Q _________________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ...

Procore Technologies, Inc. (NYSE:PCOR) Q2 2023 Earnings Conference Call August 2, 2023 5:00 PM ET Company Participants Matthew Puljiz - Vice President, Finance Tooey Courtemanche - Founder, President and Chief Executive Officer Howard Fu - Chief Financial Officer Conference Call Participants DJ Hynes - Canaccord Saket Kalia - Barclays Adam Borg - Stifel Sterling Auty - Moffett Nathanson Luv Sodha - Jefferies Matt Broome - Mizuho Josh Tilton - Wolfe Research Brent Bracelin - Piper Sandler Nick Altmann - Scot ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________________________ FORM 10-Q _________________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ t ...

Procore Technologies, Inc. (NYSE:PCOR) Q1 2023 Earnings Conference Call May 3, 2023 5:00 PM ET Company Participants Matthew Puljiz - VP of Finance and Investor Relations Tooey F. Courtemanche - Founder, President and Chief Executive Officer Paul Lyandres - Chief Financial Officer Howard Fu - Senior Vice President of Finance Conference Call Participants Dylan Becker - William Blair DJ Hynes - Canaccord Saket Kalia - Barclays Brent Bracelin - Piper Sandler Brent Thill - Jefferies Adam Borg - Stifel Ken Wong - ...

Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ 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 001-40396 Procore Technologies, Inc. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Indicate by check mark whether the Registrant has submitted electronically every Interactive Data Fi ...

Procore Technologies, Inc. (NYSE:PCOR) Q4 2022 Earnings Conference Call February 16, 2023 5:00 PM ET Company Participants Matthew Puljiz - Investor Relations Tooey Courtemanche - Founder, President and Chief Executive Officer Paul Lyandres - Chief Financial Officer Howard Fu - Senior Vice President, Finance Conference Call Participants Luv Sodha - Jefferies Saket Kalia - Barclays Sterling Auty - SVB DJ Hynes - Canaccord Brent Bracelin - Piper Sandler Adam Borg - Stifel Dylan Becker - William Blair Ken Wong ...

[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section provides disclaimers regarding forward-looking statements, cautioning investors about inherent risks and uncertainties [Forward-Looking Statements Disclosure](index=3&type=section&id=Forward-Looking%20Statements%20Disclosure) This section discloses the presence of forward-looking statements concerning future financial performance and business strategy, advising against undue reliance due to inherent risks - The report contains **forward-looking statements** regarding future operating results, financial position, business strategy, market growth, and the impact of the COVID-19 pandemic[7](index=7&type=chunk) - Investors should **not rely** on forward-looking statements as predictions of future events, as outcomes are subject to **substantial risks and uncertainties** detailed in the 'Risk Factors' section[8](index=8&type=chunk) - The company **does not undertake any obligation to update** forward-looking statements to reflect events or circumstances after the report date, except as required by law[10](index=10&type=chunk) [Risk Factors Summary](index=5&type=section&id=RISK%20FACTORS%20SUMMARY) This section summarizes the principal risks associated with investing in the company's common stock [Key Risks Overview](index=5&type=section&id=Key%20Risks%20Overview) This section outlines key material risks for common stock investors, including growth management, profitability, industry sensitivity, and operational challenges - Investing in the company's common stock involves a **high degree of risk**, and this summary highlights key material factors[13](index=13&type=chunk) - Rapid growth may not be indicative of future growth, and failure to manage it could adversely affect the business[14](index=14&type=chunk) - The company has a history of losses and may not achieve or sustain profitability[14](index=14&type=chunk) - Business is significantly impacted by changes in the economy and reductions in construction industry spending[14](index=14&type=chunk) - The construction management software industry is evolving and may not develop as expected[14](index=14&type=chunk) - Current and future products may not be widely accepted, and the company may not respond to technological changes or customer demands[14](index=14&type=chunk) - International expansion exposes the company to increased business, regulatory, and economic risks[14](index=14&type=chunk) - Maintaining and enhancing a strong brand is crucial for customer base expansion[14](index=14&type=chunk) - Ability to increase customer base depends on developing and expanding sales and marketing capabilities[14](index=14&type=chunk) - The company operates in a competitive market and must continue to compete effectively[14](index=14&type=chunk) - Results of operations may fluctuate significantly, making future results difficult to predict[14](index=14&type=chunk) - Loss of key management or inability to retain/hire qualified personnel could hinder strategic objectives[14](index=14&type=chunk) - Stringent and changing data privacy and security obligations pose risks of investigations, litigation, fines, and reputational harm[14](index=14&type=chunk) - Compromised IT systems or data could lead to adverse consequences[14](index=14&type=chunk) - Failure to offer high-quality customer support may harm customer relationships[14](index=14&type=chunk) - Failure to maintain effective disclosure controls and internal control over financial reporting could impair financial statements and compliance[14](index=14&type=chunk) - The COVID-19 pandemic has had and could continue to have an adverse impact on business and operations[14](index=14&type=chunk) [Part I. Financial Information](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows, with accompanying notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's condensed consolidated balance sheets as of September 30, 2022, and December 31, 2021 Condensed Consolidated Balance Sheets (in thousands) | Item | September 30, 2022 | December 31, 2021 | | :-------------------------------- | :------------------- | :------------------ | | **Assets** | | | | Cash and cash equivalents | $264,622 | $586,108 | | Marketable securities | $293,430 | $- | | Total current assets | $735,372 | $752,288 | | Total assets | $1,677,304 | $1,690,657 | | **Liabilities & Equity** | | | | Total current liabilities | $458,903 | $403,704 | | Total liabilities | $553,003 | $501,368 | | Total stockholders' equity | $1,124,301 | $1,189,289 | | Total liabilities, redeemable convertible preferred stock and stockholders' equity | $1,677,304 | $1,690,657 | - Cash and cash equivalents decreased significantly from **$586.1 million** at December 31, 2021, to **$264.6 million** at September 30, 2022. However, marketable securities increased from **$0 to $293.4 million**[17](index=17&type=chunk) - Total assets slightly decreased from **$1,690.7 million** to **$1,677.3 million**, while total liabilities increased from **$501.4 million** to **$553.0 million**[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 presents the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2022 and 2021 Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Item | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenue | $186,429 | $131,990 | $518,150 | $368,718 | | Gross profit | $148,650 | $109,297 | $410,304 | $300,173 | | Loss from operations | $(71,813) | $(49,557) | $(215,252) | $(211,477) | | Net loss | $(71,205) | $(50,742) | $(215,747) | $(214,193) | | Net loss per share (basic and diluted) | $(0.52) | $(0.39) | $(1.59) | $(2.71) | - Revenue increased by **41% YoY** for the three months ended September 30, 2022, and by **41% YoY** for the nine months ended September 30, 2022[18](index=18&type=chunk) - Net loss increased for the three months ended September 30, 2022, to **$(71.2) million** from **$(50.7) million** in the prior year, and slightly increased for the nine months ended September 30, 2022, to **$(215.7) million** from **$(214.2) million**[18](index=18&type=chunk) [Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Redeemable%20Convertible%20Preferred%20Stock%20and%20Stockholders%27%20Equity%20%28Deficit%29) This section details changes in redeemable convertible preferred stock and stockholders' equity (deficit) for the periods presented Changes in Stockholders' Equity (in thousands) | Item | September 30, 2022 | December 31, 2021 | | :------------------------------------ | :------------------- | :------------------ | | Common Stock | $14 | $13 | | Additional Paid-in Capital | $2,004,995 | $1,852,071 | | Accumulated Other Comprehensive Loss | $(2,749) | $(583) | | Accumulated Deficit | $(877,959) | $(662,212) | | Total Stockholders' Equity | $1,124,301 | $1,189,289 | - Total stockholders' equity decreased from **$1,189.3 million** at December 31, 2021, to **$1,124.3 million** at September 30, 2022, primarily due to an increase in accumulated deficit[17](index=17&type=chunk)[23](index=23&type=chunk) - Additional paid-in capital increased by **$152.9 million** during the nine months ended September 30, 2022, driven by stock option exercises, stock-based compensation, and employee stock purchase plan proceeds[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(10,084) | $40,305 | | Net cash used in investing activities | $(338,646) | $(42,020) | | Net cash provided by financing activities | $29,258 | $694,946 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(319,472) | $693,231 | | Cash, cash equivalents and restricted cash, end of period | $267,726 | $1,075,444 | - Operating activities shifted from providing **$40.3 million** in cash in 2021 to using **$10.1 million** in 2022[25](index=25&type=chunk) - Investing activities used significantly more cash in 2022 (**$338.6 million**) compared to 2021 (**$42.0 million**), primarily due to purchases of marketable securities (**$293.1 million**) and increased capitalized software development costs[25](index=25&type=chunk)[174](index=174&type=chunk) - Financing activities provided substantially less cash in 2022 (**$29.3 million**) compared to 2021 (**$694.9 million**), as 2021 included significant proceeds from the initial public offering[25](index=25&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes accompanying 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 cloud-based construction management platform and its global operations - Procore Technologies, Inc. provides a cloud-based construction management platform and related software products, enabling collaboration among key stakeholders in the construction industry[30](index=30&type=chunk) - The company was incorporated in California in 2002, re-incorporated in Delaware in 2014, and is headquartered in Carpinteria, California, with global operations[31](index=31&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the significant accounting policies and estimates used in preparing the unaudited financial statements - The financial statements are unaudited and prepared in accordance with U.S. GAAP, with certain information condensed or omitted[32](index=32&type=chunk) - Management's estimates and assumptions, particularly regarding revenue recognition, business combinations, stock-based compensation, and goodwill, are periodically evaluated[33](index=33&type=chunk) - The company operates as a **single operating segment**, with the CEO evaluating financial information on a consolidated basis[36](index=36&type=chunk) - Deferred revenue from contractual rights to invoice in advance of service transfer was **$329.1 million** (current) and **$5.0 million** (non-current) as of September 30, 2022[17](index=17&type=chunk)[44](index=44&type=chunk) - Remaining performance obligations totaled **$714.9 million** as of September 30, 2022, with approximately **70%** expected to be recognized as revenue in the next 12 months[45](index=45&type=chunk) - In January 2022, the company began partially self-funding its health insurance plan, with a net self-insurance accrual of **$1.7 million** as of September 30, 2022[47](index=47&type=chunk) - The materials financing program, assumed via the Levelset acquisition, generates revenue from origination fees and finance charges, with receivables of **$13.6 million** as of September 30, 2022[48](index=48&type=chunk)[49](index=49&type=chunk) - The company adopted ASU 2020-06, 'Simplifying the Accounting for Convertible Instruments,' on January 1, 2022, with an **immaterial impact** on financial statements[54](index=54&type=chunk) [3. Investments](index=15&type=section&id=3.%20INVESTMENTS) This note details the company's marketable securities and strategic investment activities Marketable Securities as of September 30, 2022 (in thousands) | Item | Amortized Cost | Fair Value | | :-------------------------- | :------------- | :--------- | | U.S. treasury securities | $104,756 | $104,516 | | Commercial paper | $65,295 | $65,295 | | Corporate notes and obligations | $61,993 | $61,659 | | Time deposits | $61,959 | $61,960 | | Total marketable securities | $294,003 | $293,430 | - All marketable securities held as of September 30, 2022, had a contractual maturity of **less than one year**, and there were **no sales, maturities, or impairments** during the nine months ended September 30, 2022[57](index=57&type=chunk) Strategic Investment Activity (in thousands) | Item | Equity Securities | Limited Partnerships | Available-for-Sale Debt Securities | Total | | :------------------------------------------ | :---------------- | :------------------- | :--------------------------------- | :------ | | Balance as of December 31, 2021 | $3,882 | $- | $3,450 | $7,332 | | Purchases of strategic investments | $- | $3,303 | $350 | $3,653 | | Conversion of available-for-sale debt securities into equity securities | $3,680 | $- | $(3,680) | $- | | Balance as of September 30, 2022 | $7,748 | $3,153 | $353 | $11,254 | - As of September 30, 2022, the company had a contractual obligation to provide additional investment funding of up to **$6.7 million** for limited partnerships[58](index=58&type=chunk) [4. Fair Value of Financial Instruments](index=16&type=section&id=4.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note provides information on the fair value measurements of the company's financial instruments Financial Assets Measured at Fair Value (in thousands) | Item | Level 1 | Level 2 | Level 3 | Total | | :---------------------------------------- | :-------- | :-------- | :-------- | :-------- | | **September 30, 2022** | | | | | | Cash equivalents: Money market funds | $14,977 | $- | $- | $14,977 | | Cash equivalents: Commercial paper | $7 | $3,991 | $- | $3,998 | | Marketable securities: U.S. treasury securities | $104,516 | $- | $- | $104,516 | | Marketable securities: Commercial paper | $- | $65,295 | $- | $65,295 | | Marketable securities: Corporate notes and obligations | $- | $61,659 | $- | $61,659 | | Marketable securities: Time deposits | $- | $61,960 | $- | $61,960 | | Strategic investments: Available-for-sale debt securities | $- | $- | $353 | $353 | | **Total (Sep 30, 2022)** | $119,500 | $192,905 | $353 | $312,758 | | **December 31, 2021** | | | | | | Cash equivalents: Money market funds | $514,907 | $- | $- | $514,907 | | Strategic investments: Available-for-sale debt securities | $- | $- | $3,450 | $3,450 | | **Total (Dec 31, 2021)** | $514,907 | $- | $3,450 | $518,357 | - The company's financial instruments in current assets and liabilities approximate fair value due to their **short-term nature**[42](index=42&type=chunk) - Investments in available-for-sale debt securities in private companies are classified as **Level 3** due to significant unobservable inputs in fair value estimation[42](index=42&type=chunk) [5. Leases](index=17&type=section&id=5.%20LEASES) This note describes the company's lease arrangements, primarily for office space and equipment - The company primarily leases office space and miscellaneous equipment, with initial non-cancelable terms ranging from **one to ten years**[61](index=61&type=chunk) - Operating lease commencements and modifications resulted in a net increase of **$11.5 million** in right-of-use assets and corresponding liabilities during the nine months ended September 30, 2022, mainly for new office spaces in Sydney, New York, and Dublin[62](index=62&type=chunk) [6. Intangible Assets and Goodwill](index=17&type=section&id=6.%20INTANGIBLE%20ASSETS%20AND%20GOODWILL) This note provides details on the company's finite-lived intangible assets and goodwill Finite-Lived Intangible Assets (in thousands) | Item | September 30, 2022 (Net Carrying Amount) | December 31, 2021 (Net Carrying Amount) | | :---------------------- | :--------------------------------------- | :-------------------------------------- | | Developed technology | $121,406 | $141,760 | | Customer relationships | $50,897 | $60,217 | | Total | $172,303 | $201,977 | Intangible Assets Amortization Expense (in thousands) | Item | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Cost of revenue | $5,627 | $1,086 | $16,935 | $3,258 | | Sales and marketing | $3,106 | $404 | $9,318 | $1,349 | | Research and development | $877 | $907 | $2,674 | $1,770 | | Total amortization of acquired intangible assets | $9,610 | $2,397 | $28,927 | $6,377 | - Goodwill was **$539.0 million** as of September 30, 2022, decreasing by **$1.9 million** during the nine months ended September 30, 2022, due to post-close working capital adjustments from business combinations and foreign currency translation[64](index=64&type=chunk) [7. Accrued Expenses](index=18&type=section&id=7.%20ACCRUED%20EXPENSES) This note details the components of the company's accrued expenses Components of Accrued Expenses (in thousands) | Item | September 30, 2022 | December 31, 2021 | | :------------------------------------ | :------------------- | :------------------ | | Accrued commissions and bonuses | $34,002 | $29,676 | | Accrued salary, payroll tax, and employee benefit liabilities | $35,763 | $25,997 | | Other accrued expenses | $13,314 | $10,234 | | Total accrued expenses | $83,079 | $65,907 | - Total accrued expenses increased by **$17.2 million** from December 31, 2021, to September 30, 2022, primarily driven by increases in accrued commissions and bonuses, and accrued salary, payroll tax, and employee benefit liabilities[66](index=66&type=chunk) [8. Contingencies](index=18&type=section&id=8.%20CONTINGENCIES) This note addresses potential legal matters, claims, and indemnification obligations - The company 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[67](index=67&type=chunk) - In the ordinary course of business, the company provides indemnification of varying scope to customers, vendors, investors, directors, and officers, but has **never paid a material claim** and has not accrued a liability for these guarantees[68](index=68&type=chunk)[69](index=69&type=chunk) [9. Credit Facility](index=18&type=section&id=9.%20CREDIT%20FACILITY) This note describes the termination of the company's Credit Facility and remaining outstanding letters of credit - The company terminated its Credit Facility with Silicon Valley Bank on **April 29, 2022**, prior to its May 7, 2022 maturity date[70](index=70&type=chunk) - As of December 31, 2021, **no amounts had been drawn** under the Credit Facility, and the company was in compliance with all financial covenants[71](index=71&type=chunk) - Outstanding letters of credit totaling **$6.5 million**, securing leased office facilities, remain outstanding on an unsecured basis after the Credit Facility termination[72](index=72&type=chunk) [10. Common Stock](index=18&type=section&id=10.%20COMMON%20STOCK) This note outlines the authorized shares of common and preferred stock following the company's IPO - Upon IPO closing, the company's Amended and Restated Certificate of Incorporation authorized **1,000,000,000 shares of common stock** and **100,000,000 shares of undesignated preferred stock**, each with a par value of **$0.0001**[73](index=73&type=chunk) [11. Stock-Based Compensation](index=19&type=section&id=11.%20STOCK-BASED%20COMPENSATION) This note details the company's stock-based compensation plans, including stock options, RSUs, and ESPP, and related expenses - The 2021 Equity Incentive Plan authorized **30,962,615 shares** in May 2021, with an automatic annual increase. On January 1, 2022, an additional **6,702,346 shares** were added, leaving **29,353,552 shares available** as of September 30, 2022[75](index=75&type=chunk) Stock Option Activity (Nine Months Ended Sep 30, 2022) | Item | Number of Shares | Weighted Average Exercise Price | | :-------------------------- | :--------------- | :------------------------------ | | Outstanding at Dec 31, 2021 | 7,642,690 | $12.98 | | Exercised | (1,498,783) | $12.84 | | Canceled/Forfeited | (198,272) | $21.96 | | Outstanding at Sep 30, 2022 | 5,945,635 | $12.72 | | Exercisable at Sep 30, 2022 | 5,514,332 | $11.98 | - Total unrecognized stock-based compensation cost for unvested stock options was **$3.4 million**, expected to be recognized over **0.6 years**[76](index=76&type=chunk) RSU Activity (Nine Months Ended Sep 30, 2022) | Item | Number of Shares | Weighted Average Grant Date Fair Value | | :-------------------------- | :--------------- | :------------------------------------- | | Outstanding at Dec 31, 2021 | 6,622,684 | $59.72 | | Granted | 5,283,117 | $55.91 | | Vested | (2,136,203) | $56.78 | | Canceled/Forfeited | (1,012,085) | $57.75 | | Outstanding at Sep 30, 2022 | 8,757,513 | $58.36 | - Total unrecognized stock-based compensation cost for RSUs was **$419.0 million**, expected to be recognized over a weighted-average vesting period of **2.6 years**[80](index=80&type=chunk) - In November 2021, **199,670 RSAs** were issued for the Levelset acquisition, with a fair value of **$95.05 per share**, resulting in **$7.1 million** stock-based compensation expense during the nine months ended September 30, 2022[81](index=81&type=chunk) - The 2021 Employee Stock Purchase Plan (ESPP) reserved **2,600,000 shares** initially, increasing by **1,340,469 shares** on January 1, 2022. Employees can purchase shares at **85%** of the lower of the fair market value on the offering period start or purchase period end[84](index=84&type=chunk)[87](index=87&type=chunk) - During the nine months ended September 30, 2022, **$11.6 million** in stock-based compensation was recorded for the ESPP, and **286,997 shares** were purchased[90](index=90&type=chunk) Total Stock-Based Compensation Expense (in thousands) | Item | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Cost of revenue | $1,835 | $679 | $5,339 | $6,758 | | Sales and marketing | $15,483 | $11,178 | $38,351 | $57,285 | | Research and development | $17,758 | $15,064 | $43,910 | $69,627 | | General and administrative | $9,701 | $11,262 | $28,281 | $52,259 | | Total stock-based compensation expense | $44,777 | $38,183 | $115,881 | $185,929 | [12. Income Taxes](index=22&type=section&id=12.%20INCOME%20TAXES) This note outlines income tax expenses and the company's valuation allowance on deferred tax assets - Income tax expenses were **$0.3 million** and **less than $0.1 million** for the three months ended September 30, 2022 and 2021, respectively. For the nine months, expenses were **$0.7 million** and **$0.2 million**[95](index=95&type=chunk) - As of September 30, 2022, the company maintained a **full valuation allowance** on its U.S. federal, state, and certain foreign net deferred tax assets, expecting them not to be realized[95](index=95&type=chunk) [13. Net Loss Per Share](index=22&type=section&id=13.%20NET%20LOSS%20PER%20SHARE) This note provides details on the calculation of basic and diluted net loss per share - Basic and diluted net loss per share attributable to common stockholders were **$(0.52)** and **$(0.39)** for the three months ended September 30, 2022 and 2021, respectively, and **$(1.59)** and **$(2.71)** for the nine months[18](index=18&type=chunk) - All potentially dilutive securities were **anti-dilutive** for all periods presented due to net losses, meaning basic and diluted net loss per share were equal[99](index=99&type=chunk) Anti-Dilutive Shares Excluded from EPS Calculation | Item | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Restricted stock units and restricted stock awards subject to future vesting | 8,759,518 | 5,834,027 | 7,998,571 | 6,057,965 | | Shares issuable pursuant to the ESPP | 849,109 | 598,844 | 716,860 | 261,035 | | Shares of common stock issuable from stock options | 6,142,312 | 8,818,741 | 6,652,983 | 10,132,359 | | Total | 15,750,939 | 15,251,612 | 15,368,414 | 61,148,695 | [14. Geographic Information](index=23&type=section&id=14.%20GEOGRAPHIC%20INFORMATION) This note presents the company's revenue breakdown by geographic region Revenue by Geographic Region (in thousands) | Region | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | U.S. | $159,585 | $111,774 | $442,963 | $315,711 | | Rest of the world | $26,844 | $20,216 | $75,187 | $53,007 | | Total revenue | $186,429 | $131,990 | $518,150 | $368,718 | | **Percentage of revenue:** | | | | | | U.S. | 86% | 85% | 85% | 86% | | Rest of the world | 14% | 15% | 15% | 14% | - U.S. revenue increased by **42.8%** for the three months and **40.3%** for the nine months ended September 30, 2022, while Rest of the World revenue increased by **32.8%** and **41.8%** respectively[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section offers management's perspective on the company's financial condition, operating results, revenue drivers, cost structures, and liquidity [Overview](index=24&type=section&id=Overview) This section provides an overview of Procore's mission to connect the construction industry through its cloud-based management platform - Procore's mission is to connect everyone in construction on a **global platform**, transforming the industry with cloud-based construction management software[105](index=105&type=chunk)[106](index=106&type=chunk) - The platform enables real-time access to project information, simplifies workflows, and facilitates communication, aiming to be the **system of record** for the construction industry[106](index=106&type=chunk) - Revenue is primarily generated from subscriptions based on the number and mix of products and the annual construction volume contracted, with an **unlimited user model** to maximize platform usage[110](index=110&type=chunk) [Certain Factors Affecting Our Performance](index=24&type=section&id=Certain%20Factors%20Affecting%20Our%20Performance) This section discusses key factors influencing the company's performance, including customer growth, technology innovation, international expansion, and the COVID-19 pandemic - Customer growth: Added **683 net new customers** in Q3 2022, including **189 from LaborChart**. Total customers increased **21% YoY to 14,086** as of September 30, 2022 (excluding Levelset and Esticom customers). Levelset has **over 3,000 customers** - Technology innovation: Continued investment in R&D and product development, including through acquisitions like Levelset and LaborChart, to expand platform capabilities and financial offerings (e.g., materials financing program) - International growth: Expanding global presence with new offices in Singapore, Paris, Dublin, and Dubai in 2022, supporting multiple languages and currencies. International investments are expected to impact near-term operating results but contribute to long-term growth - COVID-19 impact: The pandemic highlighted the need for digitization in construction, but its full impact on business, operations, and financial condition remains uncertain, potentially affecting demand, sales cycles, and costs Customer Growth | Metric | September 30, 2022 | September 30, 2021 | YoY Growth | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Total customers (excluding Levelset & Esticom) | 14,086 | 11,605 | 21% | | Net new customers (Q3 2022) | 683 | N/A | N/A | | Levelset customers (as of Sep 30, 2022) | >3,000 | N/A | N/A | - The materials financing program, assumed from Levelset, facilitates material purchases for customers on deferred payment terms, charging origination fees and weekly finance charges. The company uses internal capital for this program, potentially up to **10% of its current cash position**, and plans to partner with a capital provider to scale it[116](index=116&type=chunk) [Components of Results of Operations](index=26&type=section&id=Components%20of%20Results%20of%20Operations) This section defines the key components of the company's results of operations, including revenue, cost of revenue, and operating expenses - Revenue: Primarily from non-cancelable subscriptions recognized ratably over annual or multi-year terms. Deferred revenue is recorded for advance invoicing - Cost of Revenue: Includes customer support personnel, hosting, software license fees, amortization of acquired technology, and capitalized software development costs. Expected to increase with revenue and acquisitions - Operating Expenses: Comprise sales and marketing, research and development, and general and administrative expenses. Personnel-related costs are the most significant component. Expected to increase due to growth investments and post-IPO stock-based compensation - Interest Income: Primarily from money market funds, cash savings, and marketable securities - Interest Expense: Associated with finance leases and the former Credit Facility - Other Expense, Net: Mainly foreign currency transaction losses and miscellaneous items - Provision for Income Taxes: Primarily U.S. state franchise taxes and foreign jurisdiction taxes. A full valuation allowance is maintained on U.S. federal, state, and certain foreign net deferred tax assets - Post-IPO, the company has incurred **higher cost of revenue and operating expenses** due to stock-based compensation from RSU vesting and increased employer payroll taxes on employee stock transactions[128](index=128&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) - Significant amortization of acquired developed technology intangible assets from Levelset and LaborChart acquisitions in Q4 2021 is contributing to **increased cost of revenue**[128](index=128&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's consolidated financial performance for the reported periods Consolidated Statements of Operations Data (in thousands, as a percentage of revenue) | Item | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue | $186,429 (100%) | $131,990 (100%) | $518,150 (100%) | $368,718 (100%) | | Cost of revenue | $37,779 (20%) | $22,693 (17%) | $107,846 (21%) | $68,545 (19%) | | Gross profit | $148,650 (80%) | $109,297 (83%) | $410,304 (79%) | $300,173 (81%) | | Sales and marketing | $109,608 (59%) | $70,356 (53%) | $306,806 (59%) | $224,226 (61%) | | Research and development | $71,493 (38%) | $53,447 (40%) | $195,569 (38%) | $176,619 (48%) | | General and administrative | $39,362 (21%) | $35,051 (27%) | $123,181 (24%) | $110,805 (30%) | | Total operating expenses | $220,463 (118%) | $158,854 (120%) | $625,556 (121%) | $511,650 (139%) | | Loss from operations | $(71,813) (39%) | $(49,557) (38%) | $(215,252) (42%) | $(211,477) (57%) | | Net loss | $(71,205) (38%) | $(50,742) (38%) | $(215,747) (42%) | $(214,193) (58%) | [Comparison of the Three Months Ended September 30, 2022 and 2021](index=30&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20September%2030%2C%202022%20and%202021) This section compares the company's financial results for the three months ended September 30, 2022, against the same period in 2021 Revenue (Three Months Ended Sep 30, in thousands) | Item | 2022 | 2021 | Change (Dollar) | Change (Percent) | | :----- | :--- | :--- | :-------------- | :--------------- | | Revenue | $186,429 | $131,990 | $54,439 | 41% | - Revenue growth was driven by expansion within existing customers and new customer additions, with Levelset contributing **$8.5 million** in Q3 2022[145](index=145&type=chunk) Cost of Revenue, Gross Profit, and Gross Margin (Three Months Ended Sep 30, in thousands) | Item | 2022 | 2021 | Change (Dollar) | Change (Percent) | | :-------------- | :--- | :--- | :-------------- | :--------------- | | Cost of revenue | $37,779 | $22,693 | $15,086 | 66% | | Gross profit | $148,650 | $109,297 | $39,353 | 36% | | Gross margin | 80% | 83% | -3% | - | - Cost of revenue increased due to **$6.3 million** in personnel-related expenses (including **$5.1 million** in salaries and **$1.2 million** in stock-based compensation), **$4.5 million** in amortization of acquired technology, and **$2.3 million** in cloud hosting costs. Headcount in cost of revenue increased by **49% YoY**[146](index=146&type=chunk) Operating Expenses (Three Months Ended Sep 30, in thousands) | Item | 2022 | 2021 | Change (Dollar) | Change (Percent) | | :------------------------ | :--- | :--- | :-------------- | :--------------- | | Sales and marketing | $109,608 | $70,356 | $39,252 | 56% | | Research and development | $71,493 | $53,447 | $18,046 | 34% | | General and administrative | $39,362 | $35,051 | $4,311 | 12% | - Sales and marketing expenses rose by **$31.1 million** in personnel-related costs (including **$20.4 million** in salaries, **$6.2 million** in commissions, **$4.3 million** in stock-based compensation), **$2.7 million** in amortization of customer relationships, **$2.0 million** in marketing events, and **$1.4 million** in travel. Sales and marketing headcount increased by **51% YoY**[147](index=147&type=chunk) - R&D expenses increased by **$15.5 million** in personnel-related costs (including **$12.5 million** in salaries and **$2.7 million** in stock-based compensation), **$1.5 million** in software expenses, and **$0.8 million** in professional fees. R&D headcount increased by **35% YoY**[149](index=149&type=chunk) - G&A expenses increased by **$4.5 million** in personnel-related costs (including **$6.0 million** in salaries, partially offset by **$1.6 million decrease** in stock-based compensation). G&A headcount increased by **40% YoY**[150](index=150&type=chunk) - Interest income increased significantly due to higher interest from money market funds, cash savings, and marketable securities[151](index=151&type=chunk) [Comparison of the Nine Months Ended September 30, 2022 and 2021](index=32&type=section&id=Comparison%20of%20the%20Nine%20Months%20Ended%20September%2030%2C%202022%20and%202021) This section compares the company's financial results for the nine months ended September 30, 2022, against the same period in 2021 Revenue (Nine Months Ended Sep 30, in thousands) | Item | 2022 | 2021 | Change (Dollar) | Change (Percent) | | :----- | :--- | :--- | :-------------- | :--------------- | | Revenue | $518,150 | $368,718 | $149,432 | 41% | - Revenue growth was primarily from existing customer expansion and new customer additions, with Levelset contributing **$22.7 million** in the first nine months of 2022[152](index=152&type=chunk) Cost of Revenue, Gross Profit, and Gross Margin (Nine Months Ended Sep 30, in thousands) | Item | 2022 | 2021 | Change (Dollar) | Change (Percent) | | :-------------- | :--- | :--- | :-------------- | :--------------- | | Cost of revenue | $107,846 | $68,545 | $39,301 | 57% | | Gross profit | $410,304 | $300,173 | $110,131 | 37% | | Gross margin | 79% | 81% | -2% | - | - Cost of revenue increased due to **$13.7 million** in amortization of acquired technology, **$12.4 million** in personnel-related expenses (including **$14.0 million** in salaries, offset by **$1.4 million decrease** in stock-based compensation), and **$7.7 million** in cloud hosting costs. Headcount in cost of revenue increased by **49% YoY**[153](index=153&type=chunk) Operating Expenses (Nine Months Ended Sep 30, in thousands) | Item | 2022 | 2021 | Change (Dollar) | Change (Percent) | | :------------------------ | :--- | :--- | :-------------- | :--------------- | | Sales and marketing | $306,806 | $224,226 | $82,580 | 37% | | Research and development | $195,569 | $176,619 | $18,950 | 11% | | General and administrative | $123,181 | $110,805 | $12,376 | 11% | - Sales and marketing expenses rose by **$50.1 million** in personnel-related costs (including **$53.7 million** in salaries, **$15.5 million** in commissions, offset by **$18.9 million decrease** in stock-based compensation), **$8.0 million** in amortization of customer relationships, **$6.9 million** in marketing events, **$6.4 million** in travel, and **$2.1 million** in professional fees. Sales and marketing headcount increased by **51% YoY**[154](index=154&type=chunk) - R&D expenses increased by **$8.9 million** in personnel-related costs (including **$34.6 million** in salaries, offset by **$25.7 million decrease** in stock-based compensation), **$3.1 million** in professional fees, and **$3.1 million** in computer software expenses. R&D headcount increased by **35% YoY**[155](index=155&type=chunk) - G&A expenses increased due to **$3.9 million** in professional fees, **$2.6 million** in computer software, **$1.7 million** in travel, and **$1.2 million** in insurance. Personnel-related expenses had a net decrease of **$1.1 million** (including **$22.7 million increase** in salaries, offset by **$24.0 million decrease** in stock-based compensation). G&A headcount increased by **40% YoY**[156](index=156&type=chunk) - Interest income increased significantly due to higher interest from money market funds and marketable securities[157](index=157&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles GAAP financial measures to non-GAAP measures, excluding certain non-cash and acquisition-related expenses - The company uses non-GAAP measures (Gross Profit, Gross Margin, Operating Expenses, Loss from Operations, Operating Margin) to evaluate operating performance, excluding stock-based compensation, amortization of acquired intangibles, employer payroll tax on employee stock transactions, and acquisition-related expenses[159](index=159&type=chunk)[161](index=161&type=chunk) Reconciliation of GAAP to Non-GAAP Gross Profit and Margin (in thousands) | Item | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | GAAP Gross profit | $148,650 | $109,297 | $410,304 | $300,173 | | Stock-based compensation expense | $1,835 | $679 | $5,339 | $6,758 | | Amortization of acquired technology intangible assets | $5,627 | $1,086 | $16,935 | $3,258 | | Employer payroll tax on employee stock transactions | $99 | $66 | $248 | $400 | | Non-GAAP gross profit | $156,211 | $111,128 | $432,826 | $310,589 | | GAAP Gross margin | 80% | 83% | 79% | 81% | | Non-GAAP gross margin | 84% | 84% | 84% | 84% | Reconciliation of GAAP to Non-GAAP Operating Expenses (in thousands) | Item | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | GAAP sales and marketing | $109,608 | $70,356 | $306,806 | $224,226 | | Non-GAAP sales and marketing | $89,682 | $58,301 | $256,460 | $163,652 | | GAAP research and development | $71,493 | $53,447 | $195,569 | $176,619 | | Non-GAAP research and development | $50,541 | $36,839 | $142,927 | $102,572 | | GAAP general and administrative | $39,362 | $35,051 | $123,181 | $110,805 | | Non-GAAP general and administrative | $29,354 | $21,147 | $91,747 | $54,747 | Reconciliation of GAAP to Non-GAAP Loss from Operations and Margin (in thousands) | Item | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | GAAP Loss from operations | $(71,813) | $(49,557) | $(215,252) | $(211,477) | | Non-GAAP loss from operations | $(13,366) | $(5,159) | $(58,308) | $(10,382) | | GAAP Operating margin | (39%) | (38%) | (42%) | (57%) | | Non-GAAP operating margin | (7%) | (4%) | (11%) | (3%) | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's liquidity position, capital resources, and cash flow activities - As of September 30, 2022, principal liquidity sources were cash, cash equivalents, and marketable securities totaling **$558.1 million**[166](index=166&type=chunk) - The company terminated its Credit Facility on **April 29, 2022**. Outstanding letters of credit (**$6.5 million**) remain unsecured[166](index=166&type=chunk) - The materials financing program had **$13.6 million** in customer receivables as of September 30, 2022. This program is expected to grow and may impact liquidity[167](index=167&type=chunk) - Management believes existing liquidity is sufficient for at least the **next 12 months**, but future capital requirements depend on growth rate, acquisitions, strategic investments, and market conditions[168](index=168&type=chunk)[169](index=169&type=chunk) Cash Flows (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity | 2022 | 2021 | | :------------------------------------ | :----- | :----- | | Net cash (used in) provided by operating activities | $(10,084) | $40,305 | | Net cash used in investing activities | $(338,646) | $(42,020) | | Net cash provided by financing activities | $29,258 | $694,946 | - Operating activities used **$10.1 million** cash in 2022 (vs. **$40.3 million** provided in 2021), driven by net loss offset by non-cash charges and changes in operating assets/liabilities[173](index=173&type=chunk) - Investing activities used **$338.7 million** cash in 2022 (vs. **$42.0 million** in 2021), primarily due to **$293.1 million** in marketable securities purchases and **$24.8 million** in capitalized software development costs[174](index=174&type=chunk) - Financing activities provided **$29.3 million** cash in 2022 (vs. **$694.9 million** in 2021), mainly from stock option exercises and ESPP proceeds, significantly lower than 2021 due to IPO proceeds[176](index=176&type=chunk)[177](index=177&type=chunk) - Remaining performance obligations totaled **$714.9 million** as of September 30, 2022, with **70%** expected to be recognized as revenue in the next 12 months[182](index=182&type=chunk) [Critical Accounting Policies and Estimates](index=38&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section identifies critical accounting policies and estimates requiring significant management judgment in financial reporting - Critical accounting policies and estimates involve significant judgment and are crucial for financial reporting, including revenue recognition, contract cost assets, business combination valuations, stock-based compensation, goodwill recoverability, software development costs, and income taxes[33](index=33&type=chunk)[184](index=184&type=chunk) - There have been **no significant changes** to these policies for the nine months ended September 30, 2022, compared to those disclosed in the 2021 Annual Report on Form 10-K[185](index=185&type=chunk) [JOBS Act Accounting Election and Emerging Growth Company Status](index=38&type=section&id=JOBS%20Act%20Accounting%20Election%20and%20Emerging%20Growth%20Company%20Status) This section discusses the company's status as an emerging growth company under the JOBS Act and its accounting election - The company is an 'emerging growth company' under the JOBS Act but has **irrevocably elected not to use** the extended transition period for complying with new or revised financial accounting standards[187](index=187&type=chunk) - The company will cease to be an emerging growth company as of **December 31, 2022**, based on the market value of its common stock held by non-affiliates as of June 30, 2022[188](index=188&type=chunk) [Recent Accounting Pronouncements](index=38&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for details on recently issued accounting pronouncements - Refer to Note 2, 'Summary of Significant Accounting Policies,' for a description of recently issued accounting pronouncements[190](index=190&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, including foreign currency, interest rate, and inflation, and their potential financial impact - Foreign Currency and Exchange Risk: The majority of revenue is in U.S. dollars, while expenses are in various foreign currencies. A hypothetical **10% change** in exchange rates would **not materially impact** financial statements. The company does not currently hedge foreign currency exposure - Interest Rate Risk: Cash, cash equivalents, restricted cash, and marketable securities totaled **$561.2 million** as of September 30, 2022. Due to the short-term nature of investments, a hypothetical **100 bps change** in interest rates would **not materially impact** the fair market value of the portfolio - Inflation Risk: Inflation could positively impact pricing (due to increased construction costs affecting construction volume) but negatively impact project starts and personnel costs. Inflation has **not had a material effect** on the business to date, but significant future pressures could be adverse - The company's exposure to foreign currency exchange rates is **not material**, and it does not currently use derivative or hedging transactions[191](index=191&type=chunk) - The company's investment activities prioritize **principal preservation and liquidity**, with a diversified portfolio of investment-grade securities[192](index=192&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) This section evaluates the effectiveness of the company's disclosure controls and internal control over financial reporting, noting ongoing integration efforts - Management, including the CEO and CFO, concluded that disclosure controls and procedures were **effective** as of September 30, 2022, providing **reasonable assurance** for timely and accurate reporting[195](index=195&type=chunk)[197](index=197&type=chunk) - The company is integrating policies, processes, people, technology, and operations related to the Levelset acquisition and will continue to evaluate the impact on internal control over financial reporting[198](index=198&type=chunk) - **No material changes** in internal control over financial reporting occurred during the most recently completed fiscal quarter[198](index=198&type=chunk) - Management acknowledges that control systems provide only **reasonable, not absolute, assurance** and can be circumvented[199](index=199&type=chunk) [Part II. Other Information](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section contains additional information not covered in the financial statements, including legal proceedings and risk factors [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms the absence of material pending legal proceedings, noting that claims may arise in the ordinary course of business - The company is **not a party to any material pending legal proceedings**[201](index=201&type=chunk) - Legal proceedings and claims may arise in the ordinary course of business[201](index=201&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section comprehensively discusses significant risks and uncertainties that could materially affect the company's business, financial condition, and common stock ownership [Risks Related to Our Business and Industry](index=41&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) This section details risks inherent to the company's business operations and the broader industry environment - Rapid growth may not be sustainable, and failure to manage it could adversely affect the business - History of losses and uncertainty of future profitability - Business is highly sensitive to economic changes and reductions in construction industry spending - The construction management software industry is evolving, and market development may be slower than expected - New products and features may not be widely accepted, and the company may struggle to adapt to technological changes - International expansion exposes the company to increased business, regulatory, and economic risks, including compliance with diverse laws and geopolitical conflicts - Dependence on a strong brand; failure to maintain and enhance it could impair customer acquisition and retention - Ability to grow customer base relies on expanding sales and marketing capabilities, which are costly and may not yield proportional revenue increases - Operating in a highly competitive market, facing established competitors with greater resources and potential new entrants - Results of operations may fluctuate significantly due to various factors, making future results difficult to predict - Reliance on key management and ability to attract/retain qualified personnel is critical for strategic objectives - Subject to stringent and evolving data privacy and security obligations globally; non-compliance could lead to investigations, fines, litigation, and reputational harm - Information technology systems or data, or those of third parties, being compromised could result in adverse consequences, including security incidents, data loss, and operational disruptions - Failure to offer high-quality customer support could harm customer relationships and business reputation - Inability to maintain effective disclosure controls and internal control over financial reporting, especially with acquired companies, could impair financial statements and compliance - The COVID-19 pandemic has had and could continue to have an adverse impact on business, operations, and markets - Reliance on third-party technology licenses; inability to maintain them could adversely affect product development and sales - Failure to protect intellectual property rights and proprietary information could diminish brand and intangible assets - Potential involvement in costly and time-consuming litigation, including intellectual property claims - Challenges in maintaining company culture during growth, especially with a hybrid workforce - Risks associated with making, integrating, and maintaining acquisitions, joint ventures, and strategic investments - Materials financing program introduces new credit, performance, and liquidity risks, as well as additional regulatory and compliance requirements - Reliance on third-party data centers (e.g., AWS); disruptions could negatively affect platform performance and reliability - Dependence on interoperability of platform across devices, operating systems, and third-party applications - Interruptions or performance issues with products and platform could harm business and reputation - Failures in internet infrastructure or Wi-Fi access could lead to perceptions of unreliability - Increased government scrutiny of the technology industry could negatively affect business, including potential changes to Section 230 of the Communications Decency Act - Subject to governmental export and import controls, FCPA, and other anti-corruption laws; non-compliance could lead to penalties and reputational harm - Use of third-party open source software could lead to litigation or require public release of proprietary code - Customer misuse of the platform (e.g., spam, scams) could damage reputation and lead to liability - Revenue recognition over subscription terms means downturns/upturns are not immediately reflected in results - Business is subject to risks from natural catastrophic events - Excessive fraudulent activity or failure to meet credit card merchant standards could incur substantial costs and loss of payment acceptance - Currency exchange rate fluctuations could adversely affect results of operations - Marketable securities portfolio is subject to credit, liquidity, market, and interest risks - Tax authorities may assert additional sales and use, value-added, or similar taxes, leading to substantial liabilities - Corporate structure and intercompany arrangements subject to complex tax laws; potential for additional taxes - Future changes to tax laws could adversely affect the business - Ability to use net operating loss carryforwards and other tax attributes may be limited by ownership changes or legislative restrictions [Risks Related to Ownership of Our Common Stock](index=66&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) This section outlines risks specifically related to the ownership and trading of the company's common stock - Market price of common stock may be volatile, leading to potential loss of investment - Lack of sustained active trading market could impair liquidity and ability to raise capital - Risk of securities class action litigation due to stock price volatility - Market price and trading volume could decline if analysts do not publish research or publish unfavorable research - Concentration of ownership among executive officers, directors, and principal stockholders may limit influence of new investors - Issuance of additional capital stock will dilute other stockholders - No intention to pay dividends for the foreseeable future; return on investment depends on stock price appreciation - As an 'emerging growth company,' reduced reporting requirements may make common stock less attractive to investors - Increased costs and management time required for public company compliance and corporate governance - Failure to maintain proper and effective internal controls over financial reporting could adversely affect investor confidence - Certain provisions in charter documents and Delaware law could make company acquisition more difficult or limit stockholder influence [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the use of proceeds from the company's Initial Public Offering, confirming no material change in the planned allocation - The company completed its IPO on **May 24, 2021**, selling **10,410,000 shares of common stock** at **$67.00 per share**, generating **$665.1 million** in net proceeds[344](index=344&type=chunk)[165](index=165&type=chunk) - There has been **no material change** in the planned use of proceeds from the IPO as described in the Final Prospectus[345](index=345&type=chunk) [Item 6. Exhibits](index=72&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents and certifications - The exhibit index includes the Amended and Restated Certificate of Incorporation and Bylaws, an offer letter, Section 302 and 906 certifications, and Inline XBRL documents[348](index=348&type=chunk) - Section 906 certifications are furnished pursuant to 18 U.S.C. Section 1350 and are **not deemed 'filed'** for purposes of Section 18 of the Exchange Act[348](index=348&type=chunk) [Signatures](index=73&type=section&id=SIGNATURES) This section contains the official signatures of the company's authorized executive officers for the report [Report Signatures](index=73&type=section&id=Report%20Signatures) This section provides the signatures of the President and CEO, and the CFO and Treasurer, certifying the report's filing on November 4, 2022 - The report is signed by Craig F. Courtemanche, Jr., President and Chief Executive Officer (Principal Executive Officer), and Paul Lyandres, Chief Financial Officer and Treasurer (Principal Financial Officer)[352](index=352&type=chunk) - The report was signed on **November 4, 2022**[352](index=352&type=chunk)