PROCORE(PCOR) - 2025 Q2 - Quarterly Results

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