PROCORE(US:PCOR)2024-02-26 21:05Customer 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]