Procore (PCOR) Q2 Revenue Jumps 14%

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