PROCORE(US:PCOR)2025-07-31 22:02Financial Data and Key Metrics Changes - Total revenue in Q2 was $324 million, representing a 14% year-over-year growth [22] - Non-GAAP operating income was $44 million, with a non-GAAP operating margin of 13% [22] - Current RPO grew 21% year-over-year, while current deferred revenue increased by 13% year-over-year [23] Business Line Data and Key Metrics Changes - Strong quarter for new logo ARR growth, particularly in general contractor, owner, and public sector segments [23] - The mix between volume expansion and product cross-sell improved to 70-30, with cross-sell increasing primarily from the Financials suite [24] Market Data and Key Metrics Changes - International revenue grew 13% year-over-year, impacted by currency headwinds, but on a constant currency basis, it grew 16% [22] - Significant new customer wins included major players in various sectors, indicating strong market demand [12][15] Company Strategy and Development Direction - The company is focused on a go-to-market transition aimed at efficient growth and deeper customer partnerships [6][20] - Innovations such as Procore Helix and AI-driven solutions are positioned to transform the construction industry [9][10] - The company aims to capture a larger market share in the under-digitized construction industry [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of construction, driven by technological advancements and customer demand for automation [11][12] - The company is on track for solid operating margin improvement and aims for higher margins in the coming years [26][27] - For Q3 2025, revenue is expected to be between $326 million and $328 million, representing year-over-year growth of 10% to 11% [28] Other Important Information - The company has achieved FedRAMP designation, enhancing its ability to serve federal market segments [19] - The management team remains committed to improving profitability while maintaining growth opportunities [27] Q&A Session Summary Question: Customer adoption of AI and platform unification - Management noted that customer demand for automation is high, and they are seeing unique challenges being addressed through the platform [32][36] Question: Go-to-market changes and productivity - The transition is progressing as planned, with improvements in conversion pipeline and deal cycles [40] Question: Rule of 40 expectations for next year - Management confirmed that improvements in the Rule of 40 will primarily come from profitability rather than revenue growth [62] Question: Data maturity and customer volume - Customers are increasingly recognizing the value of unified data on the platform, which may lead to higher volume through Procore [66] Question: Free cash flow generation - Management indicated that free cash flow margins are expected to align with operating margins for the full year [78] Question: Impact of tariffs on customer projects - Customers have built resilience into their business models, allowing them to adapt to tariff-related challenges [84] Question: Product packaging and bundling feedback - Early pilots for product bundling are ongoing, aimed at streamlining the sales process and meeting customer needs [125]