PROCORE(US:PCOR)2025-11-05 23:00Financial Data and Key Metrics Changes - Revenue growth was 14.5% year over year, consistent with the previous quarter's growth, reflecting strong underlying business momentum [5][23] - Non-GAAP operating margins increased to 17%, showing a commitment to improving efficiency [5][23] - Current RPO grew 23% year over year, and current deferred revenue grew 14% year over year [23][24] - Q3 non-GAAP operating income was $59 million, representing a non-GAAP operating margin of 17% [23] Business Line Data and Key Metrics Changes - The number of six and seven-figure deals accelerated to 31% year over year growth, with over 2,600 customers generating $100,000+ ARR [5] - Strong performance was noted in the owner and specialty contractor segments, with notable growth from the mid-market team [24] Market Data and Key Metrics Changes - U.S. non-residential and multifamily construction has seen a decline from 25% growth in Q1 2023 to negative 2% growth in recent quarters, representing a 27-point reduction in growth over two years [9][10] - Despite market headwinds, Procore has continued to grow faster than the end market by approximately 10-20 percentage points [10] Company Strategy and Development Direction - Procore is positioned as a clear category leader in a $15 trillion construction market, which remains largely undigitized, presenting significant growth opportunities [9] - The company is focused on leveraging AI and proprietary construction data to enhance its platform and drive productivity in the construction industry [11][51] - A new CEO, Ajay Gopal, is set to take over, bringing extensive experience in leading global technology companies [6][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, anticipating that current headwinds will eventually turn into tailwinds [10][32] - The company is committed to improving its margin profile, having achieved 1,900 basis points of non-GAAP operating margin improvement since the start of 2023 [13] - Management expects Q4 revenue to be between $339 million and $341 million, representing year-over-year growth of 12%-13% [27] Other Important Information - Procore surpassed $1 trillion in annual construction volume contracted to its platform, demonstrating its ability to execute and gain market share [10][39] - A new stock repurchase program for $300 million has been implemented to optimize long-term shareholder value [26] Q&A Session Summary Question: Is the signal of a turning point in end market demand still reasonable to think about? - Management believes that as owners become more excited about building projects, it will positively impact Procore's business, although it may take time for projects to be greenlit [32] Question: Can you elaborate on net new ARR growth being faster than revenue growth? - Management reiterated that net new ARR growth is a strong indicator of future revenue growth acceleration, with confidence in continued performance [34] Question: How do you view the data center opportunity? - While data centers are a small portion of the overall construction economy, Procore has performed well in this sector and sees it as a strength [36] Question: What are the trends in CRPO and renewals? - Renewals have been healthy, and the underlying business is stable to positive, with longer contract durations reflecting customer commitment [38] Question: How is the competitive landscape perceived by customers? - Customers expressed excitement about Procore's achievements and innovations, with no significant mention of competitors during discussions [64]