PROCORE(US:PCOR)2025-11-05 23:02Financial 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 [6][25] - Non-GAAP operating margins increased to 17%, showing a commitment to improving efficiency [6][25] - Total revenue in Q3 was $339 million, with international revenue growing 14% year-over-year, impacted by currency headwinds [25] - Current RPO grew 23% year-over-year, and current deferred revenue grew 14% year-over-year [25][26] 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 [6] - Net new ARR growth was notably faster than revenue growth, indicating strong performance across various segments [26][39] Market Data and Key Metrics Changes - The U.S. non-residential and multifamily construction sectors experienced negative growth of 2% for the last two quarters, while Procore continued to grow faster than this end market by approximately 10-20 percentage points [11][26] - Procore surpassed $1 trillion in annual construction volume contracted to its platform, demonstrating its ability to capture market share even in challenging cycles [11][25] Company Strategy and Development Direction - Procore is positioned as the clear category leader in a market projected to reach $15 trillion in construction spend by 2030, with significant opportunities for long-term growth [10][21] - The company is focused on leveraging its unified construction platform to harness AI and improve customer success [12][14] - A new CEO, Ajay Gopal, will take over on November 10th, with a strong operational track record and relevant industry experience [8][9] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing macroeconomic headwinds but remains optimistic about future growth as the construction cycle is expected to turn upward [10][11] - The company is committed to improving its margin profile, having achieved significant non-GAAP operating margin improvement since the start of 2023 [14][30] - Management expressed confidence in the strength of the platform and the positive feedback from customers regarding new technical resources [15][62] Other Important Information - Procore has implemented a new stock repurchase program for an additional $300 million, maintaining flexibility in capital allocation [29] - The company is testing a new pricing model that offers bundled solutions, which has received positive feedback from customers [88][90] Q&A Session Summary Question: Insights on end market demand and owners - Management noted that macro headwinds remain consistent, but excitement from owners about building projects is crucial for Procore's growth [36][37] Question: Clarification on net new ARR growth - Management confirmed that net new ARR growth is outpacing revenue growth, indicating strong performance and confidence in future quarters [39][40] Question: Data center opportunity impact - Management acknowledged that while data centers are a small portion of the overall construction economy, Procore has performed well in this sector [46][47] Question: Trends in CRPO and renewals - Management reported healthy renewals and stable to positive underlying business health, contributing to CRPO performance [48][49] Question: Large-scale deal activity in Q4 - Management indicated that Q4 typically sees more large-scale activity, and the current pipeline looks healthy with a diverse set of stakeholders [96][97] Question: Future growth potential and margin expansion - Management expressed confidence in maintaining margin expansion while allowing the new CEO to explore growth opportunities [108][109]