Construction management software maker Procore (NYSE: PCOR) reported Q1 CY2025 results exceeding the market’s revenue expectations, with sales up 15.3% year on year to $310.6 million. On the other hand, next quarter’s revenue guidance of $311 million was less impressive, coming in 1.4% below analysts’ estimates. Its non-GAAP profit of $0.23 per share was 24.4% above analysts’ consensus estimates.
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Procore (PCOR) Q1 CY2025 Highlights:
- Revenue: $310.6 million vs analyst estimates of $302.7 million (15.3% year-on-year growth, 2.6% beat)
- Adjusted EPS: $0.23 vs analyst estimates of $0.18 (24.4% beat)
- Adjusted Operating Income: $32.4 million vs analyst estimates of $23.12 million (10.4% margin, 40.2% beat)
- The company slightly lifted its revenue guidance for the full year to $1.29 billion at the midpoint from $1.29 billion
- Operating Margin: -11.7%, down from -7% in the same quarter last year
- Free Cash Flow Margin: 15%, up from 0.1% in the previous quarter
- Customers: 17,306, up from 17,088 in the previous quarter
- Market Capitalization: $9.56 billion
Company Overview
Used to manage the multi-year expansion of the Panama Canal that began in 2007, Procore (NYSE: PCOR) offers a software-as-service project, finance, and quality management platform for the construction industry.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Procore’s sales grew at an impressive 28.6% compounded annual growth rate over the last three years. Its growth beat the average software company and shows its offerings resonate with customers, a helpful starting point for our analysis.
This quarter, Procore reported year-on-year revenue growth of 15.3%, and its $310.6 million of revenue exceeded Wall Street’s estimates by 2.6%. Company management is currently guiding for a 9.4% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 11.1% over the next 12 months, a deceleration versus the last three years. Still, this projection is above average for the sector and suggests the market is forecasting some success for its newer products and services.
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Customer Base
Procore reported 17,306 customers at the end of the quarter, a sequential increase of 218. That’s a little better than last quarter and quite a bit above the typical growth we’ve seen over the previous year. Shareholders should take this as an indication that Procore’s go-to-market strategy is working well.
Key Takeaways from Procore’s Q1 Results
We were impressed by Procore’s strong growth in customers this quarter. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, its revenue guidance for next quarter slightly missed. Zooming out, we think this was a decent quarter featuring some areas of strength but also some blemishes. The stock remained flat at $63 immediately after reporting.
So should you invest in Procore right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
