Construction management software provider Procore Technologies (NYSE: PCOR) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 14.5% year on year to $338.9 million. The company expects next quarter’s revenue to be around $340 million, close to analysts’ estimates. Its non-GAAP profit of $0.42 per share was 29.9% above analysts’ consensus estimates.
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Procore Technologies (PCOR) Q3 CY2025 Highlights:
- Revenue: $338.9 million vs analyst estimates of $328 million (14.5% year-on-year growth, 3.3% beat)
- Adjusted EPS: $0.42 vs analyst estimates of $0.32 (29.9% beat)
- Adjusted Operating Income: $58.65 million vs analyst estimates of $43.95 million (17.3% margin, 33.4% beat)
- Revenue Guidance for Q4 CY2025 is $340 million at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: -4.4%, up from -12.3% in the same quarter last year
- Free Cash Flow Margin: 20%, up from 3.3% in the previous quarter
- Customers: 17,623, up from 17,501 in the previous quarter
- Billings: $351.8 million at quarter end, up 16.7% year on year
- Market Capitalization: $10.62 billion
Company Overview
With a mission to build software for the people that build the world, Procore Technologies (NYSE: PCOR) provides cloud-based software that enables owners, contractors, and other stakeholders to collaborate and manage construction projects from any device.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Procore Technologies grew its sales at an impressive 27.7% compounded annual growth rate. Its growth beat the average software company and shows its offerings resonate with customers.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Procore Technologies’s annualized revenue growth of 19.6% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Procore Technologies reported year-on-year revenue growth of 14.5%, and its $338.9 million of revenue exceeded Wall Street’s estimates by 3.3%. Company management is currently guiding for a 12.6% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 11.3% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Procore Technologies’s billings came in at $351.8 million in Q3, and over the last four quarters, its growth slightly lagged the sector as it averaged 13.6% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in acquiring/retaining customers. 
Customer Base
Procore Technologies reported 17,623 customers at the end of the quarter, a sequential increase of 122. That’s worse than what we’ve observed previously, and we’ve no doubt shareholders would like to see the company accelerate its sales momentum.
Key Takeaways from Procore Technologies’s Q3 Results
We enjoyed seeing Procore Technologies beat analysts’ billings expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, its customer growth slowed. Overall, this print had some key positives. The stock traded up 4.7% to $74.88 immediately after reporting.
Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
