Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Procore Announces First Quarter 2024 Financial Results By: Procore Technologies Inc. via Business Wire May 01, 2024 at 16:05 PM EDT Procore Technologies, Inc. (NYSE: PCOR), the leading global provider of construction management software, today announced financial results for the first quarter ended March 31, 2024. “The highly complex and collaborative nature of our industry underscores the importance of our mission to connect everyone in construction on a global platform,” said Tooey Courtemanche, Founder and CEO of Procore. “Our trusted, innovative platform mirrors what the industry needs and will continue to deliver value to the industry in both the short and long term.” "I am proud of the strong margin performance we delivered in Q1,” said Howard Fu, CFO of Procore. “We remain focused on continuing to improve our operating leverage while executing on the long-term growth opportunity ahead of us.” First Quarter 2024 Financial Highlights: Revenue was $269 million, an increase of 26% year-over-year. GAAP gross margin was 83% and non-GAAP gross margin was 86%. GAAP operating margin was (7%) and non-GAAP operating margin was 14%. Operating cash inflow for the first quarter was $69 million. Free cash inflow for the first quarter was $58 million. A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” Recent Business Highlights: Achieved a gross revenue retention rate of 95% in the first quarter. Added 231 net new organic customers in the first quarter, ending with a total of 16,598 organic customers. Ranked #8 among G2’s Top 100 Best Global Software Companies of 2024. Second Quarter and Full Year 2024 Outlook: Procore is providing the following guidance for the second quarter and full year 2024: Second Quarter 2024 Outlook: Revenue is expected to be in the range of $274 million to $276 million, representing year-over-year growth of 20% to 21%. Non-GAAP operating margin is expected to be in the range of 11% to 12%. Full Year 2024 Outlook: Revenue is expected to be in the range of $1,140 million to $1,144 million, representing year-over-year growth of 20%. Non-GAAP operating margin is expected to be in the range of 9% to 10%. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future and cannot be reasonably determined or predicted at this time, although it is important to note that these factors could be material to Procore’s future GAAP financial results. Quarterly Conference Call Procore Technologies, Inc. will hold a conference call to discuss its first quarter results at 2:00 p.m., Pacific Time, on Wednesday, May 1, 2024. A live audio webcast will be accessible on Procore's investor relations website at http://investors.procore.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, about Procore and its industry that involve substantial risks and uncertainties. All statements in this press release, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or future financial or operating performance, and may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these words, or other similar terms or expressions that concern Procore’s expectations, strategy, plans, or intentions. Procore has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends that Procore believes may affect its business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors that could cause results to differ materially from Procore’s current expectations, including, but not limited to, our expectations regarding our financial performance (including revenues, expenses, and margins, and our ability to achieve or maintain future profitability), our ability to effectively manage our growth, anticipated performance, trends, growth rates, and challenges in our business and in the market in which we operate or anticipate entering into, economic and industry trends (in particular, the rate of adoption of construction management software and digitization of the construction industry, inflation, and challenging geopolitical conditions), our ability to attract new customers and retain and increase sales to existing customers, our ability to expand internationally, the effects of increased competition in our markets and our ability to compete effectively, our estimated total addressable market, and as set forth in Procore’s filings with the Securities and Exchange Commission. You should not place undue reliance on Procore’s forward-looking statements. Procore assumes no obligation to update any forward-looking statements to reflect events or circumstances that exist or change after the date on which they were made, except as required by law. Non-GAAP Financial Measures Procore believes that the use of certain non-GAAP financial measures as described below, when taken collectively, is helpful to investors because it provides consistency and comparability with past financial performance, and may assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. These non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles, or GAAP. Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Income (Loss) from Operations, Non-GAAP Operating Margin, Non-GAAP Net Income, and Non-GAAP Net Income per Share: Procore defines these non-GAAP financial measures as the respective GAAP measures, excluding stock-based compensation expense, amortization of acquired intangible assets, employer payroll tax related to employee stock transactions, and acquisition-related expenses. Non-GAAP gross margin is the ratio calculated by dividing non-GAAP gross profit by total revenue. Non-GAAP operating margin is the ratio calculated by dividing non-GAAP income (loss) from operations by total revenue. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Non-GAAP diluted earnings per share is computed by giving effect to all potential weighted average dilutive common stock equivalents outstanding for the period, including options to purchase common stock, restricted stock units, and shares to be issued pursuant to the employee stock purchase plan. The dilutive effect of outstanding awards is reflected in non-GAAP diluted earnings per share by application of the treasury stock method. Stock-based compensation expense includes the net effects of capitalization and amortization of stock-based compensation expense related to capitalized software and cloud-computing arrangement implementation costs. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of the compensation provided to our employees. Because of varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company’s non-cash expenses, we believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for meaningful comparisons between its operating results from period to period. The expense related to amortization of acquired intangible assets is dependent upon estimates and assumptions, which can vary significantly and are unique to each asset acquired; therefore, Procore believes non-GAAP measures that adjust for the amortization of acquired intangible assets provide investors a consistent basis for comparison across accounting periods. The amount of employer payroll tax-related items on employee stock transactions is dependent on restricted stock unit settlements, option exercises, related stock price, and other factors that are beyond Procore’s control and that do not correlate to the operation of the business. When evaluating the performance of its business and making operating plans, Procore does not consider these items (for example, when considering the impact of equity award grants, the company places a greater emphasis on overall stockholder dilution than the accounting charges associated with such grants). Additionally, acquisition-related expenses, such as transaction costs and retention payments, are expenses that are not necessarily reflective of operational performance during a period. Procore believes that the exclusion of acquisition-related expenses provides for a useful comparison of our operating results to prior periods and to its peer companies, which commonly exclude these expenses. Overall, Procore believes it is useful to exclude these expenses in order to better understand the long-term performance of its core business and to facilitate comparison of its results period-over-period and to those of peer companies. All of these non-GAAP financial measures are important tools for financial and operational decision-making and for evaluating Procore's own operating results over different periods of time. Non-GAAP financial measures may not provide information that is directly comparable to information provided by other companies in Procore's industry, as other companies in the industry may calculate non-GAAP financial measures differently. In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies, and exclude expenses that may have a material impact on Procore's reported financial results. Further, stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in Procore's business and an important part of the compensation provided to its employees. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Investors should review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate Procore's business. Free Cash Flow: Procore defines free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized software development costs. Procore believes free cash flow is an important liquidity measure of the cash (if any) that is available, after our operating activities and capital expenditures. Procore uses free cash flow in conjunction with traditional GAAP measures to assess its liquidity and evaluate the effectiveness of its business strategies. Once Procore’s business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. Other Metrics Customer Count: The aforementioned customer count excludes customers acquired from Levelset and Esticom that have not yet been renewed onto standard Procore annual contracts. Remaining Levelset and Esticom legacy customers will be included in our customer metrics once they are renewed onto standard Procore annual contracts or upon integration of the sales process. About Procore Procore Technologies, Inc. (NYSE: PCOR) creates software for people who build the world. With a focus on providing timely and accurate data for all, Procore transforms the construction industry one project at a time - from hospitals and skyscrapers to airports and stadiums. Beyond its connected, innovative technology, Procore empowers the industry and its communities through Procore.org. For more information, visit www.procore.com. PROCORE-IR Category: Earnings Procore Technologies, Inc. Condensed Consolidated Statements of Operations (unaudited) Three Months Ended March 31, 2024 2023 (in thousands, except share and per share amounts) Revenue $ 269,428 $ 213,526 Cost of revenue(1)(2)(3) 45,723 40,202 Gross profit 223,705 173,324 Operating expenses Sales and marketing(1)(2)(3)(4) 120,994 117,363 Research and development(1)(2)(3)(4) 70,599 80,036 General and administrative(1)(3) 51,018 45,188 Total operating expenses 242,611 242,587 Loss from operations (18,906 ) (69,263 ) Interest income 5,938 4,948 Interest expense (479 ) (496 ) Accretion income, net 3,088 1,632 Other expense, net (344 ) (210 ) Loss before provision for income taxes (10,703 ) (63,389 ) Provision for income taxes 263 58 Net loss $ (10,966 ) $ (63,447 ) Net loss per share attributable to common stockholders, basic and diluted $ (0.08 ) $ (0.45 ) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 145,476,006 139,646,465 (1) Includes stock-based compensation expense and amortization of capitalized stock-based compensation as follows: Three Months Ended March 31, 2024 2023 (in thousands) Cost of revenue $ 3,185 $ 2,496 Sales and marketing 13,020 13,104 Research and development 13,735 19,781 General and administrative 11,729 10,475 Total stock-based compensation expense* $ 41,669 $ 45,856 *Includes amortization of capitalized stock-based compensation of $1.5 million and $0.9 million, respectively, for the three months ended March 31, 2024 and 2023 which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs. (2) Includes amortization of acquired intangible assets as follows: Three Months Ended March 31, 2024 2023 (in thousands) Cost of revenue $ 5,885 $ 5,493 Sales and marketing 3,106 3,107 Research and development 675 734 Total amortization of acquired intangible assets $ 9,666 $ 9,334 (3) Includes employer payroll tax on employee stock transactions as follows: Three Months Ended March 31, 2024 2023 (in thousands) Cost of revenue $ 212 $ 167 Sales and marketing 1,264 999 Research and development 1,668 1,356 General and administrative 1,045 632 Total employer payroll tax on employee stock transactions $ 4,189 $ 3,154 (4) Includes acquisition-related expenses as follows: Three Months Ended March 31, 2024 2023 (in thousands) Sales and marketing $ 448 $ 906 Research and development — 5,984 Total acquisition-related expenses $ 448 $ 6,890 Procore Technologies, Inc. Condensed Consolidated Balance Sheets (unaudited) March 31, 2024 December 31, 2023 (in thousands) Assets Current assets Cash and cash equivalents $ 427,656 $ 357,790 Marketable securities 316,963 320,161 Accounts receivable, net 138,996 206,644 Contract cost asset, current 29,618 28,718 Prepaid expenses and other current assets 41,707 42,421 Total current assets 954,940 955,734 Capitalized software development costs, net 88,409 83,045 Property and equipment, net 35,417 36,258 Right of use assets - finance leases 33,712 34,375 Right of use assets - operating leases 36,727 44,141 Contract cost asset, non-current 43,757 44,564 Intangible assets, net 127,747 137,546 Goodwill 539,131 539,354 Other assets 18,870 18,551 Total assets $ 1,878,710 $ 1,893,568 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 16,446 $ 13,177 Accrued expenses 67,008 100,075 Deferred revenue, current 487,944 501,903 Other current liabilities 23,585 27,275 Total current liabilities 594,983 642,430 Deferred revenue, non-current 7,403 7,692 Finance lease liabilities, non-current 43,076 43,581 Operating lease liabilities, non-current 33,691 37,923 Other liabilities, non-current 5,876 6,332 Total liabilities 685,029 737,958 Stockholders’ equity Common stock 15 15 Additional paid-in capital 2,345,537 2,295,807 Accumulated other comprehensive loss (2,068 ) (1,375 ) Accumulated deficit (1,149,803 ) (1,138,837 ) Total stockholders’ equity 1,193,681 1,155,610 Total liabilities and stockholders’ equity $ 1,878,710 $ 1,893,568 Remaining performance obligation: The following table presents our current and non-current RPO at the end of each period: March 31, Change 2024 2023 Dollar Percent (dollars in thousands) Remaining performance obligations Current $ 704,656 $ 586,158 $ 118,498 20 % Non-current 302,159 219,316 82,843 38 % Total remaining performance obligations $ 1,006,815 $ 805,474 $ 201,341 25 % Procore Technologies, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) Three Months Ended March 31, 2024 2023 (in thousands) Operating activities Net loss $ (10,966 ) $ (63,447 ) Adjustments to reconcile net loss to net cash provided by operating activities Stock-based compensation 40,132 44,938 Depreciation and amortization 20,051 16,874 Accretion of discounts on marketable debt securities, net (3,088 ) (1,632 ) Abandonment of long-lived assets 268 441 Noncash operating lease expense 2,734 2,628 Unrealized foreign currency loss, net 1,079 408 Deferred income taxes 1 2 Provision for credit losses 189 1,726 Increase in fair value of strategic investments (759 ) (36 ) Changes in operating assets and liabilities, net of effect of asset acquisition Accounts receivable 68,013 42,948 Deferred contract cost assets (427 ) (460 ) Prepaid expenses and other assets (684 ) 4,549 Accounts payable 3,155 4,648 Accrued expenses and other liabilities (34,154 ) (28,181 ) Deferred revenue (14,108 ) 6,489 Operating lease liabilities (2,291 ) (2,620 ) Net cash provided by operating activities 69,145 29,275 Investing activities Purchases of property and equipment (2,089 ) (2,173 ) Capitalized software development costs (9,514 ) (7,951 ) Purchases of strategic investments (210 ) (149 ) Purchases of marketable securities (101,434 ) (89,996 ) Maturities of marketable securities 107,301 103,909 Originations of materials financing — (9,077 ) Customer repayments of materials financing 1,281 5,358 Asset acquisition, net of cash acquired (5 ) — Net cash used in investing activities (4,670 ) (79 ) Financing activities Proceeds from stock option exercises 7,125 3,722 Principal payments under finance lease agreements, net of proceeds from lease incentives (449 ) (410 ) Net cash provided by financing activities 6,676 3,312 Net increase in cash, cash equivalents, and restricted cash 71,151 32,508 Effect of exchange rate changes on cash (1,285 ) (256 ) Cash, cash equivalents, and restricted cash, beginning of period 357,790 299,816 Cash, cash equivalents, and restricted cash, end of period $ 427,656 $ 332,068 Procore Technologies, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation of gross profit and gross margin to non-GAAP gross profit and non-GAAP gross margin: Three Months Ended March 31, 2024 2023 (dollars in thousands) Revenue $ 269,428 $ 213,526 Gross profit 223,705 173,324 Stock-based compensation expense 3,185 2,496 Amortization of acquired technology intangible assets 5,885 5,493 Employer payroll tax on employee stock transactions 212 167 Non-GAAP gross profit $ 232,987 $ 181,480 Gross margin 83 % 81 % Non-GAAP gross margin 86 % 85 % Reconciliation of operating expenses to non-GAAP operating expenses: Three Months Ended March 31, 2024 2023 (dollars in thousands) Revenue $ 269,428 $ 213,526 GAAP sales and marketing 120,994 117,363 Stock-based compensation expense (13,020 ) (13,104 ) Amortization of acquired intangible assets (3,106 ) (3,107 ) Employer payroll tax on employee stock transactions (1,264 ) (999 ) Acquisition-related expenses (448 ) (906 ) Non-GAAP sales and marketing $ 103,156 $ 99,247 GAAP sales and marketing as a percentage of revenue 45 % 55 % Non-GAAP sales and marketing as a percentage of revenue 38 % 46 % GAAP research and development $ 70,599 $ 80,036 Stock-based compensation expense (13,735 ) (19,781 ) Amortization of acquired intangible assets (675 ) (734 ) Employer payroll tax on employee stock transactions (1,668 ) (1,356 ) Acquisition-related expenses — (5,984 ) Non-GAAP research and development $ 54,521 $ 52,181 GAAP research and development as a percentage of revenue 26 % 37 % Non-GAAP research and development as a percentage of revenue 20 % 24 % GAAP general and administrative $ 51,018 $ 45,188 Stock-based compensation expense (11,729 ) (10,475 ) Employer payroll tax on employee stock transactions (1,045 ) (632 ) Non-GAAP general and administrative $ 38,244 $ 34,081 GAAP general and administrative as a percentage of revenue 19 % 21 % Non-GAAP general and administrative as a percentage of revenue 14 % 16 % Reconciliation of loss from operations and operating margin to non-GAAP income (loss) from operations and non-GAAP operating margin: Three Months Ended March 31, 2024 2023 (dollars in thousands) Revenue $ 269,428 $ 213,526 Loss from operations (18,906 ) (69,263 ) Stock-based compensation expense 41,669 45,856 Amortization of acquired intangible assets 9,666 9,334 Employer payroll tax on employee stock transactions 4,189 3,154 Acquisition-related expenses 448 6,890 Non-GAAP income (loss) from operations $ 37,066 $ (4,029 ) Operating margin (7 %) (32 %) Non-GAAP operating margin 14 % (2 %) Reconciliation of net loss and net loss per share to non-GAAP net income and non-GAAP net income per share: Three Months Ended March 31, 2024 2023 (in thousands, except share and per share amounts) Revenue $ 269,428 $ 213,526 Net loss (10,966 ) (63,447 ) Stock-based compensation expense 41,669 45,856 Amortization of acquired intangible assets 9,666 9,334 Employer payroll tax on employee stock transactions 4,189 3,154 Acquisition-related expenses 448 6,890 Non-GAAP net income $ 45,006 $ 1,787 Numerator: Non-GAAP net income $ 45,006 $ 1,787 Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders, basic 145,476,006 139,646,465 Effect of dilutive securities: Employee stock awards 5,708,299 6,707,822 Weighted-average shares used in computing net income per share attributable to common stockholders, diluted 151,184,305 146,354,287 GAAP net loss per share, basic $ (0.08 ) $ (0.45 ) GAAP net loss per share, diluted $ (0.08 ) $ (0.45 ) Non-GAAP net income per share, basic $ 0.31 $ 0.01 Non-GAAP net income per share, diluted $ 0.30 $ 0.01 Computation of free cash flow: Three Months Ended March 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 69,145 $ 29,275 Purchases of property, plant, and equipment (2,089 ) (2,173 ) Capitalized software development costs (9,514 ) (7,951 ) Non-GAAP free cash flow $ 57,542 $ 19,151 View source version on businesswire.com: https://www.businesswire.com/news/home/20240501579011/en/Contacts Media Contact press@procore.com Investor Contact ir@procore.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Procore Announces First Quarter 2024 Financial Results By: Procore Technologies Inc. via Business Wire May 01, 2024 at 16:05 PM EDT Procore Technologies, Inc. (NYSE: PCOR), the leading global provider of construction management software, today announced financial results for the first quarter ended March 31, 2024. “The highly complex and collaborative nature of our industry underscores the importance of our mission to connect everyone in construction on a global platform,” said Tooey Courtemanche, Founder and CEO of Procore. “Our trusted, innovative platform mirrors what the industry needs and will continue to deliver value to the industry in both the short and long term.” "I am proud of the strong margin performance we delivered in Q1,” said Howard Fu, CFO of Procore. “We remain focused on continuing to improve our operating leverage while executing on the long-term growth opportunity ahead of us.” First Quarter 2024 Financial Highlights: Revenue was $269 million, an increase of 26% year-over-year. GAAP gross margin was 83% and non-GAAP gross margin was 86%. GAAP operating margin was (7%) and non-GAAP operating margin was 14%. Operating cash inflow for the first quarter was $69 million. Free cash inflow for the first quarter was $58 million. A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” Recent Business Highlights: Achieved a gross revenue retention rate of 95% in the first quarter. Added 231 net new organic customers in the first quarter, ending with a total of 16,598 organic customers. Ranked #8 among G2’s Top 100 Best Global Software Companies of 2024. Second Quarter and Full Year 2024 Outlook: Procore is providing the following guidance for the second quarter and full year 2024: Second Quarter 2024 Outlook: Revenue is expected to be in the range of $274 million to $276 million, representing year-over-year growth of 20% to 21%. Non-GAAP operating margin is expected to be in the range of 11% to 12%. Full Year 2024 Outlook: Revenue is expected to be in the range of $1,140 million to $1,144 million, representing year-over-year growth of 20%. Non-GAAP operating margin is expected to be in the range of 9% to 10%. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future and cannot be reasonably determined or predicted at this time, although it is important to note that these factors could be material to Procore’s future GAAP financial results. Quarterly Conference Call Procore Technologies, Inc. will hold a conference call to discuss its first quarter results at 2:00 p.m., Pacific Time, on Wednesday, May 1, 2024. A live audio webcast will be accessible on Procore's investor relations website at http://investors.procore.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, about Procore and its industry that involve substantial risks and uncertainties. All statements in this press release, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or future financial or operating performance, and may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these words, or other similar terms or expressions that concern Procore’s expectations, strategy, plans, or intentions. Procore has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends that Procore believes may affect its business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors that could cause results to differ materially from Procore’s current expectations, including, but not limited to, our expectations regarding our financial performance (including revenues, expenses, and margins, and our ability to achieve or maintain future profitability), our ability to effectively manage our growth, anticipated performance, trends, growth rates, and challenges in our business and in the market in which we operate or anticipate entering into, economic and industry trends (in particular, the rate of adoption of construction management software and digitization of the construction industry, inflation, and challenging geopolitical conditions), our ability to attract new customers and retain and increase sales to existing customers, our ability to expand internationally, the effects of increased competition in our markets and our ability to compete effectively, our estimated total addressable market, and as set forth in Procore’s filings with the Securities and Exchange Commission. You should not place undue reliance on Procore’s forward-looking statements. Procore assumes no obligation to update any forward-looking statements to reflect events or circumstances that exist or change after the date on which they were made, except as required by law. Non-GAAP Financial Measures Procore believes that the use of certain non-GAAP financial measures as described below, when taken collectively, is helpful to investors because it provides consistency and comparability with past financial performance, and may assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. These non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles, or GAAP. Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Income (Loss) from Operations, Non-GAAP Operating Margin, Non-GAAP Net Income, and Non-GAAP Net Income per Share: Procore defines these non-GAAP financial measures as the respective GAAP measures, excluding stock-based compensation expense, amortization of acquired intangible assets, employer payroll tax related to employee stock transactions, and acquisition-related expenses. Non-GAAP gross margin is the ratio calculated by dividing non-GAAP gross profit by total revenue. Non-GAAP operating margin is the ratio calculated by dividing non-GAAP income (loss) from operations by total revenue. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Non-GAAP diluted earnings per share is computed by giving effect to all potential weighted average dilutive common stock equivalents outstanding for the period, including options to purchase common stock, restricted stock units, and shares to be issued pursuant to the employee stock purchase plan. The dilutive effect of outstanding awards is reflected in non-GAAP diluted earnings per share by application of the treasury stock method. Stock-based compensation expense includes the net effects of capitalization and amortization of stock-based compensation expense related to capitalized software and cloud-computing arrangement implementation costs. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of the compensation provided to our employees. Because of varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company’s non-cash expenses, we believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for meaningful comparisons between its operating results from period to period. The expense related to amortization of acquired intangible assets is dependent upon estimates and assumptions, which can vary significantly and are unique to each asset acquired; therefore, Procore believes non-GAAP measures that adjust for the amortization of acquired intangible assets provide investors a consistent basis for comparison across accounting periods. The amount of employer payroll tax-related items on employee stock transactions is dependent on restricted stock unit settlements, option exercises, related stock price, and other factors that are beyond Procore’s control and that do not correlate to the operation of the business. When evaluating the performance of its business and making operating plans, Procore does not consider these items (for example, when considering the impact of equity award grants, the company places a greater emphasis on overall stockholder dilution than the accounting charges associated with such grants). Additionally, acquisition-related expenses, such as transaction costs and retention payments, are expenses that are not necessarily reflective of operational performance during a period. Procore believes that the exclusion of acquisition-related expenses provides for a useful comparison of our operating results to prior periods and to its peer companies, which commonly exclude these expenses. Overall, Procore believes it is useful to exclude these expenses in order to better understand the long-term performance of its core business and to facilitate comparison of its results period-over-period and to those of peer companies. All of these non-GAAP financial measures are important tools for financial and operational decision-making and for evaluating Procore's own operating results over different periods of time. Non-GAAP financial measures may not provide information that is directly comparable to information provided by other companies in Procore's industry, as other companies in the industry may calculate non-GAAP financial measures differently. In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies, and exclude expenses that may have a material impact on Procore's reported financial results. Further, stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in Procore's business and an important part of the compensation provided to its employees. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Investors should review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate Procore's business. Free Cash Flow: Procore defines free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized software development costs. Procore believes free cash flow is an important liquidity measure of the cash (if any) that is available, after our operating activities and capital expenditures. Procore uses free cash flow in conjunction with traditional GAAP measures to assess its liquidity and evaluate the effectiveness of its business strategies. Once Procore’s business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. Other Metrics Customer Count: The aforementioned customer count excludes customers acquired from Levelset and Esticom that have not yet been renewed onto standard Procore annual contracts. Remaining Levelset and Esticom legacy customers will be included in our customer metrics once they are renewed onto standard Procore annual contracts or upon integration of the sales process. About Procore Procore Technologies, Inc. (NYSE: PCOR) creates software for people who build the world. With a focus on providing timely and accurate data for all, Procore transforms the construction industry one project at a time - from hospitals and skyscrapers to airports and stadiums. Beyond its connected, innovative technology, Procore empowers the industry and its communities through Procore.org. For more information, visit www.procore.com. PROCORE-IR Category: Earnings Procore Technologies, Inc. Condensed Consolidated Statements of Operations (unaudited) Three Months Ended March 31, 2024 2023 (in thousands, except share and per share amounts) Revenue $ 269,428 $ 213,526 Cost of revenue(1)(2)(3) 45,723 40,202 Gross profit 223,705 173,324 Operating expenses Sales and marketing(1)(2)(3)(4) 120,994 117,363 Research and development(1)(2)(3)(4) 70,599 80,036 General and administrative(1)(3) 51,018 45,188 Total operating expenses 242,611 242,587 Loss from operations (18,906 ) (69,263 ) Interest income 5,938 4,948 Interest expense (479 ) (496 ) Accretion income, net 3,088 1,632 Other expense, net (344 ) (210 ) Loss before provision for income taxes (10,703 ) (63,389 ) Provision for income taxes 263 58 Net loss $ (10,966 ) $ (63,447 ) Net loss per share attributable to common stockholders, basic and diluted $ (0.08 ) $ (0.45 ) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 145,476,006 139,646,465 (1) Includes stock-based compensation expense and amortization of capitalized stock-based compensation as follows: Three Months Ended March 31, 2024 2023 (in thousands) Cost of revenue $ 3,185 $ 2,496 Sales and marketing 13,020 13,104 Research and development 13,735 19,781 General and administrative 11,729 10,475 Total stock-based compensation expense* $ 41,669 $ 45,856 *Includes amortization of capitalized stock-based compensation of $1.5 million and $0.9 million, respectively, for the three months ended March 31, 2024 and 2023 which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs. (2) Includes amortization of acquired intangible assets as follows: Three Months Ended March 31, 2024 2023 (in thousands) Cost of revenue $ 5,885 $ 5,493 Sales and marketing 3,106 3,107 Research and development 675 734 Total amortization of acquired intangible assets $ 9,666 $ 9,334 (3) Includes employer payroll tax on employee stock transactions as follows: Three Months Ended March 31, 2024 2023 (in thousands) Cost of revenue $ 212 $ 167 Sales and marketing 1,264 999 Research and development 1,668 1,356 General and administrative 1,045 632 Total employer payroll tax on employee stock transactions $ 4,189 $ 3,154 (4) Includes acquisition-related expenses as follows: Three Months Ended March 31, 2024 2023 (in thousands) Sales and marketing $ 448 $ 906 Research and development — 5,984 Total acquisition-related expenses $ 448 $ 6,890 Procore Technologies, Inc. Condensed Consolidated Balance Sheets (unaudited) March 31, 2024 December 31, 2023 (in thousands) Assets Current assets Cash and cash equivalents $ 427,656 $ 357,790 Marketable securities 316,963 320,161 Accounts receivable, net 138,996 206,644 Contract cost asset, current 29,618 28,718 Prepaid expenses and other current assets 41,707 42,421 Total current assets 954,940 955,734 Capitalized software development costs, net 88,409 83,045 Property and equipment, net 35,417 36,258 Right of use assets - finance leases 33,712 34,375 Right of use assets - operating leases 36,727 44,141 Contract cost asset, non-current 43,757 44,564 Intangible assets, net 127,747 137,546 Goodwill 539,131 539,354 Other assets 18,870 18,551 Total assets $ 1,878,710 $ 1,893,568 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 16,446 $ 13,177 Accrued expenses 67,008 100,075 Deferred revenue, current 487,944 501,903 Other current liabilities 23,585 27,275 Total current liabilities 594,983 642,430 Deferred revenue, non-current 7,403 7,692 Finance lease liabilities, non-current 43,076 43,581 Operating lease liabilities, non-current 33,691 37,923 Other liabilities, non-current 5,876 6,332 Total liabilities 685,029 737,958 Stockholders’ equity Common stock 15 15 Additional paid-in capital 2,345,537 2,295,807 Accumulated other comprehensive loss (2,068 ) (1,375 ) Accumulated deficit (1,149,803 ) (1,138,837 ) Total stockholders’ equity 1,193,681 1,155,610 Total liabilities and stockholders’ equity $ 1,878,710 $ 1,893,568 Remaining performance obligation: The following table presents our current and non-current RPO at the end of each period: March 31, Change 2024 2023 Dollar Percent (dollars in thousands) Remaining performance obligations Current $ 704,656 $ 586,158 $ 118,498 20 % Non-current 302,159 219,316 82,843 38 % Total remaining performance obligations $ 1,006,815 $ 805,474 $ 201,341 25 % Procore Technologies, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) Three Months Ended March 31, 2024 2023 (in thousands) Operating activities Net loss $ (10,966 ) $ (63,447 ) Adjustments to reconcile net loss to net cash provided by operating activities Stock-based compensation 40,132 44,938 Depreciation and amortization 20,051 16,874 Accretion of discounts on marketable debt securities, net (3,088 ) (1,632 ) Abandonment of long-lived assets 268 441 Noncash operating lease expense 2,734 2,628 Unrealized foreign currency loss, net 1,079 408 Deferred income taxes 1 2 Provision for credit losses 189 1,726 Increase in fair value of strategic investments (759 ) (36 ) Changes in operating assets and liabilities, net of effect of asset acquisition Accounts receivable 68,013 42,948 Deferred contract cost assets (427 ) (460 ) Prepaid expenses and other assets (684 ) 4,549 Accounts payable 3,155 4,648 Accrued expenses and other liabilities (34,154 ) (28,181 ) Deferred revenue (14,108 ) 6,489 Operating lease liabilities (2,291 ) (2,620 ) Net cash provided by operating activities 69,145 29,275 Investing activities Purchases of property and equipment (2,089 ) (2,173 ) Capitalized software development costs (9,514 ) (7,951 ) Purchases of strategic investments (210 ) (149 ) Purchases of marketable securities (101,434 ) (89,996 ) Maturities of marketable securities 107,301 103,909 Originations of materials financing — (9,077 ) Customer repayments of materials financing 1,281 5,358 Asset acquisition, net of cash acquired (5 ) — Net cash used in investing activities (4,670 ) (79 ) Financing activities Proceeds from stock option exercises 7,125 3,722 Principal payments under finance lease agreements, net of proceeds from lease incentives (449 ) (410 ) Net cash provided by financing activities 6,676 3,312 Net increase in cash, cash equivalents, and restricted cash 71,151 32,508 Effect of exchange rate changes on cash (1,285 ) (256 ) Cash, cash equivalents, and restricted cash, beginning of period 357,790 299,816 Cash, cash equivalents, and restricted cash, end of period $ 427,656 $ 332,068 Procore Technologies, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation of gross profit and gross margin to non-GAAP gross profit and non-GAAP gross margin: Three Months Ended March 31, 2024 2023 (dollars in thousands) Revenue $ 269,428 $ 213,526 Gross profit 223,705 173,324 Stock-based compensation expense 3,185 2,496 Amortization of acquired technology intangible assets 5,885 5,493 Employer payroll tax on employee stock transactions 212 167 Non-GAAP gross profit $ 232,987 $ 181,480 Gross margin 83 % 81 % Non-GAAP gross margin 86 % 85 % Reconciliation of operating expenses to non-GAAP operating expenses: Three Months Ended March 31, 2024 2023 (dollars in thousands) Revenue $ 269,428 $ 213,526 GAAP sales and marketing 120,994 117,363 Stock-based compensation expense (13,020 ) (13,104 ) Amortization of acquired intangible assets (3,106 ) (3,107 ) Employer payroll tax on employee stock transactions (1,264 ) (999 ) Acquisition-related expenses (448 ) (906 ) Non-GAAP sales and marketing $ 103,156 $ 99,247 GAAP sales and marketing as a percentage of revenue 45 % 55 % Non-GAAP sales and marketing as a percentage of revenue 38 % 46 % GAAP research and development $ 70,599 $ 80,036 Stock-based compensation expense (13,735 ) (19,781 ) Amortization of acquired intangible assets (675 ) (734 ) Employer payroll tax on employee stock transactions (1,668 ) (1,356 ) Acquisition-related expenses — (5,984 ) Non-GAAP research and development $ 54,521 $ 52,181 GAAP research and development as a percentage of revenue 26 % 37 % Non-GAAP research and development as a percentage of revenue 20 % 24 % GAAP general and administrative $ 51,018 $ 45,188 Stock-based compensation expense (11,729 ) (10,475 ) Employer payroll tax on employee stock transactions (1,045 ) (632 ) Non-GAAP general and administrative $ 38,244 $ 34,081 GAAP general and administrative as a percentage of revenue 19 % 21 % Non-GAAP general and administrative as a percentage of revenue 14 % 16 % Reconciliation of loss from operations and operating margin to non-GAAP income (loss) from operations and non-GAAP operating margin: Three Months Ended March 31, 2024 2023 (dollars in thousands) Revenue $ 269,428 $ 213,526 Loss from operations (18,906 ) (69,263 ) Stock-based compensation expense 41,669 45,856 Amortization of acquired intangible assets 9,666 9,334 Employer payroll tax on employee stock transactions 4,189 3,154 Acquisition-related expenses 448 6,890 Non-GAAP income (loss) from operations $ 37,066 $ (4,029 ) Operating margin (7 %) (32 %) Non-GAAP operating margin 14 % (2 %) Reconciliation of net loss and net loss per share to non-GAAP net income and non-GAAP net income per share: Three Months Ended March 31, 2024 2023 (in thousands, except share and per share amounts) Revenue $ 269,428 $ 213,526 Net loss (10,966 ) (63,447 ) Stock-based compensation expense 41,669 45,856 Amortization of acquired intangible assets 9,666 9,334 Employer payroll tax on employee stock transactions 4,189 3,154 Acquisition-related expenses 448 6,890 Non-GAAP net income $ 45,006 $ 1,787 Numerator: Non-GAAP net income $ 45,006 $ 1,787 Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders, basic 145,476,006 139,646,465 Effect of dilutive securities: Employee stock awards 5,708,299 6,707,822 Weighted-average shares used in computing net income per share attributable to common stockholders, diluted 151,184,305 146,354,287 GAAP net loss per share, basic $ (0.08 ) $ (0.45 ) GAAP net loss per share, diluted $ (0.08 ) $ (0.45 ) Non-GAAP net income per share, basic $ 0.31 $ 0.01 Non-GAAP net income per share, diluted $ 0.30 $ 0.01 Computation of free cash flow: Three Months Ended March 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 69,145 $ 29,275 Purchases of property, plant, and equipment (2,089 ) (2,173 ) Capitalized software development costs (9,514 ) (7,951 ) Non-GAAP free cash flow $ 57,542 $ 19,151 View source version on businesswire.com: https://www.businesswire.com/news/home/20240501579011/en/Contacts Media Contact press@procore.com Investor Contact ir@procore.com
Procore Technologies, Inc. (NYSE: PCOR), the leading global provider of construction management software, today announced financial results for the first quarter ended March 31, 2024. “The highly complex and collaborative nature of our industry underscores the importance of our mission to connect everyone in construction on a global platform,” said Tooey Courtemanche, Founder and CEO of Procore. “Our trusted, innovative platform mirrors what the industry needs and will continue to deliver value to the industry in both the short and long term.” "I am proud of the strong margin performance we delivered in Q1,” said Howard Fu, CFO of Procore. “We remain focused on continuing to improve our operating leverage while executing on the long-term growth opportunity ahead of us.” First Quarter 2024 Financial Highlights: Revenue was $269 million, an increase of 26% year-over-year. GAAP gross margin was 83% and non-GAAP gross margin was 86%. GAAP operating margin was (7%) and non-GAAP operating margin was 14%. Operating cash inflow for the first quarter was $69 million. Free cash inflow for the first quarter was $58 million. A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” Recent Business Highlights: Achieved a gross revenue retention rate of 95% in the first quarter. Added 231 net new organic customers in the first quarter, ending with a total of 16,598 organic customers. Ranked #8 among G2’s Top 100 Best Global Software Companies of 2024. Second Quarter and Full Year 2024 Outlook: Procore is providing the following guidance for the second quarter and full year 2024: Second Quarter 2024 Outlook: Revenue is expected to be in the range of $274 million to $276 million, representing year-over-year growth of 20% to 21%. Non-GAAP operating margin is expected to be in the range of 11% to 12%. Full Year 2024 Outlook: Revenue is expected to be in the range of $1,140 million to $1,144 million, representing year-over-year growth of 20%. Non-GAAP operating margin is expected to be in the range of 9% to 10%. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future and cannot be reasonably determined or predicted at this time, although it is important to note that these factors could be material to Procore’s future GAAP financial results. Quarterly Conference Call Procore Technologies, Inc. will hold a conference call to discuss its first quarter results at 2:00 p.m., Pacific Time, on Wednesday, May 1, 2024. A live audio webcast will be accessible on Procore's investor relations website at http://investors.procore.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, about Procore and its industry that involve substantial risks and uncertainties. All statements in this press release, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or future financial or operating performance, and may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these words, or other similar terms or expressions that concern Procore’s expectations, strategy, plans, or intentions. Procore has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends that Procore believes may affect its business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors that could cause results to differ materially from Procore’s current expectations, including, but not limited to, our expectations regarding our financial performance (including revenues, expenses, and margins, and our ability to achieve or maintain future profitability), our ability to effectively manage our growth, anticipated performance, trends, growth rates, and challenges in our business and in the market in which we operate or anticipate entering into, economic and industry trends (in particular, the rate of adoption of construction management software and digitization of the construction industry, inflation, and challenging geopolitical conditions), our ability to attract new customers and retain and increase sales to existing customers, our ability to expand internationally, the effects of increased competition in our markets and our ability to compete effectively, our estimated total addressable market, and as set forth in Procore’s filings with the Securities and Exchange Commission. You should not place undue reliance on Procore’s forward-looking statements. Procore assumes no obligation to update any forward-looking statements to reflect events or circumstances that exist or change after the date on which they were made, except as required by law. Non-GAAP Financial Measures Procore believes that the use of certain non-GAAP financial measures as described below, when taken collectively, is helpful to investors because it provides consistency and comparability with past financial performance, and may assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. These non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles, or GAAP. Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Income (Loss) from Operations, Non-GAAP Operating Margin, Non-GAAP Net Income, and Non-GAAP Net Income per Share: Procore defines these non-GAAP financial measures as the respective GAAP measures, excluding stock-based compensation expense, amortization of acquired intangible assets, employer payroll tax related to employee stock transactions, and acquisition-related expenses. Non-GAAP gross margin is the ratio calculated by dividing non-GAAP gross profit by total revenue. Non-GAAP operating margin is the ratio calculated by dividing non-GAAP income (loss) from operations by total revenue. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Non-GAAP diluted earnings per share is computed by giving effect to all potential weighted average dilutive common stock equivalents outstanding for the period, including options to purchase common stock, restricted stock units, and shares to be issued pursuant to the employee stock purchase plan. The dilutive effect of outstanding awards is reflected in non-GAAP diluted earnings per share by application of the treasury stock method. Stock-based compensation expense includes the net effects of capitalization and amortization of stock-based compensation expense related to capitalized software and cloud-computing arrangement implementation costs. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of the compensation provided to our employees. Because of varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company’s non-cash expenses, we believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for meaningful comparisons between its operating results from period to period. The expense related to amortization of acquired intangible assets is dependent upon estimates and assumptions, which can vary significantly and are unique to each asset acquired; therefore, Procore believes non-GAAP measures that adjust for the amortization of acquired intangible assets provide investors a consistent basis for comparison across accounting periods. The amount of employer payroll tax-related items on employee stock transactions is dependent on restricted stock unit settlements, option exercises, related stock price, and other factors that are beyond Procore’s control and that do not correlate to the operation of the business. When evaluating the performance of its business and making operating plans, Procore does not consider these items (for example, when considering the impact of equity award grants, the company places a greater emphasis on overall stockholder dilution than the accounting charges associated with such grants). Additionally, acquisition-related expenses, such as transaction costs and retention payments, are expenses that are not necessarily reflective of operational performance during a period. Procore believes that the exclusion of acquisition-related expenses provides for a useful comparison of our operating results to prior periods and to its peer companies, which commonly exclude these expenses. Overall, Procore believes it is useful to exclude these expenses in order to better understand the long-term performance of its core business and to facilitate comparison of its results period-over-period and to those of peer companies. All of these non-GAAP financial measures are important tools for financial and operational decision-making and for evaluating Procore's own operating results over different periods of time. Non-GAAP financial measures may not provide information that is directly comparable to information provided by other companies in Procore's industry, as other companies in the industry may calculate non-GAAP financial measures differently. In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies, and exclude expenses that may have a material impact on Procore's reported financial results. Further, stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in Procore's business and an important part of the compensation provided to its employees. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Investors should review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate Procore's business. Free Cash Flow: Procore defines free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized software development costs. Procore believes free cash flow is an important liquidity measure of the cash (if any) that is available, after our operating activities and capital expenditures. Procore uses free cash flow in conjunction with traditional GAAP measures to assess its liquidity and evaluate the effectiveness of its business strategies. Once Procore’s business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. Other Metrics Customer Count: The aforementioned customer count excludes customers acquired from Levelset and Esticom that have not yet been renewed onto standard Procore annual contracts. Remaining Levelset and Esticom legacy customers will be included in our customer metrics once they are renewed onto standard Procore annual contracts or upon integration of the sales process. About Procore Procore Technologies, Inc. (NYSE: PCOR) creates software for people who build the world. With a focus on providing timely and accurate data for all, Procore transforms the construction industry one project at a time - from hospitals and skyscrapers to airports and stadiums. Beyond its connected, innovative technology, Procore empowers the industry and its communities through Procore.org. For more information, visit www.procore.com. PROCORE-IR Category: Earnings Procore Technologies, Inc. Condensed Consolidated Statements of Operations (unaudited) Three Months Ended March 31, 2024 2023 (in thousands, except share and per share amounts) Revenue $ 269,428 $ 213,526 Cost of revenue(1)(2)(3) 45,723 40,202 Gross profit 223,705 173,324 Operating expenses Sales and marketing(1)(2)(3)(4) 120,994 117,363 Research and development(1)(2)(3)(4) 70,599 80,036 General and administrative(1)(3) 51,018 45,188 Total operating expenses 242,611 242,587 Loss from operations (18,906 ) (69,263 ) Interest income 5,938 4,948 Interest expense (479 ) (496 ) Accretion income, net 3,088 1,632 Other expense, net (344 ) (210 ) Loss before provision for income taxes (10,703 ) (63,389 ) Provision for income taxes 263 58 Net loss $ (10,966 ) $ (63,447 ) Net loss per share attributable to common stockholders, basic and diluted $ (0.08 ) $ (0.45 ) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 145,476,006 139,646,465 (1) Includes stock-based compensation expense and amortization of capitalized stock-based compensation as follows: Three Months Ended March 31, 2024 2023 (in thousands) Cost of revenue $ 3,185 $ 2,496 Sales and marketing 13,020 13,104 Research and development 13,735 19,781 General and administrative 11,729 10,475 Total stock-based compensation expense* $ 41,669 $ 45,856 *Includes amortization of capitalized stock-based compensation of $1.5 million and $0.9 million, respectively, for the three months ended March 31, 2024 and 2023 which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs. (2) Includes amortization of acquired intangible assets as follows: Three Months Ended March 31, 2024 2023 (in thousands) Cost of revenue $ 5,885 $ 5,493 Sales and marketing 3,106 3,107 Research and development 675 734 Total amortization of acquired intangible assets $ 9,666 $ 9,334 (3) Includes employer payroll tax on employee stock transactions as follows: Three Months Ended March 31, 2024 2023 (in thousands) Cost of revenue $ 212 $ 167 Sales and marketing 1,264 999 Research and development 1,668 1,356 General and administrative 1,045 632 Total employer payroll tax on employee stock transactions $ 4,189 $ 3,154 (4) Includes acquisition-related expenses as follows: Three Months Ended March 31, 2024 2023 (in thousands) Sales and marketing $ 448 $ 906 Research and development — 5,984 Total acquisition-related expenses $ 448 $ 6,890 Procore Technologies, Inc. Condensed Consolidated Balance Sheets (unaudited) March 31, 2024 December 31, 2023 (in thousands) Assets Current assets Cash and cash equivalents $ 427,656 $ 357,790 Marketable securities 316,963 320,161 Accounts receivable, net 138,996 206,644 Contract cost asset, current 29,618 28,718 Prepaid expenses and other current assets 41,707 42,421 Total current assets 954,940 955,734 Capitalized software development costs, net 88,409 83,045 Property and equipment, net 35,417 36,258 Right of use assets - finance leases 33,712 34,375 Right of use assets - operating leases 36,727 44,141 Contract cost asset, non-current 43,757 44,564 Intangible assets, net 127,747 137,546 Goodwill 539,131 539,354 Other assets 18,870 18,551 Total assets $ 1,878,710 $ 1,893,568 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 16,446 $ 13,177 Accrued expenses 67,008 100,075 Deferred revenue, current 487,944 501,903 Other current liabilities 23,585 27,275 Total current liabilities 594,983 642,430 Deferred revenue, non-current 7,403 7,692 Finance lease liabilities, non-current 43,076 43,581 Operating lease liabilities, non-current 33,691 37,923 Other liabilities, non-current 5,876 6,332 Total liabilities 685,029 737,958 Stockholders’ equity Common stock 15 15 Additional paid-in capital 2,345,537 2,295,807 Accumulated other comprehensive loss (2,068 ) (1,375 ) Accumulated deficit (1,149,803 ) (1,138,837 ) Total stockholders’ equity 1,193,681 1,155,610 Total liabilities and stockholders’ equity $ 1,878,710 $ 1,893,568 Remaining performance obligation: The following table presents our current and non-current RPO at the end of each period: March 31, Change 2024 2023 Dollar Percent (dollars in thousands) Remaining performance obligations Current $ 704,656 $ 586,158 $ 118,498 20 % Non-current 302,159 219,316 82,843 38 % Total remaining performance obligations $ 1,006,815 $ 805,474 $ 201,341 25 % Procore Technologies, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) Three Months Ended March 31, 2024 2023 (in thousands) Operating activities Net loss $ (10,966 ) $ (63,447 ) Adjustments to reconcile net loss to net cash provided by operating activities Stock-based compensation 40,132 44,938 Depreciation and amortization 20,051 16,874 Accretion of discounts on marketable debt securities, net (3,088 ) (1,632 ) Abandonment of long-lived assets 268 441 Noncash operating lease expense 2,734 2,628 Unrealized foreign currency loss, net 1,079 408 Deferred income taxes 1 2 Provision for credit losses 189 1,726 Increase in fair value of strategic investments (759 ) (36 ) Changes in operating assets and liabilities, net of effect of asset acquisition Accounts receivable 68,013 42,948 Deferred contract cost assets (427 ) (460 ) Prepaid expenses and other assets (684 ) 4,549 Accounts payable 3,155 4,648 Accrued expenses and other liabilities (34,154 ) (28,181 ) Deferred revenue (14,108 ) 6,489 Operating lease liabilities (2,291 ) (2,620 ) Net cash provided by operating activities 69,145 29,275 Investing activities Purchases of property and equipment (2,089 ) (2,173 ) Capitalized software development costs (9,514 ) (7,951 ) Purchases of strategic investments (210 ) (149 ) Purchases of marketable securities (101,434 ) (89,996 ) Maturities of marketable securities 107,301 103,909 Originations of materials financing — (9,077 ) Customer repayments of materials financing 1,281 5,358 Asset acquisition, net of cash acquired (5 ) — Net cash used in investing activities (4,670 ) (79 ) Financing activities Proceeds from stock option exercises 7,125 3,722 Principal payments under finance lease agreements, net of proceeds from lease incentives (449 ) (410 ) Net cash provided by financing activities 6,676 3,312 Net increase in cash, cash equivalents, and restricted cash 71,151 32,508 Effect of exchange rate changes on cash (1,285 ) (256 ) Cash, cash equivalents, and restricted cash, beginning of period 357,790 299,816 Cash, cash equivalents, and restricted cash, end of period $ 427,656 $ 332,068 Procore Technologies, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation of gross profit and gross margin to non-GAAP gross profit and non-GAAP gross margin: Three Months Ended March 31, 2024 2023 (dollars in thousands) Revenue $ 269,428 $ 213,526 Gross profit 223,705 173,324 Stock-based compensation expense 3,185 2,496 Amortization of acquired technology intangible assets 5,885 5,493 Employer payroll tax on employee stock transactions 212 167 Non-GAAP gross profit $ 232,987 $ 181,480 Gross margin 83 % 81 % Non-GAAP gross margin 86 % 85 % Reconciliation of operating expenses to non-GAAP operating expenses: Three Months Ended March 31, 2024 2023 (dollars in thousands) Revenue $ 269,428 $ 213,526 GAAP sales and marketing 120,994 117,363 Stock-based compensation expense (13,020 ) (13,104 ) Amortization of acquired intangible assets (3,106 ) (3,107 ) Employer payroll tax on employee stock transactions (1,264 ) (999 ) Acquisition-related expenses (448 ) (906 ) Non-GAAP sales and marketing $ 103,156 $ 99,247 GAAP sales and marketing as a percentage of revenue 45 % 55 % Non-GAAP sales and marketing as a percentage of revenue 38 % 46 % GAAP research and development $ 70,599 $ 80,036 Stock-based compensation expense (13,735 ) (19,781 ) Amortization of acquired intangible assets (675 ) (734 ) Employer payroll tax on employee stock transactions (1,668 ) (1,356 ) Acquisition-related expenses — (5,984 ) Non-GAAP research and development $ 54,521 $ 52,181 GAAP research and development as a percentage of revenue 26 % 37 % Non-GAAP research and development as a percentage of revenue 20 % 24 % GAAP general and administrative $ 51,018 $ 45,188 Stock-based compensation expense (11,729 ) (10,475 ) Employer payroll tax on employee stock transactions (1,045 ) (632 ) Non-GAAP general and administrative $ 38,244 $ 34,081 GAAP general and administrative as a percentage of revenue 19 % 21 % Non-GAAP general and administrative as a percentage of revenue 14 % 16 % Reconciliation of loss from operations and operating margin to non-GAAP income (loss) from operations and non-GAAP operating margin: Three Months Ended March 31, 2024 2023 (dollars in thousands) Revenue $ 269,428 $ 213,526 Loss from operations (18,906 ) (69,263 ) Stock-based compensation expense 41,669 45,856 Amortization of acquired intangible assets 9,666 9,334 Employer payroll tax on employee stock transactions 4,189 3,154 Acquisition-related expenses 448 6,890 Non-GAAP income (loss) from operations $ 37,066 $ (4,029 ) Operating margin (7 %) (32 %) Non-GAAP operating margin 14 % (2 %) Reconciliation of net loss and net loss per share to non-GAAP net income and non-GAAP net income per share: Three Months Ended March 31, 2024 2023 (in thousands, except share and per share amounts) Revenue $ 269,428 $ 213,526 Net loss (10,966 ) (63,447 ) Stock-based compensation expense 41,669 45,856 Amortization of acquired intangible assets 9,666 9,334 Employer payroll tax on employee stock transactions 4,189 3,154 Acquisition-related expenses 448 6,890 Non-GAAP net income $ 45,006 $ 1,787 Numerator: Non-GAAP net income $ 45,006 $ 1,787 Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders, basic 145,476,006 139,646,465 Effect of dilutive securities: Employee stock awards 5,708,299 6,707,822 Weighted-average shares used in computing net income per share attributable to common stockholders, diluted 151,184,305 146,354,287 GAAP net loss per share, basic $ (0.08 ) $ (0.45 ) GAAP net loss per share, diluted $ (0.08 ) $ (0.45 ) Non-GAAP net income per share, basic $ 0.31 $ 0.01 Non-GAAP net income per share, diluted $ 0.30 $ 0.01 Computation of free cash flow: Three Months Ended March 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 69,145 $ 29,275 Purchases of property, plant, and equipment (2,089 ) (2,173 ) Capitalized software development costs (9,514 ) (7,951 ) Non-GAAP free cash flow $ 57,542 $ 19,151 View source version on businesswire.com: https://www.businesswire.com/news/home/20240501579011/en/