PCOR Q2 Deep Dive: Cross-Sell Momentum, AI Initiatives, and Margin Focus Shape Outlook

August 12, 2025 at 23:05 PM EDT

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Construction management software maker Procore (NYSE: PCOR) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 13.9% year on year to $323.9 million. The company expects next quarter’s revenue to be around $327 million, close to analysts’ estimates. Its non-GAAP profit of $0.35 per share was 33.4% above analysts’ consensus estimates.

Is now the time to buy PCOR? Find out in our full research report (it’s free).

Procore (PCOR) Q2 CY2025 Highlights:

Revenue: $323.9 million vs analyst estimates of $311.8 million (13.9% year-on-year growth, 3.9% beat)
Adjusted EPS: $0.35 vs analyst estimates of $0.26 (33.4% beat)
Adjusted Operating Income: $43.68 million vs analyst estimates of $35.62 million (13.5% margin, 22.6% beat)
The company slightly lifted its revenue guidance for the full year to $1.30 billion at the midpoint from $1.29 billion
Operating Margin: -9.3%, down from -5.2% in the same quarter last year
Customers: 17,501, up from 17,306 in the previous quarter
Annual Recurring Revenue: $1.30 billion vs analyst estimates of $1.25 billion (13.9% year-on-year growth, 4% beat)
Billings: $323.5 million at quarter end, up 11.6% year on year
Market Capitalization: $9.45 billion

StockStory’s Take

Procore’s second quarter results were met with a negative market reaction despite the company surpassing Wall Street’s revenue and non-GAAP profit expectations. Key drivers of the quarter included strong growth in large enterprise deals, a notable uptick in cross-selling financial suite products, and ongoing execution of its go-to-market transition. CEO Tooey Courtemanche highlighted that “our improved cross-sell mix and deeper customer partnerships are driving meaningful wins,” while CFO Howard Fu pointed to stable customer demand and increased contract durations as factors supporting recurring revenue growth. Management acknowledged the competitive landscape and macroeconomic pressures, but did not express significant caution regarding demand or pipeline trends.

Looking ahead, Procore’s guidance is anchored by continued investments in AI-driven platform innovation, expansion into new customer segments, and a focus on improving operating margins. Management believes that recently launched capabilities, such as the Helix intelligence layer and Agent Builder, will accelerate adoption and solidify Procore’s position as a comprehensive system of record for construction. CFO Howard Fu cautioned that margin expansion, not revenue acceleration, will be the primary driver of improved profitability in the coming quarters, stating, “our Rule of 40 improvement next year is going to come from profitability.” The company aims to maintain sales efficiency while navigating external factors, such as currency headwinds and customer purchasing preferences.

Key Insights from Management’s Remarks

Procore’s management attributed the quarter’s outperformance to cross-sell gains, new AI-powered platform capabilities, and disciplined execution of its go-to-market realignment.

Cross-sell acceleration: The shift in expansion strategy resulted in a larger contribution from product cross-sell, particularly the financial suite, which management expects to become a more significant revenue driver as technical specialists join the sales process.
AI and automation initiatives: The introduction of Helix, Procore’s new intelligence layer, and Agent Builder tools are designed to automate manual tasks and allow customers to create custom workflow agents, with early customer feedback pointing to improved efficiency and broader platform adoption.
Large enterprise deal wins: Procore secured several high-profile contracts in both existing and new segments, including energy, public sector, and large general contractors, with customers citing unified data architecture and integrated project management as core differentiators.
Go-to-market transition progress: The company’s go-to-market changes—focusing on alignment, sales productivity, and customer-centric teams—have reduced deal cycle attrition and facilitated larger, multi-product deals, especially with upper-market clients.
Customer resilience amid macro uncertainty: Despite industry noise around tariffs and regulatory shifts, management observed that customers remain focused on operational efficiency and digital transformation, viewing Procore as a strategic partner rather than just a software vendor.

Drivers of Future Performance

Procore’s outlook for the next several quarters is shaped by ongoing platform expansion, margin improvement initiatives, and the adoption of new AI features across its customer base.

Margin expansion as the main driver: CFO Howard Fu emphasized that improved profitability, rather than revenue acceleration, will drive better financial performance in the near term, with operating discipline and leverage from the go-to-market transition expected to continue raising margins.
AI-powered product adoption: Management anticipates that customer uptake of the Helix intelligence layer, Agent Builder, and related automation will drive greater platform stickiness and expand wallet share, as customers increasingly view Procore as a system of record for construction data and workflows.
Flexible pricing and packaging: Procore is piloting new product bundles and licensing models to meet diverse customer needs, particularly in the owner segment, which could open up new markets and support longer-term growth if customer feedback leads to broader adoption.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will closely monitor (1) the adoption rate and customer feedback for new AI-powered tools, including Helix and Agent Builder; (2) the impact of cross-sell initiatives and new product bundles on expansion and customer retention; and (3) sustained progress in operating margin improvement. Key milestones will also include wins in the public sector and the effectiveness of Procore’s go-to-market realignment in driving larger, multi-product deals.

Procore currently trades at $62.87, down from $71.31 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

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