10-K: Procore Reports 15% Revenue Growth, Narrows Losses, Boosts AI

Procore Technologies, Inc. reported $1.3 billion in 2025 revenue, a 15% increase, while narrowing net losses and making strategic investments in AI and international markets.

Summary

• Revenue for 2025 increased by 15% to $1.32 billion, following a 21% growth in 2024 to $1.15 billion and $950.0 million in 2023.
• Net loss for 2025 was $100.8 million, an improvement from $106.0 million in 2024 and $189.7 million in 2023.
• The number of customers contributing over $100,000 in Annual Recurring Revenue (ARR) grew by 16% to 2,710 in 2025.
• Customers contributing over $1,000,000 in ARR increased by 34% to 115 in 2025.
• Gross Retention Rate (GRR) remained strong at 95% in 2025, consistent with 94% in 2024 and 95% in 2023.
• Net Retention Rate (NRR) was 106% in both 2025 and 2024, though the company notes this metric is less indicative due to pooled volume contracts.
• Total Remaining Performance Obligations (RPO) grew by 24% to $1.59 billion in 2025, with Current RPO (cRPO) increasing by 22% to $1.01 billion.
• Strategic acquisitions include Datagrid (AI solutions) in January 2026 for approximately $190.0 million, Novorender (BIM rendering) in January 2025 for $44.3 million, and Intelliwave (materials management) in May 2024 for $29.8 million.
• The company introduced four bundled product packages (Project Execution, Cost Management, Resource Management, and Project Lifecycle Management) in February 2026.
• Dr. Ajei S. Gopal was appointed President and Chief Executive Officer, effective November 10, 2025, succeeding Craig F. Courtemanche, Jr., who remains Chair of the Board.
• A workforce reduction of approximately 4% globally was executed in January 2026, expected to incur $6.6 million in severance costs.
• A new stock repurchase program of up to $300.0 million was authorized on November 3, 2025, replacing a prior program that expired on October 29, 2025.
• Repurchased and retired 1,903,854 shares of common stock for $128.8 million in 2025, and an additional 1,765,560 shares for $100.0 million between December 31, 2025, and February 24, 2026.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive report, reflecting continued revenue growth and strategic investments in AI and market expansion, alongside a narrowing of net losses. The strong retention rates and focus on high-value customers are encouraging, though the decelerating revenue growth rate and ongoing losses warrant continued monitoring.

Positives

• Revenue grew by 15% year-over-year to $1.32 billion in 2025, demonstrating continued top-line expansion.
• Net losses narrowed to $100.8 million in 2025, a significant improvement from $189.7 million in 2023, indicating progress towards profitability.
• Strong growth in high-value customer segments, with customers contributing over $100,000 ARR increasing by 16% and those over $1,000,000 ARR growing by 34% in 2025.
• High Gross Retention Rate (GRR) of 95% in 2025 suggests strong customer satisfaction and platform stickiness.
• Remaining Performance Obligations (RPO) increased by 24% to $1.59 billion, providing a solid foundation for future revenue recognition.
• Strategic acquisitions of Datagrid (AI), Novorender (BIM rendering), and Intelliwave (materials management) enhance the platform's capabilities and support long-term innovation.
• Achieved FedRAMP Moderate authorization for Procore for Government in January 2026, opening new opportunities in the U.S. federal government market.
• Positive net cash provided by operating activities increased to $300.3 million in 2025, up from $196.2 million in 2024, indicating strong operational cash generation.
• Authorization of a new $300.0 million stock repurchase program signals confidence in the company's value and a commitment to shareholder returns.

Negatives

• The company continues to report net losses, with an accumulated deficit of $1.3 billion as of December 31, 2025, indicating it is not yet profitable.
• Revenue growth rate decelerated from 21% in 2024 to 15% in 2025, suggesting a slowdown in expansion.
• Interest income decreased by $2.8 million (12%) in 2025 due to lower balances in money market funds, cash savings accounts, and marketable securities.
• Accretion income, net, decreased by $5.3 million (39%) in 2025, also due to lower marketable securities balances.
• Provision for income taxes increased significantly in 2025, primarily due to a foreign tax on the transfer of intellectual property from Norway.
• A workforce reduction of approximately 4% globally was executed in January 2026, incurring an estimated $6.6 million in severance costs, which could impact employee morale and productivity.
• The company states that Net Retention Rate (NRR) is not a key metric due to pooled volume contracts, which may obscure a more granular view of customer expansion or contraction.

Risks

• Future growth may not match prior rapid growth, and failure to manage growth effectively could materially adversely affect the business.
• The company has a history of losses and may not achieve or sustain profitability in the future, with expected increased expenses for growth investments.
• Business performance is significantly impacted by changes in the economy, construction industry spending, and market size, with current sentiment in the construction industry remaining uncertain due to macroeconomic factors.
• The construction management software industry is evolving rapidly, and failure to respond adequately to changes or develop new products (especially AI-driven) could adversely affect the business.
• Inability to maintain and enhance the company's brand could impair customer retention, investor attraction, and personnel recruitment.
• Failure to successfully incorporate AI into products and operations, or non-compliance with AI-related laws, could lead to flawed outputs, legal liability, reputational harm, and increased costs.
• Revenue recognition over subscription terms means downturns or upturns in new business are not immediately reflected, and sales cycles can be long and unpredictable.
• International expansion exposes the company to increased business, regulatory, and economic risks, including currency exchange rate fluctuations.
• Operating in a competitive market with new entrants and AI-driven solutions could erode market share and necessitate price-cutting or increased marketing expenses.
• Service interruptions or performance issues with the platform, including interoperability challenges with third-party applications, could lead to customer churn and reputational damage.
• Reliance on third-party data centers (e.g., AWS) for hosting and operations presents risks of disruption or increased costs.
• Sales to governmental entities are subject to unique challenges and risks, including competitive processes, termination rights, and potential for adverse consequences from non-compliance.
• Loss of key management personnel or inability to attract and retain qualified personnel, particularly those with AI experience, could hinder strategic objectives.
• Failure to maintain company culture as the business grows could impact innovation, teamwork, and employee retention.
• Subject to stringent, changing, and potentially inconsistent data privacy and security laws (e.g., GDPR, CCPA); non-compliance could lead to investigations, litigation, fines, and reputational harm.
• Compromise of IT systems or data from cyberattacks, fraud, or errors could result in regulatory actions, litigation, and reputational harm.
• Failure to protect intellectual property rights and proprietary information could diminish brand and other intangible assets.
• Unsuccessful integration or maintenance of acquisitions, joint ventures, and strategic investments could lead to substantial costs and business disruption.
• Potential for additional sales and use, VAT, and other indirect tax liabilities in various jurisdictions.
• Corporate structure and intercompany arrangements are subject to complex transfer pricing regulations and potential challenges from tax authorities.
• Business could be materially adversely affected by changes to tax laws, including the impact of the Inflation Reduction Act's excise tax on stock repurchases and BEPS 2.0.
• Limitations on the ability to use net operating loss carryforwards (NOL carryforwards) and certain other tax attributes.
• Need to raise additional capital to grow the business, which may not be available on acceptable terms, potentially reducing competitiveness.
• Marketable securities portfolio is subject to credit, liquidity, market, and interest rate risks.
• Failure to maintain an effective system of disclosure controls and internal control over financial reporting could impair financial reporting accuracy and investor confidence.
• Business could be disrupted by macroeconomic factors, geopolitical events, or catastrophic occurrences, including natural disasters and military conflicts.
• The stock repurchase program may not enhance stockholder value, could increase stock volatility, and diminish cash reserves.
• The market price of common stock may be volatile, leading to potential investment losses.
• Excessive fraudulent activity or inability to meet evolving credit card association merchant standards could lead to substantial costs and customer decline.
• Concentration of ownership among officers, directors, and principal stockholders may prevent new investors from influencing significant corporate decisions.
• Provisions in organizational documents and Delaware law could make an acquisition of the company more difficult or limit attempts by stockholders to replace management.
• Designation of Delaware courts and U.S. federal district courts as exclusive forums for certain disputes could limit stockholders' ability to choose the judicial forum.
• Subject to governmental export and import controls, anti-corruption, sanctions, anti-bribery, and anti-money laundering laws; non-compliance could lead to penalties and reputational harm.
• Certain services, such as lien rights management (from Levelset acquisition), may be subject to Unauthorized Practice of Law (UPL) allegations.
• Procore Pay payment solution is subject to complex and evolving laws and regulations applicable to payment solutions, including money transmitter licenses and anti-money laundering (AML) laws.
• Increased government scrutiny of the technology industry generally, or Procore's operations specifically, could negatively affect the business, including potential changes to Section 230 of the Communications Decency Act.

Future Outlook

The company anticipates continued investment in growth, including sales and marketing, customer success, technology infrastructure, and research and development, which is expected to increase expenses. The overall sentiment in the construction industry is expected to remain uncertain in the short term due to macroeconomic factors. The evolved Go-To-Market operating model is projected to improve long-term operating efficiency and support sustainable growth. International expansion is viewed as a significant growth opportunity, and increased foreign tax expenses are expected. Existing cash and equivalents are deemed sufficient for at least the next 12 months, and no cash dividends are anticipated in the foreseeable future, with funds to be retained for business development and expansion. The company plans to discontinue reporting total customer count from 2026, focusing instead on customers with over $100,000 ARR as a key performance metric. The company is monitoring the potential impacts of the Pillar Two rules on its tax obligations.

Management Comments

• Our mission is to connect everyone in construction on a global platform.
• We are the leading global provider of construction management software, and are helping transform one of the oldest, largest, and least digitized industries in the world.
• We believe that the market for our platform is large, and we are highly focused on our long-term growth.
• Despite macroeconomic challenges, we have seen an increase in the number of customers that contributed more than $100,000 of annual recurring revenue (ARR).
• We do not believe our total customer count is an accurate representation of our business performance and plan to discontinue the disclosure of total customer count starting in 2026.
• We believe the better metric to assess our business performance is the growth in the number of customers that contributed more than $100,000 of ARR, which has grown from 650 at the time of our IPO to more than 2,700 customers today.
• We believe that these investments [in GTM operating model] have allowed, and will continue to allow, us to build stronger and deeper customer relationships and provide additional value to our customers.
• Notwithstanding these risks, we believe that the evolved GTM operating model will improve our long-term operating efficiency, best position us for sustainable long-term growth, and enhance our ability to capture our large market opportunity.
• We see international expansion as a major, and largely greenfield, opportunity for growth as we look to capture a larger part of the worldwide construction market.
• We have a balanced approach to capital allocation based on the following priorities: driving organic and efficient revenue growth; investing in accretive mergers and acquisitions; and returning capital to stockholders through regular evaluation of share repurchases, as appropriate.

Industry Context

StockSavvy.ai notes that Procore operates in a highly fragmented, specialized, and historically under-digitized construction industry. The company's focus on a global, integrated platform and recent investments in AI (Datagrid acquisition) align with broader industry trends towards digital transformation and automation to improve productivity and efficiency. The shift to bundled packages reflects a common software industry strategy to simplify offerings and drive deeper platform adoption, while the emphasis on larger ARR customers indicates a focus on enterprise value in a competitive market. The company's achievement of FedRAMP Moderate authorization positions it to capitalize on the growing demand for secure cloud solutions in the public sector.

Comparison to Industry Standards

• The construction industry is characterized as one of the 'oldest, largest, and least digitized industries in the world,' positioning Procore's cloud-based software as a key driver of modernization, a trend seen across many traditional sectors adopting digital tools.
• Procore's Gross Retention Rate (GRR) of 95% is strong and competitive within the SaaS industry, indicating high customer satisfaction and low churn, comparable to leading enterprise software providers.
• The Net Retention Rate (NRR) of 106% is solid, though the company's note about pooled volume contracts affecting this metric suggests a need for caution when directly comparing to other SaaS companies that may have different contract structures.
• The strategy of acquiring App Marketplace partners like Datagrid, Novorender, Intelliwave, and Unearth is a common industry practice for technology companies to accelerate product roadmaps and integrate complementary solutions, similar to how major tech firms expand their ecosystems.
• Achieving FedRAMP Moderate authorization for its government solution is a critical benchmark for software providers seeking to serve U.S. federal government customers, aligning Procore with a standard required for secure public sector engagements.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not presently a party to any legal proceedings that would individually or collectively have a material adverse effect on its business, results of operations, financial condition, or cash flow.
• A lawsuit was filed in 2024 by Oracle America, Inc. and certain affiliates alleging misappropriation of trade secrets, for which the extent of damages from an unfavorable outcome cannot be estimated.

Stakeholder Impact

• Shareholders: Potential for long-term value creation through strategic growth and share repurchases, but also risk of dilution from equity awards and stock price volatility. Continued net losses could impact investor sentiment.
• Employees: Workforce reduction in January 2026 (4% globally) will impact affected employees. New CEO appointment and GTM model evolution could bring changes. Equity incentive plans and benefits aim to attract and retain talent.
• Customers: New bundled product packages and AI capabilities aim to increase productivity, efficiency, and collaboration. High retention rates suggest satisfaction.
• Suppliers/Vendors: Increased third-party hosting costs and software license fees indicate continued reliance on vendors.
• Creditors: Accumulated deficit and ongoing losses could be a concern, but strong cash position and positive operating cash flow provide liquidity.

Next Steps

• Continue to invest in technology innovation, product development, and platform capabilities, particularly in AI solutions.
• Expand sales and marketing efforts to acquire new customers, focusing on owners, general contractors, and specialty contractors.
• Drive additional spend from existing customers by upselling construction volume and cross-selling additional products and services.
• Expand international presence by hiring sales and customer experience teams and pursuing new geographies.
• Invest in expanding the ecosystem, developing new partnerships, and supporting more integrations.
• Pursue targeted acquisitions, especially tuck-in acquisitions from the App Marketplace, to accelerate the product roadmap.
• Discontinue the disclosure of total customer count starting in 2026, focusing on customers contributing more than $100,000 of ARR as the primary performance metric.
• Monitor and evaluate the potential impacts of the Pillar Two rules on tax obligations.
• Opportunistically repurchase shares under the $300.0 million stock repurchase program, which expires November 3, 2026.
• Incur approximately $6.6 million in severance and employee benefits charges in the first quarter of fiscal year 2026 related to the workforce reduction.

Key Dates

Recommendation

Procore demonstrates solid revenue growth and strong customer retention in its core segments, coupled with strategic investments in AI and international expansion, which are positive long-term drivers. The narrowing net losses and positive operating cash flow indicate improving financial health. However, the decelerating revenue growth rate, continued overall net losses, and the recent workforce reduction introduce elements of uncertainty. The stock repurchase program offers some support, but the overall picture suggests a 'hold' position as the company navigates its growth investments and macroeconomic headwinds towards sustained profitability.

Keywords

Construction management software, SaaS, AI, BIM, Project management, Financial management, Resource management, Preconstruction, Corporate governance, SEC filing, 10-K, Procore, PCOR, Annual report, Financial results, Stock repurchase, Acquisitions, International expansion, Cybersecurity, Data privacy, FedRAMP, Construction technology