8-K: Procore Reports Strong Q4, Full Year 2025 Results

Procore Technologies announced robust financial results for the fourth quarter and full year ended December 31, 2025, driven by consistent revenue growth and record free cash flow.

Summary

• Revenue for the fourth quarter of 2025 was $349 million, an increase of 16% year-over-year.
• Full year 2025 revenue reached $1,323 million, up 15% year-over-year.
• GAAP gross margin was 80% and non-GAAP gross margin was 84% for both Q4 and the full year 2025.
• GAAP operating margin was (12%) for Q4 and (9%) for the full year 2025, while non-GAAP operating margin was 15% for Q4 and 14% for the full year.
• Operating cash inflow for the fourth quarter was $114 million, and $299 million for the full year 2025.
• Free cash inflow for the fourth quarter was $90 million, marking the largest free cash flow quarter in the company's history.
• Full year 2025 free cash inflow was $215 million, an increase of 69% year-over-year.
• The number of organic customers contributing more than $100,000 of annual recurring revenue (ARR) totaled 2,710 as of December 31, 2025, an increase of 16% year-over-year.
• The number of organic customers contributing more than $1,000,000 of ARR totaled 115 as of December 31, 2025, an increase of 34% year-over-year.
• Procore added 227 net new organic customers in Q4, ending with a total of 17,850 organic customers.
• Achieved a gross revenue retention rate of 95% and a net revenue retention rate of 106% for 2025.
• As of December 31, 2025, 78% of total ARR was generated from customers using four or more products, and 52% from customers using six or more products.
• The company ended 2025 with 4,421 full-time employees, a 5% increase year-over-year.
• Procore announced the acquisition of Datagrid to accelerate its AI strategy and deliver enhanced data integration.
• Achieved FedRAMP Moderate Authorization, enhancing security compliance for federal customers.
• Ron Hovsepian was appointed to Procore's Board of Directors.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong performance report, highlighted by robust revenue growth, record free cash flow, and strategic moves into AI, indicating solid operational execution and a positive outlook despite ongoing GAAP losses.

Positives

• Strong revenue growth of 16% year-over-year in Q4 2025 ($349 million) and 15% for the full year 2025 ($1,323 million).
• Achieved the largest free cash flow quarter in company history with $90 million in Q4 2025.
• Full year 2025 free cash flow increased significantly by 69% year-over-year to $215 million.
• Improved non-GAAP operating margin to 15% in Q4 2025 and 14% for the full year 2025.
• Robust growth in high-value customers, with a 16% increase in customers contributing over $100,000 ARR and a 34% increase in customers contributing over $1,000,000 ARR.
• Healthy net revenue retention rate of 106% for 2025, indicating successful expansion within existing customer accounts.
• High product adoption, with 78% of total ARR generated from customers using four or more products.
• Strategic acquisition of Datagrid is expected to accelerate AI strategy and enhance data integration for customers.
• Achieved FedRAMP Moderate Authorization, which can open new opportunities with federal government clients.
• Positive outlook for Q1 and Full Year 2026, projecting continued revenue growth and improved non-GAAP operating and free cash flow margins.

Negatives

• GAAP net loss for Q4 2025 was $(37.6) million and for the full year 2025 was $(100.8) million.
• GAAP operating margin remained negative at (12%) for Q4 and (9%) for the full year 2025.
• Stock-based compensation (SBC) was 23% of revenue in Q4 2025, inclusive of a one-time accounting charge related to the former CEO's transition, highlighting a significant non-cash expense.

Risks

• Expectations regarding financial performance, including revenues, expenses, margins, and the ability to achieve or maintain future profitability.
• Ability to effectively manage growth.
• Anticipated performance, trends, growth rates, and challenges in the business and the markets in which Procore operates or anticipates entering.
• Economic and industry trends, particularly the rate of adoption of construction management software and digitization of the construction industry, inflation, interest rates, tariffs, and challenging geopolitical or macroeconomic conditions.
• Ability to realize the expected benefits of the go-to-market transition.
• Ability to attract new customers and retain and increase sales to existing customers.
• Ability to expand internationally.
• Effects of increased competition in Procore's markets and its ability to compete effectively.
• Ability to execute and realize benefits from its stock repurchase program.
• Ability to develop and integrate new products, platform capabilities, services, and features in an efficient and timely manner and ensure customer adoption.
• Risks outlined in Procore's Annual Report on Form 10-K for the year ended December 31, 2024, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.

Future Outlook

For the first quarter of 2026, revenue is expected to be in the range of $351 million to $353 million, representing year-over-year growth of 13% to 14%, with a non-GAAP operating margin of 14% to 15%. For the full year 2026, revenue is projected to be between $1,489 million and $1,494 million, indicating 13% year-over-year growth, with a non-GAAP operating margin of 17.5% to 18% and a free cash flow margin of 19%.

Management Comments

• "We closed out a strong year with exceptional Q4 results. Procore has built an incredible franchise with amazing technology. We believe AI stands to be the next meaningful catalyst for our industry and that Procore is strongly positioned to be an AI winner as we drive immense efficiency gains across our customers and the entire construction lifecycle." Ajei Gopal, President and CEO of Procore.
• "I am proud of our Q4 performance, which delivered consistent revenue growth and the largest free cash flow quarter in the company's history. We enter 2026 with strong momentum and we are committed to driving durable growth and strong per share improvements over the long-term." Howard Fu, CFO of Procore.

Industry Context

StockSavvy.ai notes that Procore's strategic acquisition of Datagrid and emphasis on AI position it well within the broader industry trend of digital transformation and AI integration in construction management, aiming to drive efficiency across the construction lifecycle. The company's focus on increasing product adoption among existing customers aligns with a mature SaaS market strategy, indicating a strong competitive stance in a growing sector.

Comparison to Industry Standards

• No specific comparable companies, projects, or results are mentioned in the filing for direct comparison to global benchmarks.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Positive impact due to strong financial performance, increased free cash flow, and positive future outlook, potentially leading to increased share value.
• Employees: Increased headcount (5% YoY) suggests growth and stability; stock-based compensation is a significant part of compensation.
• Customers: Enhanced product offerings through AI strategy (Datagrid acquisition) and improved security compliance (FedRAMP authorization) benefit customers.
• Creditors: Strong cash flow and balance sheet (cash and cash equivalents of $480.7 million) indicate good financial health.

Next Steps

• Procore Technologies, Inc. will hold a conference call to discuss its fourth quarter and full year results on Thursday, February 12, 2026, at 2:00 p.m. Pacific Time.
• The company's financial results are preliminary and will not be final until Procore files its Annual Report on Form 10-K for the period.
• Continued execution of AI strategy following the Datagrid acquisition to drive efficiency across the construction lifecycle.
• Commitment to driving durable growth and strong per share improvements over the long-term.

Key Dates

Recommendation

Procore delivered strong Q4 and full-year 2025 results, exceeding expectations with robust revenue growth and record free cash flow. The strategic acquisition of Datagrid and clear focus on AI position the company for future innovation and market leadership in construction technology. The positive 2026 outlook for revenue and margins, coupled with strong customer retention and expansion, indicates continued operational strength and potential for significant long-term value creation, making it a compelling investment.

Keywords

Procore, PCOR, financial results, Q4 2025, full year 2025, construction management software, SaaS, revenue, free cash flow, AI, Datagrid acquisition, FedRAMP, earnings, outlook, software, technology, construction tech