8-K: Procore Technologies Reports 15% Revenue Increase in Q1 2025, Remains Confident in Full-Year Guidance

Procore Technologies announced a 15% year-over-year revenue increase to $311 million for Q1 2025, driven by strong customer retention and growth in annual recurring revenue.

Summary

• Procore Technologies, Inc. announced its financial results for the first quarter ended March 31, 2025.
• Revenue for Q1 2025 was $311 million, representing a 15% increase year-over-year.
• GAAP gross margin was 79%, while non-GAAP gross margin reached 83%.
• The company reported a GAAP operating margin of (12%) and a non-GAAP operating margin of 10%.
• Procore generated $66 million in operating cash inflow and $47 million in free cash inflow during the quarter.
• The gross revenue retention rate was 95% in Q1.
• The number of customers contributing more than $100,000 of annual recurring revenue totaled 2,418, a 14% increase year-over-year.
• Procore added 218 net new organic customers, bringing the total to 17,306.
• The company repurchased approximately 1.5 million shares of common stock for $100 million.
• Procore released its inaugural Future State of Construction Report.
• For Q2 2025, revenue is expected to be between $310 million and $312 million, representing 9% to 10% year-over-year growth.
• The non-GAAP operating margin for Q2 is projected to be in the range of 11% to 11.5%.
• Full-year 2025 revenue is expected to be between $1,286 million and $1,290 million, indicating 12% year-over-year growth.
• The non-GAAP operating margin for the full year is anticipated to be between 13% and 13.5%.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook with strong revenue growth and customer retention. While there are some losses, the company expresses confidence in its future performance and guidance.

Positives

• Procore experienced a 15% year-over-year increase in revenue, reaching $311 million in Q1 2025.
• The company maintained a high gross revenue retention rate of 95%.
• Procore's operating cash inflow was $66 million, and free cash inflow was $47 million for the quarter.
• The number of customers contributing over $100,000 in annual recurring revenue increased by 14% year-over-year.
• Procore's share repurchase program continues, demonstrating confidence in the company's value.

Negatives

• Procore reported a GAAP operating margin of (12%) for Q1 2025, indicating an operating loss.
• The company's net loss for the quarter was $32.989 million, or $(0.22) per share.

Risks

• The company acknowledges uncertainty related to the evolving tariff landscape.
• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.
• The company's ability to manage growth, attract new customers, and compete effectively are key risks.

Future Outlook

Procore expects Q2 2025 revenue to be in the range of $310 million to $312 million, with a non-GAAP operating margin between 11% and 11.5%. Full-year 2025 revenue is projected to be between $1,286 million and $1,290 million, with a non-GAAP operating margin between 13% and 13.5%.

Management Comments

• 'Our Q1 performance represented a positive start to the year, reflecting our measurable ROI for our customers,' said Tooey Courtemanche, Founder, President, and CEO of Procore.
• 'Our ability to help customers achieve more with less positions us well to serve them as they navigate a dynamic environment,' said Tooey Courtemanche.
• 'We are prepared to thoughtfully manage the business through the evolving tariff landscape to continuously improve our financial profile,' said Howard Fu, CFO of Procore.
• 'Even with this increased uncertainty, we remain very confident in our ability to achieve our 2025 guidance,' said Howard Fu.

Industry Context

Procore's results reflect the ongoing digitization of the construction industry and the increasing adoption of construction management software. The company's focus on AI, automation, and workforce shifts aligns with key trends shaping the industry.

Comparison to Industry Standards

• Comparing Procore's 15% revenue growth to companies like Autodesk (which serves a broader engineering and construction market) and smaller, specialized construction tech firms, Procore's growth rate is competitive.
• Autodesk's construction segment has seen growth rates in the low to mid teens, while smaller players might experience higher volatility.
• Procore's 95% gross revenue retention rate is a strong indicator of customer satisfaction and loyalty, placing it favorably against industry benchmarks where retention rates typically range from 80% to 95%.

Stakeholder Impact

• Shareholders can expect continued growth and potential value from the share repurchase program.
• Customers will benefit from Procore's focus on efficiency and risk mitigation.
• Employees can anticipate a stable and growing company with opportunities for advancement.

Next Steps

• Procore will hold a conference call on May 1, 2025, to discuss the first quarter results.
• The company will continue to execute its share repurchase program.
• Procore will focus on managing the business through the evolving tariff landscape.

Key Dates

Keywords

Procore, financial results, construction management software, revenue, operating margin, guidance, customer retention, share repurchase, Q1 2025