10-Q: Procore Technologies Reports Q1 2026 Financial Results

Procore Technologies, Inc. announced its first quarter 2026 financial results, showing a 16% increase in revenue and improved operating margins.

Summary

• Procore Technologies reported revenue of $359.3 million for the first quarter ended March 31, 2026, a 16% increase compared to $310.6 million in the same period last year.
• Gross profit increased by 17% to $287.8 million, with gross margin improving to 80% from 79% year-over-year.
• Operating expenses increased to $303.5 million from $282.0 million, leading to a loss from operations of $15.7 million, an improvement from a loss of $36.2 million in Q1 2025.
• The company reported a net loss of $9.1 million for the quarter, an improvement from a net loss of $33.0 million in the prior year's first quarter.
• Cash, cash equivalents, and marketable securities totaled $591.5 million as of March 31, 2026.
• The company completed the acquisition of Datagrid for $168.0 million in January 2026 to accelerate its AI strategy.
• Procore Technologies repurchased $100.0 million of its common stock during the quarter under its $300.0 million repurchase program.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report with solid revenue growth and significant improvements in profitability metrics, though the continued net loss and ongoing legal proceedings present some caution.

Positives

• Revenue increased by 16% to $359.3 million year-over-year.
• Gross profit increased by 17% to $287.8 million.
• Gross margin improved to 80% from 79% year-over-year.
• Loss from operations improved significantly to $15.7 million from $36.2 million in the prior year.
• Net loss narrowed to $9.1 million from $33.0 million in the prior year.
• Current Remaining Performance Obligations (cRPO) increased by 21% to $1.02 billion.
• Number of customers contributing over $100,000 in ARR increased by 16% to 2,795.
• Gross retention rate (GRR) remained strong at 95%.

Negatives

• The company reported a net loss of $9.1 million for the quarter.
• Operating expenses increased by $21.5 million year-over-year, primarily driven by increases in general and administrative expenses.
• The company incurred $6.3 million in restructuring costs related to a 4% workforce reduction in January 2026.

Risks

• The company faces ongoing legal proceedings, including a trade secret misappropriation lawsuit filed by Oracle America, Inc.
• Macroeconomic factors such as inflation, changing interest rates, and geopolitical events may impact customer spending and operating expenses.
• The company's ability to attract new customers, retain existing ones, and expand their use of products is critical and subject to market conditions and competition.
• The company's future success depends on its ability to successfully develop or acquire, market, and sell existing and new products and services.
• International expansion presents challenges related to multiple languages, currencies, cultures, and differing legal and tax systems.

Future Outlook

The company plans to continue investing in technology innovation and product development, including Procore AI, to enhance its platform capabilities and attract a broader set of stakeholders. International expansion is viewed as a major growth opportunity. While investments in international markets may adversely affect operating results in the near term, they are expected to contribute to long-term growth. The company believes its existing cash, cash equivalents, and marketable securities will be sufficient for at least the next 12 months, but may require additional capital for strategic initiatives.

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 these investments have allowed, and will continue to allow, us to build stronger and deeper customer relationships and provide additional value to our customers."
• "Despite macroeconomic challenges, we have seen an increase in the number of customers that contributed more than $100,000 of annual recurring revenue ('ARR'), which increased from 2,418 as of March 31, 2025 to 2,795 as of March 31, 2026, reflecting a year-over-year growth rate of 16%."
• "We believe our high GRR demonstrates that we serve a vital role in our customers operations, as the vast majority of our customers continue to use our products and platform and to renew their subscriptions."
• "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."

Industry Context

StockSavvy.ai notes that Procore's focus on digitizing the construction industry aligns with broader trends of technology adoption in traditionally less-digitized sectors. The acquisition of Datagrid signals a strategic push into AI, a key area of development across the software industry, aiming to enhance data connectivity and analytical capabilities within construction management.

Comparison to Industry Standards

• Procore's gross retention rate (GRR) of 95% is a strong indicator of customer loyalty and product stickiness, often considered a benchmark for SaaS companies.
• The 16% year-over-year revenue growth is solid, though it may be considered moderate compared to hyper-growth SaaS companies, but is robust given the scale of Procore and the maturity of its market segment.
• The improvement in non-GAAP operating margin to 17% from 10% year-over-year demonstrates effective cost management and operational leverage, which is a positive sign in the SaaS industry.

Legal Proceedings

• Oracle America, Inc. filed a lawsuit alleging misappropriation of trade secrets related to Procore Pay, currently in the expert discovery phase. Procore intends to vigorously defend itself.

Stakeholder Impact

• Shareholders: The report shows improved financial performance and a narrowed net loss, with a stock repurchase program in place, which could be positive for shareholder value. However, the continued net loss and legal risks warrant consideration.
• Employees: The company executed a workforce reduction of 4% in January 2026, impacting a portion of its global workforce.
• Customers: Procore's continued investment in its platform and AI aims to provide enhanced value and collaboration tools for construction stakeholders.
• Suppliers: No specific impact mentioned, but increased operational scale may lead to increased procurement activities.

Next Steps

• Continue to invest in technology innovation and product development, including Procore AI.
• Expand international sales and marketing efforts.
• Evaluate strategic acquisitions and investments.
• Opportunistically repurchase shares under the stock repurchase program.

Key Dates

Recommendation

The company demonstrates consistent revenue growth and improving operational efficiency, narrowing its net loss. However, the ongoing net loss, significant operating expenses, and a material legal proceeding (Oracle lawsuit) introduce considerable risk. While the strategic acquisition of Datagrid and focus on AI are positive, the path to consistent profitability and resolution of legal matters requires further observation. Therefore, a 'hold' recommendation is appropriate, balancing the growth potential with the existing risks.

Keywords

Procore Technologies, Form 10-Q, Quarterly Report, Construction Software, Cloud-based Platform, Revenue Growth, Net Loss, Operating Expenses, Acquisition, Datagrid, AI, Stock Repurchase