Sign in
PT

PROCORE TECHNOLOGIES, INC. (PCOR)·Q2 2025 Earnings Summary

Executive Summary

  • Procore delivered a solid Q2: revenue $323.9M (+14% YoY) and non-GAAP operating margin 13%; GAAP operating margin was -9% with non-GAAP diluted EPS $0.35 .
  • Results beat Wall Street consensus on both revenue (+$11.7M) and non-GAAP EPS (+$0.09); FY25 revenue guidance was raised to $1.299–$1.302B while full-year non-GAAP margin guidance was maintained at 13–13.5% . Consensus values from S&P Global: revenue $312.3M*, EPS $0.262*.
  • Management highlighted improved cross-sell (mix shifted to ~30% vs. historic ~20%) and strong large-deal activity, with six- and seven‑figure deals up 21% YoY; CRPO growth benefited from longer contract durations and should normalize by Q4 .
  • Product and public sector catalysts: introduction of AI intelligence layer (Helix, Agent Builder, Developer Studio), BIM capability expansion via Novorender and FlyPaper acquisitions, and FedRAMP “In Process” designation for Procore for Government .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and margin execution: revenue +14% YoY to $323.9M; non-GAAP operating margin 13% with non-GAAP operating income $43.7M .
  • Cross-sell momentum: expansion mix shifted to ~70/30 (volume/cross-sell) from historic ~80/20, driven primarily by financials attach; large-deal activity strong (+21% YoY) .
  • Strategic product progress: unveiled Procore Helix, Agent Builder, and Developer Studio; “We remain well positioned for efficient growth” — Tooey Courtemanche, CEO .

What Went Wrong

  • GAAP profitability remains negative: GAAP operating margin -9% and GAAP diluted EPS -$0.14; free cash flow softened to $10.6M in Q2 vs Q1 seasonality .
  • FX headwinds: international revenue +13% YoY reported but +16% YoY constant currency (≈3pt FX headwind); management maintained margin guide with conservatism due to FX .
  • Sequential cash flow decline: operating cash flow fell to $30.8M from $66.0M in Q1; management emphasized quarterly noise and full-year FCF margins tracking non-GAAP operating margins .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$284.347 $310.632 $323.919
GAAP diluted EPS ($USD)-$0.04 -$0.22 -$0.14
Non-GAAP diluted EPS ($USD)$0.39 $0.23 $0.35
GAAP Gross Margin (%)83% 79% 79%
Non-GAAP Gross Margin (%)87% 83% 83%
GAAP Operating Margin (%)-5% -12% -9%
Non-GAAP Operating Margin (%)18% 10% 13%
Cash from Operations ($USD Millions)$58.695 $66.028 $30.828
Free Cash Flow ($USD Millions)$46.603 $46.664 $10.627

Actuals vs. Wall Street Consensus (S&P Global)

MetricQ2 2025 Consensus*Q2 2025 ActualSurprise
Revenue ($USD Millions)$312.268*$323.919 +$11.651 (beat)
Non-GAAP diluted EPS ($USD)$0.262*$0.35 +$0.088 (beat)

Values retrieved from S&P Global*.

KPIs and Backlog

KPIQ4 2024Q1 2025Q2 2025
Customers >$100k ARR (count)2,333 2,418 2,517 (+15% YoY)
Net New Organic Customers (quarter)113 218 195
Total Organic Customers (end of period)17,088 17,306 17,501
Gross Revenue Retention (%)94% (FY 2024) 95% 95%
Current RPO ($USD Millions)—$842.558 $879.489 (+21% YoY)
Non-current RPO ($USD Millions)—$447.707 $464.268 (+50% YoY)
Total RPO ($USD Millions)—$1,290.265 $1,343.757 (+30% YoY)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)FY 2025$1.286–$1.290 $1.299–$1.302 Raised
Non-GAAP Operating Margin (%)FY 202513%–13.5% 13%–13.5% Maintained
Revenue ($USD Millions)Q3 2025N/A$326–$328 (YoY +10–11%) New
Non-GAAP Operating Margin (%)Q3 2025N/A13%–13.5% New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
AI/Technology initiativesGroundbreak launches: AI Agents, Scheduling, Safety ; Future State of Construction report (AI/automation) Introduced Helix (intelligence layer), Agent Builder, Developer Studio; early customer pilots and strong demand Accelerating
Go-to-market transition—On track; improved pipeline conversion, deal cycles; seller productivity up; disruption peak passed Improving
Cross-sell vs. volume mixHistoric expansion ~80/20 volume/cross-sell Shifted to ~70/30, led by financials attach Cross-sell increasing
Macro/tariffs“Prepared to thoughtfully manage… evolving tariff landscape” Macro stable vs. last quarter; customers resilient; tariffs are “issue du jour” Unchanged
Large-deal activity—6–7 figure deals +21% YoY; Q2 not typically heavy large‑deal quarter Strengthening; pulled forward
International & FX—International +13% YoY reported; +16% constant currency (~3pt FX headwind) Mild headwind
Public sector—FedRAMP “In Process,” listed on marketplace; Procore for Government (Moderate target) Strengthening
BIM & 3D modeling—Acquisitions of Novorender and FlyPaper to supercharge BIM and clash detection Enhanced capabilities

Management Commentary

  • “Q2 represented another solid quarter and we remain well positioned for efficient growth.” — Tooey Courtemanche, CEO .
  • “We remain committed to profitability improvement and we see opportunities for continued margin expansion while not compromising our growth opportunities.” — Howard Fu, CFO .
  • On AI: “We introduced Procore Helix… Agent Builder… Developer Studio… we are reimagining the way that owners plan, build, and operate.” — CEO prepared remarks .
  • On margins/Rule of 40: “We are maintaining our operating margin guide… we are on track for another year of solid operating margin improvement… path to 25% medium-term and 40% long-term FCF margins.” — CFO .

Q&A Highlights

  • Cross-sell momentum: Technical specialists and platform roadmap driving higher financials attach; mix shifted to ~70/30; not due to weaker volume .
  • Free cash flow: Quarterly noise; full-year FCF margin expected roughly in line with non-GAAP operating margin .
  • Macro/tariffs: Customer resilience; limited incremental macro change vs. Q1; tariffs manageable .
  • CRPO dynamics: Benefiting from longer durations; normalization expected by Q4, mid‑teens growth normalized .
  • Large deals: Typically back-half weighted, but Q2 showed strength as go-to-market focus on upper end progresses .
  • Packaging pilots: Early “good/better/best” pilots to streamline sales; no impact on Q2 performance .

Estimates Context

  • Q2 2025 revenue beat consensus by ~$11.7M and non-GAAP diluted EPS beat by ~$$0.09; both outcomes likely support near-term sentiment and estimate revisions higher for EPS . Consensus values from S&P Global: revenue $312.3M*, EPS $0.262*.
  • Q3 2025 revenue guidance ($326–$328M) brackets consensus ($328.1M*), implying a largely aligned top-line cadence; FY25 revenue guidance ($1.299–$1.302B) sits modestly below FY25 consensus ($1.314B*), suggesting potential modest downward consensus revenue adjustments unless outperformance continues . Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Solid execution with balanced revenue growth and non-GAAP margin expansion; beats on revenue and EPS plus raised FY revenue guidance are positive catalysts .
  • Cross-sell acceleration (financials attach) and strong large-deal activity point to healthier mix and improving sales efficiency into H2’25 .
  • FX remains a watch item (3pt headwind on international), but management is keeping a conservative margin posture while still expanding .
  • CRPO growth elevated by contract duration; expect convergence with out-quarter revenue by Q4 — important for modeling billings/backlog .
  • Public sector opportunity strengthening (FedRAMP “In Process”); monitor timing for Moderate authorization and Procore for Government ramp .
  • AI roadmap (Helix, Agent Builder, Developer Studio) and enhanced BIM (Novorender/FlyPaper) deepen product moat and may drive higher platform attach over time .
  • Near-term: Favor constructive stance into Q3 on cross-sell momentum and pipeline conversion; medium-term thesis hinges on sustained margin expansion, improving Rule of 40, and public sector traction .
Note: Values retrieved from S&P Global* for consensus metrics.