PROCORE TECHNOLOGIES, INC. (PCOR)·Q3 2025 Earnings Summary

Executive Summary

• Q3 delivered a clean top-line and EPS beat with revenue of $338.9M vs S&P Global consensus $328.1M and non-GAAP diluted EPS of $0.42 vs $0.32; non-GAAP operating margin expanded to 17% from 13% in Q2, aided by mix and some one-time G&A benefits . Revenue Consensus: $328.1M*, EPS Consensus: $0.323*, EBITDA Consensus: $67.3M*.
• FY 2025 guidance was raised: revenue to $1.312B–$1.314B and non-GAAP operating margin to 14% (prior $1.299B–$1.302B and 13%–13.5%), signaling improved confidence in growth durability and margin trajectory .
• Q4 guide implies 12%–13% y/y growth with non-GAAP operating margin ~14.4%; management highlighted net new ARR growth outpacing revenue, large-deal strength, and longer contract durations supporting CRPO .
• Strategic updates and catalysts: announced a new $300M buyback (after ~$129M YTD repurchases), CEO transition to Ajei Gopal (Ansys pedigree), and AI product momentum (Assist, Agent Builder, AWS collaboration), all likely to underpin sentiment and multiple stability .

What Went Well and What Went Wrong

What Went Well

• Broad-based execution: net new ARR grew “notably faster” than revenue, strong owner and specialty contractor motions, and improved cross-sell; large six- and seven-figure deals accelerated 31% y/y .
• Margin expansion: non-GAAP operating margin reached 17% in Q3 (from 13% in Q2; 10% in Q1), with continued leverage and one-time G&A tailwinds; free cash flow of $67.7M, +194% y/y .
• AI and platform leadership: at Groundbreak, Procore rolled out agentic AI roadmap (Assist, Agent Builder), cited unmatched proprietary construction data; AWS collaboration and FedRAMP “Moderate Equivalency” designation broaden market reach .

Management quote: “We have built an unrivaled platform... well-positioned to harness the power of AI for our customers, and our go-to-market model is yielding positive returns.” — CEO Tooey Courtemanche .

What Went Wrong

• Macro remains a headwind: combined U.S. non-residential and multifamily sectors posted -2% growth; management cautioned lead-times before a turn shows up in revenue .
• FX pressure internationally: Q3 international revenue grew 14% y/y, but FX was a ~1pt headwind; constant currency +15% .
• EBITDA optics vs Street: S&P Global’s EBITDA actual appears well below consensus, reflecting methodology differences vs company’s preferred non-GAAP operating margin framework; this could create confusion in models*. Actual EBITDA: $15.2M*, vs consensus $67.3M*.

Financial Results

Quarterly progression vs prior quarters

Year-over-year comparison

Q3 vs S&P Global consensus (beats)

Values with asterisk retrieved from S&P Global.

KPIs and backlog progression

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Q3 represented another strong quarter, marked by consistent revenue growth and improved operating leverage.” — CFO (press release) .
• “Procore reached… surpassing $1 trillion in annual construction volume contracted to our platform” — CEO Tooey Courtemanche (prepared remarks) .
• “Net new ARR growth… notably faster than revenue growth… Non-GAAP operating margin increased 380 bps q/q” — SVP Finance Matt Puljiz .
• “We announced new AI innovations including expanded features for Procore Assist and Open Beta release for Procore Agent Builder” — press release .
• “Board authorized a new $300M stock repurchase program… expires Nov 3, 2026” — 8-K .

Q&A Highlights

• ARR momentum and future growth: Net new ARR outpaced revenue; base case growth intact; optimism for Q4 delivery .
• Backlog/renewals and CRPO: Healthy renewals; longer average contract duration boosts reported CRPO; normalized growth aligns with revenue/ARR .
• NRR framework: Churn stable; expansion improving; pooled contracts carry 100% NRR headwind to reported NRR metric .
• Pricing & packaging pilot: Stakeholder-focused bundles simplify adoption; not expected to materially change near-term financial trajectory .
• Data centers and competitive landscape: Exposure is strong but small part of construction; feedback at Groundbreak centered on Procore innovation more than competitors .

Estimates Context

• Q3 beats vs S&P Global: Revenue $338.9M vs $328.1M*, Primary EPS $0.42 vs $0.323*, both clear beats; EBITDA actual $15.2M* vs $67.3M* reflects methodology differences vs company’s preferred non-GAAP operating metrics .
• Q4 setup: Consensus revenue $340.8M* aligns with guide $339M–$341M; consensus EPS $0.356* vs implied non-GAAP OM of ~14.4% suggests modest operating leverage continuity .
• Street context: Target price consensus ~$86.44* (18 estimates*). Values retrieved from S&P Global.

Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

• Strong execution with tangible beats and rising FY guide; margin expansion is compounding and supported by go-to-market improvements and scale .
• Backlog quality improving with longer terms and healthy renewals; expect CRPO normalization to align with revenue/ARR into Q4 as duration anniversaries .
• AI roadmap and AWS collaboration deepen platform moat; early customer enthusiasm can drive cross-sell and stickiness, supporting mix and margins .
• Capital allocation turning more shareholder-friendly: ~$129M repurchased YTD and new $300M program; dilution contained (~1% y/y) .
• Near-term trading lens: clear beat/raise quarter, CEO transition to a proven operator, and buyback authorization are positive catalysts; watch Q4 conversion and any macro inflection signals .
• Medium-term thesis: durable growth premium to end-market, expanding non-GAAP margins (FY 2025 to 14%) with free cash flow per-share focus; monitor FX and macro, and potential EBITDA definition variances in consensus models .
• Risk checks: construction cycle timing uncertainty, FX headwinds, and pooled-contract impacts on reported NRR; methodology differences for EBITDA could drive modeling dispersion* .

Notes:
- Values with asterisk retrieved from S&P Global.