CARPINTERIA, Calif. — (BUSINESS WIRE) — August 2, 2023 — Procore Technologies, Inc. (NYSE: PCOR), a leading global provider of construction management software, today announced financial results for the second quarter ended June 30, 2023.

“I’m proud of the results we delivered this quarter as we continued to work toward our vision of improving the lives of everyone in construction,” said Tooey Courtemanche, founder, president and CEO of Procore. “We’re delivering solutions that help the construction industry find valuable efficiencies in an uncertain environment. I am excited to showcase what digital and cultural transformation means for the industry at large at Groundbreak 2023.”

“Although the demand environment remains challenging, we delivered solid results in the second quarter, highlighted by continued growth on the topline and improving operating leverage,” said Howard Fu, CFO of Procore. “Looking ahead, we remain focused on our pursuit of efficient growth and are on track to reach positive and sustainable free cash flow this year. We look forward to sharing more at our upcoming Investor Day.”

Second Quarter 2023 Financial Highlights:

• Revenue was $229 million, an increase of 33% year-over-year.
• GAAP gross margin was 81% and non-GAAP gross margin was 85%.
• GAAP operating margin was (26%) and non-GAAP operating margin was (1%).
• Operating cash outflow for the second quarter was $12 million.
• Free cash outflow for the second quarter was $24 million.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Recent Business Highlights:

• Added 615 net new organic customers in the second quarter, ending with a total of 15,704 organic customers.
• Achieved a gross revenue retention rate of 94% in the second quarter.
• In the G2 2023 Summer Report, Procore maintained its #1 ranking across 11 categories, including construction project management, jobsite management, bid management, construction estimating, construction accounting, and more.
• Announced partnership with The B1M, a leading construction video channel, to raise awareness about mental health in the construction industry through a global campaign, "Get Construction Talking."

Third Quarter and Full Year 2023 Outlook:

Procore is providing the following guidance for the third quarter and full year 2023:

• Third Quarter 2023 Outlook:
  • Revenue is expected to be in the range of $232 million to $234 million, representing year-over-year growth of 24% to 26%.
  • Non-GAAP operating margin is expected to be in the range of (6%) to (5%).
• Full Year 2023 Outlook:
  • Revenue is expected to be in the range of $921 million to $924 million, representing year-over-year growth of 28%.
  • Non-GAAP operating margin is expected to be in the range of (4.5%) to (4%).

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future and cannot be reasonably determined or predicted at this time, although it is important to note that these factors could be material to Procore’s future GAAP financial results.

Quarterly Conference Call

Procore Technologies, Inc. will hold a conference call to discuss its second quarter results at 2:00 p.m., Pacific Time, on Wednesday, August 2, 2023. A live audio webcast will be accessible on Procore's investor relations website at http://investors.procore.com.

September 20, 2023 Investor Day

Procore Technologies, Inc. will host its 2023 Investor Day on Wednesday, September 20, 2023 from 9:00 a.m. to 12:00 p.m., Central Time. The event will be held in-person in conjunction with Groundbreak 2023, Procore’s leading construction technology conference, taking place at the McCormick Place Conference Center in Chicago, Illinois.

A live webcast of the event will begin at 9:00 a.m., Central Time, on September 20, 2023. Interested parties can access the webcast by registering here. A replay of the webcast will also be made available on Procore's investor relations website at http://investors.procore.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, about Procore and its industry that involve substantial risks and uncertainties. All statements in this press release, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or future financial or operating performance, and may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these words, or other similar terms or expressions that concern Procore’s expectations, strategy, plans, or intentions.

Procore has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends that Procore believes may affect its business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors that could cause results to differ materially from Procore’s current expectations, including, but not limited to, our expectations regarding our financial performance (including revenues, expenses, and margins, and our ability to achieve or maintain future profitability), our ability to effectively manage our growth, anticipated performance, trends, growth rates, and challenges in our business and in the market in which we operate or anticipate entering into, economic and industry trends (in particular, the rate of adoption of construction management software and digitization of the construction industry, inflation, and challenging geopolitical conditions), our ability to attract new customers and retain and increase sales to existing customers, our ability to expand internationally, the effects of increased competition in our markets and our ability to compete effectively, our estimated total addressable market, and as set forth in Procore’s filings with the Securities and Exchange Commission. You should not place undue reliance on Procore’s forward-looking statements. Procore assumes no obligation to update any forward-looking statements to reflect events or circumstances that exist or change after the date on which they were made, except as required by law.

Non-GAAP Financial Measures

Procore believes that the use of certain non-GAAP financial measures as described below, when taken collectively, is helpful to investors because it provides consistency and comparability with past financial performance, and may assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. These non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles, or GAAP.

Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Loss from Operations, Non-GAAP Operating Margin, Non-GAAP Net Income (Loss), and Non-GAAP Net Income (Loss) per Share: Procore defines these non-GAAP financial measures as the respective GAAP measures, excluding stock-based compensation expense, amortization of acquired intangible assets, employer payroll tax related to employee stock transactions, acquisition-related expenses, and the income tax effect of non-GAAP items. Non-GAAP gross margin is the ratio calculated by dividing non-GAAP gross profit by total revenue. Non-GAAP operating margin is the ratio calculated by dividing non-GAAP loss from operations by total revenue. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Non-GAAP diluted earnings per share is computed by giving effect to all potential weighted average dilutive common stock equivalents outstanding for the period, including options to purchase common stock, restricted stock units, and shares to be issued pursuant to the employee stock purchase plan. The dilutive effect of outstanding awards is reflected in non-GAAP diluted earnings per share by application of the treasury stock method.