PROCORE TECHNOLOGIES, INC. Q1 FY2025 earnings call

• Q1 was a solid start with 15% revenue growth, 10% non-GAAP operating margins, and over 2,400 customers with ARR > $100k. • Focus on platform capabilities to connect stakeholders, using AI agents for productivity and risk reduction. • Customer wins across segments, including an ENR 250 specialty contractor, Workday, a major social media platform, and the Iowa Army National Guard. • Go-to-market transition is underway, with early milestones completed and positive reception from teams, customers, and partners. • CEO succession plan initiated, with search for successor ongoing.

Procore's Q1 performance was solid. Revenue grew 15% year-over-year. Non-GAAP operating margins increased to 10%. There are over 2,400 customers contributing greater than $100,000 in ARR. International revenue grew 18% year-over-year, but with FX headwinds, constant currency growth was 20%. Current RPO grew 20% year-over-year and current deferred revenue grew 15% year-over-year.

• Second quarter 2025 revenue expected between $310 million and $312 million, representing year-over-year growth of 9% to 10%. Non-GAAP operating margin expected to be between 11% and 11.5%. • Full year 2025 revenue guidance maintained at $1.286 billion to $1.29 billion, representing 12% year-over-year growth. Non-GAAP operating margin guidance is between 13% and 13.5%, implying year-over-year margin expansion between 300 basis points and 350 basis points.

• Uncertainty regarding tariff policies and their potential impact on customers' behavior, project costs, and demand. There's a risk that prolonged tariffs could lead to project delays or cancellations if costs rise too significantly.

Q: Saket Kalia with Barclays asked about CRPO acceleration, drivers of new logos vs net revenue retention, and when non-current RPO normalization might occur.

A: Howard Fu responded that strong new logo quarter contributed, longer contract durations from pooled models drove duration increase, with normalization likely in Q4.

Q: Dylan Becker with William Blair asked about go-to-market transition's impact on strategic partnerships and AI opportunity.

A: Tooey Courtemanche said Procore shines as a partner during challenges, and AI leverages unique data corpus for productivity tools.

Q: Joe Vruwink with Baird asked about customer growth metrics and impact of tariffs on financial/resource management solutions.

A: Tooey Courtemanche stated focus on dollar volume from customers with over $100k ARR, and no material change seen in interest for financial solutions yet.

Q: Brent Bracelin with Piper Sandler asked about customer growth metrics and impact of longer contract durations on rev rec.

A: Tooey Courtemanche talked about focus on dollar volume, and Howard Fu explained longer durations don't impact rev rec.

Q: Matt Martino with Goldman Sachs asked about Procore's value prop in deflationary environment and AI opportunity.

A: Tooey Courtemanche said Procore's unique vantage with construction data enables productivity tools.

Q: DJ Hynes with Canaccord asked about go-to-market transition learnings and sales and marketing OpEx.

A: Tooey Courtemanche and Howard Fu discussed learnings in transition and OpEx being impacted by one-time items.

Q: Adam Borg with Stifel asked about size of opportunity in existing customers and gross margin color.

A: Tooey Courtemanche said opportunity in accounts with old/inefficient systems, and Howard Fu explained gross margin tick down was due to P&L shifts.

Q: Jason Celino with KeyBanc Capital Markets asked about duration update drivers and guidance philosophy.

A: Howard Fu explained longer durations from customer pool models, and guidance is conservative to withstand demand declines.