Procore Technologies, Inc. Q2 FY2025 earnings call

• Revenue grew 14% year-over-year. Non-GAAP operating margins increased quarter-over-quarter to 13%. • Strong quarter for large deals with 6- and 7-figure deals growing 21% year-over-year, resulting in over 2,500 customers contributing >$100,000 in ARR. • Highlights from Annual Innovation Summit: Introduced Procore Helix, Agent Builder, developer studio; reimagining owner planning/operation with owner portfolio hub; acquisitions of Novorender and FlyPaper. • Significant customer wins across sectors including Calpine Corporation, Clayco, a leading U.S. egg producer, and global expansions with ENR 10 Hit Contracting Inc. and a Fortune 150 utility holding company.

Total revenue in Q2 was $324 million, up 14% year-over-year. International revenue grew 13% year-over-year but was impacted by currency headwinds; on a constant currency basis, international revenue grew 16% year-over-year. Q2 non-GAAP operating income was $44 million, representing a non-GAAP operating margin of 13%. Current RPO grew 21% year-over-year, and current deferred revenue grew 13% year-over-year.

• Q3 2025 revenue expected between $326 million and $328 million, representing year-over-year growth of 10% to 11%. Q3 non-GAAP operating margin expected to be between 13% and 13.5%. • Full year fiscal '25 revenue guide raised to a range of $1.299 billion to $1.302 billion, representing total year-over-year growth of 13%. Non-GAAP operating margin guidance for the year is between 13% and 13.5%, implying year-over-year margin expansion between 300 and 350 basis points.

• Discussion of macroeconomic and geopolitical conditions as external factors not in control, but no detailed specific risks highlighted in depth.

Q: Dylan Becker asked about customer conversations around AI adoption and Procore as the core system of record.

A: Tooey Courtemanche and Howard Fu responded that customers are bringing unique challenges to build agents on the platform, adoption is expected to grow as value is demonstrated, and Procore is seen as the system of record as customers need data to get jobs done.

Q: Saket Kalia asked about the path to Rule of 40 and margin expansion.

A: Craig Courtemanche and Howard Fu explained that improvement in Rule of 40 for next year will be driven by profitability, with margin expansion being key and revenue for fiscal '26 not yet discussed in detail.

Q: Joseph Vruwink asked about Rule of 40 expectation for next year.

A: Howard Fu stated improvement in Rule of 40 will be driven by profitability, and revenue for fiscal '26 is too early to discuss.

Q: David Hynes asked about confidence in cross-sell being due to go-to-market model working.

A: Howard Fu and Craig Courtemanche responded that cross-sell improvement is due to technical specialists, go-to-market changes, and product road map progress.

Q: Daniel Jester asked about macro environment impact.

A: Craig Courtemanche said macro environment was similar to last quarter.

Q: Taylor McGinnis asked about CRPO trajectory.

A: Howard Fu explained CRPO growth was in mid-teens, normalized for contract durations, and convergence with revenue growth expected in 4Q.

Q: Jason Celino asked about large deal activity.

A: Howard Fu said larger deals were a progression of ongoing efforts to target upper end of market.

Q: Ken Wong asked about impact of OBVA on customers.

A: Craig Courtemanche and Howard Fu stated customer conversations focused on optimizing business and productivity, with little mention of OBVA impact as they have resilience built in.