Procore Technologies, Inc. Q3 FY2025 earnings call

• Revenue growth was 14.5% year-over-year, consistent with the previous quarter.
• Non-GAAP operating margins increased to 17% quarter-over-quarter.
• Large deals: Number of 6- and 7-figure deals accelerated 31% year-over-year, with over 2,600 customers having $100,000+ ARR.
• Announced Ajei Gopal as next CEO, effective November 10; Tooey to focus on Chair role.
• Procore reached $1 trillion in annual construction volume contracted on its platform.
• Platform strength and AI innovations discussed at Groundbreak conference.
• New customer wins across various stakeholders, including large defense contractors, general contractors, and real estate firms.
• Go-to-market model yielding benefits with higher pipeline conversion, improved expansion rates, and lower sales headcount attrition.

Total revenue in Q3 was $339 million, up 14.5% year-over-year. International revenue grew 14% year-over-year, impacted by currency headwinds but 15% on constant currency basis. Non-GAAP operating margin was 17% in Q3. Current RPO grew 23% year-over-year and current deferred revenue grew 14% year-over-year. Revenue contribution by product segment not specifically broken down, but overall revenue and margin details are as stated.

• Q4 2025: Expected revenue between $339 million and $341 million, +12% to 13% year-over-year; non-GAAP operating margin expected at 14.4%.
• Full-year fiscal '25: Raised revenue guide to $1.312 billion to $1.314 billion, +14% year-over-year; raised non-GAAP operating margin guidance to 14%, +400 basis points year-over-year.
• Fiscal '26: Generally comfortable with Street's revenue estimates, no update yet as Ajei is starting next week and needs time to onboard.

• Macro and geopolitical conditions could impact financial outlook.
• Dependence on cyclical construction industry cycles.
• Competition in the construction software space could affect market share.

Q: DJ Hynes asks about end market demand turning point starting with owners and what's seen in that segment.

A: Craig Courtemanche says macro headwinds continue but owners are a good indicator, expecting a tailwind when the cycle turns.

Q: David Hynes asks about net new ARR growth being faster than revenue growth and portending revenue growth acceleration.

A: Matthew Puljiz says they're operating within the base case, confident in growth.

Q: Brent Thill asks about cRPO growth and factors.

A: Matthew Puljiz and Craig Courtemanche discuss cRPO drivers like category leadership, go-to-market motion, and longer contract duration.

Q: Jason Celino asks about pricing and packaging adjustments.

A: Matthew Puljiz talks about pilot with bundled packages, positive feedback on simplicity.

Q: Joshua Tilton asks about Ajei's potential impact and margin expansion.

A: Matthew Puljiz says Ajei is a credible operator, guiding for margin expansion and flexibility for him to set next year's plan.

Q: Ken Wong asks about customer feedback on competition at Groundbreak.

A: Craig Courtemanche says no talk of competitors, positive feedback on Procore's achievements and AI.

Q: Will Hancock asks about macro environment and 4Q guide.

A: Matthew Puljiz and Craig Courtemanche discuss steady macro headwinds but optimism, and confidence in 4Q guide.