CARPINTERIA, Calif. — (BUSINESS WIRE) — February 15, 2024 — Procore Technologies, Inc. (NYSE: PCOR), the leading global provider of construction management software, today announced financial results for the fourth quarter and full year ended December 31, 2023.

“2023 was a year of milestones at Procore as we surpassed $1B in total annual recurring revenue, reaffirmed our status as one of the best places to work in technology, and delivered numerous innovations on the platform,” said Tooey Courtemanche, Founder and CEO of Procore. “Our continued evolution leaves me optimistic about our ability to achieve our vision of improving the lives of everyone in construction.”

“Procore remains committed to continuously improving how we operate across all aspects of the business," said Howard Fu, CFO of Procore. "This resulted in significant margin improvement in 2023, setting a strong foundation for our next phase of efficient growth.”

Fourth Quarter 2023 Financial Highlights:

• Revenue was $260 million, an increase of 29% year-over-year.
• GAAP gross margin was 82% and non-GAAP gross margin was 85%.
• GAAP operating margin was (14%) and non-GAAP operating margin was 7%.
• Operating cash inflow for the fourth quarter was $41 million.
• Free cash inflow for the fourth quarter was $29 million.

Full Year 2023 Financial Highlights:

• Revenue was $950 million, an increase of 32% year-over-year.
• GAAP gross margin was 82% and non-GAAP gross margin was 85%.
• GAAP operating margin was (23%) and non-GAAP operating margin was 2%.
• Operating cash inflow for 2023 was $92 million.
• Free cash inflow for 2023 was $47 million.

The financial results included in this press release are preliminary and will not be final until Procore files its Annual Report on Form 10-K for the period. 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:

• Number of organic customers contributing more than $100,000 of annual recurring revenue totaled 2,008 as of December 31, 2023, an increase of 27% year-over-year.
• Number of organic customers contributing more than $1,000,000 of annual recurring revenue totaled 62 as of December 31, 2023, an increase of 32% year-over-year.
• Added 300 net new organic customers in the fourth quarter, ending with a total of 16,367 organic customers.
• Achieved a gross revenue retention rate of 95% for 2023.
• Achieved a net revenue retention rate of 114% for 2023.
• As of December 31, 2023, 74% of total annual recurring revenue was generated from customers using four or more products.
• As of December 31, 2023, 45% of total annual recurring revenue was generated from customers using six or more products.
• Ended 2023 with 3,694 full-time employees, an increase of 4% year-over-year.
• Ranked #5 on Glassdoor’s 100 Best Places to Work in 2024.

Leadership Updates:

Procore announces the appointment of Larry Stack as Chief Revenue Officer. In this role, Stack will lead Procore’s Global Sales and Customer Success organizations and will be responsible for Procore’s revenue growth strategy. He will report to Procore Founder, President and CEO Tooey Courtemanche.

First Quarter and Full Year 2024 Outlook:

Procore is providing the following guidance for the first quarter and full year 2024:

• First Quarter 2024 Outlook:
  • Revenue is expected to be in the range of $262 million to $264 million, representing year-over-year growth of 23% to 24%.
  • Non-GAAP operating margin is expected to be in the range of 7% to 8%.
• Full Year 2024 Outlook:
  • Revenue is expected to be in the range of $1,137 million to $1,142 million, representing year-over-year growth of 20%.
  • Non-GAAP operating margin is expected to be in the range of 7% to 8%.

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 fourth quarter and full year results at 2:00 p.m., Pacific Time, on Thursday, February 15, 2024. A live audio webcast will be accessible 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 Income (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 income (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.