Procore Technologies, Inc.

What they do

Procore provides a cloud-based construction management platform that connects owners, general contractors, and specialty contractors to manage projects from any connected device. The platform focuses on critical project information, workflows, and communication to serve as a system of record for construction. It sells subscriptions for fixed fees that are generally based on products and annual construction volume, usually without per-seat charges, and offers unlimited users. It offers four integrated product categories: Preconstruction, Project Execution, Resource Management, and Financial Management, and recently began offering bundled packages.

Revenue drivers

• Subscription revenue — Procore generates substantially all of its revenue from subscription access to its platform, priced on products and annual construction volume contracted, with multi-year and pooled volume contracts also available.
• Product categories and bundles — Its four product categories are Preconstruction, Project Execution, Resource Management, and Financial Management, now packaged into bundles (Project Execution, Cost Management, Resource Management, Project Lifecycle Management) to drive upsell and expansion.
• Large customers — It serves customers ranging from small businesses to global enterprises; organic customers contributing more than $100,000 of annual recurring revenue were 2,871 as of June 30, 2026, up 14% year-over-year.
• International and AI offerings — Procore is expanding internationally and adding AI agents, with a new suite of AI agents powered by Datagrid intelligence, aimed at expanding monetization beyond core subscription tiers.

Recent performance

For the second quarter ended June 30, 2026, Procore reported revenue of $375 million, up 16% year-over-year. GAAP gross margin was 80% and non-GAAP gross margin was 84%. GAAP operating margin was 1%, marking the first GAAP operating profitability according to management, and non-GAAP operating margin was 21%. Operating cash inflow was $88 million, up 185% year-over-year, and free cash inflow was $65 million, up 507%. Gross revenue retention was 95% in the quarter.

Strategy

Procore's stated strategy is to be the connected platform for construction, expanding its bundled product packages and AI agent capabilities to create a network effect across owners, general contractors, and specialty contractors. It continues to invest in new capabilities such as portfolio management and capital planning for owners, a connected Common Data Environment, and AI agents. The company also pursues acquisitions to add technology, having agreed on July 27, 2026 to acquire DroneDeploy for approximately $845.0 million in cash. Management is focused on durable, profitable growth, with emphasis on operating margins and free cash flow. It is also expanding internationally and deepening integrations through its APIs and App Marketplace.

Risks

• Growth rate decline — Procore's revenue growth rate has declined and may decline further due to its size, macroeconomic conditions, and maturation of its business, as noted in its 10-K.
• Construction volume exposure — Revenue is tied to customers' annual construction volume, so a construction downturn or reduced project activity could lower subscription pricing and revenue.
• Competition — The construction software market is competitive, and larger technology or construction-focused entrants could pressure pricing and adoption.
• Acquisition and integration risk — The pending $845.0 million cash acquisition of DroneDeploy could divert management attention, produce integration challenges, and may not achieve expected benefits.

Outlook

For the third quarter of 2026, Procore guides revenue to $382 million to $384 million, representing 13.3% year-over-year growth, with non-GAAP operating margin of 19% to 19.5%. For full year 2026, it expects revenue of $1,510 million to $1,514 million (14.5% growth at the high end) and non-GAAP operating margin of 18.5% to 19.0%, with free cash flow margin of 19.5%. For full year 2027, management is guiding to a 25% non-GAAP operating margin.