PROCORE TECHNOLOGIES, INC. SEC 10-K Report

Procore Technologies, Inc., a leading global provider of cloud-based construction management software, has released its 2024 10-K report. The report highlights significant financial and operational achievements, strategic initiatives, and the challenges the company faces as it continues to expand its market presence and enhance its platform capabilities.

Financial Highlights

Procore Technologies, Inc. reported robust financial performance for the year 2024:

• Revenue: $1,151.7 million, reflecting a 21% increase from the previous year, driven by both existing and new customer growth.
• Gross Profit: $946.1 million, maintaining a gross margin of 82%, consistent with the prior year.
• Loss from Operations: $(136.4) million, an improvement from the previous year's loss of $(215.7) million, indicating better operational efficiency.
• Net Loss: $(105.9) million, compared to a net loss of $(189.7) million in the previous year, showing a reduction in overall losses.
• Net Loss Per Share: $(0.72), compared to $(1.34) in the previous year, reflecting improved financial performance on a per-share basis.

Business Highlights

Procore Technologies, Inc. continues to strengthen its position in the construction management software industry with several key business developments:

• Platform Overview: The company provides a cloud-based construction management platform that connects and empowers key stakeholders in the construction industry, such as owners, general contractors, and specialty contractors, to collaborate and access capabilities from any location on any internet-connected device.
• Product Solutions: The platform includes four integrated product solutions: Preconstruction, Project Execution, Resource Management, and Financial Management. These solutions facilitate collaboration, improve productivity, and enhance financial transparency across the construction project lifecycle.
• Revenue Segments: Revenue is primarily generated from subscriptions to access the platform's products, with pricing based on the number and mix of products subscribed to and the annual construction volume contracted to run on the platform.
• Geographical Performance: The company has an international presence with offices in the U.S., Canada, Australia, England, the UAE, and Ireland, supporting multiple languages and currencies. Non-U.S. revenue accounted for 15% of total revenue in 2024, up from 14% in 2023.
• Customer Base: The platform serves a wide range of customers, from small businesses managing a few million dollars of annual construction volume to global enterprises managing billions. The number of customers contributing more than $100,000 of annual recurring revenue increased by 16% in 2024.
• New Product Launches: In 2024, the company launched Procore Pay, a payment solution that handles all aspects of the payment process between general contractors and subcontractors.
• Acquisitions: The company acquired Intelliwave Technologies Inc., a construction materials management company, in 2024, and Unearth Technologies, Inc., a geographic information systems asset management platform, in 2023.
• Future Outlook: The company plans to continue investing in technology innovation, product development, and international expansion. It aims to establish its platform as the industry standard in construction, both domestically and internationally.

Strategic Initiatives

Procore Technologies, Inc. is actively pursuing several strategic initiatives to drive long-term growth and enhance its market position:

• International Expansion: The company is focused on international expansion as a major growth opportunity, with offices established in Sydney, Toronto, London, Dublin, and Dubai.
• Technology Innovation: Procore is investing in technology innovation and product development to enhance its platform capabilities, including recent acquisitions such as Intelliwave and Unearth to bolster its offerings.
• Go-to-Market (GTM) Model: The company is evolving its GTM operating model by transitioning to a general manager model for different regions and adding product and technical specialists to better serve customer needs.
• Capital Management: Procore's principal sources of liquidity include cash, cash equivalents, and marketable securities totaling $821.4 million as of December 31, 2024. The company has a balanced capital allocation strategy focusing on organic growth, mergers and acquisitions, and potential share repurchases. On October 29, 2024, the Board authorized a stock repurchase program of up to $300 million, although no shares were repurchased during the year ended December 31, 2024.
• Future Outlook: Procore plans to continue investing in international markets and technology innovation to drive long-term growth. The company anticipates that its evolved GTM operating model will improve operating efficiency and customer experiences. Procore also intends to explore strategic acquisitions and investments to expand its product and market reach. The company expects to maintain sufficient liquidity to meet its needs for at least the next 12 months, while continuing to monitor macroeconomic factors that may impact customer spending and its financial condition.

Challenges and Risks

Procore Technologies, Inc. faces several significant risks that could materially impact its business:

• Market Risks: The construction industry is experiencing uncertainty due to macroeconomic factors, which could affect the company's growth. A decrease in construction volume could reduce customer spending on the company's products, as pricing is often based on annual construction volume. Rising inflation and unfavorable economic conditions may further decrease demand for construction software.
• Operational Risks: The company has experienced rapid growth in the past, but this may not be indicative of future performance. Challenges in managing growth, fluctuations in results of operations, and a history of losses pose significant operational risks. The company also faces risks related to the evolution of its go-to-market (GTM) operating model, which has caused disruptions and adverse impacts on financial and operating results.
• Regulatory Risks: The company is subject to stringent and evolving data privacy and security laws both domestically and internationally. Non-compliance could lead to regulatory investigations, fines, and reputational harm. Additionally, the company is pursuing FedRAMP authorization to enter contracts with U.S. federal entities, which involves significant time and resources and subjects the company to heightened regulatory scrutiny.
• Emerging Risks: The rapid evolution of the construction management software industry and the integration of AI technologies present new challenges. Competitors may develop new products or technologies that could make the company's platform obsolete. The company must also address risks associated with AI, such as flawed outputs and potential legal liabilities.
• International Expansion Risks: As the company expands its operations outside the U.S., it faces increased business, regulatory, and economic risks, including compliance with international laws, political instability, and currency exchange fluctuations.

Management is focused on addressing these challenges by investing in sales and marketing capabilities, enhancing product offerings, and expanding internationally. However, the success of these strategies is uncertain, and failure to effectively manage these risks could materially adversely affect the company's business, financial condition, results of operations, and prospects.

SEC Filing: PROCORE TECHNOLOGIES, INC. [ PCOR ] - 10-K - Feb. 26, 2025