Procore Technologies, Inc. (NYSE: PCOR), a leading global
provider of construction management software, today announced
financial results for the second quarter ended June 30, 2022.
“Our second quarter results demonstrate the value we deliver to
the construction industry, especially in a dynamic environment,”
said Tooey Courtemanche, Founder, President and CEO of Procore.
“Our platform helps drive efficiency within construction and allows
customers to have better visibility and control. We are continuing
to see the return on investment in our solutions, which can help
relieve some of the construction industry’s toughest burdens.”
“We delivered another quarter of solid results, highlighted by
continued strength in backlog metrics, expansion momentum and
pipeline generation,” said Paul Lyandres, CFO of Procore. “We are
excited to host our inaugural Investor Day on November 8 in
conjunction with our annual Groundbreak conference.”
Second Quarter 2022 Financial Highlights:
- Revenue was $172 million, an increase of 40% year-over-year.
- Including a $7 million contribution from Levelset
- GAAP gross margin was 79% and non-GAAP gross margin was
83%.
- GAAP operating margin was (42%) and non-GAAP operating margin
was (15%).
- Operating cash outflow for the second quarter was $27
million.
- Free cash outflow for the second quarter was $37 million.
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:
- Added 594 net new organic customers in the second quarter,
ending with a total of 13,403 organic customers.
- Excluding over 3,000 customers from Levelset
- Released over 60 product enhancements in the second quarter,
including a number of innovations related to our global focus
within Preconstruction and Financials.
- Opened new Asia-Pacific headquarters in Sydney, Australia.
- Earned a 2022 Top Rated Construction Product Award from
TrustRadius.
- Appointed Joy Durling as Chief Data Officer.
Third Quarter and Full Year 2022 Outlook:
Procore is providing the following guidance for the third
quarter and full year 2022:
- Third Quarter 2022 Outlook:
- Revenue is expected to be in the range of $174 million to $176
million, representing year-over-year growth of 32% to 33%.
- Non-GAAP operating margin is expected to be in the range of
(13%) to (14%).
- Full Year 2022 Outlook:
- Revenue is expected to be in the range of $690 million to $694
million, representing year-over-year growth of 34% to 35%.
- Including $29 million from Levelset
- Non-GAAP operating margin is expected to be in the range of
(13%) to (14%).
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 second quarter results at 2:00 p.m., Pacific Time, on
Wednesday, August 3, 2022. 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, 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, 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 Loss from Operations, Non-GAAP
Operating Margin, Non-GAAP Net Loss and Non-GAAP Net 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 loss from operations
by total revenue.
Because of varying available valuation methodologies, subjective
assumptions, and the variety of equity instruments that can impact
a company's non-cash expenses, Procore believes that providing
non-GAAP financial measures that exclude stock-based compensation
expense allow for meaningful comparisons between its operating
results from period to period. The expense related to amortization
of acquired intangible assets is dependent upon estimates and
assumptions, which can vary significantly and are unique to each
asset acquired; therefore, Procore believes non-GAAP measures that
adjust for the amortization of acquired intangible assets provide
investors a consistent basis for comparison across accounting
periods. The amount of employer payroll tax-related items on
employee stock transactions is dependent on restricted stock unit
settlements, option exercises, related stock price, and other
factors that are beyond Procore’s control and that do not correlate
to the operation of the business. When evaluating the performance
of its business and making operating plans, Procore does not
consider these items (for example, when considering the impact of
equity award grants, the company places a greater emphasis on
overall stockholder dilution than the accounting charges associated
with such grants). Additionally, acquisition-related expenses, such
as transaction costs and retention payments, are expenses that are
not necessarily reflective of operational performance during a
period. Procore believes that the exclusion of acquisition-related
expenses provides for a useful comparison of our operating results
to prior periods and to its peer companies, which commonly exclude
these expenses. Income tax benefits relate to the release of a
portion of our valuation allowance as a result of deferred tax
liabilities recorded related to acquisitions that are available
sources of income to realize our deferred tax assets. We exclude
the income tax effect associated with our acquisitions from certain
of our non-GAAP financial measures because we believe that
excluding this provides meaningful supplemental information
regarding our operational performance. Overall, Procore believes it
is useful to exclude these expenses in order to better understand
the long-term performance of its core business and to facilitate
comparison of its results period-over-period and to those of peer
companies. All of these non-GAAP financial measures are important
tools for financial and operational decision-making and for
evaluating Procore's own operating results over different periods
of time.
Non-GAAP financial measures may not provide information that is
directly comparable to information provided by other companies in
Procore's industry, as other companies in the industry may
calculate non-GAAP financial measures differently. In addition,
there are limitations in using non-GAAP financial measures because
non-GAAP financial measures are not prepared in accordance with
GAAP, may be different from non-GAAP financial measures used by
other companies, and exclude expenses that may have a material
impact on Procore's reported financial results. Further,
stock-based compensation expense has been, and will continue to be
for the foreseeable future, a significant recurring expense in
Procore's business and an important part of the compensation
provided to its employees. The presentation of non-GAAP financial
information is not meant to be considered in isolation or as a
substitute for the directly comparable financial measures prepared
in accordance with GAAP. Investors should review the reconciliation
of non-GAAP financial measures to the comparable GAAP financial
measures included below, and not rely on any single financial
measure to evaluate Procore's business.
Free Cash Flow: Procore defines free cash flow as net
cash (used in) provided by operating activities, less purchases of
property and equipment and capitalized software development costs.
Procore believes free cash flow is an important liquidity measure
of the cash (if any) that is available, after our operating
activities and capital expenditures. Procore uses free cash flow in
conjunction with traditional GAAP measures to assess its liquidity
and evaluate the effectiveness of its business strategies. Once
Procore’s business needs and obligations are met, cash can be used
to maintain a strong balance sheet and invest in future growth.
About Procore
Procore is a leading global provider of construction management
software. Over 1 million projects and more than $1 trillion USD in
construction volume have run on Procore's platform. Procore’s
platform connects key project stakeholders to solutions Procore has
built specifically for the construction industry—for the owner, the
general contractor, and the specialty contractor. Procore's App
Marketplace has a multitude of partner solutions that integrate
seamlessly with Procore’s platform, giving construction
professionals the freedom to connect with what works best for them.
Headquartered in Carpinteria, California, Procore has offices
around the globe. Learn more at Procore.com.
PROCORE-IR
Category: Earnings
Procore Technologies,
Inc.
Condensed Consolidated
Statements of Operations
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands, except share and per share
amounts)
2022
2021
2022
2021
Revenue
$
172,205
$
122,790
$
331,721
$
236,728
Cost of revenue (1)(2)(3)
36,735
25,493
70,067
45,852
Gross profit
135,470
97,297
261,654
190,876
Operating expenses:
Sales and marketing (1)(2)(3)(4)
103,283
99,905
197,198
153,870
Research and development (1)(2)(3)(4)
63,822
88,627
124,076
123,172
General and administrative (1)(3)(4)
40,667
57,827
83,819
75,754
Total operating expenses
207,772
246,359
405,093
352,796
Loss from operations
(72,302
)
(149,062
)
(143,439
)
(161,920
)
Interest income (expense), net
111
(576
)
(380
)
(1,138
)
Other expense, net
(890
)
(44
)
(347
)
(227
)
Loss before provision for income taxes
(73,081
)
(149,682
)
(144,166
)
(163,285
)
Provision for income taxes
42
37
376
166
Net loss
$
(73,123
)
$
(149,719
)
$
(144,542
)
$
(163,451
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.54
)
$
(2.04
)
$
(1.07
)
$
(3.11
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
135,927,677
73,539,568
135,232,404
52,564,840
(1) Includes stock-based compensation expense
as follows:
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(in thousands)
Cost of revenue
$
2,046
$
4,918
$
3,504
$
6,079
Sales and marketing
12,572
42,855
22,868
46,107
Research and development
13,144
51,317
26,152
54,563
General and administrative
6,133
38,353
18,580
40,997
Total stock-based compensation expense
$
33,895
$
137,443
$
71,104
$
147,746
(2) Includes amortization of acquired
intangible assets as follows:
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(in thousands)
Cost of revenue
$
5,654
$
1,086
$
11,308
$
2,172
Sales and marketing
3,106
466
6,212
945
Research and development
895
680
1,797
863
Total amortization of acquired intangible
assets
$
9,655
$
2,232
$
19,317
$
3,980
(3) Includes employer payroll tax on employee
stock transactions as follows:
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(in thousands)
Cost of revenue
$
68
$
330
$
149
$
334
Sales and marketing
317
1,215
925
1,357
Research and development
523
1,748
1,550
1,822
General and administrative
182
635
727
715
Total employer payroll tax on employee
stock transactions
$
1,090
$
3,928
$
3,351
$
4,228
(4) Includes acquisition-related expenses as
follows:
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(in thousands)
Sales and marketing
$
208
$
110
$
415
$
110
Research and development
1,090
191
2,191
191
General and administrative
1,081
442
2,119
442
Total acquisition-related expenses
$
2,379
$
743
$
4,725
$
743
Procore Technologies,
Inc.
Condensed Consolidated Balance
Sheets
(unaudited)
(in thousands)
June 30, 2022
December 31, 2021
Assets
Current assets
Cash and cash equivalents
$
563,224
$
586,108
Accounts receivable, net
89,274
113,977
Contract cost asset, current
19,251
17,030
Prepaid expenses and other current
assets
44,082
35,173
Total current assets
715,831
752,288
Capitalized software development costs,
net
42,335
27,062
Property and equipment, net
41,035
36,837
Right of use assets - finance leases
38,291
39,623
Right of use assets - operating leases
48,410
44,052
Contract cost asset, non-current
30,398
25,889
Intangible assets, net
182,501
201,977
Goodwill
539,584
540,922
Other assets
23,569
22,007
Total assets
$
1,661,954
$
1,690,657
Liabilities, Redeemable Convertible
Preferred Stock and Stockholders’ Equity
Current liabilities
Accounts payable
$
21,251
$
15,490
Accrued expenses
52,087
65,907
Deferred revenue, current
316,559
301,557
Other current liabilities
29,461
20,750
Total current liabilities
419,358
403,704
Deferred revenue, non-current
3,943
4,024
Finance lease liabilities, non-current
46,451
47,344
Operating lease liabilities,
non-current
42,762
41,573
Other liabilities, non-current
3,445
4,723
Total liabilities
515,959
501,368
Stockholders’ equity
Common stock
14
13
Additional paid-in capital
1,953,764
1,852,071
Accumulated other comprehensive loss
(1,029
)
(583
)
Accumulated deficit
(806,754
)
(662,212
)
Total stockholders’ equity
1,145,995
1,189,289
Total liabilities, redeemable convertible
preferred stock and stockholders’ equity
$
1,661,954
$
1,690,657
Remaining performance obligation:
The remaining performance obligation was
$653.9 million as of June 30, 2022, approximately 72% of which is
expected to be recognized as revenue within 12 months. The
remaining performance obligation was $478.4 million as of June 30,
2021, approximately 72% of which was expected to be recognized as
revenue within 12 months.
Procore Technologies,
Inc.
Condensed Consolidated
Statements of Cash Flows
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2022
2021
2022
2021
Operating activities
Net loss
$
(73,123
)
$
(149,719
)
$
(144,542
)
$
(163,451
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities
Stock-based compensation
33,895
137,443
71,104
147,746
Depreciation and amortization
15,403
7,819
30,550
15,120
Abandonment of long-lived assets
887
-
887
554
Noncash lease expense
2,652
1,869
4,808
3,735
Unrealized foreign currency loss, net
832
86
355
691
Deferred income taxes
(286
)
(72
)
(638
)
(99
)
Changes in operating assets and
liabilities, net of effect of business combinations
Accounts receivable
(9,788
)
(9,610
)
24,337
11,113
Deferred contract cost assets
(3,295
)
(3,500
)
(7,361
)
(5,062
)
Prepaid expenses and other assets
390
(1,122
)
(4,535
)
(5,723
)
Accounts payable
5,587
608
5,926
(2,908
)
Accrued expenses and other liabilities
(4,552
)
9,420
(8,909
)
14,535
Deferred revenue
6,932
4,206
15,706
10,845
Operating lease liabilities
(2,489
)
(557
)
(4,359
)
(1,929
)
Net cash flow (used in) provided by
operating activities
(26,955
)
(3,129
)
(16,671
)
25,167
Investing activities
Purchases of property and equipment
(1,908
)
(1,801
)
(9,433
)
(4,194
)
Capitalized software development costs
(8,620
)
(3,523
)
(16,252
)
(5,716
)
Purchases of strategic investments
(689
)
(3,450
)
(3,018
)
(3,450
)
Originations of materials financing
(9,259
)
-
(9,259
)
-
Customer repayments of materials
financing
6,261
-
6,261
-
Acquisition of a business, net of cash
acquired
-
(19,982
)
-
(19,982
)
Settlement of post-close working capital
adjustments from business combinations
-
-
1,291
-
Net cash flow used in investing
activities
(14,215
)
(28,756
)
(30,410
)
(33,342
)
Financing activities
Proceeds from initial public offering, net
of underwriting
commissions and discounts
-
665,129
-
665,129
Proceeds from stock option exercises
7,697
17,499
14,604
29,126
Payments of deferred offering costs
(270
)
(2,987
)
(270
)
(3,527
)
Proceeds from employee stock purchase
plan
11,513
-
11,513
-
Payment of deferred business acquisition
consideration
-
(475
)
-
(475
)
Principal payments under finance lease
agreements, net of proceeds from lease incentives
(479
)
(428
)
(844
)
(742
)
Net cash flow provided by financing
activities
18,461
678,738
25,003
689,511
Net (decrease) increase in cash, cash
equivalents and restricted cash
(22,709
)
646,853
(22,078
)
681,336
Effect of exchange rate changes on
cash
(981
)
(102
)
(806
)
(731
)
Cash, cash equivalents and restricted
cash, beginning of period
590,018
417,107
589,212
383,253
Cash, cash equivalents and restricted
cash, end of period
$
566,328
$
1,063,858
$
566,328
$
1,063,858
Procore Technologies,
Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(unaudited)
Reconciliation of gross profit and
gross margin to non-GAAP gross profit and non-GAAP gross
margin:
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(dollars in thousands)
Revenue
$
172,205
$
122,790
$
331,721
$
236,728
Gross profit
135,470
97,297
261,654
190,876
Stock-based compensation expense
2,046
4,918
3,504
6,079
Amortization of acquired technology
intangible assets
5,654
1,086
11,308
2,172
Employer payroll tax on employee stock
transactions
68
330
149
334
Non-GAAP gross profit
$
143,238
$
103,631
$
276,615
$
199,461
Gross margin
79
%
79
%
79
%
81
%
Non-GAAP gross margin
83
%
84
%
83
%
84
%
Reconciliation of operating expenses to
non-GAAP operating expenses:
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(dollars in thousands)
Revenue
$
172,205
$
122,790
$
331,721
$
236,728
GAAP sales and marketing
103,283
99,905
197,198
153,870
Stock-based compensation expense
(12,572
)
(42,855
)
(22,868
)
(46,107
)
Amortization of acquired intangible
assets
(3,106
)
(466
)
(6,212
)
(945
)
Employer payroll tax on employee stock
transactions
(317
)
(1,215
)
(925
)
(1,357
)
Acquisition-related expenses
(208
)
(110
)
(415
)
(110
)
Non-GAAP sales and marketing
$
87,080
$
55,259
$
166,778
$
105,351
GAAP sales and marketing as a percentage
of revenue
60
%
81
%
59
%
65
%
Non-GAAP sales and marketing as a
percentage of revenue
51
%
45
%
50
%
45
%
GAAP research and development
$
63,822
$
88,627
$
124,076
$
123,172
Stock-based compensation expense
(13,144
)
(51,317
)
(26,152
)
(54,563
)
Amortization of acquired intangible
assets
(895
)
(680
)
(1,797
)
(863
)
Employer payroll tax on employee stock
transactions
(523
)
(1,748
)
(1,550
)
(1,822
)
Acquisition-related expenses
(1,090
)
(191
)
(2,191
)
(191
)
Non-GAAP research and development
$
48,170
$
34,691
$
92,386
$
65,733
GAAP research and development as a
percentage of revenue
37
%
72
%
37
%
52
%
Non-GAAP research and development as a
percentage of revenue
28
%
28
%
28
%
28
%
GAAP general and administrative
$
40,667
$
57,827
$
83,819
$
75,754
Stock-based compensation expense
(6,133
)
(38,353
)
(18,580
)
(40,997
)
Employer payroll tax on employee stock
transactions
(182
)
(635
)
(727
)
(715
)
Acquisition-related expenses
(1,081
)
(442
)
(2,119
)
(442
)
Non-GAAP general and administrative
$
33,271
$
18,397
$
62,393
$
33,600
GAAP general and administrative as a
percentage of revenue
24
%
47
%
25
%
32
%
Non-GAAP general and administrative as a
percentage of revenue
19
%
15
%
19
%
14
%
Reconciliation of loss from operations
and operating margin to non-GAAP loss from operations and non-GAAP
operating margin:
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(dollars in thousands)
Revenue
$
172,205
$
122,790
$
331,721
$
236,728
Loss from operations
(72,302
)
(149,062
)
(143,439
)
(161,920
)
Stock-based compensation expense
33,895
137,443
71,104
147,746
Amortization of acquired intangible
assets
9,655
2,232
19,317
3,980
Employer payroll tax on employee stock
transactions
1,090
3,928
3,351
4,228
Acquisition-related expenses
2,379
743
4,725
743
Non-GAAP loss from operations
$
(25,283
)
$
(4,716
)
$
(44,942
)
$
(5,223
)
Operating margin
(42
%)
(121
%)
(43
%)
(68
%)
Non-GAAP operating margin
(15
%)
(4
%)
(14
%)
(2
%)
Reconciliation of net loss and net loss
per share to non-GAAP net loss and non-GAAP net loss per
share:
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(dollars in thousands)
Revenue
$
172,205
$
122,790
$
331,721
$
236,728
Net loss
(73,123
)
(149,719
)
(144,542
)
(163,451
)
Stock-based compensation expense
33,895
137,443
71,104
147,746
Amortization of acquired intangible
assets
9,655
2,232
19,317
3,980
Employer payroll tax on employee stock
transactions
1,090
3,928
3,351
4,228
Acquisition-related expenses
2,379
743
4,725
743
Income tax effect of non-GAAP items
110
-
110
-
Non-GAAP net loss
$
(25,994
)
$
(5,373
)
$
(45,935
)
$
(6,754
)
Numerator:
Non-GAAP net loss
$
(25,994
)
$
(5,373
)
$
(45,935
)
$
(6,754
)
Denominator:
Weighted-average shares used in
computing net loss per share attributable to common stockholders,
basic and diluted
135,927,677
73,539,568
135,232,404
52,564,840
GAAP net loss per share, basic and
diluted
$
(0.54
)
$
(2.04
)
$
(1.07
)
$
(3.11
)
Non-GAAP net loss per share, basic and
diluted
$
(0.19
)
$
(0.07
)
$
(0.34
)
$
(0.13
)
Computation of free cash flow:
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(dollars in thousands)
Net cash (used in) provided by operating
activities
$
(26,955
)
$
(3,129
)
$
(16,671
)
$
25,167
Purchases of property and equipment
(1,908
)
(1,801
)
(9,433
)
(4,194
)
Capitalized software development costs
(8,620
)
(3,523
)
(16,252
)
(5,716
)
Non-GAAP free cash flow
$
(37,483
)
$
(8,453
)
$
(42,356
)
$
15,257
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220803005768/en/
Media Contact Elizabeth Locke press@procore.com
Investor Contact Matthew Puljiz ir@procore.com
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