Procore Q1 2025 Earnings: Strong Start to the Year
Procore Technologies, Inc., the globally recognized leader in construction management software, today announced its financial results for the first quarter of fiscal year 2025, ending March 31, 2025. The reported figures underscore a positive start to the year for the company, marked by significant revenue growth, healthy profitability metrics, and strong customer retention, even amidst evolving economic uncertainties.
Tooey Courtemanche, Founder, President, and Chief Executive Officer of Procore, expressed his satisfaction with the company’s initial performance in 2025. “Our Q1 performance represented a positive start to the year, reflecting our measurable ROI for our customers,” he stated. He further emphasized Procore’s strategic advantage in the current market landscape, noting, “Our ability to help customers achieve more with less positions us well to serve them as they navigate a dynamic environment.” Courtemanche’s comments highlight the increasing importance of efficiency and value creation for construction businesses, a need that Procore’s platform is designed to address.
Howard Fu, Chief Financial Officer of Procore, addressed the company’s proactive approach to potential economic headwinds. “We are prepared to thoughtfully manage the business through the evolving tariff landscape to continuously improve our financial profile,” Fu affirmed. Despite acknowledging the increased uncertainty in the macroeconomic environment, he conveyed strong confidence in Procore’s ability to meet its financial targets for the full year. “Even with this increased uncertainty, we remain very confident in our ability to achieve our 2025 guidance,” Fu concluded, signaling the company’s resilience and strategic planning in the face of external factors.
First Quarter 2025 Financial Highlights: A Deep Dive
Procore’s financial results for the first quarter of 2025 demonstrate a solid foundation for the remainder of the year.
Revenue Growth: The company reported revenue of $311 million, marking a substantial 15% increase compared to the same period in the previous year. This growth underscores the continued adoption of Procore’s platform across the construction industry and its ability to attract and retain customers.
Profitability Metrics: Procore showcased strong profitability metrics in the first quarter. The GAAP gross margin stood at an impressive 79%, while the non-GAAP gross margin reached 83%. These figures highlight the efficiency of Procore’s service delivery and the value it provides to its customers. Similarly, the GAAP operating margin was reported at (12%), and the non-GAAP operating margin reached a healthy 10%. The difference between GAAP and non-GAAP figures primarily reflects stock-based compensation expenses and other non-recurring items, providing investors with a clearer picture of the company’s core operational profitability.
Cash Flow Generation: Procore demonstrated its financial strength through robust cash flow generation. The operating cash inflow for the first quarter amounted to $66 million, and the free cash inflow reached $47 million. These figures indicate the company’s ability to generate significant cash from its operations, providing flexibility for future investments and strategic initiatives.
Non-GAAP Financial Measures: Procore’s earnings release includes a reconciliation of GAAP to non-GAAP financial measures, providing investors with a more comprehensive understanding of the company’s underlying performance. Non-GAAP measures, which exclude certain non-cash or non-recurring items, are often used by management and investors to evaluate core operating results and facilitate period-over-period comparisons.
Recent Business Highlights: Driving Growth and Innovation
Beyond the strong financial performance, Procore highlighted several key business achievements during the first quarter of 2025 that underscore its market leadership and commitment to innovation.
Exceptional Customer Retention: Procore achieved an impressive gross revenue retention rate of 95% in the first quarter. This high retention rate speaks volumes about the value that customers derive from the Procore platform and the strength of the company’s customer relationships.
Expansion of High-Value Customers: The number of organic customers contributing more than $100,000 of annual recurring revenue (ARR) reached 2,418 as of March 31, 2025, representing a significant 14% year-over-year increase. This growth in high-value customers indicates Procore’s success in expanding its footprint within larger construction organizations.
Net Customer Additions: Procore added a healthy 218 net new organic customers in the first quarter, bringing the total number of organic customers to 17,306. This consistent growth in its customer base demonstrates the continued attractiveness and market demand for Procore’s solutions.
Strategic Share Repurchase Program: Procore actively managed its capital allocation by repurchasing approximately 1.5 million shares of its common stock for approximately $100 million as part of its authorized share repurchase program. As of the end of the first quarter, approximately $200 million remained available for future share repurchases under the existing program, indicating the company’s confidence in its long-term value and its commitment to returning capital to shareholders.
Future of Construction Report: Procore demonstrated its thought leadership and commitment to innovation by releasing its inaugural Future State of Construction Report. This comprehensive report delves into the key trends and challenges anticipated to shape the construction industry over the next decade, with a particular focus on the impact of AI, automation, and workforce shifts. This initiative positions Procore as a forward-thinking partner for the industry, helping its customers prepare for the future.
Second Quarter and Full Year 2025 Outlook: Maintaining Positive Momentum
Based on its strong first-quarter performance and current market outlook, Procore provided its financial guidance for the second quarter and the full year of 2025.
Second Quarter 2025 Outlook:
- Revenue: Expected to be in the range of $310 million to $312 million, representing a year-over-year growth of 9% to 10%.
- Non-GAAP Operating Margin: Expected to be in the range of 11% to 11.5%.
Full Year 2025 Outlook:
- Revenue: Expected to be in the range of $1,286 million to $1,290 million, representing a year-over-year growth of 12%.
- Non-GAAP Operating Margin: Expected to be in the range of 13% to 13.5%.
Procore noted that a reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis due to the inherent uncertainty in predicting certain expenses. However, the company emphasized that these factors could be material to its future GAAP financial results.
In conclusion, Procore’s first-quarter 2025 financial results reflect a strong start to the year, characterized by robust revenue growth, healthy profitability, strong cash flow generation, and significant business momentum. The company’s focus on delivering value to its customers, its strategic investments in innovation, and its proactive approach to navigating the evolving economic landscape position it well for continued success in the dynamic construction management software market. The reaffirmed full-year guidance further underscores Procore’s confidence in its ability to execute its strategic objectives and deliver sustainable growth.
