Summary
Procore Technologies reported its first quarter as a public company with revenue of $122.8 million, up 27.2% from the prior-year quarter. Gross profit reached $97.3 million, up 22.4%, but gross margin slipped to 79.2%, down 3.1 percentage points. The operating loss widened sharply to $149.1 million, and operating margin fell to negative 121.4%, down 118.1 percentage points. Net loss widened to $149.7 million, and diluted EPS was negative $2.04. The GAAP results include significant stock-based compensation tied to the May 24, 2021 initial public offering. Procore highlighted non-GAAP gross margin of 84% and non-GAAP operating margin of negative 4%.
The top line grew across the platform. For the six months ended June 30, 2021, revenue was $236.7 million, up 25.3%, and gross profit was $190.9 million, up 23.7%. The six-month operating loss widened to $161.9 million, and net loss widened to $163.5 million. Diluted EPS for the six months was negative $3.11. Gross margin for the six months was 80.6%, down 1.1 percentage points, while operating margin was negative 68.4%, down 57.5 percentage points. The company ended the quarter with 11,149 customers after adding 481 net new customers. Remaining performance obligations were $478.4 million as of June 30, 2021, with 72% expected to be recognized as revenue within 12 months. Deferred revenue, current portion, was $226.2 million.
Cash generation was uneven. Operating cash outflow for the second quarter was $3.1 million. For the six months, operating cash flow was $25.2 million, up 2,721.6% from the prior-year period. Capital expenditures for the six months were $4.2 million, down 21.0%. The company completed its initial public offering on May 24, 2021, selling 10.41 million shares at $67 per share and raising $665.1 million in net proceeds. It also acquired INDUS.AI, an artificial intelligence analytics platform, and announced expansion into Singapore and the U.A.E. Those moves support the international growth strategy, but they also add execution risk. Procore says it sees international expansion as a major, largely greenfield opportunity.
Guidance points to continued growth. For the third quarter, Procore expects revenue of $125 million to $127 million and a non-GAAP operating margin of negative 7% to negative 8%. For the full year 2021, the company expects revenue of $496 million to $499 million and a non-GAAP operating margin of negative 6% to negative 7%. The outlook does not include a reconciliation of non-GAAP guidance to GAAP measures, which the company says is not available without unreasonable effort. That caveat matters because the non-GAAP margin excludes stock-based compensation, amortization of acquired intangibles, and employer payroll taxes on stock transactions.
Risks include the COVID-19 pandemic, which Procore says negatively affected new customer additions in 2020 and the first six months of 2021. International expansion requires considerable management attention and faces multiple languages, currencies, legal, tax and regulatory systems. Stock-based compensation remains a significant recurring expense. The company also has a full valuation allowance for U.S. and U.K. deferred tax assets. The Credit Facility contains covenants, though no amounts were drawn as of June 30, 2021.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2021 | Q1 FY2021 | QoQ | Q2 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $122.8M | — | — | — | — |
| Gross profit | $97.3M | — | — | — | — |
| Gross margin | 79.2% | — | — | — | — |
| Research & development | $88.6M | — | — | — | — |
| Sales & marketing | $99.9M | — | — | — | — |
| General & administrative | $57.8M | — | — | — | — |
| Total operating expenses | $246.4M | — | — | — | — |
| Operating income (loss) | -$149.1M | — | — | — | — |
| Operating margin | -121.4% | — | — | — | — |
| Net income (loss) | -$149.7M | — | — | — | — |
| Net margin | -121.9% | — | — | — | — |
Risks
Procore has a history of losses and may not achieve or sustain profitability. Net losses were $56.7 million in 2018, $83.1 million in 2019, and $96.2 million in 2020, with an accumulated deficit of $397.0 million as of December 31, 2020. In FY2021 Q2, operating loss widened to $149.1 million and net loss widened to $149.7 million from the prior-year quarter.
MD&A states Q2 2021 included significant additional cost of revenue and operating expenses from stock-based compensation tied to RSUs whose performance condition was satisfied at IPO. Total SBC expense was $137.4 million in the quarter and $147.7 million for the six months ended June 30, 2021, and the company expects additional SBC and employer payroll tax, which will continue to pressure GAAP profitability and margins.
Revenue is tied to construction industry spend and annual construction volume. Risk factors note construction is impacted by economic slowdowns, tightening policies, tariffs, commodity prices, reduced government spending, government shutdowns, and credit downgrades. If construction volumes fall, customers may purchase less software or pay lower amounts.
The construction management software market is highly competitive and rapidly changing. Procore competes with Oracle (Primavera, Aconex, Textura), Autodesk (PlanGrid, Assemble, BuildingConnected, Pype), Trimble (Viewpoint, e-Builder), accounting vendors, and point solutions. Competitors may have greater resources, larger customer bases, or offer lower-priced, free, or bundled products.
Future success depends on key management, especially founder, President, and CEO Mr. Courtemanche, and on attracting and retaining skilled engineers, product managers, and sales personnel. Employees are at-will, competition for talent is significant, and headquarters near Santa Barbara, California is not a major technology hub.
Growth depends on expanding sales and marketing capabilities. The sales process is lengthy, educating prospective customers is intensive, and cost to acquire customers is high. Identifying, recruiting, and training qualified sales representatives is time-consuming and they may not become fully productive for a significant time.
Procore has customers in over 125 countries and 12.2% of 2020 revenue came from outside the United States. The company has offices in Australia, Canada, England, and Mexico and plans further expansion, which brings regulatory compliance, employment law, tax, foreign exchange, data protection, and IP enforcement risks.
The platform collects, processes, stores, and transmits substantial customer data, including sensitive project information. Security incidents or unauthorized access could lead to regulatory enforcement, litigation, indemnification obligations, negative publicity, and loss of customer trust. The risk is heightened for cloud platform providers and third-party vendors.
As a newly public company, Procore is developing disclosure controls and internal control over financial reporting and will need to comply with Section 404. Weaknesses could cause restatements, delayed filings, loss of investor confidence, or NYSE listing issues.
Procore has grown partly through acquisitions such as BIManywhere, Honest Buildings, Construction BI, Esticom, and Indus.ai. The company may not realize anticipated benefits, valuations could change rapidly, and impairments or write-offs of goodwill and other charges could result.
COVID-19 negatively impacted new customer additions in 2020 and the first six months of 2021, and could continue to affect construction spending, lengthen sales cycles, reduce subscription value or renewals, hurt collections, and limit in-person sales and marketing.
Following the May 2021 IPO, a substantial portion of shares were subject to lock-up agreements with releases beginning May 20, 2021 and continuing through 180 days after May 19, 2021. Sales by existing stockholders or the perception of such sales could depress the market price of common stock.
SaaS KPIs
All quarters →Non-GAAP Gross Margin
Non-GAAP Operating Margin
Total Customers
Summary, forecast, risks and KPIs are extracted from PROCORE TECHNOLOGIES, INC.'s SEC filings for Q2 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.