Summary
Procore Technologies posted third quarter fiscal 2021 revenue of $131.99 million, up 29.5% from the prior-year quarter. Gross profit was $109.30 million, up 30.4%. Gross margin reached 82.8%, up 0.5 percentage points from the prior-year quarter. The company added 456 net new customers in the quarter and ended with 11,605 customers. Remaining performance obligations were $497.30 million as of September 30, 2021, with about 72% expected to be recognized as revenue within 12 months. Current deferred revenue was $240.08 million. Those top-line trends show steady demand for construction management software, even as the company's cost base expanded.
Profitability moved in the opposite direction. Operating loss was $49.56 million, a loss that widened from the prior-year quarter. Net loss was $50.74 million, also widened from the prior-year quarter. Diluted EPS was -$0.39. Operating margin was -37.5%, down 21.4 percentage points from the prior-year quarter. On a non-GAAP basis, gross margin was 84% and operating margin was (4%), which shows how much stock-based compensation and other adjustments affected the GAAP results. For the first nine months of fiscal 2021, revenue was $368.72 million, up 26.8% from the first nine months of fiscal 2020. Net loss for the year-to-date period was $214.19 million, a loss that widened from the first nine months of fiscal 2020. Operating loss for the year-to-date period was $211.48 million. Operating margin for the year-to-date period was -57.4%, down 44.6 percentage points from the first nine months of fiscal 2020. Gross margin for the year-to-date period was 81.4%, down 0.5 percentage points from the first nine months of fiscal 2020. The gap between revenue growth and bottom-line losses reflects heavy investment in sales, marketing, and product development after the company's initial public offering.
Cash generation improved. Operating cash flow was $15.14 million for the quarter, up 37.2% from the prior-year quarter. For the first nine months of fiscal 2021, operating cash flow was $40.30 million, up 300.2% from the first nine months of fiscal 2020. Capital expenditures were $4.21 million for the quarter, up 199.3% from the prior-year quarter. Year-to-date capital expenditures were $8.40 million, up 25.1% from the first nine months of fiscal 2020. Free cash flow, a non-GAAP measure, was $6.5 million for the quarter.
Procore closed two acquisitions after the quarter ended. LaborChart closed on October 21, 2021, for approximately $85 million in cash. Levelset closed on November 2, 2021, for an estimated $500 million, including approximately $425 million in cash and $75 million in stock. Neither acquisition is included in the third quarter results. Fourth quarter fiscal 2021 guidance is $136 million to $138 million for revenue, including $1 million from Levelset, while LaborChart is not expected to provide material revenue. Fourth quarter non-GAAP operating margin is expected to be in the range of (14%) to (15%), including 400 basis points of headwind from the acquisitions. Full fiscal year 2021 guidance is $505 million to $507 million for revenue, including $1 million from Levelset and LaborChart. Full year non-GAAP operating margin is expected to be in the range of (6%) to (7%), including 100 basis points of headwind from the acquisitions.
Risks remain. COVID-19 has negatively affected new customer additions in 2020 and the first nine months of 2021, and the pandemic's impact on the construction industry is still uncertain. The acquisitions of LaborChart and Levelset are expected to increase expenses in dollars and as a percentage of revenue, and integrating them may take time. International expansion is a major opportunity, but it requires management attention and carries challenges from multiple languages, currencies, and regulatory systems. The company also relies on acquiring new customers, renewing subscriptions, and expanding existing customer use to keep revenue growing.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2021 | Q2 FY2021 | QoQ | Q3 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $132.0M | $122.8M | +7.5% | — | — |
| Gross profit | $109.3M | $97.3M | +12.3% | — | — |
| Gross margin | 82.8% | 79.2% | +3.6 pp | — | — |
| Research & development | $53.4M | $88.6M | -39.7% | — | — |
| Sales & marketing | $70.4M | $99.9M | -29.6% | — | — |
| General & administrative | $35.1M | $57.8M | -39.4% | — | — |
| Total operating expenses | $158.9M | $246.4M | -35.5% | — | — |
| Operating income (loss) | -$49.6M | -$149.1M | +66.8% | — | — |
| Operating margin | -37.5% | -121.4% | +83.9 pp | — | — |
| Net income (loss) | -$50.7M | -$149.7M | +66.1% | — | — |
| Net margin | -38.4% | -121.9% | +83.5 pp | — | — |
Risks
Net loss widened to $50.7 million in the quarter and $214.2 million year to date, while operating loss widened to $49.6 million in the quarter and $211.5 million year to date; accumulated deficit was $611.2 million as of September 30, 2021. The company expects expenses to increase as it invests in growth and public company operations.
Stock-based compensation expense rose to $38.2 million in the quarter from $10.0 million and to $185.9 million year to date from $22.3 million, largely due to RSUs whose performance condition was satisfied at IPO. This contributed to operating margin down to -37.5% in the quarter and -57.4% year to date.
The company completed the LaborChart acquisition for approximately $85 million in cash on October 21, 2021 and the Levelset acquisition for approximately $500 million, including $425 million cash and $75 million in stock, on November 2, 2021. Results for the quarter do not include these businesses, and the company expects expenses may increase as it integrates them.
Revenue is generally priced based on customer annual construction volume, so economic slowdowns, reduced construction growth, lower lending activity, government funding delays, tariffs, and commodity prices can reduce demand or the amount customers pay. The filing also notes COVID-19 negatively impacted new customer additions in 2020 and the first nine months of 2021.
The market is highly competitive with Oracle, Autodesk, Trimble, accounting software vendors, point solutions, and in-house tools; some competitors offer lower-priced or free products or bundle broader offerings. The company sells at a premium and may be forced to cut prices or increase marketing spend.
The Levelset acquisition added a materials finance business that offers deferred payment terms; if a regulator or court concludes those transactions are loans, the company may need to restructure them or comply with usury and state lending, loan brokering, or debt collection licensing laws.
The pandemic negatively impacted the number of new customers added to the platform during 2020 and the first nine months of 2021, lengthened sales cycles, reduced in-person customer support, and could continue to affect construction spending and collections.
Sales efforts require educating customers about construction management software, and the cost to acquire customers is high; identifying and training sales representatives is time-consuming. Sales and marketing expense rose 48% in the quarter and 62% year to date, which may not generate a corresponding revenue increase.
The company is highly dependent on founder, President, and CEO Mr. Courtemanche and other key personnel, and its Santa Barbara headquarters is not a prominent technology hub. Competition for engineers, product managers, and sales staff may require higher compensation and harm execution.
International expansion is described as a major greenfield opportunity, but it requires management attention and exposes the company to multiple languages, currencies, employment, privacy, anti-corruption, tax, and intellectual property regimes. In 2020, 12.2% of revenue was generated outside the United States.
SaaS KPIs
All quarters →Non-GAAP Gross Margin
Non-GAAP Operating Margin
Free Cash Flow
Total Customers
Summary, forecast, risks and KPIs are extracted from PROCORE TECHNOLOGIES, INC.'s SEC filings for Q3 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.