Procore Technologies Inc.

10/30/2024 | Press release | Distributed by Public on 10/30/2024 14:06

Procore Announces Third Quarter 2024 Financial Results

CARPINTERIA, Calif.--(BUSINESS WIRE)-- Procore Technologies, Inc. (NYSE: PCOR), the leading global provider of construction management software, today announced financial results for the third quarter ended September 30, 2024.

"We have made good progress on our go-to-market transition we announced last quarter," said Tooey Courtemanche, Founder, President, and CEO of Procore. "We believe this evolution will position us to become a multi-billion revenue company, while building deep and lasting partnerships with our customers."

"We are on track to expand operating margins by 900 basis points at the high-end for FY24 and our guidance for FY25 calls for further expansion," said Howard Fu, CFO of Procore. "Long-term growth remains our priority, and we are confident that our investments will best position Procore to capture the massive and under-penetrated opportunity ahead of us."

Third Quarter 2024 Financial Highlights:

  • Revenue was $296 million, an increase of 19% year-over-year.
  • GAAP gross margin was 81% and non-GAAP gross margin was 85%.
  • GAAP operating margin was (12%) and non-GAAP operating margin was 9%.
  • Operating cash inflow for the third quarter was $39 million.
  • Free cash inflow for the third quarter was $23 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:

  • Achieved a gross revenue retention rate of 94% in the third quarter.
  • Number of organic customers contributing more than $100,000 of annual recurring revenue totaled 2,261 as of September 30, 2024, an increase of 18% year-over-year.
  • Added 225 net new organic customers in the third quarter, ending with a total of 16,975 organic customers.
  • Announced the expansion of our upcoming Procore Zones to the UK, Australia and New Zealand, further enhancing our ability to provide customers with the choice to control data storage and management within their regions.

Fourth Quarter and Full Year Outlook:

Procore is providing the following guidance for the fourth quarter 2024 and the full year 2024 and 2025:

  • Fourth Quarter 2024 Outlook:
    • Revenue is expected to be in the range of $296 million to $298 million, representing year-over-year growth of 14% to 15%.
    • Non-GAAP operating margin is expected to be in the range of 3% to 4%.
  • Full Year 2024 Outlook:
    • Revenue is expected to be in the range of $1,146 million to $1,148 million, representing year-over-year growth of 21%.
    • Non-GAAP operating margin is expected to be in the range of 10.5% to 11%.
  • Full Year 2025 Outlook:
    • Revenue is expected to be at least $1,275 million, representing year-over-year growth of 11%.
    • Non-GAAP operating margin is expected to be 13%.

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.

Stock Repurchase Program

On October 29, 2024, Procore's Board of Directors authorized a stock repurchase program to repurchase up to $300 million of Procore's outstanding common stock. Procore intends to opportunistically repurchase shares based on market conditions through the open market (including via pre-set trading plans), or other transactions in accordance with applicable securities laws. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. The program does not obligate Procore to acquire any particular amount of common stock, and may be suspended or discontinued at any time at Procore's discretion. The program will be funded using Procore's working capital and will expire on October 29, 2025.

Quarterly Conference Call

Procore Technologies, Inc. will hold a conference call to discuss its third quarter results at 2:00 p.m., Pacific Time, on Wednesday, October 30, 2024. 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), our ability to effectively manage our growth, anticipated performance, trends, growth rates, and challenges in our business and in the markets in which we operate or anticipate entering into, economic and industry trends (in particular, the rate of adoption of construction management software and digitization of the construction industry, inflation, interest rates, and challenging geopolitical conditions), our outlook for fourth quarter 2024 and the full fiscal years 2024 and 2025, our progress with respect to our go-to-market transition and the benefits we expect to realize as a result of such transition, our ability to attract new customers and retain and increase sales to existing customers, our ability to expand internationally, the effects of increased competition in our markets and our ability to compete effectively, our estimated total addressable market, our ability to execute, and realize benefits from, our stock repurchase program, and as set forth in Procore's filings with the Securities and Exchange Commission. You should not rely 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

In addition to Procore's results determined in accordance with U.S. generally accepted accounting principles, or GAAP, Procore believes certain non-GAAP measures, as described below, are useful in evaluating Procore's operating performance. Procore uses this non-GAAP financial information, collectively, to evaluate its ongoing operations as well as for internal planning and forecasting purposes. Procore believes that non-GAAP financial information, 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 GAAP, and are presented for supplemental purposes only.

Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Income from Operations, Non-GAAP Operating Margin, Non-GAAP Net Income, and Non-GAAP Net Income 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, and acquisition-related expenses. 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 income from operations by total revenue. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Non-GAAP diluted earnings per share is computed by giving effect to all potential weighted average dilutive common stock equivalents outstanding for the period, including options to purchase common stock, restricted stock units, and shares to be issued pursuant to the employee stock purchase plan. The dilutive effect of outstanding awards is reflected in non-GAAP diluted earnings per share by application of the treasury stock method.

Stock-based compensation expense includes the net effects of capitalization and amortization of stock-based compensation expense related to capitalized software and cloud-computing arrangement implementation costs. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of the compensation provided to our employees. Because of varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company's non-cash expenses, we believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows 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). Since the amount of employer payroll tax-related items on employee stock transactions is highly variable due to factors outside our control, and unrelated to Procore's core operations, operating results, revenue-generating activities, business strategy, industry, or regulatory environment, management does not consider employer payroll tax on employee stock transactions in the evaluation of the business or in making operating plans. Accordingly, Procore believes this adjustment in arriving at our non-GAAP measures provides investors with a better understanding of the performance of its core business in a manner that is consistent with management's view of the business. Acquisition-related expenses include external and incremental transaction costs, such as legal and due diligence costs and retention payments. These expenses are unpredictable and generally would not have otherwise been incurred in the periods presented as part of our continuing operations. In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition-related expenses, may not be indicative of such future costs. Procore believes that excluding acquisition-related expenses facilitates the comparison of its financial results to its historical operating results and to other companies in its industry. 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. Unlike stock-based compensation expense, employer payroll tax related to employee stock transactions is a cash expense that we will continue to incur in the future. 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 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, invest in future growth, and execute our stock repurchase program.

Other Metrics

Customer Count: The aforementioned customer count excludes customers acquired from business combinations that do not have standard Procore annual contracts.

About Procore

Procore Technologies, Inc. (NYSE: PCOR) creates software for people who build the world. With a focus on providing timely and accurate data for all, Procore transforms the construction industry one project at a time - from hospitals and skyscrapers to airports and stadiums. Beyond its connected, innovative technology, Procore empowers the industry and its communities through Procore.org. For more information, visit www.procore.com.

PROCORE-IR

Category: Earnings

Procore Technologies, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(in thousands, except share and per share amounts)

Revenue

$

295,885

$

247,907

$

849,660

$

689,969

Cost of revenue (1)(2)(3)

54,954

44,125

148,778

126,631

Gross profit

240,931

203,782

700,882

563,338

Operating expenses

Sales and marketing (1)(2)(3)(4)

141,370

129,672

390,286

372,397

Research and development (1)(2)(3)(4)

80,791

72,708

223,698

225,960

General and administrative (1)(3)(4)

55,267

51,753

157,077

143,324

Total operating expenses

277,428

254,133

771,061

741,681

Loss from operations

(36,497

)

(50,351

)

(70,179

)

(178,343

)

Interest income

5,962

4,721

17,714

14,612

Interest expense

(488

)

(490

)

(1,439

)

(1,477

)

Accretion income, net

3,816

2,952

10,665

6,615

Other expense, net

466

(486

)

(26

)

(1,009

)

Loss before (benefit from) provision for income taxes

(26,741

)

(43,654

)

(43,265

)

(159,602

)

(Benefit from) provision for income taxes

(353

)

193

400

573

Net loss

$

(26,388

)

$

(43,847

)

$

(43,665

)

$

(160,175

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.18

)

$

(0.31

)

$

(0.30

)

$

(1.13

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

148,134,585

142,828,406

146,854,541

141,249,446

(1)

Includes stock-based compensation expense and amortization of capitalized stock-based compensation as follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(in thousands)

Cost of revenue

$

4,188

$

2,981

$

11,056

$

8,357

Sales and marketing

14,034

14,390

42,725

41,964

Research and development

18,321

16,350

49,684

52,401

General and administrative

13,912

12,253

39,602

32,637

Total stock-based compensation expense*

$

50,455

$

45,974

$

143,067

$

135,359

*Includes amortization of capitalized stock-based compensation of $2.3 million and $1.2 million, respectively, for the three months ended September 30, 2024 and 2023; and $5.5 million and $3.1 million , respectively, for the nine months ended September 30, 2024 and 2023; which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs.

(2)

Includes amortization of acquired intangible assets as follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(in thousands)

Cost of revenue

$

6,698

$

5,506

$

18,739

$

16,492

Sales and marketing

3,224

3,106

9,475

9,319

Research and development

668

678

2,008

2,087

Total amortization of acquired intangible assets

$

10,590

$

9,290

$

30,222

$

27,898

(3)

Includes employer payroll tax on employee stock transactions as follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(in thousands)

Cost of revenue

$

113

$

133

$

485

$

439

Sales and marketing

815

766

2,867

2,383

Research and development

521

638

3,089

2,885

General and administrative

281

501

1,820

1,636

Total employer payroll tax on employee stock transaction

$

1,730

$

2,038

$

8,261

$

7,343

(4)

Includes acquisition-related expenses as follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(in thousands)

Sales and marketing

$

-

$

548

$

1,448

$

2,002

Research and development

-

136

-

6,324

General and administrative

51

19

614

19

Total acquisition-related expenses

$

51

$

703

$

2,062

$

8,345

Procore Technologies, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

September 30,
2024

December 31,
2023

(in thousands)

Assets

Current assets

Cash and cash equivalents

$

439,298

$

357,790

Marketable securities, current

317,650

320,161

Accounts receivable, net

173,386

206,644

Contract cost asset, current

32,150

28,718

Prepaid expenses and other current assets

54,248

42,421

Total current assets

1,016,732

955,734

Marketable securities, non-current

52,283

-

Capitalized software development costs, net

102,449

83,045

Property and equipment, net

35,952

36,258

Right of use assets - finance leases

32,391

34,375

Right of use assets - operating leases

32,676

44,141

Contract cost asset, non-current

44,593

44,564

Intangible assets, net

131,754

137,546

Goodwill

550,221

539,354

Other assets

19,686

18,551

Total assets

$

2,018,737

$

1,893,568

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$

25,006

$

13,177

Accrued expenses

91,227

100,075

Deferred revenue, current

501,599

501,903

Other current liabilities

31,187

27,275

Total current liabilities

649,019

642,430

Deferred revenue, non-current

4,822

7,692

Finance lease liabilities, non-current

41,853

43,581

Operating lease liabilities, non-current

32,070

37,923

Other liabilities, non-current

5,324

6,332

Total liabilities

733,088

737,958

Stockholders' equity

Common stock

15

15

Additional paid-in capital

2,468,450

2,295,807

Accumulated other comprehensive loss

(314

)

(1,375

)

Accumulated deficit

(1,182,502

)

(1,138,837

)

Total stockholders' equity

1,285,649

1,155,610

Total liabilities and stockholders' equity

$

2,018,737

$

1,893,568

Remaining performance obligation:

The following table presents our current and non-current RPO at the end of each period:

September 30,

Change

2024

2023

Dollar

Percent

(dollars in thousands)

Remaining performance obligations

Current

$

738,856

$

635,000

$

103,856

16

%

Non-current

334,560

255,381

79,179

31

%

Total remaining performance obligations

$

1,073,416

$

890,381

$

183,035

21

%

Procore Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(in thousands)

Operating activities

Net loss

$

(26,388

)

$

(43,847

)

$

(43,665

)

$

(160,175

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

Stock-based compensation

48,175

44,809

137,532

132,234

Depreciation and amortization

24,233

17,733

65,127

51,943

Accretion of discounts on marketable debt securities, net

(3,382

)

(2,953

)

(10,131

)

(6,615

)

Abandonment of long-lived assets

238

277

818

812

Noncash operating lease expense

2,913

2,700

7,906

7,932

Unrealized foreign currency loss, net

(419

)

182

295

739

Deferred income taxes

2

2

4

7

Provision for credit losses

243

3,152

648

6,882

Decrease (increase) in fair value of strategic investments

184

149

(457

)

155

Changes in operating assets and liabilities, net of effect of asset acquisitions and business combinations

Accounts receivable

(14,698

)

(20,433

)

34,296

3,144

Deferred contract cost assets

(1,128

)

(1,469

)

(3,217

)

(5,099

)

Prepaid expenses and other assets

(11,931

)

(3,579

)

(12,121

)

(1,878

)

Accounts payable

(2,250

)

1,109

11,029

2,258

Accrued expenses and other liabilities

21,972

29,135

(8,475

)

(1,975

)

Deferred revenue

4,609

9,498

(6,268

)

29,080

Operating lease liabilities

(3,097

)

(2,791

)

(6,205

)

(8,172

)

Net cash provided by (used in) operating activities

39,276

33,674

167,116

51,272

Investing activities

Purchases of property and equipment

(3,547

)

(3,379

)

(7,510

)

(8,073

)

Capitalized software development costs

(12,721

)

(7,836

)

(32,453

)

(25,187

)

Purchases of strategic investments

(845

)

(84

)

(1,917

)

(526

)

Purchases of marketable securities

(86,245

)

(80,000

)

(410,619

)

(309,282

)

Maturities of marketable securities

145,619

64,894

371,718

287,620

Sales of marketable securities

-

-

-

5,452

Originations of materials financing

-

(6,578

)

-

(23,585

)

Customer repayments of materials financing

88

8,057

1,571

21,053

Acquisition of a business, net of cash acquired

-

-

(25,945

)

-

Asset acquisitions, net of cash acquired

-

(6,011

)

(3,792

)

(6,011

)

Net cash used in investing activities

42,349

(30,937

)

(108,947

)

(58,539

)

Financing activities

Proceeds from stock option exercises

2,456

4,155

12,371

15,094

Proceeds from employee stock purchase plan

-

-

13,187

13,006

Payment of deferred business combination consideration

(1,470

)

-

(1,470

)

-

Payment of deferred asset acquisition consideration

(81

)

-

(81

)

-

Principal payments under finance lease agreements, net of proceeds from lease incentives

(900

)

(520

)

(1,569

)

(1,450

)

Net cash provided by financing activities

5

3,635

22,438

26,650

Net increase in cash and cash equivalents

81,630

6,372

80,607

19,383

Effect of exchange rate changes on cash

1,429

(572

)

901

(881

)

Cash and cash equivalents, beginning of period

356,239

312,518

357,790

299,816

Cash and cash equivalents, end of period

$

439,298

$

318,318

$

439,298

$

318,318

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
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(dollars in thousands)

Revenue

$

295,885

$

247,907

$

849,660

$

689,969

Gross profit

240,931

203,782

700,882

563,338

Stock-based compensation expense

4,188

2,981

11,056

8,357

Amortization of acquired technology intangible assets

6,698

5,506

18,739

16,492

Employer payroll tax on employee stock transactions

113

133

485

439

Non-GAAP gross profit

$

251,930

$

212,402

$

731,162

$

588,626

Gross margin

81

%

82

%

82

%

82

%

Non-GAAP gross margin

85

%

86

%

86

%

85

%

Reconciliation of operating expenses to non-GAAP operating expenses:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(dollars in thousands)

Revenue

$

295,885

$

247,907

$

849,660

$

689,969

GAAP sales and marketing

141,370

129,672

390,286

372,397

Stock-based compensation expense

(14,034

)

(14,390

)

(42,725

)

(41,964

)

Amortization of acquired intangible assets

(3,224

)

(3,106

)

(9,475

)

(9,319

)

Employer payroll tax on employee stock transactions

(815

)

(766

)

(2,867

)

(2,383

)

Acquisition-related expenses

-

(548

)

(1,448

)

(2,002

)

Non-GAAP sales and marketing

$

123,297

$

110,862

$

333,771

$

316,729

GAAP sales and marketing as a percentage of revenue

48

%

52

%

46

%

54

%

Non-GAAP sales and marketing as a percentage of revenue

42

%

45

%

39

%

46

%

GAAP research and development

$

80,791

$

72,708

$

223,698

$

225,960

Stock-based compensation expense

(18,321

)

(16,350

)

(49,684

)

(52,401

)

Amortization of acquired intangible assets

(668

)

(678

)

(2,008

)

(2,087

)

Employer payroll tax on employee stock transactions

(521

)

(638

)

(3,089

)

(2,885

)

Acquisition-related expenses

-

(136

)

-

(6,324

)

Non-GAAP research and development

$

61,281

$

54,906

$

168,917

$

162,263

GAAP research and development as a percentage of revenue

27

%

29

%

26

%

33

%

Non-GAAP research and development as a percentage of revenue

21

%

22

%

20

%

24

%

GAAP general and administrative

$

55,267

$

51,753

$

157,077

$

143,324

Stock-based compensation expense

(13,912

)

(12,253

)

(39,602

)

(32,637

)

Employer payroll tax on employee stock transactions

(281

)

(501

)

(1,820

)

(1,636

)

Acquisition-related expenses

(51

)

(19

)

(614

)

(19

)

Non-GAAP general and administrative

$

41,023

$

38,980

$

115,041

$

109,032

GAAP general and administrative as a percentage of revenue

19

%

21

%

18

%

21

%

Non-GAAP general and administrative as a percentage of revenue

14

%

16

%

14

%

16

%

Reconciliation of loss from operations and operating margin to non-GAAP income (loss) from operations and non-GAAP operating margin:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(dollars in thousands)

Revenue

$

295,885

$

247,907

$

849,660

$

689,969

Loss from operations

(36,497

)

(50,351

)

(70,179

)

(178,343

)

Stock-based compensation expense

50,455

45,974

143,067

135,359

Amortization of acquired intangible assets

10,590

9,290

30,222

27,898

Employer payroll tax on employee stock transactions

1,730

2,038

8,261

7,343

Acquisition-related expenses

51

703

2,062

8,345

Non-GAAP income from operations

$

26,329

$

7,654

$

113,433

$

602

Operating margin

(12

%)

(20

%)

(8

%)

(26

%)

Non-GAAP operating margin

9

%

3

%

13

%

0

%

Reconciliation of net loss and net loss per share to non-GAAP net income and non-GAAP net income per share:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(in thousands, except share and per share amounts)

Revenue

$

295,885

$

247,907

$

849,660

$

689,969

Net loss

(26,388

)

(43,847

)

(43,665

)

(160,175

)

Stock-based compensation expense

50,455

45,974

143,067

135,359

Amortization of acquired intangible assets

10,590

9,290

30,222

27,898

Employer payroll tax on employee stock transactions

1,730

2,038

8,261

7,343

Acquisition-related expenses

51

703

2,062

8,345

Non-GAAP net income

$

36,438

$

14,158

$

139,947

$

18,770

Numerator:

Non-GAAP net income

$

36,438

$

14,158

$

139,947

$

18,770

Denominator:

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic

148,134,585

142,828,406

146,854,541

141,249,446

Effect of dilutive securities: Employee stock awards

3,693,792

6,285,767

5,029,245

6,672,063

Weighted-average shares used in computing net income per share attributable to common stockholders, diluted

151,828,377

149,114,173

151,883,786

147,921,509

GAAP net loss per share, basic

$

(0.18

)

$

(0.31

)

$

(0.30

)

$

(1.13

)

GAAP net loss per share, diluted

$

(0.18

)

$

(0.31

)

$

(0.30

)

$

(1.13

)

Non-GAAP net income per share, basic

$

0.25

$

0.10

$

0.95

$

0.13

Non-GAAP net income per share, diluted

$

0.24

$

0.09

$

0.92

$

0.13

Computation of free cash flow:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

(in thousands)

Net cash provided by operating activities

$

39,276

$

33,674

$

167,116

$

51,272

Purchases of property, plant, and equipment

(3,547

)

(3,379

)

(7,510

)

(8,073

)

Capitalized software development costs

(12,721

)

(7,836

)

(32,453

)

(25,187

)

Non-GAAP free cash flow

$

23,008

$

22,459

$

127,153

$

18,012

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Source: Procore Technologies, Inc.