Procore Technologies exemplifies innovation and growth in the construction industry.
Procore Technologies announced a significant increase in Q2 revenue, reaching $323.9 million, a 14% rise from the previous year. Despite concerns over profitability and cash flow, customer growth remains strong with a 95% gross revenue retention rate. The company’s operating expenses rose due to increased investments in research and development. Two strategic acquisitions aimed at enhancing Building Information Modeling capabilities were completed during this quarter. Procore projects continued revenue growth for Q3 and full-year 2025, while remaining cautious about industry challenges.
Procore Technologies, a prominent name in construction management software, has announced its financial results for the second quarter of FY2025. The report, released on July 31, 2025, highlighted a notable increase in revenue, confirming the company’s positive trajectory despite some challenges in operating margins and cash flow.
The company reported a GAAP revenue of $323.9 million for the second quarter, marking a 14% increase from $284.6 million in the same quarter last year. This revenue figure surpassed analysts’ expectations of $312.4 million, showcasing Procore’s strong performance in the market.
Despite the revenue growth, Procore faced a decline in its non-GAAP operating margin, which dropped to 13% compared to 18% in Q2 2024. This decrease reflects the impact of rising operating expenses as the company invests heavily in research and development. Additionally, the company recorded a significant drop in free cash flow, falling to $10.6 million from $46.6 million in Q2 2024, and down from $47 million in Q1 2025.
In terms of customer engagement, Procore achieved a total organic customer count of 17,501, which is a 15% year-over-year increase. The company reported that 2,517 customers are generating more than $100,000 in annual recurring revenue. During the quarter, Procore added 195 net new organic customers, demonstrating stable demand for its software solutions. The company’s gross revenue retention rate is impressively high at 95%, indicating strong customer loyalty and satisfaction.
Operating expenditures increased during the quarter due to Procore’s commitment to enhancing its software offerings. Research and development expenses spiked by 23%, totaling $88.9 million, while capitalized software development costs rose from $10.2 million in Q2 2024 to $17.2 million.
Procore also made strategic moves by completing two key acquisitions—Novorender and Flypaper Technologies. These acquisitions are aimed at bolstering its Building Information Modeling (BIM) capabilities, further positioning Procore as a leader in construction technology.
In a notable development, Procore received the Federal Risk and Authorization Management Program (FedRAMP) “In Process” designation, which will pave the way for potential sales into government markets, enhancing its growth opportunities in the public sector.
The company reported a significant increase in remaining performance obligations (RPO), reflecting strong sales momentum and long-term customer engagement. For Q3 2025, Procore’s revenue is projected to be between $326 million and $328 million, indicating a year-over-year growth of 10% to 11%. The full-year revenue forecast is set between $1,299 million and $1,302 million, predicting an overall growth of approximately 13%.
Management has expressed a cautious outlook for the near term due to anticipated slower construction activity and various macroeconomic risks. Despite these challenges, the company is focused on achieving balanced growth and maintaining cost discipline. Investors are encouraged to closely monitor margin trends, the stability of cash flow, rates of large customer acquisition, and the progress of Procore’s international growth strategy.
Overall, while Procore Technologies has reported strong revenues and growth in customer numbers, the challenges surrounding cash flow and profit margins warrant careful attention as the company navigates through uncertain market conditions.
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