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SEC filingMD&A highlights 14% QoQ revenue growth driven by existing customers, but GAAP net loss widened amid higher cost of revenue and GTM investments.
For the three months ended June 30, 2025, Procore reported revenue of $323.9 million, a 14% increase from $284.3 million in the same period last year. Growth was predominantly driven by existing customers (82% of the increase), with new customers contributing the remainder. However, gross margin contracted to 79% from 83% in the prior-year quarter, as cost of revenue surged 41% to $67.7 million. The primary drivers were higher personnel-related costs (including a 22% headcount increase), increased amortization of capitalized software, and higher third-party cloud hosting costs.
Operating expenses rose across all categories. Sales and marketing expenses increased 11% YoY to $141.9 million, driven by a 7% headcount expansion and higher professional fees. Research and development expenses grew 23% YoY to $88.9 million, reflecting a 49% increase in headcount as part of the company's global workforce strategy. General and administrative expenses rose 10% YoY to $55.7 million, primarily due to higher legal fees.
The net loss widened to $21.1 million from $6.3 million in Q2 2024, driven by the increased operating expenses and a $799K decline in interest income. Operating margin fell to -9% from -5%. On a non-GAAP basis, however, operating margin improved to 13% (from 18% a year ago), excluding $58.4 million in stock-based compensation, amortization of intangibles, and acquisition-related costs.
Procore does not report formal operating segments but provides revenue breakdown by customer type and geography. Subscription revenue remains the sole revenue stream (100% of total). Non-U.S. revenue represented 15% of total revenue for both six-month periods ended June 30, 2025 and 2024, indicating stable international contribution despite growth investments. The company's customer base continues to skew toward larger accounts: the number of customers with >$100K ARR grew 15% YoY to 2,517, while total customer count increased only 4% to 17,501. This mix shift is driven by the GTM model evolution, which emphasizes deeper relationships with large general contractors and owners.
Management did not provide quantitative guidance. However, the MD&A outlined several strategic priorities: (1) continuing to evolve the go-to-market (GTM) operating model, which has caused near-term disruption but is expected to improve long-term efficiency; (2) investing in product innovation (e.g., Procore Pay, Novorender acquisition); (3) international expansion, particularly in EMEA and Asia-Pacific; and (4) balanced capital allocation, including share repurchases ($103.2 million in H1 2025 under a $300 million authorization).
Key forward-looking indicators include cRPO growth of 21% YoY to $879.5 million, signaling healthy demand, though management cautioned that contract duration lengthening may reduce the metric's correlation with near-term revenue. The company expects operating losses to persist in the near term as GTM investments continue.
As of June 30, 2025, Procore held $324.3 million in cash and cash equivalents and $382.5 million in marketable securities, totaling $706.8 million in liquid assets. The company has no outstanding debt, with total stockholders' equity of $1,217.6 million. The current ratio (current assets / current liabilities) is approximately 1.29, indicating adequate short-term liquidity.
Procore's material purchase commitments include a $94.0 million hosting services agreement executed during the six months ended June 30, 2025, with payments due from March 2025 through February 2028. No other material changes to purchase commitments from the prior year were disclosed. Additionally, the company has $72.4 million in total lease obligations (operating and finance) as of June 30, 2025, with maturities extending to 2038.
During the first half of 2025, Procore repurchased 1,499,094 shares of common stock for $103.2 million under its $300 million buyback program authorized in October 2024, leaving $196.8 million remaining as of June 30, 2025. The company paid no dividends. Capital expenditures on property and equipment totaled $7.0 million, reflecting continued investment in infrastructure.
Procore operates as a single operating segment. Revenue by geography remained stable, with the United States accounting for 85% ($540.7 million) and the rest of the world 15% ($93.8 million) for the six months ended June 30, 2025.
Operating cash flow (CFO) of $96.9M significantly exceeded the net loss of $(54.1)M, indicating strong underlying cash generation despite GAAP losses. The primary non-cash add-backs were stock-based compensation ($103.9M) and depreciation/amortization ($54.1M). Capex (including capitalized software) totaled $39.6M, resulting in an implied free cash flow of $57.3M (not officially stated). Working capital changes were mixed: accounts receivable added $54.6M (collections), while deferred revenue decreased $(28.3)M and prepaid expenses increased $(20.2)M. The company deployed $103.2M on share repurchases, more than consuming CFO and implying reliance on cash reserves. Financing cash flow was negative $(131.8M), driven by repurchases and tax withholdings. Overall, cash from operations is solid but working capital swings and high stock-based compensation merit monitoring.