0001611052-25-000007
SEC filingRevenue grew 15% YoY, but gross margin contracted to 79% and operating loss widened as investments in GTM and R&D escalated.
For the six months ended June 30, 2025, Procore delivered revenue of $634.6 million, a 15% increase year-over-year, driven by strong retention (GRR of 95%) and expansion, with 70% of revenue growth attributable to existing customers. However, gross margin contracted from 83% to 79%, as cost of revenue surged 41% to $132.7 million, primarily from a 22% increase in headcount, higher cloud hosting costs, and increased amortization of capitalized software and acquired technology. Operating loss widened to $66.5 million from $33.7 million, as operating expenses grew 15% overall. Sales & marketing expense rose 13% to $280.6 million, reflecting continued investment in the evolved go-to-market (GTM) model; R&D expense increased 24% to $176.5 million, driven by a 49% headcount expansion to build and scale platform features; and G&A expense grew 9% to $111.3 million, mainly due to higher legal fees and professional services. Net loss expanded to $54.1 million from $17.3 million, including a $4.1 million foreign tax charge related to intellectual property migration. Non-GAAP operating income was $76.1 million, down from $87.1 million, with non-GAAP operating margin falling to 12% from 16%.
Procore operates as a single reporting segment. The business model focuses on subscription-based revenue with unlimited users, generating revenue primarily from fixed fees based on annual construction volume. Key customer metrics indicate a shift toward larger, more valuable accounts: the number of customers contributing over $100,000 in ARR grew 15% year-over-year to 2,517, while total customers grew only 4% to 17,501. Current remaining performance obligations (cRPO) increased 21% to $879.5 million, with 64% of the growth from new customers. Gross retention rate improved to 95% from 94%, underscoring strong customer stickiness.
Management’s outlook emphasizes continued investment in the evolved GTM operating model, which involves a general manager structure and added product specialists to deepen customer relationships. International expansion remains a key priority, with non-U.S. revenue holding steady at 15% of total revenue. The company expects to maintain elevated cost growth in the near term, particularly in R&D and sales, as it scales headcount and platform capabilities. While macroeconomic headwinds (tariffs, interest rates, cautious spending) persist, the 21% growth in cRPO provides revenue visibility. Procore believes its $706.7 million in cash, cash equivalents, and marketable securities will fund operations for at least the next 12 months, though it may seek additional capital to pursue strategic acquisitions or share repurchases under its $300 million program.
As of June 30, 2025, Procore held $324.3 million in cash and cash equivalents and $382.5 million in marketable securities (current and non-current), totaling $706.8 million in liquidity. Shareholders' equity stood at $1.22 billion. The company has no outstanding debt, maintaining a debt-free balance sheet aside from finance lease liabilities of $29.2 million. Goodwill increased to $574.1 million, primarily from the Novorender acquisition.
Procore disclosed a new hosting services commitment of $94.0 million under a three-year agreement (March 2025 – February 2028). Additionally, the company has a contractual obligation to provide up to $5.6 million in additional funding for limited partnership investments, at the investees' option. No other material purchase commitments were noted beyond those in the prior annual report.
During the six months ended June 30, 2025, Procore repurchased and retired 1,499,094 shares of common stock at a weighted-average price of $68.82 per share, for a total of $103.2 million. This was executed under a $300.0 million stock repurchase program authorized in October 2024, which expires on October 29, 2025. The company did not declare dividends. Capital expenditures totaled $39.6 million, consisting of $7.0 million for property and equipment and $32.6 million for capitalized software development costs.
Procore operates as a single operating segment. The CEO, as the chief operating decision maker, evaluates financial performance on a consolidated basis. However, geographic revenue breakdown is provided: for the six months ended June 30, 2025, U.S. revenue was $540.7 million (85% of total) and rest of world was $93.8 million (15%). This mix is consistent year-over-year.