Procore Technologies, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue was $402 million for the quarter ended September 30, 2026, an increase of 19% year-over-year.
• GAAP gross margin was 80% and non-GAAP gross margin was 84%.
• GAAP operating margin was (2%) and non-GAAP operating margin was 23%.
• Operating cash inflow for the quarter was $96 million, an increase of 8% year-over-year.
• Free cash inflow for the quarter was $73 million, an increase of 8% year-over-year.
• GAAP net loss was $4.6 million, compared to a net loss of $9.1 million in the prior year period.
• Non-GAAP net income was $77.4 million, compared to $64.6 million in the prior year period.
• Diluted non-GAAP earnings per share was $0.51, compared to $0.42 in the prior year period.
• Total remaining performance obligations were $1.81 billion as of September 30, 2026, a 28% increase from $1.41 billion in the prior year period.

Guidance and Future Outlook:

• Fourth Quarter 2026 revenue is expected to be $420 million to $422 million, including $19 million in inorganic revenue from DroneDeploy, representing 20.3% to 20.9% year-over-year growth.
• Fourth Quarter 2026 non-GAAP operating margin is expected to be 15.5% to 16.0%.
• Full Year 2026 revenue is expected to be $1,557.0 million to $1,559.0 million, including $24 million in inorganic revenue from DroneDeploy, representing 17.7% to 17.9% year-over-year growth.
• Full Year 2026 non-GAAP operating margin is expected to be 19.0% to 19.5%.
• Full Year 2026 free cash flow margin is expected to be 18.0%, including approximately $23 million in one-time cash payments related to the DroneDeploy acquisition; excluding these payments, the margin is expected to be 19.5%.
• Full Year 2027 non-GAAP operating margin is expected to be 25%.

Business Segments and Product Lines:

• Revenue growth included 2 percentage points from the acquisition of DroneDeploy.
• Procore AI's digital coworkers were made generally available.
• The Asset Register was introduced to continuously capture asset data and streamline contractor-to-owner project handovers.
• Ground Pro via DroneDeploy was launched to turn everyday mobile site captures into actionable, measurable 3D records.
• A new voice-first mobile experience, Procore AI Go, was announced.
• Strategic collaborations with NVIDIA and IBM were announced.

Market and Competitive Landscape:

• Procore achieved a gross revenue retention rate of 95% in the third quarter.
• The number of organic customers contributing more than $100,000 of annual recurring revenue totaled 2,968 as of September 30, 2026, an increase of 14% year-over-year.
• The company acquired DroneDeploy to expand visual intelligence and AI capabilities.

Risks and Challenges:

• Forward-looking statements involve risks including the ability to achieve or maintain future profitability, manage growth, and successfully integrate acquisitions.
• Risks include challenges in the construction management software market, digitization rates, inflation, interest rates, tariffs, and geopolitical conditions.
• Risks include the ability to attract new customers, retain existing customers, and expand internationally.
• Risks include the ability to successfully incorporate AI into products and services and the effects of increased competition.
• Risks include the ability to execute the stock repurchase program and manage debt.

Management Commentary and Tone:

• President and CEO Ajei Gopal described Q3 as "another outstanding quarter" with revenue and margins above the high end of guidance.
• CFO Rachel Pyles stated that performance reflects "continued excellent execution" and reinforced the commitment to "durable, profitable growth and compounding free cash flow per share."
• Management expressed confidence in becoming a "next-generation, AI-native construction management platform."

Other Key Points:

• On October 30, 2026, the Board of Directors authorized a new stock repurchase program to repurchase up to $300 million of outstanding common stock, expiring on October 30, 2027.
• The previous $300 million stock repurchase program expired on November 3, 2026.
• The company issued $950 million in convertible notes during the nine months ended September 30, 2026.
• The company acquired DroneDeploy for $790.5 million in cash during the third quarter.
• GAAP net loss per share was $(0.03) for the quarter, compared to $(0.06) in the prior year period.
• Weighted average shares outstanding for GAAP net loss per share were 150.4 million, relatively flat year-over-year.
• Weighted average shares for non-GAAP earnings per share were 151.7 million, a 1% decrease year-over-year.