Procore Technologies Inc (PCOR) Surpasses $1B in Annual Recurring Revenue
Annual Recurring Revenue: Exceeded $1 billion, marking a significant milestone.
Revenue Growth: Fourth quarter revenue increased by 29% year-over-year to $260 million; full year revenue up 32% to $950 million.
Gross Margin: GAAP gross margin stable at 82%; non-GAAP gross margin at 85%.
Operating Margins: GAAP operating margin improved to (14%) in Q4; non-GAAP operating margin reached 7%.
Cash Flow: Operating cash inflow of $41 million in Q4; free cash inflow of $29 million.
Customer Growth: Added 300 net new organic customers in Q4, ending with 16,367 organic customers.
Employee Growth: Full-time employees increased by 4% year-over-year to 3,694.
On February 15, 2024, Procore Technologies Inc (NYSE:PCOR), a leading provider of construction management software, released its 8-K filing, detailing financial results for the fourth quarter and full year ended December 31, 2023. The company, known for its comprehensive suite of software products including Project Financials, Invoice Management, and Analytics, has achieved a significant milestone by surpassing $1 billion in total annual recurring revenue.
Financial Performance and Operational Efficiency
Procore's financial performance in 2023 reflects robust revenue growth and margin improvement. The company's revenue for the fourth quarter reached $260 million, a 29% increase from the previous year, while full-year revenue grew by 32% to $950 million. This growth is indicative of the company's expanding customer base and the increasing adoption of its construction management software.
Despite the growth, Procore faced challenges, including a GAAP operating margin of (14%) for the fourth quarter and (23%) for the full year. However, non-GAAP operating margins showed significant improvement, reaching 7% in Q4 and 2% for the full year. This improvement demonstrates Procore's commitment to operational efficiency and its ability to scale effectively.
Customer Expansion and Market Penetration
Procore's customer base saw substantial growth, with the number of organic customers contributing more than $100,000 of annual recurring revenue increasing by 27% year-over-year. Additionally, the number of customers contributing over $1 million grew by 32%. The company ended the year with a gross revenue retention rate of 95% and a net revenue retention rate of 114%, underscoring strong customer loyalty and expanded use of Procore's platform.
The company's focus on product utilization is evident, with 74% of total annual recurring revenue generated from customers using four or more products, and 45% from those using six or more products. This strategy not only deepens customer engagement but also enhances the value proposition of Procore's software suite.
Investor and Employee Confidence
Procore's commitment to its employees and corporate culture is reflected in its ranking as #5 on Glassdoors 100 Best Places to Work in 2024. The company's workforce grew to 3,694 full-time employees, a 4% increase from the previous year. This investment in human capital is crucial for sustaining innovation and customer service excellence.
Looking ahead, Procore provides an optimistic outlook for the first quarter and full year of 2024, with expected revenue growth of 20% and a non-GAAP operating margin in the range of 7% to 8%. These projections indicate confidence in the company's growth trajectory and operational strategy.
In conclusion, Procore Technologies Inc (NYSE:PCOR) has demonstrated a strong financial performance in 2023, marked by significant revenue growth and improved operational efficiency. The company's strategic focus on customer expansion, product utilization, and employee development positions it well for continued success in the dynamic construction software market.
Explore the complete 8-K earnings release (here) from Procore Technologies Inc for further details.
This article first appeared on GuruFocus.
