Earnings call transcript Q1 2023

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Operator

Good afternoon, everyone. I would like to welcome you all to the Procore Technologies, Inc. Full Year 2023 Q1 Earnings Call. My name is Rebecca, and I'll be your event specialist, operating today's call. After the speaker's presentation today, we will conduct a question-and-answer session. Instructions]. [Operator

like conference now Puljiz. to turn to would over the Matthew I

Matthew, you're when go So, ahead ready. please

Matthew Puljiz

me VP Good Thanks. afternoon, Finance, Founder, Puljiz, earnings SVP CEO; Howard Paul Finance. everyone. XXXX Tooey Lyandres, With President of CFO; and Procore's first Welcome quarter I'm call. today Courtemanche, are Fu, and to of Matthew

periodic the replay our reports recorded website, today, which issued Further our disclosure release our SEC. the results of with available the and of available filed can the Investor on Today’s press and being call. section be of conclusion our will found in is following Relations is call be a

this products, our call on forward-looking include financial made customer statements macroeconomic results, operations, regarding conditions. Comments demand, may geopolitical and

as statements a subject today, on as forward-looking on May prediction statements future management’s views XXXX. All and rely not risks, current should to are events. are of X, and forward-looking uncertainties assumptions based and of expectations You

no unanticipated representing these statements Procore views this replayed undertakes any the Therefore, as new reviewed contain law. the may not current after information. subsequent except relied information call be not required events, any information accurate or If is call today, should forward-looking as by reflect date. to during as presented statements obligation upon to update of or our

A release. also will press non-GAAP of reconciliation to investors. provide refer in GAAP to our We to is information certain to non-GAAP measures additional measures provided financial

hand me let that, Tooey. with to And it

Tooey F. Courtemanche

results. work to to you the hard gratitude by our sincere joining Hi, QX expressing for and thanks us today. and Matt, begin I'm going everyone for welcome thank team's deliver my

a quarter. So, let share few from highlights the dive me in straight and

customers XXX XX,XXX year-over-year added over reaching customers the the quarter. grew and revenue by XX% net In of QX, end over we total we new

improving ever of that Companies, row, deliver Best out in in our platform number construction our We highest the of XXX. one to operating continue business. were the a for year ranking testament we reaching demonstrate GX's continues Global value growth, the Software the industry. a third This is And, leverage named while durable to of to XX to

a with around the days, road, meeting our me and Over XX of shareholders our of and stay have demand time globe. the to customers the about to had lot Investors often owners. privilege close environment, all I I on broader the the and industry asked continue past spent

in continue labor that busier to they're customers And, remain and that ever. now still in Our share shortage backlogs many the their healthy, beating than demand. biggest challenge is that the cases

party external have indices we that stable. Additionally, third remained in watch aggregate,

notice a QX. However, we did new in dynamic surface

awarded. volume a we quarter. customers that that some saw Specifically, small hasn't came work renewal within construction yet in saw cautiousness portion of been We but for on the our commitments, up this

illustrate which I Imagine a hypothetical example, you that give me will help the Let U.S. company construction you're a this. you believe here in

you not the a have obtaining project that have of potential for about about and government difficulty secured but spending, employment top the new in hearing necessarily a you're also jobs. that, You're news which of backlog, about future financing, reading on you the concerned committed future record fully and work pipeline recession are means and

our the takes QX. naturally you customers This be a cautious, leave in and leave signals, your conservatism case for slight you some illustrates scenario more mixed simple in just These confused demonstrated worse. business the turn of

for has customers' reduced uncertainty or desire efficiency for our not the technology. external However, demand

customers and construction with seen demand net to fact, Procore. are majority customer volume grow In continuing new of in the return we've a drive adds,

look of in each at external aggregate, the gauge and Paul, health important internal indicators to context, individual data the will these later. of further in it's elaborate illustrate on overall help all points and to take why point They the to industry.

is up the bring office topic and nuance construction. estate commercial impact regularly crisis real Another on its investors

Let me two to for is this our be notable headwind that clear, do business believe reasons. a not we very

construction office has XXXX, the and did muted over since two First, to largely been past years. not our success contribute

represents industry. construction as office percentage Historically, some small a the often only residential. mistakenly construction because has industry the described overall of we've and This construction. commercial confusion, folks office commercial, Second, with buildings created equate infrastructure

So, clarify I view moment to think to take overall we it's important a industry. for me how the

landscape office spending. is start Within there and non-residential. for to highest Census down XX construction place the Great U.S. they across subcategories The over definition non-residential, the are construction Bureau's between break X% level, with lodging, residential commercial, put perspective, To XXXX. healthcare, transportation the give place than buildings in office U.S. education, buildings, you less more. value in total public of and some much comprise much, infrastructure construction

and sector shared have also before, anticipate long term, data while from one buildings, grow. in areas. manufacturing, seeing other wanes, we when And I've been office infrastructure education demand Such healthy in we sectors other impacted Longer non-residential seen demand some public like a spend. oftentimes time, recently, as further centers. areas in have within tailwinds more growth for As

that demand commercial where manage aggregate and why our diverse volume go my answer construction, It's office is. real most. they work, more and estate customers Ultimately, construction when ask holistic. portfolios investors is is the This overall will matters the of and to me demand about

near-term, evolve the Procore times platform the efficiencies process, is While of in is the to construction in in what that clear efficiencies broader prioritize uncertainty environment provides. customers continues that the

focus to more them platform on faster, helps customers and better, a Our safer critical that remains our build ROI delivering efficiently. powerful mission with

U.S. contractors and lack the staff functionality starting specialty Tri-City with in one largest And a result, solutions and Let on sports as Company a is legacy the examples, Electric multifamily customer. industrial, me contractor spanning pushed their diverse that the commercial, the of change. Their work Iowa a few a field required. share electrical They new they markets. of portfolio for a oldest

advanced the deliver, representing support they our to to we significant they're Electric existing customers clients. Tri-City the from could us. hours efficient displace that communication, a with continuing Procore, labor systems functionality Procore, only add. join to Procore existing them to more help over office XXX expanding Not Ultimately, and our in their per evaluating meaningful Procore through ROI save Upon estimated week due value hours, field chose

Richardson Vegas hospitality focus Procore A. the largest Las is teams. in history on because of W. Las of Vegas. advanced customer with contractors that entertainment, a across projects some of and originally has efficiencies a the based a platform and built and became their They our enabled collaboration general

resorts course additional scale product large the Las Over to volumes, and construction to including they of expand continued leverage for casino our our quarter. new throughout They value secure dollars to Vegas. partnership, add plan hotel projects billions partnership offerings two this continued major construction in of

contractors, growth. to general owners. provider are in to leading addition Data world. is hyperscale a non-residential expand within center In experiencing continued centers that I data we construction data campuses the Centers Vantage area continue of with mentioned around earlier an

across five have committed and a global become this to to of quarter these construction America, in operator North years, they manage Pacific. Over exponentially Asia to all us Having of been their projects. their they and financials regions, a of execution volume grown past the EMEA Procore customer each the globally

analytics region. quality been financials project they've ERP and in management, out testing each our Previously, and products globally, safety and and Connector using

getting Procore pressing are part actively to additional our this and most from now Procore As help underscore its of the relationships financials they ability expansion, and the These the globally customer products. solve customers industry evaluating are value platform using challenges. are our

of which, manage they launch of Fintech the talk the you've risk of challenges announced our over how goal initiatives we the growth. quarters, Speaking past long-term us costs, of Procore about to March, largest industry's our accelerate construction In biggest and opportunities, Fintech heard customers our overarching several Advisors, solving our and helping one at and one upfront tie-back Risk insurance. of aimed

on. comprising risk. of new the is still multiple individual select on insurance Insurance insurance data consuming typically and price as manual of a properly a construction and expensive. as are complicated, a industry's means, insurance revenues of budget for project lack and points obligated they one percentage stakeholders coverage to brokerage across of reminder, into processes are project a construction these expensive percentage most carriers visibility time risk costs projects each all have cumbersome highly and As Which contractually stakeholders. the relevant of All work sources and to

reward data. incurring customers' better insurance risk leveraging our customers technology unique to our any and this policies our them great a be program. to claims is our solve customers' enhanced some very to with pain represents leveraging as for surety clear, and insurance for and Ultimately, with mitigate to terms. Procore cases But, Procore Procore providing serve insurance a aim by a in one We of points. of is Advisors opportunity modern solutions. to that a help will subset offers Risk our Procore This biggest help brokerage and pricing data underwrite not exposure broker construction by risk

we that positioned uniquely are challenge for to this a We of solve reasons. believe couple

brand over industry. that solutions, insurance of we a with XX,XXX product the the developed they of our higher and can the drive more platform and data them and savings. have a First, of is opportunity expand construction we've customers I access the product users, generate more help cycle valuable with a giving enabling that us has, Therefore, unique mean virtuous adoption. relationships to What to trusted lines adoption by customer a millions

also as the to favorable customers terms offer insurance them data in Procore us generate proprietary This form savings. obtain that insurance realize adopting can we proprietary leverage tangible and our of help customers direct value second, our can programs. And to well help as enable from

a want forward this early is very Paul a that as this more sharing bit but look we later, continue emphasize So, of this to evolve while going to long-term in to initiative, color opportunity, and our we progress on we are the offering. do stages grow and I to it's share

you more to over scale I to to and personally, closely are moment past to Finally, helping thrilled CFO, to the he business new with many unlock and going at a his a customers working be his Fintech be help today. take to is role just am new forward a them new Howard. President a role passing and as welcome, we the effective I with moment tremendous value Fintech. the next as also torch onto President where I partner and years as continue to further we and week, leadership them to of Paul I thank, want starting our our four the to Howard, know want CFO, of for will CFO take to partnership Look continue scale. of look to for Paul, as Procore, And that

on wrap another the we and continue To bottom of line, growth. quarter efficient our journey as top up, we both of growth had the

partnership in connecting the and we place, a industry, on our construction advancing value and solving on the construction long-term. customers remain us, in biggest of of team the global have focused Looking create close exceptional ahead, on commitment believe we platform. with challenges over our and mission I in shareholders executing will in front long-term to the our opportunities significant our for the everyone

With to, let hand that, me Paul. over it

Paul Lyandres

you, Good thank afternoon, the everyone, Tooey, kind and words. for

indicated, earnings working at As Procore, embark call want I on you been a marks my Tooey last partnership our leading And thank the of truly has all Fintech you. to organization. as chapter as I today It CFO. privilege my for with next

Now quickly color results, with Today, to, and conclude recap some on to performance the our over quarter. on I'll our Howard, outlook. hand to share it our

XX% was million up year-over-year. in QX $XXX Revenue

growing and $X short-term Our balance margin representing X%. an non-GAAP or key was And our sheet RPO continued operating of operating negative specifically metrics, greater deferred year-over-year. revenue loss short-term XX% million

performance the and performance. that color to in business. on Our take our multiple I'd a growth QX of some across facets well back like saw share additional we step was rounded,

new our noted net you from a sequential we driven drop recall higher smallest First, in customers. may QX, customer churn in within by primarily back logo QX, adds

as As is new impact dollar to a net wanted adds financial on not saw said, out to we this be QX we return what a given we performed trend, did That we expected. lows. results as have not we to yet in historical call saw shared, our material customer churn QX that proving

see to commitments. customers small cautiousness Second, construction as volume portion exercise of started our in their a mentioned, This Tooey quarter, we some

of this in apparent wasn't heightened this believe results, minority within We of interest share awarded. a we representing of in on conservatism the for growing construction wanted reflects Despite already base. saw we to customers majority increase provide volumes our has a Although still been some work customers of within in transparency, volume our financial the sense only committing color we what an this, of customer our Procore, saw. the that

As, sentiment. Howard, our the shortly, cautious and factor outlook customer for will explain previous potential in current already

impacted XX% one were total by QX basis, Third, to grew quarters, a year-over-year. headwinds. to international points currency of and Similar to grew On Therefore, revenue total approximately revenue on basis, and revenue headwinds growth year-over-year point of our year-over-year growth. contributed international prior FX currency XX% headwind results a international revenue constant eight

you've the a efficient finally, priority few over instilled being pursuit upon. is to of the heard past And us our this across quarters, growth organization need how we reference improve as and

This quarter, we in saw manifest the this business. mindset

QX relatively that savings profile an a smaller guidance. was in Specifically, compared unique, outperformance as numerous it result our our lower was areas of in aggregate expense across resulted meaningful to as

[efficient] While less (ph) like this hosting things fees QX. unique and included to travel one-time

to did hiring delays, not typically consist it Notably, objectives. or reductions top lower intentional expenses, other related of commission sacrificing line

lower a employee rate In anticipated. actually in attrition fact, than we QX had

to is magnitude something expect profile, efficiency QX While continue in we QX. not of captured intend the necessarily to our savings should to in repeat investors improvements making the

of growing and the over want more stages Procore to this of construction Before offering, want a minutes in and of journey outlook, I coverage help bit our on Advisors. broker insurance. to that point turn provide in few I to we opportunity the unique a are expecting to types pain a Procore the alleviate is it emphasize, Risk long a to, we in ahead world for a spend early are major sharing can help underwrite. Howard, I

In terms there of currently monetization, two are avenues.

claims through policy, a serving the commission, an the we for from serving select for as party by the by through is underwriting policies sell the premiums. type. the Procore carriers is varies in taking partners evaluation as broker, expertise carrier of first policies The share agent And industry who on a whereby earn which a second, risk enhanced and policy additional and with their brokerage of in is providing exchange data which third

insurance top-line look do initiative of because balance cases, financial to I material next Risk contribution distribution for It's a forward role this important bears and to the partner we exposure my expect President effort. to From clear, both sheet zero insurance related has of Fintech. note, proud in next these the the be incredibly the team on we that a claims. who take launch not of this the of risk to are I'm as work Procore to over Advisors our to in claims, few years done we perspective, carrier nurturing

to pass I'll that, provide outlook. With it over Howard, our to,

Howard Fu

thank and to everyone you call. Paul, on the Thanks,

that our share folks want I remind guidance conviction remains a outlook, and environment. very we in unchanged. high Before revenue our of margin I guidance which any to have can philosophy level on almost We set our we at deliver

not our to sentiment but takes become that, allows guidance quarter, pronounced. year observed into cautious further customer QX our it for the is also Specifically, here this account we guidance flexibility for and With XXXX. full only

be million operating expected negative X.X%. representing negative to between we For QX the is second and $XXX XX%. between and XX% and XXXX, non-GAAP of between quarter million year-over-year expect margin $XXX revenue growth X.X%

and $XXX an XX%, full For fiscal million million, $XX our between year of and previous XXXX, increase between which revenue year-over-year representing the $XXX XX% guidance. is year growth of million total expect we full from

year XXX As of year. we of the year-over-year basis Paul the that and points. revenue implies basis noted, margin the we to of Procore an insurance last given negative Non-GAAP expansion guidance our Advisors quarter not issued expecting and are contribution early this represents points expected for which Risk X.X% improvement between negative XXX X.X% offering, be from is initiative stages from margin operating material

Procore next indicated, with Paul CFO. next I my starting and be will Tooey week, as As chapter

the And Procore have I I appreciation everything an and Paul, for to Over the accomplished the the last with both had team. work opportunity to over developed as leadership two Tooey, potential from years, as past has closely CFO. all look have continuing two of advance as you tremendous decades, well the Procore’s with I to working mission new capacity my ahead. forward in

shareholders and us for our thank communities partners, customers, giving as industry like well I'd this serve opportunity. as we to close, employees, To the the

let's the to operator begin Now Q&A. it over to turn

Operator

you. [Operator Thank Instructions].

Auty MoffettNathanson. We is question SVB the first in Sterling have line from of phone the

Sterling Auty

terms guys. talked results, question, drop say being a to of for looking the Yes, should the terms Hi, the but maybe in I'll whether stable. move remainder these CFO to broader what year? Tooey, thanks. in about determine investors as What to what broader Procore at encouraged of indices we be performance about would or industries they my through to finish with maybe mic these you of should be concerned construction for on as Paul, turn way they the you

Tooey F. Courtemanche

question. great Sterling, way, hear great from you to the By Yes. and

to thing will the anybody We I as sentiment. quarter, particular have first I is index point the number at at external don't we of some very customers when remarks, say as any conversations the are With with to I they I mixed been well look in labor one point. out overall remain a But kind shortage as with our when factors mentioned of one come is, positive lot signals. kind the up data still challenge. had the internal opening that would strong, of past. all we've over as Backlogs been the the look have largely there in But

would deal talking was banks, good, ago was obtain was were after one their he A customer asked referenced convinced talking they all other to year the been their to day a that except another had I was great financed. customer call backlog, deal this literally they with. him follow-up I But financing has many a tsunami have said this the to and and backlog of work, had a about is talking of they unable in about and it that many, then as to example he he to that project

customers to come external know heard all our different data points, we indicate from we deliver ability what like but upon you what's we I but these want do, them but these that when at that points, do, to in of try these we to haven't contradicting you are are our in or in we we we thinking, widespread interpret aggregate. So, back there's confident thinking systematic. just control, our But only about anything to look challenges are that data -- all

Sterling Auty

me, That just quick for makes follow-up. sense one

it the So decide credit AGC's projects would either customers example a mentioned more of are that -- tighter that it savings market financing, would to you concern cost is or is in that's concerned that efforts about delay that or concern a in currently that be backlog? cancel

Tooey F. Courtemanche

Well, let Sterling, you phone little is this bit, calls me zoom that out many a had. single that say example I in a many,

the know that I one again, sentiment just there that it industry small data many specifics so don't fact so deal year deal. illustrate wasn't I just are that's it have I'm So, point, the been that last is particular trying that when behind this -- today. different so might but the sectors that everyone's big know differently. to financed But many the there's was financed experiencing and slightly

Sterling Auty

Understood. Thank you.

Tooey F. Courtemanche

Thanks. sir. Sure,

Operator

now Canaccord. have Hynes We of DJ

DJ Hynes

that latter growth. obviously I'm quarter. terms I me is of you're into the Great new for of seeing the asking Is maybe And better. I it? in one some Thanks having the conservatism? are guys. of just of of what or it Paul, growth pockets guess duration trying there's you on much where on some in duration that seeing the seeing. versus deals? triangulate Hey, CRPO with What call. just is the RPO for around sticking headwinds I'm the you reason mean, Is challenge kind we're playing

Paul Lyandres

QX it not the to that you over a of as up, about, referencing lot what general. at long index those imagine component traditionally Tooey much look RPO is timing around in it that moving comes is meaningful driver which tied would you When What but tell conservatism the would variables term long there's that talking as to there the I QX RPO, multi-year status I lag term renewal. of When a has between was a is of of here. you're come I

concern. seeing in of But most being And larger what it something there more an RPO commitments. up sign the cautious for of long so isn't part, is you're term that for longer element to drives term customers

DJ Hynes

Yes.

maybe then more strategic question. And Okay. a

of I safety, mature products. one and quality think your more So

of then So entrance base? part terms interestingly, these and more potential adoption data in where you safety a, deliver there? in quality is cost any to the part attach rates way And of in of the driven into like does b, savings are accelerate insurance kind and

Tooey F. Courtemanche

Great question.

quality the So of a amount terms Investor a overall which break the what look, I'd our safety we like ARR. our products had about of wallet recall, the in product is and And oldest long always given of if customer time the marketplace which Day actually the bring is penetrated more -- share looked is, drive products. is you we've where base ground you'll our older narrative in our talked one to among of and we our back

these folks and better do more have as solutions we we not to opportunity adopting So create we about us penetration a we your adopt provide the go help in you. there the to will safety we and of and mind and does you we believe able pretty only the can insurance because this with more you're best carriers data be that our believe prove we But the get the carriers healthy this will practices, for that there that as ride believe the to we about that it along rates to quality point, initiative. do can partners bring rest majority to think

different safety. unique and it's and multiple keep financials, in across believe data data valuable we that data However, will there's project not and there's in be management, There's products mind, time. to quality

Howard Fu

because is understanding to way to our risk. our add just products management software, DJ, risk we're of business that to with this of think all primarily the Yes, it contributing

folks insurance all encourage our of to the suites. product for benefit a of adoption there's So

DJ Hynes

Thanks color guys. Yep. the sense. Makes for

Tooey F. Courtemanche

DJ. Thanks, Yeah.

Operator

Saket have now You of Kalia Barclays.

Saket Kalia

talk from love maybe change to questions Hey, the up Okay. a environment. just guys. about to landscape. a little the bit competitive little Tooey, Thanks the bit taking here. for I'd it

this I bit in a calls. little think talked prior about you've

changes landscape. if Just shifts in there know, well. slight update maybe the competitive some the backdrop an on some could as just give us in Particularly as don't macro I maybe you that. Curious are,

Tooey F. Courtemanche

Yes.

Saket, question. good So,

the major all. no last is of there we that the quarter updates significant kind Here's seen at been short haven't like really anything from answer change has

won last restate pointed I saw But the that frequently value industry. XXXX, want we which of which things change them against we less I in we more seen, is to one was largest that's think quarter, XXXX. that again ARR of had One referencing maybe out the the and competitors in the we a we our testament I than did to of provide

But I want very to kind be clear. of

well have XX% it's pen dynamic coming you analog And are We are folks meaningful. from changes to not a competitive we not this any very and dynamic. greenfield paper seen remember, talk the that probably every know and of opportunities competitive that day

much not to So report on that front.

Saket Kalia

has. you. yes, it's And referring for break I to update. to. that hard know Paul, helpful it. Very I out maybe that was the that Procore Got was one the exposure

that said I So but like good X% industry Is or that to in your hard it's I this to Procore? under you mix subcategories I -- or proxy a think categories want X% for sort something office of of mentioned said I But think construction. put out, from or XX words XX don't know we mouth I construction. think really break Tooey

Paul Lyandres

Yes.

over family not investors to we've is with customers. along you right, I what specific have years we tell shared industry residential, of So I consistent, where those Procore's in don't referencing that would the construction But the single of kind look, exposure X% meaningful arm world. would the clarify the lines, we're remains is

looking to as it, as mix XX so you you that think the business back would how we metric our point about is construction of can give those distribution proxy it's the why being I distribution consistently tell own categories aggregate the you to think to watch. we and back of best volume how the long of the about out to of And at critical

Saket Kalia

Thanks Very guys. helpful.

Tooey F. Courtemanche

Thanks Saket.

Operator

you. Thank

Piper from Sandler. comes Brent with question next Your Bracelin

Brent Bracelin

that wanted starts environment I had, given to as particularly up go down the afternoon. out where the you to X%, XX%. model just in us strength overall Good about residential non really back RAS here, of XX%, think an to we diversification RPO stood goes the think I market down just

the business walk sell where diversified you Any just model. base? constructions coming us the strength more more a products into So you're the seeing relative shift the kind just through quarter versus color here, to industry this a We're us help in a seeing why? what to I the ability Is pinpoint from? your of signals. to Are to signals but while like kind environment good an challenging looks get mixed to those headwinds. kind with of in cyclical be mixed of for going strength trying pretty in understand

Tooey F. Courtemanche

to we think world we were strength to hit describe spelled seen, business you non-residential look, out in trying resilience. to meaningful you the And mean, pretty earlier kind in when remarks is numbers show when within Procore, his I Yes, saw speaking you saw were about we certainly started you really it out call meaningful have of kind multi-family. what what we of actually the where of have right. We residential a take

has carve Where want say that don't go residential. why book. business very to up touch and resilience back a themselves say diversified if the to different than in customers world all don't of non-residential our its to the manage I participate will Procore's non-residential categories that strength is make do that look But we and they I you the broader in of that's out the very with multi-family, playing So we it and bring are numbers residential actually really category. fact

volume alongside this journey construction of them And watching overall watching with continue really of so in shift, the benefit the but we going have to industry increase.

that in in a of obviously are is more to CRPO. that don't very sell penetration But that success drive continuing see diminish the ability I our to so good want healthy to with cross terms for and we further that dynamic us And contributor of products.

And so certainly to the combined success. those two that contributed things of

Brent Bracelin

a Howard growing And transition, obviously services. about there. all of think appreciate role a new the But be think Howard, contribution. to yourself I one portfolio, forward you're look financing, about portfolio I from bar [Indiscernible] Fintech in in with Helpful conversation quick on PCN entering Paul, follow-up Fintech materials as going for about seriousness, you're creating talking to just we advisers, as low next pay, the Procore risk week. the you quarter services, then color. next to

What What impact dedicating spend you do your time what attention relative to about three, four to week? can next you areas? your most excited those you Thanks. on have are

Tooey F. Courtemanche

wonderful in it and the middle that's different look, as be across I'm half my the thing going let Yes, well. my Howard the to about answer time those on speak transition. portfolios. I'll setting to

for us, amount have transition, we this comes deep talked the a of of bench, I here previous decision Howard finance got about really energy to the this that had that biggest to dedicate And big really the just back we've go focus is the obviously, in what idea and and driver in confidence to that can call in think there where team. a tremendous really I opportunity this impact.

of focus, have to might but questions. I taken excited Howard pretty So kind

Howard Fu

No, that's okay. Thanks.

the for make continuing sure of part, for been A going. I worse Tooey at be years. about excited to joined better last things I is I So, very want call over two out hip couple that to the look and I've is where or Procore

terms going from And standpoint. in so a of is and financial business the strategic we operational are aligned very where

into would categories three it directions I'm I and those in there's of where different to categories. different a time, go lot up my break going about to focus Specifically typically

Tooey has And about operational this is of growth. back talking First, in ties been terms efficient around to excellence. what

of middle term, up connect sure media The the the term, capital term the both our long within of monetization across about company. and that to really the category things and to geo allocation is lined we short then by across functions And third together, short, your second we resources those making term. point around two the deploy is different the both in have the terms all by where the product

with of what a leadership actually been what continuation been and couple the years already the is and along the team. that last And over doing rest I've of we've of focusing Paul Tooey and really already

Brent Bracelin

you. Thank color. Helpful

Tooey F. Courtemanche

you. Thank

Operator

Jefferies. now We Thill of have Brent

Brent Thill

the magnitude can commonalities there? headwinds earlier Did a just later saw any terms of it any additional quarter of quarter? or Are to color where in you you of some in see the to back in going Tooey that? you started give Thanks. us you there the Just the sense see,

is and the guess magnitude I beat. guidance of your Paul And above Howard, the for

So asking the the of many the kind Thanks. what's above that? of beat raising confidence are enabling you magnitude do to of

Tooey F. Courtemanche

start which see trends, the point. I you this with Sure. are -- any don't I'll will tell at we Well,

thinking about a business tie are really right to who if now sympathize together. news, spooked I lot the economy. I little what you're with commonalities to the of doing But read is their the is think you there's be So because about hard really anybody reasons a

kind just one think there isn't one the in coming up. isn't we conservatism that's up And there segment, isn't general, in geo, so there it's of stakeholder standing But board. across one

Paul Lyandres

our at notably that year, still of investors this, seeing factors a the macro we we Yes. of mentioned our and gets we And then intentional time beginning be would in set against that to tell that to you But in that transparent mentioned the when the be various the points to guide environment able touch in piece, really different we to on worse conservatism all is were bringing data guide Howard call. reason in hit we're this our business. guidance here we're very with the theme guide. as to this want up I overall The

have comfortable while lot still a out put very this What some where to out we've we provided. guide add that? Howard, to a conviction even you feel the we that we're degree we and still in will get should of worse there, there deliver see telling you that world the now all we anything of consciousness is cautiousness seen that we guide on that in

Howard Fu

feel Yes, also thing confident just the a still not raise to that philosophy continuing we addition our couple to in that only one philosophy Keep and guide. hitting that of QX, to are highly raise. guidance in We with mind line. the echo that we is had bottom small in QX we that on but way that top have in in just

Brent Thill

Thanks.

Tooey F. Courtemanche

Thank you.

Operator

question Your Blair. from comes Becker next Dylan William of

Dylan Becker

and the out you that some called how initiatives. office guys. ESG job lot or know a that a high I in the of to construction. Is extent waste fitting there's of coming Hey, level Maybe that sustainability plays historical customer dynamics broader and decisioning. retro here. in maybe into repurposing from Nice Tooey up

You've got and well? But as a something is that decisioning transparency. the of kind that in kind in layering process and complex visibility regulatory environment some of and are prioritizing customers maybe here driving of

Tooey F. Courtemanche

great That's question. a

been this U.S. of which a is our topic the as conversations customers economy that But with we're in on waste our will every I And environment. both $XXX of this that there. that right, billion particular a trying where is to come with solve Procore worth outside of and the you're tremendous well so our So market, is as seeing rework think lot impact challenge a up has EMEA more of year. this happens

So we've on been heavily it. focused

X% enterprise time I board ESG that management. And about customer was meeting advisory of We say recently. about the talking tracking would had and

it's America time, still over is relatively muted we're but this. see out lot North to I but more going it market, So there, in of a the think

Dylan Becker

makes Got That a kind second And how you role that the called I improvements and expect progression can that on overtime thinking in broader of maybe into a of segmentation here, out well? in have supporting guys question about maybe to and know path that international. layer partners as it. ramp play of regionalized you that maybe sense. kind but flows productivity some

Howard Fu

this sense partners see meet where market is talked we customers that will we similar in in they we've answer about about And the how the in think the I look, the we the how U.S. internationally. terms are. honest past of approach think we Yes, it to

that's true different And of also It's about lots and components have digitizing. of partners in it's true so integration but of true markets of resellers, different industries go different a partners. of motion leveraging these how

international are said meet And thoughtful so understand different they how where customers I we're and need about as to are. to differently as the be markets, very to prepared the we we markets think served our

Dylan Becker

Helpful. guys. it. Thanks, Got

Tooey F. Courtemanche

you. Thank

Operator

now We you. Thank have Adam Borg with Stifel.

Adam Borg

the Awesome. Maybe question. two. Thanks guys for taking

expect First, the we changes just have we've I And think we business about that, follow-up. been could to a the where going this when and international are those that operational improvement? on talking when we back with

Tooey F. Courtemanche

Yes.

this So quarter. last mentioned we

to quarter there this are no for want major I say So updates.

of make We pleased be fixed very going which But is overnight. one those improvements, things I'm continue to to that's with. not this

to call it of So us. shared see before, to nothing expect as certainly towards But the we improvements But we out. right hear end when you'll significant there of from kind year. is, this there's now

Adam Borg

quick Thanks a follow-up. much. Maybe Awesome. so just

lot concern. pockets obviously the a macro talked You of about

it you Just earlier? the and four change first or environment call that weeks March. in the second curious quarter plus change macro month about overall talked much. any so Any commentary of to of the demand those Thanks in

Paul Lyandres

tell into I there. you when keep – sorry, call early posted we We're meaningful posted we to we will QX XX we you in out and there's very when QX you keep nothing will report still days. here and

Adam Borg

Awesome. much. Thanks so

Tooey F. Courtemanche

Thank you.

Operator

you. Thank

Operator

We now have of Oppenheimer. Ken Wong

Ken Wong

the sector that Great. is Thanks the we your have we customer? headlines do be, the potentially for consolidation the you what guess, impact I on market earlier and could is regional that my end what financing Tooey, impact touched a banks. on taking see question. on all with view what banking in

a you to I or Thank regional potentially maybe well lending pullback see Paul Tooey, do potential guess for you you. to own aspirations? any opportunity capital as lending from as construction bank then And your

Tooey F. Courtemanche

this that of stories, these information speak enough to but So between. on terms to got topic is again, far somewhat point, on are the impact first something few a hear still Procore. and But that has they not I've going yes, we been anecdotal that's trend a do in

Paul Lyandres

learn there's this I trends, some there's comments Yes, we the more. of mixed really as at out are it's we of positive provide keeping signals cautiousness But think and point, contradicting are lot of posted there. we lot to all you there -- one that a a committed continue to

of I terms other can of banking, the in pullback on be your think very simple. In question no No, way. I

Our program. lender. very not a a This is do financing is a not program business. become material plan unique to bank specific We

Ken Wong

color Got there. it. the Appreciate

Tooey F. Courtemanche

Sure.

Operator

Your next Sachs. from Goldman question comes Rangan from Kash

Kash Rangan

are Hey, Howard, guys. the numbers your it's a up role. It's Paul putting remarkable guys new and Congratulations whatnot. you economy, these congratulations on Tooey, on pretty economy, good quarter. bad whether

commercial growth algorithm, and construct deconstruct pick the know, a Procore to get to going or I let's a say construction is so or number XX%. is don't X% grow X% you If grow going

has whatnot. that economy, understand it's broader hard really think If construction mentioned, you headlines, the are multi to us drives what particularly just lending as industry Tooey what to help because very can crisis, know, banks, parts you're of understand leveraged $XXX can slowing your billion the the not credit growth, less I we you as react

have customers, in up, what which At than typically you new the QX, guys is you putting you're same companies QX more you the XXX bucking added in software but time seasonality this. added

is subsets. mentioned, deconstruct growth out So think we like are can algorithm, Things just one XX of construction I out commercial the you of what the, is office one -- that.

useful. which -- to So Thank the at will we of be cover the lift link the left extreme, left the the in that is deconstruction mighty growth the can growth Procore, the industry algorithm, you growth so much.

Tooey F. Courtemanche

to Kash. happy Yes, that take one,

bring and appreciating those the about that comments thinking industry. call beauty back XX I the different kind had in of the I'd that those XX in categories pretty is are have of diversified the think of business we diversification categories. terms this you I of Procore in this we across earlier to that made

still What early that overall where really cross in the early of customers. penetration more super sell drive products days days means ability Kash overall the the and are our is into to in we TAM,

so do term. opportunity they can cloud short a And customers, seen components, business. that with the we've mixed But create signal continue there the arc of the on the we to in for things bullish time, the out the cautiousness be

when And growth that remains really highly for needs to you opportunity. underpenetrated it over so time market tons us share the think wallet digitize algorithm about of with

out and to like, term there short hey, mindful saying the we of be unknown It's bringing have components of more environment are We macro an that.

Kash Rangan

rapidly. what your you're I slowly, that capture the growing it's that base, dropping from itself base bucket if of then so industry don't more grows customer firms customer wallet, relative share is customer the if even your is, not is probably is, count $XXXXX but the while you and it point grow number gaining the that of know more to can So horizontally,

as point yield, modules of continue points Is the value for then high your rough you the think you the have to gain you company? have you the algorithm algorithm basis certain growth construction the similar level which that the to that of share about and to way

Tooey F. Courtemanche

Yes.

I think good that's it. think to a way about

Kash Rangan

high deal when time it you. We'll talk another Congrats. Super into to level. we speak

Operator

Thank have Mizuho Matthew you. Broome Securities. of We now

Matthew Broome

Thanks very on much and guys. results the congrats

commitments. about spoke up some you customers when longer term larger to being for cautious guess those I more So sign

does I'm it could – was correctly that that so mean hearing if clear the clear, from up? Just that larger you coming or am I or question was customers

Paul Lyandres

tell pocket with as saw would customer, of which in wasn't shared we of Yes, no, saw base. type we of customer more a segment there a particular respect out small to which call of from. customer we any I reflection earlier, you It was it our that of

volume construction customers of Now can saw the a downgrading was customers it's also this come this our of that reminding down. represent worth saw customers Because to share renewed customers. which you majority imply signal of went play. really where that means and grow, our that are does flat share the we mixed And grew the piece their we then grow

Matthew Broome

Okay. makes I guess, And sense. then Procore trending has activity been the That how on construction that network?

Tooey F. Courtemanche

Yes.

is area everybody very the together bring strategy of by platform. So part a our on we're way, much excited It about. connected to our that it's very an big all

very We still to really in assembling more And I'm of trying everything coming about. quarters. but together. we're no and couple excited the about hearing get There's going are it next new to still something particularly be announce it's building to news you're

Matthew Broome

Okay. Perfect. Thanks very much.

Tooey F. Courtemanche

it. Appreciate you. Thank

Operator

you. Thank

Capital Our KeyBanc final of comes Jason Celino from question Markets.

Jason Celino

given works, Hey, would in. pay of model more. customers later that the kind your for to kind the guys. fitting portion true small do of decide caution, year, of question if hypothetically way up exercising they on Last these me here in customers the Thanks

evaluating just what can takes? like about guess you and talk I the puts the customers So are and

Tooey F. Courtemanche

did a through to think that overall job to going that run a right is based like way platform. you of summarizing it, is pricing construction volume the right? Jason, the about yourself, customer mean I Our great it on there they're

We volume. will give customers volume discounts for signing additional for up

to customer they're mindful they upgrading larger model rate. of that to in world up extent the an our we're conservative, volume, a so would they construction Which of less that up means be a they're amount something higher sooner of and where going volume to through have going upfront. to goes. up middle than had could take that to instance a that's end And in going to depending but contract, take the where is rates sign burning And pay higher us their volume more for proving otherwise committed they're cycle the benefit at be they think than the on tailwind I end to

Jason Celino

Thanks quarter really quick perfect. and one showing for quarter leverage. and And it Okay, was actually one the over then some you're It clarification. flat like on nice sales marketing. looks

Thanks. there if was that sales wondering or moved hiring later? got would Just investments any

Howard Fu

QX well. quite actually in Our hiring performed

been across The about other and you thing very the company for. on that are we're what sales – been on hire, we last when we've hire how and hire, who we -- being focused And we've and a our hiring marketing we that just remind has deliberate broader focus a in we year. not very hire been that since are I'll trend we is

it's So nothing actually new.

from standpoint. actually we're really so hiring And dynamics a seeing good

performed QX. actually has well really attrition our fact, In in

Jason Celino

Okay. Cool. Thanks, Howard.

Tooey F. Courtemanche

Thank you. Operator?

Operator

conclude have your lovely does have today's more Thank this and may we day, a you. Please now I confirm no disconnect and can questions, you lines. call.

Procore (PCOR) 3 May 232023 Q1 Earnings call transcript