Construction management software maker Procore Technologies (NYSE:PCOR) announced better-than-expected results in Q2 CY2024, with revenue up 24.4% year on year to $284.3 million. On the other hand, next quarter's revenue guidance of $287 million was less impressive, coming in 1.6% below analysts' estimates. It made a non-GAAP profit of $0.39 per share, improving from its profit of $0.02 per share in the same quarter last year.
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Procore Technologies (PCOR) Q2 CY2024 Highlights:
- Revenue: $284.3 million vs analyst estimates of $275.2 million (3.3% beat)
- Adjusted Operating Income: $50.04 million vs analyst estimates of $32 million (56.4% beat)
- EPS (non-GAAP): $0.39 vs analyst estimates of $0.25 ($0.14 beat)
- Revenue Guidance for Q3 CY2024 is $287 million at the midpoint, below analyst estimates of $291.7 million
- The company slightly lifted its revenue guidance for the full year from $1.14 billion to $1.14 billion at the midpoint
- Gross Margin (GAAP): 83.1%, up from 81.5% in the same quarter last year
- Free Cash Flow of $46.6 million, down 19% from the previous quarter
- Customers: 16,750, up from 16,598 in the previous quarter
- Billings: $287.6 million at quarter end, up 18.9% year on year
- Market Capitalization: $10.39 billion
“We are in the early innings of transforming one of the largest and least digitized industries in the world,” said Tooey Courtemanche, Founder, President, and CEO of Procore.
Used to manage the multi-year expansion of the Panama Canal that began in 2007, Procore Technologies (NYSE:PCOR) offers a software-as-service project, finance and quality management platform for the construction industry.
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Sales Growth
As you can see below, Procore Technologies's revenue growth has been excellent over the last three years, growing from $122.8 million in Q2 2021 to $284.3 million this quarter.
This quarter, Procore Technologies's quarterly revenue was once again up a very solid 24.4% year on year. On top of that, its revenue increased $14.92 million quarter on quarter, a very strong improvement from the $9.39 million increase in Q1 CY2024. This is a sign of acceleration of growth and great to see.
Next quarter's guidance suggests that Procore Technologies is expecting revenue to grow 15.8% year on year to $287 million, slowing down from the 33% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 17.3% over the next 12 months before the earnings results announcement.
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Customer Growth
Procore Technologies reported 16,750 customers at the end of the quarter, an increase of 152 from the previous quarter. That's slower customer growth than we have seen previously, suggesting that the company's customer acquisition momentum is slowing.
Key Takeaways from Procore Technologies's Q2 Results
It was good to see Procore Technologies beat analysts' revenue, adjusted operating income, and EPS expectations this quarter. On the other hand, its revenue guidance for next quarter missed and its customer growth decelerated. We do note the company slightly lifted its full-year revenue outlook, but the market seems to be more focused on the short term. Overall, this was a mediocre quarter for Procore Technologies. The stock traded down 4.8% to $63.99 immediately following the results.
Procore Technologies may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.