Procore Technologies's (NYSE:PCOR) Q1 Sales Top Estimates, Provides Optimistic Full Year Guidance

Radek Strnad /
2023/05/03 4:20 pm EDT

Construction management software maker Procore Technologies (NYSE:PCOR) reported Q1 FY2023 results that beat analyst expectations, with revenue up 33.9% year on year to $213.5 million. The company expects that next quarter's revenue would be around $217 million, which is the midpoint of the guidance range. That was roughly in line with analyst expectations. Procore Technologies made a GAAP loss of $63.4 million, improving on its loss of $71.4 million, in the same quarter last year.

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Procore Technologies (PCOR) Q1 FY2023 Highlights:

  • Revenue: $213.5 million vs analyst estimates of $203.2 million (5.07% beat)
  • EPS (non-GAAP): $0.01 vs analyst estimates of -$0.12 ($0.13 beat)
  • Revenue guidance for Q2 2023 is $217 million at the midpoint, roughly in line with what analysts were expecting
  • The company lifted revenue guidance for the full year, from $897.5 million to $910 million at the midpoint, a 1.39% increase
  • Free cash flow of $19.2 million, up 63.5% from previous quarter
  • Customers: 15,089, up from 14,488 in previous quarter
  • Gross Margin (GAAP): 81.2%, up from 79.2% same quarter last year

“I’m proud of the team’s hard work in delivering our first quarter results,” 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 very strong over the last two years, growing from quarterly revenue of $113.9 million in Q1 FY2021, to $213.5 million.

Procore Technologies Total Revenue

And unsurprisingly, this was another great quarter for Procore Technologies with revenue up 33.9% year on year. But the growth did slow down compared to last quarter, as the revenue increased by just $11.5 million in Q1, compared to $15.6 million in Q4 2022. We'd like to see revenue increase by a greater amount each quarter, but a one-off fluctuation is usually not concerning.

Guidance for the next quarter indicates Procore Technologies is expecting revenue to grow 26% year on year to $217 million, slowing down from the 40.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 22.5% over the next twelve months.

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Customer Growth

You can see below that Procore Technologies reported 15,089 customers at the end of the quarter, an increase of 601 on last quarter. That is a little better customer growth than last quarter and in line with what we have seen in previous quarters, demonstrating the company has the sales momentum required to drive continued growth. We've no doubt shareholders will take this as an indication that the company's go-to-market strategy is running smoothly.

Procore Technologies Customers

Key Takeaways from Procore Technologies's Q1 Results

With a market capitalization of $7.6 billion Procore Technologies is among smaller companies, but its more than $329 million in cash and the fact it is operating close to free cash flow break-even put it in a robust financial position to invest in growth.

We were very impressed by Procore Technologies’s very strong acceleration in customer growth this quarter. And we were also excited to see that it outperformed Wall St’s revenue expectations. Overall, we think this was a really good quarter, that should leave shareholders feeling very positive. The company is up 2.52% on the results and currently trades at $54.51 per share.

Should you invest in Procore Technologies right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.