Construction management software maker Procore Technologies (NYSE:PCOR) reported Q2 FY2023 results topping analysts' expectations, with revenue up 32.7% year on year to $228.5 million. The company also expects next quarter's revenue to be around $233 million, roughly in line with analysts' estimates. Procore Technologies made a GAAP loss of $52.9 million, improving from its loss of $73.1 million in the same quarter last year.
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Procore Technologies (PCOR) Q2 FY2023 Highlights:
- Revenue: $228.5 million vs analyst estimates of $218 million (4.84% beat)
- EPS (non-GAAP): $0.02 vs analyst estimates of -$0.09 ($0.11 beat)
- Revenue Guidance for Q3 2023 is $233 million at the midpoint, above analyst estimates of $231.8 million
- The company lifted revenue guidance for the full year from $910 million to $922.5 million at the midpoint, a 1.37% increase
- Free Cash Flow was -$23.6 million, down from $19.2 million in the previous quarter
- Customers: 15,704, up from 15,089 in the previous quarter
- Gross Margin (GAAP): 81.5%, up from 78.7% in the same quarter last year
“We’re delivering solutions that help the construction industry find valuable efficiencies in an uncertain environment. I am excited to showcase what digital and cultural transformation means for the industry at large at Groundbreak 2023,” 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 over the last two years, growing from $122.8 million in Q2 FY2021 to $228.5 million this quarter.
Unsurprisingly, this was another great quarter for Procore Technologies with revenue up 32.7% year on year. On top of that, its revenue increased $15 million quarter on quarter, a very strong improvement from the $11.5 million increase in Q1 2023. 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 25% year on year to $233 million, slowing down from the 41.2% year-on-year increase it recorded in the same quarter last year. Ahead of the earnings results announcement, the analysts covering the company were expecting sales to grow 22% over the next 12 months.
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Customer Growth
Procore Technologies reported 15,704 customers at the end of the quarter, an increase of 615 from the previous quarter. That's in line with the customer growth we've observed over the last couple of quarters, suggesting that the company can maintain its current sales momentum.
Key Takeaways from Procore Technologies's Q2 Results
With a market capitalization of $10.6 billion, a $603 million cash balance, and positive free cash flow over the last 12 months, we're confident that Procore Technologies has the resources needed to pursue a high-growth business strategy.
It was good to see Procore Technologies beat analysts' revenue expectations this quarter. We were also glad that its full-year revenue guidance came in higher than Wall Street's expectations and that it maintained its #1 ranking across 11 categories in the G2 2023 Summer Report. Overall, this quarter's results seemed fairly positive and shareholders should feel optimistic. The stock is up 2.9% after reporting and currently trades at $74.49 per share.
So should you invest in Procore Technologies 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.
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The author has no position in any of the stocks mentioned in this report.