Procore Technologies (PCOR 1.09%), a leading provider of cloud-based construction management software, released its earnings for the fourth quarter of 2024 on February 13, 2025. The company posted revenue of $302 million, exceeding both analyst estimates of $297 million and its own guidance. However, profitability lagged, with non-GAAP EPS coming in at $0.01, well below the analyst forecast of $0.12. Despite robust sales growth, challenges in cost management impacted the overall quarterly performance.
| Metric | Q4 2024 | Q4 Estimate | Q4 2023 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.01 | $0.12 | $0.17 | -94.1% |
| Revenue ($M) | $302 | $297 | $260 | +16.2% |
| Non-GAAP Operating Margin | (1%) | N/A | 7% | -8 pp |
| Free Cash Flow ($M) | $0.3 | N/A | $29.0 | -98.8% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in 2024-10-30 earnings report.
Procore Technologies is a premier global provider of cloud-based construction management software solutions. Its platform aids various stakeholders, including owners, general contractors, and specialty contractors, by digitizing construction projects and offering real-time data access. The company generates most of its revenue through a subscription-based model, fostering steady income flow and growth opportunities.
Procore has been focusing on revenue model enhancement, international expansion, and technology innovation. It aims to deepen market penetration in construction, an industry traditionally resistant to digitization. Key success factors involve customer acquisition and expansion, ongoing product innovation, and leveraging international markets for growth.
During the fourth quarter of 2024, Procore reported a revenue of $302 million, surpassing analyst estimates of $297 million and going beyond management's guidance. This performance was supported by Procore's efforts in customer acquisition, as evidenced by adding 113 new clients in the quarter, bringing its total to 17,088 customers.
However, profitability proved challenging as non-GAAP EPS fell short at $0.01, contrasted with an expected $0.12. This discrepancy highlights issues in managing expenses and scaling profitably, despite a boom in sales.
The company faced a slippage in operating margins, with the non-GAAP figure dropping to (1%), lower than the previously guided 3% to 4%. Much of this shortfall stemmed from increased operational costs, resulting in a free cash flow of only $0.3 million for the quarter.
Procore introduced several new products, including AI-driven solutions like Procore AI, elevating its market differentiation. However, despite a solid year for revenue with $1.152 billion total earnings—up from $950 million the previous year—profit margins remain a key area of concern.
Procore has set its revenue outlook for fiscal year 2025 at $1,285 million to $1,290 million, indicating about 12% growth. The company expects an improvement in its non-GAAP operating margin to a range of 13% to 13.5%, reflecting confidence in overcoming current challenges related to margins.
Investors should monitor Procore's progress in integrating product innovations like AI and its ongoing international expansion efforts. These initiatives are critical as they could lead to improved profitability and a firmer market position, aligning with Procore's aspiration to become a multi-billion revenue entity in the coming years.
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