Intro: Procore Technologies $PCOR

Company Name / Ticker
Procore Technologies, Inc. $PCOR

What it does

  • Lowers monetary costs (...and opportunity-costs) of Construction projects by digitizing workflows via its Construction Software.

    Rapidly improving metrics
    Revenue Growth in Millions

    • 2018 186
    • 2019 289
    • 2020 328
    • 2021 381
    • 2022 719

    Last nine quarters of revenue in Millions:
    92, 113, 122, 132, 146, 159, 172, 186, 202

    NRR 2021: 109%
    NRR 2022: 116%


    • First-mover / Top Dog
    • Has rolled out modules covering more aspects of the Construction process vs. its competitors (Details below). Linear integration of additional modules provides non-linear benefits to Customers

    Sales Pitch

    • Extreme benefits resulting from simplification and acceleration of notoriously complicated workflows
    • !!! 48% !!! MORE BUSINESS PER EMPLOYEE running PCOR
    • Super-fast ROI
    • Construction Focused, “Mobile First”
    • Unique pricing model facilitates organizational (…AND cross-functional) use of the platform and thus STRONGLY facilitates project success

    EXAMPLE PAIN POINT: Change Orders

    • Change Orders are needed every time any aspect of a finalized Construction design needs to be added-to, modified or discarded
    • Change Orders cause long/tedious laundry-list of tasks to get approval from numerous parties
    • Implementation requires lots of handoffs and dependencies amongst affected parties
    • Currently, the Change Order process moves at the speed of PHYSICAL PAPER for many Construction companies.
    • Change Orders can cause HUGE delays due to the brittle nature of scheduling in the Construction industry
    • The Procore platform dramatically reduces the time it takes to implement Change Orders, which has huge positive impacts on Scheduling and time-to-completion

    Plan for Durable Growth

    • HUGE greenfield opportunity driven by current market fragmentation and extremely low levels of process digitization in the Construction industry
    • (In-progress): Land bigger customers
    • (In-progress): add offerings for Specialty Contractors and for Owners, who often end up serving as General Contractors
    • Expansion of sales to existing Customers via adoption of additional Modules
    • Near-term initiative: Materials Financing (…comparable to financing offered by $SQ to their Small-Business customers). They believe their products provide them with information that enables them to offer low-risk loans based on “hard assets” materials needed for particular Construction projects. The hope is that this initiative creates a flywheel effect by bringing thankful/loyal Customers onto their platform
    • International expansion
    • Planned Construction Insurance module


    • (Literally): Paper-and-pen-based processes
    • $ADSK though they don’t have the scope of interoperable modules that $PCOR does

    My Take

    • $PCOR has a breadth of already-integrated products that is approaching the breadth of scope of all business processes in the entire Construction industry.
    • Similar to $GTLB, their only real competition is one-off standalone solutions ineffectively MacGyver-d together by already-overloaded Construction Company employees.

    To grasp the importance of the above, it’s necessary to list out their modules:

    • Project Management
    • Project Financials
    • Quality
    • Safety
    • Invoice Management
    • (Planned launch this-year): “Procore Pay”, a payment module compatible with its Invoice Management module
    • Building Information Management (…whatever that is?)
    • Analytics
    • Workforce Planning
    • Estimating
    • Bid Management
    • Lien Rights Management (facilitates faster payments TO Construction companies, and faster paymets FROM Construction companies to their suppliers)
      …by making it faster/easier to deal with Compliance issues

    Their pricing model is also critical to their success

    • It’s important to understand that because there are no named user associated with the license, the Company running a project using Procore products and grant access to ANYONE, including third parties that have not purchased any Procore licensing.
    • This creates a flywheel: sub-Contractors etc. are introduced to Procore products by virtue of joining a Construction project that is utilizing Procore software, and end up purchasing Procore for their own needs.
    • More importantly, the licensing model means nobody has to wait for a critical mass of adoption before the software is useful: it’s useful IMMEDIATELY to anyone who has licensed it and has a Construction project to get done.

    They are integrating a lot of new functionality all at once:

    • Integration of recently-purchased Company Levelset
    • Launch of Procore Payments
    • Newly-launched Materials Financing capability

    Also: they have elevated Sales/Marketing expenses driven by the difficulty of identifying and getting the attention of decision makers in a fractured industry. IMO because they are able to overcome this dynamic, it is actually a part of their Moat. However there’s no denying the expense.

    Regarding macro
    $PCOR continues to expand at market-beating rates despite the supposed cyclical nature of Construction spending. IMO this is because 1) Procore has great products that have a quick ROI and if anything are MORE important in a down-market and 2) Although particular Construction sectors are cyclical, “Construction” considered as a whole is perhaps not as wildly cyclical as the popular narrative asserts.

    I need to look more into Leadership.
    According to his linkedin page, Craig “Tooey” Courtemanche has a long history in Construction, Real Estate and Software. He was inspired to start Procore by difficulties he faced when building his own home.
    He owns 5.3% of $PCOR

    WHO KNOWS how far ahead of their competition will be once macro-conditions improve.
    I’m in for a starter position and look hope for some more thoughts from y’all :slight_smile:


    Should have included in my summary: they are basically $MNDY and $BILL, wrapped into a single product suite and tailored for the Construction industry.

    Great article by Bert:


    $PCOR did a quarterly report this past May 3rd; here is a brief/belated update.


    • Revenue +34% YOY ( $214 ) beats by $10.8
    • RPO +30% YOY
    • International revenue grew 35% YOY on a constant-currency basis
    • Guiding $216 - $218 for Q2 which would be 25% - 27% YOY
    • Guiding $908 - $912 for FY 2023 ( +$12 vs. previous guidance) which would be 26% - 27% YOY. NOTE: They emphasized repeatedly that they are confident they’ll meet their guidance no matter what happens with macro.

    Last ten quarters of revenue in Millions:
    92, 113, 122, 132, 146, 159, 172, 186, 202, 214

    Other highlights

    • 600 net new customers; over 15,000 now
    • Last quarter they saw a small drop in net-new-Customer-adds however this number has now returned to its previous (positive) trend
    • Named one of G2’s Best Global Software Companies; $PCOR’s highest ever ranking: 14 out of 100
    • Overall construction backlogs are still healthy
    • Labor shortage continues to be their Customers’ biggest bottleneck
    • A small percentage of their customers are demonstrating cautiousness in purchasing volume on $PCOR’s systems, but it’s not materially affecting revenue at this point. This was actually more-than-offset by Customers growing volume. The majority of customers are continuing to grow construction volume.

    Regarding competition:

    • “We saw one of our largest competitors less frequently than we did in 2021. But we won more ARR against them.”
    • “50% of the folks we talk to every day are coming from analog pen and paper greenfield opportunities and it’s not a competitive dynamic.”

    Regarding construction macro this past quarter vs. $PCOR revenue

    • Residential construction starts down 29%
    • Total construction volume down 9%
    • $PCOR revenue up 5.9% sequentially

    My thoughts

    • $PCOR is a play on the entire construction industry not only because it has Customers across all sub-categories of Construction (…the U.S. Census Bureau tracks 70 subcategories of “Construction”) but also because Construction companies themselves typically do Construction in multiple subcategories.
    • …thus, a decline in (for example) Office Construction may well be offset by an increase in (for example) Infrastructure spending, Manufacturing and Data Centers.
    • They are a ROI play. Their ROI proposition is not as straightforward as $IOT’s. Nevertheless their Customers are reporting significant ROI based in part on significant saved man-hours
    • Their Customers tend to start with a few of their more well-established products (“Project Management”, “Quality”, “Safety”) and experiment with additional products (“Financials”, ERP) on smaller projects and/or smaller regions
    • They see Fintech opportunities and have promoted their CFO to President of Fintech

    Overall to me a very satisfactory quarter.
    It sounds like they are still in greenfield-opportunity mode; their Sales team must be loving it!
    There are other positive developments, but I’ll just keep this post brief since there’s not a high level of interest in $PCOR here on the board.