Procore Technologies, Inc.

Good day and thank you for standing by. Welcome to the Procore Technologies Inc. Q3 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your first speaker today, Matthew Polis, Vice President, Investor Relations. Thank you. That concludes the Q&A for today. I'm handing the call over to Matthew Polis. Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.

Thanks. Good afternoon, and welcome to ProCore's 2021 Third Quarter Earnings Call. With me today are Tui Kortemansh, founder, president, and CEO, and Paul Leandris, CFO. A complete disclosure of our results can be found in our press release issued today, which is available on the investor relations section of our website. Today's call is being recorded, and a replay will be available following the conclusion of the call. Comments made on this call may include forward-looking statements regarding our financial results, products, customer demand, operations, the impact of COVID-19 on our business and other matters, These statements are subject to risks and certainties and assumptions and are based on management's current expectations as of today, November 4, 2021. Procore undertakes no obligation to update any forward-looking statements to reflect new information or unanticipated events, except as required by law. If this call is replayed or viewed after today, the information presented during the call may not contain current or accurate information. Therefore, these statements should not be relied upon as representing our views as of any subsequent date. We'll also refer to certain non-GAAP financial measures to provide additional information to investors. A reconciliation of non-GAAP to GAAP measures is provided in our press release. With that, let me turn the call to Dewey.

Thank you, Matt, and thank you, everyone, for joining us today. Over the last 90 days, we have been hard at work advancing Procore's short and long-term objectives while continuing to reduce risk and unlock growth for our customers. We invested heavily in our platform, which benefits all customers, from owners to general contractors to specialty contractors globally. We released many new product features and updates, and we announced two very exciting acquisitions. We're continuing to innovate in pre-construction and financials, and we're doubling down on what we believe is the most robust suite of products for specialty contractors. Last month, we hosted our annual construction conference, Groundbreak, which gives us a great opportunity to hear from our customers and industry leaders from around the globe. Overall, our customers made a few things very clear. Procore's mission is resonating, and the progress we've made is having a direct and positive impact on the industry. As always, we believe that our role in transforming this industry goes well beyond our technology. We recently announced a number of new partnerships with organizations like Associated Builders and Contractors, the National Association of Minority Contractors, and the Associated General Contractors of America. These partnerships provide a variety of benefits such as discounted buying programs, free product training, and a new scholarship program to assist minority students who are studying construction at historically black colleges and universities. The partnerships, innovation, and support that we provide to our industry continues to be recognized. We recently received the Trust Radius Tech Cares Award, the National Institute of Building Sciences Innovator Award, and we took top honors in G2 Crowd's fall report, where we led in eight categories. At Procore, we know it takes more than technology to improve the lives of everyone in construction. It takes partnership. As I've mentioned before, the construction industry has been and always will be highly dynamic. For the most part, backlogs are healthy and growing, and our customers tell me they are optimistic about the future. But like many industries, construction is grappling with a skilled labor shortage, increased labor and material costs, and overextended supply chain. It is clear that in an industry that is highly under digitized, technology provides a clear and accessible path to building more efficiently. Procore has and will continue to help one of the world's most important industries navigate its short and long-term challenges. One of our largest owner customers recently mentioned something that really validated the impact Procore can have on businesses as a whole. They said, I don't view Procore as just helping with construction. Procore is also helping me with the success of our business, given how vital construction is to our bottom line. I've mentioned before that construction touches all of our lives. And what's so amazing to me is that this quote didn't come from a top ENR general contractor. It came from a Fortune 500 global food company. Another customer shared the role Procore's broader partnership has played in helping them digitize. They said Procore's culture, technology, and vision all converged for us to be able to make this transformation and is helping our company cross the tech chasm. Speaking of partnering with the industry, I'd like to share a few customer wins from Q3. Let's start with two new public sector owners. Cladding Safety Victoria, or CSV for short, is an initiative by the Victorian government in Australia. They set out to reduce the fire hazard risks of combustible cladding on both residential and public-owned buildings. CSV recognized that their current solution was not scalable for their long-term success. They chose Procore because quality, safety, and financial management are key in the government sector. Historically, they had been an avid Procore user as a free collaborator, and now they're a customer, demonstrating the power of Procore's flywheel effect. Utah Transit Authority is a public transportation agency serving seven counties, which represents more than 80% of Utah's population. Procore replaced their proprietary system that became outdated and difficult to maintain. Procore helps them simplify their processes, provides them with a single project data source, and comprehensive mobile capabilities. This will enable them to improve project delivery while having better budget oversight. OzGroup in Canada is a specialty contractor with new leadership and a vision to digitize and better coordinate their business. They had disconnected systems, disparate tools, and three divisions working in silence, making it difficult to report on data and gain project insights. They migrated to Procore to improve internal processes and bring all of their divisions into a connected environment, which will ultimately enable growth and deliver greater profitability. You know, I also want to take a moment to congratulate our longtime customer, Robbins & Morton, on their 75th anniversary. Robbins & Morton is a privately held general contractor consistently ranked in the top 100 contractors in the United States. Their business continues to grow, and they've expanded the amount of construction volume they run on our platform in the third quarter. You know, we consider Robbins & Morton to be a true partner, and we look forward to supporting their continued success in the years to come. Part of the reason why these customers choose Procore is our commitment to innovation. We shared a number of exciting product updates at Groundbreak and throughout the quarter. I'd now like to highlight some of our investments in our global platform and our pre-construction and financial management offerings and talk a bit about how they each connect to our long-term vision. I want to start by reminding everyone that one of Procore's key differentiators is our connected platform. We have a highly intentional product strategy. building an open platform that connects people workflows data and tools with a single user experience available on mobile and web from pre-construction all the way through project closeout we offer hundreds of deep partner integrations through our app marketplace we provide flexibility and configurability to our customers of all sizes doing work across all types of construction Our customers are able to leverage advanced analytics so they can continually improve how they run their projects and their businesses. To be clear, the products themselves are world-class, but the real power comes from connecting everything and everyone on a single platform. We announced a number of updates to our platform in Q3, including greater availability of custom configurable fields, additional global cloud data center support, and a new and improved workflow engine And that's just to name a few. One of the biggest areas of investment in the platform was around collaborative document management. This provides a flexible and configurable approach to document management. We'll not only add value to our existing customer base, but we'll also accelerate our international expansion by helping address both common data environment requirements as well as ISO compliance standards. We also continue to innovate in pre-construction. I cannot overemphasize how critical pre-construction is to our customers, since mistakes made in this phase are amplified and felt throughout the entire course of construction that follows. Bringing transparency to pre-construction can substantially minimize risk for our customers. In addition to key announcements around bid forms and bid leveling, we also continue to make strong progress in estimating. As many of you know, last year we acquired Estacomp, And we have now fully integrated takeoff and estimating into the pre-construction module of the Procore platform. We're making exciting progress on streamlining and automating estimating processes with smart takeoff. Smart takeoffs are made possible by leveraging really powerful artificial intelligence, which is really cool. We're also working to further integrate the estimating workflows with our financial management module. With Procore Estimating, customers can manage workflows to forecast budgets, conduct change management, and initiate purchase orders. Everyone benefits from more accurate estimates prior to breaking ground. This is one of the most important mechanisms available for ensuring project profitability. However, for builders in particular, speed is critical. Fast estimating and takeoff enables builders to bid more efficiently and competitively, In this way, Procore estimating makes it more likely that our customers will win the work that they bid on. We also made notable announcements about our financial management module. One of the most critical ways we can help our customers is providing them with a centralized and accurate data source that connects all of their stakeholders. We recently released a number of new ERP connectors. These connectors will provide our customers with unprecedented real-time visibility into the financial health of their construction projects. You know, people often think that project execution is separate from project accounting when they are both really two sides of the same coin. Without the connectivity that Procore provides, gaps exist between accounting and operations systems, and teams are forced to make important decisions without the information they need. These connectors help us to close the gaps between the office and field teams. removing blind spots, risks, delays, and costly rework. Okay, the last big announcement I want to touch on is the Procore Construction Network. If you asked me to find the best place to get dinner in any city, I would simply do a Yelp search to find a great place to eat. And yet, if I want to build a school, a hospital, or a home in your town, I'd be flying blind when it comes to finding the most reliable suppliers, vendors, architects, engineers, and or contractors. The Procore Construction Network is the start of a new approach to connecting the construction industry. Thanks to our vast connecting network of over 1.8 million construction professionals around the world, we are now piloting a free online construction business directory. The Procore Construction Network offers location-based search and advanced filtering and will make it easier for construction professionals to expand their online presence, promote their business, quickly find and connect with new construction partners, and submit and receive bids from other stakeholders. This network will provide our customers with transparency into who they're working with. You know, a great example of this is that general contractors will have access to historical data on specialty contractors, and they'll have access to predictive information on project costs. And specialty contractors, before they take on a job, will know what the propensity is for the owner and the general contractor to pay them on time. And this is critical so they can better solve their persistent cash flow challenges. And on top of that, they'll be able to choose the most cost-effective and reliable products from a transparent marketplace. Over time, we believe the Procore Construction Network will also provide a new way for the industry to discover the power of the Procore platform. This is going to be a great way to create a bigger, faster flywheel. We've recently made significant acquisitions this quarter. This allows us to better serve all stakeholders, but in particular, specialty contractors. This group represents the majority of the people within the industry. They perform the lion's share of the actual construction activity while assuming significant physical and financial risk. Many of you heard about our agreement to acquire Levelset back in September. This represents the single biggest investment we've ever made. We closed this acquisition earlier this week and are looking forward to our journey ahead. In the medium term, our priority will be integrating Levelset's lean management solution into the Procore platform to manage complex compliance workflows. Lean management is also foundational to some of our long-term objectives, including capitalizing on our data assets. Next year, this will be a priority for us, and Paul is going to share more on these investments shortly. Additionally, a couple of weeks ago, we announced our acquisition of LaborChart. For those of you who do not know, labor is typically the highest and most variable cost for contractors. For the most part, the industry still relies on spreadsheets and analog solutions like whiteboards to manage their workforces. LaborChart provides a modern solution to these legacy processes. Given construction's global labor shortage, managing existing workforces efficiently is critical to managing risk and driving growth. With the addition of LaborChart, Procore will have an end-to-end workforce management solution to help contractors optimize their workforce, maximize productivity, and take on more projects. LaborChart complements and strengthens Procore's current workforce management solutions. While our field productivity product tracks and provides insights on historical productivity, LaborChart enables contractors to accurately plan and forecast by giving them a real-time and forward-looking understanding of all workers, assignments, and commitments. Additionally, the acquisition gives us the opportunity to combine ProCore's industry-specific project data set with LaborChart's workforce management data, which will provide further insights and connectivity between the office and the field. Optimizing labor and construction is critical to enabling our customers to take on more work with less waste and ultimately to grow their businesses. Now I'm looking forward to sharing our progress in the coming quarters. So before I hand it over to Paul, I have an exciting announcement to share. Next year, Procore will be expanding into France and Germany. The construction industry is globally distributed with the majority of construction volume happening outside the U.S. Europe represents a sizable portion of the global TAM, and France and Germany are two of the biggest markets within that continent. We also believe there's strong product market fit with our platform today, and many of our largest customers have operations and projects there already. Expanding into these two countries was a natural next step, and I look forward to updating you after our launch next summer. So in summary, in Q3, We continue to be a strategic partner to the industry, and we continue to make progress toward our vision of improving the lives of everyone in construction. Now, I'll hand it over to Paul.