Procore Technologies, Inc.

Thank you for your patience and good afternoon. Thank you for attending today's Procore Technologies Inc. FY24 Q4 earnings call. My name is Regan and I'll be your moderator today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to our host, Alexandra, with Procore Technologies. Alexandra, you may now proceed.

Thanks, good afternoon, and welcome to Procore's 2024 Fourth Quarter Earnings Call. I'm Alexandra Geller, Head of Investor Relations. With me today are Thuy Quartermont, Founder, President, and CEO, and Howard Fu, CFO. Further disclosure of our results can be found in our press release issued today, which is available on the Investor Relations section of our website and our periodic reports filed with the SEC. Today's call is being recorded and a replay will be available following the conclusion of the call. Comments made on this call include forward-looking statements regarding, among other things, our financial outlook, go-to-market transition, products, customer demand, operations, and macroeconomic and geopolitical conditions. You should not rely on forward-looking statements as predictions of future events. All forward-looking statements are subject to risk uncertainties, and assumptions, and are based on management's current expectations and views as of today, February 13th, 2025. 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. Reconciliation of non-GAAP to GAAP measures is provided in our press release and our periodic reports filed with the SEC. With that, let me turn the call over to Tui.

Thanks Alex, and thank you everyone for joining us today. So I'd like to begin by expressing our heartfelt condolences to all of those affected by the devastating wildfires in Southern California. While COCOR's headquarter in Carpinteria is safely north of the fires, we were deeply touched by the outpouring of concern that we received from around the world. Our thoughts remain with the residents and communities who have endured these tragic events, and we extend our deepest gratitude to the firefighters and the first responders who courageously put themselves on the front lines. Okay, now I'd like to shift gears to our performance in the quarter. We are very proud of how our team executed, ending the year better than we expected, with several notable bright spots. Some highlights include our strong booking performance in the quarter, which was led by more than 136- and seven-figure transactions, We grew the number of customers contributing greater than a million dollars in ARR by 39% year-over-year, with growth from all three stakeholders and outsized growth from owners. We exceeded our headcount targets for the quarter and are ahead of schedule for our go-to-market hiring. And for efficiency targets for the year, we expanded our non-GAAP operating margin by 800 basis points. We also generated $128 million in free cashflow, resulting in another strong year of cashflow generation. And we believe 2025, we will see a continuation of this trend. Our strength in the quarter was also reflected in our high quality customer ads and expansions. In Q4, we added new customers across all stakeholders, including one of the world's largest telecommunication companies, the University of San Diego, Prism Electric, extra space storage, and one of Canada's largest general contractors. We also had expansion wins with Tudor Perini, Mortensen, the Japanese division of a major hospitality brand, a Fortune 30 oil refiner, as well as a major expansion with an ENR 50 contractor. You know, I'm particularly proud of two significant MAG7 wins from the quarter. The first is a new customer, which marks not only our largest win of the quarter, but also one of the biggest seven-figure ARR deals in ProCourse history. The second MEG7 win is a substantial six-figure expansion with an existing customer given by their ambitious plans to grow their facilities and data centers. These wins underscore the immense scale of CapEx amongst owners and reaffirms ProCourse's position as the clear market leader in construction technology. You know, when the world's largest companies seek a trusted partner to manage their most complex projects, they choose Procore. Another big expansion this quarter was with Aubergeldi, a leading infrastructure contractor in Australia and New Zealand. In 2023, they piloted a few Procore products. After a thorough evaluation in Q4, they made Procore their primary project management platform. adding several Procore products and expanding their annual construction volume by nearly 10x. They saw the value in Procore's comprehensive project management solution and our ability to seamlessly integrate with their ERP system. This expansion will enable their team to more effectively and efficiently manage their projects, harness the power of their data, and improve internal reporting. These customer wins reflect all of the growth levers that we referenced at our recent investor day, including new logo ads, volume expansion, product cross-sell, and growth outside of the U.S. We are proud of our top-line performance this quarter and the momentum that we've built as we head into this new year. So as I reflect on last year, I am incredibly proud of how we've delivered on our commitment to focusing on our core. This means reinforcing our foundational strengths while making strategic investments in related areas that enhance and expand our core offerings. First and foremost, I want to highlight the transformative potential of data and AI in reshaping the construction landscape. Thanks to our unique and unmatched construction data set, AI offers us an extraordinary opportunity to create value for our customers by driving greater efficiency, reducing risk, and ultimately transforming how teams collaborate, forecast, and execute projects. Last year, we continued to invest in AI-powered innovations like Copilot, Agents, and Agent Studio, and we're working steadily towards a future where Procore AI will power every task and workflow, deliver actionable insight, and replace manual PDS processes with trusted, customizable agents. And this data set only becomes more powerful as we continue to add new customers and expand with our existing customers. Ultimately, we expect Procore AI will become central to the platform experience, which brings me to another area where we've made great strides, our platform connectivity. The construction process is incredibly collaborative and requires seamless coordination across all relevant stakeholders. This is why an important part of our connected strategy is to ensure that critical project data is shareable, not just within a customer, but across customers and their associated accounts. You can think of these connection points as the nerve fibers that go between our products and accounts. This year we released connected drawings and we are in the process of connecting RFIs and submittals. This is an important part of delivering on our mission to connect everyone in construction on a global platform and represents a very exciting first step in supercharging the connected nature of our solutions. Something that we believe will continue to serve as a competitive advantage for Procore. We made a host of other innovations to better serve the diverse needs of all stakeholders and all types of construction. So I'd like to share a few of those highlights. We launched Resource Management, the first solution that brings together labor, equipment, and materials, helping our stakeholders, including subcontractors, self-reformed general contractors, and civil and infrastructure customers manage resources more efficiently with greater precision. We are supporting our civil customers with tools like Procore Maps, which provides stakeholders with seamless access to all project data in a map view, accessible anytime, anywhere. We enhanced the experience for our global customers with Procore Zones, ensuring greater consistency in application performance and overall user experience. This also enables local storage and processing the project data, which can be critical for multinational customers with data localization requirements. We also ended the year with more than 250 customers having purchased pay and beginning to reap the benefits of automated invoicing and payments to their subcontractors. While we are pleased with this momentum and the opportunity remains incredibly exciting, we do not expect pay to be material to revenues in 2025, given its associated implementation and project rollout timelines. Over the past year, we released countless feature enhancements addressing customer feedback votes. This is a testament to our deep partnership with the construction industry and our commitment to continually improving and involving with their needs. Listen, while all of these updates are exciting, the most rewarding part is seeing our innovations impact customers in some of the largest job sites around the world. This year, I visited many customer job sites, from the International Thermonuclear Experimental Reactor in France, otherwise known as ITER, to the Barangaroo Pier Pavilion in Sydney Harbor, to the Lucas Museum in Los Angeles, and was truly humbled by the complexity and sophistication of these projects. When I started Procore 23 years ago, I never imagined that our platform would become the foundation for some of the world's most impactful projects. Of course, another notable 2024 initiative was our decision to pull forward and accelerate our go-to-market transition. We believe that this is going to position us for continued top-line growth while allowing us to build deeper, lasting partnerships with our customers. For more details on these changes, I encourage you to review our recent Investor Day materials on our IR website. We're a little over two fiscal quarters into this transition, and we're pacing very well. We're ahead of schedule on hiring, with most roles expected to be filled by the end of Q1. New POP plans and territories have been distributed, and our sellers are coming online, ramping up, and building pipelines. We anticipate the most disruption in the first half of the year as generalists and technical sellers are building this new muscle of working together. With that said, we continue to receive positive feedback from our teams, customers, and partners, and I am confident that our new operating model is going to position Procore to seize the enormous opportunity ahead. The energy was palpable during our sales kickoff in January, as the team is fired up about the new sales model and excited to share our platform vision with our customers. There's still work to do, but we remain focused on executing this transition to ensure lasting success. Now I'd like to lay the foundation for how we're thinking about 2025. As we shared in Investor Day, there's a significant opportunity ahead. In order to capitalize on that opportunity, my focus for the year are gonna be first, To complete our go-to-market evolution, we aim to transition to this new sales model over the first half of the year and to be fully operational by the second half. This change is key to improving customer outcomes, strengthening relationships, and driving efficient long-term growth. We believe achieving these milestones are going to position us for strong momentum going into 2026. My second priority is driving operational excellence. In the past few years, we've made significant profitability improvements, but there is substantial room for continued margin expansion. We have ambitious goals to be a high margin business, and we are committed to making further strides towards that goal in 2025. Despite the substantial investments we've made in our go-to-market initiative, we are guiding for continued margin expansion this year, underscoring our ability to balance growth with disciplined execution. And last, but certainly not least, is to multiply the value of our platform. Procore is the only truly unified construction management platform, and we believe this is our greatest differentiator. We are proud of what we built and the exciting announcements that we shared at Groundbreak, but there is so much more that we can do here. Our roadmap includes powerful products and capabilities that are going to amplify the power of our platform and better connect and serve everyone in construction. This is an incredibly exciting chapter in Procore's product journey. Many things that we've been working on for years are coming together to deliver our customers a more connected, intelligent, and powerful platform experience than ever before. To wrap up, we are incredibly proud of how we finished 2024. We are deeply grateful to our customers for their continued trust and partnership, our employees for their dedication, and our shareholders who continue to support us. Together we're building and refining our business to be a forever company, one that drives lasting shareholder value while continuing to make a meaningful impact on the construction industry for generations to come. And now I'm going to turn it over to Howard to share some more on our business performance.