Procore Technologies, Inc.
Loading chart...
Item 1. Business.
Overview
Our mission is to connect everyone in construction on a global platform.
We are the leading global provider of construction management software, and are helping transform one of the oldest, largest, and least digitized industries in the world. We focus exclusively on connecting and empowering the construction industry’s key stakeholders, such as owners, general contractors, and specialty contractors, to collaborate and access our capabilities from any location on any connected device. Our platform is modernizing and digitizing construction management by enabling timely access to critical project information, simplifying complex workflows, and facilitating seamless communication among relevant stakeholders, all of which we believe positions us to serve as a critical system of record and collaboration for the construction industry. We also continue to develop other products and services to address related challenges faced by the construction industry’s key stakeholders. Our products, services, and platform help our customers increase productivity and efficiency, reduce rework and costly delays, improve safety and compliance, and enhance financial transparency and accountability.
In short, we build the software for the people that build the world.
We have established our leading market position by focusing on serving the unique needs of the construction industry. We work directly with stakeholders to develop the products and services they need and to provide high-quality support, available to all users at no additional charge. Our four integrated product categories—Preconstruction, Project Execution, Resource Management, and Financial Management—automate workflows, provide timely visibility, offer advanced analytics, and support collaboration across key stages of the construction project lifecycle. In February 2026, we began offering customers access to our products in four bundled packages—Project Execution, Cost Management, Resource Management, and Project Lifecycle Management—each of which consists of tiers that offer different levels of access to our products. We also offer agentic AI capabilities to automate workflows across the entire construction lifecycle. Platform capabilities like our application programming interfaces (“APIs”) and our application marketplace (“App Marketplace”) allow customers to integrate our products with their internal systems. We offer many categories of integrations, including accounting, document management, and scheduling software, which provide our users with choice and flexibility, and increase the stickiness of our platform as a critical system of record and collaboration for the construction industry.
Our customers range from small businesses managing a few million dollars of annual construction volume to global enterprises managing billions of dollars of annual construction volume. Our core customers are owners, general contractors, and specialty contractors operating across the residential and non-residential segments of the construction industry. Our customers rely on our platform to help run their businesses more efficiently and safely, with enhanced collaboration and accountability among key stakeholders.
We generate substantially all of our revenue from subscriptions to access our products. We primarily sell our products on a subscription basis for a fixed fee with pricing generally based on the number and mix of products a customer subscribes to and the fixed aggregate dollar volume of construction work contracted to run on our platform annually, which we refer to as “annual construction volume.” To help our customers address the variable nature of their construction volume, we offer (a) annual subscription contracts with construction volume over a one-year period; (b) multi-year subscription contracts with construction volume measured over successive one-year periods; and (c) pooled volume contracts with fixed flat annual fees based on construction volume measured over multiple years (typically, two- or three-year periods). As our customers subscribe to additional products or increase the annual construction volume contracted to run on our platform, we generate more revenue. We do not provide refunds for unused construction volume. We generally do not charge customers based on consumption or on a per-project basis.
Our business model is designed to encourage rapid, widespread adoption of our products by allowing for unlimited users. We typically do not charge a per-seat or per-user fee, meaning that customers can invite all project participants, including owners, general contractors, specialty contractors, architects, and engineers, to engage with our platform as part of a project team without incurring additional fees. We offer access to our
5
products on a per-user basis to certain of our owner customers who have preferred to purchase access on a per-user basis. Customers are able to invite project participants to join our platform, including their employees and collaborators, who are other project participants that engage with our platform but do not pay us for such use. Collaborators have access to relevant project information and product features for the duration of their involvement in a project and are incentivized to become customers, as collaborators do not control what information they get access to, may not be able to access project information after a job is complete, and cannot run their complete portfolio of projects on our platform. Once collaborators have used our platform, they may potentially become customers and evangelize Procore on future projects. Multiple participants can be customers on the same project, which allows each of them to manage their own discrete workflows for the project and retain access to project information for the duration of their subscription while allowing us to receive revenue from multiple customers on the same project independent of seat count.
We believe that the market for our platform is large, and we are highly focused on our long-term growth. Our ability to generate revenue, continue to grow our business, and serve the broader needs of the construction industry depends on our ability to efficiently acquire new customers, retain existing customers and expand their use of our products, services, and platform, and maintain or increase the pricing of, and value provided by, our products and services. We drive new customer acquisitions by investing across our sales and marketing engine to engage prospective customers, increase brand awareness, and drive adoption of our products, services, and platform. We drive retention of existing customers and expansion of their use of our products, services, and platform by focusing on our customers’ success.
Despite macroeconomic challenges, we have seen an increase in the number of customers that contributed more than $100,000 of annual recurring revenue (“ARR”), which was 2,710, 2,333, and 2,008 as of December 31, 2025, 2024, and 2023, respectively, reflecting year-over-year growth rates of 16% in 2025 and 16% in 2024. Customers that contributed more than $100,000 of ARR represented 66%, 63%, and 60% of total ARR in each of the annual periods ending December 31, 2025, 2024, and 2023, respectively. The number of customers that contributed more than $1,000,000 of ARR was 115, 86, and 62 as of December 31, 2025, 2024, and 2023, respectively, reflecting year-over-year growth rates of 34% in 2025 and 39% in 2024. Customers that contributed more than $1,000,000 of ARR represented 20%, 17%, and 14% of total ARR in each of the annual periods ending December 31, 2025, 2024, and 2023, respectively. As of December 31, 2025, 2024, and 2023, the number of customers on our platform was 17,850, 17,088, and 16,367, respectively, reflecting year-over-year growth rates of 4% in 2025 and 4% in 2024. Our total customer count is heavily influenced by the number of small- and medium-sized business (“SMB”) customers we add in a given period. SMB customers represent a small portion of our total ARR, whereas Enterprise and Mid Market customers represent the vast majority of our total ARR. For that reason, we do not believe our total customer count is an accurate representation of our business performance and plan to discontinue the disclosure of total customer count starting in 2026. We believe the better metric to assess our business performance is the growth in the number of customers that contributed more than $100,000 of ARR, which has grown from 650 at the time of our IPO to more than 2,700 customers today. We began to disclose this metric on a quarterly basis starting in the second fiscal quarter of 2024 and plan to continue sharing this metric on a quarterly basis going forward. All aforementioned customer counts exclude customers acquired from business combinations that do not have standard Procore annual contracts. For a description of how we calculate ARR, see the sub-heading titled “Acquiring New Customers and Retaining and Expanding Existing Customers’ Use of Our Platform,” under the heading “Certain Factors Affecting Our Performance” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Our success in building our customer base, expanding usage and value for existing customers, and helping digitize the industry has allowed us to achieve significant growth. We generated revenue of $1.3 billion in 2025, $1.2 billion in 2024, and $1.0 billion in 2023, representing year-over-year growth of 15% in 2025 and 21% in 2024. We had net losses of $100.8 million in 2025, $106.0 million in 2024, and $189.7 million in 2023.
Our Industry
We serve the construction industry ecosystem, which is highly fragmented and specialized.
The construction process relies on coordination among highly fragmented and specialized groups. Key stakeholders engage in financing, budgeting, designing, building, and maintaining commercial, residential, industrial, and infrastructure projects while navigating varying responsibilities, risk profiles, and motives. Completing a project safely, on time, and within budget requires effective collaboration between stakeholders
6
across workstreams, sharing information in a timely and effective manner, and navigating increasing contractual and regulatory complexity.
The construction industry has four defining characteristics:
•Construction is a custom business. Construction projects are typically custom, and each project has a distinctive combination of dynamic variables, including unique project teams, design, materials, financing, terrain, regulations, and schedules.
•The workforce is mobile and decentralized. Construction happens on the jobsite, not at the office, which increases the importance of mobile access to project data. Construction workers often operate with out-of-date or incomplete project information and struggle to collaborate effectively with other stakeholders, leading to mistakes that may translate to costly rework and extended project timelines. Given mistakes not only impact the progress of the project but also expose workers to safety risks, the need for mobile collaboration solutions and timely access to instructions, designs, documentation, and reporting has become increasingly critical for managing and optimizing a dispersed workforce.
•Stakeholder dynamics are complex. Construction projects require collaboration across a wide range of stakeholders who often have a different set of interests and lack familiarity and trust with one another, yet are all interdependent and ultimately share project risks. All project participants are adversely impacted when a project is delayed, runs over budget, or does not meet quality or safety requirements. In order to avoid related financial losses, stakeholders are often quick to redirect responsibility to other participants on a project and seek to resolve disputes in court.
•Change is constant. Construction project designs, schedules, and budgets are modified frequently. Construction teams typically run into unforeseen issues requiring a workaround, or the owner may decide to make a modification to the project. As a result, the design that teams set out to build rarely matches the finished product. A modification can trigger costly changes to a project’s schedule and require timely communication to teams on the ground to minimize or avoid mistakes.
Our Platform
Our platform is built to be modern and intuitive, with a modular and extensible architecture that not only includes the breadth and depth of functionality of our own products, but also integrates with third-party applications and our customers’ own customized applications. We offer a broad set of product solutions that we primarily monetize through subscriptions. We also support and enhance our customers’ use of these product solutions with a comprehensive set of platform capabilities.
Product Solutions
Our platform includes four integrated product solutions that allow data and workflows to transparently cross the phases of a construction project. Our customers typically purchase subscriptions to access our products on a product-by-product basis. The products that a customer chooses to purchase within each integrated product solution depend on the customer’s specific requirements and the distinct buyer personas that will utilize the products. We also provide different functionality to customers for each product, depending on a customer’s unique needs. Our platform approach allows us to drive additional spend from our customers by cross-selling additional product solutions, services, and platform capabilities that address their needs.
•Preconstruction. Our Preconstruction products, including Estimating, Bid Management, 2D/3D Takeoff, Design Coordination, and Prequalification, facilitate collaboration between internal and external stakeholders during the takeoff, planning, budgeting, estimating, bidding, design, and partner selection phases of a construction project. Our products are designed to help reduce financial and operational risk across key stakeholders before construction begins.
•Project Execution. Our Project Execution products, including Project Management, Quality, Safety, Field Scheduling, and Closeout, connect construction project teams by helping to ensure project information is aggregated in an up-to-date cloud-based platform, available to all project participants, and accurate so that work on the jobsite is completed correctly and safely. These products enable collaboration, information transmission and storage, and safety regulation compliance for teams on the jobsite and in the back office. Users have the ability to log critical information, track project progress,
7
and escalate issues for approvals from the correct team members. They can also identify, understand, and proactively resolve the causes of issues and risky behaviors before they result in an injury or accident.
•Resource Management. Our Resource Management products, including Field Productivity, Workforce Planning, Equipment Management, and Materials Management, help customers schedule, track, and forecast workforce and equipment productivity, improve time management, communicate more efficiently with their workforces, optimize procurement and movement of materials, and better manage profitability on construction projects. Customers can use these products to create detailed productivity records that can be referenced during the bidding process.
•Financial Management. Our Financial Management products, including Project Financials, Accounting Integrations, and Procore Pay, provide customers with visibility into the financial health of their individual construction projects and portfolios, facilitate untethered access to financial data, and support payments between key stakeholders. These products improve cost management, invoice collection, review, and approval, and budget forecasting and tracking. Our platform also supports integrations with a majority of the industry’s preferred accounting systems to minimize data entry errors. Our Procore Pay solution handles all aspects of the payment process between general contractors and subcontractors via a single system that promotes visibility and transparency for tracking payment requirements and automates the exchange of lien waivers.
Bundled Packages
In February 2026, we began offering customers access to our products in bundled packages in addition to on an à la carte basis. These bundled packages are designed to provide integrated solutions tailored to the needs of our core customer segments. We offer four bundled packages: Project Execution, Cost Management, Resource Management, and Project Lifecycle Management. Each package is offered in different tiers–Essentials, Base, and/or Enterprise–to accommodate varying customer needs and operational complexity.
Instead of picking and choosing from products within our four product solution categories, customers will choose one or more of the bundled packages and a tier within each package, and have access to the products within each selected package and tier. This change in how we offer our products is accompanied by changes to the names of certain products, as well as changes to how we offer certain of the capabilities described below under the sub-heading below titled “Platform Capabilities.” The bundled packages are available across our primary geographic markets, with certain regional variations in product naming and feature availability that accommodate local market practices and regulatory requirements.
Platform Capabilities
Our platform features a number of capabilities that underlie our product solutions and enable us to launch new products and services and increase the breadth and depth of our existing products and services. Our broad range of platform capabilities support the diverse needs of the different personas that use our products and platform. In order to create a centralized hub for construction project information, we have developed an extensible platform that connects our customers’ business applications, people, devices, and data. In connection with the launch of our bundled package offerings, certain of the platform capabilities described below, including Artificial Intelligence, Analytics & Insights, Building Information Modeling (“BIM”), Collaboration, and Document Management, can be purchased as part of certain bundled packages and tiers in lieu of, or in addition to, on an à la carte basis. Our platform capabilities include:
•AI.
Loading financial statements...
Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
| Line item |
|---|
| Period ending |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K dated February 24, 2026 (our “2025 Form 10-K”). You should review the disclosures under the section titled “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and under Part I, Item 1A, “Risk Factors” in our 2025 Form 10-K for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. These statements, like all statements in this report, speak only as of their date (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments, except as required by law.
Overview
Our mission is to connect everyone in construction on a global platform.
We are the leading global provider of construction management software, and are helping transform one of the oldest, largest, and least digitized industries in the world. We focus exclusively on connecting and empowering the construction industry’s key stakeholders, such as owners, general contractors, and specialty contractors, to collaborate and access our capabilities from any location on any connected device. Our platform is modernizing and digitizing construction management by enabling timely access to critical project information, simplifying complex workflows, and facilitating seamless communication among relevant stakeholders, all of which we believe positions us to serve as a critical system of record and collaboration for the construction industry. We also continue to develop other products and services to address related challenges faced by the construction industry’s key stakeholders. Our products, services, and platform help our customers increase productivity and efficiency, reduce rework and costly delays, improve safety and compliance, and enhance financial transparency and accountability.
In short, we build the software for the people that build the world.
Our customers range from small businesses managing a few million dollars of annual construction volume to global enterprises managing billions of dollars of annual construction volume. Our core customers are owners, general contractors, and specialty contractors operating across the residential and non-residential segments of the construction industry. We primarily sell subscriptions to access our products through our direct sales team, which is specialized by geography, followed by size and type of stakeholder.
Our products are offered on our cloud-based platform and are designed to be easy to configure and deploy. Our users can access our products on computers, smartphones, and tablets through any web browser or from our mobile application available for both the iOS and Android platforms.
We generate substantially all of our revenue from subscriptions to access our products. We primarily sell our products on a subscription basis for a fixed fee with pricing generally based on the number and mix of products a customer subscribes to and the fixed aggregate dollar volume of construction work contracted to run on our platform annually, which we refer to as annual construction volume. As our customers subscribe to additional products or increase the annual construction volume contracted to run on our platform, we generate more revenue. We do not provide refunds for unused construction volume. We generally do not charge customers based on consumption or on a per-project basis. Our business model is designed to encourage rapid, widespread adoption of our products by generally allowing for unlimited users. We typically do not charge a per-seat or per-user fee, meaning that customers can invite all project participants, including owners, general contractors, specialty contractors, architects, and engineers, to engage with our platform as part of a project team without incurring additional fees. We offer access to our products on a per-user basis to certain of our owner customers who have preferred to purchase access on a per-user basis. Customers are able to invite project participants to join our platform, including their employees and collaborators, who are other project participants that engage with our platform but do not pay us for such use. Multiple participants can be customers on the same project, which allows each of them to manage their own discrete workflows for the
31
project and retain access to project information for the duration of their subscription while allowing us to receive revenue from multiple customers on the same project independent of seat count.
Recent Developments
On July 27, 2026, we entered into an Agreement and Plan of Merger to acquire DroneDeploy (the “DroneDeploy Merger Agreement”) for a purchase price of approximately $845.0 million in cash, subject to adjustment as provided in the DroneDeploy Merger Agreement (the “DroneDeploy Merger”). DroneDeploy is a software company that provides cloud-control software solutions for drones and other robots, which include automated flight safety checks, workflows, and real-time mapping and data processing. In addition to the purchase price, we have agreed to create a retention pool for the benefit of certain service providers of DroneDeploy consisting of equity awards, or cash where equity cannot be granted due to applicable law, to encourage such service providers to continue providing services to us following the closing of the DroneDeploy Merger. The completion of this transaction is anticipated to occur later this year and is subject to the satisfaction of certain closing conditions.
In connection with our entry into the DroneDeploy Merger Agreement, on July 27, 2026, we entered into a debt financing commitment letter (the “Commitment Letter”) with Goldman Sachs Bank USA, pursuant to which it committed to provide us with debt financing in an aggregate principal amount of up to $700.0 million in the form of a 364-day senior secured bridge loan facility, subject to customary conditions. Subject to market conditions and other factors, we may fund a portion of the purchase price through one or more bank financing or capital markets transactions in lieu of all or a portion of the bridge facility.
Certain Factors Affecting Our Performance
Acquiring New Customers and Retaining and Expanding Existing Customers’ Use of Our Platform
We believe that the market for our platform is large, and we are highly focused on our long-term growth. Our ability to generate revenue, continue to grow our business, and serve the broader needs of the construction industry depends on our ability to efficiently acquire new customers, retain existing customers and expand their use of our products, services, and platform, and maintain or increase the pricing of our products and services. We drive new customer acquisitions by investing across our sales and marketing engine to engage prospective customers, increase brand awareness, and drive adoption of our products, services, and platform. We drive retention of existing customers and expansion of their use of our products, services, and platform by focusing on our customers’ success.
To support these efforts, beginning in 2024 and continuing through 2025, we evolved our GTM operating model by, among other things, transitioning to a general manager model, adding new product and technical specialists to our GTM teams and, increasing our sales headcount. We believe that the evolved GTM operating model will improve our long-term operating efficiency, best position us for sustainable long-term growth, and enhance our ability to capture our market opportunity. However, if we are not able to realize the benefits of this model, or otherwise fail to acquire new customers, retain existing customers, or expand existing customers’ use of our products, services, and platform, our business, financial condition, results of operations, and prospects will be adversely affected, potentially materially.
Despite macroeconomic challenges, we have seen an increase in the number of customers that contributed more than $100,000 of annual recurring revenue (“ARR”), which increased from 2,517 as of June 30, 2025 to 2,871 as of June 30, 2026, reflecting a year-over-year growth rate of 14%. The number of customers that contributed more than $100,000 of ARR represented 68% and 64% of our total ARR as of June 30, 2026 and 2025, respectively. As of June 30, 2026, 59%, 26%, and 15% of our ARR was generated from general contractors, owners, and specialty contractors, respectively. All aforementioned customer counts, and the customer ARR mix exclude customers acquired from business combinations that do not have standard Procore annual contracts.
In addition, our gross retention rate (“GRR”) was 95% as of both June 30, 2026 and June 30, 2025. Our GRR reflects only customer losses and does not reflect customer expansion or contraction. We believe our high GRR demonstrates that we serve a vital role in our customers’ operations, as the vast majority of our customers continue to use our products and platform and to renew their subscriptions. We believe that GRR is a key metric to understand our ability to retain our customer base, to evaluate whether our products and platform are addressing our customers’ needs throughout the year.
32
To calculate GRR at the end of a particular period, we first calculate our ARR from the cohort of active customers at the end of the period 12 months prior to the end of the period selected. We define ARR at the end of a particular period as the annualized dollar value of our subscriptions from customers as of such period end date. For multi-year subscriptions, ARR at the end of a particular period is measured by using the stated contractual subscription fees as of the period end date on which ARR is measured. For example, if ARR is measured during the first year of a multi-year contract, the first-year subscription fees are used to calculate ARR. ARR at the end of a particular period includes the annualized dollar value of subscriptions for which the term has not ended, and subscriptions for which we are negotiating a subscription renewal. ARR should be viewed independently of revenue determined in accordance with accounting principles generally accepted in the U.S. (“GAAP” or “U.S. GAAP”) and does not represent our U.S. GAAP revenue on an annualized basis. ARR is not intended to be a replacement or forecast of revenue. We then calculate the value of ARR from any customers whose subscriptions terminated and were not renewed during the 12 months preceding the end of the period selected, which we refer to as cancellations. We then divide (a) the total prior period ARR minus cancellations by (b) the total prior period ARR to calculate GRR.
Remaining Performance Obligations
Our subscriptions typically have a term of one to three years. The transaction price allocated to remaining performance obligations (“RPO”) under our subscriptions represents the contracted transaction price that has not yet been recognized as revenue, which includes deferred revenue and amounts under non-cancelable subscriptions that will be invoiced and recognized as revenue in future periods. Our current RPO (“cRPO”) represents future revenue under existing contracts that is expected to be recognized as revenue in the next 12 months.
The following table presents our cRPO and non-current RPO at the end of each period:
| June 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percent | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Remaining performance obligations | |||||||||||||||||||||||
| Current | $ | 1,072,490 | $ | 879,489 | $ | 193,001 | 22 | % | |||||||||||||||
| Non-current | 597,425 | 464,268 | 133,157 | 29 | % | ||||||||||||||||||
| Total remaining performance obligations | $ | 1,669,915 | $ | 1,343,757 | $ | 326,158 | 24 | % | |||||||||||||||
We believe that cRPO is a key metric to track our ability to win fixed revenue commitments from new customers and to expand and retain existing customers. However, as our average contract duration continues to lengthen due to increased purchases of multi-year subscriptions, our cRPO growth rate may not directly correlate with our actual or expected revenue growth in current or future periods. As of June 30, 2026, cRPO increased by $193.0 million, or 22%, year-over-year. Approximately 42% of the increase was attributable to existing customers and 58% was attributable to new customers acquired during the twelve months ended June 30, 2026. We expect RPO to change from period to period primarily due to the size, timing, and duration of new customer contracts and customer renewals.
Continued Technology Innovation and Strategic Expansion of Our Products and Services
We plan to continue to invest in technology innovation and product development, including Procore AI, which includes tools and products that are purpose-built for the construction industry, to enhance the capabilities of our platform. Additional capabilities will also enable customers and collaborators to manage new workflows on our platform and allow us to attract a broader set of stakeholders. We have introduced and continue to develop new products and services organically and through our acquisitions.
We intend to continue to invest in building additional products, services, offerings, features, and functionality that expand our capabilities and facilitate the extension of our platform. For example, in January 2026, we acquired Toric Labs, Inc. (d/b/a Datagrid), a leader in agentic AI solutions for the construction industry, to accelerate our AI strategy, and in January 2025, we acquired Novorender AS, a leader in advanced building information modeling rendering technology, to enhance our capabilities for large-scale construction projects. In
33
addition, in July 2026, we entered into the DroneDeploy Merger Agreement to acquire DroneDeploy, a leader in reality capture and robotic automation. We also intend to continue to evaluate strategic acquisitions and investments in businesses and technologies to drive product and market expansion. While the impact of these developments are not yet material to our business, our future success is dependent on our ability to successfully develop or acquire, market, and sell existing and new products and services to both new and existing customers.
International Growth
We see international expansion as a major, and largely greenfield, opportunity for growth as we look to capture a larger part of the worldwide construction market. We have an international sales and marketing presence with offices in Sydney, Australia; Toronto, Canada; London, England; Dublin, Ireland; and Dubai, United Arab Emirates (“UAE”). As a result of our international efforts, we support multiple languages and currencies. Non-U.S. revenue as a percentage of our total revenue was 15% for both the six months ended June 30, 2026 and 2025. We determine the percentage of non-U.S. revenue based on the billing location of each customer. Fluctuations in foreign currencies may positively or negatively impact the amount of revenue that we report for our foreign subsidiaries upon the translation of these amounts into U.S. Dollars.
Furthermore, we believe global demand for our products, services, and platform will continue to increase as we expand our international sales and marketing efforts, and the awareness of our products, services, and platform grows. However, our ability to conduct our business operations internationally will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, currencies, cultures, customs, and commercial markets, as well as differing legal, tax, regulatory, and alternative dispute systems. We have made, and plan to continue to make, significant investments in international markets. While these investments may adversely affect our operating results in the near term, we believe they will contribute to our long-term growth.
Macroeconomic Factors
Macroeconomic factors and geopolitical events that impact the construction industry, such as elevated inflation and responses by governments to address it, changing interest rates, volatility in capital markets, bank failures, fluctuations in foreign exchange rates, global pandemics, trade wars or shifting tariffs, evolving and potentially conflicting regulatory requirements, and wars and other conflicts may impact our customers’ spending as well as our operating expenses and cash flows. However, as such factors evolve, we continue to monitor the ways in which they may directly or indirectly impact our business, results of operations, and financial condition. See the section titled “Risk Factors” in Part I, Item 1A, of our 2025 Form 10-K for further discussion.
34
Components of Results of Operations
Revenue
We generate substantially all of our revenue from subscriptions to access our products and related support. Subscriptions are sold for a fixed fee and revenue is recognized ratably over the term of the subscription. Our subscriptions generally have annual or multi-year terms, are typically subject to renewal at the end of the subscription term, and are non-cancelable. To the extent we invoice our customers in advance of revenue recognition, we record deferred revenue. Consequently, a portion of the revenue that we report each period is attributable to the recognition of revenue previously deferred related to subscriptions that we entered into during previous periods.
Cost of Revenue
Cost of revenue primarily consists of personnel-related compensation expenses for our customer support team, including salaries, benefits, stock-based compensation, payroll taxes, commissions, and bonuses. Additionally, cost of revenue includes non-personnel-related expenses, such as third-party hosting costs, amortization of capitalized software development costs related to our platform, amortization of acquired technology intangible assets, software license fees, and allocated overhead. We expect our cost of revenue to increase on an absolute dollar basis as our revenue and acquisition activities increase. We intend to continue to invest additional resources in platform hosting, customer support, and software development as we grow our business, support our GTM operating model, and ensure that our customers are realizing the full benefit of our products. The level and timing of investment in these areas could affect our cost of revenue in the future.
Costs related to the development of internal-use software for new products and major platform enhancements are capitalized until the software is substantially complete and ready for its intended use. Capitalized software development costs are amortized on a straight-line basis over the developed software’s estimated useful life of two years and the amortization is recorded in cost of revenue.
Operating Expenses
Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. For each of these categories of expense, personnel-related compensation expenses are the most significant component, which include salaries, stock-based compensation, commissions, benefits, bonuses, and payroll taxes.
Sales and Marketing
Sales and marketing expenses primarily consist of personnel-related compensation expenses for our sales and marketing organizations. Additionally, sales and marketing expenses include non-personnel-related expenses, such as advertising costs, marketing events, travel, trade shows, and other marketing activities; contractor costs to supplement our staff levels; consulting services; amortization of acquired customer relationship intangible assets; and allocated overhead. We expense advertising and other promotional expenditures as incurred. We expect sales and marketing expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue, as our business continues to grow, as we support our GTM operating model, and as we increase our investment in sales and marketing to drive customer growth.
Research and Development
Research and development expenses primarily consist of personnel-related compensation expenses for our engineering, product, and design teams, net of capitalized software development costs. Additionally, research and development expenses include non-personnel-related expenses, such as contractor costs to supplement our staff levels; computer software expenses; consulting services; amortization of certain acquired intangible assets used in research and development activities; and allocated overhead. We expect research and development expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue for the foreseeable future as we continue to build, enhance, maintain, and scale our products, services, and platform.
35
General and Administrative
General and administrative expenses primarily consist of personnel-related compensation expenses for our finance, human resources, information technology, legal, executive, and other administrative functions. Additionally, general and administrative expenses include non-personnel-related expenses, such as professional fees for legal, audit, tax, and other external consulting services; computer software expenses; costs associated with operating as a public company, including insurance costs, professional services, investor relations, and other compliance costs; property and use taxes; licenses; travel and entertainment costs; acquisition-related transaction expenses; and allocated overhead. We expect general and administrative expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue as our business continues to grow, including in relation to our international expansion.
Interest Income
Interest income consists primarily of interest income earned on our marketable securities, money market funds, and cash savings accounts.
Interest Expense
Interest expense consists primarily of costs associated with our finance leases.
Accretion Income, Net
Accretion income, net consists of accretion of discounts, net of amortization of premiums, related to our available-for-sale marketable debt securities.
Other Income , Net
Other income, net primarily consists of gains or losses on foreign currency transactions, unrealized gains or losses on equity securities, and miscellaneous other income and expenses.
(Benefit from) Provision for Income Taxes
(Benefit from) provision for income taxes consists primarily of income taxes of U.S. state franchise taxes and certain foreign jurisdictions in which we conduct business, net of the release of valuation allowance as a result of deferred tax liabilities from acquisitions that are an available source of income to realize our deferred tax assets. As we expand our international operations, we expect to incur increased foreign tax expenses. We have a full valuation allowance for net U.S. deferred tax assets. The U.S. valuation allowance primarily includes net operating loss carryforwards and tax credits related primarily to research and development for our operations in the U.S. We expect to maintain this full valuation allowance for our net U.S. deferred tax assets for the foreseeable future.
36
Results of Operations
The following tables set forth our condensed consolidated statements of operations data and such data as a percentage of revenue for each of the periods indicated. Certain percentages below may not sum due to rounding.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenue | $ | 375,207 | $ | 323,919 | $ | 734,490 | $ | 634,551 | |||||||||||||||
Cost of revenue(1)(2)(3) | 75,411 | 67,732 | 146,904 | 132,658 | |||||||||||||||||||
| Gross profit | 299,796 | 256,187 | 587,586 | 501,893 | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
Sales and marketing(1)(2)(3)(4) | 145,785 | 141,897 | 294,966 | 280,581 | |||||||||||||||||||
Research and development(1)(2)(3)(4) | 93,349 | 88,902 | 178,914 | 176,511 | |||||||||||||||||||
General and administrative(1)(3)(4) | 56,335 | 55,655 | 125,050 | 111,313 | |||||||||||||||||||
| Total operating expenses | 295,469 | 286,454 | 598,930 | 568,405 | |||||||||||||||||||
| Income (loss) from operations | 4,327 | (30,267) | (11,344) | (66,512) | |||||||||||||||||||
| Interest income | 4,422 | 5,015 | 8,944 | 11,012 | |||||||||||||||||||
| Interest expense | (179) | (298) | (447) | (583) | |||||||||||||||||||
| Accretion income, net | 714 | 2,027 | 1,711 | 4,474 | |||||||||||||||||||
| Other income, net | 5,879 | 2,023 | 5,323 | 2,414 | |||||||||||||||||||
| Income (loss) before (benefit from) provision for income taxes | 15,163 | (21,500) | 4,187 | (49,195) | |||||||||||||||||||
| (Benefit from) provision for income taxes | (1,759) | (411) | (3,639) | 4,883 | |||||||||||||||||||
| Net income (loss) | $ | 16,922 | $ | (21,089) | $ | 7,826 | $ | (54,078) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenue | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
Cost of revenue(1)(2)(3) | 20 | % | 21 | % | 20 | % | 21 | % | |||||||||||||||
| Gross profit | 80 | % | 79 | % | 80 | % | 79 | % | |||||||||||||||
| Operating expenses | |||||||||||||||||||||||
Sales and marketing(1)(2)(3)(4) | 39 | % | 44 | % | 40 | % | 44 | % | |||||||||||||||
Research and development(1)(2)(3)(4) | 25 | % | 27 | % | 24 | % | 28 | % | |||||||||||||||
General and administrative(1)(3)(4) | 15 | % | 17 | % | 17 | % | 18 | % | |||||||||||||||
| Total operating expenses | 79 | % | 88 | % | 82 | % | 90 | % | |||||||||||||||
| Income (loss) from operations | 1 | % | (9 | %) | (2 | %) | (10 | %) | |||||||||||||||
| Interest income | 1 | % | 2 | % | 1 | % | 2 | % | |||||||||||||||
| Interest expense | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||||||
| Accretion income, net | 0 | % | 1 | % | 0 | % | 1 | % | |||||||||||||||
| Other income, net | 2 | % | 1 | % | 1 | % | 0 | % | |||||||||||||||
| Income (loss) before (benefit from) provision for income taxes | 4 | % | (7 | %) | 1 | % | (8 | %) | |||||||||||||||
| (Benefit from) provision for income taxes | (0%) | (0%) | (0%) | 1 | % | ||||||||||||||||||
| Net income (loss) | 5 | % | (7 | %) | 1 | % | (9 | %) | |||||||||||||||
37
(1)Includes stock-based compensation expense and amortization of capitalized stock-based compensation as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Cost of revenue | $ | 6,196 | $ | 5,868 | $ | 12,138 | $ | 11,136 | |||||||||||||||
| Sales and marketing | 18,160 | 17,589 | 38,748 | 32,539 | |||||||||||||||||||
| Research and development | 21,994 | 21,237 | 40,549 | 39,661 | |||||||||||||||||||
| General and administrative | 14,212 | 13,718 | 29,614 | 26,100 | |||||||||||||||||||
| Total stock-based compensation expense* | $ | 60,562 | $ | 58,412 | $ | 121,049 | $ | 109,436 | |||||||||||||||
*Includes amortization of capitalized stock-based compensation of $3.8 million and $2.8 million, respectively, for the three months ended June 30, 2026 and 2025; and $7.3 million and $5.6 million, respectively, for the six months ended June 30, 2026 and 2025; which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs.
(2)Includes amortization of acquired intangible assets as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Cost of revenue | $ | 8,311 | $ | 8,015 | $ | 16,019 | $ | 15,617 | |||||||||||||||
| Sales and marketing | 905 | 3,346 | 2,026 | 6,651 | |||||||||||||||||||
| Research and development | 221 | 658 | 883 | 1,290 | |||||||||||||||||||
| Total amortization of acquired intangible assets | $ | 9,437 | $ | 12,019 | $ | 18,928 | $ | 23,558 | |||||||||||||||
(3)Includes employer payroll tax on employee stock transactions as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Cost of revenue | $ | 129 | $ | 200 | $ | 303 | $ | 461 | |||||||||||||||
| Sales and marketing | 572 | 748 | 1,324 | 1,879 | |||||||||||||||||||
| Research and development | 687 | 1,103 | 1,737 | 2,829 | |||||||||||||||||||
| General and administrative | 315 | 462 | 817 | 1,345 | |||||||||||||||||||
| Total employer payroll tax on employee stock transactions | $ | 1,703 | $ | 2,513 | $ | 4,181 | $ | 6,514 | |||||||||||||||
(4)Includes acquisition-related expenses as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Sales and marketing | $ | 166 | $ | 138 | $ | 320 | $ | 794 | |||||||||||||||
| Research and development | 3,001 | 695 | 5,587 | 1,744 | |||||||||||||||||||
| General and administrative | 1,298 | 166 | 2,543 | 541 | |||||||||||||||||||
| Total acquisition-related expenses | $ | 4,465 | $ | 999 | $ | 8,450 | $ | 3,079 | |||||||||||||||
38
Comparison of the Three Months Ended June 30, 2026 and 2025
Revenue
| Three Months Ended June 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percent | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Revenue | $ | 375,207 | $ | 323,919 | $ | 51,288 | 16 | % | |||||||||||||||
During the three months ended June 30, 2026, our revenue increased by $51.3 million, or 16%, compared to the three months ended June 30, 2025, of which approximately 88% was attributable to revenue from existing customers and approximately 12% was attributable to revenue from new customers acquired during the three months ended June 30, 2026. The increase in revenue from existing customers includes the net benefit of a full quarter of subscription revenue in the second quarter of 2026 from customers that were newly acquired or expanded their subscriptions between the second quarter of 2025 and the first quarter of 2026 and continued or expanded their subscriptions, as applicable, in the second quarter of 2026.
Cost of Revenue, Gross Profit, and Gross Margin
| Three Months Ended June 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percent | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Cost of revenue | $ | 75,411 | |||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-08-21 | Singer Benjamin C | Chief Legal Officer; Secretary | Sell | -3,943 | $63.35 | -$249,789 |
| 2026-08-19 | Steele Elisa | Director | Sell | -1,500 | $63.00 | -$94,500 |
| 2026-08-11 | Fleming William Fred Jr | SVP, Corporate Controller | Sell | -10,000 | $58.95 | -$589,500 |
| 2026-08-10 | Courtemanche Craig F. Jr. | Director | Sell | -56,122 ×2 | $57.11 | -$3,205,313 |
| 2026-08-04 | O CONNOR KEVIN J indirect | Director | Sell | -7,692 | $54.98 | -$422,906 |
| 2026-08-03 | O CONNOR KEVIN J indirect | Director | Sell | -15,386 ×3 | $54.93 | -$845,076 |
| 2026-07-10 | Courtemanche Craig F. Jr. | Director | Sell | -56,122 ×2 | $43.90 | -$2,463,531 |
| 2026-07-02 | O CONNOR KEVIN J indirect | Director | Sell | -5,769 ×2 | $42.82 | -$247,008 |
| 2026-07-01 | O CONNOR KEVIN J indirect | Director | Sell | -5,769 | $41.93 | -$241,894 |
| 2026-06-16 | O CONNOR KEVIN J indirect | Director | Sell | -5,769 | $42.00 | -$242,298 |
| 2026-06-15 | O CONNOR KEVIN J indirect | Director | Sell | -5,775 ×2 | $42.92 | -$247,846 |
| 2026-06-12 | Courtemanche Craig F. Jr. indirect | Director | Buy | +2 | ||
| 2026-06-12 | Courtemanche Craig F. Jr. indirect | Director | Sell | -2 | ||
| 2026-06-10 | Courtemanche Craig F. Jr. | Director | Sell | -56,122 ×2 | $45.14 | -$2,533,545 |
| 2026-05-29 | Singer Benjamin C | Chief Legal Officer; Secretary | Sell | -3,942 | $50.00 | -$197,100 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-11-05 10-Q expected by 2026-11-12 (in 72 days)
- ~2027-02-21 10-K expected by 2027-02-24 (in 180 days)
- ~2027-05-05 10-Q expected by 2027-05-12 (in 253 days)
- ~2027-07-30 10-Q expected by 2027-08-06 (in 339 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-08-06 8-K Material Agreement Entered; Material Financial Obligation; Unregistered Equity Sale; Other Events; Financial Statements and Exhibits
- 2026-07-31 10-Q Quarterly Report
- 2026-07-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-29 8-K Material Agreement Entered; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-07-02 8-K Officer/Director Change
- 2026-05-06 10-Q Quarterly Report
- 2026-05-05 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-24 DEF 14A Proxy Statement
- 2026-04-22 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-03-10 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-02-24 10-K Annual Report
- 2026-02-12 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-11 8-K Officer/Director Change
- 2025-11-12 8-K Officer/Director Change
- 2025-11-06 10-Q Quarterly Report