Procore (PCOR) Q4 2025 Earnings Call Transcript

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DATE

Thursday, February 12, 2026 at 5 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Ajay Gopal
• Chief Financial Officer — Howard Fu
• Head of Investor Relations — Alexandra Geller

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TAKEAWAYS

• Total revenue -- $349 million in Q4, increasing 15.6% year over year.
• International revenue -- Grew 14% year over year; on a constant currency basis, growth was 15% year over year.
• Non-GAAP operating income -- $52 million, reflecting a non-GAAP operating margin of 15% for the quarter.
• Current remaining performance obligations (RPO) -- Up 22% year over year, with current deferred revenue up 18% year over year.
• $100,000+ ARR customers -- Rose 20% year over year, totaling more than 2,700; these customers represent 66% of total ARR.
• $1 million+ ARR customers -- Ended the year at 115 customers, representing 34% year-over-year growth.
• Procore Pay customers -- Nearly 450 customers at year-end, increasing more than 70% year over year.
• Current RPO growth driver -- Longer average contract durations contributed to stronger reported growth; normalized growth aligns with revenue and ending ARR.
• Free cash flow -- $90 million in Q4, $215 million for the full year, reflecting 69% year-over-year growth and a 16% free cash flow margin.
• Share count dilution -- Weighted average diluted share count grew less than 1% in Q4.
• Stock-based compensation (SBC) -- 23% of revenue in Q4, impacted by a one-time CEO transition charge; excluding this, SBC was 6.6%, in line with Q3.
• Fiscal 2026 revenue guidance -- $1.489 billion to $1.494 billion, indicating 13% year-over-year growth.
• Fiscal 2026 non-GAAP operating margin guidance -- 17.5%-18%, suggesting annual margin expansion of 340-390 basis points.
• Fiscal 2026 free cash flow margin guidance -- 19%, an implied increase of 270 basis points year over year.
• $100,000+ ARR customer disclosure -- Going forward, only this metric will be reported quarterly; total customer count disclosure discontinued.
• AI adoption metrics -- CEO Ajay Gopal stated, "we have something like 66,000 unique active users who are using Procore AI. We have got something like 700 customers nearly who have created thousands of agents on Procore."
• New ENR 400 win -- Procore displaced an incumbent vendor for its largest new logo win of the quarter, with this customer adopting Procore Pay and Resource Management.
• FedRAMP Moderate authorization -- Achieved, enabling engagement with U.S. federal and state government customers through FedRAMP Marketplace.
• International seven-figure deal -- Secured a top international annual deal with a U.K. data center hyperscaler, positioning Procore in a fast-growing AI-related vertical.
• AI monetization strategy -- CEO Ajay Gopal indicated, "we are likely to be including some of those AI offerings within upcoming bundles that are part of some new packaging. We are also likely to be including some consumption-based components."

SUMMARY

Management established Procore Technologies (NYSE:PCOR)’s path for durable growth and increased margin expansion, emphasizing strong upmarket traction and a unique monetization strategy for AI, with momentum continuing in high-value customer cohorts. Expanding government and data center verticals were highlighted by FedRAMP authorization and a major international hyperscaler win, demonstrating growing penetration into mission-critical sectors. The company introduced guidance to track free cash flow margin, strengthening focus on its North Star metric and shareholder return alignment, while formally pivoting away from total customer count disclosures. The shift toward AI agent adoption and complementary acquisitions, notably Datagrid, is expected to broaden platform differentiation and recurring value capture.

• CFO Howard Fu confirmed, "Fiscal 2025 was an investment year," and indicated fiscal 2026 will emphasize productivity improvements over headcount growth on go-to-market.
• Management attributed normalized CRPO growth to contract duration trends and confirmed contract lengthening signals ongoing customer confidence and partnership commitment.
• Procore's pricing model, based on construction volume rather than seat count, could insulate revenue from workforce reductions and enable efficiency-driven margin gains supported by agentic AI deployment.
• International top-line progress was said to be slowed by macroeconomic factors, though management maintained long-term optimism for global growth via technical specialists and continued product-market fit initiatives.
• Customer win-backs and incumbent displacements underscored sustained competitive success, as noted by both the CEO and CFO.

INDUSTRY GLOSSARY

• ENR 400: The top 400 U.S. general contractors ranked by Engineering News-Record, an industry benchmark publication.
• FedRAMP: Federal Risk and Authorization Management Program, a security certification required for software solutions serving U.S. government entities.
• Agentic AI: Artificial intelligence systems that autonomously perform critical workflow actions, not just provide data or insights.
• Procore Pay: Procore's cloud payment management solution for the construction industry.
• CRPO (current remaining performance obligations): The value of contracted revenue not yet recognized that is expected to be realized in the next 12 months.
• ARR: Annual recurring revenue, the value of the recurring portion of customer contracts expressed on an annualized basis.

Full Conference Call Transcript

Operator: Good afternoon.

Operator: Thank you for attending today's Procore Technologies, Inc. FY 2025 Q4 Earnings Call. My name is Tamiya, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, I would now like to pass the conference over to your host, Alexandra Geller, Head of IR. Good afternoon, and welcome to Procore Technologies, Inc.'s 2025 Fourth Quarter Earnings Call. I am Alexandra Geller, Head of Investor Relations. With me today are Ajay Gopal, 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, platform and products, customer demand, operations, and macroeconomic and geopolitical conditions.

Operator: You should not rely on forward-looking statements as predictions of future events. All forward-looking statements are subject to risks, uncertainties, and assumptions and are based on management's current expectations and views as of today, February 12, 2026. Procore Technologies, Inc. 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 will 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 Ajay. Thank you, Alex, and welcome, everyone. I am excited to join you today to discuss our Q4 fiscal year 2025 results. As this is my first earnings call as CEO, I want to start by expressing my strong conviction in Procore Technologies, Inc.'s future. During my first few months, I have been spending time with customers and employees, and evaluating the business objectively to ensure our strategy is built for long-term value creation and that our operations have scaled for peak efficiency.

These initial months have reinforced my belief that Procore Technologies, Inc. possesses the hallmarks of a best-in-class vertical software leader and is building one of the most mission-critical vertical software platforms. As a crucial system of record for the built world, our ability to drive collaboration across all construction stakeholders creates a powerful network effect. Furthermore, I believe Procore Technologies, Inc. is uniquely positioned to lead in the AI era, driving unprecedented efficiency gains across the entire construction life cycle.

I am confident that the scale of our business, the capabilities of our products and platform, and the depth of our customer relationships give us a clear path to drive durable growth, meaningfully expand margins, and compound free cash flow per share over the long term. I am incredibly energized by the opportunity to scale this company to its full potential. My evaluation is happening in lockstep with disciplined execution across the company. As our Q4 and fiscal year 2025 results demonstrate, our operational pace continues to improve as we strengthen our position in the market.

Alexandra Geller: Let me shift

Ajay Gopal: to business performance. Building on four consecutive quarters of strong business momentum, we ended the year with an exceptional Q4 that exceeded the high end of our guidance. For the full year, we delivered 15% revenue growth and 14% non-GAAP operating margin, which represents year-over-year expansion of 400 basis points. I am particularly pleased with this result given the ongoing headwinds from a challenging construction environment, with the U.S. Census reporting negative growth for the combined nonresidential and multifamily sectors. Let me take a few minutes to walk you through some of the highlights of our strong quarter. I would like to start with the largest and most mature part of our business today, U.S. general contractors.

I am encouraged by how much opportunity exists within the segment. From new logos to volume expansion and product cross-sell, I believe this cohort of our business remains a cornerstone of our growth. In Q4, we added three new ENR 400 logos and expanded our run rate with more than 70 ENR 400 customers. One of our new ENR 400 additions joined Procore Technologies, Inc. as our largest new logo win of the quarter and displaced an incumbent vendor. They partnered with Procore Technologies, Inc. because of our unified enterprise-grade platform and their strong internal demand for our products.

They also adopted Procore Pay to automate their manual processes and Procore Resource Management for their growing fleet of capital assets for their self-perform work. With Procore Technologies, Inc., they expect to achieve a return on their investments in a few key areas: the ability to scale labor efficiently, drive schedule and cost predictability at the portfolio level, and gain new levels of enterprise governance and visibility. We have a track record of displacing incumbent vendors, and we believe this is yet another example of the construction industry realizing that Procore Technologies, Inc. is the gold standard. Of course, our U.S. GC opportunity goes well beyond the ENR 400.

To illustrate this market depth, we signed more than 3,100 $100,000+ ARR agreements this quarter with contractors outside of the ENR 400. An example of this is with an enterprise general contractor based in

Operator: Georgia.

Ajay Gopal: who returned to Procore Technologies, Inc. as a significant win-back. After leaving Procore Technologies, Inc. in 2024 for a cheaper solution, they returned to us in Q3, and then in Q4, they deepened their partnership with Procore Technologies, Inc. even further. They adopted our platform enterprise-wide and added Procore Pay and Resource Management, resulting in a high six-figure expansion. With Procore Technologies, Inc., they expect to enhance efficiency, support growth, and anticipate savings of more than 27,000 labor hours per year, the equivalent of adding roughly 13 full-time employees. While we never want to see a customer leave, this win-back reaffirms the simple truth: The value of Procore Technologies, Inc. creates an advantage that price alone cannot match.

These wins illustrate the clear value GC customers realize from using Procore Technologies, Inc. Our newer products, including Pay, Resource Management, Preconstruction, and Analytics, are compelling value drivers. We see these products as notable expansion opportunities for our global GC customers to drive incremental growth. Beyond U.S. GCs, we see substantial opportunity with the other stakeholders we serve, specifically owners and subcontractors. With our demonstrated product-market fit and our continued product innovation, these stakeholders represent extensive white space globally and will serve as significant growth levers for Procore Technologies, Inc. In the interest of time, let me focus on owners, the most diverse group of customers spanning industries such as technology, energy, utilities, education, health care, and real estate.

Our owners business continues to scale, with Q4 marking another quarter of consistent growth in this segment. To meet their evolving needs, we are planning to launch a suite of specialized products later this year, including portfolio management, planning, funding, and asset management. This empowers owners to more effectively manage their project portfolios, mitigate risks, and optimize costs. I am also proud to report Procore Technologies, Inc. achieved FedRAMP Moderate authorization this quarter and is now available in the FedRAMP Marketplace. This milestone validates our commitment to some of the most stringent data security standards in software, which will unlock further opportunities with U.S. federal and state government customers.

A primary example of the growing demand for these solutions is in data centers, where AI infrastructure is driving unprecedented investment. Procore Technologies, Inc. is the clear leader for data center construction. While data centers currently represent a modest 2% of total U.S. construction activity, the growth trajectory, fueled by the global demand for AI, is compelling. Procore Technologies, Inc. is ideally positioned to capture these tailwinds as this sector becomes a more substantial component of total construction spend. For example, our largest international Q4 deal at seven figures annually was a big up-and-coming hyperscaler in the U.K. data center market.

This customer selected Procore Technologies, Inc. in Q4 to establish a single source of truth and ensure consistency across the global projects, and within weeks, they expanded construction volume to meet accelerated data center deadlines. Moving beyond data centers, we also added new owner customers including the Central Ohio Transit Authority and one of Canada's largest real estate developers. We also expanded with existing owner customers such as a globally recognized online retailer and a leading semiconductor manufacturer.

Operator: I would now like to move

Ajay Gopal: to a discussion of strategy. There are rare moments in history when a technological shift accelerates industry-wide adoption. At Procore Technologies, Inc., we last saw this with the ubiquity of broadband and the rise of mobile devices. This was a major catalyst for our business, as Procore Technologies, Inc. was initially built to bring efficiency and collaboration to the job site, unlocking value for the people with mud on their boots. We believe AI stands to be an even more meaningful catalyst than any that we have seen before. Procore Technologies, Inc.'s category leadership position did not arrive overnight.

We started as a system of record for the built world, and we have evolved into a system of collaboration as we hit scale across the globe. Over time, we earned the right to turn trusted dynamic data into action. Today, Procore Technologies, Inc. is a digital window into the built world. We are where physical assets and activities are digitized, and where actions are taken to change the physical world. This journey is what makes our move into agentic AI feel inevitable rather than opportunistic, and our recent tuck-in acquisition of Datagrid leverages this leadership position to accelerate our AI strategy.

We believe that the combination of Procore Helix and Datagrid will generate notable product synergies due to our highly complementary capabilities and road maps, bringing premier advanced reasoning and broad third-party integration capabilities into Procore Technologies, Inc. We call this combined offering Procore AI. To demonstrate the potential of Procore AI, I would like to share a recent example from a superintendent at a joint Procore and Datagrid enterprise GC customer that showcases our most recent advanced reasoning capabilities. Like most superintendents, their day consists of walking the job site and taking videos to share with off-site stakeholders. On this particular walk, they noticed a potential issue with the structural column.

They took a video and sent the footage to our AI agent with a simple prompt, “Identify the issues here.” Using advanced reasoning, our agent did not just watch the video; it understood it. By simultaneously analyzing the audio and video cues, the agent identified the exact column and utilized reasoning to know where to go in Procore Technologies, Inc. to pull the drawings, specifications, and documents related to that column. The agent concluded that the column had been incorrectly coated, determined the required rework, automatically created the work order, and notified the relevant stakeholders. The agent also triggered related downstream workflows in Procore Technologies, Inc., halting further work in that area and scheduling the rework.

Historically, these tasks would have demanded several hours of manual effort and individual expertise to navigate

Operator: across

Ajay Gopal: project specifications. This is not just a hypothetical possibility. This is a real-world example of Procore AI turning a standard job site walkthrough into an autonomous resolution. This illustrates the true power of Procore AI's construction-aware multimodal reasoning. This scenario occurs thousands of times across the job site. This is true special-purpose AI built for construction. It has the domain expertise, understands the context, the access to search records, and the authority to trigger actions. And it was built for project teams out in the field, delivered through the tool they use every day. This seamless integration of intelligence and utility is a direct result of four foundational points that will enable us to lead in the AI era.

First, as construction's mission-critical system of record, with nearly 3,000,000 active users, Procore Technologies, Inc. has a massive proprietary dynamic data set. And the value is not only in the volume of data; it is in the depth of its context. We map the complex, dynamic interactions between people, workflows, and the physical job site, capturing and continuously updating every document, annotation, and day-to-day change. This dynamic relevance is exactly what is needed to power high-stakes, agentic AI. My second point is trust, a fundamental prerequisite for AI adoption. It is crucial that construction stakeholders trust how the technology provider will use their data.

And that is why we have built a scalable enterprise-grade infrastructure to ensure that every AI action is secure, compliant, and contextually relevant. It is only through this combination of contextual data and trust that a platform can provide the industry with needed productivity gains. The third point

Operator: is our network effect.

Ajay Gopal: For AI to automate and complete tasks, it must work where the users work. On a typical project, a customer often connects with dozens of different companies, all collaborating on the platform every day to get their jobs done. Procore Technologies, Inc. serves as the central hub everyone in construction comes to connect and collaborate, making the platform not just a system of record, but a true system of collaboration, accelerating the flywheel of our network effect. The fourth point is Procore agentic solutions perform critical actions, not just provide insights.

As the critical orchestration layer for every stakeholder in construction, we believe our platform is capable of delivering a true digital coworker to help construction workers get more done with less. This is paramount for an industry facing chronic labor shortages of nearly 350,000 workers in the U.S. alone, according to Associated Builders and Contractors. Today, Procore Technologies, Inc. delivers agentic AI directly to the crews in the field, as well as to the teams in the office, embedding intelligence directly into the natural workflow. By supporting each of our nearly 3,000,000 active users with digital coworkers, we can provide a scalable solution to the industry's labor shortage. Multi-Procore customer Haskell is already benefiting from digital coworkers.

By deploying Procore AI on a single project, their initial ROI was immediate, saving superintendents hours per day on mundane tasks. Within just six months, they went from zero AI usage to expanding to several projects with the intent to deploy across their portfolio. Their productivity gains were so impactful that Haskell is now looking to empower everyone on their construction teams with digital coworkers from Procore Technologies, Inc. One way to conceptualize the value of these productivity gains can be seen in comparison to the cost of labor, which is significant within construction. For every dollar of construction volume, a contractor spends a material portion on labor.

With digital coworkers from Procore Technologies, Inc., we believe customers will materially increase their output without corresponding labor growth, leading to meaningful savings. Capturing just a small fraction of that ROI represents an incremental market opportunity for Procore Technologies, Inc., expanding beyond our traditional solutions. The economic value of our traditional solutions is supported by our construction volume-based pricing model. Because we price on project scale rather than seat count, our traditional revenue remains insulated from headcount fluctuations as AI drives industry efficiency. There is a profound sense of magic when software stops being a tool you manage and starts becoming an expert that manages the project for you, anticipating hurdles and clearing them in the background.

The benefits of Procore AI extend far beyond efficiency gains. By reclaiming thousands of labor hours, we are freeing up valuable resources for our customers to deploy on more projects. Procore Technologies, Inc.'s path forward is defined by a powerful economic duality of upside opportunity and downside protection. We will monetize the value and ROI of Procore AI agents even as our volume-based model provides a structural economic foundation for our core business. I believe Procore Technologies, Inc. will unlock unprecedented value as a definitive winner in the agentic AI era.

Operator: In summary,

Ajay Gopal: Q4 was another excellent quarter and closed out a strong year for Procore Technologies, Inc. My first quarter as CEO exceeded my expectations, and while there is a lot of work ahead, I am incredibly excited about the future of Procore Technologies, Inc. Procore Technologies, Inc. is a rare company. We have scaled past $1,000,000,000 in revenue, defined an entire category, delivered a best-in-class platform, and established a deeply loyal customer base. What Procore Technologies, Inc. has built is truly impressive, and this is just the beginning. I joined because I believe our brightest days are ahead of us. We are well positioned for durable growth and margin expansion.

As we continue to innovate for our customers and execute towards our goals, I am confident in our ability to deliver substantial shareholder value. Before I turn the call over to Howard, I want to thank all of the Procore Technologies, Inc. employees. None of the opportunities Procore Technologies, Inc. has would be possible without the incredible culture you have built over the years. Thank you for making me feel welcomed, and thank you for your commitment to our customers and to our company.

Operator: Howard,

Howard Fu: Thanks, Ajay. Thank you to everyone for joining us. The main topics I would like to cover today include our Q4 and full year financial results, additional color on the business, and our outlook for fiscal 2026. Total revenue in Q4 was $349,000,000, up 15.6% year over year. Our Q4 international revenue grew 14% year over year and was impacted by currency headwinds. On a constant currency basis, international revenue grew 15% year over year.

Operator: Q4 non-GAAP operating income was $52,000,000

Howard Fu: representing a non-GAAP operating margin of 15%. As for our key backlog metrics, current RPO grew 22% year over year, and current deferred revenue grew 18% year over year. As you heard from Ajay, Q4 was an exceptional quarter to round out a strong year. Let me share some additional color on our performance. Beginning with the top line, our strength in the quarter came from robust execution across multiple areas of the business. We are seeing broad-based momentum upmarket, higher pipeline conversion, and improving renewal and churn rates, which we attribute to our go-to-market operating model. Our strength upmarket is reflected in the number of $100,000+ ARR customers, which grew 20% year over year.

The total number of $100,000+ ARR customers, on top of a very strong performance last Q4, now totals more than 2,700. Within our strength upmarket, we ended the year with 115 customers spending more than $1,000,000 in ARR with Procore Technologies, Inc. This represents 34% year-over-year growth, further demonstrating our ability to scale to the largest customers around the world. We also continue to see strong momentum with Procore Pay, ending the year with nearly 450 customers, representing more than 70% year-over-year growth.

As we have been messaging throughout 2025, we believe the number of $100,000+ ARR customers is the best representation of our business performance and our revenue growth, as it represents the vast majority of our customer base at 66% of total ARR. In contrast, our total customer count growth is heavily impacted by our SMB customers and, therefore, is not reflective of our underlying business performance. As such, and in line with our commentary to investors over the past year, this will be the final earnings we will be disclosing total customer count. However, we will continue to disclose the $100,000+ ARR customer count on a quarterly basis. Our strength in the quarter also contributed to the strength in CRPO.

This metric continues to benefit primarily from longer average contract duration. When normalizing CRPO for this dynamic, the year-over-year growth is consistent with both Q4 revenue growth and ending ARR growth. Once contract duration stabilizes, reported and normalized CRPO growth will eventually converge with revenue growth. With respect to margins, we delivered 400 basis points of margin improvement for the year, all while investing in our go-to-market operating model and our platform. While our margin improvement may not be linear within the year,

Howard Fu: we will continue to deliver incremental margin expansion on an annual basis, which is also reflected in our fiscal 2026 guide. Now let us turn to our North Star metric: free cash flow per share. We delivered our strongest free cash flow quarter in history, generating $90,000,000 in the quarter, bringing full year free cash flow to $215,000,000, representing 69% year-over-year growth and a 16% free cash flow margin. This result reflects our strong bookings, translated into higher billings and collections, as well as continued margin expansion. We are also focused on limiting our share count dilution rate. Our weighted average diluted share count grew less than 1% in Q4, which reflects our continued discipline on equity compensation.

We believe our share count growth is a leading indicator of SBC leverage over the long term. SBC, which is a lagging indicator, can be impacted by accounting rules that have no impact on dilution. Our Q4 results were an example of this, with SBC increasing to 23% of revenue, driven by a one-time charge of unvested equity related to the transition of our former CEO. This charge only impacted the P&L and was not an acceleration of equity compensation payout. Excluding this one-time charge, SBC would have been 6.6% of revenue, which is in line with Q3.

Our Q4 and full year results demonstrate that we remain focused on delivering durable growth, margin expansion, and modest share count growth in order to compound free cash flow per share. And our strong results and momentum were all achieved before any material top line benefits from AI that we expect to realize in the future. Looking back on the year, I am proud we delivered on the commitments we made for fiscal 2025, particularly while facing ongoing headwinds from a challenging construction environment. Our go-to-market motion is yielding tangible and more consistent results characterized by improved sales productivity and a noticeable shift towards larger enterprise-wide relationships.

This motion, combined with the compelling ROI of our platform, has not only solidified our category leadership, but has also created a more durable business. And more importantly, we have achieved this while remaining laser focused on our North Star metric: free cash flow per share. With that, let us move on to our outlook. For Q1 2026, we expect revenue between $351,000,000 and $353,000,000, representing year-over-year growth of 13% to 14%. Q1 non-GAAP operating margin is expected to be between 14%–15%. For the full year fiscal 2026, we expect revenue between $1,489,000,000 and $1,494,000,000, representing total year-over-year growth of 13%.

We expect our non-GAAP operating margin guidance for the year to be between 17.5%–18%, which implies year-over-year margin expansion between 340 and 390 basis points. Additionally, to closer align our guided metrics to free cash flow per share, we are now formally guiding free cash flow margin on an annual basis. We expect free cash flow margin for the year to be 19%, which implies year-over-year margin expansion of 270 basis points.

Operator: To wrap up,

Howard Fu: we are pleased with how we ended the year and the momentum we have across multiple aspects of the business, and we are confident that we can deliver on our promise of a stronger P&L in fiscal 2026. We expect our category leadership, strong execution, and AI capabilities to drive shareholder value in the years ahead.

Ajay Gopal: With that,

Howard Fu: let us turn it over to the operator for Q&A.

Alexandra Geller: Thank you. We will now begin the question and answer session. If for any reason at all you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one. The first question comes from Saket Kalia with Barclays. You may proceed.

Howard Fu: Okay. Great. Hey, Ajay. Hey, Howard. Thanks for taking my questions here. A nice finish to the year.

Ajay Gopal: Hey, Saket. How are you? Thanks, Saket.

Operator: Good. Hey, guys.

Howard Fu: Ajay, maybe to start with you. I appreciated your prepared remarks, particularly around AI. But I was wondering if we could just dig a little deeper on what your customer conversations have been like on the topic of AI. And maybe specifically, do you see customers trying to maybe build Procore-like tools themselves someday?

Ajay Gopal: So, Saket, the example that I gave you in the script, frankly, that gave me goosebumps. And I hope it gave you goosebumps as well because it is so compelling. It shows how different the construction use case is from the general horizontal office application or the commercial use case, a general consumer use case of AI. And that is why this laser focus that we have had on construction is so important to our customers. So to your point, thinking about it from a customer perspective, our customers neither have the time nor the inclination to become AI experts. They are in the business of construction, and they just want to build better. And that is their business.

And they want to make sure, though, that their tech vendor is taking advantage of the best and the latest technologies including, of course, AI. And that is conversations that I have with my customers. And I am excited that we have the structural advantages and that we have also taken the operational actions to emerge as an AI winner. Now as far as Procore AI is concerned, we are seeing clear customer adoption. So we have something like 66,000 unique active users who are using Procore AI. We have got something like 700 customers nearly who have created thousands of agents on Procore Technologies, Inc. And these customers skew upmarket.

And, obviously, we expect this momentum to continue to increase with the breadth and the depth of the capabilities that we have now that we have concluded the Datagrid acquisition. And at the risk of repeating some of the comments from the script, I think it is important to recognize that we rode the wave when mobile became mobile and broadband became ubiquitous. We rode that wave to deliver digitization to the construction industry. And we were able to bring technology to frontline workers in a manner that was appropriate to how they work and where they work.

And, obviously, we both have a tremendous amount of trust with the industry at that time, and we have the same opportunity for AI today. If you think about what I discussed, there is sort of structural and operational aspects, so let me just talk a little bit about the structural. Our solutions are at the interface between the physical and the digital world. We are the ones who are digitizing activities, and we are the ones where action is taking place to affect the physical world. And as I mentioned in my script, we are the system of record. We have got 3,000,000 users.

But as a system of record, we have this dynamic record of decisions that have taken place across thousands and thousands of projects. But it is not just the data. It is the relationship between the data elements. It is the annotations, how things have changed, the decisions. All of that is contained within the system of record. But not just being the system of record. It is the fact that we are now also a system of collaboration because we have this network effect where we have become a central hub for project stakeholders to connect and to be able to work together.

I also pointed out that we are providing insights, and, of course, we are also taking insights a step further. We are providing actions, and those actions are enabling our customers to be successful, but those actions take place in the context of trust because we have built a scalable enterprise-grade infrastructure to ensure every AI action is secure, compliant, and relevant. We are very excited about our structural advantages. As I talk to customers, they see this. And, obviously, the actions that we have taken, the investments that we have made mean we recognize the importance of AI. We have mobilized our company behind the opportunity, and we are applying significant resources.

You saw this at Groundbreak where AI was everywhere. We took you and our customers through our AI strategy. And then, of course, we have acquired Datagrid since then as you know. And with respect to Datagrid, we have known the team for some time. Those guys are AI experts. They are construction tech experts. They are excited about the use of AI in construction, and they are going to be part of the Procore Technologies, Inc. team. And we anticipate a great integration with those capabilities. So I am really excited about what we do. We see this as an upside opportunity as we think about the value that we are able to provide to our customers.

And the overall technology, as you saw from the example, is pretty amazing.

Operator: That is great. That is great perspective, Ajay. Howard, maybe for my follow-up for you, we have talked about the impact of pooled contracts on CRPO, and appreciate you talking about the normalized growth there. Just maybe looking forward, can you just maybe talk about the glide path for that metric in 2026? As we think about when that duration benefit maybe starts to normalize. Does that make sense?

Howard Fu: It does. Thanks, Saket. And, of course, first and foremost, Q4 CRPO growth includes the impact from a very strong Q4 bookings quarter. That is first and foremost what is showing up in Q4. And remember that reflects consistent and strong execution on the top line five quarters in a row. If you go back to fiscal 2024 Q4. Secondly, when you think about Q4, we also saw another uptick in contract duration. And that continues to increase; it continues to impact CRPO growth. Normalizing for the contract duration growth, normalized CRPO growth is in line and consistent with Q4 revenue growth and also ending ARR growth in Q4. So that is the first couple of things.

When we think about that glide path, if the contract duration is stable, then what will happen is the CRPO growth will eventually normalize with revenue growth. And if it stays stable throughout fiscal 2026, that will likely occur towards the latter part of the year. So that is what you can expect in terms of timing. But the last thing that I will say is remember, a lengthening contract duration is actually a reflection of the confidence that our customers continue to have extending their relationship and partnership with Procore Technologies, Inc. And that is a very positive outcome that we continue to see.

Alexandra Geller: Very helpful.

Operator: Thanks, guys.

Alexandra Geller: Thank you. The next question comes from Adam Borg with Stifel. You may proceed.

Ajay Gopal: Awesome. Thanks so much for taking the question, and great to speak with you, Ajay. Maybe just going back to the script for a minute, you talked about a nice win-back.

Howard Fu: And so now that you have been in the seat, I would love to hear more about maybe what surprised you either to the upside or even the downside just on the competitive landscape and, importantly, Procore Technologies, Inc.'s position competitively.

Ajay Gopal: Well, I mean, look. I think that the conversations I have had with customers I think, is most reflective of the relationship that we have with our customers. The conversations I have had have been incredibly positive.

Operator: And I think I shared this

Ajay Gopal: one example I think of a story with one of my customers at our last call in December. But I was in a meeting with a large GC in Manhattan, and one of the senior executives was not in the meeting and had recently been promoted. He walked into the meeting, and he said, “Listen. I wanted to take this opportunity to be with you. Because we started working with Procore Technologies, Inc. over a decade ago, we made a bet on Procore Technologies, Inc. It was a very big bet.

And Procore Technologies, Inc. came through, and you have really helped drive our industry forward and drive our business forward.” And that is an example of the kind of conversations that I am having with customers. So it is really those conversations, I think, that make me feel really excited about the depth of the customer relationships. I see lots of opportunities. I am incredibly optimistic about our technology, about our platform, especially, of course, in the work that we are doing with AI that comes up oftentimes in conversations with customers.

And I am looking forward as we continue here to maintaining traction with our stakeholders and, of course, continue to build with owners and subs as well as international. It is really quite an exceptional company in terms of the capabilities and the customer relationships. And from a relationship perspective, you see that being reflected in the way in which we are able to interact with customers.

Operator: Hey, Adam. If I just may, this is Howard. I just want to

Howard Fu: address your question regarding competitive. We still continue to see very strong competitive win rates, similar to what we disclosed back in 2024. And I think what you are seeing in the two examples that were in the prepared remarks, one was actually a displacement of an incumbent and the other one was a win-back. I think those are emblematic of our continued strength in terms of our win rates. And we still held a very strong position versus our competitors out there. That is great to hear. And maybe just as a quick follow-up, you know, to Ajay's point about international and great to see the continued go-to-market changes taking hold.

As you think about kind of these go-to-market changes continuing and, Ajay, now that you have had a little bit more time to see, as you think about the

Dylan Becker: international footprint, what gets you most excited about that opportunity? And any thoughts on how a channel could help build the feet on the street, so to speak, in coming years? Thank you so much.

Ajay Gopal: Yeah. I mean, I think, obviously, I have been in seat for about a quarter, but everything that you point to in terms of channel, in terms of international, all of these things are opportunities that we are continuing to look at and evaluate. From my perspective, my experience obviously has been with businesses which have had significant channel presence, and that is obviously an opportunity for us, as well as significant international presence. So that is something that I continue to look at as we look at future evolution of our business.

Howard Fu: Hey, Adam. This is Howard again. I will just tell you. We would have liked to have been further along on the international side in terms of top line. International is still facing the same types of macroeconomic challenges that are impacting the progress there. But having said that, the model that we put in place, we still believe is the absolute right model. We are seeing good results internationally as well as domestically in terms of that model being put in place. With respect to folks like the technical specialists, we continue to see progress. We believe in the opportunities. We have product-market fit and continue to build towards more product-market fit.

So longer term it is still absolutely an opportunity for us. And so we are excited about it. We would like to be further along. It is something that we think over the long term will still continue to contribute to our growth.

Dylan Becker: Really appreciate the color, gentlemen.

Operator: Thank you.

Alexandra Geller: The following comes from DJ Hines with Canaccord. You may proceed.

Dylan Becker: Hey. Thank you, guys, and congrats.

Operator: A nice quarter. I am going to go reverse order and start with you, Howard. I am curious what you saw in terms of trends of volume commitments during the Q4 renewal cycle. And maybe you could compare that to how it was a year ago, and I do not know if as part of that, what kind of price you are taking on like-for-like renewals. Any color there would be helpful.

Howard Fu: In general, we are not going to disclose a specific number. But last quarter, we talked about ACV commitments on the platform crossing a trillion dollars, and that continues to grow in Q4. So we continue to see strength there. And that also exemplifies and is evidence that we continue to gain share as well. And so it has grown off of that trillion-dollar mark.

Dylan Becker: Okay.

Ajay Gopal: And then, Ajay, maybe we could go a little bit

Operator: deeper on Datagrid. I am curious where the data that is not inside of Procore Technologies, Inc. resides where Datagrid will help you? Is it in other

Ajay Gopal: construction point solutions? Is it in other

Howard Fu: systems of record? What is that data that

Operator: needs to come into the system that will help

Howard Fu: power your AI efforts?

Ajay Gopal: Well, I think it is important to understand what our architectural construct is as we put together the whole solution. As we announced at Groundbreak, our strategy as the baseline is to have essentially well-thought-through APIs, which are appropriate for agentic workflows, to have a platform for agentic applications and agentic AI solutions, then to build out AI agents themselves. So it is a three-layered structure: API, a platform. And the platform includes the ability to do things like advanced reasoning, multimodal reasoning that is construction-aware, as well as, of course, to be able to monetize activity. So that is those three layers.

Operator: We

Ajay Gopal: announced our strategy, and, obviously, we were building towards that. We saw with Datagrid the opportunity to be able to accelerate that growth because they had focused a lot on areas that we had not focused, and we had a complementary way of approaching the market. Now they have, between us, connectors into a large number, I think, of third-party systems, including ERP systems and others, that allow us to collect information and bring it together. What is really important as far as data is concerned, when you think about the volume of our data, we have got something like 3,000,000 active users in our system.

We have got all kinds of information in our system, including what is really important: things like annotations and changes, which are unique data elements, as well as the dynamic view of how that data has changed. So there are a lot of resources that we have been in a position to bring to bear in terms of the information that is within Procore Technologies, Inc., the ability to be able to orchestrate activities, and how Datagrid has essentially accelerated the strategy that we had in place, bringing some really interesting reasoning capabilities as well as some interesting connectivity capabilities that they had built into the overall Procore AI story.

Operator: Got it. Okay. Thank you, guys.

Ajay Gopal: Thanks, DJ.

Alexandra Geller: Thank you. As a quick note, please limit yourself to one question only. Moving forward, the next question comes from Matthew Martino with Goldman Sachs. Please proceed.

Ajay Gopal: Yes. Hey, thanks for taking my questions, guys. Ajay, maybe sticking with Procore AI for a moment. Can you elaborate on the specific monetization strategy for this?

Howard Fu: Should investors expect a new premium SKU, some sort of platform-wide price uplift, or consumption model tied to the ROI that you intend to generate for your customers here? And if I could just slip in a quick one for you, Howard. You know, what looks like headcount grew about 5% total for the year even with the go-to-market changes. Looking forward, Procore Technologies, Inc. is guiding to around 400 basis points of margin expansion. Do you feel that the business is sufficiently resourced from a go-to-market

Matthew Martino: perspective, especially if we were to see the construction cycle turn over the next several quarters? Thank you both.

Ajay Gopal: So let me just answer your question about monetization of AI, and then turn it over to Howard. Look, as with any business and new business opportunity, the first thing you have to do is to establish a compelling ROI. And we believe that we are doing that. We know that we are doing that. Our customers are seeing benefit and value from the technology as I described in the example where they are saving time and are able to do things that they would not have otherwise been able to do, given the shortage of labor and given the limited amount of hours in the day that they have.

And so the first thing you have to do is to make manifest that ROI. And, obviously, from our perspective,

Dylan Becker: the

Ajay Gopal: labor cost element that our customers are facing, that is one of the significant and most important line items for our customers. And having digital coworkers do the work, we think, generates that significant ROI. And even if we can monetize a small fraction of that, we have a significant and incremental upside opportunity that we believe will drive upside to our business at the same time that we support our customers. And we are likely to be including some of those AI offerings within upcoming bundles that are part of some new packaging. We are also likely to be including some consumption-based components.

Now this is relatively new to the market, so we are likely to experiment, and we are likely to evolve our approach. But, look, I am excited about our path forward. I am excited about our ability to monetize AI. We will be sure to keep you posted as we proceed.

Howard Fu: Hey, Matt. This is Howard. Let me just answer your question around capacity and leverage and so forth. So the first thing is, the short answer is yes. We have enough capacity. We have planned for enough capacity going into fiscal 2026 to be able to sufficiently invest in the business. Let me go through a couple more details here. One is remember what we talked about from the go-to-market perspective. Fiscal 2025 was an investment year. We are going into fiscal 2026 with largely the capacity that we already need on the go-to-market side, and then the focus is really productivity increases. And so that is the first thing.

With respect to the places where we are adding more resources and more headcount, it is largely focused on the R&D side of things, and those are largely going to be added in lower-cost geos for the most part. And in addition to that, we continue to see leverage across all parts of the OpEx lines, as we did last year and as we are doing this year and as we will do continuing going forward. And also keep in mind, although we are using AI internally and that is having a benefit, a lot of those improvements that we have done last year and this year are largely just getting better at the foundational ways that we operate.

And as we think about leverage going forward and the resources that we need, the AI piece is actually going to be an additional tailwind to our ability to find scale and leverage in the business going forward.

Alexandra Geller: Thank you. Next question comes from Ken Wong with Oppenheimer. Please proceed.

Dylan Becker: Fantastic. Howard, I wanted to ask about the guidance. Previously, you guys had this growth-profit dynamic where it was somewhat inversely correlated.

Howard Fu: Should we think about elevated margins coming at a lower growth rate, or is that no longer the case? And then any philosophical changes in terms of incremental conservatism as you embed some of Ajay’s learnings

Operator: over the coming quarters.

Howard Fu: Hey, Ken. So the first thing is there is no change to our guidance philosophy. You can expect the same type of cadence that we did in fiscal 2025 for what we are going to do in fiscal 2026. The first question I want to make sure I address though: we have talked about this before. It is not really a trade-off between top line versus bottom line. What we optimize for is still our North Star metric around free cash flow per share, and that is what we are going to optimize for—both the numerator and the denominator of that equation—so that we provide the best return to our shareholders.

Dylan Becker: Perfect. Thank you so much.

Alexandra Geller: Sure. Thank you. The next question comes from Dylan Becker with William Blair. You may proceed.

Dylan Becker: Hey, gentlemen. I appreciate it.

Howard Fu: Maybe, Ajay, for you, stepping back. If we double-click on the

Operator: owner segments, maybe it ties into the enterprise momentum and some of the larger players being more insulated here. But can you give us a sense on what you are hearing from those owners as it pertains to CapEx deployment in 2026? Maybe the network dynamics of their opportunity to mandate Procore Technologies, Inc. throughout the platform? And maybe, if anything, where FedRAMP—and I know you have a good data center business

Matthew Martino: as well here—but what that can unlock incrementally as more dollars are allocated to that channel. Thank you.

Ajay Gopal: So from an owners perspective, one of the nice things about the owners segment, as I said, is that the owners represent customers from multiple verticals. And, obviously, I talked about data center deployments where there is a massive amount of increase in expenses as people start to build out data centers. So you see incremental spending in certain areas. But because it is owners—essentially any enterprise customer is an owner—you see the natural fluctuations of those end markets being reflected in the way owners think about their own real estate investments.

Operator: So but our value proposition to owners goes beyond

Ajay Gopal: the value proposition that we have to general contractors. As I said, our value proposition to owners is around portfolio management. It is about being able to manage the complexity of all of the activities that they have going, potentially working across multiple GCs and multiple locations. And you are absolutely right. The network effect that I talked about earlier is a really important aspect of our business. I mentioned that in the context of AI, but it is certainly very important in the broader context of owners mandating a particular solution, resulting in the GC taking advantage of that, resulting in the subs taking advantage of that solution. And we have been seeing that essentially since we began

Operator: as a company. So that allows us to

Ajay Gopal: create this deep well of users who are tied to Procore Technologies, Inc. in a much more intimate way than perhaps other solutions might have. The other thing—you mentioned FedRAMP. FedRAMP represents for us, obviously, the federal government represents an incremental opportunity as we start to look out. The fact that we have FedRAMP certification allows us to support opportunities that we were not able to before we achieved that certification. Thank you.

Alexandra Geller: The final question comes from Jason Celino with KeyBanc.

Operator: Hey, great. Thanks for fitting me in. Maybe just for Howard, if I adjust for the duration, it looks like you have had the biggest bookings quarter ever, so big congratulations there. I just wanted to ask if there were any deals that might have been closed earlier than you would have anticipated. Then when we think about that normalized CRPO, if it is consistent with revenue growth, would that suggest that it did uptick versus the prior quarter as well? Thank you.

Howard Fu: So first of all, yes, Q4 was a fantastic quarter, and it was the biggest quarter that we had from a bookings perspective. So the answer is yes there. And in terms of where that came from, it actually did not come from any one specific deal or even a couple of deals. The strength was actually more broad-based across both large deals as well as the broader commercial segment. And what we saw was really the engine starting to really gain momentum, building again on four quarters of really strong and consistent execution. And so that gives us tremendous amount of confidence and momentum going into fiscal 2026.

In terms of normalized CRPO, the only thing that we will continue to tell you is it is still consistent with Q4 revenue growth and ending ARR growth. I think that gives plenty of information about where we expect things to go in the near term.

Matthew Martino: Thank you.

Alexandra Geller: This concludes today's conference call. Thank you for your participation. You may now disconnect your line.

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