Procore (PCOR) 1 Nov 232023 Q3 Earnings call transcript

Hello, everyone. Thank you for [Audio Gap]. I will be your moderator today. [Operator Instructions] I would now like to pass the conference over to our host, Matthew Puljiz with Procore. Please proceed.

Thanks. to Third welcome Earnings and afternoon, Procore's Quarter XXXX Call. Good Finance. Matthew Puljiz, am VP I of With Toby today Fu, me are CFO. and and Howard CEO; Courtemanche, Founder, President release be Further Investor the of in results of section which can website. disclosure our available our Relations press issued our on today, is found the reports our periodic SEC. and filed with is call conclusion a the call. and of be will Today's replay recorded, being the available following geopolitical regarding operations on made this and Comments and financial demand, products, customer include statements call results, our forward-looking macroeconomic conditions. may

not are uncertainties should on forward-looking and predictions views forward-looking of future as XXXX. You X, and based rely statements subject as on events. are November of management's expectations All and statements current risks, today, to assumptions

as or call accurate unanticipated If the except by representing no not should law. replayed financial presented the contain provide statements these investors. release. to additional required is is certain current events, undertakes non-GAAP GAAP provided information press or also information. to forward-looking obligation A measures measures statements views be information subsequent our in Procore as non-GAAP to to this viewed any may not during to upon as information date. Therefore, We'll update of refer after reconciliation or call today, our of relied any to new reflect

And hand to it let with me that, Tooey.

Thanks, Matt, and thank you, everyone, today. for joining us

journey. our growth breadth platform as our efficient depth well of we great quarter, and expand make progress to This on the continue as

of grew by year-over-year quarter. demand the a surpassed in While revenue I QX few proved to start we the customers quarter by and In increasingly a be sharing XX% QX, end XX,XXX quarter. environment, an the challenging think to amidst difficult highlights

our industry returning our quarter, on operating in recognized. efficiency continues the improvements partnership non-GAAP this to be made We profile, profitability to and

top reports in We our to software software companies ranked #X on XXXX, highest the ranking XXX date. are

tech Cares the XXXX company third award for award rewarded for we innovative received year most International are year XXXX Business in Stevie row. the a Tech And the Annual the in TrustRadius the We in Awards.

innovation, on In technology I partnership way we to of with with Procore build These we people results construction Groundbreak, Connectability. industry. and hosted and highlight our transforms product a conference, the exciting delivering a number that announcements, September, showed focus want few now. our reflect our annual user where continued the Starting

drawings, We are beginning introducing commonly as platform-level functionality blueprints. is with known which

own major our across contractors Connectability be to and project on efforts It general when through All all share connected able account. efficiencies a and means the and Procor is to that automatically deepen will drawings, platform. another, milestone will pushed data strategy. updates updates X workflows specialty project contractor platform their people, to a the data those accounts. stakeholders collaborate while made entry, be seeing thereby on with driving connection This our further within elevated in is only reduces our possible all the the

benefit But to even some of shared generative existing learning are the real construction issues we of and anticipate our capabilities on technology. I further this powerful. to why better power them. more resolve positioned is help the Data Last and to can just AI connecting AI not platform becomes leverage quarter, but data that technologies customers machine that our our generated everyone's well

Copilot, Procore platform. Procore bringing of conversational the introduction and truly the with predictive to Now experience we'll be a

real conflicts, project data, dealing Copilot XX% automating looking of resolving suggesting team, an information Procore processes, and professionals spend an next project best serves as the their time for mistakes and we're actions. in with time-consuming essentially surfacing rework. estimated time Construction extension of

biggest Pay, for person also which the protective returning Groundbreak, of more the to Innovations many in launch we free pain like construction, Procore announced inefficiencies these per potentially Copilot getting hours of paid. At the points reduce and greatly week Procore time per can industry. tackles activities X up

As all necessarily we've upstream but the from not moving the workflows the complicated challenges of from about money first. in must talked of come the real and stem past, processes that

today. giving flow. Procore of processes the The labor and and of beauty complicated the process paperwork entire these in automates payments and their full last platform We payments mile thereby it customers seamlessly transparency Procore of essentially All as between contractors, lean into general payments Pay now the exist the workflow. minimizing specialty facilitate contractors ultimately our

information Additionally, of mapping announced leader recently for we acquisition a Unearth, construction. geospatial our in

a that's civil are projects of particular, all These going acquisition [ that types ]. and better horizontal infrastructure small support to projects in tuck-in allow nature. be us back infrastructure platform. on This in horizontal is construction But to our can

delays a So wide budget incredibly and an the location and expanse that often of which easily covers airport challenging stretches Every could think an a miles of identifiable materials, projects These project's or reference that impact performance. risk of minute make the land. of points, highway spent can and negatively lack the increase many teams determining advantage. equipment

most adding these location locations. The is importance the context put of from latest is to of connect master it love I with [indiscernible], vision and us getting Unearth globe. is on construction cannot be dimension of new customers data to Procore's around Simply the Procore resonating. that many overstated. bringing a some clear leaders automate, the allows geo projects industry. industry to acquisition the put, Overall, construction to But is getting share Procore for intelligence in what's so the valuable innovations me, to

conversations have especially these of forward and platform I to represent size, recognize is small typically a industry's the yet with customers, tech that most value The businesses. as a ways positive, maximize our connected efficiencies groundbreakers they Our find sample seek and for is been majority in environment. productive Groundbreak productivity which driving my dynamic

challenging. highly massive demand not has a construction and economic clear scale, scale On industry reserve to more broader is is it while The broader that the become and diversified incrementally immune environment conditions.

purchasing external response uncertainty customers around increased translated a have downturn, heightened in scrutiny to to cautiousness see potential has which We continued decisions. and from to

dynamic how continue expand in plan tougher and improving we demand efficiency growing this this to environment. our However, on we'll while

conviction the Cohort these While the anticipate things a think will the us, opportunity few has and remain we do in long-term my of I not headwinds continue for constant. What term, ahead now about opportunity changed. near in

First, these cycles. have we the and must continue around to us; sectors; massive that work navigated industry and a critical second, build serving are for diverse multiple of customers operating world of array a been third, economic across many decades customers successfully have our

their The These to experienced to the deflationary chance In acceleration. technology the way, keyword invest their is capture next cycles this they like and with in further and Many do businesses times streamline in to could cycles. a a this and be see less. so accelerate customers ready these have time. markets operations that they decelerate has over expect here invest more lever, are to

industry [indiscernible], In customer, working construction fact, to I has in and friend recently the John who over years. spoke been our my XX for good

opportunity efficient and add When Seals, at following workflows opportunity did, great the we training actually ready the for building. for technology will an He's over the sustain Procore we're and X product illustrates we're our it's X know multiple demand Navy dip portfolio not inevitable that and tempered Construction up or [indiscernible]. but who market full years. Dinwiddie, ourselves us how U.S., growth to Navy oldest " retool, new use trajectory, me either and is we pick midst and evolution past you in to fighting, with of cyclical. our the advantage the COO Hathaway the We training, markets similar environment, are Similar of contractors it the have the levers upswing. has " This Seals, the expansion And train a back take of even training know or modes obviously in to a a thanks so to X more either share of up. to largest general the the we will

of So of just care, the I'd an example projects [indiscernible] is education, XXX building technology in that's and and top to doing long geo like a with new products. more. history manufacturing, customer an adopting contractor ENR health that, science share

embraced have platform a long-time Procore the needs. best-of-breed as customer, solution a their for As Procore business they

their Excel point well They lean waiver cards, previously industry as managed credit solution. another processes and banks, manually through payments as

use I'm improve process. quarter, in to platform they this every suite help our piece thrilled their for Pay consolidate as already this beta existing bringing grow and And day, business. critical the payments tools search entire centralize to continually to program. to their share that [indiscernible] Procore their of their will payment Procore our and participated and efficiency added in which why payments process, have We automate processes of they with that was the on solutions. Pay A they ways ties Procore is

substantial the [indiscernible] power. over business, that sector provide their scale. X.X master a contractor X but management scale general growth SummerTech projects of their still a gigawatts. productivity in current is solution utility the seen of European ground they're they in internationally operating They is manually. efficiency continue decided to and leaders project over and full-service projects as SummerTech can robust capacity solar or needed delivered XXX they with gains They've a utility managing

enabling United underground After leading evaluating any both electrical and the competitive than projects projects with integrating projects, the is specialty collaboration the as and Royal with the enhancing a running Procore and field best chose across office, given more fit future, across Western at the visibility XX time ERP SummerTech for point States. for system. the our in concurrently Electric Central throughout and solution, contractor

of multiple on their providing recognize efficiency systems in standardization onto audit and to platform. platform of competitive a process relied Procore a and we're single the tools, the They migrate tech operations. the value previously They full and across

help visible vast drive the across building They improve the in The the leader. scheduling Municipal greater to Royal their Procore Electric undoubtedly as of vitally and across and of the partnership apart Their are themselves goal improvement to we Airport is projects with between a California. an provide teams, truth for project projects, functions, the single management. source them selected field as of with set industry office will Procore labor leverage and majority Hollister beginning visibility communications including efficiencies

we meaningfully and summary, our improving capabilities operating to innovate while continue in So bolster platform leverage. our this quarter,

Looking to wavered. opportunity Procore has conviction long-term opportunity in and ahead, my excitement for not ability the on execute and our that

will continue environment that the while optimize delivering customers balancing to discipline our ensure best near and increasing the we to the for of long pressure Navigating the demand term. the outcomes with and focus value profitability. on thoughtfully We in growth

over to With to that, Howard. I'm going hand it

recap Thanks, everyone share with outlook. some I'll results, today. quarter the thank joining QX financial us on conclude to for and our and Tooey, Today, you our color

headwind of jump and impacted growth. were results basis, XX% by constant international let's revenue year-over-year, to in Total year-over-year year-over-year. a $XXX in. to international Similar headwinds. QX grew million, currency currency FX up X XX% year-over-year. revenue basis, a international international our grew prior contributed approximately QX on So points revenue Therefore, was XX% revenue quarters, On

exceeded from benefited approximately QX onetime materially over million revenue $X.X customers [indiscernible] their commitments. volume from in that

time this do dynamic materiality one-off and of XX% a current deferred time, million, a QX continue to can our rare an this anomaly margin unique respectively. materiality QX. and this from income While to consider to specifically single year-over-year, operating occur key backlog it's not level and revenue was X%, of level grew expect representing quarter. XX% $X RPO non-GAAP of Therefore, and metrics, we in have this to operating current

Now let color back QX some performance. step our and additional share me a take on

last construction last at First, activity QX, and this commitments. of dichotomy dichotomy same from customers greater QX strong QX. of slightly at more our volume the customers X as the customer share an greater call, demonstrated dichotomy to pronounced remain the behavior relative while share demonstrated observed the provide also to to how like update over In HX, quarters. renewal we norms. stabilized still though In improved on to described abiding We're this elevated became or earnings in historical cautiousness that we time, expansion I'd compared

proportion installed Specifically, renewing enterprise increase we base, the particularly stability the our for large customers driven an by greater flat in in saw of customers. signaling quarter,

to compared want Moving backlog deceleration metrics. this quarters prior in CRPO seen our acknowledge I year. the to as to

making QX reminder, it from quarter period. the ago deal attributed points XXXX, anticipated benefited year a large activity in close the of deal X a a year [indiscernible] difficult the of XXXX was to As X in sequential but of period. to CRPO in closed approximately [ that ] comparison QX instead growth, last large in was can strong that QX Out activity decline

However, quarter even our dynamic fell this into still taking short expectations. of when consideration, the

to cycles As to and on required described, more finalize become environment Tooey taking purchasing clearly sales approvals. decision-makers broadly, demand seeing More increasingly layers elongate. the we are has decisions difficult. longer involved causing Customers increased deals, are more of scrutiny with

approval get now approved used that board As requiring require deals are require the used may internal CFO champion approval. deals that example, to now CFO timely by approval an to and

conservatism and any impacted with indication is quarter. that dynamic we lower than to we expanding the not of This some deals close are that large have this this of during XXX previous with While customer QX, are continued, adds evidence overly renewal finding growth generally, sense new a customer new out business, more of particular customers is would environment new in among QX, concentrated the enterprises. more expected stable quarters. conversations net have of Similarly, in in which and success heightened the in seeing business. an facet slipped this is we also both In

remained loan pads. sequential in of at gross new revenue has as this rate was our increased despite XX% said, function the retention logo not healthy That a decline

the X industry, hand, is external given demonstrating cohort the of hesitation the a uncertainty. new market down make to particularly On purchases more

other continue is term this the aggregate, That we continue of On near customers into believe the in to also larger focus will Procore. investments upmarket are a as hand, expansion continue and opportunities, headwinds fiscal within is prioritize with their will particularly strength This assuming trend our customers. an these reflection in XXXX. that, we said, in a

Investor the what how remain to environment we framework to which outside years. for plan our over various manage demand conditions the control, we through financial few economic our While within focused is a efficiency shared next me control, our business profile. of At we recent on our brings the is Day,

in driver demand of noted to Specifically, that deterioration potential our the that us a that we move could is environment. left framework further

are revenue next framework left we intend the well the demand this far the in in over progressing into growth quarters. softening of the and more We even assuming anticipate to that fiscal the dilution. as persist we spend managing This be dynamic Given XXXX. seeing, are towards equity side we disciplined upcoming range means as will

that approach performance margin non-GAAP example of QX resulted as since Our our is quarter XXXX. profitable first an as in our incrementally-disciplined

ensure broader exercising in higher are in our and decisions own level Just a investment meaningful and like of level Tooey, the leadership purchasing myself of and ourselves customers a higher are our the decisions, displaying a [indiscernible] team ROI. scrutiny aligned to challenging

flow focus through capital committed compounding share are various on disciplined economic we all, stewards being Above to environments. of with a cash free per

to outlook. on our moving Now

guidance through current macroeconomic persist of Our the remainder assumes year. headwinds the

guidance have past a As reminder, the over we external the incremental taken for in to a prudent approach factor of market. weakness to quarters potential uncertainty the several in

perspective, have high to level set we weaker at can on guidance that a economic deliver even environment. a a continue very From revenue conviction we we in

we ever remain current incremental While on disappointed the by we operating in are top than the the line, leverage committed to more headwinds driving environment.

on we we As are with on can with reflection to efficiency, the conviction focus still deliver greater high visibility into intend we increased our margin achieve. guiding that but give conservatism to trajectory less margins a of operating shareholders

continue for when QX trends in we we'll naturally will guidance February. results report fiscal and monitor demand XXXX formal We provide to

the we XXXX. anticipating here guidance However, not as improve to of and quarters. left mentioned, the upcoming previously for year our to environment demand financial far are and our that, framework full With expect move next QX over will is side the that

XXXX, growth and $XXX expect between we of million quarter For fourth XX%. million, representing $XXX year-over-year the revenue and between XX%

a from Unearth revenue size business. the that the we contribution Given not are of acquisition, expecting material

X% be and QX non-GAAP X%. margin is operating between expected to

year X%, of implies expansion between issued our XX%, previous million, of year $XXX year for to and million fiscal full is total which million we $XXX of between expected growth the an $XX Non-GAAP guidance For margin is points. previously revenue X.X% which expect our basis represents and the an from increase improvement operating guide. from be year-over-year XXX X,XXX of XXXX, basis representing of points quarter margin full year-over-year and last

With non-GAAP clear optimistic are is in it has within about positive that this and the for demand full more year To we QX guidance, and become challenging. close, operating that we to now guidance. in environment reach a future profitability operating our are maintaining a both expect cadence

efficient again With continuing the vision. build to while to as We our our that, turn managing the for the are customers, partners, we trajectory like towards operator market our Q&A. to business close growth thanking leadership expand shareholders for well it and actively us opportunity. and longer-term to over I'd as this our let's optimize by the communities giving employees, industry serve

[Operator Instructions]

Our Brent Bracelin Sandler. with first question Piper comes from

the you interest pressures little see. is that Procore construction. you high the visibility hoping backlog I immune QX it's and obviously, on provide more of Tooey, putting environment some and rate a the here on to not could pipeline was

increasing about deal talked given historical CRPO to lengthening You what trends, we that QX cycles, saw how look relative does with scrutiny, sales QX? in

question. great Well, Brad. Yes,

So I rewind We're where would seeing little we deals. just were actually long before right more we're now. trend actually, seeing the if we scrutiny trend, cycles. say in quarter time the that a sales the started bit, elongated on

QX in that up step saw in But we particular, significantly.

think front. business, And particularly we're for just in. that industry's improvement be market the for see offering tougher kind real ourselves to that forward. much it's into disappointed that the have we're I'm we so preparing these because we it's that's of just rooting We environment QX demand facing environment, macro going as don't environment do coming are the going any we actually So us. to demand a problems same. that But on in much

win. the how industry us to wants saw You Groundbreak a much

this time. So of the the just reality is

and out I pretty as mentioned more yes, other in goes of point I'm from is in cycles. are these is my that out sentiment the all to called I want is industry X cycles That's -- more remarks, opening cautiousness, happen, there's industry just just thing this through I the the The cycle. that, and they getting but contacts inevitable. much that the

Howard. is this Brent,

pipeline We comment the still top of a generating funnel. the your Just question. on are quick pipeline at a

with it that's to of flow through However, that longer is from the to terms through pipeline there customers, we out sales. seeing elongated in the sentiments taking our for that mentioned what we're And flow cautious funnel.

there to I sense next about XX for you the slow follow-up could guess still Yes, super Analyst Day In And margin then helpful. you you do there. quick makes in profile, you, year, think as you XXX scenarios below points But it efficiency teens completely X environment? outlined ], at the are Howard. growth of [ XXX improvement think could where drive or slow the does mid-teens high of if that to type growth basis

question. It's good Yes. a

of the actually that outcomes with consistent improvements a certain in mind, keep operating all, flow believe conditions. the free is the drive So the to we focus is case, continue we'll it's in not margin margin, we operating first the this that on framework range in framework. And [indiscernible] to just on. that that share would cash be our economic margin, still And And of able reasonable perspective. absolutely in given case, in that the it's per also

question Canaccord. next Our with from DJ Hynes comes

are double for of kind you renewal you're for little Tooey, coming if asked Brent demand are and of behavior other that's kind and like and customers actually of up side I clear. the bit about more just to take Can a appetite and sounds I pertains would better maybe it as quick asked environment about kind it there. that their new stable, think behavior? what business, because getting things in on not that the base pretty of actually the seeing

Yes, DJ.

had What actually is that So that, quarter. that us is is It slight of a our Procore, this news there's this renewal because a seeing with means book [indiscernible]. which your our talk is predictable. that about dichotomy we lot point are to for last good improvement kind it you've that heard we book quarter more on more

do sure, something to I'm so want And Howard, add that? you

Yes.

Remember, still I a increases stabilization QX, the the In there couple talked seen elevated bit renewal the of than more is flat. a last proportion potential in we've It beta renewals. historically. more there's of terms still was the dichotomy about little what in lower what the is seen of when of quarters, the outcomes. of proportion flat we've So the

a back beta. than still more that quarter, renewals, But return this historically. to in me greater elevated more gives proportion dichotomy so we stability sense keep which saw there's lower we've of and it's what a And terms that in a seen flat mind,

Pay. customers Yes. Got GC of about of is enough. to management. as then base maybe Fair that kind percent for And accounting the a invoice Procore? integrations it. way think correct inside a a opportunity non-macro follow-up, question, Curious are of the And Procore maybe using what today to and tied today addressable serviceable your

Pay, side. Well, least invoice order use to Procore on using to in Yes. you be our have management at

probably it. is U.S. contractors that good as general So we program. providing are keep too, select we way mind, to to still only of a in But who this a customers about this think launch invoicing group are

still it's super days. early So

comes Our Barclays. from Kalia next question Saket with

a Okay. Great. zoom little to you, at maybe talk Procore out its in just about a Barclays. It's Two, could for you if build-out. where international I was wondering just bit. is little bit Saket

that I think market Day that single I Analyst digits. really, there we the think, in showed was share at low the

adoption how thinking versus whether U.S. international and in you're opportunity. there, clearly, just maybe the building you've talk the different make through Can just terms maybe you're out seen So of about you big that Does in what a anything sense? curve seeing

Saket love it to Yes, at sense, makes answer this. so

when engage cautious on market, foremost, thing -- they're a has into when The is most and we go first Procore brand. they the in globally partnerships. think that industry So I focus new new important to is

that is enter new projects will we So really the SaaS that folks our market, a brand customers having there. do doing have already Procore is we the of likely important. our And when platform beauty established

that heavily brand expand in markets. that customer we putting support the brand, success capitalizing on referenceable building on and getting customers, focus to So the is those necessary the then and

globally construction is about much same. done very is The is way the the construction thing that's other interesting

carrying that a go is we're us good news line when market, market a a product new the product that the has that market, into pretty So fit. high with we

there be requirements regulatory are general, some with product day is product those, X. addressed usable In going so be needed the to And from to that itself. the are

brand we expansion. with for So yes, then matters with and go definitely [ ]. Procore start X Focus

we focus So we distracted by that, adjacencies. get and on when we're in don't a market,

Got Got That's maybe helpful. to back. it. super it. zoom Howard, you for

Sakat, did we lose you.

Apologies. move so line we the did question. Basically will his on drop, next to

Adam Our next comes question from Stifel. with Borg

is you overall? This Mike be for Stifel. by area? just I if comment if product geography And was could at Borg hoping on that Richards there's Adam there, on landscape whether the competitive changes or any

wish answer exciting any pretty in Yes, you changed but competitive have an for I this, I The had as not meaningfully direction. business dynamics usual. on much it's

So no, to update unfortunately. there, there's provide really no

next comes Jason with question from Celino KeyBanc. Our

maybe from about follow-up Pay. using the obviously not on you from share other the and we payments providers. as opportunity, the just next greenfield focus process If about Analyst a these Maybe Day opportunities? what be we automated the should How first and customers think there's And gain an who think opportunity Procore term? question near the of legacy might might then X there's payments over on

We're opportunities. about one? there X miss? I another Pay. said You talking Did Is

a therefore, customers share not the providers, be might from payments product then and anyone while who using legacy Yes, gains?

Yes.

Pay having woman that yesterday a come to for the legacy much listened equal success her when said a before. learned day it having success with to her to what that every that a going customer So to for with been Procore actually call have while started product was where time she I so provider we're never line. cry. folks we're she do there. for saving Procore rooting the by on And to also market lot But been this customers have of

of big are point everybody. yes, of really the construction. I kind opportunity anybody this kind who so is is think But for does to. pain Remember, listen stories fun for a there those So to that

well. being And so it's received

early terms significant this is on understands, want I just still we going in rollout the everyone I Howard. the even just that are at going do to our to of at customer the this this It's answer. out to make base take there's point the follow implementation product. contribution no pretty USGC in for results. targeted we want of see into roll to time sure fiscal Jason, and this Or Tooey's customers. up And significant contribution of point to this to us year. our in next

Yes.

fair. And on Howard, then just efficiency. That's maybe focus to Okay.

think it lot sense margin framework. the left of moving a makes on I

think you As near-term help the at leverage, understand us about your disposable? have drivers what the you

Yes.

the OpEx So throughout put similar happened revenue has the have And of come forth rallied to cost efficiencies from actually to what Procore, of this growth company really of efficient different across year, mantra the we all parts this all around internally. different lines. the that has have

G&A. we're think specifically, see I going margin so and And still operating to as as well sales that benefits from marketing, R&D

Daniel Our with BMO. next question Jester from comes

just macro, point, to -- this not the in I'd softness? Maybe of Or the to is wondering, seeing off sort start macro to did in was wondering when you And and there. you September? and like but the the Do of as of tactically kind love Analyst labor start then weeks hear I'm similarities? at Was kind expect the it about the Great. actually October? near-term and you I'm dig we think any divergence? Or is trends? should international X Day just can we ago, U.S. see

you Howard. good here. to is this It's meet Dan,

were weeks when fairly is, typically the of X the about have And we framework surprised. X left issued a those at in to quarter full And I at X frankly, the thing Day, first impact to end we quarter. the still we on our how a X outsized have The X performs. weeks Investor And at close, downside of that in surprised impact didn't those X those terms close fairly of QX last that to expected are to had to an performance. the in them X was in some we frankly, our we of weeks expected There number deals, on what close weeks. were and large. quarter

as With This have cautiousness tried more of we've the communicate about comment back not shown possible what results, to in shown in case the start that as started also guidance business continued trend. a of started the to something about Keep we've that And sentiment to specifically when know in see this back our the mind this take base. all and we would when did transparent provide financial in do updates that we dichotomy not about this everybody. behavior up always year, to in respect we the some and way share to going that and our to customer much terms your seen to back when mid-XXXX and insights and to to to approach in just we we've that starts cautious our about to the happens. may economy then have like and customer QX be

of wasn't that strong we this that see to from did was something this, QX it's progress something and QX just QX. on So and kind

headwinds that's don't the more We not see something any you. is U.S., versus we international Regarding non-U.S. macroeconomic to of will domestically both based. more environment we the and we right in and international communicate as see signals, get It's see But information we diversion. U.S. tough and demand type what now

supplement may sort Can any it on Great. of next kind you expansion focus opportunity That's the doing sounds incrementally share of you the be to details really differently helpful. there? And opportunity, what over like year there. about then just incremental the

Yes.

of we're constantly immediately. So strength where type see and I adjusting we opportunities at, strengthen we see look we to think where as any us with that

the seen in impact. we've terms lower macroeconomic is the market the terms of seen the a in bigger where impacts more impacts environment is having of in some what the of end we've far of So of

different It's different Now to and that's the only the say there. not definitely all all focused segments it's stakeholders. throughout

enterprise that see the of market, more we been have the the steep. have more to the when those prepared weather conditions. be is in They customers and in been space upper well what end seen that, well we've macroeconomic able And to prepared more

we there, Now stability. in still that's the having conditions being have where environment tough said that is that, those believe demand more but we felt

from with Dylan question Becker comes Our next Blair. William

time. same recovery of that stability, retooling kind point Maybe some for opportunity called kind a the potential cyclical enterprise and sticking you around in Tooey, strengthening at with of out theme around the

kind share on bifurcation network and gain conversion incremental maybe over of stakeholders of kind of project Procore be enterprise to of fueling gain of that where the of and capture about need you more how recovery of more that between think work around scope collaborator of SMB, expect we ecosystem the time. share that incentive that projects, to kind that As

Yes.

news So Dylan, is good the being way is construction team. that the the on everyone same benefits delivered, from

matter the Procore stable So customers market, the they of medium our to enterprise collaborators be or going I the looking of on doesn't projects on more right the end bring are is working we their small, that putting to onto some are on trying now and the more would platform. say are optimistic large. Where that upper at focus it and they're

to to go The in want higher better the actually, down And confidence point And the to simply inverse go X portfolios run much optionality. is out, those people. have is as portfolio, less and diversified market sentiment of the I the more the them because we are. the And they it market, is gives bigger down is purchasing the you make true is. decisions bigger market, then the why with partner sentiment better upmarket reasons they a than they diversified

as the as opportunity to because but many do a lot we're at collaborators going on the that the focus stability see we're upper end we seeing there. converting So market of possible, of of

Got it.

the you type range. in And high makes of that XX-ish sense. Howard, normalized to going back to then, kind in of of That out confidence kind called there CRPO range of the Okay. scenarios, momentum

I of XX-month that if extent volume does sense. perspective, that visibility you project from stability next to guess the But extent kind what into makes wondering the to duration a layer cycle also good some of gives obviously, what there. in

there. to and Let demand to be now we're that to project the environment duration in we But more me get I clarity back the come do Right demand alignment just facing. expect to the not improve. the want clear, challenges

reflected fact, as more In into forward. going we in it get will that our XXXX. get into financial expect metrics pronounced likely to as QX And well

is Specifically on there. project sure the clarify that question you I'm what question? not can duration, quite

Tied multiyear nature. for to in projects the exposure volume

the into of mega segment some of kind visibility the but volumes. projects, it enterprise the some well, scale So maybe into of larger given as ties

caused customers and receptive your our they upfront, this less lined have try question. actually let -- cautiousness those This answer see me to think sentiment higher even I projects up. answers in if volumes if committing has the be to to

still in they're if of are will even portfolio portfolio. what on durations, overall so And that what terms there commit based project longer impact their loan in to they've got their

that and are even that willing point commit even they lower to they for pay mind to that in upfront, paying it if higher basis had if higher a when they're basis point backlog. so And they happens, volumes keep

into So to they're for equation still work that extent customers, commit. to it durations the impacts what our going itself that project

Our comes from Jefferies. with next Thill question Brent

was. average the Just quarter macro, definitely demand market I market, your driven end. the we XXX the a customers primarily segment. down it as on shy We you more low what more just up the But are rolling off are average high-end of than because And seeing environment mentioned it's customer that know overall seeing X impacting the your or you concentrated than tail think the well? is by that's count,

the what the now, out in a trying want finding go the that they into relationship likely the you less business. is they're smaller to new why But are to down to to right their the challenges we're figure lower businesses, market of enter

level And upper answer. Tooey's to market. that the on just Yes. of up We're not follow seeing on deterioration same the of

adds our are XX%. add is The down, strong other still even at is rate thing our net will that retention though gross I

really customers about It's necessarily platform not decisions. it's willingness leading that to the make So new canceling. or purchase

skewed towards down SMB customer space. the The other heavily count mind towards market is is the keep thing our in to

space. is seeing upmarket in you're what terms enterprise that of that's so actually ARR of the in as emerging split most terms And of versus our well. And

mind. that keep So in

look Tooey, is margin as across revenue, XX%. follow-up, all a if you average payers billion of And $X just your software the at

hurry investors' on on trying What's on to get causing minds. urgency a clearly [ maybe expense to your moving? guiding sense not maybe out why It's going to ] is, of not there offense is, X]. The greater side margins of or offense X hearing expense the that commentary. control, up question to the we're there's [ You're hurry-up the non

margin need Howard. for that into this think don't something hearing we about is out that coming number year a being more in of of 'XX about were we and going to we've XXXX I'll then And into now. intentional talked was way doing quarters go XXXX, this Remember terms at our when of Investor a actually up resources. office we our answer one. Day catch-up when Brent, hiring talked about is been also, back profile. our thinking we of because I that being

of been be plan our this margin And some what framework And terms you're then and of disciplined above year expansion. margin our in so seeing of more we've more spend to top in intentional and in the catch-up is terms of that, that that profile. even improving on

So not directly, to been answer hurry-up where guiding place improvement your [ office doing more we're because this and it's year-over-year. question points a basis ] a a to we've we're XXX

Our Altmann next with Nick comes from Bank. question Deutsche

of installed sort comments how just pretty to side the back made as to net new question, is the the it you Awesome. base actually DJ's I to base, circle around of relative guys pertains healthy equation. to the wanted installed how

comment additional the it more kind it if cross-selling into more what's on wondering modules you I'm So the of Is installed side? is sort there? of the driving strength on Or could volume base?

actions the Howard. is things. One out renewing the narrowing which the right? that bigger and the versus are base base dichotomy, proportion flat of of installed makes the that about proportion The me X Yes. the better range This that feel there's the potential. of predictability So installed is of base base, a taking, installed is is and

stringent outweighing In downgrades. terms of still is the expansion, expansion

of largely the that Procore. the in of more that it's in in terms be on of going space focused enterprise to then net, And side. so more terms in it's down still and versus expansion, for further And -- still a terms positive strength emerging

and I to a today. think And new been to yes, on it's an was, increases answer products. more historically as of working the also of more mix of like Well, -- XX-XX it's more and most cross-sell, volume, the but question volume has rest though true like we're the more that's

if X just then And helpful. more quick I one, Super Okay. may.

deals on working that they sort guys had October handful close? of of you of of wondering that sort clarify, that slipped those them? did me, did Just are that. out You there XQ, September, excuse out Are on mentioned just you of comment to out of slip were a larger -- if deals could still

remaining keeping good have that have deterioration them in all environment, into to those There's sure. we a But close, though, closed. still of of even be going into demand well and QX into the from as those continuing of Yes, QX deals I if pronounced clear, slip XXXX. not going as want portion anticipate that the closed,

session for call. That will conclude the question-and-answer today's

any will call closing I the to pass So now for remarks. back management

Thanks for Bye-bye, joining us today. everybody.

you. Thank

today's conclude Thank participation. you your conference call. will That all for

may now lines. You your disconnect