Procore (PCOR) 15 Feb 242023 Q4 Earnings call transcript

Hello, and welcome to the Procore Technologies, Inc. Full Year '23 Q4 Earnings Call. My name is Elliot, and I will be coordinating your call today. [Operator Instructions] I'd now like to hand over to Matthew Puljiz, the floor is yours. Please go ahead.

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

as the the of our refer views to statements non-GAAP You or are any viewed relied to GAAP of certain this representing should our as obligation to information these information measures should or by date. provided investors. additional XX, unanticipated not and on We'll rely information is on upon to forward-looking risks, views any required law. to subsequent If update presented is expectations provide events. not Therefore, financial not forward-looking assumptions today, statements call contain as reconciliation or information. February in to statements during as forward-looking to current undertakes are after reflect today, new be based predictions events, management's XXXX. Procore All no accurate uncertainties call statements as current and A also future may except measures of non-GAAP subject and press of replayed release.

here's with Tooey. that, So

and a economic Matt, ended bright we today. with the amid We thanks, year tough joining spots as for expected us Thanks, about some environment. and everyone, learnings

generated million strong flow, free believe cash will and total cash surpassed ARR, another we Some notable in that highlights $X for generation. be $XX XXXX flow we we year billion were in

greater durable and XXX%, ARR. $XXX,XXX X,XXX with year over remained ended customers retention net we the than rate contributing in Our at

thinking customer on how stories So and ahead. interesting some back share I'm and about today, I'd the like discuss XXXX to year reflect

like tough I'd call to different relevant we're that in seeing our start what our commentary sentiment XXXX amid be our is acknowledging environment. a proved In and of of XXXX, XXXX the their economic their on by the XXXX to pipeline year backlogs and earnings industry. were confidence to shared strength This customers' optimism So Much in last still stemmed optimism future from a challenging demonstrated today. buying customers for years behavior. and very of our work. their the largely we

notable brought XXXX However, a shift.

rapidly interest industry future be While to backlogs demand future drove just remain to rising led and against due volume weigh commitments the about began cautious rates to the and future strong, work conservatism industry hedge sentiment the partially shifted case. Sentiment for future in. should in

XX leading for As years recognize, I've economy worked our before construction construction we all been that. are Procore well cyclical. and in and

So can opportunities Times believe while be upswing inevitable compared what acknowledge like We've work, period seen the comes. to like tough that these that I'm success and improved. and up reveals few firmly every XXXX when that also to I've a I'd disappointing XXXX, I and of cycles to give myself. these strengths. was and will us laid confident determine when chance we've what's that inward a done us the set working for look important path And

the fuel and confidence bright business in our years I'd sentiment ahead. my So across customer and share that like X optimism to our to operations spots continue

inevitable too long to around ensure an are as they're regularly to for all customers upswing. with a have that this geographies the that customers time of been conversations also using the stakeholders largely have to tell capture we ready seen multiple and me necessary have cycles. opportunity and the Many positive. economic do First, remain They our across they planning

is not concern As skilled their I've before, to but this just shared also finding labor demand. the demand primary meet many times

delivers searching to remains paramount. is and As reflected our best Even me revenue construction me customers gross about the in high-risk a my like that business, This in is we this on always continue with are ours to us, customers heard historically and to only our customers and continue Today, value their been our predictability prior. historically, from spot. and throughout and strength platform Procore year much rate, has Not of which continue total from say, the the retention steady brings the downturns, predictability. years the rely our margin, efficiency comes efficiencies see these, But to quarter. run are they be to of tell Procore with enterprise this do our and for a half expansion. low us. Expansion upmarket our customers of that second and continue past from comes which businesses, stay you've provide in to bright me ARR times expand

and for this in and bigger going be here to continue on room more term, shortly. expect incredible contributor this to near have share We a I'm the growth to

software needs. The will that more where that are ago proud example list puck share Glassdoor's This employer great exercise we is leadership the in was is infrastructure going. started the where and boom that we serving build Procore to the of our skating with industry. continue down We've we that road is up the reexamined gives XXXX. aligns fourth indeed reflected faced geographies. across our We on maps. long that to its I and industry members early that's high-caliber to in Third, reinforced doesn't of and which industries it plans more we in our underserved opportunity map us this than Best from From attracting we've be in our believe bright go-to-market one long-range happy on business effective they not am product may and from evolving road cycles. grown construction companies, headed. be A that prioritizing was in right and both I'm industry strategy spending. that ensure U.S. this up to Places feel I I challenges important that the the how our upcoming for to and position all the ever large economy are Work nature and spot and for It to ranked XX an we and cyclical #X and very is culture, the to being of of on track team product revisit into an beginning, our could committed an fostering many attracting choice, talent we and confident

that areas you've demonstrating become it a company-wide in improvement from when that at to efficient XXXX. has building for to efficiency efficiency mutually significant fuel this exclusive. additional this identify to delivered opportunities past as heard Procore. most the we cost growth context say Finally, began consolidating year improvements as are of strong spots nor relationships previously. fostering XXXX. continue me of deeply the treating build at progressed, a we customer and of that we the our come fantastic we I necessary only emphasized the bright vendor ahead. mantra ability the improvements the for spend believe the We in And discipline not to team not lasting I'm to planning quarters, need our business, In continue experience proud employees employees customer important I'm invest incremental adding provides relationships. did employee well of we discounting. for with shared obtain to other better that proud delivered The us when this I especially in

in a few share to like I'd of relationships, U.S. the one is Inc. recent specialty customer contractors of largest Speaking Performance Contracting, examples. the

to For for because rooms, energy competitive solutions, of years more past, I change decades, Performance as across of in-house our able is dedication PCI PCI products and at chose stadiums, significantly Procore to management building success construction our the leveraged contractors Pat, our critical They traditional Procore in-depth execute branches. has now and team data of in PCI upon and streamline a clean scale. With adopting custom to usage the and superior than Procore, of decided specialty number including with platform. as available is plans, expand Contracting research In country, successful multifamily solution across relationship and customer operations their organization, which come. making rest primary standardize their projects, on residential After management forward clean workforce I'm projects. well have Procore, delivered to the top-tier looking the work to several close their construction years large their and personally all to sciences PCI more. Jason semiconductor of and and the technology technologies planning performing life centers, X services

term. capital that customer all am equipment electrical and Procore notable footprint happy and provider project portfolio. project improve with recognize facilities, vehicle that American X,XXX that adding Now approximately are operations over in partner new across They processes of maintenance facilities they but improvement Penske leading share robust their construction, financial we consolidate Transportation several and support and management into a Procore construction others a wanted a Solutions, to truck customers, a including is also supply platform only and became facilities existing to help other over logistics scale verticals, expand system which management to a would Penske to the help not controls with to best-in-class years. Penske new customers. centers. over solution and them long infrastructure the needed renovations QX, service with as to I find chose a existing across transportation growth their as single continuing to we're continuing coming project projects leasing this distribution North well

better to and general and partnerships one its Contractors shortly. relationships and sectors, owners to with #XX opportunity we'll of be incredible close looking across a the we with we continue leading with ENR's gas example serve construction us, group, outcomes a of manufacturing number and I'm contractors. McDonnell's recently that of retail, to as which a easy-to-use, just transportation, and more water, government, we them the massive significantly solution modern, standard expanded great is specialty going is power chemicals, to to XXX on Burns team enable Procore and addition help and build Procore quick business. industrial, ENR ranks of projects. about across out Top collaboration The was our platform will McDonnell generation, project This for talk and and Burns In the list which deepen and continue deliver contractors, this see with for management rolling is commercial oil, including these telecommunications more. Today, XXX, implement,

our bolster shift our our a the means doubling which year offerings. on could related to in year of gears core like while core, down ahead. and we're XXXX on discuss I'd describe Internally, areas, like investing which I'd how further now to thinking So as about focusing strengths

to the Within the ourselves solution going industry airports, first, work. municipal Today, utilizes the Procore build both much for plants as cementing and X platform, infrastructure we're areas: focus traditional facilities, clean and customers energy many and on more. civil

I in Unearth, a to small, going acquired excited civil well, and Late to for horizontal However, more to but our support meet acquisition, us come. particular, tailor This of we platform to know information can last That and will better the infrastructure we infrastructure. for we needs types are construction, year, construction. what's do in leader is while projects. about geospatial mapping allow all integration

take offerings than increasing our management. these customers financial is there use before This into financials means we is the half Today, suite. opportunity invoice Second, project ample and even our consideration. within less adoption payments of of

to Speaking excited payment in important contracts connect single we workflows, on the to estimating and very of a to note platform. to has the all payments It's been market are positive. invoices we that solution feedback the are documents that only early to compliance which, about

customers, meet [ Procore on of enterprise. improving mud timecards for discrete to to is entering running difference the Third we configuration ]. solving boots, values is and enterprise a in should retention their down excels product meet No to The this customer ability construction, to can SMB of the the folks configure task the and and facilitate the of improve and from easier the all Procore road. the and same our at metrics way. individuals how all billion-dollar enterprise with to heavily the effective same much and configurability expansion the an for clients enterprise become of biggest needs adoption of flexibility their and specifically between requires those believe needs former improve further the We field range vast more projects which perform two the CapEx needs.

So a our I'd couple priorities like to of within go-to-market share motion.

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underestimate may share to like some on I I'd think So opportunity given market some the strong today. why presence color our

it's XXX are entities example While their some to portfolio Procore of are entire volume. that to total a Procore, like remember portion of provide their on I'd an using others important this The on running in ENR so. the XXXX. States general to XXX construction volume the do and and represents United $XXX use in approximately contractors reported annual the opportunity ENR XXX billion largest in

XX% This is due approximately $XXX has figures, motion. disparity, we group's XX% just Procore. of Procore of While land-and-expand over part logos, the to in billion to committed these have our given this

we today broader of the for All Taking ENR not about see list, in serve short universities, opportunity opportunity the and these only the of Some represents than and customers becoming the yet U.S. entire customer technologically within our slightly the still average are to their of hope most to average category very just landscape all sizes, including that years. plenty ahead. XXX, If clear construction operate the uses of ramping but opportunity a of a we and all business available about whose hospitals, These optimistic group tech does products of is base, today. Keep of also other sizes. adoption grow the we more within list grow coming Fortune developers room this independent the others contractor market into more. There's is the it's ENR industry. This this the there top most We motivate customer the about Procore X/X of winner that, customer great On me it. is few this industry. so in volume and in of this represented is are specialty keep broad. XXX not account, our well in and global in forward our details just much some opportunities this stakeholders enterprise, and a estate owners and annual outside market have are XX-plus and believe much the to in how mind, I to across enterprise across group, market me broader sorts account real geographies our kind X this of are XXX win. product And And we products. still largest, are Plus the still examples takes growth sophisticated construction of into represents category. of only have trades. divisions

having the go-to-market-related update of Officer, addition us like up I'd most revenue Hat. leadership Larry years global Chief heading second share comes of our services Stack. Revenue Red is The to X to sales recently at Larry wealth with spent a experience, and

has finds out time, in have lead opportunity I eye on good talent achieved I'm size fit believe the that in revenue focused be always in that impressive future. In to similar Larry the helped In can past, I a be growth may a multibillion-dollar instrumental for the particular, scale, you've company growing leaders company. and that Larry to me hopes experience this an heard Procore us During what Procore itself for to previously who new our journey. has a mention and today.

more the XXXX to I'd confident opportunity on while closing, it be, our and Howard and our hoped industry performance. serve, in ahead. And going our proud year would business brand share improvements, wasn't I the remain within is I am of we now this Howard? So in culture efficiency growth our

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

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

grew respectively. XX% and year-over-year, RPO deferred specifically current XX% Our metrics, key current revenue backlog and

back specifics, of of and operate to December. November in to demand out framework. financial our continue in in left similar we business we the side confidence remains challenging, QX call that have we today as to environment Before general, but we performance our dive will into is what described The want and I within

X Now on topics. share color let some specific me

topic to on early our of from that of growth first within financial timing the we XXs is This indicated cRPO. of earnings renewals. metric low related The with this last mechanics side benefited the the cRPO benefit, line in left our framework growth slightly Without call. is the revenue

a which decelerated fourth trends XXXX, performed new retention, The in second net one, areas: logo. to a expansion saw can of to better in slightly; in expect that revenue of topic trend was is emblematic our related through continue This we these throughout remains and which is stable. of which The mix business. seen the we than growth, general, couple customer be XXXX. count In two, quarter

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payments. is topic third The

beta. closed are we We feedback and on to in mentioned The closed conversations we advantage of many were I a customers majority the have platform. we single As confident year, the last a positive, about of and we connected unique customer already you end-to-end has in been only have solution our this opportunity. are believe excited our because early that

led this user areas. sales represents to of annual are prioritizing This And improvements, any the for to QX, in dilution. highest highest the all be team example evidence the around and our how has commitment the XXXX. it's increase with in are in operate conference Groundbreak The term, year customer it is last to headcount we operating from QX term We've balanced marketing our only of that be share efficiency over our the our we for focus $XX generate represent And expenses. resources notwithstanding marketing term, efficiency ramped in the result, million how our are amount we too toward significant a optimized this fully do. I'm the resources flow long full in we Therefore, share These advocates managing we significantly our reminder, our still growth. The count across of and improved to is to growth limited is The provide generation to This way and related long and better is near overall of right free of is the $X.XX majority XXXX, offering resulted specifically their from points near redistributing fourth ROI customer while of XXXX. An spend what just leadership X% to X,XXX every headcount, to payments on on disclosures, most respect pay. of improving rate leadership motions in the adoption. the continuously contribute cash still we focused across is and year-over-year. successful per our pleased XX combined with these very while promising cash to not majority can maintaining by of business. low our and headcount business single early motions business. With expense We over a they that of the that motivating efficiency, to ROI As count, quantitative increased take gains ones decline digits. the in momentum have efficiency initiative, most XXXX the and expect of year-over-year QX. continued CFO months been our margins operational flow for share a will need basis our topic operational and confidence core margins believe non-GAAP This teams are at get this of in opportunities. to entire strong of which managing which quarters. growth we to several aspects to the can free team software upwards

fifth and single outlook. As financial me XXXX before, cash important our our most are years ability metric is you've believe financial topic, heard in is free to from our improve in confident overall metric, per share the the according framework. This flow brings to health us the reflecting this which my we coming of business, our to

of As I framework last quarter, within the side expect operate to year. this financial described the left we

year XX% our result earlier represent cRPO what the current have likely our years the half expansion of to margin context we outsized expect believe which we in cycles. to performance Let on efficiency, respect would XXXX. longer expect margin have second of sales financial me the our another the year some market, increasing to focus improvement. Based and half, in line year. With growth upper This may the end to in according be bookings below operating partially of falling than framework. XXXX share sight, for X stronger we This towards end rising significant on will the guidance of of indicates the typically due then likely of our XXXX first that

a implies guidance improvement points and basis XXXX across of X,XXX our Specifically, combined XXXX.

guidance, in While required XXXX feel expansion outlook. investments that, in to we the to have we do move to opportunities and and opportunities. With our margin magnitude the capture long-term expect margin not of of nearly XXXX same are on growth our those proud our confident given let's expansion our

guidance to of the economic headwinds persist current year. the continues through assume Our remainder

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

profile, that given though improvements the years. for guidance forward, prior the than guidance to conviction still our strong allows quarters efficiency have year, while we significant our to our full revenue will previously in intend significant flow our guidance outperformance is it financial and into implies cycle still flexibility smaller have framework over be we for our and that disclosed of in guidance. Note in going we driver commentary, outperform margin versus here However, would year the years. With for Growth cash is free XXXX. still share objective primary construction and upswing future and a growth a compound our we to per the benefit few QX will still next full our that, potential invest how

quarter first we the of and For and year-over-year $XXX XXXX, million is between expected X% be operating revenue expect XX% and QX to XX%. of growth non-GAAP between X%. margin representing $XXX million,

accelerate full year revenue fiscal implies For year-over-year margin progress environment, year we is XX%. expansion and current XXX the $X.XXX operational XXXX, make points. In we between we operate while between total the to to and expect between profile. the margin billion growth basis which margin efficiency year-over-year X%, improvements in and on are for expected our and operating greater be XXX going in $X.XXX representing demand of conclusion, billion, X% Non-GAAP our

shareholders manner. However, to to I'd and industry so again let's the growth Q&A. for by growth an as partners, serve remains as communities that, close opportunity. With our operator it over prioritize we appropriate the long-term thanking efficient do turn the for we us giving like in this our employees, and opportunity, when and to intend customers, well

Sandler. Instructions] Brent Bracelin from with comes question [Operator today Piper First

we the maybe does is, into penetration. of And appreciate for customer thinking QX. GCs, actually year? and Tooey, the that like It here. are between you implications in of down volume think opportunity number color on as smaller count about XXX, a you're from through we that larger of some just focus the had the you focus seeing and GCs, one in the Question here these there perspective ENR what a customers mean doubling on slowdown next that going logo add total sounds larger

question. Great you. thank Brent, Well,

I we mentioned primarily do because -- Something over-index has SMB as lot. been than the customer the market on not sector. in that we impacted macro we count think any the get probably other quarters, more previous asked I by headwinds overly would a before,

enterprise. expansion bringing and our so you products. well we've more has market. very the with But actually on with They're been And volume see, that more done as buying focus

therefore, implications performing the that, segment on that So forward. continue the is we're of And to is industry are, going focus our going it well.

said I just we to is the revenue add so to aren't this leaving proportion really Tooey that a you We the actually fact gross the large customer Brent, is market. to, still we also at have concentrated though, customers that want Howard. have net also us that what about retention, I'd want rates. count, point metric of on remember net XXX%. down still at to around point is retention retentions which good and retention, gross XX%, stable you

color here in the guiding to business, side QX, one a have of into volatility in you've so understand some had much informing booking Howard. cRPO seen how seen there. cRPO days trying of then QX, by slipped you, Just quick follow-up half, of in. but the for first aided XX Helpful And far you the that snapback here during out deals QX? nice still clearly volatility XX some that Is these guide? days to what the cRPO you're

good Yes, question. Yes.

of was It what changed what and QX really. at in So really hasn't not in told you terms occurring. all we

the dynamics we're and and that get to are started there was beta in facing same, So I that a will terms we stabilize is that demand challenging when thing little less. environment. outcomes that historically The talked about potential remaining in much has larger that pretty one still still beta add of of the the bit

the nothing that into And dynamics so some we are from has that's seeing, changed really QX QX. of but

with Kalia to Barclays. Saket We turn now

I'll Tooey, you. with start maybe

see the real-time or the seen going are construction of I one a call, a impact the the to see in we and you've in guess a if we I point. of bookings that to cycles upswing get questions all more earlier mentioned is couple past. that see your when construction market whether And You metrics of there. lagging Procore's impact out

for Tooey, with cycles what Procore, timing is maybe terms you in you have so as you, that prior seen make at back the that And question Does look sense? of element?

you know. it has No, that is customers The Procore paying upfront as advantage our our pricing does make Saket. us Yes. volume, sense, model has for

of it's so indicator. a future are neither It's more to committing because indicator And people volume. or forward actually current a indicator a lagging

sources volume if that to because that just forward-looking that metric. see you're looking is so indicates much that And data we're commitments And you're for XXXX, hope instance, other makes actually I we XXXX. data, for at like in what of sense and really a XXXX more saw census going actually

maybe sense it. areas I is, it. guess Got That growth And does improvement. you still talked the about in this fintech. able maybe future see that also on invest some and drivers margin Howard, a in the give sense. margin Got of us to for could we've the great to those international touch you, improvement. maybe while the showing whether past, make great question for like growth you're

Thanks sure. question. the Yes, for

So is short answer the yes.

has enough to as really flexibility see of to we investments guide continue develop. us areas strength make for margin Our to

room And so in flexibility of that we plenty have overall.

the So short yes. answer is

big make the term. see continue we signs Specifically we QX to international. over long region. it EMEA still international, on still coming We out starting of on progress some forward for medium a strength of us and opportunity are believe in is And to that going the

starting work left some there's And to of so And we still there. see but a there. to are be done, signs signs see we are starting lot to

improve negligible profile still we about And I just current fintech, opportunities that within year. long essentially the But to respect our invest we think has margins. have have this to top our reiterate term. contribution sure opportunities and to to again, growth continue I flexibility do there the want still that make to to with the over Specifically we as line

next Wong Our from comes with Oppenheimer. question Ken

of did guys the 'XX. to margin the but was if you Fantastic. now. framework, float fiscal guess Great. wanted that's at out it kind dive of far realize kind of guys XXX basis I maybe thinking there. out, into the I through points around pretty I comment in I expansion are you expansion

bookings 'XX? like kind with So that get I are kind assume it if in tier. in you'll that that guys fair an back you assumptions of middle expecting would baked guess 'XX acceleration the puts that of less you half those improving in to be

get to fiscal we that through thing early So how terms 'XX. and it's this year the little specifics in react out of a terms plays We've got in to is, can first of performance provide lot how any a on our investments to and still is framework in from the average a mind that, profitability both fiscal metrics. board, top line to applies But see the the for framework that over across next few the years. 'XX. keep And multiyear we the for across what bit 'XX,

year. that continue but growth it's so we valid, a materialize also in And that flexibility have was the that intent still the And comment. for multiyear in framework as mind The keep to to average. is this see things we invest of

it. Got

I got enough for not kind what likely sure some And QX, if that of QX, volume. of as that look. Perfect. we kind year us favorably wrap kind mean that I how you today guys you out in up backdrop might on messaged seen guys a of play I guess perhaps than a kind on on the of that, construction what's of cautious then being Tooey. you've of visibility given perhaps, give based numbers I'm the that your sense those more kind now. to it guess mentioned Okay. are to is have dollar more being one likely customers little you

remain I the muted. is that are will are said folks just I my there folks rather still can that from of pretty The is obviously about quarter. give this, though, challenges sense a still seeing industry personal it's last Well, much there. what say that continuation future. like quarter, we talk the last out which optimistic to, I you had conversations Sentiment

from And No in. come about positive they are signals change come, When just to so positive still they year would talk -- more but quarter. waiting to real for the straightforward. to be I say, last -- really

been So flat pretty muted. it's and essentially,

turn Hynes to Genuity. DJ with now Canaccord We

just So point. maybe build that if on can we last conversation

So case, ask of lower like speculative like real-time that activity, commitments, I a guide. more me, way fair if in kind not Is to comments that headwinds headwinds. way but being which, new of bookings on sales to think Does or the longer if sure I'm make feel the your much to business in the this kind reflects is I question? environment, slowdown right acute about volume ask the how cycles implied versus guess, it, is by driven upfront sense? the impacting And that the which

headwinds it. there's seeing. into to I the that ask I longer are think fair cycles would way definitely say a we're sales playing it's that definitely the --

being all to deals. quarter, way want -- down But As that it's lot you going now do we mentioned are commitments up the to last of Howard, in a going is the made add are the C-suite slowing anything? cases, which

focusing a seeing kind of upmarket. long also where factors number where of factor. cycles sales But around seasonality the one and strength long is and our sales HX, there's That's comments the is going cycles we're the is expansion between part terms those. of and of of in definitely on part of and focus HX those part our Yes,

in we're that The is of dynamics factor around and a DJ, our about to customers year. in half to of could between likely and portfolio in the through HX, thinking this get further there's HX the diversify they as flow that the potential their operating sentiment more terms to acclimated for get the and able environment, Procore stronger behavior are buying back other really

So kind into for about all of this progress terms those factors year. we're thinking how factor things what in of of

word also Yes. factors it sentiment, of to they inputs there is how backlog, a a is it, long third-party when their the in that just be just the going that the of are And durability to on is. cycle is they that all going DJ, commitments confident sentiment. the are lot of but sales how at they look let get drive Our lot just of which quickly, customers really make me right? build regardless of to Procore key

but comes input are common debt, interest of the input. of There's that is around of off construction Not question One all sentiment. a on rates. driven one lot projects

complicated. So in improvements you when going sentiment commitments. into But sentiment, it, see it's because think we're plays we rather see in to improvements

Yes. Yes.

Makes maybe second question. sense. a And then Okay.

configurability talked Is there entirely And of Is that the customers think one the is question remarks approach? the ushering initiatives maybe higher do there? So is enabled how touch by like end you product? about then guess those driving high prepared a I in along about at market. the the with you of a services component

Yes.

deliver we've can't product, So up gone customer you just successful the and in configurability journey. market bring in been actually have you as Configurability, there. the to we've along

customer success we've XX,XXX practices, particular we construction learned life But cycle operating our that. working very organization best trained speed how on and to also, the have professional is across so customers. them a within companies frankly, services who group getting up very, that with robust in And has understanding the is adapted

bring of this that can a through we just so configurability lot value product. the beyond far And goes

Yes.

on, the end and align, organization this doing for we've example, mentioned the of to Just up to upper some some in organization few which of add seeing over DJ, PS to line distribution and great to that's example, and been the past case quarters, we've the configurability that the that going towards is our resources a our optimizing of market. we're the of strength requirements of the that that

a So that. this great is example of

We with to Borg Adam Stifel. now turn

you deeper in and Maybe could about the there. for little Tooey, lot go the civil. In a opportunity infrastructure talked you. Maybe, a bit script, you

Yes.

the global that run our portion civil think would is infrastructure civil. So of portion -- construction certain largest name And their and have lot a there's today a infrastructure. customers know contractors of a the -- as construction of a large you of and of market

lot of build But projects. can do civil using like infrastructure we our and we feel today Procore's on Now customers tools a more. very that effectively

industry meet listening to And what that figure demands. can it to out we so we've those to do the trying been is

a Our Unearth to you're of that a very large where building mentioned, example When the was on good It's highway. expense. that. need a items are know I as highway, acquisition, you

of got And lot acquisition so the mapping capabilities add value. adding a that we that from

our industry of such about. and really they every project run really, Procore across on So is to type opportunity. ultimately we are that going to a continue all And we're volume big one to customers their It's this allow listen to just run. that the excited

to turn Nick Altmann with now We Scotiabank.

Awesome.

of given assumptions and there about Just improving maybe and whether that and contraction just can you expansion expansion the some or focus NRR, talk in underlying embeds on NRR. the the guidance

in I remind dynamics there's hurt to of have pooled more good we into a ] again, that our pool business. lot for but NRR, a actually that models ] a folks, go Look, dynamic NRR it's [ right we [ now, want sign models NRR. Remember our actually could where that lot

so it's there's for only at those And key terms lot not of that into really NRR, some metric things of a go assumptions, that in of look we that.

as just NRR. assuming in expansion simple it's we're So as not

where that's focusing we the about of focus resources on that's expansion, shift to some In actually terms that's some in we we're talked expansion dynamics terms our resources And example in we we're upmarket, strength the the the in strength. that what saw us again our starting moving see to of another of to and of of where that. that

So that's kind of where it's going. Look.

just want are beat I guide, able our to things high conviction have understands that get that we that still everyone going but revenue guide that make Our be to sure assumes we to worse, guidance. actually

may a the better. given more out sign the Great. is longer a to elevated mean, RPO bit seeing and cRPO And customers cRPO a backlog are of and up, RPO, up challenging willing of would think macro I less question little of have just second Okay. years in I on then kind picked see hold little But visibility, in and deals. sort they're bit you'd duration customers maybe mix

kind talk specifics cRPO context you mix give more then of just and early on cRPO just RPO So macro? about in number And the ex can you can renewals? of the any

Ex early renewals.

cRPO that tailwind of rate. -- terms range the renewals in X% is growth the So at in I'd QX X% XX%. say the from to growth the early probably in impact

dynamics which in between that, expect term everyone what quarter low we in left go and in that it's when side a so framework is the of deals when growth rate. some we timing of from terms would the happen. you short things that of And into mix the terms for told of XXs, what Outside revenue adjust and last term, there's in that, long our of squarely the

So simple mix as it's at that not just and impacts results. how the as our looking

question Capital next comes Our Markets. from BMO Jester Daniel with

implement you Can financial on suite. for much financial touch there? in just pushing when management control new focus and that of the that a that. get is terms projects can and just completed story about to which natural come of a in Like much expand or Great. key XXXX how versus point to that duration you becomes third Maybe how area projects transition the online

our time like always salespeople, those there's there's never to so look, tell to a so Well, conversations. product. be implement to having financials our bad time good We a

closely field buyer is So don't think. you way to is suite because project it to projects one think our It's the tied all our the product financial I financials back to very CFO. there, the as personnel. our comes office, Project down not it the it's -- level. But when product to isn't management, tied -- really right, as would projects, it's the

a And wholly so it's different environment.

it yes, way. got don't looking a buy So to I them to I if that good And And [ it's ] at think Procore would look I just to -- someone time Financials. you're always to wouldn't -- you. sell buy,

deeper going maybe there. one enterprise another just on then And Yes. Great. the and

terms an drive on, in there that? in is expand comments trying As of had any the Or do you you think resourcing to go-to-market you're to sort maybe which there? to about margins, expand you're differently environment of trying there anything in really

Can I start with the... Yes.

Yes. Yes.

so would as to much Larry ultimately, has he I not be shifting remiss that there. is very help experience having say to much big on we're not doing. board what we're think be because But going I to a here

focused have been an company for many, We years. we software many have enterprise-grade and been

motion not to going a the be there internally But more so And is there. dramatically. more lot focused change -- going will do to we of are just

in, And Yes. Dan. I'll jump

go looking just as answer capacity example to of efficient piece and also are around of resources of headcount well. also distribution by we're the how for and context piece form in supporting of our where the our there. But the your I'll this we terms operating So at business we getting this, improving capacity to infrastructure how that sales towards growth the way adding the and is capacity see that there where that expect is not is for and actually which moving in another but will strength a simplest all we're question capacity we're where more

would that's the say to way that answer your I So question.

William Blair. turn now Dylan We with to Becker

the are million the spending segments. enterprise within or the the sure these color that customers cohorts? graduating think product? the it's But opportunity kind we of $X should to it of small But kind of volume relative know too, ENR And I we've should into kind I we overall expansion customer and to for continue about to here, or of got how within seems of that that XXX spend. kind those annually. about $XXX,XXX guess, think runway all I'm this pretty mix of kind share appreciate a relative combination I either cohort opportunity for both. space here how or of

dollars market, count bookings Yes. our of vast A the couple ARR are Dylan, and market. down majority dollars in up majority of things. concentrated while from vast a that reminder, comes our remember, is One, of mid customer that just the

opposite direct inverted in that a almost it's pyramid. terms of So

greater this way we've about got growth think $XXX,XXX with things customers is that than one the pretty X,XXX Tooey to of healthy. is talked clip ARR now, of that's we at a other about The than disclosed more

making progress we're how at in look of terms enterprise base. to way one that that's So

Or initiatives Correct. ] then, and that the see from of kind you Got And we've some civil stimulus you're actually maybe remains starting the still to of with that spend for come stick a Tooey, runway? it. Helpful. [ to of something that kind backlogs is opportunity. flow-through Is something on multiyear to growth kind of the that seen? in

of that I'm and but it's getting one more have for is that few dollars talking And The talk definitely opportunity ready dollars saying than the it. is lot a right still deployed, actually folks up ahead of remain a gearing the are to they why reasons optimistic that's are runway. very so -- all growth It's us. I multiyear for been it's

to turn KeyBanc Markets. Celino Capital now Jason with We

was Obviously, about today? feel in going think do a here? made of small do But of it's the the for evolve you like acquisition strategy payment space. from Tooey, one how you environment validation Maybe And competitive here. it how your Great. your construction competitors looks recently a your positioning to

Yes.

think that as always like I So the are in having just remind that of boy, way alone about very doing now from way amount tremendous of isn't with the is to because put process management, that like flattery, ever orders is is and the payments. I platform in a estimate change I a where tool form payment the But and don't I a to you last around long it all through great through foremost. first everyone now sincerest But together which account, imitation last yard. sudden, seriousness, pay, think. interesting, is you strategy Procore have like kind all of behind lean step a invoicing the all a dollar waiver management, connected, when into have so and everything our an and payments contract feel want you -- I to all of that there on stands bank to every final managing horsepower power that payment just that flows that all are just as

there. 'XX? Howard, is you rationale that for of is Interesting. comps, the worse? Or renewals on just is year-over-year function then the of of for macro assumption a the kind variability moving in the get 'XX, mentioned, into an Perfect. the half Perfect. Or And it continues is the cRPO it purely those curious first early framework to

I our thing the framework the to you're financial the is we Well, and think referring that is I first That's around thing HX. cRPO in framework. HX make my want sure. to have commentary don't But first

we One is, year. The of be HX continuing to part think focus macro are for of going the dynamic environment one, is to that's cycles saw that I And is combination there's go of proliferate versus assume enterprise, where the reason of some and this going in the full sales on part longer. through HX those last things what year. that on the a back we so into And the based that, Jason. on

their being would this diversification environment. answer manage their to within portfolio into and in and Another the I are go get better companies factor going previous at the that that customers to about talked able is our

we what those happens of Now rates, factors. to the inputs things interest the get like depending with back to other be as But part are into on that of lot year, a going seasonality. there's

we XX which the years is length when back to about XX is factor Another our of X.X average contract. that or part would roughly to year, this months, be about of the get

of that So starting again, we lot a the opportunity to beginning are of going renewing back up towards pick customers come for year for to last up saw renewal the of an there's in this and the that year. part

We now Tilton turn Research. to Wolfe Joshua with

would you think a to it? I early the You're early It is, then pushing but talking Could people one like of the talking you're trends. I what in kind few renewal like kind QX. clarifications. this just kind to you which talk of things of are feel off sounds first just have impact drove of to kind still to My cRPO from I renewals, in challenging, be things quantified environment.

QX? in dynamic renewal early the drove what So

Yes.

renewals of cRPO quantification the is thing I the early said the growth, X% roughly first look, around So to to is X%.

"Hey, thing also, that do distinction early to the in." and that, start pulling to deal nothing future. macro that's I it's terms and to want In be terms make a pure saying, any to It's This a that's this of what folks from of lot anything we're has versus related deals think a the not are to specific I between quarter-on-quarter. in of going with drives that dependent Josh, stronger timing going is pulling dynamic an a environment. necessarily is renewal

sit sense. just months last guess gets -- an it relatively But you're relative you the for you from from should XX saw are assume that in perspective? this then baking or unchanged in it outlook Does quarter. follow-up, from that from gave better? look and environment assume Like we we Like, how 'XX? a think we what going as makes to now, unchanged Totally QX? Worse? And just Okay. about to I what when here Does say, I environment that? environment it understand macro quarter

the that the between revenue that will remains we guide about assumes and dynamic bookings talk the that mind, assumes I challenging. and and when and things it HX, still very beat that things assumes again, have the HX say that I'll -- HX, high revenue remains seasonality the again dynamic get The conviction the Keep worse. dynamic HX in guidance. Yes. And same, -- the

comes Our Sachs. Kash from with today Rangan question final Goldman

a you that new straight market. The framework tweaking your a December in Sales we of Head what to September expected. two lead bottom a and in case good for with of the be of been Sales. unchanged. And Can you Congrats your end expect Howard, short-term in transition software, to radical if change. coming you at appears and change, have horizon. end that too stay right is Howard. going It Head are very outcome going also going us when caution such that Head better Tooey is are on a in very right. Day, you Maybe out a one reassignments. and Analyst QX, But the your quarters, there for it and also reassignments, always be laid the quota changes change count CFO go-to-market, to But calling the in the of to the little through to ponder like call quarter is a of margin that are Tooey, your revenue Larry, something the than growth walk territory bit of like Head was at in in software one just your a year, quarter. CFO was thing new happening to that's it change seamless customer absolutely is absolutely things you looks has you, that better or margin for things any Sales, are Sales time the case what that's a Generally,

you than I points, fiscal guidance, margin exited you not margin guidance those the think. when op for look 'XX. was laid with, versus X%, And out. how I QX better than were non-GAAP whole So a It's lot percentage at different expected which numbers your

can So either the you a higher you, again. lot the to Day gauge revenue more question confident, margins Analyst have back you Can Congrats guidance. just your or growth interpreting you did more we each is upside. you us today for really you, have one should how help be gauge a once understated conviction you're for us at and the help than

take [ final the ] first... Let me question

do me Howard. Let the question second Kash, first. is this

will high that So as we that beat beat make just guide, that want else understands we revenue okay? guide, extremely the of the magnitude is everyone sure is conviction be I clear. to make you I and not the have that, going big just want as revenue we sure while past, to the saw to in

single QX, that's from margin and the guide really and my to relative in company day. of it fit. reflection It's of terms every better focus we taken getting And not the and the it's In perspective. that this it's something they commitment just entire taking mantra has on to how operate the our what getting and QX, an in frankly, example commitment the did of

leaves the stress for into 'XX, fiscal arise the enough additional invest I continue see In growth as that of we could guide that us to 'XX. fiscal to this room the come to can't investments also terms for margin the in flexibility opportunities invest in enough

that's So your answers and clear, question. hopefully, that

Actually, that dovetails very nicely mine. into

So by the day. way, is today Larry's first

Customer experience. of only be Larry He's while but he's a come has course, amount going in. just couple of bearings to So to settled. Larry, I so time of want little a our Success him lots gets As Larry. to he about spent Sales, his of give with latitude things of clear. A to before well, be not get Head CRO, obviously We've considerable also super

aligned things. around lot of very are We a

doing he with lockstep one important is He and efficiently is. of are important conversation. and Larry growth. thing things in for Procore, one is And So those he growth about it's talked that knows that knows every I how it how in and efficient I

happen, hopes So anticipate to first changes us he's major continue journey. any that and I before his this bearings high going on going have I But yes, anyhow. to don't he's help get

concludes thank to participation. your call. you Q&A our conference and Ladies and like gentlemen, for this We'd today's

now may disconnect lines. You your