Procore Technologies (NYSE:PCOR) reported third-quarter revenue growth of 18.7% and raised its full-year outlook after stronger bookings, particularly from large customer deals, helped the construction software company exceed its guidance.
Revenue rose to $402 million, including $5 million from DroneDeploy, which Procore acquired in September. Excluding the acquisition, revenue was $397 million, up 17.1% from a year earlier and $13 million above the high end of the company’s guidance, CFO Rachel Pyles said.
“Revenue outperformance was driven primarily by stronger bookings and the consistency with which they landed throughout the quarter,” Pyles said. She added that improved execution on large deals was the biggest contributor to booking strength.
Margins Expand as International Revenue Grows
Procore reported non-GAAP operating income of $94.4 million and a non-GAAP operating margin of 23.5%, up approximately 620 basis points from a year earlier. The margin included what Pyles described as modest dilution from DroneDeploy.
Free cash flow was $73 million, or 18.1% of revenue, including approximately $19 million in one-time cash costs paid at the acquisition’s closing. Excluding those costs, free cash flow was $92 million, up 36% year over year.
International revenue grew 30%, or 26% on a constant-currency basis. President and CEO Ajei Gopal pointed to a product developed for the U.K., Ireland and European markets, as well as local sales efforts, as factors behind international growth.
Current remaining performance obligations, or CRPO, grew 22.6% year over year excluding DroneDeploy, an acceleration of approximately 70 basis points from the second quarter. Including DroneDeploy, CRPO growth was 28.9%. Pyles said most of the organic increase came from underlying bookings, though average contract duration also rose.
Procore Raises Its Outlook
For the fourth quarter, Procore expects revenue of $420 million to $422 million, including approximately $19 million from DroneDeploy. Excluding that contribution, the range is $401 million to $403 million. The company expects a reported non-GAAP operating margin of 15.5% to 16%.
For the full year, Procore raised its reported revenue forecast to $1.557 billion to $1.559 billion, including approximately $24 million from DroneDeploy. Excluding the acquisition, the high end of the forecast increased by approximately $21 million.
The company also raised its full-year non-GAAP operating margin outlook by 50 basis points to a range of 19% to 19.5%, including dilution from DroneDeploy. It maintained its free cash flow margin forecast of 19.5% excluding one-time acquisition costs, or 18% after those costs.
Procore reiterated its preliminary 2027 non-GAAP operating margin target of 25%. Pyles said the company expects to continue investing while gaining operating leverage as revenue grows, and plans to introduce its 2027 revenue growth outlook with fourth-quarter results.
DroneDeploy and AI Products in Focus
Procore completed its $845 million cash acquisition of DroneDeploy on Sept. 9. Gopal said integration work is underway to connect the companies’ data and bring DroneDeploy’s AI agents into Procore AI. The companies shared approximately 600 customers at the time of the acquisition, providing cross-selling opportunities, he said.
Procore’s AI-powered “digital coworkers” became generally available in the third quarter. One product, the Submittal Review Agent, checks construction submittals against specifications and contracts, flags deviations and drafts responses. Gopal said adoption remains early and did not provide customer adoption figures.
The company also introduced Procore AI Go, a voice-first mobile app in beta that can be used hands-free with Meta’s AI glasses. Procore said it is expanding its digital twin work with NVIDIA to projects beyond AI data centers and partnering with IBM to move asset data from construction sites into IBM Maximo.
Gopal said large contractors generally have substantial backlogs but face labor constraints. He described the broader construction environment as largely unchanged from the previous quarter and said Procore’s exposure to data centers was roughly in line with the overall market.
About Procore Technologies (NYSE:PCOR)
Procore Technologies, Inc provides cloud-based construction management software through its Procore platform. The company’s technology is designed to connect owners, general and specialty contractors, architects, engineers and other construction professionals throughout the project lifecycle.
Procore’s products and services support preconstruction planning, project management, financial management, quality and safety programs, workforce management, construction intelligence and collaboration.
