Procore Technologies (PCOR) Barclays 22nd Annual Global Technology Conference 2024 summary

Go-to-market strategy changes

• Transitioned to a general manager model for greater regional autonomy and customer proximity, with infrastructure and leadership largely in place by year-end.

• Introduced product and technical specialists to better engage customers and stakeholders across all segments and geographies.

• Net addition of about 200 go-to-market resources, including generalist and specialist AEs, to drive cross-sell and customer value.

• Early stages of exploring partner and reseller channels, especially for international expansion and professional services.

• Changes are designed to prepare for an anticipated upswing in demand, aiming for higher productivity and efficiency in 2025 and beyond.

Financial outlook and profitability

• Early guidance for 2025 is 11% revenue growth and a 13% non-GAAP operating margin, a 200 bps improvement over 2024.

• Margin expansion is supported by efficiency gains in sales, marketing, R&D, and global resource allocation.

• Free cash flow per share is the primary long-term metric, with midterm and long-term targets of 25% and 40%, respectively.

• Productivity improvements from go-to-market changes are expected to reduce resource needs in 2026, benefiting both top line and margins.

• Capital allocation prioritizes efficient organic growth, selective M&A, and share buybacks to maximize free cash flow per share.

Procore Pay and product integration

• Procore Pay is in early stages, with positive customer feedback but not expected to scale or impact financials meaningfully until 2026.

• Adoption involves a gradual ramp as customers test on select projects before broader rollout.

• The value of Procore Pay lies in its integration with lien waivers, project financials, and the broader platform, not as a standalone product.

• Revenue from Procore Pay will be recognized on a net basis, with minimal short- or medium-term margin impact.

• Customer demand is for integrated solutions to avoid multiple software platforms, driving the bundling of financial management modules.