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MARKETS LIVE BLOG:

STOCKS SLIP AS WAIT FOR NVIDIA EARNINGS NEARS END

Target issues weak forecast as shoppers pull back on spending; shares tumble

Procore Technologies Inc (PCOR) Q1 2024 Earnings: Surpasses Revenue Estimates and Delivers ...

GuruFocus Research
·3 min read

  • Revenue: Reported at $269 million, up 26% year-over-year, surpassing the estimate of $263.15 million.

  • Net Loss: Recorded a net loss of $10.97 million, an improvement from a net loss of $63.45 million in the previous year.

  • Earnings Per Share: Reported a loss of $0.08 per share, an improvement over the prior year's loss of $0.45 per share.

  • Gross Margin: GAAP gross margin was 83%, with a non-GAAP gross margin of 86%.

  • Operating Cash Flow: Operating cash inflow of $69 million for the quarter.

  • Free Cash Flow: Free cash inflow reported at $58 million for the quarter.

  • Customer Growth: Added 231 net new organic customers, ending the quarter with a total of 16,598 organic customers.

On May 1, 2024, Procore Technologies Inc (NYSE:PCOR), a leader in cloud-based construction management software, announced its first-quarter financial results, revealing a significant revenue increase and robust margin performance. The details were disclosed in their latest 8-K filing.

Company Overview

Procore Technologies Inc specializes in providing innovative software solutions for the construction industry, enhancing project efficiency and collaboration through its comprehensive platform. The company offers a suite of services including Project Financials, Invoice Management, and Analytics, all designed to streamline construction management processes.

Q1 2024 Financial Performance

For Q1 2024, Procore reported a revenue of $269 million, a 26% increase from the previous year, surpassing the estimated $263.15 million. This growth highlights the company's expanding influence and adoption in the construction sector. The reported GAAP gross margin stood at 83%, with a non-GAAP gross margin of 86%, reflecting high operational efficiency. Despite a GAAP operating margin of -7%, the non-GAAP operating margin was a positive 14%, indicating strong underlying profitability when excluding non-recurring costs.

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The company also reported a healthy operating cash inflow of $69 million and a free cash inflow of $58 million for the quarter, underscoring its solid cash generation capabilities. These figures are crucial as they demonstrate Procore's ability to sustain its operations and invest in future growth without relying solely on external financing.

Strategic Highlights and Future Guidance

Procore's strategic initiatives have borne fruit, as evidenced by a gross revenue retention rate of 95% and the addition of 231 net new organic customers. The company now serves 16,598 organic customers globally. Looking ahead to Q2, Procore expects revenue between $274 million and $276 million, projecting a year-over-year growth of 20% to 21%. For the full year of 2024, revenue is anticipated to be in the range of $1,140 million to $1,144 million, with a non-GAAP operating margin between 9% and 10%.

Financial Statements Highlights

The balance sheet remains robust with $427.6 million in cash and cash equivalents as of March 31, 2024, providing the company with a strong liquidity position to support ongoing and future initiatives. Total assets stood at $1.88 billion, with a slight decrease in total liabilities from the previous quarter, contributing to a healthy overall financial posture.

However, Procore reported a net loss of $10.96 million for the quarter, or -$0.08 per share, which, while an improvement from the previous year's loss of $63.45 million or -$0.45 per share, indicates ongoing challenges in achieving net profitability.

Conclusion and Analyst Perspectives

Procore's Q1 2024 performance reflects a company that is growing its top line robustly and managing its margins effectively amidst its expansion efforts. The increase in customer base and retention rates suggests strong product-market fit and customer satisfaction. However, the path to net profitability remains a key focus area. Investors and stakeholders will likely watch closely how Procore balances growth investments with profitability improvements in upcoming quarters.

For detailed financial figures and further information, refer to Procore's full earnings release and financial statements.

Explore the complete 8-K earnings release (here) from Procore Technologies Inc for further details.

This article first appeared on GuruFocus.