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What changed in PROCORE TECHNOLOGIES, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PROCORE TECHNOLOGIES, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+521 added−481 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-26)

Top changes in PROCORE TECHNOLOGIES, INC.'s 2024 10-K

521 paragraphs added · 481 removed · 364 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

67 edited+32 added−77 removed37 unchanged
Biggest changeNot only is this information crucial for ongoing projects, but it is also necessary for long-term asset management, as the underlying data allows for more efficient, effective, and predictive maintenance. General contractors General contractors operate under immense pressure, with little room for error, as they often manage their businesses with small profit margins.
Biggest changeIt is critical for owners’ bottom lines that they remain informed of what work has been completed, when it was completed, and what specifically was built or installed. Not only is this information crucial for ongoing projects, but it is also necessary for long-term asset management, as the underlying data allows for more efficient, effective, and predictive maintenance.
Thereafter, collaborators have an incentive to become customers so that they can manage their complete portfolio of projects on our platform, use our products to improve their business processes, and maintain ownership of project data. • Products.
Thereafter, collaborators have an incentive to become customers so that they can manage their complete portfolio of projects on our platform, use our products to improve their business processes, and maintain ownership of project data.
Such new products and services may allow us to attract new customers as well as expand existing customer relationships. • Increase and diversify spend within our customer base.
Such new products and services may allow us to attract new customers as well as expand existing customer relationships. • Increase and diversify spend within our existing customer base.
For a description of how we calculate ARR, see the sub-heading titled “Acquiring New Customers and Retaining and Expanding Existing Customers’ Use of Our Platform,” under the heading “Certain Factors Affecting Our Performance” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our success in building our customer base, expanding usage for existing customers, and helping digitize the industry has allowed us to achieve significant growth.
For a description of how we calculate ARR, see the sub-heading titled “Acquiring New Customers and Retaining and Expanding Existing Customers’ Use of Our Platform,” under the heading “Certain Factors Affecting Our Performance” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our success in building our customer base, expanding usage and value for existing customers, and helping digitize the industry has allowed us to achieve significant growth.
However, specialty contractors often utilize disparate point software solutions or antiquated documentation systems, such as pen and paper and even physical whiteboards, which means they lack a consistent way to track labor production rates, monitor safety compliance and quality of work, ensure they are working off the latest set of plans and schedules, or document work completed as part of the invoicing process.
However, specialty contractors often utilize disparate point software solutions or antiquated documentation systems, such as pen and paper or physical whiteboards, which means they lack a consistent way to track labor production rates, monitor safety compliance and quality of work, ensure they are working off the latest set of plans and schedules, or document work completed as part of the invoicing process.
We believe our expertise in construction and close relationship with our customers and collaborators enable us to deliver easy-to-use and feature-rich products, specifically tailored to solve the problems of the industry’s key stakeholders and help them manage their businesses more effectively. Our products are offered à la carte and are integrated into our cloud-based platform. • Data.
We believe our expertise in construction and close relationship with our customers and collaborators enable us to deliver easy-to-use and feature-rich products, specifically tailored to solve the problems of the industry’s key stakeholders and help them manage their businesses more effectively. Our products are offered à la carte and are integrated into our cloud-based platform.
We plan to continue to expand our sales and marketing efforts to drive awareness of our products and services and grow our customer base, focusing on owners, general contractors, and specialty contractors. The portion of our current user base made up of collaborators invited to participate in our customers’ projects represents a significant opportunity to increase our revenue.
We plan to continue to expand our sales and marketing efforts to drive awareness of our products, services, and platform, and grow our customer base, focusing on owners, general contractors, and specialty contractors. The portion of our current user base made up of collaborators invited to participate in our customers’ projects represents a significant opportunity to increase our revenue.
We focus exclusively on connecting and empowering the construction industry’s key stakeholders, such as owners, general contractors, specialty contractors, architects, and engineers, to collaborate and access our capabilities from any location on any internet-connected device.
We focus exclusively on connecting and empowering the construction industry’s key stakeholders, such as owners, general contractors, and specialty contractors, to collaborate and access our capabilities from any location on any internet-connected device.
Collaborators have access to relevant project information and product features for the duration of their involvement in a project and are incentivized to become customers, as collaborators do not control what information they get access to, may not be able to access project information after a job is complete, and cannot run their complete portfolio of projects on our platform.
Collaborators have access to relevant project information and product features for the duration of their involvement in a project and are incentivized to become customers, as collaborators do not control what information they get access to, may not be able to access project information after a job is complete, and cannot run their complete portfolio of projects on our 5 Table of Contents platform.
Given mistakes not only impact the progress of the project but also expose workers to safety risks, the need for mobile collaboration solutions and real-time access to instructions, designs, documentation, and reporting is becoming increasingly critical for managing and optimizing a dispersed workforce. • Stakeholder dynamics are complex.
Given mistakes not only impact the progress of the project but also expose workers to safety risks, the need for mobile collaboration solutions and timely access to instructions, designs, documentation, and reporting is becoming increasingly critical for managing and optimizing a dispersed workforce. • Stakeholder dynamics are complex.
Once a project is completed, owners are responsible for operating, leasing, or selling the structure, or outsourcing such processes to a third party. • General contractors. General contractors coordinate the construction project and fulfill the demands of owners while simultaneously maintaining oversight and responsibility for specialty contractors and other vendors. • Specialty contractors.
Once a project is 6 Table of Contents completed, owners are responsible for operating, leasing, or selling the structure, or outsourcing such processes to a third party. • General contractors. General contractors coordinate the construction project and fulfill the demands of owners while simultaneously maintaining oversight and responsibility for specialty contractors and other vendors. • Specialty contractors.
We have developed a cloud-based platform to allow general contractors to manage their projects from a smart device in their hand, with the goal of facilitating exceptional teamwork, reducing costly rework, mitigating risk, and improving profit margins.
We have developed a cloud-based platform to allow general 9 Table of Contents contractors to manage their projects from a smart device in their hand, with the goal of facilitating exceptional teamwork, reducing costly rework, mitigating risk, and improving profit margins.
We encourage investors and others to review the information we make public in these locations, as such information could be deemed to be material information. 17 Table of Contents
We encourage investors and others to review the information we make public in these locations, as such information could be deemed to be material information. 14 Table of Contents
Our customers range from small businesses managing a few million dollars of annual construction volume to global enterprises managing billions of dollars of annual construction volume. Our core customers are owners, general contractors, and specialty contractors operating across the commercial, residential, industrial, and infrastructure segments of the construction industry.
Our customers range from small businesses managing a few million dollars of annual construction volume to global enterprises managing billions of dollars of annual construction volume. Our core customers are owners, general contractors, and specialty contractors operating across the residential and non-residential segments of the construction industry.
Our platform is modernizing and digitizing construction management by enabling real-time access to critical project information, simplifying complex workflows, and facilitating seamless communication among key stakeholders, all of which we believe positions us to serve as the system of record for the construction industry.
Our platform is modernizing and digitizing construction management by enabling timely access to critical project information, simplifying complex workflows, and facilitating seamless communication among relevant stakeholders, all of which we believe positions us to serve as the system of record for the construction industry.
We believe that our ability to deliver products that address our customers’ specific needs, including by enabling streamlined communication and real-time access to data, is essential to driving increased productivity and efficiency, reducing rework and costly delays, improving safety and compliance, and enhancing financial transparency and accountability.
We believe that our ability to deliver products and platform capabilities that address our customers’ specific needs, including by enabling streamlined communication and timely access to data, is essential to driving increased productivity and efficiency, reducing rework and costly delays, improving safety and compliance, and enhancing financial transparency and accountability.
We plan to hire sales and customer experience teams and expand our presence in certain countries where we already operate. • Extend our industry connectivity and our position as a trusted brand.
We plan to hire sales and customer experience teams and expand our presence in certain countries where we already operate, as well as pursue a presence in new geographies. • Extend our industry connectivity and our position as a trusted brand.
Our Intellectual Property We rely on trademarks, patents, copyrights, trade secrets, license agreements, intellectual property assignment agreements, confidentiality procedures, non-disclosure agreements, and employee invention assignment agreements to establish and protect our proprietary rights. As of December 31, 2023, we had 56 issued patents in the U.S. and 73 pending patent applications in the U.S.
Our Intellectual Property We rely on trademarks, patents, copyrights, trade secrets, license agreements, intellectual property assignment agreements, confidentiality procedures, non-disclosure agreements, and employee invention assignment agreements to establish and protect our proprietary rights. As of December 31, 2024, we had 80 issued patents in the U.S. and 93 pending patent applications in the U.S.
Customers that contributed more than $100,000 of ARR represented 60%, 57%, and 52% of total ARR in each of the annual periods ending December 31, 2023, 2022, and 2021, respectively.
Customers that contributed more than $100,000 of ARR represented 63%, 60%, and 57% of total ARR in each of the annual periods ending December 31, 2024, 2023, and 2022, respectively.
Our five integrated product categories—Preconstruction, Project Execution, Workforce Management, Financial Management, and Construction Intelligence—automate workflows, provide real-time visibility, offer advanced analytics, and support collaboration across key stages of the construction project lifecycle. Each of our products can be accessed from the office or the jobsite on computers, smartphones, and tablets, enabling users to work wherever the job requires.
Our four integrated product categories—Preconstruction, Project Execution, Resource Management, and Financial Management—automate workflows, provide timely visibility, offer advanced analytics, and support collaboration across key stages of the construction project lifecycle. Each of our products can be accessed from the office or the jobsite on computers, smartphones, and tablets, enabling users to work wherever the job requires.
We plan to drive additional spend from existing customers by capturing more projects, selling them additional existing products and services, and offering new products and services that address additional customer needs. • Expand internationally. We believe there is a global need for construction management software and that the global market is currently underpenetrated, representing a significant opportunity.
We plan to drive additional spend from existing customers by upselling construction volume, cross-selling additional existing products and services, and offering new products and services that address additional customer needs. • Expand internationally. We believe there is a global need for construction management software and that the global market is currently underpenetrated, representing a significant opportunity.
Completing a project safely, on time, and within budget requires effective collaboration between stakeholders across workstreams, sharing information in a timely and effective manner, and navigating increasing contractual and regulatory complexity. Key stakeholders in the construction ecosystem are: • Owners.
Completing a project safely, on time, and within budget requires effective collaboration between stakeholders across workstreams, sharing information in a timely and effective manner, and navigating increasing contractual and regulatory complexity. Our customers include key stakeholders in the construction ecosystem, such as: • Owners.
Our Procore Analytics product gives customers the ability to generate deep insights across data aggregated from across all projects, various products, and integrated accounting software. Customers can track trends and conduct analysis using pre-built reports, all of which are customizable to suit individual customer needs.
Our platform gives customers the ability to generate deep insights from aggregated data across all projects, various products, and integrated accounting software. Customers can track trends and conduct analysis using pre-built reports, all of which are customizable to suit individual customer needs. • Building Information Modeling (“BIM”).
Additionally, we had 18 pending patent applications in foreign countries, as well as 10 pending international patent applications that preserve our right to file additional foreign patent applications in the future, as of such date. Our issued patents in the U.S. will expire between 2034 and 2042.
Additionally, we had 3 issued patents in foreign countries, 28 pending patent applications in foreign countries, as well as 6 pending international patent applications that preserve our right to file additional foreign patent applications in the future, as of such date. Our issued patents in the U.S. will expire between 2034 and 2043.
The number of customers that contributed more than $1,000,000 of ARR was 62, 47, and 30 as of December 31, 2023, 2022, and 2021, respectively, reflecting year-over-year growth rates of 32% in 2023 and 57% in 2022.
The number of customers that contributed more than $1,000,000 of ARR was 86, 62, and 47 as of December 31, 2024, 2023, and 2022, respectively, reflecting year-over-year growth rates of 39% in 2024 and 32% in 2023.
Our open application programming interfaces (“APIs”) and our application marketplace (“App Marketplace”) allow customers to integrate our products with their internal systems.
Platform capabilities like our open application programming interfaces and our application marketplace (“App Marketplace”) allow customers to integrate our products with their internal systems.
Many of the point solutions these vendors provide integrate with our platform and are available in our App Marketplace. • in-house specialized tools or processes built by or for existing or prospective customers. Our People and Our Values Our people are our most vital asset in building and growing our business.
Many of the point solutions these vendors provide integrate with our platform and are available in our App Marketplace. • in-house specialized tools or processes built by or for existing or prospective customers. 12 Table of Contents Our Employees and Human Capital Resources People are our most vital asset in building and growing our business.
Our products feature intuitive, easy-to-use tools that allow specialty contractors to leverage accurate, real-time information, reduce unnecessary data entry, visualize productivity trends, document completed work, and get paid the correct amounts faster.
Our platform features intuitive, easy-to-use tools that allow specialty contractors to leverage accurate, timely information, reduce unnecessary data entry, visualize productivity trends, document completed work, and get paid the correct amounts faster.
Our Platform Our platform is built to be modern, intuitive, and open with a modular and extensible architecture that not only includes the breadth and depth of functionality of our own products, but also integrates with third-party applications and our customers’ own customized applications.
Our Platform Our platform is built to be modern, intuitive, and open, with a modular and extensible architecture that not only includes the breadth and depth of functionality of our own products, but also integrates with third-party applications and our customers’ own customized applications. We offer a broad set of product solutions that we primarily monetize through subscriptions.
We focus our marketing efforts on product innovation and value, domain expertise, and community-building. We reach potential customers and generate leads for our sales team through a combination of content marketing, public relations, advertising, sponsorships, digital marketing, partner marketing, social media, community initiatives, and events.
Our construction volume-based pricing model and number of product offerings create multiple opportunities for expansion. We focus our marketing efforts on product innovation and value, domain expertise, and community-building. We reach potential customers and generate leads for our sales team through a combination of content marketing, public relations, advertising, sponsorships, digital marketing, partner marketing, social media, community initiatives, and events.
Our business model is designed to encourage rapid, widespread adoption of our products by allowing for unlimited users, meaning we do not charge a per-seat or per-user fee. Customers can invite all project participants to engage with our platform as part of a project team.
Our business model is designed to encourage rapid, widespread adoption of our products by allowing for unlimited users, meaning we do not charge a per-seat or per-user fee. Customers can invite all project participants, including owners, general contractors, specialty contractors, architects, and engineers, to engage with our platform as part of a project team without incurring additional fees.
The construction process relies on coordination among highly fragmented and specialized groups, including key stakeholders such as owners, general contractors, specialty contractors, architects, and engineers. These stakeholders engage in financing, budgeting, designing, building, and maintaining commercial, residential, industrial, and infrastructure projects while navigating varying responsibilities, risk profiles, and motives.
The construction process relies on coordination among highly fragmented and specialized groups. Key stakeholders engage in financing, budgeting, designing, building, and maintaining commercial, residential, industrial, and infrastructure projects while navigating varying responsibilities, risk profiles, and motives.
We generated revenue of $514.8 million in 2021, $720.2 million in 2022, and $950.0 million in 2023, representing year-over-year growth of 40% in 2022 and 32% in 2023. We had net losses of $265.2 million in 2021, $286.9 million in 2022, and $189.7 million in 2023. Our Industry The construction ecosystem is highly fragmented and specialized.
We generated revenue of $1,151.7 million in 2024, $950.0 million in 2023, and $720.2 million in 2022, representing year-over-year growth of 21% in 2024 and 32% in 2023. We had net losses of $106.0 million in 2024, $189.7 million in 2023, and $286.9 million in 2022. Our Industry We serve the construction industry ecosystem, which is highly fragmented and specialized.
We plan to continue to invest in technology innovation and product development, and we believe that our customers will benefit from new features and products on our centralized platform. • Acquire new customers. We believe the market for construction technology and collaboration tools is in its early phases of adoption.
We plan to continue to invest in technology innovation, product development, and platform capabilities. • Acquire new customers. We believe the market for construction technology and collaboration tools is in its early phases of adoption.
Procore BIM enables all users in the field to view and collaborate on 3-D models, which allow project teams to more efficiently plan and construct their projects. Field workers can access project models in real-time, with an easy-to-use navigation interface that ties 3-D models to drawings.
Our platform enables all users in the field to view and collaborate on 3D models, which allows project teams to more efficiently plan and construct their projects. Field workers can access project models quickly, with an easy-to-use navigation interface that ties 3D models to drawings.
Our teams partner with our customers and collaborators to understand their needs through focus groups at our innovation labs, trade shows, and conferences, and with customers and collaborators on the jobsite.
Our teams partner with our customers and collaborators to understand their needs through focus groups at our innovation labs, trade shows, and conferences, and with customers and collaborators on the jobsite. Our Competition The market for construction management software is competitive and rapidly evolving.
Our Core Customer Stakeholders and the Benefits Provided by Our Products We serve customers ranging from small businesses managing a few million dollars of annual construction volume to global enterprises managing billions of dollars of annual construction volume.
Our Core Customer Stakeholders and the Benefits Provided by Our Platform We serve customers ranging from small businesses managing a few million dollars of annual construction volume to global enterprises managing billions of dollars of annual construction volume. Our core customers are owners, general contractors, and specialty contractors operating across the residential and non-residential segments of the construction industry.
As a result of our focus on acquiring new customers and expansion of existing customers’ use of our platform, we have also seen an increase in the number of customers that contributed more than $100,000 of annual recurring revenue (“ARR”), which was 2,008, 1,576, and 1,111 as of December 31, 2023, 2022, and 2021, respectively, reflecting year-over-year growth rates of 27% in 2023 and 42% in 2022.
Despite macroeconomic challenges, we have seen an increase in the number of customers that contributed more than $100,000 of annual recurring revenue (“ARR”), which was 2,333, 2,008, and 1,576 as of December 31, 2024, 2023, and 2022, respectively, reflecting year-over-year growth rates of 16% in 2024 and 27% in 2023.
Specialty contractors For specialty contractors to be successful, it is imperative that they are able to effectively track and manage their crews, materials, and equipment. Specialty contractors have to get the right people to the right jobsite at the right time with the correct materials and equipment.
Specialty contractors For specialty contractors to be successful, it is imperative that they are able to effectively track and manage their crews, materials, equipment, and cash flow.
We intend to efficiently drive new customer acquisitions by continuing to invest across our sales and marketing engine to engage our prospective customers, increase brand awareness, and drive adoption of our products, services, and platform.
We drive new customer acquisitions by investing across our sales and marketing engine to engage prospective customers, increase brand awareness, and drive adoption of our products, services, and platform. We drive retention of existing customers and expansion of their use of our products, services, and platform by focusing on our customers’ success.
Specialty contractors, commonly referred to as subcontractors, are hired by general contractors for their specialized skills, such as mechanical, electrical, plumbing, roofing, or concrete trades, and perform the vast majority of construction work, including sourcing materials. • Architects and engineers. Architects and engineers work together to develop building plans and designs, collaborating directly with owners and general contractors.
Specialty contractors, commonly referred to as subcontractors, are hired by general contractors for their specialized skills, such as mechanical, electrical, plumbing, roofing, or concrete trades, and perform the vast majority of construction work, including sourcing materials. The construction industry has four defining characteristics: • Construction is a custom business.
Sales and Marketing We primarily sell subscriptions to access our products through our direct sales team, which is specialized by stakeholder region, size, and type, and is serviced regionally by offices in the U.S., Canada, Australia, England, the United Arab Emirates (“UAE”), France, and Ireland, and by our focused sales and marketing efforts in Germany, where we do not maintain an office location.
Sales and Marketing We primarily sell subscriptions to access our products through our direct sales team, which is specialized by geography, followed by size and type of stakeholder, and is serviced regionally by offices in the U.S., Canada, Australia, England, the United Arab Emirates (“UAE”), and Ireland. As a result of our international efforts, we support multiple languages and currencies.
In order to create a centralized hub for construction project information, we have developed an open and extensible platform that connects our customers’ business applications, people, devices, and data. We have also developed highly configurable forms, data fields, and workflows, enabling our customers to centralize their data on our platform.
In order to create a centralized hub for construction project information, we have developed an extensible platform that connects our customers’ business applications, people, devices, and data. Our platform capabilities include: • Artificial Intelligence (“AI”).
Our existing integrations with App Marketplace partners like these streamline the integration of their solutions into our platform post-acquisition and allows us to quickly deliver a seamless customer experience across financial and project management workstreams. Our Products Our platform features five integrated product categories, allowing data and workflows to transparently cross the phases of a construction project.
Our existing integrations with App Marketplace partners like these streamline the integration of their solutions into our platform post-acquisition and allow us to quickly deliver a seamless customer experience across our platform.
We believe our unique access to data through our platform will allow our team to assess construction risk faster and more accurately than traditional methods, and our goal is to use such data to scale and automate our product offerings.
We believe our unique access to data through our platform will allow our team to assess construction risk faster and more accurately than traditional methods, and our goal is to use such data to scale and automate our product offerings. 10 Table of Contents Our Growth Strategy We intend to leverage our existing products and industry presence to establish our products, services, and platform as the industry standard in construction, both domestically and internationally.
We believe that the investments we have made in research and development to build our technology have been core differentiators of our products 11 Table of Contents and platform.
The key elements of our strategy to accomplish these objectives are as follows: • Maintain and advance our technology leadership. We believe that the investments we have made in research and development to build our technology have been core differentiators of our products and platform.
Owners need the ability to plan capital expenditures, accurately estimate project costs, source high-quality general contractors to manage construction work, and track project progress with a high degree of visibility. By reducing friction that hinders collaboration, our products can help owners track cost updates, project status, and change orders.
Owners Owners need the ability to plan capital expenditures, accurately estimate project costs, source high-quality general contractors to manage construction work, and track project progress with a high degree of visibility. We help owners save significant time and money by providing financial and operational visibility into their projects.
Where technology has been adopted, it has generally had a limited impact because of a lack of modern, cloud-based tools, limited breadth and depth of functionality, or a lack of integrations between point solutions. We believe our competitors primarily exist across the following four categories: • aggregated construction management tools , including products offered by Oracle, Autodesk, and Trimble.
Where incumbent technology has been adopted, it has generally had a limited impact because of a lack of modern, cloud-based tools, limited breadth and depth of functionality, or a lack of integrations between point solutions.
Inadequate information flows, such as not providing specialty contractors with the latest set of plans, can result in costly project delays, overages, and unfulfilled expectations. General contractors are also compelled to perform duplicate data entry in disparate systems and are accustomed to dealing with invoicing errors, information silos, and disconnected point solutions.
General contractors are also compelled to perform duplicate data entry in disparate systems and are accustomed to dealing with invoicing errors, information silos, and disconnected point solutions.
By default, we provide customers with 9 Table of Contents several role-based permission templates, and these permissions are configurable down to the tool access level by user. • APIs.
In addition, our platform provides comprehensive user permission functionality. Permissions define who has access to certain project and company-level information. By default, we provide customers with several role-based permission templates, and these permissions are configurable down to the tool access level by user. • Maps.
Procore App Marketplace Our platform gives customers the freedom to connect with third-party integrations currently in our App Marketplace. Our App Marketplace extends the functionality of our existing products, connecting critical business workflows and processes, and enabling customers to maintain a single system of record while being able to leverage software solutions providing an array of functionality.
Our Ecosystem platform capabilities enable our App Marketplace, which helps customers enhance their use of our products with third-party integrations, connecting critical business workflows and processes, and allowing customers to maintain a single system of record while leveraging software solutions that provide an array of functionality.
As of December 31, 2023, 2022, and 2021, the number of customers on our platform was 16,367, 14,488, and 12,193, respectively, reflecting year-over-year growth rates of 13% in 2023 and 19% in 2022.
As of December 31, 2024, 2023, and 2022, the number of customers on our platform was 17,088, 16,367, and 14,488, respectively, reflecting year-over-year growth rates of 4% in 2024 and 13% in 2023. Our total customer count is heavily influenced by the number of small- and medium-sized business (“SMB”) customers we add in a given period.
Customers that contributed more than $1,000,000 of ARR represented 14%, 12%, and 10% of total ARR in each of the annual periods ending December 31, 2023, 2022, and 2021, respectively. All aforementioned customer counts exclude Express Lien, Inc. (d/b/a Levelset) (“Levelset”) and Esticom, Inc. (“Esticom”) customers that do not have standard Procore annual contracts.
Customers that contributed more than $1,000,000 of ARR represented 17%, 14%, and 12% of total ARR in each of the annual periods ending December 31, 2024, 2023, and 2022, respectively.
For additional information, see the section titled “Risk Factors—Risks Related to Our Intellectual Property—Our failure to protect our intellectual property rights and proprietary information could diminish our brand and other intangible assets and otherwise materially adversely affect our business, financial condition, results of operations, and prospects.” 16 Table of Contents Corporate Information We were incorporated as Butterfly Lane, Inc. in California in January 2002, and changed our name to Procore Technologies, Inc. in May 2002.
For additional information, see the section titled “Risk Factors—Risks Related to Our Intellectual Property—Our failure to protect our intellectual property rights and proprietary information could diminish our brand and other intangible assets and otherwise materially adversely affect our business, financial condition, results of operations, and prospects.” Government Regulations We are, and may become, subject to a number of U.S. federal and state, as well as numerous foreign, laws and regulations that involve matters important to our business, including in connection with our pursuit of Federal Risk and Authorization Management Program (“FedRAMP”) authorization.
An event as small as a delayed inspection that adjusts worker schedules, or as significant as discovering an unexpected boulder during excavation that requires special equipment to remove, can trigger costly changes to a project’s schedule and require timely communication to teams on the ground to minimize or avoid mistakes.
A modification can trigger costly changes to a project’s schedule and require timely communication to teams on the ground to minimize or avoid mistakes.
Our products are designed to help reduce financial and operational risk across key stakeholders before construction begins. • Project Execution. Construction teams struggle with poor communication between the field and office, time-consuming processes, and getting updated and accurate information to all project stakeholders.
Our products are designed to help reduce financial and operational risk across key stakeholders before construction begins. 7 Table of Contents • Project Execution .
These dynamics lead to risky work environments, rework, training gaps, and strained relationships, often resulting in millions of dollars in cost overruns and litigation. Our Project Execution products connect entire construction project teams by ensuring project information is aggregated in a cloud-based platform, available to all project participants, and accurate so that work on the jobsite is completed correctly.
Our Project Execution products, including Project Management, Quality, Safety, Field Scheduling, and Closeout, connect construction project teams by helping to ensure project information is aggregated in an up-to-date cloud-based platform, available to all project participants, and accurate so that work on the jobsite is completed correctly and safely.
Once collaborators have used our platform, they may potentially become customers and evangelize Procore on future projects. 5 Table of Contents We are highly focused on continuing to acquire new customers and expand existing customers’ use of our platform to support our long-term growth.
Once collaborators have used our platform, they may potentially become customers and evangelize Procore on future projects.
In addition, we plan to continue to invest in growing our brand and expanding on our key community and user initiatives. • Pursue targeted acquisitions. We have made, and may in the future make, select acquisitions to add innovative features and functionality to our platform, accelerate our end-to-end cloud-based platform strategy, and bring talent to our team.
We have made, and may in the future make, select acquisitions to add innovative features and functionality to our platform, accelerate our end-to-end cloud-based platform strategy, and bring talent to our team. Our App Marketplace provides us with visibility into our customers’ interactions with many third-party integrations and provides a pipeline for potential future acquisitions.
Our Workforce Management products help customers address these problems by allowing contractors to better schedule, track, and forecast labor productivity, improve time management, communicate more efficiently with their workforces, and better manage profitability on construction projects. By using our products, customers are also creating detailed productivity records that can be referenced during the bidding process. • Financial Management.
Our Resource Management products, including Field Productivity, Workforce Planning, Equipment Management, and Materials Management, help customers schedule, track, and forecast workforce and equipment productivity, improve time management, communicate more efficiently with their workforces, optimize procurement and movement of materials, and better manage profitability on construction projects.
Users have the ability to log critical information, track project progress, and escalate issues for approvals from the correct team members. Project Management is designed to increase transparency and accountability across the entire project team, reducing litigation risk and the shifting of responsibilities. • Quality & Safety.
These products enable collaboration, information transmission and storage, and safety regulation compliance for teams on the jobsite and in the back office. Users have the ability to log critical information, track project progress, and escalate issues for approvals from the correct team members.
The process is often manual, disorganized, time-consuming, and resource-intensive, requiring the collection of extensive documentation and multi-faceted bids that typically include sensitive information. Our Preconstruction products facilitate collaboration between internal and external stakeholders during the planning, budgeting, estimating, bidding, and partner selection phase of a construction project.
Our Preconstruction products, including Estimating, Bid Management, 2D/3D Takeoff, Design Coordination, and Prequalification, facilitate collaboration between internal and external stakeholders during the takeoff, planning, budgeting, estimating, bidding, design, and partner selection phases of a construction project.
We are also proud to have been able to maintain our culture, which is based on three core values: • Openness.
We are also proud to have been able to maintain our culture as our business has grown, which is based on three core values: openness, ownership, and optimism. We believe that these three core values are foundational to building a high-performing, engaged organization where our employees feel empowered to deliver exceptional results while growing their careers.
Procore Quality & Safety allows field teams to continuously record, monitor, evaluate, and improve procedures in order to maximize compliance with safety regulations and quality specifications. Additionally, the product helps users identify, understand, and proactively resolve the causes of issues and risky behaviors before they result in an injury or accident. • Design Coordination and BIM.
They can also identify, understand, and proactively resolve the causes of issues and risky behaviors before they result in an injury or accident. • Resource Management .
Our App Marketplace provides us with visibility into our customers’ interactions with many third-party integrations. For example, in 2021, we acquired Levelset, a lien rights management solution, and LaborChart, Inc. (“LaborChart”), a labor management solution, both of which were existing App Marketplace partners. We also acquired Unearth Technologies, Inc. (“Unearth”), an existing App Marketplace partner, in 2023.
For example, we acquired Intelliwave Technologies Inc. (“Intelliwave”), a construction materials management company, in 2024, and Unearth Technologies, Inc. (“Unearth”), a geographic information systems asset management platform, in 2023, both of which were existing App Marketplace partners.
Procore Shared Technology Services Our platform includes a number of shared services that underlie our products and enable us to launch new products and extend the capabilities of our existing products. The user directory, reporting, tasks, search, and other components of our platform are examples of the underlying shared services that our customers can use across our products.
Platform Capabilities Our platform features a number of capabilities that underlie our product solutions and enable us to launch new products and services and increase the breadth and depth of our existing products and services. Our broad range of platform capabilities support the diverse needs of the different personas that use our products and platform.
Our core customers are owners, general contractors, and specialty contractors operating across the commercial, residential, industrial, and infrastructure segments of the construction industry. For additional information on these core customers, see “Our Industry” above.
For additional information on these core customers, see “Our Industry” above.
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We intend to expand existing customers’ use of our platform by capturing more projects, which increases annual construction volume, selling additional existing products and services, and offering new products and services that address additional customer needs.
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Although we do not charge a per-seat or per-user fee, multiple participants can be customers on the same project, which allows each of them to retain access to project information for the duration of their subscription and allows us to receive revenue from multiple customers on the same project.
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Typically, architects are 6 Table of Contents responsible for designing the aesthetic look and feel of a structure, while engineers focus on safety and functionality, materials, and structural design. The construction industry has four defining characteristics: • Construction is a custom business.
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We believe that the market for our platform is large, and we are highly focused on our long-term growth.
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For example, a concrete contractor may not be able to pour concrete on a project until the mechanical, electrical, and plumbing (“MEP”) contractors complete their scope of work.
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Our ability to generate revenue, continue to grow our business, and serve the broader needs of the construction industry depends on our ability to efficiently acquire new customers, retain existing customers and expand their use of our products, services, and platform, and maintain or increase the pricing of, and value provided by, our products and services.
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If the MEP contractors fail to complete their tasks as scheduled and that delay is not properly communicated to all affected stakeholders, then not only could the project fall behind schedule but the concrete may still arrive at the jobsite as originally scheduled, become unusable, and need to be disposed of, driving up costs and impacting profit margins.
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Furthermore, SMB customers represent a small portion of our total ARR, whereas Enterprise and Mid Market customers represent the vast majority of our total ARR. As a result, we believe the better metric to assess our business performance is the growth in the number of customers that contributed more than $100,000 of ARR.
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Our Approach We believe that we are well-positioned to extend our leading market position, not only through promoting the rapid adoption of our products, services, and platform, but also through our dedicated efforts to invest in and positively impact the future success of the construction community.
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All aforementioned customer counts exclude customers acquired from business combinations that do not have standard Procore annual contracts.
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We believe that our success is driven by the quality of our products, services, and platform and our strong relationships with our customers and the broader construction industry. Our approach is based on two key elements: • We live and breathe construction.
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We also support and enhance our customers’ use of these product solutions with a comprehensive set of platform capabilities. Product Solutions Our platform includes four integrated product solutions that allow data and workflows to transparently cross the phases of a construction project. Our customers typically purchase subscriptions to access our products on a product-by-product basis.
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Our products, services, and platform are focused on the construction industry, and we build them for the diverse requirements of industry stakeholders. We have deep domain expertise and an understanding of the construction industry’s complex workflows, incentive structures, and the risks each stakeholder faces on a project. We also partner with the industry beyond providing software.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeBecause we recognize revenue from subscriptions to access our products over the term of the subscription, downturns or upturns in new business will not be immediately reflected in our results of operations. We generate substantially all of our revenue from subscriptions to access our products.
Biggest changeIf we are unable to manage the resulting short-term adverse impacts to our business, fail to successfully implement, or realize the full benefits of, our evolved GTM operating model over the long term, or otherwise fail to acquire new customers, retain existing customers, or expand existing customers’ use of our products, services, and platform, our business, financial condition, results of operations, and prospects could be materially adversely affected. 18 Table of Contents Because we recognize revenue from subscriptions to access our products over the term of the subscription, downturns or upturns in new business will not be immediately reflected in our results of operations.
Frequent or persistent interruptions, including those from increased usage, could cause existing or prospective users to believe that our platform is unreliable, leading them to switch to our competitors, which could materially adversely affect our business, financial condition, results of operations, and prospects. Certain of our customer agreements contain specifications regarding the availability and performance of our platform.
Frequent or persistent interruptions, including those from increased usage, could cause existing or prospective users to believe that our platform is unreliable, leading them to switch to competitors, which could materially adversely affect our business, financial condition, results of operations, and prospects. Certain of our customer agreements contain specifications regarding the availability and performance of our platform.
Integrations and products are constantly evolving, and we may not be able to modify our platform to assure its compatibility with such developments. In addition, some of our competitors may be able to disrupt the compatibility of our platform with their integrations, which some of our customers may rely upon.
Integrations and products are constantly evolving, and we may not be able to modify our platform to assure its compatibility with such developments. In addition, some competitors may be able to disrupt the compatibility of our platform with their integrations, which some of our customers may rely upon.
Any of the foregoing could materially adversely affect our business, financial condition, results of operations, and prospects, and could help our competitors develop products and services that are similar to or better than ours.
Any of the foregoing could materially adversely affect our business, financial condition, results of operations, and prospects, and could help competitors develop products and services that are similar to or better than ours.
These laws and regulations, which continue to evolve, cover, among other things, taxation, tariffs, data protection and privacy, data security, data governance, pricing, content, copyrights, distribution, mobile and other communications, advertising practices, electronic contracts, sales procedures, automatic subscription renewals, credit card processing procedures, consumer protection, consumer financial protection, payment regulation, payment processing and settlement services, domestic and cross-border money transmission, foreign currency exchange, anti-money laundering, fraud detection, economic and trade sanctions, the design and operation of websites, and the characteristics and quality of products that are offered online.
These laws and regulations, which continue to evolve, cover, among other things, taxation, tariffs, data protection and privacy, data security, data governance, AI, pricing, content, copyrights, distribution, mobile and other communications, advertising practices, electronic contracts, sales procedures, automatic subscription renewals, credit card processing procedures, consumer protection, consumer financial protection, payment regulation, payment processing and settlement services, domestic and cross-border money transmission, foreign currency exchange, anti-money laundering, fraud detection, economic and trade sanctions, the design and operation of websites, and the characteristics and quality of products that are offered online.
These factors include our ability to do the following: attract new customers and expand sales of subscriptions to our existing customers; increase sales to owners and specialty contractors, as well as monetize additional new stakeholders; develop new products and services, further improve our existing products, services, and platform, and expand our App Marketplace with additional integrations; provide our customers and collaborators with support that meets their needs; invest financial and operational resources to support future growth in our customer, collaborator, and third-party relationships; expand our operations domestically and internationally; and retain and motivate existing personnel, and attract, integrate, and retain new personnel, particularly to our sales and marketing and engineering and product development teams.
These factors include our ability to do the following: attract new customers and retain and expand sales of subscriptions to our existing customers; increase sales to owners and specialty contractors, as well as monetize new stakeholders; develop new products and services, further improve our existing products, services, and platform, and expand our App Marketplace with additional integrations; provide our customers and collaborators with support that meets their needs; invest financial and operational resources to support future growth in our customer, collaborator, and third-party relationships; expand our operations domestically and internationally; and retain and motivate existing personnel, and attract, integrate, and retain new personnel, particularly with respect to our sales and marketing and engineering and product development teams.
This concentration of ownership may have the effect of delaying, deferring, or preventing a change in control, impeding a merger, consolidation, takeover, or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of our business, even if such a transaction would benefit other stockholders.
This concentration of ownership may also have the effect of delaying, deferring, or preventing a change in control, impeding a merger, consolidation, takeover, or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of our business, even if such a transaction would benefit other stockholders.
Many of our competitors have competitive advantages over us, such as better name recognition, longer operating histories, larger marketing budgets, existing or more established relationships, greater third-party integrations, access to larger customer bases, greater financial, technical, pricing, and marketing strategies, and other resources.
Many of our competitors have competitive advantages over us, such as better name recognition, longer operating histories, larger marketing budgets, existing or more established relationships, greater third-party integrations, access to larger customer bases, greater financial, technical, pricing, packaging, and marketing strategies, and other resources.
We expect to evaluate and complete a wide array of potential strategic transactions, including acquisitions of businesses, joint ventures, new technologies, services, products, and other assets, and other strategic investments. Any of these transactions could be material to our business, financial condition, results of operations, and prospects.
We expect to continue to evaluate and complete a wide array of potential strategic transactions, including acquisitions of businesses, joint ventures, new technologies, services, products, and other assets, and other strategic investments. Any of these transactions could be material to our business, financial condition, results of operations, and prospects.
We expect that the requirements of these laws, rules, and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more complex, time-consuming, and costly, and place significant strain on our personnel, systems, and resources.
We expect that the requirements of these laws, rules, and regulations will continue to increase our IT, legal, accounting, and financial compliance costs, make some activities more complex, time-consuming, and costly, and place significant strain on our personnel, systems, and resources.
In particular, the OECD is working on a two-pillar solution to address the tax challenges arising from the digitalization of the economy, commonly referred to as BEPS 2.0, which, if implemented, would make important changes to the international tax system by allocating taxing rights in respect of certain profits of multinational enterprises above a fixed profit margin to the jurisdictions within which they carry on business (subject to certain revenue threshold rules which we do not currently meet but may meet in the future), referred to as the Pillar One proposal, and imposing a minimum effective tax rate on certain multinational enterprises, referred to as the Pillar Two proposal.
In particular, the OECD is working on a two-pillar solution to address the tax challenges arising from the digitalization of the economy, commonly referred to as BEPS 2.0, which, to the extent implemented, would make important changes to the international tax system by allocating taxing rights in respect of certain profits of multinational enterprises above a fixed profit margin to the jurisdictions within which they carry on business (subject to certain revenue threshold rules which we do not currently meet but may meet in the future), referred to as the Pillar One proposal, and imposing a minimum effective tax rate on certain multinational enterprises, referred to as the Pillar Two proposal.
Remote work has become more common and has increased risks to our IT systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit, and in public locations.
In addition, remote work has become more common and has increased risks to our IT systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit, and in public locations.
We may spend substantial time, effort, and money on sales efforts to such customers without any assurance that our efforts will produce any sales or that these customers will deploy our platform widely enough across their business to justify our substantial upfront investment.
We may spend substantial time, effort, and money on sales efforts for such customers without any assurance that our efforts will produce any sales or that these customers will deploy our platform widely enough across their business to justify our substantial upfront investment.
Any of the foregoing could materially adversely affect our business, financial condition, results of operations, and prospects, and we may be required to incur additional material costs and expenditure to ensure compliance with any such rules in each of the relevant jurisdictions within which we carry on our business. 37 Table of Contents Our ability to use our net operating loss carryforwards (“NOL carryforwards”) and certain other tax attributes may be limited.
Any of the foregoing could materially adversely affect our business, financial condition, results of operations, and prospects, and we may be required to incur additional material costs and expenditure to ensure compliance with any such rules in each of the relevant jurisdictions within which we carry on our business. 38 Table of Contents Our ability to use our net operating loss carryforwards (“NOL carryforwards”) and certain other tax attributes may be limited.
If a court were to find either exclusive forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business. 43 Table of Contents Item 1B. Unresolved Staff Comments. None.
If a court were to find either exclusive forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business. 44 Table of Contents Item 1B. Unresolved Staff Comments. None.
Any violations could result in enforcement actions, fines, civil and criminal penalties, damages, injunctions, or reputational harm. If we are unable to maintain compliance or manage the complexity of our global operations successfully, we may need to relocate or cease operations in certain foreign jurisdictions, which could materially adversely impact our business, financial condition, results of operations, and prospects.
Any violations could result in enforcement actions, fines, civil and criminal penalties, damages, injunctions, or reputational harm. If we are unable to maintain compliance or manage the complexity of our global operations successfully, we may need to relocate or cease operations in certain foreign jurisdictions, which could materially adversely affect our business, financial condition, results of operations, and prospects.
The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of such jurisdictions, including the U.S., to our international business activities, changes in tax rates, new or revised tax laws, or interpretations of existing tax laws and policies, and our ability 36 Table of Contents to operate our business in a manner consistent with our corporate structure and intercompany arrangements.
The amount of taxes we pay in different jurisdictions may depend on the 37 Table of Contents application of the tax laws of such jurisdictions, including the U.S., to our international business activities, changes in tax rates, new or revised tax laws, or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.
If 34 Table of Contents we were to receive a claim of non-compliance with the terms of any of these open source licenses, we may be required to publicly release certain portions of our proprietary source code. We could also be required to expend substantial time and resources to re-engineer some or all of our software.
If we were to receive a claim of non-compliance with the terms of any of these open source licenses, we may be required to publicly release certain 35 Table of Contents portions of our proprietary source code. We could also be required to expend substantial time and resources to re-engineer some or all of our software.
Interruptions or performance issues associated with our products, services, and platform, including the interoperability of our platform across devices, operating systems, and third-party applications, could materially adversely affect our business, financial condition, results of operations, and prospects. We have experienced, and may in the future experience, service interruptions and other performance issues.
Interruptions or performance issues associated with or otherwise impacting our products, services, and platform, including the interoperability of our platform across devices, operating systems, and third-party applications, could materially adversely affect our business, financial condition, results of operations, and prospects. We have experienced, and may in the future experience, service interruptions and other performance issues.
Our obligations related to data privacy and security are quickly changing in an increasingly stringent fashion, creating some uncertainty as to the effect of future legal frameworks. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.
Our obligations related to data privacy and security (and consumers’ data privacy and security expectations) are quickly changing in an increasingly stringent fashion, creating some uncertainty as to the effect of future legal frameworks. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.
To support our business and operations, we will need sufficient capital to continue to make significant investments, and we may need to raise additional capital through equity or debt financings to fund such efforts. However, many factors, including recent economic volatility and interest rate increases, could adversely impact our ability to access additional capital.
To support our business and operations, we will need sufficient capital to continue to make significant investments, and we may need to raise additional capital through equity or debt financings to fund such efforts. However, many factors, including recent economic volatility and interest rate changes, could adversely impact our ability to access additional capital.
While we have policies and procedures to facilitate compliance with the FCPA, the Bribery Act, and other anti-corruption, sanctions, anti-bribery, anti-money laundering, and similar laws, we cannot assure you that they will be effective, or that all of our employees, representatives, contractors, partners, agents, intermediaries, or other third parties have taken, or will not take actions, in violation of our policies and procedures and applicable law, for which we may be ultimately held responsible.
While we have policies and procedures to facilitate compliance with the FCPA, the 32 Table of Contents Bribery Act, and other anti-corruption, sanctions, anti-bribery, anti-money laundering, and similar laws, we cannot assure you that they will be effective, or that all of our employees, representatives, contractors, partners, agents, intermediaries, or other third parties have taken, or will not take actions, in violation of our policies and procedures and applicable law, for which we may be ultimately held responsible.
For example, we may not be able to expand further our operations in some markets if we are not able to adapt our products, services, and platform to fit the needs of prospective customers in those markets or if we are unable to satisfy certain government- and industry-specific laws or regulations.
For example, we may not be able to further expand our operations in some countries if we are not able to adapt our products, services, and platform to fit the needs of prospective customers in those countries or if we are unable to satisfy certain government- and industry-specific laws or regulations.
In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage.
In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveal competitively sensitive details about our organization and could be used to undermine our competitive advantage.
If that happens, our business, financial condition, results of operations, and prospects could be materially adversely affected. Demand for construction management software in general, and for our products in particular, is affected by a number of factors, some of which are beyond our control.
If that happens, our business, financial condition, results of operations, and prospects could be materially adversely affected. Demand for construction management software in general, and for our products, services, and platform in particular, is affected by a number of factors, some of which are beyond our control.
If we or third parties upon which we rely experience a security incident or are perceived to have experienced a security incident, we could experience significant consequences, including, but not limited to, government enforcement actions (e.g., investigations, audits, inspections, fines, and penalties), litigation (including class-related claims), additional reporting requirements and oversight, restrictions or bans on processing sensitive information (including personal data and sensitive third-party and customer data), loss of revenue or profits, loss of customers or sales, interruptions or stoppages in or modifications to our operations (including availability of data), indemnification obligations, negative publicity, and reputational harm.
If we or third parties with which we work experience a security incident or are perceived to have experienced a security incident, we could experience significant consequences, including, but not limited to, government enforcement actions (e.g., investigations, audits, inspections, fines, and penalties), litigation (including class-related claims), additional reporting requirements and oversight, restrictions or bans on processing sensitive information (including personal data and sensitive third-party and customer data), loss of revenue or profits, loss of customers or sales, interruptions or stoppages in or modifications to our operations (including availability of data), indemnification obligations, negative publicity, and reputational harm.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines that we have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.
If 40 Table of Contents we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines that we have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.
Our issued patents in the U.S. will expire between 2034 and 2042. We continually review our development efforts to assess the existence and patentability of new intellectual property. We have devoted substantial resources to the development of our proprietary technologies and related processes.
Our issued patents in the U.S. will expire between 2034 and 2043. We continually review our development efforts to assess the existence and patentability of new intellectual property. We have devoted substantial resources to the development of our proprietary technologies and related processes.
Concentration of ownership of our common stock among our existing executive officers, directors, and principal stockholders may prevent new investors from influencing significant corporate decisions, including mergers, consolidations, or the sale of us or all or substantially all of our assets.
Concentration of ownership of our common stock among our officers, directors, and principal stockholders may prevent new and other existing investors from influencing significant corporate decisions, including mergers, consolidations, or the sale of us or all or substantially all of our assets.
In other instances, the operability of our platform features relies on third-party service providers or partners that may be unable to accommodate our evolving service needs, choose to terminate or decline to renew agreements with us, or demand more favorable terms, 22 Table of Contents among other things, any of which may cause service changes, interruptions, or delays for our customers.
In other instances, the operability of our platform features relies on third-party service providers or partners that may be unable to accommodate our evolving service needs, choose to terminate or decline to renew agreements with us, or demand more favorable terms, among other things, any of which may cause service changes, interruptions, or delays for our customers.
Additional data privacy and security laws have also been proposed at the federal, state, and local levels in recent years, which could further complicate compliance efforts. As we expand globally, our obligations related to data protection may increase. Outside the U.S., an increasing number of laws, regulations, and industry standards apply to data privacy and security.
Additional data privacy and security laws have also been proposed at the federal, state, and local levels in recent years, which could further complicate compliance efforts. As we continue to expand globally, our obligations related to data protection will increase. Outside the U.S., an increasing number of laws, regulations, and industry standards apply to data privacy and security.
In addition, our international operations and expansion efforts require considerable management attention and the investment of significant resources, while subjecting us to new risks and increasing certain risks that we already face, including risks associated with: • providing our products, services, and platform in different languages and customizing them to support local requirements; • compliance by us and our partners with applicable international laws and regulations, including laws and regulations with respect to anti-corruption, competition, import and export controls, tariffs, trade barriers, economic sanctions, employment, construction, privacy, data protection, consumer protection, and unsolicited email, and the risk of penalties and fines against us and individual members of management or employees if our practices are deemed to be out of compliance; • recruiting and retaining talented and capable employees outside the U.S., including employees who speak multiple languages and come from a wide variety of different cultural backgrounds and customs, and managing an employee base in jurisdictions with differing employment regulations; • operating in jurisdictions that do not protect intellectual property rights to the same extent as the U.S. and navigating the practical enforcement of such intellectual property rights outside of the U.S.; • political and economic instability, including as a result of the Russia-Ukraine war; • generally longer payment cycles and greater difficulty in collecting accounts receivable; and • higher costs of doing business internationally, including increased accounting, tax, travel, infrastructure, and legal compliance costs, and costs associated with fluctuations in currency exchange rates.
In addition, our international operations and expansion efforts require considerable management attention and the investment of significant resources, while subjecting us to new risks and increasing certain risks that we already face, including risks associated with: • providing our products, services, and platform in different languages and customizing them to support local requirements; • compliance by us and our partners with applicable international laws and regulations, including laws and regulations with respect to anti-corruption, competition, import and export controls, tariffs, trade barriers, economic sanctions, employment, construction, privacy, data protection and sovereignty, consumer protection, and unsolicited email, and the risk of penalties and fines against us and individual members of management or employees if our practices are deemed to be out of compliance; 19 Table of Contents • recruiting and retaining talented and capable employees outside the U.S., including employees who speak multiple languages and come from a wide variety of different cultural backgrounds and customs, and managing an employee base in jurisdictions with differing employment regulations; • operating in jurisdictions that do not protect intellectual property rights to the same extent as the U.S. and navigating the practical enforcement of such intellectual property rights outside of the U.S.; • political and economic instability, including as a result of the Russia-Ukraine war and the Israel-Hamas war, and a shifting and uncertain geopolitical landscape; • generally longer payment cycles and greater difficulty in collecting accounts receivable; and • higher costs of doing business internationally, including increased accounting, tax, travel, infrastructure, and legal compliance costs, and costs associated with fluctuations in currency exchange rates.
As a result, we may experience a significant decline in value or loss of liquidity of our investments, which could materially adversely affect our business, financial condition, results of operations, and 38 Table of Contents prospects.
As a result, we may experience a significant 39 Table of Contents decline in value or loss of liquidity of our investments, which could materially adversely affect our business, financial condition, results of operations, and prospects.
If such third parties or partners are unable to effectively manage their compliance and licensure obligations in connection with the services they provide to us, or choose not to renew agreements with us because of the costs or burden of compliance with such obligations or for any other reason, our users may experience service changes, interruptions, or delays.
If such third parties or partners are unable to effectively manage their compliance and licensure obligations in connection with the services they 29 Table of Contents provide to us, or choose not to renew agreements with us because of the costs or burden of compliance with such obligations or for any other reason, our users may experience service changes, interruptions, or delays.
In particular, if we are unable to successfully operate as a combined business after the completion of such transactions, including in respect of the Levelset acquisition, to achieve shared growth opportunities or combine reporting or other processes within the expected time frame, such delay may materially and adversely affect the benefits that we expect to achieve as a result of any such acquisition.
In particular, if we are unable to successfully operate as a combined business after the completion of such transactions to achieve shared growth opportunities or combine reporting or other processes within the expected time frame, such delay may materially and adversely affect the benefits that we expect to achieve as a result of any such acquisition.
Furthermore, we may be unable to find new service providers or partners, or may need to obtain replacement services on less favorable terms. For example, we rely on a payment partner to facilitate payments through Procore Pay.
Furthermore, we may be unable to find new service providers or partners, or may need to obtain replacement services on less favorable terms. For example, we rely on payment partners to facilitate payments through Procore Pay.
In addition, the introduction of new products and services, expansion of our activities in certain jurisdictions, or other actions we may take may subject us to additional laws, rules, and regulations, or other government scrutiny.
In addition, the introduction of new products and services, expansion of our activities in certain jurisdictions or with certain government customers, or other actions we may take may subject us to additional laws, rules, and regulations, or other government scrutiny.
See the risk factor titled “Increased government scrutiny of the technology industry could negatively affect our business.” Risks Related to Our Acquisitions We may be unsuccessful in making, integrating, and maintaining acquisitions, joint ventures, and strategic investments, which could materially adversely affect our business, financial condition, results of operations, and prospects.
See the risk factor titled “Increased government scrutiny of the technology industry generally or our operations specifically could negatively affect our business.” Risks Related to Our Acquisitions We may be unsuccessful in making, integrating, and maintaining acquisitions, joint ventures, and strategic investments, which could materially adversely affect our business, financial condition, results of operations, and prospects.
Additionally, the foregoing factors, along with other market and industry factors, may cause the market price and demand for our common stock to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from selling their shares at or above the price paid for the shares and may otherwise negatively affect the liquidity of our common stock.
Additionally, the foregoing factors, along with other market and industry factors, may cause the market price and demand for our common stock to fluctuate substantially, 42 Table of Contents regardless of our actual operating performance, which may limit or prevent investors from selling their shares at or above the price paid for the shares and may otherwise negatively affect the liquidity of our common stock.
If our IT systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including, but not limited to, regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, loss of customers or sales, and other adverse consequences, any of which could materially adversely affect our business, financial condition, results of operations, and prospects.
If our IT systems or data, or those of third parties with which we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including, but not limited to, regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, loss of customers or sales, and other adverse consequences, any of which could materially adversely affect our business, financial condition, results of operations, and prospects.
In addition, the adoption of new laws or regulations, or the imposition of other legal requirements, that adversely affect our ability to market or sell our products and services could harm our ability to offer, or customer demand for, our products and services, which could impact our revenue, impair our ability to expand our product and service offerings, and make us more vulnerable to competition.
In addition, the adoption of new laws or regulations, or the imposition of other legal requirements, that adversely affect our ability to market or sell our products and services could harm our ability to offer, or customer demand for, our products and services, which could impact our revenue, impair our ability to expand our products and services, and make us more vulnerable to competition.
The threats posed by such activities are prevalent and continue to grow, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, personnel (such as through theft or misuse), sophisticated nation-states, and nation-state-supported actors.
The threats posed by such activities are prevalent and continue to grow, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation-states, and nation-state-supported actors.
In the ordinary course of business, we process substantial amounts of sensitive information. Cyberattacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of such sensitive information and IT systems, and those of the third parties on which we rely.
In the ordinary course of our business, we, and the third parties with which we work, process substantial amounts of sensitive information. Cyberattacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of such sensitive information and IT systems, and those of the third parties on which we rely.
In addition, security incidents experienced by others, such as our competitors or customers, may lead to widespread negative publicity for us, our customers, or the construction software industry generally. 28 Table of Contents Our contracts may not contain indemnification, limitations of liability, or other protective provisions.
In addition, security incidents experienced by others, such as competitors or customers, may lead to widespread negative publicity for us, our customers, or the construction software industry generally. Our contracts may not contain indemnification, limitations of liability, or other protective provisions.
Furthermore, sensitive information of our company or our customers could be leaked, disclosed, or revealed as a result of, or in connection with, our employees’, personnel’s, or vendors’ use of generative AI technologies. Our business depends upon the appropriate and successful implementation of our products by our customers.
Furthermore, 28 Table of Contents sensitive information of our company or our customers could be leaked, disclosed, or revealed as a result of, or in connection with, our employees’, personnel’s, or vendors’ use of generative AI technologies. Our business depends upon the appropriate and successful implementation of our products by our customers.
In particular, the value of our portfolio may decline due to changes in interest rates, instability in the global financial markets that reduces the liquidity of securities in our portfolio, and other factors, including unexpected or unprecedented events such as the COVID-19 pandemic.
In particular, the value of our portfolio may decline due to changes in interest rates, instability in the global financial markets that reduces the liquidity of securities in our portfolio, and other factors, including unexpected or unprecedented events such as health epidemics or pandemics (including the COVID-19 pandemic).
Preparing for and complying with these obligations requires significant resources and may necessitate changes to our information technologies, systems, and practices and to those of any third parties that process personal data on our behalf. In addition, these obligations may require us to change our business practices.
Preparing for and complying with these obligations requires significant resources and may necessitate changes to our IT, systems, and practices and to those of any third parties that process personal data on our behalf. In addition, these obligations may require us to change our business practices.
Severe ransomware attacks, including by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds.
Severe ransomware attacks, including by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions in our operations, loss of sensitive information and income, reputational harm, and diversion of funds.
While we have implemented security measures designed to help protect against security incidents, there can be no assurance that these measures will be effective.
While we have implemented security measures designed to help protect against security incidents, there can be no assurance that these measures are or will be effective.
As a result, we anticipate increased sales to large enterprises will lead to higher upfront sales costs and greater unpredictability, which could materially adversely affect our business, results of operations, financial condition, and prospects.
As a result, we anticipate increased sales to large enterprises, owners, and governmental entities will lead to higher upfront sales costs and greater unpredictability, which could materially adversely affect our business, results of operations, financial condition, and prospects.
We may become involved in litigation that could materially adversely affect our business, financial condition, results of operations, and prospects.
We may become involved in litigation and other disputes that could materially adversely affect our business, financial condition, results of operations, and prospects.
Moreover, despite our efforts, our personnel or third parties upon which we rely, such as vendors or developers, may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
Moreover, despite our efforts, our personnel or third parties with which we work, such as vendors or developers, may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
In addition, as required by the recent revenue recognition standard under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, we disclose the transaction price allocated to remaining performance obligations ("RPO").
In addition, as required by the revenue recognition standard under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , we disclose the transaction price allocated to remaining performance obligations (“RPO”).
Even though we use internal data to assess the likelihood of success of introducing new products or changes to existing products, we may incorrectly calculate such risks or assume undue risks with respect to such offerings.
Even though we use internal data to assess the likelihood of success of introducing new products and services or changes to existing products and services, we may incorrectly calculate such risks or assume undue risks with respect to such products.
The market price for our common stock may also be influenced by the following factors: actual or anticipated changes or fluctuations in our results of operations; the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections; announcements by us or our competitors of new products or new or terminated significant contracts, commercial relationships, or capital commitments; changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; and actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally.
The market price for our common stock may also be influenced by the following factors: actual or anticipated changes or fluctuations in our results of operations; the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections; repurchases or expectations with respect to repurchases by us of our common stock; announcements by us or competitors of new products or new or terminated significant contracts, commercial relationships, or capital commitments; changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; rumors and market speculation involving us and other companies in our industry; and actual or anticipated developments in our business, competitors’ businesses, or the competitive landscape generally.
Some of these factors include: general awareness of construction management software; availability, functionality, and pricing of products and services that compete with ours; ease of adoption and use; the reliability, performance, or perceived performance of our products and platform, including interruptions to the use of our products and platform; and the development and awareness of our brand.
Some of these factors include: general awareness of construction management software; availability, functionality, and pricing and packaging of products and services that compete with ours; ease of adoption and use; the reliability, performance, or perceived performance of our products and platform, including interruptions to the use of our 16 Table of Contents products and platform; and the development and awareness of our brand.
Furthermore, our ability to grow our customer base and increase revenue from customers depends on our ability to enhance and improve our platform in response to changes in the construction management software industry and customer demand.
Furthermore, our ability to grow our customer base and retain and increase revenue from customers depends on our ability to enhance and improve our products, services, and platform in response to changes in the construction management software industry and customer demand.
In response to such shifts, we may introduce changes to our existing offerings or introduce new offerings, which may require significant expenditures in research and development and customer support, which may harm our results of operations.
In response to such shifts, we may introduce changes to our existing products and services or introduce new products and services, which may require significant expenditures in research and development and customer support, which may harm our results of operations.
Compliance with new or modified laws and regulations could increase the cost of conducting business, limit opportunities to increase our revenues, or prevent us from offering products or services.
Compliance with new or modified laws and 30 Table of Contents regulations could increase the cost of conducting business, limit opportunities to increase our revenues, or prevent us from offering products or services.
If we do not adequately protect our rights in our trademarks from infringement, misappropriation, and unauthorized use, any goodwill that we have developed in those trademarks could be lost or impaired, which could harm our brand and our business.
If we do not adequately protect our rights in our trademarks from infringement, misappropriation, and unauthorized use, any goodwill that we have developed in those trademarks could be lost 34 Table of Contents or impaired, which could harm our brand and our business.
For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (collectively, the “CCPA”) applies to personal information 24 Table of Contents of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights.
For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (collectively, the “CCPA”), applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights.
Although we take certain steps to detect, mitigate, and remediate various vulnerabilities in our IT systems (such as our hardware and/or software, including that of third parties upon which we rely, and those used to operate our products), doing so takes significant time and resources and we may not be able to detect and have not been able to remediate all vulnerabilities in our IT systems (including those that operate our products and those that are used to provide our services).
Although we take certain steps to detect, mitigate, and remediate various vulnerabilities in our IT systems (such as our hardware and/or software, including that of third parties with which we work, and those used to operate our products), doing so takes significant time and resources and we are not able to detect, and have not been able to remediate, all vulnerabilities in our IT systems (including those that operate our products and those that are used to provide our services).
We may also rely on third-party developers, service providers, and technologies to provide other products or services to operate our business. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
We may also rely on third-party developers, service providers, and technologies to provide other products or services to operate our business. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. We may also share or receive sensitive information with or from third parties.
We make business decisions about when to seek patent protection for a particular technology and when to rely upon copyright or trade secret protection, and the approach we select may ultimately prove to be 33 Table of Contents inadequate.
We make business decisions about when to seek patent protection for a particular technology and when to rely upon copyright or trade secret protection, and the approach we select may ultimately prove to be inadequate.
We have a history of losses, and we may not achieve or maintain profitability in the future. We incurred net losses of $265.2 million in 2021, $286.9 million in 2022, and $189.7 million in 2023. As of December 31, 2023, we had an accumulated deficit of $1.1 billion.
We have a history of losses, and we may not achieve or maintain profitability in the future. We incurred net losses of $106.0 million in 2024, $189.7 million in 2023, and $286.9 million in 2022. As of December 31, 2024, we had an accumulated deficit of $1.2 billion.
Widespread acceptance and use of construction management technology in general, and of our platform in particular, is critical to our future growth. While we believe that our construction management software addresses a significant market opportunity, a viable market for it may develop more slowly than we expect.
Widespread acceptance and use of construction management technology in general, and of our platform in particular, is critical to our future growth. While we believe that our construction management software addresses a significant market opportunity, demand for our products, services, and platform may develop more slowly than we expect.
These provisions include: • a classified Board with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board; • the denial of any right of our stockholders to remove members of our Board except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of the total voting power of all our outstanding voting stock then entitled to vote in the election of directors; • the ability of our Board to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our Board; 42 Table of Contents • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by the chairperson of our Board, chief executive officer, president, or by our Board acting pursuant to a resolution adopted by a majority of our Board, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the requirement to obtain approval of two-thirds of the then-outstanding voting power of our capital stock in order to make certain amendments to our amended and restated certificate of incorporation; and • advance notice procedures with which stockholders must comply to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
These provisions include, but are not limited to: • a classified Board with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board; • the denial of any right of our stockholders to remove members of our Board except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of the total voting power of all our outstanding voting stock then entitled to vote in the election of directors; • the ability of our Board to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our Board; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by the our Board acting pursuant to a resolution adopted by a majority of our Board, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the requirement to obtain approval of two-thirds of the then-outstanding voting power of our capital stock in order to make certain amendments to our amended and restated certificate of incorporation; and • advance notice procedures and disclosure requirements with which stockholders must comply to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us. 43 Table of Contents These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time.
We also believe that maintaining and enhancing our brand is critical to retaining and expanding our customer base and, in particular, conveying to customers and collaborators that our platform offers capabilities that address the needs of the construction ecosystem throughout the project lifecycle.
We also believe that maintaining and enhancing our brand is critical to retaining and expanding our customer base, attracting investors, and recruiting and retaining qualified personnel, and, in particular, conveying to customers and collaborators that our platform offers capabilities that address the needs of the construction ecosystem throughout the project lifecycle.
Our payment partner may be subject to extensive compliance obligations as well as enforcement actions, fines, and litigation if found to violate any legal or regulatory requirements that apply to it.
Our payment partners may be subject to extensive compliance obligations as well as enforcement actions, fines, and litigation if found to violate any legal or regulatory requirements that apply to them.
Even if we are able to complete these transactions, we may not be able to realize the anticipated benefits of such transactions in the time frame expected or at all.
Even if we are able to complete these transactions, we may incur substantial costs and may not be able to realize the anticipated benefits of such transactions in the time frame expected or at all.
As of December 31, 2023, we had $866.7 million of U.S. federal and $626.4 million of state NOL carryforwards available to reduce taxable income that we may have in the future. It is possible that we will not generate taxable income sufficient to use certain of these NOL carryforwards.
As of December 31, 2024, we had $822.6 million of U.S. federal and $626.7 million of state NOL carryforwards available to reduce taxable income that we may have in the future. It is possible that we will not generate taxable income sufficient to use certain of these NOL carryforwards.
Any new markets or countries into which we attempt to sell subscriptions to access our products may not be receptive to our efforts.
Any new markets or countries into which we attempt to sell our products or services may not be receptive to our efforts.
In addition, changes in accounting principles or interpretations could also challenge our controls and require that we establish new business processes, systems, and controls to accommodate such 39 Table of Contents changes.
In addition, changes in accounting principles or interpretations could also challenge our controls and require that we establish new business processes, systems, and controls to accommodate such changes.
Our business could be disrupted by macroeconomic and geopolitical events or catastrophic occurrences.
Our business could be disrupted by macroeconomic factors, geopolitical events, or catastrophic occurrences.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with data privacy and security obligations, we could face significant consequences, including, but not limited to, government enforcement actions (e.g., investigations, audits, inspections, fines, and penalties), litigation (including class-related claims), additional reporting requirements and oversight, restrictions or bans on processing personal data, orders to destroy or not use personal data, the imprisonment of company officials, the inability to operate in certain jurisdictions, limited ability to develop or commercialize our products and services, loss of revenue or profits, loss of customers or sales (including a decline in customer subscription renewals), interruptions or stoppages in or modifications to our operations, negative publicity (including public statements against us by consumer advocacy groups or others), and reputational harm, any of which could materially adversely affect our business, financial condition, results of operations, and prospects.
For example, any failure by a third-party processor to comply with applicable law, regulations, or contractual obligations could result in adverse consequences for us, including our inability to, or interruption in our ability to, operate our business and proceedings against us by governmental entities or others. 25 Table of Contents If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with data privacy and security obligations, we could face significant consequences, including, but not limited to, government enforcement actions (e.g., investigations, audits, inspections, fines, and penalties), litigation (including class-related claims), additional reporting requirements and oversight, restrictions or bans on processing personal data, orders to destroy or not use personal data, the imprisonment of company officials, the inability to operate in certain jurisdictions, limited ability to develop or commercialize our products and services, loss of revenue or profits, loss of customers or sales (including a decline in customer subscription renewals), interruptions or stoppages in or modifications to our operations, negative publicity (including public statements against us by consumer advocacy groups or others), and reputational harm, any of which could materially adversely affect our business, financial condition, results of operations, and prospects.
Additionally, certain privacy laws extend rights to consumers (such as the right to delete certain personal data) and regulate automated decision-making, which may be incompatible with our use of AI and may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our business practices, retrain our AI, or prevent our use of AI.
Additionally, certain privacy laws extend rights to consumers (such as the right to delete certain personal data) and regulate automated decision-making, which may complicate our use of AI, lead to regulatory fines or penalties, be incompatible with our use of AI, require us to change our business practices, retrain our AI, or prevent our use of AI.
If any of these policies, materials, or statements are found by our customers or regulators to be overly broad, deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.
Regulators in the U.S. are increasingly scrutinizing these statements, and if any of these policies, materials, or statements are found by our customers or regulators to be overly broad, deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.
During times of war and other major conflicts, we, the third parties upon which we rely, and our customers are subject to a variety of evolving threats, including, but not limited to, social-engineering attacks (including through deep fakes, which may be increasingly difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, break-ins, ransomware attacks, supply chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other IT assets, adware, telecommunications failures, and other similar threats.
We, the third parties with which we work, and our customers are subject to a variety of evolving threats, including, but not limited to, social-engineering attacks (including through deep fakes, which may be increasingly difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, break-ins, ransomware attacks, supply chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other IT assets, adware, telecommunications failures, attacks enhanced or facilitated by AI, and other similar threats.
Failure to maintain effective disclosure controls could cause us to be required to revise our financial statements, result in material misstatements in our financial statements, and cause us to fail to timely meet our periodic reporting obligations, among other outcomes.
Failure to maintain effective disclosure controls could cause us to be required to restate our financial statements for prior periods, result in material misstatements in our financial statements, and cause us to fail to timely meet our periodic reporting obligations, among other outcomes.
We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brand may become increasingly difficult and expensive. If we experience difficulties with software development that negatively impact new or existing offerings, we may experience negative publicity or lose market acceptance.
We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brand may become increasingly difficult and expensive. If we experience difficulties with software development, customer service or professional services that negatively impact new or existing products, we may experience negative publicity or lose market acceptance.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+3 added−6 removed2 unchanged
Biggest changeWe identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods, including using manual and automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and threat actors, conducting scans of the threat environment, evaluating threats reported to us, coordinating with law enforcement, conducting audits and threat and vulnerability assessments, using external intelligence feeds, conducting table top exercises, and operating a bug bounty program.
Biggest changeTo help us in assessing these threats, we use various methods, including, as applicable, using a combination of manual and automated tools, subscribing to threat reports and external intelligence feeds, conducting vulnerability assessments and penetration tests, collaborating with law enforcement, and operating a bug bounty program.
For a description of the risks from cybersecurity threats that may materially affect us, see our risk factors under the heading “Risk Factors” in Part I of this Annual Report on Form 10-K, including the risk factor titled “If our IT systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including, but not limited to, regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, loss of customers or sales, and other adverse consequences, any of which could materially adversely affect our business, financial condition, results of operations, and prospects.” 44 Table of Contents Governance Our Board oversees our enterprise risk management program, including the management of risks arising from cybersecurity threats.
For a description of the risks from cybersecurity threats that may materially affect us and how they may do so, see our risk factors under the heading “Risk Factors” in Part I of this Annual Report on Form 10-K, including the risk factor titled “If our IT systems or data, or those of third parties with which we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including, but not limited to, regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, loss of customers or sales, and other adverse consequences, any of which could materially adversely affect our business, financial condition, results of operations, and prospects.” Governance Our Board oversees our enterprise risk management program, including cybersecurity risk.
Item 1C. Cybersecurity. Risk management and strategy We have implemented and maintain information security processes designed to identify, assess, and manage material risks from cybersecurity threats to our critical networks, third-party hosted services, communications systems, hardware, software, and data, including intellectual property and confidential, proprietary, or sensitive information, such as customer data (“Information Systems and Data”).
Item 1C. Cybersecurity. Risk management and strategy We maintain an information security program designed to identify, assess, and manage material risks arising from cybersecurity threats to our critical networks, third-party hosted services, communications systems, hardware, software, and data, including intellectual property and confidential, proprietary, or sensitive information, such as customer data.
The audit committee of our Board (the “Audit Committee”) is responsible for overseeing our cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. A cross-functional cybersecurity committee (the “Cybersecurity Committee”), which is comprised of members of our management team, reports to the Audit Committee.
The audit committee of our Board (the “Audit Committee”) is responsible for oversight of our cybersecurity risk management processes, and a cross-functional cybersecurity committee (the “Cybersecurity Committee”), which is comprised of members of our management team, reports to the Audit Committee.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including appropriate measures suggested by security standards, an incident response plan, incident detection and response, vulnerability management process, disaster recovery/business continuity plans, risk assessments, data encryption, network security controls, access controls, physical security, vendor risk management program, employee training, penetration tests, cybersecurity insurance, and dedicated cybersecurity staff.
Depending on the environment, systems, and data, we employ various technical, physical, and organizational measures designed to mitigate material cybersecurity risks, including an incident response plan, incident detection and response processes, a vulnerability management program, disaster recovery/business continuity plans, risk assessments, data encryption, network and access controls, a vendor risk management program, physical security, employee training, cybersecurity insurance, and dedicated cybersecurity staff.
Members of our management team, including our President of P&T, CDO, and CSO, are responsible for hiring appropriate personnel, approving budgets, helping to integrate cybersecurity considerations into our risk management strategy, communicating key priorities, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security-related reports.
Members of our management team, including our President of P&T, CDO, and the senior-most employee responsible for cybersecurity management, lead our cybersecurity assessment and management processes. Their responsibilities include hiring appropriate personnel, approving budgets, integrating cybersecurity considerations into our risk management strategy, overseeing security-related reports, communicating key priorities, and helping prepare for cybersecurity incidents.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain members of our management team, including our President of P&T, CDO, and CSO.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain members of our management team, including our President of P&T, CDO, and the senior-most 45 Table of Contents employee responsible for cybersecurity management.
Our President, Product and Technology (“President of P&T”), Chief Data Officer (“CDO”), Chief Security Officer (“CSO”), and others in our cybersecurity and audit functions, help identify, assess, and manage cybersecurity threats and risks that may impact us or our business and operations.
Our President, Product and Technology (“President of P&T”), Chief Data Officer (“CDO”), the senior-most employee responsible for cybersecurity management, and other members of our cybersecurity and audit teams, help identify, assess, and manage cybersecurity threats and risks that may affect our business and operations.
From time to time, we use third-party providers to assist us with identifying, assessing, and managing material risks from cybersecurity threats, including professional services firms, threat intelligence service providers, cybersecurity consultants, penetration testing firms, and forensic investigators. We use third-party providers for various aspects of our business, such as data-hosting companies.
Our approach to addressing cybersecurity risk is cross-functional and is designed to preserve the confidentiality, integrity, and availability of data by identifying, preventing, and mitigating cybersecurity incidents. From time to time, we engage third-party service providers, including professional services firms, threat intelligence services, cybersecurity consultants, penetration testing firms, and forensic investigators, to assist with identifying, assessing, and managing cybersecurity risks.
We have a third-party risk management program to manage cybersecurity risks associated with our use of these providers, which includes vendor risk assessments, questionnaires, review of the vendor’s security program, and contractual obligations for vendors, depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider.
We also rely on data-hosting companies and other third parties for certain business operations. We mitigate the associated cybersecurity risks through a third-party risk management program, which may include vendor risk assessments, security questionnaires, reviews of vendor security programs, and contractual obligations for vendors to maintain specific security measures.
Our cybersecurity incident response and vulnerability management processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including to our President of P&T, CDO, and CSO. Our President of P&T, CDO, and CSO work with our incident response team to help us mitigate and remediate cybersecurity incidents, as applicable.
Our President of P&T, CDO, the senior-most employee responsible for cybersecurity management, and the Cybersecurity Committee work with our incident response team to mitigate and remediate potential issues. These processes include reporting significant cybersecurity threats, risks, and mitigation activities to the Audit Committee and/or the Cybersecurity Committee, as appropriate.
Removed
Our assessment and management of material risks from cybersecurity threats are integrated into our overall enterprise risk management processes and consider principles from recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization, and other applicable industry standards.
Added
In maintaining these measures, we consider certain principles from recognized frameworks, such as those published by the Committee of Sponsoring Organizations of the Treadway Commission, the International Organization for Standardization, and other applicable industry standards.
Removed
In general, we seek to address cybersecurity risks through a cross-functional approach that is designed to preserve the confidentiality, security, and availability of the information that we collect and store by identifying, preventing, and mitigating cybersecurity incidents when they occur.
Added
We conduct periodic training to keep personnel informed of cybersecurity threats and to communicate evolving information security policies, standards, processes, and practices. Our cybersecurity incident response and vulnerability management processes are designed to escalate significant cybersecurity incidents to members of management, including to our President of P&T, CDO, the senior-most employee responsible for cybersecurity management, and the Cybersecurity Committee.
Removed
Our CSO has over 30 years of experience in computer science and engineering disciplines, and served as the Chief Information Security Officer at various companies prior to joining Procore.
Added
The Audit Committee and the Cybersecurity Committee receive periodic reports, summaries, and presentations from management regarding our significant cybersecurity risks and threats, incidents, and response initiatives. Through our cybersecurity governance practices, we strive to achieve a strong cybersecurity posture and to refine our security measures to respond to emerging threats.
Removed
We provide regular training for personnel regarding cybersecurity threats, which are intended to equip them with tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes, and practices.
Removed
Our incident response and vulnerability management processes include reporting to the Audit Committee and the Cybersecurity Committee, as appropriate. The Audit Committee receives periodic reports from management concerning our significant cybersecurity threats and risks and the processes we have implemented to address them.
Removed
The Cybersecurity Committee receives periodic reports from members of our cybersecurity team regarding such threats, risks, and processes. The Audit Committee and the Cybersecurity Committee also receive various reports, summaries, and presentations related to cybersecurity threats, risk, and mitigation.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we maintain additional offices in the U.S. in Austin, Texas; New York, New York; Portland, Oregon; Willmar, Minnesota; Tampa, Florida; New Orleans, Louisiana; and internationally in Sydney, Australia; Toronto, Canada; London, England; Cairo, Egypt; Singapore, Republic of Singapore; Paris, France; Dublin, Ireland; and Dubai, UAE.
Biggest changeIn addition, we maintain additional offices in the U.S. in Austin, Texas; Willmar, Minnesota; Tampa, Florida; New Orleans, Louisiana; and internationally in Sydney, Australia; Edmonton, Canada; Toronto, Canada; Heredia, Costa Rica; Cairo, Egypt; London, England; Paris, France; Bangalore, India; Pune, India; Dublin, Ireland; Singapore, Republic of Singapore; and Dubai, UAE.
Item 2. Properties. Our corporate headquarters are located in Carpinteria, California, where we lease approximately 176,000 square feet of office space pursuant to operating and finance leases that expire between September 2026 and March 2027, with options to renew through March 2037.
Item 2. Properties. Our corporate headquarters are located in Carpinteria, California, where we lease approximately 168,000 square feet of office space pursuant to operating and finance leases that expire between September 2026 and March 2027, with options to renew through March 2037.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together reasonably be expected to have a material adverse effect on our business, results of operations, financial condition, or cash flow. Item 4. Mine Safety Disclosures. Not applicable. 45 Table of Contents PART II
Biggest changeWe are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together reasonably be expected to have a material adverse effect on our business, results of operations, financial condition, or cash flow. Item 4. Mine Safety Disclosures. Not applicable. 46 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future.
Biggest changeWe currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business and to carry out our capital allocation strategy (see the sub-heading titled “Capital Allocation Strategy,” under the heading “Liquidity and Capital Resources” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), and we do not anticipate paying any cash dividends in the foreseeable future.
We believe a substantially greater number of beneficial owners hold shares through brokers, banks, or other nominees. 46 Table of Contents Stock Performance Graph This performance graph shall not be deemed “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C under the Exchange Act or for purposes of Section 18 of the Exchange Act or incorporated by reference into any of our filings under the Securities Act.
We believe a substantially greater number of beneficial owners hold shares through brokers, banks, or other nominees. 47 Table of Contents Stock Performance Graph This performance graph shall not be deemed “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C under the Exchange Act or for purposes of Section 18 of the Exchange Act or incorporated by reference into any of our filings under the Securities Act.
Data for the S&P 500 Index and the NASDAQ Computer Index assume reinvestment of dividends. The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. Unregistered Sales of Equity Securities None. Use of Proceeds None. Issuer Purchases of Equity Securities None.
Data for the S&P 500 Index and the NASDAQ Computer Index assume reinvestment of dividends. The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. Unregistered Sales of Equity Securities None. Use of Proceeds None.
In addition, our ability to pay dividends may be restricted by agreements we may enter into in the future. Holders of Record As of February 16, 2024, there were 54 registered stockholders of record of our common stock.
In addition, our ability to pay dividends may be restricted by agreements we may enter into in the future. Holders of Record As of February 19, 2025, there were 46 registered stockholders of record of our common stock.
Added
Issuer Purchases of Equity Securities On October 29, 2024, our Board authorized a stock repurchase program to repurchase up to $300.0 million of our common stock. We did not repurchase any shares under our authorized stock repurchase program during the three months ended December 31, 2024. Item 6. [Reserved.] 48 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+34 added−11 removed51 unchanged
Biggest changeOverall, we believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results period-over-period and to those of peer companies. 58 Table of Contents The following tables present reconciliations of our GAAP financial measures to our non-GAAP financial measures for the periods presented: Reconciliation of gross profit and gross margin to non-GAAP gross profit and non-GAAP gross margin: Year Ended December 31, 2023 2022 2021 (dollars in thousands) Revenue $ 950,010 $ 720,203 $ 514,821 Gross profit 775,548 571,787 416,509 Stock-based compensation expense 11,491 7,253 8,094 Amortization of acquired technology intangible assets 22,396 22,428 7,522 Employer payroll tax on employee stock transactions 540 308 457 Acquisition-related expenses — — 2 Non-GAAP gross profit $ 809,975 $ 601,776 $ 432,584 Gross margin 82 % 79 % 81 % Non-GAAP gross margin 85 % 84 % 84 % 59 Table of Contents Reconciliation of operating expenses to non-GAAP operating expenses: Year Ended December 31, 2023 2022 2021 (dollars in thousands) Revenue $ 950,010 $ 720,203 $ 514,821 GAAP sales and marketing 494,908 424,976 308,511 Stock-based compensation expense (55,162) (53,397) (68,755) Amortization of acquired intangible assets (12,425) (12,425) (3,600) Employer payroll tax on employee stock transactions (2,766) (1,955) (2,325) Acquisition-related expenses (2,483) (1,725) (488) Non-GAAP sales and marketing $ 422,072 $ 355,474 $ 233,343 GAAP sales and marketing as a percentage of revenue 52 % 59 % 60 % Non-GAAP sales and marketing as a percentage of revenue 44 % 49 % 45 % GAAP research and development $ 300,571 $ 270,982 $ 237,290 Stock-based compensation expense (68,275) (63,262) (85,040) Amortization of acquired intangible assets (2,757) (3,528) (2,674) Employer payroll tax on employee stock transactions (3,217) (2,474) (2,606) Acquisition-related expenses (6,370) (5,549) (1,348) Non-GAAP research and development $ 219,952 $ 196,169 $ 145,622 GAAP research and development as a percentage of revenue 32 % 38 % 46 % Non-GAAP research and development as a percentage of revenue 23 % 27 % 28 % GAAP general and administrative $ 195,746 $ 166,283 $ 156,635 Stock-based compensation expense (44,406) (38,974) (65,272) Employer payroll tax on employee stock transactions (1,910) (1,202) (1,127) Acquisition-related expenses (35) (2,128) (7,442) Non-GAAP general and administrative $ 149,395 $ 123,979 $ 82,794 GAAP general and administrative as a percentage of revenue 21 % 23 % 30 % Non-GAAP general and administrative as a percentage of revenue 16 % 17 % 16 % 60 Table of Contents Reconciliation of loss from operations and operating margin to non-GAAP income (loss) from operations and non-GAAP operating margin: Year Ended December 31, 2023 2022 2021 (dollars in thousands) Revenue $ 950,010 $ 720,203 $ 514,821 Loss from operations (215,677) (290,454) (285,927) Stock-based compensation expense 179,334 162,886 227,161 Amortization of acquired intangible assets 37,578 38,381 13,796 Employer payroll tax on employee stock transactions 8,433 5,939 6,515 Acquisition-related expenses 8,888 9,402 9,280 Non-GAAP income (loss) from operations $ 18,556 $ (73,846) $ (29,175) Operating margin (23 %) (40 %) (56 %) Non-GAAP operating margin 2 % (10 %) (6 %) Liquidity and Capital Resources As of December 31, 2023, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $678.0 million, which were held in money market funds, U.S. treasury securities, corporate notes and obligations, time deposits, commercial paper, checking accounts, and savings accounts.
Biggest changeThe following tables present reconciliations of our GAAP financial measures to our non-GAAP financial measures for the periods presented: Reconciliation of gross profit and gross margin to non-GAAP gross profit and non-GAAP gross margin: Year Ended December 31, 2024 2023 2022 (dollars in thousands) Revenue $ 1,151,708 $ 950,010 $ 720,203 Gross profit 946,096 775,548 571,787 Stock-based compensation expense 15,478 11,491 7,253 Amortization of acquired technology intangible assets 25,437 22,396 22,428 Employer payroll tax on employee stock transactions 612 540 308 Non-GAAP gross profit $ 987,623 $ 809,975 $ 601,776 Gross margin 82 % 82 % 79 % Non-GAAP gross margin 86 % 85 % 84 % 60 Table of Contents Reconciliation of operating expenses to non-GAAP operating expenses: Year Ended December 31, 2024 2023 2022 (dollars in thousands) Revenue $ 1,151,708 $ 950,010 $ 720,203 GAAP sales and marketing 552,019 494,908 424,976 Stock-based compensation expense (58,058) (55,162) (53,397) Amortization of acquired intangible assets (12,700) (12,425) (12,425) Employer payroll tax on employee stock transactions (3,227) (2,766) (1,955) Acquisition-related expenses (1,448) (2,483) (1,725) Non-GAAP sales and marketing $ 476,586 $ 422,072 $ 355,474 GAAP sales and marketing as a percentage of revenue 48 % 52 % 59 % Non-GAAP sales and marketing as a percentage of revenue 41 % 44 % 49 % GAAP research and development $ 312,987 $ 300,571 $ 270,982 Stock-based compensation expense (67,961) (68,275) (63,262) Amortization of acquired intangible assets (2,657) (2,757) (3,528) Employer payroll tax on employee stock transactions (3,535) (3,217) (2,474) Acquisition-related expenses (32) (6,370) (5,549) Non-GAAP research and development $ 238,802 $ 219,952 $ 196,169 GAAP research and development as a percentage of revenue 27 % 32 % 38 % Non-GAAP research and development as a percentage of revenue 21 % 23 % 27 % GAAP general and administrative $ 217,513 $ 195,746 $ 166,283 Stock-based compensation expense (53,336) (44,406) (38,974) Employer payroll tax on employee stock transactions (2,086) (1,910) (1,202) Acquisition-related expenses (808) (35) (2,128) Non-GAAP general and administrative $ 161,283 $ 149,395 $ 123,979 GAAP general and administrative as a percentage of revenue 19 % 21 % 23 % Non-GAAP general and administrative as a percentage of revenue 14 % 16 % 17 % 61 Table of Contents Reconciliation of loss from operations and operating margin to non-GAAP income (loss) from operations and non-GAAP operating margin: Year Ended December 31, 2024 2023 2022 (dollars in thousands) Revenue $ 1,151,708 $ 950,010 $ 720,203 Loss from operations (136,423) (215,677) (290,454) Stock-based compensation expense 194,833 179,334 162,886 Amortization of acquired intangible assets 40,794 37,578 38,381 Employer payroll tax on employee stock transactions 9,460 8,433 5,939 Acquisition-related expenses 2,288 8,888 9,402 Non-GAAP income (loss) from operations $ 110,952 $ 18,556 $ (73,846) Operating margin (12 %) (23 %) (40 %) Non-GAAP operating margin 10 % 2 % (10 %) Liquidity and Capital Resources As of December 31, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $821.4 million, which were held in money market funds, U.S. treasury securities, corporate notes and obligations, commercial paper, checking accounts, and savings accounts.
We primarily sell our products on a subscription basis for a fixed fee with pricing generally based on the number and mix of products to which a customer subscribes and the fixed aggregate dollar volume of construction work contracted to run on our platform annually, which we refer to as annual construction volume.
We primarily sell our products on a subscription basis for a fixed fee with pricing generally based on the number and mix of products a customer subscribes to and the fixed aggregate dollar volume of construction work contracted to run on our platform annually, which we refer to as annual construction volume.
Such outflows were partially offset by $372.2 million in maturities of marketable securities, $26.2 million of customer repayments for materials financing, and $5.5 million in sales of marketable securities.
Such outflows were partially offset by $372.2 million of maturities of marketable securities, $26.2 million of customer repayments for materials financing, and $5.5 million in sales of marketable securities.
The expense related to amortization of acquired intangible assets is dependent upon estimates and assumptions, which can vary significantly and are unique to each asset acquired; therefore, we believe that non-GAAP measures that adjust for the amortization of acquired intangible assets provide investors a consistent basis for comparison across accounting periods.
The expense related to amortization of acquired intangible assets is a non-cash expense is and dependent upon estimates and assumptions, which can vary significantly and are unique to each asset acquired; therefore, we believe that non-GAAP measures that adjust for the amortization of acquired intangible assets provide investors a consistent basis for comparison across accounting periods.
While the impact of these developments, including Procore Pay, is not yet material to our business, our future success is dependent on our ability to successfully develop or acquire, market, and sell existing and new products and services to both new and existing customers.
While the impact of these developments, including Procore Pay, are not yet material to our business, our future success is dependent on our ability to successfully develop or acquire, market, and sell existing and new products and services to both new and existing customers.
We expect to maintain this full valuation allowance for our net U.S. deferred tax assets for the foreseeable future. 53 Table of Contents Results of Operations The following tables set forth our consolidated statements of operations data and such data as a percentage of revenue for each of the periods indicated. Certain percentages below may not sum due to rounding.
We expect to maintain this full valuation allowance for our net U.S. deferred tax assets for the foreseeable future. 54 Table of Contents Results of Operations The following tables set forth our consolidated statements of operations data and such data as a percentage of revenue for each of the periods indicated. Certain percentages below may not sum due to rounding.
Because of varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company’s non-cash expenses, we believe that providing non-GAAP financial measures that exclude stock-based compensation expense allow for meaningful comparisons between our operating results from period to period.
Because of varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company’s non-cash expenses, we believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for meaningful comparisons between our operating results from period to period.
Further, as of December 31, 2023, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Further, as of December 31, 2024, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
The increase in revenue from existing customers includes the net benefit of a full year of subscription revenue in 2023 from customers that were newly acquired in 2022 and continued their subscriptions in 2023, and customers that expanded their subscriptions in 2023 through the purchase of additional construction volume or products and services.
The increase in revenue from existing customers includes the net benefit of a full year of subscription revenue in 2024 from customers that were newly acquired in 2023 and continued their subscriptions in 2024, and customers that expanded their subscriptions in 2024 through the purchase of additional construction volume or products and services.
Recent Accounting Pronouncements See “Summary of Significant Accounting Policies” in Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a description of recently issued accounting pronouncements. 65 Table of Contents
Recent Accounting Pronouncements See “Summary of Significant Accounting Policies” in Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a description of recently issued accounting pronouncements. 66 Table of Contents
Net cash provided by operating activities was $92.0 million in 2023 which resulted from a net loss of $189.7 million, adjusted for non-cash charges of $258.3 million and a net cash inflow of $23.4 million from changes in operating expenses and liabilities.
Net cash provided by operating activities was $92.0 million in 2023, which resulted from a net loss of $189.7 million, adjusted for non-cash charges of $258.3 million and a net cash inflow of $23.4 million from changes in operating assets and liabilities.
To help our customers address the variable nature of their construction volume, we offer (a) annual subscription contracts with construction volume over a one-year period; (b) multi-year subscription contracts with construction volume measured annually over successive one-year periods; and (c) pooled volume 49 Table of Contents contracts with fixed flat annual fees based on anticipated construction volume measured over multiple years (typically, two- or three-year periods).
To help our customers address the variable nature of their construction volume, we offer (a) annual subscription contracts with construction volume over a one-year period; (b) multi-year subscription contracts with construction volume measured annually over successive one-year periods; and (c) pooled volume contracts with fixed flat annual fees based on anticipated construction volume measured over multiple years (typically, two- or three-year periods).
We believe our existing cash, cash equivalents, and marketable securities will be sufficient to meet our needs for at least the next 12 months. While we have generated positive cash flows from operations in recent years, we have continued to generate losses from operations, as reflected in our accumulated deficit of $1.1 billion as of December 31, 2023.
We believe our existing cash, cash equivalents, and marketable securities will be sufficient to meet our needs for at least the next 12 months. While we have generated positive cash flows from operations in recent years, we have continued to generate losses from operations, as reflected in our accumulated deficit of $1.2 billion as of December 31, 2024.
We focus exclusively on connecting and empowering the construction industry’s key stakeholders, such as owners, general contractors, specialty contractors, architects, and engineers, to collaborate and access our capabilities from any location, on any internet-connected device.
We focus exclusively on connecting and empowering the construction industry’s key stakeholders, such as owners, general contractors, and specialty contractors, to collaborate and access our capabilities from any location on any internet-connected device.
However, our ability to conduct our operations internationally will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, currencies, cultures, customs, legal, tax and regulatory systems, alternative dispute systems, and commercial markets.
However, our ability to conduct our operations internationally will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, currencies, cultures, customs, and commercial markets, as well as differing legal, tax, regulatory, and alternative dispute systems.
Additionally, sales and marketing expenses include non-personnel-related expenses, such as advertising costs, marketing events, travel, trade shows, and other marketing activities; amortization of acquired customer relationship intangible assets; contractor costs to supplement our staff levels; consulting services; and allocated overhead. We expense advertising and other promotional expenditures as incurred.
Additionally, sales and marketing expenses include non-personnel-related expenses, such as advertising costs, marketing events, travel, trade shows, and other marketing activities; contractor costs to supplement our staff levels; amortization of acquired customer relationship intangible assets; 53 Table of Contents consulting services; and allocated overhead. We expense advertising and other promotional expenditures as incurred.
Research and Development Research and development expenses primarily consist of personnel-related compensation expenses for our engineering, product, and design teams. Additionally, research and development expenses include non-personnel-related expenses, such as contractor costs to supplement our staff levels, consulting services, amortization of certain acquired intangible assets used in research and development activities, and allocated overhead.
Research and Development Research and development expenses primarily consist of personnel-related compensation expenses for our engineering, product, and design teams, net of capitalized software development costs. Additionally, research and development expenses include non-personnel-related expenses, such as contractor costs to supplement our staff levels, consulting services, amortization of certain acquired intangible assets used in research and development activities, and allocated overhead.
A discussion of our financial condition and results of operations for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022 is presented below.
A discussion of our financial condition and results of operations for the fiscal year ended December 31, 2024 compared to the fiscal year ended December 31, 2023 is presented below.
For awards that contain both performance and service vesting conditions, the grant date fair value is recognized as compensation expense using a graded vesting attribution model. No expense is 64 Table of Contents recognized for awards with performance conditions until that condition is probable of being met.
For awards that contain both performance and service vesting conditions, the grant date fair value is recognized as compensation expense using a graded vesting attribution model. No expense is recognized for awards with performance conditions until that condition is probable of being met.
We then divide (a) the total current period ARR by (b) the total prior period ARR to calculate NRR. Our NRR was 114% and 117%, as of December 31, 2023 and 2022, respectively. However, as further described below, we do not believe NRR is a key metric due to the impact of pooled volume contracts.
We then divide (a) the total current period ARR by (b) the total prior period ARR to calculate NRR. Our NRR was 106% and 114%, as of December 31, 2024 and 2023, respectively. However, as further described below, we do not believe NRR is a key metric due to the impact of pooled volume contracts.
We intend to continue to invest additional resources in platform hosting, customer support, and software development as we grow our business and to ensure that our customers are realizing the full benefit of our products. The level and timing of investment in these areas could affect our cost of revenue in the future.
We intend to continue to invest additional resources in platform hosting, customer support, and software development as we grow our business, evolve our GTM operating model, and ensure that our customers are realizing the full benefit of our products. The level and timing of investment in these areas could affect our cost of revenue in the future.
We recognize revenue ratably over the term of the subscription beginning on the date that service is made available to the customer. Stock-Based Compensation Stock-based compensation expense related to stock awards is recognized based on the fair value of the awards granted.
We recognize revenue ratably over the term of the subscription beginning on the date that service is made available to the customer. 65 Table of Contents Stock-Based Compensation Stock-based compensation expense related to stock awards is recognized based on the fair value of the awards granted.
We have made, and plan to continue to make, significant investments in international markets. While these investments may adversely affect our operating results in the near term, we believe they will contribute to our long-term growth.
We have made, and plan to continue to 52 Table of Contents make, significant investments in international markets. While these investments may adversely affect our operating results in the near term, we believe they will contribute to our long-term growth.
Our platform is modernizing and digitizing construction management by enabling real-time access to critical project information, simplifying complex workflows, and facilitating seamless communication among key stakeholders, all of which we believe positions us to serve as the system of record for the construction industry.
Our platform is modernizing and digitizing construction management by enabling timely access to critical project information, simplifying complex workflows, and facilitating seamless communication among relevant stakeholders, all of which we believe positions us to serve as the system of record for the construction industry.
A discussion of our financial condition and results of operations for the fiscal year ended December 31, 2022 compared to the year ended December 31, 2021 has been reported previously under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 1, 2023.
A discussion of our financial condition and results of operations for the fiscal year ended December 31, 2023 compared to the year ended December 31, 2022 has been reported previously under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024.
Our GRR was 95% as of December 31, 2023, 2022, and 2021. Net retention rate (“NRR”) compares ARR from existing customers on a trailing 12-month basis.
Our GRR was 94%, 95%, and 95% as of December 31, 2024, 2023, and 2022, respectively. Net retention rate (“NRR”) compares ARR from existing customers on a trailing 12-month basis.
The $23.4 million of net cash inflows provided as a result of changes in our operating assets and liabilities primarily reflected the following: • a $106.6 million increase in deferred revenue primarily due to the growth of our business and timing of billings; and • a $4.8 million increase in accrued expenses and other liabilities primarily due to the size of bonus and payroll accruals, and cash payments to our vendors.
The $23.4 million of net cash inflows provided as a result of changes in our operating assets and liabilities primarily reflected the following: • a $106.6 million increase in deferred revenue primarily due to the growth of our business and timing of billings; and • a $4.8 million increase in accrued expenses and other liabilities primarily due to personnel-related expenses and timing of cash payments to our vendors.
Customers that contributed more than $100,000 of ARR represented 60%, 57%, and 52% of total ARR in each of the annual periods ending December 31, 2023, 2022, and 2021, respectively.
Customers that contributed more than $100,000 of ARR represented 63%, 60%, and 57% of total ARR in each of the annual periods ending December 31, 2024, 2023, and 2022, respectively.
Our additional future capital requirements will depend on many factors, including our revenue growth rate, new customer acquisition and subscription renewal activity, timing of billing activities, our ability to integrate the companies or technologies we acquire and realize strategic and financial benefits from our investments and acquisitions, other strategic transactions or investments we may enter into, the timing and extent of spending to support further sales and marketing and 61 Table of Contents research and development efforts, general and administrative expenses to support our growth, including international expansion and inflation.
Our additional future capital requirements will depend on many factors, including our revenue growth rate, new customer acquisition and subscription renewal activity, timing of billing activities, our ability to integrate the companies or technologies we acquire and realize strategic and financial benefits from our investments and acquisitions, other strategic transactions or investments we may enter into, the volume and timing of any stock repurchases under our stock repurchase program, the timing and extent of spending to support further sales and marketing and research and development efforts, general and administrative expenses to support our growth (including international expansion), and inflation.
These changes in our operating assets and liabilities were partially offset by the following: • a $35.8 million increase in accounts receivable primarily due to timing of billings and cash receipts from customers from the growth of our business; • a $22.0 million increase in deferred contract cost assets related to commissions as a result of additional customer contracts closed during the period; • an $8.9 million decrease in operating lease liabilities related to lease payments; and • a $3.8 million increase in prepaid expenses and other assets primarily due to timing of cash payments to our vendors.
These changes in our operating assets and liabilities were partially offset by the following: • a $57.5 million increase in accounts receivable primarily due to timing of billings and cash receipts from customers from the growth of our business; • a $13.8 million decrease in operating lease liabilities related to lease payments; • a $9.3 million increase in deferred contract cost assets related to commissions as a result of additional customer contracts closed during the period; and • a $6.4 million increase in prepaid expenses and other assets primarily due to timing of cash payments to our vendors.
We increased our general and administrative headcount by 14% since December 31, 2022 in order to continue to support the efficiency of other departments and the growth of our business.
We increased our general and administrative headcount by 2% since December 31, 2023 in order to continue to support the efficiency of other departments and the growth of our business.
International Growth We see international expansion as a major, and largely greenfield, opportunity for growth as we look to capture a larger part of the worldwide construction market. We have been growing our presence internationally with sales and marketing offices in Sydney, Australia; Toronto, Canada; London, England; Paris, France; Dublin, Ireland; and Dubai, UAE.
International Growth We see international expansion as a major, and largely greenfield, opportunity for growth as we look to capture a larger part of the worldwide construction market. We have an international sales and marketing presence with offices in Sydney, Australia; Toronto, Canada; London, England; Dublin, Ireland; and Dubai, UAE.
You should review the disclosure under Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
You should review the disclosures under the section titled “Special Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K and under Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
We believe that macroeconomic factors have resulted in cautious customer spending, contributing to a decline in the cRPO annual growth rate. During 2023, approximately 34% of the increase was attributable to existing customers and 66% was attributable to new customers acquired during the year.
We believe that macroeconomic factors have resulted in cautious customer spending, contributing to a decline in the cRPO annual growth rate. During 2024, approximately 26% of the increase was attributable to existing customers and 74% was attributable to new customers acquired during the year.
Financing Activities Net cash provided by financing activities of $41.2 million in 2023 consisted of $25.4 million in proceeds from employee purchases under the ESPP and $17.6 million in proceeds from stock option exercises, partially offset by $1.8 million in payments on our finance lease obligations.
Net cash provided by financing activities was $41.2 million in 2023, which primarily consisted of $25.4 million in proceeds from our ESPP and $17.6 million in proceeds from stock option exercises, partially offset by $1.8 million in payments on our finance lease obligations.
The number of customers that contributed more than $1,000,000 of ARR was 62, 47, and 30 as of December 31, 2023, 2022, and 2021, respectively, reflecting year-over-year growth rates of 32% in 2023 and 57% in 2022.
The number of customers that contributed more than $1,000,000 of ARR was 86, 62, and 47 as of December 31, 2024, 2023, and 2022, respectively, reflecting year-over-year growth rates of 39% in 2024 and 32% in 2023.
As of December 31, 2023, we had outstanding letters of credit on an unsecured basis totaling approximately $5.6 million to secure various leased office facilities in the U.S. and Australia.
As of December 31, 2024, we had outstanding letters of credit on an unsecured basis totaling approximately $4.3 million to secure various leased office facilities in the U.S. and Australia.
We believe that macroeconomic factors have resulted in cautious customer spending, contributing to a decline in the cRPO annual growth rate. However, as they develop, we continue to monitor the ways in which such factors may directly or indirectly impact our business, results of operations, and financial condition.
We believe that macroeconomic factors have resulted in cautious customer spending and increased customer pricing sensitivity, contributing to the decline in our cRPO annual growth rate, among other impacts. However, as such factors evolve, we continue to monitor the ways in which they may directly or indirectly impact our business, results of operations, and financial condition.
The following table summarizes our cash flows for the periods presented: Year Ended December 31, 2023 2022 2021 (dollars in thousands) Net cash provided by operating activities $ 92,015 $ 12,608 $ 36,730 Net cash used in investing activities (76,061) (340,476) (541,768) Net cash provided by financing activities 41,165 38,652 711,826 Operating Activities Our largest source of cash from operating activities is collections from the sales of subscriptions to our customers.
The following table summarizes our cash flows for the periods presented: Year Ended December 31, 2024 2023 2022 (dollars in thousands) Net cash provided by operating activities $ 196,172 $ 92,015 $ 12,608 Net cash used in investing activities (150,109) (76,061) (340,476) Net cash provided by financing activities 36,236 41,165 38,652 Operating Activities Our largest source of cash from operating activities is collections from the sales of subscriptions to our customers.
Beyond the next 12 months, we have contractual commitments that we are reasonably likely to incur consisting of operating lease obligations of $41.1 million, finance lease obligations of $56.4 million, and non-cancelable purchase commitments of $22.5 million, as disclosed in Note 6 and Note 11 of the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Beyond the next 12 months, we have net contractual commitments that we are reasonably likely to incur consisting of operating lease obligations of $57.8 million, finance lease obligations of $52.4 million, and non-cancelable purchase 62 Table of Contents commitments of $23.1 million, as disclosed in Note 6 and Note 11 of the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Investing Activities Net cash used in investing activities of $76.1 million in 2023 consisted of cash outflows for purchases of marketable securities of $402.4 million, capitalized software development costs of $34.7 million, originations for materials financing of $24.0 million, purchases of property and equipment of $10.3 million primarily related to improvements to our leased office spaces and computer equipment purchases, and asset acquisitions of $7.8 million.
Net cash used in investing activities of $76.1 million in 2023 consisted of purchases of marketable securities of $402.4 million, capitalized software development costs of $34.7 million, originations for materials financing of $24.0 million, purchases of property and equipment of $10.3 million, and asset acquisitions of $7.8 million.
Subscriptions are sold for a fixed fee and revenue is recognized ratably over the term of the subscription. Our subscriptions generally have annual or multi-year terms, are typically subject to renewal at the end of the subscription term, and are non-cancelable. To the extent we invoice our customers in advance of revenue recognition, we record deferred revenue.
Our subscriptions generally have annual or multi-year terms, are typically subject to renewal at the end of the subscription term, and are non-cancelable. To the extent we invoice our customers in advance of revenue recognition, we record deferred revenue.
Additionally, cost of revenue includes non-personnel-related expenses, such as third-party hosting costs, amortization of acquired technology intangible assets, amortization of capitalized software development costs related to our platform, software license fees, and allocated overhead. We expect our cost of revenue to increase on an absolute dollar basis as our revenue and acquisition activities increase.
Additionally, cost of revenue includes non-personnel-related expenses, such as third-party hosting costs, amortization of capitalized software development costs related to our platform, amortization of acquired technology intangible assets, software license fees, and allocated overhead.
We determine the percentage of non-U.S. revenue based on the billing location of each customer. Fluctuations in foreign currencies may positively or negatively impact the amount of revenue that we report for our foreign subsidiaries upon the translation of these amounts into U.S. Dollars.
Fluctuations in foreign currencies may positively or negatively impact the amount of revenue that we report for our foreign subsidiaries upon the translation of these amounts into U.S. Dollars.
Remaining Performance Obligations Our subscriptions typically have a term of one to three years. The transaction price allocated to RPO under our subscriptions represents the contracted transaction price that has not yet been recognized as revenue, which includes deferred revenue and amounts under non-cancelable subscriptions that will be invoiced and recognized as revenue in future periods.
The transaction price allocated to RPO under our subscriptions represents the contracted transaction price that has not yet been recognized as revenue, which includes deferred revenue and amounts under non-cancelable subscriptions that will be invoiced and recognized as revenue in future periods.
In the next 12 months, we have contractual commitments consisting of operating lease obligations of $12.0 million, finance lease obligations of $3.9 million, and non-cancelable purchase commitments of $37.5 million, as disclosed in Note 6 and Note 11 of the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
In the next 12 months, we have net contractual tenant improvement reimbursements benefit from operating leases of $3.2 million, and net contractual commitments consisting of finance lease obligations of $4.0 million and non-cancelable purchase commitments of $28.7 million, as disclosed in Note 6 and Note 11 of the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Interest Income Interest income consists primarily of interest income earned on our marketable securities, money market funds, and cash savings accounts. Interest Expense Interest expense consists primarily of costs associated with our finance leases. Accretion Income, Net Accretion income, net consists of accretion of discounts, net of amortization of premiums, related to our available-for-sale marketable debt securities.
Interest Expense Interest expense consists primarily of costs associated with our finance leases. Accretion Income, Net Accretion income, net consists of accretion of discounts, net of amortization of premiums, related to our available-for-sale marketable debt securities.
We intend to continue to invest in building additional products, offerings, features, and functionality that expand our capabilities and facilitate the extension of our platform.
We have introduced and continue to develop new products and services organically and through our acquisitions. We intend to continue to invest in building additional products, services, offerings, features, and functionality that expand our capabilities and facilitate the extension of our platform.
Because NRR does not properly capture our customers’ actual construction volume usage under the pool volume model, we do not believe NRR is the best indicator of our ability to retain and grow our customer base.
Because NRR does not properly capture our customers’ actual construction volume usage under the pool volume model, we do not believe NRR is the best indicator of our ability to retain and grow our customer base. Remaining Performance Obligations Our subscriptions typically have a term of one to three years.
See the section titled “Risk Factors” in Part I of this Annual Report on Form 10-K for further discussion. 51 Table of Contents Components of Results of Operations Revenue We generate substantially all of our revenue from subscriptions to access our products and related support.
See the section titled “Risk Factors” in Part I of this Annual Report on Form 10-K for further discussion. Components of Results of Operations Revenue We generate substantially all of our revenue from subscriptions to access our products and related support. Subscriptions are sold for a fixed fee and revenue is recognized ratably over the term of the subscription.
For example, in March 2023, we launched Procore Risk Advisors, a modern construction brokerage that offers insurance and surety solutions; in September 2023, we launched Procore Pay, a payment solution that handles all aspects of the payment processes between general contractors and subcontractors; and in September 2023, we acquired Unearth, a geographic information systems asset management platform that helps general contractors and infrastructure providers connect assets, data, and field teams.
For example, in May 2024, we acquired Intelliwave, a construction materials management company that enhances our Resource Management solution; in September 2023, we acquired Unearth, a geographic information systems asset management platform that helps general contractors and infrastructure providers connect assets, data, and field teams; and in September 2023, we launched Procore Pay, a payment solution that handles all aspects of the payment processes between general contractors and subcontractors.
(2) Includes amortization of acquired intangible assets as follows: Year Ended December 31, 2023 2022 2021 (in thousands) Cost of revenue $ 22,396 $ 22,428 $ 7,522 Sales and marketing 12,425 12,425 3,600 Research and development 2,757 3,528 2,674 Total amortization of acquired intangible assets $ 37,578 $ 38,381 $ 13,796 (3) Includes employer payroll tax on employee stock transactions as follows: Year Ended December 31, 2023 2022 2021 (in thousands) Cost of revenue $ 540 $ 308 $ 457 Sales and marketing 2,766 1,955 2,325 Research and development 3,217 2,474 2,606 General and administrative 1,910 1,202 1,127 Total employer payroll tax on employee stock transactions $ 8,433 $ 5,939 $ 6,515 (4) Includes acquisition-related expenses as follows: Year Ended December 31, 2023 2022 2021 (in thousands) Cost of revenue $ — $ — $ 2 Sales and marketing 2,483 1,725 488 Research and development 6,370 5,549 1,348 General and administrative 35 2,128 7,442 Total acquisition-related expenses $ 8,888 $ 9,402 $ 9,280 55 Table of Contents Comparison of the Years Ended December 31, 2023 and 2022 Revenue Year Ended December 31, Change 2023 2022 Dollar Percent (dollars in thousands) Revenue $ 950,010 $ 720,203 $ 229,807 32 % In 2023, our revenue increased by $229.8 million, or 32%, compared to 2022, of which approximately 68% was attributable to revenue from existing customers and approximately 32% was attributable to revenue from new customers acquired during 2023.
(2) Includes amortization of acquired intangible assets as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Cost of revenue $ 25,437 $ 22,396 $ 22,428 Sales and marketing 12,700 12,425 12,425 Research and development 2,657 2,757 3,528 Total amortization of acquired intangible assets $ 40,794 $ 37,578 $ 38,381 (3) Includes employer payroll tax on employee stock transactions as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Cost of revenue $ 612 $ 540 $ 308 Sales and marketing 3,227 2,766 1,955 Research and development 3,535 3,217 2,474 General and administrative 2,086 1,910 1,202 Total employer payroll tax on employee stock transactions $ 9,460 $ 8,433 $ 5,939 (4) Includes acquisition-related expenses as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Sales and marketing 1,448 2,483 1,725 Research and development 32 6,370 5,549 General and administrative 808 35 2,128 Total acquisition-related expenses $ 2,288 $ 8,888 $ 9,402 56 Table of Contents Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, Change 2024 2023 Dollar Percent (dollars in thousands) Revenue $ 1,151,708 $ 950,010 $ 201,698 21 % In 2024, our revenue increased by $201.7 million, or 21%, compared to 2023, of which approximately 64% was attributable to revenue from existing customers and approximately 36% was attributable to revenue from new customers acquired during 2024.
The following table presents our cRPO and non-current RPO at the end of each period: Year Ended December 31, % Growth Year Ended December 31, 2023 2022 2021 2023 2022 (dollars in thousands) cRPO $ 698,284 $ 561,200 $ 418,800 24 % 34 % Non-current RPO 302,215 236,300 183,800 28 % 29 % Total RPO $ 1,000,499 $ 797,500 $ 602,600 25 % 32 % We believe that cRPO is a key metric to track our ability to win fixed revenue commitments from new customers and to expand and retain existing customers. cRPO increased by $137.1 million in 2023 and $142.4 million in 2022, representing a year-over-year growth rate of 24% in 2023 and 34% in 2022.
Our cRPO represents future revenue under existing contracts that is expected to be recognized as revenue in the next 12 months. 51 Table of Contents The following table presents our cRPO and non-current RPO at the end of each period: Year Ended December 31, % Growth Year Ended December 31, 2024 2023 2022 2024 2023 (dollars in thousands) cRPO $ 829,666 $ 698,284 $ 561,200 19 % 24 % Non-current RPO 456,801 302,215 236,300 51 % 28 % Total RPO $ 1,286,467 $ 1,000,499 $ 797,500 29 % 25 % We believe that cRPO is a key metric to track our ability to win fixed revenue commitments from new customers and to expand and retain existing customers. cRPO increased by $131.4 million in 2024 and $137.1 million in 2023, representing a year-over-year growth rate of 19% in 2024 and 24% in 2023.
Stock-based compensation expense includes the net effects of capitalization and amortization of stock-based compensation expense related to capitalized software and cloud-computing arrangement implementation costs. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of the compensation provided to our employees.
Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of the compensation provided to our employees.
Customers can invite all project participants to engage with our platform as part of a project team, including customers’ employees and collaborators, who are other project participants who engage with our platform but do not pay us for such use.
Customers typically invite participants to join our platform, including their employees and collaborators, who are other project participants that engage with our platform but do not pay us for such use.
Year Ended December 31, 2023 2022 2021 (in thousands) Revenue $ 950,010 $ 720,203 $ 514,821 Cost of revenue (1)(2)(3)(4) 174,462 148,416 98,312 Gross profit 775,548 571,787 416,509 Operating expenses Sales and marketing (1)(2)(3)(4) 494,908 424,976 308,511 Research and development (1)(2)(3)(4) 300,571 270,982 237,290 General and administrative (1)(3)(4) 195,746 166,283 156,635 Total operating expenses 991,225 862,241 702,436 Loss from operations (215,677) (290,454) (285,927) Interest income 19,779 5,826 175 Interest expense (1,957) (2,135) (2,328) Accretion income, net 9,794 2,035 — Other expense, net (360) (1,737) (843) Loss before provision for (benefit from) income taxes (188,421) (286,465) (288,923) Provision for (benefit from) income taxes 1,273 466 (23,758) Net loss $ (189,694) $ (286,931) $ (265,165) Year Ended December 31, 2023 2022 2021 (as a percentage of revenue) Revenue 100 % 100 % 100 % Cost of revenue (1)(2)(3)(4) 18 % 21 % 19 % Gross profit 82 % 79 % 81 % Operating expenses Sales and marketing (1)(2)(3)(4) 52 % 59 % 60 % Research and development (1)(2)(3)(4) 32 % 38 % 46 % General and administrative (1)(3)(4) 21 % 23 % 30 % Total operating expenses 104 % 120 % 136 % Loss from operations (23 %) (40 %) (56 %) Interest income 2 % 1 % 0 % Interest expense 0 % 0 % 0 % Accretion income, net 1 % 0 % 0 % Other expense, net 0 % 0 % 0 % Loss before provision for (benefit from) income taxes (20 %) (40 %) (56 %) Provision for (benefit from) income taxes 0 % 0 % (5 %) Net loss (20 %) (40 %) (52 %) 54 Table of Contents (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2023 2022 2021 (in thousands) Cost of revenue $ 11,491 $ 7,253 $ 8,094 Sales and marketing 55,162 53,397 68,755 Research and development 68,275 63,262 85,040 General and administrative 44,406 38,974 65,272 Total stock-based compensation expense* $ 179,334 $ 162,886 $ 227,161 * Includes amortization of capitalized stock-based compensation of $4.5 million for the year ended December 31, 2023, which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs.
Year Ended December 31, 2024 2023 2022 (in thousands) Revenue $ 1,151,708 $ 950,010 $ 720,203 Cost of revenue (1)(2)(3) 205,612 174,462 148,416 Gross profit 946,096 775,548 571,787 Operating expenses Sales and marketing (1)(2)(3)(4) 552,019 494,908 424,976 Research and development (1)(2)(3)(4) 312,987 300,571 270,982 General and administrative (1)(3)(4) 217,513 195,746 166,283 Total operating expenses 1,082,519 991,225 862,241 Loss from operations (136,423) (215,677) (290,454) Interest income 23,694 19,779 5,826 Interest expense (1,899) (1,957) (2,135) Accretion income, net 13,583 9,794 2,035 Other expense, net (3,136) (360) (1,737) Loss before provision for income taxes (104,181) (188,421) (286,465) Provision for income taxes 1,775 1,273 466 Net loss $ (105,956) $ (189,694) $ (286,931) Year Ended December 31, 2024 2023 2022 (as a percentage of revenue) Revenue 100 % 100 % 100 % Cost of revenue (1)(2)(3) 18 % 18 % 21 % Gross profit 82 % 82 % 79 % Operating expenses Sales and marketing (1)(2)(3)(4) 48 % 52 % 59 % Research and development (1)(2)(3)(4) 27 % 32 % 38 % General and administrative (1)(3)(4) 19 % 21 % 23 % Total operating expenses 94 % 104 % 120 % Loss from operations (12 %) (23 %) (40 %) Interest income 2 % 2 % 1 % Interest expense 0 % 0 % 0 % Accretion income, net 1 % 1 % 0 % Other expense, net 0 % 0 % 0 % Loss before provision for income taxes (9 %) (20 %) (40 %) Provision for income taxes 0 % 0 % 0 % Net loss (9 %) (20 %) (40 %) 55 Table of Contents (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Cost of revenue $ 15,478 $ 11,491 $ 7,253 Sales and marketing 58,058 55,162 53,397 Research and development 67,961 68,275 63,262 General and administrative 53,336 44,406 38,974 Total stock-based compensation expense* $ 194,833 $ 179,334 $ 162,886 *Includes amortization of capitalized stock-based compensation of $8.0 million and $4.5 million, respectively, for the years ended December 31, 2024 and 2023, which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs, and was primarily amortized in cost of revenue.
The $61.7 million of net cash inflows provided as a result of changes in our operating assets and liabilities primarily reflected the following: • a $97.0 million increase in deferred revenue primarily due to the growth of our business and timing of billings; and • a $34.6 million increase in accrued expenses and other liabilities primarily due to personnel-related expenses and timing of cash payments to our vendors.
The $24.2 million of net cash inflows provided as a result of changes in our operating assets and liabilities primarily reflected the following: • a $79.1 million increase in deferred revenue primarily due to the growth of our business and timing of billings; and • a $19.7 million increase in accounts payable primarily due to timing of cash payments to our vendors.
These changes in our operating assets and liabilities were partially offset by the following: • a $57.5 million increase in accounts receivable primarily due to the growth of our business and timing of billings and cash receipts from customers; • a $13.8 million decrease in operating lease liabilities related to lease payments; • a $9.3 million increase in deferred contract cost assets related to commissions as a result of additional customer contracts closed during the period; and • a $6.4 million increase in prepaid expenses and other current assets primarily due to timing of cash payments to our vendors. 62 Table of Contents Net cash provided by operating activities was $12.6 million in 2022, which resulted from a net loss of $286.9 million, adjusted for non-cash charges of $237.8 million and a net cash inflow of $61.7 million from changes in operating assets and liabilities.
These changes in our operating assets and liabilities were partially offset by the following: • a $39.5 million increase in accounts receivable primarily due to the growth of our business and timing of billings and cash receipts from customers; • a $15.5 million decrease in accrued expenses and other liabilities primarily due to the size and timing of bonus accruals, payroll accruals, and cash payments to our vendors; • a $9.0 million increase in deferred contract cost assets related to commissions as a result of additional customer contracts closed during the period; • a $7.3 million decrease in operating lease liabilities related to lease payments; and 63 Table of Contents • a $3.3 million increase in prepaid expenses and other current assets primarily due to timing of cash payments to our vendors.
We intend to efficiently drive new customer acquisitions by continuing to invest across our sales and marketing engine to engage our prospective customers, increase brand awareness, and drive adoption of our products, services, and platform.
We drive new customer acquisitions by investing across our sales and marketing engine to engage prospective customers, increase brand awareness, and drive adoption of our products, services, and platform. We drive retention of existing customers and expansion of their use of our products, services, and platform by focusing on our customers’ success.
ARR should be viewed independently of revenue determined in accordance with accounting principles generally accepted in the U.S. (“GAAP” or “U.S. GAAP”) and does not represent our U.S. GAAP revenue on an annualized basis. ARR is not intended to be a replacement or forecast of revenue.
GAAP”) and does not represent our U.S. GAAP revenue on an annualized basis. ARR is not intended to be a replacement or forecast of revenue.
We expect sales and marketing expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue, as we increase our investment in sales and marketing efforts over the foreseeable future, primarily from increased headcount in sales and marketing as well as investment in marketing to drive customer growth.
We expect sales and marketing expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue, as our business continues to grow, as we evolve our GTM operating model, and as we increase our investment in sales and marketing to drive customer growth.
As a result of our focus on acquiring new customers and expansion of existing customers’ use of our platform, we have also seen an increase in the number of customers that contributed more than $100,000 of ARR, which was 2,008, 1,576, and 1,111 as of December 31, 2023, 2022, and 2021, respectively, reflecting year-over-year growth rates of 27% in 2023 and 42% in 2022.
Despite macroeconomic challenges, we have seen an increase in the number of customers that contributed more than $100,000 of ARR, which was 2,333, 2,008, and 1,576 as of December 31, 2024, 2023, and 2022, respectively, reflecting year-over-year growth rates of 16% in 2024 and 27% in 2023.
We expect research and development expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue for the foreseeable future as we continue to invest in headcount to build, enhance, maintain, and scale our products, services, and platform. 52 Table of Contents General and Administrative General and administrative expenses primarily consist of personnel-related compensation expenses for our human resources, IT, finance, legal, executive, and other administrative functions.
We expect research and development expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue for the foreseeable future as we continue to build, enhance, maintain, and scale our products, services, and platform.
In short, we build the software for the people that build the world. We serve customers ranging from small businesses managing a few million dollars of annual construction volume to global enterprises managing billions of dollars of annual construction volume.
In short, we build the software for the people that build the world. Our customers range from small businesses managing a few million dollars of annual construction volume to global enterprises managing billions of dollars of annual construction volume. Our core customers are owners, general contractors, and specialty contractors operating across the residential and non-residential segments of the construction industry.
Our products are offered on our cloud-based platform and are designed to be easy to configure and deploy. Our users can access our products on computers, smartphones, and tablets through any web browser or from our mobile application available for both the iOS and Android platforms.
Our users can access our products on computers, smartphones, and tablets through any web browser or from our mobile application available for both the iOS and Android platforms. We generate substantially all of our revenue from subscriptions to access our products.
Customers that contributed more than $1,000,000 of ARR represented 14%, 12%, and 10% of total ARR in each of the annual periods ending December 31, 2023, 2022, and 2021, respectively. All aforementioned customer counts exclude Levelset and Esticom customers that do not have standard Procore annual contracts.
Customers that contributed more than $1,000,000 of ARR represented 17%, 14%, and 12% of total ARR in each of the annual periods ending December 31, 2024, 2023, and 2022, respectively.
For example, if ARR is measured during the first year of a multi-year contract, the first-year subscription fees are used to calculate ARR. ARR at the end of a particular period includes the annualized dollar value of subscriptions for which the term has not ended, and subscriptions for which we are negotiating a subscription renewal.
For multi-year subscriptions, ARR at the end of a particular period is measured by using the stated contractual subscription fees as of the period end date on which ARR is measured. For example, if ARR is measured during the first year of a multi-year contract, the first-year subscription fees are used to calculate ARR.
We have also developed focused sales and marketing efforts in Germany, where we do not maintain an office location. As a result of our international efforts, we support multiple languages and currencies. Non-U.S. revenue as a percentage of our total revenue was 14% for the years ended December 31, 2023 and 2022, respectively .
As a result of our international efforts, we support multiple languages and currencies. Non-U.S. revenue as a percentage of our total revenue was 15% and 14% for the years ended December 31, 2024 and 2023, respectively . We determine the percentage of non-U.S. revenue based on the billing location of each customer.
As of December 31, 2023, 2022, and 2021, the number of customers on our platform was 16,367, 14,488, and 12,193, respectively, reflecting year-over-year growth rates of 13% in 2023 and 19% in 2022.
As of December 31, 2024, 2023, and 2022, the number of customers on our platform was 17,088, 16,367, and 14,488, respectively, reflecting year-over-year growth rates of 4% in 2024 and 13% in 2023. Our total customer count is heavily influenced by the number of SMB customers we add in a given period.
Our ability to continue to grow our business and serve the broader needs of the construction industry depends on acquiring new customers, customers purchasing new products or signing up for new services, customers renewing and expanding their use of existing products and services, and maintaining or increasing the price of our existing products and services.
Our ability to generate revenue, continue to grow our business, and serve the broader needs of the construction industry depends on our ability to efficiently acquire new customers, retain existing customers and expand their use of our products, services, and platform, and maintain or increase the pricing of our products and services.
The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.
A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
We expect general and administrative expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue, as we continue to increase the size of our general and administrative functions to support the growth of our business, including our international expansion.
We expect general and administrative expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue, as our business continues to grow, including in relation to our international expansion. Interest Income Interest income consists primarily of interest income earned on our marketable securities, money market funds, and cash savings accounts.
Operating Expenses Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. For each of these categories of expense, personnel-related compensation expenses are the most significant component, which include salaries, stock-based compensation, commissions, benefits, payroll taxes, and bonuses.
For each of these categories of expense, personnel-related compensation expenses are the most significant component, which include salaries, stock-based compensation, commissions, benefits, payroll taxes, bonuses, and severance costs incurred related to the restructuring event in January 2024, which is described in Note 17 of our consolidated financial statements.
Year Ended December 31, Change 2023 2022 Dollar Percent (dollars in thousands) General and administrative $ 195,746 $ 166,283 $ 29,463 18 % The increase in general and administrative expenses during 2023 was primarily attributable to a $23.4 million increase in personnel-related expenses, including increases of $17.4 million in salaries and wages and $5.3 million in stock-based compensation expense driven by headcount and merit increases.
Year Ended December 31, Change 2024 2023 Dollar Percent (dollars in thousands) General and administrative $ 217,513 $ 195,746 $ 21,767 11 % The increase in general and administrative expenses during 2024 was primarily attributable to an increase of $19.2 million in personnel-related expenses, including increases of $9.4 million in salaries and wages, $8.9 million in stock-based compensation expense, and $0.8 million in severance costs incurred related to the restructuring event in January 2024.
The increase in general and administrative expenses was also attributable to a $7.0 million increase in bad debt expenses relating to our materials financing receivables, which we do not expect to collect. The increase in general and administrative expenses was partially offset by a decrease of $2.1 million in acquisition-related expenses.
The increases in general and administrative expenses were partially offset by a $7.1 million decrease in bad debt expenses primarily relating to the receivables from our materials financing business, which we ceased originations under in the fourth quarter of 2023.
Acquisition-related expenses include external and incremental transaction costs, such as legal and due diligence costs, and retention payments. These expenses are unpredictable and generally would not have otherwise been incurred in the periods presented as part of our continuing operations.
These expenses are unpredictable and generally would not have otherwise been incurred in the 59 Table of Contents periods presented as part of our continuing operations. In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition-related expenses, may not be indicative of such future costs.
Substantially all awards granted subsequent to the IPO vest based on continued service, which is generally over four years. In 2022 and 2023 we granted PSUs to certain employees, which vest based on the achievement of certain operating performance targets. Such awards also require the employees' continued service through the date the related shares vest.
We account for forfeitures as they occur instead of estimating the number of awards expected to be forfeited. In 2022, we began granting PSUs to certain employees, which vest based on the achievement of certain operating performance targets. Such awards also require the employees' continued service through the date the related shares vest.
Macroeconomic Factors Macroeconomic and geopolitical factors such as trends within the commercial construction industry, rising inflation, rising interest rates, volatility in capital markets, bank failures, fluctuations in foreign exchange rates, global pandemics (such as the COVID-19 pandemic), and wars and other conflicts (such as the Russia-Ukraine war) may impact our customers’ spending as well as our operating expenses and cash flows.
Macroeconomic Factors Macroeconomic factors and geopolitical events that impact the construction industry, such as elevated inflation and responses by governments to address it, higher interest rates than we've seen in recent history, volatility in capital markets, bank failures, fluctuations in foreign exchange rates, global pandemics, trade wars or shifting tariffs, evolving and potentially conflicting regulatory requirements, and wars and other conflicts may impact our customers’ spending as well as our operating expenses and cash flows.
Net cash used in investing activities of $340.5 million in 2022 consisted of purchases of marketable securities of $369.2 million, capitalized software development costs of $33.6 million, originations for materials financing of $23.5 million, purchases of property and equipment of $15.8 million, and purchases of strategic investments of $4.0 million.
Investing Activities Net cash used in investing activities of $150.1 million in 2024 consisted of cash outflows for purchases of marketable securities of $491.5 million, capitalized software development costs of $49.5 million, business combinations of $25.9 million, purchases of property and equipment of $19.1 million, asset acquisitions of $3.8 million, and purchases of strategic investments of $2.4 million.
The increase in cost of revenue was also attributable to a $7.4 million increase in amortization of capitalized software development costs, and a $6.8 million increase in third-party cloud hosting and related services as we grow our customer base.
The increase in cost of revenue was also attributable to a $9.6 million increase in third-party cloud hosting and related services as we grow our customer base; a $4.1 million increase in personnel-related expenses, including increases of $2.7 million in salaries and wages, $0.9 million in stock-based compensation expense, and $0.3 million in severance costs incurred related to the restructuring event in January 2024; and a $3.0 million increase in amortization of developed technology intangible assets.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThis exposure is the result of selling in multiple currencies and payment of personnel-related expenses and other operating expenses in countries where the functional currency is the local currency. Changes in foreign currency exchange rates could have an adverse impact on our financial results and cash flow.
Biggest changeOur results of current and future operations and cash flows are, therefore, subject to the risk of fluctuations in foreign currency exchange rates. This exposure is the result of selling in multiple currencies and payment of personnel-related expenses and other operating expenses in countries where the functional currency is the local currency.
Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. As of December 31, 2023, a hypothetical 100 basis points increase or decrease in interest rates would not have a material impact on the fair market value of our portfolio.
Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. As of December 31, 2024, a hypothetical 100 basis points increase or decrease in interest rates would not have a material impact on the fair market value of our portfolio.
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, results of operations, or financial condition. 66 Table of Contents
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, results of operations, or financial condition. 67 Table of Contents
Interest Rate Risk We had cash, cash equivalents, and marketable securities of $678.0 million as of December 31, 2023. Cash, cash equivalents, and marketable securities consist of money market funds, U.S. treasury securities, corporate notes and obligations, time deposits, commercial paper, checking accounts, and savings accounts. The cash and cash equivalents are held for working capital and general corporate purposes.
Interest Rate Risk We had cash, cash equivalents, and marketable securities of $821.4 million as of December 31, 2024. Cash, cash equivalents, and marketable securities consist of money market funds, U.S. treasury securities, corporate notes and obligations, commercial paper, checking accounts, and savings accounts. The cash and cash equivalents are held for working capital and general corporate purposes.
These exposures may change over time as business practices evolve and economic conditions change. As the impact of foreign currency exchange rates has not been material to our historical operating results, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant.
As the impact of foreign currency exchange rates has not been material to our historical operating results, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant.
Our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations, which are primarily in the U.S., Australia, Canada, England, Mexico, Egypt, Singapore, France, Ireland, and the UAE. Our results of current and future operations and cash flows are, therefore, subject to the risk of fluctuations in foreign currency exchange rates.
Our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations, which are primarily in the U.S., Australia, Canada, England, Egypt, Singapore, France, Ireland, Czech Republic, Costa Rica, India, and the UAE.
Added
Changes in foreign currency exchange rates could have an adverse impact on our financial results and cash flow. These exposures may change over time as business practices evolve and economic conditions change.

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