What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-26 · 129 added, 107 removed, 437 unchanged (35% of the section changed)

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Our mission is to connect everyone in construction on a global platform.

We are the leading global provider of cloud-based construction management software, and are helping transform one of the oldest, largest, and least digitized industries in the world.

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.

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 are also continuing to develop other programs and services to address related challenges faced by the construction industry’s key stakeholders.

Adoption of our products, services, and platform helps our customers increase productivity and efficiency, reduce rework and costly delays, improve safety and compliance, and enhance financial transparency and accountability.

We are the leading global provider of construction management software, and are helping transform one of the oldest, largest, and least digitized industries in the world.

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 a critical system of record and collaboration for the construction industry.

We also continue to develop other products and services to address related challenges faced by the construction industry’s key stakeholders.

Our products, services, and platform help our customers increase productivity and efficiency, reduce rework and costly delays, improve safety and compliance, and enhance financial transparency and accountability.

In short, we build the software for the people that build the world.

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As our customers subscribe to additional products or increase the annual construction volume contracted to run on our platform, we generate more revenue.

We do not provide refunds for unused construction volume, or charge customers based on consumption or on a per-project basis.

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.

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.

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.

We do not provide refunds for unused construction volume.

We generally do not charge customers based on consumption or on a per-project basis.

Our business model is designed to encourage rapid, widespread adoption of our products by allowing for unlimited users.

We typically do not charge a per-seat or per-user fee, meaning that 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.

We offer access to our products on a per-user basis to certain of our owner customers who have preferred to purchase access on a per-user basis.

Customers are able to invite project 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.

Multiple participants can be customers on the same project, which allows each of them to manage their own discrete workflows for the project and retain access to project information for the duration of their subscription while allowing us to receive revenue from multiple customers on the same project independent of seat count.

Certain Factors Affecting Our Performance

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We drive retention of existing customers and expansion of their use of our products, services, and platform by focusing on our customers’ success.

To support these efforts, in July 2024 we began to evolve our GTM operating model by, among other things, transitioning to a general manager model, with general managers for our North America, Europe, Asia-Pacific, and Middle East regions and our public sector business, each of whom will be empowered to assess and deploy the appropriate strategies and tactics for customers within their respective regions.

We are also adding new product and technical specialists to our GTM teams, who we believe can add value for our customers by matching the evolving needs of our customers’ diverse buyer personas with our products and services, and helping our customers understand and implement the full potential of our platform.

Evolving our GTM operating model involves new investment, particularly as we increase our sales headcount, ramp and invest in additional enablement for our sales teams, and add the new specialists to our teams.

We believe that these investments will allow us to build stronger and deeper customer relationships and improve our operating efficiency over time which, in turn, will result in better customer experiences and provide additional value to our customers, some of whom continue to face macroeconomic and other pressures that have negatively impacted their spending decisions.

We anticipate some disruptions and adverse impacts to our financial and operating results in the near-term as we invest in and implement the evolved GTM operating model.

Over the longer term, if we fail to successfully implement, or realize the benefits of, our evolved GTM operating model, 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 will be adversely affected, potentially materially.

Notwithstanding these risks, we believe that implementing the evolved GTM operating model will improve our long-term operating efficiency, best position us for sustainable long-term growth, and enhance our ability to capture our large market opportunity.

To support these efforts, we evolved our GTM operating model by, among other things, transitioning to a general manager model.

We added new product and technical specialists to our GTM teams to match the evolving needs of our customers’ diverse buyer personas with our products and services, and to help our customers understand and implement the full potential of our platform.

Evolving our GTM operating model required new investment as we increased our sales headcount, ramped and invested in additional enablement for our sales teams, and added the new specialists to our teams.

We believe that these investments have allowed, and will continue to allow, us to build stronger and deeper customer relationships and provide additional value to our customers.

We have seen, and may continue to see, some disruptions and adverse impacts to our financial and operating results in the near-term in connection with the evolved GTM operating model.

Over the longer term, if we fail to realize the benefits of our evolved GTM operating model, 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 will be adversely affected, potentially materially.

Notwithstanding these risks, we believe that the evolved GTM operating model will improve our long-term operating efficiency, best position us for sustainable long-term growth, and enhance our ability to capture our large market opportunity.

Despite macroeconomic challenges, we have seen an increase in the number of customers that contributed more than $100,000 of ARR, which was 2,710, 2,333, and 2,008 as of December 31, 2025, 2024, and 2023, respectively, reflecting year-over-year growth rates of 16% in 2025 and 16% in 2024.

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Our total customer count is heavily influenced by the number of SMB customers we add in a given period.

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.

SMB customers represent a small portion of our total ARR, whereas Enterprise and Mid Market customers represent the vast majority of our total ARR.

For that reason, we do not believe our total customer count is an accurate representation of our business performance and plan to discontinue the disclosure of total customer count starting in 2026.

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, which has grown from 650 at the time of our IPO to more than 2,700 customers today.

We began to disclose this metric on a quarterly basis starting in the second fiscal quarter of 2024 and plan to continue sharing this metric on a quarterly basis going forward.

All aforementioned customer counts exclude customers acquired from business combinations that do not have standard Procore annual contracts.

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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.

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.

ARR should be viewed independently of revenue determined in accordance with accounting principles generally accepted in the U.S.

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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.

Our NRR was 106% as of both December 31, 2025 and 2024.

However, as further described below, we do not believe NRR is a key metric due to the impact of pooled volume contracts.

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Pooled volume contracts allow our customers to avoid defining their construction volume commitments in a given year and the attendant risk of their construction volume usage exceeding their contracted-for amount.

With pooled volume contracts, our customers can benefit from paying the same amount over multi-year periods regardless of any changes in their project portfolios.

Pooled volume contracts may also help these customers secure volume-based price discounts from us at contract inception, as well as allow us to secure larger up-front commitments from these customers.

With pooled volume contracts, our customers can benefit from paying the same amount over multi-year periods regardless of any changes in their project portfolios, as long as they don’t exceed the total multi-year pooled volume.

Pooled volume contracts may also help these customers secure volume-based price discounts from us at contract inception, as well as allow us to secure larger upfront commitments from these customers.

In pooled volume contracts, NRR does not capture a customer’s increase in construction volume usage because the fixed annual fees in these arrangements result in 100% NRR.

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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.

However, as our average contract duration continues to lengthen due to increased purchases of multi-year subscriptions, our cRPO growth rate may not directly correlate with our actual or expected revenue growth in current or future periods.

cRPO increased by $179.6 million in 2025 and $131.4 million in 2024, representing a year-over-year growth rate of 22% in 2025 and 19% in 2024.

We believe that macroeconomic factors have resulted in cautious customer spending, contributing to a decline in the cRPO annual growth rate.

During 2025, approximately 41% of the increase was attributable to existing customers and 59% was attributable to new customers acquired during the year.

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Continued Technology Innovation and Strategic Expansion of Our Products and Services

We plan to continue to invest in technology innovation and product development to enhance the capabilities of our platform.

We plan to continue to invest in technology innovation and product development, including AI features and products, to enhance the capabilities of our platform.

Additional features and products will also enable customers and collaborators to manage new workflows on our platform and allow us to attract a broader set of stakeholders.

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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.

For example, in May 2024, we acquired Intelliwave, a construction materials management company that enhances our Resource Management solution;

For example, in January 2026, we acquired Datagrid, a leader in agentic AI solutions for the construction industry;

in January 2025, we acquired Novorender, a leader in advanced BIM rendering technology, to enhance our capabilities for large-scale constructions projects;

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;

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As a result of our international efforts, we support multiple languages and currencies.

revenue as a percentage of our total revenue was 15% and 14% for the years ended December 31, 2024 and 2023, respectively .

percentage of our total revenue was 15% for both of the years ended December 31, 2025 and 2024 .

We determine the percentage of non-U.S.

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Furthermore, we believe global demand for our products, services, and platform will continue to increase as we expand our international sales and marketing efforts, and the awareness of our products, services, and platform grows.

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.

We have made, and plan to continue to

make, significant investments in international markets.

However, our ability to conduct our business 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.

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.

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.

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.

Macroeconomic factors and geopolitical events that impact the construction industry, such as elevated inflation and responses by governments to address it, changing interest rates, 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.

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.

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Cost of Revenue

Cost of revenue primarily consists of personnel-related compensation expenses for our customer support team, including salaries, benefits, stock-based compensation, payroll taxes, commissions, and bonuses.

Cost of revenue primarily consists of personnel-related compensation expenses for our customer support team, including salaries, stock-based compensation, benefits, payroll taxes, commissions, and bonuses.

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.

Cost of revenue also includes severance costs incurred related to the restructuring event in January 2024, which is described in Note 17 of our consolidated financial statements.

We expect our cost of revenue to increase on an absolute dollar basis as our revenue and acquisition activities increase.

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.

We intend to continue to invest additional resources in platform hosting, customer support, and software development as we grow our business, support 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.

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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, bonuses, and severance costs incurred related to the restructuring event in January 2024, which is described in Note 17 of our consolidated financial statements.

Sales and Marketing

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contractor costs to supplement our staff levels;

amortization of acquired customer relationship intangible assets;

consulting services;

amortization of acquired customer relationship intangible assets;

and allocated overhead.

We expense advertising and other promotional expenditures as incurred.

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.

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 support our GTM operating model, and as we increase our investment in sales and marketing to drive customer growth.

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.

Additionally, research and development expenses include non-personnel-related expenses, such as contractor costs to supplement our staff levels;

computer software expenses;

consulting services;

amortization of certain acquired intangible assets used in research and development activities;

and allocated overhead.

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.

General and Administrative

General and administrative expenses primarily consist of personnel-related compensation expenses for our IT, human resources, finance, legal, executive, and other administrative functions.

Additionally, general and administrative expenses include non-personnel-related expenses, such as professional fees for audit, legal, tax, and other external consulting services, including acquisition-related transaction expenses;

General and administrative expenses primarily consist of personnel-related compensation expenses for our information technology, human resources, finance, executive, legal, and other administrative functions.

Additionally, general and administrative expenses include non-personnel-related expenses, such as professional fees for audit, legal, tax, and other external consulting services;

computer software expenses;

costs associated with operating as a public company, including insurance costs, professional services, investor relations, and other compliance costs;

property and use taxes;

licenses, travel, and entertainment costs;

travel and entertainment costs;

acquisition-related transaction expenses;

and allocated overhead.

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Accretion income, net consists of accretion of discounts, net of amortization of premiums, related to our available-for-sale marketable debt securities.

Other Expense, Net

Other expense, net primarily consists of gains or losses on foreign currency transactions, unrealized gains or losses on equity securities, and miscellaneous other income and expenses.

Other Income (Expense), Net

Other income (expense), net primarily consists of gains or losses on foreign currency transactions, unrealized gains or losses on equity securities, and miscellaneous other income and expenses.

Provision for Income Taxes

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Accretion income, net 8,265 13,583 9,794

Other expense, net (3,136) (360) (1,737)

Other income (expense), net 2,309 (3,136) (360)

Loss before provision for income taxes (93,981) (104,181) (188,421)

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Accretion income, net 1 % 1 % 1 %

Other expense, net 0 % 0 % 0 %

Other income (expense), net 0 % 0 % 0 %

Loss before provision for income taxes (7 %) (9 %) (20 %)

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In 2025, our revenue increased by $170.8 million, or 15%, compared to 2024, of which approximately 49% was attributable to revenue from existing customers and approximately 51% was attributable to revenue from new customers acquired during 2025.

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.

Revenue from existing customers includes the net benefit of a full year of subscription revenue in 2025 from customers that were newly acquired in 2024 and continued their subscriptions in 2025, and customers that expanded their subscriptions in 2025 through the purchase of additional construction volume or products and services.

Cost of Revenue, Gross Profit, and Gross Margin

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Gross margin 80 % 82 %

The increase in cost of revenue during 2024 was primarily attributable to an increase of $13.7 million in amortization of capitalized software development costs.

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.

Our cost of revenue headcount remained consistent since December 31, 2023, as we continue to focus on improving operating efficiency.

The increase in cost of revenue during 2025 was primarily attributable to an increase of $31.4 million in personnel-related expenses, including increases of $27.1 million in salaries and wages and $4.1 million in stock-based compensation expense.

The increase in cost of revenue was also attributable to a $18.6 increase in amortization of capitalized software development costs, a $11.8 million increase in third-party cloud hosting and related services as we grow our customer base, and a $4.4 million increase in amortization of developed technology intangible assets.

We increased our cost of revenue headcount by 21% since December 31, 2024, as we continue to invest additional resources in customer support and implementation to support our GTM operating model, and to ensure that our customers are realizing the full benefit of our products.

Operating Expenses

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Sales and marketing $ 580,680 $ 552,019 $ 28,661 5 %

The increase in sales and marketing expenses during 2024 was primarily attributable to an increase of $18.7 million in marketing events and expenses to drive customer growth.

The increase in sales and marketing expenses during 2025 was primarily attributable to an increase of $43.3 in personnel-related expenses, including increases of $27.3 million in salaries and wages and $16.2 million in stock-based compensation expense.

The increase in sales and marketing expenses was also attributable to a $10.8 million increase in professional fees, including contractors to support our staff levels and professional service fees to support our GTM operating model.

a $13.6 million increase in personnel-related expenses, including increases of $9.3 million in salaries and wages, $2.6 million in stock-based compensation expense, and $1.3 million in severance costs incurred related to the restructuring event in January 2024;

a $5.5 million increase in travel-related costs;

and a $3.0 million increase in computer software expenses.

We increased our sales and marketing headcount by 7% since December 31, 2023 to support our GTM operating model.

The increases in sales and marketing expenses were partially offset by a $21.7 million decrease in marketing events and expenses, and a $1.0 million decrease in amortization of customer relationship intangible assets.

We decreased our sales and marketing headcount by 4% since December 31, 2024 as we moved a portion of headcount to cost of revenue roles in order to support our GTM operating model.

Year Ended December 31, Change

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Research and development $ 362,373 $ 312,987 $ 49,386 16 %

The increase in research and development expenses during 2024 was primarily attributable to an increase of $13.5 million in professional fees, including contractors to support our staff levels.

The increase in research and development expenses was also attributable to a $2.5 million increase in computer software expenses, and a $1.3 million increase in travel-related costs.

The increases in research and development expenses were partially offset by a decrease of $6.2 million in acquisition-related expenses, including $4.9 million related to the acceleration of cash retention payments in the first quarter of 2023 upon the departure of certain employees from our previous acquisitions;

and a decrease of $0.2 million in personnel-related expenses, including decreases of $1.9 million in salaries and wages and $0.3 million in stock-based compensation expense, partially offset by an increase of $1.8 million in severance costs incurred related to the restructuring event in January 2024.

The increase in research and development expenses during 2025 was primarily attributable to an increase of $47.6 million in personnel-related expenses, including increases of $25.5 million in salaries and wages and $21.6 million in stock-based compensation expense.

The increase in research and development expenses was also attributable to a $7.7 million increase in computer software expenses and a $3.1 million increase in acquisition-related expenses.

The increases in research and development expenses were partially offset by a $12.7 million decrease in professional fees related to temporary contractor labor.

We increased our research and development headcount by 16% since December 31, 2024 in order to continue to build, enhance, maintain, and scale our products, services, and platform as part of our global workforce strategy.

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General and administrative $ 232,967 $ 217,513 $ 15,454 7 %

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 $10.3 million increase in professional fees, including contractors to support our staff levels and professional service fees to support our corporate strategic initiatives;

The increase in general and administrative expenses during 2025 was primarily attributable to an increase of $12.0 million in personnel-related expenses, including increases of $2.5 million in salaries and wages and $9.6 million in stock-based compensation expense.

The increase in general and administrative expenses was also attributable to a $9.0 million increase in legal fees;

a $4.0 million increase in computer software expenses;

and a $1.8 million increase in travel-related costs.

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.

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.

Interest Income, Interest Expense, Accretion Income, Net, Other Expense, Net, and Provision for Income Taxes

a $1.6 million increase in acquisition-related expenses;

and a $1.4 million increase in tax & license fees.

The increases in general and administrative expenses were partially offset by a $7.3 million decrease in rent expense, primarily related to modifications of leases in 2025.

We decreased our general and administrative headcount by 9% since December 31, 2024, as we continue to focus on operating efficiency.

Interest Income, Interest Expense, Accretion Income, Net, Other Income (Expense), Net, and Provision for Income Taxes

Year Ended December 31, Change

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Accretion income, net 8,265 13,583 (5,318) (39 %)

Other expense, net 3,136 360 2,776 *

Other income (expense), net 2,309 (3,136) 5,445 *

Provision for income taxes 6,802 1,775 5,027 *

*Percentage not meaningful

During 2024, our interest income increased by $3.9 million due to an increase in the balances of our money market funds, cash savings accounts, and marketable securities;

accretion income, net increased by $3.8 million due to an increase in the balances of our marketable securities;

and other expense, net increased due to foreign currency losses.

During 2025, our interest income decreased by $2.8 million due to a decrease in the balances of our money market funds, cash savings accounts, and marketable securities;

accretion income, net decreased by $5.3 million due to a decrease in the balances of our marketable securities;

other income (expense), net flipped from expense to income due to foreign currency gains;

and provision for income taxes increased primarily due to a foreign tax on the transfer from Norway to the U.S.

of intellectual property acquired from Novorender.

Non-GAAP Financial Measures

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Investors should not rely on any single financial measure to evaluate our business.

Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Income (Loss) from Operations, and Non-GAAP Operating Margin

Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Income from Operations, and Non-GAAP Operating Margin

We define these non-GAAP financial measures as the respective GAAP measures, excluding stock-based compensation expense, amortization of acquired intangible assets, employer payroll tax related to employee stock transactions, and acquisition-related expenses.

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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.

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;

The expense related to amortization of acquired intangible assets is a non-cash expense 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.

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Accordingly, we believe this adjustment in arriving at our non-GAAP measures provides investors with a better understanding of the performance of our core business in a manner that is consistent with management’s view of the business.

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.

Acquisition-related expenses include external and incremental transaction costs, such as legal and due diligence costs, and retention or other compensation payments.

These expenses are unpredictable and generally would not have otherwise been

incurred in the 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.

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Non-GAAP general and administrative as a percentage of revenue 13 % 14 % 16 %

Reconciliation of loss from operations and operating margin to non-GAAP income (loss) from operations and non-GAAP operating margin:

Reconciliation of loss from operations and operating margin to non-GAAP income from operations and non-GAAP operating margin:

Year Ended December 31,

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Acquisition-related expenses 6,577 2,288 8,888

Non-GAAP income (loss) from operations $ 110,952 $ 18,556 $ (73,846)

Non-GAAP income from operations $ 186,607 $ 110,952 $ 18,556

Operating margin (9 %) (12 %) (23 %)

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We also fund investments which help drive our strategic business growth through acquisitions and investments in equity securities and limited partnership funds.

In February 2025, we began using cash to fund withholding taxes due upon the vesting of employee RSUs by net share settlement, rather than our previous approach of selling shares of our common stock issued to employees to cover applicable withholding taxes.

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.

In February 2025, the Company modified its office leases in Austin, Texas to expand the leased premises and extend the lease terms, which resulted in an $9.2 million net contractual tenant improvement reimbursements benefit in the next 12 months.

In February 2025, we began using cash to fund withholding taxes due upon the vesting of employee restricted stock units ("RSUs") by net share settlement, rather than our previous approach of selling shares of our common stock issued to employees to cover applicable withholding taxes.

We also have a stock repurchase program that is funded using our working capital.

In the next 12 months, we have net contractual commitments consisting of operating lease obligations of $5.9 million, and net contractual commitments consisting of finance lease obligations of $2.8 million and non-cancelable purchase commitments of $63.0 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.

We believe our existing cash, cash equivalents, and marketable securities will be sufficient to meet our needs for at least the next 12 months.

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This assessment is a forward-looking statement and involves risks and uncertainties.

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

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.

The amendment to the office leases in Austin, Texas in February 2025 resulted in an additional $31.2 million operating lease obligation, net of tenant improvement reimbursement, beyond the next 12 months.

Beyond the next 12 months, we have net contractual commitments that we are reasonably likely to incur consisting of operating lease obligations of $68.2 million, finance lease obligations of $32.4 million, and non-cancelable purchase commitments of $60.3 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.

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.

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Net cash used in investing activities (70,499) (150,109) (76,061)

Net cash provided by financing activities 36,236 41,165 38,652

Net cash (used in) provided by financing activities (178,902) 36,236 41,165

Operating Activities

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• a $100.1 million increase in deferred revenue primarily due to the growth of our business and timing of billings;

• a $19.7 million increase in accounts payable primarily due to timing of cash payments to our vendors.

• a $64.4 million increase in accrued expenses and other liabilities primarily due to the size and timing of bonus and commission accruals, payroll accruals, and cash payments to our vendors;

• a $1.0 million increase in operating lease liabilities related to lease modifications.

These changes in our operating assets and liabilities were partially offset by the following:

• a $52.0 million increase in deferred contract cost assets related to commissions as a result of additional customer contracts closed during the period and more commissions capitalized as a result of our GTM operating model;

• a $39.8 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;

• an $8.2 million decrease in accounts payable primarily due to timing of cash payments to our vendors;

• a $5.7 million increase in prepaid expenses and other current assets primarily due to timing of cash payments to our vendors.

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• a $79.1 million increase in deferred revenue primarily due to the growth of our business and timing of billings;

• 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.

• 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 $39.5 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 $15.5 million increase in accrued expenses and other liabilities primarily due to personnel-related expenses and timing of 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;

• a $3.3 million increase in prepaid expenses and other assets primarily due to timing of cash payments to our vendors.

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Net cash used in investing activities of $70.5 million in 2025 consisted of cash outflows for purchases of marketable securities of $351.5 million, capitalized software development costs of $65.7 million, business combinations of $41.5 million, purchases of property and equipment of $18.1 million, asset acquisitions of $3.5 million, and purchases of strategic investments of $2.2 million.

Such outflows were partially offset by $440.5 million in maturities of marketable securities and $1.6 million of customer repayments for materials financing.

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.

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.

Such outflows were partially offset by $409.2 million in maturities of marketable securities and $2.7 million in sales of marketable securities.

Net cash used in investing activities of $150.1 million in 2024 consisted of 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.

Such outflows were partially offset by $440.5 million in maturities of marketable securities, and $1.6 million in customer repayments for materials financing.

Financing Activities

Net cash provided by financing activities of $36.2 million in 2024 consisted of $24.1 million in proceeds from employee purchases under the ESPP and $15.7 million in proceeds from stock option exercises, partially offset by $2.0 million in payments on our finance lease obligations and $1.5 million in deferred business combination consideration.

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.

Net cash used in financing activities of $178.9 million in 2025 consisted of $128.8 million in repurchases of our common stock, $94.1 million in payments of tax withholding for net share settlement, $1.6 million in payments on our finance lease obligations, and $1.4 million in deferred asset acquisition consideration.

Such outflows were partially offset by $26.3 million in proceeds from employee purchases under the ESPP, $11.8 million in proceeds from stock option exercises, and $9.0 million in funds held for Procore Pay customers.

Net cash provided by financing activities was $36.2 million in 2024, which primarily consisted of $24.1 million in proceeds from our ESPP and $15.7 million in proceeds from stock option exercises.

Such inflows were partially offset by $2.0 million in payments on our finance lease obligations and $1.5 million in deferred business combination consideration.

Capital Allocation Strategy

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Stock Repurchase Program

On October 29, 2024, our Board authorized a stock repurchase program to repurchase up to $300.0 million of our outstanding common stock.

We intend to opportunistically repurchase shares of our common

stock from time to time through the open market (including via pre-set trading plans), or other transactions in accordance with applicable securities laws, in each case, subject to market conditions, applicable legal requirements, and other relevant factors.

On November 3, 2025, our Board authorized a new stock repurchase program to repurchase up to $300.0 million of our outstanding common stock (the "2025 Stock Repurchase Program").

We intend to opportunistically repurchase shares of our common stock from time to time through the open market or other transactions in accordance with applicable securities laws, in each case, subject to market conditions, applicable legal requirements, and other relevant factors.

The timing of stock repurchases and the actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities, and will be subject to the discretion of our management within its authorization.

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The stock repurchase program does not obligate us to acquire any particular number of shares of our common stock, or any shares at all.

The stock repurchase program expires on October 29, 2025, and may be suspended or discontinued at any time at our discretion and without notice.

We did not repurchase any shares under our authorized stock repurchase program during the year ended December 31, 2024.

The stock repurchase program expires on November 3, 2026, and may be suspended or discontinued at any time at our discretion and without notice.

During the year ended December 31, 2025, we repurchased and retired a total of 327 shares of our common stock at a weighted average per share price of $68.92 for an aggregate amount of $22.5 thousand under the 2025 Stock Repurchase Program, which includes the transaction costs associated with the repurchases but excludes the 1% excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022.

Between December 31, 2025 and February 24, 2026, we repurchased and retired 1,765,560 shares of our common stock at a weighted average per share price of $56.66 for an aggregate amount of $100.0M under the 2025 Stock Repurchase Program.

On October 29, 2024, our Board authorized a stock repurchase program to repurchase up to $300.0 million of our outstanding common stock (the "2024 Stock Repurchase Program").

The timing of stock repurchases and the actual number of shares repurchased depended on a variety of factors, including price, general business and market conditions, and alternative investment opportunities, and was subject to the discretion of our management within its authorization.

The stock repurchase program was funded using our working capital.

The stock repurchase program described above expired on October 29, 2025.

During the year ended December 31, 2025, we repurchased and retired a total of 1,903,527 shares of our common stock at a weighted average per share price of $67.67 for an aggregate amount of $128.8 million under the 2024 Stock Repurchase Program, which includes the transaction costs associated with the repurchases but excludes the 1% excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022.

Critical Accounting Policies and Estimates

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Stock-based compensation expense related to stock awards is recognized based on the fair value of the awards granted.

The fair value of RSUs, performance-based restricted stock units (“PSUs”), and restricted stock awards is based on the estimated fair value of our common stock on the grant date.

The fair value of RSUs, performance-based RSUs (“PSUs”), and restricted stock awards is based on the estimated fair value of our common stock on the grant date.

The fair value of each option award and ESPP purchase right is estimated on the grant date using the Black-Scholes option pricing model.

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These assumptions represent management’s best estimates and if different assumptions had been used, our stock-based compensation expense could have been materially different.

For awards that vest solely based on continued service, the grant date fair value is recognized as compensation expense on a straight-line basis over the requisite service period of the awards, which is generally four years.

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.

The fair value of market-based PSUs (“MSUs”) is estimated on the grant date fair value using a Monte Carlo simulation valuation model.

The primary input in determining the fair value of MSUs is the value of our common stock.

The determination of the grant date fair value using a Monte Carlo simulation valuation model is affected by volatility, expected term, dividend yield, and risk-free rate.

These assumptions represent management’s best estimates and if different assumptions had been used, our stock-based compensation expense could have been materially different.

For RSUs, which vest solely based on continued service, the grant date fair value is recognized as compensation expense on a straight-line basis over the requisite service period of the awards, which is generally four years.

For PSUs, which 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.

For MSUs, which contain both market-performance and service vesting conditions, the grant date fair value is recognized as compensation expense using a graded vesting attribution model.

We account for forfeitures as they occur instead of estimating the number of awards expected to be forfeited.

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The portion of expense recognized in any period may fluctuate depending on changing estimates of the achievement of the performance conditions.

In 2025, we began granting MSUs based on our total shareholder return (“TSR”) performance relative to the TSR of the other companies that comprise the S&P Completion Index (CI) Information Technology (the “Index”).

We recognize compensation expense for such awards on a graded vesting basis, through the expected vest date, beginning on the grant date.

On November 10, 2025, our former Chief Executive Officer (“CEO”) resigned, while maintaining his position as Chair of our Board.

In connection with the CEO’s resignation, we recognized incremental stock-based compensation expense related to the acceleration of the expense for his unvested RSUs and PSUs.

Business Combinations

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Intangible assets consist primarily of acquired developed technology and acquired customer relationships.

Valuations of acquired intangible assets require us to make judgments about the selection of valuation methodologies and also significant estimates and assumptions, including, but not limited to, (1) the estimated level of effort and related costs of reproducing or replacing the assets acquired, (2) future expected cash flows from using the acquired customer relationships and technology, including future expected revenue, the rate of customer non-renewals of subscriptions, and operating expenses to deliver such expected revenue, (3) discount rates, (4) estimated royalty rate specifically used to value the acquired technology, and (5) selection of comparable companies.

Valuations of acquired intangible assets require us to make judgments about the selection of valuation methodologies and also significant estimates and assumptions, including (1) the estimated level of effort and related costs of reproducing or replacing the assets acquired, (2) future expected cash flows from using the acquired customer relationships and technology, including future expected revenue, the rate of customer non-renewals of subscriptions, and operating expenses to deliver such expected revenue, (3) discount rates, (4) estimated royalty rate specifically used to value the acquired technology, and (5) selection of comparable companies.

Fair value estimates are based on the assumptions management believes a market participant would use in valuing the asset or liability.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis