Procore Technologies, Inc. - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. Procore Technologies, Inc. operates as a single segment providing a cloud-based construction management platform. The company continues to focus on digitizing the construction industry, expanding its platform capabilities through organic development and strategic acquisitions, including the recent acquisition of Datagrid to accelerate its AI strategy.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $359.3 million | $310.6 million |
| Gross Profit | $287.8 million | $245.7 million |
| Gross Margin | 80% | 79% |
| Operating Loss | $(15.7) million | $(36.2) million |
| Net Loss | $(9.1) million | $(33.0) million |
| Non-GAAP Operating Income | $60.8 million | $32.4 million |
| Operating Cash Flow | $76.8 million | $66.0 million |
| Cash & Marketable Securities | $591.5 million | $591.5 million (Q1 2025 not explicitly stated as total, but cash was $313.7M) |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 16% year-over-year, driven by 87% growth from existing customers and 13% from new customers.
- Profitability Improvement: Operating loss narrowed significantly from $36.2 million to $15.7 million. Non-GAAP operating margin improved to 17% from 10%.
- Acquisition Activity: The company completed the acquisition of Datagrid for $168.0 million in cash in January 2026, adding $114.9 million in goodwill and $50.5 million in developed technology intangibles.
- Expense Management: Sales and marketing expenses increased 8% due to personnel investments, while Research and Development expenses decreased 2% due to reduced contractor labor and salaries, despite an 11% headcount increase.
- Legal Costs: General and administrative expenses rose 23%, primarily due to an $8.8 million increase in legal fees related to ongoing litigation with Oracle.
- Restructuring: The company executed a 4% global workforce reduction in January 2026, incurring $6.3 million in restructuring costs.
Guidance, Outlook, and Risks
- Outlook: Management expects to continue investing in technology innovation, specifically Procore AI, and international expansion. The company maintains a full valuation allowance on U.S. deferred tax assets.
- Capital Allocation: The company repurchased $100.0 million of common stock during the quarter under a $300.0 million program authorized in November 2025. Approximately $200.0 million remains available for repurchase.
- Risks:
- Legal Proceedings: Ongoing trade secret litigation with Oracle regarding Procore Pay; potential damages and injunctive relief are sought by Oracle.
- Macroeconomic Factors: Inflation, interest rates, and geopolitical conditions may impact customer spending and operating expenses.
- Integration Risks: Success depends on integrating acquired technologies (Datagrid, Novorender) and realizing synergies.
Key Facts for Investor Verification
- Oracle Litigation Status: Verify the current status and potential financial exposure of the trade secret lawsuit filed by Oracle in October 2024.
- Datagrid Integration: Monitor the realization of synergies and revenue contribution from the Datagrid acquisition to validate the $168 million investment.
- Stock Repurchase Execution: Track the pace of the remaining $200 million stock repurchase authorization and its impact on share count.
- Non-GAAP Adjustments: Review the reconciliation of GAAP to Non-GAAP measures, specifically the exclusion of $60.5 million in stock-based compensation and $9.5 million in amortization of acquired intangibles.
- Customer Retention: Confirm the stability of the 95% Gross Retention Rate (GRR) and the growth of customers contributing over $100k in ARR (up 16% YoY).