Snapshot
Procore Technologies, Inc. reported $359M of revenue in Q1 2026, up 15.7% year over year, with diluted EPS of $-0.06 and an operating margin of -4.4%.
- Revenue
- $359M
- YoY growth
- +15.7%
- Diluted EPS
- $-0.06
- Operating margin
- -4.4%
What management said
- •Comments made on this call include forward-looking statements regarding, among other things, our financial outlook, platform and products, customer demand, operations, and macroeconomic and geopolitical conditions.
- •Continuing our momentum from 2025, Q1 saw strong performance that exceeded the high end of our guidance.
- •For Q1, we delivered 15.7% revenue growth and 17% non-GAAP operating margin, which represents 650 basis points of year-over-year expansion.
- •On our last earnings call, I outlined why Procore will be an AI winner.
- •Our flagship products and early investments in AI, including our acquisition of Datagrid, has positioned us well to capitalize on this disruptive technology.
- •Building on our flagship system of collaboration with nearly 3 million active users and a massive proprietary dynamic data set, Procore AI can deliver outcomes simply not possible with traditional software.
- •This also opens a meaningful new dimension to our TAM, as Procore AI can access construction labor budgets well beyond the industry's software spend.
- •Finally, I'll discuss our intention to continue to improve margins and free cash flow per share.
- •Let me start with Procore AI, which includes our recent acquisition of Datagrid.
- •Our solution enables customers to deploy embedded Procore AI agents that can execute tasks such as RFI analysis, submittal cross-checking, and compliance auditing.
- •This data and context can only be accessed within a system of record and collaboration like Procore.
- •We expect that these new product capabilities will help to drive sales, increase customer satisfaction, and improve retention.
What went well
- •Q1 revenue grew 15.7% year-over-year to $359 million, exceeding the high end of guidance.
- •Non-GAAP operating margin reached 17%, representing 650 basis points of year-over-year expansion, and free cash flow was $56 million, up 20% year-over-year.
- •Current RPO grew 21% year-over-year and current deferred revenue grew 17% year-over-year.
- •Six-plus figure ARR wins grew 24% year-over-year, reflecting a shift toward larger-scale engagements.
- •The updated Procore Scheduling reached general availability and was implemented by over 2,000 companies since its February launch, making it one of the fastest-adopted products in the company's history.
- •TRINITY Group, a longtime GC customer, expanded its construction volume commitment to $1.1 billion, a 6x increase.
What went wrong
- •Management acknowledged ongoing headwinds from a challenging construction environment.
- •The company anticipates modest headwinds to gross margins from increased compute expenses to support AI workloads.
- •An analyst noted the magnitude of revenue and cRPO upside was somewhat less than prior quarters where the company had been beating by 3%-4%.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Revenue | Q2 2026 | None | $364 million-$366 million (13% YoY growth at the high end) | new |
| Non-GAAP operating margin | Q2 2026 | None | 17.5%-18.5% | new |
| Revenue | Full-year 2026 | $1.489 billion-$1.494 billion | $1.499 billion-$1.503 billion (13.6% YoY growth at the high end) | raised |
| Non-GAAP operating margin | Full-year 2026 | 17.5%-18% | 18%-18.5% (390-440 bps expansion) | raised by 50 bps |
| Free cash flow margin | Full-year 2026 | 19% | 19% (approximately 280 bps expansion) | maintained |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total revenue | +15.7% | Healthy demand across the customer base, significant new logo wins, larger-scale engagements, and strong pipeline. |
| Non-GAAP operating margin | +650 bps to 17% | Continued margin expansion alongside durable top-line growth. |
| Free cash flow | +20% to $56 million | Durable top-line growth combined with year-over-year margin expansion. |
| Current RPO | +21% | Strength in the quarter, benefiting primarily from longer average contract duration. |
| Six-plus figure ARR wins | +24% | Meaningful shift toward larger-scale engagements. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Procore AI / Datagrid integration | Datagrid acquired earlier in the year; AI strategy outlined | Technology integration proceeded rapidly; combined Procore AI roadmap executing, with new capabilities like agent event triggers, voice AI interface pilot, and a contract review agent | accelerating |
| Construction macro environment | Stable over prior quarters | Pretty stable demand, with excitement around data centers | stable |
| AI go-to-market | Small dedicated specialist overlay team | Translating learnings into broader sales force enablement; expect much of sales organization selling Procore AI in Q3 | scaling |
| cRPO vs revenue convergence | Benefiting from longer contract duration | Durations roughly flat Q4 to Q1; expected to take three to four quarters after stabilization to converge with revenue growth | normalizing |
| AI monetization model | ACV-based pricing for flagship | Expect capacity-based / consumption-based (token-based) licensing for agentic solutions | evolving |
Q&A summary
The magnitude of revenue and cRPO upside was a bit less than prior quarters where you'd been beating by 3%-4% — anything to read into that? And what informs the full-year raise being weighted to the second half?
CFO Rachel Pyles said the results were strong with good pipeline and new logos; the revenue upside was consistent with the Q4 beat, with nothing different. Q2 at the high end is consistent with street estimates, and there is no change in guidance philosophy — they give guidance they have high conviction in.
How do you think about the glide path for cRPO growth converging with revenue growth?
Pyles said cRPO remained strong and average contract duration is starting to normalize, staying roughly flat quarter-over-quarter between Q4 and Q1. Once duration stabilizes, it will likely take around three to four quarters before cRPO and revenue growth come together.
How much did Datagrid and FX impact revenue and cRPO this quarter, for an organic ex-FX growth rate?
Pyles said FX on the consolidated business was immaterial (about 2 points on international but de minimis consolidated). Datagrid was also immaterial as integration is just finishing and GA is shortly ahead. The organic business continues to grow 15%-16%.
Given the sales organization changes and Walt coming in, is this a fine-tune or do you expect major changes?
CEO Ajei Gopal said Procore has a strong foundation, great customer relationships, and a strong platform. He brought on executives he knows well to move fast in a complex environment, and expects to continue to execute as the business improves, with no subliminal message in the guidance.
How is the new four bundled packages, three-tier pricing being received?
Gopal said customer feedback has been positive; it lets Procore position the right capability per customer, generate incremental monetization as customers move up the stack, and streamline the sales cycle by offering a bundled value price versus multiple a la carte items. It is still early days.
Where is Procore on its internal AI adoption journey to drive the 2027 operating leverage?
Gopal said R&D is in the middle of transforming its operating model using AI and is already seeing benefits like increased speed of product delivery; the rest of the organization will follow R&D's lead. Pyles added that other parts of the organization already have AI tools, and 2027 leverage will come from across all lines of the P&L, not just one place.