Procore Technologies Q2 Earnings Call Highlights

Procore delivered a strong second quarter: Revenue rose 15.8% year over year to $375 million, while non-GAAP operating margin expanded to 21.5% and free cash flow increased 507% to $65 million. The company also reported its first quarter of GAAP operating profitability. The company raised its outlook and set ambitious margin targets. Procore increased its 2026 revenue and profitability guidance, and introduced a fiscal 2027 non-GAAP operating-margin target of 25%. Procore is expanding its AI strategy through acquisitions and new products. Its planned $845 million cash acquisition of DroneDeploy would add drone, robotics and visual-data capabilities, while Procore is broadening sales of its 20 AI agents and targeting cross-selling opportunities across shared customers.

Procore reported second-quarter results that exceeded its guidance, driven by broad-based demand, large contract wins and growth in international markets, while the construction software company also outlined an expanded artificial intelligence strategy centered on its planned acquisition of DroneDeploy. Revenue for the second quarter totaled $375 million, up 15.8% from a year earlier, according to CFO Rachel Pyles. The company exceeded the high end of its revenue guidance by approximately 2.5%. International revenue rose 23% year over year, or 19% on a constant-currency basis.

Procore generated non-GAAP operating income of $81 million, producing a 21.5% non-GAAP operating margin, an improvement of 800 basis points from the prior-year period. Free cash flow reached $65 million, up 507% year over year. Pyles said the quarter also marked Procore’s first period of GAAP operating profitability.

The company raised its full-year outlook for its organic business. Procore now expects 2026 revenue of $1.51 billion to $1.514 billion, representing 14.5% year-over-year growth at the high end of the range. It forecasts full-year non-GAAP operating margin of 18.5% to 19%, 50 basis points above its previous outlook, and free-cash-flow margin of 19.5%. For the third quarter, Procore forecast revenue of $382 million to $384 million, representing 13.3% year-over-year growth at the high end, and a non-GAAP operating margin of 19% to 19.5%. Pyles also introduced a fiscal 2027 non-GAAP operating-margin target of 25%, which she said would represent nearly 1,100 basis points of improvement from fiscal 2025. She emphasized that the target reflects confidence in the company’s cost structure rather than a revenue forecast, which Procore plans to provide in its normal planning cycle. “This quarter’s performance is an initial step in a broader trajectory of profitable growth,” Pyles said.

Procore announced an agreement to acquire DroneDeploy for $845 million in cash. DroneDeploy provides reality-capture and robotic-automation technology, including tools using drones, ground robots, mobile devices and cameras to collect and analyze visual data from job sites. DroneDeploy has generated approximately $78 million in trailing 12-month revenue, Pyles said. Procore expects the acquisition to be accretive to organic revenue growth and said it expects to absorb the near-term margin impact without changing its fiscal 2026 or fiscal 2027 margin outlook. The transaction is expected to close later in 2026. The company has arranged committed bridge financing for most of the purchase price while it evaluates its longer-term capital structure, Pyles said. Procore’s financial outlook does not include any expected contribution from DroneDeploy. President and CEO Ajei Gopal said the acquisition is intended to add “pe