Procore Technologies (PCOR) Goldman Sachs Communacopia + Technology Conference 2024 summary

Market opportunity and digitization

• Construction remains one of the least digitized industries, presenting significant growth potential for digital platforms.

• Mobile connectivity and cloud-based solutions have accelerated industry adoption, with ongoing catalysts for further digitization.

• Penetration among large contractors is high, but substantial untapped volume and global markets remain, especially outside the U.S.

• Only 15% of revenue is currently international, despite a larger global TAM.

Demand trends and macroeconomic impact

• Customer additions have slowed, particularly among SMBs, due to macroeconomic headwinds, while enterprise demand remains resilient.

• Most revenue is driven by enterprise clients, even though SMBs make up the majority of customer count.

• Interest rate changes and macro uncertainty have created cautious customer sentiment, impacting buying behavior and expansion.

• Gross retention remains stable, churn is stabilizing, but expansion rates are lower, affecting net retention.

Product portfolio and innovation

• Project management, quality and safety, and financials account for 80% of revenue, with financials seen as the next major growth vector.

• Expansion is primarily driven by volume, but cross-sell is expected to grow as the product portfolio matures.

• Acquisition of Unearth accelerates capabilities in civil and infrastructure projects, leveraging geolocation technology.

• Generative AI initiatives focus on field productivity, with AI copilots assisting users and leveraging construction data.