Stock Story -
Construction management software maker Procore Technologies (NYSE:PCOR) reported Q4 FY2023 results exceeding Wall Street analysts' expectations, with revenue up 28.7% year on year to $260 million. Guidance for next quarter's revenue was also optimistic at $263 million at the midpoint, 2.2% above analysts' estimates. It made a non-GAAP profit of $0.17 per share, improving from its loss of $0.08 per share in the same quarter last year.
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Procore Technologies (PCOR) Q4 FY2023 Highlights:
- Revenue: $260 million vs analyst estimates of $248.3 million (4.7% beat)
- EPS (non-GAAP): $0.17 vs analyst estimates of $0.07 ($0.10 beat)
- Revenue Guidance for Q1 2024 is $263 million at the midpoint, above analyst estimates of $257.4 million (operating margin guidance for this period also beat expectations)
- Management's revenue guidance for the upcoming financial year 2024 is $1.14 billion at the midpoint, beating analyst estimates by 1.3% and implying 19.9% growth (vs 32.1% in FY2023) (operating margin guidance for this period also beat expectations)
- Free Cash Flow of $28.99 million, up 29.1% from the previous quarter
- Customers: 16,367, up from 16,067 in the previous quarter (miss vs. expectations of 16,418)
- Gross Margin (GAAP): 81.6%, up from 80% in the same quarter last year
- Market Capitalization: $10.55 billion
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Sales GrowthAs you can see below, Procore Technologies's revenue growth has been very strong over the last two years, growing from $146.1 million in Q4 FY2021 to $260 million this quarter.
This quarter, Procore Technologies's quarterly revenue was once again up a very solid 28.7% year on year. However, its growth did slow down compared to last quarter as the company's revenue increased by just $12.13 million in Q4 compared to $19.37 million in Q3 2023. While we'd like to see revenue increase by a greater amount each quarter, a one-off fluctuation is usually not concerning.
Next quarter's guidance suggests that Procore Technologies is expecting revenue to grow 23.2% year on year to $263 million, slowing down from the 33.9% year-on-year increase it recorded in the same quarter last year. For the upcoming financial year, management expects revenue to be $1.14 billion at the midpoint, growing 19.9% year on year compared to the 31.9% increase in FY2023.
Customer Growth Procore Technologies reported 16,367 customers at the end of the quarter, an increase of 300 from the previous quarter. That's a little slower customer growth than what we've observed in past quarters, suggesting that the company's customer acquisition momentum is slowing.
Key Takeaways from Procore Technologies's Q4 Results This was a solid quarter. Revenue, profit, and EPS beat. Guidance for revenue and operating margin were ahead for next quarter and the full year as well. The stock is up 6.4% after reporting and currently trades at $79.32 per share.
