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Procore Announces Second Quarter 2025 Financial Results

Procore Technologies, Inc. (NYSE: PCOR), the leading global provider of construction management software, today announced financial results for the second quarter ended June 30, 2025.

“Q2 represented another solid quarter and we remain well positioned for efficient growth,” said Tooey Courtemanche, Founder, President, and CEO of Procore. “Our latest announcements unveiled at the Innovation Summit further cement Procore at the forefront of the construction industry's digital transformation.”

“I am pleased with the performance we delivered in Q2,” said Howard Fu, CFO of Procore. “We remain committed to profitability improvement and we see opportunities for continued margin expansion while not compromising our growth opportunities.”

Second Quarter 2025 Financial Highlights:

  • Revenue was $324 million, an increase of 14% year-over-year.
  • GAAP gross margin was 79% and non-GAAP gross margin was 83%.
  • GAAP operating margin was (9%) and non-GAAP operating margin was 13%.
  • Operating cash inflow for the second quarter was $31 million.
  • Free cash inflow for the second quarter was $11 million.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Recent Business Highlights:

  • Achieved a gross revenue retention rate of 95% in the second quarter.
  • Number of organic customers contributing more than $100,000 of annual recurring revenue totaled 2,517 as of June 30, 2025, an increase of 15% year-over-year.
  • Added 195 net new organic customers in the second quarter, ending with a total of 17,501 organic customers.
  • Announced acquisitions of Novorender and Flypaper Technologies to double down on Building Information Modeling (BIM).
  • Achieved Federal Risk and Authorization Management Program (FedRAMP®) “In Process” Designation and now listed on the FedRAMP marketplace.
  • Hosted Procore Innovation Summit and shared exciting product innovations.

Third Quarter and Full Year Outlook:

Procore is providing the following guidance for the third quarter 2025 and the full year 2025:

  • Third Quarter 2025 Outlook:
    • Revenue is expected to be in the range of $326 million to $328 million, representing year-over-year growth of 10% to 11%.
    • Non-GAAP operating margin is expected to be in the range of 13% to 13.5%.
  • Full Year 2025 Outlook:
    • Revenue is expected to be in the range of $1,299 million to $1,302 million, representing year-over-year growth of 13%.
    • Non-GAAP operating margin is expected to be in the range of 13% to 13.5%.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future and cannot be reasonably determined or predicted at this time, although it is important to note that these factors could be material to Procore’s future GAAP financial results.

Quarterly Conference Call

Procore Technologies, Inc. will hold a conference call to discuss its second quarter results at 2:00 p.m., Pacific Time, on Thursday, July 31, 2025. A live audio webcast will be accessible on Procore's investor relations website at http://investors.procore.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, about Procore and its industry, including our outlook for third quarter 2025 and the full fiscal year 2025, that involve substantial risks and uncertainties. All statements in this press release, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or future financial or operating performance, and may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these words, or other similar terms or expressions that concern Procore’s expectations, strategy, plans, or intentions.

Procore has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends that Procore believes may affect its business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors that could cause results to differ materially from Procore’s current expectations, including, but not limited to, our expectations regarding our financial performance (including revenues, expenses, and margins, and our ability to achieve or maintain future profitability), our ability to effectively manage our growth, anticipated performance, trends, growth rates, and challenges in our business and in the markets in which we operate or anticipate entering into, economic and industry trends (in particular, the rate of adoption of construction management software and digitization of the construction industry, inflation, interest rates, tariffs, and challenging geopolitical or macroeconomic conditions), our progress with respect to our go-to-market transition and our ability to realize the expected benefits of the transition, our ability to attract new customers and retain and increase sales to existing customers, our ability to expand internationally, the effects of increased competition in our markets and our ability to compete effectively, our estimated total addressable market, our ability to execute, and realize benefits from, our stock repurchase program, our ability to develop and integrate new products, platform capabilities, services, and features in an efficient and timely manner and get our customers and prospective customers to adopt such new products, platform capabilities, services, and features, and as set forth in Procore’s filings with the Securities and Exchange Commission. You should not rely on Procore’s forward-looking statements. Procore assumes no obligation to update any forward-looking statements to reflect events or circumstances that exist or change after the date on which they were made, except as required by law.

Non-GAAP Financial Measures

In addition to Procore’s results determined in accordance with U.S. generally accepted accounting principles, or GAAP, Procore believes certain non-GAAP measures, as described below, are useful in evaluating Procore’s operating performance. Procore uses this non-GAAP financial information, collectively, to evaluate its ongoing operations as well as for internal planning and forecasting purposes. Procore believes that non-GAAP financial information, when taken collectively, is helpful to investors because it provides consistency and comparability with past financial performance, and may assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. These non-GAAP financial measures are not prepared in accordance with GAAP, and are presented for supplemental purposes only.

Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Income from Operations, Non-GAAP Operating Margin, Non-GAAP Net Income, and Non-GAAP Net Income per Share: Procore defines these non-GAAP financial measures as the respective GAAP measures, excluding stock-based compensation expense, amortization of acquired intangible assets, employer payroll tax related to employee stock transactions, and acquisition-related expenses. Non-GAAP gross margin is the ratio calculated by dividing non-GAAP gross profit by total revenue. Non-GAAP operating margin is the ratio calculated by dividing non-GAAP income from operations by total revenue. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Non-GAAP diluted earnings per share is computed by giving effect to all potential weighted average dilutive common stock equivalents outstanding for the period, including options to purchase common stock, restricted stock units, and shares to be issued pursuant to the employee stock purchase plan. The dilutive effect of outstanding awards is reflected in non-GAAP diluted earnings per share by application of the treasury stock method.

Stock-based compensation expense includes the net effects of capitalization and amortization of stock-based compensation expense related to capitalized software and cloud-computing arrangement implementation costs. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of the compensation provided to our employees. Because of varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company’s non-cash expenses, we believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for meaningful comparisons between its operating results from period to period. The expense related to amortization of acquired intangible assets is a non-cash expense and is dependent upon estimates and assumptions, which can vary significantly and are unique to each asset acquired; therefore, Procore believes non-GAAP measures that adjust for the amortization of acquired intangible assets provide investors a consistent basis for comparison across accounting periods. The amount of employer payroll tax-related items on employee stock transactions is dependent on restricted stock unit settlements, option exercises, related stock price, and other factors that are beyond Procore’s control and that do not correlate to the operation of the business. When evaluating the performance of its business and making operating plans, Procore does not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution than the accounting charges associated with such grants). Since the amount of employer payroll tax-related items on employee stock transactions is highly variable due to factors outside our control, and unrelated to Procore’s core operations, operating results, revenue-generating activities, business strategy, industry, or regulatory environment, management does not consider employer payroll tax on employee stock transactions in the evaluation of the business or in making operating plans. Accordingly, Procore believes this adjustment in arriving at our non-GAAP measures provides investors with a better understanding of the performance of its core business in a manner that is consistent with management’s view of the business. Acquisition-related expenses include external and incremental transaction costs, such as legal and due diligence costs and retention or other compensation payments. These expenses are unpredictable and generally would not have otherwise been incurred in the periods presented as part of our continuing operations. In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition-related expenses, may not be indicative of such future costs. Procore believes that excluding acquisition-related expenses facilitates the comparison of its financial results to its historical operating results and to other companies in its industry. Overall, Procore believes it is useful to exclude these expenses in order to better understand the long-term performance of its core business and to facilitate comparison of its results period-over-period and to those of peer companies. All of these non-GAAP financial measures are important tools for financial and operational decision-making and for evaluating Procore's own operating results over different periods of time.

Non-GAAP financial measures may not provide information that is directly comparable to information provided by other companies in Procore's industry, as other companies in the industry may calculate non-GAAP financial measures differently. In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies, and exclude expenses that may have a material impact on Procore's reported financial results. Unlike stock-based compensation expense, employer payroll tax related to employee stock transactions is a cash expense that we will continue to incur in the future. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Investors should review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate Procore's business.

Free Cash Flow: Procore defines free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized software development costs. Procore believes free cash flow is an important liquidity measure of the cash (if any) that is available, after our operating activities and capital expenditures. Procore uses free cash flow in conjunction with traditional GAAP measures to assess its liquidity and evaluate the effectiveness of its business strategies. Once Procore’s business needs and obligations are met, cash can be used to maintain a strong balance sheet, invest in future growth, and execute our stock repurchase program.

Other Metrics

Customer Count: The aforementioned customer count excludes customers acquired from business combinations that do not have standard Procore annual contracts.

Gross Revenue Retention Rate and Annual Recurring Revenue: For information on how we calculate gross revenue retention rate and annual recurring revenue, refer to our most recent Quarterly Report on Form 10-Q.

About Procore

Procore Technologies, Inc. (NYSE: PCOR) is a leading technology partner for every stage of construction. Built for the industry, Procore’s unified technology platform drives efficiency and mitigates risk through AI & data-driven insights and decision-making. Over three million projects have run on Procore across 150+ countries. For more information, visit www.procore.com.

PROCORE-IR

Category: Earnings

Procore Technologies, Inc.

Condensed Consolidated Statements of Operations (unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

2024

 

2025

 

2024

 

(in thousands, except share and per share amounts)

Revenue

$

323,919

 

 

$

284,347

 

 

$

634,551

 

 

$

553,775

 

Cost of revenue(1)(2)(3)

 

67,732

 

 

 

48,101

 

 

 

132,658

 

 

 

93,824

 

Gross profit

 

256,187

 

 

 

236,246

 

 

 

501,893

 

 

 

459,951

 

Operating expenses

 

 

 

 

 

 

 

Sales and marketing(1)(2)(3)(4)

 

141,897

 

 

 

127,922

 

 

 

280,581

 

 

 

248,916

 

Research and development(1)(2)(3)(4)

 

88,902

 

 

 

72,308

 

 

 

176,511

 

 

 

142,907

 

General and administrative(1)(3)(4)

 

55,655

 

 

 

50,792

 

 

 

111,313

 

 

 

101,810

 

Total operating expenses

 

286,454

 

 

 

251,022

 

 

 

568,405

 

 

 

493,633

 

Loss from operations

 

(30,267

)

 

 

(14,776

)

 

 

(66,512

)

 

 

(33,682

)

Interest income

 

5,015

 

 

 

5,814

 

 

 

11,012

 

 

 

11,752

 

Interest expense

 

(298

)

 

 

(472

)

 

 

(583

)

 

 

(951

)

Accretion income, net

 

2,027

 

 

 

3,761

 

 

 

4,474

 

 

 

6,849

 

Other income (expense), net

 

2,023

 

 

 

(148

)

 

 

2,414

 

 

 

(492

)

Loss before (benefit from) provision for income taxes

 

(21,500

)

 

 

(5,821

)

 

 

(49,195

)

 

 

(16,524

)

(Benefit from) provision for income taxes

 

(411

)

 

 

490

 

 

 

4,883

 

 

 

753

 

Net loss

$

(21,089

)

 

$

(6,311

)

 

$

(54,078

)

 

$

(17,277

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.14

)

 

$

(0.04

)

 

$

(0.36

)

 

$

(0.12

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

 

149,663,744

 

 

 

146,938,942

 

 

 

149,829,900

 

 

 

 

146,207,469

 

 

(1)

Includes stock-based compensation expense and amortization of capitalized stock-based compensation as follows:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

2024

 

2025

 

2024

 

(in thousands)

Cost of revenue

$

5,868

 

$

3,683

 

$

11,136

 

$

6,868

Sales and marketing

 

17,589

 

 

 

15,671

 

 

 

32,539

 

 

 

28,691

 

Research and development

 

21,237

 

 

 

17,628

 

 

 

39,661

 

 

 

31,363

 

General and administrative

 

13,718

 

 

 

13,961

 

 

 

26,100

 

 

 

25,690

 

Total stock-based compensation expense*

$

58,412

 

 

$

50,943

 

 

$

109,436

 

 

$

92,612

 

*Includes amortization of capitalized stock-based compensation of $2.8 million and $1.7 million, respectively, for the three months ended June 30, 2025 and 2024; and $5.6 million and $3.3 million, respectively, for the six months ended June 30, 2025 and 2024; which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs.

(2)

Includes amortization of acquired intangible assets as follows:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

2024

 

2025

 

2024

 

(in thousands)

Cost of revenue

$

8,015

 

$

6,156

 

$

15,617

 

$

12,041

Sales and marketing

 

3,346

 

 

 

3,145

 

 

 

6,651

 

 

 

6,251

 

Research and development

 

658

 

 

 

665

 

 

 

1,290

 

 

 

1,340

 

Total amortization of acquired intangible assets

$

12,019

 

 

$

9,966

 

 

$

23,558

 

 

$

19,632

 

(3)

Includes employer payroll tax on employee stock transactions as follows:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

2024

 

2025

 

2024

 

(in thousands)

Cost of revenue

$

200

 

$

161

 

$

461

 

$

373

Sales and marketing

 

748

 

 

 

788

 

 

 

1,879

 

 

 

2,052

 

Research and development

 

1,103

 

 

 

900

 

 

 

2,829

 

 

 

2,568

 

General and administrative

 

462

 

 

 

494

 

 

 

1,345

 

 

 

1,539

 

Total employer payroll tax on employee stock transactions

$

2,513

 

 

$

2,343

 

 

$

6,514

 

 

$

6,532

 

(4)

Includes acquisition-related expenses as follows:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

2024

 

2025

 

2024

 

(in thousands)

Sales and marketing

$

138

 

$

1,000

 

$

794

 

$

1,448

Research and development

 

695

 

 

 

 

 

 

1,744

 

 

 

 

General and administrative

 

166

 

 

 

563

 

 

 

541

 

 

 

563

 

Total acquisition-related expenses

$

999

 

 

$

1,563

 

 

$

3,079

 

 

$

2,011

 

Procore Technologies, Inc.

Condensed Consolidated Balance Sheets (unaudited)

 

 

June 30,

2025

 

December 31,

2024

 

(in thousands)

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

324,262

 

 

$

437,722

 

Marketable securities, current

 

296,618

 

 

 

337,673

 

Accounts receivable, net

 

194,103

 

 

 

246,472

 

Contract cost asset, current

 

43,439

 

 

 

33,922

 

Prepaid expenses and other current assets

 

54,098

 

 

 

44,090

 

Total current assets

 

912,520

 

 

 

1,099,879

 

Marketable securities, non-current

 

85,869

 

 

 

46,042

 

Capitalized software development costs, net

 

127,755

 

 

 

112,321

 

Property and equipment, net

 

44,023

 

 

 

43,592

 

Right of use assets - finance leases

 

20,521

 

 

 

31,727

 

Right of use assets - operating leases

 

33,093

 

 

 

28,790

 

Contract cost asset, non-current

 

59,033

 

 

 

47,505

 

Intangible assets, net

 

125,974

 

 

 

120,946

 

Goodwill

 

574,105

 

 

 

549,651

 

Other assets

 

21,208

 

 

 

20,918

 

Total assets

$

2,004,101

 

 

$

2,101,371

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

20,159

 

 

$

33,146

 

Accrued expenses

 

97,561

 

 

 

88,740

 

Deferred revenue, current

 

560,598

 

 

 

584,719

 

Other current liabilities

 

27,565

 

 

 

21,427

 

Total current liabilities

 

705,883

 

 

 

728,032

 

Deferred revenue, non-current

 

4,467

 

 

 

5,815

 

Finance lease liabilities, non-current

 

27,455

 

 

 

41,352

 

Operating lease liabilities, non-current

 

37,678

 

 

 

32,697

 

Other liabilities, non-current

 

11,019

 

 

 

5,122

 

Total liabilities

 

786,502

 

 

 

813,018

 

Stockholders’ equity

 

 

 

Common stock

 

15

 

 

 

15

 

Additional paid-in capital

 

2,517,880

 

 

 

2,535,868

 

Accumulated other comprehensive loss

 

(1,425

)

 

 

(2,737

)

Accumulated deficit

 

(1,298,871

)

 

 

(1,244,793

)

Total stockholders’ equity

 

1,217,599

 

 

 

1,288,353

 

Total liabilities and stockholders’ equity

$

2,004,101

 

 

$

2,101,371

 

Remaining performance obligation:

 

The following table presents our current and non-current RPO at the end of each period:

 

 

June 30,

 

Change

 

2025

 

2024

 

Dollar

 

Percent

 

(dollars in thousands)

Remaining performance obligations

 

 

 

 

 

 

 

Current

$

879,489

 

$

724,832

 

$

154,657

 

21%

Non-current

 

464,268

 

 

 

310,381

 

 

 

153,887

 

 

50%

Total remaining performance obligations

$

1,343,757

 

 

$

1,035,213

 

 

$

308,544

 

 

30%

Procore Technologies, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

2024

 

2025

 

2024

 

(in thousands)

Operating activities

 

 

 

 

 

 

 

Net loss

$

(21,089

)

 

$

(6,311

)

 

$

(54,078

)

 

$

(17,277

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

 

 

 

 

 

 

 

Stock-based compensation

 

55,591

 

 

 

49,225

 

 

 

103,870

 

 

 

89,357

 

Depreciation and amortization

 

27,237

 

 

 

20,843

 

 

 

54,092

 

 

 

40,894

 

Accretion of discounts on marketable debt securities, net

 

(1,870

)

 

 

(3,661

)

 

 

(4,295

)

 

 

(6,749

)

Abandonment of long-lived assets

 

2,101

 

 

 

312

 

 

 

2,455

 

 

 

580

 

Noncash operating lease expense

 

1,374

 

 

 

2,259

 

 

 

2,929

 

 

 

4,993

 

Unrealized foreign currency (gain) loss, net

 

(1,014

)

 

 

(365

)

 

 

(2,150

)

 

 

714

 

Deferred income taxes

 

(647

)

 

 

1

 

 

 

1,568

 

 

 

2

 

(Benefit from) provision for credit losses

 

(57

)

 

 

216

 

 

 

(966

)

 

 

405

 

Decrease (increase) in fair value of strategic investments

 

(41

)

 

 

118

 

 

 

183

 

 

 

(641

)

Changes in operating assets and liabilities, net of effect of asset acquisitions and business combinations

 

 

 

 

 

 

 

Accounts receivable

 

(31,709

)

 

 

(19,019

)

 

 

54,618

 

 

 

48,994

 

Deferred contract cost assets

 

(13,606

)

 

 

(1,662

)

 

 

(20,175

)

 

 

(2,089

)

Prepaid expenses and other assets

 

(1,782

)

 

 

494

 

 

 

(9,236

)

 

 

(190

)

Accounts payable

 

(1,903

)

 

 

10,124

 

 

 

(12,973

)

 

 

13,279

 

Accrued expenses and other liabilities

 

21,512

 

 

 

3,707

 

 

 

11,632

 

 

 

(30,447

)

Deferred revenue

 

(1,741

)

 

 

3,231

 

 

 

(28,309

)

 

 

(10,877

)

Operating lease liabilities

 

(1,528

)

 

 

(817

)

 

 

(2,309

)

 

 

(3,108

)

Net cash provided by operating activities

 

30,828

 

 

 

58,695

 

 

 

96,856

 

 

 

127,840

 

Investing activities

 

 

 

 

 

 

 

Purchases of property and equipment

 

(2,975

)

 

 

(1,874

)

 

 

(7,008

)

 

 

(3,963

)

Capitalized software development costs

 

(17,226

)

 

 

(10,218

)

 

 

(32,557

)

 

 

(19,732

)

Purchases of strategic investments, net

 

(352

)

 

 

(862

)

 

 

(902

)

 

 

(1,072

)

Purchases of marketable securities

 

(84,008

)

 

 

(222,940

)

 

 

(218,606

)

 

 

(324,374

)

Maturities of marketable securities

 

87,872

 

 

 

118,798

 

 

 

223,659

 

 

 

226,099

 

Customer repayments of materials financing

 

 

 

 

202

 

 

 

 

 

 

1,483

 

Business combinations, net of cash acquired

 

(262

)

 

 

(25,945

)

 

 

(41,515

)

 

 

(25,945

)

Asset acquisitions, net of cash acquired

 

 

 

 

(3,787

)

 

 

(3,533

)

 

 

(3,792

)

Net cash used in investing activities

 

(16,951

)

 

 

(146,626

)

 

 

(80,462

)

 

 

(151,296

)

Financing activities

 

 

 

 

 

 

 

Proceeds from stock option exercises

 

5,293

 

 

 

2,790

 

 

 

7,607

 

 

 

9,915

 

Proceeds from employee stock purchase plan

 

14,404

 

 

 

13,187

 

 

 

14,404

 

 

 

13,187

 

Repurchases of common stock

 

(3,131

)

 

 

 

 

(103,160

)

 

 

Payment of tax withholding for net share settlement

 

(21,578

)

 

 

 

 

(49,855

)

 

 

Principal payments under finance lease agreements, net of proceeds from lease incentives

 

(412

)

 

 

(220

)

 

 

(800

)

 

 

(669

)

Net cash (used in) provided by financing activities

 

(5,424

)

 

 

15,757

 

 

 

(131,804

)

 

 

22,433

 

Net increase (decrease) in cash and cash equivalents

 

8,453

 

 

 

(72,174

)

 

 

(115,410

)

 

 

(1,023

)

Effect of exchange rate changes on cash

 

2,075

 

 

 

757

 

 

 

1,950

 

 

 

(528

)

Cash and cash equivalents, beginning of period

 

313,734

 

 

 

427,656

 

 

 

437,722

 

 

 

357,790

 

Cash and cash equivalents, end of period

$

324,262

 

 

$

356,239

 

 

$

324,262

 

 

$

356,239

 

Procore Technologies, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)

 

Reconciliation of gross profit and gross margin to non-GAAP gross profit and non-GAAP gross margin:

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

2024

 

2025

 

2024

 

(dollars in thousands)

Revenue

$

323,919

 

 

$

284,347

 

 

$

634,551

 

 

$

553,775

 

Gross profit

 

256,187

 

 

 

236,246

 

 

 

501,893

 

 

 

459,951

 

Stock-based compensation expense

 

5,868

 

 

 

3,683

 

 

 

11,136

 

 

 

6,868

 

Amortization of acquired technology intangible assets

 

8,015

 

 

 

6,156

 

 

 

15,617

 

 

 

12,041

 

Employer payroll tax on employee stock transactions

 

200

 

 

 

161

 

 

 

461

 

 

 

373

 

Non-GAAP gross profit

$

270,270

 

 

$

246,246

 

 

$

529,107

 

 

$

479,233

 

Gross margin

 

79

%

 

 

83

%

 

 

79

%

 

 

83

%

Non-GAAP gross margin

 

83

%

 

 

87

%

 

 

83

%

 

87

%

Reconciliation of operating expenses to non-GAAP operating expenses:

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

2024

 

2025

 

2024

 

(dollars in thousands)

Revenue

$

323,919

 

 

$

284,347

 

 

$

634,551

 

 

$

553,775

 

 

 

 

 

 

 

 

 

GAAP sales and marketing

 

141,897

 

 

 

127,922

 

 

 

280,581

 

 

 

248,916

 

Stock-based compensation expense

 

(17,589

)

 

 

(15,671

)

 

 

(32,539

)

 

 

(28,691

)

Amortization of acquired intangible assets

 

(3,346

)

 

 

(3,145

)

 

 

(6,651

)

 

 

(6,251

)

Employer payroll tax on employee stock transactions

 

(748

)

 

 

(788

)

 

 

(1,879

)

 

 

(2,052

)

Acquisition-related expenses

 

(138

)

 

 

(1,000

)

 

 

(794

)

 

 

(1,448

)

Non-GAAP sales and marketing

$

120,076

 

 

$

107,318

 

 

$

238,718

 

 

$

210,474

 

GAAP sales and marketing as a percentage of revenue

 

44

%

 

 

45

%

 

 

44

%

 

 

45

%

Non-GAAP sales and marketing as a percentage of revenue

 

37

%

 

 

38

%

 

 

38

%

 

 

38

%

 

 

 

 

 

 

 

 

GAAP research and development

$

88,902

 

 

$

72,308

 

 

$

176,511

 

 

$

142,907

 

Stock-based compensation expense

 

(21,237

)

 

 

(17,628

)

 

 

(39,661

)

 

 

(31,363

)

Amortization of acquired intangible assets

 

(658

)

 

 

(665

)

 

 

(1,290

)

 

 

(1,340

)

Employer payroll tax on employee stock transactions

 

(1,103

)

 

 

(900

)

 

 

(2,829

)

 

 

(2,568

)

Acquisition-related expenses

 

(695

)

 

 

 

 

 

(1,744

)

 

 

 

Non-GAAP research and development

$

65,209

 

 

$

53,115

 

 

$

130,987

 

 

$

107,636

 

GAAP research and development as a percentage of revenue

 

27

%

 

 

25

%

 

 

28

%

 

 

26

%

Non-GAAP research and development as a percentage of revenue

 

20

%

 

 

19

%

 

 

21

%

 

 

19

%

 

 

 

 

 

 

 

 

GAAP general and administrative

$

55,655

 

 

$

50,792

 

 

$

111,313

 

 

$

101,810

 

Stock-based compensation expense

 

(13,718

)

 

 

(13,961

)

 

 

(26,100

)

 

 

(25,690

)

Employer payroll tax on employee stock transactions

 

(462

)

 

 

(494

)

 

 

(1,345

)

 

 

(1,539

)

Acquisition-related expenses

 

(166

)

 

 

(563

)

 

 

(541

)

 

 

(563

)

Non-GAAP general and administrative

$

41,309

 

 

$

35,774

 

 

$

83,327

 

 

$

74,018

 

GAAP general and administrative as a percentage of revenue

 

17

%

 

 

18

%

 

 

18

%

 

 

18

%

Non-GAAP general and administrative as a percentage of revenue

 

13

%

 

 

13

%

 

 

13

%

 

 

13

%

Reconciliation of income from operations and operating margin to non-GAAP income from operations and non-GAAP operating margin:

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

2024

 

2025

 

2024

 

(dollars in thousands)

Revenue

$

323,919

 

 

$

284,347

 

 

$

634,551

 

 

$

553,775

 

Loss from operations

 

(30,267

)

 

 

(14,776

)

 

 

(66,512

)

 

 

(33,682

)

Stock-based compensation expense

 

58,412

 

 

 

50,943

 

 

 

109,436

 

 

 

92,612

 

Amortization of acquired intangible assets

 

12,019

 

 

 

9,966

 

 

 

23,558

 

 

 

19,632

 

Employer payroll tax on employee stock transactions

 

2,513

 

 

 

2,343

 

 

 

6,514

 

 

 

6,532

 

Acquisition-related expenses

 

999

 

 

 

1,563

 

 

 

3,079

 

 

 

2,011

 

Non-GAAP income from operations

$

43,676

 

 

$

50,039

 

 

$

76,075

 

 

$

87,105

 

Operating margin

 

(9

%)

 

 

(5

%)

 

 

(10

%)

 

 

(6

%)

Non-GAAP operating margin

 

13

%

 

 

18

%

 

 

12

%

 

 

16

%

Reconciliation of net loss and net loss per share to non-GAAP net income and non-GAAP net income per share:

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

2024

 

2025

 

2024

 

(in thousands, except share and per share amounts)

Revenue

$

323,919

 

 

$

284,347

 

 

$

634,551

 

 

$

553,775

 

Net loss

 

(21,089

)

 

 

(6,311

)

 

 

(54,078

)

 

 

(17,277

)

Stock-based compensation expense

 

58,412

 

 

 

50,943

 

 

 

109,436

 

 

 

92,612

 

Amortization of acquired intangible assets

 

12,019

 

 

 

9,966

 

 

 

23,558

 

 

 

19,632

 

Employer payroll tax on employee stock transactions

 

2,513

 

 

 

2,343

 

 

 

6,514

 

 

 

6,532

 

Acquisition-related expenses

 

999

 

 

 

1,563

 

 

 

3,079

 

 

 

2,011

 

Non-GAAP net income

$

52,854

 

 

$

58,504

 

 

$

88,509

 

 

$

103,510

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Non-GAAP net income

$

52,854

 

 

$

58,504

 

 

$

88,509

 

 

$

103,510

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic

 

149,663,744

 

 

 

146,938,942

 

 

 

149,829,900

 

 

 

146,207,469

 

Effect of dilutive securities: Employee stock awards

 

3,149,309

 

 

 

4,653,396

 

 

 

4,324,779

 

 

 

5,349,382

 

Weighted-average shares used in computing net income per share attributable to common stockholders, diluted

 

152,813,053

 

 

 

151,592,338

 

 

 

154,154,679

 

 

 

151,556,851

 

 

 

 

 

 

 

 

 

GAAP net loss per share, basic

$

(0.14

)

 

$

(0.04

)

 

$

(0.36

)

 

$

(0.12

)

GAAP net loss per share, diluted

$

(0.14

)

 

$

(0.04

)

 

$

(0.36

)

 

$

(0.12

)

Non-GAAP net income per share, basic

$

0.35

 

 

$

0.40

 

 

$

0.59

 

 

$

0.71

 

Non-GAAP net income per share, diluted

$

0.35

 

 

$

0.39

 

 

$

0.57

 

 

$

0.68

 

Computation of free cash flow:

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2025

 

2024

 

2025

 

2024

 

(in thousands)

Net cash provided by operating activities

$

30,828

 

 

$

58,695

 

 

$

96,856

 

 

$

127,840

 

Purchases of property, plant, and equipment

 

(2,975

)

 

 

(1,874

)

 

 

(7,008

)

 

 

(3,963

)

Capitalized software development costs

 

(17,226

)

 

 

(10,218

)

 

 

(32,557

)

 

 

(19,732

)

Non-GAAP free cash flow

$

10,627

 

 

$

46,603

 

 

$

57,291

 

 

$

104,145

 

 

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