Procore ($PCOR) Metrics

Customers Contributing >$100K of ARR

There were 2333 in 2024, representing a 16% increase and 63% of total ARR. Because Enterprise and Mid Market customers represent the vast majority of total ARR, this is the most relevant metric.

Customers Contributing > $1M in ARR

There were 86 in 2024, representing a 39% increase and 17% of total ARR.

Total Customers

There were 17088 in 2024, representing a 4% increase. This metric is heavily influenced by SMB customer additions, who represent a small portion of revenue. Indeed, percentage increases in Customers Contributing >$100K of ARR tracks much closer to revenue than percentage increases in Total Customers.

ARR

It was $1.208 B in 2024, representing a 16.2% increase. It is defined using the contractual subscription fees as of the period end date. It includes the value of subscriptions that are still active and subscriptions that are being negotiated for a renewal. When modeling I might adjust ARR by multiplying the additions for subscriptions by the GRR. I also note that ARR excludes increases to subscription prices for multi-year contracts that are repriced, but not fully renegotiated each year.

GRR

It was 94% in 2024. It is calculated by subtracting the previous period ARR by the value of cancellations (subscriptions that weren’t renewed) and dividing it by the prior period ARR. This is a good indication of their product-market fit and stickiness.

NRR

It was 106% in 2024. It is calculated by dividing the current ARR from the previous year’s customer cohort by the beginning of period ARR. Because pooled-volume contracts obscure YoY changes in price (the cost is fixed for a multi year period), NRR isn’t used by Procore as a key indicator.

RPO

It was $1.286 B in 2024, representing a 29% increase. RPO represents the contracted transaction price that has not yet been recognized as revenue. It includes deferred revenue and amounts under non-cancelable subscriptions that will be recognized as revenue in the future.

cRPO

$830 M in 2024, representing a 19% increase. cRPO is the RPO that is expected to be recongized within the next 12 months. 26% of the increase was attributable to existing customers and 74% was attributable to new customers. This is a key metric to track Procore’s ability to attract new customers and expand existing ones. Note that cRPO is influenced by duration, as multi-year contracts can refill cRPO since it continues into the next year. When duration increases, as it did in the most recent quarter, cRPO must be adjusted downward to get an accurate view.

Billings

$1,233 M in 2024, representing an increase of 16.5%. We can calculate this based on revenue plus change in deferred revenue. This is a good flow metric to track how much is getting invoiced, especially since invoicing terms are fairly consistent at the beginning of each year.

Bookings

$1,438 M in 2024, representing an increase of 24.7%. We can calculate this based on recognized revenue plus the change in RPO. This is a good flow metric to track how much is actually getting sold, but there isn’t an adjustment for duration, which is important because of the varying time frames.

ST Bookings

$1,283 M in 2024, representing an increase of 17.7%. This is revenue plus the change in current RPO.

Professional Services Mix

Useless, since virtually all revenue is recognized on a subscription basis.

Customer Churn

Not calculated, since this would be influenced heavily by SMB customers.

Net Customer Retention

104%, but not a super useful metric since this is heavily influenced by SMB customers.

Net Customer Retention (MM+E)

116%, but not a super useful metric since this is heavily influenced by SMB customers.

Customer Lifetime

16.7 years, based on the reported GRR.

LTV

$3.33M. Procore calculates lifetime value by multiplying the non-GAAP gross margin (86%) by 1/churn (6%) by the gross new ARR ($168M) for the year, divided by the number of new customers (721).

CAC

$661K. Procore calculates CAC by dividing the non-GAAP S&M expense (476.6 M) by the number of new customers (721). This doesn’t account for the fact that PCOR acquires many of their customers by giving collaborators free access to the platform. Accounting for the 60% of users that use the platform for free (so adding 60% times the non-GAAP cost of revenue (164.1M)) the CAC is $798K.

LTV/CAC

On a pure-play basis it is 5. When accounting for the COGS expense associated with new customer customer acquisition, it is 4. It doesn’t account for the vastly different nature of each segment, as enterprise and MM customers have much higher ARPUs and will have much longer lifetimes than SMBs. I also dislike how Procore excludes the expenses associated with providing free access to the platform.

CAC Payback Period

40 months on a pure play basis, but 48 months if you add cost of revenue to CAC. The CAC is divided by the gross margin (86%) times the new ARR per customer ($233K). This is not a great metric, since Procore uses a land and expand model, meaning that the customer’s ARR is expected to increase over time.

Customer Concentration

Already implied through data about customer types as a percentage of ARR.

New Business Dependency

Most of cRPO increase is driven by new customers and not expansion revenue, but keep in mind that PCOR is growing and should be acquiring new customers.

FCF

$128M in 2024, up from $47M in 2023. This is CFO ($196M) minus capitalized software development costs ($49.5M) and purchases of PP&E ($19M).

Rule of 40

32%. 11% from FCF Margin and 21% from revenue growth. It becomes harder to maintain this once revenue starts to grow, but Procore is making measurable strides toward profitability while retaining growth.

Cash Conversion

FCF is higher than adjusted EBITDA due to the large amount of unearned revenue that is recorded each period, making the cash conversion ratio too high to make sense.

S&M Margin

48% GAAP margin, 41% non-GAAP margin. This is decreasing as a percentage of revenue, indicating some degree of operating leverage as PCOR scales.

Magic Number

New revenue minus old revenue was $202M but S&M in the previous period was $495M, creating a magic number of 0.4. This metric doesn’t make too much sense, because it was designed for mid-market SaaS with short sales cycles. This is flawed for a few reasons: (a) Procore’s sales cycle is very long (b) revenue is recognized ratably, so large deals won may not be immediately recognized in revenue and (c) Procore has high S&M intensity due to the restructuring of their GTM operation.