Procore Raises 2026 Revenue Outlook to $1.559 Billion After 19% Quarterly Growth
Key Facts
Procore reported on November 3 results for the quarter ended September 30, with revenue of $402 million, up 19% year over year, and raised its fiscal 2026 revenue outlook to a range of $1.557 billion to $1.559 billion. Chief Executive Officer Ajei Gopal said, "Revenue and margins exceeded the high end of our expectations," pointing to quarterly performance that supported the annual guidance revision. The company expects a non-GAAP operating margin of 19% to 19.5% for the year. The higher revenue outlook comes alongside a contribution from the DroneDeploy acquisition, which Chief Financial Officer Rachel Byles said accounted for two percentage points of year-over-year revenue growth in the quarter. The outlook indicates the company expects business growth to continue, with acquisition revenue included in its figures.
Gross margin was 80% under generally accepted accounting principles, compared with 84% on a non-GAAP basis, while operating margin was negative 2% under GAAP and 23% on an adjusted basis. The divergence highlights how profitability readings differ based on the treatment of items excluded from the non-GAAP measure. Procore posted a net loss of $4.589 million in the third quarter, compared with a loss of $9.101 million in the same period of 2025. The net loss therefore narrowed year over year, despite the GAAP operating margin remaining negative. These figures offer a different picture from growth and revenue metrics when profitability is viewed under accounting standards.
Cash flow supported the quarterly results: operating cash flow was $96 million and free cash flow was $73 million, each up 8% year over year. By contrast, the company expects a free cash flow margin of 18% for fiscal 2026, including about $23 million in one-time cash payments related to the DroneDeploy acquisition. The expected margin rises to 19.5% excluding those payments, according to the company's statement. These estimates show that deal costs weigh on the expected cash margin for the year. Procore estimates that about $24 million in inorganic DroneDeploy revenue is included in its annual outlook.
Procore expects fourth-quarter revenue of $420 million to $422 million, including $19 million in inorganic DroneDeploy revenue, with a non-GAAP operating margin of 15.5% to 16%. Across its customer base, gross revenue retention was 95% in the third quarter. The number of organic customers each contributing more than $100,000 in annual recurring revenue reached 2,968 on September 30, up 14% year over year. These metrics provide a measure of customer retention and the expansion of the high-contribution customer segment, alongside quarterly revenue growth. Procore announced on July 29 an agreement to acquire DroneDeploy for about $845 million in cash, saying its platform is used at more than 3 million worksites across more than 180 countries.
On capital allocation, Procore's board authorized a new share repurchase program of up to $300 million on October 30, expiring on October 30, 2027. The company said the authorization does not obligate it to buy shares, leaving execution as an option under the program. Further out, Procore expects a non-GAAP operating margin of 25% for fiscal 2027. The outlook follows a February forecast for 2026 revenue of $1.489 billion to $1.494 billion, before it was raised to the current range of $1.557 billion to $1.559 billion. The company has thus combined a higher annual outlook, the inclusion of acquisition revenue and the announcement of an optional repurchase program.