Key Highlights

  • Revenue was USD 402 million in the third quarter of 2026, up 19% year over year, including 2 points of growth from the DroneDeploy acquisition, the company said on November 3, 2026.
  • Non-GAAP Operating Margin was 23%, while GAAP operating margin was negative 2%, as non-GAAP results exclude stock-based compensation, intangible amortization, employer Payroll Tax on stock transactions and Acquisition costs.
  • Operating cash inflow rose 8% to USD 96 million and free cash inflow rose 8% to USD 73 million, with gross Revenue retention at 95% in the quarter.
  • Full-year 2026 revenue guidance is USD 1,557.0 million to USD 1,559.0 million, with a non-GAAP operating margin of 19.0% to 19.5% and a 2027 non-GAAP margin target of 25%.

Third Quarter Beats Guidance, With DroneDeploy Adding Growth

Procore Technologies (NYSE:PCOR) announced third quarter 2026 results on November 3, 2026. Revenue of USD 402 million was above the high end of guidance, according to management, and the chief executive described margins as also above the range. Without the DroneDeploy contribution, growth was about 17%, our own arithmetic on the 19% total and the 2-point acquisition effect. GAAP gross margin was 80% and non-GAAP gross margin was 84%. The company said 2,968 organic customers contribute more than USD 100,000 of annual recurring revenue, up 14%. It also made its Procore AI digital coworkers generally available and announced collaborations with NVIDIA and IBM at its Groundbreak 2026 event.

The Gap Between GAAP and Non-GAAP Profitability

Procore provides construction management software, and the 2027 target refers to a non-GAAP measure. The third quarter shows how wide the gap is: a GAAP operating margin of negative 2% against a non-GAAP margin of 23%, a 25-point difference. Procore excludes stock-based compensation, amortization of acquired intangibles, employer payroll tax on stock transactions and acquisition-related expenses from non-GAAP results, and states that Stock Compensation is a significant recurring expense. Free cash inflow of USD 73 million equals about 18% of revenue, our own arithmetic. Weighted shares were 150.4 million, about flat year over year. The release did not provide the GAAP net loss figure.

Guidance Implies a Fourth Quarter Margin Step-Down

Fourth quarter revenue is guided to USD 420 million to USD 422 million, including USD 19 million from DroneDeploy, for growth of 20.3% to 20.9%. Non-GAAP operating margin is guided to 15.5% to 16.0%, well below the 23% reported in the third quarter. The release does not explain the step-down, so it is a point to ask about on the November 4, 2026 call, scheduled for 8:30 a.m. ET. Full-year free Cash Flow margin is expected to be 18.0%, or 19.5% excluding about USD 23 million of one-time DroneDeploy payments. A new USD 300 million buyback was authorized October 30, 2026 and runs to October 30, 2027, but it carries no obligation. Risks include AI execution, acquisition integration, competition and construction-sector conditions.

Where Things Stand

The company is targeting a 25% non-GAAP operating margin in 2027 because management ties margin expansion to what it calls durable, profitable growth and compounding free cash flow per share, though the release gives no bridge to the figure. Whether that target is credible depends on how the fourth quarter margin of 15.5% to 16.0% compares with 2026's 19.0% to 19.5% full-year range and the 2027 figure. Procore Technologies (NYSE:PCOR) has not provided 2027 revenue guidance in this release, and GAAP profitability remains negative. The next checks are the November 4, 2026 call commentary, DroneDeploy integration and customer retention near 95%.