We're excited to have the Procore team here. Matt's here as well. Spent a lot of time with him at Salesforce and now Procore. Appreciate your support of the conference, and guys, if you don't know him, reach out. A phenomenal individual and knows the story very well. Most of the time. Most of the time. Howard, is probably our youngest crop new CFO, May of 2023, announced CFO. Congratulations. Thank you. -on that. Thank you. Youngest in tenure. The gray gives away I'm not young by academia, but, yeah. His time at Visa, Salesforce, LinkedIn, DocuSign, obviously an incredible list of stories that you've worked for, so congrats on that, and thanks for the time. Thank you. Maybe, you know, that's a good place to start, Howard. Just when you think of... You're not new to the story, but in your role, kind of top priorities for you coming in. I know you've helped build the team, and, you know, there's probably a lot of the infrastructure's there that you need, but, I mean, when you think about just this year for you, how do you think about, you know, your top three big priorities in your new role? Yeah. Well, the when I think about the top priorities, I categorize them probably into three big categories, and one category is going to be around operational excellence, so operational excellence in terms of how we go to market, the foundational pieces around our data infrastructure, and everything around how we operate. The second piece is going to be around capital allocation, so capital allocation around where do we put our investments international, which products do we put our investments in, and so forth. The third piece is around monetization: monetization of the products that we have, that we're building, monetization and the synthesis of the products that we've acquired through some of our M&A. It's really across those three categories. I could go into each one of those categories and kind of give you a list of things that we're focused on this year. Really, it's about synthesizing those three pieces to make sure that we're set up in a way that we don't just want to get to $1 billion, but we're talking about $2 billion, $3 billion, $4 billion, $5 billion, long term, what the growth rate looks like, and to make sure that we do that in a very efficient way. It's efficient growth. A lot of different categories under those three broader themes. Yeah. If we can pull down on efficient growth, like, the one of the biggest questions we get is: I love this team, I love the end market, I love 34% growth, but I'm still at a -2% op margin in the last quarter. Everyone asks, like: What does it take to get the bottom line moving faster? Can you, can you be the catalyst? Can you help push this harder, or is this TAM just too big? You know, the international opportunity is too big. We should all just be a little more patient on the margin to come. Look, I think in my role as CFO, I don't think there's ever going to be a day where I don't push operating efficiency. There's just not a day that I will stop pushing operating efficiency. The trick right now is to balance that with making sure that we still continue to take advantage of that growth. When we think about historically where Procore was, I mean, you know, five, four, three years ago, rightly so, we were about growth at all costs, and we were building out the foundations across products and across some of our operational capabilities to prepare for a time like this, when we believe we have the infrastructure in place to really start to take advantage of that and really start to get more ROI and get more efficient. It's not because somebody in the market told us to do that. That was the plan all along, and I think we're in a really good spot right now to really start to leverage some of those investments. You'll never hear me say, "I'm good with the efficiency that we've got," as a CFO. Where do the biggest sources of efficiency come? I mean, the things that I've seen when I came to visit last time, you know, Tooey talked a lot about how Texas has become a big hub. Maybe it's cheaper to hire, you can get better efficiency there. I mean, what are the other kind of big things that you see and opportunities ahead to take that to the next level? Yeah, yeah, great question. I'll speak to a couple of them on the go-to-market side, and I'll touch on a couple other pieces across the other functional areas. In terms of go-to-market, when we think about the stage of the business in international, as an example, it's very early stages, right? We really didn't make a push into international until roughly around 2017, 2018, and we had two years of COVID in between there. When you look at that evolution of where the stage is in that international business, in those early stages, and the nuances and the specifics of each of the fragmented markets, it takes a lot of investment to go in there, and you're going to see an investment that is overindexed versus the revenue that we're getting from international. As those businesses start to evolve, you're going to see that efficiency start to approach that of the U.S. from a go-to-market standpoint. That's one example. The other example, from a go-to-market standpoint, is in the down market. You know, today we have a human going to market, down market. That is not what we're going to be doing going forward. We don't want to have a human touch every single several thousand dollar customer that we have. Eventually, that's going to work itself into a way where it's more product-led growth or it's more low-touch, no-touch type of growth, and that we can get a ton of efficiency out of in terms of CAC. Not let alone the data that we can get from down market and how that supports overall the growth of the top line, and some of our first, second-order product derivations that we have based on the platform that we have. Those are a couple of huge things. Other areas around G&A, ultimately, we wanna get G&A to a place now that we're two and a half, let's say, past our IPO. There's a lot of efficiencies we can just get in terms of our foundational operations, and in terms of how we use data, our data infrastructure internally, and being more efficient about how we operate there. R&D, I think it's something that we'll continue to get efficient on, but we're always gonna take advantage of opportunities and make sure we make progress against our product roadmap. All those pieces come together as tremendous opportunities for efficiencies. last call, there was a little cautiousness in construction volume commits, which makes sense where rates are at. Yeah. When you think about just overall, I know you have the customers we speak to are like, "We have incredible backlog. We have commitments to them. We, you know, maybe by the time we get rates lower, that backlog, even if some of it wore off, they may be rebuilding backlog at that point." I mean, when you think of just overall where we're at in the cycle and ultimately kind of what happens, maybe just frame how we think of it, 'cause there's a group of investors that just think that higher rates mean death to construction. That's not gonna help your business, but that's not- Yeah not what's happening. No. Yeah, there's a number of ways to look at this, a number of lenses to look at this from. The first one is the fact that we talk about these things openly, it's really our opportunity, and our intent is to be transparent with everybody about what we're seeing. We were clear that this is something that we're seeing. It's not necessarily a trend that we're seeing in terms of the impact on Procore. We wanted to make sure that we were transparent with everyone in terms of what we're seeing. In terms of the impact on Procore, the broader context that you got to remember in terms of the impact is there's kind of a natural muting effect in terms of interest rates and in terms of the macro environment, in terms of how that shows up for us at Procore. That, that muting effect is really around the multiple layers of diversification that we, that we see in terms of that impact. You know, we've got diversification in terms of our customers, the geos that we're in, the stakeholders, the segments, and so forth, and we've got diversification in terms of customers and their portfolios. Then we've got diversification in terms of the way that the macro impacts the construction industry very differently, depending on the environment or the specific point in time. There's multiple layers of that diversification that mutes the impact on Procore. I'm not sitting here and telling you that we are immune from macroeconomic impacts and interest rates and so forth. If there is widespread macroeconomic impacts, if demand starts to fall below supply, demand, meaning demand for construction, supply, largely labor, is the sort of primary constraint that we're seeing. If that starts to get imbalanced, which we don't see right now, of course, there will be an impact on Procore. Right now, there's kind of those muting impacts in terms of the impact on our business. Many ask, you know, when you think about just contract duration, where you're at, say, with your customers, I know, you know, there are some customers that have multi-year, some may have less, but is there just the average contract duration? Is there There hasn't been a significant change. Obviously, when we talked about a small pocket of our customers signing up for a little bit less volume, there's a little bit in terms of the duration, but nothing that's of significance in terms of calling out, saying the duration is less. It's really about that pocket of cautiousness, which we haven't seen become widespread throughout our customer base yet. Keep in mind, that cautiousness and that volume that the customers sign up for being less, they pay higher basis points on that. The way that I interpret that is, customers want to stay with Procore, and they're willing to pay those higher basis points, knowing that as they work through their backlog that they do have, they're going to be continuing to pay those higher basis points. We haven't really seen anything significant in terms of the durations, and again, a small pocket of customers, showing some cautiousness that isn't widespread. At the IPO, the thing that struck me the most of the entire conversation was that 90% of the TAM is outside the U.S. Only 15%-20%, roughly, of your revenue is outside the U.S. That is correct, yeah. There's one school of thought: Let's go big, hammer it, throw it to 11, let's go get it, but it seems like you're taking a more measured approach. Maybe the opportunity set's so big in the U.S. that you don't wanna take your eye off that ball, and that this is a, you know, 20, 30, 40-year game that you can play. Like, how do you? Yeah. I know you're a sports guy, so if you wanna put a sports analogy in, you can. you know, you wanna, a sports guy, you wanna ride the guy that's hot, right? No. Which is true. We absolutely want to ultimately, our goal is to make inroads into that massive opportunity international. The one thing, remember, that I said is, when you go to the non-U.S. markets, it's actually way more fragmented than what you see in the U.S. Therefore, you have to think about the different models to go after in each one of the markets that we go into. Frankly, we've had some missteps in terms of how we've done that. We've essentially thought that we could take the model that we had in the U.S. and just replicate it throughout these different geos. What we've learned early on is that's just not the right play. What we've done is to start to think about across a lot of different dimensions, across people, organizational structure, how we think about, for example, the right path and the right sequencing of marketing in each one of these markets, and then enabling our folks on the ground such that they're approaching customers in the right way and really demonstrating the value that Procore can add, and then to enable the customers as well. We're actually being very deliberate now about how that looks like in each market that we go into. There's-- we're still a huge believer in that international market. We-- there-- nothing has changed about our strategy. There's still product-market fit. All that, from a macro and 30,000 foot level, is still in place, and we still believe that. It's really about operationally, how we go after that. In the U.S., I think at Investor Day, we shared some of the numbers in terms of the penetration in the U.S., you know, even from a ACV or construction volume standpoint in the U.S., we're less than 14% penetrated. We're less than 2% penetrated from a logo standpoint. Even in the U.S., there's still tremendous opportunity to continue to grow. You know, we're being very cautious here, and like I said, even on the international side, the investments right now outweigh the revenue that we're getting. We are making a push in international. It's just a little bit of a different path in terms of how the U.S. took, just because of the fragmentation of the nuances. You got some great software, but now you have some really cool side thrusters, if you will. Side thrusters. -with, pay, insurance, Materials Financing. can you just lay out, like, when does this start to have an impact? I know you love all three equally, but, like, which one could be the biggest? First of all, don't put it in your models yet, right? It's, it's several years away. All these three are actually in test mode, right? We mentioned this with specifically with, for example, Materials Financing, which is the one that was started the soonest out of all three. We're really starting to build the game tape and testing out a lot of hypotheses. That's the first thing. The second thing I would say is, I wouldn't necessarily think about each one of those independently. I would think about it as Procore is trying to solve the pain points for the construction industry. Those pain points, when you start to peel that back, is really about capital management, capital access, capital movement, and about managing risk. When you think about Procore Pay, and you think about Materials Financing, and you think about Procore Risk Advisors or insurance, it's really managing the capital and the risk. If I were to break those pieces down, Materials Financing, we believe. Well, actually, let me step back. Materials, finance, insurance, and Procore Pay, all of that is predicated on the tremendous amount of data that is being generated on Procore's platform, and that's the foundation of everything in terms of what we are going to leverage and our hypothesis that we can leverage that to solve the problems around risk and around capital. Specifically, around Materials Financing, we believe that the data can help us assess the risk of financing different folks in the industry, and that's the hypothesis, and that's the game tape that we're looking at. We're doing that right now by committing a small amount of capital from our balance sheet, but if this starts to take off, we will absolutely get a capital partner. I am not gonna finance all this financing off of our balance sheet. When you think about Pay, it's about the movement of capital, but also the access to capital for, let's say, the subcontractors. Initially, the tests are gonna be around the movement of dollars between the GC and the SC, and looking at really the payer model, so the GC paying for that functionality. We're working with Goldman Sachs Transaction Banking to make sure that that functionality is built into our platform. When you start to expand that, the interesting opportunities start to get are really around the SC, where you start to think about: "Well, if I could pay something to get paid earlier, what does that look like?" We're testing out all those different models. The piece around insurance is. That's just straight risk management. We believe the data that we've got can help our customers present themselves better to insurance carriers to hopefully receive better terms, better pricing, and then Procore, as a broker, will receive a commission off of that, which will span depending on the project, the GC, and the stakeholder. That will span a range of percentage points, and that's what we're testing right now. This is in concert. It's not like you're gonna be a full-fledged insurance company or. Yeah. This is all partnered ecosystem. That's exactly right. That's exactly right. It's entire ecosystem. That's why I said you gotta kind of think about all those components together, not that I have a favorite child. You know, it's all these pieces put together to solve the different pain points, and we will get partners throughout all of this. There was a huge article about insurance costs skyrocketing, and you can't get things built, so we gotta fix the insurance thing to let things get built. That's exactly right. That's- That's exactly right. Maybe this is a short conversation on AI, but I'd say of all the companies that are here, you're probably the least impacted. I'm curious, if, do you have any of your customers asked you about AI or not? Customers do ask. The customers asked, actually, a few weeks ago, we just had an executive customer advisory board, and they asked about Analytics and not necessarily about AI, but it's definitely part of the flavor that we're hearing from our customers. We're excited. We think this is real. Like everybody else, this is so early, and we're trying to think about how this will play out and what it looks like in terms of productization, right? One of the things that I said about the three components of fintech, or really payments, is really a software, but we'll call it three components, is the foundation is the data that we generate and the customers generate on our platform. It's not just data, it's proprietary data. When you think about layering on generative AI, large language models, all those pieces, the value is in layering that on the proprietary data, and we believe that there's tremendous opportunity there to add value to our customers. Very early, obviously, we're thinking about this. We've got talent on board already from acquisitions that we've done in the past, and we continue to hire that talent on board, and something that we have been talking about and actively talk about. The other piece of that, I always think about in two components: there's the customer component, and then how AI will influence how we work internally as well. That plays back to kind of some of the efficiency pieces that we talked about earlier as well, but very early innings. Your core platform is on AWS, correct? Our core- Yeah. Yes, it is. Is your cloud. Can you leverage AWS for AI, or do you have to build? We don't know. We're not sure yet, and that's part of the things that we're evaluating, and we need to figure out. One of the questions that we get a lot about is just the fear of large contractor saturation. Mm-hmm in the U.S. Mm-hmm. Can you address that? Like, how do you-? Yeah! Yeah. In the U.S. This is going back to some of the data that we shared in the Investor Day as well. In the U.S., I, like, as mentioned before, we're less than 14% penetrated in the, in the construction volume, less than 2% penetrated on the, on the logo side of things. Within that 14% of construction volume, the largest penetration that we have is in the U.S. GC, which is 25%. If I step back a little bit, and I think globally, we're about less than, I think, less than 2% penetrated on the construction volume and less than 1% penetrated in logo. You put all that together globally, we're less than 6% penetrated globally on construction volume, less than 1% penetrated on logos globally. I'd say there's tremendous amount of room to grow. Specifically for the U.S., and let's say U.S. GC, most of our expansion growth today, everywhere, is largely still, construction volume growth. As we think about the evolution of the products and the evolution of our customers' evolution in terms of usage of those products, there's still a tremendous amount of opportunity to cross-sell those products into our customers. Look, theoretically, we could hit the limit of the construction volume in any particular segment or stakeholder, and even at that point, we could still do cross-sells, but we're so far from that at this point, even in our current product suite, there's still tremendous opportunity to grow. That's just the SaaS piece, so we're not even talking about some of those second order, third order, productization of some of the things around fintech and so forth. There's still tremendous amount of opportunity to grow. Any changes competitively? We get the question about the other company. The other company. there's only two. One designs, one collaborates. Uh- I think on the design side that, you know, we won't even name them, but is there any change? You know, we ask that all the time, and we ask that of our field folks who are directly dealing with this on a day-to-day basis. Nothing has fundamentally changed in terms of that competitive dynamic. You know, nothing has significantly changed in terms of, you know, win rates and when we see the competitors and so forth. Everything has remained fairly stable. You have to remember also that a lot of times the competition is not that other company or other companies. A lot of times the competition is analog, it's Excel, it's a person writing on a whiteboard in a construction site in a trailer. It's not necessarily about the competition, but really about the overall market opportunity. There could be multiple winners here, right? We believe we're in the pole position. You have over 13 products? 13 + products. Very few have adopted all of them. That's correct. or even a majority of them. That's correct. When you think about the kind of the easy add-ons, what are the easy ones that customers maybe haven't taken that you think could take in the next couple of years? The one that's right in front of us, right? First of all, the Project Management obviously is our flagship, our core product, right? The natural extension of that is into Quality & Safety. The one that's in front of us past those right now is really the financial suite, so it's Project Financials. When you start to move beyond that, you're looking at things like Invoice Management, which is also product, part of the financial suite, and you're looking at things like Analytics. When you think about the path that our customers take along that product adoption and the different products that are used, it's gonna depend on the stakeholder, what that path looks like. As an example, if you're an SC or you're downmarket, you may be using Project Financials, but your evolution might be more towards things like Workforce Management, so field productivity, or more towards bidding and estimating. Whereas if you're an owner, the next logical step might be more akin to something like the financial suite of products. It's gonna depend on kind of the stakeholder that dictates what's the right path and what's the most likely path that you're gonna take based on, based on the nature of your business. We continuously evaluate what that looks like across all stakeholders and all geographies. Any last questions for Howard? Yes. We are essentially 100% a direct business, we have sales folks. We have, you know, inbound, outbound pipe generation, we have physical AEs working deals all the way from downmarket to upmarket by stakeholder and all geos. This is one of the things that I was talking about for downmarket, where that model is not something that we want to sustain over the long term, just from an efficiency standpoint. That's correct. We have... Well, remind me, we have, what, 400, around 400 salespeople? Yeah. It is growing. It is growing. There's still tremendous opportunity out there, that's one dimension we think about, is capacity, to make sure we have capacity to go after the opportunity that's out there, but also making sure from an enablement standpoint, pipeline standpoint, to make sure that they're productive. Bob Myers leaving, is that the end of the Warriors? I don't know. It's questionable how much he had an impact on that. He drafted them. He made some nice moves, I don't know. We'll see. They're thinking about putting Lacob's son in place. I don't know. We'll see. We'll see. Nice one. Great. Thanks, Howard. Really appreciate the time. Of course. Thank you. Thanks.