PROCORE TECHNOLOGIES, INC.

Current report

Servicing our debt may require a significant amount of cash, and we may not have sufficient cash flow from our business to service our debt.

Current report

Holders of the 2031 Notes will have the right, subject to certain conditions and except as described in the Indenture, to require us to repurchase all or any portion of their 2031 Notes upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the 2031 Notes to be repurchased, plus accrued and unpaid special interest, if any, up to, but excluding, the fundamental change repurchase date. Upon maturity of the 2031 Notes, we must pay the principal amount of the 2031 Notes plus accrued and unpaid special interest, if any, in cash, unless the 2031 Notes have been previously repurchased, redeemed, or converted. In addition, upon conversion of the 2031 Notes, we will be required to make cash payments for each $1,000 in principal amount of 2031 Notes converted of at least the lesser of $1,000 and the sum of the daily conversion values. We may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2031 Notes surrendered therefor or pay cash with respect to 2031 Notes being converted. In addition, our future debt may prohibit us from making any cash payments on the conversion or repurchase of the 2031 Notes if an event of default exists thereunder or making any cash payments upon a fundamental change. Our ability to repurchase the 2031 Notes or to pay cash upon conversions or at maturity of the 2031 Notes may also be limited by law or by regulatory authority. Our failure to repurchase 2031 Notes at a time when the repurchase is required by the Indenture or to pay any cash payable on future conversions or at maturity of the 2031 Notes as required by the Indenture would constitute a default under the Indenture. A default under the Indenture or the fundamental change itself could also lead to a default under agreements governing our future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2031 Notes or make cash payments upon conversions thereof.

Current report

Conversion of the 2031 Notes may dilute the ownership interest of our stockholders, depress the price of our common stock, or otherwise materially adversely affect our business, financial condition, results of operations, and prospects.

Current report

The conversion of some or all of the 2031 Notes may dilute the ownership interests of our stockholders. Upon conversion of the 2031 Notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2031 Notes being converted. If we elect to settle the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2031 Notes being converted in shares of our common stock or a combination of cash and shares of our common stock, any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the 2031 Notes may encourage short selling by market participants because the conversion of the 2031 Notes could be used to satisfy short positions, or anticipated conversion of the 2031 Notes into shares of our common stock could depress the price of our common stock.

Current report

In the event the conditional conversion feature of the 2031 Notes is triggered, holders of 2031 Notes will be entitled to convert their 2031 Notes at any time during specified periods at their option. If one or more holders elect to convert their 2031 Notes, we would be required to settle any converted principal through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their 2031 Notes, we would be required under applicable accounting rules to reclassify all or any portion of the outstanding principal of the 2031 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

Current report

The accounting method for the 2031 Notes could adversely affect our reported earnings and financial condition

Current report

The accounting method for reflecting the 2031 Notes on our balance sheet, accruing interest expense for the 2031 Notes, and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.

Current report

In August 2020, the Financial Accounting Standards Board published an Accounting Standards Update 2020-06 (“ASU 2020-06”), which simplifies certain of the accounting standards that apply to convertible notes. In accordance with ASU 2020-06 the 2031 Notes are reflected as a liability on our condensed consolidated balance sheets, with the initial carrying amount equal to the principal amount of the 2031 Notes, net of issuance costs. The issuance costs are treated as a debt discount for accounting purposes, and are amortized into interest expense over the term of the 2031 Notes. As a result of this amortization, we will recognize interest expense for the 2031 Notes for accounting purposes which is greater than the cash interest payments of 0.00% on the 2031 Notes, which will result in lower reported net income.

Current report

In addition, the shares of common stock underlying the 2031 Notes are reflected in our diluted earnings per share using the “if converted” method, in accordance with ASU 2020-06. Under that method, diluted earnings per share generally is calculated assuming that all the 2031 Notes were converted into cash and shares of common stock at the beginning of the reporting period based on the average market price of common stock determined in accordance with applicable accounting rules, unless the result would be anti-dilutive. The application of the if-converted method may reduce our reported diluted earnings per share.

Current report

Furthermore, if any of the conditions to the convertibility of the 2031 Notes is satisfied, then we will be required under applicable accounting standards to reclassify the liability carrying value of the 2031 Notes as a current, rather than a long-term liability. This reclassification could be required even if no noteholders convert their 2031 Notes and could materially reduce our reported working capital.

Current report

Certain provisions in the Indenture governing the 2031 Notes may delay or prevent an otherwise beneficial takeover attempt of us.

Current report

Certain provisions in the Indenture may make it more difficult or expensive for a third party to acquire us. For example, except as otherwise set forth in the Indenture, the Indenture will require us to repurchase the 2031 Notes for cash upon the occurrence of a fundamental change and, in certain circumstances, to increase the conversion rate for a holder that converts its 2031 Notes in connection with a make-whole fundamental change. A takeover of us may trigger the requirement that we repurchase the 2031 Notes and/or increase the conversion rate, which could make it costlier for a potential acquirer to engage in such takeover. Such additional costs may have the effect of delaying or preventing a takeover of us that would otherwise be beneficial to investors.

Current report

The Capped Calls may affect the value of the market price of our common stock and subject us to counterparty risk.

Current report

In connection with the pricing of the 2031 Notes, we entered into privately negotiated Capped Calls with certain financial institutions (collectively, the “option counterparties”). The Capped Calls cover, subject to customary adjustments substantially similar to those applicable to the 2031 Notes, the number of shares of our common stock initially underlying the 2031 Notes. The Capped Calls are expected generally to reduce the potential dilution to our common stock upon any conversion of the 2031 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2031 Notes, as the case may be, with such reduction and/or offset subject to a cap.

Current report

The option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2031 Notes (and are likely to do so during any observation period related to a conversion of 2031 Notes, following any redemption of the 2031 Notes or any repurchase of the 2031 Notes upon a fundamental change, or, to the extent we exercise the relevant election under the Capped Calls, following any other repurchase of the 2031 Notes). This activity could also cause or avoid an increase or a decrease in the market price of our common stock. We cannot predict the direction or magnitude of any potential effect that Capped Calls may have on the price of our common stock. In addition, we do not make any representation that the option counterparties or their respective affiliates will not discontinue the Capped Calls without notice.

Current report

The option counterparties are financial institutions, and we are subject to the risk that one or more of the option counterparties may default or otherwise fail to perform, or may exercise certain rights to terminate, their obligations under the Capped Calls. Our exposure to the credit risk of the option counterparties is not secured by any collateral.

Current report

Global economic conditions have from time to time resulted in the actual or perceived failure or financial difficulties of many financial institutions and could adversely affect the option counterparties’ performance under the Capped Calls. If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the Capped Call with such option counterparty. Our exposure will depend on many factors but, generally, our exposure will increase if the market price or the volatility of our common stock increases. In addition, upon a default or other failure to perform, or a termination of obligations, by an option counterparty, we may suffer adverse tax consequences or more dilution than we currently anticipate with respect to our common stock. We can provide no assurances as to the financial stability or viability of the option counterparties.

Current report

In addition, the terms of the Capped Calls may be subject to adjustment, modification or, in some cases, renegotiation in the event of certain corporate and other transactions. The Capped Calls may not operate as we intend in the event that we are required to adjust the terms of such instruments as a result of transactions in the future or in the event of other unanticipated developments that may adversely affect the functioning of the Capped Calls.

Previous report

Item 1A. Risk Factors.

Previous report

Risks Related to Our Business and Industry

Previous report

We have experienced rapid growth in prior periods, and such growth may not be indicative of our future performance. If we fail to properly manage future growth, our business, financial condition, results of operations, and prospects could be materially adversely affected.

Previous report

We have experienced rapid growth in prior periods. Our revenue was $734.5 million and $634.6 million in the six months ended June 30, 2026 and 2025, respectively. Our results of operations may fluctuate significantly, which could make our future results difficult to predict and could cause our results of operations to fall below expectations. You should not rely on the revenue growth of any prior period as an indication of our future performance. While our revenue has continued to increase, our revenue growth rate has declined and may continue to decline in the future as a result of a variety of factors, including our ability to effectively manage our growth and investments (including through our evolved GTM operating model), macroeconomic conditions, and the maturation of our business. Our overall revenue growth and results of operations depend on a number of factors, including many that are out of our control. These factors include our ability to do the following: attract new customers and retain and expand sales of subscriptions to our existing customers; increase sales to owners and specialty contractors, as well as monetize new stakeholders; develop new products and services, further improve our existing products, services, and platform, and evolve our App Marketplace with new offerings and purpose-built APIs; provide our customers and collaborators with support that meets their needs; invest financial and operational resources to support future growth in our customer, collaborator, and third-party relationships; expand our operations domestically and internationally; and retain and motivate existing personnel, and attract, integrate, and retain new personnel, particularly with respect to our sales and marketing and engineering and product development teams.

Previous report

Our future growth also depends on changes in our customers’ IT budgets, the timing and success of new products and services introduced by us or our competitors, the pace of development of the construction management software industry, regulatory and macroeconomic conditions, and economic conditions and business practices within the construction industry, including construction spending in the public and private sectors. The overall sentiment in the construction industry continues to be uncertain, which presents challenges to our future growth. We expect this sentiment to continue at least for the short term as a result of macroeconomic factors.

Previous report

If we are not able to maintain revenue growth or accurately forecast future growth, our business, financial condition, results of operations, and prospects could be materially adversely affected.

Previous report

We have a history of losses and may not be able to sustain profitability in the future.

Previous report

We have a history of losses, and we may not be able to maintain profitability in the future. We recorded net income of $7.8 million for the six months ended June 30, 2026, but incurred a net loss of $54.1 million for the six months ended June 30, 2025. As of June 30, 2026, we had an accumulated deficit of $1.3 billion. We are not certain whether or when we will be able to sustain profitability in the future. We also expect our expenses to increase in future periods as we continue to invest in growth, which could negatively affect our future results of operations if our revenue does not correspondingly increase. In particular, we intend to continue to expend substantial financial and other resources on the following: expanding our sales and marketing and customer success teams to drive new subscriptions, increase the use of our products, services, and platform by existing customers, and support our international growth; developing our technology infrastructure, including systems architecture, scalability, availability, performance, and data security and privacy; investing in our engineering and product development teams and developing new products, services, and platform functionality; and pursuing strategic acquisition and investment opportunities.

Previous report

These expenditures may not result in increased revenue or profitable growth. Any failure to increase our revenue as we invest in our business, or to manage our costs, could prevent us from achieving or maintaining profitability or positive cash flow. We may also incur significant losses in the future for a number of reasons, including the other risks described in this Annual Report on Form 10-K, and unforeseen expenses, difficulties, complications, delays, and other unknown events. If we are unable to successfully address these risks and challenges, our business, financial condition, results of operations, and prospects could be materially adversely affected.

Previous report

Our business has been, and may continue to be, significantly impacted by changes in the economy, in spending across the construction industry, and in the size and growth of our addressable market.

Previous report

Our business has been, and may continue to be, affected by changes in the economy, especially those affecting the construction industry. The overall sentiment in the construction industry continues to be uncertain, which presents challenges to our future growth. We expect this sentiment to continue at least for the short term as a result of macroeconomic factors. If the construction industry experiences a decrease in overall construction volume, the amount our customers pay for our products could be reduced as we generally price our products based on a customer’s annual construction volume, which is the fixed aggregate dollar volume of construction work contracted to run on our platform annually. In times of unfavorable economic conditions, our revenue may decrease because customers may choose to purchase less construction software. Rising inflation may increase our vendor, employee, and facility costs, and further decrease demand for our products. Unfavorable or deteriorating market conditions, reductions in the rate of construction growth, reductions in government spending and funding of infrastructure or other construction projects, reduced demand for public projects, and any resulting effects on spending by our customers or prospective customers could also have an adverse impact on our business.

Previous report

The construction industry is also cyclical and has experienced periods of economic expansion and contraction. Periods of economic contraction for the construction industry have been, and may continue to be, caused by a wide range of factors, including tightening of economic policies, financial and credit market fluctuations, tariffs on imported goods, weakening exchange rates, elevated inflation, interest rate increases and fluctuations, supply chain disruptions, labor shortages, commodity prices, and policies that reduce government spending. We cannot accurately predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within any particular industry, or how any such event may impact our business or the business of our customers. To the extent we do not effectively address these risks and challenges, our business, financial condition, results of operations, and prospects could be materially adversely affected.

Previous report

Further, our addressable market size estimates and market growth forecasts for the construction industry are based on assumptions, estimates, and third-party data that may be inaccurate. The size of our total addressable market depends on a number of factors, including the economic factors mentioned above, digitization of the construction industry globally, customer demand among existing and new customers, construction volume, and overall IT spending, among many others. Even if our estimates and forecasts relating to the size and expected growth of our total addressable market are accurate, we may not be able to capture enough of that growth and our business may not grow in those markets at the rates we anticipate, if at all, which could materially adversely affect our business, financial condition, results of operations, and prospects.

Previous report

The construction management software industry is evolving rapidly and may not develop in ways we expect. If we fail to respond adequately to changes in the industry, our business, financial condition, results of operations, and prospects could be materially adversely affected.

Previous report

The construction management software industry is evolving rapidly. Widespread acceptance and use of construction management technology in general, and of our platform in particular, is critical to our future growth. While we believe that our construction management software addresses a significant market opportunity, demand for our products, services, and platform may develop more slowly than we expect. If that happens, our business, financial condition, results of operations, and prospects could be materially adversely affected.

Previous report

Demand for construction management software in general, and for our products, services, and platform in particular, is affected by a number of factors, some of which are beyond our control. Some of these factors include: general awareness of construction management software; availability, functionality, and pricing and packaging of products and services that compete with ours; ease of adoption and use; the reliability, performance, or perceived performance of our products and platform, including interruptions to the use of our products and platform; the development and awareness of our brand; and how we sell our products, services, and platform. Even though we use internal data to assess the likelihood of success of introducing new products, services, pricing, and packaging or changes to existing products, services, pricing, and packaging, we may incorrectly calculate such risks or assume undue risks with respect to such products, services, pricing, and packaging. Competitors may also develop and introduce new products or entirely new technologies to replace our existing products, including through the use of AI, which could make our platform and products obsolete or otherwise materially adversely affect our business, financial condition, results of operations, and prospects. If our investments in engineering and product development do not accurately anticipate user demand or if we fail to develop products, features, or capabilities in a manner that satisfies customer needs in a timely and cost-effective manner, we may fail to retain our existing customers or increase demand for our products, which could materially adversely affect our business, financial condition, results of operations, and prospects.

Previous report

Furthermore, our ability to grow our customer base and retain and increase revenue from customers depends on our ability to enhance and improve our products, services, and platform in response to changes in the construction management software industry and customer demand. In response to such shifts, we may introduce changes to our existing products and services or introduce new products and services, which may require significant expenditures in research and development and customer support, which may harm our results of operations. While we have designed our existing products for easy adoption, our customers depend on our customer success teams to provide implementation, training, and support services, especially when it comes to new products and features. If we do not provide effective ongoing support, our ability to sell additional products to existing and prospective customers could be adversely affected.

Previous report

Additionally, we may experience difficulties with software development, design, or marketing that could delay or prevent our development, introduction, or implementation of new products, features, or capabilities. We have in the past experienced delays in our internally planned release dates of new products, features, and capabilities, and there can be no assurance that new products, features, or capabilities will be released according to schedule. Any delays could result in adverse publicity, loss of revenue or market acceptance, or claims by customers brought against us, all of which could materially adversely affect our business, financial condition, results of operations, and prospects.

Previous report

Our business depends on a strong brand, and if we are not able to maintain and enhance our brand, our ability to retain and expand our customer base, attract investors, and recruit and retain qualified personnel may be impaired, and our business, financial conditions, results of operations, and prospects could be materially adversely affected.

Previous report

We believe that our brand identity and brand awareness are critical to our sales and marketing efforts. We also believe that maintaining and enhancing our brand is critical to retaining and expanding our customer base, attracting investors, and recruiting and retaining qualified personnel, and, in particular, conveying to customers and collaborators that our platform offers capabilities that address the needs of the construction ecosystem throughout the project lifecycle. We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brand may become increasingly difficult and expensive. If we experience difficulties with software development, customer service, or professional services that negatively impact new or existing products, we may experience negative publicity or lose market acceptance.

Previous report

Any unfavorable publicity or negative perception of our products, services, or platform or the providers of construction management software generally, could adversely affect our reputation and our ability to attract and retain customers. If we fail to promote and maintain our brand, or if we incur increased expenses in this effort, our business, financial condition, results of operations, and prospects could be materially adversely affected.

Previous report

Our ability to increase our customer base, expand existing customers’ use of our platform, and achieve broader market acceptance of our products, services, and platform will significantly depend on our ability to develop and expand our sales and marketing capabilities. Any failure to do so could materially adversely affect our business, financial condition, results of operations, and prospects.

Previous report

Continuing and increasing sales of our products and services depends to a significant extent on our ability to expand our sales and marketing capabilities. It is difficult to predict customer demand, customer retention, and expansion rates, the size and growth rate of the market, the entry of competitive products and services, or the success of existing competitive products and services. Our sales and marketing efforts involve educating prospective customers about the uses and benefits of our products, services, and platform. We spend substantial time and resources on our sales and marketing efforts without any assurance that our efforts will result in a sale. We expect that we will continue to need intensive sales and marketing efforts to educate prospective customers about the uses and benefits of our construction management software and services, and we may have difficulty convincing prospective customers of the value of adopting our products and services. We plan to continue expanding our sales force, both domestically and internationally. Identifying, recruiting, and training qualified sales representatives is time-consuming and resource-intensive, and they may not be fully trained and productive for a significant amount of time following their hiring, if ever. In addition, the cost to acquire customers is high due to these considerable sales and marketing efforts. Our business will be harmed if our efforts do not generate a corresponding increase in revenue. Even if we are successful in convincing prospective customers of the value of our products and services, they may decide not to purchase our products and services for a variety of reasons, some of which are out of our control. The failure of our efforts to secure sales after investing resources in a lengthy sales process could materially adversely affect our business, financial condition, results of operations, and prospects.

Previous report

In July 2024, we began to evolve our GTM operating model, by, among other things, transitioning to a general manager model, in order to deepen customer relationships and improve our operating efficiency by building nimble, customer-focused teams under empowered general managers. If we fail to realize the full benefits of our evolved GTM operating model over the long term or otherwise fail to acquire new customers, retain existing customers, or expand existing customers’ use of our products, services, and platform, our business, financial condition, results of operations, and prospects could be materially adversely affected.

Previous report

Our failure to successfully incorporate AI into our products, services, and platform, as well as our business operations, or our failure to comply with laws, regulations, contractual obligations, or other requirements that now or in the future could apply to our use of AI, could materially adversely affect our business, financial condition, results of operations, and prospects.

Previous report

We are increasingly building or incorporating AI tools (including generative and agentic AI tools) into our products, services, and platform. We also deploy AI tools in our business operations. We have used, and may continue to use, third parties to provide and support these tools. Our use of AI may present significant risks, uncertainties, and challenges that could materially adversely affect our business, financial condition, results of operations, and prospects.

Previous report

Developing, testing, selling, deploying, and adopting resource-intensive AI capabilities has increased and will likely continue to increase our operating costs. We have invested, and expect to continue to invest, significant resources to develop AI tools. We may also face greater competition from general purpose AI solutions that rely on generic large language models, generative AI, and general purpose AI agents to address a broad range of business needs. If the integration of AI tools into our products, services, and platform fails to operate as anticipated, or as well as competing offerings, or otherwise does not meet customer needs, or if we are unable to bring AI-related offerings to market as effectively or as quickly as our competitors, we may fail to recoup our investments in AI, our competitive position may be harmed, and our business and reputation may be adversely impacted.

Previous report

AI models may create flawed, inaccurate, or incomplete outputs, some of which may appear to be correct. This may happen if the inputs that an AI model relied on were flawed, inaccurate, incomplete (including if a bad actor “poisons” an AI model with bad inputs or logic), or if the logic of the AI model is flawed (a so-called hallucination). We, our customers or partners, or other third parties may use or rely on such outputs to our or their detriment, or such outputs may lead to adverse outcomes, including delays and errors, any of which may negatively impact our ability to attract and retain customers and to expand the use of our products, services, and platform, and expose us to brand or reputational harm, competitive risk, and legal liability. Social or ethical concerns about the use of AI, such as the risk of AI models creating discriminatory outcomes using biased information, may also hinder the use and adoption of AI by our customers, partners, and employees. As we expand the use of AI in our own business operations, there is a risk that we will experience such outcomes, which would harm our business and reputation.

Previous report

If we use any third-party AI technologies that misuse or fail to protect the data that we or our employees, customers, partners, or vendors input, then that data (including confidential, competitive, proprietary, customer, or personal data) could be leaked, disclosed, or revealed to others. Additionally, where an AI model ingests sensitive data without appropriate safeguards, and makes connections using such data, the AI model may produce outputs that reveal other sensitive data generated by the AI model that was not intended to be revealed. Any such leak, disclosure, or revelation of data could harm our business, expose us to reputational harm and competitive risk, or result in legal or regulatory action against us. We could also experience an increased risk of litigation if any AI tools that we provide or use are alleged to produce outputs that infringe or violate third-party intellectual property rights.

Previous report

The legal and regulatory landscape surrounding AI is rapidly evolving and uncertain. Several jurisdictions around the world, as well as several states and localities, have proposed, enacted, or are considering laws governing AI, including the European Union’s (“EU”) AI Act and the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (collectively, the “CCPA”) regulations on automated decision-making technology, and we expect that lawmakers and regulators will continue to maintain a heightened focus on AI and promulgate new legislation and regulations, which could impact our business and our actual or planned use of AI. Laws and regulations governing AI may apply in new, unpredictable ways, and differences in how jurisdictions choose to address issues related to AI may require us to navigate a complex web of different obligations. For example, the EU’s AI Act sets out a risk-based framework, subjecting certain AI technologies to numerous compliance obligations, including transparency, conformity, risk assessment, monitoring, and human oversight requirements. Under the EU’s AI Act, non-compliant companies may be subject to administrative fines of up to 35 million euros or 7% of such company’s total worldwide annual revenue for the preceding financial year, whichever is greater. We are subject to the EU’s AI Act. Depending on how the EU’s AI Act is implemented and interpreted, we may have to adapt our business practices, contractual arrangements, and current or planned products or services to comply with obligations imposed by the EU’s AI Act. Our use of AI technologies could also lead to regulatory investigations and consumer lawsuits. Certain privacy laws extend rights to consumers (such as the right to delete certain personal data) and regulate automated decision-making, which may complicate our use of AI, lead to regulatory fines or penalties, be incompatible with our use of AI, require us to change our business practices, retrain our AI, or prevent our use of AI. For example, the Federal Trade Commission has required other companies to turn over or disgorge valuable insights or trainings generated through the use of AI where they allege the company has violated privacy and consumer protection laws. Complying with applicable laws, rules, and regulations governing AI could increase our operating costs, require significant resources or technical modifications to our systems, change the way that we operate in certain jurisdictions, and impede our ability to offer AI in certain products or use AI in our business operations. Any of the above risks could materially adversely affect our business, financial condition, results of operations, and prospects.

Previous report

Because we recognize revenue from subscriptions to access our products over the term of the subscription, downturns or upturns in new business will not be immediately reflected in our results of operations.

Previous report

We generate substantially all of our revenue from subscriptions to access our products. We recognize revenue ratably over the term of the subscription, beginning on the date that access to our products is made available to the customer. Our subscriptions generally have annual or multi-year terms. As a result, the significant majority of our revenue is generated from subscriptions entered into during prior periods. Consequently, a decline in new or renewed subscriptions in any one quarter may not significantly reduce our revenue for that quarter, but could negatively affect our revenue in future periods. Accordingly, the effect of downturns or upturns in new sales and potential changes in our rate of renewals may not be fully reflected in our results of operations until future periods. Our revenue recognition model also makes it difficult for us to rapidly increase our revenue through new subscriptions in any period.

Previous report

Our ability to recognize revenue may also be affected by the length and unpredictability of the sales cycle for our products, especially with respect to larger enterprises, owners, and governmental entities. Such customers typically undertake a significant evaluation and negotiation process due to their leverage, size, organizational structure, and regulatory and approval requirements, all of which can lengthen our sales cycle. Further, certain macroeconomic conditions or uncertainty related to the macroeconomic environment may cause such customers to take corresponding actions to manage costs, which can increase the length of sales cycles, reduce budgets, cause slowdowns in customer consumption, or cause customers to reduce their spend with us at renewal by running less construction volume on our platform, reducing the number of products purchased, or cancelling their subscriptions entirely. We may spend substantial time, effort, and money on sales efforts for such customers without any assurance that our efforts will produce any sales or that these customers will deploy our platform widely enough across their business to justify our substantial upfront investment. As a result, we anticipate increased sales to large enterprises, owners, and governmental entities will lead to higher upfront sales costs and greater unpredictability, which could materially adversely affect our business, results of operations, financial condition, and prospects.

Previous report

In addition, as required by the revenue recognition standard under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, we disclose the transaction price allocated to remaining performance obligations (“RPO”). It is possible that analysts and investors could misinterpret our disclosure or that the terms of our customer subscriptions or other circumstances could cause our methods for calculating this disclosure to differ significantly from others, which could lead to inaccurate or unfavorable forecasts by analysts and investors that could negatively impact our business and prospects.

Previous report

We are continuing to expand our operations outside the U.S., where we may be subject to increased business, regulatory, and economic risks (including fluctuations in currency exchange rates) that could materially adversely affect our business, financial condition, results of operations, and prospects.

Previous report

We had customers running projects in approximately 160 countries as of December 31, 2025, and 15% of our revenue in 2025 was generated from customers outside the U.S. We expect to continue to expand our international presence, which may include opening offices in new jurisdictions and providing our products, services, and platform in additional languages. Any new markets or countries into which we attempt to sell our products or services may not be receptive to our efforts. For example, we may not be able to further expand our operations in some countries if we are not able to adapt our products, services, and platform to fit the needs of prospective customers in those countries or if we are unable to satisfy certain government- and industry-specific laws or regulations. In addition, our international operations and expansion efforts require considerable management attention and the investment of significant resources, while subjecting us to new risks and increasing certain risks that we already face, including risks associated with:

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•providing our products, services, and platform in different languages and customizing them to support local requirements;

Previous report

•compliance by us and our partners with applicable international laws and regulations, including laws and regulations with respect to anti-corruption, competition, import and export controls, tariffs, trade barriers, economic sanctions, employment, construction, privacy, data protection and sovereignty, consumer protection, and unsolicited communications, and the risk of penalties and fines against us and individual members of management or employees if our practices are deemed to be out of compliance;

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•recruiting and retaining talented and capable employees outside the U.S., including employees who speak multiple languages and come from a wide variety of different cultural backgrounds and customs, and managing an employee base in jurisdictions with differing employment regulations;

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•operating in jurisdictions that do not protect intellectual property rights to the same extent as the U.S. and navigating the practical enforcement of such intellectual property rights outside of the U.S.;