Procore Technologies (PCOR) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01We 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
2. 02We have a history of losses and may not be able to achieve or sustain profitability in the future
3. 03Our 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
4. 04The 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
5. 05Our 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 may be harmed
6. 06Because 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
7. 07We 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
8. 08We operate in a competitive market, and we must continue to compete effectively
9. 09We have experienced, and may in the future experience, service interruptions and other performance issues. Our future growth depends in part on the ability of our existing and prospective customers to rely on access to our products, services, and platform
10. 10adverse outcomes, which may negatively impact our ability to attract and retain customers and expose us to brand or reputational harm, competitive harm, and/or legal liability
11. 11We rely on third-party data centers, such as Amazon Web Services (“AWS”), to host and operate our platform, and any disruption of or interference with these resources may negatively affect our ability to maintain the performance and reliability of our platform, which could cause our business to suffer
12. 12The adverse effects of any service interruptions on our reputation, results of operations, and financial condition may be disproportionately heightened due to the nature of our business and the fact that our customers have a low tolerance for interruptions of any duration

Risks Related to Our Employees and Culture

1. 13If we lose key management personnel or if we are unable to retain or hire additional qualified personnel, we may not be able to achieve our strategic objectives and our business, financial condition, results of operations, and prospects could be materially adversely affected
2. 14or members of our management team resign or otherwise cease to provide us with their services, our business, financial condition, results of operations, and prospects could be materially adversely affected
3. 15If we cannot maintain our company culture as we grow, we could lose the innovation, teamwork, passion, and focus on execution that we believe contribute to our success

Risks Related to Our Regulatory and Legal Environment

1. 16In the U.S., federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws)
2. 17In the ordinary course of our business, we, and the third parties with which we work, process substantial amounts of sensitive information
3. 18connections using such data, those technologies may reveal other personal or sensitive information generated by the model
4. 19in developing and deploying remedial measures and patches designed to address any identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident
5. 20sensitive information of our company or our customers could be leaked, disclosed, or revealed as a result of, or in connection with, our employees’, personnel’s, or vendors’ use of generative AI technologies
6. 21Our business is subject to a wide range of laws and regulations, many of which are evolving, and our failure to comply with such laws and regulations could materially adversely affect our business, financial condition, results of operations, and prospects
7. 22We may become involved in litigation and other disputes that could materially adversely affect our business, financial condition, results of operations, and prospects
8. 23Increased government scrutiny of the technology industry generally or our operations specifically could negatively affect our business
9. 24regulations could increase the cost of conducting business, limit opportunities to increase our revenues, or prevent us from offering products or services
10. 25We are subject to governmental export and import controls that could impair our ability to compete in international markets and subject us to liability if we are not in compliance with applicable laws
11. 26Certain of our services subject us to complex and evolving laws and regulations regarding the unauthorized practice of law (“UPL”)
12. 27Our Procore Pay payment solution is subject to a number of laws and regulations applicable to payment solutions, and our failure to comply with such laws and regulations could interfere with the success of Procore Pay

Risks Related to Our Intellectual Property

1. 28Our failure to protect our intellectual property rights and proprietary information could diminish our brand and other intangible assets and otherwise materially adversely affect our business, financial condition, results of operations, and prospects
2. 29We license technology from third parties and our inability to maintain those licenses could materially adversely affect our business, financial condition, results of operations, and prospects
3. 30Our use of third-party open source software could negatively affect our ability to sell subscriptions to access our products and subject us to possible litigation

Risks Related to Our Acquisitions

1. 31We may be unsuccessful in making, integrating, and maintaining acquisitions, joint ventures, and strategic investments, which could materially adversely affect our business, financial condition, results of operations, and prospects

Risks Related to Tax Matters

1. 32We could be required to collect additional sales and use, value added, goods and services, business, gross receipts, and other indirect tax liabilities in various jurisdictions, which could materially adversely affect our business, financial condition, results of operations, and prospects
2. 33Our corporate structure and intercompany arrangements cause us to be subject to the tax laws of various jurisdictions, and we could be obligated to pay additional taxes, which could materially adversely affect our business, financial condition, results of operations, and prospects
3. 34Our business could be materially adversely affected by changes to tax laws
4. 35Our ability to use our net operating loss carryforwards (“NOL carryforwards”) and certain other tax attributes may be limited

Risks Related to Capital Requirements, Our Marketable Securities Portfolio, and Liquidity

1. 36We may need to raise additional capital to grow our business, and such capital may not be available on terms acceptable to us, or at all, which could reduce our ability to compete and could materially adversely affect our business, financial condition, results of operations, and prospects
2. 37Our marketable securities portfolio is subject to credit, liquidity, market, and interest rate risks that could cause its value to decline significantly and materially adversely affect our business, financial condition, results of operations, and prospects
3. 38General Risks Related to Our Business and Investing in Our Common Stock
4. 39Our business could be disrupted by macroeconomic factors, geopolitical events, or catastrophic occurrences
5. 40Substantial losses due to fraud or our inability to accept credit card payments could cause our customer base to significantly decrease and would harm our business
6. 41The market price of our common stock may be volatile, and you could lose all or part of your investment
7. 42Concentration of ownership of our common stock among our officers, directors, and principal stockholders may prevent new and other existing investors from influencing significant corporate decisions, including mergers, consolidations, or the sale of us or all or substantially all of our assets
8. 43Certain provisions in our organizational documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove members of our Board or current management, and adversely affect our stock price
9. 44These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time