Procore Technologies, Inc. (PCOR) Earnings Call Transcript & Summary

Please welcome to the stage, Procore Founder and CEO, Tooey Courtemanche.

Well, welcome, everybody. Great to see so many folks in the audience today. This is amazing. Welcome to Groundbreak 2023. Are you guys all excited? This is so cool. So many familiar friendly faces in the crowd, and I love just to see the opportunity to get to be able to reconnect with all of you. It's such a privilege. I'd love to see the show of hands, how many people are at their very first Groundbreak ever? Wow. Well, wow. All right. Well, welcome, everybody. This is amazing. I am told that this is the biggest Groundbreak ever. We have focused over 20 countries in attendance today, making this truly a global Groundbreak, which is amazing. So not only is this the biggest Groundbreak ever, but I am here to tell you, this is going to be the best Groundbreak ever. We have an amazing lineup of speakers. We have our expo hall, which is right across the way where you're going to be able to meet with over 100 of our partners to see what they have working and see how they can help benefit your business. We also have, backed by popular demand, our Innovation Labs, which is really cool, gives you all the opportunity to work with our product teams to help develop the future vision for where we're going. And my personal favorites, we got the Groundbreaker Awards, where we get to celebrate all the amazing work that you all do every single day. We are incredibly excited to be hosting this year's Groundbreak here in Chicago. This is -- there is such a rich history of architecture and design in the city. It's actually one of my favorites. And here's a fun fact. Chicago is home to 2 of the tallest buildings in the world designed by a woman. Jeanne Gang, yes, Jeanne Gang, set the record when she designed Aqua Tower in 2009, and only to beat her own record in 2020 when she designed the St. Regis. Really cool. By the way, how many people here got the opportunity to take the architectural boat tour? Isn't it amazing? Honestly, I recommend everybody do it. I've done it like 3x. It's just -- it's truly remarkable. It really demonstrates how the architecture and construction has evolved over the last century in this town. And when you think about how much has changed in one city over a century, it's really kind of fun and exciting to think about what's to come in the future. From the promise of artificial intelligence, to the advancements in material procurement and development, to the optimization of supply chain, to componentizing construction. I think there's one thing that we could all agree upon, is that the rate of change is only accelerating. And all of this opens up an incredible opportunity to improve the way that we all work, not just with the technology that we use, but how we all work together. And trust me, this is mission-critical because there is so much work that needs to get done. By 2030, 30 billion people are going to be needing new housing and infrastructure which means that over 300 million new housing units are going to need to be built. It's remarkable. And between 2013 and 2030, we're going to need to spend $57 trillion, that's trillion with a T, on global infrastructure just to keep up with global GDP growth. And as you all know, there are not enough people joining this industry to keep up with this amazing demand. So this is where you all come in. You all are the groundbreakers who are going to take on this challenge and transform our industry. That's why this year's theme for Groundbreak is transformation. And we're not just talking about digital transformation. In order for you all to attract and retain top talent, to improve safety outcomes on our job sites and to meet this ever-increasing demand, we must focus both on digital as well as cultural transformation. And trust me, we all have a part to play. From empowering your employees by providing them with the best technology so they can deliver their life's best work, to improving diversity and inclusion in the workplace, to prioritizing mental health just as much as physical health. And this helps demonstrate that construction is a career that folks can aspire to and that you all are the employers of choice. But you already know this. I know many of you are very much hard at work, working on helping to transform this industry. But Procore is also a bit hard at work. And we've been doing that by building the best connected platform on the planet, I know I'm biased, but I think it's the best. By focusing on the construction industry and only the construction industry, as well as having the honor of partnering with all of you hand-in-hand in this journey. So I want to start by celebrating some of the work that you were all doing to help transform the culture by bringing more people into this industry. So let's roll this video. [Presentation]

I'd tell you, that video really, really, really is inspiring. Obviously, it's so important for us to get more people to join this industry, and those efforts are very, very important for us. And it gives me a lot of hope and optimism for the future. All right. So I want to celebrate another one of our customers that's driving cultural transformation by positively impacting communities all across the globe. So Ferrovial is a global general contractor based out of Madrid, Spain. They collaborate with a number of organizations all around the globe to help improve access to clean drinking water, to help combat food and security and to help alleviate poverty. And they're not only providing their financial support, which would be the easy thing to do. They're actually sending their folks to these projects to manage the projects so they can bring their own personal technical expertise. And the ROI on their investment is remarkable. They're getting about a 10x return. For every euro they put into the system, they're getting out about EUR 10.8, which is remarkable, and the impact is even more remarkable. Since 2005, they've impacted over 600,000 people's lives all around the globe, and they're on track this year alone to impact another 52,000. So not only that, they're actually building a company culture where employees feel engaged and are given the opportunity to give back. All right. So now I want to share a deeply personal and moving story that made it my way earlier this year that really helps demonstrate how the smallest acts can have the greatest impacts. So we all know who JE Dunn is, right? JE Dunn is an amazing company. They were building a large building right next to a children's hospital. And in that children's hospital was a young patient by the name of Fitz and Fitz is 4 years old, and he was fascinated by the construction site right outside of this hospital window. So his parents took note of this and they mentioned it to a friend of theirs who happened to be a customer success rep at Procore. That customer success rep took it upon herself to reach out directly to JE Dunn, and JE Dunn then leaped into action, and they went above and beyond. They created a very special day at the job site just for Fitz. They hung a huge sign, which you just saw from the crane. So he could see it outside of his hospital room window. And that's where one of the real heroes of the story steps in. Steve, who is the crane operator, was involved with all of this. He gave Fitz a walkie-talkie so Fitz could control the crane by talking to him over the walkie-talkie directly from his hospital bed, and Fitz loved it. So Fitz and his family have stayed in touch with the JE Dunn team and have visited the job site often. And I am very honored that they've actually come all the way here to join us today. And I'm going to ask Fitz and his brothers to come on up so we can all recognize them. Do you mind coming up, boys? Give me five. All right. Give me five. Give me five. Welcome, Fitz. All right, everybody. This is Fitz and his brothers and his mom. But yes, thank you so much for coming. And your bravery, Fitz, this is something that we all admire. So thank you very, very much. And by the way, a big shout out to JE Dunn, right? All right, everyone. Thanks, guys. Appreciate it. Well, I mean, clearly, that demonstrates the level of quality of the people in our industry, something that I'm really proud of. Plus it also shows that the impact of the work that you all are doing is so much greater than the buildings that you build. So this is the industry that I want to expose to the world, an industry filled with incredible people doing impactful work, building careers that they can personally be proud of. So you all have been clearly doing some incredible work to transform the culture of this industry. But let me assure you that Procore is equally committed to this journey. Since day 1, our vision has been to improve the lives of everyone in construction, and we offer programs to help you all attract and retain top talent, such as our Culture Academy, Project Engage and our new Culture Consulting Programs. We also help build and invest in diverse and inclusive workplaces as well as inspiring the next generation of builders through programs like our Procore University program. I don't know if you all know this, but Procore is taught in over 98% of the construction management university programs in the U.S., and now we're taking that program abroad. And what this means for you is that the folks that are graduating from these programs are graduating tech-ready. So when they come to you on day 1 to work, they're productive. We're also incredibly proud of our partnership with Apple. We are joining them to help provide construction education to elementary school kids, so we can inspire the next generation of builders. We're also in partnership with AGC, building scholarship programs for construction management students and historically black colleges and universities. And I am incredibly proud that we continue our efforts to helping bring more women into construction. Look, all of that is very important stuff I'm very proud of. We cannot truly transform the culture of this industry without addressing the mental health crisis that we have in construction today. In June, we announced Get Construction Talking, a partnership with the B1M to help build awareness as well as raise funds for mental health in construction. So let's watch this short video. [Presentation]

I want to -- by the way, such an important cause. I want to just take one moment and thank Fred Mills, who so bravely last year, stood up in front of all of us and talked about his journey with mental health. That got us all really thinking at Procore about how we can lean in and help. And I was personally shocked to find out that if you're a male, working in construction in the U.S., you have 4x -- you're 4x more likely to die by suicide than the general population, 4x. It's remarkable. And this is not just a U.S. problem. In the U.K., every single working day, we lose 2 people to suicide. And here's one thing I know. If there was a physical safety issue that was leading to this much loss of life in our industry, there would be nothing else that we were talking about every single day. So it's clear that we need to build a safety culture that prioritizes mental health just as much as physical health. So if you want to learn more, you can go to getconstructiontalking.org or visit the booth in the Expo Hall and see the team. I am proud to share that Procore has just committed $50,000 to this effort, and I would encourage you all to join us by providing the donation either through their website or by texting the numbers that you see up here on the screens. So these stories demonstrate the important cultural transformation that are happening all across our industry. But remember, to truly transform our industry and your businesses, we need to also transform digitally. So I'm going to celebrate some customers who are harnessing the power of technology to transform the way that we build. Gardner Vaughan Group is a leading property developer and building company based in Australia. They were building the Monterey apartments in Kangaroo Point in Brisbane. Now this was the first timber structure in Kangaroo point and as a fun fact, it's the tallest residential timber tower in the entire Southern Hemisphere. I don't know about you all, but I am fascinated by mass timber. It is absolutely -- it's sustainable on one side, and it's absolutely so beautiful on the other. Now the local governments had no idea how to work with mass timber. So every detail on the job was bespoke, from how they connect the scaffolding to the building to how they engineered the fire penetrations, all the way down to how they connect to the smallest fasteners to the building. And this complexity required a tremendous amount of collaboration across many different stakeholders which is why they use Procore all the way from the bidding phase all the way through closeout. And the team shared that our RFI and document management tools were crucial to the project's success and that, frankly, the task that they had to achieve would be unmanageable without Procore. Now the project finished on time and is profitable and has a negative carbon footprint equivalent to taking 700 automobiles off the road for 1 year or powering the energy required to power 1 house for 300 years. It's absolutely remarkable. So now I'd like to celebrate another customer that's using technology to transform the way that they run their business. Paragon Construction & Associates is a general contractor based in Texas. They use the Procore construction network to find specialty contractors in new areas where they were seeking new work as well as in their home area where they had great connections, but they were looking for new specialty contractors. And a reminder to you all, the Procore Construction network is not just a public directory. It's an integrated product into the Procore platform. So you can seamlessly connect with millions of businesses that are collaborating on our platform today. The PCN, as we call it, the Procore Construction Network, is the only free network that connects every single business backed by quantitative data, and it's integrated into the entire construction life cycle process. From getting discovered to winning new work, to collaborating on a project all the way out to getting paid, all on a single platform. It is a game changer. Now remember, it's also a win-win. Paragon was able to find a bunch of specialty contractors that would not normally have access to. And the specialty contractors were found were able to now work with a builder that they would not normally have the ability to work with. So it's a win-win for all. I would encourage you all to go -- there's a breakout session that's being hosted by Paragon, along with Peridot Mechanical, one of the specialty contractors that were awarded work by Paragon through the Procore Construction Network. They're going to be talking about the benefits of finding each other on our platform. So these are just a few examples of how you all are using technology to transform the world around this. But let me assure you that Procore has also been hard at work, delivering the technology that you all need to build for the future. For the past 20 years, we've been on a mission to connect everyone in construction on a global platform, and our work is just getting started. We are doubling down on our efforts to better connect all of you. And what I really fired up about is that every single person that comes into Procore now, the folks that you invite on your projects, now gets their own 3 accounts where they can collaborate and sync data into their own account without ever having to leave their own account. That's pretty exciting, isn't it? I'll tell you the Wyatt and team have been hard at work on this journey, and they're going to be talking to you more about this shortly. But you all know that the real benefit of better connecting all of you is that the data that you're generating becomes even more powerful, allowing you to leverage insights as well as artificial intelligence to not only solve problems quickly, but to anticipate them long before they happen. And this isn't some far off vision. Many of you were benefiting from using AI on our platform today. So if you're using the automated area takeoff tools or you're gaining insights on RFIs or on general conditions, or if you're one of our global customers using our Procore Document Management Solution to manage your documents, then you're already benefiting from the power of AI on our platform today. And it only gets better from here. This is exciting. I am excited to announce Procore Copilot. Procore Copilot is going to arm you with the latest AI-powered conversational and predictive experiences across the entire Procore platform. I'm also proud to announce that 2 of your most trusted technology partners, Procore and Microsoft, are working together to safely and securely extend the power of Procore Copilot enabled by Azure AI into the Microsoft products that you all use every single day. It's game changing. And this is a true co-pilot. I'm hoping that the days of sifting through a massive amount of data trying to find actionable insights are going to be in the past. This copilot going to work alongside you and in the background to flag the most important information so that you and your teams become much more productive. And in the future, we have visions of helping you to do things like improve safety by looking at your daily reports and looking for trends and flagging them, to surfacing information in your contracts that are very deep in those contracts at the time you need it, to optimizing how your schedules are performed, giving you a bunch of different options to choose from, so you can optimize the way you deliver your projects. Okay. So Procore Copilot is going to be available soon and you're going to hear a lot more about it from the product team shortly. But before I pass off to Wyatt and the team, I want to reiterate why I love Groundbreak so much. Groundbreak gives us the opportunity to all come together to talk about construction's most pressing issues. And it really does help bring to life the digital and cultural transformation when we're all in the same room, and it's really, really impressive. And frankly, I just want to say that we are honored to be able to work alongside all of you in this journey. It's been an amazing journey so far. I'd also like to just take one moment and give a shout out to somebody who is very special. Her name is Jessica Rice. Jessica Rice is really was impactful by helping us start Groundbreak many years ago and has helped us grow it into this global event that has become. Jessica is moving on from Procore, but I thought it would be -- I would be remiss not to give her a moment of recognition for everything that she has done to make this such a special event. So if you don't mind, just join me in a quick round of applause. All right. Well, now the exciting part. We have a couple of great days ahead of us. I want to thank you all for joining us here in Chicago at Groundbreak. And now I would like to invite Wyatt Jenkins, Procore's Chief Product Officer, out on stage to talk about the cool stuff. So thank you all very much.

Hello. Chicago. Welcome, everybody, and everybody joining us virtually around the globe. How awesome is it to be here at Groundbreak. I love it. So Tooey and I were chatting back stage the other day, and he goes why your job is so cool. You get to just stand up there and talk about all the amazing things that our engineers and our product managers and our designers are building to help you all succeed. And he's right. It is -- I feel really lucky. I just have good news. There's just new things coming to help you do your jobs better. So think about this. Over 1 million projects, including some incredible landmarks have been created on the Procore platform. Let's that sync in for a minute. Because this is what gets us out of bed every morning, the opportunity to help you all build the world. Our goal is to be your trusted partner, to support your evolving needs so that you can all focus on building the world around us as the industry transforms. Now to be your trusted partner, we have to be good listeners. And we hear you loud and clear. Our product teams are laser-focused on ensuring that Procore's core products, project management, quality and safety, financials, really work on any type of construction and any size of construction, including the biggest construction projects on earth. Projects that have been powered on Procore such as LaGuardia Airport Terminal B, St. Paul's Hospital in Vancouver, Allegiant Stadium in Vegas, the $5.6 billion Ford battery and vehicle manufacturing center in Blue Oval City or a 40-story residential tower in Bangkok Central Business District. We are investing to bring you the enterprise-grade product you need and a platform that scales to the biggest construction project in the industry. That commitment is where I wanted to start and end today. So one of the coolest parts about my job is I get to visit a lot of job sites. I love it. And I get an intimate understanding of how you work, what your needs are today and how those needs are changing in the future. And I got to thank you. Thanks for the partnership. Every time my teams are on the job site, you treat us so well. Mostly, there was this time when myself and the interns were asked to go find the plywood stretcher, there's no plywood stretcher. But look, when I'm on the job site, one observation I have is I look around and I look at construction tech in general, and I think to myself, most of the tech we all use is it's like packaged software. There's a problem and then there's a technology solution that solves said problem for one company. But then when I'm walking around the job site, I looked around and like, well, that's not how it works in the real world. The construction is more like a network. There's different companies collaborating to get the job done. That's how things get built. But don't just take my word for it. So we have this long-time customer, Excel Construction. They've been a customer since 2009. Give them a hand. I just tried to imagine what Tooey sold you all in 2009. But there was a longtime customer, Excel Construction, who was on campus, and we were talking about strategy and roadmap and there was a section in the meeting where they were telling us what Procore is to them in their words. It was Marcus, the President who said it. And Marcus said to me, "Hey, Wyatt. Procore's job to be done is to help us collaborate with our network of partners, including design partners, consultants, construction managers, owners and trade partners." And I just thought this was a really powerful message coming from a longtime customer. And this is really at the heart of what we do. Our mission at Procore is to connect everyone in construction on a global platform. And one of the big aspects of our product road map has been and will continue to be to design Procore to be more like a network, where each account can share information with one another based on the permissions and the security set up for the core project that you're working on. And that's why we've spent the last few years re-architecting Procore to be more like a network. So you don't have to do double data entry and everyone can collaborate on a project while staying in their own account. This is at the heart of what we're calling connectability, and it's one of the biggest announcements we're going to make today. We are excited to announce Procore Connectability. Connectability is platform-level functionality that allows any 2 or more companies to share data with one another based on the permissions and security that are set up on the project. We're starting on drawings, which are in beta now, so you can go check that out in the Innovation Labs. And then we're going to move into RFIs and submittals because this platform level functionality, it will be available on every single part of our entire platform over time. Okay. I want to shift gears a little bit. This one is fun. Moving forward, we want to make sure -- you heard me say a second ago, we want to make sure that Procore works on any type of construction, really great amazing experiences. And what I mean by type, either vertical construction or horizontal construction because construction happens in time and in space on a map. Late-breaking news, like days ago, I am excited to announce that Procore has just acquired an amazing mapping platform, Unearth, to help you better understand the spatial context of your projects. So what does this mean to you? We're putting Procore on a map. Unearth brings you world-class geospatial information mapping, or GIS, technology to the entire platform. We're putting all your project data on a map. And you don't have to be GIS experts to use it. Just think about that for a second, whether you're building a highway or a high-rise. With Procore, you're going to be able to visualize and organize your drawings, your observations, your inspections, photos and more using GIS coordinates. And for those of you that do horizontal construction, imagine working on a 14-mile highway project, you've got thousands of photos, and issue arises, and you got to find that needle in a haystack to get the crews back on site. Procore will allow you to locate that in seconds visually. And you can do that across every project type and over the course of the entire project. How cool is that? Our plan is to integrate Unearth technology across the Procore platform, starting with project execution. Out in the Expo hall, you can go meet the Unearth co-founders, Brian and Amy and learn more about it. I've gotten the chance to know these 2 quite a bit over the last few months, and I'm really, really excited. Brian, Amy and everybody at Unearth, welcome to the team. We're excited to go on this journey with you. Okay. I want to talk to you a little bit about our product vision, where we want to be in 3 to 5 years and just articulate a few core tenets. We want to make sure that the Procore platform inclusive of all of our wonderful partners handles end-to-end construction phases from precon all the way to closeout. We want to make sure we handle any type of construction, horizontal and vertical, any size of construction, big or small. We want to make sure our platform connects stakeholders like a network. And all of this on top of our data platform that powers artificial intelligence and analytics. It's an ambitious vision, but I think we got this. To bring this to life, we're going to walk you through a fictional project and show you a vision of how powerful it is when the data is connected through the full construction life cycle. All right. Let's start the project. Here we've got Sarah. Sarah is an owner at [ RivCloud ] Healthcare. Let's imagine Sarah Commissions a $2 billion hospital project called Burnham Medical Center on the west side here in Chicago. The project is estimated to take 4 years. It's going to be about 50 trades involved. It's going to coordinate a workforce of 3,000 people or so. It's an average of 167 contracts and 25,000 construction documents. Let's start at the preconstruction phase of this project and see how Procore can help the general contractor win that project from Sarah. Now I want to start this project the way I think we should start every project, all of us, with great data and great historical data from other projects that look like this one. One of our product goals we talk a lot about is taken all those original estimates and preconstruction data flowing it through operations, through financials and pay. Packaging out into historicals so that when you start your next project, you can look at those and learn from the mistakes of the past. And I want to show you how Procore helps with that. All right. Let's bring a new stakeholder into the party. This is Will. Will is the Director of preconstruction and a general contractor, Vertigo construction. This GC specializes in mega health care builds. Cool. Here's what we're looking at. We're looking at an estimate that's driven by historicals. And what we've got here is a few different data sets. We've got the data that they want to use for the new Burnham Park Medical Center. And then we have projects from within their own backlog from things that they've already built that look like that, so they can compare and contrast. And then the third column over there, you've got historical benchmarks powered by predictive analytics from the world's largest construction data set, Procore, some of this on Procore's APIs today in the conceptual estimating space. But we should all be doing this so we can learn from the lessons in these past projects of gold in there. So imagine that Will gets ballpark figures in just seconds with unique data that we can really only get out of Procore, I'll show you a couple of things. Here, Will is looking at historic cost for steel and concrete. Benchmark data like labor productivity rates that you would get from our workforce management tool. Will can even dig deeper into common change orders and RFI overages for hospital projects. That less we'll see like what changed and why did it change? And how can I avoid making those mistakes again. Now let's look at how Will submits the proposal. Because Sarah, the owner, this is not her first mega build project, and she knows this is critical to select a general contractor who has experience in the field and is held in high regard. When Sarah looks at all these bids and how the GC stack up, Will's historical data-driven proposal, combined with the company's expertise and hospitals really set them apart. Well with the bid. Congratulations, Will, you won the project. Now to take us through how Will can use the Procore platform for the pre-con phase of this complicated mega project I want to get Mr. [ Cool ] up here to join us on stage. Dave?

Thanks, [indiscernible]. It's so exciting to be back here at ground break with all of you. As we talked about last year, preconstruction has changed. It's gone from a linear process to a much more iterative process. And on a project like this, the design is going to be multiple pricing exercises, and there will be thousands of design documents for you to review. So your team's ability to both collaborate and quickly and accurately reconcile designs with toss can make or break the project. And that's why we've been investing so heavily in connecting our preconstruction solution. And I'm excited to be able to show you what we've been up to the last year. As often happens on these mega projects, Sarah, the owner realizes there were some stakeholder needs that weren't addressed in the original request for proposal. So she wants to take care of those needs. And of course, once Will to maintain the budget. But as why I mentioned, because Will can leverage historical information, it makes it easy for him to show Sarah that the feeling package on this project is much more expensive, largely due to the amount of hardwood ceilings desired throughout the building. So it makes the recommendation to change to acoustic ceilings in certain areas, tastefully, to create some savings and take care of the other stakeholder needs. And having that type of transparency and visibility makes the decision very easy for Sarah. So now that, that design is approved, Andrew, the architect can go and modify the ceilings. And with our documents plug into Autodesk can upload a new model revision directly to documents, making it instantly available to the entire project team and eliminating the silos caused by desktop applications. Anyone can access that model with the ability to collaborate and create coordination issues, whether they're on our web or mobile viewers. So with an unlimited user model, that means everyone can get involved in the design review process, solving constructibility issues early when they're safer and cheaper and setting the project up for success. Now why ask me to bring this, I'm glad we're not using these anymore. And for those in the back, they can't see that's not a permometer. I actually highly recommend using thermometers, especially after this conference, probably. This is my plan wheel. And while we have made progress in the takeoff process, to a large degree, the industry has settled for a takeoff process where an architecture designer makes an intelligent 3D model. And then exports and unintelligent [indiscernible] manually coloring over the lines to get quantities that were already in the model. The takeoff process has to evolve. And I'm happy to say we're embracing that evolution. Last year, we talked about leveraging AI to automate 2D takeoff. And this year, we're excited to announce 3D takeoff. Yes, as I mentioned, anyone can access this model, including Will, our Director of preconstruction. So now without leaving Procore, he can leverage the quantities out of the model and connect them to our cost catalog to provide instant detailed estimates. And soon, those linked costs will automatically update with model revisions to provide near-instant ethane management and value analysis easier than ever. So now that Will has updated his estimate, he have a pretty good idea of the savings created by that design change, but he needs to validate his internal number with actual ceiling contractors. And this is where our connected preconstruction solution really starts to accelerate that iterative process because estimates are connected to bidding, which are connected to our construction network. Where bidders can access all the documents in bid board and submit their bids right back into Procore leveling, where Will can pull the lowest qualified number directly back into his estimate. So instead of manually topping all the line items of its takeoff into a siloed bidding application, Procore estimating and bidding will be connected later this year, allowing Will to take his line items and push them directly into the bid solicitation process. Streamlining the entire thing. In addition, we've now fully integrated our bidding product with the construction network. So Will can easily find and evaluate new and existing trades serving the Chicago area. I'm also excited to announce our partnership integration with Bespoke Metrics and their product COMPASS to enrich our accounts with prequalification information. Yes. So Will not only can search thousands of trades, but it can leverage that robust prequalification information from COMPASS with historical project information that only Procore can provide when inviting contractors to bid. Now we've also made significant improvements to the bidder experience with the launch of Fit board. So sealing contractors, invited to the opportunity can see all their opportunities in one place. They can access all their bid documents and they can even do a takeoff and estimate right from their construction network account. And when that feeling contractor is done with their estimate, they can actually submit their bids right back to Will. And as I mentioned, because everything is connected, it will all come back to bid leveling. So Will can compare all the bidders side-by-side and select the most qualified one for the job. And lastly, when Will select the lowest qualified number, it will actually link their number right back into his estimate to reconcile designs with costs and its internal estimate with actual dollars. And so now that Will has reconciled his internal estimate with real dollars, he knows there's enough savings in that one design change to take care of the stakeholder needs that Sarah requested. Now I know that was a lot. So I'll recap. Unlimited user model means everyone on your team can get involved in the design review process with the ability to create issues on both drawing and models. Those same drawings and models can be used for takeoff using AI on 2D or advanced 3D takeoff. And your ability to reconcile your internal estimates with actual costs. It's never been easier for your teams to collaborate and reconcile designs with costs during pre-con. Now we believe the future of preconstruction is connected. And we're so excited to continue to partner with [indiscernible] life. And so I would encourage all of you to come by the innovation lab and come see these product developments for yourself. Give us feedback and help us refine them. That's why we're all here. Now we know what happens in pre-con, doesn't stay in pre-con. And the good news is that, that pre-con information can already transfer the courses construction. Estimates can push to budgets. Bids can push to some contracts and coordination issues to observations. So Will can make sure the field teams have all the history and information they need for success. We also know that on fast-track projects, while feeling designs are getting worked out, you're already moving dirt or you're probably way behind schedule. So with that, I'm going to turn it over to Julian to talk about what we're doing in the field as we move from precon to course of construction. Julian.

Thank you all. Thanks, Dave. Hello, Chicago. I've been in construction for over 30 years. And I know 30 years in, he still don't look a day over 25, it's amazing. Boy, this is not what 25 supposed to look like. But what keeps me going is this incredible industry and our passion for getting it right. That's why I shared, we're doubling down on driving deeper connectivity between you and your project team and innovating on the core that got us here. So you can get it right for your customers and the communities that you serve. Let's take a look at what we've been working on to enable you and your teams to build more efficiently. Procore connects you to your preferred network of stakeholders from the get-go. Let's meet Jim. Our project manager with our GC Vertigo construction. Now that we're starting the build phase of the project, Jim has to collaborate and coordinate with a workforce of over 50 subs. But how do these trades get on the project to start with? With Procore, [indiscernible], Grady contractor in the area was able to bid on Jim's project via the Procore construction network. Jim reviewed his bid, past projects as well as recommendations and certifications. And because of the COMPASS integration and all the great prequalification detail it includes, we know Dylan and his team are the best trade for the job. And because Dylan is also a Procore customer, once he's awarded the project, he can seamlessly connect his Procore project with the Burnham Park project with just a few clicks. As soon as Dylan hits the job site, he opens his mobile phone and all the Burnham Park drawings are already synced and waiting for him in his account. And if any changes are made, it will automatically be updated. So Dylan never has to worry. They're working off out-of-date drawings. Everything Dylan needs to start the job is right there waiting for him in his account. No need to download or reupload drawings when it changes me. And not only is this reducing risk of working off out-of-date drawings and information, it is saving Dylan and his team hours. That is the power of Procore connectability. Because it's so easy, the trades would love working with you, enhancing and strengthening your network. Today, connectability can give your network access to latest drawings. But not too far from now, you'll be able to connect RFIs and submittals, connect BIM, connect documents and templates and more. How does that sound? This is a huge area of investment for us, and it ensures a unified experience that enables each company on the project to efficiently meet their project and business goals. So let's get back to our project. The build process is moving along. But as we all know, it just takes one issue to derail a project. Dylan's excavation has revealed a higher water table than expected. This has ramifications for our hospital project change. But in the meantime, work in this area has come to a halt. While he's still staring at the problem, Dylan is able to mark up the drawing directly from this phone. He uses the Procore camera to capture a photo of the water table issue. And with a single click, it creates an RFI directly from the photo. This is the power of Procore on mobile. From right there on the site, Dylan snaps a photo, marks up the drawing, creates the RFI, all from his phone making the information immediately accessible for all who need it directly from the Procore platform. Still intend some additional photos to the drawing and with AI-powered locations Procore automatically assigns them a location for him to confirm and applies location context to Dylan's field data. Now AI-powered locations is in beta release today, and it's coming to everyone using the Procore platform next year. By using artificial intelligence to extract the location names directly from your drawings, we're able to populate all the locations on your project automatically for Europe approval. Now when [indiscernible] to deal with the additional scope, thanks to AI-powered locations, they can access all the RFIs and other data tied to the water table issue just by searching for that location. This is helping save hours across thousands of RFIs for this mega build. And in the future, with onerous GIS technology, Procore will automatically put your data on a map. So if Dylan didn't take the time to drop pins on the drawings for his photos, he can just check the map view to see where he was standing with all the images he's collected. Imagine, visualizing drawings, inspections, observations and other items on a map in Procore. And that also [Audio Gap] Now to show you more of our advanced AI powered technologies, what they mean to our hospital project and your portfolio, Rajitha is going to join us on stage.

Hello, isn't it incredible to see our AI capabilities taking place with locations? But that's -- but that's just the beginning of what we can do with AI, and I'm excited to be here and talk more about the opportunities that generative AI has opened up. At Procore, as you all know, we've been investing in AI for a while now. And not just when we all heard about ChatGPT. And we've had teams of data scientists automating everyday manual task. One of the ways we are continuing to invest in AI and innovate across the entire proper platform is by bringing you cutting-edge generative AI tech experiences like Procore Copilot, [indiscernible] and your team. And that's what you've been telling us you need. John, who's in the audience today, Director of Technology, ANDRES Construction, for it best when he said, I need an assistant that can take our policy and make it easier for my teams and nudge them when they're about to operate outside of policy. Well, John, I'm excited to share that Procore Copilot will be that intelligent real-time guide that can automate the data and nudge your teams on the next best action across the entire build process. Procore Copilot runs on data from construction, tailored benchmarks and insights that help you get the job done. Now let's take a look at how Procore Copilot can help Jim's team and all of your teams get the job done faster with less risk and greater efficiency. So going back to the water table issue, imagine Jim needs to verify the water table height quickly, so he has [indiscernible] to go back to Sarah and fund pumping and everything needed to get this job back on track. In [ hopping ] in our project documents, Jim asked Procore Copilot to help by simply typing in the Procore global search bar. What is the water table height in the Burnham Part project documents. Here, Procore Copilot, searches all the documents associated with the project, finds a geotechnical report and comes back to Jim with an answer. All in a matter of seconds. Procore Copilot uses powerful document summary capabilities to get Jim the information he needs. So Jim sees at the water table is much but expect to be much lower than Dylan founded. That means now he has documentation to submit a change order to his owner Sarah. Procore Copilot becomes an extension of the project team and is able to search and surface information all in real time within the proper application, both on web and mobile. Dylan has centers RFI for the water table over to Jim and his team at the general contractor. He's waiting for Jim to get back to him. But he goes impatient. So he takes out his phone, opens the Procore app and messages Jim directly from within the Procore platform using Procore conversations. Hey, Jim, our teams in an RFI, please advise. By next year, Procore conversations will be available and accessible on the Procore platform for all of your collaborating team members to use. But we aren't stopping there. In the future, we will integrate copilot and conversations. With this integration, imagine how copilot could streamline the process of spending, discussing and approving RFIs. Now let's meet our engineer, Louisa. She is going to need to update the drawings to account for the water table problem. So Louisa revises the design based on the RFI. Procore Copilot sees that Louisa has revised the drawing and can suggest a next best action for Jim to take, which is automatically creating a change order from the information in the RFI. So Jim clicks the pre-change auto suggestion from copilot and add in a few details. How easy is that? Now Sarah needs to approve the change order before work and start back up. Normally, RFIs can take up to 7 to 10 days. But the Burnham Park team was able to save time by handing every step directly in Procore. So now Sarah has everything she needs to approve the change order right there in the Procore platform. With thousands of RFIs created on a project size of Burnham Park Medical Center, you can imagine the potential for huge savings. So we just showed you how Procore Copilot will help summarize documents, draft correspondence and even suggest the next best step for your teams to take. The Procore Copilot vision we looked at today is actively under development and will be rolling out over the coming year. In the meantime, you can stay up to date on the latest news at Procore.com for pilot. Now let's bring wide back on stage to show you more of what we have in store for you. Thank you.

That was amazing. Thank you, Rajitha. Folks, you can stop by the innovation lab to learn more about Procore Copilot. And that's really not all you can do with artificial intelligence. So one of the things I hear on job sites all the time is this question, well, what does this say in the contract? Here's constantly when I'm on a job site. So going back to Dylan, right, months ago, Dylan signed a 50-page contract with Jim. He signed it, but he didn't remember it. So one of the things we're doing with our partner, Document Crunch is bringing you this contract with Procore conversations. We love Document Crunch. They're doing some really amazing work with natural language processing where they look at contracts and they summarize useful information. Now in this partnership, we can bring those contract details into your everyday Procore experience. Let's take a look. All right. So here, you see contracts, there's a water table. So it says, hey, what do I do in case of a weather delay? Message comes back, Section 34 of the contract states that you'll have to give an owner notice if there's a delay longer than 3 days. We just queried the contract live from Procore conversations. But you know what's even cooler than that? You can take it one step further because a large language model can actually auto generate the owner's notice. So you see here I've generated an owner's notice for you. Would you like to send that via the correspondent tool? How cool is that. All right. Back to our water table. Jim needs to source materials, issues in RFQ to Dylan for the additional work is going to need waterproofing membrane. Procore knows the materials we need because we can see it in the change event, Dylan tracks down the waterproofing membrane by using Procore's open API, which reaches out and connects to partners who do materials, partners like StructShare or Kojo, who can bring back material pricing into Procore. You can see how the waterproofing membrane pricing shows up here in the brand-new side panel. But really, any partner data could show up here inside panel. It's so cool. The next work process we need to get done for this water table. Dylan has to hire water pumpers, which weren't originally in scope. Again, because all these workflows are connected and continuous inside of Procore, Dylan has just going to click a button and it's going to auto generate a bid package from the change event. It's going to send out the available subcontractors in the area for pricing. And Dylan is going to find a subcontractor ready to pump the water. Jim can send the change order up for approval. All this happens because on a connected network, every stakeholder has the information they need to quickly get their job done. Okay. Remember, Louisa updated the drawing. So we have a new drawing revision because of the water table change, probably had to change the width of that peer detail. Because of Procore connectability, the drawings are automatically updated and pushed out to every stakeholder, and everyone can get back to work. You can see how we took a single change, one in construction, and we walked through the entire process, we think we can reduce a change like this from weeks down to days. That's going to help you really save time and money. And that's the power of a connected platform. Now imagine this efficiency gain stacked up on a big construction project with thousands of changes. It can transform your business in that project. As you can see, we've taken you through the complete life cycle, showing you the build and precon phases. And along the way, stakeholders have collaborated and communicated, and they've made changes without ever leaving Procore. We're also really excited about the major enhancements we're making to our core products with connectability and how we're innovating on AI-powered experiences like Procore Copilot and locations. One more thing, we've still got to pay the crew. Eliza, come on up and show everyone how we pay the crew.

Thanks, [indiscernible]. Today, getting paid is a paperwork nightmare that lacks visibility and takes place across disconnected systems. We are automating and centralizing the payments process so that you have full transparency into the entire payment flow. That's why we're excited to announce that today, we are officially launching Procore Pay to select U.S. GCs. All right. Let's go back to our project to see how it works. Meet Ana, the project accounting from the general contractor, Ana invites her subs to invoice or their work. Guess what happens next? The same Procore account are sub-billing open to win the job from Jim and now uses for shared estimates and drawing is the same account he uses to set up Procore Pay and LinkedIn bank account. So Dylan hops into Procore and filled out as invoice. The fields and data are all there for him, and he's done in minutes. Ana reviews and she approves the invoice for Dylan and all 50 subs working on the hospital. Now since our projects in the U.S., Lean waivers are consideration, Procore prepopulate saline waivers from data within Procore for all stuff. Dylan can sign his lean waiver anytime, anywhere with just a single click. With Procore Pay, signed on commissional labors can only be accessed to GC after payment to subs like Dylan, helping give sub that peace of mind. So Ana and Dylan in all her sub invoices up to our owner Sarah. Because the format is easy for Sarah to understand and align with all of the financial reporting, Jim and Ana have been sharing throughout the project. There is minimal back and forth. Sarah approved and [indiscernible] Ana, the GC. With payment from the owner, Ana is ready to pay herself. She jumped into Procore and verifies all payment requirements are met. She sees unconditional lean waivers and in certificate of insurance and they all check out. And with a few clicks, Ana authorized a payment which automatically send instructions for Goldman Sachs to kick off the process of paying her subs like Dylan quickly and seamlessly. Ana can pay with confidence knowing payments are made using Procore's partner. Goldman Sachs. Procore copilot would eventually be able to jump in again with an automatic notification for Anna. You are now 50% build on this project. So you can drop your [indiscernible] from 10% to 5%. Ana will have more cash coming in that she can deploy on this mega project, thanks for that reminder. How cool is that? All right. Back to paying our subs. Ana has pay on Wednesday afternoon, and their subs can see that the payment process has begun in Procore. Dylan has a notification that same afternoon that the money is heading its way. And by the next morning, he wakes up to the fund in his company account. It's easier that. With invoices all paid out, we can see that Procore estimating accuracy bolstered by data-driven estimating pays off our owners, Sarah. She notices that invoices are coming in higher than planned. So Procore are back to the water table change order submitted by Dylan to validate the higher cost. Accessing this change order in Procore allows her to quickly associate the costs with the water table, approve the invoice and get funds to her GC. To hold this estimate together using historical hospital data from Procore. And because of the accuracy of the data, the actual cost of the work was really similar to the estimate. How often does that happen, right? Because Procore Pay connects data from project management and financials, you can easily access all the information you need to make a payment decision in one place. On top of that Procore prepopulate every step of the payment process, making sure everything is accurate and saving you time. That's the power of connecting all stakeholders on the project through the Procore platform. We just went through the full hospital project from pre-construction all the way to payment. Now let's bring wide back on stage to close this out.

Thank you. Eliza. Thank you, Eliza. I'm so pumped about the potential of Procore Pay to revolutionize the way people get their money in construction. The Burnham Park Medical Center story really brings to life how Procore helps you save time and money from precon all the way to hand over. So the recap of this end-to-end story we just told you. First, we're bringing you a complete preconstruction solution, the entire plan phase. From bidding to estimating, including looking at your historical data to provide cost estimates for your next project, something we call round tripping the data. Second, we designed our product road map based on your feedback and innovating on our core products, increasing the pace of execution on what got us here in the build phase with advancements like connectability, conversations and enhancing every single collaboration you have with your partners like architects, owners, trades and vendors. And third, we're committed to helping you navigate the future of construction technology, transforming the way you deliver and pay by innovating on old processes like payments, and bringing you cutting-edge first of their kind, AI-powered capabilities like Copilot and locations. The transformation ahead for all the construction will require audacity of thought and bold ideas. It's going to require new methods of collaboration, too. But you all know this. This room is full of ground breakers, who are leading us through the next evolution of the industry, and I'm more excited than ever about what lies ahead. Thank you for joining us in Chicago, and thank you for trusting us to be your partner on this transformation journey. Have an awesome ground break.