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

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Procore Technologies, Inc. FY '26 Q2 Earnings Call. [Operator Instructions] I would now like to turn the call over to Matthew Puljiz, SVP of Finance. Please go ahead.

Good morning, and welcome to Procore's 2026 Second Quarter Earnings Call. I'm Matthew Puljiz, SVP of Finance. With me today are Ajei Gopal, President and CEO; and Rachel Pyles, CFO. Further disclosure of our results can be found in our press release issued today, which is available on the Investor Relations section of our website and our periodic reports filed with the SEC. Today's call is being recorded, and a replay will be available following the conclusion of the call. Comments made on this call include forward-looking statements regarding, among other things, our financial performance, platform and products, customer demand, business strategies, transactions and operations. You should not rely on forward-looking statements as predictions of future events. All forward-looking statements are subject to risks, uncertainties and assumptions and are based on management's current expectations used as of today July 30, 2026. Procore undertakes no obligation to update any forward-looking statements, except as required by law. If this call is replayed after today, the information presented may not contain current or accurate information. Therefore, statements made during this call should not be relied upon as representing our views as of any subsequent date. We'll also refer to certain non-GAAP financial measures to provide additional information to investors. A reconciliation of non-GAAP to GAAP measures is provided in our press release and our periodic reports filed with the SEC. And with that, let me turn the call over to Ajei.

Good morning, and thank you for joining us today. I'm delighted to report that our core business continues to perform very well. as evidenced by our outstanding financial and operational results for the quarter. Nearly 9 months into my tenure as CEO, I have a clear view on Procore's go-forward strategy and the operational rigor needed to execute it. and I'm more excited than ever about our prospects for the short and long terms. Procore has built one of the most essential vertical software platforms in the industry. A system of collaboration that creates a powerful network effect across the industry's stakeholders. We sit at the intersection of the physical and the digital world, where the decisions made on paper meet the realities of the job side. I believe we have the opportunity to lead in the AI era by continuing to build a true next-generation AI-native construction management application that delivers meaningful efficiency and safety gains across the construction life cycle. Saving our customers time and money. We have taken concrete steps towards that vision, through both organic development and two targeted acquisitions, including our agreement to acquire DroneDeploy which we announced yesterday. Even as we pursued our strategy, we have continued to execute, recruit key personnel and organize ourselves for success. This quarter's outstanding results and our raised expectations for the year reflect that discipline. My conversations with customers these past months have only fortified my conviction in our business and our path to long-term value creation. I'm confident that the strength of our business, our ability to execute and the depth of our customer relationships give us a clear runway to durable growth meaningful margin expansion and compounding free cash flow per share. Let me start with the quarter. Q2 was an outstanding quarter for Procore, where we delivered 15.8% year-over-year revenue growth and 21.5% non-GAAP operating margin, which represents 800 basis points of year-over-year margin expansion. I'm excited that in Q2, we signed a contract for the King Salman International Airport or KSIA in the Kingdom of Saudi Arabia. This public investment fund project, which will become one of the largest airports in the world is implementing Procore for unified digital construction management. Working with strategic delivery partner to Salman, KSIA will use Procore to have one connected source of project data from design through delivery with stronger governance and transparency from the earlier stages. To reflect our momentum in the market, I'm pleased that we have raised our annual guidance just as we did last quarter. I am also excited about the margin expansion we have delivered over the past few years. The operating leverage we are building and our commitment to sustained profitability. Rachel will walk through the details in a few minutes. Our core U.S. residential and multifamily construction market has experienced significant growth deceleration over the past 2.5 years, leading to negative growth in late 2025. Despite this, Procore has sustained mid-teens top line growth, significantly outperforming the end market and reflecting the critical nature of our products and our ongoing success across stakeholders. Today, we are seeing an uneven end market with weakness in certain subsectors, such as manufacturing and unprecedented strength in data center construction, driven by ongoing investments in AI. In the U.S. alone, construction spending in the data center subsector has tripled over the last 3 years, according to Goldman Sachs Research. Commercial real estate services company, JLL reports that nearly 100 gigawatts of new data centers will be added between 2026 and 2030, doubling global capacity. The enormous magnitude of spending on data center construction will continue to drive top line benefits to Procore. And of course, any acceleration in data center construction would be an additional tailwind for us. Procore is the market leader in data centers with 9 of the 10 largest North American data center sites using our solutions during construction. Because data centers is a highly sophisticated facility built on the tight deadline. Our customers rely on Procore to automate approvals and communication and to keep every stakeholder collaborating in real time on a single platform. We are expanding our solution set with new product capabilities in connected commissioning and asset workflows. And through our NVIDIA partnership, we are streaming Omniverse powered 3D digital twins of data centers directly inside Procore. In Q2, we closed our largest contract in EMEA history. A nearly $7 million agreement with a European company that builds hyperscale AI data centers across Europe, the U.S. and APAC. This company will use Procore as a system of record for the entire global construction program, including project execution, document control and cost management. In the process, this customer will replace size spreadsheets with a single standardized audit-ready platform integrated into ERP. Moving to our products. Procore was founded with a mission to bring efficiency and collaboration to the job site. Since then, we have expanded our market leadership evolving from a system of record to a global system of collaboration. We are with physical assets and activities are digitized and where actions are taken to change the physical world. And our technology strategy is anchored by 4 key pillars: our extensive data set and depth of context, fueled by nearly 3 million active users, the trust we have established through a secure and compliant infrastructure, the powerful network effect of having dozens of stakeholders collaborating on every project and our focus on moving work forward in addition to providing insights. Building on this foundation, we are now integrating AI into our platform's core to address the industry's most pressing challenges, including a labor shortage of nearly 350,000 workers in the U.S. alone. Our AI-powered digital coworkers are designed to bridge this gap by delivering purpose-built capabilities for every project stakeholder. To accelerate our ambitious road map, we are driving organic innovation alongside strategic acquisitions. Specifically Datagrid, which joined our portfolio in January and DroneDeploy our latest announcement yesterday. After closing the Datagrid acquisition, we focused on technical integration and launched Procore AI through a dedicated specialist team working as an overlay alongside our core sales force. Our product enabled customers to use construction-specific AI natively and with full context within their existing broker environment. In the last week, we have expanded our library of prebuilt digital coworkers to 20 AI agents purpose-built for construction, and we expanded sales to include our broader go-to-market organization. Initial customer interest has been very positive with leading companies, including HASCO and Level 10 Construction amongst the early adopters. Another great example is Consigli a top North American general contractor and Procore customer for more than a decade. As part of our early limited availability program, the company moved from an internal AI hackathon to deploying 4 Procore AI agents in 3 test projects to help with common workflows like reviewing submittals or drafting RFI. Switching drawings that once took their project engineers 30 minutes now takes 5. Material verifications that took 10 minutes can be accomplished in seconds. With that success, Consigli is now deploying the generally available Procore AI across 50 projects. We are very excited about the speed at which data grade has been integrated. The reception by our customers to our Procore AI strategy and the momentum we are building in our AI business. This early success gives us further confidence to make another AI accelerating acquisition in DroneDeploy. I will cover the strategy around DroneDeploy, while Rachel will discuss the financial details. As a leader in reality capture and robotic automation, what we are calling visual intelligence DroneDeploy bridges the physical construction site with the digital world, delivering critical real-time visibility into job site activity. While its name reflects its origins with drone-based imaging, the company has evolved over the last 13 years into a fully unified platform for 3-dimensional ground and aerial imaging. Spanning drones to ground deployed robots as well as mobile, fixed and wearable cameras. Their products are based on artificial intelligence and machine learning with particular focus on computer vision and image recognition. Their robotics solutions enable robots and dock drones to conduct scheduled fully autonomous missions, launching, capturing and uploading data without on-site personnel. DroneDeploy is being used on over 3 million job sites across more than 180 countries, including many of the large data centers that I mentioned earlier. It is important to note that Procore and DroneDeploy offer complementary solutions that do not overlap. As long-term partners, we have market tested integrations that joint customers are using today. As soon as the transaction closes, we intend to rapidly build on those integrations to deliver AI-enabled intelligent multimodal capture via cameras, drones and robots deeply integrated into the Procore platform. We expect our augmented solutions will address some of the most challenging pain points customers are facing. Building on their strong AI and technology foundation, DroneDeploy has recently developed 3 AI agents to enable customers to track progress like safety risks and monitor asset conditions. These agents, which are in the early stages of commercialization, are intended to optimize entire workflows, and they help point the way to how Procore AI will transform construction management software. To illustrate, I'll reference the customer scenario I mentioned on our Q4 call. I described how during a job site inspection, a supervisor manually took videos of a column to share with stakeholders. An early incarnation of a Procore digital coworker analyze the audio and visual cues and the specifications and determined that the column had been coded incorrectly and ordered remediation. We would have normally demanded several hours of manual effort and specialized expertise to navigate across project specifications was solved by Procore AI in minutes. When DroneDeploy added to the scenario, the manual job site inspection and logging up observations will no longer be the trigger. Instead, a multimodal perception capability driven by a range of cameras, drones, robots and other devices will regularly evaluate the construction site and automatically initiate any appropriate response, securely, compliantly and in the right context. With the acute shortage of labor faced by the construction industry, even the simple example shows that AI-driven automation is a potential game changer because action can be taken without waiting for a site visit by an overscheduled supervisor. This example demonstrates how Procore in the future will incorporate a seamless integration of several capabilities, purpose-built for construction, specifically advanced reasoning or the brain perception or the eyes and years and a secure, collaborative and auditable platform where actions are taken or the arms and legs. Such a system will enable us to deliver digital coworkers. For the field and in the back office. The track what's actually happening on a project make sense of it and they take action to change the outcome. That's real value for customers. It offsets labor shortages, and saves time and money. Now let me talk about the power of data. Data is the lifeblood for AI. Access to relevant data separates a proof of concept from a mission-critical AI offering. DroneDeploy has captured 20 trillion square feet of visual construction data, an area about the combined size of California, Arizona, New Mexico, Texas and Louisiana. And it goes well beyond roll reality capture. That data includes tens of millions of user-generated annotations, image segmentation, construction progress labeling and well over 100,000 label safety issues. That data will enable us to create smarter AI solutions to solve genuinely meaningful problems in construction. Once the transaction closes, we plan to immediately cross-sell DroneDeploy solutions into our broader customer base and vice versa. We already share nearly 600 mutual customers, including enterprise brands like Skanska and Turner, a substantial number that validates both the organic demand and the clear synergy potential. Beyond this overlap, we estimate that there are several thousand existing customers of Procore, who could benefit from a combined offering. As a trusted partner, Procore is well positioned to drive adoption of DroneDeploy across those customers. As I reflect on the quarter, 4 key points stand out. First, our core business is performing incredibly well. Second, we have a well-defined strategy to emerge as a leader in the AI era. And I'm excited that DroneDeploy with its strong AI foundation will make a significant contribution to that strategy. Next, even as we are implementing our strategy, we continue to improve our operational capabilities as evidenced by our exceptional results in the quarter and our raised guidance. And finally, as I speak with customers, I'm even more confident in our direction, our ability to execute as a success of our company. Let me end by thanking my fellow Procorians for their tireless dedication to our customers. And with that, I'll turn the call over to Rachel. Rachel?

Thanks, Ajei, and thanks, everyone, for joining us. Before I get into the results, you will notice we are introducing a new supplemental earnings presentation this quarter, which can be found alongside our press release on our Investor Relations website. We had an excellent Q2, beating the high end of our revenue guidance by approximately 2.5% and delivering our first quarter of GAAP operating profitability. Total revenue in Q2 was $375 million, up 15.8% year-over-year. Our Q2 international revenue grew 23% year-over-year or 19% on a constant currency basis. Q2 non-GAAP operating income was $81 million, representing a non-GAAP operating margin of 21.5% and up 800 basis points year-over-year. And free cash flow was $65 million, up 507% year-over-year. We ended Q2 with broad-based momentum driven by strong operational performance and robust demand across our portfolio. Large deal execution led the way. We are seeing customers increasingly commit to larger, more strategic partnerships with us, which speaks to the critical role we play in their operations. When we look under the hood of the large deal performance, the strength was multifaceted. We gained significant traction landing high-profile new logos across both domestic and international markets while rapidly accelerating our momentum in large-scale data center opportunities. This ability to win across multiple vectors gives us confidence as we head into the back half of the year. Our strength in the quarter also contributed to improvement in cRPO where our year-over-year growth rate accelerated by 100 basis points. The primary driver of this quarter's acceleration was stronger underlying bookings performance. cRPO also benefited from an increase in our average contract duration. When normalizing cRPO, the year-over-year growth remains highly consistent with both our Q2 revenue growth and ending ARR growth. As a reminder, once contract duration stabilizes, reported and normalized cRPO growth will eventually converge with revenue growth. Turning to profitability. We are pleased with the margin expansion delivered this quarter, which is reflected in both our non-GAAP and GAAP results, the latter reflecting the company's first quarter of GAAP operating profit. This reflects not only strong execution across our teams, but also the growing inherent operating leverage in our business model. This quarter's performance is an initial step in a broader trajectory of profitable growth. Looking ahead, we are committed to driving sustained efficiency. Specifically, we are initiating FY '27 guidance for non-GAAP operating margin at 25% which would represent nearly 1,100 basis points of improvement versus FY '25. As we scale further, we will continue to optimize our cost structure, which includes tailwinds from AI efficiencies. We intend to build on the significant margin expansion we've delivered over the past few years, carrying that same upward momentum into the future. Next, I want to discuss our exciting agreement to acquire DroneDeploy for $845 million in cash. We approach M&A with a high bar for both strategic alignment and financial rigor. We selectively evaluate targets that can accelerate our strategy but maintain strict discipline by ensuring every deal is financially accretive to our business over time. that dual focus on strategic acceleration and financial returns remain central to our capital allocation philosophy. As Ajei detailed, this acquisition represents an important component of our AI strategy, and we see significant synergy opportunities across the combined businesses that will directly benefit customers. To give you a sense of scale, drone deploy has generated approximately $78 million in trailing 12-month revenue. We expect this transaction to be accretive to organic revenue growth, and importantly, we expect to absorb their near-term margin headwind with no changes to the FY '26 and FY '27 margin outlook we have shared today. We remain confident in our multiyear margin expansion road map. In terms of funding, we have arranged committed bridge financing to fund a majority of the purchase price while we evaluate and finalize our long-term capital structure solution in the most EPS-accretive manner. Because we expect the deal to close later this year, we will provide formal financial details along with any relevant capital updates at the appropriate time. With that, let's move on to our outlook. And to reiterate, this outlook represents our organic business and does not reflect any contributions from DroneDeploy. For the third quarter of 2026, we expect revenue between $382 million and $384 million, representing year-over-year growth of 13.3% at the high end. Q3 non-GAAP operating margin is expected to be between 19% to 19.5%. For the full year '26 we are raising our revenue guide to a range of $1.51 billion to $1.514 billion, representing total year-over-year growth of 14.5% at the high end. We are also raising our non-GAAP operating margin guidance for the year by 50 basis points to be between 18.5% and 19% and which implies year-over-year margin expansion of 440 to 490 basis points. Finally, we are raising our free cash flow margin guidance by 50 basis points to 19.5%, which implies year-over-year free cash flow margin expansion of approximately 310 basis points. It is important to note, we are confident that we can maintain our margin guidance post the closing of our acquisition of DroneDeploy. In summary, we delivered an excellent quarter that highlights both our top line growth and expanding margin profile by pairing our underlying business momentum with the synergistic acquisition of DroneDeploy, which bolsters our AI strategy we are setting up the business for sustained profitable growth. We remain focused on relentless execution and building on this momentum to generate compounding free cash flow per share over the long term. With that, let's turn it over to the operator for Q&A.

[Operator Instructions] We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of David Hynes with Canaccord.

Congrats on a nice quarter and the exciting acquisition. I'll just with start with DroneDeploy. I'm just curious what convinced you that, that business was an asset Procore needed to own rather than continue to partner with? I mean was it the pace of AI innovation, was it what you saw with customer demand, something else? I'm just curious kind of the motivation behind the deal?

Sure, I mean, that's a great question. Look, we are seeing right now, I think it's stating the obvious. We're obviously seeing a profound transformational opportunity in the industry. I think AI is making an enormous impact on a number of different industries. And certainly, we see an opportunity for us to be able to create this next-generation AI-centric AI-first construction application, which we believe will have tremendous impact on our customers. And as we start to lay out the strategy of what we needed to do, it became very clear that the perception piece of it was something that needed to be part of our strategy towards delivering digital coworkers. I mean when you think about the concept of a coworker, the whole idea is to be able to collect information, reason about it and act and one aspect of that collection was something that we -- that aspect of perception was something that we needed to add into our business. And obviously, when you look at the technology that DroneDeploy had developed, we are long-time partners. We understand how to work with them. We have a great culture. They have deep technology. They have really great people. And we saw that opportunity to be able to integrate them into our organization very seamlessly. We had, as I mentioned in my prepared remarks, we have something like 600 or thereabouts combined customers. And having seen success at those customers, that gave us confidence and certainly our diligence work as well gave us confidence that we have an opportunity post close to be able to introduce DroneDeploy in the short term directly into our customer base, we have thousands of customers who are not using DroneDeploy today, and that represents incremental opportunity. So we saw -- and as part of this acquisition, we saw the opportunity to not only drive our long-term strategic direction towards creating digital coworkers with some great technology, we also saw the opportunity in the short term to be able to achieve some of the synergies that I think are relevant in an acquisition and the strategic acquisition of this nature. I'd also make the point about robotics. And this is something certainly we all believe that robotics has a future to play on the construction side. And obviously, DroneDeploy has investments in robotics, and that exposes us to the future of robotics as well. So there are a number of areas where we were very excited about this technology, very excited about the company and great partner. But certainly, the opportunity right now to build this AI native application for the future is on us. It's right in front of us. We have a great strategy. We have great momentum and the ability to execute that is something that we value and we were excited about.

Yes. Yes. Makes sense. Maybe we could zoom out with like a bigger picture AI question. I'm curious if you started to see any relationship between platform maturity and kind of readiness for AI adoption. For example, like are customers with deeper Procore deployments, adopting AI more quickly? Or is demand kind of consistent across the installed base? I'm just curious kind of where you see the most fertile hunting ground in the early days of AI expansion.

Well, I think it's pretty clear to say that everyone I mean you have to be living under a rock to not have heard about AI and the opportunity to impact your organization. And certainly, our customers are very sophisticated and our customers have all tried to understand what the impact of AI could be on their organization. But as you dig into it, it becomes -- the path forward becomes very clear. Our customers recognize as, frankly, we do in our own IT infrastructure when we think about our own applications, when we're deploying AI, we're relying on people and vendors that we've used in the past, and so when we want, for example, AI in our HR systems, we're going to use our HRIS and leverage that vendor. In our case, with respect to Procore, our customers are -- our customers are using Procore as a system of collaboration. They're using Procore as a system within which they operate their business. And so when we talk about digital coworkers and the opportunity to go after a fundamental problem such as such as savings, for example, labor, that resonates as long as it works in the system within which they're used to working. And so that's one of the reasons why we invested in making sure that our AI capabilities are integrated into Procore. And that's the work we did certainly when Datagrid came on board, it was integrating data grid into Procore to create this Procore AI capability that we just made available generally to the market. So that's what -- that's really what I think customers are looking for is, can I take advantage of AI, but can I do so in a safe and secure way, in a way that's convenient for my business, so I don't have all my employees don't have to become AI experts, but I can get the benefit of that in the context of the work that I'm doing. And that's what we're trying to roll out and make our customers successful.

Your next question comes from the line of Adam Borg with Stifel.

Awesome. Maybe just internationally, it was great to hear about this large airport deal in Saudi Arabia and then you talked about the largest India deal ever. Maybe talk a little bit more about like a state of the union of what you're seeing in that region, and how you think about the opportunity going forward?

Yes. Look, obviously, we have a business which is primarily focused on the domestic market and about 85% of our business is domestic and about 15% approximately by business international. And we've seen an opportunity to continue to expand internationally. And one of the key things as we think about international -- well, actually, there are 2 key things. One is product and one is do we have the right -- do we have the right go-to-market motion. Walt, who recently joined our company as the CRO. Some of you know him, Walt has a great deal of experience in being able to build out international go-to-market, especially in a vertically-enabled software business such as ours. What we're seeing is really a couple of different kinds of international customers or international geographies. So let's take U.K., Ireland, for example. So U.K., Ireland, there are some product differences between the North American market and say, U.K., Ireland and other parts of Europe. Because in Europe, the technology -- the customers are CDE led. So they require a common data environment within which they can work. And that's an important aspect, and there's some very specific requirements in the market. This year, we launched a CDE specifically for Europe, and we have seen very positive customer feedback as a result of that. And so that gives me a lot of confidence in our strategy of being able to establish beachheads in geographies and expand. There are other geographies where the U.S. product that we offer is very consistent with the needs of the market. And an example of that is in the Middle East. And that's -- so that's been an area where we have made some incremental investments and focus in the recent past, resulting in success. And certainly, I talked about a very important and valued relationship here with KSIA. So we're excited about international. It's -- we have a path towards expansion. It is still early days. But I think the framework is in place, and we're excited about our opportunities.

That's great. And maybe just as a quick follow-up for Rachel. Great to see the guide for next year an operating margin, a really strong improvement. Maybe just help go a step deeper on what's giving the confidence a 6 quarters out to give that, what is the lever that you're seeing? that obviously you have to have some top line framework as you think about that. So lease qualitatively how you think about organic growth next year, acknowledging that we are 6 quarters out?

Yes, absolutely. Happy to unpack that for you. So as I began to talk to investors following our last call, it was really clear that there was a lot of interest in our margin profile and how do we get to be comparable with our vertical software peers. So I've spent kind of the last 4 months really digging into the cost structure and looking really hard at where those levels are. Now that gave me a lot of conviction in our ability to improve the margins so much so that I wanted to be able to share that milestone with you now kind of rather than wait. That 25% non-GAAP operating margin, that represents almost 1,100 basis points of expansion. Well, that's really a notable milestone. It's really just the first of many in our long upward trajectory to get to those best-in-class software margins. You mentioned a comment about the revenue, and we go through an annual planning process. We are in the process of doing that. We don't have revenue yet to share with you. That will come in the normal time frame early next year. But we were so confident in the cost structure that we wanted to give this metric out now because there's a number of different ways that we can get there. So you should view this as a comment on cost and not a comment on revenue.

Your next question comes from the line of Daniel Jester with BMO Capital Markets.

Maybe another one on DroneDeploy. So we were looking over them since you made the announcement last night. It looks like they also sell into end markets that aren't necessarily related to construction, it looks like they do site inspections for energy, they do agriculture things. So is there a way to help us think about how much of the drone deploy product is directly applicable to your construction customers today? And how much of their product may be isn't as core to your focus?

The way to think about DroneDeploy, DroneDeploy has some very strong capabilities on perception which are certainly being used by sort of more traditional construction companies, but they're also being used by companies that I would classify as being owners in our category. So people who are building out infrastructure but managing infrastructure. So drone deploy is able to sell to both owners as well as well people who are actually performing the build on the ground. The technology is tied to -- so it's very consistent with our with our end market view of owners and builders. Their technology is essentially they're rooted in AI and machine learning around visual intelligence. So it's about being able to capture images, whether they be from the drones or robots or other kind of cameras being able to capture those images process them and evaluate them. So I'm sure -- I mean, obviously, you can see multiple uses for those images, but the focus clearly for us and for drone deploy has been on that around that construction build-out use case, which is all related to the business that we're in.

Great. That's really helpful context. And then on AI. I think you touched on this in the prepared remarks about the new agents becoming more generally available. Can you just spend a moment around sales enablement? I know Walt is relatively new to the seat. But what are you doing to make sure your sellers have all of the tools available to go and now hit the ground running, that you're going to have a much broader AI product suite, both now and in the near future?

Well, I think the reality of selling AI and making sure that, that's something where the, as you say, the sales organization is enabled, that comes from experience. And what we've been very deliberate about is not trying to push the technology out to the general sales force, but to go through this limited availability period. And if you look at the time from the time of acquisition of Datagrid into our portfolio, we already had our core organic innovation around AI, and you added -- we added in Datagrid, and rather than just simply push everything out to the market, we took a moment to integrate the technology and create them the right way and make sure the technology was available through a very small, very targeted team of just a couple of people facing customers who were able to bring in sort of lighthouse accounts earlier accounts where we could see how the technology would be positioned, how it could be deployed, what would be the low friction way to getting started. And so that was the idea. And it actually worked out really well because as we started to go through that, it became clear to us that there was an issue of packaging that we needed to address in order to be able to be more rapid to market. And so we created these starter packs, as you saw in our most recent press release from a few days ago. And the starter packs give teams a low friction way to get started. They are ready to use agents and things like submittals and RFIs and daily logs. And they have very -- they have restricted usage for a certain number of projects. and a certain capability. So it's an easy way for a customer to come in and say, I want to use this -- I want to use AI, I'm not sure exactly how it's going to get used, but I want to take advantage of it. I'm going to use it across these few projects, I'm going to use it on this capability. That gives them the ability to come in and then that allows them to experience, use the technology and then to move onward. So that's the path that we've laid out for ourselves based on this very deliberate limited availability or general availability rollout. And as I said, the product has just gone [ GA ] and so the sales. So now it's available to the broader sales force to position with their customers.

Your next question comes from the line of Jason Celino with KeyBanc.

Ajei, I think you mentioned something kind of interesting when we think about truly addressing the digitization of construction robotics has historically not directly addressed the physical opportunities with labor efficiency. With DroneDeploy, how does that bringing closer to that opportunity? And maybe what role do you think robotics has with the broader construction market.

Well, it's obviously early days. But if you think about robotics in general, there's always been a broad dream that robots are going to be in a position to address labor. And -- you see this certainly in industrial settings, which are very constrained. But in a construction environment, it's a much more unconstrained setting, and it becomes a little more challenging to imagine exactly the role of robots in conjunction with human beings and there's concerns about safety and so on and so forth. So it's a very complicated problem. But there is an enormous amount of advancements that are taking place, and I'm not just talking about humanoid robots. I'm talking about special purpose robots that are working in mixed-use environments where there are human beings and robots working together. And that is work in progress, that's evolved. What DroneDeploy brings to the table is they understand how to manage robots. And so part of their technology is the management of robots and management of drones and robots in these environments. So people are using robotic cameras, for example, or drones, being able to manage them so that you essentially have autonomous activity on the construction side. is an important aspect. So a great example would be I want to make sure that I get the exactly the same time and exactly the same path. I want to follow and get a perspective of exactly what's happened on that day. So at 5:00 every evening, I'd like over every afternoon, I'd like to understand what happened. Well, that's a predetermined prescheduled activity and DroneDeploy has the technology to be able to do that as a simple example. So that gives us -- so we see ourselves from construction management as being able to expand broadly into as and when the industry is ready into the management of robots and robotics. So we don't see ourselves as building robots. That's not our business, but we certainly see ourselves in the management space. And again, this is early days, but we're very excited about the technology and the capabilities that DroneDeploy brings to the company.

Great. And then maybe just specifically on the second quarter. the revenue beat was bigger than what we've seen over the last couple of quarters, and it sounds like cRPO did quite well. You mentioned the better underlying bookings is like mine, the primary driver, but maybe can you just elaborate on the strengths and maybe why specifically Q2 was so strong?