Q2 2024 Procore Technologies Inc Earnings Call - Investor Q&A

August 16, 2024

Speaker Change: You have joined the meeting as an attendee and will be muted throughout the meeting. This meeting is being recorded.

You have joined the meeting as an attendee and will be muted throughout the meeting. This meeting is being recorded.

Speaker Change: He's doing a great job of bringing in the best talent for, you know, for what we need.

Speaker Change: Thanks Albert.

Matthew Puljiz: ...market announcement that we made a couple of weeks ago, let me kind of cover the format of the call before we begin. So we're going to have a very brief set of opening remarks. We'll start with our CEO, and then followed by our CRO. We'll speak for a couple of minutes each, and then we intend to open up the call for Q&A. The goal of today is to answer and address as many of your questions and curiosity related to the go-to-market announcement a couple of weeks ago. Our ask is that all questions be centered around the go-to-market announcement and limit your questions to just that topic. Any other financial questions around margins or cash flow or anything to that effect, the IR team or Howard, we're happy to address that at a separate time.

Speaker Change: Market announcement that we made a couple weeks ago.

Speaker Change: Let me kind of cover the format of the call before we begin.

Speaker Change: So we're going to have a very brief set of opening remarks.

Speaker Change: And it's not one or the other.

Speaker Change: All right, let's try to do at least one more.

Speaker Change: Let me kind of cover the format of the call before we begin.

Speaker Change: We'll start with our CEO and then followed by our CRO.

Speaker Change: It's a combo of all so I've seen it all.

Speaker Change: Drew Besser.

Speaker Change: So we're going to have a very brief set of opening remarks. We'll start with our CEO.

Speaker Change: We'll speak for a couple of minutes each.

Speaker Change: Thank you.

Speaker Change: Hey guys, can you hear me?

Speaker Change: and then followed by our CRO. We'll speak for a couple of minutes each.

Speaker Change: And then we intend to open up the call for Q&A.

Speaker Change: We got you.

Speaker Change: The goal of today is to answer and address as many of your questions and curiosity related to the go-to-market announcement a couple of weeks ago.

Speaker Change: Thanks for taking the time.

Speaker Change: and then we intend to open up the call for Q&A. The goal of today is to answer and address as many of your questions and curiosity related to the go-to-market announcement a couple of weeks ago.

Speaker Change: Hopefully a quick one.

Speaker Change: Our ask is that all questions be centered around the go-to-market announcement and limit your questions to just that topic.

Speaker Change: Any other financial questions around margins or cash flow or anything to that effect, the IR team or Howard, we're happy to address that at a separate time.

Speaker Change: Any other financial questions around margins or cash flow or anything to that effect?

Speaker Change: the IR team or Howard, we're happy to address that at a separate time. But we'd like for you to take advantage of the access with Tui and Larry and Howard today and really focus the conversation around go-to-market.

Matthew Puljiz: But we'd like for you to take advantage of the access with Tui and Larry and Howard today, and really focus the conversation around go-to-market. In addition, we've invited all of our sell-side analysts to participate and join on this call, but they've been asked to let the buy-side lead Q&A. This is really in response to the volume of requests we've received from investors to understand more about this and speak with Tui and Larry about this topic. So that's what we're trying to design today for. All right? So let me read a quick safe harbor, and then I'll hand it over. So comments made on this call today may include forward-looking statements regarding, among other things, our financial results, products, customer demand, operations, macroeconomic and geopolitical conditions.

Speaker Change: But we'd like for you to take advantage of the access with Thuy and Larry and Howard today and really focus the conversation around go-to-market.

Speaker Change: In addition, we've invited all of our sell-side analysts to participate and join on this call, but they've been asked to let the buy-side lead Q&A. This is really in response to the volume of requests we've received from investors to understand more about this and speak with Tui and Larry about this topic.

Speaker Change: So that's what we're trying to design today for.

Speaker Change: I'll jump back in line.

Speaker Change: So that's what we're trying to design today for. All right. So let me read a quick safe harbor and then I'll hand it over. So

Speaker Change: All right.

Speaker Change: Thanks guys.

Speaker Change: I think we've talked before about how reaching the long tail is less efficient, and you guys made comments at the start of the year around doubling down on the larger GC market.

Speaker Change: I guess first question is, should we read this as a continuation of the prioritization of upmarket over downmarket?

Speaker Change: Comments made on this call today may include forward-looking statements regarding, among other things, our financial results, products, customer demand, operations, macroeconomic, and geopolitical conditions. You should not rely on forward-looking statements as predictions of future events.

Speaker Change: And then I guess second question is, how the channel fits into all this, i.e.

Matthew Puljiz: You should not rely on forward-looking statements as predictions of future events, and all forward-looking statements are subject to risks, uncertainties, and assumptions that are based on management's current expectations and views as of today, 16 August 2024. So, Tui, why don't you take it off?

Speaker Change: and all four looking statements are subject to risks and certainties and assumptions and are based on management's current expectations and views as of today, August 16, 2024.

Speaker Change: So let me read a quick safe harbor and then I'll hand it over.

Speaker Change: which customer segments are you guys looking for the channel to engage?

Speaker Change: So comments made on this call today may include forward-looking statements regarding, among other things, our financial results, products, customer demand, operations, macroeconomic and geopolitical conditions.

Speaker Change: Sorry about the train.

Speaker Change: Yeah, who wants to go first?

Tooey Courtemanche: All right, Matt. I just want to say thank you to everybody for joining us today. So I am going to talk a little bit before I hand it over to Larry. I just want to take a moment to reiterate some of the thoughts that I've shared with many of you over the last couple of weeks. Specifically, that last year we identified two areas within our go-to-market motion, where we felt that we were leaving growth on the table. So first, we believe that moving to a general manager or a GM model is going to give us an opportunity to support the regions that we operate in today much more effectively. And the one thing I hope that you all understand that is that the industry that we serve, construction, is very localized.

Speaker Change: Ciao.

Speaker Change: Tilley, why don't you take it off?

Speaker Change: You should not rely on forward-looking statements as predictions of future events, and all forward-looking statements are subject to risks and certainties and assumptions and are based on management's current expectations and views as of today, August 16th, 2024.

Speaker Change: All right, let's do Matthew Closs.

Speaker Change: I keep hogging it.

Speaker Change: All right, Matt. And I just want to say thank you to everybody for joining us today. So I am going to talk a little bit before I hand it over to Larry. I just want to take a moment to reiterate some of the thoughts that I've shared with many of you over the last couple of weeks, specifically that last year we identified two areas within our go-to-market motion where we felt that we were leaving growth on the table.

Speaker Change: So Tui, why don't you take it off?

Speaker Change: Can you hear me okay?

Speaker Change: Actually, why don't I just say that, yes, it is definitely an indication that we see a lot of opportunity upmarket. And a lot of the motions that we're talking about are primarily upmarket motions.

Speaker Change: All right, Matt.

Speaker Change: Thank you for your time.

Speaker Change: So, yeah, but Howard, do you want to chime in?

Speaker Change: And I just want to say thank you to everybody for joining us today.

Speaker Change: So I am going to talk a little bit before I hand it over to Larry.

Speaker Change: Um, can you describe for me the the legacy process by which, asks from the customers in the field about a product would make it back to the product team.

Speaker Change: The other thing I'll add is I want to just reiterate just structurally and philosophically, it's important for all three, quote-unquote, segments in terms of upmarket, midmarket, just like it is for all three stakeholders to continue to engage in our platform, for our customers and for Procore to realize the full value of this relationship between Procore and our customers.

Speaker Change: So first, we believe that moving to a general manager or a GM model is going to give us an opportunity to support the regions that we operate in today much more effectively.

Speaker Change: I just want to take a moment to reiterate some of the thoughts that I've shared with many of you over the last couple of weeks, specifically that last year we identified two areas within our go-to-market motion where we felt that we were leaving growth on the table.

Speaker Change: And then to the extent that you're making these go to market changes in the future, how is that intended to accelerate that that connectivity from the client experience in the field back to the product team to make for sure that feedback loop is, Moving quickly.

Speaker Change: So, while the go-to-market piece downmarket is not as efficient as we ultimately want it to be in terms of still being a direct model, the participation is still important.

Speaker Change: And the one thing I hope that you all understand is that the industry that we serve, construction, is very localized. Inside of Procore, we refer to it as hyperlocal, and each country has its unique industry dynamics.

Speaker Change: So first, we believe that moving to a general manager or a GM model is going to give us an opportunity to support the regions that we operate in today much more effectively.

Speaker Change: Yeah, we're going to have three real key feedback loops. One is our customer success team.

Tooey Courtemanche: Inside of Procore, we refer to it as hyperlocal, and each country has its unique industry dynamics. Also, Procore's brand awareness varies by region. You can imagine in the US, most everybody knows Procore's brand, but in the newer markets, it's a different motion. So therefore, we think the go-to-market tactics should be tailored according to those particular markets. So we believe that the consolidation of all local customer-facing employees into a single regional team, under a single regional leader, is the most effective way to address those unique changes in each one of those regions. And then the second area of opportunity we found was we wanted to be able to improve our cross-sell and adoption rates by introducing this new, product specialist role to our sales motion. I'm super proud that over the last few years, we really have grown our product offering considerably.

Speaker Change: And the one thing I hope that you all understand is that the industry that we serve, construction, is very localized.

Speaker Change: And we're really leaning in on making them more technical to make sure that the translation is not lost between what the client said and what the technical team understands.

Speaker Change: Also Procore's brand awareness varies by region. You can imagine in the U.S. most everybody knows Procore's brand, but in the newer markets it's a different motion. So therefore we think the go-to-market tactics should be tailored according to those particular markets.

Unknown Executive: You have joined the meeting as an attendee and will be muted throughout the meeting. This meeting is being recorded.

Speaker Change: Inside of Procore, we refer to it as hyper-local, and each country has its unique industry dynamics.

Unknown Executive: Market announcement that we made a couple weeks ago.

Speaker Change: So we believe that the consolidation of all local customer facing employees into a single regional team under a single regional leader is the most effective way to address those unique changes in each one of those regions.

Unknown Executive: Let me kind of cover the format of the call before we begin.

Unknown Executive: So we're going to have a very brief set of opening remarks.

Unknown Executive: We'll start with the meeting.

Unknown Executive: We'll start with our CEO and then followed by our CRO.

Speaker Change: Also, Procore's brand awareness varies by region.

Unknown Executive: We'll speak for a couple of minutes each.

Speaker Change: And then the second area of opportunity we found was we wanted to be able to improve our cross-sell and adoption rates by introducing this new product specialist role to our sales motion.

Unknown Executive: And then we intend to open up the call for Q&A.

Speaker Change: You can imagine in the US, most everybody knows Procore's brand, but in the newer markets, it's a different motion.

Speaker Change: So therefore, we think the go-to-market tactics should be tailored according to those particular markets. So we believe that the consolidation of all local customer facing employees into a single regional team under a single regional leader is the most effective way to address those unique changes in each one of those regions.

Speaker Change: I'm super proud that over the last few years, we really have grown our product offering considerably. And as we've added new products and a more comprehensive platform offering, we've begun selling to more senior and technical buyer personas.

Unknown Executive: The goal of today is to answer and address as many of your questions and curiosity related to the go-to-market announcement a couple of weeks ago.

Tooey Courtemanche: And as we've added new products and a more comprehensive platform offering, we've begun selling to more senior and technical buyer personas... So these Procore technical specialists are going to be able to speak the language of these new buyers, and they're going to be able to support our AEs to cover the full breadth of our platform. And they're going to be able to help improve our ability to drive adoption and product cross-sell. So, these two improvements are a natural part of growth, as most of you probably can understand, and they're not uncommon for companies at our scale. But I deeply believe that this is what's best for Procore and our customers and our shareholders. And frankly, I am firmly and very much deeply excited about reaping the benefits of this new model, which I'm super excited about.

Speaker Change: As we think about getting into out multiple years, we obviously will start to look at how to get more efficient there.

Speaker Change: It could be through partners downmarket.

Speaker Change: That's something that we will explore.

Speaker Change: So our frontline teams are becoming more technical to not only make that feedback loop more efficient, but also more effective and clear.

Speaker Change: It could be through a combination of that in pricing and packaging.

Speaker Change: So, these Procore technical specialists are going to be able to speak the language of these new buyers, and they're going to be able to support our AEs to cover the full breadth of our platform, and they're going to be able to help improve our ability to drive adoption and product cross-sell.

Speaker Change: Number one.

Speaker Change: But the important thing is that it's efficiency that we're looking for across the board.

Speaker Change: And they're going to be able to support our AEs to cover the full breadth of our platform.

Speaker Change: Number two is our constant interaction at bringing our planning sessions and our account plans.

Speaker Change: So we bring back all of our account plans from from the clients, and we validate them with our friends in product and engineering say, this is what we're hearing.

Speaker Change: And I'll tell you, downmarket is not the only place I'm looking for.

Unknown Executive: Our ask is that all questions be centered around the go-to-market announcement and limit your questions to just that topic.

Speaker Change: And they're going to be able to help improve our ability to drive adoption and product, So these two improvements are a natural part of growth, as most of you probably can understand, and they're not uncommon for companies at our scale.

Speaker Change: This is what we're seeing the real take up.

Speaker Change: Okay, let's do one more.

Speaker Change: Kunal.

Speaker Change: So, these two improvements are a natural part of growth, as most of you probably can understand, and they're not uncommon for companies at our scale.

Speaker Change: I think you're on mute.

Speaker Change: But I deeply believe that this is what's best for Procore and our customers and our shareholders.

Speaker Change: This is what's exciting.

Speaker Change: But I deeply believe that this is what's best for Procore and our customers and our shareholders. And frankly, I am firmly and very much deeply excited about reaping the benefits of this new model, which I'm super excited about.

Speaker Change: And frankly, I am firmly and very much deeply excited about reaping the benefits of this new model, which I'm super excited about.

Speaker Change: This is where they don't get an understanding.

Speaker Change: I also want you to all understand that we are not entering this next chapter blindly. We have seen this model succeed with a number of enterprise customers that we've piloted this on already. And we know that when we support customers with a tailored approach and the ample technical resources that they need, that we experience significant improvement and retention and expansion.

Speaker Change: Is Procore Financials aligned to do you have to replace ERP?

Speaker Change: Kunal, are you there?

Tooey Courtemanche: I also want you to all understand that we are not entering this next chapter blindly. We have seen this model succeed with a number of enterprise customers that we've piloted this on already. And we know that when we support customers with a tailored approach and the ample technical resources that they need, that we experience significant improvement in retention and expansion rates. So I want to give you a couple examples. So one major customer, who was paying us six figures, told us that they were feeling that Procore was getting to be too expensive for them. So we applied a technical overlay, a bunch of technical folks, to this account to help them realize the full value of Procore. And this customer ultimately added $100 million in volume, and they bought 3 additional products, including Analytics, Premier Support, and Financials.

Speaker Change: We get all those answers together through that planning process, but via the account plan is the other thing.

Speaker Change: And then thirdly, we do it every month at the well, we're doing it almost every week right now, between the product and the revenue teams and the marketing teams all getting together on meetings for almost eight hours per week, and really reviewing everything that's coming in the pike and making sure we validated with the market set.

Speaker Change: So I'd say that it's the technical customer success teams, and they're becoming more technical.

Speaker Change: Still on mute.

Speaker Change: Number two, it's manifested in the account plan, through the empirical conversations we have our clients, and then those weekly, and hopefully soon will be monthly cadences around those sessions directly with all of us, and the product leaders, the revenue leaders that go to market teams, the general managers, everybody on there having made sure that all the voices are heard, and that we've amalgamated the product roadmap in the future state that's aligned to those needs.

Speaker Change: And we know that when we support customers with a tailored approach and the ample technical resources that they need, that we experience significant improvement in retention and expansion rates.

Speaker Change: So I want to give you a couple examples.

Speaker Change: Yeah, let me give you an example, which now that we have these overlay teams that we're building, when you put an overlay team, and that is very, very adept at understanding financials, as an example, all the way through pay, and they're talking to a CFO about how they're going to be doing invoicing, right?

Speaker Change: All right, we will Kunal, if you come back around, we'll try to squeeze you in.

Speaker Change: They're so deep in their knowledge of that particular area of the product line, that they are bringing back those teams are bringing back much more directed and much more cogent feedback, because they're, they're, they're, And not to put anything on the people that were more the generalists, but the generalists just weren't able to do that as effectively.

Speaker Change: Let me do one more that has been read the tight ship.

Speaker Change: So I want to give you a couple of examples. So one major customer who was paying us six figures told us that they were feeling that Procore was getting to be too expensive for them. So we applied a technical overlay, a bunch of technical folks to this account to help them realize the full value of Procore.

Speaker Change: So one major customer who was paying us six figures told us that they were feeling that Procore was getting to be too expensive for them. So we applied a technical overlay, a bunch of technical folks to this account to help them realize the full value of Procore. And this customer ultimately added $100 million in volume, and they bought three additional products, including analytics, premier support, and financials.

Speaker Change: So we see this as kind of a direct line of getting feedback back to the organization way more effectively and efficiently than we've ever done.

Speaker Change: Thank you.

Speaker Change: That's helpful.

Unknown Executive: Any other financial questions around margins or cash flow or anything to that effect, the IR team or Howard, we're happy to address that at a separate time.

Speaker Change: Sure.

Speaker Change: and this customer ultimately added a hundred million dollars in volume and they bought three additional products including analytics, premier support and financials.

Speaker Change: All right, let's go to Andrew next, please.

Speaker Change: Hey guys, can you hear me okay?

Tooey Courtemanche: Also, just recently this week, we were meeting with one of the largest contractors in the Southeast, and they, too, were excited to learn about some of our product offerings that they had not been aware of. And they actually changed course on moving with their safety product, that they were going to go with an outside vendor to come to Procore after that experience. So this is just a couple examples that gives me the confidence that applying this approach broadly is going to be super positive and healthy for Procore. Sorry, I got a truck going by. So I also want you all to understand that as we go through this change, we fully understand that this is not a growth at all cost exercise at all.

Speaker Change: Also, just recently this week, we were meeting with one of the largest contractors in the Southeast, and they, too, were excited to learn about some of our product offerings that they had not been aware of.

Speaker Change: Yeah, sure.

Speaker Change: It's like five o'clock on the East Coast.

Unknown Executive: But we'd like for you to take advantage of the access with two Ian Larry and Howard today and really focus the conversation around go-to-market.

Speaker Change: Thanks so much for doing this.

Speaker Change: So I know they want to get going.

Speaker Change: Also, just recently this week, we were meeting with one of the largest contractors.

Speaker Change: I just had one question on maybe outside of some of the personnel decisions that are being made.

Speaker Change: There was a question submitted that I thought would be interesting to share the IR teams to getting this quite a bit, actually, which is, how are you thinking about price and product bundle packaging?

Speaker Change: I guess given that the goal is to sell the broader Procore platform and the mesh of how these products work together, and that's really where you get the most, RY and I think we said that, you know, perhaps selling 11 to 14, Excuse, it's gotten a little unwieldy for some of our AEs.

Speaker Change: Is that an area where you will be experimenting with as well as part of, Announcement.

Speaker Change: in the Southeast, and they, too, were excited to learn about some of our product offerings that they had not been aware of. And they actually changed course on moving with their safety product, that they were going to go with an outside vendor to come to Procore after that experience.

Unknown Executive: In addition, we've invited all of our cell site analysts to participate and join on this call, but they've been asked to let the buy side believe Q&A.

Speaker Change: I guess, do you see any situation where we need to repackage or reprice or bundle certain solutions to help customers get more RRIs?

Speaker Change: And they actually changed course on moving with their safety product that they were going to go with an outside vendor to come to Procore after that experience.

Speaker Change: Is that part of the process here or do we feel like the?

Speaker Change: Product pricing packaging is pretty set and it's just a matter of putting the right people in place.

Unknown Executive: This is really in response to the volume of requests we've received from investors to understand more about this and speak with two Ian Larry about this topic.

Speaker Change: Howard, do you want to start with that?

Speaker Change: So I this is just a couple examples that gives me the confidence that applying this approach broadly is going to be super positive and healthy for Procore.

Speaker Change: Yeah, yeah, sure.

Speaker Change: Hey, Matt, I think we already answered that one.

Speaker Change: So, this is just a couple of examples that gives me the confidence that applying this approach broadly is going to be super positive and healthy for parole court. Sorry, I've got to...

Unknown Executive: So that's what we're trying to design today for.

Unknown Executive: So when we read a quick state harbor and then I'll hand it over.

Speaker Change: Sorry, I got to, truck going by.

Speaker Change: So thanks, Andrew.

Speaker Change: Yeah, we did.

Speaker Change: So I also want you all to understand that as we go through this change, we fully understand that this is not a growth at all cost exercise at all.

Speaker Change: So the short answer is yes.

Speaker Change: Yeah, so let's pull another one.

Speaker Change: truck going by.

Unknown Executive: So comments made on this call today may include forward looking statements regarding among other things our financial results, products, customer demand, operations, macroeconomic and geopolitical conditions.

Speaker Change: So, I also want you all to understand that as we go through this change, we fully understand that this is not a growth at all cost exercise at all. Our focus is on deepening our relationships with our customers in order to drive the most value for them and ultimately for Procore and our shareholders.

Speaker Change: Pricing and packaging is something that we consistently and constantly look at to see what best serves our customers.

Speaker Change: Okay.

Unknown Executive: You should not rely on for looking statements as predictions of future events and all for looking statements or subjects to risks and certain needs and assumptions that are based on management's current expectations and views as of today, August 16th, 2024.

Speaker Change: Our focus is on deepening our relationships with our customers in order to drive the most value for them and ultimately for Procore and our shareholders.

Tooey Courtemanche: Our focus is on deepening our relationships with our customers in order to drive the most value for them and ultimately for Procore and our shareholders. But I assure you that we care deeply about balancing growth with fiscal responsibility. You know, most of the investors I've had the chance to talk to over the last couple of weeks really understand what we're doing and why we're doing it, but most of the questions have been around timing. So the last thing I want to address before I hand it back over and get Larry to talk to you all is the why now question. So first, this plan has been in the works for quite some time, and I personally have been chomping at the bit to get this new operating model in place so that we can be ready for the inevitable upswing when the market comes back.

Speaker Change: But I assure you that we care deeply about balancing growth with fiscal responsibility.

Unknown Executive: So two weeks, why don't you take it off?

Speaker Change: But I assure you that we care deeply about balancing growth with fiscal responsibility.

Speaker Change: You know, most of the investors I've had the chance to talk to over the last couple of weeks really understand what we're doing and why we're doing it. But most of the questions have been around timing.

Speaker Change: Remember, we did something like this at the lower end of the market about a year and a half, maybe two years ago. That was quite successful at that end of the market.

Speaker Change: You know, most of the investors I've had the chance to talk to over the last couple weeks really understand what we're doing and why we're doing it, but most of the questions have been around timing. So the last thing I want to address before I hand it back over and get Larry to talk to you all is the why now question.

Unknown Executive: All right, Matt.

Speaker Change: So last thing I want to address before I hand it back over and get Larry to talk to you all is the why now question. So first, this plan has been in the works for quite some time. And I personally have been chomping at the bit to get this new operating model in place so that we can be ready for the inevitable upswing when the market comes back.

Speaker Change: Let's see Larry up.

Unknown Executive: And I just want to say thank you to everybody for joining us today.

Speaker Change: And then as we continue to add more products to our portfolio and add products throughout the construction lifecycle, this is constantly something that's on our minds.

Speaker Change: I want everyone to hear more from Larry.

Speaker Change: Remember, we also talked about in the last couple of quarters, how we're thinking about the needs of the enterprise space, where the customizability of the of the platform is something that's important for enterprise customers, and then making sure that we make progress along those lines.

Speaker Change: So it's a combination of all those different things in terms of making progress on our product, making sure we listen to our customers and then packaging it up that makes sense for what we're trying to do and meet them on their court.

Speaker Change: Well, Larry, there's one that came in on writing too, which is like, how do you want to be evaluated through all this?

Speaker Change: So first, this plan has been in the works for quite some time, and I personally have been chomping at the bit to get this new operating model in place so that we can be ready for the inevitable upswing when the market comes back.

Unknown Executive: So I am going to talk a little bit before I handed over Larry.

Speaker Change: And, you know, I had the opportunity to discuss this plan with my board of directors last December.

Tooey Courtemanche: And you know, I had the opportunity to discuss this plan with my board of directors last December, and I came to the conclusion that it wasn't the right time to make that change. I wanted to make sure that we had our next CRO in place before we made that change. So, I focused my search on finding someone with experience in leading and operating at a scale that, really the scale that Procore aspired to achieve. And you've heard me talk about this with my other leaders. And after an extensive search, it certainly became clear to me that Larry was the ideal candidate, yes, Larry, you are, to lead us through this transition. And, look, he demonstrates success in scale at large global technology companies. He's shown that he can develop leadership under him, and he's instilled the right go-to-market processes and discipline.

Speaker Change: And, you know, I had the opportunity to discuss this plan with my board of directors last December.

Unknown Executive: I just want to take a moment to reiterate some of the thoughts that I've shared with many of you over the last couple of weeks. Specifically that last year we identified two areas within our go-to-market motion, where we felt that we were leaving growth on the table.

Speaker Change: And I came to the conclusion that it wasn't the right time to make that change.

Unknown Executive: So first we believe that moving to a general manager or a GM model is going to give us an opportunity to support the reasons that we operate in today much more effectively.

Speaker Change: And I came to the conclusion that it wasn't the right time.

Unknown Executive: And the one thing I hope that you all understand that is that the industry that we serve construction is very localized inside approach where we refer to as hyper local and each country has its unique industry dynamics.

Speaker Change: I wanted to make sure that we had our next CRO in place before we made that change.

Speaker Change: to make that change. I wanted to make sure that we had our next CRO in place.

Speaker Change: So I focused my search on finding someone with experience in leading and operating this scaled up. Really the scale that Procore aspired to achieve.

Speaker Change: before we made that change. So I focused my search on finding someone with experience in leading and operating at a scale that, really the scale that Procore aspired to achieve. And you've heard me talk about this with my other leaders.

Unknown Executive: Also a pro course brand awareness varies by region.

Speaker Change: And you've heard me talk about this with my other leaders.

Speaker Change: And after an extensive search, it certainly became clear to me that Larry was the ideal candidate.

Speaker Change: And after an extensive search, it certainly became clear to me that Larry was the ideal candidate. Yes, Larry, you are.

Speaker Change: Yes, Larry, you are, to lead us through this transition.

Unknown Executive: You can imagine the US most everybody knows pro course brand, but in the newer markets, it's a different motion.

Speaker Change: And look, he demonstrates success in scale at large global technology companies.

Larry: to lead us through this transition.

Unknown Executive: So therefore we think the go-to-market tactics should be tailored according to those particular markets.

Larry: He's shown that he can develop leadership under him and he's instilled the right go-to-market processes and discipline. And all of this, I firmly believe is going to benefit us in this next chapter of growth for Procore.

Unknown Executive: So we believe that the consolidation of all local customer facing employees into a single regional team under a single regional leader is the most effective way to address those unique changes in each one of those regions.

Speaker Change: he's shown that he can develop leadership under him, and he's instilled the right go-to-market processes and discipline. And all of this, I firmly believe, is gonna benefit us in this next chapter of growth for Procore.

Tooey Courtemanche: And all of this, I firmly believe, is going to benefit us in this next chapter of growth for Procore. So before I hand it over, I just want to leave you all with my high level of confidence. Larry's going to help propel Procore to $2 billion in revenue and beyond, while growing free cash flow per share. With that, I've interrupted this too much, and I want Larry to, you know, talk to you all himself. So with that, I'm going to hand it over to you, Larry.

Speaker Change: So before I hand it over, I just wanna leave you all with my high level of confidence.

Unknown Executive: And then the second area of opportunity we found was we wanted to be able to improve our cross sell and adoption rates by introducing this new product specialist role to our sales motion.

Unknown Executive: I'm super proud that over the last few years we really have grown our product offering considerably. And as we've added new products and a more comprehensive platform offering, we began selling to more senior and technical buyer personas.

Speaker Change: So, before I hand it over, I just want to leave you all with my high level of confidence that Larry's going to help propel Procore to $2 billion in revenue and beyond while growing free cash flow per share.

Speaker Change: Larry's gonna help propel Procore to 2 billion in revenue and beyond while growing free cashflow per share.

Unknown Executive: So these pro core technical specialists are going to be able to speak the language of these new buyers and they're going to be able to support our AEs to cover the full breadth of our platform.

Speaker Change: With that, I've interrupted this too much and I want Larry to talk to you all himself.

Speaker Change: With that, I've interrupted this too much, and I want Larry to talk to you all himself, so with that, I'm going to hand it over to you, Larry.

Speaker Change: So with that, I'm gonna hand it over to you, Larry.

Speaker Change: Yeah, it's exactly what they talked about.

Speaker Change: Hey, Tui, first of all, thank you.

Speaker Change: Okay, got it.

Speaker Change: I like it in a very holistic level of making sure that this is a not a go-to-market modification or evolution or transformation.

Howard Fu: Hey, Tui. First of all, thank you. I very much appreciate that. And I just want to tell everyone on the call what an honor and pleasure it is for me to have an opportunity to speak to you today as well. So thank you for giving me your time. And as Tui mentioned, maybe I'll just do a quick overview of a little bit of my background, and then maybe some observations around me being at Procore and what I've observed so far. Why do the scope, evolution of the go-to-market and what specifics around it? And then, talk a little bit about the milestones, inch by inch, of what we're doing along the way to make sure that it's on the successful glide path that we expect and the associated, success metrics with it.

Larry Stack: Hey, Tui. First of all, thank you. I very much appreciate that. And I just want to tell everyone on the call what an honor and pleasure it is for me to have an opportunity to speak to you today as well. So thank you for giving me your time. And as Tui mentioned, maybe I'll just do a quick overview of a little bit of my background, and then maybe some observations around me being at Procore and what I've observed so far. Why do the scope, evolution of the go-to-market and what specifics around it? And then, talk a little bit about the milestones, inch by inch, of what we're doing along the way to make sure that it's on the successful glide path that we expect and the associated, success metrics with it.

Speaker Change: I very much appreciate that.

Larry: Hey Thuy, first of all, thank you. I very much appreciate that and I just want to tell everyone on the call what an honor and pleasure it is for me to have an opportunity to speak to you today as well. So thank you for giving me your time.

Larry: And I just wanna tell everyone on the call what an honor and pleasure it is for me to have an opportunity to speak to you today as well.

Larry: That's fair.

Larry: It is a corporate initiative to continue to do it.

Larry: And I guess if I, Think about like the other piece, which is this sort of value based selling, I think across all of software, there's been a greater need to articulate ROI and total cost of ownership.

Unknown Executive: And they're going to be able to help improve our ability to drive adoption and product cross.

Larry: So thank you for giving me your time.

Larry: So I would love to be evaluated by how well we go in and how well we retain our clients, how well we increase the customer experience, how well we upsell and cross-sell and become that viable customer, intimate customer advisor.

Larry: And as Tui mentioned, maybe I'll just do a quick overview of a little bit of my background and then maybe some observations around me being at Procore and what I've observed so far.

Larry: You know, when you're selling not just to a CFO, but really anyone in the procurement side.

Unknown Executive: Council.

Speaker Change: And as Tui mentioned, maybe I'll just do a quick overview of a little bit of my background and then maybe some observations around me being at Procore and what I've observed so far.

Speaker Change: Why do the evolution of the go-to-market and what specifics around it?

Speaker Change: Why do the evolution of the go-to-market and with specifics around it?

Speaker Change: And then talk a little bit about the milestones inch by inch of what we're doing along the way to make sure that it's on the successful glide path that we expect and the associated success metrics with it.

Speaker Change: And then talk a little bit about the milestones, inch by inch, of what we're doing along the way to make sure that it's on the successful glide path that we expect and the associated

Speaker Change: And then really just talk about some lessons learned around executing the change.

Howard Fu: And then really just talk about some lessons learned around executing the change. I hope that will give you just a little bit more flavor about me and some of the thoughts that we had behind it. And then we'll drill into any detailed questions that you want. And once again, honored to take this opportunity to speak to you. So I'll jump into my background. I have about 25 years in the IT and SaaS business overall. I did three global transformations during that time, and I'll just give you a quick flavor on each one of them. The first one's at Accenture. We were five global operating groups combined to one, and we wanted to go from $5 billion to $7 billion in the health and public service, where I was the chief sales officer.

Larry Stack: And then really just talk about some lessons learned around executing the change. I hope that will give you just a little bit more flavor about me and some of the thoughts that we had behind it. And then we'll drill into any detailed questions that you want. And once again, honored to take this opportunity to speak to you. So I'll jump into my background. I have about 25 years in the IT and SaaS business overall. I did three global transformations during that time, and I'll just give you a quick flavor on each one of them. The first one's at Accenture. We were five global operating groups combined to one, and we wanted to go from $5 billion to $7 billion in the health and public service, where I was the chief sales officer.

Speaker Change: success metrics with it. And then really just talk about some lessons learned around executing the change. I hope that will give you just a little bit more flavor about me and some of the thoughts that we had behind it. And then, we'll drill into any detailed questions that you want. And I'm once again honored to take this opportunity to speak to you. So, I'll jump into my background. I have about 25 years in the IT and SAAS business overall.

Unknown Executive: So these two improvements are a natural part of growth as most of you probably can understand and they're not uncommon for companies at their scale, but I deeply believe that this is what's best for Procore and our customers and our shareholders.

Speaker Change: I hope that will give you just a little bit more flavor about me and some of the thoughts that we had behind it.

Speaker Change: Then we'll drill into any detailed questions that you want.

Speaker Change: And I'm once again, honored to take this opportunity to speak to you.

Speaker Change: So I'll jump into my background.

Speaker Change: Do you guys have that laid out and quantified?

Speaker Change: That's exactly the way I would love to do that because what I would see is that if I'm deep in each of these clients, and I'm expanding in each of these clients, and I'm articulating value every day to each of these clients, that they're going to see me as a value partner, and they're going to continue to build with me, and renewal rates, higher revenues, everything comes with that fundamental piece.

Speaker Change: I have about 25 years in the IT and SaaS business overall.

Speaker Change: I did three global transformations during that time. And I'll just give you a quick flavor on each one of them.

Speaker Change: I did three global transformations during that time. And I'll just give you a quick flavor on each one of them. The first one's at Accenture. We were five global operating groups.

Speaker Change: The first one's at Accenture.

Speaker Change: And I guess, like, is it understood across the Salesforce how to do that across each of the products?

Speaker Change: We were a five global operating groups combined to one.

Speaker Change: It seems like it's fairly well set on project management.

Speaker Change: I just want to make sure that there's good, like, ROI case studies and explanations and calculators and everything for the other products, or if that's something that needs to be worked in.

Speaker Change: And we wanted to go from 5 billion to 7 billion in the health and public service where I was the chief sales officer.

Speaker Change: I would tell you that in the enablement process that we just went through, we started that in enablement 1.0, which we executed in April and got everyone certified by June.

Speaker Change: combined to one and we wanted to go from five billion to seven billion in the health public service where I was the chief sales officer and we needed to leave the United States and go into other markets and by doing that what we had to do is set up local general management markets and play very specific Accenture stakes into those specific regions so that we can make sure that we were local mattered and we could really start to understand and address those key issues.

Speaker Change: In 2.0, we're much more to that, an ROI associated with each product.

Unknown Executive: And frankly, I am firmly firmly and very much deeply excited about reaping the benefits of this new model, which I'm super excited about.

Howard Fu: We needed to leave the United States and go into other markets. By doing that, what we had to do is set up local general management markets and place very specific Accenture stakes into those specific regions, so that we can make sure that we were local mattered, and we could really start to understand and address those key issues. We also had to do an array of global enablement in that area. It was to set the goal, as I mentioned, to go from $5 billion to about $7 billion, but also to move the stock price from about $43 a share at the time to about 72, 73 was our goal. Now it's at 388, so I hope we were successful in that area, and I can talk about that at any level as well.

Speaker Change: And we needed to lead the United States and go into other markets.

Larry Stack: We needed to leave the United States and go into other markets. By doing that, what we had to do is set up local general management markets and place very specific Accenture stakes into those specific regions, so that we can make sure that we were local mattered, and we could really start to understand and address those key issues. We also had to do an array of global enablement in that area. It was to set the goal, as I mentioned, to go from $5 billion to about $7 billion, but also to move the stock price from about $43 a share at the time to about 72, 73 was our goal. Now it's at 388, so I hope we were successful in that area, and I can talk about that at any level as well.

Speaker Change: And by doing that, what we had to do is set up local general management markets and play very specific Accenture stakes into those specific regions so that we can make sure that we were local mattered and we can really start to understand and address those key issues.

Unknown Executive: I also want you to all understand that we are not entering this next chapter blindly. We have seen this model succeed with a number of enterprise customers that we've piloted this on already. And we know that when we support customers with a tailored approach and the ample technical resources that they need that we experience significant improvement and retention and expansion rates.

Unknown Executive: So I want to give you a couple examples.

Unknown Executive: So one major customer who was paying a six figures told us that they were feeling that Procore was getting to be too expensive for them.

Unknown Executive: So we apply to technical overlay a bunch of technical folks to this account to help them realize the full value of Procore.

Speaker Change: We also had to do an array of global enablement in that area.

Speaker Change: We also had to do an array of global enablement in that area. And it was to save the gold, as I mentioned, to go from $5 billion to about $7 billion, but also to move the stock price from about $43 a share at the time to about $72, $73 was our goal. Now it's at $388, so I hope we were successful in that area. And I could talk about that at any level as well. The second one that comes to mind is Hewlett-Packard.

Unknown Executive: And this customer ultimately added a hundred million dollars in volume. And they bought three additional products, including analytics, premier support and financials.

Speaker Change: And it was to save the gold, as I mentioned, to go from $5 billion to about $7 billion, but also to move the stock price from about $43 a share at the time to about $72, $73 was our goal.

Speaker Change: Now it's at $388, so I hope we were successful in that area.

Unknown Executive: Also just recently this week, we were meeting with one of the largest contractors in the southeast. And they too were excited to learn about some of our product offerings that they had not been aware of.

Speaker Change: And I could talk about that at any level as well.

Unknown Executive: And they actually changed course on moving with their safety product that they were going to go with an outside vendor to come to Procore after that experience.

Howard Fu: The second one that comes to mind is Hewlett-Packard. Mark Hurd bought EDS, where I came from, and he basically said to us, "You need to be the new pull-through channel for all the products across a $120, $120 billion dollar enterprise." So we used to have a world-class, you know, offerings with other products, Dell, things of that nature. He said, "We have to go all HP and become that product." So we needed a transformation in the go-to-market. We needed to go in and make sure that we understood the enablement, the interconnectivity, and the symbiotic outcomes, and really create a consultative selling process. So when that transformation was consultative selling, it was really global enablement and connecting all those disparate products together to really articulate a value-based outcome to our clients.

Speaker Change: The second one that comes to mind is Hewlett-Packard.

Larry Stack: The second one that comes to mind is Hewlett-Packard. Mark Hurd bought EDS, where I came from, and he basically said to us, "You need to be the new pull-through channel for all the products across a $120, $120 billion dollar enterprise." So we used to have a world-class, you know, offerings with other products, Dell, things of that nature. He said, "We have to go all HP and become that product." So we needed a transformation in the go-to-market. We needed to go in and make sure that we understood the enablement, the interconnectivity, and the symbiotic outcomes, and really create a consultative selling process. So when that transformation was consultative selling, it was really global enablement and connecting all those disparate products together to really articulate a value-based outcome to our clients.

Unknown Executive: So this is just a couple examples that gives me the confidence that applying this approach broadly is going to be super positive and healthy for Procore.

Speaker Change: Mark Hurd bought EDS, where I came from, and he basically said to us, you need to be the new pull-through channel for all the products across the $120 billion enterprise.

Speaker Change: Mark Hurd bought EDS, where I came from, and he basically said to us you need to be the new pull-through channel for all the products across the $120 billion enterprise.

Unknown Executive: Sorry, I got a truck going by.

Unknown Executive: So I also want you all to understand that as we go through this change, we fully understand that this is not a growth at all cost exercise at all.

Speaker Change: So we used to have a world-class offerings with other products, Dell, things of that nature.

Speaker Change: So we used to have a world-class, you know,

Speaker Change: Craig Courtemanche, Matthew Puljiz, Matthew Puljiz, Matthew Puljiz, Matthew Puljiz, Matthew

Speaker Change: He said, we have to go all HP and become that product.

Speaker Change: So we needed a transformation in the go-to-market.

Speaker Change: We needed to go in and make sure that we understood the enablement, the interconnectivity and symbiotic outcomes, and really create a consultative selling process.

Speaker Change: outcomes and really create a consultative selling process.

Speaker Change: So when that transformation was consultative selling, it was really global enablement and connecting all those disparate products together to really articulate a value-based outcome to our clients.

Unknown Executive: Our focus is on deepening our relationships with our customers in order to drive the most value for them and ultimately for Procore and our shareholders.

Unknown Executive: But I assure you that we care deeply about balancing growth with fiscal responsibility.

Unknown Executive: You know, most of the investors have had the chance to talk to you of the last couple of weeks really understand what we're doing and why we're doing it.

Speaker Change: And he wanted about $5 billion of additional revenue from that, and also to make sure that the services unit within HP was the number one pull-through of all HP products.

Howard Fu: And he wanted about $5 billion of additional revenue from that, and also to make sure that the services unit within HP was the number one pull-through, of all HP products, and it was. So we were successful in that area. I think the most remaining one, though, is Red Hat. When I went to Red Hat, we were about $3 billion. We were growing in about the mid-teens, but we started seeing it slipping and going down into, you know, the single digits. And we wanted to get it back up into 20% and above that in, year-over-year revenue growth. So what we had to do is a couple of things, and the first thing we had to do was make sure that we started to go into new markets.

Larry Stack: And he wanted about $5 billion of additional revenue from that, and also to make sure that the services unit within HP was the number one pull-through, of all HP products, and it was. So we were successful in that area. I think the most remaining one, though, is Red Hat. When I went to Red Hat, we were about $3 billion. We were growing in about the mid-teens, but we started seeing it slipping and going down into, you know, the single digits. And we wanted to get it back up into 20% and above that in, year-over-year revenue growth. So what we had to do is a couple of things, and the first thing we had to do was make sure that we started to go into new markets.

Speaker Change: And he wanted about $5 billion of additional revenue from that, and also to make sure that the services unit within HP was the number one pull-through of all HP products, and it was.

Speaker Change: And it was.

Speaker Change: So we were successful in that area.

Speaker Change: So we were successful in that area. I think the most germane one, though, is Red Hat.

Speaker Change: When I went to Red Hat, we were about $3 billion. We were growing in about the mid-teens, but we started seeing it slipping and going down into the single digits. And we wanted to get it back up into the 20% and above that in year-over-year revenue growth. So what we had to do is a couple of things.

Speaker Change: I think the most remaining one, though, is Red Hat.

Speaker Change: When I went to Red Hat, we were about $3 billion. We were growing in about the mid-teens, but we started seeing it slipping and going down into, you know, the single digits. And we wanted to get it back up into the 20% and above that in year-over-year revenue growth.

Speaker Change: And the first thing we had to do was make sure that we started to go into new markets. We were pretty saturated with one single product.

Speaker Change: So what we had to do is a couple of things.

Howard Fu: We were pretty saturated with one single product, and we needed to move from a transactional-based sales force, specifically around what we call Red Hat Enterprise Linux, and broaden that into cross-sell and upsell opportunities with our other products and our mix. So we had to go into new markets, and we had to go in and follow our clients into the federal space and get all the certification. And we had to really create a very strong ecosystem or a set of partners that could help us enforce multiply. So that, to me, was extremely germane in the overall execution, when I started to talk to Tui. That's a little bit about my background. Happy to go into any more detail that you would like, but really I'd like to jump in, if you're okay, to really since being at Procore.

Larry Stack: We were pretty saturated with one single product, and we needed to move from a transactional-based sales force, specifically around what we call Red Hat Enterprise Linux, and broaden that into cross-sell and upsell opportunities with our other products and our mix. So we had to go into new markets, and we had to go in and follow our clients into the federal space and get all the certification. And we had to really create a very strong ecosystem or a set of partners that could help us enforce multiply. So that, to me, was extremely germane in the overall execution, when I started to talk to Tui. That's a little bit about my background. Happy to go into any more detail that you would like, but really I'd like to jump in, if you're okay, to really since being at Procore.

Unknown Executive: But most of the questions have been around timing.

Unknown Executive: So last thing I want to address before I hand it back over and get Larry to talk to you all is the why now question.

Speaker Change: We needed to move from a transactional-based sales force.

Unknown Executive: So first, this plan has been in the works for quite some time and I personally have been chopping at the bit to get this new operating model in place.

Speaker Change: specifically around what we call Red Hat Enterprise Linux.

Unknown Executive: So that we can be ready for the inevitable up swing when the market comes back.

Speaker Change: and broaden that into cross-sell and up-sell opportunities with our other products.

Unknown Executive: And you know, I had the opportunity to discuss this plan with my board of directors last December.

Unknown Executive: And I came to the conclusion that it wasn't the right time to make that change.

Speaker Change: And the first thing we had to do is make sure that we started to go into new markets. We were pretty saturated with one single product.

Speaker Change: and our mix. We had to go into new markets and we had to go in and follow our clients into the federal space and get all the certification. And we had to really create a very strong ecosystem or a set of partners that could help us enforce multiply.

Unknown Executive: I wanted to make sure that we had our next CR own place before we made that change.

Unknown Executive: So I focused my search on finding someone with experience in leading and operating the scale that really the scale that Procore aspired to achieve and you've heard me talking about this with my other leaders.

Unknown Executive: And after an extensive search, it certainly became clear to me that Larry was the ideal candidate.

Unknown Executive: Yes, Larry, you are.

Speaker Change: So that, to me, was extremely germane in the overall execution when I started to talk to Tewi.

Unknown Executive: To lead us through this transition and look, he demonstrates success in scale at large global technology companies.

Speaker Change: That's a little bit about my background. Happy to go into any more detail that you would like.

Speaker Change: We needed to move from a transactional-based sales force, specifically around what we called Red Hat Enterprise Linux, and broaden that into cross-sell and upsell opportunities with our other products and our mix.

Speaker Change: You know, for example, you know, if you use Procore Pay, you're able to reduce SG&A, we think you can get to an MPB faster and IRR here.

Speaker Change: So I would love to be, you know, say, I would love my legacy here to be as well, is that we really brought huge value to the client with Procore's products and capabilities.

Speaker Change: Things of that nature were really driving into the next level of enablement, which is 2.0, and it's out there.

Speaker Change: We're actually going through those courses now.

Speaker Change: But really, I'd like to jump in if you're okay to really since being a pro core.

Howard Fu: You know, what I try to do is really go in and thoughtfully hear. So I met with 39 clients. I did 27 site visits. You'll see myself back there. It's not that dirty, but I'm working on it. And really hundreds of associates I met with. And what I heard resounding was that they love our products, our clients. It was so cool to see that. But what they wanted to do was see the interconnectability of our products. They wanted to see that unified intelligent platform and really understand how we go from shovel all the way through ongoing operations, and really bring that to life and show them the value of that connectivity between those products.

Larry Stack: You know, what I try to do is really go in and thoughtfully hear. So I met with 39 clients. I did 27 site visits. You'll see myself back there. It's not that dirty, but I'm working on it. And really hundreds of associates I met with. And what I heard resounding was that they love our products, our clients. It was so cool to see that. But what they wanted to do was see the interconnectability of our products. They wanted to see that unified intelligent platform and really understand how we go from shovel all the way through ongoing operations, and really bring that to life and show them the value of that connectivity between those products.

Speaker Change: So I do see 2.0 answering that question that you raised around those clear, demonstrable ROI and metrics that matter for our clients.

Speaker Change: I have to say this because I'm the CFO.

Speaker Change: You know, what I try to do is really go in and thoughtfully...

Speaker Change: here. So I met with 39 clients. I did 27 site visits.

Speaker Change: The other thing I'll add on top of that, Andrew, is, you know, one of the things with product specialists with a focus with the general managers in each one of these parts of our business, it allows us to have better visibility and a better understanding, really, of the data that's within our customers' profiles within their instance of Procore.

Speaker Change: Larry, I'm evaluating you on your bookings, attainment, performance.

Speaker Change: You'll see myself back there. It's not that dirty, but I'm working on it. And really hundreds of associates I met with.

Speaker Change: With that understanding of the data, that data can then be used to really show the customer what the return is on how they are using Procore and how they can use Procore to get even more returns.

Speaker Change: Of course.

Speaker Change: Yeah, but I think that was more of an okay, you know, there's obviously those very direct ones, but also I want those other soft ones because those are foundation to how to make sure that we're critical and how we're developing from where we are today to where we're going in the future and getting that stickiness with the client, getting that intimacy and thinking about the client every day and how we're going to add value to them is ultimately what we're trying to accomplish here on every single person and enabling our people to do that.

Speaker Change: And to me, that's our legacy.

Speaker Change: And what I heard resounding was that they love our products, our clients.

Speaker Change: And we've got teams that we've done that with, with our customer base, where we've seen really great results and really true aha moments from our customers to say, this is fantastic.

Speaker Change: And when you get that right, you get the bookings.

Speaker Change: It was so cool to see that.

Speaker Change: But what they wanted to do was see the interconnectability of our products. They wanted to see that unified intelligent platform and really understand how we go from shovel all the way through ongoing operations and really bring that to life and show them the value of that connectivity between those products.

Speaker Change: And so with these specialists and with this GM model, it actually supports our ability to show that ROI to our customers.

Speaker Change: Got it.

Speaker Change: Thank you guys so much.

Howard Fu: That was something that we said, "Wow, this go-to-market evolution could really bring that together." That's why we really looked at it, and I want to make sure you understand one thing. I believe Procore has done a huge amount of work in the last two years of really developing a go-to-market plan.

Larry Stack: That was something that we said, "Wow, this go-to-market evolution could really bring that together." That's why we really looked at it, and I want to make sure you understand one thing. I believe Procore has done a huge amount of work in the last two years of really developing a go-to-market plan.

Speaker Change: It was very helpful.

Speaker Change: And that was something that we said, wow, this go-to-market evolution could really bring that together. So that's why we really looked at it. And I want to make sure you understand one thing.

Speaker Change: Thanks, Andrew.

Unknown Executive: He's shown that he can develop leadership under him and he's instilled the right go to market processes and discipline.

Speaker Change: All right, let's do Zach.

Speaker Change: I believe ProCore has done a huge amount of work in the last two years of really developing a go-to-market plan. I had the privilege of looking at it, reviewing it, validating it with some of our clients.

Howard Fu: I had the privilege of looking at it, reviewing it, validating it, with some of our clients within our account plans and also in our client advisory boards, and make sure that they understood it, felt good about it, and said, "Yes, we see the value of this." And so it wasn't a student body, right, nor was it shaking the, the snow globe, if you will, and just trying to shake things up and say, "Hey, let's do a transformation." But instead, it was very thoughtful, and it was very unique because we saw the opportunity, and the opportunity around new international products. We're just launching our new PEM products in, Europe and in ANZ and throughout APAC. So we really have an opportunity to plant local flags, which is the GM model there.

Larry Stack: I had the privilege of looking at it, reviewing it, validating it, with some of our clients within our account plans and also in our client advisory boards, and make sure that they understood it, felt good about it, and said, "Yes, we see the value of this." And so it wasn't a student body, right, nor was it shaking the, the snow globe, if you will, and just trying to shake things up and say, "Hey, let's do a transformation." But instead, it was very thoughtful, and it was very unique because we saw the opportunity, and the opportunity around new international products. We're just launching our new PEM products in, Europe and in ANZ and throughout APAC. So we really have an opportunity to plant local flags, which is the GM model there.

Speaker Change: Hey, guys.

Speaker Change: within our account plans and also in our client advisory boards.

Speaker Change: and make sure that they understood it, felt good about it, and said, yes, we see the value of this. And so it wasn't a student body, right? Nor was it shaking the snow globe, if you will, and just trying to shake things up and say, hey, let's do a transformation. But instead, it was very thoughtful.

Speaker Change: and it was very unique because we saw the opportunity. And the opportunity around new international products. We're just launching our new PEM products in Europe and in ANZ and throughout APAC. So we really have an opportunity to plant local flags with the GM model there.

Howard Fu: We saw where new domestic products, such as Procore Financials and Procore Pay, really created a large opportunity for us to cross-sell and grow our existing revenue base. So that's super exciting. We saw where we could force multiply with our partners and enter that public sector, you know, business. As, you know, some of the domestic business slows, the public sector is starting to ramp up with semiconductor work, with infrastructure, with data centers, and private-public partnerships. And we need to make sure we follow our clients into that and have all the appropriate certifications and ability to make sure that we're fast-following and being an integral partner with them. So those were some of the evolutionary thoughts going into it.

Larry Stack: We saw where new domestic products, such as Procore Financials and Procore Pay, really created a large opportunity for us to cross-sell and grow our existing revenue base. So that's super exciting. We saw where we could force multiply with our partners and enter that public sector, you know, business. As, you know, some of the domestic business slows, the public sector is starting to ramp up with semiconductor work, with infrastructure, with data centers, and private-public partnerships. And we need to make sure we follow our clients into that and have all the appropriate certifications and ability to make sure that we're fast-following and being an integral partner with them. So those were some of the evolutionary thoughts going into it.

Speaker Change: We saw where new domestic products such as Procore Financials and Procore Pay really created a large opportunity for us to cross sell and grow our existing revenue base. That's super exciting. We saw where we could force multiply with our partners.

Speaker Change: and enter that public sector, you know, business as, you know, some of the...

Speaker Change: domestic business flows, the public sector is starting to ramp up with semiconductor work.

Speaker Change: with infrastructure, with data centers, and private-public partnerships. And we need to make sure we follow our clients into that and have all the appropriate certifications

Speaker Change: So we had to go into new markets, and we had to go in and follow our clients into the federal space and get all the certification.

Speaker Change: And we had to really create a very strong ecosystem or a set of partners that could help us enforce Multiply.

Speaker Change: and ability to make sure that we're fast-following and being an integral partner with them. So those were some of the evolutionary thoughts going into it.

Speaker Change: So that, to me, was extremely germane in the overall execution when I started to talk to Tui.

Speaker Change: That's a little bit about my background.

Speaker Change: Thanks for the time.

Howard Fu: What I think is also important is that when you start a journey, whether it's an evolution, transformation, or whatever, and this is definitely an evolution, is when you start in one area and you're going to a new area, you need to make sure that you map it out along the way. And make sure that you really understand what success looks like. And for us, what we really did is, over these last five months, is really made sure we understood our pipeline very, very well. We could dissect it by offering, by region, by location, so that we can make sure that we have ROIs attached to each and every one of these initiatives.

Larry Stack: What I think is also important is that when you start a journey, whether it's an evolution, transformation, or whatever, and this is definitely an evolution, is when you start in one area and you're going to a new area, you need to make sure that you map it out along the way. And make sure that you really understand what success looks like. And for us, what we really did is, over these last five months, is really made sure we understood our pipeline very, very well. We could dissect it by offering, by region, by location, so that we can make sure that we have ROIs attached to each and every one of these initiatives.

Speaker Change: What I think is also important

Speaker Change: is that when you start a journey, whether it's an evolution, transformation or whatever, this is definitely an evolution.

Unknown Executive: And all of this I perfectly believe is going to benefit us in this next chapter of growth for Procore.

Speaker Change: is when you start in one area and you're going to a new area, you need to make sure that you map it out along the way and make sure that you really understand what success looks like. And for us, what we really did over these last five months is really make sure we understood our pipeline very, very well. We could dissect it by offering.

Unknown Executive: So before I hand it over, I just want to leave you all with my high level of confidence.

Speaker Change: I just wanted to ask, Howard, you had called out that you guys are constantly evaluating the ROI on some of the go to market investments you are making and will keep making, and that you want to actively adjust whatever investments you're making based on that ROI.

Unknown Executive: Larry's going to help propel Procore to 2 billion in revenue and beyond while growing free cashflow per share with that.

Unknown Executive: I interrupted this too much and I want Larry to talk to you all himself.

Larry: So with that, I'm going to hand it over to you, Larry.

Larry: Hey, too.

Larry: You first of all, thank you.

Speaker Change: by region, by location, so that we can make sure that we have ROIs attached to each and every one of these initiatives.

Larry: I very much appreciate that.

Speaker Change: I guess just stepping back, like what type of ROI do you guys need to realize or what's like the minimum threshold that you want to underwrite to before you put more dollars into a given initiative?

Howard Fu: So one of the things that we're looking for in the transformation or the evolution is making sure we have good pipeline generation in the offerings and in the products, in the locations and regions where we want to grow and be known and execute in. The second thing is higher productivity. We're seeing our productivity starting to move up just from the enablement alone, but we want to continue to see that higher productivity, higher retention rates, greater expansion rates in the cross-sell, you know, being able to cross-sell, add new logos, and of course, enter those key markets that were always there and looking to do. So those are some of the areas where we really want to make sure and how we're measuring it, inch by inch, step by step.

Larry Stack: So one of the things that we're looking for in the transformation or the evolution is making sure we have good pipeline generation in the offerings and in the products, in the locations and regions where we want to grow and be known and execute in. The second thing is higher productivity. We're seeing our productivity starting to move up just from the enablement alone, but we want to continue to see that higher productivity, higher retention rates, greater expansion rates in the cross-sell, you know, being able to cross-sell, add new logos, and of course, enter those key markets that were always there and looking to do. So those are some of the areas where we really want to make sure and how we're measuring it, inch by inch, step by step.

Larry: And I just want to tell everyone on the call what an honor and pleasure it is for me to have an opportunity to speak to you today as well.

Speaker Change: So, one of the things that we're looking for in the transformation or the evolution is making sure we have good pipeline generation in the offerings and in the product, in the locations and regions where we want to grow and be known and execute in. The second thing is higher productivity.

Larry: So thank you for giving me your time.

Speaker Change: Yeah, so let me step back first and say that there's going to be a range of ROI and returns, depending on the area of the business that we're in.

Larry: And as to we mentioned, maybe I'll just do a quick overview of a little bit of my background.

Speaker Change: We're seeing our productivity starting to move up just from the enablement alone, but we want to continue to see that higher productivity.

Larry: And then maybe some observations around maybe in that Procore and whatever it's served so far.

Speaker Change: higher retention rate.

Larry: Why do this go evolution of the go to market and with specifics around it?

Speaker Change: greater expansion rates in the cross sell, you know, being able to cross sell, add new logos and of course, enter those key markets that were always there and looking to do. So those are some of the areas where we really wanna make sure and how we're measuring it inch by inch.

Speaker Change: The biggest example of that is when we've talked about the initial phases and the stage of evolution of international is going to have an initial lower ROI with a much bigger ROI coming in.

Howard Fu: So as we start the journey, and we lose sight of the shore and going to the next shore, we want to make sure everybody knows along the way that these are the steps that we're taking and executing it. And we have clear ROI initiatives attached to each one of them, so we can say, "Hey, this one's working. Let's use this one, or let's reduce this one." And that, you know, and I'm sure Howard's going to offer you a better perspective than I on this, but at the same point, it's really the symbiotic relationship between Howard and myself, and our teams working together to make sure that this journey is a max ROI event, and we do it in the right and prescriptive way.

Larry Stack: So as we start the journey, and we lose sight of the shore and going to the next shore, we want to make sure everybody knows along the way that these are the steps that we're taking and executing it. And we have clear ROI initiatives attached to each one of them, so we can say, "Hey, this one's working. Let's use this one, or let's reduce this one." And that, you know, and I'm sure Howard's going to offer you a better perspective than I on this, but at the same point, it's really the symbiotic relationship between Howard and myself, and our teams working together to make sure that this journey is a max ROI event, and we do it in the right and prescriptive way.

Speaker Change: step-by-step.

Speaker Change: So as we start the journey and we lose sight of the short and going to the next short, we want to make sure everybody knows along the way that these are the steps that we're taking and executing it. And we have clear ROI initiatives attached to each one of them, so we can say, hey, this one's working, let's fuse this one, or let's reduce this one. And that, you know, and I'm sure Howard's going to offer you a better perspective than I on this.

Speaker Change: So that's the first thing.

Speaker Change: But at the same point, it's really the symbiotic relationship between Howard and myself, and our teams, working together to make sure that this journey is a Max ROI event, and we do it in the right and prescriptive way.

Speaker Change: Happy to go into any more detail that you would like.

Speaker Change: I'll answer your question this way.

Howard Fu: Finally, what I would say before I turn over the, the mic is, you know, one of the key lessons that you learn in all these things after 25 years and three large transformations is, you gotta make sure that you communicate early and often to all the stakeholders. You gotta be honestly real, authentic, and specific, and I hope to do that with you all today, and answer any question you have in as transparent way as I can. Illustrate the journey ahead and the various milestones, and do that inch by inch ROI, and making sure everyone sees that. Articulate the value of the change for the market, our associates, and our clients, and make sure.

Larry Stack: Finally, what I would say before I turn over the, the mic is, you know, one of the key lessons that you learn in all these things after 25 years and three large transformations is, you gotta make sure that you communicate early and often to all the stakeholders. You gotta be honestly real, authentic, and specific, and I hope to do that with you all today, and answer any question you have in as transparent way as I can. Illustrate the journey ahead and the various milestones, and do that inch by inch ROI, and making sure everyone sees that. Articulate the value of the change for the market, our associates, and our clients, and make sure.

Speaker Change: Finally, what I would say before I turn over the mic is, you know, one of the key lessons that you'll learn in all these things after 25 years and three large transformations is you got to make sure that you communicate early and often to all the stakeholders. You got to be honestly real, authentic.

Speaker Change: But really, I'd like to jump in if you're okay to really since being a Procore, you know, what I try to do is really go in and thoughtfully here.

Speaker Change: When we look at the metrification of the business, another great example is if I start to see really fast velocity through the pipeline, and I start to see that curve, for example, that somebody else talked about in terms of the attainment start to move in a certain direction, it gives me evidence that something is working, whether it's the enablement, whether it's the comp plans, whether there's a receptiveness to what we're putting together in terms of pricing and packaging.

Speaker Change: In specific, and I hope to do that with you all today, and answer any question you have in the transparent way as I can, illustrate the journey ahead and the various milestones and do that inch-by-inch ROI, making sure everyone sees that.

Speaker Change: articulate the value of the change for the market, our associates and our clients, and make sure. I think we did a good job with our clients and our associates really going in and talking to our advisory board, talking to clients, getting them to make, you know, through a comp plan saying, does this add value? Is this going to build your business? Do you see the outcome that we're trying to drive and get those validations?

Howard Fu: I think we did a good job with our clients and our associates, really going in and talking to our advisory board, talking to clients, getting them to make sit, you know, through account plan, saying: "Does this add value? Is this going to build your business? Do you see the outcome that we're trying to drive?" Get those validations. The biggest one I have to tell you is have the full management buy-in that this is not an individual initiative. This is a corporate initiative. That this corporate initiative is all of us working together so that we can see that trajectory for the focus ahead. We're not only shareholders, but we're also, you know, shepherds of the process, and we do need to do the very best, and we have to do it together in a unified way.

Larry Stack: I think we did a good job with our clients and our associates, really going in and talking to our advisory board, talking to clients, getting them to make sit, you know, through account plan, saying: "Does this add value? Is this going to build your business? Do you see the outcome that we're trying to drive?" Get those validations. The biggest one I have to tell you is have the full management buy-in that this is not an individual initiative. This is a corporate initiative. That this corporate initiative is all of us working together so that we can see that trajectory for the focus ahead. We're not only shareholders, but we're also, you know, shepherds of the process, and we do need to do the very best, and we have to do it together in a unified way.

Larry: And then talk a little bit about the milestones and find into what we're doing along the way to make sure that it's on the successful glide path that we expect and the associated success metrics with it.

Speaker Change: And the biggest one, I have to tell you, is how the full management buy-in that this is not an individual initiative, this is a corporate initiative.

Speaker Change: and that this corporate initiative is all of us working together so that we can see that trajectory for the for the focus ahead where we're

Speaker Change: not only shareholders, but we're also shepherds of the process. And we do need to do the very best, and we have to do it together in a unified way. And that is the reason why I came to ProCorp because I saw 100% where they were building a top-notch

Howard Fu: And that is the reason why I came to Procore, because I saw 100% where they were building a top-notch, go-to-market evolution. I got to be a part of that, look at it. I got to validate it with our clients. I got to execute with them. And I gotta tell you, it's super cool. I'm super happy to be here. I'm honored to take any questions, and I hope that was a little bit of good insight for you as we start the, Q&A. So, Matt, I'll turn it over to you, sir, if that's okay.

Larry Stack: And that is the reason why I came to Procore, because I saw 100% where they were building a top-notch, go-to-market evolution. I got to be a part of that, look at it. I got to validate it with our clients. I got to execute with them. And I gotta tell you, it's super cool. I'm super happy to be here. I'm honored to take any questions, and I hope that was a little bit of good insight for you as we start the, Q&A. So, Matt, I'll turn it over to you, sir, if that's okay.

Speaker Change: go-to-market evolution, I got to be a part of that, look at it, I got to validate it with our clients, I got to execute with them, and I got to tell you, it's super cool. I'm super happy to be here. I'm honored to take any questions, and I hope that was a little bit of good insight for you as we start the Q&A.

Speaker Change: So I met with 39 clients, I did 27 site visits.

Speaker Change: You'll see myself back there.

Speaker Change: In terms of the result of that, if I start to see that working, it gives me more confidence to put more fuel on the fire there.

Matthew Puljiz: Okay. Thank you, Larry. So as I put in the chat, if you're an investor and would like to ask a question, please use the Raise Hand function on the Zoom. We'll go through kind of one at a time. And we've also noted the ones that you've submitted in writing, and we'll kind of address those as well once the people that have raised their hand are completed. So, let's start with Tim Brown.

Speaker Change: So, Matt, I'll turn it over to you, sir, if that's okay. Okay. Thank you, Larry.

Speaker Change: It's not that dirty, but I'm working on it.

Speaker Change: And that's the same thing on the flip side of that as well.

Matt: So, as I put in the chat, if you're an investor and would like to ask a question, please use the raise hand function on the Zoom. We'll go through kind of one at a time. And we've also noted the ones that you've submitted in writing, and we'll kind of address those as well once the people that have raised their hand are completed.

Speaker Change: Let's start with Tim Brown.

Speaker Change: And really hundreds of associates I met with.

Speaker Change: And as we pull those strings and go down into the org and really diagnose whether it's good, neutral, or bad, those are the things that are examples of some of the things that I will look for and engage the business on, engage Larry on, engage Tuvi on, engage our product and technology team on to say, hey, here's what we're seeing.

Matthew Martino: Hey, guys. Good to see everyone. Thanks for taking the time to chat with us. Tooey, really helpful to hear about the customer-specific proof points that you're seeing, and kind of how that's informing the plan. And then, Howard, on the call, one thing that you said that kind of stood out was that obviously you expect this to drive more growth, but also improve sales efficiency over time. And so in the success case that this plan works, I'd love to just more specifically understand the key drivers of that improved sales efficiency that you expect and that we should think about over the next few years. And then conversely, in the scenario that it doesn't work out quite as planned, kind of how are you tracking that, and then how should we think about your response in that scenario?

Tim Brown: Hey, guys. Good to see everyone. Thanks for taking the time to chat with us. Tooey, really helpful to hear about the customer-specific proof points that you're seeing, and kind of how that's informing the plan. And then, Howard, on the call, one thing that you said that kind of stood out was that obviously you expect this to drive more growth, but also improve sales efficiency over time. And so in the success case that this plan works, I'd love to just more specifically understand the key drivers of that improved sales efficiency that you expect and that we should think about over the next few years. And then conversely, in the scenario that it doesn't work out quite as planned, kind of how are you tracking that, and then how should we think about your response in that scenario?

Speaker Change: Thank you.

Speaker Change: Hey guys, good to see everyone. Thanks for taking the time to chat with us.

Speaker Change: And what I heard resounding was that they love our products, our clients.

Speaker Change: Here's what we think we can do better.

Speaker Change: It was so cool to see that.

Speaker Change: But what they wanted to do is see the interconnectability of our products. They wanted to see that unified intelligent platform, and really understand how we go from shovel all the way through ongoing operations, and really bring that to life and show them the value of that connectivity between those products.

Speaker Change: And that was something that we said, wow, this go to market evolution could really bring that together.

Speaker Change: to be really helpful to hear about the customer-specific group points that you're seeing, kind of how that's informing the plan.

Speaker Change: So that's why we really looked at it.

Speaker Change: Here's what we think we can even choose even more.

Speaker Change: And that goes into the equation and the calculus for where I decide and where we decide to allocate our resources.

Speaker Change: So that makes sense.

Speaker Change: and then Howard on the call. One thing that you said that kind of stood out was that obviously you expect this to drive more growth, but also improve sales efficiency over time. And so in the success case that this plan works, I'd love to just more specifically understand the key drivers of that improved sales efficiency that you expect and that we should think about over the next few years. And then conversely, in the scenario that it doesn't work out quite as planned.

Speaker Change: And I want to make sure you understand one thing.

Speaker Change: I believe Procore has done a huge amount of work in the last two years of really developing a go to market plan.

Speaker Change: I had the privilege of looking at it, reviewing it, validating it with some of our clients within our account plans, and also in our client advisory boards, and make sure that they understood it, felt good about it, and said, yes, we see the value of this.

Speaker Change: And so it wasn't a student body, right?

Speaker Change: Nor was it shaking the snow globe, if you will, and just trying to shake things up and say, hey, let's do a transformation.

Speaker Change: But instead, it was very thoughtful.

Larry: And then really just talk about some lessons learned around executing the change.

Speaker Change: And it was very unique, because we saw the opportunity.

Speaker Change: And the opportunity around new international products.

Speaker Change: We're just launching our new PEM products in Europe, and in ANZ, and throughout APAC.

Speaker Change: So we really have an opportunity to plant local flags with the GM model there.

Speaker Change: We saw where new domestic products, such as Procore Financials and Procore Pay, really created a large opportunity for us to cross sell and grow our existing revenue base.

Speaker Change: So that's super exciting.

Speaker Change: So those were some of the evolutionary thoughts going into it.

Speaker Change: We saw where we could force multiply with our partners, and enter that public sector business as some of the domestic business flows.

Speaker Change: The public sector is starting to ramp up with semiconductor work, with infrastructure, with data centers, and private public partnerships. And we need to make sure we follow our clients into that, and have all the appropriate certifications, and ability to make sure that we're fast following, and being an integral partner with them.

Speaker Change: How are you tracking that and then how should we think about your response in that scenario?

Larry: I hope that will give you just a little bit more flavor on about me and some of the thoughts that we had behind it.

Speaker Change: What I think is also important is that when you start a journey, whether it's an evolution, transformation or whatever, and this is definitely an evolution, is when you start in one area and you're going to a new area, you need to make sure that you map it out along the way and make sure that you really understand what success looks like.

Speaker Change: Look, I know projecting ROI on any investments always. Oh, a little bit of an art and a little bit of guesswork, because who can know the future?

Howard Fu: Yeah. So, why don't I take that last one first, and then, Tooey, if you feel, you can jump in there. So, in terms of the productivity, you know, Larry touched on some of these things, but some of the metrics and, and the metrics that we look at and track very closely are things like pipeline velocity, close rates, all those different things. But ultimately, it results in AE productivity, measured as the dollars that every single AE brings in in any particular period. And ultimately, what that's going to result in is, it results in higher revenue growth and increased margins. Because, we wouldn't do this if there-- we didn't think that there was a high ROI for this.

Speaker Change: And for us, what we really did over these last five months is really make sure we understood our pipeline very, very well.

Speaker Change: But but I guess maybe just stepping back, like, let's put aside and, you know, initiatives like international, which, you know, understandably will take years to ramp as you build up brand awareness, like maybe just like within your core market.

Speaker Change: So why don't I take that last one first and then, Judy, if you feel you can jump in there.

Larry: And then we'll drill into any detail questions that you want.

Speaker Change: Larry touched on some of these things, but some of the metrics and the metrics that we look at and track very closely are things like pipeline velocity, close rates, all those different things. But ultimately it results in AE productivity measured as the dollars that every single AE brings in in any particular period.

Speaker Change: We could dissect it by offering, by region, by location, so that we can make sure that we have ROIs attached to each and every one of these initiatives.

Speaker Change: And within kind of the customer bases you already are well known in and are fairly dominant in, like what type of return would you want to typically see on an incremental sales hire before deciding that is something you ought to actually go ahead with?

Speaker Change: and ultimately what that's going to result in is it results in higher revenue growth and increased margins because we wouldn't do this if there we didn't think that there was a high ROI for this and the expectation is that as we go through this transformation as we go through the

Speaker Change: So one of the things that we're looking for in the transformation or the evolution is making sure we have good pipeline generation in the offerings and in the product, in the locations and regions where we want to grow and be known and execute it.

Speaker Change: You know, there's not going to be a one-size-fits-all, Zach, to be honest.

Speaker Change: The second thing is higher productivity.

Speaker Change: I think the thing that I can tell you is it's going to be greater than one-to-one, meaning the productivity will be higher than what we are seeing today.

Speaker Change: We're seeing our productivity starting to move up just from the enablement alone, but we want to continue to see that higher productivity, higher retention rates, greater expansion rates in the cross-sell, you know, being able to cross-sell, add new logos, and of course, enter those key markets that were always there and looking to do.

Speaker Change: So if there's a rep with a quota of a million dollars, it will be 1.2, 1.3, 1.4.

Speaker Change: So those are some of the areas where we really want to make sure and how we're measuring it, inch by inch, step by step.

Speaker Change: If there's a rep in a different part of the business where the quota is something below that at 500K, it will be 600K, 700K, 800K.

Speaker Change: So as we start the journey and we lose sight of the shore and going to the next shore, we want to make sure everybody knows along the way that these are the steps that we're taking and executing it.

Speaker Change: That's what I'm measuring.

Speaker Change: To have a one-size-fits-all that says, here's the threshold, it's just it's just it's too nuanced to say that that applies to the entire part of our business.

Howard Fu: And the expectation is that as we go through this transformation, as we go through this change, the expectation is that as we get into fiscal 25 and fiscal 26 and fiscal 27 over the long term, that those productivity increases will then result in higher revenue growth and margin growth. So the ROI has to, has to be there. And so we are going to metrify the living hell out of every single aspect of this business.

Speaker Change: go through this change, the expectation is that we get into fiscal 25 and fiscal 26 and fiscal 27 over the long term, that those productivity increases will then result in higher revenue growth and margin growth. So the ROI has to be there. And so we are going to metrify the living hell out of every single aspect of this business.

Speaker Change: And we have clear ROI initiatives attached to each one of them.

Howard Fu: To the second part of that question, look, you know, if we start to see that there are areas that are not working, or if we're not starting to see some of the growth that we would expect, and the ROI that we expect out of this transition, particularly on the top line, then we will adjust accordingly in terms of our expense profile, and we will adjust accordingly in terms of the trajectory of our margin growth. So the lower the growth, and if we start to see things not working, we will absolutely continue to increase at a higher rate our, our margin growth. Remember, the expectation is that expansion continues to grow, retention continues to improve, productivity continues to improve, and that margin continues to improve.

Speaker Change: And to the second part of that question, look, you know, if we start to see that there are areas that are not working or if we're not starting to see some of the growth that we would expect in the RR that we expect out of this transition, particularly on the top line,

Larry: And once again, honor to take this opportunity to speak to you.

Larry: So I'll jump into my background.

Speaker Change: then we will adjust accordingly in terms of our expense profile and we will adjust accordingly in terms of the trajectory of our margin growth.

Larry: I have about 25 years in the IT and SAS business overall.

Larry: I did three global transformations from that time.

Larry: I'll just give you a quick play for our new to one of them.

Speaker Change: So the lower the growth and if we start to see things not working we will absolutely continue to increase at a higher rate our margin growth.

Larry: The first one's at Accenture.

Speaker Change: Remember, the expectation is that expansion continues to grow, retention continues to improve, productivity continues to improve, and that margin continues to improve.

Larry: We were a five global operating groups combined to one.

Howard Fu: Yeah, and I think the best thing I want to say about... Or just kind of come in over the top on this one is, we will definitely be tracking to make sure the contraction is, you know, lessening and that we're able to expand, both attracting more volume, doing more cross-sell. But I think Howard's point is the one that we really want to convey, which is we are gonna be watching this thing day in and day out, and where we're seeing areas of strength, we're gonna double down, and where we're seeing areas of weakness, we're gonna retrench and possibly retreat a little bit on those things. So we're gonna be very much involved in making sure that we're driving the highest ROI as possible out of this.

Tooey Courtemanche: Yeah, and I think the best thing I want to say about... Or just kind of come in over the top on this one is, we will definitely be tracking to make sure the contraction is, you know, lessening and that we're able to expand, both attracting more volume, doing more cross-sell. But I think Howard's point is the one that we really want to convey, which is we are gonna be watching this thing day in and day out, and where we're seeing areas of strength, we're gonna double down, and where we're seeing areas of weakness, we're gonna retrench and possibly retreat a little bit on those things. So we're gonna be very much involved in making sure that we're driving the highest ROI as possible out of this.

Speaker Change: Yeah, I think the best thing that the best thing I want to say about just kind of coming over the top on this one is We will definitely be tracking to make sure the contraction is You know lessening and that we're able to expand both to tracking more volume doing more cross-cell But I think Howard's point is the one that we really want to convey which is we are going to be watching this thing Day in and day out and where we're seeing areas of strength We're going to double down and where we're seeing areas of weakness

Larry: And we wanted to go from five billion to seven billion in the health and public service.

Larry: We're out to choose cells officer.

Larry: And we needed to lead the United States and go into other markets.

Larry: And by doing that, what we had to do is set up local general management markets and play very specific Accenture stakes.

Larry: Into those specific regions so that we can make sure that we were local mattered and we can really start to understand and address those key issues.

Larry: We also had to do an array of global enablement in that area.

Speaker Change: we're going to retrench and possibly retrieve a little bit on those things. So we're going to be very much involved in making sure that we're driving the highest ROI as possible out of this.

Howard Fu: But the other piece that, Tim, I'm glad you pointed out, was we're seeing it. We're seeing it in these accounts that we're able to put the right teams on, for the right amount of time, and getting the right people in the right rooms, talking about the value that Procore brings, and just super confident that we're on the right track.

Tooey Courtemanche: But the other piece that, Tim, I'm glad you pointed out, was we're seeing it. We're seeing it in these accounts that we're able to put the right teams on, for the right amount of time, and getting the right people in the right rooms, talking about the value that Procore brings, and just super confident that we're on the right track.

Speaker Change: But the other piece, Tim, I'm glad you pointed out, was we're seeing it. We're seeing it in these accounts that we're able to put the right teams on for the right amount of time and getting the right people in the right rooms talking about the value that Procore brings and just super confident that we're on the right track.

Larry: And it was a saving goal, as I mentioned, to go from $5 billion to about $7 billion, but also to move the stock price from about $43 a share at the time, to about $72, $73 with our goal.

Larry: Now it's at $388.

Larry: So I hope we were successful in that area.

Larry: And I can talk about that at any level as well.

Larry: On the second one that comes to mind is Hewlett Packard.

Speaker Change: So we can say, hey, this one's working.

Speaker Change: So we have to make sure that we we look at all the different nuances.

Matthew Martino: Awesome. Thank you, guys.

Tim Brown: Awesome. Thank you, guys.

Howard Fu: Thank you.

Howard Fu: Thanks, Tim.

Larry Stack: Thanks, Tim.

Speaker Change: Awesome, thank you guys. Thank you.

Speaker Change: Let's use this one or let's reduce this one.

Speaker Change: Gotcha.

Matthew Puljiz: Let's do Charles Stone next, please. Charles, are you unmuted?

Speaker Change: And that, you know, and I'm sure Howard's going to offer you a better perspective than I on this, but at the same point, it's really the symbiotic relationship between Howard and myself and our teams working together to make sure that this journey is a max ROI event and we do it in the right and prescriptive way.

Speaker Change: Oh, but Howard, I guess I am hearing you're saying as you get through this transition, you think quotas are going up, and the dollars of like gross new ARR that I, a rep within the same role should have, over the dollars you are paying them all in for salary and overhead and benefits, etc. Like that ratio should be improving.

Speaker Change: Let's do Charles Stone next, please.

Larry: Mark heard about EDS, where I came from, and he basically said to us, you need to be a new poll through channel for all the products across a $120 billion enterprise.

Speaker Change: You got to be honestly real, authentic, and specific and I hope to do that with you all today and answer any question you have in the transparent way as I can.

Speaker Change: Oh, it will go up.

Speaker Change: Illustrate the journey ahead and the various milestones and do that inch by inch ROI and making sure everyone sees that.

Speaker Change: Articulate the value of the change for the market, our associates and our clients and make sure.

Howard Fu: It looks like he is.

Larry Stack: It looks like he is.

Speaker Change: Absolutely.

Speaker Change: Charles, are you unmuted?

Speaker Change: I think we did a good job without our clients and our associates really going in and talking to our advisory board, talking to clients, getting them to make, you know, through a comp plan saying, does this add value?

Speaker Change: Is this going to build your business?

Speaker Change: It will go up.

Howard Fu: ... All right, Charles, we cannot hear you. If you can hear us?

Matthew Puljiz: ... All right, Charles, we cannot hear you. If you can hear us?

Speaker Change: I again, impossible to know exactly what it will look like in the future, but like, what's your guys's aspiration?

Speaker Change: Do you see the outcome that we're trying to drive and get those validation?

Speaker Change: Like, how much do you want that to improve by as you go through this transition?

Robert Trout: Can you hear me?

[Analyst 2]: Can you hear me?

Speaker Change: And the biggest one I have to tell you is how the full management buy-in, that this is not a individual initiative, this is a corporate initiative and that this corporate initiative is all of us working together so that we can see that trajectory for the focus ahead.

Speaker Change: Again, again, Zach, I mean, I would give you the same answer that I just gave you to your prior question.

Speaker Change: All right, Charles. We cannot hear you. If you can hear us. Can you hear me? Okay, we can hear you. Is that working? Yes.

Speaker Change: I got to be a part of that, look at it.

Speaker Change: Zach, I gotta cut you off at the four question limit, man.

Howard Fu: Oh, yeah, we can hear you.

Tooey Courtemanche: Oh, yeah, we can hear you.

Howard Fu: Here we go.

Matthew Puljiz: Here we go.

Speaker Change: We're we're not only shareholders but we're also, you know, shepherds of the process and we do need to do the very best and we have to do it together in a unified way and that is the reason why it came to Procore because I saw 100% where they were building a top-notch go-to-market evolution.

Robert Trout: Is that working?

[Analyst 2]: Is that working?

Speaker Change: Go ahead.

Howard Fu: Yes.

Larry Stack: Yes.

Howard Fu: Yes.

Matthew Puljiz: Yes.

Speaker Change: Thanks, guys.

Robert Trout: Okay. So sometimes when you see, when we have, when companies grow bigger and a bit more complex, one symptom on the sales force side can be that the sales force gets more bimodal, and that you have more of a spread between the top reps and the average rep. So can you talk specifically about, on the one side, how you want to raise the productivity of the average rep? And on the other hand, what are you doing to try and make Procore more attractive to the top talent you'd like to potentially attract external?

[Analyst 2]: Okay. So sometimes when you see, when we have, when companies grow bigger and a bit more complex, one symptom on the sales force side can be that the sales force gets more bimodal, and that you have more of a spread between the top reps and the average rep. So can you talk specifically about, on the one side, how you want to raise the productivity of the average rep? And on the other hand, what are you doing to try and make Procore more attractive to the top talent you'd like to potentially attract external?

Speaker Change: I got to validate it with our clients.

Charles Stone: Okay, so...

Speaker Change: Sometimes when you see, when we have, when companies grow bigger and a bit more complex, one symptom on the Salesforce side can be that the Salesforce gets more bimodal and that you have more of a spread between the top reps and the average rep.

Speaker Change: So, can you talk specifically about, on the one side, how you want to raise the productivity of the average rep? On the other hand, what are you doing to try and make Procore more attractive to the top talent you'd like to potentially attract extra on?

Speaker Change: I got to execute with them and I got to tell you it's super cool.

Howard Fu: Yeah, that's a great question. Is it okay if I answer that one, Matt?

Larry Stack: Yeah, that's a great question. Is it okay if I answer that one, Matt?

Speaker Change: I'm super happy to be here.

Speaker Change: I'm honored to take any questions and I hope that was a little bit of good insight for you as we start the Q&A.

Speaker Change: Yeah, that's a great question. Is it okay if I answer that one, Matt?

Speaker Change: So Matt, I'll turn it over to you, sir, if that's okay.

Howard Fu: Yeah, go for it.

Matthew Puljiz: Yeah, go for it.

Speaker Change: Okay, thank you, Larry.

Howard Fu: For me-

Larry Stack: For me-

Robert Trout: Answer for you, yeah.

Larry Stack: Answer for you, yeah.

Speaker Change: So as I put in the chat, if you're an investor and would like to ask a question, please use the raise hand function on the Zoom.

Howard Fu: Oh, thank you. One of the things, so enablement, there's an old saying in our sales world is, "You don't sell what you don't know." So you really got to make sure that we have complete understanding of how to make sure we raise everyone's game by making sure that they have a complete and intimate understanding of our products and capabilities, and that's what enablement, sales 1.0 did. We're already 99% on the enablement completion on that. We have 99% of our sales force certified in that area today. We developed it, and then we did stand-and-deliver videos based on AI, and we were able to really look at that. So that was one thing that we did to raise the game of just the general sales team in general.

Speaker Change: Yeah, go for it

Larry Stack: Oh, thank you. One of the things, so enablement, there's an old saying in our sales world is, "You don't sell what you don't know." So you really got to make sure that we have complete understanding of how to make sure we raise everyone's game by making sure that they have a complete and intimate understanding of our products and capabilities, and that's what enablement, sales 1.0 did. We're already 99% on the enablement completion on that. We have 99% of our sales force certified in that area today. We developed it, and then we did stand-and-deliver videos based on AI, and we were able to really look at that. So that was one thing that we did to raise the game of just the general sales team in general.

Speaker Change: So, for me, what is...

Speaker Change: One of the things, so enablement, there's an old saying in the sales world is you don't sell what you don't know. So you really got to make sure that we have complete understanding of what we're selling.

Speaker Change: how to make sure we raise everyone's game by making sure that they have a complete and intimate understanding of our products and capabilities. And that's what Enablement Sales 1.0 did. We're already 99%

Speaker Change: on the enablement completion on that. We have 99% of our sales force certified in that area today. We developed it and then we did stand and deliver videos based on AI and we were able to really look at that. So that was one thing that we did to raise the game of just the general sales team in general. Then we introduced 2.0, which was more how do you move from just a transactional sale around increasing volume on your existing business to really starting to change the persona and articulate a CXO value proposition.

Howard Fu: Then we introduced 2.0, which was more how do you move from just a transactional sale around increasing volume on your existing business, to really starting to change the persona and articulate a CXO value proposition, and show them how it goes across the product bases, and how to connect the products into a value-based outcome that matters to the CFO and at the CXO and owner level. So those are the two things that we did for the general sales force. Now, you asked the second piece is, what are we doing for the specific, you know, top performers? Two things. One is, what we're really doing is making sure that we have and create a diamond model around them, which we say is, "Hey, listen, you're some of our top leaders.

Larry Stack: Then we introduced 2.0, which was more how do you move from just a transactional sale around increasing volume on your existing business, to really starting to change the persona and articulate a CXO value proposition, and show them how it goes across the product bases, and how to connect the products into a value-based outcome that matters to the CFO and at the CXO and owner level. So those are the two things that we did for the general sales force. Now, you asked the second piece is, what are we doing for the specific, you know, top performers? Two things. One is, what we're really doing is making sure that we have and create a diamond model around them, which we say is, "Hey, listen, you're some of our top leaders.

Speaker Change: and show them how it goes across the product basis and how to connect the products into a value-based outcome that matters to CFO and at the CXO and owner level. So those are the two things that we did for the general sales force.

Speaker Change: Now, you ask the second piece is, what are we doing for the specific, you know, top performers? Two things. One is what we're really doing is making sure that we have and create a diamond model around them.

Speaker Change: which we say is, hey listen, you're some of our top leaders. We really want to put you on.

Howard Fu: We really want to put you on the key growth accounts and the most strategic accounts." And they might not be the biggest; they might be even the smallest, but they're the most strategic based upon where we see opportunity and share of wallet. And really working with them and staying, on a quarterly basis, meeting with them, working with them, giving them recognition as one of those top diamond members, and making sure that they know that they're helping lead the way. In addition to that, they have to create use cases so that it can proliferate to the other organization, and also working with them very closely on how we can make sure that they get white glove treatment and always taken care of, across the board.

Larry Stack: We really want to put you on the key growth accounts and the most strategic accounts." And they might not be the biggest; they might be even the smallest, but they're the most strategic based upon where we see opportunity and share of wallet. And really working with them and staying, on a quarterly basis, meeting with them, working with them, giving them recognition as one of those top diamond members, and making sure that they know that they're helping lead the way. In addition to that, they have to create use cases so that it can proliferate to the other organization, and also working with them very closely on how we can make sure that they get white glove treatment and always taken care of, across the board.

Speaker Change: the key growth accounts and the most strategic accounts. And they might not be the biggest, they might be even the smallest, but they're the most strategic.

Speaker Change: based upon where we see opportunity in Sheriff Wallet. And really working with them and staying on a quarterly basis, meeting with them, working with them, giving them recognition as one of those top diamond members, and making sure that they know that they're helping lead the way. In addition to that, they have to create news cases so that it can perforate to the other organization.

Speaker Change: and also working with them very closely on how we can make sure that they get white glove treatment and always taken care of across the board. So that's the way I would differentiate between the two, but making sure that enablement, first and foremost, is there across all sales teams. And then on the most strategic accounts, making sure we have that close relationship with those diamond account executives.

Howard Fu: So that's the way I would differentiate between the two, but making sure that enablement, first and foremost, is there across all sales teams. And then on the more strategic accounts, making sure we have that close relationship with those diamond account executives. I hope that answers the question.

Larry Stack: So that's the way I would differentiate between the two, but making sure that enablement, first and foremost, is there across all sales teams. And then on the more strategic accounts, making sure we have that close relationship with those diamond account executives. I hope that answers the question.

Larry: So we used to have a world class offerings with other products, dell, things of that.

Robert Trout: By the way, Larry, I wanna also say to Charles that Larry's doing something that I think is really, really masterful, which is he's actually showing all of the AEs the success of our top sellers, and that drives a whole bunch of excitement around this transformation because it gets everybody wanting to get on board. So it's not just about making your top sellers more productive, it's about showing off their productivity to everyone else, and that's something that Larry's doing a great job with the team.

Tooey Courtemanche: By the way, Larry, I wanna also say to Charles that Larry's doing something that I think is really, really masterful, which is he's actually showing all of the AEs the success of our top sellers, and that drives a whole bunch of excitement around this transformation because it gets everybody wanting to get on board. So it's not just about making your top sellers more productive, it's about showing off their productivity to everyone else, and that's something that Larry's doing a great job with the team.

Speaker Change: I hope that answers the question.

Speaker Change: By the way, Larry, I want to also say to Charles that Larry's doing something that I think is really, really masterful, which is he's actually showing all of the AEs the success of our top sellers.

Larry: And he said, we have to go all HP and become that product.

Larry: So we needed a transformation in the go-to market.

Larry: We needed to go in and make sure that we understood the enablement, the inner connectivity and symbiotic outcomes, and really create a consultant that's selling the product.

Speaker Change: And that drives a whole bunch of excitement around this transformation because it gets everybody wanting to get on board. So it's not just about making your top sellers more productive, it's about showing off their productivity to everyone else. And that's something that Larry's doing a great job with the team.

Larry: So that transformation was a consultant of selling.

Howard Fu: Yeah. The other thing, Charles, is I wanna-

Matthew Puljiz: Yeah. The other thing, Charles, is I wanna-

Robert Trout: Yep.

Matthew Puljiz: Yep.

Howard Fu: I wanna just address your observations and your comment about the bimodal distributions. That's a great example of a way that we are metrifying to the nth degree what we track, because I would say that if we are starting to see a bimodal distribution in terms of attainment, then that means that there has to be something that's off in terms of either our top plans, incentive structures, or territories, or enablement, or something like that. And so that's a great example of what we track very closely to make sure that things are working well. And if you have a nice distribution across your attainment levels, what that results in is a true pay for performance or a performance-based organization, which is absolutely what we want to design for as we go through this transition.

Matthew Puljiz: I wanna just address your observations and your comment about the bimodal distributions. That's a great example of a way that we are metrifying to the nth degree what we track, because I would say that if we are starting to see a bimodal distribution in terms of attainment, then that means that there has to be something that's off in terms of either our top plans, incentive structures, or territories, or enablement, or something like that. And so that's a great example of what we track very closely to make sure that things are working well. And if you have a nice distribution across your attainment levels, what that results in is a true pay for performance or a performance-based organization, which is absolutely what we want to design for as we go through this transition.

Speaker Change #100: Yeah, the other thing, Charles, is I want to just address your observations and your comment about the bimodal distributions. That's a great example of a way that we are metrifying, to the nth degree, what we track.

Speaker Change #101: because I would say that if we are starting to see a bi-modal distribution in terms of attainment, then that means that there has to be something that's off in terms of either our thought plans, incentive structures, or territories, or enablement, or something like that. And so that's a great example of what we track very closely to make sure that things are working well. And if you have a nice distribution across your attainment levels, what that results in is a true pay for performance or a performance-based organization.

Larry: It was really global enablement in connecting all those different products together to really articulate a value based outcome to our clients.

Speaker Change #100: which is absolutely what we want to design for as we go through this transition.

Robert Trout: There was one other part, which was how you guys want to attract more top talent and what Procore needs to do, frankly, to be a better destination for that and compete for that.

[Analyst 2]: There was one other part, which was how you guys want to attract more top talent and what Procore needs to do, frankly, to be a better destination for that and compete for that.

Larry: And he wanted about $5 billion of additional revenue from that.

Speaker Change #100: There was one other part, which was how you guys want to attract more top talent and what Pro Corps needs to do, frankly, to be a better destination for that and compete for that.

Larry: And also to make sure that the services unit within HP was the number one poll through all HP products and it was so we were successful in that area.

Howard Fu: Ah, so let me take one... my perspective on that one. It's related to the top talent, but, you know, this is also related to how we think about design and our incentive structure. I'll just be very upfront. There's a chance to make a lot of money if you're doing really, really well from a booking standpoint here as an AE, okay? And this goes back to what Tui talked about, was when folks see that, there is a natural wave of folks that want to do that as well, and they will seek out ways, and the word gets out that that's how you do it here at Procore, and you can make a lot of money here at Procore.

Matthew Puljiz: Ah, so let me take one... my perspective on that one. It's related to the top talent, but, you know, this is also related to how we think about design and our incentive structure. I'll just be very upfront. There's a chance to make a lot of money if you're doing really, really well from a booking standpoint here as an AE, okay? And this goes back to what Tui talked about, was when folks see that, there is a natural wave of folks that want to do that as well, and they will seek out ways, and the word gets out that that's how you do it here at Procore, and you can make a lot of money here at Procore.

Larry: I think the most remain one that was Red Hat.

Speaker Change #102: Ah, so let me take one of my perspective on that. It's related to the top talent, but this is also related to how we think about design in our incentive structure. I'll just be very upfront. There's a chance to make a lot of money if you're doing really, really well from a booking standpoint here as an AE.

Speaker Change #103: Okay, and this one goes back to what Tui talked about was when folks see that there is a natural wave of folks that want to do that as well, and they will seek out ways and the word gets out that that's how you do it here at Procore and you can make a lot of money here at Procore.

Howard Fu: And that goes back to the enablement, the design of the incentives, the team structures that we're putting together to make folks successful. And it doesn't get kept a secret for all that long, to be honest.

Matthew Puljiz: And that goes back to the enablement, the design of the incentives, the team structures that we're putting together to make folks successful. And it doesn't get kept a secret for all that long, to be honest.

Speaker Change #104: And that goes back to the enablement, the design, and the incentives, the team structures that we're putting together to make folks successful. And it doesn't get kept a secret for all that long, to be honest.

Howard Fu: And can I add one more thing? You know, honestly, sales is a profession. I am so proud. I am the frontline ambassador of our company when we go into a job and into a client site. So I need to make sure that I am the best prepared. So number one is how you make sure you get talent, is you show them a career path within the sales and revenue organization that's professional. You do enablement and certifications along the way, and you create a meritocracy to really recognize the top performers and to continuously bring in world-class leaders and make it as an importer of talent. But number one is recognition that we are completely on a strong and clear path to be a sales, you know, company that has real clear definition of that as a profession.

Larry Stack: And can I add one more thing? You know, honestly, sales is a profession. I am so proud. I am the frontline ambassador of our company when we go into a job and into a client site. So I need to make sure that I am the best prepared. So number one is how you make sure you get talent, is you show them a career path within the sales and revenue organization that's professional. You do enablement and certifications along the way, and you create a meritocracy to really recognize the top performers and to continuously bring in world-class leaders and make it as an importer of talent. But number one is recognition that we are completely on a strong and clear path to be a sales, you know, company that has real clear definition of that as a profession.

Speaker Change #105: And can I add one more thing, you know, honestly, sales is a profession.

Speaker Change #106: I am so proud. I am the frontline ambassador of our company when we go into a job and into a client site. So I need to make sure that I am the best prepared. So number one is how you make sure you get

Speaker Change #107: talent is you show them a career path within the sales and revenue organization that's professional. You do enablement and certifications along the way and you create a meritocracy to really recognize the top performers and to continuously bring in world-class leaders and make it as an importer of talent. But number one is recognition that we are completely on a strong and clear path to be a sales,

Speaker Change #107: you know, a company that has a real clear definition of that as a profession. Sales as a profession is the number one way to attract people into any company.

Howard Fu: Sales as a profession is the number one way to attract people into any company.

Larry Stack: Sales as a profession is the number one way to attract people into any company.

Tooey Courtemanche: Mm-hmm.

Speaker Change #107: We have a lot of people in the queue.

Tooey Courtemanche: Thanks, Charles. You okay if we move on to somebody else?

Matthew Puljiz: Thanks, Charles. You okay if we move on to somebody else?

Speaker Change #108: Thanks Charles. You okay if we move on into somebody else?

Howard Fu: Yep. Thank you.

[Analyst 2]: Yep. Thank you.

Tooey Courtemanche: Let's do it.

Tooey Courtemanche: Thank you.

Matthew Puljiz: Thank you.

Tooey Courtemanche: Thanks, Charles.

Speaker Change #108: Yep, thank you. Please do it. Thank you. Thanks, guys. All right. Let's do Dennis Puri, please.

Speaker Change #108: We'll go through kind of one at a time and we've also noted the ones that you've submitted in writing and we'll kind of address those as well once the people that have raised their hand are, So let's start with Tim Brown.

Tooey Courtemanche: All right. Let's do, Dennis Puri, please.

Matthew Puljiz: All right. Let's do, Dennis Puri, please.

Speaker Change #108: Hey, guys.

Speaker Change #108: There's actually a really sharp question I thought on that was submitted in writing.

Dhanasree Puri: Hey there. Can you hear me?

Dennis Puri: Hey there. Can you hear me?

Tooey Courtemanche: Yes.

Howard Fu: Yes.

Larry Stack: Yes.

Dhanasree Puri: Okay. Thanks, everyone, for putting this together. Larry, just a question for you. What have you found as far as the capability of sales leadership and reps at Procore? Would also be curious as to your desire to bring in, you know, some of your old hands or lieutenants. And then, just finally, to what degree maybe some of your old lieutenants would need some time to ramp to learn how to sell apps as opposed to infra?

Dennis Puri: Okay. Thanks, everyone, for putting this together. Larry, just a question for you. What have you found as far as the capability of sales leadership and reps at Procore? Would also be curious as to your desire to bring in, you know, some of your old hands or lieutenants. And then, just finally, to what degree maybe some of your old lieutenants would need some time to ramp to learn how to sell apps as opposed to infra?

Speaker Change #108: Hey there, can you hear me? Yes. Okay. Thanks everyone for putting this together. Larry, just a question for you.

Dennis Puri: What have you found as far as the capability of sales leadership and reps at Procore? I would also be curious as to your desire to bring in, you know, some of your old hands or lieutenants, and then

Larry: is finally to what degree maybe some of your old lieutenants would need some time to ramp to learn how to sell apps as opposed to infra.

Larry: Good to see everyone.

Larry: So I'd like to read this one out loud for the team here.

Howard Fu: Yeah. It's a great point. And so first of all, I told you I'd be honest, real, and authentic. And so when I came here, I would tell you that I saw that our clients love us, and they love our products. That I could see without any doubt. When you asked me to observe the sales force, I'd say that we had a transactional-based sales force that really was designed on volume increase versus really cross-selling and upselling on the platform, was the biggest thing. So when I look at talent, I look at who can consultatively sell and bring in a platform and have that strong SaaS experience, and that's what I look for. I don't really look for bringing in old talent or people that I know are former lieutenants.

Larry Stack: Yeah. It's a great point. And so first of all, I told you I'd be honest, real, and authentic. And so when I came here, I would tell you that I saw that our clients love us, and they love our products. That I could see without any doubt. When you asked me to observe the sales force, I'd say that we had a transactional-based sales force that really was designed on volume increase versus really cross-selling and upselling on the platform, was the biggest thing. So when I look at talent, I look at who can consultatively sell and bring in a platform and have that strong SaaS experience, and that's what I look for. I don't really look for bringing in old talent or people that I know are former lieutenants.

Larry: Thanks for taking the time to chat with us.

Larry: So it's written by Ruth Bryson.

Larry: Yeah, it's a great point.

Speaker Change #110: And so, first of all, I told you I'd be honest, real, and authentic. And so, when I came here, I would tell you that I saw that our clients love us.

Speaker Change #110: Thuy, really helpful to hear about the customer-specific group points that you're seeing, kind of how that's informing the plan.

Speaker Change #110: Historically, your sales success has been in part not having a traditional software go-to-market and really knowing your customers' unique pain point and buying motions.

Speaker Change #110: And then Howard, on the call, one thing that you said that kind of stood out was that obviously you expect this to drive more growth, but also improve sales efficiency over time.

Speaker Change #110: This feels more like a typical enterprise software go-to-market.

Speaker Change #110: Can you address why this will work now?

Speaker Change #111: and they love our products. That I could see without any doubt. When you asked me to observe the sales force, I'd say that we had a transactional-based sales force that really was designed on volume increase versus really cross-selling and upselling on the platform was the biggest thing.

Speaker Change #111: And so in the success case that this plan works, I'd love to just more specifically understand the key drivers of that improved sales efficiency that you expect and that we should think about over the next few years.

Speaker Change #111: or how do you keep your previous success with the more traditional structure?

Speaker Change #111: And then conversely, in the scenario that it doesn't work out quite as planned, kind of how are you tracking that and then how should we think about your response in that scenario?

Speaker Change #111: By the way, that is a great question, Ruth.

Speaker Change #111: I really appreciate it, because it mixes both the how are we going to accelerate this without losing what got us here, right, which is really what makes Procore special.

Speaker Change #111: Yeah, so why don't I take that last one first, and then to feel you can jump in there.

Speaker Change #111: And I will assure you and everyone else that we will never lose that customer intimacy. In fact, a lot of what this is about is about increasing that customer intimacy, but applying a more rigorous, scalable process on top of it.

Speaker Change #112: So when I look at talent, I look at who can consultatively sell and bring in a platform and have that strong SaaS experience. And that's what I look for. I don't really look for bringing in old talent or people that I know or a former lieutenant. What I really do look for is who's got the right ability to come in here and help us drive a strong local presence, a strong consultative selling motion, starting to sell the platform and really, you know, connect the dots on the enterprise and show those CXO value propositions. And I think that's what we can most approve the sales force and have the biggest, you know, the biggest bang for the buck, if you will.

Speaker Change #112: So in terms of the productivity, you know, Larry touched on some of these things.

Speaker Change #112: So in less of a bespoke art of building relationships between one AE and a CS member and an account, this is more about putting a process in place where we can actually better understand their needs, bring the right resources into that account in order to address those needs, and then to be able to capture more volume and sell them more product, just more methodically, because otherwise the kind of the cottage industry approach that we had used before just doesn't scale in my mind.

Speaker Change #112: I was going to say the same thing to you.

Speaker Change #112: Purposeful intent is the way I would say it is, doing that, getting more intimate with the client, really making sure that we understand their business, measuring that success and making sure we have the right people within the account that can absolutely drive correctly the entire process all the way from stage one to stage six, and make sure that we deliver on what we say and continue to expand and build that trust with the client, I think is critical.

Speaker Change #112: So it would be exactly how I see us going forward.

Speaker Change #112: But some of the metrics and the metrics that we look at and track very closely are things like pipeline velocity, close rates, all those different things.

Speaker Change #112: By the way, I should also say that we have the privilege of doing a lot more for our customers than sell them software, right?

Howard Fu: What I really do look for is, who's got the right ability to come in here and help us drive a strong local presence, a strong consultative selling motion, starting to sell the platform, and really, you know, connect the dots on the enterprise and show those CXO value propositions? And I think that's where we can most improve, the sales force and have the biggest, you know, the biggest bang for the buck, if you will. I hope that helps, Dennis.

Larry Stack: What I really do look for is, who's got the right ability to come in here and help us drive a strong local presence, a strong consultative selling motion, starting to sell the platform, and really, you know, connect the dots on the enterprise and show those CXO value propositions? And I think that's where we can most improve, the sales force and have the biggest, you know, the biggest bang for the buck, if you will. I hope that helps, Dennis.

Speaker Change #112: But ultimately, it results in AE productivity measured as the dollars that every single AE brings in in any particular period.

Speaker Change #112: We're consultative in a lot of areas, and Culture Academy is one.

Speaker Change #112: And ultimately, what that's going to result in is it results in higher revenue growth and increased margins, because we wouldn't do this if we didn't think that there was a high ROI for this. And the expectation is that as we go through this transformation, as we go through this change, the expectation is that we get into fiscal 25 and fiscal 26 and fiscal 27 over the long term, that those productivity increases will then result in higher revenue growth and margin growth. So the ROI has to be there.

Speaker Change #112: And I know everyone kind of discounts that a little bit.

Speaker Change #112: But this last week, I had my leadership in town, and we had probably, I don't know, 10 of the largest contractors in the US sitting in one of our conference rooms talking not about Procore software, but about how to elevate the industry through culture and business values.

Speaker Change #112: And the fact that we have that brand and that they look to us to be that kind of a partner doesn't go away with this new model.

Speaker Change #112: We will always have those special relationships.

Speaker Change #112: Yeah, the other piece that I'll just add, Ruth, is that like, if there are areas of the business where productivity is actually pretty good, and there are some that we're seeing strengthen relatively, for example, in the upper end of the market, that's not immune from the benefits of this model that we are moving to.

Speaker Change #112: So even if you're doing well today, and there are pockets that are doing well today, this model, I think, not just supports it, but I think it should accelerate it.

Speaker Change #112: Sorry, Larry, I'm raising your quota because of this, even though those folks are doing well.

Speaker Change #112: And that's the way that I'm approaching it.

Dhanasree Puri: It does. Yeah, I mean, I guess, could I ask, I guess, is the thinking that there are some people within the organization today whose responsibilities, you know, they get a tap on the shoulder and say, "Hey, we'd like to do more of you, so you're going to now be in a leadership position and nurture more people to do it like you do"? Or do you think it's gonna be more external hires who come from other software companies where they're familiar with solution selling, that sort of thing?

Dennis Puri: It does. Yeah, I mean, I guess, could I ask, I guess, is the thinking that there are some people within the organization today whose responsibilities, you know, they get a tap on the shoulder and say, "Hey, we'd like to do more of you, so you're going to now be in a leadership position and nurture more people to do it like you do"? Or do you think it's gonna be more external hires who come from other software companies where they're familiar with solution selling, that sort of thing?

Speaker Change #111: I hope that helps some.

Speaker Change #113: I guess it's the thinking that there are some people within the organization today whose responsibilities...

Speaker Change #114: They get a tap on the shoulder and say, hey, we'd like to do more of you, so you're going to now be in a leadership position and nurture more people to do it like you do, or do you think it's going to be more external hires who come from other software companies where they're familiar with solution selling, that sort of thing?

Howard Fu: I love the combination of both. You know, bringing up and the enablement really for our folks here. How do we increase productivity? Through enablement, and enablement 1.0 was to fall in love with our offerings and make sure we had a refreshed view of them, because our product teams are going fast. Then the second piece to that was, how do we switch from transactional to consultative selling? And you've been in the field, so how do we make sure of that? So I don't want to disrupt that. In fact, I want to build and progress that. So I see that as a combination, and bringing in some other talent to give refreshed views and interesting viewpoints, and bringing those two best together is really the equation, and not over-rotating on either one.

Larry Stack: I love the combination of both. You know, bringing up and the enablement really for our folks here. How do we increase productivity? Through enablement, and enablement 1.0 was to fall in love with our offerings and make sure we had a refreshed view of them, because our product teams are going fast. Then the second piece to that was, how do we switch from transactional to consultative selling? And you've been in the field, so how do we make sure of that? So I don't want to disrupt that. In fact, I want to build and progress that. So I see that as a combination, and bringing in some other talent to give refreshed views and interesting viewpoints, and bringing those two best together is really the equation, and not over-rotating on either one.

Speaker Change #114: I love the combination of both.

Speaker Change #114: bringing up and the enablements really.

Speaker Change #115: for our folks here. How do we increase productivity? Through enablement, and enablement 1.0 was to fall in love with our offerings and make sure we had a refreshed view of them because our product teams are going fast.

Speaker Change #116: And then the second piece of that was, is how do we switch from transactional to consultative selling? And you've been in the field, so how do we make sure of that? So I don't want to disrupt that. In fact, I want to build and progress that.

Speaker Change #116: It's not to fix things that are that are bad.

Speaker Change #116: It's really an offensive move to really accelerate and supercharge how we're doing things today, or what we need going forward.

Speaker Change #116: Yeah, good question, Ruth.

Speaker Change #116: As always, let's go back to the panel here.

Speaker Change #116: RK Mahendran.

Speaker Change #116: And so we are going to metrify the living hell out of every single aspect of this business.

Speaker Change #116: And to the second part of that question, look, you know, if we start to see that there are areas that are not working, or if we're not starting to see some of the growth that we would expect, and the ROI that we expect out of this transition, particularly on the top line, then we will adjust accordingly in terms of our expense profile.

Speaker Change #116: And we will adjust accordingly in terms of the trajectory of our margin growth. So the lower the growth, and if we start to see things not working, we will absolutely continue to increase at a higher rate our margin growth.

Speaker Change #116: Remember, the expectation is that expansion continues to grow, retention continues to improve, productivity continues to improve, and that margin continues to, Awesome.

Speaker Change #117: So, I see that as the combination and bringing in some other talent to give refreshed views and interesting viewpoint and bringing those two best together is really the equation and not over-rotating on either one.

Speaker Change #117: Thank you guys.

Tooey Courtemanche: Got it.

Tooey Courtemanche: By the way, Dennis, it's been interesting from my perspective to see, to see the hiring that Larry has done because he's promoted from within. He's, he's brought in some of his team members from his old organization. Sorry, now I got a train going by. And also, also he's brought in new talent from outside, so I've seen all three flavors, and he's doing a great job of bringing in the best talent for, you know, for what we need. And it's not one or the other. It's, it's, it's a combo of all. So I've, I've seen it all.

Speaker Change #117: By the way Dennis, it's been interesting from my perspective to see to see the hiring that Larry has done because he's promoted from within, he's brought in some of his team members from his

Speaker Change #118: old organization. Sorry, now I got a train going by. And also he's brought in new talent from outside. So I've seen all three flavors and he's doing a great job of

Larry: When I went to Red Hat, we were about $3 billion. We were growing in about the mid teens, but we started seeing a slipping and going down into, you know, the single digits.

Speaker Change #118: bringing in the best talent for what we need. And it's not one or the other, it's a combo of all. So I've seen it all.

Larry: And we wanted to get it back up into the 20% and above that and you're over your revenue growth.

Speaker Change #118: Thank you.

Dhanasree Puri: Thank you. I'll jump back in line.

Dennis Puri: Thank you. I'll jump back in line.

Tooey Courtemanche: Yeah.

Speaker Change #118: Let's do Charles Stone next.

Tooey Courtemanche: Thanks, Dennis.

Speaker Change #118: Thank you. I'll jump back in line. Yeah. Thanks, Dennis. Sorry about the train. All right, let's do Matthew Clawson next.

Tooey Courtemanche: Sorry about the train.

Larry: So what we had to do is a couple of things.

Tooey Courtemanche: All right. Let's do, Matthew Clausen next.

Speaker Change #118: Charles, are you unmuted?

Speaker Change #118: Looks like it is.

Speaker Change #118: Hey, can you guys hear me?

Matt Hedberg: Can you hear me okay?

Matthew Clausen: Can you hear me okay?

Tooey Courtemanche: Yeah, we got you.

Larry: And the first thing we had to do is make sure that we started to go into new markets. We were pretty saturated with one single product.

Speaker Change #120: Thank you for your time. Can you describe for me the legacy process by which

Howard Fu: Yes.

Larry Stack: Yes.

Tooey Courtemanche: Got you.

Matt Hedberg: Thank you for your time. Can you describe for me the legacy process by which asks from the customers in the field about a product would make it back to the product team? And then, to the extent that you're making these go-to-market changes in the future, how is that intended to accelerate that connectivity from the client experience in the field back to the product team to make sure that feedback loop is moving quickly?

Matthew Clausen: Thank you for your time. Can you describe for me the legacy process by which asks from the customers in the field about a product would make it back to the product team? And then, to the extent that you're making these go-to-market changes in the future, how is that intended to accelerate that connectivity from the client experience in the field back to the product team to make sure that feedback loop is moving quickly?

Speaker Change #121: asks from the customers in the field about a product would make it back to the product team. And then to the extent that you're making these go-to-market changes in the future, how is that intended to accelerate that connectivity from the client experience in the field back to the product team to make for sure that feedback loop is

Speaker Change #121: We got it.

Speaker Change #121: Well, thanks for the time.

Speaker Change #121: Two questions.

Speaker Change #121: One is, one thing I picked up, I think, at the audience call, and even today, and I think, too, your example about a customer, about to churn sort of raises the question, are some of these go to market changes a response to what you may be seeing a slip in retention?

Howard Fu: Yeah, we're gonna have three real key feedback loops. One is our customer success team, and we're really leaning in on making them more technical to make sure that the translation is not lost between what the client said and what the technical team understands. So, our frontline teams are becoming more technical to not only make that feedback loop more efficient but also more effective and clear, number one. Number two is our constant interactions of bringing our planning sessions and our account plans. So we bring back all of our account plans from, from the clients, and we validate them with our, our friends in product and engineering and say, "This is what we're hearing. This is what we're seeing, the real uptake. This is what's exciting. This is where they don't get an understanding. Is Procore Financials aligned to...

Larry Stack: Yeah, we're gonna have three real key feedback loops. One is our customer success team, and we're really leaning in on making them more technical to make sure that the translation is not lost between what the client said and what the technical team understands. So, our frontline teams are becoming more technical to not only make that feedback loop more efficient but also more effective and clear, number one. Number two is our constant interactions of bringing our planning sessions and our account plans. So we bring back all of our account plans from, from the clients, and we validate them with our, our friends in product and engineering and say, "This is what we're hearing. This is what we're seeing, the real uptake. This is what's exciting. This is where they don't get an understanding. Is Procore Financials aligned to...

Speaker Change #121: moving quickly.

Speaker Change #122: Yeah, we're going to have three real key feedback loops. One is our customer success team, and we're really leaning in on making them more technical to make sure that the translation is not lost between what the client said and what the technical team understands.

Speaker Change #122: I think you guys talked about contraction and maybe more competitive intensity.

Speaker Change #123: So, our frontline teams are becoming more technical to not only make that feedback loop.

Speaker Change #123: more efficient, but also more effective and clear.

Speaker Change #123: Number one. Number two is our constant interactions of bringing our planning sessions and our account plans.

Speaker Change #124: So we bring back all of our account plans from the clients and we validate them with our friends in product and engineering and say, this is what we're hearing, this is what we're seeing, the real take up, this is what's exciting, this is where they don't get an understanding, is Procore financials aligned to, do you have to replace ERP? And we get all those answers together through that.

Howard Fu: “Do you have to replace ERP?” And we get all those answers together through that planning process, but via the account plan is the other thing. And then thirdly, we do it every month at the. Well, we're doing it almost every week right now, between the product and the revenue teams and the marketing teams all getting together on meetings for almost eight hours per week and really reviewing everything that's coming in the pipe and making sure we validate it with the market set. So I'd say that it's the technical customer success teams, and they're becoming more technical. Number two, it's manifested in the account plan.

Larry Stack: “Do you have to replace ERP?” And we get all those answers together through that planning process, but via the account plan is the other thing. And then thirdly, we do it every month at the. Well, we're doing it almost every week right now, between the product and the revenue teams and the marketing teams all getting together on meetings for almost eight hours per week and really reviewing everything that's coming in the pipe and making sure we validate it with the market set. So I'd say that it's the technical customer success teams, and they're becoming more technical. Number two, it's manifested in the account plan.

Larry: We needed to move from a transactional based sales force specifically around what we call Red Hat Enterprise Linux and brought in that into cross cell and upsell opportunities with our other products and our mix.

Speaker Change #125: Craig Courtemanche, Matthew Puljiz

Larry: We had to go into new markets and we had to go in and follow our clients into the federal space and get all the certification.

Larry: And we had to really create a very strong ecosystem or a set of partners that could help us enforce and multiply.

Speaker Change #126: between the product and the revenue teams and the marketing teams all getting together on meetings for almost eight hours.

Larry: So that to me was extremely germane in the overall execution when I started to talk to two.

Speaker Change #127: per week and really reviewing everything that's coming into Pike and making sure we validated what the market said. So I'd say that it's the technical customer success teams and they're becoming more technical. Number two, it's manifested in the account plan through the empirical conversations we have our clients and then those weekly and hopefully soon will be monthly cadences around those sessions directly with all of us and the product leaders, the revenue leaders, the go-to-market teams.

Larry: Now it's a little bit about my background.

Howard Fu: through the empirical conversations we have with our clients, and then those, weekly, and hopefully soon it will be monthly cadences around those sessions directly with all of us and the product leaders, the revenue leaders, the go-to-market teams, the general managers, everybody on there having to make sure that all the voices are heard and that we've amalgamated the product roadmap in the future state that's aligned to those needs.

Larry Stack: through the empirical conversations we have with our clients, and then those, weekly, and hopefully soon it will be monthly cadences around those sessions directly with all of us and the product leaders, the revenue leaders, the go-to-market teams, the general managers, everybody on there having to make sure that all the voices are heard and that we've amalgamated the product roadmap in the future state that's aligned to those needs.

Speaker Change #127: the general managers, everybody on there having made sure that all the voices are heard and that we've amalgamated the product roadmap in the future state that's aligned to those needs.

Tooey Courtemanche: Yeah, let me give you an example, which now that we have these overlay teams that we're building, when you put an overlay team in that is very, very adept at understanding financials, as an example, all the way through pay, and they're talking to a CFO about how they're going to be doing invoicing, right? They're so deep in their knowledge of that particular area of the product line that they are bringing back, those teams are bringing back much more directed and much more cogent feedback because they're experts. And not to put anything on the people that were more the generalists, but the generalists just weren't able to do that as effectively.

Speaker Change #129: Let me give you an example, which now that we have these overlay teams that we're building, when you put an overlay team in that is very, very adept at understanding financials, as an example, all the way through pay.

Speaker Change #130: And they're talking to a CFO about how they're going to be doing invoicing, right? They're so deep in their knowledge of that particular area of the product line that they are bringing back, those teams are bringing back much more directed and much more cogent feedback because they're experts.

Larry: Happy to go into any more detail that you would like, but really, I'd like to jump in if you're okay to really sense being a pro core.

Larry: You know, what I try to do is really go in and talk to Lee here.

Speaker Change #130: and not to put anything on the people that were more the generalists but the generalists just weren't able to do that as effectively. So we see this as kind of a direct line of getting feedback back to the organization way more effectively and efficiently than we've ever done before.

Tooey Courtemanche: So we see this as kind of a direct line of getting feedback back to the organization way more effectively and efficiently than we've ever done before.

Larry: So I met with 39 clients.

Tooey Courtemanche: Thank you. That's helpful.

Matthew Clausen: Thank you. That's helpful.

Larry: I did 27 site visit.

Speaker Change #130: All right, Charles, we cannot hear you.

Tooey Courtemanche: Sure.

Speaker Change #132: Thank you. That's helpful. Sure. All right, let's go to Andrew next, please.

Larry: You'll see myself back there.

Tooey Courtemanche: All right, let's go to Andrew next, please.

Matthew Puljiz: All right, let's go to Andrew next, please.

Speaker Change #132: If you can hear me.

Speaker Change #132: And then I'll follow up with my second question here.

Miller Jump: Hey, guys, can you hear me okay?

[Analyst 3]: Hey, guys, can you hear me okay?

Howard Fu: Yes, sir.

Larry Stack: Yes, sir.

Speaker Change #132: i

Tooey Courtemanche: Yeah.

Larry: It's not that dirty, but I'm working on it and really hundreds of associates I met with.

Speaker Change #132: Hey guys, can you hear me okay?

Speaker Change #132: Well, I'll just say that this is definitely not in response to any weakness in the business, I want to assure you.

Miller Jump: Thanks so much for doing this. I just had one question on maybe outside of some of the personnel decisions that are being made. I guess, given that the goal is to sell the broader Procore platform and the mesh of how these products work together, and that's really where you get the most ROI, and I think we said that, you know, perhaps selling 11 to 14 SKUs had gotten a little unwieldy for some of our AEs. I guess, do you see any situation where we need to repackage, reprice, or bundle certain solutions to help customers get more ROI? Is that part of the process here, or do we feel like the product pricing packaging is pretty set, and it's just a matter of putting the right people in place?

[Analyst 3]: Thanks so much for doing this. I just had one question on maybe outside of some of the personnel decisions that are being made. I guess, given that the goal is to sell the broader Procore platform and the mesh of how these products work together, and that's really where you get the most ROI, and I think we said that, you know, perhaps selling 11 to 14 SKUs had gotten a little unwieldy for some of our AEs. I guess, do you see any situation where we need to repackage, reprice, or bundle certain solutions to help customers get more ROI? Is that part of the process here, or do we feel like the product pricing packaging is pretty set, and it's just a matter of putting the right people in place?

Speaker Change #133: Thanks so much for doing this. I just have one question on maybe outside of some of the personnel decisions that are being made. I guess given that the goal is to sell the broader Procore platform and the mesh of how these products work together, and that's really where you get the most

Larry: And what I heard resounding was that they love our products, our clients.

Larry: It was so cool to see that.

Speaker Change #134: RY and I think we said that you know perhaps selling 11 to 14

Speaker Change #135: Excuse, it's gotten a little unwieldy for some of our AEs. I guess, do you see any situation where we need to repackage or reprice or bundle certain solutions to help customers get more ROIs? Is that part of the process here, or do we feel like the...

Speaker Change #136: Product Pricing Packaging is pretty set and it's just a matter of putting the right people in place.

Speaker Change #136: Okay.

Speaker Change #136: In fact, that example I used wasn't really about churn, it was about, and I want to be specific, if they were going to reduce their volume, they might have reduced their volume, they weren't going to leave Procore, which is the good news.

Tooey Courtemanche: Howard, do you want to start with that?

Speaker Change #136: Yes.

Howard Fu: Yeah, yeah, sure. So, thanks, Andrew. The short answer is yes. Pricing and packaging is something that we consistently and constantly look at to see what best serves our customers. Remember, we did something like this at the lower end of the market, about a year and a half, maybe two years ago. That was quite successful at that end of the market. And then as we continue to add more products to our portfolio and add products throughout the construction life cycle, this is constantly something that's on our minds. Remember, we also talked about in the last couple of quarters, how we're thinking about the needs of the enterprise space, where the customizability of the, of the platform is something that's important for our enterprise customers, and then making sure that we make progress along those lines.

Speaker Change #136: Howard, do you want to start with that? Yeah, yeah, sure. So thanks, Andrew. So the short answer is yes. Pricing and packaging is something that we consistently and constantly look at to see what best serves our customers. Remember, we did something like this at the lower end of a market about a year and a half, maybe two years ago, that was quite successful at that end of the market. And then as we continue to add more products to our portfolio and add products throughout the construction lifecycle, this is constantly something that's on our minds.

Speaker Change #136: Okay.

Speaker Change #136: But what we're finding is that the deeper we get these engagements with these customers, the more we can actually show the value, and then therefore, the more they want to buy from Procore.

Speaker Change #136: Sometimes when you see when we have the companies grow bigger and a bit more complex, one symptom on the Salesforce side can be that the Salesforce gets more bimodal, and that you have more of a spread between the top reps and the average rep.

Speaker Change #136: So, Can you talk specifically about, on the one side, how you want to raise the productivity of the average rep?

Speaker Change #137: Remember, we also talked about, in the last couple of quarters, how we're thinking about the needs of the enterprise space, where the customizability of the platform is something that's important for our enterprise customers, and then making sure that we make progress along those lines.

Speaker Change #137: On the other hand, what are you doing to try and make Procore more attractive to the top talent you'd like to potentially attract externally?

Speaker Change #137: So it's kind of as simple as that.

Howard Fu: It's a combination of all those different things in terms of making progress on our products, making sure we listen to our customers, and then packaging it up that makes sense for what we're trying to do and meet them on their court.

Speaker Change #138: So it's a combination of all those different things in terms of making progress on our product, making sure we listen to our customers, and then packaging it up that makes sense for what we're trying to do and meet them on their court.

Speaker Change #138: Yeah, that's a great question.

Speaker Change #138: This is very much a, we're leaning into something.

Miller Jump: Okay, got it. That's fair. I guess if I think about, like, the other piece, which is the sort of value-based selling, I think across all of software, there's been a greater need to articulate ROI and total cost of ownership, you know, when you're selling not just to CFO, but really anyone in the procurement side. Do you guys have that laid out and quantified? I guess, like, is it understood across the sales force how to do that across each of the products? It seems like it's fairly well set on project management. I just want to make sure that there's good, like, ROI case studies, explanations, and calculators and everything for the other products, or if that's something that needs to be worked in.

[Analyst 3]: Okay, got it. That's fair. I guess if I think about, like, the other piece, which is the sort of value-based selling, I think across all of software, there's been a greater need to articulate ROI and total cost of ownership, you know, when you're selling not just to CFO, but really anyone in the procurement side. Do you guys have that laid out and quantified? I guess, like, is it understood across the sales force how to do that across each of the products? It seems like it's fairly well set on project management. I just want to make sure that there's good, like, ROI case studies, explanations, and calculators and everything for the other products, or if that's something that needs to be worked in.

Speaker Change #138: Okay, got it. That's fair. And I guess if I

Speaker Change #138: Is it okay if I answer that one, Matt?

Speaker Change #138: When you sit in a meeting with a customer and they tell you that they want to buy a product that they didn't even know you had before you sat down in that meeting, that's an indication that you need to do a better job of really becoming intimate and letting them know what's available.

Speaker Change #138: And we're seeing lots of that.

Speaker Change #138: Think about like the other piece, which is this sort of value-based selling. I think across all of software, there's been a greater need to articulate ROI and total cost of ownership.

Speaker Change #138: Yeah, go for it.

Speaker Change #138: So we just want to capitalize.

Speaker Change #139: when you're selling, not just to CFO, but really anyone in the procurement side, do you guys have that laid out and quantified? And I guess,

Speaker Change #139: And thanks, Thuy.

Speaker Change #140: Like is it understood across the sales force how to do that across each of the products? It seems like it's fairly well set on project management. I just want to make sure that there's good like ROI case studies and explanations and calculators and everything for the other products or if that's something that needs to be worked in.

Howard Fu: I would tell you that, in the enablement process that we just went through, we started that in Enablement 1.0, which we executed in April and got everyone certified by June. In 2.0, we're much more to that and ROI associated with each product. You know, for example, you know, if you use Procore Pay, you're able to reduce SG&A. We think you can get to an NPV faster, an IRR here. Things of that nature, we're really driving into the next level of enablement, which is 2.0, and it's out there. We're actually going through those courses now. So I do see 2.0 answering that question that you raised around those clear, demonstrable ROI and metrics that matter for our clients.

Larry Stack: I would tell you that, in the enablement process that we just went through, we started that in Enablement 1.0, which we executed in April and got everyone certified by June. In 2.0, we're much more to that and ROI associated with each product. You know, for example, you know, if you use Procore Pay, you're able to reduce SG&A. We think you can get to an NPV faster, an IRR here. Things of that nature, we're really driving into the next level of enablement, which is 2.0, and it's out there. We're actually going through those courses now. So I do see 2.0 answering that question that you raised around those clear, demonstrable ROI and metrics that matter for our clients.

Speaker Change #141: I would tell you that in the enablement process that we just went through, we started that in enablement 1.0, which we executed in April and got everyone certified by June. In 2.0, we're much more to that, an ROI associated with each product. You know, for example, you know, if you use Procore Pay, you're able to reduce SG&A, we think you can get to an NPV faster and IRR here. Things of that nature were really driving into the next level of enablement, which is 2.0, and it's out there. We're actually going through those courses now, so I do see 2.0 answering that question that you raised.

Larry: But what they wanted to do is to the interconnectability of our products.

Larry: They wanted to see that unified intelligence platform and really understand how we go from shovel all the way through ongoing operations and really bring that to life and show them the value of that connectivity between those products.

Speaker Change #141: around those clear demonstrable ROI and metrics that matter for our clients.

Howard Fu: The other thing I'll add on top of that, Andrew, is, you know, one of the things with product specialists, with a focus, with the general managers in each one of these parts of our business, it allows us to have better visibility and a better understanding, really, of the data that's within our customers' profiles within their instance of Procore. With that understanding of the data, that data can then be used to really show the customer what the return is on how they are using Procore and how they can use Procore to get even more returns.

Larry: And that was something that we said, wow, this go to market evolution to really bring that together.

Speaker Change #141: The other thing I'll add on top of that, Andrew, is, you know, one of the things with product specialists with a focus with the general managers in each one of these parts of our business,

Larry: So that's why we really looked at it.

Larry: And I want to make sure you understand one thing.

Speaker Change #141: It allows us to have better visibility and a better understanding, really, of the data that's within our customers' profiles within their instance of Procore.

Larry: I believe pro core has done a huge amount of work in the last two years of really developing a go to market plan.

Larry: I had the privilege of looking at it, reviewing it, validating it with some of our clients within our account plans and also in our client advisory course and make sure that they understood it.

Larry: So good about it and said, yes, we see the value of this.

Larry: And so within the studio student body, right?

Speaker Change #141: with that understanding of the data.

Speaker Change #142: That data can then be used to really show the customer what the return is on how they are using Procore and how they can use Procore to get even more returns. And we've got teams that we've done that with.

Larry: Nor was it shaking the snow globe, if you will, and just trying to shake things up and say, let's do a transformation.

Howard Fu: And we've got teams that we've done that with, with our customer base, where we've seen really great results and really true aha moments from our customers to say, "This is fantastic." And so with these specialists and with this GM model, it actually supports our ability to show that ROI to our customers.

Larry: But instead it was very thoughtful and it was very unique because we saw the opportunity and the opportunity around new international products were just launching our new PM products in Europe.

Larry: And in a and Z and throughout a pack.

Speaker Change #143: with our customer base where we've seen really great results and really true aha moments from our customers to say this is fantastic. And so with these specialists and with this GM model it actually supports our ability to show that ROI to our customers.

Larry: So we really have an opportunity to plant local flags, which the GM model there.

Larry: We saw where new domestic products such as pro core financials and pro core pay really created a large opportunity for us to cross sell and grow our existing revenue base.

Larry: That's super exciting.

Speaker Change #143: So for me, thank you.

Miller Jump: Got it. Thank you guys so much. Very helpful.

Howard Fu: Got it. Thank you guys so much. Very helpful.

Howard Fu: Thanks, Andrew.

Speaker Change #143: Got it. Thank you guys so much. Very helpful. Thanks, Andrew.

Miller Jump: Thank you.

Howard Fu: Thank you.

Tooey Courtemanche: All right, let's do Zach.

Speaker Change #144: All right, let's do Zach.

Larry: We saw where we could force multiply with our partners and enter that public sector, you know, business as, you know, some of the domestic business flow.

Speaker Change #144: One of the things, so enablement, there's an old saying in the sales world is you don't sell what you don't know.

Speaker Change #144: Maybe the second question I have is, how you sort of made the decision around the additional investment?

Nick Altmann: Hey, guys. Thanks for the time. I just wanted to ask, Howard, you had called out that you guys are constantly evaluating the ROI on some of the go-to-market investments you are making and will keep making, and that you want to actively adjust whatever investments you're making based on that ROI. I guess just stepping back, like, what type of ROI do you guys need to realize, or what's, like, the minimum threshold that you want to underwrite to before you put more dollars into a given initiative?

[Analyst 4]: Hey, guys. Thanks for the time. I just wanted to ask, Howard, you had called out that you guys are constantly evaluating the ROI on some of the go-to-market investments you are making and will keep making, and that you want to actively adjust whatever investments you're making based on that ROI. I guess just stepping back, like, what type of ROI do you guys need to realize, or what's, like, the minimum threshold that you want to underwrite to before you put more dollars into a given initiative?

Speaker Change #145: Hey, guys. Thanks for the time. I just wanted to ask, Howard, you had called out that you guys are constantly evaluating the ROI on some of the go-to-market investments you are making and will keep making, and that you want to actively adjust whatever investments you're making based on that ROI.

Larry: So the public sector is starting to ramp up with some my conductor work with infrastructure with data centers and private public partnerships.

Larry: And we need to make sure we follow our clients into that and have all the appropriate certifications and ability to make sure that we're fast following and being an integral partner with them.

Speaker Change #145: So you really got to make sure that we have complete understanding of how to make sure we raise everyone's game by making sure that they have a complete and intimate understanding of our products and capabilities.

Speaker Change #145: Procore sort of stands out, frankly, as having a pretty high percentage of sales spent on sales and marketing, vis-a-vis your peers, your design peers, vertical market software peers.

Speaker Change #146: I guess just stepping back like what type of ROI do you guys need to realize or what's like the minimum threshold that you want to underwrite to before you put more dollars into a given initiative?

Larry: So those for some of the evolutionary thoughts going into it.

Speaker Change #146: And that's what enablement sales 1.0 did.

Speaker Change #146: How do you guys think about putting in additional dollars versus saying, hey, we're already sort of on the high end, let's work within our envelope of spend that we have today?

Howard Fu: ... Yeah. So, let me step back first and say that there's going to be a range of ROI and returns depending on the area of the business that we're in. The biggest example of that is when we've talked about the initial phases and the stage of evolution of international is gonna have an initial lower ROI with a much bigger-

Speaker Change #147: Yeah, so let me step back first and say that there's going to be a range of ROI and returns depending on the area of the business that we're in. The biggest example of that is when we've talked about the initial phases and the stage of evolution of international is going to have an initial lower ROI with a much bigger ROI coming in. So that's the first thing. I'll answer your question this way. When we look at the metrification of the business,

Larry: What I think is also important is that when you started a journey, whether it's an evolution transformation or whatever.

Speaker Change #147: We're already 99% on the enablement completion on that.

Speaker Change #147: And repurpose things to change the go-to-market model versus just add another 200 heads or whatever you've talked about?

Speaker Change #147: We have 99% of our sales force certified in that area today.

Larry: This is definitely an evolution is when you start in one area and you're going to a new area need to make sure that you map it out along the way and make sure that you really understand what success looks like.

Larry: And for us, what we really did is over these last five months is really make sure we understood our pipeline very, very well.

Speaker Change #147: We developed it.

Speaker Change #147: Yeah, that's a great question.

Speaker Change #147: And then we did stand and deliver videos based on AI.

Speaker Change #147: And we were able to really look at that.

Speaker Change #147: I'll first answer from a really high level, which is, I want to be clear, these investments are meant to increase the ROI that we've got. And that ROI shows up both in growth and on the margin side.

Speaker Change #147: So that was one thing that we did to raise the game of just the general sales team in general.

Nick Altmann: Yeah

[Analyst 4]: Yeah

Speaker Change #147: Then we introduced 2.0, which was more how do you move from just a transactional sale around increasing volume on your existing business to really starting to change the persona and articulate a CXO value proposition and show them how it goes across the product basis and how to connect the products into a value-based outcome that matters to CFO and at the CXO and owner level.

Larry: We can dissect it by offering by region by location so that we can make sure that we have our lives attached to each and every one of these initiatives.

Howard Fu: ROI coming in. So that's the first thing. I'll answer your question this way. When we look at the metrication of the business, another great example is if I start to see really fast velocity through the pipeline, and I start to see that curve, for example, that somebody else talked about in terms of the attainment, start to move in a certain direction, it gives me evidence that something is working, whether it's the enablement, whether it's the comp plans, whether there's a receptiveness to what we're putting together in terms of pricing and packaging. In terms of the result of that, if I start to see that working, it gives me more confidence to put more fuel on the fire there. And that's the same thing on the flip side of that as well.

Speaker Change #147: So those are the two things that we did for the general sales force.

Speaker Change #147: That's the first thing.

Speaker Change #147: Now you ask the second piece is what are we doing for the specific top performers?

Speaker Change #147: The second thing is a really good question.

Speaker Change #147: Two things.

Speaker Change #147: One is what we're really doing is making sure that we have and create a diamond model around them, which we say is, hey, listen, you're some of our top leaders. We really want to put you on the key growth accounts and the most strategic accounts.

Speaker Change #147: Another great example is if I start to see really fast...

Speaker Change #147: And they might not be the biggest.

Speaker Change #147: It might be even the smallest, but they're the most strategic based upon where we see opportunity and share of wallet.

Speaker Change #147: And really working with them and staying on a quarterly basis, meeting with them, working with them, giving them recognition as one of those top diamond members and making sure that they know that they're helping lead the way.

Speaker Change #147: In addition to that, they have to create use cases so that it can perforate to the other organization and also working with them very closely on how we can make sure that they get white glove treatment and always taken care of across the board.

Speaker Change #148: velocity through the pipeline. And I start to see that curve, for example, that somebody else talked about in terms of the attainment, start to move in a certain direction. It gives me evidence that something is working, whether it's the enablement, whether it's the comp plans, whether there's a receptiveness to what we're putting together in terms of pricing and packaging.

Speaker Change #148: So that's the way I would differentiate between the two, but making sure that enablement first and foremost is there across all sales teams.

Speaker Change #148: And then on the most strategic accounts, making sure we have that close relationship with those diamond account executives.

Larry: So one of the things that we're looking for in the transformation or the evolution is making sure we have good pipeline generation in the offering and in the product and the locations and regions where we want to grow and be known and execute it.

Speaker Change #148: I hope that answers the question.

Speaker Change #148: By the way, Larry, I want to also say to Charles that Larry's doing something that I think is really, really masterful, which is he's actually showing all of the AEs the success of our top sellers.

Speaker Change #148: And that drives a whole bunch of excitement around this transformation because it gets everybody wanting to get on board.

Speaker Change #148: So it's not just about making your top sellers more productive.

Speaker Change #148: It's about showing off their productivity to everyone else.

Speaker Change #148: And that's something that Larry's doing a great job with the team.

Speaker Change #148: Yeah, the other thing, Charles, is I want to I want to just address your your your observations and your comment about the bimodal distributions.

Speaker Change #148: In terms of the result of that, if I start to see that working, it gives me more confidence to put more fuel on the fire there. And that's the same thing on the flip side of that as well.

Speaker Change #148: That's a great example of a way that we are metrifying to the nth degree what we track.

Speaker Change #148: Because I would say that if we are starting to see a bimodal distribution in terms of attainment, then that means that there has to be something that's off in terms of either our top plans, incentive structures, or territories or enablement or something like that.

Howard Fu: As we pull those strings and go down into the org and really diagnose whether it's good, neutral, or bad, those are the things that, examples of some of the things that I will look for and engage the business on, engage Larry on, engage Tui on, engage our product and technology team on, to say, "Hey, here's what we're seeing. Here's what we think we can do better. Here's what we think we can even choose even more." And that goes into the equation and the calculus for where I decide and where we decide to allocate our resources.

Speaker Change #148: And as we pull those strings and go down into the organ, really diagnose...

Speaker Change #149: whether it's good, neutral, or bad. Those are the things that examples of some of the things that I will look for and engage the business on, engage Larry on, engage Tuvi on, engage our product and technology team on to say, hey, here's what we're seeing, here's what we think we can do better, here's what we think we can even choose even more, and that goes into the equation and the calculus for where I decide and where we decide to allocate our resources.

Speaker Change #149: And so that's a great example of what we track very closely to make sure that things are working well.

Nick Altmann: So that makes sense. Look, I know projecting ROI on any investment is always a little bit of an art and a little bit of guesswork, because-

[Analyst 4]: So that makes sense. Look, I know projecting ROI on any investment is always a little bit of an art and a little bit of guesswork, because-

Speaker Change #150: So that makes sense and I look I know projecting ROI on any investments always

Howard Fu: ...

Speaker Change #151: Oh, a little bit of an art and a little bit of guesswork, because who can know the future?

Nick Altmann: Who can know the future? But I guess maybe just stepping back, like, let's put aside, you know, initiatives like international, which, you know, understandably will take years to ramp as you build out brand awareness. Like, maybe just like within your core markets, and within kind of the customer bases you already are well known in and are fairly dominant in, like, what type of return would you want to typically see on an incremental sales hire before deciding that is something you ought to actually go ahead with?

[Analyst 4]: Who can know the future? But I guess maybe just stepping back, like, let's put aside, you know, initiatives like international, which, you know, understandably will take years to ramp as you build out brand awareness. Like, maybe just like within your core markets, and within kind of the customer bases you already are well known in and are fairly dominant in, like, what type of return would you want to typically see on an incremental sales hire before deciding that is something you ought to actually go ahead with?

Speaker Change #151: And if you have a nice distribution across your attainment levels, what that results in is a true, true pay for performance or a performance based organization, which is absolutely what we want to design for as we go through this, this transition.

Speaker Change #152: But I guess maybe just stepping back, like, let's put aside and, you know, initiatives like international, which, you know, understandably will take years to ramp as you build up brand awareness.

Speaker Change #152: There was one other part, which was how you guys want to attract more top talent and what Procore needs to do, frankly, to be a better destination for that and compete for that.

Speaker Change #152: like maybe just like within your core market.

Speaker Change #152: Ah, so let me let me let me take one my perspective on that.

Speaker Change #153: And within kind of the customer bases you already are well known in and are fairly dominant in, what type of return would you want to typically see on an incremental sales hire before deciding that is something you ought to actually go ahead with?

Howard Fu: You know, there's not going to be a one-size-fits-all, Zach, to be honest. I think the thing that I can tell you is, it's going to be greater than 1-to-1, meaning the productivity will be higher than what we are seeing today. So if there's a rep with a quota of $1 million, it will be 1.2, 1.3, 1.4. If there's a rep in a different part of the business where the quota is something below that, at $500,000, it will be $600,000, $700,000, $800,000. That's what I'm measuring. To have a one-size-fits-all that says, "Here's the threshold"-

Speaker Change #154: You know, there's not going to be a one-size-fit-all, Zach, to be honest. I think the thing that I can tell you is it's going to be greater than one-to-one, meaning the productivity will be higher than what we are seeing today.

Speaker Change #154: It's related to the top talent.

Speaker Change #154: But you know, this is also related to how we think about design in our incentive structure.

Speaker Change #155: So, if there's a rep with a quota of a million dollars, it will be 1.2, 1.3, 1.4. If there's a rep in a different part of the business,

Speaker Change #156: where the quota is something below that at 500k, it will be 600k, 700k, 800k. That's what I'm measuring. To have a one-size-fits-all that says here's the threshold, it's just

Nick Altmann: Mm-hmm

[Analyst 4]: Mm-hmm

Howard Fu: ... it's just too nuanced to say that that applies to the entire part of our business, so we have to make sure that we look at all the different nuances.

Speaker Change #156: I'll just I'll just I'll just be very upfront.

Speaker Change #156: It's too nuanced to say that that applies to the entire part of our business. So we have to make sure that we look at all the different nuances.

Speaker Change #156: There's a chance to make a lot of money if you're doing really, really well from a booking standpoint here as an age.

Nick Altmann: Gotcha. Oh, but Howard, I guess I am hearing you're saying, as you get through this transition, you think quotas are going up and the dollars of, like, gross new ARR that a, a rep within the same role should have over the dollars you are paying them all in for salary, overhead, and benefits, et cetera, like, that ratio should be improving?

[Analyst 4]: Gotcha. Oh, but Howard, I guess I am hearing you're saying, as you get through this transition, you think quotas are going up and the dollars of, like, gross new ARR that a, a rep within the same role should have over the dollars you are paying them all in for salary, overhead, and benefits, et cetera, like, that ratio should be improving?

Speaker Change #156: Okay, and this goes back to what Tiwi talked about was, when folks see that, there is a natural wave of folks that want to do that as well.

Speaker Change #156: And they will seek out ways and the word gets out that that's how you do it here at Procore, and you can make a lot of money here at Procore.

Speaker Change #158: Gotcha. Oh, but Howard, I guess I am hearing you're saying as you get through this transition, you think quotas are going up and the dollars of like gross new ARR that I

Speaker Change #159: a rep within the same role should have.

Speaker Change #160: over the dollars you were paying them all in for salary and overhead and benefits, etc. Like that ratio should be improving. Oh, it will go up. Absolutely. It will go up.

Howard Fu: Oh, it will go up.

Tooey Courtemanche: Absolutely.

Howard Fu: It will go up.

Speaker Change #160: And that goes back to the enablement, the design of the incentives, the team structures that we're putting together to make folks successful.

Nick Altmann: Again, impossible to know exactly what-

[Analyst 4]: Again, impossible to know exactly what-

Speaker Change #160: And it doesn't, it doesn't get kept a secret for all that long, to be, And can I add one more thing?

Howard Fu: Mm-hmm

Nick Altmann: It will look like in the future, but, like, what's your guys' aspiration? Like, how much do it to improve by as you go through this transition?

[Analyst 4]: It will look like in the future, but, like, what's your guys' aspiration? Like, how much do it to improve by as you go through this transition?

Speaker Change #161: Again, impossible to know exactly what it will look like in the future, but like what's your guys' aspiration? Like, how much do you want that to improve by as you go through this transition?

Speaker Change #161: You know, honestly, sales is a profession.

Howard Fu: Again, Zach, I mean, I would give you the same answer that I just gave you to your prior question, right?

Speaker Change #161: I am so proud.

Speaker Change #161: I am the frontline ambassador of our company when we go into a job and into a client site. So I need to make sure that I am the best prepared.

Speaker Change #162: Again, again Zach, I mean I would give you the same answer that I just gave you to your prior question.

Speaker Change #162: So number one is how you make sure you get talent is you show them a career path within the sales and revenue organization that's professional.

Speaker Change #162: You do enablement and certifications along the way.

Matthew Puljiz: Zach, I got to cut you off at the four-question limit, man.

Speaker Change #163: And Zach, I got to touch you off at the four question limit, man. No worries. Go ahead. Thanks, guys. Thanks, Zach. We have a lot of people in the queue, but there's actually a really sharp question I thought on that was submitted in writing. So I'd like to read this one out loud for the team here. So it's written by Ruth Bryson.

Speaker Change #163: And you create a meritocracy to really recognize the top performers and to continuously bring in world class leaders and make it as an importer of talent.

Speaker Change #163: But number one is recognition that we are completely on a strong and clear path to be a sales company that has real clear definition of that as a profession.

Nick Altmann: No worries. Go ahead. Thanks, guys.

[Analyst 4]: No worries. Go ahead. Thanks, guys.

Speaker Change #163: Sales as a profession is the number one way to attract people into any company.

Matthew Puljiz: Thanks.

Tooey Courtemanche: Thanks, Zach.

Matthew Puljiz: We have a lot of people in queue, but there's actually a really sharp question I thought on that was submitted in writing, so I'd like to read this one out loud for the team here. So it's written by Ruth Bryson. "Historically, your sales success has been, in part, not having a traditional software go-to-market and really knowing your customer's unique pain point and buying motions. This feels more like a typical enterprise software go-to-market. Can you address why this will work now, or how do you keep your previous success with the more traditional structure?

Speaker Change #163: Thanks, Charles.

Speaker Change #163: You okay if we move on to somebody else?

Speaker Change #163: Yep, thank you.

Speaker Change #164: Historically, your sales success has been in part not having a traditional software go-to-market and really knowing your customers' unique pain point and buying motions. This feels more like a typical enterprise software go-to-market. Can you address why this will work now?

Speaker Change #164: Please do it.

Speaker Change #164: Or, how do you keep your previous success with a more traditional structure?

Tooey Courtemanche: By the way, that is a great question, Ruth. I really appreciate it because it mixes both the how are we going to accelerate this without losing what got us here, right? Which is really what makes Procore special. And I will assure you and everyone else that we will never lose that customer intimacy. In fact, a lot of what this is about is about increasing that customer intimacy, but applying a more rigorous, scalable process on top of it.

Speaker Change #166: By the way, that is a great question, Ruth. I really appreciate it because it mixes both the

Speaker Change #167: How are we going to accelerate this without losing what got us here, right? Which is really what makes Procore special.

Speaker Change #168: I will assure you and everyone else that we will never lose that customer intimacy. In fact, a lot of what this is about is about increasing that customer intimacy.

Speaker Change #169: but applying a more rigorous, scalable process on top of it. So in less of a bespoke art of like, you know, building relationships between one AE and a CS member and an account.

Tooey Courtemanche: So in less of a bespoke art of like, you know, building relationships between one AE, a CS member, and an account, this is more about putting a process in place where we can actually better understand their needs, bring the right resources into that account in order to address those needs, and then to be able to capture more volume and sell them more product, just more methodically. Because otherwise, the kind of the cottage industry approach that we had used before just doesn't scale, in my mind.

Speaker Change #170: This is more about putting a process in place where we can actually better understand their needs, bring the right resources into that account in order to address those needs, and then to be able to capture more volume and sell them more product, just more methodically. Because otherwise, the kind of the cottage industry approach that we had used before just doesn't scale in my mind.

Larry: The second thing is higher productivity.

Howard Fu: I was going to say the same thing, too. Purposeful intent is the way I would see it: is doing that, getting more intimate with the client, really making sure that we understand their business, measuring that success, and making sure we have the right people within the account that can absolutely drive correctly the entire process, all the way from stage one to stage six, and make sure that we deliver on what we say and continue to expand and build that trust with the client. I think is critical. So it would be exactly how I see us going forward.

Larry Stack: I was going to say the same thing, too. Purposeful intent is the way I would see it: is doing that, getting more intimate with the client, really making sure that we understand their business, measuring that success, and making sure we have the right people within the account that can absolutely drive correctly the entire process, all the way from stage one to stage six, and make sure that we deliver on what we say and continue to expand and build that trust with the client. I think is critical. So it would be exactly how I see us going forward.

Speaker Change #170: I was going to say the same thing to you. Purposeful intent is...

Speaker Change #171: The way I would see it is doing that, getting more intimate with the client, really making sure that we understand their business, measuring that success, and making sure we have the right people within the account that can absolutely drive correctly the entire process all the way from stage one to stage six.

Speaker Change #171: and make sure that we deliver on what we say and continue to expand and build that trust with the client, I think is critical. So it would be exactly how I see us going forward.

Nick Altmann: Just from a-

Howard Fu: Just from a-

Tooey Courtemanche: By the way, I should, I should also say that I... We have the privilege of, of doing a lot more for our customers than sell them software, right? We're, we're consultative in a lot of areas, and Culture Academy is one. And I know everyone kind of discounts that a little bit, but this last week, I had my leadership in town, and we had probably, I don't know, 10 of the largest contractors in the US sitting in one of our conference rooms, talking not about Procore software, but about how to elevate the industry through, culture and business values. And, and the fact that we have that brand and that they look to us to be that kind of a partner, doesn't go away with this new model. We, we will always have those special relationships.

Speaker Change #172: By the way, I should also say that we have the privilege of doing a lot more for our customers than sell them software, right? We're consultative in a lot of areas, and Culture Academy is one, and I know everyone kind of discounts that a little bit, but this last week, I had my leadership in town, and we had probably, I don't know, ten of the largest contractors in the U.S. sitting in one of our conference rooms, talking not about Procore software, but about how to elevate the industry through culture and business values.

Speaker Change #173: and the fact that we have that brand and that they look to us to be that kind of a partner doesn't go away with this new model. We will always have those special relationships.

Howard Fu: ... Yeah, the other piece that I'll just add, Ruth, is that, look, if there are areas of the business where productivity is actually pretty good, and there are some that we're seeing strengthen relatively, for example, in the upper end of the market, that's not immune from the benefits of this model that we are moving to. So even if you're doing well today, and there are pockets that are doing well today, this model, I think, not just supports it, but I think it should accelerate it. Sorry, Larry, I'm raising your quota because of this, even though those are doing well. And that's the way that I'm approaching this. It's not to fix things that are bad.

Speaker Change #174: Yeah, the other piece that I'll just add, Ruth, is that, look, if there are areas of the business where productivity is actually pretty good and there are some that we're seeing strengthen relatively, for example, in the upper end of the market, that's not immune from the benefits of this model that we are moving to. So even if you're doing well today and there are pockets that are doing well today, this model, I think, not just supports it, but I think it should accelerate it. Sorry, Larry, I'm raising your quota because of this, even though those folks are doing well. And that's the way that I'm approaching this.

Larry: We're seeing our productivity starting to move up just from the enablement alone, but we want to continue to see that higher productivity, higher retention rate, greater expansion rates and the cross sell, you know, being able to cross sell add new logos and of course enter those key markets that we're always there and looking to do.

Larry: So those are some of the areas where we really want to make sure and how we're measuring it each by inch step by step.

Larry: So as we start the journey and we lose started the short and going to the next short, we want to make sure everybody knows along the way that these are the steps that we're taking and executing it.

Larry: And we have clear ROI initiatives attached to each one of them.

Howard Fu: It's really an offensive move to really accelerate and supercharge how we're doing things today for what we need going forward.

Speaker Change #175: It's not to fix things that are bad, it's really an offensive move to really accelerate and supercharge how we're doing things today or what we need going forward.

Larry: So we can say, hey, this one's working.

Larry: Let's use this one or let's reduce this one.

Speaker Change #175: Thank you.

Howard Fu: Yeah, good question, Ruth, as always. Let's go back to the panel here. RK Mahendran.

Matthew Puljiz: Yeah, good question, Ruth, as always. Let's go back to the panel here. RK Mahendran.

Larry: And that, you know, and I'm sure how it's going to offer a better perspective than I on this.

Speaker Change #175: Yeah, good question, Ruth. As always, let's go back to the panel here. R.K. Mahendran.

Larry: But at the same point, it's really the symbiotic relationship between Howard and myself and our teams working together to make sure that this journey's a max ROI event and we do it in the right and prescriptive way.

Speaker Change #175: Thanks, guys.

RK Mahendran: Hey, can you guys hear me?

Speaker Change #175: All right, let's do Dennis Peery.

Howard Fu: We got you.

Larry Stack: We got you.

Speaker Change #175: i

Speaker Change #176: Hey, can you guys hear me? We got you.

Speaker Change #176: Hey there.

Tooey Courtemanche: Sure.

RK Mahendran: Well, thanks for the time. Two questions. One is, one thing I picked up, I think, at the earnings call and even today, and I think to your example about a customer about to churn, sort of raises the question: Are some of these go-to-market changes a response to what you're maybe seeing a slip in retention? I think you guys talked about contraction and, maybe more competitive intensity. And then I'll follow up with my second question here in a second.

Speaker Change #177: Well, thanks for the time. Two questions. One is one thing I picked up I think at the earnings call and even today and I think to your example about a customer

Speaker Change #178: about to churn, sort of raises the question, are some of these go-to-market changes a response to what you may be seeing a slip in retention? I think you guys talked about contraction and

Larry: Finally, what I would say before I turn over the mic is, you know, one of the key lessons that you learn into all these things after 25 years and three large transformations is, you got to make sure that you communicate early and often to all the stakeholders.

Larry: You got to be honestly real authentic and specific and I hope to do that to all today and answer any question you have in the transparent way as I can.

Speaker Change #178: Maybe more competitive intensity and then I'll follow up with my second question here in a second.

Tooey Courtemanche: Well, I'll just say that this is definitely not in response to any weakness in the business. I want to assure you. In fact, that example I used wasn't really about churn. It was about... and I want to be specific. If they were going to reduce their volume, they might have reduced their volume. They weren't going to leave Procore, which is the good news. But what we're finding is that the deeper we get these engagements with these customers, the more we can actually show the value, and then therefore, the more they want to buy from Procore. So it's kind of as simple as that. It's a this is very much a we're leaning into something.

Speaker Change #180: Well, I'll just say that this is definitely not in response to any any weakness in the business I want to assure you. In fact that example I used wasn't really about churn It was about, and I want to be specific, if they were going to reduce their volume, they might have reduced their volume They weren't going to leave Procore, which is the good news

Speaker Change #181: But what we're finding is that the deeper we get these engagements with these customers, the more we can actually show the value, and then therefore the more they want to buy from Procore.

Larry: Illustrated is journey ahead and the various milestones and do that inch by inch ROI and making sure everyone sees that, articulate the value of the change for the market, our associates and our clients and make sure I think we did a good job without their clients and our associates really going in and talking to our advisory board, talking to clients, getting them to make sit, you know, through a common plan saying, does this add value is just going to build your business do you see the outcome that we're trying to drive and get those validation and the biggest one I have to tell you is how the full management buy in that this is not an individual, initiative, this is a corporate initiative and that this corporate initiative is all of us working together so that we can see that trajectory for the focus ahead where we're not only shareholders, but we're also, you know, shareholders with process and we do need to do the very best and we have to do it together in a unified way.

Speaker Change #181: It's kind of as simple as that. This is very much a, we're leaning into something. When you sit in a meeting with a customer and they tell you that they want to buy a product that they didn't even know you had before you sat down in that meeting.

Larry: That is the reason why it came to pro court because I saw 100% where they were building a top notch go to market evolution.

Tooey Courtemanche: When you sit in a meeting with a customer, and they tell you that they want to buy a product that they didn't even know you had, and before you sat down in that meeting, that that's an indication that you need to do a better job of really becoming intimate and letting them know what's available. And we're seeing lots of that, so we just want to capitalize on that.

Larry: I got to be a part of that look at it.

Speaker Change #181: that's an indication that you need to do a better job of really becoming intimate and letting them know what's available and we're seeing lots of that so we just want to capitalize on that.

Larry: I got to validate it with our clients.

RK Mahendran: Thanks, Tui. Maybe the second question I have is how you sort of made the decision around the additional investment. Procore sort of stands out, frankly, as having a pretty high percentage of sales spent on sales and marketing vis-a-vis your peers, your design peers, vertical market software peers. How do you guys think about putting in additional dollars versus saying, "Hey, we're already sort of on the high end. Let's work within our envelope of spend that we have today, and repurpose things to, you know, change the go-to-market model," versus just, you know, add another 200 heads or whatever you talked about?

Speaker Change #182: And no, thanks, Thuy. Maybe the second question I have is how you sort of...

Speaker Change #182: made the decision around the additional investment. Procore sort of stands out, frankly, as having a pretty high percentage of sales spent on sales and marketing.

Larry: I got to execute with them and I gotta tell you it's super cool.

Speaker Change #183: vis-a-vis your peers, your design peers, vertical market software peers.

Speaker Change #184: How do you guys think about putting in additional dollars versus saying, hey, we're already sort of on the high end, let's work within our envelope of spend that we have today, and repurpose things to change the go-to-market model versus just add another 200 heads or whatever you're talking about. Yeah, that's a great question. I'll first answer from a really high level, which is, I want to be clear.

Howard Fu: Yeah, that's a great question. The first... I'll first answer from a really high level, which is, I want to be clear, these investments are meant to increase the ROI that we've got, and that ROI shows up both in growth and on the margin side. That's the first thing. The second thing is a really good question, and I'll tell you, one of the things we probably could have been better at in terms of making sure that folks understood is, this is not a pure incremental investment because we have been operating to get as efficient as possible over the last couple of years, and we've proven to ourselves that we can do that, and that continues into fiscal 25 and beyond, 26, 27, and so forth. That mentality doesn't stop.

Larry: I'm super happy to be here.

Speaker Change #185: These investments are meant to increase the ROI that we've got and that ROI shows up both in growth and on the margin side. That's the first thing.

Larry: I'm honored to take any questions and I hope that was a little bit of good insight for you as we start the Q&A.

Unknown Executive: So Matt, I'll turn it over to you, sir, if that's okay.

Speaker Change #185: And I'll tell you, one of the things we probably could have been better at in terms of making sure that folks understood is, this is not a pure incremental investment, because we have been operating to get as efficient as possible over the last couple of years.

Speaker Change #185: And we've proven to ourselves that we can do that.

Speaker Change #185: And that continues into fiscal 25 and beyond 26, 27, and so forth.

Speaker Change #185: The second thing is a really good question, and I'll tell you, one of the things we probably could have been better at in terms of making sure that folks understood is

Unknown Executive: Thank you, Larry.

Unknown Executive: So as I put in the chat, if you're an investor and would like to ask a question, please use the raise hand function on the Zoom.

Speaker Change #186: This is not a pure incremental investment, because we have been operating to get as efficient as possible over the last couple of years, and we've proven to ourselves that we can do that, and that continues into fiscal 25 and beyond, 26, 27, and so forth. That mentality doesn't stop.

Unknown Executive: We'll go through kind of one at a time and we've also noted the ones that you submitted in writing and we'll kind of address those as well once the people that have raised their hand are completed.

Tim Brown: So let's start with Tim Brown.

Speaker Change #186: That mentality doesn't stop. And that mentality and the efficiencies that we continue to get will partially offset the incremental investments that we need on the go-to-market side.

Tim Brown: Hey guys, good to see everyone.

Howard Fu: That mentality and the efficiencies that we continue to get will partially offset the incremental investments that we need on the go-to-market side. I'll tell you that efficiency also comes directly from places in go-to-market as well, as well as other places that we've already seen around R&D, and definitely G&A as well, as we continue to go through this, this transition and this evolution. Even when we get past this transition and this change, that mentality does not leave Procore. I won't let that mentality leave Procore.

Tim Brown: Thanks for taking the time to chat with us.

Speaker Change #187: And that mentality and the efficiencies that we continue to get will partially offset the incremental investments that we need on the go-to-market side. And I'll tell you that efficiency also comes directly from places in go-to-market as well, as well as other places that we've already seen around R&D and definitely G&A as well as we continue to go through this transition and this evolution.

Tim Brown: To Ian, you're really helpful to hear about the customer specific group points that you're seeing.

Tim Brown: Kind of how that's informing the plan and then Howard on the call.

Speaker Change #188: Even when we get past this transition and this change, that mentality does not leave ProCorp. I won't let that mentality leave ProCorp.

Tooey Courtemanche: No, he won't.

Speaker Change #189: that we still will continue to make sure that we continue improving margins until we get to best-in-class and the path there depends on what we can get on that on the revenue growth side and we're deliberate about that.

Howard Fu: That, we still will continue to make sure that we continue improving margins until we get to best-in-class. And the path there depends on what we can get on that, on the revenue growth side, and we're deliberate about that.

RK Mahendran: I definitely have a ton more questions, but I'll stand down. Thank you, guys.

Speaker Change #189: I definitely have a ton more questions, but I'll stand down. Thank you, guys. Thanks, Arte. Appreciate you. All right, let's do Albert Wang next, please.

Tooey Courtemanche: Thanks. Thanks, RK. Appreciate you.

Howard Fu: All right, let's do Albert Wang, yeah, next, please.

Matthew Puljiz: All right, let's do Albert Wang, yeah, next, please.

Albert Wang: Hey, guys, thanks. Understanding that there's going to be a lot of operational and personal change across different departments within your organization, can you share some of the key OKRs by which you're measuring, Larry, success, and sort of how that gives confidence that the go-to-market change is progressing at the rate that you'd like? And then ultimately, like, how are those objectives tied to efficient revenue or bookings growth? Thanks.

[Analyst 1]: Hey, guys, thanks. Understanding that there's going to be a lot of operational and personal change across different departments within your organization, can you share some of the key OKRs by which you're measuring, Larry, success, and sort of how that gives confidence that the go-to-market change is progressing at the rate that you'd like? And then ultimately, like, how are those objectives tied to efficient revenue or bookings growth? Thanks.

Speaker Change #190: Hey guys, thanks.

Speaker Change #191: Understanding that there's going to be a lot of operational and personal change across different departments within your organization, can you share...

Speaker Change #191: some of the key OKRs by which you're measuring Larry's success.

Speaker Change #191: and sort of how that gives confidence that the go-to-market change is progressing at the rate that you'd like.

Speaker Change #191: And then ultimately, like, how are those objectives tied to efficient revenue or booking spread? Thanks.

Tooey Courtemanche: You want me to start?

Albert Wang: Sure.

Howard Fu: Sure.

Tooey Courtemanche: So, Albert, the way I've been kind of characterizing this is that we have several epics that we're going through. We're in this first epic, which is between now and the end of the year, as we're building the machine, hiring the people, and setting everything up for January 1, when, you know, people get new comp plans, territories, and all that. Not to say that we're not actually implementing this as we go, and but there, a lot of change is going to happen around January 1. So we are, we're very focused on that. So what that entails is things like is Larry hitting his hiring plans, specifically across the leadership underneath the people that he's already hired.

Speaker Change #191: And I'll tell you, that efficiency also comes directly from places in go-to-market as well, as well as other places that we've already seen around R&D, and definitely G&A as well, as we continue to go through this transition and this evolution.

Speaker Change #191: You want me to start? Sure. So, Albert, the way I've been kind of characterizing this is that we have several epochs that we're going through. We're in this first epoch, which is between now and the end of the year, as we're building the machine and hiring the people and

Speaker Change #191: Even when we get past this transition and this change, that mentality does not leave Procore.

Speaker Change #191: I won't let that mentality leave Procore.

Speaker Change #191: We still will continue to make sure that we continue improving margins until we get to best in class.

Speaker Change #191: I definitely have a ton more questions, but I'll stand down.

Speaker Change #191: And the path there depends on what we can get on the revenue growth side.

Speaker Change #191: And we're deliberate about that.

Speaker Change #191: Thank you, guys.

Speaker Change #191: Thanks, Arte.

Speaker Change #191: Appreciate you.

Speaker Change #194: setting everything up for January 1 when, you know, people get new cop plans and territories and all.

Speaker Change #195: all that. Not to say that we're not actually implementing this as we go and but a lot of change is going to happen around January 1.

Tim Brown: One thing that you know said that kind of stood out was that obviously you expect this to drive more growth, but also improved sales efficiency over time.

Speaker Change #196: And so we're very focused on that. So what that entails is things like, is Larry hitting his hiring plans.

Speaker Change #197: specifically across the leadership underneath the people that he's already hired. Is he getting all of the specialists on board at the pace in which we can? Are we seeing the overlay teams coming into practice? Are we actually seeing these analogs that we're already running right now in parallel being productive?

Tooey Courtemanche: Is he getting all of the specialists on board at the pace in which we can? Are we seeing the overlay teams coming into practice? Are we actually seeing these analogs that we're already running right now in parallel being productive? And then, finally, are we actually starting to see rep productivity increase? Those are the kind of things that we'll look for. Then once we get into next year, where the entire team's on board with this, it'll be much more focused on mostly productivity, I would imagine.

Tim Brown: And so in the success case that this plan works, I'd love to just more specifically understand the key drivers of that improved sales efficiency that you expect and that we should think about over the next few years and then conversely in the scenario that it doesn't work out and put his plan.

Tim Brown: How are you tracking that and then how should we think about your response in that scenario?

Howard: Yeah.

Speaker Change #198: And then finally, we're actually starting to see rep productivity increase. Those are the kind of things that we'll look for. Then once we get into next year where the entire team's on board with this, it'll be much more focused on mostly rep productivity, I would imagine.

Howard: So why don't I take that last one first and then do you feel you can jump in there.

Speaker Change #198: All right, let's do Albert Wang next, please.

Howard Fu: Yeah. So Albert, I'll answer it this way. I wanna be clear that the OKRs that you asked for, there's gonna be a lot of specifics, obviously.

Speaker Change #199: Yeah, so Albert, I'll answer it this way. I want to be clear, the OKRs that you asked for, there's going to be a lot of specifics, obviously, that we can't talk about in terms of what we do internally. But one thing I want to be clear, those OKRs are not just Larry's. So I'll give you a great example.

Tooey Courtemanche: Yes

Howard Fu: that we can't talk about in terms of what we do internally. But I want one thing I wanna be clear, those OKRs are not just Larry's. So I'll give you a great example. When we look at the mix of our bookings, as an example, you would think that that's, "Hey, that's a go-to-market OKR." Maybe. Sure it is, but it's also an OKR for product. Because one of the things I wanted to make sure is, not only do we have a healthy mix as we grow of new logo dollars, but expansion dollars, but also upsell and cross-sell dollars. When you start to get into something like that, the product and technology organization has a heavy influence on what that mix looks like over the longer term, as we continue to monetize the products that come off our conveyor belt.

Speaker Change #199: When we look at the mix of our bookings, as an example, you would think that that's, hey, that's a go-to-market OKR. Maybe. Sure it is.

Speaker Change #200: But it's also an OKR for product, because one of the things I wanted to make sure is not only do we have a healthy mix as we grow of new logo dollars, but expansion dollars, but also upsell and cross-sell dollars.

Speaker Change #201: When you start to get into something like that, the product and technology organization has a heavy influence on what that mix looks like over the longer term as we continue to monetize the products that come off our conveyor belt.

Howard Fu: And so when you ask about specific OKRs for the go-to-market organization, sure, it's gonna be things like bookings. It's gonna be things like hiring. But the way that we think about it is highly integrated across all the different parts of the business, particularly as we think about how this evolves over multiple years. Yeah. Thanks, Albert. All right, let's try to do at least one more. Drew Besser?

Speaker Change #202: And so when you ask about specific OKRs for the go-to-market organization, sure, it's going to be things like bookings. It's going to be things like hiring, but the way that we think about it is highly integrated across all the different parts of the business, particularly as we think about how this evolves over multiple years.

Tooey Courtemanche: Yeah.

Matthew Puljiz: Thanks, Albert. All right, let's try to do at least one more. Drew Besser?

Speaker Change #202: Yeah.

Howard: So in terms of the productivity, you know, Larry touched on some of these things, but some of the metrics and the metrics that we're going to look at and track very closely are things like pipeline velocity, close rates, all those different things.

Speaker Change #202: Thanks Albert. All right but try to do at least one more. Drew Besser

Speaker Change #202: Can you hear me?

Speaker Change #202: Hey guys, thanks.

Andrew Sherman: Hey, guys. Can you hear me?

[Analyst 4]: Hey, guys. Can you hear me?

Howard Fu: We got you.

Tooey Courtemanche: Got you, Drew.

Speaker Change #203: Hey guys, can you hear me? We got you. Thanks for taking the time. Hopefully a quick one.

Andrew Sherman: Thanks. Thanks for taking the time. Hopefully, a quick one. I think we've talked before about how reaching the long tail is less efficient, and you guys made comments at the start of the year around doubling down on the larger GC market. I guess first question is, should we read this as a continuation of the prioritization about market over downmarket? And then I guess second question is, how the channel fits into all this, i.e., which customer segments are you guys looking for the channel to engage with? Thanks.

[Analyst 4]: Thanks. Thanks for taking the time. Hopefully, a quick one. I think we've talked before about how reaching the long tail is less efficient, and you guys made comments at the start of the year around doubling down on the larger GC market. I guess first question is, should we read this as a continuation of the prioritization about market over downmarket? And then I guess second question is, how the channel fits into all this, i.e., which customer segments are you guys looking for the channel to engage with? Thanks.

Speaker Change #203: Yeah.

Speaker Change #203: Understanding that there's going to be a lot of operational and personal change across different departments within your organization, can you share some of the key OKRs by which you're measuring Larry's success and sort of how that gives confidence that the go-to-market change is progressing at the rate that you'd like?

Howard: But ultimately it results in a productivity measured as the dollars that every single A E brings in in any particular period.

Speaker Change #204: I think we've talked before about how reaching the long tail is less efficient, and you guys made comments at the start of the year around doubling down on the larger GC market.

Speaker Change #204: And then ultimately, like, how are those objectives tied to efficient revenue or booking spread?

Howard: And ultimately what that's going to result in is it results in higher revenue growth and increased margins because we wouldn't do this if there we didn't think that there was a high ROI for this. And the expectation is that as we go through this transformation, as we go through this, go through this change, the expectation is that we get into fiscal 25 and fiscal 26 and fiscal 27 a little on term that those productivity increases will then result in higher revenue growth and margin growth. So the ROI has to have to be there.

Speaker Change #205: I guess first question is, should we read this as a continuation of the prioritization about market over down market? And then I guess second question is, how the channel fits into all this, i.e., which customer segments are you guys looking for the channel to engage with? Thanks.

Howard: And so we are going to metrify the living hell out of every single aspect of this business.

Howard: And to your second part of that question, look, you know, if we start to see that there are areas that are not working or if we're not starting to see some of the growth that we would expect to the ROI that we expect out of this transition, particularly on the top line, then we will adjust accordingly in terms of our expense profile.

Speaker Change #205: Okay.

Speaker Change #205: Thanks.

Howard Fu: Who wants to go, yeah, who wants to go first, go ahead.

Speaker Change #205: Thanks, everyone, for putting this together.

Speaker Change #205: You want me to start?

Speaker Change #205: Larry, just a question for you.

Speaker Change #205: Sure.

Tooey Courtemanche: I keep hogging it. Actually, why don't I just say that, yes, it is definitely an indication that we see a lot of opportunity upmarket, and a lot of the motions that we're talking about are primarily upmarket motions. So yeah. But if, Howard, you wanna chime in?

Speaker Change #205: What have you found as far as the capability of sales leadership and reps at Procore?

Speaker Change #205: So Albert, the way I've been kind of characterizing this is that we have several epochs that we're going through. We're in this first epoch, which is between now and the end of the year, as we're building the machine and hiring the people and setting everything up for January 1, when people get new comp plans and territories and all that.

Speaker Change #206: wants to go first. I keep hogging it. Actually why don't I just say that yes it is definitely an indication that we see a lot of opportunity up market and a lot of the motions that we're talking about are primarily up market motions.

Speaker Change #206: Would also be curious as to your desire to bring in, you know, some of your old hands or lieutenants, and then, is finally to what degree maybe some of your old lieutenants would need some time to ramp to learn how to sell apps as opposed to infrastructure.

Speaker Change #206: When you asked me to observe the Salesforce, I'd say that we had a transactional based Salesforce that really was designed on volume increase, versus really cross selling and upselling on the platform was the biggest thing.

Speaker Change #206: Not to say that we're not actually implementing this as we go, but a lot of change is going to happen around January 1.

Howard: And we will adjust accordingly in terms of the trajectory of our margin growth.

Speaker Change #206: Yeah, it's a great point.

Speaker Change #206: So when I look at talent, I look at who can consultatively sell and bring in a platform and have that strong SaaS experience.

Speaker Change #206: And so we're very focused on that.

Speaker Change #206: And so first of all, I told you, I'd be honest, real and authentic.

Speaker Change #206: And so when I came here, I would tell you that I saw that our clients love us.

Speaker Change #206: They love our product that I could see, without any doubt.

Howard: So the lower the growth and if we start to see things not working, we will absolutely continue to increase at a higher rate our margin growth.

Howard: And remember the expectation is that expansion continues to grow, retention continues to improve productivity continues to improve and that margin continues, to improve.

Speaker Change #206: And that's what I look for.

Speaker Change #206: I don't really look for bringing in old talent or people that I know are former lieutenants.

Speaker Change #206: What I really do look for is who's got the right ability to come in here and help us drive a strong local presence, a strong consultative selling motion, starting to sell the platform and really connect the dots on the enterprise and show those CXO value propositions.

Speaker Change #206: And I think that's what we can most approve the Salesforce and have the biggest bang for the buck, if you will.

Speaker Change #206: I hope that helps.

Howard Fu: Yeah, the other thing I'll add is I wanna just reiterate, just structurally and philosophically, it's important for all three, quote-unquote, segments in terms of upmarket, mid-market, just like it is for all three stakeholders to continue to engage in our platform, for our customers and for Procore to realize the full value of this relationship between Procore and our customers. So while the go-to-market piece downmarket is not as efficient as we ultimately want it to be in terms of it still being a direct model, the participation is still important. As we think about getting into our multiple years, we obviously will start to look at how to get more efficient there. It could be through partners downmarket. That's something that we are-- we will explore. It could be through a combination of that and pricing and packaging.

Speaker Change #206: It does, yeah, I mean, I guess, could I ask?

Speaker Change #206: I guess is the thinking that there are some people within the organization today whose responsibilities, you know, they get a tap on the shoulder and say, Hey, we'd like to do more of you.

Speaker Change #207: So yeah, but if Howard, do you want to?

Speaker Change #208: The other thing I'll add is I want to just reiterate just structurally and philosophically, it's important for all three, quote unquote, segments in terms of upmarket and midmarket, just like it is for all three stakeholders to continue to engage in our platform.

Howard: Yeah, I think the best thing I want to say about or just kind of coming over the top of this one is we will definitely be tracking to make sure the contraction is, you know, lessening and that we're able to expand both attracting more volume and doing more cross sell but I think Howard's point is the one that we really want to convey, which is we are going to be watching this thing day in and day out and where we're seeing areas of strength, we're going to double down and where we're seeing areas of weakness, we're going to retrench and possibly retreat a little bit on those things so we're going to be very much involved in making sure that we're driving the highest ROI is possible of this but the other piece that Tim I'm glad you pointed out was we're seeing it, we're seeing it in these accounts that we're able to put the right teams on for the right amount of time and getting the right people in the right rooms talking about the value that Procore brings and and just super confident that we're on the right track.

Tim Brown: Awesome, thank you guys.

Tim Brown: Thank you.

Speaker Change #209: for our customers and for Procore to realize the full value of this relationship between Procore and our customers. So while the go-to-market piece down market is not as efficient as we ultimately want it to be in terms of still being a direct model, the participation is still important.

Charles Stone: Let's do Charles Stone next, please.

Charles Stone: Charles, are you unmuted? It looks like he is.

Charles Stone: All right, Charles, we cannot hear you if you can hear me.

Speaker Change #210: As we think about getting into out multiple years, we obviously will start to look at how to get more efficient there. It could be through partners down market. That's something that we will explore. It could be through a combination of that in pricing and packaging. But the important thing is that it's efficiency that we're looking for across the board. And I'll tell you, down market is not the only place I'm looking for it.

Charles Stone: Okay, we're working.

Charles Stone: Yes.

Charles Stone: Okay, so sometimes when you see when we have with companies grow bigger and a bit more complex, one symptom on the Salesforce side can be the Salesforce gets more by modal and that you have more spread between the top reps and the average.

Howard Fu: The important thing is that it's efficiency that we're looking for across the board, and I'll tell you, downmarket is not the only place I'm looking for it. Okay, let's do one more. Kunal, please.

Howard Fu: The important thing is that it's efficiency that we're looking for across the board, and I'll tell you, downmarket is not the only place I'm looking for it.

Matthew Puljiz: Okay, let's do one more. Kunal, please.

Speaker Change #211: Okay, let's do one more. Kunal, please.

Charles Stone: So can you talk specifically about on the one side how you want to raise the productivity the average rep and the other hand, what are you doing to try and make Procore more attractive to the top talent you'd like to potentially attract extra.

Speaker Change #211: So you're going to now be in a leadership position and nurture more people to do it like you do, or you think it's going to be more external hires who come from other software companies where they're familiar with solution selling that sort of thing?

Tooey Courtemanche: I think you're on mute.

Speaker Change #212: I think you're on mute.

Larry: Yeah, that's a great question.

Howard Fu: Kunal, are you there?

Speaker Change #212: I love the combination of both, you know, bringing up and the enablements really for our folks here.

Speaker Change #212: How do we increase productivity through enablement and enablement 1.0 was to fall in love with our offerings and make sure we had a refreshed view of them because our product teams are going fast.

Tooey Courtemanche: Still on mute.

Speaker Change #212: i

Speaker Change #212: And then the second piece of that was, is how do we switch from transactional to consultative selling?

Speaker Change #212: Kunal, are you there? Still on mute.

Howard Fu: All right. We will... Kunal, if you come back around, we'll try to squeeze you in. Let me do one more that has been-

Matthew Puljiz: All right. We will... Kunal, if you come back around, we'll try to squeeze you in. Let me do one more that has been-

Speaker Change #213: All right.

Speaker Change #214: We will, Kunal, if you come back around, we'll try to squeeze you in. Let me do one more that has been... I've read the tight ship. Yeah. Well, it's like 5 o'clock on the East Coast, so I know they want to get going. There was a question submitted that I thought would be interesting to share. The IR teams have been getting this quite a bit, actually, which is...

Tooey Courtemanche: Matt read the tight ship.

Howard Fu: Yeah. It's like 5 o'clock on the East Coast, so I know they wanna get going. There was a question submitted that I thought would be interesting to share. The IR team's been getting this quite a bit, actually, which is: How are you thinking about price and product bundle packaging? Is that an area where you will be experimenting with as well as part of this announcement?

Matthew Puljiz: Yeah. It's like 5 o'clock on the East Coast, so I know they wanna get going. There was a question submitted that I thought would be interesting to share. The IR team's been getting this quite a bit, actually, which is: How are you thinking about price and product bundle packaging? Is that an area where you will be experimenting with as well as part of this announcement?

Larry: Is it okay if I answer that one, Matt?

Larry: Yeah, go for it.

Speaker Change #215: How are you thinking about price and product bundle packaging? Is that an area where you will be experimenting with as well as part of this?

Larry: What did you all take you one of the things so enable me there's an old saying in there in the sales world is you don't sell what you don't know.

Speaker Change #215: And you've been in the field.

Larry: So you really got to make sure that we have complete understanding of how to make sure we raise everyone's game by making sure that they have a complete and intimate understanding of our products and capabilities and that's with enablement sales 1.0 did.

Tooey Courtemanche: Hey, Matt, I think we already answered that one.

Larry: We're already 99% on the enable only completion on that we have 99% of ourselves were certified in that area today.

Speaker Change #216: Announcement. Hey, Matt, I think we already answered that one. Yeah, we did. Yeah. So let's pull another one. OK, let's see Larry up. I want everyone to hear more from Larry. Well, Larry, there's one that came in on writing, too, which is like, how do you want to be evaluated through all this?

Howard Fu: Yeah, we did.

Larry Stack: Yeah, we did.

Larry: We we developed it and then we did stand and deliver videos based on AI and we were able to really look at that so that was one thing that we did to raise the game of just the general sales team in general.

Tooey Courtemanche: Yeah. So let's pull another one.

Larry: Then we introduced 2.0 which was more of how do you move from just a transactional sale around increasing volume on existing business to really starting to change the persona and articulate a CXO value proposition and show them how it goes across the product basis and how to connect the products into a value based outcome that matters to TFO and at the CXO and owner level.

Speaker Change #216: So how do we make sure that?

Speaker Change #216: What that entails is things like, is Larry hitting his hiring plans, specifically across the leadership underneath the people that he's already hired?

Howard Fu: Okay.

Tooey Courtemanche: So let's tee Larry up. I want everyone to hear more from Larry.

Howard Fu: Well, Larry, there's one that came in on writing too, which is like: How do you want to be evaluated through all this?

Speaker Change #216: So I don't want to disrupt that.

Speaker Change #216: Is he getting all of the specialists on board at the pace in which we can?

Matthew Puljiz: Well, Larry, there's one that came in on writing too, which is like: How do you want to be evaluated through all this?

Speaker Change #216: Are we seeing the overlay teams coming into practice?

Speaker Change #216: Are we actually seeing these analogs that we're already running right now in parallel being productive?

Larry: So those are the two things that we did for the general sales force.

Howard Fu: Yeah, it's exactly what they talked about. I like it in a very holistic level of making sure that this is a, not a go-to-market modification or evolution or transformation, it is a corporate initiative to continue to do it. So I would love to be evaluated by how well we go in and, how well we retain our clients, how well we increase the customer experience, how well we upsell and cross-sell, and become that viable customer, intimate customer, advisor.

Larry Stack: Yeah, it's exactly what they talked about. I like it in a very holistic level of making sure that this is a, not a go-to-market modification or evolution or transformation, it is a corporate initiative to continue to do it. So I would love to be evaluated by how well we go in and, how well we retain our clients, how well we increase the customer experience, how well we upsell and cross-sell, and become that viable customer, intimate customer, advisor.

Speaker Change #217: Yeah, it's exactly what they talked about. I like it in a very holistic level of making sure that this is not a go-to-market modification or evolution or transformation. It is a corporate initiative to continue to do it. So I would love to be evaluated by how well we go in.

Larry: Now you ask the second piece is what are we doing for the specific top performers two things.

Larry: One is what we're really doing is making sure that we have and create a diamond model around them, which we say is hey listen you're some of our top leaders.

Larry: We really want to put you on the key growth accounts in the most strategic accounts and they might not be the biggest it might be even the smallest but they're the most strategic based upon where we see opportunity and share wallet and really working with them and staying on a poorly basis meeting with them working with them given the recognition as one of those top diamond members and making sure that they know that they're helping leads away.

Larry: In addition to that they have to create news cases so that it can put right to the other organization and also working with them very closely on how we can make sure that they get wake well treatment and always taking care of across the board.

Larry: So that's the way I would differentiate between the two but making sure that enablement first and foremost is there across all sales teams and then on the most strategic accounts making sure we have that close relationship with those diamond account executives.

Speaker Change #217: and how well we retain our clients, how well we increase the customer experience.

Speaker Change #218: How will we upsell and cross-sell and become that viable, intimate customer advisor? That's exactly the way I would love to do that because what I would see is that if I'm deep in each of these clients

Larry: I hope that answers the question.

Howard Fu: That's exactly the way I would love to do that, because what I would see is that if I'm deep in each of these clients, and I'm expanding in each of these clients, and I'm articulating value every day to each of these clients, that they're gonna see me as a value partner, and they're gonna continue to build with me, and renewal rates, higher revenues, everything comes with that fundamental piece. So I would love to be, you know, say, I would love my legacy here to be as well, is that we really brought huge value to the client with Procore's products and capabilities.

Larry Stack: That's exactly the way I would love to do that, because what I would see is that if I'm deep in each of these clients, and I'm expanding in each of these clients, and I'm articulating value every day to each of these clients, that they're gonna see me as a value partner, and they're gonna continue to build with me, and renewal rates, higher revenues, everything comes with that fundamental piece. So I would love to be, you know, say, I would love my legacy here to be as well, is that we really brought huge value to the client with Procore's products and capabilities.

Speaker Change #218: and I'm expanding in each of these clients and I'm articulating value every day to each of these clients.

Speaker Change #219: that they're going to see me as a valued partner, and they're going to continue to build with me, and renewal rates...

Speaker Change #220: Craig Courtemanche, Matthew Puljiz

Speaker Change #220: And then finally, are we actually starting to see rep productivity increase?

Howard Fu: I have to say this because I'm the CFO. Larry, I'm evaluating you on your bookings attainment performance, so-

Speaker Change #220: I have to say this because I'm a CFO. Larry, I'm evaluating you on your bookings attainment performance. Of course.

Howard Fu: Of course.

Larry Stack: Of course.

Speaker Change #220: Those are the kinds of things that we'll look for.

Howard Fu: I just have to.

Speaker Change #220: And then once we get into next year, where the entire team's on board with this, it'll be much more focused on mostly rep productivity, I would imagine.

Howard Fu: Yeah, but I think that was more of an OK. You know, you know, there's, there's obviously those very direct ones, but also I want those other softer ones because those are foundation to how to make sure that we're critical and how we're developing from where we are today to where we're going in the future. And getting that stickiness with the client, getting that intimacy, and thinking about the client every day and how we're gonna add value to them, is ultimately what we're trying to accomplish here on every single person, enabling our people to do that. And to me, that's our legacy.

Larry Stack: Yeah, but I think that was more of an OK. You know, you know, there's, there's obviously those very direct ones, but also I want those other softer ones because those are foundation to how to make sure that we're critical and how we're developing from where we are today to where we're going in the future. And getting that stickiness with the client, getting that intimacy, and thinking about the client every day and how we're gonna add value to them, is ultimately what we're trying to accomplish here on every single person, enabling our people to do that. And to me, that's our legacy.

Speaker Change #220: Yeah, so Albert, I'll answer it this way.

Speaker Change #220: I want to be clear that the OKRs that you asked for, there's going to be a lot of specifics, obviously, that we can't talk about in terms of what we do internally.

Speaker Change #220: But one thing I want to be clear, those OKRs are not just Larry's.

Speaker Change #221: Yeah, but I think that was more of an okay, you know, you know, there's there's obviously those very direct ones but also I want those other softer ones because those are foundation to how to make sure that we're critical and how we're developing from Where we are today to where we're going in the future and getting that stickiness with the client Getting that intimacy and thinking about the client every day and how we're going to add value to them is ultimately what we're trying to accomplish here on every single person enabling our people to do that and

Speaker Change #221: So I'll give you a great example.

Speaker Change #221: In fact, I want to build and progress that.

Speaker Change #221: So I see that as the combination and bringing in some other talent to give refreshed views and interesting viewpoint and bringing those two best together is really the equation and not over rotating on either one.

Speaker Change #221: By the way, Dennis, it's been interesting, from my perspective, to see the hiring that Larry has done, because he's promoted from within, he's brought in some of his team members from Minnesota, old organization.

Speaker Change #221: Sorry, I got a now I got a train go by.

Speaker Change #221: And also, also, he's brought in new talent from outside.

Speaker Change #221: So I've seen all three flavors.

Speaker Change #221: And he's done it.

Speaker Change #221: When we look at the mix of our bookings, as an example, you would think that that's, hey, that's a go-to-market OKR.

Tooey Courtemanche: When you get that right, you get the bookings.

Speaker Change #220: And to me, that's our legacy.

Speaker Change #220: Maybe.

Speaker Change #220: Sure it is.

Howard Fu: Yeah.

Larry Stack: Yeah.

Speaker Change #220: But it's also an OKR for product.

Tooey Courtemanche: That's the bow I'm gonna put on it for.

Speaker Change #220: Because one of the things I wanted to make sure is not only do we have a healthy mix as we grow of new logo dollars, but expansion dollars, but also upsell and cross-sell dollars.

Speaker Change #220: When you start to get into something like that, the product and technology organization has a heavy influence on what that mix looks like over the longer term as we continue to monetize the products that come off our conveyor belt.

Howard Fu: Yeah

Larry Stack: Yeah

Tooey Courtemanche: -today's call.

Speaker Change #220: And so when you ask about specific OKRs for the go to market organization, sure, it's going to be things like bookings, it's going to be things like hiring.

Speaker Change #220: But the way that we think about it is highly integrated across all the different parts of the business, particularly as we think about how this evolves over multiple years.

Howard Fu: Okay. Well, we're at the top of the hour, and it's late on the East Coast, so I think we'll wrap up here. But thanks for everybody for joining us today, and shoot a note to IR Procore if you have any follow-up questions. Have a great weekend.

Matthew Puljiz: Okay. Well, we're at the top of the hour, and it's late on the East Coast, so I think we'll wrap up here. But thanks for everybody for joining us today, and shoot a note to IR Procore if you have any follow-up questions. Have a great weekend.

Tooey Courtemanche: Appreciate you all. Thank you very much for taking the time.

Howard Fu: Thanks, everyone. Thank you all for your time.

Larry Stack: Thanks, everyone.

Larry Stack: Thank you all for your time.

Howard Fu: Goodbye.

Operator: Goodbye.

Howard: By the way Larry I want to also say to Charles that Larry Larry is doing something that I think is really really masterful which is he's actually showing all of the AEs the success of our top of our top sellers and that drives a whole bunch of excitement around this transformation because it gets everybody wanting to get on board.

Howard: So it's not just about making your top sellers more productive it's about showing off their productivity to everyone else and that's something that Larry is doing a great job with the team.

Howard: Yeah the other thing Charles is I want to just address your observations and your comment about the bi-modal distributions.

Howard: That's a great example of a way that we are metrifying to the nth degree what we track because I would say that if we are starting to see a bi-modal distribution in terms of attainment.

Howard: Then that means that there has to be something that's often terms of either our top plans incentive structures or territories or enablement or something like that.

Howard: And so that's a great example of what we track very closely to make sure that things are working well and if you have a nice distribution across your attainment levels.

Howard: What that results in is a true pay for performance or performance based organization which is absolutely what we want to design for as we go through this transition.

Howard: There was one other part, which was how you guys want to attract more top talent in what Procore needs to do, frankly, to be a better destination for that and could be for that.

Howard: So let me take one of my perspective on that.

Howard: It's related to the top talent, but this is also related to how we think about design and our incentive structure.

Howard: I'll just be very up front.

Howard: There's a chance to make a lot of money if you're doing really, really well from a booking standpoint here as an AE.

Howard: And this goes back to what Tilly talked about was when folks see that there is a natural wave of folks that want to do that as well.

Howard: And they will seek out ways and that war gets out that that's how you do it here at Procore.

Howard: And you can make a lot of money here at Procore.

Howard: And that goes back to the enablement, the design of the incentives, the team structures that we're putting together to make folks successful.

Howard: And it doesn't get kept a secret for all that long to be honest.

Howard: And kind of one more thing, you know, honestly, sales is a profession.

Howard: I am so proud.

Howard: I am the frontline ambassador of our company when we go into a job and into a client site. So I need to make sure that I am the best prepared.

Howard: So number one is how you make sure you get talent is you show them a career path within the sales and revenue organization.

Howard: That's professional.

Howard: You do enablement and certifications along the way and you create a meritocracy to really recognize the top performers.

Howard: And to continuously bring in world class leaders and make it as an in quarter of talent.

Howard: But number one is recognition that we are completely on a strong and clear path to be a sales, you know, company that has real clear definition of that as a profession.

Howard: Sales is professions number one way to attract people into any company.

Howard: Thanks, Charles.

Howard: You okay if we move on to somebody else.

Unknown Executive: Thank you.

Unknown Executive: All right.

Dennis Peary: Let's do Dennis Peary, please.

Dennis Peary: Hey there.

Dennis Peary: Can you hear me?

Dennis Peary: Yes.

Dennis Peary: Okay.

Dennis Peary: Thanks everyone for putting this together.

Dennis Peary: Larry, just question for you.

Dennis Peary: What have you found as far as the capability of sale leadership and reps at ProCorp?

Dennis Peary: Would also be curious as to your desire to bring in some of your old hands or lieutenants.

Dennis Peary: And then you just finally to what degree maybe some of your old lieutenants would need some time to ramp to learn how to sell apps as opposed to improv.

Larry: Yeah, it's a great point.

Larry: And so first of all, I told you I'd be honest, real and authentic.

Larry: And so when I came here, I would tell you that I saw that our clients love us and they love our products that I could see without any doubt.

Larry: When you asked me to observe the sales force, I'd say that we had a transactional based sales force that really was designed on volume increase versus really cross selling and upselling on the platform was the biggest thing.

Larry: So when I look at talent, I look at who can consultatively sell and bring in a platform and have that strong SaaS experience.

Larry: And that's what I look for.

Larry: I don't really look for bringing in old talent or people that I know are from the lieutenants.

Larry: What I really do look for is who's got the right ability to come in here and help us drive a strong local presence, a strong consultant selling motion, starting to sell the platform.

Larry: And really, you know, connect the dots on the enterprise and show those CXO value proposition.

Larry: And I think that's what we can most approve the sales force and have the biggest, you know, the biggest bank for the block if you will.

Larry: I hope that helps them.

Larry: Yeah, I mean, I guess could I ask, I guess as a thinking that there are some people within the organization today whose responsibilities, you know, they get a tap on the children and say, hey, we'd like to do more of you, so if you're going to now be in a leadership position and there are some more people to do it like you do, or you think it's going to be more external hires who come from other software companies where they're familiar with solution selling that sort of thing.

Larry: And I love the combination of both, you know, bringing up and the enablements really for our folks here.

Larry: How do we increase productivity through enablement and enablement 1.0 was to fall in love with our offerings and make sure we had a repressed view of them, because our product teams are going fast.

Larry: And then the second piece of that was how do we switch from transactional to consult with a selling and you've been in the field, so how do we make sure that?

Larry: So I don't want to disrupt that, in fact, I want to build and progress that.

Larry: So I see that as the combination and bringing in some other talent to give refresh views and interest and viewpoint.

Larry: And bringing those two bets together is really the equation and not overtaking on either one.

Howard: By the way, Dennis, it's interesting from my perspective to see the sea, the hiring that Larry has done because he's promoted from within.

Howard: He's he's brought in some of his team members from his old organization.

Howard: Sorry, now I got a train going by it.

Howard: And also also he's brought a new talent from outside, so I've seen all three flavors and he's done a he's doing a great job of bringing to the best talent for, you know, for what we need and it's not one or the other. It's it's a combo of all.

Howard: So I've seen it all.

Howard: Thank you.

Howard: I'll jump back in line.

Howard: Yeah.

Howard: Sorry about the train.

Howard: All right, let's do Matthew cost the next.

Matthew Cost: Can you hear me?

Matthew Cost: Okay.

Matthew Cost: Thank you for your time.

Matthew Cost: Can you describe for me the legacy process by which asks from the customers in the field about a product would make it back to the product team.

Matthew Cost: And then to the extent that you're making these go to market changes in the future, how is that intended to accelerate that that connectivity from the client experience in the field back to the product team to make for sure that feedback loop is is moving quickly.

Larry: Yeah, we're going to have three real key feedback loops.

Larry: One is our customer success team.

Larry: And we're really leaning down on making them more technical to make sure that the translation is not lost between with the clients that with the technical team understand.

Larry: So our frontline teams are becoming more technical to not only make that feedback loop more efficient, but also more effective and clear.

Larry: Number one, number two is our constant interaction at a bringing our planning sessions and our comp plans.

Larry: So we bring back all of our comp plans from from the clients and we validate them with our friends and product and engineering take this is what we're hearing this is what we're seeing the real take up.

Larry: This is what's exciting.

Larry: This is where they don't get an understanding is pro core financials aligned to do you have to replace the RP.

Larry: And we get all those answers together through that planning process, but be the account plan is the other thing.

Larry: And then thirdly, we do it every month at the well, we're doing it almost every week right now between the product and the revenue teams and the marketing teams all getting together on meetings for almost eight hours.

Larry: There's a per per week and really reviewing everything that's coming in the pike and making sure we validated with the market set.

Larry: So I'd say that is the technical customer success teams and they're becoming more technical.

Larry: Number two, it's manifested in the account plan through the empirical conversations we have for clients and then those weekly and hopefully soon will be monthly cadences around those sessions directly with all of us.

Larry: And the product leaders, the revenue leaders that go to market teams, the general managers, everybody on there having made sure that all the voices are heard and that we've amalgamated product roadmap in the future state that's aligned to those needs.

Larry: Let me give you an example, which now that we have these overlay teams that we're building, when you put an overlay team and that is very, very adept at understanding financials as an example, all the way through pay, and they're talking to a CFO about how they're going to be doing invoicing, right?

Larry: They're so deep in their knowledge of that particular area of the product line that they are bringing back, those teams are bringing back much more directed and much more cogent feedback because they're experts.

Larry: And not to put anything on the people that were more the generalists, but the generalists just weren't able to do that as effectively, so we can see this is kind of a direct line of getting feedback back to the organization way more effectively and efficiently than we've ever done before.

Matthew Cost: Thank you, that's helpful.

Andrew: All right, let's go to Andrew next, please.

Andrew: Hey guys, can you hear me about?

Andrew: Yeah, thanks so much for doing this.

Andrew: I just had one question on maybe outside of some of the personnel decisions that are being made.

Andrew: Yes, given that the goal is to sell the broader pro core platform and the mesh of how these products work together, and that's really where you get the most ROI.

Andrew: And I think we said that perhaps selling 11 to 14, excuse it, gotten a little unwieldy for some of our AEs.

Andrew: I guess you see any situation where we need to repackage or reprice or bundle certain solutions to help customers get more ROI.

Andrew: Is that part of the process here?

Andrew: Do we feel like the product pricing packaging is pretty set and it's just a matter of putting the right people in place?

Andrew: How are you going to start with that?

Andrew: Yeah, sure.

Andrew: So thanks Andrew.

Andrew: So the short answer is yes, pricing and packaging is something that we consistently and constantly look at to see what best serves our customers.

Andrew: Remember we did something like this at the lower end of the market about a year and a half, maybe two years ago.

Andrew: That was quite successful at that into the market.

Andrew: And then as we continue to add more products to our portfolio and add products throughout the construction life cycle.

Andrew: This is constantly something that's on our minds.

Andrew: Remember we also talked about a last couple of quarters.

Andrew: How we're thinking about the needs of the enterprise space where the customizability of the platform is something that's important for enterprise customers and then making sure that we make progress along those lines.

Andrew: So it's a combination of all those different things in terms of making progress on our product, making sure we listen to our customers and then packaging it up that makes sense for what we're trying to do and meet them on their court.

Andrew: Okay, got out of that there.

Andrew: And I guess if I think about like the other piece, which is this sort of value based selling I think across all of software, there's been a greater need to articulate ROI and total cost of ownership.

Andrew: You know, when you're selling not just to see a vote, but really anyone in the procurement side, you guys have that laid out and quantified and I guess.

Andrew: Like is it understood across Salesforce how to do that across each of the products.

Andrew: It seems like it's fairly well set on project management.

Andrew: I just want to make sure that there's good like RYK studies and explanations and calculators and everything for the other products are about some minutes to be worked in.

Larry: I would tell you that in the enablement process that we just went through, we started that in enablement 1.0, which we executed in April and got everyone certified by June in 2.0 were much more to that and ROI associated with each product.

Larry: You know, for example, you know, if you use pro core pay, you're able to reduce the SNA, we think you can get to an MPV faster and IRR here.

Larry: Things of that nature were really driving into the next level of enablement, which is 2.0.

Larry: And it felt that we're actually going through those forces now.

Larry: So I do see 2.0 answering that question that you raise around those clear demonstrable ROI and metrics that matter or our clients.

Larry: Yeah, the other thing I'll add on top of that, Andrew, is you know, one of the things with product specialists with a focus with the general managers in each one of these parts of our business, it allows us to have better visibility and a better understanding really of the data that's within our customers profiles within their their instance of Procore with that understanding of the data that data can then be used to really show the customer what the return is on how they are using Procore and how they can use Procore to get even more returns and we've got teams that we've done that with with our customer base where we've seen really great results and really true aha moments from our customers to say this is fantastic and so with these specialists and with this GM model that actually supports our ability to to show that our eye to our customers.

Andrew: Got it, thank you guys so much very helpful thanks Andrew.

Zach: All right, let's do Zach.

Zach: Hey guys, thanks for the time.

Zach: I just wanted to ask Howard, you would call out that you guys are constantly evaluating the ROI on some to go to market investments you are making and we'll keep making and that you want to actively adjust whatever investments you're making based on that ROI.

Zach: I guess just stepping back like what type of ROI do you guys need to realize or what's like the minimum threshold that you want to underwrite to before you put more dollars into a given initiative.

Howard: Yeah, so let me step back first and say that there's going to be a range of ROI in returns depending on the area of the business that we're in.

Howard: The biggest example of that is when we've talked about the initial phases in the stage of evolution of international is going to have a initial lower ROI with a much bigger.

Howard: So that's the first thing I'll point I'll answer your question this way when we look at the metrification of the business.

Howard: Another great example is if I start to see really fast velocity through the pipeline and I restart to see that curve for example somebody else talked about in terms of the attainment start to move in a certain direction.

Howard: It gives me evidence that something is working whether it's the enablement whether it's the comp plans whether there's a receptiveness to we're putting together in terms of pricing and packaging.

Howard: In terms of the result of that is actually if I start to see that working it gives me more confidence to put more feel on the fire there and that's the same thing on the flip side of that of that as well.

Howard: And as we pulled those strings and go down into the org and really diagnose whether it's good neutral or bad.

Howard: Those are the things that examples are some of the things that I will look for and engage the business on engage Larry on engage to engage our product and technology team wants to say a here's what we're seeing.

Howard: Here's what we think we can do better here's what we think we can even choose even more and that goes into the equation in the calculus for where I decide and where we decide to allocate our resources.

Howard: So that makes sense and I look I know projecting ROI on any investments always a little bit of an art and a little bit of guesswork because who can know the future.

Zach: But I guess maybe just stepping back like let's put aside and you know initiatives like international which you know understandably will take years to ramp as you build up brand awareness like maybe just like within your core market.

Zach: And within kind of the customer bases you already are well known in and are fairly dominant in like what type of return would you want to typically see on incremental sales higher before deciding that is something you ought to actually go ahead with.

Howard: You know, there's not going to be a one size at all, to be honest.

Howard: I think the thing that I can tell you is it's going to be greater than one to one, meaning the productivity will be higher than what we are seeing today.

Howard: So if there's a rep with a quota of a million dollars, it will be 1.2, 1.3, 1.4.

Howard: If there's a rep in a different part of the business where the quota is something below that at 500K, it will be 600K, 700K and 100K.

Howard: That's what I'm measuring, to have a one size fits all that says here's the threshold.

Howard: It's just it's just it's too nuanced to say that that applies to the entire part of our business and we have to make sure that we, we look at all the different nuances.

Howard: Gotcha.

Howard: Oh, but Howard, I guess I am here and you're saying as you get through this transition, you think quotas are going up and the dollars of like gross new ARR that are rep within the same role should have over the dollars, you are paying them all in for salary and overhead and benefits, etc.

Howard: Like that ratio should be improving.

Howard: Oh, it will go up.

Howard: Absolutely.

Howard: It will go up.

Howard: Again, impossible to know exactly what it will look like in the future, but like what's your guys' aspiration, like how much do you want that to improve by as you go through this transition?

Howard: Again, again, Zach, I mean, I would give you the same answer that I just gave you to your prior question.

Zach: And Zach, I got to touch you off at the four-question letter.

Zach: Thanks, Zach.

Unknown Executive: We had a lot of people in queue, but there's actually a really sharp question I thought on that was submitted in writing, so I'd like to read this one out loud for for the team here, so it's written by Ruth Bryson.

Ruth Bryson: Historically, your self-access has been in part not having a traditional software go-to-market and really knowing your customer's unique pain point and buying motions.

Ruth Bryson: This feels more like a typical enterprise software go-to-market.

Ruth Bryson: Can you address why this will work now, or how do you keep your previous success with the more traditional structure?

Ruth Bryson: By the way, that is a great question, Ruth.

Ruth Bryson: I really appreciate it because it mixes both the, how are we going to accelerate this without losing what got us here, right?

Ruth Bryson: Which is really what makes Prokhor special.

Ruth Bryson: I will assure you and everyone else that we will never lose that customer intimacy. In fact, a lot of what this is about is about increasing that customer intimacy, but applying a more rigorous scaleable whole process on top of it.

Ruth Bryson: So in less of a bespoke art of like building relationships between one and AE and a CS member and an account, this is more about putting a process in place where we can actually better understand their needs, bring the right resources into that account in order to address those needs, and then to be able to capture more volume and sell them more product, just more methodically.

Ruth Bryson: Because otherwise the kind of the cottage industry approach that we had used before just doesn't scale in my mind.

Ruth Bryson: I was going to say the same thing to you, purposeful intent is the way I would say it is doing that, getting more intimate with the client, really making sure that we understand their business, measuring that success, and making sure we have the right people within the account that can absolutely drive correctly the entire process all the way from stage one to stage six, and make sure that we deliver on what we say we continue to expand and build that trust with the client.

Ruth Bryson: I think it's pretty cool.

Ruth Bryson: So it would be exactly how I see us going forward.

Ruth Bryson: I should also say that we have the privilege of doing a lot more for our customers and sell them software, right?

Ruth Bryson: We're consultative in a lot of areas and culture academies one, and I know everyone kind of discounts that a little bit, but this last week of my leadership in town, and we had probably, I don't know, 10 of the largest contractors in U.S, sitting in one of our conference rooms talking not about pro-core software, but about how to elevate the industry through culture and business values, and the fact that we have that brand and that they look to us to be that kind of a partner doesn't go away with this new model.

Ruth Bryson: We will always have this special relation.

Ruth Bryson: That's the way that I'm approaching this.

Ruth Bryson: It's not to fix things that are bad.

Ruth Bryson: It's really an offensive and to really accelerate and supercharge how we're doing things today.

Ruth Bryson: What we need going forward.

RK Hendron: Yeah, good question Ruth, there's always let's go back to the panel here, RK, the Hendron.

RK Hendron: Hey, can you guys hear me?

RK Hendron: Thanks for the time.

RK Hendron: Two questions.

RK Hendron: One is, one thing I picked up, I think at the earnings haul and even today, and I think to your example about a customer, about to churn, sort of raises the question.

RK Hendron: Are some of these go-to-market changes a response to what you're maybe seeing a slip-in retention?

RK Hendron: I think you guys talked about contraction and maybe more competitive intensity, and then I'll follow up with my second question here in a second.

Howard: Well, I'll just say that this is definitely not in response to any weakness in the business I want to assure you.

Howard: In fact, that example I used wasn't really about churn, and I want to be specific.

Howard: If they were going to reduce their volume, they might have reduced their volume.

Howard: They weren't going to leave Procore, which is the good news.

Howard: But what we're finding is that the deeper we get these engagements with these customers, the more we can actually show the value, and then therefore the more they want to buy from Procore, so it's kind of as simple as that.

Howard: This is very much a, we're leaning into something.

Howard: When you sit in the meeting with a customer and they tell you that they want to buy a product that they didn't even know you had before you sat down in that meeting, that's an indication that you need to do a better job of really becoming an instrument and letting them know what's available, and we're seeing lots of that.

Howard: So we just want to capitalize on that.

Howard: And, and no, thanks to maybe the second question I have is how you sort of made the decision around the additional investment.

Howard: Procore sort of stands out, frankly, as having a pretty high percentage of sales spent on sales and marketing.

Howard: Usually you appear as you design peers, vertical market software peers, how do you guys think about putting in additional dollars versus saying, hey, we're already sort of on the high end.

Howard: Let's work within our envelope of spend that we have today, and we part with things to, you know, train to go to market model versus just, you know, add another 200 heads or whatever you talk about.

Howard: Yeah, that's a great question.

Howard: The first I'll first answer from a really high level, which is, I want to be clear, these investments are meant to increase the ROI that we've got.

Howard: And that ROI shows up both in growth and on the mortgage inside, that's the first thing.

Howard: The second thing is a really good question, and I'll tell you, one of the things we probably could have been better at in terms of making sure that folks understood is.

Howard: This is not a pure incremental investment because we have been operating to get as efficient as possible over the last couple of years when we've proven to ourselves that we can do that.

Howard: And that continues into fiscal 25 and beyond 26 27 and so forth.

Howard: That mentality doesn't stop and that mentality and the efficiencies that we continue to get will partially offset the incremental investments that we need on the go to market side.

Howard: And I'll tell you that efficiency also comes directly from places and go to market as well.

Howard: As well as other places that we've already seen around R&D and definitely GNA as well as we continue to go through this transition and this evolution.

Howard: Even when we get past this transition and this change that mentality is not what we procure, I won't let that mentality be procured.

Howard: We still will continue to make sure that we continue improving margins until we get to best in class.

Howard: And the path there depends on what we can get on that on the revenue website and we're deliberate about that.

Howard: I'll stand down.

Unknown Executive: Thank you, guys.

Unknown Executive: Thanks, Arte.

Unknown Executive: Appreciate you.

Unknown Executive: All right, let's do Albert Wang yet.

Albert Wang: Next, please.

Albert Wang: Hey guys, thanks.

Albert Wang: Understanding that there's going to be a lot of operational and personal change across different departments within your organization, can you share some of the key OKRs by which you're measuring Larry's success and sort of how that gives confidence that the go-to-market change is progressing at the rate that you like.

Albert Wang: And then ultimately, like, how are those objectives tied to efficient revenue or bookings for us?

Albert Wang: Thanks.

Howard: You want me to start?

Howard: Sure.

Howard: So Albert, the way I've been kind of characterizing this is that we have several epics that we're going through. We're in this first epic, which is between now and the end of the year as we're building the machine and hiring the people and setting everything up for January 1 when people get new co-plans and territories and all.

Howard: All that, not to say that we're not actually implementing this as we go.

Howard: And but there are a lot of changes going to happen around January 1.

Howard: And so we are, we're very focused on that.

Howard: So what that entails is things like is Larry hitting his hiring plans specifically across the leadership underneath the people that he's already hired as he is he getting all of the specialist on board at the pace in which we we can.

Howard: And I'll be seeing the overlay teams coming into into into practice.

Howard: Are we actually seeing these analogs that we're already running right now in parallel being productive.

Howard: And then finally, we actually starting to see rep productivity increase.

Howard: Those are the kind of things that we'll look for them once we get into next year where the entire teams on board with this, it'll be much more focused on mostly rep productivity, I would imagine.

Howard: Yeah, so Albert, I'll answer it this way.

Howard: I want to be clear that the OCRs that you asked for, there's going to be a lot of specifics obviously that we can't talk about in terms of what we do internally.

Howard: But I want one thing I want to be clear, those OCRs are not just Larry's.

Howard: So I'll give you a great example.

Howard: When we look at the mix of our bookings as an example, you would think that that's hey, that's a go-to market OCR maybe short is, but it's also an OCR for product because one of the things I wanted to make sure is not only do we have a healthy mix as we grow a new logo dollars, but expansion dollars, but also upsell and cross sell dollars.

Howard: When you start to get into something like that, the product and technology organization has a heavy influence on what that mix looks like over the longer term as we continue to monetize the products that come off our conveyor belt.

Howard: And so when you ask about specific OCRs for the go-to market organization, sure it's going to be things like booking, it's going to be things like hiring, but the way that we think about it is highly integrated across all the different parts of the business, particularly as we think about how this evolves over multiple years.

Howard: Yeah.

Howard: Thanks, Albert.

Howard: I tried to do at least one more.

Drew Besser: Drew Besser.

Drew Besser: Hey guys, can you hear me?

Drew Besser: We got you.

Drew Besser: Thanks for taking the time.

Drew Besser: Hopefully, quick one.

Drew Besser: I think we've talked before about how reaching the long tail is less efficient and you guys made comments at the start of the year around doubling down on the larger GC market.

Drew Besser: I guess first question is should we read this as a continuation of the prioritization about market over downmarked market?

Drew Besser: And then I guess second question is how the channel fits into all this, which customer segments are you guys looking for the channel to engage with?

Drew Besser: Thanks.

Howard: Let's go first.

Howard: I keep hogging it.

Howard: Actually, why don't I just say that yes, it is definitely an indication that the we see a lot of opportunity up market and the lot of the motions that we're talking to talking about are primarily up market motions.

Howard: So yeah, but if Howard you want to try the other thing I want to just reiterate just structurally and philosophically it's important for all three what don't what segments in terms of market market, just like it is for all three stakeholders to continue to engage in our platform to for our customers and for Procore to realize the full value of this relationship between Procore and our customers.

Howard: So so while the go to market piece down market is not as efficient as we ultimately want it to be in terms of still being a direct model.

Howard: The participation is still important as we think about getting into out multiple years.

Howard: We obviously will start to look at how to get more efficient there.

Howard: It could be through partners down market.

Howard: That's something that we are we will explore.

Howard: It could be through a combination of that and pricing and packaging.

Howard: But the important thing is that it's efficiency that we're looking for across the board and I'll tell you down market is not the only place I'm looking for it.

Kunal: Okay, let's do one more Kunal please.

Kunal: Thank you.

Kunal: Thank you on mute.

Kunal: Kunal you there still on mute.

Kunal: All right, we will come off you come back around will try to squeeze you and let me do one more that has.

Unknown Executive: It's like five o'clock on the East Coast, so I know they want to get going.

Unknown Executive: There was a question submitted that I thought would be interesting to share the IR teams to getting this quite a bit actually, which is how are you thinking about price and product bundle packaging.

Unknown Executive: Is that an area where you will be experimenting with as well as part of this announcement?

Unknown Executive: Hey, Matt, I think we already answered that one.

Unknown Executive: Yeah, we did.

Unknown Executive: Yeah, so let's pull another one.

Unknown Executive: Okay, let's see Mary up.

Unknown Executive: I want everyone to hear more from Larry.

Unknown Executive: Well, Larry, there's one that came in on writing too, which is like, how do you want to be evaluated through all this?

Unknown Executive: Yeah, it's exactly what they talked about.

Unknown Executive: I like it in the very holistic level of making sure that this is a not a go to market modification or evolution or transformation.

Unknown Executive: It is a corporate initiative to continue to do it.

Unknown Executive: So I would love to be evaluated by how well we go in and how will we retain our clients, how will we increase the customer experience, how will we upsell and cross sell and become that viable customer.

Unknown Executive: That's an intimate customer advisor.

Unknown Executive: That's exactly what I would love to do that because what I would see is that if I'm deep in each of these clients, and I'm expanding in each of these clients, and I'm articulating value every day to each of these clients, that they're going to see me as a value partner, and they're going to continue to build with me.

Unknown Executive: And we will raise higher revenues.

Unknown Executive: Everything comes with that fundamental piece.

Unknown Executive: So I would love to be, you know, say I would love my legacy here to be as well, is that we really brought huge value to the client with a proposed products and capability.

Unknown Executive: I have to say this because on the CFO, Larry, I'm evaluating you on your bookings at Tango of Performance.

Howard: Yeah, but I think that was more of an okay, you know, there's obviously those very direct ones, but also I want those those are softer ones because those are foundation to how to make sure that we're critical and how we're developing from where we are today to where we're going in the future and getting that stickiness with the client, getting that intimacy and thinking about the client every day and how we're going to add value to them is all ultimately what we're trying to accomplish here on every single person and enabling our people to do that.

Howard: And to me, that's our legacy.

Howard: When you get that right, you get the bookings.

Howard: So yeah, that's the bow.

Unknown Executive: I'm going to put on it for a day.

Unknown Executive: Okay, well, we're at the top of the hour and it's late on East Coast.

Unknown Executive: So I think we'll wrap up here, but thanks for everybody for joining us today and shoot a note to I.R.

Unknown Executive: Procore if you have any follow up questions.

Unknown Executive: Have a great week.

Unknown Executive: Thank you all.

Unknown Executive: Thank you very much for everyone.

Unknown Executive: Thank you all for your time.

Unknown Executive: Good bye.

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