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BUSINESS COMBINATIONS | 3 Months Ended
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Mar. 31, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Novorender On January 28, 2025, the Company completed the acquisition of all outstanding equity of Novorender AS (“Novorender”), a Norway-based leader in advanced building informational modeling rendering technology, to enhance Procore’s capabilities for large-scale construction projects. The purchase price was $44.3 million in total cash consideration. Of the consideration transferred, $43.2 million was considered purchase consideration. $1.1 million of the cash consideration relates to the acceleration of options vesting for certain Novorender option holders, and was excluded from purchase consideration and recorded to compensation expense in the accompanying condensed consolidated statements of operations and comprehensive loss on the acquisition date. On the acquisition date, $5.0 million in cash was placed in an escrow account held by a third-party escrow agent for potential breaches of representations, warranties, and indemnities and is scheduled to be released from escrow to Novorender's stockholders 24 months after the acquisition date (subject to any indemnification claims). The preliminary purchase consideration was allocated to the following assets and liabilities at the acquisition date (in thousands):
| Fair Value |  | Useful Life
Assets acquired |  |  |
Cash and cash equivalents | $ | 1,931 |  |  |
Accounts receivable | 272 |  |  |
Prepaid expenses and other current assets | 379 |  |  |
Other non-current assets | 2 |  |  |
Developed technology intangible asset | 19,100 |  |  | 7 years
Customer relationships intangible asset | 4,900 |  |  | 10 years
Goodwill | 23,706 |  |  |
Total assets acquired | $ | 50,290 |  |  |
Liabilities assumed |  |  |
Accounts payable | (250) |  |  |
Deferred revenue, current | (590) |  |  |
Other current liabilities | (214) |  |  |
Accrued expenses | (1,687) |  |  |
Net deferred tax liabilities | (4,366) |  |  |
Total liabilities assumed | $ | (7,107) |  |  |
Net assets acquired | $ | 43,183 |  |  |
Developed technology intangible asset represents the fair value of Novorender’s technology, which was valued considering both the cost to rebuild and relief from royalty methods. Key assumptions under the cost to rebuild method include the estimated level of effort and related costs of reproducing or replacing the acquired technology. Key assumptions under the relief from royalty method include forecasted revenue to be generated from the developed technology, an estimated royalty rate applicable to the technology, and a discount rate. Developed technology is amortized on a straight-line basis, which approximates the pattern in which the economic benefits of the technology are consumed, over its estimated useful life of seven years. The amortization expense is recorded in cost of revenue in the accompanying condensed consolidated statements of operations and comprehensive loss. Customer relationships represent the fair value of the underlying relationships with Novorender’s existing customers, which were valued using the excess earnings method. Key assumptions under the excess earnings method include estimated future revenues, costs, cash flows, and a discount rate. The customer relationship intangible asset is amortized on a straight-line basis, which approximates the pattern in which the economic benefits of the customer relationships are consumed, over its estimated useful life of 10 years. The amortization expense is recorded in sales and marketing expenses in the accompanying condensed consolidated statements of operations and comprehensive loss. The $23.7 million goodwill balance is primarily attributable to synergies and expanded market opportunities that are expected to be achieved from the integration of Novorender with the Company’s offerings and assembled workforce. Goodwill is not deductible for income taxes purposes. The measurement period for the valuation of assets acquired and liabilities assumed ends as soon as information on the facts and circumstances that existed as of the acquisition date becomes available, but does not exceed 12 months. The purchase price allocation is subject to future adjustments, including as a result of finalizing the closing net working capital. The Company issued 55,956 service-based restricted stock units (“RSUs”) at a grant date fair value of $76.30 per share in order to retain certain employees of Novorender. The total grant date fair value of the RSUs was excluded from purchase consideration and is recognized as post-combination expense. See Note 10 to these condensed consolidated financial statements for details on how the Company expenses stock-based compensation. To retain certain Novorender employees, the Company held back $6.7 million of the cash purchase price, which will vest based on continued employment over a two-year period. $1.9 million will be paid 12 months after the acquisition date, and the remaining $4.8 million will be paid 24 months after the acquisition date. The cash holdback amount is excluded from the purchase consideration and will be recorded as post-combination compensation expense over the service period on a straight-line basis. The Company has not separately presented pro forma results reflecting the acquisition of Novorender or revenue and operating losses of Novorender for the period from the acquisition date through March 31, 2025, as the impacts were not material to the condensed consolidated financial statements. The acquisition-related transaction costs were not material and were expensed as incurred in the accompanying condensed consolidated statements of operations and comprehensive loss.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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