Correspondence 0001193125-24-149300 from PROCORE TECHNOLOGIES, INC. (PCOR) (CIK 0001611052) (PCOR)
PROCORE TECHNOLOGIES, INC. (PCOR) (CIK 0001611052)
Date: May 29, 2024 · CIK: 0001611052 · Accession: 0001193125-24-149300
AI Filing Summary & Sentiment
File numbers found in text: 001-40396
Referenced dates: May 7, 2024
Letter
Rachel B. Proffitt
+1 415 693 2031
rproffitt@cooley.com
May 29, 2024
U.S. Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Attn: Dave Edgar and Christine Dietz
Re: Procore Technologies, Inc.
Form 10-K for the Year Ended December 31, 2023
Filed February 26, 2024
Comment Letter Dated May 7, 2024
File No. 001-40396
Ladies and Gentlemen:
On behalf of Procore Technologies, Inc. (the “Company”), we are submitting this letter in response to the letter, dated May 7, 2024, from the staff of the Division of Corporation Finance Office of Technology (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) with respect to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”) submitted to the Commission on February 26, 2024.
Set forth below are the Company’s responses to the Staff’s comments. For ease of reference, the numbering of the paragraphs corresponds to the numbering of the comments in the letter from the Staff and the Staff’s comments are reproduced in italics. Page references in the text of this response letter correspond to the page numbers in the Annual Report.
Form 10-K for the Year Ended December 31, 2023
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Certain Factors Affecting Our Performance, page 58
1. We note that your adjustments for “employer payroll tax on employee stock transactions” in each of your non-GAAP measures presented. Please tell us how you determined it is appropriate to exclude such amounts as they appear to be a normal, recurring, cash operating expense. Refer to Question 100.01 of the non-GAAP C&DIs.
Response:
The Company acknowledges the Staff’s comment and respectfully advises the Staff that it believes that the Company’s adjustment of certain non-GAAP measures for “employer payroll tax on employee stock transactions” is permissible and appropriate under the Staff’s applicable guidance. Specifically, the Company does not believe that employer payroll tax on employee stock transactions is related to the Company’s core operations, revenue generating activities, business strategy, industry, or regulatory environment.
U.S. Securities and Exchange Commission
May 29, 2024
Page 2
As noted in the Company’s existing disclosure, the amount of employer payroll tax-related items on employee stock transactions is dependent on restricted stock unit settlements, option exercises, related stock price, and other factors that are beyond the Company’s control and that do not correlate to the operation of the Company’s business. The Company does not consider these items when evaluating the performance of its business and making operating plans. For example, when considering the impact of equity award grants, the Company places a greater emphasis on overall stockholder dilution than it does on the accounting or tax-related expenses associated with such grants. The Company also believes that this adjustment is appropriate for purposes of consistency because it allows investors to see the full effect that excluding the Company’s stock-based compensation expense has on the Company’s operating results, and provides investors with a better understanding of the performance of the Company’s core business.
Further, the Company notes that in any given period, the actual amount of the employer payroll tax on employee stock transactions accounts for approximately 1% of the relevant income statement line items, including revenue, cost of revenue, sales and marketing expense, research and development expense, and general and administrative expense.
The Company also notes that adjusting for employer payroll tax on employee stock transactions in the presentation of certain non-GAAP financial measures is typical in the Company’s industry. As such, the Company believes that adjusting for this expense allows investors to better understand the performance of the Company’s core business and operating results relative to peer companies.
General
2. We note that in your earnings calls you quantify free cash flow per share, which you also discuss in your investor day presentation on your website and in exhibit 99.1 to Form 8-K furnished on September 20, 2023. Please discontinue the presentation and discussion of this measure as non-GAAP liquidity measures that measure cash generated must not be presented on a per share basis. Refer to Rule 100(b) of Regulation G.
Response:
The Company acknowledges the Staff’s comment and will not quantify free cash flow per share going forward.
* * *
Please contact me at (415) 693-2031 or Jon Avina of Cooley LLP at (650) 843-5307 with any questions or further comments regarding our responses to the Staff’s comments.
Sincerely,
/s/ Rachel B. Proffitt
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CORRESP 1 filename1.htm CORRESP Rachel B. Proffitt +1 415 693 2031 rproffitt@cooley.com May 29, 2024 U.S. Securities and Exchange Commission Division of Corporation Finance 100 F Street, N.E. Washington, D.C. 20549 Attn: Dave Edgar and Christine Dietz Re: Procore Technologies, Inc. Form 10-K for the Year Ended December 31, 2023 Filed February 26, 2024 Comment Letter Dated May 7, 2024 File No. 001-40396 Ladies and Gentlemen: On behalf of Procore Technologies, Inc. (the “Company”), we are submitting this letter in response to the letter, dated May 7, 2024, from the staff of the Division of Corporation Finance Office of Technology (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) with respect to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”) submitted to the Commission on February 26, 2024. Set forth below are the Company’s responses to the Staff’s comments. For ease of reference, the numbering of the paragraphs corresponds to the numbering of the comments in the letter from the Staff and the Staff’s comments are reproduced in italics. Page references in the text of this response letter correspond to the page numbers in the Annual Report. Form 10-K for the Year Ended December 31, 2023 Management’s Discussion and Analysis of Financial Condition and Results of Operations Certain Factors Affecting Our Performance, page 58 1. We note that your adjustments for “employer payroll tax on employee stock transactions” in each of your non-GAAP measures presented. Please tell us how you determined it is appropriate to exclude such amounts as they appear to be a normal, recurring, cash operating expense. Refer to Question 100.01 of the non-GAAP C&DIs. Response: The Company acknowledges the Staff’s comment and respectfully advises the Staff that it believes that the Company’s adjustment of certain non-GAAP measures for “employer payroll tax on employee stock transactions” is permissible and appropriate under the Staff’s applicable guidance. Specifically, the Company does not believe that employer payroll tax on employee stock transactions is related to the Company’s core operations, revenue generating activities, business strategy, industry, or regulatory environment. U.S. Securities and Exchange Commission May 29, 2024 Page 2 As noted in the Company’s existing disclosure, the amount of employer payroll tax-related items on employee stock transactions is dependent on restricted stock unit settlements, option exercises, related stock price, and other factors that are beyond the Company’s control and that do not correlate to the operation of the Company’s business. The Company does not consider these items when evaluating the performance of its business and making operating plans. For example, when considering the impact of equity award grants, the Company places a greater emphasis on overall stockholder dilution than it does on the accounting or tax-related expenses associated with such grants. The Company also believes that this adjustment is appropriate for purposes of consistency because it allows investors to see the full effect that excluding the Company’s stock-based compensation expense has on the Company’s operating results, and provides investors with a better understanding of the performance of the Company’s core business. Further, the Company notes that in any given period, the actual amount of the employer payroll tax on employee stock transactions accounts for approximately 1% of the relevant income statement line items, including revenue, cost of revenue, sales and marketing expense, research and development expense, and general and administrative expense. The Company also notes that adjusting for employer payroll tax on employee stock transactions in the presentation of certain non-GAAP financial measures is typical in the Company’s industry. As such, the Company believes that adjusting for this expense allows investors to better understand the performance of the Company’s core business and operating results relative to peer companies. General 2. We note that in your earnings calls you quantify free cash flow per share, which you also discuss in your investor day presentation on your website and in exhibit 99.1 to Form 8-K furnished on September 20, 2023. Please discontinue the presentation and discussion of this measure as non-GAAP liquidity measures that measure cash generated must not be presented on a per share basis. Refer to Rule 100(b) of Regulation G. Response: The Company acknowledges the Staff’s comment and will not quantify free cash flow per share going forward. * * * Please contact me at (415) 693-2031 or Jon Avina of Cooley LLP at (650) 843-5307 with any questions or further comments regarding our responses to the Staff’s comments. Sincerely, /s/ Rachel B. Proffitt Rachel B. Proffitt Cooley LLP cc: Benjamin Singer, Procore Technologies, Inc. Uyen Nguyen, Procore Technologies, Inc. Jon Avina, Cooley LLP Logan Tiari, Cooley LLP