PROCORE TECHNOLOGIES, INC.PCOR

PROCORE TECHNOLOGIES, INC. Leases Disclosure

10-KFiled Feb 24, 20263 min read
LEASES
The Company has primarily entered into lease arrangements for office space, in addition to other miscellaneous equipment. The Company’s leases have initial non-cancelable lease terms ranging from one to 14 years. Some of the Company’s lease arrangements include options to extend the term of the leases for up to 10 years. However, the lessor does not have the option to cancel any of the Company’s leases prior to the end of the remaining contractual term. Judgment is required when determining the minimum non-cancelable term of the lease. The Company includes options to extend or terminate the lease term that are reasonably certain of exercise. If facts and circumstances regarding those judgments change in future periods, the Company reassesses its initial estimate of the term. The Company’s corporate headquarters offices have initial lease terms expiring in 2027, and 10-year renewal options that the Company was reasonably certain it would exercise at lease commencement. The Company reassesses lease terms when there is a significant event or a significant change that is within its control that directly affects whether the Company is reasonably certain to exercise or not to exercise an option. The Company determined that the present value of lease payments represents substantially all of the fair value of the underlying leased asset and therefore recognizes its corporate headquarters as a finance lease. The components of lease expense were as follows (in thousands):
Year Ended December 31,
202520242023
Finance lease cost:
Amortization of right of use assets
$1,804 $2,645 $2,672 
Interest on lease liabilities
1,112 1,874 1,953 
Operating lease cost8,399 13,264 14,620 
Short-term lease cost567 742 1,344 
Variable lease cost3,160 5,038 4,821 
Total lease cost$15,042 $23,563 $25,410 
Supplemental information related to leases is as follows (in thousands):
December 31,
20252024
Operating Leases
Operating right of use assets$36,024 $28,790 
Amount included within other current liabilities
5,019 3,746 
Operating lease liabilities, non-current45,855 32,697 
Total operating lease liabilities$50,874 $36,443 
Finance Leases 
Finance right of use assets$19,619 $31,727 
Amount included within other current liabilities
1,771 2,228 
Finance lease liabilities, non-current26,557 41,352 
Total finance lease liabilities$28,328 $43,580 
December 31,
202520242023
Weighted-average remaining lease term (in years)
Finance leases11.212.213.2
Operating leases10.28.95.5
Weighted-average discount rate
Finance leases3.80 %4.21 %4.21 %
Operating leases6.04 %6.10 %3.58 %
Maturities of lease payments, net of tenant improvement reimbursement, for leases where the lease commencement date commenced on or prior to December 31, 2025 are as follows (in thousands):
Years Ending December 31,
Operating
Finance
Total
2026$5,900 $2,817 $8,717 
20273,669 2,804 6,473 
20287,479 2,870 10,349 
20295,677 2,956 8,633 
20306,204 3,045 9,249 
Thereafter45,187 20,697 65,884 
Total lease payments, net of tenant improvement reimbursement$74,116 $35,189 $109,305 
Less imputed interest(23,242)(6,861)(30,103)
Total$50,874 $28,328 $79,202 
During the year ended December 31, 2025, the Company modified one of its office leases in Carpinteria, California to reduce the leased premises and waive the intent to exercise a 10-year renewal option, resulting in a reclassification from a financing lease to an operating lease. In addition, the Company modified its office leases in Austin, Texas to adjust the rent obligations, expand the leased premises, and extend the lease terms, which resulted in an increase of $39.5 million in future rent commitments, net of tenant improvement reimbursement, from 2025 through 2038.
As of December 31, 2025, operating lease payments for leases greater than one month, but less than 12 months in duration were not significant. As of December 31, 2025, the Company had outstanding letters of credit totaling approximately $7.6 million on an unsecured basis to secure various leased office facilities in the U.S. and Australia.
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Historical Timeline

Fiscal YearFiled
2025Feb 24, 2026Showing above
2024Feb 26, 2025
2023Feb 26, 2024
2022Mar 1, 2023
2021Mar 4, 2022

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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