The gap between leading tech giants and struggling startups in the architecture, engineering, and construction (AEC) software space reveals itself clearly through financial performance. We took a deep dive into the financial statements of leading AEC software companies again and compared them to proven SaaS success stories from other sectors to unveil patterns that can inform strategic decisions for founders and investors alike.
This Week On Practical Nerds - tl;dr
- Adobe outperforms the entire AEC sector on Rule of 40 despite equal growth rates - demonstrating superior operational efficiency with the same top-line growth
- Procore's negative margins persist after 22 years in business - though showing improvement, still an outlier among mature software companies
- Sales efficiency correlates directly with ecosystem strength and product stickiness - companies with integrated product suites and strong user communities demonstrate superior unit economics
- Intuit and Adobe set the gold standard for operational efficiency - achieving nearly $900K and $700K in annual revenue per employee, respectively
How Adobe Achieves Better Profitability Than AEC Software Companies With Similar Growth Rates
What financial metrics reveal about successful SaaS business models
Two years ago, we conducted our first benchmarking exercise comparing Autodesk, Bentley, and Procore against Adobe, ServiceNow, and Intuit. Now, we've updated those numbers to see how things have evolved, and the patterns that emerge are telling.
Click here for the ConTech's SaaS benchmarking 2025 version: https://docs.google.com/spreadsheets/d/e/2PACX-1vSq_2rzIyn94lpzCMpeRdJeBYQb_ipN-leMbqNSYdFG3b0sp6XlZ_S3zEoJTNzSRN44yUnIV7RHKeTQ/pubhtml#
When examining revenue growth, we see a fascinating convergence: Autodesk and Bentley both show 11% growth, while Adobe matches this exact same growth rate. Procore leads with 26% (though that's down from 36% two years ago), and ServiceNow follows at 23%. For companies of this size, maintaining double-digit growth is impressive - but what's more interesting is what happens to that revenue further down the income statement.
On gross margins, Autodesk improved from 90% to 91%, maintaining its position as best-in-class. Bentley increased from 78% to 81%, and Procore improved from 79% to 82%. These are excellent numbers that even surpass ServiceNow (79%) and Intuit (79%), with Adobe close behind Autodesk at 89%.
But the real story emerges when we look at the "Rule of 40" - a key benchmark that adds revenue growth percentage to operating margin. Adobe stands alone at 42%, while Autodesk, Bentley, ServiceNow, and Intuit all hover between 33-37%. Procore remains the clear outlier at just 15%.
This is particularly telling because Adobe achieves this superior performance despite having the same growth rate as Autodesk and Bentley. The difference lies in profitability - Adobe maintains a 31% operating margin compared to 22% for both Autodesk and Bentley.
What drives this difference? Our analysis suggests that well-established ecosystems with sticky products demonstrate superior financial efficiency. Adobe has built an integrated suite with high retention rates and strong community adoption. While its growth rate matches the AEC leaders, its ability to convert that growth into profit sets it apart.
In examining operational metrics further, we found that Adobe spends just $0.27 on sales and marketing for every $1 of revenue, while Autodesk spends $0.33 and Procore spends $0.48. Similarly, Adobe invests 18% of revenue in R&D compared to Autodesk's 24% and Procore's 27%. This operational efficiency translates directly to the bottom line.
For founders building in the AEC space, the lesson is clear: Growth alone isn't everything - building toward profitability and creating an ecosystem that increases customer stickiness should be prioritized from the early stages.
Why Procore Still Operates at a Loss After More Than Two Decades
The long road to profitability for construction tech platforms
Procore presents a fascinating case study in our benchmarking exercise: Founded in 2002, the company has been operating for 22 years, yet still shows negative operating income (-12%) in our analysis.
This represents significant improvement from two years ago when Procore's operating margin stood at -40%. The company has been working to address this issue, reducing both its sales and marketing intensity (from $0.59 to $0.48 per dollar of revenue) and R&D intensity (from 38% to 27% of revenue).
However, these improvements still leave Procore as an outlier in our benchmark set. Every other company we analyzed - regardless of whether they serve the AEC industry or broader markets - maintains positive operating margins. Autodesk and Bentley both operate at 22% margins, while Adobe leads at 31%.
What's concerning is that these negative margins persist despite Procore's considerable maturity. This isn't a young startup still finding product-market fit or scaling its operations. At 22 years old, the company should theoretically have established efficient operational processes and achieved sustainable profitability.
Free cash flow offers a slightly brighter picture - Procore now shows a positive 11% free cash flow margin, up from -5% two years ago. However, as we noted in our analysis, this metric is somewhat inflated by stock-based compensation, and still significantly lags behind its peers (Bentley at 31%, Autodesk at 26%).
Looking at other efficiency metrics reinforces this pattern. Procore's annual revenue per employee stands at $274,000 - below Autodesk ($400,000) and far behind efficiency leaders like Intuit ($900,000) and Adobe ($700,000).
The question becomes even more pressing when looking at future projections. While Procore has historically grown faster than its AEC peers, recent guidance suggests this advantage is fading - they're now projecting just 8% growth for the upcoming year, below Autodesk's projections.
For founders, the lesson here might be to balance growth with a clear path to profitability. While venture capital may allow for extended periods of losses in pursuit of market share, public markets eventually demand financial discipline.
How Product Stickiness and Ecosystem Strength Impact Sales Efficiency in Software
The connection between user experience and customer acquisition costs
One of the most striking patterns in our benchmarking exercise is the relationship between sales efficiency, product stickiness, and ecosystem strength.
When we examine sales and marketing intensity - how many dollars a company spends on sales and marketing to generate one dollar of revenue - clear patterns emerge. In terms of sales and marketing efficiency, Bentley leads the pack spending only $0.19 for every dollar of revenue, followed by Adobe and Intuit (both at $0.27), Autodesk ($0.33), ServiceNow ($0.35), and finally Procore ($0.48). This significant variation tells an important story about go-to-market efficiency.
What might explain these differences? Our analysis suggests three key factors:
1. Product-led growth creates more efficient customer acquisition
Adobe and Intuit both benefit from products that users intuitively understand and seek out. Rather than relying exclusively on enterprise sales teams, these companies leverage direct user adoption, which reduces acquisition costs. Their marketing often targets end-users rather than exclusively pursuing enterprise buyers.
2. Ecosystem integration drives stickiness and expansion
Intuit exemplifies this approach - customers who start with QuickBooks often add TurboTax, Credit Karma, and other products over time. Each additional product increases the value of the ecosystem and reduces churn. This creates a virtuous cycle where existing customers generate more revenue without requiring additional sales and marketing spend.
3. Community strength and default status reduce acquisition costs
Bentley's exceptional sales efficiency ($0.19 per dollar) likely stems from its position as the default choice for infrastructure-related software. When you're widely recognized as the standard in your category, customers come to you rather than requiring extensive outbound efforts.
This efficiency extends to R&D spending patterns as well. Adobe (18%) and Intuit (17%) invest proportionally less in R&D relative to revenue than Autodesk (24%) and Procore (27%). This doesn't necessarily mean their products are less innovative - rather, their established product bases may require more incremental improvements rather than fundamental rebuilds.
When examining G&A intensity, we observe another interesting pattern. Bentley and Procore both spend 19% of revenue on general and administrative expenses, significantly higher than their peers. Adobe (13%), Autodesk (12%), and Intuit (12%) maintain more efficient administrative operations, while ServiceNow leads the pack with just 9% G&A intensity. This indicates that older, more established companies in the AEC space may have opportunity to streamline their administrative operations to match best-in-class performers.
The annual revenue per employee metric further illustrates these efficiency differences. Intuit leads with an impressive $900,000 per employee, followed by Adobe at $700,000. Autodesk generates $400,000 per employee, while ServiceNow comes in at $300,000. Procore and Bentley trail the group at $274,000 and $246,000 respectively. Intuit and Adobe's remarkable efficiency demonstrates how powerful ecosystems with product-led growth can create leveraged business models that simply outperform traditional enterprise software approaches.
This efficiency difference is also reflected in the Cash Conversion Score, which shows how effectively companies convert their invested capital into revenue. Adobe leads with an impressive 95%, while Procore (69%) surprisingly ranks ahead of Autodesk (66%) and Intuit (65%). Bentley lags significantly at 41%, suggesting a more capital-intensive business model.
Market Valuations and Investor Perspectives
Do public markets efficiently price AEC software companies?
Looking at market valuations reveals some interesting disconnects between operational performance and how the market values these companies. ServiceNow stands out with the highest revenue multiple (18.5x) and an extraordinary operating income multiple of 150x, despite not leading on many operational metrics. Intuit, Bentley, and Autodesk all have revenue multiples between 10-11x and operating income multiples around 47x. Procore trades at 8.7x revenue with no operating income multiple due to negative earnings. Perhaps most surprisingly, Adobe, which leads on the Rule of 40 and shows exceptional operational efficiency, trades at just 7.6x revenue and 24x operating income.
This raises interesting questions about market perceptions, growth expectations, and potential mispricing in the public markets. For private companies and founders, these public market valuations provide crucial benchmarks for what to expect as companies mature.
As one growth investor noted (referenced in our discussion): public markets are often more efficient at pricing software companies than private markets. The evidence lies in how VC fund performance metrics change as portfolio companies approach exit - many private companies see their valuations compress as they near public markets, suggesting private markets may systematically overvalue software businesses.
This has important implications for founders: optimizing for the highest possible valuation in each private round may set unrealistic expectations that become harder to meet over time. A more measured approach to valuation throughout a company's growth journey may create more sustainable value in the long run.
Looking Back: What We Learned in Our 2023 Benchmarking Study
When we first published our AEC software benchmarking study in 2023, we uncovered several patterns that have provided context for today's analysis. Two years ago, Procore was growing at an impressive 36% rate, substantially outpacing Autodesk (15%) and Bentley (14%). However, this came at a severe cost - Procore operated at a -40% operating margin, putting it far outside the sustainable business territory.
The 2023 data revealed critical efficiency gaps: Autodesk demonstrated best-in-class gross margins at 90%, while Bentley showed remarkable sales efficiency, spending just $0.18 to acquire $1 of revenue. Procore, despite its growth, was spending $0.59 per dollar of revenue on sales and marketing - more than three times Bentley's intensity. Similarly, Procore's R&D investment was dramatically higher at 38% of revenue compared to Adobe's 17%.
Perhaps most telling was the cumulative operating profit over the four years prior to our 2023 analysis. Autodesk had generated $2.58 billion in operating profit, while Procore had burned through $717 million - despite being an 18-year-old company at that point. This stark contrast highlighted how growth without operational discipline can lead to long-term financial challenges.
Our 2023 analysis also identified Adobe as the gold standard with a remarkable Rule of 40 score of 51% and annual revenue per employee of $607,000. This performance underscored the value of building robust product ecosystems with strong community adoption - a lesson that remains central to our findings today. The company's cash conversion score of 140% demonstrated the financial power of ecosystem-driven business models compared to traditional sales-led approaches.
Click here for the public ConTech's SaaS benchmarking 2023 sheet: https://docs.google.com/spreadsheets/d/e/2PACX-1vQndf_odj9Iujs4MvG7bmEU7V-A7krLWs1JTuXTIw61JYvU9eOcN9wiKv4nkf5mQukekGCYJbQC537-/pubhtml
Conclusion: The Balanced Growth Framework
Our updated benchmarking exercise suggests several key principles for software companies in the AEC space and beyond:
- Consider balanced metrics rather than maximizing a single dimension - The Rule of 40 provides a useful framework for balancing growth and profitability
- Build for ecosystem expansion rather than standalone products - Companies with integrated product suites demonstrate superior unit economics
- Pay attention to efficiency ratios as you scale, not just top-line growth - Revenue per employee and sales & marketing intensity are powerful predictors of long-term success
- Recognize that public markets eventually value efficient growth over pure expansion - Setting realistic expectations early prevents painful valuation compression later
The leaders in our benchmark set - particularly Adobe and Intuit - demonstrate that building sticky products with strong communities, focusing on product-led growth, and creating ecosystem effects can lead to dramatically more efficient business models than traditional enterprise sales approaches.
For AEC software companies specifically, there's clear room for improvement in operational efficiency. While Autodesk and Bentley demonstrate solid performance, the sector as a whole lags behind software leaders from other industries on key metrics like the Rule of 40 and sales efficiency.
As competition in the AEC software space intensifies, companies that can build strong product ecosystems with community-driven adoption may find themselves with structural advantages in both growth and profitability - a combination that ultimately drives superior returns for investors and founders alike.
Click here for the ConTech's SaaS benchmarking 2025 version: https://docs.google.com/spreadsheets/d/e/2PACX-1vSq_2rzIyn94lpzCMpeRdJeBYQb_ipN-leMbqNSYdFG3b0sp6XlZ_S3zEoJTNzSRN44yUnIV7RHKeTQ/pubhtml#
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