NEW YORK & TEL AVIV–(BUSINESS WIRE)–monday.com (NASDAQ: MNDY), the multi-product platform that runs all core aspects of work, today reported financial results for its first quarter ended March 31, 2024.
Management Commentary:
“Our Q1 results mark an exceptional start to the year, with strong demand for our products across all ends of the market,” said monday.com co-founders and co-CEOs, Roy Mann and Eran Zinman. “We are particularly pleased with the rapid growth of monday sales CRM and monday dev, which are both now accessible to all customers and saw accelerating account additions in the quarter. As we continue to evolve the WorkOS platform, we remain focused on delivering growth at scale while driving meaningful business value for our customers.”
“Q1 represents another great step forward for monday.com, with strong revenue growth and profitability, as well as record free cash flow. These results are supported by recent adjustments made to our pricing model, which thus far have exceeded our initial expectations,” said Eliran Glazer, monday.com CFO. “As a result of our strong performance in Q1, we remain highly confident in delivering the ‘base case’ guidance outlined at our 2023 Investor Day.”
First Quarter Fiscal 2024 Financial Highlights:
- Revenue was $216.9 million, an increase of 34% year-over-year.
- GAAP operating loss was $5.0 million compared to a loss of $22.8 million in the first quarter of 2023; GAAP operating margin was negative 2% compared to negative 14% in the first quarter of 2023.
- Non-GAAP operating income was $21.5 million compared to a loss of $0.3 million in the first quarter of 2023; non-GAAP operating margin was 10%, compared to 0% in the first quarter of 2023.
- GAAP basic and diluted net income per share was $0.14, compared to GAAP basic and diluted net loss per share of $0.31 in the first quarter of 2023; non-GAAP basic and diluted net income per share was $0.64 and $0.61, respectively, compared to non-GAAP basic and diluted net income per share of $0.15 and $0.14, respectively, in the first quarter of 2023.
- Net cash provided by operating activities was $92.0 million, with $89.9 million of free cash flow, compared to net cash provided by operating activities of $42.7 million and $38.7 million of free cash flow in the first quarter of 2023.
Recent Business Highlights:
- Net dollar retention rate was 110%.
- Net dollar retention rate for customers with more than 10 users was 114%.
- Net dollar retention rate for customers with more than $50,000 in annual recurring revenue (“ARR”) was 114%.
- Net dollar retention rate for customers with more than $100,000 in ARR was 113%.
- The number of paid customers with 10+ users was 55,515, up 18% from 47,228 as of March 31, 2023.
- The number of paid customers with more than $50,000 in ARR was 2,491, up 48% from 1,683 as of March 31, 2023.
- The number of paid customers with more than $100,000 in ARR was 911, up 55% from 588 as of March 31, 2023.
- monday sales CRM and monday dev are now available to all customers, and both products saw accelerated account growth in the quarter.
Financial Outlook:
For the second quarter of fiscal year 2024, monday.com currently expects:
- Total revenue of $226 million to $230 million, representing year-over-year growth of 29% to 31%.
- Non-GAAP operating income of $17 million to $21 million and operating margin of 8% to 9%.
- Free cash flow of $47 million to $51 million and free cash flow margin of 21% to 22%.
For the full year 2024, monday.com currently expects:
- Total revenue of $942 million to $948 million, representing year-over-year growth of 29% to 30%.
- Non-GAAP operating income of $77 million to $83 million and operating margin of 8% to 9%.
- Free cash flow of $238 million to $244 million and free cash flow margin of 25% to 26%.
Non-GAAP Financial Measures:
This press release and the accompanying tables contain the following non-GAAP financial measures: revenue excluding FX impacts, non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing expenses, non-GAAP research and development expenses, non-GAAP general and administrative expenses, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income, non-GAAP net income per share, free cash flow, and free cash flow margin. Certain of these non-GAAP financial measures exclude share-based compensation.
monday.com believes that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to monday.com’s financial condition and results of operations. monday.com management uses these non-GAAP measures to compare monday.com performance to that of prior periods, for trend analysis and for budgeting and planning purposes. monday.com believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing monday.com financial results to the results of other software companies, many of which present similar non-GAAP financial measures to investors. The non-GAAP financial information is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies.
Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in monday.com financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures.
Reconciliation tables of the most directly comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release. monday.com urges investors to review these reconciliation tables and not to rely on any single financial measure to evaluate the monday.com business. Management is not able to forecast GAAP operating income (loss) on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting share-based compensation expense, the amounts of which may be significant in future periods. Management is not able to forecast GAAP net cash provided by operating activities on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting property and equipment purchases and capitalized software costs, the amounts of which may be significant in future periods
Definitions of Business Key Performance Indicators
Net Dollar Retention Rate
We calculate Net Dollar Retention Rate as of a period end by starting with the ARR from customers as of the 12 months prior to such period end (“Prior Period ARR”). We then calculate the ARR from these customers as of the current period end (“Current Period ARR”). The calculation of Current Period ARR includes any upsells, contraction and attrition. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the Net Dollar Retention Rate. For the trailing 12-month calculation, we take a weighted average of this calculation of our quarterly Net Dollar Retention Rate for the four quarters ending with the most recent quarter.
Annual Recurring Revenue (“ARR”)
Is defined to mean, as of the measurement date, the annualized value of our customer subscription plans assuming that any contract that expires during the next 12 months is renewed on its existing terms.
About monday.com:
The monday.com Work OS is a low code- no code platform that democratizes the power of software so organizations can easily build work management tools and software applications to fit their every need. The platform intuitively connects people to processes and systems, empowering teams to excel in every aspect of their work while creating an environment of transparency in business. monday.com has offices in Tel Aviv, New York, Chicago, Denver, London, Warsaw, Sydney, Melbourne, São Paulo, and Tokyo. The platform is fully customizable to suit any business vertical and is currently used by over 225,000 customers across 200 industries in over 200 countries and territories.
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