Stock Story -
Project management software maker Monday .com (NASDAQ:MNDY (NASDAQ:MNDY)) reported Q2 CY2024 results exceeding Wall Street analysts' expectations, with revenue up 34.4% year on year to $236.1 million. The company also expects next quarter's revenue to be around $245 million, slightly above analysts' estimates. It made a non-GAAP profit of $0.94 per share, improving from its profit of $0.41 per share in the same quarter last year.
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Monday.com (MNDY) Q2 CY2024 Highlights:
- Revenue: $236.1 million vs analyst estimates of $229.1 million (3.1% beat)
- Adjusted Operating Income: $38.42 million vs analyst estimates of $20 million (92.1% beat)
- EPS (non-GAAP): $0.94 vs analyst estimates of $0.56 (67.3% beat)
- Revenue Guidance for Q3 CY2024 is $245 million at the midpoint, above analyst estimates of $243 million
- The company lifted its revenue guidance for the full year from $945 million to $958.5 million at the midpoint, a 1.4% increase
- Gross Margin (GAAP): 89.9%, up from 88.9% in the same quarter last year
- Free Cash Flow of $50.82 million, down 43.5% from the previous quarter
- Net Revenue Retention Rate: 114%, up from 110% in the previous quarter
- Customers: 2,713 customers paying more than $50,000 annually
- Market Capitalization: $11.23 billion
Founded in Israel in 2014, and named after the dreaded first day of the work week, Monday.com (NASDAQ:MNDY) makes software as a service platforms that helps teams plan and track work efficiently.
Project Management SoftwareThe future of work requires teams to collaborate across departments and remote offices. Project management software is both driving this change and benefiting from it. While the trend of collaborative work management has been strong for a while, the Covid pandemic has definitively accelerated the demand for tools that allow work to be done remotely.
Sales GrowthAs you can see below, Monday.com's 56% annualized revenue growth over the last three years has been incredible, and its sales came in at $236.1 million this quarter.
Unsurprisingly, this was another great quarter for Monday.com with revenue up 34.4% year on year. On top of that, its revenue increased $19.19 million quarter on quarter, a very strong improvement from the $14.34 million increase in Q1 CY2024. This is a sign of re-acceleration of growth and great to see.
Next quarter's guidance suggests that Monday.com is expecting revenue to grow 29.5% year on year to $245 million, slowing down from the 38.2% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 26.4% over the next 12 months before the earnings results announcement.
Large Customers Growth This quarter, Monday.com reported 2,713 enterprise customers paying more than $50,000 annually, an increase of 222 from the previous quarter. That's quite a bit more contract wins than last quarter and quite a bit above what we've typically observed in past quarters, demonstrating that the business has good sales momentum. We've no doubt shareholders will take this as an indication that the company's go-to-market strategy is working very well.
Key Takeaways from Monday.com's Q2 Results We enjoyed seeing Monday.com materially improve its net revenue retention this quarter. We were also glad its revenue and operating profit outperformed Wall Street's estimates. Guidance was good as well. Next quarter's revenue guidance exceeded expectations and full year guidance was raised. Overall, this was a great quarter with few blemishes. The stock traded up 5.9% to $239 immediately after reporting.