• Total Revenue (Q4 2024): $268 million, up 32% year-over-year.
• Total Revenue (FY 2024): $972 million, up 33% from the prior year.
• Annual Recurring Revenue: Reached $1 billion.
• Net Dollar Retention (NDR): 112% in Q4.
• Gross Margin (Q4 2024): 89%.
• Research and Development Expense (Q4 2024): $48.1 million, 18% of revenue.
• Sales and Marketing Expense (Q4 2024): $127.8 million, 48% of revenue.
• Net Income (Q4 2024): $57.3 million, up from $33.7 million in Q4 2023.
• Net Income (FY 2024): $183.3 million, up from $94.9 million.
• Diluted Net Income Per Share (Q4 2024): $1.08.
• Diluted Net Income Per Share (FY 2024): $3.50.
• Free Cash Flow (Q4 2024): $72.7 million, with a margin of 27%.
• Free Cash Flow (FY 2024): $295.8 million, with a margin of 30%.
• Cash and Cash Equivalents (End of Q4 2024): $1.41 billion.
• Employee Headcount: 2,508, an increase of 203 employees since Q3.
• Revenue Guidance (Q1 2025): $274 million to $276 million, growth of 26% to 27% year-over-year.
• Revenue Guidance (FY 2025): $1,208 million to $1,221 million, growth of 24% to 26% year-over-year.
• Free Cash Flow Guidance (FY 2025): $300 million to $308 million, with a margin of approximately 25%.

• Warning! GuruFocus has detected 1 Warning Sign with MNDY.

Release Date: February 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Monday.Com Ltd (NASDAQ:MNDY) achieved a major milestone by reaching $1 billion in annual recurring revenue, highlighting the strong demand for its Work OS platform.
• The company reported a 32% increase in Q4 revenue year-over-year, reaching $268 million, and a 33% increase in FY24 revenue, totaling $972 million.
• Monday.Com Ltd (NASDAQ:MNDY) was recognized as a leader in the Gartner Magic Quadrant in three categories, validating its strategic direction and customer value.
• Significant advancements were made in AI development, with the introduction of AI Blocks and a flexible, consumption-based pricing model for AI capabilities.
• The company successfully expanded into the enterprise market, growing its largest seat count to 80,000, indicating strong enterprise adoption and engagement.

Negative Points

• Despite strong financial performance, Monday.Com Ltd (NASDAQ:MNDY) faces macroeconomic uncertainties, particularly in Europe, which could impact future growth.
• The company anticipates a negative impact from foreign exchange rates, estimating a 100 to 200 basis point effect on FY25 revenue.
• There is a cautious outlook on net dollar retention (NDR) due to demand volatility and macroeconomic uncertainty, despite recent improvements.
• The transition from product-led growth (PLG) to sales-led growth (SLG) has resulted in longer sales cycles, particularly for multiproduct deals.
• The company is still in the process of hiring a new Chief Revenue Officer (CRO), which could impact the execution of its go-to-market strategy.

Q & A Highlights

Q: Can you explain how the AI credits work and how they are consumed? A: Roy Mann, Co-CEO, explained that the AI credits are part of a consumption-based pricing model, allowing all customers to use AI features. An AI action is any task performed by AI within the platform, such as creating a workflow. Customers start with a base plan of 500 credits, and additional credits can be purchased as needed.

Q: What are the assumptions behind the strong constant currency guidance for 2025, given macroeconomic challenges in Europe? A: Eliran Glazer, CFO, stated that the guidance considers stable demand trends across regions, with the US showing healthy demand and Europe stabilizing. The guidance also factors in a negative FX impact due to geopolitical issues and a strong dollar, as well as a 30% headcount growth. No revenue from AI is included in the guidance, and CRM is becoming more significant in terms of ARR contribution.

Q: How did the demand shape up in the US and Europe during the quarter, and what does it indicate for the future? A: Eran Zinman, Co-CEO, noted that US demand remained healthy and stable, while Europe showed signs of stabilization after some choppiness in November. Enterprise growth is accelerating, and overall growth retention and NDR are strong, indicating a positive outlook for 2025.

Q: What is driving the high ACV for the monday Service product, and will it continue as customer count grows? A: Eran Zinman explained that the high ACV is due to a significant overlap between existing customers and potential service customers, leading to more mature customers and top-down decision processes. This trend is expected to continue as the customer base grows.

Q: How is the search for a new CRO progressing, and what changes are being made to the go-to-market strategy? A: Eran Zinman mentioned that the search for a new CRO is ongoing, with a focus on finding someone with a proven track record in scaling up markets. The sales organization has been performing well, and there is confidence in the current management to drive results.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.