Monday.com (MNDY 31.54%), a prominent provider of cloud-based work operating systems, announced its fourth quarter 2024 earnings on February 10, 2025.
The company reported stellar performance, beating analysts' expectations and management forecasts. Monday.com posted an EPS of $1.08, well above the anticipated $0.79, and revenue climbed to $268 million, surpassing the predicted $261 million.
The quarter reflected a strong performance driven by strategic focus in its business operations.
| Metric | Q4 2024 | Q4 Estimate | Q4 2023 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP, Diluted) | $1.08 | $0.79 | $0.65 | 66.2% |
| Revenue | $268M | $261M | $202.6M | 32.3% |
| Net Dollar Retention Rate | 112% | N/A | N/A | N/A |
| Free Cash Flow | $72.7M | N/A | $55.4M | 31.2% |
| Non-GAAP Operating Income | $40.3M | N/A | $21.2M | 90.1% |
Source: SEC filings. Analyst estimates provided by FactSet.
Monday.com specializes in a dynamic work operating system called Work OS. This platform serves as a visual tool for businesses to build custom applications suited to diverse operations such as marketing, customer relationship management (CRM), and project management. It's designed to foster flexibility and customization.
Recently, the company's strategies have centered on expanding product innovations and optimizing operational efficiencies. Key drivers include product enhancements and broader market presence, which are critical success elements for revenue growth and customer retention.
Throughout the quarter, Monday.com advanced its product suite with the rollout of the monday service for help-desk operations, receiving notable traction. Furthermore, developments in artificial intelligence, like AI Blocks and the Digital Workforce tools, are transforming workflows and enhancing the user experience. Such innovations are pivotal, given the competitive landscape in the work operating systems segment.
From a financial standpoint, Monday.com exceeded revenue expectations, achieving $268 million versus the $260 to $262 million guidance range. Non-GAAP operating income also outperformed, recording $40.3 million, above the projected $29 to $31 million. Free cash flow exhibited strong growth to $72.7 million, surpassing management's own anticipated range.
The Non-GAAP operating margin improved from 10% to 15%, indicating better cost management strategies. Operating activities generated significant cash inflow, with net cash provided reaching $76.7 million in Q4 2024, signaling enhanced profitability.
On the customer front, there was an increase in high-value clients. Those contributing over $50,000 and $100,000 in annual recurring revenue showed year-over-year growth rates of 39% and 45%, respectively. However, challenges with net new customer acquisition were noted, attributed to broader economic pressures echoed in market feedback.
As Monday.com looks to the future, management projects revenue for Q1 2025 between $274 million and $276 million. While this reflects continued growth, it's at a slower pace compared to previous periods. Management remains vigilant about foreign currency fluctuations and macroeconomic conditions that could impact customer acquisition strategies.
In terms of strategic priorities for fiscal year 2025, enhancing AI capabilities and scaling international operations are front and center. Alongside these plans, management reiterated its commitment to delivering sustainable growth, with an eye on profitability and market expansion.
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