MNDY Q1 beat and raise, up 11% premarket

First quarter revenue of $162.3 million grew 50% year over year
Number of customers with more than $50k ARR grew 75% year over year
Achieved record quarterly revenue and free cash flow

First Quarter Fiscal 2023 Financial Highlights:

  • Revenue was $162.3 million, an increase of 50% year-over-year, or 51% on an FX-adjusted basis.
  • GAAP operating loss was $22.8 million compared to a loss of $67.5 million in the first quarter of 2022; GAAP operating margin was negative 14% compared to negative 62% in the first quarter of 2022.
  • Non-GAAP operating loss was $0.3 million compared to a loss of $43.8 million in the first quarter of 2022; non-GAAP operating margin was negative 0% compared to negative 40% in the first quarter of 2022.
  • GAAP net loss per basic and diluted share was $0.31 compared to GAAP net loss per basic and diluted share of $1.48 in the first quarter of 2022; non-GAAP net income per basic and diluted share was $0.15 and $0.14, respectively, compared to non-GAAP net loss per basic and diluted share of $0.96 in the first quarter of 2022.
  • Net cash provided by operating activities was $42.7 million, with $38.7 million of free cash flow, compared to net cash used in operating activities of $12.9 million and negative $16.2 million of free cash flow in the first quarter of 2022.

Recent Business Highlights:

  • Net dollar retention rate was over 115%.
  • Net dollar retention rate for customers with more than 10 users was over 125%.
  • Net dollar retention rate for customers with more than $50,000 in annual recurring revenue (“ARR”) was over 125%.
  • The number of paid customers with more than $50,000 in ARR was 1,683, up 75% from 960 as of March 31, 2022.
  • Announced the monday AI Assistant, with plans to open the platform for third party developers to build AI apps on the monday Work OS.
  • Launched the first phase of mondayDB, upgrading our underlying infrastructure.
  • Moved monday dev – our product tailored for development teams – out of beta.
  • Opened monday sales CRM and monday dev to existing customers.

Financial Outlook:

For the second quarter of the fiscal year 2023, currently expects:

  • Total revenue of $168 million to $170 million, representing year-over-year growth of 36% to 37%.
  • Non-GAAP operating income of $2 million to $4 million and operating margin of 1% to 2%.

For the full year 2023, currently expects:

  • Total revenue of $702 million to $706 million, representing year-over-year growth of 35% to 36%.
  • Non-GAAP operating income of $8 million to $12 million and operating margin of approximately 1%.

I have a sizeable leveraged short put position


MNDY Q1 beat and raise, up 11% premarket

It’s now up 20% pre-market (8 minutes later). I have a 13% position, my largest though not by a lot. I have certainly talked a lot about my confidence in Monday.


By the way, it’s probably unlikely that it will finish up that much in the market that we are living through.


Here are my notes from the Q/A section of MNDY’s quarterly results.

MNDY Q1 FY23 Analyst Q/A
05/15/2023 7:30 AM Central Time

Q Company direction in the future?
A Focusing on what they have now. Going forward see MNDY going into areas they’re highly differentiated and not going down specific vertical areas. Will allow the community to fill these.

Q Expand on generative AI. Is it your own product?
A We think about our already capabilities and automating these using AI. Make the platform work for you to further automate that. Make company more efficient. MNDY has a unique data set.

Q MNDY DB data set -please expand.
A Ahead of schedule, now open to 30% of customers. Super positive feedback from customers. Going forward, further release MNDY DB 1.0 by end of next quarter. Further release additional expansions.

Q Guidance.
A $7M and $5M and see opex savings. Looking at challenging macro conditions. Overall efficiency and cash generation is looking good. Took this into account when considering their guidance.

Qc Continued growth. Has there been a change in the overall environment? Rank out performance items.
A MNDY offering being so broad. 70% are non-tech. Quality of customers they’re joining is even higher than before. All these things combined have created a great environment.

Q When you say letting the 3rd parties expand the verticals. Is MNDY then required to expand?
A Builders/developers can build because there are no walls/limits. Will continue to expand the capabilities of MNDY wherever there is growth as pushed by customers.

Q Go to market
A CRM is going really well and good momentum acquiring customers. Doubling down on work management, the bread and butter of MNDY. Overall strategy, packaging products and seeing signs of ability to cross sell the products. There’s a lot of upside and optionality built into their model.

Q NRR is being pressured. Where are new customers coming from?
A Continue to see slowdown. Larger customers especially are becoming more optimized. Expansion into CRM is big. Gross retention will be at least more slower.

Q Strength of demand is impressive. What’s driving the optimism re: near term.
A Seeing strong customer demand around all customer segments. Enterprise has been slower due to macro. 200 customers were added. 80% vs. 70% in the past. MNDY DB is providing a positive for the future. Broad-based strength.

Q Guiding for profitability by end of year. What do you plan to do with the $?
A Continue to invest in the business w/ organic growth. MNDY is a very innovative company. Also thinking about potentially M&A that is strategic in the longer term. Mostly organic growth will be their focus with the $.

Q Converting customers
A Seeing both CRM products and flexibility to operate their business as well as their workload product. Opens the opportunity for expansion into other product areas (optionality).

Q Where are we re: cost per add?
A Still seeing cost per add and media as way cheaper than it was a year ago. It’s stabilized and not seeing any more reductions. Customers they’re gaining are really looking for solutions. Better customers than they would have seen a year ago.

Q Strong enterprise customer adds at 200.
A It’s more about MNDY’s expansion and go to market team’s work. Continue to double down on this.

Q What’s driving enterprise growth?
A Customers are buying more seats.

Q Raised guidance more than double than in the past. What’s driving this?
A They expect to see strong demand and this allowed them to make better guidance prediction.

Q Do you envision a world 3-4 years w/ other pre-built apps in addition to CRM and work mgt?
A Probably going to add HR and other products on their platform. Definite opportunities there and with other applications people can build on their platform. See 5-6 additional applications into the future.
Their customers are building whatever they want on top of the platform. MNDY has great visibility into these applications based on what their customers are building and they expect to let their customers drive this and respond accordingly.

Q Customer ecosystems.
A Great momentum with customer ecosystems. Enterprises help onboard customers and it’s been a great way to sell and they continue to invest in this.

Q How do you see your AI expanding your customers?
A We’re super excited about AI. MNDY has been a place where we give customers more power to expand their tools the way they want to. In a great place and this is a great opportunity. No specifics as to how and what quite yet.

Q SMB cohort and how that’s trending?
A In the last few quarters, SMB and enterprise have grown nicely. Doubling down in both SMB and enterprise. See a lot of durability in both areas.

Q V2 & V3, where will future iterations be?
A Started with smaller and larger accounts and have a good mixture with most coming from larger accounts. Dashboards will be blazing fast, more scaling opportunities, offer ability to expand easier.

Q MNDY DB, is it essentially live with everything it will come with. How quickly can it ramp up?
A It’s far from where they want it to be. Very pleased with the rate of adoption.

Q Billings growth was up at 43% vs. 41%. What drove this?
A We look more at revenue growth and new customers.

Q Where have you seen the best uptick in CRM. Any specific verticals?
A No specific industries/verticals. What’s surprising is that people are migrating from legacy CRMs and go to the next level w/ MNDY. Plan to offer this more proactively.



Here’s some of my notes from the CC. Mine are much more opinionated than those of SJO.

Q1, In addition to what’s already been pointed out here, why I added back a 10% position

Bolding and what’s in parentheses are mine.

Roy Mann, in the QnA
*I can add that we have a lot of visibility into what’s working and what’s not. Because like you said, like, monday is a platform, our customers are building whatever they want on top of us. And when we see something succeeds exceptionally and identify use case in a penetration point, it’s much more clear to us where to start and what is the need that is out there. So we have great visibility into, like, the *areas that we might go into next…

Roy Mann, again in QnA
…As we go upmarket with larger enterprises, I think the fact that our enterprises (those developing on the Platform) help onboard those customers and develop customized feature for them really help us scale our enterprise offering

Me: I pointed out my belief Platforms where others build what ever they want, in a way that scales the benefits for said infrastructure, are the only ‘genuine’ Platforms. I like how Management is pointing this out more clearly, when I believe that they hadn’t done this well in the past.

Erin Zinman, Co-CEO, opening remarks
This month, the first version of monday AI Assistant is going live, with features such as automated task generation, email composition, and document salaries, all features which will greatly increase the efficiency, speed and general experience of our users.

In June, we are opening our platform to third party developers to build AI apps on the Work OS, increasing collaboration and speedy innovation. These apps will be available on our monday AI Assistant infrastructure.

Internally too, we are focusing on using the data to enhance our operations through AI, including automating parts of our sales operations, our customer experience and adding an AI layer to our inhouse business intelligence tool, BigBrain.

Finally, we plan to harness our data to help future customers navigate the best ways to set up and maintain the most optimal work flows and automations as well as connect the right people to the right processes. This can significantly improve’s speed of adoption within companies and further enhance data driven product development initiatives.

Me:Just as Datadog not utilizing AI was the reason I sold out, I loved the color on just how well is moving forward.

This quarter, we’re also delighted to kick off the first phase of mondayDB. As a reminder, mondayDB is a brand new data infrastructure for the monday Work OS platform, enabling bigger workflows, larger boards and dashboards, more robust developer capabilities and improved overall performance. mondayDB is being released in multiple phases over the next year, with each phase expected to boost performance and scale.

The first phase of mondayDB is focused on monday Boards. Now available to 30% of accounts, mondayDB 1.0 is already having a big effect on board performance and roll times, especially on large and complex boards. MondayDB 1.0 loads boards with thousands of items within a matter of seconds, allowing customers to work with bigger, more complex workflows than ever. We expect mondayDB 1.0 to be rolled out to all customers by the end of Q2.”. [In QnA-Eran, …mondayDB is definitely something that we see that will help to accelerate our ability to not just acquire enterprise customers, but also to scale them…And again, we continue to develop a lot of – apart from mondayDB, a lot of features around security, admin, permissions. We just this quarter released a bunch of features. So I think all that investment really drives the enterprise growth.

Me: A DB with Security and Permissions, sounds like their becoming a Snowflake?

I’m hoping Snowflake is taking similar measure; although, at Snowflakes scale they’re perhaps more circumspect, due to the continued limitations in early adoption of AI.