I took a small starter position in Monday.com very recently and I thought it might be helpful to share some of my research. CloudL introduced the company to the board a few weeks back.
Just to recap, The company is a provider of no code and low code software services. It utilizes modular building blocks that allow users to create their own software applications and work management tools. These modular building blocks include integrators, boards, forms, workspaces, automations, dashboards, and more. This process is all accomplished through an operating system called Work OS and all of this work is done in the cloud.
- Amazing Functionality
I’m not an expert in the field of B2B SaaS software applications but I am impressed with the functionality and flexibility that Monday.com offers. It allows you to start with a small team and expand. It supports just about any type of vertical and it integrates with Mailchimp, Slack, Twilio, Zoom, Salesforce, Adobe, Jira, Gmail, Dropbox, Github, etc.
It’s main distinguishing feature is that it’s more modern then then most project management tools in that it allows people to build their own software and scale as needed. Instead of the business having to change processes to suit the software, the software can be modified for a business’s unique needs. As co-CEO Roy Mann noted in the Q2 conference call “If the last 10 years were defined by the SaaS cloud, then the next 10 years will be focused on giving people the power to create software that treats their own needs.”
Monday.com has a net promoter score of 58 and received a top rated review from The Blueprint, Motley Fool’s business and software advice arm.
See the Videos below if you’d like to learn more
How to use Monday.com | Day-to-day Project Management (Monday Tutorial for Beginners)
- Large and expanding TAM
From the S-1: “Our Work OS is broadly applicable for any organization and team across a growing number of use cases. According to estimates from IDC, our total addressable market was $56.1 billion in 2020 and will grow to $87.6 billion in 2024, representing a 4-year compounded annual growth rate (“CAGR”) of 12%.”
- Amazing Numbers - Q2 was the companies first report as a public company and the results very impressive.
-Revenue up 94% YoY ($70.6 million), up from 85% in Q1 ($59 million)
-The gross margin came in at 89.7% up from 88.3% in the year-ago quarter. Wow, that is the highest I can remember since Alteryx!
-This company is a major cash burner but it did show progress on its path to profitability. non-GAAP operating margin improved from -41% to -14%
-Sales and marketing expenses were $55.5 million or 79% of revenue compared to 101% in the year-ago quarter.
-Its adjusted net loss per share, in turn, narrowed to $0.26 from $0.39 in the year-ago quarter.
-Cash, cash equivalents, short-term deposits and restricted cash was $878.0 million and no debt
-NDRR was 125% for customers with 10 users or more
-The number of paid enterprise customers with more than $50,000 in annual recurring revenue was 470, up 226% from 144, in the second quarter of 2020.
“While we have made tremendous progress in the last few years, we believe that we are still in the very early stages of our growth as a company, and our guidance for the balance of 2021 suggests a strong second half of the year as we continue to drive fundamental improvements to the future of work and collaboration for companies of all sizes globally.” said CFO Eliran Glazer.
3rd quarter Financial Outlook:
Total revenue of $74 to $75 million, representing year-over-year growth of 74% to 76%.
Non-GAAP operating loss of $26 million to $25 million.
For the full year 2021, monday.com currently expects:
Total revenue of $280 million to $282 million, representing year-over-year growth of 74% to 75%.
Non-GAAP operating loss of $93 million to $91 million and negative operating margin of between 33% and 32%.
- A Great Culture
Glassdoor ratings 90% would recommend to a friend and 95% approve of the CEO. Overall 4.6 stars.
- Strong Leadership
Co-Founder and co-CEO Roy Mann previously served as a senior technology leader at Wix.com Ltd. (Nasdaq: WIX), from 2010 to 2012 and from his resume he looks like an experienced Executive and Entrepreneur.
Interview on TD Ameritrade Network
Co-Founder and co-CEO Eran Zinman has also founded other companies and looks to be an experienced guy.
Short Interview on CNBC
Several of the those in management and even the General Counsel came from Wix, a long time Tom Gardner recommendation.
- Strong Backers and Partners
Monday.com was originally conceived of and used inside of web development company Wix. As part of its IPO, both Zoom Video Communications (ZM) and Salesforce.com (CRM) invested $75 million into the business. Salesforce acquired Slack in Dec for $27.7 Billion
Other articles to reference:
Jamin Ball on the Monday.com S1