I have one word to say about UPST…OUCH!
Monday.com is another ouch today but their ER was pretty painless.
Third quarter revenue growth accelerated to 95% year over year
Net-dollar-retention rate for customers with 10+ users was over 130%
Number of Customers with $50k ARR growth accelerated to 231% year over year
They’re calling for a slight deceleration of revenues next quarter, but taking into account the beat from this quarter over their prior estimates, it sounds like it is still going to be around the same.
The number I’m excited about is the growth in big accounts…up another 230%!!! That’s enormous. And net retention keeps inching skyward.
Post Mortem on UPST: Being overweighted like most of us were in a non-SAAS company that suffered from “choppy orders” (like we hear from most non-SAAS companies at one time or another) is a lesson to take away. UPST is a great company, but it’s going to be subject to the vicissitudes of life more than our other favorites. Maybe we never go too overweight on companies outside that construct.
I bought into the groupthink here that UPST was immune to things like “fraud” and I got way overextended the last week before ER and I’m paying a heavy price. But I’m gonna take my lumps and hope I am smarter than this in the future. Selling 40% of my UPST at 242 this morning and loading up on Monday.com at 398 (with lock up expiration in a few weeks, which I forgot) shows I have a long way to go.
But I do really like Monday.com.
fwiw, Monday’s lockup period is NOT in few weeks in December. Monday’s lockup is tomorrow Friday, Nov 12, 2021.
From the earnings release:
“As this is our second earnings release as a public company, the Reporting Condition has been met. As a result, all shares will become eligible for sale in the public market at the open of trading on November 12, 2021 (subject to trading limitations on shares held by affiliates of the company, continued vesting of any unvested equity awards as of such date and our Insider Trading Compliance Policy).”
I think someone already posted this information to our board but unfortunately that got lost due to so much of other noise.
Yes I am scratching my head about the drop today
MNDY reported earnings that seem to be stellar
In Qtr 2 Earnings Report guided for revenue of 74-75 million
Produced revenue of 83 million
In Qtr 2 Earnings Report guided for Non GAAP loss of 25-26 million
Produced Non GAAP loss of 9.4 million
In the 2nd qtr Earnings Release Guide for the full year 2021,
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%.
In the 3nd qtr Earnings Release Guide for the full year 2021,
Total revenue of $300 million to $301 million, representing year-over-year growth of 86% to 87% Improvement of 12%
Non-GAAP operating loss of $65 million to $64 million and negative operating margin of 22% to 21%. Improvement of 30% and 11%
Qtr 2 Increase in customers with over 50K ARR 125%
Qtr 3 Increase in customers with over 50K ARR 231%
The numbers seem to be great so why the drop in the price today?
This is leading me to a learning moment and I hope the board will help me.
I am guessing the price drop is related to the lock-up expiration. On the conference call one of the analysts asked how many shares would become available to trade but he received a non-answer.
The IPO listed 3,700,000 shares but the balance sheet shows 44,267,434 so my question is where did the additional shares come from.
If the 3,700,000 shares represent the float and the other shares belong to insiders and VC’s then as I see it the possibility of dilution is 10.96/1
By that math it is possible that a share bought today for $350.00 in theory could trade for as little as $31.93 after lock up.
To be clear I am sure that won’t happen, or won’t happen to that degree but is my reasoning sound?
The revenue and enterprise growth rate from this quarter is great! The next quarter guidance is same as last quarter which is a 4.8% up from current quarter. So in terms of growth, MNDY is doing as great as it was historically. Revenue is up 17.5% QoQ sequentially or 90% annualized. Customer > 50k is up 30.4% sequentially or 190% annualized! For good companies like DDOG, the large customer is growing at "just around 12% QoQ sequentially. THe huge price drop today is unrelated to company performance and unjustified . So I don’t worry about it. I boosted MNDY to 20% allocation(#1 position) from 6% few days ago after selling out DCBO and NVEI which I will discuss more in monthly review.