Monday reported results of their December quarter on Feb 13, and they were great. The numbers have been discussed extensively on the board so I won’t repeat them, but I will give you my impressions and thoughts. Here they are:
I’ve been adding small amounts for the last couple of months in spite of my annoyance about all the offices they were opening, etc. but because the business was doing well, the stock price was doing well, and because of their new products, like Monday Sales CRM, that they were selling to larger enterprises, and weren’t even yet selling to existing customers yet. This quarter they made it clear that I had been correct in adding, as revenue was up 57%, gross margin was 90%, strong demand for their products, etc.
Here’s a couple of example of their enthusiasm:
“Customers tell us they love Monday sales CRM as it’s more customizable and easier to use than any traditional CRM tools. As we begin to slowly roll out monday CRM to our existing customers, we remain focused on adding more powerful features and functionality to make it the best CRM in the industry.”
Sales CRM total accounts
1st Q - 187 + 187
2nd Q - 532 + 345
3rd Q - 1366 + 834
4th Q - 2458 +1092
S&M was 54% of revenue, down from 79%. We had a lower S&M spend due to the fact that it cost us less to acquire customers. It can be because of some of the the competitors have pulled back. And we believe this is an opportunity for us actually to take market share and to grab land. We see that we can get the same ad placements for a lot lower cost. So that’s essentially what we mean when we say less competition. We are able to be in first place while paying way less. And we get a lot more customers in because of that. Also, this year, we’re going to expand our marketing channels, a more B2B enterprise focused marketing.
Market reaction - They had closed the Friday before at $131. They then announced on Monday morning, and by Tues they closed at $164, and on Weds at $170. They are now about $155, up 18% since announcing results, and up 27% ytd (in two months).
My reaction – What an entirely different story than all the caution we were hearing everywhere else! They see opportunity and are going for it full speed. I kept adding and by now Monday is in 2nd place in my portfolio at 18.4%.
Perspective – Monday’s current share price of $154.70 is about 34%, of the November 2021 high share price of about $450.
The current trailing revenue of $519 million is about twice the trailing revenue of $263 million back then.
That means that you are getting 5.75 times, almost six times, the amount of revenue per dollar of stock price that you were getting back then.
And they are now profitable and very cash flow positive, as well.
And just by the way, on Friday, Goldman Sachs just named Monday as one of their seven top choices for 2023 for bullish clients (Crowdstrike was another of the seven).