Why I invested in Monday!

Why I invested in Monday!

Let’s forget about comparing its metrics to Asana as it seems to make Asana investors nervous and crotchety (perhaps because Monday is better in almost every metric but sheer size, where they are just one reporting quarter behind). I will just give Monday’s metrics.

Let’s start with Revenue by quarters:

**2019:	13	17	21	27**
**2020:	32	36	43	50**
**2021:	59	71** 

As you can see they more than quadrupled their revenue from two years ago, in each of the last two quarters.

Last quarter they were up 94%, which was an acceleration from 84% the quarter before. In 2020 they were up by 146%, 115%, 105%, and 85%, and their annual revenue growth was 106%. Clearly this is a rapid grower.

Sequentially their revenue grew quarter over quarter by 13%, 19%, 16%, 18%, and then 20% in the most recent quarter.

As far as their enterprise customers, which they define as customers over $50K (the same metric that is used by Asana), they have been growing at an amazing rate:

**2019:	  9	 23	 46	 76**
**2020:	105	144	185	264**
**2021:	335	470** 

They grew the number this quarter from 144 to 470, up 226% (more than tripling), which was no fluke, as they grew last quarter by 219%, and the quarter before by 247%, etc, (more than tripling each quarter) so larger accounts are signing up like mad. Their sequential growth was an astounding 40%, and 27% the quarter before, and 43% the quarter before that. Also no fluke.

Adjusted gross margin was 89.7%, up slightly from 89% sequentially, and from 88.35 yoy.

Their NRR for customers with over 10 employees was 125%, up from 121% sequentially

Adj Op Margin went from -41% to -14% so they are closing in on break even

Op Cash Flow went from -13.9% to -0.4%

Free Cash Flow went from -15.0% to -1.5%

Cash was $878 million

Excerpts from the earings report and Conference Call:

What their platform is: A work operating system (Work OS) where organizations of any size can create the tools and processes they need to manage every aspect of their work…

We delivered strong results in our first quarter as a public company, as strong execution and expanding adoption of Work OS drove total revenue growth of 94%. We are pleased with our momentum with continued high growth at scale,” said co-founder and co-CEO, Roy Mann.

Work OS is the leader in the low-code no-code market, and our business is accelerating as we continue to expand platform usage into use cases such as operations, project management, CRM, finance, marketing, HR, and IT,” said founder and co-CEO, Eran Zinman.

Rapid growth in the second quarter was driven by large expansions within our existing base and strong growth upmarket as we continue to see momentum in enterprise. 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.

Recent Business Highlights:

• In enterprise we are focusing on security control features and governance. And that’s enabling us to get into larger customers.

• Announced workdocs, a completely new capability for Work OS, which enables organizations to take document collaboration to new levels. Documents are the starting point for work and workdocs is a completely new style of connected documents that are built to support collaboration, with live objects that update in real time whenever their source of data changes. The introduction of workdocs provides our customers with new ways to create no-code, low-code software and expand how we are adopted across organizations of all sizes.

Launch of the free tier of monday.com, limited to two users. The free offering is designed to increase our market opportunity by driving awareness and broader adoption among a new set of audiences.

• New strategic alliances with systems integrators, including Hitachi Solutions and NTT-Data, across key industries such as manufacturing and real estate.

Continued international expansion with new channel partners, customer deals, and increasing our ARR. Added Polish as a new supported language, increasing our total languages supported to 14 languages.

Saul here: with that kind of growth and execution I couldn’t resist and took what is now an 8.2% position. I felt that this is exactly what we are looking for in a new company.

I hope that this helps.


Links to the Knowledgebase for this board is in the Announcements panel that is on the right side of every page on this board. (It’s in three parts)

For some additions to the Knowledgebase, bringing it up to date, I’d advise reading several other posts linked to on the panel, especially “How I Pick a Company to Invest In,” and “Why My Investing Criteria Have Changed,” and “Why It Really is Different.”


As this is my first ever post, I hope it is within the scope of this board. I have been reading this board last 6-9 months and have come to realise the strength of its logic and reasoning. Unfortunately I held onto zoom, etsy etc whilst Saul screamed to sell…you live and learn! However, my recollection is Saul screamed to sell zoom as its forward guidance was pathetic even when it was blowing away all current expectations (not to mention etsy about to go over niagara falls). So it confuses me the current exuberance on Monday when its forward guidance is for about 6% Q3 (75M at top end of guide) and ONLY 3% for Q4 (about 77.4 at top end of guide). Even if they have a sizeable beat of 6-8% (as yet unproven??) then it still represents a HUGE slowdown for them and I would have thought all existing ‘Saul-type’ investors would be running for the exits, but it’s exactly the opposite…can someone please explain to me why it is different with Monday.com??? Massive sand-bagging??? I think discogator asked this exact question on Asana (with apparently similarly low guidance), but I did not see anyone reply to it. Sorry if this is deemed an ignorant question.


Hi Jimmy Boy, I didn’t, and usually don’t, pay any attention to guidance. If you read the section in the KnowledgeBase you will understand why, but briefly, companies nowadays ALWAYS underestimate so they won’t get any of those “missed expectations” headlines. In fact I’m pretty sure that I didn’t even read their guidance.

What I paid attention to was the following quotes from management (which I quoted in my write-up):

and our business is accelerating
we continue to expand platform usage into use cases such as
large expansions within our existing base and strong growth upmarket
we continue to see momentum in enterprise
we are still in the very early stages of our growth as a company
suggests a strong second half of the year
Announced workdocs, a completely new capability for Work OS,
continued international expansion
and they accelerated revenue growth
and increased enterprise customers by 40% sequentially.

Did you detect the slightest inkling of a significant slowdown?

If you go back and reread the Etsy going over Niagra Falls, and Zooms slowdown, in both cases I doubt I had quoted guidance in any way. I just calculated what was going to happen from what was happening and what the comparisons would be. I don’t pay any attention to guidance in almost all cases.

If you think that a company that last quarter increased their enterprise an astounding 40% SEQUENTIALLY, is suddenly going to slow down significantly this quarter, with 40% more enterprise customers contributing to revenue, I wonder what you’ve been smoking.




Why I plan to invest in Monday.com Monday morning:

First off thank you Saul for writing up this Company here, explaining you reasons.

I too have been looking into Monday for the last couple weeks. Thanks CloudL. And I have to say that I was also very impressed with their first ever Quarterly Conference Call. In it were many explaination for why this company says their Total Addressable Market is so huge.

My favorite in the Q2 CC and after reading analysis here and on elsewhere why Ill be taking that money I have from selling Docusign after their Q CC and buying roughly a 4% position.

This is a Low-Code/No-Code automation company. They have an Automation App Marketplace and this is their second largest revenue generating vertical after Project Management. Monday.com is truly a WorkOS able to integrate into it: Asana, Salesforce, and other Collaboration workflow solutions!!!

That is perhaps why the Management doesn’t see any competition, ‘not really’.




I should be more clear. I’m not any kind of authority on any kind of technology. The prior post is my personal rationale for buying a small position in Monday.

Also, when I wrote, They have an Automation App Marketplace and this is their second largest revenue generating vertical after Project Management.

I was referring to two different subjects. The App Market place is where Monday’s partners, working together with engineers at Monday, are selling Apps to automate workflow processes for larger enterprises. My reference to revenue generating verticals is from the Q2 Conference Call.

what are the most popular two or three use cases outside of core project management in terms of where you guys are seeing the most traction. I know there’s a lot of different fronts that you guys compete and offer, but if you had the top two or three that would be helpful.
Roy Mann, Co-CEO
Yes, so that’s great. I would say one more that is CRM for smaller use cases up to midsize use cases, we see that as a big trend for us. And also we have a lot of customers that build their own use case. So, they manage – we have customers from over 190 different business verticals. So, they do – they run manufacturing plants, some manage clinical prior research, run production.
So, it’s not project management as much as they run their own processes and they build their own tools to run those processes. So, whatever that might be. And that’s more in the workflow process management kind of space.

I actually interpret this as meaning that Monday’s largest revenue generator is from ‘workflow process management kind of space.’

Earlier in the same call,
Eric Zinman, Co-CEO
Eran Zinman
Thanks DJ. It is Eran. It’s a great question. Overall main account is a Work OS. So, essentially there’s a lot of things that could build within monday, but one of the key things that were super important for us being a Work OS is to integrate really well with other tools. So, essentially our goal is not to replace all tools within the organization, but to be a place where people can build stuff and manage a lot of the core functionality within monday.
But any app that an organization already uses can be integrated into monday. Data can be presented within Monday, you can change things and data can be synced back into a third-party application. So, essentially it our philosophy is to work well with everybody.
We are not trying to replace everything within an organization, so I don’t think it is a point of consolidation. But very likely positioned in a way that we’re kind of the work customization, the backbone that connects everything within an organization, if it makes sense.

So, hopefully this makes more clear why I said, This is a Low-Code/No-Code automation company.




This one is very interesting to me as, from what I understand, they claim to not be direct competitors to Asana and Atlassian since this is marketed as a “Work OS”. I am a big fan of workplace/project management software and have used Atlassian products in the past.

My only question for the board regarding MNDY is if there’s any concerns about the current valuation? This has nearly doubled in the past 3 months, and even if they continue with 20% sequential quarterly growth, a ~$300M annual sales would put them in the high 50’s P/S, and that’s if the share price goes nowhere for the next 6 months. This reminds me a bit of when SNOW was all the hype, I chose to not take a position as I felt the price had gotten way ahead of the growth, and to be honest I’m glad I chose to sit that one out. I will admit that I don’t feel MNDY is nearly as overvalued currently as SNOW was, but it still makes me nervous. Compare this with UPST, which I did take a position in after reading Saul’s comments; almost the same market cap (~$18B), similar growth rates, however UPST has double the sales and even after running up nearly 100% since July, it’s sitting at a P/S of around 40.


My only question for the board regarding MNDY is if there’s any concerns about the current valuation?.. Compare MNDY with UPST…

Hi invain, I’ll take a stab at a guess about the valuation difference between Upstart and Monday. Upstart, for all its wonderfulness, isn’t a SaaS company. It’s therefore much more at the whim of economy and world event shocks. If you think back to the Covid quarter a year ago, Upstart’s revenue dropped sequentially from $64 million to $17 million. Granted it came back the next quarter to $65 million, and $87 million in the quarter after, but you can see what I am talking about. It was able to drop almost three quarters of its revenue in one quarter.

Monday, on the other hand, like most of our SaaS companies, hardly blinked. Its revenue rose from $32 million to $36 million in that same quarter, and it also increased its customers over $50K sequentially from 105 to 144 in that same quarter, the number rising 37% sequentially. You can see why the market awards Monday a higher multiple. SaaS is a wonderful thing!:grinning:




Thanks so much Saul for this writeup. I jumped on the Monday train with a starter position right after they posted earnings, and I’ve been very happy so far! Your analysis is really helpful for putting together the whole picture.

One question I have is whether the fact that they are headquartered in Israel has any impact on your investment thesis. I know you mostly stick to American companies, though you do dip your toes into non-US companies on occasion (Shopify, Elastic, for example). I remember years ago Wix was discussed frequently on the board and the question of being headquartered in Israel did come up several times. I’m just wondering if this is something you take into consideration, or is it irrelevant to you?


I am an user and not an investor in the company. I will be participating in their online product conference. I will post a reply after the conference. In the meantime if anyone is interested here’s the agenda and conference registration