Project Management Software Developer Monday .com (NASDAQ:MNDY (NASDAQ:)) reported fourth-quarter fiscal 2023 results that beat analysts’ expectations, with revenue up 35.1% year over year to $202.6 million. The company expects next-quarter revenue to be about $209 million, in line with analyst estimates. Non-GAAP earnings were $0.65 per share, improving from a loss of $0.03 per share in the same quarter last year.
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Monday.com (MNDY) FY 2023 Q4 Highlights:
- Income: $202.6 million vs. analyst estimates of $197.8 million (up 2.4%)
- earnings per share (non-GAAP): $0.65 vs. analysts’ estimates of $0.32 (100% overshoot)
- Revenue forecast for 1Q 2024 is $209 million at the midpoint, roughly in line with analysts’ expectations.
- Management income guide for upcoming financial 2024 at $929 million at the midpoint, in line with analyst expectations and implying growth of 27.3% (vs. 41.2% in fiscal 2023)
- Management adjusted operating profit forecast for upcoming financial 2024 at $61 million at the midpoint, below analysts’ expectations of $68 million.
- Free Cash Flow $55.44 million, down 14.6% from the previous quarter.
- Net income retention rate: 115% compared to 110% in the previous quarter
- Clients: 2,295 clients paying over $50,000 per year
- Gross Profit (GAAP): 88.9%, which corresponds to the same quarter last year.
- Market capitalization: $11.39 billion
“We ended 2023 with strong fourth quarter results, demonstrating our ability to deliver sustainable growth and profitability while continuing to scale,” said Eliran Glaser, CFO of monday.com.
Founded in Israel in 2014 and named after the dreaded first day of the workweek, Monday.com (NASDAQ:MNDY) creates software as a services platform to help teams plan and track work effectively.
Project Management SoftwareThe future of work requires teams to collaborate across departments and remote offices. Project management software both facilitates and benefits from these changes. While the trend for collaborative work management has been strong for some time, the Covid pandemic has definitively increased the demand for tools that enable work to be done remotely.
Sales Growth As you can see below, Monday.com’s revenue growth has been exceptional over the past two years, from $95.55 million in the fourth quarter of fiscal 2021 to $202.6 million this quarter.
Unsurprisingly, it was another great quarter for Monday.com, with revenue up 35.1% year over year. On a quarterly basis, the company’s revenue grew $13.38 million in the fourth quarter, roughly in line with its third-quarter 2023 growth. This robust growth shows that the company can maintain a strong growth trajectory.
For the next quarter, Monday.com expects revenue to grow 28.8% year over year to $209 million, slowing from the 49.5% year over year growth recorded in the same quarter last year. For the upcoming fiscal year, management expects revenue to be $929 million at midyear, up 27.3% year over year compared with 40.6% growth in fiscal 2023.
Growth in Large Customers Monday.com reported 2,295 enterprise customers paying more than $50,000 annually this quarter, up 218 from the previous quarter. This is slightly higher contract wins than last quarter and slightly higher than what we have typically seen in past quarters, demonstrating good sales momentum for the business. We have no doubt that shareholders will take this as a sign that the company’s go-to-market strategy is working very well.
Key Takeaways from Monday.com’s Fourth Quarter Results We were impressed by Monday.com’s net revenue retention growth this quarter. We were also pleased that the company’s revenue beat Wall Street estimates. On the other hand, revenue guidance for next year suggests a significant slowdown in demand, and operating profit guidance for the same period was below expectations. Zooming out, we think the quarter continued to be mixed as guidance sent shares lower. The market was likely expecting more, and the stock fell 7% after going public to trade at $220 per share.