In a remarkable turn of events, monday.com Ltd. (NASDAQ: MNDY) saw its stock price soar by 11.55% to $251.77 during the Monday trading session at 02:35 PM EDT. This surge came on the heels of a robust second-quarter earnings report that highlighted significant financial and operational achievements for the multi-product platform.
A Record-Breaking Quarter: Financial Highlights
Monday.com’s second-quarter results for the fiscal year 2024 were nothing short of impressive, marking a strong performance in several key areas:
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- Revenue Growth: The company reported a revenue of $236.1 million, representing a 34% increase compared to the same period last year. This growth reflects the company’s effective market strategy and expanding customer base.
- Profitability Milestone: For the first time, monday.com achieved GAAP operating profitability, with a GAAP operating income of $1.8 million. This is a notable turnaround from a loss of $12.2 million in Q2 2023. The GAAP operating margin improved to 1%, compared to a negative 7% in the previous year.
- Enhanced Non-GAAP Metrics: Non-GAAP operating income surged to $38.4 million, up from $16.6 million in the prior year. The non-GAAP operating margin also improved significantly to 16%, compared to 9% in Q2 2023.
- Earnings Per Share: The company reported GAAP basic and diluted net income per share of $0.29 and $0.27, respectively, reversing a loss per share of $0.15 from the previous year. Non-GAAP earnings also saw a rise, with basic and diluted net income per share reaching $0.99 and $0.94, respectively.
- Cash Flow: Net cash provided by operating activities was $55.8 million, with $50.8 million in free cash flow, surpassing last year’s figures of $47.6 million and $45.9 million, respectively.
Expanding Market Reach: Business Highlights
Monday.com’s growth is not just reflected in its financials but also in its expanding market presence:
- Net Dollar Retention: The company achieved a net dollar retention rate of 110%, with higher retention rates of 114% for customers with more than 10 users, $50,000 in annual recurring revenue (ARR), and $100,000 in ARR.
- Customer Growth: The number of paid customers with more than 10 users rose to 57,203, a 15% increase from 49,936 a year ago. The count of customers with more than $50,000 in ARR grew by 43%, reaching 2,713, and those with more than $100,000 in ARR increased by 49%, totaling 1,009.
- Record Deal: Monday.com closed its largest deal ever with a multinational healthcare company, expanding its largest seat count to an impressive 80,000 seats.
Financial Outlook: Expectations for the Coming Quarters
Looking ahead, monday.com has provided optimistic guidance for the remainder of the year:
- Q3 2024: The company expects revenue between $243 million and $247 million, marking a year-over-year growth of 28% to 31%. Non-GAAP operating income is projected to be between $19 million and $23 million, with an operating margin of 8% to 9%. Free cash flow is anticipated to range from $70 million to $74 million, representing a free cash flow margin of 29% to 30%.
- Full Year 2024: For the full year, monday.com forecasts total revenue of $956 million to $961 million, reflecting a year-over-year growth of 31% to 32%. Non-GAAP operating income is expected to be between $100 million and $105 million, with an operating margin of 10% to 11%. Free cash flow is projected to be between $270 million and $275 million, with a free cash flow margin of 28% to 29%.
Performance Comparison: monday.com vs. S&P 500
Monday.com’s stock performance this year has been impressive, with a Year-to-Date (YTD) gain of 33.28%. This growth significantly outpaces the S&P 500’s YTD performance of 11.93%, highlighting monday.com’s strong market position and investor confidence.
Summary
Monday.com’s latest financial results and business achievements underscore its position as a leading player in the multi-product platform space. The company’s strong revenue growth, operational profitability, and expanding customer base reflect a well-executed strategy and robust market demand. With positive guidance for the upcoming quarters, monday.com continues to attract investor interest, evidenced by the recent surge in its stock price.
