Second quarter revenue of $123.7 million grew
75% year over year
Number of Customers with more than $50k ARR
grew 147% year over year
Number of paying accounts from new monday Work
OS products surpassed 1,000
monday.com (NASDAQ: MNDY), 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, today
reported financial results for its second quarter ended June 30,
2022.
Management Commentary:
“We continue to deliver strong top line growth with revenue
growing 75% in the second quarter,” said monday.com founder and
co-CEO, Roy Mann. “Our move upmarket continues at an astonishing
rate, growing our enterprise customer base to more than 1,000
customers this quarter, while maintaining our best in industry net
dollar retention rates.”
“As we announced last quarter, we’re evolving into a product
suite offering as part of our larger strategy, and we have been
impressed by early new customer demand for our products,” said
monday.com founder and co-CEO, Eran Zinman. “We are committed to
being best-in-class in every one of our products’ categories, and
we know we can achieve that with the Work OS.”
“We were pleased with our improving operating margins in the
second quarter and are committed to improving efficiency,” said
Eliran Glazer, monday.com CFO. “Our strategic focus remains in
balancing healthy investment in the business with improving
efficiency and profitability.”
Second Quarter Fiscal 2022 Financial
Highlights:
- Revenue was $123.7 million, an increase of 75%
year-over-year.
- GAAP operating loss was $46.2 million compared to a loss of
$27.5 million in the second quarter of 2021; GAAP operating margin
was negative 37% compared to negative 39% in the second quarter of
2021.
- Non-GAAP operating loss was $15.4 million compared to a loss of
$9.9 million in the second quarter of 2021; non-GAAP operating
margin was negative 12% compared to negative 14% in the second
quarter of 2021.
- GAAP net loss per basic and diluted share was $1.01 compared to
GAAP net loss per basic and diluted share of $1.67 in the second
quarter of 2021; non-GAAP net loss per basic and diluted share was
$0.33 compared to non-GAAP net loss per basic and diluted share of
$0.26 in the second quarter of 2021.
- Net cash used in operating activities was $14.1 million, with
negative $19.3 million of adjusted free cash flow compared to net
cash used in operating activities of $0.4 million and negative $1.5
million of adjusted free cash flow in the second quarter of
2021.
Recent Business
Highlights:
- Net dollar retention rate was over 125%.
- Net dollar retention rate for customers with more than 10 users
was over 135%.
- Net dollar retention rate for customers with more than $50,000
in annual recurring revenue (“ARR”) was over 150%.
- The number of paid customers with more than $50,000 in ARR was
1,160, up 147% from 470 as of June 30, 2021.
- Adoption of new monday Work OS products, including monday sales
CRM, monday marketer, monday dev and monday projects, surpassed
1,000 paying accounts within the first two months of products’
release.
- Notable new customer wins or expansions during the quarter
included Renault, Savills, Jellysmack, Safras & Cifras and
BKP.
Financial Outlook:
For the third quarter of the fiscal year 2022, monday.com
currently expects:
- Total revenue of $130 million to $131 million, representing
year-over-year growth of 57% to 58%.
- Non-GAAP operating loss of $25 million to $24 million and
negative operating margin of 19% to 18%.
For the full year 2022, monday.com now expects:
- Total revenue of $498 million to $502 million, representing
year-over-year growth of 62% to 63%.
- Non-GAAP operating loss of $112 million to $108 million and
negative operating margin of 22% to 21%.
With the recent strengthening of the US dollar, we now expect FX
to negatively impact our full year revenue growth estimates by
approximately 300 basis points.
Given the concerns about the macro economy and the market, we
have provided prudent yet achievable forward-looking guidance. It
should be noted that we did see some softness in demand in Europe
at the end of Q2. And while one month is not enough data to
extrapolate a larger trend, we are closely monitoring the demand
environment across all areas of our business and will be
transparent with our investors about our expectations.
Non-GAAP Financial
Measures:
This press release and the accompanying tables contain the
following non-GAAP financial measures: non-GAAP gross profit,
non-GAAP gross margin, non-GAAP sales and marketing expenses,
non-GAAP research and development expenses, non-GAAP general and
administrative expenses, non-GAAP operating loss, non-GAAP
operating margin, non-GAAP net loss, non-GAAP net loss per share
and adjusted free cash flow. Certain of these non-GAAP financial
measures exclude share-based compensation.
monday.com believes that these non-GAAP financial measures
provide useful information to management and investors regarding
certain financial and business trends relating to monday.com’s
financial condition and results of operations. monday.com
management uses these non-GAAP measures to compare monday.com
performance to that of prior periods, for trend analysis and for
budgeting and planning purposes. monday.com believes that the use
of these non-GAAP financial measures provides an additional tool
for investors to use in evaluating ongoing operating results and
trends and in comparing monday.com financial results to the results
of other software companies, many of which present similar non-GAAP
financial measures to investors. The non-GAAP financial information
is presented for supplemental informational purposes only, and
should not be considered a substitute for financial information
presented in accordance with GAAP, and may be different from
similarly-titled non-GAAP measures used by other companies.
Management does not consider these non-GAAP measures in
isolation or as an alternative to financial measures determined in
accordance with GAAP. The principal limitation of these non-GAAP
financial measures is that they exclude significant expenses and
income that are required by GAAP to be recorded in monday.com
financial statements. In addition, they are subject to inherent
limitations as they reflect the exercise of judgment by management
about which expenses and income are excluded or included in
determining these non-GAAP financial measures.
Reconciliation tables of the most directly comparable GAAP
financial measures to the non-GAAP financial measures used in this
press release are included with the financial tables at the end of
this release. monday.com urges investors to review these
reconciliation tables and not to rely on any single financial
measure to evaluate the monday.com business. Management is not able
to forecast GAAP net loss attributable to ordinary shareholders on
a forward-looking basis without unreasonable efforts due to the
high variability and difficulty in predicting share-based
compensation expense, the amounts of which may be significant in
future periods.
Definitions of Business Key Performance
Indicators
Net Dollar Retention Rate
We calculate Net Dollar Retention Rate as of a period end by
starting with the ARR from customers as of the 12 months prior to
such period end (“Prior Period ARR”). We then calculate the ARR
from these customers as of the current period end (“Current Period
ARR”). The calculation of Current Period ARR includes any upsells,
contraction and attrition. We then divide the total Current Period
ARR by the total Prior Period ARR to arrive at the net dollar
expansion rate. For the trailing 12-month calculation, we take a
weighted average of this calculation of our quarterly Net Dollar
Retention Rate for the four quarters ending with the most recent
quarter.
Annual Recurring Revenue (“ARR”)
Is defined to mean, as of the measurement date, the annualized
value of our customer subscriptions plan assuming that any contract
that expires during the next 12 months is renewed on its existing
terms.
Forward-Looking
Statements:
This press release contains “forward-looking statements” within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, including but not limited
to, statements regarding our financial outlook and market
positioning. These forward-looking statements are made as of the
date they were first issued and were based on current expectations,
estimates, forecasts and projections as well as the beliefs and
assumptions of management. Words such as “outlook,” “guidance,”
“expect,” “anticipate,” “should,” “believe,” “hope,” “target,”
“project,” “plan,” “goals,” “estimate,” “potential,” “predict,”
“may,” “will,” “might,” “could,” “intend,” “shall” and variations
of these terms or the negative of these terms and similar
expressions are intended to identify these forward-looking
statements. Forward-looking statements are subject to a number of
risks and uncertainties, many of which involve factors or
circumstances that are beyond monday.com control. monday.com’s
actual results could differ materially from those stated or implied
in forward-looking statements due to a number of factors, including
but not limited to our ability to predict our revenue and evaluate
our business and future prospects; our ability to manage our growth
effectively, execute our business plan or maintain high levels of
service and customer satisfaction; our ability to achieve and
maintain profitability and compete effectively with established
companies and new market entrants in a competitive and rapidly
changing market; interruptions or performance problems associated
with the technology or infrastructure underlying our platform; real
or perceived errors, failures, vulnerabilities, or bugs in our Work
OS; our ability to attract customers, grow our retention rates,
expand usage within organizations and sell subscription plans; our
ability to offer high-quality customer support; our ability to
effectively develop and expand our direct sales capabilities; our
ability to enhance our reputation and market awareness of our Work
OS and products; actions by governments to restrict access to our
platform in their countries; our ability to identify and integrate
future acquisitions, strategic investments, partnerships or
alliances; our ability to attract and retain highly skilled
employees; our ability to raise additional capital or generate cash
flows necessary to expand our operations and invest in new
technology; the market and software categories in which we
participate; our ability to ensure that our Work OS and products
interoperate with a variety of software applications that are
developed by third parties; the success of our strategic
relationships with third parties; privacy, data and cybersecurity
incidents or any actual or perceived failure by monday.com to
comply with privacy, data protection, information security,
consumer privacy, data residency, or telecommunications laws,
regulations, government access requests, and obligations;
intellectual property disputes; changes in foreign exchange rates;
general political or destabilizing events, including war, conflict
or acts of terrorism and other factors described in “Risk Factors”
in our Annual Report on Form 20-F for the year ended December 31,
2021, filed with the SEC on March 16, 2022. Further information on
potential risks that could affect actual results will be included
in the subsequent filings that monday.com makes with the Securities
and Exchange Commission from time to time.
Past performance is not necessarily indicative of future
results. The forward-looking statements included in this press
release represent monday.com’s views as of the date of this press
release. monday.com anticipates that subsequent events and
developments will cause its views to change. monday.com undertakes
no intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise. These forward-looking statements should not be relied
upon as representing monday.com’s views as of any date subsequent
to the date of this press release.
Earnings Webcast:
monday.com will hold a public webcast at 8:30 a.m. ET today to
discuss the results for its second quarter 2022 and financial
outlook. The live call may also be accessed via telephone at (855)
979-6654 or (outside the U.S.). Please reference conference ID:
638330. An archived webcast can be accessed from the News &
Events section of monday.com’s Investor Relations website following
the call.
Investor Presentation
Details:
An investor presentation providing additional information can be
found at http://ir.monday.com.
About monday.com:
The monday.com Work OS is an open platform that democratizes the
power of software so organizations can easily build work management
tools and software applications to fit their every need. The
platform intuitively connects people to processes and systems,
empowering teams to excel in every aspect of their work while
creating an environment of transparency in business. monday.com has
teams in Tel Aviv, New York, San Francisco, Miami, Chicago, London,
Sydney, Tokyo and Sao Paulo. The platform is fully customizable to
suit any business vertical and is currently used by over 152,000
customers across over 200 industries in 200 countries.
Visit us on our LinkedIn, Twitter, Instagram and Facebook .
For more information about monday.com please visit our Press
Room.
MONDAY.COM LTD
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(U.S. dollars in thousands, except
share and per share data)
Three months ended
June 30,
Six months ended
June 30,
2022
2021
2022
2021
(unaudited)
(unaudited)
Revenue
$
123,718
$
70,615
$
232,215
$
129,587
Cost of revenue
16,730
9,108
31,339
17,032
Gross profit
106,988
61,507
200,876
112,555
Operating expenses:
Research and development
33,962
16,271
60,503
31,852
Sales and marketing
96,740
61,057
212,713
124,105
General and administrative
22,466
11,648
41,336
21,914
Total operating expenses
153,168
88,976
314,552
177,871
Operating loss
(46,180
)
(27,469
)
(113,676
)
(65,316
)
Financial income (expense), net
2,452
(359
)
4,445
(765
)
Loss before income taxes
(43,728
)
(27,828
)
(109,231
)
(66,081
)
Income tax expense
(1,943
)
(1,063
)
(3,118
)
(1,762
)
Net loss
$
(45,671
)
$
(28,891
)
$
(112,349
)
$
(67,843
)
Deemed dividend to preferred
shareholders
-
(3,589
)
-
(8,203
)
Net loss attributable to ordinary
shareholders
$
(45,671
)
$
(32,480
)
$
(112,349
)
$
(76,046
)
Net loss per share attributable to
ordinary shareholders’, basic and diluted
$
(1.01
)
$
(1.67
)
$
(2.50
)
$
(4.78
)
Weighted-average ordinary shares used in
calculating net loss per ordinary share, basic and diluted
45,074,912
19,417,672
45,027,168
15,924,392
MONDAY.COM LTD
CONDENSED CONSOLIDATED BALANCE
SHEETS
(U.S. dollars in
thousands)
June 30,
December 31,
2022
2021
ASSETS
(unaudited)
(audited)
CURRENT ASSETS:
Cash and cash equivalents
$
834,620
$
886,812
Accounts receivable, net
9,510
8,509
Prepaid expenses and other current
assets
24,314
18,172
Total current assets
868,444
913,493
LONG TERM-ASSETS:
Property and equipment, net
26,694
19,599
Operating lease right-of-use assets
64,456
-
Other long-term assets
100
100
Total long-term assets
91,250
19,699
Total assets
$
959,694
$
933,192
LIABILITIES AND SHAREHOLDERS' (DEFICIT)
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
10,917
$
23,612
Accrued expenses and other current
liabilities
68,238
70,135
Deferred revenue
177,882
134,438
Operating lease liabilities, current
10,885
-
Total current liabilities
267,922
228,185
LONG-TERM LIABILITIES
Operating lease liabilities,
non-current
47,703
-
Other non-current liabilities
2,039
1,612
Total long-term liabilities
49,742
1,612
Total liabilities
317,664
229,797
SHAREHOLDERS' EQUITY:
Other comprehensive income
(6,749
)
594
Share capital and additional paid-in
capital
1,206,788
1,148,461
Accumulated deficit
(558,009
)
(445,660
)
Total shareholders’ equity
642,030
703,395
Total liabilities and shareholders’
equity
$
959,694
$
933,192
MONDAY.COM LTD
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(U.S. dollars in
thousands)
Three months ended
Six months ended
June 30,
June 30,
2022
2021
2022
2021
(unaudited)
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(45,671
)
$
(28,891
)
$
(112,349
)
$
(67,843
)
Adjustments to
reconcile net loss to net cash used in operating
activities:
Depreciation and amortization
1,397
527
2,524
1,074
Capital loss from sale of property and
equipment
-
2
-
47
Share-based compensation
30,822
17,558
54,488
32,098
Change in accrued interest on revolving
credit facility
-
(2
)
-
19
Changes in operating
assets and liabilities:
Accounts receivable, net
384
533
(1,001
)
(453
)
Prepaid expenses and other assets
(7,995
)
(429
)
(3,295
)
(2,058
)
Accounts payable
(6,448
)
(4,972
)
(12,624
)
(1,003
)
Accrued expenses and other liabilities,
net
(3,502
)
1,099
1,840
5,961
Deferred revenue
16,952
14,220
43,444
31,204
Net cash used in operating activities
(14,061
)
(355
)
(26,973
)
(954
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment
(4,550
)
(1,358
)
(6,904
)
(5,581
)
Capitalized software development costs
(684
)
(718
)
(1,610
)
(1,158
)
Proceeds from sale of property and
equipment
-
-
-
21
Changes in short-term deposits
-
(51
)
-
(51
)
Net cash used in investing activities
(5,234
)
(2,127
)
(8,514
)
(6,769
MONDAY.COM LTD
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Cont.)
(U.S. dollars in
thousands)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from initial public offering and
concurrent private placement, net of underwriting discounts and
other issuance costs
-
736,227
-
736,020
Proceeds from exercise of share options
and employee share purchase plan
3,354
1,300
4,705
1,843
Receipt of tax advance relating to
exercises of share options
1,017
6,023
(21,367
)
6,023
Capital lease payments
(32
)
(21
)
(43
)
(49
)
Net cash provided by (used in) financing
activities
4,339
743,529
(16,705
)
743,837
INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
(14,956
)
741,047
(52,192
)
736,114
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
- Beginning of period
849,576
126,881
886,812
131,814
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
- End of period
$
834,620
$
867,928
$
834,620
$
867,928
RECONCILIATION OF CASH, CASH EQUIVALENTS
AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEET:
Cash and cash equivalents
$
834,620
$
865,328
$
834,620
$
865,328
Restricted cash – Included in prepaid
expense and other current assets
-
600
-
600
Restricted cash – Included in other
long-term assets
-
2,000
-
2,000
Total cash, cash equivalents, and
restricted cash
$
834,620
$
867,928
$
834,620
$
867,928
MONDAY.COM LTD
Reconciliation of GAAP to
Non-GAAP Financial Information
(U.S. dollars in
thousands)
Three months ended
June 30,
Six months ended
June 30,
2022
2021
2022
2021
(unaudited)
(unaudited)
Reconciliation of
gross profit and gross margin
GAAP gross profit
$
106,988
$
61,507
$
200,876
$
112,555
Share-based compensation
2,915
1,833
5,356
3,364
Non-GAAP gross profit
$
109,903
$
63,340
$
206,232
$
115,919
GAAP gross margin
86
%
87
%
87
%
87
%
Non-GAAP gross margin
89
%
90
%
89
%
89
%
Reconciliation of
operating expenses
GAAP research and development
$
33,962
$
16,271
$
60,503
$
31,852
Share-based compensation
(9,999
)
(5,068
)
(17,387
)
(9,605
)
Non-GAAP research and
development
$
23,963
$
11,203
$
43,116
$
22,247
GAAP sales and marketing
$
96,740
$
61,057
$
212,713
$
124,105
Share-based compensation
(10,075
)
(5,536
)
(17,453
)
(9,570
)
Non-GAAP sales and marketing
$
86,665
$
55,521
$
195,260
$
114,535
GAAP general and administrative
$
22,466
$
11,648
$
41,336
$
21,914
Share-based compensation
(7,833
)
(5,121
)
(14,292
)
(9,559
)
Non-GAAP general and
administrative
$
14,633
$
6,527
$
27,044
$
12,355
Reconciliation of
operating loss
GAAP operating loss
$
(46,180
)
$
(27,469
)
$
(113,676
)
$
(65,316
)
Share-based compensation
30,822
17,558
54,488
32,098
Non-GAAP operating loss
$
(15,358
)
$
(9,911
)
$
(59,188
)
$
(33,218
)
GAAP operating margin
(37
%)
(39
%)
(49
%)
(50
%)
Non-GAAP operating margin
(12
%)
(14
%)
(25
%)
(26
%)
MONDAY.COM LTD
Reconciliation of GAAP to
Non-GAAP Financial Information (Cont.)
(U.S. dollars in thousands,
except share and per share data)
Reconciliation of
net loss
GAAP net loss
$
(45,671
)
$
(28,891
)
$
(112,349
)
$
(67,843
)
Share-based compensation
30,822
17,558
54,488
32,098
Tax benefit related to share-based
compensation(1)
(68
)
-
(295
)
-
Non-GAAP net loss
$
(14,917
)
$
(11,333
)
$
(58,156
)
$
(35,745
)
Reconciliation of
net loss attributable to ordinary shareholders
GAAP net loss attributable to ordinary
shareholders
$
(45,671
)
$
(32,480
)
$
(112,349
)
$
(76,046
)
Deemed dividend to preferred
shareholders
-
3,589
-
8,203
Share-based compensation
30,822
17,558
54,488
32,098
Tax benefit related to share-based
compensation(1)
(68
)
-
(295
)
-
Non-GAAP net loss
$
(14,917
)
$
(11,333
)
$
(58,156
)
$
(35,745
)
GAAP net loss per share attributable to
ordinary shareholders’, basic and diluted
$
(1.01
)
$
(1.67
)
$
(2.50
)
$
(4.78
)
Non-GAAP net loss per share, basic and
diluted
$
(0.33
)
$
(0.26
)
$
(1.29
)
$
(0.81
)
Reconciliation of
basic and diluted weighted average number of shares
outstanding
Weighted average number of ordinary
shares outstanding used in computing basic and diluted net loss per
share (GAAP)
45,074,912
19,417,672
45,027,168
15,924,392
Additional shares giving effect to IPO and
concurrent private placement (2)
-
3,946,810
-
4,489,262
Additional shares giving effect to
conversion of convertible preferred shares at the beginning of the
period (3)
-
20,629,197
-
23,518,666
Weighted average number of ordinary
shares outstanding used in computing basic and diluted net loss per
share (Non-GAAP)
45,074,912
43,993,679
45,027,168
43,932,320
(1)
The tax benefits generated from the
exercise of the disqualifying disposition of incentive share
options were excluded in calculating its non-GAAP net loss and
non-GAAP basic and diluted net loss per share. The Company believes
that excluding these tax benefits enables investors to see the full
effect that excluding share-based compensation expenses had on the
operating results.
(2) Assumes ordinary shares outstanding after accounting for the
issuance of 5,037,742 ordinary shares associated with our initial
public offering and concurrent private placement at the beginning
of the three months and six months periods ending on June 30, 2021,
instead of the IPO closing date, June 10, 2021. (3) Assumes
ordinary shares outstanding after accounting for the automatic
conversion of the preferred shares then outstanding into ordinary
shares at the beginning of the fiscal year.
MONDAY.COM LTD
Reconciliation of net cash
used in operating activities to adjusted free cash flow
(U.S. dollars in
thousands)
Three months ended
June 30,
Six months ended
June 30,
2022
2021
2022
2021
(unaudited)
(unaudited)
Net cash used in operating activities
$
(14,061
)
$
(355
)
$
(26,973
)
$
(954
)
Purchase of property and equipment
(4,550
)
(1,358
)
(6,904
)
(5,581
)
Capitalized software development costs
(684
)
(718
)
(1,610
)
(1,158
)
Purchase of property and equipment related
to build-out of our new corporate headquarters
-
951
-
4,618
Adjusted free cash flow
$
(19,295
)
$
(1,480
)
$
(35,487
)
$
(3,075
)
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version on businesswire.com: https://www.businesswire.com/news/home/20220808005006/en/
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