Project management software maker Monday.com (NASDAQ:MNDY) reported Q4 CY2024 results topping the market’s revenue expectations , with sales up 32.3% year on year to $268 million. The company expects next quarter’s revenue to be around $275 million, close to analysts’ estimates. Its non-GAAP profit of $1.08 per share was 36.8% above analysts’ consensus estimates.
Is now the time to buy Monday.com? Find out in our full research report .
Monday.com (MNDY) Q4 CY2024 Highlights:
“Our 2024 results reflect our ongoing commitment to driving highly efficient growth through nearly any macroeconomic environment, with record GAAP and non-GAAP operating margins and free cash flow, and surpassing $1 billion in annual recurring revenue (ARR),” said Eliran Glazer, monday.com CFO.
Company Overview
Founded in 2014 and named after the dreaded first day of the work week, Monday.com (NASDAQ:MNDY) is a software-as-a-service platform that helps organizations plan and track work efficiently.
Project Management Software
The future of work requires teams to collaborate across departments and remote offices. Project management software is both driving this change and benefiting from it. While the trend of collaborative work management has been strong for a while, the Covid pandemic has definitively accelerated the demand for tools that allow work to be done remotely.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for years. Thankfully, Monday.com’s 46.7% annualized revenue growth over the last three years was incredible. Its growth surpassed the average software company and shows its offerings resonate with customers, a great starting point for our analysis.
This quarter, Monday.com reported wonderful year-on-year revenue growth of 32.3%, and its $268 million of revenue exceeded Wall Street’s estimates by 2.5%. Company management is currently guiding for a 26.8% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 24.1% over the next 12 months, a deceleration versus the last three years. Still, this projection is noteworthy and suggests the market sees success for its products and services.
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Customer Retention
One of the best parts about the software-as-a-service business model (and a reason why they trade at high valuation multiples) is that customers typically spend more on a company’s products and services over time.
Monday.com’s net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 112% in Q4. This means Monday.com would’ve grown its revenue by 11.5% even if it didn’t win any new customers over the last 12 months.
Trending up over the last year, Monday.com has a good net retention rate, proving that customers are satisfied with its software and getting more value from it over time, which is always great to see.
Key Takeaways from Monday.com’s Q4 Results
We enjoyed seeing Monday.com materially improve its net revenue retention this quarter. We were also happy its revenue and operating profit outperformed Wall Street’s estimates. Looking ahead, its revenue guidance for next year also exceeded expectations. Overall, this was a strong quarter. The stock traded up 19.5% to $309 immediately after reporting.
Is Monday.com an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free .
