Project management software maker Monday.com (NASDAQ:MNDY) reported third-quarter 2024 results that beat the market’s revenue expectations, with revenue up 32.7% year over year to $251 million. The company expects revenue next quarter to be around $261 million, close to analyst estimates. Non-GAAP earnings of $0.85 per share were also 34.6% above analyst consensus estimates.
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Gain: $251 million vs. analyst estimates of $246.3 million (1.9% better)
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Custom EPS: $0.85 vs. analyst estimates of $0.63 (34.6% better)
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Adjusted operating result: $32.18 million vs. analyst estimates of $22.49 million (43.1% better)
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Revenue guidance for Q4 CY2024 is $261 million in the middle, about in line with what analysts expected
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Adjustment of Operating Income Guidance for Q4 CY2024 is in the mid $30 million range, above analyst estimates
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Gross margin (GAAP): 89.7%, compared to 88.5% in the same quarter last year
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Operating margin: -10.9%, compared to -1.3% in the same quarter last year
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Free cash flow margin: 32.8%, compared to 21.5% in the previous quarter
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Customers: 2,907 customers pay more than $50,000 annually
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Market capitalization: $16.17 billion
“We are very pleased with our third quarter results, with solid revenue growth and profitability, as well as improving retention trends as we continue to expand to larger customers,” said Eliran Glazer, CFO of monday.com.
Founded in 2014 in Israel and named after the dreaded first day of the work week, Monday.com (NASDAQ:MNDY) creates a software as a service platform that helps teams plan and track their work efficiently.
The future of work requires teams to collaborate across departments and remote offices. Project management software drives and benefits from this change. While the trend of collaborative work management has been strong for a while, the Covid pandemic has definitely accelerated the demand for tools that allow work to be done remotely.
A company’s long-term performance can provide signals about business quality. Even a bad company can perform well for one or two quarters, but a top company grows for years. Fortunately, Monday.com’s 51.1% annualized revenue growth over the past three years has been incredible. Its growth exceeded that of the average software company and shows that its offering is resonating with customers, which is a good starting point for our analysis.
This quarter, Monday.com reported stunning year-over-year revenue growth of 32.7%, and revenue of $251 million exceeded Wall Street estimates by 1.9%. The company’s management is currently projecting a 28.8% year-over-year increase next quarter.
Looking further ahead, sell-side analysts expect revenue to grow by 26.7% over the next twelve months, a slowdown from the past three years. This projection is still remarkable and implies that the market is seeing success for its products and services.
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We enjoyed seeing how Monday.com improved revenue and adjusted operating income. Revenue expectations for the next quarter were right in line, and the market appears to be punishing the company for not taking the upper hand. The stock fell 13.1% to $282 immediately after the results.
So should you invest in Monday.com now? When making that decision, it is important to take into account the valuation, the business qualities and what happened in the last quarter. We cover that in our useful full research report which you can read here. It’s free.
