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Monday.com’s (NASDAQ:MNDY) Q4: Beats On Revenue But Stock Drops By Stock Story

Monday.com’s (NASDAQ:MNDY) Q4: Beats On Revenue But Stock Drops By Stock Story


Monday.com (NASDAQ:MNDY) Q4: Beats Revenue But Inventory Falls

Project management software publisher 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 millions of dollars. The company expects revenue of around $209 million for the next quarter, in line with analyst estimates. It reported non-GAAP earnings of $0.65 per share, an improvement from its loss of $0.03 per share in the same quarter last year.

Is now the time to buy Monday.com? Find out by reading the original article on StockStory.

Monday.com (MNDY) Fourth Quarter Fiscal 2023 Highlights:

  • Income: $202.6 million versus $197.8 million estimated by analysts (2.4% overshoot)
  • EPS (non-GAAP): $0.65 versus analyst estimates of $0.32 (100% beat)
  • Revenue forecast for the first quarter of 2024 is $209 million at the midpoint, which is about what analysts expected
  • The direction revenue forecasts for the next finances year 2024 stands at $929 million at the midpoint, which is in line with analyst expectations and implies growth of 27.3% (compared to 41.2% for FY 2023)
  • The direction adjusted operating profit forecast for the next finances year 2024 is $61 million at the midpoint, below analysts’ expectations of $68 million
  • Free movement of capital of $55.44 million, down 14.6% from the previous quarter
  • Net revenue retention rate: 115%, compared to 110% in the previous quarter
  • Clients: 2,295 clients paying more than $50,000 per year
  • Gross margin (GAAP): 88.9%, in line with the same quarter last year
  • Market capitalization: $11.39 billion

“We concluded 2023 with strong fourth quarter results, demonstrating our ability to generate sustainable growth and profitability as we continue to grow,” said Eliran Glazer, 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-service platforms that help teams 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 and benefiting from this change. While the trend toward collaborative work management has been strong for a while, the Covid pandemic has definitely accelerated the demand for tools to enable remote working.

Sales Growth As you can see below, Monday.com’s revenue growth has been exceptional over the past two years, growing from $95.55 million in the fourth quarter of fiscal 2021 to $202.6 million dollars this quarter.

Unsurprisingly, it was another great quarter for Monday.com with revenue up 35.1% year-over-year. Quarter-over-quarter, its revenue increased by $13.38 million in the fourth quarter, which was roughly in line with the increase in the third quarter of 2023. This steady growth shows that the company can maintain a strong growth trajectory.

Forecasts for the next quarter suggest Monday.com expects its revenue to increase 28.8% year-over-year to $209 million, a slowdown from the $49.5 increase % year-on-year recorded in the same quarter of last year. For the next fiscal year, management expects revenue to be $929 million at the midpoint, representing year-over-year growth of 27.3%, compared to an increase of 40%. 6% in fiscal year 2023.

Large Client Growth This quarter, Monday.com reported 2,295 enterprise clients paying more than $50,000 annually, an increase of 218 from the previous quarter. This represents slightly more contracts won than last quarter and well above what we have generally observed in previous quarters, demonstrating that the company has good sales momentum. We are confident that shareholders will view this as an indication that the company’s go-to-market strategy is working very well.

Key Takeaways from Monday.com’s Q4 Results We were impressed by Monday.com’s net revenue retention growth this quarter. We were also happy that its revenues beat Wall Street estimates. On the other hand, its revenue forecast for next year suggests a significant slowdown in demand, and operating profit forecasts for the same period were lower than expected. Zooming out, we think it was another mixed quarter, with forecasts pushing the stock lower. The market probably expected more and the stock is down 7% post-release, trading at $220 per share.



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