monday.com Ltd. Q1 FY2025 earnings call

• Robust revenue growth of 30% year-over-year in Q1 2025, achieving record quarterly operating profit and highest-ever cash flow for a single quarter.
• Launched new monday work management capabilities and AI-powered features, with users performing over 26 million AI actions, up over 150% since end of 2024.
• Enterprise segment is the fastest-growing, with new capabilities launched in the work management enterprise tier.
• Appointed Casey George as Chief Revenue Officer, bringing extensive experience in scaling enterprise software organizations.

Total revenue for the first quarter of fiscal year 2025 was $282 million, up 30% year-over-year. Gross margin was 90%. Research and development expense was $53.8 million, or 19% of revenue. Sales and marketing expense was $135.9 million, or 48% of revenue. Net income was $58.4 million. The enterprise segment was the fastest-growing, with new capabilities launched in the work management enterprise tier.

• Q2 fiscal year 2025 revenue expected to be in the range of $292 million to $294 million, representing 24%-25% year-over-year growth.
• Full year 2025 revenue expected to be in the range of $1,220 million to $1,226 million, representing 25%-26% year-over-year growth, assuming less than 100 basis points negative impact from FX.
• Full year non-GAAP operating income expected to be $144 million to $150 million with an operating margin of approximately 12%.
• Full year adjusted free cash flow expected to be $310 million to $316 million with a margin of 25%-26%.

• Macroeconomic uncertainty posing risks to business performance.
• FX impact, with guidance assuming less than 1% negative impact but taking a conservative approach due to market uncertainties.
• Uncertainty in customer behavior affecting net dollar retention rate (NDR), with expectation of NDR being slightly below 112% by year-end.

Q: Congratulations on a spectacular start to the year. With the new addition of your Chief Revenue Officer, what changes in go-to-market do you foresee ahead?

A: Eran Zinman mentioned they're excited for Casey George, preserving product-led growth with sales-led motion, preserving multi-product strategy, and Casey's expertise will accelerate go-to-market and upmarket motion.

Q: Run us through what you saw this quarter from the CRM and the service business. And then, dev, it looked surprisingly strong. How to think about that going forward?

A: Eran Zinman said great momentum overall, strong net adds of customers, service has 70% ARR from mid-market and enterprise, monday dev has good momentum with go-to-market changes and optimizations.

Q: On AI actions, how much of that is experimentation at this point versus being added to production workflows or automations? Have you started monetizing the AI actions at this point?

A: Roy Mann said usage is deep in many areas, monetization is early in stages and experimenting, with correlation between usage and pricing.

Q: Dig a little bit more on to the guidance. How is the uncertainty actually manifesting into how you're thinking about what's incrementally changed with the outlook versus before?

A: Eliran Glazer said overall customer growth expected in mid to high-single-digit growth, NDR slightly below 112%, no revenue from AI currently accounted for in guidance, and conservative approach due to market uncertainties.

Q: Curious if you could just give us a sense of what you saw in April versus March and how the current quarter is trending. Any notable trends in enterprise versus SMB?

A: Eran Zinman said across all segments, enterprise and SMB are pretty consistent throughout Q1 and into April, enterprise is the fastest-growing segment but in line with Q1.