monday.com Ltd. Q3 FY2025 earnings call

• Q3 delivered strong results with over 100k+ net additions and 500k+ paying customers, on track for FY 2027 revenue target of $1.8 billion. • Largest ever non-GAAP operating profit, showing efficient scaling while investing in innovation. • Multi-product strategy yielding results, with new products making up over 10% of ARR. • AI offerings like monday campaigns, Monday Vibe, and Agent Factory seeing rapid adoption. • Elevate User Conference attendance doubled year-over-year, amplifying customer enthusiasm and generating strong pipeline. • Rebalancing go-to-market towards mid-funnel channels targeting larger opportunities, though with longer sales cycles, yielding higher quality pipeline.

Total revenue for Q3 was $317 million, up 26% year-over-year. Non-GAAP operating profit was a record, reinforcing efficient scaling. New products account for over 10% of total ARR, surpassing 2025 goals ahead of schedule. CRM with AI-powered monday campaigns saw rapid adoption since September. Monday Vibe had over 60,000 apps created by customers since July. Agent Factory, a new AI product, has flexible consumption-based pricing. The multi-product strategy is expanding reach across teams and use cases, with CRM eclipsing $100 million in ARR within two years.

• For FY 2025, revenue expected to be in $328M - $330M range, growth 22%-23% YOY. Non-GAAP operating income $36M - $38M, operating margin 11%-12%. Full-year revenue $1.226B - $1.228B, growth ~26% YOY. Full-year non-GAAP operating income $167M - $169M, operating margin ~14%. Adjusted free cash flow $330M - $334M, margin ~27%. • Timing effects and rebalancing investments impact short-term guidance, but long-term trends and momentum are positive.

• Market uncertainties and macroeconomic factors may cause longer sales cycles and customer decision delays. • Rebalancing go-to-market towards mid-funnel channels with longer sales cycles introduces timing risks to revenue recognition. • Early stages of AI product monetization and adoption carry uncertainties in forecasting meaningful revenue contribution.

Q: What's top of mind for customers in 2026 and monday.com's spending priority?

A: Eran Zinman noted healthy demand across customer segments, with customers interested in AI features and profitability. Eliran Glazer mentioned timing effects from rebalancing investments. Casey George highlighted multiproduct journey and customers not fully leveraging the platform.

Q: Impact of move upmarket on deferred revenue and billings?

A: Eliran Glazer said billings aren't perfect measure; RPO is a better metric, accelerating quarter-over-quarter and reflecting upmarket contracts.

Q: Guidance and Q3 results timing effect?

A: Eliran Glazer explained timing effects from rebalancing investments towards higher ROI areas, with positive momentum in upmarket customers.

Q: Product bundles and go-to-market?

A: Casey George said bundles launched for consistent use cases, offering commercial advantage and ease of use, seeing good traction.

Q: Sales force productivity and AI impact?

A: Casey George said productivity moving in right direction, AI agents helping make sellers more productive, expecting greater improvement in 2026.

Q: RPO adjustments?

A: Eliran Glazer explained post-Investor Day adjustments for consistency and accuracy, auditors signed off Q3 RPO data.