monday.com (MNDY) 13 Nov 232023 Q3 Earnings call transcript

Company Profile

Participants

Byron Stephen	executive
Roy Mann	executive
Eran Zinman	executive
Eliran Glazer	executive
Kasthuri Rangan	analyst
Pinjalim Bora	analyst
Brent Bracelin	analyst
Arjun Bhatia	analyst
Andrew DeGasperi	analyst
Brent Thill	analyst
George Iwanyc	analyst
David Hynes	analyst
Scott Berg	analyst
Taylor McGinnis	analyst
Jason Celino	analyst
Robert Simmons	analyst

Call transcript

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Operator

Thank you for standing by, and welcome to the monday.com Third Quarter Fiscal Year 2023 Earnings Conference Call. I would now like to welcome Byron Stephen, Head of Investor Relations to begin the call. Byron, over to you.

Byron Stephen

Hello, everyone, and thank you for joining us on today's conference call to discuss the financial results for monday.coms Third Quarter fiscal year 2023.

Joining me today are Roy Mann and Aron Zimon, co-CEOs of monday.com and Eliran Glazer, monday.com CFO. for quarter results today. our released the earlier third We

to and along quarterly investor today's You cause our the our call These News cause on statements, made our involve materially be reflect risks ir.monday.com. Certain letter website webcast section with at factors refer IR may the available expectations. that statements. from differ information. specific today of statements our earnings can from find more actual currently actual on replay for to management's shareholder best the our uncertainties statements based of results the a presentation under differ forward-looking release information will our Please and Events forward-looking results which on to could and judgment that

the for measures to Investor on which are available our financial will Reconciliations directly GAAP and on release today's Relations presentation earnings website. discussed be the financial call. comparable non-GAAP earnings call, in measures most our posted Additionally, are the

let Now call Roy. to over turn me the

Roy Mann

you, and today. you, Byron, us joining everyone, for Thank thank

with reflect is recent have in on most that recent hearts events quarter, our unfolded Israel. acknowledge it that we tragic we As the heavy

time, by current is are our and those thoughts all ability meet At on our we to remain violent and financial situation all minimal, business impact affected with attacks. terrorist this of Our our operation targets. the the recent global confident in

percentage low terms our In accounts single-digit ARR. of Israel a for of total revenue,

our and run seamlessly. all any data gaps are continue our across While to feel and employees help distributed above have will our Europe our called Australia, ensure have beyond America, approximately been up for only of operations global of business reserve smoothly. duty, our North X% servers workforce to ensuring global seamlessly globally Furthermore, continues to gone

the as monitoring estimate situation our make necessary will closely needed. to are and We plans

results to turn me our this let quarter. Now

cash margin and margin impressive XX% a you operating we this generation. ability Eran now strong non-GAAP scale our flow to and We to record achieved another turn free of demonstrate cash of quarter record some XX%. I'll our highlights improvement have pleased posting product margin through of continued quarter. are it to we amazing growth, to over walk to In efficiency, share of that with QX,

Eran Zinman

Thank Roy. focused strategy We and our customers. that functional multiproduct for successfully remain products ensuring mail you, can our on collaboration our cross

Our remarkable a our new cross-sell of with to management products show initial accounts adopting products. X,XXX opportunity work one continue new

will believe providing dedicated evolving our new meet exceptional products pivotal We role in this. of achieving that that are play the and needs customers, solutions a we to our

Our target next is of to our open successfully all completed customers In by end QX, of new and Monday X.X. CRM to DB year. we've the access monday DB to call monday QX

our been to new in and With customers the infrastructure phase, amazing. has Monday noticing initial capabilities all completion have Work transitioned feedback the that cutting-edge platform. meaningful been boost performance OS of are and Users of a

to beginning AI Our our also load next now great showing most performance dashboards our live of in already results capabilities. X.X new significant improvements initial from and complex see dashboards. is Money times and Monday largest phase, DB and We're

solution customers personalized as build see it Specifically, ahead builder the up to and boards. that builder, helped also through We're effort to The is we date, formula of and AI is excited builder from already X,XXX users customers. over saving we opportunities the the meaningful the solution receiving operation very AI formula seek time generate users our has easily builder fully formula and advanced positive AI power to AI. utilizing set feedback value for capabilities. We're

we achievement in ahead. the remain proud quarter, in this of very confident As our always, we highly team and are money.com opportunities

operations December our forward X. New strategy or deeper hosting our reminder, many product I sharing at our our of Conference on as turn financial insights into plans. to a gain to to be and will City and company We our With Investor and to need future it guidance. you that, person As and in look cover over Day we and first Eliran seeing Elevate a vision, York I'll now

Eliran Glazer

Thank consecutive you, you strong We with Eran, Today, call. provide everyone thank third income non-GAAP flow our the for joining record and operating in our and and results cash updated quarter in QX free quarter. guidance. I'll fiscal XXXX for quarterly to third reported review detail results

came quarter million the customer revenue Our we well year consistent execution as up and quarter. the at system our our see demand platform demonstrate the QX, the $XXX.X work ago in as operating results healthy for from in products. Total in monday.com XX%

through net overall resilience dollar QX reflecting continued macroeconomic challenging a our in environment. retention Our rate more steady remained

year the most recent quarter. still that below MDR our slightly assumes by XXXX full stabilization during to While are guidance encouraged of the we XX%, we be signs witnessed

As a X reminder, our net average dollar is retention quarter calculation. rate trailing weighted

Unless referencing disclosed measures. will noted, financial of be otherwise reminder the For I non-GAAP financial metrics the

reconciliation our GAAP a non-GAAP financials earnings provided have release. of in We to

compared in horizontally was $X.X QX was based employees fully $XXX.X shares and million to outstanding. Total percentage Third work marketing quarter million high to be to our share XXXX. expense was Diluted XXXX. the margin revenue in XXs our or or G&A was the we and expense diluted per XX% in platform, was QX XXXX. million compared of as product QX or from was system XX%. X,XXX, employee revenue million, XXXX. medium teens to in QX of In on gross the in XX% XX% XX% operating out suite anticipate build term, scale we expect long in R&D Research medium to the $X.XX continue expense range. we a of income of million increase high headcount was gross QX to million $XX.X 'XX. income to XX% XX vertically. Sales revenue XX.X term, compared margin $XX.X of expense In development to Net both and net up as X% long revenue an $XX and be since

to our suite. product with continue next the year sales we our on hiring R&D and expect and over product platform a focus build teams as We out

cash cash to on cash sheet QX with ended end in equivalents QX cash of for QX up at end the 'XX. Free billion and and flow. of the cash from Moving was the $XX.X $X.XX cash quarter costs. million 'XX $XXX at balance the and flow and net We as flow million as free 'XX for free cash equipment operating percentage was defined as revenue defined and activities, flow cash capitalized is Free flow property of margin cash as a less software used from XX%.

updated year fiscal our to for XXXX. turn let's Now outlook

to of $XXX million the expect of growth million, For range the to be in fourth quarter $XXX XX% of to we revenue year-over-year. fiscal year XXXX, our representing XX%

X% operating to We to million expect of margin operating non-GAAP income an and million X%. $X $X of

year to full of expect we the of XX% revenue For be $XXX the to range XX% in $XXX million year-over-year. XXXX, now representing growth million, to

to to Operator? non-GAAP of $XX million the operating million your of it operator operating year for I'll full an expect income margin questions. We X%. $XX approximately turn and over now

Operator

first [Operator Rangan Goldman Kash Instructions] question of the comes line from Our with Sachs.

Kasthuri Rangan

you changing you thoughts in that's with entrepreneurs, out it expansion quarter. different Just the buying turns of the world the congratulations and your businesses and your to Dev, of further as take in the to that of the knows to things. I'm business, step on then And curious safe platform approach capabilities, saw respect what I'm hear to company safe, happy very before and to expand stabilization you go the all, hear and be centers have broadening employees the who I with that you've in continues [indiscernible] can is first nuances the thoughts how those you a go-to-market the on. good how through With personas the going you're your the product? wish X CRM and the on also such the and that evolve rate can on the quarter. you curious go-to-market been multiple to the your hear after, of of the back as And might the broadening given future, are understand

Eliran Glazer

to will refer your question. to answer Eran and Kash, is your question, first Eliran. I second then this will address I

So with of the X as quarters. last weighted a stabilization looking the at MDR, we MDR of regard as are to the a reminder, average

you new that us very in fact that it's and driven customers than the trailing that decline saw is stabilization months, threatening of term. the on is So going a encouraging the by lower top XX it's We we we demand additional headwinds funnel we basically when joining believe is over a was few the was were basis, the as saw past this the part potentially see a saw to anticipated what platform. that a also we that And this and be looking macroeconomic what at healthy saw long to there expansion of in to flattening. we last than the that months, the fact basically also or are the that past. But month-by-month

Eran Zinman

And Kash. is Yes. this Eran,

in So really much is our verticals performance one verticals, X and buy ability customer software. it much goes and of regarding both how LTV helps to management greater. events new be we multiple really. and vice start that, work can in the products, make or definitely and just more multiple in that all with acquisition go-to-market, product different more have us efficient. And allows vertical, but exhibitions don't our each do our the because a terms just might basically into and a aggressive We our it expand helps this multiple ecosystem having But then our than is CRM marketing to personas ways, One compete personas the so more way to versa. customer for across

be each total allow the how which more acquire to greater, much aggressive we is customers. in of going potentially So forward customer LTV us

up opened acquire our So time. customers it to over expand definitely them ability and

Operator

comes with from of line JPMorgan. question next the Pinjalim Bora Our

Pinjalim Bora

us the not far that quarter QX? Can you made. as funnel QX just that that of final versus Congrats the top of far from the top you on I going consistent in have you into Maybe and so rates of if so QX the been has help on the me momentum understand ask conversion seen comment the well. or

Eran Zinman

Yes.

So and sizes, see we in acquisition strong all customer customer both still demand, and activity, very It's top-of-funnel stable. across terms enterprise More very customers. SMB of

less very that segment. It all new with But to seat existing strong. momentum is grew the continue Enterprise across last like seeing that apart we've quarter. the year-over-year expansion right mentioned, customers. grow our acquisition, like is We from in from customers and we impact customer products XX% And stable now the only we're that, see our

Pinjalim Bora

that I And building help portion you by that, if in regional just you're where start sales expect of understand teams, few of on kind kind can driven on going the questions you the structure, that heads regional what acceleration And an upon. these that of on should outbound A us structure of as into in have going? And we is of And CRM your their rep in the that the and making. kind you dev of do kind hybrid today? regional go-to-market change ask how that are you motion. hiring embarked the outbound Can sales year? see you kind layering next

Eran Zinman

Yes, Pinjalim, this is Ron.

bit. You up breaking were little a

You we Is were the outbound asking that see. correct? momentum about that

Pinjalim Bora

regional structure. the to Yes, the us sales regional talking

Unknown Attendee

Yes.

Okay. -- ahead. go basically sorry,

Pinjalim Bora

The regional sales structure that you're highlighting, right?

Eran Zinman

Yes. -- Yes. sales Regional structure

we movement presence also last the of a those that a it's both manager APAC regions, stronger those region. the announced So Dean be promoted regions regional scaling basically, dramatically. and -- both America receiving And for but Jamieson quarter, definitely, of for we're North in to part

XXX outbound lot Fortune sales As performance in also reaching addition customers, larger to we said, of customers, we're our a marketing. doing

company. So it we access continued effort. it's to and for to time and just gives scale a us more momentum continue that over enterprises, And larger as that us, larger

Operator

Steve Our Enders with of Citi. next the question comes from line

Pinjalim Bora

hear is of over like just glad Okay. guess kind start everyone to on part. I'm I Monday. Great. to that maybe at safe would

plans next like at and And you backfilling means of there? as discontinued guess, about those into called up when managing have some for I for that how about go you that of think level do disruption. of reserves you I think called future seems expectations you up individuals I you year. that employees guess, hiring been do have out the called think point. organization going to X% this it How what about like hiring, secondarily,

Roy Mann

It's Roy.

very plans the but the minimal. on and effect. has reason The a with, something short-term dealing it have we're impact So impact right is we have now it's we

year Regarding next hiring, year. hiring very and a we're for this also have plan strong

track, So well. that's we're on going been and

Eran Zinman

servers, Israel there, data that of of our Yes. a impact, is terms all don't it's single-digit have centers a very in can Maybe, and small Australia. in also across for our this Stephen, Ron. any small low America, ARR add revenue. a Israel I there's although Europe, little part see little very only it's And North impact currently distributed accounts and we of We but globally. data bit, percentage over

of terms as impact the we it's no to And side, integrity, servers, in see So impact. minimal operations, Israeli on we data mostly customers. mentioned business

Pinjalim Bora

in year? Got nature. strong That's And about then in How you. puts flow into just call I quarter anything there. think we as I either was the helpful. there guess maybe the really cash be going we that quarter, takes thinking Okay. and the mean free really, next should or next onetime some to of on about out

Eliran Glazer

Yes, is it very about one-off. as a to think a and high Eliran. XX% we obviously, it's would Steve, so percentage, like

mostly customer year, spending have XX% part Although originally gave we We also, bank consistent slightly the we any nice QX I of fair, over even significant to when billings. with and the though Actually, to balance, collections $X would be say, disciplined improving it's on continue said the -- healthy. come returns across guidance we with to environment, that we bank of just environment with very are the a don't the inflation. the it's macro we as be above efficiency. And by of very about, in the end going generate billion issues. in And

above of efficient very in terms for free the cash of is flow. all So us healthy

Operator

comes Piper line Sandler. Brent Our from question next Bracelin the with of

Brent Bracelin

execution, quick Maybe some the Here of in and some about wanted to SMB. And just been? that I there the obviously, future you're with you little colleagues specifically by what product, the in impressed you, challenges. given has pivot towards a support best Monday.com, trends response the bit in your tragedy the seeing one we'll super strong Obviously, I seeing assistant. and Israel. then what beta, a AI bit echo Can the have we're impacted family for the little here mix wishes talk follow-up. Roy, early

Roy Mann

Roy. it's Yes,

boards. was accepted nicely with building AI very the So

used kind workflow saw and of the Board and people the help the formula usually of things were they got we the they surprised build So AI. they are builder about that the were said customers with like that we boards the assistant complex, like to got really And suggestions from like and kind the itself. happy

of them So it's the the kind customers get really assistant and it's an most right like of system helps that now. onboards out

Brent Bracelin

impressed kind sounded LTV the as like And it's even you continue here, like follow-up of encouraging. performance margins while Very a guess bit continued the then by improvement seeing Mark sounds little to I to right given a on spend you're a It just you're in little sustain Eliran, returns for leaning margins. you, CAC performance. getting now? here in marketing, marketing with improving. Can aggressive performance

Eliran Glazer

or because quarter we hold really we to don't have the the would lever the perspective, most, I performance quarters. Brent, see return the So us think that definitely of our From that if the changed I spend the things from marketing on few say, numbers last a is impactful not when to return. see it is basis either allows back

but it's other by, we see thought quarters. us, pretty more We returns the we prior so might we when or we from in but for the So anything marketing. But not seeing, we we any anticipated didn't of saw the manage terms it's players, that already competitors goes what what maybe in see it's of accordance kind the performance the don't on spend has getting not far. that a aggressive more that returns year some actually any spend we with of in getting worse to are -- started much behavior the what better, see. We

our if we spend. return it meets better provide And going as it aggressive spend to a be long we then will continue criteria, it. that as to will are more So us results, do

Operator

line the from with Arjun comes question William next Blair. Our of Bhatia

Arjun Bhatia

Perfect. And wishes you to all I'll my Israel. have best in

deployed but look ARR Can customers especially just you're of market XXX-plus a that -- from cetera. just very larger customers, on expansion, large et Monday behavior if trends customers. in seat seeing of talk in whether it's that I those versus strong, your you're you upsell maybe First, between are to customer noticed out about that the getting the bit enterprise percentage or on little terms difference any start smaller

Eran Zinman

is terms great this I've see to Arun, we mentioned, more overall, our of momentum. enterprise seat Yes, Eran. increase enterprise Yes. as in tend accounts and more time. accounts, Those upgrade their over

we MDR. definitely, So of higher see levels

use And In operation managing entire little a almost growth, of the over in In consolidate a we on main of because more tend lot over time, Monday. retention, in generate for terms enterprise between difference it's of we on departments an them. revenue expand way of more. business gradual they of customers, usually, of or definitely, departments, X might add we then bit invest SMBs. What usage, enterprise kind sold case X a enterprise their Monday, and But but terms and SMBs process. see use time, they to more there's more a is a they customers, stability, usually lot customers

Arjun Bhatia

Okay. making improving these just is to to helpful. like go very enhancements going on and How here DB's, And it going be That's Perfect. scalability. the your much API then Got after next phase impacting ability on that is in down something it. to then monday that sounds or the seeing get Is larger the and more the versions something get further them and as out? DB use improvements scalability road customers we already rolled them you're show that infrastructure the that you're to Monday? anticipate to

Eran Zinman

again. Eran is This Yes.

DB. got saw release Monday significant now great call, use the X.X, We I a of how beginning managers touched And which one already use their to we've earnings skilling but the platform. here the help high-level customer use, version. from dashboards. accelerated to with the how they of is major and the we which We use customers that scale the accelerate feedback part, really and point because during mentioned a the lot It's So us on of is definitely, a things you management to operation enterprise dashboards. think with really of boost enterprise been it's usually, this Monday. And

will this aim us game accelerate have in lot larger scale a monday definitely, changer for And other that within enterprise. ability is really into versions of And terms of enterprises. feel our we So DB. that each launch we the iteration huge help to to sub penetration our we a

Operator

the Cowen. Wood Our next question Derrick with of TD from line comes

Andrew DeGasperi

and in Andrew our on you strong It's customers, thoughts a of about growing? revenue Great. net echo could base. that sales I'll it's mid-market? keeps CRM, next Eliran, become to your XX,XXX also contributor Does year the into everyone Israel. Do and see material this new think the X% growth you moving total to

Eliran Glazer

Elian. it's Derik, Yes.

is by just as really CRM And we plan opening reminder, next CRM finish customers access the to of the growing So a and nicely. end all year. QX to to

So grow. to definitely, to this continue we expect

still Although the And that the additional we it's days, have year, looks products. accounts since just this to earlier introduced have we early product, have added encouraging. work management but X,XXX-ish announced cross-selling we it opportunity

So going more I and think to that over are cross-selling sales focus it's are next think in and and year. are to the rep that motion see time, with sales resulted a we going going the upselling, fact to growth be I that we proactive further increasing we number on

Andrew DeGasperi

And you, uptick of nice should mostly larger Any XX% to plus uptick for Are existing of And drove what year? Great. kind a seeing XX,XXX is continue the to? also next on to ARR this ARR. lands that into that? expansions? Elran, you from And then color

Eliran Glazer

it's all think bigger. above. landing the It's we of are -- Derek, I

growing find are that multiproduct bring customers business who accounts. team to be -- enterprise are selling we a the we people us sales We core of are the that part to we expecting and now have operation, fact their strategy

to this So of continues the drive the a all course, and is of DB. unlock value above, the that I contributes you within Monday bigger to you the organization, something with, motion, of think and how audience, once organizations Monday it together the market see bigger

Operator

of with Our Thill Jefferies. from comes question next the line Brent

Brent Thill

what in seen change you same quarter? us any Or walk the the the just last you can through have in you're is saw the behavior? quarter Eliran, that you to month, start seeing you're the speaking customer last in through it of consistency

Eliran Glazer

Brent, we quarters. we're in still prior seeing what saw

but As I not getting not worse. earlier, better, getting any said it's it's any

seeing I is their Sales of a spend. longer. still customer I choppy. cycles healthy taking we activity. think the still But on say would and demand cautious there on sometimes other still very still a lot very economy. pressure Customers top-of-funnel hand, the are on are

So and our kind these one think to are contributing execution. of I another setting

Brent Thill

giving momentum or or what X seat enterprise, in And really -- the looks they're -- not count terms shocked customer, and you can deploying? If more naming in customer back any of that milestones. or what seeing what the there terms in encouragement Is that been color is there X maybe been significant terms to at encouraging. segment? but how just Can data on you you've add points, were necessarily there in of is you of you're has

Eran Zinman

Brent. Yes,

about is maybe very in are enterprise deployment a color buying largest wider pipeline. we more our still large that do I can the share more X,XXX of momentum much Monday in see deals interested We seats, and seeing deployment. So interesting but

we're this customer pipeline see we momentum interest seeing. that our and customer definitely, So within

insight So going that to the bigger of and forward. and a evolving we're bigger that door gives lot us it deals opens

Eliran Glazer

Brent, like active to add that we maybe, fits, of see strong internal And people The are have momentum Eran. then and as to active we Yes. This level well. paying is just metrics seeing we engagement Eliran. some

within is something we is that usage believe growth that and enterprise the existing customers this see in new are to continued to customers. us going the So encouraging for

Operator

the next with George Our comes question of Iwanyc from line Oppenheimer.

George Iwanyc

to environment? Can back on some give us AI this feel you perspective how going Maybe changes competitive you maybe safety. everyone's for the questions best my add I'll topic. the

Roy Mann

Roy. It's

from know this don't customers everyone not demanding is think I It's if as So like what really AI. expect to or that. like

with to think product And explore into and I we're turn what easiest think good on great a track customers. we're to make thing really for in AI trying not a I a we've is works, really and the to everyone shared. the seen phase -- results it's that

don't think materially be something that in future. still So the it is like I might it's competitive, but

George Iwanyc

And following the just provide addition? pricing platform. on leverage some then into you're putting you you're additions of the all Can type new that the perspective product from on up the maybe getting and

Roy Mann

Yes.

that with are things value work advancement allow customers CRM for like we in products various other saying So improve to to and feel Alongside what in new more with and each of expansion. the and new platform we're going in do customer. improvements to extract, the area, to new of to have that that us then us dollar allow the every We experimenting like that cross-sell will like expose cases us pricing. we're use the also give and value in again, introduction and cycle management, like to a higher making customers will

Operator

question the next line from Hynes Our comes of with DJ Canaccord.

David Hynes

in the I'll product, seeing quarter. roll you're around. out ecosystem. and marketplace of terms to let It much have improvements my like for new continue you I this and what some congrats as partners engagement to curious on more surface in area make scalability and of just I'm go one in there's and build others, the that activity of seems

time? So mean out you're that what signs of for and model any if the over it curious seeing playing could

Eran Zinman

it's I Eran. Yes. did,

X partnership both currently, most are marketplace. with good see really but It more and takes We're momentum Adaptive from of Upfire marketplace. we So those The definitely, -- coming partners kind have more apps and starting significant nicely. time, more our popular in to see our some the of growing ARR there.

bring So definitely, the we definitely momentum that experience and their helpful. they see is

our built see. We So work CRM, applications each for management, platform, dev. just the for for some of apps we're we but very encouraged vertical for with for see everything one not

So for definitely, momentum of to in the marketplace. opportunity large developers see them. addition smaller and and bigger partners, And continue marketplace anti of the to we the that build enriches this the in really each one

So all are in very built. that of we're and type development being with encouraged the the all, applications like

David Hynes

Yes.

base probably about trying do you Monday of hear. think assume relative get to I for what an journey. opportunity composition And it's to that how Okay. a maybe footprint sizing Good but the in dev for it mean of means the how your understanding developer it's of kind realizing to the then I Dev, CRM? for the and narrower, big of kind customer multiyear serviceable is base, opportunity

Eran Zinman

Yes.

this So again. Eran is Yes.

compared is So a -- as to look, than a CRM. that itself. But I how bit has compare Monday growing to we momentum. company, if it it great we It's again, younger mean, little is faster like grew

So has And of momentum you as that a great now that right product. players business a huge there's build market it can great it. also this in prove out think I

say, But we growth. by promising, adopt ago. So complete. of the we need definitely I we CRM encouraged in all lot product. Still, have that by year type of the all, We're would it customers a encouraged seeing to features the a looks very as promising,

into. we encouraged results lot with see a so we very far. definitely So the I'm something invest

Operator

comes Scott the & next from Our Needham Berg Instructions] of [Operator with line question Company.

Scott Berg

expecting like, to R&D spend intermediate in -- should the the kind of investments couple or with quarters. see high think I guess? really high your now, going to quarter, we all teens up teens? kind I concerns high sales about are be of ramp to several your look me. in a we marketing, echo Eliran, that certainly Are A How of R&D good talked balance sales will Nice in in term, the with me, the the right you all dealing you and and excuse what for questions about spend teens, been back there? our does high what teens Or hasn't the for in luck.

Eliran Glazer

'XX, in to mid-teens. I now your it's point, fiscal would year at looking say more probably So we that great a question. are

term, the It's grow. of first based to we longer lower R&D people. extent think you when it's in currencies, the all, all, short to a of we first believe because all So continue see to hiring, investment R&D. FX to of cost about continue why we to the mostly The in hire reason term continue in Israel, we R&D, on going the team certain in

the that recruitment dollar cost advantage sales took dependent we R&D. to both going the Israeli on that had strong We progress. well as some or was So shekel. mostly things is as of allocation like impacted the versus it we the from fact accounting And be benefit

So to not grow. a continue expand hire And team. we're the will for for Always, we that to this to we and hire good people believe But aggressively. fight is R&D find. see continue year, easy going the number are there we them. next to

Scott Berg

of like tools Understood. in and dev last Helpful. net to selling are versus tools perspective, early platform? the starting customer some are Are new or statistics, you those your from But couple still work And you're the follow-up management trends reasonably your adoption retention and you then talked rate? terms different out net about trough how seeing CRM note overall trends of from them. retention I items there impacting a revenue revenue modules quarters. how

Eran Zinman

Eran. is This Yes.

in early and revenue potential it's of amount with it, share Look, So our engagement there. still terms days in but upside overall an of experience terms of I that just we can see and extension,

potentially once are get using products some of that the just it's it, a sticky get them nature the whole team the using than others. department think And because you more of that you I of of tool. kind starts

now, definitely a how our CRM. But see nature have So just an the option But usage cohort early days. by right We definitely, dev upside and in for don't an of it has of yet. it's MDR, again, we there judging there. still both lot data

Operator

of McGinnis Taylor question with UBS. from the next line comes Our

Taylor McGinnis

and thoughts on the Israel at in else, circumstances. you execution to done this well considering everyone and all extend quarter Monday everyone Like want I to

upside, in So XQ we at to just growth. see really it looks solid start looking and assuming actually acceleration guide, rep some an quarter-over-quarter the could

in what talk terms some been comfort macro -- this quarter can then environment seen events. second, SMB giving outlook? evidence software softening companies other that's in first, trends this you've And you you other some of about within there's the So in maybe and of demand

the level So on for -- these of and embedded can the you of the just events? provide in being you the talk assumption environment some of conservatism about color some more guide can for maybe

Eran Zinman

for Tyler, this Thanks joining. Eran. is

about the the the for can comment can I little demand a maybe So on and guidance quarter. talk Eliran next bit

see signs mentioned, like choppy we in year very attention, in of customers. feel very we also stability not and the the mentioned, of of strong of terms terms of we demand positive we in demand see overall. like beginning And just still enterprise comfortable. demand, SMB, the demand, of in environment like is terms in in usage but So Like and although Eliran also kind

So we terms anything, what guidance of or to that's for know terms in of in want I add if QX don't you the see market. Eliran,

Eliran Glazer

Yes.

what say we I always we regards the guidance. we So to would know with guidance, do report that when

are they into that are they later not haven't year. take seeing. And really we much So the account -- trend changed the over we

NDR a the account As well with this to taking is fact year And be it's the new challenging earlier, growth, mentioned, the macroeconomic that CRM and full are multiple on top regards expect then DB conditions the we of believe to continue level first we slightly year. With we pressure seeing. to of I it introduced XX%. other as said have do Monday customer we use some of NDR. to still the this into at some expect we I on as offset off to as And cases. But moderate funnel demand below that trends we end

some funnel well, definitely is demand coming there the economy, it from offset is So to we seeing by -- are macro there the top from new customers. summarize, while strong is pressure of that

Operator

the comes Our of KeyBanc Celino from with Jason line Markets. next Capital question

Jason Celino

a them seems become including like I'll can that do you but lot how table really of still a and think start one your be maybe AI But differentiator? these case, management Roy, philosophical stakes. yet, is software it's early question. collaborative peers I too AI features no with and it companies, know work said are a products. you this content might If bundling out AI the in core the rolling knows

Roy Mann

I philosophical appreciate the question.

I'll improved more there across One and into with looking good overall stakes So pay the of everyone areas. usability. of performance but everything. And table We're AI productivity that field, divide think I can only lot making you that in is in part at upside. software AI it. what on productivity think is we're customers And adding putting emphasis a is for. not components like the and like tell like the a area, will AI, improve the doing is the AI, we itself less what, X other I And monetizable, its right,

a have We strong on team it. working

be because true to And have come that stakes. make workflows, is think we will that progress. the them, I AI Monday a that their like like not that's in And accessible a to improve take it customers build able And say to for lot work want power platform. I but and are and business feel able we're really to and we table take us a very to to give

Arjun Bhatia

having deployment Maybe a Eliran, you Great. $X mark, And cash, more. some capital to generating of lot crossing strategy? you're billion you the and then, your speak of mentioned can

Eliran Glazer

Yes.

be at hiring cash, initiative. M&A. hiring, So to definitely thinking going the nonorganic it's we regards to are Again, continue team, is the the about deploy obviously, corporate something to invest months. and investing to XX to to team in companies products, next the people, well XX potentially in going and business, opportunities, started in leadership that growth management we as to look going to for but about year as potentially complementary equity bringing next it We're thinking used mostly think this tuck-in, with expanding about

Operator

of with comes from the Simmons question Our D.A. Davidson. next line Robert

Robert Simmons

CRM uptake So by and it's I'm well. by or ap geography? those where wondering scaling the for of to app, you great see seeing in so are most kind the vertical

Eliran Glazer

this Eliran. is Robert, Yes,

-- the see like we just. uptake, most do where you asking do you So What mean

Robert Simmons

and strongest the Like seeing where for debt? are adoption customers by you sales

Eliran Glazer

rising. vertical, large in sizes, see It we don't be terms or bar and adoption people continue but of we we to the sizes. grow teams would add enterprise see expanding across CRM hundreds small kind started I across as and and DB, company into with Monday verticals Monday cell features of we of adopting complexity. will definitely, like of more say see terms all In and also more different

obviously, CRM, companies really tech. But have of it's more both we what products kinds terms of right in focused product. industry, on in adopt the this work across and the that of cell management now. wide industry, variety is and that of similar tech nontech, terms Monday companies we is pretty Yes, verticals In to color we saw the really different a see

Robert Simmons

overall? it. Got X then And other at time, same apps the are Okay. launched you those performing how

Roy Mann

repeat you what? for question Can me? the How's

Robert Simmons

you to other there earlier, to launched a X is as How at those had X. but apps bit are the time ramp I expectations? You was your those same yes. performance little starting so far? Or

Eliran Glazer

that that as discontinued bunch have were that launched We called and of Well, really of work We work products Monday but an merge part management. launched. into we of forms and that. Monday Monday we that we marketing, had kind -- Monday had Canvas product Yes. we a have initial we

products they're And nice other a were in forms, of phase. in the have. of but in canvas kind the kind we small initial momentum We that other work of still compared terms see it's to scale products there, their and still

Operator

disconnect. today's questions our Instructions] joining There like all you this would for may you call, thank now [Operator no and now presentation, at concludes today's speakers are us. and time. I further to thank for This

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