monday.com Announces Second Quarter 2022 Results

monday.com (NASDAQ: MNDY), a work operating system (Work OS) where organizations of any size can create the tools and processes they need to manage every aspect of their work, today reported financial results for its second quarter ended June 30, 2022. “We are committed to being best-in-class in every one of our products’ categories, and we know we can achieve that with the Work OS.” Management Commentary: “We continue to deliver strong top line growth with revenue growing 75% in the second quarter,” said monday.com founder and co-CEO, Roy Mann. “Our move upmarket continues at an astonishing rate, growing our enterprise customer base to more than 1,000 customers this quarter, while maintaining our best in industry net dollar retention rates.” “As we announced last quarter, we’re evolving into a product suite offering as part of our larger strategy, and we have been impressed by early new customer demand for our products,” said monday.com founder and co-CEO, Eran Zinman. “We are committed to being best-in-class in every one of our products’ categories, and we know we can achieve that with the Work OS.” “We were pleased with our improving operating margins in the second quarter and are committed to improving efficiency,” said Eliran Glazer, monday.com CFO. “Our strategic focus remains in balancing healthy investment in the business with improving efficiency and profitability.” Second Quarter Fiscal 2022 Financial Highlights:

• Revenue was $123.7 million, an increase of 75% year-over-year.
• GAAP operating loss was $46.2 million compared to a loss of $27.5 million in the second quarter of 2021; GAAP operating margin was negative 37% compared to negative 39% in the second quarter of 2021.
• Non-GAAP operating loss was $15.4 million compared to a loss of $9.9 million in the second quarter of 2021; non-GAAP operating margin was negative 12% compared to negative 14% in the second quarter of 2021.
• GAAP net loss per basic and diluted share was $1.01 compared to GAAP net loss per basic and diluted share of $1.67 in the second quarter of 2021; non-GAAP net loss per basic and diluted share was $0.33 compared to non-GAAP net loss per basic and diluted share of $0.26 in the second quarter of 2021.
• Net cash used in operating activities was $14.1 million, with negative $19.3 million of adjusted free cash flow compared to net cash used in operating activities of $0.4 million and negative $1.5 million of adjusted free cash flow in the second quarter of 2021.

Recent Business Highlights:

• Net dollar retention rate was over 125%.
• Net dollar retention rate for customers with more than 10 users was over 135%.
• Net dollar retention rate for customers with more than $50,000 in annual recurring revenue (“ARR”) was over 150%.
• The number of paid customers with more than $50,000 in ARR was 1,160, up 147% from 470 as of June 30, 2021.
• Adoption of new monday Work OS products, including monday sales CRM, monday marketer, monday dev and monday projects, surpassed 1,000 paying accounts within the first two months of products’ release.
• Notable new customer wins or expansions during the quarter included Renault, Savills, Jellysmack, Safras & Cifras and BKP.

Financial Outlook: For the third quarter of the fiscal year 2022, monday.com currently expects:

• Total revenue of $130 million to $131 million, representing year-over-year growth of 57% to 58%.
• Non-GAAP operating loss of $25 million to $24 million and negative operating margin of 19% to 18%.

For the full year 2022, monday.com now expects:

• Total revenue of $498 million to $502 million, representing year-over-year growth of 62% to 63%.
• Non-GAAP operating loss of $112 million to $108 million and negative operating margin of 22% to 21%.

With the recent strengthening of the US dollar, we now expect FX to negatively impact our full year revenue growth estimates by approximately 300 basis points. Given the concerns about the macro economy and the market, we have provided prudent yet achievable forward-looking guidance. It should be noted that we did see some softness in demand in Europe at the end of Q2. And while one month is not enough data to extrapolate a larger trend, we are closely monitoring the demand environment across all areas of our business and will be transparent with our investors about our expectations.