Monday.com tops estimates, registers operating profit for first time
Monday.com tops estimates, registers operating profit for first time
The Israeli software company ended the second quarter with an operating profit of $1.8 million, compared to a loss of $12.2 million in the corresponding period. The company raised its total revenue forecast for 2024 to nearly $1 billion.
Monday.com's stock surged in early trading on Wall Street after the software company posted better-than-expected financial results for the second quarter of 2024.
Monday reported revenues of $236.1 million for the quarter, reflecting a 34% growth compared to the same period last year. This figure is significantly higher than the upper end of the forecasted revenue range of $230 million.
For the first time, the company, which develops software for managing work and projects in organizations, reported an operating profit according to accounting rules (GAAP) of $1.8 million. This compares to a loss of $12.2 million in the same period last year.
Monday's net profit amounted to $14.3 million, or 27 cents per share, compared to a loss of 15 cents per share a year ago. Cash flow from current operations increased to $55.8 million.
Monday continues to show strong customer loyalty, as reflected in a net retention rate of 110%, indicating that the use of Monday's solutions is expanding within its customer base. The company also noted that it signed the largest deal in its history during the past quarter with a multinational healthcare company, involving 80,000 users. Monday continues to increase its presence among organizations, despite a price increase implemented at the beginning of the year.
Following the strong performance in the second quarter, Monday now expects revenues of $243-247 million for the next quarter, representing an increase of 28-31% compared to the same period last year. Cash flow is expected to rise to $70-74 million. Monday also raised its annual forecast, moving closer to the $1 billion annual revenue threshold. The new expectation is for revenues of $956-961 million, reflecting a solid annual growth rate of 31-32%. Operating profit before depreciation and other accounting items is expected to reach $100-105 million, with annual cash flow projected to be $270-275 million.
Three years after its initial public offering (IPO), Monday remains one of the few Israeli companies from the 2021 IPO class that trades above its initial offering value. Although it is still far from its peak valuation at the end of 2021, it is now trading at around $11 billion, having jumped by 20% since the beginning of the year.
