monday earnings, so good it jumped 20%

monday.com released its Q1’24 earnings today and it’s safe to say that the street likes them as the stock has been hoovering around a 20% jump in share price following the release. So what was so good about them? Let’s dive straight into it.

In my opinion, the earnings were great, they beat top-line, and bottom-line expectations while also giving guidance higher than analysts anticipated. The real reason for the jump in my opinion doesn’t come from the earnings which were great, but there were very little actual surprises, it comes from the fact that the stock was slightly depressed and slightly pushed aside.

So what were the earnings?

monday.com posted adjusted EPS of $0.61 as analysts expected $0.40, that is quite a beat. GAAP EPS came in at $0.14
Revenue came in at $216.91 million, as analysts expected $210.55 million. Another good beat
For Q2 the company expects revenues of $226 million, to $230 million, and for the full year, monday guided for $942 million to $948 million.
When we look at analyst expectations for both periods we see Q2 expectations of $225.6 million and FY24 $936.25 million, so they guided above those expectations as well.

What other things stood out from the earnings report?

Not incredibly much actually, and that’s also the strength of this business. They see their business growing as they expect it to with revenues increasing 30% year-over-year. They see a lingering headwind in the business environment, but still put up the growth rates and beat all expectations. They have explained their path for growth and stick with it. Such things include additional hiring as they want to expand the team by 30% this year.

So which things did stick out?

monday.com did not have a real AI solution as they struggled to find something that truly added value. They have been open about this, but did announce a feature that was in pilot at the last investor day. This has now changed as they released their AI product to their customers. AI has of course been a hot subject so this may have contributed to the large increase. You can see the announcement below.

Another thing that stands out is how the company is able to increase the amount of large customers. See the figure below for the stats on it, but the company continues to go upmarket and land bigger and bigger customers. We can also see how fast mondayDEV and Monday CRM are growing. These are still smaller products which give it enormous growth rates but as monday said during their investor day, these two products are growing as fast, and way faster than the original monday WorkOS platform, which will make sure that monday can stay in that hyper-growth mode for longer.

I apologize for the quality of that last picture, this is how it shows up for me in the shareholder letter, unfortunately.

But these are my highlights for the Q1’24 earnings of monday.com, I am very pleased to see this and that the stock is rebounding as it is the second largest position in my private portfolio, but now the largest in the social media portfolio as it has overtaken PayPal.