Monday.com Q2 Results Show 42% Revenue Growth, Elevated Customer Retention, AI Assistant Launch

Monday.com Ltd MNDY reported second-quarter (Q2) 2023 revenue growth of 42% Y/Y to $175.7 million, beating the consensus of $169.2 million.

The net dollar retention rate was over 110%, with the net dollar retention rate for customers with more than ten users being over 120%.

The number of paid customers with over $50,000 in annual recurring revenue (ARR) rose 63% Y/Y to 1,892.

The non-GAAP operating margin was 9% versus (12)% a year back.

Non-GAAP EPS of $0.41 beat the consensus of 14 cents.

In Q2, MNDY generated net cash from operating activities of $47.6 million, with $45.9 million of free cash flow, compared to net cash used of -$14.1 million and negative $19.3 million of free cash flow a year ago.

MNDY held $989.4 million in cash and equivalents.

Monday.com founder and co-CEO Roy Mann noted that the first phase of mondayDB marks "a significant transformation" and provides customers with faster boards. Future releases will provide even more speed and scalability improvements, he added.

The Israel-based company is also "excited about the opportunities" ahead with artificial intelligence (AI), Mann said, noting the launch of Monday.com's AI Assistant. 

Outlook: Monday.com sees Q3 revenue of $181 million-$183 million (versus the consensus of $179.36 million) and adjusted operating income of $4 million-$6 million, with a 2% - 3% margin.

Monday.com raised 2023 revenue guidance to $713 million-$717 million (prior $702 million - $706 million) and consensus: $704.7 million.

The company now expects an adjusted operating income of $24 million-$28 million (prior $8 million-$12 million), with an operating margin of 3%-4% (prior approximately 1%).

Price Action: MNDY shares are trading higher by 4.59% at $163.00 in the premarket on the last check Monday.

Image: Monday.com