Why Is Monday.com Stock Trading Lower Monday?

Monday.com Ltd MNDY reported fourth-quarter 2023 revenue growth of 35% Y/Y to $202.57 million, beating the consensus of $197.95 million. 

The project management software company’s adjusted EPS of $0.65 beat the consensus of $0.32. The stock price plunged after the results.

The net dollar retention rate was 110%, with the net dollar retention rate for customers with more than ten users being 115%.

The number of paid customers with over $50,000 in annual recurring revenue (ARR) rose 56% Y/Y to 2,295. The adjusted operating margin was 10%, in line with the fourth quarter of 2022.

In the quarter, MNDY generated net cash from operating activities of $58.51 million, with $55.44 million of free cash flow, compared to $34.08 million and $29.67 million, respectively, a year ago. MNDY held $1.12 billion in cash and equivalents as of December 31, 2023.

CFO Eliran Glazer said, “While economic and geopolitical challenges remain, we are highly confident in our ability to carry this momentum into FY24 and beyond, as we continue to focus on driving top-line growth and building market share.”

Outlook: Monday.com sees first-quarter revenue of $207.00 million – $211.00 million (versus the consensus of $209.31 million) and adjusted operating margin of 4% – 6%.

Monday.com expects 2024 revenue guidance of $926.00 million – $932.00 million, against the consensus of $927.54 million, and an adjusted operating margin of 6% – 7%.

Price Action: MNDY shares are trading lower by 9.76% at $212.90 premarket on the last check Monday.