Monday .com (NASDAQ:MNDY (NASDAQ:MNDY)), an Israeli software as a service company, reported robust third-quarter financial results today, showcasing significant year-over-year growth. The company, known for its team efficiency platforms, announced a 38.2% increase in revenue to $189.2 million, surpassing analyst expectations. The positive earnings report sent the company's stock price up by 9.7%, trading at $154 per share.
The Q3 performance indicates a strong recovery for Monday.com, with a GAAP EPS profit of $0.15 per share, turning around from the previous year's loss. The non-GAAP EPS was even more impressive at $0.64, exceeding analyst projections by a remarkable 212%. This performance reflects the company's growing efficiency and profitability.
A key highlight of the report was the company's free cash flow, which saw a substantial quarter-on-quarter increase of 41.3%, amounting to $64.89 million. This financial metric is crucial as it shows the cash that a company generates after accounting for cash outflows to support operations and maintain capital assets.
Despite these strong figures, Monday.com did experience a slight dip in its net revenue retention rate, which fell from 120% to 115%. This rate is an essential indicator of customer satisfaction and measures how much existing customers are spending compared to the previous year. A rate over 100% suggests that customers are increasing their spending, which is still the case for Monday.com.
The company also reported an uptick in its GAAP gross margin, which rose to 88.5% from 87% compared to Q3 FY2022. CFO Eliran Glazer expressed contentment with these results, indicating confidence in the company's financial health and trajectory.
Monday.com has shown impressive growth since its founding in 2014, particularly as the COVID-19 pandemic increased demand for remote work tools—a trend from which the company has greatly benefited. From Q3 FY2021 to Q3 FY2023, revenue has more than doubled from $83.02 million to $189.2 million.
Looking ahead to the next quarter, Monday.com has set a promising revenue guidance midpoint at $197 million, projecting a 31.4% year-over-year increase.
The company's solid financial position is bolstered by a market cap of $6.76 billion and over $1.05 billion in cash reserves, positioning it well for continued investment in growth.
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