monday.com Reports Q3 2024 with $0.85 EPS, $27.4M GAAP Operating Loss

monday.com (NASDAQ: MNDY) has announced its financial results for the third quarter of fiscal year 2024, showcasing robust performance. The company reported a revenue of $251.0 million, marking a significant increase of 33% compared to the same period last year.

Furthermore, monday.com has reached a milestone of surpassing $1 billion in annual recurring revenue (ARR). However, despite the impressive revenue growth, the company’s GAAP operating loss widened to $27.4 million from a loss of $2.5 million in the third quarter of 2023. The GAAP operating margin was negative 11%, compared to negative 1% a year ago.

However, on a non-GAAP basis, operating income rose to $32.2 million, with a consistent operating margin of 13%, indicating strong underlying business performance. The non-GAAP basic and diluted net income per share were reported at $0.90 and $0.85, respectively, showcasing considerable improvement from the previous year’s figures.monday.com also reported a healthy cash flow position, with net cash provided by operating activities totaling $86.6 million, up from $66.6 million in the prior year.

Free cash flow was $82.4 million, an increase from $64.9 million, reflecting the company’s efficient cash management and operational efficiency.

monday.com Beats EPS and Revenue Forecasts for Third Quarter

The third quarter results of monday.com exceeded market expectations, particularly in terms of revenue and earnings per share (EPS). Analysts had anticipated an EPS of $0.63 and revenue of $246.17 million. However, the company outperformed these predictions, delivering a non-GAAP EPS of $0.90 and revenue of $251.0 million.

This performance underscores the company’s ability to capitalize on market opportunities and execute its growth strategy effectively. The strong revenue growth was driven by an increase in the number of paid customers and an impressive net dollar retention rate of 111%. The company saw a notable rise in customers with more than $50,000 and $100,000 in ARR, growing by 40% and 44%, respectively.

This expansion in high-value customers reflects monday.com’s success in scaling its solutions to meet the needs of larger enterprises. Despite the positive revenue and EPS figures, the widening GAAP operating loss suggests that monday.com is investing heavily in its growth initiatives, which may impact short-term profitability. The company continues to focus on expanding its market presence and enhancing its product offerings, which could yield long-term benefits.

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monday.com Expects Fourth Quarter Revenue Between $260M – $262M

monday.com has provided optimistic guidance for the fourth quarter and the full fiscal year 2024. For the fourth quarter, the company expects revenue to range between $260 million and $262 million, representing year-over-year growth of 28% to 29%. Non-GAAP operating income is projected to be between $29 million and $31 million, with an operating margin of 11% to 12%.

Free cash flow is anticipated to be in the range of $63 million to $66 million, with a free cash flow margin of 24% to 25%.For the full year 2024, monday.com forecasts total revenue of $964 million to $966 million, reflecting approximately 32% growth from the previous year.

The company also expects non-GAAP operating income to be between $121 million and $123 million, with an operating margin of 12% to 13%. Free cash flow is projected to be between $286 million and $289 million, with a margin of approximately 30%.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.