Monday.com reported its highest quarterly revenue in 2Q24 while improving costs. This left the company on track to end the year with positive EPS for the first time. At the operating profit level, the company also reported a significant improvement. In addition, Monday.com raised its outlook for the full year 2024, all of which is pushing the company's stock up nearly 10% in pre-market trading.
Monday.com quotes in pre-session trading are approaching local maximums. Source: xStation
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile appMonday.com develops software applications worldwide, offering Work OS, a cloud-based operating system for work. The company provides solutions for marketing, CRM, project management, software development and other fields, as well as business development and customer success services. It serves a variety of organizations, including educational and government institutions.
In 2Q24, the company continued its strong revenue momentum, reaching $236.1 million in sales (+34% y/y), beating analysts' consensus by more than 3%. Although the growth rate is down compared to previous years, it still remains at high levels. It looks even better when compared to cost dynamics, which (at the operating level) increased by 24% y/y. Lower cost dynamics allowed the company to achieve the lowest share of costs in total sales in the last 5 quarters, which allowed the company to achieve a record high adjusted operating profit of $38.4 million (+131% y/y).
Strong operating results translated into an increase in adjusted EPS to $0.94 (more than doubling year-over-year profitability) versus consensus estimates of $0.56.
The company has been increasingly acquiring new large customers, and it is in this segment that the number of customers has grown the fastest (+49% y/y). However, it is worth remembering that this is mainly due to the effect of a low base (compared to the total number of customers with more than 10 returning users of 57,203).
Source: Monday.com
Adding to the strong Q2 results, the company also raised expectations for 2024. Monday.com now expects revenue of around $956-961 million (previously $942-948 million) vs. consensus expectations of $947.85 million. At the adjusted operating profit level, the company expects between $100-105 million (+66% y/y).
2Q24 FINANCIAL RESULTS:
- Revenues: $236.1 million (+34% y/y); estimates: $228.9 million
- Adjusted operating profit: $38.4 million (+131.2% y/y); estimates: $20 million
- Adjusted operating profit margin: 16%; (vs 9.5% a year earlier); estimates: 8,7%
- Adjusted EPS $0.94 (vs $0.41 a year earlier); estimates: $0.56
- EPS $0.27 (vs -$0.15 a year earlier), estimates $0.04
- Cash and equivalents $1.29 billion (+30% y/y), estimates $1.28 billion
3Q24 OUTLOOK:
- Revenue: from $243 million to $247 million, a year-on-year increase of 28% to 31%.
- Adjusted operating profit: from $19 million to $23 million and an operating margin of 8% to 9%.
- Free cash flow: from $70 million to $74 million and a free cash flow margin of 29% to 30%.
2024 OUTLOOK:
- Revenue: from $956 million to $961 million, (+31% to 32% y/y)
- Adjusted operating profit: from $100 million to $105 million and operating margin of 10% to 11%.
- Free cash flow: $270 million to $275 million and free cash flow margin of 28% to 29%.
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
