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NEW YORK / TEL AVIV–(BUSINESS WIRE)–Nov 10, 2021–
monday.com (NASDAQ: MNDY), a work operating system (Work OS) where organizations of any size can create the tools and processes they need to manage every aspect of their work, today reported financial results for the third quarter of 2021 ended September 30, 2021.
Management Commentary:
“We achieved another strong quarter of top-line growth driven by the continued rapid adoption of our Work OS by new customers along with expansion within our existing customer base,” said monday.com founder and co-CEO, Roy Mann. “Third quarter performance demonstrates that our platform’s unique low-code no-code technology is enabling more organizations to achieve their business goals by accelerating digitization and creating a unified workspace.” said monday.com founder and co-CEO, Eran Zinman.
“In the third quarter we drove strong revenue growth and financial results, and we are also very pleased with our continued upmarket momentum,” said Eliran Glazer, monday.com CFO. “As Enterprise customers adopt our Work OS and realize its value, their usage quickly expands across use cases and departments.”
Third Quarter Fiscal 2021 Financial Highlights:
Recent Business Highlights:
Financial Outlook:
For the fourth quarter of the fiscal year 2021, monday.com currently expects:
For the full year 2021, monday.com currently expects:
Notice of Lock-Up Release Date:
In connection with our initial public offering of ordinary shares (the “IPO”), each of our executive officers and directors and the holders of substantially all our outstanding ordinary shares or securities convertible or exchangeable for ordinary shares as of the IPO entered into lock-up agreements delivered to the underwriters for the IPO that restrict their ability to sell or transfer our ordinary shares.
The lock-up agreements provide that all shares are expected to be released from the lock-up and eligible for immediate sale in the public market at the open of trading on the trading day immediately following the earlier of (i) December 6, 2021 or (ii) the start of the third full trading day after we have publicly furnished our second earnings release on a Form 6-K (the “Reporting Condition”) (subject to trading limitations on shares held by affiliates of the company, continued vesting of any unvested equity awards as of such date and our Insider Trading Compliance Policy).
As this is our second earnings release as a public company, the Reporting Condition has been met. As a result, all shares will become eligible for sale in the public market at the open of trading on November 12, 2021 (subject to trading limitations on shares held by affiliates of the company, continued vesting of any unvested equity awards as of such date and our Insider Trading Compliance Policy).
Non-GAAP Financial Measures:
This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing expenses, non-GAAP research and development expenses, non-GAAP general and administrative expenses, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share and adjusted free cash flow. Certain of these non-GAAP financial measures exclude share-based compensation.
monday.com believes that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to monday.com’s financial condition and results of operations. monday.com management uses these non-GAAP measures to compare monday.com performance to that of prior periods, for trend analysis and for budgeting and planning purposes. monday.com believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing monday.com financial results to the results of other software companies, many of which present similar non-GAAP financial measures to investors. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.
Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in monday.com financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures.
Reconciliation tables of the most directly comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release. monday.com urges investors to review these reconciliation tables and not to rely on any single financial measure to evaluate the monday.com business. Management is not able to forecast GAAP net loss attributable to ordinary shareholders on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting share-based compensation expense, the amounts of which may be significant in future periods.
Definitions of Business Key Performance Indicators
Net Dollar Retention Rate
We calculate Net Dollar Retention Rate as of a period end by starting with the ARR from customers as of the 12 months prior to such period end (“Prior Period ARR”). We then calculate the ARR from these customers as of the current period end (“Current Period ARR”). The calculation of Current Period ARR includes any upsells, contraction and attrition. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the net dollar expansion rate. For the trailing 12-month calculation, we take a weighted average of this calculation of our quarterly Net Dollar Retention Rate for the four quarters ending with the most recent quarter.
Annual Recurring Revenue (“ARR”)
Is defined to mean, as of the measurement date, the annualized value of our customer subscriptions plan assuming that any contract that expires during the next 12 months is renewed on its existing terms.
Forward-Looking Statements:
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook and market positioning. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “outlook,” “guidance,” “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “plan,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond monday.com control. monday.com actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to our ability to predict our revenue and evaluate our business and future prospects; our ability to manage our growth effectively, execute our business plan or maintain high levels of service and customer satisfaction; our ability to achieve and maintain profitability and compete effectively with established companies and new market entrants in a competitive and rapidly changing market; interruptions or performance problems associated with the technology or infrastructure underlying our platform; real or perceived errors, failures, vulnerabilities, or bugs in our Work OS; our ability to attract customers, grow our retention rates, expand usage within organizations and sell subscription plans; our ability to offer high-quality customer support; our ability to effectively develop and expand our direct sales capabilities; our ability to enhance our reputation and market awareness of our Work OS; actions by governments to restrict access to our platform in their countries; our ability to identify and integrate future acquisitions, strategic investments, partnerships or alliances; our ability to attract and retain highly skilled employees; our ability to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies; the market and software categories in which we participate; our ability to ensure that our Work OS interoperates with a variety of software applications that are developed by third parties; the success of our strategic relationships with third parties; privacy, data and cybersecurity incidents or any actual or perceived failure by monday.com to comply with privacy, data protection, information security, consumer privacy, data residency, or telecommunications laws, regulations, government access requests, and obligations; intellectual property disputes; changes in foreign exchange rates; general political or destabilizing events, including war, conflict or acts of terrorism and other factors described in “Risk Factors” in our prospectus for the initial public offering of our ordinary shares filed with the SEC on June, 11, 2021 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended. Further information on potential risks that could affect actual results will be included in the subsequent filings that monday.com makes with the Securities and Exchange Commission from time to time.
Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent monday.com views as of the date of this press release. monday.com anticipates that subsequent events and developments will cause its views to change. monday.com undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. These forward-looking statements should not be relied upon as representing monday.com views as of any date subsequent to the date of this press release.
Earnings Webcast:
monday.com will hold a public webcast at 8:30 a.m. ET today to discuss the results for its third quarter of 2021 and financial outlook. The live call may also be accessed by dialing (877) 311-0436 within the U.S., and (470) 495-9349 internationally. The conference ID is 4571646. The webcast replay and audio download will also be available on our Investor Relations website.
Investor Presentation Details:
An investor presentation providing additional information can be found at http://ir.monday.com.
About monday.com:
The monday.com Work OS is an open platform that democratizes the power of software so organizations can easily build work management tools and software applications to fit their every need. The platform intuitively connects people to processes and systems, empowering teams to excel in every aspect of their work while creating an environment of transparency in business. monday.com has teams in Tel Aviv, New York, San Francisco, Miami, Chicago, London, Kiev, Sydney, Tokyo and Sao Paulo. The platform is fully customizable to suit any business vertical and is currently used by over 127,000 customers across over 200 industries in 190 countries.
Visit us on our LinkedIn, Twitter, Instagram and Facebook .
For more about monday.com please visit our Press Room.
MONDAY.COM LTD
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data; Unaudited)
 
 
Three months ended
September 30,

 
Nine months ended
September 30,

 
 
2021
 
2020
 
2021
 
2020
 
 
 
 
 
 
 
 
 
Revenue
$
83,018
$
42,592
$
212,605
$
110,981
Cost of revenue
 
10,213
 
6,333
 
27,245
 
15,807
Gross profit
 
72,805
 
36,259
 
185,360
 
95,174
Operating expenses:
 
 
 
 
 
 
 
 
Research and development
 
19,875
 
12,620
 
51,727
 
32,052
Sales and marketing
 
67,443
 
57,871
 
191,548
 
134,452
General and administrative
 
14,698
 
6,415
 
36,612
 
17,511
Total operating expenses
 
102,016
 
76,906
 
279,887
 
184,015
Operating loss
 
(29,211)
 
(40,647)
 
(94,527)
 
(88,841)
Financial expense (income), net
 
220
 
(239)
 
985
 
(729)
Loss before income taxes
 
(29,431)
 
(40,408)
 
(95,512)
 
(88,112)
Income taxes (tax benefit)
 
(585)
 
671
 
1,177
 
1,230
Net loss
$
(28,846)
$
(41,079)
$
(96,689)
$
(89,342)
Deemed dividend to preferred shareholders
 

 
(4,717)
 
(8,203)
 
(14,048)
Net loss attributable to ordinary shareholders
$
(28,846)
$
(45,796)
$
(104,892)
$
(103,390)
 
 
 
 
 
 
 
 
 
Net loss per share attributable to ordinary shareholders’, basic and diluted
$
(0.65)
$
(3.74)
$
(4.12)
$
(8.65)
Weighted-average ordinary shares used in calculating net loss per ordinary share, basic and diluted
 
44,267,434
 
12,240,901
 
25,475,893
 
11,952,886
 
 
 
 
 
 
 
 
 
MONDAY.COM LTD
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(U.S. dollars in thousands, except share and per share data; Unaudited)
 
 
 
September 30,
 
December 31,
 
 
2021
 
2020
ASSETS
 
 
 
 
CURRENT ASSETS:
 
 
 
 
Cash and cash equivalents
$
876,220
$
129,814
Short term deposits
 

 
10,000
Accounts receivable, net
 
6,958
 
3,911
Prepaid expenses and other current assets
 
15,402
 
3,898
Total current assets
 
898,580
 
147,623
 
 
 
 
 
Property and equipment, net
 
18,490
 
7,178
Other long-term assets
 
132
 
2,619
Total assets
$
917,202
$
157,420
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ (DEFICIT) EQUITY
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 
Accounts payable
$
22,371
$
25,734
Accrued expenses and other current liabilities
 
64,456
 
22,967
Deferred revenue
 
117,174
 
70,719
Revolving credit facility
 

 
21,016
Total current liabilities
 
204,001
 
140,436
 
 
 
 
 
OTHER LONG-TERM LIABILITIES
 
1,385
 
1,045
Total liabilities
 
205,386
 
141,481
 
 
 
 
 
CONVERTIBLE PREFERRED SHARES
 

 
233,496
SHAREHOLDERS’ (DEFICIT) EQUITY:
 
 
 
 
Other comprehensive income
 
45
 

Share capital and additional paid-in capital
 
1,124,826
 
98,809
Accumulated deficit
 
(413,055)
 
(316,366)
Total shareholders’ equity (deficit)
 
711,816
 
(217,557)
Total liabilities, convertible preferred shares, and shareholders’ equity (deficit)
$
917,202
$
157,420
 
 
 
 
 
MONDAY.COM LTD
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
(U.S. dollars in thousands; Unaudited)
 
 
 
 
Three months ended
 
Nine months ended
 
 
 
September 30,
 
September 30,
 
 
 
2021
 
2020
 
2021
 
2020
 
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net loss
$
(28,846)
$
(41,079)
$
(96,689)
$
(89,342)
 
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
709
 
510
 
1,783
 
1,297
 
Capital loss from sale of property and equipment
 
19
 

 
66
 

 
Share-based compensation
 
19,762
 
9,796
 
51,860
 
26,323
 
Change in accrued interest on revolving credit facility
 
(35)
 
3
 
(16)
 
(15)
 
 
 
 
 
 
 
 
 
 
 
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
 
Accounts receivable, net
 
(2,594)
 
2,686
 
(3,047)
 
380
 
Prepaid expenses and other assets
 
(8,974)
 
(787)
 
(11,032)
 
(2,912)
 
Accounts payable
 
(4,090)
 
8,889
 
(5,093)
 
11,178
 
Accrued expenses and other liabilities
 
12,591
 
5,013
 
18,552
 
8,582
 
Deferred revenue
 
15,251
 
7,729
 
46,455
 
18,286
 
Net cash provided by (used in) operating activities
 
3,793
 
(7,240)
 
2,839
 
(26,223)
 
 
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Purchase of property and equipment
 
(3,023)
 
(502)
 
(8,604)
 
(2,676)
 
Capitalized software development costs
 
(590)
 
(176)
 
(1,748)
 
(535)
 
Proceeds from sale of property and equipment
 
3
 

 
24
 

 
Changes in short-term deposits
 
10,051
 
(2,000)
 
10,000
 
(2,000)
 
Net cash provided by (used in) investing activities
 
6,441
 
(2,678)
 
(328)
 
(5,211)
 
 
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Proceeds from initial public offering and concurrent private placement, net of underwriting discounts and other issuance costs
 
(164)
 

 
735,856
 

 
Proceeds from exercise of share options
 
1,745
 
82
 
3,588
 
329
 
Receipt (repayment) of revolving credit facility, net
 
(21,000)
 

 
(21,000)
 
3,000
 
Receipt of tax advance relating to exercises of share options
 
17,500
 

 
23,523
 

 
Capital lease payments
 
(23)
 
(18)
 
(72)
 
(54)
 
Net cash provided by (used in) financing activities
 
(1,942)
 
64
 
741,895
 
3,275
 
 
 
 
 
 
 
 
 
 
 
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
 
8,292
 
(9,854)
 
744,406
 
(28,159)
 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – Beginning of period
 
867,928
 
153,695
 
131,814
 
172,000
 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – End of period
$
876,220
$
143,841
$
876,220
$
143,841
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEET:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
876,220
$
141,841
$
876,220
$
141,841
 
Restricted cash – Included in other long-term assets
 

 
2,000
 

 
2,000
 
Total cash, cash equivalents, and restricted cash
$
876,220
$
143,841
$
876,220
$
143,841
 
MONDAY.COM LTD
Reconciliation of GAAP to Non-GAAP Financial Information
 
 
Three months ended
September 30,

 
Nine months ended
September 30,

 
 
2021
 
2020
 
2021
 
2020
Reconciliation of gross profit and gross margin
 
 
 
 
 
 
 
 
GAAP gross profit
$
72,805
$
36,259
$
185,360
$
95,174
Share-based compensation
 
2,107
 
843
 
5,471
 
1,745
Non-GAAP gross profit
 
74,912
 
37,102
 
190,831
 
96,919
 
 
 
 
 
 
 
 
 
GAAP gross margin
 
88%
 
85%
 
87%
 
86%
Non-GAAP gross margin
 
90%
 
87%
 
90%
 
87%
 
 
 
 
 
 
 
 
 
Reconciliation of operating expenses
 
 
 
 
 
 
 
 
GAAP research and development
$
19,875
$
12,620
$
51,727
$
32,052
Share-based compensation
 
(5,620)
 
(3,346)
 
(15,225)
 
(9,965)
Non-GAAP research and development
$
14,255
$
9,274
$
36,502
$
22,087
 
 
 
 
 
 
 
 
 
GAAP sales and marketing
$
67,443
$
57,871
$
191,548
$
134,452
Share-based compensation
 
(6,448)
 
(3,183)
 
(16,018)
 
(6,940)
Non-GAAP sales and marketing
$
60,995
$
54,688
$
175,530
$
127,512
 
 
 
 
 
 
 
 
 
 
GAAP general and administrative
$
14.698
$
6,415
$
36,612
$
17,511
Share-based compensation
 
(5,587)
 
(2,424)
 
(15,146)
 
(7,673)
Non-GAAP general and administrative
$
9,111
$
3,991
$
21,466
$
9,838
 
 
 
 
 
 
 
 
 
Reconciliation of operating loss
 
 
 
 
 
 
 
 
GAAP operating loss
$
(29,211)
$
(40,647)
$
(94,527)
$
(88,841)
Share-based compensation
$
19,762
$
9,796
$
51,860
$
26,323
Non-GAAP operating loss
$
(9,449)
$
(30,851)
$
(42,667)
$
(62,518)
GAAP operating margin
 
(35%)
 
(95%)
 
(44%)
 
(80%)
Non-GAAP operating margin
 
(11%)
 
(72%)
 
(20%)
 
(56%)
 
 
 
 
 
 
 
 
 
Reconciliation of net loss
 
 
 
 
 
 
 
 
GAAP net loss
$
(28,846)
$
(41,079)
$
(96,689)
$
(89,342)
Share-based compensation
 
19,762
 
9,796
 
51,860
 
26,323
Tax benefit related to share-based compensation (1)
 
(2,289)
 

 
(2,289)
 

Non-GAAP net loss
$
(11,373)
$
(31,283)
$
(47,118)
$
(63,019)
 
 
 
 
 
 
 
 
 
Reconciliation of net loss attributable to ordinary shareholders
 
 
 
 
 
 
 
 
GAAP net loss attributable to ordinary shareholders
$
(28,846)
$
(45,796)
$
(104,892)
$
(103,390)
Deemed dividend to preferred shareholders
 

 
4,717
 
8,203
 
14,048
Share-based compensation
 
19,762
 
9,796
 
51,860
 
26,323
Tax benefit related to share-based compensation (1)
 
(2,289)
 

 
(2,289)
 

Non-GAAP net loss
$
(11,373)
$
(31,283)
$
(47,118)
$
(63,019)
 
 
 
 
 
 
 
 
 
GAAP net loss per share attributable to ordinary shareholders’, basic and diluted
$
(0.65)
$
(3.74)
$
(4.12)
$
(8.65)
Non-GAAP net loss per share, basic and diluted
$
(0.26)
$
(0.81)
$
(1.07)
$
(1.64)
 
 
 
 
 
 
 
 
 
Reconciliation of basic and diluted weighted average number of shares outstanding
 
 
 
 
 
 
 
 
Weighted average number of ordinary shares outstanding used in computing basic and diluted net loss per share (GAAP)
 
44,267,434
 
12,240,901
 
25,475,893
 
11,952,886
Additional shares giving effect to IPO and concurrent private placement (2)
 

 

 
2,976,397
 

Additional shares giving effect to conversion of convertible preferred shares at the beginning of the period (3)
 

 
26,440,239
 
15,592,962
 
26,440,239
Weighted average number of ordinary shares outstanding used in computing basic and diluted net loss per share (Non-GAAP)
 
44,267,434
 
38,681,140
 
44,045,252
 
38,393,125
(1)
The tax benefits generated from the exercise of the disqualifying disposition of incentive share options were excluded in calculating its non-GAAP net loss and non-GAAP basic and diluted net loss per share. The Company believes that excluding these tax benefits enables investors to see the full effect that excluding share-based compensation expenses had on the operating results.
(2)
Assumes ordinary shares outstanding after accounting for the issuance of 5,037,742 ordinary shares associated with our initial public offering and concurrent private placement at the beginning of the first quarter of 2021 instead of the IPO closing date, June 10, 2021.
(3)
Assumes ordinary shares outstanding after accounting for the automatic conversion of the preferred shares then outstanding into ordinary shares at the beginning of fiscal year.
Reconciliation of net cash provided by operating activities to adjusted free cash flow
 
 
 
 
 
 
Three months ended
September 30,

 
Nine months ended
September 30,

 
 
2021
 
2020
 
2021
 
2020
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
$
3,793
$
(7,240)
$
2,839
$
(26,223)
Purchase of property and equipment
 
(3,023)
 
(502)
 
(8,604)
 
(2,676)
Capitalized software development costs
 
(590)
 
(176)
 
(1,748)
 
(535)
Purchase of property and equipment related to build-out of our new corporate headquarters
 
2,685
 
84
 
7,303
 
609
Adjusted free cash flow
 
2,865
 
(7,834)
 
(210)
 
(28,825)
 
 
 
 
 
 
 
 
 
 
View source version on businesswire.com:https://www.businesswire.com/news/home/20211110005271/en/
CONTACT: Investor Relations:
Byron Stephen
byron@monday.comMedia Relations:
Or Elmaliah
ore@monday.com
KEYWORD: UNITED STATES NORTH AMERICA ISRAEL MIDDLE EAST NEW YORK
INDUSTRY KEYWORD: SEMICONDUCTOR SECURITY SATELLITE PHOTOGRAPHY NANOTECHNOLOGY AUDIO/VIDEO OTHER TECHNOLOGY TELECOMMUNICATIONS SOFTWARE NETWORKS INTERNET HARDWARE ELECTRONIC DESIGN AUTOMATION DATA MANAGEMENT CONSUMER ELECTRONICS VOIP TECHNOLOGY MOBILE/WIRELESS
SOURCE: monday.com
Copyright Business Wire 2021.
PUB: 11/10/2021 07:00 AM/DISC: 11/10/2021 07:02 AM
http://www.businesswire.com/news/home/20211110005271/en
Copyright Business Wire 2021.

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