Monday.Com Ltd at JPMorgan Global Technology, Media and Communications Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Great. I wanted to ask, well, start on a high level, right? Obviously, we are seeing Monday's results have been really impressive in the space, growing in the 50s percent with a run rate kind of approaching $700 million, 100% recurring revenue, generating free cash flow. I guess you'll be profitable on the P&L as well this year, all this in a very competitive kind of market. Roy, maybe I'll start with you. What is kind of the underlying phenomena that is allowing this business to scale rapidly in a profitable way in an uncertain macro environment. Roy Mann - monday.com Ltd. - Co-Founder, Co-CEO & Director Cool, that's like a great question to have for -- Monday has been a platform ever since we started it, meaning that we give people the power to build their own software. And I think it brought us like a lot of stability. We're very broad-based, like we have customers on 200 different verticals, a lot of countries, at all scales of customers, 30% is tech, but 70% is non-tech. So we're very stable across the board. And what we've seen I think in the recent quarter or 2 is how much we are at the core of businesses that they rely on us to run their businesses and especially SMBs. And I think even in a challenging macro environment, we see how much they are dependent on us and rely more on us when they want to be more efficient and when they want to scale. So I think it gives us a lot of stabilities on all fronts, no matter the situation.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Yes. Yes, understood. Roy, one more question on just kind of the long-term aspiration of the company, right? You have kind of dominated the mid-market space with the Work OS platform. You are upgrading your infrastructure to better scale, maybe tap in bigger customers as well. But as you think about, let's say, 5, 10 years from now, right, is your aspiration is to become kind of the de facto standard in the mid-market? Do you want to go chase the biggest customers of the world as well? Do you want to do the entire gamut from the small to the largest customer? Like how do you think about the long-term aspiration that Monday has. Roy Mann - monday.com Ltd. - Co-Founder, Co-CEO & Director So we want -- the short answer is we want it all. And the longer answer is that we've always started from the bottom up. I think it's like a great power we have. We're like easy to use. People love us, and they adopt us on a team level, also in small companies, but also in the enterprise. And then we scale up within those organizations. And the way we scale up will always improve, like we are always adding capabilities, adding more scale, more compliance to scale to larger and larger deals, larger and larger deployments, more complicated solutions. And so instead of doing a journey like many other SaaS companies, where they go upmarket, we want to add up market because we understand the power within the simple adoptions of small teams is critical. It's critical to keep us simple and easy to use and to adopt and it's critical for a mass adoption of the enterprise and the fact that everyone will love using it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 22, 2023 / 6:30PM, MNDY.OQ - Monday.Com Ltd at JPMorgan Global Technology, Media and Communications Conference It's not only a top-down like management solution. And it has to be something people love using on the day to give them value. So it's both great economically, but also a better product in our eyes.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Yes, the platform. Yes, the not hitting the wall or not hitting the ceiling, is another thing that we have heard from customers, which resonated with what you're saying. Now obviously, in one of the discussions that we had actually with one of your customers, somebody said that they're moving off of Zendesk into Monday, which is basically a ticketing workflow, which you don't even have as a productized solution, right? So I want to ask you, is this opportunity of tool consolidation, right, not only within work management, but outside of work management. Is that real today? Are you seeing a lot of these tool consolidation rolling up of spend in favor of Monday? Roy Mann - monday.com Ltd. - Co-Founder, Co-CEO & Director Yes, definitely. And I think it's way more in the SMB side, where we see it as a very solid area within our customer base, mostly because even if they had a tougher time now with the economy, they consolidated on us a lot, and they replace like a lot of very small vertical solutions one might have like over time, like event management or ticketing, like you said, and I don't know, like budget or purchasing software, like a lot of different vertical specific solutions that they can just like build on top of monday. And so they do rely more on us.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : I guess the question is then, right, generative AI as you're saying, it becomes easy to kind of implement and everybody is doing it. Does that become kind of table stakes versus companies trying to differentiate in AI? And does the platform actually gives you an edge versus the others in that case? Roy Mann - monday.com Ltd. - Co-Founder, Co-CEO & Director So I think like the first thing I said is not that obvious, that we will keep using the same tools in a way because that's what's convenient for us, like we're -- I don't think word processing will go away like document editing. It's still very convenient to type things on a computer rather than start talking with someone that will do it for us, okay? So the best place for that is like, I don't know, like in a document editor, right? So I don't think that will go away. But I also think that if someone will build the best document AI editor for, let's say, lawyers, okay, they can't -- they're not going to displace office, okay? Because Microsoft can introduce that as well, like and it'll take them like a very short while, like weeks. So I think you can't really displace players from where they are at. And with their audience, unless you are not adapting it quickly to AI. So I think we have to add it but -- and I -- but I don't see it as a huge advantage for companies that, like will have AI disrupt completely like software that

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : The strategy to open up to third-party developers, right, and to develop on top of your AI kind of framework. Is that mainly aimed for kind of vertical apps that you might not go after kind of expanding the market, maybe legal or something else, right? Is that kind of the way to think about it? Roy Mann - monday.com Ltd. - Co-Founder, Co-CEO & Director Yes. So AI, in general, is -- has to have a layer of [return], right? It's not the software itself, you have to have a suggestive layer somewhere that you kind of talk with AI and have that interaction with it. So what we've done is create that as a platform like everywhere you can embed whatever -- in every place in the system, you can embed whatever you want as a suggestive layer that you can build any one of our applications that is in the marketplace can add their own NI capabilities, what you gave as the document editor is just one example. Another is the board allowing us to build, let's say, organizational consultant AI tool that helps you build your own workflow that we will train from our unique data set of workflows. But everyone can build whatever they have on top of it.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Yes. Yes. Got it. Okay. Pivoting a little bit, let's talk about macro, that's another topic of discussion nowadays. But you recently -- where there was last week, I guess, reported really strong results. I mean how would you kind of sense the business environment at this point? Just talking to customers, what are you seeing? Roy Mann - monday.com Ltd. - Co-Founder, Co-CEO & Director What we see like -- I'll refer to the results, right? Like what we see is like on the downside, just less upgrades, like everything else is very stable. So we don't see the -- we are coming down in the NDR from historical highs of last year where we had a lot of growth within enterprises and large customers who also like saw their growth in seat count. And now that, that's gone -- you see them they are coming down and they're not upgrading like they used to. But in terms of stability and all that stuff, it's very stable, like retention-wise, of the ARR. On the other hand, we see like a very healthy top of funnel demand, like the customers we get that sign up for the platform are -- have like stronger intention because the people who are looking now for solutions obviously want them more than in other economic situations and we get more REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 22, 2023 / 6:30PM, MNDY.OQ - Monday.Com Ltd at JPMorgan Global Technology, Media and Communications Conference market share out of those customers because -- mainly because of our ability to track really well where we put each dollar on performance marketing using our internal BI tool called BigBrain, so we know really how to measure every dollar we spend, how much we get back on every campaign. So it enables us to kind of keep at the same pace and even increase where others are drastically decreased compared to what they did last year. And even if they, like, it will stabilize and maybe their spending will go back up, we will still get more market share than we got last year when the spending was like completely out of return conditions. So the top of funnel is really healthy.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Do you have anything to add around growth, tailwind? Okay. Just checking. One thing I wanted to ask you is I heard that the prior to mondayDB, there was a limit of about 30,000 rows in board, mondayDB expands that to 100,000, apparently the version 1 and with the aspiration to go to 1 million rows. Is that how we should think about kind of the progression? Daniel Leyera So first, we have our current limits. At the beginning, we want mondayDB, the faster boards and dashboards to increase the performance within the existing limits. And later this year, we do want to raise limits. And I think that limits, many times we talk about the number of records. But I think that in monday, what we enable customers to do if the board is super unique in terms of what you can do with each one of these work records, let's say, it's not only the data that you have there, it's the automation, the permissions, it's the connectivity between different boards. Is the REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 22, 2023 / 6:30PM, MNDY.OQ - Monday.Com Ltd at JPMorgan Global Technology, Media and Communications Conference visualization and so many more things. So although we are not in V1 raising our limits, we really feel it actually provides a lot of room to go. And later this year, we're also going to raise the limits and also next year. So it's an ongoing effort. Roy Mann - monday.com Ltd. - Co-Founder, Co-CEO & Director I hope that over time, we'll always say we're like increasing the limits. And like Daniel said, it's like kind of magic. It's not just like a number of rows. It's like the things you can do with them and all the stuff customers can build on top of them that makes us very unique and powerful. So -- and over time, we're going to increase the limits all the time.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Yes. I want to see a few -- if anybody has questions as well. I think we have a mic at the back. So if anybody has questions, please raise your hand and we'll get the mic. Don't see any as of now. So continuing on Work OS. You have started -- you have not opened it up to existing customers. I think last quarter, you said you have opened it up to selected number of customers. Help us understand kind of the opportunity in that existing base. You are pricing some of the Work OS products, I think, a little bit higher than the base product. How to think of the opportunity in the existing base and Eliran, maybe you can talk about how can it impact the net retention at some point? Roy Mann - monday.com Ltd. - Co-Founder, Co-CEO & Director Cool. So we still will refer to the CRM as the Work OS product built on top of the platform and the Work OS platform. So essentially, we are just enable existing customers to start rolling it out. The reason we've done it now is that a lot of our customers have really complex workflows and we REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 22, 2023 / 6:30PM, MNDY.OQ - Monday.Com Ltd at JPMorgan Global Technology, Media and Communications Conference wanted the CRM to grow like a start-up to start like small for us to learn for the organization itself to also learn enough to help those customers. When you go after more, let's say, horizontal solution that is specific like CRM, the customers expect you to understand what CRM is. And we need to train the sales team and learn ourselves. And so like each time we mature, it takes us -- it will take us a while to reach that level of maturity for the larger organization. So we're very conscious about that. And I'm excited to see how we're going to roll it out to existing customers. There is a very strong demand for them that we will do it. And now that we've started, it will be exciting to see that.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : It's a stabilization around 110% and then maybe there's an uptick?

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Okay. Understood. And then you have also launched Dev developers. I think that's out of beta, if I remember that correctly. Talk about that, what is that going up seems? Is it going after something like a Jira or Atlassian products? Like talk about that. And what is kind of the traction or what are you hearing from customers? I know it's very early, but... Daniel Leyera Yes. So first, it's very early for monday dev, but this quarter, we announced it's out of beta. For us, it symbolizes that we have like the initial product market fit and enough value to say that we feel that it's a good solution for different teams that does software development. I think that indeed, in terms of the competition, it's mainly Jira and what we get is an initial feedback, which we found very encouraging is that, first of all, people really enjoy using the product. I think that this is something that is really important for us across all of our products. But I think that specifically for Dev, it's something that could be very meaningful. And another important thing is that I think that also in terms of software development, the world has progressed. And now it's not about just engineers. It's also about the product teams, and it's also about the designers and the data practitioners and so on. And one of the best feedback that we are getting is that with monday Dev, they can connect the work between everyone that are working on the projects, including also the client-facing teams. So support, for instance, getting feedback from tickets and it can be with the sales and the marketing. So it's definitely 2 main values that we see repeating in customers' feedback. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 22, 2023 / 6:30PM, MNDY.OQ - Monday.Com Ltd at JPMorgan Global Technology, Media and Communications Conference

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Profitability.