Monday.Com Ltd Q2 2022 Earnings Call Transcript

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

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Reporting on a day like monday, I wouldn't expect anything less from monday, so spectacular results, congratulations to the entire team. I had 2 questions. One is with the rebranding around the Work OS and having new functionality focused on the developer, marketer, CRM, et cetera. How are sales cycles changing for the company? And who are the targets you're able to reach out to what budgets are you able to tap into? That's one thing. And second is more of a financial question. You talked about operating efficiencies. And I'm curious how you do that while not sacrificing the growth potential of the company. Thank you so much again. Eran Zinman - monday.com Ltd. - Co-Founder, Co-CEO, & Director Yes. Thanks, Kash. This is Eran. I'll send the first part of your question, and then I'll have it over to Eliran. So first of all, it's not a rebranding. We see this more of an evolution from where we were. So just as a reminder, originally, the platform up until this day is very dynamic and flexible, allows everybody to build anything on top of our Work OS. And then last quarter, we took it a step further and further packaged our product as a CRM product, as a tool for developers, and for marketers. And we saw great momentum in the last quarter just reported that we saw more than 1,000 paying customers using those products in addition to using the work management platform. And this is, again, part of our strategy. We offer the flexible platform. But in addition to that, we help customers onboard with those specific solutions. We see this create better dynamics in terms of our ability to sell to larger enterprises, our ability to land new customers while also offering the flexibility which to grow into once they start using this initial product. So overall, this increase ability to go to market and also land larger customers and offer better solutions for our customers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2022 / 12:30PM, MNDY.OQ - Q2 2022 Monday.Com Ltd Earnings Call

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Perfect. Congrats on a great quarter, guys. I wanted to touch on the enterprise traction. It seems like you're getting really good performance in that 500k cohort, it sounded like I think this was the highest sequential adds that we've seen. Can you just talk about the dynamic that you're seeing there? Is that customers expanding seats? Are those new customers landing at those high ARR metrics? And then I'm curious, as customers do grow with you, is there -- are you starting to see more consolidation of spend on monday across several different software solutions, perhaps and departments as well? Eran Zinman - monday.com Ltd. - Co-Founder, Co-CEO, & Director Yes. Jon, this is Eran. So definitely, we're very focused on our enterprise customer segment, keep seeing great growth there, and we see the momentum increasing over time. So definitely, we see fruits on that investment, and we're committed to continue to invest going forward. We sell that to your question specifically, we do see larger initial deals as a trend. So definitely, that's one trend. I would say that the additional new products that we launched last quarter definitely also make a big impact on those customers, our ability to sell more products over time and expand their usage is definitely another trend that we're seeing. Also in regard to your question about consolidation, I think that -- in addition to what Eliran said with the macro economy, -- we see here a great opportunity for us as a company because a lot of our customers realize that they can do much more with monday as a platform. They might have several use cases, but now they see the potential of the spend on monday throughout many more departments and perhaps consolidate a few different tools under monday. So definitely, we're starting to see this as a trend. So that's also very interesting. It's something we also push in given the macro economy.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Great. Congrats on the great quarter. I wanted to ask you on retention. I know you don't give the fidelity, I guess we know it's been pretty stable over a certain amount. But is there a way to understand qualitatively the directionality of that metric? And how has gross dollar retention been trending in the business?

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Okay. Understood. One follow-up for you, Eliran. Obviously, you said you're seeing some softness in Europe. You said it continues into July. I see the upside to the revenue guidance is a little bit timid versus prior years or prior quarters. Is there -- is it possible to estimate what kind of a macro impact are remodeling at this point? And what other assumptions are you baking into the guidance? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2022 / 12:30PM, MNDY.OQ - Q2 2022 Monday.Com Ltd Earnings Call

Question: Andrew Lodovico DeGasperi - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : I know this has been asked several times on this call. But in terms of the annual guidance, what I just want to make clear is you flagged a weakness in Europe, and you said that you're accounting for that. But are you also accounting for any additional potential weakness in other regions or end markets as part of the guide, the after the year?

Question: Andrew Lodovico DeGasperi - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : And then just one on your pricing strategy. I know you haven't raised prices since 2019. Just curious to know, given the inflationary and wage pressures a lot of companies are facing, are you thinking or are you changing that? Or are you taking a closer look at it? Eran Zinman - monday.com Ltd. - Co-Founder, Co-CEO, & Director Yes, Andrew, this is Eran. So we haven't made any significant changes to our pricing structure. If anything, we always try to make it easier and simpler for our customers. I would say, as we mentioned, we have a big upside with our new Work OS products that offer us the ability to charge a premium over our work management platform while giving this value to our customers. So definitely, this is a big upside that we have also in terms of pricing and engagement and usage. We also see this as a potential to increase the number of seats within accounts. So that's a big upset that we have in terms of pricing. But in regards to our basic price model, we don't expect to see any changes right now. Roy Mann - monday.com Ltd. - Co-Founder, Co-CEO & Director Yes. It's Roy. I would add that given our motion to enterprise, we see a lot more in the percentage of seats which are enterprise within our revenue is growing. So it is not a price increase, but it is like a much more significant portion. Our next question comes from David Hynes of Canaccord.