Monday.Com Ltd Q3 2021 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 : Congratulations on a spectacular quarter here. Not only did you show solid top line, but you're able to show leverage on the bottom line here as well. All the metrics look fantastic, so congrats. My question is, as you look at '22 and beyond, it looks like when you compare your financial results to the current company with the largest revenue, you're coming up on them very quickly. And so I'm curious to get your thoughts on the competitive landscape. As you especially move upmarket, what is it like? Are you still seeing the wide open space that you did at the time of the IPO and before? Are you seeing the margins and changes in the competitive landscape? And as a result of moving upmarket, I would assume that the prospects and the deal sizes that are afforded to you will start to expand pretty significantly. And so you're going to have to hire more enterprise or the enterprise-class sales people. How does that motion coming along for you guys as you look upon this tremendous option in front of you? Roy Mann - monday.com Ltd. - Co-Founder, Co-CEO & Director Kash, it's Roy. Thank you for the questions. So yes, we see -- as we grow, and you asked like if we see this as a greenfield market. So the answer is like, definitely, yes. We are now only starting to see that companies are asking for Work OS, okay? Up until now, they looked at us for different solutions, but not for the core of like building their own software. That's what they understood after they asked for us. We're starting to see that they are asking it for -- before. So I think that's a really positive momentum in the market, that people are starting to understand this category. Companies are looking for it. So I think we're just like really in the beginning. And obviously, as we grow upmarket, we will have to scale our sales operations and invest a lot more in both marketing and sales and build that as we scale our operation. And yes, that's something we're planning on doing this year, next year. And like it's something we're very bullish about.

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : I want to ask a little bit about the marketplace. You've announced Hootsuite and Semrush building out apps in the marketplace. I think you've talked about launching a payment system into the marketplace at some point. Obviously, that would be huge for your partners there. Just any thoughts around timing and ability to monetize that -- the marketplace as it continues to scale? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 10, 2021 / 1:30PM, MNDY.OQ - Q3 2021 Monday.Com Ltd Earnings Call Eran Zinman - monday.com Ltd. - Co-Founder, Co-CEO, & Director Yes, sure. So this is Eran. So yes, definitely, having the ability to monetize through our marketplace is on the road map going forward. We don't have exact dates, but probably at the beginning of next year, that's kind of the time line. Again, we keep investing into the marketplace, adding a lot of more features. And we've seen those big partners, those also on apps. And overall, we see much more adoption within the marketplace, more asking bills, more users, installing those applications. And we have a lot of features that we plan to add to that marketplace. As I mentioned, it's a very strategic part of how we think about monday as a platform. So we're going to invest heavily into that.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : And congrats on a great quarter, guys. I was particularly impressed with the $50,000 trends. And I'm wondering, as you kind of expand your presence, as brand awareness builds and as you see more upmarket traction, whether the profile of the customers that you're attracting has changed. Obviously, customers are willing to spend more. But I'm wondering if the profile tends to be more, are you starting to see more larger enterprises come in? Or is it too early to see that mix shift in the customer profile at this point?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes, that's very helpful. Very clear. And then I wanted to follow up on Brent's last question there around investments. It sounds like you have big plans for 2022. And I was wondering if you could maybe just touch on the go-to-market investments that you're making right now, particularly in that direct enterprise group. Because we did see a big step-up in R&D expense this quarter. But I think the tick up in sales and marketing was a little bit more modest. So I was wondering if there's any hiring trends that you would point out that maybe are not coming in yet that might come in next year?

Question: Andrew Lodovico DeGasperi - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Berenberg. Just 2 questions, if I may. The first one, at Elevate, you announced the workdocs release. And I was just wondering, how does that stack up, for example, with what Microsoft announced last week at Ignite with Loop? And how would you say -- is this just an indication that Microsoft is also trying to get into the work management space? Eran Zinman - monday.com Ltd. - Co-Founder, Co-CEO, & Director Yes. So this is Eran. Yes, I think Microsoft is definitely looking into this market. And I think kind of the disadvantage is that, that Microsoft is very fragmented. You have many, many tools that can do many things. I think the benefit of having 1 platform, 1 work less, where you can manage all aspects of your work is really a game changer in how users adopt our solution and how they use it. Definitely, over time, we're going to see more kind of companies looking into, I think, those kind of capabilities. But again, I think we're in a very different position in terms of customer adoption. As you can see, just -- since we released workdocs, the adoption and usage on our platform has been really significant. So this really shows that the combination of the other elements of the platform, the board, the views, the dashboard with the workdocs is the true game changer. I think the workdocs, just by themselves, would have made this impact on our users and how people use it.