In This Article:
We came across a bullish thesis on monday.com Ltd. (MNDY) on Substack by Rijnberk InvestInsights. In this article, we will summarize the bulls’ thesis on MNDY. monday.com Ltd. (MNDY)'s share was trading at $318.50 as of Feb 14th. MNDY’s trailing and forward P/E were 513.71 and 88.50 respectively according to Yahoo Finance.
A team of software developers gathered around a monitor discussing a new CRM platform.
Monday.com Ltd. has once again demonstrated its strength as a premier enterprise software provider, delivering an outstanding Q4 earnings report that surpassed expectations and reaffirmed its growth trajectory. The company not only exceeded consensus revenue estimates but also provided bullish guidance for 2025, leading to a 26% surge in its stock price. The strong performance has impressed analysts, particularly given the already optimistic forecasts, highlighting Monday’s ability to sustain high growth even in a challenging IT spending environment.
Revenue growth remained exceptional, with Q4 revenue of $268 million, up 32% year-over-year, and full-year revenue of $972 million, marking a 33% annual increase. This consistent performance underscores the continued demand for Monday’s Work OS platform, which is widely recognized as the industry leader in several categories within the Gartner Magic Quadrant. The platform's high level of customizability and user-friendly approach make it a preferred choice for businesses seeking flexible workflow solutions, setting it apart from competitors. Additionally, the company’s strong cross-selling strategy and multi-product expansion have played a crucial role in sustaining this growth.
A key highlight was Monday’s net retention rate, which rose to 112%, the highest since early 2023, signaling success in upselling and expanding user adoption. The company operates on a seat-based pricing model, making it attractive to both small businesses and large enterprises. Notably, its largest customer now has 80,000 seats, a significant increase from the prior year, reflecting high satisfaction and increasing adoption of Monday’s expanding software suite. The company’s push into enterprise sales has paid off, with customers spending over $50,000 in ARR growing 39% year-over-year, while those spending over $100,000 surged 45%.
Alongside its impressive top-line growth, Monday demonstrated strong profitability, achieving a record Q4 gross margin of 89% and expanding operating margins to 14%, a 600-basis-point increase year-over-year. Despite continued investments in R&D and marketing, the company generated $72.7 million in free cash flow for the quarter, with a full-year FCF margin of 30%, positioning it as a "Rule of 60" business. With a strong balance sheet holding $1.41 billion in cash and minimal debt, Monday remains financially robust.