Q3 Earnings Roundup: Monday.com (NASDAQ:MNDY) And The Rest Of The Project Management Software Segment
Let’s dig into the relative performance of Monday.com (NASDAQ:MNDY) and its peers as we unravel the now-completed Q3 project management software earnings season.
The future of work requires teams to collaborate across departments and remote offices. Project management software is both driving this change and benefiting from it. While the trend of collaborative work management has been strong for a while, the Covid pandemic has definitively accelerated the demand for tools that allow work to be done remotely.
The 4 project management software stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was in line.
Luckily, project management software stocks have performed well with share prices up 13.5% on average since the latest earnings results.
Monday.com (NASDAQ:MNDY)
Founded in 2014 and named after the dreaded first day of the work week, Monday.com (NASDAQ:MNDY) is a software-as-a-service platform that helps organizations plan and track work efficiently.
Monday.com reported revenues of $251 million, up 32.7% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and a significant improvement in its net revenue retention rate.
“We are very pleased with our results in Q3, with solid revenue growth and profitability, as well as improving retention trends as we continue to expand to larger customers,” said Eliran Glazer, monday.com CFO.
Monday.com Total Revenue
Monday.com scored the fastest revenue growth and highest full-year guidance raise of the whole group. The company added 194 enterprise customers paying more than $50,000 annually to reach a total of 2,907. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 27.9% since reporting and currently trades at $234.
Founded in 2008 by Facebook’s co-founder Dustin Moskovitz, Asana (NYSE:ASAN) is a cloud-based project management software, where you can plan and assign tasks to employees and monitor and discuss progress of work.
Asana reported revenues of $183.9 million, up 10.4% year on year, outperforming analysts’ expectations by 1.8%. The business had a strong quarter with an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
Asana Total Revenue
The market seems happy with the results as the stock is up 47.3% since reporting. It currently trades at $22.78.
Founded in 2005, Smartsheet (NYSE:SMAR) is a software as a service platform that helps companies plan, manage and report on work.
Smartsheet reported revenues of $286.9 million, up 16.7% year on year, exceeding analysts’ expectations by 1.1%. Still, it was a mixed quarter as it posted a miss of analysts’ billings estimates.
Smartsheet delivered the weakest performance against analyst estimates in the group. The company added 232 enterprise customers paying more than $5,000 annually to reach a total of 20,430. The stock is flat since the results and currently trades at $56.03.
Founded by Australian co-CEOs Mike Cannon-Brookes and Scott Farquhar in 2002, Atlassian (NASDAQ:TEAM) provides software as a service that makes it easier for large teams of software developers to manage projects, especially in software development.
Atlassian reported revenues of $1.19 billion, up 21.5% year on year. This print topped analysts’ expectations by 2.8%. Aside from that, it was a satisfactory quarter as it also recorded a solid beat of analysts’ EBITDA estimates but a miss of analysts’ billings estimates.
Atlassian achieved the biggest analyst estimates beat among its peers. The stock is up 34.8% since reporting and currently trades at $254.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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