Thank you for standing by, and welcome to the monday.com Q3 fiscal 2021 earnings conference call. At this time, all participants are on a listen only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question at that time, please press star then one on your touchtone telephone. As a reminder, today's conference call is being recorded. I would now like to turn the call over to your host, Mr. Byron Stephen, Investor Relations Director. Please go ahead, sir.
Thank you. Good day, everyone, and welcome to monday.com's third quarter 2021 earnings conference call. Joining me today are Roy Mann and Eran Zinman, Co-CEOs of monday.com, and Eliran Glazer, monday.com's CFO. Earlier today, we released our results for the third quarter. Our earnings materials are available on our investor relations website at ir.monday.com. There you'll find the investor presentation that accompanies our prepared remarks and a replay of today's webcast under the news and events section. Certain statements made on the call today may be forward-looking statements which reflect management's best judgment based on currently available information. These statements involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our earnings release for more information on the specific factors that could cause actual results to differ materially from our forward-looking statements. Additionally, non-GAAP financial measures may be discussed on the call.
Reconciliations to the most directly comparable GAAP financial measures are available in our earnings release and the earnings presentation for today's call, which is posted on our investor relations website. With that, let me turn the call over to Roy.
Thank you, Byron, and welcome to the monday.com team. Thank you everyone for joining us today. During our first earnings call, we were thrilled to introduce many of you to monday.com and to share with you our thoughts on the company and the larger opportunity ahead of us. Going forward, we will focus these calls on our most recent performance and our future expectations. We invite those of you who are still just getting to know monday.com and our WorkOS platform to visit our company and investor relations websites, where we have many videos and a lot of other content that should be helpful to understanding our company and our business. Now let me briefly talk to you about Q3, which was another strong quarter of growth. Even more organizations used monday.com to create software that fits their needs.
Revenue grew 95% year-over-year to $83 million as we continue to drive growth through the acquisition of new customers and increase adoption and expansion within our existing customer base. As mentioned previously, upmarket growth is one of our top priorities. I'm pleased to report that our expansion into the enterprise space continues to gain momentum. We ended the third quarter with 613 enterprise customers, up 231% from 185 in the third quarter of 2020. Additionally, we continue to expand within our existing customer base. Our net dollar retention rate increased in the third quarter as a result of our ability to continue to deliver strong ROI and great customer experience.
Net dollar retention for customers with more than 10 users improved to over 130%, and our net dollar retention rate for all customers improved to over 115%. As a reminder, our net dollar retention rate is a trailing four-quarter weighted average calculation. Because of these outstanding results and our continued upward trajectory, we are raising guidance for the remainder of the year. For full year revenue, we are increasing guidance to a range of $300 million-$301 million, representing 86% growth for the year. Eliran will provide you with more details on our third quarter results along with full updated guidance. I'll now turn it over to Eran to give you some further highlights from Q3.
Thank you, Roy. As we continue to take our product innovation to new heights, we give our customers more capabilities to easily build their perfect no-code, low-code work software. In Q3, we experienced a strong start to our new monday workdocs, launched new capabilities with My Work, and introduced one of the first 2D work management apps in the Quest Store at Meta's recent Connect event. Let me first touch on monday workdocs. In Q3, we launched workdocs, giving our customers the ability to manage their work, ideas, and data in an unstructured way. These are more flexible ways to onboard and adopt our platform, adding a new customer entry point. To date, our customers are using monday workdocs for a range of use cases and industries such as marketing, operations, CRM, and more.
More than 40,000 existing customers are already using monday workdocs, with many using monday workdocs for core complex workflows. Since our launch, our customers have created more than 300,000 workdocs on monday.com. It's amazing to see how much our customers love monday workdocs. In line with our mission, we wanted to provide our customer with even more freedom to adjust monday workdocs to their business needs. That's why we launched a capability to create layouts with monday workdocs. Layouts allow customers to create any kind of template with live data for your monday workdocs, such as a CRM contact page, a deal page, a marketing campaign overview, and much more. Our no-code automations and integrations are used by the vast majority of our customers. 100% of our enterprise accounts use them, while 88% use more than 50 different automations.
Over the past year, our customers have automated over 900 million actions using our platform. Starting this quarter, we introduced the dynamic workflow builder, enabling our customers to easily create, without any code, any kind of new automation or integration, no matter how complex they need it to be. Customers can now mix and match actions and triggers without limits on the number of actions and triggers involved. Developers can add their own no-code automations and integrations to create even more applications for our customers. Our dynamic workflow builder will completely take our automations and integration to the next level, giving even more power to customers and developers. We're excited to announce today the launch of My Work, a place for customers and organization to centralize all items, whether it's deals, campaigns, tasks, or anything else associated with their accounts.
This mega table gives individuals within teams the ability to gather customers' data across all business units. We believe My Work is another step in giving organizations the resources to improve operational efficiency and productivity. Let me turn back to Roy to further discuss our expanding ecosystem.
Thanks, Eran. We made steady progress during the quarter in growing our ecosystem and expanding our global footprint. During the third quarter, we signed a new global alliance agreement with Tata Consultancy Services, a leading global IT services, consulting, and business solution organization. TCS and monday.com will work together to innovate digital workflow and automation solutions, transforming workflow collaboration while ensuring regulatory compliance. We have also partnered with Hootsuite and Semrush, who have built apps on the monday marketplace to help deepen the value for customers using monday.com for marketing operations. Partnering with our customers is key to molding our platform future together. Lastly, we expanded our workforce presence with additional offices in Tokyo and São Paulo. We will continue to invest in growing our ecosystem and workforce in order to serve over one billion global knowledge workers.
Now, let me turn it back to Eran to discuss our operating highlights.
Thanks, Roy. We had another outstanding quarter in terms of customer wins and expansions. These were broad-based across industry verticals, with major companies including Jamf, eBay, Cegedim, and Outbrain. Let me speak briefly about Jamf and how their usage of our WorkOS continue to evolve. Jamf is the world leader in Apple enterprise management, helping more than 57,000 companies, schools, and government organizations around the world manage and secure more than 25 million Apple devices. Jamf's marketing team has been using the monday.com WorkOS to increase collaboration and efficiency since 2019. Recently, they've added many more groups, such as product, engineering, project management, and sales enablement to the platform, allowing their 2,000 employees to work more closely together. This is another example of how monday.com can help high-growth global companies, and we're very happy to be part of their growth and success.
Our exceptional third quarter results are further proof that our customers are seeing the value of using our WorkOS. With the platform's no-code capabilities, customers can adapt each building block to build software applications and tools that fit their desired use cases and evolving needs. Creating a great user experience is at the core of how our company operates, which was recently on display at Elevate, our flagship customer conference. At this year's Elevate, we're able to help even more customers reimagine the way that they work with over 52,000 registrants from over 100 countries, over three times the number of registrants from last year. Additionally, we continue to make investments in our people, and leading publications are taking notice.
During the past quarter, monday.com was recognized by Fortune Magazine as one of the best medium workplaces, along with one of the best places to work for millennials. I am extremely proud of our employees and where our company has come in a short amount of time. The opportunity ahead of us is huge. We believe that we are at the intersection of a number of work trends, no-code, low-code, massive digitization, and remote work that positions our WorkOS to become the market leader in our category. I'll now turn it over to Eliran to cover our financials and guidance.
Thank you, Eran, and thank you everyone for joining our call.
Today, I'll review our third quarter fiscal 2021 results in detail and provide updated guidance for the fourth quarter and full year fiscal 2021. We are extremely pleased with the results of the quarter, which demonstrated continued high growth at scale across all fronts. As Roy mentioned, total revenue in the third quarter came in at $83 million, up 95% year-over-year, led by large expansion within our existing customer base and acquisition of new customers. We continued to execute against an ambitious hiring plan. For Q3, we ended the quarter with close to 950 employees globally. This represents an increase of more than 50% from a year ago, with the majority of additions coming from R&D and sales and marketing. We plan to continue to make substantial investment in these categories for the foreseeable future.
For the remainder of the financial metrics disclosed, unless otherwise noted, I will be referencing non-GAAP financial measures. We have provided a reconciliation of GAAP to non-GAAP financials in our earnings release.
Gross margin came in at 90.2%, up from 87.1% in the year ago quarter. Research and development expense was $14.3 million or 17% of revenue compared to 22% in the year ago quarter. We will continue to invest purposely as we position Monday to drive durable growth and win in large addressable markets. While we continue to invest significantly in R&D, the pace of our revenue growth has outpaced the investment growth. Sales and marketing expense was $61 million or 70% of revenue, compared to 128% in the year ago quarter. The improvement was driven primarily by continued efficiencies as we continue to scale our sales and marketing spend to focus on customers with 10+ users and enterprise customers. Similar to R&D, the pace of our revenue growth has outpaced the investment growth.
G&A expense was $9.1 million or 11% of revenue compared to 9% in the year ago quarter, reflecting increased cost of being a public company. Operating loss was $9.4 million, and operating loss margin improved to -11%. Net loss was $11.4 million and loss per share was -$0.26. Moving on to the balance sheet and cash flow. We ended the quarter with approximately $876.2 million in cash and cash equivalents. Net cash provided by operating activities was $3.8 million in the quarter. Adjusted free cash flow was $2.9 million and was driven by strong collections stemming from our continued strong billings.
Adjusted free cash flow is defined as net cash from operating activities, less cash used for property and equipment and capitalized software cost, excluding non-recurring items such as costs related to the build out of our corporate headquarter office in Tel Aviv. Now turning to our outlook for the fourth quarter and the full year 2021. For the fourth quarter of fiscal year 2021, we expect our revenue to be in the range of $87 million-$88 million, representing growth of 74%-75% year-over-year. We expect a non-GAAP operating loss of $23 million-$22 million. For the full year 2021, we are raising guidance and now expect revenue to be in the range of $300 million-$301 million, representing growth of 86%-87% year-over-year.
We expect the full year non-GAAP operating loss of $65 million-$64 million and a negative operating margin of 22%-21%. As our guidance indicates, we expect to end 2021 on a very positive note and enter 2022 with strong momentum. We plan to introduce guidance for 2022 on our next earnings call. With that, now let me turn it over to the operator.
Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star then one on your touchtone telephone. Again, to ask a question, please press star then one. Our first question comes from Kash Rangan of Goldman Sachs. Your line is open.
All right. Thank you very much. Congratulations on a spectacular quarter here. Not only did you show solid top line, but you were 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 2022 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. I'm curious to get your thoughts on the comparative landscape as you especially move up market. 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 in the margins some changes in the comparative landscape?
As a result of moving up market, I would assume that the prospects in the deal sizes that are afforded to you will start to expand pretty significantly, and so you're gonna have to hire more enterprise worthy or enterprise class salespeople. How is that motion coming along for you guys as you look upon this tremendous option in front of you? Thank you so much.
Hi, Kash, it's Roy. Thank you for the question. We see as we grow and you ask like if we see this as a greenfield market. The answer is like, definitely yes. We are now only starting to see that companies are asking for a WorkOS, okay? Up until now, they looked at us for different solutions, but not for the core of like building their own software. You know, that's what they understood after they asked for us. We're starting to see that they are asking it for before. I think that's a really positive momentum in the market that people are starting to understand this category. Companies are looking for it. I think we're just like, really in the beginning.
Obviously, as we grow up market, we will have to scale our sales operation and invest a lot more in both marketing and sales and build that as we scale our operation. Yeah, that's something we're super planning on doing this year, next year. You know, like, it's something we're very bullish about.
Wonderful. Thank you very much.
Thank you. Our next question comes from Ittai Kidron of Oppenheimer. Your line is open.
Thanks, guys. Maybe a couple ones for me. Guys, can you talk about workdocs and My Work seems to be off to a very nice start here. How do you think about the impact of those solutions on your net retention numbers? Then also, Eliran, maybe you could talk about the Israeli shekel, 'cause it's acting quite aggressively. What does it do for your planning and your OpEx as we move into 2022? How far ahead are you hedged, and when and how does it hit?
Yeah. Hi Ittai, this is Eran. I can start with the first part of your question and then I'll hand over to Eliran. As we mentioned in the beginning, we see amazing adoption of workdocs. More than 40,000 accounts are using it. But I think even more importantly, 50% of all docs are being used for what we define as core workflows, meaning that a very important part of how companies manage their day-to-day. This is up-to-date one of our most widely adopted features in such a short amount of time. More than 260,000 workdocs were created since we launched, and it was like a soft launch. You know, looking at all parameters, we see this as a huge success.
It's hard to say how much this will impact net retention because it's still early days but, you know, judging from the adoption and the excitement and the feedback we get from users, I'm sure it has a lot of value to our customers, and it will be reflected in their satisfaction in how they use the platform over time.
Thank you, Eran. Hey, Ittai, it's Eliran. With regards to your question on the shekel and dollar, obviously, this is a challenge for the entire industry in Israel, the ecosystem of the start-up companies. If you think about us from a global perspective, first of all, 50% of our expenses are in dollar, US dollars, if you think about our online marketing spend and payroll outside of Israel. This is hedged by definition. In addition to that, we are doing and using a hedging company in Israel to make sure that we are protecting the budget. Obviously, this year, we took the dollar rate 3.2, and now the shekel is 2.1, but we are trying to proactively hedge against it.
We don't see it as being a big issue due to the cost breakdown. However, this is something that we are very much focused on with regards to the Israeli shekel. On the revenue side, most of our revenue is collected in U.S. dollar, and a small portion is in euro and British pound. We are also looking at hedging strategies to make sure that we're also protecting our top line where possible.
Excellent. Good stuff. Congrats, guys.
Thank you. Our next question comes from Scott Berg, Needham. Your line is open. Please make sure your phone isn't on mute. One moment, please. Our next question comes from Mark Murphy of JP Morgan. Your line is open.
Yes. Thank you very much. I'll add my congrats on a very solid quarter. My first question is curious to what extent you think you're seeing uplift in demand based on a favorable linkage with being able to enable companies to adjust to hybridized workforces. In other words, having employees that will be both remote and in office as the economy start to reopen from the pandemic, just in terms of creating this ability to have better collaboration around projects and deadlines?
Hey, thank you. It's Roy. I think that even during the beginning of the pandemic, we got a lot of reports from customers that it was seamless for them to move to work remotely. I feel we play a big part in helping people organize, companies organize around anything, whether they are in work or you know, work remotely or both. You know, this thing that changes all the time, I think this is the world we live in, that it's going to change. I don't know how it is around the world. In Israel, I can tell you we go back and forth and the system stays stable and you can work with it wherever you are.
Okay. As a follow-up, I was chuckling because I saw another monday.com ad on my browser when I logged in this morning to listen to the call. I think every time I see one of your ads, you know, a couple times a week, I think these advertising campaigns are brilliant and they're fantastic. You know, you had one that had the gorilla or Bigfoot or something like that. They're super creative. We also keep hearing that Apple's deprecation of IDFA is kind of upending that this model of performance advertising, right? Because you might not be able to use cookies or some of these low privacy schemes.
I guess I'm curious, how have you been able to adapt and keep this retargeting going with these ads across our devices and websites? Just how have you been able to successfully navigate that and stay ahead of the curve?
Yeah. Hi, Mark. This is Eran. I can answer that question. I think the changes that you refer to are affecting more B2C companies who rely heavily on advertising through, you know, mobile devices and tracking people across different applications. We're in a different position in terms of how we advertise. First of all, obviously a big part of our budget goes through Google Ads and other services that are more intent based. It's not about tracking people, but seeing people's intent and what they're searching for. And in other platforms such as, you know, Facebook or Instagram, we target mostly what people are interested in and not personal information.
Those changes that you refer to aren't affecting us at all in terms of our ability to target people and find relevant customers on those platforms.
Maybe, Mark, to add to what Eran said, we also have a DPO in the organization that is working very closely with us, and we are looking into all the security issues that with regards to our campaigns. We don't see much of an impact, but I would like also to take the positive of what you said earlier and say that, you know, we continue to invest aggressively in our online campaigns and what you see. This is part of our strategy. One word, you know, we look at Q4 and even next year, this is one of the things that we would like to double down to make sure that you and your friends and your colleagues will continue to see these amazing advertisers as we continue to invest in them.
Great. Thank you very much.
Thank you. Our next question comes from Derrick Wood of Cowen and Company. Your line is open.
Thanks. Very impressive quarter. A couple questions on the inflection in new 50K customers. Is that driven by expansion business, or are you starting to see more net new customers landing in that 50K range? Maybe could you comment on what geographies you're seeing in terms of incremental strength?
Hi there. This is Eran. I would say both. We see our existing customers just to remind us, you know, our model is land and expand. Usually people start using monday organically and scale, and then our sales team pick up those leads and have them scale. We definitely see a lot of benefit from that, and we get more and more customers that are able to scale within our platform. One very interesting trend that we're starting to see as we scale and as we kinda grow our brand is customers who land with higher contracts, people that wanna adopt monday widely within their company and start with larger accounts. My answer would be, you know, both those two trends are what's affecting the growth.
Like Eliran mentioned in the beginning, this is a core, you know, part of our strategy going forward and a big focus for us as a company.
Maybe just to add to Eran, that we land bigger and we see better retention profile. Obviously it impacts all our KPI to the results that you have seen in the press release.
Fantastic. Second question. Interesting to hear you or see you spark a new global alliance with Tata. Can you just talk about how you plan to build on this relationship and, you know, generate new channel leverage and what's the strategy with trying to coalesce other SIs?
Yeah. If I can take this one. Hi, it's Roy. We see partners as a big part of our strategy worldwide. Tata is one of them, and you know, we work with. We have over 100 worldwide of medium size, and we're growing into the large ones. It's amazing. We see a lot of synergies with the existing practices that they have that we can just like integrate into those. It's super exciting.
Thank you very much.
Thank you. Our next question comes from DJ Hynes with Canaccord. Your line is open.
Hey, guys. I'll let go of those. Congrats. Excellent results. I wanted to ask a little bit about the marketplace. You know, you've announced Hootsuite and Semrush, you know, building out apps in the marketplace. I think you've talked about launching a payment system into the marketplace at some point. You know, 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?
This is Eran. Definitely, adding the ability to monetize through our marketplace is on a roadmap going forward. We don't have exact dates, but probably beginning of next year, that's kinda the timeline. Again, we keep investing into the marketplace, adding a lot more features, and we've seen those big partners develop apps. Overall, we see much more adoption within the marketplace, more apps being built, more users installing those applications. 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.com as a platform. We're gonna invest heavily into that.
Yeah. Very helpful. Thank you.
Sure.
Thank you. Our next question comes from Brent Thill. Jefferies, your line is open.
Hi. Thank you. This is Jeff Yan for Brent Thill. I had two questions. First, on workdocs, wondering if you're seeing different use cases compared to the use of boards, you know, whether the same users are using both boards and docs. Just if you can give more detail there. Just a quick housekeeping. On the share lockup that was mentioned in the press release, wondering approximately how many shares maybe released. I think from the F-1, it looked like it was a fairly small amount, but it sounds like it may be more broad-based? Thank you.
Hi, it's Roy. I can take the work docs part. Yeah, we have many users that are builders. Like they build the workflow, and for them it's both. Like they create a board and connect it to a document. Sometimes you create like a whole area of work where you have-
Both integrated. The reason we created workdocs is because we wanted to allow people an unstructured way to start work. We see a lot of people just start with the document. You might write some things, and then you create a board within that doc, okay? It takes off from there. I can tell you that many people do the exact opposite. They have a board, and then they add a document column, and they have a lot of documents within the board, and they manage documents and from the structured way to the unstructured. I think we really saw one of the things we are trying to achieve, which is a multiplication of abilities effect. Like, you add, like seriously, just like one building block, but then it is multiplied by the power of others.
It's really like a really core and amazing addition to the WorkOS.
Hi, this is Eliran. Just to make sure, you were asking about the share count? Just to make sure this is the question.
No, the release of the share lockup that's coming up on Friday?
The release of the share lockup. We are going to do it this Friday, on November 12th. There is going to be the release of the lockup, the expiration.
Is there a rough number of shares that you expect to be eligible for release? I mean, from the F-1, I think we're getting some questions that the numbers look fairly small, but looks like it's broad-based. Thank you.
We can't really tell. Remember we had two gradual releases along the way, so we can't anticipate what would be the number of the release.
Thank you.
Thank you. Our next question comes from Brent Bracelin from Piper Sandler. Your line is open.
Thank you for taking the question here. Impressed to see another quarter of accelerating growth here, gentlemen. I'd be curious to hear how the freemium offering is impacting the land motion, top of funnel build. Are you starting to see any kind of conversions to paid yet? Any color on the freemium offering that iteration that was launched earlier this year would be helpful. Thanks.
Sure. Hi, this is Eran. As we mentioned, you know, it was a very successful launch for us as a company, and we're seeing, you know, no negative impact on the conversion. On the other hand, we see a new type of funnel of free users. I would say that, you know, it's not yet super significant in terms of adding new paying customers because the funnel is very long. What we do see is that it boosts awareness of our brand. We see more people using the platform in absolute numbers because we get a lot of free accounts, individual usage, and we feel that over time, this will create more exposure for our brand.
Conversion rate is steady, so we see that free funnel converting over time, but it's still hard to kinda, you know, forward predict how much impact this will have on our bottom line of the company. Overall, it's a very successful, you know, step in changing our product, and I'm sure it's gonna have a very positive effect on our brand. Over time, we might see more and more paying customers converting from that free funnel.
Yeah. I can also add, it's Roy, that we see the free as a base infrastructure to build more stuff, 'cause if you have that ability to give customers something that they can rely on forever for free, you can offer other stuff that they can tie into, like forms and other things. I think it's a base for us to jump into future products more than anything, and that's why we're super excited about it.
Helpful color there. Eliran, just one quick clarification. You did generate positive free cash flow in the quarter. It's well ahead of a year ahead of schedule there. I guess, how are you thinking about, you know, balancing kinda growth here in cash flow? Do you plan to further accelerate investments? Just how should we think about kinda the nice little surprise here on positive free cash flow this quarter, and how should we think about that going forward?
Well, thank you, Brent. I actually expected this question. Obviously this is a result of the fact that, you know, we had a significant increase in revenue and ARR. Just as a reminder, our business model is paying up front. 70% of the subscribers are paying up front, and 30% are paying monthly. The fact that we had a hyper growth together with a very efficient collection drove this efficiency within our cash flow. Overall, we will continue to operate in accordance with our long-term plan. We don't aim, this is not a target for us to be cash flow positive in the near future or to, you know, to generate cash.
Definitely, we're going to continue to invest aggressively as we talk, you know, we relate to Mark's question earlier on the marketing campaigns and hiring. From our perspective, this is obviously great, but we would like to continue to invest aggressively and make sure that we see this efficiency going further. As a reminder, one more thing that because we generate such a huge capital efficiency of 3x, you know, if you think about every dollar that we burn since inception is, you know, we're getting like $3 in terms of ARR, definitely for us it would be stupid not to continue to invest. This is the direction. We are going to continue to invest aggressively on all fronts.
Yeah. If I can support what Eliran is saying, it's Roy. Then, the plans we have for next year are going to challenge the revenue growth. You know, we can't predict, but we have big plans for next year.
Great to hear. Thanks for the color, guys. Thanks.
Thank you. Our next question comes from Arjun Bhatia of William Blair. Your line is open.
Yes, perfect. Thank you very much. Congrats on a great quarter, guys. I was particularly impressed with the 50K trends. I'm wondering as you kind of expand your presence as brand awareness builds and as you see more up-market 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 if you're starting to see more larger enterprises come in or if it is too early to see that mix shift in the customer profile at this point?
Yes. Sure. As we said, the core focus for our customers is the customers with 10+ users. We see the share of this customer, Arjun, are basically increasing, you know, over time. Their share of ARR and also we land higher. The profile of these customers is definitely contributing to our net dollar retention rate, and growth. In addition to that, we see customers with more than 50K in ARR, growing as well.
The combination of customer of 10 plus users plus, group of them or subgroup of, customers with more than 50K in ARR are becoming the kind, I would say, the bulk of our customers, and this is the customers that we are pursuing as part of our, marketing and sales effort. We expect this trend to continue up. Important to say that we don't neglect the smaller customers because they are basically what later become the bigger customers. Even if we start with, you know, we see the positive of the big customers, it's important for us to have the small one, that later become the big one. If it makes sense to you, Arjun.
Yes. That's very helpful, very clear. Then I wanted to follow up on Brent's last question there around investments. It sounds like you have big plans for 2022. 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. 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?
Definitely we are going to continue to hire aggressively. Just you know, we had a PR in the past. We opened a sales academy in Israel where we had, I think, thousands of registrations, and we only choose a few dozens of them just to make sure that we have the talent. It's not only salespeople, it's customer success and customer success managers because they drove retention and customers, big customers, so this is another place of hire for us. We have big plans to double down on hiring the customer success managers, sales, and you know, this is part of our go-to-market strategy. In addition to that, we would like to continue to invest, as you said, on R&D.
The combination of investment in R&D as well as in sales and customer success alongside the partners. This is, I would say, the main focus of us between next quarter and the following years.
Perfect. Very helpful. Thank you. Congrats again.
Thank you. Our next question comes from Scott Berg, BMO Capital Markets. Your line is open.
Hi, everyone. Thanks for taking my questions, and apologize for the audio issue earlier. Nice quarter. I guess I got two questions here and one revisits I guess a question from a moment ago around enterprise customers. I wanted to ask the question a slightly different way, is as you just look at your lands broadly, whether it's a small customer or a large customer today, are your customers landing with a different seat count on initial sale, kind of on average than, say, maybe a year ago, right as the pandemic was really you know running full force?
Yeah. Thank you. This is Eran. Scott, I think you know, definitely yes, we see a trend where, as I mentioned, you know, a big part of our enterprise strategy is bottom up, but we also seen larger companies starting from a larger deployment within Monday. As we can increase our brand awareness and people are more aware about our solution, we see kinda more companies starting and adopting Monday with larger deployments. I think it's also the fact that we improve our product and make it more enterprise ready and other changes that we make into our platform. Definitely, yes. Again, it's both. Both bottom up and larger accounts deploying. You know, that trend you mentioned, we definitely see it.
Great. Then a follow-up question is, I had heard from a consultant not that long ago on their thoughts that back to the office might actually have a positive impact for vendors in this space, mainly because they start seeing all the antiquated processes even more once they're, you know, in person in an office versus maybe not seeing all the other challenges when they're working at home. Do you think going back to the office can be a trend to help, you know, adopt tools like monday.com or, you know, is maybe that trend just being set from working from home over the last year? Thank you.
Hi, it's Roy. What we saw during like the shift from work to home is that people was struggling to organize things, and so we helped push them to digitize and organize themselves. When they come back, what we see is that, and it might support what you got, is that it's easier to adopt a new tool and to change things when you're together in an office, okay. I think the adoption of new tools are easier when you're together and kinda like doubling down on solutions you already have, kinda is when people are apart, but also adoption, if it helps.
Of course, maybe just to add to Roy. If you think about what happened in the last three years, in the industry, in the sector that we operate, definitely there is a secular tailwind, and there is momentum with digitization, obviously the remote work, the cloud, the use of cloud. This is a long-term trend that we are seeing. You know, so the fact that either with working remotely or going back to the offices, I think this trend will continue and will drive further growth, in the sector in our space.
Fantastic. Thanks for taking my questions.
Thank you. Our next question comes from Andrew DeGasperi of Berenberg Capital Markets, your line is open.
Thanks. Berenberg. Just two 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. How would you say, you know, is this an indication that Microsoft is also trying to get into the work management space?
Yeah. Hi. This is Eran. I think Microsoft is definitely looking into this market and, you know, I think kind of the disadvantage is that, you know, the market is very fragmented. You know, you have many tools that can do many things. I think the benefit of having one platform, one workload where you can manage all aspects of your work is a really game changer in how users adopt our solution and how they use it. Definitely over time, we're gonna see more kind of companies looking into adding 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, you know, the adoption and usage on our platform has been really significant.
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, you know, by themselves, wouldn't make this impact on our users and how people use it.
Thanks. That's helpful. Secondly, separately on the enterprise wins this quarter, can you maybe disclose to us how many seats, so to speak, have the biggest deals landed with? Then, if any of the deals you signed on enterprise were wall to wall, so to speak, or exclusive?
We are seeing thousands of seats that we are landing in and expanding within our existing customer base. We are approaching seven-figure transactions, and hopefully, while it's not a target for us, this is something that we would like to pursue as well. We're seeing constant growth in the number of seats, and, you know, we lend bigger within customers.
Yeah. Correct me if I'm wrong, Eliran, we're not disclosing, like wall to wall or how many accounts, but we definitely see those as well.
Great. Thank you.
Thank you. I'm showing no further questions at this time. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating and have a great day. You may all disconnect.