Good morning, and welcome to Monday.com Investor Day. I'm Byron Stephen, Director of Investor Relations at Monday.com. As our first Investor Day as a public company, we are delighted to have you join us today as we delve into the world of Monday.com. This event serves as an opportunity for us to connect with you, our valued investors and analysts, and provide an in-depth look into our company's progress, achievements, and future prospects. Many of you might think of Monday.com as a project management tool, but we are so much more. We are doing something different at Monday.com.
This morning, you will hear that Monday.com is built differently than our competitors, which has resulted in a strong track record of success, and that we have a massive opportunity of future growth, profitability, and cash generation ahead of us, all of which creates massive value for you as an investor. As a reminder, our Investor Day is part of the larger Elevate User Conference. For those of you in person, we invite you to attend our afternoon session, where we'll go deep into our product roadmap, demo a few of our product offerings, and hear from our customers on how they are using Monday.com. For those of you joining online, there will be an online Elevate conference on December fourteenth that we invite you to attend as well.
Before we begin, let me remind you that certain statements that we make during the presentation today will be forward-looking statements, which reflect management's best judgment based on the currently available information. These statements involve risks and uncertainties that may cause actual results to differ from our expectations. The last reminder I have: please make sure you mute your phones and your laptops. Now, with that said, let's get started.
When you think about work, what comes to mind? Whether it's strategizing in the office, tinkering under the hood, or soaring above the clouds, we know there's an easier way to get work done.
Run it up.
That's why at Monday.com, we're reimagining the way people work, and it's been an exciting journey. With over 1,800 employees, 225,000 customers across more than 200 industries, and offices all around the world, we're proudly pioneering the future of work, and we're only just getting started.
Ah, a little bit of respect here. Did it feel like in 2017 you could be 100x bigger? I mean, even though you were growing like we, did you really feel you could be 100x bigger in that amount of time? Six years, right? Is that six years? It's crazy.
What's next? Well, we'll continue to build the Work OS platform, new products, new features, and new possibilities, all with one mission in mind: helping people achieve amazing things, no matter what they're working on, because together, there are no limits. Welcome to the future of work.
Run it up.
Ladies and gentlemen, please welcome to the stage the co-founders and co-CEOs of Monday.com, Roy Mann and Eran Zinman.
Yep. Hey, everybody. It's great to be here. We're very excited for our first Investor Day. Thanks, everybody, for coming. So today we'll tell you a little bit about the company and our vision and strategy, and then later on, we'll do a deep dive into the product, our go-to-market, and finance. Before we start, I wanna take a step back and explain the problem that we're trying to solve as a company. So taking a step back, the reason why we built Monday is that we feel that traditional work software is kind of broken in a way. If you think about it, if you're a business and you wanna buy work software, usually you have two bad options to choose from. You can either buy a rigid, off-the-shelf software. That means usually a software that's designed for SMBs.
It's whether it's a CRM product or a product to manage your dev team or work management, it's usually designed for SMBs. It's usually very rigid. It's built for one purpose. When I say rigid, it means that it's very hard for you to change it as a user, so you end up having to use it in the way that the software vendor created the software. Or if you want something more complex, you can buy enterprise software. I feel the biggest promise of buying enterprise software is the promise that you can do anything with it. But that also presents an issue, because usually, if you wanna customize the software, that will cost you a lot to do it. It's very hard to do it yourself.
You need a third-party vendor to customize the software for you, or you need to hire a team to do it for you in-house. And, you know, ironically, you can end up in a situation where you buy software, you can pay annual fee of $300,000 of license, and then on top of that, you might pay another $700,000 just for the customization. And it doesn't stop there. It's not just the initial cost. Every change you wanna make, you rely on a third party or a team, and then changes become slow. Ultimately, those two options slows you down as a business, and this is what we're exactly trying to solve here at Monday.com. If I'll present Monday.com in one sentence, what is Monday.com? It's a platform that runs the core of your work. And I wanna emphasize two parts of that sentence.
One is platform. So you can see a chart here on the bottom, but from day one, the way we designed Monday.com is to be a true platform. Daniel will talk a lot about this during his session, but the way the platform is built, it's out of building blocks. Everything is customizable. Everything is flexible.... And the way we design it is that you can have products built on top of that. So it, the initial product we had was monday work management, and we recently launched in the last year and a half, monday sales CRM, and monday dev. But as I mentioned, Monday.com is a true platform from day one. And the second part is managing the core of your work.
When we say core, that means what actually runs your business, whether it's managing your sales team, managing the core of your operation, workflows, managing your dev team, whatever it takes to run the core of your business. There's a lot of nice-to-have tools. What we focus on as a company is the core of what makes the company succeed in the long term. This is how we describe monday, and this is the two elements I would emphasize in that sentence.
Cool. So I know we all came here also to talk about a little bit numbers. So, this is kinda like the journey we've had up until now in numbers. So for the first time, we're sharing our ARR, so this is where we'll be estimated by the end of the year, with $835 million, around $835 million of ARR, which is tremendous for the time it took us to get there. Over 2 million active paying customers, which is amazing, and achieving that while being super efficient with the growth we've had, with 25% free cash flow margin and around 7% non-GAAP operating margin. So that's like something I think we'll touch throughout this presentation, how both of them work: fast growth and efficiency.
So, we've also grown our customer base tremendously. We see a very strong top-line demand, even now, like growing the number of customers we have, which is super significant for us, 'cause this is the base of customers that we are growing from. And we're very partially penetrated within many of these companies and always growing bottom up. We also have those customers come from many different industries, very different types of companies, and we're always amazed to see how much they do different things with us. Like, we have construction plans running on Monday, people do clinical trial research, people manage hotels, and we also have customers managing different departments, like all the types of departments, from sales to marketing to finance.
And that's exciting 'cause it allows us to see a lot of how people use the platform in different ways and then learn how to create products from that, and we'll touch on that as well. Our customers also are very distributed globally, which also gives us a lot of stability across different events that happen and as time goes by, and, you know, we have different strategies for different territories, and we invest in that all the time. And that, like, comes through the revenue. We see strong growth with the revenue from those customers over time. And all that while improving efficiency. And this is something we put a lot of emphasis on, as many of you know, and we talk about that a lot, how we operate and grow very efficiently.
We care about that, whether it's like the R&D or how we do performance marketing or how we are allocating everything, and I think that comes through with this graph pretty well.
Yeah. So we've seen some of the numbers and success that we had in the last few years, and now I wanna talk a little bit about how we get there. Like, what are the drivers of our product success? So something that's, for me, is very important to put an emphasis on, is that Monday.com is very unique in how it's built. In a way, it's built like no other software today in the market, and there's three main elements to that. The first one you can see on the left here is that, as I mentioned in the beginning, we are built like a true platform. And that means that we're built out of building blocks, the boards, the dashboards, automations, integrations, dashboards, all that is what we call—it's like... The best way to describe it is like Lego bricks.
You have all those little pieces, and you can combine them and build almost anything in your imagination. And from day one, the way we design our database, the way we design our code, was to think like this, that everything can be changed and will be changed by our users. And this is, like, how we also build products. We take all those building blocks ourselves and combine them into building new products on top of that. So this is the first element. The second element is that we give full control to our customers. So everything that we do in order to customize and build products on top of the platform, we give the same ability to our own customers, so they can change it. They can, they can customize it.
One thing that we always get as feedback from customers is that they never have the concern that they're gonna hit a wall with Monday.com. So they know the tool will be able to scale as their company scale, because they can know they can change it over time. If their organization becomes more complex, they can change the software. If any process is changing within their own company, they can change the software. That give our customers a lot of confidence in how they use Monday.com and how they operate it. And like I said, it's not just about growing the company, it's also changes the company go through. So if there's an org change, they can change the software to fit that.
So I think overall, it says kind of the same message, but we are giving our customers control beyond any other software that's available to them, and we also built in a way that doesn't limit our customers in any way. And I think that what give us the the ability to win on customers and win on deals, and to scale with our customers from small to large enterprises. Another thing that's always been a main principle for us as a company is not just giving that flexibility to our customers, but also to make it very accessible for them. So you can see this chart here on the right, but basically what we always say in the company is that the platform is the product, and the product is the platform.
What this means is that if you wanna customize the software, if you wanna change it, you don't need to go to this admin section that's very complex, nobody knows how it looks like. Only a few people know how to change things within that admin section. Everything that you wanna do in order to change the software is available to you inside the user interface. So if you wanna add a column, there's a plus button inside the board. If you wanna add a new integration, there's a button within the user interface. If you wanna create a new dashboard, everything you wanna do is available to you within the interface. And that's very unique, 'cause usually, in order to customize software, you need to go to a separate user interface. For us, it was always important to make it one experience for our customers.
Most of them don't even realize they customize the software only later, because it's so intuitive and easy to use, and because it's so embedded within the user interface.
Cool. So let's talk a little bit about our multi-product strategy. So, like Eran said, like, we, we put a lot of emphasis on the platform itself, and that's how Monday started, basically as a platform that people can build whatever they want. But over time, we saw that, they demand more, they want, more specific use cases to be in depth, and that's... And I think we are now on the, in a, in a place in the company that we're, transforming, okay? We, we started the year by transforming into a multi-product company, and that has a lot of meaning.
So we have that Work OS platform at the bottom, what Eran talked about, with all those capabilities, and on top of that, we're able to build a thin layer of software, which is very dedicated, allows us to go to market really well and fast and efficient, while being able to build on each one of those areas, best-in-class product, okay? Because of the platform. The platform is something that, like, really puts us really quickly in a really good place within the market. And together with the Work OS products, we have other products, like Work Canvas and WorkF orms, that kinda help customers across all our product suite and kinda enables them to do a lot more with the platform.
So I'd like to share with you some of the growth we've had on two of the products we've released in the last year. One is CRM, and the other is Dev. This is an important graph, an exciting one, and let's try and understand it. So at the bottom, like both graphs, the purple ones are the same, is the Monday.com growth initially. We were, when we were growing in the beginning, one of the fastest SaaS companies out there in the growth we've had. Compared to that, we can see the CRM growth, okay? It's like four times as fast as we grew initially as a company.
And you can see the months at the bottom, this is, like, 15 months, 'cause CRM is more mature than Dev, which has, like, 10 months. And Dev's growth is also phenomenal. It's growing roughly in the same speed that we grew initially as a company. So we're really happy about the demand and the penetration we've been able to have with both products. And we see that we're able to build best-in-class products on top of the monday platform. And with that, I'd like to announce a new product we're launching, monday service. So, this is super exciting, adding another product to our product suite. It's around service, a lot of IT, okay, ITSM, tickets, CSAT, having a portal for employees and outside to handle requests, SLA management, asset management.
But it's also, we call it monday service 'cause it's a lot of, ticket requests within, the company itself, okay? Like, we see a lot of usage around that area from our existing customers. We have, our existing customers on the monday platform, they created... We have, like, 15,000 accounts with 65,000 users that have been using, like, building on their own, this kind of, service, which we're now, committing to the roadmap, building a product on, and we, we feel this will, allow us to, grow it even more and be more entrenched within customers as they demand these, capabilities.... And so we're happy that, this will be our product suite, launch monday service, at the second half, of next year. And it's exciting.
And with that new product, when we look at our TAM, okay, so we're also increasing the TAM for monday service conservatively for where we feel. But also when we're looking at the collective TAM of all of them, we see that within the next few years, it's going to grow significantly as each one of these markets is growing on its own organically. So that's, like, exciting for us to see that we're on all four products, we're on a growing market.
Yeah. Another main growth driver that we have as a company that we talk a lot about is going upmarket. It's been a core focus for us as a company in the last few years, and we're dedicating a lot of resources and effort towards that. Obviously, one result of that, as we kinda constantly report, is the amount of 50K accounts that we serve as a company. We expect to reach 2,200 50K customers by the end of 2023, which presents a tremendous growth, and this is one of our main growth engine as a company going forward. One product that we launched was mondayDB. mondayDB, we talk a lot about this, but it's basically an infrastructure change for us as a company.
It's not a new product. Basically, a change under the hood for our customers. Instead of using the previous version of monday database, we upgraded all of our existing customers to using mondayDB. It offers the same flexibility and customizability that we offered since day one, just on a much larger scale. Larger scale in terms of items and boards, but also faster performance. So, we have a roadmap for mondayDB. We launched the first version in 2023. We now launching version 1.2, and we're committed to continue and release further versions in 2024 and 2025. I would say that something interesting that we look for in 2025 is also presenting consumption premium services around mondayDB.
So basically, as our customers use our database more and more, at some point, we're gonna charge them per usage after they pass a certain limit. Again, we'll figure out the details going forward, but definitely we see, as we roll out mondayDB, that our customers are using more and more of our database and increasing the scale of their accounts. And I would say one, for me and for all of us, one exciting results of all the effort we put into the product, and also mondayDB, is that we managed to land our larger customer yet in the last two months. Yeah, I'm very excited about this. So currently, our larger customer is 25,000 seats.
It's one of the biggest. I would, I wouldn't say just technology companies, but one of the biggest companies in the world. They're using monday for work management, for a variety of use cases across multiple departments. Maybe something that I can share is that, you know, they, they use it to the full extent and perhaps even interested in increasing the seat count. So very successful deployment, very high satisfaction. Judging at what we see at our current customer base and the reactions that we have to our product improvements and mondayDB, I don't think that's gonna be... I, I think there're gonna be a lot more to come going forward. So definitely very exciting, and it feels like we're making a huge step change in our ability to go upmarket.
Of course. So let's talk a little bit about AI. Okay, so I'd really love to share with you our kind of strategy around AI, around the product strategy. And one of the major things we know that really works well for our customers is the power we give them, okay? Like, before, they couldn't do things. Eran talked about that before. Like, they customize things, they can build their own work software, and they feel they have that power. And we thought a lot about: how do we give that power of AI in the same way? Like, you know, I don't know how many of us here in the room have built AI applications, okay? But, like, I fiddled with it, okay, like, with the prompt and with the images and stuff, but, like, really build AI applications, and that's what we're planning.
So if we look at our strategy, okay, of the product, we have three main pillars for AI. One is the AI assistant that we launched before. We talked about it. This part I feel will be augmenting Monday itself, okay? Like the software. It helps you use it better, like formulas, like we have an AI that helps customers build their own board, okay? It's things they did now becomes better, easier, and more, you know, like they feel confident that they do that they get the right results that they want. Okay, so that's one. We have a roadmap for it, and we're going to ever expand on being better with AI in the product itself. The other one is AI automation, and I invite you to Elevate.
I really hope you come, and we show a really cool, I do a really cool demo of that AI, and also of monday bots, so like really a deep dive, so I hope to see you there. And what AI automation means is that we're taking AI, turning it into atomic AI capabilities, very small, understandable capabilities, like taking a text and understanding a sentiment, taking a text, extracting to-dos, or turning it into an image. Like those kind of stuff that is very simple to understand, even for us. And packaging it into any workflow with our already existing platform, okay? With automations, with all the building blocks we have.
So it really is, simple, and when you see the demo, I hope you feel that, like, you can do it if you want to, and build, like, any workflow you want with AI. So that's AI automation. The monday bots is like a step up from the automations, which is very, small atomic capabilities that you gather together. So the bots is a collective, a group of those capabilities that we give around a specific role, like Scrum Master for dev, or a very, let's say, junior or a simple, PM manager that kind of helps you. So we're looking at a lot of roles we can give bots that aid you in the menial work you have around a specific area.
Both of these, AI automation and monday bots, are something I feel we can monetize because it adds an extra value that wasn't there before. It's something that, you know, customer used to do them on their own, and now, they don't. Whereas the monday assistant maybe will be more table stakes in terms of, like, everyone has to improve their software with AI, the UI itself, and those kind of stuff. And also, for each one of them, because we're an open platform, we're creating a special place within the marketplace, okay? That external developer... Like, we've already done that with AI assistant, and so partners build, like, great, great stuff there.
But we're also will allow third party to create a simple AI atomic AI capabilities like I don't know taking sound and turning it into text, and those kind of stuff that will will enrich the marketplace we have. And also with the bots, we'll allow our partners to package entire roles of AI and monetizing them.
Yeah. So let's talk a little bit about the future, our vision, and where we wanna take the company from here. How will we view Monday in five years from now? The way we envision Monday is that we will become the work platform for businesses. I think that already the success we've seen with our packaged products and the platform, our goal eventually is that companies will buy Monday. Will buy Monday for the majority of the departments, and also across the board for everybody within the company. We feel that having this flexible infrastructure and also superior products in each vertical, will allow us to become the go-to solutions, for almost every company, whether it's a tech company or non-tech company.
For me, that represents why Monday, in my opinion, is one of the biggest opportunities in the software market today. The huge TAM that we have, the unique abilities to customize the software, this is the future of software. You know, forget about rigid softwares. Forget about software that costs so much in order to customize. People wanna have control over the software they're using, and therefore, that's, it's one of the biggest opportunities of expanding and penetrating a lot of different verticals within the market. Second, we're gonna continue and expand our product lines. So Roy mentioned that next year we're gonna launch monday service, but that's not gonna be the last product we're gonna launch. We have big plans ahead, additional products.
Like Roy said, the reason why we launched monday service is that tens of thousands of our customers are already using monday today to do it. They want more features, they want depth. There's also a lot of other use cases that we see within our current customer base that will add a lot of value to our customers, so we'll continue and expand that product line. The last part is leveraging our ecosystem. It's not just about our ability to package a platform and build products on top of it, but we're also gonna open it up to every third party, or our partner ecosystem, to package monday the same way that we do.
So think about a huge long tail of use cases that we're not gonna package the platform for, but our community will gonna do it, and that will allow us to penetrate almost any market segment there is. So those are the key, the three core elements of how we kinda envision the future, and what we're gonna focus on as a company going forward. If I have to summarize our session and kinda focus on the five main takeaways that you can take from it is, number one, we are a true platform company, built from day one like this. It allow us to be, to offer great product for our customers, but also do it very efficiently, because building more products on top of it doesn't cost us much. We don't need to rebuild them from scratch every time we do it.
What I've mentioned about mondayDB, it's a strategic project for us. Nobody have built a database like this, which is so customizable for everybody, that allow customers to scale so much, with a flexible infrastructure. So that's a big game changer. When we built mondayDB, it was a huge project, but we wanted to build something stable for the future that will allow our customers to scale, and as our, core product portfolio is growing, and we build more and more market share. So the more product we launch, the more market share we can grab, the deeper we can penetrate, and the larger, companies can use and buy each one of those products. Yeah.
Yeah, and the TAM is growing.
Yeah, it is.
Okay, obviously, as we expand the product suite, our TAM is growing. Like Eran said, with everything we do, we are always thinking how we can expand the go-to-market, reach new audiences and, you know, package the platform in a way that suits every, like, new market needs. And our AI, I think AI, I really believe in, in, in what we're doing, in the strategy. I think we're in a really good place where companies are digitizing, you know, and they come to us to digitize their business, and we are in a great place to introduce AI for them to put it in their workflow, make it actually work for them, make it simple enough for them to actually use it. Yeah, and that's great.
One last thing, before we move on to Daniel to talk about in depth about our product. We have our Elevate event, starting after this one, and during, I would say the first hour and a half are very important because, Roy and myself are gonna talk about 2023, but also, I'm gonna do a demo on stage of monday sales CRM to show you all of the features about the product. Roy will give a demo on stage about AI, and also we're gonna share the roadmap for 2024. So I really highly recommend sticking to that session.
Yeah.
I'll remind you again at the end of Q&A, but,
If it wasn't clear, we really love you to come.
Yeah. All right. So thanks, everybody. Appreciate it. Thank you.
Thank you.
... Great. Thank you, Roy. Thank you, Eran. We've got a lot of things coming up. Obviously, Daniel will be covering the product. We'll have Yoni go over our go-to-market, and we'll have Eliran, who you all are ready to cover our financial numbers, which I'm sure you guys are excited about. Obviously, Roy and Eran talked about a lot of things that we're doing in the product area, be AI, DB, all the products that we're launching and have launched. So I think we're going to bring to the stage what I would say may be the busiest man at Monday.com right now. Daniel Lereya, come on up.
Hi, everyone. I'm very excited to be here today with you, and thanks for joining us. You know, today I'm going to talk about two main things. The first thing we're going to cover is our execution and innovation over the last few years. We'll talk about what stands behind it. The second thing we are going to cover is about the future for the monday Work OS. I want to start on a personal note. I personally believe that speed of execution and the pace of innovation is what sets companies apart. In monday, we've been spending a lot of time and thought over the last few years about how can we build everything towards speed of execution. If you look at the last few years, it's been quite busy.
We added so many new features and capabilities we added to our platform, and also recently launched our Work OS products. And, you know, it's not just the execution, okay? We built a product that people actually love and use extensively on their day-to-day. And I can tell you that, you know, for me, seeing reviews on a work platform that says the word "love" means a lot and gives a huge boost. We also have been recognized by others as leaders in many different categories. So if you look at that execution over the last few years, and let's see what makes it so exceptional. And we'll start with our unique product architecture. So maybe we'll start from the bottom line first.
The unique product architecture that we have actually allows us to add products, the Work OS products, in a very fast pace, in a very efficient way. Let's see why. So it all starts with our platform. You saw the graph, so in over the last 10 years, we invested a lot within our platform. We invested in things that every software needs, like, you know, security, scale, reliability, and much more. But we also added a lot of things that helps other to build software, the building blocks. We have building blocks for capturing data, like the boards and the columns. We have building blocks to visualize data, like the widgets and the dashboards, and we also have logic building blocks with automations and workflows. And I think that Eran and Roy covered it just now, but our platform is unique.
It's not, it's not just, you know, shared infrastructure or shared code, rather, it's actually a product by itself. With the platform alone, customers have built, you know, countless, like, thousands of different use cases on Monday, from across more than 200 different industries and business verticals. And I think that aside from the fact that this alone is something that is quite unique, a platform which is a product by itself and with such, you know, no-code, low-code building blocks and experience where everyone can build software... There's also a bonus for us. We see what our users are building, what they are doing successfully, and then we can take Work OS products that, you know, build the Work OS products that are aimed towards the most successful use cases. And if you think about a Work OS product, it actually a very thin layer above the platform.
It's a thin layer of features which are dedicated to this specific segment or industry. If we'll take CRM, for example, so you'll see deep features around sales pipeline, integrations that are relevant for CRM, and much more. But when our customers use a Work OS product, they actually get a combination of the value from the specific features, and go to market, and the platform together. And due to that, they actually get a very mature product from day one. You saw earlier the graphs of, like, the acceleration and momentum in CRM and Dev. It's many, many, like, the reason behind it, a lot, is the fact that they get the value both of the platform and the specific features that we add. And just as an anecdote, you know, it makes a execution very efficient and fast.
Just as an anecdote, we started monday sales CRM. For the first version, we needed four developers, mainly because all they had to do is specific features for CRM. And of course, since then, it's grown a lot, but this was the first version, and same goes for monday dev. And another important point about products that are built on top of the platform is that every product that we build on top of the platform actually inherits all the advantages that people love about monday. So if you look at reviews on CRM, for instance, and Dev, you won't see specific features. You won't see customers love it because a specific feature or deep feature within the CRM. Rather, they'll say they love the customization abilities, the first time to adopt it, the flexibility, and of course, the ease of use.
So to sum up this part, I think that the way we build things and the way we built our product architecture actually allows us to execute on Work OS products extremely fast, in a very efficient manner, and also it results with products that are superior, because they get all the things that we built till now, compounded, with their value to their customers. Another important point about our Work OS products, and we'll talk about it later, is that these products are deeply connected, and I think that in the future, we'll have a huge advantage when companies will use Work OS products for all aspects of work on top of the Work OS platform. Okay, so we talked about the product, and in order to achieve such, you know, unique architecture, we also have to have, like, unique technology behind it.
Many times in questions that we get post-earnings, we get a lot of questions and a lot of interest about how we built Monday.com, technology-wise. I just want to start, you know, and say that the basis of Monday.com, the technology of Monday.com, is fundamentally different, and I'll try to explain why. If you look on how traditional software is being built, you start... Like, I've built a lot of software during my career, and it usually start when you think about a product, let's say a project management tool, you start with the database, how the data is going to look like, and you start to model it. Let's say, for instance, you need a task table, probably with the assignee and a due date, and more fields on that. You'll have a projects table, and you want to connect them.
But basically, think about it, that you model the database first. Then, you actually build the UI to reflect it. And the result of that is what you know as most software on the planet. It's a rigid software. You can change it, you can change the database, but it usually requires massive efforts. It includes data migrations, and it includes a lot of risk, and it's something that usually only developers or professionals can do. So it takes time. Effectively, you get a rigid application because changes are hard. When we built Monday.com, we thought on this from the other way around.
We said, "What if we can build a UI that anyone with these, what we call building blocks, can actually decide how the structure of the data should look like straight from the UI with no code?" This is actually what you know as the monday interface. Okay? In monday, our users are building the software and using it right in the same place. So in order to achieve that, it basically means that you don't know what the schema is. The technology innovation that we had in monday from day one is what we call the schemaless architecture. It basically means that on the database level, we don't know what our users are going to build. Think about it like tables that are creating dynamically by our users as they add and change the product over time.
So it's basically countless of different dynamically generated schemas that are built on the fly by our users.... Okay, moving on. So we talked about the product, we talked about the technology behind it. Another very important aspect for us is our team and our culture, and it's also something that is geared towards speed of execution. So we have an internal language, internal name for everyone who builds the product at Monday. It's the builders, it's the engineers, it's the product designers, it's the analysts, and of course, each team in Monday that works on the product is a builders team. These teams are multidisciplinary because we want them to be able to take things end to end.
They are very empowered by us to take fast decisions independently, and we keep these teams very small because we feel that this creates the best communication and the best way of work. We need our teams small, but also with great talent density. And with this culture, we actually managed to get a very quick-to-market, efficient, and high-quality execution. And we do that by putting an emphasis on three main things. First is extreme ownership and alignment. You probably know, I worked in many different teams where product and engineering works together. Many times product want to define the problem, then they finished, and now the engineering need to execute, and that doesn't necessarily result in a good end result for the users.
So what we did differently is that for our teams, for the builders teams, we have one KPI, and this create a huge alignment between everyone, and it's important to say this KPI is our customer success. So teams are failing and succeeding together based on the customer's result. Second, we really believe in fast and iterative execution. Why? Because when things are fast and you have lots of iterations, the feedback loop is very short, and with that, you get the shortest path to customer value. Last but not least, we build everything around the builders to be measured by real-world KPIs. We use a lot of data, you'll see in Yoni's section, Big Brain, which is the foundations for our data-driven culture. We connect them to feedback, direct feedback from customers, from any form you can think about it.
So in this example, you can see an engineer in Monday.com, when he works, he gets feedback from reviews, from customers directly, from data in all sorts of ways. And this creates a hunger for impacting the users. Okay, so we'll move to the second part, and I want to talk with you a bit about the future in the next couple of years for the Monday.com's Work OS. And I want to start with our mission, and I can tell you that this mission is with us for many years. We always wanted to drive core aspects of work for every information worker around the world. And this is a very ambitious mission, because we are not letting anyone to any information worker out of it. We want the small customers and the large enterprises.
We want the tech and non-tech, and we want every information worker around the globe. So it's a very ambitious mission, and it will take us time to get there. But I think that over the last two years, we did major step towards that. This is our current product offering, and you all know it. We have the Work OS platform, which is now also powered by mondayDB. On top of that, we have the Work OS products for the main segments, work management, monday sales CRM, and also monday dev. And we have the ecosystem products that augments work across the organization. And if we will start from the bottom line first, in a couple of years, this is our ecosystem of products is going to evolve. Okay? So let's go over it, one by one.
First, we are going to continue and heavily invest on our platform. We're a platform company. As you see, it's the basis for everything that we do. So we are going to continue and add capabilities to the platform, making it more powerful and also making it more mature to address larger customer needs. As for our products and our existing products, we want to deepen our offering, so within each one of our Work OS products, we are going to deepen our offering in many different ways, and I'll explain a bit, how. We're also introducing new products, so Roy and Eran mentioned monday service, and of course, also on the ecosystem, we are going to add more things to support it. You can see the monday knowledge base.
Basically, think about it as a knowledge-based product to manage the knowledge across the organization that is going to connect to every one of the products that we are doing. And, you know, doing this step in the next couple of years has a huge potential for us. Why? First, because we are going to address a bigger TAM. Each Work OS product that we add is actually adding us new customers, also, that didn't use Monday.com before. We are also planning to see bigger and bigger customers as time passes by, as we continue to invest in our platform and mondayDB and making it even more enterprise-grade. And another thing which is very important to us is to see more wall-to-wall deployments. We want to see companies that manage the core aspects of their work on top of the Work OS products, all on the same Work OS.
So how are we going to get there? When we look at our investment map in the product, it basically is around three main pillars. First, it's about our platform, continuing elaborating our platform, adding more capabilities. Second, is our product suite, deepening our offering and adding new products. And third, is the ecosystem. How can we open this platform to make sure that external builders can do everything that we can do as well? So we'll go one by one and show a few highlights for each. On the enterprise front, we cannot start without mentioning mondayDB. So I'll just say in a sentence what mondayDB is. It's actually an underlying data infrastructure that is unique to monday. It's not a product. It's not something that we are going to sell.
Rather, it's the technology that powers our platform and all of our products, and it's built to handle the complex and unique challenges that we have with the schemaless architecture in scale. So we already released the first version of mondayDB for faster load times, and we see bigger boards and bigger dashboards, but more importantly, we see the customers use monday in a different way. This scale actually opens up new use cases and new ways to leverage monday's platform and products. And I'm very honored, you know, and proud of our teams to say that we executed on this very complex project on time and with very high quality. As you can see here, both mondayDB 1.0, which was around faster boards, and also mondayDB 1.1, which is around faster dashboards, were both delivered on time and with very high quality.
These steps were the most meaningful steps we had to take in terms of changing our infrastructure. So it's a very huge thing that is now ahead of us, behind us, and going on further to the next versions of mondayDB, it's more of an iterative work. And the results are amazing. Our customers feel the results. We get it from them directly, which is very satisfying to get. You can see that in the boards, we can see up to 5x performance boost with our most complex and big boards. And also, mondayDB 1.1 with the dashboards, shows amazing results, and the feedbacks from customers are phenomenal. Moving on, so mondayDB is not the only thing that we do in order to support larger organizations.
We also understand that large organizations, as the organization grow, they have unique needs that we need to invest in, and it's a constant work that we are doing along the years, and we are going to continue and invest a lot in it. What's coming next is a few very important things, and these are just highlights. First, we are going to invest a lot in standardization of workflows. Think about our system, it's super flexible, but as an organization grows and wants to align everyone towards the same workflows, you need a set of tools in order to do that. So we're, we're going to introduce the standardization toolkit, which will allow organizations to manage workflows at scale. We are continuing to invest in security.
People store in Monday their most sensitive information, and we are very committed in order to have a best-in-class security position. So we are going to add a lot of features, and you'll see, if you stay to the roadmap, you'll see more details around that as well. Another important thing is permissions. We are constantly adding new layers of permissions, allowing our customers to build any permission model they need, and we actually see it as a building block as well, giving them the power to build any permission model they want in the finest granularity. And last but not least, users management at scale. We have accounts with tens of thousands of users. Managing these users can be a huge challenge, and we want to help administrators to do it with ease.
As Roy mentioned earlier, we are also supercharging our platform with AI, and I'll just share that we are extremely excited about AI because we feel it can bring a lot of benefits to our customers. First, by eliminating repetitive work that they are doing each and every day, but second, also allowing them to do things that otherwise they cannot have, they cannot do. Okay? And last but not least, we see AI can play a significant role in how people are building the software for them. So think about AI that is building boards for you, dashboards, workflows, allowing you to get even more out of Monday. So Roy touched on our main efforts. I won't elaborate it, I won't elaborated much on it, but we have three main tracks that we are going to invest in. First is the AI assistant layer.
Think about it like a layer that is spread across the platform and adds the capability to do, from the small and tedious things, like summarizing text and building the tasks for my next project, all the way for building better setup, for you to work with your team. The second thing is about AI building blocks. We see ourselves in a unique position to help users leverage the AI technology, and we saw it beforehand in the past of monday with the automations. When we introduced automations with plain English, and suddenly we saw people that are non-tech-savvy leverage the power of automations and integrations. We feel we're best positioned to do the same with AI. So think about an atomic blocks of AI, of classifying things, analyzing sentiment, and much, much more, that you can integrate with no code directly in your workflows.
Last but not least, monday bots. monday bots are going to be bots that live within the same user interface, okay? They are going to play with the same rules within the platform and allow everyone to achieve more during the day-to-day work. Okay, let's move on to our products and talk a bit about each one of our products and what are our plans for the couple of years to come. So monday Work Management is actually, you know, our most mature product, and we're proud to be leaders in this market. What's coming next for monday Work Management is a lot more depth. We are going to invest a lot in making project management and professional project management much better within the system with things like portfolio management and resource management.
But we're also going to address top management within big organizations, addressing managers and helping them to manage their companies end-to-end with Monday.com. Think about it from the company's mission, objectives, and key results, all the way down to projects and tasks. We see work management in that sense, as a huge driver for our up-market momentum. As for monday sales CRM, so, you know, we are very excited about monday sales CRM. I think it shows, it has a great momentum, and you can see also, like, we are disclosing the ARR of monday sales CRM. We reached $25 million in ARR, which is amazing.
And I think what we like the most about monday sales CRM is hearing how customers manage to take all of their work, from lead all the way to post-sale projects, and manage it with the flexibility with monday sales CRM and the ease of use. So next, we are going to deepen our capabilities around the sales process, introducing email campaign and sequences. In addition, we are going to launch Customer 360. Think about one place in which you see every interaction with the customer from every tool, and you can act on it with this context in hand, directly from the same place. And also, we are going to continue in elaborating our core and how we manage sales teams with an innovative pipeline management and forecasting that is powered by AI. Moving on to monday dev.
So it's younger than monday sales CRM, but it also has a very good momentum, and I think that's what's special about monday dev, that aside from the flexibility that our users value a lot, they talk a lot about the user experience and the fact that it's a tool that they love to use in the development life cycle. And the fact that we have such a good experience in monday dev attracts also other functions other than engineers. So you can see in monday dev, product managers, designers, people from the client-facing teams, and I think this is a unique advantage that we have, because these are teams that before monday dev, were disjointed. Coming next, we are going to pound on more value to functions like product management with roadmap management and product discovery.
We are also going to elaborate more on the dev side for engineers, continuing to connect developers to their ecosystem with integrations to DevOps tools and many other things around that, and also covering more parts of the development life cycle, like production incident management. Last but not least, monday service. So this is going to be a new product. We are going to launch it late 2024, and I wanted to share with you why we decided to pursue this opportunity. So first, the competitive landscape. We feel that very much like monday Sales CRM, when you need something for internal requests within your organization, you can either have very simple and easy-to-use solutions, which are very rigid, or very complex platforms, which is very hard to customize. And I think this is exactly the place where monday's benefits and advantages shine.
Second, we see that we have a product market fit. We see many of our customers managing requests, not just IT requests. Think about requests from finance, requests from AR, HR, and many other departments within the company. We see many of our customers do it. They do it in scale, and they get very successful results. Last but not least, we see monday service as a good opportunity to penetrate into organizations. It's a company-wide use case, and it's a great way to introduce the monday platform and the products to more companies and more users within each one of our customers. So in the first version, you can expect mainly handling of internal requests within companies from IT to every department. Last but not least, before we wrap up, our ecosystem. So building a marketplace is something that takes time, okay?
It takes time to gain momentum, and this is why we are so excited to see these numbers, okay? With almost 400 different apps on our monday Apps Marketplace, ranging from small product increments all the way to full solutions. And I think that for us, it's important to say that the marketplace is strategic. Connecting to our mission earlier, this is one of the main ways we can address long-term needs of our customers, and making sure they won't hit a wall with anything that they want to do within the monday platform. So we are committed, continuing and investing in our developer experience of building apps on top of the marketplace, but also from the other side, adding capabilities that will allow every organization, also larger organization, to adopt apps into their day-to-day work.
Okay, so it was a lot of content, I know, and we are doing a lot of things. And on this note, I can really... I'm really hoping that you'll stay for Elevate, and, especially for the first part, when we show our detailed roadmap for 2024. We have lots of exciting things ahead. And to sum up, I want to leave you with these key takeaways. So when I think what's special about monday, the first thing is to understand that monday is built in a very unique way. We have a schemaless platform that was built like that from day one, and with a very unique underlying technology. Second is that our platform is enterprise-grade, okay? We invest a lot in it, with more than 10 years of investment, and now also powered by mondayDB.
Having such a platform allows us to pursue different segments within the market with our Work OS products in a very fast and efficient way. For me, you know, the important point of all of this is that these products are products that people really value, they love to use, and these are all products that are best-in-class, mainly because their flexibility. To sum up, I can say that we all feel that we have a very unique opportunity ahead of us, but with that, we also have a great position to capture and execute upon this strategy. Thank you very much.
Great. Thank you, Daniel. I always love Daniel's first slide, where he walks through all the innovation that we have with Monday.com. It is amazing to see how much his team has evolved over just the last few years. One other area that we've seen massive evolution has been our go-to-market. Starting, you know, just a few years ago, we just had only performance marketing, and already now we're into, you know, a robust sales team, a robust partner team, and we've got big plans for the future coming years. To walk you through those plans, let's welcome Yoni Osherov, our Chief Revenue Officer.
Thank you, Byron. Hi, everyone. I'm really happy to be here, and I'd like to discuss with you today, first, the journey that we went through in the last few years, our go-to-market strategy, and also discuss the opportunities and the potential that we have ahead of us. I want to start by sharing the journey we went through. Like Byron said, if you go back five, six years ago, we were solely a performance marketing-driven organization. In 2018, we established our sales and partner organization, but we've also opened up our first local presence here in New York. Fast-forwarding, in 2019, 2020, we kept on coming closer to our customers with offices in London and in Sydney as well.
Earlier this year, we've established our CRO organization, with a purpose to bring together all of the customer-facing groups to make sure that we put the customer at the heart of everything that we do. If we look forward, then we are building an enterprise go-to-market motion, and we'll couple that with the multi-product offering that we have, with an intention to double our ACV in the next few years. So again, looking back to 2018, just for comparison purposes, we were a solely SMB-focused organization. Since then, we've evolved, and we now have a very significant base of both mid-market and a large enterprise customer base. We were also self-serve only because we had no sales or partners organization. Today, that self-serve motion is supported by a very strong sales and partner organization.
And not just having performance marketing, today we have both the land and expand motion that comes from performance marketing, but we've also built a strong B2B marketing organization to support that, so that we can get to a customer from both ends, from the bottom and from the top. And also, just five years ago, our largest account was $50K in ARR. And fast-forwarding to today, we have multiple accounts that are over $1 million, and as you've heard, we just landed our biggest account yet with 25,000 seats. So all of those resulted in a shift in our ARR distribution, from sales and our partner organization contributing less than 30% of ARR, to today, contributing over 60% of ARR. And what that provides us is better retention and stickiness within the organization.
We expect that shift to also continue in the next coming years. So let's talk about our customer base. So like you heard, we are serving 225,000 customers. Those customers come from small businesses, but also come from some of the largest organizations in the world, and we are doing that across 200 industries, from banking, retail, media, insurance, and many, many others. And throughout the last years, we've also opened multiple offices. The intention is to be as close as we can to our customer base and strengthen the relationship that we have with them. We now have 11 offices around the world, and we augment that with a very large partner ecosystem. We have today 210 active channel partners, and then roughly around 2,000 referral partners.
Those partners are distributed globally in all territories we sell to, to make sure that we have coverage all around the globe. So let's talk now about our go-to-market approach. What we are doing is we are combining a best-in-class bottom-up machine, and we couple that together with a top, top-down approach to drive optimal results. So if we deep dive into how that motion works, it all starts with a flywheel motion. So basically, we've built one of the, we believe, the world's best performance marketing engines in the world, and that provides us over 200,000 signups every month. And that's customers from all sizes, from SMB to Fortune 500 companies. But it also provides us with multiple entry points, from team leaders all the way to C-level in those organization.
So the way that it works is that we get those signups, but then we enrich them with data. Think about things like, company size, title, location, and many other parameters that allow us to score those leads, filter them, and then distribute them, either to sales, either to partner, and some will go to a self-serve motion. Once we convert them, our CRO organization is working very hard to drive customer delight, because we want those customers to get significant amount of value and then drive the following expansion with that flywheel motion. So let's take a look at an example of how that works. So this is one of the biggest gaming companies in the world, and they are split into multiple gaming labels.
The way they started with us is they went online, and they bought 5 users in a complete self-serve motion. No one talked to them. Our sales organization identified the opportunity and the logo that they have, and we started to engage with them, and we got in touch with their PMO manager. We landed through him, roughly around 300 users in that account. But what happened next is that after they got the value, they... We got introduction to the other labels, but also to the other departments in that organization. Today, we are used in almost all departments in that company, from marketing, design, services, and operations department, and we expanded to 7,500 users with them and over $1 million of ACV.
What drives this signup motions of over 200,000 signups a month is our marketing organization, but it happens together with Big Brain. Big Brain is our internal BI tool. It's basically the foundation of our data-driven culture. It drives performance marketing efficiency, but also allows us to measure every sales rep productivity and optimize everything we do and really every cent that we spend through Big Brain. So let's take a look at the Big Brain video.
Every decision we make is based on data. We measure everything: every visit, every click, every call, every mention, every failure, and every success.
Where we're spending marketing dollars-
... Clicks, signups-
Amount of customers, net retentions.
So yeah, we collect a lot of data, but for data to be useful, it needs to be analyzed and made accessible. That's why we built-
Big Brain.
A platform that gives every Monday employee access to all the data they need to do their job. It's the one place to see all the data related to each customer, from marketing to sales, to how they actually use the product.
Kind of brilliant. We've got endless dashboards. We've got endless data points. Sort of like the... Your brain turns into a big brain.
Big Brain allows us to understand why things are happening, but it gets crazier. It lets us know what's going to happen. Big Brain actually predicts the future. It calculates a metric we call APC.
Annual Predicted Collection.
Which predicts the next three years of growth from every customer. This way, we know who will stay longer, who will grow bigger, and who will generate more value from our platform.
On a daily basis, we're analyzing our campaigns, monitoring that the ads are working as well as we want them to work, and we only trust our data, knowing where we collected it and how.
With these kinds of tools, our budget is dynamic.
... We'll only spend money if we know it's going to produce results.
Big Brain is also a game changer when it comes to the sales process. It analyzes the productivity of our sales team and let us see their capacity at a glance, so we can move resources to where they are needed most and maximize every opportunity.
Being a data-driven company in every aspect is what makes us win. It's not practice makes perfect, that's only half of it. Data makes perfect.
Great. So, really the thing with Big Brain and what it allows us to do is to make sure that we get consistent return, cash on cash, on every dollar that we spend. And we are getting, in less than 12 months, a return on every cent that we spend in our marketing engine. So moving on to how that evolves. We talked about the bottom up, but what we are doing in the last year and a bit is that we are augmenting that with a top-down motion, targeting VP and C-level within enterprises to really land bigger deals. And we are doing a few things to support that in the last year. One, we've hired top sales reps from strong enterprise companies like Salesforce and others.
We've built a B2B group in our marketing to focus on the targeting those senior executives. And we've also set teams in our sales org to focus on specific vertical offering. And really what it does is, think about it, allowing us to get to every company, both from a bottom up, if we have a few hundred users, that's great, but then also target senior executive and come from both ends to that company. This motion also supported a shift in our revenue mix from new business to expansion. So, just a few years ago, we were at 42% of expansion, and today, expansions are around 70% of our revenue. And it's also helping us become more efficient, because growing an existing customer is way cheaper than acquiring a new one.
But it also led to really rapid growth in the number of 50K accounts that we have, which grew, like you have already seen, to 2,200 accounts. What we are sharing with you for the first time today, and we'll keep on doing that in the following quarters, is our 100K ARR customers. And I'm really happy to share that we'll cross this year, 800 companies that spend with us over 100K, and that's growing even faster than our 50K accounts. So with all of the advancement we've made in product, everything that you've seen, and our go-to-market strategy, we really see a huge untapped opportunity for both customer expansion, cross-sell, and upsell, but as well as pricing adjustments. And we expect that to result in doubling our ACV by 2026.
So we talked about having 225,000 customers, but the reality is that in many of them, we have just some footprint. Many of them are mid-market and enterprise accounts, and we are just scratching the surface in the ability to penetrate them much further. In many of them, we are just at, roughly around, 1%. So it's expansion, both from a user perspective, but also from the ability to sell them additional products like Dev, CRM, and service that will come up later next year. So it's not just the number of users. The release of the multi-product will allow us to sell more value to those existing customers. And I also want to share that we started, in the last quarter, release of multiple add-ons.
So we've released automation pack for customers that need more automations, email and activities, premium support for those customers. Some of those add-ons are priced by volume to make us more diverse and not just be based on user count, which makes us also more resilient. We are already seeing very strong signs from that move. We are growing the accounts with multiple products, as you see in the chart on the left, but those accounts also have an ACV, which is 1.7x the ACV of all other accounts that we have. And I know that in a lot of discussions, we got a lot of questions about pricing adjustment.
So, when we think about it, in the last few years, we've added a lot of value to our customers, a lot of enhancements in the product and in the platform. And we believe that together with current market conditions, plus the competitive landscape, it's time for us to do some pricing adjustment. So we plan to roll out a price uplift to all our existing tiers next year. We'll do it gradually from H2 2024, and we expect a $10 million positive impact from that move in 2024, and a $30 million impact from that move in 2025. This is already baked into our 2024 forecast. So, I'll move on to talk about our future plans. So, there are a few things that we are evaluating at the moment.
We don't expect them to have any significant impact to next year, but they will in the following year. One of them is product-specific pricing. So you sell CRM, Dev, one of the options is to have for each one of them, its own dedicated pricing. And then the second thing we can do is bundle them together into joint offerings, again, with their own pricing. And the last thing, which I touched on the add-ons is that we'll have consumption-based pricing for add-ons, again, trying to not just be based on user count and be more resilient together with that. So I just wanna repeat, all of those are still in the early stages of evaluation, and we don't expect them to have any material impact in 2024. I also wanna take a minute to recognize the importance of our partner ecosystem.
So, we've built a really huge partner ecosystem that's responsible today for 20% of our ARR. But it's not just about ARR, they are also augmenting our capabilities with strategic services that's delivered by some of the world's top system integrators, like KPMG, Accenture, and others. Partners also play a key role in our marketplace strategy, and they are responsible for 8 out of the top 10 apps in the marketplace. But those partners are also building package solutions on top of our platform, which they sell sort of like their own product. So one example would be cloud migration from Tata Consulting or SOC solution by KPMG. And I think that all of that together is providing, one, better delivery, but also more value to our customers. Moving on to talk about customer satisfaction.
So the success of our customers is key to everything we do, and we invest really heavily in that. We have a customer experience group that ensures that customer get immediate response to every issue that they have. We also have a large customer success group to ensure that they get most of the value that they can get from their purchase of Monday. And we also have a professional services organization that, together with the partner ecosystem, ensures successful deployment of Monday. So investing in our customers, combined with the great product, results in us being ranked at the top of all review sites and being recognized as a leader by Gartner and others. So, to wrap up, I wanna leave you with a few key takeaway.
One is that we've built a really strong flywheel model, which we are now augmenting with a top-down sales motion, go-to-market motion. In the last few years, we've also matured upmarket, and we'll continue to see this trend like you've seen in the 50K and 100K accounts that we have. But we also have a massive, massive untapped opportunity, both expanding with our base, but also upselling, cross selling, with multiproducts, and, with together with that and the price adjustments, we expect to double our ACV over the next 3 years. Thank you very much.
Thank you, Yoni. Really exciting to see where the go-to-market is moving to in such a short amount of time. I may take it back. Yoni may be the busiest person at Monday.com, and it may not be Daniel. But obviously a lot of things going on, both with product, with go-to-market. What does that mean to the numbers? So let's bring up our Chief Financial Officer at Monday.com, Eliran Glazer.
Hi, everyone. Byron, you're working for me. I'm the busiest person on the company, so, you know. Anyway, it's great to be here in New York and to see all of you. I'm really excited, by the way, and you know, in the last two hours, you heard Roy and Eran, you heard Yoni, you heard Daniel, and I'm sure you all want to know what it all means in terms of the numbers going forward, and you're waiting for the model, and we'll get there very shortly, I promise you. But before that, I really want to say that I'm, you know, I'm proud of what we achieved as Monday. Just 2.5 years ago, we went public, and there were a lot of companies going public, and, you know, it was growth at all cost, and everybody had all these terminologies.
We, from day one, we said we're going to be looking at sustainable growth, and it was important for us. So I'm proud of what we have accomplished over the last 2.5 years, despite of macroeconomic headwinds, which were a lot of challenges. The world has changed a lot over the last 2.5 years, and I'm proud to be here and to share that we actually delivered on our promises. Not many companies, you know, there are many companies out there, but very few delivers on our promises, and this is what gives me confidence that we are going to continue to deliver going forward. So, you know, there are investors here, there are analysts that covers Monday.com. Why on Monday.com? What's so unique about Monday.com? You know, we heard about it.
So three main growth drivers that I would like to emphasize to you. One is the innovation, innovation that Daniel spoke about, and, and Eran and Roy is in the core of everything that we are doing, and it expands our market share, and it will continue to drive durable growth and a tremendous opportunity in front of us. The second thing is the combination of the strength of the platform together with the large and diversified customer base, we have 225,000 customers, will deliver value. And the third thing that we have is we have a track record of delivering strong execution with a great efficiency, and this is also taking into account everything that we are doing, like Big Brain.
When you think about the number of customers that we have, we already spoke about the 225,000 customers, but across all segments, from SMBs, mid-market, and enterprise journey. When you think about SMBs, one of the questions that I'm getting a lot is: Don't you see some slowdown in SMBs? What's going on with SMBs? For us, top-of-funnel activity remained very strong. We see a lot of healthy new customers coming to our platform. Imagine that, 40,000 new customers between 2022 and 2023. If you look at the track record of where we were, it's even more than what we did the year before in a time that is quite challenging... The customers that land on Monday have a journey with us.
So if we go back to pre-2017, they are landing with Monday, they are expanding with Monday, and we offer them a lot of alternative. They land maybe in a use case of work management, they can expand with CRM, they can expand, expand with dev, but they can also buy more seats and more use cases. Basically, we deliver to them everything they need in order to run the core of their business. And you see also that the bigger we are, customers that land with us land bigger and expand faster. And, you know, we spoke about a lot, and this is a question that I'm getting a lot as a CFO of Monday: what about the journey up market? What about your enterprise account? So today we announced the 25%...
Sorry, the 25,000 seats, but when you look from left to right, from left to right on the graph, you can see that, you know, the share of ARR from customers who are enterprise customers went up from 5% in 2019 to 30% of total ARR in 2023, and it will continue to grow. Also, the, the business model of Monday.com also went through a transformation. We used to be, you know, we have monthly subscribers, and we have annual subscribers, and there was a shift in the business. Now, more than 80% of our contracts is annual subscription, which also definitely helped our cash flow. And the third thing is also the size of the organization.
You know, there are many companies out there that are considered to be enterprise or the bigger enterprise, and they are just- we are just scratching the surface with them because we are, you know, penetrated only in few thousand seats, but the opportunity there to continue the journey up market is very significant. And I would like to remind you as well, that a very large, or the majority of our customers are non-tech, are basically non the technology company out there. There are non-technology companies that are using Monday and taking advantage of the ease of use, the capabilities, the functionalities, and the strength of the product and the platform, and none of them is a coding savvy guy. There are many that are using it, and this is something that works for the benefit of Monday.
Now, another question that we keep getting, and I think this is something that is important to the investors, is net dollar retention rate. Just as a reminder, our net dollar retention rate is a weighted average of the last four quarters. As we went through a transition that Yoni spoke about, from a performance marketing company into a sales-led organization as well, we went through a hockey stick when we moved from the performance marketing. We saw all-time highs in terms of net dollar retention rate. We went to 140, 150s, but then I think the normalized number that we are looking at is between 110-120, and we were very consistent with this message.
I believe that when you think about the future, we are going to look at all customers around 110, as we can see here. Potentially, when we gave the guidance last time, we said we might be slightly below 110 for fiscal year 2023, but we believe it's going to balance on that front as we see the flattening of the month-on-month. In addition to that, our growth retention profit 34% in Q3. Now, this is a problem for me as a CFO, because 34% of total revenue at Q3 is something that create expectations.
So it's important for me to say that while we care a lot for free cash flow, and we will continue to deliver, you know, around 20% free cash flow, we are also wanting to make sure that we don't miss the opportunities that we have. Therefore, our number one priority remains to invest in the business, to invest in the top line, and to make sure that we are delivering additional value in the future. Maybe just reducing a bit the free cash flow, but we will remain positive, and we will remain efficient. And you know, there is a Rule of 40, rule of thumb, you probably know about it, for the, for the health of the companies. So we are a company of Rule of 60, coming from 94% in 2019 to 65% in 2023.
It's a combination, I'm sure all of you know, it's a combination of the growth rate plus the percentage of free cash flow from total revenue. And again, this is something that is very few companies were able to achieve rule of sixty in an hyper growth mode like we are doing in Monday. Now, let's think about or let's look at the investments we are going to do in the future. Number one priority for us is people. In the end of the day, it's the people of Monday who makes the difference. Yes, we have the technology, and we have the platform, but without the people of Monday, who are super capable, we will not get there. So we are going to finish this year with 1,800-1,900 employees. And even if you think about metrics of ARR per employee, you can do the metrics.
You have the ARR, you have the number of employees. We are very efficient. If thinking about the geographic and kind of distribution, around 65% of our people are in Israel, and about 35% of our people are in other places like the US, Australia, London, and other offices around the world. In places where we don't have employees, we have the partners, but we would like to continue and build offices around the world.
We have in Brazil, we have in Japan, and when you think about where are we going to hire people in the future, I would say a rule of thumb, it's probably going to be 60% of the people that we are going to hire are going to be outside of Israel, are going to be in the U.S., in London, in Australia, as I said, in APAC, and about 40% in Israel. Reason being is that we would like to invest in people, in product, in R&D. We have a lot of work and a lot of things that we are going to do, a lot of innovation. So we care about the people in product and R&D, but we also care about the people that will sell the monday products. So it's going to be around sales.
We're going to invest in people that are selling to the enterprise, to the C-level, to the V level. We want to make sure that we continue the journey up market, and we have to make sure that we have the right people to take us to the next level. We are going through a very interesting journey, and for us, people are super important. Also going to invest in the platform. Again, we're going to invest in strengthening the platform, developing the platform. That will be what we call enterprise-ready solution for big organization. We're going to invest in the existing product and new products, as well as in the marketplace, AI, and a lot of other initiatives that we have. Some of the things that we are going to invest in, we don't even know today.
I can tell you that Roy and Eran, mostly Roy, is coming to work every day with a new idea, and we have to tell him, "Wait, Roy, we, we are just in the middle of this idea." All the time, they are super kind of innovative. There is a lot of enthusiasm with regards to, "Let's develop new things. Let's do a lot of things," and you can see the pace of innovation. And one thing which is really important about the investment that we are doing, you know, when you're doing... When you make an investment and it doesn't go well, sometimes you kind of beat yourself and say, "I shouldn't have done it. Yeah, it didn't work." We do it, we fail, we continue. It happens, you know, and this is something that is really embedded in the way Monday.com is operating. It's super important for us.
Don't be afraid to fail. Okay, we did a mistake, and this is part of our success, and it's working for us in the level of innovation that we are doing. And without the ability to give people the kind of chance to fail, they will not try new things. So dare and try, and if you fail, it's okay. If you fail too much, it's a different problem. We'll speak about that with HR, but this is a different thing. The model, yeah. So, this is, like, the model that we try to come up with for the next three years, and few things that I would like to take into account or I would like to mention to you. One is that we accounted for the macroeconomy situation.
You know, the world has changed a lot, as I said earlier, and we have to take into account the fact that when we think about macroeconomy, we need to think about NDR. I believe NDR is going to be in the places where I said it's going to be, around 110 for entire population. Therefore, I would like you to focus on the base case scenario. A few things that I would like to stress. One is revenue growth. We are committed, and we said when we went to the IPO, that we would like to make sure that we are going to do around 30%-ish. So high 20s to low 30s. This is kind of the ballpark where we believe the revenue is going to be.
Gross margin remains very healthy, high 80s%, and we are now, I think, around 90% if you think about 2023. R&D as percentage of revenue. Because most of the R&D that we have is based in Israel, we can benefit from time to time from sometimes the cost of labor in Israel. There are sometimes FX movement, but this is something that can be, over time, normalized, but it's still a cheaper place to hire, you know, R&D resources when you compare it to the US or to the U.K., where we have big offices. So it's going to be around high teens%. S&M, we demonstrated that we reduced the S&M as percentage of revenue over time, but we do want to make sure...
If you think about S&M in monday, I would say that around 30% is performance marketing, what we call online marketing, and around 70% is people and related. It includes the sales, the partners, the customer success, and the marketing people. Now, we have a lever that we can control the performance marketing spend, and we keep saying it, you know, in every earnings call that we are doing, in every conversation. Again, the reason is being our ability to kind of manage the return. But this is a big number. If you think about total S&M, and you take 30% for performance marketing, it's a big number. Nevertheless, if you think about other names in the industry, they pulled back, and we pulled, and we actually invested, and it created a lot of opportunities for us.
This is why you saw that we brought 40,000 new customers in 2023. These customers are growing with us, expanding with us, and providing us great opportunity to develop in the future. So S&M, yeah, there are companies out there that it might be lower, but as long as it's working for us and as long as we can control the spend, we're going to do it, and we're going to drive revenue growth with this investment. G&A, not much to say, 10%, even slightly below. Operating margin, so one of the good things for us that happened to us is actually that we achieved cash flow positive since IPO.
We achieved profitability 2.5 years from IPO, and this is something that, for us, we're going to continue to focus on making sure that we will achieve free cash flow. It's going to be mid-20s. We will achieve profitability and continue to maintain, but the number one priority is now grab market share. Margin expansion, take market share, make sure that we are taking advantage of the opportunity in front of us, and we feel... We saw, you know, some of the reports of our competitors, and we think there is a great opportunity for us to continue to invest and grow the business. And also something that is important for you guys, it's the share-based compensation.
Now, one of the things that we said in earlier conversations, we said that we are going to make sure that the share, the share-based compensation as percentage of revenue is not going to be very significant, and we are getting into 14%. It's a low number, but we also want to make sure that dilution-wise, we're not going to dilute the shareholders, the shareholders. So this is something also that we took a lot of attention this year, and we are managing both share-based compensation as well as dilution. So focus on the base case scenario. This is potentially where we feel we're going to be most comfortable with. With regards to cash flow, this is a big thing. We expect to generate $1 billion in free cash flow between 2023 and 2026.
So this year, it's going to be around 25% of total revenue. You can do the math, but over time, definitely we are going to continue to generate free cash flow. I think it's important. I think the world has changed. Companies that are creating... I looked at the last, the... There is, like, a, the top 10 most valuable companies out there, SaaS companies, and there is all kinds of data points that I'm looking at, and the 10 companies have a few things in common. One is the growth rate.... you know, double-digit, between 20%-30%, sometimes in different scale. The second thing is free cash flow. They're all generating free cash flow other than one company. And to my surprise or not to my surprise, actually profitability, not many of them are profitable at all.
Very few actually are profitable. So the focus still remains: grow your top line, generate free cash flow, take care of profitability, but focus on top-line growth. And this is something that we will continue to do as well, and we keep track on this all the time. Now we have a lot of cash. What are we doing with all this cash that we have? So obviously, everything that we achieved was organically. All the growth in Monday.com is organic growth. We didn't do any M&A. So we will continue to invest in the business. I already mentioned what we are going to do. This is something that is a priority for us. Second thing, we are starting to look at M&As.
It's early days, but I believe that we should think about tuck-in M&A acquisitions that either will be acqui-hiring talent that we don't have or it's hard for us to achieve. Products that are going to be complementary, features or functionalities that are going to be complementary to the product of monday, but they can also be embedded in the platform. Because if they will be outside of the platform, it's not always straightforward that we can use them. So we want to make sure that we embed them, they can be part of the platform, but we are definitely going to look at it. And, you know, mostly filling up product roadmap, this is probably going to be the main kind of targets. And I hope that in the next 12-18 months, we're going to do something with this regards.
In addition, when we're thinking longer term, you know, this is just an option that we consider, is share repurchase. If we have a lot of cash and it's not going to be used, one of the options that we are considering on the longer term is to do share repurchase for the sake of the shareholder, for the sake of the company. But this is something that is kind of a more of a long-term, long-term play. So before I wrap up, a few things I want to say, with regards to key takeaways. So we have a track record of delivering on our promises, and it's becoming harder because the expectation from us now is that we'll continue to deliver, but we are committed to do so. We are well-positioned. Also, the competitive landscape has changed. You know, when we think about...
I'm thinking about the questions where I used to get two and a half years ago or even a year ago, about other names in the industry, and the questions that I'm getting now. I think we are well-positioned to continue to drive the growth of Monday.com. We have opportunities, we need to grab land, and this is something that we are going to do. Our top-line growth is our number one priority, and this is super important for us to keep stressing this, as long as it makes sense in terms of return and the investment that we are doing. We expect to surpass $1 billion in ARR in 2024. If you do the math, we showed you in the first presentation of Roy and Eran, $835 million each. This is what we're going to do this year.
We expect to exceed $1 billion in ARR. This is something that is really important for us. Not many Israeli companies did it, and in times like this, even more, it's something that we are very proud of to do it at scale. And obviously, we expect to generate $1 billion in cash in order to continue to grow the business. Thank you very much.
Great. Thank you, Eliran. So now we're gonna open it up for Q&A. So I invite the executive team, I think they're all getting mic'd up, to come back up to the stage. We will have runners, throughout the room with mics, so we'll do our best to call on each and every one of you. We intend to go to 11:55, so that'll give us roughly about 45 minutes for Q&A. If you are online, you can submit a question through our webcast, and we'll be monitoring that. Also, we have the email, ir@Monday.com, ir@Monday.com, if you want to email us with any questions as well. With that, why don't we welcome everybody, back up? Thank you. So we have the executives that presented already. We do have one extra one here.
So we have Shiran Nawi, who is our Chief People and Legal Officer at Monday.com. First question goes to you, Shiran: How did you get out of not having to present? Shiran, maybe, I don't think our investors and analysts are as familiar with you. Maybe you can just give a little background on yourself.
Oh, sure. So hi, nice meeting you. I'm Shiran. I'm actually almost six years at Monday. I've been fortunate to be... Before Monday, I was nine years at Wix, in Series B to four years after the IPO. I was part of Wix.com IPO as well, and then joined Monday, established the legal team, led the IPO at Monday, establishment of Digital Lift, and then joined the people team as their Chief People. So happy to be here with both titles.
Excellent. We're happy to have you. Obviously, we got a lot of plans and, and talent for the next year. And obviously, Elro- I mean, Shiran, you'll also, also oversee the ESG effort, so we wanna make sure you're up here to answer any questions you guys might have. So why don't we open it up with questions? Let's see. You get to pick.
... Okay, we got one right here.
Hey, thanks, guys. DJ Hynes from Canaccord. Great presentation. Thank you, guys. You got a lot into two hours here. I wanna ask one on price, actually, a two-part question on price. One is just tactically, how do you think about implementing price increases? I mean, is it uniform across the base? Do price increases affect larger customers more significantly? And then the second part of the question is just, you alluded to some usage-based pricing. Is that tied to the AI products that you talked about future monetization, or where does usage-based pricing come into the equation? Thank you.
Yoni, you wanna start? Yeah.
Yeah, I can take it. So thanks for the question. So the way we think about price increase is basically we are going to increase the price of all current deals that we have. Of course, with enterprise customers, we like, it's much more of a also a negotiation and discussion between them with them, so it's a bit different from the self-serve motion. And the way we plan to roll it is to roll it to all new customers in H2 next year, and then gradually during renewal date for all of our existing base. This is why I shared with you that there will be a smaller impact in 2024, but then a bigger impact in 2025.
Regarding AI, there are still components of it that we believe that should be priced in the future. It's something we are still evaluating, and I would put it maybe in the buckets of, like, the add-ons that that we have. So some capabilities will go into all tiers as part of the plans that we have today, but some of them will be potentially an add-ons on top of that.
All right. Thank you, DJ. Taylor.
Yeah, hi, Taylor McGinnis from UBS. Thank you all so much for taking the time. With all the exciting growth opportunities, this isn't gonna be the most exciting question, but I think it's an important one. Just on margins, so when we look at the out year, you're talking about margins on the free cash flow side staying very similar to what we've seen, but maybe not as much leverage on the EBIT side. So can you just talk about, you know, what's driving the difference between those two? Why not more leverage on the EBIT side? And then the second part to this question is when we look at headcount growth, so it looks like headcount growth roughly in line maybe with where we're seeing OpEx growth this year, but a big acceleration to the thirties, which might imply more pressure there.
Maybe you can just comment on how to think about that as well, too.
Sure. So, just as a reminder, the free cash flow is a derivative of the ARR, which means it's based on the business model of Monday.com. We collect, you know, 80% of our subscribers in day one, so therefore there is a timing difference between the free cash flow and the profit margin. And as I said, for us, it's about the investment in the top line. So it may be that, you know, potentially we'll see some increase in EBIT, but the number one priority for us remains to invest in top-line growth. So if we need to invest additional dollar in either bringing additional people or performance marketing, which will get the return, we are willing to sacrifice, in a way, the EBIT.
But the free cash flow is a generation of the top line, so if ARR will grow, free cash flow will remain very stable. In the next, I would say two years, because we are well advanced of what we originally said, we are willing to make this investment, and therefore not really making sure that we're going to grow as dramatic in terms of EBIT like we've seen in the past. With regards to headcount, you know, when we look at headcount, this year we kind of invested less of what we invested in prior year. It's not really something that we look at, you know, how it's going to impact the margins, in the short term, because for us, bringing the people and think that if you bring even 600 people in a year, it's basically average throughout the year.
It's not going to be 6 people- 600 people in day one. So we can manage the kind of the phase that we bring them, but the impact on the margin is not going to be significant in the year where you hire them all. It's mostly on the following year when they are fully on board.
Thank you.
Ivan Feinseth, Tigress Financial Partners. Thank you for this great event and taking my questions. First, on the innovation side, where do you see the focus going forward? Like, what type of innovations could we expect to see and, and new models, I mean, new modules to your product? Then the second is, in your growth, how much do you think comes from new customer acquisition versus, let's say, taking existing customers and having them grow through the number of seats and then the number of additional modules that they add on? And then third, on the, the Big Brain that you use, I guess that's internally, does that eventually become a product that you could sell to customers? 'Cause it looked pretty fascinating.
Let's see. Do you wanna... Yeah, let's do the first one of, you know, what else maybe we're thinking about for new modules, and then we can move our way down. Yeah. Daniel or Eran, I don't know if you want to take it. Yeah.
So just to clarify, when you say new modules, you mean our products, or capabilities within the platform?
Yes, both.
Both? Yeah. So as we mentioned, we're gonna launch monday service in 2024, and there are gonna be more products, probably not in 2024, but going to 2025. Gonna be more products that focus on the core of work. So definitely we're gonna launch additional products going forward, but at the same time, there's like cross-product efforts that we're doing and improving the platform. So anywhere from, you know, working on mondayDB, adding more capabilities, so adding more of those, what we call building blocks or more capabilities that you can customize, more options for our users to further customize the software. So we also plan to do those going forward, and definitely invest more into features that are more enterprise-focused. So definitely, Yoni talked a lot about our sales team and focus more on top-down sales, but...
It won't happen without the product. So there's obvious things we're doing, like security and governance, but there's also more kinda, mature-oriented products that we do for large enterprises. That last deal that we mentioned about the 25,000 seats, I think it also introduced to a few features that we added in order to support such scale. And as we scale our customer to large and large enterprise, we're gonna add more and more features to support those enterprise customers. So I would say that's the main focus for us in terms of roadmap.
Byron, maybe I will take the question on the expansion versus new.
Yes.
So with regards to expansion versus new, we believe that the contribution, the majority will be expansion. Obviously, as you scale, the percentage of new or the contribution of new business is, becoming less, major in terms of total ARR. But there is going to be probably, I would say, 60%ish, I think also Yoni presented, is going to be from expansion, maybe going to 70, and probably around 30% will come from new, and it's going probably to change over time. But expansion will be, with $800 million in ARR, the ability to expand within these customers, it's going to be the majority of the new revenue.
Yeah. I can take the Big Brain one. So, Big Brain is really custom-built. When we had, like, six employees, we started it, and it grew with the company and really is tailor-fit to whatever we need. And that's, I think, why we can, like, build, like, world-class performance marketing engine around it and a lot of those things. Regarding turning it into a product, so, what I heard a lot of our customers who know us intimately said that monday for them is what Big Brain is for us in many ways. It allows them to track things, to get transparency into things, to manage things throughout their company.
They know their operations, and they know where they can improve, and I think there is a lot of influence from Big Brain and the things we do for us at that scale that goes into the product and how we do things within Monday. So I think that's the strategy. We're not planning on turning Big Brain into a product. That's like a 10x harder problem than just like making it good for us.
Hey, thank you, guys. Arjun Bhatia from William Blair. I wanted to ask on service. I noticed the launch date was late 2024. Can you just talk about where you are in the build-out of that product and what's left to do between now and next year? And then second part, just zooming out a little bit, what is the gating factor in launching new solutions? Is it internal resources, or really about how fast you can get your customers educated and, and roll those out to the base? Thank you.
Yeah. So hi, thanks for the question. I think first, you know, in terms of service, we have, like, the same methodology for all of the work-based products that we are doing. We start each one of these as a seed with very small team, that actually runs pretty fast in order to get to the first version. The first version should mainly provide the base value that we want to, to see and to get confidence about the direction. So we work in a very iterative way. So we are not keen to put a lot of, you know, a lot of resources on that and then do it faster. We actually love this process of getting feedback, being very much accurate with our customer needs.
So in general, I think we can accelerate that, but we feel that the process is important in order to get to a product that really has a good product market fit. So we are going to launch it around the second half of 2024. And for this year, we maybe even start launching it to a small portion of our customers prior to that, as part of our work process. So this is about service. And I think as for the second question, we, I think that every work-based product that we decide to do, it's not only about delivering the first version to the market. We see it as a commitment for our customers, saying that this segment is important for us, and we are going to continue and invest and continue and provide robust solutions in that area.
So many times, getting to the first version, it's only, you know, a small portion of the work, and afterwards, we want to continue and invest. So this is what we keep in mind. Also, the fact that as a company, we want to provide the best experience around all functions and around the customer-facing functions as well, and it takes time to absorb that. So we are trying to keep the, the right balance between all of these considerations.
Hi, um...
Hello? Okay, I'm live. Hey, Pinjalim from JP Morgan. This is a great presentation, by the way. Thank you so much for everything. I want to ask you about the Fortune 500 opportunity. You've kind of landed in a lot of places. I think I saw the number at 61, but the penetration is very low, right? So what needs to be done to break into those in a big way? Is it a go-to-market challenge? Is it the platform? Is there a bigger element of competition maybe in those areas? Maybe help us think through that. And one question for Eliran, on the model, I'm just gonna try to tease out the assumptions there. If I heard that correctly, you're still assuming kind of 110% NDR through this period.
Is there any contribution from AI? Is that all organic, or is there an inorganic element to it? Let me just stop there.
... Yeah, so I can take the Fortune 500 question. So I think what you've seen in the last few years actually is that we were maturing upmarket every year significantly, right? So it's in the number of $50K deployments, the number of $100K deployments, number of over $1 million deployments that we now have. And we are trying to do that in a responsible way, in a way that the go-to-market team, the partner ecosystem, combined with the product, all move in the same direction, and we take another move in our upmarket motion every quarter, every year. So in many of those companies, we already have thousands of users, but of course, we want to go bigger.
So this year we landed in one of them, a 25,000 deployment. And again, we expect that that motion will continue as we mature, both from a go-to-market perspective, where we are hiring relevant sales, sales force. We've opened a strategic sales group just this year. So we expect all of that to mature and see more of that in 2024. And again, together with that, a lot of things that Daniel mentioned through his presentation about how the product is also maturing from a security perspective and mondayDB perspective, that allows us now to do things that we couldn't have done just a year ago. So all of that together, we expect that the upmarket motion will continue.
Pinjalal, to your question on NDR. We assume slightly, you know, that the terms will continue to be like this in the next maybe year or two. I don't want to tell you that AI is going to contribute a lot, but I think not only AI, all the initiatives that we have, the cross-sell and upsell, the add-ons, potentially AI, might be contributing to a positive kind of uptick, but we didn't account it as part of the model.
Maybe before we go on, just one question online. How will you monetize AI? Are your competitors overhyping the opportunity? Roy?
Cool. So, I think our strategy is to try and find new values that people also are able to understand and pay for, and I think that's like what we've done with the atomic AI capabilities, with the automations, and also with the bots. 'Cause, like, think about it, if you have a bot that actually does work for you and improve how you work, and it's packaged in a way that you know you either have it or you don't, it's not like spread across the software, then we believe it will be something people can understand the value and then understand that they can pay for it. I don't think AI in general is something that, like, it's a technology. You know, eventually, people pay for products and packaged products and value that they get. And so from...
like, if we take the assistant, for example, I think it's very hard to monetize 'cause although it has a lot of, value, but, if you wrote a formula before and now, we build that for you, it's great, you love it, but you've done it before, it's hard to monetize. If you have a bot that works for you, you know, that's easier to, monetize. And also the, automations, we can, charge a lot extra for the automation, much like the API for AI cost a lot, in that respect. So I think there is a spectrum of, of possibilities of, payment we can, capture.
Excellent. And Roy will be giving a demo of our AI offerings later today as well, so I invite you to attend that. Let's open it back up on the floor for questions.
Hello. Hi, this is Girish from TenCore. Just a few questions. First, in terms of the thin layer of the products, I'm thinking about ServiceNow and ITSM, and, you know, they're both best in class and as a product and platform, and I just wonder, with something like work management or CRM or maybe some of them, you plan to make best in class and maybe others, not so? So would be curious about that. Second, in terms of performance marketing, I'm a little bit confused because I thought I heard, Eran on the last call say that because the LTVs are higher, you can pay a little bit more, but then Yoni today said, "You're still getting 12 months cash on cash." So would love clarification on that.
And finally, on engineering, productivity, I heard an industry analyst say that the average developer codes, maybe two hours a day, which I was shocked by, but love your thoughts on what it is for you, how you think about your productivity with AI and what it means for the dev, product. And also, in terms of multi-site, I'm not sure what size of company it's appropriate to have multiple engineering centers. Thank you.
Yeah. Thanks. I, I can take the first question. So, you asked about the fact we enter in the ITSM segment of the market, and there's other players in that market, like ServiceNow. Same goes for CRM. In CRM, there's Salesforce and other main players. And, I think this is, this is our play as Monday. We're not afraid to enter what a lot of people refer to as saturated markets, markets that have a clear leader.
... Because if you think about it, those two examples that you mentioned, both ServiceNow and Salesforce, are platform companies. They built a platform, and we have a best-in-class platform like those other companies have. But we have a huge advantage because the way we built it, because of the fact, all the things we mentioned throughout our presentation about the fact that the user can have their own control, they don't need to pay for that, the fact that it's part of the user interface. So I feel that we as a company approach those markets with a huge benefit, and the customers see it. The fact that in such a short time, we managed to reach such a successful growth, both in CRM and dev.
I think it will be the same case with service, because we have confidence seeing our current customer base use it extensively. I think that will give us a lot of confidence that we'll be able to not only succeed, but also scale and offer best-in-class products in each one of those categories.
Yeah. And bear in mind that, like, our approach is, initially will be for SMBs and mid-market. You know, that's where we shine. I think that's, like, the place we start at and grow over time. Like Salesforce, for example, is our, like, best integration, and we're, like, augmenting them around them. I don't think we're, like, a competitor there at all on enterprise, nor do I think we will compete with ServiceNow on their customers and their size, so.
Girish, to your question on performance marketing, the ground rule is less than 12 months, but it can change. We look at performance marketing daily, weekly, monthly, quarterly. So if we see that the return, and if I said it's one of the quarters that LTV is better or we get a faster return, we can spend more. But we want to make sure that we have boundaries of decision-making, and the boundaries is 12 months for performance marketing only. It can, you know, be volatile between the quarters.
Maybe just one thing about the engineering side. So actually, in Monday.com, we now have engineers across three different sites. We have engineers, like... Most of our engineering is in Tel Aviv, but we also have an engineering team within London and also in Poland, in Warsaw. We see it as a great opportunity to attract more talent. We see that in many different places, there is a different talent pool, and in order to grow, you know, our teams, but keep the high talent density that we want, we feel that being global in the engineering is something that must happen, and it's very important for us.
And as for the productivity, I hope I remember the question correctly, but one thing to say is that engineers in general, it's not just about code. Many times, when people think about engineering, they feel that engineers all they do all day long is sit in front of a computer and code all day long, but there's actually a lot more to it. And we do see a huge performance boost and productivity boost with Copilot. We use it, but I feel that coding is definitely just a part of engineering, of planning, doing architecture, figuring out on how to create solutions for complex issues and problems. So we really feel that AI is going to empower developers to achieve even more, rather than replace developers.
We had, kinda along the same lines, a follow-up with that question. And I'll direct this more to Shiran, actually. How are you thinking about the balance between active hiring and maintaining a strong work culture that you've established?
Again, Milan, didn't hear you.
Oh, yeah, sorry. Shiran, how are you thinking about maintaining the balance between active hiring, which we're doing a lot next year, and maintaining the strong culture that you've established?
Yeah. So, I will start by saying that actually next year we're going to invest a lot in hiring and globally for R&D team as well as sales. And building our culture, you know, from the one hand, when we scale, it is very difficult to do that. From the other hand, culture at Monday is very, very strong. So you saw it even in the presentation by Eran, Roy, and even Daniel, that showed the culture that you see in the platform when we give our customers the control, when we let them take decisions, build their own solutions. This is exactly what we do at Monday, and this is for each of our 1,800 employees we have now. And then it just, it's very contagious when we bring people in, that they get the same culture and effect.
I can give a small example about remote work. You know, we have a small portion of remote employees. Most important is mainly about sales. And the way we go about it is actually in their onboarding experience, in their connections to the company, making sure that they are coming at least once a month. They're getting a little different experience with onboarding to get them connected, even if they are not in the office on a daily basis.
Thanks. All right, let's open it back up to the floor here.
Hi, thanks. Scott Berg with Needham. I guess two questions for me is, with the release of service next year, it looks like you're on a pace to release, you know, a new application almost every year. Is that the right pace to think about kind of going forward with additional applications that you all plan to release? And then a clarification for Eliran on your 2026, or I guess 2024-2026 growth rate, is that an average CAGR throughout the three years, or is the base case to grow at least 30% all three years? Slight nuance difference. Thank you.
... So yeah, so about the products, I think that it's—we eventually want to address more core aspects of work, okay? And we see that there are core aspects of work that every company needs, and eventually we see ourselves as the platform that will drive work in these companies world to world, across the different departments. And there are a few things ahead that we are looking at. But with that, I also want to add that we really want to continue and invest in our products and go even deeper and wider within each one of these segments. So if you're thinking about our products, they are actually not vertical products, they are more like an horizontal products. If you think about CRM, it's a huge category with huge potential within the category itself.
Definitely in the upcoming years, we are going to introduce more work-based products and even more products in the ecosystem of Monday.com. It's not about the pace of the release, rather it's about the opportunity in each one of these segments and each one of these aspects of co-work.
Scott, it's CAGR. It's average growth, you know, between the years.
All right, next question.
Thank you. Good morning, Brent Bracelin, Piper Sandler. Apologizing on my glasses. I see a lot of familiar faces; they're a little blurry. Hopefully, you can see me. I actually had two questions I wanted to touch base on. Maybe we'll start with Eliran. One of the things that stood out to me was the mix shift to enterprise mid-market. That's now 55% of the business. You talked a little bit about expansions and the mix shift there. Can you talk about enterprise mid-market? We're at 55% now. Where do you think that trends over the next three years?
Sure. So first, let's say that, you know, even when you think about enterprise, Brent, it's not like the Salesforce enterprise. We're not there yet. So I would call it sub-enterprise to enterprise. I think that over time, we're probably going to see going in a range of, I would say, if I have to bet, 60%+, 60% to 65% to 70%. But it's also very important for us to continue to stress the fact that we care about the SMBs. We care, and this is, again, something that when we see other companies saying that they're focusing only on the enterprise, there is a toll to it, there is a cost to it, in efficiency, in growth, in revenues.
I think for us, there is going to be the journey upmarket because it provides a lot of benefits to the company, so let's say the 65%-70%, but also to continue to maintain the SMBs, and we care about them. They are very important to us.
Very clear. And then, Roy, I wanted to double-click into the AI strategy, 'cause what I heard today was a little different than what we're hearing from your peers. This notion of building AI role-based bots that could be controlled by the user with very specific roles. Can you double-click on, like, the vision there? 'Cause it does sound very different than some of the horizontal AI functionality that's being rolled out for others.
Yeah. So, so I think the horizontal AI section is our monday assistant, okay? It's like we add it to every, place within the system. It really helps, shorten sentences, all those, good stuff. But we really feel we have an advantage in terms of the platform, how people use it. I think the automations is a great example. It's already there. It's an infrastructure for us to add, the atomic AI capabilities. It's, like, super simple, just like whatever input to whatever output, and then we let customers do whatever they want with it. And, and it is, I think because of the place we have as a platform, of the infrastructure we have right now, that we can just add AI in a meaningful way to people workflows. And within the bots,...
Look, I think we're taking a very practical approach to AI rather than, like, thinking it's, you know, what's going to be like six years from now and, like, next, revolutions of, like, how, I don't know, it'll take over the world. But to actually see what it does really well now, and it does a lot of things really well now. And when we package a lot of those small things together, you get a bot, you know, something that, that helps you. It doesn't replace other people. When we do, like, I don't know, the, scrum master bot, okay? It helps the scrum master, it helps the team. It doesn't, really, replace a person, okay?
I don't think it's going to replace a project manager when we add that bot, but it's going to help it, help them a lot, 'cause a lot of the things are asking people for status and, like, gathering information and doing a lot of those things. So that's, like, really simple things we can have AI do. But what's different than before is that AI will actually understand in however way you answer it, where we didn't have those capabilities in software before, you know? So that's like, it can take, like, unstructured data in many different ways, turn it into structured data. Very simple, but when you package it as a product, you know, it makes a lot of sense. It can save us a lot of time. So it's actually productizing the technology that we see that exists today rather than think of, you know, new stuff.
Great. Thank you, Brent. Thank you, Roy.
George Iwanyc with Oppenheimer. Yoni, maybe you could spend some time talking about how you're adapting the sales motion with the new products that are a bit more technical, you know, dev and service.
Yeah, of course. Thanks for the question. So we're doing a few things. So, first of all, we have... And it's not just a go-to-market motion.
... we have, think about it like a GM per product, right? That kind of sees cross company. And then within the regions, in the go-to-market motion, we are building based on, again, the maturity of a different product. Once it's at seed, it might be too early, but once they get to a scale of a few million dedicated teams in our new business motion, so they get without the leads directly to them. And then we have also a team of people that are doing overlay. So once we close a business, it's passed to someone who manages a portfolio and account manager, and he gets support with kind of a co-sale motion together with an expert that joins him when needed.
So that's how we operate, and we try to build portfolios based on that as well.
Great. Next question.
I'm coming. Great, thanks. Derrick Wood at TD Cowen. You guys often get the question around what you see competitively, and I think most of the time you don't see a whole lot of competition. As you move more into sales, CRM, and dev, and service, do you think you'll kinda compete more head-to-head against other vendors? And I know you talked about you're not, you know, trying to displace Salesforce or ServiceNow, but there are a lot of vendors at the SMB mid-market level with packaged applications in those markets. So perhaps they're, you know, they're on older technologies, and you guys see an opportunity to drive more displacement, or is the vision really around there's a lot of users that are still underserved and not using packaged software applications?
One quick follow-up, just to understand the ACV expected to double over the next three years by 2026. What is that ACV number? Can you just unpack that a little bit? Thanks.
So I can start with the competition. So, I think it's the right way to look at it about it is that each one of the products has its own market, and we compete against completely different competitors. So in some areas, we might not see competition, like work management, which we feel is totally greenfield. Within the CRM, for example, we see about 50/50. Half of the customers come, like, they digitize, they had nothing before. A lot of it comes from, like, them trying to digitize their business, and this is what they see as the first step that will be meaningful. But another half is other companies that are maturing from other rigid solutions.
You know, there are like, I don't know, hundreds of CRMs out there, and we're like, the top in G2 Crowd, like top four. And you see that when they mature from all of them, they need something that is not rigid, that they can customize 'cause they have, like, a slightly different, operation that is more complex than what the rigid software can give them, and so they see us as an alternative. So that, in that market with monday dev, I think we're definitely competing against Jira in many situations. And so I think with each product, we'll see a different set of competitors in different market conditions.
Derek, with regards to ACV, so, you know, the simple calculation is to take the total ARR and divide by the number of customers. But because of the large number of customers and the fact that it is comprised of small customers and, you know, the enterprise one or the bigger ones, we do a number of calculations. When we speak about ACV in Yoni's presentation, it's the simple average, but we look at all segments, which has very big differences between the different segments within the company.
I think we have time for one more question.
Go ahead.
Sorry, thanks. Steve Enders with Citi. Thanks for taking the question and, and fitting me in here. I wanna ask about the, you know, the 3x increase in your largest, seat customer now. I guess, how did that deal come together? What was it that led to, to Monday winning that opportunity? And, Eran, I think you mentioned that there are some things that need to be done on the product side to capture that customer. What were those things that needed to happen, and how applicable is that to capturing other, you know, larger enterprise customers? Thanks.
Yeah. So, regarding how we got that opportunity, basically, it's something we've been working on for quite a while. We've had some penetration within that account for the last few years, which has been gradually growing. And, you know, at some point, we got in touch with the CIO office and were able to land a much bigger deal. But I think part of what made it possible is that a few years ago, we just weren't ready to support that scale from a product perspective, both from the mondayDB that solves a lot of those challenges for us, but again, also, security-wise and many other capabilities that we've added along the last few years. So, it's been gradually solved, you might say.
Again, we see more in the pipeline, and we expect that motion to continue in the future as well.
Just regard to the second part of your question, so it was a bunch of, I would say, more of adjustments to the product. So imagine such a large customer that created a large amount of boards in a short amount of time, and they want a special permission in how they manage their teams, and all those sort of things. I think, what for me was special is that every change, or improvement we introduced is gonna be relevant to any other large customer. So it wasn't like a nuanced, feature that was added, but like a broad capability. So it just kinda presents an opportunity to land another big deal like this, and we're gonna be kinda more prepared for that. As we scale, we'll also mature in terms of the product, in that sense.
... Excellent. Thank you. So, that's it for our Q&A, but we'll make the executive team available for follow-up questions after this. Eran, do you wanna just maybe close with some final thoughts?
Yeah, this is our first Investor Day, so first of all, we wanna say a huge thank you for everybody that came over. I think we stressed enough the fact that we'd love you to stay, but really, I think it's an opportunity to stay for Elevate, at least for the first part. One, you get a chance to meet a lot of our customers. It's gonna be almost 500 people from different companies, so you get a chance to meet them. Also, feel free to talk with our team. They're gonna be almost 50 people here from the New York office, so you get a chance to talk with them. They're gonna have booths showing the products, so a great opportunity there.
And also, you get a chance to see a demo by myself and Roy, which is the best thing ever. So, you're all welcome to stay, at least for the first part. And again, thank you for coming and being part of this. We really appreciate it.
Yeah. Maybe I said he gets the last word, but I actually wanna have the last word, so yes, thank you all for coming. Many of you took the 1 train down here. It's very easy, but we know several of you actually flew globally to be here, so we really appreciate it and appreciate your efforts. I just wanna give a shout-out to the teams that put all this amazing stuff together, the presentations, the... everything you're seeing here. Paige Newman on my team did a fantastic job. Yael Darel also did amazing work. These two worked tirelessly on everything that you see here. And last, but certainly not least, I just wanna thank the executive team. I think it goes without saying that the conflict in the Middle East continues.
It's impacted many here on the stage, personally and professionally, so I wanna thank you for your dedication to making this Investor Day happen. Thank you.
Thank you, Byron, for everything.
Thank you.
Thank you, Byron.
Thank you, all, and have a good rest of your day.