You know? Oh, it's very nice.
Exactly.
Thank you all for joining us. We really appreciate a lot of you having to take long flights, a few red eyes from what I understand, so we appreciate you being part of the Investor Q&A session here at Monday. I think the last time we had an investor Q&A session was at Elevate 2023-
Mm-hmm
... 10 months ago, and a lot has changed with Monday in 10 months. So as I kind of I just want to introduce everybody real quick and just talk about how it's evolved in their area. So Eliran Glazer, our Chief Financial Officer, you've overseen record free cash flow, record operating profit, and GAAP profitability for the first time. So Eliran deserves a lot of credit there. Shiran Nawi, our Chief People and Legal Officer, overseeing a massive headcount global talent that we're adding this year, increasing headcount by 30% globally. So Shiran, I know you're quite busy, so thanks for joining us. Yoni Osherov, Yoni has overseen our largest seat count go from 7,000 to now 80,000.
So the go-to-market motion has been amazing, and Yoni deserves a lot of credit for that. And Daniel Lereya, who oversees our Chief Product and Technology Officer, MondayDB, great execution on that, and all the stuff we're doing, multi-product, Daniel's team is responsible for that. And last, but certainly not least, our co-founder, co-CEO, Roy Mann, seeing us in a decade go from a start-up to now $1 billion in ARR, amazing journey that we've been on so far.
My credit is that I brought all of them.
Yeah. So full credit here. As you guys might notice, we are a half founder and a half CEO short. Eran was feeling ill, so he couldn't make the trip, but I know we have the team here to answer all your questions. So that is essentially the session. We're gonna open it up for Q&A. We have a couple mic runners here, so feel free to raise your hand and ask questions. For anybody online, we are streaming this, so if you do have questions, feel free to email us at ir@monday.com for your question, and we'll try to get to you in. With that, let's get started.
Hey, thank you so much. This is Pinjalim from JPMorgan. Thank you, great presentation-
Mm-hmm.
Overall. Okay. I wanted to ask you on AI, obviously, you are infusing AI all over the platform. You are talking about the AI Blocks, which is part of the platform itself. One thing we did not hear from you is AI agents, and seems like the entire software industry suddenly has leaned on to AI agents. Monday did talk about it a year ago, you said Monday Bots, and that was part of that slide deck, I remember. But maybe talk about how do you think about those Monday Bots kind of coming into fruition in the future in this AI-based architecture? And then the second part of that is, how do you envision kind of the evolution of pricing and packaging in a future with some portion of the work may be done by AI agents versus humans?
You want AI bots? You take that?
Yeah. So, so I think we've done a lot in AI, as you've seen, and, you know, we take that like... We see a lot of opportunity for us to get into the core of what we do and add the technology there. Like we shared, like the blocks is one thing, and I think we talked about the blocks as being step one, and the bots being step two to that area, you know, and that's still how we think about it. You know, agents essentially are the one who, like, you give them a task, and they iterate on it, you know, until they succeed. So essentially, we'll get into those such blocks that you can give them a task, and they can achieve it at some point or iteratively.
But I think, like, the thing that I feel that after, like, Salesforce presentation, HubSpot, and, you know, like the dust is starting to settle on some things, and we understand that we need to take that technology and put it really inside the products, like having that work for us, you know, like as for the tasks that our customers hire us to do. So that's what we're doing next, you know, with... And it's not rocket science, it's good product, is implementing that. And I feel that's what we're starting to see now.
It's like actually taking the assets we have, the goals we have, what our customers expect us to have, and, like, blow their minds with how fast they can do things, and things that took them for, like, I don't know, hours or look impossible, they can now just, like, happen seamlessly. So that's what we're doing with the Monday products AI. And so, you wanna add?
Yeah, just to add, I think that for us, the biggest, you know, challenge is how to make people really adopt AI in a way that actually leverage their business outcomes. And I think that in that sense, like, we chose to start with the AI Blocks because as you've seen in the session just before this Q&A, I think people, like, currently are building the trust on this technology and the fact that they can leverage it so easily, so quickly, but also because it's part of the Monday, like, platform and plays with the same rules-
... they have the control, they have the visibility, and they are building trust, and I think that this is a very important step, and also a very valuable one, where people can actually take these blocks, integrate them with their existing workflows, so it's not a major huge change, but immediately gets a lot of value, so we're really excited about that, and we're really excited about how people are adopting it, and definitely moving forward, we have a lot more things coming on. Our products, which we have also specific things that we want to do, like the Risk Analyzer that we have shown in the demo, and of course, also taking the next steps with bots.
Yeah, and, regarding pricing, just like for completing what you asked, like, we feel that the automations part are something you consume and will probably go for a pricing on consumption over time. But the AI product, it's probably going to be in the tiers, and in some products, like Service, going to allow us to penetrate the market and succeed faster than others, you know, and bringing that change. And, you know, the product itself is going to be priced according to, you know, completion and not so much seats, okay? Because it's AI-driven, so it's in the pricing of the product itself.
Hey, guys, Alex Zukin with Wolfe Research. Thank you for a really incredible event. It feels like there's a tremendous amount of enthusiasm on the CRM product today, the email marketing introduction cements that. The Service product, there's clearly a lot of excitement about that. I want to ask you, you know, maybe on the Dev product and broader, bigger picture, when you go from $1 billion in revenue to $10 billion in revenue, which I would imagine is the goal at some point, how do you think that it breaks down between the current product sets? Is it, you know, a quarter each? Is it, you know, CRM's half and everything else?
Help us understand that a little bit, and then maybe secondarily, a lot of evolution in the competitive landscape, one of your competitors getting acquired, I think, today, pricing adjustments from some of the other CRM vendors. Just curious on kinda how you see the competitive field evolving.
So, you wanna start?
Yeah, do you wanna... Yeah, start.
I can, yeah, I can.
Yeah.
So when I look at our revenue makeup, you know, over time, like, there's a lot of ways to slice it, okay? Like, you can slice it by product, but, like, the way we're thinking about it is sliced on company size. 'Cause if you look at our history, we have, like, over two hundred and twenty-five thousand customers, and a lot of them are small, obviously. But as we grow, we see a larger portion come from larger companies, and with them, we see that when they make a strategic decision to go on Monday, okay, it's like all in, and they will probably use a lot of our products.
If I go down the line to 10 billion, like you said, like eventually we'll move from, you know, doing bottom-up kind of sales to doing top-down kind of sales, value selling, and then verticalizing. I don't know if it'll happen then. I assume it will. Then when you verticalize, essentially you sell a solution to a vertical, and you don't really look at the product. It's like you tie a solution, a whole solution, like you solve it. They don't care if it's like five products or two, or how you go around solving it, but you solve that problem. I don't think we can predict how the product will be.
I think it's rather, you know, like the size of companies and the depth we get into, you know, the many use cases inside, and then down the line, you said 10 billion. Like, we're not looking to verticalize now, but we will.
Alex, maybe I will just add one thing, so you know, everything that we achieved until now was organic. So when you think about the next page, next stage, or the next phase of Monday, there are products that we don't know even how to name them today, but they are going to be developed because Monday is a very innovative company, and we always have all these, you know, thoughts about the next... The way we think about it, we do three years and five-year plans. We say where we want to be in five years from now, what is the strategy, product, region, geography, people, cash, M&A? Then we go backward, and we start to plan, you know, in accordance with that, and we keep rolling it like a rolling forecast, a rolling model.
I will tell you that, you know, some of the things we don't know today, but we are going to develop them. We name them X, Y, Z, I have no idea. We're going to do probably M&A because we are, you know, getting cash, and we have north of $1.2 billion as of second quarter. I think the combination of existing customers, that we're going to extract more share of wallet, also taking from market share from some of the competitors, this, together with everything that we did and we described today and based on our execution in the past, is gonna take us to the next level.
Great. And then Alex's question on competitive positioning, competitive environment, Yoni, anything you want to say? Have we seen any real changes in the competitive environment with some, you know, recent changes that we're seeing, with some of our Work Management peers?
Yeah, I think we are obviously. First of all, it depends on the product, and we see different competitors based on different products. But we've been going upmarket quite significantly in the last year or two, and we're seeing the more mature players of the market that are coming up. It happened for us in Work Management, but likewise also in CRM. As we go upmarket, we are also seeing players that we haven't met before when we were played only in the SMB space. So I think that the landscape is changing for us as we mature and evolve as a company.
... Excellent. I know Alexander already asked about this, I'm kind of curious, you know, as we've been adding more and more headcount, are we, you know, looking at a broader base of, you know, some of our peers that we've been hiring? Are we targeting a certain persona or profile?
Of course, and I think as we grow as a company, and obviously going and expand more upmarket, also the profiles of our headcount are changing to adjust to the right, you know, selling technique, talking with the right, executive and personas, in those companies. So we are quite shifting, you know, with our product, with our market, and also our headcounts.
Excellent. Excellent. Great. Next question?
Hi, this is Vijay from Dilation Capital. So your platform is quite flexible, and that's been the fundamental driver for growth, but there's a fundamental trade-off between flexibility and performance. So with MondayDB, you sort of try to address the trade-off. Now, you talk about increasing items per board and per dashboard. The question that we have is, what's the extent of the scale unlock that you can achieve, and how would you like to monetize that? Thank you.
Monday DB?
Repeat the question?
Yeah, sorry. Yeah, there's a lot of background noise. So I know it's around MondayDB, and scaling, and flexibility. Anything specific you-
Yeah, w-
We can easily talk about MondayDB all day.
What's the extent of scale unlock that's going to be possible here, and how do you monetize that?
The scale.
Scalability, yeah.
Yeah.
So first of all, I want to say that, you know, for us, MondayDB is super strategic project, because it's something that we've been working on for quite some time now, you know, Monday's architecture is very unique in the way that we actually give our customers the power to build anything that they want in a flexible way. The underlying infrastructure basically is a schemaless one, meaning that each and every one of our customers is actually building software in his own way, and with that, MondayDB was the most important part, in our eyes, in our infrastructure, to make sure that we allow this unique flexibility, but not compromising on scale and on performance.
So we just, as you saw, announced that we finished the rollout of MondayDB 2.0, which is around scale, and I think that with MondayDB 2.0, we are in a place that we feel very good about our offering, and about the ability to build very elaborated and complex workflows on top of the platform. But with that, this is something that we are constantly pushing further, and I think that for products, they have specific needs. Each product is different. It's not like the generic way of the platform in which we feel MondayDB 2.0 places us in a position that we are fully comfortable with.
Now, we want to pay more attention about specific vectors in each and every one of our products, and I think that with each such progress, we see our customers leveraging the platform in more ways, doing more, you know, new use cases that we haven't seen before, and we are really excited about that. I believe that, you know, as a platform company, we should continue and invest in it, and continue and push the bar in order to allow more complexity and more scale, as time passes by.
Thank you, Daniel. Next question?
Yeah. Hi, Taylor McGinnis with UBS. Thank you, guys, for taking the time today. Maybe a two-parter. The first one, it's been about a year since we got an update on the traction that you guys are seeing with CRM and Dev. So even if just qualitative, would love to just hear the progress that you guys have made till now, and then a second part of that question, you announced a lot of really interesting features on the CRM and Dev side. So as you've seen that product evolve today, are you seeing more able to go to head-to-head with some of the incumbents? Is it still largely greenfield? Are you seeing more displacements? And when you think about the part of the work management base that's addressable for those products, where are we, I guess, in this medium term?
So first of all, I think that we're really excited about our products, and like with the high pace of innovation, we also see the satisfaction grows within our customers. And our like compass for building the additional value in the products is the demand that we see. So for instance, in Monday Sales CRM, I can share that one thing that we are really excited about is that aside from the fact that we are now, and over the last year, like really deepen the you know the offering that we have for sales teams, now we are expanding, and we are opening a new I would say grounds with marketing capabilities.
So in that sense, I feel that these are all investments, that as we are doing this investment, we are doing it with a lot of confidence because this is the feedback that we get, both from our existing customers and also from new customers that are coming in. And I just want to say that for work management, personally, I feel that the category is constantly evolving, and I feel that today, more organizations understand what does it mean? You know, there's suddenly a category for that. We hear more from customers, especially the large ones, that they understand the importance of having some kind of a solution to align everything across the organization, to connect the strategy to the execution, to get visibility to how resources are being utilized across the different departments and on the company level.
I really believe that the value that we are adding now to work management will also benefit our existing customer base in new ways and with a new significant value. We are also very excited about work management and about the fact that it has a very bright future in our eyes.
Yeah, and I don't know about-
Maybe-
Sharing numbers on traction, right, of CRM, but, like, we're very happy with the progress there, and also with Dev, so, nothing to update on the models, but yeah. When Byron says we can share.
Brent Bracelin with Piper Sandler here. I wanted to maybe direct a question towards Yoni and Eliran around the cross-sell opportunity. As we think about the product lands, a lot of them have been landing with new customers. I think Daniel, in your session, you kind of positioned that Work OS as a platform and these apps on top of it. So as we think about future capabilities in the next year that you're adding, what's the customer interest in cross-sell and Eliran, as you think about how you execute packaging? Does that change a little bit as cross-sell becomes a more important unlock for you, possibly maybe next year?
Yeah. So, I think that cross-sell will become a bigger portion of what we do to drive business. It really depends on the customer segment. The way we segment the market within Monday is SMBs, mid-market, and enterprise, and not all of the products are exactly in the same rate. So we are seeing very good success in cross-sell within the SMB since we've started that, but we are in a clear motion of going upmarket. And part of the expectation is that as we do that. By the way, when I'm saying upmarket, it's not just about larger organization, but it's also adopting a top-down SLG motion.
We've built a very good PLG motion, but we are now very focused on building a very strong SLG motion to augment that, and then cross-sell becomes much easier. You're already talking to someone senior within the organization who kind of has a bird's-eye view of the organization, and it's easier to penetrate in that motion. So I think as we'll have a stronger and stronger SLG motion, we'll start to see more cross-sell also within the larger deployments that we have. It's a journey that we are kind of in the middle of at the moment, but that's the expectation that we have.
Brent, to your question on pricing, one of the things that we did, we started this year, basically, in the past, the pricing was the work management platform, and on top of it, we charged for CRM and Dev between 25% to 50% on the, you know, baseline pricing of the work management. This year, we started to detach. You know, now you can buy CRM as a standalone. You can buy Dev as a standalone, and you have a different pricing because we don't want customers to feel like they are obligated to buy work management and then to buy CRM. So we are creating flexibility in the pricing scheme, in the pricing model, that will continue to develop, continue to evolve, and going into different models, consumption, like what Roy mentioned earlier.
Pricing is going to be becoming more important for us as we continue to develop more products, and we are going to create different packages of pricing, so customers will have flexibility in the way they buy our products.
Great. Steve Enders from Citi. I want to ask a little bit about, you know, you've launched a ton of new products today or a lot of new innovation. What do you think is the most, you know, incrementally monetizable here over the next couple of years? Where do you see the most opportunity? And then secondly, you talked about M&A potentially becoming a piece of the strategy here moving forward. What does M&A look like for Monday? Like, what kind of opportunities would you look for? Thanks.
That monetization part, like-
Monetization, so we've introduced-
Of-
-a lot of things, so like-
Of the products.
... What do we think is gonna be the most impactful to revenue?
Yeah. So I think we're doing a lot of things in terms of monetization that, like, brings more value to customers. Right now, like, we've done some add-ons work, which looks really promising, and customers really love it, especially the larger ones, as they, you know, use us more and more, want those additional services and, like, products we put on, even like security and those kind of stuff. And I think cross-sell would prove to be, like, something more customers as they lean in more towards Monday, like, tend to take more products and use us more, so I think that's also going to be something that is significant.
And obviously the addition of the new product itself, the service, although, you know, there is some overlap because, like we said, a lot of our customers already use us for internal ticketing, and when we launch the new product, it's going to gain a lot of traction from existing customers, so it might be, like, shifting a little bit of revenue, but, like, I think over time we're going to penetrate a new market and have, like, a different, a new TAM to go after, so that, that will also be significant.
Excellent. And yeah, would you, Eliran, you wanted to talk about just some of the-
Yeah, to your question-
M&A targets
... Yeah, with regards to M&A, so we said it in the past, so we did a lot of groundwork over the past few months. Mapping, sourcing, identifying, you know, the strategy that we have as part of M&A and Corp Dev going forward. I believe that at first, we're going to concentrate on companies of, you know, $ millions to $10 million, rather than, like, big acquisitions. We're not going to acquire, at least for now, revenue or customers. It's mostly product features that will complete our, you know, solutions, either in CRM, in AI, in work management. So these are the things that we're looking at, so tens of millions of dollar probably acquisition, unless, you know, something very major opportunity that can be close to a hundred..
This is close to a hundred million, but this is something that I don't envision to happen in the next twelve months.
Yeah. Still got a lot of efforts to build that muscle first.
Yeah.
All right. Another question?
Hey, it's Ryan MacWilliams from Barclays. I know it's early, but any insight as to where you think you'll see the most significant early adoption of Monday AI? Would love to hear if you think any product or customer size could see the most initial early adoption. Thanks.
Can you-
Yeah
... repeat the question? So-
It was really just around AI adoption, what we're seeing.
Mm.
Uh-
Okay. Yeah, there's a lot of background noise, sorry, and okay, so about AI, I think that, as I mentioned, I think that the biggest challenge for our customers is, you know, to do this leap in terms of, like, really taking the value. I think that at the beginning, when we started with AI, we did a lot of things across the platform, but with the AI assistant and things that, like, I think became, you know, some kind of table stakes right now, and we didn't feel that there is a, like a meaningful value there, or at least not something that is repeating in terms of the, like the usage and the value that people are getting.
And since we introduced the AI Blocks, although it takes time for people to adopt it, and we see that, you know, people are trying it, and then they are getting more excited about that, I feel that it's a different story because we suddenly see different patterns of retention. We see people that are actually getting value in a much more profound way. So the feedbacks are really great. They are initial, and it's important to say, you know, AI is a journey, and I think also we are going to continue and evolve together with technology, and we are super excited about that. But I think that now with the AI Blocks, when people are integrating it with the business workflows, they see the value.
For us, this is a very good, you know, confirmation to this direction and to the fact that with time, it will become more and more meaningful. Even just as an anecdote, you know, we've been in Elevate London and here in Elevate in New York, and after the AI session, a lot of customers are coming to get more, you know, more information and to see how they can actually integrate it with their current workflows. It's very exciting and a lot of things to come in the future as well.
Yeah, so we got a lot of great feedback on the blocks, and I saw some of the things customers built with them. It's crazy, and you know, it really is, you know. We give them the power to build stuff, and they do it, and it's really cool, and you know, like, it's part of the vision. It's not like it was a test, but we're committed to this path.
From the sounds of it, sounds like cocktail hour has started, so we want to wrap up here. We have time for one more quick question.
Hey, everyone. It's Gilly Yanowitz from Goldman Sachs. So can you hear me? Okay. So I just, the strategies that you guys outlined in for 2025 take a little bit of a different lens to them versus what we've seen in the last two years, because it does sound like they're a lot more, you know, the business workflows and the reporting, they're a lot more for the enterprise. So how are you guys. How do you expect this to change the selling or adoption motion you may see in the market? And when we're tracking the momentum that you guys are seeing or the traction there, should we be looking more at existing customers versus maybe new customers, which were the kind of the metric points that I think were the anchors for CRM and Dev?
And then I have one last one, if I can, after.
Okay. So, like, you're asking, 'cause, like, we didn't... We're not hearing, like, how are we doing with enterprise adoption or large customer adoption, or-
More thinking about-
Yeah. I feel like it was like she wanted-
Can you hear me? Okay. Just more thinking about the adoption and the go-to-market of, like, these new initiatives for twenty twenty-five that, Daniel, you kind of set out in the keynote, and when we thinking, like, those seem different than going to SMBs or new customers.
Mm-hmm
... and saying, "Hey, we have CRM. Hey, we have service.
Yeah.
You should come to Monday for that.
Yeah.
How should we be thinking about the adoption?
So, we are seeing that we need to add more go-to-market, different go-to-market ways, and specifically, when we look at into our customer base, it's like massive right now, and we see a huge opportunity to readdress the existing customers, give them more value, scale within. We're very partially penetrated, and I think we put a lot of emphasis there, also with the new products. Okay, service, I think, is a good example, and we chose, instead of, like, doing, let's say Google first, we do existing customer first and going like to a larger deployments, like day one, rather than go the SMB path again with that product as well.
So it's not that it's not easy to sign up, give it a try, self-serve, all the stuff we love, is that we see that we have that new engine, okay, of existing customers that we can address. I hope that-
Gilly, maybe I will add to what he said. When you have two hundred and twenty-five thousand customers, and you only scratch the surface, there is obviously the ARR, the future ARR, will come from them. It's not going to be the same ratio because as you continue to grow the business, you know, we can consolidate on our existing customers. We already see customers that are consolidating, sorry, on us, buying, doing cross-sell, buying one product, buying other product. We do still see a very healthy top of funnel coming from new customers, but we don't want to tell you that it's going to be like what we saw in the past, like bringing double-digit growth in new customers because, you know, you become a $1 billion-dollar company going into $10 billion, the mix of the business is changing.
This is why we continue to innovate, to offer a lot of things to existing customers, and the bulk of the ARR will come from them, we anticipate, while maintaining healthy top of funnel and new customers.
Excellent. Thank you all for coming. Thank you to the Monday management team for joining us. On your way out, as a token of our appreciation and to, you know, highlight the $1 billion in ARR, we do have a llama Lego, so please feel free.
A collectible item.
It is a collectible item, but we encourage you to pick one up, and look forward to seeing you again. Thank you.