Good day. My name is Janice, and I'll be your conference operator today. At this time, I would like to welcome everyone to monday.com's first quarter fiscal year 2025 earnings conference call. I would like to turn the call over to monday.com's Vice President of Investor Relations, Mr. Byron Stephen. Please go ahead.
Hello everyone, and thank you for joining us on today's conference call to discuss the financial results for monday.com's first quarter fiscal year 2025. Joining me today are Roy Mann and Eran Zinman, Co-CEOs of monday.com, and Eliran Glazer, monday.com's CFO. We released our results for the first quarter fiscal year 2025 earlier today. You can find our quarterly shareholder letter, along with our investor presentation and a replay of today's webcast under the news and events section of our IR website at irmonday.com. Certain statements made on the call today will be forward-looking statements, which reflect management's best judgment based on currently available information. These statements involve risk and uncertainties that may cause actual results to differ from our expectations. Please refer to our earnings release for more information on the specific factors that could cause actual results to differ materially from our forward-looking statements.
Additionally, non-GAAP financial measures will be discussed on the call. Reconciliations to the most directly comparable GAAP financial measures are available in the earnings release and the earnings presentation for today's call, which are posted on our investor relations website. Now, let me turn the call over to Roy.
Thank you, Byron, and thank you everyone for joining us today. We are pleased to report that 2025 is off to an exceptional start for monday.com. In Q1, we delivered robust revenue growth of 30% year-over-year, achieved record quarterly operating profit, and generated our highest-ever cash flow for a single quarter. These results reflect the strengths of our multi-product offering, the dedication of our teams, and our continued focus on operational excellence. We also continue to invest in product innovation, including the launch of new monday work management capabilities and AI-powered features, which are being rapidly adopted by our customers. As of the end of Q1, we've seen our user perform more than 26 million AI actions to date, up more than 150% since the end of 2024.
We are thrilled to see such rapid growth in usage of AI as our customers utilize the features to automate complex tasks, extract insights, and accelerate decision-making. Our strong financial performance and disciplined operations position us to weather any uncertainties in the year ahead. During times of market volatility, customers increasingly rely on monday.com for our flexible platform and cost-effective solutions. Our adaptable product suite and scalable pricing enable businesses to stay agile, optimize resources, and confidently manage the changing demands. Let me now turn it over to Eran to walk you through some of our business and product highlights of the quarter.
Thank you, Roy. The enterprise continues to be our fastest-growing segment and presents significant opportunities for market share expansion, and we are excited to be strengthening our efforts with these customers. In Q1, we launched a set of new capabilities available exclusively in the work management enterprise tier, designed to provide business leaders with enhanced visibility and control over execution across departments. This includes exciting new features such as AI-powered risk insights, AI-powered portfolio reports, managed templates, resource planning capabilities, and more. We are also very happy to announce the appointment of Casey George as Chief Revenue Officer. Casey brings nearly 30 years of experience in scaling enterprise software organizations and driving strategic market expansion. Most recently, he served as Executive Vice President of Global Sales at Click, where he oversaw $1.3 billion in annual recurring revenue and led a global team of over 1,000 employees.
His leadership track record also includes senior roles at Talent, Variant, and IBM, where he successfully built and aligned go-to-market organizations across multiple business environments. Casey will be based out of our North America headquarters in New York City. This marks an exciting milestone as we welcome our first global C-level leader to monday.com. We are confident that his expertise will further accelerate our enterprise growth, strengthen customer relationships, and support the next phase of our go-to-market strategy. In sum, the strong momentum we achieved at the close of 2024 has continued into the first months of 2025, setting a solid foundation for sustained growth. Looking ahead, we remain confident in our ability to execute on our strategic initiatives and capitalize on the significant growth opportunities that lie before us.
Despite recent macroeconomic uncertainty, we believe that our strong product offering, resilient business model, and disciplined approach position us well to build market share and continue delivering value for customers and shareholders. With that, I'll now turn it over to Eliran to cover our financials and guidance.
Thank you, Eran, and thank you to everyone for joining our call. As Roy and Eran mentioned, Q1 marked a strong start to 2025 with solid revenue growth and improving efficiency. Total revenue came in at $282 million, up 30% from the year-ago quarter. Overall NDR was stable at 112% in Q1, with improving retention for our larger customers' cohort. As a reminder, our NDR is a trailing four-quarter weighted average calculation. For the reminder of the financial metrics disclosed, unless otherwise noted, I will be referencing non-GAAP financial measures. We have provided a reconciliation of GAAP to non-GAAP financials in our earnings release. First quarter gross margin was 90%. In the medium to long term, we continue to expect gross margin to be in the high 80s range. Research and development expense was $53.8 million in Q1, or 19% of revenue, up from 16% in the year-ago quarter.
Sales and marketing expense was $135.9 million in Q1, or 48% of revenue, compared to 56% in the year-ago quarter. Net income was $58.4 million in Q1 2025, up from $31.7 million in Q1 2024. Diluted net income per share was $1.10 in Q1, based on 53 million fully diluted shares outstanding. Total employee headcount was 2,695, an increase of 187 employees since Q4. We continue to expect to grow headcount by approximately 30% in fiscal year 2025. Moving on to the balance sheet and cash flow. We ended the quarter with $1.53 billion in cash and cash equivalents, up from $1.41 billion at the end of Q4. Adjusted Free Cash Flow for Q1 was $109.5 million, and adjusted Free Cash Flow margin was 39%. Adjusted Free Cash Flow margin is defined as adjusted Free Cash Flow as a percentage of revenue.