What Happened?

Shares of project management software maker Monday.com (NASDAQ: MNDY) jumped 31.4% in the morning session after the company reported impressive fourth-quarter results that blew past Wall Street's expectations for some of the key metrics we track, including sales, profits, and EPS (profits on a per-share basis). 

Notably, net revenue retention expanded to 115% from 111% last quarter, which means the business is retaining and upselling customers at an improved rate. The company added Digital Workforce, a team of AI agents, to its lineup of AI solutions, which includes AI Blocks and Product Power-ups. During the last earnings call, the company discussed the accelerating adoption of these AI solutions. Looking ahead, its revenue guidance for next year (FY 2025)also exceeded expectations. Overall, this was a strong quarter.

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What The Market Is Telling Us

Monday.com’s shares are very volatile and have had 22 moves greater than 5% over the last year. But moves this big are rare even for Monday.com and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 9 months ago when the stock gained 23.8% on the news that the company reported a 'beat and raise' quarter. Monday.com materially improved its net revenue retention this quarter. Its revenue also outperformed Wall Street's estimates. 

Looking ahead, the company raised its full year guidance across the board, all of which is above expectations. The full year operating profit raise was particularly large, showing that the business is more profitable than expected. 

Overall, this quarter's results were great and shareholders should feel optimistic.

Monday.com is up 45.9% since the beginning of the year, and at $337.16 per share, has set a new 52-week high. Investors who bought $1,000 worth of Monday.com’s shares at the IPO in June 2021 would now be looking at an investment worth $1,885.

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