Monday.com (NASDAQ:MNDY) Beats Q1 Sales Targets, Stock Soars

May 12, 2025 at 07:07 AM EDT

MNDY Cover Image

Project management software maker Monday.com (NASDAQ: MNDY) announced better-than-expected revenue in Q1 CY2025, with sales up 30.1% year on year to $282.3 million. The company expects next quarter’s revenue to be around $293 million, close to analysts’ estimates. Its non-GAAP profit of $1.10 per share was 56.4% above analysts’ consensus estimates.

Is now the time to buy Monday.com? Find out by accessing our full research report, it’s free.

Monday.com (MNDY) Q1 CY2025 Highlights:

Revenue: $282.3 million vs analyst estimates of $276 million (30.1% year-on-year growth, 2.3% beat)
Adjusted EPS: $1.10 vs analyst estimates of $0.70 (56.4% beat)
Adjusted Operating Income: $40.75 million vs analyst estimates of $26.61 million (14.4% margin, 53.2% beat)
The company slightly lifted its revenue guidance for the full year to $1.22 billion at the midpoint from $1.21 billion
Operating Margin: 3.5%, up from -2.3% in the same quarter last year
Free Cash Flow Margin: 38.8%, up from 27.1% in the previous quarter
Customers: 3,444 customers paying more than $50,000 annually
Net Revenue Retention Rate: 115%, in line with the previous quarter
Market Capitalization: $14.13 billion

“Our strong financial performance and disciplined execution position us well to navigate uncertainties ahead ,” said Eliran Glazer, monday.com CFO.

Company Overview

Founded in 2014 and named after the dreaded first day of the work week, Monday.com (NASDAQ: MNDY) is a software-as-a-service platform that helps organizations plan and track work efficiently.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Monday.com’s sales grew at an incredible 42.6% compounded annual growth rate over the last three years. Its growth surpassed the average software company and shows its offerings resonate with customers, a great starting point for our analysis.

This quarter, Monday.com reported wonderful year-on-year revenue growth of 30.1%, and its $282.3 million of revenue exceeded Wall Street’s estimates by 2.3%. Company management is currently guiding for a 24.1% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 23.2% over the next 12 months, a deceleration versus the last three years. Still, this projection is commendable and suggests the market sees success for its products and services.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

Customer Retention

One of the best parts about the software-as-a-service business model (and a reason why they trade at high valuation multiples) is that customers typically spend more on a company’s products and services over time.

Monday.com’s net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 113% in Q1. This means Monday.com would’ve grown its revenue by 12.7% even if it didn’t win any new customers over the last 12 months.

Trending up over the last year, Monday.com has a good net retention rate, proving that customers are satisfied with its software and getting more value from it over time, which is always great to see.

Key Takeaways from Monday.com’s Q1 Results

It was encouraging to see Monday.com beat analysts’ revenue and operating income expectations this quarter. We were also glad its full-year revenue guidance slightly exceeded Wall Street’s estimates. On the other hand, its revenue guidance for next quarter was in line. Zooming out, we think this was a solid quarter. The stock traded up 7% to $297.43 immediately following the results.

So do we think Monday.com is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.

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