Project management software maker Monday.com (NASDAQ: MNDY) fell short of the market’s revenue expectations in Q1 CY2025, but sales rose 30.1% year on year to $282.3 million. Its non-GAAP EPS of $1.10 per share was 56.4% above analysts’ consensus estimates.

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StockStory’s Take

Monday.com’s first quarter results were shaped by increasing enterprise adoption and a surge in customer engagement with its new AI-powered product features. Management highlighted significant momentum across its multi-product suite, emphasizing robust uptake in the work management, CRM, service, and dev offerings. Co-CEO Roy Mann pointed to more than 26 million AI actions performed by users—up over 150% since the end of last year—and noted that these features are helping customers automate workflows and accelerate decision-making. Co-CEO Eran Zinman credited the company’s seasonally strong performance marketing efforts for driving customer additions, particularly in the enterprise and mid-market segments.

Looking ahead, Monday.com’s guidance reflects a cautious stance amid ongoing macroeconomic uncertainty. CFO Eliran Glazer stated that while the company expects continued growth, it is taking a conservative approach to assumptions for net revenue retention and customer expansion due to unpredictable market conditions. Management indicated that AI monetization remains in its early stages and is not yet a significant contributor to the company’s 2025 outlook. Co-CEO Eran Zinman emphasized the importance of expanding upmarket and scaling the enterprise segment, supported by strategic investments in sales, R&D, and the onboarding of a new Chief Revenue Officer. Glazer reaffirmed that guidance factors in minor foreign exchange headwinds and limited revenue from new product lines, reflecting a measured view of near-term growth.

Key Insights from Management’s Remarks

Management attributed first quarter performance to strong enterprise momentum, rapid AI feature adoption, and disciplined efficiency improvements. The addition of a new Chief Revenue Officer signals a shift toward scaling upmarket and refining go-to-market strategy.

• AI feature adoption surge: Monday.com reported rapid uptake of its AI-powered capabilities, with over 26 million AI actions performed by users—more than doubling since year-end. Management cited these tools as driving efficiency and automating complex workflows for customers, although monetization remains in early experimentation.

• Enterprise segment accelerates: The enterprise business was Monday.com’s fastest-growing segment, benefiting from new work management features tailored for large organizations—including AI risk insights and portfolio reporting. Management expects the appointment of Casey George as Chief Revenue Officer to further strengthen this trajectory.

• Performance marketing impact: Seasonally high performance marketing spend in Q1 led to elevated customer additions, particularly for monday dev and service products. Management noted that such investments are typically front-loaded in the year, aligning with observed customer acquisition patterns.

• Product suite expansion: New functionality across the work management, dev, service, and CRM offerings contributed to broader adoption. While CRM continues to find traction in SMB and mid-market, monday service is seeing increasing enterprise penetration.

• Stable geographic demand: Demand remained consistent across North America and other regions, with no significant changes in competitive win rates or customer buying behavior. Management did note ongoing stabilization in European growth, with North America maintaining stronger momentum.

Drivers of Future Performance

Monday.com’s outlook for the coming quarters is shaped by continued enterprise expansion, measured AI monetization, and conservative planning amid macroeconomic uncertainty.

• Enterprise upmarket strategy: Management is prioritizing investments in sales teams and leadership, particularly in enterprise-focused roles, to drive further penetration among large customers. The hiring of a seasoned Chief Revenue Officer is intended to accelerate upmarket momentum and improve go-to-market efficiency.

• AI monetization and product innovation: While customer usage of AI features is expanding rapidly, management stated that revenue from these tools is still minimal and in the early stages of experimentation. The company will continue to invest in AI development and gradually roll out monetization strategies as use cases mature.

• Macroeconomic caution and retention: CFO Eliran Glazer highlighted that guidance assumes conservative net revenue retention and customer growth due to persistent macro uncertainty. Management is closely monitoring potential changes in deal cycles, customer expansion rates, and foreign exchange trends, all of which could influence performance.

Catalysts in Upcoming Quarters

In the next few quarters, the StockStory team will be closely watching (1) the pace of enterprise customer growth and the impact of the new Chief Revenue Officer, (2) progress in AI feature monetization and broader adoption across product lines, and (3) stabilization in geographic performance, particularly in Europe. Continued execution on hiring and efficiency improvements will also be critical for sustaining growth.

Monday.com currently trades at a forward price-to-sales ratio of 12.6×. In the wake of earnings, is it a buy or sell? Find out in our full research report (it’s free).

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