Wow, Monday.
It never had a downturn, and just keeps on growing at top-tier rates, selling both to SMBs and now larger enterprises.
Financial Highlights
- Revenue: $282M in Q1 FY25, up 30% YoY (!) with consistent growth each quarter
- Profitability: 90% gross margin, 14% non-GAAP operating margin, significant improvement from negative margins in prior years
- Cash Flow: $110M adjusted free cash flow (39% of revenue), demonstrating strong cash efficiency
- Enterprise Traction: Customers with $50k+ ARR grew 38% YoY to 3,444, while $100k+ ARR customers grew 46% YoY to 1,328
- Retention: 112% net dollar retention rate overall, with enterprise customers ($100k+ ARR) at 117%
It doesn’t get much better.
This is what 12x ARR selling to SMBs++ looks like.
5 Interesting Learnings:
1. Monday.com’s Upmarket Strategy is Working Well
Monday.com is clearly executing an effective enterprise push. While their total customer base is growing at a healthy rate, their enterprise segment is booming with 46% YoY growth in $100k+ ARR customers. This upmarket movement isn’t just about customer counts – larger customers now represent a significantly higher percentage of total ARR. Customers with $100k+ ARR now account for 24% of total ARR (up from 20% in Q1-24), while $50k+ ARR customers represent 37% of ARR (up from 32%). The company is successfully evolving from its SMB roots into a serious enterprise software contender.
2. Their Platform Strategy Creates a Strong Differentiation Moat
Monday.com positions itself as a true platform, not just a point solution. Their “Work OS platform” with multiple product lines (Monday Work Management, Monday Dev, Monday CRM, Monday Service) built on a common code base allows them to differentiate against both rigid off-the-shelf point solutions and complex enterprise software. This architecture gives customers flexibility to adapt the software to their needs without dependency on tech teams, while still offering enterprise-grade capabilities. Their positioning as the “core of all work” creates both expansion opportunities and higher switching costs.
3. Global Expansion Shows Significant Runway Potential
While North America represents 54% of revenue, Monday.com is showing strong global penetration with significant presence in Europe (27%), APAC (8%), Latin America (6%), and MEA (5%). Operating in 200+ markets and spanning 200+ industries demonstrates both their broad appeal and the massive market opportunity still available. Their international diversification provides multiple growth vectors and reduces dependency on any single geographic market.
4. Monday Has Incredible Free Cash Flow Margins
Monday.com has managed the impressive feat of maintaining strong growth while significantly improving profitability metrics. Their sales and marketing expenses as a percentage of revenue dropped from 113% in FY-20 to just 51% in FY-24. This operational discipline has transformed a business with -53% operating margins in FY-20 to one with 14% non-GAAP operating margins in FY-24 and Q1-25. The ability to generate 39% adjusted free cash flow margins while still growing 30% YoY is particularly noteworthy.
5. Monday.com Has Achieved Rule of 40 with Room to Spare
The Rule of 40 (growth rate + profit margin should exceed 40%) is a benchmark for successful SaaS companies. Monday.com is clearly exceeding this metric with 30% YoY growth + 14% operating margin = 44%. Their ability to maintain growth while improving profitability shows they’re not just growing at all costs but building a sustainable business model. With $110M in adjusted free cash flow this quarter alone, they’ve positioned themselves with significant capital to reinvest in growth opportunities, potentially including strategic acquisitions to expand their platform capabilities.
And a Few More Interesting Learnings:
6. Their Customer Base Has Grown 22% CAGR Since 2019 Despite Higher Prices
Monday.com has grown from 90K customers in FY-19 to 245K customers in FY-24, representing a 22% CAGR over five years. What’s particularly impressive is they’ve maintained this growth while simultaneously pushing upmarket and increasing average deal sizes. This suggests they’ve found product-market fit across multiple customer segments, from SMBs to enterprises, and can effectively sell at multiple price points. Few SaaS companies manage to expand both customer counts and average revenue per customer at the same time.
7. NRR and Expansion Revenue Remains Strong at 112%
With a net dollar retention rate of 112% overall and 117% for $100k+ customers, Monday.com continues to demonstrate strong expansion within existing accounts. While these NDR figures have declined from their peak levels of 125% in FY-22, they’ve stabilized and even shown slight improvement over the past year despite challenging macroeconomic conditions. The ability to maintain NDR above 110% at this scale from a still primarily SMB base proves their land-and-expand model continues to work effectively and customers find ongoing value in the platform.
8. They’ve Built a Multi-Product Company That Actually Works
Many SaaS companies struggle when expanding beyond their core product, but Monday.com’s multi-product strategy appears to be working. Their platform approach with Monday Work Management, Monday Dev, Monday CRM, and Monday Service all built on the common Work OS platform creates natural cross-sell opportunities.
9. Customer Acquisition Efficiency Has Significantly Improved
The dramatic decrease in S&M expense as a percentage of revenue (from 113% in FY-20 to 48% in FY-25) highlights Monday.com’s improving customer acquisition efficiency. This suggests their brand recognition, product-led growth motion, and sales execution have all matured. The ability to simultaneously reduce acquisition costs while growing enterprise customers indicates they’ve found more efficient GTM motions, likely leveraging product-led growth to feed their sales-led efforts for larger accounts.
10. They’ve Successfully Navigated the Transition to Profitability
Many high-growth SaaS companies struggle with the transition from growth-at-all-costs to profitable growth, but Monday.com has executed this remarkably well. Their ability to maintain 30% YoY growth while delivering 14% operating margins and 39% adjusted free cash flow margins in Q1-25 puts them in elite company. This successful transition suggests strong leadership, disciplined operational execution, and a fundamentally sound business model with significant pricing power. Most importantly, it gives them strategic flexibility to invest in growth opportunities from a position of financial strength rather than dependency on external capital.
And a great recent deep dive with co-CEO Eran Zinman here:
