So it’s tougher out there for many of us, but many Cloud and SaaS leaders are still growing at epic rates, even if not quite at the torrid rates of 2021.  SaaStr favorite Monday.com is one of them.  It’s crossed $640,000,000 in ARR, growing a stunning 50%!  Wow.

5 Interesting Learnings:

#1.  $50k+ Customers (Their “Enterprise” Customers) Are Growing the Fastest, at 75%.  Like Asana, Monday’s biggest customers are its fastest-growing segment.  That doesn’t mean huge enterprise customers, but here it’s their $50k+ ACV ones, which now represent 28% of revenue, up from 22% just a year ago.  That’s a fast tilt to being more upmarket.

#2. NRR Remains Strong at 115% for All Customers and 125% for Biggest Customers, But Down Across the Board .  We’ve seen the same thing at most Cloud and SaaS leaders, especially those that sell to SME (Small, Medium, and Enterprise / Larger customers).  NRR is, as expected, highest with the $50k+ customers, at an impressive 125%, but that’s down from 150% at the peak.

#3.  Much, much more efficient in 2023 — and Monday got there rapidly.  We’ve seen the same thing with HubSpot and many other leaders.  Monday has held the line on hiring and costs, but kept up strong growth — the combination of which “flipped the switch” into a radically more efficient model.  In just a year, Monday has gone from fast-growing but cash flow negative to fast-growing… with pretty incredible 24% free cash flow margins.   They got there, in fact, two years ahead of schedule.  At least in the short term, it is turning most of us can do more with about the same headcount in SaaS.

#4.  Product expansion key to its growth — its new Sales CRM already seeing very rapid adoption.  Customers really do want to buy more products from their existing vendors, done right.

#5.  Adding more classic enterprise functionality: Custom Roles, Access Controls, Admin Controls.  You need all this stuff in the enterprise.  Some of us build it at $3m in ARR if we start there.  Monday was slow to build up into the enterprise, but now they’re adding all the classic features you need for really big deals … at $600m+ in ARR. 🙂

And a few other interesting learnings:

#6.  Rapidly Becoming Focused on $50k+ Deals: From 22% of Revenue to 28% in Just ne Year.  We touched on this above, but interesting to see this graph.  Monday didn’t go “enterprise” early, but it went there hard after $500m ARR, and that portion of its revenue is rapidly increasing:

#7.  47% Of Revenue Outside the U.S., and Not Much Change Here.  Not surprising, but helpful to see.

#8. Headcount Growing, But Slowly.  Key to That Impressive Free-Cash Flow.  People are almost all the costs in SaaS.  Getting more efficient in the end means doing more with … more, but not as much “more” as in 2021.  Staying basically flat in headcount for 3 quarters while growing a stunning 50% (!) can do magic for your net margins.

And a great look back from Monday’s founders on their Top 5 Mistakes Scaling here:

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