Introduction [Overview](index=12&type=section&id=Introduction_Overview) This section defines monday.com and clarifies that the annual report contains estimates and projections subject to inherent uncertainties and risks - References to 'we,' 'us,' 'our,' 'our business,' 'the Company,' 'monday.com' refer to monday.com Ltd. and its consolidated subsidiaries[30](index=30&type=chunk) - The report contains estimates, projections, and other information concerning the industry and business, which are inherently subject to uncertainties, and actual events may differ materially[31](index=31&type=chunk) [Special Note Regarding Forward-Looking Statements](index=12&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) The report includes forward-looking statements subject to significant risks and uncertainties, including limited operating history, rapid growth management, and foreign currency fluctuations - Forward-looking statements are based on current expectations and projections about future events and financial trends, but involve known and unknown risks and uncertainties[32](index=32&type=chunk) - Key risk factors include: limited operating history, ability to manage rapid growth, foreign currency exchange rate fluctuations, reliance on a single platform, and fluctuations in operating results[32](index=32&type=chunk) - Additional risks cover technology errors, AI/ML offerings, customer acquisition and retention, subscription model, sales cycles, customer support, brand reputation, international operations, acquisitions, ESG, key employee dependence, capital raising, economic conditions, competition, R&D, third-party reliance, security, privacy, taxation, intellectual property, public company operations, and Israeli location[35](index=35&type=chunk)[37](index=37&type=chunk) Part 1 - Who We Are [Company Overview](index=15&type=section&id=Part%201%20-%20Who%20We%20Are_CompanyOverview) monday.com operates a cloud-based 'Work OS' platform, serving over 225,000 customers across 200+ industries and countries - monday.com is a 'Work OS' platform, pioneering a new software category for managing all work, democratizing software power for organizations to build custom applications and tools[38](index=38&type=chunk) - The cloud-based platform is a no-code/low-code framework with modular building blocks, integrating with other systems to create a connective layer and unified workspace[39](index=39&type=chunk) - As of December 31, 2023, monday.com served over **225,000 customers** across 200+ industries in more than 200 countries and territories, supporting thousands of use cases[40](index=40&type=chunk) [Our Growth Strategies](index=17&type=section&id=Our%20Growth%20Strategies) Growth strategies focus on platform evolution, product suite expansion, app marketplace investment, large account value, and global footprint expansion - Strategies include evolving the Work OS platform with significant R&D investments, augmenting vision with a versatile suite of Work OS-based and independent products (monday work management, monday sales CRM, monday dev, WorkCanvas, WorkForms)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) - Growth is also driven by investing in the app marketplace ecosystem, providing more value to and increasing the number of large accounts, and scaling the go-to-market strategy through self-serve and expanding sales-led motions[47](index=47&type=chunk)[48](index=48&type=chunk) - Further strategies involve acquiring new customers, driving increased adoption and expansion within the existing customer base (Net Dollar Retention Rate for 10+ users was **115% for Q4 2023**), and expanding the global footprint through localization and partnerships[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) [Our Success by Numbers](index=18&type=section&id=Our%20Success%20by%20Numbers) monday.com achieved **$729.7 million** revenue in FY2023, a **41% increase**, with a net loss of **$1.9 million** and strong operating cash flow Key Financial Highlights (FY2021-FY2023) | Metric | FY2023 (in millions) | FY2022 (in millions) | FY2021 (in millions) | | :-------------------------------- | :------------------- | :------------------- | :------------------- | | Revenue | $729.7 | $519.0 | $308.2 | | YoY Revenue Growth | 41% | 68% | 91% | | Net Loss | $(1.9) | $(136.9) | $(129.3) | | Net Cash Provided by Operating Activities | $215.4 | $27.1 | $16.4 | | Adjusted Free Cash Flow | $204.9 | $8.1 | $9.9 | [Industry Trends](index=19&type=section&id=Industry%20Trends) Key industry trends include work digitization, distributed models, AI integration, and employee demand for tool consolidation to boost productivity - Organizations are digitizing workflows and reengineering digital processes for speed and efficiency, with global digital transformation spending projected to reach nearly **$3.9 trillion in 2027** (16.1% CAGR 2023-2027)[53](index=53&type=chunk) - Work is increasingly distributed and cross-functional, making software critical for collaboration, data consistency, and business success in hybrid work environments (**41% of US full-time employees work from home or hybrid as of June 2023**)[54](index=54&type=chunk)[55](index=55&type=chunk) - AI is becoming ubiquitous, transitioning from novel use cases to complex features, offering opportunities for leveraging creativity and critical thinking. Employees seek to maximize productivity, with **75% globally believing tool consolidation is a high priority** to save 10+ hours weekly[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) [Our Opportunity](index=20&type=section&id=Our%20Opportunity) monday.com's Work OS democratizes software, addressing a **$101 billion** market in 2023, projected to grow to **$150 billion by 2026** - The monday.com Work OS platform democratizes software, allowing users to create custom applications and work management tools, acting as a unified connective layer across organizational applications and departments[60](index=60&type=chunk) Total Addressable Market (TAM) Estimates | Year | TAM (in billions) | CAGR (2023-2026) | | :--- | :---------------- | :--------------- | | 2023 | $101 | - | | 2026 | $150 | 14% | - The TAM is calculated by summing markets for project and portfolio management (**$6 billion**), collaborative applications (**$39 billion**), CRM applications (**$30 billion**), DevOps software tools (**$17 billion**), and IT service, operations, and request management applications (**$9 billion**)[61](index=61&type=chunk) [Our Platform](index=21&type=section&id=Our%20Platform) monday.com's Work OS is a no-code/low-code platform with modular building blocks, offering flexible tools for custom applications and real-time collaboration - The monday.com Work OS platform is a no-code/low-code solution with modular building blocks, allowing organizations to build custom software applications and work management tools[63](index=63&type=chunk) - Key features include: boards for data capture, customizable items and columns, various views for data manipulation, integrations with external apps, automations for repetitive tasks, and AI capabilities for task generation, formulas, and content creation[64](index=64&type=chunk)[65](index=65&type=chunk) - The platform also offers dashboards for high-level data views, monday workdocs for real-time collaboration, and workspaces for organizing work[65](index=65&type=chunk) [Our Products](index=22&type=section&id=Our%20Products) monday.com offers a suite of products including Work Management, Sales CRM, and Dev, alongside WorkCanvas and WorkForms, supported by an app marketplace with **409 apps** - The product suite includes: monday work management (workflows, projects, portfolios), monday sales CRM (sales cycle, customer data management), and monday dev (product and software development workflows)[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - Independent products include WorkCanvas (digital whiteboard for collaboration) and WorkForms (personalized forms/surveys for organizational insights)[71](index=71&type=chunk)[72](index=72&type=chunk) - The app marketplace extends platform capabilities with **409 apps** (**236 monetized as of Dec 31, 2023**), and monday code provides a secure, serverless environment for developers to build and run apps[75](index=75&type=chunk)[76](index=76&type=chunk) [Key Benefits to Our Customers](index=25&type=section&id=Key%20Benefits%20to%20Our%20Customers) The platform democratizes software, increases efficiency, unifies workspaces, enables data-driven decisions, boosts productivity, and enhances company culture - Customers benefit from democratized software power (no-code/low-code), increased efficiency through digitized operations, and a unified workspace that eliminates silos[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) - The platform enables data-driven decisions, increases productivity by reducing reliance on meetings and automating tasks, and enhances company culture by fostering inclusion, ownership, and clarity[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) [The Components of Our Platform](index=29&type=section&id=The%20Components%20of%20Our%20Platform) The monday.com platform features customizable boards, items, columns, diverse views, collaborative workdocs, forms, automations, and integrations for comprehensive workflow management - Core components include Boards (schemaless database for data capture), Items (rows representing work units), and Columns (customizable data representation)[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - Additional components are Views (visualize data in different ways), monday workdocs (real-time collaborative documents), Forms (capture data from internal/external users), and Automations (eliminate repetitive processes)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) - The platform also features Integrations (connect with external tools like Gmail, Jira, Salesforce) and monday workflows (optimize automations, manage complex workflows, includes AI prompt to workflow)[93](index=93&type=chunk)[94](index=94&type=chunk) [Our Technology and In-House Tools](index=32&type=section&id=Our%20Technology%20and%20In-House%20Tools) monday.com's cloud-based platform leverages AWS and Google Cloud, with mondayDB significantly improving loading speeds and BigBrain providing real-time business intelligence - monday.com's platform is a cloud-based, proprietary SaaS built for resilience and agility, utilizing AWS and Google Cloud Platform data centers[103](index=103&type=chunk) - mondayDB, a core infrastructure upgrade, improves loading speeds for boards (up to **5x faster**) and dashboards (up to **4x faster**) for complex workflows, offering major performance improvements and elasticity at scale[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) - BigBrain, an in-house BI tool, collects and processes over **1.1 billion events per workday**, providing employees real-time access to data for informed decisions and aligning teams around KPIs[107](index=107&type=chunk)[109](index=109&type=chunk) [Our Customers](index=33&type=section&id=Our%20Customers) monday.com serves a diverse and expanding base of over **225,000 customers** across 200+ industries, with over **70% from non-tech sectors** - As of December 31, 2023, monday.com had over **225,000 customers**, a **21% increase** from 186,000 customers in 2022[111](index=111&type=chunk) - Customers span thousands of use cases across more than 200 different industries, with over **70% from traditionally non-tech industries** (e.g., real estate, banking, journalism, construction)[111](index=111&type=chunk) [Research and Development](index=33&type=section&id=Research%20and%20Development) The 'builders group' comprises **409 employees** in R&D, focusing on continuous innovation and rapid product improvement with a lean structure and high revenue impact - The R&D group, or 'builders group,' consists of autonomous, multidisciplinary teams (engineers, analysts, designers, product managers) empowered for rapid execution and daily product updates[112](index=112&type=chunk)[113](index=113&type=chunk) - As of December 31, 2023, the builders group had **409 employees**, investing substantial resources in R&D to enhance the Work OS and build new products, with a significant impact on revenue[114](index=114&type=chunk) [CRO Team](index=34&type=section&id=CRO%20Team) The CRO team centralizes client-facing operations, combining self-serve and sales-led motions, marketing, customer success, and a global partner ecosystem with **219 channel partners** - The CRO team consolidates client-facing operations, including self-serve, direct sales, customer success, and customer experience, to ensure a seamless customer journey[118](index=118&type=chunk)[119](index=119&type=chunk) - Marketing expands brand awareness and generates leads through organic, online, out-of-home campaigns, and account-based marketing, targeting both business users and decision-makers[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - Sales teams acquire new customers and expand usage within existing organizations, leveraging the product suite for cross-selling and upselling. The global partner ecosystem includes **219 channel partners** in 50+ countries, offering **35 partner-built solutions** and 67 monetized applications on the marketplace[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) - Customer success drives value and adoption, while the customer experience team provides 24/7 support, self-service knowledge, webinars, and community access, with extended services for enterprise customers[130](index=130&type=chunk)[131](index=131&type=chunk) [Our Competition](index=36&type=section&id=Our%20Competition) monday.com competes in the new 'Work OS' category against project management, CRM, and software development tools, leveraging its open, modular, and flexible platform - monday.com competes in a new 'Work OS' category across multiple markets, including project/work management (Asana, Smartsheet, Notion, Atlassian Trello, ClickUp, Freshworks), CRM (SugarCRM, Pipedrive, Zoho Corp.), and software development tools (Atlassian Jira)[132](index=132&type=chunk)[133](index=133&type=chunk) - Key competitive factors include its open and modular infrastructure, leading flexibility and adaptability, and ability to scale vertical and horizontal end-to-end products[132](index=132&type=chunk)[133](index=133&type=chunk) [Intellectual Property](index=37&type=section&id=Intellectual%20Property) monday.com protects its IP through patents, designs, copyrights, trade secrets, and trademarks, holding **61 granted U.S. patents** as of December 31, 2023 - Intellectual property protection relies on patents, designs, copyright, trade secret, domain names, trademark rights, and contractual restrictions[134](index=134&type=chunk) - As of December 31, 2023, the company had **61 granted U.S. patents**, 34 U.S. patent-pending applications, 9 allowed U.S. patents, 2 EU patent-pending applications, 1 allowed Israeli patent, 1 Israeli patent-pending application, and 6 PCT applications[135](index=135&type=chunk) - Trademark rights protect its name, logo, and brand elements in the U.S. and other jurisdictions, with ongoing efforts to pursue additional registrations[136](index=136&type=chunk) [Legal Proceedings](index=37&type=section&id=Legal%20Proceedings) monday.com is not currently involved in any material litigation or regulatory proceedings that could significantly impact its business or financial condition - monday.com is not a party to any material or pending litigation or regulatory proceedings that could have a material adverse effect on its business, operating results, financial condition, or cash flows[137](index=137&type=chunk) [monday.com ESG](index=37&type=section&id=monday.com%20ESG) The 'monday.com way' culture emphasizes transparency, trust, customer-centricity, a product-first approach, ownership, speed, and inclusivity - The 'monday.com way' culture is based on transparency and trust, customer-centricity, a product-first approach, ownership and impact, speed and execution, and inclusivity[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - Transparency and trust reduce complexity and increase accountability. Customer-centricity prioritizes satisfaction. A product-first approach ensures intuitive and accessible design. Ownership and impact empower employees. Speed and execution drive rapid learning and delivery. Inclusivity is embedded in company values and user experience[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) [Privacy and Security](index=38&type=section&id=Privacy%20and%20Security) monday.com prioritizes data security and privacy, adhering to international standards like ISO 27001 and conducting annual security assessments - monday.com is committed to providing a highly secure and reliable environment, aligning with strict security and data protection measures to meet needs across all verticals, including healthcare and banking[143](index=143&type=chunk) - Security efforts include annual red team assessments, applicative penetration tests, infrastructure attack simulations, a private bug bounty program, and assumed breach simulations, performed by leading third-party security consulting companies[144](index=144&type=chunk) - Security strategy and controls are based on international standards (ISO 27001, ISO 27018, OWASP Top 10), subject to independent annual SOC2 Audits, and include HIPAA-compliant features[145](index=145&type=chunk) - A dedicated privacy team builds and executes the privacy program, conducting product/feature reviews, privacy/impact assessments, and supporting data protection requests, while monitoring industry and regulatory guidance[146](index=146&type=chunk) [Our Facilities](index=39&type=section&id=Our%20Facilities) monday.com's headquarters are in Tel Aviv, Israel, with global offices designed to support an open, transparent, and collaborative work culture - Current corporate headquarters are in Tel Aviv, Israel (**200,000 sq ft**, expanding by **50,000 sq ft by July 2024**)[147](index=147&type=chunk) - Additional offices are leased in New York City, Miami, Chicago, Denver, São Paulo, London, Warsaw, Sydney, Melbourne, and Tokyo, with plans for further global expansion[148](index=148&type=chunk) - Office designs promote an open workspace, transparency, and data-driven decision-making, with meeting rooms optimized for global collaboration and implementation of smart energy/waste management systems[149](index=149&type=chunk) [Our Workforce](index=40&type=section&id=Our%20Workforce) As of December 31, 2023, monday.com had **1,854 employees** globally, committed to DEI, employee wellness, and continuous learning and development - As of December 31, 2023, monday.com had **1,854 employees** worldwide[151](index=151&type=chunk) - The company is committed to Diversity and Inclusion, strategically sourcing candidates from underrepresented backgrounds and supporting **10 Employee Resource Groups (ERGs)**[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) - Employee wellness programs include physical fitness, nutritionist services, therapy sessions, and meditation. Learning and development programs offer management workshops and tailored external/internal learning resources, supported by an annual budget for profession-specific training[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) - A rewards program provides market-competitive compensation and benefits to recruit and retain top talent globally[160](index=160&type=chunk) [The monday.com Digital Lift Initiative](index=42&type=section&id=The%20monday.com%20Digital%20Lift%20Initiative) Launched in May 2021, the Digital Lift Initiative bridges the digital divide for nonprofits, funded by **10% of monday.com's equity** and employee volunteer hours - The Digital Lift Initiative, established in May 2021, aims to close the digital divide for nonprofits by providing technology and support to enhance efficiency[161](index=161&type=chunk)[166](index=166&type=chunk) - It is funded by a pledge of **10% of monday.com's equity** (2% reserved pre-IPO, 8% to be donated gradually with a 1% annual cap) and employees volunteering over **4,000 hours in 2023**[163](index=163&type=chunk) - Offerings include discounted monday.com products for nonprofits, customized templates (Grants, Donor, Volunteer management), technology grants, and implementation support (webinars, academies, volunteer help)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) [Emergency Response Missions](index=44&type=section&id=Emergency%20Response%20Missions) The Emergency Response Team (ERT) provides on-the-ground support and digital transformation for aid organizations during disasters, completing over **30 projects in 26 countries** - The Emergency Response Team (ERT) scales aid organizations' impact during disasters, providing on-the-ground support and digital transformation for preparedness, response, and recovery[171](index=171&type=chunk) - The ERT has operated in **26 countries**, completing over **30 projects**, including building a digital solution for refugee relief data collection in Latin America and managing needs assessment and relief distribution after the 2023 Morocco earthquake[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) [Organizational Structure](index=45&type=section&id=Organizational%20Structure) monday.com Ltd. is an Israeli company with seven wholly-owned subsidiaries in the US, Australia, UK, Brazil, Japan, Poland, and Singapore, providing business development and customer services - monday.com Ltd. is organized under the laws of the State of Israel[175](index=175&type=chunk) Key Subsidiaries | Name of subsidiary | Place of incorporation | | :----------------- | :--------------------- | | monday.com Inc. | Delaware, United States | | monday.com Pty Ltd. | Australia | | monday.com UK 2020 Ltd. | United Kingdom | | monday.com Ltda. | Brazil | | monday.com K.K. | Japan | | monday.com SP. Z O.O. | Poland | | monday.com PTE. LTD. | Singapore | - Subsidiaries primarily engage in business development, presale, and customer success services[175](index=175&type=chunk) Part 2 - Directors and Senior Management [Executive Officers](index=45&type=section&id=Executive%20Officers) This section lists monday.com's executive officers, including Co-Founders and Co-CEOs Roy Mann and Eran Zinman, CFO Eliran Glazer, and other key leaders Executive Officers and Employee Directors | Name | Age | Position | | :--------- | :-- | :----------------------------------- | | Roy Mann | 45 | Co-Founder, Co-Chief Executive Officer, Director | | Eran Zinman | 40 | Co-Founder, Co-Chief Executive Officer, Director | | Eliran Glazer | 52 | Chief Financial Officer | | Daniel Lereya | 39 | Chief Product and Technology Officer | | Yoni Osherov | 46 | Chief Revenue Officer | | Shiran Nawi | 40 | Chief People and Legal Officer | - Roy Mann and Eran Zinman are Co-Founders and Co-CEOs, with extensive experience in technology leadership and startup ventures[179](index=179&type=chunk)[180](index=180&type=chunk) - Eliran Glazer serves as CFO, Daniel Lereya as Chief Product and Technology Officer, Yoni Osherov as Chief Revenue Officer, and Shiran Nawi as Chief People and Legal Officer, each bringing significant industry expertise[181](index=181&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) [Directors](index=46&type=section&id=Directors) This section details monday.com's non-employee directors, including Chairperson Jeff Horing, bringing diverse experience from private equity, venture capital, and technology leadership Non-Employee Directors | Name | Age | Position | | :------------ | :-- | :------------------------------------------------ | | Jeff Horing | 60 | Independent Director, Chairperson of the Board of Directors | | Aviad Eyal | 53 | Independent Director | | Avishai Abrahami | 52 | Independent Director | | Gili Iohan | 48 | Independent Director | | Ronen Faier | 53 | Independent Director | - Jeff Horing is a Co-Founder and Managing Director of Insight Partners. Aviad Eyal is Co-Founder and Managing Partner of Entrée Capital. Avishai Abrahami is Co-Founder and CEO of Wix.com Ltd. Gili Iohan is a partner at ION Crossover Partners. Ronen Faier is CFO of SolarEdge Technologies Inc[186](index=186&type=chunk)[187](index=187&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) Part 3 - Major Shareholders and Related Party Transactions [Major Shareholders](index=48&type=section&id=Major%20Shareholders) As of December 31, 2023, monday.com had **48,923,903 ordinary shares** outstanding, with Roy Mann (11.2%), Sonnipe Limited (8.5%), and T. Rowe Price Associates (6.4%) as key beneficial owners - As of December 31, 2023, the registrant had **48,923,903 ordinary shares** outstanding[14](index=14&type=chunk) Beneficial Ownership of Shares (as of December 31, 2023) | Name of Beneficial Owner | Number of Shares | % | | :----------------------- | :--------------- | :-- | | **Principal Shareholders** | | | | Sonnipe Limited | 4,157,868 | 8.5 | | T. Rowe Price Associates | 3,133,262 | 6.4 | | **Directors and Executive Officers** | | | | Roy Mann | 5,481,890 | 11.2 | | Eran Zinman | 2,148,070 | 4.4 | | All executive officers and directors as a group (11 persons) | 8,627,766 | 17.6 | - All shareholders have the same voting rights. No single customer accounts for more than **1% of revenues**, and the top 100 customers accounted for less than **10% of revenues** for FY2023 and FY2022[195](index=195&type=chunk)[216](index=216&type=chunk) [Related Party Transactions](index=50&type=section&id=Related%20Party%20Transactions) monday.com conducts related party transactions on favorable terms, including employment agreements, equity awards with acceleration provisions, and an Investors' Rights Agreement with major shareholders - Related party transactions are conducted on terms no more or less favorable than those with unaffiliated third parties[202](index=202&type=chunk) - Agreements with directors and officers include written employment agreements with confidentiality and invention ownership provisions, and equity awards (options and RSUs) with acceleration provisions upon certain merger/acquisition/change of control transactions[205](index=205&type=chunk)[206](index=206&type=chunk) - The company has exculpation, indemnification, and insurance agreements with office holders. An Investors' Rights Agreement grants certain major shareholders, including Roy Mann and Sonnipe Limited, the right to demand or request registration of their shares[207](index=207&type=chunk)[208](index=208&type=chunk) Part 4 - Operating and Financial Review and Prospects [Overview](index=54&type=section&id=Part%204%20-%20Operating%20and%20Financial%20Review%20and%20Prospects_Overview) This section highlights monday.com's hyper-growth, diversified customer base, strong growth in large accounts, and consistent Net Dollar Retention Rate - monday.com has experienced rapid growth since its product launch in 2014[213](index=213&type=chunk) - The company focuses on growing its large and diversified customer base, which exceeded **225,000 paying customers** as of December 31, 2023, up from 186,000 in 2022. No single customer accounts for more than **1% of revenues**[215](index=215&type=chunk)[216](index=216&type=chunk) - Customers with more than 10 users are a core focus, accounting for **78% of ARR in 2023**. Enterprise customers (>$50K ARR) grew by **56% in 2023 to 2,295**, and those with >$100K ARR grew by **58% to 833**[219](index=219&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - Net Dollar Retention Rate for customers with more than 10 users was **115% for Q4 2023**, with an overall rate of **110% for all customers**, indicating expansion within the customer base despite a slight slowdown due to macroeconomic factors[226](index=226&type=chunk) [A. Operating Results](index=56&type=section&id=A.%20Operating%20Results) monday.com achieved a net loss of **$1.9 million** in 2023, a significant improvement, driven by **41% revenue growth** and managed operating expenses Consolidated Statements of Operations (in millions) | Metric | 2023 | 2022 | 2021 | | :-------------------------- | :----- | :----- | :----- | | Revenue | $729.7 | $519.0 | $308.2 | | Cost of revenue | $80.6 | $66.5 | $39.0 | | Gross profit | $649.1 | $452.5 | $269.1 | | Research and development | $156.5 | $127.0 | $73.7 | | Sales and marketing | $438.4 | $392.1 | $268.1 | | General and administrative | $92.7 | $85.4 | $53.5 | | Total operating expenses | $687.6 | $604.5 | $395.3 | | Operating loss | $(38.6) | $(152.0) | $(126.1) | | Financial income (expense), net | $41.9 | $22.6 | $(0.8) | | Income (loss) before income taxes | $3.3 | $(129.5) | $(127.0) | | Income tax expenses | $(5.2) | $(7.4) | $(2.3) | | Net loss | $(1.9) | $(136.9) | $(129.3) | Operating Expenses as Percentage of Revenue | Expense Category | 2023 | 2022 | 2021 | | :----------------------- | :--- | :--- | :--- | | Cost of revenue | 11% | 13% | 13% | | Research and development | 21% | 24% | 24% | | Sales and marketing | 60% | 76% | 87% | | General and administrative | 13% | 16% | 17% | | Total operating expenses | 94% | 116% | 128% | | Operating loss | (5)% | (29)% | (41)% | | Net loss | 0% | (26)% | (42)% | - Revenue increased by **41% to $729.7 million** in 2023, driven by new customers and expansion within existing ones (Net Dollar Retention Rate of **110%**). Cost of revenue increased by **21% to $80.6 million**, primarily due to business growth, salaries, indirect taxes, hosting, and processing fees[251](index=251&type=chunk)[252](index=252&type=chunk) - R&D expenses rose by **23% to $156.5 million** due to increased personnel and share-based compensation. Sales and marketing expenses increased by **12% to $438.4 million**, driven by marketing, advertising, and partner commissions. G&A expenses increased by **9% to $92.7 million**, mainly due to salaries, rent, and global office expansion[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) - Financial income, net, increased by **86% to $41.9 million**, primarily due to higher interest on money market funds. Income tax expenses decreased by **30% to $5.2 million**, driven by tax benefits related to share-based compensation[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk) Components of Results of Operations This sub-section outlines monday.com's revenue from cloud-based subscriptions and categorizes expenses into R&D, sales & marketing, and general & administrative, along with financial income and income tax - Revenue is mainly derived from monthly or annual subscription agreements for access to the cloud-based Work OS platform[229](index=229&type=chunk) - Cost of revenue includes merchant/credit card fees, hosting, capitalized software amortization, subcontractor costs, salaries, and share-based compensation[230](index=230&type=chunk) - Operating expenses consist of R&D (expected to increase in absolute terms, remain stable as % of revenue), sales and marketing (expected to increase in absolute terms, decline as % of revenue), and general and administrative (expected to increase in absolute terms, remain stable as % of revenue)[232](index=232&type=chunk)[234](index=234&type=chunk)[239](index=239&type=chunk)[241](index=241&type=chunk) Comparison of Period-to-Period Results of Operations This sub-section presents consolidated statements of operations for 2023, 2022, and 2021, detailing revenue, gross profit, operating expenses, and net loss Consolidated Statements of Operations (in millions) | Metric | 2023 | 2022 | 2021 | | :-------------------------- | :----- | :----- | :----- | | Revenue | $729.7 | $519.0 | $308.2 | | Cost of revenue | $80.6 | $66.5 | $39.0 | | Gross profit | $649.1 | $452.5 | $269.1 | | Operating loss | $(38.6) | $(152.0) | $(126.1) | | Net loss | $(1.9) | $(136.9) | $(129.3) | Share-Based Compensation Expense (in millions) | Category | 2023 | 2022 | 2021 | | :----------------------- | :----- | :----- | :----- | | Cost of revenue | $6.3 | $10.4 | $7.7 | | Research and development | $38.7 | $33.0 | $21.8 | | Sales and marketing | $25.4 | $33.5 | $23.1 | | General and administrative | $29.7 | $28.1 | $20.9 | | Total | $100.2 | $104.9 | $73.5 | Comparison of the Years Ended December 31, 2023 and 2022 This sub-section details monday.com's financial performance comparison between 2023 and 2022, showing **41% revenue growth** and significant changes in expenses and financial income Revenue Comparison (2023 vs. 2022) | Metric | 2023 (in millions) | 2022 (in millions) | $ Change (in millions) | % Change | | :------- | :------------------ | :------------------ | :------- | :------- | | Revenues | $729.7 | $519.0 | $210.7 | 41% | Cost of Revenue and Gross Profit Comparison (2023 vs. 2022) | Metric | 2023 (in millions) | 2022 (in millions) | $ Change (in millions) | % Change | | :-------------- | :------------------ | :------------------ | :------- | :------- | | Cost of revenue | $80.6 | $66.5 | $14.1 | 21% | | Gross profit % | 89% | 87% | - | 2% | | **Key Drivers:** | | | | | | Salaries & related expenses | +$2.5 | | | | | Indirect taxes | +$3.2 | | | | | Hosting expenses | +$3.0 | | | | | Processing fees | +$2.2 | | | | | Third party consulting | +$4.0 | | | | | Allocated overhead | +$2.4 | | | | | Amortization of capitalized software | +$1.1 | | | | | Share-based compensation | -$4.1 | | | | Operating Expenses Comparison (2023 vs. 2022) | Expense Category | 2023 (in millions) | 2022 (in millions) | $ Change (in millions) | % Change | | :----------------------- | :------------------ | :------------------ | :------- | :------- | | Research and development | $156.5 | $127.0 | $29.5 | 23% | | Sales and marketing | $438.4 | $392.1 | $46.3 | 12% | | General and administrative | $92.7 | $85.4 | $7.3 | 9% | | Total operating expenses | $687.6 | $604.5 | $83.1 | 14% | Financial Income (Expense), Net Comparison (2023 vs. 2022) | Metric | 2023 (in millions) | 2022 (in millions) | $ Change (in millions) | % Change | | :-------------------------- | :------------------ | :------------------ | :------- | :------- | | Financial income (expense), net | $41.9 | $22.6 | $19.4 | 86% | | **Key Driver:** | | | | | | Higher interest on money market funds | +$23.3 | | | | Income Tax Expenses Comparison (2023 vs. 2022) | Metric | 2023 (in millions) | 2022 (in millions) | $ Change (in millions) | % Change | | :---------------- | :------------------ | :------------------ | :------- | :------- | | Income Tax Expenses | $5.2 | $7.4 | $(2.2) | (30%) | | **Key Driver:** | | | | | | Tax benefits from share-based compensation | | | | | [B. Liquidity and Capital Resources](index=64&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) As of December 31, 2023, monday.com held **$1,116.1 million** in cash, generated **$215.4 million** from operations, and maintains sufficient liquidity for the foreseeable future Cash and Cash Equivalents & Deferred Revenue | Metric | As of Dec 31, 2023 (in millions) | As of Dec 31, 2022 (in millions) | | :---------------------- | :------------------------------- | :------------------------------- | | Cash and cash equivalents | $1,116.1 | $885.9 | | Deferred revenue | $269.5 | $200.5 | Summary Consolidated Cash Flow Information (in millions) | Cash Flow Activity | 2023 | 2022 | 2021 | | :------------------------------------ | :----- | :----- | :----- | | Net cash provided by operating activities | $215.4 | $27.1 | $16.4 | | Net cash used in investing activities | $(10.5) | $(19.0) | $(3.6) | | Net cash provided by (used in) financing activities | $25.3 | $(9.1) | $742.3 | - Net cash provided by operating activities in 2023 was **$215.4 million**, driven by a net loss of **$1.9 million**, adjusted for non-cash charges (**$109.2 million**) and net cash inflows from changes in operating assets and liabilities (**$108.1 million**), including a **$68.9 million increase in deferred revenue**[275](index=275&type=chunk) - Cash used in investing activities was **$10.5 million** in 2023, primarily for property and equipment purchases and capitalized software development. Cash provided by financing activities was **$25.3 million**, mainly from share option exercises and tax advances[276](index=276&type=chunk)[277](index=277&type=chunk) [C. Research and Development, Patents and Licenses, etc.](index=66&type=section&id=C.%20Research%20and%20Development,%20Patents%20and%20Licenses,%20etc.) This section refers to previous discussions in 'Part 1 - Who We Are' and 'Part 4 - Operating and Financial Review and Prospects - Operating Results' for R&D details [D. Trend Information](index=66&type=section&id=D.%20Trend%20information) No material adverse trends, uncertainties, demands, commitments, or events have been identified since December 31, 2023, that would significantly impact financial results - No material adverse trends, uncertainties, demands, commitments, or events have been identified since December 31, 2023, that would significantly impact net revenue, income, profitability, liquidity, or capital resources[280](index=280&type=chunk) [E. Critical Accounting Estimates](index=66&type=section&id=E.%20Critical%20Accounting%20Estimates) Critical accounting estimates, particularly revenue recognition for cloud-based subscriptions, involve significant judgment in identifying contracts, performance obligations, and transaction price - Critical accounting estimates involve significant estimation uncertainty and can materially impact financial condition or results of operations, based on management's best judgment and historical experience[281](index=281&type=chunk)[282](index=282&type=chunk) - Revenue recognition for cloud-based Work OS subscriptions is a critical estimate. Revenue is recognized ratably over the contract term, as customers are granted continuous access to the platform (service contracts)[283](index=283&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) - The process involves identifying contracts, performance obligations (generally a single obligation for platform access and support), determining transaction price (excluding indirect taxes), and allocating price to obligations. Contract liabilities (deferred revenue) are recorded for upfront payments[286](index=286&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk) [F. Recently Issued Accounting Pronouncements](index=68&type=section&id=F.%20Recently%20Issued%20Accounting%20Pronouncements) This section refers to Note 2 of the consolidated financial statements for details on recently issued accounting pronouncements - A description of recently issued accounting pronouncements that may potentially impact the Company's financial position, results of operations or cash flows is disclosed in Note 2 to the audited consolidated financial statements[295](index=295&type=chunk) [G. Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=G.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) monday.com faces market risks from foreign currency exchange rates (NIS vs USD) and interest rates, mitigated by a hedging program for currency exposure - The company's primary market risk exposure is from foreign currency exchange rates and interest rates[296](index=296&type=chunk) - Most revenue is in USD, but a material portion of expenses (primarily payroll and rent) are in NIS, creating foreign currency exposure. A **5% decrease in USD to NIS exchange rate** would increase cost of revenue and operating expenses by approximately **1%**[297](index=297&type=chunk)[299](index=299&type=chunk) - A hedging program using short-term foreign currency contracts (notional amount **$157.4 million as of Dec 31, 2023**) is in place to reduce foreign exchange risks, but does not eliminate impact. The company has no significant interest rate risk exposure due to no long-term loans[300](index=300&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk) Part 5 - Consolidated Statements and Additional Financial Information [Consolidated Financial Statements](index=70&type=section&id=Consolidated%20Financial%20Statements) monday.com's consolidated financial statements are appended to the annual report, starting on page 170 - The consolidated financial statements are appended to this annual report, starting at page 170[306](index=306&type=chunk) [Controls and Procedures](index=70&type=section&id=Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes during the year - As of December 31, 2023, disclosure controls and procedures were effective at the reasonable assurance level[307](index=307&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2023, based on COSO criteria[309](index=309&type=chunk) - Brightman Almagor Zohar & Co. issued an unqualified attestation report on the effectiveness of internal control over financial reporting. No material changes occurred in internal control over financial reporting during 2023[310](index=310&type=chunk)[312](index=312&type=chunk) [Principal Accountant Fees and Services](index=71&type=section&id=Principal%20Accountant%20Fees%20and%20Services) Audit fees paid to Brightman Almagor Zohar & Co. were **$700,000** in 2023 and **$650,000** in 2022, with all services pre-approved by the Audit Committee Principal Accountant Fees (in thousands) | Fee Type | 2023 | 2022 | | :--------- | :--- | :--- | | Audit fees | $700 | $650 | | Tax Fees | $83 | $99 | | Total fees | $783 | $749 | - Audit fees cover professional services for annual consolidated financial statements and quarterly reviews. Tax fees cover tax compliance, advice, and audits[313](index=313&type=chunk)[314](index=314&type=chunk) - All audit and non-audit services provided by the independent accountant in 2023 and 2022 were approved in accordance with the Audit Committee's pre-approval policy[315](index=315&type=chunk) [Legal Proceedings](index=72&type=section&id=Legal%20Proceedings) monday.com is not currently involved in any material litigation, though ordinary course legal proceedings can be costly and divert management resources - The company is not currently a party to any material litigation and is not aware of any pending or threatened material legal or administrative proceedings[317](index=317&type=chunk) - Litigation, even if without merit, can adversely impact the company due to defense and settlement costs, and diversion of management resources[317](index=317&type=chunk) [Dividend Policy](index=72&type=section&id=Dividend%20Policy) monday.com has never paid dividends and does not anticipate doing so, intending to retain future earnings for operations and business expansion - monday.com has never declared or paid any dividends on its ordinary shares and does not anticipate paying any in the foreseeable future[318](index=318&type=chunk) - The company intends to retain future earnings to finance operations and expand its business[318](index=318&type=chunk) - The board of directors has sole discretion on dividend payments, considering future operations, earnings, capital requirements, financial condition, and contractual restrictions[319](index=319&type=chunk) [Significant Changes](index=72&type=section&id=Significant%20Changes) No significant changes have occurred since December 31, 2023, other than those already disclosed in this annual report - No significant changes have occurred since December 31, 2023, except as otherwise disclosed in this annual report[320](index=320&type=chunk) [Taxation](index=72&type=section&id=Taxation) This section outlines Israeli and U.S. tax considerations, including corporate tax rates, benefits for technological enterprises, and potential PFIC status for U.S. holders - Israeli resident companies are generally subject to a **23% corporate tax rate**, but may benefit from reduced rates as a 'Preferred Technological Enterprise' (**12% on qualifying income**)[325](index=325&type=chunk)[339](index=339&type=chunk) - Non-Israeli residents are generally subject to Israeli capital gains tax on disposition of shares in Israeli companies, but exemptions may apply under tax treaties (e.g., United States-Israel Tax Treaty) or for shares purchased after listing on a foreign exchange[344](index=344&type=chunk)[345](index=345&type=chunk)[347](index=347&type=chunk) - Dividends paid to non-Israeli residents are generally subject to a **25% Israeli income tax withholding** (**20% if from a Preferred Technological Enterprise**), with potential reductions under tax treaties (e.g., 25% or 12.5% for Treaty U.S. Residents)[349](index=349&type=chunk)[350](index=350&type=chunk) - For U.S. Holders, dividends are generally ordinary income from foreign sources. Capital gains on share disposition are typically U.S. source income. The company believes it was not a PFIC for 2023 and does not expect to be one in the foreseeable future, but this is an annual factual determination[360](index=360&type=chunk)[365](index=365&type=chunk)[367](index=367&type=chunk) Part 6 - Risk Factors [Risk Factors Summary](index=87&type=section&id=Risk%20Factors%20Summary) This section summarizes principal risks across business, market, third parties, privacy, taxation, IP, public company operations, Israeli location, Digital Lift Initiative, and legal/regulatory matters - Key risks include: limited operating history, managing rapid growth, foreign currency exposure, reliance on a single platform, quarterly fluctuations, technology errors, AI/ML risks, customer acquisition/retention, subscription revenue recognition, sales cycle length, customer support, brand reputation, corporate culture, government restrictions, international operations, compliance, acquisitions, ESG, climate change, key employee dependence, capital raising, economic conditions, and market competition[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk) - Additional risks relate to: third-party interoperability, reliance on app stores/search engines, service interruptions, security incidents, privacy/data protection laws (GDPR, CCPA, PPL), AI regulation, tax law changes, intellectual property protection, founder share veto rights, foreign private issuer status, Israeli law provisions, dividend policy, the Digital Lift Initiative's efficacy, and various legal/regulatory proceedings[378](index=378&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk)[384](index=384&type=chunk) [Risks Related to Our Business and Industry](index=87&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) monday.com faces risks from its limited operating history, challenges of rapid growth, increasing operating expenses, foreign currency fluctuations, and reliance on a single platform - Limited operating history at current scale makes revenue prediction and business evaluation difficult, with historical results not necessarily indicative of future performance[384](index=384&type=chunk) - Failure to effectively manage rapid growth in employees, customers, and offices could impair business plan execution and customer satisfaction, requiring significant capital and management resources[387](index=387&type=chunk)[388](index=388&type=chunk) - Anticipated increases in operating expenses (personnel, infrastructure, marketing, R&D) may prevent sustained profitability, as the market for the platform is rapidly evolving[389](index=389&type=chunk) - Exposure to foreign currency exchange rate fluctuations, especially NIS against USD (**22% of 2023 expenses in NIS**), can materially affect financial results, despite hedging efforts[390](index=390&type=chunk)[391](index=391&type=chunk) - Deriving nearly **100% of revenue from a single platform** makes the company vulnerable to changes in market demand, competition, and technological developments[392](index=392&type=chunk) - Quarterly fluctuations in operating results are expected due to factors like demand, retention rates, conversion of trial users, acquisition costs, macroeconomic conditions, and timing of expenses[394](index=394&type=chunk)[395](index=395&type=chunk) [Risks Related to Our Market and Competitive Landscape](index=88&type=section&id=Risks%20Related%20to%20Our%20Market%20and%20Competitive%20Landscape) monday.com operates in a highly competitive and rapidly changing 'Work OS' market, facing competition from various software providers and risks from failing to innovate or adapt to new technologies like AI - The market for monday.com's 'Work OS' is new, highly competitive, fragmented, and subject to rapid technological change, shifting user needs, and new entrants[449](index=449&type=chunk)[450](index=450&type=chunk) - Competition comes from project/work management (Asana, Smartsheet), CRM (SugarCRM, Pipedrive), and software development tools (Atlassian Jira) providers[450](index=450&type=chunk) - Competitive success depends on introducing new features, increasing product acceptance, continued workplace digitization, maintaining brand reputation, and community engagement[451](index=451&type=chunk) - Larger competitors may leverage broader offerings, product bundling, or closed platforms, making it difficult to compete. Rapid changes due to AI, partnerships, or consolidation could further impact the market[452](index=452&type=chunk)[453](index=453&type=chunk) - Failure to maintain adequate R&D resources and introduce new products/features could harm competitiveness and financial results, as R&D cycles are technically challenging and expensive[455](index=455&type=chunk) [Risks Related to Third Parties](index=89&type=section&id=Risks%20Related%20to%20Third%20Parties) monday.com's success depends on third-party interoperability, app store reliance, and cloud infrastructure, with risks from policy changes, app quality, and service interruptions - Platform interoperability with third-party software (e.g., Google, Microsoft) is critical; changes to APIs, terms of service, or preferential treatment of competitors could harm business[456](index=456&type=chunk)[457](index=457&type=chunk)[458](index=458&type=chunk) - Reliance on third-party application stores (Apple, Google) for mobile app distribution means potential risks from changes in their policies, fees, or competitive actions[462](index=462&type=chunk)[463](index=463&type=chunk) - Growth depends on strategic relationships with third parties, including app developers and integrated services; issues with third-party apps (quality, security, support) could adversely affect business and reputation[464](index=464&type=chunk)[465](index=465&type=chunk) - Reliance on web search engines (Google, Facebook) for traffic means algorithm changes or increased marketing costs could harm customer acquisition[466](index=466&type=chunk)[467](index=467&type=chunk) - Interruptions or delays from third-party infrastructure providers (e.g., AWS data centers) due to errors, attacks, or capacity constraints could lead to service outages, data loss, reputational damage, and financial penalties[468](index=468&type=chunk)[469](index=469&type=chunk)[470](index=470&type=chunk)[472](index=472&type=chunk) [Risks Related to Privacy, Data, and Cybersecurity](index=89&type=section&id=Risks%20Related%20to%20Privacy,%20Data,%20and%20Cybersecurity) monday.com faces significant cybersecurity risks and stringent, evolving global privacy laws (GDPR, CCPA, PPL), with non-compliance risking fines, litigation, and reputational damage - Reliance on IT systems and third-party vendors exposes the company to evolving cybersecurity risks, including unauthorized access, data loss, and system disruptions from various attacks (malware, phishing, ransomware, nation-state actors)[473](index=473&type=chunk)[474](index=474&type=chunk) - Security incidents could lead to litigation, regulatory fines, reputational damage, and increased costs for remediation and protection. Past incidents have not been material, but future ones could be[475](index=475&type=chunk)[476](index=476&type=chunk)[478](index=478&type=chunk)[479](index=479&type=chunk) - The company is subject to stringent and changing global privacy and data protection laws (GDPR, CCPA/CPRA, Israeli PPL), with non-compliance risking significant penalties, investigations, and civil claims[484](index=484&type=chunk)[485](index=485&type=chunk)[487](index=487&type=chunk)[489](index=489&type=chunk)[490](index=490&type=chunk)[491](index=491&type=chunk)[493](index=493&type=chunk)[494](index=494&type=chunk) - Evolving cross-border data transfer restrictions (e.g., post-Privacy Shield invalidation, DPF challenges) and data localization requirements create uncertainty and may limit international operations and service adoption[497](index=497&type=chunk)[498](index=498&type=chunk)[499](index=499&type=chunk)[500](index=500&type=chunk)[501](index=501&type=chunk)[503](index=503&type=chunk)[504](index=504&type=chunk) - New legislation in the EEA regulating AI (e.g., proposed AI Act) and the digital economy (DSA) may impose additional regulatory obligations, compliance costs, and potential liability, affecting business practices and financial condition[505](index=505&type=chunk)[506](index=506&type=chunk)[507](index=507&type=chunk) [Risks Related to Taxation](index=89&type=section&id=Risks%20Related%20to%20Taxation) monday.com faces risks from changing tax laws, indirect tax complexities, global corporate tax reforms (BEPS), and potential PFIC/CFC classification for U.S. holders - Changes in tax laws or regulations in various jurisdictions could adversely affect the company or its customers, increasing costs and potentially harming business[508](index=508&type=chunk)[509](index=509&type=chunk)[510](index=510&type=chunk)[511](index=511&type=chunk) - The evolving application of indirect taxes (sales, use, VAT, GST) to online businesses, especially post-*South Dakota v. Wayfair, Inc.*, could lead to new tax collection obligations, substantial liabilities for past sales, and increased compliance costs[512](index=512&type=chunk) - Global corporate tax reforms (e.g., Inflation Reduction Act, OECD BEPS, BEPS 2.0) are under scrutiny and implementation, potentially leading to significant changes in international tax systems, impacting financial position, tax liability, and administrative efforts[514](index=514&type=chunk)[515](index=515&type=chunk)[516](index=516&type=chunk)[517](index=517&type=chunk)[519](index=519&type=chunk) - There is no assurance monday.com will not be classified as a Passive Foreign Investment Company (PFIC), which could result in adverse U.S. federal income tax consequences for U.S. Holders[520](index=520&type=chunk) - U.S. persons owning **10% or more of ordinary shares** may be treated as 'United States shareholders' of Controlled Foreign Corporations (CFCs) within the group, potentially incurring annual reporting and income inclusion obligations[521](index=521&type=chunk) [Risks Related to Our Proprietary and Intellectual Property Rights](index=90&type=section&id=Risks%20Related%20to%20Our%20Proprietary%20and%20Intellectual%20Property%20Rights) Failure to protect monday.com's intellectual property (IP) could impair its competitive position, lead to revenue loss, costly litigation, and risks from third-party infringement claims or open-source software use - Failure to adequately maintain, protect, or enforce proprietary and intellectual property rights (know-how, technology, copyrights, patents, trademarks) could impair competitive position, lead to loss of assets, reduced revenue, and costly litigation[522](index=522&type=chunk)[523](index=523&type=chunk)[528](index=528&type=chunk) - Challenges include policing unauthorized use, potential unenforceability of protective agreements in some jurisdictions, and competitors independently developing similar technologies[525](index=525&type=chunk)[526](index=526&type=chunk) - The company may be subject to protracted infringement claims, which could result in costly litigation, significant damage awards, injunctions, and diversion of management time[529](index=529&type=chunk)[530](index=530&type=chunk) - Extensive use of open-source software introduces risks of unanticipated licensing conditions (e.g., requiring proprietary code release), lawsuits, and security vulnerabilities or defects[531](index=531&type=chunk)[532](index=532&type=chunk)[534](index=534&type=chunk)[535](index=535&type=chunk) - Inability to obtain or enforce patent protection, challenges to issued patents, and difficulties in protecting trademarks in various countries could negatively affect business and competitive advantages[536](index=536&type=chunk)[537](index=537&type=chunk)[539](index=539&type=chunk)[540](index=540&type=chunk) [Risks Related to Operations as a Public Company and Ordinary Shares](index=90&type=section&id=Risks%20Related%20to%20Operations%20as%20a%20Public%20Company%20and%20Ordinary%20Shares) monday.com's public company operations are influenced by a Co-Founder's veto rights, foreign private issuer status, Israeli law provisions, and a policy of not paying dividends - One Co-Founder holds a founder share with veto rights over certain key corporate decisions (mergers, asset sales, Digital Lift Initiative changes), limiting other shareholders' influence[541](index=541&type=chunk)[542](index=542&type=chunk)[543](index=543&type=chunk) - As a foreign private issuer, monday.com is exempt from certain U.S. proxy rules and has more lenient Exchange Act reporting obligations, potentially offering different shareholder protections[544](index=544&type=chunk) - Reliance on foreign private issuer exemption for corporate governance practices (e.g., shareholder meeting quorums) means shareholders may not have the same protections as those of U.S. domestic companies[545](index=545&type=chunk) - Risk of losing foreign private issuer status in the future, which would require compliance with U.S. domestic issuer forms and rules, incurring significant additional costs and expenses[546](index=546&type=chunk) - Provisions of Israeli law and the company's articles of association (e.g., merger regulations, director election/removal, shareholder approval thresholds) may delay, prevent, or make undesirable an acquisition of all or a significant portion of shares or assets[547](index=547&type=chunk)[548](index=548&type=chunk)[549](index=549&type=chunk)[550](index=550&type=chunk) - The company does not expect to pay any dividends in the foreseeable future, intending to retain earnings for operations and expansion, meaning investors may only realize gains through share price appreciation[551](index=551&type=chunk)[552](index=552&type=chunk) [Risks Related to Our Incorporation and Location in Israel](index=90&type=section&id=Risks%20Related%20to%20Our%20Incorporation%20and%20Location%20in%20Israel) monday.com's operations are significantly affected by political, economic, and military conditions in Israel, including the ongoing war with Hamas, and challenges in enforcing U.S. judgments - Political, economic, and military conditions in Israel and the surrounding region, including the ongoing war between Israel and Hamas, may directly affect business and operations, potentially causing disruptions (e.g., employee reserve duty call-ups)[553](index=553&type=chunk)[554](index=554&type=chunk)[555](index=555&type=chunk) - Commercial insurance does not cover war and terrorism losses, and the continuation or sufficiency of Israeli government coverage for such damages is uncertain[557](index=557&type=chunk) - Economic boycotts against Israel and ongoing judicial reforms could negatively impact the business environment, financial condition, and ability to raise funds[558](index=558&type=chunk)[559](index=559&type=chunk) - Enforcing U.S. judgments against the company or its non-U.S. officers/directors, or asserting U.S. securities laws claims in Israel, may be difficult due to differences in legal systems and enforcement practices[560](index=560&type=chunk)[561](index=561&type=chunk)[562](index=562&type=chunk) - Shareholder rights and responsibilities are governed by Israeli law, which differs from U.S. corporate law, including duties of good faith and fairness for shareholders[563](index=563&type=chunk) - The company may become subject to claims for remuneration or royalties for assigned service invention rights by employees, potentially leading to litigation and adverse business effects[564](index=564&type=chunk)[565](index=565&type=chunk) [Risks Related to Our Digital Lift Initiative and the Digital Lift Foundation](index=91&type=section&id=Risks%20Related%20to%20Our%20Digital%20Lift%20Initiative%20and%20the%20Digital%20Lift%20Foundation) The Digital Lift Initiative's novelty, equity funding, and potential for consolidation with monday.com's financials pose risks, including dilution and conflicts of interest - The Digital Lift Initiative's novelty makes its efficacy unpredictable and susceptible to unintended consequences, as it aims to facilitate digital transformation in the nonprofit sector[569](index=569&type=chunk) - Funding through equity contributions (up to **1% of outstanding ordinary shares annually**) may be viewed as excessively dilutive to new and existing shareholders[570](index=570&type=chunk)[575](index=575&type=chunk) - Despite efforts to remain independent, auditors or regulators could determine monday.com exercises control over the Digital Lift Foundation, potentially requiring financial consolidation and leading to heightened litigation risks, accounting complexities, and increased regulatory oversight[571](index=571&type=chunk)[572](index=572&type=chunk)[575](index=575&type=chunk) - The initiative's focus on social impact rather than maximizing shareholder value may create conflicts of interest or fail to resonate with customers and shareholders, potentially impacting reputation and business[573](index=573&type=chunk)[575](index=575&type=chunk) [Risks Related to Legal and Regulatory Matters](index=91&type=section&id=Risks%20Related%20to%20Legal%20and%20Regulatory%20Matters) monday.com faces risks from litigation, anti-corruption laws, export controls, economic sanctions, and geopolitical conflicts, all potentially impacting operations and financial results - The company may be involved in various litigation and regulatory proceedings (labor, commercial, antitrust, securities, investor claims), which can be costly, divert management, and harm reputation[574](index=574&type=chunk)[576](index=576&type=chunk) - Compliance with anti-corruption, anti-bribery, and anti-money laundering laws (e.g., FCPA, UK Bribery Act) is critical; non-compliance can lead to criminal penalties, significant fines, and reputational harm, especially with increasing international sales[577](index=577&type=chunk)[578](index=578&type=chunk) - Governmental export controls and economic sanctions laws (U.S., Israeli, EU) restrict sales to certain entities/countries; non-compliance risks civil/criminal penalties, government investigation, and loss of export privileges, despite precautions like IP blocking and user screenings[579](index=579&type=chunk)[580](index=580&type=chunk) - Changes in export/import regulations or new sanctions could prevent global product use or sales, adversely affecting business. Geopolitical conflicts, like the Russia-Ukraine war, can impact global markets, operations, and financial results through heightened risks, sanctions, inflation, and supply chain costs

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?Let's take a look at what these Wall Street heavyweights have to say about Monday.com (MNDY) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.Monday.com currently has an ave ...

Monday.com (MNDY) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this project management software developer, should get reflected in its stock price. After all, empirical research shows a strong correlati ...

Investors interested in Computer and Technology stocks should always be looking to find the best-performing companies in the group. Monday.com (MNDY) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.Monday.com is one of 621 individual stocks in the Computer and Technology sector. Collectively, these companies sit at #11 in the Zacks Sector Rank ...

Cloud software company Monday.com (MNDY -0.18%) delivered a great update to close out 2023, and indicated good things could be in store for 2024. Bear market or not for the cloud industry, this small platform kept growing at a fast pace, helped by the rollout of new AI products along the way.Management is making a slight pivot, though, as it appears the bear market is now history. After the briefest of dips in the stock price, Monday.com is once again close to its high-water mark after the market downturn o ...

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Whil ...

Monday.com (MNDY -8.94%) stock is sinking today despite the company reporting better-than-expected fourth-quarter results. The low-code and workflow software specialist's share price was down 8.9% as of 11:30 a.m. ET, according to data from S&P Global Market Intelligence. The stock had been down as much as 16.5% earlier in the day's trading.Monday.com published its fourth-quarter results before the market opened this morning, reporting sales and earnings performance for the period that were actually far bet ...

Financial Data and Key Metrics - Q4 2023 revenue was $202.6 million, up 35% YoY, while full-year 2023 revenue reached $729.7 million, up 41% YoY [108] - Q4 2023 net income was $33.7 million, up from $22.2 million in Q4 2022, and full-year 2023 net income was $94.9 million, compared to a loss of $33.4 million in 2022 [31] - Q4 2023 free cash flow was $55.4 million, with a free cash flow margin of 27%, while full-year 2023 free cash flow was $204.9 million, with a margin of 28% [126] - Q4 2023 gross margin was 90%, with expectations to remain in the high 80s range in the medium to long term [116] - Q1 2024 revenue guidance is $207 million to $211 million, representing 28% to 30% YoY growth, with full-year 2024 revenue expected to be $926 million to $932 million, up 27% to 28% YoY [10][109] Business Line Data and Key Metrics - The company upgraded its infrastructure with mondayDB, which improved Board performance by 5x, and is now entering phase 2.0 to address complex work scenarios [3] - The company launched monday code, a serverless environment for developers to host and run apps within the Work OS platform [30] - The company plans to roll out product bundles in 2024, including monday work canvas, work forms, CRM, dev, and work management [47][48] - The company is finalizing the rollout of its multi-product suite, with full exposure expected by the end of Q1 2024 [16] Market Data and Key Metrics - The company did not see any impact from the Middle East war on its business, as it operates globally [27] - The company has over 2,300 customers spending $50k+ annually, with a shift towards centralized buying decisions within organizations [49] - The company's largest customer has 25,000 seats, with growth driven by seat expansion and additional functionality purchases [73][90] Company Strategy and Industry Competition - The company is focused on enhancing its Work OS platform, expanding its enterprise presence, and delivering value to customers [115][125] - The company is investing in AI functionality across its products, with plans to democratize AI for customers [79][94] - The company faces competition in CRM and dev products, with 50% of deals involving competition, while work management remains 70% greenfield [138] Management Commentary on Operating Environment and Future Outlook - The company expects macroeconomic headwinds to persist in Q1 and Q2 2024, with stabilization anticipated in H2 2024 [33][56] - The company is optimistic about its updated pricing model and scaling of mondayDB, expecting an uptick in growth retention in H2 2024 [12] - The company sees healthy top-of-funnel activity and pipeline generation, with no significant changes in performance marketing costs [57][68] Other Important Information - The company increased its employee headcount to 1,854, up 110 from Q3 2023, with plans to ramp hiring in 2024, particularly in R&D and sales [5] - The company revised its lease prices, expecting the adjustment to contribute $15 million to $20 million in revenue in 2024 [9] - The company held its first-ever Investor Day, showcasing its progress and future vision, with plans to make it an annual event [2][106] Q&A Summary Question: How is the company constructing its guidance given the underlying business health? - The company's guidance reflects a balance between base-case and lowercase scenarios, with NDR stabilization expected in H2 2024 [53] Question: What are the assumptions behind the price increase impact? - The company assumes a 15% to 75% impact from advancing the price increase by a quarter, with no unexpected customer reactions [14][36] Question: How is the company addressing large enterprise customers? - The company is seeing a record number of $50k+ customers and expects continued strength in large deals, with a focus on seat expansion and additional functionality [38][90] Question: What is the outlook for NDR and macroeconomic headwinds? - NDR declined slightly to 110% in Q4 2023, with stabilization expected in H2 2024, as macroeconomic headwinds persist [19][21] Question: How is the company evolving its go-to-market strategy? - The company plans to offer product bundles and specialize sales teams for CRM and dev products, with a focus on cross-selling [46][64] Question: What is the impact of the price increase on growth trajectory? - The company did not see a material change in ARR from the price increase, with a small impact on conversion rates for smaller customers [45] Question: How is the company monetizing AI functionality? - The company is still working on monetizing AI, with early feedback showing enthusiasm for AI in automation workflows [79][100] Question: What is the seasonality of free cash flow? - Free cash flow is impacted by bonus payments in Q2 and Q4, with 80% of customers on annual contracts contributing to stability [131]

Have you been paying attention to shares of Monday.com (MNDY) ? Shares have been on the move with the stock up 23.7% over the past month. The stock hit a new 52-week high of $239.22 in the previous session. Monday.com has gained 25.6% since the start of the year compared to the 10.4% move for the Zacks Computer and Technology sector and the 18.9% return for the Zacks Internet - Software industry.What's Driving the Outperformance?The stock has an impressive record of positive earnings surprises, as it hasn't ...

Monday.com (MNDY) came out with quarterly earnings of $0.65 per share, beating the Zacks Consensus Estimate of $0.30 per share. This compares to earnings of $0.44 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 116.67%. A quarter ago, it was expected that this project management software developer would post earnings of $0.18 per share when it actually produced earnings of $0.64, delivering a surprise of 255.56%.Over the last ...