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    monday.com (MNDY)

    MNDY Q2 2025: H2 Guidance at Mid-20s% Amid Enterprise Momentum

    Reported on Aug 12, 2025 (Before Market Open)
    Pre-Earnings Price$188.34Open (Aug 11, 2025)
    Post-Earnings Price$188.34Open (Aug 11, 2025)
    Price Change
    $0.00(0.00%)
    • Strong Enterprise Momentum: The call highlighted record net new enterprise customer adds (customers paying over $100K annually) and the milestone of Monday CRM reaching $100,000,000 ARR, underscoring robust high-value customer acquisition that can drive sustainable revenue growth.
    • Innovative AI Capabilities with Monetization Upside: Management emphasized the launch of new AI-driven products (Monday Magic, Monday Vibe, and Monday Sidekick) and noted sequential growth in AI actions by nearly $20,000,000 this quarter, pointing to significant future monetization potential.
    • Resilient Marketing and Financial Discipline: Despite minor headwinds from Google SEO changes, the team has effectively reallocated marketing spend across diversified channels and maintained a stable NDR of 111%, reflecting strong cost optimization and operational resilience.
    • Pressure on lower-end customer acquisition: There is concern that Google algorithm changes are dampening performance marketing effectiveness, potentially impacting the overall volume of new customer adds in the lower-tier segment.
    • Margin compression from high headcount growth: With an expected 30% headcount increase this fiscal year, heavy investments in sales, R&D, and product expansion could pressure margins if revenue growth does not accelerate accordingly.
    • Uncertainty in AI monetization: While AI usage and actions are growing, the sequential slow-down in AI action growth and reliance on evolving credit usage models introduces uncertainty about the timing and scale of future revenue from AI-related offerings.
    MetricPeriodPrevious GuidanceCurrent GuidanceChange

    Revenue

    Q3 2025

    no prior guidance

    $311,000,000 to $313,000,000

    no prior guidance

    Non-GAAP Operating Income

    Q3 2025

    no prior guidance

    $34,000,000 to $36,000,000

    no prior guidance

    Operating Margin

    Q3 2025

    no prior guidance

    11% to 12%

    no prior guidance

    Revenue

    FY 2025

    $1.220B to $1.226B, 25%-26% YoY

    $1,224,000,000 to $1,229,000,000, 26% YoY

    raised

    Non-GAAP Operating Income

    FY 2025

    $144M to $150M

    $154M to $158M

    raised

    Operating Margin

    FY 2025

    approximately 12%

    approximately 13%

    raised

    Adjusted Free Cash Flow

    FY 2025

    $310M to $360M

    $320,000,000 to $326,000,000

    lowered

    Adjusted Free Cash Flow Margin

    FY 2025

    25% to 26%

    26% to 27%

    raised

    Net Dollar Retention Rate

    FY 2025

    no prior guidance

    111%

    no prior guidance

    1. Revenue Guidance
      Q: How did guidance change from original expectations?
      A: Management explained that updating H2 growth to the mid-20s% reflects cautious assumptions around Google search impacts, a slower headcount ramp, and steady product investment, ensuring guidance remains both prudent and achievable.

    2. AI Growth
      Q: How did AI usage and monetization perform?
      A: The team highlighted nearly $20M of AI actions growth this quarter, with new features like Magic, Vibe, and Sidekick driving increased customer adoption and setting the stage for stronger monetization next year.

    3. SEO Impact
      Q: What effect did Google changes have on new acquisitions?
      A: Management noted that while lower-tier volume dipped slightly due to Google’s algorithm experiments, high-quality customer engagement and overall conversion remained solid, with ongoing daily optimizations mitigating any impact.

    4. Enterprise Momentum
      Q: How is enterprise business performance evolving?
      A: Leaders emphasized record enterprise customer adds—specifically customers above $100K annual revenue—and a strengthened sales force through key executive hires, driving a stable 111% NDR and a move toward higher value deals.

    5. CRM Growth
      Q: What drove CRM ARR to a $100M milestone?
      A: The company’s CRM growth was fueled by significant seat expansion and larger deal sizes—reflected in over 20% ACV year-over-year increase—underscoring its successful upmarket transition and enhanced customer engagement.

    6. Capital Allocation
      Q: How will surplus cash be utilized?
      A: Management stressed that the focus remains on organic growth via product and sales investments while they stay open to selective M&A opportunities, with no immediate plans for buybacks, preserving flexibility for future opportunities.

    Research analysts covering monday.com.