Strong report Monday.com led to a double-digit increase in quotations

Shares of an enterprise software provider Monday.com Ltd. (MNDY), rose by more than 17% at auction on August 11 after the publication of factual data for the second quarter of 2022. The company significantly exceeded the forecasts of Wall Street analysts in revenue and showed solid data on customer retention. At the auction on August 9, the MNDY stock adjusted to $123.7. Monday.com develops software and a set of tools with which you can manage workflows and create a single workspace within one organization. 

Monday.com companies from marketing, CRM, software development, etc… can use the platform to develop their controls and integrate different applications. The company went public a year ago and, in November 2021, reached a peak in the value of shares in the region of $ 450. But the stock is trading more than 65% below its 52-week high. In the second quarter, revenue Monday.com grew by 75% to $124 million, about $5 million exceeding Wall Street forecasts. 

The service provider’s income is more or less predictable since software products are under the SaaS scheme. Note that it is not the first quarter Monday.com demonstrates high customer retention rates and increases its expenses on the platform. Customer spending on the platform increased by 125% year-on-year in the second quarter. The complete 2022 guide Monday.com plans revenue growth to $500 million, which is about 60% higher than last year’s result. 

For now, Monday.com remains unprofitable; in the first two quarters of 2022, it lost almost $114 million. The main expense item is marketing and sales. While the company’s revenues are growing at double-digit rates, this does not raise any questions. However, it is essential paying attention to the ratio of marketing expenses and revenue growth rates to determine how efficiently the company finances.