monday.com (MNDY) 15 May 242024 Q1 Earnings call transcript

Thank you for standing by. My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to the monday.com First Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Byron Stephen, Vice President of Investor Relations. Please go ahead.

you the us first financial year thank call today's quarter and XXXX. discuss to results everyone, for on joining conference fiscal Hello, for monday.com's

monday.com; and today our released the fiscal Zinman, Roy me of for Glazer, Mann quarter earlier Joining co-CEOs CFO. are results of XXXX and first We Eliran monday.com's Eran today.

ir.monday.com. find presentation News of at replay under the and and IR our section today's shareholder our along letter quarterly can a You with investor of Events our webcast website

that made judgment currently from statements risks management's These refer be results cause call our forward-looking statements, on for will earnings Certain could to may our results release involve factors information cause differ on today based to forward-looking from actual differ the which statements actual and that reflect available expectations. statements. materially best uncertainties Please the to more on specific our information. the

measures the which release call earnings will on the the earnings for be and on comparable Additionally, Relations Investor the are posted in measures call, today's directly non-GAAP financial presentation most financial available discussed to are the Reconciliations website. today. GAAP

me to over Now the Roy. turn let call

thank Thank you, joining Byron, for and you, today. us everyone,

performance, growth to ultimately robust of by streamline strive to organizations across progress, on products, growth to financial an level and another workflows, Following in year Work increasing macroeconomic exceptional XXXX customers build new we uncertainties, report remains are ability adoption cash the record drive collaboration adapt challenging flow. and to our revenue lingering is Underlying due platform start. the continue product highlighted all and environments. outstanding free efficiency, first enhance business and showcased Despite strong business please empowering In segments. that demand OS of strong to to our off and quarter, monday.com

remarkable drivers behind of key the model. pricing our made to QX our was One performance the adjustments

waves. out structure pricing is our in reminder, being model a As rolled

those billed see took effect and renewal. QX, customers customers monday while monthly, pricing in new For upon will other pricing new updated

pricing projections, from exceeded results product. strong the initial have structure value our our far, the So new proposition of our underscoring

pleased churn initial retention high its over are that upward the We overall reached the year. past momentum an continuing QX, particularly gross in all-time with

Let to it our product some over to turn me you through now walk Eran highlights. of

Thank showing you, Roy. in a our took becoming response QX. with positive, platform significant the to growth businesses The customers. of incredibly In opening dev step accelerating forward QX, sales account monday go-to the has vision of and been both products for monday all with CRM work

the remain addition, on product to In late schedule launch we in new XXXX. monday service

Looking current ahead, and investment further customers to of we address all are sizes. needs our all promotion and the of of products and upcoming to types committed

features to launch to harness seamlessly smart business capabilities, customers throughout workflows. into OS integrating columns AI These of significant leverage AI their AI power Building the AI-powered successful make a our unlocking platform, continues templates. and mission with recently upon automations, Work value to AI to ability new AI our of daily and enable empower the enhanced system, AI including we Our anyone progress. introduced

in of future ahead, growth work excellence. value driving through and and our Looking remain steadfast to shaping our we scale, commitment customers the at innovation delivering to

success and will success in and product drive us and on focus momentum for to position customer Our innovation, operational XXXX efficiency continue beyond.

and turn cover our financials over Eliran now guidance. I'll that, to With to

in ago year guidance. the XX% at up our to in joining and XXXX for fiscal million, you, you, provide QX quarter. another thank strong quarter 'XX $XXX.X Total in detail 'XX updated review Today, Fiscal and everyone, our year from start. off is Thank I'll revenue Eran, results call. first came

operating the and strong improvement expected year of system stable 'XX, reflecting products. by to the our Our currently work an reported fiscal recent We was at 'XX demand QX small overall rate updates in with end anticipate throughout net dollar year. pricing remain the XXX%, for NDR retention stable down-market

As average a reminder, weighted our net dollar retention trailing X is a calculation. quarter

prices provided and updated product with by million outperformed In anticipate for the better our OS to approximately adjustments our generate platform value year our forecast Work increased and list our align suite These revenue we customers. fiscal initial that in we QX, 'XX. now we have to $XX

be the of I reminder non-GAAP unless will the For disclosed, measures. referencing noted, metrics otherwise financial financial

release. non-GAAP financials We have a reconciliation of provided earnings in to GAAP our

margin expect XXs First high range. continue In term, to XX%. the we quarter medium to remain margin was the gross gross in long to

XX% $XX.X million per expense or 'XX QX XX% development 'XX. QX $XX.X QX expense expense Diluted or in XX% or in 'XX marketing diluted share of 'XX in revenue QX QX in million $X.XX million and $XX.X compared Research from revenue 'XX, million XX to based XX% to in QX income 'XX was million X% compared revenue income G&A QX 'XX. was 'XX. to was of QX was was in of in compared and in million Sales XX% in fully shares on outstanding. 'XX. Net QX $X.X net up $XXX.X

count an 'XX. employees since XXX head of X,XXX, was QX employee increase Total

build We to ramp product suite. and out our teams product continued expect focus sales fiscal our as throughout on with platform 'XX year R&D, we and

less from billion defined and property flow 'XX. the ended and items. excluding net margin percentage flow to cash equivalents, $X.XX operating million cash defined billion capitalized as in nonrecurring of a activities, record free free the revenue as and software $XX.X balance cash cash free for and end cash QX the cash costs, Free was equipment In sheet as was $X.XX used from a XX%. up as We of cash of is 'XX, on quarter cash at flow. and Moving with flow cash flow QX

for let's XXXX. year fiscal Now to outlook turn updated our

to For the we be of of revenue year-over-year. $XXX of quarter growth XXXX, the year XX% range to second $XXX our representing to in expect fiscal million million, XX%

$XX to million margin X% of $XX income million, to operating operating an non-GAAP expect and We X%. of

and $XX margin of XX% million flow XX%. flow of $XX cash free free to to cash million expect We

For representing to expect growth million, the million in XXXX, XX% to XX% revenue we $XXX full the year-over-year. to of range year $XXX be of

non-GAAP We X% expect $XX X%. of to an operating full and million, to of income million $XX operating year margin

full and cash year flow questions. your $XXX cash expect now million flow of over free $XXX free operator to XX% XX%. I'll margin the for We to of million it to turn

[Operator Pinjalim Instructions] Your of from first the line with question comes Bora JPMorgan.

Help side. that year here. in too more than palpable. or QX QX, a for these to that should about on us environment. Congrats these tough you're or them SMB people there functional solid the new monday CRM is we more use quarter kind you accounts seeing ask overall? is Are wanted very Great. on driving understand dev you Are It traction are in what existing saving and seems CRM contribution And of largely at a adding accounts pretty like dev on think and for money accounts that. The year? ago, accounts even this how the these CRM of dev? cases, consolidating a products I and for

Pinjalim, this is Eran.

product traction So yes, great CRM we for and dev product. see both our

in QX -- combination quarter think is us for I strong a of acquisition. terms a traditionally, customer of it's

new drove some of terms customers. that the think net I of in So increase

In addition all customers. to open the that, are to products

more customers. seen from cross-sell existing So we've

say larger time. and monday would CRM, larger both acquiring in I that and of monday customers we're dev climbing over and And also

and across from those SMBs, products, a adding see to And lot demand functionality. but all bring we and we'll more obviously, of still SMBs customers over be So larger products. and use strong time, larger also able features to

the But multiple overall of So our factors. it's both we with traction the progress we're products a I and combination those think from happy with customers. see very of

for Understood. Yes. were -- One Eliran sorry, you something? question saying

Pinjalim. Sure. Yes. [indiscernible],

Okay.

pricing Eliran. Another of to you from understand customers, NDR a see any for from to in And took assumption. understand I'm new did up the the question Eliran, commentary. benefit pricing Trying trying you QX? the kind

uptick time half. last you the second NDR the that think said will I in

Now it well. seems the like year. doing talking about seems more of -- the But end a it's uptick of pricing small at you're in like

for up if through you're the So QX. I'm understand guidance trying to overall flowing and the -- and beat taking

the to benefits seeing. trying versus NDR the commentary I'm of kind understand So you're pricing

Pinjalim, Eliran. sure. It's

NDR we actually pricing. related annual maybe just it rest monthly be majority pricing of in the February, improvement mention going fiscal the 'XX And So price the the because new for contracts benefit of to from ones that to the the is mostly for to initiated the And was are that XXXX. year increase. throughout

yet be So that continue subscribers. seen we renew to as customers these what to impact believe annual the the still be would

the an approach this took of regard going to Potentially is kind with later throughout we to the why be year. uptick NDR. is that So

Your next from Bracelin Sandler. the Brent with question of line comes Piper

driving to What's good pretty challenges tied typically expect challenging of here? you're improvement just start out the you're gross with seeing given embedded of? retention, in in retention the the to driving in and improvement pricing me wanted through you value that some some here updates. out the that. of macro a what's that seeing I Walk these that improvement you'd that some the Is retention and saw workflows despite people it are

Sure. Brent, it's Eliran.

reasons is customers. we larger accounts larger a are So to and the continue for there few improvement. go with One upmarket

profile. stabilized more kind a with customers is this So better of a

better churned, The be not continue monday I the on customers like to potentially remained used did, platforms. that decide we did the with, would second customers increase ones we they to and that of thing, again, the assume that would that probably price be the to customers

is contribute third -- our The are customer products the to we the launched, earlier. I they that within now are customers. to gain dev, that fact mentioned continuing traction that launch Eran and stabilized that therefore, existing we we what thing base, more are believe with new CRM,

creating of the all think monday I of profile So actually the better retention on a is platform. above

linearity. follow-up quick here my is then And around

macro QX was the kind in off the sounds quarter? given a is linearity pretty the healthy Just start It of like too. what you uncertainty, to saw

linearity month-to-month either way? on surprised color any So

Sure.

not remain We a of the but doesn't current think choppy end going -- economy I it's worse. going any by So get the macro that that it's few It's the it doesn't will mean to better, to believe year. mean any comments. it get that

successful we, have that post we adjustment, the presented back Investor we pricing I December, think in best Day we scenario. more on when that results the confidence case our did the QX

be and price of the we this And be by seen going momentum to throughout So a also why all, strong in throughout with see in positive positive how QX. we to momentum subscribers, overall terms guidance linearity, the year, it's is margins. the the but increased in all improved Yet performance and increase annual year. impacted

the question next Ader KeyBanc from comes Your line Capital with Markets. Jackson of

customer down The in last maybe Non-GAAP sales terms and couple costs. to is relative the growth of on acquisition the first rate marketing quarters. one ticked of

marketing in curious down or some performance what seeing your market. of channel the you're So up either from competitors just

It's Roy.

-- competition most biggest different. QX is marketing the what we QX. in spend here influence years, the we think the see performance like in, So always in do then in over also, boost see something marketing, more I It's and areas, that wasn't have some some pulled back. we in done we've But pulled QX

feel think we And them didn't stay there within it so -- comfortable like before. slightly made downgraded. boundaries this with. the But than so We I quarter is more same us or competition chase

Okay. All cross-sell the right. with the one management itself the on dev better other? them lending or curious That to Great. CRM I'm of than makes tools. Does then end up sense. and upsell work And

Eran. Yes, it's take Jackson, it. I can

good any We see more same see roughly both CRM starting see traction in time. goes better adding dev. Same tools itself. use from management customers and compared So those I'll the ratio. of over CRM and in of work other to dev, to one, products we say, customers in didn't terms the We perform -- one

cross-sell. past. have hope we've land we And able the bigger deals the say from to we done are we'll entire population, and that with opportunity that we're will of products products management very time, see be time. products we So encouraged those in do are out to don't trying to fact again, and more significant now bigger over in the rolled more like both any work And change. I the customers over

see larger more tend Other do and we to requires I behavior more smaller different It's customers, effort. or adopt can add. like time customers That and larger whereas smaller within a Roy. ones products quickly.

of Arjun Your Blair. next from the line William question with Bhatia comes

demand results. hearing can start Nice we're here Certainly, competitive a also on pricing like just really I job had from And to the the the QX that, with year. strong environment. choppy. is strong. is other if core Perfect. strong Maybe contributing market vendors certainly little seems you start It seems a that is software but bit SMB to what

industry. the thinking competitive dynamics you're shift how curious of I'm in in So the

I here. how been customers several that's some through that behavior taking changed? you quarters, us competitors, consolidating more? growth the the of over trends look think at has you've but share Talk Are when out seeing the last enabling you're your

it's Yes. Sure. Arjun, Eliran.

will I start maybe So with SMBs.

we As of you in very to It's significantly invest continue our QX to know, And performance ARR. reported strong total mid-market this. SMB be in segment. to alongside around since and continue enterprise always marketing monday, we maintain XX%

mentioned that well In we SMB are we what earlier, what encouraged features both we anticipated. market. but better actually reaction didn't addition, the functionalities did were by that when I to the pricing CRM resonating we together introducing Also, think overstated, with see customers, dev, new fact the and adjustment, we with the and are a than that the that was we product

the confidence gained we it's SMB segment. kind So of also in

you peers of mentioned even enterprise in on the terms gain share. think peers that SMBs they more -- And I in on mentioned more focus sorry, -- one us account, on upmarket past which that allows and are our thing competition, to and our focusing market

SMBs, all, we all terms periods. So versus have a concerns in no of regards place the to we and are I very other in feel competition, good with major in

over these it user curious the capabilities. And or or year base, you And Roy the of make usage of early, this how think you And new when and one, a adoption what some I Eran, know the capabilities think then launched several Perfect. I about you still is in when next as going longer but monday? to on customer X think capabilities of do the to you kind adoption read having customers users does think term, out But your it's seeing impact in AI top much AI out you're from do for that letter. here? Very you shareholder you new other then helpful. the are those impact about think easier I'm just that them how of and the build quarter.

It's Roy.

like And So because of power do blocks we the build they use of in see out it stuff initial we phase great just And from they would results new talked building initial Day. a the AI really that of Investor about lot themselves. people workflows. to rolled AI actually we to do our the normally harness

and and and but is customers lot with do like our X the AI a question they do parts. platform, and platform for adoption, things tasks might suggesting like making automations, and they also formulas, harder your can about stickier a let's I them things adopt to the platform say, Regarding like things building itself think like, also people, plays do. lot One giving creating more them now of capabilities connecting of boards, increasing

towards. another So pushing that's like we're direction always

yes So both. on

all and next year the those adopt customer expect And so, increase that to the capabilities. in base will like or we dramatically adoption our

Sachs. Your the next Rangan with of question Goldman comes Kash from line

companies you been so few kind up you that the kudos have QX, guys. the of numbers Roy, in Very really able have quarter. Eran and this to on put congratulations Eliran, to

regards the question this companies in your lower growth market. growth continue mean, in or to is pace is enterprise, the dominance]. I effectively is the and XX,XXX-plus the new maintain revenue at to rapidly while to end customers, there it's I upmarket phenomenal, ARR very maintain upmarket move customers, your My see [ and XXX,XXX phenomenal, the plus rare When move you of look still net the the

getting consuming taken making like XXX,XXX, potential changes larger that it's deployment motion, just what XX,XXX, there base? are up more within and what question differences they're customers? the installed enterprise and in more upmarket deliberately Because for in by the the new market. products go are So are the what so, you're the it to the -- just is, being the started looks revenue [indiscernible] Are

Also one Eliran, for sorry.

XX,XXX expansion very net the in Your looks rates cohort solid.

an cohort, this shouldn't ahead? really As in company business improving the the encouraging more towards overall the XX,XXX for for tilts plus net sign expansion be quarters your more rates and

Yes. Kash, this Eran. is

SMBs we scale with the also -- And -- it's is, I CRM great our voice us. SMBs were It's a management, dev, look, and product sauce and the traction -- our challenge. So CRM able to mostly we a we this it's and how very to is hear that to from feedback a It enterprise customers, think managed and side to think larger important for can the that. it just the an in scale can And And us. how do now. focused the so huge work keep enterprises. is I not our and products, suitable customers. and was secret of very for SMB of important we're SMBs, actually upmarket, effort also from important both company, And do terms really funnel for to that but apply the to we and going we same the such dev is because understand for but built we

we products same So towards And products, think to also they contribute products can multiple in that this the our management. the that because suite is customers. adding multiple helps work and really about these use at overall, which same we're time, NDR product done really new larger scale the how the enterprise deploy into applying basically, and we've methodology

terms So of the that's how we in see it multiproduct.

next I maybe And Eran, on Kash, question. follow up will to your

order to customers. platform So the enterprise more in to invest to support add maybe the the of itself add, just and continue in we scale capabilities

again, and help is larger going with us Just to as reminder, a customers. scale mondayDB develop to to continue evolve,

peers enterprise the customers We be features kinds that suitable functionalities functionalities some of add-ons, additional have. and all like are our of for already more adding will that

of is So an investment. area this

means to what upmarket and go it us. Now to continue to your question, we

that we look, all and in we think quarters. about opportunity huge is saying, next a sure and with larger would are also the there of upmarket we Kash, think, I the We make the to there. stickiness are for this want because go fact a care because also that few we So us, in segments. We we is the consistent care that terms about more, retention, we this of see deals, the coming are to larger we like I SMBs. servicing think is mid-market But something

what the see the most on to -- introducing we have And reaction I and think after be increase increase we'll we years. the to price have larger a will the of is of everything year out and visibility year, with by and more price roll the But this confidence the on bigger of are market, the the better customers, that future and this journey. end

direction we So But how currently, throughout the again, the see to looks year. have very good. progressed it

Eliran, flow growth free That's Congratulate, margins. and phenomenal. on cash

comes line from question Canaccord next of DJ Your the with Hynes Genuity.

broadly, I echo in start track It's can less I it's or usage that great congrats. you're everyone patterns make terms base the sentiments, terms other seeing service in more quarter. you I'll else's with any in of maybe or observations confident the you development there. of product think with Eran, development? I guess, in progress anything a the offering, And direction of just on of the product

this DJ, Eran. is Yes.

of year, launch very end it excited going of [indiscernible] So yes, an we're to version. already alpha We're have the the XXXX. We towards service. end

mentioned I initial towards are think we encouraging. positive. I Investor customer in overall, very can excitement. mention the Day, trying that a but briefly service, the a And base reaction we of demand few like customers now the share this -- lot very And of feedback that talking are with from is is there's can from lot our I monday We product. the a customers also

So really for excited this.

and form our is vision. in-company that's an that HR managing to But a or going I step we're gain release IT take ticketing excited system, new of of traction But important that towards part time vision of very another obviously, product. think or such feel like It's said, any the I it's of core And requests, for whether the other that. of work. service, it's momentum. to I

for excited very release. we're product that why that's So

Yes, makes Eliran, a And you. then, follow-up sense. for

anything you told terms of of where quarter the about model XX% terms price those linearity Is coming should price kind quarters? think the X the basis. of next pool, where is we of XX% the base monthly, last XX% increases think as rolling in just tactically renewal annual. of us That over of there I increases impact kind the on is we might in look a

DJ, great question it's actually, yes. a

the going annual new So we the believe subscribers pricing year. HX by to we're complete rollout of for next of the

about they we we're on XX the now think into it going -- see. upon next renewal, are February, getting introduced late months So now because from to

going next this So the to months, when is probably XX completed. be it's XX to months

of Your comes the from line Cowen. with next question Derrick TD Wood

good quarter, It have like through Great. I got guys on demand February late The some so and you're into And things you better with seat just December March? far? And the what expansion downgrades less comment about quarter. January softness through and a in sounded congrats Can trends talked improved last QX on in still how quarter-to-date now, happening. saw quarter, seat halfway and guess, guys. you tracked you since --

follow Yes, and Derrick, is if This start. anyone to wants up. I can Eran,

our and a the rolling yes, we lot base. I like raised of base the think sector So customer earnings the were the ever was for year, it think increase, kind of that, we time just call, first were previous for price -- in the uncertainty mentioned there we starting our was out previous we I quarter, about prices

than even I a expected, from churn X reception think we We were thought by great that base the a feedback. And we was saw One, the feedback we from customers. what customer increase profile, less very encouraged that was changed and is -- things. lower downgrades price overall, for positive.

was think encouraging. So I very that

QX, the including and end us And that, year. I towards momentum the that's tells demand what segments, saw great addition seeing overall in great up the SMB throughout to In the year momentum strong and of optimistic be we think all building to business. from more in

that changed. think fundamentally I was

just year. is the inconsistent would still that rest like we market feel This is the relatively by I good to add. and Eran said of but Eliran, choppy, us momentum what encouraged is and the Maybe for the Yes.

for be what And us, was said assumption? the previous Great. year. I able increases Is price And from quantify this million Eliran. the quarter? tailwind the maybe to guess Would benefit -- you you in remind that $XX

million previous assumption between was the $XX to million. $XX So

Just as a reminder, is ARR. derivative is this the Revenue revenue. the of

because get is So of monthly annual renewed. to by year take because of this -- you second is increase the contribution of fact throughout price and -- the either divided basis. the contract a of or of be the much you is feel are the next recognized something if year the We you the XX and when this very of the This effect renewals on the now get large, revenue ARR year we increase numbers. going by the the X they part that throughout is

So we number. pretty feel solid million the $XX is

line question Jefferies. with next Thill Brent of comes from the Your

of mid-market these bigger larger there? was that and the to you're so and these to Can a platform some happening seat when to hear. some fine, see large think sense about what what's upper expand of helping larger know you of you enterprise, the up is just beginning win underlying you guess spend. us I give on counts enterprise you're scale Are end I enterprise? seeing? you SMB like and enhancements good the sounds It can

Brent, Yes. Eran. is this

we good with the segment, to So continue see yes, definitely, momentum enterprises. to SMB addition the larger in

up deals But still that more obviously, pipeline we and opportunities. see coming great big into ago. quarters deals in the such very big the hoping that enterprise overall, So building XXXX. we hopefully, announced for looks that X and, But pipeline deal like enterprise healthy, had will convert of up more in we

the to think about to pathway? go-to I same is Are started this us get have market, ready. saw it's something you their you that infrastructure small. large, when kind of the that you're large kind than seeing platform cited, strategy an example What's of whether doing when went scalability, became what giving the you in, guess of that you're just putting similar and can ultimately And bigger many they you make small, that give Salesforce move? confidence the

Yes.

versions we've the know don't major just version working what company. going continue of the in I support but our infrastructure have roll out not we improvements project of for to And some very again, we've mondayDB, Also, a a done, this coming in talked make flagship we lot Obviously, security is So and functionality, us has features been to terms of but minor details platform, hard as permissions. to it. but terms and Salesforce we up. on to also about and governance and of be a

ourselves It's an us also ongoing navigate And way for we keep the platform. organization within talk work go-to and and the we consistently and we reaching improving with and our customers improve market decision-makers.

the sales on optimistic continue to ability So we're and on the in working could the our all our and in team. product, very enterprise in the working all, on market said, working segment. if go-to I bind I anything everything infrastructure, scale -- And

Oppenheimer. Iwanyc next of line with the Your from George question comes

Congrats on the strong results.

that to pipeline on this programs. CRM add deal some is your Can and as and on dev impact your You continue to and steadily you the color the give momentum having us well? on channel partner

Roy. is This

we're proud partner very So of yes, we the channels have.

great partners, we We and continuing have are more. add to

with And see the that so as going regions in We more ourselves. we operate also do and do invest forward have partners a partners, we regions with upmarket them essentially organization, with we customers, are our deepening giving more sales, but on we what supporting also -- focused the like helping the us and we are services, thing scale, entire consultancy going don't on, we're great in more like in.

with a have building of to we're said, we Roy ISVs XXX SIs, top partners our on over network lot with also of Hitachi, Maybe some just what to add Accenture, robust partner And KPMG. like now world marketplace. the a channel

investment area opportunities continue that So and potential will of is to ARR an generate this us. for

maybe Eliran, markets a And how basis? some international can behaving color on you on are give us relative the

Sure.

it's for us, George, stable. So pretty

coming XX% XX% from from about think around our U.S. you If North the Canada. is and coming believe I business, America,

We in prior of stable sales are to Europe. The momentum question, international don't organizations, good strong momentum terms we very seeing have expansion. in your where we with operate, and relatively partners. And places in is

comes of Michael from Berg the Fargo next question Your line Securities. with Wells

in product many market? Congrats incremental -- software on quarter. this is what allowing see success now in breadth with that's feel just Is there vendors to see ask of the or in success you I success SMBs. of this particular your what increased even to in wanted to this you the choppy anything you like macro, the go-to-market relative in about your SMB or allowing the the offering to other particular

here. Roy It's

So saw with we the lot -- and monday of kind we with, the really rely that strong see things platform. us feel add because see and cases SMBs can these a a times use of platform more on you that do in as true we and is they very of value

last And so while why we are strong period, that keep seeing stable we're that's ones. this very throughout they acquiring new very also in

go customers we marketing competition reach players As to less Eliran really and understanding because those growing on performance general have we're really scale. chosen see pushing and in upmarket to like other mentioned, like on how

us. for market good very a it's So

the to you of really and free at nice And rest fairly you quarter driving expecting the cash Anything particular dynamics beginning sense. that nicely strength flow relative raised year? outlook one Free then cash had year. where of flow were in the the quick performance Makes for a in follow-up. the in the

Yes, sure.

Michael, in between the profit. and cash of terms flow operating of So variance free kind

of we it cash related So strong that some XX% monthly from income, would as upmarket price SMBs contracts. strong as to XX% was healthy balance we the Around is have. top-of-funnel this a sheet ones say interest the -- collection in to The February reminder, is to uplift, related mostly due activity. see I and the we

And I of normal XX% would related expenses. say is around to timing

Just head as as a this in seasonality reminder, being salary are flow to we we fully as well QX QX expect in be increases -- free QX that -- in going to down come margin hired QX. also cash the due sorry, count onboarded pay bonuses, in price paid to we is as

free we of to to with comfortable cash flow the get flow XX% said, and over overall, generate as what cash billion XXXX we we annual period But very of free margin, striving said. $X XXXX, to feel

comes next Citi. line the Enders of Steve Your question from with

those macro, congrats ask pretty the And of the side, into the maybe opportunity to I viewing the we're you view Or like as fully it converting the solution impressive monday start, kind into you that on just of you? the kind able to rolled full-blown or drive seems who sold the there. now solution to to as to kind over of I some Like catalysts potentially that how are a and using from that what CRM of that's of already want be maybe guess bulk and that convert do customers customers are kind opportunity? out seeing CRM Great. are real being CRM given potentially into set? results, out using like like base, on Okay. of the the

Yes, Steven, is this Eran.

So I'll answer X. into

to going smaller I SMBs, easier. accounts, be think with the the it's

a using not CRM. are of Some them

it So adoption an us. was easy for

working also migration The bunch on tools. other, of we're a

I we're So faster going smaller seeing the be for think easier. adoption, customers, to it's

we bit the -- It's it's not more seen product. to We makers. just larger talk the complicated. [indiscernible] haven't For with need ones, a decision

organization within And it. of on, doing we mature kind bit the support little in that's top-down to those obviously, price also the to need and working reaching on selling another a order more functions different So to accounts. we're

that already dev. large can I great So seen more cross-sell adopting time, full-blown the or monday from and And organizations say over SMBs. we'll of CRM see we've more

guess And behavior I is of the seeing, some you're is on versus as I what what helpful side customers here? between how come That's beginning that you to the from -- of on the maybe pricing then Great. maybe they're and couple a of customer there monthly difference -- a you're guess, Okay. or context. that maybe and from some annuals the seeing up data hearing renewal months you're of have now the

Yes.

is Eran So this again.

very So results yes, profile. the happy overall, we're with the we're like very -- pretty churn are solid,

in churn. increase for Same goes much seen terms haven't downgrades. of We

time because results So model basically. a leave can any expected. even obviously, than the given we make monthlies our at own we ran are And decision and thought we impacted better are most they to the

price lot even way in the better less sensitive. it And behave of for even bit a So annual to expect us, confidence. little they're a adds because accounts we a

all, that we their price in their and don't terms all in see even downgrades, the So increase. continue major churn, upgrade accounts accounts, ones impact, obviously we of see and any got

So overall, very encouraged from the results.

comes Mike line Funk next Bank Your with the of from question of America.

Yes. Thank exaggerated and to you the good for in the question, weakness see reports of greatly quarter. were

couple that. to So if of happy A could. questions I see

from deals, you're get differentiator is do competitive you more you deals. of to see what the some to you whether And where So success with think insight the if them, first, you not or on competitive those. drive winning are, love on

here. Roy It's

we well. close competitors. great So I are the our we we to see do have deals, And compete compete when that on against working like we road map very all larger think are we on even within hard see that traction we able to gaps competitors

place compared I So with the we're competitors to space. work a within in management think great really enterprise

but we compared dev, And -- large like Eran competitors SMB more side out on fronts mid-market. SMB the the well, the see it's other and those there, on great said, to to small and days CRM we really still compete traction do very early

helpful. actually and is one and then second multipart the price to churn. That's relates And

that then going X having we forward? about longer think will So you do ad price be Do churn? on how annual you hoc? should or algorithm it first, And predictable how as churn, you think then or factor pricing that the and about conceptually how walk the benefiting cross-sell, more term? into And increases through together, growth can does us pieces you price quantitatively get more plan

Sure.

to price we on With price, the were try the only, make is increased time, based it is we our sure we price value customer added we that for for the this our do and customers. years, lot increase when value a throughout first base. So of existing to Mike, this to we provide why We Eliran. increase, we that few regards last

what we think with yet. -- be just it of it annual be regards to I value-added would don't we every clear think rather coming more answer to majority tied the like a will than So having have year. the But overall, value-adding I think

regards cross-sell. to thing, The with second

the existing the work see management customer the together to potentially dev, I probably us existing to take existing will of opening with to packaging So us And cost allow with new momentum, CRM, base of to of features combination a it with think cross-sell customers, But we customers. products that this opportunities and get will potentially understanding we I few and positive think products having to necessarily with trend. are be is better alongside tied increase. functionalities, to price going additional once the the fact different not of a the introducing a have quarters be

from Berg comes line question with next Scott Your of Needham. the

becoming that customers today? for the your nice I customers? about in do customers buying X they maybe quick enterprise at are counts you that think to? and or solution point. this still some customer of you're platform actually core of smaller have the adoption ones. or Are you seeing CRM selling The Are some mid some that Really quarter. How are size types meaningful dev of the

It's Roy.

see the I a CRM both very SMB within see if the such say, we have. and think those let's small, road enterprise yes, more do So We and a dev we -- on larger that very have way do customers reach long like on we enterprises, to mid-market map but helps. than products, products larger play enterprises small, implementations deployments larger rather on

other? into consistent. monthly to I of plans. I customers spending seeing before way then, XX% contract terms And or you I upfront bit to or pressure, some historically, give times a of know in only economic the will switch monthly changes have buy either maybe little their any flexibility believe mentioned real, one annual, XX% on helpful. that guess, monthly. Very Eliran, been it's you pretty Are

if there all. changes you're Just seeing know any at don't

I where see last we actually, we No, we saw to in Eliran. monthly now. Basically, any saw years, to are Scott, from a annually. transition the change don't few

and this material the something that the And changes XX-XX I very stable years. expect is don't think kind be to is large, that. of, I throughout to by any going

question of with Your McGinnis from line the UBS. Taylor next comes

from in first a price one ask and is different XQ, the going way. My potentially just to back impact maybe

than less have XQ Eliran, would we throughout Just in to uplift the is So the the year? fair it how contributed million assume trajectory. trying should $X that about that contribution to if think understand scale

potentially that when provide And the installed from impact does uplift, to that from include just just as Or well impact that clarify, $XX lands new base? customer in the million higher you year-over-year is the too?

all second With the scenarios modeling that into million, potentially the to regard some is and with account new did of So maybe we'll $XX customers, existing scenarios. this for taking we question. kinds start

this account. So into everything is taking

been the was And would the half had if correctly, funnel I overall, would of correctly, asked. I I -- strong have performance the question, the profile existing momentum first it if say, top with the worse is fact coming we I been saw, your the understood it, say, to was, price If increase. you I lower. churn than this potentially and If from what what think numbers a regards the of With half, that business, to healthy we would understood would customers. good contribution have

CRM of your back that look that like I guys. for a you Perfect. quarter, is available now seems is, last I penetration big around think widely X%. And it And question be then could this was if with base my customer year, second total opportunity

So it couple thinking points that, I you Because add the trajectory year are like growth. guess, scale could seems could to just a a get how this of it about start to that business? of to

out would guys of penetration trajectory love just the and about color bit are just -- thinking more would a you of of in to So that. the terms gate, love little see how

this is Eran. Taylor, Yes.

to to mind them up. solid for also more were beginning sign taking continue like perform for they just looking the us, So bear yes, when encourage buy agree, and I new feels really pretty totally that into our customer just customers, it than in and numbers And of the product well, like base. we cross-sell existing X

customers there's new So of with lot potential as a well.

customers. we home bigger go page. promote upmarket also We we new we're our and overall, products of this in And platform of in continue to continue plan the to our to products. rate mentioned, very with the adoption happy with And our like

think presents I also our a base all, customer new for opportunity existing and this our in all for big So customers.

and that all you There joining, question now at you Ladies is for concludes gentlemen, disconnect. today's this Thank call. no Instructions] [Operator more may and time.