While on Wall Street the trading trend was negative on Tuesday, the stock of the Israeli technology company Monday (Monday.com) stood out with a 24.5% jump after the publication of its first reports as a public company.
Since the Nasdaq IPO in June, the stock has nearly doubled – from $ 155 to $ 305, a price that reflects a Monday value of $ 13.3 billion, making it the fifth largest Israeli company on Wall Street – more than old and established companies on the list like nature andAmdocs –
Monday is one of about 10 Israeli technology companies to issue on Wall Street since the beginning of the year, all worth over $ 1 billion – a phenomenon that reflects rising demand for high.tech companies showing growth in their operations, as has characterized the U.S. stock market over the past year. To markets.
Man holds nearly $ 2 billion in shares
Monday has developed a Work OS that allows organizations to create the tools and processes they need. The company topped analysts’ forecasts when it grew in the second quarter by 94% to revenue of $ 70.6 million, and its net loss (Non.GAAP) was significantly lower than forecasts and amounted to 26 cents, which is $ 11.3 million.
In a conversation with Globes, the co.founders and CEOs, Eran Zinman and Roi Mann, and CFO Eliran Glazer, talk about what is happening at the company. “It was a very successful quarter, we prepared the forecasts and also improved the forecasts for the future,” says Glazer. “We see continued growth, due to a number of factors: our ability to bring in new customers, the expansion among enterprise customers – customers who purchase over $ 50,000 in annual ARR (recurring revenue) terms, we have 470 such compared to 144 in the same quarter, and continued geographic expansion through partners.” –
Monday’s Trading Opening Ceremony / Photo: NASDAQ
Mann: “To start with Monday you just have to sign up and try. And the fact that it’s very easy to get started is one of the significant things in our ability to keep growing.”
Following the jump in stock, Mann holds $ 1.8 billion worth of stock, and Zinman holds $ 702 million worth of shares. The largest shareholder in the company is the American investment fund Insight Partners, which holds shares worth more than $ 5 billion (Insight has invested in other Israeli technology companies that are currently traded on Wall Street, including JFrog, Sentinel Van ו.walkme).
Another U.S. fund, Stripes, holds Monday shares worth $ 927 million. Avi Eyal, founder of Entree Capital, owns Monday shares privately and through Sonnipe (owned by Entree Capital), with a total value of nearly $ 1.7 billion – a respectable return on cumulative investment Of $ 13 million on Monday in its early years.
She overtook Wix, but saved her the quarter
One of the companies that Monday overtook in value is the internet company Wix , Whose stock has weakened following recent reports and is currently valued at $ 11.3 billion. There are good relations between the two companies: Mann, one of the company’s founders, previously held senior technology positions at Wix until he retired from it in favor of establishing Monday.
Wix was Monday’s first customer, and Avishai Avrahami, founder and CEO of Wix, is a private investor in Monday and holds about 3.5% of the company’s capital (some through Wix).
In fact, Avrahami’s holding in Monday is currently higher than his holding in Wix: on Monday he holds shares worth $ 473 million and in Wix – $ 351 million. When Monday was issued on NASDAQ, Wix posted a billboard near Ayalon Lanes in Tel Aviv to greet her (“Monday I’m in love”).
WIX congratulates Monday on the issue in a unique way / Photo: Courtesy of WIX
In addition, in Wix’s recent reports, the company recognized net income of $ 110 million thanks to its revaluation of its investment in Monday, which turned it into a net profit (GAAP).
Were you surprised by the stock’s reaction after the reports?
Zinman: “It’s very positive, of course, but we try to break away from the everyday and look at the long term. Stocks go up and down, there are a lot of things that make an impact.”
You have surpassed your friends from Wix in market value.
“Here’s an example of how trendy it is, a stock goes up and down. Wix made an amazing way and we are still just at the beginning. By the way, we got a tip from Avishai Avrahami – he told us ‘do not look at the stock, this should not set your mood’.”
Glazer: “The ecosystem in Israel has changed. Today there are amazing companies like Solaredge , Global Island and others. We want everyone to succeed. ”
“High revenue rate and efficiency in sales and marketing”
Like many technology companies, mainly in the fields of SaaS (software as a service) but not only, Monday is not profitable and invests large sums in its future growth. The market loves the companies that invest in the future, even if it comes at the expense of the bottom line today.
In the second quarter, as mentioned, Monday lost less than expected: the net loss attributed to shareholders under GAAP was $ 32.5 million, and the non.GAAP loss was $ 11.3 million, which is 26 cents a share – while analysts expected a dollar loss per share (About $ 44 million).
“Revenue grew at a very high rate, beyond growth in spending,” Glazer explains, bypassing the forecast. “Beyond that, following the Corona our move to a new structure was postponed in the quarter. There is also more efficiency in terms of sales and marketing because we are in.depth with existing customers and that requires less marketing expenses.”
However, he stresses that “this is not an indication that we want lower spending. We want to continue to grow and continue to invest in it aggressively. There will be more quarter.on.quarter fluctuations.”
So you’re not on the road to profitability yet?
Glazer: “No. We are turning to a huge market – $ 56 billion, which is expected to rise to $ 88 billion by 2024, and we are only at the beginning of market penetration. Companies that invest aggressively in sales and marketing in the early stages have created market presence and increased market share. “R&D costs, for the benefit of future growth.”
“With closure, without closure, people still need Monday”
In this context, Monday has now launched a new solution, monday workdocs – which allows, among other things, working together on documents in real time. The company realized that documents are often used as a starting point to drive work processes, and decided to allow clients to manage their work, ideas and information in an unstructured and open way, using monday workdocs.
On the expectations from the new launch, Mann says: “For us, this is something very big and exciting. It is a very significant building block within the operating system for the organizations we have built. “From work begins with documents: someone opens a document, shares others and there it stops. With us it continues – there are objects that can be embedded in the document, infrastructure that allows process building. This will be another way for people to enter Monday, and it will bring us new customers and deepen existing customer uses.”
Zinman: “Over the years people have taken tools like Excel or Google Docs and used them for work, but they were not meant for a team working together on a project. We rethought them, how to build them for the work environment.”
Does the change in the nature of work during the Corona period and the transition to remote work affect the demand for Mondays?
“No, we’ve been living next to the Corona for a year and a half, unfortunately. Except for a one – time event in March last year, which was a bit slowed down, it did not affect and we returned to an accelerated pace. ”