What Management Said

Read the full Q2 2025 transcript ↗

Please refer to our earnings release for more information on the specific factors that could cause actual results to differ materially from our forward looking statements. Reconciliations to the most directly comparable GAAP financial measures are available in the earnings release and the earnings presentation for today's call, which are posted on our Investor Relations website. Underscored by robust revenue growth of 27%, this performance reflects surging demand for our platform and the powerful value we deliver to customers across industries. Our relentless focus on efficiency is bearing fruit with Q2 non GAAP operating margin of 15%, a testament to the strengths of our business model and disciplined execution.

The enterprise continues to be our fastest growing segment and the investments we have made in offering for these customers are bearing fruit. In Q2, we achieved a record number of net new adds of customers paying over $100,000 annually, further validating our traction with enterprise organizations. We are very excited to share that Monday CRM has recently reached $100,000,000 in annual recurring revenue, marking a significant milestone in our product's rapid growth. This achievement underscores the strong demand for a flexible, customizable CRM platform and the trust our customers place in money.com to power their business operation.

At money.com, Harris will lead our global marketing organization and drive forward our evolving strategy focused on creative, human centered storytelling to support continued dynamic growth. With that, I'll now turn it over to Eliran to cover our financial and guidance. Q2 marked another strong quarter with solid revenue growth and improving efficiency. Total revenue came in at $299,000,000 up 27% from the year ago quarter.

What went well
  • Q2 total revenue came in at $299 million, up 27% year-over-year, reflecting surging demand for the platform.
  • Non-GAAP operating margin was 15%, a testament to the strength of the business model and disciplined execution.
  • Net income was $58.3 million, up from $49.3 million in Q2 2024.
  • monday CRM reached $100 million in annual recurring revenue, a significant milestone reached in under three years.
  • The company achieved a record number of net new adds of customers paying over $100,000 annually.
  • Users performed 46 million AI-driven actions since launch, growing by almost 20 million in the quarter, a strong indicator of increasing engagement.
  • Gross retention was at an all-time high across the whole customer base, not just enterprise.
  • Adjusted free cash flow was $64.1 million at a 21% margin, keeping the company on track for its Investor Day goal of over $1 billion in free cash flow from fiscal 2023 to 2026.
  • The company launched three AI-powered capabilities, Monday Magic, Monday Vibe, and Monday Sidekick, marking a major step in the evolution from work management to work execution.
  • monday.com appointed a new Chief Marketing Officer (Harris Beber) and its first Chief Customer Officer (Adi Dhar) to strengthen go-to-market and the customer journey.
What went wrong
  • The company saw softness in the downmarket and SMB segment, attributed largely to changes in the Google search algorithm affecting customer acquisition.
  • Overall NDR declined from 112% to 111% due to lapping the 2024 price increase.
  • CRM net new customer adds came in well below the typical quarterly pace, partly on seasonality and partly on low-end market pressure and a deliberate shift toward larger, higher-ACV customers.
  • Calculated billings decelerated slightly sequentially, though management reiterated billings is an imperfect, cash-based measure of the business.
  • Despite a roughly $6 million revenue beat in Q2, the full-year guide was raised by only about $3 million, reflecting conservatism around Google search uncertainty.
  • Fiscal 2025 is characterized as an investment year with roughly 30% headcount growth slightly ahead of top-line growth, causing some margin compression.

Guidance Changes

MetricPeriodCurrent guidance
RevenueQ3 FY2025$311 million-$313 million, up 24%-25% year-over-year
Non-GAAP operating incomeQ3 FY2025$34 million-$36 million, operating margin 11%-12%
RevenueFY2025$1.224 billion-$1.229 billion, up approximately 26% year-over-year
Non-GAAP operating incomeFY2025$154 million-$158 million, operating margin approximately 13%
Adjusted free cash flowFY2025$320 million-$326 million, margin 26%-27%
Overall NDRFY2025Stable at 111% through the end of the year
Employee headcountFY2025Approximately 30% growth, decelerating in H2 and more moderate in 2026
FX impactFY2025Estimated full-year impact below 30 basis points
Pricing contributionFY2024-FY2026Unchanged at $80 million total with $40 million impact this year

Performance Breakdown

MetricYoYNote
Revenue +27% to $299 million Surging platform demand across industries, strong enterprise momentum, and multi-product traction, partly offset by downmarket softness.
Operating margin 15% Relentless focus on efficiency and disciplined execution during an investment year.
Net income $58.3 million versus $49.3 million Revenue growth and improving efficiency.
CRM ACV Over 20% increase Seat expansion and larger customer lands as the CRM product moves upmarket.
AI actions 46 million cumulative since launch, up nearly 20 million in the quarter Growing adoption despite the introduction of paid AI credits earlier in the year.

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Google search / customer acquisitionPerformance marketing pressure encountered beforeGoogle search algorithm changes creating minor but noticeable softness in SMB, prompting reallocation of budget to other channels; expected to be temporary—
NDR112%111%, with the step-down attributed to lapping the 2024 price increase, expected to stabilize—
Product strategyWork management platformEvolving from work management to work execution via Monday Magic, Vibe, and Sidekick doing the work for customers—
LeadershipCRO Casey George joined the prior quarterAdded new CMO Harris Beber and first Chief Customer Officer Adi Dhar to support upmarket growth and retention—
Investment cadenceRoughly 30% headcount growth in 2025Decelerating hiring in H2 with a more efficient, moderate pace expected in 2026—
Capital allocationOrganic growth focusOrganic growth remains priority one, with inorganic M&A considered to accelerate product roadmaps given roughly $1.6 billion in cash—

Q&A Summary

Are you waiting to hit an inflection point where new products and the enterprise pivot stabilize the growth rate?
New go-to-market leadership (CRO, CMO, CCO) will drive upmarket momentum, retention, and expansion, while the multi-product engine helps bundle and sell more into the SMB segment; both efforts contribute to continued revenue expansion and will converge over time.
What is the demand environment and was there anything different in linearity with large deals?
Demand overall remains very strong with record net adds of $100K customers and good mid- and upmarket traction; there is some downmarket softness from Google algorithm changes believed to be temporary, with actions already underway to reallocate resources.
Billings decelerated sequentially; is that still the right forward metric and could we get RPO?
Calculated billings is an imperfect, cash-based measure, so the company looks at ARR growth; NDR fell from 112% to 111% on lapping the 2024 price increase and is expected to stabilize, while gross retention continues to improve.
Why did CRM net new customer adds come in well below the typical pace?
It is partly seasonality (Q1 stronger, Q2 lower) and partly low-end market pressure, plus a deliberate strategy to land bigger, higher-ACV CRM customers, so customer count is not the perfect indicator of progress.
How did CRM scale from zero to $100 million ARR in under three years?
The CRM offers complete flexibility so customers can build whatever they want, driving huge demand; it started with an SMB audience and is moving upmarket as marketing and other capabilities are added to become a full suite.
How do you remediate the impact of Google AI search on customer acquisition costs and how long will it take?
The impact is not large and has been seen before; the company runs many channels beyond AdWords, does AIO optimization, and can mitigate quickly, with the impact already baked into guidance.
Can we see higher, more durable growth or operating leverage beyond this investment year?
2025 involved catching up on sales hiring and heavy R&D investment in AI, and 2026 will have much lower headcount growth and greater efficiency while the results of 2025 investments materialize.
How did AI actions trend versus expectations and what is the 2026 monetization story?
Adoption is strong, growing nearly $20 million actions in the quarter despite introducing payment earlier in the year; more accounts are exceeding the 500 monthly AI credit limit, and new features like Magic and Sidekick add usage, setting the stage for bigger AI monetization in 2026.
You beat Q2 by roughly $6 million but only raised the full year by about $3 million; where is the buffer?
It is not the new CRO; enterprise performed to expectations while there was some weakness in the lower end partly from Google changes, so the company is being conservative given limited visibility into how the search dynamic plays out.
Is 30% headcount growth a surge, and will hiring moderate going forward?
Headcount growth of about 30% in 2025 will start to decelerate in H2 and be more moderate in 2026, as the company builds the right resources to capture a large opportunity.

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Q2 2025 call
Reported 2025-08-11 · figures from the monday.com Ltd. Q2 2025 earnings call.

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