Q3 2021 Monday.Com Ltd Earnings Call
[music].
Thank you for standing by and welcome to about 90 Dotcom Q3 fiscal 2021 earnings conference call. At this time, all participants are in a listen only mode.
After the Speakers' presentation there'll be a question and answer session to ask a question at that time. Please press Star then one when you touch tone telephone.
As a reminder, today's conference call is being recorded.
I would now like to turn the call over to your host Mr. Bauer, Steven Investor Relations Director. Please go ahead Sir.
Thank you good day, everyone and welcome to Monday Dot Com third quarter 2021 earnings Conference call. Joining me today are Roy Man and Airlines Zinman co Ceos of money Dot Com <unk> Glazer money Dot Com CFO.
Earlier today, we released our results for the third quarter. Our earnings materials are available on our Investor Relations website at IR <unk> Monday Dot com.
You'll find the investor presentation that accompanies our prepared remarks, and a replay of today's webcast under the news and events section.
Certain statements made on the call today may be forward looking statements, which reflect managements best judgment based on currently available information.
Statements involve risks and uncertainties that may cause actual results to differ from our expectations.
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. Additionally.
Additionally, non-GAAP financial measures may be discussed on the call reconciliations to the most directly comparable GAAP financial measures are available in our earnings release and the earnings presentation for today's call, which is posted on our Investor Relations website.
With that let me turn the call over to Roy.
Thank you Byron and welcome to the Monday Dotcom team. Thank you everyone for joining us today.
During our first earnings call, we were thrilled to introduce many of you Monday dot com and to share with you our thoughts on the company and the large opportunity ahead of us.
Going forward, we will focus these calls on our most recent performance and our future expectations. We invite those of you are still just getting to know mundane dot com and our workers platform to visit our company and Investor relation website.
Where we have many videos and a lot of other content that should be helpful to understanding our company and our business now.
Now let me briefly talk to you about Q3, which was another strong quarter of growth even more organization news Monday com to create software that fits their needs revenue grew 95% year over year to $83 million as we continued to drive growth through the acquisition of new customers an increase of.
Adoption and expansion within our existing customer base.
As mentioned previously upmarket growth as one of our top priorities I'm pleased to report that our expansion into the enterprise space continues to gain momentum. We ended the third quarter with 613 enterprise customers up 231% from 185 in the third quarter.
2020.
Additionally, we continue to expand within our existing customer base. Our net dollar retention rates increased in the third quarter as a result of our ability to continue to deliver strong ROI and great customer experience net dollar retention for customers with more than 10 users improved to over 100.
30% and our net dollar retention rate for all customers improved to over 115% as a reminder, our net dollar retention rate is a trailing four quarter weighted average calculation because of these outstanding results and our continued upward trajectory.
Raising guidance for the remainder of the year.
For full year revenue, we are increasing guidance to a range of 300 million to $301 million, representing 86% growth for the year.
<unk> will provide you with more details on our third quarter results along with the full updated guidance.
I'll now turn it over to Ron to give you. Some further highlights from Q3. Thank you Laurie.
As we continue to take our product innovation to new Heights, we give our customers more capabilities to easily build their perfect No code low code with software in.
In Q3, we experienced a strong start to our new Monday work Dax launched new capabilities with my work and introduced one of the first <unk> management apps into Quest tour at meta recent connect event.
Let me first touch on Monday worked up in Q3, we launched Orthodox EBITDA customers the ability to manage their work ideas and data in an unstructured way.
These are more flexible ways to onboard and adopt our platform and in new customer entry point.
To date, our customers are using Monday work docs for a range of use cases.
Industries, such as marketing operations CRM anymore.
40000 existing customers are already using Monday work docs with many using Monday <unk> core complex workflows.
Since our launch our customers has created more than 300000 word docs on money Dot com.
It's amazing to see how much our customers last Monday with docs and in line with our mission. We wanted to provide our customer with even more freedom to adjust Monday work ducks to their business needs.
That's why we launched the capability to create layouts with Monday White box.
To allow customers to create any kind of template with live data for your lending with docs such as the CRM contacts page a deal page a marketing campaign overview and much more.
Our low code automation and integrations are used by the vast majority of our customers.
Percent of our enterprise accounts use them, while 88% used more than 50 different automation over.
Over the past year, our customers that are automated over 900 million actions using our platform.
Starting this quarter, we introduced the dynamic workflow builder, enabling our customers to easily create without any code any kind of new automation or integration.
How complex they needed to be.
Customers can now mix and match actions and triggers without limits on the number of actions that triggers involved the.
Developers can add their own no code automation and integration to create even more applications for our customers.
Our dynamic worth will build their world completely take our automation and integration to the next level, given even more power to customers and developers.
We're excited to announce today the launch of my work at place for customers and organization to centralize all items, whether it's deals campaigns tasks or anything else associated with their accounts. This mega table gives individuals within teams the ability to get our customers data across all business.
Units. We believe my work is another step in giving organizations the resources to improve operational efficiency and productivity.
Let me turn it back to Roy to further discuss our expanding ecosystem.
Thanks, Iran remained steady progress during the quarter and growing our ecosystem and expanding our global footprint through.
During the third quarter, we signed a new global Alliance agreement with Tata consultancy services, and leading global IP services consulting and business solution organization.
Tcs and Monday, we will work together to innovate digital workflow and automation solutions transforming workflow collaboration while insuring.
True story complaints.
We are also partner with Hartford, and SCM rush, where build up from the Monday marketplace to help deepen the value for customers using Monday for our marketing operations.
<unk> with our customers is key to moving our platform future together.
Lastly, we expanded our workforce presence with additional offices in Tokyo, and San Paolo We will continue to invest in growing our ecosystem and work first in order to serve over 1 billion global knowledge workers.
Now, let me turn it back to Ron to discuss our operating highlights.
Thanks Laurie.
We had another outstanding quarter in terms of customer wins and expansions. These were broad based across industry verticals with major companies, including Johns ebay <unk> and outbreak.
Let me speak briefly about job and how their usage of our world class continue to evolve.
As the World leader in Apple Enterprise management, helping more than 57000 companies schools and government organizations around the world manage and secure more than 25 million Apple services.
Just marketing team has been using the money dot com work horse to increase collaboration and efficiency since 2019 reasons.
Recently, they've had and many more groups such as product Engineering project management and sales enablement to the platform and allowing the 2000 employees to work more closely together.
This is another example of how money dot com can help high growth global companies and we're very happy to be part of their growth and success.
Our exceptional third quarter results are further proof that our customers are seeing the value of using a worker with with the platforms local capabilities customers can adopt each building blocks to build software applications and tools that fit their desire to use cases and evolving needs.
Creating a great user experience is at the core of how our company operates.
Which was recently on display at elevate our flagship customer conference.
And this year is elevated.
Able to help even more customers re imagine the way that they work with over 52000 registrants from over 100 countries over three times the number of registrants from last year.
Additionally, we continue to make investments in our people and leading publications are taking notice during the past quarter money Dot Com was recognized by Fortune magazine as one of the best multi medium workplaces, along with one of the best places to work for millennials.
I am extremely proud of our employees and what our company has come in a short amount of time.
Attunity ahead of US is huge we believe that we are at the intersection of a number of work trends No code low code massive digitization and remote work that positions our award of <unk> to become the market leader in our category.
I'll now turn it over to Ron to cover our financial and guidance.
Thank you Ron and thank you everyone for joining our call.
Today I'll review, our third quarter fiscal 2021 results in detail and provide updated guidance for the fourth quarter and full year fiscal 2021.
We are extremely pleased with the results of the quarter, which demonstrated continued high growth at scale across all fronts as Ron mentioned total revenue in the third quarter came in at 83 million up 95% year over year led by large expansion within our existing customer base and acquisition of new customers.
We continue to execute against an ambitious hiring plan for Q3, we ended the quarter with close to 150 employees globally. This represents an increase of more than 50% from a year ago with the majority of physicians coming from R&D and sales and marketing we plan to continue to make substantial investments in these categories for the for <unk>.
<unk> future.
For the remainder of the financial metrics disclosed unless otherwise noted I will be referencing non-GAAP financial measures. We've provided a conciliation of GAAP to non-GAAP financials in our earnings release.
Gross margin came in at 92% up from 87, 1% in the year ago quarter.
And development expense was $14 3 million or 17% of revenue compared to 22% in year ago quarter. We will continue to invest purposely as we position Monday to drive durable growth and winning in large addressable markets. While we continue to invest significantly in R&D the pace of our revenue growth is outbid.
The investment growth sales and marketing expense was $61 million or 72% of revenue compared to 128% in the year ago quarter. The improvement was driven primarily by continued efficiencies as we continue to scale, our sales and marketing spend to focus on customers with 10, plus users and enterprise customers.
Similar to R&D the pace of our revenue growth has outpaced the investment growth.
G&A expense was $9 1 million or 11% of revenue compared to 9% in the year ago quarter, reflecting increased costs of being a public company operating growth of about $9 4 million in operating gross margin improved to negative 11% net loss of $11 4 million and loss per share of <unk>.
Was negative 26.
Moving onto the balance sheet and cash flow, we ended the quarter with approximately $876 2 million in cash and cash equivalents net cash provided by operating activities was $3 8 million in the quarter.
Adjusted free cash flow was $2 9 million and was driven by strong collections stemming from our continued strong billings.
Adjusted free cash flow is defined as net cash from operating activities less cash used for property and equipment and capitalized software costs, excluding nonrecurring items, such as costs related to the build out of our corporate headquarter office in Tel Aviv now turning to our outlook for the fourth quarter and full year 2021.
For the fourth quarter of fiscal year 2021, we expect our revenue to be in the range of $87 million to $88 million representing growth of 74% to 75% year over year, we expect our non-GAAP operating loss of 23 million to $22 million.
For the full year 2021, we are raising guidance and now expect revenue to be in the range of 300 million to 301 million representing growth of 86% to 87% year over year.
We expect the full year non-GAAP operating loss of 65 million to $64 million and a negative operating margin of 22% to 21%.
As our guidance indicates we expect to end 2021 on a very positive note and enter 2022 with strong momentum we plan to introduce guidance for 2022 on our next earning calls with that now let me turn it over to the operator.
Thank you.
Again, ladies and gentlemen, if you'd like to ask a question. Please press Star then one on your Touchstone telephone.
To ask a question.
All right in line.
Our first question comes from Katherine <unk> Goldman Sachs. Your line is open.
Alright. Thank you very much congratulations on a spectacular quarter here not only to show solid topline, but you were able to show leverage on the bottom line. So all the metrics look fantastic. So congrats.
Question is as you look at 'twenty, two and beyond it looks like new.
Compare your financial results to the current company with the largest revenue.
You are coming up on them very quickly.
I'm curious to get your thoughts on the competitive landscape as you, especially the move upmarket.
What is it like.
Are you still seeing the wide open space that you did at the time of the IPO and before are you seeing in the margin some changes in the competitive landscape and as a result of moving upmarket I would assume that.
Prospects in the deal sizes that are afforded to you will start to expand pretty significantly and so youre going to have to hire more enterprise or the enterprise class salespeople, how does that motion coming along for you guys. As you as you look upon this tremendous opportunity in front of it. Thank you so much.
And Kash, it's Troy. Thank you for the question so.
Yes, we see as we grow and you asked like if we see this as a greenfield market. So the answer is definitely yes.
We are now already starting to see that companies are are asking for it to work for us up until now they looked at us for different <unk>.
<unk>.
But not for the core of building their own software you know that will be understood doctor. They asked for US we starting to see that they are asking for before so I think thats it.
Really positive momentum in the market that people are starting to understand this category companies are looking for it. So I think we are just like really in the beginning and obviously as we grow upmarket we will have.
To scale, our sales operation and invest a lot more in both marketing and sales and build that.
As we scale.
Operations, Yeah, and Thats something were.
Yes.
Landing on doing this year next year and you know like.
We're very bullish about.
Wonderful thank you very much.
Thank you.
Our next question.
Hi.
Oppenheimer Your line is open.
Thanks, guys, maybe a couple ones for me guys can you talk about work docs in my work seems to be off to a very nice start here, how do we think about the impact of those solutions on your.
Net retention numbers and then also maybe you could talk about the Israeli Shekel Korea seats.
Acting quite aggressively what does it do for your planning in your Opex as we move into 'twenty. Two how far ahead are you hedged in windows, when and how does it hit.
Yes.
Hi, This is ironic I can start with the first part of your question and then.
I will handover to otherwise so.
As we mentioned in the beginning we see amazing adoption of work that's more than 40000 accounts are using it but I think.
Even more importantly, 50% of all docs are being used for what we define as core workflows, meaning that as a.
A very important part of how companies manage their day to day.
This is up to date one of our most widely adopted feature is such a short amount of time.
More than 260000 workouts were created since we launched it it was like a soft launch.
So.
Looking all parameters, we see this as a huge success.
It's hard to say how much this will impact net retention because it's still early days, but.
<unk> <unk> from the adoption and the excitement and the feedback we get from users I'm sure. It has a lot of value to our customers and it will be reflected in their satisfaction and how to use that platform over time.
Thank you Ron de Dah, Italy, along with regards to your question on the shekel in.
Obviously this is a challenge for the entire industry in Israel the ecosystem of the startup companies, but if you think about that from a global perspective first of all 50% of our expenses are in U S. Dollars. If you think about our online marketing spend and payroll outside of Israel. So this is urged by definition.
In addition to that we are doing and using an edging company in Israel to make sure that we're protecting the budget obviously this year.
The dollar rate three two and now the check and a $2 one but we are trying to broadly edge against it we don't see a big issue due to the cost breakdown. However, this is something that we are very much focused on with regards to.
Today's by the Shekel dollar on the revenue side most of our revenues collected the U S dollar.
A small portion is in euro.
British pound.
So we are also looking at.
Edging strategies to make sure that we're also protecting our top line where possible.
Good stuff congrats guys.
Okay.
Thank you. Our next question comes from Scott Berg of Needham Your line is open.
Please make sure your phone is on mute.
One moment please.
Our next question comes from Mark Murphy of Jpmorgan. Your line is open.
Yes. Thank you very much I'll add my congrats on a very solid quarter.
My first question is I'm curious to what extent you think youre seeing uplift in demand based on favorable linkage with.
Being able to enable companies to adjust to hybridize workforces in other words.
<unk> employees that will be both remote and in office.
As the economies start to reopen from the pandemic just in terms of.
Creating this ability to have better collaboration around projects and deadlines.
Okay. Thank you.
Three.
So I think that.
Even during the beginning of the.
And then we've got a lot of reports from customers that it was seamless for them to move to work remotely.
And I feel we play a big part in helping people organized companies organized.
Around leafing, whether they are in work or.
You know at work.
Mostly or both.
So.
This this thing that changes all the time I think this is the world. We live in that it's going to I don't know how it is around the world in Israel. It could tell you we go back and forth and the system stay stable and you can work with it wherever you are.
Okay.
As a follow up.
I was chuckling because.
I saw another Monday dot com add on my browser when I logged in this morning.
Listen to the call.
Every time I see one of your ads.
A couple a couple of times a week I think.
This advertising campaigns are brilliant and they're fantastic you had one that didnt have the gorilla.
Foot or something like that.
Super Creative.
We also keep hearing that Apple's deprecation of I'd FAA is kind of up ending.
This model of performance advertising right, because you might not be able to use cookies or some of these low privacy schemes and so I guess I'm curious how how.
How long have you been able to adapt and keep that keep this re targeting going.
With these ads across across our devices and websites and just how have you been able to successfully navigate that and stay ahead of the curve.
Yes, Hi, Mark this is Ron so I can I can answer that question. So so I think the changes that you referred to are affecting more at BDC companies, who rely heavily on advertising through.
Mobile devices and tracking people across different application.
We're in a different position.
In terms of how we advertise.
First of all obviously, a big part of our budget.
As we.
It goes to Google Adwords and other services that are more intent based on its not about tracking people between people's intent and whats searching for.
In other platforms, such as Facebook or Instagram.
We target, mostly what people are interested in and not personal information. So those changes that you referred to aren't affecting us.
At all in terms of our ability to target people and find relevant customers on those platforms and maybe mark to add to what they wanted we also have a deep in the organization that is working very closely with us and we're looking at all the security issues with regards to our campaign.
Don't see much of an impact, but I would like also to take the positives with what you said earlier and said that we continue to invest aggressively in our online campaigns and what do you see this is this is part of our strategy so onboard.
We look at Q4 and even next year. This is one of the things that I would like to double down to make sure that you and your friends and your colleagues will continue to see this amazing advertisers as we continue to invest in them.
Great. Thank you very much.
Thank you. Our next question comes from Derrick Wood of Cowen <unk> Company. Your line is open.
Thanks, very impressive quarter.
Couple of questions on the inflection in new 50, K customers is.
Is that driven all by expansion business or are you starting to see more net new customers landing in that 50, K range and maybe could you comment on what geographies, you're seeing in terms of incremental strength.
Yes. This is Ron.
So so I would say both so we see our existing customers adjusted to remind us in our model is land and expand so usually people start using Monday organically in scale and then our sales team pick up those leads and have them scale. So we definitely see a lot of benefits from that.
And we get more and more customers that are able to scale within our platform, but one very interesting trend that we're starting to see as we scale and as we kind of grow our brands as customers will land.
With higher contract people that want to adopt Monday widely within their company and start with larger accounts. So my answer would be.
Both those two trends are what's affecting the growth and like I mentioned in the beginning this is a COO.
Part of our strategy going forward and a big focus for us as a company.
And maybe just to add to that we learned bigger and we see better retention profile obligating funds sold our kpis to the results that you have seen in the press release.
Fantastic.
And second question interesting to hear you are see spark a new global Alliance with Tata can you just talk about how you plan to build on this relationship.
Generate new channel leverage and what's the strategy with trying to coalesce other side.
Yes.
So I can pick this one three so.
We see partners is a big part of our strategy worldwide. So that was.
One of them.
We work with.
And over 100 worldwide.
Medium size and we're growing into the large ones.
And its amazing we see a lot of synergy with the existing.
At Pratt.
Practices that they have that we can just like integrate into those.
It's super exciting.
Thank you very much.
Thank you.
Yes.
Canaccord Your line is open.
Hey, guys.
Congrats excellent results.
To ask a little bit about the marketplace.
<unk> announced who'd, Sweden some rush.
Building out apps in the marketplace I think you've talked about launching a payment system into the marketplace at some point, obviously that would be huge for your partners. There just any thoughts around <unk>.
<unk> ability to monetize that the marketplaces it continues to scale.
Yeah sure. So this is Ron.
So yes definitely.
And the ability to monetize through our.
The marketplace is on our roadmap going forward.
We don't have exact dates but probably at the beginning of next year that's going on.
The timeline.
Again, we keep investing into the marketplace, adding lot of more features and we've seen those big partners that local and apps and overall, we see much more adoption within the marketplace more asking builds more users installing those application and we have.
A lot of features that we plan to add to that marketplace. As I mentioned is a very strategic part.
I would think about Monday as a platform so we're going to invest heavily into that.
Very helpful. Thank you.
Sure.
Our next question comes from Brian <unk>.
Jeffrey Your line is open.
Hi. Thanks. This is John again for bank tail I had two questions on first on workdays wondering.
I'm wondering if you're seeing different use cases compared to the use of boards, whether the same users are using both <unk> and <unk>.
Just if you can give more detail there and then just.
A quick housekeeping on the share lockup that was mentioned in the press release.
Wondering approximately how many shares maybe Lee I think from the AD fund it looked like it was a fairly small amount, but it sounds like it may be more broad based thank you.
So the highest ROI, yes, I can take the.
Work Nook.
So.
So yes, we have.
Many users that are builders like they build the workflow for them.
Books, like very creative board and connected to a document some things we've created a whole aerial work where you have.
Both integrated.
And the reason we created work docs is because we wanted to allow people an unstructured way to start work and we see a lot of people will just start with the documentary microwave some things in the new creative board within that dock, Okay. And then it takes off from there I can tell you that many people do the exact opposite may have a board member.
They are the documents Colombian they have.
Lot of documents within the board and the managed documents.
From the structured way through balanced structure. So I think we really saw one of the things we're trying to achieve which is a multiplication of abilities effect like you add.
So mostly just like one building block then multiplied by the powerful others.
It's really like.
Core and Amazing addition to the Workovers.
Hi, This is Ron just to make sure that you were asking about the share count.
Just to make sure. This is the question.
The release of the share lockup this coming up on Friday.
Please.
The reason for the share lockup. So we are going to do this Friday.
November 12th Theres going to be the release of the lockup exploration.
Is there a rough number the share that you expect to be eligible for linear from the F. One I think we are getting some questions that the number who are fairly small but looks like it's broad based thank you.
We can't really tell we remember we had two gradual releases along the way. So we cannot anticipate what would be the number of the release.
Thank you.
Thank you. Our next question comes from Brent Breakpoint of Piper Sandler Your line is open.
Thank you for taking the question here.
Pressed to see another quarter of accelerating growth here Jeff.
Gentlemen, but I'd be curious to hear how the freemium offering is impacting the land motion top of funnel build are you starting to see any kind of conversions to paid yet any color on.
The freemium offering and tier that was launched earlier this year it would be helpful. Thanks.
Sure Hi, this is Ron.
As we mentioned was a very successful around for us as a company and we are seeing.
No negative impact on the conversion, but on the other hand, we see a new type of funnel for users.
I will say that it is not yet super significant in terms of adding new paying customers because of the funnel is very long.
But what we do see is aware.
Awareness of our brand and we see more people using the platform.
Absolute numbers, because we have got a lot of free account individually individual usage and we feel that over time. This will create more exposure for our brand.
Conversion rate is steady so we see that our free funnel converging over time, but it's too hard to kind of predict how much impact. This will have on our bottom line of the company. So overall its a very successful.
Step in changing our product and I am sure its going to have a very.
Positive effect on our brand and over time, we might see more and more paying customers converting from that we funnel.
I can also add.
Sorry.
We feel the free is.
Base infrastructure to be more stops because if you have that ability to give customers. Some things that they can rely on forever for free you can offer other stuff that they can tie into like forms and other things. So I think it's a base for us to jump into future products more than anything and Thats why we are super excited about.
Helpful color there.
And just one quick clarification, you did generate positive free cash flow in the quarter.
<unk> well ahead of a year ahead of schedule. There I guess, how are you thinking about.
Balancing kind of growth year in cash flow.
Plan to further accelerate investments just how should we think about kind of the.
Nice little surprise here on for each positive free cash flow this quarter and how should we think about that going forward.
Thank you Brent actually expected this question.
So obviously this is a result of the fact that we had a significant increase in revenue.
And just as a reminder, our business model is paying.
Paying upfront central.
Fibers obtained upfront and 30% are paying monthly.
Fact that we had the nitro growth together with the very efficient collection drove this efficiency within our cash flow.
We will continue to.
Operating in accordance with our long term plan, we don't it's not a target for us to be cash flow positive.
In the near future or two.
To.
To generate cash definitely.
We're going to continue to invest aggressively as we talk.
Relate to Mark's question earlier on the marketing campaigns and hiring so from our perspective. This is obviously this is great, but we would like to continue to invest aggressively and make sure that we see this efficiency going further.
One more thing that because we generate such a huge.
Capital efficiency, Austria, if you think about every dollar that we brought in since inception.
We're getting like $3 in terms of that.
Definitely for us it would be stupid not to continue to invest so this is the direction, we're going to continue to invest aggressively on all fronts.
If I can.
Support with 800, saying ROI than the.
The plans we have for next year are going to challenge the revenue growth but.
No.
Perfect.
We have big plans for next year.
Great to hear thanks for the color guys. Thanks.
Our next question comes from origin.
<unk> of William Blair. Your line is open.
That's perfect. Thank you very much and congrats on a great quarter guys.
I was particularly impressed with the 50 K trends and.
And I'm wondering as you kind of expand your presence as brand awareness builds and as you've seen more upmarket traction whether the profile of the customers that you're attracting has changed obviously customers are willing to spend more but I'm wondering if a profile tends to be more youre starting to see more larger entered.
<unk> come in or too early to see that.
Mix shift in the.
Customer profile at this point.
So yes sure. So we are going to.
As we said the core focus for our customers is our customers with them plus users, but we see the share of this customer our June are basically increasing.
No.
Over time their shelf IRR and also remains higher so the profile of these customers is definitely contributing to our.
Our retention rate.
And growth in addition to that we see customers with more than 50 K India.
Growing as well so the combinations the combination of customer of 10, plus users flock group of them ourselves.
Customers with more than 50 game.
Ill, becoming.
Kind of I would say the bulk of our customers and this is the customers that we are pursuing as part of our.
Marketing and sales effort.
So we expect these trends to continue up.
Important to say that we don't think less neglect the smaller customers because they are basically whilst nature becomes the bigger customers. So even if we start we see the policy of the big customers. It's important for us to add the small one.
Later becomes a big one if it makes sense.
Yes.
Very helpful very clear.
And then I wanted to follow up.
<unk> last question there around around investments it sounds like.
You have big plans for 2022 I was wondering if you could maybe just touch on the.
Go to market investments that you're making right now, particularly in the direct enterprise group, because we did see a big step up in R&D expense this quarter, but I think the tick up in sales and marketing was a little bit more modest. So I was wondering if there is any.
Hiring trends that you would point out that maybe are not coming in yet that might come in.
Next year.
So definitely we are going to continue to.
Higher aggressively so just.
The PR in the past we opened it.
Sales Academy in Israel, where we had I think.
Of registrations and we only choose.
Dozens of them just to make sure that we have the talent is.
Not only salespeople is customer success and customer success manager, we call date drove retention and.
Customers Big customers. So this is another place where we have a.
Big plan to double down on hiring the customer success managers.
And this is part of our go to market strategy. In addition to that we would like to continue to invest as you said on R&D for the combination of investment in R&D as well as in.
And customer success alongside the partners. This is.
I would say the main focus of us within the next quarter and the following years.
Okay very helpful. Thank you and congrats again.
Thank you. Our next question comes from Scott Berg.
Okay.
Hi, everyone. Thanks for taking my questions and apologize for the audio issue earlier.
Nice quarter, I guess I got two questions here and one revisit.
A question from a moment ago around enterprise customers, but I wanted to ask a question I guess a slightly different way is as you just look at your lands broadly whether it's a small customer large customer today or your customers landing with a different seat count 10 initial sale kind of on the average than say, maybe a year ago right right as the.
Pandemic was really kind of blended full force.
Yes.
Thank you. So this is Ron.
So Scott I think.
Currently we see a trend where as.
As I mentioned, a big part of our enterprise strategy is about a month, but we're also seeing larger companies starting from a larger deployment.
Within Monday.
So as we can increase our brand awareness and people are more aware about our solution.
So we see kind of more.
Companies are starting to adopt and Monday, I will like to deployment.
It's also the fact that we improve our product and make it more enterprise ready and other changes that we're making.
So our platform so definitely yes.
But again, it's both both bottom up and larger accounts deploying but that trend you mentioned, we definitely see it.
Great and then from a follow up question is.
I had heard from a consultant not that long ago on.
Their thoughts that back to the office might actually have a positive impact for vendors in this space.
Mainly because they start seeing all the antiquated processes, even more once they're in person and an office versus maybe not all of the other challenges when they're working at home do you think going back to the office can be a trend to help adapt schools like Monday today or.
Maybe that trend just been set from working from home over the last year. Thank you.
So.
So what we saw during like the shift from.
Work to home is that people was.
Struggling to organize things.
Krishnan to digitize and organize themselves and when they come back with what we see is that and it might support what you got is that.
It's easier to adopt a new tool and to change things. When you are together in an office okay.
So I think the adoption of new tools are easier for Neil together.
Kind of like doubling down on solutions you already have.
When when people are although setup.
Maybe just to add to it if you think about what happened in the last few years.
History in the sector that we operate so definitely there is a secular tailwind and there is momentum with digitization.
There are more towards the cloud the use of cloud. So this is a long term trend that we're seeing.
So the fact that.
Working remotely or going back to the offices I think these trends will continue and will drive further growth in this sector in our space.
Fantastic Thanks for taking my questions.
Thank you.
Next question comes from Andrew de Gasperi Berube <unk> capital Your line is open.
Thanks, Aaron Berg just.
Two questions. If I may the first one I would elevate you announced the work docs release and I was just wondering how does that stack up for example, with Microsoft.
Microsoft announced last week.
<unk>.
Luke.
And how would you say is this is.
Some indication of Microsoft is also trying to get into the wealth management space.
Yes, hi, so this is a run.
Yes, I think I think Microsoft is definitely looking into this market.
And I think kind of the disadvantage is that.
The Microsoft Suite is very.
Fragmented you have many many tools that can do many things I think the benefit of having one platform. One work where you can manage all aspects of your work is really a game changer in how user adopt our solution and how to use it definitely over time, we're going to see more kind of companies looking into adding those kind of.
But again I think we're in a very different position in terms of customer adoption as you can see just since we released worth dock.
The adoption and usage on our platform.
It has been really significant.
This really shows that the combination.
Other elements of the platform the board diffused a dashboard with the word Doc is a true game changer I think the worst of just by themselves would have.
Make this impact on our users and how people use it.
Thanks, that's helpful and then secondly.
On the enterprise wins this quarter.
Can you maybe disclose how many seats so to speak have the biggest deals landed with.
And then if any of the deals you signed an enterprise wide wall-to-wall, so to speak or exclusive.
Yes so.
So we're seeing thousands of seats that we're landing and expanding within our existing customer base.
We are approaching seven figure transactions.
And hopefully this is hot right, it's not a target for US is something that you would like to pursue as well.
So we are seeing content growth in the number of seats.
And.
We lent bigger within customers.
Correct me if I'm wrong.
Closing like wall to wall or how many accounts, but we definitely see those as well.
Great. Thank you.
Thank you.
I'm showing no further questions at this time, ladies and gentlemen. This does conclude today's conference. Thank you all for participating and have a great day you may all disconnect.
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