Q2 2023 Monday.Com Ltd Earnings Call
Speaker 1: Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to Mondays.com's second quarter fiscal year, 2023 Ergings Conference call.
Speaker 2: I would like to turn the call over to mondays.com's Director of Investor Relations, Mr. Byron Stiffin. Please go ahead. Hello everyone, and thank you for joining us on today's conference call to discuss the financial results for monday.com's second quarter fiscal year 2023. Joining me today are Roy Mann and Aaron Zimman, co-CEOs of monday.com, and Eliran Glazer, monday.com's CFO . Thanks for joining us.
Speaker 2: We released our results for the second quarter earlier today. You can find our quarterly shareholder letter, along with our investor presentation and a replay of today's webcast under the news and events section of our IR website at ir.monday.com.
Speaker 2: Certain statements made on the call today will be forward-looking statements, which reflect management's best judgment based on the currently available information. These statements involve risk and uncertainties that may cause actual results to differ from our expectations.
Speaker 2: 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.
Speaker 2: Additionally, non-GAAP financial measures will be discussed on the call. 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.
Speaker 3: Now let me turn the call over to Roy. Thank you, Byron. And thank you everyone for joining us today. In the second quarter, we continue to make significant strides in executing our long-term strategy. Deliver exceptional results, revenue grew 42% as demand for our customers remain healthy.
We continue to demonstrate improved operating efficiency and cash generation. Reflecting our ongoing commitment to driving sustainable growth, Eliran will talk you through our financial performance in more detail. This quarter we are thrilled to announce the completion and release of Monday DB 1.0 to all our accounts.
customers are already experiencing large and more complex boards loading five times faster, enabling them to work more efficiently and handle data intensive and complicated workflows.
Future releases of MondayDB will provide even more speed, enhancements, scalability, and functionality. In Q2, we also launched our AI Assistant and introduced several new AI capabilities. These include automated desk generation, formula builder, email composition, and content generation. Additionally, we opened our AI Assistant Infrastructure.
registrants and more than 40 AI apps developed, the hackathon showcased the enthusiasm and talent within our monday.com community.
We have also been working to optimize our infrastructure and interface to enhance the user experience and reinforce a robust multi-product ecosystem. We see an extraordinary opportunity to enhance cross-selling efforts, strengthen inter-department organizational connection, and solidify monday.com as a vital partner across all business use cases.
Let me now turn it over to Erwan to walk you through some of our recent innovation efforts. Thank you, Roy. As Roy mentioned, we remain focused on our multi-product strategy and ensuring that our products can successfully enable cross-functional collaboration for our customers.
Monday's LCRM is now available to approximately half of our customers and we continue to see strong demand for the product.
We are committed to continuously elevating our sales CRM product with best-in-class features.
This quarter, we introduced new mass emailing capabilities, allowing users to reach out to multiple contacts through Monday-
In addition, we've re-ramped and upgraded our mobile item page, making it easier than ever before to access and update information on the go.
We also recently announced that Monday Dev successfully transitioned out of beta. The initial demand for the product has been strong, and Monday Dev has already earned a place as one of the top-raider bug tracking softwares on G2.
As we gradually roll out Monte Sel CRM and Monte Dev through our existing customer base, we see an incredible opportunity to foster cross selling. Since the launch of our products week in 2022, we've seen an impressive 1,656 accounts.
initially begin with a work management product and later extend their portfolio with an additional product.
This significant extension underscores the value of our offering and the trust our customers have placed in us.
Separately, we are excited to announce that we are elevating the workflow experience for our customers with the introduction of Monday Workflows add-on. Monday Workflows offers a fully customizable and visually intuitive interface, empowering users to build workflows with ease.
by utilizing drag and drop blocks, Monday Workflow simplifies the entire Workflow creation process, making it accessible to users of all levels of technical expertise.
The new Monday Workflows is currently open to 20% of our customers and will be gradually open to all customers by the end of Q3.
With that, let me turn it back over to Roy. Thank you, Iran. As we continue to grow, we are focused on ensuring we have the right team in the right place to lead Monday.com into the future. And we took steps in the quarter to strengthen our management team with the promotion of two senior executives.
Daniel Leria appointed as the first chief product and technology officer and Shiran Nawi was appointed as our chief people and legal officer. Both Daniel and Shiran has served as an outstanding senior leaders for many years here at monday.com and we are confident that they will both excel in these new worlds.
Finally, we are excited to announce that this year's New York City Elevate Conference on December 6th will feature a segment exclusively for our shareholders. Mark your calendars and join us for our first ever Investor Day as we showcase our exciting journey ahead. We are incredibly proud of what the monday.com team accomplished this quarter.
We are just scratching the surface of our potential and we are excited about the opportunities to continue to generate sustainable long-term value for our shareholders. With that, I'll turn it over to Hélène to cover our financial and guidance. Thank you to everyone for joining our call. Today, I'll review our second-quarter fiscal 2022 results in detail and provide...
platform and product suite. Total revenue in Q2 came in at $175.7 million, up 42% from the year-ago quarter. Excluding the impact of foreign exchange, revenue grew 43% year-over-year.
Our overall net dollar retention rate declined in Q2, reflecting a continued slowdown in customer seat expansion amid the challenging macroeconomic environment. We continue to expect some pressure on NDR in the second half of fiscal year 23 and our guidance now assumes full NDR slightly below 110%.
As a reminder, our NDR is trailing 4-quarter weighted average calculation. For the remainder of the financial metrics disclosed, unless otherwise noted, I will be referencing non-GAAP financial measures. We have provided a reconciliation of GAAP to non-GAAP financials in our earnings release.
Second quarter gross margin was 90%. In the medium to long term we continue to expect gross margin to be in the high HATIS range.
Research and development expense was 27.9 million or 16% of revenue compared to 19% in Q2 2022. For fiscal year 23, we anticipate that R&D expenses as percentage of revenue to be in the high teens as we build our product suite and scale our work OS platform both horizontally and vertically.
7 marketing expense was 98.8 million or 56% of revenue compared to 70% in Q2 2022.
G&A expense was 14.7 million or 8% of revenue compared to 12% in Q2 2022.
Net income was 21 million up from a loss of 14.9 million in Q2 2022. Diluted net income per share was 41 cents based on 51.2 million fully diluted shares outstanding.
As of the end of the quarter, total employees headcount was 1646, an increase of 64 employees since Q1 23. We expect to continue hiring throughout the course of fiscal year 23, with the focus on our R&D product and sales teams as we build out our platform and product suite.
Moving on to the balance sheet and cash flow. We ended the quarter with 989.4 million in cash and cash equivalents up from 935.6 million at the end of Q1 23.
Free cash flow for Q2 was 45.9 million and free cash flow margin as defined as free cash flow as the percentage of revenue was 26%.
We continue to expect to report positive free cash flow on a consistent quarterly basis moving forward, and to achieve our third consecutive year of being free cash flow positive in fiscal year 23.
Free cash flow is defined as net cash from operating activities, lash gas used for property and equipment and capitalized software costs.
Now let's turn to our updated outlook for fiscal year 2023.
For the third quarter of fiscal year 23, we expect our revenue to be in the range of 181 million to 183 million, representing growth of 32% to 34% year over year. We expect non-GAAP operating income of 4 million to 6 million and an operating margin of 2% to 3%.
For the full year of 2023, we now expect revenue to be in the range of 713 million to 717 million, representing growth of 37 and 38% year over year. We expect full year non-GAAP operating income of 24 million to 28 million and an operating margin of 3% to 4%.
I'll now turn it over to the operator for your questions. Thank you. The floor is now open for your questions. To ask a question this time, please press star then the number 1 on your telephone keypad.
We'll pause for just a moment to compile the Q&A roster.
Your first question comes from Kash Angan with Goldman Sachs. Your line is open. Your line is open.
Great. Congratulations on a superb quarter, Roy, Iran and Eliran. Glad to see the growth and the free cash flow margin expansion here. I'm curious to get your thoughts on the DevOS and also the database product. What is the unique...
unique differentiation that Monday has for these products within its customer base. And if these products are successful, should we expect net expansion rate to stabilize at some point? And when do you think we see the bottom in that? Because obviously, if we've got the install base potential for these products, we should start to see a turn in that metric.
Wondering if you have any thoughts on that. Thank you so much, Wonscare. Yeah, thanks, Keshe. This is Aran. So just to repeat the first part of your question you were asking about Monday DB and Monday death.
Exactly, the differentiation of these two products within your base versus the competition.
Yeah, so, Monday DB, Monday Database is basically, it's not a product, but a new set of capabilities that we release to all of our accounts and users. You can think about it as an infrastructure change. And the impact of that, we just announced that we finished the deployment of version 5.0.
to dramatically scale on top of our platform in terms of size of boards, size of dashboards, automations, integrations, and we think that this will lead to enterprise customers being able to dramatically scale their operations and accounts, add more users.
more use cases, which will ultimately lead to more net expansion and more usage and more attention among our larger customers. Monday Dev is our product that's competing in the dev industry, basically allowing developers and product managers and designers to work effectively.
on agile springs and manage on the operations. This product is coming very nicely. We just launched out of beta as we mentioned, and we see some good numbers and momentum. We see this as a very strategic industry for us as a company. Yeah. Hi, Cash. It's Roy. I can add that like the differentiator we see for dev and all our products.
to shape the solution to whatever they see fit and how their organization works. And we see this as a huge advantage also on deals and with customers when we talk with them, it's a major thing that it's built on top of the work OS.
And now I'll address your question on NDA. Yes. Thank you.
I wanted to just end the hour, but please follow up on maybe you have.
No, I just wanted to get the thoughts on what is kind of missing in the marketplace with the dev community that you think you can address the particular problem. That was what I was curious about.
So, I think there is like one major player within this market and what we see is that it's very geared towards developers. When we look at the R&D teams, it's comprised also of product people and designers and then you have the rest of the company that you want to connect to.
and with Monday we feel, our customers feel, they can customize it better to have a workflow where everyone takes part more and it's also more connected to other parts of the organization and not just the developers.
Okay, thank you, Roy-Ran. This is Eliran, Keshe, I will address your questions with regards to MDR. So as we said, we continue to expect moderate pressure on MDR throughout the remainder of the year. And by the way, we took it into account in our guidance and we assume full MDR to be slightly below 110%.
To your question, when we expect it to stabilize though, already going into July we see signs of stabilization and we expect it to level off by the end of the year. Just as a reminder, because it's a weighted four quarters average, then there is a lagging effect. Maybe just also worth mentioning that the gross retention on the same level remains there.
Our next question comes from Angeline Borra with J.P. Morgan. Your line is open.
Oh, great. Hey, thank you so much, and congrats on the great quarter. Roy, I want to ask you about the platform itself, as you were talking in the previous question, mainly about the marketplace. It seems like the percentage of apps that are being monetized are going up steadily.
I see it about 45%. You recently launched the API versioning. One of your partners said it could accelerate third-party development. You are exposing the AI layer as well as the workflow engine seems like to the partners. Do you think Marketplace starts emerging as a material growth driver in 2024?
It's hard to say how much material it would be because we have our core product, the CRM, the DEZ, the work management, which is the main growth driver. We do believe that the marketplace will help us close larger deals. There is a lot of...
Like you mentioned, partners are working on it and making each of those products more complete, more suited for long-term solutions. And so we put a lot of emphasis on the marketplace and a lot of investment.
and in the ecosystem. And I think it's a longer term play rather than just like making the numbers for next year. Understood. Just one follow up on the macro environment. Seems like that 110% earlier on.
You're expecting it to stabilize at about 110. Seems like it's a little bit of a tick down. You're now saying slightly below. What are you seeing in the macro? Has that changed a bit? You also said that it's stabilized. I'm a little bit confused on maybe what are you seeing on the macro environment. Help us tease through that. And maybe if you can talk about the top of the funnel in July and August , that'll help. Thank you.
some pressure with the new customers expansion, mostly expansion with regards to decision makers are brought to the table and longer sales cycles. So there wasn't really a big change and the pressure on net dollar retention, we also called it out in paragorters.
and now said that it's going to be slightly below 110%, but we did see some stabilization with the net dollar retention going into July as kind of it's getting flat. So by the end of the year because of the lagging effect
of the four trailing quarters. It's going to continue, but then we believe that it's going to pretty much flatten by then. And then hopefully next year, we're going to see a change in the trend.
July and August ? Top of Funnel activity remains healthy. We still see a very healthy stream of new customers that are joining Monday. Also having in mind the fact that we now have CRM and Monday Dev is out of beta, it definitely contributes to the fact that we are bringing healthy stream of customers. Thank you very much. Next question comes from Jackson Eder with Moffett Nathanson. Your line is open.
Great. Thanks for taking our questions, guys. First one on the commentary from MondayDB.
Are there any quantitative metrics to report in terms of whether these faster load times on big boards are driving either increased usage or adoption or seat count or something at some of your largest customers?
Yeah, hi Jackson, this is Ron. So in terms of the impact, MondayDB has already, it's about 5x the performance in terms of loading large boards. And as we release additional versions, we'll see more impact on other parts of the platform.
So definitely customers feel it. We get great feedback from customers. Customers are able to use larger and larger boards. We don't see it yet in terms of revenue numbers or net retention, because just as a reminder, we just finished rolling it out to our customers and we expect this to have a longer term effect on customer expansion and usage.
But in terms of customer feedback and the results that we measure in terms of loading time and performance, the results are super positive. So we're pretty certain it will have an impact. It's really hard to quantify it exactly right now.
Okay. Yep. That makes sense. Then,
In terms of the net retention rate, I hate to keep coming back to it, but I'm just curious whether there's any, in the signs of turning around that you talked to in July , any particular segment of the market, whether it's enterprise or 10 plus users or small end that seem to be stabilizing at half a percent,
When you look on a month-to-month basis, first of all, the decline is becoming more and more moderate across the board. So I wouldn't call out any specific segments, just more encouraging across all segments.
All right. Okay, great. Thank you.
Next question comes from Steve Enders with Citi. Your line is open.
Okay,
Thanks for taking the questions here. I do want to ask on the CRM side and the success of the cross-sell back into the customer base at this point, I guess as we think about that and look at those numbers, I guess what's like the typical.
customer journey look like going from the platform to the CRM? And is it for kind of net new use cases or is it customers kind of converting over from maybe already using some of those existing capabilities for a CRM-like use case?
Hi Stephen, this is Aran. So as we mentioned, over 1,600 accounts that were using work management as part of the CRM product and the deaf product in addition to that. And so it's not like initially buying those two products, but accounts that were already using Monday.
sometimes for a few months, sometimes over a year. I've explored our product offering and then decided to buy the CRM product. I think what's interesting, what we found is that almost in all cases, the CRM users were in addition to the ones that were using the work management platform.
So you would see salespeople and managers from the sales team buying additional seats for the CIRAM product. So I think this is kind of really encouraging to see other departments joining and us having a large deployment within customers. So mostly with new teams, sometimes they would already use this from the work management
platform or did any promotions or sales teams started approaching customers and selling them, selling them organically, but we're very encouraged with the numbers and this is really connected to our, you know, strategy of selling moving products to different departments within the organization. Okay, gotcha. That's helpful.
Is there anything that we should be thinking about in terms of like linearity throughout the rest of the year and you know anything like one time in nature that maybe got pulled into that got pulled into the first half that would change some of the typical seasonality time provisions how the
Yes, so with regards to Steve, with regards to free cash flow, so when we're looking at Q3 we're probably looking at tight ends and we're looking at fiscal year 23 as a whole, probably low 20s, we're seeing a very healthy, you know, disciplined spending and improving.
we kind of increased our expectation for Q3 and the end of the year.
All right, perfect. Thanks for taking the questions. Next question comes from Argan Batia with William Blair. Your line is open.
Perfect. Thank you and congrats guys on a great quarter. I wanted to touch on some of the upmarket traction that you're seeing. It's clear 50K customers are strong. You're rolling out.
product capabilities with DB and workflows that are going to be more catered to the enterprise. Have you thought just at a high level about how far upmarket you would want to go? Like what's the ideal customer profile for you as you focus on more enterprise capabilities whether that's from a company size or complexity.
Is there a limit that you're putting on it or do you want to just keep moving as high as possible into the enterprise?
Hey, thank you for the question. It's Roy. So I think it's a journey going upmarket. We've been taking it for a while now and every time we keep seeing as we roll out new features and new capabilities, we see strong demand for even deeper and newer ones. Like a good example.
the company to an exact size, but I think it's a journey and that will take a few years to really go and to larger and larger companies all the time. And we are pushing towards that direction.
Maybe Arjun, just to add to Roy, this is Eliran. We have, you know, at the end of last year, we had the 196,000 customers. And when you think about adding more capabilities and more functionalities and more products, basically it allows us to have better retention and increased monetization.
of not only new customers but existing customers base. And as part of this journey, customers that may be joined as SMBs or mid-market can become enterprise accounts in the following years. So we have both new customers, the land, as well as extension within existing customers base. This is our potential for growth.
All right, perfect. That's very helpful. And then I want to touch on the new products again, because it seems you are getting a lot of good adoption on Dev and CRM both from new customers and cross-sell into the base. If I look at the 1600 customers that you've kind of cross-sold from work management, there's quite a few that have just adopted CRM or Dev, Net new.
point for customers and then cross selling the other way into the work management platform. Is that an opportunity that's still out there or have you seen those 8,000 plus customers adopt your work management platform already?
Thanks, Arjun. This is Aran. So I think you made a great point. Obviously, those products are obviously more new than the work management products. So we are more focused on seeing how existing customers can move from work management to CRM or dev.
One thing that we really focused on from the very beginning was to make those products also a substantial go-to-market for us as a company. That was our initial focus. So definitely going forward, we'll see accounts moving from CRM to work management. And going back to our strategy, I think it really helps us as a company in two ways. And documentaries of the share out.
really expands our go-to-market. So instead of having just one, which is work management, now we have multiples of both CRM and dev and work management. But also it allows us to have a greater ACV for customers. So you can buy customer, but the potential revenue, potential expansion is not limited only to that specific vertical.
but to have multiple products on top of that. So I think that creates a big opportunity for us in terms of go to market and going forward, we'll see the other way around, people moving from CRM to work management as well. Got it. Thank you very much and great job on execution guys.
Next question comes from Derek Wood with TD Cowen. Carolina's Open.
Great, thanks for taking my questions. You guys mentioned that you launched the AI assistant this quarter. Can you just talk about what the initial interest has been and then just remind us how you're thinking about the approach to monetizing AI down the road?
Hi, it's Roy. We have taken a several layer approach to AI. We started with like adding a layer to the platform, to the entire platform that you can add any AI capabilities you want to any section of the product.
And we released a few examples for it, like Formula Builder and like auto-complete stuff and those kind of things. The reaction we got from the marketplace actually from developers was amazing because we had like 1600 people sign up for a hackathon.
A lot of apps are being built right now and we were hoping to launch now going forward. I think it's very early days and we see a lot of customer interest in those areas and we feel it's a journey ahead that we'll take and work.
The place for us to give more power to people and to control how they manage their business Got it. Thanks. That's helpful. I guess just staying on a product discussion Now that you're you're through 1.0 of Monday DB What's the next?
phase, so I guess the 2.0, can you just give us some color as to what things we should be expecting out of 2.0 and what that timeline is? The speed of the beat was great. You actually raised the guidance more than the beat. I'm just curious if you could maybe characterize the strength that you're seeing, where you're seeing it to.
to raise the guidance more than you actually saw flow through and I had a quick follow-up. Hey Brent, it's Alirene. Yeah, so you know based on just a wealth reminder we beat the revenue by 7 million and you know with the help of also the FX you know dollar versus the Israeli shekel but very
we have the momentum that we are seeing together with the disciplined and efficient spend that we have as part of our Monday playbook, provide us with comfort to increase the guidance for the end of the year and to achieve these numbers.
And when you think about for CRM, the type of price uplift that you're seeing in some of these deals, is there an average or when you think about the monetization, ultimately, what do you think this looks like in terms of the additive nature to what you're seeing already in the core platform? Yes, there is a difference.
Yeah, Brent, so this is Aaron. So I think it goes two ways. One, as I've mentioned, we see new users using those additional products. So that's additional seats that we didn't have before. In addition to that, the CRM product has higher pricing per seat, and we're going to experiment with that. So below the market average, so there's more room.
for a company, those two factors as a major upside to increase the average ACV of our customers.
Next question comes from George Ewanek with OpenHiber. Your line is open.
Thank you for taking my question. Maybe digging into the competitive environment, are you seeing any differences in use case expansion, head to head competition, any signs of tool consolidation within either across departments or across divisions? Yeah, hi, this is Arun. So, um,
I think it's pretty much aligned with what we mentioned before. As a reminder, 70% of ideas will see 70% no competition at all filled with greenfield. I do want to mention that in terms of the vertical products, we are seeing new competitors in the CRM markets. We think 9% means most files of judges from all generations, because they are Pop HTTP.
new competitors such as Zoho CRM and HotSpot and a little bit of Salesforce. And in the Dev tool we are seeing new competitors. I think that's another part of the fact that we address new audiences and seeing those vertical tools appearing in deals but still not one significant competitor or
Anything that has any impact on the business, still pretty much aligned with before. Great, and maybe in CRM, when a customer is already using Salesforce, are you seeing your deployment in parallel with Salesforce, or do you see some of the opportunity, actually, with smaller customers to take over the...
the overall account. Hey, it's Roy. So, we definitely see ourselves alongside Salesforce and we have a lot of those deals. Even it's our number one integration to Monday Salesforce and we do a lot of those together. So, and definitely this is the strategy going forward when we go to larger.
at all. So what we do see is like on the small mid-market there we see that we can we compete with other CRMs that have graduated from the very simple ones and the rigid ones and when they're looking upward they see us
as one of the only solutions that they can really customize to what they need. And that's a big part in CRM, to be able to make it your own.
Great, thank you. Next question comes from DJ Hines with Canaccord Genesee. Your line is open.
Hey, good morning guys. Just one for me. Roy and Aran, how do you think about the opportunity to revisit product packaging to kind of incentivize multi-product lands as the scope of the platform continues to expand? Hi, DJ. This is Aran. I think you touched on a great point. Well, let's wrap this up.
It's actually things we're discussing right now in terms of our strategy going forward. One of the options that we now have as we expand our product offering and also taking into account previously launched products such as WorkForums and WorkCanvas is the ability to package multiple products into a product suite.
and then offer that not just as a package of individual products, but actually as a business solution that we can sell to senior management within companies. I think that will also help drive more enterprise deals and talking more with decision-makers and allow us to do top-down sales. Definitely.
our strategy going forward and we're definitely looking into that. Yeah, okay. I appreciate the color. Thank you, guys. Next question comes from Andrew Degas-Perry with Berenberg. Your line is open.
Thanks for taking my question. Maybe first on Monday, Dev, just noticed you have just under 800 customers. Wondering if the ramp up for this product could be similar to CRM in terms of where it was at this stage, or should we expect a different path and then have a follow-up? PlayStation 5ECT
Yeah, hi Andrew, this is Aran. So, it's still early days, I would say, with the dev product, but we're very happy with the traction and what we've seen so far with the numbers. It's hard to tell if it will play faster than the CRM or a bit slower than the CRM.
Overall, if we convert to benchmarks or even our own growth rate when we started monday.com, we're very happy with the results. Momentum is very strong. Also, the feedback we get from customers is very positive. We're very happy with the growth and we'll see how it plays out. I think this specific product has a lot of potential to further expand within our organization.
Roy mentioned that as part of the previous answer, but our customers are not using that product just for the dev team. We see product teams joining, we see designers, we see analysts. So basically, we got people using their own ecosystem around building products using this Monday dev product. So we've got potential it's got a brand which is so freezes fast. So they they auditorconnectathe Le t
I think this has a lot of potential in terms of growth within the accounts that are used. Thank you. And then maybe, Elron, on the Opera performance marketing side, maybe can you elaborate a little bit in terms of what did you see in the market this quarter? Was it unique in terms of what happened and what happened in the last quarter?
do we expect this to change in the back half? Sure, Andrew. So, you know, the digital marketing environment has been largely stable. We didn't see anything materially change that we should call out, pretty much what we saw before. Obviously, some of the competitors have to come back into the performance marketing stand in order to...
material that we're seeing.
blessings. Thank you.
Next question comes from Scott Berg with Needham & Company. Your line is open. Hi, this is Rob Morelli. I'm for Scott Berg. I'm interested in answering the question. I got disconnected a little bit, so apologies if some of these questions were already asked. But with the release of Monday DB and future releases coming, are you anticipating that these will allow you to target and offer different use cases?
And then, you know, hearing a lot of discussions surrounding consolidation trends within the CWN space, have you noticed any shifts in your top of funnel or with existing customer discussions? Thanks. Yeah, hi, this is Aaron. So the first part of your question, I think we referred to it as part of the other questions, but basically, as we mentioned, we read from the DB 1.0, and I think you've Sea When to
using this new infrastructure. And we plan to release additional minor versions and major versions in the next few months. And can you just repeat the second part of your question? Sorry.
Just from a consolidation, you know, trend, in regards to consolidation trends, have you guys noticed anything, you know, shifting within your top of funnel or just with existing customer discussions?
Yeah, so we haven't noticed any change in customer behavior. We did see some customers component on Monday taking a few products into the Mandel platform, but nothing that, you know, super substantial. We also don't see any customers
stopped using Monday because of any consolidation. As anyone mentioned, churn has been very stable. Downgrades are very stable. So overall, we don't see any movement like this.
Great. Thanks for taking my question. Jaron, I think you mentioned in your prepared remarks of doing faster cross-sell. I didn't quite hear it in your response to some of the other questions on this topic. Are you expanding here with the help of sales reps or marketing efforts? And then, if not, when might it make sense to make a more forward approach here? Yeah. Hi, Jason. It's Jaron. So, we see both customers expanding what we call no touch, meaning discover those new products by themselves and then buying into those new products and inviting new team members.
And we also had our sales team starting to approach existing customers and offering them the same product. So we see both. Definitely with our sales team, we are managing to land large deals with more potential to expansion. But going forward, we'll keep optimizing that funnel and expand our ability to cross-sell into other accounts.
Great. Thanks. And then, Eliran, just a quick clarification question. I know we've touched on your comments on July and seeing some signs of stabilization, but curious on maybe some of the subtle details if you're able to help us out. Is this a reflection of slowing down cells or slowing seed optimizations or slower down tiering? Just curious on some of those
Hi Jason, so with regards to the recovery, I believe that during the last year and a half with macroeconomy that was challenging, there was a decline that now we see the effect if you think about the way we look at our net dollar retention, it's trading 12 months and then weighted average. And now we're starting to see...
kind of a pickup from you know if you compare it to a year ago so pretty much there is some positive signs of getting back into the deals and and we're starting to see the group cohorts that actually joined
At the end of last year, now we are seeing the positive impact. And this is what drives civilization in the NDR that we are seeing. Still not calling a trend, but positive sign. Great, thank you very much. Next question comes from Robert Simons with DA Davidson. Your line is open.
Hey, thanks for taking the question. I was wondering in Marketplace, are there any interesting or surprising trends that you are seeing in there, maybe areas with more customer interest than you had expected that you might be able to pull into the core platform or into the product suite?
future product plans? Yeah, so we see a good traction with our marketplace, and we see some apps being more popular than others. I think the most popular apps we're seeing right now are additional capabilities on top of the Monday Dog platform.
to kind of finalize our use cases. Definitely, you know, it opens up opportunities in terms of additional features that we can add to the platform or maybe even, you know, thoughts, you know, going forward about potential acquisitions or expanding our capabilities as a platform, but nothing significant that I can point on right now in terms of specific product features or capabilities.
Got it. Thank you very much. Again, if you would like to ask a question, press the star, then the number 1 on your telephone keypad.
There are no further questions at this time. Ladies and gentlemen, this concludes today's conference call.