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### Q4 2023 Earnings Call, Feb 12, 2024
Revenue and Growth
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- monday.com reported a 41% revenue growth in fiscal year 2023, reaching $729.7 million.
- The company projects revenue growth of 28-30% year-over-year for Q1 of fiscal year 2024.
- For the full year 2024, revenue is projected to be between $926 million and $932 million, representing a 27% to 28% year-over-year growth.
Product Updates and Features
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- monday.com launched new capabilities and features, including MondayAI, Monday Workflows, and MondayDB, which improved Board performance by 5x.
- The company introduced Monday Code, a secure serverless environment for developers to host and run apps within the worklist platform.
Pricing and Revenue Impact
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- monday.com updated its pricing model to reflect the enhanced value of its products and services, expecting an additional $15-20 million in revenue for fiscal year 2024.
- The price increase had a minimal impact on customer acquisition, with a shift towards more centralized buying decisions for Monday's platform.
- The company assumes a 15% to 75% impact on the previously announced $10 million revenue from the price increase due to the earlier implementation.
Customer Feedback and Adoption
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- Customers provided positive feedback on the newer products and initiatives showcased during the Elevate World Tour.
- Customers provided positive feedback on the platform's scale, performance, and security features, which allowed them to increase usage.
- The company observed an acceleration in the net new ads for Monday Dev in Q4 due to product improvements, enhanced go-to-market strategies, and the exposure of the multiproduct suite to more customers.
Financial Outlook
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- The company ended Q4 2023 with $1.12 billion in cash and cash equivalents and generated $55.4 million in free cash flow.
- For Q1 of fiscal year 2024, monday.com projects free cash flow of $56 million to $60 million and a free cash flow margin of 27% to 29%.
- Full-year free cash flow is anticipated to be $200 million to $206 million, resulting in a free cash flow margin of approximately 22%.
Guidance and Strategy
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- The company's guidance philosophy remains focused on providing prudent, achievable, and responsible guidance based on the latest available data.
- The company plans to increase investment in research and development to build out its product suite and scale its work operating system platform.
- Specialized sales teams for CRM and Monday Dev will be developed as the revenue for these products grows.
Market Dynamics and Competition
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- Customers are viewing Monday as an orchestration engine that facilitates cross-company workflows and integrates with various tools.
- The company is seeing strong adoption of Dev and sales CRM, with some competition in CRM and Dev but mostly greenfield in work management.
Artificial Intelligence (AI)
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- The company is rolling out increasing AI functionality in its products, with a focus on automation and building AI into the core of its service and other products.
- AI features are expected to accelerate market penetration and expand the market segment for products that include AI.
### BILL Holdings, Inc., Q2 2024 Earnings Call Summary
Financial Results
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- BILL Holdings reported strong profitable growth in Q2 2024 with 22% year-over-year revenue growth, 48% year-over-year non-GAAP net income growth, and a 23% non-GAAP net income margin.
- Total revenue was $318 million, up 22% year-over-year, and non-GAAP net income was $73 million, up 48% year-over-year.
- Subscription revenue grew 3% year-over-year to $63 million, while transaction revenue grew 25% year-over-year to $212 million.
- Total payment volume grew 11% year-over-year to $75 billion, with BILL's stand-alone TPV growth improving to 10% year-over-year in Q2 compared to 7% in Q1.
- Float revenue increased 50% year-over-year to $44 million, with a yield on FBO funds of 490 basis points in the quarter.
- Non-GAAP gross margin was 86%, above the target range due to favorable float revenue, but is expected to moderate to the low to mid-80s as the payment mix evolves and float revenue declines with lower interest rates.
- Non-GAAP operating expenses were flat sequentially at $229 million, with rewards expenses representing 49% of spend and expense card revenue.
- Non-GAAP operating income was $44 million or 14% of revenue, and non-GAAP net income was $73 million or 23% of revenue, up 48% year-over-year.
- Free cash flow grew 56% to $74 million for a free cash flow margin of 23%.
Strategic Priorities
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- Driving adoption of its integrated financial operations platform.
- Expanding its ecosystem by bringing more innovation to partners and attracting new partners.
- Enriching its payment experiences and driving penetration of its ad valorem solutions.
Challenges and Opportunities
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- Managing payment acceptance costs and taking actions to improve product experiences and increase payment timing and speed.
- Exploring API access and embedded finance opportunities to expand its distribution strategy and reach more SMBs.
- Adapting its marketing spend and customer acquisition strategies to align with its new focus on delivering strong growth in customers and revenue per customer.
- Considering extending the duration of their investment portfolio by exploring opportunities to lock in higher interest rates for a longer period as the macro environment changes.
- The partnership with Bank of America to serve their existing customers is being impacted by the bank's recent decision to broaden its firm-wide payment strategy.
- Discussions are ongoing with Bank of America to determine how to support their existing installed base of customers through the bank's new payment strategy.
This is why non-GAAP numbers are reported. $BILL is not and has never been profitable. And they only have op cash flow bc of amortization and SBC.
Holding Positions with < 1% Allocation & 10x in 10 years
I have been adding new names to my portfolio far too often in the name of diversification or let's say I didn't have conviction so was picking left right centre. I soon realised that if I have to improve my returns I have to deploy a good amount of cash into existing positions rather than buying more into new positions. I even made the mistake of buying all 30 stocks (experimental portfolio) for the same $ amount of allocation some of the stocks are at 50%-100% gains but some are at 40%-70% loss. I realised as I only allocated the same amount to all stocks my returns are way below benchmark - So the learning was - allocate higher capital to winners/high conviction positions - Yes, I know it's very simple and very basic but I am sure a lot of us have such < 1% positions added over a period of time but never cleaned up? Here are some maths for those who love numbers:
Your stock went 10x in 10 years: 26% CAGR - Excellent Returns
You only allocated 1% of your capital to this idea, $100 from the capital of $10000. In the end even if it's 10x, the idea contributed $1000 of gain to the overall portfolio which is 0.96% CAGR and just 10% return in total for 10 years. I am sure it's not an eye-opener for many of you but for beginners like me, it's important learning.
Lessons Learnt:
- Allocate more capital to ideas where allocation is < 1% or cut them out
- Look at the returns from portfolio level and not each stock level ,caveat - depends on allocation as well.
PS: I just passed my high school maths by 1 mark so ignore if I have made any calculation errors :) @pessen Thanks for your monthly subscription post which inspired me to write this.
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