0001178913-26-000870
SEC filingMonday.com's 27% revenue growth to $1.23B, net income of $118.7M, and $322.7M adjusted free cash flow underscore strong enterprise expansion and AI adoption.
Monday.com delivered robust financial performance in fiscal 2025. Revenue increased 27% year-over-year to $1,231.9 million, driven by a combination of strong retention (Net Dollar Retention Rate of 110%), expansion within existing accounts (enterprise customers with >$50k ARR grew 34% to 4,281), and new client acquisitions. Gross profit grew 27% to $1,098.9 million, maintaining a gross margin of 89% for the second consecutive year, indicating stable unit economics despite scaling.
Operating loss improved significantly from $21.0 million in 2024 to $1.7 million in 2025, narrowing the operating margin from -2.2% to -0.1%. This improvement was driven by operating leverage in sales and marketing (down from 55% to 51% of revenue) and general and administrative expenses (down from 15% to 12% of revenue). Research and development expenses increased to 26% of revenue from 22%, reflecting continued investment in AI and platform capabilities.
Net income soared to $118.7 million from $32.4 million, almost quadrupling. This was substantially aided by a $61.1 million non-cash tax benefit from reversing the valuation allowance on deferred tax assets, as the company achieved cumulative pretax income over three years. Excluding this benefit, net income would have been approximately $57.6 million. Basic EPS rose to $2.31 from $0.65.
Total assets grew 25% to $2.11 billion, primarily due to a $91.5 million increase in cash and cash equivalents (to $1.50 billion) and a $112 million increase in marketable securities (to $162.3 million). Accounts receivable increased modestly to $30.6 million. Deferred revenue (current) rose to $409.7 million from $340.0 million, signaling strong future revenue visibility. Operating lease liabilities increased to $168.8 million (undiscounted) due to new office leases in Israel and New York.
Shareholders' equity increased to $1.25 billion from $1.03 billion, driven by net income and share-based compensation, partially offset by $135 million in share repurchases. The company repurchased 883,913 shares during Q4 2025 under a new $870 million authorization.
Operating cash flow was $333.6 million, up 7% from $311.1 million, and well above net income of $118.7 million. The primary adjustments were share-based compensation of $177.0 million and a $69.0 million increase in deferred revenue. Capital expenditures totaled $23.7 million (PP&E of $20.4 million and capitalized software of $3.4 million). Adjusted free cash flow reached $322.7 million, representing 26.2% of revenue, up from $295.8 million in 2024. This demonstrates strong cash generation despite significant investment.
Financing activities used $108.4 million, primarily due to $135 million in share repurchases and $15.2 million in tax advances, offset by $41.9 million from option exercises and ESPP.
Management attributed revenue growth to strong retention, multi-product adoption, and AI capabilities. Research and development spending increased 50% to $321 million as the company invested in platform enhancements and AI features. Sales and marketing expense grew 18% to $631 million, with increased spending on direct sales and brand marketing offset by lower partner commissions due to capitalization.
Key business metrics: Net Dollar Retention Rate was 110% for all customers, 116% for customers with >$50k ARR, and 116% for >$100k ARR. Enterprise customers with >$500k ARR grew 74% to 87, and their ARR grew 87%.
The company expects gross margin to decline modestly in the mid-term as AI-related infrastructure costs increase, before stabilizing over the long term. No explicit quantitative guidance was provided for fiscal 2026.