What Happened:

Shares of project management software maker Monday.com (NASDAQ:MNDY) jumped 23.8% in the afternoon session after the company reported a 'beat and raise' quarter. Monday.com materially improved its net revenue retention this quarter. Its revenue also outperformed Wall Street's estimates. Looking ahead, the company raised its full year guidance across the board, all of which is above expectations. The full year operating profit raise was particularly large, showing that the business is more profitable than expected. Overall, this quarter's results were great and shareholders should feel optimistic.

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What is the market telling us:

Monday.com's shares are very volatile and over the last year have had 18 moves greater than 5%. But moves this big are very rare even for Monday.com and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 3 months ago, when the stock  dropped 14.5% on the news that the company reported fourth-quarter results with revenue guidance for the next year that suggests a slowdown in growth (FY'2024 rev growth of 27.5% at the midpoint vs. 41% in 2023). In addition, operating income guidance for the same period was below expectations. 

There were also macro challenges to contend with, and management sent a mixed message. "While economic and geopolitical challenges remain, we are highly confident in our ability to carry this momentum into FY24 and beyond, as we continue to focus on driving top-line growth and building market share." 

On the other hand, revenue and EPS exceeded expectations during the quarter. Revenue guidance for the next quarter also came in roughly in line with expectations. Overall, it was a mixed but weaker quarter, with guidance and macro negativity driving the stock performance.

Monday.com is up 23.2% since the beginning of the year, and at $219.21 per share it is trading close to its 52-week high of $235.92 from February 2024. Investors who bought $1,000 worth of Monday.com's shares at the IPO in June 2021 would now be looking at an investment worth $1,225.

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