Kash Rangan: Congratulations on the quarter. I’m curious to get your perspective on monday DB. I know that it’s going to be rolled out in 2024. Was the initiative based on any specific customer feedback? Or is it something that you’re doing more proactively? What are the kinds of customers that you hope to land with monday DB? Are there enhancements you’re putting into that you could not otherwise previously get? Also with this partnership initiative where you’re opening up the platform for partners to develop kinds of applications, new kinds of applications, what is your goal here? Is it the long tail of apps that you don’t have the resources development that you hope the partners can get you into new markets? Or is it new geographies? Or is it just over platform even more to existing customers, so they can exploit the new capabilities more? Curious to get your take on what you want to accomplish with the opening up of the platform initiative.
Roy Mann: Monday DB is something that is in the core of our infrastructure. We’ve always highlighted how being schemaless and how we’ve built the platform on top of solid backbone that enable our customers to build whatever they want, Monday DB is the next phase of that. We want to make it more scalable. And like a lot of customers tell us we’re doing, like they can do flip flops with monday, they can do whatever they want, it’s magic. And I think where monday DB comes in, it takes that magic in a scalable way and allows to build like way bigger applications on top of us. And that opens up the door for larger installment €“ like different use cases that requires millions of €“ it opens the door for larger customers, in many ways.
But again, it’s like an infrastructure to move us to the next level. Regarding the marketplace, what we think is that, first of all, when we started it, we just wanted to open it up to everyone and see what they do. And they surprise us all the time with what they do. And I think you made two of the great points. Like, one is obviously the longtail solving a lot of problems we would not get to for our customers. And another thing is go-to-market, like new market, those solutions and bring us more audience. And I think a third thing, which is very important, is the fact that our customers choose us when we win the deals because they see that they can build the future on monday. Even if they don’t know exactly what they need to build, they know whatever they want to they’ll never hit a wall because the platform is open.
And they can always take a partner to build whatever they want. They can connect bespoke software and a lot of those stuff. So in that respect, it’s also super important for us.
Kash Rangan: Congratulations again.
Operator: The next question is from Jackson Ader from SVB MoffettNathanson.
Jackson Ader: The first one is on the commentary on the net dollar retention rate and specifically in the high end, that kind of $50,000 and above. What is kind of driving weakness there? Is it just people not expanding upon their annual renewals as much as you thought? Is there any downshift in terms of the number of seats at some of your customers? Just interested in those dynamics.
Eliran Glazer: As a reminder, with the enterprise accounts, we’re coming off historical highs. What we see is basically €“ I think this is something that we started seeing also last year, larger customers become more cautious with the budgets. It’s mostly seeing a slowdown in expansion of seats. So on one hand, we see a very healthy traffic of new customers, new logos that’s actually buying monday software. But on the other end, you see the amount of expansion within existing customer base, mainly the big ones is less than what you used to see in the past. We believe it’s current market uncertainty that has been driving most of this behavior. But on the other end, the positive is that, overall, NDR remains steady at 120%. The growth journey has held up well. And we’re still seeing, as I said, solid new customers demand. We would say that, by the end of this year, we expect additional probably decline due mostly to the macroeconomy headwind.
Jackson Ader: Actually, if we just dig a little bit on that theme, but maybe geographically speaking, Europe has held up maybe better than what we expected, just dropping in the revenue mix by only a percent year-over-year. I’m just curious, in that geography, what you guys are seeing and maybe whether it’s kind of out or underperformed your expectations in 2022 and what we should be thinking about for 2023.
Eliran Glazer: Maybe just to take a step back, as a reminder, 70% of our customers are non-tech and 30% is tech. So when you think about the softness in demand that we saw last year, it mostly was around tech. So if you only think about Europe, we said that we see less of an impact of potentially other thing because of the level of exposure that we have. So I think that we don’t see significant changes to what we saw in the past. It’s relatively stable. And actually, getting into the new year, we see even some positive signs yet to be seen for the remainder of the year.
Operator: Next question is from George Iwanyc from Oppenheimer.
George Iwanyc: Congratulations on the results. Roy or Eran, maybe if you can give us some more color on the competitive space. You continue to add a solid number of new customers? Are these lands mostly new? Are you seeing displacement from other work management solutions or mostly productivity tools?
Operator: It appears we have lost connection with the speaker team. Please stand by while we reconnect them. Thank you for your patience. We are now reconnected with the speaker team.
George Iwanyc: Roy or Eran, I basically was asking about the competitive environment. The pipeline generation you see, is that mostly still greenfield? Are you displacing other productivity deep tools or work management tools at this point?
Roy Mann: When we’re looking into new customers that joined the platform, we still see that greenfield, also the majority of the deals we do are not against any other competitor. And within the ones that we do compete with someone, and we win mostly because of our Work OS, because they want the platform, they want the fact that they can do a lot of things with it towards the future.
George Iwanyc: Eliran, maybe digging into the hiring that you expect to do this year, how front loaded is that? And what things will you be monitoring to kind of judge the pace of future hiring in upcoming quarters?
Eliran Glazer: George, just to relate to that, we are mostly focused on building out the platform and product offering. So the focus will be mostly on R&D and product. Different to prior year, we are going to have probably around 10%, give or take, based on our needs. It’s not going to be necessarily frontloaded. Maybe there is going to be slightly skewed towards H1. But overall, we are expecting a more of a balanced hiring process throughout the year. And obviously, if we need to hire more, then we make decision as we progress.
Operator: The next question comes from DJ Hynes from Canaccord.
David Hynes: Maybe just building off that last line of thinking, Eliran, in the shareholder letter and your prepared remarks, it says one of the focus areas this year was to expand the upmarket growth engine. You had a great slide in the deck that shows your efficiency metrics are hanging in there really well. Clearly, there’s uncertainty out there. So just help us understand kind of how you’re thinking about executing on the go-to-market side of things, hiring there, kind of what are the key initiatives we should be watching for this year?
Eran Zinman: In terms of our go-to-market, we have a bunch of plans. So, definitely, the new products are a great way to expand our go-to-market. The fact that we can now market, specifically the CRM product, that product, the marketing product just opens up monday to new audiences and new type of buyer. And just as a reminder, once a customer starts using one of those products, they can expand to additional products and eventually get the whole company into the monday Work OS platform. So, definitely, this is a big game changer for us in terms of our ability to go to market, different kinds of buyers, different personas within the organizations. Also, this year, we’re going to double down on our outbound motion. So expand our channels, marketing channels, just the more B2B enterprise focused marketing.
So, all those efforts together will allow us to continue to execute. In addition to the great momentum we’ve already seen with performance marketing that we mentioned, given that most of the other players in the market have pulled back, we’re able to achieve now a greater market share and greater efficiency. So combined all these things together, we see great momentum in terms of acquiring new customers.
Roy Mann: Just to add to what Eran said, let’s say we increased the headcount in more than 50% and we believe we are now well positioned to grow to 2023 and beyond in terms of sales and marketing headcount with regards to going upmarket as well.
Operator: Next question is from Derrick Wood from Cowen and Company.
