Operator: We’ll go next to George Iwanyc at Oppenheimer.
George Iwanyc: Thank you for taking my questions. So with the continued strong adoption of dev and sales CRM, are you seeing any changes to the way you’re landing both with new customers and then on the competitive landscape?
Eran Zinman: Yes. Hi, George. It’s Eran. So, look, obviously, when we land with CRM and dev, we see different competitors as opposed to work management. I would say that still 50% of the deals so far that we signed CRM and dev. We didn’t compete with anybody. I would say the rest of the 50% people will consider monday compared to other players. And in terms of work management, it’s pretty much remained the same. I would say, it’s 70% greenfield and then the rest, we see some competition. So there’s a little bit more competition in CRM and dev, but still, we see other – but as I mentioned, we see other players that we compete against in those strategic products.
George Iwanyc: Just following up on that. Can you give us maybe some color on the work you’re doing on the services side? And do you have any feedback on how the timing of that launch can go forward this year?
Eran Zinman: Yes. So we continue to build monday service and plan to launch it on schedule H2 this year. So far, we have a bunch of customers in beta. Feedback so far is really good. And as I’ve mentioned like we had our users – a lot of our users already using monday to manage some aspects of ITSM and service within the company. So we talk with them. We learn from them and just going to set the set of features that we’re going to launch as part of the first version.
George Iwanyc: Thank you.
Operator: We’ll go next to Taylor McGinnis at UBS.
Taylor McGinnis: Yes. Hi. Thanks so much for taking my question. On NDR, can you comment on the performance of the quarterly number? And what you saw towards the stabilization with the 3Q number such that we can begin to see NDR trough? Are you still seeing pockets of incremental weakness in the macro? And if so, you know, what does that look like? Thanks.
Eliran Glazer: So, hi, it’s Eliran. By and large, we’re still seeing it stabilizing pretty flat of what we have seen, you know, in prior monthly training 12 months. Obviously, with the impact of price increase and potentially all the additional products and add-ons that we are adding to our customers and incremental value, we expect it, as I said, to get better in H2 of this year.
Taylor McGinnis: Great. Thank you.
Operator: Our next question comes from Jason Celino at KeyBanc Capital Markets.
Jason Celino: Great. Thanks for fitting me in, and all the color so far. You know, one question on linearity. You know, curious what you saw in terms of top-of-funnel demand and conversion, you know, exiting the quarter. And then, anything in the first few weeks if you’re willing to provide? Thanks.
Eran Zinman: Yes. Hi. It’s Roy. So, we see very healthy top-of-funnel activity, like, we increased marketing, we saw more leads, more pipeline generated. So it’s all in line with what we expected.
Jason Celino: Okay. Excellent. And then, you know, maybe just my quick follow-up, the environment for performance-based marketing, the pricing, I think, it’s kind of stabilized over the last several quarters. But when we think about the upcoming year, you know, are you baking any change here from what you saw in 2023? Thanks.
Eran Zinman: Yes, Jason, this is Eran. So it’s pretty much in line with what we saw last year’s overall prices compared to the past are still lower, but stabilization doesn’t improve more than that. As we said, we saw very healthy, so far, pipeline generation and new customer sign-ups coming into 2024. So overall pipeline is healthy, cost of that pipeline is also healthy in line with what we saw last year. So, efficiency, more or less remains the same.
Jason Celino: Thank you.
Operator: We’ll go next to Ivan Feinseth at Tigress Financial Partners.
Ivan Feinseth: Hi, good morning. Thank you for taking my question. What do you see the functionality is being like the biggest driver of new customer adoption or customer increase use?
Eran Zinman: Yes, Ivan. This is Eran. So I wouldn’t say it’s much of, you know, a specific product functionality. I think it’s a combination of our efficient performance marketing engine and also our products becoming more and more dominant. So our products would allow us to acquire customers from different parts within companies. So the VP of Sales, the VP of R&D Work Management, obviously, so that in addition to our existing performance marketing engine just allow us to have a very healthy customer acquisition engine.
Ivan Feinseth: And what do you see though is the biggest use case is that new customers are signing up for or using it for?
Eran Zinman: Hi, it’s Roy. So our biggest segment by far is the Work management, which is very varied. We have very different use cases within Work Management, whereas in CRM and dev, it’s more focused on being more specific, more targeted, obviously. So with that, our ability to target Work Management at the moment is very broad.
Ivan Feinseth: And one last question. Where do you see the opportunity to roll out increasing AI functionality within a lot of these products?
Roy Mann: Hi, it’s Roy again. So AI is a core part of the way we see the platform evolve, like, we’ve introduced like at Investor Day, a few areas we’re launching AI in. And currently, we launched some of the few – one building block in the automation segment and we see great enthusiasm around it because we really allow our customers to build and kind of use AI on their own, how they want it in their workflows. And we are also thinking about and we’re doing – adding AI into the core of service when we launched it and other products. So we’re putting a lot of emphasis there as we think this is – will allow us to grow a lot and again like democratize AI and give it to our customers.
Ivan Feinseth: Then one last question to kind of support the price increase, where do you see the development of added value that will help your easier – you know, your clients easier pay the price increase?
Roy Mann: Hey, so, Roy, again. So like Eran mentioned, we’ve never done this before. So I think the feedback we got until now from customers is that they get it like we’ve added so much value in the past few years to the platform without increasing the price. And so, I think, it’s – we see acceptance of that change now. So I think it’s behind us as well as, always bringing more value to the platform. So we see wide acceptance of the new price.
Operator: We’ll go next to Scott Berg at Needham and Company.
Scott Berg: Hi, everyone. Two questions for me. Thank you. First of all, with more proof points on the AI side with mondayAI, I guess, how much more confident are you in the company’s ability to actually monetize some of the functionality in there just now that you’ve had, you know, more of a chance to get some feedback from customers?
Roy Mann: Hi. So this is a great question. I think we are – it’s still ahead of us like making. Pricing specific to AI or lower. Thinking and working on it. I do think it will allow us to penetrate faster and get more market segments for the products that we. Include AI with. So I see a lot of upside there. But we’re still working on. On monetizing the AI and like automation, as an example, we just launched it, so. I think it’s too much early days to. To say how impactful. The pricing of that will be.
Scott Berg: Got it, helpful. And then my follow-up question is on your million dollar customer cohorts that. Or, excuse me, 100,000 customer cohorts that you’re announcing. I know at the conference. The Analyst Day, you announced that your largest customer at 25,000 seeds. Historically, there has been a big focus on seat expansions and moving into some of these larger accounts. But as we think about that cohort going-forward how much of the growth, there will be driven by customers expanding seats are adding additional functionality that they’re going to be paying a top of the core user charges.
Eran Zinman: Yes, it’s Eran, so. I would say the vast majority of growth is probably going to be by seat expansion, but also we be able to sell them more functionality, the new products. Add-ons. We are preparing going to launch, so like extension modules. But overall. Those enterprise accounts tend to increase more in terms of seats and usage over-time as opposed to smaller businesses that it’s harder for them to. Extend amount of seats. So overall like this scores. We expect it to have better NDR, more seat extension overtime.
Scott Berg: Great, thanks for taking my questions.
Operator: And that concludes the question-and-answer session and today’s conference call. Thank you for your participation. You may now disconnect.
