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Strong Growth Continues at monday.com as Customer Base Expands

Q3 Highlights Include Impressive Financial Performance and Increasing Enterprise Engagement

The company has gained significant traction with its enterprise customers, exemplified by a remarkable increase in seat count from one of its largest clients—from 25,000 to 60,000. This change is part of that customer’s strategy to streamline their technology infrastructure, marking an impressive 24-fold increase in seat count since 2022. Now, I’ll hand things over to Eliran for a deeper dive into our financials and future guidance.

Eliran Glazer — Chief Financial Officer

Thank you, Eran, and thank you all for being with us today. Q3 proved to be another robust quarter for monday.com, characterized by solid revenue growth and profitability alongside enhanced customer retention. We are pleased to report that our fiscal year ’24 outlook exceeds our initial guidance set during our December Investor Day. Having surpassed $1 billion in ARR, we are now focused on harnessing this momentum to propel the company into its next growth phase.

Total revenue for Q3 ’24 reached $251 million, a 33% increase compared to the same quarter last year. Our Net Dollar Retention (NDR) rose to 111%, and we anticipate NDR to remain stable through year’s end. Please note, our NDR is calculated as a trailing four-quarter weighted average.

Regarding financial metrics, we reference non-GAAP figures unless stated otherwise, with reconciliation available in our earnings release. Our gross margin for Q3 was an impressive 90%. For the medium and long term, we expect our gross margin to stay in the high 80s range.

Research and development expenses for Q3 ’24 totaled $43 million, equating to 17% of revenue, up from 15% in Q3 ’23. Sales and marketing expenses reached $130.3 million, representing 52% of revenue—down from 54% a year prior. General and administrative expenses stood at $21.4 million, or 9% of revenue, compared to 8% in the previous year. Net income for this quarter was $45 million, a rise from $33 million in Q3 ’23.

The diluted net income per share for Q3 ’24 was $0.85, calculated on 52.6 million fully diluted shares outstanding. Our total employee count increased to 2,305, gaining 195 employees since Q2 ’24. We anticipate a headcount growth of mid-30% in fiscal year ’24, focusing on R&D, product development, and sales as we enhance our platform offerings.

As for our balance sheet and cash flow, we concluded the quarter with $1.34 billion in cash and cash equivalents, an increase from $1.29 billion at the end of Q2 ’24. Our free cash flow for Q3 ’24 was $82.4 million, yielding a free cash flow margin of 33%. It’s worth noting that this margin was affected by a one-time cash incentive of roughly $11 million related to our new London office rental agreement. Free cash flow is defined as net cash from operating activities minus cash used for property and equipment and capitalized software costs.

Looking ahead, for the fourth quarter of fiscal year 2024, we expect revenue between $260 million and $262 million, indicating year-over-year growth of 28% to 29%. We anticipate a non-GAAP operating income of $29 million to $31 million with an operating margin of 11% to 12%. Free cash flow for the quarter is projected at $63 million to $66 million with a free cash flow margin of 24% to 25%.

For the entire fiscal year 2024, we expect revenue between $964 million and $966 million, reflecting approximately 32% year-over-year growth. Our anticipated full-year non-GAAP operating income is $121 million to $123 million, resulting in an operating margin of 12% to 13%. We project a full-year free cash flow between $286 million and $289 million, translating to a margin of about 30%. Now, I’ll turn it back to the operator for questions.

Questions & Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator instructions] Our first question comes from Gili Naftalovich with Goldman Sachs. Your line is open.

Gili Naftalovich — Analyst

Hi team. It’s Gili, stepping in for Kash. Thanks for taking the question and congratulations on reaching the $1 billion run rate mark. I have two questions, if I may.

As we observe your larger cohort aiding a rise in NRR but also a slowdown in net new customer addition, could you elaborate on how monday.com’s engagement with customers is evolving? Are there any noticeable changes in the broader demand or competitive landscape?

Eran Zinman — Co-Chief Executive Officer

Hi, Gili. It’s Eran. Firstly, we’re pleased with our retention results. Our NRR is improving alongside historically high gross retention levels. We’re experiencing slightly fewer new customer additions, which aligns with our pricing strategy targeting not only SMBs but also larger enterprise clients. Overall, demand appears steady and comparable to previous quarters regarding customer retention and adding new clients.

Eliran Glazer — Chief Financial Officer

Hi, Gili. Eliran speaking. I’d like to add that our new service product has presented cross-selling opportunities, benefiting both our current and new customers, which continues to add momentum to our sales.

Gili Naftalovich — Analyst

That’s great to hear, thanks. Regarding your growth initiatives and increased hiring this quarter, how are you balancing expansion within existing customers compared to acquiring larger new clients, especially in light of the recent expansion with your second-largest customer?

Eran Zinman — Co-Chief Executive Officer

Thanks, Gili. The uptick in hiring sales staff directly correlates with demand within our existing customer base, positioning us for growth in 2025. We feel confident about our plans for that year, as we’re seeing increased revenue from existing clients upgrading and purchasing more products. Our strategy for bringing in new customers remains a strong focus, ensuring that both aspects of our plan are aligned and in response to stable market demand.

Operator

Our next question comes from Pinjalim Bora with J.P. Morgan. Your line is open.

Pinjalim Bora — Analyst

Thank you for taking my question. It appears that a significant portion of paying customers for the service comes from cross-selling, and I believe the product is still in beta. Do you see potentially greater cross-sell opportunities with service than with CRM, and could you realize those gains faster?

Roy Mann — Co-Chief Executive Officer

Hello, it’s Roy. We definitely recognize the significant cross-selling potential associated with the service product. While it remains in beta and is still in its early stages, we view it as a substantial growth opportunity for the future. However, it’s too soon to predict how it will compare to CRM in terms of revenue generation.

Pinjalim Bora — Analyst

Understood, thank you. I’d like to follow up on net retention as well, noting an uptick; however, it appears…

Strong Demand Creates Optimism for Upcoming Quarters at Monday.com

Large Customer Segment Driving Growth

Analysts are seeking insights on how much of the recent uptick in revenue is attributed to seat unlocks from Monday.com compared to cross-selling efforts. Eliran Glazer, Chief Financial Officer, shared his perspective on this metric’s future progression as the company moves into the next quarters.

Impressive Net Dollar Retention Rate

“Hi, Pinjalim,” began Eliran. “We are pleased to report our Net Dollar Retention (NDR) rate has increased to 111%, exceeding our expectations. We anticipate stability in Q4 and foresee continued improvement in fiscal year ’25 as we grow our presence in the larger markets.” He indicated that the recent price increase may contribute an additional 100 to 200 basis points to NDR—a positive sign across all customer segments, with retention rates reaching all-time highs.

Service Product Milestones in Focus

Next, Brent Bracelin from Piper Sandler asked about key milestones for the service product before its general availability (GA). Co-CEO Eran Zinman emphasized the substantial cross-selling potential and the need for maturity in the product to serve both small and large customers alike. “We plan to finalize several features before the launch, including a customer portal for ticket creation and enhanced AI functionalities,” Eran stated, highlighting positive customer feedback that adds to their enthusiasm for the full release.

Stable Demand Environment Ahead

Brent also probed into demand trends heading into year-end. Eliran replied, “The demand environment remains quite stable, broad-based across customers. We expect a slight improvement as we look forward, though some segments may experience volatility.” His response indicated confidence tempered with caution regarding the overall market landscape.

Preparing for Future Growth

Ryan MacWilliams from Barclays sought insight into growth expectations for 2025, particularly concerning the impact of the ongoing price increase. Eliran remarked, “We will provide our fiscal year ’25 guidance during the next earnings call, but we remain optimistic about our prospects with new services and cross-selling opportunities.”

M&A Opportunities on the Horizon

Ryan further inquired about Monday.com’s thoughts on mergers and acquisitions (M&A) for potential AI capabilities. Eran responded, “Our M&A team continuously monitors the market for opportunities. Given our cash reserves and strategic direction, we are eager to explore the right acquisition when it arises.”

Leadership Transition and Future Goals

As the conversation continued, Brent Thill raised questions about the transition following Yoni’s departure. Eran assured, “Yoni will remain in his role until year-end and will assist as an advisor until a new Chief Revenue Officer is appointed. We are confident in finding a strong candidate soon and have an organized transition plan in place.”

CRM Development and Future Prospects

Brent also requested an update on CRM traction and future milestones. Co-CEO Roy Mann confirmed their commitment to scaling the infrastructure to better accommodate larger businesses and integrating AI to streamline the sales process further. “CRM remains a key growth area, and we are excited about continued investments into this space,” he stated.

Conclusion

Overall, Monday.com appears well-positioned for future growth, with a stable demand environment and a strong focus on innovation and customer satisfaction.

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Insights on Sales Strategy and Executive Leadership Changes at monday.com

Understanding Sales Dynamics

Thank you for joining us. I’d like to first discuss the sales representative activities. Can you detail what this process looks like? Are they focused on targeting high-level decision-makers in new markets, or are they unifying various teams already using monday across a company? Additionally, how might this role adapt given the recent leadership shifts?

Eran Zinman — Co-Chief Executive Officer

Hi, Jackson. This is Eran. Let me clarify how our Chief Revenue Officer (CRO) organization operates. We have teams dedicated to various market segments: SMBs, mid-market, and enterprise customers.

Within these groups, Account Executives (AEs) focus on attracting and converting new customers, while Account Managers (AMs) play a critical role in expanding relationships with existing customers. They primarily work to either broaden the use cases of our platform or identify new buyers within those organizations to promote additional products. We’re aiming to enhance these efforts.

With the recent CRO transition, we see great opportunities for growth, particularly as we aim for larger market segments. This includes bringing in more experienced sales personnel and leadership who can help us expand into enterprises effectively.

In summary, our structure is designed for scalability, and we’re committing more resources to larger accounts.

Jackson Ader — Analyst

Thanks for that clarity.

Examining Impact on Performance Marketing

My follow-up question pertains to the go-to-market strategy, especially regarding lower-end customers. Has there been an effect from your pricing adjustments on your performance marketing investment? Do you anticipate a rise in performance marketing spending to attract customers in light of increasing lifetime customer value due to higher pricing?

Roy Mann — Co-Chief Executive Officer

Hi, this is Roy. Our performance marketing is always focused on measurable results, and we’ve conducted tests both before and after implementing new prices.

What we observe is a decrease in the number of customers but an increase in their quality. This aligns with our strategy to engage higher-value prospects. We are committed to elevating our sales team’s focus toward more lucrative opportunities.

Jackson Ader — Analyst

Thank you for that insight.

Large Customer Engagement and Future Opportunities

Next, I have a question from Alex Zukin at Wolfe Research. He wants to know about large customer expansions. Can you elaborate on what they are adopting? Was there any consolidation, and what does the pipeline look like for these deals approaching year-end? I also have a follow-up.

Eran Zinman — Co-Chief Executive Officer

Hi, Alex. The company has seen tremendous growth since 2023, with an impressive 24x increase. Recently, we grew from 25,000 seats to even more, bringing in various departments like consulting, finance, operations, and sales teams who now utilize the platform.

This broad usage indicates that it’s becoming a crucial tool within the organization and signifies further growth potential. Feedback has been excellent, and when combined with other major client wins from the past quarter, we anticipate continued growth not just in acquiring large accounts but in extending our usage with them over time.

Alex Zukin — Analyst

That’s encouraging. Following up, regarding the management changes, what does Adi bring that was previously lacking, and why was now the right time for this appointment? Considering the search for Yoni’s successor, how significant is experience in enterprise sales for this role?

Eran Zinman — Co-Chief Executive Officer

Hi, Alex. We’re thrilled about Adi’s addition. He brings significant experience in organizing and managing large teams, as well as in developing complex processes that will help us scale effectively. We are already seeing positive impacts from his involvement.

His technological expertise also spans various areas, and he has a comprehensive understanding of the SaaS business, which will undoubtedly aid in enhancing our sales organization. Overall, his contributions will be vital as we navigate this growth phase.

Roy Mann — Co-Chief Executive Officer

Adding to that, Adi is crucial during this transition, providing support across the company.

Eliran Glazer — Chief Financial Officer

There was a second part of your question, Eran, regarding the need for upmarket experience for the new CRO position.

Eran Zinman — Co-Chief Executive Officer

Indeed, having a new CRO who can guide us through this transitional period is essential. We are heavily investing in this shift, and Yoni’s efforts have already laid a strong foundation. By finding the right candidate, we aim to maintain our momentum and further drive our progress.

Alex Zukin — Analyst

Thank you.

Exploring New Opportunities with monday CRM

Next, we have a question from Arjun Bhatia at William Blair. He’s interested in the developments with monday CRM. You announced compelling new features at the Elevate event, especially around campaign management. What are your long-term goals for monday CRM? Could it evolve into a comprehensive sales and marketing suite, and how do you plan to approach building versus buying in this space?

Roy Mann — Co-Chief Executive Officer

Hi, this is Roy. Our CRM is fundamentally built on the monday Work OS platform, which allows for great versatility and the capability to handle complex tasks while connecting seamlessly across the organization. Customers appreciate this connectivity, and we believe it is key to enhancing their operations.

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Insights from Recent Earnings Call: Steady Growth Amid Market Challenges

Understanding Company Developments and Market Trends

The organization highlighted the benefits of collaboration across departments, emphasizing the importance of building a comprehensive CRM suite over time.

Arjun Bhatia — Analyst

Thank you, Roy. I want to discuss the recent quarter briefly. A 32% growth rate is impressive.

However, the sequential growth from Q2 to Q3 seems weaker than historical trends. Can you elaborate on the business trends this quarter? Were there timing elements involved in the company’s move upmarket that could affect our financial outlook moving forward?

Eliran Glazer — Chief Financial Officer

Absolutely, Arjun. This is Eliran. We’re pleased with our Q3 performance, reflecting our status as a “Rule of 60” company.

Following an exceptional Q2, which set a high bar for the next quarter, we expect to surpass our fiscal year ’24 goals. However, Q3 presented challenges, including a decrease in enterprise customer additions due to slower hiring in our sales team. We’ve also observed slower growth in monday dev as we adjust our focus towards developers. These factors contributed to a lighter month of September, but we are already seeing strong momentum in October.

Arjun Bhatia — Analyst

Thank you for clarifying that, Eliran.

Operator

The next question comes from Michael Berg of Wells Fargo Securities. Your line is open.

Michael Berg — Analyst

Hi, and thanks for taking my question. Congratulations on the quarter. I’d like to revisit the topic of pricing.

I’ve noticed a lack of updates regarding pricing impacts recently. Could you provide any insights into potential contributions for this quarter, or the year, either qualitatively or quantitatively? Thank you.

Eran Zinman — Co-Chief Executive Officer

Sure, Michael. Just to update you on pricing, we are on track to complete the new pricing rollout by July 2025.

Currently, we’ve successfully implemented it for about 50% of our customers, with an expected impact of $30 million for fiscal 2024. The total revenue impact from the price increase is projected to be around $80 million between fiscal 2024 and 2026. Customer reception has been positive so far, with no negative feedback, which supports our continued rollout plans.

Michael Berg — Analyst

That’s helpful information. Additionally, I wanted to ask about the service expected to achieve GA in Q4. I’ve heard there were some rumors of potential delays. Can you clarify any changes versus prior expectations regarding GA? Customer feedback appears to be quite favorable.

Eran Zinman — Co-Chief Executive Officer

Absolutely, Michael. There are no delays on our end. We plan to officially roll out the full version by the end of the year. The product is currently in beta and has received excellent feedback from customers. We anticipate announcing the general availability around January, allowing access for our entire customer base.

Michael Berg — Analyst

Thank you.

Roy Mann — Co-Chief Executive Officer

Eran.

Eran Zinman — Co-Chief Executive Officer

Yes. We’re just waiting for the operator for the next question.

Roy Mann — Co-Chief Executive Officer

Understood. We’re checking in.

Operator

Next question from Mike Funk with Bank of America. Your line is open.

Michael Funk — Analyst

Thanks for taking my question today. I have a quick inquiry regarding revenue growth trajectory. It seems we experienced a flattening or decline in customer net additions for CRM and dev this quarter.

You previously mentioned a $30 million impact from price increases for ’24, which is an increase from what was anticipated. With minimal contribution from service next year, how should we interpret these factors in terms of revenue growth? Are we possibly facing a situation where maintaining a growth rate above 30% is becoming more challenging?

Eliran Glazer — Chief Financial Officer

Hi, Mike. It’s Eliran again. As we’ve indicated before, the pricing strategy anticipates a high single-digit addition of new customers compared to last year.

However, our total customer count ended last year at 225,000, which means percentage growth will naturally be lower than previous years. Regarding service, we expect continued strong momentum into next year, similar to what we see with CRM. This should contribute positively, along with the anticipated price increase effects of about $80 million through 2026. Other factors affecting Q3 were weaker enterprise additions and softness in development.

Roy Mann — Co-Chief Executive Officer

I want to emphasize that we’re focused on existing customers. A significant part of our sales team’s efforts is directed towards increasing their adoption of our offerings. Our product roadmap aims at fostering growth among our current customer base.

Michael Funk — Analyst

Just to confirm, the $30 million pricing impact for fiscal ’24 is indeed an increase from the previously noted $25 million?

Roy Mann — Co-Chief Executive Officer

That’s correct, from $25 million to $30 million.

Michael Funk — Analyst

Thank you for clarifying.

Operator

Our next question is from Derrick Wood with TD Cowen. Your line is open.

Derrick Wood — Analyst

Thanks for the information. Your aggressive upward shift in the market over recent quarters raises a question: is this impacting your deal cycle time?

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Sales Cycles and Market Trends: Insights from a Recent Earnings Call

In a recent earnings call, executives discussed the evolving sales landscape and the impact on quarterly performance.

Understanding Seasonal Trends in Sales Performance

Derrick Wood — Analyst

As companies pursue larger multithousand-seat deals, are there changes in buyer behavior or sales cycles that could introduce seasonality to your business model? In particular, might we see less activity in Q3, with an increase in Q4?

Eliran Glazer — Chief Financial Officer

Yes, Derrick. As I mentioned before, we experienced a strong Q2. However, Q3 included July and August, which are typically vacation months in both Europe and the U.S. While I don’t want to suggest that we encountered significant seasonal fluctuations, some macroeconomic factors may indeed have led to a slower addition of enterprise customers during this period. We did see some softness with the monday dev segment, but October shows positive momentum.

So, I wouldn’t label Q3 as a month of strong seasonal trends.

Assessing the Competitive Landscape

Derrick Wood — Analyst

Shifting focus to competition, as you expand into more high-value product areas, how has your market positioning affected your greenfield deal percentage? Have you noticed any changes in that area?

Roy Mann — Co-Chief Executive Officer

Hi, it’s Roy. When pursuing larger deals, we encounter increased competition. While many new adoptions still stem from greenfield opportunities, customers are actively comparing us with other CRM providers.

Updates on the Partner Ecosystem

DJ Hynes — Analyst

Thanks for that insight. Can you share any developments regarding your partner ecosystem, especially as you target larger clients? What trends are you observing?

Eran Zinman — Co-Chief Executive Officer

Hi, DJ. There are no substantial updates at this moment, but our partner ecosystem continues to show strong momentum. We’re seeing more partners not only assist with implementation but also help further customize our platform. Additionally, we’re starting to engage partners who specialize in specific products, enhancing our overall capabilities.

Evolution of Internal Service Demand

DJ Hynes — Analyst

I’d like to follow up on your new services. What have you observed regarding internal versus customer-facing ticketing solutions, and how do you foresee this changing with upcoming public availability?

Eran Zinman — Co-Chief Executive Officer

At this point, it’s important to clarify that we don’t only see IT service demand. Current ticketing requests span various departments, including HR, operations, finance, and marketing, as well as internal customer support. For now, our platform is not being positioned as an external-facing support tool but rather for internal use across multiple teams.

Insights on Q4 Outlook Amid Macro Challenges

Steve Enders — Analyst

Thank you for taking my questions. Zooming in on the volatility you’re facing, how will this be reflected in your Q4 forecast? Are you accounting for any additional caution in your guidance?

Eliran Glazer — Chief Financial Officer

Hi Steve. As I noted earlier, we continue to observe steady demand across all business segments, maintaining consistent growth rates. Our gross retention remains at record levels. However, some of our customers are being more cautious with their spending, which contributed to the decline in enterprise customer adds in Q3, despite it being our fastest-growing segment. This was influenced partly by the slower hiring in sales following a robust Q2 performance. While we do not anticipate additional conservatism in our guidance, we aim to provide accurate estimates based on current knowledge.

Future Sales Strategy and Hiring Plans

Steve Enders — Analyst

Thanks for that clarification. Regarding future sales hiring, how do you foresee growth in this area as you approach 2025?

Eran Zinman — Co-Chief Executive Officer

To answer your question about hiring: sales hiring was indeed slower than expected in Q3, but we anticipate a rebound in Q4. We plan to boost sales hires for quota-carrying roles both in Q4 and for fiscal year 2025. Our focus for investment will remain on product development, R&D, and go-to-market strategies.

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Monday.com Reports Significant R&D Growth and Future Hiring Plans

Eran Zinman — Co-Chief Executive Officer

During our ongoing commitment to improve in the Chief Revenue Officer (CRO) area, as Eran stated, we plan to hire more account managers for the enterprise segment. This move will help us to deepen our connections within our existing customer base. Hiring momentum will remain strong across the board.

Steve Enders — Analyst

Thanks for addressing my questions.

Operator

Next, we have a question from Scott Berg of Needham. Please go ahead.

Scott Berg — Analyst

Hello, everyone. Thank you for taking my questions. My first question relates to the unusual spike in R&D spending this quarter compared to what we typically see between Q2 and Q3. Could you clarify the reasons driving this significant increase? Are you focusing on a particular product, or is this more about general R&D hiring?

Eliran Glazer — Chief Financial Officer

Hi, Scott. Eliran here. Over the past few quarters, we have emphasized R&D and product development as critical areas of investment. Innovation is at the heart of our operations here at Monday.com. This includes developing new products and enhancing our existing offerings, such as mondayDB and our AI capabilities. All these projects require talent, and we have seen a strong hiring trend in Q3, especially within product development, R&D, and operations. This trend accounts for the increased significance of our R&D expenditures each quarter.

Scott Berg — Analyst

Thank you, Eliran. I also wanted to ask about sales and marketing hiring. You’ve mentioned it was slightly lagging in Q3. Do you anticipate making up for this in Q4, or will this trend continue into early 2025?

Eliran Glazer — Chief Financial Officer

We expect a rebound in hiring for Q4. With the ongoing changes within our organization, we are aligning our plans accordingly. As we approach fiscal year 2025, we aim to ensure we ramp up hiring for sales quota carriers as well.

Scott Berg — Analyst

Thanks for the insight.

Operator

Our next question comes from Taylor McGinnis of UBS. Your line is open.

Taylor McGinnis — Analyst

Hello. Thank you for answering my questions. My first inquiry concerns the $5 million increase to your full-year revenue guidance. Could you provide more details on how much of this upside was due to better-than-expected pricing in Q3 versus your projections for Q4? You’ve mentioned macroeconomic uncertainties, so I’m curious if these factors impacted your sales hiring or revenues in Q3 and if so, which areas you’d identify as particularly affected.

Eliran Glazer — Chief Financial Officer

Hi, Taylor. It’s Eliran again. Recall that we implemented a price increase at the end of February this year. Initially, we were uncertain about its impact, especially related to customer churn. Overall, the outcome has exceeded our expectations. For the majority of our customers, the price increase was largely uneventful, leading to improved gross retention. Thus, the additional $5 million reflects a better-than-anticipated customer profile and improved momentum.

Taylor McGinnis — Analyst

That’s helpful. Regarding the 1-point increase in Net Revenue Retention (NRR), could you elaborate on the drivers behind that? Was it primarily due to the pricing, or are you also seeing expansion from cross-selling and seat additions? As you mentioned expecting NRR to stabilize at around 111% for Q4, is this caution based on any specific seasonal trends?

Eliran Glazer — Chief Financial Officer

It’s a combination of factors. The recent price increases contributed about 100 to 200 basis points to reported NRR in Q3. We anticipate pricing increases will positively affect reported NRR by approximately 200 basis points for fiscal year 2024 as a whole. While we expect stability in Q4, with NRR maintaining around 111%, we also see good momentum heading into October, which could lead to potential upside next year.

Operator

Our final question comes from Ittai Kidron of Oppenheimer. Your line is open.

Ittai Kidron — Analyst

Thanks for taking my questions. My first question is about monday dev. Since its announcement, performance has been somewhat below expectations. Can you discuss what changes, either in product features or market strategy, might enhance its contributions in the future?

Eran Zinman — Co-Chief Executive Officer

Hi, Ittai. It’s Eran. We acknowledge that while growth with monday dev may not be as rapid as CRM, we are pleased with its progress. Our focus is on capturing the software developer market, which naturally takes more time to scale compared to broader use cases like CRM. We are finalizing our go-to-market refocus and adding specific features tailor-made for developers. While short-term net additions may slow down, we are confident in the long-term prospects for the product, and we are committed to investing in it.

Ittai Kidron — Analyst

That’s encouraging. Additionally, in your earlier remarks, there was mention of the significant quarter-over-quarter growth of AI blocks. Could you discuss this further? How do you envision AI features evolving over the next year, particularly with regards to customer engagement and pricing dynamics?

Eran Zinman — Co-Chief Executive Officer

Absolutely. We’re delighted with the adoption rates. Total AI-related actions grew over 250% from Q2, with AI blocks expanding by 150%. We’re seeing increasing incorporation of AI into customer processes, and we plan to introduce monetization tied to these features to deliver tangible value to our customers. Overall, we are very pleased with the gains we’ve made in our AI offerings and anticipate ongoing growth.

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Monday.com Discusses Future AI Monetization Plans

Insights on Timeline for AI Revenue Generation

Ittai Kidron — Analyst

So, Eran, should we expect monetization for AI in 2025?

Eran Zinman — Co-Chief Executive Officer

We don’t have an exact timeline, but it’s possible we could see something in 2025. However, we can’t make any firm commitments at this point.

Current Financial Plans and Projections

Ittai Kidron — Analyst

Got it.

Eliran Glazer — Chief Financial Officer

Just to clarify, we are not incorporating any potential AI monetization into our planning for 2025.

Ittai Kidron — Analyst

Thank you for the insight.

End of Q&A Session

Operator

Thank you all, that wraps up our Q&A session. [Operator signoff]

Duration: 0 minutes

Call Participants:

Byron Stephen — Director, Investor Relations

Roy Mann — Co-Chief Executive Officer

Eran Zinman — Co-Chief Executive Officer

Eliran Glazer — Chief Financial Officer

Gili Naftalovich — Analyst

Pinjalim Bora — Analyst

Brent Bracelin — Analyst

Ryan MacWilliams — Analyst

Brent Thill — Analyst

Jackson Ader — Analyst

Alex Zukin — Analyst

Arjun Bhatia — Analyst

Michael Berg — Analyst

Michael Funk — Analyst

Derrick Wood — Analyst

DJ Hynes — Analyst

Steve Enders — Analyst

Scott Berg — Analyst

Taylor McGinnis — Analyst

Ittai Kidron — Analyst

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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.