Monday.com falls despite Q3 beat, sees near-term operational headwinds

Investing.com — Monday.com (NASDAQ: MNDY) reported third-quarter results that exceeded analyst expectations, but shares fell 7.3% as the company’s guidance disappointed investors.

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The AI workspace company posted revenue of $377.5 million for the third quarter, beating the consensus estimate of $369.18 million and representing 19% growth YoY. Adjusted EPS came in at $2.14, significantly ahead of the $1.37 consensus. The company achieved record adjusted operating income of $89.4 million and an adjusted operating margin of 24%, compared to $47.5 million and 15% in the prior-year period.

However, Monday.com’s fourth-quarter revenue guidance of $380 million to $382 million fell short of expectations. The midpoint of $381 million implies approximately 14% YoY growth, a deceleration from the third quarter’s 19% pace. For full year 2026, the company expects revenue of $1,473 million to $1,475 million, representing approximately 20% YoY growth, with adjusted operating margin of approximately 18%.

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“Our business is undergoing a fundamental evolution, and we took significant steps this quarter to become an AI-first company,” said co-founders and co-CEOs Roy Mann and Eran Zinman. “While we remain highly confident in this strategic path, an initiative of this scope introduces near-term operational headwinds, and we are committed to executing with discipline as we work through them.”

The company reported AI ARR reached $36 million in the third quarter, with monday agents surpassing 6 million interactions in less than two quarters. Net dollar retention rate stood at 108%, while customers with more than $100,000 in ARR grew 33% YoY to 2,127.

CFO Eliran Glazer noted the company is “investing in enterprise go-to-market, product and AI,” with the outlook reflecting that balance alongside negative foreign exchange impacts of 100 to 200 basis points.

Original Article

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