NEW YORK, August 10, 2026, 17:17 EDT – Shares of monday.com declined after the company reported its AI annual recurring revenue doubled, but its revenue forecast failed to meet analysts’ expectations.
- Shares of monday.com declined by 6.5% to end at $87.10 as its third-quarter revenue guidance fell short of Wall Street expectations.
- Revenue for the second quarter increased by 22% to $364.6 million, with adjusted earnings coming in at $1.48 per share.
- Annual recurring revenue from AI products doubled compared with the first quarter, though management did not reveal the dollar amount.
- Billings rose by 13% to $361 million, falling short of analysts’ forecast of $380 million.
Shares of monday.com Ltd. NASDAQ:MNDY dropped 6.5% on Monday. The work-software firm posted second-quarter profit and revenue above expectations, but its forecast for the next quarter was below projections. The stock ended regular US trading at $87.10.
The response highlighted a more challenging environment for software providers. Investors expect AI-driven demand to compensate for decelerating core growth, rather than simply contribute an attractive new offering. monday.com reports rapid AI revenue growth, but has not revealed its underlying figures.
The quarter delivered solid results. Revenue reached $364.6 million, surpassing consensus by $9.1 million. Adjusted earnings topped forecasts by $0.37 per share. However, billings presented a contrasting picture.
| Q2 measure | Reported | Wall Street estimate | Year-earlier result | Variance versus estimate |
|---|---|---|---|---|
| Revenue | $364.6 million | $355.5 million | $299.0 million | +$9.1 million |
| Adjusted diluted EPS | $1.48 | $1.11 | $1.09 | +$0.37 |
| Billings | $361 million | $380 million | Not disclosed here | -$19 million |
Investor’s Business Daily provided the reported results and consensus data. The previous year’s revenue and adjusted diluted EPS are sourced from monday.com’s 2025 official release. Variances indicate straightforward differences.
Management projected third-quarter revenue between $368 million and $370 million, with the midpoint falling $3.8 million short of the $372.8 million consensus estimate. Anticipated growth of 16% to 17% suggests another decrease from the second quarter’s performance.
| Forward measure | Current outlook | Prior or consensus benchmark | Investor read-through |
|---|---|---|---|
| Q3 revenue | $368 million-$370 million | $372.8 million consensus | Midpoint sits around 1.0% lower than consensus |
| Q3 revenue growth | 16%-17% | 22% in Q2 | Further deceleration in growth |
| FY2026 revenue | $1.466 billion-$1.474 billion | Unchanged | Growth of 19%-20% |
| FY2026 adjusted free cash flow | $280 million-$290 million | Unchanged | Margin of 19%-20% |
The outlook for the third quarter and the full-year range remain in place following the results. The cash-flow guidance, initially established in May, was unchanged after the restructuring in July.
The most pronounced positive indicator came from AI adoption. Annual recurring revenue generated by AI products saw a twofold increase from quarter to quarter. Nevertheless, Jefferies Financial Group Inc. NYSE:JEF analyst Brent Thill commented that the products “are still too small to quantify in absolute dollars.” Investor’s Business Daily
Growth among larger accounts outpaced the company’s overall performance. The number of customers each contributing over $500,000 in annual recurring revenue climbed 68% to reach 114. This aligns with monday.com’s upmarket strategy, enabling AI agents to expand across multiple teams and workflows.
| Operating signal | Latest reading | Comparator | What it says |
|---|---|---|---|
| AI-product ARR | Doubled over the previous quarter | Absolute dollar figure withheld | Rapid uptake, starting from a low level |
| Customers above $500,000 ARR | 114 | 68 at this point last year | Increase of 68% |
| Revenue growth | 22% | 27% projected for FY2025 | Drop of five percentage points |
| Billings growth | 13% | 22% Q2 revenue rise | Nine-point difference |
The customer, AI, and growth metrics reflect the latest numbers, incorporating monday.com’s fiscal 2025 results update. Fluctuations in billings due to contract timing can occur, but slower growth currently reduces short-term visibility.
Chief Financial Officer Eliran Glazer stood by the way the outlook was presented. “We always try to be responsible, but we do have a strong conviction on the trajectory,” he stated during the earnings call. The guidance, however, continues to allow minimal margin for execution errors. Barron’s
The July restructuring introduces a second lever. monday.com intends to reduce its workforce by approximately 20% and prioritize investment in its AI platform. The company anticipates incurring net charges between $45 million and $55 million, primarily during the second half.
| Restructuring measure | Before July plan | After July plan | Change |
|---|---|---|---|
| Workforce | 3,155 as of December 31, 2025 | Planned reduction of about 20% | Approximately 630 positions |
| FY2026 non-GAAP operating margin | Near 13% | Near 15% | Increase of about 2 percentage points |
| FY2026 adjusted FCF | $280 million-$290 million | $280 million-$290 million | No change |
| Net restructuring charges | No charges in previous guidance | $45 million-$55 million | Mainly in H2 2026 |
Workforce figures are sourced from the annual filing. After detailing the plan, the company increased its adjusted operating-margin target but left its revenue and adjusted cash-flow forecasts unchanged.
Investors last week weighed the impact of cost adjustments against a slowdown in software demand. Monday’s results highlighted a clearer compromise: increased margins may underpin valuation, but this depends on AI revenue rising before the slowdown in core growth goes any further.
The range of analyst estimates is broad, with recent price targets between $85 and $165. In a larger poll of 24 analysts, the average stands at $108.54. This variance highlights divergent views on growth prospects and AI monetisation.
| Firm and analyst | Recommendation | Latest target | Prior target | Date |
|---|---|---|---|---|
| BTIG, Allan Verkhovski | Buy | $105 | $115 | July 14, 2026 |
| Tigress Financial, Ivan Feinseth | Buy | $165 | $310 | May 22, 2026 |
| UBS Group AG NYSE:UBS, Taylor McGinnis | Neutral | $85 | $93 | May 12, 2026 |
| Citigroup Inc. NYSE:C, Steven Enders | Buy | $154 | $176 | May 12, 2026 |
| Barclays PLC NYSE:BCS, Raimo Lenschow | Overweight | $100 | $95 | May 12, 2026 |
Benzinga’s analyst tracker provides the ratings and target updates. According to a broader survey from Investing.com, there are 19 buy ratings, six holds, and no sells recorded. Price targets frequently shift following earnings releases.
Risks: AI-related income might remain insufficient to balance out weaker billings. Workforce reductions could affect sales or hinder product launches. Margins might also come under strain from currency fluctuations and intense competition.
In the coming week, analysts are expected to revise their forecasts, with increased focus on restructuring efforts. The key driver remains concrete AI revenue figures. Absent that transparency, the projected $368 million to $370 million third-quarter range stands as the most reliable market indicator.
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