monday.com (MNDY) Earnings Date & Reports

Key Takeaways

• Third-quarter revenue reached $377.5 million, up 19% year over year (YoY) and above the consensus estimate of roughly $369.2 million.
• Adjusted earnings per share (EPS) came in at $2.14, comfortably ahead of the $1.37 consensus.
• Adjusted operating margin hit a record 24%, up from 15% a year earlier, reflecting the company's restructuring and cost discipline.
• Fourth-quarter revenue guidance of $380 million to $382 million (about 14% growth) landed below expectations, overshadowing the Q3 beat.
• AI annual recurring revenue (ARR) reached $36 million, while net dollar retention (NDR) — a measure of revenue retained from existing customers — held at 108%.
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Earnings Context and Why It Matters

monday.com is in the middle of a strategic transition toward an AI-first, enterprise-focused business model, making this quarterly report a key checkpoint for investors. The company has been trading top-line growth for operational discipline, and its third-quarter results reveal how well that pivot is progressing. Because management frames its outlook in terms of revenue, operating margin, and free cash flow, the report offers a clearer read on profitability and the early monetization of its AI products than on raw growth alone. With a major restructuring completed during the quarter, investors are watching closely to see whether cost savings translate into durable earnings power without eroding the revenue base.

Reported Results

monday.com reported third-quarter revenue of $377.5 million, up 19% year over year and ahead of the consensus estimate of about $369.2 million. Adjusted EPS was $2.14, significantly above the $1.37 analysts expected. Adjusted operating income rose to $89.4 million from $47.5 million a year earlier, producing a record adjusted operating margin of 24%, compared with 15% in the prior-year period.

Key operating metrics were mixed. Net dollar retention (NDR) — the revenue retained from existing customers over a trailing 12-month basis — was 108%. Customers generating more than $100,000 in ARR grew 33% year over year to 2,127. AI ARR reached $36 million, and monday agents surpassed 6 million interactions. However, operating cash flow fell to $20.4 million from $95.1 million a year earlier, and adjusted free cash flow declined to $63 million from $92.3 million, partly reflecting restructuring-related payments.

For the fourth quarter, management guided revenue of $380 million to $382 million, implying roughly 14% growth and below consensus. Full-year 2026 revenue guidance was raised to $1.473 billion to $1.475 billion (about 20% growth), with an adjusted operating margin of approximately 18% and adjusted free cash flow of $282 million to $288 million.

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Market Reaction and Investor Sentiment

Despite the third-quarter earnings and revenue beat, monday.com shares fell roughly 7% following the report, as investors focused on the softer fourth-quarter outlook. The midpoint of the company's Q4 revenue guidance implies about 14% growth, a notable deceleration from the 19% pace delivered in Q3. Management attributed the cautious outlook to longer enterprise sales cycles, more deliberate buying behavior around AI, and ongoing pressure in the small-and-midsize business (SMB) segment. The selloff reflects a broader sentiment shift: investors are rewarding profitability but increasingly demanding evidence that the company's AI investments can reignite durable revenue growth.

Forward Outlook and Key Factors to Monitor

Looking ahead, investors will be watching whether monday.com can stabilize revenue growth while protecting the margin gains it achieved in the third quarter. Management has signaled that weaker demand from smaller businesses and extended enterprise sales cycles could persist into 2027, and it expects it may take several quarters for revenue growth to stabilize.

A central theme will be the monetization of AI. The company's AI ARR reached $36 million, with stronger adoption among larger accounts, but this remains a relatively small portion of the overall business. How quickly AI credits and new offerings such as monday Frontier and the Harmony voice AI platform convert into recurring revenue will be closely scrutinized.

Investors should also monitor NDR trends, enterprise customer additions, and free cash flow, which was pressured by restructuring payments in Q3. Finally, foreign exchange (FX) headwinds — estimated at 100 to 200 basis points — and the reinvestment of roughly $100 million in restructuring savings into AI, compensation, and go-to-market efforts will shape profitability in the quarters ahead.

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