monday.com guides Q4 growth down to about 14% after a record 24% operating margin
The Tel Aviv work-management company printed a record 24% non-GAAP operating margin and $36 million of AI ARR, then guided fourth-quarter growth to about 14%, the first quantified cost of an AI-first pivot that cut a fifth of its staff in July. It lands in a software cohort the market has already repriced for slowing seat growth.
Vincent Jiangthree-minute read
The record and the warning came in one filing
monday.com−4.17% — monday.com, down 4.17 percent as of its last quote (Nasdaq: MNDY), the Tel Aviv work-management platform, reported third-quarter revenue of $377.5 million, up 19% year over year, with record non-GAAP operating income of $89.4 million at a 24% margin, up from 15% a year earlier 1. Adjusted earnings of $2.14 a share beat the $1.37 consensus by more than half 2.
Then the guide: fourth-quarter revenue of $380 million to $382 million, about 14% growth, with margin back down to about 18% and a currency drag of 100 to 200 basis points 1. The midpoint sat under the $385.65 million consensus 5. Shares fell nearly 6% to $82.70, a $3.72 billion market value, after dropping as much as 7.3% in early trading 53. Growth has halved in three years, from 38% in late 2023 10.
monday.com's revenue growth has halved in three years, to a guided 14%
Growth has halved in three years; the Q4 guide takes it to about 14%
- Revenue growth, % yoy
- Estimate
Data
| Revenue growth, % yoy | |
|---|---|
| Q3 '23 | 38.2% |
| Q4 '23 | 35.1% |
| Q1 '24 | 33.7% |
| Q2 '24 | 34.4% |
| Q3 '24 | 32.7% |
| Q4 '24 | 32.3% |
| Q1 '25 | 30.1% |
| Q2 '25 | 26.6% |
| Q3 '25 | 26.2% |
| Q4 '25 | 24.6% |
| Q1 '26 | 24.5% |
| Q2 '26 | 21.9% |
| Q3 '26 | 19.2% |
| Q4 '26 (estimate) | 14.1% |
The pivot has an itemized bill
On July 22 the company cut about 20% of its workforce, just over 600 people, for what its filing called a leaner operating model serving an AI-driven strategy 6. The quarter carried $10.0 million of restructuring charges, $31.4 million year to date 1. Operating cash flow of $20.4 million less $4.6 million of capital spending left free cash flow of $15.8 million; a $47.2 million add-back for restructuring payments produced adjusted free cash flow of $63.0 million, down from $92.3 million a year ago 1.
Co-founder and co-CEO Eran Zinman insisted the cuts were "not made to reduce costs or replace people with AI" 6; he and co-founder Roy Mann, his fellow co-CEO, now concede "near-term operational headwinds" 1. Retention slipped to 108%, from 113% a quarter earlier 4.
Seats stall while the biggest accounts run
Seat growth is where the strain shows. Customers with more than ten users grew 5%, to 65,965 1. The enterprise tiers compound: customers above $50,000 in annual recurring revenue grew 26%, above $100,000, 33%, and above $500,000, 58%, with the largest deployment at more than 87,000 seats 1. The AI line, credits, agents and other AI products, reached $36 million of annual recurring revenue, about 2.4% of the annualized base, and agents passed six million interactions 1.
Seat growth stalls at 5% while half-million-dollar accounts grow 58%
Seat growth has stalled; the biggest accounts compound
Data
| Value | |
|---|---|
| 10+ users | 5% |
| $50K+ ARR | 26% |
| $100K+ ARR | 33% |
| $500K+ ARR | 58% |
The bear case is priced next door
HubSpot−3.18% — HubSpot, down 3.18 percent today, the marketing-and-sales software maker, cut about 660 jobs in early October and guided fourth-quarter revenue 1.9% below estimates 78. ZoomInfo−4.84% — ZoomInfo, down 4.84 percent as of its last quote, the contact-data provider, saw revenue shrink 2.9% last quarter and trades at a $1.23 billion market value, roughly one times annualized sales 9.
monday.com's counter is real: 108% retention, booked future revenue up 27% to $946 million, record margins 1. Customers pay for seats today and credits tomorrow; shareholders fund the gap between the two, here with $735 million of buybacks since January against $869.6 million of remaining cash 1. The Q4 print in early 2027 is the tell: whether AI revenue compounds from $36 million, or whether 14% is simply where seat growth now lives 1.
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