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MNDY Q3 Earnings Call Highlights AI Shift and Growth Pressures
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Key Takeaways
MNDY expects Q4 2026 revenue growth of 14%, with stabilization potentially taking several quarters in 2027.
monday.com's AI annual recurring revenue reaches $36M, with AI agents surpassing 6M interactions.
MNDY's enterprise customers with over $50K in annual recurring revenues rise 26%, retention faces pressure.
monday.com Ltd. (MNDY - Free Report) outlined its transition toward an artificial intelligence (AI)-first enterprise platform during its third-quarter 2026 earnings call, emphasizing AI monetization, larger customers and implementation services as future growth drivers.
Despite strong profitability and accelerating AI adoption, management acknowledged slowing revenue growth, longer enterprise sales cycles and persistent small-business weakness. The company expects these challenges to continue into 2027 as it reshapes its operating model.
MNDY Outlook Reflects Slower Growth
Chief financial officer Eliran Glazer projected fourth-quarter revenues of $380 million to $382 million, representing approximately 14% year-over-year growth.
For 2026, management expects revenues of $1.473 billion to $1.475 billion, reflecting approximately 20% growth. Non-GAAP operating income is projected between $268 million and $270 million.
During the analyst Q&A, Canaccord Genuity questioned when revenue growth might stabilize. Glazer indicated that stabilization could take several quarters into 2027, reflecting continued pressure on customer acquisition and enterprise purchasing decisions.
monday.com Accelerates AI Monetization
Co-founder and co-chief executive officer Eran Zinman highlighted growing adoption of AI capabilities, with AI annual recurring revenues reaching $36 million during the quarter.
The company's AI agents surpassed 6 million interactions in less than two quarters. Management is gradually introducing hybrid pricing that combines traditional subscriptions with usage-based AI credits.
Responding to Wells Fargo, Zinman explained that more than 30% of accounts generating at least $50,000 annually are purchasing and using AI credits. Adoption and usage within this group were approximately 4.4 times those of the remaining customer population.
MNDY Earnings and Revenues Beat Estimates
monday.com reported third-quarter 2026 non-GAAP earnings of $2.14 per share, exceeding the Zacks Consensus Estimate of $1.43. Earnings increased from $1.16 per share in the year-ago quarter.
Quarterly revenues reached $377.5 million, surpassing the Zacks Consensus Estimate of $369 million. Revenues increased 19% year over year, supported by enterprise customer expansion and continued platform adoption.
Non-GAAP operating income reached $89.4 million, while operating margin expanded to a record 24% from 15% a year earlier.
monday.com Shifts Toward Enterprise Customers
Co-founder and co-chief executive officer Roy Mann emphasized accelerating the company's move toward higher-value enterprise customers while expanding implementation support.
The number of customers generating more than $50,000 in annual recurring revenues increased 26% year over year to 5,038. The company's largest deployment exceeded 87,000 seats.
During the Q&A, William Blair questioned the duration of the transformation. Zinman explained that changes involving products, sales operations and service delivery would extend into 2027, rather than conclude within a single quarter.
MNDY Faces Sales and Retention Headwinds
Management identified three major challenges: disruption following its workforce restructuring, continued small-business weakness and longer enterprise purchasing cycles.
Chief revenue officer Casey George acknowledged that restructuring-related disruption lasted longer than anticipated. Customers also required additional time to evaluate AI investments and their business applications.
Overall net dollar retention stood at 108%. During the Q&A, Citigroup questioned whether sales conditions were normalizing. Glazer indicated that guidance assumes continued purchasing caution and expects retention to decline to approximately 107%.
monday.com Expands AI Implementation Services
Zinman highlighted monday Frontier, a new service offering that deploys engineers to help enterprises implement AI within business workflows.
Management expects the offering to increase AI adoption and consumption rather than operate primarily as a standalone services business.
During the Q&A, JPMorgan questioned Frontier's potential margin impact. Zinman acknowledged possible margin pressure from implementation investments but emphasized anticipated benefits from increased subscriptions and AI consumption.
MNDY Balances Transformation and Profitability
Glazer attributed exceptional third-quarter profitability partly to restructuring savings, reduced discretionary spending and seasonal cost benefits. Management expects operating expenses to normalize as it reinvests in AI, compensation and customer services.
The company's strategic priorities remain enterprise expansion, AI monetization and improving execution. Management maintained confidence in the transformation while acknowledging that near-term growth pressures would persist.
What monday.com's Zacks Rank and Style Scores Indicate
monday.com currently sports a Zacks Rank #1 (Strong Buy), indicating favorable near-term performance prospects based on earnings estimate revisions. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s Growth Score of B reflects attractive growth characteristics, while its Value and Momentum Score of C each indicates more balanced characteristics in those categories.
The VGM Score of B reflects a favorable combined assessment of value, growth and momentum. Historically, stocks combining a top Zacks Rank with favorable Style Scores have demonstrated stronger relative performance potential. However, the Zacks Rank can change as analysts revise earnings estimates following the latest quarterly results.
View the Zacks #1 Rank List
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MNDY Q3 Earnings Call Highlights AI Shift and Growth Pressures
Key Takeaways
monday.com Ltd. (MNDY - Free Report) outlined its transition toward an artificial intelligence (AI)-first enterprise platform during its third-quarter 2026 earnings call, emphasizing AI monetization, larger customers and implementation services as future growth drivers.
Despite strong profitability and accelerating AI adoption, management acknowledged slowing revenue growth, longer enterprise sales cycles and persistent small-business weakness. The company expects these challenges to continue into 2027 as it reshapes its operating model.
MNDY Outlook Reflects Slower Growth
Chief financial officer Eliran Glazer projected fourth-quarter revenues of $380 million to $382 million, representing approximately 14% year-over-year growth.
For 2026, management expects revenues of $1.473 billion to $1.475 billion, reflecting approximately 20% growth. Non-GAAP operating income is projected between $268 million and $270 million.
During the analyst Q&A, Canaccord Genuity questioned when revenue growth might stabilize. Glazer indicated that stabilization could take several quarters into 2027, reflecting continued pressure on customer acquisition and enterprise purchasing decisions.
monday.com Accelerates AI Monetization
Co-founder and co-chief executive officer Eran Zinman highlighted growing adoption of AI capabilities, with AI annual recurring revenues reaching $36 million during the quarter.
The company's AI agents surpassed 6 million interactions in less than two quarters. Management is gradually introducing hybrid pricing that combines traditional subscriptions with usage-based AI credits.
Responding to Wells Fargo, Zinman explained that more than 30% of accounts generating at least $50,000 annually are purchasing and using AI credits. Adoption and usage within this group were approximately 4.4 times those of the remaining customer population.
MNDY Earnings and Revenues Beat Estimates
monday.com reported third-quarter 2026 non-GAAP earnings of $2.14 per share, exceeding the Zacks Consensus Estimate of $1.43. Earnings increased from $1.16 per share in the year-ago quarter.
Quarterly revenues reached $377.5 million, surpassing the Zacks Consensus Estimate of $369 million. Revenues increased 19% year over year, supported by enterprise customer expansion and continued platform adoption.
monday.com Ltd. Price, Consensus and EPS Surprise
monday.com Ltd. price-consensus-eps-surprise-chart | monday.com Ltd. Quote
Non-GAAP operating income reached $89.4 million, while operating margin expanded to a record 24% from 15% a year earlier.
monday.com Shifts Toward Enterprise Customers
Co-founder and co-chief executive officer Roy Mann emphasized accelerating the company's move toward higher-value enterprise customers while expanding implementation support.
The number of customers generating more than $50,000 in annual recurring revenues increased 26% year over year to 5,038. The company's largest deployment exceeded 87,000 seats.
During the Q&A, William Blair questioned the duration of the transformation. Zinman explained that changes involving products, sales operations and service delivery would extend into 2027, rather than conclude within a single quarter.
MNDY Faces Sales and Retention Headwinds
Management identified three major challenges: disruption following its workforce restructuring, continued small-business weakness and longer enterprise purchasing cycles.
Chief revenue officer Casey George acknowledged that restructuring-related disruption lasted longer than anticipated. Customers also required additional time to evaluate AI investments and their business applications.
Overall net dollar retention stood at 108%. During the Q&A, Citigroup questioned whether sales conditions were normalizing. Glazer indicated that guidance assumes continued purchasing caution and expects retention to decline to approximately 107%.
monday.com Expands AI Implementation Services
Zinman highlighted monday Frontier, a new service offering that deploys engineers to help enterprises implement AI within business workflows.
Management expects the offering to increase AI adoption and consumption rather than operate primarily as a standalone services business.
During the Q&A, JPMorgan questioned Frontier's potential margin impact. Zinman acknowledged possible margin pressure from implementation investments but emphasized anticipated benefits from increased subscriptions and AI consumption.
MNDY Balances Transformation and Profitability
Glazer attributed exceptional third-quarter profitability partly to restructuring savings, reduced discretionary spending and seasonal cost benefits. Management expects operating expenses to normalize as it reinvests in AI, compensation and customer services.
The company's strategic priorities remain enterprise expansion, AI monetization and improving execution. Management maintained confidence in the transformation while acknowledging that near-term growth pressures would persist.
What monday.com's Zacks Rank and Style Scores Indicate
monday.com currently sports a Zacks Rank #1 (Strong Buy), indicating favorable near-term performance prospects based on earnings estimate revisions. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s Growth Score of B reflects attractive growth characteristics, while its Value and Momentum Score of C each indicates more balanced characteristics in those categories.
The VGM Score of B reflects a favorable combined assessment of value, growth and momentum. Historically, stocks combining a top Zacks Rank with favorable Style Scores have demonstrated stronger relative performance potential. However, the Zacks Rank can change as analysts revise earnings estimates following the latest quarterly results.