Monday.com plunges again following guidance

It was a bad Monday for Monday.com (Nasdaq: MNDY). Although the Israel work process management software company presented good results for the fourth quarter of 2025 and beat analysts’ estimates, its guidance for the first quarter of 2026 disappointed investors and its share price tumbled by nearly 21%.

Last week, Monday.com’s share price fell to a three-year low below $100, amid growing fears on the stock market that enterprise software companies will be hurt by new AI tools. Monday.com, a developer of software for managing tasks in enterprises, has been marked down as one of the possible casualties. Before it released its 2025 financials yesterday, it had a market cap of $5.1 billion, down 78% from the 2021 peak and 37% below its IPO valuation that year.

For the first quarter of 2026, Monday.com expects revenue of $338-340 million, which is less than the consensus analysts’ estimate of $343 million, and a non-GAAP operating profit of $37-39 million. For the full year 2026, revenue is expected to grow by 18-19% to $1.452-1.462 billion, below the analysts’ estimate of $1.48 billion. Operating profit for the year is forecast to be $165-175 million, with adjusted free cash flow of $275-290 million.

Share buyback

In the fourth quarter of 2025, Monday.com’s revenue grew 25% year-on-year to $334 million, overtaking both market estimates and the company’s own guidance. On a GAAP basis, Monday.com posted a net profit of $76.7 million, substantially higher than in the corresponding quarter, and on a non-GAAP basis it posted a net profit of $55 million, or $1.04 per share, $0.12 per share above the analysts’ consensus.

The difference between the GAAP and non-GAAP profit figures is explained by, among other things, stock-based compensation of $39.5 million, offset by a $61.2 million tax benefit, both excluded from non-GAAP profit.

In the full year 2025, Monday.com’s revenue grew 27% to $1.23 billion. Net profit was $119 million on a GAAP basis and $234 million, or $4.40 per share, on a non-GAAP basis.

Free cash flow for the year was $334 million, and at the end of it the company had $1.66 billion cash. A few months ago, Monday.com announced a share buyback program. Of the $870 million approved for it, the company had $735 million left at the end of 2025, some of which it may have spent since the end of the year, given the weakness in the share price.

Large customers

A trend that continued in 2025 was Monday.com’s switch to larger customers. The number of customers with more than $100,000 in ARR (annual recurring revenue) rose by 45% over the year to 1,756, while the number of customers with more than $500,000 in ARR rose by 74% to 87.

“We delivered another year of strong, disciplined execution in 2025, with 27% revenue growth and a 14% non-GAAP operating margin, while expanding our product portfolio and seeing strong adoption of our AI products,” said monday.com co-founders and co-CEOs Roy Mann and Eran Zinman. “At the same time, we continue to make progress upmarket, as larger customers increasingly adopt more solutions and standardize on monday.com for mission-critical workflows.”

Monday.com CFO Eliran Glazer said, “We delivered strong financial results in 2025 with solid revenue growth and record non-GAAP operating profit and cash generation. While foreign exchange rates have created some near-term pressure on margins, the underlying fundamentals remain healthy and we continue to see momentum with larger customers.”

According to “The Wall Street Journal”, before the release of the 2025 financials, a large majority of analysts covering Monday.com (26) had positive ratings for the stock, two were neutral, and none recommended selling it. The analysts’ average price target is $203, which compares with a market price after yesterday’s fall of $77.63.

Published by Globes, Israel business news – en.globes.co.il – on February 10, 2026.

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