Monday.com shares fell 5.5% in pre-market trading despite beating Q2 expectations, as cautious Q3 guidance disappointed investors. The work management software company reported adjusted earnings of $1.48 per share, well above the $1.11 consensus, whilst revenue rose 22% year-on-year to $364.6 million, surpassing forecasts of $355.53 million. However, Monday.com's Q3 revenue guidance of $368 million to $370 million came in below Wall Street's $372.85 million estimate, implying growth of just 16-17% compared with Q2's 22%. The company reported record adjusted operating income of $61.1 million, representing a 17% margin. AI products showed strong momentum, with related annual recurring revenue doubling from Q1 and accounting for 17% of net new ARR in Q2.

monday.com announced plans to cut approximately 20% of its workforce as part of a strategic shift towards its AI Work Platform. The Israeli enterprise software firm expects the restructuring to generate $45 million to $55 million in net charges, primarily in the second half of 2026. Despite the job cuts, the company reaffirmed its full-year revenue growth guidance of 19% to 20% year-over-year and maintained its adjusted free cash flow margin guidance of 19% to 20%. monday.com raised its non-GAAP operating margin forecast to approximately 15%, up from a prior estimate of around 13%. The company plans to continue hiring in key strategic areas throughout 2026. MNDY shares rose approximately 1% following the announcement, breaking a six-day losing streak.

monday.com Ltd. (MNDY) delivered strong first-quarter 2026 results that addressed concerns about growth and AI monetisation, according to an analysis by Elliot's Musings. Revenue grew 24%, operating margin reached a record 14% despite foreign exchange headwinds, and free cash flow margin stood at 29%. Management raised full-year guidance following the results. Significantly, 10% of net new annual recurring revenue came from the company's new seats-plus-credits pricing model, demonstrating customers' willingness to pay for AI consumption. Management repurchased roughly 10% of outstanding shares for $553 million, signaling confidence in long-term prospects. The analysis suggests MNDY could reach $140-$175 per share over 18 months, representing 80-120% upside, if AI credit adoption continues expanding. The shares currently trade at approximately 1.9 times forward enterprise value to revenue.