Monday.com shares slide as weak outlook overshadows earnings beat Proactive uses images sourced from Shutterstock
Shares of Monday.com (NASDAQ:MNDY) fell more than 20% in early trading on Monday after the work management software maker issued a weaker-than-expected outlook, overshadowing a fourth-quarter earnings and revenue beat.
The company forecast 2026 revenue of $1.45 billion to $1.46 billion, below analysts’ average estimate of $1.48 billion, and guided for operating income of $165 million to $175 million, well short of expectations of about $218 million, according to consensus estimates.
Monday.com reported adjusted earnings of $1.04 per share for the fourth quarter, topping analysts’ expectations of $0.92, while revenue rose nearly 25% to $333.9 million, beating forecasts of about $329.7 million.
Despite the top-line strength, investors focused on signs of slowing growth and margin pressure. The company’s non-GAAP operating margin declined to 12.5%, down 2.5 percentage points from a year earlier, while free cash flow margin fell sharply to 17%, compared with more than 27% a year ago.
Monday.com’s net dollar retention rate, a key measure of customer spending growth, slipped to 110% from 111% in the prior quarter, with similar declines across larger customer cohorts, including those generating more than $50,000 and $100,000 in annual recurring revenue.
The company continued to expand its higher-value customer base, reporting 1,756 customers generating more than $100,000 in annual recurring revenue, up 46% from a year earlier, while customers generating over $50,000 rose nearly 34%. Customers spending more than $500,000 annually increased to 87, up 74% year on year.
Gross margin remained stable at 89.5%, while remaining performance obligations climbed 36.6% to $839 million, reflecting continued demand and contract growth.