monday.com Earnings Beat But Q3 Guidance Trails
monday.com earnings show Q2 revenue and EPS beat but Q3 revenue guidance trailed expectations and a restructuring toward AI pressured shares
KEY TAKEAWAYS
- Q2 revenue $365 million and adjusted EPS $1.48 beat consensus.
- Q3 revenue guidance of $368 million to $370 million trailed expectations, citing a 100-200 bps FX impact.
- Management announced a restructuring to sharpen the product portfolio and commit fully to an AI Work Platform.
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monday.com Ltd. (NASDAQ: MNDY) reported stronger-than-expected second-quarter earnings on Aug. 10, 2026, with revenue and adjusted earnings per share surpassing consensus. However, the company’s third-quarter revenue guidance fell short of investor expectations as management announced a restructuring to accelerate its shift toward AI-focused products and larger enterprise customers.
Second-Quarter Results and Operating Leverage
The company posted second-quarter revenue of $364.6 million, a 22% increase year over year, and adjusted non-GAAP earnings of $1.48 per share, exceeding the consensus range of $1.11 to $1.14. Non-GAAP operating income reached $61.1 million, producing a 17% operating margin, up from 15% in the same quarter last year. Management highlighted the combination of revenue growth and margin expansion as evidence of improving operating leverage.
Guidance and Strategic Restructuring
monday.com’s third-quarter revenue guidance ranges from $368 million to $370 million, implying 16% to 17% growth year over year. The company expects non-GAAP operating income between $57 million and $59 million, with an operating margin near 16%, assuming a 100 to 200 basis-point negative impact from foreign exchange. This guidance fell below investor expectations and was the main factor cited for the stock’s decline following the announcement.
For the full 2026 fiscal year, management projects revenue between $1.466 billion and $1.474 billion, reflecting 19% to 20% growth. Non-GAAP operating income is forecasted at $230 million to $234 million, with adjusted free cash flow guidance of $280 million to $290 million. These figures imply a mid-teens operating margin and a free-cash-flow margin near 20%, also assuming the negative foreign-exchange impact.
Management described the narrower near-term outlook as part of a broader reorganization, stating, “We made the difficult decision to restructure our organization, sharpen our product portfolio, and commit fully to the AI Work Platform.” This signals a strategic pivot toward AI-enabled offerings and larger enterprise customers, a shift investors weighed against the strong second-quarter performance and cautious guidance.
