Monday.com Grows 22% and Doubles AI Revenue, but Guidance Keeps the Stock Under Pressure
Monday.com's second-quarter report, delivered after Monday's close, captured the uncomfortable position of mid-cap software in this earnings season: solid results, genuine AI traction, and a stock that fell anyway. The work-management platform reported revenue of $365 million, up 22% year over year, with an 89% gross margin and adjusted free cash flow of $52 million, or 14% of revenue, according to Investing.com's summary of the company's earnings presentation.
The enterprise motion, central to the company's pitch, kept advancing. Customers generating more than $50,000 in annual recurring revenue grew 31% year over year to 4,834, those above $100,000 rose 37% to 2,019, and the count of customers above $500,000 jumped 68% to 114, per Investing.com. The enterprise segment now accounts for 43% of total ARR, and net dollar retention for the $50,000-plus cohort held at 115%.
Management leaned hard into artificial intelligence metrics. The company cited 1.7 million agent interactions since launch, 98 million actions through its AI blocks, roughly 3 million conversations with its Sidekick assistant and 180,000 hours processed by its Notetaker product, according to Investing.com. More commercially significant: AI-related ARR doubled from the first quarter to the second and now represents 17% of net new ARR. Co-CEO Eran Zinman said customers are actively choosing AI features and are willing to pay more when they see value, per the same report.
The trouble was the forward math. Monday.com guided third-quarter revenue to $368 million to $370 million, growth of just 16% to 17%, and set full-year revenue at $1.466 billion to $1.474 billion, or 19% to 20% growth, per Investing.com. The company also told investors to expect net dollar retention to drift down to roughly 108% in the second half. For a stock that once commanded a premium multiple on durable 30%-plus growth, a mid-teens exit rate is a different investment story.
The market's response was swift. Shares fell 7.83% to $85.84, per Investing.com, leaving the stock down about 63% from its 52-week high of $220.80. The decline extended a brutal stretch for the name, which had rallied 20% in July before giving much of it back into the print.
The reaction echoes the season's broader pattern, in which the outlook has mattered far more than the quarter. FactSet data show 86% of S&P 500 companies beating estimates this season, and the punishment handed to decelerating growers, from On Holding on Tuesday to AMD last week, has been consistent regardless of how clean the reported numbers looked.
The open question for monday.com is whether AI monetization can bend the growth curve back before the multiple resets fully to a mid-teens-growth comp set. Doubling AI ARR in a single quarter is a real data point; 17% of net new ARR is no longer a rounding error. But with guidance pointing lower and retention softening, investors on Tuesday were unwilling to pay today for a reacceleration that remains a forecast.
