monday.com Ltd.
monday.com Ltd. provides an AI work platform, enabling teams to build custom software and manage work with AI agents. Its solutions include CRM and Service, now
monday.com Ltd. provides an AI work platform, enabling teams to build custom software and manage work with AI agents. Its solutions include CRM and Service, now with dedicated focus, while monday dev is less emphasized. AI-driven revenue represents 17% of net new ARR. The company serves diverse global organizations, including enterprises, using a 'seats plus credits' pricing model.
Source Company is a cloud-native platform; CFO mentioned 'additional cost regarding computing related to AI' impacting gross margin. monday.com also mentions adopting multi-cloud management across providers like AWS, Azure, and Google Cloud.
Confidence: high
Source R&D expense was 23% of revenue in Q2; 'bulk of the R&D people are based in Israel' and impacted by Israeli shekel appreciation.
Confidence: high
Source Sales and marketing expense was 41% of revenue in Q2. monday.com has offices globally, including sales teams.
Confidence: high
Source Company provides 'customer support services' and 24/7 support from global offices. Direct support labor is typically part of COGS for SaaS.
Confidence: medium
Source Company is transforming into an 'AI work platform' and integrates with tools like Claude, Copilot, and ChatGPT.
Confidence: medium
Source Management mentioned 'performance marketing or top of funnel activity' as a factor in demand environment. monday.com spends significantly on digital advertising.
Confidence: high
Source General and administrative expense was 8% of revenue in Q2.
Confidence: medium
Source Standard COGS component for software companies, representing the cost of developing the core product over time.
Confidence: medium
Metric/field Private Fixed Investment: Nonresidential: Intellectual Property Products: Software (B985RC1Q027SBEA)
Cadence quarterly
Why it matters This metric directly reflects business investment in software, a core driver of demand for monday.com's platform.
Signal to watch Higher growth indicates stronger business investment in software, suggesting a favorable demand environment for MNDY.
Confidence: high
Metric/field ISM Services PMI (PMISERV)
Cadence monthly
Why it matters Reflects the health and growth of the services sector, a primary customer base for monday.com's work management and AI tools.
Signal to watch A higher PMI indicates expansion in the services sector, suggesting increased business activity and potential demand for productivity software.
Confidence: high
Metric/field Exchange Rate: Israeli Shekel to U.S. Dollar (DEXUSIS)
Cadence daily
Why it matters Fluctuations in the Israeli Shekel to U.S. Dollar exchange rate directly impact monday.com's operating margin, as a significant portion of its R&D costs are in Israel.
Signal to watch A weaker Israeli Shekel relative to the U.S. Dollar would be a tailwind for operating margins, while a stronger Shekel would be a headwind.
Confidence: high
Metric/field All Employees, Professional and Business Services (CES5500000001)
Cadence monthly
Why it matters This series indicates employment trends in a key white-collar customer segment, which directly influences potential seat growth for monday.com's platform.
Signal to watch Increasing employment in professional and business services suggests a larger potential user base and demand for work management solutions.
Confidence: medium
Metric/field Real Gross Domestic Product (GDPC1)
Cadence quarterly
Why it matters Overall economic growth impacts general business spending and confidence, influencing enterprise IT budgets and willingness to invest in new software solutions.
Signal to watch Stronger GDP growth generally correlates with increased business spending and a more favorable environment for software sales.
Confidence: high
Metric/field Search interest for 'monday.com AI' (Worldwide, Past 90 days, Web Search)
Cadence daily
Why it matters Indicates direct public and business interest in monday.com's new AI offerings and strategic shift.
Signal to watch Increasing search interest suggests growing awareness and potential adoption of their AI work platform.
Confidence: high
Metric/field Search interest for 'AI workflow automation' (Worldwide, Past 90 days, Web Search)
Cadence daily
Why it matters Reflects broader industry interest in the core concept of the theme, indicating growing awareness and potential demand for agentic systems.
Signal to watch Rising search interest suggests increasing market demand for AI-driven automation, a tailwind for MNDY's strategy.
Confidence: high
Metric/field Number of job postings mentioning 'monday.com' (Global, filtered by 'AI', 'Machine Learning', 'Enterprise Sales')
Cadence weekly
Why it matters Provides insight into monday.com's hiring activity and strategic focus areas, particularly in AI development and upmarket sales.
Signal to watch Increased postings in AI/ML and enterprise sales roles indicate continued investment in these strategic growth areas.
Confidence: medium
Metric/field r/mondaydotcom: Number of subscribers, active users, and sentiment analysis of posts (e.g., positive/negative mentions of AI features)
Cadence daily
Why it matters Offers a pulse on community engagement, user sentiment, and discussions around monday.com's products and new features, including AI.
Signal to watch Growing active users and positive sentiment, especially regarding AI features, suggest strong user adoption and satisfaction.
Confidence: medium
Metric/field monday.com website: Total visits, unique visitors, bounce rate, and traffic sources (e.g., direct, organic search, referral)
Cadence monthly
Why it matters Provides a general indication of interest and engagement with monday.com's platform and brand.
Signal to watch Increasing total visits and unique visitors, alongside a stable or decreasing bounce rate, suggest growing interest and user engagement.
Confidence: medium
Metric/field Employee headcount for 'monday.com' by department (e.g., R&D, Sales, Product) and specific AI/ML skill sets (Global)
Cadence monthly
Why it matters Offers granular insight into monday.com's workforce changes, talent acquisition in key areas like AI, and the impact of restructuring.
Signal to watch Growth in R&D and AI-related headcount, particularly after the workforce reduction, indicates strategic reinvestment and focus.
Confidence: high
Metric/field Worldwide Enterprise Software Spending (by segment: Project & Portfolio Management, Collaboration, CRM, AI Software)
Cadence quarterly/annually
Why it matters Provides a macro view of enterprise software budget allocation and growth trends in monday.com's key market segments.
Signal to watch Stronger growth forecasts for relevant software segments indicate a favorable market environment for MNDY's offerings.
Confidence: high
Metric/field monday.com job postings: Number of specific AI/ML engineering roles, enterprise sales roles, and time-to-fill metrics (Global)
Cadence daily
Why it matters Offers more granular and real-time data on monday.com's hiring priorities and efficiency in filling critical roles related to AI and enterprise expansion.
Signal to watch Consistent or increasing postings for high-value AI and enterprise sales roles, with efficient time-to-fill, suggests effective strategic execution.
Confidence: medium
Metric/field Spending on Collaborative Applications, Project & Portfolio Management Software, and AI Platforms (Worldwide)
Cadence semi-annually/annually
Why it matters Provides detailed market size and growth forecasts for the specific software categories monday.com operates in, including the emerging AI platform market.
Signal to watch Robust growth in these segments validates the market opportunity and potential for monday.com's continued expansion.
Confidence: high
Metric/field Survey results on enterprise intent to purchase/renew 'Work Management Software' or 'AI-enabled Collaboration Tools' for monday.com or its competitors
Cadence quarterly/semi-annually
Why it matters Offers direct insights into customer purchasing intentions and budget allocations for monday.com's product categories, providing a forward-looking demand signal.
Signal to watch Higher reported intent to purchase/renew monday.com's offerings or related AI tools indicates strong future demand.
Confidence: medium
monday.com is aggressively transforming into an AI work platform, shifting from managing to *doing* work through AI agents, supported by strong enterprise adopt
monday.com is aggressively transforming into an AI work platform, shifting from managing to doing work through AI agents, supported by strong enterprise adoption and a new "seats plus credits" consumption model. This positions MNDY to capitalize on the agentic AI trend, driving efficiency and expanding monetization. Despite a recent 20% workforce reduction and anticipated near-term net dollar retention moderation, the strategic reinvestment in AI and focused upmarket execution underpin a compelling long-term bullish outlook. (September 9, 2026)
monday.com's strategic pivot to an AI work platform is demonstrating early success in monetization. AI ARR doubled from Q1 to Q2 2026, now representing 17% of net new ARR. The new "seats plus credits" pricing model is seeing strong early reception, with customers actively engaging and "topping up" their AI consumption, indicating a new and expanding revenue vector beyond traditional seat growth.
The company continues to exhibit robust enterprise momentum, with record net additions of $100,000-plus and $500,000-plus customers in Q2 2026, growing 37% and 68% year-over-year, respectively. Gross retention remains at historical highs, reflecting deep customer embedding and sustained demand for monday.com's platform as enterprises consolidate their work infrastructure and seek AI solutions.
monday.com is strategically reinvesting savings from its 20% workforce reduction into talent, product, and AI, aiming for increased focus and faster execution. This includes sharpening focus on monday service and monday CRM with dedicated teams and accelerating a "forward-deployed engineer" model to assist customers in deploying AI, which is expected to drive larger deals and deeper relationships.
monday.com anticipates modest pressure on Net Dollar Retention (NDR) in the second half of fiscal year 2026, with Q2 NDR at 109%. This is primarily due to lapping significant pricing actions from fiscal years 2024 and 2025, which previously boosted NDR. New adoption and AI-driven expansion are not yet expected to fully offset this past pricing growth, indicating potential near-term revenue growth deceleration.
The company implemented a significant 20% global workforce reduction in July 2026, which, while intended for long-term efficiency and AI reinvestment, introduces short-term disruption and execution risk. Management explicitly factored this "short-term impact" into its cautious full-year guidance, choosing not to flow through Q2 upside due to these uncertainties during a major organizational transition.
The top-of-funnel demand environment remains soft and volatile, consistent with prior expectations, and the company's guidance does not assume any rebound in performance marketing. Additionally, while AI monetization is promising, management acknowledges it's "still early days" and they are "experimenting a lot" with pricing, indicating ongoing uncertainty regarding the pace and scale of AI revenue contribution.
| Key Factor | Why It Matters | What To Watch | What It Signals | Where/How To Track | Free Alt Data | Paid Alt Data |
|---|---|---|---|---|---|---|
| Net Dollar Retention (NDR) Trend | NDR is a critical indicator of customer satisfaction, expansion, and churn. Its trend reflects the underlying health of the business and the ability to drive revenue growth from existing customers, especially as the company laps prior pricing actions. | The reported overall NDR for Q3 2026 and subsequent quarters, specifically whether it stabilizes around 108-109% or declines more significantly than the anticipated 'modest pressure' for the back half of fiscal year 2026. | Bullish if NDR stabilizes at or above 109% or declines less than the 'slight decline' anticipated for fiscal year 2026, indicating strong underlying customer value. Bearish if NDR declines more sharply than expected (e.g., below 108%). | Company earnings reports and conference call transcripts (next expected Q3 2026 earnings call in November 2026). | Customer reviews/ratings on software review sites (e.g., G2, Capterra) for sentiment changes; industry reports on SaaS churn rates. | ChurnZero/Gainsight data (if available for public companies): Customer churn/expansion trends; SaaS benchmarking reports. |
| Adoption of 'Seats Plus Credits' Pricing Model | The new consumption-based pricing model is crucial for monetizing AI usage beyond traditional seat licenses, representing a new vector for revenue growth and validating the value customers derive from AI capabilities. | Management commentary on the continued adoption rate of the new 'seats plus credits' model by existing and new customers, and any specific metrics on AI credit consumption or 'top-ups' in Q3 2026 and beyond. | Bullish if management reports continued strong adoption rates and increasing revenue contributions from AI credits, especially from 'top-ups' beyond initial packages. Bearish if adoption slows or revenue impact from credits is minimal. | Company earnings reports and conference call transcripts (next expected Q3 2026 earnings call in November 2026). | Company blog posts or press releases detailing customer success stories with AI features; industry forums/subreddits (e.g., r/mondaydotcom) for user feedback on the new pricing. | G2/Capterra reviews: Sentiment analysis on pricing and AI features; Similarweb: monday.com website traffic to pricing pages. |
| AI Contribution to Net New ARR | This metric directly reflects the success of monday.com's strategic shift to an AI work platform and its ability to monetize AI features, validating the new consumption-based pricing model and future revenue expansion. | The reported percentage of net new ARR driven by AI in Q3 2026 and subsequent quarters. In Q2 2026, this was 17%. | Bullish if the percentage of net new ARR driven by AI shows continued sequential growth (e.g., >17% in Q3 2026), indicating successful AI product adoption and monetization. Bearish if it stagnates or declines. | Company earnings reports and conference call transcripts (next expected Q3 2026 earnings call in November 2026). | Google Trends: 'monday.com AI' or 'monday.com AI agents' search volume. | Thinknum: monday.com AI-related job postings growth; Apptopia: monday.com app downloads/usage trends (if AI features are mobile-centric). |
| Impact of 20% Workforce Reduction and Reinvestment | This significant intra-quarter restructuring aims to streamline operations, reduce costs, and reallocate resources towards AI and upmarket initiatives, impacting near-term guidance but signaling long-term margin expansion and top-line growth. | Management commentary on the realized cost savings from the 20% workforce reduction, the specific areas of reinvestment (talent, product, AI), and any updated projections for operating margin expansion in Q3 2026 and fiscal year 2027. | Bullish if the company reports that the short-term disruption is managed effectively, reinvestments are yielding tangible product/AI advancements, and operating margin expansion for FY2027 remains on track or improves. Bearish if the short-term impact on top-line growth is more severe than anticipated or if reinvestments do not show clear benefits. | Company earnings reports and conference call transcripts (next expected Q3 2026 earnings call in November 2026). | Company press releases on new hires/product launches; Glassdoor/Blind: Employee sentiment regarding the restructuring and new focus. | Revelio Labs: monday.com headcount changes by department; Thinknum: R&D job postings for AI-related roles. |
| Enterprise Customer Growth (>$100k and >$500k ARR customers) | Robust growth in larger customer segments indicates successful upmarket execution and deep embedding of monday.com's platform within enterprises, which are key drivers for long-term, durable revenue. | The reported growth rate of customers with over $100,000 ARR and customers with over $500,000 ARR in Q3 2026. In Q2 2026, these grew 37% and 68% year-over-year, respectively. | Bullish if the growth rate of $100k+ ARR customers remains at or above 37% and $500k+ ARR customers remains at or above 68% in subsequent quarters, indicating continued strong upmarket momentum. Bearish if these growth rates decelerate significantly. | Company earnings reports and conference call transcripts (next expected Q3 2026 earnings call in November 2026). | LinkedIn: Growth in monday.com sales/enterprise roles; Public customer case studies on monday.com's website. | ZoomInfo/Apollo.io: Tracking new enterprise customer logos for monday.com; Gartner/Forrester: Enterprise software adoption surveys. |
This highlights the deepest penetration into the enterprise segment and the ability to secure and expand relationships with the largest, highest-value customers
| Key reported metrics | ||
|---|---|---|
| Metric | Last period | Why it matters |
| Customers with more than $500,000 ARR Growth | 68% | This highlights the deepest penetration into the enterprise segment and the ability to secure and expand relationships with the largest, highest-value customers, crucial for long-term, durable growth and AI monetization. |
| Customers with more than $100,000 ARR Growth | 37% | This metric reflects the success of monday.com's crucial upmarket strategy and enterprise adoption, which is a key driver for future revenue expansion and validates the company's focus on larger customers. |
| Total Revenue Growth | $365 million (22% y/y growth) | This is a primary indicator of monday.com's overall market demand and ability to scale its business, especially during its strategic shift to an AI work platform. Investors will watch for signs of stabilization or acceleration. |
| Key reported metrics | Rerating thresholds | Earnings results | ||||||
|---|---|---|---|---|---|---|---|---|
| Metric | Last period | Why it matters | What's needed for rerating | Rerating context | Earnings date | Actual reported | Hit target? | Notes |
| Total Revenue Growth | 24% | As a primary income statement metric, total revenue growth reflects overall market demand and the company's ability to scale. The guidance for Q2 and full year shows a moderation, making the actual Q2 performance critical. | Total Revenue Growth of 26% or higher year-over-year. | Hitting 26%+ revenue growth would demonstrate that monday.com's AI work platform strategy and new 'seats plus credits' consumption model are driving significant revenue expansion, successfully offsetting anticipated Net Dollar Retention moderation and defying guided H2 slowdown. This would validate the bullish 'Agentic Utilities' thesis, signaling strong competitive positioning and justifying a higher valuation. | $365 million (22% y/y growth) | No | monday.com's total revenue grew 22% year-over-year to $365 million, missing the rerating trigger of 26% or higher. Management attributed the moderated guidance and Q2 results to the short-term impact of a 20% workforce reduction in July and the lapping of prior pricing actions, emphasizing a responsible and cautious approach during a period of transition. | |
| Net Dollar Retention (NDR) | 110% | NDR is a key indicator of customer satisfaction, expansion, and churn. The anticipated slight decline due to lapping prior pricing actions makes its trend crucial for assessing underlying business health and future revenue growth. | Net Dollar Retention (NDR) needs to stabilize at or above 109% for the upcoming earnings report. | Maintaining NDR at or above 109% would signal stronger underlying customer value and successful early monetization of AI, defying the company's own guidance for a 'slight decline' by the end of fiscal year 2026. This would indicate robust customer expansion and retention, crucial for validating monday.com's transition to an AI work platform and driving a positive rerating. | 109% | Yes | The company met its NDR target, reporting 109% for Q2. This is in line with the rerating threshold and occurred despite management's expectation of 'modest pressure' in the back half of fiscal year 2026 due to lapping prior pricing actions. Gross retention remained at historical highs. | |
| AI Contribution to Net New ARR | 3% | This metric directly reflects the success of monday.com's strategic shift to an AI work platform and its ability to monetize AI features. Growth here validates the new consumption-based pricing model and future revenue expansion. | The AI Contribution to Net New ARR metric needs to hit at least 5% (a significant sequential increase from the prior 3% in Q1 2026) to signal accelerated AI product adoption and monetization, validating the new 'seats plus credits' consumption model. | Hitting this threshold is crucial as it directly validates monday.com's strategic transformation into an 'AI work platform' and its ability to monetize AI features. A substantial increase would confirm the new consumption-based pricing model is driving revenue expansion, strengthening the bull case and differentiating MNDY in the competitive AI software market. | 17% y/y growth | Yes | monday.com significantly exceeded this rerating trigger, with AI ARR doubling from Q1 to Q2 and representing 17% of net new ARR. Management highlighted that customers are actively choosing their AI capabilities and are 'topping up' their consumption, indicating a new and encouraging vector for growth. | |
Can monday.com sustain and accelerate the strong early momentum of its 'seats plus credits' AI pricing model, particularly in driving AI ARR growth and customer
Can monday.com sustain and accelerate the strong early momentum of its 'seats plus credits' AI pricing model, particularly in driving AI ARR growth and customer 'top-ups,' to significantly offset potential headwinds from overall revenue moderation?
Will monday.com's Net Dollar Retention (NDR) stabilize within its guided range of 108-109% for fiscal year 2026, as strong gross retention and enterprise expansion prove sufficient to counteract the pressure from lapping prior pricing actions and softer downmarket demand?
Can monday.com effectively manage the short-term disruption and reinvestment of savings from its 20% workforce reduction to drive anticipated operating margin expansion in fiscal year 2027, while continuing to fund significant AI R&D and mitigating FX headwinds?
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 3 Things Management Is Most Focused On1. **Strategic shift to an AI work platform:** Management is heavily focused on transforming monday.com from a work management software to an "AI work platform" that uses AI agents to actively "do the work" alongside people, operating within a unified workspace. 2. **Expanding upmarket motion and deepening customer relationships:** The company is prioritizing growth in larger customer segments, evidenced by record net additions of $100,000-plus and $500,000-plus customers, and aims to deepen these relationships as AI capabilities expand. 3. **Organizational restructuring for increased focus and efficiency:** A significant 20% workforce reduction was implemented to create a more agile organization with fewer management layers, smaller teams, and greater decision-making authority, with savings reinvested into people, products, and AI. | Call Takeaway & ToneThe overall takeaway of the call is that monday.com is in a significant strategic transition, fundamentally reshaping itself into an "AI work platform" and undergoing a substantial organizational restructuring to enhance focus and efficiency. While early AI adoption and upmarket momentum are strong and encouraging, the company is taking a cautious approach to its near-term financial guidance due to the short-term impacts of the restructuring and the lapping of prior pricing actions. The tone was mixed, reflecting confidence in the long-term AI-driven strategy and upmarket execution, but also a pragmatic and responsible outlook on the immediate financial implications of this transition. | Prior Quarter'S Y/Y Growth By SegmentTotal revenue grew 24% year-over-year in Q1 2026. Approximately 10% of net new ARR in Q1 2026 was driven by AI products. Customers with more than $100,000 ARR grew 39% year-over-year in Q1 2026. Customers with more than $500,000 ARR grew 74% year-over-year in Q1 2026. Overall NDR was 110% in Q1 2026. | 3 Things Analysts Most Pressed On (And Mgmt Responses)1. **Demand environment, particularly downmarket vs. upmarket, and AI adoption:** Analysts questioned the demand environment, noting strong AI and upmarket performance but weaker downmarket new additions. Management responded that AI adoption is strong across all segments, and the overall demand environment is consistent with expectations, with continued strong growth in the upmarket motion and record net adds in larger customer cohorts. 2. **Conservatism in full-year guidance and changes from prior quarter:** Analysts inquired about potential conservatism in the full-year guidance and reasons for a weaker outlook compared to the previous quarter. Management stated that the guidance does not assume a rebound in performance marketing, accounts for the short-term impact of the 20% workforce reduction, reflects lapping prior pricing actions, and represents a responsible, cautious approach during a period of transition. 3. **AI monetization, impact of new pricing on NRR, and R&D spend:** Analysts pressed on the uncertainty of AI monetization, whether the new "seats and credit" pricing model would be a net benefit or hinder expansion, and its impact on NRR. Management acknowledged it's "still early days" and they are "experimenting a lot," but noted that customers are topping up their AI consumption, indicating a new growth vector beyond just adding seats. Regarding elevated R&D, management stated they invested heavily for the future and don't foresee a significant increase, but it remains a substantial investment, with the strong Israeli shekel also impacting costs. | Revenue SegmentsTotal revenue grew 22% year-over-year. AI ARR doubled from Q1 to Q2 and now represents 17% of net new ARR added in the quarter. Customers with more than $100,000 ARR grew 37%. Customers with more than $500,000 ARR grew 68%. Overall NDR was 109% in Q2. |
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 3 Things Management Is Most Focused On1. **Advancing AI integration and product offerings:** Management is heavily focused on transforming monday.com into an 'AI work platform,' evidenced by the rearchitecture of their core offering, the launch of 'monday AI work platform,' and the acquisition of One AI to bring native voice capabilities. They also noted that approximately 3% of net new ARR in Q1 was driven by AI. 2. **Expanding enterprise momentum and customer retention:** Management highlighted continued growth in the enterprise segment, with 42% of ARR coming from customers with over $50,000 in ARR, a record number of new customers with over $500,000 in ARR, and gross retention reaching historical highs. 3. **Implementing a new consumption-based pricing model:** They introduced a new 'seats plus credits' pricing structure for new customers, aligning payment with the value AI delivers, and plan to allow existing customers to opt-in with incentives. | Call Takeaway & ToneThe overall takeaway of the call is that monday.com delivered a strong Q1 2026, driven by robust enterprise momentum and early, encouraging traction from its AI products. The tone was largely positive and confident, with management emphasizing the company's transformation into an 'AI work platform' and its financial durability. However, there was a degree of caution regarding the immediate financial impact and precise modeling of the new AI-driven consumption pricing, as well as the expected slight decline in NDR due to lapping prior pricing actions. The company is strategically investing in AI and moving upmarket, while managing expectations for the full year. | Prior Quarter'S Y/Y Growth By SegmentIn Q4 2025, total revenue grew 25% year-over-year. | 3 Things Analysts Most Pressed On (And Mgmt Responses)1. **Updated NDR (Net Dollar Retention) guide:** Analysts questioned the updated NDR guide, which implied a slight decline by the end of fiscal year 2026. Management responded that while retention and expansion are positive (gross retention at historical highs, double-digit seat growth in mid-market and enterprise), they are lapping significant pricing actions from 2024 (two years ago in 2025) that increased NDR by 12%, and new adoption is not expected to fully offset this past pricing growth. 2. **New 'seats plus credits' pricing model:** Analysts sought more context on how the new model works, its impact on 2026, and adoption assumptions for existing customers. Management explained it applies to new customers with two vectors of expansion (seats and AI credits), existing customers can opt-in gradually with incentives, and no significant impact on 2026 numbers is assumed yet. They also clarified that seat demand remains strong, and the change is forward-looking to decouple from sole dependence on seats. 3. **AI contribution to ARR and monetization:** Analysts inquired about how AI drives the reported 10% of net new ARR and the monetization strategy for first-party versus third-party agents. Management clarified that the current AI revenue contribution is from existing offerings like AI blocks and 'psychic,' not yet from the newly released agents product. They stated that while external agents can integrate, monday's own agents are optimized for execution and collaboration within their platform, and they are still working through the precise packaging and pricing for One AI, which will be part of the AI credit consumption model. | Revenue SegmentsTotal revenue grew 24% year-over-year. Approximately 3% of net new ARR in Q1 was driven by AI, and new products account for over 11% of total ARR. |
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| About Expanding Eligible Marketmonday.com reported record net additions of $100,000-plus and $500,000-plus customers in Q2, reflecting continued strength in their upmarket motion. Larger customers are a key driver, and the company is deepening these relationships while expanding AI capabilities. AI ARR doubled from Q1 to Q2 and now represents 17% of net new ARR added in the quarter. The new seat and credit pricing model, launched in May, has seen strong early reception, with customers engaging deeply enough with AI products to invest beyond the digital package. The company is sharpening its focus on monday service and monday CRM, each addressing distinct buyers, workflows, and AI opportunities, with dedicated product development and go-to-market motions. Customers with more than $100,000 ARR grew 37% and those with over $500,000 ARR grew 68%. The company is still early in its upmarket motion and sees expansion with existing customers, often landing small and growing quickly. Customers are also looking to consolidate vendors, and monday.com is well-positioned as clients seek platforms for AI solutions. The go-to-market restructure focused on non-quota carriers and downmarket resources to accelerate investment upmarket, including a new 4-deployed engineer model, and leveraging partners for efficient downmarket sales. Double-digit seat growth year-over-year in enterprise customers continues. | About Competitionmonday.com is not trying to win every category but is building an AI workspace for teams with focused products where they aim to lead, removing complexity that was slowing them down. The company benefits from vendor rationalization, as more customers seek to consolidate vendors. They also note that most customers want context around their AI solutions and are deploying on platforms, which positions monday.com favorably. | About The Broader IndustryThe top-of-funnel demand environment remains volatile but is in line with expectations. When moving upmarket, companies are exposed to elongated buying cycles. The development environment has seen significant changes over the past year, impacting products like monday dev. A broader trend is that customers want to adopt AI but often need assistance and guidance on how to deploy these solutions. | Where Things Are Headedmonday.com's strategic shift is to position itself for the future, reinvesting most savings from workforce reduction into people, products, and AI. This involves operating with fewer management layers, smaller teams, and a go-to-market model built around deeper customer partnerships for AI deployment. The company will continue to deepen relationships with larger customers as AI capabilities expand. monday service and monday CRM will operate with dedicated product development, go-to-market motions, and investment roadmaps to achieve category leadership. They aim to build an AI workspace for teams with focused products. Modest pressure on Net Dollar Retention (NDR) is expected in the back half of fiscal year 2026 due to lapping prior pricing actions. Headcount is expected to be down approximately 20% by the end of fiscal year 2026. R&D investment will remain significant but is not expected to increase meaningfully as a percentage of revenue. Operating margin is expected to expand in fiscal year 2027, and top-line growth is anticipated to be positively impacted next year by the restructure, AI expansion, and sales training. The company is accelerating its 4-deployed engineer model to capture opportunities and align resources with high-value opportunities, with ongoing sales team training on AI. monday dev's strategy is being rethought due to changes in the developer environment, leading to less focus on that product currently. Enterprise sales rep headcount is expected to be flat overall. | Updates On ThemeAgentic | Broader Themes EmergingEvolving AI monetization models, AI adoption and implementation challenges requiring customer support, vendor rationalization, and changing developer workflows. | Bullish-Leaning Quotes (Short)Q2 revenue grew 22% year-over-year, while Q2 non-GAAP operating margin expanded to 17%. The record net additions of $100,000-plus and $500,000-plus customers in Q2 reflects the continued strength of our upmarket motion. In July, we crossed $1.5 billion in ARR, a milestone that reflects the durability of our core business even as we reshape the company around AI. AI products adoption continues to accelerate and customers' response to our new direction continue to exceed our expectations. AI ARR doubled from Q1 to Q2 and now represents 17% of net new ARR added in the quarter. Equally encouraging is the early reception to our new seat and credit pricing model launched in May. Our gross retention is also at historical highs. Customers with more than $100,000 ARR grew 37% and customers with more than $500,000 ARR grew 68%. We expect it to expand next year. We are still seeing a double-digit seat growth year-over-year in enterprise. | Bearish-Leaning Quotes (Short)On July 22, we reduced our global workforce by approximately 20%. It was the hardest decision we have made since founding the company. As we move through the back half of fiscal year 2026, we may see some modest pressure on NDR as we lap prior pricing actions taken in fiscal years 2024 and 2025. Operating margin in Q2 had an approximately 210 basis points negative FX impact. We expect headcount to be down approximately 20% at the end of fiscal year 2026. Our guidance does not assume any rebound in performance marketing or top of funnel activity. There is a short-term impact throughout the risk that we took into account when we did the guidance. The Israeli shekel has been getting very strong versus the U.S. dollar. It's still early days, okay? We're still experimenting a lot. We're observing the near-term cost of the 20% workforce. The top of funnel environment remains volatile. Monday dev is still a product that we sell and offer, but definitely because of the changes in the dev environment where a lot of the way developers work has changed over the past year. | Hiringmonday.com reduced its global workforce by approximately 20% on July 22. Total employee headcount was 3,169, a decrease of 42 employees since Q1 2026, and the company expects headcount to be down approximately 20% at the end of fiscal year 2026. Most of the $100 million in annualized cost savings from this reduction will be reinvested into talent, product, and AI. The go-to-market organization restructure primarily focused on non-quota carriers and downmarket resources. The company expects headcount for mid-market and enterprise sales resources to grow for the year, but enterprise sales rep headcount overall is expected to be flat. monday.com is also building and planning to scale a new team of forward-deployed engineers to assist customers with AI product deployment. |
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| About Expanding Eligible Marketmonday.com is seeing sustained demand for its platform as enterprises consolidate their work infrastructure, with 42% of ARR coming from customers with over $50,000 in ARR and a record number of new customers with over $500,000 in ARR. The company's AI product drove approximately 3% of net new ARR in Q1, a figure expected to grow as AI offerings expand and mature. monday.com introduced a new consumption-based pricing structure for new customers, aligning payments with AI value delivered, which allows revenue to expand naturally as AI agents take on more work. The acquisition of One AI will bring native voice capabilities to the AI work platform, extending how agents engage with customers and teams. monday.com observed double-digit growth in both mid-market and enterprise segments for seats, and average contract value (ACV) grew 22% year-over-year. New products now account for over 11% of ARR, with significant cross-sell opportunities, especially in mid-market segments. CRM surpassed $100 million and is growing well in the SMB segment, while service product growth is driven by seat expansion and cross-sell with customer support workflows. | About Competitionmonday.com differentiates itself by stating that while a stand-alone AI tool can automate a task, monday can run an entire operation, leveraging its data advantage from over 250,000 customers. The company is focused on defining what an AI work platform means for businesses rather than defending its current position. Regarding competitors like Claude, monday.com's vision is for agents and people to work together on the same platform, including external agents, by allowing any external agent to sign up and get an account. The company emphasizes that its native agents, built within a work platform, excel at integrating AI into existing workflows and facilitating cooperation among users, distinguishing itself from standalone AI products. | About The Broader IndustryEnterprises are consolidating their work infrastructure, a durable, enterprise-led trend. The top-of-funnel demand environment remains soft, consistent with earlier expectations. AI is significantly improving engineering productivity, leading to a 32% increase in output per developer and a 38% reduction in product time to market since 2025, which monday.com views as an early signal of AI-native engineering. Voice capabilities are becoming increasingly important across almost all products in the industry. | Where Things Are Headedmonday.com expects the 3% net new ARR driven by AI in Q1 to grow as its AI offerings expand and mature. The company has fundamentally shifted its vision from a platform that helps teams manage work to one that actually does the work for them, rebranding its core offering to 'monday AI work platform' and rearchitecting its core around the orchestration of work between humans and AI agents. monday.com plans to allow existing customers to opt into the new consumption-based pricing model, with enterprise customers receiving complementary AI packages to support adoption. The company aims to define what an AI work platform means for businesses and expects continued progress throughout 2026. Headcount is expected to remain largely flat for the remainder of fiscal year 2026 due to AI-driven productivity gains. monday.com anticipates a slight decline in overall net dollar retention (NDR) by the end of fiscal year 2026. The company expects additional costs related to AI computing to increase throughout the year, and its guidance implies some moderation in the second half of the fiscal year. | Updates On ThemeAgentic | Broader Themes EmergingAI Monetization Evolution & Flexible Consumption Models, Democratization of AI development through low-code/no-code platforms. | Bullish-Leaning Quotes (Short)monday.com delivered a strong start to 2026. Q1 revenue grew 24% year-over-year reflecting sustained demand for our platform. We generated a record $49 million in operating profit, demonstrating that our growth is increasingly efficient. Gross retention continued to improve in Q1, reaching historical highs for the company. Enterprise momentum continued to build with 42% of ARR coming from our customers with over $50,000 in ARR. A record number of new customers with over $500,000 in ARR and average contract values continue to expand. Approximately 3% of our net new ARR in Q1 was driven by AI. Since 2025, AI has driven a 32% increase in our output per developer and a 38% reduction in product time to market. We are excited to announce our agreement to acquire One AI. Pipeline is very strong. As a matter of fact, our March was 1 of the strongest months we've ever had. New products account for over 11% of our ARR. CRM, as we said, we suppressed $100 million. | Bearish-Leaning Quotes (Short)We now expect overall NDR to slightly decline by the end of fiscal year 2026. Operating margin in Q1 had an approximately 190 basis points negative FX impact. Overall, the top of funnel environment remains soft. We don't believe that expansion or new adoption will now be enough to offset some of the pricing growth over that we have seen in the past. We expect 1% or 2% of temporary pressure for the upmarket and the metrics for the remainder of fiscal year 2026. We believe there is going to be additional cost regarding computing costs related to AI. Our guidance does imply some moderation in H2. | HiringTotal employee headcount was 3,211, an increase of 56 employees since Q4 '25. For the remainder of fiscal year 2026, monday.com expects headcount to stay largely flat, reflecting the productivity gains AI is already delivering across the organization. |
