MNDY Stock Falls After Missing Q3 Expectations — Co-CEOs Say Early Results From Restructuring ‘Reinforce Our Conviction’

• Monday.com co-CEOs Roy Mann and Eran Zinman struck an optimistic note, saying the second-quarter performance has reinforced conviction that the company’s strategy is working and that it is time to move faster.
• The company cut its global workforce by approximately 20% last month, which Mann described during the post-earnings call with analysts as “the hardest decision we have made since founding the company.”
• He said that the restructuring is intended to create fewer management layers and smaller teams, while giving employees greater decision-making authority.

Shares of Monday.com (MNDY) were headed for the worst single-day fall in six months in Monday’s opening trade after the software company issued a weaker-than-expected revenue outlook for the third quarter (Q3).

The company posted earnings per share (EPS) of $1.48, beating the $1.11 consensus estimate, according to Fiscal.ai data. Revenue came in at $365 million, ahead of expectations of $356 million.

Monday.com shares were down nearly 11% in Monday’s opening trade. MNDY was among the top trending tickers on Stocktwits at the time of writing.

MNDY’s Q3 Outlook Disappoints Investors, Monday.com Defends Workforce Cut

Monday.com’s third-quarter (Q3) revenue forecast of $368 million to $370 million missed Wall Street expectations of $373 million.

The company’s co-CEOs Roy Mann and Eran Zinman struck an optimistic note, saying that Monday.com’s Q2 performance has reinforced conviction that its strategy is working and that it is time to move faster.

“We made the difficult decision to restructure our organization, sharpen our product portfolio, and commit fully to the AI Work Platform in order to capture the largest opportunity we have ever seen in software,” Mann and Zinman said.

Last month, the company cut its global workforce by approximately 20%, which Mann described during the post-earnings call with analysts as “the hardest decision we have made since founding the company.”

He said that the restructuring is intended to create fewer management layers and smaller teams, while giving employees greater decision-making authority and changing the company’s go-to-market model as it focuses more heavily on AI.

MNDY Bets Big On AI Restructuring

Mann said the company has spent the past nine months undergoing its “most meaningful strategic shift” yet, moving from software that helps people manage work to a platform where employees and AI agents work together.

“More telling than any single metric is that AI products adoption continues to accelerate, and customers respond to our new direction,” Mann said, adding that customer response to the company’s AI products continues to exceed its expectations.

The company said AI product Annual Recurring Revenue (ARR) doubled from the first quarter (Q1) and accounted for 17% of net new ARR in Q2, highlighting the growing role of AI in its business. Mann said Monday.com crossed $1.5 billion in ARR in July, highlighting the durability of the company’s core business even as it reshapes itself around AI.

The company also added more than 105,000 customers in Q2, according to Mann, as it continues to deepen relationships with larger customers.

Mann said Monday.com’s goal is to use the restructuring to move faster on that opportunity, with savings from the workforce reduction being reinvested in people, products and AI.

What Retail Traders Think Of MNDY Stock

Retail sentiment on Stocktwits around Monday.com trended in the ‘extremely bullish’ territory, with message volumes at ‘high’ levels at the time of writing.

MNDY stock is down 44% year-to-date and 66% over the past 12 months. The iShares Core MSCI EAFE ETF (IEFA) is up 19% over the past 12 months, while the iShares MSCI EAFE Small-Cap ETF (SCZ) is up 15%.

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