Work management platform monday.com (NASDAQ:MNDY) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 24.6% year on year to $333.9 million. On the other hand, next quarter’s revenue guidance of $339 million was less impressive, coming in 1.1% below analysts’ estimates. Its non-GAAP profit of $1.04 per share was 13.2% above analysts’ consensus estimates.
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monday.com (MNDY) Q4 CY2025 Highlights:
- Revenue: $333.9 million vs analyst estimates of $329.5 million (24.6% year-on-year growth, 1.3% beat)
- Adjusted EPS: $1.04 vs analyst estimates of $0.92 (13.2% beat)
- Adjusted Operating Income: $41.93 million vs analyst estimates of $37.43 million (12.6% margin, 12% beat)
- Revenue Guidance for Q1 CY2026 is $339 million at the midpoint, below analyst estimates of $342.7 million
- Operating Margin: 0.7%, down from 3.6% in the same quarter last year
- Customers: 4,281 customers paying more than $50,000 annually
- Net Revenue Retention Rate: 114%, down from 115% in the previous quarter
- Annual Recurring Revenue: $1.34 billion (24.6% year-on-year growth, beat)
- Billings: $337.1 million at quarter end, up 21.2% year on year
- Market Capitalization: $4.00 billion
StockStory’s Take
monday.com’s fourth quarter results in 2025 were met with a significant negative market reaction, with investors responding to a mix of strong top-line growth and concerns about profitability and future momentum. Management attributed the revenue gains primarily to continued expansion among enterprise customers and rapid adoption of new AI-driven products like Monday Vibe and Sidekick. However, operating margins declined as the company increased investment in research and development and navigated persistent challenges among smaller, self-serve customers. Co-CEO Roy Mann acknowledged that "the cost to acquire and expand self-serve customers have increased over the past year, and the returns on those investments have been below historical levels."
Looking ahead to 2026, management's guidance reflects both optimism for upmarket growth and a cautious stance on near-term uncertainties, especially in the smaller customer segment. The company expects enterprise expansion, AI product adoption, and disciplined investment to be the main drivers of growth, while continued volatility in the self-serve channel and foreign exchange pressures may weigh on margins. CFO Eliran Glazer explained the approach, stating, "Guidance for now reflects what we believe we can execute against with high confidence. It doesn’t assume any rebirth in performance marketing or top-of-funnel activity, and it’s based on current conditions with growth driven primarily by upmarket and enterprise customer expansion, multiproduct adoption, and disciplined investment."
Key Insights from Management’s Remarks
Management highlighted that Q4 growth was primarily powered by enterprise customer traction and the rapid scaling of AI-focused products, but also noted ongoing headwinds in the small business segment and increased operating costs.
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Enterprise customer momentum: Larger organizations increasingly standardized on monday.com, with a notable rise in customers spending over $50,000 annually and strong expansion in the $100,000+ cohort. Management emphasized high retention and renewal rates in this segment, supporting durable revenue streams.
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AI-driven product adoption: The launch of Monday Vibe and Sidekick, both built on AI technology, saw strong early uptake. Monday Vibe surpassed $1 million in annual recurring revenue faster than any previous product, and Sidekick is being rolled out as a paid add-on, signaling meaningful monetization potential.
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Choppy self-serve segment: The company faced continued challenges in acquiring and expanding smaller, self-serve customers, leading to a strategic shift in marketing spend towards higher ROI channels focused on larger accounts. Management does not expect the self-serve channel to improve in the near term.
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Higher investment in R&D and AI: Research and development expenses rose as the company increased headcount and prioritized AI platform enhancements. These investments, although pressuring margins, are seen as essential for maintaining product leadership and supporting future growth.
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Foreign exchange and margin pressure: The appreciation of the Israeli shekel versus the US dollar had a significant negative impact on operating and free cash flow margins, as over half the company’s workforce is based in Israel. Management also cited front-loaded costs related to sales-led growth and AI as factors affecting profitability.
Drivers of Future Performance
monday.com’s outlook for 2026 is driven by enterprise expansion, AI product monetization, and ongoing margin headwinds from FX and investment.
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Upmarket and multiproduct focus: Management expects most growth to come from expanding relationships with large enterprise customers and increased adoption of its suite of products—especially AI-powered offerings like Monday Vibe and Sidekick. This strategy is designed to offset weaker demand among smaller customers.
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Margin headwinds and investment: The company anticipates lower non-GAAP operating margins due to continued investment in AI and sales-led growth, as well as a strong Israeli shekel reducing profitability. Headcount growth is planned in the mid-teens, primarily in sales and R&D roles.
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Self-serve channel uncertainty: Persistent volatility in performance marketing and self-serve channels is likely to remain a drag on growth. Management does not expect any near-term improvement in this segment, focusing instead on extracting more value from the existing customer base and upmarket opportunities.
Catalysts in Upcoming Quarters
In the coming quarters, our analyst team will be focused on (1) the pace of adoption and monetization of Monday Vibe and Sidekick, (2) stabilization or further deterioration in the self-serve/small business channel, and (3) the impact of FX movements and continued investment on operating margins. Execution on upmarket expansion and the ability to translate AI product traction into recurring revenue will also be critical markers of progress.
monday.com currently trades at $78.10, down from $98 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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