Monday.Com Ltd

Shares of monday.com fell about 9% premarket on Monday after the company issued a third-quarter revenue outlook below analyst estimates. The software provider reported second-quarter revenue of $364.6 million, up about 22% year-over-year, and non-GAAP earnings per share of $1.48, both beating consensus. For the third quarter, monday.com guided revenue between $368 million and $370 million, with a midpoint of $369 million, compared to a consensus estimate of $372.85 million. The company maintained its full-year 2026 revenue forecast of $1.466 billion to $1.474 billion, in line with the $1.47 billion consensus. The net dollar retention rate was 109%, and total remaining performance obligations rose 34% to $937 million.

Several U.S. companies are looking to expand their workforce after months of holding back, signaling a potential shift in hiring trends even as artificial intelligence continues to drive job cuts. U.S. tech firms have cut nearly 140,000 jobs this year, with Amazon, Oracle, Meta, and Microsoft accounting for about 50,000 of those cuts, according to a Financial Times analysis. However, Robert Half CEO Keith Waddell noted that AI's impacts on the job market are proving more benign than feared, while Booz Allen Hamilton is accelerating hiring after last year's layoffs, CSX expects modest headcount increases, Alphabet plans to keep hiring in AI and Cloud, Ford rehired hundreds of experienced engineers, and IBM will triple its U.S. entry-level hiring this year. Gartner predicted that up to 30% of roles displaced by AI will be rehired by 2029, often at a higher cost. Still, companies including Amazon, Uber, and monday.com continue to announce AI-driven layoffs.

Monday.com is laying off about 20% of its workforce, or just over 600 employees, as part of a restructuring plan tied to its AI-driven growth strategy. The Tel Aviv-based work management software company disclosed the cuts in an SEC filing, with co-founder Eran Zinman telling employees the move was not made to reduce costs or replace people with AI but to adapt the organization to an AI-first vision. Monday.com expects $45 million to $55 million in net restructuring charges and still projects up to 20% year-over-year revenue growth for 2026. The layoffs add to a wave of tech job cuts this year, with U.S. tech companies slashing nearly 140,000 jobs since the start of 2026, according to Financial Times analysis, as firms including Amazon, Oracle, Meta, and Microsoft funnel hundreds of billions of dollars into AI data center buildouts. The FT also found that companies citing AI as a factor in job cuts have underperformed the Nasdaq by almost 10% in the 30 trading days following their announcements, though AI-focused companies like Anthropic and OpenAI are hiring rapidly and some firms are shifting headcount into AI roles.

Shares of Atlassian, monday.com, and Agilysys fell sharply after IBM issued a second-quarter earnings warning that signaled enterprise customers may be cutting software budgets to fund hardware purchases. IBM pre-announced adjusted earnings of $2.93 per share on $17.2 billion in revenue, missing Wall Street estimates of $3.01 and $17.86 billion, respectively, with CEO Arvind Krishna citing a sudden reprioritization of enterprise budgets in late June toward servers, storage, and memory chips. Atlassian dropped 6.7%, monday.com fell 5.4%, and Agilysys declined 4.3% as part of a broader sell-off in legacy workflow and application software names, while cybersecurity platforms rallied. The divergence highlights market concern that massive capital outlays for artificial intelligence hardware are cannibalizing traditional IT budgets, pressuring software-as-a-service valuations. Atlassian is now down 42.1% year-to-date and trading 55.8% below its 52-week high of $203 from July 2025.

Monday.com stock has fallen more than 40% in 2026, driven by fears that artificial intelligence could disrupt its business model. The company reported first-quarter revenue of $351.3 million, up 24% year-over-year, and raised its full-year revenue guidance to between $1.466 billion and $1.474 billion. Despite the sell-off, the stock trades at a price-to-sales ratio below 3 times and a forward price-to-earnings ratio below 19 times, with revenue still projected to grow nearly 20%. The author views the stock as a buying opportunity at these depressed levels.

monday.com Chief Revenue Officer George James Case sold 838 ordinary shares for approximately $66,000 on June 15, 2026, according to an SEC filing. The sale was part of a transaction where Case exercised 1,858 options and immediately sold 838 shares to cover tax obligations, resulting in a 45.1% reduction in his direct holdings to 1,020 shares. The company, which offers the cloud-based monday.com Work OS platform, reported trailing twelve-month revenue of $1.30 billion and net income of $119.35 million, though its stock has declined 76.8% over the past year. The filing indicates the sale was mandatory and does not reflect a change in Case's conviction in the company.

Productivity software stocks reported a satisfactory first quarter, with aggregate revenues beating analyst consensus estimates by 1.7% while next-quarter revenue guidance was in line. monday.com posted revenue of $351.3 million, up 24.5% year on year and exceeding expectations by 3.6%, though its stock fell 3.7% since the report. SoundHound AI delivered the fastest revenue growth among the 16 tracked peers, with revenue of $44.2 million rising 51.7% year on year and beating estimates by 3.4%, yet its shares dropped 33.1%. Pegasystems was the weakest performer, with revenue declining 9.6% year on year to $430 million, missing estimates by 7.3%, and its stock tumbled 23.4%. RingCentral met expectations with revenue of $644.2 million, up 5.3%, but its stock declined 21%, while UiPath topped estimates by 5.2% with revenue of $418.4 million, up 17.3%, yet its shares fell 10.9%. On average, the group's share prices are down 8.9% since their latest earnings results.

monday.com shares have fallen 52.4% over the past six months and now trade at $69.40. The company's annual recurring revenue reached $1.41 billion in the first quarter, with year-on-year growth averaging 25.5% over the last four quarters. Its gross margin averaged an elite 89.1% over the past year, leaving roughly $89.05 for every $100 in revenue to fund selling, marketing, and research and development. The customer acquisition cost payback period stood at 30.8 months, indicating efficient new customer acquisition. The stock currently trades at 2.2 times forward price-to-sales.