monday.com (MNDY) Stock Revenue Climbs While Profitability Tightens

monday.com stock slipped about 1.3% today, a modest pullback for a company often treated as a high growth workflow pure play. The headline is not the share price. The headline is that Q2 revenue reached US$364.6m while net income excluding one off items came in at US$3.5m, a sharp step down from the prior two quarters. For a software platform that trades on its margin story as much as its top line, this profit squeeze is what will shape how investors read the rest of the earnings detail.

Is monday.com now a rare bargain on quality growth, or is the margin squeeze a warning sign hidden behind headline revenue? See how NasdaqGS:MNDY stacks up against its peers in the full valuation analysis for monday.com

Q2 2026 Earnings Summary

• Revenue, Q2 2026 vs. Q2 2025: US$364.6m vs. US$299.0m (up about 22%)
• Net Income (Excl. Extra Items), Q2 2026 vs. Q2 2025: US$3.5m vs. US$1.6m (up strongly from a low profit base)
• Basic EPS, Q2 2026 vs. Q2 2025: US$0.08 vs. US$0.03 (up from a very low per share profit)
• Annual Recurring Revenue (ARR), July 2026 vs. prior period: Above US$1.5b in July 2026 (crossed a new ARR threshold for monday.com)

Prefer clear charts instead of another wall of earnings tables and footnotes? Get a full visual view of monday.com, with a focus on its valuation story, in the company report for monday.com.

monday.com bull case tied to AI and enterprise

Bulls argue that monday.com is evolving into an AI first work platform with growing enterprise weight and improving efficiency. Q2 gives some backing to that view. Revenue of US$365m with 17% non GAAP operating margin and around 89% gross margin shows the business can support AI investment without giving up profitability. AI ARR (annual recurring revenue) doubled quarter on quarter and reached about 17% of net new ARR, which points to early customer willingness to pay for monday agents and credits. Enterprise traction looks real, with customers above US$100k ARR growing 37% and those above US$500k ARR growing 68%, plus gross retention described as at historical highs. The completed US$870m buyback and US$1.07b cash position also support the idea of a financially solid platform that can fund the AI push.

Bear case focuses on growth, margins and execution risk

Bears focus on slowing growth, margin pressure and execution risk around the AI pivot. Q2 results give them fresh material. Net income excluding extra items was US$3.5m, which is a sharp step down from the prior two quarters, even as non GAAP operating margin is guided at about 16% for FY26 compared with 17% in Q2. Revenue guidance of 16% to 17% for Q3 and 19% to 20% for FY26 points to more modest growth than earlier periods. Management explicitly highlights weaker top of funnel, NDR easing to about 108% and early stage AI pricing uncertainty. The roughly 20% workforce reduction and full use of the repurchase authorization remove a support tool and add transition risk just as some analysts flag slowing net new ARR and softer new product KPIs.

After margin guidance cuts, workforce reductions and one-off items, is this just surface noise or a deeper pattern? Review the independent risk analysis for monday.com which shows 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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