TLDR
- Q3 revenue hit $316.9 million, up 26% year-over-year, beating the $312.3 million estimate
- Earnings per share of $1.16 crushed analyst expectations of $0.88
- Q4 revenue guidance of $328-$330 million missed the $333.8 million consensus forecast
- Shares dropped 19% in premarket trading despite strong Q3 performance
- New products now contribute over 10% of annual recurring revenue
Monday.com delivered impressive third-quarter results that beat Wall Street expectations across the board. But investors weren’t celebrating. Instead, they hit the sell button hard.
The stock tumbled 19% in premarket trading Monday morning. The reason? A Q4 revenue forecast that came in below what analysts wanted to see.
Third-quarter revenue reached $316.9 million, marking a 26% jump from the same period last year. That beat the analyst consensus of $312.3 million. Earnings per share landed at $1.16, crushing the $0.88 estimate by 32%.
Non-GAAP operating income climbed to $47.5 million with a 15% operating margin. That’s the highest operating profit the company has ever posted.
The Guidance Problem
Here’s where things went sideways. Monday.com guided for fourth-quarter revenue between $328 million and $330 million. Wall Street wanted $333.8 million.
The miss might look small on paper. But in the software world, even slight guidance misses can trigger major sell-offs. Investors interpret conservative forecasts as a warning sign about future growth.
Co-founders and co-CEOs Roy Mann and Eran Zinman defended their strategy. “This quarter’s results reflect the strength of our execution and the continued success of our strategy to move upmarket while expanding our product suite,” they stated.
The company’s push toward larger enterprise customers appears to be paying off. The number of paid customers with substantial annual recurring revenue grew considerably during the quarter.
Product Expansion Delivers Results
Monday.com’s new product launches are gaining real traction. Monday campaigns and other recent additions now account for more than 10% of total annual recurring revenue. That’s a quick ramp for products still in their early stages.
CFO Eliran Glazer emphasized the profitability story. “We delivered our highest-ever non-GAAP operating profit this quarter, underscoring our focus on efficient, profitable growth.”
For Q4, the company projected non-GAAP operating income of $36-$38 million. That implies an 11-12% operating margin, down from Q3’s 15% margin.
Full-year 2025 revenue guidance remained at $1.23 billion, matching analyst expectations. Non-GAAP operating income is expected between $167 million and $169 million, translating to a 14% operating margin for the year.
The company also forecast adjusted free cash flow of $330-$334 million, representing roughly a 27% margin. That demonstrates strong cash conversion from revenue.
What Analysts Are Saying
Technical indicators suggested possible resistance ahead even before Monday’s guidance miss triggered the premarket decline.
Monday.com’s average daily trading volume runs about 1.4 million shares. The company’s market cap stood at $9.63 billion before the premarket sell-off erased billions in value.
Q4 revenue guidance of $328-$330 million fell short of the $333.8 million consensus, sending Monday.com shares down 19% despite beating Q3 estimates with $316.9 million revenue.
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