monday.com shares dropped 6.1% after the company signaled deceleration risks ahead, primarily through a cautious outlook that highlights modest pressure on net dollar retention (NDR) amid a challenging pricing backdrop and ongoing restructuring impacts.
- Q2 revenue rose 22% year-over-year to $365 million, supported by milestone ARR of $1.5 billion and strong AI adoption.
- Non-GAAP operating margin improved to 17%, despite gross margin slipping to 89% from 90% last year and a 210 bps negative FX impact.
- Research and development expenses increased to 23% of revenue, reflecting heavy reinvestment in AI and product development.
- Sales and marketing expenses declined as a percentage of revenue to 41%, but headcount reduction of roughly 20% signals cost rationalization amid strategic shifts.
- Management flagged potential modest pressure on NDR in second half of fiscal 2026 due to lapping previous pricing increases, indicating potential growth headwinds.
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