monday.com Q3 2026: Big Earnings Beat, but AI Pivot Dims Q4

monday.com reported adjusted earnings per share of $2.14 for Q3 2026, beating the $1.37 consensus estimate. Revenue came in at $377.5 million, up 19% year over year and ahead of the $369.2 million estimate, though the revenue outperformance was far more modest.

The earnings beat came primarily from aggressive cost discipline. Sales and marketing expense fell to $149.1 million from $165.8 million a year earlier, and share-based compensation dropped to $30.2 million from $49.9 million. Those savings lifted non-GAAP operating income to $89.4 million, producing a 24% non-GAAP operating margin compared with 15% in the same period a year ago.

Enterprise momentum was a genuine bright spot. Customers spending more than $100,000 in annual recurring revenue grew 33% to 2,127, while those above $500,000 ARR rose 58% to 123. The company's AI products, including AI credits, agents, and its vibe offering, reached $36 million in AI ARR, and monday agents surpassed 6 million interactions in less than two quarters.

The quarter was not without complications. The results included $9.96 million in restructuring charges tied to a 2026 Restructuring Plan and an $18 million non-cash charitable contribution to the monday.com Foundation, both excluded from the non-GAAP figures. Operating cash flow fell sharply to $20.4 million from $95.1 million, and cash and equivalents declined to $869.6 million from $1,503.1 million, partly reflecting share repurchases.

Looking ahead, management guided Q4 revenue to $380 to $382 million, representing roughly 14% year-over-year growth, a deceleration from Q3's 19%. Non-GAAP operating margin is guided to compress to approximately 18% as the company accelerates investment in enterprise go-to-market, product development, and AI. Co-CEOs Roy Mann and Eran Zinman acknowledged that the AI-first transition introduces "near-term operational headwinds" while expressing confidence in the strategic direction.

For the full year 2026, management guided revenue of $1,473 to $1,475 million at roughly 20% growth, with non-GAAP operating income of $268 to $270 million and adjusted free cash flow of $282 to $288 million. All profit and cash flow guidance carries an assumed negative foreign exchange impact of 100 to 200 basis points. The story heading into Q4 is essentially whether the AI investment cycle pays off quickly enough to offset the near-term margin give-back.