monday.com MNDY reported second-quarter 2026 non-GAAP earnings of $1.48 per share, up 35.8% year over year and surpassing the Zacks Consensus Estimate by 29.82%.
Revenues rose 22% to $364.6 million and beat the consensus mark by 2.72%.
The quarter benefited from stronger operating profitability and continued enterprise traction. AI product ARR doubled from the first quarter and represented 17% of net new ARR added during the second quarter.
MNDY Sees Broad AI Product Usage
The company said customers are using AI capabilities across monday Agents, monday Blocks, monday Sidekick and monday Notetaker. Since launch, these products have generated more than 1.7 million agent interactions, 98 million AI block actions, roughly 3 million Sidekick conversations and more than 180,000 Notetaker hours.
Management also highlighted early adoption of its seat-and-credit pricing model launched in May. Following a roughly 20% workforce reduction announced in July, monday.com plans to reinvest most of the savings in people, products and AI while operating with fewer management layers and smaller teams.
monday.com Extends Upmarket Momentum
Paid customers with more than $50,000 in annual recurring revenues, or ARR, reached 4,834, up 31% year over year. Customers above $100,000 in ARR increased 37% to 2,019, while those above $500,000 jumped 68% to 114.
The company added 287 net new customers above the $50,000 ARR threshold, 175 above $100,000 and a record 15 above $500,000 during the quarter. Customers above $50,000, $100,000 and $500,000 now account for 43%, 30% and 7% of total ARR, respectively.
MNDY Retention Supports Customer Expansion
During the second quarter, net dollar retention was 109% across all customers. The rate was 113% for customers with more than 10 users and 115% for customers with more than $50,000 or $100,000 in ARR.
Customers with more than 10 users totaled 65,783, up 6% year over year, and represented 82% of ARR compared with 80% a year earlier. Larger customers continue to be an important driver of the business.
monday.com Expands Operating Margin
Non-GAAP gross margin was 89%, down from 90% in the year-ago quarter. In the reported quarter, non-GAAP operating income increased 35.5% to $61.1 million, while operating margin expanded to 17% from 15%.
Non-GAAP research and development expenses rose 40.1% to $83.0 million. Sales and marketing expenses increased 7.3% to $149.4 million, while general and administrative expenses advanced 15.4% to $30.7 million.
MNDY RPOs Rise as Customer Commitments Extend
At the end of the second quarter, total remaining performance obligations, or RPOs, were $937 million, up 34% year over year. Current RPOs, which represent contracted revenues expected to be recognized within the next 12 months, increased 27% to $750 million.
The company also continued to diversify beyond work management. New products, including monday CRM and campaigns, monday dev and monday service, represented 11.6% of total ARR at the end of the quarter.
MNDY’s Balance Sheet & Cash Flow
As of June 30, 2026, MNDY had Cash and cash equivalents of $853.4 million, while marketable securities were $219.4 million. During the quarter, MNDY repurchased about 2.33 million ordinary shares for roughly $182 million, fully utilizing its $870 million authorized repurchase program.
Net cash provided by operating activities was $55.4 million in the reported quarter, down 17.2% year over year.
Adjusted free cash flow fell 18.3% to $52.3 million, while adjusted free cash flow margin was 14% compared with 21% a year earlier.
MNDY Issues Q3 & 2026 Outlook
For the third quarter of 2026, monday.com expects revenues of $368-$370 million, implying year-over-year growth of 16%-17%. Non-GAAP operating income is projected at $57-$59 million, with an operating margin of roughly 16%.
For 2026, revenues are expected between $1.466 billion and $1.474 billion, representing growth of 19%-20%. Non-GAAP operating income is forecast at $230-$234 million, while adjusted free cash flow is expected between $280 million and $290 million. Management raised its full-year non-GAAP operating margin outlook while maintaining its revenue growth and free cash flow guidance.
MNDY’s Zacks Rank & Stocks to Consider
Currently, monday.com carries a Zacks Rank #3 (Hold).
Kimball Electronics KE, Analog Devices ADI and Nutanix NTNX are among the better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Currently, Kimball Electronics sports a Zacks Rank #1 (Strong Buy), while Analog Devices and Nutanix carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kimball Electronics shares have returned 3.3% in the past six months. KE is scheduled to report its fourth-quarter fiscal 2026 results on Aug. 12.
Analog Devices' shares have gained 14% in the past six months. ADI is scheduled to report its third-quarter fiscal 2026 results on Aug. 19.
Nutanix shares have surged 55.7% in the past six months. NTNX is slated to report its third-quarter fiscal 2026 results on Aug. 26.
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monday.com Ltd. (MNDY): Free Stock Analysis Report
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