Monday.com beat expectations, CEOs cite 'operational challenges in the near term' due to strategic shift toward AI
Monday.com beat analyst estimates in the third quarter with earnings of $2.14 per share and 19% revenue growth, raising its annual guidance. However, the stock is falling in pre-market trading after founders warned of 'operational challenges in the near term' due to the strategic shift toward AI.
Monday.com's stock is falling in pre-market trading after the release of its financial results, despite the company significantly beating analyst expectations. In the third quarter, Monday.com reported earnings of $2.14 per share versus an expected $1.37, 19% revenue growth to approximately $378 million, and raised its annual guidance. However, the company's founders and co-CEOs, Roy Mann and Eran Zinman, noted that the strategic move to become an AI company involves 'operational challenges in the near term.' Investors are focusing on this warning, against the backdrop of the 'SaaS apocalypse' that has dropped the company's stock by 40.4% since the beginning of the year. The company laid off 20% of its workforce (about 620 employees) as part of the shift toward focusing on AI products.