In every monday.com investor presentation over the past year, AI has been front and center. In the results published this morning, the company again highlighted that ARR from AI products reached $36 million and that its agents passed 6 million interactions. That sounds impressive until you do the math: the company expects about $1.47 billion in revenue this year. $36 million is about 2.5% of that. monday.com's AI is still an add-on, not an engine.
The more important number in the report is net dollar retention, 108%. It means a customer that was on monday.com a year ago now pays about 8% more on average. For fast-growing software companies, that number is the quiet engine, because growth from existing customers costs almost nothing. At 108%, existing customers no longer push the company forward as they once did, and most growth has to come from new customers.
Which brings the second problem. monday.com built itself on efficient digital marketing: ads on Google, YouTube and anywhere a team manager searches for 'a project management tool.' That is exactly the channel AI is eroding. Someone who asks ChatGPT which tool to choose gets an answer, not ten ads. TD Cowen downgraded the stock before the results for exactly that reason, and the company's own guidance, about 14% growth in the fourth quarter, looks like confirmation.
There is also a third threat monday.com prefers not to discuss: pricing. Like most enterprise software companies, monday.com charges per user. If AI agents do part of employees' work, organizations need fewer seats. The company is trying to get ahead of the problem with agents of its own, but every successful agent it sells could make redundant a seat it has already sold.
This does not mean monday.com is in existential trouble. It is profitable, has hundreds of millions of dollars in the bank and a strong brand. But the story it tells, 'AI will bring growth back,' is not yet backed by the numbers. Until AI's share of revenue reaches double digits, and until retention starts to rise, investors will keep judging monday.com by its guidance, and the guidance says slowdown.
