monday.com, one of Israel's best-known software companies, reports third-quarter results today from its weakest position in a long time. The stock has lost tens of percent since the start of the year, and the company itself prepared the market for a slowdown: for the third quarter it guided to revenue of $368 million to $370 million, growth of only 16% to 17%, after 22% in the second quarter. Even that guidance was below analysts' expectations.
To see why it hurts so much, consider what investors bought when they bought monday.com: a story of fast, consistent growth, a company becoming the platform where organizations run all their work. Growth falling from 22% to 16% in one quarter undermines that story. And in the 2026 software market, where every company is judged on whether AI strengthens or replaces it, a slowdown is not just a number. It is a hint at the answer.
monday.com's structural problem is easy to describe and hard to solve: it charges per user. As organizations cut staff, or move some work to AI agents, they need fewer seats. monday.com understands this, which is why it announced in July a cut of about 20% of its workforce and a shift to an AI agent platform. But such a shift takes time, and meanwhile the old model keeps weakening.
What has to happen today? Three things. First: growth must not slow beyond what the company itself forecast, and fourth-quarter guidance must not disappoint. Second: early data showing AI and agent products starting to bring in money, not just serving as an investor slide. Third: evidence that large customers are not cutting usage. If any of the three is missing, the stock's decline may continue.
And what does it mean for Israeli tech? monday.com is perhaps the clearest example of a generation of Israeli software companies built before the AI era and now forced to reinvent themselves on the run. Today's results are a test not only for monday.com but of whether such companies can make the transition without losing what made them successful.
