monday.com reported its third-quarter 2026 results this morning, and on paper it was a good quarter: revenue reached $377.5 million, up 19% from a year earlier and above the roughly $369 million analysts expected. Profitability also beat forecasts. Even so, the stock fell about 6% in premarket trading on Nasdaq.
The reason is the guidance. monday.com expects fourth-quarter revenue of $380 million to $382 million, below the roughly $385.7 million analysts expected. The midpoint implies year-over-year growth of only about 14%, a sharp drop from the 19% pace of the quarter just ended. For the full year, the company expects revenue of $1.473 billion to $1.475 billion, growth of about 20%.
Management warned of near-term 'operational headwinds' tied to the company's shift to an AI-first product. According to the company, annual recurring revenue (ARR) from AI products reached $36 million, and its AI agents passed 6 million interactions in less than two quarters. Net dollar retention (NDR) stood at 108%, meaning existing customers increased their spending by about 8% a year.
The drop was not a complete surprise. Before the results, TD Cowen downgraded the stock from Buy to Hold, arguing that AI threatens the marketing channels monday.com relies on, mainly paid search and organic search traffic. As more people ask a chatbot instead of searching Google, new customers arrive less easily and at higher cost. The stock also fell on weak guidance after its second-quarter results in August.
The bottom line: monday.com is still growing faster than most software companies its size, and it is profitable. But investors buy growth stocks for the future, and the future management itself is painting is a slowdown. A drop from 19% to 14% in one quarter is not a small wobble, and until monday.com shows that AI brings in new customers rather than just being added on to the product, it is hard to see what will restore the old growth rate.
