monday.com: Record Q2, Stock Falls 8% on Guidance
monday.com reported Q2 2026 revenue of $365 million, up 22%, with a record 100,000-plus net new customers and ARR crossing $1.5 billion in July. MNDY fell roughly 8% as Q3 guidance of $368-370 million
monday.com: Record Q2, Stock Falls 8% on Guidance
NEW YORK, August 11, The 8% selloff in monday.com Ltd. (MNDY) on August 10 misprices the setup: the market sold the deceleration narrative while leaving in place a 15.9x forward P/E that is the cheapest AI-adjacent software multiple in the peer group by a wide margin. The specific falsifier is Q3 AI ARR share, if it retreats below the 17% of net new ARR it hit in Q2, the deceleration is structural; if it holds or expands, management sandbagged guidance and 19.5% short interest becomes the mechanical tailwind.
Every Q2 Metric Points the Same Direction
monday.com Ltd. (MNDY), the Tel Aviv-based Work OS spanning project management (monday work management), sales cycles (monday CRM), agile development (monday dev), and service desks (monday service), posted Q2 2026 numbers that left no ambiguity. Revenue of $365 million grew 22% year over year. Adjusted EPS of $1.48 grew 35.8%. Operating income reached $61.1 million on a margin of 17%, two points above Q2 2025. The company added more than 100,000 net new customers in the quarter, a record, pushing the total past 500,000. Net Dollar Retention of 109% confirms existing accounts are expanding. Total ARR crossed $1.5 billion in July. The AI layer accelerated sharply: AI ARR doubled from Q1 to Q2 and represented 17% of net new ARR, the highest disclosed share to date.
The Deceleration Is Already In the Multiple
The problem is forward guidance. Q3 revenue of $368-370 million implies year-over-year growth of 16-17%, a deceleration from Q2's 22% pace that landed below analyst expectations. Markets on August 10 assigned more weight to that forward number than to the Q2 beat, and the logic is coherent: a company decelerating into the mid-teens deserves a compressed multiple. What the reaction missed is that the multiple is already compressed. At 15.9x forward P/E, MNDY trades at a steeper discount to GitLab (39.6x) than the growth gap justifies, and below Duolingo (17.9x) and Asana (19.6x) despite 89% gross margins. The separately flagged 20% workforce cut adds ambiguity: it could reflect margin-protecting discipline ahead of a reacceleration, or management's private read that the deceleration is more durable than the guide implies.
AI ARR Share Is the Falsifier
For the bull case to close, AI ARR as a percent of net new ARR must hold at or above 17% in Q3. A Q1-to-Q2 doubling is a real acceleration, not a rounding error; whether it continues is the only data point that resolves the debate between guidance-is-conservative and deceleration-is-structural. If AI ARR share expands in Q3, the analyst consensus target of $109.25, implying 23% upside from $88.62, gains credibility, and Goldman Sachs's disclosed 6.6% stake adds institutional weight to that re-rating. If it contracts, the bear case firms up and the 15.9x multiple has further to compress. At current levels, the asymmetry favors longs; Q3 AI ARR share is the single number that decides whether the guidance was a sandbag or a signal.
HOW MNDY STACKS UP, data at publish
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| MNDY | $3.7B | 15.9x | -48.5% |
| GTLB | $6.9B | 39.6x | +3.8% |
| GLBE | $6.9B | 21.2x | +21.1% |
| BILL | $4.9B | 14.6x | +26.2% |
| DUOL | $6.4B | 17.9x | -57.5% |
| ASAN | $2.2B | 19.6x | -27.9% |
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Basis Report is independent research for informational purposes. It is not investment advice and not a recommendation to buy or sell any security.
Basis Report is independent research for informational purposes. It is not investment advice and not a recommendation to buy or sell any security.
monday.com reported a strong Q2 2026 beat on August 10 — revenue up 22%, AI ARR doubled, a record 100,000-plus net customer additions — yet the stock fell roughly 8% as Q3 revenue guidance of $368-370M implied growth of only 16-17%, a sharp deceleration that came in below analyst expectations.