monday.com (NASDAQ:MNDY) executives highlighted continued upmarket progress, expanding AI capabilities, and a more cautious near-term outlook as the company reported fourth-quarter and full-year fiscal 2025 results and issued initial guidance for fiscal 2026.
Fiscal 2025 results show strong growth and profitability
Co-CEO Roy Mann said the company delivered “strong disciplined execution,” with revenue up 27% year-over-year in fiscal 2025 and operating margin reaching 14%. CFO Eliran Glazer reported fourth-quarter revenue of $334 million, up 25% from the year-ago quarter, and full-year revenue of $1.232 billion, also up 27%.
Operating income in the fourth quarter was $41.9 million, with a 13% operating margin, which included an approximately 180-basis-point negative foreign exchange impact, primarily due to Israeli shekel appreciation against the U.S. dollar. For fiscal 2025, operating income was $175.3 million, representing a 14% operating margin, with an approximately 110-basis-point FX impact.
Net income was $55.0 million in the fourth quarter, compared with $57.3 million a year earlier. Full-year net income was $233.6 million, up from $183.3 million in fiscal 2024. Diluted EPS was $1.04 in the quarter and $4.40 for the year.
Glazer also disclosed a $61.2 million non-cash income tax benefit recognized in Q4 tied to a deferred tax asset and sustained profitability, noting it was excluded from non-GAAP net income. He added the company may begin paying cash taxes in the near future.
Upmarket momentum offsets “choppy” self-serve demand
Management emphasized continued upmarket traction. Mann said customers with more than $50,000 in ARR represented 41% of total ARR, reflecting expansion within existing accounts and success landing larger customers. He added the company delivered a “record net add” of customers with more than $100,000 in ARR, and customers with more than $500,000 in ARR grew 74% year-over-year.
At the same time, Mann said the company’s no-touch channels remain in a “choppy demand environment,” particularly among smaller customers, which management expects to persist in 2026. He said the cost to acquire and expand self-serve customers increased over the past year and returns have been below historical levels, prompting the company to shift investment toward higher-ROI opportunities focused on larger customers.
During Q&A, Mann and Glazer said the softer dynamics are concentrated in the smallest SMB cohort and not in larger customer opportunities. Glazer said guidance assumes no rebound in performance marketing or top-of-funnel activity, and is built on current conditions.
AI strategy: agents, Vibe, and Sidekick
Co-CEO Eran Zinman described a shift in vision “from helping customers manage work to actually doing the work for them,” saying the company has re-architected its platform over the last five months around three layers of AI value:
- AI Agents (beta) and AI Workflows: designed to let customers create an on-demand workforce of agents that “reason, act, and execute” across workflows.
- Monday Vibe: enabling customers to build applications on top of monday.com data and workflows; Zinman said it is the fastest product in company history to surpass $1 million in ARR.
- AI Sidekick: positioned as the “central intelligence layer” of an account, enabling questions, insights, and actions across data and workflows.
Zinman cited early usage metrics, including more than 77 million actions powered by Monday Blocks and more than 500,000 user messages processed by Sidekick. He said early beta users of AI agents have been “blown away” by its capabilities.
On monetization, Zinman said Sidekick is available to all customers and is offered as a paid add-on for Pro and below packages, while it is included in the Enterprise package. He also said the company plans to integrate Sidekick with third-party tools. Later in the call, CRO Casey George said AI capabilities are embedded in the platform, and that customers like the predictability of per-user pricing, while more compute-intensive workloads are monetized through a credit model.
Executives also discussed Vibe use cases ranging from dashboards and reporting to building “complete, really meaningful, large applications.” Mann said Vibe can help fill gaps for vertical or specialized needs the company might not otherwise develop as standalone features.
Guidance: 2026 outlook reflects caution on no-touch and FX headwinds
Glazer said the company is narrowing its near-term messaging to what it can “execute and deliver with high confidence,” citing the evolving AI landscape and choppy no-touch demand. As a result, he said monday.com will no longer discuss previously provided 2027 targets and will focus on 2026 execution.
For the first quarter of fiscal 2026, the company guided to revenue of $338 million to $340 million (about 20% year-over-year growth) and non-GAAP operating income of $37 million to $39 million (11% to 12% margin), assuming a negative FX impact of 100 to 200 basis points.
For the full year 2026, guidance called for:
- Revenue: $1.452 billion to $1.462 billion (18% to 19% year-over-year growth)
- Non-GAAP operating income: $165 million to $175 million (11% to 12% margin), including a 100 to 200 basis point negative FX impact
- Adjusted free cash flow: $275 million to $290 million (19% to 20% margin), including a 100 to 200 basis point negative FX impact
Glazer and other executives said the guidance is driven primarily by upmarket and enterprise expansion, multi-product adoption, and improved go-to-market efficiency, while assuming continued volatility in performance marketing. Glazer also pointed to FX pressure due to the shekel’s appreciation, noting 55% of headcount is in Israel.
Margins, cash flow, and capital return
Several analysts pressed management on why operating and free cash flow margins appear lower in 2026 guidance versus 2025. Glazer attributed the outlook to FX pressure, prioritization of investment in sales-led growth and AI (which he described as front-loaded costs), and hiring timing effects.
He also said gross margin is expected to be in the high-80% range for 2026, consistent with prior investor day commentary, and later noted that increased AI investment could take gross margin from around 90% toward the mid-80s to high-80s range.
On cash flow, Glazer cited several factors affecting the 2026 free cash flow forecast: FX headwinds, increased investment, lower interest rates (reducing interest income on the company’s cash balance), potential cash taxes as profitability continues, and the impact of share repurchases.
monday.com ended the quarter with $1.5 billion in cash and cash equivalents, down from $1.53 billion at the end of Q3, reflecting $135 million of share repurchases executed during the quarter. Glazer said about $735 million remained available under the existing share purchase authorization.
Headcount finished the year at 3,155, up 137 employees since Q3. Glazer said fiscal 2026 headcount growth is expected in the mid-teens percentage range, with incremental investment primarily directed toward sales and R&D.
About monday.com (NASDAQ:MNDY)
monday.com is a software-as-a-service (SaaS) company that provides a cloud-based Work Operating System (Work OS) designed to help teams plan, organize and track their work. The platform offers customizable workflows that support project management, task delegation, time tracking and collaboration across departments. monday.com’s visual interface enables users to create boards, automations and dashboards to centralize information and streamline processes without requiring extensive coding knowledge.
The company’s product portfolio includes monday Work OS, which can be adapted for use cases ranging from marketing campaign management and sales pipelines to software development sprints and human resources onboarding.
