Shares of Monday.com (MNDY +3.06%) were sliding today after the cloud software company topped estimates in its fourth-quarter earnings report, but offered disappointing guidance for the first quarter in part due to weakness in its "self-serve" segment.
Monday, which provides customer relationship management (CRM) and project management software for businesses, is one of many software-as-a-service (SaaS) stocks under pressure from AI innovations like Anthropic's Claude Code that could disrupt workflow-related software.
As of noon, Monday.com stock was down 22.4% on the news.
Image source: Getty Images.
Monday.com gets a case of the Mondays
Revenue in the fourth quarter rose 25% to $333.9 million, which topped estimates at $329.7 million.
The company also posted record net adds of customers with more than $100,000 in annual recurring revenue and said Monday Vibe, its AI-powered vibe-coding tool which uses prompts instead of code, is the fastest product to top $1 million in annual recurring revenue (ARR) in its history.
Adjusted earnings per share slipped from $1.08 to $1.04 as spending ramped up on research and development, but still beat the consensus at $0.92. Co-CEOs Roy Mann and Eran Zinman touted the company's "expanding our product portfolio and seeing strong adoption of AI products," as well as its progress with larger customers.
NASDAQ: MNDY
Key Data Points
Guidance was a red flag
Monday.com needed to give investors strong guidance to reassure them after the AI-driven sell-off, and it didn't do that.
For the first quarter, it called for revenue growth to slow to 20%, to $338 million-$340 million, below the consensus of $342.9 million.
Its full-year guidance also disappointed, calling for revenue of $1.452 billion-$1.462 billion, up 18%-19%, also below the consensus at $1.48 billion.
The weak guidance reflected challenges with lower-end customer acquisition, which could be related to new AI competition.
Monday.com is now down 70% over the last year, but given the narrative in the software sector, a turnaround will require the company to convince investors that its business model won't be disrupted by AI. For now, that doesn't look easy.
