Monday.com beats forecasts, but Wall Street is unimpressed: shares fall 7%

In depth

Israeli software company Monday.com reported revenue of about $380 million in the third quarter, up 19%, beating forecasts. Adjusted operating income nearly doubled, and the operating margin reached a record 24%. The company's revenue comes mainly from subscriptions from enterprise customers.

The fourth-quarter forecast points to growth of only 14%, and investors on Wall Street are not impressed by the figure. The shares fell about 7% in trading, and in early trading they were down about 6%. The company expects growth to slow in the last quarter of the year, and the CEO stressed that the transition to an artificial intelligence company involves operational challenges.

The company's annual revenue from AI products reached a run rate of $36 million. At the same time, the company is laying off about 600 employees and trying to reinvent itself with AI solutions. Management raised its annual growth forecast, but investors are focused on the challenges and the expected slowdown.