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Monday.com Stock Plunges 27% as “Conservative” Outlook Spooks Wall Street
When your report card says “above average” but your parents still ask why it wasn’t an A+, you know how Monday.com feels today.
Shares of Monday.com Ltd. (NASDAQ: MNDY) crashed nearly 27% on Monday morning despite posting strong second-quarter earnings. The collaborative work management software maker beat Wall Street expectations on revenue, earnings, billings, and free cash flow—yet a cautious outlook for the rest of 2025 had investors heading for the exits.
Q2: The Good News
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Revenue: $299M (+27% YoY), beating estimates by about 1.9%.
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Non-GAAP EPS: $1.09 (+16% YoY), also ahead of consensus.
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Retention: Net dollar retention rate hit 111% overall, and 117% for large customers with more than $100K ARR.
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Enterprise Growth: Management highlighted “rapidly growing demand” from enterprise clients, suggesting continued momentum in moving upmarket.
Citi analysts noted Monday.com outperformed expectations by:
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$5.5M in revenue
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$11.6M in EBIT
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$6.8M in billings
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$10.2M in free cash flow
On paper, this should’ve been a victory lap. But in SaaS land, it’s not the beat—it’s the guidance that makes or breaks the stock.
The Problem: Guidance Was “Meh”
For full-year 2025, management now sees:
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Revenue: $1.224B–$1.229B (midpoint $1.227B) vs. $1.223B prior midpoint
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EBIT: $154M–$158M vs. $144M–$150M prior
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Free Cash Flow: $320M–$326M vs. $310M–$316M prior
For Q3 2025, revenue guidance came in at $311M–$313M (midpoint $312M), essentially in line with consensus. That implies slowing growth—24–25% YoY vs. 27% in Q2.
Citi’s takeaway? The raise was “likely conservative,” but still too small to impress a market that was expecting a bigger post-beat upgrade.
Why the Stock Got Hammered
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High-valuation SaaS stocks live and die by growth expectations. Even a minor deceleration can cause a major repricing.
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The raise-to-beat ratio disappointed. Monday.com’s midpoint revenue increase was only ~$4M on a $1.2B base—hardly a sign of explosive acceleration.
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Macro patience is thin. Investors are less forgiving when rates are still elevated, and multiples can compress quickly.
Long-Term Story Still Intact?
Monday.com’s enterprise moat is widening, retention rates remain solid, and profitability is improving. This isn’t a “broken” growth story—it’s a market reaction to the idea that growth may normalize before re-accelerating.
Think of it as your favorite coffee shop saying they’ll still serve great coffee, just not opening a new location on every corner this year. The core product is fine, but the expansion pace is a little slower than the hype implied.
Bottom Line:
Monday.com delivered strong Q2 numbers, but the guidance wasn’t spicy enough for Wall Street’s palate. Until growth guidance perks up—or macro sentiment shifts—shares may remain under multiple pressure despite a fundamentally healthy business.
DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.
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Michael Lazenby is the Editor-in-Chief and Founding Partner of MacroHint. He studied economics, business, and government at UT Austin and has hedge fund experience.