Monday.com (MNDY) Stock: Why Investors Dumped Shares Despite Crushing Q3 Earnings

TLDR

• Monday.com reported Q3 2025 revenue of $316.9 million, up 26% year-over-year, beating analyst estimates of $312.3 million
• Earnings per share came in at $1.16, exceeding expectations of $0.88, while non-GAAP operating income hit a record $47.5 million
• Q4 revenue guidance of $328-$330 million fell short of the $333.8 million analyst consensus, causing shares to drop 19% in premarket trading
• The company’s upmarket strategy drove increased demand from larger customers, with new products contributing over 10% of annual recurring revenue
• Full-year 2025 revenue forecast stands at $1.23 billion with adjusted free cash flow expected between $330-$334 million

Monday.com delivered a solid third quarter that checked all the right boxes on paper. Revenue jumped 26% to $316.9 million, crushing Wall Street’s $312.3 million estimate. Earnings per share of $1.16 left the $0.88 consensus in the dust.

monday.com Ltd., MNDY

But the market wasn’t buying it. Shares plunged 19% in premarket trading on Monday morning.

The culprit? A disappointing outlook for the fourth quarter that raised questions about the company’s momentum heading into year-end.

Monday.com projected Q4 revenue between $328 million and $330 million. Analysts were expecting $333.8 million. That miss, though seemingly small, was enough to wipe out enthusiasm from the strong Q3 performance.

The company’s Q3 results showed real operational strength. Non-GAAP operating income reached $47.5 million with a 15% margin. Co-founders and co-CEOs Roy Mann and Eran Zinman pointed to their upmarket strategy as the driver.

New Products Gaining Traction

The company’s push into new territory appears to be working. Monday campaigns, one of several new product launches, has already contributed more than 10% of total annual recurring revenue. That’s a quick win for a company expanding beyond its core workflow management roots.

Larger customers are biting. The number of paid customers with substantial annual recurring revenue grew considerably. This shift toward enterprise clients typically brings more stable, predictable income.

The Numbers That Matter

For the full year 2025, Monday.com maintained its revenue forecast at $1.23 billion, matching consensus estimates. Non-GAAP operating income is expected to land between $167 million and $169 million, translating to a 14% operating margin.

The company also guided for adjusted free cash flow of $330-$334 million. That represents about a 27% margin, showing the business can convert revenue into actual cash.

Q4 non-GAAP operating income is projected at $36-$38 million, with an 11-12% margin. That’s a step down from Q3’s 15% margin, which may have added to investor concerns about the trajectory.

Trading volume for Monday.com averages about 1.4 million shares daily. The company’s market cap stood at $9.63 billion before the premarket sell-off.

The post Monday.com (MNDY) Stock: Why Investors Dumped Shares Despite Crushing Q3 Earnings appeared first on Blockonomi.