Monday.com's stock shed around 20.8% after the company’s revenue outlook came in below estimates.
The estimated revenue is between US$388 million and $340 million in the current quarter, below the $343 million expected by analysts. For the full year, the company expects revenues between $1.452 and $1.462, while estimates expect $1.48 million.
This comes as software stocks have sold off in recent weeks amid rising fears of AI disruption and worries that new agentic tools could replace them.
So far this year, the iShares Expanded Tech-Software Sector ETF (IGV) has plummeted 22%, and Monday.com has already lost about half its value.
The company has also shed over three-quarters of its market value from its November 2021 high.
Management defended the company’s market position and highlighted new AI capabilities being implemented, such as agents and a vibe feature, to improve conversion and engagement.
“We don’t see any impact currently from any AI company, and we’re shifting our product, regardless, to be more AI native,” co-CEO and co-founder Eran Zinman said during an earnings call.
Zinman also said the company has pivoted messaging around ads and on its homepage to become more AI-focused.
Despite this, the company’s management said it expects a volatile market this year due to near-term margin pressure from foreign exchange rates.
During its fourth quarter, the Israeli-based cloud platform reported earnings of $1.04 per share, beating the 92 cents per share LSEG expectations. Revenue also grew 25% year-over-year to $33.9 million, rising above analyst estimates of $329.6 million.
Monday.com forecast operating income of $165 million to $175 million for the year, versus a FactSet estimate of $220.2 million.
At the time of writing, Monday.com (NASDAQ: MNDY) stocks dropped 20.79% to $77.63 but rose 0.41% in after-market trading to $77.95. Its market cap is $3.94 billion.
