Monday.com Exceeds Q2 Revenue Estimates, Reports 26.6% YoY Growth, but Faces Headwinds in Acquiring Smaller Customers

Monday.com reported Q2 CY2025 results exceeding market expectations, with revenue up 26.6% YoY to $299 million and a non-GAAP profit of $1.09 per share, 27% above analysts' consensus estimates. The company expects next quarter's revenue to be around $312 million and slightly lifted its full-year revenue guidance to $1.23 billion. Despite this, the market responded negatively due to concerns around operating margin compression and uncertainty in customer acquisition channels.

Project management software maker Monday.com (NASDAQ:MNDY) reported its Q2 CY2025 results, exceeding market expectations with revenue up 26.6% year-on-year (YoY) to $299 million. The company's non-GAAP profit per share of $1.09 was 27% above analysts' consensus estimates. Monday.com expects next quarter's revenue to be around $312 million and has slightly lifted its full-year revenue guidance to $1.23 billion. However, the market responded negatively to the results, with the stock trading down 19% to $201 immediately following the announcement [1].

The company's strong performance was driven by robust year-on-year revenue growth of 26.6%, which topped Wall Street estimates by 1.8%. This growth was supported by a record number of new customers, with 243 enterprise customers paying more than $50,000 annually added to reach a total of 3,702. Monday.com's net revenue retention rate of 115% indicates that the company is successfully retaining its existing customers, demonstrating customer satisfaction and value [2].

Despite the positive results, the market's reaction was driven by concerns around operating margin compression and uncertainty in customer acquisition channels. The company's operating margin declined to -3.9% from 0.8% in the same quarter last year, raising concerns about the sustainability of its growth. Additionally, the company's free cash flow margin also decreased to 20.1% from 38.8% in the previous quarter, indicating a potential slowdown in cash generation [3].

Looking ahead, Monday.com expects Q3 revenue between $311 million and $313 million, with a full-year forecast of $1.224 billion to $1.229 billion. The company anticipates Q3 non-GAAP operating income of $34 million to $36 million and a full-year adjusted free cash flow of $320 million to $326 million. The company's strong performance in the quarter was attributed to AI innovation and enterprise demand, with CRM growth also contributing to the results [3].

In conclusion, while Monday.com reported strong Q2 CY2025 results, the market's reaction was driven by concerns around operating margin compression and uncertainty in customer acquisition channels. The company's performance in the quarter was driven by AI innovation, enterprise demand, and CRM growth, with a strong customer retention rate. Investors should closely monitor the company's ability to address these concerns and sustain its growth momentum.

References:
[1] https://finance.yahoo.com/news/monday-com-nasdaq-mndy-exceeds-112139649.html
[2] https://finance.yahoo.com/news/monday-com-mndy-reports-q2-030307186.html
[3] https://www.tradingview.com/news/reuters.com,2025:newsml_PLXCC72A5:0-software-company-monday-com-beats-q2-revenue-estimates/