Summary of monday.com Q1 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $351 million, up 24% year-over-year.

Operating Profit: $49 million, an increase from $40.8 million in Q1 2025.

Net Income: $56 million, compared to $58.4 million in the prior year.

Adjusted Free Cash Flow: $102.8 million, with a margin of 29%.

Gross Margin: 89%, slightly down from 90% year-over-year.

Net Dollar Retention (NDR): 110% in Q1, with expectations for a slight decline by year-end.

Employee Headcount: 3,211, with a flat outlook for the remainder of FY 2026.

2Strategic Updates and Business Highlights

AI Integration: Approximately 10% of new ARR in Q1 was driven by AI products, with expectations for growth as AI offerings mature.

New Pricing Model: Introduction of a "seats plus credits" pricing structure aimed at aligning costs with AI usage, allowing for consumption-based billing.

Acquisition of One AI: Enhances monday.com’s capabilities with native voice functionalities.

Enterprise Growth: 42% of ARR now comes from customers with over $50,000 in ARR, with a record number of new customers exceeding $500,000 in ARR.

3Forward Guidance and Outlook

Q2 Revenue Guidance: Expected between $354 million and $356 million, representing 18% to 19% year-over-year growth.

Full Year 2026 Revenue Guidance: Projected between $1.466 billion and $1.475 billion, indicating 19% to 20% growth.

Operating Income Guidance: For the full year, expected to be between $185 million and $191 million, with an operating margin around 13%.

4Bad News, Challenges, or Points of Concern

NDR Outlook: While gross retention is at historical highs, a slight decline in NDR is anticipated due to lapping previous pricing actions.

FX Impact: Approximately 190 basis points negative impact on operating margin due to currency fluctuations, particularly from the appreciation of the Israeli shekel.

Top of Funnel Demand: Remains soft, with cautious management of performance marketing.

AI Costs: Increased computing costs related to AI may pressure gross margins, which are expected to stabilize in the mid-80s.

5Notable Q&A Insights

Customer Reception to New Pricing: Customers are seeking transparency and control over AI credit usage, which is being integrated into the platform.

Performance Marketing Shift: The transition to targeting upmarket customers is ongoing, with expectations for improved performance in the future.

Adoption of AI Products: Current revenue from AI does not yet include contributions from newly released agent products, indicating potential for future growth.

Enterprise Customer Migration: Existing customers will have the option to opt into the new pricing model without significant disruption. Overall, monday.com reported a solid start to 2026, driven by strong revenue growth and strategic shifts towards AI integration, despite facing some challenges related to currency fluctuations and market demand.