By Hamza Faisal

monday.com beat Wall Street's expectations in the third quarter, but the work management platform's shares fell after its outlook for the final three months of the year came in softer than analysts had hoped.

The company reported revenue of $377.5 million for the quarter ended September 30, up 19 percent from a year earlier and ahead of the $369.2 million analysts had expected. It also delivered record non-GAAP operating income of $89.4 million, a 24 percent margin, as larger customers continued to expand their use of the platform.

Investors, however, focused on what comes next. monday.com guided fourth-quarter revenue of $380 million to $382 million, growth of about 14 percent — a clear step down from the third quarter's pace and below the $385.7 million consensus estimate. The shares dropped after the results were released on Monday.

An AI-first rebuild with short-term costs

Co-founders and co-CEOs Roy Mann and Eran Zinman said the company is in the middle of a fundamental shift to become an AI-first business, and that the change is creating friction in the near term.

"Our third quarter showed both the strength of our foundation and the work ahead," Mann and Zinman said in a statement. "Our business is undergoing a fundamental evolution, and we took significant steps this quarter to become an AI-first company. While we remain highly confident in this strategic path, an initiative of this scope introduces near-term operational headwinds, and we are committed to executing with discipline as we work through them."

The AI business is still small but growing fast. AI products, including AI credits, agents and the company's vibe-coding tools, reached $36 million in annual recurring revenue during the quarter, and monday's AI agents have passed 6 million interactions in less than two quarters since launch. AI product revenue had already doubled sequentially in the second quarter, and total ARR crossed $1.5 billion in July.

Enterprise customers keep spending

The enterprise side of the business remained the main engine. Customers spending more than $100,000 a year rose 33 percent to 2,127 and now account for 31 percent of annual recurring revenue. Billings reached $374.8 million, up 17.1 percent year over year.

That enterprise momentum is central to monday.com's pitch: as AI features spread across its work management tools, larger organisations are buying in deeper rather than cutting back. The company has also been investing in enterprise sales, product development and AI, which management said its outlook reflects.

What to watch in the fourth quarter

For the full year, monday.com expects revenue of $1,473 million to $1,475 million, growth of about 20 percent. Fourth-quarter non-GAAP operating income is expected at $68 million to $70 million, an 18 percent margin, with currency movements expected to weigh on results by one to two percentage points.

The question for investors is whether the AI transition pays off quickly enough to offset the slower growth it is causing now. monday.com's September Elevate '26 programme, which let customers build their own AI agents, was an early test of that bet — and the fourth quarter will show whether the agents and AI credits turn into the kind of recurring revenue that can carry the company back toward faster growth.