Monday.com falls on soft 2027 revenue target

Investing.com -- Monday.com shares fell 3.7% on Wednesday after the company set a 2027 revenue target of $1.8 billion at its investor day, a figure that came in below Wall Street expectations and prompted analysts to trim forecasts.

Management described the $1.8 billion goal as a base case, noting it does not include potential contributions from new AI products such as Monday Vibe and Agents, which are set to launch in 2026. Consensus forecasts had been looking for revenue closer to $1.82 billion.

“This implies a two-year compound annual growth rate (CAGR) of ~21% compared to 2025’s midpoint,” KeyBanc Capital Markets analyst Jackson Ader said in a note.

CFO Eliran Glazer said the company’s new AI features—including a dashboard builder, its vibe coding-based application maker, and a new agent—are designed to both retain existing customers and attract new ones.

“The idea is that it will actually improve retention, create stickiness, and bring more customers to the Monday platform,” he said.

The company noted strong early traction. Its new vibe coding feature, which allows businesses to create customized internal applications without writing code, has garnered engagement from thousands of accounts since going live last week.

“The level of engagement is something that we have not seen, you know, until now,” Glazer added.

At the event, management said that Monday Service, a product launched earlier this year, has reached $7 million in annual recurring revenue (ARR), ahead of KeyBanc’s expectations, while Monday Dev stood at $14 million. Together with CRM, which generates more than $100 million in ARR, the products illustrate the firm’s move to a multi-product, AI-first platform.

Monday.com also expects a lift as it continues to win customers with bigger budgets, Glazer said. The company’s 68 largest accounts each have contracts above $500,000, with an average value above $900,000.

He expects that number to keep growing as Monday.com cross-sells its AI features. Still, only about 6% of its customer base currently uses two or more products, leaving room for expansion.

The company also announced its first-ever share repurchase program, approving an $870 million buyback.

Management guided for gross margins of 85% to 90% by 2027, slightly below today’s levels due to product mix changes.

Following the event, KeyBanc lowered its revenue estimates but lifted margin forecasts, citing efficiency gains and moderated hiring plans.

“No need to hide it, we are lowering our revenue estimates for the next couple years, but it is worth noting that the target excludes contributions from AI products like Vibe and Agents that are either coming soon or launched but far too early to build into revenue targets,” Ader wrote.

The analyst maintained an Overweight rating and a $330 price target, saying “there is upside to that $1.8B number” once AI monetization is factored in.