Israeli work operating systems company monday.com (Nasdaq: MNDY) share price is down 28% on Wall Street, giving a market cap of $9.2 billion. This despite beating the analysts' consensus in its second quarter 2025 results, providing similar guidance to the analysts' consensus for the third quarter and raising its annual guidance. Clearly investors had been expecting more.
monday.com sees 2025 revenue of $1.224-1.229 billion, up 26% from 2024 and higher than the previous guidance of $1.22-1.226 billion. Free cash flow will reach $320-326 million, compared with the previous forecast of $310-316 million, and operating income will be $154-158 million, a profitability rate of 13%, compared with the previous forecast of $144-150 million and a rate of 12%. The forecast for the third quarter is similar to market forecasts, but the mid-range of the revenue forecast is lower than the analyst consensus, with the company expecting revenue of $311-313 million and non-GAAP operating income of $34-36 million. The revenue growth rate in the third quarter will be lower than in the second quarter and will reach 24-25%.
In the second quarter of 2025, the company's revenue grew 26.6% to $299 million, about $5 million higher than analysts' forecasts. GAAP net profit was $1.6 million and non-GAAP net profit was $58.3 million ($1.09 per share), significantly higher than analysts' forecasts.
Lucid Capital, which manages tech investment funds, said that the stock is falling due to weakness in the small and medium-sized business (SMB) market. "The blame falls on Google's AI Overview." They add that Google's change significantly hurt traffic from Google, including from small and medium-sized businesses. "Let's remember that CRM (customer relationship management product) is Monday's growth engine, and the vast majority of Monday's customers are small or micro-businesses," Lucid wrote. "This change by Google forced Monday and other companies to pour more money into sponsored advertising in the quarter."
Analysts are optimistic
"Q2 marked another strong quarter for monday.com, with continued revenue growth and rapidly growing demand for our broad product suite, particularly from enterprise customers," said monday.com co-founders and co-CEOs Roy Mann and Eran Zinman. "We continue to see evidence that our commitment to AI innovation is delivering real value for customers, and we’re proud to be leading a new era of work execution. By taking the platform’s flexibility to the next level, our new AI capabilities address core challenges across all our product areas and allow users to focus on their most critical strategic priorities."
At the end of last week Monday.com had a market cap of $12.75 billion, up 20.6% since the start of the year. Most analysts covering Monday's stock are positive, with a small number neutral. The average price target for the stock reflects a 23.8% premium on the last closing price before the report was released, although some analysts may update their price targets after the report.
Published by Globes, Israel business news - en.globes.co.il - on August 11, 2025.
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