monday.com's 20% layoffs saved $100M and lifted margins to a record, but executives admit they hurt sales
What's the deal? monday.com posted record profitability for the third quarter of 2026 after cutting about 20% of its workforce, but executives said on the 9 November earnings call that the disruption hurt sales and will weigh on growth into 2027.
The numbers: Revenue rose 19% to $377.5M, ahead of guidance, and the non-GAAP operating margin hit a record 24% (15% a year earlier), according to the company's results release. Headcount fell by 690 to 2,479 at the end of September. CFO Eliran GlazerDealroom has a profile for this one. Try Dealroom → said on the call, as reported by CTech, that the layoffs saved about $100M, which the company plans mostly to reinvest in AI and employee retention. Q4 revenue guidance of $380M to $382M implies growth of about 14%, with non-GAAP operating margin guided to about 18%; net dollar retention is expected to slip to about 107% from 108%. Full-year revenue is guided at $1,473M to $1,475M, about 20% growth. monday.com paid $47.2M in cash on restructuring in the quarter.
The hangover: CRO Casey George said the layoffs caused "disruption and some distraction" that lingered longer than expected. Co-CEO Eran ZinmanDealroom has a profile for this one. Try Dealroom → also pointed to pressure in the small-business market and longer sales cycles as customers work out how AI fits their business. An experiment putting about 25% of the marketing budget into "agentic" customer acquisition "didn't convert as much as we wished", and money is shifting back to events, field marketing and sales.
The AI bet: AI ARR reached $36M, mostly from credits bought on top of seat subscriptions, and over 30% of customers paying more than $50,000 a year buy AI credits. monday.com is launching Frontier, a service staffed by forward-deployed engineers, and will keep hiring for it and for sales in 2027. The company ended the quarter with $1.1B in cash and marketable securities.
Read more: CTech · monday.com Q3 2026 results
