Shares of monday.com Ltd (MNDY) experienced a significant decline, closing down 20.8% at $77.63 on Monday, February 10, 2026, following the company's latest financial update. The work-management software provider revised its forward-looking projections, which fell short of market expectations, leading to a sharp sell-off. In early premarket trading on Tuesday, the stock showed minimal movement, hovering near the $78 level as investors assessed the new guidance.
The company reported fourth-quarter revenue of $333.9 million, representing a 25% increase year-over-year. Non-GAAP diluted earnings per share for the quarter stood at $1.04. However, the focus shifted to the updated outlook for 2026, where monday.com anticipates revenue in the range of $1.452 billion to $1.462 billion. The projected non-GAAP operating income is between $165 million and $175 million, implying an operating margin of 11% to 12%. This forecast was below the consensus estimates among Wall Street analysts, contributing to the negative market reaction.
During the earnings conference call, Chief Financial Officer Eliran Glazer announced that the company is suspending its previously communicated 2027 financial targets, which included a revenue goal of $1.8 billion. Executives cited increased uncertainty, particularly within the self-serve or 'no-touch' customer acquisition channel. This digital funnel, which caters to smaller clients without direct sales involvement, has exhibited what management described as 'choppiness,' impacting growth projections.
The abrupt guidance reset underscores broader challenges within the software-as-a-service (SaaS) sector, where investor sentiment has recently soured. monday.com, often viewed as a bellwether for subscription software demand, faced immediate punishment for signs of softening growth. Analyst commentary highlighted that the current market environment for cloud-based software names is particularly unforgiving, with any deviation from growth expectations met with swift selling pressure.
monday.com operates in a competitive landscape alongside rivals such as Asana (ASAN), Smartsheet (SMAR), and Atlassian (TEAM). Analysts note that challenges in paid search and other digital marketing avenues are weighing on the efficiency of its self-serve operations. The company continues to invest heavily in product development and sales initiatives, but near-term pressures, including foreign exchange volatility, persist.
Additional financial details revealed that customers contributing over $50,000 in annual recurring revenue (ARR) now represent 41% of the total ARR base, indicating a growing focus on larger clients. The company also repurchased $135 million worth of its shares during the fourth quarter, with $735 million remaining under its current authorization.
Looking ahead, market participants are monitoring whether the stock stabilizes when regular trading resumes. Furthermore, upcoming economic data, specifically the U.S. Consumer Price Index (CPI) report scheduled for release on February 13, 2026, could influence broader market sentiment and interest rate expectations, which are critical for high-growth technology stocks like monday.com.
The company's decision to shelve its 2027 targets reflects a strategic pause to gain 'more certainty' about the evolving business landscape, especially as artificial intelligence begins to alter how enterprise software is purchased and utilized. This episode highlights the heightened scrutiny and volatility facing growth-oriented tech firms in the current investment climate.