monday.comMNDY

The company is cutting about 20 percent of its workforce, or roughly 620 people. Management described this as a move to lean into an AI-driven strategy, where software agents and autonomous tools play a larger role in how its customers work.

This is a significant shift for a company that has historically spent heavily on marketing and sales to grow. While the move could lower costs and help the company stay profitable, it also introduces risk. The business is betting that it can maintain its growth with fewer people by relying more on automation, which is a major change to its core operations.

Source: Proactive Investors

Key highlights

• Enterprise customer base surging: The number of customers paying more than $100,000 in annual recurring revenue grew 39% to 1,844 accounts, a faster pace than the overall revenue growth of 24% for the quarter. This shift toward larger corporate clients is important because these customers generally stay longer and spend more over time.
• Large accounts growing fastest: The company reported its strongest growth in its highest-value segment, as the number of customers paying over $500,000 annually jumped 74% to 99 accounts. These massive contracts now represent 6% of the company's total annual recurring revenue, up from 5% a year ago.
• Efficiency gains from AI: Management noted that internal AI productivity tools are allowing the business to grow without increasing headcount at the same rate, helping to lift the GAAP operating margin to 6% from 3% last year. This means the company is keeping more of its sales as profit even while investing in new products.
• Stock buyback reducing shares: The company spent $553 million to buy back approximately 7,269,000 of its own shares during the quarter, which helps increase the ownership stake for remaining investors. There is still $182 million left in the current authorized plan to continue these purchases.
• Revenue and cash outlook: For the full year 2026, the company expects revenue between $1.466 billion and $1.474 billion, which would be growth of 19% to 20% over last year. Management also guided for adjusted free cash flow, which is the cash left over after paying for operations and equipment, to be between $280 million and $290 million.

Our take: A very strong quarter that shows the business is successfully moving upmarket. While total revenue growth is slowing to a 24% pace, the 74% surge in the largest customer accounts is a great trade-off. This shift toward bigger, more stable corporate clients significantly strengthens the long-term case for the stock.