monday.com reported a fourth-quarter revenue of US$333.88 million and a net income of US$76.69 million, marking a successful performance in its core operations. Despite these strong results, the company's outlook for 2026 is cautious, projecting revenue between US$1.452 billion and US$1.462 billion, influenced by rising competition from artificial intelligence and a decline in demand from small businesses.
Management has opted to discontinue long-term revenue targets, reflecting a strategic shift in response to the evolving software market, which is increasingly impacted by AI advancements from competitors like Microsoft and Salesforce. This change emphasizes the need for upcoming quarterly reports to shed light on AI adoption and customer behavior.
While recent performance has bolstered confidence in monday.com's multi-product approach, analysts warn of potential earnings declines in the coming years, particularly concerning its reliance on smaller clients. The company's recent share buyback of 884,000 shares for US$135 million highlights a new focus on capital allocation, indicating a significant adjustment in its growth strategy amidst these challenges.