You know that feeling when you ace a test but still somehow disappoint your parents? That’s basically what happened to Monday.com (NASDAQ: MNDY) today. The project management software company just delivered what should have been a victory lap of an earnings report, but Wall Street decided to throw a tantrum anyway, sending the stock down a brutal 26%.
Let’s break down this financial soap opera, shall we?
The Good News (That Apparently Wasn’t Good Enough)
Monday.com absolutely crushed their Q2 2025 numbers. We’re talking about revenue of $299 million versus analyst expectations of $293.7 million – that’s a solid 1.8% beat with 26.6% year-over-year growth. Not too shabby for a company named after the most universally despised day of the week.
But wait, there’s more! Their adjusted earnings per share came in at $1.09, absolutely demolishing the $0.86 estimate by 27%. Their adjusted operating income hit $45.09 million against expectations of $33.55 million – a whopping 34.4% beat. By any reasonable measure, this should have been champagne-popping time.
So Why the Stock Market Meltdown?
Here’s where things get interesting (and by interesting, I mean frustrating if you’re a shareholder). The market apparently decided to focus on the glass being half-empty rather than overflowing.
First up: guidance anxiety. While Monday.com slightly raised their full-year revenue guidance to $1.23 billion from $1.22 billion, their Q3 guidance of $312 million was just “close to” analyst estimates – not the blowout number investors were apparently hoping for. In today’s market, meeting expectations is basically the equivalent of failing.
Then there’s the margin squeeze. Their operating margin dropped to -3.9% from 0.8% in the same quarter last year. Free cash flow margin also took a hit, falling to 20.1% from 38.8% in the previous quarter. Translation: they’re spending more to grow, which makes some investors nervous.
The Reality Check
Let’s put this in perspective. Monday.com has grown revenue at a 38.9% compound annual growth rate over the past three years. They’ve got 3,702 customers paying more than $50,000 annually, and their net revenue retention rate of 115% means existing customers are spending more over time – a key indicator of product stickiness.
CFO Eliran Glazer summed it up perfectly: “This quarter demonstrated our relentless focus on driving highly efficient growth at scale.” But apparently, Wall Street wanted growth at ludicrous speed instead.
The Bottom Line
This is a classic case of the market being the market – sometimes rational, sometimes having a complete emotional breakdown over perfectly decent results. Monday.com delivered strong fundamentals but got punished for not being superhuman.
For long-term investors, this might actually be an opportunity. After all, the underlying business is solid, growing, and profitable. Sometimes the best buying opportunities come when good companies have bad days for questionable reasons.
Just remember: in the stock market, even Mondays can be better than they seem.