Monday.com ( MNDY ) stock dropped on Monday after it posted second-quarter results.

The company reported a quarterly revenue growth of 27% year-on-year (Y/Y) to $299.01 million, beating the analyst consensus estimate of $293.54 million. 

The project management software company’s adjusted EPS of $1.09 beat the analyst consensus estimate of 86 cents.

Also Read: Monday.com’s Strong Q1, Big Customer Growth, High Margins Drive Bullish Wall Street Outlook

Monday.com ( MNDY ) makes money from selling subscriptions to customers to access its cloud-based Work OS platform. 

The net dollar retention rate was 111% and 115% for customers with more than ten users.

The number of paid customers with over $50,000 in annual recurring revenue (ARR) rose 36% Y/Y to 3,702. The adjusted operating margin decreased 100 bps to 15%.

In the quarter, Monday.com ( MNDY ) generated an operating cash flow of $66.84 million compared to $55.79 million a year ago.

It generated $64.09 million in adjusted free cash flow, compared to $50.82 million a year ago, and ended the quarter with $1.65 billion in cash and equivalents.

Monday.com ( MNDY ) co-founders and co-CEOs Roy Mann and Eran Zinman reported revenue growth accelerating and enterprise demand for the company’s broad product suite expanding rapidly. They highlighted how the company’s AI innovation is delivering measurable value. They said that by enhancing platform flexibility, the new AI capabilities address core challenges across all product areas and help users prioritize their most critical strategic initiatives.

Outlook

Monday.com ( MNDY ) expects fiscal third-quarter 2025 revenue of $311.00 million-$313.00 million against the analyst consensus estimate of $312.95 million and an adjusted operating margin of 11%-12%.

Monday.com ( MNDY ) expects 2025 revenue of $1.224 billion-$1.229 billion (prior $1.220 billion-$1.226 billion), against the analyst consensus estimate of $1.220 billion, and an adjusted operating margin of approximately 13%.

The stock gained over 5% year-to-date.

Price Action: Monday.com ( MNDY ) stock is trading lower by 18.7% to $201.72 premarket at last check Monday.

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