monday.com Q4 2025 monday.com Ltd Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 monday.com Ltd Earnings Call
Fourth quarter and fiscal year 2025 earnings conference call.
Operator: Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. I would like to turn the call over to monday.com's Vice President of Investor Relations, Mr. Byron Stephen. Please go ahead.
I would like to turn the call over to monday.com vice president of investor relations Mr. Byron Steven. Please go ahead.
Byron Stephen: Hello everyone, and thank you for joining us on today's conference call to discuss the financial results for monday.com's fourth quarter and fiscal year 2025. Joining me today are Roy Mann and Eran Zinman, Co-CEOs of monday.com; Eliran Glazer, monday.com CFO; and Casey George, monday.com CRO. We released our results for the fourth quarter and fiscal year 2025 earlier today. You can find our quarterly shareholder letter, along with our investor presentation and a replay of today's webcast under the news and events section of our IR website at irmonday.com. Certain statements made on the call today will be forward-looking statements, which reflect management's best judgment based on the currently available information. These statements involve risk and uncertainties that may cause actual results to differ from our expectations.
Hello everyone, and thank you for joining us. On today's conference call to discuss the financial results. From monday.com fourth quarter and fiscal year 2025
Joining me today are Roy Mann and Aeron zimman Coosa money.com.
Eleron Glaser monday.com CFO in case you George monday.com cro.
We released our results for the fourth quarter of fiscal year 2025 earlier today.
You can find our quarterly shareholder letter.
Along with our investor presentation, and a replay of today's webcast under the news and events section of our IR website at IR, monday.com.
Speaker #2: I would like to turn the call over to monday.com's Vice President of Investor Relations, Mr. Byron Stephen. Please go ahead.
Certain statements made on the call today will be forward-looking statements which reflect Management's best judgment based on the currently available information.
Byron Stephen: Hello everyone, and thank you for joining us on today's conference call to discuss the financial results for monday.com's fourth quarter and fiscal year 2025. Joining me today are Roy Mann and Eran Zinman, Co-CEOs of monday.com; Eliran Glazer, monday.com CFO; and Casey George, monday.com CRO. We released our results for the fourth quarter and fiscal year 2025 earlier today. You can find our quarterly shareholder letter, along with our investor presentation and a replay of today's webcast under the news and events section of our IR website at irmonday.com. Certain statements made on the call today will be forward-looking statements, which reflect management's best judgment based on the currently available information. These statements involve risk and uncertainties that may cause actual results to differ from our expectations.
Speaker #3: Everyone, thank you for joining us on today's conference call to discuss the financial results for monday.com's fourth quarter and fiscal year 2025.
These statements involve risk and uncertainties that may cause actual results to differ from our expectations.
Byron Stephen: Please refer to our earnings release for more information on the specific factors that could cause actual results to differ materially from our forward-looking statements. Additionally, non-GAAP financial measures will be discussed on the call. Reconciliations to the most directly comparable GAAP financial measures are available in the earnings release and the earnings presentation for today's call, which are posted on our investor relations website. Now, let me turn the call over to Roy.
Speaker #3: Joining me today are Roy Mann, monday.com; Eliran Glazer, CFO; and Eran Zinman, Co-CEO of monday.com; and Casey George, monday.com CRO. We released our results for the fourth quarter and fiscal year 2025 earlier today.
Please refer to our earnings release for more information on the specific factors that could cause actual results to differ materially from our forward-looking statements.
Additionally, non-gaap Financial measures will be discussed on the call.
Speaker #3: You can find our quarterly shareholder letter along with our investor news in the news and events section of our IR website at ir.monday.com. Certain statements made on the call today will be forward-looking statements.
Reconciliations to the most directly comparable, gaap, Financial measures are available in the earnings release and the earnings presentation, for today's call, which are posted on our investor relations website.
Now, let me turn the call over to Roy.
Roy Mann: Thank you, Byron, and thank you everyone for joining us today. As we reflect on the past year, we are proud of the progress monday.com has made across every dimension of the business. We delivered another year of strong disciplined execution, with revenue growing 27% year-over-year, and operating margin reaching 14%. These results underscore the durability of our model, the strength of our go-to-market engine, and our ability to scale profitably while continuing to invest in the long term. In 2025, we continue to make meaningful progress, winning further upmarket. Larger customers are increasingly standardizing on monday.com to support more complex, critical workflows across their organizations. Customers with more than 50,000 in ARR now represent 41% of total ARR, reflecting strong expansion within existing accounts and success in landing larger, more strategic customers.
Speaker #3: These statements reflect management's best judgment based on current information and involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our earnings release for more information on the specific factors that could cause actual results to differ materially from our forward-looking statements.
Thank you, Byron. And thank you everyone for joining us today as we reflect on the past year, we are proud of the progress. Monday.com has made across every dimension of the business. With delivered another year of strong disciplined execution, with Revenue growing 27% year-over-year and operating margin reaching 14%
Byron Stephen: Please refer to our earnings release for more information on the specific factors that could cause actual results to differ materially from our forward-looking statements. Additionally, Non-GAAP financial measures will be discussed on the call. Reconciliations to the most directly comparable GAAP financial measures are available in the earnings release and the earnings presentation for today's call, which are posted on our investor relations website. Now, let me turn the call over to Roy.
Speaker #3: non-GAAP financial measures will be discussed on the Additionally, available information. These call. Reconciliations to the most directly comparable GAAP financial measures are available in the earnings release and the earnings presentation for today's call.
This results underscore the durability of our model, the strength of our go-to Market engine and our ability to scale profitably while continuing to invest in the long term.
Speaker #3: which are posted on our investor relations website. Now, let me turn the call over to
In 2025, we continue to make meaningful progress, winning further up Market, larger. Customers are increasingly standardizing on monday.com to support more complex critical. Workflows across their organizations
Speaker #4: Thank you, Byron, and thank you, everyone, for joining us today. As we reflect on the past year, we are proud of the progress monday.com has made across every dimension of the business.
Eliran Glazer: Thank you, Byron, and thank you everyone for joining us today. As we reflect on the past year, we are proud of the progress monday.com has made across every dimension of the business. We delivered another year of strong disciplined execution, with revenue growing 27% year-over-year and operating margin reaching 14%. These results underscore the durability of our model, the strength of our go-to-market engine, and our ability to scale profitably while continuing to invest in the long term. In 2025, we continue to make meaningful progress, winning further upmarket. Larger customers are increasingly standardizing on monday.com to support more complex, critical workflows across their organizations. Customers with more than $50,000 in ARR now represent 41% of total ARR, reflecting strong expansion within existing accounts and success in landing larger, more strategic customers.
Speaker #4: We delivered another year of strong disciplined execution with revenue growing 27% year over year and operating margin reaching 14%. These results underscore the durability of our model, the strength of our go-to-market engine, and our ability to scale profitably while continuing to invest in the long term.
customers with more than 50k in ARR. Now, represent 41% of total error reflecting strong expansion. Within existing accounts and success in landing larger more strategic customers.
Roy Mann: At the high end, we delivered a record net add of customers with over 100,000+ in ARR, and customers with over 500,000 in ARR grew 74% year-over-year, underscoring our ability to support enterprise-scale deployments. At the same time, no-touch channels continue to operate in a choppy demand environment, particularly among the smaller customers, which we expect to persist in 2026. What this means in practical terms is that the cost to acquire and expand self-serve customers has increased over the past year, and the returns on those investments have been below historical levels. We do not see the same dynamic in our touch business, which has continued to accelerate in this past year. In response, we continue to shift investment to higher ROI opportunities that drive demand and success for larger customers.
At the high end, we delivered a record, net adds of customers with over 100k Plus in ARR and customers with over 500k in ARR group 74% year-over-year underscoring. Our ability to support Enterprise scale. Deployments
Speaker #4: In 2025, we continue to make meaningful progress, winning further up market. Larger customers are increasingly standardizing on monday.com to support more across their organizations.
At the same time, no touch channels continue to operate in a choppy demand environment, particularly among the smaller customers, which we expect to persist in 2026.
Speaker #4: Customers with more than $50K in ARR now represent 41% of total ARR, reflecting strong expansion within existing accounts and success in landing larger, more strategic customers.
What this means in Practical terms is that the cost to acquire and expand self-serve customers have been increased over the past year and the Returns on those Investments have been below historical levels.
Speaker #4: At the high end, we delivered a record net adds of customers with over $100K plus in ARR. And customers with over $500K grew 74% year over year.
Eliran Glazer: At the high end, we delivered a record net adds of customers with over 100,000+ in ARR, and customers with over 500,000 in ARR grew 74% year-over-year, underscoring our ability to support enterprise-scale deployments. At the same time, no-touch channels continue to operate in a choppy demand environment, particularly among the smaller customers, which we expect to persist in 2026. What this means in practical terms is that the cost to acquire and expand self-serve customers has increased over the past year, and the returns on those investments have been below historical levels. We do not see the same dynamic in our touch business, which have continued to accelerate in this past year. In response, we continue to shift investment to higher ROI opportunities that drive demand and success for larger customers.
We do not see the same dynamic in our touch business which have continued to accelerate in this past year.
In response, we continue to shift investment to higher Roi opportunities that drive demand and success for larger customers.
Roy Mann: In addition, we continue to meaningfully improve the entire customer buying process, leveraging AI agents to improve conversion, adoption, and engagement of all our customers. Now, let me turn it over to Eran to walk you through some of the significant progress we've made in our AI-driven products during the quarter.
Speaker #4: Underscoring our ability to support enterprise-scale deployments. At the same time, no-touch channels continue to operate in a choppy demand environment, particularly among the smaller customers, which we expect to persist in 2026.
In addition, we continue to meaningfully improve the entire customer. Buying process, leveraging, AI agents to improve conversion adoption and engagement of all our customers.
Speaker #4: What this means in practical terms is that the cost to acquire and expand self-serve customers has increased over the past year. And the returns on those investments have been complex, with critical workflows below historical levels.
Now, let me turn into a virtual run to walk you through some of the significant progress. We've made in our AI driven products during the quarter,
Thank you, Roy.
Eran Zinman: Thank you, Roy. During our investor day in September 2025, we've shown the fundamental shift in monday.com vision, from helping customers manage work to actually doing the work for them. Over the last five months, we've executed relentlessly against that vision. This was not an incremental change. We've meaningfully re-architected the core of our platform and redefined what our products do for customers. Today, monday.com is evolving into an AI-powered work execution platform built around three distant layers of AI value: first, AI agents, which is now in beta, and AI workflows. These allow customers to create an on-demand workforce of AI agents that can reason, act, and execute across their workflows, effectively enabling businesses to scale output without scaling headcount. Second is mondayDB. Over the past few months, mondayDB has taken a major leap forward.
During our invested day in September 2025.
We've shared the fundamental shift in monday.com vision.
Speaker #4: We do not see the same dynamic in our touch business, which has continued to accelerate in this past year. In response, we continue to shift investment to higher ROI for larger customers.
From helping customers manage work to actually doing the work for them.
Over the last 5 months, we've executed relentlessly against that vision.
This was not an incremental change.
Speaker #4: In addition, we continue to meaningfully improve the entire customer buying process, leveraging AI agents to improve engagement of all our customers. Now, let me turn it over to Eran to walk you through some of the updates in our AI-driven products—conversion, adoption, and...
Eliran Glazer: In addition, we continue to meaningfully improve the entire customer buying process, leveraging AI Agents to improve conversion, adoption, and engagement of all our customers. Now, let me turn it over to Eran to walk you through some of the significant progress we've made in our AI-driven products during the quarter.
With meaningfully re-architected, the core of our platform.
And redefine what our products do for customers.
Today money.com is evolving into an AI powered work. Execution platform built around 3. Distinct layers of AI value.
First, AI agents, which is now in beta and AI workflows.
Speaker #5: Thank
Roy Mann: Thank you, Roy. During our investor day in September 2025, we've shared the fundamental shift in monday.com's vision: from helping customers manage work to actually doing the work for them. Over the last five months, we've executed relentlessly against that vision. This was not an incremental change. We've meaningfully rearchitected the core of our platform and redefined what our products do for customers. Today, monday.com is evolving into an AI-powered work execution platform built around three distinct layers of AI value: first, AI agents, which is now in beta, and AI workflows. These allow customers to create an on-demand workforce of AI agents that can reason, act, and execute across their workflows, effectively enabling businesses to scale output without scaling headcount. Second is Monday Vibe. Over the past few months, Vibe has taken a major leap forward.
Speaker #5: During our investor day in September 2025, we've shared the fundamental shift in monday.com significant progress we've made vision. From helping customers manage work to actually doing the work for
These allow customers to create an on-demand Workforce of AI agents that can reason act and execute across their workflows effectively enabling businesses to scale output without scaling headcount.
Speaker #5: Over the last five months, we've executed relentlessly against that vision. This was not an incremental change. We've meaningfully re-architected the core of our platform during the quarter. Thank you, Roy.
Eran Zinman: Customers can now build full applications directly on top of their monday data and workflows, and consolidate additional business processes into a single, intelligent platform. And third, monday AI Sidekick. Sidekick has evolved into the central intelligence layer of every account, the gateway and the brain of the system, enabling customers to ask questions, surface insights, and take action across all the data and workflows. We're seeing very strong demand and accelerating adoption of monday AI across our customer base. monday building blocks have already powered more than 77 million actions. Sidekick has processed over half a million user messages, and early beta users of AI agents are blown away from its capabilities. Teams are increasingly relying on monday.com not just to organize work, but to make decisions, automate outcomes, and execute faster with confidence. mondayDB is also often an exceptional start.
Speaker #5: And redefined what our products do for customers.
What is the past few months Vibe is taking a major Leap Forward. Customers can now build full applications directly on top of their Monday data and workflows and consolidate additional business processes into a single intelligent platform.
Speaker #5: Today, monday.com is evolving into an AI-powered work execution platform built around three distinct layers of AI value. First, AI agents, which is now in beta, and AI presentation, and a replay of today's webcast under Workflows.
And third, AI psychic.
Speaker #5: These allow customers to create an on-demand workforce of AI agents that can reason, act, and execute across their workflows—effectively enabling businesses to scale output without scaling headcount.
Psychic has evolved into the Central Intelligence layer of every account, the Gateway and the brain of the system. Enabling customers to ask questions surface insights and take action across all the data and workflows.
We're seeing very strong demand and accelerating adoption of Monday, AI across our customer base.
Monday blocks have already powered more than 777 million actions.
Speaker #5: Second is monday vibe. Over the past few months, vibe has taken a major leap forward. Customers can now build full applications directly on top of their monday data and workflows.
Roy Mann: Customers can now build full applications directly on top of their monday.com data and workflows and consolidate additional business processes into a single, intelligent platform. Third, AI Sidekick. Sidekick has evolved into the central intelligence layer of every account, the gateway and the brain of the system, enabling customers to ask questions, surface insights, and take action across all the data and workflows. We're seeing very strong demand and accelerating adoption of monday AI across our customer base. monday.com Blocks have already powered more than 77 million actions. Sidekick has processed over half a million user messages, and early beta users of AI Agents are blown away from its capabilities. Teams are increasingly relying on monday.com not just to organize work, but to make decisions, automate outcomes, and execute faster with confidence. monday.com Vibe is also often an exceptional start.
Psychic has processed over half a million user messages, an early beta users of AI agents are blown away from his capabilities.
Speaker #5: Consolidate additional business processes into a single intelligent platform. And third, AI Sidekick. Sidekick has evolved into the central intelligence layer of every account.
Teams are increasingly relying on monday.com, not just to organize work, but to make decisions, automate outcomes and execute faster with confidence.
Monday Vibe is also often. Exceptional start.
Speaker #5: The gateway and the brain of the system. Enabling customers to ask actions across all the data and questions, surface insights, and take workflows. We're seeing very strong adoption of monday AI across our customer base.
Eran Zinman: It is the fastest product in monday.com's history to surpass 1 million of ARR, highlighting customer willingness to pay for its value and signaling meaningful revenue potential ahead. The pace of adoption reinforces our confidence that mondayDB can become a significant growth driver as we scale. We are proud of the progress we made in 2025 and encouraged by the momentum we're seeing across the business. Looking ahead to 2026, we believe we are still early in this transition. As AI becomes a core driver of customer value and differentiation, monday.com is uniquely positioned to lead. With the powerful platform, a clear upmarket strategy, and a global team focused on embedding intelligence deeply across workflows, we believe monday.com is well positioned to deliver durable, profitable growth in the years ahead. With that, I'll turn it over to Eliran to cover our financial guidance.
It is the fastest product in Monday's history to surpass, 1 million of ARR. Highlighting customer willingness to pay for its value and signaling meaningful Revenue, potential ahead,
The face of adoption reinforce our confidence. The V can become significant growth driver as we scale.
Speaker #5: Monday blocks have already powered more strong demand and accelerating than 77 million actions. Sidekick has processed over half a million user messages and early beta users of AI agents are blown away from its Teams are increasingly reliant on monday.com, not just to organize work, but to make decisions, automate outcomes, and execute faster with is also often exceptional product in monday's history to surpass 1 million of ARR.
We are proud of the progress we made in 2025 and encouraged. By the momentum, we're seeing across the business.
Looking ahead to 2026. We believe we are still early in this transition as AI becomes a core driver, customer value in the differentiation money.com is uniquely positioned to lead.
Roy Mann: It is the fastest product in monday.com's history to surpass $1 million of ARR, highlighting customer willingness to pay for its value and signaling meaningful revenue potential ahead. The pace of adoption reinforces our confidence that Vibe can become a significant growth driver as we scale. We are proud of the progress we made in 2025 and encouraged by the momentum we're seeing across the business. Looking ahead to 2026, we believe we are still early in this transition. As AI becomes a core driver of customer value and differentiation, monday.com is uniquely positioned to lead. With a powerful platform, a clear upmarket strategy, and a global team focused on embedding intelligence deeply across workflows, we believe monday.com is well positioned to deliver durable, profitable growth in the years ahead. With that, I'll turn it over to Eliran to cover our financial guidance.
With the powerful platform, a clear up Market strategy, and a global team, focus on embedding intelligence deeply across workflows, we believe. Mind.com is well, positioned to deliver durable profitable growth in the years ahead.
Speaker #5: Highlighting customer willingness to pay for its start. It is the fastest value and signaling meaningful revenue potential ahead. The pace of adoption reinforced our confidence the Vibe can become significant growth driver as we confidence.
With that, I'll turn it over to eleron to cover our financial guidance.
Thank you Ron. And thank you to everyone for joining our call.
Eliran Glazer: Thank you, Eran, and thank you to everyone for joining our call. Today, I'll review our fourth quarter and fiscal year 2025 results in detail and provide initial fiscal year 2026 guidance. As Roy mentioned, we are very pleased with our results in 2025. Total revenue in Q4 came in at $334 million, up 25% from the year-ago quarter, and $1.232 billion in fiscal year 2025, up 27% from the prior year. Our overall NDR was 110% in Q4. We expect overall NDR to be stable at 110% in fiscal year 2026. As a reminder, our NDR is trailing fourth quarter weighted average calculation. For the remainder of the financial metrics disclosed, unless otherwise noted, I will be referencing non-GAAP financial measures. We have provided a reconciliation of GAAP to non-GAAP financials in our earnings release. Fourth quarter gross margin was 89% and 90% for the fiscal year 2025.
Speaker #5: Scale. We are proud of the progress we made in 2025 Monday Vibe business. Looking ahead to 2026, we believe we are still early in this transition.
Today, I'll review our fourth quarter and fiscal year 2025 results in detail and provide initial fiscal year, 2026 guidance.
As Roy mentioned, we are very pleased with our results in 2025.
Speaker #5: As AI becomes a core and is encouraged by the momentum we're seeing across the driver of customer value and to lead. With the powerful platform, a clear upmarket strategy, and a global team focused on embedding intelligence deeply across workflows, we believe monday.com will see profitable growth in the years ahead.
total revenue in Q4 came in at 334 million up, 25% from the year, go quarter and 1.232 billion in fiscal year, 2025 up 27%, from the prior year,
Speaker #5: With that differentiation, monday.com is uniquely positioned. I'll turn it over to Eliran to cover our financials and guidance. Thank you, Eran, and thank you to everyone for joining to review our fourth quarter and fiscal year 2025 results. monday.com is well positioned to deliver durable capabilities.
Our overall, India was 110% in Q4. We expect overall ndr to be stable at 110%, in fiscal year 2026. As a reminder, our ndr is trailing 4 quarter, weighted average, calculation,
Eliran Glazer: Thank you, Eran, and thank you to everyone for joining our call. Today, I'll review our Q4 and fiscal year 2025 results in detail and provide initial fiscal year 2026 guidance. As Roy mentioned, we are very pleased with our results in 2025. Total revenue in Q4 came in at $334 million, up 25% from the year-ago quarter, and $1.232 billion in fiscal year 2025, up 27% from the prior year. Our overall NDR was 110% in Q4. We expect overall NDR to be stable at 110% in fiscal year 2026. As a reminder, our NDR is trailing Q4 weighted average calculation. For the remainder of the financial metrics disclosed, unless otherwise noted, I will be referencing non-GAAP financial measures. We have provided a reconciliation of GAAP to non-GAAP financials in our earnings release. Q4 gross margin was 89%, and 90% for the fiscal year 2025.
For a reminder of the financial metrics disclosed. Unless otherwise noted I will be referencing non-gaap Financial measures. We have provided a Reconciliation of gaap to non-gaap financials in our earnings release.
Speaker #5: mentioned, we are very pleased with our results in detail and provide initial fiscal year revenue in Q4 came in 2026 guidance. 2025. Total As Roy $334, up 25% from the year-ago quarter.
Eliran Glazer: Research and development expense was $67.7 million in Q4, or 20% of revenue, up from 18% in the year-ago quarter, and $238.5 million in fiscal year 2025, or 19% of revenue, up from 17% in the prior year. Sales and marketing expense was $159.9 million in Q4, or 48% of revenue, compared to 48% of revenue in the year-ago quarter and $586.8 million in fiscal year 2025, or 48% of revenue, down from 51% in the prior year. General and administrative expense was $29.2 million in Q4, or 9% of revenue, compared to 9% in the year-ago quarter and $106.9 million in fiscal year 2025, or 9% of revenue, up from 8% in the prior year. Operating income was $41.9 million in Q4, up from $40.3 million from the year-ago quarter, and operating margin was 13%.
Speaker #5: And $1.232 billion in fiscal year 2025, up 27% from the prior year. Our overall NDR was 110% in Q4. We expect overall NDR to be stable at 110% in fiscal year 2026.
Port quarter growth margin was 89%, and 90% for the fifth gear, 2025, research, and development. Expense was 67.7 million in Q4 or 20% of Revenue up from 18%. In the year, go quarter and 238.5 million in fiscal year 2025 or 19% of Revenue up from 17% in the prior year.
Speaker #5: As a reminder, our NDR average calculation. For the remainder of the financial metrics disclosed, unless otherwise noted, I will be referencing non-GAAP financial measures.
Speaker #5: We have provided a reconciliation of GAAP to non-GAAP financials in our earnings release. Fourth quarter gross margin was 89%, and 90% for the fiscal year 2025.
Sales and marketing expense was 159.9 million in Q4 or 48% of Revenue compared to 48% of Revenue. In the year ago, quarter and 586.8 million in fiscal year 2025 or 48% of Revenue down from 51% in the prior year.
Speaker #5: Research and development expense was $67.7 million in Q4, or 20% of revenue, up from 18% in the year-ago quarter. And $238.5 million in fiscal of revenue, up from 17% our call.
Eliran Glazer: Research and development expense was $67.7 million in Q4, or 20% of revenue, up from 18% in the year-ago quarter, and $238.5 million in fiscal year 2025, or 19% of revenue, up from 17% in the prior year. Sales and marketing expense was $159.9 million in Q4, or 48% of revenue, compared to 48% of revenue in the year-ago quarter and $586.8 million in fiscal year 2025, or 48% of revenue, down from 51% in the prior year. General and administrative expense was $29.2 million in Q4, or 9% of revenue, compared to 9% in the year-ago quarter and $106.9 million in fiscal year 2025, or 9% of revenue, up from 8% in the prior year. Operating income was $41.9 million in Q4, up from $40.3 million from the year-ago quarter, and operating margin was 13%.
General and administrative expense was 29.2 million in Q4 or 9% of Revenue compared to 9% in the year ago, quarter and 106.9 million in fiscal year 2025 or 9% of Revenue up from 8% in the prior year.
Speaker #5: Year 2025, or 19% in the prior year. Sales: $159.9 million in revenue, compared to 48% of revenue in Q4, or 48% in the year-ago quarter.
Operating income was 41.9 million in Q4 up from 40.3 million from the year, go quarter and operating margin was 13%.
Eliran Glazer: Operating margin in Q4 had an approximately 180 basis points negative FX impact, mainly from the appreciation of the Israeli shekel compared to the US dollar. For fiscal year 2025, operating income was $175.3 million, or 14% of revenue, compared to 14% of revenue in the prior year, reflecting an approximately 110 basis points impact from FX. Net income was $55 million in Q4 2025, compared to $57.3 million in Q4 2024. For fiscal year 2025, net income was $233.6 million, up from $183.3 million in fiscal year 2024. Diluted net income per share was $1.04 in Q4 and $4.40 in fiscal year 2025, based on 52.9 million and 53.1 million fully diluted shares outstanding, respectively. In the fourth quarter of 2025, we recognized a $61.2 million non-cash income tax benefit related to a deferred tax asset, reflecting our sustained profitability.
Operating margin in Q4 had an approximately 180 basis points, negative effects impact. Mainly from the appreciation of the Israeli shekel compared to the US dollar.
Speaker #5: And and marketing expense was $586.8 million in fiscal year 2025, or 48% of revenue, down from 51% in Today, I'll the prior year. General and administrative expense was $29.2 million in Q4, or 9% of revenue, compared to 9% in the year-ago is trailing fourth quarter, weighted quarter.
For fiscal year, 2025 operating income was 175.3 million or 14% of Revenue, compared to 14% of Revenue in the prior year reflecting an approximately 110 basis points impact from FX.
Speaker #5: And $106.9 million in fiscal year 2025, or 9% of revenue, up from 8% in the prior year. Operating income was $41.9 million in Q4, up from $40.3 million in the year-ago quarter, or 13%.
Net income was 55 million in q425 compared to 5 7. 3 2 4.
Speaker #5: Operating margin quarter. And operating margin was 180 basis points in Q4 and had an approximately negative FX impact, mainly from depreciation of the Israeli shekel compared to the US dollar.
Eliran Glazer: Operating margin in Q4 had an approximately 180 basis points negative FX impact, mainly from the appreciation of the Israeli shekel compared to the US dollar. For fiscal year 2025, operating income was $175.3 million, or 14% of revenue, compared to 14% of revenue in the prior year, reflecting an approximately 110 basis points impact from FX. Net income was $55 million in Q4 2025, compared to $57.3 million in Q4 2024. For fiscal year 2025, net income was $233.6 million, up from $183.3 million in fiscal year 2024. Diluted net income per share was $1.04 in Q4 and $4.40 in fiscal year 2025, based on 52.9 million and 53.1 million fully diluted shares outstanding, respectively. In the fourth quarter of 2025, we recognized a $61.2 million non-cash income tax benefit related to a deferred tax asset, reflecting our sustained profitability.
Net income per share was $1.04 in Q4 and $4.40 in fiscal year 2025 based on 5 2. 9 5 3.
Speaker #5: For fiscal year 2025, operating income was $175.3 million, or 14% of revenue, compared to 14% of revenue in the prior year, with an approximately 110 basis point impact from FX.
Eliran Glazer: Because this is a discrete, non-operational item, it is excluded from non-GAAP net income. Looking ahead, we may begin paying cash taxes in the near future. Total employee headcount was 3,155, an increase of 137 employees since Q3. Looking ahead to fiscal year 2026, we expect headcount growth in the mid-teens percentage range, with incremental investment primarily directed toward sales and R&D. Moving on to the balance sheet and cash flow, we ended the quarter with $1.5 billion in cash and cash equivalents, compared to $1.53 billion at the end of Q3, reflecting $135 million of share repurchase executed during the quarter. As of the end of Q4, approximately $735 million remained available under our existing share purchase authorization program. Adjusted free cash flow for Q4 was $56.7 million, and adjusted free cash flow margin was 17%.
Speaker #5: Net income was $55 million, in Q4 25, compared to $57.3 income was $233.6 million, up from $183.3 million in fiscal year 24. Diluted net income per share was $1.04 in Q4, and $4.40 in fiscal year prior year.
In the fourth quarter of 20125, we recognize a 61.2 million non-cash income tax benefit related to deferred tax asset reflecting our sustained profitability because this is a discrete non-operational item. It is excluded from non-gaap net income. Looking ahead. We may begin paying cash taxes in the near future.
Total employee. Head count was 3,155 and increase of 137 employees. Since Q3 looking ahead to fiscal year 2026, we expect edcom growth, in the meetings percentage range with incremental investment, primarily directed to our sales and R&D
Speaker #5: In Q4 2024, we had 52.9 million and 53.1 million fully diluted shares outstanding for fiscal year 2025, net and outstanding respectively. In the fourth quarter of 2025, we recognized a $61.2 million non-cash income tax benefit, related to deferred tax profitability.
moving on to the balance sheet and cash flow. We ended the quarter with 1.5 billion in cash and cash equivalents compared to 1.53 billion. At the end of Q3 reflecting 135 million of share repurchase executed during the quarter.
Speaker #5: Because this is a discrete, non-operational item, it is excluded from non-GAAP net income. Looking ahead, we may begin paying cash taxes in the near future.
Eliran Glazer: Because this is a discrete, non-operational item, it is excluded from non-GAAP net income. Looking ahead, we may begin paying cash taxes in the near future. Total employee headcount was 3,155, an increase of 137 employees since Q3. Looking ahead to fiscal year 2026, we expect headcount growth in the mid-teens percentage range, with incremental investment primarily directed toward sales and R&D. Moving on to the balance sheet and cash flow, we ended the quarter with $1.5 billion in cash and cash equivalents compared to $1.53 billion at the end of Q3, reflecting $135 million of share repurchase executed during the quarter. As of the end of Q4, approximately $735 million remained available under our existing share purchase authorization program. Adjusted free cash flow for Q4 was $56.7 million, and adjusted free cash flow margin was 17%.
as of the end of Q4, approximately 735 million remained available under our existing, share purchase authorization program,
Speaker #5: Total employee headcount was 3,155, an increase of 137 employees since Q3. Looking ahead to fiscal year 2026, we expect headcount growth in the mid-teens percentage range.
Eliran Glazer: In fiscal year 2025, Adjusted Free Cash Flow was $322.7 million, and adjusted free cash flow margin was 26%. Adjusted Free Cash Flow is defined as net cash from operating activities, less cash used for property and equipment, and capitalized software cost, plus costs associated with the build-out and expansion of our corporate headquarters. Before I discuss guidance for fiscal year 2026, I did want to touch on our approach to guidance moving forward. Our confidence in the underlying fundamentals of the business and our long-term financial trajectory remains unchanged since our investor day in September. Given the evolving nature of the AI landscape and the choppiness in the no-touch demand environment, we believe it is responsible to keep our near-term communication focused on what we can execute and deliver with high confidence.
Speaker #5: With incremental investment primarily directed toward sales and R&D. Moving on to the balance sheet and cash flow, we ended the quarter with $1.5 billion in cash and cash equivalents, compared to $1.53 billion in assets, reflecting our sustained position and $135 million of share repurchase executed during the quarter.
Adjusted free cash flow for Q4 was 56.7 million and adjusted free cash flow margin was 17% in fiscal year. 2025 adjusted free cash flow was 322.7 million and adjusted free cash. Flow margin was 26%. Adjusted free. Cash flow is defined as net cash from operating activities. Less cash used for property and equipment and capitalized software, Cost Plus cost associated with the buildout and expansion of our corporate headquarters.
Speaker #5: As of the end of Q4, approximately $735 million remained available under our existing share purchase authorization program. Adjusted free cash flow for Q4 was $56.7 million, and adjusted free cash flow margin was 17%.
Before I discuss, guidance for fiscal year 2026, I did want to touch on our approach to guidance moving forward, our confidence in the underlying fundamentals of the business. And our long-term Financial trajectory remains unchanged since our investor day in September.
Speaker #5: In fiscal year 2025, adjusted free cash flow was $322.7 million, and adjusted free cash flow margin was 26%. billion at the end of Q3, operating activities, less cash used for property and equipment, Adjusted free cash flow is defined as net cash from and capitalized software cost.
Eliran Glazer: In fiscal year 2025, adjusted free cash flow was $322.7 million, and adjusted free cash flow margin was 26%. Adjusted free cash flow is defined as net cash from operating activities, less cash used for property and equipment, and capitalized software cost, plus costs associated with the build-out and expansion of our corporate headquarters. Before I discuss guidance for fiscal year 2026, I did want to touch on our approach to guidance moving forward. Our confidence in the underlying fundamentals of the business and our long-term financial trajectory remains unchanged since our investor day in September. Given the evolving nature of the AI landscape and the choppiness in the no-touch demand environment, we believe it is responsible to keep our near-term communication focused on what we can execute and deliver with high confidence.
Given the evolving nature of the AI landscape and the choppiness in the no touch demand environment, we believe it is responsible to keep our near-term communication focused on what we can execute and deliver with high confidence.
Eliran Glazer: As a result, we will no longer be discussing our previously provided 2027 targets, but will be centering our discussion on our 2026 outlook, which reflects the continued momentum we see across our AI work platform, new product introductions, and upmarket sales motion. We remain committed to disciplined execution, which is consistent with our track record, and we will revisit long-term targets when there is greater visibility and it's appropriate to do so. Let's now turn to our outlook for fiscal year 2026. For the first quarter of fiscal year 2026, we expect our revenue to be in the range of $338 million to 340 million, representing growth of approximately 20% year-over-year. We expect non-GAAP operating income of $37 million to 39 million, with an operating margin of 11% to 12%, which assumes a negative FX impact of 100 to 200 basis points.
Speaker #5: Plus costs associated with the build-out and expansion of our corporate headquarters. Before I discuss guidance for the fiscal year, and our approach to guidance moving forward.
As a result, we will no longer be discussing our previously provided 2027 targets, but will be centering our discussion on our 2026 Outlook, which reflects the Continuum momentum. We see across our AI work platform, new products, introductions and app market sales motion,
Speaker #5: Our confidence in the 2026—I did want to touch on our long-term financial underlying fundamentals of the business, and trajectory remains unchanged since our Investor Day. In the AI landscape and the choppiness in the no-touch demand environment, September.
We remain committed to discipline execution which is consistent with our track record and we will revisit long-term targets when there is a greater visibility and its appropriate to do. So
let's now turn to our outlook for fiscal year 2026.
Speaker #5: Given the evolving nature of our business, we will keep our near-term communication focused on what we can execute and deliver with high confidence. As a result, we will no longer be discussing our previously provided 2027 targets but will be centering our discussion on our 2026 outlook, which reflects the continued momentum we see across our AI work platform, new product introductions, and upmarket sales motion.
Eliran Glazer: As a result, we will no longer be discussing our previously provided 2027 targets, but will be centering our discussion on our 2026 outlook, which reflects the continued momentum we see across our AI work platform, new product introductions, and upmarket sales motion. We remain committed to discipline execution, which is consistent with our track record, and we will revisit long-term targets when there is greater visibility and it's appropriate to do so. Let's now turn to our outlook for fiscal year 2026. For Q1 of fiscal year 2026, we expect our revenue to be in the range of $338 million to $340 million, representing growth of approximately 20% year over year. We expect non-GAAP operating income of $37 million to $39 million, with an operating margin of 11% to 12%, which assumes a negative FX impact of 100 to 200 basis points.
For the first quarter of fiscal year 2026, we expect our Revenue to be in the range of 338 million, to 340 million representing growth of approximately 20% year-over-year. We expect non Gap, operating income of 37 million to 39 million with an operating margin of 11% to 12%, which assumes a negative effects impact of 100 to 200 basis points.
Eliran Glazer: For the full year of 2026, we expect revenue to be in the range of $1.452 billion to 1.462 billion, representing growth of 18% to 19% year-over-year. We expect full year non-GAAP operating income of $165 million to 175 million, with an operating margin of 11% to 12%, which assumes a negative FX impact of 100 to 200 basis points. We expect full year adjusted free cash flow of $275 million to 290 million, with adjusted free cash flow margin of 19% to 20%, which assumes a negative FX impact of 100 to 200 basis points. Let me now turn it over to the operator for your questions.
Speaker #5: We remain committed to disciplined execution and record keeping, and we will revisit long-term targets when there is greater visibility. Let's now turn to our outlook for fiscal year 2026.
Speaker #5: appropriate to do so. 2026, we expect our revenue to be in the range of $338 million, to $340 million, year over year. We expect non-GAAP representing growth of approximately 20% to $39 million, with an operating margin of 11% to operating income of $37 million 12%, which assumes a negative FX impact of 100 to 200 basis points.
For the full year of 2026, we expect Revenue to be in the range of 1.452 billion to 1.462 billion representing growth of 18% to 19% year-over-year. We expect full year non-gaap. Operating income of 165 million to 175 million with an operating margin of 11% to 12%. Which assumes a negative effects impact of 100 to 200 basis points.
We expect full year, adjusted free cash flow of 275 million to 290 million with adjusted. Free cash flow margin of 19% to 20% Which assumes the negative effects impact of 100200 basis points.
Let me now turn it over to the operator for your questions.
Thank you. We will now begin the question.
Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to rejoin your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone in your device, please pick up your handset to ensure that your phone is not on mute when asking your question. We do request for today's session that you please limit to one question and one follow-up question only. Thank you. And our first question comes from the line of Arjun Bhatia with William Blair. Your line is open.
Speaker #5: For the full year of 2026, we expect revenue to be in the range of $1.452 billion to $1.462 billion, representing growth of 18% to 19% year over year.
Eliran Glazer: For the full year of 2026, we expect revenue to be in the range of $1.452 billion to 1.462 billion, representing growth of 18% to 19% year-over-year. We expect full year Non-GAAP operating income of $165 million to 175 million, with an operating margin of 11% to 12%, which assumes a negative FX impact of 100 to 200 basis points. We expect full year adjusted free cash flow of $275 million to 290 million, with adjusted free cash flow margin of 19% to 20%, which assumes a negative FX impact of 100 to 200 basis points. Let me now turn it over to the operator for your questions.
Please press star 1 on your telephone keypad to raise your hand and join the queue.
Speaker #5: We expect full-year non-GAAP operating income of $165 million to $175 million, with an operating margin of 11% to 12%. For the first quarter of fiscal year, which is consistent with our track record,
Speaker #5: This assumes a negative FX impact of 100 to 200 basis points. We expect full-year adjusted free cash flow of $275 million to $290 million, with an adjusted free cash flow margin of 19% to 20%, which also assumes a negative FX impact of 100 to 200 basis points.
If you would like to return your question, simply press star 1. Again, if you are called upon to ask your question and are listening via speaker phone in your device, please pick up your handset to ensure that your phone is not on mute. When asking your question, we do request for today's session that you please limit to 1 question and 1 follow-up question only. Thank you.
And our first question comes from the line of Arjun Bhatia. With William Blair, Caroline is open
Perfect. Um, thank you guys.
Speaker #5: Let me now turn it over to the operator for your questions. Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.
Arjun Bhatia: Perfect. Thank you, guys. Appreciate it. Can you maybe just touch on the growth outlook a little bit for 2026? I think I heard that NDR might be stable in a year, but the guidance is calling for a DCEL, an overall top-line growth from 27 to 18. So it's remarkable that the guide kind of that you can still grow at that high teens range even when NDR is 110. So maybe just touch on the different pieces of what you're expecting from customers expanding, especially in the enterprise, how much of a headwind the no-touch is, and maybe when we can start to see that turnaround. Is that late 2026, or is that 2027 dynamic? Thank you.
Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to rejoin your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone in your device, please pick up your handset to ensure that your phone is not on mute when asking your question. We do request for today's session that you please limit to one question and one follow-up question only. Thank you. And our first question comes from the line of Arjun Bhatia with William Blair. Your line is open.
Speaker #5: If you would like to rejoin your question, simply to ask your question and are listening via speakerphone in your device, please press star one again.
I'm a overall Topline girls from 27 to 18, um, so it's remarkable that the guy kind of that you can still grow at that high teams range
Speaker #5: on mute when asking your question. We pick up your handset to ensure that your phone is not limit to one question and one If you are called upon follow-up question only.
Speaker #5: Thank you. And our first question comes from the line of Arjun Bhatia with William Blair. Your line is open.
Speaker #5: open.
Speaker #6: Perfect. Thank
Arjun Bhatia: Perfect. Thank you, guys. Appreciate it. Can you maybe just touch on the growth outlook a little bit for 2026? I think I heard that NRR might be stable in a year, but the guidance is calling for a decel and an overall top-line growth from 27 to 18. So it's remarkable that the guide kind of that you can still grow at that high teens range even when NRR is 110. So maybe just touch on the different pieces of what you're expecting from customers expanding, especially in the enterprise, how much of a headwind the no-touch is, and maybe when we can start to see that turnaround. Is that late 26, or is that 2027 dynamic? Thank you.
Speaker #6: you, guys. Appreciate
Even when, you know, NR is, uh, is is is 1/10. So maybe just touch on uh, the different pieces of what you're expecting from customers, expanding, especially in the Enterprise, how much of a headwind the the no touch is and maybe when we can, we can start to see that, uh, turn around. Is that late, late 26, or is that uh 2027 Dynamic. Thank you.
Speaker #6: Can you maybe just touch on the growth outlook and do a request for today's session that you please look a little bit out to 2026? I think I heard that NRR might be stable in a year, but the guidance is calling for a decel in overall top-line growth from 27% to 18%.
Eliran Glazer: Hey, Arjun. It's Eliran. So thank you for the questions. Guidance, for now, reflects what we believe we can execute against with high confidence. It doesn't assume any rebound in performance marketing or top-of-funnel activity, and it's based on current condition with growth driven primarily by the following: upmarket and enterprise customer expansion, multi-product adoption, and disciplined investment and improving efficiency across the growth-to-market model that we have. As you rightfully stated, NDR to remain flat at 110%, by the end of the year. With regards to maybe the margins, we assume that we are going to go in terms of headcount growth of mid-teens, and there is also a significant impact of the appreciation of the Israeli shekel versus the US dollar that is contributing to 100 to 200 basis points negative on our margins.
Mayor June, it's 11. Um, so thank you for the questions. Um, guidance for now reflects what we believe, we can execute against with high confidence.
Speaker #6: So it's remarkable that the guide kind of that you can still grow at that high teens range even when NRR on the different pieces of what you're expecting from customers is 110.
Speaker #6: expanding, especially in the enterprise, we can start to see that So maybe just touch turnaround. Is that late 26 or is that 2027 dynamic?
Speaker #6: Thank you.
Eliran Glazer: Hey, Arjun. It's Eliran. So thank you for the questions. Guidance, for now, reflects what we believe we can execute against with high confidence. It doesn't assume any rebound in performance marketing or top-of-funnel activity. And it's based on current condition with growth driven primarily by the following: upmarket and enterprise customer expansion, multi-product adoption, and disciplined investment and improving efficiency across the go-to-market model that we have. As you rightfully stated, NDR to remain flat at 110%, by the end of the year. With regards to maybe the margins, we assume that we are going to go in terms of headcount growth of mid-teens. And there is also a significant impact of the appreciation of the Israeli shekel versus the US dollar that is contributing to 100 to 200 basis points negative on our margins.
Speaker #7: Eliran. So thank you for the questions. Guidance
Speaker #7: for now reflects what we believe we can Hey, Arjun. It's execute against with high confidence. It doesn't assume any rebound in performance marketing or top-of-funnel how much of a headwind the activity.
It doesn't assume many reboot in Performance Marketing or top of funnel activity, and it's based on current condition with with growth driven, primarily by the following up market and Enterprise customer expansion multi-product adoption, and disciplined investment, and improving efficiency across them go to market models that we have, as you rightfully stated and they are to remain flat at 100% 110%. Sorry by the end of the year. Um, with regards to maybe the the margins we assume that we are going to go in terms of headcount growth of meetings and there is also a significant uh impact of the uh Israeli appreciation of the sorry. Appreciation of the Israeli shekel versus the US dollar that is contributing to
Eliran Glazer: So these are the things that we took into account when we built the budget, the guidance, sorry.
Speaker #7: And it's based on
100 to 200 basis points negative on our margins. So these are the things that we took into account when we built the budgets. The Guardians. Sorry.
Speaker #7: Current conditions, with growth driven primarily by the following: upmarket no-touch, as well as mid-market and enterprise customer expansion, multi-product adoption, and disciplined investment in improving efficiency across the go-to-market model that we have.
Arjun Bhatia: Okay. Perfect. Thank you. And then just one Sidekick. It looks like you started the monetization strategy. You have a price in place, and you're going to turn that on in 2026. I'm just curious how you think about customers' propensity to pay for that solution, what incremental capabilities you've included in the paid additions of Sidekick, and how you think that monetization might scale throughout the year.
Speaker #7: As you rightfully stated, NDR to remain flat at 100% 110%, sorry, by the end of regards to maybe the margins, we assume that we are going to of the Israeli appreciation of the Israeli shekel versus the US dollar that is contributing to 100 to our margins.
Speaker #7: of mid-teens, and there is also a
Okay. Um, perfect. Thank you. And then, um, just 1 1 on sidekick, it looks like you started. The monetization strategy, you have a price in place and you're going to turn that on, um, in in in 2026, I'm just curious. You know, how you think about, uh, customers propensity to pay for that, uh, solution. What incremental capabilities that you've included in in, in the paid editions of of sidekick. And you know how you think that, uh, monetization might scale throughout the year?
Eliran Glazer: Yeah. Hi, Arjun. This is Eliran. So we're very excited from the latest release of Sidekick. Basically, Sidekick offers our customers not just to use AI capabilities within their account, but also it kind of accesses the brain of the account. It knows everything about the work, about who you are, your place in the organization. It's also context-aware of every data and content that exists within your Monday account. And we're also planning to integrate with third-party tools. So essentially, it becomes like a business brain of the company. Where you're seeing great momentum, Sidekick is now available to all customers. It's basically offered as a paid add-on for pro and below packages, and it's part of the enterprise package. Going forward, we might have additional monetization for Sidekick, but it's a very interesting product that gives a lot of value to our customers because of its capabilities.
Speaker #7: So these are the things 200 basis points negative on built the budget, the guidance, the year. With sorry.
Eliran Glazer: These are the things that we took into account when we built the budget, the guidance, sorry.
Arjun Bhatia: Okay. Perfect. Thank you. And then just one Sidekick. It looks like you started the monetization strategy. You have a price in place, and you're going to turn that on in 2026. I'm just curious how you think about customers' propensity to pay for that solution, what incremental capabilities you've included in the paid additions of Sidekick, and how you think that monetization might scale throughout the year.
Speaker #6: Perfect. Thank
Speaker #6: monetization strategy. You have a
Speaker #6: on in go in terms of headcount growth 2026. I'm just curious, how you think price in place and you're going to turn that
Speaker #6: Propensity to pay for that Sidekick, it looks like you started the appreciation of the, sorry, solution. What incremental capabilities have you included in the paid additions of Sidekick?
Speaker #6: And how you think that monetization might scale throughout the
Yeah. Hi June. This is Iran. So um we're very excited for the latest release of psychic. Um, basically psychics offer our customers, not just to use AI capabilities when their account but also it kind of acts as the brain of the accounts. He knows everything about the work about who you are, you'll place an organization. It's also context aware of every, uh, data and content that you see within your Monday account. Uh, and we're also planning to integrate with third-party tools. So essentially, it becomes like a business brain of the company. Um, what are you seeing in great momentum? Uh, psychic is now available to all customers. Uh, it's basically offered as the paid add-on, uh, for pro and Below packages. And as far as the Enterprise package,
Speaker #7: Yeah. Hi, Arjun. This is Iran. So we're very excited from the latest release of sidekick. Basically, sidekicks offer our customers
Eliran Glazer: Yeah. Hi, Arjun. This is Eliran. So we're very excited from the latest release of Sidekick. Basically, Sidekick offers our customers not just to use AI capabilities within their account, but also it kind of accesses the brain of the account. It knows everything about the work, about who you are, your place in the organization. It's also context-aware of every data and content that exists within your Monday account. And we're also planning to integrate with third-party tools. So essentially, it becomes like a business brain of the company. Where are you seeing great momentum? Sidekick is now available to all customers. It's basically offered as the paid add-on for pro and below packages, and it's part of the enterprise package. Going forward, we might have additional monetization for Sidekick, but it's a very interesting product that gives a lot of value to our customers because of its capabilities.
Going forward, we might have additional monetization for psychic but it's a very interesting product that gives a lot of value to our customers because of its capabilities.
Speaker #7: The brain of the account. It knows everything about the work, about who, year, organization. It's also account, but also, it kind of access and content that exists within your— And we're also planning to integrate with third-party tools.
Wonderful, thank you.
Arjun Bhatia: Wonderful. Thank you.
Operator: Next question comes from the line of Scott Berg with Needham. Your line is open.
Next question, comes from the line of Scott purk with medium. Your line is open.
Hi everyone. Thanks for uh taking my questions. Um,
Scott Berg: Hi, everyone. Thanks for taking my questions. I guess I wanted to start probably with a question for Roy because I think he mentioned high level, some impact, obviously, on the cost of customer acquisition and AI in the space. I just wanted to see if you can clarify that comment. I guess, what is the impact like? My guess is it's just through the sales process as customers evaluate different technologies and functionalities. But are you seeing that impact more on those self-serve, low-touch, smaller customers, or are you also seeing some impact negatively from maybe your larger customer opportunities as well?
Speaker #7: So essentially, if you are, your place in the company becomes like a business brain of the company. Where are you seeing great momentum? Sidekick is now available to be context-aware of every data all customers.
Speaker #7: It's basically offered as a Monday account, the paid add-on for Pro and below packages. It's for the Enterprise package, and monetization for Sidekick. But it's a very interesting product that gives a lot of value.
Speaker #6: Wonderful. Thank
Arjun Bhatia: Wonderful. Thank you.
I guess wanted to start probably, uh, with a question for Roi because I think he mentioned, um, high level some impact. Obviously, on the the cost of customer acquisition and, and AI in the space, I just wanted to see if you can clarify that comments, I guess, what is the impact? Like, my guess is, it's just in the, through the sales process. This customers, evaluate different Technologies and functionalities. But are you seeing that impact? More on those, you know, Self, Serve low, touch smaller, customers. Or are you also seeing some, you know, impact negatively from maybe your larger customer opportunities as well?
Speaker #5: Next question comes from the line of Scott Berg with Needham. Your line is open.
Operator: Next question comes from the line of Scott Berg with Needham. Your line is open.
Roy Mann: Hi. Thank you. So what we see right now in performance marketing is the same things we called out before. It just continues, meaning we see headwind in our ability to buy media, and the ROI is the same as we saw before and remains choppy. So what we're doing is shifting budgets to higher ROI channels and media, which means we're focusing more on the higher customers, the better customers with better ROI. So essentially, we're leaving the smaller ones and focusing on the better ones with higher ROI, bigger retention. And that is successful.
Speaker #5: open. Hi, everyone.
Scott Berg: Hi, everyone. Thanks for taking my questions. I guess I wanted to start probably with a question for Roy because I think he mentioned high levels, some impact, obviously, on the cost of customer acquisition and AI in the space. I just wanted to see if you can clarify that comment. I guess, what is the impact like? My guess is it's just through the sales process as customers evaluate different technologies and functionalities. But are you seeing that impact more in those self-serve, low-touch, smaller customers, or are you also seeing some impact negatively from maybe your larger customer opportunities as well?
Speaker #8: Thanks for taking my questions. I guess I wanted to start, probably, with a question for Roy, because I think he mentioned, at a high level, some impact, obviously, and AI in the space.
Speaker #8: I
Uh hi. Thank you. Uh, so uh, what we see right now in uh uh, Performance Marketing is the same things. We call it out before we just continue and meaning we see headwind in the, in our ability to, uh, uh, by media. And the ROI is the same as we saw before and remains choppy. So, what we're doing is moving shifting, budgets,
Speaker #8: Like? My guess is it's just in the—through the sales process. Customers evaluate different technologies and comment. I guess, what is the impact—functionalities.
Speaker #8: But are you seeing that impact more in those self-serve, low-touch, smaller customers? Or are you also seeing—going forward, we might have additional opportunities from maybe your larger customers as well, on the cost of customer acquisition?
Speaker #7: Hi. Thank you. So, what we see right now are things we called out before. We just see headwinds in our ability.
Eliran Glazer: Hi. Thank you. So what we see right now in performance marketing is the same things we called out before. It just continues, meaning we see headwind in our ability to buy media, and the ROI is the same as we saw before and remains choppy. So what we're doing is shifting budgets to higher ROI channels and media, which means we're focusing more on the higher customers, the better customers with better ROI. So essentially, we're leaving the smaller ones and focusing on the better ones with higher ROI, bigger retention. That is successful.
Eliran Glazer: Cool. Maybe this is Eliran, just to add to what Roy said, to your question about the bigger customers, we don't see this impact on the bigger customer. We have strong momentum with the upmarket motion, and we only see it in the SMB segment, namely the S of the SMB.
Speaker #7: continues. to buy media and Meaning we the ROI is the same some impact negatively as we saw before. And higher is moving shifting budgets to remains choppy.
That's always said, uh, to your question about the bigger customers. We don't see this impact on the bigger customer. We have strong momentum with the out Market motion. And we only see it in the SMB segment, namely the S of the SMB.
Scott Berg: Very helpful. Then my follow-up would be for Eliran. If I look at your guidance for the year, your non-GAAP operating margins implies about 11.6% for the full year. I understand there's a 1 to 200 basis point headwind due to FX, but that operating margin is actually lower than what you reported in fiscal 2025. The growth is, as Arjun mentioned, 8, 9, 10 points lower. Why shouldn't we see margins kind of inflect a little bit more over the next year if this kind of high teens 20% growth rate is likely the probably what the right growth rate for the company is over the next year or two?
Speaker #7: ROI channels and media, on the higher customers, the better customers with better, which means we're focusing more. So what we're doing, driving—we're leaving the smaller ones and focusing on the better ones with higher ROI, bigger retention.
Uh, very helpful and then my follow-up would be for eleron. If I if I look at your guidance for the year, your operating margin, uh, 9 Gap, operating margins implies about 11.6% for the full year and I understand there's a 1 to 200 uh basis point head 1 due to FX
Speaker #7: And that is
Speaker #7: successful.
Speaker #6: Scott, maybe this is
Eran Zinman: Got it. Maybe this is Eran, just to add to what Roy said, to your question about the bigger customers, we don't see this impact on the bigger customer. We have strong momentum with the upmarket motion, and we only see it in the SMB segment, namely the S of the SMB.
Speaker #6: Eliran just to add to what Roy said to your on the bigger customer. We have strong momentum with the up market motion. And we only see it in the SMB segment, namely the S of the question about the bigger customers.
But that operating margin is, is actually lower than what you reported in fiscal 25. And and the growth is is Argent mentioned, you know, 8 9 10 points lower, you know why shouldn't we see? Margins kind of inflect a little bit more over the next year. If if this kind of High Teens 20% growth rate is, you know, likely the uh, you know, probably what the right. Um, you know growth rate for the company is is over the next year or 2
Speaker #6: SMB. Very helpful.
Eliran Glazer: Hi, Scott. Thanks. So just to reiterate, maybe, that given the current macro and demand environment, we believe that we are putting numbers that are achievable and doable. The biggest change, the recent appreciation of the Israeli shekel, happened in the last few months. We have 55% of our headcount in Israel, and this is very concentrated, primarily contributing to the impact of FX. We also prioritize investment in the SLG motion and AI, as you heard in the prepared remarks. This is front-loaded cost that basically takes a bit longer for the payoff time. This is the impact on margins.
Scott Berg: Very helpful. Then my follow-up would be for Eliran. If I look at your guidance for the year, your non-GAAP operating margins implies about 11.6% for the full year. I understand there's a 1 to 200 basis point headwind due to FX. But that operating margin is actually lower than what you reported in fiscal 2025. The growth is, as Arjun mentioned, 8, 9, 10 points lower. Why shouldn't we see margins kind of inflect a little bit more over the next year if this kind of high teens 20% growth rate is likely probably what the right growth rate for the company is over the next year or two?
Speaker #8: And then my follow-up would be for Eliran. If I look at your guidance for the
Uh High School thanks. So just to reiterate, maybe that given the current macro and demand environment. We we we believe that we
Speaker #8: Year, your non-GAAP operating margins imply about 11.6% for the full year. And I understand there's a 100 to 200 basis point headwind due to FX. We don't see this impact.
Speaker #8: But that operating margin is actually lower than what you reported in fiscal '25, and the growth is, as Arjun mentioned, eight, nine, ten points lower.
Are putting numbers that are achievable and doable and you know we the biggest change in recent appreciation of the Israeli shekel happened in the last few months. Uh we have 55% of our headcount in Israel and this is a very concentrated primarily contributing to the impact of FX. We also prioritizing investment in the SLG motion and the AI as you heard in the
Speaker #8: Why shouldn't we see margins kind of inflect a little bit more over the next year if this kind of high teens, 20% growth rate is likely—probably what the right growth rate for the company is over the next year or two?
Prepared remarks. And this is front loaded the cost that basically takes a bit longer for the payoff time and this is the impact on margins.
Very helpful. Thanks for taking my questions.
Scott Berg: Very helpful. Thanks for taking the questions.
Speaker #7: Hi, Scott. Thanks. So just to reiterate, maybe that given the current macro and demand environment, we believe that we are putting numbers that are achievable and doable.
Eliran Glazer: Hi Scott. Thanks. So just to reiterate maybe that given the current macro and demand environment, we believe that we are putting numbers that are achievable and doable. And the biggest change in recent appreciation of the Israeli shekel happened in the last few months. We have 55% of our headcount in Israel, and this is very concentrated, primarily contributing to the impact of FX. We also prioritize investment in the SLG motion and AI, as you heard in the prepared remarks. And this is front-loaded cost that basically takes a bit longer for the payoff time. And this is the impact on margins.
Operator: Next question comes from the line of Ryan McWilliams with Wells Fargo. Your line is open.
Next question comes from the line of Ryan McWilliams with Wells Fargo, your line is open.
Hey thanks. Take the question.
Speaker #7: And the biggest change in recent appreciation of the Israeli shekel happened in the last few—our headcount in Israel. And this is very concentrated, primarily contributing to the impact of FX.
Eliran Glazer: Hey. Thanks for taking the question. So investors are clearly worried about the threat of AI to solve for here, but I think there's a fair case to be made that not every workflow needs to be generative and that it can make more sense to build agents off your already established workflows that work 100% of the time. So with that in mind, we'd love to hear some of the attributes about why it might make the most sense for a monday customer to build agents within monday itself instead of outside the platform. Thanks.
Speaker #7: We also prioritize investment in the SOG you heard in the prepared remarks. And this is front-loaded cost that basically takes a bit longer for months.
Speaker #7: Motion and AI, as the payoff time—and this is—we have 55% of
So investors are clearly worried about the threat of AI to software here, but I think there's a fair case to be made that not every workflow needs to be generative and that I can make more sense to build agents off your already established workflows work, you know, 100% of the time. So with that, in mind, you know, would love to hear from the attributes about why it might make the most sense for our Monday customer to build agents within Monday itself instead of outside the platform.
Thanks.
Speaker #7: margins. Very helpful.
Eliran Glazer: Yeah. Hi, Ryan. This is Eliran. So this is exactly how we think about things. I think people underestimate how important it is when you have all your data and processes and workflows inside a platform. And then the ability to create agents on top of it and get significant value because of that is exactly what we aim for. We've done the same with Sidekick. The fact that Sidekick knows everything about your organization really helps our customers kind of figure out everything about their account. And the same goes for our agents offering. With the agents offering, not only can you scale your business based on agents, but also it knows everything about your workflows, your data, your history. It's also secure, enterprise-grade.
Scott Berg: Very helpful. Thanks for taking my questions.
Speaker #6: Thanks for taking my
Speaker #6: questions.
Speaker #5: Next question comes from the line.
Operator: Next question comes from the line of Ryan MacWilliams with Barclays. Your line is open.
Speaker #5: of Ryan McWilliams with Wells
Speaker #5: Fargo. needs to be generative.
Speaker #5: open.
Speaker #6: Hey, thanks for taking the question.
Arjun Bhatia: Hey. Thanks for taking the question. So investors are clearly worried about the threat of AI to solve for here, but I think there's a fair case to be made that not every workflow needs to be generative and that it can make more sense to build agents off your already established workflows that work 100% of the time. So with that in mind, we'd love to hear some of the attributes about why it might make the most sense for a Monday customer to build agents within Monday itself instead of outside the platform. Thanks.
Speaker #6: But I think there's a fair case to be made 100% of the time. So, with that in mind, we'd love to hear some of the impact for a Monday customer.
Speaker #6: And that it can make more Your line is sense to build agents off your
Speaker #6: already established workflows that work I think we all agree that the
Yeah, hi Ryan. This is Iran. So this is exactly how we think about things. I I think um people on the estimate, how it's important is um when you have all your data and processes and workflows uh, inside of platform and then the ability to create agents on top of it and get um, significant value because of that is exactly what we're aiming for. Um, we've done the same with psychic, the fact psychic knows everything about your organization. Uh, really helps our customers kind of figure out everything about their account and the same goes for our a, a
Speaker #6: To build agents within Monday itself, instead of attributes about why it might make the most sense outside the platform.
Speaker #7: Yeah. Hi, Ryan. This is Iran. So this is exactly how we think about
Eran Zinman: Yeah. Hi, Ryan. This is Eran. So this is exactly how we think about things. I think people underestimate how important it is when you have all your data and processes and workflows inside a platform. And then the ability to create agents on top of it and get significant value because of that is exactly what we aim for. We've done the same with Sidekick. The fact that Sidekick knows everything about your organization really helps our customers kind of figure out everything about their account. And the same goes for our agents offering. With the agents offering, not only can you scale your business based on agents, but also it knows everything about your workflows, your data, your history. It's also secure, enterprise-grade.
Speaker #7: I think people underestimate how important it is when you have the threat of AI to solve for here. You have all your data, and processes, platform.
Eliran Glazer: Given all of that, we see a lot of potential in our new agent offering, and we see a lot of excitement for our products. I think we all agree that the future of software will change over time with agents, but I think the way the transition will go is very different than how we imagine it. I think we have a significant advantage once we introduce these capabilities to capture significant value of those agents.
Agents offering, uh, with the agents offering. Uh, not only you can scale your business based on agents, but also it knows everything about your workflows, your data, your history. Uh, it's also secure Enterprise grade. So, given all that, um, we see a lot of potential, you know, new agent offering. And we see a lot of excitement for our products
Speaker #7: And then the ability to create agents on top of it and get significant value because of that is exactly what we aim for. We've done the same with Sidekick.
Speaker #7: The and workflows, inside a
Speaker #7: organization. Really everything about their account. And the same goes helps our customers kind of figure out for our agents offering. With the agents that not every workflow offering, not only you can scale your business based on
I think we all agree that the future of software uh will change over time with agents but I think the way the transition will go uh, is very different than how we manage it. And I think we have the significant Advantage, uh, once we introduce this capabilities, uh, to capture significant value of those agents
Arjun Bhatia: I appreciate the color there. Then for Eliran, just on the free cash flow guidance for this year, is there any extra conservatism baked into that number? And then anything to call out in the differences between the initial starting point between the op margin and the free cash flow margin? They just look a little tighter than in years past. Thanks.
Speaker #7: History. It's also workflows, your data, your all of that. We see a lot of secure, enterprise-grade potential in our new agent. So, given products.
Eran Zinman: So given all of that, we see a lot of potential in our new agent offering, and we see a lot of excitement for our products. I think we all agree that the future of software will change over time with agents. But I think the way the transition will go is very different than how we imagined. And I think we have a significant advantage once we introduce these capabilities to capture significant value of those agents.
I appreciate the color there and then for Hiller on, just on the free cash flow guidance for this year. Um, is there any extra conservatives on picked in for that number and then any thing to call out in the differences between the initial starting point between uh the op margin and the free cash flow margin. They just look a little tighter than a Year's best thanks.
Eliran Glazer: Thanks, Ryan, Eliran. So a few things impacted our free cash flow forecast for 2026. One is the FX impact. The Israeli shekel, as I mentioned, is very strong versus the US dollar, and it happened really fast in Q4 of last year going into this year. Obviously, we said that we are increasing investment in AI and SLG motion. There is also the lower interest rate environment, and as we move to profitability, we might be paying taxes. And the last thing is the share buyback. As we continue to prioritize opportunistic share buyback, obviously taking into account the current level of the share price, the reasons that I mentioned, all of the above is impacting our free cash flow guidance for 2026.
Speaker #7: The future of software will change over time with offerings—agents. And we see a lot of excitement for our agents, but I think the way the transition will go is very different than how we imagined it. But also, it knows everything about your...
Speaker #7: Advantage once we introduce this, and I think we have capabilities to capture significant value, agents.
Uh, thanks Ryan, everyone. So, uh, a few things, impacted our free cash flow, uh, for up for 2026 money is the FX impact. The Israeli Shaker. As I mentioned, is very strong versus the US dollar and it happens really fast, uh, in Q4 last year, going into this year. Uh, obviously we said that we are increasing investment in Ai and SLG motion. There is also the lower interest rate environment. And, uh, as we move,
Speaker #6: I appreciate the color there. And then for Eliran, just on the free, is there any extra conservatism baked into that number? And then, anything to call out in the differences between the initial starting point between the op margin and the free cash flow margin?
Arjun Bhatia: I appreciate the color there. And then for Eliran, just on the free cash flow guidance for this year, is there any extra conservatism baked into that number? And then anything to call out in the differences between the initial starting point between the operating margin and the free cash flow margin? They just look a little tighter than in years past. Thanks.
Speaker #6: They just look a little
To profitability, uh, we might be, uh, paying taxes. And the last thing is the share buyback, as we continue to prioritize. Uh, uh, opportunistic. Share buyback, obviously, taking into account, the current level of the share price. Uh, the reasons that I mentioned, all of the above is impacting, our free free cash flow, guidance for 2026.
Speaker #6: Thanks.
Speaker #7: Thanks, Ryan. Eliran. So a few things flow forecast for 2026. One is the of those FX impact. The Israeli shekel, as I mentioned, is very strong versus the US dollar.
Eran Zinman: Thanks, Ryan. Eliran, so a few things impacted our free cash flow forecast for 2026. One is the FX impact. The Israeli shekel, as I mentioned, is very strong versus the US dollar. It happened really fast in Q4 of last year going into this year. Obviously, we said that we are increasing investment in AI and SLG motion. There is also the lower interest rate environment. As we move to profitability, we might be paying taxes. The last thing is the share buyback. As we continue to prioritize opportunistic share buyback, obviously taking into account the current level of the share price, the reasons that I mentioned, all of the above is impacting our free cash flow guidance for 2026.
Operator: Our next question comes from the line of Josh Baer with Morgan Stanley. Your line is open.
Our next question comes from the line of Josh Bayer with Morgan, Stanley. Your line is open.
Speaker #7: And it happened really fast in Q4 of last year, going into—impacted our free cash this year. Obviously, we said that we are increasing investment in also the lower interest rate environment.
Arjun Bhatia: Thanks for the question. Just wondering, with all the rapid pace of innovation, new technologies across the workforce, how are your customers or potential customers evaluating monday.com among all the alternatives out there? Are you seeing any shifts in sales cycles as you're moving upmarket or any changes to customer behaviors?
Speaker #7: And as we move to profitability we might be paying taxes. And the last thing is the share buyback. As we continue to prioritize opportunistic share buyback, obviously taking into account the current level of the share price, the reasons that I mentioned, all of the above is impacting our free cash flow guidance for AI and SOG motion.
Thanks for the question. Just wondering with all the rapid pace of innovation new technologies across the workforce. How are your customers or potential customers evaluating Monday? Among all the Alternatives out there. Are you seeing any shifts in sales Cycles as you're moving up Market or or any changes to customer behaviors?
Casey George: Hi. Hi, Josh. This is Casey. So a couple of things. One, obviously, by the numbers, we're very encouraged at the progress we're making upmarket. So we're showing up in different ways with these customers, especially with AI. And as I speak to customers, they're not necessarily looking for a science project. And Eliran touched on this a little bit. They're interested in having a trusted partner and a trusted platform so that they can deploy this technology in a trusted way. So for that, it's showing up in our retention numbers. It's showing up in our customer acquisition and obviously the cohort of customers that are 50,000 or greater. So with that, this is truly a differentiator for us. We're not running away from AI. We're embracing this and leading the market with it. So that's what I see.
Speaker #7: 2026. There is
Hi. Hi. Uh, Josh, this is Casey so a couple things 1, obviously, by the, by the Numbers, we're, we're very encouraged that the progress we're making up market. So we're showing up in different ways with these customers, especially with AI.
Speaker #5: Our next question comes
Operator: Our next question comes from the line of Josh Baer with Morgan Stanley. Your line is open.
Speaker #5: From the line of Josh Bayer with Morgan Stanley, your line is open.
Speaker #5: open. Thanks for the question.
Casey George: Thanks for the question. Just wondering, with all the rapid pace of innovation, new technologies across the workforce, how are your customers or potential customers evaluating Monday among all the alternatives out there? Are you seeing any shifts in sales cycles as you're moving upmarket or any changes to customer behaviors?
Speaker #6: Just wondering, with all the rapid pace of innovation and new technologies, are customers or potential customers evaluating Monday among cash flow guidance for this year there?
Speaker #6: Are you seeing any shifts in sales cycles as you're moving up market, or any changes to customer alternatives out?
Speaker #7: Hi. Hi, Josh. This is Casey. So a couple of things. One, obviously, by the numbers, we're very encouraged that the progress we're making up market.
Casey George: Hi. Hi, Josh. This is Casey. So a couple of things. One, obviously, by the numbers, we're very encouraged at the progress we're making upmarket. So we're showing up in different ways with these customers, especially with AI. And as I speak to customers, they're not necessarily looking for a science project. And Eliran touched on this a little bit. They're interested in having a trusted partner and a trusted platform so that they can deploy this technology in a trusted way. So for that, it's showing up in our retention numbers. It's showing up in our customer acquisition. And obviously, the cohort of customers that are 50,000 or greater. So with that, this is truly a differentiator for us. We're not running away from AI. We're embracing this and leading the market with it. So that's what I see. That's what we see when we engage with customers.
Casey George: That's what we see when we engage with customers, and it's being validated in the numbers as well as we move upmarket.
And as I speak to customers, they're not necessarily looking for a science project in in Iran touched on this, a little bit. You know, they're interested in having a trusted partner and a trusted platform so that they can deploy this technology in a trusted way. So for that, we are it's showing up in our retention numbers. It's showing up in our customer acquisition and obviously the cohort of customers that are 50k or greater. So with that, you know, this is truly a differentiator for us for us. We're not running away from AI. We're embracing this and leading and leading the market with it. So, that's what I see. That's what we see when we engage with customers and it's being validated in the numbers as well as we move up Market.
Speaker #7: So we're showing
Speaker #7: Up in different ways with these customers. And as I speak to customers, they're not necessarily looking for a science project. And Eran touched on this a little bit.
Arjun Bhatia: Okay. That's helpful, Casey. Just a quick follow-up on the margin topic. Any sense for gross margins in 2026?
Okay, that's helpful. Casey and just a quick follow-up on the on the margin topic. Uh, any sense for gross margins in 2026
Speaker #7: They're interested in having a trusted behaviors partner and a trusted platform so that they can deploy this technology in a trusted way. So for that, it's showing our customer acquisition.
Eliran Glazer: Yeah. So hi, it's Eliran. What we said is in our recent investor day that we are expecting gross margin to be mid to high eighties, and we believe this is going to be the case for 2026.
Yeah. So uh hi, it's 11. What we said is uh in our recent uh uh investor day that we are expecting growth margin to be need to, I hate it. And uh we believe this is going to be the case for 2026.
Speaker #7: And obviously, the cohort of customers
Okay, got it. Thank you.
Speaker #7: that are 50K or up in our retention numbers. It's showing up in greater. So with that, this is truly a differentiator the workforce, how are your for us.
Arjun Bhatia: Okay. Got it. Thank you.
Operator: Next question comes from the line of Jackson Ader with KeyBank Capital Markets. Your line is open.
Speaker #7: We're not running away from AI. We're embracing this and leading the market with it. See, when we engage with customers, it's being validated in the numbers as well as we move up.
Next question comes from the line of Jackson either with keybanc capital markets, your line is open.
Arjun Bhatia: Great. Hey. This is Nate Ruiz on for Jackson Ader. Thanks for taking our questions today. So I was wondering how much core versus new product growth is baked in for fiscal year 2026? Thank you.
Great. Hey, this is Nate Ruess on for Jackson. Ater. Thanks for taking our questions today.
Casey George: It's being validated in the numbers as well as we move upmarket.
Um, so I was wondering how much core versus new product growth is baked in for fiscal year 2026. Thank you.
Speaker #6: Okay, that's helpful, Casey. And just a quick follow-up on the margin topic. Any sense for gross margins in—
Casey George: Okay. That's helpful, Casey. Just a quick follow-up on the margin topic. Any sense for gross margins in 2026?
Eliran Glazer: Hi. This is Elan. So maybe just to expect, what we took into account is the continuation of the business that we currently see, meaning the four product lines that we have in monday: monday work management, monday CRM, monday service, and monday dev, continue also to see some revenue coming from the AI product that we have. So we believe this is going to be the trajectory for fiscal year 2026, mostly focusing on the existing product. The new product will continue to become a larger part of our business as we move forward to 2027.
Speaker #7: Yeah, 2026? So that's what I see. That's what we, Eliran, what we said in our recent Investor Day is that we are expecting gross margin to be mid to high 80s.
Eran Zinman: Yeah. So hi, it's Eliran. What we said is in our recent investor day that we are expecting gross margin to be mid-to-high 80s. And we believe this is going to be the case for 2026.
Speaker #7: And we believe this is going to be the case for the market.
Casey George: Okay. Got it. Thank you.
Speaker #6: it. Thank
Speaker #5: Next question comes you.
Operator: Next question comes from the line of Jackson Ader with KeyBanc Capital Markets. Your line is open.
Speaker #5: from the line of Jackson Ader with Great.
Speaker #5: KeyBanc Capital Markets. Your line is open.
Speaker #5: open.
Arjun Bhatia: Great. Hey. This is Nate Ruiz on for Jackson Ader. Thanks for taking our questions today. So I was wondering how much core versus new product growth is baked in for fiscal year 2026? Thank you.
Speaker #6: Hey, this is Nate Ruiz. I'm for Jackson Ader. For 2026, how much core versus new product growth is baked in for fiscal year 2026? Thanks.
Speaker #6: Thanks for taking our questions
Hi, uh, this is Alan. So maybe just to expect when we took a, what, you know, we took into account is the continuous of the business that we currently see. Meaning the 4 product lines that we have in Monday. Uh Monday Work Management. Monday CRM, Monday service and Monday. Dev continue also to see, uh, some Revenue coming from the AI products that we have. Uh, so we believe this is going to be the trajectory for fiscal year, 2026 mostly focusing on the existing products, and the new product will continue to become a larger part of our, uh, business as we move forward to,
2027.
Great. Thank you so much very helpful.
Arjun Bhatia: Great. Thank you so much. Very helpful.
Next question.
Speaker #7: Hi. This is Eliran. So maybe just to
Eran Zinman: Hi. This is Eran. So maybe just to recap what we took into account is the continuity of the business that we currently see, meaning the four product lines that we have in monday: Monday Work Management, Monday CRM, Monday Service, and Monday Dev, continue also to see some revenue coming from the AI product that we have. So we believe this is going to be the trajectory for fiscal year 2026, mostly focusing on the existing product. And the new product will continue to become a larger part of our business as we move forward to 2027.
Operator: Next question comes from the line of Mark Murphy with J.P. Morgan. Your line is open.
See. With JP Morgan? Your line is open.
Speaker #7: what we took into account is the continuous of the business that we today. currently see. Meaning the four
Eliran Glazer: Thank you. Can you please quantify the headwind from the no-touch business in 2026 or the SMB segment in general? In other words, is it a 5-point headwind? Is it a 10-point headwind, etc.? And then I have a quick follow-up.
Speaker #7: product lines that we have in
Speaker #7: CRM, Monday Service, and so I was wondering how Monday Dev continues also to see some revenue coming from the Monday, Monday Work Management. Monday believes this is going to be the trajectory for fiscal year 2026, mostly focusing on the existing product.
Thank you. Can you uh, please quantify the headwind from the no touch business in uh, 2026 or the SMB, um, segment in general. In other words, is it, is it a 5-point headwind? Is it? A 10-point headwind, etc. And then I have a quick follow-up.
Eliran Glazer: Hi, it's Roy. So the situation is that it's a bit choppy, okay, like we mentioned. So I can't predict the future on what performance marketing will do. I'll tell you that we looked into the year in the way that it will continue to be choppy, and that's how we built the guidance.
Speaker #7: And the new product will continue to become a larger part of our business as we move forward to
Speaker #7: 2027.
Speaker #6: Great. Thank
Arjun Bhatia: Great. Thank you so much. Very helpful.
Speaker #6: You are so much. Very you. Helpful.
Speaker #5: Next question comes from the line of Mark Murphy with Open.
Operator: Next question comes from the line of Mark Murphy with J.P. Morgan. Your line is open.
Um, hi Troy. So, uh, the the situation is that it's uh bit choppy, okay? Like we mentioned so we we don't I can't predict the future on what uh Performance Marketing would do I tell you that like uh uh we uh, looked into the year in the way that it will continue to be choppy and that's like how we we built the guide.
Speaker #6: Thank you. Can you please quantify the headwind from the Okay. Got no-touch business in
Speaker #6: Thank you. Can you please quantify the headwind from the Okay. Got no-touch business in 2026 or the SMB segment in general? In JP Morgan.
Eran Zinman: Thank you. Can you please quantify the headwind from the no-touch business in 2026 or the SMB segment in general? In other words, is it a 5-point headwind? Is it a 10-point headwind, etc.? And then I have a quick follow-up.
Eliran Glazer: Okay. So it could be you're baking in something like a 5-point headwind there maybe?
Okay, but so it could be your baking in something like a 5 point 5-point headwind there. Maybe?
Eliran Glazer: Again, we don't know how to predict what it will do.
Again, we we don't know. Uh how to predict uh what what it will.
Speaker #6: other words, is it a five-point headwind? Is it a ten-point headwind, etc.?
Speaker #6: And then I have a quick—your line is open.
Eliran Glazer: Yeah. Okay. And then Eliran, just thinking back to the last earnings cycle, you did blast the $1.5 billion revenue consensus for 2026. I don't think anyone really put any faith in that comment. But just irrespective, could you explain what changed fundamentally that leads to the lower outlook today? And I'm just trying to understand the I think you said you're no longer discussing the FY27 revenue target, but you said somehow the fundamentals are unchanged. I think we could just use a little bit of straight talk. I'm just trying to understand what has changed here.
Eran Zinman: Hi, it's Roy. So the situation is that it's a bit choppy, okay, like we mentioned. So I can't predict the future on what performance marketing will do. I'll tell you that we looked into the year in the way that it will continue to be choppy. And that's how we built the guidance.
Speaker #7: So the situation is that it's mentioned. Hi, it's Roy. what performance a bit choppy, okay? marketing will do. I'll tell you Like we year in the way that it will continue to be choppy.
Speaker #7: And that's how we looked into and built the guidance.
Speaker #6: Okay, so it could be you're baking in something like a five-point headwind there.
Eran Zinman: Okay. So it could be you're baking in something like a 5-point headwind there, maybe?
Eran Zinman: Again, we don't know how to predict what it will do.
Managed Care.
Speaker #7: to predict what it
Speaker #7: will
Speaker #7: Will again, we don't know how. Yeah.
Speaker #7: do.
Eliran Glazer: Hey, Mark, it's Elan. So it's a fair question, but as we said, the last time we gave guidance, we felt and we believed, based on the visibility that we had at the time, that the 1.5 number is the number that we are going to achieve. It looked reasonable to us. Since then, there is a lot of noise in the market in terms of macroeconomy. As we said, our no-touch business continued to be choppy and volatile. We didn't see the improvement that we expected to see. And we see shift in the business, and shift in the business takes time. So this is why we thought, based on what we know today, that it would be prudent to reset the guidance that we are giving.
Eran Zinman: Yeah. Okay. And then, Eliran, just thinking back to the last earnings cycle, you did bless the $1.5 billion revenue consensus for 2026. I don't think anyone really put any faith in that comment. But just irrespective, can you explain what changed fundamentally that leads to the lower outlook today? And I'm just trying to understand the, I think you said you're no longer discussing the FY27 revenue target, but you said somehow the fundamentals are unchanged. I think we could just use a little bit of straight talk on just trying to understand what has changed here.
Speaker #6: Okay. And
Speaker #6: Then Eliran, just thinking back to the last earnings cycle, you did blast the $1.5 billion revenue consensus for 2026. I don't think anyone really put any faith in that, maybe.
Speaker #6: irrespective, can you explain what
Speaker #6: changed fundamentally that leads to the lower outlook that today? And I'm just trying to understand the I comment. think you said you're no longer But just discussing the are unchanged.
Speaker #6: I think we could just use FY27 revenue target, a little bit of a little bit of straight talk on just trying to understand what has changed here.
Speaker #6: I think we could just use the FY27 revenue target. A little bit of straight talk on just trying to understand what has changed here.
Eliran Glazer: Given the current macro, as I mentioned, and the demand environment, we believe that it's appropriate to put numbers that reflect what we can execute against. Sorry, with high confidence. This is the reason why we did this adjustment.
Eran Zinman: Hey, Mark Etherean. So it's a fair question. But as we said, the last time we gave guidance, we felt and we believed, based on the visibility that we had at the time, that the 1.5 number is the number that we are going to achieve. It looked reasonable to us. Since then, there is a lot of noise in the market in terms of macroeconomy. As we said, our no-touch business continued to be choppy and volatile. We didn't see the improvement that we expected to see. And we see shift in the business. And shift in the business takes time. So this is why we thought, based on what we know today, that it would be prudent to reset the guidance that we are giving.
Speaker #7: It's Eliran. So, it's a fair question, but as we said, the last time we gave guidance, we felt and we believed, based on the visibility that we had at the time, that the $1.5 number is the number that we are going to achieve.
Hey Market 31, so it's a fair question. But uh, as we said the last time, you know, we gave guidance. We failed and we believed based on the feasibility that we had at the time that the 1.5 number is the number that we are going to achieve it. Look reasonable to us. Uh, since then there's a lot of noise in the market in terms of micro economy. Uh, as we said, our no touch business. Continued to be choppy and volatile. We didn't see the Improvement that we, uh, expected to see and we see shift in the business and shift in the business takes time. Um, so this is why we thought, you know, based on what we know today, that it would be, uh, student to reset the guidance that we are giving and we, you know, uh, given the, the current macro as I mentioned, and then, the many environment we believe that it's appropriate.
To to put numbers that reflect what we can execute again against sorry with high confidence. And this is the reason why we did this adjustment.
Speaker #7: It looked reasonable to us. Since then, there has been a lot of noise in the market in terms of macroeconomy. As we said, our environment is uncertain and volatile.
Eliran Glazer: Okay. So it's noise in the market, low touch being volatile. There's a shift in the business, but we don't know what you're embedding for the low touch piece of it. We're going to kind of leave it at that?
Okay, so it it's, it's noise in the market, it's low touch being volatile, there's a shift in the business, but but we don't know what you're embedding for for the low touch, uh, piece of it. Is that we're going to kind of leave it at that.
Speaker #7: We didn't see the improvement that we expected to see. And we see shift in the business. And shift in the business takes time. So we know today that it would be prudent this is why we thought based on what to reset the guidance that we are giving.
Eliran Glazer: Yeah. And we are expecting it not to get any better from what we have seen in fiscal year 2025. We didn't see the improvement that we hoped for or we believed that we were going to see. But we believe it might be choppy. It might be. It will be choppy throughout 2026.
Speaker #7: And we given the current macro, as I mentioned, and then the many environment, we believe that it's appropriate to put numbers that no-touch business continued to be choppy Against, sorry, with high confidence.
Eran Zinman: Given the current macro, as I mentioned, and the demand environment, we believe that it's appropriate to put numbers that reflect what we can execute against, sorry, with high confidence. This is the reason why we did this adjustment.
Yeah, we we, we are expecting. It's not to get any better from what we have seen in fiscal year 2025. We didn't see the Improvement that we hope for, or we believe that we're going to see. So we believe it might be, uh, you know, choppy. It will not might be, it will be choppy throughout 2026.
Next question.
Operator: Next question comes from the line of Brent Thill with Jefferies. Your line is open.
Kind of brand deal with Jeffrey, your line is open.
Speaker #7: And this is the reason why we did this
Speaker #7: adjustment. Okay.
Scott Berg: Thanks. When you think about the enterprise go-to-market motion, I think there's been a lot of pent-up concern about what's happening there and the strategy. Can you just maybe walk through what you're seeing at the higher end of the market?
Eran Zinman: Okay. So it's noise in the market, low touch being volatile. There's a shift in the business, but we don't know what you're embedding for the low touch piece of it. We're going to kind of leave it at that?
Speaker #6: So it's noise in the market, low touch being volatile, there's a shift in the business, but we don't know what you're embedding for the low touch.
Speaker #6: Piece of it. We're going to kind of leave it at that.
Uh thanks. Um, when you think about the, the Enterprise uh, go to market motion, I think there's been a lot of pent-up concern about what what's happening there, and the the strategy can you just maybe walk through what you're seeing at the higher end of the market.
Eran Zinman: Yeah. We are expecting it not to get any better from what we have seen in fiscal year 2025. We didn't see the improvement that we hoped for or we believed that we were going to see. But we believe it might be choppy. It might be. It will be choppy throughout 2026.
Speaker #7: expecting it's not to get any better from what we have seen in fiscal year we hoped for or we believed that we are going 2025.
Casey George: Yeah. So we're seeing a couple of things. One, we continue to accelerate upmarket on the back of a couple of things. One, obviously, our clients like our products. They really do. One, that's the first one. Second one is they look to vendor consolidation, right? They're looking to rationalize their vendor suite, and we have a very healthy portfolio that we can offer to our clients so they continue to consume more of our products. And then the expansion piece. Since it's early days of us moving upmarket, the ground's very fertile. And so when they're looking to consolidate, we're well-positioned to take advantage of that. So those are three of the key factors for us. And then I would say it's early days again, but the acceleration of AI, we're engaging in different conversations than we were before because of the technology we have embedded in our platform.
Speaker #7: To see. But we believe it might be choppy. We didn't see the improvement that might be. It will be choppy throughout 2026.
Speaker #5: Next question comes from the line of Brent Thill with Jefferies. Your line is open.
Operator: Next question comes from the line of Brent Thill with Jefferies. Your line is open.
Speaker #5: open. Thanks.
Brent Thill: Thanks. When you think about the enterprise go-to-market motion, I think there's been a lot of pent-up concern about what's happening there and the strategy. Can you just maybe walk through what you're seeing at the higher end of the market?
Yeah. So uh we're seeing a couple of things 1. We we continue to accelerate up Market uh, on the back of a, a couple things 1. Obviously our, our clients like our products. They really do 1. Uh, that's the first 1 second 1 is they, they look to, you know, vendor consolidation, right? They're looking to rationalize their vendor suite and we have a, a very healthy portfolio that we can offer to our clients. So they can, they continue to consume more of our products.
Speaker #6: The enterprise—when you think about go-to-market motion, I think there's been a lot of pent-up concern about what's happening there and the strategy. Can you just maybe walk through what you're seeing in the market?
Speaker #6: seeing at the higher end of the Yeah.
And then the expansion piece since its early days of us, moving up Market the grounds very fertile and so when they're looking to consolidate, we're well positioned to take advantage of that. So those are 3 of the key factors for us.
Casey George: Yeah. So we're seeing a couple of things. One, we continue to accelerate upmarket on the back of a couple of things. One, obviously, our clients like our products. They really do. One, that's the first one. Second one is they look to vendor consolidation, right? They're looking to rationalize their vendor suite. And we have a very healthy portfolio that we can offer to our clients so they continue to consume more of our products. And then the expansion piece. Since it's early days of us moving upmarket, the ground's very fertile. And so when they're looking to consolidate, we're well-positioned to take advantage of that. So those are three of the key factors for us. And then I would say it's early days again, but the acceleration of AI, we're engaging in different conversations than we were before because of the technology we have embedded in our platform.
Speaker #7: we continue to accelerate couple of things. One, So we're seeing a back of a couple of things. One, obviously, our up market on the do.
And then I would say, you know, it's early days again but the acceleration of AI, we're engaging in different conversations than we were before because of the technology, we have embedded in our platform.
Casey George: We're pretty bullish on the move upmarket and looking forward to another good year.
Speaker #7: One, that's the first one. Second one is they look—clients like our products. To vendor consolidation, right? They're looking to rationalize their vendor suite, and we have a very healthy portfolio that we can offer to our clients so they continue to consume more of our products.
So um, you know, pretty bullish on the move up market and um looking forward to, you know, another another good year. Maybe 1 thing I would add friend. This is Ron.
Eliran Glazer: Maybe one thing I would add, Ryan. This is Eliran.
Casey George: Go ahead.
Eliran Glazer: Yeah. Just wanted to add one more thing on top of what Casey said, is that we actually see highest levels of gross retention across our 50,000 cohort now at 91%. This number has been growing quarter after quarter for the past 2 years. Also, we see renewal rates in the high 90s. So overall, we said that this segment of the business has been performing really well. We have a high degree of confidence, not just for the execution so far, but also forward-looking.
Speaker #7: And then the expansion piece. Since it's market, the ground's very reflect what we can execute again. early days of us moving up fertile. And so when they're looking to consolidate, we're well positioned to take advantage of that.
Speaker #7: So those are three of the key factors for us. And then I would say it's early days were before. Because of the again, but the acceleration of AI.
Speaker #7: Engaging in different conversations than we platform, so pretty bullish on the move-up we're seeing in the market. And looking forward to another good Q4, this is.
Speaker #7: technology, we have embedded in our that we actually Go ahead.
Go ahead. Yeah. Just uh, wanted to add 1 more thing on top of what Casey said is that, um, we we actually see, uh, hi, uh, uh, uh, high levels of cross retention across our 50k cohort. Now, at 91%, uh, this number has been going grow growing, uh, quarter of the quarter for the past 2 years. And also we see renewal renewal rates in the high 90s. So overall we said that this, uh, segment of the business, the Performing really well, we have high degree of confidence not just for the execution so far, but also, uh, forward-looking
Casey George: So pretty bullish on the move upmarket and looking forward to another good year.
Scott Berg: Just a quick follow-up, Casey. Are you still hiring pretty aggressively on enterprise reps, or is that slowed down?
Eran Zinman: Maybe one thing I would add, Brent. This is Eran.
And just a quick follow Casey, are you still hiring pretty aggressively on Enterprise reps? Or is that is that slowed down?
Casey George: Go ahead.
Casey George: We're growing our headcount in the organization in the mid-teams, especially around our AI specialists.
uh, we're we're growing our head count in the organization, but in the mid team,
Speaker #8: Yeah. Just wanted to add one more
Eran Zinman: Yeah. I just wanted to add one more thing on top of what Casey said, is that we actually see high levels of Gross Retention across our 50,000 cohort now at 91%. This number has been growing quarter after quarter for the past two years. Also, we see renewal rates in the high 90s%. Overall, I would say that this segment of the business has been performing really well. We have high degree of confidence, not just for the execution so far, but also forward-looking.
Speaker #8: thing on top of what Casey said is Ron.
Especially around our AI, uh, specialists.
Question.
Speaker #8: Cohort now at 91%. This number has been growing quarter after quarter for the past two years. And also, we see renewal rates in the high 90s.
Operator: Next question comes from the line of Howard Ma with Guggenheim Securities. Your line is open.
Is your line is open?
Casey George: Great. Thanks for taking the question. I have two. I'll just ask them together. The first for Eliran, a lot of effort was put into building the FY27 target. So I just want to be sure, is it off the table altogether, or is that still a possible scenario, but maybe it's more of a high-end scenario? And then for either Roy or for Eliran, what indications have your customers given you that they want to standardize on monday.com as both a provider of agents, so sales and service agents, and also an agentic workflow orchestration platform? Because as they evaluate other agentic tools that are offered by the Frontier Labs and the Hyperscalers, I imagine there's a lot of choice out there. So what gives you the confidence that you will retain and expand this usage on monday.com? Thank you.
Speaker #8: So overall, we said that this segment of the business has been performing really well. We have a high degree of confidence, not just for the execution so far, but also looking forward.
Brent Thill: Just a quick follow-up, Casey. Are you still hiring pretty aggressively on enterprise reps, or is that slowed down?
Speaker #6: you still hiring pretty aggressively on enterprise reps or is that slowed And just a quick follow-up, Casey, are down?
Great. Uh, thanks for taking the question. I I have 2. I'll just ask them together that the first 4 eleron a lot of effort was put into building the FY, 27 Target so I just want to be sure. Is it off the table altogether or is that still a possible scenario? But maybe it's, you know, more of a high-end scenario and then for either Roi or uh for Aeron
Speaker #8: We're growing our headcount in the organization, but in the mid-teens, especially around our AI specialists.
Casey George: We're growing our headcount in the organization in the mid-teens, especially around our AI specialists.
Speaker #5: Next question comes from the line
Operator: Next question comes from the line of Howard Ma with Guggenheim Securities. Your line is open.
Speaker #5: of Howard Ma with Guggenheim
Speaker #5: open. Great.
You know, there's a lot of choice out there. So what gives you the confidence that you will retain and expand this usage on money.com, thank you.
Eran Zinman: Great. Thanks for taking the question. I have two. I'll just ask them together. The first for Eliran, a lot of effort was put into building the FY27 target. So I just want to be sure, is it off the table altogether, or is that still a possible scenario? But maybe it's more of a high-end scenario. And then for either Roy or for Eliran, what indications have your customers given you that they want to standardize on monday.com as both a provider of agents, so sales and service agents, and also an agentic workflow orchestration platform? Because as they evaluate other agentic tools that are offered by the Frontier Labs and the hyperscalers, I imagine that there's a lot of choice out there. So what gives you the confidence that you will retain and expand this usage on monday.com? Thank you.
Speaker #9: Thanks for taking the question. I have
Speaker #9: two. I'll just ask them together. The first Securities.
Eliran Glazer: Hey, Howard. This is Eliran. Two first questions, and then I will defer to Roy and Eran. As I said, due to the macroeconomy and the choppiness that we have seen, this, the 2027 number, is currently off the table, and we are focusing on fiscal year 2026 execution.
Speaker #9: In building the gross retention across our 50K for Eliran—FY27 target—so I just want to be sure, is it off the table altogether, or is that still a possible scenario? Maybe it's more of a high-end scenario. A lot of effort was put in. Your line is...
Hey, Howard. This is Elon to a first question and then I will defer to Ryan Iran. Uh, as I said due to the, to the, uh, macroeconomy and the choppiness that we have seen, this is the 2027 number is currently off the table. And we are focusing on fiscal year, 2026 execution,
Speaker #9: And then, for either Roy or for Aaron, what they want to standardize on—what indications have your customers given you—of agents or sales and service agents, and also an agentic workflow orchestration platform?
Eliran Glazer: Yeah. And maybe, Howard, on the second part of the question about AI, I think, I feel the whole industry is living and breathing AI and aware of all the changes and improvement. But most of our customers, and I don't think we're in a unique position, are still trying to figure out what's the best way to leverage that technology. And for them, the best way to leverage that technology is use already systems they're using before where they have most of the data in the context and the workflows. And with that, they're trying and a vendor that they trust and love to use. And on that, they're trying to leverage their capabilities. They're more coming from a place of curiosity and trying to understand what's the best way to leverage that technology.
Speaker #9: Because as they evaluate other agentic tools that are offered by the frontier labs and the hyperscalers, I imagine there's a lot of choice out there.
Speaker #9: So what gives you the confidence that you will retain and expand this usage on monday.com? Thank you, monday.com, as both a provider.
Speaker #9: you. Hey, Howard.
Eran Zinman: Hey, Howard. This is Eliran. Two first questions, and then I will defer to Roy and Eran. As I said, due to the macroeconomy and the choppiness that we have seen, this is the 2027 number is currently off the table, and we are focusing on fiscal year 2026 execution.
Speaker #7: This is Eliran. Two first questions, and then I will defer to Roy and Aaron. As I said, due to the macroeconomy and the choppiness that we have seen, the 2027 numbers are currently off the table, and we are focusing on fiscal year 2026.
Speaker #7: execution. Yeah.
Eliran Glazer: Because of the relation that we've built and the way they use the product, they look to us as the vendor of choice. We see the interest. We see the engagement with the customers. We see the excitement on any new AI feature that we introduce. That gives a lot of confidence that monday can offer significant value with our AI offering.
Eran Zinman: Yeah. Maybe, Howard, on the second part of the question about AI. I think most look, I feel the whole industry is living and breathing AI. We're aware of all the changes and improvements. But most of our customers, and I don't think we're in a unique position, are still trying to figure out what's the best way to leverage that technology. For them, the best way to leverage that technology is use already systems they're using before where they have most of the data and the context and the workflows. With that, they're trying and a vendor that they trust and love to use. On that, they're trying to leverage their capabilities. They're more coming from a place of curiosity and trying to understand what's the best way to leverage that technology.
Speaker #8: And maybe Howard on the second part of the question about I feel the whole industry is the changes and improvement, AI. but most of our customers and I think most look, I don't think we're in a unique position.
Yeah, and maybe our on the second part of the question about AI. I I think most look, I feel, uh, the whole industry is living in breeding, AI, you know, where all the all the changes and Improvement. But most of our customers and I, I don't think we're a unique position, but I'm still trying to figure out what's the best way to leverage that technology and for them, it the best way to leverage that technology is use all these systems they're using before where they have most of the data from the contacts and the workflows and with that they're trying and a vendor that they trust and love to use. And on that, they're trying to Leverage The accessibility that they're more coming from a place of curiosity, and trying to understand what's the best way to address that that technology. And because of the relation that we built, and the way they use the product, they look to us is that vendor of choice. So we see the interest, we see the engagement with the customers. We see the excitement on any new AI feature that we introduced. Uh, that gives a lot of confidence that Monday can offer significant value with our AI offering. Yeah.
Eliran Glazer: Yeah. And hi, this is Roy. I can add that we also have mondayDB, which is basically the only DB tool out there that is enterprise-grade and to the level that companies would adopt internally. And we've built it that way. So there's a lot of interest in that, and it just blows their mind what they can build with it. And joining to what Casey said about consolidation, that's one of the main drivers. If you can take all those small ones, small applications, and merge them, it's very interesting for all our customers.
Speaker #8: I'm still trying to figure out what's the best way to leverage that technology. And for that technology, it's used already in systems they're using before, where they have most of the data, the context, and the workflows.
Speaker #8: And with that, they're trying, and a vendor that they trust them, the best way to leverage and love to use, and on that, they're trying to leverage the capabilities.
Speaker #8: They're more coming from a place of curiosity and trying to understand what's the best way to leverage that technology. And because of the relationship that we've built and the way they use the product, they look to us as the vendor of choice.
Eran Zinman: Because of the relation that we built and the way they use the product, they look to us as the vendor of choice. We see the interest. We see the engagement with the customers. We see the excitement on any new AI feature that we introduce. That gives a lot of confidence that Monday can offer significant value with our AI offering.
Speaker #8: So we see the interest. We see the engagement with the customers. We see the excitement on any new AI, living and breathing AI, and aware of features that we introduce.
And hi. This is Roy. I can add that. We also have Monday Vibe, which is basically the the only Vibe tool out there that is like Enterprise grade and like to the level that uh, you know, companies would adopt internally and we've built it that way. So there's a lot of interest in that and it just blows their mind, what they can build with it and, uh, joining to what Casey said about consolidation. That's like 1 of the main drivers, if you can, uh, take all those small ones, small application and merge them. Uh, it's very, uh, interesting for for all our customers.
Speaker #8: That gives a can offer significant value with our AI offering.
Eran Zinman: Yeah. And hi, this is Roy. I can add that we also have Monday Vibe, which is basically the only vibe tool out there that is enterprise-grade and to the level that companies would adopt internally. We've built it that way. So there's a lot of interest in that. And it just blows their mind what they can build with it. Joining to what Casey said about consolidation, that's one of the main drivers. If you can take all those small ones, small applications, and merge them, it's very interesting for all our customers.
Operator: Next question comes from the line of Steve Enders with Citi. Your line is open.
Next question comes from the line of Steve Anders with City Bank. Your line is open
Arjun Bhatia: Hi, great. Thanks for taking the questions this morning. Maybe just starting on mondayDB, I guess, what are maybe the main use cases that you're seeing customers build with that? And then how do you kind of view the learnings that you've had so far to potentially drive those kind of incremental use cases or kind of broaden them out across the rest of the customer base and drive incremental ARR from here?
Hi, great. Thanks for, um, thanks for taking the questions, uh, this morning. Um,
Speaker #7: level that enterprise-grade and to the companies would adopt internally. And we've built it that way. So there's a lot of interest in that, and build with it and joining to what Casey said it just blows their mind what they can That's one of the main drivers if you can take all those small ones and small applications and about consolidation.
Maybe just starting on, uh, on Monday Vibe. Um, I guess we're maybe like, the, the main use cases that you're seeing customers, uh, build with that. And then how do you kind of view? Uh, you know, the learnings that you've had so far to potentially, you know, drive. Those kind of incremental use cases or, or kind of broad of them out across the the rest of the customer base, and, and driving incremental are from here.
Speaker #7: Merge them. It's very interesting for all our customers.
Eliran Glazer: Thank you. So it's Roy. So we see a really wide variance in what customers do with mondayDB because essentially, they can do anything they want, and it's connected to their existing data platform users. So we see things from very small stuff like creating dashboards and presentation of data and reports to the higher end of building complete, really meaningful, large applications on top of it that they couldn't do before. And a lot of the great stuff we see is that in some areas where we were maybe it was a vertical or those type areas that we were not going to develop specific features for, mondayDB completes the gap and creates an amazing solution together with the whole of the other offering we have on the platform.
Speaker #5: Next question comes from the line of Steve Anders with Citibank. Your line.
Operator: Next question comes from the line of Steven Enders with Citigroup. Your line is open.
Speaker #5: open. Hi.
Arjun Bhatia: Hi. Great. Thanks for taking the questions this morning. Maybe just starting on Monday Vibe, I guess, what are maybe the main use cases that you're seeing customers build with that? And then how do you kind of view the learnings that you've had so far to potentially drive those kind of incremental use cases or kind of broaden them out across the rest of the customer base and drive incremental ARR from here?
Speaker #10: Great. Thanks for taking the questions. This morning. Maybe just starting on Monday Vibe, I guess, what are maybe the main use cases that you're seeing customers build with that?
Speaker #10: And then, how do you kind of view the learnings that you've had so far to potentially drive those kinds of incremental use cases, or kind of broaden them out across the rest of the customer base and drive incremental ARR from here?
Eran Zinman: Thank you. So it's Roy. So we see a really wide variance in what customers do with Vibe because essentially, they can do anything they want. And it's connected to their existing data platform users. So we see things from very small stuff like creating dashboards, presentation of data, and reports to the higher end of building complete, really meaningful, large applications on top of it that they couldn't do before. And a lot of the great stuff we see is that in some areas where we were maybe it was a vertical or those type areas that we were not going to develop specific features for, Vibe completes the gap and creates an amazing solution together with the whole of the other offering we have on the platform. And regarding monetization, this is a super we shared the numbers. And for us, it's the beginning.
Speaker #7: Roy: So we thank you. We see really wide variance in what customers do with Vibe, because essentially, they can do anything they want.
Speaker #7: And it's connected to their existing data platform users. So, we see things from very small stuff like creating dashboards and presentation of data and reports, to the higher end of building complete, really meaningful, large applications on top of it that they couldn't do before.
Um, thank you. So it's Roy. Um, so we see a really wide variance in what customers do with VIP because essentially they can do anything they want and it's connected to their existing data platform users. So we see things uh, from very small stuff like creating dashboards and presentation of data and reports to the higher end of building complete and really meaningful, uh, large applications on top of it that they couldn't do before. And a lot of the great stuff we see is that uh, in some areas where we were maybe it was a vertical or or those type areas that we were and not going to develop specific features for vyve completes the Gap and creates like a a, an amazing solution, uh, to
Together, with the whole of the other off doing we have on the platform.
Eliran Glazer: Regarding monetization, this is a super we shared the numbers, and for us, it's the beginning, and we're going to see where it evolves.
and regarding monetization, you know, this is like a super uh,
We shared the numbers. And for us, it's like the beginning. And we're, we're going to see where it evolves.
Arjun Bhatia: Okay. Great to hear. And then, maybe just on the performance marketing dynamics, I just want to clarify. It seems like you're assuming that's not getting better for 2026. It's kind of baked into the guide. I guess I just want to clarify that point. And then, I guess, secondly, just in terms of those dollars shifting to other channels, just what kind of ROI are you seeing, and just how are you kind of viewing, I guess, improvement or timeline in terms of those other channels beginning to drive, I guess, incremental performance from here?
Speaker #7: And a lot of the great stuff we see is that in some areas where we were—maybe it was a vertical or those type areas that we were not going to for—Vibe completes the gap and develops specific features platform.
Okay, great to um great to hear. Um and then maybe just on the the Performance Marketing.
Dynamics. Um, just
Speaker #7: together with the whole of the
I just want to clarify. It seems like you're assuming that's not getting better. This you know, for 26 was kind of like baking to the to the guide. Um I guess I'm I just want to clarify that point and then I guess secondly just in terms of those dollars shifting to other channels. Just what kind of like Roi are you seeing and and just how are you kind of viewing?
Speaker #7: And regarding monetization, this is another offering we have on the Super. We shared the numbers, creates an amazing solution, and we're going to see where it...
Uh, the I guess Improvement or timeline in terms of those other channels beginning to uh, beginning to drive, I guess incremental performance from here.
Eran Zinman: We're going to see where it evolves.
Speaker #7: evolves. Okay.
Eliran Glazer: Yeah. Thank you. So yeah, we expect 2026 to not be different than what we've seen so far with the choppiness in the performance marketing. And it mainly affects the small businesses, like Eliran said, in the smaller area. And we run a lot of campaigns, and we're shifting the budget to the ones who bring us the larger customers. They have larger landing, and they have more expansion opportunity and higher retention. So essentially, we're making that shift and driving more and more into those areas because they have much higher ROI for us, okay?
Arjun Bhatia: Okay. Great to hear. Then maybe just on the performance marketing dynamics, I just want to clarify. It seems like you're assuming that's not getting better for 2026. It's kind of baked into the guide. I guess I just want to clarify that point. And then I guess, secondly, just in terms of those dollars shifting to other channels, just what kind of ROI are you seeing? And just how are you kind of viewing, I guess, improvement or timeline in terms of those other channels beginning to drive, I guess, incremental performance from here?
Speaker #10: Great. And then maybe just on the performance, great to hear. Marketing, dynamics—just, I just want to clarify. It seems like...
Speaker #10: you're assuming that's not getting better for '26. It's kind of baked into the want to clarify that point. And then I guess secondly, shifting to other channels, just what kind of ROI are you seeing and just how are you kind of viewing the, I guess, improvement or timeline in terms of those other channels, beginning to drive incremental guide.
Speaker #10: performance from
Speaker #7: Yeah. Thank you
Speaker #7: Yeah. Thank you
Eran Zinman: Yeah. Thank you. So yeah, we expect 2026 to not be different than what we've seen so far with the choppiness in the performance marketing. And it mainly affects the small businesses, like Eran said, in the smaller area. And we run a lot of campaigns. And we're shifting the budget to the ones who bring us the larger customers. They have a larger landing. And they have more expansion opportunity and higher retention. So essentially, we're making that shift and driving more and more into those areas because they have much higher ROI for us, okay?
Different than what we've seen, uh, so far, uh, with the choppiness and and the Performance Marketing. Uh, and it mainly affects the small businesses like everyone said, and the smaller area. And um, we run a lot of campaigns and we're Shifting the budget to the ones who bring us the larger customers, they have a larger uh, Landing. Uh, and they have like more expansion opportunity and higher retention. Essentially, we're making that shift and and driving more and more into those areas because they have much higher Roi for us. Okay,
Next question comes from the line of DJ.
Speaker #7: '26 to not be different than what we expect we've seen so far. With the—just in terms of those dollars, I guess just choppiness in the performance marketing, and it mainly affects the small businesses like Eliran said and the smaller area.
Operator: Next question comes from the line of DJ Hynes with Canaccord. Your line is open.
Scott Berg: Hey, thank you. So maybe just going back to the low-code, can you talk a bit about what you're just seeing in terms of the decisioning process around choosing a low-code platform? I realize it's early, but as best as you can tell, are customers piloting multiple low-code tools and then settling on one? Is there going to be coexistence of all these different platforms inside of the same organization? I'm just trying to get a better sense for competitive dynamics here and kind of how those decisions are being made.
Speaker #7: And we run a lot of campaigns, and we're shifting the budget to the ones who bring us the larger, larger customers; they have more expansion opportunity.
Hey, thank you. Um so maybe just going back to the vibe coding C. Can you talk a bit about what you're just seeing, what you're seeing in terms of the decisioning process around choosing a Vibe? Coding platform. I, I realize it's early
But as best, as you can tell, like, our customers highlighting piloting multiple V coding tools and I'm settling on 1, is it going to be coexistence of all these different platforms inside the same organization. I'm just trying to get a better sense for competitive Dynamics here and kind of how those decisions are being made.
Speaker #7: And higher retention. So essentially, we're making that shift and driving more—and higher—ROI for us.
Eliran Glazer: Yeah. Hi, DJ. This is Eliran. So I think we need to distinguish between two different things. One is that we added the ability to low-code on top of a platform. So an existing monday customer and by the way, we're one of the only few enterprise companies that offer currently low-code within their platform. So our customers basically can leverage their existing data, workflows, and processes, and basically low-code on top of that almost anything they want in our platform. And our customers are building unbelievable things. This is part of the momentum that we see, the excitement that we see from our customers. And for me, I think low-code is an ability that maybe going forward, a lot of the software vendors will at some point embrace.
Speaker #7: Okay? because they have much
Speaker #5: Next question comes from
Operator: Next question comes from the line of DJ Hynes with Canaccord. Your line is open.
Speaker #5: The line of DJ Heinz with Canaccord—your line is open.
Speaker #11: Hey. Thank you. So maybe just going back to the vibe coding, can you talk a bit about what you're just seeing, what you're seeing in terms of the decisioning process around choosing early, but as best as you can tell, our customers piloting multiple vibe coding tools and then settling on one?
Brent Thill: Hey. Thank you. So maybe just going back to the Vibe coding, can you talk a bit about what you're seeing in terms of the decisioning process around choosing a Vibe coding platform? I realize it's early, but as best as you can tell, are customers piloting multiple Vibe coding tools and then settling on one? Is there going to be coexistence of all these different platforms inside of the same organization? I'm just trying to get a better sense for competitive dynamics here and kind of how those decisions are being made.
Speaker #11: Is it going to be coexistence of all these
Speaker #11: Different platforms inside of the same organization? I'm just trying to get a better sense for competitive dynamics here and kind of how those more into those areas, decisions are being...
Speaker #11: made. Yeah.
Eran Zinman: Yeah. Hi, DJ. This is Eran. I think we need to distinguish between two different things. One is that we added the ability to Vibe code on top of a platform. An existing monday customer and by the way, we're one of the only few enterprise companies that offer currently Vibe coding within their platform. Our customers basically can leverage their existing data, workflows, and processes, and basically Vibe code on top of that almost anything they want in our platform. Our customers are building unbelievable things. This is part of the momentum that we see, the excitement that we see from our customers. For me, I think Vibe coding is an ability that maybe going forward, a lot of the software vendors will at some point embrace.
Speaker #7: Hi, DJ. This is Iran. So, I think we need to distinguish between two different things. One is that we added the ability to vibe code on top of a platform.
Eliran Glazer: In addition to that, in addition to the ability to low-code within the platform, we also created a new go-to-market that allow customers looking for a new low-coding solution to find monday as one of the alternatives. The thing is that we're very focused around work and enterprise-grade solutions. So unlike the tools that exist today, which are more kind of consumer SMB-oriented, the way we built it is that we built it on top of the monday platform. So basically, all the databases, all the data structure are based within monday. So you enjoy all the security. You can afterward integrate it with third-party platforms. It's a different kind of tool with a different kind of offering compared to what exists in the market today.
Speaker #7: So an existing Monday customer, and by the way, we're one of the only few enterprise companies that offer currently Vibe coding within their existing data workflows, and basically can leverage their processes, and basically, they want in our platform.
Yeah. Hi DJ. This is Iran. So I think we need to distinguish between 2 different things. Uh, 1 is that we added the ability to Vive code on top of a platform. So, an existing Monday customer. Uh, and by the way, we're 1 of the only only a few, uh, Enterprise, uh, companies that offer currently VIP coding within their platform. So our customers basically can leverage their existing data workflows and processes and basically Vibe code on top of that, almost anything they want in our platform and our customers are building, an unbelievable things. This is part of the momentum that we see, uh, the excitement that we see from our customers and for me, I think VIP code is, is an ability that may be going forward. A lot of the software, um, uh, vendors will, uh, at some point Embrace in addition to that, in the addition to the ability to V code within the platform, we also created a new go to market that allow customers who are looking for a new V.
Speaker #7: And our customers are building unbelievable things. This is part of the momentum that we see, the excitement that we see from our, going forward, a lot of the software vendors' customers.
Uh, coding solution, uh, to find Monday as 1 of the alternative. The thing is that we're very focused around work and Enterprise great Solutions. So unlike uh, the tools that exist today which are more kind of consumer SMB oriented uh the way we build it is that we build it on top of them on the platform. So basically all the databases, all the data structures are based within Monday. So you enjoy all the security. You can afterwards integrated with third party,
Platforms. And it's a different kind of tool with a different kind of offering compared to what exists in the market today.
Speaker #7: will at some point embrace. In addition to that, in addition to the ability to vibe code within the And for me, I think new go-to-market that allow customers looking for a new platform, we also created a vibe coding solution to find Monday as one of the alternatives.
Eran Zinman: In addition to that, in addition to the ability to Vibe code within the platform, we also created a new go-to-market that allow customers looking for a new Vibe coding solution to find monday.com as one of the alternatives. The thing is that we're very focused around work and enterprise-grade solutions. So unlike the tools that exist today, which are more kind of consumer SMB-oriented, the way we built it is that we built it on top of the monday.com platform. So basically, all the databases, all the data structure are based within monday.com. So you enjoy all the security. You can afterwards integrate it with third-party platforms. And it's a different kind of tool with a different kind of offering compared to what exists in the market today.
Scott Berg: Yep. Yep. Okay. That's helpful context. And then Eliran, follow-up for you. So 91% gross retention in that 50,000-plus cohort. Is that the right level? Are you happy with that, or do you see potential to drive gross retention gains over time? And I guess the second part of that question, those that are churning off the platform, are they consolidating to other packaged work management vendors, or are you seeing firms trying to bring some of that functionality in-house and kind of build it themselves?
Yep. Yep. Okay, that that's helpful context. Uh, and then Elon follow up for you, so 91% gross retention in that 50k plus cohort.
Speaker #7: is that we're very focused around The thing work and enterprise-grade solutions. So unlike the tools that exist today, which are more kind of consumer platform.
Speaker #7: We built it on top of the Monday platform. So basically, all the databases—all of our customers' data structures—are based within Monday. So you enjoy all the security.
Is that the right level? Are you, are you happy with that? Or do you see potential to drive gross retention, gains over time? And and I guess the second part of that question, like those that are turning off the platform, are they consolidating to other package, Work Management, vendors or or are you seeing firms trying to build bring some of that functionality in house and and and kind of build it themselves?
Eliran Glazer: Hi, it's Eliran. So in terms of gross retention, not only that this is historical highs in Q4 of 2025, but this is the cadence that we have seen over the past few quarters. So we have reasons to believe that once we continue to offer the additional product and we continue to extract more revenue from existing customer base with AI products that are providing us stickiness and retention, this number will continue to go up. With regards to the, and by the way, and I don't know to what level, but we saw an improvement, so we believe this is something that we will continue. With regards to the churn, I don't know to tell you that any one of the customers who churned is going to consolidate products on other platforms.
Speaker #7: You can, afterwards, integrate it with third-party platforms. And it's a different kind of tool, SMB-oriented. The way we built it is that we went with a different kind of offering compared to what exists in the market today.
Brent Thill: Yep. Yep. Okay. That's helpful context. And then Eliran, follow-up for you. So 91% gross retention in that 50,000-plus cohort. Is that the right level? Are you happy with that, or do you see potential to drive gross retention gains over time? And I guess the second part of that question, those that are churning off the platform, are they consolidating to other packaged work management vendors, or are you seeing firms trying to bring some of that functionality in-house and kind of build it themselves?
Speaker #11: Context. Yeah. And then, Eliran, a follow-up for you. So, 91% gross—that's helpful—retention in that $50K-plus cohort. Is that the right level? Are you happy with that, or do you see potential to drive gross retention gains over time?
Speaker #11: And I guess the second part of that question, those that are churning off the platform, are they consolidating to other packaged work management vendors?
Speaker #11: Or are you seeing firms trying to build, bring some of that functionality themselves? in-house and kind of build it
Eliran Glazer: On the contrary, I think that what we offer on monday.com on the platform, the multi-product, the AI product that are layered within our platform allows customers to actually consolidate on us. While it's still early days, and we see mostly AI adoption and engagement that is significant, the churn is probably the lower-end customers on the SMB mostly that potentially either churning due to price or other reasons. But we don't see a churn of customers who want to consolidate on the platform.
Speaker #7: Hi, Teliran. So in terms of gross is historical highs in Q4 retention, not only that this to believe that once we continue to past few quarters.
Eran Zinman: Hi, Eliran. So in terms of gross retention, not only that this is historic highs in Q4 of 2025, but this is the cadence that we have seen over the past few quarters. So we have reasons to believe that once we continue to offer the additional product and we continue to extract more revenue from existing customer base with AI products that are providing us stickiness and retention, this number will continue to go up. With regards to the NDR, and by the way, and I don't know to what level, but we saw an improvement. So we believe this is something that we will continue. With regards to the churn, I don't know to tell you that any one of the customers who churned is going to consolidate products on other platforms.
Uh, hi, tell you on. So, in terms of growth retention, uh, not only that this this is historical highs in Q4, uh, of 2025. But this is the Cadence that we have seen. We have seen over the past few quarters, but we have reasons to believe that once we continue to offer the additional product and we continue to extract more revenue, from existing customer base, with AI products that are, uh, providing us thickness and retention. This number will continue to go up with regards to the. And, by the way, I mean, I don't know to what level, but we, we saw an improvement. So we believe this is something that we will continue with regards to the churn. I don't know what to tell you that. Anyone of the customers who churned is going to consolidate, uh, products on other platform on the contrary. I think that what we offer on Monday, on the platform, the multi-product the AI product that are layered within our platform allows customers to actually consolidate on us.
Speaker #7: we continue to extract more revenue from existing customer base, with AI products cadence that we have seen over the offer the additional product and So we have reasons retention, this number will continue to go up.
Uh, while it's still early days and we see mostly AI adoption and engagement that is significant. Uh, the churn is probably the lower end, uh, customers on the S, uh, mostly the potentially, uh, either turning due to price or uh, other reasons. But we don't see a churn of customers who wants to consolidate on the platform.
Speaker #7: With regards to but we saw an improvement. So we believe this is something that we will continue. the and by the way, and I don't know to what level, With regards to the churn, I don't know to tell you that any one of the customers who churned is that are providing a stickiness and products on other platforms.
Operator: Next question comes from the line of Raimo Lenschow with Barclays. Your line is open.
Next question comes from the line of Rio entro with Barclays. Your line is open.
Casey George: Hey, guys. This is Damon Coggan off of Raimo. Thanks for sending the question. It looks like net retention may have fell slightly short of your expectation in the fourth quarter. Was this primarily driven by pressure down market, or was there anything else that drove this?
Speaker #7: On the contrary, I think that what we offer on Monday on the platform, the multi-product, the AI products that are layered within our platform allows customers to us.
Eran Zinman: On the contrary, I think that what we offer on Monday on the platform, the multi-product, the AI product that are layered within our platform allows customers to actually consolidate on us. While it's still early days, and we see mostly AI adoption and engagement that is significant, the churn is probably the lower-end customers on the SMBs mostly that potentially either churning due to price or other reasons. But we don't see a churn of customers who want to consolidate on the platform.
In the fourth quarter, with this primarily driven by pressure down Market, or was there anything else that drove this?
Speaker #7: While it's still early days and we see mostly AI adoption and engagement that is actually consolidate on significant, the churn is probably the lower end customers on the S mostly that potentially either churning due to don't see a churn of customers who want to consolidate on the platform.
Eliran Glazer: Hi, this is Eliran. The reduction in net retention, the 100 basis point, is mostly due to pricing that we are starting to lap. As a reminder, we introduced a pricing increase or price adjustment 2 years ago. After the rollout to all of our customers, 250,000 customers completed this. So this is what we assume to be the main reason going from 111 to 110. I just want to mention that overall trailing 12 months NDR was stable from Q3 to Q4. Just as a reminder, our NDR is the weighted average of the last 4 quarters. So this is important that we have seen stabilization within the quarters and linearity.
Speaker #5: Next question comes from the line of Raimo Lentro with Barclays. Your line is open.
Operator: Next question comes from the line of Raimo Lenschow with Barclays. Your line is open.
Speaker #12: Hey, guys. This is Damon Coggan off of Raimo. Thanks for taking the question. It looks like net retention of 2025, but this is your expectation in the fourth quarter.
Arjun Bhatia: Hey, guys. This is Damon Cogan off of Raimo. Thanks for taking the question. It looks like net retention may have fell slightly short of your expectation in the fourth quarter. Was this primarily driven by pressure down market, or was there anything else that drove this?
Speaker #12: Was this primarily driven by pressure down market, may have fell slightly short of, or was there anything else that drove this?
Speaker #7: Hi, this is Eliran. The reduction in net retention at the 100 basis points is mostly due to going to consolidate to pricing that we are starting to lap.
Hi. This is Alan the reduction in net. Retention the 100 basis point is mostly due to uh pricing that we are starting to lap as a reminder. We introduced the pricing increase or price adjustment 2 years ago and uh you know, after the round of all of our customers 250,000 customers completed this. So this is what we assume to be the main reason uh going from 1 100 and uh uh uh 11 to 110. And I just want to mention that overall trailing 12 months. And they are was trailing uh uh uh sorry MDR was stable from Q3 to Q4 and just as a reminder our uh ndr is weighted average of the last 4 quarters. So this is important that we have seen stabilization within uh the quarters in linearity.
Eran Zinman: Hi. This is Eliran. The reduction in net retention, the 100 basis points, is mostly due to pricing that we are starting to lap. As a reminder, we introduced a pricing increase or price adjustment two years ago. After the rollout to all of our customers, 250,000 customers completed this. So this is what we assume to be the main reason going from 111 to 110. I just want to mention that overall trailing 12 months NDR was stable from Q3 to Q4. Just as a reminder, our NDR is the weighted average of the last four quarters. So this is important that we have seen stabilization within the quarters and linearity.
Next question comes from the line of Derek wood with TD cup.
Operator: Next question comes from the line of Derrick Wood with TD Cowen. Your line is open.
Your line is open.
Speaker #7: Pricing increase, or as a reminder, we introduced a— and after the round of all of our customers, 250,000 customers completed this. So this is what we assume to be the main reason, going from 100. I want to mention that overall trailing 12 months NDR was— NDR was stable from Q3 to Q4.
Derrick Wood: Great. Thanks, guys. This is Cole on for Derrick. Can you just walk through what's embedded in the guidance for next year across customer growth, seat growth, and cross-sell versus off-sell? I think there was a comment earlier that the agentic offerings could increase productivity while headcount stays flat. So just thinking about that and squaring it with seat growth assumptions for next year. Thanks.
Great. Thanks, guys. This is Cole on for Derek. Um, can you just walk through what's embedded in the guide for next year across, uh, customer growth
See, growth and crossover Soft Cell. I think there was a common earlier that, you know, the agentic um
Offerings could you know increase productivity while headcount stays flat. So you know, just think about that and squaring it with uh secret assumptions for next year. Thanks.
Speaker #7: And just as a reminder, our NDR is a weighted average of the last four quarters—trailing, sorry. So this is important, that we have seen stabilization within the quarters and...
Eliran Glazer: Yeah. Hi, it's Eliran. So what we baked into guidance for next year is upmarket and enterprise customer expansion, continue the multi-product adoption. We also said that we are going to be disciplined of the level of investment, and we are going to improve efficiency as we continue to reshape our go-to-market model. We mentioned that NDR is going to remain at 110% flat. We're not expecting to see a significant increase in number of customers. We said it in the past. We have more than 250,000 customers, and we would like to extract our revenue within these customers. And we see this by our ACV actually growing, and we see bigger and more significant customers replacing the smaller customers.
Operator: Next question comes from the line of Derrick Wood with TD Cowen. Your line is open.
Speaker #5: the line of Derek Wood with TD
Speaker #11: Great. Thanks, guys. This is Cole on for
Casey George: Great. Thanks, guys. This is Cole on for Derrick. Can you just walk through what's embedded in the guide for next year across customer growth, seat growth, and crossover/offsell? I think there was a comment earlier that the agentic offerings could increase productivity while headcount stays flat. So just think about that and squaring it with seat growth assumptions for next year. Thanks.
Speaker #11: Derek, agentic open. Can you just walk through what's embedded in the guide for next offerings that could increase your line's productivity while headcount stays flat?
Speaker #11: year across linearity. customer growth, seat Cowan. growth, and cross-sell versus upsell? I think there
Speaker #11: was a comment earlier
Speaker #11: So just think about that, and squaring it with seat growth assumptions for next year.
Speaker #11: Thanks. Yeah.
Eran Zinman: Yeah. Hi. It's Eran. So what we baked into guidance for next year is upmarket and enterprise customer expansion, continue the multi-product adoption. We also said that we are going to be disciplined of the level of investment. And we are going to improve efficiency as we continue to reshape our go-to-market model. We mentioned that NDR is going to remain at 110% flat. We're not expecting to see a significant increase in number of customers. We said it in the past. We have more than 250,000 customers. And we would like to extract our revenue within these customers. And we see this by our ACV actually growing. And we see bigger and more significant customers replacing the smaller customers.
Speaker #7: Hi, it's Eliran. So what we baked into guidance for next year is upmarket and enterprise customer expansion; continue the multi-product adoption. We also said that we are going to be disciplined with the level of investment, and we are going to improve efficiency as we continue to reshape. I mentioned that NDR is going to remain at 110%—our go-to-market model.
Eliran Glazer: The last thing is we also took into account the negative FX impact on margins between 100 and 200 basis points, mostly due to the appreciation of the Israeli shekel.
Yeah. Hi, it's Elon. So, uh, what we baked into guidance for next year is uh, you know, uh, up market and uh, Enterprise customer expansion. Uh, continue the multi-product adoption. Uh, we also said that we are going to be disciplined of the level of investment and we are going to prove efficiency as we continue to reshape our go to market model. Uh, we mentioned that ndr is going to remain at 110% flat. Uh we're not expecting to see a significant increase in number of customers. Uh, we said it in the past, uh, we have more than 250,000 customers and we would like to extract our Revenue within uh, these customers. And we see this by our ACV actually growing, uh and we see a bigger and more significant, customers replacing the smaller customers. And the last thing is we also took into account the negative effects impact on margins between 100 and 200 basis points. Uh, due mostly due to the appreciation of the Israeli shape,
Operator: Next question comes from the line of Alex Zukin with Wolfe Research. Your line is open.
Next question, comes from the line of Alex. Zukin with wolf research, Fairline is open.
Speaker #7: Flat. We're not expecting to see a significant increase in the number of customers. We said that in the past, we have more than 250,000 We customers.
Alex Zukin: Hey, guys. Thanks for taking the question. Maybe just wanted a quick follow-up for me. Can you maybe give us a bit of an update on monday CRM and monday service? Kind of, how did they perform versus expectations in the quarter in terms of their contribution to net new ARR today, and how we should think about those, particularly as you're moving up market for next year?
Speaker #7: We like to extract our revenue from within these customers. And we see this by our ACV actually growing, and we see bigger and more significant customers replacing the smaller customers.
Hey guys, thanks for taking the question. Maybe. Uh, just wanted a quick follow-up for me. Can you maybe give us a bit of an update on Monday CRM, and Monday, service kind of? How did they perform versus expectations in the quarter, uh, in terms of their contribution to net new are today? Uh, and how we should think about those, uh, particularly as we're moving up market for next year.
Eliran Glazer: Yeah. Hi, Alex. This is Eliran. So overall, we're very happy with the progress of both CRM and service in Q4. Q4 was a little bit tended to benefit work management. Q4 was more enterprise deals-oriented. So work management is kind of our more mature enterprise products. So it's not that the products underperform. It's just work management overperforming Q4. It's more of a seasonal thing. And overall, we're very happy with the progress so far with CRM, the new monday CRM product. monday service performs very well. And as we've mentioned throughout the call, we expect the products to continue to be a larger and larger part of our revenue going forward. Momentum is strong, and this is how we see it going to 2026.
Speaker #7: And the last thing is we took into account the negative ethics impact on margins. Between 100 and 200 basis points, mostly due to the appreciation of the Israeli.
Eran Zinman: The last thing is we also took into account the negative FX impact on margins between 100 and 200 basis points, mostly due to the appreciation of the Israeli shekel.
Speaker #5: Next question comes from the line.
Operator: Next question comes from the line of Alex Zukin with Wolfe Research. Your line is open.
Speaker #5: Alex Zukin with Wolfe Shekel. Research. Open. Your line is...
Casey George: Hey, guys. Thanks for taking the question. Maybe just wanted a quick follow-up for me. Can you maybe give us a bit of an update on monday CRM and monday Service? Kind of how did they perform versus expectations in the quarter in terms of their contribution to net new ARR today and how we should think about those, particularly as you're moving up market for next year?
Speaker #12: Hey, guys. Thanks for taking the question. Can you maybe give us a bit of an update on monday's CRM and monday's Service—kind of how did contribution to net new ARR trend today, and how should we think about the quarter in terms of those, particularly as you're moving up? Did they perform versus expectations in the...
Speaker #12: year? market for next
Yeah. Hi. Uh, this is Iran. So, overall, we're very happy with the progress of both, uh, CRM Service, uh, in Q4, um, Q4 was a little bit, uh, 10 to benefit Work Management. Q4 was more Enterprise, uh, deals oriented. So, Work Management is kind of our more mature Enterprise Products. So, it's not that the products on the performance just work management over performing Q4, uh, it's more of a seasonal thing, uh, and overall, we're very happy with the progress. So far with crn, the new Monday campaign product, from the service performs very well. And as as we've mentioned throughout the call, we expect the products to continue to be a larger and larger part of our Revenue going forward. Momentum is strong. Uh and this is how we see it uh going to 2026.
Speaker #7: Yeah.
Eran Zinman: Yeah. Hi, Alex. This is Eliran. So overall, we're very happy with the progress of both CRM and service in Q4. Q4 was a little bit tended to benefit work management. Q4 was more enterprise deals-oriented. So work management is kind of our more mature enterprise products. So it's not that the products underperform. It's just work management overperforming Q4. It's more of a seasonal thing. And overall, we're very happy with the progress so far with CRM, the new monday CRM product. monday service performs very well. And as we've mentioned throughout the call, we expect the products to continue to be a larger and larger part of our revenue going forward. Momentum is strong. And this is how we see it going to 2026.
Speaker #7: This is Eran. Management is kind of more so mature enterprise products, so it's not so work. Q4 was a little that the products underperformed.
Operator: Next question comes from the line of Billy Fitzsimmons with Piper Sandler. Your line is open.
Speaker #7: Service. In both CRM and overall, we're very happy with the progress, but tend to benefit work management. Hi, Alex. Q4 was more enterprise, deals-oriented.
Next question comes from the line of Billy fifth Simon with 5% Sandler. Your name is open.
Billy Fitzsimmons: Hey, guys. Can we maybe dig a little deeper in terms of some of the dynamics impacting self-service channel? And I know this is tough to do, but help separate a little bit what you distribute to macro and what, if anything, you distribute to maybe potential AI experimentation headwinds if you're seeing anything there. Because one of the debates that came up for the last week generally across all software is that maybe SMB customers are more willing to experiment with plugins or low-code, or SMB customers are maybe being more sensitive right now around pricing or price increases. So I know it's tough to comment on in terms of direct anecdotes because they're some of your smallest customers, and it goes with self-service channel. But any color in terms of what you're seeing and hearing in real time would be helpful.
Speaker #7: It's just work management overperforming Q4. It's more of a seasonal thing. And overall, we're very happy with the progress so far with CRM, the new monday Campaigns product, Monday Service performs very well.
Speaker #7: And as we've mentioned throughout the call, we expect the products to continue to be a larger and larger part of our revenue going forward.
Speaker #7: Momentum is strong, and this is how we see it going into Q1.
Operator: Next question comes from the line of Billy Fitzsimmons with Piper Sandler. Your line is open.
Speaker #5: Comes from the line of Billy Fitzsimons with Piper Sandler. Your line is open.
Speaker #5: Comes from the line of Billy Fitzsimon with Piper Sandler. Your line is open.
Hey guys. Can we can we make a dig a little deeper in terms of some of the dynamic impact? I know this is tough to do but but help stop right. A little bit. What you contribute to macro and and what if anything you attribute to to maybe potential AI, experimentation headwinds. Um, if if you're seeing anything there because 1 of the debate that came up was the last week generally across all software is that maybe SMB customers with more than the experiment with plugins or my coding or, you know, SMB, customers or, or maybe being some more sensitive reps right? Now, around pricing or price increases. So I know what step to comment on in terms of direct damage anecdotes because there's some of your smallest customers and biggest and self-serve Channel. But any color in terms of what you're seeing and hearing in real time would be helpful.
Speaker #12: Hey, guys. Can we maybe dig into the dynamics impacting that a little deeper in terms of what you attribute to, maybe, potential AI experimentation macro, and what, if anything, you attribute to headwinds?
Brent Thill: Hey, guys. Can we maybe dig a little deeper in terms of some of the dynamics impacting the self-serve channel? And I know this is tough to do, but help separate a little bit what you distribute to macro and what, if anything, you distribute to maybe potential AI experimentation headwinds if you're seeing anything there. Because one of the debates that came up for the last week generally across all of software is that maybe SMB customers are more willing to experiment with plugins or vibe coding, or SMB customers are maybe being more sensitive right now around pricing or price increases. So I know it's tough to comment on in terms of direct damage anecdotes because they're some of your smallest customers, and they go through the self-serve channel. But any color in terms of what you're seeing and hearing in real time would be helpful.
Eliran Glazer: Yeah. Hi, Bill. This is Eliran. So hopefully, I got your question right. You broke up a little bit. But overall, in terms of the top-of-funnel activity, we don't see any change in terms of the competition dynamics. We see that Roy talked about the choppiness that we see, and we see that that choppiness contributed to the impact we've seen in the top-of-funnel. We didn't see anything else. We didn't see anything new in sales calls or when customers compare us to other vendors. So we don't see any material impact from anything. And on the contrary, we offer a lot of new AI capabilities within the platform, not just for existing users, but also to new users. We change our messaging around our ads. We change our messaging around our homepage to be more AI-oriented.
Speaker #12: Search channel? And I know this is tough to do, but help separate a little last week, generally across all of—if you're seeing anything there—software. Is it that maybe SMB customers are more willing to experiment with plugins or vibe coding?
Speaker #12: Our SMB customers are maybe being a bit more sensitive right now around pricing or price increases. I know it's tough to comment on, in terms of direct anecdotes, because they're some of your smallest customers and it's your biggest self-serve channel.
Speaker #12: But any color in terms of what you're seeing and hearing in real time would be helpful.
Speaker #7: Yeah, so obviously, I got your question. Hi, Bill. This is Eran. Right, you broke a little bit, but overall, in terms of the change, in terms of the competition, top-of-funnel activity, we don't see any dynamics.
Eran Zinman: Yeah. Hi, Billy. This is Eliran. So hopefully, I got your question right. You broke up a little bit. But overall, in terms of the top-of-funnel activity, we don't see any change in terms of the competition dynamics. We see that Roy talked about the choppiness that we see. And we see that that choppiness contributed to the impact we've seen in the top of funnel. We didn't see anything else. We didn't see anything new in sales calls or when customers compare us to other vendors. So we don't see any material impact from anything. And on the contrary, we offer a lot of new AI capabilities within the platform, not just for existing users, but also to new users. We change our messaging around our ads. We change our messaging around our homepage to be more AI-oriented.
Eliran Glazer: So again, to summarize, we don't see any impact currently from any AI company, and we're shifting our product regardless to be more AI-native.
Um, overall, uh, in terms of the, um, top of funnel activity, uh, we don't see any change in terms of the competition Dynamics. Uh, we see that, um, you know, Roy talked about, uh, uh, choppiness that we see and we see that that choppiness contributed to the impact. We've seen in the top of funnel. We didn't see anything else. We didn't see anything new in in uh, you know, sales calls or when customers compared to other vendors. So we don't see any material impact uh, from anything. And on the contrary we offer a lot of new AI capabilities within the platform. Uh, not just for existing users, but also to new users, we change our messaging around our ads, we change our messaging around our homepage uh, to go to be more AI oriented. Um, so again to summarize, we don't see any impact currently from, um, any AI company. And we're shifting our product regardless, uh, to be more a native
Speaker #7: We see about choppiness that we see. We see that choppiness contributed to, and the impact we've seen in the— that Roy talked— top of funnel. We didn't see anything else.
The line of Alan.
Operator: Next question comes from the line of Allan Verkhovski with BTIG. Your line is open.
Speaker #7: We didn't see anything new in sales calls or when customers compare us to other vendors. So we don't see any material impact from anything.
Allan Verkhovski: Hey, thanks, guys. I wanted to just ask on pricing here. What drove the decision to raise price on service, and how are you thinking about potentially raising price on other products within the portfolio? Thanks.
Speaker #7: And on the contrary, we offer a lot of new AI capabilities within the platform—not just for existing users, but also to new users.
Hey, thanks guys. I wanted to just ask on pricing here. Uh, what drove the decision to erase price on service and how are you thinking about potentially raising price on other products um, within the portfolio? Thanks.
Eliran Glazer: Yeah. I'm not sure which price raise you refer to. So we didn't increase pricing recently on any of our products. We introduced a price increase about a year and a half ago, and it's been that one-time price increase that we introduced. We didn't change pricing to our existing products.
Speaker #7: Ads. We change our messaging around, we change our messaging around our AI-oriented—so again, to summarize, we don't see any homepage to be more impact currently from any AI company.
Eran Zinman: So again, to summarize, we don't see any impact currently from any AI company. We're shifting our product regardless to be more AI-native.
Speaker #7: product regardless to be more
Yeah. Uh, I'm not sure which price range, uh, you refer to, uh, So within increased pricing recently, on any of our products, uh, we we introduced the price increase about a year and a half ago, uh, and and it's been that 1 time price increase that we introduced, uh, we didn't change pricing to our existing products.
Speaker #7: AI-native. Next question, and we're shifting our
Operator: Next question comes from the line of Alan Verkovsky with BTIG. Your line is open.
Eliran Glazer: Maybe other than the pricing list that we have, then we move more customers.
Maybe other than the pricing list that we have, then we move more customers.
Arjun Bhatia: Hey. Thanks, guys. I wanted to just ask on pricing here. What drove the decision to raise price on service? And how are you thinking about potentially raising price on other products within the portfolio? Thanks.
next question, come
Speaker #12: Ask on pricing here, about potentially raising price on—
Speaker #12: ask on pricing here.
Operator: Next question comes from the line of Matt Bullock with Bank of America. Your line is open.
the line of Matt bulock with Bank of America. Your name is open.
Speaker #12: Other products within the portfolio—what drove the decision to raise price on service? And how are you thinking? Open, comes from the line of Alan.
Matthew Bullock: Great. Thanks for the question. I wanted to ask a follow-up on the free cash flow margin guidance. I understand there's some effect in there, your growing headcount, investing in sales-led growth. But maybe if you could clarify what's baked in in terms of incremental cash taxes, lower interest income. And then I wanted to ask a follow-up because I think you mentioned something about the buyback program relative to free cash flow, so I just wanted to clarify there.
Speaker #12: Thanks.
Speaker #7: Yeah. I'm not sure which price raise you refer to.
Eran Zinman: Yeah. I'm not sure which price raise you refer to. We didn't increase pricing recently on any of our products. We introduced a price increase about a year and a half ago. It's been that one-time price increase that we introduced. We didn't change pricing to our existing products. Other than the pricing list that we have, then we move more customers.
Speaker #7: We introduced the price increase about a year and a half ago. And it's been that way. We didn't change pricing to our existing products recently on any of our products.
Great. Thanks for the question. Um I wanted to ask a follow-up on the free cash flow margin guidance. Um understand that some effects in there you're growing headcount investing in you know, sales growth. But maybe if you could clarify uh what's baked in in terms of incremental cash taxes lower, you know, interest income and then I wanted to ask the follow-up because I think you mentioned something about the buyback program relative to free cash flow. So I just wanted to clarify their
Speaker #7: one-time price increase that we introduced. customers.
Eliran Glazer: Yeah, sure. It's Elan. So I will repeat what I said earlier. So the biggest impact is the appreciation of the Israeli shekel on the free cash flow. 55% of the headcount is based in Israel. We have seen over the past year a reduction of more than 20% in the US dollar versus the Israeli shekel. We have a hedging strategy. So we were able to defend some of it. We are doing a rolling forecast of 12 months. But still, the decline was so sharp. Israel recovered really significantly, so it's obviously impacted our cost and our free cash flow numbers. In addition to that, we are looking at a reduction of around 1% in interest rate environment, and we have significant amount of cash. Obviously, this impacts our return in terms of the interest that we are getting. Sure, buyback.
Speaker #7: Maybe, other than the pricing lift that we have, then we move more—
Speaker #5: Next question comes from the line of Matt Bullock.
Operator: Next question comes from the line of Mathew Bullock with Bank of America. Your line is open.
Speaker #13: Great, thanks for the question. I wanted to ask a follow-up on the free cash flow margin effects in there. You’re growing headcount, investing—open.
Arjun Bhatia: Great. Thanks for the question. I wanted to ask a follow-up on the Free Cash Flow margin guidance. I understand there's some effects in there, your growing headcount, investing in Sales-Led Growth. But maybe if you could clarify what's baked in in terms of incremental cash taxes, lower interest income. And then I wanted to ask a follow-up because I think you mentioned something about the buyback program relative to Free Cash Flow. So I just wanted to clarify there.
yeah, sure. Uh, it's a long so I will repeat, what I said earlier. So, the biggest impact is the, uh, appreciation of the Israeli shekel, uh, on on the, on the free cash flow 55% of our of the head count is based in Israel, we have seen over the past year, uh, reduction of more than 20% in the US dollar versus the Israeli share. Because we
Speaker #13: Guidance. I understand there's some—but maybe if you could clarify what's baked in, in terms of incremental. I wanted to ask a follow-up because I think you mentioned something about the buyback program relative to free cash flow.
Speaker #13: So I just wanted to clarify
Speaker #13: there.
Speaker #7: Yeah.
Eran Zinman: Yeah. Sure. It's Eliran. So I will repeat what I said earlier. So the biggest impact is the appreciation of the Israeli shekel on the free cash flow. 55% of the headcount is based in Israel. We have seen over the past year a reduction of more than 20% in the US dollar versus the Israeli shekel. We have a hedging strategy. So we were able to defend some of it. We are doing a rolling forecast of 12 months. But still, the decline was so sharp; the shekel recovered really significantly. So it's obviously impacted our costs and our free cash flow numbers. In addition to that, we are looking at a reduction of around 1% in interest rate environment, and we have a significant amount of cash. Obviously, this impacts our return in terms of the interest that we are getting. Sure, buyback.
Speaker #7: So I will repeat what I—the appreciation of the Israeli shekel on the free cash, lower interest income, and then the headcount is based in Israel.
Eliran Glazer: We said that we are going to be opportunistic. At the end of last year, we already acquired in 2025 $135 million. In 2026, we will continue with the same program, but we're going to be opportunistic, having in mind the current level of the share price. So we obviously also took it into account because if we buy shares, then the cash is not used to get interest. And as I mentioned, as we become more profitable, there is a potential, or we may be paying taxes throughout the year, pending on our progress. So these are the reasons for the adjustment of the free cash flow.
Speaker #7: We have seen, over the past year, a reduction of more than 20% in the edging strategy. So we were able to defend some of it.
Speaker #7: We are doing
Speaker #7: A rolling forecast of 12 months. But still, the decline was so significant. So, it's obviously US dollar versus the Israeli shekel. We have impacted our cost and our free cash flow sharply. Israel recovered, really, in sales-led growth.
We have an edging strategy, so we were able to defend some of it. Uh, we are doing a rolling forecast of 12 months but still the decline was so sharp Israel recovered, really significantly. So it's obviously impacted, uh, our uh, cost and our free cash flow and numbers. In addition to that, uh, we are looking at a reduction of around 1% in interest rates environment and we have significant amount of cash. Obviously, this impacts, our return, uh, in terms of, uh, the, the interest that we are getting share buyback. Uh, you know, we we said that we are going to be opportunistic. Uh, at the end of last year, we already acquired 100, uh, in 2025, 1355 million dollar in 2026, we will continue with the same program, but we are going to be opportunistic. Having in mind the current level of the share price. Uh, so we obviously also took it into account because if we buy shares, then the cache is not used to get interest. And as I mentioned, as we become more profitable, uh, there is
Speaker #7: Of around 1% in interest numbers. In addition to that, we are looking at a reduction in a significant amount of cash. Obviously, this impacts the interest that we are getting.
Speaker #7: of around 1% in interest numbers. In addition to that, we are looking at a reduction significant amount of cash. Obviously, this impacts of the interest that we are
A potential uh, or we may be uh uh paying taxes throughout the year. Uh, pending on our progress. So these are the reasons for the adjustment of the free cash flow.
Speaker #7: Our return, in terms of the line items—could we see it? That, last year, or in significantly, mostly around SLG Motion and R&D and product people.
Operator: Next question comes from the line of Taylor McGinnis with UBS. Your line is open.
Next question comes from the line of Taylor mckinne with UBS. Your line is open.
Eran Zinman: We said that we are going to be opportunistic. At the end of last year, we already acquired in 2025 $135 million. In 2026, we will continue with the same program, but we are going to be opportunistic having in mind the current level of the share price. So we obviously also took it into account because if we buy shares, then the cash is not used to get interest. And as I mentioned, as we become more profitable, there is a potential or we may be paying taxes throughout the year pending on our progress. So these are the reasons for the adjustment of the free cash flow.
Taylor McGinnis: Yeah. Hi. Thanks so much for taking my questions. The first one is, so even if we adjust for the FX headwind, it still looks like operating income and free cash flow margins are down a bit on a year-over-year basis. So could you just unpack the drivers of that more specifically? So when you talk about investment with AI, does that mean we could see gross margin pressure as we head into this year? Does that mean you need to make bigger platform or architecture changes for an AI world? Is it really just a function of this continued shipped-up market? I guess where in the line items could we see it? And then what are these investments actually going towards?
Speaker #7: Opportunistic buyback. We said that we are going to be. At the end of last year, we already acquired $100 million in share buybacks. In 2026, we will continue to be opportunistic, having in mind the current level of the share price. For 2025, $135 million cash taxes.
Speaker #7: So we're obviously also took it into account because if we buy shares, then the cash is not used to get is a potential or we become more profitable, there we may be interest.
Speaker #7: Paying taxes throughout the year depending on our progress. So these, as said earlier, are the biggest impact. And, as I mentioned, as flow.
Speaker #7: The reasons for the adjustment of the free cash flow line of Taylor McKinney's, with
Yeah. Hi thanks so much for taking my questions. The first 1 is um, so even if we adjust for the FX head, 1 it still looks like operating income and free cash flow margins are down a bit on a year-over-year basis. So could you just unpack the drivers of that more specifically so when you talk about investment with AI, does that mean we could see gross margin pressure as we you know had into this year? Does that mean you need to make bigger platforms or architecture? You know, changes for an AI world? Is it really just a function of this continued shift up market? Like I guess where in the line items you know could we see it? And then what um what are, you know, these Investments actually uh going towards
Operator: Next question comes from the line of Taylor McGinnis with UBS. Your line is open.
Speaker #5: UBS. Taking my questions. Your line is
Eliran Glazer: Hi, Taylor. It's Eliran. So to your point, first of all, you are accurate with regards to gross margin. If we're going to invest in AI, we said that we are going to see gross margin mid-80s% to high-80s%, and we used to have 90%. So this is something that we took into account. In addition to that, last year or in 2025, we increased our headcount significantly, mostly around SLG motion and R&D and product people. This is also going to be the area of investment this year, much less than last year. But still, this is the place where we're going to invest. And because we had significant hiring at Q4 of last year, we are seeing now the impact in terms of cost. We're going to prioritize investment in AI where we see the opportunity based on the returns as well.
Roy Mann: Yeah. Hi. Thanks so much for taking my questions. The first one is, so even if we adjust for the FX headwind, it still looks like operating income and free cash flow margins are down a bit on a year-over-year basis. So could you just unpack the drivers of that more specifically? So when you talk about investment with AI, does that mean we could see gross margin pressure as we head into this year? Does that mean you need to make bigger platform or architecture changes for an AI world? Is it really just a function of this continued shipped-up market? I guess where in the line items could we see it? And then what are these investments actually going towards?
Speaker #14: Hi. Even if we adjust for the FX headwind, thanks so much for a function of this continued shipped-up market? I guess, where in—open.
Speaker #14: Flow margins are down a bit on a year-over-year basis. Can you unpack the drivers of that? The next question comes from—about investment with AI. Does that—the first one is, does it mean we could see gross margin pressure as we head into this year?
Speaker #14: More specifically? So when you talk basis, could you just—
Speaker #14: for an AI world? Is it really just with the same program, but we're going to be
Speaker #14: And then
Speaker #14: What are these investments actually going toward, or are they architecture changes?
Speaker #7: And hi, Taylor. With all, you were accurate with regards
Eran Zinman: Hi, Taylor. It's Eran. So to your point, first of all, you're accurate with regards to gross margin. If we're going to invest with AI, we said that we are going to see a gross margin mid-80s to high 80s. And we used to have 90%. So this is something that we took into account. In addition to that, last year or in 2025, we increased our headcount significantly, mostly around SLG motion and R&D and product people. This is also going to be the area of investment this year, much less than last year. But still, this is the place where we're going to invest. And because we had significant hiring at Q4 of last year, we are seeing now the impact in terms of cost. We're going to prioritize investment in AI where we see the opportunity based on the returns as well.
Speaker #7: Eliran: So, to your point, first off, towards...
Eliran Glazer: So, to summarize, it's mostly headcount around SLG and AI. We might see investment that is taking into account some adjustment to the gross margin, where we said we're going to be mid-80s to high-80s, and the FX impact, which is significant, unfortunately, but this is it.
Speaker #7: To invest as we with Hi.
Speaker #7: AI, we said that we are going to opportunity. Based on the returns as, but still, this is the place where we're going to 2025. We increased our headcount—it's mostly headcount around SLG and AI.
We're going to invest as we you know, we TI uh we said that we're going to see uh uh gross margin mid, 80 to I 80s and we used to have 90%. So this is something that we took into account in addition to that uh, last year or 2025 we increased. Our headcount significantly mostly around SLG motion and uh, R&D and product people. This is also going to be the area of investment this year. Much much less than left you. But still, this is the place where we're going to invest. And because we had significant hiring uh, at Q4 last year, we're we're seeing now the impact in terms of cost, uh, we're going to prioritize investment in AI where we see the opportunity based on the returns as well. Uh, so it's mostly to summarize. It's mostly headcount around SLG. And AI, we might see investment that is taking into account, uh, some adjustment to the growth margin in the where we said, we're going to be uh mid 80s to high 80s and the FX impact uh which
which is significant uh unfortunately but this is it.
Derrick Wood: Yeah. Just to add to what Elan said. Sorry, Taylor. Just wanted to comment on a previously asked question, not yours, Taylor, but I think it was Allan who asked about it, the price increase for service. So just asked the team to double-check. And it seems like there's an 18% increase to a subset of core customers, the joint lines of service. So it's not a significant amount. It's a small amount of customers, but just wanted to point that out and give some more color on that.
Eran Zinman: So it's mostly to summarize, it's mostly headcount around SLG and AI. We might see investment that it's taking into account, some adjustment to the gross margin where we said we're going to be mid-80s to high 80s, and the FX impact, which is significant, unfortunately. But this is it.
Yeah, just just uh, to add a to what it was said, uh, sorry to uh just I wanted to comment on previously asked question, not yours Taylor, but uh, I think was Alan, who asked about it? The price increase for service. So, uh, just, um, asked it in to double check and it seems like there's a 18% increase to, uh, a subset of cord of customers, uh, The Joint minds of service. So it's it's not a significant amount.
Speaker #7: investment that is taking into account some adjustment to the gross We might see to be. margin in where we said we're going we took into account.
The small amount of customers that just wanted to uh, point it out, um, and get some more call on that.
There were last question.
Speaker #7: Mid-80s to high-80s impact, which is— and the FX in addition to significant, unfortunately. But this is—
Operator: Our last question comes from the line of Mark Schappel with Loop Capital Markets. Your line is open.
If Mark Chappel with loop capital markets, your line is open.
Mark Schappel: Hi. Thank you for taking my question. Eliran, could you just discuss to what extent customers are expecting your new AI capabilities to be bundled into, say, existing subscriptions versus paying for them as a premium add-on? And maybe also talk about how that's either shaping or not shaping your packaging and monetization strategy in the coming year.
Hi. Thank you for taking my question. Uh Elon. Could you just discuss uh to what extent customers?
Casey George: Yeah. Just to add to what Eran said, sorry, Taylor. Just wanted to comment on a previously asked question, not yours, Taylor, but I think it was Alan who asked about it, the price increase for service. So just asked the team to double-check. And it seems like there's an 18% increase to a subset of core customers, the monday service. So it's not a significant amount. It's a small amount of customers. But just wanted to point that out and give some more color on that.
Speaker #15: said, sorry, Taylor. Just wanted to
Speaker #15: Yours, Taylor, but I think it was to add to what Eliran said, to a subset of core. Yeah. Alan, who asked about it, the price increase for just service.
Speaker #15: So
Uh are expecting your new AI capabilities to be bundled into say, existing subscriptions versus paying for them as a premium add-on. And and maybe also talk about how, uh, that's either shaping or not shaping your your packaging and and monitor monetization strategy in the coming year.
Speaker #15: customers that join minded
Eliran Glazer: Hi, it's Eliran. I think, Casey, probably better for you to take it.
Speaker #15: So, it's not significant. Just ask the team to double-check. Comment on the previously asked question, not out. And give some more. And it seems like there's an 18% increase, but I just wanted to point that out.
Speaker #15: It's a small amount of customers,
Eliran Glazer: Yeah. Happy to. Thank you for the question. Our AI capabilities are foundational in our platform. They're embedded in our workflows. Based on the feedback we've gotten from customers, they really enjoy the predictability of PPU pricing, and they like to consume those capabilities that way. With that said, some of the more compute-intensive workloads that drive outputs with these workloads, we are charging and monetizing that through credits. Our customers like the mix of both of those. Again, it's early, and we're very encouraged that this model is going to be used.
Speaker #5: In our last question comes from the line of
Operator: Now, our last question comes from the line of Mark Schappel with Loop Capital Markets. Your line is open.
Speaker #5: Mark Schapel with Loop Capital service.
Speaker #5: Your line is
Casey George: Hi. Thank you for taking my question. Eran, could you just discuss to what extent customers are expecting your new AI capabilities to be bundled into, say, existing subscriptions versus paying for them as a premium add-on? And maybe also talk about how that's either shaping or not shaping your packaging and monetization strategy in the coming year.
Speaker #16: Question. Eliran, could you just discuss to what extent customers are expecting your new AI capabilities to be bundled?
Speaker #16: into, say, existing subscriptions. Thank you for taking my—
Hi. It's Alan. I think, uh, Casey probably better for you to take it. Yeah, happy to. So thank you for the question. So a, our AI capabilities are foundational in our platform. Uh, they're embedded in our workflows and based on the feedback we've gotten from customers, they really enjoy the predictability of PPU pricing and they like to consume those capabilities. Uh, that way. With that said, some of the more compute intensive workloads that drive outputs, uh, with these workloads, we are charging in monetizing that through credit.
Speaker #16: about how that's either
Speaker #16: Shaping or not shaping — is that a premium add-on? Versus paying for them as... And maybe also talk...
And our customers like the mix of both of those. So um it's uh again it's early and uh we're we're very encouraged that this model is
Speaker #17: It's Eliran. I think
Eran Zinman: Hi. It's Eran. I think, Casey, probably better for you to take it.
Speaker #17: Casey, it's probably better for you to take it.
Casey George: Yeah, happy to. So thank you for the question. So our AI capabilities are foundational in our platform. They're embedded in our workflows. And based on the feedback we've gotten from customers, they really enjoy the predictability of PPU pricing. And they like to consume those capabilities that way. With that said, some of the more compute-intensive workloads that drive outputs with these workloads, we are charging and monetizing that through credits. And our customers like the mix of both of those. So again, it's early. And we're very encouraged that this model is going to be there.
Speaker #15: So, thank you for the pricing. And they like to consume those—predictability of PPU markets.
Operator: Ladies and gentlemen, that concludes the question and answer session. Thank you all for joining in. You may now disconnect. Everyone, have a great day.
Ladies and gentlemen, that concludes the question and answer session. Thank you all for joining in. You may now disconnect everyone have a great day.
Speaker #15: They're embedded in our platform, are foundational in our... the feedback we've gotten from customers, they—yeah, happy to—really enjoy the...
Speaker #15: So again, it's disconnect.
Operator: Ladies and gentlemen, that concludes the question and answer session. Thank you all for joining in. You may now disconnect. Everyone, have a great day.
Speaker #5: The question and answer session. Thank you.
