monday.com grew third-quarter revenue 19% to $377.5 million and posted record adjusted operating profit, while warning that its shift to an AI-first business is creating near-term headwinds and slower growth ahead.
monday.com reported third-quarter revenue of $377.5 million, up 19% from a year earlier, and its best adjusted operating profit on record, as the work-management software maker leans harder into artificial intelligence.
Adjusted operating income nearly doubled to $89.4 million, a 24% margin against 15% a year earlier, while operating income on a GAAP basis swung to $31.2 million from a $2.4 million loss. Adjusted diluted earnings per share came to $2.14. Annual recurring revenue from AI products, including AI credits, agents and vibe, reached $36 million, and the company's AI agents passed six million interactions in under two quarters. Customers paying more than $100,000 a year grew 33% to 2,127, and net dollar retention stood at 108%.
The quarter was not all smooth. Cash generated from operations fell to $20.4 million from $95.1 million a year earlier, and adjusted free cash flow dropped to $63.0 million from $92.3 million. Co-founders and co-CEOs Roy Mann and Eran Zinman said the business is going through a fundamental shift to become an AI-first company, and that work of that scale brings near-term operational headwinds. Revenue still came in ahead of the roughly $370 million the company had projected, and shares fell about 5% after the release, according to StockStory.
The company's release puts revenue at $377.5 million, with the detailed tables showing $377,535,000 against $316,855,000 a year earlier, which works out to the 19% increase the company reported. Its reconciliation tables put adjusted operating income at $89.4 million and the margin at 24%, matching the headline figures, and the same release lists AI annual recurring revenue at $36 million. Calcalist's independent account of the results lines up on each of those numbers, including the fourth-quarter outlook. The release also gives the cash-flow figures quoted above, so the drop in operating cash is the company's own disclosure rather than an outside estimate.
Growth is set to slow in the final three months of the year. monday.com expects fourth-quarter revenue of $380 million to $382 million, growth of about 14%, and full-year revenue of $1,473 million to $1,475 million, about 20% growth for 2026. Chief financial officer Eliran Glazer said the outlook balances investment in enterprise sales, product and AI against profitability, and the co-CEOs said they remain highly confident in the AI-first path while working through the disruption it brings. Whether the AI products now generating $36 million in annual recurring revenue can keep expanding fast enough to offset that slower core growth is the question the next two quarters will answer.