monday.com reported its second quarter on 10 August 2026, before the open. We are writing about it today.
Errors or inaccuracies are possible. Spotted something that looks wrong? Write to me and I will correct it.
The Quarter
| The quarter | A year ago | |
|---|---|---|
| Revenue | $364.6 million | +22% |
| GAAP operating loss | $1.5 million | $11.6 million |
| Non-GAAP operating income | $61.1 million | $45.1 million |
| Non-GAAP operating margin | 17% | 15% |
| GAAP EPS | $0.08 | $0.03 |
| Non-GAAP diluted EPS | $1.48 | $1.09 |
| Operating cash flow | $55.4 million | $66.8 million |
| Adjusted free cash flow | $52.3 million | $64.1 million |
Growth is good and the margin expanded. Non-GAAP operating margin rose from 15% to 17%, and it did so against a headwind of roughly 210 basis points from currency. That is a real improvement.
And in the same breath: cash flow fell. $55.4 million from operations against $66.8 million a year ago. Revenue rose 22% and the cash coming in fell 17%.
The Number That Explains the Balance Sheet
Cash fell from $1,503.1 million at the end of 2025 to $853.4 million at 30 June.
About $650 million less in six months. It does not come from losses - the company is close to break-even on a GAAP basis and very profitable on an adjusted one.
The answer is in one line of the release:
The company repurchased about 2.33 million shares in the quarter for roughly $182 million. And as of the end of the quarter, the entire $870 million authorisation had been used, with no shares remaining for future repurchase under the programme.
That explains most of the fall in cash. And it is a decision, not an accident. A company buying its own shares to the tune of $870 million is saying something about how it sees the price. But it also ends the period with a thinner cushion, and with no active repurchase programme ahead.
The Gap Between GAAP and Adjusted
GAAP earnings per share were $0.08. Non-GAAP earnings per share were $1.50.
Eighteen times.
The gap comes from two things the company strips out: stock-based compensation and restructuring costs. At the operating level it looks like this: a GAAP loss of $1.5 million against adjusted income of $61.1 million.
To be fair, the direction is improving. The GAAP operating loss narrowed from $11.6 million to $1.5 million, so the company is approaching break-even on a GAAP basis too. But it is not there yet.
The Restructuring, in the Founders' Words
In the release, co-founders and co-CEOs Roy Mann and Eran Zinman put it this way:
"We made the difficult decision to restructure our organization, sharpen our product portfolio, and commit fully to the AI Work Platform in order to capture the largest opportunity we have ever seen in software"
And the early result they point to: annual recurring revenue from AI products doubled from the first quarter, and represents 17% of net new recurring revenue in the quarter.
What Is Genuinely Strong Here
Contracted backlog is growing faster than revenue. Remaining performance obligations stood at $937 million, up 34%, and current RPO at $750 million, up 27%. When the backlog grows 34% and revenue grows 22%, bookings are running ahead of recognised revenue.
And the large customers:
| Now | A year ago | |
|---|---|---|
| Customers above $100,000 ARR | 2,019 | 1,472 |
| Customers above $50,000 ARR | 4,834 | 3,702 |
| Customers with more than 10 users | 65,783 | 61,803 |
Large customers are growing 37%, mid-sized 31%, and the broad base only 6%. This is a company moving up market.
And net dollar retention was 109% across all customers, and 115% among those above $100,000.
Guidance, and Here It Gets Familiar
For the third quarter monday.com expects revenue of $368 million to $370 million, growth of 16% to 17%.
The quarter just reported grew 22%.
This is the pattern that ran through all of last week, and here it is again: the quarter is perfectly fine and the guide points to a slowdown. The difference is that here the slowdown is already inside the numbers the company itself is giving. From 22% to 16.5% at the midpoint, in one quarter.
For the full year: revenue of $1,466 million to $1,474 million, growth of 19% to 20%, and adjusted free cash flow of $280 million to $290 million.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
This report contains three stories, and only one of them is in the headline.
The first is the headline itself: 22% growth and record adjusted operating income. That is true, and the margin expansion from 15% to 17% against a currency headwind is a genuine achievement.
The second is the buyback, and it is not in the headline. $870 million, the entire authorisation, used up. Cash on the balance sheet fell $650 million in half a year. I do not think that is bad - a company buying itself at a price it believes in is doing exactly what it should. But it needs reading correctly: the fall in cash is not an operating burn, and that programme is finished. From here there is no built-in buyer in the stock.
And the third is the gap. Earnings per share of $0.08 on a GAAP basis against $1.50 adjusted. Eighteen times is not a footnote. Most of that gap is stock-based compensation, which is a real expense that dilutes - and anyone looking only at $1.50 is ignoring it.
And what I will be tracking is the backlog against the guide. RPO is growing 34% while the company guides to 16% to 17% next quarter. That gap, between what has already been ordered and what the company is willing to promise, is the interesting place in this report, and it will tell us far more than the quarter itself.
