Monday.comThe company’s stock plunged about 21% on Monday after the project management platform issued weak guidance to address growing concerns that artificial intelligence is disrupting software business models.
The Israel-based company expected sales of $338 million to $340 million for the quarter, falling short of the $343 million expected by analysts surveyed by FactSet. For the full year, Monday.com expected sales of $1.452 billion to $1.462 billion, compared to FactSet’s forecast of $1.48 billion.
Software stocks have been sold off in recent weeks due to growing concerns about the disruption of AI and worries that new agent tools could replace it.
So far this year, the iShares Expanded Technology Software Sector ETF (IGV) has plummeted 22%, and Monday.com stock has already lost about half its value. The company’s market capitalization has fallen over three quarters from its peak in November 2021.
In an earnings call with analysts, management defended the company’s market position, highlighting new AI features such as agent and vibe features being implemented to improve conversion and engagement.
“We don’t see any influence from AI companies at this point. Our products are moving to become more AI-native anyway,” said co-CEO and co-founder Eran Zinman.
He said the company has pivoted its advertising and messaging on its homepage to be more AI-focused.
However, management said it expects market volatility to continue this year due to near-term margin pressure from exchange rates.
The company reported fourth-quarter earnings of $1.04 per share (excluding items), beating LSEG’s estimate of 92 cents per share. Sales rose 25% from the previous year to $333.9 million, exceeding analysts’ expectations of $329.6 million.
Monday.com expected full-year operating profit of $165 million to $175 million, compared with FactSet’s estimate of $220.2 million.
