Monday shares rise on double-digit growth rate and improved profitability
The Israeli software company recorded revenues of $351 million in the first quarter, with improved profitability and customer retention exceeding 100%; the company is sticking to its annual forecast and is not backing down from it, despite market concerns about the threat of AI to the software industry.
The Israeli company Monday, which has become one of the main symbols of the software stock crisis collapsing against the backdrop of the threat of artificial intelligence, has published financial reports for the first quarter. The results are good overall, with a continued double-digit growth rate and improved profitability, despite the fact that more than half of the company's employees are in Israel and receive salaries in shekels. Monday also reiterates its annual forecast for 2026 and does not reduce it despite concerns. In the meantime, the stock is responding with a sharp increase, after collapsing by 50% since the beginning of the year. Monday ended the quarter with revenues of $351 million, a growth of 24% compared to the corresponding quarter. The customer retention rate continues to be higher than 100%, which means that the company is also expanding among the organizations that are already its customers.
Operating profit doubled to $20 million, as did the operating profit margin, which reached 6% of revenue. Cash flow from operations fell to $105 million from $112 million. For the second quarter, Monday expects revenue of $354 to $356 million, a very slight increase compared to the previous quarter and a slower growth rate of about 19% compared to the corresponding quarter. For the entire year, Monday is expected to end with revenue of about $1.46 billion, an annual growth of 20% compared to 2025. These are not bad numbers, certainly in relation to the reports of software companies that have been published to date. But Monday's investors are sensitive to any number these days, and last quarter it was sharply punished after asking the market to ignore the forecast it provided for 2027. Now they will wait for more detailed updates from the company.
"The results we presented in the first quarter reflect our responsibility and adherence to business discipline, while continuing to develop and make ambitious progress," said Monday's co-founders and CEOs, Roy Mann and Eran Zinman.
Indeed, the first quarter numbers were higher than investors' expectations, with Monday explaining that the internal uses of AI increased productivity, which made it possible to increase revenue without increasing the workforce at the same rate.
Against this background, Monday decided not to expand the company's offices by 1,000 square meters at EcoTower at this stage, a plan they announced in 2025, and to temporarily settle for an additional 3 floors in the Sonol Tower.
Monday says in this context: "Following a need that arose at the beginning of the year, and due to the fact that the EcoTower project will not be ready for occupancy until later this year, Monday temporarily rented 3 additional floors in the Sonol building. After rethinking the company's real estate needs, we decided that the solution in the Sonol building provides the best solution in the long term." Also, Monday launched the AI Work Platform during the quarter, and continued the transition to a usage-based pricing model, which translated into revenue growth. "As AI addresses more and more aspects of work for our customers, our business grows with it. We believe that the most significant chapter in Monday's story is the one we are writing now," say Mann and Zinman.
