monday.com revenue outlook weighs on shares despite Q2 earnings beat

monday.com (NASDAQ:MNDY) shares fell about 6% on Monday after the software company issued third quarter revenue guidance that came in slightly below Wall Street expectations, overshadowing a second quarter earnings and revenue beat. For the third quarter, monday.com forecast revenue of $368 million to $370 million, representing year-over-year growth of 16% to 17%. The midpoint of the outlook is below the roughly $372.8 million analysts had expected, contributing to the negative reaction in the shares. The company reported second-quarter revenue of $364.6 million, up 22% year over year and above analyst expectations of about $355.5 million. Adjusted diluted earnings per share came in at $1.48, ahead of consensus estimates of roughly $1.11 to $1.14. The company also reported that annual recurring revenue from its AI products doubled from the first quarter and accounted for 17% of net new ARR in the second quarter. monday.com said it also recorded a record number of net new customers with more than $100,000 and $500,000 in ARR. “Q2 reinforced our conviction that our strategy is working and that it was time to move faster. 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,” monday.com co-founders and co-CEOs Roy Mann and Eran Zinman said in a statement. “The early results reinforce our conviction. ARR from AI products doubled from Q1, representing 17% of net new ARR in Q2, and customer response to our new direction continues to exceed our expectations.” For the full year, monday.com maintained revenue guidance of $1.466 billion to $1.474 billion, representing growth of 19% to 20...