monday.com Guides $165–175 M Non-GAAP Income, Margin Compression Exposed by GAAP Gap
monday.com’s FY2025 non-GAAP operating income reached $175.3 million (14% margin) while GAAP operating income hovered near breakeven due to excluded stock-based compensation. FY2026 guidance forecasts $165–175 million non-GAAP operating income (11–12% margin), mid-teens headcount growth, mid-to-high 80s% gross margins and shares down over 20%.
1. Divergence Between Non-GAAP and GAAP Profitability
monday.com reported FY2025 non-GAAP operating income of $175.3 million (14% margin), while GAAP operating results narrowed only to near breakeven, reflecting the exclusion of stock-based compensation from non-GAAP figures.
2. Compressed Margins and Elevated Spending in FY2026 Guidance
Management’s FY2026 guidance targets non-GAAP operating income of $165–175 million (11–12% margin) alongside mid-teens percentage headcount growth, R&D investment rising to 19% of revenue, gross margin contracting to mid-to-high 80s%, and free cash flow margin falling to 19–20%.
3. Legal Probe and Stock Price Impact
A shareholder investigation has been launched over the prominence of non-GAAP metrics and potential regulatory compliance issues, following a more than 20% share decline on February 9 driven by weaker profitability guidance.