Monday.com's No-Touch Channel Weakness and AI Investment Costs Were Embedded in Guidance Without Prior Disclosure

Rhea-AI Summary

{"summary":"","positive":[],"negative":[],"faq":[]}

Key Figures

FX drag: 100–200 basis points Gross margin: 90% R&D spend ratio: 17% of revenue +5 more

8 metrics

FX drag 100–200 basis points Foreign exchange headwind embedded in 2026 guidance

Gross margin 90% Historical margin level before guided decline in FY2026

R&D spend ratio 17% of revenue Lower end of FY2025 R&D spending range

R&D spend ratio 19% of revenue Higher end of FY2025 R&D spending range

Monday Vibe ARR $1 million Early-stage annual recurring revenue for Monday Vibe

Revenue base $1.2 billion Company annual revenue base referenced in article

Growth deceleration 27% to 18–19% Change from prior growth to FY2026 guidance range

Single-day drop 13–14% Stock move on February 9, 2026 after earnings/guidance

Market Reality Check

Price: $73.09 Vol: Volume 8,114,640 is 2.51x...

high vol

$73.09 Last Close

Volume Volume 8,114,640 is 2.51x the 20-day average of 3,235,036, signaling elevated trading interest ahead of/around this investigation news. high

Technical Shares at $73.09 are trading below the 200-day MA of $208.92 and 78.18% below the 52-week high.

Peers on Argus

While MNDY was down 1.38%, peers like OTEX -6.58%, DSGX -5.13%, and PCTY -4.8% a...

While MNDY was down 1.38%, peers like OTEX -6.58%, DSGX -5.13%, and PCTY -4.8% also declined. However, the momentum scanner did not flag a coordinated sector move, suggesting the investigation ties more to company-specific concerns than a pure software rotation.

Previous AI Reports

3 past events · Latest: 2025-07-10 (Positive)

Same Type Pattern 3 events

Date	Event	Sentiment	Move	Catalyst
2025-07-10	AI platform launch	Positive	-2.7%	Unveiled monday magic, monday vibe and monday sidekick as major AI capabilities.
2025-02-10	AI product release	Positive	+26.5%	Full release of monday service, an AI-powered enterprise service management platform.
2025-02-10	AI strategy vision	Positive	+26.5%	Announced 2025 AI Vision with AI Blocks, Product Power-ups and Digital Workforce pillars.

Pattern Detected

AI-tagged announcements have generally been viewed positively, with two prior AI launches seeing strong gains and one platform-wide AI update drawing a mild negative reaction.

Recent Company History

Recent history shows monday.com using AI as a core strategic theme. On Feb 10, 2025, it detailed an AI Vision and launched AI agents and credits, coinciding with a 26.46% move on two AI-tagged releases. On Jul 10, 2025, a platform-wide AI shift with products like monday magic and monday vibe saw a more muted -2.72% reaction. Today’s article, tagged “AI,” focuses less on product innovation and more on how AI costs and structural channel issues were reflected in guidance and disclosures.

Historical Comparison

AI

+16.7 %

Average Historical Move

Historical Analysis

AI-tagged news for MNDY previously produced an average move of 16.73%, mostly on product launches. This article, though tagged “AI”, centers on AI cost pressure and disclosure questions rather than new capabilities.

Typical Pattern

AI coverage evolved from vision and platform-wide launches in early and mid-2025 to today’s focus on how AI investments and related margin impacts were embedded in long-term guidance.

Market Pulse Summary

This announcement highlights an investigation into whether monday.com sufficiently disclosed known h...

Analysis

This announcement highlights an investigation into whether monday.com sufficiently disclosed known headwinds—structural no-touch channel weakness, foreign-exchange drag, and rising AI investment costs—before embedding them in reduced 2026 guidance. Earlier AI news focused on new capabilities and adoption, whereas this centers on margin pressure and growth deceleration from 27% to 18–19%. Investors may track future disclosures around channel performance, AI monetization, and any legal developments.

Key Terms

performance marketing, basis point, foreign exchange, ARR

4 terms

performance marketing technical

"persistent weakness in its "no-touch" performance marketing channel serving"

Performance marketing is an advertising approach where companies pay only when a measurable action happens—such as a sale, a lead, or a sign-up—similar to hiring a salesperson paid on commission rather than by the hour. Investors watch it because it makes customer acquisition costs and returns easier to track and optimize, affecting revenue growth, profit margins and how efficiently a business can scale; changes in ad platforms or privacy rules can quickly alter its effectiveness.

basis point financial

"and a 100–200 basis point foreign exchange drag driven by Israeli"

A basis point is a unit equal to one one‑hundredth of a percent (0.01%), used to describe very small changes in interest rates, bond yields, fees or other percentage figures. Think of it like a single dollar change on $10,000: tiny by itself but meaningful when applied to large sums or repeated over time, so investors use basis points to track and compare small but financially significant moves precisely.

foreign exchange financial

"100–200 basis point foreign exchange drag driven by Israeli shekel"

Foreign exchange is the process of swapping one country's money for another’s, like exchanging dollars for euros when traveling. It matters because it determines how much your money is worth in another country, affecting prices, investments, and international trade. This system helps businesses and governments buy and sell across borders smoothly.

ARR financial

"Monday Vibe reached $1 million in ARR, a small fraction of the"

ARR, or Annual Recurring Revenue, is the predictable income a business expects to earn each year from ongoing customer subscriptions or contracts. It’s like a steady paycheck that shows the company's ability to generate consistent revenue over time, helping investors assess its stability and growth potential. ARR provides a clear picture of how well a company is performing in building long-term customer relationships.

AI-generated analysis. Not financial advice.

(NASDAQ: MNDY)

NEW YORK, Feb. 11, 2026 /PRNewswire/ -- Levi & Korsinsky, LLP is investigating monday.com Ltd. (NASDAQ: MNDY) regarding whether the company's forward-looking financial commitments were made without adequately disclosing known headwinds that were later embedded in its reduced 2026 guidance. MNDY shareholders who suffered losses may learn about their rights in connection with this investigation.

On its February 9, 2026 earnings call, monday.com disclosed two specific headwinds that it had built into its 2026 guidance: persistent weakness in its "no-touch" performance marketing channel serving small and medium businesses, and a 100–200 basis point foreign exchange drag driven by Israeli shekel appreciation. CFO Eliran Glazer stated that the 2026 guidance "doesn't assume any rebound in performance marketing or top-of-funnel activity" and is "based on current conditions."

The no-touch SMB channel has been a recurring concern. In Q2 FY2025, management attributed a revenue headwind to temporary web-traffic softness caused by Google search algorithm changes, and the stock fell 26%. In Q3 FY2025, the stock fell 19% on a similar guidance miss. By the February 9 call, management acknowledged that the no-touch weakness was not temporary but structural, stating it does not believe no touch channels will exit their "choppy demand environment" in 2026. The question is when management first recognized this shift from a temporary disruption to a persistent headwind, and whether prior disclosures adequately reflected that evolution.

Separately, monday.com is increasing investment in AI products – including Monday Vibe, Monday Sidekick, and Monday Agents – which management cited as requiring incremental spending. The company guided gross margins to decline from 90% to the mid-to-high 80s in FY2026, attributed in part to AI infrastructure costs. R&D spending rose from 17% to 19% of revenue in FY2025, and management guided for mid-teens percentage headcount growth in FY2026 concentrated in sales and R&D. These investments reduce near-term profitability while the revenue contribution from AI products remains early-stage – Monday Vibe reached $1 million in ARR, a small fraction of the company's $1.2 billion annual revenue base.

The combination of no-touch channel deterioration, FX headwinds, rising AI investment costs, and the withdrawal of 2027 financial targets collectively explain the deceleration from 27% to 18–19% guided growth. Investors are evaluating whether these headwinds were known to management earlier than they were communicated to the market.

Monday.com's stock fell 13–14% on February 9, 2026, extending its decline to approximately 70% from its 52-week highs.

Investors who purchased MNDY shares and wish to discuss their legal rights may contact Joseph E. Levi, Esq. at the information below.

Levi & Korsinsky, LLP is a nationally recognized firm with offices in New York, California, Connecticut, and Washington, D.C. that prosecutes securities, merger, and consumer class actions on behalf of investors and consumers; more information is available at www.zlk.com.

CONTACT:
Joseph E. Levi, Esq.
Levi & Korsinsky, LLP
33 Whitehall Street, 27th Floor
New York, NY 10004
Tel: (212) 363-7500
Fax: (212) 363-7171
Email: jlevi@levikorsinsky.com
www.zlk.com

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SOURCE Levi & Korsinsky, LLP