Monday.com is telling investors to expect slower revenue growth in the third quarter, according to The Information. The work-management software maker, one of the more closely watched mid-cap SaaS names, is signaling that its expansion is cooling after years of fast growth. For anyone tracking how AI is reshaping the software business, that guidance is worth a pause.
Here’s why it matters. Monday.com sells project and workflow tools that compete with Asana, Atlassian, ClickUp, and a long tail of collaboration apps. When a company like this flags a slowdown, it’s rarely just about one quarter. It’s a read on how enterprises are spending, how sales cycles are stretching, and whether the old “seat-based” software model still prints money the way it used to.
What’s actually happening
The core news is simple: Monday.com projects its revenue growth rate will decelerate in Q3, as reported by The Information. Growth isn’t stopping. It’s slowing. That distinction is the whole story, because SaaS valuations are built on the assumption that growth stays high for a long time.
A few things to keep in mind:
- Seat-based pricing is under pressure. Most work software charges per user, per month. AI agents that do the work of several people threaten that math. Fewer seats can mean flatter revenue, even when the product is more useful.
- Enterprises are rationalizing tools. Budgets that once spread across a dozen apps are getting consolidated. Buyers want fewer vendors and clearer ROI.
- The comparison bar is high. Monday.com grew fast for years. Lapping those numbers gets harder every quarter, and the market notices deceleration quickly.
The bigger context
This fits a pattern showing up across the software sector. The status quo for the last decade was straightforward: land a customer, add seats, raise prices, repeat. That flywheel produced reliable 30 to 40 percent growth for the best names. AI is scrambling it.
When a customer can point an AI agent at a task instead of hiring three more people, the seat-expansion engine sputters. What stands out here is that Monday.com has been one of the companies actively adding AI features to stay ahead of exactly this shift. A projected slowdown suggests those features aren’t yet offsetting the broader pressure on how software gets bought and priced.
That’s the tension every horizontal SaaS company is living through right now. The same AI wave that makes their products smarter also gives customers a reason to buy fewer seats.
What to watch next
Monday.com’s guidance is an early signal, not a verdict. Still, if you build, sell, or invest in software, there are a few things worth tracking in the coming quarters:
- Pricing model shifts. Watch for more vendors moving from per-seat to usage-based or outcome-based pricing. That’s the likely response to AI compressing headcount.
- Net revenue retention. This metric shows whether existing customers spend more over time. If it drops across the sector, the slowdown is structural, not company-specific.
- AI monetization proof. Adding AI features is easy. Charging for them and getting customers to pay is the hard part. The winners will show it in the numbers.
- Peer reports. Asana, Atlassian, and Smartsheet will tell you whether this is a Monday.com problem or an industry one.
My take: this is less about a single company missing a beat and more about the software industry entering a genuinely new phase. The companies that figure out how to charge for AI value, rather than just AI features, will pull ahead. The ones that lean on seat growth alone are going to keep flagging quarters like this.
More detail on Monday.com’s specific projections is available in the original report from The Information.