Monday.com shares fell 6.10% to $87.45 on Monday after dropping as much as 11% in early trading, putting the stock on track for its sharpest single-day decline in six months, as the work management software company forecast third-quarter 2026 revenue of $368 million to $370 million, below Wall Street estimates of about $373 million. The weaker near-term outlook overshadowed a stronger second quarter, when adjusted earnings reached $1.48 per share and revenue was about $365 million, both ahead of analyst expectations. Management said the company is undergoing its most significant strategic shift since its founding, moving from software that helps teams manage work toward an AI-focused platform where employees and AI agents collaborate. Co-Chief Executive Officers Roy Mann and Eran Zinman said a sweeping restructuring, including a roughly 20% workforce reduction affecting about 620 employees, is intended to flatten management layers, create smaller teams and redirect savings into people, products and artificial intelligence. Mann called the layoffs "the hardest decision we have made since founding the company." AI remains central to Monday.com’s growth case. The company said AI annual recurring revenue doubled from the first quarter and accounted for 17% of net new ARR in the second quarter. Monday.com also said it crossed $1.5 billion in total ARR in July and added more than 105,000 customers in the second quarter, while continuing to deepen ties with larger accounts. The results arrived days after shareholders approved sharply higher compensation packages for Mann and Zinman that could each reach $14 million by 2029, a vote that drew scrutiny because it followed the layoffs. The stock has remained under heavy pressure, down 44% year-to-date and roughly 66% over the past 12 months, as investors debate whether the company reacted quickly enough to the competitive threat from AI. Monday.com has not revised its 2026 revenue guidance of about $1.46 billion, but the muted third-quarter outlook and broader reorganization have shifted attention to whether management can translate its AI pivot into stronger growth.