Monday.com finally put a number on its AI sales: $36 million a year, under 3% of revenue

Monday.com, the Israeli maker of work-management software, gave a total dollar figure for its AI business for the first time on Monday. Its AI products had reached $36 million in annual recurring revenue, the yearly value of its subscriptions, at the end of September.

That is a small number. The company expects about $1.47 billion in revenue this year, so AI is equal to less than 3% of sales. And the push to become what its founders call an AI-first company is costing money now.

Monday.com guided fourth-quarter revenue growth down to about 14%, from 19% in the third quarter. Yahoo Finance said the outlook reflects investment in AI and in selling to large companies. Its shares fell about 7% in early trading on Monday, even though third-quarter results beat forecasts.

For buyers and investors, the disclosure is a useful gauge of how companies actually pay for AI inside the software they already use. The answer so far: cautiously, through add-on credits, and only after they see results.

What the $36 million includes

The figure covers stand-alone AI products, AI agents, a tool called vibe for building apps by describing them, and packages of AI credits. Credits are prepaid units that customers spend when the AI does work for them.

The definition deserves a close read. It also counts a share of ordinary subscription plans that monday.com assigns to AI credits bundled inside them. The company says it makes that split only to calculate the AI figure.

In plain terms, part of the $36 million is money customers pay for their regular plan, and monday.com decides how much of it to label as AI. Cutting the other way, one-time purchases and overage charges are left out.

Growth is real, but from a low base. In August, co-CEO Eran Zinman said AI recurring revenue had doubled from the first quarter to the second and made up 17% of the new recurring revenue added in the quarter. The company gave no dollar figure then.

Its agents have handled more than 6 million interactions in less than two quarters. Monday.com did not say how many customers pay for agents, or what an interaction is worth to them.

How customers are paying

In May, monday.com moved to pricing that combines seats, meaning per-user licenses, with credits. In August, executives said some customers were using up their credit allowance and buying more. Growth inside accounts now comes from AI usage as well as from adding human users, they said.

They also said it was too early to know how that would affect net dollar retention, the measure of how much more existing customers spend each year. That figure was 108% in the third quarter, down from 109% in the second.

The biggest accounts are where the money is moving. Customers paying more than $100,000 a year rose 33% to 2,127. Those above $500,000 rose 58% to 123. Revenue already under contract but not yet recognized rose 27% to $946 million.

Customers with more than 10 users, by contrast, grew just 5%. The pattern points to a business moving toward large enterprises while its broader customer base barely grows.

The shift is expensive. Monday.com cut about a fifth of its staff, roughly 600 jobs, in July. Executives said most of the roughly $100 million in yearly savings would be reinvested in people, product and AI, and that AI computing costs would eat into the rest.

Cash from operations fell to $20.4 million in the quarter, from $95.1 million a year earlier. That drop included $47.2 million in restructuring payments: $32 million for employee costs such as severance, and the rest for exiting office leases.

Buyers want evidence first

A rival's results last week point the same way. HubSpot, which sells sales and marketing software to mid-sized firms, said on Nov. 4 that 20% of customers on its higher-priced tiers now use its AI agents. That is up 11 percentage points since the start of the year.

HubSpot's customer-service agent resolved more than 2 million support issues in the quarter. Monthly credit use has risen nearly 2.5 times since the start of the year.

Yet CEO Yamini Rangan told analysts that customers "want proof before they buy." HubSpot has introduced free trials, is using partners and consultants to help customers get results, and is bringing in senior decision-makers earlier. It now expects new annual recurring revenue to fall this year compared with last.

Forrester research cited by trade publication CXM found that buying groups for generative AI purchases average 14 people, twice the size of groups for software without those features. More people at the table means slower deals.

Taken together, the two companies show how corporate AI buying is actually working. Agents are bought as metered add-ons on top of existing contracts, not as replacements for them. Usage is climbing fast. Spending is still a thin slice of the software bill, and each purchase draws more scrutiny.

For investors, the open question is whether AI credits can grow fast enough to make up for slowing seat sales before the costs of the pivot fade. Monday.com's first disclosure sets a baseline. The next few quarters will show whether that $36 million becomes a meaningful share of revenue.