monday.com grew revenue 22%. Cash flow fell 17%.

monday.com reported its June quarter on 10 August. Revenue grew 21.9%. Non-GAAP operating income reached a record. The company announced that artificial-intelligence products had doubled their annual recurring revenue since the previous quarter.

Net cash from operating activities fell 17.2%.

Both of those describe the same three months. This article is about the gap between them, and about one line in the cash flow statement that explains most of it.

The quarter

The GAAP operating loss of $1.5 million includes a $21.4 million restructuring charge, the first the company has recorded. Excluding it, GAAP operating income would have been positive $19.9 million against a loss a year earlier. That is a genuine improvement and it is not in dispute here.

The cash flow line is going the other way.

First, the guidance did decelerate

When a stock falls after beating on earnings, the reported explanation is usually that guidance disappointed. That explanation is worth checking, because it often does not survive contact with the filing — Sandisk guided 17.7% above the quarter it had just reported and fell anyway, and FICO raised every line of its annual guidance on the day it dropped 17%.

Here it survives. monday.com guided third-quarter revenue to $368–370 million and described that as 16–17% year-over-year growth, against the 21.9% it had just delivered. That is a real step down, stated by the company in its own words, and it is a sufficient explanation for a stock reacting badly.

So this article is not a correction of that story. It is what sits underneath it.

Same quarter, opposite directions

The same split shows up at larger scale elsewhere. Fabrinet grew revenue 35.7% in fiscal 2026 while free cash flow fell 98.0%, to $4.2 million, and there too a single working-capital line — inventory — carried most of it.

The line that explains it

Inside the cash flow statement, one working-capital item moved more than any other.

Q2 2025      +$18,402K
Q2 2026       −$3,540K
──────────
Swing        −$21,942K

That $21.9 million swing is larger than the entire $11.5 million decline in operating cash flow. Everything else in the quarter, net, worked in the other direction.

For a subscription business this line is not an accounting curiosity. Deferred revenue is cash already collected for service not yet delivered — it is billings running ahead of revenue. When it stops contributing, billings have stopped outrunning revenue, and revenue is the thing that gets reported later.

Two things keep this from being a straightforward alarm:

• The balance is still growing. Deferred revenue, current, stood at $451.6 million at 30 June against $409.7 million at 31 December. Over six months it rose; within the June quarter it did not.
• Quarterly seasonality exists in subscription billings, and one quarter is one quarter.

The same line read over years rather than quarters says more. At Peloton, current deferred revenue fell in each of the last two fiscal years while subscription revenue stayed flat — a shrinking member base held up by price increases.

But it is consistent with the guidance. A company whose billings decelerate first, and whose revenue guidance steps from 22% to 16–17% next, is describing the same event twice.

The deterioration is also visible across the half:

The half is worse than the first quarter, and the second quarter is worse than the half.

Where the cash went

The other large number in this filing has nothing to do with operations.

The company spent 48.9% of its opening cash balance buying back stock in six months. The consequences are visible in two other lines that would otherwise be puzzling:

None of this is hidden — it is all in the same statement. It does mean that a reader comparing earnings per share year over year is comparing a number whose denominator moved by a seventh.

What a 6-K contains, and what it does not

monday.com is an Israeli company and a foreign private issuer. It does not file 10-Qs. It files an annual 20-F and interim reports on Form 6-K.

That matters less than it used to — this 6-K carries a full management discussion as Exhibit 99.3, and that discussion does disclose the cash flow decline. But it discloses it for the six months ended 30 June, because the MD&A is semi-annual:

Our net cash provided by operating activities was $160.0 million and $178.8 million for the six months ended June 30, 2026 and June 30, 2025, respectively.

There is no management discussion of the June quarter by itself, because no rule requires one. The −17.2% quarterly figure and the deferred revenue swing exist only in the quarterly columns of the statements — reported, but not explained. A US domestic filer would have had to discuss the quarter.

This is a disclosure-regime difference, not a criticism of the company.

What would make this wrong

• One quarter of deferred revenue is not a trend. Subscription billings are seasonal and lumpy, and the balance is still higher than it was six months ago. If the next quarter reverses this, the reading here was too strong.
• The restructuring charge distorts GAAP comparisons in both directions. $21.4 million of it landed in the quarter, and some of it is non-cash. We have shown the figure with and without it rather than picking one.
• Adjusted free cash flow is the company’s own non-GAAP measure, and the definition is theirs. Where we use it we have said so; the GAAP operating cash flow line is used for the comparisons that matter.
• This is unaudited interim data from a 6-K. The audited figures come in the 20-F.
• We have not modelled the buyback’s per-share effect beyond noting the share count moved. Doing so would require assumptions about timing that the filing does not provide.
• Nothing here is a view on the business. A company can decelerate, restructure, buy back stock and still be doing the right thing. This article is about what the quarterly columns show.

Limits of this analysis

• Weighted-average shares fell 15.0%, from 51.4 million to 43.7 million. Per-share figures are therefore not comparable to last year without adjusting for it.
• Financial income fell 50.6%, from $14.1 million to $7.0 million. That is interest on a cash pile that is now $650 million smaller.

Check it yourself

The 6-K and both exhibits are linked below. The income statement, cash flow statement and balance sheet are in Exhibit 99.1; the semi-annual management discussion is Exhibit 99.3. The deferred revenue line is in the operating section of the cash flow statement, in the three-month column.

If a figure here does not match, tell us and it will be corrected on the article and on the corrections log, with the date.