Monday.com stock declined after the company's quarterly guidance came in a bit light for Wall Street's taste.

Shares declined 6.5% to $87.10 on Monday as Wall Street took a negative view of the company's third-quarter revenue guidance. The S&P 500 rose 0.1% and the tech-heavy Nasdaq Composite declined a fraction.

Monday.com, a maker of work management software, guided for third-quarter revenue between $368 million and $370 million, which would represent growth of 16% to 17%. It wasn't enough for Wall Street, which forecast third-quarter revenue of $372.8 million, according to FactSet.

The software company kept its full-year revenue guidance steady at $1.466 billion to $1.474 billion, which is in line with the analyst consensus at the midpoint.

Chief Financial Officer Eliran Glazer said on the earnings call that the guidance reflects the company's decision in late July to cut its global workforce by 20% as well as the impact from some price increases.

"We always try to be responsible, but we do have a strong conviction on the trajectory and the moderation of the guidance reflect our discipline in the moment of transitioning the organization as we continue to move upmarket and also restructuring the organization," Glazer said.

Like many software providers, Monday.com has attempted to push back the narrative that artificial intelligence will make some of its offerings obsolete.

The company has integrated AI into its products, unveiling an AI agent builder and a tool for clients to code their own work applications. It also has been shifting to pricing that factors in AI consumption rather than just the number of user "seats."

Shares are down more than 40% this year.

The shift, however, seems to be working with AI product adoption being a bright spot for Monday.com in the second quarter.

But still, the outlook for the current quarter overshadowed solid second-quarter financials, with adjusted earnings of $1.48 a share, up from $1.09 a year ago and above Wall Street's expectation for $1.12. Revenue grew 22% to $364.6 million, beating the analyst consensus for $355.6 million.

Monday.com reported that annual recurring revenue, or ARR, from AI products doubled from the first quarter.

There was also a drastic uptick in big-money customers that helped second-quarter results. The company said the number of paid customers with more than $500,000 in ARR was 114, as of June 3o, up 68% from 68 a year ago.

Wall Street's response to Monday.com's earnings is the latest sign software stocks remain volatile.

Software stocks last week went from a brutal earnings-fueled selloff on Thursday to quarterly financial reports on Friday being the catalyst for massive gains across the sector.

But it's a new week and Monday.com was the poster child for solid earnings not being enough when it comes to software.

At least, for now.