MongoDB Inc. (NASDAQ:MDB) stock fell Wednesday as slowing third-quarter growth guidance and another quarter of flat Atlas growth overshadowed the company’s second-quarter earnings beat. Its premium valuation and a strong pre-earnings rally also raised the bar for results.
MongoDB expects third-quarter revenue growth of about 20.5% at the midpoint, down sharply from 30% in the second quarter. Meanwhile, Atlas revenue grew 29% for the fifth straight quarter. Although that topped the company’s forecast, the lack of acceleration disappointed investors seeking stronger cloud growth.
MongoDB reported adjusted earnings of $1.90 per share. That beat the analyst estimate of $1.61. Revenue rose 30% year over year to $771.77 million. It also topped the $732.91 million consensus estimate.
MongoDB Margins Expand
Adjusted operating income more than doubled to $186 million. The adjusted operating margin expanded to 24% from 15% a year earlier.
Adjusted gross margin rose 210 basis points to 75.9%. Subscription gross margin increased 70 basis points to 78.3%.
Meanwhile, remaining performance obligations jumped 91% to $1.52 billion. The current portion increased 73%.
Operating cash flow totaled $142 million, while free cash flow reached $138 million. MongoDB ended the quarter with $2.4 billion in cash and short-term investments. That followed $100 million in share buybacks and $59 million in restricted stock unit tax settlements.
Record Customer Growth Supports AI Push
MongoDB added a record 2,900 net new customers. That lifted its total customer base to 70,600.
Nearly 3,000 customers now generate at least $100,000 in annual recurring revenue. That figure increased 17% from a year earlier.
Demand for Atlas Vector Search and Voyage AI embeddings also supported growth. In addition, MongoDB introduced a managed MCP server for AI applications.
Atlas Revenue Rises 29%
Atlas revenue increased about 29% for the fifth straight quarter. Atlas added a record $127 million in year-over-year revenue.
Atlas customers rose to 69,300 from 58,500 a year earlier. The net annual recurring revenue expansion rate improved to 122% from 119%.
Voyage AI’s customer base nearly doubled sequentially for the second straight quarter. Enterprise Advanced and other revenue grew about 36%.
Still, Atlas growth remained near 29% for the fifth consecutive quarter. That may have disappointed investors expecting stronger acceleration after the stock’s recent rally.
MongoDB Raises Fiscal 2027 Outlook
MongoDB raised its fiscal 2027 adjusted earnings outlook to $6.39 to $6.58 per share. The analyst estimate was $6.11.
The company now expects revenue of $2.99 billion to $3.03 billion. That compares with the $2.95 billion consensus estimate.
MongoDB expects third-quarter revenue of $756 million to $761 million. It forecast adjusted earnings of $1.57 to $1.61 per share. The analyst estimate was $1.53.
The company also expects fiscal 2027 Atlas growth of about 27%. Enterprise Advanced and other revenue should grow about 11%.
MDB Price Action: MongoDB shares were down 13.41% at $376.00 during premarket trading on Wednesday, according to Benzinga Pro data.
Photo via Shutterstock
