MongoDB sinks after softer growth outlook overshadows beat
MongoDB fell 13.41% premarket after its third-quarter revenue growth outlook of about 20.5% at the midpoint and flat Atlas growth overshadowed second-quarter beats on earnings and revenue.
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.
Read Also: MongoDB Likely To Report Higher Q2 Earnings; These Most Accurate Analysts Revise Forecasts Ahead Of Earnings Call 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.