Database company MongoDB Inc. crushed Wall Street’s forecasts as it delivered its second-quarter financial results today and followed up with strong guidance for the current quarter and even raised its full-year outlook.
But if anyone was thinking that ought to be enough to boost its share price, they would have been sorely disappointed, for the stock tanked in the after-hours session.
MongoDB reported earnings before certain costs such as stock compensation of $1.90 per share, easily beating the Street’s target of $1.62. Revenue for the period rose by an impressive 30%, to $771.8 million, far exceeding the analyst consensus estimate of $735 million. They were solid numbers, and strong enough to help the company deliver a net profit of $40.9 million in the quarter, a stark reversal from the same period one year earlier, when it suffered a net loss of $47 million.
For the full year, MongoDB said it’s bumping up its earnings and revenue forecast by a considerable margin. It’s now targeting fiscal 2027 earnings of $6.39 to $6.58 per share on revenue of between $2.99 billion and $3.03 billion. That’s up from its earlier range of $5.95 to $6.14 per share in earnings and $2.92 billion to $2.96 billion in revenue. The new forecast came in well above the analyst consensus estimate of $6.13 per share in earnings and $2.96 billion in sales.
President and Chief Executive CJ Desai (pictured) said the 30% revenue growth rate was the company’s highest in several years. “This performance reflects the mission-critical role our platform plays for customers, with strength driven by core enterprise workloads and early momentum with AI use cases,” he added.
The company sells a document-oriented database service that comes with advanced capabilities such as vector search that are designed to support artificial intelligence applications. Most of its revenue these days comes from the cloud-hosted version, called MongoDB Atlas.
On a conference call, Desai said revenue from the multicloud Atlas service had grown 29% year-over-year. But some analysts were disappointed with that figure, and had questions about how MongoDB can accelerate that growth further, given that it has been growing at more or less the same pace for three straight quarters now.
Clearly, some investors felt the same. In a note to clients, Mizuho Securities analyst Jordan Klein said that major hedge funds invested in MongoDB had privately hoped for Atlas to grow at 30% to 31%, and were therefore extremely disappointed it didn’t. Because MongoDB’s stock had rallied more than 20% over the last month, there was little tolerance for error, he said.
That’s likely the reason why MongoDB’s stock fell more than 14% in the after-hours session, despite the company’s seemingly stellar performance. The stock had already fallen 4% during the regular trading session, meaning that almost all of the last month’s gains have been wiped out. As a result, the stock is now up just 3% in the year to date.
Those investors may be acting a little too hasty though, for there are other signs that point to MongoDB’s ability to generate more sustainable growth in the coming months, said Michael Ni of Constellation Research.
“The most interesting number was the 36% revenue growth of Enterprise Advanced, which allows larger organizations to take advantage of MongoDB’s run-anywhere philosophy across the cloud, private and self-managed environments,” he said. “This reflects the growing enterprise interest in the value of AI deployment optionality. As data and AI workloads move into production, enterprises appear to want the intelligence closer to where their operational data already has to live.”
Holger Mueller, also of Constellation Research, said Atlas’s growth was impressive regardless of what investors may have sought, and shows the strength of demand for an original open-source database that operates as software-as-a-service in the public cloud. He pointed to the work of Desai, who joined the company last November and has wasted little time in making his own mark.
“Desai, with his product experience from Oracle and ServiceNow, is putting a lot of emphasis on making MongoDB the AI database of choice for the agentic era, and it’s working so far,” Mueller said. “He’s made it much easier for developers to implement agentic capabilities atop of the MongoDB database. MongoDB’s challenge remains profitability, but today’s results show it’s heading in the right direction.”
The company offered a bullish forecast for the current quarter, calling for earnings of between $1.57 and $1.61 per share on revenue of $756 million to $761 million. That’s well ahead of the Street’s consensus of $1.51 per share in earnings and $744.2 million in revenue.