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.
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.
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