MongoDB’s Earnings Call: Growth Amid Challenges

Mongodb, Inc. ((MDB)) has held its Q4 earnings call. Read on for the main highlights of the call.

MongoDB’s recent earnings call painted a picture of robust growth tempered by strategic challenges. The sentiment was balanced, highlighting significant achievements in revenue and customer base expansion, particularly with Atlas, while also acknowledging concerns over non-Atlas revenue and a projected decline in operating margins due to strategic investments.

Record Revenue and Growth

MongoDB reported a record revenue of $548.4 million for Q4, marking a 20% increase year-over-year. The company also surpassed the $2 billion revenue milestone for the full year, reflecting a 19% growth compared to the previous year. This impressive financial performance underscores MongoDB’s strong market position and growth trajectory.

Atlas Revenue Growth

Atlas, MongoDB’s cloud database service, continues to be a significant growth driver, with revenue increasing by 24% year-over-year. Atlas now accounts for 71% of MongoDB’s total revenue and is projected to reach a $2 billion run rate by fiscal 2026, highlighting its critical role in the company’s future.

Customer Growth

The company saw its customer base expand by approximately 1,900, bringing the total to over 54,500. Notably, the number of customers with over $1 million in annual recurring revenue (ARR) grew by 24% year-over-year, reaching 320. This growth reflects MongoDB’s successful customer acquisition and retention strategies.

Voyage AI Acquisition

In a strategic move to bolster its AI capabilities, MongoDB acquired Voyage AI for $220 million. This acquisition aims to enhance MongoDB’s offerings in embedding and reranking models, which are highly regarded in the AI community, positioning the company at the forefront of AI advancements.

Non-Atlas Revenue Challenges

Despite the positive growth in Atlas, MongoDB faces challenges with its non-Atlas revenue, which is expected to decline in the high-single digits for fiscal 2026. This decline is attributed to a $50 million headwind from multiyear license revenue, posing a challenge to the company’s overall revenue growth.

Operating Margin Decline

MongoDB projects a decrease in operating margin from 15% in fiscal 2025 to 10% in fiscal 2026. This decline is due to the reduction in high-margin multiyear license revenue and increased investments in research and development and marketing, reflecting the company’s strategic focus on long-term growth.

Forward-Looking Guidance

Looking ahead, MongoDB provided a revenue projection of $524 million to $529 million for Q1 and $2.24 billion to $2.28 billion for the full fiscal year 2026. The company anticipates a non-GAAP operating margin of around 10% for the year. Despite the challenges, MongoDB expects stable Atlas consumption growth and announced a $200 million stock buyback to mitigate the dilutive impact of its Voyage AI acquisition.

In conclusion, MongoDB’s earnings call highlighted a strong quarter with significant achievements in revenue and customer growth, particularly in Atlas. However, the company faces challenges with non-Atlas revenue and a projected decline in operating margins due to strategic investments. Overall, the sentiment was balanced, reflecting both optimism and caution as MongoDB navigates its growth path.