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    MDB
    Earnings call· Jul 2025(Q2 FY26)

    MongoDB, Inc. MDB

    Aug 26, 2025 Source

    Executive summary

    MongoDB Q2 FY26 — Strong Atlas Growth and Margin Expansion

    MongoDB delivered a strong quarter, driven by accelerating Atlas revenue growth and expanding profitability, underscoring the effectiveness of its upmarket strategy and self-serve channel. The company is actively investing in AI-driven capabilities and app modernization, positioning itself for long-term growth despite the current early stages of enterprise AI adoption. Management remains focused on balancing growth investments with disciplined spending to enhance shareholder value.

    Highlights

    5

    • Total revenue reached $591 million, up 24% year-over-year, exceeding guidance.

    • Atlas revenue growth accelerated to 29% year-over-year, representing 74% of total revenue.

    • Non-GAAP operating income was $87 million, achieving a 15% non-GAAP operating margin, up from 11% in the prior year.

    • Total customer count grew by 2,800 sequentially to 59,900, with 5,000 new customers added over the last two quarters.

    • Free cash flow was $70 million, a significant improvement from negative $4 million in the year-ago period.

    Concerns

    4

    • The multiyear license revenue headwind for FY26 is now expected to be $40 million.

    • Non-Atlas subscription revenue is projected to decline in the mid-single digits for FY26.

    • Q3 operating margin is expected to be sequentially lower due to non-Atlas revenue decline, R&D hiring, and marketing investments.

    • A recent MIT report indicated that 95% of AI implementations are not yielding returns, highlighting challenges in AI monetization.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full-year FY26 Revenue
    $2.34 billion to $2.36 billion
    high materiality
    High
    Full-year FY26 Non-GAAP Income from Operations
    $321 million to $331 million
    high materiality
    High
    Full-year FY26 Non-GAAP Operating Margin
    14%
    high materiality
    High
    Full-year FY26 Non-GAAP Net Income per Share
    $3.64 to $3.73
    medium materiality
    High
    Full-year FY26 Non-GAAP Tax Provision
    20%
    low materiality
    High
    Q3 FY26 Revenue
    $587 million to $592 million
    high materiality
    High
    Q3 FY26 Non-GAAP Income from Operations
    $66 million to $70 million
    medium materiality
    High
    Q3 FY26 Non-GAAP Net Income per Share
    $0.76 to $0.79
    medium materiality
    High
    H2 FY26 Atlas Growth
    mid-20s percentage growth
    high materiality
    High
    Full-year FY26 Non-Atlas Subscription Revenue
    down mid-single digits
    medium materiality
    High
    Full-year FY26 Multiyear License Revenue Headwind
    $40 million
    medium materiality
    High
    Q3 FY26 Non-Atlas Business Decline
    low 20% year-over-year percentage decline
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Atlas
    Atlas revenue accelerated year-over-year and represented 74% of total revenue. Growth was driven by broad-based strength, especially in larger customers in the U.S., and strong consumption.
    		$437.34M29%——
    Non-Atlas
    Non-Atlas revenue came in ahead of expectations, benefiting from success in selling incremental workloads to existing EA customers and more multiyear deals than anticipated. Approximately half of the non-Atlas revenue outperformance was attributable to multiyear deals.
    Non-Atlas ARR growth: 7% year-over-year
    		$153.66M———

    Operational metrics

    18
    Total Revenue
    $591 millionup 24% year-over-year
    Q2 FY26

    Above the high end of guidance.

    Non-GAAP Operating Income
    $87 million
    Q2 FY26

    Stronger-than-expected margin result, benefiting mainly from revenue outperformance.

    Non-GAAP Operating Margin
    15%compared to 11% in the year ago period
    Q2 FY26

    Stronger-than-expected margin result.

    Total Customers
    59,900up from over 50,700 in the year ago period
    Q2 FY26 end

    Robust customer additions, including 300 from Voyage AI acquisition.

    Atlas Customers
    58,300compared to over 49,200 in the year ago period
    Q2 FY26 end

    Growth reflects new customers and existing EA customers deploying workloads on Atlas.

    Direct Sales Customers
    7,300decline of 200 customers sequentially and flat year-over-year
    Q2 FY26 end

    Due to reallocation of go-to-market resources from mid-market to enterprise channel.

    Net ARR Expansion Rate
    119%consistent with recent quarters
    Q2 FY26

    Total company net ARR expansion rate.

    Customers with at least $100,000 in ARR
    2,56417% growth versus the year ago period
    Q2 FY26 end

    Reflects growth in larger customer cohorts.

    Gross Profit
    $436 million
    Q2 FY26

    Gross profit for the quarter.

    Gross Margin
    74%down from 75% in the year ago period
    Q2 FY26

    Primarily driven by Atlas growing as a percent of the overall business.

    Net Income
    $87 millioncompared to a net income of $59 million in the year ago period
    Q2 FY26

    Non-GAAP net income.

    EPS
    $1.00compared to $0.70 per share in the year ago period
    Q2 FY26

    Based on 87 million diluted shares outstanding.

    Diluted Shares Outstanding
    87 millioncompared to 84 million diluted shares outstanding in the year ago period
    Q2 FY26

    Used for EPS calculation.

    Cash and investments balance
    $2.3 billion
    Q2 FY26 end

    Includes cash, cash equivalents, short-term investments and restricted cash.

    Shares Repurchased
    930,000
    Q2 FY26

    Part of previously announced share repurchase authorization.

    Restructuring Charges
    $5 million
    Q2 FY26

    One-time charges excluded from non-GAAP financials, consistent with focus on efficiency.

    Agibank Active Customers
    2.7 million
    Q2 FY26

    Brazilian neobank that migrated its content management system to Atlas.

    AI Implementations Not Getting Return
    95%
    recent

    Highlighting challenges in AI monetization and adoption.

    Industry KPIs

    6
    MetricValueDetails
    Headcount dsoless than 2%%
    Customer logo metrics59,900customers
    Large customer cohorts2,564customers
    Software recurring arr7%%
    Consumption revenue growth29%%
    Net revenue dollar retention119%%

    Product announcements

    3
    ProductTypeDetails
    MongoDB 8.0launch
    MongoDB 8.1roadmap
    Voyage modelsexpansion

    Deals & partnerships

    1
    Voyage AIAcquisition of an AI company to enhance MongoDB's offerings.

    The acquisition of Voyage AI contributed 300 new customers to MongoDB's customer base in the second quarter.

    Risks & headwinds

    5
    Multiyear License Revenue HeadwindFY26

    $40 million for FY26

    Mitigation: Management noted Q2 outperformance helped reduce the expected headwind from a prior expectation of $50 million.

    Non-Atlas Subscription Revenue DeclineFY26

    mid-single digits decline for FY26

    Mitigation: Management expects non-Atlas ARR to continue to grow year-over-year despite the revenue decline.

    Q3 Operating Margin CompressionQ3 FY26

    lower than Q2

    Mitigation: Primarily due to expected sequential decline in high-margin non-Atlas revenue, timing of R&D hiring, and seasonality of marketing investments.

    Low Return on AI Implementationscurrent

    95% of AI implementations not getting any kind of return

    Mitigation: Management acknowledges the early stage of enterprise AI adoption and the need for customers to gain comfort with technology, focusing on building trust and demonstrating value through their platform's capabilities.

    Tough Q3 Non-Atlas ComparisonQ3 FY26

    low 20% year-over-year percentage decline in the non-Atlas business

    Mitigation: This is due to a strong multiyear outperformance in Q3 FY25, creating a difficult comparable period.

    What to watch in Q3 FY26

    5

    Atlas Consumption Growth

    H2 FY26
    Current29% YoY in Q2 FY26
    Targetmid-20s percentage growth

    Why it matters

    Sustained Atlas growth is key to overall revenue performance and profitability, especially as it becomes a larger percentage of total revenue.

    All in, this implies mid-20s percentage growth for Atlas in the second half of the year.

    Q&A highlights

    6

    What are the key drivers behind the accelerated Atlas growth, especially given the strong sequential dollar adds in a sober cloud spending environment? Also, how is the go-to-market organization performing after recent optimizations?

    Atlas acceleration is driven by higher-quality workloads from moving upmarket, which are growing faster and larger than previous ones, along with increased adoption of capabilities like search and vector search. Robust self-serve customer additions also contributed. The go-to-market strategy remains consistent, focusing direct sales on enterprises and self-serve for SMB, proving effective in both growing wallet share in large accounts and serving the early-stage market.

    “I would say a lot of it was due to the workloads that we acquired over the past year, especially with our move up market that are growing faster and becoming bigger than previous workloads we've seen. So I think the move-up market is really paying off.”

    asked by Sanjit Singh · answered by Dev Ittycheria

    2 min read6 chapters

    Detailed Narrative

    01

    Atlas Performance and AI Adoption

    MongoDB's Atlas platform demonstrated strong performance, with revenue accelerating to 29% year-over-year growth and now comprising 74% of total revenue. This acceleration was attributed to broad-based strength, particularly among larger U.S. customers, and the increasing adoption of Atlas for AI applications. The company noted that while thousands of AI-native startups are choosing Atlas, their contribution to the quarter's growth was not yet material, indicating significant future potential.

    02

    Enterprise Readiness and Diverse Use Cases

    MongoDB highlighted its enterprise-ready capabilities, serving over 70% of the Fortune 500 and numerous large financial, healthcare, and manufacturing companies. Examples included a global automaker using Atlas for connected vehicles and Deutsche Telekom leveraging Atlas for mission-critical workloads like contract management and billing. The platform's ability to handle structured and unstructured data, strong consistency, and scalability for transactional applications were key differentiators.

    03

    Differentiated Architecture and Competitive Landscape

    The company emphasized its architectural advantages, particularly the JSON document model, which is well-suited for complex, evolving data structures. The native integration of search, vector search, and embeddings within MongoDB's platform offers a complete solution, reducing the need for developers to stitch together disparate systems. This approach differentiates MongoDB from alternatives like Postgres, which often face scalability and performance issues with JSONB and require additional tools for search and vector capabilities.

    04

    Go-to-Market Strategy and Customer Acquisition

    MongoDB's refined go-to-market strategy, focusing direct sales on sophisticated enterprise customers and leveraging self-serve for the SMB market, is yielding positive results. The company added 2,800 customers sequentially, bringing the total to 59,900. Efforts to attract SQL developers and educate the startup community on MongoDB's benefits are also contributing to customer acquisition and engagement.

    05

    App Modernization and Long-Term Growth

    The company is making significant investments in application modernization, particularly in tooling that leverages AI to automate the analysis and refactoring of legacy code. While this initiative is expected to drive longer-term growth rather than immediate impact, management expressed strong excitement about the clear value proposition for customers seeking to modernize their legacy systems. Further details on product development in this area are anticipated at the upcoming Investor Day.

    06

    Balancing Growth and Profitability

    MongoDB demonstrated its ability to drive durable revenue growth while expanding profitability, achieving a 15% non-GAAP operating margin. The company attributed this to strong revenue performance and a disciplined approach to investing for growth, with a focus on R&D and developer awareness. Management views margin expansion as a company-wide effort, driven by the strong business model where Atlas growth generates significant gross profit.

    AI-generated summary of the company’s earnings call. Not investment advice.