MDB
Earnings call · Oct 2025 (Q3 FY26)

MongoDB Q3 FY26 earnings call MDB

Dec 1, 2025 Source

Executive summary

MongoDB Q3 FY26 — Strong Atlas Growth and Profitability Expansion

MongoDB delivered a strong quarter, driven by accelerating Atlas growth and robust customer additions, leading to significant operating margin expansion. The company is strategically positioned as a modern data platform for the AI era, leveraging its document model and integrated AI capabilities. Management is focused on deepening customer relationships, advancing innovation, and scaling go-to-market efforts while maintaining a commitment to long-term financial targets.

Highlights

5

  • Total revenue of $628.3 million, up 19% year-over-year and above guidance.

  • Atlas revenue growth accelerated to 30% year-over-year, now representing 75% of total revenue.

  • Non-GAAP operating income reached $123.1 million, resulting in a 20% operating margin, outperforming expectations.

  • Total customer count exceeded 62,500, with 2,600 additions in the quarter and 8,000 year-to-date.

  • Free cash flow significantly increased to $140 million, up from $35 million in the prior year period.

Concerns

2

  • Gross profit margin declined to 74% from 77% in the prior year, primarily due to Atlas growing as a percentage of overall business.

  • Planned strategic investments in engineering, marketing, and sales capacity have been delayed, shifting into Q4 FY26 and FY27.

Guidance & targets

CategoryTargetConfidence
Revenue
$665 million to $670 million
high materiality
High
Non-GAAP income from operations
$139 million to $143 million
medium materiality
High
Non-GAAP net income per share
$1.44 to $1.48
high materiality
High
Atlas revenue growth
approximately 27% year-over-year
high materiality
High
Non-Atlas business growth
upper single-digit percent range year-over-year
medium materiality
High
Revenue
$2.434 billion to $2.439 billion
high materiality
High
Non-GAAP income from operations
$436.4 million to $440.4 million
high materiality
High
Non-GAAP net income per share
$4.76 and to $4.80
high materiality
High
Free cash flow conversion
exceed 100%
medium materiality
High
Operating margin expansion
100 to 200 basis points of margin expansion on average
high materiality
Medium
Free cash flow conversion
80% to 100%
high materiality
Medium
Non-Atlas multiyear transactions impact on revenue
not expect... either a meaningful headwind or tailwind
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Atlas
Outperformed expectations, with growth accelerating for the third consecutive quarter. Driven by continued strength with largest customers in the U.S. and broad-based strength in EMEA, reflecting new and existing workload growth.
% of Total Revenue: 75%YoY Growth Q2 FY26: 29%YoY Growth Q1 FY26: 26%
—30%——
Non-Atlas
Came in ahead of expectations, reflecting success in expanding within existing customer base and desire of largest customers to build with MongoDB long term. Benefited from higher-than-expected multiyear revenue, accounting for approximately 2/3 of outperformance.
ARR Growth YoY: 8%
————

Operational metrics

Non-GAAP operating income
$123.1 million
Q3 FY26

Exceeded expectations.

Non-GAAP operating margin
20% up from 19% in Q3 FY25
Q3 FY26

Benefited from revenue outperformance and lower-than-expected operating expenses.

Gross margin
74% down from 77% in Q3 FY25
Q3 FY26

Atlas gross margins are slightly below total company gross margins but continue to improve year-over-year.

Non-GAAP net income
$115 million up from $98 million in Q3 FY25
Q3 FY26
Non-GAAP EPS
$1.32 up from $1.16 in Q3 FY25
Q3 FY26
Cash and investments balance
$2.3 billion
Q3 FY26

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

Share buyback amount executed
$145 million
Q3 FY26

Executed under previously announced $1 billion total share repurchase authorization.

Shares repurchased
514,000
Q3 FY26

Executed under previously announced $1 billion total share repurchase authorization.

Atlas revenue % of total
75% up from 68% in Q3 FY25 and 74% in Q2 FY26
Q3 FY26

Outperformed expectations.

Atlas revenue growth
30% accelerated from 29% in Q2 FY26 and 26% in Q1 FY26
Q3 FY26

Driven by continued strength with largest customers in the U.S. and broad-based strength in EMEA, from new and existing workloads.

Non-Atlas ARR growth
8% year-over-year
Q3 FY26

Reflects underlying revenue growth without impact of changes in duration. Benefited from higher-than-expected multiyear revenue.

Total customer count
62,500+ up from 52,600+ in Q3 FY25
Q3 FY26

Driven by strong performance of self-serve motion.

Atlas customer count
60,800+ up from 51,100+ in Q3 FY25
Q3 FY26

Primary driver of total customer count growth.

Customers with $100K+ ARR
2,694 up 16% year-over-year
Q3 FY26
Net ARR expansion rate
120% up from 119% in Q2 FY26
Q3 FY26

Reflects growing strategic importance to customers and ability to win critical workloads.

Diluted shares outstanding
86.9 million up from 84.2 million in Q3 FY25
Q3 FY26

Used for non-GAAP EPS calculation.

Non-GAAP tax provision
20%
Q4 FY26 and FY26 guidance

Assumption for non-GAAP net income per share guidance.

Industry KPIs

MetricValueDetails
Customer logo metrics62,500+ customers
Large customer cohorts2,694 customers
Software recurring arr8% %
Consumption revenue growthrelatively consistent
Sales capacity productivitystrategic investments
Net revenue dollar retention120% %
Ai agentic channel product adoptionMercor uses MongoDB Atlas

Product announcements

ProductTypeDetails
MongoDB .locallaunch

Deals & partnerships

Voyage AI Acquisition of an AI team and technology to enhance embeddings and vector search capabilities.

Acquisition of Voyage AI in February, bringing an 'unbelievable team' in Palo Alto and enhancing MongoDB's AI capabilities, particularly in embeddings and reranking models.

Risks & headwinds

Gross margin compression Q3 FY26

74% in Q3 FY26, down from 77% in Q3 FY25

Mitigation:Atlas gross margins continue to improve year-over-year, despite its increasing proportion of total revenue.

Seasonal holiday variability in consumption patterns Q4 FY26

Can be somewhat unpredictable

Mitigation:Prudent forecasting for Q4 Atlas revenue growth guidance (approx. 27% YoY).

Delayed strategic investments Shifted into Q4 FY26 and FY27

Some planned investments have taken longer to implement than expected

Mitigation:Benefited operating margin during FY26, but will lead to continued OpEx growth in FY27 as investments are made.

What to watch in Q4 FY26

Atlas Revenue Growth

Q4 FY26
Current 30% YoY in Q3 FY26
Target Around 27% YoY in Q4 FY26

Why it matters

Atlas is the primary growth driver and represents 75% of total revenue; its sustained acceleration or deceleration is key to overall company performance.

As a result, we now expect Atlas to see approximately 27% revenue growth in the fourth quarter of fiscal '26, which is higher than our previous expectations of growth in the mid-20% range. This outlook reflects our continued confidence in Atlas while taking into account the historical seasonal variability and consumption patterns during the holiday period.

Q&A highlights

What are CJ Desai's initial priorities and long-term changes to position MongoDB as a foundational data platform for the AI era, including any quick wins?

CJ Desai emphasized MongoDB's suitability as a foundational platform for AI workloads due to its handling of real-time operational data and context. He noted that while enterprise AI agents are still in pilot, AI-native companies are already scaling on MongoDB. Quick wins include starting with Voyage embeddings and vector database, then moving to the operational store.

“MongoDB has all the elements needed to be the right foundational platform for AI workloads.”

asked by Sanjit Singh · answered by Chirantan Desai

2 min read 6 chapters

Detailed narrative

CEO Vision and AI Opportunity

New CEO CJ Desai emphasized MongoDB's position at an inflection point across cloud, data, and AI, aiming to make it the generational modern data platform. He highlighted the structural advantage of MongoDB's document model, integrated search, vector search, and Voyage embeddings for AI workloads, noting its industry-leading results on benchmarks like Hugging Face. The company is uniquely positioned to help define the AI wave.

Core Business Strength and Modernization

The core business shows strong performance across self-serve and enterprise customers, driven by ongoing modernization efforts. Customers are moving mission-critical workloads to Atlas, with a global insurance provider standardizing on Atlas for policy administration and analytics, accelerating product rollouts and improving scalability. This momentum is occurring even before significant AI tailwinds.

AI Adoption and Use Cases

While early, AI adoption is encouraging, with AI-native startups like Mercor building intelligent applications on Atlas, leveraging Voyage embeddings and Vector Search for rapid scaling and 50% month-over-month growth. Large enterprises, such as a global media company, are also re-architecting on Atlas for enhanced content recommendation, achieving 90% latency reduction and 65% operational spend reduction, driving a 35% increase in click-through rates.

Go-to-Market and Customer Expansion

MongoDB serves over 70% of the Fortune 100, indicating significant expansion opportunity within existing accounts. The company continues to add new customers, with 2,600 added in Q3 and 8,000 year-to-date, reflecting strong self-serve motion and broad-based demand in the U.S. and EMEA. The total customer count now exceeds 62,500.

Financial Discipline and Investment Strategy

The company demonstrated strong operating margin expansion and free cash flow performance in FY26, exceeding expectations. Management plans continued strategic investments in engineering, marketing, and direct sales capacity in Q4 FY26 and FY27 to drive future growth, while reiterating commitment to long-term margin expansion (100-200 bps) and FCF conversion (80-100%) targets.

Developer Engagement and West Coast Focus

To counter the Postgres narrative and boost developer engagement, particularly on the West Coast, MongoDB is relaunching its ".local" event in San Francisco in January. This initiative aims to showcase MongoDB's value proposition to AI-native and digital-native companies, leveraging the CEO's network in the venture and tech communities to plant seeds for future business.

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