MongoDB Inc (NASDAQ:MDB) reported a 20% year-over-year revenue increase, surpassing the high end of their guidance.
Atlas revenue grew 24% year over year, now representing 71% of total revenue.
The company achieved a non-GAAP operating income of $112.5 million, resulting in a 21% non-GAAP operating margin.
MongoDB Inc (NASDAQ:MDB) ended the quarter with over 54,500 customers, indicating strong customer growth.
The company is optimistic about the long-term opportunity in AI, particularly with the acquisition of Voyage AI to enhance AI application trustworthiness.
Negative Points
Non-Atlas business is expected to be a headwind in fiscal '26 due to fewer multi-year deals and a shift of workloads to Atlas.
Operating margin guidance for fiscal '26 is lower at 10%, down from 15% in fiscal '25, due to reduced multi-year license revenue and increased R&D investments.
The company anticipates a high-single-digit decline in non-Atlas subscription revenue for the year.
MongoDB Inc (NASDAQ:MDB) expects only modest incremental revenue growth from AI in fiscal '26 as enterprises are still developing AI skills.
The company faces challenges in modernizing legacy applications, which is a complex and resource-intensive process.
Q & A Highlights
Q: Can you explain the impact of the multi-year deals on your fiscal year '26 guidance? Is it just a mechanical issue or a change in customer behavior? A: Serge Tanjga, Interim CFO, explained that the fiscal year '24 had exceptionally strong multi-year performance, which led to a lower renewal base for fiscal year '26. This is not a change in trends but rather a result of having fewer opportunities for multi-year deals due to the strong performance in previous years.
Q: How will the Voyage AI acquisition be integrated into MongoDB's offerings, and will it be available to non-MongoDB customers? A: Dev Ittycheria, CEO, stated that Voyage AI will continue to offer its models to third parties, which will help bring new users into the MongoDB ecosystem. The integration will enhance MongoDB's platform by providing auto embeddings and other features, making it available to all customers, including those not currently using MongoDB.
Q: What drove the decision to acquire Voyage AI, and how does it fit into your portfolio? A: Dev Ittycheria explained that the acquisition addresses the risk of hallucinations in AI applications by providing embedding and re-ranking models. These models improve the quality and trustworthiness of AI applications, which is crucial for mission-critical use cases in regulated industries.
Q: Can you elaborate on the operating expense guidance and the reasons for increased investments? A: Serge Tanjga noted that the company is reallocating and reinvesting resources to capitalize on the AI opportunity. The decision to invest more aggressively is driven by the potential long-term benefits and the desire to maximize MongoDB's competitive position in the evolving AI landscape.
Q: How are Atlas consumption trends shaping up, and what factors are influencing these trends? A: Serge Tanjga highlighted that Q4 consumption was slower due to seasonal factors, but the company expects stable consumption growth in fiscal year '26. This stability is supported by a strong fiscal year '25 workload cohort and improved sales productivity, which should offset the growing base effect.
Q: What is the expected impact of AI workloads on MongoDB's business, and when do you anticipate seeing significant growth from these workloads? A: Dev Ittycheria mentioned that while AI workloads are still in the early stages, MongoDB is well-positioned to support them due to its flexible data model and integrated AI capabilities. The company expects gradual adoption as customers develop AI skills and address trust issues, with significant growth anticipated in the future.
Q: How is MongoDB's move upmarket progressing, and what impact does it have on your financial guidance? A: Dev Ittycheria reported positive progress in moving upmarket, with increased sales productivity and a growing number of million-dollar customers. The company has reallocated resources to focus on strategic accounts, which is reflected in the guidance and expected to drive further growth.
Q: How does MongoDB's competitive position compare to Postgres and the hyperscalers, and what differentiates your offerings? A: Dev Ittycheria emphasized that MongoDB offers a more comprehensive solution than Postgres by integrating multiple functionalities like search and vector databases. The company maintains strong relationships with hyperscalers and believes its architectural advantages will drive future growth in the AI era.
