What Happened?
Shares of database software company MongoDB (MDB) fell 24.6% in the afternoon session after the company reported weak fourth quarter (fiscal 2025) results: its full-year revenue and EPS guidance fell short of Wall Street's estimates. The company's guidance suggests a slowdown in non-Atlas revenue.
On the other hand, MongoDB blew past analysts' billings, revenue, EPS, and adjusted operating income expectations. Sales grew 20% year on year, fueled by a 24% rise in Atlas revenue, which now contributes 71% of total sales. Zooming out, we think this was a decent quarter featuring some areas of strength but also some blemishes. The market seemed to focus on the negatives.
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What The Market Is Telling Us
MongoDB’s shares are very volatile and have had 21 moves greater than 5% over the last year. But moves this big are rare even for MongoDB and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 17.9% on the news that the company reported a "beat and raise" quarter. Second quarter results blew past analysts' billing expectations. The top-line benefited from the strong performance of its Atlas cloud offering, which recorded 27% y/y sales growth while driving 71% of overall revenue. Next quarter's revenue guidance also came in higher than Wall Street's estimates. While AI isn't yet a significant revenue driver for the business, MDB launched the MongoDB AI Applications Program (MAAP), to accelerate demand for its AI solutions. That the company raised full year guidance across the board was icing on the cake. However, the quarter wasn't without challenges, as the business observed light deceleration in the consumption of existing workloads due to macro headwinds. Overall, this was a great quarter.
MongoDB is down 18.2% since the beginning of the year, and at $200.02 per share, it is trading 51.5% below its 52-week high of $412.01 from March 2024. Investors who bought $1,000 worth of MongoDB’s shares 5 years ago would now be looking at an investment worth $1,333.
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