MongoDB (NASDAQ: MDB) shares fell 13.44 percent to $375.85 in extended trading on Tuesday, despite the database technology company beating second-quarter fiscal 2027 earnings estimates and raising its full-year outlook. The decline continued into Wednesday premarket trading, with shares down 13.41 percent at $376.00, as investors focused on slowing third-quarter growth guidance and another quarter of flat Atlas growth.

The company reported adjusted earnings per share of $1.90, surpassing analyst estimates of $1.61 by 18.01 percent. Quarterly revenue reached $771.77 million, exceeding the consensus estimate of $732.91 million and growing 30.50 percent year-over-year from $591.40 million.

Financial Performance

MongoDB’s top-line growth accelerated significantly. Subscription revenue, a key metric for the company’s recurring income model, rose 31 percent year-over-year to $747.1 million. Services revenue also expanded by 29 percent to $24.6 million.

Earnings per share surged 90 percent compared to $1.00 per share recorded in the corresponding period last year. The company delivered results that surpassed market expectations on both revenue and earnings fronts.

What the Numbers Show

The divergence between revenue growth and earnings growth highlights significant operational leverage. While revenue expanded by 30.50 percent, adjusted EPS nearly doubled with a 90 percent increase. This indicates that cost structures or operating expenses grew at a slower pace than top-line sales, allowing a larger proportion of incremental revenue to flow through to the bottom line. CEO CJ Desai attributed this performance to the "mission-critical role" of the platform, citing strength in core enterprise workloads and early momentum with AI use cases.

However, the market reaction suggests investors are prioritizing growth sustainability over current profitability. MongoDB expects third-quarter revenue growth of about 20.5 percent at the midpoint, down sharply from 30 percent in the second quarter. Although Atlas revenue grew 29 percent for the fifth straight quarter, topping the company’s forecast, the lack of acceleration disappointed investors seeking stronger cloud growth after the stock’s recent rally.

Analyst Reactions

Following the earnings announcement, several analysts revised their forecasts for MongoDB:

• Stifel analyst Brad Reback maintained a Buy rating but lowered the price target from $475 to $465.
• Rosenblatt analyst Blair Abernethy maintained a Buy rating and raised the price target from $395 to $445.
• Cantor Fitzgerald analyst Thomas Blakey reiterated an Overweight rating with a maintained $540 price target.
• Needham analyst Mike Cikos reiterated a Buy rating with a maintained $430 price target.
• RBC Capital Markets analyst Rishi Jaluria maintained an Outperform rating but reduced the price target from $515 to $465.
• DA Davidson analyst Rudy Kessinger maintained a Buy rating and a price target of $465.

RBC Capital Markets noted that the launch of search and vector search on Enterprise Advanced saw immediate demand as customers bring AI capabilities into a self-managed environment. Rosenblatt highlighted that Atlas now contributes around 73 percent of the company’s total revenue, driven by strong core customer cloud-based consumption. DA Davidson observed that while Atlas growth decelerated slightly to 28.9 percent year-over-year from 29.4 percent in the previous quarter, it remained at the high end of management’s indicated upside range.

Customer Growth and AI Adoption

The company added a record 2,900 net new customers, bringing the total customer count to 70,600, up from 59,900 in the year-ago period. Growth was driven primarily by Atlas, which ended the quarter with 69,300 customers compared to 58,500 in the prior year quarter.

Management highlighted strong adoption of AI-related services, including Atlas Vector Search and Voyage embeddings. Voyage customer count nearly doubled quarter-over-quarter for the second consecutive quarter. CEO CJ Desai noted that many new Voyage customers are net new to MongoDB, often AI-native companies leveraging the platform for scale and performance. The company also launched a managed Model Context Protocol (MCP) server to support AI applications, enabling developers using tools like Claude and Cursor to connect directly to MongoDB.

Product Segment Details

Atlas revenue grew approximately 29 percent year-over-year for the fifth straight quarter, adding a record $127 million in net new dollars. The growth was driven by large enterprise customers, particularly those in the $100,000+ annual recurring revenue (ARR) cohort. Nearly 3,000 customers now generate at least $100,000 in ARR, an increase of 17 percent from a year earlier. Total company net ARR expansion rate increased to 122 percent for the quarter, up from 119 percent a year ago.

Enterprise Advanced (EA) and Other revenue grew 36 percent year-over-year, marking the strongest quarter in three years for this segment. This acceleration was attributed to widespread strength across financial services, public sector, and technology industries, as well as early demand for Search and Vector Search capabilities launched on EA in Q2. EA and Other ARR grew approximately 11 percent year-over-year, marking the third consecutive quarter of double-digit growth.

Profitability and Cash Flow

Non-GAAP operating margin expanded to 24 percent from 15 percent in the year-ago period, driven by strong revenue performance. Adjusted operating income more than doubled to $186 million. Non-GAAP gross margin was 75.9 percent, up approximately 210 basis points year-over-year. Subscription gross margin was 78.3 percent, up approximately 70 basis points year-over-year.

Operating cash flow was $142 million, compared to $72 million in the year-ago period. Free cash flow reached $138 million, up from $70 million a year ago. Remaining performance obligations jumped 91 percent to $1.52 billion, with the current portion increasing 73 percent. The company ended the quarter with $2.4 billion in cash, cash equivalents, and short-term investments. During the quarter, MongoDB allocated $100 million towards share repurchases and $59 million to settle taxes on employee RSUs.

Looking Ahead

MongoDB raised its fiscal 2027 adjusted EPS guidance to between $6.39 and $6.58, versus the analyst estimate of $6.11. The company also increased its revenue outlook to a range of $2.99 billion to $3.03 billion, representing full-year growth of 21 percent to 23 percent. This is an increase from the previous estimate of $2.95 billion. The company expects fiscal 2027 Atlas growth of about 27 percent and Enterprise Advanced and other revenue growth of about 11 percent.

For the third quarter, the company expects total revenue of $756 million to $761 million, representing 20 percent to 21 percent year-over-year growth. Non-GAAP income from operations is expected to be $152 million to $156 million, for an operating margin of approximately 20.5 percent. At the high end of guidance, non-GAAP net income per share is expected to be $1.57 to $1.61, beating the analyst estimate of $1.53.

Despite the strong financial print and improved guidance, investor sentiment turned negative in after-hours trading, resulting in a sharp decline in share price.

MongoDB (NASDAQ: MDB) has issued third-quarter guidance that exceeds analyst expectations for adjusted earnings per share, revenue, and GAAP earnings per share. The database software company projects top-line growth alongside improved profitability metrics for the period.

The company forecasts adjusted EPS in the range of $1.57 to $1.61, surpassing the consensus estimate of $1.53. This indicates a potential upside of up to 4.6% against the midpoint of analyst projections.

Additionally, MongoDB expects Q3 GAAP EPS to fall between $0.00 and $0.05, beating the analyst estimate of $(0.01).

Financial Outlook

MongoDB expects total sales to fall between $756.000 million and $761.000 million. This range represents a beat against the estimated $745.090 million from analysts.

What the Numbers Show

The simultaneous beat on both revenue and adjusted EPS suggests operational leverage is intact. With the lower end of the revenue guidance ($756.000 million) already exceeding the estimate ($745.090 million), the company demonstrates confidence in maintaining profit margins while growing its top line. The positive outlook for GAAP EPS further reinforces this strength, indicating that core profitability is also improving beyond non-GAAP adjustments.