MongoDB finally turns a profit but its shares plunge on weak guidance

MongoDB Inc. finally delivered a quarterly profit as it posted its fiscal 2025 fourth-quarter results, crushing the Street’s targets on earnings and revenue.

However, its outlook for the new fiscal year was a big disappointment, sending investors running for the hills as the value of its stock plummeted in late trading.

The company reported earnings before certain costs such as stock compensation of $1.28 per share on revenue of $548.4 million, up 20% from the same period one year ago. They were impressive numbers that far surpassed expectations, with analysts targeting earnings of just 60 cents per share on sales of $521 million.

Subscription revenue jumped 19% in the quarter, while services revenue expanded by 34%, and the company continued to add new customers at an impressive rate, ending the quarter with more than 54,500.

All told, the company delivered net income of $15.8 million – not a massive profit, but better than the $55.5 million net loss it posted one year earlier.

But as solid as those numbers were, the company let itself down with its guidance for the new year. MongoDB said it’s looking for earnings of between $2.44 and $2.62 per share, well below the Street’s target of $3.38. In terms of revenue, the company is guiding for a range of $2.24 billion to $2.28 billion, trailing the Street’s $2.33 billion consensus.

MongoDB’s stock had risen more than 3% earlier in the day, prior to the report, only for investors to bail on the lower outlook. After-hours, the stock plunged more than 16%.

The company is the creator of the document-oriented MongoDB database, which is used to power data-intensive applications. Its flagship product is the cloud-hosted MongoDB Atlas, which accounts for the bulk of its revenue, though it also sells on-premises and mobile versions. All three are popular with developers thanks to their support for multiple data formats and ease of use.

MongoDB President and Chief Executive Dev Ittycheria (pictured) said consumption of Atlas was much higher than expected during the quarter, driving significant margin expansion.

“We continue to see good performance in new workload wins due to the flexibility, scalability and performance of the MongoDB platform,” he added. “In fiscal year 2026 we expect to see stable consumption growth in Atlas, our main growth driver.

MongoDB recently made a key acquisition, buying a startup called Voyage AI Inc. that develops artificial intelligence models for generating embeddings, which are mathematical structures that can store key details about unstructured data. Those embeddings describe how a data record relates to the other records in a database, making it searchable and, thus, more accessible to generative AI models.

Besides its embedding generators, Voyage AI also offers “rerankers,” which are AI models that reorganize search results to display the most relevant items first. When an AI application retrieves a collection of data points to answer a prompt, it uses a reranker to identify the most relevant data points.

The company aims to incorporate these capabilities into its own database to enhance its vector search capabilities and make it more suitable for AI applications, and it has high hopes that doing so will boost the appeal of its platform.

“Following the Voyage AI acquisition, we combine real-time data, sophisticated embedding and retrieval models and semantic search directly in the database, simplifying the development of trustworthy AI-powered apps,” Ittycheria said of the acquisition.

Holger Mueller of Constellation Research Inc. saw a lot of positives for MongoDB, saying it delivered a great quarter thanks to the surging demand from developers for the cloud-hosted Atlas database.

“The company broke the $500 million quarterly revenue barrier for the first time, which means its revenue run rate is now above $2 billion,” the analyst said. “That helped MongoDB swing to a profit of around 20 cents per share. Profit is key for investors, and although the company only delivered a small one this time, it is a good start. Now all eyes are on execution in the new quarter and full year, to see if it can grow those profits.”

For the current quarter, at least, MongoDB’s guidance isn’t so bad. The company said it’s looking for earnings of between 63 and 67 cents on revenue of $524 million to $529 million. Wall Street is guiding for earnings of 62 cents on sales of $527 million.

Despite the after-hours drop, MongoDB’s stock is still up more than 13% in the year to date.

Photo: SiliconANGLE