MDB Earnings Preview: Will the turnaround continue?

MongoDB (MDB) is set to report its Q3 fiscal 2025 earnings on December 9 after the market close, with analysts expecting non-GAAP EPS of $0.69 and revenue of $495.7 million, reflecting a year-over-year revenue growth of 14.5%. This marks a slowdown compared to the 29.8% growth in the same quarter last year. MongoDB’s management has guided revenue within a range of $493 million to $497 million and EPS between $0.65 and $0.68, consistent with consensus estimates. Investors will also be closely watching management’s forward-looking statements regarding fiscal 2025, which currently projects full-year revenue growth of around 14.5%.

Key metrics to monitor include Atlas growth, as it constitutes a significant portion of MongoDB’s overall revenue. While Atlas has faced some consumption challenges earlier in fiscal 2025, analysts will want to see signs of recovery in this core product. Another important metric is MongoDB’s non-GAAP operating income, which is expected to be between $57 million and $60 million, and RPO growth, which signals the strength of its contractual backlog. These figures will provide a clear view of the company’s ability to stabilize consumption trends and drive profitability.

The major themes for MongoDB revolve around its positioning in the database and AI markets. Its flexible document model and robust architecture are increasingly suited to AI workloads, enabling the company to process diverse data efficiently. The launch of its MongoDB AI Applications Program (MAAP) has strengthened its ecosystem by offering pre-built integrations with key players like AWS, Azure, and Google Cloud. However, analysts are closely monitoring the company’s ability to monetize AI-driven workloads, which remain in the early phases of adoption, limiting near-term benefits.

In terms of stock performance, MongoDB shares have risen 38% over the past three months, reflecting a reversal of negative sentiment. This is in stark contrast to the 16% year-to-date decline that lagged behind peers like Datadog and Snowflake. The recent surge has been attributed to favorable commentary from other consumption-based software companies and short-covering activity, which has contributed to the stock’s volatility. Analysts remain optimistic about the potential for a growth rebound in FY26, particularly if the macroeconomic backdrop improves.

Ahead of its earnings, MongoDB’s challenges include macroeconomic headwinds and a competitive database market dominated by traditional architectures. While AI-driven modernization provides significant long-term potential, investors remain cautious about its immediate monetization potential. Analysts expect MongoDB to report solid results in line with broader industry trends but are looking for clear indications of reaccelerating growth, particularly in its Atlas platform, to justify the recent rally and further upside potential in the stock.

MongoDB's (MDB) Q2 earnings report showcased a solid rebound after a challenging Q1, delivering a beat-and-raise performance that reassured investors about the company’s growth trajectory. The company reported adjusted EPS of $0.70, well above the consensus estimate of $0.49, and revenue of $478.1 million, surpassing the $464.14 million expectation. This represented a 13% year-over-year revenue growth. Subscription revenue accounted for $463.8 million, reflecting the continued strength of its core business, while service revenue contributed $14.3 million. Management raised its full-year guidance, with FY2025 revenue now expected to be $1.92-$1.93 billion (vs. $1.9 billion consensus) and adjusted EPS in the range of $2.33-$2.47 (vs. $2.33 consensus).

A key highlight of the quarter was the performance of both the Atlas and Enterprise Advanced (EA) segments. Atlas consumption trends showed modest improvement, with ARR exiting the quarter at a higher base, while EA exceeded expectations due to strong sales execution. Analysts noted that management’s operational adjustments after Q1 missteps, including tweaks to sales incentives, contributed to a recovery in new business. The robust guidance for Q3, including revenue of $493-$497 million and adjusted EPS of $0.65-$0.68, further underscores management's confidence in sustained growth, despite macroeconomic challenges.

Analysts reacted positively, emphasizing that the Q1 weakness was an anomaly rather than a systemic issue. Citi raised its price target to $400, highlighting that improved ARR/consumption trends and a stronger EA pipeline suggest reacceleration in the second half of the fiscal year. Similarly, Stifel and Truist both increased their price targets, praising MongoDB’s ability to stabilize consumption patterns and capitalize on emerging growth drivers like Vector Search, Stream Processing, and AI workloads. Many analysts also underscored MongoDB’s positioning as a leading NoSQL vendor, benefiting from secular tailwinds in database modernization and AI-driven applications.

The company’s ability to turn the corner on Q1’s challenges and deliver operational improvements was a recurring theme among analysts. Management acknowledged that while macroeconomic conditions remain challenging, adjustments to sales execution and encouraging feedback from the field suggest improving momentum. MongoDB’s exposure to generative AI and new workload adoption further positions it as a beneficiary of the growing demand for database modernization. However, management maintained a cautious approach to Atlas growth targets, reflecting tough year-over-year comparisons in the second half of FY25.

In summary, MongoDB’s Q2 results marked a significant rebound, with strong execution in both Atlas and EA driving better-than-expected results and an optimistic outlook. Analysts largely viewed the quarter as a turning point, with raised guidance and operational improvements signaling durable growth prospects. The company’s strategic focus on generative AI and its broadening product suite, coupled with improved sales execution, positions MongoDB well for sustained growth in a competitive database market. Shares surged 16% following the results, reflecting renewed investor confidence in MongoDB's growth trajectory.