Database software company MongoDB (MDB) fell short of the market’s revenue expectations in Q1 CY2025, but sales rose 21.9% year on year to $549 million. Its non-GAAP EPS of $1 per share was 52% above analysts’ consensus estimates.
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MongoDB (MDB) Q1 CY2025 Highlights:
- Revenue: $549 million (21.9% year-on-year growth)
- Adjusted EPS: $1 vs analyst estimates of $0.66 (52% beat)
- Adjusted Operating Income: $87.43 million vs analyst estimates of $56.36 million (15.9% margin, 55.1% beat)
- Revenue Guidance for Q2 CY2025 is $550.5 million at the midpoint, roughly in line with what analysts were expecting
- Management raised its full-year Adjusted EPS guidance to $3.03 at the midpoint, a 19.8% increase
- Operating Margin: -9.8%, up from -21.8% in the same quarter last year
- Customers: 57,100, up from 54,500 in the previous quarter
- Annual Recurring Revenue: $1.61 billion at quarter end, up 25.1% year on year
- Billings: $509.3 million at quarter end, up 23.2% year on year
- Market Capitalization: $16.32 billion
StockStory’s Take
MongoDB’s first quarter results were shaped by ongoing adoption of its Atlas cloud database, continued expansion into larger enterprise accounts, and increased self-serve customer acquisition. CEO Dev Ittycheria emphasized that the company’s architectural approach—with a document model designed for complex, evolving data—remains central to its appeal for both new application development and legacy modernization. Management pointed out particularly strong net new customer additions, highlighting traction in industries focused on cloud-native and AI-powered applications. The quarter also benefited from higher operational efficiency, with non-GAAP margins improving due to disciplined expense management and a slower pace of headcount additions.
Looking forward, MongoDB’s updated guidance is anchored in expectations for sustained Atlas cloud growth, ongoing investments in AI-related features, and targeted expansion within the enterprise segment. CFO Mike Gordon noted the company’s intent to balance continued innovation with operational discipline, stating, “We are focused on running an efficient, scalable business that supports growth in revenue and profitability.” Management remains attentive to macroeconomic uncertainty and the timing of multi-year license renewals, which are expected to weigh on non-Atlas revenue in the second half of the year. The company’s strategic priorities include advancing its AI platform capabilities, further automating application modernization, and executing a $1 billion share repurchase program to support shareholder value.
Key Insights from Management’s Remarks
Management attributed first quarter performance to increased demand for Atlas, accelerating self-serve customer growth, and early returns from investments in AI and modernization tooling.
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Atlas cloud adoption: Growth in Atlas, MongoDB’s fully managed cloud database, was driven by broad customer demand for real-time, cloud-native, and AI-enabled applications. Management cited rapid uptake from both new and existing customers, with Atlas now representing the majority of revenue.
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Self-serve momentum: The self-serve channel posted its highest customer additions in over six years, indicating MongoDB’s growing appeal among developers and small businesses. This channel is seen as a long-term engine for growth, especially as many accounts start small but have potential for expansion.
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Enterprise and upmarket focus: The company’s initiative to shift go-to-market resources from mid-market to enterprise accounts resulted in larger deal sizes and higher sales productivity. Management noted increased engagement with Fortune 500 companies and highlighted several large customer wins this quarter.
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AI and Voyage acquisition: MongoDB’s recent acquisition of Voyage AI was highlighted as a strategic move to strengthen the company’s position in AI application development. Embedding and search enhancements from Voyage are expected to improve the performance and cost-efficiency of AI workloads on MongoDB’s platform.
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Operational efficiency: Improved non-GAAP operating margins were attributed to both outperformance in revenue and slower-than-planned headcount additions. Management emphasized ongoing scrutiny of spending and plans to reallocate resources toward higher-return initiatives.
Drivers of Future Performance
MongoDB expects future performance to be shaped by ongoing cloud adoption, AI feature enhancements, and a disciplined investment approach.
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Atlas momentum and expansion: Management projects continued growth in Atlas, supported by demand for scalable, cloud-based data solutions in both traditional and AI-powered applications. The company is investing in new features to meet evolving enterprise requirements.
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AI platform integration: The integration of Voyage AI’s embedding and search models is expected to enhance MongoDB’s value proposition for customers building custom AI solutions. Management sees AI as a long-term driver, though enterprise adoption remains early and subject to talent and trust barriers.
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Macroeconomic and license renewal risks: Management cautioned that macroeconomic volatility and the timing of multi-year license renewals could create headwinds for non-Atlas revenue in upcoming quarters. The company is maintaining a balanced approach to spending while monitoring these external factors.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch (1) the pace of Atlas customer additions and expansion within larger enterprise accounts, (2) evidence that AI and app modernization features are driving customer adoption and incremental workloads, and (3) the impact of macroeconomic conditions and multi-year license renewals on non-Atlas revenue. Progress on integrating Voyage AI capabilities and execution of the expanded share repurchase program will also be important markers.
MongoDB currently trades at a forward price-to-sales ratio of 6.9×. In the wake of earnings, is it a buy or sell? Find out in our full research report (it’s free).
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