MongoDB’s stock experienced a dramatic decline of 26.9%, marking its most significant drop to date, after the company issued disappointing guidance that overshadowed otherwise strong quarterly earnings. The database software firm indicated that it anticipates a slowdown in growth, particularly affecting its Atlas cloud-based database service.
Weak Guidance Provokes Stock Plunge
For the fiscal year 2026, MongoDB projected adjusted earnings to be between $2.44 and $2.62 per share, with revenues expected to range from $2.24 billion to $2.28 billion. This outlook fell short of analysts’ predictions, which had forecast earnings per share (EPS) of $3.34 and revenues amounting to $2.32 billion.
The company attributes its disappointing projections to the deceleration in the Atlas service’s growth, which is crucial to its business model. The expected revenue growth of only 12.7% represents the slowest pace since its stock market debut in 2017.
Company Response and Future Prospects
Tim Donovan, the company’s finance chief, remarked on the earnings call that MongoDB is encountering slower-than-anticipated adoption rates for new applications leveraging its Atlas platform. Nonetheless, the company is actively expanding its workforce and pursuing contracts with larger clients to stimulate growth.
For the upcoming fiscal first quarter, MongoDB anticipates adjusted earnings between 63 and 67 cents per share on revenues of $524 million to $529 million. Analysts surveyed by LSEG estimated EPS to be 62 cents with revenues projected at $526.8 million.
Reflecting on the weak outlook, Wells Fargo analyst Andrew Nowinski downgraded the stock to equal weight and adjusted his price target downward. He commented that the reduced availability of multi-year contracts could hinder MongoDB’s ability to significantly exceed expectations in FY26, leading to a range-bound share price.
Mixed Financial Performance
Despite the concerning outlook, MongoDB reported better-than-expected earnings for the fiscal fourth quarter, with adjusted earnings reaching $1.28 per share, excluding certain items, on revenues of $548 million. Comparatively, analysts had predicted EPS of 66 cents and revenue of $520 million, indicating a 20% increase in sales year-on-year.
The company added 1,900 new customers during the quarter, bringing the total number of clients to 54,500.
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