MongoDB outlines 27% Atlas Q4 growth target while raising full-year guidance amid accelerating AI-driven demand
Dec. 01, 2025 8:14 PM ET
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Earnings Call Insights: MongoDB (MDB) Q3 2026
Management View- President and CEO Chirantan Desai opened his first earnings call as CEO by emphasizing a "true inflection point driven by major shifts across cloud, data and AI," noting MongoDB's potential to become "the generational modern data platform of this evolving era." Desai highlighted Atlas' 30% year-over-year growth and total revenue of $628.3 million, attributing the results to "strength in Atlas" and a "65% growth in customer additions on a year-to-date basis driven by the strong performance of our self-serve motion."
- Desai explained, "Existing customers are expanding with us and net new customer additions continue to show strength. Companies in nearly every industry and across every geography are choosing MongoDB because we deliver the features, performance, cost effectiveness, and AI readiness they need in a single data platform."
- CFO Michael Berry stated, "In the third quarter, total revenue was $628.3 million, up 19% year-over-year and above the high end of our guidance. Shifting to our product mix. Atlas revenue outperformed our expectations as year-over-year growth accelerated to 30% in the third quarter and now represents 75% of total revenue."
Outlook- Management raised guidance for Q4 2026, expecting revenue of $665 million to $670 million, translating to 21% to 22% year-over-year growth. Non-GAAP income from operations is guided at $139 million to $143 million, with a non-GAAP net income per share of $1.44 to $1.48 and operating margin of approximately 21%.
- For the full fiscal year 2026, revenue is now expected in the range of $2.434 billion to $2.439 billion, with a non-GAAP operating income range of $436.4 million to $440.4 million and non-GAAP net income per share between $4.76 and $4.80.
- Berry noted, "We now expect Atlas to see approximately 27% revenue growth in the fourth quarter of fiscal '26, which is higher than our previous expectations of growth in the mid-20% range."
Financial Results- Atlas revenue grew to represent 75% of total revenue, an increase from 74% in the prior quarter and 68% in the year-ago period. Gross profit for the third quarter was $466 million with a gross margin of 74%. Operating cash flow reached $144 million, and free cash flow was $140 million, which Berry described as "well above our expectations."
- Net income for the quarter was $115 million, or $1.32 per share, based on 86.9 million diluted shares. The company ended the quarter with $2.3 billion in cash and equivalents, and repurchased approximately 514,000 shares for $145 million.
- The total customer count rose to over 62,500, with Atlas customers exceeding 60,800. Customers with at least $100,000 in ARR grew to 2,694, up 16% over the previous year.
Q&A- Sanjit Singh, Morgan Stanley: Asked about prioritizing early wins and longer-term changes for AI, Desai responded, "What I see is, as truly scaled agentic platforms where you can have enterprises creating agents that transform their business, MongoDB has a very important role to play."
- Matthew Martino, Goldman Sachs: Inquired about repeated customer themes, Desai identified three focus areas: cloud modernization, experimentation with AI workloads, and AI-native companies outgrowing relational databases.
- Brad Reback, Stifel: Questioned customer ramp rates on Atlas, with Desai citing the engineering team's improvements: "All the subsequent point releases...allow Atlas to be adopted faster and remove the friction."
- Aleksandr Zukin, Wolfe Research: Probed on the biggest impact areas for growth, Desai indicated focus on "Fortune 500...penetrate even at a higher rate" and AI-native companies in Silicon Valley.
Sentiment Analysis- Analysts pressed for detail on AI-driven demand, Atlas growth visibility, and margin expansion, with a generally positive tone but probing for sustainability and reinvestment plans.
- Management exhibited confidence in both prepared remarks and Q&A, repeatedly emphasizing durable growth, platform differentiation, and expansion opportunities: "We are raising our revenue and operating income guidance for the fourth quarter and full fiscal year 2026 and reiterating our commitment to the long-term financial model we outlined at Investor Day."
- Compared to the previous quarter, the tone is more optimistic, with a new CEO focusing on operational momentum and AI opportunities, while analysts remain constructive but attentive to execution risk.
Quarter-over-Quarter Comparison- Atlas growth accelerated from 29% in Q2 to 30% in Q3, and Atlas now represents a higher share of total revenue. Customer additions were up, with 2,600 sequentially versus 2,800 in Q2.
- Operating margin improved to 20% from 15% in Q2, and free cash flow increased significantly.
- Guidance language shifted from "mid-20s percentage growth" for Atlas to a specific 27% target for Q4.
- Management confidence increased, with Berry highlighting "strong margin expansion and free cash flow performance in fiscal '26."
- Analyst questions shifted slightly toward the sustainability of AI-driven demand, operational leverage, and reinvestment strategies.
Risks and Concerns- Management acknowledged "historical seasonal variability and consumption patterns during the holiday period" as a consideration in Atlas guidance.
- Berry cautioned about the unpredictability of seasonal patterns: "We want to be prudent as we enter the holiday season."
- Challenges in scaling AI applications in production were highlighted, particularly in regulated industries, with Desai stating, "I have not seen -- like customers will tell me, CJ I have 10 agents in production, 15 agents in production. And when I really asked them...The answer is, oh, we are still working through that."
Final Takeaway
MongoDB delivered a strong third quarter with accelerating Atlas growth, robust customer additions, and significant operating margin outperformance. The company raised revenue and operating income guidance for both the fourth quarter and full fiscal year, citing continued momentum in its core business and expanding opportunities in AI and cloud modernization. Management reiterated its commitment to long-term growth and margin expansion, positioning MongoDB as a foundational data platform for the AI era while remaining attentive to potential risks from seasonality and evolving AI adoption cycles.
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