What Happened?
Shares of database software company MongoDB (MDB) jumped 14.4% in the afternoon session after the company reported an impressive "beat and raise" quarter (Q1 2026) which beat across most of the key growth metrics we track including sales, ARR (annual recurring revenue), RPO (remaining performance obligations), and billings.
Atlas remained a significant driver of the strong top-line strength, as sales in the segment rose 26%, highlighting the solid demand for cloud and AI applications. Operating profits also exceeded Wall Street's expectations, improving significantly from the same period last year.
Looking ahead, MongoDB raised its full-year revenue and EPS guidance, suggesting the momentum is expected to continue. Zooming out, we think this quarter featured some important positives.
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What The Market Is Telling Us
MongoDB’s shares are very volatile and have had 27 moves greater than 5% over the last year. But moves this big are rare even for MongoDB and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 17.9% on the news that the company reported a "beat and raise" quarter. Second quarter results blew past analysts' billing expectations. The top line benefited from the strong performance of its Atlas cloud offering, which recorded 27% y/y sales growth while driving 71% of overall revenue. Next quarter's revenue guidance also came in higher than Wall Street's estimates.
While AI wasn't yet a significant revenue driver for the business, MDB launched the MongoDB AI Applications Program (MAAP), to accelerate demand for its AI solutions. That the company raised full year guidance across the board was icing on the cake.
However, the quarter wasn't without challenges, as the business observed light deceleration in the consumption of existing workloads due to macro headwinds. Overall, this was a great quarter.
MongoDB is down 7.6% since the beginning of the year, and at $226.09 per share, it is trading 35.4% below its 52-week high of $350.13 from December 2024. Investors who bought $1,000 worth of MongoDB’s shares 5 years ago would now be looking at an investment worth $1,142.
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