MongoDB Inc (NASDAQ:MDB) shares plunged more than 20% on Thursday after the document database-as-a-service issued weaker-than-expected revenue guidance for fiscal 2026.
The company guided full year revenue in the range of $2.24 billion to $2.28 billion or 12% growth, below the 18% expected by analysts.
Analysts at Jefferies noted that when coupled with management’s expectation that non-Atlas revenue will decline by high single digits, guidance implies “healthy” 21% growth for Atlas, MongoDB’s database product.
“With 4% to 5% points upside, the outlook suggests mid 20s growth for Atlas is more likely, which is largely consistent with the Q4 exit rate,” they wrote.
“We believe that Atlas growth has likely bottomed at that level and see potential for acceleration from here as the impact from Q1 fiscal year 2025 usage weakness cycles through revenue a year later in Q2 fiscal 2026.”
Solid fourth quarter
MongoDB’s soft revenue outlook overshadowed a solid fourth quarter, the analysts believe.
For the fourth quarter, earnings of $1.28 were ahead of estimates of $0.67.
Revenue of $548.4 million, up 20% year-over-year, beat the Wall Street consensus of $519.84 million.
Subscription revenue was up 19% from the year-ago quarter at $531 million while services revenue increased 34% to $17.4 million.
“While the outlook is disappointing, other key growth metrics trended well, and we see the growth rate improving from here,” Jefferies wrote.
They repeated their ‘Buy’ rating on MongoDB but lowered their price target to $286 from $420 to reflect the company’s lower fiscal 2026 revenue and margin outlook.
Shares of MongoDB traded down 21.8% at about $207 late morning on Thursday.
“We believe that total revenue and Atlas revenue growth rates have bottomed at 12% and 21%,” they wrote. “Leading indicators suggest reacceleration is likely moving through the year.”