MongoDB (MDB, Financial) just dropped a bombshell on investors. The company crushed Q4 expectations, reporting $548.4 million in revenue—up 20% year-over-year—and non-GAAP earnings per share of $1.28, nearly double what analysts had predicted. Full-year revenue topped $2 billion for the first time, with Atlas driving the bulk of the growth, up 24%. On paper, it looks solid—customer count is climbing, the company is expanding its AI capabilities with the Voyage AI acquisition, and there's even a $200 million stock buyback. But beneath the surface, cracks are showing: gross margins dipped, and free cash flow in Q4 was slashed by more than half.
The real problem? MongoDB's 2026 outlook isn't pretty. While Q1 revenue guidance of $524-$529 million is on track, full-year projections of $2.24-$2.28 billion signal a major slowdown, with non-GAAP earnings per share set to drop over 30% from last year's $3.66. Investors weren't having it—shares tanked over 24% at 1.38pm, as the market reacted to the bleak forecast. Sluggish free cash flow growth, pressure on non-Atlas revenue, and fears of an earnings downturn are fueling the sell-off. Management remains optimistic about long-term AI-driven demand, but right now, Wall Street only sees a company bracing for a tougher year ahead.
So, is this an overreaction or the start of a bigger problem? MongoDB still holds a strong position in cloud-based databases, and AI-powered applications could drive future growth. But with profits under pressure and cash flow slowing, the near-term outlook is murky. If management can prove that this is just a temporary dip rather than the start of a downtrend, investors may have an opportunity. Otherwise, MongoDB could be in for a rough ride.
