What Happened?
Shares of database software company MongoDB (MDB) fell 13.8% in the morning session after the company reported mixed third-quarter (FQ3 2025) results. Consumption trends for Atlas, its cloud-based product, remained below the previous year's levels, and management predicts this weakness will persist into the next quarter. Reflecting this lower demand, revenue guidance for the next quarter implied a 2% sequential growth deceleration.
On the other hand, MongoDB blew past analysts' billings expectations during the quarter, leading to revenue and operating profit beats. Its revenue and EPS guidance for next quarter also came in higher than Wall Street's estimates. It was a good quarter but not good enough for the markets, something we've seen from other SaaS companies like NET and ZS, which were immediately down following seemingly solid results.
Also, MDB announced that Michael Gordon, its Chief Operating Officer and Chief Financial Officer, will be stepping down at the end of the fiscal year on January 31, 2025.
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What The Market Is Telling Us
MongoDB’s shares are very volatile and have had 22 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 previous big move we wrote about was 19 days ago when the stock gained 17.5% on the news that fellow data analytics software provider Snowflake reported impressive third-quarter results, which surpassed analysts' revenue and earnings expectations. Customer retention also normalized, suggesting some of the demand headwinds that hindered the growth of some enterprise software businesses are fading, especially those with more exposure to small and mid-sized businesses. The improved trends are also supported by Snowflake's strong sales outlook, which exceeded consensus estimates. Overall, the results revealed signs of improved demand within the data analytics segment.
MongoDB is down 20.9% since the beginning of the year, and at $303.78 per share, it is trading 39.4% below its 52-week high of $500.90 from February 2024. Investors who bought $1,000 worth of MongoDB’s shares 5 years ago would now be looking at an investment worth $2,348.
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