Q3 2025 Earnings Summary
- MongoDB is seeing strong and improving partnerships with major cloud providers like AWS, Azure, and GCP, resulting in a number of large deals and deep integrations, which can drive significant growth.
- The company is investing in strategic initiatives such as legacy application modernization and positioning itself as the ideal database for generative AI applications, which are expected to drive long-term growth. Management has high conviction in these investments.
- Recent sales strategy changes focusing on both the volume and quality of workload acquisitions are showing positive early results, with the company pleased with the new business environment and success in winning new workloads, which may lead to future growth acceleration.
- Atlas consumption growth remains lower year-over-year, with the seasonal rebound in Q3 being more muted than in prior years, indicating a potential slowdown in customer usage growth.
- MongoDB expects a sequential decline in non-Atlas revenue in Q4, which is contrary to its normal pattern, due to non-recurring multiyear deals in Q3, suggesting potential revenue volatility.
- The company acknowledges uncertainty around the timing of meaningful revenue from AI applications, as few AI apps have achieved significant scale, potentially delaying expected growth from AI initiatives.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +22% (from ~$432.94M to ~$529.38M) | Strong top-line growth driven by accelerated adoption of MongoDB Atlas and increased customer spend. This builds on the previous period’s 13% growth in Q2 2025, where robust subscription performance set the stage for even higher revenue expansion in Q3 2025. |
Subscription Revenue | +22% (from ~$418.34M to ~$512.21M) | Subscription revenue growth is primarily fueled by increased direct sales and higher Atlas engagement, an acceleration from the prior period’s 13% growth. The improved customer migration from self-serve to direct sales highlights the company’s effective strategy in boosting recurring revenues. |
Services Revenue | +18% (from ~$14.60M to ~$17.17M) | Services revenue rebound reflects improved fee engagements and consulting services. This contrasts with the slight 1% decline noted in Q2 2025 and indicates a recovery in service-related engagements as the company capitalizes on customer support opportunities, building on modest performance improvements from previous periods. |
Americas Revenue | +22% (from ~$265.70M to ~$325.08M) | Robust performance in the Americas is driven by mature market adoption of high-value subscription solutions. The consistent YoY uplift follows prior performance trends and underscores the region’s continued appetite for MongoDB’s offerings. |
EMEA Revenue | +18% (to ~$140.74M) | Steady growth in EMEA suggests improved customer acquisition and market penetration, though at a slightly lower rate compared to the Americas. This represents a natural pace given the region’s diverse market dynamics, building on moderate gains seen in previous periods. |
Asia Pacific Revenue | +33% (from ~$47.89M to ~$63.56M) | Exceptional growth in Asia Pacific highlights a significant ramp-up in cloud adoption and Atlas engagement in a region with previously lower penetration. The dramatic 33% increase outpaces other regions, underscoring both market potential and a successful regional expansion strategy relative to past performance. |
Operating Income | Negative at –$27.88M | Despite solid revenue gains, operating income turned negative due to higher investments in sales, marketing, and R&D, as well as a shift toward lower-margin Atlas revenue. This is in contrast to earlier periods (e.g., Q2 2024’s record 19% non-GAAP margin and Q2 2025’s positive $52.5M) where high-margin upfront licensing deals supported operating profitability. |
Net Income | Negative at –$9.78M | Net income deterioration reflects the increased operating expenses and lower gross margins from a higher share of Atlas revenue, compounded by growing stock-based compensation costs. This reverses the previous periods where non-GAAP net income was positive (e.g., $76.7M in Q2 2024 and $59.0M in Q2 2025). |
Gross Margin | Remains healthy at ~74% | Consistent gross margin at roughly 74% indicates effective cost control. However, the revenue mix shift toward lower-margin Atlas revenue—compared to higher-margin licensing in previous quarters—puts pressure on margins, even though the company manages to maintain overall healthy profitability on a gross basis. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue (Quarterly) | Q4 2025 | no prior guidance | $515 million to $519 million | no prior guidance |
Non-GAAP Income from Operations (Quarterly) | Q4 2025 | no prior guidance | $55 million to $58 million | no prior guidance |
Non-GAAP Net Income per Share (Quarterly) | Q4 2025 | no prior guidance | $0.62 to $0.65 (based on 84.9 million estimated diluted shares) | no prior guidance |
Revenue (Annual) | FY 2025 | $1.92 billion to $1.93 billion | $1.973 billion to $1.977 billion | raised |
Non-GAAP Income from Operations (Annual) | FY 2025 | $187 million to $195 million | $242 million to $245 million | raised |
Non-GAAP Net Income per Share (Annual) | FY 2025 | $2.33 to $2.47 (based on 84.3 million estimated diluted shares) | $3.01 to $3.03 (based on 84 million estimated diluted shares) | raised |
Non-GAAP Tax Provision (Annual) | FY 2025 | Approximately 20% | Approximately 20% (included in the net income per share guidance) | no change |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
AI and Generative AI Integration | In Q1, Q2 and Q4 2024, AI was introduced mainly as a long‐term opportunity with early pilots, proving its potential in legacy modernization and as a driver behind new product programs (e.g., MAAP) while enterprises were still experimenting with AI applications. | In Q3 2025, the company detailed a stronger, more actionable integration of AI with generative capabilities—emphasizing cost reductions in legacy modernization, deeper integration in its AI tech stack, expanded MAAP, and more live production AI apps. | Increased focus on actionable AI integration—evolving from early experimentation to advanced, revenue‐driving applications. |
Legacy Application Modernization | Previously, across Q1, Q2 and Q4 2024, modernization was discussed as a significant opportunity using AI tools and pilots (e.g., GenAI-powered pilots, Relational Migrator) to overcome high costs and complexity in migrating legacy systems, though it was in early stages with promising pilot outcomes. | Q3 2025 reinforced this theme with detailed discussion of customer pain points and the application of generative AI—showing reductions in modernization costs over 50% and a clear commitment to integrating professional services with AI–powered tools. | Enhanced adoption and clearer value proposition—from exploratory pilots to demonstrable cost and time savings. |
Atlas Consumption and Growth Trends | Earlier periods (Q1, Q2 and Q4 2024) reported mixed signals—strong revenue growth with consumption below initial expectations, seasonal impacts, and macro drag affecting underlying usage. | In Q3 2025, Atlas consumption was slightly better than expected with modest, broad‐based improvement across geographies, yet year-over-year growth remained lower and a seasonal slowdown was expected in Q4. | Continued modest growth with seasonal fluctuations—consistent improvement but long-term deceleration remains a concern. |
Cloud Partnerships and Multi-cloud Integrations | In Q1 2025, the emphasis was on MongoDB Atlas’s multi-cloud capabilities with established integrations across major hyperscalers; Q4 2024 had indirect references via the “run anywhere” strategy. | Q3 2025 featured a robust discussion on deepening cloud partnerships—highlighting strong tie-ups with AWS, Azure and GCP, integration with new cloud products, and a clear focus on multi-cloud advantages. | Enhanced partnerships and integration clarity—a refinement from a strategic advantage to an actively promoted strength. |
Sales Strategy and Workload Acquisition Quality | In prior periods, the narrative emphasized shifting to enterprise accounts with top-down selling, incentive realignments, and adjustments to balance workload volume versus quality through self-serve channels (Q1 and Q4) and slight compensation tweaks in Q2. | In Q3 2025, there was further focus on refining sales strategy with reallocation of mid-market resources to enterprise, expanded strategic account programs, and a focus on higher-quality workloads—supported by ongoing educational efforts for developers. | Stronger push toward enterprise deals and improved workload quality—demonstrating a deliberate, quality-over-volume approach. |
Revenue Guidance and Margin Pressure | Earlier periods (Q1, Q2 and Q4 2024) conveyed tempered revenue outlooks due to macro headwinds and non-recurring high-margin revenue in fiscal 2024; gross and operating margins were under pressure from evolving revenue mix and increased investments. | In Q3 2025, while revenue guidance was slightly higher and more optimistic on a quarterly basis, margin pressures remained given ongoing strategic investments in AI and legacy modernization, with cautious commentary on potential near-term impacts. | Persistent margin pressure with cautious revenue outlook—continuing to invest heavily despite short-term margin challenges. |
Strategic Investments and Capacity Expansion | In Q1, Q2 and Q4 2024, the company outlined plans to increase sales capacity and strategic investments—doubling strategic account programs, investing in AI for relational migrations and modernizing legacy applications, and gradually expanding headcount as market conditions improved. | Q3 2025 reaffirmed robust investments through increased focus on enterprise channel expansion, leveraging legacy modernization pilots and integrating product enhancements like Atlas Flex clusters, underscoring a continuous commitment to long-term growth. | Sustained strategic investments with incremental capacity expansion—a steady commitment to invest in long-term growth areas. |
Decline in Emphasis on Enterprise Advanced Offerings | Prior discussion in Q4 2024 and Q1/Q2 2025 portrayed strong performance and ongoing commitment to EA offerings, with high customer retention, success in multiyear deals, and a focus on workloads in existing customer accounts. | Q3 2025 explicitly reiterated that there was no decline in EA emphasis—instead, EA new business performed strongly, reaffirming its role as a key component of the “run anywhere” strategy alongside enterprise focus. | Steady commitment to EA—maintaining focus despite challenging macro factors, with no strategic de-emphasis observed. |
-
Atlas Consumption Trends
Q: What's driving recent Atlas consumption improvement?
A: While Atlas consumption exceeded expectations in Q2 and Q3, it remains down year-over-year due to lower underlying application usage. The improvement is broad-based but modest. -
Investment Impact on Margins
Q: Will new investments affect margin upside next year?
A: We're making strategic investments to expand enterprise sales and support for legacy app modernization and AI workloads. While we can't comment on next year's margins now, these are important for long-term growth. -
Enterprise Advanced (EA) Strength
Q: Is EA's strong performance sustainable?
A: Demand for EA remains strong, with some large customers preferring on-prem deployments. We continue to invest in EA, integrating features like Search and Vector Search, and see it as an important part of our run-anywhere strategy. -
AI Workload Adoption Timing
Q: When will AI apps scale and impact revenue?
A: We're in the early days of AI adoption. While thousands of AI workloads run on MongoDB, few have meaningful scale yet. As AI technology matures, we expect applications to take off, but it's still at least another year until broad deployment at scale. -
Quality of New Workloads
Q: How are new workload acquisitions trending?
A: We made changes to focus on both volume and quality of workloads. While fiscal '24 cohorts show slower growth, fiscal '25 cohorts are too early to assess. We're pleased with new business wins but need time to see how they grow. -
Professional Services Investment
Q: How will services investment affect margins and timing?
A: We're building out professional services to meet demand for app modernization, which will impact gross margins due to higher services revenue. This investment aims to drive ARR growth, and over time we'll leverage more technology to reduce the services component. -
Hyperscaler Partnerships
Q: How are partnerships with cloud providers evolving?
A: Relationships with AWS, Azure, and GCP are strong. We're integrating with new products and seeing increased co-sell activities. While hyperscalers offer their own databases, partnering with MongoDB provides customers with better solutions for their needs. -
EA Renewal Outlook
Q: What is the EA renewal situation in Q4?
A: Q4 is typically a large renewal quarter for EA. However, due to strong multiyear deals in Q3, we expect EA revenue to be down sequentially in Q4, which is not our usual pattern. -
Customer Migration from Postgres
Q: Are customers moving from Postgres to MongoDB?
A: Yes, we see a trend of customers migrating off Postgres due to its limitations. MongoDB offers greater flexibility, scalability, and ease of use. Customers realize significant benefits after moving. -
Consumption Growth Details
Q: Is consumption growth improvement uniform?
A: The consumption growth exceeding expectations is broad-based across vintages and geographies, though the improvement is modest. Year-over-year growth is still lower than last year. -
Investments in Strategic Sales
Q: What specific investments are being made in enterprise sales?
A: We're increasing resources for strategic accounts, including technical sales, professional services, and customer support—not just hiring more salespeople. This helps educate developers and showcase MongoDB's benefits, driving adoption. -
Relational Migrator Interest
Q: What's driving interest in Relational Migrator?
A: There's a confluence of factors: costs of legacy apps, regulatory pressures, vendor end-of-life, and the need for AI-ready data. Gen AI helps reduce migration time, and customers are eager to modernize critical applications. -
On-Prem vs. Cloud Workloads
Q: Are enterprises rethinking on-prem vs. cloud?
A: Yes, enterprises are being more judicious about workload placement. Many have significant on-prem investments and regulatory considerations, leading them to keep workloads on-prem. Our run-anywhere strategy caters to this need. -
Cedric's Expanded Role
Q: Any changes with Cedric's new appointment?
A: Cedric has been our CRO for 5–6 years, and this is an expansion of his responsibilities. There are no significant changes in focus; we're aligning organizations to better pursue strategic opportunities. -
EA vs. Atlas Workloads
Q: Will MAAP workloads be in EA or Atlas?
A: In early days, most MAAP workloads are on Atlas. As we introduce features like Search and Vector Search into EA, we expect more on-prem deployments. -
Seasonal Consumption Trends
Q: How did seasonal trends affect consumption growth?
A: We saw a seasonal rebound in Q3, which was smaller than the prior year. Year-over-year consumption growth is lower, and we've highlighted these trends to help understand our performance. -
Impact of Multiyear Deals
Q: How did multiyear deals impact EA revenue?
A: We benefited from over $15 million in revenue from multiyear EA deals in Q3, which was higher than expected. This positively impacted Q3, but we anticipate EA revenue to be down sequentially in Q4 due to this timing. -
New Product Adoption
Q: How are new products like Vector Search ramping?
A: Adoption of new products like Vector Search has been strong. We've released features that improve performance and reduce memory requirements, attracting customers across various industries. Overall, we're pleased with the progress. -
Atlas vs. EA Focus
Q: Should we rethink EA growth expectations?
A: While we're investing in EA, Atlas remains a significant part of our business and growth engine. We continue to enhance both products to meet customer needs, and our run-anywhere strategy supports both on-prem and cloud deployments. -
AI Readiness of Customers
Q: Are customers ready for AI workloads?
A: Many customers are still exploring AI, with some committed to on-prem deployments and others using cloud GPUs. We're in the early stages, with initial traction being small, but we expect growth as technology matures.