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MongoDB (MDB) is surging following a strong 1Q26 earnings report and the announcement of an $800 mln expansion of its share repurchase program. This rally marks a sharp reversal for the stock which had declined by approximately 15% on a year-to-date basis after a 43% plunge in 2024, reflecting investors' muted expectations. Relatedly, the Q1 performance comes on the heels of a disappointing 4Q25 earnings report on March 5, where MDB exceeded EPS and revenue expectations but issued FY26 guidance significantly below analysts' estimates.

• That Q4 outperformance was driven by an unexpected $50 mln contribution from multiyear non-Atlas deals, particularly in its Enterprise Advanced business, which bolstered revenue but disappointed investors due to its non-recurring nature. Management cautioned that this tailwind would not persist into FY26, creating a revenue headwind, primarily in the second half of the year, as renewals from these deals taper off. Additionally, MDB projected a continued slowdown in Atlas growth, forecasting a 23% yr/yr increase for 1Q26, down from a 24% exit rate in Q4, further dampening investor confidence.
• Contrary to expectations, Atlas, MDB’s cloud database service for deploying and managing unstructured databases, delivered a reacceleration for Q1, with revenue growth of 26% yr/yr. This outperformance, with Atlas contributing 72% of total revenue, is a primary catalyst for the stock’s rally, as Atlas growth is a critical metric for investors. Key growth drivers for Atlas include broad-based consumption growth across vintages and geographies and a record 2,600 customer additions (totaling 57,100).
• Furthermore, the launch of new AI-focused offerings, such as Voyage 3.5 and 3.5 Lite retrieval models and the MongoDB Model Context Protocol Server in public preview, likely bolstered Atlas adoption by enhancing its appeal for AI workloads, particularly in regulated industries requiring trust and accuracy.
• MDB guided Q2 EPS above expectations and its revenue guidance also slightly topped estimates at the midpoint of the guidance range. The company also raised its FY26 EPS and revenue forecasts, significantly boosting its EPS outlook to $2.94-$3.12 from its prior projection of $2.44-$2.62. This improved profitability stems from operational efficiencies, disciplined spending under new CFO Mike Berry, and Atlas’s high-margin contribution. Atlas’s 72% share of revenue, with its scalable cloud model, reduces reliance on lower-margin non-Atlas offerings, which are expected to decline in the high single digits yr/yr.
• MDB’s long-term growth potential, particularly in AI, remains promising but underdeveloped. The company has noted that AI workloads are expected to contribute only “modestly incremental” revenue in FY26, as most enterprise customers are still building in-house AI capabilities. However, MDB’s strategic investments, including the Voyage AI acquisition and the MCP Server, position it to capitalize on the exponential growth of data fueling AI applications.

In conclusion, MDB’s Q1 earnings, driven by a 26% reacceleration in Atlas growth, have reignited investor confidence, powering a significant stock rally. The company’s focus on operational efficiency and AI investments positions it for sustained growth, with Atlas’s robust performance and the $800 mln share repurchase program underscoring a compelling path toward long-term shareholder value.