0001441816-25-000181
SEC filingMongoDB's Q2 FY26 revenue grew 24% YoY, driven by Atlas mix shift, while operating margin improved on disciplined spending.
For the three months ended July 31, 2025, MongoDB reported total revenue of $591.4 million, a 24% increase compared to $478.1 million in the same period last year. Subscription revenue, which accounts for 97% of total revenue, grew 23% to $572.4 million, driven by a $92.4 million increase from Direct Sales Customers. Services revenue rose 33% to $19.0 million.
Gross profit increased 20% to $420.0 million, but gross margin declined to 71% from 73% in the prior year. The subscription gross margin fell to 76% from 77%, primarily due to higher third-party cloud infrastructure costs ($23.6 million increase) associated with the growth of MongoDB Atlas. Services gross margin worsened to (65)% from (50)%, impacted by higher personnel and consultant costs.
Operating expenses grew 15% to $485.3 million, slower than revenue growth, leading to an improved operating loss of $(65.3) million compared to $(71.4) million. Operating margin improved to (11)% from (15)%. Sales and marketing expense increased 10% to $244.1 million, driven by higher commissions and personnel costs, partially offset by lower stock-based compensation. Research and development expense rose 22% to $181.7 million, primarily from increased personnel costs. General and administrative expense increased 17% to $59.5 million, reflecting higher personnel and software costs.
Net loss improved to $(47.0) million from $(54.5) million, with other income net of $22.2 million providing a partial offset.
MongoDB Atlas revenue represented 74% of total revenue in Q2 FY26, up from 71% in the prior year, reflecting continued migration to the cloud. MongoDB Enterprise Advanced revenue declined to 21% of subscription revenue from 24%, as the mix shifts toward Atlas. The company ended the quarter with over 59,900 total customers, up from over 50,700 a year ago, and over 58,300 Atlas customers. Direct Sales Customers (over 7,300) contributed 87% of subscription revenue, consistent with the prior year. The number of customers with $100,000 or more in ARR grew to 2,564 from 2,189, and the net ARR expansion rate was approximately 119%, indicating strong expansion despite macroeconomic headwinds.
Management expects the macroeconomic environment to continue to negatively impact revenue growth, particularly for existing Atlas applications. The company plans to continue investing in sales and marketing, research and development, and customer success to drive customer acquisition and expansion. No specific forward guidance was provided in the MD&A section. The company's liquidity position remains strong with $2.3 billion in cash, cash equivalents, short-term investments, and restricted cash. A $1.0 billion share repurchase program was authorized, with $200.0 million in repurchases executed during the first half of FY26.
MongoDB’s operating cash flow of $182.0M in H1 FY2026 far exceeded the net loss of $84.7M, reflecting high-quality earnings driven by non-cash charges—primarily stock-based compensation ($272.8M) and depreciation/amortization ($11.0M). Net cash provided by operations almost tripled year-over-year from $62.2M, supported by a significant improvement in accounts receivable ($41.8M inflow vs. $13.3M inflow in the prior period) and deferred commissions ($14.5M inflow vs. $20.0M outflow).
Capital expenditures were minimal at $2.1M, resulting in a very low capex intensity and implying free cash flow well above reported operating cash flow. The company deployed capital aggressively via $194.4M in share repurchases during the period, fully funded by operating cash flow and proceeds from marketable securities maturities ($491.0M). Financing activities were negative overall due to the repurchases, partially offset by ESPP proceeds ($22.9M). The overall cash position grew by $157.5M, ending at $650.2M.
Notable anomalies: a large working capital outflow from deferred revenue ($49.5M) was more than offset by the accounts receivable collection. The business combination for $2.0M in cash and $141.4M in stock did not materially impact cash from investing activities. The effective tax payments ($10.5M) remained modest. Overall, cash flow generation remains robust and well ahead of GAAP net income.