0001628280-25-054768
SEC filingMongoDB's Q3 FY26 MD&A reports 19% revenue growth driven by Atlas, with gross margin declining 300bps to 71% due to mix shift.
In the three months ended October 31, 2025, MongoDB reported total revenue of $628.3 million, up 19% from $529.4 million in the prior-year period. Subscription revenue grew 19% to $609.1 million, driven by increased consumption of MongoDB Atlas by large existing customers, as evidenced by a net ARR expansion rate of 120%. Services revenue increased 12% to $19.2 million. Gross profit rose 14% to $449.1 million, while gross margin declined from 74% to 71%, primarily due to a shift in revenue mix toward Atlas, which carries higher cloud infrastructure costs. Subscription gross margin decreased to 76% from 78%, while services gross margin remained negative, worsening to -68% from -41% due to higher third-party consultant and personnel costs. Operating expenses grew 11% to $467.6 million, but as a percentage of revenue improved to 74% from 79%. Sales and marketing expense increased 6% to $230.9 million, research and development rose 17% to $176.6 million, and general and administrative expense increased 14% to $60.1 million. Operating loss narrowed to $18.4 million from $27.9 million. Other income, net decreased slightly to $19.8 million, and the provision for income taxes increased to $3.4 million. Net loss improved to $2.0 million from $9.8 million.
Subscription revenue remains the dominant segment, accounting for 97% of total revenue. Within subscriptions, MongoDB Atlas revenue represented 75% of total revenue in Q3 FY26, up from 68% in Q3 FY25, reflecting continued strength and adoption of the cloud database platform. MongoDB Enterprise Advanced contributed 20% of subscription revenue, down from 25% as customers migrate to Atlas. Services revenue held steady at 3% of total. The mix shift toward Atlas is a key margin driver, as Atlas gross margins are lower due to third-party cloud infrastructure costs, but the company believes this supports long-term customer retention and expansion. Headcount increased to 5,639 from 5,436, with most growth in research and development and services.
MongoDB's MD&A does not provide specific quantitative guidance for future periods but highlights key strategic priorities: continuing to grow the customer base, expanding existing customer relationships through land-and-expand, and investing in sales and marketing, research and development, and platform innovation. The company expects macroeconomic headwinds to persist in the short term, particularly on growth rates of existing Atlas applications. Management anticipates further investments in the developer data platform and international expansion. The net ARR expansion rate of 120% and strong customer additions (over 62,500 total) signal healthy underlying demand. The company believes its existing cash, cash equivalents, and short-term investments of $2.3 billion are sufficient to fund operations for at least the next 12 months, though it may seek additional capital for strategic initiatives.
As of October 31, 2025, MongoDB held $834.1 million in cash and cash equivalents and $1.471 billion in short-term investments, totaling $2.305 billion in highly liquid assets. Total assets were $3.567 billion. The company has no outstanding debt following the full redemption or conversion of its 2026 convertible notes in December 2024. Stockholders' equity stood at $2.888 billion, up from $2.782 billion at fiscal year-end January 31, 2025. Unrealized gains on available-for-sale securities contributed $10.3 million to accumulated other comprehensive income.
During the third quarter of fiscal 2026, MongoDB entered into a renewal agreement with a cloud infrastructure provider that includes a non-cancelable commitment of $300 million to be paid over a period from October 2025 through October 2028. This is in addition to existing operating and finance lease obligations, which had total future minimum payments of $39.2 million and $35.6 million, respectively, as of October 31, 2025.
In February 2025, the Board authorized a $200 million share repurchase program, which was expanded by an additional $800 million in June 2025, bringing the total authorization to $1.0 billion. During the nine months ended October 31, 2025, the company repurchased 1,443,294 shares for $345.3 million (average price $265.88), leaving $654.7 million remaining. The company also adopted net-share settlement for withholding taxes on equity awards beginning in the third quarter. Capital expenditures were modest at $3.8 million for the nine-month period. No dividends were declared.
MongoDB operates as a single reportable segment, but disaggregates revenue by geography and subscription product. For the three months ended October 31, 2025, Americas generated $380.0 million (60% of total), EMEA $175.3 million (28%), and Asia Pacific $73.0 million (12%). Atlas-related subscription revenue reached $470.4 million (75% of total revenue), compared to $362.6 million in the prior-year quarter. Other subscription revenue was $138.7 million, and services contributed $19.2 million. The United States accounted for 53% of total revenue for the quarter. Remaining performance obligations (RPO) totaled $994.3 million, with 55% expected to be recognized over the next 12 months.
MongoDB's operating cash flow (CFO) of $325.5M for the nine months ended October 31, 2025 significantly exceeded the net loss of $86.7M, demonstrating strong cash flow generation despite GAAP unprofitability. The primary driver was $406.5M in stock-based compensation, a non-cash expense that added back to net loss. Capex remained minimal at $3.8M (1.2% of CFO), reflecting a highly asset-light business model. The company generated substantial free cash flow (CFO less capex of $321.7M), which fully funded the $343.1M in share repurchases with room to spare. Working capital changes were mixed: accounts receivable increased by $25.2M (a use of cash), while deferred revenue rose by $9.5M (a source) after a large decline in the prior period. Investing cash flow was positive $372.2M due to $723.6M in proceeds from sales and maturities of marketable securities, partially offset by $337.3M in purchases. Financing cash flow was negative $362.1M, driven entirely by the share repurchases, partially offset by $22.9M from employee stock purchases and $2.3M from option exercises. Overall, the company’s cash position grew by $344.4M, ending at $837.2M.