10-Q: MongoDB Q3 2025: Atlas Drives Revenue Growth, Net Loss Narrows

MongoDB reports strong subscription revenue growth, primarily driven by MongoDB Atlas, while significantly reducing its net loss for the third quarter and first nine months of fiscal year 2025.

Summary

• Total revenue for the three months ended October 31, 2025, was $628.3 million, an increase of 19% from $529.4 million in the prior year period.
• Total revenue for the nine months ended October 31, 2025, was $1,768.7 million, an increase of 21% from $1,458.0 million in the prior year period.
• Subscription revenue for the three months ended October 31, 2025, increased by 19% to $609.1 million.
• MongoDB Atlas-related revenue constituted 75% of total revenue for the three months and 74% for the nine months ended October 31, 2025, up from 68% and 70% respectively in the prior year.
• Net loss for the three months ended October 31, 2025, significantly decreased to $2.0 million from $9.8 million in the prior year.
• Net loss for the nine months ended October 31, 2025, decreased to $86.7 million from $144.9 million in the prior year.
• Basic and diluted net loss per share for the three months was $(0.02) compared to $(0.13) in the prior year.
• Gross profit for the three months was $449.1 million (71% gross margin) compared to $394.0 million (74% gross margin) in the prior year.
• Operating loss for the three months was $(18.4) million, an improvement from $(27.9) million in the prior year.
• Cash, cash equivalents, short-term investments, and restricted cash totaled $2.3 billion as of October 31, 2025.
• Net cash provided by operating activities for the nine months ended October 31, 2025, was $325.5 million, a substantial increase from $99.7 million in the prior year.
• The customer base grew to over 62,500 as of October 31, 2025, from over 52,600 in the prior year.
• Customers with $100,000 or greater in Annualized Recurring Revenue (ARR) and Annualized Monthly Recurring Revenue (MRR) increased to 2,694 from 2,314.
• The net ARR expansion rate was 120% as of October 31, 2025.
• Acquired Voyage AI Innovations, Inc. on February 17, 2025, for $160.9 million, primarily for its developed AI technology and talent.
• Entered into a renewal agreement with a cloud infrastructure provider for a non-cancelable commitment of $300 million to be paid from October 2025 through October 2028.
• The Board of Directors authorized an additional $800.0 million in share repurchases, bringing the aggregate authorized amount to $1.0 billion. $345.3 million of common stock was repurchased during the nine months ended October 31, 2025.

Sentiment

Score: 7

Explanation: The company demonstrates strong revenue growth, particularly in its key MongoDB Atlas offering, and a significant reduction in net losses, indicating improved operational efficiency. The expansion of its customer base and high net ARR expansion rate are positive indicators. However, declining gross margins, increased operating expenses in absolute terms, and ongoing legal proceedings present areas of concern. The acknowledged macroeconomic headwinds and the potential need for future capital raises temper the overall positive sentiment.

Positives

• Net loss significantly reduced to $2.0 million for the three months and $86.7 million for the nine months ended October 31, 2025, compared to $9.8 million and $144.9 million respectively in the prior year.
• Strong total revenue growth of 19% for the quarter and 21% for the nine months, indicating continued demand for the platform and related services.
• MongoDB Atlas continues to be a primary growth driver, representing 75% of total revenue for the quarter, up from 68% in the prior year.
• The customer base expanded to over 62,500, an increase from 52,600 in the prior year, demonstrating successful customer acquisition.
• The number of high-value customers (with $100,000 or greater in ARR and annualized MRR) increased to 2,694 from 2,314.
• A healthy net ARR expansion rate of 120% indicates strong customer retention and increasing spend from existing customers.
• Net cash provided by operating activities for the nine months ended October 31, 2025, was $325.5 million, a substantial increase from $99.7 million in the prior year, reflecting improved cash generation.
• The acquisition of Voyage AI Innovations, Inc. enhances AI capabilities and is expected to provide synergies and expanded market opportunities.
• A strong liquidity position with $2.3 billion in cash, cash equivalents, short-term investments, and restricted cash as of October 31, 2025.
• The expansion of the share repurchase program to $1.0 billion demonstrates confidence in financial health and commitment to shareholder returns.

Negatives

• Gross margin decreased to 71% for both the three and nine months ended October 31, 2025, from 74% in the prior year, primarily due to increased subscription revenue from MongoDB Atlas as a percentage of total subscription revenue and associated higher hosting costs.
• Services gross margin significantly decreased to (68)% for the three months and (65)% for the nine months ended October 31, 2025, from (41)% and (50)% respectively in the prior year, driven by higher third-party consultant and training costs, and increased services personnel costs.
• Operating expenses increased in absolute dollars across sales and marketing, research and development, and general and administrative categories.
• Other income, net, decreased for the three months ended October 31, 2025, primarily due to lower interest income from short-term investments.
• The company continues to incur net losses, with an accumulated deficit of $1.9 billion as of October 31, 2025.
• Macroeconomic headwinds are expected to impact the growth rate for existing MongoDB Atlas applications in the short term.
• Sales and marketing headcount decreased to 2,421 as of October 31, 2025, from 2,489 as of October 31, 2024.

Risks

• Unfavorable conditions in the industry or global economy (e.g., slower growth, higher inflation, rising interest rates, geopolitical landscape, supply chain disruptions, banking sector volatility) could limit business growth and adversely affect results.
• Dependence on customer renewals and expansion of usage; any decline could materially and adversely harm business, results of operations, and financial condition.
• Failure to meet publicly announced guidance or other expectations about business and future operating results could cause stock price to decline.
• Limited operating history at current scale makes it difficult to predict future results of operations.
• History of losses and increasing costs may prevent achieving or sustaining profitability.
• Majority of revenue from MongoDB Atlas; failure to satisfy customer demands or unpredictable future revenue due to usage-based model could adversely affect business, results of operations, financial condition, and growth prospects.
• Significant and intense competition from established legacy database providers (IBM, Microsoft, Oracle) and public cloud providers (AWS, Google Cloud Platform, Microsoft Azure), as well as smaller emerging providers.
• Failure to effectively expand the sales and marketing organization may hinder new customer acquisition or increase sales to existing customers.
• Decision to offer Community Server under the Server Side Public License (SSPL) may harm its adoption due to uncertainty around license provisions.
• Risk that the GNU Affero General Public License Version 3 (AGPL), SSPL, and other open source licenses are not enforceable, allowing competitors to use software without restrictions.
• Licensing model for Community Server could negatively affect the ability to monetize and protect intellectual property rights.
• Substantial costs in obtaining, maintaining, protecting, defending, or enforcing intellectual property rights; any failure to do so could reduce the value of software and brand.
• Inability to successfully introduce new features or services and make enhancements to software could adversely affect business and results of operations.
• Rapid growth poses challenges in effective management, potentially impacting business plan execution, revenue, results, service levels, or ability to adequately address competitive challenges.
• Security breaches or other security incidents (including cyberattacks, phishing, ransomware, supply-chain attacks) could lead to perceived insecurity, reduced customer use, litigation, regulatory investigations, significant liability, and reputational damage.
• Reliance on highly skilled personnel, including senior management and engineering, professional services, sales, and technology professionals; inability to retain or motivate key personnel or hire qualified personnel would harm business.
• Failure to maintain and enhance brand, especially among developers, could adversely affect business and results of operations.
• Dependence on SaaS technologies from third parties to operate business; interruptions or performance problems with these technologies may adversely affect business and results of operations.
• Indemnity provisions in various agreements could expose to substantial liability for data breaches, intellectual property infringement, and other losses.
• Business is susceptible to risks associated with international operations, including political/economic conditions, localization, collection of receivables, laws, data privacy, labor regulations, management challenges, increased costs, currency fluctuations, trade policies, IP protection, political instability, anti-corruption laws, and tax burdens.
• Changes in government trade policies, including the imposition of tariffs and other trade barriers, could limit the ability to sell products to certain customers and markets.
• Foreign currency exchange rate fluctuations could substantially affect financial results, which are reported in U.S. dollars.
• Market risk from non-marketable securities, including partial or complete loss of invested capital and volatility in financial results.
• Subject to stringent and evolving U.S. and foreign laws, regulations, rules, standards, contractual obligations, and policies particularly related to data privacy and security; non-compliance could lead to regulatory investigations or actions, litigation, fines, and reputational harm.
• Estimates of market opportunity and forecasts of market growth may prove to be inaccurate.
• Future quarterly results may fluctuate significantly due to a variety of factors, many of which are outside of control.
• Risks related to environmental, social, and governance (ESG) activities and disclosures, including failure to satisfy expectations, reputational harm, and compliance costs.
• Social, ethical, security, and regulatory issues relating to the use of new and evolving technologies, such as AI and ML, in offerings or partnerships may result in reputational harm and liability, and may cause additional research and development costs.
• The trading price of common stock has been and is likely to continue to be volatile.
• Issuance of additional capital stock in connection with financings, acquisitions, investments, equity incentive plans, or otherwise will dilute all other stockholders.
• No intention to pay dividends on common stock for the foreseeable future.
• Requirements of being a public company may strain resources, divert management's attention, and affect the ability to attract and retain additional executive management and qualified board members.
• Corporate structure and intercompany arrangements are subject to the tax laws of various jurisdictions, and could be obligated to pay additional taxes.
• Amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes, which could limit stockholders' ability to obtain a favorable judicial forum.
• Delaware law and corporate charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts.
• Sales of substantial amounts of common stock in the public markets, or the perception that they might occur, could cause the market price of common stock to decline.
• No assurance that shares of common stock will be repurchased or that they will be repurchased at favorable prices.
• Incurrence of significant amounts of debt in the past and potential for additional indebtedness in the future; may not have sufficient cash flow to make payments when due.
• Capped call transactions may affect the value of common stock.

Future Outlook

The company expects to continue investing significantly in business growth, including sales and marketing, research and development, and operational expansion, which will likely lead to increased operating expenses and continued net losses in the short term. Macroeconomic headwinds are anticipated to affect the growth rate of existing MongoDB Atlas applications. The company may pursue additional acquisitions or strategic investments and could require further equity or debt financing. It also expects a higher proportion of MongoDB Atlas contracts to be usage-based with monthly billing in arrears, potentially impacting revenue predictability and gross margins due to associated hosting costs. The company is monitoring evolving global tax legislation and AI regulations, which may require operational adjustments.

Management Comments

• Our mission is to empower developers to create, transform, and disrupt industries by unleashing the power of software and data.
• We intend to continue to invest to grow our business to take advantage of our market opportunity.
• We expect to experience macroeconomic headwinds on growth rate for our existing MongoDB Atlas applications in the short term.
• We continue to monitor the developments of the macroeconomic environment and the geopolitical landscape. As these factors develop and we evaluate their impact on our business, we may adjust our business practices accordingly.
• We are intensely focused on continuing to grow our customer base.
• We believe that there is a significant opportunity to drive additional sales to existing customers, and expect to invest in sales and marketing and customer success personnel and activities to achieve additional revenue growth from existing customers.
• Our goal is to increase the number of customers that standardize on our platform within their organization, as well as add new workloads with new and existing customers.
• We expect to continue to invest in our services organization as we believe it plays an important role in accelerating our customers realization of the benefits of our platform, which helps drive customer retention and expansion.
• The goodwill balance associated with the Voyage AI Innovations, Inc. business combination is attributable to the assembled workforce as well as synergies expected from expanded market opportunities when integrating the acquired developed technology with our offerings.
• Given the ongoing tax losses and full valuation allowance against our domestic deferred tax assets, we do not expect any material impacts from the provisions effective in the fiscal year ended January 31, 2026, from the One Big Beautiful Bill Act on our consolidated financial statements.

Industry Context

MongoDB operates in a large and growing worldwide data software market, projected to reach $169 billion by 2029 with a 13% compound annual growth rate. The company's strong revenue growth, particularly from its MongoDB Atlas database-as-a-service (DBaaS) offering, aligns with the broader industry trend towards cloud-based, usage-driven data platforms. The acquisition of Voyage AI Innovations, Inc. for its AI-powered software reflects the industry's increasing focus on integrating artificial intelligence and machine learning capabilities into data management solutions. MongoDB faces intense competition from established legacy database providers and major public cloud providers, necessitating continuous innovation and strategic market positioning. The company's shift to the SSPL for its Community Server highlights ongoing efforts to protect intellectual property in a competitive open-source and cloud services landscape. Evolving global regulations around data privacy (e.g., GDPR, U.K. GDPR, DORA) and AI (e.g., EU AI Act) are shaping the operational and compliance environment for all industry players, requiring significant adaptation and investment.

Comparison to Industry Standards

• MongoDB's 19-21% revenue growth rate for the reported periods significantly outpaces the IDC-projected 13% five-year compound annual growth rate for the worldwide Data Management Software market, indicating strong market share capture and performance relative to the overall industry.
• The increasing proportion of revenue from MongoDB Atlas (75% for the quarter) demonstrates a successful pivot to DBaaS, a key growth area in the industry, comparable to the cloud-native database offerings of major cloud providers like Amazon Web Services (e.g., DynamoDB, Aurora), Google Cloud Platform (e.g., Cloud Spanner, Firestore), and Microsoft Azure (e.g., Cosmos DB, Azure SQL Database).
• A net ARR expansion rate of 120% is a strong indicator of customer satisfaction and effective land-and-expand strategies, which is a competitive benchmark for SaaS and DBaaS companies, often exceeding the average for many enterprise software providers.
• The acquisition of Voyage AI Innovations, Inc. for its AI capabilities positions MongoDB to compete with other data platforms that are integrating advanced AI/ML, such as Snowflake's Cortex or Databricks' Lakehouse AI, demonstrating a commitment to staying at the forefront of technological trends.
• The company's continued net losses, despite strong revenue growth, are common for high-growth technology companies that prioritize market share expansion and R&D investment over immediate profitability, a strategy seen in many successful SaaS companies during their growth phases.
• The decline in gross margin, particularly in services, due to increased cloud hosting and personnel costs, is a common challenge for DBaaS providers as they scale, reflecting the significant infrastructure investments required to support cloud-native offerings, a dynamic shared with other major cloud service providers.

Management Changes

Corporate Governance

Legal Proceedings

• Baxter v. MongoDB, Inc., et al. (Securities Action): A putative class action lawsuit filed July 9, 2024, alleging material misstatements/omissions regarding sales strategy and financial results for stock purchased between June 1, 2023, and May 30, 2024. Defendants filed a motion to dismiss on May 9, 2025, which is pending. The company is unable to estimate any reasonably possible loss but intends to vigorously defend itself.
• Roy v. Ittycheria et al. (S.D.N.Y. Derivative Litigation): A purported shareholder derivative lawsuit filed October 7, 2024, alleging breach of fiduciary duties and other misconduct related to statements in the Securities Action. This case has been consolidated with another similar action and is stayed pending the outcome of the motion to dismiss in the Securities Action.
• Sansone v. Ittycheria, et al. (Delaware Derivative Action): A purported derivative action filed September 12, 2025, with similar allegations to the S.D.N.Y. Derivative Litigation. This case is also stayed pending the outcome of the motion to dismiss in the Securities Action.

Related Party Transactions

• Advisory Services Agreement with Dev Ittycheria (former CEO) effective November 10, 2025, for a term until November 9, 2026, with a reduced salary of $100,000 per year and eligibility for a pro-rated annual bonus for fiscal year 2026. He will also remain an executive member of the Board.
• Offer Letter to Chirantan J. Desai (new CEO) dated October 29, 2025, effective November 10, 2025, with an annual base salary of $500,000, a target annual bonus of $350,000, a sign-on cash bonus of $2,500,000, and equity awards (Restricted Stock Units valued at $15,000,000 and Performance Stock Units valued at $17,500,000).

Stakeholder Impact

• Shareholders: Positive impacts include reduced net loss, strong revenue growth, increased customer base, high net ARR expansion, and an expanded share repurchase program. Negative impacts include potential dilution from future equity issuances, no dividends, potential stock price volatility, and ongoing legal proceedings.
• Employees: Positive impacts include continued investment in R&D and growth, Employee Stock Purchase Plan (ESPP) benefits, and stock-based compensation. Negative impacts include restructuring costs in sales and marketing, intense competition for talent, and management changes (CEO transition, CAO resignation).
• Customers: Positive impacts include continued investment in platform development, new features (including AI/ML), high-quality support, and an expanded services organization. Negative impacts include potential for errors/bugs in software, reliance on third-party cloud providers (service disruptions), and security breach risks.
• Suppliers (Cloud Infrastructure Providers): Positive impact from a renewal agreement with a non-cancelable commitment of $300 million, indicating continued business.
• Creditors: Positive impacts include a strong liquidity position ($2.3 billion cash/investments) and improved operating cash flow. Negative impacts include a history of losses and potential for future debt financing.

Next Steps

• Continue to invest in sales and marketing efforts and developer community outreach to drive customer acquisition.
• Invest in sales and marketing and customer success personnel and activities to achieve additional revenue growth from existing customers.
• Continue to invest in the services organization to accelerate customer realization of platform benefits, driving retention and expansion.
• Continue to invest in the developer data platform and develop new products, including next-generation solutions utilizing AI and ML.
• Monitor and interpret the impact of proposed and enacted global tax legislation, including Pillar Two and the One Big Beautiful Bill Act (OBBBA).
• Assess liquidity needs as macroeconomic conditions evolve.
• Potentially enter into arrangements to acquire or invest in complementary businesses, services, and technologies.
• Potentially seek additional equity or debt financing.
• Vigorously defend against the Baxter v. MongoDB, Inc. class action lawsuit and the S.D.N.Y. and Delaware Derivative Litigations.
• Continue to monitor and adapt to evolving data privacy and security laws and regulations (e.g., U.K. GDPR reforms, NIS2, DORA, EU AI Act).
• Continue to implement, maintain, monitor, and enforce appropriate technical and administrative safeguards, policies, and procedures governing the use of AI and ML.
• Manage the transition of the Chief Accounting Officer following Thomas Bull's resignation effective February 27, 2026.

Key Dates

Recommendation

MongoDB demonstrates strong top-line growth, particularly with its Atlas offering, and has significantly narrowed its net losses, indicating improving operational efficiency. The expanded share repurchase program signals management's confidence and commitment to shareholder value. However, the declining gross margins, especially in services, and the ongoing legal challenges introduce uncertainty. While the company is well-positioned in a growing market and investing in AI, the macroeconomic headwinds and the inherent volatility of high-growth tech stocks suggest a 'Hold' rating until there's clearer evidence of sustained profitability and resolution of legal and margin pressures. The CEO transition, while potentially positive long-term, also adds a short-term element of uncertainty.

Keywords

MongoDB, Database, DBaaS, Cloud Database, Developer Data Platform, MongoDB Atlas, MongoDB Enterprise Advanced, Software Subscription, Financial Results, Q3 2025, SEC Filing, 10-Q, AI Innovations, Voyage AI, Open Source, SSPL, Corporate Governance, Share Repurchase, Net ARR Expansion, Financial Performance, Technology, Data Management, Artificial Intelligence, Machine Learning