MongoDB loses nearly a quarter of its value after adjusting revenue forecasts

Document database company asking sales peeps to target workloads with 'higher growth potential'

MongoDB’s valuation tanked by as much as a quarter last night after it lowered expectations for revenue growth during the rest of the year, disappointing investors.

The documents database biz — popular among builders of web-based applications — announced $450.6 million in revenue for its first quarter of fiscal 2025 ended April 30, up 22 percent on the same period last year. Net losses were $80.6 million, compared to $54.2 million in the same period last year.

Reported revenues were higher than analysts' expectations for Q1, but the company dropped its forecasts — or guidance — for the second quarter. It said revenue would be $460.0 million to $464.0 million, below a consensus of analyst expectations, pegged at $470.4 million.

As such, it lowered its guidance for total revenue across the 2025 financial year from the $1.90 billion to $1.93 billion estimate in March to $1.88 billion to $1.90 billion.

In a prepared statement, CEO Dev Ittycheria said the company had a slower-than-expected start to the year both in user consumption of its Atlas database services and in new workload wins, “which will have a downstream impact for the remainder of fiscal 2025."

Speaking to analysts on an earnings call, Ittycheria said: “Our new business performance in Q1 wasn't up to our standards. Operationally, we got off to a slow start in the quarter.”

CFO and COO Michael Gordon explained that the workloads the company began to support last year performed in line with expectations initally, but then grew more slowly than expected. “Having analyzed the data, we believe that in the process of winning increased workload volumes, we unintentionally lost some focus on workload growth potential, and we've made adjustments in our processes and incentives to strike a better balance,” he said.

One analyst questioned whether cloud providers, which also offer document store database services (Amazon DocumentDB, Azure’s CosmoDB, Google Firestore) “maybe taking more share of the budget from the opportunity set for MongoDB”.

CEO Ittycheria denied this was the case, but indicated solving the workload growth problem might be about winning the right kind of customer in future.

“We're changing and fine-tuning some of the incentives to ensure that our salespeople and our teams focus on higher quality workloads that have higher growth potential,” he told investors.

He said found the document-based architecture is a “powerful differentiator in an AI world” as these system rely on data such as text, image, audio and video; a variety well suited to the document format.

MongoDB Atlas added Vector Search last year, and this year ported it to the open source community server edition. Most mainstream relational databases, including Oracle and PostgreSQL, have added vector search, and also support the document format JSON used by MongoDB. ®

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