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MongoDB(MDB) - 2026 Q2 - Earnings Call Transcript
2025-08-26 22:02
Financial Data and Key Metrics Changes - The company reported total revenue of $591 million, representing a 24% year-over-year increase and exceeding the high end of guidance [6][18] - Atlas revenue grew 29% year-over-year, now accounting for 74% of total revenue, up from 71% in the previous year [6][18] - Non-GAAP operating income was $87 million, resulting in a 15% operating margin, compared to 11% in the year-ago period [22][24] - Net income for the quarter was $87 million, or $1 per share, compared to $59 million, or $0.70 per share, in the prior year [24] Business Line Data and Key Metrics Changes - Atlas customer count increased to over 58,300, up from over 49,200 in the year-ago period, contributing significantly to revenue growth [21] - Non-Atlas annual recurring revenue (ARR) grew 7% year-over-year, with a total customer count of 59,900, up from over 50,700 a year ago [20][21] - The company added approximately 2,800 customers sequentially in Q2, with 300 from the Voyage acquisition [20] Market Data and Key Metrics Changes - The company experienced broad-based strength in larger customers, particularly in the U.S., contributing to the acceleration in Atlas consumption growth [17][76] - The net annual recurring expansion rate was approximately 119%, consistent with recent quarters [22] Company Strategy and Development Direction - The company is focused on driving durable growth and margin expansion, with an emphasis on AI and enterprise readiness [5][16] - Management highlighted the importance of integrating advanced capabilities like search and vector search into their offerings to enhance customer value [8][11] - The company is committed to investing in R&D and developer awareness while maintaining a disciplined approach to spending [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive continued revenue and profitability growth, raising full-year revenue guidance by $70 million [26][28] - The company anticipates mid-20s percentage growth for Atlas in the second half of the year, reflecting strong consumption trends [27][28] - Management noted that while AI adoption is increasing, it remains in the early stages for many enterprises [14][90] Other Important Information - The company ended the quarter with $2.3 billion in cash and cash equivalents, and repurchased approximately 930,000 shares for $200 million [24][25] - A modest restructuring impacted less than 2% of employees, resulting in approximately $5 million of one-time charges [23] Q&A Session Summary Question: Drivers of strong sequential growth in Atlas - Management attributed the strong sequential growth to larger workloads acquired over the past year and the uptick in capabilities like search and vector search [36] Question: Update on the state of the Salesforce organization - Management confirmed that the strategy remains focused on moving upmarket while effectively serving the SMB market through self-serve channels [40] Question: Acceleration in self-service despite moving upmarket - Management highlighted that the self-serve team has been running experiments to attract SQL developers and improve engagement [46] Question: Impact of AI on Atlas growth - Management clarified that while AI customer additions are increasing, they were not a material driver of growth in the current quarter [57] Question: Migration opportunities and modernization efforts - Management expressed excitement about app modernization and the investments being made to drive automation in code analysis and refactoring [61] Question: Industry developments and competition - Management discussed the strategic importance of OLTP for AI and how MongoDB's architecture positions it favorably against competitors [66][67] Question: Insights on Postgres adoption for AI startups - Management noted that many startups initially choose Postgres out of familiarity but face scaling challenges as they grow, leading them to consider MongoDB [70][72]