MDB Stock Dives After-Hours Despite Raised Full-Year Forecast — What’s Driving The Selloff?

• The full-year forecast was raised to $2.99-$3.03 billion in revenue, from $2.92-$2.96 billion, and to $6.39-$6.58 in adjusted earnings, from a previous estimate of $5.95–$6.14.
• The upgraded guidance is mainly spurred by the company’s Atlas product. 
• MongoDB says it wants to be a core data tool for AI apps.

Shares of MongoDB (MDB) fell about 13% after-hours on Tuesday, even after the software company raised its full-year forecast as investors focused on the company’s third-quarter outlook that trailed the last quarter.

Revenue for the quarter ended July 31 was $771.8 million, up 30% from a year earlier and above the roughly $734 million consensus. Adjusted earnings were $1.90 a share versus about $1.61 expected.

For the current quarter, MongoDB guided to revenue of $756 million to $761 million and adjusted earnings of $1.57 to $1.61. That is still above Wall Street’s third-quarter estimates, but a step down from the just-finished quarter.

MDB stock closed the regular session down 4.2% on Tuesday, before the earnings, down from the sharp August run toward a $473.10 52-week high. The stock clocked 34% gains in August ahead of the earnings report.

Management Weighs In

Chief Executive CJ Desai called Q2 the company’s fastest revenue growth in several years. “This performance reflects the mission-critical role our platform plays for customers, with strength driven by core enterprise workloads and early momentum with AI use cases,” he said. That strength, he added, spans both Atlas and Enterprise Advanced, the company's two main paid products, which is why the company raised its full-year outlook.

Atlas revenue rose about 29%. Enterprise Advanced and other subscription revenue jumped about 36%. Remaining performance obligations rose 91% to $1.52 billion. MongoDB ended the quarter with more than 70,600 customers and about $2.4 billion in cash. The full-year forecast was raised to $2.99-$3.03 billion in revenue, from $2.92-$2.96 billion, and to $6.39-$6.58 in adjusted earnings, from a previous estimate of $5.95–$6.14. The raise is mainly from Atlas.

MongoDB says it wants to be a core data tool for AI apps. It added search features to its self-managed software, launched a service that lets AI coding tools use live Atlas data, and rolled out new tools that help AI find information automatically. Desai said those investments give the company confidence that growth can last.

How Did MDB Retail Traders React?

On Stocktwits, retail sentiment around MDB stock improved from ‘bullish’ to ‘extremely bullish’ over the past 24 hours, while message volume rose from ‘high’ to ‘extremely high’ levels.

A Stocktwits user opined that the stock will go up in light of the Q2 numbers.

Another, however, sees the stock pulling back to the $300-$350 price range.

MDB stock has gained 3% year-to-date. 

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