MongoDB stock falls 12% in after hours despite strong Q2 earnings

MongoDB reported total revenue of $771.8 million for fiscal Q2 2027, representing 30% growth compared to the same period last year. Subscription revenue came in at $747.1 million, up 31% year-over-year. The company’s cloud-hosted Atlas service grew approximately 29%. Enterprise Advanced and other revenues jumped 36%.

MongoDB posted GAAP net income of $40.9 million, or $0.50 per diluted share. On a non-GAAP basis, the company earned $162.6 million, translating to $1.90 per share. The non-GAAP operating margin hit 24%, a significant leap from the 15% margin recorded a year ago. Free cash flow nearly doubled year-over-year, reaching $137.6 million.

The after-hours drop of more than 12% fits a pattern that has become almost ritualistic in the tech sector. Companies with elevated valuations face a peculiar burden: it’s not enough to beat estimates, you have to beat them by enough to justify a premium multiple.

MongoDB raised its full-year fiscal 2027 guidance, citing expected strength from Atlas and growing traction with AI-related workloads. Management highlighted the strategic positioning of MongoDB’s unified data platform in cloud and AI environments. The second half of fiscal 2027 is expected to lean heavily on Atlas performance, according to the company’s updated guidance.

Enterprise Advanced’s 36% growth is worth noting. This segment includes on-premises and self-managed deployments, which suggests that large enterprises are still investing in MongoDB infrastructure outside of the public cloud.

A non-GAAP operating margin of 24%, up from 15% just twelve months ago, suggests that MongoDB is finding operating leverage as it grows. Free cash flow nearly doubled year-over-year to $137.6 million.