MongoDB (MDB, Financial) recently reported Q4 earnings that exceeded expectations for both EPS and revenue. Despite this, the stock has plummeted to its lowest point since early 2023. The company benefited from multiyear non-Atlas deals, but does not anticipate this trend to continue, while Atlas growth is also slowing.

Adding to the concerns, MongoDB announced plans for aggressive investment in R&D, highlighted by its $220 million acquisition of Voyage AI on February 24. The company also intends to increase marketing expenses to boost platform awareness. This strategy, coupled with slowing growth, contributed to disappointing FY26 guidance, missing EPS and revenue forecasts.

• Atlas, MongoDB's cloud database service, is crucial for growth. However, its revenue growth slowed to 24% in Q4, down from 26% in Q3 and 27% in Q2. The company expects Atlas revenue to remain flat or slightly increase in 1Q26, with a year-over-year growth of about 23%.
• The non-Atlas segment, primarily the Enterprise Advanced (EA) product, is expected to face a $50 million headwind in FY26 due to a decline in multiyear license revenue. This is attributed to fewer large non-Atlas accounts available for multiyear deals.
• AI is not expected to be a significant growth driver for MDB in FY26. The company anticipates only modest AI-related growth as enterprise customers are still building in-house AI capabilities. However, MDB sees a substantial future opportunity in the growing data fueling AI advancements.

The key takeaway is that MongoDB's Q4 results mirror the previous quarter's challenges, but with heightened concerns. Atlas growth is slowing, and the company's outlook for "stable Atlas consumption growth" in FY26 is unappealing. During this period of decelerating growth, increased spending plans add further pressure.