MongoDB CEO on Concerns About Weak Forecast

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1:27Message and data rates may apply. JPMorgan Chase Bank N.A. Member FDIC. Copyright 2026. JPMorgan Chase and Company. Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevec on Bloomberg Radio. We've been watching shares of MongoDB in a record drop for the stock. The company did report its latest results. It gave a weaker-than-expected forecast for the full-year revenue and first-quarter adjusted earnings. It is a database software company. It's a space that we've been focusing on that has come under some pressure because of the AI scare trade, or what people are calling it.

2:11Joining us right now to talk about the company is MongoDB's CEO, CJ Desai. He joins us now. Investors are weighing in. They're not happy. As we said, a record drop for the stock. what can you tell us about the outlook and the business?

2:27Chirantan Desai:So, Carol, we had fantastic Q4, and it was to handle across the board from top line and bottom line. So, 27 % revenue growth, 23 % operating margin. Our Atlas, which is our cloud business, grew 29%. And so, So when I think about that and also add net retention rate was 121%, as in our customers are expanding with us. So we exceeded top range of our guidance across the top line and the bottom line for Q4. And going into fiscal 27, as in the new fiscal year we are in, we feel very good about the business. The expectations were high and the expectations were high from the buy side. So there was some sort of disappointment that is currently being played out from the market reaction perspective.

3:22Chirantan Desai:But I can tell you, being speaking to 200 plus customers in last 100 days, I'm a CEO for last 100 days, and I feel very good about the strength of our business. And we always guide Prudent for the year. And that's what we guided. And that's how markets are reacting. CJ, what are you hearing from those customers about Agentic AI and how they might be using that technology to disintermediate or to using open source adoption? I'm curious about, in an AI-led world, how you retain an advantage here and what message you have for investors who are concerned that, yeah, AI is a threat to this company.

4:13Chirantan Desai:So absolutely, Tim, here is what I would start with. First is we are infrastructure software. And infrastructure software is an extremely hard thing to build. And you cannot just use your way to a coding agent to build infrastructure software. And that's what you are seeing with our net retention rate of world-class 121 % in Q4. So that's one thing. When you are infrastructure software, not like other software that may be at the application layer, which is where your concern is, what we are seeing being played out with customers is like a tale of two positive cities. One I would say, enterprises continue to build.

4:55Chirantan Desai:We used an example in our earnings remarks, JPMorgan Chase, real-time applications, many mission-critical application, including emerging AI workloads, are being built on MongoDB. And you contrast that with AI-native companies. I'm in Palo Alto today, right here in Silicon Valley. And you see companies that we mentioned, like 11 Labs, which is crushing it now at$11 billion valuation. You guys were just talking about companies going public, but$11 billion dollar valuation completely built on MongoDB. So whether it's AI native company that is a disruptive force in the software market, or whether it's a large bank or a large healthcare company, or a large retailer building agentic commerce, they are also building on MongoDB.

5:47Chirantan Desai:So far, in customer conversations, I do not hear, hey CJ, do we really need MongoDB? Our business is very strong, both for large enterprises building AI workloads or AI companies where AI is their business right here in Silicon Valley or maybe Seattle or maybe New York City are also building on MongoDB from frontier model companies to domain-specific AI companies that are being built right now.

6:19All right. So, CJ, we get this idea of MongoDB as this foundational data platform for AI. And this is part of why the acquisition of Voyage AI, also Atlas Vector Search. So what percentage of new bookings are specifically AI related? And how are you kind of measuring that native or AI native customer attraction? And when do you expect AI to become a material revenue contributor? And maybe that's what investors are looking for.

6:48Chirantan Desai:Yeah, Carol, you know, this is the question I got asked on the callbacks after our print. And as I stated, we had a fantastic print. And on the guidance, we also gave guidance according to our long-range plan. Okay, so that's one. Given that in the large enterprises scale, we are still seeing a lot of experimentation done being on AI, whether it's airline or retailer or a bank and so on. I haven't seen AI agents at scale. And that's, from my standpoint, on behalf of MongoDB customers, that is an upside to our guidance. That when AI really takes off at an airline or a bank or a retailer or a healthcare company, that would be a tailwind.

7:35Chirantan Desai:Because nobody is concerned about, hey, is MongoDB relevant in AI? We are 100 % relevant in AI. And then I look at AI native companies. What we have stated is they are, you know, most of the AI native companies, including frontier model companies that are using MongoDB today for key use cases, that is today a small percent of our revenue, but growing very fast. And I think the biggest lift we are going to get is that when things are at scale from an inference standpoint, and we would benefit and these companies would benefit too. I think some investors might have questions about organizational changes at the company, like the appointment of Erica Volini as chief customer officer.

8:21What specific changes are being made to the sales organization? How are you thinking about compensation structure differently, customer segmentation strategy? How do you ensure execution continuity during the transition?

8:35Chirantan Desai:Absolutely. So, Tim, I'll start with the first principles. When I think about first principles, MongoDB nailed two key transitions, which makes us, from my standpoint, true AI winner. Number one, they moved to cloud in 2017, starting with AWS and all other hyperscalers followed. Okay, that was in 2017. And about a couple of years ago, they switched to consumption model that you only pay what you use. Sales reps only get paid when customer uses MongoDB Atlas, for example, for whatever data they put in MongoDB Atlas at a database layer. So these two transitions versus a seed-based model and other things is definitely a great thing for us.

9:24Chirantan Desai:We are cloud agnostic as well as we are fully consumption-based. Now on the organization, our retention rate, And this was very important to be 121%, it was 120 % before 119 % a year ago. This improving just shows the durability of our platform. Erica's focus is having worked at iconic companies in the past, is to serve our customers at the highest level as they onboard agentic workloads or core workloads and making sure they get the value out of MongoDB and are successful with our platform. So that's one piece. We are also currently searching for a chief revenue officer. However, Paul is going to be with us through end of quarter one and help us transition through Q2.

10:19Chirantan Desai:While we do the search, we are in the latter stages of the search. However, the leadership team that Paul has for Americas, for Europe, and for Asia Pacific, Japan, I have full confidence in the team. I don't see disruption risk. We have set already annual plans for every salesperson, and no compensation changes.

10:43CJ, just to wrap up here, and again, I'm looking at shares. They were down as much as 29 % today, still down about 20 % off their lows, But nonetheless, investors still overwhelmingly selling here. I'm just curious. I want to go back to your conservative guidance because maybe there is some clarification. What level of conservatism is embedded in this fiscal year 2027 outlook? And what are the key variables that could drive the upside? Because I think folks were surprised that this guidance, which you say tends to be conservative, was on the back of improved net revenue retention rates, which improved 121 % in the fourth quarter versus 119, 120 in the previous quarter.

11:24So I think people are trying to square this, that there was improvement there, and yet here's the conservatism. So how conservative are you being in this fiscal year outlet? Maybe that might help in terms of clarifying some stuff for investors.

11:42Chirantan Desai:Carol, thank you for asking that question. One of the interesting things we saw was that when we guided, they said the midpoint of our guidance was below consensus. The midpoint of our guidance was below consensus. We thought that they would look at our high range of the guidance, which was right at consensus for fiscal year 27. So that's point number one. Point number two, the visibility, of course, in a consumption business, we have very good visibility for next two quarters. And, you know, as we plan out the year, we feel pretty good about our forecasting. But, Carol, to answer your question, like the AI tailwinds.

12:25Chirantan Desai:When I say AI tailwinds, AI companies are building on MongoDB or enterprises are building agents on MongoDB. But they are not scaling as in they're figuring out their own on how AI can scale. But as they scale, that benefit is not baked into our guidance. Okay. So that's number one. And as we continue to execute, we decided with what we just talked about with the sales leadership change as well, to be prudent rather than over our skills.

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