MongoDB (NASDAQ: MDB) delivered a quarter that makes the bull case easy to write. Revenue hit $771.8M, growing 30% year-over-year—the highest rate in several years and well past the $735M consensus. Non-GAAP EPS of $1.90 cleared the $1.61 estimate by 18%. The company raised its full-year FY2027 guidance, pointing to Atlas momentum for the H2 increase.
The headline numbers are strong. The mechanics matter more. Atlas revenue grew 29% YoY, roughly in line with the prior quarter. Enterprise Advanced & other revenue jumped 36%, accelerating from Q1's 28%. That EA acceleration signals the on-premise installed base is expanding again, not just migrating to cloud. Total subscription revenue reached $747.1M, up 31% YoY, with services adding $24.6M.
Gross margin expanded to 74% GAAP (76% non-GAAP) from 71% GAAP (74% non-GAAP) a year ago. The 200bps of GAAP gross margin expansion came despite a mix shift toward Atlas, which carries lower margins than Enterprise Advanced. This suggests MongoDB is gaining efficiency in its cloud delivery costs faster than expected. Non-GAAP operating margin hit 24%, up from 15% a year ago—a 900bp expansion showing operating leverage across sales, R&D, and G&A.
Profitability is real. MongoDB posted its third consecutive quarter of GAAP net income: $40.9M, or $0.50 per diluted share, compared to a $47M loss a year ago. Free cash flow nearly doubled to $137.6M from $69.9M, an 18% FCF margin. The company holds $2.4B in cash and short-term investments with no debt. A fortress balance sheet.
Remaining performance obligations surged 91% YoY to $1.52B; current RPO climbed 73% to $797M. That metric is the release's strongest forward indicator. A 91% RPO growth rate on 30% revenue growth implies larger, longer-duration deals, giving revenue visibility into FY2028. Customers over $100K in ARR reached 2,999, up from 2,564 a year ago—a 17% increase tracking the RPO expansion.
Management raised full-year FY2027 revenue guidance to $2.99B-$3.03B, implying ~24% growth at the midpoint. The Q3 guide of $756M-$761M suggests ~22% YoY growth, a slight deceleration from Q2's 30% but still above the company's historical mid-teens rate. Non-GAAP operating income guidance for the year was raised to $616.3M-$636.3M, implying a 21% margin at the midpoint.
The guidance raise is telling. Management explicitly attributed the H2 increase to Atlas, meaning the cloud business is not just sustaining its growth but accelerating in absolute dollar terms. The Q3 guide implies Atlas revenue of roughly $560M at the midpoint, ~27% YoY growth. That's a deceleration from Q2's 29%, but the base is larger and the absolute dollar additions remain impressive.
The AI narrative is present but not yet material. CEO CJ Desai highlighted "early momentum with AI use cases" and the launch of retrieval capabilities including Vector Search in Enterprise Advanced. MongoDB also launched the Atlas Managed MCP Server, connecting coding agents to live Atlas data. Product announcements, not revenue drivers yet, but they position MongoDB for the next AI development cycle.
What to watch next: the pace of Atlas consumption growth and whether Enterprise Advanced can sustain its acceleration. The 91% RPO growth should translate into revenue over the next 12-18 months. If MongoDB can maintain 25%+ revenue growth while expanding margins, the stock's multiple compression narrative may shift. The Q3 guide suggests management is being cautious, but the Q2 beat and raise give them room for upside.