MongoDB CEO on Concerns About Weak Forecast

Summary

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Bloomberg Businessweek Podcast Summary

Episode: MongoDB CEO on Concerns About Weak Forecast
Date: March 4, 2026
Hosts: Carol Massar and Tim Stenovec
Guest: CJ Desai, CEO of MongoDB

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Episode Overview

This episode delves into MongoDB's recent earnings report, which led to a sharp drop in its stock price due to a weaker-than-expected forecast. CEO CJ Desai joins hosts Carol Massar and Tim Stenovec to explain the underlying business results, address investor concerns about AI disruption, clarify the company’s conservative guidance, and discuss recent organizational changes amid a pivotal moment for infrastructure software companies navigating the new AI landscape.

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Key Discussion Points & Insights

1. Addressing the Market's Reaction and Outlook (01:41 – 03:36)

• Performance Highlights:
  • MongoDB reported a strong Q4: 27% revenue growth, 23% operating margin, and 29% growth in the Atlas cloud business.
  • Net revenue retention reached 121%, signaling robust customer expansion.
• Market Expectations:
  • Despite beating guidance on both top and bottom lines, the stock saw a record drop due to elevated market expectations.
  • CJ Desai, CEO for only 100 days, reassures:

    "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." (02:18)

2. MongoDB’s Position in the AI Landscape (03:36 – 06:10)

• AI as Opportunity, Not Threat:
  • Tim Stenovec presses on investor worries about AI as a competitive threat.
  • Desai responds that infrastructure software cannot be simply replaced by AI agents or open-source projects, highlighting MongoDB’s deep, foundational value.
  • Broad AI adoption: Both established enterprises (e.g., JP Morgan Chase) and rising AI-native companies (e.g., 11 Labs) are building critical workloads on MongoDB.
  • Memorable quote on sector resilience:

    "Infrastructure software is an extremely hard thing to build and you cannot just use your way to a coding agent to build infrastructure software." (04:04)

  • MongoDB’s role spans from “frontier model companies to domain-specific AI companies.”

3. AI Revenue Contribution & Customer Use Cases (06:10 – 08:03)

• Monetization Timing:
  • When pressed on what percentage of new bookings are AI-related, Desai reports:
    • Enterprises: Still in experimentation phase; AI not yet adopted at scale.
    • AI-Native Startups: Small but rapidly growing contributor to revenues; major upside expected as AI deployments scale.
  • Value affirmation:

    “Nobody is concerned about, 'hey, is MongoDB relevant in AI?' We are 100% relevant.” (06:39)

  • Future outlook: The largest revenue lift will come once customer AI projects move into large-scale inference and production.

4. Organizational Changes and Continuity (08:03 – 10:34)

• Key Leadership Changes:
  • Appointment of Erica Vallini as Chief Customer Officer to maximize customer success amid AI transitions.
  • Ongoing search for a new Chief Revenue Officer, with smooth transition plans and continuity ensured by existing leadership.
• Sales Structure Evolution:
  • MongoDB’s key strategic shifts:
    • Early move to the cloud (2017) and then to a consumption-based pricing model.
    • Sales compensation is now usage-based, aligning incentives with actual customer value.
  • Stability assurances:

    "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." (10:34)

5. Clarifying “Conservative” Guidance and Key Upside Drivers (10:34 – 12:51)

• Guidance Philosophy:
  • Fiscal 2027 guidance midpoint was set below consensus, but the high end matched market expectations.
  • Desai clarifies that AI-driven upside is not baked into forecasts due to current uncertainty around AI scaling in customer organizations.
  • Key quote explaining the rationale:

    "AI companies are building on MongoDB or enterprises are building agents on MongoDB, but they are not scaling... as they scale, that benefit is not baked into our guidance." (11:33)

  • The company is intentionally prudent amid sales leadership transition and evolving market dynamics.

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Notable Quotes & Memorable Moments

• CJ Desai on Infrastructure Resilience:

  "You cannot just use your way to a coding agent to build infrastructure software." (04:04)

• CJ Desai on AI Relevance:

  "We are 100% relevant in AI." (06:39)

• On Enterprise vs. AI-Native Adoption:

  "Enterprises are still experimenting on AI... AI-native companies are a small percent of our revenue but growing very fast." (06:39)

• On Prudent Outlooks:

  "We always guide prudent for the year and that's what we guided and that's how markets are reacting." (02:18)
  "That benefit [from AI scaling] is not baked into our guidance." (11:33)

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Important Timestamps

• 01:41 — Episode content begins; context for MongoDB’s sharp stock drop.
• 02:18 — CJ Desai explains Q4 numbers and company outlook.
• 03:36 — Discussion of AI’s impact and MongoDB’s defense against AI commoditization.
• 04:04 — Value of infrastructure software, net retention rates, customer case studies (JP Morgan Chase, 11 Labs).
• 06:10 — AI-specific bookings and customer traction; potential AI-driven growth trajectory.
• 08:03 — Organizational changes, new Chief Customer Officer, sales structure updates.
• 10:34 — Transition risk management and executive search status.
• 11:33 — Addressing “conservative” guidance and what could drive upside.

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Summary

This episode offers a comprehensive look at MongoDB’s current challenges and resilience. CEO CJ Desai highlights the company’s strong underlying business, its integral role in the AI ecosystem, and the rationale behind setting prudent forecasts despite growth in customer engagement. He addresses concerns over AI-driven disruption and clarifies that while AI adoption is still at the experimentation stage in most large enterprises, MongoDB is well-placed to capture future upside. Leadership and sales strategy transitions are underway, but Desai emphasizes stability and continuity. The episode is candid, data-driven, and forward-looking, making it essential listening for investors and tech industry watchers alike.

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Transcript

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[Tim Stanvak]

You're listening to Bloomberg businessweek with Carol

[CJ Desai]

Massar and Tim Stanvak on Bloomberg Radio.

[Carol Massar]

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 scare trade or what people are calling it. Joining us right now to talk about the company is MongoDB 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?

[CJ 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 when I think about that and also add net retention rate was 121% as in our customers that 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. 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. Reacting.

[Tim Stanvak]

Cj CJ what are you hearing from those customers about agentic AI and how they might be using that technology to disintermediate or to you know, grabbing like open using open source adoption. I'm curious about like 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.

[CJ 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 tale of two positive cities. One, I would say enterprises continue to build. We used an example in our earnings remarks. JP Morgan 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 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 health care company or a large retailer building agentic commerce, they are also building on MongoDB. So so far chairman 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.

[Carol Massar]

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

[CJ Desai]

Yeah, 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, Carolina, 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 I really take so at an airline or a bank or a retailer or a health care company, that would be a tailwind 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 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.

[Tim Stanvak]

I think some investors might have questions about organizational changes at the company, like the appointment of Erica Vallini as chief Customer officer. What 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?

[CJ 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. 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 percent it was 120% before 119% a year ago. This improving just shows the durability of our platform. Okay. 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. Paul is going to be with us through end of quarter one and help us transition through Q2 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.

[Carol Massar]

CJ 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 conservative 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. So I think people are trying to square this, that there was improvement there. And yet here's the conservative. So how much, how conservative are you being in this fiscal year outlook? Maybe that might help in terms of clarifying some stuff for investors.

[CJ 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. Okay. 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 as we plan out the year, we feel pretty good about our forecasting. But Kel, to answer your question like the AI tailwinds. 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 are 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 overarching.

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