Earnings Call
MongoDB, Inc. (MDB)
Earnings Call Transcript - MDB Q4 2025
Operator, Operator
Good day, and welcome to MongoDB's Q4 Fiscal Year 2025 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Brian Denyeau from ICR. Please go ahead.
Brian Denyeau, IR
Thank you, Sherry. Good afternoon, and thank you for joining us today for MongoDB's fourth quarter fiscal 2025 financial results, which we announced in our press release issued after the close of the market today. Joining me on the call today are Dev Ittycheria, President and CEO of MongoDB; and Serge Tanjga, MongoDB's Interim CFO. During this call, we will make forward-looking statements, including statements related to our market and future growth opportunities, our opportunity to win new business, our expectations regarding Atlas consumption growth, the impact of our non-Atlas business, the long-term opportunity of AI, the opportunity of application monetization, our expectations regarding our win rates and sales force productivity, our financial guidance and underlying assumptions, and our plan to invest in growth opportunities in AI. These statements are subject to a variety of risks and uncertainties, including the results of operations and financial conditions that cause actual results to differ materially from our expectations. For a discussion of material risks and uncertainties that could affect our actual results, please refer to the risks described in our quarterly report on Form 10-Q for the quarter ended October 31, 2024, filed with the SEC on December 10, 2024. Any forward-looking statements made on this call reflect our views only as of today, and we undertake no obligation to update them, except as required by law. Initially, we will discuss non-GAAP financial measures on this conference call. Please refer to the table in the earnings release on the Investor Relations portion of our website for a reconciliation of these measures to the most directly comparable GAAP financial measure. With that, I'd like to turn the call over to Dev.
Dev Ittycheria, CEO
Thanks, Brian, and thank you to everyone for joining us today. I'm pleased to report that we had a good quarter and executed well against our large market opportunity. Let's begin by reviewing our fourth quarter results before giving you a broader company update. We generated revenue of $548.4 million, a 20% year-over-year increase and above the high end of our guidance. Atlas revenue grew 24% year-over-year, representing 71% of revenue. We generated non-GAAP operating income of $112.5 million for a 21% non-GAAP operating margin. We ended the quarter with over 54,500 customers. For the full year, we crossed the $2 billion revenue mark while growing 19% and are roughly 20 times the size we were the year before we went public. Overall, we were pleased with our fourth quarter performance. We had a healthy new business quarter led by continued strength in new workload acquisition within the existing Atlas customers. In addition, we again benefited from a greater than expected contribution from multi-year non-Atlas deals. Moving on to Atlas consumption. The quarter played out better than our expectations with consumption growth stable compared to the year-ago period. Serge will discuss consumption trends in more detail. Finally, retention rates remained strong in Q4, demonstrating the quality of our product and the mission-criticality of our platform. As I look into fiscal '26, let me share with you what I see as the main drivers of our business. First, we expect another strong year of new workload acquisition. As we said many times in the past, in today's economy, companies build competitive advantage through custom-built software. In fiscal '26, we expect that customers will continue to gravitate towards building their competitive differentiation on MongoDB. Second, we expect to see stable consumption growth for Atlas in fiscal '26 compared to fiscal '25. Usage growth to start fiscal '26 is consistent with the environment we have seen in recent quarters. This consistency, coupled with an improved fiscal '25 cohort of workloads gives us confidence that Atlas will continue to see robust growth as it approaches a $2 billion run rate this year. Third, as Serge will cover in more detail, we expect our non-Atlas business will represent a meaningful headwind to our growth in fiscal '26 because we expect fewer multi-year deals and because we see that historically non-Atlas customers are deploying more of the incremental workloads on Atlas. Fourth, we are very excited about our long-term opportunity in AI, as I will explain a bit later. In fiscal '26, we expect our customers will continue on their AI journey from experimenting with new technology stacks to building prototypes to deploying apps in production. We expect the progress to remain gradual as most enterprise customers are still developing in-house skills to leverage AI effectively. Consequently, we expect the benefits of AI to be only modestly incremental to revenue growth in fiscal '26. Fifth, we'll continue scaling our application modernization efforts. Historically, this segment of the market was not widely available to us because of the effort, cost, and risk of modernizing old and complex custom applications. In fiscal '25, our pilots demonstrated that AI tooling combined with services can reduce the cycle time of modernization. This year, we'll expand our customer engagements so that app monetization can meaningfully contribute to our new business growth in fiscal '27 and beyond. For example, we successfully modernized our financial application for one of the largest ISVs in Europe, and we're now in talks to modernize the majority of the legacy estate. As I take a step back, I see fiscal '26 as a year of solid Atlas growth, enabled by a large market, superior product, and strong go-to-market execution. We expect continued strong win rates as we acquire incremental workloads across our customer base. We will continue building on our core land-expand go-to-market motion to further accelerate workload acquisition. In fiscal '25, we saw improved sales force productivity, and we are forecasting continued improvements in fiscal '26. In addition, we will continue investing to become a standard in more of our accounts. We are not market constrained, even in our largest accounts. For example, we finished the year with 320 customers with over $1 million in ARR, a year-over-year growth rate of 24%. This reinforces our move up market. To that end, in fiscal '26, we will make significant incremental investments in our strategic accounts program. Looking beyond fiscal '26, I'm incredibly excited about our long-term opportunity, particularly our opportunity to address the expanded requirements of a database in the AI era. Let me tell you what we're seeing in our customer base as they work to adopt AI. AI is ushering in a new era of accelerated change and every company will have to adapt. We are witnessing a once-in-a-generation shift that will fundamentally reshape industries, accelerate the pace of innovation and redefine competitive dynamics in ways we've never seen before. The winners will be those companies that can transform and adapt quickly to the new pace of change. Those that cannot, will fall rapidly behind. AI is transforming software from a static tool into a dynamic decision-making partner. No longer limited to pre-defined tasks, AI-powered applications will continuously learn from real-time data. However, this software can only adapt as fast as the data infrastructure it is built on, and legacy systems simply cannot keep up. MongoDB was built for change. MongoDB was designed from the outset to remove the constraints of legacy databases, enabling businesses to scale, adapt and innovate at AI speed. Our flexible document model handles all types of data while seamless scalability ensures high performance for unpredictable workloads. With the Voyage AI acquisition, MongoDB makes AI applications more trustworthy by pairing real-time data and sophisticated embedding and retrieval models that ensure accurate and relevant results. We also simplify AI development by natively including vector and text search directly in the database, providing a seamless developer experience that reduces cognitive load, system complexity, risk, and operational overhead, all with the transactional, operational, and security benefits intrinsic to MongoDB. But technology alone isn't enough. MongoDB provides a structured solution-oriented approach that addresses the challenges customers have with the rapid evolution of AI technology, high complexity, and a lack of in-house skills. We are focused on helping customers move from AI experimentation to production faster with best practices that reduce risk and maximize impact. Our decision to acquire Voyage AI addresses one of the biggest problems customers face when building and deploying AI applications: the risk of hallucinations. AI-powered applications excel where traditional software often falls short, particularly in scenarios that require nuanced understanding, sophisticated reasoning, and interaction in natural language. This means they are uniquely capable of handling tasks that are more complex and open-ended. However, AI models are probabilistic, not deterministic, so they can hallucinate or generate fallacies from misleading information. This creates serious risks. Imagine a financial services agent that autonomously allocates capital on behalf of its customers or a cancer screening application in the hospital that analyzes scans to detect early signs of pancreatic cancer. For any mission-critical application, inaccurate or low-quality results are simply not acceptable. The best way to ensure accurate results is through high-quality data retrieval, which ensures that not only the most relevant information is extracted from an organization’s data with precision but also that high-quality retrieval is enabled by vector embedding and reranking models. Voyage AI’s embedding and reranking models are among the highest rated in the Hugging Face community for retrieval, classification, clustering, and reranking, and are used by AI leaders. With this acquisition, MongoDB will offer best-in-class embedding and reranking models to power native AI retrievable. Put simply, MongoDB democratizes the process of building trustworthy AI applications right out of the box.
Serge Tanjga, CFO
Thanks, Dev. I'll begin with a detailed review of our fourth quarter results and then finish with our outlook for the first quarter and full fiscal year 2026. First, I will start with our fourth quarter results. Total revenue in the quarter was $548.4 million, up 20% year-over-year and above the high end of our guidance. Shifting to our product mix, let's start with Atlas. Atlas grew 24% in the quarter compared to the previous year and now represents 71% of total revenue compared to 68% in the fourth quarter of fiscal 2024 and 68% last quarter. Atlas revenue is recognized primarily based on customer consumption of our platform, and that consumption is closely related to end-user activity of their applications. Let me provide some context on Atlas consumption in the quarter. In Q4, consumption was ahead of our expectations. If we compare this year's Q4 with Q4 fiscal year '24, both usage and consumption growth were stable on a year-over-year basis. While this is only one quarter and consumption trends around the holidays can be particularly volatile, we are encouraged to see signs of stability in consumption growth. Turning to non-Atlas revenue. Non-Atlas came in ahead of our expectations, in part due to greater than expected contribution from multi-year deals, as Dev mentioned. Due to ASC 606, we recognized the entire term license component of a multi-year contract at the start of that contract. This multi-year license revenue benefit was over $10 million more than was contemplated in our Q4 guidance. We realize that ASC 606 introduces increased variability into our non-Atlas revenue, making it harder to understand underlying trends. To address that, we wanted to provide some incremental color. If we look at non-Atlas ARR growth rather than revenue, in Q4 of fiscal year '25, the growth was in the mid-single digits year-over-year compared to low double-digit growth in the year-ago period. We observed that customers who are predominantly non-Atlas historically are deploying a growing share of incremental workloads on Atlas. During the fourth quarter, we grew our customer base by approximately 1,900 sequentially, bringing our total customer count to over 54,500, which is up from over 47,800 in the year-ago period. Of our total customer count, over 7,500 are direct sales customers, which compares to over 7,000 in the year-ago period. The growth in our total customer count is being driven primarily by Atlas, which had over 53,100 customers at the end of the quarter compared to over 46,300 in the year-ago period. In Q4, our net ARR expansion rate was approximately 118%. The decline versus the historical period is attributable to a smaller contribution from expanding customers. We ended the quarter with 2,396 customers with at least $100,000 in ARR and annualized MRR, up from 2,052 in the year-ago period. As Dev mentioned, we also finished the year with 320 customers spending $1 million or more annualized on our platform compared to 259 a year ago. Moving down the income statement. I will be discussing our results on a non-GAAP basis unless otherwise noted. Gross profit in the quarter was $411.7 million, representing a gross margin of 75%, which is down from 77% in the year-ago period. Our year-over-year gross margin decline is driven in part by Atlas growing as a percent of the overall business. Our income from operations was $112.5 million or a 21% operating margin for the fourth quarter compared to a 15% margin in the year-ago period. Our operating income results versus guidance benefited from our revenue outperformance. In addition, we benefited from timing of hiring around year-end. Net income in the fourth quarter was $108.4 million, or $1.28 per share based on 84.6 million diluted weighted average shares outstanding. This compares to a net income of $71.1 million or $0.86 per share on 82.9 million diluted weighted average shares outstanding in the year-ago period. Turning to the balance sheet and cash flow. We ended the fourth quarter with $2.3 billion in cash, cash equivalents, short-term investments, and restricted cash. During Q4, we also completed the redemption of our 2026 convertible notes, and as a result, our balance sheet is debt-free. Operating cash flow in the fourth quarter was $50.5 million, after taking into consideration approximately $27.6 million in capital expenditures and principal repayments of finance lease liabilities. Free cash flow was $22.9 million in the quarter. This compares to free cash flow of $50.5 million in the year-ago period. Our Q4 CapEx included approximately $24 million for the purchase of IPv4 addresses, as we discussed previously. This concludes our IPv4 address purchases. I'd now like to turn to our outlook for the first quarter and full fiscal year 2026. For the first quarter, we expect revenue to be in the range of $524 million to $529 million. We expect non-GAAP income from operations to be in the range of $54 million to $58 million and non-GAAP net income per share to be in the range of $0.63 to $0.67 based on 86 million estimated diluted weighted average shares outstanding. For full fiscal year 2026, we expect revenue to be in the range of $2.24 billion to $2.28 billion, non-GAAP income from operations to be in the range of $210 million to $230 million and non-GAAP net income per share to be in the range of $2.44 and $2.62 based on 87.3 million estimated diluted weighted average shares outstanding. Note that the non-GAAP net income per share guidance for the first quarter and full fiscal year 2026 include a non-GAAP tax provision of approximately 20%. I'll now provide some more context on our guidance, starting with the full year. First, as Dev mentioned, we expect roughly stable Atlas consumption growth compared to fiscal year '25. Atlas consumption will benefit from stronger contributions from workloads acquired in fiscal year '25 compared to the contribution that fiscal year '24 workloads had last year. We made changes to sales compensation plans at the start of last year to focus more on the size of new workloads acquired, and we believe that those changes are having the desired impact. Second, we expect our non-Atlas subscription revenue will be down in the high-single digits for the year. The primary reason is that we expect an approximately $50 million headwind from multi-year license revenue in fiscal year '26, an estimate that is based on a bottom-up analysis of our non-Atlas renewal base. Simply put, after two years of very strong multi-year performance, we expect the mix of multi-year non-Atlas revenue to not only be lower than the last two years, but also below historical trends. This is due to the fact that in fiscal year '26, we have a more limited set of large non-Atlas accounts that can sign multi-year deals. Finally, I wanted to provide some context to better understand our operating margin guidance. We expect operating margin of 10% at the midpoint of the range, down from 15% that we reported in fiscal year '25. There are three primary reasons for the margin decline. First, the $50 million of fiscal year '25 multiyear license revenue that won't repeat in fiscal year '26 is very high margin, making for a difficult margin compare. This will primarily impact the second half of the year. Second, we are investing aggressively in R&D, inclusive of the recently announced acquisition of Voyage AI. We see an opportunity to further distance ourselves from the competition in terms of performance and scalability and to redefine what it means to be a database in the age of AI. Third, we are increasing our marketing investments, specifically to drive improved awareness and understanding of MongoDB's capabilities. Our goal is to better educate new and existing customers on the full power of our platform and highlight the widening gap between us and the legacy competitors. Moving on to our Q1 guidance, a few things to keep in mind. First, we expect Atlas revenue to be flat to slightly up sequentially. Please note that Q1 has three fewer days than Q4. Also, the typical seasonally slower Atlas consumption growth during the holidays has a bigger impact on incremental Q1 revenue than it did in Q4, thereby negatively impacting sequential revenue growth. Second, we expect to see a meaningful sequential decline in EA revenue. As discussed in the past, Q4 is our seasonally highest quarter in terms of our EA renewal base, which is a strong indicator of our ability to win new EA business. In Q1, the EA renewal base is sequentially much lower. Third, we expect operating income to decline sequentially due to the lower revenue as well as our increased pace of hiring. Finally, let me address how the acquisition of Voyage AI will impact our financials. We disclosed last week that the total consideration was $220 million. Most Voyage shareholders received their consideration in MongoDB stock with only $20 million being paid out in cash. To offset the dilutive impact of the acquisition, today we are announcing that our Board has authorized a $200 million stock buyback. In fiscal year '26, we expect an immaterial amount of revenue from the acquisition as we work to expand the reach of the technology and integrate it into the MongoDB database. On the expense side, we attempt to grow the Voyage team to accelerate innovation and help with integration. These expenses will show up in the R&D line in our income statement and will be modestly dilutive to operating margin for the year. To summarize, MongoDB delivered strong fourth quarter results. We are pleased with our ability to win new business and see stable consumption trends in Atlas. We remain incredibly excited about the opportunity ahead, and we'll continue to invest responsibly to maximize our long-term value.
Operator, Operator
Thank you. One moment for our next question. And that will come from the line of Raimo Lenschow with Barclays. Your line is open.
Raimo Lenschow, Analyst
Perfect. Thank you, and two quick questions from me. One is, on the multi-year guidance or the multi-year situation, like, if you look at this quarter and the quarters before, you overperformed there. The guidance is obviously, you're expecting slightly weaker because you have a lower renewal portfolio. Is it just a portfolio or do you see a change in trend? So is it just a mechanical problem or is there also a change in behavior? And then I had one follow-up.
Serge Tanjga, CFO
Yeah. So Raimo, why don't I take that one. Thank you for the question. In fiscal year '24, we had exceptionally strong multi-year performance led by our Alibaba deal. And going into fiscal year '25, we expected a $40 million headwind based on the assumption that fiscal year '25 would be in line with long-term trends. Instead, after a strong Q3 and Q4, the ultimate headwind was significantly lower than that $40 million. And that creates the renewal base effect that sets us up for fiscal year '26. So what I mean by that is, because we've done so many more multi-year deals in fiscal year '24 and '25, the renewal base and the opportunity is just much lower to begin with. So it’s not a change in trends. In fact, we assume the same conversion rates as historically; it’s just the opportunity set is lower in fiscal year '26.
Raimo Lenschow, Analyst
Okay. Perfect. And then if you think about the Voyage acquisition, how do you need to think about that in terms of getting that into the organization and into the market? Is that kind of going to be like an attachment to what you were doing or do you think it's going to be sold broader than just into the MongoDB installed base? Thank you.
Serge Tanjga, CFO
Thanks, Raimo. I'll take that question. Today, Voyage AI does offer its models to other third parties, and we will continue to do that. We think it's important for people to have access to the best-in-class models. We also believe that this will be a great way to bring people new to MongoDB into the MongoDB sphere, and that will be in the short to medium term a better-together story where we will basically integrate Voyage AI into the MongoDB platform and do things like auto embeddings where data will be embedded as soon as it’s basically entered into a MongoDB platform, which will make a developer's life that much easier versus having to go to some third-party to get the data embedded and then to use our vector store. And then we have a bunch of other things that we plan to do in terms of the product roadmap, in terms of more sophisticated models, more domain-specific models, etc. We'll talk about that in future calls. But we do want to make this available to all customers, including people who are not MongoDB customers today, and we think that's good for the business long-term.
Operator, Operator
Thank you. One moment for our next question. And that will come from the line of Sanjit Singh with Morgan Stanley. Your line is open.
Bob Dion, Analyst
Thank you, everyone. I have Dion here in place of Sanjit. To start, I'd like to follow up on Raimo's question about Voyage AI. Can you elaborate on the reasons behind your decision to acquire Voyage AI? Specifically, what limitations in your current portfolio were hindering existing or new customers that this technology can now address? Additionally, regarding your guidance for operating expenses related to recent investments, you mentioned reallocating investments last quarter. I would like to know what has changed in the past 90 days that led to these additional investments, especially considering you were aware of factors like the $50 million loss around that time. What prompted the shift in strategy?
Dev Ittycheria, CEO
I’ll start by addressing the Voyage AI question, and then I’ll pass it to Serge to discuss OpEx. Looking at it from a customer’s perspective, one of the main concerns for customers in deploying mission-critical AI applications is the risk of inaccuracies. Because AI systems operate on probabilities, you can’t always guarantee their outputs. In regulated industries, like financial services or healthcare, where precise responses are crucial, this uncertainty hinders the adoption of production-level AI use cases. We acquired Voyage AI to provide embedding and reranking models. To explain this, think of the LLM as the brain and the database as your memory, representing the current state of knowledge. Imagine you have a highly intelligent individual, like Albert Einstein, to whom you pose a specific question. While he may need to gather information before answering, you wouldn’t want him to read every book in the library. The embedding models act like a librarian, guiding Einstein to the relevant section, aisle, shelf, book, chapter, and page to gather the precise information needed for a high-quality response. Utilizing embedding models offers significant performance improvements, and various embedding models exist, with Voyage AI’s models ranking among the best on Hugging Face. We’ve heard from many ISVs since the acquisition who switched to Voyage from other model providers and experienced superior performance. The advantage of Voyage is in enhancing the quality and trustworthiness of the AI applications that businesses are developing for highly demanding and mission-critical use cases.
Serge Tanjga, CFO
Yeah. And I'll take the OpEx question. So you're absolutely right. We are both reallocating and reinvesting at the same time. 90 days ago, we talked about some reallocations in our sales and marketing line where we're reducing our investment in the mid-market in order to deploy those resources in the upmarket. We also talked about discontinuing or deemphasizing a few products so that we can focus more on the remaining portfolio where we see the traction and opportunity. We are investing over and above what we're reallocating, and that was the plan all along. And the reason for that is because of the opportunity that we see. You've heard Dev talk in his prepared remarks about the unique opportunity that AI will present for people to revisit their infrastructure stack. We see that as a unique once-in-a-lifetime opportunity that we want to capitalize on. We don't want to sit here five years from now and wonder whether we invested enough to fully maximize our long-term opportunity. What gives us comfort in this investment is our margins track record. If you go back and take a step back and go back as far as the IPO, our margins were negative 30%. We've come a long way in terms of growth and margin expansion. Even if you look more recently over the last couple of years, at the moments when we slowed investments, we saw margins spike including, frankly, in Q4, where we printed a 21% operating margin, which is in line with our long-term guidance. We have confidence that the economics of the business are strong and that the business scales, but it’s about investing at the right moment in time and the conviction that we have to really play offense and optimize on our opportunity.
Operator, Operator
Thank you. One moment for our next question. And that will come from the line of Mike Cikos with Needham. Your line is open.
Mike Cikos, Analyst
Hey, everyone. Thank you for answering my questions. I wanted to revisit the Atlas consumption trends and their current state. I'm curious about the full year outlook, as you've mentioned that the most recent quarters have influenced how consumption is evolving. Is there anything particular about Q4 consumption that contributed to this growth dynamic? I'm interested to know if it's due to the improved sales initiatives within the cohort you're targeting, or if there are other factors you could highlight.
Serge Tanjga, CFO
Yeah. I'll take the first one on that, Mike. First of all, as we've discussed in the past, it's sort of the seasonally slowest quarter of the year in terms of consumption growth because we do see both usage and consumption slowdown around the holidays, and we saw that happen. Q4 consumption was lower than Q3, reflecting that typical volatility around the holiday season. When it comes to stable consumption growth in fiscal year '26, I would break consumption in three components. The first is the basis cells, which is obviously the largest, driving the percentage rate because it's just the oldest workload. That's Layer 1. The second layer is workload from the prior year. Those workloads in the current year are meaningful and are still growing. In any given year, we need the workloads of the prior year and the workloads of the current year to offset the growing base effect. Last year, we were not able to do that for three reasons. Number one is the base itself slowed down, which was a macro phenomenon we called out in Q1. Secondly, fiscal year '24 workloads didn't meet our expectations going into fiscal year '25. Thirdly, new workloads in fiscal year '25 were off to a slow start slightly for operational reasons, and that was a headwind we faced for the rest of the year. Turning the calendar forward for this year, we are calling for a stable macro environment and usage growth in the base. We don't have a crystal ball, but that's what we see currently. We're also expecting more from fiscal year '25 workloads. We're optimistic about those based on the data we have. And because of our move-up market, we expect to get more new workload ARR and sales productivity in fiscal year '26. Because of that, we can offset the fact that the base is larger than it was a year ago, resulting in stable consumption growth.
Mike Cikos, Analyst
Thank you for that, Serge, really appreciated. And for a follow-up here. I know that we're citing this $50 million multiyear headwind as it relates to the non-Atlas business. Can you chunk that up? If I'm thinking about Q1, Q2, is there any way you can help us get a sense of what those headwinds are on a quarter-by-quarter basis?
Serge Tanjga, CFO
It's sort of the mirror image of the outperformance that we've seen in Q3 and Q4 that we called out. And so, I would think of it as a back-half weighted phenomenon.
Operator, Operator
Thank you. One moment for our next question. And that will come from the line of Brent Bracelin with Piper Sandler. Your line is open.
Brent Bracelin, Analyst
Thank you. Good afternoon. I wanted to double click into Atlas. If we normalize for the unused credits last year, the implied Atlas growth here in the low-20s is actually a bit of a bigger step down in growth. So could you just revisit the growth levers as we think about Atlas here? I know it's a larger business going into this year than last, but it does look like normalized growth after accounting for the unused credits last year is decelerating a little bit more? Just curious why.
Serge Tanjga, CFO
Yeah. I'm going to go through the puts and takes a little bit, but I think it will help with the math. So the first thing I would reiterate is that on average, we expect consumption growth in fiscal year '26 to be stable with what we've seen in fiscal year '25. So that's point number one. Point number two is, you have the total guidance and then you can take the high-single digit rate of decline in the non-Atlas business, and that will give you a sense of what's left in Atlas, and that fits with the roughly stable Atlas consumption growth in fiscal year '26. The final thing I would say is, as you think about the growth in fiscal year '25, just a reminder that what matters is the exit rate as opposed to the average throughout the year; we have seen revenue slow down on a year-over-year basis because we have had slower consumption growth in all quarters except Q4 of last year.
Brent Bracelin, Analyst
Got it. And then, Dev, as a follow-up for you. We've seen AI workloads, I would argue, in the experimental phase for the last two years. We're now seeing AI go into production, starting to see early signs of some of these agentic functions show up in revenue. What's your expectation as you think about customer conversations, customers that are in experimentation going to production? When do you expect to see a bit of a lift there on your business?
Dev Ittycheria, CEO
We have some notable AI companies building on top of Atlas, although I'm unable to disclose their names. Generally, I believe that customers' AI journeys will be gradual. One reason for this is the lack of AI skills within their organizations, as they often face challenges due to limited experience, alongside the rapid pace of AI technology evolution. Additionally, there is significant concern regarding the trustworthiness of many of these applications. Currently, the use cases are relatively straightforward, such as customer chatbots and basic document summarization or agentic workflows. However, as we are still in the early stages, I anticipate that complexity will grow as people become more comfortable with AI. Architecturally, we hold a considerable advantage over our competitors because our document model accommodates various data types - structured, semi-structured, and unstructured. We also integrate search and Vector Search into our platform, which is unique to us. With the launch of Voyage AI, we offer the most precise embedding and reranking models to tackle quality and trust issues. All of this will be packaged into a seamless developer experience that minimizes friction and allows rapid advancement. Therefore, we feel very well positioned for this opportunity and are excited about the potential that Voyage presents for us.
Operator, Operator
Thank you. One moment for our next question. And that will come from the line of Karl Keirstead with UBS. Your line is open.
Karl Keirstead, Analyst
Thanks. Dev, on the last call and even the prior one, you talked quite a bit about this go-to-market pivot where you were pushing MongoDB to go after more opportunities upmarket. To what extent is that go-to-market transition reflected in your guidance? Are you assuming some upside from that effort in your revenue guidance? And conversely, does that require a decent amount of sales investments that might be a factor in your margin guidance, and how is that effort going at a high level? Thank you.
Dev Ittycheria, CEO
Yeah. Thanks for the question, Karl. We’re really pleased with the progress we're making as evidenced by just even the data point we shared on the $1 million customers. I mean, that customer count is growing faster than our overall customer base. We’re already seeing dividends from the investors we are making up market. We did see sales productivity gains last year from the move up market, and we expect further sales productivity gains this year. In terms of the margin, we reallocated investments in sales, moving resources from the mid-market to the upmarket. I wouldn’t say that there was a demonstrable increase in sales investments. The investments are really more in R&D, driving more awareness of our platform, and educating customers. We still find that a lot of people are not fully aware of MongoDB's capabilities and don’t necessarily have the skills to use all of our capabilities. But in terms of the move up market, we’re really happy with the results we’re seeing.
Serge Tanjga, CFO
The only thing I would add is that increased productivity is definitely a part of the guidance.
Operator, Operator
Thank you. One moment for our next question. And that will come from the line of Kingsley Crane with Canaccord Genuity. Your line is open.
Kingsley Crane, Analyst
HI. Thanks for taking the question. So again, on Voyage AI, you mentioned that technology is not enough in the prepared remarks. To what extent do you think feature sets like that Voyage can drive workload creation within AI apps or is that more market-oriented? And then is Voyage additive in its ability to reduce vector storage costs, similar to your efforts in quantization?
Dev Ittycheria, CEO
Yeah. A couple of points. Stepping back, we see two big challenges that customers have. They have a skills gap and then they have a trust gap with AI. Voyage AI addresses the trust gap, enabling the building of high-quality AI applications where results have a high degree of confidence. But the skills gap is still inherent to these organizations. What we are doing is not just bringing technology, but we're really taking a solutions approach where we come together with a combination of technology, best practices, and experience so that we can really help customers deal with their business problems, not just throw technology at them. Customers appreciate this approach. You’ll see us take more of a solution approach to help, for example, in modernizing their existing legacy applications as well as helping them build new AI applications. In terms of storage, yes, the advances we made in the quantization reduce storage costs and improve the performance of our Vector store. This is all about increasing the trustworthiness and accuracy of the results generated from these AI applications.
Kingsley Crane, Analyst
Great. Really helpful. And a quick follow-up. How did the GCP partner influence deals so far in the quarter? You called out strength last quarter and that you were looking to do more of them in Q4. I also saw that they made some cuts more recently. Thanks.
Dev Ittycheria, CEO
Our relationship with Google Cloud is still very constructive and productive. Generally, I would say, our relationships with all the hyperscalers are very positive. We work with them depending on the customers. I see some customers have relationships only with one hyperscaler, others have relationships with multiple hyperscalers. We work closely with GCP, AWS, and Azure, and all three are productive.
Operator, Operator
Thank you. One moment for our next question. And that will come from the line of Patrick Walravens with Citizens Bank. Your line is open.
Patrick Walravens, Analyst
Great. Thank you. I was wondering if you could just step back and give us sort of the five-year trajectory on non-Atlas. Because I look at the growth rates going back: '21 was 23%; '22, 19%; '23, 25%. Was there a period there where it exceeded your expectations? Where it came in below what you thought? What was the ebb and flow of non-Atlas?
Dev Ittycheria, CEO
We don't really manage the business necessarily by product. We manage it by channel and work from a customer orientation working backwards. High-end customers do like choice. They don't believe every workload will go to the cloud. Many customers are still focused on building their technology stack on-prem. A lot of large banks in Europe and a number of banks here in the U.S. have pre-dispositions for workloads on-prem. It’s about serving customers' needs. Customers like to have choices on how they run their workloads. For those customers on EA, we're seeing them deploy more of those incremental workloads on Atlas. Some new capabilities like Voyage will only be available on Atlas, which will have customers do more on Atlas. I’ll let Serge comment on the guidance.
Serge Tanjga, CFO
I would just stress a couple of things. We talked in prepared remarks about non-Atlas ARR growth being in the mid-single digits year-over-year in Q4 and that being slowed down from double-digits growth in Q4 of fiscal year '24. We're seeing customers who are historically non-Atlas increasingly deploying incremental workloads on Atlas. They are deploying incremental workloads on EA, which is why that line item continues growing, and we expect it to continue growing. But we see more and more revenue growth of those customers showing up on Atlas, and that's baked into both the Atlas and non-Atlas portion of the guide.
Patrick Walravens, Analyst
Okay. And then just as a follow-up, and you might not be able to comment on this. But as we look out past '26, I know you don't run the business this way, but we do model it this way. So as we look out past '26, should we expect the growth to stay really muted?
Serge Tanjga, CFO
Two things. We do still have low market share even in those customers who are predominantly non-Atlas. We expect to continue growing workloads we can acquire in EA. We do expect the move to the cloud to continue. We expect those customers to gain even more share by getting incremental Atlas workloads. The app modernization initiative will benefit both Atlas and non-Atlas. That initiative is still in its nascent stage.
Operator, Operator
Thank you. One moment for our next question. And that will come from the line of Brad Sills with Bank of America. Your line is open.
Brad Sills, Analyst
Great. Thank you so much. A question for you, Dev. You mentioned fiscal '26 kind of being a year of transition. I wanted to get your thoughts on what that means exactly. It seems to me that the consumption patterns are stabilizing. You're seeing some traction with new workloads. Last year was a year of go-to-market changes. It feels like this would be the year where you would start to see some progress on transition items you saw last year. So, maybe transition is a little strong to describe this year, but I just wanted to double-click on your thoughts on that.
Dev Ittycheria, CEO
Let me be clear. I feel very bullish about the future of this business. I have not been excited like this for a long time. The way people are building these new AI applications are made for a platform like MongoDB in terms of ability to handle different data types, scalability, and support for lexical semantics search. I feel very bullish about the business, and I believe it can grow significantly faster than it is today. We are making the right investments to position the company for that growth. We're pleased to see that the Atlas business is stabilizing, as was mentioned. I know that's been a question for many investors. With the EA business, there are puts and takes with multi-year, but the long-term trends are in our favor. There’s a large opportunity as customers are looking to run their business through custom software. We are very differentiated and that will show up in the numbers over time.
Serge Tanjga, CFO
It is a transition year in a sense that some of our largest initiatives and focus areas, those being application modernization and winning the AI stack, are going to only incrementally benefit our revenue this year, but we expect them to be meaningful growth drivers in years beyond.
Brad Sills, Analyst
Wonderful. Thanks for that. And then would love to get your thoughts on where you're seeing new workload strength that you called out, any categories in particular? Thank you.
Dev Ittycheria, CEO
Actually, the short answer is, we're seeing it everywhere. We're seeing it both at the high end of the market as well as at the low end. Our new customer count for this past quarter was quite strong. Our move up market is generating our $1 million customer count, which is growing faster than our overall customer base. So we're seeing results at both the top end and the bottom end of the market.
Operator, Operator
Thank you. One moment for our next question. And that will come from the line of Patrick Colville with Scotiabank. Your line is open.
Patrick Colville, Analyst
Thanks so much for taking my question. I guess, Dev, this one's for you, please. MongoDB is obviously doing a lot of things right. So I guess, I just want to ask around the competitive environment as of today. How is MongoDB competing with the hyperscalers and Postgres as of today? And is there any difference to the competitive environment, call it, this time of year about March 2024?
Dev Ittycheria, CEO
I’ll say that, I'll make two main points. One, a lot of people compare MongoDB to Postgres, and I think that's a false comparison because Postgres is just an OLTP database. With MongoDB, the right comparison is Postgres plus Elastic plus something like Pinecone plus maybe like an embedding model from Open AI or Cohere. Customers prefer to have a more elegant solution than trying to cobble all these pieces together. The second point is, MongoDB is a much better OLTP database than Postgres. Postgres is based on relational architecture. It's very rigid and doesn't handle unstructured data well. It claims to support JSON data, but the performance of anything north of 2 kilobytes of JSON data really suffers. Our win rates against Postgres are high because when we explain the value proposition of MongoDB against Postgres, we win a lot. We want to get into more battles. People who don't know MongoDB may gravitate to Postgres simply because they don't know how to use MongoDB. That’s what we're working on in generating more awareness and skills in our existing customers and new customers. The hyperscalers have their own variants of Postgres offerings and clones. We haven't seen clones as much lately. Our win rates against the clones are very high. Our relationships with the hyperscalers, as I mentioned previously, are basically very positive. Our salespeople partner with the hyperscalers around the world, and when we partner with them, we win more business.
Operator, Operator
Thank you. One moment for our next question. And that will come from the line of Rishi Jaluria with RBC Capital Markets. Your line is open.
Rishi Jaluria, Analyst
Wonderful. Thanks so much for taking my question. Dev, I want to follow up on a comment you made, which is a lot of the Postgres success is from lifting and shifting existing SQL applications. We're seeing the same thing in our checks. What needs to happen as companies think about net new generative AI applications to reconsider not just lift and shift but to actually consider rebuilding those solutions from scratch, especially when they want to leverage unstructured data? What role can you play in driving that conversation more towards rebuilding rather than just lift and shift?
Dev Ittycheria, CEO
Yeah. We think AI has fundamentally changed the game, and the reason it’s changed the game is that if we thought change was happening fast today, it’s going to happen even faster in the world of AI. Every business will have to ensure that software is incredibly flexible and adaptable as they deal with all these new different data modalities. MongoDB was built for change. Our document model enables a highly flexible schema, allowing quick changes. We added lexical search and semantic search through our Vector database functionality. With the Voyage AI acquisition, we’re bringing all these pieces together. We feel staying on a relational database will no longer be viable, given the pace of change every business will need to deal with. Legacy platforms cannot keep up. That's where we come in. Our job is to educate customers about our advantages.
Rishi Jaluria, Analyst
That's really helpful, Dev. And then maybe just related to that, you talked about the opportunity with the relational migrator in the past and really how AI can help in accelerating that, remapping the data schema, etc. What sort of momentum have you seen with relational migrator? How should we think about that as a growth driver going forward? Thank you.
Dev Ittycheria, CEO
Our confidence in this space is even higher today than it was before. I do want to say we're going after a hard problem, and we knew this from the start. For example, when you look at a legacy app that's got tens of thousands of store procedures, being able to reason about that code and then convert it takes a lot of effort. The good news is, we see a lot of progress in that area. Customers are very interested in this area because they are in pain with the technical debt they've assumed. When they consider enabling AI in these applications, there's no way they can do this on their legacy platforms. They're motivated to modernize as quickly as possible. We are primarily focusing on Java apps running on Oracle because that seems to be the most pain customers are feeling. We feel fiscal '26 will be the year we scale this work, and it will start showing in our numbers in fiscal '27.
Operator, Operator
Thank you. That is all the time we have for today's question-and-answer session. I would now like to turn the call back over to Dev Ittycheria for any closing remarks.
Dev Ittycheria, CEO
Thank you for everyone for joining us today. I want to remind and summarize that we had a really strong quarter in the year as we executed on a large opportunity. We expect this coming fiscal year to play out similar to last year with healthy new business and stable Atlas consumption trends. We are more excited than ever about the long-term outlook, particularly around our opportunity to address expanded requirements of a database in the AI era, and we’ll continue to invest judiciously to focus on our execution to capture the long-term opportunity ahead of us. So thank you for joining us, and we’ll talk to you soon.
Operator, Operator
This concludes today's program. Thank you all for participating. You may now disconnect.