11:56 AM EDT, 06/05/2025 (MT Newswires) -- MongoDB ( MDB ) posted "strong" fiscal Q1 results, beating expectations on accelerating growth in its cloud database platform, Atlas, and disciplined expense execution, Morgan Stanley said in a note Thursday.

Atlas, MongoDB's ( MDB ) cloud database platform, grew 26% year over year, or 27% adjusted for the leap year, up from 24% in Q4. Growth was supported by steady consumption despite macro headwinds in April, with a recovery in May.

Customer additions reached their highest level since before the pandemic, with 2,600 net new customers, largely driven by Atlas. The brokerage also noted increasing adoption by AI-focused firms such as Cursor.

While Atlas' growth appears to be stabilizing, Morgan Stanley said management took a more cautious stance on the non-Atlas business. The fiscal 2026 revenue forecast was raised by $10 million to a range of 12% to 14% year-over-year growth. The firm noted this was a conservative outlook, with some non-Atlas revenue likely pulled forward into Q1.

Fiscal Q1 operating margin came in at 15.9%, exceeding consensus by 500 basis points. Management raised its fiscal 2026 operating margin target to between 12% and 12.5%, up from 9% to 10% previously, while still allowing for 20% year-over-year growth in operating expenses over the remainder of the year.

Morgan Stanley said the results and guidance reinforced its view that new CFO Mike Berry is instilling greater expense discipline.

The firm reiterated its overweight rating and raised its price target to $255 from $235.

Shares of MongoDB ( MDB ) were up more than 16% in recent trading.

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