Investors bailed on the database company MongoDB Inc. today after it crushed expectations in its latest financial results, only to follow up with miserable guidance for the current quarter.

The soft guidance triggered further jitters among investors worried that the rise of artificial intelligence might upend the business models of software companies, and MongoDB’s stock cratered in the after hours trading. It was down more than 23% at the time of writing. Update: On Tuesday, shares were declining 23%.

The company delivered solid fourth-quarter results, posting adjusted earnings of $1.65 per share, easily beating Wall Street’s target of $1.48 per share. Revenue for the period gained an impressive 27%, rising to $695.1 million, well ahead of the $670.1 million target. MongoDB’s subscription revenue increased 27%, while services revenue gained 26%.

However, the good work was quickly undone by its cautious guidance for the current quarter. Looking ahead, MongoDB forecast earnings of $1.15 to $1.19, trailing the Street’s forecast of $1.20. It also called for revenue of between $659 million and $664 million, with the midpoint just about in line with the $662.5 million consensus estimate.

The lower-than-expected guidance likely came as a shock to investors. MongoDB is the creator of a specialized document-orientated database that’s widely used by data-intensive application developers. Until recently, it has been seen as one of the beneficiaries of the AI boom due to the way its platform organizes data to make it searchable for large language models.

However, the company likely just chose the wrong time to issue its cautious outlook. It comes amid heightened concerns from investors that software companies might end up being put out of business by the rise of AI upstarts, many of which offer tools that enable enterprises to create their own software. The fact that MongoDB isn’t really a traditional software company, but more of a data infrastructure player, doesn’t appear to have helped it much today.

Nonetheless, MongoDB President and Chief Executive CJ Desai (pictured) insisted that the company’s long-term prospects remain sound, and that it’s well-positioned to win more customers as enterprises look to scale up their AI investments. For many companies, MongoDB’s database has become the foundation of those efforts, he said.

“The database layer has endured through multiple technology shifts over the past 60 years, and is even more critical in this AI shift,” he said on a conference call. “AI applications and agents require memory and high quality retrieval, capabilities which are native to MongoDB’s platform.”

Holger Mueller of Constellation Research said there are positive signs for MongoDB, with its continued strong revenue growth demonstrating that it certainly has a place in the new AI world, but it’s going through a period of instability with so many executive changes in recent weeks. “It has just named Erica Volini as its new Chief Customer Officer, she’s an accomplished executive who can set up MongoDB for further growth,” the analyst said. “But why the company is being so conservative with its guidance is a mystery that will likely only become clear in three month’s time, when its next results are out.”

At least the full-year picture looks a little better. MongoDB called for fiscal 2027 earnings of between $5.75 and $5.93 per share on sales of $2.86 billion to $2.9 billion versus the Street’s consensus of $5.69 per share in earnings and $2.9 billion in sales.

No doubt MongoDB’s cause wasn’t helped by lower profitability during the quarter. The company, which only recently broke into the black after being unprofitable for years, recorded net income of just $15.5 million in the quarter, down slightly from a profit of $15.8 million in the year-ago period. The company blamed that on higher marketing and research and development costs.

Image: Sequoia Capital/YouTube