MongoDB, Inc. (MDB) Securities Class Action

MongoDB Inc., a provider of document-database software, now faces an investor class action after revising its fiscal year 2025 revenue guidance twice in recent months.

Previously, MongoDB management expressed confidence in its ability to achieve its FY 2025 revenue targets. This confidence stemmed from initiatives such as restructuring sales force incentives and reducing pressure on upfront customer commitments. Additionally, management emphasized efforts to mitigate risks associated with seasonal trends and broader economic factors.

However, on March 7, 2024, MongoDB surprised investors with a downward revision of its full-year guidance. The company attributed the decrease to a restructuring of its sales force compensation model, which it said led to a decline in upfront customer commitments and revenue from multi-year licensing deals. Notably, management acknowledged this change could have resulted in higher guidance if sales capacity had not been impacted. This news led to a significant decline in MongoDB's stock price.

Despite these revisions, management maintained its view that the overall business environment for FY 2025 would be similar to the previous year.

Then, on May 30, 2024, MongoDB further revised its FY 2025 guidance downward. This time, the company cited macroeconomic factors affecting customer adoption of its MongoDB Atlas product, along with the ongoing impact of the sales force restructuring. These disclosures resulted in another substantial drop in the company's share price.

The cumulative effect of these revisions has eroded shareholder value by an estimated $7.5 billion.

Investors have now brought suit against MongoDB and its most senior executives alleging they gave the false impression that they possessed reliable information pertaining to the Company’s projected revenue outlook and anticipated growth, while also minimizing risk from seasonality and macroeconomic fluctuations. The complaint alleges that when making these statements, executives knew that macro headwinds were worsening and that MongoDB’s sales force incentive restructure were reducing new enrollments.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the MDB securities class-action case about?

We are investigating whether MongoDB may have downplayed known risks posed by its sales incentive restructure and macroeconomic factors.

WHAT SHOULD I DO?

I worked at MDB. What should I do?

If you were an employee of MDB, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in MDB, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any MDB investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.