01 - Preheat oven to 375°F for baking.
02 - Heat olive oil in a nonstick skillet over medium heat. Sauté shallot and garlic for 1–2 minutes until fragrant.
03 - Add chopped mushrooms to the skillet. Cook for 6–7 minutes, stirring occasionally, until mushrooms release their liquid and it evaporates. Season with salt, pepper, and thyme. Remove from heat and let cool slightly.
04 - In a large mixing bowl, combine cream cheese, sour cream, mozzarella, Parmesan, and half of the parsley. Mix until smooth and creamy.
05 - Fold the sautéed mushroom mixture into the cheese base until well incorporated.
06 - Spread the mixture into a greased ovenproof baking dish or skillet, creating an even layer.
07 - Bake for 20–25 minutes until the top is golden brown and the dip is bubbly around the edges.
08 - Remove from oven and sprinkle with remaining parsley and optional red pepper flakes. Serve warm with toasted baguette slices, crackers, or fresh vegetables.