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Earnings call: MongoDB posts robust Q3 results, revenues climb 30%

Published 12/08/2023, 07:39 AM
Updated 12/08/2023, 07:39 AM
© Reuters.

MongoDB , Inc. (NASDAQ: NASDAQ:MDB), a leading modern, general-purpose database platform, reported strong financial results in its third quarter of fiscal year 2024. With a significant 30% year-over-year increase in revenue, the company announced a total revenue of $433 million. The growth was particularly pronounced in its Atlas (NYSE:ATCO) revenue, which surged by 36% compared to the same period last year, now representing 66% of the total revenue. Non-GAAP operating income stood at $79 million. The customer base expanded to over 46,400, with Atlas users accounting for over 44,900 of that total. The company also highlighted the strategic addition of Ann Lewnes to its Board of Directors and the launch of its Vector Search feature, signaling a strong focus on innovation and customer-centric product development.

Key Takeaways

- MongoDB reported a 30% year-over-year increase in Q3 revenue, reaching $433 million.

- Atlas platform revenue grew by 36% year-over-year, now constituting 66% of total revenue.

- The company's non-GAAP operating income was reported at $79 million.

- Customer base grew to over 46,400, with significant adoption of the Atlas platform.

- Ann Lewnes, former Adobe (NASDAQ:ADBE) CMO and EVP, joined MongoDB's Board of Directors.

- MongoDB launched Vector Search, enhancing their product offerings.

- MongoDB's outlook for Q4 includes expected revenue between $429 million to $433 million and non-GAAP net income per share between $0.44 to $0.46.

- For the full fiscal year 2024, the revenue outlook is increased to between $1.654 billion to $1.658 billion, with non-GAAP net income per share between $2.89 to $2.91.

Company Outlook

MongoDB has raised its revenue outlook for the full fiscal year 2024 to a range of $1.654 billion to $1.658 billion. The non-GAAP net income per share is projected to be between $2.89 and $2.91. The company's strong performance and customer growth are underpinned by the success of its Atlas platform and its strategy to run anywhere. With a focus on maximizing long-term value and responsible investment, MongoDB is positioning itself for sustained growth.

Bearish Highlights

The company expects the headwind from Deferred Revenue (DR) to persist due to the shift towards Atlas and historical commitments. Additionally, non-Atlas business is anticipated to decline quarter-over-quarter in Q4 because of multi-year deals and the recognition of upfront license revenue.

Bullish Highlights

MongoDB's Enterprise Agreement (EA) performance has been robust, driven by the run-anywhere strategy and the capability for customers to future-proof their deployment models. The company's product market fit and the success of multiyear deals with existing customers have contributed to its strong performance. The addition of 117 customers with revenue exceeding $100,000 each this quarter underscores MongoDB's increasing importance as a mission-critical platform.

Misses

The company noted that while its AI initiatives in data infrastructure modernization are important, it is still early days regarding the revenue impact. Additionally, the company's relational migrator tool is in the early stages of automating the migration process, indicating that significant revenue contributions from these areas may not be immediate.

QA Highlights

During the Q&A session, MongoDB's executives addressed a variety of topics, including the seasonality of Q3 and the long-term roadmap. The company remains committed to its developer data platform strategy and has no plans to enter the application space. Concerns about IP rights and copyright were highlighted as reasons why customers are currently using Copilot code tools for internal-facing applications.

MongoDB, with its strategic focus on innovation and customer satisfaction, continues to strengthen its position in the database market. The company's financial results and positive outlook reflect its ability to adapt and thrive in a dynamic technological landscape. With the addition of Ann Lewnes to the Board and the launch of new features like Vector Search, MongoDB is well-equipped to maintain its growth trajectory and deliver value to its customers and shareholders alike.

InvestingPro Insights

MongoDB, Inc. (NASDAQ: MDB) has demonstrated a strong financial performance in the latest quarter, with notable growth in its Atlas revenue. To further understand the company's market position and financial health, let's delve into some real-time data and InvestingPro Tips.

InvestingPro Data highlights MongoDB's substantial market capitalization of $27.65 billion USD, which underscores its significant presence in the database market. However, the company's P/E Ratio stands at -164.67, reflecting challenges in profitability. Despite this, revenue growth remains robust, with a 33.39% increase over the last twelve months as of Q1 2023, indicating the company's ability to expand its revenue streams successfully.

Two InvestingPro Tips that can offer additional insights include the fact that 20 analysts have revised their earnings upwards for the upcoming period, which may signal confidence in MongoDB's future performance. Additionally, while the stock has taken a hit over the last week, with a 1-week price total return of -11.72%, the long-term perspective remains positive, as evidenced by a 1-year price total return of 97.62%.

For readers interested in deeper analysis, a subscription to InvestingPro provides access to a wealth of additional tips, including insights into MongoDB's debt levels, revenue valuation multiples, and profitability predictions. Currently, there are 12 more tips available on InvestingPro for MongoDB, which can be accessed at https://www.investing.com/pro/MDB.

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This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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