👩‍💻 Are Investors Euphoric About MongoDB?

Oracle, CVS shares rise on bullish forecast.

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👩‍💻 MongoDB: Investor Euphoria?

Open-source software company MongoDB (MDB) beat analyst expectations while providing upbeat guidance for the current quarter. For now, shareholders are choosing to pay more attention to the company’s growth rather than the concerns surrounding it. (Tweet This)

Sustained Growth …

MongoDB crossed the $200M revenue mark in Q3 as more customers continued to choose the company’s software for developing their applications.

Key Stats From Q3: 

  • Revenue: $226.9M Vs $205.2M expected
  • Loss per share: $0.11 Vs $0.38 expected

Revenue growth during Q3 stood at 50% Y-o-Y compared to 44% in Q2. The company’s subscription business, which contributes to most of the overall top line, grew 51% Y-o-Y to $217.9M.

For the current quarter, MongoDB expects to clock revenue of $240M while the loss per share is expected to increase to ~$0.22. The revenue guidance implies a growth of 41% Y-o-Y. This was the third consecutive quarter where the company beat street estimates and increased its guidance.

The company added 2K customers in Q3, taking the overall count to 31K. Some of its largest customers have signed multi-year commitments with the company. MongoDB now has over 1.2K customers with at least $100K in annual recurring revenue. That number during the same quarter last year stood at 898.

… But From One Major Source!

On the other hand, the company’s net loss widened to $81.3M compared to $72.7M during the same period last year. Its sales and marketing expenses totaled more than half of the quarterly revenue.

Profits or not, MongoDB is facing incessant competition from Confluent, a data analytics provider spun out of LinkedIn in 2014 is now valued at $19B and whose shares are up almost 50% since its IPO in June. Amazon, MicrosoftIBM, and Oracle continue to remain viable alternatives to the company.

Another concern surrounding MongoDB is Atlas – its fully managed cloud database. In our previous story on MongoDB dated September 7, we had mentioned Atlas, which had contributed 56% to the company’s overall revenue back in Q2. In Q3, that number rose to 58% with an 84% Y-o-Y growth.

Not a surprise then that out of the 31K customers that the company has overall, 29.5K come from Atlas (and up from 21.1K Y-o-Y). The product has now reached a revenue run rate of $500M. Be that as it may, the company continues to burn cash. For Q3, MongoDB’s free cash flow stood at negative $9.2M (although better than the negative $14.9M last year).

The management also hinted that revenue growth in the current quarter might be slower than in Q3. In stark contrast to DocuSign’s investors who pummelled that stock, MongoDB’s shareholders shrugged and went about their merry way. How long will this euphoria last?

Market Reaction
MDB ended at $513.28, down 3.44%. Shares are up 47% this year.

Company Snapshot 📈

MDB $513.28 -18.29 (3.44%)

Analyst Ratings (19 Analysts) BUY 74%  HOLD 21%  SELL 5%

Newsworthy 📰

Optimism: CVS says sales will accelerate as it offers more healthcare services, builds on pandemic gains (CVS +4.52%)

Mixed: Lululemon earnings top estimates but retailer cuts forecast for at-home fitness device sales (LULU -2.13%)

Bullish: Oracle forecasts upbeat Q3 as IT spending rebounds (ORCL +10.40%)

Later Today 🕒

  • Nutanix Inc. Earnings (NTNX)
  • Academy Sports and Outdoors Inc. Earnings (ASO)
  • Johnson Outdoors Inc. Earnings (JOUT)
  • 7:00 PM IST: Consumer Price Index
  • 12:30 AM IST: Federal Budget

Today’s Market Terminology: Trade Deficit

A trade deficit occurs when a country’s imports exceed its exports during a given time period. It is also known as negative Balance of Trade (BOT)

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