Cloud Based Atlas Revenue Drives MongoDB Stock 27% Higher

Database software developer MongoDB shares soared 27% after announcing better than expected Q3 (Oct) earnings as the demand for NoSQL databases runs hot. $MDB also raised its FY23 earnings and revenue guidance. MongoDB’s revenue rose 47% year-over-year in the quarter that ended on Oct. 31, according to a statement. Its net loss widened to $84.8 million, compared with a net loss of $81.3 million in the year-ago quarter.

MongoDB

MongoDB Q3 22 Earnings:

Highlights

  • Earnings: 23 cents per share, adjusted, vs. a loss of 17 cents per share as expected by analysts, according to Refinitiv.
  • Revenue: $333.6 million, vs. $303.4 million as expected by analysts, according to Refinitiv.
  • 39,100 customers, better than the 38,900 average estimate by StreetAccount.
  • MongoDB’s cloud database service Atlas represents 63% of total revenue.

“The strength in our business was driven by improved Atlas consumption trends and continued strength in new business activity,” CEO Dev Ittycheria said in the statement. Sequential gains came in the mid-market and at enterprises in Europe in what appears to be an emerging seasonal trend, Michael Gordon, MongoDB’s operating chief and finance chief, said on a conference call with analysts.

MongoDB said it would make it easier for developers to use pay-as-you-go pricing for the company’s cloud database on Microsoft’s Azure cloud during the quarter.

MDB while it beat the adjusted earnings targets headwinds surround the demand environment. These include weakness across Europe and softness in the mid-market channel. Despite these headwinds, MDB has no plans of taking its foot off the accelerator, stating that it intends to continue investing for the long-term.

Outlook

The company raised its outlook for the full 2023 fiscal year.

  • They now see adjusted net income of 29 cents to 31 cents per share, compared to previous guidance that called for a loss of 35 cents to 28 cents per share.
  • For revenue, MongoDB called for about $1.26 billion, compared with its prior expectation of $1.2 billion. Analysts polled by Refinitiv had expected an adjusted net loss of 31 cents per share on $1.21 billion in revenue.
  • Finance chief Gordon said the company expects Atlas consumption growth to slow consequentially in the fiscal fourth quarter.

Non-structured query language (NoSQL) does have a serious limitation over traditional structured query language (SQL) in that analytical tools cannot be applied to NoSQL formatted data. In saying that there is plenty of data for which insights are not needed. The cost of change is large for businesses to move from NoSQL databases once adopted. It is both expensive and time-consuming and runs the risk of data loss.

The rise of NoSQL is embedded in the modern tech world and that MDB looks best positioned to continue taking advantage of this trend. MongoDB is riding the cloud migration spree that was triggered by the virus outbreak, with data playing a significant role in digital transformation currently.

About MongoDB

MongoDB is the leading modern, general purpose database platform, designed to unleash the power of software and data for developers and the applications they build. Headquartered in New York, MongoDB has more than 26,800 customers in over 100 countries. The MongoDB database platform has been downloaded over 175 million times and there have been more than 1.5 million registrations for MongoDB University courses. Caution as always given MDB is yet to generate profit after going public more than three years ago.

From The TradersCommunity Research Desk