Strong beat and raise helps MongoDB’s stock surge more than 13% after-hours – SiliconANGLE

Shares of the database company MongoDB Inc. made strong gains in the after-hours trading session today following a crushing second-quarter earnings beat and a raise in its full-year guidance.

The company reported earnings before certain costs such as stock compensation of 70 cents per share, surging past the Wall Street analysts’ consensus estimate of just 49 cents. Meanwhile, revenue grew 13% from a year earlier, to $478.1 million, well ahead of the Street’s target of $464.1 million.

Although MongoDB’s net loss grew from $37.6 million on year ago to $54.5 million at the end of the previous quarter, investors were delighted with its overall sales growth. The company’s stock surged more than 13% in extended trading, having risen just over 4% during the regular session.

MongoDB Chief Executive Dev Ittycheria (pictured) said the company’s “health” second-quarter results were driven by strong new workload acquisition and better-than-expected consumption trends with its cloud-hosted database Atlas.

“We remain excited about our opportunity to continue capturing share in one of the largest markets in software,” Ittycheria said. “We believe we are incredibly well-positioned to help customers incorporate generative AI into their business and modernize their legacy application estate.”

MongoDB is the creator of the document-oriented MongoDB database, which is used to power data-intensive applications. Its flagship product is the cloud-hosted MongoDB Atlas, which accounts for the bulk of its revenue, though it also sells on-premises and mobile versions. All three are popular with developers thanks to their support for multiple data formats and ease of use.

On a conference call with analysts, Ittycheria explained that the company was seeing “modestly better consumption than expected.” He added that consumption rates had slowed during the first quarter, as customers were facing more challenging economic conditions. However, he believes the progress in the second quarter suggests the company is managing to win more of those customers over, despite the continuing economic uncertainty.

“We generally have not seen the macro environment impact our ability to win new business, and that was true in quarter two as well,” Ittycheria said. “We realize that this is different from what you hear from some other software vendors.”

Earlier this week, rival company Elastic N.V. held its own earnings call, where its CEO Ash Kulkarni revealed that the company’s volume of client commitments was lower than expected. Elastic’s stock cratered, falling more than 23%, and today Ittycheria indirectly provided some more insight into that, talking about how MongoDB is helping some companies to migrate from Elastic’s products to its own tools.

Looking to the next quarter, MongoDB is calling for earnings of between 65 and 68 cents per share on revenue of $493 million to $497 million. That compares very well with the Street’s targets of 60 cents in earnings and $478.8 million in sales.

MongoDB was also confident enough to raise its full-year guidance for fiscal 2025, and it did so by a fairly big margin. It said it’s now aiming for total earnings of $2.33 to $2.47 per share on $1.92 billion to $1.93 billion in sales. That’s up quite a bit from its earlier forecast of $2.15 to $2.30 in earnings and $1.88 billion to $1.9 billion in revenue. Wall Street for now is looking for MongoDB to deliver earnings of $2.26 per share on sales of $1.9 billion.

Constellation Research Inc. analyst Holger Mueller told SiliconANGLE that MongoDB had another good quarter on the revenue side, with growth fueled by its latest Titan release, but he said he still has concerns over how the company is ever going to turn that growth into a profit.

“While MongoDB’s revenue grows, its expenses also increased,” he said. “For instance, its costs for subscription services grew faster than the revenue growth derived there, and its overall operating expenses grew at almost the same clip as its total revenue. So the result is a 21 cents bigger loss in earnings per share, which is not a good trend.”

To turn this around, Mueller said MongoDB has two options. “Either it finds a way to grow faster, which has not happened in a while, or it needs to better control its costs and find a way to at least break even,” he said.

The after-hours stock movement was just what the doctor ordered for MongoDB. Prior to today’s earnings call, the company’s stock had declined almost 40% in the year to date, compared with a 17% gain by the S&P 500 Index.

Ittycheria appeared on theCUBE, SiliconANGLE Media’s mobile livestreaming studio, during its coverage of the MongoDB.local NYC event in May, when he talked about the company’s ambitions to become a key player in enabling enterprises’ generative AI transformations:

Photo: SiliconANGLE