MongoDB crushes Wall Street’s targets and boosts annual forecast but stock sags – SiliconANGLE

MongoDB Inc. smashed Wall Street’s earnings and revenue targets out of the park and raised its full-year outlook, but the solid performance failed to excite investors, and its stock sagged 2% after-hours.

The database company reported third-quarter earnings minus onetime items of $1.16 per share, cruising past the Street’s target of 67 cents. Meanwhile, its revenue jumped 22% from a year earlier, to $529.4 million, well ahead of the $497.7 million analyst forecast.

The impressive growth means that the company is inching closer to profitability. All told, it posted a net loss of $9.8 million, improving on the $29.3 million loss it posted in the same period last year.

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.

MongoDB Chief Executive Dev Ittycheria (pictured) hailed the results, saying they were “significantly ahead of expectations, driven by 26% growth in revenue from Atlas.”

“We continue to see success winning new business due to the superiority of MongoDB’s developer data platform in addressing a wide variety of mission-critical use cases,” he said.

The CEO also reiterated a previously stated belief about the company’s prospects of playing a key part in the emerging artificial intelligence stack over the coming years. “We continue to invest in our legacy app modernization and AI offerings as our document model and distributed architecture are exceptionally well-suited for customers looking to build highly-performant, modern applications,” Ittycheria added.

Looking to the fourth quarter, MongoDB is once again predicting an impressive performance. It said it’s targeting revenue of between $515 million and $519 million, well ahead of the Street’s forecast of $508.9 million. It also anticipates earnings of between 62 and 65 cents, above the consensus estimate of 57 cents.

The company also raised its full-year targets, saying it now sees total revenue between $1.97 billion and $1.98 billion, with earnings between $3.01 to $3.03 per share. That’s up from an earlier range of between $1.92 billion to $1.93 billion in sales and $2.33 to $2.37 per share in earnings. Wall Street is targeting annual sales of $1.93 billion and earnings of just $2.44.

Constellation Research Inc. analyst Holger Mueller said the company is moving toward profitability at long last, after years of building its business and spending money during the process.

“It had a really good quarter, and growth was fueled by demand for the cloud-based version of its database, Atlas,” the analyst said. “But the real work happened on the cost side, where the company increased its spending but at a lower rate than that of its revenue growth.”

According to Mueller, this is no easy feat, but when companies are able to do this, good things almost always result. “In MongoDB’s case, its the first quarter it has posted with a loss of less than $10 million,” he said. “It has been under pressure to deliver a profit for some time and it’s finally looking like it might be able to do that within the next quarter.”

In other news, MongoDB announced that Chief Financial Officer and Chief Operating Officer Michael Gordon will step down from both roles at the end of the current fiscal year on Jan. 31.

The company has said it will look at both internal and external candidates in its hunt for a successor. Serge Tanjga, who currently serves as senior vice president of finance, will take over as interim CFO if a successor has not been found by the time Gordon departs.

Nothing was said about a replacement COO, but in any case, Gordon will continue to work with the company as an advisor to ensure a smooth transition.

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