MongoDB Surges on Strong Q2 Performance and AI Integration

MongoDB Defies Doubters With Strong Q2 Performance | The Motley Fool

MongoDB's Q2 results crushed expectations across the board. Here's why the stock still has room to grow despite a lofty valuation. Database software expert MongoDB (MDB 18.34%) reported earnings on Thursday, and the results left analyst expectations far behind. The stock soared more than 18% higher shortly after Friday's opening bell. In most cases, that would be a simple story. Surprising financial strength leads to a triumphant stock jump. The end. But it's more complicated for MongoDB, whose big jump didn't come close to making up for recent drops. This uncomfortable situation raises a few questions: Let's see if I can find answers to these burning questions, with the help of MongoDB's second-quarter earnings report and conference call. The stock is down 15% from the day before its first-quarter report three months ago, and there's a 44% gap to February's 52-week highs. As I said, Friday's jump wasn't nearly enough to make up for recent price drops. At first glance, the quarterly report checked all the boxes for a bullish financial update. Revenue rose 13% year over year to $478 million. Your average financial analyst had expected roughly $464 million, in line with MongoDB's guidance. Adjusted earnings landed fell 25% year over year, landing at $0.70 per diluted share. That was still far above the analyst consensus at $0.49 per share, which matched the top end of management's official guidance range. At second glance, you should know that MongoDB's stock crumbled in May due to low guidance targets for this second-quarter report. CEO Dev Ittycheria explained that the back half of the year looked challenging due to slower-than-expected sales of the cloud-based MongoDB Atlas database service. So he set the second-bar low, resulting in a sharp stock price cut. Against that backdrop, let's compare MongoDB's actual results to the analyst projections three months ago, before that disappointing guidance update. As it turns out, MongoDB crushed those targets, too: Data source: Results from MongoDB's earnings report, analyst targets confirmed with multiple sources. So MongoDB blew those old targets out of the water, too. In other words, management set some overly conservative targets three months ago, took a market beating as a result, and wasn't fully forgiven for that mistake when the real numbers came in above every expectation. In a broader sense, investors and analysts worry about MongoDB's strategic direction. Despite narrowing gross margins and a challenging sales environment, MongoDB is boosting its operating costs. The second-quarter sales and marketing budget rose 13% year over year, in line with the surprisingly strong revenue boost. Research and development (R&D) took an even stronger 19% jump, resulting in lower profit margins and slimmer bottom-line profits. That's an adjusted view, by the way. MongoDB reported $421.3 million in operating expenses, but that includes $123.8 million of stock-based compensation instead of cash-based paychecks. On the basis of generally accepted accounting practices (GAAP), the company reported a net loss of $54.5 million, or $0.74 per share. Stock-based compensation can be an effective strategy in good times, but employees may feel less motivated by those stock allowances when share prices are going down. On that note, I'm happy with MongoDB's recent compensation moves. The stock-based compensation component actually shrunk by 2% year over year, with a 15% drop in the sales and marketing department. The company is investing real cash in its workforce here, a morale-boosting idea in a period of slower business growth. And the notion of increased R&D and sales budgets in these trying times is absolutely correct -- technology experts are more likely to fix business problems with intensified product development than by cutting costs and corners. The boosted operating budget is paying off. The stalled MongoDB Atlas sales got a second wind with 27% year-over-year revenue growth, and management sees brighter days ahead. Its non-relational database model is a natural fit for requirements of the artificial intelligence (AI) space, especially where the datasets are large and disorganized. You know, like the real world and the messy data that people collect from it. As a result, many of MongoDB's recent contracts are with companies pursuing various types of generative AI. MongoDB isn't a cheap stock, despite the persistent share price drop and this week's strong results. The stock trades at 93 times non-GAAP earnings and 11.7 times sales, which is lofty territory even for a high-octane growth stock. At the same time, I like what I see in MongoDB's long-term strategy and business opportunity. The company has secured less than a 1% slice of the massive market for enterprise-class databases, and I expect it to continue stealing contracts from industry giant Oracle for years to come. All things considered, MongoDB's stock may deserve a closer look if you're searching for an alternative angle on the generative AI boom.

MongoDB: Revenue Exceeds Expectations | The Motley Fool

MongoDB (MDB 4.40%), a leading provider of modern database platforms, released its earnings for the second quarter of fiscal 2025 on August 29, showing strong revenue performance. The company reported revenue of $478.1 million, surpassing its prior guidance of $460.0 million to $464.0 million. The non-GAAP (generally accepted accounting principles) income from operations reached $52.5 million, far exceeding the guidance range of $35.0 million to $38.0 million. Despite this, the company reported a wider net loss of $54.5 million, compared to $37.6 million in the same quarter last year. Overall, MongoDB's quarter reflected robust revenue growth but also highlighted rising costs. Source: SEC filings. Expectations based on management's guidance, as provided in 2024-05-30 earnings report. PPT = percentage points. MongoDB is known for its innovative database solutions that integrate both relational and non-relational database features. The company's primary product, a cloud-based database service named MongoDB Atlas, a cloud database service, has been a key driver of growth. Recently, MongoDB has focused on expanding its presence in the artificial intelligence (AI) space with products like the MongoDB AI Applications Program (MAAP) and MongoDB Atlas Vector Search. These efforts aim to enhance its technological superiority and product differentiation. Key success factors for MongoDB include its ability to differentiate its product by combining the best of relational and non-relational databases, its capacity to operate in multi-cloud environments, and its strategic investments in AI capabilities. The company is also focused on deepening client relationships and expanding within its existing customer base, which now includes over 50,700 clients. During the second quarter, MongoDB achieved several notable milestones and experienced some challenges: The company's revenue grew by 13% year-over-year, reaching $478.1 million. MongoDB Atlas was a significant contributor, representing 71% of total revenue and growing by 27% year-over-year. MongoDB also announced the general availability of its MAAP, enhancing its AI capabilities in collaboration with leading cloud providers like Amazon Web Services (AWS), Alphabet's Google Cloud, and Microsoft Azure. Additionally, the company's Atlas Vector Search was recognized as the most loved and second-most used vector database for the second consecutive year. Despite these achievements, MongoDB's net loss widened to $54.5 million from $37.6 million in the prior year, due to rising operational costs. Sales and marketing expenses rose to $221.5 million, up from $195.9 million a year ago, and general and administrative costs increased to $50.8 million from $46.1 million. Gross margins also slightly decreased to 73% from 75% year-over-year. The wide separation between GAAP and non-GAAP results is a result of MongoDB's intense use of stock-based compensation in lieu of cash-based payroll expenses. Stock-based compensation accounted for $123.8 million of the bottom-line result, down from $125.8 million in the year-ago period. MongoDB's customer base continued to expand, with over 50,700 customers as of the end of the quarter, up from 45,000 in the previous year. The number of customers with annualized recurring revenue (ARR) over $100,000 grew to 2,189, demonstrating deeper customer engagement. The company faced challenges as well, including increased competition from open-source alternatives and cloud giants like Amazon, Alphabet, and Microsoft. This competition has seen its market share in database usage decline, though the company remains focused on its strategic initiatives to counter these pressures. Looking ahead, MongoDB's management has provided optimistic guidance for the third quarter and full fiscal year 2025. For the third quarter, management expects revenue to be between $493.0 million to $497.0 million, and non-GAAP income from operations to range from $57.0 million to $60.0 million. Non-GAAP net income per share is projected to be between $0.65 and $0.68. For the full fiscal year, MongoDB has raised its revenue guidance to between $1.92 billion and $1.93 billion, up from the previous range of $1.88 billion to $1.90 billion. The non-GAAP income from operations guidance has also been raised to a range of $187.0 million to $195.0 million, compared to the prior range of $168.0 million to $183.0 million. Additionally, the expected non-GAAP net income per share has been increased to a range of $2.33 to $2.47, from $2.15 to $2.30 in last quarter's full-year guidance. Investors should monitor MongoDB's continued investment in AI and data management technologies, as well as its ability to manage rising costs while maintaining growth. The company's updated guidance reflects its confidence in sustaining revenue growth, despite competitive pressures and the need for cost containment.

Why MongoDB Stock Soared Today | The Motley Fool

The database software company hopped over a low bar in its earnings report. Shares of MongoDB (MDB 15.18%) were soaring today after the cloud software company delivered a better-than-expected second-quarter earnings report, beating estimates on the top and bottom lines and raising guidance for the year. As of 10:11 a.m. ET, the stock was up 14% on the news. After plunging after its first-quarter earnings report in the spring, the NoSQL database software specialist redeemed itself with its results on Friday. Revenue in the quarter rose 13% to $478.1 million, beating estimates at $464.1 million, and the company showed off strong growth in its cloud-based Atlas segment, where revenue rose 27% and now makes up 71% of revenue. The on-premises business, meanwhile, continued to decline as customers switched to the cloud version. Customers grew from more than 49,200 in the first quarter to more than 50,700, and the company added 52 customers with at least $100,000 in annual spending. Gross margin slipped from 75% to 73%, and operating loss widened on a generally accepted accounting principles (GAAP) basis as operating expenses also grew faster than revenue. On the bottom line, the company's adjusted earnings per share fell from $0.93 to $0.70, though that topped the consensus at $0.49. The decline in profits seems to be related to increased investments in artificial intelligence (AI). CEO Dev Ittycheria said the company saw "strong new workload acquisition and better-than-expected Atlas consumption trends." The company also made strides in product, launching the MongoDB AI Applications Program, which offers an end-to-end AI technology stack, including generative AI companies like Anthropic and the major cloud infrastructure platforms. Looking ahead, MongoDB called for $493 million to $497 million in revenue in the third quarter, up 17% at the midpoint, which would represent an acceleration from the third quarter. On the bottom line, it called for adjusted earnings per share of $0.65 to $0.68, down from $0.96 in the quarter a year ago. It also raised its full-year revenue forecast to between $1.92 billion and $1.93 billion, and it now sees adjusted EPS of $2.33 to $2.47, above the analyst consensus. While the decline in earnings is concerning, MongoDB should soon return to bottom-line growth in the coming quarters as it moves past the investment cycle. In that context, today's gains seem to be a relief rally after the earlier plunge as the company makes progress faster than expected.

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

Strong beat and raise helps MongoDB's stock surge more than 13% after-hours 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 "healthy second quarter results" was 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 due 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 cents 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 degree. 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 is still looking for MongoDB to deliver earnings of $2.26 per share on sales of $1.9 billion. 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 to 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 earlier in May, where he talked about the company's ambitions to become a key player in enabling enterprises' generative AI transformations:

MongoDB Atlas Revenue 'Solid,' AI Integration Set To Drive Strong Cash Flows: Analysts - MongoDB (NASDAQ:MDB)

Analysts raise price targets on MongoDB, citing strong business trends and improved operational performance. MongoDB, Inc MDB stock climbed on Friday after the company reported upbeat second-quarter earnings on Thursday. The company reported quarterly sales of $478.1 million, up 12.8% year-on-year. It topped analyst consensus estimates of $464 million. The quarterly earnings of 70 cents per share beat the analyst consensus estimate of 49 cents. The results came amid an exciting earnings season. Here are some key analyst takeaways. RBC Capital analyst Rishi Jaluria reiterated MongoDB with an Outperform and a $350 price target. Stifel analyst Brad Reback maintained a Buy and raised the price target from $300 to $325. Truist Securities analyst Miller Jump reiterated a Buy and raised the price target from $300 to $320. Piper Sandler analyst Brent Bracelin maintained an Overweight and raised the price target from $300 to $335. Goldman Sachs analyst Kash Rangan reiterated a Buy rating with a price target of $340. JMP Securities analyst Patrick Walravens maintained an Outperform rating and a $350 price target. RBC Capital: MongoDB reported a good beat-and-raise quarter, leading shares up 13% after market close, Jaluria noted. Atlas' revenue was solid. Margins and EPS upside were solid, and Jaluria raised his estimates. Most importantly, the analyst flagged that consumption trends improved, operational headwinds subsided, and new business generation was strong. Jaluria noted that the second quarter was a good outcome, and fiscal 2025 is back on track. Considering MongoDB's large TAM, powerful secular drivers, and category leadership, the price target implies a premium to the peer group. Jaluria expects third-quarter revenue and EPS of $495 million and 66 cents. Stifel: MongoDB posted a solid rebound quarter. A 3% revenue beat was driven by consumption growth that modestly outperformed expectations and solid improvement in new business execution across Enterprise Advanced and Atlas, sending the stock up ~14% after hours after being down ~40% year-to-date, Reback noted. The analyst said results highlight improving execution in the challenged macro, which, combined with investments that should support gross margin expansion and an expanding set of core and emerging growth drivers, should enable the company to sustain 20%+ revenue growth and incremental levels of profitability and cash flow in coming years. Reback expects third-quarter revenue and EPS of $496.1 million and 68 cents. Truist Securities: MongoDB produced second-quarter results that indicated some stabilization in the business after a shaky start to the year, Jump noted. From an execution perspective, the management team pointed to an improvement in new business as a sign of their operational rebound. From a macro perspective, consumption patterns in the quarter uptick slightly from the first quarter but are not enough to change the company's expectations for the remainder of the year. Jump expects the company to reaccelerate revenue growth by about 17% annually and scale to a 23% free cash flow margin by then. Jump expects third-quarter revenue and EPS of $495 million and 68 cents. Piper Sandler: The solid beat-and-raise suggests the worst of a two-year growth moderation is now behind MongoDB, Bracelin noted. The second-quarter top-line growth could mark a near-term quarterly trough, setting up for accelerating growth into next year. Bracelin expects further growth normalization back above the 20%+ range exiting next year, even with little benefit from artificial intelligence, another upside lever. The analyst adds that MongoDB remains a high-quality and profitable growth compounder with a modern cloud database facing favorable secular tailwinds that could help double revenue to $4 billion-$5 billion in three to five years. Solid execution, as evident by the quarterly beat-and-raise and underlying Atlas momentum, further increases Bracelin's conviction that growth investors rebuild core positions in MongoDB. Bracelin expects third-quarter revenue and EPS of $495.2 million and 68 cents. Goldman Sachs: MongoDB is well positioned to benefit from the growth of generative AI as their document model is best-in-class at processing rich, complex data structures quickly, and with more AI applications and data ultimately increasing the demand for Databases, Rangan noted. The analyst remains confident in MongoDB's ability to win an outsized share of the $100 billion+ database market that can support durable 20% growth mid-term. Rangan expects third-quarter revenue and EPS of $$495 million and 67 cents. JMP Securities: The rating followed the company, indicating healthier new business trends and Atlas strength. The company reported better-than-expected second-quarter results. The price target reflects a premium to the high-growth infrastructure peer group median multiple, which is warranted by MongoDB's attractive market opportunity and strong leadership team. Walravens expects third-quarter revenue and EPS of $496 million and 68 cents. Price Action: MongoDB stock traded up 16.75% at $286.87 at last check Friday. Now Read: Chipmakers Tick Up As Nvidia Halts Sell-Off, Dollar Rises As Traders Revise Fed Wagers: What's Driving Markets Friday? Image: Shutterstock Market News and Data brought to you by Benzinga APIs

MongoDB shares climb as KeyBanc lifts target with Overweight rating By Investing.com

On Friday, KeyBanc Capital Markets raised its price target on shares of MongoDB , Inc. (NASDAQ:MDB) to $330 from the previous $278, while maintaining an Overweight rating on the stock. The adjustment follows MongoDB's second-quarter financial results, which surpassed expectations, leading to a revenue beat of $13 million, or 3%. This performance marked an improvement over the previous quarter's $11 million, or 2.5%, revenue beat. MongoDB's management highlighted that its Atlas (NYSE:ATCO) product showed consumption trends that were slightly better than anticipated, although still below the year's initial forecasts. Enterprise Advanced (EA) also reported strong results, benefitting from what appears to be effective execution. Consequently, the forecast for FY25 revenue was increased by $35 million to $1,925 million, which is a 14% year-over-year growth and surpasses the consensus estimate of $1,905 million, or 13% year-over-year growth. The company has made strides in addressing earlier go-to-market execution issues and has adjusted sales incentives. These changes have reportedly led to an uptick in new business and positive early feedback from the sales field, although it is still considered too early to fully assess the impact on high-quality workload acquisition. KeyBanc's analyst sees MongoDB as a dominant player in the NoSQL database market, which is valued at over $106 billion. The firm also anticipates that MongoDB could significantly benefit from the rise of generative AI in the medium term, especially with its vector search offering. This optimistic outlook and higher earnings estimates are the basis for the raised price target. In other recent news, MongoDB has delivered strong results, surpassing consensus estimates in the second quarter of fiscal year 2024. This performance led Oppenheimer to maintain its Outperform rating and raise the price target to $350. Loop Capital also maintained a Buy rating, setting a target of $315, while Stifel increased its price target from $300 to $325. Needham and Truist Securities followed suit, raising their price targets to $335 and $320, respectively. These adjustments reflect MongoDB's robust second quarter, where the company reported a 13% year-over-year revenue increase, reaching $478 million, largely due to the success of its Atlas and Enterprise Advanced offerings. Looking ahead, MongoDB's management anticipates Q3 revenue to be between $493 million to $497 million, with full fiscal year 2025 revenue projected to be between $1.92 billion to $1.93 billion. According to InvestingPro data, MongoDB (NASDAQ:MDB) currently holds a market capitalization of $18.02 billion, highlighting its significant presence in the NoSQL database market. Despite a challenging period reflected in a 6-month price total return of -45.1%, MongoDB's revenue growth remains robust, with the last twelve months as of Q1 2023 showing a 29.15% increase. This growth underscores the company's ability to expand its revenue streams effectively, even in a volatile market. InvestingPro Tips suggest that MongoDB's financial health is supported by the fact that it holds more cash than debt on its balance sheet, and its liquid assets exceed short-term obligations. This positions the company well to manage its finances in the short term. Moreover, analysts predict the company will be profitable this year, which could be a turning point for MongoDB as it strives to improve its bottom line. For investors seeking more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/MDB.